Income Tax Officer-I(2), Lucknow V. Kirti Kumar, Lucknow

ITA 57/LKW/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4809 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 31-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S C AGARWAL
• Keywords: Salary income; Earning of tax free income; Tangible material; Corroborative evidences; Reason to believe
• Section: 147; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.57/LKW/2014 ASSESSMENT YEAR:2009-10 INCOME TAX OFFICER 1(2) RANGE 1 LUCKNOW V. KIRTI KUMAR MD-1/163, LDA COLONY KANPUR ROAD, LUCKNOW TAN/PAN:ABZPK3196K (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. AMIT NIGAM, D.R. RESPONDENT BY: SHRI. S.C. AGARWAL, ADVOCATE DATE OF HEARING: 04 11 2015 DATE OF PRONOUNCEMENT: 13 01 2016 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS:- 1) THE LD CIT (A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN ANNULLING T HE ASSESSMENT ORDER MERELY ON THE GROUND THAT THE REASONS RECORDED BY THE AO FOR REOPENING THE ASSESSMENT ORDER U/S 148 ARE INSUFFICIENT, WITHOUT APPRECIATING THE FACT THAT FACTS OF THE CASE FOR ACTION U/S 147 WERE RECORDED BEFORE INITIATING THE PROCEEDINGS AND ALSO MENTIONED IN THE ASSESSMENT ORDER. 2) THE LD CIT (A) HAS ERRED IN IGNORING THE FACTS REGARDING AGRICULTURAL INCOME OF RS.44,20,394/- SHOWN BY THE ASSESSEE WERE TREATED AS INCOME FROM OTHER SOURCES AS THE ASSESSEE FAILED TO :- 2 -: SUBSTANTIATE THE SAME DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE HAS FILED ITS RETURN SHOWING INCOME AT RS.1,50,622/- WHICH INCLUDES INCOME FROM SALARY AT RS.1,84,800/-, INCOME FROM BUSINESS AT RS.9,679/- AND INCOME FROM OTHER SOURCES AT RS.16,000/-. THE ASSESSEE HAS ALSO CLAIMED EXEMPT INCOME OF RS.44,20,394/- FROM AGRICULTURE. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') AND THE ASSESSING OFFICER, ON THE BASIS OF THE FINDINGS OF ASSESSING OFFICER IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 AND FINDINGS IN THE ORDER PASSED BY THE LD. COMMISSIONER OF INCOME-TAX-II UNDER SECTION 263 OF THE ACT FOR ASSESSMENT YEARS 2006-07 AND 2007-08, HAS FORMED A VIEW THAT HUGE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE IN THE INCOME TAX RETURN YEAR-AFTER-YEAR IS NOT GENUINE AND AFTER RECORDING THE REASONS IN WRITING, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS EXAMINED ALL THE EVIDENCE FURNISHED BY THE ASSESSEE IN RESPECT OF AGRICULTURAL INCOME EARNED BY IT. FROM THE DETAILED EVIDENCE, THE ASSESSING OFFICER HAS NOTED THAT IN THE REVENUE RECORD CULTIVATION OF SAFED MUSLI AND ASHWAGANDHA WAS NOT SHOWN. MOREOVER, FROM THE REPORT OF TEHSILDAR, SADAR, LUCKNOW AND TEHSILDAR, MOHANLALGANJ, THE ASSESSING OFFICER HAS OBSERVED THAT THEY HAVE NOT ACTUALLY VISITED THE AGRICULTURAL LAND AND THEY HAVE FURNISHED THE REPORT WITH RESPECT TO THE BUSINESS ACTIVITIES IN AYURVEDIC PRODUCTS/MEDICINES/HERBS (INCLUDING SAFED MUSLI AND ASHWAGANDHA). HE HAS ALSO EXAMINED THE REPORT OF THE NODAL OFFICER, STATE MEDICAL PLANTATION BOARD, U.P. AND CAME TO THE :- 3 -: CONCLUSION THAT THE ASSESSEE WAS NOT DOING AGRICULTURAL ACTIVITIES AND HE ACCORDINGLY TREATED THE ENTIRE AGRICULTURAL INCOME AS INCOME FROM OTHER SOURCES. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT(A) BEING CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE, HAS HELD THE REOPENING TO BE VAGUE, AS IT WAS DONE WITHOUT ANY TANGIBLE MATERIAL WHEREFROM IT CAN BE ESTABLISHED THAT THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE LD. CIT(A) ACCORDINGLY ANNULLED THE ASSESSMENT. 5. AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL, WITH THE SUBMISSION THAT WHILE COMPLETING THE ORIGINAL ASSESSMENT, THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE FACTS OF THE CASE WITH REGARD TO THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE, AS THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT UNDER SECTION 148 OF THE ACT ON THE BASIS OF THE FINDINGS IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2008-09 AND FINDING OF THE LD. COMMISSIONER OF INCOME-TAX-II IN HIS ORDER PASSED UNDER SECTION 263 OF THE ACT FOR ASSESSMENT YEARS 2006-07 AND 2007-08. BESIDES, THE ASSESSING OFFICER HAS ALSO NOTED THAT THE ASSESSEE HAS DISCLOSED HUGE AGRICULTURAL INCOME IN HIS RETURN OF INCOME YEAR-AFTER-YEAR. THE LD. D.R. HAS FURTHER CONTENDED THAT BEFORE THE ASSESSING OFFICER ASSESSEE HAS NOT FILED ANY OBJECTION, THEREFORE, THE ASSESSING OFFICER WAS NOT UNDER ANY OBLIGATION TO DISPOSE OF ANY OBJECTION BEFORE COMPLETING THE ASSESSMENT. THUS, THE OBSERVATIONS OF THE LD. CIT(A) IN PARA 5.3 OF HIS ORDER IS TOTALLY INCORRECT AND HAS WRONGLY PLACED RELIANCE UPON THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. I.T.O & OTHERS, 125 TAXMAN 963. :- 4 -: 6. SO FAR AS THE ISSUE OF TANGIBLE MATERIAL IS CONCERNED, THE ASSESSING OFFICER HAS SUFFICIENT MATERIAL IN THE FORM OF FINDING OF THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2008-09 AND THE FINDINGS OF THE LD. COMMISSIONER OF INCOME-TAX-II VIDE HIS ORDER PASSED UNDER SECTION 263 OF THE ACT FOR ASSESSMENT YEARS 2006-07 AND 2007-08 AND ALSO HUGE CLAIM OF AGRICULTURAL INCOME WITHOUT ANY SUPPORTING EVIDENCE. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSING OFFICER WAS NOT HAVING ANY TANGIBLE MATERIAL TO FORM A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR REOPENING THE ASSESSMENT. THEREFORE, THE ORDER OF THE LD. CIT(A) DESERVES TO BE SET ASIDE. 7. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS SUBMITTED THAT EXCEPT THE ORDERS OF THE ASSESSING OFFICER AND THE LD. COMMISSIONER OF INCOME-TAX-II, THE ASSESSING OFFICER WAS NOT HAVING ANY TANGIBLE MATERIAL FOR REOPENING THE ASSESSMENT, THEREFORE, THE REOPENING IS BAD. IN SUPPORT OF HIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE UPON THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF NIVI TRADING LIMITED, MUMBAI VS. UNION OF INDIA IN WRIT PETITION NO.2314 OF 2015. 8. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT UNDISPUTEDLY THE RETURN WAS INITIALLY PROCESSED UNDER SECTION 143(1) OF THE ACT, THEREFORE, THERE WAS NO APPLICATION OF MIND OF THE ASSESSING OFFICER TO THE DISCLOSURE MADE BY THE ASSESSEE. LATER ON, THE ASSESSING OFFICER HAS TAKEN NOTE OF THE FINDING OF THE ASSESSING OFFICER IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 AND THE FINDINGS OF THE LD. COMMISSIONER OF INCOME-TAX-II VIDE HIS ORDER PASSED UNDER SECTION 263 OF THE ACT FOR ASSESSMENT YEARS 2006-07 AND 2007-08 AND ALSO HUGE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE AND FORMED A BELIEF, ON THE BASIS OF THESE EVIDENCES, THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED :- 5 -: ASSESSMENT. THE ASSESSING OFFICER HAS ALSO OBSERVED THAT THE MATERIAL AVAILABLE ON RECORD CLEARLY INDICATES THAT THE ASSESSEE YEAR-AFTER-YEAR HAS BEEN CLAIMING HUGE AGRICULTURAL INCOME, WITHOUT ANY SUPPORTING EVIDENCE. THEREFORE, THESE MATERIALS ARE SUFFICIENT TO FORM A BELIEF THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 9. WE HAVE ALSO CAREFULLY EXAMINED THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT REFERRED TO ABOVE IN THIS REGARD AND WE FIND THAT THE FACTS OF THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT ARE DISTINGUISHABLE FROM THE FACTS OF THE INSTANT CASE, THEREFORE, IT WOULD NOT RENDER MUCH HELP TO THE ASSESSEE. IT IS SETTLED POSITION OF LAW THAT UNDER SECTION 147 OF THE ACT, THE ASSESSING OFFICER HAS TO FORM A PRIMA- FACIE BELIEF, ON THE BASIS OF MATERIAL AVAILABLE ON RECORD, THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND REQUISITE ENQUIRIES IN THIS REGARD ARE TO BE MADE WHILE COMPLETING THE ASSESSMENT. BESIDES, THE ASSESSEE HAS ALSO CLAIMED HUGE AGRICULTURAL INCOME IN THE IMPUGNED ASSESSMENT YEAR WITHOUT ANY SUPPORTING EVIDENCE. THEREFORE, THESE EVIDENCES ARE TANGIBLE MATERIAL AVAILABLE BEFORE THE ASSESSING OFFICER TO FORM A BELIEF THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 10. THE LD. CIT(A) HAS ALSO PLACED RELIANCE UPON THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. I.T.O & OTHERS (SUPRA), BUT THIS JUDGMENT HAS NO RELEVANCE IN THE PRESENT CONTROVERSY OF THE CASE. IN THAT CASE, THE HON'BLE APEX COURT HAS HELD THAT WITHOUT DISPOSING OF THE THE OBJECTION FILED BY THE ASSESSEE AGAINST REOPENING OF THE ASSESSMENT, THE ASSESSING OFFICER SHOULD NOT PROCEED TO COMPLETE THE ASSESSMENT. BUT IN THE INSTANT CASE, NO OBJECTION WAS RAISED BY THE ASSESSEE. THEREFORE, THIS JUDGMENT HAS NO RELEVANCE TO THE PRESENT CONTROVERSY OF THE CASE. THE SOLE CONTROVERSY ARISEN BEFORE US IS WITH REGARD TO AN ISSUE AS TO :- 6 -: WHETHER ANY TANGIBLE MATERIAL WAS AVAILABLE WITH THE ASSESSING OFFICER FOR REOPENING THE ASSESSMENT. 11. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT THE ORDER OF THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2008-09 AND THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX-II PASSED UNDER SECTION 263 OF THE ACT FOR ASSESSMENT YEARS 2006-07 AND 2007-08 AND HUGE CLAIM OF AGRICULTURAL INCOME ARE TANGIBLE MATERIAL IN ORDER TO FORM A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. WE, THEREFORE, DO NOT FIND OURSELVES IN AGREEMENT WITH THE ORDER OF THE LD. CIT(A) AND ACCORDINGLY WE SET ASIDE THE SAME AND HOLD THAT THE REOPENING OF THE ASSESSMENT IS VALID. 12. SINCE THE LD. CIT(A) HAS NOT ADJUDICATED THE APPEAL ON MERIT, WE RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO ADJUDICATE THE APPEAL ON MERIT. ACCORDINGLY, THE APPEAL OF THE REVENUE STANDS ALLOWED. 13. IN THE RESULT, APPEAL OF THE REVENUE STANDS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:13 TH JANUARY, 2016 JJ:3012 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR