Satish Satyanarayan Dandnaik, Osmanabad V. Income-tax Officer,

ITA 568/PUN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1602 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 28-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Unexplained expenditure; Loose papers; Documents seized
• Section: 69C; 142(1); 133A; 148; 144

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 568 /PN/201 5 / ASSESSME NT YEAR : 20 0 6 - 07 SHRI SATISH SATYANARAYAN DANDNAIK, YASHWANT NAGAR, OSMANABAD 413501 . / APPELLANT PAN: A PKPD6786M VS. THE INCOME TAX OFFICER, WARD 3 ( 4 ), LATUR . / RESPONDENT / APPELLANT BY : SHRI SUHAS BORA / RESPONDENT BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 2 9 . 0 6 .201 6 / DATE OF PRONOUNCEMENT: 30 . 0 6 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 2 , AURANGABAD , DATED 24 . 0 2 .20 1 5 RELATING TO ASSESSMENT YEAR 20 0 6 - 07 AGAINST ORDER PASSED UNDER SECTION 14 4 R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL: - 1. THE LEARNED CIT(APPEAL), AURANGABAD; ERRED IN CONFIRMING THE EXPARTE ORDER PASSED U/S144 OF THE INCOME TAX ACT, 1961; IN SPITE OF WRITTEN REQUEST FILED BEFORE THE LEARNED ASSESSING OFFICER, AND TELEPHONIC ITA NO. 568 /PN/20 1 5 SHRI SATISH SATYANARAYAN DANDNAIK 2 REQUESTS MADE TO THEREBY HIM REFUSING TO G IVE PROPER OPPORTUNITY FOR FURNISHING DETAILS WHICH IS UNJUSTIFIED AND REQUIRES TO BE QUASHED. 2. THE LEARNED CIT(APPEAL), AURANGABAD; ERRED IN CONFIRMING THE ORDER OF LEARNED ASSESSING OFFICER ESTIMATING INCOME OF RS.7,92,350.00; FOR WHICH NO PROPER SHOW CAUSE NOTICE WAS ISSUED AND NO COGNATE MATERIAL WAS MADE AVAILABLE TO THE ASSESSEE. THE LEARNED CIT(APPEALS) AURANGABAD; ALSO ISSUED THE REMAND REPORT DATED 19/03/2014 ISSUED BY THE INCOME TAX OFFICER, WARD 3(4), LATUR. THEREBY, ORDER MAKING ADDITION IS UNJUST AND REQUIRES TO BE QUASHED. 3. THE ASSESSEE IS AGGRIEVED BY THE EXPARTE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 144 OF THE ACT AND FURTHER BY THE ORDER OF CIT(A) IN CONFIRMING THE SAME. 4. THE PRELIMINARY ISSUE RAISED IN THE PRESENT A PPEAL BY THE ASSESSEE IS AGAINST THE SAID EXPARTE ORDER PASSED UNDER SECTION 144 OF THE ACT AND FURTHER ESTIMATION OF INCOME AT RS. 7,92,350/ - 5. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STRESSED THAT NO OPPORTUNITY WAS GIVEN BY THE ASSESSING OFFICER BEFORE PASSING THE ASSESSMENT ORDER . HE FURTHER POINTED OUT THAT THE ASSESSEE WAS NOT EVEN CONFRONTED WITH SHOW CAUSE NOTICE TO EXPLAIN THE IMPOUNDED DIARIES / DOCUMENTS. ATTENTION WAS DRAWN TO THE LIST OF DOCUMENTS WHICH WERE PREPARED DURING TH E COURSE OF SURVEY UNDER SECTION 133A OF THE ACT CONDUCTED AT THE PREMISES OF ASSESSEE ON 19.03.2010 , COPY OF WHICH IS PLACED AT PAGE 9 OF PAPER BOOK. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE PERUSAL OF SAID LIST WOULD R EFLECT THAT NO BOOKS OF ACCOUNT / DOCUMENTS / LOOSE PAPERS WERE FOUND FOR THE RELEVANT FINANCIAL YEAR. HE FURTHER STATED THAT, BEFORE THE CIT(A) , ELABORATE SUBMISSIONS WERE MADE BY THE ASSESSEE, COPY OF WHICH ARE PLACED AT PAGES 10 TO 13 OF PAPER BOOK AND THE REMAND REPORT WAS OBTAINED FROM THE ASSESSING OFFICER, COPY OF WHICH IS PLACED AT PAGE 14 OF THE PAPER BOOK. IN THE REMAND REPORT, THE ASSESSING OFFICER HAS CLEARLY REPORTED THAT WHILE ESTIMATING THE INCOME AT RS. 7,92,350/ - , ITA NO. 568 /PN/20 1 5 SHRI SATISH SATYANARAYAN DANDNAIK 3 THE ASSESSING OFFICER HAS NOT QUOTED ANY FINDINGS FOR ARRIVING AT THE INCOME AND ALSO NO OPPORTUNITY FOR ESTIMATION OF INCOME WAS GIVEN. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS AGGRIEVED BY THE ORDER OF CIT(A) IN NOT EVEN REFERRING TO HIS WRITTEN SUBMISSIONS AN D REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER AND SUMMARILY UPHOLDING THE ADDITION MADE BY THE ASSESSING OFFICER. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HOWEVER, POINTED OUT THAT WHERE THE ASSESSEE HAS FAILED TO CO - OPERATE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THERE WAS NO ALTERNATIVE BUT TO COMPLETE THE ASSESSMENT EXPARTE. 7. ON PERUSAL OF RECORD AND THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER, IT IS APPARENT THAT SURVEY UNDER SECTION 133A OF THE ACT WAS CONDUCTED ON 19.03.2010 AT THE PREMISES OF THE ASSESSEE . THE ASSESSING CONDUCTED ON 19.03.2010 AT THE PREMISES OF THE ASSESSEE . THE ASSESSING OFFICER NOTES THAT DURING THE COURSE OF SURVEY, THE ASSESSEE WAS FOUND TO HAVE NOT MAINTAINED REGULAR BOOKS OF ACCOUNT BUT CERTAIN DIARIES / DOCUMENTS AND LOOSE PAPERS WERE FOUND AND IMPOUNDED. THE ASSESSING OFFICER FURTHER ON VERIFICATION NOTED THAT THE ASSESSEE HAD INCURRED SUM OF RS. 7,92,348/ - F OR CONSTRUCTION OF HOTEL . THE CASE OF THE ASSESSEE WAS REOPENED UNDER SECTION 147 / 148 OF THE ACT AND NOTICE WAS ISSUED TO THE ASSESSEE. THE LEARN ED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ASKED FOR ADJOURNMENT AND DUE TO CHANGE IN JURISDICTION OF THE ASSESSING OFFICER, FURTHER NOTICE UNDER SECTION 129 AND 143(2) OF THE ACT ON 26.09.2011 WAS ISSUED TO THE ASSESSEE FOR COMPLIANCE ON 10.10.2011. T HE ASSESSING OFFICER VIDE PARA MENTIONED THAT DUE TO NON - COMPLIANCE ON ASSESSEES SIDE, FRESH NOTICE UNDER SECTION 142(1) OF THE ACT, DATED 29.09.2011 WAS ISSUED FOR FILING THE RETURN OF INCOME ALONG WITH SHOW CAUSE NOTICE FOR NON - COMPLIANCE TO NOTICE DATE D 26.09.2011. THE ITA NO. 568 /PN/20 1 5 SHRI SATISH SATYANARAYAN DANDNAIK 4 COMPLIANCE TO THAT NOTICE WAS TO BE MADE ON OR BEFORE 21.10.2011. HOWEVER, ANOTHER NOTICE WAS ISSUED UNDER SECTION 142(1) OF THE ACT, DATED 11.10.2011 AND IN COMPLIANCE THERETO, ADJOURNMENT WAS REQUESTED BY THE COUNSEL OF THE ASSESSEE. THE ASSESSING OFFICER NOTES THAT EVERY TIME, THE ASSESSEE WAS APPLYING FOR ADJOURNMENT BUT WAS NOT COMPLYING WITH THE NOTICES ISSUED. HENCE, AN EXPARTE ORDER WAS PASSED UNDER SECTION 144 OF THE ACT AND THE INCOME WAS COMPUTED ON THE BASIS OF IMPOUNDED DI ARIES / DOCUMENTS AT RS. 7,92,348/ - . THE SAID AMOUNT WAS TREATED AS UNEXPLAINED EXPENDITURE UNDER SECTION 69C OF THE ACT. 8. BEFORE THE CIT(A), THE ASSESSEE MADE SUBMISSIONS WHICH WERE FORWARDED TO THE ASSESSING OFFICER, WHO IN TURN, SUBMITTED REMAND RE PORT, COPY OF WHICH IS PLACED AT PAGES 10 TO 14 OF THE PAPER BOOK. HOWEVER, THE PERUSAL OF ORDER OF CIT(A) REFLECTS THAT NO COGNIZANCE OF THE EXPLANATION FILED BY THE ASSESSEE AND EVEN THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER HAS ASSESSEE AND EVEN THE REMAND REPORT SUBMITTED BY THE ASSESSING OFFICER HAS BEEN TAKEN. THE ASSESSING OFFICER CLEARLY STATED IN THE REMAND REPORT THAT THERE IS NO FINDING FOR ARRIVING AT THE INCOME OF RS. 7,92,350/ - AND FURTHER NO OPPORTUNITY WAS GIVEN FOR ESTIMATION OF INCOME TO THE ASSESSEE. FURTHER, THE PERUSAL OF LIST OF INVENTORY PREPARE D AT THE TIME OF SURVEY, COPY OF WHICH IS PLACED AT PAGE 9 OF THE PAPER BOOK REFLECTS THAT DOCUMENTS / BOOKS OF ACCOUNT / LOOSE PAPERS WHICH WERE IMPOUNDED RELATE TO THE PERIOD OTHER THAN THE FINANCIAL YEAR 2005 - 06. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, THE CLAIM OF ASSESSEE MERITS TO BE LOOKED INTO. IN THE FIRST INSTANCE, THOUGH REASONS WERE RECORDED FOR REOPENING, BUT THE ASSESSEE IS TO BE CONFRONTED WITH THE DOCUMENTS FOUND DURING THE COURSE OF SURVEY, WHICH RELATE TO THE INSTANT A SSESSMENT YEAR. THE ESTIMATION OF EXPENSES IS ALLEGEDLY MADE ON THE BASIS OF DOCUMENTS SEIZED DURING THE COURSE OF SURVEY. HOWEVER, THE PERUSAL OF LIST OF INVENTORY DOES NOT REFLECT ANY DOCUMENT BEING FOUND RELATABLE TO THE INSTANT ITA NO. 568 /PN/20 1 5 SHRI SATISH SATYANARAYAN DANDNAIK 5 ASSESSMENT YEAR. IN T HE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES, I DEEM IT FIT TO RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER, WHO SHALL CONSIDER THE CLAIM OF ASSESSEE IN TOTALITY AND AFTER SHOW CAUSING THE ASSESSEE, THE NECESSARY EVID ENCE RELATING TO T HE INVESTMENT. THE ASSESSEE IS ALSO DIRECTED TO CO - OPERATE AND APPEAR BEFORE THE ASSESSING OFFICER AND WITHIN REASONABLE TIME FURNISH THE NECESSARY EXPLANATIONS. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED FOR STATISTICAL PURPOSES. 9 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 30 TH DAY OF JUNE , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 30 TH JUNE , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPO NDENT; 3. ( ) / THE CIT(A) - 2 , AURANGABAD ; 4. / THE CIT - 2, AURANGABAD ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE