ITO, New Delhi V. M/s. Sony Financial Services Ltd., New Delhi

ITA 3213/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52614 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 18-08-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 29-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S MOHANTHY
• Keywords: Principle of natural justice; Additional evidence; Accommodation entries; Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE VICE PRESIDENT & SHRI I.P. BANSAL, JUDICIAL MEMBER ITA NO. 3213/DEL/2010 ASSESSMENT YEAR: 2001-02 ITO, VS. SONY FINANCIAL SERVICES LTD., WARD 9(1), ROOM NO. 190, 1/4233, 2 ND FLOOR, ANSARI ROAD, C.R. BUILDING, NEW DELHI. DARYA GANJ, NEW DELHI. AADCS3982K (APPELLANT) (RESPONDENT) APPELLANT BY : S. MOHANTHY , DR RESPONDENT BY : NONE ORDER PER I.P. BANSAL, J.M. THIS IS AN APPEAL FILED BY THE DEPARTMENT. IT IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A) DATED 5.2.20 10, FOR A.Y. 2001-02. GROUNDS OF APPEAL READ AS UNDER: - 1. LD. CIT(APPEALS) ERRED, IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN QUASHING THE ASSESSMENT MADE BY THE AO U/S 144/147 OF THE I.T. ACT. 2. LD. CIT(APPEALS) ERRED, IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN ACCEPTING ITA NO. 3213/D/2010 2 ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A OF THE I.T. RULES. 3. LD. CIT(APPEALS) ERRED, IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN HOLDING THAT THE JURISDICTION OVER THE CASE DOES NOT LIE WITH THE INCOME TAX OFFICER WARD 9(1), NEW DELHI. 4. LD. CIT(APPEALS) ERRED, IN LAW AND ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IN HOLDING THAT THE CORRECT JURISDICTION OVER THE CASE LIES WITH JOINT COMMISSIONER 9(1) WHEREAS THERE IS NO SUCH ASSESSING OFFICER. 5. THE APPELLANT CRAVES LEAVE OR RESERVING THE RIGH T TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. NOTICE OF HEARING WAS SENT TO ASSESSEE. HOWEVER , NONE WAS PRESENT AT THE TIME OF HEARING. WE, THEREFORE, PROCEED TO DECIDE THE APPEAL EX-PARTE QUA THE ASSESSEE AFTER H EARING LD. DR. 3. THE ASSESSEE HAS BEEN ASSESSED BY WAY OF AN ORDE R PASSED BY AO UNDER THE PROVISIONS OF SEC. 147/144 O F THE INCOME TAX ACT, 1961 (ACT). IT IS MENTIONED IN THE ASSESSMENT ORDER THAT AN INFORMATION WITH REGARD TO ASSESSEE WAS RECEIVED FROM INVESTIGATION WING THAT THE ASSES SEE HAS ITA NO. 3213/D/2010 3 RECEIVED AN AMOUNT OF RS. 12,20,000/- IN THE FORM O F CHEQUES/DRAFTS AS ACCOMMODATION ENTRIES FROM M/S WE LLWISH CREDIT PVT. LTD., WHICH WAS ONE OF THE COMPANIES CO NTROLLED BY ONE RAJEST BANSAL GROUP AND BEING USED IN THE BUSIN ESS OF PROVIDING ACCOMMODATION ENTRIES. IT IS ALSO MENTIO NED IN THE ASSESSMENT ORDER THAT STATEMENT OF SHRI RAJESH BANS AL WAS RECORDED ON 16.6.2004, IN WHICH HE HAD ADMITTED THA T HE IS ONE OF THE DIRECTOR OF WELLWISH CREDIT PVT. LTD. AN D HAS USED THAT COMPANY FOR THE PURPOSE OF PROVIDING ACCOMMODA TION ENTRIES. HE ALSO ADMITTED THAT HE HAD OPENED MANY BANK ACCOUNTS IN THE NAMES OF VARIOUS COMPANIES/FIRMS AN D INDIVIDUALS FOR THE PURPOSE OF PROVIDING ACCOMMODAT ION ENTRIES AND BASED ON SUCH INFORMATION THE AO INITIA TED THE REASSESSMENT PROCEEDINGS. THE ASSESSEE DID NOT ATTE ND BEFORE AO AND ALSO DID NOT FILE RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148. IT IS IN THIS MANNER, THE ASSESSME NT CAME TO BE FRAMED IN WHICH THE AFOREMENTIONED AMOUNT OF RS. 12,20,000/- RECEIVED BY THE ASSESSEE FROM M/S WELLW ISH CREDIT PVT. LTD. WAS ADDED ALONG WITH COMMISSION OF RS. 3,050/- BEING 0.20%. ITA NO. 3213/D/2010 4 4. AN APPEAL WAS FILED BEFORE CIT(A) IN WHICH THE A SSESSEE CONTESTED THE ADDITION ON THE GROUND THAT IT HAS WR ONGLY BEEN PRESUMED BY THE AO THAT NO RETURN OF INCOME WAS FIL ED BY THE ASSESSEE. THE NOTICES WERE SERVED UPON THE ASSESSEE AS ALL OF THEM WERE AFFIXED ON THE OLD PREMISES OF THE ASS ESSEE, WHEREAS THE ASSESSEE IS FILING ITS RETURN OF INCOME AT NEW ADDRESS. THE NOTICES OF LEVY OF PENALTY WERE SENT AT THE CHANGED ADDRESS. THUS, IT WAS CONTENDED THAT NO VA LID NOTICE WAS SERVED. THE PRINCIPLE OF NATURAL JUSTICE WAS V IOLATED. THE ASSESSEE HAD FILED ITS RETURN OF INCOME IN WHIC H THE AFOREMENTIONED TRANSACTION OF RS. 12,20,000/- WAS D ISCLOSED. THE SAID AMOUNT COULD NOT BE TREATED AS UNACCOUNTED MONEY. THE ADDITION WAS BASED MERELY ON MISSTATEMENT IN TH E POSSESSION OF DEPARTMENT MADE BY SOME PERSONS. THE INFORMATION HAS BEEN USED TO MAKE ADDITION U/S 69A WITHOUT GIVING THE OPPORTUNITY TO THE ASSESSEE. ON THESE G ROUNDS, LD. CIT(A) HAS FOUND THAT ASSESSEE HAD SUBMITTED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 30 TH OCTOBER, 2001 IN RANGE 9, NEW DELHI, WHEREIN INCOME OF RS. 34,816 /- WAS DISCLOSED. THE RETURN WAS ACCOMPANIED BY AUDITED B ALANCE SHEET, PROFIT AND LOSS ACCOUNT WITH ANNEXURE AND TH US, SHE HAS QUASHED THE ASSESSMENT WITH THE FOLLOWING OBSERVATI ONS: - ITA NO. 3213/D/2010 5 IN VIEW OF THE SUBMISSION MADE BY THE ASSESSEE AND EVIDENCE BY WAY OF ACKNOWLEDGEMENT RECEIPT OF THE RETURN THE SAID ORDER PASSED U/S 144/147 IS QUASHED AS THE AO HAVING JURISDICTION OVER THE CASE IS JOINT COMMISSIONER 9(1) WITH WHOM RETURN WAS FILED ALONG WITH AUDIT REPORT DEALING WITH THE SAID INVESTMENT. COPY OF THIS ORDER MAY BE MADE AVAILABLE TO JOINT COMMISSIONER OF INCOME TAX RANGE 9(1) FOR ANY FURTHER ACTION. IN THE RESULT, THE APPEAL IS ACCEPTED. 5. AFTER NARRATING THE FACTS, IT WAS VEHEMENTLY PLE ADED BY LD. DR THAT ASSESSMENT HAS WRONGLY BEEN QUASHED BY THE LD. CIT(A). SHE SUBMITTED THAT THE JURISDICTION OF THE ASSESSEE FALLS WITH WARD 9(1) AND THE SAME AO HAS ISSUED THE NOTICE AND HAS ASSESSED THE ASSESSEE. SHE SUBMITTED THAT ASSESSEE DID NOT FILE ANY RETURN OF INCOME IN RESPO NSE TO NOTICE ISSUED U/S 148. SHE PLEADED THAT ASSESSMENT COULD NOT BE QUASHED SIMPLY FOR THE REASON THAT JOINT COMMISSIONER, 9(1) WAS ONLY HAVING THE JURISDICTION AL OF THE CASE OF THE ASSESSEE. THEREFORE, SHE SUBMITTED THA T THE AFOREMENTIONED ORDER OF THE LD. CIT(A) SHOULD BE SE T ASIDE AND ASSESSMENT ORDER SHOULD BE RESTORED. ALTERNATI VELY, SHE ITA NO. 3213/D/2010 6 PLEADED THAT THE MATER MAY BE RESTORED TO THE FILE OF THE CIT(A) TO ASCERTAIN THE FACTUAL POSITION AND THEREA FTER DECIDE THE APPEAL FILED BY THE ASSESSEE. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION OF L D. DR. WE HAVE ALSO GONE THROUGH THE ORDER PASSED BY THE A O AND LD. CIT(A). IT HAS NEVER BEEN THE CONTENTION OF TH E ASSESSEE BEFORE CIT(A) THAT ASSESSMENT IS LIABLE TO BE QUASH ED FOR THE REASON THAT JURISDICTION OF THE CASE WAS LYING WITH ANOTHER AO, THEREFORE, THE IMPUGNED ASSESSMENT BEING FRAMED BY THE AO WARD 9(1), NEW DELHI SHOULD BE QUASHED. THE ORDER OF THE LD. CIT(A) IS VERY CRYPTIC AND SHORT AND HAS NOT ADVANC ED ANY REASON FOR QUASHING THE ASSESSMENT ORDER. IT HAS A LSO NOT BEEN ASCERTAINED FROM THE CONCERNED AO THAT WHETHER OR NOT THE AO WHO HAS FRAMED THE ASSESSMENT HAD THE JURISD ICTION TO ASSESS THE INCOME OF THE ASSESSEE. MERE FILING OF THE RETURN WITH SOME AO CANNOT DECIDE THE JURISDICTION OF THE ASSESSEE. THEREFORE, WE CONSIDER IT JUST AND PROPER TO RESTOR E THIS APPEAL TO THE FILE OF CIT(A) WITH A DIRECTION TO RE-ADJUDI CATE THE SAME AFTER GIVING THE CONCERNED AO A REASONABLE OPPORTUN ITY OF HEARING. THEREFORE, WE SET ASIDE HER ORDER AND ISS UE AFOREMENTIONED DIRECTIONS AND THE MATTER IS RESTORE D BACK WITH ITA NO. 3213/D/2010 7 THE AFOREMENTIONED DIRECTIONS FOR RE-ADJUDICATION O F THE APPEAL. WE DIRECT ACCORDINGLY. 7. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL FILED BY THE REVENUE IS TREATED AS ALLOWED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH AUGUST, 2011. SD/- SD/- (G.E. VEERABHADRAPPA) (I.P. BANSAL) VICE PRESIDENT JUDICIAL M EMBER DATED: 26.08.2011. *KAVITA COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR