Sudarshan Kumar Jain, New Delhi V. DCIT, Ward-61(5), New Delhi

ITA 5504/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3113 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 23-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L ANURAGI
• Assessee Lawyers: MANJEET SINGH KAPOOR
• Keywords: Reassessment proceedings
• Section: 131; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.5504/DEL/2018 ASSESSMENT YEAR: 2008-09 SUDARSHAN KUMAR JAIN, 16/315, KHANJOOR ROAD, NEAR JOSHI ROAD, KAROL BAGH, NEW DELHI. PAN: AALPJ2202N VS. DCIT, WARD-61(5), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANJEET SINGH KAPOOR, FCA REVENUE BY : SHRI S.L. ANURAGI, SR.DR DATE OF HEARING : 21.02.2019 DATE OF PRONOUNCEMENT : 28.02.2019 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 29 TH JUNE, 2018 OF THE CIT(A)-20, NEW DELHI, RELATING TO ASSESSMENT YE AR 2008-09. 2. ALTHOUGH A NUMBER OF GROUNDS HAVE BEEN RAISED BY THE ASSESSEE, THEY ALL RELATE TO THE ORDER OF THE CIT(A) CONFIRMING THE ADDITION OF RS.10,01,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED MONEY U /S 69A OF THE IT ACT. THE ASSESSEE HAS ALSO CHALLENGED THE VALIDITY OF THE RE ASSESSMENT PROCEEDINGS IN THE OTHER GROUNDS. ITA NO.5504/DEL/2018 2 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND A DOCTOR BY PROFESSION. HE FILED HIS RETURN OF INCOME DECLARIN G AN INCOME OF RS.1,42,160/-. ON THE BASIS OF THE INFORMATION RECEIVED FROM THE DDIT (INV.), UNIT 5(1), NEW DELHI THAT THE ASSESSEE HAS MADE CASH PAYMENTS OF RS.21,01,000 /- AS DONATION/CAPITATION FEE OVER AND ABOVE THE REGULAR COURSE FEE TO SANTOSH MEDICAL COLLEGE, GHAZIABAD FOR ADMISSION OF HIS SON, THE ASSESSING OFFICER REOPENED THE ASSE SSMENT U/S 147/148 OF THE IT ACT. SUBSEQUENTLY, THE ASSESSING OFFICER ALSO ISSUED NOT ICE U/S 143(2)/142(1) WHICH WAS DULY SERVED ON THE ASSESSEE. THE ASSESSEE, IN RESP ONSE TO THE SAME, APPEARED BEFORE THE ASSESSING OFFICER FROM TIME TO TIME AND FILED N ECESSARY DETAILS/INFORMATION AS REQUIRED. DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, THE LD. AR OF THE ASSESSEE WAS CONFRONTED WITH THE QUERY REGARDING THE CASH PAYMEN T OF RS.21,01,000/- TO M/S SANTOSH MEDICAL COLLEGE OVER AND ABOVE THE REGULAR COURSE FEE AS DONATION/CAPITATION FEE. THE ASSESSING OFFICER ALSO ISSUED SUMMONS U/S 131 OF THE IT ACT TO THE ASSESSEE FOR RECORDING HIS STATEMENT. IT WAS SUBMITTED BY T HE LD. AR OF THE ASSESSEE THAT THE ASSESSEE IS 88 YEARS OLD SENIOR CITIZEN AND SUFFERI NG FROM DISEASES AND NOT ABLE TO TRAVEL TO THE OFFICE AND, THEREFORE, IS NOT IN A PO SITION TO ATTEND PERSONALLY. HOWEVER, SHRI SANDEEP JAIN, SON OF THE ASSESSEE APPEARED BEF ORE THE ASSESSING OFFICER ALONG WITH AR OF THE ASSESSEE WHOSE STATEMENT WAS RECORDE D. SHRI SANDEEP JAIN IN HIS STATEMENT BEFORE THE ASSESSING OFFICER SUBMITTED TH AT HE HAS PAID THE REQUIRED AMOUNT WHICH HAS BEEN EXTRACTED BY THE ASSESSING OFFICER I N HIS ORDER, AND WHICH READS AS UNDER:- ITA NO.5504/DEL/2018 3 I DONT REMEMBER THE EXACT AMOUNT BUT WHATEVER WAS REQUIRED TO BE PAID WAS PAID BY ME AND NOT MY FATHER SHRI S.K. JAIN. ME AN D MY WIFE ARE DOCTORS AND SINCE 1996 (12 YEAR FROM THIS PERIOD) AND WE HAD SU FFICIENT SOURCE TO PAY THIS. SH. SANDEEP JAIN NOTHING HAS SUBMITTED IN SUPPORT O F HIS STATEMENT RECORDED AS ABOVE. 4. THE ASSESSING OFFICER, THEREAFTER ASKED SHRI SAN DEEP JAIN TO FILE SUPPORTING DOCUMENTS IN EVIDENCE OF HIS CLAIM. HOWEVER, ACCOR DING TO THE ASSESSING OFFICER, SHRI JAIN FAILED TO SUBSTANTIATE THE SOURCE TO HIS SATISFACTION. SINCE THE INFORMATION REGARDING THE ASSESSEE WAS RECEIVED FORM THE DDIT ( INV.) UNIT, NEW DELHI, WHEREIN DR. P. MAHALINGAM IN HIS STATEMENT RECORDED U/S 132 (4) OF THE ACT HAS ADMITTED TO HAVE ACCEPTED CAPITATION FEE AS UNACCOUNTED MONEY F ROM SHRI S.K. JAIN, F/O SHRI SANDEEP JAIN AND SURRENDERED THE SAME FOR TAXATION, THE ASSESSING OFFICER MADE ADDITION OF RS.10,01,000/- TO THE INCOME OF THE ASS ESSEE AS UNEXPLAINED U/S 69A WHICH PERTAINED TO THIS ASSESSMENT YEAR. THE ASSESSING O FFICER, ACCORDINGLY DETERMINED THE TOTAL INCOME AT RS.11,43,160/-. IN APPEAL, THE LD. CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER. AGGRIEVED WITH SUCH ORDER OF TH E CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE ASSESSEE IN HIS GROUNDS OF APPEAL HAS CHALLE NGED THE VALIDITY OF THE REASSESSMENT PROCEEDINGS AS WELL AS THE ADDITION ON MERIT. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE SON OF THE ASSESSEE IS AN INCOME-TAX PAYEE SINCE LONG AND ADDITION, IF ANY, ON ACCOUNT OF SUCH CAPITATION FEE COULD HAVE BEEN MADE IN HIS HANDS AND NOT IN THE HANDS OF HIS FATHE R. HE SUBMITTED THAT SHRI SANDEEP JAIN QUALIFIED AND BECAME AN MBBS DOCTOR IN 1995 AS PER HIS STATEMENT RECORDED ITA NO.5504/DEL/2018 4 BEFORE THE ASSESSING OFFICER ON 16 TH MARCH, 2016. HIS WIFE ALSO IS A DOCTOR AND BOTH OF THEM HAD WORKED IN REPUTED HOSPITALS FOR THE LAS T 12 YEARS DRAWING GOOD SALARIES AND COULD HAVE EASILY PAID THE CAPITATION FEE. THE REFORE, THE ADDITION, IF ANY COULD HAVE BEEN MADE IN THEIR HANDS WHO ARE INCOME-TAX PA YEES. SO FAR AS THE VALIDITY OF REASSESSMENT PROCEEDINGS ARE CONCERNED, THE LD. COU NSEL FOR THE ASSESSEE SUBMITTED THAT WRONG REASONS WERE RECORDED BY THE ASSESSING O FFICER FOR REOPENING OF THE ASSESSMENT WHICH DO NOT CONSTITUTE VALID REASONS TO BELIEVE FOR INITIATING PROCEEDINGS U/S 148 OF THE ACT. FURTHER, THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND AND HAS MECHANICALLY REOPENED THE ASSESSMENT ON BORROWED SA TISFACTION OF THE INVESTIGATION WING. HE SUBMITTED THAT THE ASSESSING OFFICER HAS NOT GRANTED THE OPPORTUNITY TO CROSS-EXAMINE DR. P. MAHALINGAM. FURTHER, DR. MAHA LINGAM, NOWHERE HAS STATED THAT THE ASSESSEE HAD PAID CAPITATION FEE NOR ANY DOCUME NT FOUND MENTIONING ASSESSEES NAME. RELYING ON VARIOUS DECISIONS, HE SUBMITTED T HAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER ARE ILLEGAL AND VOID AB INITIO. 6. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND CIT(A). 7. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH THE SIDES AND PERUSED THE RELEVANT MATERIAL ON RECORD. I HAVE ALSO CONSIDERE D THE VARIOUS DECISIONS CITED BEFORE ME. I FIND THE SON OF THE ASSESSEE DR. SANDEEP JAI N WHO APPEARED BEFORE THE ASSESSING OFFICER HAD CATEGORICALLY STATED THAT WHATEVER AMOU NT HAS BEEN PAID TOWARDS ADMISSION AND DONATION/CAPITATION FEE HAS BEEN PAID BY HIM. HE AND HIS WIFE ARE ITA NO.5504/DEL/2018 5 DOCTORS SINCE 1996 AND HAVE SUFFICIENT SOURCE TO PA Y THIS AMOUNT. THEREFORE, WHEN SHRI SANDEEP JAIN ADMITTED BEFORE THE ASSESSING OFF ICER REGARDING THE PAYMENT OF SUCH CAPITATION FEE AND WHEN SHRI SANDEEP JAIN AND HIS WIFE ARE BOTH DOCTORS WHICH IS NOT IN DISPUTE, THEREFORE, IN MY CONSIDERED OPINION , ADDITION, IF ANY COULD HAVE BEEN MADE IN THE HANDS OF THE SON OF THE ASSESSEE I.E., SHRI SANDEEP JAIN AND NOT IN THE HANDS OF THE ASSESSEE. NO DOUBT SHRI P. MAHALINGAM IN HIS STATEMENT HAD ACCEPTED TO HAVE RECEIVED CAPITATION FEE AS UNACCOUNTED MONEY F ROM SHRI S.K. JAIN, F/O SHRI SANDEEP JAIN AND HAS SURRENDERED THE SAME FOR TAXAT ION AS MENTIONED BY THE ASSESSING OFFICER. HOWEVER, A PERUSAL OF THE STATEMENT RECOR DED OF SHRI MAHALINGAM, WHICH HAS BEEN REPRODUCED BY THE CIT(A) IN HIS ORDER, NOWHERE SHOWS HE HAS TAKEN THE NAME OF THE ASSESSEE. PAGE 21 OF THE ORDER OF THE CIT(A) S HOWS THE NAME OF THE STUDENTS/COURSE PURSUED AND THE STUDENTS FATHERS NAME AND ADDRESSES. NOWHERE IT CONCLUSIVELY SHOWS THAT THE CAPITATION FEE WAS PAID BY SHRI SUDARSHAN KUMAR JAIN, FATHER OF DR. SANDEEP JAIN. SINCE THE SON OF THE AS SESSEE DR. SANDEEP JAIN HAD APPEARED BEFORE THE ASSESSING OFFICER AND HAS STATE D THAT HE AND HIS WIFE ARE DOCTORS AND HAD ENOUGH SOURCE TO PAY THE ADMISSION AND DONA TION/CAPITATION FEES FOR HIS HIGHER STUDIES, THEREFORE, IN THE FACTS AND CIRCUMS TANCES OF THE CASE, I AM OF THE CONSIDERED OPINION THAT NO ADDITION IS CALLED FOR I N THE HANDS OF THE ASSESSEE. ADDITION, IF ANY, COULD HAVE BEEN MADE IN THE HANDS OF ONLY DR. SANDEEP JAIN. IN THIS VIEW OF THE MATTER, I SET ASIDE THE ORDER OF THE CI T(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION OF RS.10,01,000/- MADE U/S 6 9A OF THE IT ACT. SINCE THE ITA NO.5504/DEL/2018 6 ASSESSEE SUCCEEDS ON MERITS, THE LEGAL GROUNDS RAIS ED BY HIM CHALLENGING THE VALIDITY OF REASSESSMENT PROCEEDINGS IS NOT BEING ADJUDICATE D BEING ACADEMIC IN NATURE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 8.02.2019. SD/- ( R.K. PANDA) ACCOUNTANT MEMFBE R DATED: 28 TH FEBRUARY, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI