Sh. Ram Pal, Kurukshetra V. ITO, Kaithal

ITA 465/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64077 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-12-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 04-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: R K AGGARWAL; B S SAINI
• Keywords: Principle of natural justice; Agreed addition
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, J M ITA NO. 465/CHD/2011 ASSESSMENT YEAR : 2007-08 RAM PAL V I.T.O. WARD 3, KAITHAL 504, WARD 7 SUBHASH GALI K URUKSHETRA AASPP 4148 G (APPELLANT) (RESPONDENT) APPELLANT BY S/SHRI R.K. AGGARWAL & B.S. SAINI RESPONDENT BY: SHRI N.K. SAINI DATE OF HEARING 12.12.2012 DATE OF PRONOUNCEMENT 18.12.2012 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX(A), KARNAL DATED 31. 1.2011. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1 THE ORDER CONFIRMED BY THE LD. COMMISSIONER IS N ULL AND VOID AND AGAINST THE LAW OF NATURAL JUSTICE. 2. THE LD. CIT(A) ERRED IN LAW BY CONFIRMING THE IS SUE OF SELECTING THE CASE IN TO SCRUTINY WHICH VIOLATE D THE GUIDE LINES ISSUED BY CBDT. 3. THE LD. CIT(A) WRONGLY CONFIRMED THE ADDITION OF RS. 1,54,122/- ON THE ESTIMATE BASIS MADE BY THE ASSESS ING OFFICER. 4 THE LD. CIT(A) ERRED IN LAW WHILE CONFIRMING THE ADDITION OF RS. 35,000/- ON ACCOUNT OF HOUSEHOLD EXPENSES MADE BY ASSESSING OFFICER. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI LED RETURN OF INCOME DECLARING INCOME OF RS. 87,589/- + AGRICU LTURAL INCOME OF RS. 7,99,122/- ON 1.5.2007. THE CASE WAS SELECTED 2 FOR COMPULSORY SCRUTINY AS THE SALE CONSIDERATION O F THE PROPERTY EXCEEDED RS. 30LAKHS. NOTICE U/S 132 WA S ISSUED ON 8.9.2008. DURING ASSESSMENT PROCEEDINGS CERTAIN DISCREPANCIES WERE FOUND IN AGRICULTURAL INCOME AND IT WAS FURTHER FOUND THAT HOUSEHOLD WITHDRAWALS WAS ON LOW ER SIDE. DURING ASSESSMENT PROCEEDINGS ITSELF THE ASSESSEE A GREED FOR ADDITION OF RS. 1,54,122/- OUT OF AGRICULTURAL INCO ME AND RS. 35,000/- TOWARDS LOW HOUSEHOLD WITHDRAWALS. THOUGH THE ADDITION WAS MADE ON AGREED BASIS STILL THE ASSESSE E PREFERRED AN APPEAL BEFORE THE LD. CIT(A). 4 THE FIRST MAJOR ISSUE BEFORE THE LD. CIT(A) WAS T HAT THE RETURN WAS WRONGLY TAKEN UP FOR SCRUTINY AGAINST TH E GUIDELINES ISSUED BY THE BOARD. THIS ISSUE WAS ADJUDICATED BY THE LD. CIT(A) AS UNDER:- 1.02 THE ISSUE IS CONSIDERED. IT IS NOTED THAT TH E GUIDELINES ISSUED BY THE CBDT FOR SELECTION OF CASE S FOR SCRUTINY ARE MEANT ONLY FOR THE USE OF THE OFFICE OF THE INCOME TAX DEPARTMENT. THE GUIDELINES QUOTED BY T HE APPELLANT ARE NEITHER THE INSTRUCTIONS ISSUED U/S 1 19 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) NOR I S THE CIRCULAR WHICH ARE NOTIFIED FOR GENERAL PUBLIC. TH E GUIDELINES ARE CONFIDENTIAL AND FOR DEPARTMENTAL US E ONLY. THIS VIEW IS UPHOLD BY THE DECISION OF CENTRAL INFO RMATION COMMISSION IN THE CASE OF SHRI KAMAL ANAND V. DIREC TOR ITA-II, CBDT IN ORDER NO. CIC/AT/A/2007/0617 DATED 21.2.2008. 1.03 FURTHER, THE PROVISIONS OF SECTION 143(2) EMPO WERS THE ASSESSING OFFICER TO ISSUE A NOTICE U/S 143(2) WITHOUT ARGUING ANY REASON. THE ASSESSING OFFICER HAS JURISDICTION TO ISSUE A NOTICE U/S 143(2) THE GUIDE LINES WHICH ARE MEANT FOR THE GUIDANCE OF THE OFFICERS CA NNOT BE READ OR CONSTRUED SO AS TO DEPRIVE THE ASSESSING OF FICER OF ITS POWER AND JURISDICTION TO ISSUE A NOTICE U/S 143(2). RELIANCE IS PLACED ON THE FOLLOWING DECISIONS: I JANTA METAL WORKS V ITO, 186 ITR 458, 462 (ALL) II ALKAN ELLABORATED LTD. V CIT, 262 ITR 192 3 1.04 IN VIEW OF THE FACTUAL AND LEGAL POSITION DISC USSED ABOVE, THE PLEA OF THE APPELLANT IS NOT TENABLE AND HENCE GROUNDS OF APPEAL NO. 1 AND 2 ARE REJECTED. 5 ON MERITS ALSO THE ADDITION WAS CONFIRMED BY OBSE RVING THAT THE LD. COUNSEL OF THE ASSESSEE HAD AGREED FOR BOTH THE ADDITIONS SUBJECT TO NO PENALTY AND THE ASSESSING O FFICER HAD NOT INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. 6 BEFORE US, THE LD. COUNSEL OF THE ASSESSEE MADE SUBMISSIONS IN RESPECT OF THE GROUNDS. HE PARTICUL ARLY EMPHASIZED THAT SELECTION OF THE RETURN UNDER SCRUT INY WAS WRONG BECAUSE SAME WAS AGAINST THE GUIDELINES ISSUE D BY THE BOARD AND IN THIS REGARD HE RELIED ON VARIOUS DECIS IONS. ON MERITS ALSO HE JUSTIFIED THE AGRICULTURAL INCOME DE CLARED BY THE ASSESSEE AND FURTHER STATED THAT HOUSEHOLD EXPENSES SHOWN BY THE ASSESSEE AT RS. 2,00,650/- FOR A FAMILY CONSIST ING OF FOUR MEMBERS WAS JUSTIFIED. 7 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE MAI NLY SUBMITTED THAT ONCE THE ADDITION WAS MADE ON THE BA SIS OF AGREED ADDITION THEN THE ASSESSEE COULD NOT BE SAID TO HAVE BEEN AGGRIEVED BY SUCH ORDER AND THEREFORE, THE AP PEAL WAS NOT MAINTAINABLE. IN THIS REGARD, HE FILED A COPY OF PROCEEDING SHEET DURING ASSESSMENT PROCEEDINGS SHOWING THAT TH E LD. COUNSEL OF THE ASSESSEE HAD SIGNED STATING AGREED SUBJECT TO NO PENALTY. 8 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY. W E FIND THAT MAIN CHALLENGE AGAINST THE SELECTION OF CASE W OULD MEAN THAT THE ASSESSEE IS CHALLENGING THE ISSUE OF NOTIC E U/S 143(2). IT HAS TO BE NOTED THAT SECTION 292BB HAS BEEN INSE RTED BY 4 FINANCE ACT, 2008 W.E.F .1.4.2008. THE PROVISIONS READ AS UNDER: 292BB. WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDING OR CO- OPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT O R REASSESSMENT, IT SHALL BE DEEMED THAT ANY NOTICE UNDER ANY PROVISION OF TH IS ACT, WHICH IS REQUIRED TO BE SERVED UPON HIM, HAS BEEN DULY SERVED UPON HI M IN TIME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AND SUCH ASSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDI NG OR INQUIRY UNDER THIS ACT THAT THE NOTICE WAS ( A ) NOT SERVED UPON HIM; OR ( B ) NOT SERVED UPON HIM IN TIME; OR ( C ) SERVED UPON HIM IN AN IMPROPER MANNER. PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY WHERE THE ASSESSEE HAS RAISED SUCH OBJECTION BEFORE THE COMPL ETION OF SUCH ASSESSMENT OR REASSESSMENT.]. 9 THE PLAIN READING OF THE ABOVE PROVISION SHOWS TH AT IF NO OBJECTION IS TAKEN DURING ASSESSMENT PROCEEDINGS TH EN SUCH ASSESSEE HAS BEEN BARRED FROM TAKING ANY OBJECTION WITH REGARD TO SERVICE OF NOTICE. CLAUSE (C) OF THE ABO VE PROVISION CLEARLY SHOWS THAT IF NOTICE WAS SERVED IN IMPROPER MANNER AS IS BEING ALLEGED NOW THEN THE ASSESSEE WAS DUTY BOU ND TO RAISE THIS OBJECTION BEFORE THE A.O AND IF SUCH OBJ ECTION IS RAISED BEFORE HIM THEN NO SUCH OBJECTION CAN BE RAI SED LATER IN OTHER PROCEEDINGS. IT IS FURTHER TO BE NOTICED THAT THIS SECTION IS A PROCEDURAL SECTION AND THEREFORE, WOULD HAVE APP LICATION FROM 1.4.2008. EVEN IN RESPECT OF ASSESSMENT YEAR W HICH ENDED IN EARLIER YEAR BECAUSE NOTICE FOR THE FIRST TIME WAS SERVED ON THE ASSESSEE ON 8.9.2008. 10 IN ANY CASE THE LD. CIT(A) HAS ALREADY ADJUDICAT ED THIS ISSUE AND POINTED OUT THAT GUIDELINES RELIED ON BY THE ASSESSEE CANNOT BE CONSTRUED AS CIRCULAR AND THE SAME CANNOT BE DISCLOSED TO THE ASSESSEE IN VIEW OF THE ORDER PASS ED BY THE CENTRAL INFORMATION COMMISSION. THEREFORE, THE DE CISION OF 5 HON'BLE DELHI HIGH COURT IN CASE OF CIT V. BEST PLA STICS (P) LTD. ITA NO. 951 OF 2005 (COPY OF THE SAME FILED BY THE LD. COUNSEL OF THE ASSESSEE) IS DISTINGUISHABLE BECAUSE THAT DEALS WITH INSTRUCTION NO. 1922 DATED MARCH 9, 1995. INS TRUCTIONS AND CIRCULAR ARE DEFINITELY DIFFERENT FROM GUIDELIN ES AND FOR ASSESSMENT YEAR 2008-09 ONLY GUIDELINES HAVE BEEN I SSUED BY THE BOARD. FURTHER IT IS SETTLED LAW THAT ONCE THE ASSESSMENT IS AGREED UPON BEFORE THE ASSESSING AUTHORITY THEN SUC H ASSESSEE CANNOT BE SAID TO HAVE BEEN AGGRIEVED BY THE ORDER AND ACCORDINGLY THE APPEAL FILED BY SUCH ASSESSEE IS NO T MAINTAINABLE. IN THIS REGARD REFERENCE MAY BE MADE TO THE FOLLOWING DECISIONS: RAMANLAL KAMDAR V CIT, 108 ITR 73 (MAD) STERLING MACHINE TOOSL V. CIT, 123 ITR 181 (ALL) RAMESHCHANDRA AND COMPANY V CIT, 168 ITR 375 (BOM) MAHESH B. SHAH V. ACIT, 238 ITR 130 (KERALA) IN CASE BEFORE US, THE LD. DR FOR THE REVENUE HAS F ILED A COPY OF THE NOTING SHEET RECORDED DURING ASSESSMENT PROC EEDINGS ON 26.11.2009. THE ASSESSING OFFICER HELD POINTING OU T HIS OBSERVATIONS REGARDING DEFICIENCIES IN THE DOCUMENT S REGARDING AGRICULTURAL INCOME AND HOUSEHOLD WITHDRAWALS WERE ON LOWER SIDE. IN THE PROCEEDINGS HE PROPOSED THE ADDITIONS WHICH HAVE BEEN MADE IN THE ASSESSMENT AND THE LD. COUNSEL OF THE ASSESSEE, SHRI R.K. AGGARWAL HAS AGREED FOR THE SAM E BY WRITING AGREED SUBJECT TO NO PENALTY. IT IS FURT HER TO BE APPRECIATED THAT THE ASSESSING OFFICER HAS NOT INIT IATED ANY PENALTY U/S 271(1)(C) OF THE ACT. THIS MEANS THAT T HE ASSESSING OFFICER ACCEPTED THE PROPOSAL IN TOTALITY AND THERE FORE, THE ASSESSEE CAN NOT NOW BE DESCRIBED AS AGGRIEVED PART Y. IT IS TO BE FURTHER APPRECIATED THAT ONCE AGREEMENT IS MADE, THEN THAT 6 LEADS TO THE DEPARTMENT TO BE STOPPED FROM MAKING F URTHER INQUIRIES AND THAT IS WHY AGREED ADDITION HAS TO BE HONOURED BY BOTH THE PARTIES. THEREFORE, WE FIND NO MERIT IN T HE GROUNDS NO. 3 & 4 AND DISMISS THE SAME. IN VIEW OF THESE FACTS, WE FIND NO MERIT IN THE APPEAL OF THE ASSESSEE AND ACC ORDINGLY WE CONFIRM THE ORDER OF THE LD. CIT(A). 11 IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED ON 18.12.2012. SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 18.12. 2012 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 7