Smt.Laxmi Kanta Goyal, Neemuch V. Income Tax officer, Neemuch

ITA 547/Ind/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9380 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 1997-1998
• Appeal Filed On: 31-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R S AMBEDKAR
• Assessee Lawyers: O P BATHEJA
• Keywords: Unexplained cash credit; Unexplained investment; Period of limitation; Retrospective amendment; Reason to believe; Reassessment proceedings
• Section: 147; 27; 148; 263; 144

Judgement Text

DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO 544 & 545/IND/2017 ASSESSMENT YEARS 1996-97 & 1997-98 PAN : AIQPJ3159E LATE SHRI DINESH KUMAR GOYAL : APPELLANT L/H SMT. LAXMIKANTA GOYAL, C/O M/S. SAREE SANSAR, TAGORE MARG, NEEMUCH V/S INCOME TAX OFFICER, NEEMUCH : RESPONDENT ITA NO 546 TO 548/IND/2017 ASSESSMENT YEARS 1996-97, 1997-98 & 1999-2000 PAN : AIQPJ3158F SMT. LAXMIKANTA GOYAL : APPELLANT /O M/S. SAREE SANSAR, TAGORE MARG, NEEMUCH V/S INCOME TAX OFFICER, NEEMUCH : RESPONDENT REVENUE BY SHRI R.S. AMBEDKAR, SR.DR ASSESSEE BY SHRI O.P. BATHEJA, ADV DATE OF HEARING 0 4.12 . 2018 DATE OF PRONOUNCEMENT 21 .1 2 .2018 DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 2 O R D E R PER BENCH. THE ABOVE CAPTIONED APPEALS FILED AT THE INSTANCE O F TWO ASSESSEES PERTAINING TO ASSESSMENT YEAR 1996-97, 1997-98 AND 1999-2000 ARE DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS) (IN SHORT LD.CIT(A)], UJJAIN DATED 19.0 6.2017 WHICH ARE ARISING OUT OF THE ORDER U/S 144 DATED 27.12.2016 FRAMED BY ITO, NEEMUCH. 2. AS THE ISSUES RAISED IN THESE APPEALS ARE COMMON THESE WERE HEARD TOGETHER AND BEING DISPOSED OFF BY THIS COMMO N ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. THE GROUNDS RAISED BY THE ASSESSEES NAMELY LATE DINESH KUMAR GOYAL THROUGH L/H SMT. LAXMIKANTA GOYAL AND S MT. LAXMIKANTA GOYAL ARE AS UNDER; I ITA NO.544/IND/2017 IN THE CASE OF LATE SHRI DINESH KUMAR GOYAL ASSESSMENT YEAR 1996-97 1. THE LD. CIT (A) HAS GROSSLY ON FACTS AND IN LAW IN DISMISSING THE LEGAL ISSUE CHALLENGING VALIDITY OF NOTICE ISSUED U/S 14 8 FOR ESCAPEMENT OF INCOME WITHIN THE MEANING OF SEC. 147 EXPLANATION 2(A) READ WITH SECTION DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 3 150(1) OF THE ACT, HOLDING THAT THIS ISSUE HAS BEEN DECIDED BY THE HON'BLE ITAT WHILE DECIDING ITA NO. 64/LND/2014 DATED 29-02 -2016. 2. THE LD. CIT (A) HAS GROSSLY ERRED IN IGNORING TH E ISSUE THAT THE SET ASIDE ASSESSMENT MADE ON 27-12-2016 HAS BEEN MADE IN THE NAME OF DECEASED SH. DINESH KUMAR GOYAL, WHEN IT WAS IN THE KNOWLEDG E OF AO THAT THE ASSESSEE HAD EXPIRED ON 26-02-2015. THEREFORE, THE ASSESSMENT MADE BY THE AO IN THE NAME OF THE DECEASED PERSON IS BAD IN LAW AND MY KINDLY BE QUASHED WITHOUT PREJUDICE TO THE ABOVE THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN CO NFIRMING ADDITION OF RS. 250,000/- MADE ON ACCOUNT OF UNEXPLAINED CASH CREDI T IS THE NAME OF SMT. LAXMI KANTA GOYAL. ITA NO.545/IND/2017 IN THE CASE OF LATE SHRI DINESH KUMAR GOYAL ASSESSMENT YEAR 1997-98 1. THE LD. CIT (A) HAS GROSSLY ERRED ON FACTS AND I N LAW IN DISMISSING THE LEGAL ISSUE CHALLENGING VALIDITY OF NOTICE ISSUED U /S 148 FOR ESCAPEMENT OF INCOME WITHIN THE MEANING OF SEC. 47 EXPLANATION 2( A) READ WITH SECTION 150(1) OF THE ACT, AIDING AT THIS ISSUE HAS ALREADY BEEN DECIDED BY THE HON'BLE ITAT'WHILE DECIDING ITA NO.65/LND/2014 DATE D 29-2-2016. 2. THE LD.CIT (A) GAS GROSSLY ERRED IN IGNORING THE ISSUE THAT THE SET ASIDE ASSESSMENT MADE ON 27-12-2016 HAS BEEN MADE IN THE NAME OF DECEASED SH. DINESH KUMAR GOYAL, WHEN IT WAS THE KNOWLEDGE O F AO THAT THE ASSESSEE HAD EXPIRED ON 26-02-2015. THEREFORE, THE ASSESSMENT MADE BY THE AO IN THE NAME OF THE DECEASED PERSON IS BAD IN LAW AND MY KINDLY BE QUASHED. DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 4 WITHOUT PREJUDICE TO THE ABOVE 3. THE LD. CIT(A) HAS ERRED IN CONFIRMING ADDITION OF RS.4,50,000/- BEING ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN THE NAME OF SH. MOHAN DAS GOYAL AND SHRI. NAMAN GOYAL. 4. THE LD. CIT (A) HAS ERRED IN CONFIRMING ADDITION OF RS. 18,OOO/- ON ACCOUNT OF LOW HOUSE HOLD WITHDRAWALS AND NOT ALLOW ING ITS SET OFF AGAINST TRADING ADDITION OF RS. 53,571/- CONFIRMED BY HIM. ITA NO.546/IND/2017 IN THE CASE OF SMT. LAXMI KANTA GOYAL ASSESSMENT YEAR 1996-97 1. THE LD. CIT (A) HAS GROSSLY ERRED IN DISMISSING THE GROUND OF APPEAL OF THE APPELLANT THAT THE ID. AO HAD NOT FOLLOWED THE DECISION OF HON'BLE ITAT FOR THE A.Y. 1998-1999, DATED 19-09-2008, WHICH IS EQUALLY RELEVANT TO THE A.Y. 1996-97 AND 1997-98. 2. THE LD. CIT (A) HAS GROSSLY ERRED ON FACTS AND I N LAW IN DISMISSING THE ISSUE CHALLENGING VALIDITY OF NOTICE U/S 148 WITHIN THE MEANING OF SEE. 147 EXPLANATION 2(A) R.W.S. 150(1) OF THE ACT, HOLDING THAT THIS ISSUE HAS ALREADY BEEN DECIDED BY THE HON'BLE ITAT WHILE DECI DING ITA NO. 61/LND/2014, DATED 29-02-2016. WITHOUT PREJUDICE TO ABOVE: 3. THE LD. CIT (A) HAS ERRED IN CONFIRMING ADDITION OF RS. 200,000/MADE ON ACCOUNT OF UNEXPLAINED CASH CREDIT IN THE NAME OF S H. BHAGWAN DAS GOYAL . DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 5 ITA NO.547/IND/2017 IN THE CASE OF SMT. LAXMI KANT A GOYAL ASSESSM ENT YEAR 1997-98 1. THE LD. CIT (A) HAS GROSSLY ERRED IN DISMISSING THE GROUND OF APPEAL OF THE APPELLANT THAT THE ID. AO HAD NOT FOLLOWED THE DECISION OF HON'BLE ITAT FOR THE A.Y. 1998-1999, DATED 19-09-2008) WHICH IS EQUALLY RELEVANT TO THE A.Y. 1996-97 AND 1997-98. 2. THE LD. CIT (A) HAS GROSSLY ERRED ON FACTS AND I N LAW IN DISMISSING THE ISSUE CHALLENGING VALIDITY OF NOTICE U/S 148 WITHIN THE MEANING OF SEE. 147 EXPLANATION 2(A) R.W.S. 150(1) OF THE ACT, HOLDING THAT THIS ISSUE HAS ALREADY BEEN DECIDED BY THE HON'BLE ITAT WHILE DECI DING ITA NO. 62/LND/2014, DATED 29-02-2016. 3. THE LD. CIT (A) HAS ERRED IN NOT DELETING ADDITI ON OF RS. 170,000/- BEING ESTIMATED PROFIT ON ESTIMATED SALES, WHERE AS HE HA S DELETED SUCH ADDITION IN THE A.Y. 1996-97, IN VIEW OF DECISION O F HON'BLE ITAT IN ITA NO. 573/LND/05, DATED 19-09-2008. ITA NO.548/IND/2017 IN THE CASE OF SMT. LAXMI KANT A GOYAL ASSESSMENT YEAR 1999-2000 1. THE LD. CIT (A) HAS GROSSLY ERRED ON FACTS AND I N LAW IN IGNORING THE FACTS THAT THE REASSESSMENT PROCEEDINGS IRRITATED U /S 148 R.W.S. 147 EXPLANATION 2(A) ON 28-03-2006 WERE VOID AB INITIO AS THESE WERE BASED ON FALLACIOUS ASSUMPTION THAT THE AGGREGATE BANK DEPOS ITS OF RS. 1,85,553/- CONSTITUTED UNDISCLOSED INCOME OF THE ASSESSEE OVER LOOKING FACT THAT SOURCE OF DEPOSIT NEED NOT NECESSARILY BE INCOME OF THE ASSESSEE, AS SUCH, THE NOTICE WAS ISSUED WITHOUT APPLICATION OF MIND B Y THE AO FOR VERIFICATION OF SOURCE OF BANK DEPOSITS AND DID NOT FULFILL THE REQUIREMENT OF LAW FOR ISSUANCE OF NOTICE U/S 147 EXPLANATION 2(A) /148. DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 6 2. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN IGNORING THE LEGAL POSITION THAT WHEN ON GROUND ON WHICH REOPENING WAS BASED, NO ADDITION WAS MADE BY THE AO, HE COULD NOT MAKE ADDITION ON S OME OTHER GROUNDS WHICH DID NOT FORM THE PART OF REASONS RECORDED BY HIM. THEREFORE; THE ID. CIT (A) HAS ERRED IN CONFIRMING ADDITION OF RS. 3,8 1,460/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN BUILDING. 3. THE LD. CIT (A) HAS GROSSLY ERRED ON FACTS AND I N LAW IN HOLDING THAT THE LEGAL ISSUE CHALLENGING VALIDITY OF NOTICE U/S 148 HAS BEEN DECIDED BY THE HON'BLE ITA.T IN ITA 63/LND/2014, DATED 29-02-2016. 4. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING ADDITION OF RS. 3,81,460/- ON ACCOUNT OF INVESTMENT IN BUILDING . 4. FROM PERUSAL OF THE ABOVE GROUNDS WE FIND THAT I N ITA NO.544, 545, 546 AND 547/IND/2017, COMMON LEGAL ISSUE HAS B EEN RAISED CHALLENGING THE VALIDITY OF THE NOTICE ISSUED U/S 1 48 OF THE ACT FOR THE ALLEGED ESCAPEMENT OF INCOME WITHIN THE MEANING OF SECTION 147, EXPLANATION 2(A) READ WITH SECTION 150(1) OF T HE ACT. AS CONFIRMED BY THE LD. COUNSEL FOR ASSESSEE THAT THE FACTS RELATING TO BOTH THE ASSEESSEES NAMELY LATE DINESH KUMAR GOYAL AND SMT. LAXMIKANTA GOYAL ARE ALMOST SIMILAR, WE WILL ADJUD ICATE THESE COMMON ISSUE ON THE BASIS OF FACTS OF SMT. LAXMIKAN TA GOYAL. 5. THE FACTS IN BRIEF ARE THAT THE APPELLANT IS AN INDIVIDUAL ASSESSEE. THE ASSESSEE HAS DESIRED TO START BUSINES S ACTIVITY IN FORM DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 7 OF HOTEL BUSINESS AND FOR THAT PURPOSES SHE HAS APP LIED FOR THE BANK LOAN. TO AVAIL BANK LOAN THE BANK HAS REQUIRED CERTAIN PAPERS INCLUDING THE PROJECT REPORT, BALANCE SHEET AND PRO FIT & LOSS ACCOUNT. THE CONSULTANT OF THE ASSESSEE PREPARED TH E SAME AND SUBMITTED TO THE BANK AND THEREAFTER AVAILED THE LO AN FROM THE BANK. THE ASSESSEE HAS NOT FILED ITS RETURN OF INCO ME, THEREFORE THE LEARNED ASSESSING OFFICER (IN SHORT LD.AO) HAS RE OPENED THE CASE U/S 148 AND FRAMED THE ASSESSMENT OF THE ASSESSEE F OR THE ABOVE REFERRED ASSESSMENT YEAR U/S 144 OF THE INCOME TAX ACT. THEREAFTER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CI T(A), UJJAIN BUT DUE TO NON APPEARANCE THE SAME WAS DISMISSED BY THE LD. CIT(A), UJJAIN. THE ASSESSEE FURTHER FILED AN APPEAL BEFORE THE ITAT, INDORE BENCH INDORE AND THE BENCH HAS SET ASIDE THE CASE A ND RESTORED THE MATTER TO THE LD. CIT(A), UJJAIN TO CONSIDER THE MA TTER AFRESH AND ALSO DECIDE THE LEGAL ISSUE FOR REOPENING THE CASE U/S 148 OF THE ACT. THE LD. CIT(A) HAS FURTHER NOT DECIDED THE LEG AL MATTER FOR REOPENING THE CASE U/S 148 OF THE ACT AND DISMISSED THE APPEAL OF THE ASSESSEE FOR NON APPEARANCE. THE ASSESSEE HAS F URTHER APPEAL TO THE ITAT, INDORE BENCH INDORE AND THE SAID CASE WAS DISMISSED DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 8 FOR NON APPEARANCE. THE ASSESSEE FILED FOR RESTOR ANCE OF APPEAL AND THE SAME WAS ACCEPTED BY THE BENCH AND THE AP PEAL WAS RESTORED. TRIBUNAL IN ITS ORDER DATED 29.2.2016 OB OBSERVING THAT THE LD. A.O HAS PASSED THE ORDER U/S 144 AND ADDED THE ENTIRE CREDITORS, UNSECURED LOANS AND THEREAFTER THE INVES TMENT MADE IN BUILDING IS ALSO ADDED IN THE INCOME ESTIMATED ON T HE TURNOVER SHOWN IN THE PROFIT AND LOSS ACCOUNT ATTACHED WITH THE PROJECT REPORT, AGAIN DIRECTED THE ASSESSING OFFICER TO MAK E FRESH ASSESSMENT, LD. A.O FRAMED THE ASSESSMENTS ON 29.12 .2016 AFTER MAKING CERTAIN ADDITIONS AGAINST WHICH THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND PARTLY SUCCEEDED. 6. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUN AL RAISING VARIOUS ISSUES INCLUDING THIS COMMON LEGAL ISSUE CH ALLENGING THE VALIDITY OF THE REASSESSMENT PROCEEDINGS. 7. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REASSESSMENT PROCEEDINGS ARE VOID ON ACCOUNT OF TWO REASONS; FIR STLY THE ALLEGED NOTICE ISSUED U/S 148 OF THE ACT FOR ASSESSMENT YEA R 1996-97 AND 1997-98 WHICH WERE REQUIRED TO BE ISSUED LATEST BY 31.3.2003 AND 31.3.2004 RESPECTIVELY WERE ACTUALLY ISSUED ON 27.0 5.2005 WHICH DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 9 WERE BEYOND 4 YEARS FROM THE END OF THE RELEVANT AS SESSMENT YEAR AND ARE THEREFORE BARRED BY LIMITATION. SECONDLY, REASSESSMENT PROCEEDINGS FOR BOTH THE ASSESSMENT YEARS 1996-97 A ND 1997-98 IN THE CASE OF BOTH THE ASSESSEES WERE INITIATED ON T HE BASIS OF THE FINDINGS GIVEN BY LD.CIT(A) IN ITS APPELLATE ORDER FOR ASSESSMENT YEAR 1998-99 VIDE ORDER DATED 27.12.2014 WHEREIN LD . CIT(A) EXCEEDED HIS POWERS, DIRECTING THE ASSESSING OFFICE R TO ISSUE NOTICE U/S 148 OF THE ACT FOR ASSESSMENT YEAR 1996-97 AND 1997-98 IN THE CASE OF BOTH THE ASSESSEES. 8. LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING JUDGMENTS; (I) COMPUTER SCIENCE CORPORATION INDIA) (P) LTD V/ S ADDITIONAL CIT (2014) 268 CTR 110 (MADHYA PRADESH) (II) CIT V/S HIRDEY NARAIN YOGENDRA PRAKASH (1971) 82 ITR 136 (ALL) (III) CONSOLIDATED COFFEE LTD V/S ITO (1985) 155 IT R 729 (KARNATAKA) (IV) M.B. TRADERS V/S ACIT (2010) 132 TTJ 490 (NAGP UR ITAT) (V) MARUBENI INDIA (P) LTD V/S CIT (2010) 328 ITR 306 (DEL) (VI) CIT V/S GREEN WORLD CORPORATION (2009) 314 IT R 81 (SC) DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 10 9. PER CONTRA DEPARTMENTAL REPRESENTATIVE VEHEMENTL Y ARGUED AND SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 10. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. THE ASSESSEE IS BEFORE THE TRIBU NAL IN ITS THIRD ROUND AND SINCE THE FIRST ROUND COMMON ISSUE HAS BE EN RAISED BY BOTH THE ASSESSEES CHALLENGING THE VALIDITY OF THE NOTICE ISSUED U/S 148 OF THE ACT AS WELL AS CHALLENGING THE REASSESSM ENT PROCEEDINGS FRAMED AFTER ISSUANCE OF NOTICE U/S 148 OF THE ACT. 11. THE GENESIS OF ISSUE OF NOTICE U/S 148 OF THE ACT WAS ON ACCOUNT OF THE COMMON FINDING GIVEN BY LD.CIT(A) IN ITS APPELLATE ORDER DATED 27.12.2004 FOR ASSESSMENT YEAR 1998-99 IN THE CASE OF LATE DINESH KUMAR GOYAL AS WELL AS SMT. LAXMIKANTA GOYAL. WE REPRODUCE BELOW THE FINDING OF LD.CIT(A) IN THE CA SE OF SMT. LAXMIKANTA GOYAL; 6.1 THE FACTS ON RECORD, THE FINDINGS GIVEN BY THE AO IN THE ASSESSMENT ORDER AND THE REPORT SUBMITTED, AS WELL AS THE CONTENTIONS OF THE APPELLANT ARE CAREFULLY EXAMINED. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, NO RETURN HAVING BEEN FILED EVEN IN RESPO NSE TO NOTICE U/S 142(1), ISSUE OF NOTICE U/S 148 IS FOUND TO BE PERF ECTLY JUSTIFIED, CONSIDERING AOS REPORT AND ACCORDINGLY THERE IS NO MERIT IN SUCH GROUND OF APPEAL AND THE SAME IS REJECTED. DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 11 6.2 THE AO HAS HIMSELF NOTED THAT THE AMOUNT ADDED A CAPITAL BALANCE WAS SHOWN BY THE APPELLANT IN THE BALANCE SHEET FIL ED BEFORE THE BANK FOR THE PREVIOUS YEAR RELEVANT TO AY 97-98 AND ACCORDIN GLY THERE WAS ABSOLUTELY NO CASE FOR CONSIDERING THIS AMOUNT AS U NEXPLAINED OPENING BALANCE FOR THE YEAR UNDER CONSIDERATION. IF THE AO WAS OF THE VIEW THAT SUCH AMOUNT WAS NOT PROPERLY AND ADEQUATELY EXPLAIN ED, HE SHOULD HAVE IMMEDIATELY TAKEN RECOURSE TO APPROPRIATE PROCEEDIN GS FOR AY 1997-98 AND EARLIER YEARS AS THE FACTS OF THE CASE WARRANTE D. THE AO WHEN DIRECTED TO SUBMIT A FURTHER REPORT AFTER ENQUIRY A LSO HAS DONE PREVIOUS LITTLE TO JUSTIFY THE ADDITION MADE. IT IS ADMITTE D POSITION THAT NO RETURN OF INCOME WAS FILED BY THE APPELLANT FOR ANY AY PRI OR TO AY 98-99 FOR SEVERAL YEARS. IN THAT VIEW OF THE MATTER, CONSIDER ING THE FACTS OF THE CASE AND THE ATTITUDE OF THE APPELLANT, THE AO IS DIRECT ED TO ISSUE NOTICE U/S 148 FOR AY 97-98 AND 96-97 TO BRING TO TAX ESCAPED INCOME BEING UNEXPLAINED ACCRETION TO THE CAPITAL BALANCE AS REF LECTED IN THE BALANCE SHEET FILED WITH THE BANK. 6.3 THERE IS NO MERIT IN THE APPELLANT'S CONTENTION THAT ONLY TENTATIVE PROJECTED BALANCE-SHEETS WERE SUBMITTED TO THE BANK AND THESE WERE NOT FACTUAL AND HENCE INCOME SHOULD NOT HAVE BEEN ESTIM ATED ON THE BASIS OF SUCH BALANCE-SHEETS GIVEN TO THE BANK. ON EXAMINATI ON OF THE FACTS AVAILABLE ON RECORD, IT EMERGES THAT THE APPELLANT AND HER HUSBAND SRI DINESH KUMAR GOYAL BAS APPARENTLY DEFRAUDED THE BAN K, AS THEY HAVE FILED IDENTICAL BALANCE SHEETS BOTH IN THE CASE OF HER AND HER HUSBAND BY MERELY CHANGING THE NAME AND THE FY/AY AS WILL BE C LEAR FROM THE BALANCE-SHEETS SO FILED ENCLOSED HEREWITH AS ANNEXU RE-A-I & A-2 & B-1 & B-2. REFERENCE IN THIS RESPECT MAY BE MADE TO THE O BSERVATION OF HON'BLE MADRAS HIGH COURT TO THE EFFECT THAT NO NOTICE OF S UB-STANDARD MORALITY ON THE PART OF ASSESSEE SHOULD BE TAKEN SO AS TO EN ABLE THEM TO GO BACK ON THEIR SWORN STATEMENTS GIVEN TO THE BANKS AS OBS ERVED IN THE CASE OF DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 12 COIMBATORE SPINNING & WEAVING CO. LTD. VS, CIT 9 5 I TR 3 75(MAD.). I N A SERIES 0 F LATER JUDGMENT, IT BAS BEEN HELD THAT T BE SWORN STATEMENTS GIVEN TO THE BANK CANNOT BE IGNORED. SOME OF THE DE CISIONS ARE NOTED HEREUNDER:- (I) JAI CHAND KANJI & CO. VS. CIT 157ITR 451(RAJ.) . (II) SWADESHI COTTON MILLS CO. LTD. VS. CIT 180 ITR 651,655 (ALI.) (III) PURANLAL RAJKUMAR VS. CIT 107 CTR (CAL.) 27, 30. (IV) KAILA SWEET SUPPLIER VS. CIT 100 TAXMAN 58, 61 (ALL.). 7. PROCEEDING FURTHER, THE ADDITION MADE BY THE AO FOR UNEXPLAINED CASH CREDIT IS SIMILARLY BASED ON THE BALANCE SHEET FILE D TO THE BANK AND SUCH CREDIT BALANCES AS PER FACTS AVAILABLE ON RECORD AR E SHOWN TO BE COMING FROM EARLIER AY AND HENCE, THERE IS NO CASE FOR MAK ING SUCH ADDITION FOR THE YEAR UNDER CONSIDERATION. THE AO WOULD BE FREE TO EXAMINE THE ISSUE REGARDING ADDITION OF ANY OR ALL OF SUCH CASH CREDI TS IN THE PROCEEDING TO BE INITIATED FOR AY 97-98 AND 96-97 AS PER DIRECTIO NS RECORDED ABOVE. 8. FINALLY, THE ADDITION MADE BY THE AO DETERMINING NP ON THE BASIS OF PAST RECORDS, IN THE FACE OF TOTAL NON-COMPLIANCE M ADE BY THE APPELLANT IS REQUIRED TO BE CONFIRMED AND IS ACCORDINGLY CONF IRMED. 12. ON THE BASIS OF THE FINDING GIVEN BY LD. CIT(A) REFERRED ABOVE IN PARA 6.1, 6.2 AND 7, THE ASSESSING OFFICER ISSUED N OTICE U/S 148 OF THE ACT FOR ASSESSING THE INCOME OF THE ASSESSEE FOR AS SESSMENT YEAR 1996- 97 AND 1997-98 ON 27.5.2005. NOW WHETHER THIS ACTI ON OF THE ASSESSING OFFICER OF ISSUING NOTICE U/S 148 OF THE ACT MERELY ON THE BASIS OF FINDING DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 13 GIVEN BY LD. CIT(A) ALLEGEDLY DIRECTING THE ASSES SING OFFICER TO REOPEN THE CASES FOR ASSESSMENT YEAR 1996-97 AND 1997-98 B Y ISSUING NOTICE U/S 148 OF THE ACT CAN BE HELD TO BE JUSTIFIED NEED S TO BE EXAMINED IN THE LIGHT OF THE LEGAL PRONOUNCEMENTS AS WELL AS TH E UNDISPUTED FACT THAT THE CASES HAVE BEEN REOPENED AFTER THE LAPSE OF 4 Y EARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS AND THE MATERIAL EVID ENCE WAS ONLY IN THE FORM OF DIRECTION GIVEN BY LD. CIT(A). 13. WE FIND THAT THE HON'BLE JURISDICTIONAL HIGH CO URT IN THE CASE OF COMPUTER SCIENCE CORPORATION (INDIA) (P) LTD V/S AD DL. CIT ( SUPRA ) HELD THAT THE DIRECTION GIVEN BY CIT(A) SHALL NOT BE CONSTRUED T O BE OF BINDING NATURE BY THE AO AND IT WILL BE OPEN FOR AO TO PROC EED WITH THE ASSESSMENT PROCEEDINGS IN ACCORDANCE WITH LAW, UNIN FLUENCED BY THE SAID IMPUGNED OBSERVATIONS/DIRECTIONS CONTAINED IN THE I MPUGNED ORDER. 14. THE CO-ORDINATE BENCH OF NAGPUR IN THE CASE OF M.B. TRADERS V/S ACIT ( SUPRA ) HELD THAT DIRECTION OF THE HIGHER AUTHORITY INCLUDING THAT O F THE CIT(A) WILL NOT CONFER POWER TO ASSUME JURISDIC TION TO THE AO TO INITIATE REASSESSMENT PROCEEDINGS. DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 14 15. THE HON'BLE APEX COURT IN THE CASE OF CIT V/S G REEN WORLD CORPORATION ( SUPRA ) ADJUDICATING THE VERY SAME ISSUE OBSERVED THAT WHEN A STATUTE PROVIDES FOR DIFFERENT HIERARCHIES PROVIDING FOR FORUMS IN RELATION TO PASSING OF AN ORDER AS ALSO APPELLATE O R ORIGINAL ORDER; BY NO STRETCH OF IMAGINATION A HIGHER AUTHORITY CAN INTER FERE WITH THE INDEPENDENCE WHICH IS THE BASIC FEATURE OF ANY STAT UTORY SCHEME INVOLVING ADJUDICATORY PROCESS. RELEVANT PORTION OF THE JUDGMENT OF THE HON'BLE APEX COURT IS REPRODUCED BELOW; '30. INDISPUTABLY, CIT (SHIMLA) HAD NO JURISDICTION TO ISSUE DIRECTIONS. NOTICES ISSUED PURSUANT THERETO WOULD BE BAD IN LAW . WE MAY, HOWEVER, PLACE ON RECORD THAT THE REVENUE IN THE 'LIST OF DA TES' WHILE QUESTIONING THE OBSERVATIONS MADE BY THE HIGH COURT THAT THE NO TICES UNDER SECTION 148 OF THE ACT FOR THE ASSESSMENT YEARS 1996-97 AND 1997-98 ARE NOT SAVED FROM THE RIGOURS OF THE LAW OF LIMITATION, UN DER THE EXCLUSIONARY PROVISIONS OF SECTIONS 150(1) AND 153(3)(I/) OF THE ACT, STATED :- 'IN THIS REGARD, IT IS IMPORTANT TO NOTE THAT THESE NOTICES WERE ISSUED TO GIVE EFFECT TO THE DIRECTIONS CONTAINED IN THE REVI SION ORDER UNDER SECTION 263 PASSED BY THE CIT ON 12-7-2004 UNLIKE SECTION 1 49 OF THE ACT, THERE IS NO TIME LIMIT UNDER SECTION 150(1) THAT STARTS W ITH NON OBSTANTE CLAUSE AND TO THAT EXTENT THE OBSERVATIONS OF THE HON'BLE HIGH COURT ARE IN ERROR. FURTHER SECTION 150(2) PROVIDES NECESSARY RESTRICTI ON ON SECTION 150( 1) AND EVEN UNDER THE SAID RESTRICTION PROVIDED BY SEC TION 150(2), THE ISSUE DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 15 OF NOTICES UNDER SECTION 148 OF THE ASSESSMENT YEAR S 1996-97 AND 1997- 98 IN INSTANT CASE IS WITHIN THE RESTRICTED TIME LI MIT PROVIDED UNDER SECTION 150(2) OF THE INCOME-TAX ACT.' SECTION 150 OF THE ACT READS AS UNDER :- '150. PROVISION FOR CASES WHERE ASSESSMENT IS IN PU RSUANCE OF AN ORDER ON APPEAL, ETC.-(1) NOTWITHSTANDING ANYTHING CONTAI NED IN SECTION 149, THE NOTICE UNDER SECTION 148 MAY BE ISSUED AT ANY T IME FOR THE PURPOSE OF MAKING AN ASSESSMENT OR REASSESSMENT OR RECOMPUT ATION IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN AN ORDER PASSED BY ANY AUTHORITY IN ANY PROCEEDING UNDER THIS ACT BY WAY OF APPEAL, REFERENCE OR REVISION OR BY A COURT IN ANY PROCEEDING UNDER ANY OTHER LAW. (2) THE PROVISIONS OF SUB-SECTION (1) SHALL NOT APP LY IN ANY CASE WHERE ANY SUCH ASSESSMENT, REASSESSMENT OR RECOMPUTATION AS IS REFERRED TO IN THAT SUB-SECTION RELATES TO AN ASSESSMENT YEAR IN R ESPECT OF WHICH AN ASSESSMENT, REASSESSMENT OR RECOMPUTATION COULD NOT HAVE BEEN MADE AT THE TIME THE ORDER WHICH WAS THE SUBJECT-MATTER OF THE APPEAL, REFERENCE OR REVISION, AS THE CASE MAY BE, WAS MADE BY REASON OF ANY OTHER PROVISION LIMITING THE TIME WITHIN WHICH ANY ACTION FOR ASSESSMENT, REASSESSMENT OR RECOMPUTATION MAY BE TAKEN.' THE AFOREMENTIONED PROVISION ALTHOUGH APPEARS TO BE OF A VERY WIDE AMPLITUDE, BUT WOULD NOT MEAN THAT RECOURSE TO REOP ENING OF THE PROCEEDINGS IN TERMS OF SECTIONS 147 AND 148 OF THE ACT CAN BE INITIATED AT ANY POINT OF TIME WHATSOEVER. SUCH A PROCEEDING CAN BE INITIATED ONLY WITHIN THE PERIOD OF LIMITATION PRESCRIBED THEREFOR E AS CONTAINED IN SECTION 149 OF THE ACT. DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 16 SECTION 150(1) OF THE ACT IS AN EXCEPTION TO THE AF OREMENTIONED PROVISION. IT BRINGS WITHIN ITS AMBIT ONLY SUCH CASES WHERE RE OPENING OF THE PROCEEDINGS MAY BE NECESSARY TO COMPLY WITH AN ORDE R OF THE HIGHER AUTHORITY. FOR THE SAID PURPOSE, THE RECORDS OF THE PROCEEDINGS MUST BE BEFORE THE APPROPRIATE AUTHORITY. IT MUST EXAMINE T HE RECORDS OF THE PROCEEDINGS. IF THERE IS NO PROCEEDING BEFORE IT OR IF THE ASSESSMENT YEAR IN QUESTION IS ALSO NOT A MATTER WHICH WOULD FALL F OR CONSIDERATION BEFORE THE HIGHER AUTHORITY, SECTION 150 OF THE ACT WILL H AVE NO APPLICATION. IN ITO V. MURLIDHAR BHAGWAN OAS [1964] 52 ITR 335 (SC) , IT WAS HELD 'THE PROCEEDINGS WOULD BE IN TIME, IF THE SECOND PR OVISO TO SECTION 34(3) OF THE ACT COULD BE INVOKED. THE QUESTION, THEREFOR E, IS WHAT IS THE TRUE MEANING OF THE TERMS OF THE SECOND PROVISO TO SECTI ON 34(3) OF THE ACT. IT READS: 'PROVIDED FURTHER THAT NOTHING IN THIS SECTION LIMI TING THE TIME WITHIN WHICH ANY ACTION MAY BE TAKEN, OR ANY ORDER, ASSESS MENT OR REASSESSMENT MAY BE MADE, SHALL APPLY TO A REASSESS MENT MADE UNDER SECTION 27 OR TO AN ASSESSMENT OR REASSESSMENT MADE ON THE ASSESSEE OR ANY PERSON IN CONSEQUENCE OF OR TO GIVE EFFECT TO A NY FINDING OR DIRECTION CONTAINED IN AN ORDER UNDER SECTION 31, SECTION 33, SECTION 33A, SECTION 338, SECTION 66 OR SECTION 66A'. PRIMA FACIE THIS PROVISO LIFTS THE BAN OF LIMITATIO N IMPOSED BY THE OTHER PROVISIONS OF THE SECTION IN THE MATTER OF TAKING A N ACTION IN RESPECT OF OR MAKING AN ORDER OF ASSESSMENT OR REASSESSMENT FALLI NG WITHIN THE SCOPE OF THE SAID PROVISO. THE SCOPE OF THE PROVISO IS CO NFINED TO AN ASSESSMENT OR RE-ASSESSMENT MADE ON THE ASSESSEE OR ANY PERSON IN CONSEQUENCE OF AN ORDER TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN ANY ORDER MADE UNDER SECTION 31 I.E., IN AN APPEAL BEFORE THE ASSISTANT APPELLATE COMMISSIONER, UNDER SECTION 33 I.E., IN AN APPEAL B EFORE THE TRIBUNAL, DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 17 UNDER SECTION 33A I.E., IN A REVISION BEFORE THE CO MMISSIONER, UNDER SECTION 338, I.E., IN A REVISION BEFORE THE COMMISS IONER AGAINST AN ORDER OF THE INCOME-TAX OFFICER, AND UNDER SECTIONS 66 AN D 66A, I.E., IN A REFERENCE TO THE HIGH COURT AND APPEAL AGAINST THE HIGH COURT'S ORDER TO THE SUPREME COURT. LEARNED COUNSEL FOR THE APPELLAN T CONTENDS THAT THE SCOPE OF THE PROVISO IS ONLY CONFINED TO THE ASSESS MENT OF THE YEAR THAT IS THE SUBJECT-MATTER OF THE APPEAL OR THE REVISION, A S THE CASE MAY BE. LEARNED COUNSEL FOR THE DEPARTMENT ARGUES THAT THE COMPREHENSIVE PHRASEOLOGY USED IN THE PROVISO TAKES IN ITS BROAD SWEEP ANY FINDING GIVEN BY THE APPROPRIATE AUTHORITY NECESSARY FOR TH E DISPOSAL OF THE APPEAL OR THE REVISION, AS THE CASE MAY BE, AND TO ANY DIRECTION GIVEN BY THE SAID AUTHORITY TO EFFECTUATE ITS FINDING AND TH AT THE SAID FINDING OR DIRECTION MAY BE IN RESPECT OF ANY YEAR OR ANY PERS ON. AS THE PHRASEOLOGY USED IN THE PROVISO IS NOT CLEAR OR UNAMBIGUOUS. TH E QUESTION RAISED CANNOT BE SATISFACTORILY RESOLVED WITHOUT HAVING A PRECISE APPRECIATION OF A BRIEF HISTORY OF SECTION 34 OF THE ACT CULMINATIN G IN THE ENACTMENT OF THE PROVISO IN THE PRESENT FORM.' (P. 339) THIS COURT NOTICED THE DEVELOPMENT OF LAW AS ALSO T HE FACT THAT THE DECISION OF THE INCOME-TAX OFFICER GIVEN IN A PARTI CULAR YEAR DOES NOT OPERATE AS RES JUDICATA TO OPINE: 'THE LIFTING OF THE BAN WAS ONLY TO GIVE EFFECT TO THE ORDERS THAT MAY BE MADE BY THE APPELLATE, REVISIONAL OR REVIEWING TRIB UNAL WITHIN THE SCOPE OF ITS JURISDICTION. IF THE INTENTION WAS TO REMOVE THE PERIOD OF LIMITATION IN RESPECT OF ANY ASSESSMENT AGAINST ANY PERSON, TH E PROVISO WOULD NOT HAVE BEEN ADDED AS A PROVISO TO SUB-SECTION (3) OF SECTION 34, WHICH DEALS WITH COMPLETION OF AN ASSESSMENT, BUT WOULD H AVE BEEN ADDED TO SUB-SECTION (1) THEREOF.' DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 18 IN REGARD TO THE QUESTION THAT WHAT WOULD BE THE ME ANING OF THE TERM 'FINDING' OR 'DIRECTION', IT WAS HELD: 'A 'FINDING', THEREFORE, CAN BE ONLY THAT WHICH IS NECESSARY FOR THE DISPOSAL OF AN APPEAL IN RESPECT OF AN ASSESSMENT O F A PARTICULAR YEAR. THE APPELLATE ASSISTANT COMMISSIONER MAY HOLD, ON T HE EVIDENCE, THAT THE INCOME SHOWN BY THE ASSESSEE IS NOT THE INCOME FOR THE RELEVANT YEAR AND THEREBY EXCLUDE THAT INCOME FROM THE ASSESSMENT OF THE YEAR UNDER APPEAL. THE FINDING IN THAT CONTEXT IS THAT THAT IN COME DOES NOT BELONG TO THE RELEVANT YEAR. HE MAY INCIDENTALLY FIND THAT TH E INCOME BELONGS TO ANOTHER YEAR, BUT THAT JS NOT A FINDING NECESSARY F OR THE DISPOSAL OF AN APPEAL IN RESPECT OF THE YEAR OF ASSESSMENT IN QUES TION. THE EXPRESSION 'DIRECTION' CANNOT BE CONSTRUED IN VACUUM, BUT MUST BE COLLATED TO THE DIRECTIONS WHICH THE APPELLATE ASSISTANT COMMISSION ER CAN GIVE UNDER SECTION 31. UNDER THAT SECTION HE CAN GIVE DIRECTIO NS, INTER ALIA, UNDER SECTION 31 (3)(B), ( C) OR (E) OR SECTION 31 (4). T HE EXPRESSION 'DIRECTIONS' IN THE PROVISO COULD ONLY REFER TO THE DIRECTIONS W HICH THE APPELLATE ASSISTANT COMMISSIONER OR OTHER TRIBUNALS CAN ISSUE UNDER THE POWERS CONFERRED ON HIM OR THEM UNDER THE RESPECTIVE SECTI ONS. THEREFORE, THE EXPRESSION 'FINDING' AS WELL AS THE EXPRESSION 'DIR ECTION' CAN BE GIVEN FULL MEANING, NAMELY, THAT THE FINDING IS A FINDING NECE SSARY FOR GIVING RELIEF IN RESPECT OF THE ASSESSMENT OF THE YEAR IN QUESTIO N AND THE DIRECTION IS A DIRECTION WHICH THE APPELLATE OR REVISIONAL AUTHORI TY, AS THE CASE MAY BE, IS EMPOWERED TO GIVE UNDER THE SECTIONS MENTIONED T HEREIN.' ------------- ------------- 32. WHEN A STATUTE PROVIDES FOR DIFFERENT HIERARCHI ES PROVIDING FOR FORUMS IN RELATION TO PASSING OF AN ORDER AS ALSO APPELLAT E OR ORIGINAL ORDER; BY NO STRETCH OF IMAGINATION A HIGHER AUTHORITY CAN IN TERFERE WITH THE DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 19 INDEPENDENCE WHICH IS THE BASIC FEATURE OF ANY STAT UTORY SCHEME INVOLVING ADJUDICATORY PROCESS.:' 16. RESPECTFULLY FOLLOWING THE ABOVE JUDGMENTS AND ON APPLYING THE SAME ON THE FACTS OF THE INSTANT APPEALS, WE FIND T HAT THE LD. A.O HAS NOT APPLIED HIS MIND, NOR GATHERED ANY MATERIAL EVIDENC E AND MERELY ISSUED THE NOTICES U/S 148 OF THE ACT ON FALLACIOUS ASSUMP TIONS BY ACTING ONLY ON THE DIRECTIONS OF LD. CIT(A) WHO IS LEGALLY NOT HAVING SUCH POWERS TO GIVE DIRECTION TO REOPEN THE ASSESSMENT. IT IS ALSO NOT DISPUTED THAT THE LD. A.O HAS NOT TAKEN THE PRIOR APPROVAL OF JOINT COMMISSIONER OF INCOME TAX U/S 151 OF THE ACT BEFORE ISSUING NOTIC E U/S 148 OF THE ACT WHICH IS A MANDATORY REQUIREMENT. IN OUR CONSIDERE D VIEW THE ASSESSING OFFICER HAS SIMPLY ACTED UPON I.E. INITIATED THE RE OPENING PROCEEDINGS ON THE DIRECTIONS OF LD. CIT(A) AND HAS TOTALLY IGNORE D HIS PART OF THE JOB I.E. HIS SATISFACTION. RESPECTFULLY FOLLOWING THE ABOVE JUDGMENTS OF APEX COURT AND OTHER LOWER COURTS, WE ARE OF THE CONSIDE RED VIEW THAT THE NOTICE U/S 148 OF THE ACT ISSUED FOR ESCAPEMENT OF INCOME WITHIN THE MEANING OF SECTION 147 OF EXPLANATION 2(A) READ WIT H SECTION 150(1) OF THE ACT FOR ASSESSMENT YEAR 1996-97 AND 1997-98 IN THE CASE OF SMT. LAXMIKANTA GOYAL AND LATE DINESH KUMAR GOYAL THROUG H HIS LEGAL HEIR SMT. LAXMIKANTA GOYAL ARE AGAINST THE SETTLED PRINC IPLES OF LAW AND ARE DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 20 THUS VOID AB INITIO. WE ACCORDINGLY SET ASIDE THE FINDING OF BOTH THE LO WER AUTHORITIES AND QUASH THE IMPUGNED ASSESSMENT PROCE EDINGS IN THE CASE OF BOTH THE ASSESSEES FOR BOTH THE ASSESSMENT YEAR S 1996-97 AND1997- 98 BEING INVALID AND BAD IN LAW AND ALSO DIRECT THE LD. ASSESSING OFFICER TO DELETE THE ADDITIONS MADE THEREIN. WE THUS ALLOW THIS COMMON ISSUE RAISED BY BOTH THE ASSESSEES CHALLENGING THE VALID ITY OF ISSUANCE OF NOTICE U/S 148 OF THE ACT IN FAVOUR OF THE ASSESSEE AND OTHER GROUNDS BEING ACADEMIC IN NATURE ARE RENDERED TO BE INFRUCT UOUS AND THESE ARE DISMISSED BEING INFRUCTUOUS. IN THE RESULT APPEAL OF THE ASSESSEES FOR ASSESSMENT YEAR 1996-97 AND 1997-98 PARTLY ARE ALLO WED. 17. NOW WE TAKE UP ITA NO.548/IND/2017 IN THE CASE OF SMT. LAXMI KANTA GOYAL FOR ASSESSMENT YEAR 1999-2000. IN THIS APPEAL THE ASSESSEE APART FROM CHALLENGING THE ADDITION OF RS .3,81,460/- CONFIRMED BY LD. CIT(A) HAS ALSO RAISED FOLLOWING GROUND; THE LD. CIT (A) HAS GROSSLY ERRED ON FACTS AND IN LAW IN IGNORING THE FACTS THAT THE REASSESSMENT PROCEEDINGS IRRITATED U/S 148 R.W.S. 147 EXPLANATION 2{A) ON 28-03-2006 WERE VOID AB INITIO AS THESE WERE BASED ON FALLACIOUS ASSUMPTION THAT THE AGGREGATE BANK DE POSITS OF RS. 1,85,553/- CONSTITUTED UNDISCLOSED INCOME OF THE AS SESSEE OVERLOOKING FACT THAT SOURCE OF DEPOSIT NEED NOT NECESSARILY BE INCOME OF THE ASSESSEE, AS SUCH, THE NOTICE WAS ISSUED WITHOUT APPLICATION OF MIND BY THE AO FOR DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 21 VERIFICATION OF SOURCE OF BANK DEPOSITS AND DID NOT FULFILL THE REQUIREMENT OF LAW FOR ISSUANCE OF NOTICE U/S 147 EXPLANATION 2(A) /148. 18. AT THE OUTSET LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ADDITIONS MADE BY THE LD. A.O WILL NOT STAND FOR, A S HE COULD NOT MAKE THE ADDITIONS ON SOME OTHER GROUNDS WHICH DID NOT FORM THE PART OF THE REASONS RECORDED BY HIM. HE ALSO SUBMI TTED THAT THE ASSESSING OFFICER MAY HAVE MADE OTHER ADDITIONS BUT BEFORE MAKING ANY SUCH ADDITION FOR OTHER REASONS, ADDITION SHOUL D HAVE BEEN MADE FOR THE REASONS RECORDED IN THE NOTICE ISSUED U/S 148 OF THE ACT. HE PLACED RELIANCE ON FOLLOWING JUDGMENTS; (I) MUNNI DEVI V/S ITO ITA NO. 3534/DEL/2014 DATED 15.09.2016 (II) BABY YADAV V/S ITO ITA NO. 5394/DEL/2016 DATE D 27.04.2017 (III) AMRIK SINGH V/S ITO (2016) 159 ITD 329 (AMRI TSAR TRIB) DATED 11.5.2016 (IV) GURPAL SINGH V/S ITO (2016) 159 ITD 797 (AMRIT SAR TRIB) DATED 27.5.2016 (V) VINOD MAHESHWARI V/S ITO ITA NO. 1498/DEL/2015 DATED 09.09.2016 DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 22 (VI) PRAVEEN KUMAR JAIN V/S ITO ITA NO. 1331/DEL D ATED 22.01.2016 (VII) SARAF GRAMODYOG SANSTHAN V/S ITO (2007) 108 ITD 115 (AGRA) (VIII) C.M. MAHADEVA V/S CIT ITA NO. 795/2009 (KARN ATAKA HIGH COURT) DATED 24.08.2015 (IX) PRASHANT S. JOSHI V/S ITO (2010) 324 ITR 154 (BOMBAY) (X) INGRAM MICRO (INDIA) EXPORTS (P) LTD V/S DCIT (2017) 78 TAXMANN.COM 140 (BOMBAY) (XI) CIT V/S EXPEDITORS INTERNATIONAL INDIA (P) LT D (2012) 18 TAXMANN.COM.29 (DELHI) (XII) CIT V/S MOHMED JUNED DADANI (2014) 355 ITR 17 2 (GUJARAT) (XIII) ACIT V/S MAJOR DEEPAK MEHTA (2012) 344 ITR 6 41 (CHATTISGARH) (XIV) CITV/S JET AIRWAYS (I) LTD (2011) 331 ITR 236 (BOMBAY) (XV) RANBAXY LABORATORIES LTD V/S CIT (2011) 336 IT R 136 (DELHI) (XVI) CIT V/S RAM SINGH (2008) 306 ITR 343 (RAJ.) DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 23 19. LD. COUNSEL FOR THE ASSESSEE ALSO CHALLENGED TH E REOPENING AND SUBMITTING THAT THE LD. A.O PROCEEDED ON THE FA LLACIOUS ASSUMPTIONS THAT THE BANK DEPOSITS CONSTITUTES UND ISCLOSED INCOME AND HE COMPLETELY OVER RULED THE FACT THAT T HE SOURCES OF DEPOSITS NEED NOT NECESSARILY BE THE INCOME OF THE ASSESSEE. FROM THE POINT OF VIEW OF THE DEPARTMENT IT CAN BE A CASE OF EXAMINATION AND VERIFICATION BUT THEN THE REASSESSM ENT PROCEEDINGS CANNOT BE RESORTED TO ONLY TO EXAMINE T HE FACTS OF THE CASE NO MATTER HOW DESIRABLE THAT BE UNLESS THERE I S A REASON TO BELIEVE RATHER THAN TO SUSPECT THAT THE INCOME HAS ESCAPED THE ASSESSMENT. IN SUPPORT OF THIS CONTENTION RELIANCE IS PLACED ON FOLLOWING DECISIONS; (I) BIR BAHADUR SINGH SIJWALI V/S ITO (2015) 54 TAXMANN.COM 366 (DELHI-TRIB.) (II) SATYADEV SINGH V/S ITO, ITA NO.243/AGRA/2017 (AGRA I.T.A.T.) ORDER DATED 04.06.2018 (III) KHALIQ AHMED V/S ITO, ITA NO.71/LKW/2017 (LU CKNOW- I.T.A.T.) ORDER DATED 16.01.2018 DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 24 (IV) BABY YADAV ALIAS ANITA YADAV V/S ITO ITA NO.539/DEL./2016 (I.T.A.T.-DELHI) ORDER DATED 27.04.2017. (V) GURPAL SINGH V/S ITO (2016) 71 TAXMANN.COM 108 (AMRITSAR TRIB) (VI) MARIYAM ISMAILRAJWANI V/S ITO ITA NO.676/AHD/ 2016 (AHMEDABAD-I.T.A.T.) ORDER DATED 09.08.2016 (VII) INDRA PAL SINGH V/S ITO ITA NO.721/LKW/2016 (LUCKNOW-I.T.A.T.) ORDER DATED 18.09.2018 (VIII) M/S. DHARAM CHAND SOHAN LAL & COMPANY V/S IT O ITA NO.307 & 208/JP/16 (JAIPUR-I.T.A.T.) ORDER DATED 01.09.2017 (IX) AMRUT METAL COATS V/S ITO CO NO. 4/AHD/2013 OF ITA NO.1626/AHD/2012 AND CO NO.5/AHD/2013 OF ITA NO.1627/AHD/2012, A.Y.2007-08 AND 2008-09 (I.T.A.T. - AHMEDABAD) ORDER DATED 27.1.2016 (X) SUBRATA SAHA V/S ITO, ITA NO.2395/KOL/2017 (I.T .A.T. KOLKATA) ORDER DATED 25.07.2018 (XI)VENU GOPAL KARAVADI V/S ITO ITA NO.2002/HYD/201 7 (HYDERABAD-I.T.A.T.) ORDER DATED 27.04.2018 (XII) MARTECH PERIPHERALS (P) LTD V/S DCIT (2017) 3 94 ITR 733 DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 25 (MADRAS HC) 20. PER CONTRA DEPARTMENTAL REPRESENTATIVE VEHEMENT LY ARGUED AND SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 21. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. WE WILL FIRST TAKE UP THE LEGAL ISSUE RAISED IN GROUND NO.2 WHEREIN THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT PROCEEDINGS INITIATED BY ISSUANCE OF NOT ICE U/S 148 OF THE ACT. BEFORE MOVING FURTHER WE WILL FIRST LIKE TO REPRODUCE THE NOTICE ISSUED U/S 148 OF THE ACT FOR THE ASSESSMENT YEAR 1999- 2000; SMT. LAXMIKANTA GOYAL W/O SHRI DINESH GOYAL A.Y. 1 999- 2000 REASONS RECORDED U/S 148(2) OF THE IT ACT. IN THE CASE SMT. LAXMIKANTA GOYAL W/O SHRI DINESH GOYAL A.Y. 1 999- 2000. ----- IN ASSESSMENT YEAR 1998-1999 DURING THE COURSE OF ASSESSMENT PROCEEDING THE ASSESSEE HAS FILED BANK S TATEMENT OF MANDSAUR COMMISSIONER COOPERATIVE BANK NEEMUCH I N WHICH THE ASSESSEE SMT. LAXMIKANTA GOYAL W/O SHRI D INESH GOYAL NEEMUCH HAS PAID MORE THAN 1,85,553/-. THE A SSESSEE HAS NOT FILED RETURN OF INCOME. I HAVE THEREFORE R EASONS TO BELIEVE THAT THE INCOME OF RS.1,85,553/- CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING TO EXPLANATIO N TO (A) OF SECTION 147 OF THE IT ACT. FOR THE A.Y. 1999-2 000. SEND DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 26 PROPOSAL TO HON'BLE JCIT RATLAM RANGE, RATLAM FOR H IS KIND APPROVAL FOR ISSUE OF NOTICE UNDER SECTION 148 FOR A.Y. 1999- 2000 22. THE ABOVE IMPUGNED NOTICE ISSUED U/S 148 OF THE ACT WAS ISSUED ALLEGING THE ESCAPEMENT OF INCOME OF RS.1,85 ,553/- WHICH WAS THE TOTAL OF VARIOUS DEPOSITS IN THE BANK ACCOU NT HELD BY THE ASSESSEE AT MANDSAUR COMMISSIONER CO-OPERATIVE BANK , MANDSAUR. HOWEVER FROM PERUSAL OF THE IMPUGNED ASS ESSMENT ORDER WE FIND THAT THE ADDITION WAS MADE FOR UN-EXP LAINED INVESTMENT IN CONSTRUCTION OF BUILDING AT RS.9,62,8 00/- WHICH WAS SUBSEQUENTLY SCALED DOWN TO RS.3,81,460/-BY LD. CIT (A). HOWEVER NO ADDITION HAS BEEN MADE BY LD.A.O FOR THE ALLEGED BANK DEPOSITS AT RS.1,85,553/-. IN THE GIVEN FACTS WHETHER THE L D. A.O CAN ASSESS OTHER INCOME OF THE ASSESSEE WITHOUT ASSESSING THE INCOME FOR WHICH REASONS WERE RECORDED?. WE FIND THAT JUDGMEN T OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT V/S JET AIRWAY S INDIA LTD SQUARELY APPLIES ON THE FACTS AS WELL AS IN THE FAV OUR OF THE ASSESSEE AS THE HON'BLE COURT HELD THAT SECTION 147 OF THE ACT PROVIDES THAT THE ASSESSING OFFICER MAY ASSESS THE INCOME WHICH H AS ESCAPED ASSESSMENT AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 27 ESCAPED ASSESSMENT WHICH COMES TO HIS NOTICE SUBSEQ UENTLY IN THE COURSE OF PROCEEDINGS UNDER THE SECTION. EXPLANATIO N 3 OF SECTION 147 INSERTED BY FINANCE ACT 2009 WITH RETROSPECTIVE EFFECT FROM 1.4.1989 PROVIDES THAT THE ASSESSING OFFICER MAY AS SESS OR REASSESS INCOME IN RESPECT OF ANY ISSUE. NOTWITHSTANDING RE ASONS FOR WHICH SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REAS ONS RECORDED. HON'BLE COURT FURTHER HELD THAT THE WORD AND ALS O INDICATE THAT REASSESSMENT MUST BE IN RESPECT TO THE INCOME FOR W HICH THE ASSESSING OFFICER HAS FORMED AN OPINION AND ALSO IN RESPECT OF ANY OTHER INCOME WHICH COMES TO HIS NOTICE SUBSEQUENTLY . HOWEVER, IF THE ASSESSING OFFICER ACCEPTS THE OBJECTION OF THE ASSESSEE AND DOES NOT ASSESS THE INCOME WHICH WAS A BASIS OF THE NOTI CE IT IS NOT OPEN TO HIM TO ASSESS THE INCOME UNDER SOME OTHER ISSUE INDEPENDENTLY. 23. APPLYING THE ABOVE JUDGMENT AND THE FACTS OF TH E ASSESSEE IN THE INSTANT APPEAL, WE FIND THAT THE CASE OF THE AS SESSEE WAS OPENED FOR ASSESSMENT AFTER ISSUANCE OF NOTICE U/S 148 OF THE ACT AFTER 4 YEARS FROM THE END OF THE ASSESSMENT YEAR FOR THE A LLEGED ESCAPEMENT OF INCOME OF RS.1,85,553/- BEING THE DEP OSITS IN THE DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 28 BANK AND ASSESSMENT FRAMED THEREAFTER ON 27.12.2016 . LD.A.O DID NOT MADE ANY ADDITION FOR RS.1,85,553/- OR PART TH EREOF BUT HAS MADE ADDITION FOR OTHER INCOME I.E. UNACCOUNTED INV ESTMENT AT RS.9,62,800/-. WE THEREFORE RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT AND THE GIVEN FACTS AND C IRCUMSTANCES OF THE CASE ARE OF THE CONSIDERED VIEW THAT AS THE LD.A.O HAS NOT ASSESSED THE INCOME FOR WHICH THE REASONS WERE RECO RDED IN THE NOTICE ISSUED U/S 148 OF THE ACT, AND THEREFORE IT WAS NOT OPEN TO HIM TO MAKE THE ADDITION FOR UNACCOUNTED INVESTMENT OF RS.9,62,800/-. WE ACCORDINGLY SET ASIDE THE FINDING OF LD.CIT(A) AND DIRECT THE LD.A.O TO DELETE THE ADDITION OF RS.9,62 ,800/-. WE ACCORDINGLY ALLOW THIS LEGAL ISSUE RAISED IN GROUND NO.2 IN THE ASSESSEES APPEAL. AS REGARDS GROUND NO. 1 & 3, WE FIND NO REASON TO ADJUDICATE THE SAME AS WE HAVE ALREADY DELETED T HE ADDITION AND THEREFORE GROUND NO. 1 & 3 ARE RENDERED TO BE INFRU CTUOUS AND DEALING WITH THEM ARE MERELY ACADEMIC IN NATURE AND ARE THEREFORE DISMISSED BEING INFRUCTUOUS. GROUND NO.4 IS GENERA L IN NATURE WHICH NEEDS NO ADJUDICATION. APPEAL OF THE ASSESSEE FOR ASSE4SSMENT YEAR 1999-2000 IS PARTLY ALLOWED/ DINESH KUMAR GOYAL & LAXMI KANTA GOYAL ITA NOS.544 TO 548/IND/2017 29 24. IN THE RESULT ALL THE APPEALS OF BOTH THE ASSES SEE ARE PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 21.12. 2018. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 21 DECEMBER, 2018 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE