ACIT, WARDHA CIRCLE, Wardha V. SHRI NAVALKISHOR GURUPRASAD JAISWAL, Yavatmal

ITA 274/NAG/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1703 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 12-06-2013
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: C J THAKAR AW SHRI S C THAKAR
• Keywords: Rectification of order; Opportunity of being heard
• Section: 143(3); 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 274/NAG./2013 ( ASSESSMENT YEAR : 200910 ) ASSTT. COMMISSIONER OF INCOME TAX WARDHA CIRCLE, WARDHA 442 001 APPELLANT V/S SHRI NAVALKISHOR GURUPRASAD JAISWAL DARWHA ROAD, YAVATMAL 445 001 PAN ABCPJ0575E RESPONDENT ITA NO. 275/NAG./2013 ( ASSESSMENT YEAR : 200910 ) ASSTT. COMMISSIONER OF INCOME TAX WARDHA CIRCLE, WARDHA 442 001 APPELLANT V/S SHRI KAMALKISHOR GURUPRASAD JAISWAL DARWHA ROAD, YAVATMAL 445 001 PAN AAYPJ1336J RESPONDENT ITA NO. 273/NAG./2014 ( ASSESSMENT YEAR : 200910 ) SHRI NAVALKISHOR GURUPRASAD JAISWAL C/O CHINTAMANI TRAVELS DARWHA ROAD, YAVATMAL 445 001 PAN ABCPJ0575E APPELLANT V/S JT. COMMISSIONER OF INCOME TAX WARDHA RANGE, WARDHA 442 001 RESPONDENT SHRI NAVALKISHOR GURUPRASAD JAISWAL SHRI KAMALKISHOR GURUPRASAD JAISWAL 2 ITA NO. 274/NAG./2014 ( ASSESSMENT YEAR : 200910 ) SHRI KAMALKISHOR GURUPRASAD JAISWAL SHOP NO.4, CHINTAMANI COMPLEX DARWHA ROAD, YAVATMAL 445 001 PAN AAYPJ1336J APPELLANT V/S JT. COMMISSIONER OF INCOME TAX WARDHA RANGE, WARDHA 442 001 RESPONDENT REVENUE BY : SHRI NARENDRA KANE ASSESSEE BY : SHRI C.J. THAKAR A/W SHRI S.C. T HAKAR DATE OF HEARING 17.08.2015 DATE OF ORDER 28.08.2015 O R D E R PER BENCH APPEALS PREFERRED BY THE REVENUE BEING ITAS NO.274/ NAG./2013 AND 275/NAG.2013, ARE EMANATING FROM THE IMPUGNED SEP ARATE ORDERS OF EVEN DATE 18 TH MARCH 2013, PASSED BY THE LEARNED COMMISSIONER (APPEALS)II, NAGPUR, FOR THE ASSESSMENT YEAR 200910 AND THE APPEALS PREFERRED BY THE TWO DIFFERENT ASSESSEES BEI NG ITA NO.273/ NAG./2014 AND ITA NO.274/NAG./2014, ARE EMANATING F ROM THE IMPUGNED SEPARATE ORDERS OF EVEN DATE 18 TH MARCH 2013, PASSED BY THE LEARNED COMMISSIONERII, NAGPUR, FOR THE ASSESSME NT YEAR 2009 10, RESPECTIVELY. SHRI NAVALKISHOR GURUPRASAD JAISWAL SHRI KAMALKISHOR GURUPRASAD JAISWAL 3 2. SINCE ALL THESE APPEALS PERTAIN TO THE SAME ASSESSEE S INVOLVING COMMON ISSUE ARISING OUT OF IDENTICAL SET OF FACTS AND CIRCUMSTANCES, THEREFORE, AS A MATTER OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CON SOLIDATED ORDER. REVENUES APPEALS : THE FACTS OF THESE APPEALS BEING SAME, EXCEPT VARIATI ON IN FIGURES, HENCE, WE ARE NARRATING THE FACTS, AS THEY APPEAR IN REVENUES APPEAL BEING ITA NO.274/NAG./2013, FOR ASSESSMENT YE AR 200910. THE GROUNDS OF APPEAL RAISED IN THIS APPEAL ARE REP RODUCED BELOW: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED COMMISSIONER (APPEALS) ERRED IN DELETIN G THE ADDITION OF ` 1,15,83,382, MADE BY THE ASSESSING OFFICER ON THE GROUND OF SUPPRESSION OF SALE CONSIDERATION OF THE IMMOVABLE PROPERTY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, WHETHER THE LEARNED COMMISSIONER (APPEALS) WAS JUST IFIED IN ARRIVING AT THE CONCLUSION REGARDING THE SALE CONSI DERATION WITHOUT WAITING FOR DVOS REPORT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, WHETHER THE LEARNED COMMISSIONER (APPEALS) WAS JUST IFIED IN ACCEPTING THE SALE CONSIDERATION SHOWN BY THE ASSES SEE AS ` 3,57,62,000, WHEREAS DVOS REPORT RECEIVED AFTER 4 DAYS AFTER THE RECEIPTS OF CIT(A)S ORDER VALUES THE TRANSACTI ON AT ` 4,07,60,510. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER (APPEALS) ERRED IN CONCLUD ING THAT NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE IN CONNECTION WITH THE REFERENCE TO THE MATER TO THE DVO. SHRI NAVALKISHOR GURUPRASAD JAISWAL SHRI KAMALKISHOR GURUPRASAD JAISWAL 4 3. THE ISSUE PERTAINS TO THE SALE OF PROPERTY BY THE ASSE SSEE. THE ASSESSING OFFICER HAD REFERRED TO THE DISTRICT VALUATI ON OFFICER FOR THE VALUATION OF THE PROPERTIES. WITHOUT WAITING FOR THE DVO S REPORT, THE ASSESSING OFFICER PROCEEDED TO MAKE THE ADDITION ON TH E BASIS OF PRICE GATHERED ON LOCAL ENQUIRY . ACCORDINGLY, HE ADDED THE DIFFERENCE BETWEEN THE SALE PRICE REFLECTED BY THE ASSESSEE AND T HAT OBTAINED BY THE ASSESSING OFFICER ON LOCAL ENQUIRY. 4. UPON THE ASSESSEES APPEAL, THE LEARNED CIT(A) NOTE D THAT THE ASSESSEE HAS ENTERED INTO THE TRANSACTION OF SALE. T HE ASSESSING OFFICER HAS DOUBTED THE VALUE ADOPTED BY THE STAMP VALU ING AUTHORITY. HE HAS SUBSTITUTED THIS VALUE BY THE VALUE OBTAINED BY TH E ASSESSING OFFICERS LOCAL ENQUIRY. THE LEARNED CIT(A) NOTED TH AT THE ASSESSING OFFICER HAS NOT AT ALL SPECIFIED THE SOURCE OF ENQUIR Y AND THE TYPE OF EVIDENCE WHICH WAS QUOTED BY HIM. THUS, THE LEARNED CIT(A) FOUND THAT WITHOUT MAKING ANY COGENT ENQUIRY, THE ASSESSING O FFICER HAS SUBSTITUTED THE VALUE AS PER HIS LOCAL ENQUIRY FROM T HE VALUE ADOPTED BY STAMP VALUATION AUTHORITY. THE LEARNED CIT(A) ALSO N OTED THAT THE ASSESSING OFFICER HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE BEFORE MAKING THE ADDITION. THE LEARNED CIT(A) HAS ALSO NOTED THAT NO CLARIFICATION OR ELABORATION ON THE NATURE OF LOCAL ENQUIRY IS FORTHCOMING DURING THE ASSESSMENT PROCEEDING OR DURIN G THE REMAND PROCEEDINGS. THE LEARNED CIT(A) FURTHER OBSERVED THAT RELIABLE SHRI NAVALKISHOR GURUPRASAD JAISWAL SHRI KAMALKISHOR GURUPRASAD JAISWAL 5 EVIDENCE ON RECORD IN THE FORM OF SALE DOCUMENTS EVID ENCING SALE CONSIDERATION AND VALUATION FOR STAMP DUTY PURPOSE HA S BEEN TOTAL IGNORED BY THE ASSESSING OFFICER. ACCORDINGLY, THE LE ARNED CIT(A) DIRECTED DELETION OF ADDITION. AGAINST THE ABOVE, REV ENUE IS IN APPEAL BEFORE US. 5. THE SOLE ISSUE EMANATING FROM THE GROUNDS OF APPEAL AND ALSO AS CANVASSED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS THAT THE LEARNED CIT WAS NOT JUSTIFIED IN ACCEPTING THE SALE C ONSIDERATION SHOWN BY THE ASSESSEE WHEREAS THE DVOS REPORT RECEIVED AF TER FOUR DAYS AFTER THE RECEIPT OF LEARNED CITS ORDER VALUES THE TRA NSACTION AT A HIGHER FIGURE. 6. UPON HEARING BOTH THE LEARNED REPRESENTATIVES AND ON A PERUSAL OF THE RECORD, WE FIND THAT BY NO STRETCH OF IMAGINATIO N ANY FAULT CAN BE FOUND IN THE ORDER OF THE LEARNED CIT ON THE BASIS OF THE DVOS REPORT, WHICH WAS RECEIVED AFTER FOUR DAYS OF THE REC EIPT OF THE LEARNED CITS ORDER. IT IS TRUE THAT THE ASSESSING OFFICER HAS REFERRED THE MATTER TO THE DVO DURING THE CROSS OF ASSESSMENT, BUT WITHOUT WAITING FOR THE DVOS REPORT, THE ASSESSING OFFICER HAS SUBS TITUTED THE VALUES AS PER THE REGISTERED SALE DEED ON THE BASIS OF VAL UE OBTAINED FROM HIS SO CALLED ENQUIRY. THE BASIS OF THIS CO CALLED ENQUI RY WAS NOT AT ALL BROUGHT ON RECORD. THIS ORDER OF THE ASSESSING OFFIC ER WHEN CHALLENGED BEFORE THE LEARNED CIT WAS SET ASIDE BY THE LEARNED C IT(A) ON THE SHRI NAVALKISHOR GURUPRASAD JAISWAL SHRI KAMALKISHOR GURUPRASAD JAISWAL 6 BASIS THAT NO ADDITION CAN BE MADE ON THE BASIS OF SO CALLED LOCAL ENQUIRY WITHOUT ANY COGENT BASIS. NOW IN APPEAL BEFOR E THE TRIBUNAL, THE REVENUE HAS PLEADED THAT THE LEARNED CIT(A) IS NOT J USTIFIED INASMUCH AS THE DVOS REPORT RECEIVED AFTER FOUR DAYS AFTER THE RECEIPT OF LEARNED CIT(A)S VALUES THE TRANSACTION AT A HIGH COST. IN THIS REGARD, IT IS CLEAR THAT ON MERITS, THE ASSESSING OF FICERS ORDER WAS NOT SUSTAINABLE AND THE LEARNED CIT HAS RIGHTLY DELETED TH E ADDITION BASED UPON THE ASSESSING OFFICERS UNCORROBORATED LOCAL ENQUIRY . BY NO STRETCH OF IMAGINATION, IT CAN BE ARGUED THAT THE LEAR NED CIT(A) SHOULD HAVE TAKEN INTO ACCOUNT THE DVOS REPORT WHICH WAS RE CEIVED FOUR DAYS AFTER THE PASSING OF THE LEARNED CIT(A)S ORDER. IT IS SETTLED LAW THAT NOBODY CAN BE ASKED TO DO THE IMPOSSIBLE. UNDER THE SE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THERE IN N O INFIRMITY IN THE ORDER OF THE LEARNED CIT(A). BEFORE PARTING, WE MAY STATE THAT THE SALE CONSIDERATION HAS BEEN VALUED BY THE STAMP VALUING AU THORITY. DE HORS ANY COGENT MATERIAL ON RECORD THAT THERE HAS BEE N ANY TRANSACTION OF ONMONEY , THE SAME CANNOT BE TINKERED WITH. FOR THIS PURPOSE, THE HONBLE SUPREME COURT IN K.P. VARGHESE V/S ITO, [1981] 131 ITR 597 (SC) IS RELEVANT. ACCORDINGLY, WE AFFIRM THE ORDERS OF THE LEARNED CIT(A). 7. IN THE RESULT, REVENUES APPEALS STAND DISMISSED. SHRI NAVALKISHOR GURUPRASAD JAISWAL SHRI KAMALKISHOR GURUPRASAD JAISWAL 7 ASSESSEES APPEALS : WE NOW TAKE UP ASSESSEES APPEALS IN ITA NO.273/NAG. /2014 AND ITA NO.274/NAG./2014. 8. ASSESSEES APPEALS ARE AGAINST THE ORDER PASSED BY T HE LEARNED COMMISSIONER FOR THE ASSESSMENT YEAR 200910. IN THE ORDER UNDER SECTION 263, THE LEARNED CIT NOTED THAT AFTER THE PAS SING OF LEARNED CIT(A)S ORDER IN THE ABOVE CASES, THE DVOS REPORT WAS RECEIVED. THE BASIS OF THE DVOS REPORT IS SEVEN SALE INSTANCES IN TH E AREA ON NEARBY DATES. THE ASSESSING OFFICER MOVED AN APPLICATION UN DER SECTION 154 TO THE LEARNED CIT(A). THE LEARNED CIT(A) FIXED HEARI NG AND SOUGHT COMMENTS OF THE ASSESSEE. ULTIMATELY, THE LEARNED CIT(A ) DISMISSED THE APPLICATION UNDER SECTION 154. THE LEARNED CIT(A) THEREAFTER HELD AS UNDER: 06. AS THE SUPPRESSION OF SALE IN THE RETURN OF INC OME COULD NOT BE CORRECTED BY PASSING ORDER UNDER SECTION 54, ONL Y REMEDY LEFT IN THE MATTER WAS ACTION UNDER SECTION 263 IN VIEW OF DECISION OF HONBLE ITAT, MUMBAI, IN THE CASE OF ABDULLA HAJI G ULAM RASOOL, [TAX SUTRA 585ITAT2013MUM.]. IN THIS CASE HONBL E ITAT HELD THAT WHEN CASE WAS REFERRED TO VALUER AND THE REPORT IS NOT RECEIVED UPTO THE COMPLETION OF ASSESSMENT ORDER TH EN RECTIFICATION OF ORDER CANNOT BE DONE UNDER SECTION 154 AND PROCEEDINGS UNDER SECTION 263 CAN VALIDATE THE ORDE R. 9. THE LEARNED CIT FURTHER CONCLUDED THAT THERE CANNOT BE ANY DOCUMENTARY EVIDENCE OF CASH RECEIPT AS THE CASH AMOUN T IS TAKEN BY THE REAL ESTATE DEALERS OVER AND ABOVE THE AMOUNT MENT IONED IN SALE SHRI NAVALKISHOR GURUPRASAD JAISWAL SHRI KAMALKISHOR GURUPRASAD JAISWAL 8 DEED WHICH IS NOT ENTERED INTO THE BOOKS OF ACCOUNT. ULTIMATELY, THE LEARNED CIT HELD THAT THE ASSESSING OFFICER WAS DIREC TED TO PASS AN ORDER DENOVO AFTER CONSIDERING THE REPORT OF THE DVO. THE CONCLUSION BY THE LEARNED CIT IS AS UNDER: 14. BY INVOKING MY POWERS U/S 263 OF I.T.ACT, 1961 I HEREBY SETASIDE THE ORDER DATED 27/12/2011 U/S 143(3) OF I.T.ACT, 1961 AND DIRECT THE A.O. TO PASS THE ORDER DENOVO A FTER CONSIDERING THE REPORT OF DVO. WHILE DOING SO HE IS DIRECTED TO TAKE OBJECTION OF ASSESSEE ON QUANTUM OF MARKET VAL UE AS ADVISED BY THE DVO. HE MIGHT SEEK COMMENTS FROM DVO ON THE OBJECTION OF ASSESSEE AND ALSO ON THE OBJECTION OF COMPARABLE CASES. REASONABLE OPPORTUNITY OF BEING HEARD BE GIV EN TO THE ASSESSEE WHILE PASSING THE ORDER AFRESH. 10. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATER IAL ON RECORD. WE FIND THAT THE FACTS STATED IN REVENUES A PPEALS ABOVE PRECEDE THE ACTION TAKEN BY THE LEARNED CIT HERE. IN THIS CASE, THE ASSESSING OFFICER HAS MOVED AN APPLICATION UNDER SE CTION 154 TO THE LEARNED CIT, WHEREIN THE VALUE BY THE DVO IN THE REPO RT RECEIVED AFTER THE ORDER OF THE LEARNED CITS ORDER WAS SOUGHT TO BE S UBSTITUTED. IN THE ORDER, THE LEARNED CIT(A) REJECTED THAT APPLICATIO N FOR RECTIFICATION UNDER SECTION 154. UNDER THESE CIRCUMSTANCES, THE ORDER OF THE LEARNED CIT(A) HAS MERGED WITH THE ORDER AND APPLICAT ION BY THE ASSESSING OFFICER. SECTION 263 PROVIDES THE POWER TO TH E COMMISSIONER TO EXERCISE HIS JURISDICTION UNDER SEC TION 263, ON THE SHRI NAVALKISHOR GURUPRASAD JAISWAL SHRI KAMALKISHOR GURUPRASAD JAISWAL 9 ORDERS OF THE ASSESSING OFFICER AND NOT WHERE THE ORD ER OF THE ASSESSING OFFICER HAS MERGED WITH THE ORDER OF THE LEA RNED CIT(A). THE LEARNED CIT, IN HIS WISDOM HAS REJECTED THE ASSESSIN G OFFICERS APPLICATION UNDER SECTION 154. NO APPEAL AGAINST THE REJECTION HAS BEEN PREFERRED BY THE REVENUE. NOW, THE REVENUE HAS S OUGHT TO REVISE THE ASSESSING OFFICERS ORDER UNDER SECTION 263, WHICH HAS ALREADY MERGED WITH THE ORDER OF THE LEARNED CIT(A). T HIS IS NOT AT ALL LEGALLY PERMISSIBLE. THE DECISION OF THE TRIBUNAL RE LIED UPON BY THE LEARNED CIT IN ABDULLA HAJI GULAM RASOOL (SUPRA) IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE, AS IN THE PRESENT CASE BEFORE US, THE ORDER OF THE ASSESSING OFFICER HAS MERGED WITH THAT OF THE LEARNED CIT(A). PROVISIONS OF SECTION 263, DO NOT MANDATE THE COMMISSIONER TO REVISE SUCH AN ORDER. UNDER THESE CIRCUMSTANCES, W E HOLD THAT THE ASSUMPTION OF JURISDICTION BY THE LEARNED CIT WAS NOT LEGALLY PERMISSIBLE, HENCE, THE SAME IS LIABLE TO BE QUASHED. WE FURTHER NOTE THAT THE SAID DVOS REPORT HAS BEEN MENTIONED BY THE L EARNED CIT HIMSELF AS BASED UPON SALE INSTANCES IN NEARBY CASES . WE FAIL TO UNDERSTAND AS TO WHY IN SUCH CIRCUMSTANCES, THE SALE INSTANCE AS PER STAMP REGISTRATION AUTHORITY OF THE ASSESSEE ITSELF C AN BE TREATED AS SHAM DEHORS ANY EVIDENCE ON RECORD REGARDING ONMO NEY TRANSACTION. THIS IS AGAINST THE EXPOSITION OF THE HO NBLE SUPREME COURT IN K.P. VARGHESE (SUPRA). IN OUR CONSIDERED OP INION, TINKERING WITH THE SALE AMOUNT DULY REFLECTED AND REGISTERED BY TH E REGISTRATION SHRI NAVALKISHOR GURUPRASAD JAISWAL SHRI KAMALKISHOR GURUPRASAD JAISWAL 10 AUTHORITY IS NOT PROPER AND JUSTIFIED UNDER SECTION 263 IN THIS CASE. ACCORDINGLY, IN THE BACKGROUND OF THE AFORESAID DIS CUSSION AND PRECEDENT, WE QUASH THE ORDER PASSED THE LEARNED CIT IN THIS REGARD. 12. IN THE RESULT, ASSESSEES APPEALS STAND ALLOWED. 13. TO SUM UP, REVENUES APPEALS ARE DISMISSED AND ASSE SSEES APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.08.2015 SD/ - MUKUL K. SHRAWAT JUDICIAL MEMBER SD/ - SHAMIM YAHYA ACCOUNTANT MEMBER NAGPUR, DATED: 28.08.2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY A SSISTANT REGISTRAR ITAT, NAGPUR