Prashant Mahadev Mahangare, L/h Of Mhadev Kondiba Mahagare, Satara V. Income-tax Officer, Ward - 4, Satara

ITA 724/PUN/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4904 (ITAT-PUNE)
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 19-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Search and seizure; Principle of natural justice
• Section: 147; 6

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, P UNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO. 724/PUN/2018 / ASSESSMENT YEAR : 2007-08 PRASHANT MAHADEV MAHANGARE, L/H OF MAHADEV KONDIBA MAHANGARE, VILLAGE WING, TALUKA KHANDALA DIST. SATARA PAN : AGPPM8807A .... / APPELLANT ! / V/S. THE INCOME TAX OFFICER, WARD-4, SATARA. / RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI REVENUE BY : SHRI M.K. VERMA / DATE OF HEARING : 07.02.2019 / DATE OF PRONOUNCEMENT : 08.02.2019 ' / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF LD. CIT(APPEALS)-2, PUNE DATED 02.11.2016 FOR THE ASSESSMENT YEAR 2007-08 AS PER FOLLOWING GROUNDS OF APPEAL ON RECORD: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDITION OF RS.21,15,000/- MADE BY THE A.O. AS ASSESSEE RECEIVED ON MONEY ON A CCOUNT OF SALE OF AGRICULTURAL LAND. THE ASSESSEE HAD DENIED THE R ECEIPT OF SUCH ON MONEY. THE ADDITION BE QUASHED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW AND SINCE THE RECEIPT OF AMOUNT OF RS . 21,15,000/- WAS DENIED AND BURDEN 2 ITA NO. 724/PUN/2018 A.Y.2007-08 SHIFTED TO A.O . TO PROVE WITH COGENT EVIDENCE TO PROVE THE FACT OF RECEIPT OF ON-MONEY. THE A.O . FAILED TO DISCHARGE THE BURDEN THAT WAS SHIFTED TO HIM. THE ADDITION, THEREFORE, IS UNW ARRANTED . IT BE DELETED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) WAS BOUND TO CONSIDER A L L THIS FACTS OF THE CASE IN THEIR PROPER PERSPECTIVE. THE LD. CIT(A) WAS NOT CORRECT IN CONF IRMING THE ADDITION WHICH IS CONTRARY TO LAW AND FACTS. IT BE DELETED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. A.O . FAILED TO OFFER THE SO CALLED PAYER OF THE ON-MONEY TO THE ASSESSEE FOR CROSS-EXAMINATION TO FIND OUT THE TRUT H ESPECIALLY WHEN ASSESSEE HAD DENIED THE RECEIPT OF ANY ON - MONEY. THE LD. CIT(A) OUGHT TO HAVE CALLED FOR REMAND REPORT FROM A. O. O N THIS POINT. THE FAI L URE OF THE LD. CIT(A) RESU L TS INTO THE FACT THAT THE ADDITION WAS CONFIRMED BY BREACHING THE PRINCIPLES OF NATURAL J USTICE. THE ASSESSMENT AND APPEAL ORDER BE SET ASIDE. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD.CIT(A) PASSED THE APPEAL ORDER ON A DEAD PERSON AS THE APPELLANT SHRI MAHADEV KONDIBA MAHANGARE HAD DIED ON 25.09.20 16 AND THE APPEAL ORDER WAS PASSED ON 2.11.2016. THE APPEAL OR DER ON A DEAD PERSON IS NOT SUSTAINABLE IN LAW. IT BE QUASHED. 6. THE APPELLANT CRAVES TO LEAVE, ADD/AMEND OR ALTE R ANY OF THE ABOVE GROUNDS OF APPEAL. 2. AT THE OUTSET, WE NOTICE THAT THERE IS A DELAY OF 463 DAYS FOR FILING THE APPEAL. THAT WITH REGARD TO THIS DELAY, THE LD. AR OF THE A SSESSEE FILED CONDONATION PETITION ALONG WITH AFFIDAVIT STATING REASONS FOR SUCH DELAY IN FILING THE APPEAL BEFORE US. WE HAVE PERUSED THE CONDONAT ION PETITION AND THE AFFIDAVIT ALONG WITH REASONS FOR DELAY. WE ARE CONVINCED WITH THE JUSTIFICATION RENDERED BY THE ASSESSEE THROUGH THESE DOCUMENTS. W E THEREFORE CONDONE THE DELAY AND PROCEED TO HEAR THE APPEAL ON MERITS. 3. WE HAVE PERUSED THE GROUNDS OF APPEAL AND IN SOM E OF THE GROUNDS ASSESSEE STATED THAT PRINCIPLES OF NATURAL JUSTICE WERE NOT FOLLOWED BY THE REVENUE AUTHORITIES AND THAT INFORMATION WAS COLLEC TED WHICH WAS ADVERSE FOR THE ASSESSEE WITHOUT CONFRONTING THE AS SESSEE, WHILE THE ASSESSING OFFICER COMPLETED THE ASSESSMENT. 3 ITA NO. 724/PUN/2018 A.Y.2007-08 4. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND DURING THE YEAR UNDER CONSIDERATION NO REGULAR RETURN AS REQUIRED U/S.139 OF THE INCOME TAX ACT, 1961 (HEREINAFTER RE FERRED TO AS THE ACT) WAS FILED. A SEARCH AND SEIZURE ACTION WAS CONDUCTE D ON 28.08.2012 IN THE CASE OF M/S. PRECISION AUTOMATION & ROBOTICS (I ) LTD. (PARI) GROUP OF CASES. DURING SEARCH, IT WAS FOUND THAT THIS COMPAN Y HAD PURCHASED SUBSTANTIAL AMOUNT OF LAND AT VILLAGE DHANGAR WADI, TAL: KHANDALA, DIST. SATARA. IT WAS FURTHER OBSERVED THAT THE ASSESSEE W AS ONE OF THE PERSON WHO SOLD LAND TO THIS COMPANY AS PER REGISTERED DEE D. THE SALE CONSIDERATION WAS SHOWN AT RS.38,10,000/-. HOWEVER, THERE WERE CASH COMPONENTS ALSO WHICH WAS TO THE TUNE OF RS.21,15,0 00/- WHICH WAS OVER AND ABOVE THE AGREEMENT VALUE. THE ASSESSEE WA S THEREFORE, ISSUED NOTICE U/S.148 OF THE ACT, IN RESPONSE TO WHICH A N IL RETURN WAS FILED. A COPY OF REASONS RECORDED WAS ALSO HANDED OVER TO TH E ASSESSEES COUNSEL BY THE ASSESSING OFFICER. BEFORE COMPLETING THE ASS ESSMENT, A DETAILED SHOW CAUSE LETTER DATED 23.12.2013 WAS ISSUED ALONG WITH NOTICE U/S.142(1) OF THE ACT. THERE WAS NO RESPONSE ON THE PART OF THE ASSESSEE AND THEREAFTER, THE ASSESSING OFFICER PROCEEDED TO COMPLETE THE ASSESSMENT U/S.144 R.W.S.147 OF THE ACT BY CONSIDER ING THE CASH COMPONENT OF RS.21,15,000/- AS OTHER INCOME OF THE ASSESSEE. 5. DURING THE APPELLATE PROCEEDINGS, NO SUBMISSION WAS FILED BY THE ASSESSEE AND IT WAS STATED THAT THE ASSESSEE IS RELYIN G ON THE STATEMENT OF FACTS FILED ALONG WITH FORM-35. IN THE STATEMENT OF FACTS, IT HAS BEEN STATED THAT THE ASSESSEE HAS NOT RECEIVED ANY CASH CONSIDERA TION OVER AND ABOVE THE AGREEMENT VALUE AND THEREFORE, ADDITION MADE WITHOUT ANY MERIT. THE LD. CIT(APPEAL) HAS PERUSED THE MATERIAL ON RECORD AND FACTS OF THE CASE AND STATEMENT OF FACTS IN FORM-35 FILED BY THE ASSESSEE. THE LD. CIT(APPEAL) 4 ITA NO. 724/PUN/2018 A.Y.2007-08 OBSERVED THAT THE DIRECTORS OF M/S. PARI HAVE CONFIRMED IN THEIR STATEMENT THE FACT OF MAKING PAYMENT IN CASH WHICH IS OVER AND ABOV E THE AGREEMENT VALUE. IT HAS ALSO CONFIRMED BY THE M/S.PARI THAT THE AS SESSEE WAS PAID CASH COMPONENT OF RS.21,15,000/- AS ON MONEY. THE LD. CIT(AP PEAL) ANALYZED THAT SINCE IT WAS NOT IN DISPUTE THAT THE ASSESSEE HAD SOLD LAND TO M/S. PARI AND SINCE M/S. PARI HAS ADMITTED THE PAYMENT OF ON MON EY TO THE ASSESSEE, THEREFORE, ADDITION OF RS.21,15,000/- WAS CONFIRMED BY THE LD. CIT(APPE ALS). 6. THE LD. AR OF THE ASSESSEE AT THE TIME OF HEARING V EHEMENTLY ARGUED ON THE BASIS OF GROUNDS OF APPEAL FILED THAT PRINCIPLES OF NATURA L JUSTICE HAVE BEEN VIOLATED AND NO OPPORTUNITY WAS GIVEN TO THE ASSES SEE FOR CROSS EXAMINATION WITH REGARD TO THE STATEMENT MADE BY M/S. PARI AND WITHOUT CONFRONTING THE ASSESSEE ON SUCH STATEMENT, ADDITIONS WE RE MADE WHICH WAS THEREFORE IN THE NATURE OF ARBITRARY, UNWARRANTED AND UN -JUDICIAL AND LIABLE TO BE QUASHED. THEREFORE, THE LD. AR PRAYED THAT THE MATTE R MAY BE RESTORED TO THE FILE OF ASSESSING OFFICER FOR PROPER ADJUDICATION. 7. ON THE OTHER HAND, LD. DR HAS PLACED STRONG RELIANCE ON THE FINDINGS OF THE SUB-ORDINATE AUTHORITIES. 8. WE HAVE PERUSED THE CASE RECORDS AND CONSIDERED T HE ARGUMENTS PLACED BEFORE US BY THE PARTIES HEREIN. THE FACTS ON RECO RD DEMONSTRATE THAT THE ASSESSMENT WAS COMPLETED U/S.144 R.W.S.147 OF THE AC T AND THAT ON THE NOTICE ISSUED U/S.142(1) OF THE ACT ALONG WITH QUESTIONNAIRE , THERE WAS NO COMPLIANCE BY THE ASSESSEE. THEREAFTER, THE ASSESSING OFFIC ER PROCEEDED TO COMPLETE THE ASSESSMENT U/S.144 R.W.S 147 OF THE ACT. 5 ITA NO. 724/PUN/2018 A.Y.2007-08 BEFORE THE LD. CIT(APPEALS) ALSO, THERE WAS NO PROPER RE PRESENTATION BY THE ASSESSEE AND NEITHER ANY SUBMISSIONS WERE FILED. IT WAS ONLY ON THE STATEMENT OF FACTS WHICH IS THE PART OF FORM-35 AND MATE RIALS ON RECORD BASED ON WHICH THE LD. CIT(APPEALS) PASSED HIS ORDER. THE LD. CIT(A)S MAIN PREMISE WAS THAT M/S. PARI HAS GIVEN STATEMENT OF PAYIN G ON MONEY TO VARIOUS SELLER OF LAND AMONG WHOM THE ASSESSEE WAS ONE O F THE SELLER. IT WAS ADMITTED BY THE M/S. PARI THAT CERTAIN ON MONEY WAS PAID TO THE ASSESSEE. HOWEVER, ALL THROUGHOUT THE ASSESSEE HAS DENIED RECEIVING ANY MONEY APART FROM THE MONEY DISCLOSED IN THE SALE DEED. THE FACTS ON RECORD FURTHER DEMONSTRATES THAT THE AS SESSEE HAS NOT GOT ADEQUATE OPPORTUNITY TO DEFEND HIS CASE ON MERITS AND A LSO THAT THE STATEMENT OF M/S. PARI WAS NOT CONFRONTED BEFORE THE AS SESSEE. THESE ARE THE FACTORS WHICH GO AGAINST THE RULES OF NATURAL JUSTICE. 9. IN VIEW OF THE AFORESAID REASONING, WE SET ASIDE THE OR DER OF LD. CIT(APPEALS) AND RESTORE THE MATTER TO THE FILE OF THE ASS ESSING OFFICER FOR PROPER ADJUDICATION AFTER PROVIDING REASONABLE OPPORTUNITY OF THE HEARING TO THE ASSESSEE AND IN COMPLIANCE WITH THE PRINCIPLES OF NATURAL JUSTIC E. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PUR POSES. ORDER PRONOUNCED ON 08 TH DAY OF FEBRUARY, 2019. SD/- SD/- D. KARUNAKARA RAO PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER / PUNE; / DATED : 08 TH FEBRUARY, 2019. SB 6 ITA NO. 724/PUN/2018 A.Y.2007-08 '#$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-2, PUNE. 4. THE PR. CIT-3, PUNE. 5. '#$ %%&' , ( &' , - )*+ , / DR, ITAT, SMC BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 7 ITA NO. 724/PUN/2018 A.Y.2007-08 DATE 1 DRAFT DICTATED ON 0 7 .0 2 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 08 .0 2 .201 9 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