Sh. Inderjeet Singh Sachdeva, Moradabad V. DCIT, Moradabad

ITA 6611/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7490 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 18-05-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 12-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Salary income; Principle of natural justice; Corroborative evidences; Accommodation entries; Reason to believe
• Section: 147; 148; 144; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA NO. 6611/DEL/2013 (ASSESSMENT YEAR : 2001-02) SHRI INDERJEET SINGH SACHDEVA VS. DCIT, RANGE-1 , C/O M/S SHUBHAM NURSING HOME, MORADABAD CIVIL LINES, MORADABAD (PAN: ALFPS8175E) (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. PIYUSH KAUSHIK, ADV. DEPARTMENT BY: SH. AMIT JAIN, SR. DR DATE OF HEARING : 18-05-2016 DATE OF ORDER : 03-06-2016 ORDER PER H.S. SIDHU, JM THE ASSESSEE HAS FILED THE APPEAL AGAINST THE IMP UGNED ORDER DATED 26.9.2013 PASSED BY THE LD. CIT(A)-II, NEW D ELHI RELEVANT TO ASSESSMENT YEAR 2001-02. 2. THE GROUNDS RAISED BY THE ASSESSEE READS AS UNDE R:- 1. THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN THE LAW, THE CIT(A) HAS ERRED IN CONFIRMING THE ASSUMP TION OF JURISDICTION U/S. 148 BY THE AO WHICH WAS INHERENTL Y BAD IN LAW. ITA NO.6611/DEL./2013 2 1.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE LAW THE ASSESSMENT ORDER U/S. 148/144 AS FRAMED BY THE AO IS BAD IN LAW AND DESERVES TO BE QUASHED. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE LAW THE CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ADDI TION OF RS. 12,00,000/- AS MADE BY THE AO. THAT THE ABOVE GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. THAT THE APPELLANT CRAVES LEAVE TO ADD TO AND / OR AMEND, MODIFY OR WITHDRAW THE GROUNDS OUTLINED ABOVE BEFOR E OR AT THE TIME OF HEARING OF THE APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN OF INCOME ON 31.7.2001 SHOWING INCOME FROM SALARY AND OTHER SOURCES AT RS. 2,47,000/-. THE SAME WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) ON 11.7.2002 CREATING A DEMAND OF RS. 20,380/-. THE ORDER U/S. 143(1) OF THE ACT WAS SUBSEQUENTLY REVISED U/S. 154 OF THE ACT AND THE DEMAND WAS REDUCED TO N IL. THEREAFTER, NOTICE DATED 28.3.2008 U/S. 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON THE BASIS OF INFORMATION FROM THE DIT(INV.-I), NEW DELHI IN R ESPECT OF THE FACT THAT THE GIFTS RECEIVED BY THE ASSESSEE WERE NOT GIFTS B UT SIMPLY ACCOMMODATION ENTRIES GIVEN BY THE PERSONS WHO HAVE ALLEGEDLY GIV EN THE GIFTS. THE NOTICE U/S. 148 OF THE ACT WAS ISSUED AFTER DUE APPROVAL F ROM THE ADDL. CIT, ITA NO.6611/DEL./2013 3 RANGE-I, MORADABAD. THE ASSESSEE HAS SHOWN GIFTS D URING THE YEAR AMOUTING TO RS. 12,00,000/-. IN RESPONSE TO THE NO TICES ISSUED NOBODY TURNED UP. FURTHER NOTICE U/S. 143(2) OF THE ACT A ND LATER IN VIEW OF THE FACT THAT IT REMAINED UNCOMPLIED WITH, NOTICE UNDER SECTION 144 OF THE ACT WAS ISSUED WHICH ALSO REMAINED UN-RESPONDED. AS PER THE NOTICE, THE ASSESSEE WAS REQUIRED TO PRODUCE APPROPRIATE EVIDEN CES IN RESPECT OF THE GIFT WORTHINESS OF THE DONORS AND OTHER EVIDENCES WHICH THE ASSESSEE WISHED TO RELY UPON. AO OBSERVED THAT NOTHING IN T HIS REGARD HAS BEEN PRODUCED BY THE ASSESSEE. UNDER THE CIRCUMSTANCES , THE AO TAKEN UP THE CASE ON MERIT U/S. 144 OF THE ACT AND OBSERVED THAT SINCE THE ASSESEE WAS REQUIRED TO PROVE THE CREDITWORTHINESS OF THE DONOR S WHICH REMAINED UNPROVED ON ACCOUNT OF THE FACT THAT NO EXPLANATION WAS FILED BY THE ASSESSEE NOR ANY SUPPORTING EVIDENCE OFFERED. THE O NUS TO PROVE THE GENUINENESS OF THE GIFTS LAY WITH THE ASSESSEE AN D HE FAILED TO DISCHARGE IT. AO ALSO OBSERVED THAT SINCE THE CASE IS BEING DECID ED EX-PARTE, AND IN CONSIDERATION OF THE FACT THAT THE FINDINGS OF THE DIT(INV.) IN THE REPORT THAT THE GIFTS WERE NOTHING BUT ACCOMMODATION ENTRIES T HE TOTAL AMOUNT OF THE GIFT WAS TREATED TO BE INCOME IN THE HANDS OF THE ASSESSEE. THE GENUINENESS OF THE GIFT REMAINED UNPROVED. ACCORDI NGLY, THE AO ASSESSED THE INCOME OF THE ASSESSEE AT RS. 14,47,000/- BY MA KING ADDITION OF RS. 12 LACS VIDE HIS ORDER DATED 30.12.2008 PASSED U/S. 14 8/144 OF THE ACT. ITA NO.6611/DEL./2013 4 4. AGAINST THE ORDER OF THE LD. AO, ASSESSEE APPEA LED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 26.9.2013 HAS DISMISSED THE APPEAL OF THE ASSESSEEE. 5. AGGRIEVED WITH THE AFORESAID ORDER OF THE LD . CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING, LD. COUNSEL OF THE AS SESSEE HAS ONLY ARGUED THE LEGAL GROUND CHALLENGING THE ASSUMPTION OF JURISDICTION U/S. 148 OF THE ACT. HE STATED THAT AO ISSUED NOTICE U/S. 148 OF THE ACT ON 28.3.2008 REQUIRING THE ASSESSEE TO FILE RETURN OF INCOME FOR AY 2001-02, WHICH WAS SERVED ON THE ASSESSEE ON 31.3.2008. HE FURTHER STATED THAT THE ASSESSEE VIDE ITS LETTER DATED 9.4.2008 BEFORE THE AO HAS SUBMITTED THAT THE ORIGINAL RETURN OF INCOME MAY BE TREATED AS RET URN OF INCOME FOR THE PURPOSE OF SECTION 148 OF THE ACT. ASSESSEE HAS ALS O REQUESTED IN THE LETTER DATED 9.4.2008 THAT REASONS RECORDED FOR ISSUING OF NOTICE U/S. 148 OF THE INCOME TAX ACT, 1961 MAY ALSO BE SUPPLIED TO HIM, W HICH WAS NOT SUPPLIED TO THE ASSESSEE TILL THE COMPLETION OF AS SESSMENT. THEREAFTER, ON 30.12.2008 THE AO FRAMED THE ASSESSMENT U/S. 148/14 4 WITHOUT GIVING THE COPY OF THE REASONS RECORDED AS REQUESTED BY THE AS SESSEE. THIS POINT WAS ALSO SPECIFICALLY RAISED BEFORE THE CIT(A) AND THE LD. CIT(A) VIDE PARA NO. 3.1 OF HIS IMPUGNED ORDER CATEGORICALLY ADMITS THAT HE HAS CONDUCTED AN ENQUIRY FROM THE OFFICE OF THE AO AS PER WHICH IT IS CLEAR THAT THE REASONS FOR RE-OPENING WERE NOT SUPPLIED TO THE ASSESSEE. LD. COUNSEL FOR THE ITA NO.6611/DEL./2013 5 ASSESSEE STATED THAT NON-SUPPLY OF COPY OF REASONS RECORDED IS CONTRARY TO THE PROVISIONS OF LAW AS LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF GNK DRIVESHAFTS (INDIA) LTD. VS. ITO REPORTED IN 259 ITR 19 (SC). THEREFORE, HE REQUESTED THAT BY FOLLOWING THE DECI SION OF THE HONBLE APEX COURT, AS AFORESAID, THE ASSESSMENT MAY BE QUA SHED BEING BAD IN LAW. IN SUPPORT OF HIS CONTENTION HE RELIED UPON THE VARIOUS OTHER CASE LAWS AND FILED A PAPER BOOK CONTAINING PAGES 1 TO 44 HAVING THE COPY OF THE VARIOUS FOLLOWING DECISIONS, WHEREIN ON SIMI LAR FACTS AND CIRCUMSTANCES THE ASSESSMENT DECLARED NULL AND VOID . - HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. TREND ELECTRONICS 2015-TIOL-2393-HC-MUM. - HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VIDESH SANCHAR NIGAM LTD. 340 ITR 66 (BOM.) - DECISION OF THE THIRD MEMBER BENCH OF ITAT IN THE CASE OF TELCO DADAJEE DHACKJEE LTD. VS. DCIT 2(3) 2012 TIOL-532-ITAT-MUM-TM. - DECISION OF THE COORDINATE BENCH OF BANGALORE ITA T IN THE CASE OF M/S SYNOPSYS INTERNATIONAL VS. DDIT (INT. TAXATION) DATED 10.12.2012 IN ITA NO. 549/BANG/11. - DECISION OF COORDINATE BENCH OF CHENNAI ITAT IN T HE CASE OF G. MUNUSWAMY VS. ACIT IN ITA NO. 242/MDS/2013 DATED 5.7.2013. ITA NO.6611/DEL./2013 6 - RECENT DECISION OF COORDINATE BENCH OF RANCHI ITA T IN THE CASE OF SH. SUNIL KUMAR VS. DCIT 2015-TIOL- 1929-ITAT-RANCHI. - DECISION OF COORDINATE BENCH OF HYDERABAD ITAT IN THE CASE OF S. PRASAD RAJU VS. DCIT 96 TTJ 832. 7. ON THE CONTRARY, LD. DR RELIED UPON THE ORDER P ASSED BY THE CIT(A) AND STATED THAT HE HAS PASSED A WELL REASONED ORDER , WHICH NEEDS TO BE UPHELD. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS AVAILABLE WITH US, ESPECIALLY THE ORDERS OF THE REV ENUE AUTHORITIES AND THE CASE LAW CITED BY THE ASSESSEES COUNSEL ON THE ISS UE IN DISPUTE. IN OUR VIEW, IT IS VERY MUCH NECESSARY TO REPRODUCE THE C ONTENTS OF THE NOTICE DATED 28.3.2008 ISSUED BY THE AO U/S. 148 OF THE AC T TO THE ASSESSEE AND THE REPLY THEREOF SUBMITTED BY THE ASSESSEE VIDE HI S LETTER DATED 9.4.2008 BEFORE THE ASSESSING OFFICER. THE CONTENTS OF THE N OTICE DATED 28.3.2008 ARE REPRODUCED AS UNDER:- NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 OFFICE OF THE ASSTT. COMMISSIONER OF INCOME TAX RANGE-I, MORADABAD ITA NO.6611/DEL./2013 7 DATED : 28/3/2008 TO DR. IS SACHDEVA, CIVIL LINES, MORADABAD WHEREAS I HAVE REASON TO BELIEVE THAT YOUR INCOME C HARGEABLE TO TAX FOR THE ASSESSMENT YEAR 2001-02 HAS ESCAPED ASS ESSMENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT, 1961. I, THEREFORE, PROPOSED TO ASSESSEE THE INCOME FOR T HE SAID ASSESSMENT YEAR AND I HEREBY REQUEST YOU TO DELIVER TO ME WITH IN 15 DAYS FROM THE DATE OF SERVICE OF THIS NOTICE A RETURN IN THE PRESCRIBE D FORM FOR THE SAID ASSESSMENT YEAR 2001-02. THIS NOTICE IS BEING ISSUED AFTER OBTAINING THE NEC ESSARY SATISFACTION OF THE COMMISSIONER OF INCOME TAXTHE CENTRAL BOARD OF DIRECT TAXES. SD/- SIGNATURE OF OFFICER NAME..(NOT LEGIBLE) ITA NO.6611/DEL./2013 8 DESIGNATION (NOT LEGIBLE) 8.1 IN RESPONSE TO THE AFORESAID NOTICE DATED 28.3. 2008, ASSESSEE FILED HIS REPLY DATED 9.4.2008 AS UNDER:- TO THE ASSTT. COMMISSIONER OF INCOME TAX, RANGE-I, MORADABAD SIR, REF:- YOUR NOTICE U/S. 148 IN THE CASE OF DR. IS SA CHDEVA AY 2001- 02 WITH REFERENCE TO THE ABOVE, I WISH TO SUBMIT THAT I HAVE ALREADY FILED MY INCOME TAX RETURN FOR THE AY 2001-02 VIDE RECEIPT NO. 471 DATED 31.7.2001 WITH CIRCLE MORADABAD. KINDLY TREAT THE SAME AS HAVING BEEN FILED IN RESPONSE TO YOUR NOTICE U/S. 1 48 AS REFERRED TO ABOVE. PHOTOCOPY OF THE RECEIPT OF THE INCOME TAX RETURN ALONGWITH COMPUTATION OF INCOME IS ENCLOSED HEREWITH FOR YOUR READY REFERENCE. FURTHER, YOU ARE REQUESTED TO KINDLY PROVIDE ME THE REASONS RECORDED FOR ISSUING THE NOTICE U/S. 148. ITA NO.6611/DEL./2013 9 THANKING YOU, YOURS FAITHFULLY, SD/- (IS SACHDEVA) DATE: 09.04.2008 8.2 FOR THE SAKE OF CLARITY, WE ARE FURTHER REPROD UCING THE RELEVANT PORTION OF PARA 3.1 OF THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) WHEREIN THE LD. CIT(A) HAS CATEGORICALLY MENTIONED THAT THE REASONS RECORDED FOR REOPENING OF THE CASE WERE NOT SUPPLIE D TO THE ASSESSEE. 3.1 HERE IT MAY BE MENTIONED THAT ON FORMAL ENQUI RIES FROM THE PRESENT AO, IT WAS LEARNT THAT INDEED REASONS R ECORDED FOR REOPENING OF THE CASE HAD NOT BEEN SUPPLIED TO THE APPELLANT INSPITE OF THERE BEING A SPECIFIC REQUEST FOR THE SAME. 8.3 AFTER GOING THROUGH THE NOTICE DATED 28.3.2008; REPLY OF THE NOTICE DATED 9.4.2008 OF THE ASSESSEE AND THE FINDING OF T HE LD. CIT(A) MADE IN HIS IMPUGNED ORDER DATED 26.9.2013 VIDE PARA NO. 3. 1 AND THE LAW AS LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF GNK DRIVESHAFTS (INDIA) LTD. VS. ITO REPORTED IN 259 ITR 19 (SC) AND ALSO T HE VARIOUS CASE LAWS, AS ITA NO.6611/DEL./2013 10 CITED BY THE LD. COUNSEL OF THE ASSESSEE, WE FIND T HAT THE HONBLE APEX COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. V S. ITO 259 ITR 19 (2003) HAS HELD THAT IT IS CLEAR THAT THE COMPLETION OF ASSESSMENT/RE- ASSESSMENT WITHOUT FURNISHING THE REASONS RECORDED BY THE AO FOR INITIATION OF PROCEEDINGS UNDER SECTION 147/148 OF THE ACT IS NOT SUSTAINABLE IN LAW AS IT IS INCUMBENT ON THE AO TO SUPPLY THEM WITHIN REASONABLE TIME. WE NOTE THAT ON THE ANVIL OF THIS JUDGMENT, ON THE REQUEST OF THE ASSESSEE, THE AO IS BOUND TO FURNISH THE REA SONS RECORDED FOR INITIATION OF PROCEEDINGS UNDER SECTION 147 OF THE ACT WITHIN A REASONABLE PERIOD OF TIME SO THAT THE ASSESSEE COULD FILE ITS OBJECTIONS THERETO AND THE AO WAS TO DISPOSE OF THE SAME BY PASSING A SPEAKIN G ORDER THEREON, WHICH THE AO HAS NOT DONE. WE ALSO NOTE THAT EVEN AS PER THE RULES OF NATURAL JUSTICE, THE ASSESSEE IS ENTITLED TO KNOW T HE REASONS ON THE BASIS OF WHICH THE AO HAS FORMED AN OPINION THAT INCOME ASSE SSABLE TO TAX HAS ESCAPED ASSESSMENT. THE FURNISHING OF REASONS TO THE ASSESSEE IS TO ENABLE/FACILITATE IT TO PRESENT ITS DEFENCE AND OBJ ECTIONS TO THE INITIATION OF PROCEEDINGS UNDER SECTION 147/148 OF THE ACT. THERE FORE, WE ARE OF THE CONSIDERED OPINION THAT THERE WAS NO JUSTIFIABLE RE ASONS FOR THE AO TO DEPRIVE THE ASSESSEE OF THE RECORDED REASONS BY HIM FOR INITIATING PROCEEDINGS UNDER SECTION 147/148 OF THE ACT. THER EFORE, IN OUR CONSIDERED OPINION, THE REOPENING IN QUESTION IS NO T SUSTAINABLE IN THE EYES OF LAW. ACCORDINGLY, WE ALLOW THE ASSESSEES APPEAL ON LEGALITY ASPECT ITA NO.6611/DEL./2013 11 WITHOUT PROCEEDING TO ADJUDICATE ON MERITS BY QUAS HING THE ASSESSMENT ORDER. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 03-06-2016. SD/- SD/- (O.P. KANT) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 03-06-2016 SR BHATANGAR COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.