C.P.Mishra, Lucknow V. ITO, Lucknow

ITA 474/LKW/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75171 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-01-2014
• Assessment Year: misc
• Appeal Filed On: 04-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K RAM
• Assessee Lawyers: D MISHRA
• Keywords: Principle of natural justice
• Section: 56; 10

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.474/LKW/2011 A.Y.:2004 - 2005 SHRI C. P. MISHRA, 11/96, VIKAS NAGAR, LUCKNOW. PAN:ABFPM2181C VS. INCOME TAX OFFICER, RANGE - 1(3), LUCKNOW. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI D. MISHRA, ADVOCATE RESPONDENT BY SHRI R. K. RAM, D.R. DATE OF HEARING 06/01/2014 DATE OF PRONOUNCEMENT 3 0 /01/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT ( A) - I, LUCKNOW DATED 07/06/2011 FOR THE ASSESSMENT YEAR 2004 - 05. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. BECAUSE THE IMPUGNED ORDER DATED 07.06.2011 OF THE LEARNED CIT (APPEALS) IS BASED ON NO EVIDENCE AND IS A RESULT OF NON CONSIDERATION OF THE RELEVANT EVIDENCE OF THE RECORD AND THE LEARNED CIT (APPEALS) PASSED THE IMPUGNED ORDER WITHOUT CONSIDERING THE GRO UNDS OF THE APPEAL AND RECORDING FINDING ON EACH GROUND AND BASED HIS ORDER SOLELY ON REMAND REPORT OF THE ASSESSING OFFICER PREPARED BEHIND THE BACK OF THE APPELLANT AND LEARNED CIT (APPEALS) REFUSED TO CALL FOR THE RECORD OF THE ASSESSING OFFICER ON THE BASIS OF WHICH A.O. PASSED ORDER DATED 30.06.2011 UNDER CHALLENGE BEFORE THE CIT (APPEALS) AND AS SUCH IMPUGNED ORDER 07.06.2011 IS VIOLATIVE OF ARTICLE 2 14 OF THE CONSTITUTION AND THE PRINCIPLE OF NATURAL JUSTICE AND NOT ONLY THAT THE LETTER OF A.O. DATED 19.08,2010 QUOTED IN THE IMPUGNED ORDER DATED 07.06.2011 WAS NEVER SERVED ON THE APPELLANT AND ORDER OF THE A.O. DATED 30.11.2006 AND OF THE LEARNED CIT (APPEALS) DATED 07 . 06.2011 ARE BASED ON IRRELEVANT CONSIDERATION AND ON NO EVIDENCE AND ARE PERVERSE AN D IS AGAINST THE SETTLED LAW DECLARED BY THE HON'BLE SUPREME COURT IN (2006) 8 SCC 33 PARA - 7, 8 NARINDER SINGH VS. STATE OF HARYANA AND OTHERS AND 2013 (118) RD 58 (SC) PARA - 19 CHANDRADHOJA VS. STATE OF ORISSA AND OTHERS. 2. BECAUSE THE ORDER OF THE CIT (APPEALS) DATED 07.06 . 2011 IS BASED ON REMAND REPORT OF A.O. AND AS SUCH THE IMPUGNED ORDER OF CIT (APPEALS) IS UNSUSTAINABLE AND ILLEGAL BEING AGAINST THE SETTLED PRINCIPLE OF LAW LAID DOWN IN CONSTITUTION BENCH JUDGMENT (1978) 1 SCC 405 (PARA - 8, PAGE - 417 ) MOHINDER SINGH GILL VS. CHIEF ELECTION COMMISSIONER AND REITERATED IN 2013 (10) SCC 95 (PARA - 16) RASHMI METALIKS LIMITED AND ANOTHER VERSUS KOLKATA METROPOLITAN DEVELOPMENT AUTHORITY AND OTHERS TO THE EFFECT THAT AN ORDER OF STATUTORY AUTHORITY HAS TO BE TESTED BY THE RE ASONS MENTIONED THEREIN AND CAN NOT BE SUPPLEMENTED BY FRESH REASONS IN THE SHAPE OF AFFIDAVIT OR OTHERWISE. 3. BECAUSE THE VERY BASIS OF THE ORDER OF THE A.O. DATED 30.11.2006 AND OF THE LEARNED CIT (APPEALS) DATED 07.06.2011 ARE AGAINST FACTS ON RECORD AS LAND UNDER PERSONAL CULTIVATION OF THE APPELLANT TO THE TUNE OF 10.70 HECTARES AND UNDER HUF TO THE TUNE OF 10.6492 HECTARES ARE DIFFERENT AND ARE SITUATED IN DIFFERENT VILLAGES AND THERE IS NOT COMMONALITY OR OVERLAP ANY KIND AND IS EVI DENT FROM RECORD CONSISTENTLY FILED BEFORE THE A.O. AND CIT (APPEALS) AND THE PRESENT APPEAL AND IS APPARENT THE EXTRACT OF KHETAUNI AND KHETAUNI BEING RECORD OF RIGHTS IS THE CONCLUSIVE PROOF AS PROVIDED UNDER SECTION 57 OF THE U.P. LAND REVENUE ACT, 1901 AND SECTION 114 OF THE INDIAN EVIDENCE ACT, 1872. 4. BECAUSE AGRICULTURAL INCOME IS NOT INCOME AS DEFINE UNDER SECTION 2 (24) OF THE I.T. ACT, 1961 IS NOT INCLUDED IN TOTAL 3 INCOME AS PROVIDED UNDER SECTION 10 OF THE I.T. ACT, 1961 AND AGRICULTURAL INC OME IS NOT BEING INCOME IS NOT INCLUDED UNDER SECTION 14 OF THE I.T. ACT, 1961 AND AGRICULTURAL INCOME IS NOT INCOME FROM ANY BUSINESS OR PROFESSION AND AS SUCH IS NOT SUBJECT TO ANY BOOKS OF ACCOUNT AS PROVIDED UNDER SECTION - 44AA AND IT DOES NOT COME UNDE R THE PURVIEW OF INCOME FROM OTHER SOURCES AS GIVEN IN SECTION 56 OR ANY OTHER PROVISION OF THE I.T. ACT, 1961 AND IS BEYOND PURVIEW OF SECTION 143 (2) OF THE I.T. ACT AND NO ORDER CAN BE PASSED UNDER SECTION 143 (3) OF THE SAID ACT FOR AGRICULTURAL INCOME . 5. BECAUSE AGRICULTURE IS A STATE SUBJECT IN THE V II TH SCHEDULE OF THE CONSTITUTION AND IS EXEMPT FROM INCOME TAX AND NO LAW CAN BE MADE IN RESPECT OF AGRICULTURAL LAND BY THE UNION OF INDIA AND NO BOOK OF ACCOUNT IS PRESCRIBED FOR AGRICULTURAL INCOME U NDER ANY LAW FOR THE TIME BEING IN FORCE . 6. BECAUSE AGRICULTURE INCOME OF THE APPELLANT DURING THE THREE PREVIOUS ASSESSMENT YEARS WAS RS. 4 LACS, 4.25 LACS, & 4.50 LACS AND OF THE YEAR UNDER THE APPEAL AGRICULTURAL INCOME WAS RS. 4.30 LACS AND FACT AND LAW BEING THE SAME AS IN THE PREVIOUS ASSESSMENT YEARS I T CAN NOT BE PERMITTED TO DEPART FROM, THE DECISION ON AGRICULTURAL LAND IN PREVIOUS ASSESSMENT YEARS IN THE ASSESSMENT YEAR 2004 - 05 WHEN INCOME WAS EVEN LESS THAN THAT OF THE PREVIOUS ASSESSMENT YEAR 2003 - 04 AND THE ORDER OF THE A.O. DATED 30.11.2006 AND THE IMPUGNED ORDER DATED 07.06.2011 BY CIT (APPEALS) OF AGAINST THE LAW LAID DOWN IN THE CASE OF M/S. BHARAT SANCHAR NIGAM LIMITED VS. UNION OF INDIA [(2006)3 SCC PAGE 1] AND BOTH THE AFORESAID ORDER D ATED 30.11.2006 AND 07.06.2011 ARE UNSUSTAINABLE AS HELD IN THE HON'BLE SUPREME COURT IN PARA - 12, 17 COMMISSIONER INCOME TAX, CALCUTTA VS. DAULAT RAM RAWAT M AL (1973) 3 SCC 133 (1973) 2 SCR 184 - 1973 IT IR (87) PAGE - 349 . 7. BECAUSE THERE WAS NO MATERIAL B EFORE THE A.O. TO ISSUE NOTICE UNDER SECTION 143(2) TO THE APPELLANT ON THE BASIS OF CONJECTURE AND SURMISES AS RETURN FILED BY THE ASSESSEE CANNOT BE PRESUMED TO BE INCORRECT AS HELD IN (2007) 2 4 SCC 181 (PARA - 24) RAJESH KUMAR AND OTHERS VS CIT AND ANOTHER . 8. BECAUSE THE LEARNED CIT (APPEAL) DID NOT PUT ANY QUESTION IN REGARD TO THE LAND AND PRODUCE THEREOF THE ASSESSEE WHO APPEARED BEFORE THE CIT (APPEALS) ON 03.02.2011 ON HIS DIRECTION AND LEARNED CIT (APPEAL) ACTED BEYOND PLEDINGS AND FOR THAT REASON HIS ORDER IS ILLEGAL AS HELD IN (2004) 10 SCC 183 (PARA - 6) G.SATHI REDDY VS. DIPOT MANAGER. 9. BECAUSE IMPUGNED ORDER DATED 07.06.2011 BY CIT (APPEALS) DATED 20.11.2006 BY A.O. IS AGAINST THE SETTLED PRINCIPLE OF LAW IN PONDS INDIA LIMITED VS. CTT [(2008) 8 SCC 369]; AND UNION OF INDIA VS. GARWARE NYLONS LIMITED [(1996)10 SCC 413] TO THE EFFECT THAT BURDEN LIES ON THE AUTHORITY TO ESTABLISH THAT MATTER FALSE WITHIN THE TAXABLE CATEGORY AND RELEVANT PARAMETERS AND NOT ON THE ASSESSEE. 10. BECAUSE ANY ADVER SE MATERIAL ON RECORD ASSESSING OFFICER IS NOT E MPOWERED TO ISSUE NOTICE UNDER SECTION 142 OF THE INCOME TAX FOR SUCH FISHING INQUIRY AS HELD IN RAKESH KUMAR VS. DEPUTY COMMISSIONER INCOME TAX (2007) 2 SCC PAGE 181 AND RAMA BAI VS. COMMISSIONER OF INCOME T AX (1999) 3 SCC PAGE 30. 11. BECAUSE THE LEARNED CIT (APPEALS) AND THE A.O. VIOLATED THE LAW LAID DOWN HELD BY THE HON'BLE SUPREME COURT IN PARA - 12, 17 COMMISSIONER INCOME TAX, CALCUTTA VS. DAULAT RAM RAWAT MAL (1973) 3 SCC 133 = (1973) 2 SCR 184 = 1973 IT IR (87) PAGE - 349 TO THE EFFECT THAT DECISION C AN NOT BE BASED IN ADMISSIBLE MATERIAL OR CONJECTURE OR SURMISES AND THE LAID DOWN IN AIR 1956 SC 554 MEHATA PARIKH AND COMPANY VERSUS COMMISSIONER INCOME TAX BOMBAY AS WELL AS IN COMMISSIONER OF INCOME TAX C ALCUTTA VS. BIJU PATNAYAK [(1986)3 SCC PAGE 310 TO THE EFFECT THAT FACTS STATED BY THE APPELLANT AND AFFIDAVIT ON HIS BEHALF WERE ENOUGH AND UNCONTROVERTED STATEMENT AND UNCONTROVERTED AFFIDAVIT ON BEHALF OF APPELLANT WERE NOT UNDER CHALLENGE BY ANY MATERI AL ON BEHALF OF THE INCOME TAX DEPARTMENT AND AS SUCH HAS TO BE BELIEVED TO BE TRUTH 5 AND CORRECT AS HELD IN M/S J.K. COTTON SPINNING & WEAVING MILLS 1999 (82) FLR 709 AND THE HON'BLE COURT IN AIR 1956 SC 554 MESSRS MEHTA PARIKH & CO. VERSUS THE COMMISSIONE R OF INCOME - TAX, BOMBAY, AIR 1988 SC 2181 (PARA - 13) = (1988) 4 SCC 534 BHARAT SINGH VERSUS STATE OF HARYANA. 12. BECAUSE PROCEEDINGS UNDER THE INCOME TAX ACT, 1961 ARE JUDICIAL PROCEEDINGS AS PROVIDED UNDER SECTION 136 OF THE AFORESAID ACT AND ALL FORUM S INCLUDING A.O. AND COMMISSIONER (APPEALS) HAVE TO COMPLY WITH JUDICIAL PROPRIETY AND PROVISION OF THE AFORESAID ACT, THE LAW LAID DOWN BY THE HON'BLE HIGH COURT AND BY THE HON'BLE SUPREME COURT AND THE PRINCIPLE OF THE NATURAL JUSTICE ENSHRINED IN ARTICL E - 14 OF THE CONSTITUTION AND ANY DOCUMENT OR MATERIAL NOT SERVED' ON THE ASSESSEE CAN NOT BE RELIED UPON AND CONJECTURE AND SURMISES OR PERSONAL VIEWS CAN NOT FORM BASIS OF ANY ORDER OR FINDING. 3. ALTHOUGH THE ASSESSEE HAS RAISED AS MANY AS 12 GROUNDS IN ITS REVISED GROUNDS OF APPEAL FILED ON THE DATE OF HEARING I.E. 06/01/2014 BUT THE ONLY GRIEVANCE OF THE ASSESSEE IS REGARDING THE ADDITION MADE BY THE ASSESSING OFFICER OF RS.4.30 LAC S BY ASSESSING THE AMOUNT OF AGRICULTURAL INCOME CLAIMED BY THE ASSESSEE AS INCOME FROM OTHER SOURCES. 4. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE BEFORE US THAT AS PER THE EVIDENCE SUBMITTED BEFORE THE AUTHORITIES BELOW AND BEFORE THE TRIBUNAL IN THE PAPER BOOK, THE ASSESSEE WAS HAVING AGRICULTURAL LAND OF 10.70 HECTARES AND, THEREFORE, THE AMOUNT OF AGRICULTURAL INCOME CLAIMED BY THE ASSESSEE OF RS.4.30 LAC IS VERY MUCH REASONABLE AND THE SAME SHOULD BE ACCEPTED. HE ALSO SUBMITTED THAT ON PAGE NO . 4 OF THE PAPER BOOK IS A COMPARISON CHART OF SUCH AGRICULTURAL INCOME CLAIMED BY THE ASSESSEE IN THE PRESENT YEAR AS WELL AS IN THREE PRECEDING YEARS AND AS PER THE SAME , THE ASSESSEE DISCLOSED AGRICULTURAL INCOME OF RS.4 LAC IN ASSESSMENT YEAR 2001 - 02, RS.4.25 LAC IN ASSESSMENT YEAR 2002 - 03 AND RS.4.50 LAC IN ASSESSMENT 6 YEAR 2003 - 04 AS AGAINST RS.4.30 LAC IN PRESENT YEAR I.E. 2004 - 05. HE ALSO SUBMITTED THAT IN ALL THE PRECEDING YEARS, THE CLAIM OF THE ASSESSEE HAS BEEN ACCEPTED ALTHOUGH IN ASSESSMENT PR OCEEDINGS U/S 143(1) BUT THIS IS ALSO A FACT THAT NO ASSESSMENT OF ANY EARLIER YEARS HAS BEEN RE OPENED TILL DATE. 5. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATER IAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE FINDING OF LEARNED CIT ( A) AND OF THE ASSESSING OFFICER ARE ON THE BASIS THAT THE LAND STANDING IN THE NAME OF THE ASSESSEE WAS ONLY 0.79 HECTARES AND 0.326 HEC TARES AND THE OTHER LAND S ARE IN THE NAME OF FAMILY MEMBERS AND THEIR AGRICULTURAL INCOME FROM THOSE LANDS CANNOT BE CONSIDERED IN THE HANDS OF THE ASSESSEE. IN THIS REGARD, IT WAS EXPLAINED BY THE ASSESSEE THAT THE FAMILY MEMBERS OF THE ASSESSEE WERE NOT CARRYING OUT ANY AGRICULTURAL ACTIVITY AND THE ENTIRE ACTIVITY WAS CARRIED OUT BY THE ASSESSEE AND THE LAND WAS GIVEN BY THE FAMILY MEMBERS TO THE ASSESSEE FOR CULTIVATION WITHOUT CHARGING ANY LAND RENT AND, THEREFORE, THE AGRICULTURAL INCOME SHOULD BE AC CEPTED. WE FIND FORCE IN THE SUBMISSIONS OF LEARNED A.R. OF THE ASSESSEE AND, THEREFORE, WE HOLD THAT THE CLAIM OF THE ASSESSEE REGARDING AGRICULTURAL INCOME OF RS.4.30 LAC IN THE PRESENT YEAR SHOULD BE ACCEPTED PARTICULARLY WHEN THE ENTIRE FAMILY OF THE ASSESSEE WAS HAVING LAND TO THE EXTENT OF 10.70 HECTARES AND ALTHOUGH CERTAIN LANDS WERE STANDING IN THE NAME OF SONS OF THE ASSESSEE , I T WAS EXPLAINED THAT THE SONS WERE STUDYING AND WERE NOT CARRYING OUT ANY AGRICULTURAL ACTIVITY AND, THEREFORE, THEY PRO VIDED THESE LANDS TO THE ASSESSEE FOR CULTIVATION WITHOUT CHARGING ANY LAND REND AND THIS ARGUMENT OF THE ASSESSEE COULD NOT BE CONTROVERTED BY THE REVENUE. WE ALSO FIND THAT IN EARLIER YEARS ALSO, THE ASSESSEE WAS SHOWING SIMILAR AMOUNT OF AGRICULTURAL 7 I NCOME AND THE SAME STANDS ACCEPTED BY THE REVENUE ALTHOUGH IN COURSE OF ASSESSMENT PROCEEDINGS U/S 143(1). CONSIDERING ALL THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE CLAIM OF THE ASSESSEE SHOULD BE ACCEPTED IN THE PRESENT YEAR ALSO. WE ORDER ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 0 T H JANUARY, 2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR