Sh. Satish Kumar, Meerut V. ITO, Meerut

ITA 843/DEL/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7489 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 01-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 12-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL SENIOR
• Assessee Lawyers: VINOD KUMAR GOYAL
• Keywords: Capital asset; Opportunity of being heard
• Section: 142(1); 154; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.1025/DEL./2013 (ASSESSMENT YEAR : 2006-07) ITA NO.843/DEL./2015 (ASSESSMENT YEAR : 2006-07) SHRI SATISH KUMAR, VS. ITO, WARD 2 (3), S/O SHRI BAL KISHAN, MEERUT. 2371/5, NEW GOVINDPURI, KANKER KHERA, MEERUT. (PAN : ABHPA6832A) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VINOD KUMAR GOYAL, ADVOCATE REVENUE BY : SMT. ANIMA BARNWAL, SENIOR DR DATE OF HEARING : 01.06.2016 DATE OF ORDER : 03.06.2016 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : SINCE BOTH THE AFORESAID APPEALS ARE INTER-CONNECTE D, THE SAME ARE BEING DISPOSED OFF WITH CONSOLIDATED ORDER TO AVOID THE REPETITION OF DISCUSSION. 2. APPELLANT, SHRI SATISH KUMAR (HEREINAFTER REFERR ED TO AS THE ASSESSEE), BY FILING AFORESAID APPEALS SOUGHT TO S ET ASIDE THE ITA NO.1025/DEL./2013 ITA NO.843/DEL./2015 2 IMPUGNED ORDER DATED 06.09.2012 PASSED BY THE COMMI SSIONER OF INCOME-TAX (APPEALS), MEERUT QUA THE QUANTUM PROCEE DINGS AND IMPUGNED ORDER DATED 04.02.2015 PASSED BY THE COMMI SSIONER OF INCOME-TAX (APPEALS), MEERUT, AFFIRMING THE PENALTY ORDER DATED 11.03.2013 PASSED U/S 271(1)(C) OF THE INCOME-TAX A CT, 1961 (FOR SHORT THE ACT), FOR THE ASSESSMENT YEAR 2006-07 O N THE GROUNDS INTER ALIA THAT :- ITA NO.1025/DEL/2013 1. THAT LD. A.O. AS WELL AS CIT (A) IS IN ERROR IN HOLDING THAT RETURN FILED BY THE ASSESSEE FOR WHICH THE ASSESSEE DENY AND A.O. MADE ASSESSMENT AND CONFIRM BY CIT (A) IS ARBITRARY, UNJUST AND NOT ACCORDING TO L AW. EVEN THE ASSESSEE SIGNED BLANK RETURN AND HIS COUNS EL FILED HIS RETURN BY SHOWING FAKE INCOME COULD NOT CONSTITUTE REAL INCOME. THE ASSESSEE RELY UPON FOL LOWING SUPREME COURT JUDGMENT (I) STATE BANK OF TRAVANCORE 158 ITR 102 (II) GODHRA ELECTRICITY CO. LTD. 225 ITR 746 2. THE ASSESSEE ON STATEMENT ON OATH CLEARLY STATE THAT HE HAS NOT HAVING AGRICULTURE LAND AND ANY CAPITAL ASSETS AND HIS INCOME IS ONLY 3,000/- TO 4,000/- IN A MONT H. A.O. HAS NOT JUSTIFIED IN MAKING ADDITION OF RS.2,7 2,000/- & RS.1,80,000/- U/S 68 OF I.T. ACT, 1961. 3. THAT LD. A.O. IGNORED THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO NOTICE U/S 142(1) AT RS.80, 000/-. 4. THAT THE ASSESSEE HAS RIGHT TO ADD/DELETE OR MOD IFY ANY GROUNDS DURING THE APPEAL PROCEEDING. ITA NO.843/DEL/2015 ITA NO.1025/DEL./2013 ITA NO.843/DEL./2015 3 1. THAT LD. CIT (A), MEERUT IS IN ERROR IN STATING THAT THE ASSESSEE HAS ADMITTED THAT HE HAS FURNISHED INA CCURATE PARTICULARS OF HIS INCOME. THE ASSESSEE NEITHER AD MITTED BEFORE NOR BEFORE CIT (A), MEERUT. HENCE, THE ASSE SSEE FILED APPLICATION U/S 154 BEFORE CIT (A), MEERUT, THEREFORE, CONFIRMATION OF PENALTY ON THE BASIS OF INCORRECT FACTS IS BAD IN LAW. 2. THAT LD. CIT (A), MEERUT IS IN ERROR IN STATING THAT CASE LAW QUOTED BY THE ASSESSEE ARE NOT OF ANY HELP BECAUSE THE FACTS OF EACH CASE, WHICH HAS BEEN CITE D IS UNIQUE TO ITSELF. CIT (A) EVEN NOT TO BOTHER TO DISTINGUISH THE CASE LAW PARTICULARLY CIT VS. RELIA NCE PETROPRODUCTS PVT. LTD., 322 ITR 158 (SC). 3. THAT THE ASSESSEE HAS RIGHT TO ADD/DELETE OR MOD IFY ANY GROUNDS DURING THE APPEAL PROCEEDING. 3. BRIEFLY STATED THE FACTS OF THIS CASE ARE : ON T HE BASIS OF RETURN OF INCOME DATED 29.08.2006 FILED BY THE ASSESSEE DE CLARING NET INCOME OF RS.3,71,842/-, CASE WAS SUBJECTED TO SCRU TINY AND CONSEQUENTLY, NOTICES UNDER SECTION 143(2) AND 142 (1) OF THE ACT WERE SERVED UPON THE ASSESSEE AND IN RESPONSE THERE TO, SHRI SATISH KUMAR, ASSESSEE PUT IN APPEARANCE, FILED REQUISITE DOCUMENTS AND ALSO DISCUSSED THE CASE. A PERUSAL OF THE RETURN O F INCOME SHOWS THAT THE ASSESSEE HAS SHOWN AGRICULTURAL INCOME FRO M SUGARCANE, WHEAT, CATTLE FEED ETC. TO THE TUNE OF RS.3,15,800/ - MINUS RS.43,800/- ON ACCOUNT OF EXPENSES FOR ELECTRICITY, DIESEL, SEED, LABOUR ETC. (NET AGRICULTURAL INCOME RS.2,72,000/-) . HOWEVER, DURING THE ASSESSMENT PROCEEDINGS, ASSESSEE GOT REC ORDED THE STATEMENT THAT HE DOES NOT HAVE ANY AGRICULTURAL LA ND IN HIS NAME ITA NO.1025/DEL./2013 ITA NO.843/DEL./2015 4 NOR HE IS AWARE OF ANY SUCH INCOME SHOWN IN THE RET URN OF INCOME. AO CAME TO THE CONCLUSION THAT ASSESSEE IS NOT HOLD ING ANY AGRICULTURAL LAND AND NOR HAVE CARRIED OUT ANY AGRI CULTURAL ACTIVITIES DURING THE YEAR UNDER ASSESSMENT, THUS FAILED TO EX PLAIN THE INCOME RECORDED IN THE RETURN OF INCOME AND THEREBY MADE A N ADDITION U/S 68 OF THE ACT TO THE TUNE OF RS.2,72,000/-. 4. FROM THE BALANCE SHEET OF THE ASSESSEE AS ON 31. 03.2006, IT IS NOTICED BY THE AO THAT ASSESSEE HAS INTRODUCED CAPI TAL AT RS.1,80,000/- TO RUN THE BUSINESS ACTIVITIES IN THE NAME AND STYLE AS UJJAWAL TENT HOUSE AND THE ASSESSEE WAS CALLED UPON TO EXPLAIN THE SAME. ASSESSEE ATTENDED THE PROCEEDINGS AND GO T RECORDED HIS STATEMENT; THAT HE HAS NOT INVESTED ANY SUCH CAPITA L OF RS.1,80,000/- IN ANY OF THE BUSINESS. FINDING THE EXPLANATION GIVEN BY THE ASSESSEE NOT TENABLE, AO PROCEEDED TO MAKE A DDITION OF RS.1,80,000/- AND ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.5,51,840/-. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) WHO HAS DISMISSED THE APPEAL. FEELING AGGRIEVED, THE ASSES SEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT AP PEAL. 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ITA NO.1025/DEL./2013 ITA NO.843/DEL./2015 5 ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.1025/DEL/2013 7. BARE PERUSAL OF THE ASSESSMENT ORDER DATED 11.12 .2008 AND IMPUGNED ORDER PASSED BY CIT (A) DATED 06.09.2012 S HOW THAT THE AO HAS MADE THE ASSESSMENT WITHOUT APPLYING HIS MIN D AND WITHOUT EXAMINING THE STATEMENT GOT RECORDED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS THAT HE HAS NO AGRICU LTURE LAND TO ATTRACT THE AGRICULTURAL INCOME NOR HE HAS GOT ANY BUSINESS TO INTRODUCE THE CAPITAL OF RS.1,80,000/-, RATHER HE I S UNAWARE AS TO WHO HAS FIELD THE RETURN OF INCOME IN QUESTION LYIN G AT PAGE 6 OF THE PAPER BOOK. 8. WHEN THE FACTUM OF FILING OF THE RETURN OF INCOM E IN QUESTION ON THE BASIS OF WHICH ADDITION HAS BEEN MADE BY THE AO AND AFFIRMED BY THE LD. CIT (A) IS EXAMINED IN THE LIGH T OF THE RETURN OF INCOME CLAIMING NIL INCOME FILED BY THE ASSESSEE ON 13.02.2008 UNDISPUTEDLY RECEIVED AND PERUSED BY THE REVENUE AU THORITIES, THE STATEMENT GOT RECORDED BY THE ASSESSEE DURING THE A SSESSMENT PROCEEDINGS HOLDS GROUND THAT SINCE HE DOES NOT OWN ANY AGRICULTURAL LAND TO ATTRACT AGRICULTURAL INCOME NO R HE HAS INTRODUCED ANY CAPITAL OF RS.1,80,000/- IN THE BUSI NESS RATHER HE IS ITA NO.1025/DEL./2013 ITA NO.843/DEL./2015 6 WORKING ON COMMISSION BASIS AND HE IS EARNING RS.3, 000/- PER MONTH, THE QUESTION OF FILING RETURN OF INCOME IN Q UESTION DOES NOT ARISE. 9. MOREOVER, WHEN AO HIMSELF HAS ADMITTED IN THE AS SESSMENT ORDER THAT ASSESSEE IS NOT OWNER OF ANY AGRICULTUR AL LAND TO CARRY OUT THE AGRICULTURAL ACTIVITIES NOR IT IS PROVED DU RING THE ASSESSMENT PROCEEDINGS THAT ASSESSEE HAS INTRODUCED FRESH CAPI TAL OF RS.1,80,000/-, HE WAS REQUIRED TO CONDUCT THE INVES TIGATION AS TO WHO HAS FILED THE RETURN OF INCOME ON THE BASIS OF WHICH ADDITION HAS BEEN MADE IN SUPPRESSION TO THE RETURN OF INCOM E SHOWING NIL INCOME FILED BY THE ASSESSEE. EVEN OTHERWISE, ASSE SSEE CANNOT BE EXPECTED TO FILE THE RETURN OF INCOME ON THE BASIS OF FORGED DOCUMENT I.E. KHASRA KHATONI / KISSAN BAHI. THERE IS NOT AN IOTA OF EVIDENCE ON THE FILE IF ANY SUCH INCOME WAS EARN ED BY THE ASSESSEE DURING THE YEAR UNDER ASSESSMENT. 10. SO, WE ARE OF THE CONSIDERED VIEW THAT THE MATT ER IS REQUIRED TO BE RESTORED TO THE FILE OF THE AO TO EXAMINE AFR ESH IF THE ASSESSEE HAS ANY SUCH SOURCE OF INCOME AND EARNED THE INCOME IN QUESTION DURING THE YEAR UNDER ASSESSMENT, IN THE LIGHT OF T HE FACT THAT ASSESSEE ALLEGED TO HAVE NOT FILED ANY SUCH RETURN, AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN TH E LIGHT OF THE OBSERVATIONS MADE HEREIN BEFORE. ITA NO.1025/DEL./2013 ITA NO.843/DEL./2015 7 ITA NO.843/DEL/2015 11. SINCE THE PENALTY ORDER DATED 11.03.2013 IMPOSI NG PENALTY OF RS.87,312/- U/S 271(1)(C) OF THE ACT IS AN OFF-S HOT OF THE ASSESSMENT ORDER DATED 11.12.2008 AFFIRMED VIDE IMP UGNED ORDER PASSED BY THE LD. CIT (A), WHICH STANDS SET ASIDE, THE PENALTY PROCEEDINGS ARE ALSO NOT SUSTAINABLE, HENCE SET ASI DE TO BE DECIDED AFRESH AFTER DECISION ON THE QUANTUM PROCEEDINGS, I F ANY. 12. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, BOTH THE AFORESAID APPEALS FILED BY THE ASSESSEE ARE HEREBY ALLOWED FO R STATISTICAL PURPOSES AND FILES ARE ORDERED TO BE RESTORED TO TH E FILE OF AO TO DECIDE AFRESH AFTER PROVIDING AN OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE. ORDER PRONOUNCED IN OPEN COURT ON THIS 3 RD DAY OF JUNE, 2016. SD/- SD/- (PRASHANT MAHARISHI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 3 RD DAY OF JUNE, 2016 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A), MEERUT. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.