SUJATA RAJENDRA NIKALJE, MUMBAI V. ITO WD 22(2)(2), NAVI MUMBAI

ITA 88/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56082 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 07-12-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 06-01-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K B MENON
• Keywords: Unexplained cash credit; Gift; Opportunity of being heard
• Section: 143(3); 68; 144

Judgement Text

1 ITA NO. 87,88,89/M UM/2010, & 3871/M/2008 MRS. SU JATA RAJENDRA NIKALJE IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI N.V. VASUDEVAN, J.M. AND SHRI R.K. PAN DA, A.M. ITA NO. 87 & 88/MUM/2010 (ASST YEAR 2003-04) ITA NO. 3871/MUM/2008 (ASST YEAR 2004-05) ITA NO. 89/MUM/2010 (ASST YEAR 2004-05) MRS. SUJATA RAJENDRA NIKALJE, L3/17 VRINDAVAN, TILAK NAGAR, CHEMBUR, MUMBAI 400 071. VS I.T.O. 22(2), NAVI MUMBAI. (APPELLANT) (RESPONDENT) PAN NO. AAKPDN 2366D APPELLANT BY S HRI PRAKASH PANDIT RESPONDENT BY SHRI P.K.B. MENON DATE OF HEARING 7.12.2011 DATE OF PRONOUNCEMENT 14.12.11 ORDER PER BENCH. ITA NO. 3871/MUM/2008 FILED BY THE ASSESSEE IS DIRE CTED AGAINST THE ORDER DATED 8.2.2008 OF THE COMMISSIONER OF INCOME TAX (A)- XXII, MUMBAI RELATING TO ASSESSMENT YEAR 2004-05. ITA NO. 87/MUM /2010 FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 14.10. 2009 OF THE COMMISSIONER OF INCOME TAX (A)- 33, MUMBAI RELATING TO ASSESSMENT YEAR 2003-04 CONFIRMING THE PENALTY U/S 271(1)(C) OF THE ACT. ITA NO.88/MUM/2010 FILED BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER DATED 12.10.2009 OF THE COMMISSIONER OF INCOME TAX (A)- 3 3, MUMBAI RELATING TO ASSESSMENT YEAR 2003-04 IN PARTLY ALLOWING THE ADDI TION MADE BY THE A.O. ITA NO. 89/MUM2010 FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER 2 ITA NO. 87,88,89/M UM/2010, & 3871/M/2008 MRS. SU JATA RAJENDRA NIKALJE DATED 12.10.2009 OF THE COMMISSIONER OF INCOME TAX (A)- 33, MUMBAI RELATING TO ASSESSMENT YEAR 2004-05 CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE. 2. ITA NO. 3871/MUM/2008 WAS EARLIER DISMISSED BY T HE TRIBUNAL FOR NON-APPEARANCE. SUBSEQUENTLY, THE TRIBUNAL VIDE M. A. 600/MUM/2009 ORDER DATED 21.1.2010 RECALLED ITS EARLIER ORDER. T HUS, ITA NO. 3871/MUM/2008 IS A RECALLED MATTER. 3. THERE IS A DELAY OF 20 DAYS IN FILING OF THE APP EAL IN ITA NO. 3871/MUM/2008. THE ASSESSEE HAS FILED A CONDONATIO N PETITION EXPLAINING THE REASONS FOR DELAY IN FILING OF THE APPEAL. AFTE R CONSIDERING THE REASONS FOR DELAY IN FILING OF THIS APPEAL AND AFTER HEARING BO TH THE SIDES, THE DELAY IN FILING OF THE APPEAL IS CONDONED. 4. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED HER RETURN OF INCOME ON 26.3.2003 FOR A.Y. 2003-04 DECLARING TOTA L INCOME OF RS. 3,23,700/-. SIMILARLY, FOR A.Y. 2004-05, THE ASSES SEE FILED HER RETURN OF INCOME ON 27.1.2009 DECLARING TOTAL INCOME OF RS. 2 ,86,040/-. THE A.O. IN THE ORDER PASSED U/S 144 DETERMINED THE INCOME AT R S. 11,99,960/- FOR THE A.Y. 2003-04. IN THE SAID ORDER, THE A.O. MADE AD DITION OF RS. 2,75,310/- ON ACCOUNT OF INCOME FROM HOUSE PROPERTY AND RS. 6, 00,953/- AS UN- EXPLAINED CASH CREDIT U/S 68 OF THE ACT. IN APPEAL , THE LD. CIT(A) DIRECTED THE A.O. TO COMPUTE THE INCOME FROM HOUSE PROPERTY FOLLOWING THE PROVISIONS OF SECTION 22 TO 24 OF THE ACT. HOWEVER , HE SUSTAINED THE ADDITION OF RS. 6,00,953/- ADDED BY THE A.O. U/S 68 OF THE A CT. 4.1 SIMILARLY, FOR A.Y. 2004-05, THE A.O. MADE AN A DDITION OF RS. 2,75,310/- ON ACCOUNT OF INCOME FROM HOUSE PROPERTY AND RS. 44 LACS ON 3 ITA NO. 87,88,89/M UM/2010, & 3871/M/2008 MRS. SU JATA RAJENDRA NIKALJE ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE AC T BEING GIFTS RECEIVED BY THE ASSESSEE. IN APPEAL, THE LD. CIT(A) UPHELD THE ACTION OF THE A.O. IN MAKING THE ADDITION OF RS. 44 LACS U/S 68 OF THE AC T. IN ABSENCE OF ANY FURTHER SUBMISSION BY THE ASSESSEE, HE ALSO SUSTAIN ED THE ADDITION MADE BY THE A.O. ON ACCOUNT OF INCOME FROM HOUSE PROPERTY. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSE REFERRING TO THE GROUNDS OF APPEAL FOR A.Y. 2003-04 AND 2004-05 SUBMITTED THAT THE ORDER P ASSED U/S 144 OF THE ACT FOR A.Y. 2003-04 AND U/S 143(3) FOR A.Y. 2004-0 5 ARE VOID AB INITIO IN THE ABSENCE OF SERVICE OF NOTICE AS CONTEMPLATED BY PROVISIONS OF SECTION 282 OF THE ACT. HE SUBMITTED THAT THE ASSESSEE WAS ARRE STED AND WAS IN CUSTODY DURING 26 TH DECEMBER, 2005 TILL 17 TH SEPTEMBER, 2007 DUE TO WHICH PROPER DETAILS COULD NOT BE FURNISHED BEFORE THE A.O. WHO PASSED THE ORDER ON 30 TH DECEMBER, 2005 FOR A.Y. 2003-04 AND ON 22 ND DECEMBER, 2006 FOR A.Y. 2004-05. HE SUBMITTED THAT ALTHOUGH CERTAIN DETAILS WERE FILED DURING THE REMAND PROCEEDINGS, DUE TO DEPRESSED MENTAL STATE O F THE ASSESSEE, SHE WAS NOT IN A POSITION TO FILE SUFFICIENT DETAILS TO SUB STANTIATE HER CASE. HE SUBMITTED THAT THE ASSESSMENT ORDERS ARE VOID AB IN ITIO SINCE NO NOTICE U/S 143(2) WAS ISSUED AND SERVED ON THE ASSESSEE WITHIN THE STIPULATED TIME AS PRESCRIBED UNDER THE ACT. IN HIS ALTERNATE CONTENT ION, HE SUBMITTED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE A.O. WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE WI TH EVIDENCE TO THE SATISFACTION OF THE A.O. REGARDING INCOME FROM HOUS E PROPERTY AND THE GIFTS RECEIVED. 6. THE LD. D.R., ON THE OTHER HAND, PRODUCED THE CA SE RECORDS AND SUBMITTED THAT SOMEBODY HAS RECEIVED THE NOTICE ON BEHALF OF THE ASSESSEE AS PER THE SIGNATURE IN THE NOTICE ISSUED U/S 143(2 ) FOR A.Y. 2003-04. SIMILARLY, FOR A.Y. 2004-05, THE RECORDS SHOW THAT THE NOTICE HAS BEEN ISSUED BY POST. HE, HOWEVER, SUBMITTED THAT NEITHE R THE POSTAL RECEIPT NOR 4 ITA NO. 87,88,89/M UM/2010, & 3871/M/2008 MRS. SU JATA RAJENDRA NIKALJE THE ACKNOWLEDGEMENT IS AVAILABLE FOR A.Y. 2004-05 F OR ISSUE OF SUCH NOTICE. HE SUBMITTED THAT THE ASSESSEE WAS GIVEN ADEQUATE O PPORTUNITY OF BEING HEARD DURING REMAND PROCEEDINGS AND THE ASSESSEE WA S UNABLE TO PRODUCE SUFFICIENT DETAILS TO JUSTIFY THE GIFTS RECEIVED AN D THE INCOME FROM HOUSE PROPERTY SO DECLARED. THEREFORE, THE ORDER OF THE L D. CIT(A) BEING IN ACCORDANCE WITH LAW SHOULD BE UPHELD FOR BOTH THE Y EARS. 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PURSUED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. AFTER CONSIDE RING THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE AND THE ALTERNATE CONT ENTION THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE A.O., WE FIND FO RCE IN THE ALTERNATE CONTENTION OF THE ASSESEE. ADMITTEDLY, THE ASSESSE E WAS IN CUSTODY FROM 25 TH DECEMBER, 2005 TILL 17 TH SEPTEMBER, 2007 DURING WHICH THE ASSESSMENT FOR A.Y. 2003-04 AND 2004-05 WERE FRAMED. ALTHOUGH THE ASSESSEE WAS GIVEN OPPORTUNITY DURING REMAND PROCEEDINGS, WE FIND MERI T IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT DUE TO HER DE PRESSED MENTAL STATE OF AFFAIRS FOR BEING BEHIND BARS FOR ABOVE 2 YEARS, TH E ASSESSEE WAS NOT IN A POSITION TO SUBSTANTIATE HER CASE AND, THEREFORE, O NE MORE OPPORTUNITY MAY BE GIVEN TO THE ASSESSEE. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN THE INTERESTS OF JUSTICE, WE DEEM IT PROPER TO R ESTORE THE ISSUES FOR BOTH THE ASSESSMENT YEARS TO THE FILE OF THE A.O. FOR DE NOVO ASSESSMENT. THE A.O. SHALL GIVE ADEQUATE OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE AND DECIDE THE ISSUE AS PER LAW. WE HOLD AND DIRECT ACCORDING LY. THE GROUNDS RAISED BY THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE ACCO RDINGLY ALLOWED FOR STATISTICAL PURPOSES. ITA 87/MUM/2010 FOR A.Y. 2003-04 & ITA 89/MUM/2010 FOR A.Y. 2004-05 (BY ASSESSEE). 8. THE ASSESSEE IN BOTH THE APPEALS HAS CHALLENGED THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE LEVY OF PENALTY U/S 271(1) (C) FOR A.Y. 2003-04 AND 5 ITA NO. 87,88,89/M UM/2010, & 3871/M/2008 MRS. SU JATA RAJENDRA NIKALJE 2004-05 RESPECTIVELY. SINCE THE QUANTUM APPEALS HA VE BEEN RESTORED TO THE FILE OF THE A.O. FOR FRESH ADJUDICATION, THEREFORE, THE PENALTY LEVIED U/S 271(1)(C) FOR BOTH THE ASSESSMENT YEARS, WHICH HAS BEEN UPHELD BY THE LD. CIT(A), DOES NOT SURVIVE. HOWEVER, THE A.O. IS AT L IBERTY TO INITIATE PENALTY PROCEEDINGS AS PER LAW IF REQUIRED AFTER COMPLETION OF THE ASSESSMENTS FOR A.Y. 2003-04 & 2004-05 RESPECTIVELY. WE HOLD AND D IRECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLO WED FOR STATISTICAL PURPOSE. 9. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 14.12.2011. SD/- ( N.V. VASUDEVAN ) JUDICIAL MEMBER SD/- ( R K PANDA ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED: 14.12.2011 RK COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT, CONCERNED, MUMBAI 4 CIT(A) - CONCERNED, MUMBAI 5 DR BENCH E 6 MASTER FILE /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI