Devi Saran Agarwal, Kanpur V. ITO 3 (1), Kanpur

ITA 316/LKW/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70538 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 06-06-2013
• Assessment Year: misc
• Appeal Filed On: 30-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Gift; Period of limitation; Revised return; Reason to believe; Reassessment proceedings
• Section: 143(3); 139(5); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO.316/LKW/2011 ASSESSMENT YEAR:2002-03 DEVI SINGH AGARWAL 54/1, NAYAGANJ KAN P UR V. ITO 3(1) KANPUR PAN:ABNPA5170F ( A PP ELLANT ) ( RES P ONDENT ) APPELLANT BY: SHRI. RAKESH GARG, ADVOCATE RES P ONDENT B Y :SHRI. ALOK MITRA, D.R. DATE OF HEARING: 06.06.2013 DATE OF PRONOU NCEMENT: 07.08.2013 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY TH E ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON VARIOUS GROUNDS, WHICH ARE AS UNDER:- 1. BECAUSE THE REASSESSMENT FRAMED U/S 147/143(3) OF THE INCOME- TAX ACT, 1961 AND UPHELD BY THE CIT( APPEALS) IS CONTRARY TO FACTS, BAD IN LAW, VOID AB INITIO, WITH OUT JURISDICTION AND BE QUASHED. 2. BECAUSE THERE BEING NO ESCAPEME NT OF INCOME, NOR THERE BEING ANY REASONS JUSTIFYING THE INITIATION OF RE-ASSESSMENT PROCEEDINGS, THE REASSESSMENT FRAMED U/S 147/143(3) OF THE ACT IS CONTRARY TO FACTS, BAD IN LAW AND BE QUASHED. :-2-: 3. BECAUSE THE CIT(APPEALS) HAS FAILE D TO APPRECIATE THE FACT THAT THE ORIGINAL RETURN WAS FILED ON 25.07.2002 WHICH WAS IN TIME AND THE SUBSEQUENT RETURN WAS FILED ON 9.04.2003 WHICH WAS PROCESSED U/S 143(1), THERE WAS NO OCCASION FOR THE ASSESSING OFFICER TO ISSUE NOTICE U/S 148 OF THE ACT. THE VERY NOTICE ISSUED IS WITHOUT JURISDICTION, BAD IN LAW AND BE QUASHED. 4. BECAUSE THE CIT(APPEALS) HAS E RRED ON FACTS AND IN LAW IN UPHOLDING THE VALIDITY OF REASSESSMEN T, WHICH ORDER IS CONTRARY TO FACTS, BAD IN LAW, VOID AB INITIO, WITHOUT JURISDICTION AND BE QUASHED. 5. BECAUSE THE CIT(APPEALS) HAS E RRED ON FACTS AND IN LAW IN ARBITRARILY HOLDING THE SUM OF RS .1,00,000/- RECEIVED FROM SMT. SUSHILA DEVI MANARIKA AS UNPROVED GIFT, WHICH STANDS DULY EXPLAINED. 6. BECAUSE THE CIT (APPEALS) HAS E RRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITION OF RS.5,000/- BEING ALLEGED COMMISSION/EXPENDITURE INCURRED FO R PROCURING THE GIFT FROM SMT. SUSHILA DEVI MANARIKA. 7. BECAUSE THE CIT(APPEALS) HAS FAILE D TO APPRECIATE THE FACTS AND CIRCUMSTANCES OF THE CASE, AND TH E EXPLANATION FURNISHED BY THE ASSESSEE AND HAS ARBITRARILY HE LD THAT RS.1,00,000/- IS THE UNDISCLOSED INCOME OF THE ASSESSEE. 2. THROUGH GROUNDS NO.1 TO 4, THE ASSESSEE HAS CHALLENGED THE REOPENING OF ASSESSMENT UNDER SECT ION 147 OF THE INCO ME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') WITH THE SUBMISSION THAT PROCESSING OF RETURN UNDER SECTION 143(1)(A) OF TH E ACT CANNOT BE CONSIDERED AS :-3-: COMPLETION OF ASSESSMENT AND THE REVI SED RETURN EVEN FILED ON 9.4.2003 AFTER PROCESSING OF RETURN UNDE R SECTION 143(1)(A) ON 26.12.2002 WAS A VALID RETURN AS PER PROVISIONS OF SECTIO N 139(5) OF THE ACT. THE REOPENING IS ALSO CHALLENGED ON THE GROUND THAT NOTICE UNDER SECTION 148 OF THE ACT CANNOT BE ISSUED WHEN THER E IS TIME TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT. 3. THE CONTENTIONS OF TH E ASSESSEE WERE NOT ACCEPTED BY THE LOWER AUTHORITIES. THE LD. CIT(A) WHILE APPROVING THE RE-ASSESSMENT HAS HELD THAT THE ASSESSING OFFICE R HAS RECEIVED INFORMATIO N FROM THE INVESTIGATION WING THAT THE ASSESSEE HA S RECEIVED BOGUS GIFT OF ` 1 LAKH WHICH IN FACT WAS HIS OWN INCOME AND BASED ON THIS INFORMATION THE ASSESSING OFFICER FORMED A BELIEF THAT THE APPELLANTS INCOME HAS ESCAPED ASSESSMENT. WHILE UPHOLDING THE VALIDITY OF REOPENING OF ASSESSMENT, THE LD. CIT(A) HAS OBSERVED THAT THE ASSESSI NG OFFICER CAN ISSUE NOTI CE UNDER SECTION 148 OF THE ACT EVEN THERE IS TI ME TO ISSUE NOTICE UNDER SE CTION 143(2) OF THE ACT HAVING PLACED RELIANCE UPON THE JUDGM ENTS OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PU NJAB TRACTORS LTD. VS. DCIT, 254 ITR 242 AND THE HON'BLE MADRAS HIGH COURT IN THE CASE OF SH. KRISHNA MAHAL VS. ACIT, 250 ITR 333. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 26.12.2002. SUBSEQ UENTLY ASSESSEE FILED ANOTHER RETURN ON 9. 4.2003 DECLARING INCOME OF ` 2,46,280 WHICH WAS PROCESSED UNDER SECTION 143(1) OF TH E ACT ON 18.8.2003. THE ASSESSMENT WAS REOPENED BY ISSUING NOTICE UNDE R SECTION 148 OF THE ACT ON 11.8.2004 ALTHOUGH THERE WAS TIME AVAILABLE WITH THE ASSESSING OFFICER TO FRAME A REGULAR ASSESSMENT UNDER SECT ION 143(3) OF THE ACT BY ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT. THEREFORE, THE RE OPENING OF ASSESSMENT IS ILLEGAL AND DESERVES TO BE QUASHED. :-4-: 5. THE LD. D.R., BESIDES PLACING RELI ANCE UPON THE ORDER OF THE LD. CIT(A), HAS CONTENDED THAT THERE IS NO PROVISION UNDER THE ACT WHICH DEBARS THE ASSESSING OFFICER FROM REOPENING AN ASSESSMENT DURING THE PERIOD WHERE NOTICE UNDER SECTION 143( 2) OF THE ACT CAN BE ISSUED FOR FRAMING A REGULAR ASSESSMENT UNDER SECTIO N 143(3) OF THE ACT. IT IS THE CHOICE OF THE ASSESSING OFFICER WHETHE R HE INVOKES THE PROVISIONS TO FRAME ASSESSMENT UNDER SECTION 143(3) OF THE AC T OR UNDER SECTION 147 OF THE ACT. BUT MERELY FOR THE REASON THAT NO TICE UNDER SECTION 148 OF THE ACT WAS ISSUED BEFORE EXPIRY OF THE PERIOD FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT, THE ASSESSMENT RE OPENED BY THE ASSESSING OFFICER UNDER SECTION 147 OF THE ACT CANNOT BE HELD TO BE INVALID OR ILLEGAL. IN SUPPORT OF HIS CONTENTION, THE LD. D. R. INVITED OUR ATTENTION TO THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT AND ANOT HER VS. SHRI. JORA SINGH, PROP. M/S KHAIRA FILLING STATION IN INCOME TAX APPEAL NO.418 OF 2010, IN WHICH THE JURISDICTIONAL HIGH COUR T HAS EXAMINED VARIOUS JUDICIAL PRONOUNCEMENTS OF THE HON'BLE APEX COURT WHILE HOLDING THAT THE POWER THAT CAN BE EXERCISED UNDER SECTION 143(2) OF THE ACT TO CORRECT AN ASSESSMENT MADE UNDER SECTION 143(1) OF THE ACT DOES NOT EXCLUDE THE POWER OF THE ASSESSING OFFICER TO RE OPEN THE ASSESSMENT UNDER SECTION 147 OF THE ACT IF THE INGREDIENTS OF 147 OF THE ACT ARE SATISFIED. THEREFORE, THE ASSESSMENT CANNOT BE HELD TO BE ILLEGAL AND INVALID ONLY FOR THE REASON THAT NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED DURING THE PERIOD FOR ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT. 6. HAVING GIVEN A THOUGHTFUL CONSIDER ATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF RECORD, WE FIND THAT THE ORIGINAL RETURN WAS FILED BY THE ASSESSEE DECLARING INCOME AT ` 1,46,280 WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 26.12.2002. SUBSEQUENTLY THE ASSESSEE FILED REVISED RETURN ON 9. 4.2003 DECLARING INCOME AT ` 2,46,280 (SURRENDERING AN INCOME OF ` 1 LAKH) WHICH WAS PROCESSED UNDER SECTION :-5-: 143(1) OF THE ACT ON 18. 8.2003. THE A SSESSMENT WAS REOP ENED BY THE ASSESSING OFFICER ON RECEIPT OF INFORMATION WITH REGARD TO THE BOGUS GIFT RECEIVED BY THE ASSESSEE AFTER FORMI NG A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT AND ISSUED A NOTICE UNDER SECTION 148 OF THE ACT ON 11.8.2004 WHICH WAS DULY SERVED UPON THE ASSESSEE ON 20.8.2004. 7. NOW THE MOOT QUESTION RAISED BEFO RE US IS WHETHER THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT, WITHIN THE PERIOD FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT, IS VALID AND THE RE ASSESSMENT FRAMED CONSEQUENT THERETO IS SUSTAINABLE IN THE EYES OF LAW? THIS ISSUE WAS EXAMINED BY THE JURISDIC TIONAL HIGH COURT IN THE CASE OF CIT AND ANOTHER VS. SHRI. JORA SINGH, PROP. M/S KHAIRA FILLING STATION (SUPRA), IN WHICH THEIR LORDSHIPS HAVE HELD THAT THE POWER THAT CAN BE EXERCISED UNDER SECTION 143(2) OF THE ACT TO CORRECT THE ASSE SSMENT MADE UNDER SECTION 143(1) OF THE ACT DOES NOT EXCLUDE THE POWER OF THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT UNDER SECTION 147 OF THE ACT IF THE INGREDIENTS OF SECTION 147 OF THE ACT ARE SATISFIED. IT IS OPEN TO THE ASSESSING OFFICER TO INVOKE THE JURISDICTION UNDER SECTION 147 OF THE AC T NOTWITHSTANDING THE FACT THAT THERE ARE OTHER REMEDIES OPEN TO HIM UNDER THE ACT. IT CANNOT, THEREFORE, BE ACCEPTED THAT THE REASSESSMENT UNDER SECTION 147 OF THE ACT IS VITIATED BECAUSE THE ASSESSING OFFICER FAILED TO CORRECT THE ASSESSMENT ALREADY COMPLETED UNDER SECTION 143(1) OF THE ACT BY ISSUING NO TICE UNDER SECTION 143(2) OF THE ACT. THE RELEVANT OBSE RVATIONS OF THE JURISDICTIONAL HIGH COURT ARE EXTRACTED HEREUNDER:- IN VIEW OF THE ABOVE STATUTORY PR OVISIONS, THE ARGUMENT THAT NO ASSESSMENT ORDER WAS FRAMED, NO RE-ASSESSMENT PROCEEDING CAN BE INITIATED IS NOT VALID PROVIDED THE OTHER CONDITIONS OF CLAUSE (B) TO EXPLANATION-2 ARE SPECIFIED. IN ANY VIEW OF THE MATTER, SO FAR AS THE ALLAHABAD HIGH COURT IS CONCERNED, THE CONTROVERSY STANDS :-6-: CONCLUDED BY THE DECISI ON OF THIS COURT IN THE CASE OF PRADEEP KUMAR HAR SARAN LAL (SUPRA). THE A LLAHABAD HIGH COURT HAS FOLLOWED THE JUDGMENT OF THE CALCUTTA HI GH COURT AND IT EXTRACTED THE RELEVANT PORTION FROM THE JUDGMENT OF THE CALCUTTA HIGH COURT IN JORAWAR SINGH BAID VERSUS CIT (ASST.) [1992] ITR 47 (CAL). THE EXTRACTED PORTION IS REPRODUCED BELOW :- 'SIMPLY BECAUSE THE RETURN OF THE ASSESSEE HAS BEEN ACCEPTED WITHOUT SCRUTINY AND IN GOOD FA ITH THE ASSESSING OFFICER IS NOT PRECLUDED FROM INITIATING A PROC EEDING SATISFYING THE CONDITIONS THEREFOR WHERE THE INCOME HAS ESCAPED ASSESSMENT. THERE IS NOTHING EITHER IN SECTION 143 OR IN SECTION 147 THAT CAN SUPPORT SUCH A VIEW. THE PROVISIONS OF A TAX ST ATUTE SHOULD BE INTERPRETED IN A MANNER LEADING TO THE RESULT THAT EV ERYBODY PAYS HIS DUE TAX. ... IN OUR VIEW, A RETURN AFTER ITS A CCEPTANCE, WHETHER IN A SUMMARY MANNER OR AFTER SCRUTINY, MAY ITSELF LEAD TO REASSESSMENT PROCEEDINGS PROVIDED THE CONDITIO NS FOR REASSESSMEN T UNDER SECTION 147 EXIST. IT IS NOT THE SUMMARY ACCEPTANCE OF THE RETURN UNDER SECTION 143(1) THAT CAN OPERATE AS A BAR AGAINST REASSESSMENT. IT IS, RATHER, THE FURTHER DISCLO SURE MADE BY THE ASSESS EE IN THE COURSE OF PROCEEDINGS UNDER SECTION 143(3) WHEREBY THE ASSESSEE MAY TAKE OUT HIS CASE FROM THE MISCHIEF OF SECTION 147. THEREFORE, THE SCOPE FOR INITIATING REASSESSMENT PROCEED INGS IN AN ASSESSMENT MADE UNDER SECTION 143(1)(A) IS FAR WIDE R THAN IN AN ASSESSMENT UNDER SECTION 143(2) READ WITH SECTION 143(3). IN OUR VIEW, THE POWER THAT CAN BE EXERCISED UNDE R SECTION 143(2) TO CO RRECT THE ASSESSMENT MADE UNDER SECTION 143(1) DOES NOT EXCLUDE THE POWER OF THE ASSESSING OFFICER TO REOPEN THE A SSESSMENT UNDER SECTION 147 IF THE INGREDIENTS OF SECTION 147 ARE SATISFIE D. IT IS OPEN TO THE ASSESSING OFFICER TO INVOKE THE JURISDICTION UNDER SECTION 147, NOTWITHSTANDING THE FACT THAT THERE ARE OTHER REMEDIES OPEN TO HIM UNDER THE ACT. IT :-7-: CANNOT, THEREFORE, BE ACCEPTED THAT THE REASSESSMENT UNDER SECTION 147 IS VITIATED BECAUSE THE ASSESSI NG OFFICER FAILED TO INVOKE HIS POWER TO CORRECT THE ASSESSMENT ALREADY COMPLETED UNDER SECTION 143(1) BY ISSUING A NOTICE UNDE R SECTION 143(2) OF THE ACT.' THEREAFTER, IT HAS BEEN HELD BY THIS COURT AS FOLLOWS: 'WE AGREE WITH THE ABOVE REASONING OF THE CALCUTTA HIGH COURT, IN SO FAR AS IT HAS BEEN HELD THAT SO LONG AS THE INGREDIENTS OF SECTION 147 ARE FULFILLED, THE ASSE SSING OFFICER IS FREE TO INITIATE REASSESSMENT PROCEEDINGS AND FAILURE TO TAKE STEPS UNDER SECTION 143(2) WILL NOT RENDER THE ASSESSING OFFICER POWERL ESS TO INITIATE THE REASSESSMENT PROCEEDINGS.' WHILE PREP ARING THE JUDGMENT, WE COULD LAY OUR HANDS ON A DIRECT DECISION OF THE APEX COURT IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME- TAX VERSUS RAJESH JHAVERI STOCK BROKERS P. LTD., (2007) 291 ITR 500 (SC). IN THIS CASE, THE APEX COURT HAS NOTICED THE UNAMENDED SECTION 143 AND AS IT WAS AMENDED W.E.F. APRIL, 1989. IT CONSID ERED THE RELEVANT PROV ISIONS RELATING TO RE- ASSESSMENT PROCEEDING AS IT IS EXISTED PRIOR TO APRIL, 1ST 1989 AND THEREAFTER, IT HAS BEEN LAID DOWN TH AT THE SCOPE AND EFFECT OF SECTION 147 AS SUBSTITUTED WITH EFFECT FROM APRIL 1, 1989, AS ALSO SECTIONS 148 TO 152 ARE SUBSTANTIA LLY DIFFERENT FROM THE PROVISIONS AS THEY STOOD PRIOR TO SUCH SUBS TITUTION. THE RELEVANT PO RTIONS FROM THE SAID JUDGMENT IS EXTRACTED BELOW: '17. THE SCOPE AND EFFECT OF SECTIO N 147 AS SUBSTITUTED WITH EFFECT FROM APRIL 1, 1989, AS ALSO SECTIONS 148 TO 152 ARE SUBSTANTIALLY DIFFERENT FROM THE PROVISIONS AS THEY STOOD PRIOR TO SUCH SUBSTITUTION. UNDER THE OLD PROVISIONS OF SECTION 147, SEPARA TE CLAUSES (A) AND (B) LAID DOWN THE CIRCUMSTANCES UNDER WHICH INCOME ESCAPING ASSESSMENT FOR THE PAST ASSESSM ENT YEARS COULD BE ASSESSED OR REASSESSED. TO CONFER JURISD ICTION UNDER SECTION 147(A) TWO CONDITIONS WERE REQUIRED TO BE SA TISFIED FIRSTLY THE ASSESSING OFFICER :-8-: MUST HAVE REASON TO BELIEVE THAT INCOME PROFITS OR GAINS CHARGEABLE TO INCOME TAX HAVE ESCAPED ASSESSM ENT, AND SECONDLY HE MUST ALSO HAVE REASON TO BELIEVE THAT SU CH ESCAPEMENT HAS OCCURRED BY REASON OF EITHER (I) OMISSION OR FA ILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY OR TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT OF THAT YEAR. BOTH THESE CONDITION S WERE CONDITIONS PRECEDENT TO BE SATISFIED BEFORE THE ASSESSING OFFICE R COULD HAVE JURISDICTION TO ISSUE NOTICE UNDER SECTION 148 READ WI TH SECTION 147(A). BUT UNDER THE SUBSTITUTED SECTION 147 EXISTENCE OF ONLY THE FIRST CONDITION SUFFICES. IN OTHER WORDS IF THE ASSESSING OFFICER FOR WHATEVER REASON HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IT CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. IT IS HO WEVER TO BE NOTED THAT BOTH THE CONDITIONS MUST BE FULFILLE D IF THE CASE FALLS WITHIN THE AMBIT OF THE PROVISO TO SECTION 147. THE CASE AT HAND IS COVERED BY THE MAIN PROVISION AND NOT THE PROVISO. 18. SO LONG AS THE INGREDIENTS OF SECTION 147 ARE FULFILLED, THE ASSESSING OFFICER IS FREE TO INITIA TE PROCEEDING UNDER SECTION 147 AND FAILURE TO TAKE STEPS UNDER SECT ION 143(3) WILL NOT RENDER THE ASSESSING OFFICER POWERLESS TO IN ITIATE REASSESSMENT PROCEEDINGS EVEN WHEN INTIMATION UNDER SE CTION 143(1) HAD BEEN ISSUED.' THE VIEW TAKEN BY US, IN THE PRESEN T APPEAL IS IN CONSONANCE OF THE JUDGMENT IN THE CASE OF ASSIST ANT COMMISSIONER OF INCOME-TAX VERSUS RAJESH JHAVERI STOCK BROKER S P. LTD. (SUPRA) HOLDING THAT FAILURE TO TAKE STEPS UNDER SECT ION 143(3) WILL NOT RENDER THE ASSESSING OFFICER POWERLESS TO IN ITIATE REASSESSMENT PROCEEDINGS EVEN WHEN INTIMATION UNDER SE CTION 143(1) HAD BEEN ISSUED. HAVING REGARD TO WHAT HAS BEEN SA ID ABOVE, WE ARE OF THE OPINION THAT THE ORDER OF THE TRIBUNAL HO LDING THAT THE NOTICE UNDER SECTION 147 OF THE ACT DATED 4TH JULY, 2006 IS INVALID IS LEGALLY NOT CORRECT. :-9-: ON A QUERY PUT BY TH E COURT, LEARNED COUNSEL FOR THE ASSESSEE ACCEPTS IF THE RECOURSE TO SECTIO N 143(3) WOULD HAVE BEEN BARRED BY TIME, THERE WOULD HAVE BEEN NO RESTRICTION TO INITIATE THE RE- ASSESSMENT PROCEEDING UNDER SECTION 147 OF TH E ACT. WE MAY ADD THAT THERE IS NOTHING ON THE PLAIN LANGUAGE OF SECTION 143 OF THE ACT WHICH MAY SUGGEST THAT THE RECOURSE TO SECTION 147 CAN BE HAD ONLY WHEN THE PERIOD OF LIMITATION TO COMPLETE ASSESSMENT PROCEEDING HAS EXPIRED OR THE ASSESSING AUTHORIT Y SHOULD WAIT FOR THE EXPIRY OF THE SAID PERIOD. THE SAID ARGUMENT IS RIDICULOUS AN D NOT ACCEPTABLE. THE AMBIT AND SCOPE OF RE-ASSESSMENT PROCEEDING IS LIMITED AND RESTRICTED AND IF THE ASSESSING AU THORITY IN ITS WISDOM PROCEEDS TO ASSESS THE INCOME WITH THE HELP OF LI MITED POWER, IT DOES NOT LIE IN THE MOUTH OF THE ASSESSEE TO SAY THAT THE ASSESSING AUTHORITY SHOULD HAVE EXERCISED WIDER JURISD ICTION I.E. THE REGULAR ASSESSMENT PROCEEDING INSTEAD. 8. IN THE LIGHT OF THE AFORESAID JUDG MENT OF THE JURISDICTIONAL HIGH COURT, WE ARE OF THE VIEW THAT ONLY FOR THE REASON THAT NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED BE FORE EXPIRY OF THE PERIOD FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT, RE OPENING OF ASSESSMENT UNDER SECTION 148 OF THE ACT CANNOT BE HELD TO BE IN VALID. THE ASSESSI NG OFFICER RECEIVED INFORMATION WITH REGARD TO RECEIPT OF BOGUS GIFT BY THE ASSESSEE AND THE INFORMATION WAS SUFFICIENT FOR HIM TO FORM A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IT IS ALSO EVIDENT FROM THE RECORD THAT THE REVISED RETURN WAS FILED TO SURRE NDER THE ADDITIONAL INCOME RECEIVED THROUGH A GIFT. THEREFORE, THE MATERIAL S AVAILABLE WITH THE ASSESSING OFFICER ARE SUFFICIENT TO FORM A BE LIEF THAT INCOME CHARGE ABLE TO TAX HAS ESCAPED ASSESSMENT. IN THE LIGHT OF THESE FACTS, WE AR E OF THE VIEW THAT THE :-10-: REOPENING OF ASSESSMENT UND ER SECTION 148 OF THE ACT IS VALID. ACCORDINGLY WE APPROVE THE VIEW TAKEN BY TH E LD. CIT(A) IN THIS REGARD. 9. GROUND NO.5 RELATES TO THE ADDITION OF ` 1 LAKH RECEIVED FROM SMT. SUSHILA DEVI MANARIKA AS UNPROVED GIFT. 10. IN THIS REGARD, IT IS NOTICED THAT THE ASSESSEE RECE IVED A GIFT OF ` 1 LAKH FROM SMT. SUSHILA DEVI MANARIKA WHICH WAS CONSIDERED TO BE BOGUS GIFT BY THE ASSESSING OFFICER AND HE MADE ADDITION OF THE SAME. 11. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) BUT DID NOT FIND FAVOUR WITH HIM. THE LD. CIT(A) HAS ALSO CONFIRMED THE ADDITION AFTER HAVING OBSERVED THAT THE GIFT WAS MADE WITHOUT ANY OCCASION AND THERE WAS NO RELATIONSHIP WITH THE DONOR AND DONEE. BESIDES, HE HAS ALSO OBSERVED THAT THE DONOR IS NOT ASSESSED TO TAX. THUS, IT CANNOT BE SAFELY PRESUMED THAT THE DONOR IS CREDITWORTHY. 12. NOW THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT BEFORE THE ASSESSING OF FICER DONOR HAS APPEARED AND CONFIRMED GIFT OF ` 1 LAKH TO THE ASSESSEE, BUT IT WAS CONSIDERED TO BE BOGUS GIFT ONLY FOR THE REASON THAT THE DONOR WAS NOT ASSESSED TO TAX. SINCE THE DONOR IS NOT ASSESSED TO TA X, IT CANNOT BE PR ESUMED THAT THE CREDITWORTHINESS OF THE DONOR IS NOT PROVED. HAD IT BEEN A CASE OF SUBSTANTIAL AMOUNT OF GIFT, ONE CAN UNDERSTAND THAT TH E DONOR MUST BE ASSESSED TO TAX TO ESTABLISH HIS/HER CREDITWORTHINESS. THE AMOUNT OF ` 1 LAKH CAN BE GIFTED OUT OF THE PAST SAVINGS OF THE DO NOR, FOR WHICH HE/SHE IS NOT REQUIRED TO BE ASSESSED TO TAX. 13. THE LD. D.R., ON THE OTHER HAND , HAS PLACED RELIANCE UPON THE ORDER OF THE LD. CIT(A). 14. HAVING GIVEN A THOUGHTFUL CONSIDER ATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF RECORD , WE FIND THAT BEFORE THE ASSESSING OFFICER THE ASSESSEE HAS PRODUCED TH E DONOR WHO HAS CONFIRMED THE GIFT :-11-: GIVEN TO THE ASSESSEE. NOTHING HAS BEEN PLACED ON RECORD TO SHOW THAT A SPECIFIC QUESTION WAS RAISED BY THE ASSESSING OFFICER WITH REGARD TO THE CREDITWORTHINESS OF TH E DONOR. MOREOVER, GIFT AMOUNT IS ONLY ` 1 LAKH WHICH CAN PRESUMABLY BE OUT OF SAVING OF TH E PERSON. IN ORDER TO DISPUTE THE GENUINENESS OF THE GIFT, THE ASSESSIN G OFFICER SHOULD HAVE EXAMINED THE DONOR WITH REGARD TO HIS CREDITWORTHINE SS AND THE OTHER ASPECTS OF THE GIFT. WITH REGARD TO THE SOURCE OF GIFT, IT WAS STATED TO BE OUT OF REPAYMENT OF LOAN FROM HER HUSBAND, SH RI. AMBIKA PRASAD MURARK A. SINCE THE DONOR HAS ACKNOWLEDGED THE GIFT GIVE N TO THE ASSESSEE AND AL SO EXPLAINED THE SOURCE OF THE FUND, THE GIFT SHOULD NOT BE TREATED TO BE NON-GENUINE. IF THE ASSESSING OFFICER HAS DOUBTED THE STAT EMENT OF THE DONOR, THE AMOUNT CAN BE ADDED IN THE HANDS OF THE DONOR. BUT FOR THE REASON THAT THE DONOR IS NOT ASSESSED TO TAX, THE GI FT SHOULD NOT BE CONSIDER ED TO BE NON-GENUINE. ACCORDINGLY WE FIND NO MERIT IN TH E ADDITION AND WE DELETE THE SAME. 15. THE NEXT GROUND RELATES TO THE COMMISSION INCURRED FOR ARRANGING THE GIFT OF ` 1 LAKH FROM SMT. SUSHILA DEVI MANARIKA. 16. ONCE WE HAVE ACCEPTED THE GIFT TO BE GENUINE, THE ADDITION MADE ON ACCOUNT OF COMMISSION TO ARRANGE THE ALLEGED BOGU S GIFT CANNOT BE SUSTAINED. WE ACCORDINGL Y DELETE THE SAME AFTER SETTING ASIDE THE ORDER OF THE LD. CIT(A) IN THIS REGARD. 17. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN TH E OPEN COURT ON 7.8.2013. SD/- SD/- [PRAMOD KUMAR] [S UNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:7.8.2013 JJ:0207 :-12-: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR