Vikas Gupta, New Delhi V. ITO, New Delhi

ITA 4228/DEL/2010

• Counselvise Citation: 422820114 RSA 2010
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 27-11-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 14-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SYAMAL DUTTA
• Keywords: Gift; Income from undisclosed sources; Assessment record; Reason to believe
• Section: 147; 68; 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H : NEW DELHI BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER ITA NO.4228/DEL/2010 ASSESSMENT YEAR : 2005-06 SHRI VIKAS GUPTA, D-10, KAILASH COLONY, NEW DELHI 110 048. PAN : ACVPG0316J. VS. INCOME TAX OFFICER, WARD-34(2), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRAKASH CHAND YADAV, ADVOCATE. RESPONDENT BY : SHRI SYAMAL DUTTA, SR.DR. ORDER PER JOGINDER SINGH, JM : THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 14 DECEMBER, 2009 PASSED BY THE LEARNED FIRST APPELLATE AUTHORITY, NEW DELHI. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT THE LD.CIT(APPEAL) HAS ERRED ON FACTS AND IN LAW IN SUSTAINING THE REOPENING OF THE ASSESSMENT U/S 148. 2 ITA-4228/DEL/2010 2. THAT THE LD.CIT(APPEAL) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS OF RS.10,00,000/- MADE BY THE A.O. ON ACCOUNT OF ALLEGED BOGUS ENTRIES RECEIVED AS GIFT. 3. THAT THE LD.CIT(APPEAL) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS OF RS.5,00,000/- MADE BY THE A.O. ON ACCOUNT OF INCOME FROM UNDISCLOSED SOURCES. 4. THAT THE LD.CIT(APPEAL) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS OF RS.15,00,000/- MADE BY THE A.O. INVOKING THE PROVISIONS OF SECTION 68 OF THE INCOME TAX ACT. 5. THAT THE IMPUGNED APPELLATE ORDER IS ARBITRARY, ILLEGAL, BA D IN LAW AND IN VIOLATION OF RUDIMENTARY PRINCIPLES OF CONTEMPORARY JURISPRUDENCE. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD/ALTER ANY/ALL GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 2. DURING HEARING OF THIS APPEAL, WE HAVE HEARD SHRI PRAKASH CHAND YADAV, LEARNED COUNSEL FOR THE ASSESSEE AND SHRI SHYAMAL DUTTA , LEARNED SR.DR. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSESSEE RAI SED A PLEA THAT NO VALID SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER. OUR ATTENTION WAS INVITED TO THE ORDER SHEET ENTRY DATED 5 DECEMBER, 2011 WHEREIN THE HEARING WAS ADJOURNED AT THE REQUEST OF THE LEARNED DR AND THE LEARNED DR WAS DIRECTED TO PRODUCE THE ASSESSMENT RECORD ALONGWITH REASONS RECORDED. THE LEARNED SR.DR PRODUCED THE RECORD AND CLAIMED THAT REASONS HAVE BEEN 3 ITA-4228/DEL/2010 RECORDED THEREIN. WE FOUND THAT ON THE REASONS RECORDED BY THE ASSE SSING OFFICER, EVEN THERE WAS NO SIGNATURE OF THE ASSESSING OFFICER. THEREFOR E, IT WAS ARGUED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT FIRSTLY THE REASONS ARE NOT RECORDED AS PER THE PROVISIONS OF THE ACT AND SECONDLY, IN THE ABSENCE OF ANY SIGNATURE OF THE COMPETENT AUTHORIZED OFFICER, IT IS MERELY A DUMB DOCUMENT. THE BENCH SPECIFICALLY ASKED THE LEARNED SR.DR WHETH ER THERE IS ANY DOCUMENT IN THE FILE OF THE DEPARTMENT HAVING/BEARING THE SIGNATURE OF THE ASSESSING OFFICER. IT WAS SPECIFICALLY STATED BY THE LEARNED SR.D R THAT THERE IS NO OTHER DOCUMENT IN THE FILE BEARING THE SIGNATURE OF THE ASSESSING OFFICER ON THE REASONS RECORDED. THE COPY OF THE DOCUMENT WAS ALSO PERUSED BY THE BENCH AND IT WAS IN FACT FOUND THAT THERE WAS NO SIGNATU RE OF THE ASSESSING OFFICER ON THE DOCUMENT WHICH WAS SHOWN BY THE LEARNED SR.DR . 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD AVAILABLE ON THE FILE. IF THE LANGUAGE USED IN SECTION 147 OF THE ACT IS ANALYZED, IT HAS BEEN SPECIFICALLY MENTIONED THAT IF THE ASSESSIN G OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX WHICH HAS E SCAPED ASSESSMENT .., HE MAY ASSESS OR REASSESS SUCH INCOME. HOWEVER, ON THE SATISFACTION/REASONS RECORDED BY THE ASSESSING OFFICER EVEN THERE ARE NO SIGNATURES. IN SUCH A SITUATION, IT IS CLEAR THAT SUCH SATISFACT ION WAS NOT VALIDLY RECORDED BY THE ASSESSING OFFICER. THE LEARNED CIT(A) AT PAGE 4 OF THE IMPUGNED ORDER HAS MENTIONED THAT NOTICE U/S 148 WAS ISSUED BY THE 4 ITA-4228/DEL/2010 ASSESSING OFFICER AFTER RECORDING THE REASONS. HOWEVER, AS MENTIONED E ARLIER, WE ARE SATISFIED THAT THE REASONS HAVE NOT BEEN VALIDLY RECORDED . THE IMPORTANT WORDS USED UNDER SECTION 147 ARE HAS REASON TO BELIEVE AND THESE WORDS ARE STRONGER THAN THE WORDS IS SATISFIED. THE BELIEF ENTERTAINED BY THE ITO MUST NOT BE ARBITRARY OR IRRATIONAL. THE RECORDI NG OF REASONS IS NOT AN IDLE FORMALITY BUT IT IS A MANDATORY REQUIREMENT OF THE ST ATUTE CASTING A DUTY AND OBLIGATION ON THE ITO TO RECORD THE REASONS FOR ISSUING A NOTI CE FOR REOPENING THE ASSESSMENT. OUR VIEW IS SUPPORTED BY THE DECISION IN T HE CASE OF EAST COAST COMMERCIAL CO.LTD. VS. ITO 128 ITR 326 (CALCUTTA ), CIT VS. T.R.RAJKUMARI 96 ITR 78 (MADRAS) AND CIT VS. THAKUR LAL 132 ITR 398 (MP). ON A PLAIN READING OF SECTION 148(2) OF THE ACT, THE LEGISLATIVE MANDATE WHICH ONE DISCERNS IS THAT BEFORE ISSUING ANY NOTICE U/S 148, THE ASSESSING OFFICER IS TO RECORD THE REASONS. WE ARE OF THE CONSIDERED OPINION THAT A NOTI CE U/S 148 WOULD BE INVALID IF IT DOES NOT SPECIFY THE CORRECT ASSESSMENT Y EAR OR IS NOT SIGNED OR IS ISSUED TO A DEAD MAN. OUR VIEW IS SUPPORTED BY THE DE CISION IN THE CASE OF MOOL CHAND RAMPURIYA VS. ITO 252 ITR 758 (CAL CUTTA). IN THE CASE OF B.K.GOOYEE VS. CIT 62 ITR 109, THE HONBLE CALCUTTA HIGH COURT CLEARLY HELD THAT THE NOTICE NOT CONTAINING THE SIGNATURE OF THE ITO IS INVALID. AS THE LEARNED SR.DR FAIRLY AGREED THAT THE SO-CALLED REASONS RECORDED BY THE ITO ARE NOT BEARING THE SIGNATURE, THEREFORE, THE RATIO LAI D DOWN IN THE AFORESAID CASES CLEARLY GOES AGAINST THE REVENUE. THEREFORE, WIT HOUT GOING 5 ITA-4228/DEL/2010 INTO THE MERITS OF THE APPEAL ON THIS LEGAL ISSUE, WE DECIDE IN F AVOUR OF THE ASSESSEE AS THE ASSESSMENT WAS NOT VALIDLY FRAMED. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 7 DECEMBER, 2012. SD/- SD/- (B.C.MEENA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 07.12.2012 VK. COPY FORWARDED TO: - 1. APPELLANT : SHRI VIKAS GUPTA, D-10, KAILASH COLONY, NEW DELHI 110 048. 2. RESPONDENT : INCOME TAX OFFICER, WARD-34(2), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR