ITO, New Delhi V. Smt. Shamim Dev Azad, Legal Heir of, New Delhi

ITA 4220/DEL/2010

• Counselvise Citation: 422020114 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 22-09-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 13-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Assessee Lawyers: V K AGARWAL
• Keywords: Unexplained investment
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH : G NEW DELHI) BEFORE SHRI G.E. VEERABHADRAPPA, HONBLE PRESIDENT AND SHRI A.D.JAIN, JUDICIAL MEMBER ITA NO.4220/DEL./2010 (ASSESSMENT YEAR : 2002-03) ITO, WARD 31(1), VS. SMT. SHAMIM DEV AZAD, NEW DELHI. LEGAL HEIR OF LATE MOHD. ABDULLAH D EV. 5, SOUTH AVENUE LANE, NEW DELHI. (PAN/GIR NO.AAKPA7617D) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V.K. AGARWAL, CA. REVENUE BY : SHRI SALIL MISHRA, DR ORDER PER A.D.JAIN, JM THIS IS DEPARTMENTS APPEAL FOR ASSESSMENT YEAR 200 2-03, TAKING THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.20,00,200/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE PURCHASE OF THE PROPERTY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSING OFFICER HAD NOT RECORDED HIS OWN SATISFACTION AS HE HAD NEITHER MADE SPECIFIC ENQUIRIES NOR GATHE RED EVIDENCE IN THE MATTER AND HAD MERELY RELIED ON THE INFORMATION REC EIVED FROM THE INVESTIGATION WING OF THE DEPARTMENT OVERLOOKING TH E FACT THAT INVESTIGATION WING IS ALSO AN ARM OF THE DEPARTMENT CONDUCTING ENQUIRIES. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, CIT(A) HAS ERRED IN HOLDING THAT THE DCIT. CIRCLE 31(1) DID NOT HAVE VA LID JURISDICTION OVER THE APPELLANT FOR ISSUE OF NOTICE U/S 148 AND ONLY ITO, WARD 31(1) COULD HAVE ISSUED SUCH NOTICE OVERLOOKING THE FACT THAT DCIT, CIR.31(1) HAD CONCURRENT JURISDICTION OVER THE AREAS OF ALL THE I TOS OF RANGE 31 AS PER THE JURISDICTION ORDER F.NO.JT.CIT/RANGE-31/2008-09 /217 DATED 3 RD JULY 2008 AND THE INFORMATION WAS RECEIVED ON BEHALF OF THE LEGAL HEIR HAVING JURISDICTION IN RANGE 31. 4. WITHOUT PREJUDICE TO THE ABOVE, THE CIT(A) HAS O VERLOOKED THE FACTS THAT LATE SHRI MOHAMMED ABDULLAH DEV WAS ASSESSED WITH I TO, WARD 24(3) AS I.T.A. NO.4220/DEL./2010 (A.Y. : 2002-03) 2 PER HIS OLD ADDRESS AND THE LEGAL HEIR HAD FILED A RETURN OF INCOME OF RS.497/- IN RESPONSE TO NOTICE U/S 148 ISSUED BY IT O, WARD 24(3) WITH ITO 24(3) ONLY. SINCE THE ADDRESS OF THE LEGAL HEI R WAS IN TERRITORIAL JURISDICTION OF ITO WARD 31(1), THE CASE WAS TRANSF ERRED TO HIM AFTER VALID REOPENING U/S 148 BY ITO, WARD 24(3). 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, CIT(A) HAS ERRED IN HOLDING THAT ASSESSING OFFICER HAD REOPENED THE CAS E MERELY ON SUSPICION AND INFORMATION SO RECEIVED FROM INVESTIGATION WI NG WAS DEVOID OF ANY EVIDENCE/MATERIAL OVERLOOKING THE FACT THAT INVESTI GATION WING, NEW DELHI VIDE ITS REPORT F.NO.ITO(INV.)/U1(2)2008-09/470 DAT ED 24.03.2009 ADDRESSED TO ITO WARD 24(3), NEW DELHI, HAD GIVEN A DETAILED REPORT IN THE CASE. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, CIT(A) HAS ERRED IN HOLDING THE METHOD OF VALUATION OF PROPERTY BY DVO FAULTY AND ALSO THAT THE DVO HAD NOT GIVEN OPPORTUNITY TO THE ASSESSEE O VERLOOKING THE FAT THAT DVO HAD CORRECTLY VALUED THE PROPERTY AND THE ASSES SEE WAS GIVEN MANY OPPORTUNITIES DURING ASSESSMENT PROCEEDINGS. 2. AT THE OUTSET, THE LD.AR OF THE ASSESSEE HAS CON TENDED THAT THE REASONS FOR THE REOPENING OF THE ASSESSMENT WERE CONVEYED TO THE AS SESSEE ON 09.10.2009, I.E., BEYOND SIX YEARS FROM THE END OF THE ASSESSMENT YEAR UNDER CONSIDERATION (ASSESSMENT YEAR 2002-03) I.E., 31.3.2003. IT HAS BEEN CONTENDED T HAT THE DELHI BENCH OF THE TRIBUNAL, IN THE CASE OF BALWANT RAI WADHWA VS. ITO, VIDE ORDE R DATED 14.01.2011 (COPY PLACED ON RECORD) IN I.T.A. NO.4806/DEL./10, HAS HELD THAT IF REASONS FOR THE REOPENING ARE NOT SUPPLIED TO THE ASSESSEE BEFORE THE EXPIRY OF SIX YEARS, THE NOTICE U/S 148 OF THE I.T. ACT, 1961 IS NOT VALID. IT HAS BEEN CONTENDED THAT IN K EEPING WITH THE RATIO OF BALWANT RAI WADHWA VS. ITO (SUPRA), SINCE THE REASONS FOR THE REOPENING OF THE COMPLETED ASSESSMENT IN THE PRESENT CASE WERE CONVEYED TO THE ASSESSEE AFTER THE EXPIRY OF SIX YEARS FROM THE END OF THE YEAR UNDER CONSIDERATION, HERE TOO, THE NOTICE U/S 148 OF THE ACT IS INVALID AND IT BE DECLARED SO. 2. ON THE OTHER HAND, THE LD. DR. HAS CONTENDED TH AT IN THE PRESENT CASE, THE ASSESSMENT WAS COMPLETED UNDER SECTIONS 147/143(3) OF THE ACT, ON 29.12.2009; THAT THE REASONS FOR THE REOPENING OF THE COMPLETED ASSESSME NT ADMITTEDLY WERE SUPPLIED TO THE ASSESSEE ON 09.10.2009, IN THE COURSE OF THE ASSESS MENT PROCEEDINGS; THAT THEREFORE, THE REASONS WERE SUPPLIED TO THE ASSESSEE NEARLY THREE MONTHS PRIOR TO THE COMPLETION OF THE ASSESSMENT, ALLOWING HIM ADEQUATE TIME TO FURNISH H IS OBJECTIONS TO THE VALIDITY OF THE I.T.A. NO.4220/DEL./2010 (A.Y. : 2002-03) 3 REOPENING PROCEEDINGS; THAT THE ASSESSEE FURNISHED HIS OBJECTIONS TO THE VALIDITY OF THE REOPENING PROCEEDINGS VIDE LETTER DATED 5.11.2009; THAT THE OBJECTIONS WERE DULY DISPOSED OF BY THE ASSESSING OFFICER BY VIRTUE OF A SPEAKING ORDER DATED 12.11.2009; THAT IN BALWANT RAI WADHWA VS. ITO (SUPRA), THE TRIBUNAL HAS RELIED ON : (I) GKN DRIVESHAFTS (INDIA) LTD. VS. ITO, 259 I.T. R. 19(SC); AND (II) HARYANA ACRYLIC MANUFACTURING CO. VS. CIT, 308 I.T.R. 38(DEL.); THAT THE RATIOS OF THE SAID JUDGMENTS ARE NOT APPLI CABLE TO THE PRESENT CASE; THAT THE REASONS RECORDED WERE DULY SUPPLIED TO THE ASSESSEE WITHIN A REASONABLE TIME PERIOD; THAT BESIDES, THE OBJECTIONS RAISED BY THE ASSESSEE WERE ALSO DIS POSED OF BY THE ASSESSING OFFICER BY HIS SPEAKING ORDER; AND THAT THEREFORE, THE OBJECTI ON OF THE ASSESSEE IN THIS REGARD IS NOT MAINTAINABLE AND IT BE NOT ENTERTAINED. 3. WE HAVE HEARD THE PARTIES ON THIS ISSUE. IN BA LWANT RAI WADHWA VS. ITO (SUPRA), WHILE HOLDING THAT IF THE REASONS FOR REOP ENING ARE NOT SERVED ON THE ASSESSEE WITHIN SIX YEARS FROM THE END OF THE CONCERNED ASSE SSMENT YEAR, THE REOPENING IS VOID, THE TRIBUNAL PLACED RELIANCE ON HARYANA ACRYLIC MA NUFACTURING CO. (SUPRA), WHEREIN IT WAS HELD THAT A NOTICE U/S 148 OF THE ACT IS TO BE SERVED WITHIN SIX YEARS AND THE REASONS RECORDED BY THE ASSESSING OFFICER WOULD GO HAND IN HAND WITH SUCH NOTICE; AND THAT IF THE REASONS ARE NOT SUPPLIED TO THE ASSESSEE WITHIN THE PERIOD OF SIX YEARS FROM THE END OF THE CONCERNED ASSESSMENT YEAR, IT WOULD BE CONSTRUED TH AT THE ASSESSMENT HAD NOT BEEN VALIDLY REOPENED. WHILE MAKING THESE OBSERVATIONS, THE HONBLE HIGH COURT FOLLOWED THE SUPREME COURT JUDGMENT IN THE CASE OF GKN DRIV ERSHAFTS (INDIA) LTD. (SUPRA). 4. THE DEPARTMENT SEEKS TO CONTEND THAT THE FACTS O F THE PRESENT CASE ARE DIFFERENT FORM THOSE IN HARYANA ACRYLIC MANUFACTURING CO. ( SUPRA), SINCE THE REASONS SUPPLIED TO THE ASSESSEE IN THAT CASE WERE DIFFERENT FROM TH E REASONS WHICH WERE PURPORTEDLY RECORDED IN THE COUNTER AFFIDAVIT FILED BEFORE THE HONBLE HIGH COURT; THAT WHEREAS IN THE REASONS SUPPLIED TO THE ASSESSEE IN THAT CASE, THER E WAS NO MENTION OF THE ALLEGATION THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS, IN THE REASONS SHOWN IN THE COUNTER AFFIDAVIT FILED BEFORE THE HONBLE HIGH COURT, THERE WAS A SPECIFIC ALLEGATION THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS; THAT IT WAS IN THESE CIRCUMSTANCES THAT IN HARYANA ACRYLIC MANUFACTURING CO. (SUPRA), IT WAS HELD TO THE EFFECT THAT THE EXPRESSION WITHIN A I.T.A. NO.4220/DEL./2010 (A.Y. : 2002-03) 4 REASONABLE PERIOD OF TIME COULD NOT BE STRETCHED T O BEYOND SIX YEARS, AS STIPULATED IN SECTION 149 OF THE ACT. 5. WE ARE NOT IMPRESSED BY THE CASE SOUGHT TO BE SE T UP ON BEHALF OF THE DEPARTMENT. UNDENIABLY, THE REASONS FOR REOPENING THE COMPLETED ASSESSMENT OF THE ASSESSEE WERE SUPPLIED TO THE ASSESSEE BEYOND SIX YEARS FROM THE END OF THE ASSESSMENT YEAR UNDER CONSIDERATION. IN HARYANA ACRYLIC MANUFACTURING CO. (SUPRA), THE RATIO LAID DOWN IS THAT IF THE REASONS ARE SUPPLIED TO THE ASSESSEE BE YOND A PERIOD OF SIX YEAR FROM THE END OF THE CONCERNED ASSESSMENT YEAR, THE REOPENING OF THE COMPLETED ASSESSMENT IS VOID. THE DEPARTMENT HAS REMAINED UNABLE TO WALK OUT OF THE S AID RATIO, WHICH HOLDS GOOD SQUARELY IN THE PRESENT CASE ALSO. OBVIOUSLY, THE ASSESSING OFFICER CANNOT BE ALLOWED TIME AD INFINITUM TO REOPEN A COMPLETED ASSESSMENT. SUCH R EOPENING, EVEN AS PER THE PROVISIONS OF SECTION 149 OF THE ACT CAN BE BROUGHT ABOUT WITH IN SIX YEARS FROM THE END OF THE ASSESSMENT YEAR CONCERNED, WHICH HAS BEEN TAKEN TO BE A REASONABLE PERIOD OF TIME FOR THE PURPOSE. NOTWITHSTANDING THE FACT THAT IN THE P RESENT CASE, THE REASONS WERE SUPPLIED TO THE ASSESSEE ABOUT THREE MONTHS PERIOD TO THE C OMPLETION OF THE ASSESSMENT AND THE OBJECTIONS RAISED BY THE ASSESSEE WERE DISPOSED OF BY WAY OF A SPEAKING ORDER. 6. IN THIS VIEW OF THE MATTER, THE ASSESSEE IS FOUN D TO BE JUSTIFIED IN HIS GRIEVANCE THAT SINCE THE REASONS FOR THE REOPENING OF THE COMPLETE D ASSESSMENT WERE SUPPLIED TO HIM BEYOND THE PERIOD OF SIX YEARS FROM THE END OF THE ASSESSMENT YEAR UNDER CONSIDERATION, THE REOPENING IS INVALID, AS HELD IN HARYANA ACRYL IC MANUFACTURING CO. (SUPRA), FOLLOWED IN BALWANT RAI WADHWA VS. ITO (SUPRA). 7. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE N O LONGER SURVIVE IN THE FACE OF THE REOPENING ITSELF HAVING BEEN HELD TO BE INVALID . AS SUCH, THE GROUNDS RAISED BY THE DEPARTMENT ARE NOT REQUIRED TO BE GONE INTO AND WE ARE NOT DOING SO. 8. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED. 4. ORDER PRONOUNCED IN OPEN COURT ON 03.01.2012. SD/- SD/- (G.E. VEERABHADRAPPA) (A.D. JAIN) PRESIDENT JUDICIAL MEMBER. DATED, 03.01.2012. . *SKB* I.T.A. NO.4220/DEL./2010 (A.Y. : 2002-03) 5 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A)-XXI, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. BY ORDER (ITAT, NEW DELHI). I.T.A. NO.4220/DEL./2010 (A.Y. : 2002-03) 6