Sh. Pradeep Vig, New Delhi V. ITO, New Delhi

ITA 3996/DEL/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7168 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 11-07-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 16-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Accommodation entries; Reason to believe
• Section: 143(3); 147; 148

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-I: NEW DELHI BEFORE SHRI P.K.BANSAL, ACCOUNTANT MEMBER ITA NO.:- 3996/DEL/2015 ASSESSMENT YEAR: 2002-03 PRADEEP VIG 18/1020, ARYA SAMAJ ROAD, KAROL BAGH, NEW DELHI PAN AABPV9639D VS. ITO WARD-33(2), NEW DELHI 110 001 (APPELLANT) (RESPONDENT) O R D E R THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) DATED 23.3.2015. GROUND NO. 1A) AND 1B) SINCE NOT PRESSED STAND DISMISSED NOT PRESSED. GROUND NO. 1C) RELATES TO THAT NO PROPER AND VALID SANCTION U/S 151 OF THE APPROPRIATE AUTHO RITY AND THEREFORE THE PROCEEDING INITIATED U/S 148 ARE VOID. GROUND NO. 2 ALSO RELATES TO THE VALIDITY OF THE INITIATION OF PROCEEDINGS U/S 148 A S THE JURISDICTION IN THE ASSESSEE BY : SHRI R.S. ADLAKHA , ADV. DEPARTMENT BY : SHRI DEEPAK GARG, SR. D R DATE OF HEARING 11/07 /2016 DATE OF PRONOUNCEMENT 11 /07 /2016 ITA NO. 3996/DEL/2015 2 CASE OF THE ASSESSEE WERE WITH THE ITO WARD 33(2) W HILE THE PROCEEDINGS U/S 147 WERE INITIATED BY ITO WARD 25 ( 3). 2. I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFU LLY CONSIDERED THE SAME. I NOTED THAT IN THIS CASE WHILE GETTING THE A PPROVAL FOR INITIATING THE PROCEEDING U/S 147 THE AO RECORDED THE FOLLOWIN G REASONS AS ARE APPEARING AT PAGE 4 AND 5 OF THE PAPER BOOK :- AN INFORMATION ABOUT ACCOMMODATION ENTRIES TAKEN B Y DIFFERENT PERSONS/ASSESSES HAS BEEN RECEIVED IN THE FORM OF C D FROM THE DIT (INV.)-1, NEW DELHI THROUGH THE CIT DELHI-IX VI DE F.NO. CIT IX/HQRS/2006-07/2576 DATED 22.3.2007 DULY FORWARDED BY THE ADDL. CIT RANGE-25 VIDE F. NO. ADDL. CIT/R-25/06-07 /1368 DATED 22.3.2007 WHICH ALSO INCLUDE THE NAME OF THE ASSESS EE IN QUESTION. THE ASSESSEE HAS TAKEN ACCOMMODATION ENTRY TO THE T UNE OF RS. 500000/- FROM M/S. RABIK EXPORTS LTD. VIDE INSTRUME NT DRAWN ON RATNAKAR BANK, KAROL BAGH, (ACCOUNT NO. 49) ON 21.1 1.2001 AND RS. 500000/- FROM M/S. VPS VALUES AND TUBES (P) LTD . VIDE INSTRUMENT DRAWN ON RATNAKAR BANK, KAROL BAGH, (ACC OUNT NO. 41) AND THE SAID AMOUNT HAS BEEN CREDITED INTO ASSESSEE S BANK ACCOUNT NO. 1079 WITH BANK OF BARODA, PUNJABI BAGH, NEW DELHI. I HAVE, THEREFORE, REASON TO BELIEVE THAT INCOME CH ARGEABLE TO TAX TO THE EXTENT MENTIONED ABOVE HAS ESCAPED ASSESSMEN T. HENCE, NOTICE U/S 148 OF I.T. ACT IS PROPOSED TO BE ISSUED . 3. WHEN THE MATTER WENT BEFORE THE JOINT COMMI SSIONER THE JOINT COMMISSIONER APPROVED THE REASONS BY STATING YES. I AM SATISFIED. NOW THE QUESTION BEFORE ME IS WHETHER THIS FULFILS THE REQUIREMENT OF ITA NO. 3996/DEL/2015 3 SECTION 151 OF THE INCOME TAX ACT. IN THIS CASE THE ASSTT. YEAR WAS INVOLVED IN ASSESSMENT YEAR 2002-03. THE REASONS WE RE RECORDED BY THE AO ON 3.3.2009 WHICH WERE SENT FOR APPROVAL OF THE JOINT COMMISSIONER. JOINT COMMISSIONER WHILE GIVING HIS APPROVAL MARKED ON THE PRESCRIBED FORM YES. I AM SATISFIED. SINCE NO ASSESSMENT U/S 143(3) WAS COMPLETED THEREFORE THE PROCEEDING U/S 147 AFTER TH E EXPIRY OF THE FOUR YEARS COULD HAVE BEEN INITIATED BY AO WHO IS BELOW THE RANK OF JOINT COMMISSIONER, UNLESS THE JOINT COMMISSIONER IS SATI SFIED ON THE REASONS RECORDED BY SUCH AO THAT IT IS A FIT CASE FOR THE I SSUANCE OF THE NOTICE. THE LD. AR BEFORE ME SUBMITTED THE COPY OF THE DECI SION OF THE MADHYA PRADESH HIGH COURT AT JABALPUR BENCH IN ITA NO. 82 OF 2012 231 TAXMAN.73 IN THE CASE OF CIT, JABALPUR VS. M/S. S. GOYANKA LIME AND CHEMICALS LTD. DATED 14.10.2014 IN WHICH WHILE GIVI NG THE APPROVAL ON THE REASONS RECORDED BY THE AO. THE JOINT COMMISSIO NER WHILE ACCORDING SANCTION ONLY STATED THAT I AM SATISFIE D. THE HONBLE HIGH COURT ON THIS TOOK THE VIEW THAT THIS ACTION FOR SA NCTION WAS WITHOUT APPLICATION OF MIND AND THIS WAS DONE IN A MECHANIC AL MANNER AND THEREFORE THE HONBLE HIGH COURT QUASHED THE ASSESS MENT ORDER. WHILE QUESTIONED THE QUASHING THE ASSESSMENT THE MADHYA P RADESH HIGH COURT RELIED ON THE DECISION OF ARJUN SINGH VS. ADIT (MP) (2000) 246 ITR 363 IN THIS CASE ALSO THE JOINT COMMISSIONER WH ILE ACCORDING ITA NO. 3996/DEL/2015 4 SANCTION RECORDED YES, I AM SATISFIED . IN VIEW O F THIS DECISION THE LD. AR BEFORE ME VEHEMENTLY CONTENDED THAT IN THE RECEN T CASE ALSO THE JOINT COMMISSIONER HAS GIVEN THE SANCTION IN THE SA ME MANNER AND THEREFORE THE SANCTION GIVEN BY THE JOINT COMMISSIO NER TENTAMOUNTS TO BE ON MECHANICAL MANNER WITHOUT APPLICATION OF MIND ON HIS PART. NO CONTRARY DECISION WAS BROUGHT TO MY KNOWLEDGE BY TH E LD. DR EVEN THOUGH THE LD. DR HAS VEHEMENTLY CONTENDED THAT Y ES, I AM SATISFIED TENTAMOUNTS TO SATISFACTION BE ACCORDED ON THE REAS ONS RECORDED IN THE PROFORMA AND THUS THERE IS AN APPLICATION OF MIND O N THE PART OF THE JOINT COMMISSIONER. SINCE THE FACTS INVOLVED IN THE INSTANT CASE AND THE CASE OF THE JABALPUR OF MADHYA PRADESN THAT ARE SIM ILAR AND NO CONTRARY DECISION WAS BROUGHT TO MY KNOWLEDGE. I DO NOT HAVE ANY OTHER ALTERNATIVE BUT TO FOLLOW THE DECISION OF MADHYA PR ADESH HIGH COURT AND ACCORDINGLY SET ASIDE THE ORDER OF THE LD. CIT(A) A ND QUASH THE ASSESSMENT MADE BY THE AO. SO FAR THE OTHER ISSUE R EGARDING THE REOPENING BY THE AO WARD 25 (3) AND THE ADDITIONS M ADE ON MERITS DOES NOT REQUIRE ANY ADJUDICATION AS I HAVE ALREADY QUASHED THE ASSESSMENT. ITA NO. 3996/DEL/2015 5 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/07/2016. SD/- (P.K. BANSAL) ACCOUNTANT MEMBER DATED: 11 /07/2016 VEENA COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI