Shashwat Agarwal, V. Income Tax Officer, Kanpur

ITA 522/LKW/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100356 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-08-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 09-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reassessment proceedings
• Section: 148

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.522 & 523/LKW/2014 ASSESSMENT YEAR: 2000 01 & 2001 02 SHRI SASWAT AGARWAL, 215, DELHI CHAMBERS, DELHI GATE, DELHI 110002. PAN:ABUPA2590C VS. ITO 4 (3), KANPUR (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI RAKESH GARG, ADVOCATE REVENUE BY SHRI AMIT NIGAM, SR. DR DATE OF HEARING 13/08/2015 DATE OF PRONOUNCEMENT 1 1 /09/2015 O R D E R PER A. K. GARODIA, A.M. BOTH THESE APPEALS ARE FILED BY THE ASSESSEE DIRECTED AGAINST TWO SEPARATE ORDERS OF LEARNED CIT (A) I KANPUR BOTH DATED 31.03.2014. 2. AS PER IDENTICAL GROUNDS NO. 1 & 2 IN BOTH YEARS, THE GRIEVANCE IS REGARDING VALIDITY OF NOTICE U/S 148 READ WITH SECTION 147. 3. LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE REASONS RECORDED BY THE A.O. ARE AVAILABLE ON PAGE 11 OF THE PAPER BOOK. HE FURTHER SUBMITTED THAT THE RETURN OF INCOME FOR A.Y. 2000 01 WAS FILED IN AUGUST 2000 AND THE ACKNOWLEDGMENT IS AVAILABLE ON PAGE 4 OF THE PAPER BOOK FOR THAT YEAR AND SIMILARLY, THE RETURN OF INCOME FOR A.Y. 2001 02 WAS FILED ON 03.10.2001 AND THE ACKNOWLEDGMENT FOR THIS YEAR IS ALSO AVAILABLE ON PAGE 4 OF THE PAPER BOOK FOR THAT YEAR. HE FURTHER SUBMITTED THAT THE REASONS ARE 2 RECORDED ON 15.10.2001 AND IN THE REASONS, THE A.O. SAYS THAT RETURNS OF INCOME FOR THESE TWO YEARS WERE NOT FILED BY THE ASSESSEE. HE SUBMITTED THAT SINCE THE RETURN FOR BOTH YEARS WE RE FILED BY THE ASSESSEE PRIOR TO THIS DATE I.E. 15.10.2001, THE BASIS OF THE A.O. TO HAVE REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IS WRONG THAT RETURNS WERE NOT FILED. HE ALSO SUBMITTED THAT THE A.O. HAS INITIATED THE REOPENING PROCEEDINGS W ITHOUT APPLICATION OF MIND AND THEREFORE, THE SAME IS NOT VALID. IN THIS REGARD, HE PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - A) RICH CAPITAL & FINANCIAL SERVICES LIMITED VS. ITO IN ITA NO. 230/ LKW/2012 DATED 30.06.2015 (PAPER BOOK PAGES 2 TO 28). B) RICH CAPITAL & FINANCIAL SERVICES LIMITED VS. ITO IN ITA NO. 508/ LKW/2010 DATED 29.09.2010 (PAPER BOOK PAGES 29 TO 40). C) RICH CAPITAL & FINANCIAL SERVICES LIMITED VS. ITO IN ITA NO. 246/ LKW/2009 DATED 18.11.2009 (PAPER BOOK PAGES 41 TO 106). 4. LEARNED DR OF THE REVENUE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND FORCE IN THE SUBMISSIONS OF THE LEARNED AR OF THE ASSESSEE BECAUSE WE FIND THAT ALTHOUGH RETURN OF INCOME FOR BOTH YEARS WERE FILED BY THE ASSESSEE BEFORE 15.10.2001 WHEN THE A.O. RECORDED REASONS FOR REOPE NING BUT IN THESE REASONS, THE A.O. SAYS THAT THE ASSESSEE DID NOT FILE RETURN OF INCOME FOR THESE TWO YEARS. HENCE, IT IS APPARENT THAT THERE IS NO APPLICATION OF MIND BY THE A.O. BECAUSE HE HAS NOT EVEN BOTHERED TO ASCERTAIN THE FACT AS TO WHETHER THE AS SESSEE HAS FILED RETURN OF INCOME OR NOT. WE ALSO FIND THAT IN THE CASE OF RICH CAPITAL & FINANCIAL SERVICES LIMITED VS. ITO (SUPRA) ALSO, THE REOPENING WAS BASED ON THE INFORMATION RECEIVED FROM ADDL. DIT TO THE EFFECT THAT THE ASSESSEE HAS MADE HUGE CASH DEPOSITS AND THE ASSESSEE HAS FAILED TO PROVE THE SOURCE OF CASH DEPOSITS. UNDER THESE FACTS, IT WAS HELD BY THE TRIBUNAL IN ITA NO. 246/LKW/2009 (PARA 18 OF THAT TRIBUNAL ORDER) 3 THAT THE FACTS ON THE BASIS OF REPORT RECEIVED FROM ADDL. DIT WAS NOT SUFFIC IENT FOR ARRIVING AT THE CONCLUSION THAT THE DEPOSITS REPRESENTED UNEXPLAINED INCOME OR IN OTHER WORDS, THE AO HAD JUST SUSPICION IN HIS MIND AND INITIATION OF REASSESSMENT PROCEEDINGS ON THE BASIS OF MERE SUSPICION IS NOT VALID IN THE EYES OF LAW. AFTER M AKING THIS OBSERVATION, THE TRIBUNAL HELD THAT THE REOPENING WAS BAD IN LAW AND THIS TRIBUNAL ORDER IN A. Y. 2000 01 IN THAT CASE WAS FOLLOWED IN OTHER YEARS. IN THE PRESENT CASE ALSO, THE REOPENING IS MERELY ON THE BASIS OF REPORT RECEIVED FROM ADIT (IN V.) 2 , KANPUR AND THERE IS NO APPLICATION OF MIND BY THE A.O. BECAUSE THE A.O. IN THE PRESENT CASE HAS NOT EVEN BOTHERED TO LOCATE THE INCOME TAX RETURNS FILED BY THE ASSESSEE FOR THESE YEARS AND HE PROCEEDED ON THIS BASIS THAT RETURNS FOR THESE TWO YEA RS WERE NOT FILED BY THE ASSESSEE BUT THE FACT IS THIS THAT THESE TWO RETURNS WERE FILED BY THE ASSESSEE PRIOR TO THE DATE OF RECORDING OF REASONS. HENCE, IN THE PRESENT CASE, THIS ISSUE IS FULLY COVERED IN FAVOUR OF THE ASSESSEE BY THESE TRIBUNAL ORDERS I N THE CASE OF RICH CAPITAL & FINANCIAL SERVICES LIMITED VS. ITO (SUPRA) AND RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT REOPENING IN THE PRESENT CASE IS NOT VALID IN BOTH YEARS. 6. IN VIEW OF OUR DECISION IN THE ABOVE PARA, THE GROUNDS ON MERIT OF THE AD DITIONS OF RS. 421,500/ - IN A.Y. 2000 01 AND RS. 469,500/ - IN A.Y. 2001 02 DO NOT CALL FOR ANY ADJUDICATION. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE 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: 1 1 /09/2015 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