Jitendra Bharti, Meerut V. ITO, Ward-1(3), Meerut

ITA 5755/DEL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5374 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 06-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BIHAGRA
• Assessee Lawyers: V K GOEL
• Keywords: Unexplained investment; Residential status; Tangible material; Difference of opinion; Reason to believe; Change of opinion
• Section: 54B; 147; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (MEERUT CAMP, MEERUT) BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.5755/DEL./2018 (ASSESSMENT YEAR : 2009-10) JITENDRA BHARTI VS. ITO, C/O. VINOD KUMAR GOEL, 282-BOUNDRY ROAD, WARD-1(3) CIVIL LINES, MEERUT MEERUT, UTTAR PRADESH (PAN : AIPPB9134R APPELLANT RESPONDENT ASSESSEE BY : SH. V.K GOEL, ADV. REVENUE BY : SHRI M.R.BIHAGRA, SR.DR DATE OF HEARING : 10.01.2019 DATE OF ORDER : 29.01.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT JITENDRA BHARTI, MEERUT (HERE INAFTER REFERRED TO AS 'THE ASSESSEE') BY FILING THE AFORESAID APPEAL, SOUGHT T O SET ASIDE THE IMPUGNED ORDER DATED 03/08/2018 PASSED BY LD. COMMISSIONER OF INCOME TAX(APPEALS)-MEERUT QUA THE ASSESSMENT YEAR 2009-1 0 ON THE GROUNDS INTER ALIA THAT : 1. THAT THE ASSESSMENT MADE BY THE A.O. U/S 147/1 44 OF I.T.ACT IS BAD IN LAW BECAUSE IN THIS CASE, THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 147/143(3) OF I.T.ACT. THEREFORE, THE A.O. CANNOT REOPEN THE ASSESSMENT AF TER FOUR YEARS. THE A.O. HIMSELF ATTACHED THE COPY OF I.T.O. ORDER U/S 147/143(3) ON PAGE NO. 16 OF THE ASSESSMENT ORD ER. THE ITA NO.5755/DEL./2018 2 CIT(A) CONFIRMED THE ORDER WITHOUT GOING TO THE FAC TS AND MERIT OF THE CASE. 2. THAT WITHOUT PREJUDICE TO THE GROUND N. 1, THE A .O. HAS COMPLETED THE ASSESSMENT U/S 144 OF I.T.ACT, HO WEVR, HE HIMSELF ADMITTED THAT THE ASSESSEE THROUGH HIS COUN SEL REPRESENT AND FILED HIS REPLY SEVERAL TIME. THEREFO RE, THE ASSESSMENT MADE BY THE A.O. IS BAD IN LAW. THE A.O. ALSO NOT ISSUED NOTICE U/S 143(2) OF I.T.ACT. 3. THAT WITHOUT PREJUDICE GO THE GROUND NO. 1 AND 2 , THE A.O. HAS NOT ALLOWED EXEMPTION U/S 54B OF I.T.ACT, 1961. 4. THAT THE ADDITION MADE BY THE A.O. FOR RS. 48,7 3,000/- ON ACCOUNT OF INVESTMENT IN PURCHASE OF AGRICULTURE LAND WITHOUT ANY BASIS. 5. THAT THE ASSESSEE HAS RIGHT TO ADD, MODIFY OR D ELETE ANY GROUND DURING THE APPEAL PROCEEDING. 2. BRIEFLY STATED THAT FACTS NECESSARY FOR ADJUDI CATION OF THE CONTROVERSY AT HAND ARE : ASSESSEE IS AN AGRICULTURIST WHO HAS SOLD HIS AGRICULTURAL LAND FOR A SUM OF RS. 67,76,000/-. ORIGINALLY ASSES SMENT OF THE ASSESSEE FOR THE YEAR UNDER ASSESSMENT WAS COMPLETED U/S 147 /143(3) VIDE ORDER DATED 15.03.2013.THE ASSESSING OFFICER FRAMED THE A SSESSMENT U/S 144/147 OF THE ACT AT RS. 49,61,075/- + 64,68,925/- AS CAPITAL GAIN AND AGRICULTURAL INCOME OF RS. 5,85,000/-. 3. ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) BY W AY OF FILING THE APPEAL WHO HAS CONFIRMED THE ADDITION BY DISMISSING THE APPEAL. FEELING AGGRIEVED THE ASSESSEE HAS COME UP BEFORE THE TRIBU NAL BY WAY OF FILING THE PRESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF THE F ACTS AND CIRCUMSTANCES OF ITA NO.5755/DEL./2018 3 THE CASE. 5. UNDISPUTEDLY, ORIGINAL ASSESSMENT WAS FRAMED BY THE ASSESSING OFFICER FOR AY 2008-09 VIDE ORDER DATED 15.03.2013 WHICH IS EXTRACTED FOR READY PERUSAL AS UNDER :- INCOME TAX DEPARTMENT 1. NAME & ADDRESS OF ASSESSEE SHRI JITENDER BHARTI S/ O. SH. RAM CHARAN 927-MALYANA PO SABUNGODWN, MEERUT 2. PAN NO. AIPPB9134R 3. DISTT. AWARD/CIRCLE WARD-1(3), MEERUT 4. STATUS INDIVIDUAL 5. ASSESSMENT YEAR 2009-10 6. RESIDENTIAL STATUS RESIDENT 7. METHOD OF ACCOUNTING 8. PREVIOUS YEAR 2008-9 9. DATE OF HEARING AS PER RECORDS 10. SECTION AND SUB-SECTION UNDER U/S. 147/143(3) OF I.T.ACT,1961. WHICH THIS ORDER IS BEING PASSED ASSESSMENT ORDER THE ANNUAL INFORMATION RETURN FOR F.Y. 2008-09 (NON -PAN) REVEALED FOLLOWING TRANSACTIONS (I) SALE OF PROPERTY ON 15/09/2008 FOR RS. 4630773/- (II) PURCHASE OF PROPERTY ON 18/07/2008 FOR RS. 4554000/ - SINCE, THE VERIFICATION LETTERS DATED 16/09/2010 WE RE NOT COMPLIED WITH THE AO ISSUED NOTICE U/S 148 DATED 27/07/2011 FOR UNEXPLAINED INVESTMENT FOR PURCHASE OF PROPERTY FOR RS. 4554000 /- AND ANOTHER NOTICE U/S 148 DATED 28/07/2011 TO TAX THE PROFIT O N SALE OF PROPERTY ON 15/09/2008 FOR RS. 4630773/-. THE AO HAS RECORDE D SEPARATE REASONS FOR THE TWO TRANSACTIONS. 2. THE OTHER FACT IS THAT, THE RETURN WAS NOT ADMI TTEDLY FILED U/S 139(1) ITA NO.5755/DEL./2018 4 OR 139(4) IN RESPONSE TO NOTICE U/S 148 DESPITE NOT ICES DATED 03/09/2012, 15/10/2012 AND 28/02/2013 RETURN HAS NOT BEEN FILED . IN THE REPLY DATED NIL THE ASSESSEE HAS MADE SUBMISSIONS RELATING TO P URCHASE OF LAND. NO REPLY IS FILED RELATING TO SALE OF LAND. SINCE THE EVIDENCE OF SERVICE OF NOTICE U/S 148 IS NOT AVAILABLE ON RECORD RELATING TO SALE OF LAND ASSESSMENT IF MADE MAY NOT STAND THE TEST APPEAL. 3. IN VIEW OF THE ABOVE FACTS THE PROCEEDINGS U/S 1 47 VIDE NOTICE DATED 27/07/2011 & 28/07/2011 ARE DROPPED WITH THE REMARK S PROCEEDINGS U/S 147 MAY BE RESTARTED BY ISSUE OF A VALID NOTICE AFT ER GATHERING FULL INFORMATION AND RECORDING PROPER REASONS. SD/- (U.S.CHAUHAN) INCOME TAX OFFICER WARD-1(3), MEERUT 6. IT IS ALSO NOT IN DISPUTE THAT AFTER FRAMING THE ORIGINAL ASSESSMENT U/S 147/143(3) OF THE ACT VIDE ORDER DATED 15.03.2013. ASSESSING OFFICER AGAIN ISSUED NOTICE DATED 14.03.2016 AND ON FAILURE OF THE ASSESSEE TO PUT IN APPEARANCE ASSESSING OFFICER PROCEEDED TO FRAME THE ASSESSMENT U/S 144/147 OF THE ACT. 7. LD. AR FOR THE ASSESSEE CHALLENGING THE IMPUGNED ORDER CONTENDED THAT REOPENING OF THE ASSESSMENT U/S 147 AFTER COMP LETION OF THE ASSESSMENT U/S 147/143(3) OF THE ACT IS NOTHING BUT A CHANGE OF OPINION WHICH IS NOT PERMISSIBLE UNDER LAW AND RELIED UPON DECISION RENDERED BY HONBLE SUPREME COURT IN CASE OF COMMISSIONER OF INCOME TAX, DELHI VS. KELVINATOR OF INDIA LTD. 320 ITR 561 (SC) AND DECISION RENDERED BY HONBLE HIGH COURT OF BOMBAY IN CASE CITED AS ITA NO. 102 OF 2016 THE PR. CIT-1 VS. M/S. INARCO LIMITED. ITA NO.5755/DEL./2018 5 8. BARE PERUSAL OF THE ASSESSMENT ORDER DATED 15.12 .2016 SHOWS THAT THE ASSESSING OFFICER HAS ANNEXED ORIGINAL ASSESSME NT ORDER DATED 15.03.2013, EXTRACTED IN THE PRECEDING PARA, WHICH SHOWS THAT ORIGINAL ASSESSMENT DATED 15.03.2013 WAS COMPLETED U/S 147/1 43(3) BY INCORPORATING THE FACT THAT THE PROCEEDING U/S 147 INITIATED VIDE NOTICE DATED 27.07.2011 AND 28.07.2011 ARE DROPPED WITH TH E REMARKS PROCEEDING U/S 147 MAY BE RESTARTED BY WAY OF ISSUA NCE OF A FRESH VALID NOTICE AFTER COLLECTING FULL INFORMATION AND RECORD ING PROPER REASONS. 9. IT APPEARS THAT THE ASSESSING OFFICER HAS BEEN I NITIATING AND DROPPING THE PROCEEDING U/S 147 AT HIS OWN WHIMS A ND FANCIES AND NOT IN ACCORDANCE WITH LAW. NEITHER THE ORIGINAL ASSESSMEN T ORDER DATED 15.03.2013 CONTAINS THE REASONS FOR REOPENING THE A SSESSMENT NOR SUBSEQUENT ASSESSMENT ORDER DATED 15.12.2016 FRAMED U/S 144/147 CONTAINS THE REASONS FOR REOPENING THE ASSESSMENT. EVEN LD. CIT(A) HAS NOT MADE A BARE REFERENCE OF REASONS, IF ANY, REC ORDED BY THE AO FOR REOPENING THE ASSESSMENT. EVEN THE ASSESSMENT ORDER DATED 15.03.2013 ITSELF CONTAINS THE FACT THAT THE SAID ASSESSMENT W AS REOPENED ON THE BASIS OF IMPROPER REASONS BECAUSE IT IS MENTIONED THA T PROCEEDING U/S 147 MAY BE RESTARTED BY ISSUANCE OF VALID NOTICE AFTER RECORDING PROPER REASONS. 10. HONBLE SUPREME COURT IN KALVINATOR OF INDIA LT D. (SUPRA) HAS HELD ITA NO.5755/DEL./2018 6 THAT THE ASSESSING OFFICER HAS NO POWER TO REVIEW H IS OWN ORDER BY RETURNING FOLLOWING FINDING :- PRIOR TO THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987 , REOPENING COULD BE DONE UNDER TWO CONDITIONS, VIZ., IF (A) THE ITO HAD REASON TO BELIEVE THAT, BY REASON OF THE OM ISSION OR FAILURE ON THE PART OF AN ASSESSEE TO MAKE A RETURN UNDER SECTION 139 FOR ANY ASSESSMENT YEAR TO THE ITO OR T O DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT FOR THAT YEAR, INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT FOR THAT YEAR, OR (B) THE ITO HA D IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR. THE FULFILLMENT OF THE SAID CONDITIONS ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BACK ASSESSMENT, BUT IN SECTION 1 47 WITH EFFECT FROM 1.4.1989 THOSE CONDITIONS ARE GIVEN A G O-BY AND ONLY OEN CONDITION HAS REMAINED, VIZ., WHERE THE AS SESSING OFFICER HAS REASON TO BELIEVE THAT INCOME HAS ESCA PED ASSESSMENT, THE SECTION CONFERS JURISDICTION TO REO PEN THE ASSESSMENT. THEREFORE, POST 1.4.1989, POWER TO RE-O PEN IS MUCH WIDER. HOWEVER, ONE NEEDS TO GIVE A SCHEMATIC INTERPRETATION TO THE WORDS REASON TO BELIEVE, FA ILING WHICH SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSE SSING OFFICER TO REOPEN ASSESSMENTS ON THE BASIS OF MERE CHANGE OF OPINION, WHICH CANNOT BE PER SE REASON TO REOPE N. ONE MUST ALSO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BE TWEEN POWER TO REVIEW AND POWER TO REASSESS. THE ASSESSIN G ITA NO.5755/DEL./2018 7 OFFICER HAS NO POWER TO REVIEW; HE HAS THE POWER TO REASSESS, BUT THE REASSESSMENT HAS TO BE BASED ON F ULFILLMENT OF CERTAIN PRE-CONDITIONS AND IF THE CONCEPT OF CH ANGE OF OPINION IS REMOVED AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN IN THE GARB OF REOPENING THE ASSES SMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF CHANGE OF OPINION AS AN INBUILT TEST TO CHECK ABU SE OF POWER BY THE ASSESSING OFFICER. HENCE, AFTER 1.4.19 89, THE ASSESSING OFFICER HAS POWER TO REOPEN, PROVIDED THE RE ISTANGIBLE MATERIAL TO COM TO CONCLUSION THAT THE RE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. UNDER THE DIR ECT TAX LAWS (AMENDMENT) ACT, 1987, THE PARLIAMENT NOT ONLY DELETED THE WORDS REASON TO BELIEVE BUT ALSO INSE RTED THE WORD OPINION IN SECTION 147. HOWEVER, ON RECEIPT OF REPRESENTATIONS FROM THE COMPANIES AGAINST OMISSION OF THE WORDS REASON TO BELIEVE, THE PARLIAMENT RE-INTROD UCED THE SAID EXPRESSION AND DELETED THE WORD OPINION ON T HE GROUND THAT IT WOULD VEST ARBITRARY POWERS IN THE A SSESSING OFFICER. 11. IN THE INSTANT CASE WHEN REASONS RECORDED FOR I NITIATING THE PROCEEDING U/S 147 OF THE ACT HAS NOT SEEN THE LIGH T OF THE DAY EVEN AT THE TIME OF FRAMING ORIGINAL ASSESSMENT U/S 147/143(3) OF THE ACT NOR AT THE TIME OF FRAMING THE SUBSEQUENT ASSESSMENT U/S 144/1 47 OF THE ACT, RATHER REVENUE AUTHORITIES ARE INITIATING AND THEN DROPPIN G THE PROCEEDINGS ONLY AS PER THEIR SUBJECTIVE SATISFACTION. WHEN ONCE ASS ESSMENT HAS BEEN FRAMED U/S 147/143(3) BY DROPPING THE PROCEEDINGS F OR WANT OF PROPER ITA NO.5755/DEL./2018 8 REASONS THE ASSESSING OFFICER HAS NO POWER TO REVI EW HIS ORDER AS ASSESSING OFFICER HAS ONLY POWER TO REASSESS THAT T OO IN ACCORDANCE WITH THE PROVISIONS LAID DOWN BY THE LEGISLATURE. 12. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT ASSESSMENT FRAMED IN THIS CASE VIDE ORDE R DATED 15.12.2016 AND CONFIRMED THE LD. CIT(A) IS NOT SUSTAINABLE IN THE EYE OF LAW, HENCE, ORDER TO BE QUASHED WITHOUT GOING INTO MERITS OF TH IS CASE. 13. CONSEQUENTLY APPEAL FILED BY THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH JANUARY, 2019. SD/- SD/- (N.S.SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29 /01/2019 BR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI. ITA NO.5755/DEL./2018 9 DATE OF DICTATION 18.01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 29.01.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER