RAMAKANT SHARMA, Jaipur V. CIT, Alwar

ITA 533/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1882 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 18-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROLI AGARWAL
• Keywords: Principle of natural justice; Assessment record
• Section: 143(3); 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 533/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2011-12 SHRI RAMAKANT SHARMA, (LIC AGENT) BASEDI, DISTT. DHOLPUR CUKE VS. PR. COMMISSIONER OF INCOME-TAX, ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AXWPS9042B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S.L. JAIN (ADVOCATE) JKTLO DH VKSJ LS @ REVENUE BY : SMT. ROLI AGARWAL (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 28/11/2017 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 30/11/2017 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE CHALLENGIN G THE ORDER OF LD. PR. CIT, ALWAR DATED 29.03.2016 INVOKING JURISD ICTION U/S 263 OF THE ACT SETTING ASIDE THE ASSESSMENT ORDER FOR AY 2011- 12 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT. 2. DURING THE COURSE OF HEARING, THE LD. AR CONTEND ED THAT FIRSTLY, NO SHOW CAUSE HAS BEEN SERVED ON THE ASSESSEE BY THE P R. CIT, ALWAR AND IN ABSENCE OF THE SAME, THE ASSESSEE HAS NOT BEEN P ROVIDED AN ITA NO. 533/JP/2016 SHRI RAMAKANT SHARMA VS. PR. CIT, ALWAR 2 OPPORTUNITY TO REPRESENT HIS CASE WHICH IS ALSO SPE CIFICALLY MANDATED U/S 263 OF THE ACT AND THE PRINCIPLE OF NATURAL JUSTICE HAS BEEN VIOLATED. THE LD. AR HAS FURTHER CONTENDED THAT THE SUBJECT M ATTER OF THE SHOW- CAUSE NOTICE ISSUED BY THE LD. PR. CIT HAS ALSO BEE N THE SUBJECT MATTER OF APPEAL FILED BY THE ASSESSEE BEFORE THE LD. CIT( A) AND WHICH HAS BEEN CONSIDERED AND DECIDED UPON BY HIM. HENCE, IT WAS SUBMITTED THAT IN VIEW OF CLAUSE (C) TO THE EXPLANATION 1 TO SECTION 263, THE LD. PR. CIT DOES NOT HAVE THE POWER TO EXERCISE HIS JURISDI CTION U/S 263 IN RESPECT OF THE SAME MATTER. IT WAS FURTHER CONTENDE D BY THE LD. AR THAT THE AO HAS CONDUCTED PROPER INQUIRY AND VERIFICATIO N OF CASH DEPOSITS IN HIS BANK ACCOUNTS AFTER GIVING A SPECIFIC SHOW-CAUS E NOTICE DATED 18.2.2014 AND HENCE, THE REQUIREMENT OF SECTION 263 IN TERMS OF THE ASSESSMENT ORDER BEING ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE HAVE NOT SATISFIED IN THE INSTA NT CASE. 3. PER CONTRA, THE LD CIT DR DRAWN OUR REFERENCE TO THE ORDER OF LD PR. CIT AND SUBMITTED THAT THE SHOW-CAUSE HAS BEEN DULY ISSUED AND SERVED ON THE ASSESSEE. FURTHER, IN RESPECT OF REP ORT OF THE POSTAL DEPARTMENT THAT THE SHOW-CAUSE HAS BEEN RETURNED UN SERVED, SHE SUBMITTED THAT THE SHOW-CAUSE WAS INITIALLY SERVED ON THE BROTHER OF THE ASSESSEE AND LATER ON, THE SAID FACT WAS DELETED AN D SHOW-CAUSE WAS RETURNED BY THE POSTAL DEPARTMENT. REGARDING EXERC ISE OF JURISDICTION WHERE THE LD CIT(A) WAS CEASED OF THE MATTER, SHE S UBMITTED THAT IT IS FOR THE ASSESSEE TO RAISE THIS OBJECTION BEFORE THE LD PR. CIT AND SINCE, HE HAS FAILED TO APPEAR BEFORE HIM, HE CANNOT BE AL LOWED TO TAKE THIS GROUND BEFORE US. FURTHER, SHE SUBMITTED THAT THE LD PR. CIT HAS HELD CLEARLY THAT FOR WANT OF ADEQUATE ENQUIRY ON THE PA RT OF THE AO, HE HAS ITA NO. 533/JP/2016 SHRI RAMAKANT SHARMA VS. PR. CIT, ALWAR 3 EXERCISED HIS JURISDICTION UNDER SECTION WHICH IS N OW SPECIFICALLY MANDATED AS PER EXPLANATION TO SECTION 263 OF THE A CT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. 5. REGARDING THE FIRST CONTENTION RAISED BY THE LD. AR REGARDING NON SERVICE OF THE SHOW CAUSE NOTICE ISSUED BY THE LD. PR. CIT, THE REVENUE HAS SUBMITTED A REPORT OBTAINED FROM THE POSTAL DEP ARTMENT WHICH SAYS THAT THE SPEED POST DATED 04.03.2016 WAS RETURNED U NSERVED ON THE ASSESSEE WITH THE REMARK INCOMPLETE ADDRESS RETURN ED. IN LIGHT OF THE SAME, THE CONTENTION RAISED BY THE LD. AR SEEMS TO BE CORRECT THAT THE SHOW-CAUSE NOTICE HAS NOT BEEN SERVED ON THE ASSESS EE AND THE ASSESSEE HAS THUS BEEN PREVENTED FROM REPRESENTING HIS CASE BEFORE THE LD PR. CIT. 6. REGARDING THE SECOND CONTENTION RAISED BY THE AR THAT THE SUBJECT MATTER OF THE SHOW-CAUSE NOTICE ISSUED BY LD. PR. C IT WAS ALSO THE SUBJECT MATTER OF APPEAL FILED BEFORE THE LD. CIT(A ), WE REFER TO THE SHOW CAUSE DATED 3 RD MARCH, 2016 ISSUED BY THE LD. PR. CIT, ALWAR WHICH STATES AS UNDER:- AS PER AIR INFORMATION, THE ASSESSEE HAS MADE CACH DEPOSITS IN ITS SAVING BANK A/C HELD WITH SBBJ. THESE CASH DEPOSITS WERE REQUIRED TO BE VERIFIED DURING THE COURSE OF ASSESSMENT PROCEED INGS. PERUSAL OF ASSESSMENT RECORD REVEALS THAT TOWARDS EXPLANATION OF THE SOURCE OF CASH DEPOSITS MADE IN THE BANK ACCOUNT IT HAD BEEN SUBMITTED THAT THESE CASH DEPOSITS WERE MADE FROM THE CASH RECEIVE D FROM THE POLICY ITA NO. 533/JP/2016 SHRI RAMAKANT SHARMA VS. PR. CIT, ALWAR 4 HOLDERS AGAINST LIC PREMIUM. TO SUBSTANTIATE ITS CL AIM THE ASSESSEE HAD FURNISHED AFFIDAVITS FROM 39 PERSONS AS PER WHICH I T WAS AFFIRMED BY THE DEPONENTS THAT THEY HAD MADE CASH PAYMENTS TO THE A SSESSEE AGAINST LIC PREMIUM IN RESPECT OF THEIR INSURANCE POLICIES. THE ASSESSEE HAS ALSO SUBMITTED A DETAILED LIST AS OBTAINED FROM LIC SHOWING THE LIC PREMIUM DEPOSITED IN THE AGENCY CODE OF THE ASSESSE E. A CAREFUL EXAMINATION OF ALL THE AFFIDAVITS AND THE LIST OF P REMIUM PAID REVEALS THAT THE DETAILS TALLY ONLY IN RESPECT OF 06 NUMBER OF CASES AND IN THE RESIDUAL CASES THE NAMES AND POLICY NUMBERS MENTION ED ON THE AFFIDAVITS FURNISHED DO NOT FIND ANY MENTION IN THE LIST OF PREMIUM PAYMENTS AS FURNISHED BY LIC. FURTHER, IN THE AFFID AVITS OF 02 CASES NAMELY IN THE CASE OF OF SH. SHIBBI AND SH. UPENDRA SHARMA NEITHER ANY AMOUNT HAS BEEN WRITTEN NOR POLICY NUMBER HAS B EEN SPECIFIED. FURTHER, THE ASSESSING OFFICER HAD ISSUED A LETTER TO THE LIC DHOLPUR REQUIRING TO VERIFY THE DETAILS OF PREMIUM DEPOSITS MADE BY THE ASSESSEE VIZ SH. RAMAKANT SHARMA. THE LIC, DHOLPU R SUBMITTED ITS REPLY ON 12/02/2004 ALONG WITH A LIST CONTAINING NA MES OF POLICY HOLDERS, AMOUNT DEPOSITED AND THE DATE OF DEPOSIT. AS PER THIS REPLY THE LIC HAS SPECIFICALLY STATED THAT- WE CONFIRM THAT LIC HAS NOT BEEN AUTHORIZED TO MR. RAMAKANT SHARMA FOR DEPOSITING SUCH COLLECTION INTO HIS PERSONAL BA NK ACCOUNT. THE ABOVE FACTUAL MATRIX REVEALS THAT THESE INTRICA TE DETAILS WERE NOT OBSERVED BY THE ASSESSING OFFICER AND HE PROCEEDED TO COMPLETE THE ASSESSMENT ONLY ON THE BASIS OF FACTUALLY INCORRECT AND NON-VERIFIABLE INFORMATION PRODUCED BEFORE HIM. UNDER SUCH CIRCUMS TANCES IT IS NOT CLEAR AS TO HOW THE AO DREW THE CONCLUSION REGARDIN G THE VERIFICATION OF THE CASH DEPOSITS IN THE BANK ACCOUNT. THUS, THE AS SESSING OFFICER HAS ITA NO. 533/JP/2016 SHRI RAMAKANT SHARMA VS. PR. CIT, ALWAR 5 ISSUED THE ASSESSMENT ORDER WITHOUT MAKING INQUIRIE S OR VERIFICATION WHICH SHOULD HAVE BEEN MADE TO ASCERTAIN THE CORREC T SOURCE AND NATURE OF THE CASH DEPOSITS IN THE ASSESSEE DURING THE PERIOD UNDER CONSIDERATION. 7. WE NOW REFER TO THE ASSESSMENT ORDER PASSED BY T HE AO UNDER SECTION 143(3) OF THE ACT DATED 7.3.2014 WHEREIN TH E AO HAS DISCUSSED THE SAID ISSUE AS UNDER:- 1. JKSDM+ CGH ESA TEK JKF'K DH VFHKO`F/N FU/KKZJ.K DS NKSJKU DJNKRK }KJK IZLRQ FOOJ.KH DK ITR-4S SUGAM LS LI'V GS FD DJNKRK }KJK FOOJ.KH ESA O;KOLKF;D EN ES VK; : 15074 6@& NKKZBZ GSA FOOJ.KH ESA VK; DK L=KSR DEHKU CRK;K GSA FU/KKZJ.K DS NKSJKU LR;KI U DJUS IJ ;G LIV GQVK GS FD DJNKRK DS IKL ,Y-VKBZ-LH- DH ,TSALH GSA DJNKRK DKS ,Y-VKBZ-LH/ /KKSYIQJ DH RJQ LS CLSMH ESA ,Y-VKBZ-LH DK DSK DKMAVJ [KKSYUS DH VUQE FR FEYH GQBZ GSA DJNKRK DS ,L-CH- CH-TS- CLSMH CSAD [KKRS ESA TEK JKFK FOFHKUU O;FDR ;KSA LS IZKIR ,Y-VKBZ-LH- IZHFE;E DH IZKIR JKF'K GSA FU/KKZJ.K DS NKSJKU DJNKRK DH RJQ LS ,Y-V KBZ-LH IZHFE;E LS IZKFIR VKSJ MLDS ,L-CH-CH-TS- CLSMH DS CSAD [KKRS TEK JKF'K DS NLRKO ST IZLRQR FD;S X;SA DJNKRK }KJK DEHKU IZKFIR O CSAD ESA TEK JKFK LS LR;KIU DS FY, JKSDM+ CGH O [KKRS DH DKIH IZLRQR DH XBZA DJNKRK DH RJQ LS IZLRQR [KKRS DK VOYKSDU DJ US IJ IK;K X;K FD DJNKRK }KJK FOFHKUU O;FDR;KSA DS UKE LS TKS JKFK YS[KK IQ LRDKSA ESA TEK DH XBZ GS MLDK FEYKU ,Y-VKBZ-LH- /KKSYIQJ LS IZKIR LWPH LS DJUS IJ IK;K X;K FD DJNKRK }KJK [KKRS ESA JH MISUNZ DS UKE LS : 135000@& FNUKAD 11-01-2011 DKS D JNKRK DH JKSDM+ CGH ESA RKS TEK GS IJARQ ,Y-VKBZ-LH- /KKSYIQJ LS IZKIR LWPH ESA JH MISUNZ KEKZ DS UKE LS DSOY : 15370@& DK GH HKQXRKU FD;K X;K GSA BL LECU/K ESA FU/KKZJ.K DS NKSJKU DJNKRK O DJNKRK DS VF/KD`R VK;DJ LYKGDKJ JH LQUHY FEKY LS FNUKAD 25-0 2-2014 DKS FU/KKZJ.K PPKZ DS NKSJKU IWNK X;K FKK IJARQ MUDS }KJK DKSBZ LARKSKTU D LIVHDJ.K IZLRQR UGHA FD;K X;KA BLLS ;G LIV GS FD DJNKRK }KJK MLDH YS[KK IQLRDKSA ESA : 119630@& 135000&15370 OKSXL TEK DJ J[KS GSA DJNKRK DS IKL MDR TEK JKFK DK DKSBZ IZKEKF.KD L=KSR UGHA GSA BLFY, DJNKRK }KJK MLDH YS[ KK IQLRDKAS ESA TEK JKFK : ITA NO. 533/JP/2016 SHRI RAMAKANT SHARMA VS. PR. CIT, ALWAR 6 119630@& DKS DJNKRK DH LECF/KAR FU/KKZJ.K O'KZ DH V ?KKSF'KR VK; EKUK TKRK GS FTLS DJNKRK DH FOOJ.KH VK; ESA TKSM+K TKRK GSA DJNKRK }KJK MLDH VK; DS LR; O OKLRFOD RF; IZLRQR UG H FD;S X;S BLFY, DJNKRK DS FO:/K LR; O OKLRFOD VK; DKS FNIKUS DS FY, VK;DJ VF/KFU;E DH /KKJK 2711 C DS RGR VYX LS KFDR DH DK;ZOKGH DH TKRH GSA 8. WE NOW REFER TO THE ORDER OF THE LD. CIT(A) DATE D 25.04.2016 WHEREIN THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 1,19,630/- AS HIS UNDECLARED INCOME MADE BY THE AO AND THE RELEVA NT FINDING OF THE LD. CIT(A) ARE CONTAINED AT PARA 5.3, 5.4 AND 5.5 O F HIS ORDER WHICH ARE REPRODUCED AS UNDER:- 5.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WE LL AS SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT AN ADDITION OF RS. 1,19,630/- HAS BEEN MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INCOM E. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY TH E AO THAT IN THE CASH BOOK THERE IS A DEPOSITS OF RS. 1,35,000 IN CA SH ON 11.01.2011 AND OUT OF THIS ONLY AN AMOUNT OF RS. 15,370/- HAS BEEN DEPOSITED IN THE ACCOUNT OF LIC DHOLPUR IN THE NAME OF THE APPELLANT . IN THE ABSENCE OF ANY EXPLANATION, THE BALANCE OF RS. 1,19,630/- WAS TREATED AS UNEXPLAINED. 5.4 THE APPELLANT HAS STATED THAT A TOTAL AMOUNT OF RS. 1,12,479/- WAS DEPOSITED IN THE NAME OF DIFFERENT POLICY HOLDE RS- A LIST OF 17 PERSONS ALONG WITH A CERTIFICATE FROM LIC HAS BEEN FILED ON RECORD. IT IS STATED THAT AFTER ADDING THE AMOUNT OF RS. 15,370/- WHICH ALREADY STANDS EXPLAINED, TOTAL AMOUNT OF CASH OF RS. 1,27, 849/- HAS BEEN UTILIZED FOR PAYMENT OF PREMIUM TO LIC ON ACCOUNT O F DIFFERENT CUSTOMERS. 5.5 HAVING CONSIDERED THE SUBMISSIONS MADE ALONG WI TH THE EVIDENCE FILED ON RECORD. I HOLD THAT ONLY AN AMOUNT OF RS. 7,151/- (1,35,000- ITA NO. 533/JP/2016 SHRI RAMAKANT SHARMA VS. PR. CIT, ALWAR 7 1,27,849) REMAINS UNEXPLAINED IN THE HANDS OF THE A PPELLANT AND THEREFORE CONFIRM THE SAME OUT OF THE TOTAL ADDITIO N OF RS. 1,19,630/- MADE BY THE AO UNDER THIS HEAD. 9. IN LIGHT OF ABOVE, IT IS CLEAR THAT WELL BEFORE THE ISSUANCE OF THE SHOW CAUSE NOTICE BY THE LD PR. CIT ON 3 RD OF MARCH, 2016, EXACTLY IDENTICAL ISSUE RELATING TO VERIFIABILITY OF BANK D EPOSITS WAS ALREADY A SUBJECT MATTER OF APPEAL FILED BY THE ASSESSEE BEFO RE THE LD. CIT(A) AND THE SAME HAS BEEN CONSIDERED AND DECIDED IN SUCH AP PEAL BY THE LD CIT(A) VIDE HIS ORDER DATED 25.4.2016. 10. IN LIGHT OF ABOVE, WE ARE OF THE CONSIDERED VIE W THAT WHERE THE LD. CIT(A) WAS ALREADY CEASED OF THE MATTER WHEREIN THE MATTER HAS BEEN CONTESTED BEFORE HIM BY THE AO, THE LD. PR. CI T DOES NOT HAVE THE JURISDICTION TO EXERCISE HIS POWERS U/S 263 OF THE ACT ON THE SAME MATTER AS PER THE EXPLICIT PROVISIONS CONTAINED IN CLAUSE (C) TO EXPLANATION 1 TO SECTION 263 OF THE ACT. WE ACCORDI NGLY SET ASIDE THE IMPUNGED ORDER OF THE LD. PR. CIT U/S 263 OF THE AC T FOR WANT OF JURISDICTION. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 30/11/2017 SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ITA NO. 533/JP/2016 SHRI RAMAKANT SHARMA VS. PR. CIT, ALWAR 8 TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30/11/2017. * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RAMAKANT SHARMA, DHOLPUR 2. IZR;FKHZ@ THE RESPONDENT- PR. CIT, ALWAR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 533/JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR