ACIT, Agra v. M/s Virendra Kumar & Sons HUF, Agra

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER AND SHRI H.S. SIDHU JUDICIAL MEMBER ITA NOS.223 & 224/AGR/2009 ASST. YEARS: 1999-2000 & 1997-98 ASSTT. COMMISSIONER OF INCOME TAX VS. M/S VIREND RA KUMAR & SONS HUF CIRCLE-1 AGRA. 30/141 CHHIPITOLA AGRA. (PAN : AACHU 5708 E). ITA NO.226/AGR/2009 ASST. YEAR: 1997-98 ASSTT. COMMISSIONER OF INCOME TAX VS. SHRI VINAY AK KUMAR CIRCLE-1 AGRA. 6-C M.G. ROAD AGRA. (PAN : ACWPK 4269 K) (APPELLANTS) (RESPONDENTS) APPELLANTS BY : SHRI VINOD KUMAR JR. D.R. RESPONDENTS BY: SHRI P.N. AGARWAL ADVOCATE ORDER PER H.S. SIDHU J.M. : THE REVENUE HAS FILED THE PRESENT APPEALS AGAINST T HE DIFFERENT ORDERS OF THE CIT(A) DATED 06.06.2005 04.03.2009 & 06.06.2005 RESPECTIV ELY. 2. THE REVENUE HAS TAKEN ALMOST SIMILAR GROUNDS OF APPEAL IN ALL THESE APPEALS. FOR THE SAKE OF CONVENIENCE WE ARE REPRODUCING GROUNDS TAK EN IN ITA NO.223/AGR/2003 AS UNDER :- (1) THAT THE CIT (APPEALS)-I AGRA HAS ERRED IN LA W IN AND ON FACTS IN HOLDING THE RE-ASSESSMENT PROCEEDINGS U/S 147/148 OF IT ACT 1961 AS INVALID EVEN WHEN THE SAME WAS INITIATED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 147/148 OF INCOME TAX ACT 1961 AFTER RECORDING VA LID REASONS. THE A.O. HAD INFORMATION IN HIS POSSESSION THAT THE ASSESSEE HAD TAKEN BOGUS LOAN ENTRIES FROM GANGA RAM GROUP. IN THE REASONS RECOR DED HE CLEARLY MENTIONED THAT HE HAD REASON TO BELIEVE THAT INCOME (EQUAL TO THE AMOUNT 2 OF LOAN ENTRIES) CHARGEABLE TO TAX HAS ESCAPED ASSE SSMENT AND ISSUED NOTICE U/S 148 OF IT ACT 1961 AS PER LAW; (B) THAT THE CIT (APPEALS )-1 AGRA HAS ERRED IN L AW IN AND ON FACTS IN HOLDING THE RE-ASSESSMENT PROCEEDINGS U/S 147/148 O F IT ACT 1961 AS INVALID FOLLOWING THE ORDER DATED 30-09-2008 OF HO N'BLE ITAT IN THE CASE OF M/S. AGRA CHEMICALS VS. ACIT-2 AGRA IN ITA NO.1 34/AGR/06 FOR THE A.Y. 1997-98 THOUGH THE SAID ORDER OF HON'BLE ITAT HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND APPEAL U/S. 260A OF IT ACT; 1961 HAS BEEN FILED BEFORE HON'BLE HIGH COURT ALLAHABAD AND THE SAME IS PENDING; (C) THAT THE CIT (APPEALS)-I AGRA HAS ERRED IN LA W IN AND ON FACTS IN HOLDING THE RE-ASSESSMENT PROCEEDINGS AS INVALID FOLLOWING THE ORDER DATED 30.09.2008 OF HON'BLE ITAT IN THE CASE OF M/S. AGRA CHEMICALS VS. ACIT- 2 AGRA IN ITA NO.134/AGR/06 FOR THE A.Y. 1997-98 THOUGH IN ANOTHER IDENTICAL CASE OF SMT. USHA AGRAWAL IN A.NO.290/CIT (A)- 1/AGRA/ACIT/AGRA/2008-09 DATED 11-02-2009 LD. CIT(A ) HELD THE PROCEEDINGS U/S 147/148 OF IT ACT 1961 AS VALID R ELYING UPON THE DECISIONS OF APEX COURT IN THE CASE OF ITO VS. SELE CTED DALURBAND COAL P. LTD. 217 ITR 597(SC) AND RAYMOND WOOLEN MILLS L TD. VS. ITO 236 ITR (SC) AND ALSO RELYING UPON THE DECISION OF HON' BLE ITAT AGRA IN THE CASE OF SHIBHIMAL DO LIC VS. ACIT-2 AGRA IN ITA NO.433/AGR/2007 DATED 30-09-2009; (2) THAT THOUGH THE TAX EFFECT IN THE A.Y.1999-2000 IS LESS THAN RS. TWO LACS APPEAL U/S 253(2) OF IT ACT 1961 IS FILED BECAUSE T HE ORDER DATED 04.03.2009 OF CIT(A) IS A COMPOSITE ORDER FOR THE A .Y. 1997-98 & 1999- 2000 AND IN THE A.Y. 1999-2000 FOR WHICH APPEAL U/ S 253(2) IS BEING FILED SEPARATELY THE TAX EFFECT IS ABOVE RS. TWO LACS. (3) THAT THE APPELLANT CRAVES LEAVE TO ADD OR DELET E OR ALTER OR MODIFY ANYONE OR MORE GROUND(S) OF APPEAL DURING THE APPELLATE PR OCEEDINGS. (4) THAT THE ORDER OF THE CIT (APPEALS)-I AGRA BEI NG ERRONEOUS IN LAW AND ON FACTS BE SET ASIDE AND THAT THE ORDER OF THE ASSESS ING OFFICER BE RESTORED. 3. FACTS ARE NOT DISPUTED BY BOTH THE PARTIES THER EFORE NO NEED TO REPEAT THE SAME FOR THE SAKE OF REPETITION. 4. LD. D.R. STATED THAT THE LD. FIRST APPELLATE AUT HORITY HAS PASSED THE IMPUGNED ORDER WHICH IS CONTRARY TO THE DIRECTIONS OF THE ORDER DA TED 31.05.2007 PASSED IN ITA NOS.367 & 3 368/AGR/2005 & C.O. NOS.87 & 88/AGR/2005 IN WHICH T HIS BENCH HAS GIVEN DIRECTION TO THE CIT(A) FOR TAKING FRESH DECISION ON LEGAL GROUNDS A S WELL AS ON MERIT OF THE CASES OF THE ASSESSEE AFTER GIVING PROPER AND EFFECTIVE OPPORTUNITY OF BE ING HEARD TO THE PARTIES. BUT THE LD. FIRST APPELLATE AUTHORITY HAS PASSED THE IMPUGNED ORDER W HICH IS NON-SPEAKING ONE AND HE REQUESTED THAT THE APPEALS FILED BY THE REVENUE MAY BE ACCEPT ED BY CANCELING THE IMPUGNED ORDER. 5. ON THE CONTRARY THE LD. COUNSEL FOR THE ASSESSE E RELIED UPON THE ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY AND STATED THAT THE LD. C IT(A) HAS RIGHTLY FOLLOWED THE ORDER OF JURISDICTIONAL BENCH AND DECIDED THE LEGAL ISSUE IN FAVOUR OF THE ASSESSEE. THEREFORE THE IMPUGNED ORDERS MAY BE UPHELD BY DISMISSING THE APP EALS FILED BY THE REVENUE. 6. WE HAVE HEARD BOTH THE PARTIES PERUSED THE RELE VANT RECORDS AVAILABLE WITH US AND WE ARE OF THE CONSIDERED OPINION THAT THERE IS FORCE IN TH E ARGUMENT ADVANCED BY THE LD. D.R. BECAUSE THIS BENCH VIDE ORDER DATED 31.05.2007 (WRONGLY TYP ED BY LD. CIT(A) AS 25.05.2007) HAS RESTORED THE MATTER TO THE LD. CIT(A) FOR TAKING FR ESH DECISION ON LEGAL GROUNDS AS WELL AS ON MERITS ALSO BUT WE FIND THAT THE LD. FIRST APPELLAT E AUTHORITY HAD DECIDED ONLY LEGAL GROUNDS AND HAS NOT COMMENTED UPON THE MERIT OF THE CASES OF TH E ASSESSEE. FOR THE SAKE OF CONVENIENCE DIRECTION ISSUED BY THIS BENCH ON 31.05.2007 IN PAR AGRAPH NO.5 IN ITA NOS.367 & 368/AGR/2005 & C.O. NOS.87 & 88/AGR/2005 IS REPRODUCED AS UNDER :- THE ISSUE BEING SIMILAR AND FACTS & CIRCUMSTANCES BEING IDENTICAL FOR PARITY OF REASONS WE CONSIDER IT PROPER TO SET ASI DE THE DECISION OF LD. CIT(APPEALS) IN THIS CASE AS WELL AND RESTORE THE M ATTER BACK TO HIM FOR TAKING A DECISION AFRESH ON THE LEGAL GROUNDS ON VALIDITY OF ACTION TAKEN U/S. 148 OF THE ACT BY THE CROSS OBJECTOR AND ALSO TAKE DECISION ON MER ITS OF THE CASES AFRESH AFTER GIVING PROPER AND EFFECTIVE OPPORTUNITY OF BEING HE ARD TO THE PARTIES IN A MANNER THAT NO PREJUDICE IS CAUSE TO EITHER OF THEM. 4 7. IT IS ALSO RELEVANT TO REPRODUCE THE CONCLUDED P ARAGRAPH OF THE IMPUGNED ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY AS UNDER :- THUS THERE IS MERIT IN THE ARGUMENTS OF THE LD. AR OF THE APPELLANT THAT ON IDENTICAL FACTS THE CONSIDERED VIEW OF THE HON BLE ITAT AGRA WOULD PREVAIL. HENCE RESPECTFULLY FOLLOWING THE DECISION OF THE H ONBLE ITAT AGRA IN THE CASE OF M/S. AGRA CHEMICALS VS. ACIT-2 AGRA A.Y. 1997-9 8 IT IS HELD THAT THE RE- ASSESSMENT PROCEEDINGS WERE NOT VALIDLY INITIATED. CONSEQUENTLY THE APPEALS STAND ALLOWED ON THE LEGAL GROUNDS GIVEN HEREINABOV E. 8. AFTER GOING THROUGH THE ORDER DATED 31.05.2007 P ASSED BY THIS BENCH AS WELL AS THE CONCLUDING PARAGRAPH OF THE IMPUGNED ORDERS WE ARE OF THE CONSIDERED OPINION THAT THE LD. FIRST APPELLATE AUTHORITY HAS NOT PASSED THE IMPUGNED ORD ERS IN COMPLIANCE OF THE ORDER DATED 31.05.2007 AND THE SAME IS ALSO NON-SPEAKING ONE. IN THE INTEREST OF JUSTICE WE ARE NOT COMMENTING UPON THE MERIT OF THE CASE AND WE ARE SE TTING ASIDE THE ISSUE IN DISPUTE TO THE LD. FIRST APPELLATE AUTHORITY TO DECIDE THE SAME ACCORD ING TO THE DIRECTIONS GIVEN IN ORDER DATED 31.05.2007 AND PASS A SPEAKING ORDER AFTER GIVING P ROPER AND EFFECTIVE OPPORTUNITY OF BEING HEARD TO THE PARTIES. 9. IN THE RESULT APPEALS FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH FEBRUARY 2011). SD/- SD/- (P.K. BANSAL) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE: AGRA DATE: 11 TH FEBRUARY 2011 PBN/* 5 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL AGRA TRUE COPY