Smt. Poonam Singh, Agra V. I.T.O., Ward-1(3), Agra

ITA 316/AGR/2012

• Counselvise Citation: 31620314 RSA 2012
• Duration Of Justice: 1 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-06-2014
• Assessment Year: 2000-2001
• Appeal Filed On: 11-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANURAG SINHA S
• Keywords: Reopening of assessment; Capital asset; Gift; Difference of opinion; Change of opinion; Reassessment proceedings; Borrowed satisfaction
• Section: 133A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO. 183 & 98/AGRA/ 2012 A.YS. 1999-2000 & 2001-02 SMT. SEEMA GUPTA VS. ASSTT. COMMISSIONER OF INCO ME TAX, 10,JAWAHAR NAGAR, CIRCLE-1, AGRA (PAN ACPPG 1919 B) APPELLANT BY : SHRI PANKAJ GAR GH, AND SHRI ANURAG SINHA, ADVOCATES RESPONDENT BY : SHRI WASEEM ARS HAD, SR. D.R.. ITA NO. 411 /AGRA/ 2011 ASSESSMENT YEAR 1999-2000 HARJEET SINGH VS. ACIT, CIRCLE 1(1) LEGAL HEIR OF AGRA LATE GURBACHAN SINGH, AGRA (PAN ADBPS 5638 N) APPELLANT BY : NONE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NO. 391 /AGRA/ 2012 ASSESSMENT YEAR 1999-2000 HARJEET SINGH VS. ASSESSING OFFICER WARD 1(2), S/O. GURBACHAN SINGH, AGRA. AGRA (PAN ADBPS 5638 N) APPELLANT BY : NONE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NOS.183 & 98/AGRA/2012 2 ITA NO. 509/AGRA/ 2012 ASSESSMENT YEAR 2000-01 MAHESH KUMAR VS. INCOME TAX OFFICER, PROP. M/S KUMAR DAILY NEEDS STORE WARD 1(2), TAJ ROAD, SADAR BAZAR, AGRA AGRA (PAN AAXPG 0847 Q) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NO. 307, & 308/AGRA/ 2012 A.YS 1999-2000 & 2000-01 POONAM FAMILY TRUST VS. INCOME TAX OFFICER, 92, KALINDI PURAM, BYE PASS ROAD WARD 1(3), AGRA AGRA (PAN AAATP 3414 B) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NO. 312, & 316/AGRA/ 2012 A.YS 1999-2000 & 2000-01 SMT. POONAM SINGH VS. INCOME TAX OFFICER, 92, KALINDI PURAM, BYE PASS ROAD WARD 1(3), AGRA AGRA (PAN AGAPS 0216 J) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NOS.183 & 98/AGRA/2012 3 ITA NO. 309, & 311/AGRA/ 2012 A.YS 1999-2000 & 2000-01 DR. R.P. SINGH FAMILY TRUST VS. INCOME TAX OFFICE R, 92, KALINDI PURAM, BYE PASS ROAD WARD 1(3), AGRA AGRA (PAN AAATR 3333 H) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NO. 310/AGRA/ 2012 A.YS 1999-2000 DR. R.P. SINGH VS. INCOME TAX OFFICER, 92, KALINDI PURAM, BYE PASS ROAD WARD 1(3), AGRA AGRA (PAN ANAPS 9268 H) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NO. 224/AGRA/ 2012 A.Y 2004-2005 SHRI SHARAD LUTHRA (HUF) VS. INCOME TAX OFFICER, 37, SAKET COLONY, SHAHGANJ, WARD 2(4), AGRA AGRA (PAN AAHHS 6886 D) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NOS.183 & 98/AGRA/2012 4 ITA NO. 215/AGRA/ 2012 A.Y 1999-2000 SMT. SUBHANGI KHANDELWAL VS. INCOME TAX OFFICER, 45, JANTA COLONY, SHAHGANJ WARD 2(4), AGRA AGRA (PAN ACZPK 6808 P) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NO. 400/AGRA/ 2012 A.Y 1999-2000 SMT. ANITA KHANDELWAL VS. INCOME TAX OFFICER, 45, JANTA COLONY, SHAHGANJ WARD 2(2), AGRA AGRA (PAN ADMPA 0252 H) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NO. 225/AGRA/ 2012 A.Y 1999-2000 SHRI VINAY KUMAR JAIN, VS. INCOME TAX OFFICER, C/O. CHETAK FOOTWEAR, WARD 1(3), SHOE CENTER HING KI MANDI AGRA AGRA (PAN AARPJ 3136 F) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NOS.183 & 98/AGRA/2012 5 ITA NO. 283/AGRA/ 2012 A.Y 1999-2000 SHRI VISHWAMITRA MAHAJAN VS. INCOME TAX OFFICER, 62, JAIPURA HOUSE, WARD 1(3), AGRA AGRA (PAN AAYPM 9856 C) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NO. 176 & 177/AGRA/ 2012 A.YS. 1999-2000 & 2000-2001 SHRI RAKESH KUMAR ARORA VS. INCOME TAX OFFICER, 17, PRABHU NAGAR, JAIPUR HOUSE, WARD 2(4), AGRA AGRA (PAN ADNPA 9507 E) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NO. 08/AGRA/ 2012 A.Y 1999-2000 SHRI RAVI BHUSHAN VS. INCOME TAX OFFICER, S/O. SHRI KUNDAN LAL, WARD 2(4), 42, CHANDRA LOK COLONY, AGRA JAIPUR HOUSE, AGRA (PAN ABBPB 8195 R) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NOS.183 & 98/AGRA/2012 6 ITA NO. 510/AGRA/ 2012 A.Y 2000-2001 AMAR UPADHYAYA VS. INCOME TAX OFFICER, 3-B, ALOK NAGAR, SHAHGANJ, WARD 2(2), AGRA AGRA (PAN AABPU 7597 D) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NOS. 281 & 282/AGRA/ 2012 A.YS. 1999-2000 & 2000-01 JEEWAT RAM FAMILY TRUST VS. INCOME TAX OFFICER, 42/156 & 158, BILLOCHPURA WARD 2(1), AGRA AGRA (PAN AAFPW 0992 C) APPELLANT BY : SHRI RAJENDRA SHARMA, ADV OCATE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NOS. 184 & 96/AGRA/ 2012 A.YS. 1999-2000 & 2001-02 SMT. BHAWNA GUPTA VS. INCOME TAX OFFICER, 10- JAWAHAR NAGAR CIRCLE-1, AGRA AGRA (PAN AEZPG 3740 G) APPELLANT BY : SHRI PANKAJ GUPTA AND SHRI ANURAG SINHA, ADVOCATES RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NOS.183 & 98/AGRA/2012 7 ITA NO. 517/AGRA/ 2012 A.Y 2000-2001 SMT. EKTA MISHRA VS. INCOME TAX OFFICER, 106, BHARATPUR HOUSE, WARD 1(1), CIVIL LINES, AGRA AGRA (PAN AFSPM 7070H) APPELLANT BY : NONE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R ITA NO. 518/AGRA/ 2012 A.Y 2000-2001 PRADEEP KUMAR MISHRA VS. INCOME TAX OFFICER, 106, BHARATPUR HOUSE, WARD 1(3), AGRA AGRA (PAN AFEPK 5946 G) APPELLANT BY : NONE RESPONDENT BY : SHRI WASEEM AR SHAD, SR. D.R (APPELLANT) (RESPONDENT) DATE OF HEARING : 05.06.2014 DATE OF PRONOUNCEMENT : 06.06.2014 ITA NOS.183 & 98/AGRA/2012 8 O R D E R PER BENCH: 1. AS ALL THESE APPEALS INVOLVE A COMMON GRIEVANCE, ARISING OUT OF PRIMA FACIE MATERIALLY SIMILAR FACTS, AGAINST REOPENING OF THE ASSESSMENT, WE ARE TAKING UP ALL THESE APPEALS TOGETHER. 2. WHILE WE HAVE HEARD SEVERAL LEARNED REPRESENTATI VES, INCLUDING SHRI RAJENDRA SHARMA, SHRI PANKAJ GARGH AND SHRI ANURAG SINHA, IN SUPPORT OF ASSESSEES GRIEVANCES CHALLENGING VALIDITY OF REASS ESSMENT PROCEEDINGS, FOR THE SAKE OF CONVENIENCE, AND WITH THE CONSENT OF THE LE ARNED REPRESENTATIVES, WE HAVE TAKEN UP THE CASE OF SEEMA GUPTA FOR THE ASSESSMENT YEAR 1999-2000 (I.E. ITA NO. 183/ AGRA/ 2012) AS THE LEAD CASE, FOR THE SAKE OF CONVENIENCE. WE WILL. HOWEVER, TAKE UP ARGUMENTS OF ALL THE LEARNED REPRESENTATIVE S, WHICH ARE BROADLY ON THE SAME LINES, TOGETHER. 3. IN ITA NO 183/ AGRA/ 2012, WHICH WE ARE TAKING U P AS THE LEAD CASE, THE APPEAL IS DIRECTED AGAINST THE ORDER DATED 28 TH NOVEMBER 2011, IN THE MATTER OF ASSESSMENT UNDER SECTION 143 (3) R.W.S. 147 OF THE INCOME TAX ACT, 1961, FOR THE ITA NOS.183 & 98/AGRA/2012 9 ASSESSMENT YEAR 1999-2000. IN THE FIRST GROUND OF APPEAL, WHICH WE ARE TAKING UP ALONGWITH MATERIALLY SIMILAR GRIEVANCE TAKEN IN ALL THE APPEALS, THE ASSESSEE IS AGGRIEVED THAT, THE LEARNED CIT(A) HAS WRONGLY, ILLEGALLY AND ARB ITRARILY REJECTED THE APPELLANTS OBJECTIONS REGARDING INITI ATION OF PROCEEDINGS UNDER SECTION 147 OF THE ACT . 4. THE FACTUAL MATRIX GIVING RISE TO THIS GRIEVANCE BEFORE US IS LIKE THIS. THE ASSESSEE HAD FILED HER RETURN OF INCOME, DISCLOSING A TAXABLE INCOME OF RS 84,953, ON 1 ST FEBRUARY 2000. THE ASSESSEE HAD, DURING THIS YEAR , RECEIVED A GIFT OF RS 2,00,000 FROM ONE NEELAM TRUST, PROPRIETOR OF KALPA NA ENTERPRISES, 31/67 LOHAR GALI AGRA. WHILE THE RETURN SO FILED WAS APPARENTL Y NOT SUBJECTED TO ANY SCRUTINY ASSESSMENT, THE ASSESSMENT OF THE ASSESSEE WAS SUBJ ECTED TO REASSESSMENT PROCEEDINGS VIDE NOTICE DATED 31 ST MARCH 2006. AS FOR THE REASONS RECORDED FOR SO RE-OPENING THE ASSESSMENT, THE ASSESSING OFFICER, V IDE NOTING DATED 28 TH MARCH 206, RECORDED THE REASONS FOR REOPENING THE ASSESSM ENT AS FOLLOWS: ITA NOS.183 & 98/AGRA/2012 10 REASON FOR INITIATING PROCEEDINGS U/S 147 OF THE I. T. ACT INFORMATION HAS BEEN RECEIVED VIDE LETTER F.NO. ADD L.CIT/R- 4/SURVEY/2004-05 DATED 28.03.2005 OF ADDL. CIT, RAN GE-4, AGRA AND VIDE LETTER F NO. ITO-4(1)/AGRA/148/2005-06 DATED 2 2.03.2006 OF ITO- 4(1), AGRA THROUGH ADDL. CIT, RANGE 4, AGRA VIDE HI S ENDORSEMENT F NO. ADDL. CIT/R-4/GIFTS/2005-06/1331 DATED 24.03.20 06 THAT A SURVEY U/S 133A WAS CONDUCTED ON 22.4.2001 AT THE OFFICE P REMISES OF SH. D.K.AGARWAL, CA, 245, MADHAV KUNJ, NEAR PRATAP NAGA R, AGRA. THE SURVEY PARTY HAS REPORTED THAT AS MANY AS 292 TRUST S AND THEIR FUNDS ARE CONTROLLED BY SH. D.K. AGARWAL. THESE TRUST MOS TLY SHOW THEIR ADDRESSES AT 245-MADHAV KUNJ, 51/45A, MADHAV KUNJ O R AGRA 41/67, LOHAR GALI, AGRA. ON EXAMINATION OF THE SURVEY MATE RIAL IT HAS ALSO BEEN FOUND THAT SH. D.K. AGARWAL HAS CREATED HUNDRE DS OF TRUSTS OVER WHICH HE EXERCISES CONTROL AS TRUSTEE SH. D.K. AGAR WAL HAS BEEN CREATING BOGUS TRUST IN THE NAME OF GOD/GODDESSES O F WHICH HE OR HIS FAMILY MEMBERS AND HIS OTHER ASSOCIATES ARE TRUSTEE S. THE DOCUMENTS SHOW THAT THE SH. DK AGARWAL KEEPS RECORD OF THE TR ANSACTIONS TO BE SHOWN AS MADE THROUGH THESE TRUSTS. THESE TRANSACTI ONS ARE MOSTLY OF RECEIPTS OF GIFTS BY THE TRUSTS AND GIFTS MADE BY T HE TRUSTS TO UNKNOWN PERSONS OF AGRA. HATHARAS, BHARATPUR, GWALIOR ETC. THESE TRUSTS DO NOT CONDUCT ANY BUSINESS BUT LARGE RECEIPT OF MONEY IS SHOWN IN THE HANDS OF TRUSTS BY WAY OF GIFT BUSINESS PROFIT DONATION E TC. THE TRUSTS HAVE RECEIVED GIFTS IN CASH FROM OTHER TRUSTS AND THESE TRUSTS HAVE GIVEN GIFTS TO VARIOUS PERSONS. THERE IS NO RELATIONSHIP BETWEE N DONOR AND DONEE. FURTHER MORE, ONE SH. LALIT KUMAR AGARWAL, ASSESSEE OF WARD 4(2), AGRA HAS STATED THAT SH. D.K. AGARWAL HAS CREATED B OGUS TRUSTS IN THE NAME OF SH. LALIT KUMAR AGARWAL AND THAT ALTHOUGH H E HAS BEEN SHOWN AS TRUSTEE, HE HAS NO KNOWLEDGE OR THE ACTIVITIES O F THE TRUSTS. THE CIT(A)-II, AGRA HAS ALSO GIVEN HIS FINDINGS IN THE CASES OF THE TRUSTEES SH. VISHNU BHAGWAN AGARWAL, SMT. KUSUM KUMARI, SH. RAVINDRA KUMAR, SH. RADHA BALLABH & H. D.K. AGARWAL, SH. SHI TAL PRASAD JAIN THAT M/S VISHNU BHAGWAN FAMILY TRUST, M/S RADHA TRU ST, M/S RENU AGARWAL TRUST.M/S SHITAL PRASAD JAIN (P) FAMILY TRU ST ARE BOGUS TRUSTS ITA NOS.183 & 98/AGRA/2012 11 AND THE INCOME SHOWN IN THE HANDS OF TRUSTS ACTUALL Y BELONGS TO TRUSTEES VIDE HIS ORDER DATED 8/9.07.2004. ALL THESE TRUSTS ARE ACTUALLY MANAGED AND CONTROLLED BY SH. D.K. AGARWAL, CA. IT HAS ALSO BEEN INFORMED THAT ANNEXURE-19 OF SEIZE D MATERIAL DURING THE SURVEY SHOWS THAT TRUSTS M/S KALPANA ENTERPRISE S, 4/138, HING KI MANDI, AGRA PROP. M/S NEELUM TRUST 27/62, PATHWARI, AGRA WHICH ARE ALSO MANAGED AND CONTROLLED BY SH. D.K. AGARWAL, CA HAS GIVEN GIFT OF RS.2,00,000/- THROUGH DD/CHEQUE NO.306424 ON 26.03. 1999 TO THE ABOVE NAMES ASSESSEE SMT. SEEMA GUPTA, W/O PRADEEP KUMAR GUPTA, 10, JAWAHAR NAGAR, AGRA WHO FALLS UNDER THE JURISDICTIO N OF THE UNDERSIGNED. IN VIEW OF THE ABOVE, IT IS CLEAR THAT SH. D.K. AGA RWAL HAS BEEN CREATING BOGUS TRUSTS WHICH ARE INVOLVED IN GIVING ENTRIES O F GIFTS. AS PER INFORMATION RECEIVED THESE GIFTS HAVE BEEN FOUND TO BE UNACCOUNTED MONEY OF THE BENEFICIARIES THEMSELVES. I HAVE, THER EFORE, REASONS TO BELIEVE THAT INCOME TO THE TUNE OF RS.2,00,000/- HA S ESCAPED ASSESSMENT IN THE CASE OF SMT. SEEMA GUPTA FOR THE ASSESSMENT YEAR 1999-2000. 5. THE ASSESSEE RAISED HIS GRIEVANCES AGAINST THIS RE-OPENING OF ASSESSMENT, BUT WITHOUT ANY SUCCESS. THE ASSESSEE ALSO RAISED A SPE CIFIC GROUND AGAINST REOPENING OF ASSESSMENT BEFORE THE LEARNED COMMISSIONER (APPE ALS) BUT AGAIN WITHOUT ANY SUCCESS. ONE OF THE CONTENTIONS OF THE ASSESSEE BEF ORE THE LEARNED COMMISSIONER (APPEALS) WAS THAT THE ASSESSING OFFICER, WHILE RE CORDING THE REASONS FOR REOPENING THE ASSESSMENT) ACTED SOLELY ON THE INFOR MATION RECEIVED FROM THE ADDITIONAL CIT, RANGE 4, AGRA, AND HE RECORDED THE SAME REASONS AS PROVIDED IN THE INFORMATION, WITHOUT VERIFYING THE FACTS, HAVIN G NO SPECIFIC MATERIAL AND INFORMATION DIRECTLY RELATED WITH THE ASSESSEE ORE WITH THE GIFTS RECEIVED BY THE ITA NOS.183 & 98/AGRA/2012 12 ASSESSEE FOR THE YEAR UNDER CONSIDERATION BY WHICH IT CAN BE PROVED OR ESTABLISHED THAT THE GIFTS RECEIVED BY THE ASSESSEE (APPELLANT) ARE BOGUS. IT WAS ALSO CONTENDED THAT THE REASONS TO BELIEVE THAT INCOME HAS ESCAPE D ASSESSMENT SHOULD NECESSARILY MUST BE OF THE ASSESSING OFFICER WHO R ECORDS THE REASONS AND NOT OF ANY OTHER AUTHORITY. IT WAS CONTENDED THAT BORROWE D SATISFACTION OF THE ASSESSING OFFICER CANNOT SUFFICE OR SUBSTITUTE FOR HIS REASON S FOR REOPENING THE ASSESSMENT. LEARNED COMMISSIONER (APPEALS) ALSO REJECTED THE GR IEVANCES AGAINST REOPENING OF ASSESSMENT AND, INTER ALIA, OBSERVED AS FOLLOWS: THE LEARNED AR IS ALSO NOT CORRECT IN STATING THA T THE REASON WAS RECORDED ON THE DIRECTION OF THE OTHER AUTHORITY AN D THE REASONS RECORDED ARE NOT OF THE AO. IT MAY BE SEEN FROM THE REPORT ANNEXED WITH THIS ORDER AT ANNEXURE 1 THAT THE REPORT WAS P REPARED BY THE ITO 4(1) IN THE NORMAL COURSE OF HIS OFFICIAL DUTY AFTE R CONDUCTING A SURVEY OPERATION AND PASSING OF THE INFORMATION WITH REGAR D TO ENTRY BUSINESS BEING CARRIED OUT BY SHRI D K AGARWAL, TO INFORM AB OUT VARIOUS ENTRIES PROVIDED BY HIM IN THE FORM OF BOGUS GIFTS TO VARIO US PERSONS FOR TAKING NECESSARY ACTION IN THE CASE OF THOSE PERSONS BY TH E RESPECTIVE ASSESSING OFFICERS. IN THIS REPORT, OR WHILE FORWARDING THIS REPORT TO THE CONCERNED ASSESSING OFFICERS, NO DIRECTION WAS ISSUED BY ANY SUPERIOR AUTHORITY SUCH AS ADDITIONAL COMMISSIONER OR THE COMMISSIONER , TO INITIATE PROCEEDINGS. IT IS THE AO, AFTER EXAMINATION OF THI S INFORMATION AND APPLYING HIS MIND AFTER FINDING THAT THE RETURN OF THE INCOME OF THE APPELLANT WAS NOT EXAMINED DUE TO THE RETURN BEING ONLY PROCESSED UNDER SECTION 143(1)(A), WHICH IS NOT AN ASSESSMENT ORDER PASSED UNDER THE INCOME TAX ACT, FORMED A PRIMA FACIE BELIEF THA T INCOME TO THE EXTENT OF RS 2,00,000 HAS ESCAPED THE ASSESSMENT BE CAUSE THE REPORT PREPARED IN CASE OF SHRI D K AGARWAL, AFTER THE SUR VEY OPERATION, CLEARLY BROUGHT THE FACT TO THE KNOWLEDGE OF THE DE PARTMENT THAT THE HE ITA NOS.183 & 98/AGRA/2012 13 WAS IN THE BUSINESS OF PROVIDING ENTRY OF BOGUS GI FT AND NAME OF THE APPELLANT APPEARED IN THE LIST OF BENEFICIARIES AND SHE WAS ISSUED CHEQUE OF RS 2,0,00 SHOWING GIFTS FROM THE ABOVE MENTIONED TRUSTS, OUT OF SUCH HUNDREDS OF FICTITIOUS TRUST AS I HAVE ALREADY DISC USSED IN THIS ORDER. THEREFORE, I DONOT AGREE WITH THE ARGUMENT TAKEN BY THE LEARNED AR THAT THE AO RECORDED THE SAME REASONS AS PROVIDED I N THE REPORT WITHOUT VERIFYING THE FACTS, HAVING NO SPECIFIC MAT ERIAL AND INFORMATION DIRECTLY CONNECTED WITH THE ASSESSEE OR THE GIFTS R ECEIVED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. 6. THE ASSESSEE IS AGGRIEVED, INTER ALIA, BY THESE FINDINGS AND CONCLUSIONS OF THE LEARNED CIT(A) AND IS IN APPEAL BEFORE US. 7. IT IS THE CONTENTION OF THE LEARNED REPRESENTATI VES BEFORE US THAT THE VIEWS SO EXPRESSED BY THE LEARNED COMMISSIONER (APPEALS) ARE NO LONGER SUSTAINABLE IN LAW, IN THE LIGHT OF THE DECISIONS OF THE COORDINATE BEN CHES IN THE CASES OF ITO VS VIJENDRA KUMAR ( ORDER DATED 19.08.2011 IN ITA NO. 1202/DEL/2009; NOW REPORTED AS 67 DTR 283) AND ITO VS AJAY KUMAR ( ORDER DATED 27.4.2012 IN ITA NO. 196/DEL/2009). IT IS SUBMITTED THAT ON MATERIALLY S IMILAR FACTS, AND IN THE CASES WHEREIN REASSESSMENT HAS BEEN RESORTED TO CONSEQUEN T TO THE SAME SURVEY PROCEEDINGS AND WHEREIN THE REASONS FOR REOPENING A RE SIMILARLY WORDED, THE CO- ORDINATE BENCH HAS HELD THAT, THE AO HAS PROCEEDED ON THE BORROWED SATISFACTION FOR RE-OPENING THE ASSESSMENTS AND THAT THE ASSESS ING OFFICER HAS NOT APPLIED HIS ITA NOS.183 & 98/AGRA/2012 14 MIND TO THE FACTS OF THE ASSESSEES CASE. IT IS AL SO POINTED OUT THAT THOUGH THE IMPUGNED ORDER WAS PASSED BY THE LEARNED COMMISSION ER (APPEALS) ON 28 TH NOVEMBER 2011 , WHEREAS ONE OF THE DECISIONS OF THE COORDINATE BENCH WAS BY THEN ALREADY PASSED ON 19 TH AUGUST 2011, LEARNED COMMISSIONER (APPEALS) DID NO T HAVE AN OPPORTUNITY TO CONSIDER THE SAME AS IT WAS NOT B ROUGHT TO HIS NOTICE. OUR ATTENTION IS ALSO INVITED TO SEVERAL SMC DECISIONS OF THE AGRA BENCH, ON THE SAME LINES, UPHOLDING THE SIMILAR OBJECTIONS OF THE ASSE SSEE.. HOWEVER, IT IS NOT REALLY NECESSARY TO DEAL WITH THESE SMC BENCH CASES AS TH E HIERARCHICAL PRECEDENCE VALUE OF THE DIVISION BENCHES IS CERTAINLY HIGHER, AND ONCE THAT A DIVISION BENCH HAS TAKEN A CALL ON THE SAME ISSUE, WE NEED NOT DEA L WITH THE SMC BENCH DECISIONS ON THAT ISSUE. IN ALL FAIRNESS, HOWEVER, IT IS AC CEPTED THAT THE LEARNED CIT(A) DID NOT HAVE ANY OPPORTUNITY TO CONSIDER THESE DECISION S LEARNED REPRESENTATIVES, THEREFORE, URGE US TO QUASH THE ASSESSMENT ON THE S HORT GROUND THAT THE SATISFACTION ARRIVED AT BY THE ASSESSING OFFICER WAS NOT HIS OWN BUT WAS A BORROWED SATISFACTION AND THE REASONS FOR REOPENING THE ASS ESSMENT WERE THUS VITIATED IN LAW. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OT HER HAND, CONTENDS THAT EACH CASE IS TO BE DECIDED ON ITS OWN MERITS AND JUST BE CAUSE, IN ONE OF THE CASES IT IS HELD THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS INDEPENDENT MIND WHILE RECORDING THE REASONS FOR REOPENING THE ASSESSMENT, IT CANNOT BE SAID THAT IN ALL ITA NOS.183 & 98/AGRA/2012 15 CASES OF REOPENING OF ASSESSMENT OF CASES, EVEN AS A CONSEQUENCE OF SAME SURVEY PROCEEDINGS, THE ASSESSING OFFICERS HAVE NOT APPLIE D THEIR MIND AND ARRIVED AT THEIR INDEPENDENT REASONS TO RE-OPEN THE ASSESSMENT. OUR ATTENTION IS THEN INVITED TO THE DECISION OF AGRA BENCH IN THE CASE OF ANIL KUMAR SI NGHAL VS ITO [2013] 33 TAXMANN.COM 434 (AGRA- TRIB), WHEREIN IT IS HELD TH AT A REASSESSMENT CAN BE VALIDLY INITIATED ON THE BASIS OF INFORMATION RECEI VED FROM T\HE INVESTIGATION WING. LEARNED DEPARTMENTAL REPRESENTATIVE URGES US TO AT BEST REMIT THE MATTER TO THE FILE OF THE LEARNED CIT(A) FOR FRESH ADJUDICATION I N THE LIGHT OF ALL THE JUDICIAL PRECEDENTS, INCLUDING THE PRECEDENTS FILED BEFORE U S BY THE PARTIES, AS MAY BE AVAILABLE AT THE RELEVANT POINT OF TIME. LEARNED DE PARTMENTAL REPRESENTATIVE ALSO SUBMITS THAT, AS A CASE BY CASE ANALYSIS WOULD SHOW , THE ASSESSING OFFICER HAS ARRIVED AT HIS OWN SATISFACTION IN THE LIGHT OF THE MATERIAL ON RECORD. HE SUBMITS THAT HERE IS A CASE IN WHICH THE ASSESSING OFFICER HAS COME TO KNOW, THROUGH OFFICIAL CHANNELS THOUGH, THAT THERE IS ONE D K AGA RWAL WHO IS ENGAGED IN THE BUSINESS OF BOGUS GIFTS AND THE NAME OF THE ASSESSE E FIGURES IN THE LIST OF BENEFICIARIES OF THIS RACKET. ON THESE FACTS, AS AN Y REASONABLE PERSON WOULD HOLD THE VIEW, INCOME OF THE ASSESSEE, TO THE EXTENT OF GIFT, HAS ESCAPED ASSESSMENT, AND THAT IS PRECISELY WHAT THE ASSESSING OFFICER HAS RE CORDED. IN BRIEF REJOINDER, LEARNED REPRESENTATIVES HAVE SUBMITTED THAT THEY HA VE NO OBJECTION TO THE MATTER ITA NOS.183 & 98/AGRA/2012 16 BEING REMITTED TO THE FILE OF THE LEARNED COMMISSIO NER (APPEALS) BUT SINCE THERE ARE PENDING TAX DEMANDS IN ALL THESE CASES, WE SHOU LD AT LEAST SET OUT A REASONABLE TIME FRAME WITHIN WHICH THE COMMISSIONER (APPEALS) MUST DISPOSE OF THE REMANDED MATTER. 8. IN OUR CONSIDERED VIEW, SO FAR AS THE VALIDITY O F REASONS FOR REOPENING OF ASSESSMENT IS CONCERNED, THE LEGAL POSITION IS FAIR LY WELL SETTLED. HONBLE BOMBAY HIGH COURT, IN THE CASE OF HINDUSTAN LEVER LTD. VS. R.B. WADKAR (268 ITR 332), HAS, INTER ALIA, OBSERVED THAT '.IT IS NEEDLESS TO MENTION THAT THE REASONS ARE REQUIRED TO BE READ AS THEY WERE RECORD ED BY THE AO. NO SUBSTITUTION OR DELETION IS PERMISSIBLE. NO ADDITIO NS CAN BE MADE TO THOSE REASONS. NO INFERENCE CAN BE ALLOWED TO BE DRAWN ON THE BASIS OF REASONS NOT RECORDED. IT IS FOR THE AO TO DISCLOSE AND OPEN HIS MIND THROUGH THE REASONS RECORDED BY HIM. HE HAS TO SPEAK THROUGH THE REASON S .' HONBLE BOMBAY HIGH COURT, IN THE CASE OF PRASHANT S. JOSHI VS. ITO (324 ITR 154) HAS OBSERVED THAT ' THE REASONS WHICH ARE RECORDED BY THE AO ARE THE ON LY REASONS WHICH CAN BE CONSIDERED WHEN FORMATION OF BELIEF IS IMPUG NED '. IN THIS VIEW OF THE MATTER, WHEN VALIDITY OF REASONS RECORDED FOR REOPE NING THE ASSESSMENT, IT IS NOT OPEN TO ANY AUTHORITY TO REFER TO ANYTHING OTHER TH AN THE ACTUAL REASONS RECORDED ITA NOS.183 & 98/AGRA/2012 17 FOR RE-OPENING THE ASSESSMENT. THE REASONS SO REC ORDED MUST MEET THE JUDICIAL APPROVAL ON STANDALONE BASIS VIS--VIS FACTS OF THE CASE. THERE CANNOT, THEREFORE, BE ANY SCOPE FOR ANY SWEEPING GENERALIZATIONS IN THIS MATTER. TO THIS EXTENT, LEARNED DEPARTMENTAL REPRESENTATIVE IS INDEED RIGHT AND EAC H CASE MUST BE EXAMINED INDEPENDENT OF EACH OTHER AND VIS--VIS ITS OWN FAC TS AND THE REASONS RECORDED. HAVING SAID THAT ONCE A HIGHER JUDICIAL AUTHORITY H AS EXPRESSED VIEWS ON MATERIALLY SIMILAR FACTS, IT CANNOT BE OPEN TO A LOWER JUDICIA L FORUM TO DISREGARD THE VIEWS SO EXPRESSED, AND THE LEGAL POSITION SO ARTICULATED, U NLESS THE MATERIAL FACTS OF THE CASE BEFORE SUCH AUTHORITY VIS--VIS MATERIAL FACTS OF T HE CASE SET OUT IN THE JUDICIAL PRECEDENT, CAN BE DISTINGUISHED. AS FOR THE FINDIN GS BY THE COMMISSIONER (APPEALS) ON THE PLEA OF THE BORROWED SATISFACTION, WE FIND THAT IT DOES NOT FULLY DEAL WITH THE ASPECT WHETHER OR NOT THE REASONS REC ORDED BY THE ASSESSING OFFICER REFLECT ANY APPLICATION OF MIND, AND IN ANY CASE, I T IS DIAMETRICALLY OPPOSED TO THE CONCLUSIONS ARRIVED AT BY A COORDINATE BENCH IN THE CASE OF VIJENDRA KUMAR (SUPRA) WHEREIN THE TRIBUNAL HAS, INTER ALIA, OBSER VED AS FOLLOWS: 10.1 ON CONSIDERATION OF THE FACTS AND ARGUMENTS TH EREON ALONG WITH THE LEGAL PRINCIPLES CANVASSED BEFORE US BY THE PARTIES BEFOR E THE BENCH THE UNDISPUTED FACTS WHICH REMAIN ON RECORD ARE THAT THE INFORMATION OF ITO AGRA WARD 4(1) WAS RECEIVED BY FAX BY THE CONCERNED AO ON THE VERY DAY ON WHICH HE RECORDED HIS REASONS, OBTAINED THE NECESSARY APPROVALS AND ISSUED NOTICE. IT IS ALSO AN UNDISPUTED FACT ON RECORD THAT THE REASONS RECORDED ARE VERBATIM WITH THE FAXED INFORMATION. IT IS ALSO A ITA NOS.183 & 98/AGRA/2012 18 MATTER OF RECORD THAT NONE OF THE DONOR TRUSTS IS T HE TRUST FROM WHOM THE ASSESSEE HAS RECEIVED GIFTS. IT IS ALSO A MATTER OF RECORD THAT QUA THE INFORMATION RECEIVED AND REASONS RECORDED THE GIFTS WERE ALLEGEDLY OF RS. 20 LAKHS WHEREAS THE ASSESSMENT ORDER WOULD SHOW THAT THEY ARE OF RS. 15 LAKHS. THESE ARE SOME OF THE FACTS ON THE BASIS OF WHICH IT HAS BEEN CANVASSED THAT THE REASONS RECORD ED ARE BASED ON BORROWED SATISFACTION. THE AO HAS PROCEEDED IN HASTE AND ACT ED MECHANICALLY AS ADMITTEDLY THE SPECIFIC FACTS NAMELY DONOR TRUSTS, AMOUNTS, WERE A LL WRONG. IT IS SEEN THAT ON FACTS THE DEPARTMENT HAS NOT REBUTTED THE ASSESSEES STAND. T HE DEPARTMENT HAS RELIED UPON CASE LAW TO CANVASS THAT ONCE THE REASONS ARE RECOR DED ON THE INFORMATION RECEIVED, THE ACTION OF REOPENING IS JUSTIFIED. NO DOUBT SUFFICIE NCY OF REASON CANNOT BE AGITATED HOWEVER THE FIRST HURDLE THAT THE FORMATION OF BELI EF IS OF THE CONCERNED AO AND NOT OF SOME OTHER AO HAS TO BE MET. THE BLIND ACCEPTANCE I N HASTE THE VIEW OF ANOTHER AO HAS NOT BEEN REBUTTED BY ANY COGENT FACT OR ARGUMEN T AND TO OUR MIND CASE LAW CANNOT ADDRESS THE ISSUE. A PERUSAL OF THE FINDING OF THE CIT(A) REPRODUCED IN THE EARLIER PART OF THIS ORDER WOULD SHOW THAT APPELLATE AUTHORITY H AS HELD THAT THE REASONS RECORDED IS NOTHING BUT A COPY OF INFORMATION AS RECEIVED FROM ITO-4(1), AGRA WHO WAS OF THE OPINION THAT THE TRANSACTION IS NON-GENUINE. THE CI T(A) HAS COME TO THE CONCLUSION THAT THE AO HAS PROCEEDED ON 'BORROWED SATISFACTION '. THE AO HAS BEEN HELD TO HAVE PROCEEDED IN ISSUING NOTICE ACCEPTING THE REPORT OF ITO-4(1) AS GOSPEL TRUTH WITHOUT VERIFYING THE CORRECTNESS OF THE INFORMATION RECEIV ED. THE CIT(A) HAS FURTHER TAKEN INTO CONSIDERATION THE ORDER DT. 23RD MAY, 2008 IN ITA NOS. 171 TO 175/AGRA/2006 ALONG WITH C.O. NOS. 24, 25 AND 50/AGRA/2008 SO AS TO CONCLUDE THAT THE ISSUE IS COVERED. A PERUSAL OF THE ABOVEMENTIONED ORDER DT. 23RD MAY, 2008 PLACED AT PP. 2 TO 10 OF THE PAPER BOOK SHOWS THAT THE CO-ORDINATE BEN CH CONSIDERED THE CASES OF THREE DIFFERENT ASSESSEES NAMELY VIPIN KUMAR AGGARWAL, SU NIL KUMAR AGGARWAL AND ANIL KUMAR AGGARWAL WHEREIN THE ISSUE FOR CONSIDERATION WAS THE SATISFACTION OF THE AO BASED ON INFORMATION FROM AO AGRA OF BOGUS GIFTS FO R TRUSTS CREATED BY SHRI D.K. AGARWAL ON THE BASIS OF SURVEY UNDER S. 133A CONDUC TED ON 22ND APRIL, 2001 AT THE PREMISES OF SHRI P.K. AGGARWAL. THE CO-ORDINATE BEN CH DISMISSED THE DEPARTMENTAL APPEAL WHEREIN THE ADDITION HAD BEEN DELETED ON MER IT AND CONSIDERING THE ASSESSEES CROSS-OBJECTION WHEREIN THE CIT(A) HAD UPHELD THE P ROCEEDINGS UNDER S. 147 THE CO- ORDINATE BENCH RELYING UPON CIT VS. ATUL JAIN AND V INITA JAIN (2007) 212 CTR (DEL) 42 : (2008) 299 ITR 383 (DEL) HELD THAT THE ISSUE I S COVERED BY THE PRINCIPLE SET DOWN IN THE SAID JUDGMENT INASMUCH THE AO ACCEPTED WITHOUT VERIFYING THE CORRECTNESS OF THE INFORMATION RECEIVED BY HIM IN A MECHANICAL MANNER. THE CO-ORDINATE BENCH HAS ALSO RELIED UPON INDRA PRASTHA CHEMICALS (P) LTD. & ORS. VS. CIT & ANR. (2004) 191 CTR (ALL) 125 : (2004) 271 ITR 113 (ALL). IN VIEW OF TH E PECULIAR FACTS AND CIRCUMSTANCES AS THEY STAND WE ARE OF THE CONSIDERED VIEW THAT THE D EPARTMENTAL APPEAL DOES NOT HAVE ANY MERIT. BEING SATISFIED WITH THE REASONING AND C ONCLUSION ARRIVED AT BY THE CIT(A) AND CONSIDERING THE SAME IN THE LIGHT OF THE SETTLE D LEGAL PRINCIPLE THE SAME IS UPHELD. IN THE FACTS OF THE PRESENT CASE THE ASSESSEE HAS F URTHER FORTIFIED THE FINDING ARRIVED AT IN THE IMPUGNED ORDER BY THE UNREBUTTED ARGUMENTS A DVANCED NAMELY THAT THE AO HAS MECHANICALLY PROCEEDED WITHOUT VERIFYING THE CORREC TNESS OF THE INFORMATION GIVEN AS NOT ONLY THE NAMES OF THE DONORS AS PER THE REASONS RECORDED BASED ON THE INFORMATION ITA NOS.183 & 98/AGRA/2012 19 GIVEN ARE INCORRECT BUT EVEN THE AMOUNTS QUA THE FA CTS IN THE ASSESSEES ORDER WHEN COMPARED WITH THE REASONS RECORDED ARE COMPLETELY W RONG. 10.2 BEFORE PARTING WE WOULD LIKE TO DISCUSS THE CA SE LAW RELIED UPON BY THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE WHICH HAS BEEN T AKEN INTO CONSIDERATION BY US. 10.3 ON A CAREFUL CONSIDERATION OF THE PRINCIPLES L AID DOWN BY THE COURTS IN THE FACTS BEFORE THEM IT IS SEEN THAT IN THE FACTS OF THE PRE SENT CASE THEY DO NOT STRENGTHEN THE CASE OF DEPARTMENT IN ANY MANNER. NOTWITHSTANDING T HE FACT THAT EACH CASE PROCEEDS ON FACTS ENTIRELY PECULIAR TO ITS OWN, IT IS SEEN T HAT THE PRINCIPLES LAID DOWN THEREIN CANNOT HAVE A BLANKET APPLICATION. WE CONSIDER IT A PPROPRIATE TO DISCUSS THEM SEPARATELY. IT IS SEEN THAT THE LEARNED DEPARTMENTA L REPRESENTATIVE HAS HEAVILY RELIED UPON PRAFUL CHUNILAL PATEL VS. M.J. MAKWANA, ASSTT. CIT, H.A. NANJI & CO. VS. ITO, ASSTT. CIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD . AND PHOOL CHAND BAJRANG LAL & ANR. VS. ITO (CITED SUPRA) FOR THE PROPOSITION THAT FOR THE FORMATION OF BELIEF SOME INFORMATION IS NECESSARY AND NO PRELIMINARY INQUIRY IS REQUIRED TO BE MADE AND AS LONG AS REASONS ARE RECORDED, THE SATISFACTION OF THE AO ON THE BASIS OF INFORMATION AVAILABLE WITH HIM WILL TANTAMOUNT TO FULFILLING TH E REQUIREMENTS OF LAW. 10.4 H.A. NANJI & CO. VS. ITO (CITED SUPRA) : IT IS SEEN THAT THE FACTS AVAILABLE ON RECORD WERE THAT AFTER THE DEDUCTIONS CLAIMED BY TH E ASSESSEE ON ACCOUNT OF INTEREST PAID ON HUNDI LOANS WERE ACCEPTED AS GENUINE IN THE ORIGINAL ASSESSMENTS; SUBSEQUENTLY THE ITO RECEIVED A CIRCULAR FROM THE S PECIAL INVESTIGATION DEPARTMENT. THE SAID CIRCULAR GAVE THE LIST OF BOGUS CREDITORS WHICH INCLUDED THE ALLEGED CREDITORS OF THE ASSESSEE. THE INITIATION OF REASSESSMENT PRO CEEDINGS WAS HELD TO BE A VALID ACTION. THEIR LORDSHIPS HELD THAT IT COULD NOT BE S AID THAT THE DISCOVERY OF CREDITORS OF THE ASSESSEE AS BOGUS CREDITORS WAS AN INFERENTIAL FACT BASED ON THE SAME MATERIALS WHICH THE ASSESSEE DISCLOSED AS PRIMARY FACTS. ON A READING OF THE RECORDED REASONS IT BECAME OBVIOUS THAT A COMPARISON OF THE NAMES OF TH E BOGUS CREDITORS WITH THE LIST OF THOSE SHOWN BY THE ASSESSEE WAS MADE BY THE ITO WHI CH WAS THE INVESTIGATION CONTEMPLATED BY THE CIRCULAR AND WHEN SUCH NAMES DI SCLOSED BY THE ASSESSEE WERE FOUND IN THE LIST THE ITO STRAIGHTWAY RECORDED HIS PRIMA FACIE POSITIVE BELIEF THAT INCOME HAD ESCAPED ASSESSMENT. IN THE FACTS OF THE PRESENT CASE AS HAS BEEN SUCCESSFULLY DEMONSTRATED BY THE ASSESSEE THAT THE NAMES OF THE DONOR TRUSTS IN THE INFORMATION FOUND HAS BEEN VERBATIM RECORDED IN THE REASONS AND THE ASSESSEE HAS NEVER RECEIVED GIFTS FROM THOSE DONOR TRUSTS. MOREO VER AS PER THE REASONS RECORDED THE ASSESSEE WAS SUPPOSED TO HAVE RECEIVED GIFTS BY WAY OF SPECIFIC CHEQUES AND DDS AMOUNTING TO RS. 20 LACS AND ON A PERUSAL OF THE AS SESSMENT ORDER P. 3 IT IS SEEN THAT THE GIFTS WERE RECEIVED OF RS. 15 LACS. IN THIS BAC KGROUND THE ARGUMENT OF THE ASSESSEE RELYING UPON THE ORDER OF THE CO-ORDINATE BENCH AT AGRA THAT AO HAS PROCEEDED ON 'BORROWED SATISFACTION' AS NO EFFORT WAS MADE WHATS OEVER TO AT LEAST CROSS-CHECK THE NAMES OF THE DONORS AND THE AMOUNT OF GIFTS RECEIVE D BY THE ASSESSEE. THE FACT THAT THESE WERE BOGUS GIFTS OR GENUINE GIFTS WOULD BE AN INFERENCE WHICH COULD BE DRAWN ONLY AFTER THE BASIC FACT THAT THE DONOR TRUSTS WER E SAME AND THE AMOUNT CONSIDERED TO ITA NOS.183 & 98/AGRA/2012 20 HAVE BEEN RECEIVED BY THE ASSESSEE AS PER REASONS R ECORDED AND ASSESSMENT ORDER WERE SAME. THE BLIND BELIEF WHICH THE AO PLACED ON THE C ORRECTNESS OF THE INFORMATION RECEIVED IS APPARENT. HAD HE MADE SOME EFFORTS TO C ROSS-CHECK THE CORRECTNESS OF THE INFORMATION THEN HE WOULD HAVE SEEN THAT NOT ONLY D ONOR TRUSTS WERE DIFFERENT BUT THE AMOUNTS WERE DIFFERENT. 10.5 IT IS SEEN THAT NONE OF THE DECISIONS RELIED U PON BY THE DEPARTMENT LAYS DOWN THE PROPOSITION THAT INFORMATION RECEIVED FROM ANOTHER AO EVEN IF INCORRECT SHOULD BE BLINDLY ACCEPTED AND ASSESSEE SHOULD BE SUBJECTED T O REOPENING OF THE PROCEEDINGS. THE AO EXERCISING THE POWERS VESTED IN HIM BY THE STATU TE IS NECESSARILY PRESUMED TO ACT IN AN UNBIASED MANNER ON THE RECEIPT OF INFORMATION IN ORDER TO FORM A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. THE HASTE IN WHICH RIGHT FR OM THE RECEIPT OF THE INFORMATION TO THE ISSUANCE OF NOTICE LEADS US TO AGREE WITH THE C ONCLUSION OF THE CIT(A) THAT THE AO HAS ACTED ON BORROWED SATISFACTION. THE FACT THAT T HE ENTIRE EXERCISE HAS BEEN COMPLETED WITHIN THE DAY SHOWS THAT THE POWER VESTE D IN THE AO HAS BEEN MECHANICALLY EXERCISED. IN THE FACTS OF THE PRESENT CASE WE FIND OURSELVES IN AGREEMENT WITH THE FINDING OF THE CIT(A) INASMUCH AS THAT THE CONCERNE D AO HAS PROCEEDED ON BORROWED SATISFACTION IN A MECHANICAL MANNER AND NOT EVEN CA RING TO MAKE A BARE MINIMUM EFFORT TO CROSS-CHECK THE VERACITY OF THE INFORMATI ON RECEIVED. AS SUCH THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE FACTS OF THE PRESENT CASE DOES NOT HELP THE DEPARTMENT IN ANY MANNER. 10.6 RELIANCE HAS ALSO BEEN PLACED UPON BY THE LEAR NED SENIOR DEPARTMENTAL REPRESENTATIVE ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF PHOOL CHAND BAJRANG LAL & ANR. VS. ITO (CITED SUPRA). A PERUSAL OF THE FACTS AS HAVE BEEN TAKEN INTO CONSIDERATION BY THE HONBLE APEX COURT WOULD SHOW THAT IN THE FACTS OF THAT CASE THE ASSESSEE CLAIMED THAT CASH LOAN HAD BEEN TAKEN FROM A SPECIFIC CALCUTTA COMPANY WHICH HAD BEEN ACCEPTED AS GENUINE BY THE AO. SUBSE QUENTLY INFORMATION FROM THE AO OF THE COMPANY AT CALCUTTA CAME INTO THE POSSESS ION OF THE CONCERNED AO ACCORDING TO WHICH THE MANAGING DIRECTOR OF THE CAL CUTTA COMPANY HAD CONFESSED THAT THE COMPANY HAD NOT ADVANCED ANY LOAN TO ANY PERSON DURING THE PERIOD COVERING THE DATE OF CASH LOAN. SINCE THE SUBSEQUENT INFORMATION WAS DEFINITE, SPECIFIC AND RELIABLE NOTICE FOR REASSESSMENT WAS HELD TO BE VALID. THE A RGUMENT THAT IT WAS A MERE CHANGE OF OPINION WAS NOT ACCEPTED. WHEN CONTRASTED WITH T HE FACTS OF THE PRESENT CASE THE RECORD WOULD SHOW THAT THE INFORMATION OF THE DIFFE RENT AO WAS SUFFERING FROM INACCURACIES AND WRONG FACTS WHICH HAVE BEEN BLINDL Y ACCEPTED BY THE CONCERNED AO. AS OBSERVED NOT ONLY THE BASIC NAMES OF THE DONORS ARE ENTIRELY DIFFERENT EVEN THE AMOUNTS RECEIVED AS GIFTS ARE DIFFERENT. THE FACT T HAT THE ENTIRE EXERCISE FROM RECEIVING THE INFORMATION ON ISSUANCE OF NOTICE IS COMPLETED IN A DAY SUPPORTS THE STAND OF THE CIT(A) THAT THE AO HAS PROCEEDED ON BORROWED SATISF ACTION IN HASTE AND MECHANICALLY AND THE PRESENT CASE CANNOT BE GUIDED BY THE PRINCI PLE LAID DOWN BY THE APEX COURT WHEREIN IN THE ORIGINAL ASSESSMENT THE CLAIM HAD BEEN ALLOWED WHICH WAS SOUGHT TO BE SET ASIDE ON THE BASIS OF SPECIFIC, DEFINITE AND RELIABLE INFORM ATION. IN THE FACTS OF PHOOL CHAND ITA NOS.183 & 98/AGRA/2012 21 (SUPRA) IT IS SEEN THAT THE CONCERNED AO HAD FORMED HIS INDEPENDENT BELIEF THAT INCOME HAD ESCAPED ASSESSMENT. THE CONCERNED AO HAVING ENTERTAINED THE DOUBTS ABOU T GENUINENESS OF LOAN TRANSACTIONS ADDRESSED A LETTER TO THE ITO, CALCUTT A ON 19TH MAY, 1970 INQUIRING IF THE CALCUTTA COMPANY WAS WITHIN ITS JURISDICTION AND TO GATHER CERTAIN INFORMATION FROM THE CASE RECORDS OF A SPECIFIC COMPANY. THE ITO CAL CUTTA REPLIED ON 7TH JULY, 1970 STATING THAT THE CONCERNED MD HAS CONFIRMED THAT TH E SO-CALLED COMPANY IS A DUMMY CONCERN AND THE POSITION HAD BEEN ACCEPTED BY THE S AID COMPANY IN THE ASSESSMENT OF THE COMPANY OVER 1962-63, 1963-64 AND 1964-65. IT W AS INFORMED THAT TRANSACTIONS WITH THIS CONCERN WERE NOT GENUINE AND THE CONCERNE D ITO STATED THAT HE COULD FURNISH FURTHER INFORMATION OF ANY TRANSACTION IF IT WAS SO REQUIRED. ON THE RECEIPT OF THIS COMMUNICATION NOTICE WAS ISSUED TO THE ASSESSEE ON 26TH AUG., 1971. IT IS SEEN THAT THERE WAS SUFFICIENT MATERIAL BEFORE THE AO FOR THE FORMATION OF HIS BELIEF AND HE HAD NOT PROCEEDED IN UNDUE HASTE ACCEPTING AS GOSPEL TR UTH THE INFORMATION FROM ANOTHER AO. THE CONCERNED AO HAS ACTED AND PROCEEDED DILIGE NTLY AND NOT FORMED AN OPINION IN UNDUE HASTE, WHEREAS IN THE FACTS OF THE PRESENT CASE THE INFORMATION RECEIVED BY FAX HAS BEEN FOUND TO BE INACCURATE AND WRONG AS IT CON TAINED WRONG NAMES OF THE DONORS MENTIONING WRONG AMOUNTS OF THE GIFTS WERE STATED T O BE GIVEN. HAD THE CONCERNED AO APPLIED HIS MIND THE GLARING MISTAKES WOULD HAVE BE EN NOTICED. HAVING PROCEEDED MECHANICALLY ON BORROWED SATISFACTION THE ACTIONS C ANNOT BE UPHELD. AS SUCH THE PRINCIPLE LAID DOWN THEREIN ON FACTS IS NOT OF MUCH HELP TO THE REVENUE AS THERE THE TIME TAKEN ATTENTION TO DETAIL AND THE EFFORTS TO C ROSS-CHECK THE VERACITY CANNOT BE COMPARED TO THE HASTY EXERCISE IN THE PRESENT PROCE EDINGS. 10.7 SIMILARLY IN JUDGMENT OF THE GUJARAT HIGH COUR T IN THE CASE OF PRAFUL CHUNILAL PATEL VS. M.J. MAKWANA, ASSTT. CIT (CITED SUPRA) IT IS SEEN THAT THEREIN THE CONVERSION OF CAPITAL ASSET INTO STOCK-IN-TRADE AND TRANSFER T HEREOF BY PARTNER TO FIRM IN THE EARLIER YEARS LED THE AO TO FORM THE BELIEF THAT INCOME CHA RGEABLE TO TAX IN THE FORM OF CAPITAL GAINS IN RESPECT OF THE TRANSFER WHICH TOOK PLACE I N THE EARLIER YEAR HAD ESCAPED ASSESSMENT AND THE INITIATION OF PROCEEDINGS UNDER S. 147 WAS HELD TO BE VALIDLY INITIATED. IN THE FACTS OF THE CASE THE PRINCIPLE I S OF NO HELP TO THE REVENUE AS HEREIN THE ENTIRE ACTION HAS BEEN BASED ON FAXED RECEIPT OF IN FORMATION OF A DIFFERENT AO WHOSE VERACITY HAS BEEN BLINDLY AND MECHANICALLY ACCEPTED AS CORRECT AND TRUE CONTRARY TO WHAT THE RECORD SHOWS. THE ENTIRE EXERCISE HAVING B EEN COMPLETED IN A SINGLE DAY LEADS US TO THE CONCLUSION THAT THE IMPUGNED ORDER RELYIN G UPON THE ORDER OF THE CO-ORDINATE BENCH IN THE FACTS AS THEY STAND HAS TO BE UPHELD. IN THIS BACKGROUND NOTHING HAS BEEN PLACED BY THE DEPARTMENT TO CANVASS A CONTRARY VIEW EXCEPT RELYING ON THE PRINCIPLES LAID DOWN IN DIFFERENT JUDGMENTS WHICH PROCEED ON F ACTS PECULIAR TO THEIR OWN. IN THE FACTS OF THE GUJARAT HIGH COURT IN THE CASE OF PRAF UL CHUNILAL PATEL VS. M.J. MAKWANA, ASSTT. CIT (SUPRA) IT IS SEEN THAT THE AO WHILE MAKING THE ASSESSMENT FOR THE ASST. YR. 1993-94 RECORDED HIS REASONS IN WRITI NG HOLDING THAT INCOME IN 1991-92 ASSESSMENT YEAR HAD ESCAPED ASSESSMENT, BY VIRTUE O F THE FACT THAT INCOME CHARGEABLE TO TAX IN THE FORM OF CAPITAL GAINS IN RESPECT OF T RANSFER WAS NOT TAKEN INTO ITA NOS.183 & 98/AGRA/2012 22 CONSIDERATION. IN VIEW OF THE FACT THAT THE PROPERT Y WAS CONVERTED FROM CAPITAL ASSETS TO STOCK-IN-TRADE AND SUBSEQUENTLY THE PROPERTY WAS SO LD TO THE FIRM AND THE CAPITAL GAIN ARISING FROM THE TRANSFER TO THE PARTNERSHIP FIRM H AD NOT BEEN SUBJECTED TO TAX. AS SUCH IN THAT BACKGROUND THEIR LORDSHIPS OF THE HIGH COUR T HAD AN OCCASION TO FORM THE VIEW THAT THE CONCERNED ITO HAD REASONS TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT. AS SUCH THE VIEW FORMED IN THE FACTS OF THAT CASE WAS OF THE CONCERNED AO, WHEREAS IN THE PRESENT PROCEEDINGS IT HAS BEEN EFFECTIVELY DEMONST RATED BY THE CIT(A) IN THE IMPUGNED ORDER THAT THE AO PROCEEDED ON BORROWED SA TISFACTION. 10.8 RELIANCE HAS ALSO BEEN PLACED ON ASSTT. CIT VS . RAJESH JHAVERI STOCK BROKERS (P) LTD. (SUPRA) WHEREIN IT WAS CANVASSED THAT IT WAS A CHANGE OF OPINION. IN VIEW OF THE FACT THAT INTIMATION UNDER S. 143(1)(A) WAS CONSIDE RED TO BE NOT AN ASSESSMENT AND WAS DEEMED TO BE A NOTICE OF DEMAND UNDER S. 156, THEIR LORDSHIPS HELD THAT THERE BEING NO ASSESSMENT QUESTION OF CHANGE OF OPINION DOES NOT A RISE. AS SUCH THE PRINCIPLE LAID DOWN THEREIN DOES NOT ADVANCE THE CASE OF THE REVEN UE. IN THE PRESENT CASE THE IMPUGNED ORDER HAS QUASHED THE REASSESSMENT NOT ON THE GROUND OF CHANGE OF OPINION BUT ON THE GROUND THAT THE CONCERNED AO HAS PROCEED ED ON BORROWED SATISFACTION, NON- APPLICATION OF MIND AND POWER OF REOPENING EXERCISE EXERCISING MECHANICALLY AMONGST OTHERS. 10.9 THE FACT THAT NOTICE WAS NOT SERVED ON THE COR RECT PERSON AND THE FACT THAT NOTICE BY POST WAS NOT SENT TO THE CORRECT ADDRESS ALSO RE MAIN UNREBUTTED ON RECORD. FATUOUS ARGUMENT ADVANCED BY THE SENIOR DEPARTMENTAL REPRES ENTATIVE THAT AT THE ADDRESS AS PER RETURN THE ONLY LIKELY OCCUPANTS WOULD BE COWS AND BUFFALOES AS SUCH IS OF (SIC NO) HELP TO THE DEPARTMENT AS IT MERELY ADDRESSES T HE FACT THAT NO ATTEMPT WAS MADE TO SERVE NOTICE TO THE ADDRESS AVAILABLE ON THE RETURN . SIMILARLY THE ARGUMENT THAT NOTICE WOULD HAVE BEEN RECEIVED DESPITE A WRONG ADDRESS IN A SMALL PLACE LIKE BULANDSHAHAR ALSO DOES NOT INSPIRE ANY CONFIDENCE AND IT DEFINIT ELY CANNOT BE SAID TO BE A REBUTTAL OF THE CONSISTENT UNREBUTTED STAND OF THE ASSESSEE THA T THE NOTICE WAS NEVER SERVED UPON THE ASSESSEE. IN REGARD TO SERVICE OF NOTICE ON SOM E MINAKSHI AGARWAL AGAIN IN THE FACE OF CONSISTENT STAND OF THE ASSESSEE RIGHT FROM THE STAGE OF AO THAT HE HAS NOT RECEIVED THE NOTICE AND SHE WAS NOT THE AUTHORIZED PERSON OF THE ASSESSEE A REBUTTAL BY THE DEPARTMENT ON RECORD IS NOT AVAILABLE. THE CASE LAW RELIED UPON THE ASSESSEE ON THE ISSUE NAMELY CIT VS. RAJESH KUMAR SHARMA (SUPRA) AN D CIT VS. LAXMI NARAIN (SUPRA) FURTHER FORTIFY THE ACTION OF THE CIT(A) THOUGH ON A DIFFERENT GROUND. 9. IN THE LIGHT OF THE ABOVE DISCUSSIONS, WE DEEM I T FIT AND PROPER TO REMIT THE MATTER TO THE FILE OF THE LEARNED COMMISSIONER (APP EALS) FOR FRESH ADJUDICATION ON THE VALIDITY OF REOPENING OF ASSESSMENT, INTER ALIA , IN THE LIGHT OF THE SPECIFIC PLEA ITA NOS.183 & 98/AGRA/2012 23 THAT THE ASSESSING OFFICER DID NOT USE HIS OWN REAS ONING AND PROCEEDED ONLY ON THE BASIS OF BORROWED SATISFACTION BY WAY OF INPUTS R ECEIVED BY HIM. WHILE SO ADJUDICATING THE MATTER AFRESH, LEARNED COMMISSIONE R (APPEALS) WILL TAKE INTO ACCOUNT ALL THE BINDING JUDICIAL PRECEDENTS, INCLUD ING THE ONES CITED ABOVE BY THE LEARNED REPRESENTATIVES BEFORE US, AND DECIDE THE M ATTER AFTER GIVING YET ANOTHER OPPORTUNITY OF HEARING TO THE ASSESSEE AND BY WAY O F A SPEAKING ORDER. LEARNED COMMISSIONER (APPEALS) WILL ALSO FIND OUT WHETHER O R NOT THERE ARE ANY FURTHER JUDICIAL DEVELOPMENTS WITH REGARD TO OTHER CASES AR ISING OUT OF THE IDENTICAL FACTS, SUCH AS THE CASES BEFORE THE COORDINATE BENCHES DIS CUSSED ABOVE, AND IF MATTER HAS ACHIEVED FINALITY, IN SUCH CASES, ONE WAY OR THE OTHER, APPLY THE SAME LEGAL POSITION HERE AS WELL. IN VIEW OF THE FACT THAT THE SE ARE OLD MATTERS, AND WITH A VIEW THAT THE SWORD OF UNCERTAINTY SHOULD NOT BE ALLOWED TO HANG OVER THE APPELLANTS FOR LONG, WE FURTHER DIRECT THE LEARNED COMMISSIONER (A PPEALS) TO DISPOSE OF THE MATTER WITHIN SIX MONTHS FROM THE DATE OF RECEIPT O F THIS ORDER. AS THE VERY FUNDAMENTAL ISSUE REGARDING THE REOPENING OF ASSESS MENT HAS BEEN REMITTED TO THE FILE OF THE LEARNED COMMISSIONER (APPEALS), WE SEE NO NEED NO DEAL WITH OTHER ASPECTS OF THE MATTER AT THIS STAGE. ITA NOS.183 & 98/AGRA/2012 24 10. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES IN THE TERMS INDICATED ABOVE. 11. ALL THE LEARNED REPRESENTATIVES BEFORE US, AS A LSO THE LEARNED DEPARTMENTAL REPRESENTATIVE, HAVE AGREED THAT WHATEVER IS DECIDE D IN THE CASE OF SEEMA GUPTA (ABOVE) WILL APPLY MUTATIS MUTANDIS IN ALL OTHER CA SES, IN THIS BUNCH OF APPEALS, AS WELL. IN THIS VIEW OF THE MATTER, ALL THE APPEALS A RE ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT TODAY ON 6 TH DAY OF JUNE, 2014. SD/- SD/- (JOGINDER SINGH) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOU NTANT MEMBER AMIT/ COPY OF THE ORDER FORWARDED TO:- 1. APPELLANTS 2. RESPONDENTS 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY