Shri Uttam Singh, Phagwara v. DCIT( Internantional Taxation) Circle, Chandigarh

ITA 201/CHANDI/2020 | 2011-2012
Pronouncement Date: 03-05-2021 | Result: Allowed

Appeal Details

RSA Number 20121514 RSA 2020
Assessee PAN AMSPS6617H
Bench Chandigarh
Appeal Number ITA 201/CHANDI/2020
Duration Of Justice 1 year(s) 2 month(s) 8 day(s)
Appellant Shri Uttam Singh, Phagwara
Respondent DCIT( Internantional Taxation) Circle, Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 03-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 03-05-2021
Last Hearing Date 09-02-2021
First Hearing Date 09-02-2021
Assessment Year 2011-2012
Appeal Filed On 25-02-2020
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH (VIRTUAL COURT) BEFORE: SHRI N.K. SAINI VICE PRESIDENT AND SHRI R.L. NEGI JUDICIAL MEMBER ./ ITA NO. 201/CHD/2020 / ASSESSMENT YEAR : 2011-12 SH. UTTAM SINGH C/O C.R. GAUTAM & ASSOCIATES GT ROAD PHAGWARA 144401 THE D.C.I.T. (INTERNATIONAL TAXATION) CIRCLE CHANDIGARH. ./PAN NO: AMSPS6617H /APPELLANT /RESPONDENT /ASSESSEE BY: SHRIJ.S.BHASIN ADVOCATE ! / REVENUE BY: SH. ASHOK KUMAR KHANNA ADDITIONAL C IT (DR) ' # $ /DATE OF HEARING: 09.02.2021 %&'( $ /DATE OF PRONOUNCEMENT: 03.05. 2021 / ORDER PER R.L. NEGI JUDICIAL MEMBER : THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 17.12.2019 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-43 [IN SHORT THE LD.CIT(A)] NEW DELHI WHEREBY THE LD.CIT(A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESS MENT ORDER PASSED BY THE AO U/S 144 READ WITH SECTION 14 7 OF THE OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED T O AS ACT) PERTAINING TO THE ASSESSMENT YEAR 2011-12. ITA NO.201/CHD/2020 A.Y.2011-12 PAGE 2 OF 9 2. THE BRIEF FACTS EMANATING FROM THE RECORD AND TH E PLEADINGS OF THE PARTIES ARE THAT THEAO ISSUED NOTI CE U/S 148 OF THE ACT ON 19.03.2018 AFTER OBTAINING APPROV AL FROM THE COMPETENT AUTHORITY. HOWEVER THE AO DID NOT RE CEIVE ANY RESPONSE FROM THE ASSESSEE. THEREAFTER THE AO I SSUED NOTICES U/S 142(1). AGAIN NO RESPONSE WAS RECEIVED . ULTIMATELY THE AO PASSED THE ASSESSMENT ORDER U/S 144READ WITH SECTION 147 OF THE OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 33 14 716/-AFTER MAKI NG ADDITION OF RS. 33 00 000/-AS INCOME FROMUNDISCLOSE D SOURCE UNDER THE PROVISIONS OF SECTION 69 OF THE AC T AND RS. 14 716/- AS INCOME FROM OTHER SOURCES. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE CIT(A). THE LD. CIT(A) AFTER HEARING THE ASSESSEE UPHELD THE ACTION OF THE AO AND DISMISSED THE ASSESSEES APPEAL. AGAINST THE SAID FINDINGS OF THE LD. CIT(A) THE ASSESSEE HAS PREFER RED THE PRESENT APPEAL BEFORE THIS TRIBUNAL. 3. THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD . CIT(A) ON THE FOLLOWING GROUNDS: 1. THAT WHEN THE AO PASSING THE IMPUGNED ORDER HAD NEITHER RECORDED REASONS U/S 142(2) NOR ISSUED NOTICE U/S 148 THE IMPUGNED ORDER OUGHT TO HAVE BEEN HELD AS VOID AB INITIO BY THE LD. CIT(A). ITA NO.201/CHD/2020 A.Y.2011-12 PAGE 3 OF 9 2. THAT THERE BEING NO ORDER PASSED U/S 127(2) BY THE COMPETENT AUTHORITY TRANSFERRING THE CASE FROM ITO PHAGWARA (WHO OTHERWISE HAD UNLAWFULLY USURPED JURISDICTION IN THIS CASE) TO DCIT (INTL. TAXATION) THE LETTER AO COULD NOT LAWFULLY AVAIL THE BENEFIT OF CONTINUITY OF PROCEEDINGS AS ENVISAGED U/S 127(4) OF THE INCOME TAX ACT 1961. 3. THAT THE ABSENCE OF SERVICE OF STATUTORY NOTICE U/S 148 ON ASSESSEE IN A MANNER KNOWN TO LAW THE ORDER UNDER APPEAL WAS A NULLITY AND OUGHT TO HAVE BEEN QUASHED BY THE LD. CIT(A) ON THIS VERY PREMISE. 4. THAT WITHOUT PREJUDICE TO ABOVE THE LD. CIT(A) GROSSLY ERRED IN SUMMARILY UPHOLDING THE INITIATION OF PROCEEDINGS U/S 147 WHEN THE PREREQUISITES OF THE SAID SECTIONS HAD NOT BEEN COMPLIED WITH BY THE AO WHILE RECORDING REASONS U/S 148(2). 5. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN ARBITRARILY SUSTAINING THE ADDITION OF RS. 23 50 000/- WITHOUT AFFORDING PROPER OPPORTUNITY OF HEARING TO ASSESSEE AFTER THE RECEIPT OF REMAND REPORT FROM THE AO. 6. THAT THE LD. CIT(A) WRONGLY CONFIRMED THE IMPUGNED ADDITION BY OVERLOOKING THE DOCUMENTS FILED IN APPEAL AS ADDITIONAL EVIDENCE TO SUBSTANTIATE THE CREDITS IN BANK AS REPRESENTING THE SALE PROCEEDS OF THE SAID HOUSE. ITA NO.201/CHD/2020 A.Y.2011-12 PAGE 4 OF 9 7. THAT THE IMPUGNED ORDER TO THE EXTENT DISPUTED HEREIN IS AGAINST LAW AND FACTS OF THE CASE. 4. AT THE OUTSET THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LEGAL GROUNDS RAISED BY THE ASSE SSEE IN THIS CASE ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF SH. MANJIT SINGH VS. DCIT INTERNATIONAL TAXATION CHANDIGARH ITA NO. 867/CHD/2018 FOR THE ASSESSMENT YEAR 2009-10. THE LD. COUNSEL FURTHER POINTED OUT THAT S INCE THE FINDINGS OF THE LD. CIT(A) ARE CONTRARY TO THE DECI SION OF THE JURISDICTIONAL BENCH OF THE TRIBUNAL THE SAME DESE RVES DISMISSAL. THE LD. COUNSEL INVITED OUR ATTENTION TO FACTS OF THE CASE AND THE CIRCUMSTANCES UNDER WHICH THE LD. CIT(A) HAD PASSED THE ORDER IN THE ABOVE REFERRED CASETO S HOW THAT IN THE PRESENT CASE THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER IN THE SIMILAR SET OF FACTS AND CIRCUMSTANCES . 5. ON THE OTHER HAND THE LD. DEPARTMENTAL REPRESENTATIVE (DR) DID NOT DENY THE FACTS STATED B Y THE LD.COUNSEL FOR THE ASSESSEE. THE LD. DR FURTHER ADM ITTED THAT THE LEGAL ISSUES RAISED IN THIS CASE IS COVERE D IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT IN THE CASE OF SH. MANJIT SINGH VS. DCIT INTERNATIONAL TAXATION . THE LD. DR FURTHER ADMITTED THAT NOTICE U/S 148 IN THIS CASE W AS NOT ISSUED BY THE AO WHO HAS PASSED THE ASSESSMENT ORDE R. ITA NO.201/CHD/2020 A.Y.2011-12 PAGE 5 OF 9 HOWEVER THE LD. DR SUPPORTED THE ORDER PASSED BY T HE DCIT (INTERNATIONAL TAXATION) AND THE LD. CIT(A). 6. WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD INCLUDING THE DECISION OF THE COORDINATE BENCH IN T HE LIGHT OF THE SUBMISSIONS MADE BY THE LD.COUNSEL FOR THE ASSE SSEE. THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER ON L EGAL GROUNDS AS WELL AS ON MERITS. WE FIND THAT THE LEGA L GROUNDS RAISED BY THE ASSESSEE IN THIS CASE ARE SIMILAR TO THE LEGAL GROUNDS RAISED BY THE ASSESSEE IN THE CASEOF SH. MANJIT SINGH VS. DCIT INTERNATIONAL TAXATION RELIED UPON BY THE LD. COUNSEL. AS POINTED OUT BY THE LD. COUNSEL THE COOR DINATE BENCH HAS DECIDED THE IDENTICAL LEGAL GROUNDS RAISE D BY THE ASSESSEE IN THE SAID CASE IN FAVOUR OF THE ASSESSEE HOLDING AS UNDER: 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE M AIN AND FOREMOST GRIEVANCE OF THE LD. COUNSEL FOR THE ASSESSEE IN THIS CASE IS REGARDING THE VALIDITY OF RE- ASSESSMENT ORDER FRAMED BY THE DCIT (INTERNATIONAL TAXATION) ON THE GROUND OF NON-ISSUANCE OF NOTICE U /S 148 OF THE ACT BY DCIT (INTERNATIONAL TAXATION). IT HAS SUBMITTED THAT THE ASSESSMENT HAS BEEN FRAMED BY TH E DCIT (INTERNATIONAL TAXATION) ON THE BASIS OF THE B ORROWED SATISFACTION OF THE ITO DASUYA INSTEAD OF HIMSELF FORMING THE BELIEF REGARDING THE ESCAPEMENT OF INCOME OF TH E ASSESSEE. AS PER THE NARRATION OF EVENTS AS DISCUSSED ABOVE FIRSTLY IN THE YEAR 2012 THE QUERIES WERE RAISED BY THE ITO DASUYA REGARDING THE AFORESAID DEPOSIT OF AMOUN T OF ITA NO.201/CHD/2020 A.Y.2011-12 PAGE 6 OF 9 RS. 30.68 LACS IN THE BANK ACCOUNT OF THE ASSESSEE HOWEVER THEREAFTER THE ITO DASUYA REMAINED SILENT FOR ABOUT FOUR YEARS. THEREAFTER THE ITO HOSHIARPUR IS SUED QUERIES VIDE LETTER DATED 18.2.2016 ABOUT THE SAME BANK TRANSACTIONS. THE ASSESSEE VIDE LETTER DATED 09.02. 2016 INFORMED THE ITO HOSHIARPUR THAT HE WAS A NON-RESID ENT INDIAN FURTHER NECESSARY DETAILS LIKE COPIES OF PA N CARD PASSPORT PERMANENT RESIDENT CARD ETC. WERE ATTACHE D WITH THE SAID LETTER. HOWEVER AFTER CONSIDERING TH E PAN DETAILS OF THE ASSESSEE ITO HOSHIARPUR TRANSFERRE D THE CASE TO ITO DASUYA. THE ITO HOSHIARPUR DID NOT MA KE ANY COMMENTS ABOUT THE NON-RESIDENT STATUS OF THE ASSESSEE. AGAIN QUERIES WERE RAISED BY THE ITO DA SUYA AND EVEN A NOTICE U/S 148 OF THE ACT WAS ALSO ISSUE D BY THE ITO DASUYA TO THE ASSESSEE. THE ASSESSEE IN RESPONSE AGAIN DULY AFFIRMED THAT HE WAS A NON-RES IDENT INDIAN AND THAT THE JURISDICTION TO ASSESS HIM DID NOT VEST WITH THE ITO DASUYA. THEREAFTER THE ITO DASUYA A GAIN ISSUED LETTER TO THE ASSESSEE AND AFTER BEING SATIS FIED HE HIMSELF TRANSFERRED THE CASE TO THE ADIT (INTERNATI ONAL TAXATION) CHANDIGARH FOR TAXATION. THEREAFTER LD. DCIT (INTERNATIONAL TAXATION) NEITHER RECORDED ANY REASO NS TO BELIEVE THAT INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT NOR ISSUED ANY NOTICE U/S 148 OF THE ACT . THE DCIT (INTERNATIONAL TAXATION) CONTINUED PROCEEDINGS FROM THE STAGE THESE WERE LEFT BY THE ITO DASUYA. A PER USAL OF THE ABOVE SEQUENCE REVEALS THAT THE ITO DASUYA DID NOT HAVE ANY JURISDICTION OVER THE ASSESSEE AND AS SUC H THE NOTICE U/S 148 OF THE ACT BY THE ITO DASUYA BEING WITHOUT JURISDICTION WAS NOT VALID. THOUGH THE FAC T THAT THE ASSESSEE WAS A NON-RESIDENT INDIAN WAS DULY MENTIONED TO THE ITO HOSHIARPUR AND THE ENTIRE REC ORD ALONG WITH REPLY OF THE ASSESSEE WAS TRANSFERRED TO ITO DASUYA APART FROM THAT THE ITO DASUYA ALSO WAS INFORMED VIDE SEPARATE REPLIES AS MENTIONED ABOVE THAT THE ASSESSEE WAS A PERMANENT RESIDENT OF USA ITO ITA NO.201/CHD/2020 A.Y.2011-12 PAGE 7 OF 9 DASUYA CONTINUED TO PROCEED WITH THE RE-ASSESSMENT AND ISSUED NOTICES U/S 148 OF THE ACT. THE FACT THAT TH E ASSESSEE WAS AN NRI WAS VERY MUCH ON THE RECORD. UN DER THE CIRCUMSTANCES THE ITO DASUYA HAD NO JURISDICTI ON TO INITIATE REOPENING OF THE ASSESSMENT BY WAY OF ISSU ANCE OF NOTICE U/S 148 OF THE ACT. HOWEVER THEREAFTER H E TRANSFERRED THE CASE TO ADIT (INTERNATIONAL TAXATIO N) FULLY CONVINCED THAT HE HIMSELF HAD NO JURISDICTION TO MA KE ASSESSMENT IN THE CASE OF THE ASSESSEE. 7. ADMITTEDLY NO NOTICE U/S 148 OF THE ACT BY THE DCIT (INTERNATIONAL TAXATION) CHANDIGARH TO THE ASSESSE E WAS ISSUED. SINCE THE ITO DASUYA HAD NO JURISDICTION T O REOPEN THE ASSESSMENT HENCE ANY NOTICE ISSUED BY HIM HAS NO LEGAL VALIDITY. SO FAR AS THE DCIT (INTERNAT IONAL TAXATION) CHANDIGARH IS CONCERNED HE ADMITTEDLY D ID NOT ISSUE ANY NOTICE U/S 148 OF THE ACT TO THE ASSESSEE THEREFORE THE VERY REOPENING OF THE ASSESSMENT WIT HOUT ISSUANCE OF NOTICE U/S 148 OF THE ACT BY THE ASSESS ING OFFICER OF THE COMPETENT JURISDICTION IS BAD IN LA W AND THE CONSEQUENTIAL ASSESSMENT FRAMED U/S 147 OF THE ACT IS NOT SUSTAINABLE IN THE EYES OF THE LAW AND THE SAME IS ACCORDINGLY LIABLE TO BE QUASHED. 12. SO FAR AS THE ARGUMENT OF THE LD. DR THAT THE I TO DASUYA HAD TRANSFERRED THE CASE TO DCIT (INTERNATIO NAL TAXATION ) CHANDIGARH AND HENCE THERE WAS NO REQUIREMENT OF ISSUING OF FRESH NOTICE U/S 148 OF T HE ACT AS PER THE PROVISIONS OF SECTION 127 (4) OF THE ACT IS CONCERNED WE DO NOT FIND ANY FORCE IN THE ABOVE CONTENTION OF THE LD. DR. FIRSTLY THE RE-ASSESSMEN T PROCEEDINGS INITIATED BY THE ITO DASUYA WERE WITHO UT JURISDICTION AND THE SAME WERE VOIDABINITIO HENCE ANY TRANSFER OF SUCH VOID PROCEEDINGS TO THE ASSESSING OFFICER OF COMPETENT JURISDICTION DID NOT VALIDATE HIS ACTI ON AND THE PROCEEDINGS. EVEN OTHERWISE AS PER THE PROVISI ONS OF SECTION 127 OF THE ACT ITO DASUYA HIMSELF HAD NO ITA NO.201/CHD/2020 A.Y.2011-12 PAGE 8 OF 9 JURISDICTION TO SUO MOTU TRANSFER THE CASE TO THE D CIT (INTERNATIONAL TAXATION). RATHER THE TRANSFER OF T HE CASE AS PER THE PROVISIONS OF SECTION 127 (1) OF THE ACT CAN BE ORDERED BY THE COMPETENT AUTHORITY PRESCRIBED IN TH E SAID PROVISIONS. IN VIEW OF THIS THE REOPENING OF THE ASSESSMENT BY THE DCIT (INTERNATIONAL TAXATION) WAS NOT VALID AND THE SAME IS ACCORDINGLY QUASHED. 7. WE NOTICE THAT IN THE PRESENT CASE NOTICE U/S 14 8 OF THE ACT WAS ISSUED BY THE ITO PHAGWARA AFTER RECORDING REASONS FOR INITIATING PROCEEDINGS U/S 147 OF THE ACT WHEREAS THE ASSESSM ENT ORDER U/S 144 READ WITH SECTION 147 WAS PASSED BY THE DCIT (INTER NATIONAL TAXATION) CIRCLE CHANDIGARH. FURTHER THECOMPETENT AUTHORITY HAS NOT PASSED ANY ORDER U/S 127(2) OF THE ACT FOR TRANSFERRING THE CA SE FROM ITO PHAGWARA TO THE DEPUTY COMMISSIONER OF INCOME TAX (INTERNATI ONAL TAXATION) CIRCLE CHANDIGARH. SINCE THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF SH. MANJIT SINGH VS. DCIT INTERNATIONAL TAXATION (SUPRA) AND SINCE THE FACTS AND ISSUES INVOLVED IN THE PRESENT CASE ARE IDENTICAL T O THE FACTS OF THE OF THE PRESENT CASE WE FIND MERIT IN THE LE GAL ISSUES RAISED BY THE ASSESSEE IN ITS APPEAL. HENCE RESPEC TFULLY FOLLOWING THEDECISION OF THE COORDINATE BENCH WE A LLOW THE LEGAL GROUNDS RAISED BY THE APPELLANT/ASSESSEE IN T HE PRESENT CASE AND QUASH THE ORDER PASSED BY THE LD. DCIT (INTERNATIONAL TAXATION). ITA NO.201/CHD/2020 A.Y.2011-12 PAGE 9 OF 9 8. SINCE WE HAVE QUASHED THE ORDER PASSED BY THE LD . DCIT (INTERNATIONAL TAXATION) U/S 144 READ WITH SEC TION 147 OF THE ACT BY ALLOWING THE LEGAL GROUNDS RAISED BY THE ASSESSEE WE DO NOT DEEM IT NECESSARY TO ADJUDICATE THE OTHER GROUNDS RAISED BY THE APPELLANT/ASSESSEE ON M ERITS. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 03.05.2021. SD/- SD/- (N. K. SAINI) (R.L. NEGI ) (VICE PRESIDENT) (JUDICIAL MEMBER) DATED: 03 RD MAY 2021 *RANJAN &) *+ + / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 $ 0 123/4 / DR ITAT CHANDIGARH 6. /3 5# / GUARD FILE &) ' / BY ORDER 6 ! / ASSISTANT REGISTRAR