The ACIT, Amritsar. V. Sh. Vikas Behal, Amritsar.

ITA 415/ASR/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0581 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-01-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 06-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIA
• Assessee Lawyers: R K MAGGO
• Keywords: Reopening of assessment; Question of law; Assessment record; Reason to believe
• Section: 148

Judgement Text

ITA NO.415(ASR)/2010 CO33(ASR)/2010 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.415(ASR)/2010 ASSESSMENT YEAR:2001-02 PAN :AALPA6298D ASSTT. COMMR. OF INCOME TAX, VS. SH. VIKAS BEHAL, CIRCLE-II, AMRITSAR. KATRA KHAZANA, AMRITSAR. (APPELLANT) (RESPONDENT) C.O. NO.33(ASR)/2010 (ARISING OUT OF ITA NO.415(ASR)/2010) ASSESSMENT YEAR: 2001-02 SH. VIKAS BEHAL, VS. ASSTT.COMMR. OF INCOME TAX, KT. KHAZARAN, AMRITSAR. CIR.II, AMRITSAR, (APPELLANT) (RESPONDENT) APPELLANT BY:SH. R.L. CHHANALIA, DR RESPONDENT BY:SH. R.K. MAGGO, CA DATE OF HEARING: 03/01/2013 DATE OF PRONOUNCEMENT:08/01/2013 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), AMRITSAR, DATED 21.07.2010 FOR THE ASSESSMENT YEAR 2001/02. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION. 2 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A), AMRITSAR HAS ERRED IN DELETING THE ADDITION OF RS.5 044942/- MADE ON ACCOUNT OF PEAK VALUE WORKED OUT ON THE BAS IS OF DEPOSITS IN DIFFERENT BANKS AND ON ACCOUNT OF COMMI SSION EARNED ON SALE OF FOOD GRAINS. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), AMRITSAR HAS ERRED IN DELETING THE ADDITION OF PEAK AMOUNT OF RS.43729861/- WHICH WAS WORKED OUT ON THE BASIS OF DEPOSITS IN PNB BATALA AND AMRITSAR AGAINST ACCOUNTS NO.276 3, 2769, 2776 AND 2754. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), AMRITSAR WAS NOT CORRECT IN DELETING THE ADDITION O F RS.6,71,956/- WHICH WAS CORRECTLY WORKED OUT @ 2% ON SALE OF FOOD GRAINS WHERE THE ASSESSEE WAS UNABLE TO PROVE THE PROFIT ON THESE TRANSACTIONS. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), AMRITSAR HAS ERRED IN HOLDING THE ASSESSEE BENAMIDA R WHEREAS HE WAS MAINTAINING FOUR UNACCOUNTED BANK A/CS IN HI S NAME I.E. A/C NO. 2763, 2769, 2776 AND 2754, PNB, BATALA RO AD, AMRITSAR. 3. IN THE C.O. THE ASSESSEE HAS RAISED FOLLOWING GR OUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND ON MERITS IN MAKING THE ADD ITION OF RS.1675848/- ON A/C OF PEAK BY COMBINING ALL THE FO UR BANK ACCOUNTS ON 31.12.2000, WHICH HAS HOWEVER NOT SUSTA INED DUE TO THE QUASHING OF THE ASSESSMENT ORDER OF ACIT BY CIT(A). 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN SUGGESTING THE APPLICATION OF NET PROFIT R ATE ON TURNOVER AFTER THE DATE OF PEAK. 3. THE ACIT HAS FILED APPEAL BEFORE HONBLE TRIBUNA L ON 06.10.2010 & HAS TAKEN VARIOUS GROUNDS THEREIN FOR WHICH THE 3 APPEAL OF REVENUE AS WELL AS CROSS OBJECTIONS MAY P LEASE BE CLUBBED, HEARD OR DECIDED TOGETHER BY THE TRIBUNAL AFTER HEARING BOTH SIDES ON ALL ISSUES. 4. THE REVENUE HAS ALSO RAISED FOLLOWING ADDITIONAL GROUNDS OF APPEAL ON 18.05.2012: (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A), AMRITSAR WAS NOT LEGALLY CORRECT IN ANNULLI NG THE ASSESSMENT ORDER PASSED BY THE A.O. BY OBSERVING TH AT THE PROCEEDINGS U/S 148 OF THE I.T.ACT, 1961, BEING INV ALID, SHOULD HAVE BEEN INITIATED AGAINST SH. GULSHAN KUMAR BHATI A, WHO WAS THE REAL BENEFICIARY AND THE OWNER OF THE INCOME AN D NOT THE ASSESSEE WITHOUT APPRECIATING THE CORRECT FACTS THA T THE ASSESSEE WAS THE OWNER OF FOUR PEAK BANK ACCOUNTS AND ALL TH E SALES PROCEEDS DEPOSITED IN THESE ACCOUNTS BELONG TO HIM AND THE ASSESSMENT WAS RIGHTLY FRAMED AGAINST HIM AND THE S AME SHOULD HAVE BEEN UPHELD. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A), AMRITSAR WAS LEGALLY WRONG IN GIVING FINDI NG THAT THE REAL BENEFICIARY WAS SHRI GULSHAN KUMAR BHATIA, WIT HOUT APPRECIATING THAT ALL THESE 4 BANK ACCOUNTS WERE IN THE NAME OF THE ASSESSEE AND THE TRANSACTIONS ENTERED INTO THES E ACCOUNTS BELONG TO HIM AND THE INCOME WAS RIGHTLY ASSESSED B Y THE A.O. IN HIS HAND. III) THE CIT(A), AMRITSAR ERRED IN LAW IN NOT CONFI RMING THE ACTION OF THE A.O. U/S 148 OF THE AT WHICH WAS BASED ON C ORRECT APPRECIATION OF FACTS BY THE AO WHICH WERE ANALYSED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE ACTION SHO ULD HAVE BEEN UPHELD. 5. THE REVENUE HAS ALSO RAISED FOLLOWING ADDITIONAL GROUNDS OF APPEAL ON 13.12.2012: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A), AMRITSAR WAS CORRECT IN ANNULLING THE ASSE SSMENT ORDER PASSED BY THE A.O. GIVING THE OBSERVATION THA T HENCE, ON 4 THIS SCORE ALSO, THE ASSESSMENT IS LIABLE TO BE QUA SHED. ON THE GROUND THAT THE AO HAS NOT PASSED THE SPEAKING ORDE R OR DISPOSING OFF THE OBJECTIONS FILED BY THE ASSESSEE AGAINST THE ISSUANCE OF NOTICE U/S 148 OF THE INCOME TAX ACT, S INCE THE A.O. HAS DULY DISPOSED OFF THE OBJECTIONS RAISED BY THE ASSESSEE VIDE LETTER DATED 22.12.2008 AND SUBSEQUENT COMPLIA NCE OF THE ASSESSEE TO THE REOPENING PROCEEDINGS U/S 148 COVER ED U/S 292BB OF THE INCOME-TAX ACT. 6. THE LD. DR, MR. R.L. CHHANALIA, READ THE ADDITI ONAL GROUNDS AND PRAYED THAT THE GROUNDS RAISED AS ADDITIONAL GROUND S GO DEEP INTO THE ROOT OF THE MATTER AND PRAYED TO ADMIT THE SAME FOR SUBSTAN TIAL JUSTICE OF THE PRESENT CASE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT 229 ITR 383 . 7. THE LD. COUNSEL FOR THE ASSESSEE, MR. R.K. MAGGO , CA AT THE OUTSET DID NOT RAISE ANY OBJECTION TO ADMIT THE ADDITIONAL GROUNDS FILED BY THE REVENUE ON 18.05.2012 & 13.12.2012. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. IN THE ADDITIONAL GROUNDS RAISED BY THE REVENUE, T HE QUESTION OF LAW ARISES FROM THE FACTS ON RECORD WHICH HAS A BEARING ON THE TAX LIABILITY OF THE ASSESSEE. THE VIEWS OF THE TRIBUNAL CANNOT BE CONF INED ONLY TO THE ISSUE ARISING OUT OF THE APPEAL BEFORE THE LD. CIT(A) IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERM AL POWER CO. LTD. VS. CIT (SUPRA) AND THEREFORE, IN VIEW OF THE SAID DECI SION OF THE HONBLE SUPREME COURT, WE ADMIT ALL THE ADDITIONAL GROUNDS RAISED BY THE REVENUE. 5 9. THE LD. DR AT THE OUTSET, ARGUED THE ADDITIONAL GROUND DATED 11/13- 12/2012 REPRODUCED HEREINABOVE THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN ANNULLING THE ASSESSMENT SINCE THE AO HAS NOT DISPO SED OFF THE OBJECTIONS OF THE ASSESSEE AGAINST THE ISSUANCE OF NOTICE U/S 148 OF THE ACT, THOUGH HE SAME WERE DISPOSED OFF VIDE LETTER DATED 22.12.2008 , COPY OF WHICH HAS BEEN PLACED ON RECORD. THE SUBSEQUENT COMPLIANCE OF THE ASSESSEE TO THE REOPENING OF ASSESSMENT U/S 148 ARE COVERED UNDER S ECTION 292BB OF THE ACT. THE LD. DR READ THE LETTER DATED 22.12.2008 SE NT BY THE ACIT, CIR.II, AMRITSAR TO THE ASSESSEE. 10. THE LD. COUNSEL FOR THE ASSESSEE, MR. R.K. MAGG O, CA INVITED OUR ATTENTION TO PB 59 TO 62, A LETTER DATED 28.07.200 8 WHICH ARE THE PRELIMINARY OBJECTIONS RAISED BY THE ASSESSEE TO NOTICE ISSUED U/S 148 OF THE ACT. HE ARGUED AND STATED THAT THE AO HAS NOT DISPOSED OFF ANY OF THE PRELIMINARY OBJECTIONS IN THE SAID LETTER 28.07.2008 WHICH WERE READ BEFORE US AT PB 59 TO 62. AS REGARDS THE DISPOSAL OF THE PRELIMINARY O BJECTIONS VIDE LETTER DATED 22.12.2008 BY THE ACIT CIR-2, AMRITSAR, THE SAID L ETTER DOES NOT SPEAK OF ANY DISPOSAL OF ANY PRELIMINARY OBJECTIONS OF THE ASSESSEES LETTER DATED 28.07.2008. 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. FOR THE SAKE OF CLARITY, WE ARE REPRODUCING LETTER DATED 28.07.2008 AVAILABLE AT PB 59 TO 62 ADDRESSED TO THE REVENUE AS UNDER: 6 DATED:28.07.2208 THE INCOME TAX OFFICER, WARD 2(2), AMRITSAR. SUB: SH.VIKAS BEHL, 1682/11, KATRA KHAZANA, GALI BA GH CHOUDHARY, AMRITSAR YOUR NOTICE U/S 148 OF THE INCOME TAX AC T, 1961. D/SIR, AS STATED IN MY EARLIER LETTER DATED 29.04.2009, T HE NOTICE ISSUED U/S 148 IS ILLEGAL AND UNJUSTIFIED, INTER-ALIA DUE TO FOLLOWING PRELIMINARY OBJECTIONS: 1. THAT THERE MUST BE A REASON TO BELIEVE IN ORD ER TO ASSUME JURISDICTION, AS PER SEVERAL SUPREME COURT DECISIO NS. IT CANNOT BE MERE SUSPICION (SHOE NATH SINGH VS. AAC (1971) 82 ITR 147 (SC). IT CANNOT BE PURELY SUBJECTIVE SATISFACTION ON THE PA RT OF THE AO. (S. NARAYANAPPA & OTHERS VS. CIT 63 ITR 219 (SC)] EXTR ANEOUS AND IRRELEVANT MATERIAL WOULD VITIATE CONCLUSION OF FA CT { CIT VS. DAULAT RAM RAWATMULL 87 ITR 349 (SC), NOT ANY AND EVERY MATERIAL, HOWEVER VAGUE AND INDEFINITE OR DISTANT, REMOTE AN D FAR FETCHED WOULD WARRANT FORMATION OF BELIEF (ITO VS. LAKHMANI MEWA L DAS 103 ITR 437 (SC). THERE IS NO SUCH REASON TO BELIEVE IN THIS CASE TO WARRANT ISSUANCE OF NOTICE U/S 147/148. 2. THAT THE AO MUST HAVE VALID REASONS OR PROPER M ATERIALS FOR FORMING THE BELIEF THAT THE APPELLANTS INCOME HAD ESCAPED ASSESSMENT AND THE AO CANNOT REOPEN THE CASE OF THE ASSESSEE JUST ON THE BASIS OF GENERALIZED INFORMATION AND GENERALIZED STATEMENT. IT APPEARS FROM THE COY OF THE REASONS THAT THE AO HAS STARTED PRO CEEDINGS U/S 147 IN THE ASSESSEES CASE ON THE BASIS OF THE REPORT OF THE ADIT (INV.) RECEIVED THROUGH ADDL. CIT, AMRITSAR. FROM THE REASONS TO BELIEVE FOR REOPENING OF THE ASSESSMENT, FURNISHED BY A.O. IT WAS ALLEGED THAT THE ASSESSEE WAS ENGAGED IN LARGE SCALE TRADING OF FOOD GRAINS AND HAD FLOATED CERTAIN FICTITIOUS FIRMS DURING A.Y. 2001-02. IT WAS FURTHER ALLEGED THAT THE ASSESSEE HAD MADE TRANSACTIONS TO THE TUNE OF RS.223597821 /- WHEREAS IN REALITY THE ASSESSEE DID TRANSACTION OF RS.3401170 2/- ONLY AND NEVER 7 FLOATED FICTIOUS FIRMS, WHICH MEANS THE AO WAS NOT HAVING ANY SPECIFIC INFORMATION ABOUT THE TRANSACTION OF THE ASSESSEE. IT HAS ALREADY BEEN HELD BY VARIOUS COURTS THAT GE NERALIZED INFORMATION AS GOT NO MEANING UNLESS THE PARTICU LAR ASSESSEE IS MENTIONED. RELIANCE IS PLACED ON THE FOLLOWING CA SE LAWS. A. 258 ITR 317 (DELHI) UNITED ELECTRICAL CO. PVT. LTD. VS. CIT. B. KWALITY DYEING WORKS VS. THAT ON ITO (1980) 3 TAXMA N 373 (P& H) FOLLOWING 103 ITR 437 (SC) OF ITO VS. LAKHMA NI MEWAL DAS WHERE IT WAS HELD THE BASIS OF SUBSEQUEN T INFORMATION THAT THE CREDITORS WERE NAME LENDER, TH E FORMATION OF BELIEF CAN NOT BE MADE THAT THE INCOME CHARGEABL E TO TAX HAD ESCAPED ASSESSMENT BECAUSE OF FAILURE TO DISCLOSE F ULLY AND TRULY ALL MATERIAL FACTS: C. 125 ITR 708 (CAL) RUNGTA SONS PVT. LTD. VS. ITO ( F OLLOWING 103 ITR 437 (SC) OF ITO VS. LAKHMANI MEWAL DAS WHER E IT WAS HELD THAT PRECONDITION FOR REOPENING OF THE ASS ESSMENT S UNDER SECTION 147(A0 WERE NOT SATISFIED AND THE REA SSESSMENT WAS NOT VALID. REASSESSMENT INCOME ESCAPING ASSE SSMENT APPELLANT USUALLY TAKING LOANS ON KHATA PETA ACCOUN TS ENTRIES IN NAMES OF THREE PARTIES IN ACCOUNTS ASSESSMENT COMPLETED SUBSEQUENT CONFESSION BY ANOTHER PERSON THAT HE WAS ONLY DOING NAME LENDING BUSINESS WITHOUT ADVANCING MONEY IN THE NAMES OF THREE PARTIES-NAME OF THE APPELLANT NOT M ENTIONED IN CONFESSION NO LIVE LINK FOR NEXUS BETWEEN MATERIA LS AND FORMATION OF BELIEF THAT INCOME HAD ESCAPED ASSESS MENT DUE TO OMISSION OR FAILURE TO DISCLOSE MATERIAL FACTS PR ECONDITION FOR REOPENING ASSESSMENT NOT SATISFIED REASSESSMENT N OT VALID. D. 122 ITR 732 (ALL) RAMJI DAS LAXMAN DAS VS. CIT WHER E IT WAS HELD THAT THE REOPENING OF ASSESSMENT U/S 147(A) WA S INVALID BECAUSE THE ENTIRE INFORMATION RECEIVED BY THE ITO , BOMBAY WAS GENERAL IN NATURE, THE STATEMENT BY THREE HUNDI BROKERS WERE EQUALLY GENERAL, THERE WAS NOTHING TO INDICATE THAT THE BANKERS REFERRED TO THE ASSESSEE AS ONE OF THE PER SON TO WHOM 8 THEY HAD LENT THEIR NAMES THE BANKERS DID NOT STATE THAT THE ACTUAL LOAN, SHOWN BY THE ASSESSEE AS HAVING BEEN ADVANCED BY THEM, WAS NOT TAKEN FROM THEM AND THE STATEMENT DI D NOT SPECIFY THE PERIOD DURING WHICH THE LENDING HAD BEE N CARRIED ON AND THEE WAS NOTHING TO INDICATE THAT STATEMENTS REFERRED TO THE ASSESSMENT YEAR 1961-62 IN PARTICULAR. E. 140 ITR 601 (MAD) CIT VS. PRAKASHAN READYMADE STORE WHERE IT WAS HELD THAT THE LETTER OF ASSESSEE DID NOT CON TAIN ANY ADMISSION THAT THE HUNDI LOANS DISCLOSED IN ITS ACC OUNTS WERE HAVALA TRANSACTIONS AND, IN THE ABSENCE OF SUCH AN ADMISSION, A FINDING THAT THE CASH CREDITS REPRESENTED THE ASSES SEES INCOME CAN BE ARRIVED AT ONLY ON THE BASIS OF MATERIALS ON RECORD. THE ONLY THING THAT WAS SAID AGAINST THE MULTANI WAS TH AT THEY WERE PERSONS INDULGING IN HAVALA TRANSACTIONS IN THE ASS ESSEES BOOKS FOR THE YEAR UNDER CONSIDERATION. FURTHER, TH ERE WAS NO PRESUMPTION THAT ALL UNDISCOUNTED HUNDIES WERE FAL SE DOCUMENTS WITHOUT EXCEPTION. IN SUCH CIRCUMSTANCES, THE TRIBUNAL WAS JUSTIFIED IN CANCELLING THE PENALTY. F. (1984) 40 CTR 15 (PATNA) CIT VS. HANUMAN AGGARWAL. IT HAS FURTHER BEEN HELD BY CALCUTTA HIGH COURT IN THE CASE OF S.P. AGGARWALLA ALIAS SUKHDEO PRASAD AGGARWALLA VS. ITO (1986) 140 ITR 1010 THAT STATEMENT BY THIRD PARTY C ANNOT FORM THE BASIS FOR REOPENING OF THE ASSESSMENT. IN THE I NSTANT CASE, IT HAS BEEN HELD THAT A MERE CONFESSIONAL STATEMENT BY A THIRD PARTY ( WHO IS LENDER OF THE ASSESSEE) THAT HE WAS A MERE NAME- LENDER AND THAT ALL HIS TRANSACTIONS OF LOANS WERE BOGUS, WOULD NOT BE SUFFICIENT TO HOLD THAT THE ASSESSEES INCOM E HAS ESCAPED ASSESSMENT. 3. THAT IT SEEMS THAT THE AO HAS NOT APPLIED HIS MIND BEFORE REOPENING THE CASE OF THE ASSESSEE. IT IS SUBMITTED THAT IN THE CASE OF SITA RAM JINDAL VS. ITO 84 ITR 162 (CAL) THE COURT HELD THAT WHERE ITO DID NOT HIMSELF APPLY HIS MIND TO ANY FACT IN ORDER TO COME TO BELI EF THAT THERE WAS OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE THE PRIMARY FACTS BUT MERELY ACTED ON THE LETTER OF ANOTHER ITO 9 ASSESSING THE FIRM IN WHICH THE ASSESSEES WIFE WAS PARTNER TO THE EFFECT THAT THE ASSESSEES WIFE WAS PARTNER TO THE EFFECT THAT THE ASSESSEES WIFE WAS BENAMIDAR OF THE ASSESSEE, THE REASSESSMENT NOTICE WAS INVALID AS THE CONDITIONS N ECESSARY FOR ISSUING SUCH NOTICE WERE NOT SATISFIED. IN THE APPE LLANTS CASE ALSO, THE AO HAS MERELY ACTED ON THE REPORT OF THE ADI (INV.) THE AO HAS NOT APPLIED HIS MIND TO THE FACTS MENTIO NED IN THE SAID REPORT TO FORM THE BELIEF THAT THE ASESSEES I NCOME HAS ESCAPED ASSESSMENT. THEREFORE, FOR THIS REASONS ALS O, THE NOTICE U/S 148 ISSUED IS INVALID. ALSO REFER TO THE UNDER NOTED CASE LAWS : 170 ITR 352 SHEO NARAIN JASWAL 269 ITR 365 F ULLER INDIA LTD. & 269 ITR 420 RAWAT MAL MOHAN LAL, WHER E IT WAS HELD THAT REASSESSMENT MADE ON DIRECTION OF SUPERIO R OFFICER IS ILLEGAL. 4. THAT THE ASSESSEE HAS MADE TRANSACTIONS OF RS.34011 702/- ONLY AND EARNED COMMISSION @ 1%, WHEREAS IT HAS BEEN ALL EGED THAT THE ASSESSEE EARNED PROFIT OF RS.4471956/- @ 2% OF THE TOTAL SALE OF FOOD GRAINS. IT HAS NEVER BEEN STATED HOW T HE LEARNED A.O. HAS TREATED THE TRANSACTIONS A SALES AND HOW THE PROFIT HAS BEEN ESTIMATED @ 2%. 5. THAT THE AO HAS STATED AS UNDER: AS SUCH AFTER CAREFULLY CONSIDERING THE REPORT REC EIVED FROM THE INVESTIGATION WING AS WELL AS MATERIAL AVAILABL E ON ASSESSMENT RECORD AND ALSO ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE NOT TO DISCLOSE FULLY AND TRULY ALL MA TERIAL FACTS NECESSARY FOR THE ASSESSMENT FOR THE A.Y. 2001-02. I HAVE THEREFORE REASONS TO BELIEVE THAT THE INCOME OF RS. 4471956/- CHARGEABLE TO TAX ALONGWITH OTHER CONCEALED INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 14 7 OF THE INCOME TAX ACT. YOUR HONOUR HAS NOT GIVEN THE DETAIL IN REGARD TO A VAILABILITY OF THE MATERIAL ON ASSESSMENT RECORD AND THAT TOO WHEN THE ASSESSEE HAS NOT EARLIER FILED RETURN OF INCOME FOR A.Y. 2001-02, AS HIS RETURN WAS BELOW THE TAXABLE LIMIT. PLEASE REFER CASE OF 10 R.P. GUPTA & SONS (HUF) VS. ITO (DELHI-TRIB) 157 TA XMAN 158. 6. THE ASSESSEE RESERVES ITS RIGHT TO RAISE OTHER OBJE CTIONS OR TO SUBMIT ANY DOCUMENTS IN THE COURSE OF THE PROCEEDIN GS. BEFORE THE START OF THE PROCEEDINGS, YOU ARE REQUES TED TO DISPOSE OFF PRELIMINARY OBJECTIONS IN VIEW OF DECIS ION GIVEN BY HONBLE SUPREME COURT IN THE CASE OF G.K.N. DRIVESH AFTS (INDIA) LTD. VS. ITO (2002) 125 TAXMAN 963. IN THE MEANWHILE YOU ARE FURTHER REQUESTED TO PROVI DE THE COPY OF THE INFORMATION RECEIVED FROM THE OFFICE OF THE ADIT (INV.) AMRITSAR VIDE LETTER NO.ADIT/INV/ASR/2006-07/2690 D T. 20.03.2007 THROUGH THE OFFICE OF THE ADDL. COMMR. O F INCOME TAX, RANGE-II, AMRITSAR, VIDE OFFICE LETTER F.NO. A DDL. CIT/R- II/ASR/06-07/3664 DT.22.03.2007 BEFORE THE START OF THE ASSESSMENT PROCEEDINGS. THANKING YOU, YOURS SINCERELY, SD/- 12. ALSO WE REPRODUCE THE LETTER DATED 22/12/2008 OF ACIT CIR.II, AMRITSAR, TO THE ASSESSEE, WHERE HE HAS DISPOSED OF THE SAID PRELIMINARY OBJECTIONS. NO.ACIT/CIR-2/ASR/2008-09 DATED:22/12/2009 TO SH.VIKAS BEHL, 1682/11, GALI BAGH CHOUDHARY, AMRITSAR. SIR, SUB; REASSESSMENT PROCEEDING FOR A.Y. 2001-02 REG ARDING- PLEASE REFER TO YOUR REPLY DATED 22.12.2008 WHEREIN YOU HAVE STATED THE NOTICE ISSUED U/S 148 IS ILLEGAL AND U NJUSTIFIED RELYING UPON 11 THE DECISION OF THE PUNJAB & HARYANA HIGH COURT REP ORTED IN 255 ITR 220. IN THIS CONTEXT, IT IS STATED THAT PROCEEDINGS U/S 147 WERE VALIDLY INITIATED ON THE BASIS OF REPORT RECEIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT. YOUR ATTENTION IS DRAWN TO THE D ECISION OF THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SH. PAL JAIN (267 ITR 540). IN THIS CASE, THEIR LORDSHIP HAVE HELD THAT T HE PROCEEDINGS INITIATED ON THE BASIS OF INFORMATION FROM THE INVE STIGATION WING ARE VALID PROCEEDINGS. IN VIEW OF THE THIS YOUR OBJECTI ON STAND DISPOSED OFF. IN YOUR REPLY REFER TO ABOVE YOU HAVE CLAIMED THAT THE ASSESSEE WAS KATCHA ARHTIYA AND YOU HAVE MENTIONED HIS INCO ME AT 1% OF TURNOVER.PLEASE JUSTIFY YOUR CLAIM ABOUT THE ASSES SEES BEING KATCH ARHTIYA AND THE DOCUMENTARY EVIDENCE AND REGISTRATI ON AS KATCH ARHTIYA. ALSO STATED IN THE ABSENCE OF THIS DOCUMEN TARY EVIDENCES. WHY YOU INCOME MAY NOT BE ASSESSED AT 2% OF TURNOVE R AS PREVIOUSLY STATED. COPY OF RELEVANT PORTION OF ADIS REPORT IS ENCLOSE D AS DESIRED. ACCORDINGLY, YOU ARE REQUESTED TO COOPERATE WITH TH E ASSESSMENT PROCEEDINGS AND FURNISH THE INFORMATION AS DESIRED VIDE THIS OFFICE LETTER DT. FOR THIS URPOSE YOUR CASE STAND FIXED FOR 29.12.200 8. NOTICES U/S 142(1)/143(2). YOURS FAITHFULLY, SD/- ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 2, AMRITSAR. 13. FROM THE PERUSAL OF THE PRELIMINARY OBJECTIONS OF THE ASSESSEE DATED 28.07.2008 AVAILABLE AT PB 59 TO 62, IT IS SEEN THA T NONE OF PRELIMINARY OBJECTION HAS BEEN DISPOSED OF BY THE AO VIDE LETTE R DATED 22.12.2008 AS IS EVIDENT FROM THE PRELIMINARY OBJECTIONS RAISED BY T HE ASSESSEE VIDE LETTER DATED 28.07.2008 & 22.12.2008 REGARDING DISPOSAL OF PRELIMINARY OBJECTIONS BY THE A.O. AS REPRODUCED HEREINABOVE. THEREFORE, THE FINDINGS OF THE LD. 12 CIT(A) ARE NOT CORRECT TO THE EXTENT THAT THE AO HA S DISPOSED OF THE PRELIMINARY OBJECTIONS OF THE ASSESSEE VIDE LETTER DATED 22.12.2008. THEREFORE, THE LD. CIT(A) IS NOT JUSTIFIED IN QUAS HING THE ASSESSMENT ONLY ON THIS ISSUE WHEN THE AO HAS NOT AT ALL DISPOSED OF T HE PRELIMINARY OBJECTIONS OF THE ASSESSEE BY PASSING THE SPEAKING ORDER. 14. IT IS NOT THE ISSUE, WHICH CAN BE COVERED U/S 2 92BB OF THE ACT BECAUSE IT IS NOT A SUBJECT MATTER OF SERVICE OF NOTICE WHI CH IN FACT HAS BEEN SERVED UPON THE ASSESSEE. THE LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESSHAFTS (INDIA) LTD. VS INCOME TA X OFFICER AND OTHERS (2003) 259 ITR 19 IS THE LAW OF THE LAND AND ESSEN TIALLY, THE AO HAD TO DISPOSE OF THE OBJECTIONS BY PASSING SPEAKING ORDER BEFORE MAKING ASSESSMENT FOR THOSE YEARS, WHICH IN THE PRESENT CA SE HAS NOT BEEN DONE. THEREFORE, IN THE FACTS AND CIRCUMSTANCES, THE WHOL E MATTER IN THE REVENUES APPEAL AND THE C.O. OF THE ASSESSEE IS SET ASIDE TO THE FILE OF THE A.O. FOR DECISION AFRESH, AFTER THE DECISION BY THE AO ON TH E PRELIMINARY OBJECTIONS OF THE ASSESSEE IN RESPONSE TO NOTICE U/S 148 PLACE D AT PB 59 TO 62, ALSO REPRODUCED HEREINABOVE BY A SPEAKING ORDER IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESSHAF TS (INDIA) LTD. VS INCOME TAX OFFICER AND OTHERS (SUPRA). THEREFORE, B OTH THE APPEALS OF THE 13 REVENUE AND C.O. OF THE ASSESSEE ARE ALLOWED FOR ST ATISTICAL PURPOSES FOR DECIDING THE ISSUE AFRESH, AS DIRECTED HEREINABOVE. 15. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE I N ITA NO.415(ASR)/2010 AND C.O. OF THE ASSESSEE IN NO. 33(ASR)2010 ARE AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8TH JANUARY, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 8 TH JANUARY, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. VIKAS BEHL, AMRITSAR. 2. THE ACIT, CIR.II, ASR. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.