Sh. Pankaj Arora, HUF, Amritsar. V. The Income-tax Officer, Amritsar.

ITA 60/ASR/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2256 (ITAT-AMRITSAR)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2001-2002
• Appeal Filed On: 28-01-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: RAMNIK ARORA
• Keywords: Unexplained cash credit; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.60(ASR)/2013 ASSESSMENT YEAR:2001-02 PAN :AAAHP6240F SH. PANKAJ ARORA HUF, VS. INCOME TAX OFFICER, 172, GREEN AVENUE, RANGE 5(3), AMRITSAR. AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.RAMNIK ARORA, ADVOCATE RESPONDENT BY:SH.TARSEM LAL, DR DATE OF HEARING: 25/06/2013 DATE OF PRONOUNCEMENT:16/07/2013 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A), AMRITSAR DATED 16.11.2012 FOR THE ASSESSMENT YEA R 2001-02. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E THE ENHANCEMENT IN INCOME IN THE REASSESSMENT PROCEEDINGS IS BAD IN LAW AND FACTS OF THE CASE. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE RE- ASSESSMENT OF INCOME TAX WITHOUT SERVICE OF STATUTO RY NOTICE ITA NO.60(ASR)/2012 2 UNDER SECTION 143(2) OF THE ACT BY THE A.O. IS ILLE GAL AND WITHOUT JURISDICTION. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSING OFFICER HAS RECORDED REASONS TO BELIEF FOR REOPENIN G OF ASSESSMENT AND INITIATED THE RE-ASSESSMENT PROCEEDI NGS WITHOUT GOING THROUGH THE ORIGINAL RECORDS OF THE ASSESSEE, WHICH IS AGAINST THE PROVISIONS OF THE ACT. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE RE WAS ANY MATERIAL ON RECORD WHICH FALSIFIES THE VERSION OF T HE ASSESSEE THAT THE ASSESSEE HAS RECEIVED BACK HIS AMOUNT OF R S.5000/- WHICH WAS ADVANCED IN THE ASSESSMENT YEAR 2000-01. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE RE WAS ANY MATERIAL ON RECORD WHICH PROVES THAT THE ASSESSEE H AS PAID ANY COMMISSION FOR OBTAINING CHEQUE FROM M/S. FRIENDS P ORTFOLIO PVT. LTD. 6. THAT THE ASSESSEE CRAVES TO RAISE ANY OTHER GROUND OF APPEAL AT THE TIME OF HEARING OF THE PRESENT APPEAL BEFORE YO UR HONOUR. 2. AS REGARDS GROUND NO.1 TO 3 BEING LEGAL GROUNDS, THE BRIEF FACTS ARE THAT THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, THE PROCEEDINGS U/S 147 WERE INITIATED AND NOTICE UNDER SECTION 148 WAS ISSUED AND SERVED UPON THE ASSESSEE ON 20.03.2008, AFTER GETTING THE NECESSARY APPROVAL FROM THE APPROPRIATE AUTHORITIES , THE CASE WAS RE-OPENED RELYING UPON THE REASONS RECORDED. THE ASSESSEE CH ALLENGED THE ACTION OF THE A.O. FRAMING RE-ASSESSMENT PROCEEDINGS IN SERVING S TATUTORY NOTICE UNDER SECTION 143(2) OF THE ACT. THEREFORE, THE ACTION OF THE A.O. WAS AGITATED TO BE ILLEGAL AND WITHOUT JURISDICTION. ALSO CHALLENGE D THE ORDER WITH REGARD TO ITA NO.60(ASR)/2012 3 REASONS RECORDED WITHOUT GOING THROUGH THE ORIGINAL RECORD OF THE ASSESSEE BY THE A.O. AGAINST THE PROVISIONS OF THE ACT. THE LD. CIT(A) VIDE PARA 8 & 9 DEALT THE CHALLENGES OF THE ASSESSEE, WHICH WERE REJECTED AND HENCE THE ASSESSEE IS IN APPEAL BEFORE US THROUGH GROUNDS NO. 1 TO 3. 3. AFTER HEARING THE PARTIES, WE CONCUR WITH THE VI EWS OF THE LD. CIT(A) IN PARA 8 & 9, WHICH FOR THE SAKE OF CONVENIENCE AR E REPRODUCED AS UNDER: 8. THROUGH GROUND OF APPEAL NO.2, THE APPELLANT H UF HAS CHALLENGED THE AOS ACTION OF FRAMING THE RE-ASSTT . U/S 143(3)/147 WITHOUT ISSUING NOTICE U/S 143(3) OF THE I.T.ACT, 1961. HOWEVER, IN THE WRITTEN SUBMISSIONS DATED 1.11.2012 THE LD. AR HAS SIDE TRACK FROM THIS GROUND AND TRIED TO PROJECT THE MATTER BY TAK ING ALTOGETHER FRESH PLEA TO THE EFFECT THAT SINCE THE AO HAS FAILED TO ISSUE MANDATORY FIRST STATUTORY NOTICE U/S 143(2) WITHIN THE PRESCRIBED PERIOD, THE ENTRE RE- ASSTT. PROCEEDINGS IN QUESTION ARE VITIATED AND AR E LIABLE TO BE QUASHED BEING VOID AB INITIO, INVALID. IN THIS REGARD, IT IS PERTINENT TO POINT OUT THAT THE LD. AR CANNOT BE ALLOWED TO RAISE FRESH G ROUND WITHOUT PRESSING THE SAME UNDER THE OWN SIGNATURES OF THE APPELLANT. HOWEVER, WITHOUT ADMITTING BUT FOR THE SAKE OF ARGUMENT AND WITHOUT PREJUDICE TO ABOVE, IT IS ALSO PERTINENT TO POINTED OUT THAT PERUSAL OF PARA 6 (PAGE 1) OF THE AOS RE-ASSTT. ORDER SHOWS THAT SUBSEQ UENT TO ISSUING NOTICE U/S 148, THE FIRST STATUTORY NOTICE U/S 14 2(1) DATED 3.10.2008 WAS DULY ISSUED AND GOT SERVED ON 10.10.2008 AND D ULY COMPLIED WITH BY THE APPELLANT BY FILING SUPPLEMENTARY RETURN ON 22.10.08 IN RESPONSE THERETO. NO SUCH QUERY INSISTING FOR ISSU ING OF NOTICE U/S 143(2) WAS EVER RAISED AND TAKEN BEFORE THE LD. A. O. DURING THE RE- ASSTT. PROCEEDINGS, FURTHER, IT IS FORTHCOMING FRO M THE PERUSAL OF THE SAID PARA-6 THAT THEREAFTER, VIDE ORDER SHEET RECO RDINGS DATED 24.10.08, WHICH IS EQUIVALENT TO NOTICE U/S 143(2), THE APP ELLANTS COUNSEL ATTENDED THE PROCEEDINGS FROM TIME TO TIME. APPELL ANTS REPLIES 27.10.08 AND 6.11.08 DID NOT FIND FAVOUR WITH THE LD. A.O. AFTER GIVING ITA NO.60(ASR)/2012 4 DUE CONSIDERATION TO THE SAME. IN THE LIGHT OF THE SE DISCUSSIONS AND IN THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CAS E (SUPRA), I AM OF THE CONSIDERED OPINION THAT THE LD. AR HAS FAILED TO M AKE OUT ANY SOLID CASE ON THIS A/C. SHOWING UTMOST REGARD TO THE VAR IOUS CASE LAWS RELIED UPON BY THE APPELLANT, I AM OF THE CONSIDERED OPIN ION THAT THESE ARE FOUND TO BE INAPPLICABLE AND QUITE DISTINGUISHABLE HAVING NO DIRECT BEARING ON THE PECULIAR FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. ACCORDINGLY, THE APPELLANT FAILS ON THIS GROUND OF APPEAL NO.2 WHICH IS HEREBY REJECTED. 9. GROUND OF APPEAL NO.3 PERTAINS TO THE APPELLANT S GRIEVANCE OVER THE FACT THAT IN THE PRESENT OF APPELLANTS O RIGINAL RETURN OF INCOME DATED 18.07.01 FILED WITH ITO WARD 1(5), AM RITSAR VIDE DIARY NO.597 AND IN THE ABSENCE OF ANY FRESH MATERIAL IN AOSPOSSESSION AND HAVING BEEN BROUGHT ON RECORD, THE A.O. WAS JU STIFIED TO FORM HIS OPINION AND REASONS TO BELIEVE THAT PARTICULARS PA RT OF APPELLANTS INCOME HAS ESCAPED ASSESSMENT. HOWEVER, PERUSAL O F THE PREAMBLE PARAGRAPHS AT PAGE 1 OF THE AOS RE-ASSTT. ORDERS VIS--VIS RECORDED REASONS U/S 148 HAVING BEEN DULY INCORPORATED THER EIN ITSELF, REVEALS THAT THERE WAS A POSITIVE INFORMATION IN AOS POSS ESSION IN THE FORM OF COPY OF CHEQUE NO.77848 DT. 27.4.00 FOR RS.1049 90 DRAWN FROM BANK ACCOUNT NO.52842 WITH OBC, PUTLIGHAR, AMRITSA R IN THE NAME OF FRIENDS PORTFOLIO PVT. LTD. THAT THE APPELLANT HAS PROCURED ACCOMMODATION ENTRY BY DEPOSING EQUIVALENT UNDISCL OSED CASH DEPOSIT WITH THE PARTY AND AFTER PAYING COMMISSION @ 3% THEREON, AS PER MARKET TENDENCY PREVALENT AT THE RELEVANT POIN T OF TIME AND FURTHER, HE HAS CONCLUDED THAT INCOME TO THE EXTEN T OF RS.108140/- CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT ON THE AP PELLANTS FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESS ARY FOR HIS ASSESSMENT EVEN THOUGH TAKING INTO CONSIDERATION THE PURPORTE DLY VOLUNTARY DISCLOSURE OF PART OF SUCH RECEIPTS TO THE EXTENT OF RS.99,990/- WHICH IS ALSO NOT IN FULL. ACCORDINGLY, IN THE TOTALITY OF THESE FACTS ALREADY AVAILABLE AND EXISTING ON RECORDS AND VIEWING THE MATTER FROM ALL ANGLES, I AM OF THE CONSIDERED OPINION TO HOLD THA T THE A.O. HERE AGAIN HAS FAILED TO MAKE OUT ANY SOLID CASE OF ESTABLISH ING ITS ALLEGATION ABOUT AOS OPINION HAVING BEEN FORMED WITHOUT ANY POSITIVE MATERIAL LYING IN HIS POSSESSION. ACCORDINGLY FINDING THE A PPELLANT HAVING BEEN UTTERLY FAILED ON THIS GROUND OF APPEAL NO.3, THE SAME IS HEREBY REJECTED. ITA NO.60(ASR)/2012 5 4. MOREOVER, THE ASSESSEE WAS SERVED NOTICE UNDER SECTION 142(1) OF THE ACT, DATED 03.10.2008 IS NOT UNDER DISPUTE. IN RESP ONSE TO THE SAID NOTICE, THE ASSESSEE FILED INCOME TAX RETURN FOR THE SAID ASSE SSMENT YEAR ON 22.10.2008 VIDE RECEIPT NO.5014608 DECLARING INCOME AT RS.1,74 ,330/- AND LD. COUNSEL FOR THE ASSESSE, MR. RAMNIK ARORA, ADVOCATE AND SH . SANJIV BEHAL ATTENDED AND VIDE LETTER DATED 24.10.2008 HAS DEMANDED THE C OPY OF REASONS RECORDED FOR RE-OPENING THE ASSESSMENT PROCEEDINGS U/S 148 AND THEREAFTER THE LD. COUNSEL FOR THE ASSESSEE ATTENDED THE PROCEEDINGS F ROM TIME TO TIME AND THE ASSESSMENT WAS GOT COMPLETED BY MAKING ADDITIONS. THUS, HAVING APPEARED BEFORE THE A.O. ON VARIOUS DATES AND PARTICIPATED I N THE RE-ASSESSMENT PROCEEDINGS BEFORE FINALIZATION OF THE ASSESSMENT B Y THE A.O. AND THERE WAS NO OBJECTION REGARDING ISSUANCE AND SERVICE OF NOTI CE U/S 143(2) BEFORE THE AO. THEREFORE, REASSESSMENT MADE BY THE A.O. CANNOT BE HELD TO BE INVALID. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY REJECTED THE LEGAL GROUNDS RAISED BY THE AS SESSEE. ACCORDINGLY, WE DISMISS GROUNDS NO. 1 TO 3 OF THE ASSESSEE. 5. AS REGARDS GROUNDS ON MERIT I.E. 4 & 5, THE BRIE F FACTS ARE THAT THE ASSESSEE HAS AGITATED THE ADDITION OF RS.5,000/- WH ICH WAS RECEIVED BACK BY THE ASSESSEE AS AN ADVANCE GIVEN DURING ASSES SMENT YEAR 2000-01. THE ITA NO.60(ASR)/2012 6 ASSESSEE HAS NOT FURNISHED ANY CONFIRMATION FROM M/ S. FRIENDS PORTFOLIOS PVT. LTD. WITH REGARD TO THE CASH DEPOSIT DURING TH E FINANCIAL YEAR 1999-2000 RELEVANT TO ASSESSMENT YEAR 2001-02. THE SAID CONFI RMATION WAS NOT PRODUCED BEFORE THE LD. CIT(A) IN THE APPELLATE PRO CEEDINGS. THE AO MADE ADDITION OF THE SAID AMOUNT, WHICH WAS CONFIRMED BY THE LD. CIT(A). 6. ON HEARING THE PARTIES, WE ARE OF THE VIEW THAT THE ASSESSEE HAS RECORDED THE SAID ADVANCE IN THE PRECEDING YEAR AMO UNTING TO RS.5000/- IS NOT UNDER DISPUTE. BUT AT THE SAME TIME NO CONFIRMA TION OF THE SAID AMOUNT HAS BEEN PLACED ON RECORD BY THE ASSESSEE EITHER BE FORE THE AO OR BEFORE THE LD. CIT(A). THE ASSESSEE HAS RECEIVED THE ADVANCE B ACK. IT IS NOT THE FRESH CASH CREDIT DURING THE IMPUGNED YEAR. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, ONCE HAVING REC EIVED AN ADVANCE GIVEN IN THE EARLIER YEAR FOR WHICH NO DISPUTE HAS BEEN BROU GHT ON RECORD WITH REGARD TO THE GENUINENESS OF THE SAID ADVANCE IN THE EARLI ER YEAR BY THE REVENUE AND ALSO WHETHER THE SAME WAS ACCOMMODATING ENTRY OR NO T, THEREFORE, RECEIPT OF RS.5,000/- AS REFUND OF ADVANCE CANNOT BE TREAT ED AS AN UNEXPLAINED CASH CREDIT AND A.O. IS DIRECTED ACCORDINGLY TO DELETE THE SAID ADDITION OF RS.5,000/-. THUS, GROUNDS NO. 4 & 5 OF THE ASSESSEE ARE ALLOWED. 7. GROUND NO.6 IS GENERAL IN NATURE, THEREFORE, DOE S NOT REQUIRE ANY ADJUDICATION. ACCORDINGLY, THE APPEAL OF THE ASSES SEE IS PARTLY ALLOWED. ITA NO.60(ASR)/2012 7 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.60(ASR)/2013 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16TH JULY, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 16TH JULY, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. PANKAJ ARORA, HUF, 172, GREEN AVEN UE, AMRITSAR. 2. THE ITO WARD 5(3), ASR. 3. THE CIT(A), ASR. 4. THE CIT, ASR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.