Shri Lila Dhar Pandey, Nainital V. ACIT, Haldwani

ITA 5806/DEL/2011

• Counselvise Citation: 580620114 RSA 2011
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 05-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 27-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S N BHATIA
• Assessee Lawyers: S K CHATURVEDI
• Keywords: Reopening of assessment; Invalid notice; Salary income; Principle of natural justice; Tangible material; Difference of opinion; Assessment record; Change of opinion
• Section: 147; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH. S. V. MEHROTRA, AM AND SH. JOGINDER SIN GH, JM ITA NO. 5806/DEL/2011 : ASS TT. YEAR : 2006-07 SHRI LILA DHAR PANDEY, GAYATRI NAGAR, PHASE-III, KUSUM KHERA HALDWANI, NAINITAL (UTTARAKHAND) VS ASSTT. COMMISSIONER OF INCOME TAX, HALDWANI (APPELLANT) (RESPONDENT) PAN NO. AJRPP5303R ASSESSEE BY : SH. S. K. CHATURVEDI, CA REVENUE BY : SH. S. N. BHATIA, DR DATE OF HEARING : 5.8.2014 DATE OF PRONOUNCEMENT : 7.8.2014 ORDER PER JOGINDER SINGH, JM: THIS IS AN APPEAL BY THE ASSESSEE CHALLENGING THE O RDER OF THE LD. CIT(A) DATED 20.10.2011 ON THE FOLLOWING GROUNDS:- 1. THAT THE L. ACIT ERRED IN INITIATING PROCEEDING S U/S 147 OF THE ACT, WHICH ARE BAD IN LAW, LIABLE TO BE CANCELL ED. THE INSTANT CASE IS A CASE OF MERE CHANGE OF OPINION, WHICH DOE S NOT PERMIT INITIATION OF PROCEEDINGS U/S 147 OF THE ACT. THE L . CIT(A) HAS ERRED UNDER LAW AND FACTS OF THE CASE IN CONFIRMING THE A/O WHICH IS BAD IN LAW, LIABLE TO BE QUASHED. 2. THAT THE PROCEEDINGS U/S 147/148 HAVE WRONGLY BE EN INITIATED WHICH WERE WITHOUT ANY FRESH MATERIAL ON RECORD, HE NCE LIABLE TO BE QUASHED. THERE WAS NO TANGIBLE MATERIAL BEFOR E THE ASSESSING OFFICER TO HOLD THAT INCOME HAD ESCAPED A SSESSMENT WITHIN THE MEANING OF SEC. 147 AND THE REASONS RECO RDED FOR ITA NO. 5806/DEL/2011 LILA DHAR PANDEY 2 REOPENING THE ASSESSMENT CONSTITUTED A MERE CHANGE OF OPINION. THEREFORE, THE REASSESSMENT IS NOT VALID, LIABLE TO BE QUASHED. THAT IT HAS BEEN HELD BY THE HONBLE S. C. AND VARI OUS H. CS. AND HONBLE ITAT THAT IN ABSENCE OF FRESH MATERIAL WHICH COULD LEAD TO FORMATION OF OPINION THAT THERE WAS ESCAPEM ENT OF INCOME, CHANGE OF OPINION CANNOT BE A REASON OF REO PENING OF ASSESSMENT. IT HAS ALSO BEEN HELD THAT IN CASE OF D IFFERENT VIEW ON SAME FACTS AND MATERIAL, REOPENING OF ASSESSMENT CANNOT BE SUSTAINED. IT HAS ALSO BEEN HELD THAT MERE CHANGE O F OPINION DOES NOT PROVIDE JURISDICTION TO INITIATE PROCEEDIN GS U/S 147 OF THE ACT. 3. THAT WHILE ISSUING NOTICE U/S 147/148 THE REASON S OF BELIEF AS TO WHAT INCOME ESCAPED ASSESSMENT HAVE NOT BEEN STA TED NOR COMMUNICATED TO THE APPELLANT. THE NOTICE SO ISSUED IS BAD IN LAW AND NO ASSESSMENT COULD HAVE BEEN MADE ON THE B ASIS OF INVALID NOTICE. 4. THAT IT HAS BEEN HELD BY THE HONBLE I.T.A.T. DE LHI IN THE CASE OF M/S DELHI AUTO & GEN. FINANCE (P) LTD. VS C IT (1994) 122 TAXATION 124, THAT AN ORDER U/S 143(1)(A) WAS A N ORDER OF ASSESSMENT SO LONG AS NOT STRUCK DOWN AS AN INVALID ORDER. IN THE PRESENT CASE THE ORDER U/S 143(1)(A) WAS NEVER STRUCK DOWN AS AN INVALID ORDER AND MERELY ON THE BASIS OF CHAN GE OF OPINION ASSESSMENT HAS BEEN REOPENED WHICH IS NOT P ERMISSIBLE UNDER LAW. BY GOING THROUGH THE ASSESSMENT RECORD I T IS VERY MUCH CLEAR THAT THE CLAIM OF EXEMPTION U/S 10(10C) WAS ALLOWED BY THE L. ASSESSING AUTHORITY VIDE A/O U/S 143(1) D T. 23.02.2007 ON THE BASIS OF DOCUMENTS AVAILABLE ON RECORD AFTER APPLYING HIS BRAIN AND GIVING FULL THOUGHT AND PROPER CONSIDERAT ION. BUT SUBSEQUENTLY BY CHANGE OF OPINION THE CASE HAS BEEN REOPENED AND PROCEEDINGS U/S 147 HAVE BEEN INITIATED. THE IN STANT CASE IS PURELY A CASE OF CHANGE OF OPINION AND THE PROCEEDI NGS U/S 147/148 ARE BAD IN LAW AND LIABLE TO BE VACATED. TH E VIEW AS EXPRESSED BY THE HONBLE KOLKATA H. C. IN THE CASE OF BERGER ITA NO. 5806/DEL/2011 LILA DHAR PANDEY 3 PAINTS INDIA LTD. VS ACIT (2010) 232 CTR (CAL) 338, IS RELIED UPON. THE L. A/O HAS SUPPRESSED THE FACT OF INITIAT ION OF PROCEEDINGS U/S 154 AND DROPPING THE SAME VIDE ORDE R DT. 16.04.2007 U/S 154. THIS ACT OF THE L. A/O IS AGAIN ST THE PRINCIPLES OF NATURAL JUSTICE. 5. THAT THE AUTHORITIES BELOW HAVE ERRED IN NOT CON SIDERING THE WRITTEN SUBMISSIONS DT. 27.08.2010, 15,09.2010 AND 23.09.2010 FURNISHED BEFORE THE L. A/O PROPERLY WHERE IN IT WA S SUBMITTED THAT THE PROCEEDINGS U/S 147 AS INITIATED ARE BAD I N LAW BEING AGAINST THE SETTLED PRINCIPLES OF LAW, HENCE LIABLE TO BE DROPPED AND NOTICE ISSUED IS LIABLE TO BE VACATED. THE A/O SO COMPLETED IS LIABLE TO BE QUASHED AS VARIOUS OBJECTIONS RAISE D BY THE APPELLANT AGAINST PROCEEDINGS U/S 147 HAVE NOT BEEN DISCUSSED AT ALL. 6. THAT THE AUTHORITIES BELOW HAVE MISERABLY FAILED IN NOT CONSIDERING PROPERLY VARIOUS JUDICIAL PRONOUNCEMENT S RELIED UPON BY THE APPELLANT ON THE POINT OF PROCEEDINGS U /S 147/148 AND CLAIM OF EXEMPTION U/S 10(10C). 7. THAT THE L. CIT(A) HAS ERRED UNDER LAW IN NOT CO NSIDERING AND GIVING A PROPER THOUGHT ON THE POINT OF EXEMPTI ON CLAIMED U/S 10(10C) IN THE LIGHT OF VARIOUS LEGAL OBJECTION S RAISED AGAINST PROCEEDINGS U/S 147 AND VARIOUS JUDICIAL PRONOUNCEMENTS AND DOCUMENTARY EVIDENCE RELIED UPON BY THE APPELLANT IN SUPPORT OF HIS CLAIM OF EXEMPTION ALLO WABLE U/S 10(10C) WITH FURTHER RELIEF U/S 89(1). 8. THAT WITHOUT PREJUDICE TO THE PLEA THAT PROCEEDI NGS INITIATED U/S 147 ARE AGAINST THE SETTLED PRINCIPLES OF LAW A ND THE ASSESSMENT ORDER SO COMPLETED IS LIABLE TO BE QUASH ED, THE APPELLANT IS ENTITLED FOR EXEMPTION U/S 10(10C) WIT H FURTHER RELIEF U/S 89(1) OF THE ACT AS CLAIMED. ITA NO. 5806/DEL/2011 LILA DHAR PANDEY 4 2. AT THE TIME OF HEARING WE HAVE HEARD SHRI S. K. CHATURVEDI, LD. COUNSEL FOR THE ASSESSEE AND SHRI S. N. BHATIA, LD. SENIOR DR. AT THE OUTSET THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRE SS GROUNDS NO. 1 TO 6, THEREFORE, THESE GROUNDS ARE DISMISSED AS NOT PR ESSED. 3. THE ONLY GROUND RAISED BEFORE US PERTAINS TO CHA PTER-III, INCOME WHICH DO NOT FORM PART OF TOTAL INCOME, U/S 10(10C) OF THE ACT FOR CLAIMING RELIEF U/S 89(1) OF THE ACT. THE C RUX OF ARGUMENT ADVANCED ON BEHALF OF THE ASSESSEE IS THAT THE BENE FIT OF SEC. 10(10C) OF THE ACT WAS WRONGLY DENIED TO THE ASSESSEE FOR W HICH RELIANCE WAS PLACED UPON THE DECISION IN THE CASE OF SHRI B. C. PANDEY VS ACIT (ITA NO. 5805/DEL/2011) AND JEEVAN CHANDRA KABADWAL VS DCIT (ITA NO. 3152/DEL/2010). ON THE OTHER HAND, THE LD. SENIOR DR DEFENDED THE CONCLUSION DRAWN BY THE LD. ASSESSING OFFICER AS WELL AS THE LD. CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF AR E THAT THE ASSESSEE DECLARED INCOME OF RS. 2,11,012/- ON 15.6.2006 WHIC H WAS PROCESSED U/S 143(1) OF THE ACT ON 23.2.2007. IT WAS NOTICED BY THE ASSESSING OFFICER THAT ASSESSEE HAS CLAIMED EXEMPTION OF RS. 5,00,000/- U/S 10(10C) OF THE ACT, BEING THE AMOUNT RECEIVED AS EX GRATIA UNDER EXIT OPTION SCHEME OF STATE BANK OF INDIA. THE ASSESSEE WAS ASKED TO EXPLAIN HIS STAND. IN COMPLIANCE TO NOTICE ISSUED T O THE ASSESSEE THE ITA NO. 5806/DEL/2011 LILA DHAR PANDEY 5 ASSESSMENT PROCEEDINGS WERE ATTENDED FROM TIME TO T IME AND ALSO PREFERRED WRITTEN SUBMISSION. THE ASSESSEE WAS A BA NK EMPLOYEE, DISCLOSED INCOME FROM SALARY AT RS. 10,50,211/- AND CLAIMED EXEMPTION OF RS. 5,00,000/- U/S 10(10C) OF THE ACT. THE ASSESSING OFFICER IN VIEW OF CIRCULAR NO. CIRDO/HR/72/2006-07 DATED 8.8.2006 OF HUMAN RESOURCES DEPARTMENT HELD THAT TH E EX GRATIA PAYMENT WILL BE ADDED TO THE INCOME OF THE EMPLOYEE AND THUS, MADE THE ADDITION. ON APPEAL, THE LD. CIT(A) ALSO AFFIRM ED THE STAND TAKEN BY THE LD. ASSESSING OFFICER. THE AGGRIEVED ASSESSE E IS IN APPEAL BEFORE THIS TRIBUNAL. WE NOTE THAT THIS ISSUE IS AL READY SETTLED BY VARIOUS JUDICIAL PRONOUNCEMENTS IN FAVOUR OF THE AS SESSEE SOME OF THEM ARE AS UNDER:- I) SAIL DSP VS EMPLOYEES ASSOCIATION VS UNION OF IN DIA 262 ITR 638 (CAL) II) DCIT VS KRISHNA GOPAL SAHA 121 ITD 368 (CAL) (T M) 5. WITHOUT ADVERTING FURTHER AND RESPECTFULLY FOLLO WING THE DECISION IN THE CASE OF SHRI BHUVAN CHANDRA PANDEY (ITA NO. 5805/DEL/2011) AND JEEVAN CHAND KABADWAL (ITA NO. 3152/DEL/2010), IT IS HELD THAT THE ASSESSEE ENTITL ED TO EXEMPTION U/S 10(10C) OF THE ACT. THE REASONING CONTENDED IN THES E ORDERS IS SELF- EXPLANATIONTRY AND IN THE ABSENCE OF ANY CONTRARY DECISION WE FIND MERIT IN THE APPEAL OF THE ASSESSEE. THUS, THIS GRO UND OF THE ASSESSEE IS ALLOWED. ITA NO. 5806/DEL/2011 LILA DHAR PANDEY 6 6. FINALLY APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . 7. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN T HE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT THE CONCLUSIO N OF THE HEARING ON 5.8.2014. SD/- SD/- (S. V. MEHROTRA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7/8/2014 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR DATE INITIAL 1. DRAFT DICTATED ON 5.8.2014 PS 2. DRAFT PLACED BEFORE AUTHOR 5.8.2014 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.