ACIT, Trichy V. Smt. M.Vijayabharathi, Trichy

ITA 643/CHNY/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0774 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2013
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 26-02-2013
• Assessment Year: 1999-2000
• Appeal Filed On: 11-04-2011
• Court: TRIBUNAL
• Department Lawyers: MDS; S DASGUPTA ITA
• Assessee Lawyers: V D GOPAL
• Keywords: Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH CHENN AI BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER .. ITA NO.1188/MDS./2011 ASSESSMENT YEAR:1999-2000 MRS.M.VIJAYABHARATHI, ANANDHA DHALL & FLOUR MILLS, C-49, 9 TH CROSS, WEST EXTN., THILLAINAGAR, TRICHY 620 018. VS. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE IV, RANGE IV,NO.44,WILLIAMS ROAD, CANTONMENT, TRICHY-1. PAN AANPB 8460 A (APPELLANT) (RESPONDENT) ITA NO.643/MDS./2011 ASSESSMENT YEAR:1999-2000 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE IV, RANGE IV,NO.44,WILLIAMS ROAD, CANTONMENT, TRICHY-1. VS. MRS.M.VIJAYABHARATHI, ANANDHA DHALL & FLOUR MILLS, C-49, 9 TH CROSS, WEST EXTN., THILLAINAGAR, TRICHY 620 018. PAN AANPB 8460 A (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI V.D.GOPAL ADVOCATE REVENUE BY : SHRI S.DASGUPTA ITA. 1188 & 643/MDS/11 2 DATE OF HEARING : 26.02.13 DATE OF PRONOUNCEMENT : 26. 02.13 O R D E R PER ABRAHAM P GEORGE, ACCOUNTANT MEMBER : THESE CROSS-APPEALS BY THE ASSESSEE AND THE REVE NUE RESPECTIVELY ARE DIRECTED AGAINST AN ORDER DATED 10 .01.2011 OF CIT(A),TIRUCHIRAPALLI. ASSESSEES APPEAL HAS BEEN FILED LATE BY 74 DAYS. CONDONATION PETITION HAS BEEN FILED. REASONS SHOWN ARE JUSTIFIED AND HENCE, DELAY IS CONDONED AND APPEAL A DMITTED. SINCE REVENUE ASSAILS THE ORDER OF THE CIT(A) INSOF AR AS HE HELD THE REOPENING DONE FOR THE IMPUGNED ASSESSMENT YEAR TO BE INVALID, ITS APPEAL IS TAKEN UP FIRST FOR DISPOSA L. 2. SHORT FACTS APROPOS OF THE FACT ARE THAT ASSESS EE HAD FILED ITS RETURN FOR IMPUGNED ASSESSMENT YEAR ON 25.06.19 91 ADMITTING AN INCOME OF ` 6,72,470/- AND AN AGRICULTURAL INCOME OF ` 40,000/-. THE SAID RETURN WAS PROCESSED UNDER SECT ION 143(1) OF THE ACT ON 28.10.99. THEREAFTER, ASSESSMENT WA S REOPENED BY THE ASSESSING OFFICER BY ISSUING NOTICE UNDER SE CTION 148 OF THE ACT ON 30.03.04. REASON GIVEN FOR THE REOPENIN G WAS AS UNDER:- DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMEN T YEAR 1999-2000, YOU HAD CLAIMED AGRICULTURAL INCOME OF ` 40,000/- FROM THE LAND MEASURING 1.5 ACRES AT ARIYAMANGALAM OWNED BY YOU AND YOUR SPOUSE . WHEN HALF SHARE ITA. 1188 & 643/MDS/11 3 OF THE LAND BELONGS TO YOUR HUSBAND, THE AGRICULTUR AL INCOME SHOULD ONLY BE HALF OF THIS AMOUNT. HENCE, 50% OF THIS AGRICULTUR AL INCOME SHOULD BE ASSESSED AS INCOME FROM OTHER SOURCES. IN ORDER TO ASSESS THE INCOME, WHICH ESCAPED ASSESSMENT, YOUR ASSESSMENT WAS REOPE NED UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 SUCH RE- ASSESSMENT WAS COMPLETED RESTRICTING THE A GRICULTURAL INCOME OF THE ASSESSEE TO ` 30,000/- AND CONSIDERING THE BALANCE UNDER THE HEAD INCOME FROM OTHER SOURCES. THERE W ERE CERTAIN OTHER ADDITIONS FOR INVESTMENTS CONSIDERED AS NOT DISCLOSED IN BOOKS, FOR A BUILDING KNOWN AS ANANDA TOWERS CONS TRUCTED BY THE ASSESSEE. 3. ASSESSEE MOVED IN APPEAL BEFORE THE CIT(A), ASS AILING THE REOPENING AS ALSO THE REFERENCE TO THE VALUATION CE LL IN RESPECT OF ITS INVESTMENT IN THE BUILDING. AS PER THE ASSESSE E,REPORT OF THE VALUATION CELL WAS CONSIDERED WITHOUT REJECTING THE BOOKS OF ACCOUNTS. 4. CIT(A) AFTER CONSIDERING THE AVERMENTS REACHED AN OPINION THAT ASSESSEE WAS REPORTING HORTICULTURAL INCOME SI NCE ASSESSMENT YEAR 1995-96 AND SUCH INCOME WAS FROM LAND OWNED BY THE ASSESSEE JOINTLY WITH HER SPOUSE. AS PER LD. CIT(A), THERE WAS NO FRESH MATERIAL OR EVIDENCE TO SHOW ANY ITA. 1188 & 643/MDS/11 4 ESCAPEMENT OF INCOME. CIT(A) THEREFORE, CAME TO CO NCLUSION THAT THE REOPENING WAS RESORTED TO ON A MERE CHANGE OF OPINION. HE THEREFORE, HELD THE REOPENING TO BE BAD IN LAW. SI NCE HE HELD THE REOPENING TO BE BAD IN LAW, HE DID NOT ADJUDICATE O N THE OTHER ISSUES RAISED BY THE ASSESSEE. 5. NOW BEFORE US, LD. DEPARTMENTAL REPRESENTATIVE STRONGLY ASSAILING THE ORDER OF THE CIT(A) SUBMITTED THAT IT WAS NOT A CASE OF REOPENING WHERE ORIGINAL ASSESSMENT WAS COMPLETE D AFTER SCRUTINY. HERE, THERE WAS NO ASSESSMENT AT ALL. TH E RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1)( A) OF THE ACT. THEREFORE, ACCORDING TO HIM, THE ASSESSING OF FICER WAS JUSTIFIED IN RESORTING TO A REOPENING. RELIANCE WA S PLACED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF ACIT VS. RAJESH JAVERI STOCK BROKER PVT LTD. ( 291 ITR 500 ). 6. PER CONTRA LD. A.R SUBMITTED THAT THERE WAS NO REASON FOR REOPENING, SINCE THERE WAS NO MENTION OF ANY ESCAP EMENT OF INCOME FROM ASSESSMENT. ASSESSING OFFICER HAD SIMP LY OBSERVED THAT 50% OF AGRICULTURAL INCOME SHOULD BE ASSESSED AS INCOME FROM OTHER SOURCES. ACCORDING TO HIM, IT. COULD N OT BE STATED THAT ANY INCOME ESCAPED ASSESSMENT, FROM SUCH OBSERVATIO N. ITA. 1188 & 643/MDS/11 5 THEREFORE, ACCORDING TO HIM, CIT(A) WAS JUSTIFIED I N HOLDING THAT RE-ASSESSMENT PROCEEDINGS WERE NOT VALIDLY INITIATE D. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. HONBLE APEX COURT IN TH E CASE OF RAJESH JAVERI STOCK BROKER PVT LTD.(SUPRA), IN RELA TION TO A REOPENING DONE WHERE THE RETURN WAS ORIGINALLY PRO CESSED UNDER SECTION 143(1), HAD HELD THAT IF THE A.O. FOR WHATE VER REASON, HAD REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMEN T, THEN IT CONFERRED JURISDICTION TO RE-OPEN THE ASSESSMENT. THEIR LORDSHIPS FURTHER HELD THAT THE ONLY REQUIREMENT WAS SATISFAC TION OF THE INGREDIENTS MENTIONED IN SEC.147. ONLY CONDITION TH AT IS REQUIRED IS A CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCOME HAD ESCAPED ASSESSMENT. THE QUESTION BEFORE US IS WHET HER THE ABOVE REQUIREMENT IS SATISFIED. REASONS RECORDED BY THE ASSESSING OFFICER HAS BEEN REPRODUCED BY US AT PAR A TWO ABOVE. IN OUR OPINION, JUST BECAUSE THE ASSESSEE H AD SHOWN AGRICULTURAL INCOME ARISING OUT OF LAND, PARTLY BEL ONGING TO HER HUSBAND ALSO, IT CANNOT BE CONCLUDED THAT THERE WAS ESCAPEMENT OF ANY INCOME FROM ASSESSMENT. THERE IS NO JUSTIFICATION OR CAUSE TO KNOW OR SUPPOSE THAT 50% OF AGRICULTURAL INCOME WAS TO BE ASSESSED UNDER THE HEAD INCOME FR OM OTHER ITA. 1188 & 643/MDS/11 6 SOURCES. THIS WAS ONLY A PRESUMPTION TAKEN BY THE ASSESSING OFFICER. HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S.SADDIQUE LEATHERS VS. CIT MADURAI (TCA 38 OF 2006 DATED 10.07.2012) AS ALSO IN THE CASE OF CIT VS. E.GNANAM , (TCA 1109 & 1110 OF 2005 DATED 23.07.2012) HAS HELD THA T EVEN IF THERE WAS NO REGULAR ASSESSMENT ORIGINALLY, WHERE A SSESSEE HAD FILED A RETURN, PROCEEDINGS INITIATED UNDER SECTIO N 147 OF THE ACT, COULD ONLY BE CONSIDERED AS AN ASSESSMENT OF ESCAP ED INCOME. EVEN FOR SUCH REASSESSMENT, THE PARAMETERS, NORMALL Y APPLIED FOR A REASSESSMENT WILL APPLY. LORDSHIPS HELD THAT WHEN THE VERY BASIS FOR ASSUMING JURISDICTION IS ABSENT, AN ORDE R PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT IS WITHOUT JUR ISDICTION. WE ARE THEREFORE OF THE OPINION THAT CIT(A) WAS JUSTIFIED IN HOLDING THE REASSESSMENT TO BE BAD IN LAW. NO INTERFERENCE IS CALLED FOR. APPEAL OF REVENUE IS DISMISSED. 8. SINCE THE APPEAL OF THE REVENUE IS DISMISSED, APPEAL FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS, ESPECIALLY SO SINCE CIT(A) HAD ALLOWED THE APPEAL FILED BY THE ASSESSE E IN TOTO. ITA. 1188 & 643/MDS/11 7 9. TO SUMMARISE, BOTH THE APPEALS FILED BY ASSESSE E AND REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF HEARING ON 26 TH FEBRUARY, 2013 . SD/- SD/- (S.S.GODARA) (ABRAHAM P GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED 26 TH FEBRUARY, 2013 . K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE ITA. 1188 & 643/MDS/11 8