Income Tax Officer, Ward-1, Rewa V. Shri Narayan Mishra, Rewa

ITA 40/JAB/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7669 (ITAT-JABALPUR)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 07-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K HALDER
• Assessee Lawyers: ABHIJEET SHRIVASTAVA
• Keywords: Unexplained investment; Audit objection; Tax effect; Reason to believe
• Section: 143(3); 268A; 119; 147; 148

Judgement Text

ITA NO. 40/JAB/2020 (AY 2013-14) ITO V. NARAYAN MISHRA 1 IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH , JABALPUR (SMC) (THROUGH VIDEO CONFERENCING) BEFORE SH. SANJAY ARORA, HON'BLE ACCOUNTANT MEMBER ITA NO.40/JAB/2020 ASSESSMENT YEAR: 2013-14 INCOME TAX OFFICER, WARD -1, REWA VS. NARAYAN MISHRA, REWA, JABALPUR (M.P.) [PAN: ADVPM 3285H] (APPELLANT) (RESPONDENT) APPELLANT BY SH. S.K. HALDER, SR. DR RESPONDENT BY SH. ABHIJEET SHRIVASTAVA, ADV. DATE OF HEARING 30/08/2021 DATE OF PRONOUNCEMENT 31/08/2021 ORDER PER SANJAY ARORA, AM THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-1, JABALPUR ( CIT(A) FOR SHORT) DATED 11/9/2020, PARTLY ALLOWING THE ASSESSEES APPEAL CO NTESTING HIS ASSESSMENT UNDER SECTION 147 READ WITH SEC.144 OF THE INCOME T AX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR 2013-14 VIDE O RDER DATED 13/11/2019. 2. AT THE OUTSET, CONFIRMATION WAS SOUGHT BY THE BE NCH FROM SH. SRIVASTAVA, THE LD. COUNSEL FOR THE ASSESSEE, AS TO IF THE ASSE SSEE HAD FILED ANY APPEAL OR CROSS OBJECTION IN RESPECT OF THE IMPUGNED ORDER, T O WHICH HE REPLIED IN THE NEGATIVE, FURTHER CLARIFYING THAT THE SAME IS BEING CONTESTED ON MERITS, I.E., QUA EACH OF THE GROUNDS OF APPEAL ASSUMED BY THE REVENU E, WHICH ARE AS UNDER: ITA NO. 40/JAB/2020 (AY 2013-14) ITO V. NARAYAN MISHRA 2 (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.16,69, 585/- ON ACCOUNT OF UNEXPLAINED INVESTMENT. (II) THE APPEAL IS BEING FILED AGAINST FALLS UNDER EXCEP TIONAL CLAUSE OF PARA 10(C) OF THE BOARDS INSTRUCTION NO. 3/2018 DATED TO 11/0 7/2018. 3. IT WAS, TO BEGIN WITH, OBSERVED THAT THE APPEAL STANDS PREFERRED BY THE REVENUE IN VIEW OF THE EXCEPTION VIDE PARA 10(C) OF THE BOARD INSTRUCTION NO. 03/2018, DATED 11/7/2018, ISSUED U/S. 268A OF THE A CT, WHICH FORMS PART OF ITS LATEST INSTRUCTION, I.E., 17/2019, DATED 08/8/2019. SEC. 268A MANDATES FOR AN APPELLATE AUTHORITY TO, WHILE HEARING APPEALS BY TH E REVENUE BEFORE IT, HAVE REGARD TO THE MONETARY LIMITS FIXED BY THE BOARD PE R ITS INSTRUCTIONS, ORDERS OR DIRECTIONS TO THE INCOME-TAX AUTHORITIES, ISSUED FR OM TIME TO TIME FOR THE PURPOSE OF REGULATING THE FILING OF APPEALS & REFER ENCES BY THE REVENUE, AND WHICH, AS PER THE LATEST INSTRUCTION DATED 08/8/201 9 IS AT RS. 50 LACS FOR THE APPEALS BEFORE THE APPELLATE TRIBUNAL, WHILE THE TA X-EFFECT OF THE INSTANT APPEAL IS ADMITTEDLY BELOW THE SAID LIMIT. EXCEPTIONS TO T HE SAME, SO THAT APPEALS COULD BE VALIDLY FILED EVEN WHERE THEY ENTAIL A TAX-EFFEC T BELOW THE SAID LIMIT/S, ARE LISTED AT PARAS 10 & 11 TO THE INSTRUCTION DATED 11 /7/2018. PARA 10 (C) READS AS UNDER: 10. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISS UES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LE SS THAT THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT : (A) .., OR (B) .., OR (C) WHERE THE REVENUE AUDIT OBJECTION IN THE C ASE HAS BEEN ACCEPTED BY THE DEPARTMENT, OR . CLEARLY, THEREFORE, THE AUDIT OBJECTION BY THE REVE NUE AUDIT PARTY HAS TO BE ACCEPTED BY THE REVENUE FOR ITS APPEAL TO FALL WIT HIN THE AMBIT OF THE EXCEPTION STATED AT PARA 10(C) AND, ACCORDINGLY, BE ADMISSIBL E. TOWARD THIS, SH. SRIVASTAVA WOULD DRAW MY ATTENTION TO THE AUDIT OBJECTION DATE D 12/4/2016 (APB PGS. 10- ITA NO. 40/JAB/2020 (AY 2013-14) ITO V. NARAYAN MISHRA 3 12), BENEATH WHICH ITSELF THE ASSESSING OFFICER (AO ), I.E., ITO, WARD 1, REWA, HAS, VIDE HIS RESPONSE THERETO DATED 13/4/2016, STA TED THAT THE AUDIT OBJECTION IS NOT ACCEPTABLE AS THE ASSESSEE HAD EXPLAINED THE IN VESTMENT UNDER REFERENCE, I.E., FOR RS. 16.69 LACS, FOR WHICH EXPLANATION WAS SOUGHT FROM HIM, AND ADDITION QUA WHICH IS THE SUBJECT MATTER OF THE INSTANT APPEAL. HE HAS, IN FACT, HE WOULD FURTHER SUBMIT, ALSO STATED IT TO BE A CASE OF CHAN GE OF OPINION. THE AUDIT OBJECTION, HE CONCLUDED, HAS NOT BEEN ACCEPTED BY T HE AO FOR THE REVENUE TO INVOKE THE EXCEPTION U/C. 10(C) SUPRA. THE REVENUES CASE IN THIS REGARD IS THAT THE VERY FACT THAT NOTICE U/S. 148 STANDS ISSUED BY THE AO, WHICH IS ONLY AFTER RECORD ING REASONS U/S. 148(2) AND OBTAINING SANCTION FROM THE COMMISSIONER U/S. 151, IMPLIES THAT THE REVENUE HAD ACCEPTED THE AUDIT OBJECTION BY THE REVENUE AUD IT PARTY (RAP). ITS APPEAL IS THUS ADMISSIBLE UNDER EXCEPTION 10(C) SUPRA. 4. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD INSOFAR AS IS RELEVANT FOR THE REVENUES GD. # 2. THE AUDIT OBJECTION HAS BEEN GONE THROUGH. THERE IS NO REFERENCE THEREIN TO ANY MATERIAL NOT ALREADY BEFORE THE AO WHILE FRA MING THE ORIGINAL ASSESSMENT U/S. 143(3) ON 10/3/2016 WITHOUT MAKING THE IMPUGNE D ADDITION FOR RS. 16.69 LACS. TRUE, THERE IS NO DISCUSSION IN RESPECT OF TH E SAID INVESTMENT, OR EVEN A REFERENCE TO THE LETTER DATED 22/2/2016 TO THE ASSE SSEE DURING THE COURSE OF THE ORIGINAL ASSESSMENT PROCEEDINGS SEEKING EXPLANATION IN RESPECT OF THE SAID INVESTMENT, IN THE ASSESSMENT ORDER DATED 10/3/2016 , WHICH IS BROUGHT FORTH FOR THE FIRST TIME ONLY IN THE AUDIT OBJECTION DATED 12 /4/2016. THAT, HOWEVER, CANNOT BY ITSELF BE READ AS AN OMISSION BY THE AO TO CONSI DER THE ASSESSEES REPLY TO THE SAID LETTER, ALSO REFERRED TO IN THE AUDIT OBJECTIO N, THE ONUS TO SHOW WHICH (I.E., THE SAID OMISSION), WOULD, AGAIN, BE ON THE REVENUE . THE AOS COMMENTS TO THE ITA NO. 40/JAB/2020 (AY 2013-14) ITO V. NARAYAN MISHRA 4 AUDIT OBJECTION, RATHER, CLARIFY THAT TO BE NOT THE CASE AND PUT PAYS ANY CLAIM THAT THE REVENUE MAY MAKE IN THE MATTER. IT COULD BE ARGUED, AS INDEED IT WAS BEFORE ME, TH AT THE VERY FACT OF THE REVENUE HAVING ISSUED NOTICE U/S. 148 ON 29/3/2019 IS BY ITSELF A PROOF OF IT HAVING ACCEPTED THE AUDIT OBJECTION AND, THUS, FALL ING WITHIN THE EXCEPTION U/C. 10(C). THE ARGUMENT, IMPRESSIVE AT FIRST BLUSH, IS, HOWEVER, FACILE AND, IN ANY CASE, NOT BORNE OUT BY THE RECORD. THE AO IS CATEGO RICAL IN HIS COMMENTS DATED 13/4/2016 TO THE AUDIT OBJECTION, MAKING IT ABUNDAN TLY CLEAR THAT THE SAME IS UNWARRANTED INASMUCH AS THE ASSESSEE HAD EXPLAINED THE INVESTMENT UNDER REFERENCE, AND WOULD, IN ANY CASE, BE A CHANGE OF O PINION. THE SUBSEQUENT ISSUE OF THE NOTICE U/S. 148 IN MARCH, 2019, IS, THEREFOR E, AND, ON THE CONTRARY, A NON- ACCEPTANCE OF THE AOS NON-ACCEPTANCE OF THE AUDIT OBJECTION BY THE RAP , WHICH CLEARLY HAS PREVAILED IN THE MATTER LEADING T O THE ISSUE OF NOTICE U/S. 148(1) AFTER THREE YEARS OF THE RAISING OF THE AUDI T OBJECTION. THE LAW CONFERS PLENARY POWERS TO THE AO IN THE MATTER OF ASSESSMEN T, WHICH HE EXERCISED WHILE FRAMING THE ORIGINAL ASSESSMENT IN MARCH, 2016. FUR THER, IT IS ONLY ON A REASON TO BELIEVE ESCAPEMENT FROM ASSESSMENT OF ANY INCOME CHARGEABLE TO TAX THAT HE ASSUMES JURISDICTION U/S. 147 TO MAKE AN ASSESSMENT BRINGING TO TAX SUCH INCOME/S. THERE IS NO REFERENCE TO ANY SUBSEQUENT F ACTS, I.E., SUBSEQUENT TO ASSESSMENT OF MARCH, 2016, OR INFORMATION COMING TO THE POSSESSION OF THE AO, EVEN IF AVAILABLE ON RECORD THOUGH DISCOVERED LATER , I.E., AFTER 10/3/2016, GIVING RISE TO THE REASON TO BELIEVE ESCAPEMENT AFORESAID, AND WHICH IS A CONDITION PRECEDENT FOR THE ISSUE OF NOTICE U/S. 148 AND ASSU MPTION OF JURISDICTION U/S. 147. THE REASONS RECORDED U/S. 148(2) REFER TO THE AOS LETTER DATED 22/2/2016 AND THE ASSESSEES REPLY THERETO, BOTH EVENTS OCCUR RING PRIOR TO 10/3/2016, I.E., DURING THE COURSE OF THE ORIGINAL ASSESSMENT PROCEE DINGS. FURTHER, THE AOS COMMENTS TO THE AUDIT OBJECTION MAKE IT AMPLY CLEAR THAT THE ASSESSEES REPLY TO HIS LETTER DATED 22/2/2016 WAS ACCEPTED BY THE AO. THE REVENUE HAS NOT SHOWN ITA NO. 40/JAB/2020 (AY 2013-14) ITO V. NARAYAN MISHRA 5 THE SAID ACCEPTANCE TO BE INFIRM, MUCH LESS PERVERS E, EVEN AS THE COURSE AVAILABLE IN THE FORMER CASE WOULD BE A REVISION U/ S. 263. IT IS ALSO NOT THE REVENUES CASE THAT THE AOS OPINION ACCEPTING THE ASSESSEES REPLY WAS PERVERSE, I.E., A VIEW NO PERSON PROPERLY INSTRUCTE D ON FACTS AND IN LAW COULD TAKE, AS WHERE THE SAID REPLY IS IRRELEVANT OR DOES NOT MEET THE LETTER DATED 22/2/2016 BY THE AO. I AM CONSCIOUS, WHILE SO DISCU SSING, THAT THERE IS NO CHALLENGE TO THE NOTICE U/S. 148(1) BY THE ASSESSEE , WHICH ASPECT, I.E., THE VALIDITY OF THE REASONS RECORDED U/S. 148(2) OR OF THE ASSUMPTION OF JURISDICTION U/S. 147, MUST, THEREFORE, BE REGARDED AS HAVING AT TAINED FINALITY. THE PRESENT DISCUSSION ONLY SEEKS TO EMPHASIZE THE NON-SUSTAINA BILITY OF THE ARGUMENT ADVANCED BY THE LD. SR. DR INASMUCH AS THERE HAS BE EN, BOTH FACTUALLY OR LEGALLY, NO OMISSION TO CONSIDER THE ASSESSEES EXP LANATION QUA THE IMPUGNED INVESTMENT DURING THE ORIGINAL ASSESSMENT PROCEEDIN GS, NOR THE AOS VIEW IN ACCEPTING THE SAID EXPLANATION PERVERSE, IN WHICH E ITHER CASE THE AOS OBJECTION TO THE AUDIT OBJECTION WOULD BE RENDERED INVALID IN LAW. AND THE REVENUES SUBSEQUENT ACTION IN ISSUING NOTICE U/S. 148 INTERP RETED, EVEN AS ARGUED BY THE LD. SR. DR, AS AN ACCEPTANCE BY THE REVENUE OF THE REVENUE AUDIT OBJECTION. NEEDLESS TO ADD, THE REVENUE HAS NOT SHOWN ME ANY C OUNTER BY THE RAP TO THE AOS COMMENTS DATED 13/4/2016, MEETING HIS OBJECTIO N, SO AS TO EXHIBIT THEREBY THAT THE AUDIT OBJECTION WOULD SURVIVE THE AOS COM MENTS, I.E., OBTAIN DESPITE THE SAME, WHICH (COMMENTS) WOULD THUS STAND RENDERE D INCONSEQUENTIAL. EVEN AS, AS WOULD BE APPARENT, THE MATTER IS PRINCIPALLY FACTUAL, THE VIEW TAKEN IN THIS CASE IS SUPPORTED BY THE DECISION BY THE APEX COURT IN LARSEN & TOUBRO LTD. VS. STATE OF JHARKHAND (IN C.A. NO.5390 OF 2007, DATED 21/03/2017). THE REVENUES APPEAL IS THUS NOT SAVED, AS CONTENDE D, BY THE EXCEPTION LISTED UNDER PARA 10(C) OF THE BOARD INSTRUCTION U/ S. 119 R/W S. 268A DATED 11/7/2018. ITA NO. 40/JAB/2020 (AY 2013-14) ITO V. NARAYAN MISHRA 6 5. THE REVENUES APPEAL IS, ACCORDINGLY, NOT MAINT AINABLE U/S. 268A(1) OF THE ACT. I DECIDE ACCORDINGLY. 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 31, 20 21 S D/- (SANJAY ARORA) A CCOUNTANT MEMBER DATED: 31/08/2021 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT: INCOME TAX OFFICER, WARD- 1, REWA -4 86001 2. THE RESPONDENT: SHRI NARAYAN MISHRA, 9/461, NIRALA NAGAR, REWA - 486001 3. THE PR. CIT-1, JABALPUR 4. THE CIT(A)-1, JABALPUR 5. THE SR. DR, ITAT, JABALPUR 6. GUARD FILE // TRUE COPY //