INCOME TAX OFFICER, WARD- 5(3), AMRITSAR V. SMT. NEERU MEHRA, AMRITSAR

ITA 467/ASR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3317 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 20-04-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-05-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 12-07-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ANIL PURI LD
• Keywords: Reopening of assessment; Depreciation; Additional evidence; Reason to believe; Reassessment proceedings; Set aside
• Section: 142(1); 143(1); 147; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA NO.467(ASR)/2017 ASSESSMENT YEAR:2009-10 INCOME TAX OFFICER WARD-5(3), AMRITSAR VS. SMT. NEERU MEHRA, H. NO.5 NEAR STATE BANK OF INDIA RANI KA BAGH, AMRITSAR PAN:ABFPM 9443B (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.28(ASR)/2017 (ARISING OUT OF 467(ASR)/2017) ASSESSMENT YEAR:2009-10 SMT. NEERU MEHRA H. NO.5, NEAR STATE BANK OF INDIA, RANI KA BAGH, AMRITSAR PAN:ABFPM 9443B VS. INCOME TAX OFFICER WARD-5(3), AMRITSAR (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY: SMT. CHARAN DASS (LD. DR) RESPONDENT BY: SH. ANIL PURI (LD. ADV.) DATE OF HEARING: 08.05.2018 DATE OF PRONOUNCEMENT: 21.06.2018 ORDER PER N.K.CHOUDHRY, JM: ITA NO.467/ASR/2017 (ASST. YEAR: 2009-10) C.O. NO .28(ASR)/2017 ITO VS. SMT. NEERU M EHRA, AMRITSAR 2 THE INSTANT APPEAL HAS BEEN PREFERRED BY THE REVENUE DEPARTMENT, ON FEELING AGGRIEVED AGAINST THE ORDER DATED 03.03.2017 IMPUGNED HEREIN, PASSED BY THE LD. CIT(A) -2, AMRITSAR U/S 250(6) OF THE I.T. ACT, 1961 (HEREIN AFTE R CALLED AS THE ACT) FOR THE ASST. YEAR:2009-10 AND THE ASSESSEE HAS ALSO FILED THE CROSS OBJECTION. 2. THE REVENUE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. WHETHER IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS RIGHT ON FACTS AND IN LAW IN ADMITTING THE ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES, 1962 ON THE GROUND THAT SHE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE DOCUMENTARY EVIDENCES BEFORE THE AO DURING ASSESSMENT PROCEEDINGS EVEN THOUGH THE ASSESSEE NEITHER MADE COMPLIANCE OF THE STATUTORY NOTICES NOR EVEN ONCE APPEARED BEFORE THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS DESPITE SUFFICIENT OPPORTUNITIES PROVIDED TO HER. 2. WHETHER IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS RIGHT ON FACTS AND IN LAW IN ADMITTING THE ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES, 1962 WHICH ARE IN THE SHAPE OF AFFIDAVITS OF VAR IOUS PERSONS WITHOUT ANY CORROBORATIVE DOCUMENTARY EVIDENCE. 3. WHETHER IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS RIGHT ON FACTS AND IN LAW IN DELETING THE ADDITION OF RS.37,31,000/- ON THE BASIS OF AFFIDAVITS O F VARIOUS PERSONS WITHOUT ANY CORROBORATIVE DOCUMENTARY EVIDENCE. WHERE AS THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN CROSS OBJECTION. ITA NO.467/ASR/2017 (ASST. YEAR: 2009-10) C.O. NO .28(ASR)/2017 ITO VS. SMT. NEERU M EHRA, AMRITSAR 3 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 2, AMRITSAR EARED BOTH IN LAW AND FACTS OF THE CASE WHILE PARTLY ALLOWING THE APPEAL NO. 52/2014-15 VIDE HIS LEARNED ORDER DATED 03.03.2017. 2. THAT HE WAS ABSOLUTELY UNJUSTIFIED IN UPHOLDIN G THE REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT, 1961, MISCONSTRUING THE PROVISIONS OF LAW. 3. THE LEARNED CIT (APPEALS) WAS FURTHER UNJUSTI FIED IN ARBITRARILY UPHOLDING THE ADDITION OF RS.3,59,100 WITHOUT APPRECIATING THE FACTS OF THE CASE EXPLANATIONS SUBMITTED AND EVIDENCES PLACED ON RECORD JUDICIOUSLY. 4. THAT ALL THE COMMENTS PASSED BY THE LEARNED CIT (APPEAL)- 2, AMRITSAR WHILE UPHOLDING THE REASSESSMENT PROCEEDINGS AND ADDITION OF RS.3,59,100 ARE BASED ON SURMISES AND CONJECTURES ONLY. 3. BRIEF FACTS OF THE CASE ARE AS UNDER:- IN THIS CASE RETURN OF INCOME DECLARING AN INCOME OF RS.1,73,470/- WAS FILED BY THE ASSESSEE ON 02.03.2010 AND THE SAME WAS PROCESSED U/S 143(1) ON 29.12.2010 AND THE CASE WA S REOPENED WHILE ISSUING NOTICE DATED 28.03.2014 U/S 148 OF THE ACT STATED TO BE SERVED UPON THE ASSESSEE ON 29 TH MARCH, 2014, HOWEVER, NO RETURN WAS FILED BY THE ASSESSEE IN COMPLIANCE TO THE NOTICE AND THEREAFTER, NOTICE U/S 142(1) ALONG WIT H LETTER DATED 27.10.2014 WAS ALSO ISSUED TO THE ASSESSEE, WHICH ALSO ITA NO.467/ASR/2017 (ASST. YEAR: 2009-10) C.O. NO .28(ASR)/2017 ITO VS. SMT. NEERU M EHRA, AMRITSAR 4 YIELDED NO RESULT, HOWEVER, THE ASSESSING OFFICER FINDIN G NO- OPTION, FRAMED THE ASSESSMENT U/S 144 OF THE ACT AND MADE AN ADDITION ON ACCOUNT OF EXPENDITURE INCURRED ON THE MAR RIAGE FUNCTION OF THE ASSESSEES SISTER NAMELY LATE SMT. SAINA S ACHAR WHICH WAS SOLEMNIZED ON 27 TH APRIL, 2008 I.E. F.Y. 2008-09 RELEVANT TO THE A.Y. 2009-10. THE SAID ASSESSMENT WAS CHALLENGED BY THE LD. ASSESSEE BEFORE THE LD. CIT(A), WH O WHILE GOING THROUGH THE RECORD PARTLY DELETED THE ADDITION . NOW THE REVENUE IS IN APPEAL AGAINST THE PARTLY DELETION OF THE ADDITIONS AND ASSEEEE ALSO PREFERRED THE CROSS OBJECTION AGAINST T HE PARTLY CONFIRMATION OF ADDITION. 4. AT THE OUTSET, IT WAS SUBMITTED BY THE LD. AR THAT BE FORE GOING THROUGH THE ORDER ON MERIT, IT IS ESSENTIAL TO G O THROUGH THE REASONS RECORDED IN RE-OPENING OF THE ASSESSMENT PROCEEDINGS. THE ASSESSEE BY WAY OF CROSS OBJECTIONS, HAS RAISED THE LEGAL ISSUE WHICH REQUIRES TO BE ADDRESSED FIR ST, HENCE WE FEEL IT APPROPRIATE TO DECIDE THE CROSS OBJECTIONS, FIRST. 5. LET US TO PERUSE THE REASONS RECORDED WHICH ARE AS UN DER: 1. THE RETURN FILED BY THE ASSESSEE FOR THE A.Y.2009- 10 ON 02- 03-2010 DECLARING INCOME OF RS.1,73,470/- WAS PROCE SSED U/S 143(1) ON 29-12- 2010. THERE IS INFORMATION IN THE POSSESSION OF THIS OFFICE THAT THE ASSESSEE HAS SPE NT RS.40,90,100/- ON THE MARRIAGE AND OTHER FUNCTIONS OF HIS DAUGHTER LATE SMT. SAINA SACHAR WHICH WAS SOLEMNIZE D ON ITA NO.467/ASR/2017 (ASST. YEAR: 2009-10) C.O. NO .28(ASR)/2017 ITO VS. SMT. NEERU M EHRA, AMRITSAR 5 27-04-2008. NO INCOME ON THIS ACCOUNT HAVE BEEN DEC LARED IN THE RETURN OF INCOME FILED ON 02-03-2010. 2. IN VIEW OF THE ABOVE FACTS, I HAVE REASONS TO BELIE F THAT AN INCOME OF RS.40,90,100/- ALONG WITH ANY OTHER INCOM E CHARGEABLE TO TAX, WHICH MAY SUBSEQUENTLY COME TO T HE NOTICE DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 14 7 OF THE I. T. ACT, 1961 FOR THE ASSESSMENT YEAR: 2009-1 0 DUE TO THE REASON THAT THE ASSESSEE FAILED TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS IN THE RETURN OF INCOME FILED. 3. NECESSARY PERMISSION FOR ISSUE OF NOTICE U/S 148 IS BEING SOLICITED FROM THE ADDL. COMMISSIONER OF INCOME TAX , RANGE-V, AMRITSAR. LET US TO PERUSE THE RELEVANT PROVISIONS OF LAW: '147. IF THE AO HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY A. Y., HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 T O 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSME NT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE C OURSE OF PROCEEDINGS UNDER THIS SECTION, OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE A.Y. CONCERNED (HEREAFTER IN T HIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS T HE RELEVANT ASSESSMENT YEAR). PROVIDED THAT WHERE AN ASSESSMENT UNDER SUBSECTION (3) OF SECTION 143 OR THIS SECTION HAS B EEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION SH ALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR Y EARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON TH E PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB SECTION (1) O F SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY A LL ITA NO.467/ASR/2017 (ASST. YEAR: 2009-10) C.O. NO .28(ASR)/2017 ITO VS. SMT. NEERU M EHRA, AMRITSAR 6 MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THA T ASSESSMENT YEAR. EXPLANATION 1.- PRODUCTION BEFORE THE ASSESSING OF FICER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY THE AO WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2- FOR THE PURPOSES OF THIS SECTION, T HE FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT NAMELY:- (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME TAX. (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOSS, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN. (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT- (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSESSED; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RATE; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF UNDER THIS ACT; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE O R ANY OTHER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED.' ITA NO.467/ASR/2017 (ASST. YEAR: 2009-10) C.O. NO .28(ASR)/2017 ITO VS. SMT. NEERU M EHRA, AMRITSAR 7 THE LAW ON THE PROVISIONS OF SECTION 147 IS VERY CLEAR. SECTION 147 AUTHORIZES THE ASSESSING OFFICER TO ASSESS OR RE- ASSESS THE INCOME CHARGEABLE TO TAX IF HE HAS REASON TO BEL IEVE THAT THE INCOME FOR ANY ASSESSMENT ORDER HAS ESCAPED ASSESSMENT AND HAS DULY RECORDED THESE REASONS, HOWEVER AS IT WELL SETTLED THAT THE REASONS TO BELIEVE MUST BE BONA F IDE AND MUST BE BASED UPON RELEVANT MATERIAL ON WHICH A REASON ABLE PERSON COULD HAVE FORM THE REQUISITE BELIEF. IN THE PRESENT CASE, WE FIND THAT THE FIRST SENTENCE OF T HE SO-CALLED REASONS RECORDED BY THE ASSESSING OFFICER SPEAKS THA T 'THERE IS INFORMATION IN THE POSSESSION OF THIS OFF ICE'. SECOND PARA SPEAKS THAT I HAVE REASONS TO BELIEF THAT AN INCOME O F RS.40,90,100/- ALONG WITH ANY OTHER INCOME CHARGEABLE TO TAX, WHIC H MAY SUBSEQUENTLY COME TO THE NOTICE DURING THE COURSE O F ASSESSMENT PROCEEDINGS HAS ESCAPED ASSESSMENT WITHIN THE MEANI NG OF SECTION 147 OF THE I. T. ACT, 1961 FOR THE ASSESSMENT YEAR: 2009-10 DUE TO THE REASON THAT THE ASSESSEE FAILED TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS IN THE RETURN OF INCOME FILED. THIRD PARA SPEAKS THAT 'NECESSARY PERMISSION FOR ISSUE OF NOTICE U/S 148 I S BEING SOLICITED FROM THE ADDL. COMMISSIONER OF INCOME TAX, RANGE-V, AMRITSAR. THE FIRST PART IS ONLY INFORMATION AND THE SECOND PARAG RAPH OF THE SO-CALLED REASONS IS MERE REASON AND THIRD PART IS DIRECTIONS OF THE SUPERIOR AUTHORITY. FROM THE SO-CALLE D REASONS, IT IS NOT AT ALL DISCERNIBLE AS TO WHETHER THE ASSESSING OFFICER HAD APPLIED HIS MIND TO THE INFORMATION AND INDEPENDENTL Y ARRIVED AT ITA NO.467/ASR/2017 (ASST. YEAR: 2009-10) C.O. NO .28(ASR)/2017 ITO VS. SMT. NEERU M EHRA, AMRITSAR 8 A BELIEF THAT ON THE BASIS OF THE MATERIAL WHICH HE HA D BEFORE HIM, INCOME HAD ESCAPED ASSESSMENT. AS IT WAS SUBMITTED BY THE LEARNED COUNSEL THAT IN THE INSTANT CASE ONE COMPLAINT WAS LODGED BEFORE INVESTIGATIO N WING OF THE INCOME TAX DEPARTMENT, WHICH WAS SIMPLY FORWARD ED TO THE ITO WHO WHILE RECORDING REASONS FOR SELECTION OF THE CASE, NEITHER VERIFIED THE FACTS QUA INFORMATION NOR MADE A NY EFFORT TO FIND OUT THE VERACITY AND AUTHENTICITY OF COMPLAINT/ INFORMATION AND ANY CORROBORATIVE EVIDENCE/MATERIAL THERETO, BU T ONLY ACTED ON THE INFORMATION WHICH ACCORDING TO OUR MIND DO ES NOT SOUND GOOD REASON FOR REOPENING OF THE CASE. IT IS CLEAR THAT THE ASSESSING OFFICER FAILED TO MAKE ANY EXERCISE FOR REOPENIN G OF THE CASE INDEPENDENTLY AND WITH CORROBORATIVE MATERIAL . EVEN THE ASSESSING OFFICER HAS NOT MADE ANY EXERCISE TO GATHER ANY MATERIAL EVIDENCE ON RECORD. THE INITIATION OF REASSESSM ENT ITSELF IS BASED UPON NO EVIDENCE AND/OR UN-CORROBORATIVE MATERIAL, THEREFORE IN ANY SENSE CANNOT SURVIVE, BECAUSE INITIATION OF THE PROCEEDING U/S 147 ITSELF IS A VAGUE AND BASED UPON NO SUBSTANTIVE REASONING AND/OR MATERIAL AT ALL, HENCE IN OUR CONSIDERED OPINION, THE LD. CIT(A) WAS ABSOLUTELY U NJUSTIFIED IN UPHOLDING THE REOPENING OF THE ASSESSMENT U/S 147 OF THE ACT, WITHOUT APPRECIATING THE FACTS OF THE CASE, EXPLANATION SUBMITTED AND EVIDENCES PLACES ON RECORD JUDICIOUSLY. ON THE AFORESAID OBSERVATIONS, WE ARE OF THE CONSIDERED OPINION THAT ASSESSMENT ORDER ITSELF DOES NOT SURVIVE ON THE ITA NO.467/ASR/2017 (ASST. YEAR: 2009-10) C.O. NO .28(ASR)/2017 ITO VS. SMT. NEERU M EHRA, AMRITSAR 9 LEGAL GROUND ITSELF, CONSEQUENTLY THE ORDER UNDER CHALL ENGE I.E. PARTLY CONFIRMATION OF ASSESSMENT ORDER, OF THE LD. CI T(A) IS LIABLE TO BE SET ASIDE AND IN RESULT ENTIRE ADDITION MADE BY THE ASSESSING OFFICER, WHICH WAS PARTLY CONFIRMED BY THE LD. C IT(A) STANDS DELETED. 5. IN THE RESULT, THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWED AND THE APPEAL FILED BY THE REVENUE DEPARTM ENT CONSEQUENTLY STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.06.2018. SD/- SD/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED:21.06.2018 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) SMT. NEERU MEHRA, RANI KA BAGH, AMRITSAR (2) THE ITO, WARD-5(3), AMRITSAR (3) THE CIT(A)-2, AMRITSAR (4) THE CIT CONCERNED (5) THE SR DR, I.T.A.T., AMRITSAR TRUE COPY BY ORDER