PUSHPA K. SINGHVI, MUMBAI V. ITO 11(3)(2), MUMBAI

ITA 4963/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92437 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 01-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: R K BOTHRA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 4963/MUM/2013 ( / ASSESSMENT YEAR : 2009 - 10 MRS. PUSHPA K. SINGHVI, R.K. BOTHRA, 3/37, TARDEO A.C. MARKET, MUMBAI - 400 034 / VS. THE ITO - 11(3)(2), WARD 11(3)(2), MUMBAI ./ ./ PAN/GIR NO. : AAVPS 7698K ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI R.K. BOTHRA / RESPONDENT BY : SHRI PREMANAND J / DATE OF HEARING : 20 . 0 4 .2015 / DATE OF PRONOUNCEMENT : 24 .0 4 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 20, MUMBAI DT. 17.4.2013 PERTAINING TO ASSESSMENT YEAR 2009 - 10. 2. THE ASSESSEE HAS RAISED 3 SUBSTANTIVE GROUNDS OF APPEAL. WITH GROUND NO. 1, THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT ORDER STATING THAT THE AO HAS SURPASS HIS JURISDICTION BY EXTENDING THE AREA OF SCRUTINY WITHOUT PRIOR PERMISSION OF HIGHER AUTHORITY. ITA. NO. 4963/M/2013 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL , PRACTICING PROFESSION OF ADVOCACY. THE RETURN WAS FILED ON 17.7.2009 DECLARING TOTAL INCOME OF RS. 16,12,709/ - . THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER CASS. AFTER EXAMINING THE DETAILS RELATING TO INCOME FROM PROFESSION, INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES, THE AO COMPLETED THE ASSESSMENT BY ACCEPTING INCOME FROM HOUSE PROPERTY AT R S. 2,24,280/ - , INCOME FROM PROFESSION WAS COMPUTED AT RS. 7,06,074/ - AFTER MAKING DISALLOWANCES OUT OF MOTOR CAR EXPENSES AND TELEPHONE EXPENSES AND TAKING INCOME FROM OTHER SOURCES AT RS. 10,62,807/ - AND AFTER ALLOWING DEDUCTION UNDER CHAPTER VIA, THE TOT AL INCOME WAS COMPUTED AT RS. 18,68,161/ - . 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND STRONGLY CONTENDED THAT THE AO HAS SURPASS ED THE JURISDICTION BY EXTENDING THE AREA OF SCRUTINY BEYOND CASS. THE LD. CIT(A) DID NOT ACCEPT THIS SUBMIS SION MADE BY THE ASSESSEE HOLDING THAT THE ASSESSEE HAS NOT POINTED OUT AS TO HOW THERE IS A VIOLATION OF LAW BY THE AO. 5. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE AO HAS SURPASS ED HIS JURISDICTIO N BY NOT FOLLOWING THE NORMS LAID DOWN BY THE CBDT FOR SCRUTINY SELECTION UNDER CASS AND THE LD. CIT(A) GROSSLY ERRED IN CONFIRMING SUCH ORDER OF THE AO. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUBMITTED THAT THE ISSUES CONSIDERED BY THE AO ARE DIRECTLY LINKED WITH THE REASONS FOR TAKING THE RETURN UNDER CASS FOR SCRUTINY ASSESSMENT , THEREFORE , THERE IS NO ERROR IN THE ORDER OF THE LD. CIT(A). ITA. NO. 4963/M/2013 3 7. LET US CONSIDER THE CBDT INSTRUCTION WHICH READ AS UNDER: F NO. 225/26/2006 - ITA II ( PT) GOVERNMENT OF INDIA, MIN. OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES NEW DELHI DATED THE 8 TH SEPTEMBER, 2010 TO: ALL CHIEF COMMISSIONERS OF INCOME TAX, ALL DIRECTORS GENERAL OF INCOME TAX SIR, MADAM, SELECTION OF CASES FOR SCRUTINY ON THE BASIS OF DATA IN AIR RETURNS AND SUBSEQUENT ASSESSMENT PROCEEDINGS - REGARDING. REFERENCE IS INVITED TO BOARDS LETTER OF EVEN NUMBER DATED 23 RD MAY, 2007 REGARDING SCOPE OF ENQUIRY IN THE SCRUTINY CASES SELECTED ONLY ON THE BASIS OF INFORMA TION RECEIVED THROUGH THE AIR RETURNS. THE ABOVE MENTIONED GUIDELINES HAVE BEEN RECONSIDERED BY THE BOARD AND IT HAS BEEN DECIDED THAT THE SCRUTINY OF SUCH CASES WOULD BE LIMITED ONLY TO THE ASPECTS OF INFORMATION RECEIVED THROUGH AIR. HOWEVER, A CASE M AY BE TAKEN UP FOR WIDER SCRUTINY WITH THE APPROVAL OF THE ADMINISTRATIVE COMMISSIONER, WHERE IT IS FELT THAT APART FROM THE AIR INFORMATION THERE IS A POTENTIAL ESCAPEMENT OF INCOME MORE THAN RS. 10 LACS. IT HAS ALSO BEEN DECIDED THAT IN ALL THE CASES W HICH ARE PICKED FOR SCRUTINY ONLY ON THE BASIS OF AIR INFORMATION, THE NOTICE U/S. 143(2) OF INCOME TAX ACT 1961 SHOULD CLEARLY BE STAMPED WITH AIR CASE THIS SHOULD BE IMMEDIATELY BROUGHT TO THE NOTICE OF ALL THE OFFICERS WORKING IN YOUR REGION. YOURS FAITHFULLY, (AJAY GOYAL) DIRECTOR (ITA.II) ITA. NO. 4963/M/2013 4 8. A PERUSAL OF THE AFORESTATED INSTRUCTION SHOWS THAT THE AO CAN WIDEN THE SCOPE OF SCRUTINY , EVEN IF IT IS SELECTED FOR SCRUTINY ASSESSMENT UNDER CASS. HOWEVER, THE CONDITION PRECEDENT FOR SUCH ACTION OF THE AO IS THAT HE HAS TO SEEK PRIOR APPROVAL OF HIGHER AUTHORITIES. FURTHER, THERE SHOULD BE FEELING THAT THERE IS A POTENTIAL ESCAPEMENT OF INCOME OF MORE THAN 10 LAKHS. A PERUSAL OF THE REASONS FOR SCRUTINY SELECTION AS SUBMITTED BY THE LD. DR SHOWS THAT THE RETURN OF ASSESSEE WAS SELECTED TO SCRUTINIZE (I) THE AO SHOULD EXAMINE THE SOURCES OF EXPENDITURE/INVESTMENTS INCLUDING INFORMATION FROM AIR VIS - - VIS (II) TAXABILITY OF SALE OF PROPERTY AS REPORTED IN AIR SHOULD BE EXAMINED BY THE AO. IF WE CONSIDER THE REASON FOR SCRUTINY SELECTION IN THE LIGHT OF THE ASSESSMENT ORDER UNDER APPEAL, WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL THAT THE AO HAS SURPASSED HIS JURISDICTION BY EXTENDING THE AREA OF SCRUTINY. OUR VIEW IS ALSO FORTIFIED BY THE FACT T HAT THE AO HAS NOT MENTIONED AS TO WHEN THE PERMISSION FROM THE ADMINISTRATIVE COMMISSIONER WAS SOUGHT TO MAKE FURTHER ENQUIRIES IN THE CASE OF THE ASSESSEE. A SIMILAR ISSUE WAS DECIDED BY THE TRIBUNAL MUMBAI BENCH IN THE CASE OF INDUS THERMAL SYSTEM PVT. LTD. VS ACIT IN ITA NO. 2943/M/2013 AND BY THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF AMAL KUMAR GHOSH VS ACIT 105 DTR (CAL) 351. AS THE FACTS OF THE CASE IN HAND ARE IDENTICAL TO THE FACTS OF THE CASES REFERRED TO HEREINABOVE, RESPECTFULLY FOLL OWING THE REFERRED DECISIONS AND CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) BY DECIDING GROUND NO. 1 IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE HOLDING THAT THE ASSESSMENT ORDER IS BAD IN L AW. 9. AS WE HAVE HELD THAT ORDER PASSED BY THE AO IS WITHOUT JURISDICTION, WE DO NOT FIND IT NECESSARY TO DECIDE THE OTHER ISSUES RAISED IN THE APPEAL. ITA. NO. 4963/M/2013 5 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. OR DER PRONOUNCED IN THE OPEN COURT ON 24 TH APRIL , 2015 SD/ - SD/ - ( I.P. BANSAL ) (N.K. BILLAIYA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 24 TH APRIL , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI