Ritu Verma, New Delhi V. Pr. CIT, New Delhi

ITA 6427/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3161 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 16-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Keywords: Unexplained investment; Opportunity of being heard
• Section: 143(3); 147; 6; 263

Judgement Text

1 ITA NO. 6427/DEL/2016 IN THE INCOME TAX APPE LLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI G. D. AGRAWAL, PRESIDE NT AND SHRI CHANDRA MOHAN GARG, JU DICIAL MEMBER I.T.A .NO. 6427/DEL/2 016 (A.Y 2008-09) RITU VERMA 36, ARADHANA ENCLAVE, 1 ST FLOOR, SECTOR-13, R. K. PURAM NEW DELHI ACHPV5044J (APPELLANT) VS PR. CIT CENTRAL-3 NEW DELHI (RESPONDENT) APPELLANT BY SH. ARVIND KUMAR, ADV RESPONDENT BY SMT. PARAMITA TRIPATHY, CIT(DR) ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE PRINCIPAL CIT-3,(PR. CIT) NEW DELHI DATED 20/10/201 6 PASSED U/S 163 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). DATE OF HEARING 12.12.2017 DATE OF PRONOUNCEMENT 12.12.2017 2 ITA NO. 6427/DEL/2016 2. IN THIS APPEAL, ALTHOUGH THE ASSESSEE HAS RAISED AS MANY AS SIX GROUNDS BUT EXCEPT GROUND NO.1, OTHER GROUNDS ARE A RGUMENTATIVE AND SUPPORTIVE TO THE MAIN GROUND WHICH ARE READS AS FO LLOWS:- 1. THE MEMORANDUM OF APPEAL MUST BE IN TRIPLICATE A ND SHOULD BE ACCOMPANIED BY TWO COPIES (AT LEAST ONE OF WHICH SHO ULD BE A CERTIFIED COPY) OF THE ORDER APPEALED AGAINST, TWO C OPIES OF THE RELEVANT ORDER OF THE [ASSESSING OFFICER], TWO COPIES OF THE GROUNDS OF APPEAL BEFORE THE FIRST APPELLATE AUTHOR ITY, TWO COPIES OF THE STATEMENT OF FACTS, IF ANY, FILED BEF ORE THE SAID APPELLATE AUTHORITY, AND ALSO- A) IN THE CASE OF AN APPEAL AGAINST AN ORDER LEVYING PE NALTY, TWO COPIES OF THE RELEVANT ASSESSMENT ORDER; B) IN THE CASE OF AN APPEAL AGAINST AN ORDER U/S 143 (3) READ WITH SECTION 144A, TWO COPIES OF THE DIRECTIONS OF T HE [DEPUTY COMMISSIONER] U/S 144A; C) IN THE CASE OF AN APPEAL AGAINST AN ORDER U/S 143 (3) READ WITH SECTION 144B, TWO COPIES OF THE DRAFT ASSESSME NT ORDER AND TWO COPIES OF DRAFT ASSESSMENT ORDER AND TWO COPIES OF THE DIRECTIONS OF THE [DEPUTY COMMISSIONE R] U/S 144B; 3 ITA NO. 6427/DEL/2016 D) IN THE CASE OF AN APPEAL AGAINST AN ORDER U/S 143 READ WITH SECTION 147, TWO COPIES OF THE ORIGINAL ASSESS MENT ORDER, IF ANY. 3. WE HAVE HEARD ARGUMENT OF BOTH THE SIDES AND CAR EFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD OF THE TRIBU NAL INTER-ALIA IMPUGNED ASSESSMENT ORDER DATED 31/3/2016, ORDER UN DER CHALLENGE PASSED U/S 263 OF THE ACT AND PAPER BOOK OF THE ASS ESSEE CONSISTING OF 43 PAGES. 4. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THE PR INCIPAL CIT-(PR. CIT) HAS ERRED IN PASSING THE IMPUGNED ORDER AS HE HAS NOT ASSUMED JURISDICTION U/S 263 OF THE ACT FOR REVISING THE OR DER WHERE AS THE MANDATORY CONDITIONS FOR ASSUMING SUCH JURISDICTION ARE TOTALLY ABSENT. THE LD. COUNSEL VEHEMENTLY POINTED OUT THAT THE PRI NCIPAL CIT-(PR. CIT) ERRED IN ARRIVING AT A CONCLUSION WHICH IS WITHOUT ANY BASIS WHATSOEVER TO THE EFFECT THAT THE ASSESSMENT ORDER PASSED BY T HE A.O WAS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE A ND OBSERVING THAT THE ASSESSING OFFICER HELD U/S 143(3) READ WITH SECTION 147 OF THE ACT HAS PASSED WITHOUT MAKING ADEQUATE ENQUIRIES. THE LD. COUNSEL ALSO CONTENDED THAT THE PRINCIPAL CIT-(PR. CIT) IS NOT J USTIFIED IN CANCELLING 4 ITA NO. 6427/DEL/2016 THE ASSESSMENT ORDER AND DIRECTING THE A.O TO REFRA ME THE ASSESSMENT AFTER VERIFYING THE CORRECT AMOUNT OF ADDITION REQU IRES TO BE MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT WHERE AS THE SURR OUNDINGS CIRCUMSTANCES AS WELL AS DOCUMENTS PLACED ON RECORD CLEARLY ESTABLISHED THE REAL FACTS OF THE ISSUE. THE LD. COUNSEL LASTL Y SUBMITTED THAT THE PRINCIPAL CIT-(PR. CIT) WAS NOT CORRECT IN COMING T O A CONCLUSION THAT INVESTMENT MADE IN FOREIGN ENTITY BELONG TO THE APP ELLANT AND THE SAME HAS BEEN OWNED BY THE APPELLANT. 5. THE LD. COUNSEL FURTHER DRAWING OUR ATTENTION TO WARDS ORDER OF ITAT SMC BENCH DELHI DATED 12/8/2017 IN THE ASSESSE ES OWN APPEAL FOR ASSESSMENT YEAR 2008-09 IN ITA NO. 491/DEL/2017 SUBMITTED THAT ALLOWING THE APPEAL OF THE ASSESSEE. THE TRIBUNAL HAS REMANDED THE APPEAL TO THE FILE OF THE CIT(A) THAT THE DIRECTION TO DECIDE THE SAME AFRESH AFTER PROVIDING DUE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE AND TO DECIDE THE APPEAL ON MERITS AND TO PASS A SPEAKI NG ORDER, KEEPING IN VIEW THE JUDGMENT OF HON'BLE SUPREME COURT. 6. THE LD. COUNSEL FURTHER SUBMITTED THAT IN THIS O RDER, THE TRIBUNAL HAS ALSO DIRECTED THE ASSESSEE TO PRODUCE ALL THE D OCUMENTS/EVIDENCE BEFORE THE CIT(A) TO SUBSTANTIATE HER CASE ON THE ISSUE OF UNEXPLAINED 5 ITA NO. 6427/DEL/2016 INVESTMENT. THEREFORE, IF THE A.O IS ALLOWED TO FR AME ANOTHER ASSESSMENT ORDER IN PURSUANT TO THE ORDER OF PRINCIPAL CIT-(PR . CIT) U/S 263 OF THE ACT THEN IT WOULD AMOUNT TO A PARALLEL DOUBLE PROCE EDING HARASSING THE ASSESSEE. THEREFORE, THE IMPUGNED ORDER MAY KINDLY BE SET ASIDE. 7. REPLYING TO THE ABOVE, THE LD. CIT D R STRONGLY SUPPORTED THE ACTION OF THE PRINCIPAL CIT-(PR. CIT) AND SUBMITTED THAT THERE WAS NO ADEQUATE ENQUIRY BY THE A.O ON THE ISSUE OF UNEXPLA INED INVESTMENT. HENCE, THE ORDER HAS TO BE HELD AS ERRONEOUS AND PR EJUDICIAL TO THE INTEREST OF REVENUE AND THUS, THE IMPUGNED ASSESSME NT ORDER DATED 31/3/2016 WAS RIGHTLY REVISED OF ASSUMING VALID JUR ISDICTION. 8. PLACING REJOINDER THE ABOVE SUBMISSION, THE LD. COUNSEL OF THE ASSESSEE APPELLANT SUBMITTED THAT THERE WAS SUFFICI ENT ENQUIRY ON THE ISSUE OF UNEXPLAINED INVESTMENT. THEREFORE, ASSESS MENT ORDER CANNOT BE TERMED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. HOWEVER, ON BEING ASKED BY THE BENCH THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS READY TO ABIDE THE ORDER OF TH E TRIBUNAL AND TO PARTICIPATE IN THE APPELLATE PROCEEDINGS BEFORE THE CIT(A) IN PURSUANT O THE TRIBUNAL ORDER. 6 ITA NO. 6427/DEL/2016 9. ON CAREFUL CONSIDERATION OF RIVAL SUBMISSIONS, W E ARE OF THE VIEW THAT WHEN THE QUANTUM APPEAL IS PENDING BEFORE THE LD. CIT(A) IN PURSUANT TO THE DIRECTIONS OF THE TRIBUNAL AND THE ASSESSEE IS PARTICIPATING THEREIN AS PER DIRECTIONS OF THE TRIB UNAL THEN IF THE A.O IS FURTHER ALLOWED TO REFRAME ASSESSMENT ORDER IN PURS UANT TO THE ORDER OF THE PRINCIPAL CIT-(PR. CIT), U/S 263 OF THE ACT. T HEN, CERTAINLY, IT WOULD AMOUNT TO DOUBLE PROCEEDINGS. IT IS A PECULIAR SIT UATION OF THIS CASE THAT ON THE OTHER HAND, THE TRIBUNAL HAS DIRECTED THE LD . CIT(A) TO DECIDE THE APPEAL ON MERITS ON THE ISSUE OF UNEXPLAINED INVEST MENT BY ORDER DATED 17/8/2017 AND SUBSEQUENTLY, THE PRINCIPAL CIT-(PR. CIT) PROCEEDED TO REVISES THE AMOUNT ASSESSMENT ORDER U/S 263 OF THE ACT BY ALLEGING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF REVENUE. IN THE PRESENT CASE, WHEN WE CAREFULLY PE RUSED THE IMPUGNED ASSESSMENT ORDER DATED 31/3/2016 THEN WE CLEARLY OB SERVE THAT THE ASSESSING OFFICER HAS CONSIDERED THE ISSUE OF INVE STMENT OF USD 50,000/- AND ENQUIRIES HAS ALSO BEEN MADE ON THE IS SUE. FROM THE CONCLUDING PARAGRAPHS 13 TO 15 OF THE ASSESSMENT OR DER, WE OBSERVE THAT THE A.O HAS ALSO MADE PROTECTIVE ADDITION PERTAININ G TO THE INVESTMENT OF USD 50,000/- ON 13/8/2017 BY OBSERVING THAT THE SAI D AMOUNT WILL BE ADDED ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI RAJ NI KANT VERMA, THE HUSBAND OF THE ASSESSEE AND THE A.O OF SHRI VERMA W ILL BE INFORMED SO 7 ITA NO. 6427/DEL/2016 THAT NECESSARY PROCEEDINGS AGAINST HIM. THE MAIN CO NTROVERSY PICKED UP BY THE PRINCIPAL CIT-(PR. CIT) FOR REVISING THE ORD ER WAS THAT THE A.O SHOULD HAVE MAKE ADDITION ON THE ISSUE ON SUBSTANTI VE BASIS NOT AS PROTECTIVE BASIS. 10. SO FAR AS CONCLUSION DRAWN BY THE A.O IN THE IM PUGNED ASSESSMENT ORDER IS CONCERNED. WE REFRAIN TO MAKE ANY COMMENT ON MERITS ON THE ORDER OF THE A.O. HOWEVER, FROM PERUSAL OF THE ORD ER AND DOCUMENTS FILED BY THE ASSESSEE BEFORE A.O WHICH HAVE ALSO BE EN PLACED BEFORE US IN THE SHAPE OF PAPER BOOK. WE ARE SATISFIED, THAT TH E A.O NOT ONLY PICKED UP THE ISSUE OF INVESTMENT OF 50,000/- USD BUT ALSO MADE ENQUIRIES ON THE ISSUE AND AFTER TAKING RECORD EXPLANATION AND D OCUMENTS FILED BY THE. THE A.O MADE ADDITION OF SAME AMOUNT ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE INTIMATING THE A.O OF SHRI VERMA I. E. HUSBAND OF THE ASSESSEE ASKING HIM TO TAKE APPROPRIATE ACTION IN T HIS REGARD IN THE CASE OF SHRI VERMA. IN THIS SITUATION, WE DECLINE TO AC CEPT CONTENTION OF THE PRINCIPAL CIT-(PR. CIT) THAT THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. AS WHEN THERE IS ADEQUATE ENQ UIRY AND THE A.O HAS MADE ADDITION ON PROTECTIVE BASIS IN THE HANDS OF T HE ASSESSEE AND FURTHER DIRECTED THE A.O HER HUSBAND TO TAKE APPROP RIATE ACTION IN THE CASE OF ASSESSEES HUSBAND WHEREIN SUBSTANTIAL ADDI TION WAS TO BE MADE 8 ITA NO. 6427/DEL/2016 THEN THE CONCLUSION DRAWN BY THE ASSESSING OFFICER OF THE PRESENT ASSESSEE CANNOT BE ALLEGED AS ERRONEOUS AND PREJUDI CIAL TO THE INTEREST OF REVENUE. 11. IN VIEW OF FOREGOING DISCUSSION, WE REACH TO A LOGICAL CONCLUSION THAT THE ORDER PASSED BY THE A.O WAS NOT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND THUS WE HOLD THAT THE P RINCIPAL CIT-(PR. CIT) WAS NOT HAVING VALID JURISDICTION U/S 263 OF THE AC T FOR REVISING THE IMPUGNED ASSESSMENT ORDER. AT HIS JUNCTURE, WE ALS O FIND IT APPROPRIATE TO REFER RATIO OF THE DECISION OF HON'BLE SUPREME C OURT IN THE CASE OF MALABAR INDUSTRIES COMPANY LTD. VS. CIT 109 TAXMAN. 66 (SC) WHEREIN THEIR LORDSHIP HELD THAT THE COMMISSIONER U/S 263 O F THE ACT CANNOT REVISE THE ASSESSMENT ORDER MERELY BECAUSE HE IS NO T AGREE TO THE CONCLUSION DRAWN BY THE A.O WHICH IS SUBSTANTIAL AN D OUT OF TWO POSSIBLE VIEWS. 12. IN THE PRESENT CASE, ON THE ORDERS OF AFOREGOIN G DISCUSSION, NO HESITATION TO HELD THAT THE PRINCIPAL CIT-(PR. CIT) PROCEEDED TO REVISE THE ASSESSMENT ORDER U/S 263 OF THE ACT WITHOUT ANY JUS TIFIED REASONING AND VALID BASIS. THEREFORE, IMPUGNED ORDER OF PRINCIPA L CIT-(PR. CIT) IS NOT SUSTAINABLE AND THE SAME IS BAD IN LAW AND HENCE WE QUASH THE SAME. 9 ITA NO. 6427/DEL/2016 13. BEFORE WE PART WITH THE ORDER WE FIND IT NECESS ARY AND APPROPRIATE TO DIRECT THE PRINCIPAL CIT-(PR. CIT) TO PASS THE A PPROPRIATE ORDER IN PURSUANT TO THE ORDER OF THE TRIBUNAL DATED 17/8/20 17 (SUPRA) AFTER ALLOWING DUE OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE AND DIRECTING HIM TO DECIDE THE APPEAL EARLIEST POSSIBLE. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 12.12.20 17 SD/- SD/- (G. D. AGRAWAL) (C. M GARG) PRESIDENT JUDICIAL MEMBER DATED: 12/12/2017 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 10 ITA NO. 6427/DEL/2016 DATE 1. DRAFT DICTATED ON 14.10.2017 PS 2. DRAFT PLACED BEFORE AUTHOR 15.10.2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 18.12.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 18.12.2017 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. 11 ITA NO. 6427/DEL/2016