Naresh Chander, Sonepat V. ITO, Sonepat

ITA 2750/DEL/2015

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0377 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 07-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Salary income; Opportunity of being heard; Principle of natural justice; Additional evidence; Non compliance; Set aside
• Section: 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: B NEW DELHI BEFORE SHRI KUL BHARAT, JUDCIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER [THROUGH VIDEO CONFERENCING] ITA NO.2750/DEL/2015 ASSESSMENT YEAR: 2006-07 SH. NARESH CHANDER, S/O- SH. SUKH PAL, R/O- H. NO. 437, SECTOR-7, GOHANA, SONEPAT VS. ITO, WARD-2, SONEPAT PAN :AQEPC2840A (APPELLANT) (RESPONDENT) ORDER PER O.P. KANT, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST OR DER DATED 19/02/2015 PASSED BY THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS)-ROHATAK [IN SHORT THE LD. CIT(A)] FOR A SSESSMENT YEAR 2006-07 RAISING FOLLOWING GROUNDS: 1. THAT APPELLANT WAS NOT GRANTED SUFFICIENT AND R EASONABLE OPPORTUNITY OF HEARING TO PLEAD AND REPRESENT HIS C ASE AND ALSO TO FURNISH THE EVIDENCE BEFORE THE ASSESSING OFFICER. THUS THE IMPUGNED ORDER DATED 19.02.2015 UPHOLDING THE ORDER DATED APPELLANT BY SH. R.K. VASHISHT, ADV. RESPONDENT BY SH. MAHESH THAKUR, SR.DR DATE OF HEARING 12.07.2021 DATE OF PRONOUNCEMENT 16.07.2021 2 ITA NO.2750/DEL/2015 31.10.2013 OF THE A.O. IS IN VIOLATION OF RULES OF NATURAL JUSTICE THUS THE IMPUGNED ORDER DATED 19.02.2015 CONFIRMING THE ORDERS OF THE A.O. IS ILLEGAL AND LIABLE TO BE SET ASIDE O N THE GROUND ALONE. 2. THAT LEARNED CIT (APPEALS) ROHTAK IS WHOLLY ERR ONEOUS AND ILLEGAL IN AS MUCH AS THE FINDING RECORDED BY LEARNED CIT C ONFIRMING THE ADDITION MADE BY THE A.O. ARE NOT SUPPORTED BY LAWS , FACTS, REASON , MATERIAL ON RECORD AND THE SUBMISSIONS MAD E BY THE LEARNED COUNSEL BEFORE THE CIT APPEAL. THEREFORE TH E IMPUGNED ORDER IS LIABLE TO BE QUASHED. 3. THAT LEARNED A.O. HAS ABSOLUTELY AS ERRED IN LA W IN ESTIMATING THE INCOME OF THE APPELLANT AT RS. 54,50,000/- PURELY O N ESTIMATED BASIS AND SAME IS LIABLE TO BE QUASHED BEING WHOLLY UNFOUNDED AND MISCONCEIVED. 4. THAT WHEN THE APPELLANT FATHER APPROACHED THE S AID VENDER SH. KRISHAN TO FULFIL HIS OBLIGATION AND PART PERFORMAN CE OF HIS AGREEMENT THEN HE TURNED DISHONEST AND HE NEITHER R ETURNED THE AMOUNT OF ADVANCE MONEY OF RS. 1500000/- NOR PERFOR MED HIS PART OF PERFORMANCE OF HIS AGREEMENT AND ILLEGALLY MADE A COMPLAINT OF THE APPELLANT BEFORE THE HONOURABLE CO MMISSIONER KARNAL THE HEAD OF THE SERVING DEPARTMENT OF THE AP PELLANT WHO ASSIGNED ENTRUSTED THE ENQUIRY TO THE SDM GOHANA WH O AFTER RECODED THE STATEMENT OF THE WITNESSES AND MAKING T HROUGH ENQUIRIES EXONERATED THE APPELLANT FROM THE COMPLAI NT VIDE HIS REPORT DATED 30.05.2011 WHICH WAS SUBMITTED TO THE SAID COMMISSIONER. 5. THAT THE APPELLANT FATHER SH. SUKHPAL EXECUTED AN AFFIDAVIT DATED 17.02.2009 STATING THEREIN THAT HE EXECUTED A SALE AGREEMENT DATED 02.12.2004 IN FAVOUR OF ONE OF MY SON NAMELY NARESH CHANDER THE APPELLANT HEREIN BEING HIS TRUSTWORTHY SON OUT OF HIS FOUR SONS AND THE VENDER IN RESPECT OF LAND DETAILE D IN SALE AGREEMENT DATED 02.12.2004 AND IN CASE THE LAND COM ES TO MY HAND BY VIRTUE OF SAID SALE AGREEMENT THE SAME SHAL L BE PARTITIONED / DEVIDED AND DISTRIBUTED AMONG HIS FOU R SONS IN EQUAL SHARES BEFORE THE EXECUTIVE MAGISTRATE GOHANA . SINCE THE SAID AFFIDAVIT WAS NOT IN THE KNOWLEDGE OF APPELLAN T BEFORE 15.03.2015 BEING WHICH CAME TO THE KNOWLEDGE OF APP EALLANT ONLY IN THE MONTH OF APRIL 2015 AND COULD NOT BE PR ESENTED/ PRODUCED BEFORE THE CIT APPEAL ROHAK AND SAME IN TH E CUSTODY OF PARVEEN SON OF SUKHPAL BROTHER OF THE APPELLANT, AS SUCH THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE AND CIR CUMSTANCE BEYOND HIS CONTROL TO PRODUCE THE SAME BEFORE THE A .O. AND CIT (APPEALS). 6. THAT SINCE THE APPELLANT WAS NOT PROVIDED / AFF ORDED SUFFICIENT, REASONABLE AND FULL OPPORTUNITY BY THE LEARNED A.O. TO PRESENT / PRODUCE / ADDUCE THE SAID RELEVANT DOCUMENTARY AND ORAL EVIDENCE I.E. HIS FATHER AND HIS AFFIDAVIT TO THE E FFECT THAT THE SALE AGREEMENT WAS EXECUTED BY THE APPELLANT ON HIS DIRE CTION BEING HIS ELDEST SON. THE APPELLANT WAS PREVENTED BY SUFF ICIENT CAUSE 3 ITA NO.2750/DEL/2015 AND CIRCUMSTANCES BEYOND HIS CONTROL TO PRODUCE THE SAME BEFORE THE A.O. AND SINCE SOME OF THE DOCUMENTARY EVIDENCE WERE NOT IN THE KNOWLEDGE OF APPELLANT. 7. THAT THE LEARNED A.O. ABSOLUTELY ERRED IN LAW I N MAKING THE ADDITION OF RS.150000/- ON ACCOUNT OF SALARY PURELY ON ESTIMATED BASIS WITHOUT MAKING THE ENQUIRIES FROM HIS DEPARTM ENT . APPELLANT EARNED SALARY INCOME OF RS. 100000/- DURI NG THE YEAR UNDER APPEAL WHICH IS UNDER TAXABLE LIMIT AND WAS N OT CHARGEABLE TO TAX AND THUS THE APPELLANT WAS NOT LI ABLE TO FILE ANY INCOME TAX RETURN AND THE SAME IS LIABLE TO BE DELE TED. 8. THAT THE ASSESSMENT U/S 144 OF INCOME TAX ACT H AS BEEN FRAMED AGAINST THE APPELLANT ON THE BASIS OF FALSE COMPLAI NT AND FORGED AND FABRICATED DOCUMENTS JUST TO HARASS HUMILIATE A ND TO CAUSE MENTAL AGONY TO THE APPELLANT . THEREFORE ASSESSMEN T DATED 31.10.2013 IS UNJUST, ARBITRARY, ILLEGAL AND IS LIA BLE TO BE SET ASIDE. 9. THAT THE MATERIAL AND THE BASIS OF THE BEST JUD GMENT GATHERED AT THE BACK OF THE APPELLANT WAS NEITHER DISCLOSED NOR CONFRONTED TO HIM APPELLANT SO AS TO ENABLE HIM TO REBUT THE SAME IF HE CAN THROUGH A NOTICE, HENCE THE ENTIRE EX-PARTE PROCEED INGS AND ORDERS AGAINST THE APPELLANT AND THE JUDGMENTS / ORDER PAS SED BY A.O. AND LD. CIT (A) ROHTAK ARE NEITHER SUSTAINABLE NOR TENABLE AND ARE LIABLE TO BE SET ASIDE. 10. THAT THE APPELLANT WAS NOT GRANTED ANY OPPORTUN ITY TO CROSS EXAMINE THE COMPLAINANT AND IN THIS WAY THE ALLEGAT IONS AND ALLEGED UNACCOUNTED INVESTMENT AT THE HANDS OF THE APPELLANT WAS NOT PROVED. 11. THAT ORDERS OF THE AUTHORITIES BELOW ARE NON SP EAKING, NON DETAILED, NON JUDICIOUS AND ARE BASED ON SELF CONJE CTURES AND SURMISES AND ARE LIABLE TO BE SET ASIDE. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSE SSEE IS A SALARIED EMPLOYEE DURING THE YEAR UNDER CONSIDERATI ON. IN THE CASE OF THE ASSESSEE, THE ASSESSING OFFICER OBSERVE D THAT A LAND WAS PURCHASED FOR WHICH PAYMENT OF 30 LAKH WAS MADE IN FINANCIAL YEAR 2004-05 CORRESPONDING TO ASSESSMENT YEAR 2006- 07 AND PAYMENT OF 53 LAKH WAS MADE IN FINANCIAL YEAR 2005-06 I.E. CORRESPONDING TO ASSESSMENT YEAR 2006-07. IN V IEW OF THE PAYMENT OF RS.53 LAKH IN THE YEAR UNDER CONSIDERATI ON, THE ASSESSING OFFICER COMMENCED REASSESSMENT PROCEEDING BY WAY OF ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. IN VI EW OF THE FAILURE 4 ITA NO.2750/DEL/2015 ON THE PART OF THE ASSESSEE TO EXPLAIN THE SOURCE O F THE INVESTMENT IN PURCHASE OF THE LAND, THE ASSESSING O FFICER HELD THE INVESTMENT IN PURCHASE AS UNDISCLOSED INCOME OF THE ASSESSEE, IN HIS ORDER DATED 31/10/2013. THE LD. CIT(A) UPHELD T HE ADDITION OF OBSERVING AS UNDER: 3. I HAVE EXAMINED THE SUBMISSIONS MADE BY THE ASS ESSEE AND THE FACTS ON RECORD. IT IS SEEN THAT AT THE TIME OF ASS ESSMENT PROCEEDINGS FOR THE FY 2004- 05 ( AY 2005-06) THE ASSESSEE HAS STATED THAT HE HAD SIGNED AN AGREEMENT FOR PURCHASE OF LAND AT GAR HI UJALE KHAN VILLAGE GOHANA WITH A PERSON CALLED SHRI KRISHAN FO R A CONSIDERATION OF RS 83 LAKHS. THE ASSESSEE, BY HIS OWN ADMISSION, STATED THAT RS 83 LAKHS WERE PAID BY HIS FATHER BUT NO EVIDENCE OF THIS WAS FILED. A SUM OF RS 30,00,000/- BEING PAYMENTS MADE ON 04.12. 2004 (RS 15,00,000) AND 28.02.2005 (RS 15,00,000) WERE ADDED FOR AY 2005- 06. SIMILARLY, A SUM OF RS 53 LAKHS WAS PAID IN THI S YEAR. THE ASSESSEE WAS UNABLE TO SUBSTANTIATE HOW THE AGREEME NT SIGNED BY HIM IS NOT TRUE. MOREOVER, NO ADDITIONAL EVIDENCE H AS BEEN FURNISHED BEFORE ME AS PER THE REMAND REPORT OF THE AO DATED 16.01.2015. THE APPELLANT HAS NOT BEEN ABLE TO DISCHARGE HIS ONUS I N PROVING THAT HE WAS NOT A PARTY TO THE SAID TRANSACTION. TO STATE T HAT HIS FATHER MADE HIS SIGN A PAPER AND THAT HIS FATHER ENTERED INTO AN AGREEMENT WITH ONE SHRI KRISHAN IS NOT AN ACCEPTABL E EXPLANATION. THERE WAS REPEATED NON COMPLIANCE BEFORE THE AO. EV EN BEFORE ME, NO NEW MATERIAL HAS BEEN PLACED ON RECORD TO PROVE THE APPELLANTS CLAIM. 3. WE HAVE HEARD BOTH THE PARTIES, WHO APPEARED THROU GH VIDEO CONFERENCING FACILITY. WE HAVE ALSO PERUSED TH E ORDERS OF THE LOWER AUTHORITIES AND ORDER OF THE TRIBUNAL (IT A NO. 2749/DEL/2015) IN THE CASE OF THE ASSESSEE FOR ASSE SSMENT YEAR 2005-06. 5. BOTH THE PARTIES HAVE BEEN HEARD. IN ORDER TO A SCERTAIN THE CORRECTNESS OF THE ASSERTIONS MADE BY THE PARTIES B EFORE THE BENCH, IT IS NECESSARY TO FIRST ADDRESS THE FACTS. IT NEED S TO BROUGHT ON RECORD AS TO WHAT SPECIFIC LAND AS PER AGREEMENT TO SELL HAS BEEN PURCHASED BY THE ASSESSEE. MERE MENTIONED OF A VILL AGE IN A DOCUMENT BY ITSELF DOES NOT FORM THE EVIDENCE THAT A SPECIFIC LAND WAS OWNED BY WAY OF PURCHASE BY THE ASSESSEE. IN TH E FACT OF THE DENIAL OF THE ASSESSEE THAT THE SIGNATURE DO NOT BE LONG TO HIM THE REVENUE FIRST NEEDS TO ADDRESS THE STATUS OF THE SP ECIFIC LAND. 5 ITA NO.2750/DEL/2015 NAMELY BRING ON RECORD THE EXACT DESCRIPTION OF LAN D AND ASCERTAIN WHETHER IT HAS BEEN PURCHASED BY THE ASSESSEE. IN C ASE THE ALLEGED AGREEMENT TO SELL WAS NEVER ACTED UPON EVEN IN THAT SITUATION IN THE FACE OF THE DENIAL OF THE ASSESSEE THAT THE SIGNATU RE IS NOT HIS THE REVENUE WILL NEED TO SEEK FORENSIC EXAMINATION OF T HE SAME BY HAVING AN EXPERTS OPINION ON THE HANDWRITING. THE FACT THAT THIS IS A CASE OF TAX EVASION PETITION WHEREIN THERE IS AN AS SERTION OF THE ASSESSEE THAT THE SIGNATURE DOES NOT BELONG TO HIM AND THE ASSESSEE HAS ARGUED THAT APART FROM WAGON-R CAR AND CONSTRUC TION OF A HOUSE AFTER OBTAINING A HOUSE LOAN FROM ICICI BANK LTD. V IDE LOAN A/C NO.LBPNP00000350493 ON A PLOT IN SECTOR-7, GOHANA T HERE IS NO OTHER PROPERTY OWNED BY THE. ASSESSEE ALL FACTS WHI CH NEED TO BE ADDRESSED. . THE ASSESSEE MAY BE CALLED FOR TO FILE A SWORN DECLARATION UNDER PENALTY OF PERJURY TO ADDRESS HIS VERSION OF FACTS IF NEED BE BEFORE PROCEEDING TO SEEK FORENSIC EVIDENCE ADDRESSING THE SIGNATURES ETC. HOWEVER, AS FAR AS THE IMPUGNED ORD ER IS CONCERNED IT CANNOT BE SUSTAINED AS THERE IS NO DISCUSSION WH ATSOEVER ON THE ARGUMENTS RECORDED IN THE SAID ORDER. ONCE THE ASSE SSEE SAYS THAT THE SIGNATURE DOES NOT BELONG TO HIM AND THE PROPER TY REFEREED TO HAS ALSO NOT BEEN PURCHASED BY HIM. THEN, THESE BAS IC FACTS AND ARGUMENTS HAVE TO BE ADDRESSED AND THE ORDER TO PRO CEED FURTHER AND HOLD THE SAME AS ASSESSEES UNDISCLOSED INCOME THE REVENUE NEEDS TO DEMONSTRATE BY WAY OF EVIDENCES THE FALLAC IES OF THE ASSESSEES CLAIM. IN THE ABSENCE OF ANY DISCUSSION ON THE RELEVANT FACTS AFTER HEARING THE PARTIES THE ISSUE IS RESTOR ED BACK TO THE AO TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD. 3.1 WE FIND THAT ALLEGED INVESTMENT IN THE YEAR UNDER CONSIDERATION, THE SECOND INSTALLMENT IN RESPECT OF THE PURCHASE OF THE LAND, FOR WHICH FIRST INSTALLMENT FALLS IN A SSESSMENT YEAR 2005-06 AND THE SAID ISSUE HAS BEEN RESTORED BY THE TRIBUNAL TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING AFRE SH. IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THE ISSUE-IN -DISPUTE IS ALSO RESTORED TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR DECIDING AFRESH, FOLLOWING THE DIRECTION OF THE TRI BUNAL (SUPRA). THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE ACCOR DINGLY ALLOWED FOR STATISTICAL PURPOSES. 6 ITA NO.2750/DEL/2015 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH JULY, 2021. SD/- SD/- (KUL BHARAT) (O.P. KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16 TH JULY, 2021. RK/- (DTDC) COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI