ACIT, Uttar Pradesh V. Smt. Sunita Chopra, Saharanpur

ITA 4984/DEL/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5284 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 16-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 21-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Loose papers; Principle of natural justice
• Section: 133A

Judgement Text

1 ITA NO.3918/DEL/2010 IN THE INCOME TAX APPELLATE TRIBUNA L DELHI BENCH: G NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEM BER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A .NO.5121/DEL/20 12 (A.Y 2009-10) SUNITA CHOPRA C/O. M/S. SANJAY & SANJAY, CA 15, KISHORE BAGH, DELHI ROAD SAHARANPUR AHFPC3855K (APPELLANT) VS ACIT CIRCLE SAHARANPUR, INCOME TAX OFFICE, DELHI ROAD SAHARANPUR (RESPONDENT) ITA NO.4984/DEL/20 12 (A.Y 2009-10) ACIT CIRCLE SAHARANPUR, UTTAR PRADESH (APPELLANT) VS SUNITA CHOPRA PROP. M/S. NEW CHOPRA FIRE WORKS, AMBALA ROAD SAHARANPUR AHFPC3855K (RESPONDENT) APPELLANT BY SH. SANJAY KUMAR, CA RESPONDENT BY SH. N. K. BANSAL, SR. DR ORDER PER SUCHITRA KAMBLE, JM THESE TWO APPEALS ARE FILED AGAINST THE ORDER DATED 27/6/2012 PASSED BY CIT(A)- MUZAFFARPUR. 2. THE GROUND OF APPEAL ARE AS UNDER:- (ITA NO. 1512/DEL/2012) 1. BECAUSE, THE CIT(APPEALS) HAS EXCEEDED HIS AUTHORITY AND JURISDICTION AS IS CONFERRED ON HIM U/S 251(1)(A) O F THE ACT IN DATE OF HEARING 25.05.2017 DATE OF PRONOUNCEMENT 01.08.2017 2 ITA NO.3918/DEL/2010 MAKING/GIVING VARIOUS OBSERVATIONS/DIRECTIONS AS AP PEARING AT PAGE 14 OF THE APPEAL ORDER DATED 27/6/2012 , COMMENCING FROM ADMITTEDLY, 2. BECAUSE OBSERVATIONS MADE/DIRECTIONS GIVEN IN TH E APPEAL ORDER DATED 27/6/2012 AS REFERRED TO ABOVE, ARE WHOLLY UNCALLED FOR AN EXTRANEOUS IN DECIDING THE APPEAL/SUBJECT MATTER OF APPEAL BEFORE HIM AND THE SAME ARE LIABLE TO BE QUASHED. 3. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY T O THE PRINCIPLES OF NATURAL JUSTICE. (ITA NO. 4984/DEL/2012) 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.33,03,4 72/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF SURRENDERED INCOME OF RS.40,00,000/- DURING THE COURSE OF SURVEY BY IGNOR ING THE FACT THAT THE ASSESSEE SUBMITTED A LETTER DATED 19/5/2008 TO THE THEN ADDL. COMMISSIONER OF INCOME TAX, RANGE, SAHARANPUR IN CO NNECTION WITH SURVEY CONDUCTED AT HER PREMISES ON 7/5/2008 STATIN G THEREIN THAT SHE WAS SURRENDERING A SUM OF RS.40,00,000/- AS HER INCOME OTHER THAN RGULAR INCOME SUBJECT TO NO PENAL ACTION. ACC ORDINGLY SURRENDER OF RS.40,00,000/- MADE BY THE ASSESSEE WAS RIGHTLY ADDED TO THE INCOME OF THE ASSESSEE FOR ASSESSMENT YEAR 2009-10. 3. THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FR OM TRADING OF CRACKERS. RETURN DECLARING INCOME OF RS.6,96,528/- ALONG WITH AGRICULTURAL INCOME OF RS. 40,000/- WAS FILED ON 16.03.2010. SURVEY U/S. 133A OF THE INCOME TAX ACT, 1961 WAS CONDUCTED ON 08.05.2008. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER VIDE LETTER DATED 23.12.2011 POINTED OUT TO THE ASSESSEE THAT AT THE TIME OF SURVEY U/S. 133A O F THE ACT IN HER BUSINESS PREMISES, AN AMOUNT OF RS. 40 LACS WAS SURRENDERED BY HER IN ADDITION TO THE NORMAL INCOME. HOWEVER, A PERUSAL OF RETURN OF INCO ME SHOWED THAT THE ASSESSEE HAD FILED RETURN ON 16.03.2010 SHOWING NET TOTAL INCOME OF RS. 8,78,730/- WHICH INCLUDED AMOUNT SURRENDERED AT RS. 6,96,528/-. THE 3 ITA NO.3918/DEL/2010 ASSESSEE WAS ACCORDINGLY REQUIRED TO SHOW CAUSE AS TO WHY THE DIFFERENCE OF RS. 33,03,472/- BE NOT ADDED TO HER INCOME. IN RESPONSE , THE ASSESSEE SUBMITTED THAT IT WAS CORRECT THAT A SURVEY WAS CONDUCTED U/S 133A OF THE ACT AND DURING THE COURSE OF SURVEY, LOOSE PAPERS AND OTHER DOCUME NTS WERE IMPOUNDED U/S. 131(3) OF THE ACT WHICH RELATED TO PERIOD OF A.YS. 2007-08, 2008-09 AND 2009- 10. THE ASSESSEE AGREED TO SURRENDER THE AMOUNT OF RS. 40 LACS AND PAID THE AMOUNT OF RS. 3 LACS AS TAX FOR A.Y. 2008-2009. TH E ASSESSEE SUBMITTED THAT THE DEPARTMENT WOULD HAVE ACCEPTED THE SURRENDER OF RS. 40 LACS IN AY 2009- 10, THERE WOULD NOT HAVE BEEN ANY BURDEN OF INTERES T WHICH WAS PAYABLE IN THE PRECEDING AYS. 2007-08, 2008-09. IN SPITE OF SUCH B URDEN, THE ASSESSEE HAD AGREED FOR THE ASSESSMENT FOR AYS. 2007-08 TO 2009- 10. AS PER ASSESSEE SHE WAS A WIDOW WHO HAD FOR THE FIRST TIME STARTED BUSI NESS OF CRACKERS IN AY 2007-08. SHE WAS NOT HAVING KNOWLEDGE OF TAXATION A T ALL. THE ASSESSING OFFICER MENTIONED THAT THE ASSESSEE REVISED HER RET URNS OF PREVIOUS YEARS WHICH WERE PROCESSED AS BELATED RETURNS AND PROCEEDINGS WERE FILED. THE ASSESSEE PRESSED THE DEPARTMENT TO REGULARIZE HER RETURNS FI LED FOR THE PREVIOUS YEARS DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSING OF FICER HELD THAT THE SURRENDER WAS ALWAYS MADE FOR THE YEAR IN WHICH IT WAS CONDUCTED AND NOT FOR OTHER YEARS. FURTHER, IF THE ASSESSEE WANTED TO BIF URCATE THE SURRENDER IN DIFFERENT YEARS, IT COULD BE POSSIBLE ONLY IF A STA TEMENT WAS RECORDED TO SUCH EFFECT WITH THE CONSENT OF THE AUTHORISED OFFICER B UT SUCH WAS NOT A CASE WITH THE ASSESSEE. THUS, THE ASSESSING OFFICER ADDED THE DIFFERENCE OF RS. 33,30,472/- TO THE INCOME OF THE ASSESSEE. THE ASSE SSING OFFICER ALSO ADDED THE AMOUNT OF RS. 40,000/- TO THE INCOME OF THE ASS ESSEE UNDER THE HEAD INCOME FROM OTHER SOURCES. 4. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFOR E THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE ON THE FI RST ISSUE WITH THE DIRECTION TO THE ASSESSING OFFICER THAT INVESTIGATION BE DONE FO R A.Y. 2008-09 AND 2009-10 AND DISMISSED THE SECOND ISSUE. 4 ITA NO.3918/DEL/2010 5. THE LD. AR SUBMITTED THAT WHILE DISPOSING OF THE APPEAL FOR AY 2009-10 THE CIT(A) DIRECTED THE AO TO IMMEDIATELY TAKE REME DIAL ACTION FOR AY 2008-09 I.E. FOR THE PERIOD/ YEAR WHICH WAS NOT IN APPEAL B EFORE HIM. THEREFORE, THE CIT(A) EXCEEDED HIS JURISDICTION, WHILE GIVING SUCH DIRECTION. THE POWERS OF THE CIT(A) AS PER SECTION 251 OF THE ACT WAS ONLY TO TH E EXTENT OF CONFIRMING, REDUCING, ENHANCING OR ANNULLING THE ASSESSMENT. TH E LD. AR FURTHER SUBMITTED THAT THERE IS NO MENTION IN THE SAID SECT ION ABOUT THE DIRECTION TO THE ASSESSING OFFICER TO FRAME THE ASSESSMENT IN A PARTICULAR MANNER. THE LD. AR RELIED UPON THE DECISION OF THE ITAT, LUCKNOW IN CASE OF SMT. UMA GOENKA VS. ACIT (ITA NO. 421/LKW/2011 A.Y. 2001-02 ORDER D ATED 24.08.2012). 6. THE LD. DR RELIED UPON THE ORDERS OF THE ASSESSI NG OFFICER AND CIT(A). THE LD. DR SUBMITTED THAT THE CIT(A) HAS RIGHTLY GI VEN THE DIRECTIONS TO THE ASSESSING OFFICER FOR INVESTIGATION. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS. THE DIRECTION OF THE CIT(A) THAT OF DIRECTING THE AO TO IMMEDIATELY TAKE REMEDIAL ACTION FOR AY 2008-09 I.E. FOR THE PERIOD/ YEAR WHI CH WAS NOT IN APPEAL BEFORE HIM IS NOT AS PER POWERS BESTOWED UPON THE CIT(A) U NDER SECTION 251 OF THE ACT. THE SOLE ISSUE RAISED BEFORE US IS WITH REGA RD TO THE POWERS OF THE CIT(A). THE DIRECTIONS GIVEN TO ASSESSING OFFICER AS RELATI NG TO CONDUCTING FURTHER INQUIRY DOES NOT COME UNDER THE PURVIEW OF THE POWE RS UNDER SECTION 251 OF THE INCOME TAX ACT, 1961. AND THUS THE DIRECTION OF THE CIT(A) TO THE ASSESSING OFFICER TO CONDUCT FURTHER INQUIRY IS BAD IN LAW. R ELEVANT EXTRACT OF SECTION 251 OF THE INCOME TAX ACT, 1961 REPRODUCED HEREINBELOW: 251. POWERS OF THE COMMISSIONER (APPEALS).- (1) IN DISPOSING OF AN APPEAL, THE COMMISSIONER (APPEALS) SHALL HAVE THE FOLLOWING POWERS (A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT, HE MAY CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESSMENT; 5 ITA NO.3918/DEL/2010 THE WORDS OR HE MAY SET ASIDE WAS OMITTED BY THE FINANCE ACT, 2001 W.E.F. 1.06.2001. WHILE DISPOSING OF THE APPEAL FOR AY 2009-10 THE CIT(A) DIRECTED THE AO TO IMMEDIATELY TAKE REMEDIAL ACTION FOR AY 2008-09 I.E. FOR THE PERIOD/ YEAR WHICH WAS NOT IN APPEAL BEFORE HIM. TH EREFORE, THE CIT(A) EXCEEDED HIS JURISDICTION, WHILE GIVING SUCH DIRECT ION. THE POWERS OF THE CIT(A) AS PER SECTION 251 OF THE ACT WAS ONLY TO THE EXTEN T OF CONFIRMING, REDUCING, ENHANCING OR ANNULLING THE ASSESSMENT. THERE IS NO MENTION IN THE SECTION 251 ABOUT THE DIRECTION TO THE ASSESSING OFFICER TO FRA ME THE ASSESSMENT IN A PARTICULAR MANNER. THUS, THE CIT(A) OVERRIDE HIS PO WERS GIVEN UNDER SECTION 251 OF THE ACT. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED. 8. AS ON MERITS, IT CAN BE SEEN THAT DURING THE ASS ESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE DEPARTMENT WOULD HAVE A CCEPTED THE SURRENDER OF RS. 40 LACS IN AY 2009-10, THERE WOULD NOT HAVE BEE N ANY BURDEN OF INTEREST WHICH WAS PAYABLE IN THE PRECEDING AYS. 2007-08, 20 08-09. THE ASSESSING OFFICER MENTIONED IN THE ASSESSMENT ORDER THAT THE ASSESSEE REVISED HER RETURNS OF PREVIOUS YEARS. THE ASSESSEE PRESSED THE DEPARTMENT TO REGULARIZE HER RETURNS FILED FOR THE PREVIOUS YEARS DURING THE ASSESSMENT PROCEEDINGS, BUT THE SAME WAS NOT REGULARIZED BY THE ASSESSING OFFIC ER. THE CIT(A) CLEARLY MADE AN OBSERVATION IN HIS ORDER THAT THE ASSESSEE DISC LOSED RS. 25,46,528/- AS HER BUSINESS INCOME AGAINST THE SURRENDER OF RS. 40 LAC MADE BY HER. THE CIT(A) FURTHER OBSERVED THAT THE SURRENDER OF RS. 18,50,00 0/- MADE BY THE ASSESSEE IN A.Y. 2008-09 AND NIL SURRENDER MADE IN A.Y. 2007-08 , AND EXCESS STOCK OF RS. 36,29,000/- AS ON 31.03.2008 WAS ADMITTED BY THE AS SESSEE ON THE DAY OF THE SURVEY OPERATION. THE FACT THAT MAJOR TRANSACTIONS TOOK PLACE DURING A.Y. 2008- 09 AND ONLY 38 DAYS INVOLVED FOR A.Y. 2009-10, THE SURRENDER OF RS. 6,96,528/- MADE BY THE ASSESSEE IN RESPECT OF HER BUSINESS WAS ACCEPTED BY THE CIT(A). ONCE THE SAID TRANSACTION IS ACCEPTED BY THE CIT(A) AS WELL AS NOT DISPUTED BY THE ASSESSING OFFICER. THUS, THE FINDING OF THE CIT (A) THAT THE PURCHASES TO THE TUNE OF RS. 1,11,31,650/- ARE REFLECTED IN THE DOCU MENTS AGAINST THE DISCLOSED PURCHASES OF RS. 33,68,610/- ONLY IN THE PROFIT AN D LOSS ACCOUNT FOR A.Y. 2008- 6 ITA NO.3918/DEL/2010 09 WAS CORRECT AND THERE IS NO NEED TO INTERFERE WI TH THE SAME. THUS, THE APPEAL OF THE REVENUE IS DISMISSED. 9. IN RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST AUGUST, 2017 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 01/08/2017 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 25/05/2017 PS 2. DRAFT PLACED BEFORE AUTHOR 26/05/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 7 ITA NO.3918/DEL/2010 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 02.08.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 0 2 .0 8 .2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.