M/s Fateh Resorts Pvt.Ltd, Chandigarh V. ITO Ward-1(4), Chandigarh

ITA 49/CHANDI/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3095 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-06-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 13-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEENAKSHI VOHRA CIT
• Keywords: Reason to believe
• Section: 43; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH SMC CHANDIGARH !', # BEFORE: SMT. DIVA SINGH, JM ./ ITA NO. 49/CHD/2020 / ASSESSMENT YEAR : 2008-09 M/S FATEH RESORTS PVT. LTD., H.NO. 2144, SECTOR 15-C, CHANDIGARH. VS THE ITO, WARD 1(4), CHANDIGARH. ./ PAN NO: AABCF0764C / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI PARIKSHIT AGGARWAL, C.A. # ! ' / REVENUE BY : SMT. MEENAKSHI VOHRA, ADDL. CIT $ % ! &/ DATE OF HEARING : 10.06.2021 '()* ! &/ D ATE OF PRONOUNCEMENT : 16.06.2021 HEARING CONDUCTED VIA WEBEX $%/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE WHEREIN THE CORRECTNESS OF THE ORDER DATED 31.10.2019 OF CI T(A)-I CHANDIGARH PERTAINING TO 2008-09 ASSESSMENT YEAR IS ASSAILED BY THE ASSESSEE ON VARIOUS GROUNDS. 2. HOWEVER, AT THE TIME OF HEARING, THE PARTIES ARG UED ONLY ON GROUND NO. 2 AS THE JURISDICTIONAL CHALLENGE RAISED BY THE ASSESSEE THEREON STOOD CONCLUDED IN ASSESSEE'S FAVO UR. IT NEEDS BE REFERRED THAT CONSISTENTLY OVER A PERIOD OF TIME , LD. AR HAD BEEN REQUESTING FOR ADJOURNMENT ON THE GROUND THAT THE ITAT IS SEIZED OF A SIMILAR GROUND ON SAME SET OF FACTS AND CIRCUMSTANCES ITA 49/CHD/2020 A.Y. 2008-09 PAGE 2 OF 5 AS IN THE PRESENT CASE IN A CONNECTED APPEAL. THE ORDER WAS STATED TO BE AWAITED. COPY OF THIS ORDER IS NOW AVA ILABLE. COPY OF THAT ORDER DATED 24.05.2021 IN ITA NO. 54, 55 AND 5 7/CHD/2020 IN THE CASE OF M/S FATEH SOFTECH PVT. LTD. , CHANDI GARH HAS BEEN FILED AND IS AVAILABLE AT PAPER BOOK PAGE 43 TO 59. ACCORDINGLY, TIME HAD BEEN GIVEN TO THE DEPARTMENT TO CONSIDER W HETHER GROUND NO.2 STATED TO BE COVERED IN ASSESSEE'S FAVO UR CAN BE SAID TO BE COVERED BY THIS ORDER OF THE ITAT. IN THIS B ACKGROUND, THE APPEAL CAME UP FOR HEARING ON THE NEXT DATE. 3. THE LD. AR INVITED ATTENTION TO COPY OF THE REAS ONS RECORDED IN THE CASE OF THE ASSESSEE WHICH IS PLACED AT PAPE R BOOK PAGE 36. 3.1 REFERRING TO THE COPY OF THE ORDER OF THE ITAT, ATTENTION WAS INVITED TO THE FACT THAT WHILE CONSIDERING THE APPE AL IN A CONNECTED CASE PERTAINING TO THE YEAR UNDER CONSIDE RATION ITSELF IN THE CASE OF M/S FATEH SOFTECH PVT. LTD. (SUPRA), IDENTICAL REASONS HAVE BEEN EXTRACTED IN THE ORDER IN PARA 4 (INTERNAL PAGE 4 OF THE ORDER, PAPER BOOK PAGE 46). THESE VERY FA CTS ON IDENTICAL REASONS RECORDED, IT WAS SUBMITTED, HAVE BEEN CONSIDERED BY THE ITAT IN PARA 5 (INTERNAL PAGE 5 O F THE AFORESAID ORDER AND PAPER BOOK PAGE 47). ACCORDINGLY, IT WAS HIS SUBMISSION THAT THE ISSUE IS IDENTICAL AND THE ASSE SSMENT ORDER FOLLOWING THIS ORDER, IT WAS HIS PRAYER MAY BE QUAS HED. IT WAS ITA 49/CHD/2020 A.Y. 2008-09 PAGE 3 OF 5 SUBMITTED THAT EVEN ON MERITS THE FACTS ARE IDENTIC AL AND THE ISSUE CAN BE DECIDED IN FAVOUR OF THE ASSESSEE. 4. THE LD. SR.DR WAS HEARD. ON A CONSIDERATION OF THE REASONS RECORDED IN THE YEAR UNDER CONSIDERATION, WHICH ARE AVAILABLE AT PAPER BOOK PAGE 36, IT WAS AGREED THAT THE VERY SAM E REASONS HAVE BEEN CONSIDERED IN PARA 4 AND 5 BY THE ITAT IN THE AFORESAID ORDER WHEREIN THE ASSUMPTION OF JURISDICT ION HAS BEEN QUASHED. IN THE CIRCUMSTANCES, APART FROM RELYING UPON THE ORDERS, IT WAS SUBMITTED THAT SHE WOULD HAVE NOTHIN G FURTHER TO STATE. 5. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MAT ERIAL ON RECORD. IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, ADMITTEDLY THE REASONS FOR RE-OPENING THE ASSESSMEN T BY ISSUANCE OF NOTICE U/S 147/148 ARE AS UNDER : REASON FOR RE-OPENING THE CASE U/S 147/148 OF THE INCOME TAX ACT, 1961 AN INFORMATION WAS RECEIVED FROM THE DEPUTY DIRECTO R OF INCOME TAX (INVESTIGATION)-II, CHANDIGARH VIDE HIS OFFICE LETT ER NO. 3575 DATED 02.03.2015 THAT ABOVE NOTED ASSESSEE HAD BEEN EVADI NG RENTAL INCOME FROM HOUSE PROPERTY. ON PERUSAL OF RETURN OF THE SAID ASSESSEE COMPANY F OR A.Y. 2008-09, IT IS OBSERVED THAT FIXED ASSETS HAVE BEEN SHOWN AT RS . 5,45,40,085/- BUT NO INCOME UNDER ANY HEAD HAS BEEN SHOWN EXCEPT AGRICUL TURE INCOME OF RS. 1,69,000/- THEREFORE, I HAVE REASON TO BELIEVE THAT THE RENTAL INCOME FROM THE HOUSE PROPERTY HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147/148 OF IT ACT, 1961 FOR A.Y. 2008-09. SD/- (ANKIT JAIN) INCOME TAX OFFICER WARD-1(4), CHANDIGARH ITA 49/CHD/2020 A.Y. 2008-09 PAGE 4 OF 5 6. IT IS SEEN THAT IN CONNECTED CASE OF M/S FATEH S OFTECH P.LTD. (SUPRA), THIS VERY ISSUE CAME UP FOR CONSIDERATION BEFORE THE ITAT WHERE VIDE PARAS 4 & 5 RE-OPENING HAS BEEN QUASHED HOLDING AS UNDER : 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER ( IN SHO RT AO) RECORDED THE FOLLOWING REASONS FOR RE-OPENING OF THE ASSESSM ENT : REASON FOR REOPENING THE CASE U/S 147/ 148 OF THE INCOME TAX ACT. 1961 AN INFORMATION WAS RECEIVED FROM THE DEPUTY DIRECTO R OF-. INCOME- TAX (INVESTIGATION)-II, CHANDIGARH VIDE HIS OFFICE LETT ER NO. 3578 DATED 02.03.2015 THAT ABOVE NOTED ASSESSEE HAD BEEN EVADING RENTAL INCOME FROM HOUSE PROPERTY. ON PERUSAL OF RETURN OF THE SAID ASSESSEE COMPANY F OR A.Y. 2008-09J IT IS OBSERVED THAT FIXED ASSETS HAVE BEEN SHOWN AT RS.36,29,120/- BUT NO INCOME UNDER ANY HEAD HAS BEEN SHOWN EXCEPT AGRICULTURE INCOME OF RS.L,2G .GQM- THEREFORE, I HAVE REASON TO BELIEVE THAT THE RENTAL INCOME FROM THE-HOUSE PROPERTY HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTIO N 147(A) OF IT ACT, 1961 FOR A.Y. 2008-09. 5. A PERUSAL OF THE ABOVE REASONS REVEAL THAT THE A O OBSERVED THAT THE ASSESSEE HAD SHOWN FIXED ASSETS OF RS. 36.29 LACS B UT HE HAD NOT OFFERED ANY INCOME FROM THE SAID PROPERTY EXCEPT AGRICULTUR E INCOME OF RS. 1,20,00,000/-. THIS, IN MY VIEW IS A VAGUE REASON. MERELY POSSESSION OF A FIXED ASSET DOES NOT MEAN THAT THE ASSESSEE MIGHT H AVE EARNED ANY INCOME FROM THE SAID ASSET WHICH WOULD HAVE ESCAPED ASSESS MENT. ADMITTEDLY THE ASSESSEE OWNS AGRICULTURAL LAND WHERE UPON CERTAIN CONSTRUCTION HAS BEEN MADE BY THE ASSESSEE. IT HAS BEEN USED FOR ITS OWN PURPOSES. THE REASONS RECORDED BY THE ASSESSING OFFICER DO NOT DISCLOSE T HAT THE ASSESSEE HAS USED ANY OF HIS ASSETS FOR ANY BUSINESS OR RENTAL PURPOS ES. THE FORMATION OF BELIEF BY THE AO IN THIS CASE REGARDING THE ESCAPEM ENT OF INCOME OF THE ASSESSEE, IN MY VIEW IS BASED ON JUST ASSUMPTIONS A ND PRESUMPTIONS AND THERE WAS NO RELIABLE MATERIAL AVAILABLE WITH THE A O TO FORM THE BELIEF THAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT. IN THIS VIEW, RE- OPENING OF THE ASSESSMENT IN THIS CASE, IN MY VIEW IS BAD IN LAW AND THE SAME IS THEREFORE QUASHED. ITA 49/CHD/2020 A.Y. 2008-09 PAGE 5 OF 5 7. IN THE PECULIAR FACTS AND CIRCUMSTANCES IN THE A BSENCE OF ANY CHANGE IN FACT OR ARGUMENT FOLLOWING THE ORDER OF THE ITAT, GROUND NO. 2 RAISED BY THE ASSESSEE IS ALLOWED AND THE ASSESSMENT ORDER IS QUASHED. 8. THOUGH THE LD. AR SOUGHT TO ARGUE THE APPEAL ON MERITS STATING THAT IT IS ALSO FULLY COVERED BY THE AFORES AID ORDER, HOWEVER, SINCE THE ASSESSMENT IS QUASHED, THE DISCU SSION OF THE ISSUE ON MERITS BECOMES REDUNDANT. ACCORDINGLY, GR OUND NO. 2 OF THE ASSESSEE IS ALLOWED. SAID ORDER WAS PRONOUNC ED AT THE TIME OF VIRTUAL HEARING ITSELF IN THE PRESENCE OF THE PA RTIES VIA WEBEX. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED TO THE ABOVE EXTENT. ORDER PRONOUNCED ON 16 TH JUNE,2021. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER ' ( / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / CIT 4. ( )/ THE CIT(A) 5. , , / DR, ITAT, CHANDIGARH 6. / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR