ITO, New Delhi V. Sh. Amar Khosla, New Delhi

ITA 3160/DEL/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9926 (ITAT-DELHI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2009
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2001-2002
• Appeal Filed On: 08-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G S SAHOTA
• Assessee Lawyers: P N CHAWLA
• Keywords: Gift; Difference of opinion; Change of opinion
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH `E NEW DELHI) BEFORE SHRI A.D. JAIN AND SHRI A.K. GARODIA ITA NO. 3160(DEL)2009 ASSESSMENT YEAR: 2001-02 INCOME TAX OFFICER, SHRI AMAR KHOSLA, WARD 31(2), NEW DELHI. V. 175 GOLF LINKS, NEW DELHI. C.O.NO. 255(DEL)2009 (IN ITA NO. 3160(DEL)2009) ASSESSMENT YEAR: 2001-02 SHRI AMAR KHOSLA, INCOME T AX OFFICER, 175, GOLF LINKS, NEW DELHI. V. WARD 31(2), NEW DELHI. (APPELLANT) (RESPONDENT) DEPARTMENT BY: SHRI G.S. SAHOTA, SR. DR ASSESSEE BY: SHR I P.N. CHAWLA, ADVOCATE ORDER PER A.D. JAIN, J.M. THESE ARE DEPARTMENTS APPEAL AND ASSESSEES CROSS OBJECTIONS FOR ASSESSMENT YEAR 2001-02. 2. THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 1.80 CRORE ON ACCOU NT OF GIFT WITHOUT CONSIDERING AND ADJUDICATING THE VERY BASIS OF ADDI TION I.E., THE STATEMENT OF SHRI TEJ MOHAN SACHDEVA RECORDED ON OA TH. A NO. 3160 & CO 255(DEL)09 2 2. THE LD. CIT(A) ERRED IN DELETING THE ADDITION BY NOT APPRECIATING THE FACT THAT THE APPELLANT IS THE FINAL BENEFICIAR Y OF THE UNEXPLAINED MONEY AND, THEREFORE, THE INCOME TAX LIABILITY ON T HE AMOUNT HAS TO BE BORNE BY HIM ONLY. 3. THE ASSESSEES CROSS OBJECTIONS ARE AS FOLLOW:- 1. THAT THE LD. CIT(A) HAS ACCEPTED THE APPEAL AFT ER DULY CONSIDERING THE STATEMENT MADE BY SHRI TEJ MOHAN SACHDEVA (DONO R), REPORT OF THE DIT(INVESTIGATION) AS WELL AS FINDINGS OF THE A O IN WHICH HE COULD NOT BRING OUT ANY INDISCRIMINATELY EVIDENCE AGAINST THE ASSESSEE TO PROVE THAT THE ASSESSEE WAS THE ULTIMATE BENEFICIAR Y, RATHER AOS RELIANCE ON THE STATEMENT OF SHRI TEJ MOHAN SACHDEV A GOES IN FAVOUR OF THE ASSESSEE AS SHRI TEJ MOHAN SACHDEVA STATED T HAT SHRI AMAR KHOSLA WAS NOT THE ULTIMATE BENEFICIARY AND HE HAS NOT WORKED AS CONDUIT BETWEEN THE ASSESSEE AND SHRI SANJAY MOHAN AGGARWAL AND AS SUCH APPEAL FILED BY THE AO IS BASELESS, UNJUSTI FIED, ARBITRARY , ILLEGAL AND DESERVES TO BE REJECTED? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) WAS JUSTIFIED IN REJECTING THE CONTENTIO N OF THE ASSESSEE THAT HE DULY DECLARED THE GIFT OF RS. 1.8 CRORES IN HIS RETURN AND WAS ASSESSED BY THE ITO AT THE TIME OF ORIGINAL ASSESSM ENT PASSED ON 30.12.2002 AND ACCORDING THE REOPENING OF THE ASSES SMENT U/S 147 READ WITH SECTION 148 IS BAD IN LAW? 3. WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS JUSTIFIED IN REJECTING THE CONTENTIONS OF THE A SSESSEE THAT MERE CHANGE OF OPINION IS NOT A GROUND FOR REASSESSMENT? 4. THAT THE LD. CIT(A) HAS ERRED IN REJECTING THE APPEAL OF THE ASSESSEE ON THE ISSUE REGARDING SANCTION FOR ISSUE OF NOTICE U/S 151 BY THE LD. CIT, HAD NOT APPLIED HIS MIND BUT HAD ON LY APPENDED HIS SIGNATURE ON THE PROPOSAL SENT BY THE ITO. THE RE OPENING OF THE CASE WITHOUT APPLICATION OF MIND IS BAD IN LAW, ILLEGAL AND UNJUSTIFIED IN VIEW OF THE CASE OF UNITED ELECTRICAL CO.(P)LTD. V . CIT & OTHERS,258 ITRN 317(DEL). A NO. 3160 & CO 255(DEL)09 3 5. THAT THE LD. CIT(A) HAS ERRED IN REJECTING THE APPEAL ON THE ISSUE OF ASSESSMENT MADE BY THE ITO U/S 143(3) WITHOUT ISSUE OF NOTICE U/S 143(2)AFTER FILING THE RETURN,IS BAD IN LAW, ILLEGA L AND UNJUSTIFIED. 6. THAT THE LD. CIT(A) HAS ERRED IN REJECTING THE GROUND OF APPEAL THAT THE STATEMENT OF SH. T.N. SACHDEVA WAS RECORDE D IN THE ABSENCE OF THE ASSESSEE AND THE ASSESSEE WAS NOT ALLOWED TO CROSS EXAMINE SH. T.N. SACHDEVA ON WHOSE STATEMENT THE ITO BASED HIS ASSESSMENT ORDER WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUS TICE AS SUCH THE ASSESSMENT IS BAD IN LAW AND ILLEGAL. 7. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN REJECT ING THE CONTENTS FILED IN THE AFFIDAVIT OF THE ASSESSEE BEFORE THE ITO AS HE WAS NOT ALLOWED TO CROSS EXAMINE SH. TEJ MOHAN SACHDEVA AND AS SUCH TH E ORDER OF LD. CIT(A) IS TOTALLY UNJUSTIFIED, ARBITRARY AND ILLEGA L IN VIEW OF THE JUDGMENT OF APEX COURT IN THE CASE OF MEHTA PARIKH & CO. V. CIT, 30 ITR 181(SC). 8. THAT THE LD. CIT(A) WAS WRONG IN DECIDING THAT NON-MENTIONING OF SECTION 143(3) UNDER WHICH THE ORDER HAS BEEN PASSE D IS ONLY AS TECHNICAL FAILURE IS ABSOLUTELY ILLEGAL AND AGAINST THE FACTS OF THE CASE AS DECIDED IN THE CASE OF TIWARI KANHYAYA LAL V. CI T, 154 ITR (RAJ) AND RAJ KUMAR CHAWLA V. ITO, 277 ITR(AT)225(DEL). 4. THE ASSESSEE HAS, INTER ALIA, CONTENDED THAT THE LEARNED CIT(A) HAS ERRED IN REJECTING THE GROUND REGARDING SANCTION FO R ISSUING OF NOTICE U/S 151 BY THE CIT. IN THIS REGARD, THE ASSESSEE CONTENDED BEFORE THE LEARNED CIT(A) THAT THE SANCTION HAD BEEN ACCORDED WITHOUT APPLICA TION OF MIND; THAT THE LD.CIT HAD MERELY PUT HIS SIGNATURE WITHOUT RECORDI NG HIS SATISFACTION REGARDING THE SANCTION TO BE ACCORDED FOR ISSUANCE OF NOTICE U/S 148 OF THE ACT. A NO. 3160 & CO 255(DEL)09 4 5. THE LEARNED CIT(A), WHILE DEALING WITH THIS ISSU E, OBSERVED AS FOLLOWS:- .I FIND THAT BY SIGNING ON THE PROPOSAL TO RE OPEN THE CASE, THE COMMISSIONER HAS IMPLIEDLY ACCEPTED THAT HE/SHE HAS READ THE PROPOSAL. JUST BECAUSE ONLY SIGNATURES WERE PUT, D OES NOT AMOUNT TO THE CONCLUSION THAT IT WAS A CASE OF NON-APPLICATIO N OF MIND, ESPECIALLY WHEN THERE WAS NO CO-RELATING FACTORS - DIRECT OR INDIRECT. SIGNATURES IMPLY THE APPROVAL. THEREFORE, THERE D OES NOT APPEAR TO BE ANY LEGAL INFIRMITY HERE. THIS GROUND OF THE A PPELLANT IS REJECTED. 6. THE ASSESSEE HAD RELIED ON VARIOUS CASE LAWS. THE LEARNED CIT(A), HOWEVER, MERELY RECORDED:- THE CASE LAWS HAVE ALSO BEEN PERUSED BUT THE FACTS OF THE INSTANT CASE ARE FOUND TO BE DIFFERENT. 7. IT HAS BEEN STRESSED THAT THE CIT(A)S VIEW IS N OT JUSTIFIED IN VIEW OF THE DECISION IN UNITED ELECTRICAL CO.(P)LTD. V. CI T & OTHERS, 258 ITR 317(DEL). IN THAT CASE ALSO, LIKE IN THE ASSESSEE S CASE, THE SANCTION WAS ACCORDED WITH ONLY THE MERE SIGNATURE OF THE COMMIS SIONER. THE SANCTION THUS ACCORDED WAS HELD TO BE NOT VALID SANCTION AS REQUIRED U/S 151 OF THE ACT. 8. AS SUCH, THE DECISION OF THE LD. CIT(A) ON THIS ISSUE IS IN DIRECT VARIANCE WITH UNITED ELECTRICAL CO.(P)LTD. (SUPRA ). SINCE THE FACT OF ACCORDING OF SANCTION TO ISSUE NOTICE U/S 148 OF TH E ACT GOES TO THE VERY ROOT OF THE MATTER , WE DEEM IT APPROPRIATE TO REMIT THI S ISSUE TO THE FILE OF THE LD. A NO. 3160 & CO 255(DEL)09 5 CIT(A), TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW , IN THE LIGHT OF UNITED ELECTRICAL CO. (SUPRA) AS WELL AS EACH OF THE OTHER CASE LAWS CITED BY THE ASSESSEE, AS MENTIONED AT SL NO. 1 AND 3 TO 7 IN TH E LAST PARA AT PAGE 58 OF THE IMPUGNED ORDER. 9. SINCE THE MATTER IS BEING REMITTED TO THE FILE O F THE LD. CIT(A) AS ABOVE, THE WHOLE DISPUTE SHALL BE DECIDED AFRESH BY THE LD. CIT(A) IN ACCORDANCE WITH LAW , IN THE LIGHT OF THE FINDINGS TO BE ARRIVED AT IN RELATION TO THE ISSUE OF ACCORDING OF SATISFACTION, AS ABOVE . 10. CONSEQUENTLY, THE SUBJECT MATTER OF BOTH, I.E., THE DEPARTMENTS APPEAL AS WELL AS THE CROSS OBJECTIONS OF THE ASSESSEE STA ND REMITTED TO THE FILE OF THE LD. CIT(A), AS ABOVE, FOR DECISION AFRESH. 11. IN THE RESULT, BOTH THE DEPARTMENTS APPEAL AS WELL AS ASSESSEES CROSS OBJECTIONS ARE, FOR STATISTICAL PURPOSES, TREATED A S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8.09.2009. SD/- SD/- (A.K. GARODIA) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8.09.2009. *RM A NO. 3160 & CO 255(DEL)09 6 COPY FORWARDED TO: 1. ITO, WARD 31(2), NEW DELHI . 2. SHRI AMAR KHOSLA, 175 GOLF LINKS, NEW DELHI . 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER DEPUTY REGISTRAR