Sonam Wangchuk Narboo, Gurgaon V. ITO, New Delhi

ITA 2734/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58808 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 28-02-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 27-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MOHANTHY
• Keywords: Income from undisclosed sources
• Section: 142(1); 69; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH :G : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER ITA NOS.2733 & 2734/DEL/2011 ASSESSMENT YEAR : 2005-06 SONAM WANGCHUK NARBOO, A-10/5, GROUND FLOOR, DLF PHASE-I, GURGAON. PAN : ACHPN9771A VS. ITO, WARD 22 (4), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SMT. S. MOHANTHY, DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER BOTH THESE APPEALS ARE FILED BY THE ASSESSEE. THEY ARE DIRECTED AGAINST THE TWO SEPARATE ORDERS PASSED BY THE CIT (A) DA TED 24 TH FEBRUARY, 2010 FOR ASSESSMENT YEAR 2005-06. 2. ITA NO.2733/DEL/2011 IS AN APPEAL AGAINST THE QUA NTUM AND ITA NO.2734/DEL/2011 IS AN APPEAL AGAINST LEVY OF PENALTY OF ` 5,000/- UNDER THE PROVISIONS OF SECTION 271F FOR NON-FILING O F THE RETURN. THE GROUNDS OF APPEAL READ AS UNDER:- ITA NO.2733/DEL/2011 1. THE ORDER PASSED BY THE LD. ASSESSING OFFICER IS ARBITRARY, BAD IN LAW AND AGAINST THE FACTS OF THE CASE. 2. THE ASSESSEE HAD REPLIED IN RESPONSE TO NOTICE ISS UED U/S 142(1) ON DT. 17.12.2007 WHICH WAS IGNORED BY THE LD. ASSESSING AUTHORITY. ITA NOS.2733 & 2734/DEL/2011 2 3. THE LD. ASSESSING AUTHORITY IGNORED THE VITAL FACT THA T THE ASSESSEE IS A MEMBER OF SCHEDULED TRIBE AND A PERMANENT RESIDENT OF LADAKH, HENCE, NOT LIABLE TO FILE INCOME-TAX UNDER THE PROVISIONS OF INCOME-TAX ACT, 1961 . 4. THE LD. ASSESSING AUTHORITY ALSO IGNORED THE VITAL F ACT THAT THE INVESTMENT MADE BY THE ASSESSEE IS OUT OF HIS INCOME ACCRUED OR ARISEN IN THE LADAKH. 5. THE ASSESSEE RETAINS THE RIGHT TO ADD, AMEND OR ALTER ANY OR ALL GROUNDS OF APPEAL. 6. IT IS MOST HUMBLY PRAYED THAT THE UNJUSTIFIED ADDITIONS MADE MAY PLEASE BE DELETED IN INTEREST OF JUSTICE. ITA NO.2734/DEL/2011 1. THE ORDER PASSED BY THE LD. ASSESSING OFFICER IS ARBITRARY, BAD IN LAW AND AGAINST THE FACTS OF THE CASE. 2. THE ASSESSEE HAD FILED A REPLY DT. 14.1.2008 IN R ESPONSE TO NOTICE ISSUED U/S 271F DATED 26.12.2007 BY THE LD. ASS ESSING AUTHORITY BUT NO COGNIZANCE OF THE SAME WAS TAKEN BY HIM WHILE PASSING THE PENALTY ORDER U/S 271(1)(B). 3. THE LD. ASSESSING AUTHORITY ALSO DIDNT TAKE INTO ACC OUNT THE COPY OF LETTER DATED 17.12.2007 OF THE ASSESSEE SENT ALO NG WITH LETTER FILED ON 14.1.2008 EXPLAINING THE CIRCUMSTAN CES OF HIS INVESTMENT IN MUTUAL FUNDS. 4. THE LD. ASSESSING AUTHORITY IGNORED THE VITAL FACT THA T THE ASSESSEE IS A MEMBER OF SCHEDULED TRIBE AND A PERMAN ENT RESIDENT OF LADAKH, HENCE, NOT LIABLE TO FILE INCOME-TA X RETURN UNDER THE PROVISIONS OF INCOME-TAX ACT, 1961. 5. THE LD. ASSESSING AUTHORITY ALSO IGNORED THE VITAL F ACTS THAT THE INVESTMENT MADE BY THE ASSESSEE IS OUT OF HIS INCOME ACCRUED OR ARISEN IN THE LADAKH. 6. THE ASSESSEE RETAINS THE RIGHT TO ADD, AMEND OR ALTER ANY OR ALL GROUNDS OF APPEAL. 7. IT IS MOST HUMBLY PRAYED THAT THE UNJUSTIFIED PENALTY I MPOSED MAY PLEASE BE DELETED IN INTEREST OF JUSTICE. 3. AT THE OUTSET, IT MAY BE MENTIONED THAT THE IMPUGNED ORDER PASSED BY LD. ASSESSING OFFICER AND CIT (A) ARE EX PARTE ORDERS. THE IMPUGNED ASSESSMENT ORDER IS DATED 26 TH DECEMBER, 2007 PASSED U/S ITA NOS.2733 & 2734/DEL/2011 3 144 OF THE ACT. IT HAS BEEN MENTIONED IN THE ASSESSMENT ORDER THAT SYSTEM HAS PROVIDED AN INFORMATION ACCORDING TO WHICH THE ASSESSEE HAD MADE INVESTMENT IN MUTUAL FUND OF ` 14 LAC IN SU NDARAM AND KOTAK MAHINDRA MUTUAL FUND DURING THE ASSESSMENT YEAR 2 005-06. A NOTICE U/S 142(1) WAS ISSUED ON 29 TH SEPTEMBER, 2007, THROUGH SPEED POST ASKING THE ASSESSEE TO FILE THE RETURN OF INCOME AS R ETURN OF INCOME IS NOT FILED U/S 139(1). IT IS FURTHER STATED I N THE ASSESSMENT ORDER THAT THE NOTICE REMAINED UNCOMPLIED WITH. AN OTHER NOTICE U/S 142(1) ALONG WITH LETTER DATED 7.12.2007 WAS ISSUED T O THE ASSESSEE CALLING FOR THE EXPLANATION OF THE SOURCE OF INVESTME NT MADE IN THE MUTUAL FUND DURING THE PERIOD FROM 1.4.2004 TO 31 ST MARCH, 2005 WHICH ALSO REMAINED UNCOMPLIED WITH. IN THE ABSENCE OF ANY EXPLANATION/SOURCE OF INVESTMENT, THE SAID AMOUNT OF ` 14 LAC IS TREATED AS ASSESSEES INCOME FROM UNDISCLOSED SOURCES U/S 69 O F THE ACT. ALONG WITH OTHER PENALTIES, PENALTY U/S 271F WA S ALSO INITIATED. 4. IN THE STATEMENT OF FACTS, FILED BEFORE THE CIT (A ), IT WAS MENTIONED THAT IN RESPONSE TO NOTICE ISSUED BY THE ASSESSIN G OFFICER DATED 7 TH DECEMBER, 2007 UNDER THE PROVISIONS OF SECTION 142 ( 1) THE ASSESSEE HAD SUBMITTED THE REPLY DATED 17 TH DECEMBER, 2007. IN THE GROUNDS OF APPEAL BEFORE THE CIT (A) IT WAS MENTIONED THAT THE REPLY SUBMITTED BY THE ASSESSEE WAS IGNORED BY THE ASSESSING OFFICE R. THE ASSESSING OFFICER ALSO IGNORED A VITAL FACT THAT THE ASSESSE E IS A MEMBER OF THE SCHEDULED TRIBE AND A PERMANENT RESIDE NT OF LADAKH, THEREFORE, NOT LIABLE TO FILE INCOME-TAX RETURN UND ER THE PROVISIONS OF THE IT ACT, 1961. 5. IN THE ORDER OF CIT (A) IT HAS BEEN MENTIONED THA T APPEAL BEFORE THE CIT (A) WAS FILED ON 24 TH JANUARY, 2008 AND IN FORM NO.35 ADDRESS ON WHICH THE NOTICES WERE TO BE SENT TO THE ASSESSEE WERE NOTED AS K- 40, HAUZ KHAS ENCLAVE, NEW DELHI. SUBSEQUENTLY, IN T HE LETTER DATED 4.6.2009 WHICH WAS SIGNED BY THE ASSESSEE, NEW ADDRESS WAS ITA NOS.2733 & 2734/DEL/2011 4 INTIMATED AND THAT LETTER WAS FILED ON 4 TH JUNE, 2009. THE CONTENTS OF THE LETTER HAVE BEEN REPRODUCED IN THE ORDER OF CIT (A) IN WHICH IT WAS MENTIONED THAT PRESENTLY THE ASSESSEE IS SETTLED AT LADAKH AND IT WAS ALSO REQUESTED THAT IT CAN BE THE CASE FOR HEARING AT EARLIEST DATE. IT WAS ALSO MENTIONED THAT THE ASSESSEE HAS LEFT DELHI, THERE FORE, ALL FUTURE CORRESPONDENCES SHOULD BE MADE AT CHARTERED ACC OUNTANTS ADDRESS WHICH WAS GIVEN AS MR. ARUN AHUJA, A-337, SHIVA LIK, NEW DELHI 110 017. REFERRING TO THE AFOREMENTIONED LETTER, LEARNED CIT (A) ISSUED NOTICE TO THE ASSESSEE DATED 21 ST JANUARY, 2010 AND THE DATE OF HEARING WAS FIXED FOR 18 TH FEBRUARY, 2010. THE NOTICE WAS SENT BY REGISTERED A/D WHICH NOTICE HAS BEEN RETURNED BACK TO THE FILE OF CIT (A) WITH THE ENDORSEMENT LEFT WITHOUT ADDRESS. IN TH IS VIEW OF THE SITUATION, LEARNED CIT (A) HAS PRESUMED THAT THE ASSESSEE IS NOT INTERESTED IN PROSECUTING HIS APPEAL AND, APPLYING THE DECISION OF THE TRIBUNAL IN THE CASE CIT VS. MULTIPLAN INDIA PVT. LT D. 38 ITD 320 (DEL), HE EXPRESSED THE OPINION THAT THE APPEAL SHOULD BE DISM ISSED. HOWEVER, HE PROCEEDED TO ADJUDICATE THE APPEAL BASED ON THE MATERIAL PLACED ON RECORD. AFTER REPRODUCING THE ASSESSMENT ORD ER, LEARNED CIT (A) OBSERVED THAT THE ASSESSEE DID NOT FILE ANY DETAILS B EFORE THE ASSESSING OFFICER AND THE FACT THAT THE ASSESSEE HAD INVESTE D ` 14 LAC REMAINED UNDISPUTED. THE ONLY ISSUE TAKEN BY THE ASSESSEE THAT HIS INCOME WAS EXEMPT WAS ON THE GROUND THAT HE IS THE RESI DENT OF DISTRICT OF LADAKH. LEARNED CIT (A) MADE REFERENCE TO SECTION 10 (26A) AND INTERPRETING SECTION 10(26A) HE EXPRESSED THE OPI NION THAT FOR BEING ENTITLED FOR EXEMPTION UNDER SUCH SECTION THE ASSESSEE SHOULD BE OF A SCHEDULED TRIBE AND ALSO THE RESIDENT OF DISTR ICT LADAKH IN THE PREVIOUS YEAR AND THE INCOME SHOULD HAVE ACCRUED OR A RISEN IN THE DISTRICT OF LADAKH. THE ASSESSEE WAS PROVIDED WITH SUFFIC IENT OPPORTUNITY AND THE ASSESSEE DID NOT FILE ANY DETAILS AN D IN THE ABSENCE OF ANY EVIDENCE HAVING BEEN FILED BY THE ASSESSE E, THEN, IT HAS TO BE PRESUMED THAT THE ASSESSEE HAS NOT DISCHARGED THE ONUS, ITA NOS.2733 & 2734/DEL/2011 5 THEREFORE, THE ISSUE WAS TO BE DECIDED AGAINST THE ASSESSE E REFERRING TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE C ASE OF CIT VS. MOTOR GENERAL FINANCE LTD. (2002) 254 ITR 449 (DELHI) AND , IN THIS MANNER, LEARNED CIT (A) HAS UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. 6. AN ADJOURNMENT LETTER WAS FILED BY THE COUNSEL OF THE ASSESSEE. HOWEVER, AFTER PERUSING THE RECORD AND CONSIDERING BO TH THE ORDERS PASSED BY THE ASSESSING OFFICER AND CIT (A), WE ARE OF TH E OPINION THAT RESTORING THE MATTER BACK TO THE FILE OF ASSESSING OFFIC ER WITH A DIRECTION TO GIVE REASONABLE OPPORTUNITY WILL SERVE T HE INTEREST OF JUSTICE, WE DISPOSE OF THESE APPEALS AFTER HEARING THE L EARNED DR. 7. THE LEARNED DR RELYING UPON THE ORDER OF ASSESSING O FFICER AND CIT (A) SUBMITTED THAT ADDITION HAS RIGHTLY BEEN SUSTAI NED BY THE LEARNED CIT (A). 8. WE HAVE HEARD THE LEARNED DR. WE HAVE ALSO GONE THROUGH THE ASSESSMENT ORDER, ORDER PASSED BY THE CIT (A) IN BOTH THE APPEALS. THE ASSESSEE HAS ACKNOWLEDGED THE RECEIPT OF NOTICE ISSUED BY THE ASSESSING OFFICER ON 7 TH DECEMBER, 2007 IN RESPONSE TO WHICH IT IS THE CASE OF THE ASSESSEE THAT HE HAS REPLIED VIDE LETTER DATE D 17 TH DECEMBER, 2007. THE ASSESSMENT IS PASSED ON 26 TH DECEMBER, 2007. NOWHERE LEARNED CIT (A) HAS GIVEN ANY FINDING THAT W HETHER OR NOT SUCH LETTER WAS FILED BY THE ASSESSEE. THOUGH THE CONTEN TS OF THE LETTER HAVE NOT BEEN REPRODUCED, IT APPEARS THAT THE ASSESSEE HAD CLAIMED THEREIN THAT HIS INCOME IS EXEMPTED ON ACCOUN T OF BEING A MEMBER OF SCHEDULED TRIBE AND A PERMANENT RESIDENT O F LADAKH. THAT LETTER HAS NOT BEEN DISCUSSED BY THE ASSESSING OFFICER IN T HE ASSESSMENT ORDER. LEARNED CIT (A) HAS ALSO NOT GIVEN ANY FINDING UPON THAT AND HE HAS NOT CALLED FOR ANY REPORT FROM THE A SSESSING OFFICER REGARDING THAT ASPECT OF THE MATTER. LEARNED CIT (A ) HAS SIMPLY UPHELD THE ADDITION OF THE ASSESSING OFFICER ON THE GROUND THA T THE CONDITIONS ITA NOS.2733 & 2734/DEL/2011 6 LAID DOWN IN SECTION 10 (26A) ARE NOT FULFILLED BY THE ASSESSEE. HOWEVER, IT IS A SUBJECT OF EXAMINATION BY GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING. A LETTER DATED 4 .6.2009 WHICH IS MENTIONED TO BE FILED IN THE OFFICE OF CIT (A) AND THE CONTENTS OF WHICH HAVE BEEN REPRODUCED IN THE ORDER OF THE CIT (A) WI LL REVEAL THAT THE ASSESSEE CANNOT BE SAID TO BE NOT INTERESTED IN PURSUING H IS APPEAL. IF IT IS SO, THEN, IN OUR OPINION, LEARNED CIT (A) SHOULD NOT HAVE DISMISSED THE APPEAL FILED BY THE ASSESSEE ONLY BY ISSUING ONE NOTI CE WHICH ALSO HAS NOT BEEN SERVED UPON THE ASSESSEE, BUT HAS COME BACK A ND HAS RETURNED BACK BY THE POSTAL AUTHORITIES. VIRTUALLY, THE ASSESSEE HAS NOT BEEN PROVIDED WITH REASONABLE OPPORTUNITY OF HEARING EITHER BY THE ASSESSING OFFICER OR BY THE CIT (A). IN THIS VIEW OF TH E SITUATION, WE ARE OF THE OPINION THAT BOTH THE MATTERS SHOULD BE RESTORE D BACK TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION AS PER THE PROVISIONS OF LAW BY PROVIDING THE ASSESSEE A REASONABLE AND SUFFICIENT OPP ORTUNITY OF HEARING. WE DIRECT ACCORDINGLY. AS WE ARE RESTORING THESE MATTERS TO THE FILE OF ASSESSING OFFICER FOR RE-ADJUDICATION AS PER PROVISIONS OF LAW IN THE MANNER AFORESAID, WE DO NOT EXPRESS ANY OPINION ON THE MERITS WHICH WILL BE RE-ADJUDICATED BY THE ASSESSING OFFICER A FTER GIVING THE ASSESSEE A REASONABLE AND SUFFICIENT OPPORTUNITY OF HEARI NG. 9. IN THE RESULT, FOR STATISTICAL PURPOSES, BOTH THE APP EALS FILED BY THE ASSESSEE ARE CONSIDERED TO BE ALLOWED IN THE MANNER AFORESAID. THE ORDER PRONOUNCED IN THE OPEN COURT ON 29.02.20 12. SD/- SD/- [T.S. KAPOOR] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 29.02.2012. DK ITA NOS.2733 & 2734/DEL/2011 7 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES ITA NOS.2733 & 2734/DEL/2011 8 DATE OF DICTATION 28.02.2012 DATE OF PRESENTATION OF THE DRAFT ORDER TO THE MEMBER 28.02.2012 DATE OF RETURN FROM THE BENCH AFTER PRONOUNCEMENT &SIGNING DATE OF DISPATCH OF THE ORDER TO THE BENCH