SHRI RAJIV SHARMA, BHARATPUR V. PR.CIT, , ALWAR

ITA 257/JPR/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 0067 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 23-03-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K GUPTA CIT A
• Keywords: Opportunity of being heard; Principle of natural justice; Corroborative evidences; Procedural lapse
• Section: 143(3); 48; 119; 147; 148; 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 257/JP/2020 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2011-12 SH. RAJEEV SHARMA S/O SH. PRAHLAD SHARMA, ANAH GATE, LBS PARK, BHARATPUR. CUKE VS. THE PR. CIT, ALWAR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: CQMPS 3186 D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI RAJENDRA AGARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI B.K. GUPTA (CIT) A LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 05/01/2021 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 02/03/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER OF LD. PR.CIT(A), ALWAR DATED 04.02.2020 FOR THE ASSESSMEN T YEAR 2011-12 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND S OF APPEAL:- 1. THE PCIT HAS ERRED IN SETTING ASIDE THE ASSESSM ENT ORDER PASSED BY THE AO U/S 143(3)/147 ON 2.9.2018 WITH TH E DIRECTIONS TO PASS THE SPEAKING ASSESSMENT ORDER. 2. THE LD. PCIT HAS ERRED IN ISSUING SHOW CASE NOTI CE U/S 263 WITHOUT MENTIONING THE DIN. ITA NO. 257/JP/2020 SH. RAJEEV SHARMA VS. PCIT 2 3. THE LD. PCIT HAS ERRED IN PASSING ORDER U/S 263 MENTIONING THE DIN. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSMENT WAS COMPLETED U/S 147 R/W 143(3) AT THE RETURNED INCOME . SUBSEQUENTLY, A SHOW-CAUSE WAS ISSUED U/S 263 AND AFTER TAKING INTO CONSIDERATION, THE SUBMISSIONS SO FILED BY THE ASSESSEE, THE ASSESSMEN T ORDER SO PASSED BY THE AO WAS HELD TO BE ERRONEOUS IN SO FAR AS PRE JUDICIAL TO THE INTEREST OF REVENUE DUE TO FAILURE ON PART OF THE A O TO VERIFY THE SOURCE OF CASH DEPOSITS AND THE ASSESSMENT ORDER WAS SET-A SIDE TO THE FILE OF THE AO TO EXAMINE THE SAID MATTER AND DECIDE AFRESH AFTER MAKING PROPER ENQUIRIES. AGAINST THE SAID FINDINGS AND TH E ORDER OF THE LD PR CIT, THE ASSESSEE IS IN APPEAL BEFORE US. 3. REGARDING GROUND NOS. 1, THE LD. AR SUBMITTED TH AT AS EVIDENT FROM THE ASSESSMENT ORDER DT.25.09.2019, THE LD.AO VERY CLEARLY STATED THAT THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE AND SOURCES OF THE ABOVE TIME DEPOSITS AND CASH DEPOSITS. THE AR OF TH E ASSESSEE SUBMITTED REPLY VIDE LETTER DT.18.09.2018 IN WHICH HE STATED THAT THE ASSESSEE WAS ENGAGED IN AGRICULTURAL ACTIVITY HAVIN G 18 BIGHAS OF IRRIGATED LAND IN VILLAGE BEHRAWALI, KURKA TEHSIL- ROOPWAS, BHARATPUR IN THE NAME OF HIMSELF AND HIS BROTHER SHRI SURESH AND THEY WERE LIVING JOINTLY. THE COPY OF KHASRA AND JAMABANDI IS SUBMIT TED. THE ASSESSEE HAS DEPOSITED VARIOUS AMOUNT IN CASH IN SAVING ACCO UNT ON DIFFERENT DATES. CONSIDERING THE ABOVE FACTS AND DETAILS AVA ILABLE IN THE ASSESSMENT ORDER ITSELF, IT IS VERY MUCH CLEAR THAT THE AO MADE EACH EVERY INQUIRY AND EXAMINED THE DETAILED DOCUMENTARY EVIDENCES LIKE KHASRA AND JAMABNADI BEFORE ACCEPTING THE AGRICULTU RAL INCOME AND THE ITA NO. 257/JP/2020 SH. RAJEEV SHARMA VS. PCIT 3 ASSESSMENT MADE BY THE LD.AO CANNOT BE HELD AS ERRO NEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 4. IT WAS SUBMITTED THAT THE LD. PR. CIT HAS ONLY S UBSTITUTED HIS OPINION AS HIGHER AUTHORITY, WHICH IS UNLAWFUL, AND AGAINST THE NATURAL JUSTICE AND ALSO UNWARRANTED HARASSMENT TO THE ASSE SSEE. THE CASES LAWS RELIED BY THE LD. PCIT ARE NOT RELEVANT IN THE CASE OF THE ASSESSEE AS THE AO HAD ALREADY MADE ALL POSSIBLE ENQUIRES IN REGARD TO THE ISSUES CONCERNED AND AFTER EXAMINING ALL THE FACTS AND CIR CUMSTANCES AND EVIDENCE AVAILABLE ON RECORD, HE COMPLETED THE ASSE SSMENT PROCEEDINGS AND EVEN MENTIONED THE DETAILS OF HIS ENQUIRES AT P ARA NO.5 AT PAGE NO.2 OF THE ASSESSMENT ORDER SO PASSED BY HIM. 5. IN SUPPORT, RELIANCE WAS PLACED ON THE HONBLE A PEX COURT DECISION IN THE CASE OF CIT V. MAX INDIA LTD.(2007) 295 ITR 0282 (SC) WHEREIN IT WAS HELD THAT THE PHRASE PREJUDICIAL TO THE INTEREST OF REVENUE IN SECTION 263 OF THE ACT, HAS TO BE READ IN CONJUNCTION WITH THE EXPRESSION ERRONEOUS ORDER PASSED BY THE AO. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE AO CANN OT BE TREATED AS PREJUDICIAL TO THE INTEREST OF REVENUE. FOR EXAMPLE , WHEN THE AO ADOPTS ONE OF THE TWO COURSES PERMISSIBLE IN LAW AND IT HA S RESULTED IN LOSS OF REVENUE, OF WHERE TWO VIEWS ARE POSSIBLE AND THE AO HAS TAKEN ONE VIEW WITH WHICH HE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE REVENUE, U NLESS THE VIEW TAKEN BY THE AO IN UNSUSTAINABLE IN LAW. ITA NO. 257/JP/2020 SH. RAJEEV SHARMA VS. PCIT 4 6. IN THE CASE OF CIT V. GIRDHARI LAL (2002) 176 CT R (RAJ.) 0092/ 258 ITR 331 (RAJ.), IT WAS HELD BY THE HONBLE RAJA STHAN HIGH COURT THAT WHEN THE AO AFTER GOING THROUGH THE MATERIAL O N RECORD AND AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, COMPLE TED THE ASSESSMENT, IT CANNOT BE SAID THAT HE HAS NOT APPLIED HIS MIND. 7. BESIDES THE AFORESAID DECISIONS, THE RELIANCE W AS PLACED ON VARIOUS COORDINATES BENCH DECISION LAYING THE SAME LEGAL PROPOSITION AND IT WAS SUBMITTED THAT THE ASSESSMENT ORDER PASS ED U/S 147/143(3) BY THE LD.AO CANNOT BE HELD AS ERRONEOUS AND PREJUD ICIAL TO THE INTEREST OF REVENUE AND THE ORDER SO PASSED BY THE LD PR CIT SHOULD BE SET- ASIDE. 8. REGARDING GROUND NOS. 2 AND 3, THE LD. AR SUBMIT TED THAT IN TERMS OF CIRCULAR NO.19/2019 DT.14.08.2019, THE CBD T IN EXERCISE OF POWER UNDER SECTION 119 OF THE INCOME-TAX ACT, 1961 , HAS DECIDED THAT NO COMMUNICATION SHALL BE ISSUED BY ANY INCOME-TAX AUTHORITY RELATING TO ASSESSMENT, APPEALS, ORDERS, STATUTORY OR OTHERW ISE, EXEMPTIONS, ENQUIRY, INVESTIGATION, VERIFICATION OF INFORMATION , PENALTY, PROSECUTION, RECTIFICATION, APPROVAL ETC. TO THE ASSESSEE OR ANY OTHER PERSON, ON OR AFTER THE 1 ST DAY OF OCTOBER, 2019 UNLESS A COMPUTER-GENERATED DOCUMENT IDENTIFICATION NUMBER (DIN) HAS BEEN ALLOT TED AND IS DULY QUOTED IN THE BODY OF SUCH COMMUNICATION. BUT IN T HE INSTANT CASE, THE LD. PCIT, ALWAR VIOLATING THE ABOVE CIRCULAR AND IS SUED SHOW CAUSE NOTICE DT.11.11.2019 AND ORDER U/S 263 DT. 04.02.20 20 WITHOUT ITA NO. 257/JP/2020 SH. RAJEEV SHARMA VS. PCIT 5 GENERATING THE REQUIRED DIN AND WITHOUT QUOTING THE DIN IN THE BODY OF THE SHOW CAUSE NOTICE AND ORDER U/S 263. HENCE THE SHOW CAUSE NOTICE AS WELL AS THE ORDER U/S 263 PASSED BY THE LD. PCIT ARE INVALID AND NON EST IN LAW. 9. PER CONTRA, THE LD. CIT DR HAS RELIED ON THE FIN DINGS OF THE LD. PR CIT AND SUBMITTED THAT IT IS A CLEAR CASE WHERE THE SOURCE OF CASH DEPOSIT IN THE ASSESSEES BANK ACCOUNT HAS NOT BEEN VERIFIED BY THE AO RENDERING THE ASSESSMENT ORDER SO PASSED AS ERRONEO US AND PREJUDICIAL TO THE INTEREST OF REVENUE. FURTHER, R EGARDING NON-QUOTING OF DIN IN THE SHOW-CAUSE NOTICE AND THE ORDER PASSE D U/S 263, IT WAS SUBMITTED THAT CIRCULAR NO. 19/2019 IS INTENDED PRI MARILY FOR DEALING WITH COMMUNICATION RELATING TO ASSESSMENT PROCEEDIN GS AND DOES NOT APPLY TO REVISION PROCEEDINGS AND IN ANY CASE, THER E WAS NO LEGAL MANDATE TO ISSUE A SHOW-CAUSE AS HELD BY THE COURTS FROM TIME TO TIME SO LONG AS OPPORTUNITY OF BEING HEARD HAS BEEN PROVIDED TO THE ASSESSEE. FURTHER, THE REVISION ORDER CANNOT BE HE LD TO BE ILLEGAL AND VOID MERELY DUE TO NON-QUOTING OF DIN AND IT CAN AT BEST BE A PROCEDURAL IRREGULARITY WHICH CAN BE CURED IN TERMS OF SECTION 292B OF THE ACT IN VIEW OF THE FACT THAT IN SUBSTANCE, IT S ATISFIES THE REQUIREMENT OF SECTION 263 OF THE ACT. 10. IN HIS REJOINDER, THE LD. AR SUBMITTED THAT THE CIRCULAR NO.19/2019 DT.14.08.2019, AS EVIDENT FROM PARA 2 IS APPLICABLE TO EACH AND EVERY COMMUNICATION ISSUED BY THE INCOME TAX AU THORITY RELATING TO ASSESSMENT, APPEALS, ORDERS, STATUTORY OR OTHERWISE TO THE ASSESSEE OR ITA NO. 257/JP/2020 SH. RAJEEV SHARMA VS. PCIT 6 ANY OTHER PERSON ON OR AFTER 1.10.2019 AND THE ORDE R U/S 263 IS ALSO AN ORDER AND THE LD. PCIT, ALWAR IS AN INCOME TAX AUTH ORITY IN TERMS OF SECTION 116(BA) OF THE INCOME TAX ACT,1961. THE FAC TS OF THE CASES OF THE HONLE SUPREME COURT AND ALL THE OTHER CASE LAW S RELIED BY THE LD. PCIT IN HIS COMMENTS DT.25.09.2020 ARE ALTOGETHER D IFFERENT AND IN NO WAY RELATED TO THE AFORESAID CIRCULAR NO.19/2019 DT .14.08.2019 ISSUED BY CBDT AND EVEN THIS CIRCULAR NO.19/2019 DT.14.08. 2019 HAS BEEN ISSUED BY THE CBDT MUCH AFTER THE PRONOUNCEMENT OF THE CASE LAWS RELIED BY THE LD. PCIT. THERE IS NO CASE LAW RELIE D BY THE LD. PCIT WHICH HAS BEEN PRONOUNCED AFTER CONSIDERING THIS CI RCULAR NO.19/2019 DT.14.08.2019. IT WAS FURTHER SUBMITTED THAT IN TE RMS OF PRESS RELEASE OF PIB DELHI DT.14.8.2019, THE CBDT HAD CLARIFIED T HAT ANY COMMUNICATION WHICH IS NOT IN CONFORMITY WITH THE P RESCRIBED GUIDELINES SHALL BE TREATED AS INVALID AND SHALL BE DEEMED TO HAVE NEVER BEEN ISSUED. HENCE NOW IT IS VERY MUCH CRYSTAL CLEAR TH AT THE LD. PCIT, ALWAR VIOLATING THE ABOVE CIRCULAR ISSUED SHOW CAUS E NOTICE DT.11.11.2019 AND ORDER U/S 263 DT.04.02.2020 WITHO UT GENERATING THE REQUIRED DIN AND WITHOUT QUOTING THE DIN IN THE BOD Y OF THE SHOW CAUSE NOTICE AND ORDER U/S 263. HENCE THE SHOW CAUS E NOTICE AS WELL AS THE ORDER U/S 263 PASSED BY THE LD. PCIT ARE INVALI D AND NON EST IN LAW. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE, THE NOTICE U/S 1 48 OF THE ACT WAS ISSUED ON ACCOUNT OF THE REASONS THAT THE ASSESSEE HAS DEPOSITED CERTAIN CASH IN HIS BANK ACCOUNT MAINTAINED WITH BH ARATPUR URBAN COOPERATIVE BANK. THEREAFTER DURING THE COURSE OF A SSESSMENT ITA NO. 257/JP/2020 SH. RAJEEV SHARMA VS. PCIT 7 PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE AND SOURCE OF SUCH CASH DEPOSIT WHICH WAS EXAMINED BY THE AO A ND THE RELEVANT FINDINGS ARE CONTAINED AT PARA 4 AND 5 OF THE ASSES SMENT ORDER PASSED U/S 147 OF THE ACT DATED 25.09.2018 WHICH READ AS U NDER:- 4. AS PER INFORMATION AVAILABLE WITH THE DEPARTME NT IT IS GATHER THAT THE ASSESSEE HAD CASH/TIME DEPOSITED RS. 15,40 ,000/- IN HIS BANK ACCOUNT MAINTAINED WITH BHARATPUR URBAN CO-OPE RATIVE BANK, BHARATPUR. BUT ON GOING THROUGH THE STATEMENT OF ACCOUNT OF THE ASSESSEE IT WAS FOUND THAT THE ASSESSEE HAS DEPOSITED FOLLOWING CASH IN HIS SAVING ACCOUNT:- DATE AMOUNT 24.05.2010 2,90,000/- 12.06.2010 50,000/- 19.11.2010 1,00,000/- RS. 4,40,000/- THUS, THE ASSESSEE DEPOSITED CASH OF RS. 4,40,000/- ONLY INSTEAD OF RS. 15,40,000/-. 5. THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE AND SOURCE OF ABOVE TIME DEPOSITS AND CASH DEPOSITS. THE AR OF TH E ASSESSEE SUBMITTED REPLY VIDE LETTER DATED 18.09.2018 IN WHI CH STATED THAT THE ASSESSEE WAS ENGAGED IN AGRICULTURE ACTIVITY HA VING 18 BIGHA OF IRRIGATED LAND IN VILLAGE BEHRAWALI, KURKA, TEHI SL ROOPWAS, BHARATPUR IN THE NAME OF HIMSELF AND HIS BROTHER SH . SURESH AND THEY ARE LIVING JOINTLY. THE COPY OF KHASRA AND JAM ABANDI IS SUBMITTED. THE ASSESSEE WAS DEPOSITED VARIOUS AMOUN T IN CASH IN SAVING ACCOUNT ON DIFFERENT DATED IN URBAN COOPERAT IVE BANK RS. 2,90,000/- HAS BEEN DEPOSITED ON 24.05.2010 OUT OF SALE OF AGRICULTURE PRODUCE DURING THE YEAR AND REMAINING A MOUNT OF RS. 1,50,000/- OUT OF WITHDRAWAL MADE FROM OD ACCOUNT A ND SAME HAS BEEN DEPOSITED. ITA NO. 257/JP/2020 SH. RAJEEV SHARMA VS. PCIT 8 12. THE LD. PR.CIT HAS HOWEVER STATED THAT THE ORDE R SO PASSED BY THE ASSESSING OFFICER IS ERRONEOUS SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AS THE ORDER IS BASED ON MI STAKEN VIEW OF LAW AND ERRONEOUS APPLICATION OF PROVISIONS OF THE ACT. IT HAS BEEN FURTHER STATED THAT DURING THE REVISION PROCEEDINGS, IT IS FOUND THAT THE ASSESSEE FAILED TO SUBMIT THE SOURCE OF CASH DEPOSIT MADE IN HIS BANK ACCOUNT AND THE AO HAS NOT MADE PROPER INVESTIGATION AND VE RIFICATION OF THE ISSUE. 13. WE HOWEVER FIND THAT HOW THE ORDER SO PASSED BY THE AO IS BASED ON MISTAKEN VIEW OF LAW OR HOW THE AO HAS ERR ONEOUS APPLIED THE PROVISIONS OF THE LAW HAS NOT BEEN SPELT OUT BY THE LD PR CIT. FURTHER, THERE IS A CLEAR FINDING GIVEN BY THE ASSE SSING OFFICER IN THE ASSESSMENT ORDER, AS WE HAVE NOTED ABOVE, WHERE THE ASSESSEE WAS ASKED TO EXPLAIN THE NATURE AND SOURCE OF THE CASH DEPOSIT IN HIS BANK ACCOUNT AND AFTER CONSIDERING THE SUBMISSIONS SO FI LED BY THE ASSESSEE ALONG WITH CORROBORATIVE EVIDENCES THAT THE SOURCE OF SUCH CASH DEPOSITS ARE OUT OF HIS AGRICULTURAL PRODUCE, THE C ASH DEPOSITS WERE FOUND DULY EXPLAINED AND THE RETURNED INCOME WAS AC CEPTED. THEREFORE, THE FINDINGS OF THE LD PR CIT THAT THE ASSESSEE FAI LED TO SUBMIT THE SOURCE OF CASH DEPOSIT MADE IN HIS BANK ACCOUNT AND THE AO HAS NOT MADE PROPER INVESTIGATION AND VERIFICATION OF THE I SSUE IS BORNE OUT OF THE RECORDS AND THEREFORE CANNOT BE ACCEPTED. IN V IEW OF THE SAME, WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO BASIS T O HOLD THAT THE ORDER SO PASSED BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN VIEW OF THE SAME, OTHER ITA NO. 257/JP/2020 SH. RAJEEV SHARMA VS. PCIT 9 CONTENTION RAISED BY THE LD AR REGARDING NON-QUOTIN G OF DIN IS CONSIDERED NOT NECESSARY TO ADJUDICATE AND LEFT OPE N. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 02/03/2021. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 02/03/2021. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. RAJEEV SHARMA, BHARATPUR. 2. IZR;FKHZ@ THE RESPONDENT- PR. CIT, ALWAR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 257/JP/2020} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR