Sh. Piara Singh Bhandal, Kapurthala V. The Income-tax Officer, Kapurthala-II

ITA 423/ASR/2009

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0775 (ITAT-AMRITSAR)
• Duration Of Justice: 6 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-05-2016
• Assessment Year: 1999-2000
• Appeal Filed On: 07-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMALENDU NATH MISRA
• Assessee Lawyers: RAVISH SUD
• Keywords: Unexplained investment; Opportunity of being heard; Additional evidence; Assessment record
• Section: 142(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.423(ASR)/2009 ASSESSMENT YEAR:1999-2000 PAN: BIDPS7552P SHRI PIARA SINGH BHANDAL VS. INCOME TAX OFFICER, VASANT VIHAR, KAPURTHALA-II. KAPURTHALA. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. RAVISH SUD, ADVOCATE RESPONDENT BY: SH. AMALENDU NATH MISRA DATE OF HEARING: 10/05/2016 DATE OF PRONOUNCEMENT: 16 /05/2016 ORDER PER A.D. JAIN, JM: THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 1999-2000, AGAINST THE ORDER DATED 07.07.2009, PASSED BY THE LD. CIT(A), JALADHAR, CONTENDING THAT THE LD. CIT(A) HAS ERRED IN NOT ALL OWING ASSESSEES APPLICATION FOR ADDITIONAL EVIDENCE AND IN SUSTAINI NG THE ADDITION OF RS.10,50,000/-. 2. EARLIER, THIS APPEAL OF THE ASSESSEE WAS DISMISS ED IN LIMINE BY THE BENCH, VIDE ORDER DATED 12.11.2009. THE SAME WAS RE CALLED BY THE BENCH, VIDE ORDER DATED 11.04.2014 ON BEING SATISFI ED THAT THE ASSESSEE HAD EXPLAINED REASONABLE AND SUFFICIENT CAUSE FOR NOT ATTENDING THE HEARING ON 12.11.2009. ITA NO.423(ASR)/2009 ASSESSMENT YEAR: 1999-2000 2 3. THE FACTS ARE THAT THE AO NOTED THAT THE ASSESSE E HAD MADE PAYMENT OF RS.10,50,000/- DURING THE RELEVANT PREVI OUS YEAR. HOWEVER, INSPITE OF SEVERAL NOTICES AND QUESTIONNAIRE ISSUED , THE ASSESSEE DID NOT EXPLAIN THE SOURCE OF THIS INVESTMENT. THE AO, THE REFORE, ADDED THE SUM OF RS.10,50,000/- AS UNEXPLAINED INVESTMENT MADE B Y THE ASSESSEE. 4. BEFORE THE LD. CIT(A), THE ASSESSEE FILED AN APP LICATION UNDER RULE 46A OF THE INCOME TAX RULES, 1962, SEEKING TO PRODU CE EVIDENCE EXPLAINING THE SOURCE OF PAYMENT OF RS.10,50,000/- AS LEASE MONEY REGARDING AGRICULTURAL LAND. THE LD. CIT(A) REJECTE D THE APPLICATION FILED BY THE ASSESSEE FOR ADMISSION OF ADDITIONAL EVIDENC E AND UPHELD THE ADDITION OF RS.10,50,000/-. 5. BEFORE US, THE ASSESSEE HAS FILED AN APPLICATIO N FOR ADDITIONAL EVIDENCE, SEEKING TO FILE COPY OF ACCOUNT OF THE A SSESSEE IN THE BOOKS OF M/S. JANTA COMMISSIONER AGENTS, MANDI BHANDAL BET, KAURTHALA, FOR THE F.Y. 1998-99 RELEVANT TO ASSESSMENT YEAR 1999-2000 AND A COPY OF JAMABANDI WITH REGARD TO AGRICULTURAL LAND OWNED BY AND UNDER CULTIVATION OF THE ASSESSEE. IT HAS BEEN CONTENDED IN THE APPLICATION FOR ADDITIONAL EVIDENCE THAT THE ASSESSEE ALONGWITH HI S FAMILY HAD BEEN RESIDING IN THE U.K. AT THE TIME WHEN THE NOTICE U /S 148 DATED 28.03.2006 AND SUBSEQUENT NOTICES U/S 142(1) WERE I SSUED AND THEREAFTER WERE STATED TO HAVE BEEN SERVED BY AFFIX TURE. THEREFORE, THE ASSESSEE BEING UNAWARE OF THE IMPUGNED PROCEEDINGS, COULD NOT COMPLY TO THE SAID NOTICES. HOWEVER, IT WAS ONLY WHEN THE ASSESSEE, WHO WAS ON ITA NO.423(ASR)/2009 ASSESSMENT YEAR: 1999-2000 3 A VISIT TO INDIA, WAS SERVED WITH A NOTICE U/S 142( 1), DATED 04.10.2006, FIXING THE CASE FOR 11.10.2006, THAT HE IMMEDIATELY ENGAGED THE SERVICES OF A COUNSEL AND APPEARED BEFORE THE AO ON 11.10.20 06 AND REQUESTED THAT AS THE ISSUE PERTAINED TO A PERIOD ABOUT MORE THAN 7 YEARS BACK, I.E, F.Y. 1998-99, SOME MORE TIME MAY BE ALLOWED FOR PLA CING ON RECORD THE REQUISITE INFORMATION. HOWEVER, THE AO, WITHOUT AFF ORDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE, ADJOURNED THE MATTER F OR THE NEXT DAY, I.E., FOR 12.10.2006 AND FRAMED THE ASSESSMENT ON 16.10.2 006. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS REITERATED THE AFORESAID CONTENTS OF THE APPLICATION FOR ADDITIONAL EVIDENCE . 7. THE LD. DR, ON THE OTHER HAND, HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDER. 8. WHILE PASSING THE IMPUGNED ORDER, THE LD. CIT(A) HAS OBSERVED AS FOLLOWS: 2.6. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPE LLANT CAREFULLY AND HAVE ALSO PERUSED THE ASSESSMENT RECORD. THE DE TAILS OF THE OPPORTUNITIES PROVIDED TO THE APPELLANT HAVE BEEN D ETAILED IN THE ASSESSMENT ORDER. IT IS SEEN THAT AFTER THE ISSUE O F NOTICE U/S 148, THE AO ISSUED A LETTER TO THE APPELLANT ALONG WITH NOTICE U/S 142(1) ON 15-5-2006. IN THIS LETTER IT WAS INFORMED THAT T HE APPELLANT WAS STATED TO HAVE TAKEN LAND ON LEASE VIDE AGREEMENT D ATED 20-11- 1998 FOR CONSIDERATION OF RS. 10,50,000/- AND THAT HE HA D CONSTRUCTED A KOTHI WITH SUBSTANTIAL INVESTMENT. TH E AO STATED IN THIS LETTER THAT IT WAS BELIEVED THAT INCOME OF THI S AMOUNT HAD ESCAPED ASSESSMENT AND THAT IF NOTHING WAS HEARD FR OM THE ASSESSEE IT WOULD BE PRESUMED THAT HE HAD NOTHING T O SAY IN THIS MATTER. THIS NOTICE AND LETTER WERE SERVED ON THE A PPELLANT. THERE WAS NO COMPLIANCE TO THIS LETTER AND-THE NOTICE. FU RTHER NOTICES AND LETTERS WERE ISSUED BY THE AO ON 5-7-2006 AND O N 22-8-2006 INFORMING THAT THE ASSESSMENT WAS LIKELY TO BE COMP LETED U/S 144. THERE WAS NO COMPLIANCE TO THESE NOTICES ALSO. EVEN TUALLY, A NOTICE DATED 1-9-2006 WAS SERVED ON THE ASSESSEE AND THE M ATTER WAS FIXED ON 2-10-2006. THE AO, REALIZING HIS MISTAKE T HAT 2-10-2006 ITA NO.423(ASR)/2009 ASSESSMENT YEAR: 1999-2000 4 WAS HOLIDAY, REFIXED THE HEARING ON 3-10-2006. NONE ATTENDED ON THIS DATE ALSO. THE AO ISSUED A LETTER DATED 4-10-2 006 TO THE ASSESSEE INTIMATING THE PROPOSED ADDITIONS SINCE NO RESPONSE HAD BEEN RECEIVED TO HIS QUESTIONNAIRES. HE FIXED THE C ASE FOR HEARING ON 1 1-10-2006. ON 11-10-2006 THE ASSESSEE ATTENDED BEFORE THE AO ALONG WITH HIS COUNSEL. NEITHER THE RETURN OF IN COME WAS FURNISHED NOR REPLY TO THE SHOW CAUSE NOTICE WAS GI VEN. ON THEIR REQUEST THE CASE WAS ADJOURNED TO 12-10-2006. THERE WAS NO COMPLIANCE ON 12-10-2006. THE ASSESSMENT WAS THEREA FTER COMPLETED BY THE AO ON 16.10.2006. 2.7 THE SEQUENCE OF EVENTS SHOWS THAT THE AO GAVE A NUM BER OF NOTICES AND OPPORTUNITIES TO THE APPELLANT. HOWEVER , NEITHER DID THE APPELLANT FURNISH RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148 NOR DID HE REPLY TO THE SPECIFIC QUERIES RAISED BY THE APPELLANT. SUFFICIENT OPPORTUNITY WAS GIVEN BY THE AO SINCE A QUESTIONNAIRE WAS SERVED ON THE APPELLANT IN MAY, 2006 AND THE AS SESSMENT WAS COMPLETED IN OCTOBER, 2006. EVEN IN THE APPLICATION MADE UNDER RULE 46A, THE APPELLANT HAS NOT GIVEN ANY SPECIFIC REASON FOR ADMISSION OF ADDITIONAL EVIDENCE EXCEPT STATING THA T EFFECTIVE OPPORTUNITY OF BEING HEARD WAS NOT PROVIDED. I DO N OT ACCEPT THIS CONTENTION OF THE APPELLANT. THE NOTICES FIXING HEA RING IN MAY, 2006 AND IN OCTOBER, 2006 WERE SERVED ON THE APPELL ANT HIMSELF, BUT THERE WAS NO COMPLIANCE ON THE APPOINTED DATES. THERE WAS NO COMPLIANCE TO THE REQUIREMENTS EVEN ON 12-10-2006. SUFFICIENT OPPORTUNITY WAS, THUS, PROVIDED BY THE AO TO THE AS SESSEE DURING THE ASSESSMENT PROCEEDINGS. RULE 46A PROVIDES THAT ADDITIONAL EVIDENCE SOUGHT TO BE ADDUCED BY THE ASSESSEE MAY B E ADMITTED ONLY IN SPECIFIED CIRCUMSTANCES. THE AO HAS NOT REF USED TO ACCEPT ANY EVIDENCE SOUGHT TO BE FURNISHED BEFORE HIM. THE APPELLANT HAS STATED THE CAUSE WHICH PREVENTED HIM FOR FURNISHING THE EVIDENCE NOW SOUGHT TO BE ADMITTED BEFORE THE AO. UNDER THE CIRCUMSTANCES, I DO NOT ADMIT THE ADDITIONAL EVIDEN CE SOUGHT TO BE ADMITTED BY THE APPELLANT BEFORE ME SINCE THE CONDI TIONS OF RULE 46A ARE NOT SATISFIED. 2.8. THE APPELLANTS CONTENTION THAT PAYMENT OF RS. 10,50,000/- WAS MADE FROM HIS AGRICULTURAL INCOME IS NOT SUPPOR TED BY ANY EVIDENCE. THE PAYMENT OF RS. 10,50,000/- WAS MADE B Y THE APPELLANT UNDER AGREEMENT DATED 20-11-1998 DURING F INANCIAL YEAR 1998-99. THE ID. AR HAS SUBMITTED THAT MONEY WAS RE CEIVED FROM THE COMMISSION AGENTS AS AND WHEN REQUIRED. HOWEVER , THERE IS NO EVIDENCE TO SUPPORT THIS CONTENTION. EVEN BEFORE TH E UNDERSIGNED THE APPELLANT HAS PRODUCED EVIDENCE IN TRANCHES (WH ICH HAVE NOT BEEN ADMITTED FOR THE REASONS DISCUSSED ABOVE). SIN CE THE PAYMENT OF RS. 10,50,000/- IS EVIDENCED BY AN AGREEMENT ON RECORD AND HAS ITA NO.423(ASR)/2009 ASSESSMENT YEAR: 1999-2000 5 NOT BEEN DENIED BY THE APPELLANT, BUT THERE IS NOTH ING TO SHOW THE SOURCE OF THE PAYMENT OF THIS SUM OF RS. 10,50,000/ - BY THE APPELLANT, I AM OF THE OPINION THAT THE ADDITION OF THIS AMOUNT HAS RIGHTLY BEEN MADE BY THE AO AS UNEXPLAINED INVESTME NT, AND THIS ADDITION DOES NOT CALL FOR ANY INTERFERENCE. THIS A DDITION IS, THEREFORE, UPHELD. THIS GROUND OF APPEAL IS DISMISS ED. 9. IT IS SEEN THAT AS PER THE RECORD, THE NOTICE U/ S 142(1) OF THE ACT WAS ISSUED TO THE ASSESSEE ON 15.05.2006. THE IMPUG NED ORDER, HOWEVER, DOES NOT MENTION DATE OF SERVICE THEREOF. SIMILAR I S THE POSITION REGARDING NOTICES DATED 05.07.2006 AND 18/22.08.200 6. THESE NOTICES ARE ALSO NOTED IN THE IMPUGNED ORDER, AS ISSUED AND THERE IS NOTHING REGARDING SERVICE THEREOF. ON THE OTHER HAND, THE A SSESSEE HAS STATED THAT HE WAS RESIDING IN THE U.K. AT THE TIME WHEN N OTICE U/S 148 OF THE ACT, DATED 28.03.2006 AND SUBSEQUENT NOTICES U/S 14 2(1) WERE ISSUED AND WERE STATED TO BE SERVED BY AFFIXTURE; THAT SI NCE THE ASSESSEE WAS NOT AVAILABLE IN INDIA, HE WAS UNAWARE OF THE IMPUG NED PROCEEDINGS AND THEREFORE, HE COULD NOT COMPLY WITH THE SAID NOTICE S; THAT IT WAS ONLY WHEN THE ASSESSEE, WHO WAS ON A VISIT TO INDIA, WA S SERVED WITH A NOTICE DATED 04.10.2005, UNDER SECTION 142(1); THAT HE IMM EDIATELY ENGAGED A COUNSEL AND APPEARED BEFORE THE AO ON 11.10.2006 A ND REQUESTED THAT SINCE THE ISSUE PERTAINED TO A PERIOD OF ABOUT MOR E THAN 7 YEARS BACK, I.E. F.Y., 1999-2000, HE MAY BE ALLOWED TO PLACE ON RECORD THE REQUISITE INFORMATION. HOWEVER, THE AO, WITHOUT AFFORDING SUF FICIENT OPPORTUNITY TO ITA NO.423(ASR)/2009 ASSESSMENT YEAR: 1999-2000 6 THE ASSESSEE, ADJOURNED THE MATTER FOR 12.10.2006 A ND PASSED THE ASSESSMENT ORDER ON 16.10.2006. 10. THE ABOVE BEING THE UNDISPUTED POSITION, IN OUR CONSIDERED OPINION, THE LD. CIT(A) OUGHT TO HAVE ADMITTED THE APPLICATION FOR ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. NOW, COM ING TO THE EVIDENCE PER SE AS SOUGHT TO BE PRODUCED BEFORE US, WE FIND THAT THE ACCOUNT OF THE ASSESSEE IN THE BOOKS OF ACCOUNT OF THE COMMISS ION AGENT, M/S. JANTA COMMISSION AGENTS ON THE SALE OF AGRICULTURAL PRODUCE AND THE JAMABANDI ARE DIRECTLY RELATED TO THE ISSUE AT HAN D, I.E., THE SOURCE OF PAYMENT OF RS.10,50,000/-. ACCORDINGLY, WE ADMIT TH E ADMISSION OF THIS ADDITIONAL EVIDENCE FILED BY THE ASSESSEE. 11. THE AFORESAID EVIDENCE WAS NOT BEFORE EITHER O F THE AUTHORITIES BELOW. WE REMIT THIS EVIDENCE TO THE FILE OF THE AO WITH THE DIRECTION TO DECIDE THE MATTER AFRESH AFTER TAKING INTO CONSIDER ATION THE AFORESAID ADDITIONAL EVIDENCE. THE ASSESSEE SHALL BE PROVIDED DUE AND ADEQUATE OPPORTUNITY OF HEARING. THE ASSESSEE, NO DOUBT, SH ALL CO-OPERATE IN THE FRESH PROCEEDINGS BEFORE THE AO. ORDERED ACCORDINGL Y. 12. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16/05/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 16/05/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. PIARA SINGH BHANDAL, KAPURTHALA. ITA NO.423(ASR)/2009 ASSESSMENT YEAR: 1999-2000 7 2. THE ITO WARD II, KAPURTHALA 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.