Smt. Shashi Jain, Indore V. The IT0, Indore

ITA 527/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2450 (ITAT-INDORE)
• Duration Of Justice: 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2009
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 1997-1998
• Appeal Filed On: 16-11-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: JAI KUMAR JAIN
• Keywords: Reopening of assessment; Business income; Tax effect
• Section: 234B; 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE SMC BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO.526 TO 528/IND/2009 AYS: 1996-97 TO 1998-99 SMT. SHASHI JAIN C/O RAVI GOYAL & ASSOCIATES, CAS 202, JUHI PLAZA, 128, KANCHAN BAUG, INDORE- 452 001 (PAN AAZPJ 7838 M) ..APPELLANT V/S. ITO, WARD-2(4), INDORE ..RESPONDENT ASSESSEE BY : SHRI JAI KUMAR JAIN, CA DEPARTMENT BY : SMT. APARNA KARAN, SR. DR ORDER PER JOGINDER SINGH, JM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF LD. CIT(A)-II, INDORE, DATED 28.8.2009 FOR THE I MPUGNED ASSESSMENT YEARS ON THE FOLLOWING COMMON GROUNDS: 1. THAT THE LD. CIT(A) ERRED IN JUSTIFYING THE ACTI ON U/S 148 AND CONSEQUENT REOPENING OF ASSESSMENT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO AS PER LAW, THE PROCEEDINGS ARE ILLEGAL, VOID AND BAD IN LAW. 2 2. THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDI TION OF RS.12,000/-, RS.10,000/- AND RS.15,000/-, RESPECTIV ELY ON ESTIMATED BASIS TO THE BUSINESS INCOME OFFERED BY T HE ASSESSEE. 3. THAT THE LD. CIT(A) ERRED IN CONFIRMING THE CHAR GING OF INTEREST U/S 234B AS NOT INTEREST IS CHARGEABLE. 2. DURING HEARING OF THESE APPEALS, I HAVE HEARD SH RI JAI KUMAR JAIN, LD. COUNSEL FOR ASSESSEE AND SMT. APARNA KARAN, LD. SR. DR. THE FIRST COMMON GROUND RAISED IN THE IMPUGNED APPEALS IS THAT THE A CTION OF THE LD. ASSESSING OFFICER FOR ISSUANCE OF NOTICE U/S 148 AND CONSEQUE NT REOPENING IS UNJUSTIFIED. THE LD. COUNSEL FOR ASSESSEE ADVANCED HIS ARGUMENTS WHICH IS IDENTICAL TO THE GROUND RAISED. ON THE OTHER HAND, THE LD. SR. DR STRONGLY DEFENDE D THE ISSUANCE OF NOTICE U/S 148 AND REOPENING OF ASSESSMENTS ON THE GROUND THAT COPIES OF REASONS, RECORDED BY THE LD. ASSESSING OFFICER WERE DULY SUPPLIED TO THE ASSESSEE AS THERE WAS INFORMATION/REPORT FROM ITO ( CIB) AS PER LETTER DATED 23.3.2001. IT WAS CONTENDED THAT THE COUNTER COMMEN TS SUBMITTED BY THE ASSESSEE WERE DULY CONSIDERED BY THE AUTHORITIES. I T WAS PLEADED THAT THERE WAS ESCAPEMENT OF INCOME, THEREFORE, THE NOTICE WAS VALIDLY ISSUED. 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON THE FILE. BRIEF FACTS ARE THAT THE ASS ESSEE IS DOING CATERING BUSINESS. FOR ASSESSMENT YEAR 1996-97, 1997-98 AND 1998-99, THE ASSESSEE 3 FILED RETURN ON 23.11.1998 DECLARING AN INCOME OF R S.38,000/-, RS.42,000/- AND RS.45,000/-, RESPECTIVELY, WHICH WAS PROCESSED U/S 143(1)(A) OF THE ACT. THE INCOME WAS ASSESSED AT RS.70,000/-, RS.92,000/- AND RS.70,000/-, RESPECTIVELY AND TAX OF RS.16,130/-, RS.26,020/- AN D RS.7,300/- RESPECTIVELY WAS CALCULATED. THE LD. ASSESSING OFFICER RECEIVED A Z CATEGORY REPORT FROM THE ITO (CIB) AS PER LETTER DATED 23.3.2001. A NOTI CE U/S 148 ON 26.3.2001 FOR ALL THE IMPUGNED ASSESSMENT YEARS AND THE SAME WAS SERVED UPON THE ASSESSEE ON 30.1.2001 TO WHICH THE ASSESSEE VIDE LE TTER DATED 24.4.2001 CLAIMED THAT THE ASSESSEE IS REGULARLY ASSESSED WIT H ITO-2(5), INDORE, THEREFORE, THE RETURN FILED SHOWING THE SAME INCOME MAY BE CONSIDERED IN COMPLIANCE TO NOTICE U/S 148. THE ASSESSEE CHALLENG ED THE ISSUANCE OF NOTICE AND ENHANCEMENT OF INCOME BEFORE THE LD. CIT(A) WHO UPHELD THE ORDER OF THE LD. ASSESSING OFFICER. THE MATTER TRAVELLED TO THE TRIBUNAL WHEREIN VIDE ORDER DATED 29.12.2004, IN THE ABSENCE OF SUPPLY OF COPIES OF REASONS, RECORDED BY THE LD. ASSESSING OFFICER, IT WAS RESTO RED TO THE FILE OF THE LD. CIT(A) FOR FRESH CONSIDERATION. PURSUANT TO THE SAI D ORDER, THE REASONS WERE DULY SUPPLIED TO THE ASSESSEE WHEREIN THE LD. CIT(A ) AFFIRMED THE ISSUANCE OF NOTICE AFTER PROVIDING DUE OPPORTUNITY TO THE ASSES SEE, WHICH IS UNDER CHALLENGE BEFORE THIS TRIBUNAL. UNDER THE AFOREMENTIONED BACKGROUND, THE CLAIM OF THE ASSESSEE IS THAT SHE IS REGULARLY ASSESSED TO TAX. THERE IS NO DISPU TE TO THE FACT THAT NORMAL TIME LIMIT FOR FILING THE RETURN FOR ASSESSMENT YEA R 1996-97 WAS UP TO 4 31.3.1998 ONLY WHEREAS THE ASSESSEE FILED RETURNS O F ALL THE THREE IMPUGNED ASSESSMENT YEARS ON 23.11.1998. EVEN IN THE CASE OF HUSBAND OF THE ASSESSEE, THE VALIDITY OF ISSUANCE OF NOTICE U/S 14 8 WAS UPHELD BY THE LD. CIT(A) VIDE ORDER DATED 29.11.2005 WHICH WAS CONFIR MED BY THE TRIBUNAL VIDE ORDER DATED 19.11.2007. EVEN THE MATTER TRAVELLED T O THE HONBLE JURISDICTIONAL HIGH COURT. THE IMPUGNED ADDITION FOR UNEXPLAINED I NVESTMENT WAS CONFIRMED BY THE LD. CIT(A) AND APPROVED BY THE TRIBUNAL. IN THE PRESENT CASE OF THE ASSESSEE, ON THE BASIS OF REPORT RECEIVED FROM ITO (CIB), THE REASONS WERE RECORDED. WITHOUT GOING INTO MUCH DELIBERATION, IT IS SEEN THAT THE POSITION OF THE LAW IN THE MATTER OF REASSESSMENT AND ISSUANCE OF NOTICE U/S 148 HAS GONE INTO CONSIDERABLE CHANGE, W.E.F. 1.4.1989. SIN CE THE ASSESSEE FILED THE RETURN ON 23.11.1998, THAT TOO, AFTER EXPIRY OF NOR MAL TIME OF FILING RETURN AND ALSO ON THE BASIS OF REPORT FROM THE ITO (CIB), THE REFORE, BROADLY I AM OF THE VIEW THAT THE LD. ASSESSING OFFICER WAS QUITE JUSTI FIED IN ISSUING NOTICE U/S 148 AND THE LD. FIRST APPELLATE AUTHORITY TO AFFIRM THE SAME BECAUSE THE PROVISIONS SEC. 147 AS AMENDED W.E.F. 1.4.1989 ARE CONTEXTUALL Y DIFFERENT AND THE CUMULATIVE CONDITIONS SPELT OUT IN CLAUSES (A) AND (B) OF SEC. 147 PRIOR TO ITS AMENDMENT ARE NOT PRESENT IN THE AMENDED PROVISIONS . THE ONLY CONDITION FOR ACTION IS THAT THE ASSESSING OFFICER SHOULD HAVE RE ASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. SUCH BELIEF CAN BE REACHED IN ANY MANNER AND IS NOT QUALIFIED BY A PRE-CONDITION OF FAITH AND TRUE DISC LOSURE OF MATERIAL BY AN ASSESSEE AS CONTEMPLATED IN THE PRE-AMENDED SEC. 14 7(A). VIEWED IN THAT 5 ANGLE, POWER TO REOPEN ASSESSMENT IS MUCH WIDER UND ER THE AMENDED PROVISION. EVEN OTHERWISE, THE PROCEEDINGS U/S 147 ARE FOR THE BENEFIT OF THE REVENUE AND ARE AIMED AT GATHERING THE ESCAPED INC OME OF THE ASSESSEE. ADMITTEDLY, THE POWERS OF THE ITO U/S 147/148 ARE N OT UNBRIDLED ONE AND ARE HEDGED WITH SEVERAL SAFEGUARDS CONCEIVED IN THE INT EREST OF ELIMINATING ROOM FOR ABUSE THESE POWERS BY THE ASSESSING OFFICER. MY VIEW GETS SUPPORT FROM THE DECISIONS: - SIMPLEX CONCRETE PILES INDIA LTD. VS. DCIT (262 ITR 605) (CAL), BAWA ABHAY SINGH VS. DCIT (117 TAXMAN 12) (DEL), RAKESH AGRAWAL VS. ACIT (86 TAXMAN 306) (DEL), CIT VS. SUN ENGG. WORKS P. LTD. (198 ITR 297) (SC), K. SUDHAKAR S. SHANBHAG VS. ITO (241 ITR 865) (BOM) , SHRIKRISHNA P. LTD. VS. ITO (221 ITR 538) (SC), ITO VS. LAKHMANI MEVALDAS (103 ITR 437) (SC). THE HONBLE APEX COURT IN THE CASE OF REYMOND WOOLE N MILLS LTD. (236 ITR 34) (SC) EVEN WENT TO THE EXTENT THAT COURT CAN ONLY CONSIDER WHETHER THERE WAS A PRIMA-FACIE CASE FOR REASSESSMENT AND S UFFICIENCY OF MATERIAL CANNOT BE CONSIDERED. IN A LATER DECISION, ON REASO N TO BELIEVE, THE HONBLE COURT IN THE CASE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS P. LTD. (291 ITR 500) EXPLAINED IT FURTHER. IN VIEW OF THESE FACTS A ND JUDICIAL PRONOUNCEMENTS, 6 I HAVE NOT FOUND ANY INFIRMITY IN THE STAND OF THE LD. CIT(A) ON THE IMPUGNED ISSUE, CONSEQUENTLY, THIS GROUND OF THE ASSESSEE IS HAVING NO MERIT, THEREFORE, DISMISSED. 4. NOW, COMING TO THE NEXT GROUND I.E. ESTIMATION O F ADDITION OF RS.10,000/-, RS.12,000/- AND RS.15,000/- RESPECTIVE LY AGAINST THE RETURNED INCOME OF RS.38,000/-, RS.42,000/- AND RS.45,000/- IS CONCERNED, THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT THERE IS NO BAS IS FOR THE ADDITION, THEREFORE, IT SHOULD BE DELETED. ON THE OTHER HAND, THE LD. SR. DR STRONGLY DEFENDED THE ADDITION BY CONTENDING THAT NECESSARY DETAILS WERE NOT FURNISHED BY THE ASSESSEE, THEREFORE, THERE WAS NO OPTION WITH THE LD. ASSESSING OFFICER BUT TO MAKE THE ADHOC ADDITIONS. THE IMPUGNED ORDER WAS DEFENDED. I HAVE CONSIDERED THE RIVAL SUBMISSIONS A ND PERUSED THE MATERIAL AVAILABLE ON THE FILE. ADMITTEDLY, IT IS AN ESTIMAT ED ADDITION AND THE TAX EFFECT IS RS.16,130/-, RS.26,020/- AND RS.7,300/- RESPECTI VELY. UNDER THE FACTS STATED IN THE IMPUGNED ORDER, AND PRIMA-FACIE THE RETURNED INCOME IS BASED ON ESTIMATION AND IMPUGNED ADDITION IS ALSO BASED ON E STIMATION, THEREFORE, TO CUT SHOT THE MATTER AND TO PUT AN END TO THE LITIGA TION, THE RESPECTIVE ADDITIONS ARE RESTRICTED TO 25% EACH, CONSEQUENTLY, THIS GROUND OF THE ASSESSEE IS PARTLY ALLOWED. 5. THE LAST GROUND PERTAINS TO LEVY OF INTEREST U/S 234B OF THE ACT. THE LD. SR. DR PLEADED THAT LEVY OF INTEREST IS MANDATORY I N NATURE. SINCE THE 7 IMPUGNED ADDITION HAS BEEN RESTRICTED TO 25%, THERE FORE, THE LEVY OF INTEREST IS CONSEQUENTIAL IN NATURE. IN THE RESULT, THESE APPEALS OF THE ASSESSEE ARE P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 3.12.2009. SD/- (JOGINDER SINGH) JUDICIAL MEMBER DATED: 7.12.2009 !VYAS! COPY TO: APPELLANT/RESPONDENT/CIT/CIT(A)/DR