ITO, Hamirpur V. Smt. Raj Kumari, Hamirpur

ITA 947/CHANDI/2010

• Counselvise Citation: 94721514 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2011
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 02-08-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 18-06-2010
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: SHARMA
• Keywords: Opportunity of being heard; Accommodation entries
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A: CHANDIGARH. BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER. I.T.A. NO.947(CHD)/2010. (ASSESSMENT YEAR: 1998-99) PAN NO.AAPYK3895R. THE INCOME TAX OFFICER, SMT. RAJ KUMARI, HAMIRPUR (HP). W/O SH. JOGINDER PAL, HAMIRPUR (HP) (APPELLANT) VS. (RESPONDENT) APPELLANT BY: SHRI N.K. SAINI, D.R. RESPONDENT BY: SHRI M.R. SHARMA. DATE OF HEARING: 2 ND AUGUST, 2011. DATE OF PRONOUNCEMENT: 24 AUGUST, 2011. ORDER PER MEHAR SINGH, A.M. THE DEPARTMENT HAS FILED THE PRESENT APPEAL AGAINS T THE ORDER OF THE CIT(A), SHIMLA, DATED 5-4-2010, FOR THE ASSESSMENT YEAR 1998-99, PASSED UNDER SECTION 250(6) OF THE INCOME TAX ACT, 1961 (I N SHORT, THE ACT). THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS OF APPE AL:- 1. THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE R E-OPENING OF THE ASSESSMENT WAS INVALID, AND CONSEQUENTLY ALLOWING T HE ASSESSEES APPEAL, EVEN THOUGH THE VALIDITY OF THE RE-OPENING WAS NOT CHALLENGED IN THE GROUNDS OF APPEAL FILED B EFORE THE CIT(A) AND WAS ALSO NEVER CHALLENGED BEFORE THE AO. 2. WITHOUT PREJUDICE TO THE ABOVE, LD. CIT(A) HAS E RRED IN FOLLOWING THE DECISION OF THE ITAT IN ITO VS. SMT. PAYAL 2 GUPTA (114 TTJ 426), AS THE FACTS OF THAT CASE WERE ENTIRELY DIFFERENT, AND THE RE-OPENING IN THE PRESENT CASE W AS BASED ON CONCRETE INFORMATION RECEIVED BY THE A.O. 3. THE LD. CIT(A) HAS ERRED IN ALLOWING THE ASSESSE ES APPEAL AND DELETING THE ADDITION MADE U/S.69A OF RS.7,78,892/- , AS THE ASSESSMENT WAS BASED ON SPECIFIC INFORMATION RECEIV ED FROM THE DCIT, CENTRAL CIRCLE-3, DELHI, WHICH WAS DULY COMMU NICATED TO THE ASSESSEE VIDE LETTER DATED 9-11-2005 AND COU LD NOT BE REBUTTED WITH ANY INDEPENDENT EVIDENCE. 4. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET-ASIDE AND THAT OF THE A.O. RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD ANY OTHER GROU ND OF APPEAL WHICH MAY ARISE AT THE TIME OF HEARING. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE FILE D HER RETURN DECLARING AN INCOME AT RS.51,570/-, ON 9-3-1999, WHICH WAS PROC ESSED U/S.143(1)(A) ON 29-9-1999. SUBSEQUENTLY, THE CASE WAS REOPENED U/ S.148 READ WITH SECTION 147 OF THE ACT. IN RESPONSE TO NOTICE U/S.148, TH E ASSESSEE FILED RETURN OF INCOME DECLARING THE SAME INCOME. NOTICES U/S.142( 1) AND 143(2) ALONGWITH A QUESTIONNAIRE WERE ISSUED, ON 31-8-2005 . IN RESPONSE TO THE STATUTORY NOTICES, SHRI JOGINDER PAL, THE HUSBAND O F THE ASSESSEE, ALONGWITH SHRI ARUN GIRI, C.A. ATTENDED THE ASSTT. PROCEEDIN GS. THE A.O. APPRISED THE ASSESSEES REPRESENTATIVES OF THE REASONS FOR REOPE NING THE CASE. THE FACTS OF THE CASE WERE THAT THE ASSESSEE HAD MADE DISCLOSURE OF JEWELLERY, WORTH RS.4,10,000/-, UNDER THE VDIS, 1997. THE COMMISSIO NER OF INCOME TAX, SHIMA HAD ISSUED CERTIFICATE U/S.68(2) OF THE VDIS , 1997. THE ASSESSEE STATED TO HAVE SOLD THE JEWELLERY WEIGHING 1958 GMS . FOR RS.7,63,620/- TO M/S.BISHAN CHAND MUKESH KUMAR SARAF, DELHI VIDE INV OICE NO.1995 DATED 31-1-1998 AND THE PAYMENT STATED TO HAVE BEEN RECEI VED THOUGH BANK DRAFT. 3 A SEARCH U/S.132 WAS CARRIED OUT, ON 3-8-2000, AT T HE BUSINESS PREMISES OF M/S.BISHAN CHAND MUKESH KUMAR SARAF AND THE RESIDEN TIAL PREMISES OF SHRI MANOJ AGGARWAL AND SHRI BISHAN CHAND, PARTNERS OF T HE FIRM. THE INFORMATION GATHERED DURING THE COURSE OF SEARCH AT M/S.BISHAN CHAND MUKESH KUMAR SARAF, REVEALED THAT THE ASSESSEE HAD BEEN INDULGING IN PROVIDING ACCOMMODATION ENTRIES AGAINST CHARGING OF CERTAIN COMMISSION AND NO ACTUAL SALE TRANSACTION OF JEWELLERY HAD BEE N TAKEN PLACE. IN VIEW OF THIS, THE A.O. TREATED THE AMOUNT OF RS.7,63,620/- ALONGWITH COMMISSION OF RS.15,272/-, TOTALING TO RS.7,78,892/-, AS UNDISCLO SED INCOME AND ADDED BACK THE SAME U/S.69A OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A), WHO ALLOWED THE APPEAL O F THE ASSESSEE BY FOLLOWING THE ORDER OF THE JURISDICTIONAL ITAT B BENCH IN THE CASE OF ITO VS. SMT. PAYAL GUPTA (2008) 114 TTJ 426. THE ITAT HELD THE REOPENING UNJUSTIFIED AND UNTENABLE IN ITS RATIO AS UNDER:- THERE WAS NO MATERIAL AVAILABLE WITH THE DEPARTMEN T APART FROM THE DOCUMENTS RELATING TO VDIS TO PROVE THAT INCOME HAS ESCAPED ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR. THERE FORE, THE INITIATION OF PROCEEDINGS UNDER SECTION 147/148 IS UNJUSTIFIED AND UNTENABLE. IN VIEW OF THESE FACTS, IT IS APPARENT THAT THE AO REOPENED THE ASSESSMENT ONLY TO INVESTIGATE THE MATERIAL WHI CH WAS ALREADY AVAILABLE WITH THE DEPARTMENT, THEREFORE, IT CAN B E SAID THAT THE A.O. WANTS TO INVESTIGATE THE MATTER OF JEWELLERY DECLAR ED BY THE ASSESSEE UNDER THE VDIS THOUGH THE ASSESSEE COULD NOT PAY TA X ON THE SAME. THERE MUST BE LIVE LINK BETWEEN THE EVIDENCE AND TH E REASON RECORDED FOR REOPENING THE SAME WHICH IS MISSING BEING THE D ECLARATION HAD ALREADY BEEN ACCEPTED BY THE DEPARTMENT. EVEN THE AO IN HIS ORDER U/S.143(3) HAS CLEARLY MENTIONED THAT THE ASSESSEE FILED DECLARATION ON 30 TH DEC., 1997 UNDER SECTION 65(1) OF VDIS, 1997 AND I N HER AFFIDAVIT IT HAS BEEN MENTIONED THAT THE IMPUGNED JEWELLERY WAS ACQUIRED DURING THE YEAR 1985-86. HOWEVER, THE ASSESSEE FAI LED TO DEPOSIT THE TAX. THE SAID DECLARATION WAS ALSO ACCEPTED BY THE DEPARTMENT. THE 4 WHOLE PROBLEM AROSE DUE TO NON-PAYMENT OF TAX, THE REFORE, IT CAN NOT BE SAID THAT THERE WAS ANY MATERIAL WITH THE AO THA T INCOME HAS ESCAPED ASSESSMENT BECAUSE THROUGH THIS NOTICE THE AO ONLY WANTED TO INVESTIGATE THE MATTER (PREM PAL PROP. M/S.KINGS TAR FASHION GARMENTS VS. ITO (ITA NO.257/CHD/2003 ORDER DATED 3 1-5-2007). 4. AGAINST THE ABOVE ORDER OF THE LEARNED CIT(A), T HE DEPARTMENT IS IN APPEAL BEFORE US. 5. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, THE LEARNED D.R. CONTENDED THAT THE CIT(A), ACTED WITHOUT JURISDICTI ON AND ADJUDICATED THE ISSUE OF VALIDITY OF REOPENING THE CASE UNDER SECTI ON 148 OF THE ACT, WHICH WAS NOT EVEN CHALLENGED IN THE GROUNDS OF APPEAL. IN THIS CONTEXT, HE INVITED OUR ATTENTION TO FORM NO.35, WHEREIN NO SUCH GROUND WAS FOUND RAISED BY THE ASSESSEE-APPELLANT. 6. ON THE OTHER HAND, THE LEARNED A.R. MADE AN ATTE MPT TO JUSTIFY THE FINDINGS OF THE LEARNED CIT(A), ON THE BASIS OF IM PLICIT MENTION OF THE GROUND OF REOPENING, IN HIS SUBMISSION. 7. WE HAVE CAREFULLY PERUSED AND CONSIDERED THE FAC TS OF THE CASE, PERUSED THE RELEVANT RECORDS, RIVAL SUBMISSIONS AND THE IMPUGNED ORDERS PASSED BY THE LOWER AUTHORITIES. AS TRANSPIRED IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE BENCH, IT IS EVIDENT THAT TH E CIT(A), IS COMPETENT TO ADMIT ADDITIONAL GROUND UNDER SECTION 250(5) OF THE ACT, IF SHE IS SATISFIED THAT THE OMISSION OF THAT GROUND FROM THE FORM OF A PPEAL WAS NOT WILLFUL OR UNREASONABLE. THE RELEVANT PROVISION OF SECTION 2 50(5) OF THE I.T. ACT IS AS UNDER:- 250(5) THE COMMISSIONER (APPEALS) MAY, AT THE HEAR ING OF AN APPEAL ALLOW THE APPELLANT TO GO INTO ANY GROUND OF APPEAL NO SPECIFIED IN THE GROUNDS OF APPEAL, IF THE COMMISSI ONER (APPEALS) IS SATISFIED THAT THE OMISSION OF THAT GROUND FROM THE FORM OF APPEAL WAS NOT WILLFUL OR UNREASONABLE. 5 7(I) THE GROUNDS OF APPEAL AS INCORPORATED IN FORM NO.35 CLEARLY SUPPORT THE CONTENTION OF THE REVENUE. THESE GROUNDS OF APP EAL ARE REPRODUCED HEREUNDER:- 1. ASSESSING OFFICER IS WRONG FOR THE ADDITION OF RS.778892/- AS CONCEALED INCOME. 2. ASSESSEE HAS MADE PROPER DISCLOSURE DURING 1997, TAKING BENEFIT OF VDIS SCHEME OF GOVERNMENT. 3. ASSESSING OFFICER WAS WRONG BY NOT ACCEPTING THE SALE BILL AND TRANSACTION MADE FOR THE SALE OF GOLD. 4. ASSESSEE HAS PAID PROPER TAXES FOR THE DISCLOSUR E MADE IN GOLD. 7(II) THE LEARNED CIT(A), HAS NOT RECORDED HIS SATI SFACTION WITHIN THE MEANING OF SECTION 250(5) OF THE ACT FOR ADMISSION OF ANY ADDITIONAL GROUND OF APPEAL. THEREFORE, THE CIT(A), HAS NO JURISDICT ION TO PRONOUNCE UPON THE VALIDITY OF INVOCATION OF THE PROVISIONS OF SECTION 147 R.W. SECTION 148 OF THE ACT. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISC USSIONS, AS ALSO TO MEET THE ENDS OF JUSTICE, THE CASE IS RESTORED TO THE FILE O F THE CIT(A), WITH DIRECTION TO ADJUDICATE THE CASE AFRESH AS PER LAW, AFTER AFFORD ING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. FOR STATISTICAL PURPOSES, THE APPEAL OF THE DEPA RTMENT IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 A UGUST, 2011. SD/- SD/- (SUSHMA CHOWLA) (MEHAR SINGH) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DATED: 24 AUGUST, 2011. KC/- 6 C OPY OF THE ORDER FORWARDED TO : (1) T HE ASSESSEE : S MT . R AJ K UMARI , W / O S H J OGINDER P AL , HAMIRPUR ( H P) (2) ITO , HAMIRPUR . (3) THE CIT , SHIMLA . (4) THE CIT ( A ), SHIMLA . (5) THE SR. D.R., ITAT, CHD. TRUE COPY BY O RDER ASSTT . REGISTRAR , INCOME TAX APPELLATE TRIBUNAL , CHANDIGARH.