Smt Madhu Singh, Daltonganj V. DCIT CIRCLE-1, Ranchi

ITA 50/RAN/2017

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8697 (ITAT-RANCHI)
• Duration Of Justice: 5 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 24-08-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 26-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Procedural lapse; Revised return; Set aside
• Section: 147; 148; 144; 80C; 234B; 250; 292BB; 143(2); 64; 48; 13

Judgement Text

आयकर अपीलीय अधिकरण र ांची 'डीबी' पीठ, कोलक त म ें IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI ‘DB’ BENCH AT KOLKATA [वच च ु अल कोर् ु ] [Virtual Court] श्री सांजय गग ु , न्य धयक सदस्य एवां डॉ. मनीष बोरड, ल े ख सदस्य क े समक्ष Before SRI SANJAY GARG, JUDICIAL MEMBER & DR. MANISH BORAD, ACCOUNTANT MEMBER I.T.A. Nos.: 47, 48 & 50/Ran/2017 Assessment Years: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh...................................................Appellant [PAN: BBJPS 0426 B] Vs. DCIT, Circle-1, Ranchi...........................................Respondent Appearances by: Sh. Devesh Kumar, Adv., appeared on behalf of the Assessee. Sh. Pranob Kumar Koley, Sr. D/R, appeared on behalf of the Revenue. Date of concluding the hearing : August 25 th , 2022 Date of pronouncing the order : November 10 th , 2022 आद े श ORDER Per Manish Borad, Accountant Member: The captioned appeals filed by the assessee pertaining to the Assessment Years (in short “AY”) 2006-07, 2008-09 & 2010-11 are I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 2 of 18 directed against separate orders passed u/s 250 of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals), Ranchi [in short ld. “CIT(A)”] dated 07.11.2016, 10.11.2016 & 11.11.2016 respectively. 2. First, we take ITA No. 47/Ran/2017 for AY 2006-07. The assessee is in appeal before this Tribunal raising the following grounds of appeal: “1. For that Ld. CIT(A) was not justified in treating gross receipt of Rs. 15,88,386/- as income from other sources. Appellant had disclosed income of Rs.2,70,170/- from dairy and fisheries business being carried since last many years. Ld. CIT(A) was not justified in treating the gross receipt as income. Income disclosed by the appellant being reasonable, same should have been accepted from business instead of treating income from other sources. 2. For that Ld. CIT(A) was not justified in treating the income from agriculture amounting to Rs.28,400/- as income from other sources. 3. For that the appellant had disclosed capital opening balance of Rs. 12,78,557/-stood invested for dairy business and appellant's investments in the Balance Sheet filed. Ld. CIT(A) treated the opening capital as income of Sri Kamlesh Singh, husband of the appellant on substantive basis. Ld. A.O. had added the opening capital on protective basis in the hands of the appellant. There was no justification for treating opening capital balance as investment of Sri Kamlesh Singh. 4. For that Ld. CIT(A) was not justified in not considering the ground relating to initiation of proceedings u/s 147. Appellant filed the Return of Income which was accepted. Proceedings were initiated by issue of notice u/s 148 on 19.01.2009, recorded reasons for initiation of proceedings were not given, provision of section 151 was not followed and no addition whatsoever has been made in assessment suggesting any escapement of income. As such, initiation of proceedings itself is ab-initio void. 5. For that Ld. A.O. was not justified in charging interest u/s 234A and 234B on the assessed income. Interest should be charged on the returned income following the decision of Hon'ble Jharkhand High Court. I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 3 of 18 6. For that other grounds in detail will be argued at the time of hearing.” 3. At the outset, ld. Counsel for the assessee submitted that the re-assessment proceedings carried out in the case of the assessee are invalid and bad in law as they have been initiated solely on the basis of tax evasion petition and there is no application of mind by ld. AO prior to recording of the reasons. It was also submitted that no addition has been made on the basis of reasons recorded and therefore, the assessment is bad in law. It was also submitted that the addition which was partly made on the basis of the reasons recorded has subsequently been deleted by ld. CIT(A) by its order dated 07.11.2016 and therefore, once the foundation addition has been deleted no subsequent addition can have legs to stand. Reliance placed on the decision of the Coordinate Bench of Pune in the case of Meenakshi Dhanaji Patil vs. ITO in ITA No. 1600/Pun/2019 dated 30.05.2022. 4. Per contra ld. D/R vehemently argued supporting the orders of both the lower authorities. 5. We have heard rival contentions and perused the records placed before us. We notice that the case of the assessee who is an individual, was re-opened by issuance of notice u/s 148 of the Act on 19.01.2019 recording the reason that "It is seen that Smt. Madhu Singh has not shown any asset in her return of income. Tax evasion petition has been received alleging substantial tax evasion by her. As per the information received that Smt. Madhu Singh has acquired a land property at Bhitta village measuring 25 katha for Rs. 7,19,000/- on 07.02.2006. Therefore, I have reasons to believe that income chargeable to tax has escaped assessment for AY 2006- I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 4 of 18 07. Hence, case is re-opened u/s 147 of the I.T. Act and accordingly notice is issued u/s 148 of the Act." 6. After recording the above reasons and carrying out the re- assessment proceedings, ld. AO firstly denied to accept that the assessee is in dairy business and accordingly added the gross receipts as income from other sources. Agricultural income claimed at Rs. 28,400/- was treated as income from other sources. Capital of Rs. 10,91,064/- was treated as unexplained investment of assessee's husband and added in her hands. Similar was the case for capital investment in dairy business at Rs. 12,78,577/- which was also added on protective basis in the hands of the assessee. As regards unexplained assets, addition was made only at Rs. 2,19,000/- for understatement of investment in fixed assets and that too on protective basis in the hands of the assessee. Accordingly against the income declared by the assessee at Rs. 1,70,170/-, income assessed at Rs. 42,63,072/-. 7. We further, find that since the case of the assessee has been re-opened u/s 148 of the Act, as per the settled judicial precedence, first it has to be examined that whether the reasons recorded by ld. AO were correct and whether any addition has been made on account of such reasons because if addition is not made on the basis of reasons recorded or the reasons recorded are found to be incorrect then such re-assessment proceedings will be invalid and bad in law and no other additions can be made. 8. Now, on perusal of the reasons referred above, the only issue mentioned is the information received from tax evasion petition and secondly, about undisclosed asset in the form of immovable I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 5 of 18 property i.e. land measuring 25 katha at Bhitta village. Now, firstly we notice that ld. AO has merely referred to tax evasion petition received by the Department which is the basis for the notice. There is no individual application of mind by ld. AO prior to recording the reasons. Nowhere the satisfaction has been drawn by ld. AO for the amount of income escaped or the enquiry conducted by him. Under similar circumstances, such initiation of proceedings u/s 148 of the Act are held to be bad in law. Coordinate Bench Delhi in the case of Shri Ashok Arora vs. ITO in ITA No. 1894/Del/2012 dated 18.05.2016 after considering the facts and circumstances of the case and settled judicial precedence, held the re-assessment proceedings as not sustainable in the eyes of law observing as follows: “10. Now, adverting to the case at hand, in view of the law laid down by the Hon’ble Supreme Court in Chhugamal Rajpal vs. S.P. Chaliha (supra) and Hon'ble jurisdictional High Court in G & G Pharma Limited (supra) discussed in the preceding paras, we are of the considered view that initiation of the proceedings u/s 147 of the Act by the AO in this case on the basis of tax evasion petition are itself bad in law as the AO has not satisfied himself before initiating the proceedings that income of the assessee has escaped assessment for the following reasons: (i) that AO has merely proceeded to initiate proceedings u/s 147 of the Act on the basis of tax evasion petition that the assessee has provided loan of Rs.2,50,000/-and Rs.3,00,000/- to Mr. Deepak and Mr. Sanjay respectively; (ii) that the AO has merely forwarded the intimation contained in the tax evasion petition to the assessee without recording any reasons whatsoever; (iii) that the AO has not even came to prima facie conclusion that the alleged loan transaction between the assessee and Deepak and Sanjay were genuine transactions and as to what are the findings returned by the Id. Civil Court in the alleged suit filed by the assessee; I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 6 of 18 (iv) that the AO has admittedly not recorded that he has reason to believe that the income of Rs.5,50,000/- has escaped assessment and he has satisfied himself before initiating the proceedings u/s 147 of the Act; (v) that when the AO without recording any reason for reopening forwarded the information received by way of tax evasion petition, according of approval by CIT for reopening is also a mechanical exercise without applying the mind and as such, approval accorded by the CIT is also not sustainable. Reliance in this regard is placed upon judgment in case of Vijay Rameshbhai Gupta vs. ACIT - (2013) 32 taxman.com 41 (Guj.). (vi) that even after initiation of the proceedings u/s 147/148, the AO has failed to lay hand on the evidence if Sanjay has received a sum of Rs.2,50,000/- in cash as advance from Amita Arora, w/o Ashok Arora, rather resorted to the best judgment assessment u/s 144 of the Act; (vii) that neither the AO has applied his mind to satisfy himself to reopen the case nor he has investigated the matter during reassessment proceedings nor CIT had applied his mind before according approval for reopening. 11. In view of what has been discussed above, since the initiation of the proceedings u/s 147 of the Act and consequent assessment framed u/s 143(3)/ 147 have held to be not sustainable in the eyes of law, grounds raised by the assessee challenging the addition of Rs.2,50,000/- made by the AO and confirmed by the Id. CIT (A) u/s 68 of the Act has since become infructuous. Resultantly, present appeal filed by the assessee is hereby allowed.” 9. On perusal of the above decision of the Tribunal, we find that since ld. AO has not made application of his mind and initiated re- assessment proceedings solely on the basis of tax evasion petition the re-assessment proceedings in the instant case for AY 2006-07 are held as invalid and bad in law. 10. Even otherwise, if we take the basis of the reason of undisclosed assets at Rs. 7,19,000/-, we find that while carrying out the re-assessment proceedings, ld. AO accepted that the I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 7 of 18 alleged asset i.e. 25 katha of land at Bhitta village has been disclosed by the assessee in its balance sheet showing the investment of Rs. 5 lakh in the said land. Ld. AO only made the addition for the excess amount of the cost of land i.e. 2,19,000/-. Basis of this addition is the difference between the market value as per the Stamp Valuation Authorities and the amount disclosed by the assessee. The basic presumption of ld. AO was that the assessee has not disclosed the assets is faulty. It clearly indicates that ld. AO has not examined the return of income filed by the assessee in the regular course on 01.08.2007 before issuing the notice u/s 148 of the Act. The addition made by ld. AO at Rs. 2,19,000/- was subsequently deleted by ld. CIT(A) in its appellate order dated 07.11.2016 and as held by the Coordinate Bench of ITAT Pune in the case of Meenakshi Dhanaji Patil (supra) if the foundation addition itself gets deleted in an appeal, then the other additions made by ld. AO would automatically seize to stand in isolation. For arriving at this finding, the Tribunal followed the judgment of Hon'ble Delhi High Court in the case of CIT vs. Adhunik Niryat Ispat Ltd. (2011) 63 DTR 212 (Del.). 11. We, therefore, respectfully following the decisions referred herein above and also considering the facts and circumstances of the case, are inclined to hold that the notice issued u/s 148 of the Act and re-assessment proceedings carried out thereafter u/s 147 of the Act are invalid, bad in law and liable to be quashed. We accordingly quash the assessment order framed u/s 147 of the Act dated 13.12.2009 for AY 2006-07 and allow the legal issue raised by the assessee in ground no. 4 of the instant appeal. I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 8 of 18 12. As regards ground nos. 1, 2 & 3 raised by the assessee on merits of the case, dealing with the same, will be merely academic in nature as we have already quashed the re-assessment proceedings, therefore, these grounds are held to be infructuous. 13. Ground nos. 5 & 6 are general in nature which need no adjudication. 14. In the result, the appeal filed by the assessee for AY 2006-07 is allowed. 15. Now, we will take up ITA No. 48/Ran/2017 for AY 2008-09 wherein the assessee has raised the following additional ground of appeal: “1. For that Ld. CIT(A) was not justified in treating the income from dairy and fisheries business as income from other sources. 2. For that initiation of proceedings u/s 147 was unjustified and illegal since no specific escapement of income was found. The alleged investment in landed property made by the appellant was disclosed in her Balance Sheet and there was no addition for escapement of income or investment. 3. For that Ld. CIT(A) was not justified in confirming addition of Rs.6,00,000/- on the ground that investment was not shown in her Balance Sheet. The appellant had disclosed investment of Rs.6,70,000/- including registration expenses in her Balance Sheet, as such, addition made is unjustified and illegal. 4. For that Ld. CIT(A) was not justified in confirming an addition of Rs.13,06,517/-u/s 68 of the Income Tax Act on substantive basis in the hands of the appellant. Appellant received loan from Sri Kamlesh Singh, her husband which was duly disclosed in his Balance Sheet and was confirmed. Ld. CIT(A) added the amount of loan on protective basis in the hands of the appellant. Since the amount of loan stands proved, there was no justification in making addition u/s 68. 5. For that Ld. CIT(A) was not justified in confirming an addition of Rs.36,36,346/-as income from other sources. Appellant had disclosed I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 9 of 18 long term capital gain on the sale of shares which were purchased earlier and long term capital gain was exempt u/s 10(38). Documents for purchase/sale were filed. Ld. A.O. failed to point out any defect or infirmity in the documents submitted to suggest that the transaction for sale of shares was bogus. On hearsay grounds and on general gossips regarding manipulation may have been done by some brokers to create exempt long term capital gain. The genuine transaction made by the appellant cannot be considered as income from other sources instead of long term capital gain. 6. For that Ld. A.O. was not justified in charging interest u/s 234A and 234B on the assessed income. Interest should be charged on the returned income following the decision of Hon'ble Jharkhand High Court. 7. For that other grounds in detail will be argued at the time of hearing.” Additional ground taken by the assessee: “1) For that no notice U/s 143(2) in response to the return filled in proceedings U/s 148. Since no notice U/s 143(2) has been issued, the order of assessment stands to be without valid jurisdiction and thus is fit to be quashed.” 16. At the outset, ld. Counsel for the assessee submitted that the assessment proceedings u/s 147 of the Act dated 31.12.2011 are liable to be quashed as valid notice u/s 143(2) of the Act was not issued and served upon the assessee and therefore, in view of the ratio laid down by the Hon'ble Supreme Court of India in the case of ACIT vs. Hotel Blue Moon reported in [2010] 321 ITR 362 (SC) the re-assessment proceedings are liable to be quashed. 17. Per contra ld. D/R submitted that the assessee has participated in the re-assessment proceedings and therefore, as per Section 292BB of the Act it shall be deemed that any notice under any provisions of this Act, which is required to be served upon him, has been duly served upon him any time in accordance with the provisions of this Act. I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 10 of 18 18. We have heard rival contentions and perused the records placed before us. Validity of the re-assessment proceedings are challenged by the assessee on the ground that statutory notice u/s 143(2) of the Act was not issued and served upon the assessee before commencing the re-assessment proceedings. It remains an admitted fact that after the issuance of notice u/s 148 of the Act for re-opening of the assessment assessee was not served upon with the notice issued u/s 143(2) of the Act and only notice u/s 142(1) of the Act was issued with the questionnaire. Now, under the given facts and circumstances of the case where a valid notice u/s 143(2) of the Act had not been issued and served upon the assessee whether the re-assessment proceedings can be held to be valid needs to be examined in the light of judicial pronouncements. 19. We find that Hon'ble Supreme Court of India in the case of Hotel Blue Moon (supra) has already settled the position of law holding that the omission on the part of ld. AO of issuing notice u/s 143(2) of the Act cannot be termed as procedural irregularity and that the same is not curable and therefore, the requirement of notice u/s 143(2) of the Act cannot be dispensed with. Further, the contention of ld. D/R that since the assessee has attended and cooperated in the re-assessment proceedings, provisions of Section 292BB of the Act will apply, we find that Hon'ble Kerala High Court in the case of Travancore Diagnostics (P.) Ltd. vs. ACIT reported in [2016] 74 taxmann.com 239 (Kerala) has adjudicated this issue along with referring to the judgment of Hon'ble Supreme Court of India in the case of Hotel Blue Moon (supra) and has held as follows: “32. It is virtually admitted by the Revenue that no notice under Section 143(2) had been issued. In Hotel Blue Moon's case (supra), I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 11 of 18 the Hon'ble Supreme Court has already settled the position of law the omission on the part of the Assessing Officer under Section 143(2) cannot be a procedural irregularity and that the same is not curable and that therefore, the requirement of notice under Section 143(2) cannot be dispensed with. This emphatic statement of law, in the absence of issuance of a notice under Section 143(2) by the Revenue, would, therefore, inure to the benefit of the assessee, even though as noticed above, we are not impressed by the contention that he was not aware of the proceedings under Section 143 for the assessment year 2009-10. However, when the statute makes it imperative that notice under Section 143(2) is to be issued, the omission or failure would then hit at the root of the jurisdiction applying the principles enunciated in Anisminic Ltd. v. Foreign Compensation Commission [1969] 2 AC 147, which has been approved by the Hon'ble Supreme Court in several judgments. 33. The extended question then is whether even if the assessee is deemed to have participated in the proceedings under Section 143, even without the Assessing Officer having issued the mandatory notice, would the Revenue be entitled to the benefit provided under Section 292BB of the Act. Section 292BB creates an estoppel against the assessee in claiming that no notice has been served on him, if he has participated in the proceedings. However, the said section does not in any manner grant any privilege to the Assessing Officer in dispensing with the issuance of a notice under Section 143(2) of the Act. Since the jurisdiction under Section 143 is founded on the issuance of a notice under Section 143(2), the assessing officer could have assumed jurisdiction only after issuing a notice under Section 143 (2). Even the participation of the assessee would not provide the benefit under Section 292BB to the Revenue. The requirement that a notice be issued is mandatory and the Assessing Officer has no other option but to issue the notice before commencing the jurisdiction. Here, we draw support from the judgment of the Hon'ble Supreme Court in Asstt. CIT v. Greater Noida Industrial Development Authority [2015] 379 ITR 14 (All.), wherein it was held as under: "Section 148(1) provides for service of notice as a condition precedent to making the order of assessment. Once a notice is issued within the period of limitation, jurisdiction becomes vested in the Income-tax Officer to proceed to reassess. The mandate of section 148(1) is that reassessment shall not be made until there has been service. The requirement of issue of notice is satisfied when a notice is actually issued." I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 12 of 18 34. The only benefit that Section 292BB obtains to the assessing officer is that after the issuance of such notice the assessee appears and participates in the proceedings, then he shall not he heard, subject to the proviso to the said section, that he had not been properly served with notice. We have no hesitation in holding that the Assessing Officer can claim and avail the benefit under Section 292BB and the assessee will be burdened by the rigour of estoppel contained therein only after a notice under Section 143(2) had been validly issued. When it is virtually admitted that no such notice had been issued, the Assessing Officer loses even the authority to enter into the jurisdiction under Section 143 and the participation or otherwise of the assessee would be of no avail. It is here that the words of Rowlat, J. vide supra in paragraph 5 of this judgment assumes climataric importance because in taxation nothing is to be intended and nothing can be presumed. If a notice under Section 143(2) has not been issued, the Assessing Officer cannot claim the benefit under Section 292BB and the claim that the earlier notice extracted in paragraph 29 of the judgment was intended to be the notice issued under Section 143(2) and that substantial compliance under Section 143(2) must be inferred, cannot be countenanced. 35. From the records available before us, we are unable to understand why a notice under Section 143(2) was not issued for the year 2009-10 when the same was issued for the year 2010-11. The order sheet, Annexure-A2 annexed along with the papers in ITA 221/2015, shows that the Assessing Officer was aware of the need for issuance of the said notice as early as in April 2012. The only reason for not issuing a Section 143(2) notice has been recorded by him in the order sheet as "it is not possible to generate notice under Section 143(2) through an AST, since the assessee has not filed the return electronically". The order sheet further shows that the assessee was again requested to file their return in response to Section 148 electronically. This conduct of the Assessing Officer is rather surprising and it defies logic, since the assessee cannot be forced and coerced to file their return electronically so as to then enable the Assessing Officer to issue a notice under Section 143(2) of the Act. This is more so because even in the absence of such an electronic return for the year 2010-11, the Assessing Officer had in fact issued the mandatory notice for that year on 11.01.2012. It is beyond comprehension that even though the Assessing Officer had time till 30.09.2011 to issue notice under Section 143(2) and even though he had recorded the reasons for assuming jurisdiction under Section 147 for re-assessment on 21.09.2011, he had still not chosen to issue the I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 13 of 18 notice which would have then given him the jurisdiction to continue with the proceedings. We are unable to obtain any reasons to these omissions and it is rather distressing, as we have recorded in the opening lines of the judgment, that on account of this omission and non-compliance of mandatory and imperative provisions, the assessee would now be entitled to reliefs which they otherwise would not have able to obtain. We have, therefore, no other option but to hold in the absence of a Section 143(2) notice, proceedings of assessment initiated, conducted and completed for the year 2009-10 will have to fail but for the year 2010-11, since the proceedings have been continued on the basis of a validly issued Section 143(2) notice, same is being upheld.” 20. Similar view was also taken by Hon'ble Delhi High Court in the case of PCIT vs. Shri Jai Shiv Shankar Traders (P.) Ltd reported in [2015] 64 taxmann.com 220 (Delhi) wherein Hon'ble Court held that failure by ld. AO to issue a notice to the assessee under Section 143(2) of the Act when the assessee made a statement before ld. AO to the fact that the original return filed should be treated as the return pursuant to the notice under Section 148 of the Act, is fatal to the order of re-assessment and therefore, Hon'ble Court found no legal infirmity in the order of the Tribunal quashing the re-assessment proceedings for want of issue of notice u/s 143(2) of the Act. 21. Respectfully following the above decisions and the ratio laid down by the Hon'ble Supreme Court of India in the case of Hotel Blue Moon (supra) which is squarely applicable on the facts of the present case, we hold that since ld. AO failed to issue and serve valid notice u/s 143(2) of the Act, the re-assessment proceedings carried out are invalid, bad in law and liable to be quashed. 22. As regards remaining ground grounds raised by the assessee on merits of the case, dealing with the same, is merely academic I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 14 of 18 in nature as we have already quashed the re-assessment proceedings, therefore, the same are held to be infructuous. 23. In the result, the appeal filed by the assessee for AY 2008-09 is allowed. 24. Now, we will take ITA No. 50/Ran/2017 for AY 2010-11. The assessee has raised the following grounds of appeal: “1. For that Ld. CIT(A) was not justified in treating income from dairy and fisheries disclosed at Rs.3,67,136/- as income from other sources. 2. For that appellant paid more than Rs. 1,50,000/- towards housing loan interest to HDFC Bank which was fully verifiable. In course of assessment, appellant claimed deduction which was denied by Ld. A.O. and action was confirmed by Ld. CIT(A). Ld. CIT(A) erred in dismissing the ground raised. 3. For that the appellant claimed exemption of Rs. 1,00,000/- under Chapter VIA which was not entertained. Ld. CIT(A) also dismissed the claim of the appellant which was based on facts genuine payments which was permissible for deduction. Merely because by ignorance appellant failed to claim the deductions as mentioned in Ground-2 and deduction under Chapter-VIA Ld. CIT(A) was not justified in rejecting the claim on the ground that in absence of revised return claim cannot be allowed. Disallowance of claim is unjustified, arbitrary and illegal. 4. For that other grounds in detail will be argued at the time of hearing.” 25. Ld. Counsel for the assessee stated that as regards ground no. 1 against the action of ld. CIT(A) confirming the action of ld. AO of treating income from dairy and fisheries at Rs. 3,67,136/- as income from other sources. It was submitted that such activities have been carried out regularly in the past under the sole proprietorship concern named M/s. Satya Sai Enterprises and I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 15 of 18 since the alleged amount is the income of the assessee, ld. AO failed to consider it as income of assessee’s husband. 26. Per contra ld. D/R vehemently argued supporting the orders of both the lower authorities. 27. We have heard rival contentions and perused the records placed before us. We find that the assessee has disclosed income of Rs. 6,34,220/- in her return of income for AY 2010-11 filed on 26.03.2010. As regarding the income from dairy and fisheries activities, the assessee claimed to be carrying out business under the name of her sole proprietorship concern M/s. Satya Sai Enterprises. Similar type of income has been offered by the assessee in her income tax return in the past for many years and have been accepted by the Revenue authorities. It is also brought to our notice that the assessee has offered the income as net profit on the gross profit of the dairy and fisheries business more than 8% of such gross receipts. Also this claim of the assessee remains uncontroverted by the Revenue authorities that copies of agreement, work contract, land lease deeds, copies of bills were filed before ld. AO to show that business activities were carried out. Further, the lower authorities failed to point out any specific defect in the documents submitted by the assessee. Under these given facts and circumstances of the case the action of ld. AO of adding the income in the hands of the assessee’s husband as undisclosed income cannot be held to be justified. We, therefore, set aside the finding of ld. CIT(A) and hold that the income at Rs. 3,67,136/- has been rightly shown as income from dairy and fisheries. Ld. AO I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 16 of 18 erred in treating this as income from other sources. In the result, ground no. 1 raised by the assessee is allowed. 28. As regards ground nos. 2 & 3 raised by the assessee, it is stated that she forgot to claim the deduction of housing loan interest payment at Rs. 1,50,000/- and deduction under Chapter VIA for repayment of principal amount of housing loan in the return of income and nor could file the revised return but ld. AO denied the claim which was made by her in the revised computation of income filed during the course of re-assessment proceedings. Ld. Counsel for the assessee placed reliance on the judgment of Hon'ble Karnataka High Court in the case of PCIT vs. Karnataka State Co-operative Federation Ltd. reported in [2021] 128 taxmann.com 1 (Karnataka) wherein the Hon'ble Court after considering the judgment of Hon'ble Supreme Court of India in the case of Goetze (India) Ltd. vs. CIT reported in [2006] 284 ITR 323 (SC) held that the authorities have the power to entertain such claim at their discretion. 29. Per contra ld. D/R vehemently argued supporting the orders of both the lower authorities. 30. We have heard rival contentions and perused the records placed before us. We find that the assessee has revised the computation of income and has claimed the deduction of interest on borrowed capital on house property u/s 24(1(vi) of the Act at Rs. 1,50,000/- and deduction u/s Chapter 80C of the Act for housing loan principal repayment at Rs. 1 lakh. It is an admitted fact that the assessee did not make this claim in the original return of income nor the assessee filed any revised return of income but, I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 17 of 18 the assessee made this claim during the course of assessment proceedings by filing a revised computation of income but this claim of the assessee was rejected. However in view of the ratio laid down by Hon'ble Karnataka High Court in the case of Karnataka State Co-operative Federation Ltd. (supra), we accept the contention of the assessee and restore this issue raised in ground nos. 2 & 3 of this appeal to ld. AO for examining the correctness of the claim made by the assessee u/s 24(1)(vi) and Section 80C of the Act on the basis of documents to be furnished by the assessee in support of the said claim and if the same is found to be correct, necessary deduction may be allowed in accordance with law. In the result, ground nos. 2 & 3 are allowed for statistical purposes. 31. Ground no. 4 is general in nature which needs no adjudication. 32. Thus, the appeal filed by the assessee in ITA No. 50/Ran/2017 for AY 2010-11 is partly allowed for statistical purposes. 33. In the result, the appeals filed by the assessee in ITA Nos. 47 & 48/Ran/2017 for AY 2006-07 & 2008-09 are allowed and ITA No. 50/Ran/2017 is partly allowed for statistical purposes. Kolkata, the 10 th November, 2022. Sd/- Sd/- [Sanjay Garg] [Manish Borad] Judicial Member Accountant Member Dated: 10.11.2022 Bidhan (P.S.) I.T.A. Nos.: 47, 48 & 50/Ran/2017 AYs: 2006-07, 2008-09 & 2010-11 Smt. Madhu Singh. Page 18 of 18 Copy of the order forwarded to: 1. Smt. Madhu Singh, Hamidganj, Daltonganj-822 101. 2. DCIT, Circle-1, Ranchi. 3. CIT(A), Ranchi. 4. CIT- 5. CIT(DR), Ranchi Bench, Ranchi. True copy By order Assistant Registrar ITAT, Kolkata Benches Kolkata