Mr. Vijay Pratap Singh, GONDA V. ITO, GONDA

ITA 648/LKW/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1648 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-02-2013
• Assessment Year: misc
• Appeal Filed On: 25-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: A R SHUKLA
• Keywords: Reopening of assessment
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI J SUDHAKAR REDDY , ACCOUNTANT MEMBER ITA NO. 648/LKW/2011 ASSESSMENT YEAR: 1997 - 98 MR. VIJAI PRATAP SINGH VILL. HINDUSINGH PURWA BHITAURA, MANKAPUR, GOND A V. THE INCOME - TAX OFFICER GONDA PAN: AUYPS8657B (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. A.R. SHUKLA, ADVOCATE RESPONDENT BY: SMT. RANU BISWAS, D.R. DATE OF HEARING: 13.03.13 DATE OF PRONOUNCEMENT: 15.03.13 O R D E R PER S UNIL KUMAR YADAV : THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) ON VARIOUS GROUNDS, WHICH ARE AS UNDER: - 1 . THAT THE ID. ASSESSING OFFICER HAS ERRED IN INITIATING THE PROCEEDINGS U/S 147/148 AND THE NOTICE U/S 148 AND CONSEQUENT PROCEEDINGS ARE BAD AND ILLEGAL AND THE ID. COMMISSIONER OF INCOME - TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF ID. ASSESSING AUTHORITY IN THIS REGARD UNDER THE FACTS AND CIRCUMSTANCES. 2 . T HAT THE ID. ASSESSING AUTHORITY HAS ERRED IN MA KING ADDITION OF RS. 2,10,000.00 PERTAINING TO RECEIPTS FROM : - 2 - : GROVE AND THE ID. C.I.T. (A) HAS ERRED IN UPHOLDING THIS ADDITION UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3 . THAT THE ID. ASSESSING AUTHORITY HAS ERRED IN MAKING ADDITION OF RS. 3,01,515.00 BEI NG ALLEGED DIFFERENCE IN CAPITAL ACCOUNT OF APPELLANT AS ON 01/04/1997 AND THE ID. C.I.T.(A) HAS ERRED IN UPHOLDING THIS ADDITION ALSO UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 4 . THAT THE OBSERVATION OF ID. COMMISSIONER OF INCOME - TAX (APPEALS) ON PAGE 3 IN PARA 5(3) OF HIS OR DER THAT 'THE DIFFERENCE OF RS. 3,01,515.00 IN THE OPENING CAPITAL IS NOT THE DIFFERENCE IN NATURE OF TWO DOCUMENTS AS SUBMITTED BY THE ASSESSEE', IS ABSOLUTELY INCORRECT AS THE TWO DOCUMENT WHICH THE ID. COMMISSIONER OF INCOME - TAX (A PPEALS) IS TALKING ABOUT ARE 'BALANCE SHEET' & 'STATEMENT OF AFFAIRS' UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 5 . THAT THE FINDINGS OF ID. AUTHORITIES BELOW ARE BAD IN LAW AND CONTRARY TO THE FACTS OF THE CASE. 2 . BESIDES RAISING VARIOUS GROUNDS ON MERIT, THE ASSESSEE HAS RAISED PRELIMINARY OBJECTION AT THRESHOLD THAT THE REOPENING OF ASSESSMENT IS BAD AND ILLEGAL, THEREFORE, THE ENTIRE ASSESSMENT DESERVES TO BE ANNULLED. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT ON THE BASIS OF THE DIRECTIONS O F THE LD. CIT(A) VIDE HIS ORDER DATED 24.9.2004 IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 1998 - 9 9 , THE ASSESSING OFFICER HAS INITIATED PROCEEDINGS UNDER SECTION 147 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') BY RECORDING REAS ONS TO BELIEVE, ON 2.3.2005. THE CO P Y OF THE REASONS RECORDED FOR REOPENING THE ASSESSMENT IS AVAILABLE AT PAGE 14 OF THE COMPILATION FILED BY THE ASSESSEE. THE ORDER : - 3 - : OF THE LD. CIT(A) FOR ASSESSMENT YEAR 1998 - 99 WAS SET ASIDE BY THE TRIBUNAL BY DECLARI NG THE ASSESSMENT FRAMED FOR ASSESSMENT YEAR 1998 - 99 AS INVALID. SINCE THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 1998 - 99 WAS ANNULLED BY THE TRIBUNAL AFTER HOLDING THAT THE INITIATION OF PROCEEDINGS UNDER SECTION 147 OF THE ACT TO BE ILLEGAL AND VOID, THE ORDER PASSED BY THE APPELLATE AUTHORITY FOR ASSESSMENT YEAR 1998 - 99 CONSEQUENT TO THE AFORESAID ANNULLED ASSESSMENT ORDER HAS NO LEGS TO STAND AND DESERVES TO BE QUASHED OR ANNULLED. ONCE THE LD. CIT(A)S ORDER FOR ASSESSMENT YEAR 1998 - 99 HAS NO LEGAL VAL UE IN THE EYES OF LAW, THE DIRECTIONS GIVEN THEREIN CANNOT BE ENFORCED OR UTILIZED FOR REOPENING OF THE ASSESSMENT FOR ASSESSMENT YEAR 1997 - 98. 3 . THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT THE ASSESSMENT WAS ALSO REOPENED AFTER SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THEREFORE, ONCE THE DIRECTIONS OF THE LD. CIT(A) DOES NOT COME IN TO PLAY, THE REOPENING OF ASSESSMENT FOR ASSESSMENT YEAR 1997 - 98 IS TIME BARRED. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT IN ANY CASE REOPENING OF ASSESSMENT IS ILLEGAL AND VOID AB INITIO. 4 . THE LD. D.R., ON THE OTHER HAND, HAS SUBMITTED THAT THE ASSESSMENT WAS REOPEN ED PURSUANT TO THE DIRECTIONS OF THE LD. CIT(A). THEREFORE, TIME LIMIT AS SUGGESTED BY THE LD. COUNSEL FOR THE ASSESSEE DO ES NOT APPLY. THE LD. D.R. FURTHER CONTENDED THAT EVEN THE ASSESSMENT WAS ANNULLED BY THE TRIBUNAL, BUT THE DIRECTION OF THE LD. CIT(A) FOR REOPENING OF ASSESSMENT FOR ASSESSMENT YEAR 1997 - 98 REQUIRES A PROPER COMPLIANCE. 5 . HAVING HEARD THE RIVAL SUBMISSION S AND FROM A CAREFUL PERUSAL OF RECORD, WE FIND THAT THE TRIBUNAL HAS ANNULLED THE ASSESSMENT FOR ASSESSMENT YEAR 1998 - 99 VIDE ITS ORDER DATED 29.5.2009. COPY OF THE ORDER IS PLACED AT PAGES 15 TO 25 OF THE COMPILATION OF THE ASSESSEE. IT IS ALSO AN UNDI SPUTED FACT THAT THE ASSESSMENT WAS REOPEN ED PURSUANT TO THE DIRECTIONS OF THE LD. CIT(A) THROUGH HIS APPELLATE ORDER DATED 24.9.2004 FOR ASSESSMENT YEAR 1998 - 98 AND THESE FACTS ARE EVIDENT FROM THE REASONS : - 4 - : RECORDED BY THE ASSESSING OFFICER WHILE REOPENING THE ASSESSMENT FOR ASSESSMENT YEAR 1997 - 98. COPY OF THE REASONS RECORDED IS AVAILABLE AT PAGE 14 OF THE COMPILATION OF THE ASSESSEE. ONCE THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 1998 - 99 HAS BEEN ANNULLED BY THE TRIBUNAL AFTER HOLDING THE REOPENING OF A SSESSMENT TO BE INVALID, THE ORDER PASSED BY THE LD. CIT(A) PURSUANT TO THE ANNULLED ASSESSMENT ORDER HAS NO LEGS TO STAND AND THEREFORE HAS NO LEGAL VALUE IN THE EYES OF LAW. TH US , THE DIRECTIONS PASSED IN THE ORDER OF THE LD. CIT(A) DOES NOT HOLD GOOD A ND CANNOT BE COMPL IED WITH. AT THE MOST , THE OBSERVATIONS MADE BY THE LD. CIT(A) IN THAT ORDER CAN BE USED BY THE REVENUE AS AN INFORMATION FOR REOPENING OF ASSESSMENT, BUT FOR THAT PURPOSE REOPENING SHOULD BE DONE WITHIN THE PERIOD PRESCRIBED. ADMITTEDL Y IN THE INSTANT CASE REOPENING UNDER SECTION 147 OF THE ACT WAS INITIATED AFTER A PERIOD OF SIX YEARS FROM THE END OF THE ASSESSMENT YEAR. THEREFORE, EVEN IF THE DIRECTIONS OF THE LD. CIT(A) ARE CONSIDERED TO BE INFORMATION FOR THE ASSESSING OFFICER, THE ASSESSMENT REOPENED AFTER SIX YEARS CANNOT BE HELD TO BE VALID. THEREFORE, VIEWING THE CASE FROM ANY ANGLE, THE REOPENING OF ASSESSMENT IS NOT PROPER. WE ACCORDINGLY HOLD IT TO BE INVALID. ONCE REOPENING IS INVALID, ANY ORDER PASSED CONSEQUENT THERETO IS ALSO INVALID AND DESERVES TO BE ANNULLED. WE ORDER ACCORDINGLY. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.3.2013. SD/ - SD/ - [ J SUDHAKAR REDDY ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED: 15.3.2013 JJ: 1303 : - 5 - : COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR