Ashish Vilas Pundlik, Pune V. Income-tax Officer, Ward - 5 (2), Pune

ITA 457/PUN/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7654 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-09-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 25-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRAVIN CHAVAN
• Keywords: Unexplained expenditure; Assessment record
• Section: 69C; 143(3); 142(1); 143(2); 148

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER . / ITA NO.457/PUN/2019 / ASSESSMENT YEAR : 2010-11 ASHISH VILAS PUNDLIK, C/O.TEJAS BUNGLOW, PLOT NO.2, LANE 7, DEEP LAXMI SOCIETY, SAHAKAR NAGAR NO.2, TULSIBAUGWALE COLONY, PUNE. PAN : ALLPP0999B. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 5(2), PUNE. . / RESPONDENT ASSESSEE BY : SHRI KISHORE PHADKE. REVENUE BY : SHRI PRAVIN CHAVAN. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 4, PUNE DATED 23.01.2019 FOR THE ASSESSMENT YEAR 2010-11. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS AN INDIVIDUAL. IN THIS CASE, AS PER AIR INFORMATION ASSESSMENT WAS INITIALLY COMPLETED U/S 143(3) R. W.S. / DATE OF HEARING : 10.10.2019 / DATE OF PRONOUNCEMENT: 30.10.2019 2 147 OF THE ACT ON 18.03.2013. THEREAFTER, ASSESSMENT WA S RE- OPENED U/S 147 OF THE ACT BY ISSUING NOTICE U/S 148 OF T HE ACT DT.23.03.2015 AND WAS SERVED ON ASSESSEE ON 27.03.2015. IN RESPONSE TO NOTICE U/S 148 OF THE ACT, ASSESSEE REPLIED THAT THE RETURN OF INCOME FILED EARLIER MAY BE TREATED AS RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. SUBSEQUE NTLY, NOTICES U/S 143(2) AND 142(1) OF THE ACT DATED 10.12.2015 W ERE ISSUED. THEREAFTER, THE CASE WAS TAKEN UP FOR SCRUT INY AND ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 147 OF THE ACT VIDE ORDER DT.27.01.2016 AND THE TOTAL LOSS WAS ASSESSED AT RS.22 ,76,613/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A), WHO VIDE ORDER DT.23.01.2019 (IN APPEAL NO.PN/CIT(A )- 4/WD-5(2), PUNE/238/ 2016-17) DISMISSED THE APPEAL OF ASSE SSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APP EAL AND HAS AND RAISED THE FOLLOWING GROUNDS : 1 APPELLANT CONTENDS THAT, THE LEARNED AO ERRED IN LAW AND ON FACTS IN ASSUMING JURISDICTION U/S 147 OF THE ITA, 1961, AS NECESSARY SANCTION OF THE LEARNED JCIT, WHICH IS MA NDATORY REQUIREMENT OF SECTION 151 OF THE ITA, 1961, IS NOT DISCERNING FROM: A) NOTICE U/S 148 OF THE ITA, 1961; B) REASONS RECORD BY THE LEARNED AO AND C) ASSESSMENT ORDER AND ASSESSMENT RECORDS AS SUCH, APPELLANT CONTENDS THAT, ORDER PASSED U/S 143(3) R.W.S. 147 OF THE ITA, 1961 IS BAD IN LAW. 2. APPELLANT CONTENDS THAT THE REASSESSMENT PROCEED INGS INITIATED U/S 147 OF THE ITA, 1961 BY THE LEARNED A O WERE BASED ON MERE SUSPICION AND NOT BASED ON A VALID REASON T O BELIEVE ESCAPEMENT OF INCOME. FROM THE 'REASONS' RECORDED, IT REVEALS, NO ANY CONSPICUOUS APPLICATION OF MIND IS REACHED T O FORM BELIEF OF ANY ESCAPEMENT OF INCOME. 3. APPELLANT CONTENDS THAT THE ORDER PASSED BY THE LEARNED AO U/S 143(3) R.W.S. 147 OF THE ITA, 1961 IS BAD IN LA W, SINCE, OBJECTIONS RAISED BY THE APPELLANT TO THE REASSESSM ENT PROCEEDINGS WERE NOT DISPOSED-OFF BY PASSING A SPEA KING ORDER BY THE LEARNED AO. 3 4. APPELLANT CONTENDS THAT THE LEARNED CIT(A)-4, PU NE ERRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION OF RS. 19,00,000/- U/S 69C OF THE ITA, 1961 MADE BY THE LEARNED AO. 5. APPELLANT CONTENDS THAT THE LEARNED AO ERRED IN LAW AND ON FACTS IN INVOKING PROVISIONS .OF SECTION 69C OF THE ITA, 1961 THOUGH NO ANY EXPENDITURE WAS CLAIMED BY THE APPELL ANT W.R.T. PAYMENTS MADE TO MR. SANJAY WAGHOLIKAR. 6. APPELLANT CONTENDS THAT THE LEARNED AO ERRED IN LAW AND ON FACTS IN MAKING ADDITION OF RS. 19,00,000/- U/S 69C OF THE ITA, 1961. THE LEARNED AO OUGHT TO HAVE APPRECIATED THE FACT THAT THE PAYMENTS OF RS. 19,00,000/- WERE MADE OUT OF WITHDRAWALS FROM THE BANK. 4. GROUND NOS. 1 TO 3 ARE WITH RESPECT TO THE RE-OPENIN G OF ASSESSMENT PROCEEDINGS AND GROUND NO.4 TO 6 ARE WITH R ESPECT TO ADDITION OF RS.19,00,000/- U/S 69C OF THE ACT. ALL THE GROU NDS ARE CONSIDERED TOGETHER. 4.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON VERIFICATION OF CASH BOOKS OF ASSESSEE, AO NOTICED THAT ASSESSEE HAD MADE CASH PAYMENTS AGGREGATING TO RS.19,00,000/-, T O SHRI SANJAY WAGHOLIKAR ON DIFFERENT DATES WHICH ACCORDING TO AO HAD ESCAPED ASSESSMENT. ON INQUIRY ASSESSEE SUBMITTED THAT CASH PAYMENTS WERE MADE TO SHRI SANJAY WAGHOLIKAR TO DISCHAR GE BUSINESS LIABILITY BUT FAILED TO PROVE THE NATURE OF BUSINESS AND ALSO COULD NOT PRODUCE ANY DOCUMENTARY EVIDENCE TO PRO VE THAT THERE WAS BUSINESS EXIGENCY WITH SHRI SANJAY WAGHOLIKAR. AS ASSESSEE DID NOT OFFER ANY SATISFACTORY EXPLANATION IN RES PECT OF TRANSACTIONS WITH SHRI SANJAY WAGHOLIKAR, AO INVOKED THE PROVISIONS OF SEC.69C OF THE ACT AND ACCORDINGLY MADE AN ADDITION OF RS.19,00,000/- ON ACCOUNT OF UNEXPLAINED EXPENDITURE TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF AO, 4 ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD T HE ORDER OF AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL. 5. BEFORE ME, LD.A.R. SUBMITTED THAT LD.CIT(A) HAS PASSED EX - PARTE ORDER AND HAS NOT DECIDED THE ISSUE ON MERITS. HE SUBMITTED THAT NON-ATTENDANCE ON THE LAST DATE OF HEA RING BEFORE LD.CIT(A) WAS ON ACCOUNT OF NON-SERVING OF NOTICE. HE SUBM ITTED THAT THE MATTER MAY BE REMITTED BACK TO LD.CIT(A) FOR AD JUDICATION ON MERITS AND FURTHER ASSESSEE UNDERTAKES TO APPEAR B EFORE LD.CIT(A). LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF LOWER AUTHORITIES. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MA TERIAL ON RECORD. THE ISSUE IN GROUNDS 1 TO 3 IS WITH RESPECT TO THE RE- OPENING OF ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S 147 OF THE ACT AND GROUND NOS.4 TO 6 IS WITH RESPECT TO THE ADDITIO N OF RS.19,00,000/- ON ACCOUNT OF UNEXPLAINED CASH PAYMENT S MADE TO SHRI SANJAY WAGHOLIKAR. THE PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT NO DETAILS WERE FILED BY THE ASSESSEE BEFORE AO IN RESPECT OF CASH PAYMENTS TO SHRI SANJAY WAGHOLIKAR AND THEREFORE HE CONSIDERED THE ENTIRE CASH PAYMENTS AS UNEXPLAINED EXPENDITURE AND MADE ITS ADDITION U/S 69C OF THE ACT. T HE ORDER OF LD.CIT(A) REVEALS THAT LD.CIT(A) HAS PASSED AN EX-PARTE ORDER WITHOUT DECIDING THE ISSUE ON MERITS. IT IS A SETTLED LAW THAT LD.CIT(A) HAS NO JURISDICTION TO DISMISS THE APPEAL OF THE AS SESSEE 5 WITHOUT GOING INTO THE MERITS OF THE ISSUE BEFORE HER. EVE N IN AN EX-PARTE ORDER, THE LD.CIT(A) SHOULD HAVE DECIDED THE GRO UNDS OF APPEAL OF THE ASSESSEE ON MERITS THEREOF. CONSIDERING THE AFORESAID FACTS AND IN VIEW OF LD.A.R.S UNDERTAKING THAT ASSESSEE WILL CO- OPERATE AND APPEAR BEFORE LD.CIT(A), I AM OF THE VIEW THA T IN THE INTERESTS OF JUSTICE AND FAIR PLAY, THE ASSESSEE BE GIVEN ONE MORE OPPORTUNITY TO PRESENT HIS CASE BEFORE LD.CIT(A). I THER EFORE REMIT THE ISSUE BACK TO LD.CIT(A) TO DECIDE THE ISSUE ON MERITS IN ACCORDANCE WITH LAW. NEEDLESS TO STATE THAT LD.CIT(A) SHA LL GRANT ADEQUATE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. IN VIEW OF MY DECISION TO RESTORE THE ISSUE TO LD.CIT(A), I AM NOT ADJUD ICATING ON MERITS THE GROUNDS OF THE APPEAL RAISED BY THE ASSESSEE. THUS, THE GROUNDS OF ASSESSEE ARE ALLOWED FOR STATISTICAL PUR POSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30 TH DAY OF OCTOBER, 2019. SD /-- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 30 TH OCTOBER, 2019. YAMINI 6 #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-4, PUNE. PR. CIT-3, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.