Dr. Dinesh Pratap Singh, Jhansi v. CIT-II, Agra

ITA 84/AGR/2009 | 2005-2006
Pronouncement Date: 27-08-2010 | Result: Allowed

Appeal Details

RSA Number 8420314 RSA 2009
Assessee PAN AAOPP4920A
Bench Agra
Appeal Number ITA 84/AGR/2009
Duration Of Justice 1 year(s) 5 month(s) 24 day(s)
Appellant Dr. Dinesh Pratap Singh, Jhansi
Respondent CIT-II, Agra
Appeal Type Income Tax Appeal
Pronouncement Date 27-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 27-08-2010
Date Of Final Hearing 20-07-2010
Next Hearing Date 20-07-2010
Assessment Year 2005-2006
Appeal Filed On 05-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH AGRA BEFORE SHRI R.K. GUPTA JUDICIAL MEMBER AND SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NO.84/AGR/2009 ASST. YEAR: 2005-06 DR. DIENSH PRATAP SINGH VS. THE COMMISSIONER OF INCOME-TAX-II IV/21 MEDICAL COLLEGE CAMPUS AGRA. KANPUR ROAD JHANSI. (PAN : AAOPP 4920 A). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NAVIN GARGH ADVOCATE. RESPONDENT BY : SMT. SEEMA RAJ C.I.T. (D.R.) ORDER PER P.K. BANSAL A.M.: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT DATED 19.01.2009 PASSED UNDER SECTION 263 OF THE INCOME-TAX ACT 196 1 (THE ACT HEREINAFTER). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE CIT ISS UED NOTICE UNDER SECTION 263 DATED 24.12.2008 POINTING OUT THAT THE ASSESSMENT ORDER P ASSED BY THE DCIT CIRCLE-6 JHANSI FOR THE A.Y. 2005-06 UNDER SECTION 143(3) DATED 26.06.2006 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON VARIOUS POINTS. ONE OF THE POINT TAK EN RELATES TO THAT OF THE INCOME ASSESSED INCLUDES AMOUNT OF RS.28 00 000/- SURRENDERED BY TH E ASSESSEE AFTER SURVEY CONDUCTED IN THE BUSINESS PREMISES OF THE M/S KAMLA HOSPITAL. DURIN G THE SURVEY PROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE WAS A VISITING SURGEON OF M/S KAMLA HO SPITAL AND WAS CHARGING FEE FROM THE 2 PATIENTS. SUCH RECEIPTS WERE NOT TAKEN INTO CONSID ERATION BY M/S KAMLA HOSPITAL. ONE MONTH RECEIPTS FOR SUCH CONSULTATION WAS ESTIMATED AT RS. 5 90 810/- AND THUS THE TOTAL RECEIPTS WERE ESTIMATED FOR 12 MONTHS AT RS.70 89 720/-. BUT DR. DINESH PRATAP SINGH HAS SURRENDERED ONLY RS.28 00 000/-. THE A.O. HAS NOT ENQUIRED OF THIS ASPECT DURING THE ASSESSMENT PROCEEDINGS. IT WAS ALSO NOTICED THAT THE A.O. HAS NOT ENQUIRED INT O THE WITHDRAWAL REGARDING THE HOUSEHOLD EXPENSES. A PERUSAL OF THE BANK ACCOUNT SHOWS THAT THE ASSESSEE HAS WITHDRAWN RS.30 000/- IN CASH ON 21.05.2004 AND THERE WAS NO WITHDRAWAL THER EAFTER EVEN THOUGH THE ASSESSEE HAD DEPOSITED SALARY IN THIS ACCOUNT. IN RESPONSES TO THE NOTICE THE ASSESSEE SUBMITTED WRITTEN SUBMISSIONS DATED 16.01.2009. THE CIT THUS ULTIMAT ELY SET ASIDE THE ASSESSMENT HOLDING THAT THE ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL T O THE INTEREST OF THE REVENUE AND DIRECTED THE A.O. TO RECOMPUTE THE INCOME OF THE ASSESSEE IN THE FOL LOWING MANNER:- 25% OF THE GROSS RECEIPTS OF RS.70 89 720/- (AS PE R SURVEY REPORT) I.E. RS.17 72 430/- BE ALLOWED AS EXPENSES AND THEREAFTE R 2/3 RD OF THE REST BE DEEMED AS INCOME OF THE ASSESSEE TREATING 1/3 RD RECEIPT OF OTHER DOCTORS. THUS AFTER ALLOWING 25% DEDUCTION FOR EXPENSES THE GROSS RECE IPTS REMAINS AT RS.53 17 290/-. 2/3 RD OF RS.53 17 290/- WORKS OUT TO RS.35 62 584/- AS A GAINST WHICH INCOME IS ASSESSED AT RS.28 00 000/- AS SURRE NDERED BY THE ASSESSEE IN THE RETURN FILED FOR THE AY 2005-06. THE TOTAL INCOME OF THE ASSESSEE IS THEREBY INCREASED BY RS.7 62 584/-. THUS THE ORDER PASSED BY THE AO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE AND THE AO IS DIRECTED TO MODIFY ORDER ACCORDINGLY. 3. THE LD. A.R. BEFORE US CONTENDED THAT THE CIT CA NNOT ENTER INTO THE SHOES OF THE A.O. HE CANNOT DIRECT THE A.O. IN WHAT MANNER THE A.O. SHOU LD FRAME THE ASSESSMENT. THE A.O. WHILE FRAMING THE ASSESSMENT UNDER SECTION 143(3) HAS DUL Y ENQUIRED OF ABOUT THE INCOME EARNED BY THE ASSESSEE. THE ASSESSEE HAS SURRENDERED A SUM O F RS.28 00 000/- DURING THE COURSE OF PROCEEDINGS AFTER THE SURVEY CONDUCTED AT THE BUSIN ESS PREMISES OF THE M/S KAMLA HOSPITAL AND 3 THE FACTS AS STATED BY THE CIT HAS DULY BEEN CONSID ERED BY THE A.O. THE A.O. HAS GIVEN A FINDING OF FACT THAT THE ASSESSEE HAS NO CONCERN WITH THE K AMLA HOSPITAL AS NO PAPER/DOCUMENTS HAVE BEEN FOUND OR IMPOUNDED AT THE BUSINESS PREMISES OF KAMLA NURSING HOME. EXAMINATIONS HAVE BEEN MADE REGARDING ASSESSEES VERSION AND IT IS FO UND THAT NO PAPER/DOCUMENTS BELONGED TO THE ASSESSEE. IF THE A.O. HAS TAKEN ONE OF THE VIEW AN D THAT VIEW IS NOT SUBSTANTIATED IN LAW IT CANNOT BE STATED THERE IS NO ERROR IN THE ORDER PAS SED UNDER SECTION 143(3). RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS:- 1) CIT VS. SAT PAL AGGARWAL 293 ITR 90 (P&H) 2) CIT VS. GABRIEL INDIA LIMITED 203 ITR 108 (BOM. ) 3) CIT VS. MAHENDRA KUMAR BANSAL 297 ITR 99 (ALLD. ) 4) CIT VS. RATLAM COAL ASH CO. 171 ITR 141 (M.P.) 5) CIT VS. ARVIND JEWELLERS 259 ITR 502 (GUJ.) 6) MALABAR INDUSTRIAL CO. LTD VS. CIT 243 ITR 83 ( SC) 4. LD. D.R. ON THE OTHER HAND RELIED ON THE ORDER OF THE AUTHORITIES BELOW. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE MATERIAL ON RECORD. WE NOTED THAT THE CIT(A) IN THIS CASE INVOKED JURIS DICTION UNDER SECTION 263 ON THE BASIS THAT THE ASSESSEE WAS THE VISITING SURGEON IN M/S KAMLA HOSP ITAL. THERE HAD BEEN SURVEY IN M/S KAMLA HOSPITAL. IN THE SURVEY REPORT THE RECEIPT FROM S UCH CONSULTATION WAS WORKED OUT AT RS.5 90 810/- FOR ONE MONTH AND FOR THE WHOLE YEAR IT SHOULD HAVE BEEN RS.70 89 720/-. WHILE THE ASSESSEE HAS SURRENDERED ONLY RS.28 00 000/-. THE CIT(A) EVEN IN THE ORDER PASSED UNDER SECTION 263 COMPUTED THE INCOME AT RS.35 62 584/- A ND ON THAT BASIS TREATED THE ORDER PASSED BY THE A.O. TO BE ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF THE REVENUE. SECTION 263 NO DOUBT EMPOWER THE CIT TO CALL FOR AND EXAMINE THE REPORT OF ANY PROCEEDINGS UNDER THE INCOME-TAX ACT 4 AND IN CASE HE CONSIDERS ANY ORDER PASSED BY THE A. O. AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE THE CIT AFTER GIVING AN OPPORTUNIT Y OFT HEARING TO THE ASSESSEE MAY ENHANCE OR MODIFY THE ASSESSMENT OR CANCEL THE ASSESSMENT AND MAY DIRECT THE A.O. TO MAKE A FRESH ASSESSMENT. BOTH THE CONDITIONS THAT THE ASSESSMEN T IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE MUST BE SATISFIED. IF THE A.O. HAS TAKEN ONE OF THE VIEWS IT CANNOT BE SAID THAT THE ORDER PASSED BY THE A.O. IS ERRONEOUS. WE NOTE D FROM THE ASSESSMENT ORDER THAT THE A.O. HAS DULY EXAMINED ABOUT THE CONCERN OF THE ASSESSEE WITH M/S KAMLA HOSPIAL AND HAS GIVEN A FINDING THAT THE ASSESSEES MAIN SOURCE OF INCOME I S SALARY RECEIVED FROM MEDICAL COLLEGE JHANSI. HE HAS NO CONCERN WITH M/S. KAMLA HOSPITAL AS NO PAPER/DOCUMENTS HAVE BEEN FOUND OR IMPOUNDED AT THE BUSINESS PREMISES OF THE KAMLA NUR SING HOME. HE HAS ALSO FURTHER MENTIONED THAT EXAMINATIONS HAD BEEN MADE REGARDING ASSESSEE S VISION AND IT WAS FOUND THAT NO PAPER/DOCUMENTS BELONGED TO THE ASSESSEE. THIS CLE ARLY PROVES THAT THE A.O. WHILE FRAMING THE ASSESSMENT UNDER SECTION 143(3) IN THE CASE OF THE ASSESSEE WAS FULLY AWARE OF THE SURVEY CONDUCTED IN THE CASE OF M/S. KAMLA HOSPITAL AND HA S DULY EXAMINED THE RECORD AND FOUND THAT NO PAPER/DOCUMENTS BELONGING TO THE ASSESSEE WERE FOUND DURING THE COURSE OF SURVEY CARRIED OUT AT M/S. KAMLA HOSPITAL. THE ASSESSEE HAS SURRE NDERED A SUM OF RS.28 00 000/-. THE A.O. HAS DULY ACCEPTED IT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. NO OTHER ADDITION WAS MADE. THE ENQUIRY WAS DULY CONDUCTED. IT IS NOT A CASE W HERE THE A.O. HAS NOT CONDUCTED THE ENQUIRY ABOUT THE INVOLVEMENT OF THE ASSESSEE IN M/S. KAMLA HOSPITAL. IF THE A.O. HAS TAKEN ONE OF THE VIEWS IT CANNOT BE SAID THAT THERE IS AN ERROR IN THE ORDER OF THE A.O. UNTIL AND UNLESS THE VIEW TAKEN BY THE A.O. IS UNSUSTAINABLE IN LAW. THE ASS ESSEE HAS AGREED FOR THE ADDITION WHICH WAS DULY ACCEPTED BY THE A.O. AFTER APPRECIATING ALL TH E PAPERS AND DOCUMENTS. EXERCISING 5 JURISDICTION BY THE CIT IN OUR OPINION UNDER THES E FACTS IS NOTHING BUT SIMPLY ENTERING INTO THE SHOES OF THE A.O. 6. WE HAVE GONE THROUGH THE DECISIONS AS RELIED BY THE LD. A.R. IN THE CASE OF CIT VS. SAT PAL AGGARWAL 293 ITR 90 (P&H). IN THAT CASE AT P AGE 91 IT WAS HELD AS UNDER :- THAT IT WAS ON ACCOUNT OF THOSE VERY DISCREPANCIES HAVING BEEN POINTED OUT THAT THE ASSESSEE HAD AGREED FOR ADDITION DURIN G THE COURSE OF REASSESSMENT PROCEEDING AND THE INVOCATION OF JURISDICTION BY TH E COMMISSIONER ON THOSE VERY FACTS WAS NOTHING BUT A CHANGE OF OPINION WHICH WA S NOT PERMISSIBLE. THE ORDER UNDER SECTION 263 WAS NOT VALID. 7. IN THE CASE OF CIT VS. MAHENDRA KUMAR BANSAL 29 7 ITR 99 (ALLD.) AT PAGE NO.106 IT WAS HELD AS UNDER :- THAT MERELY BECAUSE THE INCOME-TAX OFFICER HAD NOT WRITTEN LENGTHY ORDER IT WOULD NOT ESTABLISH THAT THE ASSESSMENT OR DER PASSED UNDER SECTION 143(3)/148 OF THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE WITHOUT BRINGING ON RECORD SPECIFIC INSTANCES. 8. IN THE CASE OF CIT VS. RATLAM COAL ASH CO. 171 ITR 141 (M.P.) IT WAS HELD AS UNDER :- HAVING HEARD LD. COUNSEL FOR THE PARTIES WE HAVE COME TO THE CONCLUSION THAT THIS REFERENCE MUST BE ANSWERED IN THE AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE. IT IS WELL SETTLED THAT WHERE THE INCOME TAX OFFICER MADE THE ASSESSMENT IN UNDUE HURRY ACCEPTING WHAT THE ASSES SEE STATED IN HE RETURN WITHOUT MAKING ANY ENQUIRIES IN THE CIRCUMSTANCES OF THE CASE THE COMMISSIONER WOULD BE JUSTIFIED IN HOLDING THE ORDER OF THE INCO ME TAX OFFICER TO BE ERRONEOUS. IN THE INSTANT CASE HOWEVER THE TRIBUNAL HAS FOUN D THAT THE ASSESSEE HAD FURNISHED ALL THE REQUISITE INFORMATION AND THAT TH E INCOME TAX OFFICER CONSIDERING ALL THE FACTS HAD COMPLETED THE ASSESS MENT. THE TRIBUNAL FURTHER HELD THAT IN THE CIRCUMSTANCES OF THE CASE IT COUL D BE HELD THAT THE INCOME TAX OFFICER HAD MADE THE ASSESSMENT WITHOUT MAKING PROP ER ENQUIRIES. IN VIEW OF 6 THESE FINDINGS THE TRIBUNAL IN OUR OPINION WAS J USTIFIED IN LAW IN REVERSING THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX. 9. IN THE CASE OF CIT VS. ARVIND JEWELLERS 259 ITR 502 (GUJ) IT WAS HELD AS UNDER :- THAT THE FINDING OF FACT BY THE TRIBUNAL WAS THAT THE ASSESSEE HAD PRODUCED RELEVANT MATERIAL AND OFFERED EXPLANATIONS IN PURSUANCE OF THE NOTICES ISSUED U/S 142(1) AS WELL AS U/S. 143(2) OF THE AC T AND AFTER CONSIDERING THE MATERIAL AND EXPLANATIONS THE INCOME TAX OFFICER H AD COME TO A DEFINITE CONCLUSION. SINCE THE MATERIAL WAS THERE ON RECORD AND THE SAID MATERIAL WAS CONSIDERED BY THE INCOME TAX OFFICER AND A PARTICUL AR VIEW WAS TAKEN THE MERE FACT THAT DIFFERENT VIEW CAN BE TAKEN SHOULD NOT BE THE BASIS FOR AN ACTION U/S 263. THE ORDER OF REVISION WAS NOT JUSTIFIED. THE HONBLE SUPREME COURT DISMISSED THE SPECIAL LEA VE PETITION FILED BY THE DEPARTMENT (AS NOTED IN 266 ITR 101 (ST.)) HAS AGAINST THE SAI D JUDGEMENT AND HELD THAT SINCE MATERIAL WAS ON RECORD AND WAS DULY CONSIDERED BY THE A.O. AND A PARTICULAR VIEW WAS TAKEN BY HIM THE MERE FACT THAT DIFFERENT VIEW CAN BE TAKEN ACTION UNDER SECTION 263 CANNOT BE TAKEN. 10. IN THE CASE OF MALABAR INDUSTRIAL CO. LTD VS. C IT 243 ITR 83 (SC) IT WAS HELD AS UNDER :- THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE RE VENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY TH E ASSESSING OFFICER. EVERY LOSS OF REVENUE AS CONSEQUENCES OF AN ORDER OF THE A.O. CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. FOR EX AMPLE WHEN AN INCOME TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIO NER DOES NOT AGREE IT CANNOT BE TREATED AS AN ERRONEOUS ORDER AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME TAX OFFICER IS UNSUSTAINABLE IN LAW. 11. THUS IN VIEW OF THE AFORESAID DECISIONS WE AR E OF THE VIEW THAT THE CIT WAS NOT CORRECT IN REVISING THE ASSESSMENT MERELY ON THE BASIS THAT THE INCOME ON THE BASIS OF THE SURVEY REPORT 7 EARNED BY THE ASSESSEE COULD HAVE BEEN RS.35 62 584 /- AS AGAINST THE INCOME ASSESSED AT RS.28 00 000/- AS SURRENDERED BY THE ASSESSEE IN TH E RETURN. THIS IS A FACT THAT THE INCOME AS ESTIMATED BY THE CIT IN THE ORDER PASSED UNDER SECT ION 263 IS BASED ONLY ON THE BASIS OF SURVEY REPORT AND NOT ON THE BASIS OF THE ESTIMATE. THIS FIGURE HAS BEEN WORKED OUT BY THE CIT AFTER ESTIMATING THE EXPENSES AND THE RECEIPTS OF THE OTH ER DOCTORS. ESTIMATE IS ALWAYS AN ESTIMATE AND CANNOT BE ACTUAL. IF THE A.O. HAS ACCEPTED ONE OF THE ESTIMATES IN OUR OPINION IT CANNOT BE SAID THERE IS AN ERROR IN THE ORDER PASSED BY THE A.O. WE ACCORDINGLY QUASH THE ORDER PASSED UNDER SECTION 263 OF THE ACT. 12. IN THE RESULT APPEAL FIELD BY THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 27.08.2010). SD/- SD/- (R.K. GUPTA) (P.K. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: AGRA DATE: 27 TH AUGUST 2010. PBN/* 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