ITO, GONDA V. Shri Suhail Ahmad Niyazi, GONDA

ITA 524/LKW/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70541 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 31-05-2013
• Assessment Year: misc
• Appeal Filed On: 08-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. PRAMOD KUMAR, ACCOUNTANT MEMBER ITA NO.524/LKW/2011 ASSESSMENT YEAR:2005-06 INCOME TAX OFFICER GONDA V. SHRI. SUHAIL AHMAD NIYAZI VILL. CHISTIPUR KHORAHASA, G ONDA PAN:AIJPA9107D ( A PP ELLANT ) ( RES P ONDENT ) APPELLANT BY: SMT. RANU BISWAS, D.R. RES P ONDENT B Y : SHRI. A. P. SINHA, ADVOCATE DATE OF HEARING: 31.05.2013 DATE OF PRONOU NCEMENT: 07.08.2013 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY TH E REVENUE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON VARIOU S GROUNDS WHICH ARE AS UNDER:- 1. THAT THE ID. CIT(A)- II, LUCKNOW HAS ERRED ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW IN ALLOWING RELIEF OF RS.11,36,387/- BY ANNULLING TH E ASSESSMENT FIRST AND THEN DELETING THE ADDITIONS MADE IN THE ASSESSMENT ON MERITS. 2. THAT THE ORDER OF ID. CIT(A)- II, LUCKNOW IS BASED ON PERVERSE READING OF SECTION 69, SECTION 142 AND SECTION 147 AND CITING OF IRRELEVANT AND INAPPLICABLE CASE LAWS. CIT(A)-II, LUCKNOW HAS RELIED ON THE WRITTEN SUBMIS SION OF THE ASSESSEE THAT IS :-2-: MERE CONJECTURES AND NOT BASED ON FACTS. 3. THAT THE ORDER DATED 03-06-2011 PA SSED BY THE ID. CIT(A)-II, LUCKNOW IN APPEAL NO.115/141/ ITO/GONDA/08-09 RELATING TO ASSESSMENT YEAR 2005-06 BEING ERRO NEOUS IN LAW AND ON FACTS DESERVES TO BE CANCE LLED AND ORDER OF THE A.O. DESERVES TO BE RESTORED. 2. DURING THE COURSE OF HEARING, TH E LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO TH E ORDER OF THE LD. CIT(A) WITH THE SUBMISSION THAT WHILE QUASHING THE REOPENING OF ASSE SSMENT FOR ASSESSMENT YEAR 2005-06, THE LD. CIT(A) HAS FOLLOWED THE EA RLIER ORDER OF THE LD. CIT(A) FOR ASSESSMENT YEAR 2003-04. COPY OF THE ORDER OF THE LD. CIT(A) FOR ASSESSMENT YEAR 2003-04 IS PLACED ON RECORD WHEREF ROM IT IS NOTICED THAT REOPENING WAS DONE AT THE INSTANCE OF THE INCOME TAX INSPECTOR FOR MAKING VERIFICATION WITH REGARD TO THE INVESTMENT IN PROPERTY. THE LD. CIT(A) HAS KNOCKED DOWN THE REOPENIN G OF ASSESSMENT ON THE GROUND THAT THE PROCEEDINGS FOR REASSESSMEN T HAS BEEN INITIATED ON THE RECOMMENDATION OF THE INCOME TAX IN SPECTOR IN ORDER TO VERIFY THE INVESTMENT MADE IN THE PROPERTY AN D THE ASSESSING OFFICER HAS BLINDLY FOLLOWED THE SAME WITH OUT APPLYING HIS OWN MIND. SINCE THE REASONS RECORDED BY THE ASSESSING OFFICER ARE NOT SUFFICIENT TO FORM A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, THE REOPENING WAS HELD TO BE BAD. FOLLOWING THE ORDER OF THE LD. CIT(A) FOR ASSESSMENT YEAR 2003- 04 REOPENING MADE IN OTHER ASSESSMEN T YEARS FOR THE SAME REASONS WERE ALSO KNOCKED DOWN BY THE OTHER LD. CIT(A) IN ASSESSMENT YEARS 2006-07, 2007-08 AND 2008-09. COPIES OF THE ORDE RS OF THE LD. CIT(A) FOR THESE ASSESSMENT YEARS ARE PLAC ED ON RECORD. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER SUBMITTED THAT UNDER THESE FACTS, THE LD. CIT(A) HAS RIGHTLY :-3-: KNOCKED DOWN THE REOPENING OF THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR. 3. THE LD. D.R., ON THE OTHER HAND, HAS PLACED HEAVY RELIANCE UPON THE ORDER OF THE ASSESSING OFFICER WITH THE SUBMISSION THAT ON THE BASIS OF THE INSPECTORS REPORT THE ASSESSING OF FICER HAS FORMED A BELIEF THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 4. HAVING HEARD THE RIVAL SUBMISSION S AND FROM A CAREFUL PERUSAL OF THE MATERIAL AVAILABLE ON RECORD, WE FI ND THAT ON RECEIPT OF THE INSPECTORS REPORT WITH REGARD TO INVESTMENT IN THE PROPERTY, THE ASSESSING OFFICER REOPENED THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2003-04 TO 2005-06. COPY OF THE INSPECTORS REPORT IS PLACED ON RECORD IN WHICH HE HAS RECOMMENDED FOR REOPEN ING OF ASSESSMENTS FO R ASSESSMENT YEARS 2003-04 TO 2005-06 TO VERIFY THE INVESTMENT IN THE PROPERTY . THIS REPORT OF THE INSPECTOR WAS USED BY THE ASSESSING OFFICER FOR REOPENING OF THE ASSESSMENT EVEN WITHOUT FO RMING A BELIEF THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IN ASSESSMENT YEAR 2003-04 THE VALIDITY OF REOPENING WAS EXAMINED BY THE FIRST APPELLATE AUTHORITY IN DETAIL AND KNOCKED DOWN THE REOPENING OF AS SESSMENT ON THE GROUND THAT THE PROCEEDINGS FOR REASSESSMENT HAS BEEN INITIATED ON THE RECOMMENDATION OF THE INCOME TAX INSPECTOR AND THE ASSESSI NG OFFICER HAS BLINDLY FOLLOWED THE SAME WITHOUT APPLYING HIS OWN MIND. TH E RELEVANT OBSERVATIONS OF THE LD. CIT(A) ARE EXTRACTED HEREUNDER:- 5(6)(V) FINALLY A REFERE NCE MAY BE MADE TO THE REPORT OF THE ITI, WHO CONDUCTED THE INQUIRY ON THE SAID TEP IN THE CASE OF THE APPELLANT. THE ITI VISITED THE SPOT AND THE STATEMENT OF THE ASSESSEE WAS RECORDED, THEN ALSO THE ASSESSEE HAD CATEGORICALLY MENTIONED THAT PART OF THE CONSTR UCTION HAS BEEN MET OUT OF THE ADVANCES RECEIVED FROM THE TENANT S. THE ITI COULD HAVE EXAMINED THE TENANTS THEN AND THERE ITSELF. IN THE REPORT FURNISHED BY THE :-4-: ITI, IT HAS NO WHERE BEEN MENTIO NED THAT THE INVESTMENT MADE BY THE ASSESSEE IS UNEXPLAINED OR THE ASSESSEE HAS FAILED TO GIVE AN EXPLANATION FOR THE SAME. AT THE F OOT NOTE OF THE REPORT, IT HAS BEEN MENTIONED THAT IN ORDER TO VERIFY THE INVESTMENT MADE, ACTION UNDER SECTION 148 OF THE AC T BE TAKEN UP. THE PROCEEDINGS, FOR REASSESSMENT HAVE BEEN INITIA TED ON THE RECOMMENDATION OF ITI. THE A.O HAS BLINDLY FOLLOWE D THE SAME WITHOUT APPLYING HIS MIND TO THE FACTS OF THE CASE. 5(6)(VII) ON THE BASI S OF MY AFORESAID EXAM INATION, I AM OF THE CONSIDERED OPINION THAT THE NOTI CE UNDER SECTION 148 OF THE ACT HAS BEEN ISSUED ON THE BASIS OF REAS ONS, WHICH ARE NOT SUFFICIENT TO GIVE AN INDICATION OF FORMATION OF BELIEF THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. TH ERE IS NO BELIEF ON THE BASIS OF FACTS EXISTING AT THE TIME OF RECORD ING OF REASONS OF THE QUANTUM OF INCOME WHICH HAS ESCAPED ASSESS MENT. THE INCOME ESCAPING ASSESSMENT HAS BEEN ASCERTAINED BY THE AO ONLY AFTER THE REPORT OF THE DVO WAS RECEIVED SUBSEQUENT TO THE RECORDING OF REASONS. FURTHER, THE REFERENCE TO THE DV O WAS ITSELF MADE WITHOUT EVEN CALLING FOR THE BOOKS OF ACCOUNT S FOR EXAMINATION. AGAIN, THE DIFFERENCE IN VALUATION IS ADEQUATELY EXPLAINED BY THE APPELLANT. I, THEREFORE, ANNUL THE A SSESSMENT FRAMED BY TH E AO ON THE BASIS OF REASONS WHICH ARE INVALID FOR THE PURPOSE OF REOPENING OF ASSESSMENT BEING MORE IN THE NATU RE OF REASONS TO SUSPECT RATHER THAN THE REASONS TO BELIEVE. 5. NOTHING HAS BEEN BROUGHT ON RE CORD BY THE REVENUE THAT THE DECISION TAKEN BY THE LD . CIT(A) IN ASSESSMENT YEAR 2003-04 HAS EVER BEEN REVERSED BY THE APPELLATE AUTHORITIES. THE DECISION OF THE LD. CIT(A) FOR ASSESSMENT YEAR 2003-04 WA S ALSO FOLLOWED IN OT HER ASSESSMENT YEARS BY THE LD. CIT(A) FOR HOLDING THE REOPENING OF ASSESSMENTS TO BE INVALID. OUR :-5-: ATTENTION WAS ALSO INVITED TO THE OR DER SHEET FOR REOPENING OF ASSESSMENT AVAILABLE AT PAGE 26 OF THE COMPILAT ION OF THE ASSESSEE, IN WHICH THE ASSESSING OFFICER HAS CA TEGORICALLY MENTIONED THAT REOPENING WAS DONE SOLELY ON THE BASIS OF THE REPORT OF THE INCOME TAX INSPECTO R. IN THE LIGHT OF THESE FACTS, WE ARE OF THE CONSID ERED VIEW THAT WHILE REOPENING THE ASSESSMENT THE ASSESSING OFFICER HAS NOT APPLIED HIS OWN MIND. HE HAS FOLLOWED THE RECOMMENDATION OF TH E INCOME TAX INSPECTOR FOR REOPENING THE ASSESSMENT IN ORDER TO VERIFY THE INVESTMENT IN PROPERTY. MOREOVER, THE REOPENING WAS HELD TO BE BAD IN OTHER YEARS BY THE LD. CIT(A) AND THE ORDER HAS ATTAINED FINALITY AS NOTHING HAS BEEN PLACED BEFORE US BY THE REVENUE WITH REGARD TO CH ALLENGE OF THE SAID ORDER. IN THE LIGHT OF THESE FACTS, WE ARE OF THE CO NSIDERED VIEW THAT REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT IS BAD AND THE LD. CIT(A) HAS RIGHTLY ANNULLED THE SAME FOLLOWING THE EARLIER ORDER OF THE LD. CIT(A) FOR ASSESSMENT YEAR 2003- 04. ACCORDINGLY WE FIND NO MERIT IN THE REVENUES APPEAL, HENCE WE DISMISS THE SAME. 6. IN THE RESULT, APPEAL OF TH E REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN TH E OPEN COURT ON 7.8.2013. SD/- SD/- [PRAMOD KUMAR] [S UNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:7.8.2013 JJ:0207 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR