Sk. Saifuddin, Howrah V. DCIT, Circle - 48, Kolkata, Kolkata

ITA 661/KOL/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8129 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 25-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K MAHAPATRA
• Assessee Lawyers: I BAN ERJEE
• Section: 143(3); 263

Judgement Text

I.T.A. NO.:661/ KOL. / 2012 ASSESSMENT YEAR : 2007-08 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER), AND SHRI MAHAVIR SINGH (JUDICIAL MEMBER) I.T.A. NO.: 661/ KOL. / 2012 ASSESSMENT YEAR : 2007-08 SK. SAIFUDDIN..APPELLANT VILL. NATIBPUR, P.O. KOLORAH, P.S. DOMJUR, DIST. HOWRAH-711 411 [PAN : AMVPS 6787 R] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,....RESPO NDENT CIRCLE-48, KOLKATA, 3, GOVT. PLACE (WEST), KOLKATA-700 001 APPEARANCES BY: SHRI I. BANERJEE, A.R. FOR THE APPELLANT SHRI A.K. MAHAPATRA, CIT(D.R.) FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : SEPTEMBER 19, 201 2 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 28, 2012 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE-APPELLANT HA S CALLED INTO QUESTION CORRECTNESS OF LEARNED COMMISSIONERS REVI SION ORDER DATED 26 TH MARCH, 2012 PASSED UNDER SECTION 263 R.W.S. 143(3) OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2007-08. I.T.A. NO.:661/ KOL. / 2012 ASSESSMENT YEAR : 2007-08 PAGE 2 OF 6 2. GRIEVANCES RAISED BY THE ASSESESE ARE AS FOLLOWS :- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, THE LD. CIT HAS ERRED BOTH IN LAW AND ON FACT S IN ASSUMING AND EXERCISING JURISDICTION U/S.263 AND ACCORDINGLY SETTING ASIDE THE ASSESSMENT ORDER PASS ED U/S 143(3), WHILE THE SAME HAVING BEEN MADE ON THE BASI S OF ALL PERTINENT, LAWFUL AND ADMISSIBLE EVIDENCE AVAILABLE , WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST O F REVENUE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT HAS ERRED BOTH IN LAW AND ON FACTS IN EXERCISING JU RISDICTION U/S 263 AND THEREUPON SETTING THE ASSESSMENT ORDER, FOR THE ALLEGED NON- CONSIDERATION OF FOUR DIFFERENT TRANSA CTIONS AGGREGATING RS.40,99,400/-, IN ASSESSMENT, MERELY O N THE BASIS OF DEPOSITION OF THE APPELLANT AND/OR OTHER E XTRANEOUS STATEMENTS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT HAS ERRED BOTH IN LAW AND ON FACTS IN EXERCISING JU RISDICTION U/S 263 AND THEREUPON SETTING THE ASSESSMENT ORDER, FOR THE ALLEGED NON- CONSIDERATION OF FOUR DIFFERENT TRANSA CTIONS AGGREGATING RS.40,99,400/-, IN ASSESSMENT, DESPITE THE ABSENCE OF OR IDENTIFICATION OF ANY INCRIMINATING D OCUMENT OR EVIDENCE IN COURSE OF SURVEY OR AT ANY TIME THER EAFTER. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT HAS ERRED IN INVOKING SECTION 263 AND THERE UPON SETTING ASIDE ASSESSMENT ORDER WITH A DIRECTION TO REDO THE SAME, INTER ALIA, IN REGARD TO THE SUPPOSED TEMPORA RY CASH LOAN OF RS.10,00,000/-, BASED ON ARBITRARY, INFIRM AND CONFLICTING REASONINGS AS WELL AS SUBJECTIVE AND PR EJUDICED CONSIDERATION OF EVIDENCE AND EXPLANATIONS PRODUCED . 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT HAS ERRED IN INVOKING SECTION 263 AND THERE UPON SETTING ASIDE ASSESSMENT ORDER WITH A DIRECTION TO REDO THE SAME, INTER ALIA, IN REGARD TO CONSTRUCTION IN BASU NDHARA, OF RS.12,00,000/-, BASED ON ARBITRARY, INFIRM AND CONF LICTING REASONINGS AS WELL AS SUBJECTIVE AND PREJUDICED CONSIDERATION OF EVIDENCE AND EXPLANATIONS PRODUCED . I.T.A. NO.:661/ KOL. / 2012 ASSESSMENT YEAR : 2007-08 PAGE 3 OF 6 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT HAS ERRED IN INVOKING SECTION 263 AND THERE UPON SETTING ASIDE ASSESSMENT ORDER WITH A DIRECTION TO REDO THE SAME, INTER ALIA, IN REGARD TO ADDITIONAL GROSS PRO FIT, OF RS.8,51,400/-, BASED ON ARBITRARY, INFIRM AND CONFL ICTING REASONINGS AS SUBJECTIVE AND PREJUDICED CONSIDERATI ON OF EVIDENCE AND EXPLANATIONS PRODUCED. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT HAS ERRED IN INVOKING SECTION 263 AND THERE UPON SETTING ASIDE ASSESSMENT ORDER WITH A DIRECTION TO REDO THE SAME, INTER ALIA, IN REGARD TO PURCHASE OF ATKURIA LAND, OF RS.10,48,000/-, BASED ON ARBITRARY, INFIRM AND CONF LICTING REASONINGS AS SUBJECTIVE AND PREJUDICED CONSIDERATI ON OF EVIDENCE AND EXPLANATIONS PRODUCED. 3. THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE A SSESSEE WAS SUBJECTED TO SURVEY PROCEEDINGS ON 24.05.2007, AND, DURING THIS SURVEY, THE ASSESSEE MADE DISCLOSURES AS FOLLOWS :- IN COURSE OF THE SURVEY CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE ON 24.05.2007, THE FOLLOWING DISCLOSURES W ERE MADE WITH RESPECT TO THE A.Y. 2007-08 : (I) TEMPORARY LOAN PAID TO PARTY ON CASH RS.10,00,000/- (II) EXPENSES ON CONSTRUCTION OF DEPTT. HOUSING (BASUNDHARA) RS.12,00,000/- (III) EXCESS OF INCOME ON THE BASIS OF GROSS PROFIT CONSIDERING 10% INCREASE OF BUSINESS OVER PREVIOUS YEAR RS. 8,51,400/- (IV) PURCHASE OF LAND AT VILLAGE ATKURIA OF 37 KATTA @RS.26,300/- AND INCLUDING OTHER CHARGES RS.10,48,000/- RS.40,99,400/- 4. HOWEVER, WHEN ASSESSMENT FOR THE RELATED ASSESSM ENT YEAR WAS FINALIZED, NOT ONLY THAT THE ASSESSING OFFICER DID NOT MAKE ANY ADDITIONS IN RESPECT OF THE ABOVE, HE DID EVEN TAKE COGNIZANCE OF THE ABOVE FACTS ABOUT STATEMENTS MADE BY THE ASSESSEE D URING THE COURSE OF I.T.A. NO.:661/ KOL. / 2012 ASSESSMENT YEAR : 2007-08 PAGE 4 OF 6 ASSESSMENT PROCEEDINGS. IT IS ON ACCOUNT OF THIS IN DIFFERENCE OF THE ASSESSING OFFICER TOWARDS THE STATEMENT RECORDED DU RING THE COURSE OF SURVEY, THAT THE LEARNED COMMISSIONER HAS SUBJECTED THE ASSESSMENT ORDER TO THE REVISION PROCEEDINGS AND THEREBY DIREC TED THE ASSESSING OFFICER TO SCRUPULOUSLY SCRUTINIZE THE FINDINGS OF THE SURVEY OPERATION DATED 24.05.2007, EXAMINE ALL RELEVANT ISSUES, COND UCT APPROPRIATE ENQUIRIES/CROSS VERIFICATIONS AND COMPLETE THE ASSE SSMENT AFRESH/ DE NOVO, AND IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CA SE AS ALSO THE APPLICABLE LEGAL POSITION. 6. 6. WE FIND THAT, AS HELD BY HONBLE DELHI HIGH C OURT IN THE CASE OF GEE VEE ENTERPRISES VS.- ADDL. C.I.T. (99 ITR 375) , THE ASSESSING OFFICER IS NOT ONLY AN ADJUDICATOR BUT ALSO AN INVESTIGATOR AND HE CANNOT REMAIN PASSIVE ON A RETURN WHICH IS APPARENTLY IN O RDER BUT CALLS FOR FURTHER ENQUIRY. AS THEIR LORDSHIPS FURTHER OBSERVED, IT IS HIS (I.E. ASSESSING OFFICERS) DUTY TO ASCERTAIN THE TRUTH OF THE FACTS STATED IN THE RETURN WHEN THE CIRCUMSTANCES ARE SUCH AS TO PROVOKE ENQUIRY. THEIR LORDSHIPS THEN ELABORATED CONNOTATIONS OF THE WORD ERRONEOUS IN THIS CONTEXT AS FOLLOWS - .THE MEANING TO BE GIVEN TO WORD ERRONEOUS IN SECTION 263 EMERGES OUT OF THIS CONTEXT. IT IS BECA USE INCUMBENT ON THE ITO TO FURTHER INVESTIGATE THE FAC TS STATED IN THE RETURN WHEN CIRCUMSTANCES WOULD MAKE SUCH AN ENQUIRY PRUDENT THAT THE WORD ERRONEOUS IN SEC TION 263 INCLUDES THE FAILURE TO MAKE SUCH AN ENQUIRY. T HE ORDER BECOMES ERRONEOUS BECAUSE SUCH AN ENQUIRY HAS NOT BEEN MADE AND NOT BECAUSE THERE IS ANYTHING WRONG W ITH I.T.A. NO.:661/ KOL. / 2012 ASSESSMENT YEAR : 2007-08 PAGE 5 OF 6 THE ORDER IF ALL THE FACTS STATED THEREIN ARE ASSUM ED TO BE CORRECT. 7. LET US TAKE A LOOK AT THE FACTS OF THIS CASE IN THE LIGHT OF THE ABOVE LEGAL POSITION. HERE IS A CASE IN WHICH SURVEY WAS CARRIED OUT, AND THE ASSESSEE MADE CERTAIN STATEMENTS DURING THESE SURVE Y PROCEEDINGS. WHEN THE ASSESSING OFFICER WAS FINALIZING THE ASSES SMENT, HE DID NOT EVEN BOTHER TO REFER TO OR EVEN EXAMINE THIS MATERI AL OR CONSIDER ITS RELEVANCE IN THE LIGHT OF THE ASSESSMENT. IT IS A C LEAR CASE OF REMAINING PASSIVE ON THE FACTS WHICH CALL FOR FURTHER ENQUIRI ES, AND IT IS THIS INERTIA WHICH RENDERS THE ASSESSMENT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 8. AS WE UPHOLD THE VALIDITY OF REVISION PROCEEDING S, HOWEVER, WE MUST MAKE IT CLEAR THAT WE ARE ONLY CONCERNED ABOUT INERTIA OF THE ASSESSING OFFICER WHICH RENDERED THE ASSESSMENT ORD ER ERRONEOUS, AND WE SEE NO NEED TO DEAL WITH THE BROADER ISSUE ABOUT THE RELEVANCE OF STATEMENT RECORDED IN MAKING THE ADDITIONS IN THE H ANDS OF THE ASSESSEE, AND WHETHER SUCH STATEMENTS, PER SE , CAN BE LEGALLY SUSTAINABLE BASIS FOR MAKING THE ADDITIONS. OUR OBS ERVATIONS SHOULD NOT BE CONSTRUED AS HAVING ANY BEARING ON THIS QUES TION. SUFFICE TO SAY THAT THIS ASPECT OF THE MATTER IS AN OPEN ISSUE AND THE ASSESSEE IS AT LIBERTY TO RAISE SUCH LEGAL ARGUMENTS, AS HE MAY BE ADVISED, AND THE ASSESSING OFFICER SHALL, INTER ALIA, DEAL WITH THES E ARGUMENTS BY WAY OF A SPEAKING ORDER AND IN ACCORDANCE WITH THE LAW. 9. TO SUMMARIZE, WE UPHOLD THE IMPUGNED ORDER IN PR INCIPLE BUT WITH THE RIDER SET OUT ABOVE. I.T.A. NO.:661/ KOL. / 2012 ASSESSMENT YEAR : 2007-08 PAGE 6 OF 6 10. FOR THE REASONS AND IN THE LIGHT OF ABOVE OBSER VATIONS, WE UPHOLD THE ORDER OF THE LEARNED COMMISSIONER AND DECLINE T O INTERFERE IN THE MATTER. 11. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH DAY OF SEPTEMBER, 2012. SD/- SD/- MAHAVIR SINGH PRAMOD KUMAR (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 28 TH DAY OF SEPTEMBER, 2012 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.