Vikram Bhardwaj, Noida V. ITO, Ward- 2(5), Noida

ITA 3412/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7444 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 18-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: MRS PREM LATA BANSAL
• Keywords: Recovery proceedings; Principle of natural justice; Right to appeal; TDS
• Section: 143(2); 139(1); 22; 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F NEW DELHI BEFORE SHRI G.S. PANNU, VICE PRESIDENT & SHRI AMIT SHUKLA, JUDICIAL MEMBER I.T.A. NO.3412/DEL/2019 ASSESSMENT YEAR 2009-10 VIKRAM BHARDWAJ, 804, BLOCK-P. GREAT VALUE SHARNAM, SECTOR-107, NOIDA. V. ITO, WARD-2(5), NOIDA TAN/PAN: AHUPB 6593L (APPELLANT) (RESPONDENT) APPELLANT BY: MRS. PREM LATA BANSAL, SR.ADV. & SHRI ABHISHEK KUMAR, ADV. RESPONDENT BY: SHRI SURENDER PAL, SR.D.R. DATE OF HEARING: 22 10 2019 DATE OF PRONOUNCEMENT: 17 01 2020 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 29.11.2018, PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, NOIDA FOR T HE QUANTUM OF ASSESSMENT PASSED U/S.147/144 FOR THE ASSESSMENT YEAR 2009-10. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS:- 1. THAT THE LD. CIT(A) HAS ERRED IN NOT ADMITTING THE APPEAL FILED BY THE ASSESSEE INVOKING PROVISIONS OF SECTIO N 249(4)(B) OF THE INCOME TAX ACT. 2. THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT FO R THE PURPOSE OF SECTION 249(4)(B), ASSESSED INCOME HAS TO BE TREATE D AS RETURNED I.T.A. NO.3412/DEL/2019 2 INCOME AND THEREFORE, FOR HAVING THE APPEAL ADMITTE D, ASSESSEE WAS REQUIRED TO PAY AN AMOUNT EQUAL TO ADVANCE TAX WHICH WAS PAYABLE BY THE ASSESSEE ON AN INCOME OF 7.44 CRORE. 3. THAT THE LD. CIT(A) HAS ERRED IN NOT CONSIDERIN G THE MATERIAL FACT THAT THE ASSESSEE HAD FILED ITS RETURN OF INCO ME FOR THE RELEVANT YEAR U/S 139(1) OF THE ACT IN SIRHIND, PUN JAB, AT ITS PERMANENT PLACE OF RESIDENCE AND THEREFORE, PROCEED ING INITIATED BY THE ASSESSING OFFICER U/S 147 WAS BAD-IN-LAW. 4. THAT THE LD. CIT(A) HAS NOT CONSIDERED THE MATE RIAL FACT THAT THE ASSESSING OFFICER I.E. ITO WARD-2(5), NOIDA HAD NO JURISDICTION TO ISSUE THE NOTICE U/S 148 OF THE ACT AND THEREFORE, THE ENTIRE PROCEEDING INITIATED AND CONDUCTED BY HI M WAS BAD- IN-LAW, DESERVES TO BE QUASHED. 5. THAT DESPITE HOLDING THAT NOTICE U/S 143(2) WAS NOT ISSUED BY THE ASSESSING OFFICER TO THE ASSESSEE BEFORE FRAMIN G ASSESSMENT U/S 147 R/W SECTION 144 OF THE ACT, LD. CIT(A) HAS ERRED IN CONFIRMING THE ASSESSMENT ORDER PASSED BY THE ASSES SING OFFICER. 6. THAT SINCE NO NOTICE U/S 143(2) HAD BEEN ISSUED BY THE ASSESSING OFFICER, THE ASSESSMENT ORDER FRAMED BY H IM WAS A NULLITY. 7. THAT THE LD. CIT(A) HAS PASSED THE CONTRADICTOR Y ORDERS WHEN IT STATED THAT THE ASSESSMENT FRAMED BY THE ASSESSI NG OFFICER CAN BE SAVED BY ISSUING THE DIRECTIONS U/S 150 OF T HE INCOME TAX ACT BUT IN THE ULTIMATE ANALYSIS CONFIRMED THE ASSESSMENT ORDER FRAMED BY THE ASSESSING OFFICER. 2. THE BRIEF FACTS ARE THAT THE ASSESSEE IS AN EMPL OYEE OF TIMEX GROUP PRECISION ENGINEERING LTD. HAVING ITS R EGISTERED I.T.A. NO.3412/DEL/2019 3 OFFICE AT 117, GROUND FLOOR, WORLD TRADE CENTRE, BA BAR ROAD, NEW DELHI. FOR THE YEAR UNDER CONSIDERATION, THE AS SESSEE HAS FILED ITS RETURN OF INCOME FROM SIRHIND, PUNJAB DECL ARING INCOME OF RS.7,56,980/-. BEING A SALARIED EMPLOYEE OF M/S. TIMEX PRECISION ENGINEERING LTD., TDS OF RS.1,36,05 7/- WAS DEDUCTED BY THE EMPLOYER COMPANY. ON THE BASIS OF S OME AIR INFORMATION THAT ASSESSEE HAS PURCHASED IMMOVAB LE PROPERTY ON 01.09.2008 FOR CONSIDERATION OF RS.7,44 ,00,000/-, ASSESSEES CASE WAS REOPENED BY ISSUANCE OF NOTICE U/S.148 ON 23.03.2016. THE SAID NOTICE HAS BEEN STATED TO B E SENT THROUGH SPEED POST; HOWEVER NO COMPLIANCE HAS BEEN MADE BY THE ASSESSEE. LD. ASSESSING OFFICER HAS ALSO NOT ED THAT OTHER NOTICES TO THE ASSESSEE REMAINED UNCOMPLIED W ITH. ACCORDINGLY, THE ASSESSING OFFICER TREATED THE INVE STMENT MADE IN THE PROPERTY AT RS.7,44,00,000/- AS UNDISCL OSED INVESTMENT WHICH WAS ADDED U/S.69 OF THE ACT. 3. THEREAFTER, ASSESSEE HAS PREFERRED AN APPEAL BEF ORE THE LD. CIT (A)-I, NOIDA. LD. CIT(A) IN HIS OPERATING P ARAGRAPH HAS OBSERVED THAT ASSESSEE HAS NOT FILED THE RETURN OF INCOME BEFORE THE ASSESSING OFFICER INCLUDING THE AMOUNT A DDED IN THE IMPUGNED ASSESSMENT ORDER; AND ACCORDINGLY HAS ISSUED A SHOW CAUSE NOTICE FOR NON- COMPLIANCE OF PROVISIO N OF SECTION 249(4)(B) OF THE IT ACT. AS PER HIM NO SUCH EXPLANATION WAS GIVEN BY THE LD. COUNSEL FOR THE AS SESSEE. THEREAFTER, IN HIS 60 PAGE ORDER INSTEAD OF DECIDIN G THE ISSUE ON MERITS AND MATERIAL PLACED ON RECORD, THE LD. CI T (A) HAS GONE COMPLETELY OUT OF TRACK AND HAS TAKEN INTO IRR ELEVANT I.T.A. NO.3412/DEL/2019 4 CONSIDERATIONS FOR DECIDING THE APPEAL OF THE ASSES SEE AND ACCORDINGLY, HAS DISMISSED THE APPEAL STATING THAT THE APPEAL ITSELF IS NOT MAINTAINABLE AND ON MERITS ALSO WITHO UT EVEN CONSIDERING MATERIAL FACTS PLACED BEFORE HIM HE HAS DISMISSED THE GROUNDS. 4. BEFORE US, LD. SENIOR COUNSEL, MRS. PREM LATA BA NSAL, SUBMITTED THAT VERY PREMISE ON WHICH LD. CIT(A) HAS DISMISSED THE APPEAL AFTER INVOKING THE PROVISION O F SECTION 249(4)(B) THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME, IS ABSOLUTELY INCORRECT. BECAUSE, THE ASSESSEE HAS FIL ED THE RETURN OF INCOME AND HE WAS REGULARLY FILING THE RE TURN OF INCOME WHICH IS EVIDENT FROM THE DOCUMENT ANNEXED I N THE PAPER BOOK FILED BEFORE US. NOT ONLY THAT, BEFORE T HE LD. CIT (A) THE ASSESSEE HAS FILED EVIDENCES AND DOCUMENTS ALONG WITH AFFIDAVIT OF THE ASSESSEE THAT HE HAS NOT PURCHASED ANY PROPERTY ON HIS BEHALF BUT ON THE BEHALF OF THE COM PANY IN WHICH HE WAS AN EMPLOYEE; AND IN SUPPORT, RESOLUTIO N PASSED BY THE BOARD OF DIRECTORS OF THE COMPANY IN ITS MEE TING DATED 29.07.2008 WAS ALSO PRODUCED WHEREBY ASSESSEE WAS AUTHORIZED BY HIS EMPLOYER COMPANY TO ENTER INTO CO NTRACT OR UNDERTAKING ON BEHALF OF THE COMPANY. AS PER THE BO ARD RESOLUTION, THE ASSESSEE HAS SIGNED ONE TRANSFER CU M SALE DEED 30.08.2008 FOR PURCHASE OF INDUSTRIAL BUILT UP FACTORY IN NOIDA AND EVEN THE AMOUNT PAID FOR THE CONSIDERATIO N HAS GIVEN FROM THE BANK ACCOUNT OF THE COMPANY FOR WHIC H BANK STATEMENT OF THE COMPANY WAS ALSO FILED ALONG WITH COPY OF BOARD RESOLUTION, COPY OF TRANSFER CUM SALE DEED, I TR FILED BY I.T.A. NO.3412/DEL/2019 5 THE COMPANY, AUDITED ACCOUNT AND BALANCE SHEET ALON G WITH P&L ACCOUNT. LD. CIT (A) NOT ONLY FAILED TO CONSIDE R THE EVIDENCES AND DOCUMENTS FILED, BUT HAVE ALSO GONE O FF TRACK IN DECIDING THE APPEAL OF THE ASSESSEE. BEFORE THE ASS ESSING OFFICER ALSO NO NOTICE COULD BE RECEIVED BY THE ASS ESSEE AS ALL THE NOTICES WERE SENT AT WRONG ADDRESS, AND THEREFO RE, NO COMPLIANCE COULD BE MADE, THEREFORE, SHE REQUESTED THAT IN THE INTEREST OF JUSTICE, MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. 5. ON THE OTHER HAND, LD. DR HAS RELIED UPON THE OR DER OF THE LD. CIT (A). 6. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE PA RTIES AND ON PERUSAL OF THE IMPUGNED ORDER, WE FIND THAT LD. CIT (A) HAS WRONGLY TREATED THE APPEAL FILED BY THE ASS ESSEE AS INADMISSIBLE, PERHAPS ON THE REASON THAT ASSESSED I NCOME IS TO BE TREATED AS RETURN OF INCOME, AND THEREFORE, A SSESSEE WAS REQUIRED TO PAY AMOUNT EQUAL TO ADVANCE TAX OF RS. 4.77 CRORE ON THE ASSESSED INCOME. FROM A BARE PERUSAL OF THE PROVISION OF SECTION 249(4)(B), IT IS CLEAR THAT IN A CASE, W HERE THE RETURN HAS BEEN FILED BY THE ASSESSEE, IF THE ASSESSEE HAS PAID THE TAX DUE ON THE INCOME RETURNED BY HIM THEN THE APPE AL FILED BY THE ASSESSEE IS TO BE ADMITTED, BUT WHERE NO RET URN HAS BEEN FILED BY THE ASSESSEE AND THE ASSESSEE HAS NOT PAID AN AMOUNT EQUAL TO THE AMOUNT OF ADVANCE TAX WHICH WAS PAYABLE BY HIM THEN THE APPEAL FILED BY THE ASSESSE E CANNOT BE ADMITTED. FURTHER, AS PER THE PROVISO , POWER IS CONFERRED I.T.A. NO.3412/DEL/2019 6 UPON THE CIT (A) TO GRANT EXEMPTION TO THE ASSESSEE FROM THE OPERATION OF THIS PROVISION, FOR ANY GOOD AND SUFFI CIENT REASONS TO BE RECORDED IN WRITING. 7. THE PROVISION OF SECTION 249 EMPOWERS THE CIT (A ) TO ENSURE RECOVERY OF TAX ON THE RETURN INCOME AND IT IS NOT A PROVISION TO DEFEAT THE LEGITIMATE RIGHT OF APPEAL. NOWHERE THE LEGISLATURE HAS ENVISAGED THAT TAX PAYER IS REQUIRE D TO PAY TAX ON ADDITION MADE BY THE ASSESSING OFFICER. IF THE E NTIRE LIABILITY AS DETERMINED IN THE ASSESSMENT ORDER HAS BEEN DISPUTED, THEN THERE IS NO REASON AS TO WHY ASSESSE E SHOULD BE FORCED TO PAY THE TAX BEFORE FILING OF FIRST APP EAL. HERE, THE ASSESSEE HAS FILED RETURN OF INCOME AND TAXES HAS B EEN PAID BY WAY OF TDS DEDUCTED BY THE EMPLOYER OF RS.1,36,0 57/-. THUS, ADVANCE TAX ON RETURN OF INCOME HAD ALREADY B EEN PAID BY THE ASSESSEE, AND THEREFORE, PROVISION OF SECTIO N 249(4)(B) ARE NOT APPLICABLE AT ALL. 8. HERE IN THIS CASE, SINCE NEITHER THE ASSESSING O FFICER NOR THE LD. CIT (A) HAS CONSIDERED THE MATERIAL FACTS A S BROUGHT ON RECORD; THAT, ASSESSEE WAS MERELY AN EMPLOYEE OF M/S. TIMES GROUP PRECISION ENGINEERING LTD. AND THE INVE STMENT FOR THE PURCHASE OF PROPERTY HAS BEEN STATED TO BE DONE ON BEHALF OF THE COMPANY FOR WHICH HE WAS DULY AUTHORI ZED BY THE BOARD AND EVEN THE PURCHASE CONSIDERATION HAS B EEN PAID BY THE SAID COMPANY FROM ITS BANK ACCOUNT. THESE AR E VERY VITAL FACTS WHICH NEED TO BE CONSIDERED AND EXAMINE D. THEREFORE, IN THE INTEREST OF NATURAL JUSTICE, WE RE STORE THE I.T.A. NO.3412/DEL/2019 7 ENTIRE ADDITION AS WELL AS VALIDITY OF REOPENING U/ S.147/148 TO THE FILE OF THE ASSESSING OFFICER WHO SHALL NOT ONL Y ADJUDICATE THE JURISDICTIONAL ISSUE OF VALIDITY U/S.147/148, BU T ALSO ON MERITS BY CONSIDERING THE ENTIRE EVIDENCES PLACED B Y THE ASSESSEE BEFORE THE LD. CIT (A) OR ANY OTHER DOCUME NTS IF REQUIRED DURING THE COURSE OF ASSESSMENT PROCEEDING S. LD. ASSESSING OFFICER SHALL GIVE DUE AND EFFECTIVE OPPO RTUNITY OF HEARING TO THE ASSESSEE AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH JANUARY, 2020. SD/- SD/- [G.S. PANNU] [AMIT SHUKLA] VICE PRESIDENT JUDICIAL MEMBER DATED: 17 TH JANUARY, 2020 PKK: