Smt. Shammi Malhotra, Ludhiana V. ITO, W-6(3), Ludhiana

ITA 701/CHANDI/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6752 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 08-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND SUDERSHAN JCIT DR
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 150(1); 143(2); 147

Judgement Text

, .. , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCHES, SMC CHANDIGARH .., ! BEFORE: SHRI. N.K.SAINI, VICE PRESIDENT ITA NO.701/CHD/2019 ASSESSMENT YEAR : 2007-08 SMT. SHAMMI MALHOTRA H.NO. 3895/4, NEAR BABA NANKI ROAD, MODEL HOUSE, LUDHIANA PUNJAB THE ITO W-6(3), RISHI NAGAR LUDHIANA, PUNJAB PAN NO: AFJPM3924P APPELLANT RESPONDENT !' ASSESSEE BY : SHRI PARIKSHIT AGGARWAL, CA #!' REVENUE BY : SHRI ARVIND SUDERSHAN, (JCIT. DR) $ %! & DATE OF HEARING : 29/01/2020 '()*! & DATE OF PRONOUNCEMENT : 07/02/2020 '#/ ORDER PER N.K. SAINI, VICE PRESIDENT THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 25/03/2019 OF LD. CIT(A)-3, LUDHIANA. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEA L: 1. THAT THE LEARNED COMMISSIONNER OF INCOME TAX (AP PEALS)-3, LUDHIANA HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,93,100/- ON ACCOUNT OF ADVANCE MADE TO SH. ASHWANI KUMAR PROP. M/S EMMSON TRADERS WITHOUT ANY BASIS AND WITHOUT CONSIDERING THE FACTS OF THE CASE. THEREFORE, ADDIT ION OF RS. 1,93,100/- MADE BY THE LEARNED ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-3, LUDHIANA IS ILLEGAL, UNWARR ANTED, UNCALLED FOR AND NEEDS TO BE DELETED. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS)-3, LUDHIANA HAS ERRED IN UPHELD THE ORDER PASSED BY THE LEARNED ASS ESSING OFFICER AS THE LEARNED ASSESSING OFFICER HAS MENTIONED IN THE ASSESSMENT O RDER THAT NO EVIDENCE WAS FURNISHED BY THE APPELLANT IN RESPONSE TO SOURCE OF INVESTMENT I.E. ADVANCE MADE TO SH. ASHWANI KUMAR PROP. M/S EMMSON TRADERS, WHEREAS EVIDENCES WERE DULY FURNISHED BY THE APPELLANT DURING THE COURSE O F ASSESSMENT PROCEEDINGS THEREFORE, ASSESSMENT FRAMED BY THE LEARNED ASSESSI NG OFFICER AND ASSESSMENT ORDER UPHELD BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-3, LUDHIANA IS ILLEGAL AND BAD IN THE EYES OF LAW. 2 3. THAT THE APPLICANT CRAVES TO LEAVE OR TO AMEND T HE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3. FROM THE AFORESAID GROUNDS IT IS NOTICED THAT ON LY GRIEVANCE OF THE ASSESSEE RELATES TO THE CONFIRMATION OF ADDITION OF RS. 1,93,100/- MADE BY THE A.O. ON ACCOUNT OF ADVANCE TO ONE SHRI ASHWANI KUMA R PROP. M/S EMMSON TRADERS. 4. THE FACTS RELATING TO THIS ISSUE IN BRIEF ARE TH AT THE LD. CIT(A)-2, LUDHIANA VIDE ORDER DT. 30/08/2017 HAS GIVEN DIRECTION UNDER SECTION 150(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS A CT) TO THE A.O. TO EXAMINE ABOUT THE SOURCE OF DEBIT ENTRIES IN THE BANK ACCOU NTS OF THE ASSESSEE THROUGH WHICH THE ADVANCES OF RS 93,100/- AND HOUSE EXPENSES OF RS. 1,00,000/- HAS BEEN GIVEN TO SHRI ASHWANI KUMAR DUR ING THE FINANCIAL YEAR 2006-07 RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERA TION. THEREAFTER THE CASE OF THE ASSESSEE WAS REOPENED U/S 147 OF THE ACT. TH E A.O. PASSED THE ASSESSMENT ORDER DT. 27/12/2018 EXPARTE UNDER SECTION 147 R.W.S 144 OF THE ACT AND MADE THE IMPUGNED ADDITION BY OBSERVING THA T BY KEEPING IN VIEW THE NON COOPERATIVE ATTITUDE OF THE ASSESSEE THE AM OUNT OF RS. 1,93,100/- WAS CONSIDERED AS THE INCOME OF THE ASSESSEE. 5. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND SUBMITTED AS UNDER: THAT THE ASSESSMENT FOR THE ASSESSMENT YEAR 2007-08 HAS BEEN FRAMED WITHOUT ANY ORIGINAL RECORDS. THAT THE PREVIOUS COUNSEL I.E . SH. S.K. BANSAL APPEARED BEFORE THE LEARNED ASSESSING OFFICER DURING THE COU RSE OF ASSESSMENT PROCEEDINGS AND SUBMIT THE DETAILS FROM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THAT THE LEARNED ASSESSING OFFICER HAS NOT ISSUED ANY NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE FINALIZATION OF T HE ASSESSMENT. THAT NO PROPER OPPORTUNITY WAS GIVEN TO THE ASSESSEE BY THE LEARNE D ASSESSING OFFICER. THEREFORE, ASSESSMENT ORDER PASSED U/S 147 R.W.S. 1 44 OF THE INCOME TAX ACT, 1961 WITHOUT ISSUING ANY NOTICE U/S 143(2) IS ILLEGAL AN D BAD IN THE EYES OF LAW AND NEEDS TO BE QUASHED THAT THE RETURN OF INCOME DECLARING INCOME AT RS. 1 ,20,400/- WAS FILED BY THE ASSESSEE AND THE LEARNED ASSESSING OFFICER HAS MADE THE ADDITION OF RS. 1,93,100/- WITHOUT ANY BASIS AND WITHOUT CONSIDERIN G THE FACTS OF THE CASE. THAT ASSESSEE HAS ADVANCE AMOUNT TO SH. ASHWANI KUMAR PR OPRIETOR M/S EMMSON TRADERS DURING THE FINANCIAL YEAR 2006-07. THAT THE SOURCE OF INVESTMENT MADE BY 3 THE ASSESSEE WERE DULY FILED DURING THE COURSE OF A SSESSMENT PROCEEDINGS. THAT ASSESSEE IS DOING THE BUSINESS OF RESALE OF COSMETI C GOODS, HOUSEHOLD GOODS AND WEARING APPARELS FROM LAST SO MANY YEARS. THAT THE ASSESSEE IS ASSESSED TO INCOME TAX SEPARATELY AND FILED HER INCOME TAX RETU RNS FROM LAST SO MANY YEARS. THAT THE DETAILS OF INCOME OF SOME ITR'S FILED BY T HE ASSESSEE ARE UNDER: ASSESSMENT YEAR DECLARED INCOME (IN ITR) 2002-03 84,700/- 2003-04 85,200/- 2004-05 86,800/- 2005-06 82,200/- 2006-07 1,14,600/- TOTAL 4 ,53,500/- THAT THE TOTAL INCOME SHOWN IN ABOVE STATED ASSESSM ENT YEARS IS RS. 4,53,500/-. THAT THE ASSESSEE IS WIFE OF SH. SURINDER KUMAR (BR OTHER OF SH. ASHWANI KUMAR PROPRIETOR M/S EMMSON TRADERS)AND HOUSEHOLD EXPENSE S WERE MET BY HER HUSBAND WHICH WAS DULY ACCOUNTED FOR IN THE HANDS O F ASSESSEE'S HUSBAND. THAT THE ABOVE STATED FACTS ARE CLEARLY EVENING THAT THE ASSESSEE MADE THE ADVANCE TO SH. ASHWANI KUMAR PROPRIETOR M/S EMMSON TRADERS OUT OF HER PAST SAVINGS. THAT THE LEANED ASSESSING OFFICER DID NOT CONSIDER THE SUBMISSIONS AND FACTS OF THE CASE AND MADE THE ADDITION OF RS. 1,93,100/- ON HIS ASSUMPTIONS AND WHIM WITHOUT ANY BASIS AND WITHOUT ANY MATERIAL FACTS OF THE CASE. THAT THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER, IS ILLEGAL A ND BAD IN THE EYES OF LAW AND NEEDS TO BE DELETED. SO IT IS A HUMBLE REQUESTED BEFORE YOUR HONOR TO IN KINDLY ALLOW THE APPEAL TO THE ASSESSEE AND DELETE THE ADDITION MADE BY THE LEARNE D ASSESSING OFFICER FOR THE A. Y. 2007-08 SO THAT NATURAL JUSTICE MAY ALLOWED T O THE ASSESSEE. KINDLY ACKNOWLEDGE THE REQUEST AND OBLIGE. 6. LD. CIT(A) HOWEVER DID NOT FIND MERIT IN THE SUB MISSIONS OF THE ASSESSEE AND CONFIRMED THE ADDITION BY OBSERVING IN PARA 4.3 OF THE IMPUGNED ORDER AS UNDER: 4.3 DURING THE APPELLATE PROCEEDINGS THE ASSESSEE H AS FILED WRITTEN SUBMISSION CHALLENGING THE DISALLOWANCE ON ACCOUNT OF OPPORTUN ITY AND THE ASSESSEE HAS STATED THAT THE COUNSEL OF THE ASSESSEE SHRI SK BAN SAL APPEARED BEFORE THE ASSESSING OFFICER ON 13/12/2018 AND SUBMITTED THE R ETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS ALSO FILE D COPY OF UNDATED LETTER SIGNED BY THE PREVIOUS COUNSEL OF THE ASSESSEE STAT ING THAT THE ASSESSEE'S RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08, IS ENCLOSED HER EWITH. BY GOING THROUGH THE UNDATED LETTER WHICH HAS NOT BEEN STAMPED OR ACKNOW LEDGED BY ANY AUTHORITY WHEREIN THE ASSESSEE HAS CLAIMED THAT THE ASSESSEE HAS EXPLAINED THE SOURCE OF THE AMOUNT OF RS. 93,100/-ADVANCE BY ASSESSEE TO SH RI ASHWINI KUMAR, PROP. EMSON TRADERS. HOWEVER, NO WHERE THE ASSESSEE HAS F ILED EXPLANATION AND SOURCE OF ADVANCE GIVEN BY ASSESSEE. THE REPLY FILED BY TH E ASSESSEE IS ALSO GENERALIZED, AND WITHOUT ANY DOCUMENTARY EVIDENCE. 4 MOREOVER THE ASSESSEE HAS NOT GIVEN ANY SUBMISSION AT THE TIME OF ASSESSMENT PROCEEDINGS WHEREAS THE ASSESSEE WAS GIVEN DUE AND AMPLE OPPORTUNITIES BY THE ASSESSING OFFICER, THEREFORE IT IS CONSTRUED TH AT THE ASSESSEE HAS NOTHING MORE TO EXPLAIN AND HAS FAILED COMPLETELY TO EXPLAIN THE SOURCE OF RS. 93,100/-. THE ASSESSEE HAS ALSO NOT EVEN TRIED TO GIVE WRITTEN EX PLANATION WITH REGARD TO SOURCE OF THE DEPOSIT GIVEN BY THE ASSESSEE. IN MY CONSIDE RED VIEW THE ASSESSEE HAS COMPLETELY FAILED TO DISCHARGE HIS ONUS TO EXPLAIN SOURCE OF ADVANCE AMOUNTING TO RS. 93,100 WITH EXPLANATION AND NECESSARY DOCUME NTARY EVIDENCE IN SUPPORT OF HIS CONTENTION. ACCORDINGLY THE DISALLOWANCE MAD E BY ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED ADVANCE GIVEN BY ASSESSEE TO SHRI ASHWINI KUMAR AMOUNTING TO RS. 93,100/- AND, BY TREATING THEM AS INCOME OF THE ASSESSEE IS UPHELD. WITH THIS THESE GROUNDS OF APPEAL ARE APPEA L ACCORDINGLY DISMISSED. 7. NOW THE ASSESSEE IS IN APPEAL. 8. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A.O. MADE THE IMPUGNED ADDITION WITHOUT PROVIDING DUE AND REASONA BLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE LD. CIT(A) ALSO SUSTAINED THE ADDITION MADE BY THE A.O. WITHOUT CONSIDERING THE SUBMISSION S OF THE ASSESSEE. HE REQUESTED TO REMAND THIS CASE BACK TO THE FILE OF T HE A.O. SO THAT THE REQUISITE EVIDENCE AND EXPLANATION MAY BE FURNISHED BEFORE HIM. 9. IN HIS RIVAL SUBMISSIONS THE LD. DR SUPPORTED TH E ORDERS OF THE AUTHORITIES BELOW. 10. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CA SE IT APPEARS THAT THE A.O. HAD NOT PROVIDED DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, THE ASSESSMENT ORDER DT. 27/12/2018 WAS P ASSED BY HIM EXPARTE. THE A.O. SIMPLY STATED THAT THE NOTICE DT. 13/12/20 18 WAS ISSUED TO THE ASSESSEE FOR HEARING ON 18/12/2018 WHICH WAS DULY S ERVED THROUGH AFFIXTURE, HOWEVER NOWHERE IT WAS MENTIONED THAT AFFIXTURE WAS IN THE PRESENCE OF INDEPENDENT WITNESSES I.E. THE SERVICE WAS PROPER. IT IS ALSO NOTICED THAT THE LD. CIT(A) HAD NOT COMMENTED UPON THE SUBMISSIONS O F THE ASSESSEE THAT THE SOURCE OF INVESTMENTS MADE BY THE ASSESSEE WERE DUL Y FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE ASSESSEE WAS DOIN G THE BUSINESS OF RESALE OF COSMETIC GOODS, HOUSEHOLD GOODS AND WEARING APPA RELS FROM LAST SO MANY YEARS. I THEREFORE BY CONSIDERING THE TOTALITY OF THE FACTS, DEEM IT 5 APPROPRIATE TO SET ASIDE THIS CASE BACK TO THE FILE OF THE A.O. TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PRO VIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 07/02/2020 ) SD/- .., ( N.K. SAINI) ! / VICE PRESIDENT AG DATE: 07/02/2020 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE