Swapnil Kisan Karande, Aurangabad V. Income-tax Officer, Ward - 2(3), Aurangabad

ITA 2631/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4092 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-11-2018
• Assessment Year: 2008-2009
• Appeal Filed On: 14-11-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Assessee Lawyers: RAMESH N THETE
• Keywords: Principle of natural justice; Reason to believe
• Section: 147

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, P UNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO. 2631/PUN/2017 / ASSESSMENT YEAR : 2008-09 SWAPNIL KISAN KARANDE, C/O. CA KEDAR DATTATRAY GOGATE, MANIK APARTMENTS, NEAR MONALISA, BEARUTY PARLOUR, SAMARTHNAGAR, AURANGABAD (MS)-INDIA, PIN-431 001 PAN : ARXPK6056E .... / APPELLANT ! / V/S. THE INCOME TAX OFFICER, WARD 2(3), AURANGABAD. / RESPONDENT ASSESSEE BY : SHRI RAMESH N. THETE REVENUE BY : SHRI M.K. VERMA / DATE OF HEARING : 06.02.2019 / DATE OF PRONOUNCEMENT : 07.02.2019 ' / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF LD. CIT(APPEALS)-2, AURANGABAD DATED 01.08.2017 FOR THE ASSES SMENT YEAR 2008- 09 AS PER GROUNDS OF APPEAL ON RECORD. 2 ITA NO. 2631/PUN/2017 A.Y.2008-09 2. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE S UBMITTED THAT HE WANTS TO ARGUE THE LEGAL GROUND FIRST I.E. WHETHER THE REA SONS RECORDED FOR RE- OPENING OF ASSESSMENT BY THE ASSESSING OFFICER FORMS REAS ON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT AS MANDATED WITHIN THE P ROVISIONS OF SECTION 147/148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT). 3. WE HAVE THEREFORE, PERUSED THE COPY OF THE REASONS RECORDED PLACED IN PAPER BOOK BEFORE US WHICH IS EXTRACTED AS UNDER:- REASONS FOR ESCAPEMENT OF INCOME U/S.147 OF THE ACT . AS PER THE AIR/CIB INFORMATION RECEIVED, THE ABOVE ASSESSEE HAS DEPOSITED THE CASH AMOUNT OF RS.16,04,400/- IN HIS SAVING BANK ACCOUNT DURING THE F.Y.2007-08. LETTER OF VERIFICATION OF F INANCIAL TRANSACTION WAS ISSUED ON 26/12/2014 TO VERIFY THE GENUINENESS OF THE TRAN SACTION BUT THE ASSESSEE IS NOT RESPONDED THE SAME. AS PER PARA-3 OF THE SAID L ETTER, THE ASSESSEE WAS REQUIRED TO FURNISH THE DETAILS OF SOURCES OF THE F INANCIAL TRANSACTION ALONG WITH COPIES OF DOCUMENTS IN SUPPORT OF HIS CLAIM. ON VERIFICATION OF AST DATA, IT IS SEEN THAT THE AS SESSEE HAS NOT FURNISHED HIS RETURN OF INCOME FOR THE A.Y.2008-09. THE ASSESSEE HAS NOT OFFER THE AMOUNT OF RS.16.04 LAKH FOR TAXATION. IN VIEW OF THE ABOVE, I HAVE THUS REASON TO BELIEVE THAT THE AMOUNT OF RS.16,04,400 HAS ESCAPED ASSESSMENT WITHIN THE MEAN ING OF SECTION 147 OF THE ACT. ISSUE NOTICE U/S.148 OF THE I.T. ACT, 1961. SD/- ( S.K. BHAGAT) INCOME TAX OFFICER, WARD 2(3), AURANGABA D. 4. THAT ON PERUSAL OF THE REASONS, IT IS CLEAR THAT WITH R EGARD TO THE CASH DEPOSIT OF RS.16,04,400/- IN F.Y.2007-08 RELEVANT TO ASSESS MENT YEAR 2008- NAME AND ADDRESS OF THE ASSESSEE SHRI KARANDE SWAPN IL KISAN N-9, K-56-5, PAWAN NAGAR, CIDCO, AURANGABAD A.Y. 2008-09 PAN ARXPK6056E 3 ITA NO. 2631/PUN/2017 A.Y.2008-09 09, THE LETTER OF VERIFICATION OF FINANCIAL TRANSACTION WAS ISS UED ON 26/12/2014 TO VERIFY THE GENUINENESS OF THE TRANSACTION BUT THE ASSESSEE HAS NOT RESPONDED TO THE SAME. 5. ON THIS ASPECT, THE LD. AR STATED THAT THERE WAS CH ANGE OF ADDRESS AND THE ASSESSEE DID NOT RECEIVE ANY NOTICE OR LETTER AS SU CH AND THEREFORE, WAS NOT ABLE TO RESPOND. RE-ENQUIRED WHETHER THE CHANGE OF ADDRESS WAS COMMUNICATED BY THE ASSESSEE TO THE DEPARTMENT, THE L D. AR SUBMITTED THAT CHANGE OF ADDRESS WAS NOT COMMUNICATED TO THE DEPARTM ENT BY THE ASSESSEE. FURTHERMORE, COMING BACK TO THE REASONS RECORDED, THE ASSESSEE WAS REQUIRED TO FURNISH DETAILS OF SOURCES OF THE FINANCIAL TRANSACTION ALO NG WITH COPIES OF DOCUMENTS IN SUPPORT OF HIS CLAIM. THIS WAS ALSO NOT DONE B Y THE ASSESSEE. FURTHER, IN THE REASONS RECORDED, IT IS STATED ON VERIFICAT ION OF AST DATA, THAT THE ASSESSEE HAS NOT FURNISHED HIS RETURN OF INCOME FOR T HE ASSESSMENT YEAR 2008-09. THE ASSESSEE HAS NOT OFFERED THE AMOUNT OF RS.1 6.04 LAKH FOR TAXATION. IN VIEW OF ABOVE, THE ASSESSING OFFICER HAS REASO N TO BELIEVE THE AMOUNT OF RS.16,04,400/- ESCAPED THE ASSESSMENT WITHIN TH E MEANING OF SECTION 147 OF THE ACT. THEREFORE, THERE ARE NUMBER OF R EASONS IN THIS CASE BECAUSE OF WHICH, THE ASSESSING OFFICER REOPENED THE ASSES SMENT WHICH ARE AS FOLLOWS: I) LETTER OF VERIFICATION ISSUED ON 26/12/2014 TO VERIFY TH E GENUINENESS OF TRANSACTION WAS NOT RESPONDED TO BY THE ASSESSEE. II) THE ASSESSEE WAS REQUIRED TO FURNISH THE DETAILS OF SOUR CES OF THE FINANCIAL TRANSACTION ALONG WITH COPIES OF DOCUMENTS IN SUPPO RT OF HIS CLAIM. III) AS PER AST DATA, THE ASSESSEE HAS NOT FURNISHED HIS RE TURN OF INCOME FOR THE A.Y.2008-09. THE ASSESSEE HAS NOT OFFERED THE AMOUNT OF RS.16.04 LAKH FOR TAXATION. 4 ITA NO. 2631/PUN/2017 A.Y.2008-09 THESE ARE SUFFICIENT REASONS FOR FORMING REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT FOR REOPENING OF THE ASSESSMENT AND THEREFORE, THE ASSESSEE FAILS IN THIS LEGAL GROUND. 6. IN VIEW OF THE MATTER, WE HELD THAT THE ASSESSING OFFIC ER WAS JUSTIFIED IN REOPENING OF THE ASSESSMENT IN THIS CASE. THEREFORE, LEGAL GROUND OF THE ASSESSEE IS DISMISSED . 7. THAT SO FAR AS THE GROUNDS ON MERITS ARE CONCERNED , THE ASSESSEE CONTENDS THAT THE ENTIRE RECEIPTS/CASH DEPOSITS ARE CO NSIDERED AS INCOME, WITHOUT CONSIDERING THE INCOME/PROFIT EMBEDDED IN THE REC EIPTS/CASH DEPOSITS. THE FACT THAT THE ASSESSEE HAS CARRIED TWO BU SINESSES IN THAT YEAR HAS NOT BEEN CONSIDERED BY THE LD. CIT(APPEALS). THE LD . CIT(APPEALS)/LD. AO HAS NOT BROUGHT ANY MATERIAL ON RECORD TO JUSTIFY T HAT THE ABOVE RECEIPTS ARE NET INCOME OF THE ASSESSEE. THAT FOR VERIFICATION OF T HIS ASPECT, IT WAS PRAYED BY THE LD. AR OF THE ASSESSEE THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE LD. CIT(APPEALS). 8. THE LD. DR DID NOT OBJECT TO THE REQUEST OF THE ASSESSEE. 9. ON HEARING BOTH THE SIDES ON THIS ISSUE, WE ARE OF THE CONSIDERED VIEW THAT THE GROUNDS ON MERITS NEEDS TO BE ADJUDICATED AFT ER DETAILED FACTUAL VERIFICATION THROUGH A SPEAKING ORDER BY THE LD. CIT(APPEALS). IN VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE LD . CIT(APPEALS) AND THE GROUNDS ON MERITS ARE REMANDED TO THE FILE OF THE FIR ST APPELLATE AUTHORITY FOR ADJUDICATION IN COMPLIANCE WITH THE PRINCIPLES OF NATURAL JUSTICE. 5 ITA NO. 2631/PUN/2017 A.Y.2008-09 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 07 TH DAY OF FEBRUARY, 2019. SD/- SD/- D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 07 TH FEBRUARY, 2019. SB '#$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-2, AURANGABAD. 4. THE PR. CIT-2, AURANGABAD. 5. '#$ %%&' , ( &' , - )*+ , / DR, ITAT, SMC BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 6 ITA NO. 2631/PUN/2017 A.Y.2008-09 DATE 1 DRAFT DICTATED ON 0 6 .0 2 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 0 6 .0 2 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER