Shri Vishnu Tukaram Wagh, Nashik V. ITO CIB, Nashik

ITA 958/PUN/2011

• Counselvise Citation: 95824514 RSA 2011
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 18-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DILIP KOTHARI
• Keywords: Transfer pricing
• Section: 143(3); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER. ITA.NO.958/PN/2011 (ASSESSMENT YEAR 2005-06) VISHNU TUKARAM WAGH, AT & POST DUGAON, TAL & DIST. NASHIK. PAN NO.ABIPM 1483E .. APPELLANT VS. INCOME TAX OFFICER, CIB, KENDRIYA RAJASWA BHAVAN, GADKARI CHOWK, NASHIK-422001. .. RESPONDENT ASSESSEE BY : SRI PRAMOD SHINGATE REVENUE BY : SRI DILIP KOTHARI DATE OF HEARING : 29-04-2013 DATE OF PRONOUNCEMENT : 29-04-2013 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 20-05-2011 OF THE CIT(A)-I, NASHIK RELATING TO ASS ESSMENT YEAR 2005-06. 2. THIS APPEAL WAS EARLIER DISMISSED BY THE TRIBUNA L VIDE ORDER DATED 13-07-2012 FOR NON-APPEARANCE. SUBSEQUENTLY, THE T RIBUNAL VIDE ORDER DATED 05-10-2012 IN M.A. NO.91/PN/2012 RECALLED THE EARLIER ORDER. HENCE THIS IS A RECALLED ORDER. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ITO, C IB, NASHIK ISSUED NOTICE TO THE ASSESSEE U/S.142(2) ON THE BASIS OF INFORMAT ION RECEIVED FROM THE TRANSACTIONS REPORTED IN AIR FURNISHED U/S. 285BA O F THE INCOME TAX ACT ACCORDING TO WHICH THE ASSESSEE MADE DEPOSITS IN CA SH IN SAVINGS BANK ACCOUNT AGGREGATING RS.14,94,000/- DURING THE F.Y. 2004-05. ALTHOUGH THE NOTICE WAS DULY SERVED ON THE ASSESSEE, NONE APPEAR ED ON BEHALF OF THE ASSESSEE FOR WHICH THE ASSESSING OFFICER PASSED AN EXPARTE ORDER TREATING 2 THE DEPOSIT OF RS.14,94,000/- AS UNEXPLAINED INVEST MENT AND BROUGHT TO TAX THE SAME AS INCOME FROM OTHER SOURCES. 4. IN APPEAL THE LD. CIT(A) UPHELD THE ADDITION MAD E BY THE ASSESSING OFFICER FOR WHICH THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : WHEREVER CONTEXT SO REQUIRE, THE FOLLOWING GROUNDS OF APPEAL & PRAYERS ARE WITHOUT PREJUDICE TO ONE ANOTHER AND IN ALTERNATIVE - 1. THE LEARNED CIT (A) ERRED IN UPHOLDING THE JUR ISDICTION OF ITO, CIB, NASHIK TO ASSESS THE APPELLANT, IN PURSUANCE TO THE NOTICE U/S 142(1) ISSUED BY THE ITO (CIB) - 2, PUNE, CALLING RETURN OF INCOME AND WITHO UT THERE BEING VALID TRANSFER OF CASE TO THE ITO, CIB, NASHIK. THE LEARNED CIT(A) FAILED TO APPRECIATE THE REAL ISSUE BEFORE HIM. THEREFORE, IT IS PRAYED TO DECLAR E THAT, THE ASSESSMENT ORDER PASSED BY THE ITO, CIB, NASHIK, WAS WITHOUT JURISDI CTION AND THEREFORE NULL & VALID. 2. WITHOUT PROPERLY APPRECIATING THE CHALLENGE TO THE NOTICE ISSUED U/S 142(1), CALLING RETURN OF INCOME, ON THE GROUND OF EXPIRY O F PERMITTED PERIOD FOR ISSUE OF SUCH NOTICE, THE LEARNED CIT (A) ERRED IN UPHOLDING THE VALIDITY OF THE NOTICE ISSUED U/S 142(1) FOR A.Y. 2005-06 ON 27.08.2007. T HEREFORE, IT IS PRAYED TO DECLARE THAT THE NOTICE ISSUED U/S 142(1) FOR A.Y. 2005-06 ON 27.08.2007 WAS ISSUED BEYOND THE TIME PERMITTED FOR ISSUE OF NOTIC E U/S 142(1). 3. THE LEARNED CIT(A) ERRED IN NOT DECIDING THE G ROUND NO. 3 RELATING TO THE ABSENCE OF SUFFICIENT OPPORTUNITY OF HEARING, UNDER CERTAIN MISUNDERSTANDING REGARDING THE ISSUE INVOLVED IN GROUND NO. 3. THERE FORE, IT IS PRAYED TO HOLD THAT THE ASSESSMENT ORDER PASSED U/S 144 WAS PASSED WITH OUT PROPER OPPORTUNITY OF HEARING TO THE APPELLANT. 4. THE LEARNED CIT(A) ERRED IN UPHOLDING, AT PARA 6.3 OF HIS ORDER, THE ASSESSMENT OF THE CASH DEPOSITS IN BANK ACCOUNT WIT H THE CENTRAL BANK OF INDIA, AS INCOME OF APPELLANT AND NOT OF THE HUF, WITHOUT APPRECIATING THE EVIDENCE FURNISHED BEFORE HIM AND THE REPORT OF THE IT. INSP ECTOR. WHILE DOING SO HE ERRED, ON THE ONE HAND, IN HOLDING THAT THE APPELLANT WAS BARRED U/R 46A TO RAISE THE ISSUE AND ON THE OTHER HAND TO OBSERVE THAT, 'NO SU PPORTING MATERIAL EVIDENCE HAS BEEN FILED IN SUPPORT OF THE CONTENTION OF THE APPELLANT THAT THE DEPOSITS WERE OUT OF THE AGRICULTURAL SOURCE, NEITHER AT THE ASSE SSMENT STAGE BEFORE THE ASSESSING OFFICER NOR BEFORE ME.' THEREFORE, IN VIE W OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE EVIDENCES ON RECO RD, IT IS PRAYED TO HOLD THAT THE BANK ACCOUNT BELONGED TO THE HUF AND THE CASH D EPOSITS MADE IN IT WERE MADE BY THE HUF FROM THE FUNDS RAISED BY IT. 5. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E SOURCES FOR CASH DEPOSITS WERE DULY EXPLAINED BY THE APPELLANT, WITH SUPPORTI NG EVIDENCES AND THEREFORE, HE ERRED IN HOLDING THAT THESE HAVE BEEN RIGHTLY TR EATED AS INCOME OF APPELLANT, WITHOUT EVEN CONSIDERING THE FACT THAT EVEN THE A.O . HAD ACCEPTED SOME OF THE SOURCES CLAIMED BY APPELLANT, IN HIS REMAND REPORT. THEREFORE, IT IS PRAYED THAT, THE SOURCES EXPLAINED BY THE APPELLANT FOR CASH DEP OSITS MAY PLEASE BE ACCEPTED. 6. APPELLANT CRAVES LEAVE TO ADD / AMEND / ALTER A NY GROUNDS OF APPEAL AND / OR PRAYERS BEFORE OR AT THE TIME OF HEARING. 3 5. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE OUTS ET BROUGHT TO THE NOTICE OF THE BENCH THE ORDER ISSUED U/S.120 OF THE INCOME TAX ACT BY THE CCIT, PUNE VIDE ORDER DATED 01-08-2007 WHICH READS AS UNDER : ORDER UNDER SECTION 120 OF THE INCOME TAX ACT, 196 1 IN EXERCISE OF POWERS CONFERRED BY SECTION 120 OF T HE INCOME TAX ACT AND INSTRUCTION NO. 6/2006 DATED 1ST AUGUST, 2006, I HE REBY ORDER THAT THE ASSESSING OFFICERS WORKING UNDER THE CONTROL OF COMMISSIONER OF INCOME TAX (CIB), PUNE, AS MENTIONED BELOW SHALL ACT AS WITH ' DESIGNATED ASSE SSING OFFICERS' (DAOS) AND SHALL EXERCISE CONCURRENT JURISDICTION WITH RESPECT TO THE ASSESSEE FALLING WITHIN THE JURISDICTION OF COMMISSIONERS OF INCOME TAX I, II, III, IV, V PUNE COMMISSIONERS OF INCOME TAX COMMISSIONER OF INCOME TAXI AND II, NASIK; COMMISSIONER 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 WHOSE NAMES APPEAR IN ANNUAL INFORMATION RETURN (ARI) DATA RELATING TO PUNE REGION AND WHOSE PAN ARE NOT MENTIONED AIR DATA. S.NO ASSESSING OFFICER 1. INCOME TAX OFFICER 2. INCOME TAX OFFICER (CIB)-3, PUNE 2. THE DAOS SHALL HAVE CONCURRENT JURISDICTION OVE R THE CASES FOR ISSUING NOTICES U/S 142(1). IN CASE OF NON-EXISTING ASSESSE ES (WHO HAVE NEVER FILED A RETURN OF 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 SHALL TRAN SFER THE AIR INFORMATION TO THE JURISDICTIONAL ASSESSING OFFICERS (JAO). 3. THIS ORDER IS WITH IMMEDIATE EFFECT AND UNTIL FU RTHER ORDER. SD/- CHIEF COMMISSIONER OF INCOME TAX, PUNE. IN VIEW OF THE ABOVE ORDER IT WAS SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE THAT THE AO HAD NO JURISDICTION OVER THE A SSESSEE TO PASS THE ASSESSMENT ORDER AND THEREFORE THE ENTIRE PROCEEDIN GS SHOULD BE HELD AS VOID AB-INITIO. 6. THE LD. DR ON THE OTHER HAND SUBMITTED THAT THIS ISSUE HAS BEEN RAISED FOR THE FIRST TIME BY THE ASSESSEE BEFORE TH E TRIBUNAL AND THE CIT(A) HAD NO OCCASION TO DECIDE THE VALIDITY OF THE ASSES SMENT AND THEREFORE THE 4 MATTER MAY BE SET-ASIDE TO THE FILE OF THE LD. CIT( A) FOR ADJUDICATION REGARDING THE JURISDICTIONAL ISSUE IN THE LIGHT OF THE INSTRUCTIONS ISSUED BY THE LD. CCIT, PUNE. HE FURTHER SUBMITTED THAT THE OTHER ISSUES SHOULD BE KEPT OPEN IN CASE THE MATTER IS SET-ASIDE TO THE FI LE OF THE CIT(A). 7. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOINDE R SUBMITTED THAT THE ASSESSEE HAS NO OBJECTION IF THE MATTER IS SET-ASID E TO THE LD. CIT(A) FOR ADJUDICATION REGARDING THE JURISDICTIONAL ISSUE IN THE LIGHT OF THE INSTRUCTIONS ISSUED BY THE CCIT, PUNE. 8. IN VIEW OF THE ABOVE SUBMISSIONS BY BOTH THE SID ES, WE RESTORE THE APPEAL TO THE FILE OF THE LD. CIT(A) FOR ADJUDICATI ON ON THE JURISDICTIONAL ISSUE IN THE LIGHT OF THE INSTRUCTIONS ISSUED BY CC IT, PUNE. SINCE THE MATTER IS SET-ASIDE TO THE FILE OF THE CIT(A) WE REFRAIN F ROM DECIDING THE ISSUES ON MERIT. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN AT THE TIME OF HEARING ITSE LF, I.E. ON 29-04- 2013. SD/- SD/- (R.S.PADVEKAR ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, DATED THE 29 TH APRIL 2013. COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-I, NASHIK 4. THE CIT-I, NASHIK 5. THE DR B BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // PRIVATE SECRETARY, INCOME TAX APPELLATE T RIBUNAL, PUNE.