Anoop Singh, Lt. Babu Singh, Kaushambi V. ITO, Allahabad

ITA 459/ALLD/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76920 (ITAT-ALLAHABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-05-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 12-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAKESH TRIPATHI
• Keywords: Reopening of assessment; Reason to believe; Reassessment proceedings
• Section: 147; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ALLAHABAD BENCH, ALLAHABAD BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT ME MBER ITA NO. 459/A/2012 ASSTT. YEAR : 2005-06 ANOOP SINGH, VS. INCOME-TAX OFFICER, L/H (LATE BABOO SINGH) RANGE II(1), ALLAHABAD. AHUJA BAZAR, KAUSHAMBI. (PAN: BHJPS 6279 L) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHISH BANSAL, ADVOCATE & SHRI SAURABH AGRAWAL, C.A. RESPONDENT BY : SHRI RAKESH TRIPATHI, SR. DR DATE OF HEARING : 27.05.2014 DATE OF PRONOUNCEMENT : 30.05.2014 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF LD. CIT(A), ALLAHABAD DATED 08.06.2012, CHALLENGING THE REOPENI NG OF ASSESSMENT U/S. 147/148 OF THE IT ACT AND ADDITION OF RS.10,32,000/- U/S. 6 8 OF THE IT ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE AO I NITIATED RE-ASSESSMENT PROCEEDINGS U/S. 147 OF THE IT ACT BY ISSUING NOTIC E U/S. 148 ON 06.03.2009. IT WAS FOUND THAT THE ASSESSEE HAS MADE DEPOSIT OF RS.10,7 8,909/- IN BANK ACCOUNT WITH ITA NO. 459/A/2012 2 BANK OF BARODA WHICH WAS FOUND TO BE CHARGEABLE TO TAX AND HAD ESCAPED ASSESSMENT. THE AO NOTED THAT THE ASSESSEE HAS FAIL ED TO PROVE THE SOURCE OF DEPOSIT IN THE BANK ACCOUNT AND ACCORDINGLY MADE AD DITION OF RS.10,78,909/- U/S. 68 OF THE IT ACT. THE LD. CIT(A) DISMISSED THE APPE AL OF THE ASSESSEE. 3. THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO PB- 30, WHICH IS REASONS RECORDED FOR REOPENING OF ASSESSMENT AND THE SAME R EADS AS UNDER : 6.3.2009 REASONS TO INITIATE PROCEEDINGS U/S. 147. SHRI ANOOP SINGH, L/H LATE SHRI BABU SINGH R/O AHU JA BAZAR, KAUSHAMBI, HAS NOT FILED RETURN FOR THE ASSESSMENT YEAR 2005-06. HOWEVER AS PER INDIVIDUAL TRANSACTION STATEMENT RS.10,78,909/- (RS. TEN LAC SEVENTY EIGHT THOUSAND NINE HUNDRED NINE ONLY) HAS BEEN DEPOSITED BY HIM IN BANK OF BARODA. THEREFORE, I HAVE REASON TO BELIEVE THAT THIS INVESTMENT OF RS.10,78,909/- CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE LD. COUNSEL FOR THE ASSESSEE ALSO REFERRED TO P B-5, WHICH IS COPY OF ACKNOWLEDGEMENT OF FILING OF RETURN BY ASSESSEE FOR ASSESSMENT YEAR UNDER CONSIDERATION I.E., 2005-06 TO SHOW THAT RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 31.03.2007 AND THEREFORE, SUBMITTED THAT THE REA SONS RECORDED BY THE AO ARE WHOLLY INCORRECT AND NON-EXISTENT AND AS SUCH THE R EASSESSMENT PROCEEDINGS ARE INVALID AND BAD IN LAW AND RELIED UPON THE ORDER OF ITAT, ALLAHABAD BENCH IN THE CONNECTED CASE OF APOORVA SINGH S/O LATE SHRI BABU SINGH IN ITA NO. ITA NO. 459/A/2012 3 460/A/2012 DATED 18.06.2013 AND SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 4. ON CONSIDERATION OF THE RIVAL SUBMISSIONS AND CO NSIDERING THE REASONS RECORDED FOR REOPENING OF ASSESSMENT ABOVE AND RETU RN OF INCOME ALREADY FILED BY THE ASSESSEE, WE ARE OF THE VIEW THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY ORDER OF ITAT, ALLAHABAD BENCH IN THE CASE OF AP OORVA SINGH VS. ITO (SUPRA) IN WHICH IT WAS HELD IN PARA 4 TO 7 AS UNDER : 4. THE ASSESSEE ON GROUND NO. 1 TO 4 OF THIS APPEA L CHALLENGED THE RE-ASSESSMENT PROCEEDINGS U/S. 147/1 48 OF THE IT ACT. 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REASONS RECORDED ARE NOT VALID UNDER THE LAW BECAUSE THE RE ASONS RECORDED BY THE AO ARE INCORRECT. THEREFORE, THERE IS NO REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. HE HAS FILED COPY OF THE REASONS RECORDED BY THE AO FOR REOPENING OF ASSESSMENT ON 06.03.2009, COPY OF WHICH IS FILED AT PAGE 18 OF TH E PAPER BOOK AND THE SAME READS AS UNDER : REASON TO INITIATE PROCEEDINGS U/S. 147 6.3.2009 SHRI APURVA SINGH, S/O SHRI BABU SINGH R/O GRAM AJUHA BAZAR, KAUSHAMBI, HAS NOT FILED RETURN FOR THE ASSESSMENT YEAR 2005-06. HOWEVER AS PER INDIVIDUAL TRANSACTION STATEMENT RS.10,92,095/- (RS. TEN LAC N INETY TWO THOUSAND NINETY FIVE ONLY) HAS BEEN INVESTED BY HIM IN BANK OF BARODA (DEPOSITS IN S.B.) IN PURCHAS E OF SHARES. I HAVE REASON TO BELIEVE THAT THIS INVESTME NT OF RS.10,92,095/- CHARGEABLE TO TAX HAS ESCAPED ASSESS MENT FOR THE SAID ASSESSMENT YEAR IN THIS CASE. ITA NO. 459/A/2012 4 5.1 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE THE ASSESSEE FILED THE RETURN OF INCOME ON 31.03.2007, THEREFORE, THE REASONS RECORDED BY THE AO THAT THE ASSESSEE HAS NO T FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL IS I NCORRECT. THUS, REOPENING IS UNJUSTIFIED. PB-9 IS REPLY FILED BEFOR E THE AO. HE HAS RELIED UPON THE DECISION OF ALLAHABAD HIGH COURT IN THE CASE OF RAVI IRON INDUSTRIES VS. DIT, 264 ITR 228, IN WHICH IT W AS HELD THAT THERE WAS NO DENIAL OF FACTS STATED IN THE WRIT PETITION THAT THERE WAS NO INFORMATION IN POSSESSION OF THE OFFICER ISSUING WA RRANT OF AUTHORIZATION FOR SEARCH. HENCE, THE ACTION U/S. 13 2 OF THE IT ACT WAS ILLEGAL AND IT COULD NOT BE SAID THAT THE COMMISSIO NER HAD REASON TO BELIEVE THAT THE PETITIONER WAS CONCEALING HIS INCO ME. HE HAS, THEREFORE, SUBMITTED THAT THE REASSESSMENT PROCEEDI NGS MAY BE QUASHED. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE FILE D RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL ON 31.03.2007, DIS CLOSING INCOME OF RS.85,620/- (PB-5). THE SAME INCOME IS TAKEN BY THE AO WHILE COMPUTING THE INCOME OF THE ASSESSEE IN THE RE-ASSE SSMENT PROCEEDINGS. THE ASSESSEE ALSO IN RESPONSE TO NOTIC E U/S. 148 OF THE IT ACT SUBMITTED BEFORE THE AO THAT THE RETURN ORIGINA LLY FILED ON 31.03.2007 MAY BE TREATED AS RETURN HAVING BEEN FIL ED U/S. 148 OF THE IT ACT. IT IS, THEREFORE, UNDISPUTED FACT THAT THE AO ACTED ON THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE ON 31.03.2007 PRIOR TO REOPENING OF ASSESSMENT. THE AO HAS NOT DISCLOSED I N THE ASSESSMENT ORDER AS TO WHEN AIR DATA FOR THE ASSESSMENT YEAR U NDER APPEAL WAS OBTAINED BY THE DEPTT.. IT IS ALSO NOT CLARIFIED WH EN THE DEPOSIT OF THE BANK ACCOUNT WAS WITHIN THE KNOWLEDGE OF THE AO WHY HE DID NOT PROCEED TO COMPUTE THE INCOME OF THE ASSESSEE AS PE R ORIGINAL RETURN OF INCOME FILED ON 31.03.2007. THE REASONS FOR REOP ENING OF ASSESSMENT ON 06.03.2009 ARE REPRODUCED ABOVE, IN W HICH THE AO FORMED THE BELIEF OF ESCAPEMENT OF INCOME ON ACCOUN T OF DEPOSITS MADE IN THE BANK ACCOUNT BECAUSE THE ASSESSEE HAS N OT FILED RETURN FOR ASSESSMENT YEAR 2005-06. THUS, REASONS GIVEN BY THE AO FOR REOPENING OF ASSESSMENT WAS WHOLLY INCORRECT AND NO N-EXISTENT BECAUSE THE ASSESSEE HAD ALREADY FILED THE RETURN O F INCOME ON 31.03.2007. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ITA NO. 459/A/2012 5 CIT VS. ATLAS CYCLE INDUSTRIES, 180 ITR 319 HELD TH AT TRIBUNAL WAS RIGHT IN CANCELING THE REASSESSMENT AS BOTH THE GRO UNDS ON WHICH RE- ASSESSMENT NOTICE WAS ISSUED WERE NOT FOUND TO EXIS T AND, THEREFORE, THE ITO DID NOT GET JURISDICTION TO MAKE RE-ASSESSM ENT. THE DECISION IN THE CASE OF RAVI IRON INDUSTRIES (SUPRA) ALSO SU PPORTS THE CASE OF THE ASSESSEE BECAUSE IN THE ABSENCE OF ANY INFORMAT ION FOR ISSUE OF WARRANT OF AUTHORIZATION, IT WAS HELD THAT SEARCH A CTION WAS ILLEGAL AND IT COULD NOT BE SAID THAT THE COMMISSIONER HAD REASON TO BELIEVE THAT THE ASSESSEE WAS CONCEALING HIS INCOME. CONSI DERING THE ABOVE DISCUSSION, IT IS CLEAR THAT REASONS RECORDED BY TH E AO FOR REOPENING OF ASSESSMENT WERE NON-EXISTENT AND FACTUALLY INCOR RECT, THEREFORE, ON SUCH INCORRECT AND NON-EXISTENT REASONS, IT IS DIFF ICULT TO BELIEVE THAT THE AO HAD REASONS TO BELIEVE THAT THE INCOME CHARG EABLE TO TAX HAD ESCAPED ASSESSMENT. THE ASSUMPTION OF JURISDICTION BY THE AO OF INITIATING PROCEEDINGS U/S. 147 IN THIS CASE IS THU S, BAD IN LAW AND RE- ASSESSMENT PROCEEDINGS CANNOT BE HELD TO BE VALID. IN VIEW OF THE ABOVE, WE QUASH THE INITIATION OF RE-ASSESSMENT PRO CEEDINGS IN THE MATTER. ACCORDINGLY, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE. IN THE RESULT, ALL ADDITIONS MADE IN THE RE-ASSESSM ENT PROCEEDINGS WOULD STAND DELETED. IN VIEW OF THE ABOVE FINDINGS, THERE IS NO NEED TO DECIDE REMAINING GROUNDS ON MERITS, AS THE SAME ARE LEFT FOR ACADEMIC CONSIDERATION ONLY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 5. CONSIDERING THE FACTS OF THE CASE, IT IS CLEAR T HAT THE REASONS RECORDED BY THE AO FOR REOPENING OF ASSESSMENT WERE NON-EXISTENT AN D FACTUALLY INCORRECT. THEREFORE, THE ASSUMPTION OF JURISDICTION BY THE AO FOR INITIATING PROCEEDINGS U/S. 147 IS BAD IN LAW AND REASSESSMENT PROCEEDINGS CANN OT BE HELD TO BE VALID. FOLLOWING THE ORDER OF ITAT, ALLAHABAD BENCH IN THE CASE OF APOORVA SINGH (SUPRA) WE QUASH THE INITIATION OF PROCEEDINGS IN T HE MATTER. THE ORDERS OF AUTHORITIES BELOW ARE SET ASIDE. RESULTANTLY, ALL A DDITIONS MADE IN RE-ASSESSMENT ITA NO. 459/A/2012 6 PROCEEDINGS ARE DELETED. IN VIEW OF THESE FINDINGS, THERE IS NO NEED TO DECIDE THE GROUNDS ON MERITS AS THE SAME ARE LEFT FOR ACADEMIC DISCUSSION ONLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (J. SUDHAKAR REDDY) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, ALLAHABAD 6. GUARD FILE ASSTT. REGISTRAR TRUE COPY