ITO, Ward 8(2), Pune V. Shri Chandrabhan V. Khalade, Pune

ITA 928/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79737 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 26-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Unexplained investment; Transfer pricing; Assessment record
• Section: 143(3); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.928/PN/2013 (A.Y: 2005-06) ITO, (CIB-3), PUNE APPELLANT VS. SHRI CHANDRABHAN V. KHALADE KHALDE ALI, TALEGAON DABHADE, PUNE PAN: ALCPK2993F RESPONDENT APPELLANT BY : SHRI S.P. W ALIMBE RESPONDENT BY : SHRI NIK HIL PATHAK DATE OF HEARING: 16.04.2014 DATE OF ORDER : 28.04.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(APPEAL)-CENTRAL, [IN SHORT CIT(A)] PUNE, DATED 15.01.2013 FOR A.Y. 2005-06 ON THE FOLL OWING GROUNDS. 01. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN ANNULLI NG THE ASSESSMENT ORDER OF THE ITO CIB-3, PUNE, HOLDIN G THAT THE SAME HAS BEEN PASSED BY THE A.O. WITHOUT JURISDICTION WHEN NO SUCH GROUND OF APPEAL IS SEEN TO HAVE BEEN RAISED BY THE ASSESSEE BEFORE THE LD. CIT(A) IN VIEW OF PARA 3 OF THE APPELLATE ORDER. 02. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN ANNULLI NG THE ASSESSMENT ORDER WITHOUT VERIFYING THE NOTIFICA TION AS PER WHICH THE A.O. ASSUMED JURISDICTION AS NOTED IN 2 THE ASSESSMENT RECORDS AND WITHOUT GIVING ANY OPPORTUNITY TO THE A.O. TO EXPLAIN HIS STAND. 03. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ANNULLING T HE ASSESSMENT THOUGH THE APPEAL WAS REQUIRED TO BE ADJUDICATED ONLY AFTER CONSIDERING THE GROUNDS RAIS ED ON THE QUANTUM ADDITION MADE. MORE SO, THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ASSES SEE HAS NOT APPEARED BEFORE THE ASSESSING OFFICER DESPI TE HAVING BEEN GIVEN SUFFICIENT OPPORTUNITIES WHICH LE D TO EX PARTE COMPLETION OF ASSESSMENT U/S. 144 OF THE ACT. FURTHER, THE LD. CIT(A) FAILED TO TAKE INTO ACCOUNT THE REMAND ORDER PASSED BY THE CIT(A)-III, PUNE VIDE NO. PN/CIT(A)-LLL/KHALADE/2008-09/239 DATED 28.8.2008 WITH WHOM THE APPELLATE JURISDICTIO N WAS EARLIER VESTED BEFORE CREATION OF THE CHARGE OF CIT(A)-IV/CIT(A)-CENTRAL AND THE REPORT OF THE ITO WARD 8(2), PUNE SUBMITTED VIDE NO.PN/ITO WARD 8(2)/APPEAL/CVK/2008-09/9 DATED 29 TH NOVEMBER, 2008, SHOWING CLEARLY THAT THE ADDITIONS WERE CORRE CT IN FACT AND LAW. 04. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER A NY OF THE ABOVE GROUNDS OF APPEAL 2. THE ASSESSEE IS AN INDIVIDUAL. AS PER INFORMATI ON RECEIVED VIA ANNUAL INFORMATION RETURN U/S.285BA OF THE ACT, DURING THE RELEVANT PREVIOUS YEAR, THE ASSESSEE MADE CASH DEPO SIT OF 16,62,261/- IN HIS SAVINGS BANK ACCOUNT. ON THE BA SIS OF THIS INFORMATION, A NOTICE U/S.142(1) OF THE ACT WAS ISS UED TO ASSESSEE BY THE ASSESSING OFFICER CALLING FOR HIS RETURN OF INCOME FOR A.Y. 2005-06. AS THE ASSESSEE FAILED TO COMPLY, THE ASS ESSING OFFICER PASSED EX PARTE ORDER U/S.144 TREATING THE ENTIRE D EPOSIT OF 16,62,261/- AS UNEXPLAINED. 3. THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AU THORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) ANNULLED THE ASSESSMENT BEING WITHOUT JURISDICTION. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE, INTER ALIA, SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN ANNULLING THE ASSES SMENT ORDER OF 3 ITO, (CIB-3), HOLD THAT THE SAME HAS BEEN PASSED BY THE ASSESSING OFFICER WITHOUT JURISDICTION WHEN NO SUCH GROUNDS OF APPEAL WAS SEEN TO HAVE BEEN MADE BY THE ASSESSEE B EFORE CONCERNED CIT(A). THE CIT(A) ANNULLING WITHOUT VERI FYING THE NOTIFICATION AS PER WHICH THE ASSESSING OFFICER ASS UMED JURISDICTION AS NOTED IN THE ASSESSMENT RECORDS AND WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER TO EXPLAIN HIS STAND. ACCORDINGLY, THE ORDER OF CIT(A) BE SET ASID E AND THAT OF ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, THE LEARNED AUTHORIZED REPRESENTATIVE HAS SUPPORTED THE ORDER O F CIT(A), INTER ALIA, SUBMITTED THAT THE ASSESSING OFFICER ER RED IN HOLDING 16,62,261/- AS UNEXPLAINED INVESTMENT. SINCE THE AS SESSEE HAS DULY FILED RETURN OF INCOME FOR A.Y.2005-06 ALONG W ITH PROFIT AND LOSS ACCOUNT AND STATEMENT OF ASSETS & LIABILITIES AS ON 31.03.2005 ON 07.08.2006 VIDE ACKNOWLEDGEMENT NO. 0822003304 IN WARD OFFICE OF IT. THE ASSESSING OFF ICER ERRED IN TREATING CASH DEPOSIT AS UNEXPLAINED INVESTMENTS SI NCE THE BANK ACCOUNT IN WHICH THE SAID DEPOSIT HAS BEEN MADE AS HAS BEEN REPORTED UNDER THE ANNUAL INFORMATION RETURN SCHEME WAS DULY RECORDED IN THE BOOKS OF ACCOUNT AND INCOME FROM AL L THE SOURCES HAS BEEN CONSIDERED WHILE FILING RETURN OF INCOME F OR THE SAID ASSESSMENT YEAR. ACCORDINGLY, THE ORDER OF CIT(A) SHOULD BE UPHELD. THE ASSESSEE HAS ALSO RELIED ON THE DECISI ON OF ITAT, PUNE BENCH IN THE CASE OF MRS. SAYALI (APARNA) S. P ATIL VS. ITO IN ITA NO.32/PN/2009 FOR A.Y. 2005-06, WHEREIN, THE TR IBUNAL HAS HELD AS UNDER: CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT EV EN AS PER THE ORDER DT. 1.8.2007 OF THE LD. CHIEF CIT (P UNE) PASSED U/S. 120 OF THE I.T. ACT REFERRED BY LD. D.R, THE I TO (HQ)(CIB) WAS HAVING NO JURISDICTION OVER THE ASSESSEE FOR FRAMING THE ASSESSMENT IN QUESTION, SINCE UNDISPUTEDLY, THE ASSESSEE HAD ALREADY FILED RETURN OF INCOME FOR THE YEAR UND ER CONSIDERATION ON 31 ST MARCH 2006 WITH THE AO HAVING REGULAR JURISDICTION OVER THE ASSESSEE. THE SAID OR DER DT. 1.8.2007 OF THE LD. CHIEF CIT VIDE PARA NO. 2 HAS M ADE IT CLEAR AS FOLLOWS : 4 '2. THE DAOS SHALL HAVE CONCURRENT JURISDICTIO N OVER THE CASES FOR ISSUING NOTICES U/S 142(1). IN CASE OF NON EXISTING ASSESSEES (WHO HAVE NEVER FILED A RETURN O F INCOME EARLIER) THE DAO SHALL ASSESS THE CASE U/S. 143(3) OR 144, AS THE CASE MAY BE. IN ALL OTHER CASES THE DAOS SHA LL TRANSFER THE AIR INFORMATION TO THE JURISDICTIONAL ASSESSING OFFICERS (JAO).' WE THUS FIND SUBSTANCE IN THE OBJECTION OF THE LD. A.R. THAT THE ITO (HQ)(CIB) WAS HAVING NO JURISDICTION TO FRAME A SSESSMENT U/S. 144 OF THE ACT IN THE CASE OF THE ASSESSEE OR TO ISSUE NOTICES U/S. 142(1) OF THE ACT OR OTHER TO THE ASSESSEE. TH US, THE ASSESSMENT FRAMED BY HIM IN ABSENCE OF HAVING JURIS DICTION IS NULL AND VOID. IT IS HELD AS SUCH. 4. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD, WE ARE NOT INCLINED TO INTERFERE WITH THE F INDING OF CIT(A) WHO ON PERUSAL OF THE MATERIAL AVAILABLE ON RECORD OBSERVED THAT THE ASSESSEE WAS ALREADY ASSESSED TO TAX WITH ITO, WARD 8(2), PUNE WITH PAN ALCPK2993F. UNDER THE CIRCUMSTANCES, ITO, CIB-3, PUNE DID NOT HAVE JURISDICTION TO ASSESS THE ASSESSEE. IN RESPECT OF THE PERSONS WHOSE NAME APPEARS IN ANNUAL INFORMATION RETURN, CCIT, PUNE ISSUED JURISDICTION ORDERS U/S.120 OF I.T ACT ON 01.08.2007. THE RELEVANT POR TION OF THE ORDER READS AS UNDER: 'ORDER UNDER SECTION 120 OF THE INCOME TAX ACT, 1961 IN EXERCISE OF POWERS CONFERRED BY SECTION 120 OF T HE INCOME TAX ACT AND INSTRUCTION NO.6/2006 DATED 1ST AUGUST, 200 6, I HEREBY ORDER THAT THE ASSESSING OFFICERS WORKING UNDER THE CONTROL OF COMMISSIONER OF INCOME TAX (CIB), PUNE, AS MENTIONE D BELOW SHALL ACT AS WITH 'DESIGNATED ASSESSING OFFICERS' ( DAOS) AND SHALL EXERCISE CONCURRENT JURISDICTION WITH RESPECT TO THE ASSESSEE FALLING WITHIN THE JURISDICTION OF COMMISS IONERS OF INCOME TAX I, II, III, IV, V PUNE COMMISSIONERS OF INCOME TAX COMMISSIONER OF INCOME TAX-I AND II, NASIK; COMMISS IONER OF INCOME TAX AURANGABAD; COMMISSIONER OF INCOME TAX-I AND II & III, THANE, COMMISSIONER OF INCOME TAX (CENTRAL), P UNE AND DIRECTOR OF INCOME TAX (TRANSFER PRICING), PUNE WHO SE NAMES APPEAR IN ANNUAL INFORMATION RETURN (ARI) DATA RELA TING TO PUNE REGION AND WHOSE PAN ARE NOT MENTIONED AIR DATA. 5 2. THE DAOS SHALL HAVE CONCURRENT JURISDICTION OVER THE CASES FOR ISSUING NOTICES U/S 142(1). IN CASE OF NON-EXIS TING ASSESSEES (WHO HAVE NEVER FILED A RETURN OF INCOME EARLIER) T HE DAO SHALL ASSESS THE CASE U/S 143(3) OR 144, AS THE CASE MAY BE. IN ALL OTHER CASES THE DAOS SHALL TRANSFER THE AIR INFORMA TION TO THE JURISDICTIONAL ASSESSING OFFICERS (JAO). 3. THIS ORDER IS WITH IMMEDIATE EFFECT AND UNTIL FURTHER ORDER. SD/- CHIEF COMMISSIONER OF INCOME TAX, PUNE.' 4.1 IN VIEW OF JURISDICTION ORDER DATED 01.08.2007, ITO, CIB-3, PUNE DID NOT HAVE JURISDICTION TO THE ASSESS U/S.14 3(3) OR 144 OF THE ACT AS THE ASSESSEE WAS NOT A NON-EXISTING ASSE SSEE (WHO HAS NEVER FILED RETURN OF INCOME EARLIER). UNDER THE C IRCUMSTANCES, THE ORDER PASSED U/S.144 OF THE ACT DATED 31.12.200 7 BY ITO, CIB-3 WAS RIGHTLY HELD WITHOUT JURISDICTION BY CIT( A). ACCORDINGLY, ASSESSMENT WAS ANNULLED BY HIM. THIS REASONED FACTUAL LEGAL FINDING WITH REGARD TO ANNULLING THE ASSESSMENT NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. THIS VIEW IS FORTIFIED BY THE COORDINATE BENCH IN THE CA SE OF MRS. SAYALI (APARNA) S. PATIL (SUPRA) AS DISCUSSED ABOVE. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 28 TH OF APRIL, 2014. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 28 TH APRIL, 2014 GCVSR S.NO ASSESSING OFFICER 1. INCOME TAX OFFICER (HQ)(CIB), PUNE 2. INCOME T AX OFFICER (CIB) - 3, PUNE 6 COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-CENTRAL, PUNE 4) THE CIT-CENTRAL, PUNE 5) THE DR, B BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE