Tarsem Singla, Ludhiana V. DCIT, Ludhiana

ITA 590/CHANDI/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68570 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-10-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 25-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMARVEER SINGH
• Keywords: Gift; Capital receipt
• Section: 153A; 234B; 148; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 590/CHD/2012 ASSESSMENT YEAR: 2004-05 SHRI TARSEM SINGLA, VS THE DCIT, CENTRAL CIRCLE I II, S/O SHRI JAGDISH RAI SINGLA LUDHIANA LUDHIANA PAN NO. ADVPS7247M (APPELLANT) (RESPONDENT) DATE OF HEARING : 22.10.2013 DATE OF PRONOUNCEMENT : 22.11.2013 APPELLANT BY : SHRI ASHWANI SHARMA (FILED ADJOURNMENT APPLICATION) RESPONDENT BY : SHRI AMARVEER SINGH ORDER PER T.R.SOOD, A.M. THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 16.4.2012 OF LD. CIT(A)-I, LUDHIANA. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS:- 1. THAT THE HONBLE CIT(A) IS WRONG IN NOT APPRECI ATING THE FACTS THAT TIME LIMIT OF SERVICE OF NOTICE U/S 143(2) SHALL ALSO APPLY IN RESPECT OF ASSESSMENT FRAMED U/S 153A . SUCH TIME LIMIT WOULD START FROM THE END OF THE MONTH IN WHICH THE RETURN WAS FILED. {ACIT VS. HOTEL BLUE MOON (2010)3 21-ITR- 362(SC) AND CIT VS. BALDEV RAJ MEHRA (2011) 344-I.T . REPS. 313 (P&H)}. 2 2. THAT THE HONBLE CIT(A) IS WRONG IN NOT APPRECIA TING THE FACTS THAT NOTICE U/S 143(2) WAS NOT SERVED ON THE ASSESSEE WITHIN THE STIPULATED TIME, IMPUGNED ASSESSMENT WAS NOT VALID, ABSENCE OF NOTICE IS NOT A CURABLE DEFECT U/ S 292BB. 3. THAT THE HONBLE CIT(A) IS WRONG IN NOT APPRECIA TING THE FACTS THAT WHILE MAKING AN ASSESSMENT U/S 153 A SER VICE OF NOTICE U/S 143(2) WITHIN THE PRESCRIBED TIME IS MAN DATORY, IN THE ABSENCE OF SERVICE OF SUCH NOTICE, THE AO CANNO T MAKE THE ADDITION IN THE INCOME OF THE ASSESSEE. DEFECT OF NON- ISSUE OF NOTICE U/S 143(2) IN THE CASE OF BLOCK ASS ESSMENT CANNOT BE CURED AND SUCH ASSESSMENT SUFFERS FROM BO TH PROCEDURAL AS WELL AS JURISDICTION ERROR. 4. THAT THE HONBLE CIT(A) IS WRONG IN NOT APPRECIA TING THE FACTS THAT ITEMS OF REGULAR ASSESSMENT CANNOT BE AD DED BACK IN THE PROCEEDINGS U/S 153 A WHEN NO INCRIMINATING DOCUMENTS WERE FOUND IN RESPECT OF DISALLOWED AMOUN T IN THE SEARCH PROCEEDINGS. 5. THAT THE HONBLE CIT(A) IS WRONG IN NOT APPRECIA TING THE FACTS THAT FRAMING OF ASSESSMENT U/S 153A DOES NOT INCLUDE THE ITEMS CONSIDERED BY THE AO UNDER THE REGULAR PR OVISIONS OF INCOME TAX ACT, 1961. HE HAS TO BE SPECIFIC WITH RESPECT TO COMPUTING UNDISCLOSED INCOME NOT FORMING PART OF THE REGULAR RETURN AND BRING TO TAX ONLY UNDISCLOSED IN COME UNDER THE PROVISIONS OF SECTION 153A. 6. THAT THE HONBLE CIT(A) IS WRONG IN NOT APPRECIA TING THE FACTS THAT ADDITION SUSTAINED AT RS. 9,95,029/- IS ILLEGAL, BAD IN LAW, WITHOUT JURISDICTION, UNCALLED FOR & AGAINS T LAW AND FACTS ON THE FILE. 7. THAT THE HONBLE CIT(A) IS WRONG IN NOT APPRECIA TING THE FACTS THAT A SURVEY U/S 133 A WAS CONDUCTED DURING THE ASSESSMENT YEAR 2006-2007 AND THE ASSESSEE OFFERED AN ADDITIONAL INCOME OF RS. 40 LACS. SO AMOUNT OF RS. 40 LACS WAS NOT EARNED IN ONE YEAR. OUT OF RS. 40 LACS, THE APPELLANT 3 INTRODUCED RS. 9,95,029/- DURING THE ASSESSMENT YEA R 2004- 2005. NO ADDITION IS CALLED FOR. 8. THAT THE HONBLE CIT(A) IS WRONG IN NOT APPRECIA TING THE FACTS THAT CHARGING OF INTEREST U/S 234 A AND 234B IS ILLEGAL, BAD IN LAW, WITHOUT JURISDICTION, AGAINST LAW AND F ACTS ON THE FILE SINCE NO NOTICE WAS EVER SERVED OR ISSUED. 3. THE ASSESSEE HAD FILED AND ADJOURNMENT APPLICATI ON. IT WAS NOTICED THAT CASE HAS BEEN ADJOURNED ON MANY OCCASIONS EARLIER A LSO. IT WAS FURTHER NOTICED THAT WHEN CASE WAS LAST FIXED ON 15.10.2013, AN ADJ OURNMENT APPLICATION WAS RECEIVED STATING THAT 30 TH SEPTEMBER WAS LAST DATE OF FILING OF THE RETURN, THEREFORE, REQUISITE INFORMATION COULD NOT BE COLL ECTED. ON THAT DAY THE CASE WAS ADJOURNED FOR 22.10.2013 AND IT WAS CLEARLY POI NTED OUT TO THE REPRESENTATIVE OF THE ASSESSEE THAT THIS WOULD BE L AST OPPORTUNITY. HOWEVER, AGAIN ON 22.10.2013, AN ADJOURNMENT APPLICATION WAS FILED. WE REJECT THE ADJOURNMENT APPLICATION BECAUSE ADJOURNMENT HAS BEE N SOUGHT UNNECESSARILY AND WE PROCEED TO DECIDE THE APPEAL ON EX.PARTE BASIS. LD. DR WAS HEARD. 4. GROUND NOS. 1 TO 3: THROUGH THESE GROUNDS THE AS SESSEE HAS MAINLY CHALLENGED THE ASSESSMENT ORDER BECAUSE NOTICE U/S 143(2) HAS BEEN ISSUED. THIS ISSUE HAS BEEN ADJUDICATED BY LD. CIT(A) VIDE PARA 4 OF HIS ORDER WHICH READS AS UNDER;- 4. I HAVE CONSIDERED THE ISSUE RAISED BY THE AR AN D THE COMMENTS OF THE AO ON THE SAME. THE ISSUE WHETHER I SSUANCE OF NOTICE U/S 143(2) IS MANDATORY IN THE CASE OF RE TURN FILED IN RESPONSE TO NOTICE U/S 153A HAS BEEN SUBJECT MATTER OF APPEAL BEFORE THE HONBLE DELHI HIGH COURT IN THE CASE ASH OK CHADA VS. ITO 337 ITR 399 WHEREIN THE HONBLE COURT HAS C LEARLY HELD AS UNDER:- SECTION 153 A OF THE INCOME TAX ACT, 1961, PROVIDE S FOR THE PROCEDURE FOR ASSESSMENT IN THE CASE OF SEA RCH OR 4 REQUISITION. SUB-SECTION (1) STARTS WITH A NON OBST ANTE CLAUSE STATING THAT IT IS NOTWITHSTANDING ANYTHING CONTAINED IN SECTIONS 147, 148 AND 149. CLAUSE (A) THEREOF PROVIDES FOR ISSUANCE OF NOTICE TO THE PERS ON SEARCHED UNDER SECTION 132, OR WHERE DOCUMENTS, ETC ., ARE REQUISITIONED UNDER SECTION 132 A TO FURNISH A RETURN OF INCOME. THIS CLAUSE NOWHERE PRESCRIBES ISSUANCE OF A NOTICE UNDER SECTION 143(2). THE WORDS SO FAR AS MAY BE IN CLAUSE (A) OF SUB-SECTION (1) OF SECTION 153A CANNOT BE INTERPRETED TO MEAN THAT THE ISSUE O F A NOTICE UNDER SECTION 143(2) IS MANDATORY IN THE CAS E OF AN ASSESSMENT UNDER SECTION 153A. THE AR IN HIS SUBMISSIONS HAS RELIED UPON VARIOUS JUDGMENTS WHICH ARE NOT DIRECTLY ON THE ISSUE UNDER CONSIDERATION ESPECIALLY THE DECISION OF HONBLE AP EX COURT IN THE CASE OF HOTEL BLUE MOON WHICH IS ON TH E APPLICABILITY OF PROVISIONS OF SECTION 143(2) IN TH E CASE OF RETURN FILED IN RESPONSE TO NOTICE U/S 158BC/158 BD. THE REST OF THE CASES MERELY HIGHLIGHT THE MANDATOR Y NATURE OF NOTICE U/S 143(2), WHICH IS NOT A MATTER OF DISPUTE AND FAIRLY SETTLED ISSUE. IT IS ONLY WITH R EFERENCE TO RETURN FILED IN RESPONSE TO NOTICE U/S 153 A THA T THE JUDICIAL VIEW WAS AMBIGUOUS TILL THE PRONOUNCEMENT OF HONBLE DELHI HIGH COURT AS MENTIONED SUPRA. IN THE CIRCUMSTANCES THE ACTION OF THE AO IN NOT ISSUING T HE NOTICE U/S 143(2) WITHIN THE TIME PERIOD SPECIFIED DOES NOT LEAD TO A LAPSE WARRANTING ANNULLING THE ASSESS MENT ORDER. THEREFORE THIS GROUND OF APPEAL IS DISMISSED . 5. AFTER CONSIDERING THE RELEVANT MATERIAL ON RECOR D AND THE SUBMISSIONS OF LD. DR WE FIND THAT THIS ISSUE IS SQUARELY COVERED AGAINST THE ASSESSEE BY THE ORDER OF HON'BLE DELHI HIGH COURT IN THE CASE OF AS HOK CHADDA V ITO 337 ITR 399 (DELHI). IN THIS CASE IT WAS HELD AS UNDER;- HELD, DISMISSING THE APPEAL, THAT (I) NO SPECIFIC NOTICE WAS REQUIRED UNDER SECTION 143(2) OF THE ACT WHEN THE N OTICE AS 5 REQUIRED UNDER SECTION 153A(1)(A) OF THE ACT WAS AL READY GIVEN. IN ADDITION, THE TWO QUESTIONNAIRES ISSUED T O THE ASSESSEE WERE SUFFICIENT SO AS TO GIVE NOTICE TO TH E ASSESSEE, ASKING HIM TO ATTEND THE OFFICE OF THE ASSESSING OF FICER IN PERSON OR THROUGH A REPRESENTATIVE DULY AUTHORIZED IN WRITING OR PRODUCE OR CAUSE TO BE PRODUCED AT THE GIVEN TIM E ANY DOCUMENTS, ACCOUNTS, AND ANY OTHER EVIDENCE ON WHIC H HE MAY RELY IN SUPPORT OF THE RETURN FILED BY HIM. 6. THUS, IT IS CLEAR THAT NO NOTICE IS REQUIRED BY SECTION 153A, THEREFORE, FOLLOWING THE ABOVE DECISION OF HON'BLE DELHI HIGH COURT WE DECIDE THIS ISSUE AGAINST THE ASSESSEE. 7. GROUND NOS. 4 & 5 : THIS ISSUE HAS BEEN ADJUDICA TED BY THE LD. CIT(A) AS UNDER:- THE GROUND OF APPEAL AT SR. NO.2 PERTAINS TO THE C LAIM OF APPELLANT THAT NO INCRIMINATING DOCUMENTS RELATING TO THE YEAR UNDER CONSIDERATION WERE FOUND DURING THE COUR SE OF SEARCH. THE PLEA OF THE APPELLANT ON THIS ISSUE IS NOT ACCEPTABLE AS THE PROVISIONS OF SECTION 153A ARE AB SOLUTELY CLEAR ON THIS WHEREBY THE ASSESSING OFFICER IS DUTY BOUND TO REOPEN THE CASES FOR SIX YEARS PROCEEDING THE YEAR OF SEARCH MOMENT SEARCH WARRANT U/S 132 OF THE I.T. ACT 1961 IS EXCLUDED. THIS MEANS THAT THERE IS NO REQUIREMENT UNDER STATUTE TO BRING ON RECORD ANY INCRIMINATING DOCUME NTS TO FRAME THE ASSESSMENT U/S 153A/143(3) FOR SIX YEARS PRECEDING THE YEAR OF SEARCH. IN THE CIRCUMSTANCES, THE GRIE VANCE OF THE APPELLANT, BEING WITHOUT ANY BASIS IS DISMISSED. 8. THE LD. DR IN THIS REGARD REFERRED TO THE DECISI ON OF HON'BLE DELHI HIGH COURT IN CIT V ANIL KUMAR BHATIA 352 ITR 493 (DELH I) AND REFERRED TO PAGE 18 OF THE ORDER. 9. AFTER CONSIDERING THE RELEVANT MATERIAL ON RECOR D AND THE SUBMISSIONS OF LD. DR, WE FIND THAT THESE GROUNDS ARE OF GENERAL N ATURE AND HAVE BEEN RIGHTLY DISMISSED BY LD. CIT(A) AND THEREFORE, WE DECLINE T O INTERFERE IN THE SAME. 6 10. GROUND NOS. 6 & 7: AFTER HEARING, WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT CAP [ITAL OF THE ASSESSEE AS ON 31.3.2004 WAS SHOWN BY THE ASSESSEE AT RS. 23,44,2 79/- WHEREAS THE CAPITAL AS ON 31.3.2003 WAS ONLY RS. 13,49,250/-. THUS, THERE WAS AN INCREASE IT THE CAPITAL AMOUNT OF RS. 9.95,029/-. THE ASSESSEE HAD DECLARE D INCOME ONLY OF RS. 1,49,250/- IN ASSESSMENT YEAR 2004-05 OUT OF WHICH HE HAD PAID LIC PREMIUM AMOUNTING TO RS. 69,612/- LEAVING A BALANCE OF RS. 79,638/- WHICH WAS MERELY SUFFICIENT TO MEET THE HOUSE HOLD EXPENSES. ON ENQ UIRY, THE ASSESSEE DID NOT EXPLAIN THE SOURCES OF THIS CAPITAL, THEREFORE, THE ASSESSING OFFICER ADDED A SUM OF RS. 9,95,025/- TO THE INCOME OF THE ASSESSEE. B EFORE THE LD. CIT(A) IT WAS SUBMITTED THAT ASSESSEE HAD MADE A SURRENDER OF RS. 40 LAKHS FOR ASSESSMENT YEAR 2006-07 DURING THE SURVEY CONDUCTED IN THE PR EMISES OF THE ASSESSEE ON 28.12.2005 AND THEREFORE, THAT CASH WAS AVAILABLE. IT WAS FURTHER SUBMITTED THAT IT CANNOT BE SAID THAT CASH WAS GENERATED ON A SING LE DAY AND THAT IT WAS ACCUMULATION OF MANY YEARS, THEREFORE, BENEFIT OF THE SOURCE SHOULD BE GIVEN AS THE SAME CASH HAS BEEN DEPOSITED AS CAPITAL. THE L D. CIT(A) AFTER EXAMINING THE SUBMISSIONS DECIDED THE ISSUE VIDE PARA 6 WHICH READS AS UNDER:- I HAVE CONSIDERED THE BASIS OF ADDITION MADE BY TH E AO AND THE ARGUMENTS OF THE AR ON THE ISSUE. THERE IS CLEAR FACTUAL INCREASE IN THE CAPITAL OF THE APPELLANT AS RECORDED IN THE RETURN OF INCOME FILED FOR A.Y. 200 4-05. THE INCREASE IN CAPITAL ON THE CREDIT SIDE IS FURTH ER BALANCED BY ENTRIES ON THE DEBIT SIDE OF THE CAPITA L ACCOUNT AND ANY INCREASE IN CAPITAL COULD BE POSSI BLE EITHER BY INCREASE IN THE INCOME OR IN THE FORM OF CAPITAL RECEIPTS LIKE LOANS/GIFTS ETC. THE ASSESSEE HAS NOT BEEN ABLE TO SHOW AS TO HOW THE INCREASE IN THE CAPITAL HAS BEEN POSSIBLE WITHOUT THE INCREASE IN INCOME / LOAN S. THE ARGUMENT OF THE AR THT THE AMOUNT SURRENDERED IN A. Y. 2006-07 WAS NOT GENERATED IN FEW DAYS AND WAS AVAIL ABLE WITH THE APPELLANT IN EARLIER YEAR AS WELL IS OF NO HELP AS THE AMOUNT IF SURRENDERD IN A PARTICULAR YEAR IS SU PPOSED 7 TO HAVE BEEN GENERATED IN THE SAID YEAR ONLY AND IT S BENEFIT CAN NOT BE GIVEN FOR EARLIER YEARS. THE BEN EFIT OF AMOUNT SURRENDERED IN A PARTICULAR YEAR CAN BE AVAI LED OF AT BEST IN LATER YEARS. IN THE CIRCUMSTANCES IT IS APPARENT THAT THE ASSESSEE HAS NO EXPLANATION FOR INCREASE IN THE CAPITAL WITHOUT CORRESPONDING DISCL OSURE OF INCOME AND THEREFORE THE ADDITION MADE BY THE AO IS CONFIRMED. 11. AFTER CONSIDERING THE SUBMISSIONS OF LD. DR AND RELEVANT MATERIAL ON RECORD, WE FIND NO REASON TO INTERFERE WITH THE ORD ER OF LD. CIT(A). IT IS SETTLED POSITION OF LAW THAT IF A SURRENDER IS MADE FOR A P ARTICULAR YEAR, THEN THE CASH OR ANY OTHER AVAILABLE SUM CAN BE UTILIZED ONLY FOR TH AT YEAR OR LATER YEAR BUT THE SAME CANNOT BE SAID TO PERTAIN TO EARLIER YEAR. TH EREFORE, WE FIND NOTHING WRONG WITH THE ORDER OF LD. CIT(A) AND WE CONFIRM THE ADD ITION OF RS. 9,95,029/-. 12. GROUND NO.8: THE QUESTION OF LEVY OF INTEREST IS OF CONSEQUENTIAL NATURE AND ASSESSING OFFICER IS DIRECTED TO LEVY THE INTER EST AS PER THE PROVISIONS OF THE ACT. 13. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22-11-2013 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 22 ND NOVEMBER, 2013 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH 8