SHRI SURJIT SINGH, NAWANSHAHAR V. INCOME TAX OFFICER , NAWANSHAHAR

ITA 90/ASR/2022

AI Insights

The case involves a series of appeals by Sh. Surjit Singh and Sh. Navraj Singh against the orders of the Income Tax Officer, Nawanshahr, and the Commissioner of Income-tax (Appeals), Jalandhar, concerning the assessment years 1999-2000 and 2000-01. The primary issue was the alleged unexplained cash payments amounting to Rs. 48.50 lakhs made during the purchase of agricultural land, which were over and above the apparent consideration of Rs. 32.74 lakhs. The Tribunal considered the legal precedents and the orders of the Hon'ble Punjab & Haryana High Court, which had previously addressed similar issues in the case of Jagtar Singh, leading to the conclusion that the additions made were not justified.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115083 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-08-2023
• Assessment Year: 1999-2000
• Appeal Filed On: 10-05-2022
• Other Referred Cases: Jagtar Singh vs. State
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIGVIJAI KUMAR CHAUDHARY
• Keywords: Principle of natural justice; Condonation of delay; Set aside
• Section: 68; 148; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 Sh. Surjit Singh, And Sh. Navraj Singh Through L/H Rajinder Kaur, Chandigarh Road, Nawanshar. [PAN: -BAFPS3479H] (Appellant) Vs. IncomeTaxOfficer, Nawanshar. (Respondent) Appellant by Sh. J. S. Bhasin, Adv Respondent by Sh. Digvijai Kumar Chaudhary, Sr.DR. Date of Hearing 08.08.2023 Date of Pronouncement 21.08.2023 ORDER Per: Bench: A batch of three appeals of two assessee’s are directed against the order of the ld. Commissioner of Income-tax (Appeals)-1Jalandhar, (in brevity ‘the CIT(A)’) order passed u/s 250 (6) of the Income-tax Act, 1961 (in brevity the Act) for assessment year 2000-01, 1999-00 & 2000-01. The impugned order was emanated from the order of the ld. Income Tax Officer, Ward- Nawanshahr,(in brevity the ld. AO) order passed u/s 143(3)/147 of the Act. I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 2 2. These appeals were filed with delay of 740 days. The assessee filed petition for condonation of delay and explained that the severe health issues and other health problems occurred. The assessee further informed that the assessee is duly covered two years with an order of the Hon’ble Supreme Court in Suo Motu Writ Petition (C) NO. 3 Of 2020 date of order 10/01/2022 considering the Covid Pandemic. Accordingly, the delay was extended till 28.02.2022 by the order of Hon’ble Apex Court.The ld. DR had not made any objection related to condonation petition. Accordingly, the delay of 740 days is condoned. 3. At the outset, all the appeals are under the same factual backdrop and have a common issue. All the appeals are taken together, heard together, and disposed of together. ITA No. 90/Asr/2022is taken as lead case. ITA No. 90/Asr/2022 4. The assessee has taken the following grounds: 1. That the Id CIT(A) misdirected herself in law and facts, in upholding the assumption of jurisdiction by the ITO by invoking the provisions of section 147/148. 2. That when the material relied upon to record such reasons had become nonest by virtue of Hon’ble Punjab & Haryana High Court order on the core issue, it was not competent of the Id.CIT(A) to still uphold the validity of reasons recorded and in further sustaining the additions made by AO, in total defiance to High Court order. I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 3 3. That the Id.CIT(A) erred in summarily rejecting the assessee’s claim that the impugned transactions were assessable in HUF capacity and not in individual case of assessee. 4. That the alleged unexplained credits in bank accounts, sustained by Id.CIT(A) to the extent of Rs.17,23,550/- (18,70,500-1,46,950) ignoringassessees’ explanation in a most causal, summary and laconic manner, is unsustainable in law and facts of the case. 4.1 That the ld.CIT(A), as directed by the Hon’ble ITAT, ought to have considered the supporting documents filed as additional evidence in first appeal, and further called for the" same, if at all it were not available in her file. Summary rejection of assessee’s explanation sans such documents, without further opportunity, is travesty of justice. 5. That the ld.CIT(A) further committed grave legal error in sustaining the addition of Rs. 16,87,180/- for the alleged unexplained investment in land, even in disregard to the order of Hon’ble Punjab & Haryana High Court in the case of one Jagtar Singh, already followed by her predecessor to delete the addition. 6. That assessee’s most plausible explanation, filed with corroborative evidence, seeking deletion of the entire additions made, ought to have been objectively considered rather than rejecting the same on a fake pretext. I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 4 7. That the order under appeal is wholly against law, perverse on facts, against natural justice, hence, liable to be set aside.” 5. Brief fact of the case is that both the assessee in relation father and son and both has deceased, and both was agriculturist by profession. The legal heir was implemented for appeal proceeding. In impugned assessment years both the assessee purchased 131 Kanals of agriculture land in village Kishan pur, Tehsil Balachaur, Distt Nawanshahr from Sh Jagtar Singh & his wife Gurpreet Kaur, of Ropar by way of eight registered sale deeds executed in two years. It was alleged that in the above land deal, over and above the apparent consideration of Rs.32.74.000/-. The assessees’ cases were reopened U/s 148 based on information supplied by ITO W-6(2), Ropar coupled with another letter received on 22.05.2003 followed by letter No. CIT(A)/Chd/2003-04/279 dated 5/7.8.2003. from CIT(A) Chandigarh to ITO Nawanshahr. intimating that Sh Surjit Singh and his son Navraj Singh had purchased 131 Kanals of agriculture land in village Kishanpur and it was alleged that in the above land deal, over and above the apparent consideration of Rs.32.74.000/-. cash payments of Rs.48.50 lacs were made by the assessees herein. The ld. AR has accepted the fact that during assessment of the seller Sh. Jagtar Singh, that the excess cash deposited in his bank accounts, was claimed to have been received from this assessee, which he supported with a few forged cash receipts bearing latter’s signatures. Though the ITO did not believe the contention of Jagtar Singh and I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 5 made addition of the said cash in his assessment. The Id. CIT(A) Chandigarh deleted the addition, and thereafter, referred the matter to ITO Nawanshahr to reopen the cases of the buyers. The assessments were framed and orders were passed on dated 24.03.2005 with addition of alleged cash payment 48.5 lakh. The assessee was being unsuccessful in 1 st appeal and filed appeal before ITAT- Amritsar Bench. The said bench set aside the appeal order. 6. The ld. AR first argued and submitted that the appeal is placed before the ITAT-Amritsar bench in third round. The appellate authority during adjudication had not considered the order of the Hon’ble Jurisdictional Punjab & Haryana High Court in the assessee’s own case. After the order of second round of appeal by challenging the order of ITAT, Amritsar Bench, the assessee filed appeal before the Jurisdictional High Court. The Hon’ble Jurisdictional High Court has taken the view in favour of the assessee. 6.1 The ld. AR submitted the written submission and clarified the issue through his written submission which is extracted as below: “a) Shri Navraj Singh has been pursuing all the three appeals since early 2005 against assessment orders passed by ITO Nawanshar on 24.03.2005 after reopening the cases u/s. 148. While in first two casesfor AY 1999-2000 & 2000-01, he was impleaded as L/H of his deceased father.Shri Surjit Singh, the third case for AY 2000-01 was initiated against him personally. I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 6 b) The assessee being illiterate agriculturist, no return was filed for any of these years. As noted by the Id.ITO in opening para of assessment order, these cases were reopened u/s. 148, based on information supplied by ITO W-6(2), Ropar Vide his letter No.504 dated 31.05.2002 coupled with another letter received on 22.05.2003 followed by letter No.CIT(A)/Chd/2003-04/279 dated 5/7.8.2003. from CIT(A) Chandigarh to ITO Nawanshahr. intimating that Sh Surjit Singh and his son Navraj Singh had purchased 131 Kanals of agriculture land in village Kishanpur, Tehsil Balachaur, Distt Nawanshahrfrom Sh Jagtar Singh & his wife Gurpreet Kaur, of Ropar, in FY 1998-99 and 1999-2000, by way of eight registered sale deeds executed in two years. It was alleged that in the above land deal, over and above the apparent consideration of Rs.32.74.000/-. cash payments of Rs.48.50 lacs were made by the assessees herein. It was in fact, during assessment of the seller Sh. Jagtar Singh, that the excess cash deposited in his bank accounts, was claimed to have been received from this assessee, which he supported with a few forged cash receipts bearing latter’s signatures. Though the ITO did not believe the contention of Jagtar Singh and made addition of the said cash in his assessment, the Id.CIT(A) Chandigarh, deleted the addition, and thereafter, referred the matter to ITO Nawanshahr to reopen the cases of the buyers, the present appellants. c) Since the registered sale deeds for above land were executed in two years separately in favour of Surjit Singh & Navraj Singh, three assessment orders were passed on 24.03.2005, two of Sh Surjit Singh and one of Sh Navraj Singh, making the impugned additions of cash paid in respective years, with some more I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 7 additions made for other credits in bank accounts. Statements of a few witnesses were recorded by the ITO Nawanshar at assessee’s back to justify the additions made. d) The first appeals preferred before the Id.CIT(A) Jalandhar, were substantially rejected but for some petty relief given, vide orders dated 15.06.2009 (copy at PB page 21-34). Assessee preferred second appeals before the Hon’ble ITAT Amritsar and filed additional evidence in the shape of affidavits of the persons who had deposed against him before ITO Nawanshahr. The ITAT vide its consolidatedorder dated 24.11.2009 in ITA No.s.352- 353(ASR)2009, set aside the issue of purchase of 16 acres of land back to CIT(A) Jalandhar for fresh consideration. e) In the second round, the Id.CIT(A) Jalandhar vide order dated07.08.2013, (copy at APB pg. 35-39) deleted the impugned addition of Rs.48.50 lacs, made in three cases, by relying upon the order of Hon’ble P&H High Court dated 02.12.2010 in ITA No.373 of 2206, in the case of seller Sh Jagtar Singh. Pertinently, in the case of Jagtar Singh, though the order of CIT(A) Chandigarh, favouring Jagtar Singh was sustained by the ITAT Chandigarh dismissing the department’s appeal, however the Hon’ble P&H High Court, in revenue’s further appeal, reversed the order of ITAT and upheld the order of AO, by holding that the cash deposited in the bank account of seller was not sufficiently explained to have been received from the buyers of land. f) So however, the ld.CIT(A) Jalandhar, in his orders passed on 07.08.2013, confirmed other additions, earlier sustained by his predecessor, since the ITAT while setting aside the matter vide its I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 8 order dated 24.11.2009 had not given any finding or directions on such other issues/grounds.” 6.2 The ld. AR further argued and invited our attention in appeal order page 22 para 8.6 which is reproduced as below: “8.6 Another plea taken by the assessee is in the case of Sh. Jagtar Singh Hon’ble P& H High Court has allowed appeal of the revenue and relief provided to him on the basis that cash deposits in the case of Sh. Jagtar Singh were out of sale proceedings given over and above by the assessee has been reversed. In this regard it is noted that from the evidence available in the case of the assessee, it is admitted by him that Rs. 14,50,000/- was paid over and above the sale consideration. The evidence available in the case of the assessee were not brought in the knowledge of the Hon’ble P&H High Court and no observation have been made by the Hon’ble P& H High Court in this regards. For detailed reasoning as noted in Para 8.3 above, these grounds of appeal are dismissed.” 6.3 The ld. AR again placed that the appellate authority in order dated 15.06.2009 Appeal No. 22/05/2006 –CIT(A)/Jal has reproduced the order of Hon’ble Punjab & Haryana High Court. The relevant para 9& 10 of the order of appellate authority are inserted as below: “9. In pursuance of the directions of the Hon’ble ITAT, Amritsar Bench, Amritsar, Sh. Bal Kishan, Sh. Jit Singh and Sh. Parminderjit I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 9 Singh, Advocate were summoned and examined afresh by my Ld. predecessor. During the set aside proceedings before me in the above cases, it transpired that the Hon’ble Punjab and Haryana High Court vide their order in ITA No.373 of 2006 dated 02.12.2010 (A.Y. 2000-01), has reversed the appellate order of the Ld. CIT(A), Chandigarh/Patiala (Appeal No.105/P/2001-02 dated 27.03.2002 and the Hon’ble ITAT, Chandigarh (ITA No.507/Chandi/2002 dated 16.11.2005) for the A. Y. 2000-01 in the case of Sh. Jagtar Singh, on the basis of which I.T.O.. Nawanshahr has initiated assessment proceedings under reference. 10. The Hon’ble Jurisdictional High Court has held (in the case of Sh. Jagtar Singh,(ITA No.373 of 2006) as under:- "The point for consideration in this appeal is, whether cash deposits which were found in the bank accounts of the assessee had been duty explained by him, or not, and the CIT(A) and the Tribunal were justified in deleting the said addition? It is well settled that wherever a receipt is sought to be taxed as income, the Department is required to prove that the same falls within the taxing provision, and where the receipt is in the nature of an income, the burden lies on the assessee to show that it is not taxable as it falls within the purview of exemption provided by the Act. However, under Section 68 of the Act, where any amount is found credited in the accounts of the assessee relating to any previous year, the same can be charged to income tax as the income of the assessee of that year where the explanation offered by the assessee about the nature and its source is not satisfactory in the opinion of the assessing officer. In such a case, there is prima I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 10 facie evidence against the assessee, viz. the receipt of money and, if he fails to rebut the said evidence, it can be used against him by holding that it was the receipt of income nature. The assessing officer, after noticing that the initial onus which stood on the assessee was not discharged, made addition of Rs. 36,80,000/- under Section 68 of the Act. It was noticed by assessing officer that two receipts of Its. 17,00,000/- each, on 21.07.1999 and 2.8.1999, had been the result of an after-thought inasmuch as the assesses could not offer any explanation to justify the said amounts, more particularly, when it was not the part of the sale consideration in the registered sale deeds. Reference was also made to the statement o/Sh. Navraj, the vendee where he was asked to explain the facts relating to an amour of Rs. 17,00.000/- handed over to the as lessee on 02.08.1999, he had stated that he did not recognize his signature on the receipt in question as the same differed und he would confirm only after seeing the receipt taken from Shri Jagtar Singh, the assessee. He was unable to explain the source of this payment as well. Further, the sale deeds did not specify that there was something more than the land that was alienated and there was no mention of any other thing like crops, popular trees, tube wells and buildings etc. Still further, it was recorded that the agricultural land, at the time of sale, was vacant and the agricultural produce was sold out in 1996-97 and 1997-98 and the agricultural income was shown in the return. The amount deposited on the basis of these alleged receipts, thus, could not be held to be substantiated by the assessee as relating to the sale of the land. However, the CIT(A) and the Tribunal wrongly placed the initial onus on the Revenue and had allowed the appeal of the I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 11 assessee The approach of the CIT(A) and Tribunal cannot be accepted as the deposits which were credited in the accounts of the assessee had not been explained satisfactorily by the assessee, and, thus, it could not be held that the assessee had discharged the onus placed on him to show that it was his income from the sale of land. Once it is held that the onus was wrongly placed on the Department and the assessee had failed to produce any cogent and convincing material to establish that the deposits were on account of sale of land, the addition made by the assessing officer could not have been deleted and the fuming as recorded by him could not be held to be perverse. The CIT(A) and the Tribunal were, thus, not justified in reversing the finding of the assessing officer and thereby deleting the addition. In view of the above, the substantial question of law is, therefore, answered in favour of the Revenue and against the assessee, Accordingly, the appeals stand allowed." 6.4 The ld. AR vehemently argued and submitted the cash trail in APB page 15-16 and mentioned that no such cash amount was paid by the assessee. There is no such any evidence that proof that the assessee paid the cash for purchasing of land related to A.Y. 1999-2000 and 2000-01. So, the entire amount claimed as payment in cash amount of Rs.48.50 lacs over and above the registered sale price of land purchased has no basis and the assessee’s issues is already covered by the Hon’ble P & H High Court vide order dated 02.12.2010 bearing no. 373/2006 in case of Sh. Jagtar Singh. I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 12 7. The ld. DR vehemently argued, and only relied on the order of revenue authorities. 8. We heard the rival submission, considered the documents available in the record. We find that the ld. CIT(A) in his order dated 15-06-2009 relied on the order of Hon’ble Jurisdictional High Courtin ITA No.373 of 2006 dated 02.12.2010in the case of Jagtar Singh.Respectfully considering the order of the Hon’ble Jurisdictional High Court, it is observed that the cash deposit amount to Rs. 14,50 lakh has no relevance with the assessee’s payment over and above the registered price. So, the amount to Rs. 14.50 lakh is duly negated and has no relevance with assessee. We find that there is no such evidence was found for assessee related payment the cash Rs.48.5 on and above the registered value.The ld. DR was unable to take any divergent view against submission of assessee. The assessee submitted the cash flow statement in APB page 15-16 which was submitted before the CIT(A). The ld. AR invited our attention in APB page 2, which is reproduced as below: I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 13 The ld. AR argued that in same issue the revenue authorities has taken divergent view in different stages. The ld. CIT(A) had erred to disagree with the order of the Hon’ble Jurisdictional High Court and accordingly, the impugned appeal order is duly quashed. We find no merit in the impugned appeal order Accordingly, the appeal of the assessee bearing ITA No. 90/Asr/2022 is allowed. 9. The bench has noticed that the issues raised by the assessees in the above appeals are equally similar on set of facts and grounds. Therefore, it is not I.T.A. Nos. 89 to 91/Asr/2022 Assessment Years: 2000-01, 1999-2000 & 2000-01 14 imperative to repeat the facts and various grounds raised by the assessee. Hence, the bench feels that the decision taken by us in ITA No.90/Asr/2022 shall apply mutatis mutandis in the ITA No. 89/Asr/2022 & ITA No.91/Asr/2022 arealso. 10. In the result, all the appeals of the assessee ITA No. 89 to 91/Asr/2022 are allowed. Order pronounced in the open court on 21.08.2023 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order