Dy. Commissioner of Income Tax- II, Kanpur V. Shri Krishna Kumar Maheshwari, Kanpur

ITA 323/LKW/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83325 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-07-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 03-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R K RAM
• Keywords: Reopening of assessment; Gift; Difference of opinion; Revised return; Change of opinion
• Section: 148; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 323/LKW/2013 ASSESSMENT YEAR: 2002 - 03 DY. CIT - II KANPUR V. SHRI. KRISHNA KUMAR MAHESHW ARI 17/8B, KURSAWAN, THE MALL KANPUR PAN: AASPM9838L (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. R. K. RAM, D.R. RESPONDENT BY: NONE DATE OF HEARING: 28 07 2014 DATE OF PRONOUNCEMENT: 18 0 9 2014 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS: - 1 . THAT THE LD. COMMISSIONER OF INCOME TAX (A) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN HOLDING THE NOTICE ISSUED U/S 148 OF L.T. ACT, 1961 BY DCIT - II , KANPUR AS INVALID AND THEREBY ANNULLING THE REASSESSMENT ORDER DATED 16.11.2007 IGNORING THE FACT THAT WHILE ANNULLING THE ASSESSMENT COMPLETED ON 28.02.2005 IN THE SAME CASE FOR THE SAME PERIOD, THE LD. CIT(A) - 1, KANPUR HAD HELD THAT NOTICE ISSUED U/S 14 8 WAS INVALID FOR WANT OF JURISDICTION. THE LD. CI T (A) - L, KANPUR HAD ALSO MENTIONED IN HER ORDER ITSELF THAT 'THIS DOES NOT PRECLUDE THE ASSESSING OFFICER HAVING RIGHTFUL JURISDICTION OVER THE CASE OF ASSESSEE TO ISSUE NOTICE U/S 148 AS PER PRESCRIBED LIM IT PROVIDED IN THE LAW.' PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : 2 . THAT THE LD. COMMISSIONER OF INCOME TAX (A) - I I , KANPUR HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT NOTICE U/S 148 ISSUED BY DCIT - I I , KANPUR IS INVALID ON THE GROUND THAT IT IS BASED ON 'CHANGE OF OPINION' AND NO NEW MATERIAL FACT S HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER WHILE RECORDING REASONS FOR REOPENING OF THE CASE SINCE, IT IS NOT BASED ON 'CHANGE OF OPINION' RATHER IT HAS BEEN ISSUED BY THE ASSESSING OFFICER WHO HAD JURISDICTION OVER THE ASSESSEE AND THE NOTICE U /S 148 WAS ISSUED BY THE ASSESSING OFFICER OVER THE ASSESSEE FOR THE FIRST TIME AND NOT THE SECOND TIME AS STATED BY LD. C I T(A) - II, KANPUR IN HIS ORDER. 3 . THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) - I1, KANPUR DATED 10.01.2013 NEEDS TO BE QUASHED AND ORDER DATED 16.11.2007 PASSED BY THE ASSESSING OFFICER BE RESTORED. 2 . THROUGH THESE GROUNDS, THE REVENUE HAS ASSAILED THE ORDER OF THE LD. CIT(A) ANNULLING THE ASSESSMENT ON THE GROUND THAT THE REOPENING WAS DONE ON ACCOUNT OF CHANGE OF OPINION. 3 . THIS A PPEAL CAME UP FOR HEARING ON 28 . 7.2014, BUT NONE APPEARED ON BEHALF OF THE ASSESSEE. FROM A CAREFUL PERUSAL OF RECORD, WE FIND THAT THE LD. COUNSEL FOR THE ASSESSEE HAS FILED AN APPLICATION ALONG WITH WRITTEN SUBMISSION WITH A REQUEST THAT THE WRITTEN SUB MISSION BE TAKEN INTO ACCOUNT WHILE DISPOSING OF THE APPEAL. DESPITE HAVING KNOWLEDGE OF THE DATE OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE, THEREFORE, WE HAVE NO OPTION BUT TO PROCEED EX - PARTE AGAINST THE ASSESSEE. ACCORDINGLY THE REVENUE WAS HEARD. 4 . THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ORIGINAL RETURN DECLARING INCOME AT RS.3,09,650/ - WAS FILED ON 7.2.2003 AND IT WAS A BELATED RETURN. SUBSEQUENTLY , ASSESSEE FILED ANOTHER RETURN ON 24.10.2003 DECLARIING AN INCOME OF RS.13,0 9,650/ - INCLUDING IN HIS INCOME OF TWO CREDIT ENTRIES APPEARING IN THE S.B ACCOUNT NO.3628 WITH FEDERAL BANK LIMITED, PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : KANPUR. MEANWHILE AN INFORMATION FROM THE DI(INVESTIGATION) WING, KANPUR REGARDING TAX EVASION IN THE FORM OF BOGUS GIFT WAS RECEIVED. A CCORDINGLY THE ACIT - I, KANPUR ISSUED NOTICE UNDER SECTION 148 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') AFTER RECORDING REASONS. IN RESPONSE THERETO, RETURNS WERE FILED. ASSESSEE RAISED AN OBJECTION THAT THE ACIT - I HAS NO JURISD ICTION OVER THE ASSESSEE, AS THE CONCERNED ASSESSING OFFICER IS ACIT, RANGE 2. HAVING NOTED THIS FACT, THE DCIT, RANGE 1 SENT THE RECORD TO ACIT - 2 AND ACCORDINGLY ASSESSMENT WAS FRAMED. 5 . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND THE LD. CI T(A) VIDE HIS ORDER DATED 14.2.2007 ANNULLED THE ASSESSMENT HAVING NOTED THAT THE JURISDICTION OVER THE CASE WAS ACIT - 2, KANPUR WHILE NOTICE WAS ISSUED UNDER SECTION 148 OF THE ACT BY THE ACIT - 1, KANPUR WHO HAS NO JURISDICTION OVER THE ASSESSEE. WHILE ANN ULLING THE ASSESSMENT, THE LD. CIT(A) - I, KANPUR OBSERVED THAT THIS DOES NOT PRECLUDE THE ASSESSING OFFICER HAVING RIGHTFUL JURISDICTION OVER THE CASE OF THE ASSESSEE TO ISSUE NOTICE UNDER SECTION 148 OF THE ACT AS PER PRESCRIBED LIMIT PROVIDED IN THE LAW. 6 . ACCORDINGLY FRESH REASONS WERE RECORDED BY THE DCIT - 2, KANPUR AND ISSUED NOTICE UNDER SECTION 148 OF THE ACT. IN RESPONSE THERETO, ASSESSEE SOUGHT THE REASONS RECORDED FOR REOPENING OF ASSESSMENT. ON RECEIPT OF THE REASONS RECORDED, ASSESSEE SUBMITTED AN OBJECTION THAT THE REASONS ON THE BASIS OF WHICH THE ASSESSMENT HAS BEEN REOPENED ARE LIABLE TO BE DROPPED IN THE LIGHT OF THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF DHAMPUR SUGAR MILLS LTD. VS. CIT, 90 ITR 236. THE ASSESSING OF FICER FOUND NO MERIT IN THE OBJECTIONS AND COMPLETED THE ASSESSMENT AT RS.13,09,650/ - RESULTING INTO AN ADDITION OF RS.10,50,000/ - . 7 . AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WITH THE SUBMISSION THAT THE ASSESSMENT CANNOT BE REOPENED ON CHANGE OF OPINION, AS THE ASSESSING OFFICER HAS APPLIED HIS MIND WHILE RECORDING PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : REASONS FOR REOPENING THE ASSESSMENT FIRST TIME. HE ALSO PLACED RELIANCE UPON THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. , 320 ITR 561. BEING CONVINCED WITH THE CONTENTIONS OF THE ASSESSEE, THE LD. CIT(A) ANNULLED THE ASSESSMENT. 8 . AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT THERE CANNOT BE CHANGE OF OPINION WHERE THE FIRST ASSE SSMENT HAS BEEN ANNULLED. WHATEVER REASONS WERE RECORDED FOR REOPENING THE ASSESSMENT WHILE ISSUING NOTICE UNDER SECTION 148 OF THE ACT HAS NO VALUE IN THE EYES OF LAW, AS THE ORIGINAL ASSESSMENT WAS QUASHED BY THE LD. CIT(A) AND THE ASSESSMENT ORDER WAS ANNULLED. THEREFORE, THE REASONS RECORDED AT THE FIRST TIME FOR REOPENING THE ASSESSMENT CANNOT BE CALLED TO BE THE VIEW OR OPINION EXPRESSED BY THE ASSESSING OFFICER. THE ORIGINAL RETURN DECLARING INCOME AT RS.3,09,650/ - WAS FILED ON 7.2.2003. THEREAFT ER ANOTHER RETURN WAS FILED DECLARING INCOME AT RS.13,09,650/ - . THE FIRST RETURN WAS BELATED AND THE SUBSEQUENT RETURN FILED BY THE ASSESSEE CANNOT BE CALLED TO REVISED RETURN AND NOT A VALID RETURN IN THE EYES OF LAW. BUT IT IS A PIECE OF EVIDENCE WHICH CAN BE TAKEN INTO ACCOUNT BY THE ASSESSING OFFICER FOR FORMING A BELIEF THAT THE INCOME HAS ESCAPED ASSESSMENT AND ON THE BASIS OF THIS EVIDENCE AND ALSO ON THE INFORMATION RECEIVED FROM THE DI(INVESTIGATION) WING, KANPUR, THE ASSESSING OFFICER FORMED A B ELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND ISSUED NOTICE UNDER SECTION 148 OF THE ACT. THEREFORE, THERE IS NO ILLEGALITY OR IRREGULARITY IN THE REOPENING OF THE ASSESSMENT IN THE LIGHT OF THE FACT THAT EARLIER REOPENING WAS QUASHED BY THE LD. CIT(A). THE LD. D.R. HAS FURTHER CONTENDED THAT IN THE LIGHT OF THESE FACTS, THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND HE MAY BE DIRECTED TO ADJUDICATE THE APPEAL ON MERIT, AS HE HAS NOT DEALT WITH THE ISSUES ON MERIT. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : 9 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE ARGUMENTS ADVANCED BY THE LD. D.R. IN THE LIGHT OF THE WRITTEN SUBMISSIONS OF THE ASSESSEE, WE FIND THAT UNDISPUTEDLY THE FIRST RETURN FILED BY THE ASSESSEE WAS BELATED AND IT CANNOT BE REVISED UNDER THE RELEVANT PROVISIONS OF THE ACT . THEREFORE, THE SUBSEQUENT RETURN FILED DECLARING THE INCOME AT RS.13,09,650/ - IS NOT A VALID RETURN AND IS NON EST IN THE EYES OF LAW, BUT CERTAINLY IT IS A PIECE OF EVIDENCE ON THE BASIS OF WHICH THE ASSESSING OFFICER HAS GOT INFORMATION THAT THE INCOM E IN THE IMPUGNED ASSESSMENT YEAR HAS ESCAPED ASSESSMENT. BESIDES, THE ASSESSING OFFICER HAS ALSO RECEIVED INFORMATION FROM THE DI(INVESTIGATION) WING, KANPUR AND ON THE BASIS OF THE INFORMATION, THE ASSESSING OFFICER HAS RIGHTLY FORMED A BELIEF THAT THE INCOME HAS ESCAPED ASSESSMENT AND ACCORDINGLY ISSUED NOTICE UNDER SECTION 148 OF THE ACT. 10 . SO FAR AS THE ISSUE OF CHANGE OF OPINION IS CONCERNED, WE FIND THAT THE FIRST TIME REOPENING ON THE BASIS OF THE REASONS RECORDED BY THE ASSESSING OFFICER WAS HELD TO BE ILLEGAL AND THE ASSESSMENT FRAMED CONSEQUENT THERETO WAS ANNULLED. THE REASONS RECORDED BY THE ASSESSING OFFICER HAVE LOST ITS EVIDENTIARY VALUE AND CANNOT BE TAKEN INTO ACCOUNT. ONCE THERE ARE NO REASONS RECORDED BY THE ASSESSING OFFICER, THE RECORD ING OF REASONS SECOND TIME AFTER ANNULLING THE FIRST ASSESSMENT BY THE LD. CIT(A) CANNOT BE CALLED TO BE THE CHANGE OF OPINION FOR REOPENING OF ASSESSMENT. 11 . WE HAVE ALSO CAREFULLY EXAMINED THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS. KELVIN ATOR OF INDIA LTD. (SUPRA) AND WE FIND THAT IN THAT CASE THE ISSUE OF CHANGE OF OPINION IN A CASE WHEREIN IN THE ORIGINAL ASSESSMENT , THE ASSESSING OFFICER HAS TAKEN A VIEW ON A PARTICULAR SET OF FACTS AND FOR REOPENING OF THE ASSESSMENT THE ASSESSING OFFI CER RECORDS REASONS ON THE SAME ISSUE EXPRESSING HIS OPINION DIFFERENTLY UNDER THE SIMILAR SET OF FACTS . BUT IN THE INSTANT, THE REOPENING OF FIRST PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 6 - : ASSESSMENT WAS KNOCKED DOWN BY THE LD. CIT(A) , THEREFORE, THE REASONS RECORDED FOR REOPENING OF ASSESSMENT HAS NO EVIDENTIARY VALUE , AS THE REASONS WERE RECORDED BY THE ASSESSING OFFICER HAVING NO JURISDICTION OVER THE ASSESSEE. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE REOPENING WAS DONE BY THE ASSESSING OFFICER ON THE BASIS OF INFORMATION RECEIVED THROUGH THE RETURN FILED BY THE ASSESSEE AND THE INFORMATION RECEIVED FROM DI(INVESTIGATION) WING AND NOT ON ACCOUNT OF CHANGE OF OPINION. WE ARE, THEREFORE, OF THE VIEW THAT REOPENING WAS PROPER AND VALID. WE DO NOT AGREE WITH THE FINDING OF THE LD. CIT (A) ANNULLING THE ASSESSMENT. WE, THEREFORE, SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT HIM TO ADJUDICATE THE APPEAL ON MERIT AS HE HAS NOT GIVEN ANY FINDING ON MERIT. ACCORDINGLY, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 12 . IN T HE RESULT, APPEAL OF THE REVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENT I ONED ON THE CAPTION PAGE. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18 T H SEPTEMBER , 2014 JJ: 0809 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )