Sh. Bilal Ahmed Wani, Srinagar V. The Income tax Officer, Srinagar

ITA 373/ASR/2009

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 8227 (ITAT-AMRITSAR)
• Duration Of Justice: 5 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 17-09-2018
• Assessment Year: 2004-2005
• Appeal Filed On: 21-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Cost of acquisition; Reason to believe
• Section: 143(3); 142(1); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO. 373/ASR/2009 AS SESSMENT YEAR: 2004-05 BILAL AHMED WANI, S/O MOHD. YOUSUF WANI, SRINAGAR [PAN: ] VS. INCOME TAX OFFICER, WARD 2, SRINAGAR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. VINAMAR GUPTA (C.A .) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 17.09.2018 DATE OF PRONOUNCEMENT: 28.09.2018 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE AGITATING THE ORD ER BY THE COMMISSIONER OF INCOME TAX (APPEALS), BATHINDA ('CIT(A)' FOR SHO RT) DATED 22.06.2009, DISMISSING THE ASSESSEES APPEAL CONTESTING ITS AS SESSMENT U/S. 143(3) R/W S. 147 OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREINAFTER) DA TED 29.12.2006 FOR THE ASSESSMENT YEAR (AY) 2004-05. 2. THIS IS THE SECOND ROUND BEFORE THE TRIBUNAL. IN THE FIRST ROUND, THE TRIBUNAL DISMISSED THE ASSESSEES APPEAL QUA THE ADDITION OF RS.13 LACS MADE TOWARD UNEXPLAINED INVESTMENT IN LAND, PURCHASED BY THE AS SESSEE DURING THE RELEVANT YEAR FOR A SUM OF RS.102 LACS, I.E., ACCEPTING THE ASSES SEES EXPLANATION QUA THE BALANCE PURCHASE COST (OF THE SUBJECT LAND) OF RS.89 LACS, VIDE ORDER DATED 11.02.2010 (COPY ITA NO. 373/ASR/2009 (AY 2004-05) BILAL AHMED WANI V. ITO 2 ON RECORD). THE ASSESSEE HAD DISPUTED THE SAID ASSE SSMENT BOTH ON THE LEGAL ASPECTS AS WELL AS ON THE MERITS OF THE SAID ADDITION PER S EVERAL GROUNDS BEFORE THE TRIBUNAL, BEING GROUNDS 1 TO 4, WHICH STOOD CONSIDERED AND DI SPOSED VIDE ITS SAID ORDER (PER PARAS 3 THROUGH 7). THE ASSESSEE MOVED THE TRIBUNAL U/S. 254(2), ALLEGING THAT SEVERAL ASPECTS HAD NOT CONSIDERED PER THE SAID ORD ER. THE TRIBUNAL RECALLED ITS SAID ORDER FOR, IN ITS WORDS, ARGUMENTS ON THE WRITTEN SUBMISSIONS BY THE LD. DEPARTMENTAL REPRESENTATIVE (DR), VIDE PARA 4.1 OF ITS ORDER U/S. 254(2) DATED 27.02.2013 (COPY ON RECORD). THE SAID WRITTEN SUBMI SSIONS, ALSO REPRODUCED AT PAGE 6 (PARA 5.2) OF ITS SECTION 254(1) ORDER, STA ND REPRODUCED AT PARA 4 OF THE TRIBUNALS ORDER U/S. 254(2), AND READ AS UNDER: IT IS SUBMITTED THAT THE HONBLE BENCH HAD DIRECTE D THE UNDERSIGNED TO FILE WRITTEN SUBMISSIONS WITH REGARD TO THE APPLICABILITY OF THE JUDGMENTS RELIED UPON BY SHRI R.C. KHANNA, CA, COUNSEL FOR THE ASSESSEE, DURING THE CO URSE OF HEARING OF THE AFOREMENTIONED APPEAL. IT IS SUBMITTED THAT THOUGH SHRI KHANNA HAD RELIED UPON FOUR JUDGMENTS AND HE ONLY HAD DWELT UPON THE APPLICABILITY OF THE DECISION OF THE HONBLE DELHI A SPECIAL BENCH IN THE CASE OF MOTOROLA INC. VS. DEPUTY COMMISSIONER OF INCOME-TAX REPORTED IN 95 ITD 269. THEREFORE, I AM GIVING MY COMMENTS ON THE RELEVANCE OF THIS DECISION ALONE. IN THIS CASE, THE AO HAD ISSUED NOTICE UNDER SECTION 148 BUT AS THE T IME FOR ISSUING OF NOTICE UNDER SECTION 142(L)((I) HAD NOT YET EXPIRED, THE HONBLE TRIBUNAL HELD THAT THE AO COULD NOT ISS UE/NOTICE UNDER SECTION 148 UNTIL TIME FOR ISSUING OF NOTICE UNDER SECTION 142(1) (I) HAD (NOT) EXPIRED. THIS IS NOT RELEVANT TO THE FACTS OF THE CASE IN AP PEAL AS IN THIS CASE THE RETURN UNDER SECTION 142(1) COULD BE FILED UPTO 31.10.2004 BUT SINCE NO RETURN HAD BEEN FILED BY THE ASSESSEE UPTO THIS DATE, THE AO HAD VALIDLY ISSUED NOTICE U/S 148 ON 20.12.2005. THUS, THIS JUDGMENT IS NOT APPLICABLE TO THE FACTS OF THE CASE AND NO COGNIZAN CE OF THIS JUDGMENT NEED BE TAKEN. (EM PHASIS, SUPPLIED) AS IT APPEARS, THE COUNSEL FOR THE ASSESSEE IN THE FIRST ROUND (SH. R.C. KHANNA, CA), HAD RELIED ON CERTAIN DECISIONS DURING HEARING , ON WHICH THE BENCH REQUIRED THE LD. DR TO RESPOND, AND WHICH HE DID AFTER THE C ONCLUSION OF THE HEARING PER THE SAID WRITTEN SUBMISSIONS. IT IS ON ACCOUNT OF THE C ONSIDERATION OF THE SAID WRITTEN SUBMISSIONS, WHICH MAY HAVE CAUSED PREJUDICE TO THE ASSESSEE IN-AS-MUCH AS THE SAME WERE SUBMITTED AFTER THE CLOSE OF THE HEARING, I.E., WITHOUT THE ASSESSEE HAVING ITA NO. 373/ASR/2009 (AY 2004-05) BILAL AHMED WANI V. ITO 3 THE BENEFIT THEREOF AND OPPORTUNITY TO RESPOND THER ETO, THAT THE TRIBUNAL RECALLED ITS ORDER. FURTHER, AS APPARENT, THE ONLY DECISION, REL IANCE ON WHICH STANDS COMMENTED UPON BY THE LD. DR PER THE SAID WRITTEN SUBMISSIONS , IS MOTOROLA INC. V. DY. CIT [2005] 95 ITD 269 (DEL) (SB). THE SAME STANDS DEALT WITH BY THE TRIBUNAL PER PARA 5.2 OF ITS SECTION 254(1) ORDER, READING AS UNDER: 5.2. SIMILARLY, WE HAVE GONE THROUGH THE DECISION OF ITAT DELHI (SPECIAL BENCH), IN THE CASE OF MOTOROLA INC. VS. DY. CIT [2005] 95 ITD 269 (DELHI)(SB) AND FOUND THAT THE S AME IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE, AS THE NOTICE IN THIS CASE HAS BEEN ISSUED AFTER EXPIRY OF 12 MONTHS. THE LD. DR HAS SPECIFICALLY ARGUED THIS POINT IN THE WRITTEN SUBMISSIONS. IT IS PERTINENT TO REPRODUCE THE WRITT EN SUBMISSION DATED 28.01.2010, FILED BY THE LD. DR ON THE ISSUE: (THIS IS FOLLOWED BY THE WRITTEN SUBMISSIONS BY LD. DR, REPRODUCED (SUPRA)) THE TRIBUNAL HAVING RECALLED ITS ORDER FOR ARGUMEN TS ON THE WRITTEN SUBMISSIONS BY THE LD. DR, THE LD. COUNSEL, SH. GUPTA WAS, DURING HEARING, ASKED BY THE BENCH TO ADVERT TO THE FINDINGS BY THE TRIBUNAL QUA THE SAID WRITTEN SUBMISSIONS, AS WELL AS TO SHOW AS TO HOW THE SAME WERE NOT SUSTAINABLE, SO AS TO INFLUENCE, NAY, ALTER THE DECISION OF THE TRIBUNAL. HE WOULD RESPOND BY STATI NG THAT PER THE SAID WRITTEN SUBMISSIONS THE LD. DR HAD MADE TWO INCORRECT STATE MENTS, WHICH HAD INFLUENCED THE TRIBUNALS MIND. ONE, THAT THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME, I.E., PRIOR TO THE ISSUE OF NOTICE U/S. 148. THE ASSESSEE HAD IN FACT FILED THE RETURN OF INCOME U/S. 139(1) ON 29.10.2004, WHICH WAS WITHIN TIME AS A TIME PERIOD FOR FURNISHING THE SAME, AVAILABLE UP TO 31.10.2004. A REFERENCE IN THIS REGARD WAS MADE BY HIM TO PGS. 45-46 OF THE ASSESSEES PAPER B OOK (PB). THIS, HE WOULD CONTINUE, IS AN ADMITTED FACT; THE ASSESSEE RELYING ON THE SAME RETURN IN COMPLIANCE TO THE NOTICE U/S. 148, AS WELL AS THE AO CONFIRMIN G THE SAME PER HIS REMAND REPORT DATED 09.03.2009 (PB PGS.54-55). TWO, THAT THE NOTI CE U/S. 142(1), ISSUED SIMULTANEOUSLY WITH THE NOTICE U/S. 148 ON 20.12.20 05, COULD NOT BE ISSUED ON THAT DATE. THE SPECIAL BENCH IN MOTOROLA INC. (SUPRA) HAS CLARIFIED THAT DESPITE THERE ITA NO. 373/ASR/2009 (AY 2004-05) BILAL AHMED WANI V. ITO 4 BEING NO TIME LIMIT SPECIFIED FOR THE ISSUE OF NOTI CE U/S. 142(1) (I.E., PRIOR TO THE AMENDMENT TO THE ACT BY FINANCE ACT, 2006, W.E.F. 0 1.04.2006, PLACING A TIME LIMIT FOR THE ISSUE OF NOTICE U/S. 142(1) AS THE EN D OF THE RELEVANT ASSESSMENT YEAR), THE SAME COULD BE ISSUED WITHIN ONE YEAR OF THE END OF THE RELEVANT ASSESSMENT YEAR. FURTHER, THAT THE ISSUE OF NOTICE U/S. 148, W HERE THE TIME FOR ISSUE OF NOTICE U/S. 142(1) HAS NOT ELAPSED, IS NOT VALID. THE NOTI CE U/S. 142(1)(I) COULD THEREFORE IN THE PRESENT CASE BE ISSUED UP TO 31.03.2006. THE ISSUE OF NOTICE U/S. 148 ON 20.12.2005 IN THE INSTANT CASE, THUS, IS NOT VALID. ON BEING ASKED OF THE RELEVANCE OF THE ISSUE OF NOTICE U/S. 142(1) AND, CONSEQUENTI ALLY, THE ISSUE OF THE VALIDITY OF SECTION 148 ISSUED ON 20.12.2005, GIVEN THAT THE AS SESSEE HAD FURNISHED THE RETURN ON 29/10/2004, HE COULD NOT FURNISH ANY SATISFACTOR Y ANSWER, MERELY STATING THAT, AS IT APPEARS, THE AO WAS NOT AWARE OF THE FILING OF T HE RETURN OF INCOME BY THE ASSESSEE ON 29.10.2004, I.E., AT THE TIME OF ISSUE OF NOTICE U/S. 148. 3. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. 3.1 THE ASSESSEE, AS AFORE-NOTED, HAD CHALLENGED TH E IMPUGNED ADDITION, BOTH ON THE LEGAL ASPECT/S AS WELL AS ON THE MERITS OF THE ADDITION. THE TRIBUNAL, RELYING PRINCIPALLY ON THE DECISION IN THE CASE OF ASST. CIT V. RAJESH JHAVERI STOCK BROKERS PVT. LTD. [2007] 291 ITR 500 (SC), FURTHER NOTING THAT THE A PEX COURT HAD THEREIN REFERRED TO JUDICIAL PRECEDENTS IN THE MATTER, FOUN D THE NOTICE U/S. 148 AS VALID BOTH WITH REGARD TO THE REASON TO BELIEVE AS WELL AS T HE DATE OF ITS ISSUE, CONCLUDING AS UNDER: (AT PARA 5.7) HAVING REGARD TO THE ABOVE FACT SITUATION OF THE P RESENT CASE, WE DO NOT FIND ANY SUBSTANCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE AND, HENCE, ASSUMPTION OF JURISDICTION BY THE AO UNDER SECTION 147 R.W.S. 148 OF THE ACT, AFTER RECORDING REASONS, CANNOT BE FAULTED AS UPHELD BY THE LD. CIT (A). FURTHER, THE NOTICE U/S. 148 OF THE ACT WAS ISSUED AFTER EXPIRY OF ONE YEAR FROM TH E DATE OF FILING THE SAID RETURN OF INCOME. THEREFORE, THE ACTION OF THE LD. CIT(A) IS JUSTIFIED AND THESE THREE GROUNDS OF APPEAL OF THE ASSESSEE ARE DISMISSED. ITA NO. 373/ASR/2009 (AY 2004-05) BILAL AHMED WANI V. ITO 5 ON MERITS, AFTER DISCUSSING THE MATTER VIDE PARAS 6 THROUGH 6.2, IT, RELYING ON THE DECISION IN CIT V. MOHANKALA P . [2007] 291 ITR 278 (SC), HELD THAT THE GENUINENESS OF THE TRANSACTION COULD NOT BE PROVED BY THE ASSESSEE, DISMISSING HIS FOURTH GROUND. 3.2 THE RELEVANT PART OF THE RECALL ORDER READS AS UNDER: 4.1 THE REGISTRY IS DIRECTED TO FIX THE MAIN APPEAL IN ITA NO. 373(ASR)/2009 FOR 13.03.2013 FOR ARGUMENTS ON THE WRITTEN SUBMISS IONS FILED BY THE LD. DR. THE SOLE ISSUE, GIVEN THE MANDATE FOR RECALL BY THE TRIBUNAL PER ITS ORDER U/S. 254(2) DATED 27.02.2013, SINCE MERGED IN ITS ORDER U/S. 25 4(1) DATED 11.02.2010, IS THE VALIDITY OF THE NOTICE U/S. 148 DATED 20.12.2005 IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LAW AS EXPLAINED, I.E., WITH REFER ENCE TO THE SUBMISSIONS BY THE LD. DR, SEEKING TO ASSAIL THE ASSESSEES RELIANCE ON TH E DECISION IN MOTOROLA INC. (SUPRA). IT IS APPARENT THAT THE AO WAS NOT AWARE OF THE ASS ESSEE HAVING FURNISHED HIS RETURN OF INCOME U/S. 139 ON 29.10.2004. THIS IS AS THERE WAS OTHERWISE NO NO NEED OR OCCASION TO ISSUE A NOTICE U/S. 142(1). THIS, IN FACT, IS AN UNDISPUTED FACT, DULY NOTED BY THE TRIBUNAL, WHOSE ORDER U/S. 254(1) CONT AINS REFERENCE THERETO (VIZ. AT PARA 3 OF THE SAID ORDER). THE ISSUE OF NOTICE U/S. 142(1), OR THE QUESTION OF THE TIME PERIOD WITHIN WHICH THE SAME COULD BE ISSUED, IS TH US RENDERED INCONSEQUENTIAL IN VIEW OF THE ADMITTED FACT OF THE ASSESSEE FURNISHIN G HIS RETURN OF INCOME U/S. 139 ON 29/10/2004, REMOVING THE BASIS FOR THE ISSUE OF NOTICE U/S. 142(1). THE ISSUE OF NOTICE U/S. 148(1) ON 20.12.2005 WOULD THUS HAVE TO BE CONSIDERED INDEPENDENT AND DE HORS THE ISSUE OF NOTICE U/S. 142(1), I.E., IN THE BACK DROP OF A GIVEN, I.E., OF THE ASSESSEE HAVING FURNISHED HIS RETURN U/S. 139 O N 29.10.2004. THE NOTICE U/S. 142(1), ISSUED ON 20/12/2005, COULD EVEN OTHERWISE BE, AS EXPLAINED IN MOTOROLA INC. (SUPRA), BE ISSUED ONLY UPTO THE END OF THE RELEVA NT ASSESSMENT YEAR, I.E., ITA NO. 373/ASR/2009 (AY 2004-05) BILAL AHMED WANI V. ITO 6 31/3/2005, IN THE PRESENT CASE. THE VALIDITY OF NOT ICE U/S. 148 CANNOT, THEREFORE, BE ASSAILED AS PREMATURE. FURTHER, THE DECISION IN MOTOROLA INC. (SUPRA), RELIANCE ON WHICH STANDS IMPUGNED BY THE LD. DR THROUGH HIS WRITTEN SUBMISSI ONS, ON FACTS, ASSISTS THE REVENUES CASE, RATHER THAN THAT OF THE ASSESSEE. S H. GUPTA WOULD, UPON THIS BEING OBSERVED BY THE BENCH DURING HEARING, SUBMIT THAT T HE ASSESSED HAD, PER HIS APPLICATION U/S. 254(2), RAISED OTHER ISSUES AS WEL L BEFORE THE TRIBUNAL, WHICH THOUGH WERE NOT TAKEN INTO ACCOUNT BY IT WHILE RECA LLING ITS ORDER U/S. 254(1). AS AFORE-STATED, THIS TRIBUNAL CANNOT BREACH THE AMBIT OF THE RECALL OR THE TERMS THEREOF SET OUT PER THE RECALL ORDER. THIS IS PARTICULARLY SO AS, AGAIN, AS AFORE-NOTED, THE TRIBUNAL HAD ANSWERED ALL THE GROUNDS, I.E., 1 TO 4 , RAISED BY THE ASSESSEE QUA THE SAID ADDITION, PER ITS SECTION 254(1) ORDER. IT MA Y BE, FOR THE SAKE OF CLARITY, ALSO ADDED THAT THE TRIBUNAL HAS CONSIDERED AND MET THE ASSESSEES RELIANCE ON THE OTHER DECISIONS CITED BY HIS COUNSEL WHILE ADJUDICATING T HE ASSESSEES APPEAL PER ITS SEC. 254(1) ORDER. 3.3 UNDER THE CIRCUMSTANCES, AND FOR THE REASONS AF ORE-STATED, I FIND NO REASON FOR INTERFERENCE WITH THE TRIBUNAL FINDING THE ISSU E OF NOTICE U/S. 148 AS VALID (REFER PARA 5.7 OF ITS ORDER). I DECIDE ACCORDINGLY, DECLI NING INTERFERENCE. 4. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN CO URT ON SEPTEMBER28, 2018 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER DATE: 28.09.2018 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: BILAL AHMED WANI, S/O MOHD. YOUSUF WANI, SRINAGAR ITA NO. 373/ASR/2009 (AY 2004-05) BILAL AHMED WANI V. ITO 7 (2) THE RESPONDENT: INCOME TAX OFFICER, WARD 2, SRINAGAR (3) THE CIT(APPEALS) BATHINDA (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER