Appeal Details
Counselvise Citation
[2018] 126 COUNSELVISE.COM (IT) 1142 (ITAT-LUCKNOW)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
11 month(s) 29 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-02-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2011-2012
Appeal Filed On
02-02-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 98/LKW/2017 ASSESSMENT YEAR: 2011 - 12 ANITA SRIVASTAVA B - 4/55, VINAY KHAND GOMTI NAG AR, LUCKNOW V. ASSTT. CIT RANGE 1 LUCKNOW T AN /PAN : AUIFPS6991R (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI DHARMENDRA KUMAR, C.A. RESPONDENT BY: SHRI AMIT NIGAM, D.R. DATE OF HEARING: 31 01 201 8 DATE OF PRONOUNCEMENT: 01 02 201 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THIS APPEAL PREFERRED BY THE ASSESSEE EMAN AT ES FROM THE ORDER OF THE LD. CIT(A) - 1, LUCKNOW DATED 7/9/2016. 2 . THE ASSESSEE HAS RAISED BOTH LEGAL GROUNDS AS WELL AS GROUNDS ON MERIT, BUT FIRST WE WOULD LIKE TO ADDRESS THE LEGAL I SSUE RELATING TO LEGALITY OF PROCEEDINGS INITIATED UNDER SECTION 147 OF THE ACT AND THE ASSESSMENT FRAMED UNDER SECTION 147/143(3) OF THE ACT . 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN ARCHITECT BY PROFESSION FILED HER RETURN OF INCOME ELECTRON ICALLY ON 26/9/2011 SHOWING AN INCOME OF RS.78,91,910/ - . THE INCOME - TAX DEPARTMENT RECEIVED AN AIR INFORMATION THAT THE ASSESSEE PURCHASED AN IMMOVEABLE PROPERTY OF RS.62,92,500/ - . ACCORDINGLY, T HE ASSESSING OFFICER AFTER RECORDING REASONS ISSUED NOTICE UNDER SECTION 148 OF THE ITA NO.98/LKW/20 17 PAGE 2 OF 7 ACT , WHICH WAS DULY SERVED ON THE ASSESSEE. THE ASSESSMENT WAS COMPLETED UNDER SECTION 147/143(3) OF THE ACT. THE MAIN GRIEVANCE OF THE ASSESSEE , SO FAR AS THE LEGAL ISSUE IS CONCERNED, IS THAT THE ASSESSMENT FRAMED UNDER SECTION 147/148 OF THE ACT IS ILLEGAL AND WITHOUT JURISDICTION AND LIABLE TO BE QUASHED. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS STATED THAT THE ASSESSEE, AN ARCHITECT AND ENGINEER E - FILED HER RETURN OF INCOME ALONG WITH AUDIT REPORT UNDER SECTION 44AB OF THE ACT ON 26/9/2011 DECLARING TOTAL INCOME AT RS.78,91,910/ - . HER TOTAL INCOME COMPRISES OF INCOME FROM HOUSE PROPERTY AT RS.5,83,459/ - AND INCOME FROM BUSINESS AT RS.74,27,546/ - . THE ASSESSEE WAS ASKED TO SUBMIT DOCUMENTARY EVIDENCE REGARDING SOURC E OF FUND AND ALSO FURNISH COPY OF BANK STATEMENT TO PROVE THE TRANSACTION. THE ASSESSEE FURNISHED THE DETAILS WHICH WERE TEST CHECKED AND EXAMINED BY THE ASSESSING OFFICER. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ALSO FOUND TH AT THE ASSESSEE HAS MADE SEVERAL INVESTMENTS BY ACQUIRING MULTIPLE ASSETS. IN ONE SUCH TRANSACTION, ASSESSEE HAD SOLD AN IMMOVEABLE PROPERTY FOR RS.50 LAKHS WHICH IS A PLOT AT B - 2/31A, VIJAYANT KHAND, GOMTI NAGAR, LUCKNOW. THE ASSESSEE DURING THE RELEVAN T YEAR ALSO BOOK E D A FLAT AT JAYPEE GREENS, NOIDA FOR A CONSIDERATION OF RS.28,18,000/ - IN RESPECT OF WHICH ASSESSEE HAS CLAIMED DEDUCTION OF RS.37,51,220/ - UNDER SECTION 54F OF THE ACT (AGAINST PLOT SOLD FOR RS.50 LAKHS ON 1/12/2010) RESULTING INTO TAXABL E LONG TERM CAPITAL GAIN FOR THE RELEVANT YEAR TO BE NIL. THE ASSESSEE WAS ASKED TO SUBMIT VARI O US DETAILS REGARDING COPY OF SALE AGREEMENT AND ALLOTMENT LETTER OF FLAT AT JAYPEE GREENS, NOIDA ALONG WITH SOURCE OF INVESTMENT, DETAILS OF INSTALMENTS PAID B Y THE ASSESSEE AGAINST THE FLAT PURCHASED AND DOCUMENTARY EVIDENCE OF SALE CONSIDERATION RECEIVED. THE ASSESSEE FILED REPLY ALONG WITH COPY OF ALLOTMENT LETTER, BANK ACCOUNT STATEMENT, ETC. BEFORE THE ASSESSING ITA NO.98/LKW/20 17 PAGE 3 OF 7 OFFICER. A PERUSAL OF RECORD SHOWS THAT THE REASSESSMENT PROCEEDINGS IN THE INSTANCE CASE WERE INITIATED ON THE BASIS OF INFORMATION POSSESSED BY THE DEPARTMENT THAT AN IMMOVEABLE PROPERTY AS PURCHASED BY THE ASSESSEE FOR A CONSIDERATION OF RS.62,92,500/ - . HOWEVER, IN THE REASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 54F OF THE ACT WAS DISALLOWED BY THE ASSESSING OFFICER AND THE ENTIRE AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. 4 . THE MATTER TRAVELLED UPTO THE STAGE OF FIRST APPELLATE AUTHOR ITY AND THE LD. CIT(A) IN HIS ORDER HAS REITERATED THE OBSERVATIONS OF THE ASSESSING OFFICER AND THEREAFTER CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 54F OF THE ACT. 5 . BEING FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. AT THE TIME OF HEARING, THE LD. A.R. OF THE ASSESSEE INVITED OUR ATTENTION TO PAGE 13 OF THE PAPER BOOK WHICH IS THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT. THE LD. A.R. OF THE ASSESSEE HAS V EHEMENTLY ARGUED THAT IN THE REASONS RECORDED, THE REASON FOR REOPENING THE ASSESSMENT WAS WITH REGARD TO THE PURCHASE OF IMMOVEABLE PROPERTY FOR AN AMOUNT OF RS.62,92,500/ - AND ASKING FOR VARIOUS DETAILS SUCH AS PAN, COPY OF ITR, COPY OF BANK ACCOUNT, E TC. THE LD. A.R. OF THE ASSESSEE FURTHER INVITED OUR ATTENTION TO PAGES 14, 15, 16 AND 17 OF THE PAPER BOOK WHICH ARE THE DETAILS OF INFORMATION RELATING TO PURCHASE OF PROPERTY FILED BEFORE THE ASSESSING OFFICER AS SOUGHT BY HIM . THE ASSESSING OFFICER T HEREAFTER DISALLOWED THE CLAIM MADE BY THE ASSESSEE UNDER SECTION 54F OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT THE REASON FOR INITIATION OF ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT WAS THAT SOURCE OF INVESTMENT IN IMMOVABLE PROPERTY WAS UNVERIFIABLE , ITA NO.98/LKW/20 17 PAGE 4 OF 7 BUT WHILE COMPLETING THE ASSESSMENT, NO ADDITION /DISALLOWANCE UNDER THIS HEAD WAS MADE , INSTEAD HE DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 54F OF THE ACT. THEREFORE, IN THE LIGHT OF THE JUDGMENT S OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MOHMED JUNED DADANI [2013] 355 ITR 172 (GUJ) AND HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. JET AIRWAYS, 331 ITR 236, THE REOPENING ITSELF IS BAD AND THE ASSESSMENT FRAMED CONSEQUENT THERETO DESERVES TO BE ANNULLED. 6 . THE LD. D.R., ON THE OTHER HAND, SUBMITTED THAT THE REASONS RECORDED ARE SPECIFIC AND CLEAR STATING THAT THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WHICH IS AS PER THE SPIR IT OF THE PROVISIONS OF SECTION 147/148 OF THE ACT AND, THEREFORE, THE ASSESSMENT FRAMED UNDER SECTION 147 OF THE ACT WAS IN ORDER AND AS PER LAW. THE LD. D.R. FURTHER ARGUED THAT THE DISALLOWANCE UNDER SECTION 54F OF THE ACT WAS AN EXTENSION TO THE QUERY AND THE REASONS RECORDED UNDER SECTION 148 OF THE ACT, THEREFORE, IT IS NOT SOMETHING WHICH IS BEYOND THE SCOPE OF REASONS FOR REOPENING THE ASSESSMENT . H E PLACED RELIANCE UPON THE ORDERS OF THE AUTHORITIES BELOW. 7 . WE HAVE PERUSED THE CASE RECORDS, HEARD THE RIVAL CONTENTIONS AND WE FIND THAT THE REASONS RECORDED UNDER SECTION 148 OF THE ACT , WHICH PROMPTED ASSESSMENT TO BE FRAMED UNDER SECTION 147/143(3) OF THE ACT , IS ESSENTIALLY IN RELATION TO THE POSSESSION OF INFORMATION BY THE DEPARTMENT REGARDING PU RCHASE OF IMMOVEABLE PROPERTY VALUED AT RS.62,92,500/ - AND IN RESPECT OF THE SAME VARIOUS DETAILS WERE ASKED FOR I.E. PAN, COPY OF ITR AND BANK ACCOUNT STATEMENTS. WE FIND THAT THE REASON , FOR WHICH THE ASSESSING OFFICER FEELS THAT INCOME MIGHT HAVE ESCAP ED ASSESSMENT , IS WITH REGARD TO THE PURCHASE AMOUNT OF ITA NO.98/LKW/20 17 PAGE 5 OF 7 RS.62,92,500/ - AND ON A PERUSAL OF THE PAPER BOOK, WE FIND THAT ALL THE RELEVANT DETAILS IN RELATION TO THE TRANSACTION AS SPECIFIED IN THE REASONS RECORDED BY THE ASSESSING OFFICER WERE SUBMITTED BY THE ASSESSEE TO THE DEPARTMENT BUT WHILE COMPLETING THE ASSESSMENT, NO ADDITION/DISALLOWANCE UNDER THIS HEAD WAS MADE . THEREAFTER THE ASSESSING OFFICER HAS PROCEEDED TO DISALLOW THE CLAIM MADE UNDER SECTION 54F OF THE ACT WHICH DOES NOT FORM SUBJECT MATTE R OF THE REASONS RECORDED FOR INITIATION OF PROCEEDINGS UNDER SECTION 147/148 OF THE ACT. WHAT WE ARE TO EXAMINE IS WHEN ON A PARTICULAR GROUND OR REASONS RECORDED BY THE ASSESSING OFFICER, HE REOPENS THE ASSESSMENT BUT MAKES NO ADDITION ON THOSE GROUNDS AND REASONS, THEN WHETHER THE ASSESSING OFFICER CAN MAKE ADDITION IN THAT ASSESSMENT ORDER FOR SOME OTHER GROUNDS OR REASON , WHICH DO NOT FORM PART OF THE REASONS FOR REOPENING AT ALL. IN OUR HUMBLE UNDERSTANDING, IT IS IN THE NEGATIVE . 8 . I N THE CASE OF CI T VS. MOHMED JUNED DADANI (SUPRA), THE HON'BLE GUJARAT HIGH COURT OPINED THAT WHEN ON THE GROUND ON WHICH THE REOPENING OF ASSESSMENT IS BASED, NO ADDITIONS ARE MADE BY THE ASSESSING OFFICER IN THE ORDER OF ASSESSMENT, HE CANNOT MAKE ADDITIONS ON SOME OTHE R GROUNDS WHICH DID NOT FORM PART OF THE REASONS RECORDED BY HIM. IN THIS JUDGMENT, WE ALSO FIND REFERENCE MADE TO THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. JET AIRWAYS (SUPRA) WHEREIN IT WAS HELD CONSIDERING AN IDENTICAL SITUAT ION INTERPRETING THE PROVISIONS CONTAINED IN SECTION 147 OF THE ACT THAT EVEN BY VIRTUE OF INTRODUCTION OF EXPLANATION (3) TO THE SAID SECTION, THE SITUATION WOULD NOT BE DIFFERENT, WHICH MEANS THAT IF UPON ISSUANCE OF A NOTICE UNDER SECTION 148 OF THE ACT , THE ASSESSING OFFICER DOES NOT ASSESS THE INCOME WHICH HE HAS REASON TO BELIEVE, HAD ESCAPED ASSESSMENT AND WHICH FORMS THE BASIS OF A NOTICE UNDER SECTION 148 OF THE ACT, IT IS NOT OPEN TO THE ASSESSING OFFICER TO ASSESS INDEP EN DENTLY ITA NO.98/LKW/20 17 PAGE 6 OF 7 ANY OTHER INCOME W HICH DOES NOT FORM THE SUBJECT MATTER OF THE NOTICE. THIS REASONING GIVEN BY THE HON'BLE BOMABY HIGH COURT IN THE CASE OF CIT VS. JET AIRWAYS (SUPRA) ALSO FOUND IN AGREEMENT WITH THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT WHICH HAS TAKEN SIMILAR VIEW IN THE CASE OF RANBAXY LABORATORIES LTD. VS. CIT REPORTED IN 336 ITR 136 WHEREIN THE HON'BLE DELHI HIGH COURT HAS OBSERVED THAT THE HEADING OF SECTION 147 IS I NCOME ESCAPING ASSESSMENT AND THAT OF SECTION 148 IS I SSUE OF NOTICE WHERE INCOME ESCAPED ASSESS MENT . SECTION 148 IS SUPPLEMENTARY AND COMPLIMENTARY TO SECTION 147. SECTION 147 MANDATES RECORDING OF REASONS TO BELIEVE BY THE ASSESSING OFFICER THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. ALL THESE CONDITIONS ARE REQUIRED TO BE FULFILLED T O ASSESS OR REASSESS THE ESCAPED INCOME CHARGEABLE TO TAX. HOWEVER, THE LEGISLATURE COULD NOT BE PRESUMED TO HAVE INTENDED TO GIVE BLANKET POWERS TO THE ASSESSING OFFICER THAT ON ASSUMING JURISDICTION UNDER SECTION 147 OF THE ACT REGARDING ASSESSMENT OR R EASSESSMENT OF THE ESCAPED INCOME, HE WOULD KEEP O N MAKING ROVING INQUIRY AND THEREBY INCLUDING DIFFERENT ITEMS OF INCOME NOT CONNECTED OR RELATED WITH THE REASONS TO BELI E VE, ON THE BASIS OF WHICH HE ASSUMED JURISDICTION. 9 . WE ALSO FIND THAT IN THE CASE O F CIT VS. SHRI RAM SINGH REPORTED IN 306 ITR 343, THE DIVISION BENCH OF THE HON'BLE RAJASTHAN HIGH COURT HAS HELD THAT THE ASSESSING OFFICER WAS JUSTIFIED IN INITIATING PROCEEDINGS UNDER SECTION 147/148 OF THE ACT, BUT THEN, ONCE HE CAME TO THE CONCLUSION THAT THE INCOME, WITH RESPECT TO WHICH HE HAD ENTERTAINED 'REASON TO BELIEVE' TO HAVE ESCAPED ASSESSMENT, WAS FOUND TO HAVE BEEN EXPLAINED, HIS JURISDICTION CAME TO A STOP AT THAT, AND HE DID NOT CONTINUE TO POSSESS JURISDICTION, TO PUT TO TAX, ANY OTHER I NCOME, WHICH SUBSEQUENTLY CAME TO HIS NOTICE, IN THE COURSE OF THE PROCEEDINGS, WHICH WERE FOUND BY HIM, TO HAVE ESCAPED ASSESSMENT . ITA NO.98/LKW/20 17 PAGE 7 OF 7 10 . AFTER TAKING GUIDANCE FROM THE JUDICIAL PRINCIPLES LAID DOWN IN THE AFORESAID CASES AND CONSIDERING THE FACTS AND CIRCUMSTA NCES OF THE PRESENT CASE, WE ARE OF THE CONSIDERED OPINION THAT THE REASONS RECORDED UNDER SECTION 148 OF THE ACT DOES NOT PERTAIN TO THE ISSUE OF CLAIM UNDER SECTION 54F AND, THEREFORE, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS ARBITRARY, ILLEGAL AND WITHOUT JURISDICTION. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LD. CIT(A) AND ANNUL THE ASSESSMEN T FRAMED BY THE ASSESSING OFFICER UNDER SECTION 147 / 143(3) OF THE ACT AND DELETE THE DISALLOWANCE MADE UNDER SECTION 54F OF THE ACT. WE HAVE ALLOWED THE LEGAL GROUND IN FAVOUR OF THE ASSESSEE, THEREFORE, ALL OTHER GROUNDS ON MERITS TAKEN BY THE ASSESSEE BECOME ACADEMIC AND INFRUCTUOUS. 11 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1/02 / 201 8 . SD/ - SD/ - [ T.S. KAP OOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 ST FEBRUARY , 201 8 JJ: 3101 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR
