Jagat Singh, New Delhi v. ACIT, New Delhi

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : D : NEW DELHI BEFORE SHRI I.P. BANSAL JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER ITA NO.5323 & 5324/DEL/2010 ASSESSMENT YEAR : 2001-02 JAGAT SINGH C/O D.B. JAIN & CO. 1-ANSARI ROAD DARYA GANJ NEW DELHI. PAN : ALDPS0734K VS. ACIT CENTRAL CIRCLE-5 NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SALIL AGARWAL ADVOCATE REVENUE BY : SHRI A.K. MONGA DR ORDER PER I.P. BANSAL JUDICIAL MEMBER BOTH THESE APPEALS ARE FILED BY THE ASSESSEE. THEY ARE DIRECTED AGAINST THE TWO SEPARATE ORDERS PASSED BY THE CIT (A) DA TED 14 TH SEPTEMBER 2010 FOR ASSESSMENT YEAR 2001-02. GROUNDS OF APPEAL IN BOTH THE APPEALS READ AS UNDER:- ITA NO.5323/DEL2010 1. THAT THE LD. CIT(APPEALS) HAS ERRED BOTH ON FACTS AND IN LAW IN DISPOSING OF THE APPEAL EX-PARTEE. 2. THAT THE LD. CIT(APPEALS) HAS FACTUALLY ERRED WHEN HE HAS RECORDED THAT THE APPELLANT DID NOT RESPOND TO THE NOTICE OF HEARING DATED 5.10.09 13.10.09 15.12.09 05.06.09 13.10.10 22.1.10 28.4.10 AND 6.8.10. I N FACT EACH OF THE NOTICE WHICH HAD BEEN SERVED WAS DULY RESPONDED AND THE WRITTEN SUBMISSION HAD ALSO BEEN FIL ED. FURTHER ON 6.8.10 THE HEARING OF THE APPEAL WAS ADJOU RNED TO 2.1.2011. ITA NO.5323 & 5324/DEL/2011 2 3. THAT IN FACT THE ASSESSEE HAD RECEIVED THE NOTICE FOR FIXING THE HEARING FOR 8.8.08 WHICH HEARING WAS ADJOURNED TO 13.10.09 AND ON 13.10.09 THE SAME WAS ADJOURNED TO 22.1.2010. 4. THAT FURTHER THE NOTICES PURPORTED TO NOTICE DATED 10.11.09 WAS NEVER RECEIVED BY THE ASSESSEE INSTEAD ANOTHER NOTICE FIXING THE HEARING FOR 23.12.09 WAS RECEIVED WHEN THE HEARING WAS ADJOURNED TO 22.1.10 A ND ON THE DATE SAME WAS ADJOURNED SINE-DIE. 5. LIKEWISE NO NOTICE FIXING THE HEARING FOR 28.4.10 WAS SERVED ON THE ASSESSEE INSTEAD A NOTICE FIXING THE HEARING FOR 14.6.10 ON WHICH DATE THE SAME WAS ADJOURNED TO 6.8.10 AND WAS AGAIN ADJOURNED TO 2.1.20 11 ON 6.8.2010. 6. THAT EVEN OTHERWISE THE LD. CIT(A) HAS ERRED IN UPHOLDING THE INITIATION OF PROCEEDINGS U/S 147 OF THE ACT WHICH WAS BASED ON NO TANGIBLE MATERIAL. 7. THAT THE LD. CIT(A) HAS ERRED IN SUSTAINING DISALLOWANCE OF EXPENSES INCURRED OF RS. 3 57 971/- OUT OF MAINTENANCE CHARGES RECEIVED BY THE ASSESSEE. 8. THAT THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THERE NO INCOME HAD ESCAPED ASSESSMENT AND THE ALLEGATION THAT THE ASSESSEE HAD MADE DEPOSIT OF RS. 7 LAKH IN A BANK ACCOUNT WITHOUT DISCLOSING ANY VALID SO URCE THEREOF AND THAT INCOME DECLARED OF RS. 2 97 283/- FRO M AGRICULTURAL SOURCES IS INCOME FROM OTHER SOURCES IS BASED ON NO MATERIAL. 9. THAT THE ADDITION HAD BEEN MADE AND SUSTAINED ON TOTALLY IRRELEVANT CONSIDERATION AND IN ABSENCE OF ANY VALID MATERIAL. THAT THE ALLEGED PURPORTED MATERIAL ON WHICH RELIANCE HAD BEEN PLACED COULD NOT HAVE BEEN MADE THE BASIS. ITA NO.5324/DEL2010 1. THAT THE LD. CIT(APPEALS) HAS ERRED BOTH ON FACTS AND IN LAW IN DISPOSING OF THE APPEAL EX-PARTEE. 2. THAT THE LD. CIT(APPEALS) HAS FACTUALLY ERRED WH EN HE HAS RECORDED THAT THE APPELLANT DID NOT RESPOND TO THE NOTICE OF HEARING DATED 5.10.09 13.10.09 15.12.09 05.06.09 13.10.10 22.1.10 28.4.10 AND 6.8.10. I N FACT EACH OF THE NOTICE WHICH HAD BEEN SERVED WAS DULY RESPONDED AND THE WRITTEN SUBMISSION HAD ALSO BEEN FIL ED. ITA NO.5323 & 5324/DEL/2011 3 RESPONDED AND THE WRITTEN SUBMISSION HAD ALSO BEEN FIL ED. FURTHER ON 6.8.10 THE HEARING OF THE APPEAL WAS ADJOU RNED TO 2.1.2011. 3. THAT THE APPELLANT HAD RECEIVED THE NOTICE FIXING THE HEARING FOR 05.10.2009 WHICH WAS ADJOURNED TO 13.10.2009 ON THAT DATE THE SAME WAS ADJOURNED TO 22.01.2010. THE HEARING WAS AGAIN FIXED FOR 15.12. 2009 WHICH HAS HOWEVER ADJOURNED SINE-DIE. THE ALLEGED NOTICES DATED 05.06.2009 13.10.2010 22.01.2010 AND 28.04.2010 WERE NEVER SERVED ON THE ASSESSEE AND INSTEAD A NOTICE DATED 06.08.2010 WAS RECEIVED WHEN THE HEARING WAS ADJOURNED TO 02.01.2011. 4. THAT EVEN OTHERWISE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE INITI ATION OF PROCEEDINGS U/S 147 OF THE ACT WHICH WAS BASED ON NO TANGIBLE MATERIAL. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT THERE IS NO INC OME HAD ESCAPED ASSESSMENT AND THE ALLEGATION THAT THE ASSESSEE HAD MADE INVESTMENT OF RS.9 30 000/- AND HAD RECEIVED ALSO INTEREST OF RS.2 23 200/- IS BASED ON N O MATERIAL. 6. THAT THE ADDITION HAD BEEN MADE AND SUSTAINED ON TOTALLY IRRELEVANT CONSIDERATION AND IN ABSENCE OF ANY VALID MATERIAL THAT THE ALLEGED PURPORTED MATERIAL ON WHICH RELIANCE HAD BEEN PLACED COULD NOT HAVE BEEN MADE THE BASIS AND THAT TOO WITHOUT CONFIRMING THE AUTHOR OF THE ALLEGED DOCUMENTS AND ALSO PRODUCING HIM FOR ASSESSE ES CROSS-EXAMINATION MORE PARTICULARLY WHEN HE HAD SO DENIED THE OWNERSHIP OF ANY SUCH DOCUMENT.. 2. ORIGINALLY THE RETURN WAS FILED BY THE ASSESSEE ON 14 TH MAY 2003. THE RETURN BEING BELATED ONE NOTICE U/S 148 WAS ISSUED . ACCORDINGLY ASSESSMENTS GOT FRAMED VIDE ASSESSMENT ORDER DATED 18 TH DECEMBER 2007 AT AN INCOME OF ` 15 97 280/- AND THE SAID ASSESSME NT IS SUBJECT TO APPEAL IN ITA NO.5323/DEL/2010. SUBSEQUENT TO TH E FRAMING OF THE SAID ASSESSMENT AGAIN NOTICE U/S 148 OF THE INCOME-TAX ACT 1961 (THE ACT) WAS ISSUED ON 25 TH MARCH 2008 IN RESPECT OF WHICH THE IMPUGNED ASSESSMENT WAS FRAMED VIDE ORDER DATED 23 RD DECEMBER ITA NO.5323 & 5324/DEL/2011 4 2008 AT AN INCOME OF ` 27 50 480/-. THIS ASSESSMENT ORD ER IS SUBJECT MATTER OF APPEAL IN ITA NO.5324/DEL/2010. THE ASSESSEE HAD FILED APPEAL AGAINST BOTH THE ASSESSMENT ORDERS BEFORE THE CIT (A) WHICH HAVE BEEN DISPOSED OF BY THE CIT (A) BY WAY OF TWO SEP ARATE ORDERS DATED 14 TH SEPTEMBER 2010 AGAINST WHICH THE ASSESSEE IS AGGRIEVED. GROUND NO.2 IN BOTH THE APPEALS ARE COMMON. IT IS TH E CASE OF THE ASSESSEE THAT THE ASSESSEE HAS BEEN RESPONDING TO THE VARIOUS NOTICES ISSUED BY THE CIT (A) AND WRITTEN SUBMISSIONS WERE ALSO FI LED. IT IS THE CASE OF THE ASSESSEE THAT NOTICES STATED TO BE ISSUED BY THE CIT (A) DATED 5 TH JUNE 2009 13 TH OCTOBER 2010 22 ND JANUARY 2010 AND 28 TH APRIL 2010 WERE NEVER SERVED UPON THE ASSESSEE IN RESPEC T OF ITA NO.5324/DEL/2010 AND INSTEAD A NOTICE DATED 6 TH AUGUST 2010 WAS RECEIVED WHEN THE HEARING WAS ADJOURNED TO 2 ND JANUARY 2011. SIMILAR IS THE CASE OF THE ASSESSEE IN ANOTHER APPEAL AND THESE CI RCUMSTANCES HAVE BEEN DESCRIBED IN DETAIL IN THE AFFIDAVIT FILED BY THE LD. AR OF THE ASSESSEE SHRI DHARAM BHUSHAN JAIN CA THE CONTENTS OF WH ICH ARE AS UNDER:- AFFIDAVIT AFFIDAVIT AFFIDAVIT AFFIDAVIT I DHARAM BHUSHAN JAIN S/O LATE SHRI PREM CHANDRA JA IN AGED I DHARAM BHUSHAN JAIN S/O LATE SHRI PREM CHANDRA JA IN AGED I DHARAM BHUSHAN JAIN S/O LATE SHRI PREM CHANDRA JA IN AGED I DHARAM BHUSHAN JAIN S/O LATE SHRI PREM CHANDRA JA IN AGED ABOUT 60 YEARS R/O X4239/A 1 ABOUT 60 YEARS R/O X4239/A 1 ABOUT 60 YEARS R/O X4239/A 1 ABOUT 60 YEARS R/O X4239/A 1- -- -ANSARI ROAD DARYA GANJ NEW ANSARI ROAD DARYA GANJ NEW ANSARI ROAD DARYA GANJ NEW ANSARI ROAD DARYA GANJ NEW DELHI DELHI DELHI DELHI 110002. 110002. 110002. 110002. DO SOLEMNLY AFFIRM AND STATE AS UNDER: - 1. THAT I AM A CHARTERED ACCOUNTANT AND IS PRACTICING O N THE TAXATION SIDE SINCE THE YEAR 1977. 2. THAT I HAD BEEN ENGAGED BY SHRI JAGAT SINGH S/O S HRI K.NATWAR SINGH TO PREPARE FILE AND APPEAR BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) I NEW DELHI IN THE TWO INCOME TAX APPEALS BEARING NUMBERS: 222/07-08 & 27/08-09 AND I BEING THUS FULLY CONVERSANT WITH THE FAC TS RELATING TO THE APPEALS INCLUDING THOSE OF FIXATION AND HEARING OF THE SAID APPEALS BY THE COMMISSIONER OF IN COME TAX (APPEALS) I NEW DELHI IS COMPETENT TO SWEAR AN D DEPOSE IN THESE APPEALS 3. THAT THE AFORESAID TWO APPEALS HAD BEEN FIXED FOR HEARING BEFORE THE CIT(A) 1 NEW DELHI ON THE DATES AS ARE DETAILED HEREUNDER AND WERE ATTENDED BY ME IN PERSON O R ITA NO.5323 & 5324/DEL/2011 5 THROUGH MY ARTICLE CLERK AND WERE DULY COMPLIED AS STA TED HERE BELOW: APPEAL NO.: 222/07-08 S.NO. S.NO. S.NO. S.NO. DATE OF DATE OF DATE OF DATE OF NOTICE NOTICE NOTICE NOTICE DATE FIXED DATE FIXED DATE FIXED DATE FIXED FOR HEARING FOR HEARING FOR HEARING FOR HEARING HOW COMPLIED WITH HOW COMPLIED WITH HOW COMPLIED WITH HOW COMPLIED WITH 1. 25.07.08 08.08.2008 AUTHORIZED REPRESENTATIVE APPEARED BEFORE CIT(A) WHEN HEARING WAS VERBALLY ADJOURNED AT THE REQUEST MADE PERSONALLY BY ME. NO DATE WAS FIXED. 2. 22.09.09 13.10.09 ADJOURNED TO 22.1.09 AT THE REQUEST MADE PERSONALLY BY ME AS I COULD NOT PREPARE THE APPEAL. 3. N.A. 22.1.09 APPEARED ON THE ADJOURNED DATE AS ABOVE WHEN ON VERBAL REQUEST HEARING WAS ADJOURNED SINE-DIE. 4. 3.12.09 23.12.09 ADJOURNED TO 22.1.10 AT THE REQ UEST MADE BY ME VIDE APPLICATION DATED 23.12.09. 5. N.A. 22.1.09 APPEARED ON THE ADJOURNED AND WAS ADJOURNED SINE-DIE AT THE PERSONAL REQUEST MADE BY ME. 6. 7.6.2010 14.6.2010 ADJOURNED TO 16.7.10 AT THE REQUEST MADE THROUGH LETTER. 7. N.A. 16.7.2010 APPEARED ON THE ADJOURNED DATE WH EN IT WAS ADJOURNED TO 6.8.2010 AT THE REQUEST MADE BY ME. 8. N.A. 6.8.2010 APPEARED PERSONALLY ON THE ADJOUR NED DATE AND WAS HOWEVER ADJOURNED TO 2.1.2011 BY THE CIT(A) AS WAS ORALLY STATED BY HIM SINCE HE WAS BUSY WITH HEAVY APPEALS. 4. I FURTHER SAY THAT NO NOTICE FIXING THE HEARING FOR 10.11.09 AND 28.4.2010 (AS IS STATED IN THE ORDER OF CIT(A)-1) WERE SERVED EITHER ON ANY REPRESENTATIVE OF SHRI JAGAT SINGH OR ONE ME. 5. I FURTHER SAY THAT ON 6.8.2010 (THE ADJOURNED DATE O F HEARING FROM 16.7.2010 FIXING THE HEARING FOR 6.8.2010) WAS COMPLIED PERSONALLY BY ME WHEN I TOOK FOR THE PURPOSES OF HEA RING BEFORE THE CIT(A)-1 NEW DELHI MY WRITTEN SUBMISSIONS ALONG W ITH THE DOCUMENTS IN THE FORM OF A PAPER BOOK (CONTAINING 120 SHEETS) WHICH WAS ALSO FILED BEFORE HIM. HOWEVER INSTEAD O F HEARING THE APPEAL THE LD. CIT(A) ADJOURNED THE HEARING TO 2.1 .2011 SINCE IN HIS OPINION THE AMOUNT OF TAX INVOLVED WAS NO T AS LARGE AS WAS INVOLVED IN OTHER APPEALS PENDING BEFORE HIM AND WHICH REQUIRED TO BE DISPOSED OFF BEFORE 31.12.2010. 6. I FURTHER SAY THAT THERE HAS BEEN NO NON-COMPLIANCE OF ANY NOTICE FIXING THE HEARING (WHEN THE NOTICE AS AFORESAI D WERE SERVED ON THE ASSESSEE OR ON THE ADJOURNED DATE OF HEA RING). ITA NO.5323 & 5324/DEL/2011 6 7. IN RESPECT OF APPEAL NO. 27/08-09 THAT LIKEWISE I STATE THAT THE APPEAL NO. 27/2008-09 WAS FIXED AS ARE DETAILED HEREUNDER AND WERE ATTENDED BY ME IN P ERSON OR THROUGH MY ARTICLED CLERK AND WERE DULY COMPLIED AS S TATED HERE BELOW. S.NO. S.NO. S.NO. S.NO. DATE DATE DATE DATE OF OF OF OF NOTICE NOTICE NOTICE NOTICE DATE FIXED DATE FIXED DATE FIXED DATE FIXED FOR HEARING FOR HEARING FOR HEARING FOR HEARING HOW COMPLIED WITH HOW COMPLIED WITH HOW COMPLIED WITH HOW COMPLIED WITH 1. 8.9.2009 5.10.2009 APPEARED ON THE DATE FIXED AND ADJOURNED TO 13.10.09 ON A REQUEST MADE BY ME. 2. N.A. 13.10.09 APPEARED ON THE DATE FIXED AS ABOV E AND ADJOURNED TO 22.1.09 ON A REQUEST MADE BY ME PERSONALLY. 3. N.A. 22.1.09 APPEARED ON THE DATE FIXED AS ABOVE AND ADJOURNED SINE-DIE VERBALLY AT THE REQUEST MADE BY ME. 4. 3.12.09 15.12.09 APPEARED ON THE DATE FIXED AND ADJOURNED TO 23.12.09 AT THE REQUEST MADE BY ME. 5. N.A. 23.12.09 APPEARED ON THE DATE FIXED AS ABOV E AND ADJOURNED TO 22.1.2010 AT THE REQUEST MADE BY ME. 6. N.A. 22.1.2010 APPEARED ON THE DATE FIXED AS ABO VE AND ADJOURNED SINE DIE AT THE REQUEST MADE BY ME. 7. 23.7.2010 6.8.2010 APPEARED PERSONALLY ON THE DA TE FIXED AND WAS ADJOURNED TO 2.1.2011 BY THE CIT(A) AS WAS ORALLY STATED BY HIM SINCE HE WAS BUSY WITH HEAVY APPEALS. 8. THAT I FURTHER SAY THAT NO NOTICE FIXING THE HEARING ON 5.6.09 AS STATED IN THE ORDER OF CIT(A)-1 NEW DELHI WAS SERVED EITHER ON ANY REPRESENTATIVE OF SHRI JAGAT SINGH OR ON ME. 9. THAT I FURTHER SAY THAT ON 6.8.2010 THE DATE FIXED FO R HEARING (ON THE BASIS OF A NOTICE FIXING HEARING OF APPEAL I N APPEAL NO. 227/07-08) APPEARED BEFORE THE LD. CIT(A) 1 WHEN I TOOK FOR THE PURPOSES OF HEARING BEFORE THE CIT(A)-1 NEW DELH I MY WRITTEN SUBMISSIONS ALONG WITH THE DOCUMENTS IN THE FORM OF A PAPER BOOK (CONTAINING 151 SHEETS) WHICH WAS ALSO FIL ED BEFORE HIM. HOWEVER INSTEAD OF HEARING THE APPEAL HE ADJOU RNED THE HEARING TO 2.1.2011 SINCE IN HIS OPINION THE AMOUN T OF TAX INVOLVED WAS NOT LARGE AND OTHER APPEALS PENDING BEFO RE HIM INVOLVED HUGE DISPUTED TAX DEMANDS. DEPONENT DEPONENT DEPONENT DEPONENT ITA NO.5323 & 5324/DEL/2011 7 VERIFICATION VERIFICATION VERIFICATION VERIFICATION I DHARAM BHUSHAN JAIN SOLEMNLY AFFIRM AND STATE THAT THE CONTENTS OF THE AFORESAID PARAS 1 TO 8 OF THIS AFFIDAVIT ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF AND NOTHI NG HAS BEEN CONCEALED THERE FROM. VERIFIED TODAY ON 1 ST DAY OF FEBRUARY 2011 AT NEW DELHI. DEPONENT DEPONENT DEPONENT DEPONENT 3. REFERRING TO THE CONTENTS OF THE ABOVE AFFIDAVIT IT WAS SUBMITTED BY LEARNED AR THAT IN THE INTEREST OF JUSTICE THE MAT TER MAY BE RESTORED BACK TO THE FILE OF THE CIT (A) WITH A DIRECTION TO RE-ADJUDICATE THE APPEALS FILED BY THE ASSESSEE AFTER GIVING THE ASSESSEE A RE ASONABLE OPPORTUNITY OF HEARING. 4. HOWEVER LD. DR RELIED UPON THE ORDER OF THE CIT (A) AND PLEADED THAT VARIOUS OPPORTUNITIES WERE GIVEN BY THE LEARNED CIT (A) TO THE ASSESSEE AND IN THIS MANNER LEARNED CIT (A) HAS RIGHTLY PASSED THE ORDER AND HIS ORDER SHOULD BE UPHELD. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. KEEPING IN VIEW THE OF THE AFFIDAVIT WE ARE OF THE OPINION THAT THIS MATTER SHOULD BE RESTORED BACK TO THE FILE OF CIT (A) WITH A DIRECTION TO RE-ADJUDICATE THE ISSUES R AISED BY THE ASSESSEE IN HIS APPEALS AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF REPRESENTING HIS CASE. WE DIRECT ACCOR DINGLY. AS WE ARE RESTORING THESE APPEALS TO THE FILE OF CIT (A) FOR RE- ADJUDICATION IN THE MANNER AFORESAID WE DO NOT EXPRESS ANY OPINION ON THE MERITS OF THE CASE AS THE SAME WILL BE RE-ADJUDICATED BY THE CIT (A) . ITA NO.5323 & 5324/DEL/2011 8 6. IN THE RESULT THE APPEALS FILED BY THE ASSESSEE ARE A LLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. THE ORDER PRONOUNCED IN THE OPEN COURT ON 11.02.20 11. SD/- SD/- [K.G. BANSAL] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 11.02.2011. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES DATE OF DICTATION 01.02.2011 DATE OF PRESENTATION OF THE DRAFT ORDER TO THE MEMBER 03.02.2011 DATE OF RETURN FROM THE BENCH AFTER PRONOUNCEMENT &SIGNING DATE OF DISPATCH OF THE ORDER TO THE BENCH