DCIT, New Delhi V. M/s. S.V. Liquor India Ltd, New Delhi

ITA 553/DEL/2009

• Counselvise Citation: 55320114 RSA 2009
• Duration Of Justice: 6 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 08-09-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 13-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAKESH GUPTA SHRI TARUN KUMAR
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUD ICIAL MEMBER ITA NO: 553/DEL/2009 AY : - 2005-06 DCIT VS. M/S. S.V. LIQUO R INDIA LTD. CIRCLE 7(1) J-15, VIKAS PU RI, ROOM NO. 312, NEW DELHI. C.R. BUILDING, NEW DELHI. (PAN AAACS1989B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUJIT KUMAR, SR. DR RESPONDENT BY : SHRI RAKESH GUPTA, ADVOCATE SHRI TARUN KUMAR, ADVOCATE DATE OF HEARING : 8.9.2015 DATE OF PRONOUNCEMENT : .10.2015 O R D E R PER SUDHANSHU SRIVASTAVA JUDICIAL MEMBER THIS IS THE DEPARTMENTS APPEAL FILED AGAINST THE O RDER DATED 15.1.2008 PASSED BY THE LD. CIT(A) XXIV, NEW DELHI. THE GRO UND OF APPEAL READS AS UNDER :- 1. LD. CIT(A) HAS ERRED IN FACTS AND CIRCUMSTANCES O F THE CASE IN ANNULLING THE ASSESSMENT COMPLETED BY THE AO I.E. DAO-43 MAKI NG ADDITION OF RS. 1,98,27,780/- ON ACCOUNT OF UNEXPLAINED INCOME WITH OUT APPRECIATING THE FACT THAT THE JURISDICTION TO THE DAO WAS ASSIGNED BY THE CCIT-1, NEW DELHI AND THEREFORE HAS HOLDS VALID JURISDICTION OV ER THE CASE. 2 . THE FACTS OF THE CASE ARE THAT THE AO (DAO 4 3) HAD RECEIVED INFORMATION FROM CIT (CIB), NEW DELHI VIDE REFERENCE NO. CIT (C IB)/DELHI/GSL5340 FOR A ITA NO.553/DEL/2009 DCIT VS. M/S. S.V. LIQUOR INDIA LTD. 2 TRANSACTION OF RS. 1,97,27,780/-. THE AO ISSUED NOT ICES U/S 142(1) BUT ACCORDING TO THE AO NONE ATTENDED NOR ANY ADJOURNMENT WAS SOUGHT . THE AO COMPLETED THE ASSESSMENT U/S 144 OF THE ACT TREATING THE TRANSACT ION OF RS. 1,97,27,780/- AS UNEXPLAINED INCOME. 3. BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WITH THE OF FICE OF ACIT, CIRCLE-7(1), NEW DELHI VIDE ACKNOWLEDGMENT NO. 0700000782 DATED 31 ST OCTOBER 2005 AT A TOTAL INCOME OF RS. 47,88,910/-. ASSESSEE ALSO DEMONSTRAT ED BEFORE THE LD. CIT(A) THAT HE HAD COMPLIED WITH THE NOTICES ISSUED BY THE AO ( DAO-43) WHICH WERE NOT CONSIDERED BY THE AO. IT WAS ALSO SUBMITTED THAT TH E AO HAD NO JURISDICTION ON THE CASE OF THE ASSESSEE BUT HE COMPLETED THE ASSESSMEN T ON THE BASIS OF THE REPORT RECEIVED FROM THE OFFICE OF THE CIT (CIB), NEW DELH I. THEREAFTER THE LD. CIT(A) WHILE ALLOWING THE APPEAL OF THE ASSESSEE GAVE A CATEGORI CAL FINDING THAT THE ASSESSEE HAD FILED RETURN FOR THE YEAR UNDER CONSIDERATION IN T HE NORMAL COURSE WITH ACIT CIRCLE 7(1) NEW DELHI AND THE ORDER PASSED BY THE AO WARD 25(4) (DAO-43), NEW DELHI PASSED U/S 144 OF THE ACT ON 22.12.2007 WAS PASSED WITHOUT MAKING ANY INQUIRES OR ASCERTAINING THE FACTS OF THE INCOME OF THE ASSE SSEE DESPITE HAVING BEEN IN RECEIPT OF A REPLY ACCOMPANIED WITH AMPLE CLARIFICA TION AND EVIDENCE REGARDING THE TRANSACTION IN QUESTION, BUT SOLELY ON THE BASIS O F AN AIR INFORMATION RECEIVED BY HIM WITH REGARD TO CERTAIN INVESTMENTS IN PURCHASE OF PROPERTY. THE LD. CIT(A) FURTHER OBSERVED THAT EVEN IF THE INFORMATION OF TH E TRANSACTION HAD COME INTO THE POSSESSION OF DAO-43 THE SAME SHOULD HAVE BEEN LINK ED TO THE RETURN OF INCOME FILED BY THE ASSESSEE. THE LD. CIT(A) WAS ALSO OF T HE VIEW THAT SUFFICIENT TIME WAS ITA NO.553/DEL/2009 DCIT VS. M/S. S.V. LIQUOR INDIA LTD. 3 AVAILABLE WITH DAO, NEW DELHI TO ASCERTAIN THE FACT S AND TAKE APPROPRIATE ACTION UNDER THE ACT RATHER THAN MAKING AN ASSESSMENT OF T HE ENTIRE AMOUNT REPORTED IN AIR INFORMATION. 4. IN THE PRESENT APPEAL BEFORE US, THE LD. D EPARTMENTAL REPRESENTATIVE STRONGLY URGED THAT THE JURISDICTION TO THE DAO WAS ASSIGNED BY THE CIT(CIB), NEW DELHI AND THAT HE HELD THE VALID JURISDICTION OVER THE CASE AND AS SUCH THE ORDER PASSED BY THE AO DID NOT LACK JURISDICTION AND THAT IT SHOULD BE UPHELD. 5. THE LD. AR ON THE OTHER HAND STRONGLY SUP PORTED THE ORDER OF LD. CIT(A) AND SUBMITTED THAT IN VIEW OF THE FINDINGS RECORDED BY LD. CIT(A) THE ASSESSEE DESERVES TO SUCCEED. HE DREW OUR ATTENTION TO PAGES 8 TO 121 OF THE PAPER BOOK WHICH ARE COPIES OF VARIOUS DOCUMENTS FILED BEFORE INCOME TAX OFFICER WARD 25(4) (DAO-43) IN RESPONSE TO NOTICE U/S 142(1) DATED 29.11.2007. THE LD. AR SUBMITTED THAT THE ASSESSEE HAD DULY FURNISHED THE INFORMATION SOUGHT BY THE AO IN HIS NOTICE WHICH WAS NOT CONSIDERED AT ALL AND AN EX PARTE ORDER WAS PASSED. LD. AR FURTHER SUBMITTED THAT THE ORDER PASSED BY THE AO SUFFERED FROM AN INHERENT LACK OF JURISDICTION AND THEREFORE IT WAS RIGHTLY QUASHED B Y THE LD.CIT(A).LD. AR ALSO PLACED RELIANCE ON THE DECISION OF ITAT, MUMBAI C BENCH IN ITA NO. 788/MUM/2009 IN THE CASE OF PRAVIN BALUBHAI ZALA VS. ITO REPORTED IN 1 29 TTJ 0373. 6. ON GOING THROUGH THE CASE RECORDS AND AFTE R CONSIDERING THE FACTS OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE CON TENTION OF THE AR THAT THE AO ERRED IN TREATING THE PROPERTY PURCHASE TRANSACTION OF RS. 1,97,27,780/- AS INCOME IN THE HANDS OF THE ASSESSEE IS CORRECT. THE AO DESPIT E HAVING NO JURISDICTION ON THE CASE OF THE ASSESSEE COMPLETED THE ASSESSMENT ON TH E BASIS OF REPORT RECEIVED FROM ITA NO.553/DEL/2009 DCIT VS. M/S. S.V. LIQUOR INDIA LTD. 4 THE OFFICE OF CIT(CIB), NEW DELHI. IN PRINCIPLE ON LY ONE AO CAN HOLD JURISDICTION OVER A CASE AT ONE POINT OF TIME FOR A PARTICULAR ASSESS MENT YEAR. SINCE THE ASSESSEE HAD FILED ITS RETURN FOR THE YEAR IN THE NORMAL CASE WI TH ACIT CIRCLE 7(1), NEW DELHI AND HAD DULY DECLARED THE TRANSACTION IN QUESTION WITH REGARD TO THE PURCHASE OF LAND, THE JURISDICTION WAS VESTED WITH ACIT CIRCLE 7(1) B Y VIRTUE OF FILING OF RETURN OF INCOME. THE ASSUMPTION OF JURISDICTION BY AO WARD 2 5(4) AND SUBSEQUENT PASSING OF ORDER U/S 144 WITHOUT MAKING ANY INQUIRIES OR ASCER TAINING THE FACTS OF THE CASE DESPITE HAVING BEEN IN RECEIPT OF A REPLY ACCOMPANI ED WITH AMPLE CLARIFICATION AND EVIDENCE REGARDING THE TRANSACTION IN QUESTION, BUT SOLELY ON THE BASIS OF AIR INFORMATION SUFFERS FROM AN INHERENT LACK OF JURISD ICTION AND IS VOID AB INITIO . THE HONBLE APEX COURT IN THE CASE OF RAZA TEXTILES LTD . VS. ITO 87 ITR 539 (SC) HAS HELD THAT NO AUTHORITY, MUCH LESS A QUASI JUDICIAL AUTHORI TY CAN CONFER JURISDICTION ON ITSELF BY DECIDING A JURISDICTIONAL FACT WRONGL Y. IT WAS FURTHER HELD THAT IT IS INCOMPREHENSIBLE TO THINK THAT A QUASI JUDICIAL AUT HORITY LIKE THE ITO CAN ERRONEOUSLY DECIDE A JURISDICTIONAL FACT AND THEREAFTER PROCEED TO IMPOSE A LEVY ON A CITIZEN. 7. RESPECTFULLY FOLLOWING THE HONBLE APEX COURT I N THE CASE OF RAZA TEXTILES (SUPRA) WE HOLD THAT DAO - 43 HAD NO JURISDICTION T O FRAME THE ASSESSMENT OF THE ASSESSEE AND THE ASSESSMENT ORDER PASSED BY THE DAO - 43 IS WITHOUT JURISDICTION AND WE ACCORDINGLY CANCEL THE ASSESSMENT ORDER PASS ED BY THE DAO 43 WHILE UPHOLDING THE ORDER OF THE LD. CIT (A). ITA NO.553/DEL/2009 DCIT VS. M/S. S.V. LIQUOR INDIA LTD. 5 8. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH OCTOBER, 2015. SD/- SD/- (J. SUDHAKAR REDDY) (SUDHANSHU SRIVASTA VA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 13. 10. 2015 VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER DY. REGISTRAR SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 08.10.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 08.10. 2015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER