The Income-tax Officer, Amritsar. V. Sh. Ravinder Kumar Sachdeva Prop, Amritsar.

ITA 616/ASR/2011

• Counselvise Citation: 61620914 RSA 2011
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-09-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 21-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SAT PAL NARANG
• Keywords: Reassessment proceedings
• Section: 133(6); 147; 148

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. 615 & 616(ASR)/2011 ASSESSMENT YEARS:2002-03 & 2003-04 PAN :AILPS9469A THE INCOME TAX OFFICER, VS. SH. RAVINDER KUMAR SAC HDEVA WARD 3(3), AMRITSAR. PROP. M/S. RAM NATH & SONS, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. TARSEM LAL, DR RESPONDENT BY:SH. SAT PAL NARANG, ADV. DATE OF HEARING:06/09/212 DATE OF PRONOUNCEMENT:11/09/2012 ORDER PER BENCH ; THESE TWO APPEALS OF THE REVENUE ARISE FROM THE CO NSOLIDATED ORDER OF THE CIT(A), AMRITSAR, DATED 24.10.2011 FOR THE ASSE SSMENT YEARS 2002-03 & 2003-04 RESPECTIVELY. 2. THE GROUNDS RAISED BY THE REVENUE IN ITA NO.615( ASR)/2011 ARE AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW IN HOLDING THAT THE PROCEED INGS ITA NOS. 615 & 616(ASR)/2011 2 INITIATED U/S147 OF THE INCOME TAX ACT ARE NOT JUST IFIED ON THE BASIS OF PRESENT STATUS OF THE ORDER PASSED BY THE SECRETARY PUNJAB MANDI BOARD, PARTICULARLY WHEN THERE IS NO D ENIAL OF THE FACT THAT THE ASSESSEE HAS NOT MARKETED AGRICULTURE PRODUCE OUT OF THE BOOKS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS NOT APPRECIATED THE ARGUMENTS OF THE ASS ESSING AUTHORITY BEFORE THE SECRETARY PUNJAB MANDI BOARD, CHANDIGARH THAT THE ORDER PASSED BY THE ASSESSING A UTHORITY, MARKET COMMITTEE, AMRITSAR IS PERFECTLY LEGAL AND V ALID AND IS MAINTAINABLE AS PER LAW. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.5,57,385/- MADE ON ACCOUNT OF EXTRA COMMISSION E ARNED BY THE ASSESSEE. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF. 3. IN ITA NO.616(AS)/2011, THE REVENUE AS RAISED FO LLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN LAW IN HOLDING THAT THE PROCEED INGS INITIATED U/S147 OF THE INCOME TAX ACT ARE NOT JUST IFIED ON THE BASIS OF PRESENT STATUS OF THE ORDER PASSED BY THE SECRETARY PUNJAB MANDI BOARD, PARTICULARLY WHEN THERE IS NO D ENIAL OF THE FACT THAT THE ASSESSEE HAS NOT MARKETED AGRICULTURE PRODUCE OUT OF THE BOOKS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS NOT APPRECIATED THE ARGUMENTS OF THE ASS ESSING AUTHORITY BEFORE THE SECRETARY PUNJAB MANDI BOARD, CHANDIGARH THAT THE ORDER PASSED BY THE ASSESSING A UTHORITY, MARKET COMMITTEE, AMRITSAR IS PERFECTLY LEGAL AND V ALID AND IS MAINTAINABLE AS PER LAW. ITA NOS. 615 & 616(ASR)/2011 3 `3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.16,27,200/- MADE ON ACCOUNT OF EXTRA COMMISSION EARNED BY THE ASSESSEE. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DI SPOSED OFF. 4. THE FACTS AS APPEARING IN THE ORDER OF THE AO FO R THE ASSESSMENT YEAR 2002-03 ARE AS UNDER: SH. RAVINDER KUMAR SACHDEVA PROP. M/S. RAM NATH & SONS WAS ENGAGED IN THE BUSINESS OF MARKETING OF AGRICUL TURE PRODUCE ON COMMISSION BASIS DURING THE FINANCIAL YE AR 2001-02. THE TOTAL TRANSACTIONS MADE IN RESPECT OF ITS BUSIN ESS ACTIVITIES WERE TO THE TUNE OF RS.2,52,21,600/-. THE COMMISSIO N ON THESE TRANSACTION @ 5% AMOUNTED TO RS.12,61,080/-. THE AS SESSEE IN THE RETURN FILED HAS SHOWN COMMISSION OF RS.7,03,69 5/-. THERE HAS THUS BEEN SUPPRESSION OF COMMISSION INCOME BY T HE ASSESSEE TO THE TUNE OF RS.5,57,385/- DURING THE FI NAICAL YEAR 2001-02 RELEVANT FOR THE ASSESSMENT YEAR 2002-03. THE ASSESSEE FURTHER SUBMITTED THAT HIS CASE WAS TH OROUGHLY INVESTIAGED BY THE SENIOR OFFICER OF THE STATE GOVE RNMENT BY CONDUCTING AN ENQUIRY DATED 21.4.2005 AND THE ASSES SMENT ORDER PASSED BY SH. BALJIT SINGH MAHAL, FORMERLY SE CRETARY MARKET COPMMITTEE, AMRITSAR WAS SET ASIDE ON 11.5.2 006 MUCH EARLIER THAN DATED 25.3.2009 ON WHICH THE LD. AO FO RMED THE BELIEF. HE FURTHER STATED THAT HIS CASE HAS NOT BEE N REMANDED FOR RECONSIDERATION. THE ASSESSEE HAS ALSO REFERRED TO ENQUIRY REPORT AND THE ORDER OF PRINCIPAL SECRETARY TO GOVT. OF PU NJAB (DEPARTMENT OF GRIEVANCES), CHANDIGARH. HE ALSO STA TED THAT HIS CASE FOR THE ASSESSMENT YEAR 2001-02 WHICH WAS REOP ENED U/S 147 WAS FILED ON TWO GROUND ONE OF WHICH IS THE SA ME AS HAS BEEN MENTIONED IN THE REASON FOR THE A.Y. 2002-03. ITA NOS. 615 & 616(ASR)/2011 4 THE ADDITIONAL SECRETARY, GOVT. OF PUNJAB (DEPARTM ENT OF GRIEVANCES AND PENSIONS) AFTER CONSIDERING THE ENQU IRY REPORT IN THE CASE OF SH. RAVINDER SACHDEVA ( M/S. RAM NAT H & SONS), THE ASSESSEE UNDER REFERENCE HAS WRITTEN D.O . LETTER TO THE SECRETARY PUNJAB MANDI BOARD, SECTOR 17M, CHAND IGARH SAYING THEREIN THAT THE ORDERS PASSED BY THE SECRET ARY MARKET COMMITTEE HAS BEEN SET ASIDE. THE COPY OF ANOTHER D .O. LETTER OF PRINCIPAL TO GOVT. OF PUNJAB DEPARTMENT OF GREIV ANCES CHANDIGARH, DATED 11.5.2006 FILED BY THE ASSESSEE R EVAEALS THAT THE ASSESSMENT ORDER PASSED BY SH. BALJIT SINGH MAH AL, FORMERLY SECRETARY MARKET COMMITTEE, AMRITSAR, HAS BEEN SET ASIDE. THE ORDERS AS SUCH HAVE NOT YET BECOME FINAL . THERE BEING INFORMATION OF ASSESSEES HAVING MARKETED AG RICULTURE PRODUCE OF RS.2,52,21,600/- THE PROCEEDINGS U/S 147 HAVE RIGHTLY BEEN INITIATED. THE FACT THAT THE ASSESSMEN T ORDER OF THE MARKET COMMITTEE WERE SET ASIDE BEFORE INITIATING P ROCEEDINGS U/S 147 CANNOT BE GIVEN ANY COGNIZANCE. THE ASSESSEE HAS NOT PRODUCED ANY EVIDENCE WHICH MA Y SUGGEST THAT IT HAS NOT MARKETED AGRICULTURAL PRODUCE TO TH E TUNE OF RS.2,52,21,600/- WHICH HAS BEEN MADE THE BASIS OF L EVY OF MARKET FEE ETC. BY THE SECRETARY, MARKET COMMITTEE ARE NOT IN ORDER DOES NOT ABSOLVE THE ASSESSEE FROM ITS RESPO NSIBILITY TO PROVE THAT THE VALUE OF AGRICULTURAL PRODUCE MARKET ED BY IT IS LESS THAN THAT TAKEN BY THE SECRETARY, MARKET COMMI TTEE, AMRITSAR FOR DETERMINING THE MARKET FEE PAYABLE BY THE ASSESSEE. THUS, THE TOTAL AGRICULTURAL PRODUCE MARKETED BY T HE ASSESSEE DURING THE FINANCIAL YEAR 2001-02 RELEVANT FOR THE ASSESSMENT YEAR 2002-03 IS TAKEN AT RS.2,52,21,600/- AND COMMI SSION EARNED THEREON AT RS.12,61,080/-. AN ADDITION OF RS .5,57,385/- (RS.12,61,080-7,03,695) IS, THEREFORE, MADE TO THE DECLARED INCOME. ITA NOS. 615 & 616(ASR)/2011 5 5. FOR THE ASSESSMENT YEAR 2003-04, THE FACTS ARE I DENTICAL AS IN THE ASSESSMENT YEAR 2002-03 IN ITA NO.615(ASR)/2011 REP RODUCED HEREINABOVE, EXCEPT THE ADDITION HAS BEEN MADE AT RS.16,27,200/- . 6. THE LD. CIT(A) VIDE PARA 8.2 OF HIS ORDER DELETE D THE ADDITION MADE BY THE AO IN BOTH THE YEARS AND HIS OBSERVATIONS FO R THE SAKE OF CLARITY IN PARA 8.2. ARE REPRODUCED HEREUNDER: 8.2.FROM THE PERUSAL OF THE ABOVE JUDGMENT/EXECUTI VE ORDERS, IT IS ABUNDANTLY CLEAR THAT SINCE THE IMPUGNED ORDERS OF THE FORMER SECRETARY, MARKET COMMITTEE, AMRITSAR, HAVE BEEN QU ASHED/SET ASIDE BY THE SUPERIOR EXECUTIVE AUTHORITIES, TO BE REFRAM ED AFRESH, FROM WHICH IT CAN BE SAFELY INFERRED AND TRANSPIRED THA T THE VERY BASIS FOR PASSING IMPUGNED REASSESSMENT DOES NOT EXIST HAVING BEEN SET ASIDE AND QUASHED TO BE REFRAMED, THE TRADING ADDITIONS O F RS.5,57,385/- FOR THE A.Y. 2002-03 AND RS.16,27,000/-FOR THE ASSESSME NT YEAR 2003-04 MADE IN THE APPELLANTS CASE, WOULD NOT SURVIVE BEI NG NON-EST, UNUTILIZED. IT IS ALSO RELEVANT TO POINT OUT THAT E VEN DURING THE REASSESSMENT PROCEEDINGS, THE AO HAS NOT ENDEAVOURE D TO ASCERTAIN LATEST STATUS OF THE APPELLANTS MARKET COMMITTEE F EE CASE FROM THE CONCERNED QUARTERS BY WAY OF CARRYING OUT VERIFICA TION U/S 133(6) WHILE MAKING THE IMPUGNED REASSESSMENT ORDER, SO AS TO ENSURE PASSING A SELF CONTAINED AND SELF SPEAKING ORDER IN ORDER TO SAFEGUARD THE INTEREST OF REVENUE. ACCORDINGLY, IN THE ABSEN CE OF ANY FINALITY, AND ALSO DUE TO LACK OF ANY ADVERSE INFORMATION HA VING BEEN PROCURED, PROVIDED AND BROUGHT ON RECORD OF THIS OF FICE BY THE A.O. DURING THE APPELLATE PROCEEDINGS, AS OF NOW THE IM PUGNED ADDITIONS, DISCUSSED SUPRA, WOULD NOT SURVIVE TO BE PREVAILED UPON THE APPELLANT. UNDER THESE FACTS AND CIRCUMSTANCES I AM OF THE CON SIDERED VIEW THAT THERE IS NO JUSTIFICATION TO UPHOLD THE AOS ACTIO N, THEREFORE, THE ADDITIONS OF RS.5,57,385/- FOR THE A.Y. 2002-03 AND RS.16,27,200/- FOR THE A.Y. 2003-04 MADE BY THE AO ARE HEREBY DEL ETED. 7. THE LD. DR, MR. TARSEM LAL, ARGUED THAT THE AO H AD ISSUED NOTICE U/S 148 ON THE BASIS OF MATERIAL FACTS AND ORDER OF THE SECRETARY, MARKET ITA NOS. 615 & 616(ASR)/2011 6 COMMITTEE, AMRITSAR, HAS BEEN REVERSED BY THE SECRE TARY, PUNJAB MANDI BOARD ON DIFFERENT ACCOUNT. SIMILARLY, THE HONBLE PUNJAB & HARYANA HIGH COURT, HAS ALSO SET ASIDE THE ORDER OF THE SECRETAR Y, PUNJAB MANDI BOARD ON DIFFERENT ACCOUNT AND NOT ON THE FACTS. THEREFORE, THE ORDER OF THE SECRETARY, PUNJAB MANDI BOARD AND THE ORDER OF THE HONBLE PUN JAB & HARYANA HIGH COURT IN THE CASE OF THE ASSESSEE ITSELF SHALL NOT BE APPLICABLE IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE. HE FURTHER ARG UED EVEN IF THE ASSESSMENT BY THE MARKET COMMITTEE, AMRITSAR, HAS NOT BEEN MAD E WITHIN ONE MONTH, AS DIRECTED BY THE SECRETARY, PUNJAB MANDI BOARD OR WITHIN THREE MONTHS AS DIRECTED BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN ASSESSEES OWN CASE, WILL NOT EFFECT THE DECISION OF THE ASSESSING OFFICER. HE ACCORDINGLY PRAYED THAT INSPITE OF THE FACT, NO DECISION HAVING BEEN MADE BY THE SECRETARY, MARKET COMMITTEE, AMRITSAR, AS PER DIREC TIONS OF THE SECRETARY, PUNJAB MANDI BOARD OR HONBLE PUNJAB & HARYANA HIGH COURT, CANNOT CHANGE THE DECISION OF THE AO PASSED IN THE PRESENT CASE AND THE ORDER OF THE AO WILL SURVIVE AND ACCORDINGLY PRAYED TO REVERSE T HE ORDER OF THE LD. CIT(A), WHICH IS BAD IN LAW. 8. THE LD. COUNSEL FOR THE ASSESSEE, SH. S.P. NARAN G, ADVOCATE, INVIED OUR ATTENTION TO HIS WRITTEN SUBMISSIONS AND THE JU DGMENT OF THE HONBLE ITA NOS. 615 & 616(ASR)/2011 7 PUNJAB & HARYANA HIGH COURT IN ASSESSEES OWN CASE AND RELIED UPON THE DECISION OF THE LD. CIT(A) ACCORDINGLY. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE ARE CONVINCED WITH THE ARGUMENTS MADE BY SH. SAT PAL NARANG, ADVOCATE AND THE FINDINGS OF THE LD. CIT(A) THAT SI NCE THE VERY BASIC INFORMATION PROCURED IN THE FORM OF ORDER OF THE SE CRETARY, PUNJAB MANDI BOARD, MARKET COMMITTEE, AMRITSAR, HAVE ALREADY BEE N SET ASIDE BY THE SUPERIOR AUTHORITY AND WHICH HAVE BECOME NON-EST. A LSO THE HONBLE PUNJAB & HARYANA HIGH COURTS DOUBLE BENCH ORDER DATED 17. 08.2011 IN LPA NO. 570 OF 2011 ( O & M ) IN THE ASSESSEES OWN CASE WH EREBY NOT ONLY JUDGMENT DATED 6.12.2010 OF THE LD. SINGLE JUDGE HA S BEEN SET ASIDE BUT ALSO ORDERS OF THE SECRETARY, PUNJAB MANDI BOARD, MARKET COMMITTEE, AMRITSAR, HAVE BEEN QUASHED THEREBY REMANDING BACK THE MATTE R OF THE ASSESSING AUTHORITY WITH THE DIRECTIONS TO FRAME THE ASSESSME NTS EXPEDITIOUSLY IN ACCORDANCE WITH LAW WITHIN THREE MONTHS AFTER HEARI NG THE PARTIES. THE SECRETARY, PNJAB MANDI BOARD, CHANDIGHARS OFFICE O RDERS NO.698(2004) WHEREIN THE ORDERS OF THE FORMER SECRETARY, THE THE N ASSESSING OFFICER, MARKET COMMITTEE, AMRITSAR HAVE BEEN SET ASIDE FOR THE ASSESSMENT YEARS 2000-01, 2001-02, 2002-03 & 2003-04. IT WAS ALSO AR GUED THAT DETAILED ITA NOS. 615 & 616(ASR)/2011 8 INQUIRY HAD BEEN CONDUCTED BY THE PUNJAB GOVT. WHE RE AFTER CONDUCTING THE DETAILED INQUIRY, THE ORDER OF THE LOWER AUTHORITY, HAD BEEN SET ASIDE AS PER PAPER BOOK PAGES A-18 & A-19. AS REGARDS THE ARGUM ENTS MADE BY THE LD. DR, MR. TARSEM LAL THAT THE ORDER OF THE SECRETARY, PUNJAB MANDI BOARD, CHANDIGARH IS ON DIFFERENT ACCOUNT WHICH HAD SET ASIDE THE ORDER OF THE ASSESSING AUTHORITY IS NOT FOUND CONVINCING. ALSO, THE ARGUMENT OF THE LD. DR, MR. TARSEM LAL THAT THE JUDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT SETTING ASIDE THE ORDER OF THE SINGLE JU DGE AND ALSO SECRETARY, PUNJAB MANDI BOARD, MARKETT COMMITTEE, AMRITSAR, WH ERE THE MATTER HAD BEEN REMANDED BACK TO THE ASSESSING AUTHORITY WITH THE DIRECTION TO FRAME ASSESSMENT EXPEDITIOUSLY IN ACCORDANCE WITH LAW WIT HIN THREE MONTHS AFTER HEARING THE PARTIES, WILL NOT EFFECT THE ORDER OF T HE ASSESSING OFFICER, IS NOT FOUND CONVINCING BY US. SINCE THE ASSESSING AUTHORI TY HAS NOT ADHERED TO PASSING OF THE ORDER AS PER DIRECTION OF THE SECRET ARY, PUNJAB MANDI BOARD AND THE JUDGMENT OF THE HONBLE PUNJAB & HARYANA HI GH COURT, IN THE PRESENT CASE WITHIN THREE MONTHS AFTER HEARING THE PARTIES AND NOTHING HAS BEEN BROUGHT ON RECORD BY THE LD. DR, EVEN THE LATE ST STATUS OF THE ASSESSEES MARKET COMMITTEE FEES CASE, THERE IS NO ALTERNATIVE LEFT WITH THE LD. CIT(A) BUT TO GIVE THE FINDING THAT THE VERY BA SIS FOR PASSING IMPUGNED REASSESSMENT DID NOT EXIST HAVING BEEN SET-ASIDE. T HE LD. CIT(A) THEREFORE, ITA NOS. 615 & 616(ASR)/2011 9 HAS RIGHTLY DELETED THE TRADING ADDITIONS OF RS.5,5 7,385/- FOR THE ASSESSMENT YEAR 2002-03 & RS.16,27,200/- FOR THE ASSESSMENT YE AR 2003-04. WE FIND NO INFIRMITY IN HIS ORDER. THUS, BOTH THE APPEAL OF T HE REVENUE ARE DISMISSED. 10. IN THEE RESULT, BOTH THE APPEALS OF THE REVENU E IN ITA NOS. 615 & 616(ASR)/2011 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11TH SE PTEMBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11TH SEPTEMBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. RAVINDER KUMAR SACHDEVA, AMRITSAR . 2. THE ITO WARD 3(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.