ITO, New Delhi V. Smt. Madhu Aggarwal, Noida

ITA 2904/DEL/2011

• Counselvise Citation: 290420114 RSA 2011
• Duration Of Justice: 1 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 27-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 03-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AROOP KUMAR SINGHDR
• Assessee Lawyers: K C SINGHAL
• Keywords: Unexplained investment; Additional evidence; Assessment record
• Section: 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI E BENC H BEFORE SHRI I.C. SUDHIR , JM & SHRI A.N. PAHUJA, AM ITA NOS. 2904 & 2905/DEL/2011 WITH CO NO.212/DEL./2011 ASSESSMENT YEAR: 2006-07 ITO, WARD-24(4), , NEW DELHI V/S . SMT. MADHU AGGARWAL G-75, SEC-39 NOIDA-201301 [PAN: AAGPA1598P ] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI K.C.SINGHAL, AR. REVENUE BY SHRI AROOP KUMAR SINGH,DR DATE OF HEARING 27-09-2012 DATE OF PRONOUNCEMENT 28-09-2012 O R D E R A.N.PAHUJA:- THESE APPEALS FILED ON 03.06.2011 BY THE REVENUE AG AINST TWO SEPARATE ORDERS DATED 31.03.2011 OF THE LD. CI T(A)-XXIII, NEW DELHI AND THE CORRESPONDING CROSS OBJECTION[CO] FILED ON 01.0 7.2011 IN THE QUANTUM APPEAL BY THE ASSESSEE, RAISE THE FOLLOWING GROUNDS:- ITA NO.2905/DEL./2011 1. ON THE FACT AND ON THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` . 16,00,000/- MADE BY A.O ON ACCOUNT OF UNEXPLAINED INVESTMENT IN NATIONAL HOUSING BANK. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HE ARING OF THE APPEAL. ITA NO.2904/DEL./2011 1. ON THE FACT AND ON THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF ` . 5,22,503/- IMPOSED BY A.O U/S 271(1)(C) OF THE INCOME TAX ACT. I.T.A .NOS.-2904 & 2905/DEL./2011 &CO NO. 212/DEL./2011 2 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HE ARING OF THE APPEAL. CO NO.212/DEL./2011 1. THE CIT(A) HAVING HELD THAT NO NOTICE U/S 143( 2) HAD BEEN SERVED ON THE ASSESSEE ON OR BEFORE 31.7.2007 AND T HEREFORE, THE ASSESSMENT IS INVALID,SHOULD HAVE QUASHED THE ASSESSMENT ORDER.HENCE THE ASSESSMENT PROCEEDING IT SELF BE QUASHED.. 2. ADVERTING FIRST TO GROUND NO. 1 IN ITA NO.-2905/D EL./2011 , FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING I NCOME OF ` . 1,18,963/- FILED ON 30.06.2006 BY THE ASSESSEE, AFTER BEING PROCESSED O N 13.02.2007 U/S 143(1) OF THE INCOME TAX ACT, 1961[HEREINAFTER REFERRED TO AS THE ACT], WAS SELECTED FOR SCRUTINY WITH THE SERVICE OF A NOTICE U/S 143(2) OF THE ACT, ISSUED ON 18.07.2007. NONE RESPONDED TO THIS NOTICE NOR EVEN TO SUBSEQUENT NOTICE ISSUED ON 5.6.2008 OR 3.11.2008.EVEN NOTICE DATED 8.8.2008 ISSUED U/S 142(1) OF THE ACT ,WENT UNRESPONDED. AS A RESULT , THE ASSESSING OFFICER[AO IN SHORT] PROCEEDED TO COMPLETE THE ASSESSMENT ON THE BASIS O F MATERIAL ON RECORD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED ON THE BASIS OF AIR INFORMATION THAT THE ASSESSEE INVESTED AN AMOUN T OF ` . 16,00,000/- IN RBI BONDS. SINCE THE ASSESSEE DID NOT COMPLY WITH ANY OF THE AFORESAID NOTICE DATED 18.07.2007, 05.06.2008 AND 03.06.2008 OR 8.8.2008 N OR SOURCES OF INVESTMENT IN THESE BONDS WERE EVIDENT FROM RECORDS, THE AO ADDED THE AMOUNT U/S 68 OF THE ACT. 3. ON APPEAL, THE LD. CIT(A) AFTER HAVING A REMAN D REPORT FROM THE AO ON THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AND REJOI NDER OF THE LATTER THEREON, DELETED THE ADDITION, HOLDING AS UNDER:- 6. I HAVE CONSIDERED THE FACTS OF THE CASE AND IT IS SEEN THAT THE APPELLANTS GRIEVANCE THAT SHE DID NOT GET ANY OPPO RTUNITY TO EXPLAIN THE INVESTMENT OF RS. 16 LACS AS NONE OF THE NOTICE S ISSUED BY THE ASSESSING OFFICER WERE SERVED UPON HER. HE CONTENT ION THAT THE FIRST NOTICE WAS ISSUED ON A WRONG ADDRESS EVEN WHEN THE CORRECT ADDRESS WAS AVAILABLE ON THE RETURN OF INCOME FILED IS CORRECT. IT IS FURTHER SEEN THAT THE ASSESSEE HAD ENCLOSED WITH TH E RETURN OF I.T.A .NOS.-2904 & 2905/DEL./2011 &CO NO. 212/DEL./2011 3 INCOME, THE DETAILS OF CAPITAL GAIN COMPUTATION AND THE FACT THAT THE SAME HAD BEEN DEPOSITED IN NATIONAL HOUSING BOARD T O CLAIM DEDUCTION. THE APPELLANT ON GETTING AN OPPORTUNITY DURING APPELLATE PROCEEDINGS HAS FILED THE COPY OF THE SALE DEED. T HE DOCUMENTS FILED ARE ADMITTED AS EVIDENCE IN VIEW OF THE FACT THAT T HE ASSESSEE DID NOT GET ANY OPPORTUNITY TO FILE THE SAME BEFORE THE ASS ESSING OFFICER BECAUSE OF IMPROPER SERVICE OF NOTICE ON THE FIRST TIME. IT IS APPARENT THAT THE INVESTMENT OF RS. 16 LACS IN THE PURCHASE OF BONDS OF NATIONAL HOUSING BOARD HAS BEEN EXPLAINED BY FILING REQUISITE INFORMATION AT THE TIME OF FILING OF THE RETURN OF INCOME, WHICH COULD HAVE BEEN TAKEN INTO CONSIDERATION BY THE ASSESSING OFFICER, EVEN WHILE FRAMING ORDER UNDER SECTION 144. THEREFORE, THERE IS NO REASON TO SUSTAIN THE ADDITION MADE BY THE ASSESSING OFFIC ER. 4.. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A) DELETING THE ADDITION OF ` . 16,00,000/- WHILE THE ASSESSEE IN HER CROSS-OBJECTION CHALLENGED THE VALIDITY OF THE NOTI CE ISSUED U/S 143(2) OF THE ACT ON 18.7.2007, HAVING NOT BEEN SERVED UPON THE ASSES SEE. THE LD. DR WHILE SUPPORTING THE FINDINGS OF THE AO CONTENDED THAT AS PER AIR INFORMATION, THE INVESTMENT OF ` 16,00,000/- WAS MADE IN RBI BONDS WHILE BEFORE THE LD. CIT(A), IT WAS CONTENDED THAT INVESTMENT WAS MADE IN THE BONDS OF NATIONAL HOUSING BOARD. SINCE THE ASSESSEE MIGHT HAVE INVESTED AN E QUIVALENT AMOUNT OF ` 16,00,000/- IN RBI BONDS, THE MATTER MAY BE RESTORE D TO THE FILE OF THE A.O FOR VERIFICATION. ON THE OTHER HAND, THE LD. AR ON BEHA LF OF THE ASSESSEE WHILE CARRYING US THROUGH THE DOCUMENTS PLACED IN THE PAP ER BOOK, CONTENDED THAT THE LD. CIT(A) DELETED THE ADDITION, AFTER HAVING A REM AND REPORT FROM THE A.O AND, THEREFORE, THE MATTER NEED NOT BE RESTORED BACK, TH E INVESTMENT IN THE BONDS OF NATIONAL HOUSING BOARD HAVING BEEN DULY EXPLAINED I N THE DOCUMENTS ANNEXED WITH THE RETURN.. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. THE ISSUE BEFORE US RELATES TO INVESTMENT IN THE BO NDS OF NATIONAL HOUSING BOARD . THE LD. DR CONTENDED THAT BESIDE INVESTMEN T IN THE BONDS OF NATIONAL HOUSING BOARD, THE ASSESSEE MIGHT HAVE INVESTED AN EQUIVALENT AMOUNT OF ` 16,00,000/- IN RBI BONDS AND THEREFORE, THE MATTER MAY BE RESTORED TO THE FILE OF THE A.O FOR VERIFICATION. HOWEVER , THIS CONTENTION IS BASELESS IN VIEW REMAND I.T.A .NOS.-2904 & 2905/DEL./2011 &CO NO. 212/DEL./2011 4 REPORT ,WHEREIN THE AO ACCEPTED THAT THE AMOUNT OF ` . 16,00,000/- WAS INVESTED IN BONDS OF NATIONAL HOUSING BOARD. THE REPORT DAT ED 29.09.2010 OF THE A.O, SUBMITTED BEFORE THE LD. CIT(A) READS AS UNDER:- 1.(A). THE ADDRESS OF THE ASSESSEE, 6137/6, D-6, V ASANT KUNJ, NEW DELHI IS CORRECT AS PER ASSESSMENT RECORD OF AY 200 6-07. (B) AS PER AIR INFORMATION THE ASSESSEE HAS INVESTE D RS. 16 LAKHS WITH NATIONAL HOUSING BANK. NO OTHER EVIDENC E LIKE APPLICATION FORM/CHEQUE ARE AVAILABLE WITH THIS OFFICE. (C) THERE IS NO PROOF AVAILABLE ON THE RECORD THAT THE ASSESSEE HAS SOLD ONE RESIDENTIAL PLOT AT VAISHALI, GHAZIABA D FOR RS. 20 LAKHS. IN THIS REGARD NO SALE DEED OR BANK STATEME NT HAS BEEN FILED IN SUPPORT OF SOURCE OF INVESTMENT. (D) IT IS CORRECT THAT THE INVESTMENT WAS MADE IN N ATIONAL HOUSING BANK AND NOT RBI BONDS AS PER AIR INFORMATION. HOW EVER, DUE TO SOME TYPOGRAPHICAL ERROR IT WAS MENTIONED AS RBI BO ND. BUT THIS STILL REMAINED AS UNEXPLAINED INVESTMENT IN THE ABSENCE O F ANY EVIDENCE. 2. IT IS COMPLETELY WRONG THAT THE NOTICES WERE ISS UED ON THE OLD ADDRESS OF THE ASSESSEE IN THIS REGARD ONLY ONE NOT ICE WAS SERVED, GENERATED FROM THE COMPUTER SHOWING ADDRESS AS GIVE N IN PAN NO. BY THE ASSESSEE HIMSELF. THEREAFTER, SEVERAL NOTIC ES WERE ISSUED BY REGISTERED POST ON THE ADDRESS AS GIVEN BY THE ASSE SSEE ON THE RETURN FOR AY 2006-07 I.E MADHU AGGARWAL, 6137/6, D -6, VASANT KUNJ, NEW DELHI. THESE NOTICES WERE ISSUED ON DATED 05.0 6.2008, 08.08.2008 AND 03.11.2008 WHICH WERE NEVER RESPONDE D BY THE ASSESSEE IN ANY MANNERS. IT MAY ALSO BE ADDED HERE THAT NONE OF THE NOTICES WERE RETURNED BACK BY THE POSTAL AUTHOR ITIES UNDELIVERED, IN SUCH CIRCUMSTANCES IT IS DEEMED TO HAVE BEEN DUL Y SERVED UPON THE ASSESSEE. 3. IT IS SEEN FROM THE PAPERS ENCLOSED WITH THE RET URN THAT NO SUCH PAPERS ARE AVAILABLE AS CLAIMED BY THE ASSESSE E. ON COMPUTATION SHEETS ONLY SOME INTEREST INCOME HAS BE EN SHOWN AS PER ENCLOSURES FILED WITH THE RETURN. NO OTHER PAP ER IN SUPPORT OF INVESTMENT OR SALE OF PROPERTY HAVE BEEN FILED BY T HE ASSESSEE. 5.1 AS IS APPARENT FROM THE AFORESAID REMAND REPO RT, INVESTMENT OF ` 16 LACS WAS ACTUALLY MADE IN THE BONDS OF NATIONAL HOUSING BOARD AND NOT THE RBI BONDS.HOWEVER, DOCUMENTS RELATING SOURCE OF INVESTM ENT WERE SUBMITTED ONLY BEFORE THE LD. CIT(A) AND WERE NOT FOUND TO BE ENCL OSED WITH THE RETURN. THIS FACT IS ALSO ACCEPTED BY THE ASSESSEE AS PER CERTIFICATE RECORDED ON THE PAPERBOOK SUBMITTED BEFORE US. THOUGH THE ASSESSEE SUBMITTED A COPY OF SALE DEED AND EVIDENCE OF SOURCE OF INVESTMENT IN BONDS BEFORE T HE LD. CIT(A), SHE DID NOT APPEAR TO HAVE MADE ANY APPLICATION IN TERMS OF RUL E 46A OF THE IT RULES,1962 FOR ADMISSION OF ADDITIONAL EVIDENCE. EVEN IN THE A BSENCE OF SUCH AN APPLICATION, I.T.A .NOS.-2904 & 2905/DEL./2011 &CO NO. 212/DEL./2011 5 THE LD. CIT(A) ADMITTED THE ADDITIONAL EVIDENCE AND DELETED THE ADDITION, THE ASSESSEE HAVING EXPLAINED SOURCES OF INVESTMENT VI DE CHEQUE DATED 6.1.2006 DRAWN ON SYNDICATE BANK OUT OF SALE PROCEEDS OF A P LOT. THOUGH THE LD. DR ARGUED THAT OPPORTUNITY SHOULD BE GRANTED TO THE AO FOR VERIFICATION OF DOCUMENTS, HE DID NOT REPLY AS TO WHEN OPPORTUNITY WAS GRANTED BY THE LD. CIT(A) , THE AO DID NOT EVEN DOUBT THE GENUINENESS OF THE DOCUMENTS FORWARDED TO HIM. SINCE THE LD. CIT(A) GRANTED SUFF ICIENT OPPORTUNITY TO THE AO BEFORE ADMITTING THE ADDITIONAL EVIDENCE AND THE REAFTER, ALONE DELETED THE ADDITION, CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES AND THE NATURE OF ISSUE AS ALSO OVERWHELMING EVIDENCE PLACE D ON RECORD, WE DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE LD. C IT(A). THEREFORE, GROUND NO.1 IN THE QUANTUM APPEAL OF THE REVENUE IS DISMIS SED. 6. SINCE THE ADDITION ,FORMING THE BASIS OF LEV Y OF PENALTY ITSELF HAS BEEN SET ASIDE, PENALTY IMPOSED U/S 271(1)(C) OF THE ACT ALS O DOES NOT SURVIVE. HONBLE SUPREME COURT IN THE CASE OF K.C.BUILDERS VS. ACIT ,265 ITR 562(SC) HELD THAT ORDINARILY, PENALTY CANNOT STAND IF THE ASSESSMENT ITSELF IS SET ASIDE. WHERE AN ORDER OF ASSESSMENT O R REASSESSMENT ON THE BASIS OF WHICH PENALTY HAS BEEN LEVIED ON TH E ASSESSEE, HAS ITSELF BEEN FINALLY SET ASIDE OR CANCELLED BY THE T RIBUNAL OR OTHERWISE, THE PENALTY CANNOT STAND BY ITSELF AND T HE SAME IS LIABLE TO BE CANCELLED. HONBLE DELHI HIGH COURT IN THE CA SE OF CIT VS. R.DALMIA,(1992)107 TAXATION 107, HELD THAT NO PENAL TY SURVIVES AFTER DELETION OF ADDITIONS, FORMING THE BASIS FOR THE LEVY OF PENALTY. IN THE LIGHT OF OUR AFORESAID FINDINGS IN THE QUAN TUM APPEAL, WE DO NOT FIND ANY INFIRMITY IN THE CONCLUSION OF THE LD. CIT(A) IN CANCELLING THE PENALTY. CONSEQUENTLY, GROUND NO.1 RAISED IN PE NALTY APPEAL IS ALSO DISMISSED. . I.T.A .NOS.-2904 & 2905/DEL./2011 &CO NO. 212/DEL./2011 6 7.. MOREOVER, SOLE GROUND RAISED IN THE CO WAS NOT PRESSED BEFORE US WHILE NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US I N TERMS OF RESIDUARY GROUND NO.2 IN THE APPEALS OF THE REVENUE, ACCORDINGLY, TH ESE GROUNDS ARE DISMISSED. 8. NO OTHER PLEA OR ARGUMENT WAS MADE B EFORE US. 9.. IN THE RESULT, THESE THREE APPEALS ARE DISMISSE D. SD/- SD/- (I.C.SUDHIR) (A. N.PAHUJA) JUDICIAL MEMBER ACCOUNTA NT MEMBER *AMIT KUMAR* 1. ASSESSEE 2. ITO,WARD-24(4), NEW DELHI 3. CIT CONCERNED. 4 CIT(A)-XXIII, NEW DELHI 5. DR, ITAT,E BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI