Sh. Sandeep Kumar, MANSA V. The Income tax Officer, MANSA

ITA 734/ASR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 8909 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 16-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Principle of natural justice
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH; AMRITSAR (SMC) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER ITA NO.734(ASR)/2013 ASSESSMENT YEAR:2006-07 PAN: AQOPK3801B SH. SANDEEP KUMAR VS. INCOME TAX OFFICER, S/O SH. DEVKI NANDAN, WARD 1(4), MANSA. PIARE LAL THEKEDAR STREET, MANSA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. SUDHIR SEHGAL, RESPONDENT BY:SMT. RATINDER KAUR, DR DATE OF HEARING: 23/11/2015 DATE OF PRONOUNCEMENT: 23/01/2015 ORDER THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2006-07, AGAINST THE ORDER DATED 23.09.2013, PASSED BY THE L D. CIT(A), BATHINDA. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN REOPENING THE CASE BY ISSUING NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 AS THERE WAS NO VALID GROU ND FOR REOPENING OF THE CASE. 2. THAT THE ACTION OF THE WORTHY CIT(A) IN CONFIRMI NG THE ASSESSMENT AS FRAMED ON THE BASIS OF THE REASONS AS RECORDED BY THE ASSESSING OFFICER IS AGAINST THE FA CTS AND CIRCUMSTANCES OF THE CASE. 3. THAT THE WORTHY CIT(A) HAS ERRED IN NOT CONSIDE RING THAT THERE WAS NO EVIDENCE OF EXCESS MONEY PAID BY THE A SSESSEE AND STATEMENT OF SELLER WAS NEVER CONFRONTED TO THE ASSESSEE. ITA NO.734/ASR/2013 ASSESSMENT YEAR: 2006-07 2 4. NOTWITHSTANDING THE ABOVE SAID GROUND OF APPEAL, IT IS SUBMITTED THAT THE WORTHY CIT(A) HAS ERRED IN CONFI RMING THE ADDITION OF RS.5,35,697/- MADE BY THE AO AS UNEXPLA INED INVESTMENT IN PLOT. 2. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND O F APPEAL, WHICH READS AS FOLLOWS: THAT THE ASSESSING OFFICER HAD WRONGLY ASSUMED THE JURISDICTION U/S 148 SINCE THERE WAS NO VALID SERVI CE OF THE NOTICE ON THE ASSESSEE AND, THEREFORE, THE PROCEEDI NGS AS INITIATED AGAINST THE ASSESSEE U/S 148 ARE VOID ABI NITIO. 3. IN THE ADDITIONAL GROUND, THE ASSESSEE HAS CHALL ENGED THE ACTION OF THE ASSESSING OFFICER IN REOPENING THE CASE U/S 148 OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAS CONTENDED THAT THERE W AS NO VALID SERVICE OF NOTICE U/S 148 OF THE ACT AND, AS SUCH, THE ADDITIO NAL GROUND TAKEN MAY BE ADMITTED IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. COMMIS SIONER OF INCOME- TAX, 229 ITR 383 (SC). 4. THE LD. DR, ON THE OTHER HAND, OPPOSED THE ADMIS SION OF THE ADDITIONAL GROUND OF APPEAL AND CONTENDED THAT THE CASE HAS BEEN DECIDED 5. HAVING HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF MATERIAL AVAILABLE ON RECORD, THE ADDITIONAL GROUND TAKEN BY THE ASSES SEE IS ADMITTED IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT I N THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT (SUPRA). 6. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE HAD PURCHASED A PLOT (1/3 SHARE) ON 07.09.2005 FROM SH. DALIP SINGH S/O SH. JANG SINGH FOR A SUM OF RS.1,25,000/- AT VILL. CHAK BIR SARKAR, MUKTSAR. THE DEPARTMENT HAD ISSUED NOTICE U/S 147/1 48 FOR REOPENING THE ASSESSMENT ON THE BASIS OF ORDER U/S 245D(4) O F THE SETTLEMENT ITA NO.734/ASR/2013 ASSESSMENT YEAR: 2006-07 3 COMMISSION IN THE CASE OF SH. YADWINDER SINGH ALIAS BAWA LALI. IN RESPONSE THE ASSESSEE RAISED THE FOLLOWING OBJECTIO NS FOR REOPENING THE CASE U/S 148 OF THE ACT: 1) THE FIRST OBJECTION OF THE ASSESSEE IS THAT ITO WHO REORDERED THE REASONS DID NOT HAVE JURISDICTION OVER THIS CAS E. 2) THAT IN ABSENCE OF RECORD OF THE ASSESSEE, THE A O AT MUKTSAR COULD NOT HAVE COME TO CONCLUSION THAT ANY INCOME HAS ESCAPED ASSESSMENT AND THE APPROVAL WAS GRANTED ACCORDINGLY. 2) AS PER REASONS RECORDED, THE AGREEMENT BETWEEN S H. GURCHARAN SINGH AND SH. BAWA LALI WAS FOR 18 ACRES, BUT SH. BAWA LALI HAS PURCHASED 5.5 ACRE AND EXCHANGED 3 ACRES (NOWHERE MENTIONED IN THE AGREEMENT). WHAT HAPPENED TO THE BALANCE AREA, NOTHING HAS MENTIONED . MOREOVER IN THE ABSENCE OF THAT INFORMATION, THE SA ID AGREEMENT BECAME NULL AND VOID AS THE AGREEMENT WAS NOT APPLIED IN TOTO. 4) NO LAND IDENTIFICATION WAS MENTIONED IN THE REAS ONS RECORDED TO IDENTIFY THE SITUATION OF LAND. 5) I HAD PURCHASED LAND ON 07.09.2005, WHEREAS AS P ER ORDER OF ITSC AND SUBMISSIONS OF SH. BAWA LALI THEY HAD PURCHASED LAND IN 2006 AND 2007, SO HOW IT CAN BE A SSUMED THAT THE SELLER HAD SOLD SAME PIECE OF LAND TO US A ND VIOLATED THE AGREEMENT, IF THE SELLER SOLD LAND TO US WITHOU T THE KNOWLEDGE OF SH. BAWA LALI, WHY HE REMAINED SILENT. 6) ON 07.09.2005, AT THE TIME OF PURCHASE OF LAND, THE TRANSACTION WAS IN GOOD FAITH AND THE SELLER HAS ME NTIONED IN REGISTERED DEED EXECUTED BEFORE SUB REGISTRAR TH AT THE LAND WAS FREE FROM ENCUMBRANCE. 8) THE REASONS RECORDED WAS ON THE BELIEF THAT THE ASSESSEE HAD PAID ON MONEY OTHER THAN THE REGISTERED PRICE TO TH E TUNE OF RS.5,35,697/- WHEREAS NO DOCUMENT SIGNED OR EXECUT ED BY THE ASSESSEE WAS MENTIONED, THUS THE REASONS WAS ON THE BASIS OF SUSPECT ONLY, WHICH IS AGAINST THE LAW AND FACTS. 9) LASTLY, ON THE BASIS OF JUDICIAL PRONOUNCEMENTS FAVOURING THE POSITION OF THE ASSESSEE, I HUMBLY REQUEST YOU TO D ROP THE ITA NO.734/ASR/2013 ASSESSMENT YEAR: 2006-07 4 PROCEEDINGS U/S 148 AND VACATE THE NOTICE IN THE IN TEREST OF NATURAL JUSTICE. 7. HOWEVER, THE AO PROCEEDED TO MAKE ASSESSMENT BY IGNORING THE OBJECTIONS OF THE ASSESSEE, WHICH WAS UPHELD BY THE LD. CIT(A). NOW, THE ASSESSEE IS IN APPEAL BEFORE ME. 8. THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ASSESSEE WAS NOT BEING ASSESSED TO TAX PRIOR TO THE NOTICE U/S 1 48, NOR DID HE HAVE A PAN DURING THE YEAR UNDER CONSIDERATION, I.E., AY 2006-07. HE FURTHER STATED THAT THE ASSESSEE IS A RESIDENT OF MANSA, HA VING PERMANENT ADDRESS AT PYARE LAL THEKEDAR STREET, MANSA AND THE NOTICE U/S 148 WAS ISSUED BY THE ITO, MUKTSAR, WHICH WAS RECEIVED BY A N EMPLOYEE OF SH. JANAK RAJ, WHO HAD ALSO PURCHASED THE LAND ALONGWIT H THE ASSESSEE AND IS ONE OF THE CO-OWNERS AT MUKTSAR. THIS MISTAKE WA S REALIZED BY THE AO, MUKTSAR AND HE ACCEPTED THAT THE JURISDICTION OF T HE CASE LIES WITH THE ITO, MANSA AND TRANSFERRED THE FILE ACCORDINGLY. HE FURTHER CONTENDED THAT THE ITO, MANSA LATER ON FRAMED THE ASSESSMENT ON THE BASIS OF THE NOTICE U/S 148 ISSUED BY THE ITO, MUKTSAR, WHO DID NOT HAVE THE JURISDICTION. THE LD. COUNSEL ALSO CONTENDED THAT T HE ITO, MANSA COULD NOT HAVE ASSUMED THE JURISDICTION ON THE BASIS OF A NOTICE ISSUED U/S 148 BY ANOTHER AO OF THE OTHER CITY. ACCORDINGLY, H E PLEADED THAT THE WHOLE PROCEEDINGS ARE VOID ABINITIO. IN SUPPORT OF HIS CASE, HE PLACED RELIANCE ON THE FOLLOWING JUDGMENTS: I) DCIT VS. ASHOK KUMAR ARORA, ITA NO.5156/DEL/20 11, ITAT, DELHI BENCH AT NEW DELHI. II) CIT VS. M.I. BUILDERS PVT. LTD., 349 ITR 271 (ALL . HC). III) MUKESH KUMAR VS. ITO, ITA NO.2358/DEL/2012, ITAT, DELHI BENCH AT NEW DELHI. IV) DCIT VS. RAM AGARWAL, ITA NO.756/LKW, ITAT, LUCKN OW BENCH V) INDER MOHAN KOHILI VS. ITO, ITA NO.5170/DEL/, ITA T, DELHI BENCH AT NEW DELHI. ITA NO.734/ASR/2013 ASSESSMENT YEAR: 2006-07 5 9. THE LD. COUNSEL FURTHER SUBMITTED THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE AFOREMENTIONED JUDGMENTS, W HICH ARE BINDING IN THIS CASE AND THE FACTS ARE ABSOLUTELY IDENTICAL IN SO FAR AS REGARDS THE DELHI BENCH DECISION OF THE TRIBUNAL IN THE CASE OF SH. ASHOK KUMAR ARORA, AND THEREFORE, THE ASSESSMENT FRAMED U/S 147 OF THE ACT, CONSEQUENTLY, IS BAD IN LAW. 10. AS REGARDS THE ISSUE OF NOTICE U/S 148, THE LD. COUNSEL SUBMITTED THAT THE SAME WAS NOT SERVED UPON THE ASSESSEE AND IT WAS SERVED UPON ONE SH. ASHOK KUMAR, AN EMPLOYEE OF A SHOPKEEPER, N AMELY, SH. JANAK RAJ. EVEN THE ADDRESS MENTIONED IN THE NOTICE WAS NOT OF THE ASSESSEE OR ANY MEMBER OF HIS FAMILY. THE ADDRESS WAS TOTALLY I NCOMPLETE. THE ASSESSEE IS NOT RELATED TO SH. JANAK RAJ OR TO SH. ASHOK KUMAR AND THUS, THE SERVICE OF NOTICE WAS BAD IN LAW, WHICH W AS CHALLENGED BEFORE THE ITO. HE FURTHER CONTENDED THAT SINCE THE SERVIC E OF NOTICE IS BAD IN LAW, THE JURISDICTION U/S 148 IS VOID ABINITIO. H E PLACED RELIANCE ON THE FOLLOWING JUDGMENTS IN SUPPORT OF HIS CONTENTIONS: I) GURCHARAN SINGH VS. ITO, ITA NO.332/ASR/2014, ITAT, AMRITSAR BENCH, AMRITSAR. II) CIT VS. SH. RAJESH KUMAR SHARMA, 322 ITR 235 (DELHI HC). III) CIT VS. CHETAN GUPTA, ITA NO.72 OF 2014 (DELHI H C). IV) ITO VS. BEDI ENTERPRISES, 114 TTJ (LUCK-TRIB.) 70 6 V) CIT VS. AVTAR SINGH, 3024 ITR 333 (P&H). VI) A.K. KOCHANDI VS. AGRICULTURAL INCOME TAX OFFICER, 110 ITR 406 (KERALA-HC). 11. THE LD. DR, ON THE OTHER HAND, PLACED STRONG RE LIANCE ON THE IMPUGNED ORDER. 12. HAVING HEARD BOTH THE PARTIES, I AM OF THE CONS IDERED VIEW THAT THAT THERE IS FORCE IN THE ARGUMENTS MADE BY THE LD . COUNSEL FOR THE ASSESSEE WITH REGARD TO REOPENING OF ASSESSMENT UND ER SECTION 148 OF THE ACT. IT IS AN ADMITTED FACT THAT THE ITO MANSA HAD NO JURISDICTION TO FRAME THE ASSESSMENT ON THE BASIS OF THE NOTICE ISS UED BY THE ITO, ITA NO.734/ASR/2013 ASSESSMENT YEAR: 2006-07 6 MUKTSAR AND AS SUCH, THE LD. CIT(A) WAS NOT JUSTIFI ED TO UPHOLD THE REOPENING OF THE CASE U/S 148 OF THE ACT. THE DECI SIONS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE ON THE ISSUE ARE S QUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. ACCORDINGLY, I REMI T THE ISSUE WITH REGARD TO REOPENING THE CASE U/S 148 OF THE ACT TO THE FIL E OF THE LD. CIT(A), WITH THE DIRECTION TO DECIDE THE SAME AFRESH, TAKING INT O ACCOUNT THE SUBMISSIONS OF THE ASSESSEES COUNSEL, AS NOTED ABO VE. THE ASSESSEE, NO DOUBT, SHALL COOPERATE IN THE FRESH PROCEEDINGS B EFORE THE LD. CIT(A) AND PRODUCE ALL THE DOCUMENTARY EVIDENCE. 13. SINCE I HAVE RESTORED THE JURISDICTIONAL ISSUE TO THE FILE OF THE LD. CIT(A) TO BE DECIDED AFRESH, THERE IS NO NEED TO GO INTO THE MERITS OF THE CASE AT THIS STAGE. 14. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13/01/20 16. SD/- (A.D. JAIN) JUDICIAL MEMBER DATED: 13/01/2016 /SKR/ COPY OF ORDER FORWARDED TO: 1. THE ASSESSEE: SH. SANDEEP KUMAR, MANSA. 2. THE ITO, WARD-1(4), MANSA. 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA 5. THE SR. DR, ITAT, ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH: AMRITSAR.