Shri Lakhani Mehul Labhubhai, Surat V. The Income tax Officer, Ward-9(3), Surat

ITA 2834/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6471 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 08-04-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 29-06-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: DIVYAKANT PARIKH
• Keywords: Reopening of assessment; Gift; Question of law; Reason to believe
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : AHMEDABAD (BEFORE HONBLE SHRI G.D. AGRAWAL, VICE-PRESIDENT(A Z) & HONBLE SHRI T.K. SHARMA, J.M.) I.T.A. NO. 2834/AHD./2007 ASSESSMENT YEAR : 2002-2003 LAKHANI MEHUL LABHUBHAI, SURAT -VS.- INCOME TAX OFFICER, WARD-9(3), SURAT (PAN : ABQPL 2349 Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DIVYAKANT PAR IKH RESPONDENT BY : SHRI C.K. MISHRA, SR . D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 22.05.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-V, SURAT UPHOLD ING THE ACTION OF ASSESSING OFFICER REGARDING RE-OPENING OF ASSESSMENT UNDER SECTION 14 8 AND CONFIRMING THE ADDITION OF RS.4,61,500/- MADE BY THE A.O. UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2002-03. 2. IN THE APPEAL MEMO, THE ASSESSEE RAISED ONLY ONE GROUND OF APPEAL, I.E. LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN TREATI NG THE GENUINE AND EXPLAINED GIFTS OF RS.4,61,500/- AS BOGUS. HOWEVER, DURING THE COURSE OF HEARING BEFORE US, THE ASSESSEE FILED AN ADDITIONAL GROUND, WHICH READS AS UNDER :- CIT(A.) ERRED IN UPHOLDING REASSESSMENT U/S. 147 O F THE ACT. IT BE HELD THAT THE CONDITIONS FOR REOPENING LAID DOWN U/ S. 147 ARE NOT SATISFIED AND THERE IS NO REASON TO BELIEVE THAT IN COME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 3. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF A SSESSEE SHRI DIVYAKANT PARIKH APPEARED AND CONTENDED, REGARDING ADMISSION OF AFORESAID ADD ITIONAL GROUND, THAT THE GROUND CHALLENGING THE REOPENING OF ASSESSMENT WAS TAKEN BEFORE THE LE ARNED COMMISSIONER OF INCOME TAX(APPEALS), BUT THROUGH INADVERTENCE IT WAS NOT T AKEN IN THE ORIGINAL MEMO OF APPEAL. THE ADDITIONAL GROUND INVOLVED ONLY ON PURE QUESTION OF LAW, THEREFORE, THE SAME BE ADMITTED. 2 ITA NO. 2834/AHD/2007 FURTHER RELYING ON THE DECISION OF THE HON'BLE SUPR EME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS.- ITO [2003] 259 ITR 19 (SC), THE MATTER BE RESTORED TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION THAT ASSESSING OFFICER S HOULD FURNISH THE REASONS RECORDED BEFORE ISSUING NOTICE UNDER SECTION 148, THEREUPON THE ASS ESSEE WILL FILE THE RE-OBJECTION, ASSESSING OFFICER MAY CONSIDER THE OBJECTION OF THE ASSESSEE AND DECIDE THE ISSUE OF VALIDITY OF REOPENING OF ASSESSMENT UNDER SECTION 148 OF THE INCOME TAX A CT, 1961. THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT IN THE ASSESSMENT YEAR UNDER APPEAL, ORIGINAL ASSESSMENT WAS FINALIZED UNDER SECTION 143(3). THEREAFTER ASSESSMENT WAS REO PENED UNDER SECTION 148. IN RESPONSE TO NOTICE UNDER SECTION 148, THE ASSESSEE FILED THE RE TURN OF INCOME AND ASKED THE ASSESSING OFFICER TO SUPPLY THE REASONS RECORDED. THESE WERE NEVER MA DE AVAILABLE TO THE ASSESSEE. IN THIS VIEW OF THE MATTER, THE LD. COUNSEL SUBMITTED THAT THE MATT ER IS SQUARELY COVERED BY THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFT S (INDIA) LTD. (SUPRA). 4. ON THE OTHER HAND, SHRI C.K. MISHRA, SR. D.R. AP PEARING ON BEHALF OF REVENUE COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS OF THE LD. COU NSEL OF THE ASSESSEE. 5. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT FOR THE ASSESSM ENT YEAR UNDER APPEAL, THE ASSESSEE FILED THE RETURN OF INCOME ON 30.03.2003 DECLARING TOTAL INCO ME OF RS.2,21,120/-. THE ASSESSING OFFICER FRAMED THE ASSESSMENT UNDER SECTION 143(3). THEREAF TER THE A.O. ISSUED A NOTICE UNDER SECTION 148 DATED 07.01.2005. IN RESPONSE TO THE SAID NOTIC E, THE ASSESSEE VIDE HIS LETTER DATED 31.01.2005 HAS STATED TO TREAT THE RETURN FILED ON 30.03.2003 AS RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 AND REQUESTED THE ASSESSING OFFICER TO FURNISH THE REASONS RECORDED BY HIM BEFORE ISSUING NOTICE UNDER SECTION 148 OF THE I.T. ACT. A DMITTEDLY, THE REASONS RECORDED BY THE ASSESSING OFFICER WERE NOT FURNISHED TO THE ASSESSE E. 6. THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF ACIT & OTHERS VS.-BANSWARA SYNTEX LTD. [2005] 272 ITR 642 BY FOLLOWING THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. (SUPRA) HELD THAT WHEN A NOTICE UNDER SECTION 148 OF THE ACT IS ISSUED TO A NOTICE, HE IS TO ADOPT THE FOLLOWING PR OCEDURE :- 3 ITA NO. 2834/AHD/2007 (I) FILE A RETURN IN RESPONSE TO THE NOTICE; (II) HE CAN ASK THE ASSESSING AUTHORITY TO FURNISH REASO NS FOR ISSUANCE OF THE NOTICE, WHICH THE ASSESSING AUTHORI TY IS BOUND TO COMMUNICATE TO HIM WITHIN A REASONABLE TIM E; (III) ON RECEIVING THE REASONS HE MAY FILE OBJECTIONS THE REOF, WHICH THE ASSESSING AUTHORITY IS BOUND TO DECIDE BY A SPEAKING ORDER BEFORE PROCEEDING WITH REASSESSMENT OF INCOME CHARGEABLE TO TAX WITH REGARD TO THE RELEVAN T ASSESSMENT YEAR; (IV) AFTER THE PASSING OF THE ORDER OF REASSESSMENT UNDE R SECTION 147 OF THE ACT BY THE ASSESSING AUTHORITY T HE ASSESSEE, IF NOT SATISFIED WITH THE ORDER, CAN FILE AN APPEAL BEFORE THE APPELLATE AUTHORITY UNDER SECTION 246. 7. IN VIEW OF THE ABOVE, WE ADMIT THE ADDITIONAL GR OUND RAISED BEFORE US AND THE MATTER IS RESTORED TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION THAT ASSESSING OFFICER WILL FURNISH THE REASONS RECORDED BEFORE ISSUING NOTICE UNDER SECTIO N 148, THEREAFTER, THE ASSESSEE MAY FILE THE OBJECTIONS THEREON, ON WHICH THE ASSESSING OFFICER MAY PASS APPROPRIATE ORDER. THEREAFTER, IF REQUIRES, HE WILL RE-ADJUDICATE THE ADDITION OF RS. 4,61,500/- AFRESH IN ACCORDANCE WITH LAW. WE ORDER ACCORDINGLY. 8. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 23.04.2010 . SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 23 / 04 /2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.