Antala Sanjaykumar Ravjibhai,, Dhoraji v. The Commissioner of Income Tax - II,, RAJKOT-GUJARAT

ITA 205/RJT/2008 | 2003-2004
Pronouncement Date: 21-11-2011 | Result: Allowed

Appeal Details

RSA Number 20524914 RSA 2008
Assessee PAN ABUPA6618R
Bench Rajkot
Appeal Number ITA 205/RJT/2008
Duration Of Justice 3 year(s) 7 month(s) 5 day(s)
Appellant Antala Sanjaykumar Ravjibhai,, Dhoraji
Respondent The Commissioner of Income Tax - II,, RAJKOT-GUJARAT
Appeal Type Income Tax Appeal
Pronouncement Date 21-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 21-11-2011
Date Of Final Hearing 29-09-2011
Next Hearing Date 29-09-2011
Assessment Year 2003-2004
Appeal Filed On 16-04-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI D.K. TYAGI (JM) AND SHRI A.L. GEHLOT (A M) I.T.A. NO.205/RJT/2008 (ASSESSMENT YEAR 2003-04) ANTALA SANJAYKUMAR RAVJIBHAI VS THE CIT-II RAJKOT JIN PLOT DHORAJI-360 410 DIST : RAJKOT PAN : ABUPA6618R (APPELLANT) (RESPONDENT) DATE OF HEARING : 29-09-2011 DATE OF PRONOUNCEMENT : 21-11-2011 APPELLANT BY : SHRI JC RANPURA RESPONDENT BY : SHRI YOGESH PANDE O R D E R PER BENCH THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT-II RAJKOT DATED 13-02-2008 PASSED U/S 263 OF THE I.T. ACT FOR THE ASSESSMENT YEAR 2003-04. 2. THE FOLLOWING EFFECTIVE GROUNDS ARE RAISED IN TH E APPEAL: (1) THE LEARNED COMMISSIONER OF INCOME TAX HAS ERR ED IN LAW AND IN FACTS BY ADDING RS.495000.00 BEING GROSS AGR ICULTURAL INCOME AS CONCEALED INCOME AS I HAVE ALREADY SHOWN THE INCOME IN MY RETURN OF INCOME AND THERE IS NOTHING NEW THE INCOME TAX OFFICER HAS FOUND OUT. I HAD FILED REVI SION PETITION U/S 264 AFTER THREE HEARING THE LEARNED COMMISSIONER OF INCOME-TAX ADVISED ME TO WITHDRAW T HE PETITION AND GO FOR APPEAL BEFORE THE APPELLATE COMMISSIONER WITH THE UNDERSTANDING THAT HE WILL DR OP THE PROCEEDING U/S 263. ITA NO.205/RJT/2008 2 (2) THE COMMISSIONER OF INCOME TAX (APPEALS) HAS AL SO CONFIRMED THAT THE INCOME IS AN AGRICULTURAL INCOME AND HENCE NOT LIABLE TO BE TREATED AS INCOME FROM OTHER SOURCES(COPY OF THE ORDER ATTACHED). (3) THE ORDER OF THE COMMISSIONER OF INCOME TAX U/S 263 WAS BASED ON THE ORDER OF INCOME TAX OFFICER WARD 3(1 ) RAJKOT AND IT WAS ONLY REGARDING ADDITION OF EXPENSES CLAI MED. NOW SINCE THE ORIGINAL ORDER OF THE ITO ITSELF IS Q UASHED BY COMMISSIONER OF INCOME TAX (APPEALS) ORDER PASSED BY THE COMMISSIONER OF INCOME TAX U/S 263 SHOULD BE QUASHE D. (4) THE AGRICULTURAL INCOME IS SHOWN IN MY RETURN O F INCOME AND ALSO FULL STATEMENT OF INCOME HA BEEN GIVEN WITH MY RETURN OF INCOME. THEREFORE IT IS NOT COVERED U/S 86 OF THE INCOME TAX ACT. 3. THIS APPEAL OF THE ASSESSEE WAS DECIDED BY ITAT VIDE ORDER DATED 16-02- 2008 WHEREIN THE ITAT HAS DISMISSED THE ASSESSEES APPEAL AS WITHDRAWN. THE ASSESSEE THEREAFTER MOVED MISCELLANEOUS APPLICATION IN MA NO.05/RJT/2009 WHICH HAS BEEN DECIDED BY THE ITAT ON 06 TH MAY 2011 AND THE ORDER DATED 16- 02-2008 HAS BEEN RECALLED ON THE GROUND THAT THERE WAS A MISUNDERSTANDING OF CERTAIN FACTS. THE APPEAL WAS THUS REFIXED FOR HEA RING AGAIN. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD DECLARED AGRICULTURAL INCOME OF RS.4 05 000 IN ITS RETURN OF INCOME APART FROM OTHER INCOMES SUCH AS INCOME FROM SALARY COMMISSION SHARE OF PROFIT E TC. AGGREGATING TO RS.1 53 012. THE ASSESSING OFFICER COMPLETED THE A SSESSMENT U/S 143(3) ON 23- 03-2006. IN THE ORIGINAL ASSESSMENT THE ASSESSING OFFICER HELD THAT NO GENUINE AGRICULTURAL ACTIVITY WAS CARRIED OUT BY THE ASSESS EE DURING THE YEAR. THEREFORE THE AGRICULTURAL INCOME DISCLOSED BY THE ASSESSEE W AS TAKEN AS INCOME FROM UNDISCLOSED SOURCES. THE COMMISSIONER OF INCOME-TA X ON SCRUTINY OF RETURN ITA NO.205/RJT/2008 3 FOUND THAT IN THE ORIGINAL ASSESSMENT ASSESSING OFF ICER OUGHT TO HAVE ASSESSED AGRICULTURAL INCOME AS UNDISCLOSED INCOME AT RS.4 9 5 000 INSTEAD OF RS.4 05 000. THE COMMISSIONER WAS OF THE VIEW THA T THE ASSESSEE HAS DISCLOSED GROSS AGRICULTURAL INCOME OF RS.4 95 000 AND AFTER CLAIMING EXPENSES OF RS.90 000 THE NET AGRICULTURAL INCOME WAS RS.4 0 5 000. THE COMMISSIONER THEREFORE DIRECTED THE ASSESSING OFFICER TO ENHANC E THE ASSESSMENT BY TAKING GROSS AGRICULTURAL INCOME DECLARED IN THE RETURN OF INCOME I.E. RS.4 95 000 INSTEAD OF NET AGRICULTURAL INCOME TAKEN IN THE ORI GINAL ASSESSMENT. WHILE DIRECTING THE ASSESSING OFFICER THE COMMISSIONER H ELD THAT IN THE ORIGINAL ASSESSMENT THE ASSESSING OFFICER HAS EXAMINED ONLY THE ISSUE WHETHER THERE WAS ANY AGRICULTURAL ACTIVITY OR NOT. THE ASSESSIN G OFFICER FAILED TO CONSIDER THE CORRECT AMOUNT OF ADDITION OF AGRICULTURAL INCOME A S TO WHETHER NET AGRICULTURAL INCOME WAS TO BE ADDED OR THE GROSS AGRICULTURAL IN COME WAS TO BE ADDED. 5. WE HAVE HEARD THE LD.REPRESENTATIVES OF THE PART IES RECORD PERUSED. THE ISSUE UNDER CONSIDERATION IS PERTAINING TO SECTION 263 OF IT ACT. THE SAID SECTION READS AS UNDER:- 263. (1) THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD 3 OF ANY PROCEEDING UNDER THIS ACT AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE 4 [ASSESSING] OFFICER IS ERRONEOUS IN SO FAR 3 AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE 3 HE MAY AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT OR CAN CELLING THE ASSESSMENT 3 AND DIRECTING A FRESH ASSESSMENT. 5 [ EXPLANATION .FOR THE REMOVAL OF DOUBTS IT IS HEREBY DECLARED THAT FOR THE PURPOSES OF THIS SUB-SECTION ITA NO.205/RJT/2008 4 ( A ) AN ORDER PASSED 6 [ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE 1988] B Y THE ASSESSING OFFICER SHALL INCLUDE ( I ) AN ORDER OF ASSESSMENT MADE BY THE ASSISTANT COMM ISSIONER 7 [OR DEPUTY COMMISSIONER] OR THE INCOME-TAX OFFICER ON T HE BASIS OF THE DIRECTIONS ISSUED BY THE 8 [JOINT] COMMISSIONER UNDER SECTION 144A ; ( II ) AN ORDER MADE BY THE 8 [JOINT] COMMISSIONER IN EXERCISE OF THE POWERS OR IN THE PERFORMANCE OF THE FUNCTIONS OF AN ASSESSING OFFICER CONFERRED ON OR ASSIGNED TO HIM UNDER THE ORDERS OR DIRECTIONS ISSUED BY THE BOARD OR BY THE CHIEF COMM ISSIONER OR DIRECTOR GENERAL OR COMMISSIONER AUTHORISED BY THE BOARD IN THIS BEHALF UNDER SECTION 120 ; ( B ) RECORD 9 [SHALL INCLUDE AND SHALL BE DEEMED ALWAYS TO HAVE I NCLUDED] ALL RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT A VAILABLE AT THE TIME OF EXAMINATION BY THE COMMISSIONER; ( C ) WHERE ANY ORDER REFERRED TO IN THIS SUB-SECTION A ND PASSED BY THE ASSESSING OFFICER HAD BEEN THE SUBJECT MATTER OF AN Y APPEAL 10 [FILED ON OR BEFORE OR AFTER THE 1ST DAY OF JUNE 1988] THE POWERS OF THE COMMISSIONER UNDER THIS SUB-SECTION SHALL EXTEND 10 [AND SHALL BE DEEMED ALWAYS TO HAVE EXTENDED] TO SUCH MATTERS AS HAD NOT BEEN CONSIDERED AND DECIDED IN SUCH APPEAL.] [(2) NO ORDER SHALL BE MADE UNDER SUB-SECTION (1) AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORD ER SOUGHT TO BE REVISED WAS PASSED.] (3) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTI ON (2) AN ORDER IN REVISION UNDER THIS SECTION MAY BE PASSED AT ANY TIME IN THE CASE OF AN ORDER WHICH HAS BEEN PASSED IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN AN ORDER OF THE APPELLATE TRIBUNAL 12 [NATIONAL TAX TRIBUNAL ] THE HIGH COURT OR THE SUPREME COURT. EXPLANATION .IN COMPUTING THE PERIOD OF LIMITATION FOR THE PUR POSES OF SUB- SECTION (2) THE TIME TAKEN IN GIVING AN OPPORTUNIT Y TO THE ASSESSEE TO BE REHEARD UNDER THE PROVISO TO SECTION 129 AND ANY PERIOD DURING WHICH ANY PROCEEDING UNDER THIS SECTION IS STAYED BY AN ORDER OR INJUNCT ION OF ANY COURT SHALL BE EXCLUDED. 5.1 FROM A READING OF SUB-SECTION (1) OF SE CTION 263 IT IS CLEAR THAT THE POWER OF SUO MOTU REVISION CAN BE EXERCISED BY THE COMMISSIONER ONLY IF ON EXAMINATION OF THE RECORDS OF ANY PROCEEDINGS UNDER THIS ACT HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE INCOME-TAX OFFICER IS ' ERRONEOUS IN SO FAR AS IT IS ITA NO.205/RJT/2008 5 PREJUDICIAL TO THE INTERESTS OF THE REVENUE'. IT IS NOT AN ARBITRARY OR UNCHARTERED POWER. IT CAN BE EXERCISED ONLY ON FULFILLMENT OF T HE REQUIREMENTS LAID DOWN IN SUB-SECTION (1). THE CONSIDERATION OF THE COMMISSIO NER AS TO WHETHER AN ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT ERESTS OF THE REVENUE MUST BE BASED ON MATERIALS ON THE RECORD OF THE PROCEEDINGS CALLED FOR BY HIM. IF THERE ARE NO MATERIALS ON RECORD ON THE BASIS OF WHICH IT CAN BE SAID THAT THE COMMISSIONER ACTING IN A REASONABLE MANNER COULD HA VE COME TO SUCH A CONCLUSION THE VERY INITIATION OF PROCEEDINGS BY H IM WILL BE ILLEGAL AND WITHOUT JURISDICTION. THE POWER OF SUO MOTU REVISION UNDER SUB-SECTION (1) IS IN THE NATURE OF SUPERVISORY JURISDICTION AND THE SAME CAN BE EXE RCISED ONLY IF THE CIRCUMSTANCES SPECIFIED THEREIN EXIST. TWO CIRCUMST ANCES MUST EXIST TO ENABLE THE COMMISSIONER TO EXERCISE POWER OF REVISION UNDE R THIS SUBSECTION VIZ. (1) THE ORDER IS ERRONEOUS ; (2) BY VIRTUE OF THE ORDER BEING ERRONEOUS PREJUDI CE HAS BEEN CAUSED TO THE INTERESTS OF THE REVENUE. IT HAS THEREFORE TO BE CONSIDERED FIRST AS TO WH EN AN ORDER CAN BE SAID TO BE ERRONEOUS. WE FIND THAT THE EXPRESSIONS 'ERRONEOUS' 'ERRONEOUS ASSESSMENT' AND 'ERRONEOUS JUDGMENT' HAVE BEEN DEFINED IN BLACK 'S LAW DICTIONARY. ACCORDING TO THE DEFINITION 'ERRONEOUS' MEANS 'INV OLVING ERROR; DEVIATING FROM THE LAW'. 'ERRONEOUS ASSESSMENT' REFERS TO AN ASSESSMEN T THAT DEVIATES FROM THE LAW AND IS THEREFORE INVALID AND IS DEFECT THAT IS J URISDICTIONAL IN ITS NATURE SIMILARLY 'ERRONEOUS JUDGMENT' MEANS 'ONE RENDERED ACCORDING TO COURSE AND PRACTICE OF COURT BUT CONTRARY TO LAW UPON MISTAKEN VIEW OF L AW OR UPON ERRONEOUS APPLICATION OF LEGAL PRINCIPLES. AN ORDER CANNOT B E TERMED AS ERRONEOUS UNLESS IT ITA NO.205/RJT/2008 6 IS NOT IN ACCORDANCE WITH LAW. IF AN INCOME TAX OFF ICER ACTING IN ACCORDANCE WITH LAW MAKES AN ASSESSMENT THE SAME CANNOT BE BRANDED AS ERRONEOUS BY THE COMMISSIONER SIMPLY BECAUSE ACCORDING TO HIM THE AO SHOULD MADE THOROUGH ENQUIRY AND ORDER SHOULD HAVE BEEN WRITTEN MORE ELA BORATELY. THIS SECTION DOES NOT VISUALISE A CASE OF SUBSTITUTION OF THE JUDGMEN T OF THE COMMISSIONER FOR THAT OF THE INCOME-TAX OFFICER WHO PASSED THE ORDER UN LESS THE DECISION IS HELD TO BE ERRONEOUS. CASES MAY BE VISUALISED WHERE THE INCOME -TAX OFFICER WHILE MAKING AN ASSESSMENT EXAMINES THE ACCOUNTS MAKES ENQUIRIE S APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINES THE INCOME EITHER BY ACCEPTING THE ACCOUNTS OR BY MAKING SOME CHANGES. T HE COMMISSIONER ON PERUSAL OF THE RECORDS MAY BE OF THE DIFFERENT OPI NION THAN THE OPINION OF THE INCOME-TAX OFFICER. THAT WOULD NOT VEST THE COMMISS IONER WITH POWER TO RE- EXAMINE THE ACCOUNTS AND EXPRESS DIFFERENT OPINION. IT IS BECAUSE THE INCOME-TAX OFFICER HAS EXERCISED THE QUASI-JUDICIAL POWER VEST ED IN HIM IN ACCORDANCE WITH LAW AND ARRIVED AT A CONCLUSION AND SUCH A CONCLUSI ON CANNOT BE TERMED TO BE ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER DOES NOT FEEL SATISFIED WITH THE CONCLUSION. IT MAY BE SAID IN SUCH A CASE THAT IN T HE OPINION OF THE COMMISSIONER THE ORDER IN QUESTION IS PREJUDICIAL TO THE INTERES TS OF THE REVENUE. BUT THAT BY ITSELF WILL NOT BE ENOUGH TO VEST THE COMMISSIONER WITH THE POWER OF SUO MOTU REVISION BECAUSE THE FIRST REQUIREMENT VIZ. THAT THE ORDER IS ERRONEOUS IS ABSENT . 6. IN THE LIGHT OF ABOVE DISCUSSION IF WE CONSIDER THE FACTS OF THE CASE UNDER CONSIDERATION WE FIND THAT IN THE ORIGINAL ASSESSME NT THE ASSESSING OFFICER HAS ITA NO.205/RJT/2008 7 EXAMINED THE ISSUES RELATING TO AGRICULTURAL INCOME AND FOUND THAT THERE WAS NO GENUINE AGRICULTURAL ACTIVITIES CARRIED OUT BY THE ASSESSEE. IN THE ORIGINAL ASSESSMENT THE ASSESSING OFFICER HAS TREATED AGRICU LTURAL INCOME OF RS.4 05 000 AS UNDISCLOSED INCOME INSTEAD OF GROSS AMOUNT OF RS .4 95 000. IN THE ORIGINAL ASSESSMENT THE ASSESSING OFFICER HAS TAKEN A PARTIC ULAR VIEW CONSCIENTIOUSLY SAFTER CONSIDERING THE FACTS OF THE CASE. NOW THE COMMISSIONER WANTS TO SUBSTITUTE HIS VIEW WITH THAT OF THE ASSESSING OFFI CER WHICH IS TOTALLY A DIFFERENT VIEW WHICH IS NOT PERMISSIBLE IN LAW. SINCE THE OR DER OF ASSESSING OFFICER IS NOT ERRONEOUS WE HAVE NO HESITATION IN SETTING ASIDE T HE ORDER U/S 263 PASSED BY THE COMMISSIONER AND ALLOW THE APPEAL FILED BY THE ASSESSEE. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON -11-2011. SD/- SD/- (D.K. TYAGI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT DT : NOVEMBER 2011 PK/- ORDER PRO0NOUNCED ON 21-11-2011 SD/- SD/- JM AM COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT-II RAJKOT 4. THE DR I.T.A.T. RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT