Income-tax Officer, Hardoi V. Shri Hira Lal Gupta, Hardoi

ITA 310/LKW/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3334 (ITAT-LUCKNOW)
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 01-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Keywords: Gift; Reassessment proceedings; Borrowed satisfaction
• Section: 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B : LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER I.T.A. NO. 310 /LKW/ 2013 ASSESSMENT YEAR: 2005 - 06 INCOME TAX OFFICER, VS. SHRI HIRA LAL GUPTA, HARDOI. PROP GUPTA SERVICE, STATION BAWAN, HARDOI. PAN:AHYPG0613Q. (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. RANU BISWAS, D.R. RESPONDENT BY : SHRI ABHINAV MEHROTRA, ADVOCATE DATE OF HEARING : 30 /0 5 /201 3 DATE OF PRONOUN CEMENT :07/06/2013 ORDER PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF CIT(A) ON A SOLITARY GROUND THAT CIT(A) HAS ERRED IN QUASHING THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER HOLDING ACTION U/S 147 OF THE I. T. ACT AS INVALID PLACING RELIANCE ON VARIOUS CASE LAWS. 2 2. THE FACT S , IN BRIEF, BORNE OUT FROM THE RECORD, ARE THAT THE ASSESSING OFFICER HAS RECEIVED THE INFORMATION FROM THE ADI THAT THE ASSESSEE HAS RECEIVED A GIFT OF ` 5,01,250/ - DURING THE YE AR UNDER CONSIDERATION, WHICH HAS NOT BEEN REFLECTED IN THE RETURN FILED. ON THE BASIS OF THE INFORMATION, THE ASSESSING OFFICER FORMED A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND ISSUED NOTICE U/S 148 OF THE ACT. THE ASSESSEE HAS F ILED OBJECTION STATING THEREIN THAT HE HAS NOT RECEIVED A NY GIFT OF ` 5,01,250/ - AND I N ORDER TO SUBSTAN TIATE THE SAME THE INFORMATION ON FILE AS WELL AS COMPLETE NAME , ADDRESS AND THE WRITTEN CONFESSION OF THE PERSON WHO HAD STATED TO GIFT THE AMOUNT MAY KINDLY BE PROVIDED. IN RESPONSE THERETO IT WAS STATED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS PURCHASED THE DRAFT OF ` 5,01,250/ - ON 20/08/2004 FROM JAI LAKSHMI C OOPERATIVE BANK LTD., FATEHPURI, DELHI. IT WAS CONTENDED BY THE ASSESSEE THAT THE ASSESSEE IS NOT MAINTAINING ANY ACCOUNT WITH THE AFORESAID MENTIONED BANK FOR PURCHASING THE DRAFT IN EXCESS OF ` 50,0 00/ - . HE ACCORDINGLY ASKED THE ASSESSING OFFICER TO FURN ISH BANK STATEMENT ETC. HE ALSO OBJECTED TO THE REOPENING OF THE ASSESSMENT AS IT WAS DONE WITHOUT INDEPENDENT APPLICATION OF MIND OF THE ASSESSING OFFICER. HE SIMPLY REOPENED THE ASSESSMENT ON THE BASIS OF INFORMATION RECEIVED FROM THE ADI. THE CONTENT ION OF THE ASSESSEE WAS REJECTED AND ADDITION OF 3 ` 5,00,000/ - WAS MADE U/S 68 OF THE ACT AGAINST WHICH AN APPEAL WAS FILED BEFORE THE CIT(A) WITH THE SUBMISSION THAT REOPENING IS NOT VALID AS THERE IS NO VALID REASON TO FORM A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. FINDING FORCE IN THE CONTENTION OF THE ASSESSEE, THE CIT(A) HAS ANNULLED THE ASSESSMENT AFTER HOLDING THE REASONS RECORDED BY THE ASSESSING OFFICER WERE NOT SUFFICIENT TO REOPEN THE ASSESSMENT. THE RELEVANT PORTION OF THE C IT(A) IS EXTRACTED AS UNDER: I HAVE CAREFULLY TAKEN INTO CONSIDERATION THE SUBMISSION OF THE A.R. FOR THE APPELLANT AND HAVE GONE THROUGH THE VARIOUS CASE LAW S CITED BY THE AR FOR THE APPELLANT AND PERUSED THE ASSESSMENT ORDER. IT IS SEEN THAT THE A SSESSING O FFICER AFTER RECEIPT OF ADI REPORT IN NOTE FORM ISSUED NOTICE U/S 148 OF THE IT ACT WITHOUT VERIFYING THE CONTENTS THEREOF AND THIS IS A CASE OF BORROWED SATISFACTION. THERE HAD BEEN NO STATEMENT OF SO CALLED DONOR WITH THE ADI, AT THE TIME OF FO RWARDING THE R EPORT NOR WITH THE AO AS WELL AS ADI NEW DELHI TILL THE COMPLETION OF REASSESSMENT PROCEEDINGS . THUS, THERE WAS ONLY REASON TO SUSPECT. THE APPELLANT REQUESTED AGAIN AND AGAIN TO PRODUCE THE DONOR F OR CONFESSION BUT THE SAME HAD NOT BEEN PRO DUCED NOR ANY STATEMENT/CONFESSION OF DONOR WAS ON FILE WHEN THE SAME WAS INSPECTED THE A.R. SINCE THE APPELLANT WAS NOT PROVIDED OPPORTUNITY TO CROSS EXAMINE THE THIRD PARTY ON THE BASIS OF WHICH RE - ASSESSMENT PROCEEDING HAD BEEN INITIATED, THE SAME IS NO T VALID IN THE EYES OF LAW. THE FOLLOWING CASE LAW CITED BY THE APPELLANT CLEARLY SUPPORT THE CONTENTION OF THE APPELLANT'S A.R.: 1. I.T.O. VS. NAVEEN KHANNA (2008) 12 DTR 222 (DEL. TRIB) 2. CIT VS. NUPAM KAPOOR (1995) 212 DTR 491 (P&H) 3. CIT VS. SMC SHAREBROKERS LTD. (2007) 288 ITR 345 (DEL.) 4. CIT VS. ATUL JAIN (2007) 164 TAXMAN 33 (DEL.) 4 5. CIT VS. PRADEEP KUMAR GUPTA (2007) 207 CTR 115 (DEL.) THUS IN THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ACTION TAKEN BY THE ASSESSING OFFICER U/S 147/148 IS NOT MAINTAINABLE AND THE SAME IS QUASHED. ACCORDINGLY THE ASSESSMENT ORDER PASSED BY THE AO IS ANNULLED. SINCE REASSESSMENT IS ANNULLED ON THE BASIS OF REASONS ITSELF NO OTHER ADDITION CAN BE MADE IN VIEW OF THE HON'BLE H IGH COURT IN THE CASE OF CIT VS SRI RAM SINGH REPORTED IN 306 ITR 343. AS SUCH THE OTHER GROUNDS ON MERIT IS NOT BEING TAKEN AS THE REASSESSMENT HAD BEEN ANNULLED. 3. AGGRIEVED, THE REVENUE HAS PREFERRED APPEAL BEFORE THE TRIBUNAL AND PLACED HEAVY RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER. 4. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT EXCEPT THE REPORT OF THE ADI, THERE IS NO MATERIAL BEFORE THE ASSESSING OFFICER TO FORM A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. BESIDES HE HAS PLACED HEAVY RELIANCE UPON THE ORDER OF CIT(A). 5. HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A PERUSAL OF RECORD, WE FIND THAT EXCEPT THE REPORT OF THE ADI, NO MATERIAL WAS AVAILABLE BEFORE THE ASSESSING OF FICER TO FORM A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. REQUIREMENT OF LAW IS THAT BEFORE INITIATING PROCEEDINGS U/S 147 OF THE ACT, THERE SHOULD BE INDEPENDENT MATERIAL BEFORE THE ASSESSING OFFICER TO FORM A BELIEF THAT INCOME CHARGE ABLE TO TAX HAS ESCAPED ASSESSMENT. BUT IN THE INSTANT 5 CASE, THE ESSENTIAL FACTOR FOR REOPENING THE ASSESSMENT IS MISSING. WE, THEREFORE, FIND NO INFIRMITY IN THE ORDER OF CIT(A) WHO HAS RIGHTLY ANNULLED THE ASSESSMENT HAVING HELD THAT THERE IS NO VALID REASON RECORDED FOR REOPENING THE ASSESSMENT. WE, ACCORDINGLY, FIND NO INFIRMITY IN THE ORDER OF CIT(A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 07/06/2013 ) SD/. SD/. ( PRAMOD KUMAR) ( SUNIL KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07/06/2013 *SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR