BHIMA RAJ MEENA, Jaipur V. ITO, Jaipur

ITA 304/JPR/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1928 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 30-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PUNAM RAI DCIT DHK
• Assessee Lawyers: DILEEP SHIVPURI
• Keywords: Unexplained cash credit; Question of law; Reason to believe; Reassessment proceedings
• Section: 147; 148; 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH FOT; IKY JKO ] U;KF;D LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 304/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI BHIM RAJ MEENA, S/O SHRI SITA RAM MEENA, CHHOUTA NETA DHANI, CHAKA, BASSI, DISTT. JAIPUR-303301. CUKE VS. INCOME TAX OFFICER, WARD 7(3), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AXSPM5082H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI DILEEP SHIVPURI (AD.) JKTLO DH VKSJ LS@ REVENUE BY : SMT. PUNAM RAI (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01/11/2017 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 08/11/2017 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 29.01.2015 OF LD. CIT(A) A.Y. 2008-09. THE ASSESSE E HAS RAISED THE FOLLOWING GROUNDS AS UNDER:- 1. THAT ON FACTS AND IN CIRCUMSTANCES OF CASE, LD. CIT(APPEALS) GROSSLY ERRED IN REJECTING THE ADDITIONAL GROUNDS O F APPEAL RAISED REGARDING FINALIZATION OF ASSESSMENT PROCEEDINGS U/ S 147 OF THE ACT AND ISSUE OF NOTICE U/S 148 OF THE ACT OF THE ACT I N CASE OF THE ASSESSEE. ITA 304/JP/15_ SHRI BHIM RAJ MEENA VS. ITO 2 2. THAT THE LD. CIT (APPEALS) GROSSLY ERRED IN CONF IRMING THE ADDITION OF RS. 25 LACS AS LONG-TERMS CAPITAL GAIN IN THE HANDS OF THE ASSESSEE. 3. THAT THE LD. CIT (APPEALS) GROSSLY ERRED AND WAS OTHERWISE EXCESSIVE IN CONFIRMING ADDITION OF 53423 BEING BAL ANCE OF CAPITAL ACCOUNT AS INCOME FROM OTHER SOURCES. 4. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT (APPEALS) GROSSLY ERRED AND WAS UNJUSTIFIED IN SUSTAINING THE ADDITION OF 165432 AS INCOME FROM OTHER SOURCES AGAINST DECLARE D INCOME OF 109523 UNDER THE HEAD BUSINESS AND PROFESSION. 5. THAT THE LD. CIT (APPEALS) GROSSLY ERRED AND ACT ED ILLEGALLY IN CONFIRMING THE ADDITION OF 653098/- AS UNEXPLAINED CREDITED IN SAVING BANK ACCOUNT AS INCOME FROM OTHER SOURCES. 2. GROUND NO. 1 IS REGARDING VALIDITY OF REOPENING OF THE ASSESSMENT U/S 148 AND REFUSAL OF ADMISSION OF ADDITIONAL GROU ND BY THE LD. CIT(A). THE LD. AR OF THE ASSESSEE HAS SUBMITTED IN THIS CA SE ORIGINAL RETURN OF INCOME WAS FILED ON 20.02.2009. SUBSEQUENTLY THE AS SESSING OFFICER HAS ISSUED A NOTICE U/S 148 ON 07.12.2012 WHEREBY PROPO SED TO REOPEN THE ASSESSMENT ON THE GROUND OF INCOME OF ASSESSABLE T O TAX BEING CAPITAL GAIN ON ACCOUNT OF TRANSFER OF PLOT OF LAND OF RS . 25,00,000/- HAS ESCAPED ASSESSMENT AS THE ASSESSEE HAS NOT SHOWN THE SAME I N THE TOTAL INCOME. HE HAS FURTHER CONTENDED THAT SINCE AO DID NOT APPL Y HIS MIND ON THE INFORMATION RECEIVED FROM J.CIT, RANGE-1, UDAIPUR A S THE SAID TRANSACTION OF SALE OF PLOT OF LAND WAS CARRIED OUT BY THE ASSE SSEE IN THE CAPACITY OF POWER ATTORNEY AND NOT AS AN OWNER OF THE LAND. THE REFORE, THE ASSESSING OFFICER HAS PROPOSED TO ASSESSED THE FULL SALE CONS IDERATION AS INCOME OF ITA 304/JP/15_ SHRI BHIM RAJ MEENA VS. ITO 3 THE ASSESSEE WITHOUT APPLYING THE MIND BUT SOLELY ON THE BASIS OF THE INFORMATION RECEIVED FROM J.CIT, RANGE-1, UDAIPUR. THE LD AR THUS CONTENDED THAT THE ASSESSEE RAISED THE ADDITIONAL G ROUND BEFORE THE LD. CIT(A) CHALLENGING THE VALIDITY OF REOPENING AND IS SUING NOTICE U/S 148 HOWEVER, THE LD. CIT(A) DESPITE ISSUING A REMAND O RDER AND NO OBJECTION RAISED BY THE AO HAS REJECTED THE ADDITIONAL GROUN D IN LIMINE. HE HAS FORCEFULLY CONTENDED THAT WHEN THE ADDITIONAL GROU ND RAISED BY THE ASSESSEE IS PURELY LEGAL IN NATURE AND GOES TO THE ROOT OF THE MATTER THEN THE SAME OUGHT TO HAVE BEEN ADMITTED AND ADJUDICATE D BY THE LD. CIT(A) INSTEAD OF REJECTED IN LIMINE. IN SUPPORT OF HIS CO NTENTION HE HAS RELIED UPON THE FOLLOWING DECISIONS AS UNDER:- (I) NTPC V. CIT 229 ITR 383 (SC) (II) CIT V. INDIAN BANK 230 TAXMAN 635 (MAD.) (III) ITO V. JASJIT SINGH 52 TAXMANN.COM 477 (DEL- TRIB.) (IV) ASHA HALDEA V. DY. DIT (INT. TAXANTION), JAIPU R DT. 19.06.2017 IN ITA NO. 11/JP/2016 THUS, THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE ADDITIONAL GROUND MAY BE DECIDED ON MERITS. 3. ON THE OTHER HAND, THE LD. DR HAS VEHEMENTLY OBJ ECTED TO THE ADDITIONAL GROUND RAISED BY THE ASSESSEE BEFORE THE LD. CIT(A) AND SUBMITTED THAT WHEN THE ASSESSEE DID NOT APPEAR BEF ORE THE AO DESPITE ITA 304/JP/15_ SHRI BHIM RAJ MEENA VS. ITO 4 SUFFICIENT OPPORTUNITIES AND THE ASSESSING OFFICER HAS PASSED THE ORDER U/S 144 R.W.S. 147 THEN CONDUCT OF THE ASSESSEE DOES N OT WARRANT RAISING AN ADDITIONAL GROUND BEFORE THE LD. CIT(A). SHE HAS ST RONGLY RELIED UPON THE IMPUGNED ORDER OF THE LD. CIT(A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSMENT WAS REOPENED BY THE AO BY ISSUING A NOTICE U/S 148 ON 07.12.2012. THE REASONS FOR REOPENING OF THE ASSESSMENT HAS BEEN RECORDED BY THE AO ARE REPRODUCED AS UNDER:- AS PER INFORMATION RECEIVED FROM JCIT, RANGE-1, U DAIPUR VIDE LETTER NO. JCIT/R-1/UDR/INT./2012-13 DATED 08.11.20 12, THE AFORESAID ASSESSEE HAS SOLD 4004 SQ. FEET OF LAND SITUATED AT PLOT NO. 9, SHREE RAM COLONY, JAIPUR ON 30.03.2008 TO HI S ASSESSEE VIZ M/S RIDDHI SIDDHI INFRA PROJECTS PVT. LTD., UDAIPUR FOR RS. 25,00,000/-. ON PERUSAL OF ITR FOR A.Y. 2008-09 FILED ON 20.02.2 009 AT S.NO. 2731018042, THE ASSESSEE DID NOT SHOW ANY DETAIL OF CAPITAL GAIN IN THIS REGARD. SINCE, THE ASSESSEE HAS RECEIVED SALE CONSIDERATION OF RS. 25,00,000/- AS PER COPY OF SALE DEED ENCLOSED W ITH THE ABOVE REFERRED LETTER AND NOT SHOWN THE SAME IN HIS TOTAL INCOME, THEREFORE THE INCOME OF RS. 25,00,000/- FOR THE A.Y. 2008-09 DID NOT OFFERED FOR TAXATION BY THE ASSESSEE IN HIS RETURN OF INCOM E, THUS THE INCOME OF RS. 25,00,000/- HAS ESCAPED FROM TAX. I HAVE THEREFORE REASON TO BELIEVE THAT ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE TO INCLUDE THE INCOME IN HIS R ETURN OF INCOME FOR THE A.Y. 2008-09 THE INCOME CHARGEABLE TO TAX O F RS. 25,00,000/- HAS ESCAPED ASSESSMENT WITHIN THE TERM OF SECTION 147 OF THE IT ACT. ITA 304/JP/15_ SHRI BHIM RAJ MEENA VS. ITO 5 THUS, IT IS CLEAR THAT THE AO RECEIVED INFORMATION FROM J.CIT, RANGE-1, UDAIPUR REGARDING SALE OF PLOT OF LAND BY THE ASSES SEE ON 30.03.2008 FOR A CONSIDERATION OF RS. 25,00,000/-. SINCE THE ASSESSE E HAS NOT OFFERED INCOME FROM THE SALE OF PLOT OF LAND THE AO BELIEVE D THAT THE INCOME CHARGEABLE TO TAX OF RS. 25,00,000/- HAS ESCAPED AS SESSMENT. THE ASSESSING OFFICER HAS PROPOSED TO PROCEED AND ASSES S THE ENTIRE SALE CONSIDERATION AS INCOME OF THE ASSESSEE. THE ASSESS EE DID NOT APPEAR BEFORE THE ASSESSING OFFICER AND CONSEQUENTLY THE A SSESSMENT WAS FRAMED U/S 144 R.W.S. 147. THE ASSESSEE HAS CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A) AND ALSO RAISED AN ADDITIONAL GROUND REGARDING VALIDITY OF REOPENING ON WHICH THE LD. CIT(A) WAS PLEASED TO FORWARD THE APPLICATION OF THE ASSESSEE TO THE AO FOR THE COMME NTS AND OBJECTIONS OF THE AO IF ANY. IN THE REMAND REPORT THE ASSESSING O FFICER DID NOT RAISE ANY OBJECTION IN RESPECT OF ADDITIONAL GROUND, HOWEVER, THE LD. CIT(A) BY CONSIDERING THE CONDUCT OF THE ASSESSEE DURING THE REASSESSMENT PROCEEDINGS DECLINED TO ADMIT THE ADDITIONAL GROU ND. IT IS PERTINENT TO NOTE THAT THE NON APPEARANCE OF THE ASSESSEE BEFORE THE AO CANNOT BE A REASON FOR REJECTING THE ADMISSION OF ADDITIONAL GR OUND WHICH IS PURELY LEGAL IN NATURE AND GOES TO THE ROOT OF THE MATTER. THE HONBLE SUPREME COURT IN CASE OF NTPC V. CIT (SUPRA) WHILE DEALING WITH THE ISSUE OF ITA 304/JP/15_ SHRI BHIM RAJ MEENA VS. ITO 6 JURISDICTION OF THE APPELLATE AUTHORITY TO ENTERTAI N AND ADJUDICATE A LEGAL ISSUE HAS HELD AS UNDER:- IN THE CASE OF JUTE CORPORATION OF INDIA LTD. V. C.I.T .[1991] 187 ITR 688, THIS COURT, WHILE DEALING WIT H THE POWERS OF THE APPELLATE ASSISTANT COMMISSIONER OBSERVED THAT AN APPELLATE AUTHORITY HAS ALL THE POWERS WHICH THE ORIGINAL AUTHORITY MAY HAVE IN DEC IDING THE QUESTION BEFORE IT SUBJECT TO THE RESTRICTIONS OR LIMITATIONS, IF ANY, PRESCRIBED BY THE STATUTORY PROVISIONS. IN THE ABSENCE OF ANY STA TUTORY PROVISION, THE APPELLATE AUTHORITY IS VESTED WITH A LL THE PLENARY POWERS WHICH THE SUBORDINATE AUTHORI TY MAY HAVE IN THE MATTER. THERE IS NO GOOD REASON TO JUSTIFY CURTAILMENT OF THE POWER OF THE APPELLATE ASSISTANT COMMISSIONER IN ENTERTAINING AN ADDITIONA L GROUND RAISED BY THE ASSESSEE IN SEEKING MODIFICATION OF THE ORDER OF ASSESSMENT PASSED BY T HE INCOME-TAX OFFICER. THIS COURT FURTHER OBSERVED THAT THERE MAY BE SEVERAL FACTORS JUSTIFYING THE RA ISING OF A NEW PLEA IN AN APPEAL AND EACH CASE HAS TO BE CONSIDERED ON ITS OWN FACTS. THE APPELLATE ASSIS TANT COMMISSIONER MUST BE SATISFIED THAT THE GROUND RAISED WAS BONA FIDE AND THAT THE SAME COULD NOT HAVE BEEN RAISED EARLIER FOR GOOD REASONS. THE APPELLATE ASSISTANT COMMISSIONER SHOULD EXERCISE HI S DISCRETION IN PERMITTING OR NOT PERMITTING THE ASSESSEE TO RAISE AN ADDITIONAL GROUND IN ACCORDANC E WITH LAW AND REASON. THE SAME OBSERVATIONS WOULD APPLY TO APPEALS BEFORE THE TRIBUNAL ALSO. THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO ISS UES ARISING OUT OF THE APPEAL BEFORE THE COMMISSION ER OF INCOME-TAX (APPEALS) TAKES TOO NARROW A VIEW OF THE POWERS OF THE APPELLATE TRIBUNAL [VIDE, E.G., C.I.T, V. ANAND PRASAD [1981] 128 ITR 388(DELHI), C .I.T . V. KARAMCHANDPREMCHAND P. LTD.[1969] 47 ITR 254 (GUJ) AND C.I.T. V. CELLULOSE PRODUCTS O F INDIA LTD .[ 1985] 151 ITR 499 (GUJ) [FB] . UNDOUBTEDLY, THE TRIBUNAL WILL HAVE THE DISCRETION TO ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED. BU T WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QU ESTION OF LAW ARISING FROM THE FACTS WHICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS WE FAIL TO SEE WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER THAT QUESTIO N IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. THE REFRAMED QUESTION, THEREFORE, IS ANSWERED IN TH E AFFIRMATIVE, I.E., THE TRIBUNAL HAS JURISDICTION TO EXAMINE A QUESTION OF LAW WHICH ARISES FROM THE FACT S AS FOUND BY THE AUTHORITIES BELOW AND HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESSEE. WE RE MAND THE PROCEEDINGS TO THE TRIBUNAL FOR CONSIDERATION OF THE NEW GROUNDS RAISED BY THE ASSE SSEE ON THE MERITS. THUS, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS PURELY LEGAL IN NA TURE AND GOES TO THE ROOT OF THE MATTER THE LD. CIT(A) SHOULD HAVE EXERC ISED ITS DISCRETION IN ADMITTING THE SAME AND DECIDING THE ISSUE ON MERITS INSTEAD OF REJECTING THE ADDITIONAL GROUND IN LIMINE. HENCE, THE ADDITIO NAL GROUND RAISED BY THE ASSESSEE IS ADMITTED AND THE ISSUE OF VALIDITY OF R EOPENING OF THE ASSESSMENT IS REMANDED TO THE RECORD OF THE LD. CIT (A) FOR ADJUDICATION ON MERITS. NEEDLESS TO SAY THAT THE ASSESSEE BE GIVEN AN APPROPRIATE ITA 304/JP/15_ SHRI BHIM RAJ MEENA VS. ITO 7 OPPORTUNITY OF HEARING. IT IS MADE CLEAR THAT SINCE THE LEGAL ISSUE RAISED BY THE ASSESSEE GOES TO THE ROOT OF THE MATTER AND HAS BEEN SET ASIDE TO THE RECORD OF THE LD. CIT(A) FOR ADJUDICATION, THEREFOR E, I DO NOT PROPOSE TO GO INTO THE OTHER GROUNDS RAISED BY THE ASSESSEE IN TH IS APPEAL AND THE SAME ARE LEFT OPEN. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08 /11/2017. SD/- FOT; IKY JKO (VIJAY PAL RAO) U;KF;D LNL; @ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 08/11/2017 *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI BHIM RAJ MEENA, JAIPUR. 2. IZR;FKH @ THE RESPONDENT- THE ITO, WARD 7(3), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 304/JP/15) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR