Sh. Harbhajan Singh, Ludhiana V. ITO, W-5, Khanna

ITA 882/CHANDI/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0540 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 11-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ZENIA HANDA
• Keywords: Income from undisclosed sources; Bonafide belief; Source of fund; Condonation of delay; Reason to believe
• Section: 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH SMC CHANDIGARH !', # BEFORE: SMT. DIVA SINGH, JM ./ ITA NO. 882/CHD/2018 / ASSESSMENT YEAR : 2009-10 SHRI HARBHAJAN SINGH S/O SHRI BHAG SINGH, VILLAGE-SOHIAN, PO- MALOUD, DISTT. -LUDHIANA. VS THE ITO, WARD 5, KHANNA. ./ PAN NO: AFWPS0897Q / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI SUDHIR SEHGAL # ! ' / REVENUE BY : SMT. ZENIA HANDA, SR.DR $ % ! &/ DATE OF HEARING : 20.11.2018 '()* ! &/ D ATE OF PRONOUNCEMENT : 30.11.2018 $%/ ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSA ILING THE CORRECTNESS OF THE ORDER DATED 05.10.2017 OF CIT(A)-2, LU DHIANA PERTAINING TO 2009-10 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS : 1.A ). THAT THE LD. ASSESSING OFFICER HAS ERRED IN REOPENI NG THE CASE BY ISSUING NOTICE U/S 148 OF THE INCOME TAX ACT, 1961. B). THAT THERE WAS NO REASON TO BELIEVE WITH THE AS SESSING OFFICER FOR REOPENING OF THE CASE U/S 147 AND, AS SUCH, THE REO PENING OF THE CASE IS BAD IN LAW. C). THAT THE FACT THAT THE ASSESSEE HAD NOT FILED H IS RETURN OF INCOME OR WAS NOT HAVING PAN NUMBER OR WAS NOT BEING ASSESSED TO TAX DOES NOT AUTOMATICALLY MEAN THAT THE CASH WAS DEPOSITED OUT OF UNDISCLOSED SOURCES OF INCOME. D). THAT THE REASONS AS RECORDED BY THE ASSESSING O FFICER, ARE, THUS VAGUE AND THE VERY BASIS OF REOPENING OF THE CASE, THEREFORE, DESERVES TO BE QUASHED IN THE LIGHT OF THE JUDGMENTS OF DELHI HIGH COURT AND DIFFERENT BENCHES OF THE ITAT. 2. NOTWITHSTANDING THE ABOVE SAID GROUNDS, THE LD. CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 25,55,000/- IN RESPE CT OF CASH DEPOSITED IN THE BANK ACCOUNT MAINTAINED BY THE ASSESSEE WITH J& K BANK, MOHALI. 3. THAT THE CONFIRMATION OF ADDITION BY THE CIT(A) IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA 882/CHD/2018 A.Y. 2009-10 PAGE 2 OF 5 2. BEFORE ADDRESSING ISSUES WHICH ARISE FOR CONSIDERATION IN THE PRESENT APPEAL, THE LD. AR INVITED ATTENTION TO CONDONATION OF DELAY APPLICATION FILED ON BEHALF OF THE ASSESSEE IN RESPONSE TO TH E DELAY OF 176 DAYS POINTED OUT BY THE REGISTRY. RELYING UPON THE APPLICATION SUPPORTED BY AN AFFIDAVIT OF THE COUNSEL, IT WAS HIS SUBMIS SION THAT THE DELAY HAS OCCURRED ON ACCOUNT OF MEDICAL EMERGENCIES OF T HE COUNSEL WHO REPRESENTED THE CASE BEFORE THE CIT(A) AS HE WAS T HEREAFTER ENTRUSTED BY THE ASSESSEE ALSO TO REPRESENT HIS CASE BEFORE THE ITAT. THE RELEVANT EXTRACTS FROM THE CONDONATION OF DELAY APPLIC ATION RELIED UPON ARE EXTRACTED HEREUNDER FOR READY REFERENCE : 3. THAT REGARDING THE DELAY OF 176 DAYS, IT IS VERY HUMBLY SUBMITTED THAT THE ASSESSEE HAD APPOINTED SH.VIJAY KUMAR SHAR MA AS ADVOCATE FROM LUDHIANA AND WHO APPEARED BEFORE THE WORTHY CIT(A)- 2, LUDHIANA AND REPRESENTED THE CASE ON BEHALF OF THE ASSESSEE AND THAT ORDER WAS RECEIVED BY THE ASSESSEE ON 18.10.2017 AND THE SAME WAS HANDED OVER LATERON BY THE ASSESSEE IN THE FIRST WEEK OF DECEMBER 2017 TO SH. VIJAY SHA RMA, ADVOCATE. HOWEVER, SH. VIJAY SHARMA ADVOCATE HAD BEEN SUFFERI NG FROM ACUTE DEPRESSION AND OTHER RELATED DISEASES, SINCE NOVEMB ER 2017 AND WAS BEING TREATED MAINLY FOR 'DEPRESSION' AND WAS UN DER MEDICATION FROM DIFFERENT HOSPITALS AS PER MEDICAL CERTIFICATES FRO M DR. AMIT K. DHIMAN OF DAYA NAND MEDICAL COLLEGE AND HOSPITAL AND DR. D.P. SINGH OF DEEP HOSPITAL, LUDHIANA ARE BEING ATTACHED HEREWITH AND FROM IT TRANSPIRES THAT HE WAS UNDER TREATMENT FROM NOVEMBER 2017 ONWARDS. 4. DUE TO THESE DISEASES, HE WAS LATERON DIAGNOSED FOR 'CLOT' IN THE BRAIN AND FOR WHICH, HE WAS OPERATED UPON IN DEEP HOSPITA L, LUDHIANA ON 9 TH OF APRIL, 2018 AND REMAINED IN THE HOSPITAL FOR FEW DA YS AND AGAIN, HE HAS BEEN VISITING THE HOSPITAL TIME AND AGAIN FOR REGULAR DR ESSING & CHECK-UP. 5. LATERON, HE WAS AGAIN OPERATED ON 15 TH OF MAY 2018 AT DEEP HOSPITAL, LUDHIANA AND, THEREAFTER, ALSO FOR FEW DAYS , HE WA S INVOLVED IN RELATED PROCEDURE I.E. REGULAR MEDICAL CHECK-UP/ DRESSING E TC. 6. HE ALSO GOT TREATMENT, LATERON, FROM POST GRADUATE INSTITUTE, CHANDIGARH ON 25.05.2018 AND, THUS, WAS UNDER MEDI CATION. THUS, ALL ALONG THE COUNSEL OF THE ASSESSEE WAS NOT MEDICALLY FIT FOR PREPARATION OF APPEAL AND DUE TO ABOVE, THERE WAS LOSS OF MEMORY A S WELL AND, THUS, HE FORGOT TO PREPARE THE APPEAL OF THE ASSESSEE AND TH E ASSESSEE WAS UNDER A BONAFIDE BELIEF THAT HIS APPEAL HAD BEEN FILED. ALL SUCH EVIDENCES ARE BEING ATTACHED IN THE SEPARA TE PAPER BOOK BEING FILED HEREWITH AND IT WAS ON ACCOUNT OF THE ABOVE S AID CONTINUOUS DISEASES/SURGERIES THAT HE COULD NOT GET THE APPEAL PREPARED AND, LATERON, THE APPEAL WAS PREPARED IN THE MONTH OF JUNE, 2018 AND THE WAS FILED ON 11.06.2018. IN VIEW OF THE ABOVE SAID FACTUAL FACTS AND CIRCUMS TANCES AND EVIDENCES ON RECORD, IT IS SUBMITTED THAT THERE WAS REASONABLE C AUSE IN NOT FILING THE APPEAL WITHIN THE STIPULATED TIME ON ACCOUNT OF DEP RECIATION, FOLLOWED BY TWO BRAIN SURGERIES AND DUE TO WHICH, THE ADVOCATE CONCERNED WAS HOSPITALIZED AND ON BED REST AND, AS SUCH, IT IS RE QUESTED THAT THE DELAY OF 176 DAYS MAY, PLEASE, BE CONDONED & OBLIGE. ITA 882/CHD/2018 A.Y. 2009-10 PAGE 3 OF 5 AFFIDAVIT OF SHRI VIJAY SHARMA I VIJAY SHARMA S/O SHRI MOHAN LAL R/O B-1-1161, VIS HNUPURI, STREET NO.5, CIVIL LINES, LUDHIANA DO HEREBY SOLEMNLY STAT E AND AFFIRM AS UNDER :- 1. THAT I WAS APPOINTED AS COUNSEL IN THE CASE OF SHRI HARBHAJAN SINGH S/O SHRI BHAG SINGH IN CONNECTION WITH APPEAL FOR ASSESSMENT YEAR 2009-10 BEFORE THE WORTHY CIT (A)-2 LUDHIANA. 2. T HAT I HAD ATTENDED THE HEARINGS BEFORE THE WORTHY C IT(A)-2, LUDHIANA IN CONNECTION WITH THE ABOVE SAID CASE. IN THE ABOVE S AID CASE, THE ORDER DISMISSING THE APPEAL OF THE ASSESSEE WAS GIVEN TO ME IN THE 1ST WEEK OF DECEMBER 2017 AND AT THAT TIME, I WAS SUFFERING FRO M ACUTE DEPRESSION AND OTHER RELATED DISEASES AND WAS UNDER THE TREATMENT FROM DAYANAND MEDICAL COLLEGE & HOSPITAL, LUDHIANA AND DEEP HOSPITAL, LUD HIANA AND WAS ADVISED REST. 3. THAT LATERON, I WAS ALSO OPERATED UPON FOR TWO BRAI N SURGERIES IN THE MONTH OF APRIL 2018 AND MAY 2018 AND LATERON, EVEN GOT TR EATMENT FROM POST GRADUATE INSTITUTE, CHANDIGARH. 4. THAT I HAD FILED SEPARATE APPLICATION ALONGWITH T HE EVIDENCES OF THE ABOVE SAID FACTUAL FACTS OF MY DISEASE AND SURGERIES AND IT IS, THEREFORE, PRAYED THAT THE DELAY OF 176 DAYS MAY, PLEASE BE CONDONED AS PER DETAILED FACTS GIVEN IN THE APPLICATION. 3. THE LD. SR.DR CONSIDERING THE APPLICATION ON RECORD ALONG WITH THE SUPPORTING AFFIDAVIT OF THE COUNSEL MR. VIJAY SHARMA AVAILA BLE IN THE PAPER BOOK RUNNING FROM PAGE 1 TO 11 SUBMITTED THAT SH E HAS NO OBJECTION TO THE DELAY BEING CONDONED. 4. I HAVE GONE THROUGH THE FACTS, SUBMISSIONS AND THE E VIDENCES RELIED UPON. CONSIDERING THESE IN THE LIGHT OF THE SUBMISSIO NS OF THE PARTIES BEFORE THE BENCH, THE DELAY OF 176 DAYS POINTED OUT BY THE REGISTRY IS TAKEN AS EXPLAINED AS ADMITTEDLY IN THE PECULIA R FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, THE ASSESSEE WAS HA NDICAPPED ON ACCOUNT OF THE MEDICAL EMERGENCIES OF THE COUNSEL. THE DE LAY IS, ACCORDINGLY, CONDONED. 5. ADDRESSING THE ISSUES RAISED IN THE PRESENT APPEAL, TH E LD. AR SOUGHT TO ASSAIL THE ORDER UPHOLDING THE ASSESSMENT ORD ER ON JURISDICTION AS WELL AS ON MERITS. ACCORDINGLY, IN ORDER TO ADDRESS THE JURISDICTIONAL ISSUE, HE WAS REQUIRED TO READ OUT FROM THE COPY OF THE REASONS RECORDED BY THE AO FOR RE-OPENING THE ASSESSM ENT. LD. AR SUBMITTED THAT THE ASSESSEE WAS NEVER CONFRONTED WITH THE REASONS RECORDED AND THESE ARE NOT EXTRACTED IN THE ORDERS P ASSED EITHER BY THE AO OR THE CIT(A). REFERRING TO THE RECORD, IT WAS SUBMITTE D THAT THE ASSESSEE IS AN AGRICULTURIST AND HE ENTERED INTO AN AGRE EMENT TO SELL PROPERTY AT LUDHIANA TO SHRI KULVIR SINGH ALSO AN AGRICULTU RIST. ITA 882/CHD/2018 A.Y. 2009-10 PAGE 4 OF 5 HOWEVER, THE AO TOOK THE STATEMENT OF SHRI KULVIR SINGH , THE PERSON WITH WHOM THE ASSESSEE HAD ENTERED INTO AN AGREEMENT TO SELL WHEREFROM THE DEPOSITS OF RS. 25,55,000/- REFLECTED IN THE S PECIFIC BANK ACCOUNT EMANATED AND THE AO THOUGH NOT A HANDWRITING EXPERT, FORMED THE BELIEF THAT THE SIGNATURES OF THE PERSON SHRI KULVIR S INGH DID NOT MATCH THE SIGNATURES ON THE AGREEMENT AND CONCLUDED T HAT THESE WERE NOT HIS SIGNATURES. THE ASSESSEE HAS OBJECTED TO THE RECORDING OF STATEMENT OF SHRI KULVIR SINGH AT HIS BACK AND HAS ALSO S TATED THAT THERE IS NO DENIAL BY SHRI KULVIR SINGH. ON THE COPY OF RE ASONS RECORDED, IT WAS HIS SUBMISSION THAT IT WAS NEVER MADE AV AILABLE TO THE ASSESSEE AND THE ASSESSEE'S ATTEMPTS WITH THE TAX DE PARTMENT AT THE APPELLATE STAGE ALSO HAVE MET WITH OBSTRUCTION AS THE AS SESSEE IS BEING ADVISED TO COME IN AN RTI AND OBTAIN A COPY OF REASONS RECORDED. 6. THE LD. SR.DR WAS REQUIRED TO ADDRESS THE DISCUSSION O N REASONS RECORDED AND IN THE ABSENCE OF ANY DISCUSSION THEREON IN THE 14 PAGED ASSESSMENT ORDER OR SIX PAGED IMPAGED ORDER WAS UNAB LE TO ADDRESS THE SAME. HOWEVER, THE LD. SR.DR INVITED ATTENTION TO THE SIGNA TURES OF SHRI KULVIR SINGH IN THE SCANNED COPY AT PAGE 5 AND 6 OF THE ASSESSMENT ORDER SUBMITTED THAT THEY APPEAR NOT TO MATCH WITH TH E DOCUMENTS RELIED UPON BY THE ASSESSEE. 7. PARTIES WERE REQUIRED TO ADDRESS WHETHER THE ASSES SEE AT THE RELEVANT POINT OF TIME OWNED ANY SPECIFIC PROPERTY AT LU DHIANA AS THE SOURCE OF THE DEPOSITS IS STATED TO BE FROM CONTEMPLATED SALE OF THE SAID PROPERTY. THE LD. AR SUBMITTED THAT AT THE RELEVANT POIN T OF TIME, THE ASSESSEE OWNED THE PROPERTY ULTIMATELY WHETHER IT WAS SOLD OR NOT HE WAS NOT AWARE. THE SR.DR IN THE ABSENCE OF ANY FINDING TH EREON, WAS UNABLE TO REBUT THE STATEMENT. 8. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATER IAL AVAILABLE ON RECORD. ON A PERUSAL OF THE IMPUGNED ORDER, I FIND TH AT THERE IS NO REFERENCE TO THE SAID BASIC FACT ALSO. ACCORDINGLY, CONSIDE RING THE VARIOUS SHORTCOMINGS EVIDENT IN THE MANNER IN WHICH THE A SSESSMENT HAS BEEN DONE AND THE ISSUES HAVE BEEN CONSIDERED, IT IS DEEMED APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER BACK TO TH E FILE OF THE AO WITH THE DIRECTION TO CONFRONT THE ASSESSEE WITH A COPY OF THE REASONS RECORDED. IN CASE THE SIGNATURES OF SHRI KULVIR SINGH IN THE STATEMENT RECORDED ARE BEING RELIED UPON BY THE REVENUE AND IT IS THE CONCLUSION ITA 882/CHD/2018 A.Y. 2009-10 PAGE 5 OF 5 OF THE AO THAT THESE DO NOT BELONG TO SHRI KULVIR SINGH A ND IN CASE IT IS DEEMED MATERIAL TO ADDRESS THIS ISSUE FOR DETERMINING THE CORRECT NESS OF THE ASSESSEES EXPLANATION, THEN THE TAX AUTHORITIES AR E DIRECTED TO PROCEED AFTER TAKING THE REPORT OF HANDWRITING EXPERT A ND FOLLOWING THE DUE PROCESS OF LAW CONFRONT THE SAME TO THE ASSESSEE A ND SHRI KULVIR SINGH. IT IS FURTHER SEEN THAT IN THE ORDERS, THERE IS NO DISCUSSION ON THE BASIC ASPECT WHETHER THE TAXPAYER IN THE YEAR UNDER C ONSIDERATION OWNED THE SPECIFIC RESIDENTIAL HOUSE AT LUDHIANA OR NOT. T HE RELEVANT FACTS ARE DIRECTED TO BE BROUGHT ON RECORD. THE FACT T HAT ULTIMATELY THE TRANSACTIONS FRUCTIFIED OR NOT WOULD BY ITSELF NOT DETRACT FR OM ASSESSEE'S CLAIM IF THE ASSESSEE IS ABLE TO DEMONSTRATE THE FACTUM OF RECEIPT OF MONEY AT THE RELEVANT POINT OF TIME. THE ISSUE, ACCORDINGL Y IS RESTORED TO THE FILE OF THE AO WITH THE DIRECTION TO FIST ADDRESS TH E JURISDICTIONAL ISSUE AFTER GIVING A COPY OF THE REASONS RECORDED TO THE ASSESSEE WHICH HE IS DUTY BOUND TO DO SO AND THEREAFTER IN TERMS OF TH E ABOVE DIRECTIONS FOLLOWING THE DUE PROCEDURES, PASS A SPEAKING OR DER IN ACCORDANCE WITH LAW. SAID ORDER WAS PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ITSELF. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER,2018. SD/- ( !' ) (DIVA SINGH) # / JUDICIAL MEMBER ' ( (+ ! ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. $ / / CIT 4. $ / ()/ THE CIT(A) 5. -23 4, & 4, 67839/ DR, ITAT, CHANDIGARH 6. 38 :%/ GUARD FILE (+ $ / BY ORDER, ; #/ ASSISTANT REGISTRAR