DHARAM RAJ SINGH, NEW DELHI V. ITO, WARD- 61(4), NEW DELHI

ITA 2848/DEL/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 6779 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 23-04-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Search and seizure; Document seized; Charitable institution; Period of limitation; Tangible material; Time period of passing order; Documents seized
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA.NO.2848/DEL./2018 ASSESSMENT YEAR 2009-10 DHARAM RAJ SINGH, 29/481, TRILOK PURI, NEW DELHI VS. INCOME TAX OFFICER WARD-61 (4) NEW DELHI. PAN AAOPS3659K (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI R.K. GAUR, CA FOR REVENUE : SHRI SURENDRA PAL, SR. D.R. DATE OF HEARING : 24.09 .201 8 DATE OF PRONOUNCEMENT : 21 .12 .201 8 ORDER THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28.2.2018 PASSED BY LD. CIT (APPEALS) 20 NEW DELHI. IN THE GROUNDS OF APPEAL ASSESSEE HAS RAISED FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEARNED CIT (A) ERRED IN UPHOLDING THE INITIATION OF PROCEEDING U/S 148 WITHOUT COGENT AND TANGIBLE MATERIAL IN THE POSSESSION OF THE AO. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEARNED CIT (A) HAS ERRED IN UPHOLDING ORDER OF AO WHO PROCEEDED MECHANICALLY AT THE INSTANCE OF INVESTIGATING TEAM WITHOUT ANALYZING THE FACTS AND WITHOUT DUE APPLICATION OF MIND. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) HAS ERRED IN IGNORING THE APPELLANT CONTENTION OF NON-SUPPLY OF MATERIAL RELIED UPON AND REASONS RECORDED THEREFORE BEFORE THE CONCLUSION OF ASSESSMENT AND WRONGLY UPHELD THE REOPENING OF THE ASSESSMENT BY AO. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT HAS BEEN DENIED THE OPPORTUNITY OF VALIDATION OF THE MATERIAL ON RECORD AND CROSS EXAMINATION OF THE PERSON SUPPLYING THE INFORMATION AND DEPOSED BEFORE THE INVESTIGATING TEAM. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE LEGAL POSITION THAT THE PROCEEDINGS SHOULD HAVE BEEN MADE ONLY UNDER SECTION 153C ON THE BASIS OF THE DOCUMENTS / INFORMATION FOUND DURING THE COURSE OF A SEARCH NOT U/S 148/147. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ADDITION OF RS. 12,00,0001- ON ACCOUNT OF ALLEGED PAYMENT TO M/S ROHILKHAND EDUCATIONAL CHARITABLE TRUST. 7. THAT THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSMENT IS INVALID AND ILLEGAL AS IT HAS BEEN MADE AFTER THE LIMITATION PERIOD. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 8.12.2009 DECLARING INCOME OF RS. 2,45,470/-. THEREAFTER INFORMATION WAS RECEIVED FROM ITO WARD 60(1) NEW DELHI ENCLOSING THE INFORMATION RECEIVED FROM ACIT, CENTRAL CIRCLE, BAREILLY, THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION CARRIED OUT FROM 18.9.2014 IN THE CASE OF ROHILKHAND MEDICAL COLLEGE, CERTAIN DOCUMENTS AND PAPERS WERE FOUND AND SEIZED WHICH REVEALED THAT ASSESSEE HAS PAID CASH IN THE FORM OF DONATION/ CAPITATION FEES AMOUNTING TO RS. 12,00,000/- DURING THE RELEVANT FINANCIAL YEAR FOR THE ADMISSION OF HIS SON IN ROHILKHAND MEDICAL COLLEGE. BASED ON THIS INFORMATION, THE ASSESSEES CASE WAS REOPENED U/S 148. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO SUBMIT THE BANK STATEMENT AND EXPLAIN THE SOURCE OF THE PAYMENT OF RS. 12,00,000/-. HOWEVER, THE ASSESSEE DENIED ANY SUCH PAYMENT MADE AND ASKED FOR THE FURTHER INFORMATION ABOUT ANY SUCH PAYMENT MADE TO THE COLLEGE. HOWEVER, THE AO ADDED THE SAID AMOUNT AS UNDISCLOSED INCOME OF THE ASSESSEE. THE SAID AMOUNT HAS ALSO BEEN CONFIRMED BY THE CIT(A) IN HIS APPELLATE ORDER. LD. CIT HAS INCORPORATED THE REASONS RECORDED AND THE INFORMATION AS WELL AS THE SCANNED COPY OF SEIZED DOCUMENTS TO SHOW THAT CAPITATION FEE OF RS. 12,00,000/- WAS PAID IN CASH ON VARIOUS DATES FOR THE ADMISSION OF ASSESSEES SON IN THE ROHILKHAND MEDICAL COLLEGE. BASED ON THIS, LD. CIT (A) HAS AFFIRMED THE VALIDITY OF REOPENING. ASSESSEE BEFORE THE AUTHORITIES BELOW HAD REQUESTED FOR SUPPLY OF DOCUMENTS AND THE INFORMATION RECEIVED BY THE DEPARTMENT AS HE HAD CATEGORICALLY DENIED OF GIVING ANY KIND OF CASH DONATION. HOWEVER, LD. CIT (A) WITHOUT PROVIDING ANY INFORMATION HAD CONFIRMED THE ADDITION. 3. AFTER HEARING BOTH THE PARTIES, WE FIND THAT BASED ON SEIZED DOCUMENTS FOUND DURING THE COURSE OF SEARCH IN THE CASE OF ROHILKHAND MEDICAL COLLEGE, ADDITION HAS BEEN MADE ON THE GROUND THAT ASSESSEE HAS PAID CERTAIN CASH AMOUNT AS DONATION/ CAPITATION FEE FOR THE ADMISSION OF HIS SON IN THE MEDICAL COLLEGE. IF THE ASSESSEE HAS DENIED ANY SUCH TRANSACTION, THEN IT WAS INCUMBENT UPON THE DEPARTMENT TO PROVIDE ALL THOSE MATERIALS ON THE BASIS OF WHICH ADDITION HAS BEEN MADE. SIMPLY AN ENTRY IN THE THIRD PARTIES BOOKS OR DIARIES ANY ADVERSE INFERENCE CANNOT BE DRAWN AGAINST THE ASSESSEE, ESPECIALLY WHEN THE ASSESSEE HAS DENIED SUCH TRANSACTION AND NO MATERIAL HAS BEEN RECOVERED FROM THE ASSESSEE. IN SUCH A CASE, EITHER THE CROSS EXAMINATION SHOULD HAVE BEEN ALLOWED TO THE ASSESSEE AFTER PROVIDING ALL THE MATERIAL AND INFORMATION OR ATLEAST ASSESSING OFFICER SHOULD HAVE ASCERTAIN THE FATE OF SUCH NOTING OF CASH RECEIPTS IN THE HANDS OF THE PERSON SEARCHED AND WHAT WAS THE STAND OF THE SEARCHED PERSON IN THE STATEMENTS RECORDED DURING THE COURSE OF SEARCH IN THE CASE OF ROHILKHAND MEDICAL COLLEGE. ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE FEEL THAT MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER, WHO SHALL CONFRONT ALL THE MATERIAL AND ALSO PROVIDE OPPORTUNITY TO CROSS EXAMINE THE PERSON IN WHOSE POSSESSION SUCH SEIZED DOCUMENTS WAS FOUND; AND ALSO WHETHER ANY SUCH STATEMENT HAS BEEN RECORDED IN THE CASE OF SEARCHED PERSON WHEREBY ASSESSEES NAME HAS BEEN IMPLICATED ON THE BASIS OF SEIZED MATERIAL. AO SHALL PROVIDE DUE OPPORTUNITY TO THE ASSESSEE TO REPRESENT HIS CASE. ACCORDINGLY APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER, 2019. SD/- (AMIT SHUKLA) JUDICIAL MEMBER DELHI, DATED 21 ST DECEMBER, 2019 VEENA COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT G BENCH, DELHI 6. GUARD FILE.