Shri Devendra Singh Dhoat, Korba V. Income Tax Officer, Ward -1, Korba

ITA 67/RPR/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 1450 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 15-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Assessment record; Reason to believe; Reassessment proceedings
• Section: 147; 44AD; 2(A)

Judgement Text

आयकर अपीलȣय अͬधकरण Ûयायपीठ रायप ु र मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 67/RPR/2018 Ǔनधा[रण वष[ / Assessment Year : 2012-13 Shri Devendra Singh Dhoat Plot No.181, T.P Nagar, Korba (C.G.) PAN :AFYPD9079H .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-1, Korba (C.G.) ......Ĥ×यथȸ / Respondent Assessee by : Shri Y.K Mishra, Advocate Revenue by : Shri G.N Singh, Sr. DR स ु नवाई कȧ तारȣख / Date of Hearing : 27.07.2022 घोषणा कȧ तारȣख / Date of Pronouncement : 29.08.2022 2 Shri Devendra Singh Dhoat Vs. ITO, Ward-1 ITA No.67 /RPR/2018 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals), Bilaspur dated 09.03.2018, which in turn arises from the order passed by the A.O under Sec.143(3)/147 of the Income-Tax Act, 1961 (for short ‘the Act’) dated 20.02.2015 for assessment year 2012-13. Before us the assessee has assailed the impugned order on the following grounds of appeal: “1. That the Ld. CIT(A) has erred in law as well as on facts while confirming the jurisdiction u/s.147. 2. That Ld. CIT(A) erred in law as well as facts while confirming applicability under section 44AD for receipts on account of truck plying business. 3. That under the facts and circumstances of the case, the Ld. CIT(A) erred in sustaining addition of Rs.7,57.428/- made by the A.O u/s.44AD of the I.T Act, 1961. 4. That the Ld. CIT(A) has erred in law as well as on facts in upholding the issuance of notice u/s.148 of the I.T Act, 1961. 5. That the assessee craves leave to add, alter and amend modify, substitute delete and /or rescind all or any of the grounds of appeal on or before the final hearing.” 2. Succinctly stated, on the basis of AIR information/transactions data of F.Y.2011-12 which revealed that the assessee had made a deposit of Rs.10 lacs and above in his bank account, the A.O observing that the assessee had not filed his return of income for the year under consideration i.e. A.Y.2012-13, reopened his case u/s.147 of the Act. Notice u/s.148 of the Act was issued to the assessee 3 Shri Devendra Singh Dhoat Vs. ITO, Ward-1 ITA No.67 /RPR/2018 on 19.12.2013. In response, the assessee filed his return of income on 18.09.2014 disclosing an income of Rs.5,73,400/-. 3. During the course of the assessment proceedings, it was observed by the A.O that the assessee had during the year derived income from various streams, viz. (i) income from plying four heavy goods vehicles which was disclosed under the deeming provisions of section 44AE of the Act : Rs.4,60,000/-; (ii) income from transport booking work which was disclosed under the deeming provisions of section 44AD : Rs.1,02,985/-; and (iii) income from other sources i.e. interest on bank account/income -tax refund : Rs.10,475/-. It was claimed by the assessee that as he had disclosed his income by opting for the deeming provisions contemplated in section 44AE/44AD of the Act, therefore, as per the concession therein provided he had not maintained any books of accounts for the year under consideration. On a perusal of the bank account of the assessee, it was observed by the A.O that an amount aggregating to Rs.1,66,35,355/- was deposited by him during the year under consideration in his books of accounts viz. (i) deposit in HDFC bank account : Rs.1,56,65,623/-; (ii) deposit in Punjab & Sind Bank ; Rs.9,69,732/-. Observing, that the total transportation receipts of the assessee amounted to Rs.1,66,35,355/-, the A.O called upon the assessee to explain that having not maintained any books of accounts why its income may not be estimated by adopting a net profit rate of 8%. In reply, it was claimed by the assessee that as he had opted for disclosing of his income as per the deeming 4 Shri Devendra Singh Dhoat Vs. ITO, Ward-1 ITA No.67 /RPR/2018 provisions of section 44AE/44AD of the Act, therefore, the income disclosed was in accordance with the mandate of law. However, the A.O was not inclined to accept the aforesaid explanation of the assessee. The A.O was of the view that the claim of the assessee of having received an amount of Rs.1,66,35,355/- from plying of four trucks was beyond comprehension. In order to fortify his aforesaid conviction, it was observed by the A.O that the total receipt of the assessee as per “Form 26AS” was at Rs.18,57,310/-. Observing that the assessee had neither maintained any record of expenses qua its aforesaid business of plying of vehicles nor had furnished copies of agreements etc. as regards the parties with whom works were executed, the A.O was of the view that his income could safely be estimated by applying a net profit rate of 8% to his total receipts. Also, the A.O dislodging the claim of the assessee that as he had disclosed his income under the deeming provisions of section 44AE of the Act, therefore, there was no reason for drawing adverse inferences as regards the quantum of income so disclosed, observed, that the substantial receipt of Rs.1,66,35,355/- received by the assessee during the year clearly revealed that he had earned income which was substantially more than that disclosed by him in section 44AE of the Act. Accordingly, the A.O vide his order passed u/s.143(3)/147, dated 20.02.2015 determined the income of the assessee at Rs.13,30,828/-. 5 Shri Devendra Singh Dhoat Vs. ITO, Ward-1 ITA No.67 /RPR/2018 4. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without any success. 5. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 6. At the very outset of the hearing of the appeal the Ld. Authorized Representative (for short ‘AR’) for the assessee assailed the validity of the jurisdiction that was assumed by the A.O u/s.147 of the Act. Elaborating on his aforesaid contention, it was submitted by the Ld. AR that the very basis for assumption of jurisdiction u/s.147 of the Act was based on misconceived and incorrect facts. It was submitted by the Ld. AR that though the assessee had filed his original return of income for the year under consideration i.e. A.Y.2012-13 on 31.03.2013, therein disclosing an income of Rs.5,04,500/-, however, the A.O had initiated the impugned reassessment proceedings u/s.147 of the Act, inter alia, for the reason that the assessee had not filed his return of income for the year under consideration. In order to fortify his aforesaid contention the Ld. AR had taken us through the copy of the original return of income which was filed by the assessee for year under consideration A Y 2012-13, Page 32-33 of APB. Considering the fact that the assessee has assailed the validity of jurisdiction that was assumed by the A.O for taking recourse to proceedings u/s.147 of the Act, the Ld. Departmental 6 Shri Devendra Singh Dhoat Vs. ITO, Ward-1 ITA No.67 /RPR/2018 Representative (for short ‘DR) was directed to produce the assessment records so that the necessary facts may be gathered beyond doubt. 7. On a perusal of the assessment records which were produced by the Ld. DR during the course of next hearing the copy of the return of income filed by the assessee u/s.139(4) of the Act dated 31.03.2014 (acknowledgement No. 356310314010206) for the year under consideration i.e. AY.2012-13 was found lying available on record, Page 5 to 27 of the assessment record. The case of the assessee was reopened by the A.O on the basis of “reasons to believe”, dated 19.12.2013, which reads as under: “19.12.2013 As per information of ITS details of AIR transactions data of FY 2011-12 ( A.Y.2012-13) the above named assessee has deposited cash aggregating Rs.2,00,000/- ore more with a banking company & has purchased immovable property valued at Rs.30,00,000/- or more maintained by him during the F.Y.2011-12 relevant to A.Y 2012-13. The source of income is contractorship. Letter dated 23.08.2013 was issued and served on the assessee, intimating the transaction and calling for details of return filed for the relevant assessment year. In response to the notice, neither any body attended nor any written reply was filed. The nature of transaction of Rs.2,00,000/- and source of purchased of immovable property valued at Rs.30,00,000/- & the source of deposit in the Banking company, remains unexplained. Assessee has also not filed return for the relevant assessment year. Hence, I have: therefore reason to believe that income chargeable to tax has escaped assessment for the A.Y 2012-13 as per explanation 2(a) of section 147 of the IT Act. Issue notice u/s.148 of the I.T Act, 1961 for A.Y 2011-12. Sd/- 7 Shri Devendra Singh Dhoat Vs. ITO, Ward-1 ITA No.67 /RPR/2018 ITO” (Emphasis supplied by us) 8. Considering the aforesaid reasons on the basis of which the case of the assessee was reopened u/s.147 of the Act, we find, that as stated by the Ld. AR, and rightly so, the same are based on a fallacious and misconceived fact that the assessee had not filed his return of income for the relevant A.Y.2012-13. In our considered view the very basis for reopening of the case of the assessee by the A.O u/s.147 of the Act is clearly fallacious which proves beyond doubt a non- application of mind by him to the material available on record on the basis of which the impugned belief that the income of the assessee chargeable to tax had escaped assessment had been arrived at by him. Admittedly, it may though be a fact that the assessee had made cash deposits and purchased immovable property as stated in the “reasons to believe”, but the very observation that the assessee had not filed his return of income for the year under consideration i.e. A.Y.2012-13 irrefutably evidences a clear non-application of mind by the A.O who had in a mechanical manner without even doing the bare minimum i.e. referring to and consulting the assessment record of the assessee which was lying available with him had taken recourse to proceedings u/147 of the Act. On the basis of our aforesaid deliberations, we are of a strong conviction that as the very basis for assumption of jurisdiction by the A.O for taking recourse to proceedings u/s.147 of the Act is found to be incorrect and fallacious, therefore, the consequential 8 Shri Devendra Singh Dhoat Vs. ITO, Ward-1 ITA No.67 /RPR/2018 assessment so framed by him u/s.143(3)/147 of the Act dated 20.02.2015 cannot be sustained and is liable to be quashed on the said could itself. Thus, the Grounds of appeal No(s) 1 & 4 raised by the assessee are allowed in terms of our aforesaid observations. 9. As we have quashed the assessment for want of valid assumption of jurisdiction by the A.O for taking recourse to proceedings u/s.147 of the Act, therefore, we refrain from adverting to and therein adjudicating the other contentions that have been advanced by the Ld. AR as regards the non- sustainability of the addition qua the merits of the case, which, thus, are left open. Thus, the Grounds of appeal Nos. 2 & 3 are accordingly disposed off in terms our aforesaid observations. 10. The Ground of appeal No.5 being general in nature is dismissed as not pressed. 11. In the result, appeal of the assessee is allowed in terms of our aforesaid observations. Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board. Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 29 th August, 2022 ***SB 9 Shri Devendra Singh Dhoat Vs. ITO, Ward-1 ITA No.67 /RPR/2018 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeal), Bilaspur (C.G) 4. The Pr. CIT, Bilaspur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायप ु र बɅच, रायप ु र / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, // True Copy // Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र / ITAT, Raipur. 10 Shri Devendra Singh Dhoat Vs. ITO, Ward-1 ITA No.67 /RPR/2018 Date 1 Draft dictated on 06.08.2022 Sr.PS/PS 2 Draft placed before author 07.08.2022 Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order