ITO, Faridabad V. Sh. Satyabir Singh, Faridabad

ITA 2663/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3847 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 26-05-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 03-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRUJAN MOHANTY
• Section: 147; 148; 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER I.T.A NOS. 2662,2663/DEL/10 ASSTT. YEARS 1997-98, 1998-99 ITO WARD-1(5), BLOCK-1-B, NEW CGO COMPLEX, NH-IV FARIDABAD. VS. SATYABIR SINGH, S/O SH. TEK RAM, VILL. JHARSAITLY, FARIDABAD AGNPD3261F (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SRUJAN MOHANTY, SR. DR. RESPONDENT BY: SHRI VIJAY KUMAR GUPTA, ADVOCATE ORDER PER BENCH : THE PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANC E OF REVENUE AGAINST THE COMMON ORDER OF LD. CIT(A) DATED 9 TH MARCH, 2010 PASSED FOR ASTTT. YEAR 1997-98 AND 1998-99. THE GRIEVANCE OF THE REVENUE IS THAT LD. CIT(A) HAS ERRED IN CANCELING THE ASSTT. O RDERS. 2. THE BRIEF FACTS OF THE CASE ARE THAT AO HAD RECE IVED AN INFORMATION THAT ASSESSEE HAD RECEIVED ADDITIONAL COMPENSATION AND INTEREST THEREON, ON THE ACQUISITION OF LAND BY THE STATE GO VERNMENT. HE ISSUED A NOTICE U/S 148 OF THE INCOME TAX ACT IN BOTH THE ASSTT. YEARS. IN ITA NOS. 2662,2663/DEL/10 ASSTT . YEARS 1997-98, 1998-99 2 RESPONSE TO THE NOTICE, ASSESSEE FILED RETURN OF IN COME ON 30 TH MARCH, 1999. AN ASSESSMENT ORDER U/S 143 (3) READ WITH SEC TION 147 WAS PASSED ON 7 TH FEBRUARY, 2001 BY THE LD. INCOME TAX OFFICER. HE DETERMINED THE INCOME OF ASSESSEE AT ` 4,74,250/- AND ` 11,02,880/- AND THE AGRICULTURAL INCOME OF ` 169650/- AND ` 1,77,700/- RESPECTIVELY IN BOTH THE ASSTT. YEARS. THE ASSESSMENTS WERE FRAMED IN THE STATUS OF INDIVIDUAL. 3. DISSATISFIED WITH THE ASSTT. ORDER, ASSESSEE FIL ED APPEALS BEFORE THE LD. COMMISSIONER. LD. CIT(A) QUASHED THE ASSTT. ORD ER BY OBSERVING THAT LD. CIT ROHTAK TOOK COGNIGENCE OF THIS ISSUE U/S 2 63 OF THE INCOME TAX ACT ON 23 RD MARCH, 2001. LD. CIT ROHTAK HAS OBSERVED THAT ALL THE SUMS RECEIVED AS A COMPENSATION OR INTEREST SHALL B E TAX IN THE HANDS OF HUF ONLY, OF SHRI TEK RAM, FATHER OF THE ASSESSE E, AS KARTA. SINCE THE COMPENSATION WAS TOBE ASSESSED IN THE HANDS OF SHR I TEK RAMS HUF, LD. CIT(A) SET ASIDE THE ASSTT. ORDER AND OBSERVED THAT AO SHALL PROCEED AS PER LAW. 4. THE AO PASSED THE FRESH ASSTT. ORDER IN THE CAPA CITY OF SHRI SATVIR SINGH HUF. THIS DISPUTE TRAVELED UP TO THE TRIBUNAL IN ITA NO. 4624, 4625/DEL/2003. THE TRIBUNAL HAS QUASHED THE ASSTT. ORDER ON THE GROUND THAT ORIGINAL NOTICES WERE ISSUED IN THE STATUS OF INDIVIDUAL AND NO NOTICE U/S 148 IN A WAY WAS ISSUED ON THE HUF. THE AO CANN OT CHANGE THE ITA NOS. 2662,2663/DEL/10 ASSTT . YEARS 1997-98, 1998-99 3 STATUS OF AN INDIVIDUAL IN THE HUF. THE FINDING OF THE TRIBUNAL REPRODUCED BY LD. CIT(A) READ AS UNDER :- SINCE IN THE PRESENT CASE, THE ORIGINAL NOTICES WE RE ISSUED IN THE STATUS OF INDIVIDUAL AND EVEN ASSESSMENTS WERE FRAM ED IN THE STATUS OF INDIVIDUAL, ON THE DIRECTION OF CIT(A) TO FRAME THE ASSESSMENTS AFRESH, THE STATUS OF ASSESSEE CANNOT BE CHANGED TO HUF WIT HOUT PRIOR ISSUE OF NOTICE IN THE STATUS OF HUF. WE, THEREFORE, SET ASIDE THE ASSESSMENTS FOR BOTH THE YEARS. 5. THE AO HAS AGAIN PASSED THE ASSTT. ORDER IN THE CAPACITY OF INDIVIDUAL. THE LD. CIT(A) HAS SET ASIDE THESE ASST T. ORDERS. 6. WITH THE ASSISTANCE OF LD. REPRESENTATIVE, WE H AVE GONE THROUGH THE RECORD CAREFULLY. IN OUR OPINION, LD. FIRST APP ELLATE AUTHORITY HAS RIGHTLY CANCELLED THE IMPUGNED ASSTT. ORDERS. IN TH E CAPACITY OF INDIVIDUAL, ASSTT. ORDERS WERE PASSED BY THE LD. AO WHICH WERE QUASHED BY THE LD. CIT. THAT ORDER OF THE LD. CIT(A) WAS NOT CHALLENGE D BY THE REVENUE IN FURTHER APPEAL. THIS ORDER WAS PASSED, KEEPING IN V IEW THE ORDER OF THE LD. CIT(A) PASSED U/S 263. ACCORDING TO THAT ORDER , COMPENSATION IS TO BE ASSESSED IN THE CAPACITY OF HUF WHOSE KARTA IS S HRI TEK RAM. THE AO HAS PASSED THE ASSTT. ORDER IN THE HANDS OF HUF BY TREATING THE ASSESSEE AS KARTA. THIS ORDER HAS BEEN QUASHED ON THE GROUND THAT NO NOTICE U/S 148 WAS ISSUED FOR REOPENING THE ASSESSM ENT OF THE HUF. THE AO CANNOT CHANGE THE STATUES OF THE INDIVIDUAL IN THE HUF IN A SET ASIDE PROCEEDING. IF THE AO WAS OF THE OPINION THAT INCOME IN THE HANDS OF THE HUF HAD ESCAPED THEN HE OUGHT TO HAVE ISSUED NOTICE U/S 148 ITA NOS. 2662,2663/DEL/10 ASSTT . YEARS 1997-98, 1998-99 4 SUBJECT TO FULFILLMENT OF LEGAL CRITERIA. THE AO DI D NOT CHOOSE THIS COURSE RATHER HE CONVERTED THE ASSTT. PROCEEDING OF AN IND IVIDUAL INTO PROCEEDING OF HUF. THIS VIEW OF THE AO DID NOT MEET THE APPROVAL OF THE TRIBUNAL. NOW AGAIN AO HAS PASSED THE ASSTT. ORDER IN THE CAPACITY OF INDIVIDUAL IS NOT IN LAW BECAUSE ALREADY THERE WAS ASSTT. ORDERS WHICH WERE QUASHED BY THE LD. CIT(A) AND THE ORDER OF THE LD. CIT(A) HAD BECOME FINAL. THE LD. FIRST APPELLATE AUTHORITY HAS CONSIDERED ALL THESE ASPECTS WHILE CANCELING THE ASSTT. ORDERS AS NULL A ND VOID, WE DO NOT FIND ANY MERIT IN THESE APPEALS. THEY ARE REJECTED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.5.2011. SD/- SD/ - [K.G. BANSAL] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31.5.2011 VEENA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) TRUE COPY BY ORDER 5. DR, ITAT DEPUTY R EGISTRAR, ITAT