SHRI BITTAL KUMAR MODI, Kota V. CIT, Kota

ITA 382/JPR/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3047 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 20-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANJEET SINGH
• Assessee Lawyers: B V MAHESHWARI
• Section: 143(3); 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI B.R. JAIN AND SHRI V DURGA RA O) ITA NO. 382/JP/2012 ASSESSMENT YEAR: 2007-08 PAN: ACBPM 1472 B SHRI BITTAL KUMAR MODI VS. THE CIT NEW GRAIN MANDI KOTA BUNDI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B.V. MAHESHWARI DEPARTMENT BY: SHRI RANJEET SINGH DATE OF HEARING: 22-04-2013 DATE OF PRONOUNCEMENT: 25-04-2013 ORDER PER V. DURGA RAO, JM:- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD. CIT, KOTA DATED 07-03-2012 PASSED U/S 263 OF THE ACT WHE REIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS:-. 1. THAT THE ORDER U/S 263 OF I.T. ACT PASSED BY THE CIT, KOTA IS TIME BARRED. 2. THAT THE LD. CIT, KOTA GROSSLY ERRED IN REOPENIN G THE CASE U/S 263 OF THE I.T. ACT, 1961. THE LD. CIT SET ASI DE THE ASSESSMENT DONE U/S 143(3) BY THE ITO, BUNDI. 3. THAT THE LD. CIT, KOTA HAS GROSSLY ERRED IN MAKI NG THE DOUBT ON THE FARMER CREDITORS WORTH RS. 44,20,50/- AND THEREBY SET ASIDE THE ORDER U/S 263 OF I.T. ACT, 1961 2 2.1 THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVING INCOME FROM COMMISSION. THE ASSESSEE FILED THE RETU RN OF INCOME BY DECLARING AN INCOME OF RS. 1,14,240/-. THE RETURN FILED BY TH E ASSESSEE WAS PROCESSED U/S 143(1) OF THE ACT AND SUBSEQUENTLY AF TER FOLLOWING THE DUE PROCESS, THE AO COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT BY ASSESSING AN INCOME OF THE ASSESSEE AT RS. 3,53,760/-. 2.2 SUBSEQUENTLY, THE LD. CIT FOUND THE ORDER OF TH E AO AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ON 6-02-2012 BY STATING AS UNDER:- SUNDRY CREDITOR FARMERS OF RS. 44,20,560/- APPEAR ING IN THE BALANCE SHEET. THE AO HAS EXAMINED 3 FARMERS OUT OF THE LIST OF 212 FARMERS AND IN REMAINING CREDITORS (FAR MERS). NO ENQUIRY/ EXAMINATION HAS BEEN MADE. EVEN IN THE CAS E OF 3 FARMERS WHOSE STATEMENTS WERE RECORDED, NO DOCUMENT ARY EVIDENCE REGARDING HOLDING OF THEIR LAND, KHASRA, G IRDAWARI, SALE OF AGRICULTURE PRODUCE ETC. WERE OBTAINED. THEREFOR E, THE GENUINENESS AND CREDITWORTHINESS OF THOSE 3 FARMERS IS ALSO NOT PROVED. IN REMAINING CASES, THE RECORD IS SILENT. T HE AO HAS ONLY EXAMINED THE DOCUMENT PRODUCED BY YOU. THEREFO RE, HE IS DIRECTED TO TAKE REMEDIAL ACTION. 2.3 IN RESPONSE TO THE ABOVE LETTER, THE ASSESSEE F ILED REPLY ON 23-02-2012 BY STATING THAT THE AO AFTER EXAMINING ALL THE DETA ILS ABOUT SUNDRY CREDITORS 3 HAS PASSED THE ASSESSMENT ORDER U/S 143(3) AND THE ORDER PASSED BY THE AO U/S 143(3) DATED 12-05-2009 CANNOT COME WITHIN THE PURVIEW OF SECTION 263 OF THE ACT AND THE PROCEEDINGS MAY BE DROPPED. HOWE VER, THE LD. CIT WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND HE OBSERVED THAT AO HAS NOT PROPERLY ENQUIRED ABOUT THE SUNDRY CREDITOR S WORTH RS. 44,20,560/-. NO EVIDENCE WAS EXAMINED. THE CREDITWORTHINESS OF T HE FARMERS WERE ALSO NOT EXAMINED. THEREFORE, HE CAME TO THE CONCLUSION THAT THE ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE LD. CIT SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE AO TO MAKE AFRESH ASSESSMENT ON THE POINT OF GENUINENESS OF THE FARME R CREDITORS WORTH RS. 44,20,560/-. 2.4 ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MA TTER BEFORE THE TRIBUNAL. 2.5 THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE AO AFTER MAKING A DETAILED ENQUIRY AND AFTER CONSIDERING THE REPLY GIVEN BY THE ASSESSEE PASSED AN ASSESSMENT ORDER U/S 143(3). THE REFORE, THE ORDER DATED 12-05-2009 PASSED BY THE AO IS NEITHER ERRONEOUS NO R PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2.6 ON THE OTHER HAND, THE LD. DR SUBMITTED THAT TH E AO SIMPLY ACCEPTED THE SUBMISSIONS OF THE ASSESSEE AND PASSED THE ASSE SSMENT ORDER WITHOUT 4 MAKING ANY ENQUIRY WHETHER THE CREDITORS WERE HAVIN G CREDITWORTHINESS, GENUINENESS AND IDENTITY OF THE PARTIES. THEREFORE, THE ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 2.7 WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ONLY ISSUE INV OLVED IN THIS APPEAL IS WHETHER THE AO MADE PROPER ENQUIRY WITH REGARD TO S UNDRY CREDITORS WORTH RS. 44,20,560/-. WE HAVE GONE THROUGH THE ASSESSMEN T ORDER DATED 12-05- 2009 PASSED BY THE AO. THIS ORDER WAS PASSED BY THE AO U/S 143(3) OF THE ACT BUT HE HAS NOT DISCUSSED ANYTHING WITH REGARD T O THE SUNDRY CREDITORS. HOWEVER, THE LD. AR HAS SUBMITTED THAT ALL THE DE TAILS WITH REGARD TO SUNDRY CREDITORS HAVE BEEN FILED BEFORE THE AO. IT IS THE DUTY OF THE AO TO EXAMINE EACH AND EVERY DETAILS FILED BY THE ASSESSEE AND SI MPLY FILING THE DETAILS WITH REGARD TO SUNDRY CREDITORS BY THE ASSESSEE IS NOT SUFFICIENT AND PARTICULARLY WITH REGARD TO SUNDRY CREDITORS, THE AO HAS TO EXAM INE THE CREDITWORTHINESS, GENUINENESS OF THE TRANSACTION AND IDENTITY OF THE PARTIES. IT APPEARS TO US THAT SUCH ACTIVITY HAS NOT BEEN UNDERTAKEN BY THE A O IN THE PRESENT CASE. IN OUR OPINION, THE LD. CIT HAS RIGHTLY INVOKED SECTIO N 263 OF THE ACT AND DIRECTED THE AO TO REDO THE ASSESSMENT ORDER. IN TH E SIMILAR CASE, THE HON'BLE M.P. HIGH COURT IN THE CASE OF CIT VS. DEEP AK KUMAR GARG (2008), 299 ITR 435 HAS HELD THAT FROM THE ORDER OF THE AO, IT WAS CLEAR THAT FOR 5 WANT OF TIME, THE AO HAD DONE ONLY A SEMBLANCE OF E NQUIRY AND THAT TOO, IN A VERY SLIP-SHOD MANNER. THE AO ACCEPTED THE VERSIO N OF THE AO WITHOUT PROPER ENQUIRY AND AS A RESULT A SUBSTANTIAL AMOUNT OF TAXABLE INCOME WAS NOT BROUGHT TO TAX. THE LD. CIT(A) HAD RECORDED A C ATEGORICAL FINDING THAT THE ORDER OF THE AO FOR WANT OF ADEQUATE ENQUIRY, WAS E RRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND AFTER SETTING A SIDE THE ASSESSMENT ORDER, REMANDED THE MATTER TO THE AO FOR FRESH ASSESSMENT ON THE MERITS AND UPHELD THE ORDER OF THE LD. CIT U/S 263 OF THE ACT. THEREFORE, IN VIEW OF THE ORDER OF THE HON'BLE M.P. HIGH COURT IN THE CASE OF CIT VS. DEEPAK KUMAR GARG (SUPRA) AND TAKING INTO CONSIDERATION THE FACT S AND CIRCUMSTANCES OF THE CASE, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT PASSED U/S 263 OF THE ACT. THUS WE UPHOLD THE ORDER OF THE LD. CIT. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 25-04-2013 SD/- SD/- (B.R. JAIN) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 25 TH APRIL, 2013 *MISHRA COPY FORWARDED TO:- BY ORDER 1. SHRI BITTAL KUMAR MODI, BUNDI 2. THE LD. CIT , KOTA 3..THE LD. DR 4.THE GUARD FILE (IT NO.382/JP/12) A.R. 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