Sh. Pavinder Kumar Bansal, Muktsar V. The Income-tax Officer, Muktsar

ITA 69/ASR/2014

• Counselvise Citation: 6920914 RSA 2014
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 06-02-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: TARSEM LAL
• Assessee Lawyers: P N ARORA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 147; 148; 144; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH ; AMRITSAR (SMC). BEFORE SH. A.D. JAIN, JUDICIAL MEMEBR ITA NO.68(ASR)/2014 ASSESSMENT YEAR: 2006-07 PAN:AANHS3098H SUNIL KUMAR, HUF VS. INCOME TAX OFFICER, C/O D.K. BANSAL & CO., WARD-II(2), MUKTSAR. 117, N.G.M. MUKTSAR. (APPELLANT) (RESPONDENT) ITA NO.69(ASR)/2014 ASSESSMENT YEAR: 2006-07 PAN:AACHP5607G PARVINDER BANSAL, HUF VS. INCOME TAX OFFICER, PROP. BANSAL FILLING STATION, WARD-II(2), MUKTSA R. MUKTSAR. (APPELLANT) (RESPONDENT) ITA NO.79(ASR)/2014 ASSESSMENT YEAR: 2006-07 PAN:AEFPK8833C SMT. MANINDER KAUR VS. INCOME TAX OFFICER, W/O SH.GURNAM SINGH, WARD-II(2), MUKTSAR. VPO CHAKMADARSA, MUKTSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.P.N.ARORA, ADV. RESPONDENT BY: SH.TARSEM LAL, DR ITA NOS. 68, 69 & 79(ASR)/2014 2 DATE OF HEARING : 02/11/2015 DATE OF PRONOUNCEMENT: 06/11/2015 ORDER THESE THREE APPEALS OF THREE DIFFERENT ASSESSEES E MANATE FROM DIFFERENT ORDERS OF LD. CIT(A) BATHINDA, EACH DATED 4.11.2013 FOR THE ASSESSMENT YEAR 2006-07. SINCE THE ISSUES INVOLVED IN ALL THE APPEALS ARE COMMON, THE SAME ARE BEING TAKEN UP TOGETHER AND A RE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER, FOR THE SAKE OF CONVENIENC E. 2. THE ASSESSEES HAVE RAISED COMMON GROUNDS IN ALL THE APPEALS, EXCEPT THE VARIATION IN AMOUNTS. THEREFORE, THE FACTS ARE BEING TAKEN FROM ITA NO.69(ASR)/2014. THE GROUNDS TAKEN IN ITA NO.68(ASR )/2014 ARE REPRODUCED HEREUNDER, WHICH ARE COMMON IN OTHER APP EALS: 1. THAT LD. CIT(A) ERRED ON FACTS AND LAW IN CONFI RMING THE ACTION OF THE AO OF DETERMINING THE ASSESSED INCOME AT RS. 9,00,741/- + RS.1,99,613/- AGRICULTURE INCOME AS AGAINST INCOM E DECLARED IN THE RETURN AT RS.1,98,130/- + 1,99,613/- AGRICUL TURE INCOME. 2. THAT LD. CIT(A) ERRED ON FACTS AND LAW IN REJECT ING THE GROUNDS OF APPEAL THAT THE PROCEEDINGS INITIATED U/S 147 A RE VOID ABINITIO AS:- I) THEREASONS HAS BEEN RECORDED ON THE BASIS OF PROCEE DINGS BEFORE HONBLE SETTLEMENT COMMISSION IN THE CASE OF BAWA YADWINDER SINGH AND THERE IS NO APPLICATION OF THE MIND BY THE LD. AO. THUS, THE ASSESSMENT DESERVES TO BE ANNULL ED. ITA NOS. 68, 69 & 79(ASR)/2014 3 II) THE NOTICE U/S 148 WAS NOT ISSUED/SERVED IN ACCORD ANCE WITH THE PROVISIONS OF SECTION 282 OF THE INCOME TAX ACT , 1961. 3. THAT LD. CIT(A) ERRED ON FACTS AND LAW IN CONFIRMIN G THE ADDITION MADE BY THE AO AMOUNTING TO RS.702611/- ON ACCOUNT OF UNDISCLOSED INVESTMENT IN THE PURCHASE OF PROPER TY WITHOUT BRINGING ANY MATERIAL OR EVIDENCE ON RECORD. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOS ED OFF. 3. ALL THE ASSESSEES HAVE RAISED THE FOLLOWING ADDI TIONAL GROUND OF APPEAL, WHICH IS COMMON IN ALL THE APPEALS: THAT THE LD. CIT(A) WAS NOT JUSTIFIED TO PASS AN O RDER WITHOUT ALLOWING THE APPELLANT AN OPPORTUNITY TO CROSS EXAM INE SH. RAJAN SATIA, BAWA YADWINDER SINGH, S. SURJIT SINGH, SH. B ALDEV RAJ AND SH. KISHORE CHAND, ON THE BASIS OF STATEMENT OF WHOM TH E PURCHASE PRICE OF THE SUBJECT LAND HAS BEEN ADOPTED AND THE ASSESS MENT ORDER U/S 143(3) HAS BEEN PASSED. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E PURCHASED AGRICULTURE LAND MEASURING 45.5 MARLAS FROM SH. DALIP SINGH VID E SALE DEED DATED 20.06.2005 FOR A CONSIDERATION OF RS.2,00,000/-. T HE REVENUE CAME TO THE CONCLUSION THAT THE LAND PURCHASED BY SH. SUNIL KUM AR BANSAL IN HUF CAPACITY WAS A PART OF 18 ACRES OF LAND SOLD BY SM T. SURJIT KAUR W/O SH. DALIP SINGH, SH. DALIP SINGH AND SH. SURJIT SINGH ( BROTHER OF SH. DALIP SINGH). THE DEPARTMENT WAS OF THE VIEW THAT SH. SUN IL KUMAR BANSAL IN HUF CAPACITY ALSO PAID ON MONEY OF RS. RS.7,02,611/ - IN ADDITION TO THE AMOUNT AS PER THE REGISTERED SALE DEED EXECUTED BE TWEEN SH. DALIP SINGH, ITA NOS. 68, 69 & 79(ASR)/2014 4 SH. SURJIT KAUR AND THE ASSESSEE. ACCORDINGLY, THE CASE WAS REOPENED U/S 148 OF THE INCOME TAX ACT, 1961. THE AO MADE AN ADD ITION OF RS.7,02,611/- TO THE RETURNED INCOME OF THE ASSESSE E. 5. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REIT ERATED THE SAME ARGUMENTS, AS MADE BEFORE THE AO AND THE LD. CIT(A) AND REQUESTED THAT THE ISSUE IN QUESTION MAY BE RESTORED TO THE FILE OF TH E AO FOR DECIDING THE SAME AFRESH, SINCE THE MATERIAL COLLECTED AT THE BACK OF AND USED AGAINST THE ASSESSEE HAS NOT BEEN CONFRONTED TO THE ASSESSEE AN D THERE IS ALSO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE, BECAUSE NO OPPORTUN ITY WAS ALLOWED TO THE ASSESSEE TO CROSS EXAMINE THE PERSONS WHOSE STATEME NTS WERE RECORDED. THE WRITTEN SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE AO AS WELL AS BEFORE US ARE AS FOLLOWS: 1. THE ASSESSEE PURCHASED 45.5 MARLAS OF LAND FOR RS.221000/- FROM SH. DALIP SINGH VIDE SALE DEED DATED 20.06.200 5. 2. THE AMOUNT FOR PURCHASE OF LAND WAS WITHDRAWN TH ROUGH ACCOUNT PAYEE CHEQUES FROM MY ACCOUNT WITH M/S. DAR SHAN KUMAR SUNIL KUMAR MUKTSAR. THE COPY OF THE A/C IS E NCLOSED. 3. THE NOTICE U/S 148 WAS ISSUED IN RESPONSE TO WHI CH THE RETURN OF INCOME WAS FILED. 4. THE COPY OF REASONS RECORDED U/S 148 HAS BEEN PR OVIDED TO ME AND THE FACTS AS STATED IN THE REASONS ARE AS UNDER : ITA NOS. 68, 69 & 79(ASR)/2014 5 I. IT HAS BEEN ALLEGED IN THE REASONS THAT THE LAN D PURCHASED BY ME IS A PART OF THE TOTAL CHUNK OF 18 ACRES OF LAND SOLD BY DALIP SINGH AND THIS FAMILY TO VARIOUS PERS ONS. II. IT HAS BEEN FURTHER ALLEGED THAT A PART OF THE SAME LAND WAS PURCHASED BY BAWA LALI A/S YADWINDER SINGH FROM SH. SURJIT SINGH (BROTHER OF SH. DALIP SINGH) @1662545/ - PER ACRE. BUT LATER ON DURING THE COURSE OF SEARCH OF RAJA SA TIA A TABLE NOTE PAD WAS SEIZED FROM HIS PREMISES AND CERTAIN T RANSACTIONS OF THE SAME LAND WERE RECORDED ON THIS PAD. THIS N OTE PAD WAS CONFRONTED TO RAJAN SATIA AND HE ADMITTED THAT THE TRANSACTIONS ON THIS NOTE PAD RELATED TO A LAND DEAL BETWEEN BAW A LAIL A/S YADWINDER SINGH AND GURCHARAN SINGH. III) IT HAS ALSO BEEN ALLEGED IN THE REASONS THAT BAWA LALI A/S YADWINDER SINGH FILE AN APPLICATION BEFORE HONBLE ITSC, NEW DELHI AND ADMITTED, ON THE BASIS OF ENTRIES IN THE NOTE PAD, THAT HE PURCHASED LAND FROM SH.SURJIT SINGH AND HIS BROT HER @ RS.19837.50 PER MARLA AS AGAINST THE PRICE DECLARED IN THE SALE DEED @ RS.10268/- PER MARLA. IV. ON THE BASIS OF THE ABOVE SAID INFORMATION YOU R GOODSELF HAS DETERMINED THE ESCAPED INCOME AT RS.702611/- BY TAKING THE PURCHASE PRICE OF THE LAND PURCHASED BY ME @ R S.19837/- PER MARLA. 5. THE REPLY ON FACTS AND LAW IS AS UNDER: I) IT HAS NOT BEEN STATED IN THE REASONS RECORDED U/S 148 THAT MY NAME WAS ALSO MENTIONED ON THE NOTE PAID S EIZED FROM THE PREMISES OF RAJAN SATIA. II) THE REASONS RECORDED U/S 144 ARE SILENT ABOUT ANY EVIDENCE AGAINST ME FROM WHICH THE DEPARTMENT CAN P ROVE THAT I PAID ANY AMOUNT OVER AND ABOVE THE CONSIDERATION MENTIONED IN THE SALE DEED. THE ADMISSION BY BAWA LALI ALIAS YADWINDER SINGH BEFORE THE INCOME TAX SETTLEMENT COMMISSIONE R, NEW DELHI, CANNOT BE USED AS AN EVIDENCE AGAINST ME. ITA NOS. 68, 69 & 79(ASR)/2014 6 III) IT IS SETTLED LAW THAT IN SUCH CIRCUMSTANCES IN THE ABSENCE OF ANY EVIDENCE TO PROVE THAT ANY AMOUNT OVER AND O VER AND ABOVE THE AMOUNT MENTIONED IN REGISTERED DOCUMENT WAS PAID BY THE PURCHASER, NO ADDITION CAN BE MADE. THE RELI ANCE IS PLACED ON THE FOLLOWING JUDGMENTS: CIT VS. SMT. SURAJ DEVI (2010) 328 ITR 604 ACIT VS. DHARIYA CONSTRUCTION CO. (2010) 236 CTR ( SC) 226. SMT. AARTI GARG VS. ITO ( ITA NO. 41(ASR)/2010) DA TED 30.09.2010( AMRITSAR BENCH). IN THE ABSENCE OF MY EVIDENCE TO PROVE THAT ANY A MOUNT OVER AND ABOVE THE AMOUNT MENTIONED IN REGISTERED DOCUME NTS WAS RECEIVED BY THE SELLER, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. SIMILAR RULE IS APPLICABLE TO THE CAS E OF PURCHASER ALSO AS UNLESS CORROBORATIVE EVIDENCE PROVED THAT T HE PURCHASE CONSIDERATION EXCEEDED THE CONSIDERATION MENTIONED IN THE DOCUMENT, NO ADDITION CAN BE MADE. THIS VIEW HAS BE EN UPHELD BY THE HONBLE SUPREME COURT, IN THE CASE OF K.P. V ERGHESE VS. ITO, (1981) 131 ITR 597 (SC). THUS, RESPECTFULLY FO LLOWING THE ABOVE DECISIONS, WE ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 5. THE REASONS TO INITIATE THE PROCEEDINGS U/S 148 HAS BEEN RECORDED ON THE BASIS OF MATERIAL COLLECTED ON THE BACK OF THE ASSESSEE AND SUCH MATERIAL HAS NOT BEEN CONFRONTED TO THE ASSESSEE. IT HAS ONLY BEEN STATED IN THE ORDER SHEE T THAT WHY THE PURCHASE PRICE MAY NOT BE TAKEN @ RS.19837.50 PER M ARLA. NO OPPORTUNITY HAS BEEN PROVIDED TO THE ASSESSEE TO C ROSS EXAMINE SH. RAJAN SATIA, BAWA YADWINDER SINGH, SH. SURJIT S INGH, SH.BALDEV RAJ AND SH. KISHORE CHAND ON THE BASIS OF STATEMENT OF WHOM THE PURCHASE PRICE IS BEING ADOPTED. THUS, THERE IS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. IT IS R EQUESTED THAT AN OPPORTUNITY MAY KINDLY BE ALLOWED TO CROSS EXAMINE SH. RAJAN SATIA, BAWA YADWINDER SINGH, SH. SURJIT SINGH, SH. BALDEV RAJ AND SH. KISHORE CHAND ON THE BASIS OF STATEMENT OF WHOM THE REASONS HAVE BEEN RECORDED, IN THE INTEREST OF NATU RAL JUSTICE SO THAT THE FACTS CAN BE BROUGHT ON RECORD. 6. THE NOTICE U/S 148 WAS NOT ISSUED/SERVED AS PER THE PROVISIONS O SECTION 282 OF THE INCOME TAX ACT, 1961. ITA NOS. 68, 69 & 79(ASR)/2014 7 IN VIEW OF THE ABOVE STATED FACTS, NO ADDITION CAN BE MADE ON ACCOUNT OF PRESUMPTION OF THE DEPARTMENT THAT ANY A MOUNT OVER AND ABOVE THE SALE CONSIDERATION MENTIONED IN THE S ALE DEED WAS PAID. 7. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE AO HAS NOT TAKEN INTO CONSIDERATION THE ABOVE SUBMISSIONS OF THE ASS ESSEE, AS NO FINDING HAS BEEN GIVEN ON THE SAME. ACCORDINGLY, HE PLEADED T HAT THE PRINCIPLES OF NATURAL JUSTICE WERE GROSSLY VIOLATED AND REQUESTED TO SET-ASIDE THE MATTER TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH IN VIE W OF THE ABOVE SUBMISSIONS. 8. IT HAS BEEN POINTED OUT THAT AT APB 1 TO 7, ARE THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE THE LD. CIT(A), POINTI NG ATTENTION TO APB PARA 7, WHICH READS AS FOLLOWS: 7. IT IS FURTHER BROUGHT TO THE KIND NOTICE OF YOU R GOODSELF THAT THE MATERIAL ON THE BASIS OF WHICH ASSESSMENT HAS BEEN FRAMED WAS COLLECTED AT THE BACK OF THE ASSESSEE BUT THE SAME HAS NOT BEEN CONFRONTED TO THE ASSESSEE. NO OPPORTUNITY WAS GIVE N TO THE ASSESSEE TO CROSS EXAMINE SH. RAJAN SATIA, BAWA YADWINDER SI NGH, SH. SURJIT SINGH, SH. BALDEV RAJ AND SH. KISHORE CHAND, ON THE BASIS OF STATEMENT OF WHOM THE IMPUGNED ORDER OF ASSESSMEN T HAS BEEN FRAMED. THUS, THE ASSESSMENT DESERVES TO BE QUASHED AS WHILE FRAMING ASSESSMENT, PRINCIPLES OF NATURAL JUSTICE WERE GROS SLY VIOLATED. THE SAME MAY KINDLY BE ALLOWED SO THAT THE REAL FACT CA N BE BROUGHT ON RECORDS. ITA NOS. 68, 69 & 79(ASR)/2014 8 9. THE LD. COUNSEL FOR THE ASSESSEE HAS ARGUED THAT DESPITE THE ABOVE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE BEFORE TH E LD. CIT(A), THE SAME HAVE NOT EVEN BEEN MENTIONED IN THE IMPUGNED ORDER, MUCH LESS DISPOSED OF. 10. THE LD. DR, PLACED STRONG RELIANCE ON THE ORDER S OF THE AUTHORITIES BELOW. IT HAS BEEN CONTENDED THAT NO SUCH OBJECTIO N WAS TAKEN BY THE ASSESSEE EITHER BEFORE THE AO, OR BEFORE THE LD. CI T(A), NOR ANY DIET MONEY WAS DEPOSITED IN FURTHERANCE OF THE CROSS EXAMINAT ION OF THE CONCERNED PERSONS; THAT THEREFORE, THIS ISSUE CANNOT BE CALL ED IN QUESTION AT THIS STAGE. 11. HAVING HEARD BOTH THE PARTIES AND HAVING PERUSE D THE MATERIAL PLACED ON RECORD, I CONCUR WITH THE SUBMISSIONS MADE BY TH E LD. COUNSEL FOR THE ASSESSEE THAT THE MATERIAL ON THE BASIS OF WHICH TH E ASSESSMENT HAS BEEN FRAMED, WAS COLLECTED AT THE BACK OF THE ASSESSEE B UT THE SAME HAS NOT BEEN CONFRONTED TO THE ASSESSEE AT ANY STAGE. IN THE INT EREST OF NATURAL JUSTICE, THE AO OUGHT TO HAVE CONFRONTED THE MATERIAL TO THE AS SESSEE, WHICH HE COLLECTED AT THE BACK OF THE ASSESSEE AND AN OPPORT UNITY MUST HAVE BEEN GIVEN TO THE ASSESSEE TO CROSS EXAMINE THE PERSONS WHOSE STATEMENTS WERE RECORDED. THIS WAS NOT DONE AND THE NATURAL JUSTICE PRINCIPLE OF AUDI ALTEREM PARTEM WAS VIOLATED, TO THE DETERMENT OF THE ASSESS EE. 9. IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED VI EW THAT IN THE INTEREST OF JUSTICE, IT WILL BE APPROPRIATE TO REMIT THE MA TTER TO THE FILE OF THE A.O. TO ITA NOS. 68, 69 & 79(ASR)/2014 9 DECIDE THE MATTER DENOVO, AFTER AFFORDING REASONABL E AND ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE AO IS ALSO DIRECTED TO CONFRONT THE MATERIAL TO THE ASSESSEE, COLLECTED AT HIS BACK AND ALSO ALLOW THE ASSESSEE TO CROSS-EXAMINE THE PERSONS WHOSE STA TEMENTS WERE RECORDED AT THE ASSESSMENT STAGE. ACCORDINGLY, THE APPEAL IS AL LOWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, FOR STATISTICAL PURPOSES, THE A PPEAL IS TREATED AS ALLOWED. 11. ITA NO. 69(ASR)/2014 FOR THE ASSESSMENT YEAR 2006- 07 SINCE THE ISSUE IN DISPUTE STANDS ALREADY ADJUDICAT ED BY ME HEREINABOVE, WHILE DECIDING THE APPEAL OF THE ASSES SEE IN ITA NO.68(ASR)/2014, FOR THE ASSESSMENT YEAR 2006-07, T HE FINDINGS GIVEN THEREIN WILL APPLY TO THIS CASE ALSO. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS RESTORED TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH, AS PER DIRECTIONS GIVEN HEREINABOVE, IN ITA NO.68(ASR)/2014, AFTER A FFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS AP PEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 12. ITA NO.79(ASR)/2014 FOR THE ASSESSMENT YEAR 2006-0 7 SINCE THE ISSUE IN DISPUTE STANDS ALREADY ADJUDICAT ED BY ME HEREINABOVE, WHILE DECIDING THE APPEAL OF THE ASSES SEE IN ITA NO.68(ASR)/2014, FOR THE ASSESSMENT YEAR 2006-07, T HE FINDINGS GIVEN ITA NOS. 68, 69 & 79(ASR)/2014 10 THEREIN WILL APPLY TO THIS CASE ALSO. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS RESTORED TO THE FILE OF THE AO TO DECIDE THE ISSUE AFRESH, AS PER DIRECTIONS GIVEN HEREINABOVE, IN ITA NO.68(ASR)/2014, AFTER A FFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THIS AP PEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 13. IN THE RESULT, ALL THE THREE APPEALS ARE TREAT ED AS ALLOWED, FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6TH NOVE MBER, 2015. SD/- (A.D. JAIN) JUDICIAL MEMBER /SKR/ DATED: 06/11/2015 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEES: I) SH. SUNIL KUMAR, HUF,MUKATSAR (II) SH.PARVINDER KUMAR BANSAL, HUF, MUKATSAR (III) SMT. MANINDER KAU R, MUKATSAR 2. THE ITO, WARD II(2), MUKATSAR 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA 5. THE SR DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR)