Dr. Rakesh Agarwal, Agra V. ITO, Agra

ITA 329/AGR/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7005 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-06-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 24-08-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: SHARAT CHANDRA
• Keywords: Non compliance
• Section: 54F; 147; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI H.S. SIDHU, JUDICIAL MEMBER ITA NO. 329/AGRA/2009 ASSTT. YEAR : 2000-01 DR. RAKESH AGARWAL, VS. INCOME-TAX OFFICER, 1/157, DELHI GATE, AGRA. 2(4), AGRA. (PAN : ADRPA 0353 N) (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI SHARAT CHANDRA, C.A. FOR RESPONDENT : SHRI A.K. SHARMA, JR. D.R. ORDER PER H.S. SIDHU, JM: THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE OR DER OF CIT(A)-I, AGRA ON THE FOLLOWING GROUNDS : 1. BECAUSE THE ORDER IS BAD ON FACTS AS WELL AS IN LAW. 2. BECAUSE THE C.I.T.(A) FAILED TO APPRECIATE AND TAKE NOTE THAT THE NOTICE U/S. 148 OF THE I.T. ACT DT. 27.02.2007 ALLEGEDLY ISSUED AND SERVED BY AFFIXTURE ON 08.03.07 AT 45, TOTA KA TAAL, AGRA WAS NOT THE C ORRECT ADDRESS OF THE ASSESSEE AND THE CORRECT ADDRESS OF THE ASSESSEE AND THE COR RECT ADDRESS OF THE ASSESSEE HAVING BEEN AVAILABLE ON RECORD WITH THE DEPARTMENT , THE SAME COULD NOT BE SAID TO BE VALIDLY ISSUED OR SERVED ON THE ASSESSEE. 3. BECAUSE THE ISSUE OF NOTICE AND SUBSEQUENT AF FIXTURE NOT BEING ON THE CORRECT ADDRESS OF THE ASSESSEE COULD NOT BE SAID T O HAVE BEEN VALIDLY ISSUED AND SERVED. 4. BECAUSE THE C.I.T. (A) ERRED IN HOLDING THAT TH E NOTICE U/S. 148 HAVING BEEN ISSUED WITHIN THE LIMITATION I.E. ON 27.02.200 7 WAS VALIDLY SERVED EVEN THOUGH IT WAS SERVED ON THE COUNSEL OF THE ASSESS EE ON 29.09.2007, AND THAT TOO DURING THE ASSESSMENT PROCEEDINGS. 5. BECAUSE THE VALID ISSUE AND SERVICE OF THE NOTICE WAS A NECESSARY INGREDIENT FOR INITIATION OF ACTION U/S. 147/148 OF THE ACT, AND FRAMING OF THE ASSESSMENT. 2 6. BECAUSE THE C.I.T. (A) ERRED IN HOLDING THAT TH ERE WAS NO INFIRMITY IN THE INITIATION OF PROCEEDINGS U/S. 147, AND IN BRUSHING ASIDE THE CONTENTION OF THE ASSESSEE :- (I). THAT THE A.O. DID NOT HAVE ANY MATERIAL OR EVI DENCE BEFORE HIM FOR FORMATION OF THE BELIEF, THAT INCOME HAS ESCAPED AS SESSMENT; THEREFORE, THE A.O. ASSUMED JURISDICTION ILLEGALLY. THE A.O. THUS HAVIN G ACTED WITHOUT JURISDICTION, THE ASSESSMENT ORDER PASSED IS ILLEGAL. (II). THAT THE A.O. DID NOT APPLY HIS MIND TO FORM AN INDEPENDENT BELIEF OF ESCAPEMENT OF INCOME WHICH WAS NECESSARY FOR ASSUMP TION OF JURISDICTION U/S. 147, BUT ISSUED NOTICE U/S. 148 WITHOUT APPLICATION OF JUDICIAL MIND MECHANICALLY ON THE DIRECTION OF THE SUPERIOR AUTHORITIES WHICH COULD NOT BE A BASIS OF FORMATION OF A VALID BELIEF. 7. BECAUSE THE CONDITIONS MENTIONED IN SECTION 147 TO 151 BEING MANDATORY ANY NON COMPLIANCE THERETO WOULD RESULT INTO MAKING THE REA SSESSMENT A NULLITY. 8. BECAUSE THE C.I.T.. ERRED IN DISREGARDING THE M ATERIALS PLACED IN RESPECT OF THE TRANSACTIONS OF PURCHASE AND SALES OF SHARE OF M/S. G.K. CONSULTANTS LTD. TO PROVE THE TRANSACTIONS INVOLVED (ADDITION RS.1,48,780/-) 9. BECAUSE THE COMPANY G.K. CONSULTANTS LTD. IN WHI CH THE SHARES WERE HELD AND SOLD THEREAFTER WAS A GENUINE AND EXISTING COMPANY. 10. BECAUSE THE C.I.T. (A) FAILED TO APPRECIATE TH AT THE ASSESSEE WAS NOT GRANTED ANY OPPORTUNITY TO CROSS EXAMINE THE ALLEGE D PERSONS ON WHOSE ALLEGED STATEMENTS THE ADDITION WERE MADE TO THE INCOME OF THE ASSESSEE, NOR THE COPY OF STATEMENTS OBTAINED IF ANY FROM M/S. CHEMPTRON ENGI NEERS AND RAJIV FINCAP SECURITIES WERE FURNISHED TO THE ASSESSEE, NOR ANY OPPORTUNITY WAS GRANTED TO CROSS EXAMINE THEM. 11. BECAUSE THE C.I.T. (A) FAILED TO APPRECIATE TH AT THE A.O. WAS DUTY BOUND TO AFFORD AN OPPORTUNITY TO THE ASSESSEE TO C ROSS EXAMINE M/S. G.K. CONSULTANTS LTD. ON THEIR REPLY AND THE A.O. NOT HA VING GIVEN ANY SUCH OPPORTUNITY THE ASSESSMENT WAS VITIATED. 2. THE FACTS NARRATED BY THE REVENUE AUTHORITIES AR E NOT DISPUTED BY THE BOTH PARTIES. THEREFORE, THERE IS NO NEED TO NARRATE THE SAME IN ORDER TO AVOID REPETITION. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORD AVAILABLE WITH US. 3 4. AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO. 2 TO 7, THE ASSESSEE HAS CHALLENGED THE NOTICE U/S. 148 OF THE ACT BY STATING THAT THE SAME HAS NOT BEEN SERVED ON THE CORRECT ADDRESS OF THE ASSESSEE INSPITE OF THE FACT THAT THE CORRECT A DDRESS OF THE ASSESSEE IS AVAILABLE ON RECORD WITH THE DEPARTMENT, THEREFORE, THE SERVICE OF NOTICE U/ S. 148 OF THE ACT IS NOT VALID SERVICE AND THE SUBSEQUENT ASSESSMENT FRAMED BY THE ASSESSING OFFIC ER IS WITHOUT JURISDICTION AND ILLEGAL. THE LEARNED FIRST APPELLATE AUTHORITY HAD ADJUDICATED T HIS LEGAL ISSUE AND DECIDED AGAINST THE ASSESSEE BY RESPECTFULLY FOLLOWING THE DECISION OF HONBLE S UPREME COURT OF INDIA IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. REPORTED IN 291 ITR 500 (SC) IN WHICH THIS LEGAL ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE AND UPHELD TH E INITIATING THE PROCEEDINGS BY THE ASSESSING OFFICER U/S. 147 OF THE ACT. AFTER GOING THROUGH T HE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS WELL AS THE DECISION RENDERED BY THE HONBLE SUP REME COURT OF INDIA IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS PVT. LTD. (SUPRA), WE ARE OF THE CONSIDERED OPINION THAT THERE IS NO INFIRMITY IN THE IMPUGNED ORDER PASSED BY THE LEARN ED FIRST APPELLATE AUTHORITY BY DECLARING THE VALID JURISDICTION OF THE ASSESSING OFFICER IN WHIC H THE PROCEEDINGS U/S. 147 OF THE ACT HAS BEEN INITIATED. WE DISMISS THE LEGAL ISSUE RAISED BY ASS ESSEE IN GROUND NO. 2 TO 7. 5. GROUND NO. 1 IS GENERAL IN NATURE AND IT NEEDS N O ADJUDICATION. 6. AS REGARDS TO THE ISSUE INVOLVED IN GROUND NO. 8 TO 11, AFTER GOING THROUGH THE CONTENTION RAISED BY THE ASSESSEE IN THESE GROUNDS OF APPEAL, WE FIND THAT THE ASSESSEE IS AGGRIEVED BY THE ADDITION OF RS.1,79,287/- AND RS.1,54,895/- TOWARDS THE SALE OF SHARES HOLDING IN M/S. TACTFULL INVESTMENT LTD. AND M/S. G.K. CONSULTANTS LTD. RESP ECTIVELY. THE MAIN CONTENTION OF THE ASSESSEE AS PER THE ARGUMENTS ADVANCED BEFORE US AS WELL AS THE CONTENTIONS RAISED IN GROUND NO. 8 TO 11, THE ASSESSEE STATED THAT THE TRANSACTION O F PURCHASE AND SALES OF SHARES IN DISPUTE ARE 4 GENUINE, BUT THE REVENUE AUTHORITIES HAS NOT GIVEN ANY OPPORTUNITY TO CROSS EXAMINE THE ALLEGED PERSON ON WHOSE ALLEGED STATEMENT, THE ADDITION WAS MADE TO THE INCOME OF THE ASSESSEE NOR THE COPY OF STATEMENT OBTAINED, IF ANY, FROM M/S. CHEMP TRON ENGINEERS AND RAJIV FINCAP SECURITIES WERE FURNISHED TO THE ASSESSEE. SIMILARLY, THE ASSE SSEE HAS ALSO NOT GIVEN ANY OPPORTUNITY TO CROSS EXAMINE M/S. G.K. CONSULTANTS LTD. 7. AFTER HEARING BOTH THE PARTIES AND PERUSING THE ORDERS PASSED BY THE REVENUE AUTHORITIES, WE ARE OF THE CONSIDERED OPINION THAT THE ADDITION INVOLVED IN GROUND NO. 8 TO 11 AMOUNTING TO RS.3,33,872/- MADE AS INCOME FROM OTHER SOURCES U/S . 68 OF THE ACT AND DENIAL OF DEDUCTION U/S. 54F OF THE ACT HAVE BEEN MADE BY THE REVENUE AUTHOR ITIES WITHOUT GRANTING SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE AL LEGED PERSON ON WHOSE STATEMENTS, THE ADDITION WERE MADE TO THE INCOME OF THE ASSESSEE. I N THE INTEREST OF JUSTICE, WE SET ASIDE THE ISSUE INVOLVED IN GROUND NO. 8 TO 11 TO THE ASSESSING O FFICER WITH THE DIRECTION TO AFFORD OPPORTUNITY TO THE ASSESSEE TO CROSS EXAMINE THE PERSON ON WHOS E STATEMENT, THE ADDITION IN DISPUTED HAS BEEN MADE TO THE INCOME OF THE ASSESSEE AND COPY OF THE SAME ALSO BE PROVIDED TO THE ASSESSEE FOR SUBSTANTIATING THE CLAIM OF THE ASSESSEE. THEREFORE , THE ISSUE INVOLVED IN GROUND NO. 8 TO 11 IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 17.06.20 11. SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17 TH JUNE, 2011 *AKS/- 5 COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY