Braham Prakash Lakra , Delhi V. ITO, Ward- 67(1), New Delhi

ITA 7650/DEL/2018

• Counselvise Citation: [2019] 114 COUNSELVISE.COM (IT) 6215 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 03-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Reason to believe; Reassessment proceedings
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI SMC B ENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 7650/DEL/2018 [A.Y 2012-13] BRAHAM PRAKASH LAKRA VS. THE I.T.O D 12, RANHOLA EXTENSION WARD 67(1) MEERA ENCLAVE, DELHI NEW DELHI PAN: AASPL 9105 H (APPLICANT) (RESPONDENT) ASSESSEE BY : SHRI SACHIN KU MAR, ADV DEPARTMENT BY : SHRI PRADEEP SIN GH GAUTAM, SR. DR DATE OF HEARING : 18.11.2019 DATE OF PRONOUNCEMENT : 19.11.2019 ORDER WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE C ORRECTNESS OF THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] - 21, NEW DELHI DATED 17.09.2018 PERTAINING TO ASSESSMENT YEAR 2012-13. 2 2. THE CHALLENGE OF THE ASSESSEE IS TWO-FOLD FIRS TLY, THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT FRAMED U/ S 143(3) R.W.S 147 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO A S 'THE ACT']. THE CONTENTION OF THE ASSESSEE IS THAT THE INCOME TAX O FFICER HAS NO REASON TO BELIEVE TO INITIATE THE PROCEEDINGS U/S 147 OF THE ACT. 3. THE SECOND CHALLENGE IS ON MERITS WHERE ADDITION OF RS. 20,40,848/- MADE U/S 68 OF THE ACT HAS BEEN QUESTIONED. 4. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SSESSMENT PROCEEDINGS U/S 147 OF THE ACT WERE INITIATED ON TH E BASIS OF INFORMATION RECEIVED FROM THE INCOME TAX OFFICER [I&LD. CI]-II, NEW DELHI. THE SATISFACTION NOTE WAS RECORDED BY THE ASSESSING OFF ICER WHICH READS AS UNDER: A S P E R I NFORMATION RECEIVED FROM /TO (I&C1)- II, NEW DELHI VIDE LETTER TTO (I&CL)- I/UCB/DEP./9/20L4-15/2095 DATED 24.03.2016 REGARDING CASH DEPOSIT BY SHRI BHRAM PRAKASH LAKRA WAS TAKEN-UP FOR VERIFICATION UNDER AS PER THE INFORMATION. IT IS SEEN THAT THE ABOVE MENTIONED ASSES 3 SEE. PAN AASPL9105I1 HAS MADE CASH DEPOSIT AMOUNTING TO RS. 38 DURING THE 12. HOWEVER, NO RETU RN OF INCOME HAS BEEN FILED FOR 2012-13. IN VIEW OF THE ABOVE INFORMATION, I HAVE REASONS TO BELIEVE AN AMOUNT OF RS. 38 LAC CHARGEABLE TO TAX HAS ES/ ASSESSMENT WITHIN THE MEANING SECTION 147 OF THE I.T. ACT. 1961. IT IS A FIT CASE TO ISSUE NOTICE UNDER SECTI ON 148 OF THE INCOME TAX ACT. 1961. 5. ACCORDINGLY, NOTICE U/S 148 OF THE ACT WAS ISSU ED. IN RESPONSE TO THE SAME, THE ASSESSEE FURNISHED COPY OF RETURN OF INCOME FILED ON 24.12.2013 AND ASKED THE ASSESSING OFFICER TO TREAT THE SAME AS RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148 OF THE ACT. 6. THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THIS NOTICE AS THE SAME IS DEVOID OF ANY APPLICATION OF MIND. 7. ON A PERUSAL OF THE SATISFACTION NOTE MENTIONED HEREINABOVE, IT CAN BE SEEN THAT THE ASSESSING OFFICER HAS QUESTIONED T HE CASH DEPOSIT AMOUNTING TO RS. 38 LAKHS. I ALSO FIND THAT THE AS SESSING OFFICER HAS 4 CATEGORICALLY MENTIONED THAT NO RETURN OF INCOME WA S FILED FOR ASSESSMENT YEAR 2012-13. 8. THE BANK DEPOSIT DETAILS ARE MENTIONED AT PAGE 2 OF THE ASSESSMENT ORDER. A PERUSAL OF THE SAME SHOWS THAT TOTAL CASH FOUND TO BE DEPOSITED ON VARIOUS DATES AMOUNTS TO RS. 28.50 LAKHS. THIS MEANS THAT THE ASSESSING OFFICER IS CONTRADICTING HIMSELF. SECOND LY, THE ASSESSING OFFICER SAYS THAT NO RETURN OF INCOME WAS FILED WHEREAS, AT SECOND PARA OF HIS ORDER, THE ASSESSING OFFICER HIMSELF STATES THAT TH E ASSESSEE HAS FURNISHED COPY OF RETURN OF INCOME ELECTRONICALLY FILED ON 24 .12.2013 DECLARING TOTAL INCOME OF RS. 5,84,130/-. 9. IN MY CONSIDERED OPINION, REASONS GIVEN BY THE ASSESSING OFFICER ARE DEVOID OF ANY APPLICATION OF MIND SINCE NOT ONLY TH E ASSESSING OFFICER ASSUMED INCORRECT FIGURE OF CASH DEPOSITS BUT ALSO COMPLETELY IGNORED THE FACT THAT RETURN FOR THE YEAR UNDER CONSIDERATION W AS ALREADY FILED ON 24.12.2013. THESE FACTS CAN BE GATHERED FROM THE BO DY OF THE ASSESSMENT ORDER ITSELF. 5 10. THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE O F SUNRISE EDUCATION TRUST, 92 TAXMANN.COM 74 HAS OBSERVED AS UNDER: ' 5. HAVING HEARD LD. COUNSEL FOR THE PARTIES AND HAV ING PERUSED THE DOCUMENTS ON RECORD, IT COULD BE STRAIGHTWAY SE EN THAT THE ASSESSING OFFICER IN THE REASONS RECORDED, PROCEEDE D ON THE ERRONEOUS FOOTING THAT THE ASSESSEE HAD NOT FILED R ETURN AT ALL. THE FIRST PREMISE FOR ISSUING THE NOTICE WAS THUS F ACTUALLY INCORRECT. IT IS NOW NOT DISPUTED BY THE REVENUE TH AT THE ASSESSEE DID FILE RETURN OF INCOME FOR THE YEAR UND ER CONSIDERATION WHICH WAS DULY ACKNOWLEDGED BY THE DE PARTMENT. THE ENTIRE REASONING THUS PROCEEDED ON THE WRONG PR EMISE THAT THE ASSESSEE HAD NEVER FIELD THE RETURN. THIS ITSEL F WOULD BE SUFFICIENT TO ANNUL THE NOTICE OF REOPENING THE ASS ESSMENT.' 11. ON IDENTICAL SET OF FACTS, THE COORDINATE BENCH IN THE CASE OF ASHWANI KUMAR IN ITA NO. 129/ASR/2015 ORDER DATED 23.02.201 6 HAS HELD AS UNDER: '7. THE FACTS ARE NOT DISPUTED. A BARE PERUSAL OF T HE REASONS RECORDED FOR ISSUANCE OF NOTICE U/S 148 OF THE ACT, SHOWS THAT THE ONLY MATERIAL AVAILABLE BEFORE THE AO WAS THE A IR INFORMATION OF THE ASSESSEE HAVING DEPOSITED AN AMO UNT OF RS. 11.60 LAKHS IN HIS SAVINGS BANK ACCOUNT. REMARKABLY , THE REASONS 6 RECORDED DID NOT EVEN MENTION THE BANK IN WHICH SUC H SAVINGS BANK ACCOUNT WAS MAINTAINED. THE ASSESSEE, AS AVAIL ABLE FROM THE FIRST PAGE OF THE ASSESSMENT ORDER, WAS ISSUED A NO TICE U/S 148 OF THE ACT, IN PURSUANCE TO THE AFORESAID REASONS. THE ASSESSMENT ORDER U/S 143(3) OF THE ACT IS DATED 25. 03.2013. THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 05.1 0.2005 AND IT HAD BEEN STATED IN RESPONSE TO THE NOTICE U/S 14 8 OF THE ACT THAT THIS RETURN BE TREATED AS HAVING BEEN FILED IN RESPONSE TO THIS NOTICE. IN 'BIR ITA NOS. 745/DEL/2014 & 4144/D EL/2018 BAHADUR SINGH SIJWALI' (SUPRA), LIKE IN THE PRESENT CASE, THE REASONS RECORDED INDICATED THAT CASH DEPOSITS HAD B EEN MADE IN THE BANK ACCOUNT OF THE ASSESSEE. THE TRIBUNAL HELD THAT THE MERE FACT THAT THE DEPOSITS HAVING BEEN MADE IN A B ANK ACCOUNT DOES NOT INDICATE THAT THESE DEPOSITS CONSTITUTE AN INCOME WHICH HAS ESCAPED ASSESSMENT. IT WAS OBSERVED THAT THE RE ASONS RECORDED DID NOT MAKE OUT A CASE THAT THE ASSESSEE WAS ENGAGED IN SOME BUSINESS AND THE INCOME FROM SUCH A BUSINES S HAD NOT BEEN RETURNED BY THE ASSESSEE. IN THE CASE AT HAND ALSO, THE REASONS RECORDED DO NOT CONTAIN ANY SUCH RECITAL. T HE TRIBUNAL HELD THAT THE FACTUM PER SE, OF DEPOSITS IN THE BAN K ACCOUNT OF THE ASSESSEE COULD NOT BE MADE THE BASIS FOR HOLDIN G THE VIEW THAT INCOME HAD ESCAPED ASSESSMENT, OVER-LOOKING TH AT THE SOURCES OF THE DEPOSITS NEED NOT NECESSARILY BE THE INCOME OF THE ASSESSEE; AND THAT AS SUCH, THE REASONS RECORDE D WERE NOT 7 SUFFICIENT TO BELIEVE ESCAPEMENT OF INCOME; THAT RA THER, THEY WERE REASONS TO SUSPECT ESCAPEMENT OF INCOME, WHICH WAS NOT ENOUGH FOR ISSUANCE OF A NOTICE U/S 148 OF THE ACT. ' 12. A SIMILAR VIEW WAS TAKEN BY THE DELHI BENCH IN THE CASE OF BAHADUR SINGH SIJWALI 53 TAXMANN.COM 366. THE RELEVANT FIND INGS READ AS UNDER: '8. LET US, IN THE LIGHT OF THIS LEGAL POSITION, REVE RT TO THE FACTS OF THE CASE BEFORE US. ALL THAT THE REASONS RE CORDED FOR REOPENING INDICATE IS THAT CASH DEPOSITS AGGREGATING TO RS. 10,24,100/- HAVE BEEN MADE IN THE BANK ACCOUNT OF TH E ASSESSEE, BUT THE MERE FACT THAT THESE DEPOSITS HAVE BEEN MADE IN A BANK ACCOUNT DOES NOT INDICATE THAT THESE DEPOSITS CONSTITUTE AN INCOME WHICH HAS ESCAPED ASSESSMENT. TH E REASONS RECORDED FOR REOPENING THE ASSESSMENT DO NO T MAKE OUT A CASE THAT THE ASSESSEE WAS ENGAGED IN SOME BUSI NESS AND THE INCOME FROM SUCH A BUSINESS HAS NOT BEEN RETUR NED BY THE ASSESSEE. AS WE DO NOT HAVE THE LIBERTY TO E XAMINE THESE REASONS ON THE BASIS OF ANY OTHER MATERIAL OR FACT, OTHER THAN THE FACTS SET OUT IN THE REASONS SO RECOR DED, IT IS NOT OPEN TO US TO DEAL ITA NOS. 745/DEL/2014 & 4144/DEL/2018 WITH THE QUESTION AS TO WHETHER THE AS SESSEE COULD BE SAID TO BE ENGAGED IN ANY BUSINESS; ALL THAT IS TO BE EXAMINED IS WHETHER THE FACT OF THE DEPOSITS, PER SE, IN THE BANK ACCOUNT OF THE ASSESSEE COULD BE BASIS OF HOLDIN G THE VIEW THAT THE INCOME HAS ESCAPED ASSESSMENT. THE ANS WER, IN 8 OUR HUMBLE UNDERSTANDING, IS IN NEGATIVE. THE ASSESSIN G OFFICER HAS OPINED THAT AN INCOME OF RS. 10,24,100/- HAS ESCAPED ASSESSMENT OF INCOME BECAUSE THE ASSESSEE HAS RS. 10,24,100/- IN HIS BANK ACCOUNT BUT THEN SUCH AN OPINI ON PROCEEDS ON THE FALLACIOUS ASSUMPTION THAT THE BANK DEPO SITS CONSTITUTE UNDISCLOSED INCOME, AND OVERLOOKS THE FACT THAT THE SOURCES OF DEPOSIT NEED NOT NECESSARILY BE INCOM E OF THE ASSESSEE. OF COURSE, IT MAY BE DESIRABLE, FROM THE PO INT OF VIEW OF REVENUE AUTHORITIES, TO EXAMINE THE MATTER IN DETAIL, BUT THEN REASSESSMENT PROCEEDINGS CANNOT BE RESORTED TO ONLY TO EXAMINE THE FACTS OF A CASE, NO MATTER HOW DESIR ABLE THAT BE, UNLESS THERE IS A REASON TO BELIEVE, RATHER THAN SUSPECT, THAT AN INCOME HAS ESCAPED ASSESSMENT. 9. LD. DEPARTMENTAL REPRESENTATIVE HAS REFERRED TO A NUMBER OF JUDICIAL PRECEDENTS IN SUPPORT OF HER STAND THAT EV EN DEPOSITS IN THE BANK ACCOUNT, AS HAVING COME TO THE N OTICE OF THE ASSESSING OFFICER THROUGH AIR, CAN BE REASON EN OUGH FOR HOLDING THE BELIEF THAT INCOME HAS ESCAPED ASSESSMEN T. SHE HAS RELIED UPON THE DECISIONS IN THE CASES OF CIT VS. NOVA PROMOTERS & FINLEASE (P) LTD . [2012] 342 ITR 169/206 TAXMANN 207/18 TAXMANN.COM 217 (DELHI) BUT THEN NONE OF THE QUESTIONS BEFORE HON'BLE HIGH COURT HAD ANYTHING TO DO WITH REOPENING OF ASSESSMENT AND THIS DECISION CANNO T, THEREFORE, BE TAKEN AS AN AUTHORITY ON THE LEGAL ISS UE WHICH DID NOT EVEN COME UP FOR SPECIFIC ADJUDICATION BEFORE THEIR LORDSHIPS. AS FOR HER RELIANCE ON HON'BLE SUPREME COUR TS 9 JUDGMENT IN THE CASE OF PHOOL CHAND BAJRANG LAL VS. ITO [1993] 203 ITR 456/69 TAXMAN 627, THAT WAS CASE IN WHICH THEIR LORDSHIPS CONCLUDED THAT THE AO 'RIGHTLY INITIATED THE REASSESSMENT PROCEEDINGS ON THE BASIS OF SUBSEQUEN T INFORMATION, WHICH WAS SPECIFIC RELEVANT AND RELIABL E, AND AFTER RECORDING THE REASONS FOR FORMATION OF HIS OW N BELIEF THAT IN THE ORIGINAL ITA NOS. 745/DEL/2014 & 4144/D EL/2018 ASSESSMENT PROCEEDINGS, THE ASSESSEE HAD NOT DISCLOS ED THE MATERIAL FACTS TRULY AND FULLY AND, THEREFORE, INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT' AND WE ARE UNABLE TO SEE ANYTHING ON THE FACTS OF THE PRESENT CASE WHI CH ARE MATERIALLY SIMILAR TO THE FACTS OF THE SAID CASE. A S REGARDS HER RELIANCE ON THE DECISION OF A COORDINATE BENCH IN T HE CASE OF MITHILA CREDIT SERVICES LTD. VS. ITO [IT APPEAL NO . 1078/DELHI OF 2013, DATED 23.05.2014], IT IS IMPORT ANT TO BEAR IN MIND THE FACT THAT IT WAS A CASE IN WHICH T HE ASSESSING OFFICER HAD REOPENED THE ASSESSMENT ON THE BASIS OF RECEIPT OF INFORMATION FROM DIRECTORATE OF INVESTIGATION, A ND, AS NOTED BY THE ASSESSING OFFICER IN THE REASONS RECOR DED FOR REOPENING THE ASSESSMENT, 'THE NAME OF THE ASSESSEE FIGURES AS ONE OF THE BENEFICIARIES OF THESE ALLEGED BOGUS TRANSACTIONS' IN THE INFORMATION GIVEN BY THE DIREC TORATE. IF THE ASSESSEE WAS A BENEFICIARY OF SUCH A SCAM, THE I NCOME WAS INDEED TO HAVE BEEN TAXED IN ITS HANDS BUT THEN IN THE CASE BEFORE US THE ONLY REASON FOR REASSESSMENT PROCE EDINGS WAS THE FACT OF DEPOSIT OF BANK ACCOUNT WHICH BY ITSE LF DOES 10 NOT LEAD TO INCOME BEING TAXED IN THE HANDS OF THE ASSESSEE. LD. DEPARTMENTAL REPRESENTATIVE HAS REFERRED TO SEVER AL OTHER JUDICIAL PRECEDENTS IN SUPPORT OF THE PROPOSITION THAT AT THE STAGE OF INITIATION OF REASSESSMENT PROCEEDIN GS, ALL THAT IS TO BE SEEN AS EXISTENCE, RATHER THAN ADEQUAC Y, OF THE MATERIAL TO COME TO THE CONCLUSION THAT INCOME HAS E SCAPED ASSESSMENT. TO US, THERE CANNOT BE ANY, AND THERE IS NO, DOUBT ON THE CORRECTNESS OF THIS PROPOSITION BUT THEN, AS WE HAVE ELABORATELY EXPLAINED EARLIER IN THIS ORDER, T HE MATERIAL MUST INDICATE INCOME ESCAPING ASSESSMENT RATHER THEN DESIRABILITY OF FURTHER PROBE IN THE MATTER WHICH MA Y OR MAY NOT LEAD TO INCOME ESCAPING THE ASSESSMENT. ON THE B ASIS OF REASONS AS RECORDED IN THIS CASE, SUCH AN INFERENCE ABOUT INCOME ESCAPING ASSESSMENT, IN OUR HUMBLE UNDERSTANDIN G, CANNOT BE DRAWN. 10. IN VIEW OF THE REASONS SET OUT ABOVE, AS ALSO BE ARING IN MIND ENTIRETY OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE REASONS RECORDED BY THE ASSESSING OFFICER, AS S ET OUT EARLIER, WERE NOT SUFFICIENT REASONS FOR REOPENING T HE ITA NOS. 745/DEL/2014 & 4144/DEL/2018 ASSESSMENT PROCEED INGS. WE, THEREFORE, QUASH THE REASSESSMENT PROCEEDINGS. A S THE REASSESSMENT ITSELF IS QUASHED, ALL OTHER ISSUES ON M ERITS OF THE ADDITIONS, IN THE IMPUGNED ASSESSMENT PROCEEDINGS , ARE RENDERED ACADEMIC AND INFRUCTUOUS.' 11 13. IN THE LIGHT OF JUDICIAL DECISIONS DISCUSSED HE REINABOVE, AND ON FINDING PARITY IN THE FACTS WITH THE FACTS OF THE C ASE IN HAND, I AM OF THE CONSIDERED OPINION THAT THE ASSUMPTION OF JURISDICT ION BY THE ASSESSING OFFICER BY ISSUING NOTICE U/S 148 OF THE ACT IS BAD IN LAW. I ACCORDINGLY, QUASH THE NOTICE ISSUED U/S 148 OF THE ACT, THEREBY QUASHING THE ASSESSMENT ORDER. 13. SINCE THE ASSESSMENT ORDER HAS BEEN QUASHED, I DO NOT FIND IT NECESSARY TO DWELL INTO THE MERITS OF THE CASE. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO. 7650/DEL/2018 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19.11. 2019. SD/- [N.K. BILLAIYA] ACCOUNTANT MEMBER DATED: 19 TH NOVEMBER, 2019 VL/ 12 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER