ITO, Sirhind V. Sh. Randhir Singh, Sirhind

ITA 599/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5368 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KULDEEP DHIMAN
• Keywords: Capital asset; Income from undisclosed sources; Principle of natural justice
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO. 599/CHD/2017 ASSESSMENT YE AR: 2010-10 THE ITO, VS SHRI RANDHIR SINGH, WARD, HOUSE NO. 140, SIRHIND. WARD NO. 6, PREET NAGAR, SIRHIND. PAN NO. ATAPS8528C (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. CHANDER KANTA, SR.DR RESPONDENT BY : SHRI KULDEEP DHIMAN DATE OF HEARING : 01.11.2017 DATE OF PRONOUNCEMENT : 10.01.2018 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE ASSAI LING THE CORRECTNESS OF THE ORDER DATED 13.01.2017 OF LD. CIT (APP EALS) PATIALA PERTAINING TO 2010-11 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS . 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT (A), PATIALA HAS ERRED IN DELETING THE ADDITION OF RS.35,40,000/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS. 2. THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESS EE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS WAS REQUIRED TO EXPLAIN THE DEPOSIT OF RS. 33,09,240/- IN ITS BANK ACCOUNT WITH UNION BANK OF INDIA, FA TEHGARH SAHIB. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT W AS NOTICED THAT THE AMOUNTS HAVE BEEN DEPOSITED IN HDFC BANK, BASSI ROAD, SIR HIND, FATEHGARH SAHIB WHICH WERE EXPLAINED TO BE ON ACCOUNT O F SALE OF HUF ANCESTRAL AGRICULTURAL LAND AT VILLAGE BADHOSHI KALAN TO SHRI KAMALJIT SINGH S/O SHRI SUKHDEV SINGH OF MAULI VEDWAN SOLD BY ASSESSEE'S BROTHER SHRI DARSHAN SINGH WHEREIN THE ASSESSEE ALSO HAD HALF A SHARE . THE CLAIM WAS SUPPORTED BY WAY OF AFFIDAVIT. HOWEVER, SINCE THE ASSESSEE DESPITE A DIRECTION FAILED TO PRODUCE THE PURCHASER SHRI KAMALJIT SIN GH WHO DID NOT RESPOND EVEN TO THE SUMMONS ISSUED U/S 131, THE ADDITIO N OF RS. 25,40,000/- CASH DEPOSIT IN THE UNION BANK OF INDIA AND RS . 10 LACS IN HDFC BANK ACCOUNT WAS HELD TO BE NOT EXPLAINED. ITA 599/CHD/2017 A.Y. 2010-11 PAGE 2 OF 5 3. THE ASSESSEE CARRIED THE ISSUE IN APPEAL BEFORE THE F IRST APPELLATE AUTHORITY WHO DELETED THE ADDITION RELYING UPON THE REMA ND REPORT AND ON CONSIDERING THE FACTS. THE LD. SR.DR RELIES UPON THE ASSESS MENT ORDER. THE LD. AR RELIES UPON THE IMPUGNED ORDER. 4. THE RECORD SHOWS THAT BEFORE THE CIT(A), THE ASSESSE E ADVANCED THE FOLLOWING SUBMISSIONS : 5.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT FILED WRITTEN SUBMISSIONS. THE RELEVANT PORTION OF WRITTEN SUBMIS SION IS REPRODUCED AS UNDER: 'GROUND NO. :1 THE GRIEVANCE OF THE APPELLANT IN THIS REGARD IS TH AT THE LD. ASSESSING OFFICER IS IN ERROR IN MAKING IN ADDITION OF RS. 3540000. (RS. 25 40000 ON 20/10/2009 IN UBI BANK + RS. 1000000 ON 17/06/2009 IN HDFC BANK, SIRH IND) AS PER ORDER ON ACCOUNT OFUNXPLAINED CASH DEPOSIT IN UNION BANK OF INDIA, S IRHIND AND HDFC BANK, SIRHIND. AMOUNT DEPOSITED IN UNION BANK OF INDIA, SIRHIND AN D HDFC BANK HAS DULY BEEN EXPLAIND WITH THE DOCUMENTARY EVIDENCE I.E. OUT OF SALE PROCEEDS OF ANCESTRAL AGRICULTURE LAND SOLD BY THE APPELLANT VIDE SALE DE ED EXECUTED ON 20/10/2009 OUT OF ADVANCE RECEIVED ON 17/06/2009. (COPY OF SALE DEED & COPY OF SALE AGREEMENT ALREADY SUBMITTED DURING THE COURSE OF ASSTT. PROCE EDING) WHICH IS ILLEGAL. 1.2 APPELLANT WAS EMPLOYED AS SECRETARY IN THE MALA KPUR CO-OP. AGRI SERVICE SOCIETY LTD., MALAKPUR. IN THE ASSESSMENT YEAR HIS SALARY W AS RS. 22257/-PROXIMATELY TOTAL SALARY RS. 267087/- AS PER SALARY CERTIFICATE. OUT OF HIS SALARY HE PAID HIS HOUSE LOAN OF RS. 14565/- PER MONTH. THE APPELLANT HAVE NOT AN Y OTHER SOURCES OF ANY OTHER INCOME. APPELLANT IS NOT ABLE TO DEPOSIT HIGHER AMO UNT LIKE SUCH IN BANK ACCOUNT ALL THE BANK ACCOUNT ARE PRODUCED BEFORE THE ASSESSING OFFICER. NOT ANY ENTR Y ABOVE THE RS. 20000 IN ANY BANK ACCOUNT IN ANY FINANCIAL YEAR. 1.3 INCOME TAX OFFICER ERRED IN MAKING ADDITION O F RS. 3540000. WITHOUT APPRECIATION THE EVIDENCE ON FILE AND ALSO WITHOUT VERIFICATION OF A CTUAL FACTS FROM THE PURCHASER SH. KAMALJIT SINGH S/O SH. SUKHDEV SINGH. (PURCHASER OF LAND) & WITNESSES TO THE DOCUMENT EVEN THOUGH THE APPELLANT MADE A SPECIFIC REQUEST T O THE ASSESSING OFFICER FOR THE SAME WHICH IS AGAINST OF THE WELL ESTABLISHED PRINCIPAL OF NATURAL JUSTICE. IF THE PURCHASER NOT APPEAR BEFORE THE ASSESSING OFFICER IT FAULT ON THE PART OF THE PURCHASER NOT ON SAFER. NO. INTEREST OF APPELLANT IN MAKING OF SALE DEED LESSER THAN SALE AGREEMENT BECAUSE ANCESTRAL AGRICULTURE LAND OF THE APPELLANT NOT TAXABLE DUE T O RURAL AGRICULTURE LAND AND OUT OF THE MUNICIPAL & NOTIFIED AREA. AMOUNT SHOWN IN SALE DEE D RS. 5080000 AND THE SALE AGREEMENT OF RS 17200000. SALE AGREEMENT MADE ON TH E RATE FIXED AMONG THE PARTIES, THE DEAL FIXED THROUGH SH. GURDEEP SINGH ( PROPERTY DEA LER) S/O SH. BATCHITER SINGH, VILL. ADAMPUR. 1.4 THE APPELLANT ENTER IN THE SALE AGREEMENT ON 17 /06/2009. WHICH HE RECEIVED THE AMOUNT OF RS. 4000000/- FORM THE BUYER SH. KAMALJIT SINGH S/O SH. SUKHDEV SINGH R/O VILLAGE RNOHLI, DISTT. MOHALI. IN THE PRESENCE OF S H.RAJINDER SINGH S/O SH. GURMIT SINGH VILLAHE JAMAT, DISTT. MOHALI & GURDIP SINGH (PROPER TY DEALER) S/O SH. BACHITER SINGH R/O VILLAGE ADAMPUR, DISTT. FATHEGARH SAHIB & OTHER 3-4 PERSON. THE APPELLANT RECEIVED CASH RS. 1000000 FROM BUYER SH. KAMALJIT SINGH S/O SH. SUKHDEV SINGH IN THE PRESENCE OF SH. GURDEEP SINGH (PROPERTY DEALER) S/O SH. BACH ITTER SINGH VILLAHE ADAMPUR.& HARKAMALDEEP SINGH S/O SH. DARSHAN SINGH. IN THE SALE AGREEMENT IS CLEARLY MENTION THAT THE A MOUNT GIVEN IN PRESENCE OF THE WITNESSES. AND THE SIGNATURE OF THE BUYER MATCH WIT H THE SALE DEED WHICH IS EXECUTE ON 20/10/2009. 1.5 IT IS WELL SETTLED LAW THAT WHEN THE INITIAL ON US PLACED BY EXPLANATION HAS BEEN DISCHARGED BY THE ASSESSEE, THE ONUS SHIFT ON THE R EVENUE TO SHOW THAT THE AMOUNT IN QUESTION CONSTITUTED UNDISCLOSED INCOME. (MAK DATA P. LTD. V /SCIT) ALL THE FACTS OF THE CASE SHOW THAT SALE AGREEMENT AND SALE DEED CLEARLY INDICATES THAT ALL THE FUNDS DEPOSITS IN THE BANKS ARE OUT OF SALE PRO CEEDS OF THE ANCESTRAL AGRICULTURE LAND OF THE APPEALNT. ALL THE DOCUMENT ARE SIGNED BY THE BU YER KAMALJIT SINGH. THE ADDITION MADE BY THE ASSESSING OFFICE IS WRONG IN LAW OF NATURAL JUSTICE.' ITA 599/CHD/2017 A.Y. 2010-11 PAGE 3 OF 5 4.1 THESE WERE REMANDED BY THE CIT(A) TO THE AO, AS IS E VIDENT FROM PARA 5.2 AND 5.4 OF HIS ORDER AND THEREAFTER HE GRANTED RELIEF HOLDING AS U NDER : 5.2 THE SUBMISSIONS OF THE APPELLANT WERE SENT TO THE A SSESSING OFFICER FOR HIS COMMENTS. THE ASSESSING OFFICER VIDE LETTER NO. 1043 DATED 10.02.2014 SUBMITTED HIS COMMENTS WHEREIN HE RELIED ON THE ASSESSMENT ORDER. 5.4 THE SUBMISSIONS OF THE APPELLANT WERE AGAIN SE NT TO THE ASSESSING OFFICER BY REMANDING THE ISSUE TO THE A.O. U/S 250(4) OF TH E IT. ACT, 1961 FOR NECESSARY ENQUIRY TO PROBE THE AUTHENTICITY OF THE SALE AGREE MENT DATED 17.06.2009 WHICH WAS RELIED ON BY THE APPELLANT. THE ASSESSING OFFICER V IDE LETTER NO. 3581 DATED 21.12.2016 SUBMITTED HIS COMMENTS AS UNDER: 'IN THIS REGARD, IT IS SUBMITTED THAT SUMMONS U/S 1 31 OF THE INCOME TAX ACT, 1961 WERE ISSUED TO THE PURCHASER SH. KAMALJEET SIN GH ON 08.12.2016. SH. KAMALJEET SINGH HAS ATTENDED THE OFFICE OF THE UNDE RSIGNED ON 16.12.2016. STATEMENT HAS BEEN RECORDED AND DULY PLACED ON THE RECORD (COPY ENCLOSED). BANK STATEMENT OF SH. KAMALJEET SINGH AND SALE DEEDS OF PROPERTIES WHICH SH. KAMALJIT SINGH SOLD EARLIER HAVE BEEN ENCLOSED. KEEPING IN VIEW THE STATEMENT AND DOCUMENTARY EVIDE NCE, IT WAS CLEAR THAT THE SALE CONSIDERATION BETWEEN SH. KAMALJEET S INGH PURCHASER AND SH. RANDIR SINGH & SH. DARSHAN SINGH SALER IS RS. 1 ,88,90,625/- (1/2 SHARE) WHEREAS THE SAME WAS NOT CONSIDERED AT THE T IME OF ASSESSMENT PROCEEDINGS. IT IS THEREFORE SUBMITTED THAT THE APP EAL MAY KINDLY BE DECIDED ON MERITS' 5.5 I HAVE CONSIDERED THE WRITTEN SUBMISSIONS PUT F ORTH BY THE APPELLANT AND ALSO THE FACTS OF THE CASE. DURING THE APPELLATE PROCEEDINGS , THE APPELLANT FILED A COPY OF AGREEMENT TO SELL DATED 17.06.2009 AND A COPY OF RE GD. SALE DEED OF AGRICULTURAL' F LAND DATED 20.10.2009. THE AO IN HIS REPORT DATED 2 1.12.2016 HAS NEITHER OPPOSED NOR J CONTROVERTED THE DOCUMENTS RATHER VERIFIED THE GENU INENESS OF THE SAME IN FAVOUR OF THE APPELLANT. THUS, THE EXPLANATION OF THE APPELLA NT THAT THE IMPUGNED BANK DEPOSITS REPRESENTED THE SALE PROCEEDS OF THE AGRICULTURAL L AND HAS BEEN NOW VERIFIED AND FOUND TRUE BY THE AO. THE ADDITION MADE DURING THE ASSESSMENT PROCEEDINGS CONSIDERING THE / BANK DEPOSITS AS UNACCOUNTED INCOME IS THUS, UNCALLED FO R. THE SAME IS, THEREFORE, DELETED. (EMPHASIS SUPPLIED) 4.2 IN THE AFORESAID FACTS AND CIRCUMSTANCES, THE OCCASION FOR THE AO TO FILE AN APPEAL DID NOT ARISE. IT IS NOTICED THAT FOR FILING THE PRESENT APPEAL, APPROVAL HAS BEEN GRANTED BY PR. CIT PATIALA ON 15.03.201 2. THERE CAN BE NO TWO OPINIONS TO HOLD THAT THE APPROVAL ADMITTEDLY HAS BEEN GRANTED MECHANICALLY WHICH LEADS TO THE INDELIBLE CONCLUSION THAT THE ADMINISTRATIVE CHECKS AND BALANCES PLACED BY THE DEPART MENT IN PLACE FOR NOT FILING FRIVOLOUS APPEALS ADMITTEDLY ARE NOT WORKING. SINCE THE FACTS AND EVIDENCES CONSIDERED IN THE REMAND PROCEEDINGS HAVE NOT BEEN REBUTTED BY THE AO IN THE PRESENT PROCEEDINGS, THE PRESENT APPEAL O UGHT NOT TO HAVE BEEN FILED. AS ONCE THE ISSUES HAVE BEEN GIVEN UP BY THE AO IN THE REMAND PROCEEDINGS, THE OCCASION TO RE-AGITATE THE VERY SAME IS SUE BY FILING AN APPEAL IN THE ABSENCE OF ANY REBUTTAL ON FACTS AND EVIDEN CES CAN BE EASILY SAID TO BE NOT ONLY AN IRRESPONSIBLE CRIMINAL WASTE OF GOVE RNMENT TIME, MONEY AND RESOURCES BUT ALSO GIVES RISE TO THE LATENT R ESENTMENT IN PUBLIC CONSCIOUSNESS THAT THE TAX AUTHORITIES ARE CALLOUSLY HEE DLESS AND UNCARING VIS--VIS THE PAIN AND HARASSMENT CAUSED BY SUCH OBDUR ATE ACTS TO THE ITA 599/CHD/2017 A.Y. 2010-11 PAGE 4 OF 5 PUBLIC WHOM THEY ARE PRESUMED TO SERVE. THE AO ONCE S ATISFIED IN THE REMAND PROCEEDING CANNOT BE SAID TO BE AGGRIEVED BY TH E ORDER PASSED BY THE CIT(A) CONSIDERING HIS OWN REMAND REPORT. IT NEED NOT BE OVER EMPHASIZED THAT AS FAR AS THE WORLD AT LARGE IS CONCERNE D, THE ASSESSING OFFICER IS AN AUTHORITY AND IS NOT A SPECIFIC PERSON. THUS, ME RELY ON ACCOUNT OF CHANGE OF THE AO, PRESUMABLY THE INCUMBENT C ANNOT BE ALLOWED TO FILE APPEALS WILLY NILLY. SUCH RAMPANT CARELESS BEHAVIOUR S HAKES THE PUBLIC TRUST AND FAITH REPOSED IN THE AUTHORITY OF THE AO TO ACT FAIRLY AND IMPARTIALLY. IT WOULD NOT BE OUT OF CONTEXT TO QUOTE FROM THE DECISION OF THE APEX COURT IN THE CASE OF CIT VS MAHALAXMI SUGAR MILLS CO. LTD. (1986) 160 ITR 920 (S.C) THERE IS A DUTY CAST ON THE ITO TO APPLY THE RELEVA NT PROVISION OF THE ACT FOR THE PURPOSE OF DETERMINING THE TRUE FIGURE OF THE ASSESSEES TAXABLE INCOME AND THE CONSEQUENTIAL TAX LIA BILITY. IT WOULD NOT BE OUT OF PLACE TO EXTEND THIS THAT SO AS TO ALSO MEAN THAT IT IS ALSO THE DUTY OF THE ASSESSING OFFICER TO FILE APPEALS ONLY IF THE AO IS AGG RIEVED BY THE FINDING. THE CONCLUSION ARRIVED AT ON CONSIDERING HIS OWN R EMAND REPORT CANNOT BE SUCH AN INSTANCE UNLESS THE FACTS CONSIDERED ARE ASSAILED AS INCORRECT FACTS. IT IS FOR THIS SPECIFIC REASON THAT CHECKS AND BALANCES HAVE BEEN ADMITTEDLY PLACED ON RECORD REQUIRING THAT BEFORE THE FILING OF A PPEAL IS PERMITTED TO THE AO, THE APPROVAL OF PR. CIT IS NECESSA RY. THE SAID EXERCISE HAS A MEANINGFUL PURPOSE AS IT NOT ONLY ENURES THE TAX PAYER FROM DEFENDING FRIVOLOUS APPEALS BUT EVEN OTHERWISE ENSURES THA T THE GOVERNMENT TIME, MONEY AND FUNDS ARE NOT FRIVOLOUSLY FRITTE RED. REFERENCE MAY ALSO BE MADE TO THE ORDER DATED 04.01.2018 IN ITA 424/CHD/2017 IN THE CASE OF ITO VS SHRI JAGDEV SINGH : 7. THOUGH THE ITAT HAS THE POWERS TO IMPOSE COSTS, HOWEVER THE EXERCISE OF THE POWER IS REFRAINED FROM. HOWEVER, IT IS HOP ED THAT THE ADMINISTRATION VIGOROUSLY ENSURES THAT THE OFFICERS ARE ADVISED AN D INSTRUCTED TO EXERCISE THEIR DISCRETION FAIRLY AND JUDICIOUSLY IN NOT FILI NG APPEALS FRIVOLOUSLY. IT IS NOTED THAT THE ADMINISTRATIVE CHECKS AND BALANCES P UT IN PLACE BY THE DEPARTMENT FOR ENSURING THAT FRIVOLOUS APPEALS ARE NOT FILED, DO NOT APPEAR TO BE WORKING. CARE SHOULD HAVE BEEN TAKEN TO NOTE TH AT THE ISSUE HAD BEEN GIVEN UP IN THE REMAND PROCEEDINGS BY THE AO. IN T HESE IN THE CIRCUMSTANCES, WITHOUT ASSAILING THE FACTS AND EVID ENCES, APPEAL SHOULD NOT HAVE BEEN FILED MECHANICALLY. IT IS SEEN THAT THE P RESENT APPEAL HAS BEEN FILED WITH THE APPROVAL OF PR. CIT-2 LUDHIANA. IT NOT ONLY DEMONSTRATES THAT THE APPROVAL HAS BEEN GIVEN MECHANICALLY, IT ALSO E RODES THE TRUST REPOSED BY THE TAX PAYER IN THE FAIRNESS OF THE ADMINISTRATION . FILING OF SUCH FRIVOLOUS APPEALS REFLECTS POORLY ON THE DEPARTMENTAL MINDSET AND GIVES UNWANTED STRENGTH TO THE EVER INCREASING CYNICAL BELIEF THAT THE ADMINISTRATIVE SET UP WORKS MINDLESSLY CHALLENGING ANY AND EVERY RELIEF G RANTED BY AN AUTHORITY IN ACCORDANCE WITH LAW. STILL MORE NEEDS TO BE DONE T O REIGN IN THE DESIRE TO SHOW HIGHER EFFICIENCY BY CONCERNED OFFICIALS BY FI LING A HIGHER NUMBER OF APPEALS. THE MINDLESS ADHERENCE TO TARGETS CAN CAU SE IRREPARABLE HAVOC IN ITA 599/CHD/2017 A.Y. 2010-11 PAGE 5 OF 5 THE FAITH OF THE CITIZENS IN THE ADMINISTRATIVE SET UP WHICH SHOULD BE AVOIDED AND OBHORED AT ALL COSTS. A POSITIVE AFFIRMATIVE A TMOSPHERE MAY NEED TO BE CREATED ENCOURAGING THE CONCERNED OFFICIALS TO BLOO M IN A FEARLESS ATMOSPHERE OF TRUST AND CONFIDENCE IN THEIR FUNCTIONING BALANC ED WITH CLEAR AND UNAMBIGUOUS INSTRUCTIONS THAT FILING OF FRIVOLOUS A PPEALS SHALL BE VIEWED STRICTLY AND NEGATIVELY. THE MESSAGE HAS TO BE CLE ARLY SENT THAT FILING OF APPEALS MINDLESSLY WOULD BE VIEWED AND CONSIDERED T O BE AN ACT OF INEFFICIENCY OR DERELICTION OF DUTY AND NOT HIGHER EFFICIENCY . FORCING THE TAX PAYER TO GO THROUGH THE TROUBLE OF ENGAGING A LAWYE R AND INCURRING UNNECESSARY COSTS TO DEFEND A RELIEF GRANTED WHEREI N THE AO HAS UNAMBIGUOUSLY ACCEPTED THE EVIDENCE IN THE REMAND R EPORT GIVES RISE IN THE PUBLIC MIND TO SEEDS OF STATE ALIENATION. SUCH AN ACT SEVERELY ERODES THE TRUST AND IMPLICIT FAITH WHICH THE TAX PAYER GENERA LLY REPOSES THE ASSESSING OFFICER TO ALWAYS ACT FAIRLY AND IMPARTIALLY IN A D EMOCRATIC INDIA. THE TAX ADMINISTRATION WORKS FOR THE GOVERNMENT OF INDIA AN D CANNOT BE ALLOWED TO BE VIEWED AS AN AGENT OF AN ALIEN STATE WHICH WAS T HE CASE OF PRE INDEPENDENCE INDIA. 5. ACCORDINGLY, IN THE FACTS AS THEY STAND, THE DEPART MENTAL APPEAL IS DISMISSED. 6. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.01. 2018. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.