Shri Sapinder Singh, Rajpura v. ITO- Ward, Rajpura

ITA 86/CHANDI/2020 | 2011-2012
Pronouncement Date: 31-08-2021 | Result: Allowed

Appeal Details

RSA Number 8621514 RSA 2020
Assessee PAN BIHPS2082J
Bench Chandigarh
Appeal Number ITA 86/CHANDI/2020
Duration Of Justice 1 year(s) 7 month(s) 7 day(s)
Appellant Shri Sapinder Singh, Rajpura
Respondent ITO- Ward, Rajpura
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted I1
Tribunal Order Date 31-08-2021
Date Of Final Hearing 25-08-2021
Next Hearing Date 25-08-2021
Last Hearing Date 09-03-2021
First Hearing Date 26-07-2021
Assessment Year 2011-2012
Appeal Filed On 24-01-2020
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B CHANDIGARH BEFORE SHRI N.K. SAINI VICE PRESIDENT & SHRI R.L NEGI JUDICIAL MEMBER ./ ITA NO. 86/CHD/2020 / ASSESSMENT YEAR : 2011-12 SH SAPINDER SINGH VILLAGAE UKSI DISTRICT PATIALA THE ITO WARD RAJPURA DISTRICT PATIALA ./PAN NO: BIHPS2082J / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING /ASSESSEE BY : SHRI SUDHIR SEHGAL ADVOCATE / REVENUE BY : SH. ASHOK KHANNA ADVOCATE % /DATE OF HEARING : 25.08.2021 % / DATE OF PRONOUNCEMENT : 31.08.2021 / ORDER PER R.L. NEGI JUDICIAL MEMBER: THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL AGAIN ST THE ORDER DATED 26.11.2019 PASSED BY COMMISSIONER OF INCOME T AX (APPEALS) PATIALA WHEREBY THE LD. CIT(A) HAS DISMISSED THE A PPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 14 4 R.W.S 147 OF THE INCOME TAX ACT 1961 [FOR SHORT THE ACT] FOR THE ASSESSMENT YEAR 2011-12. 2. IN THIS CASE THE AO INITIATED PROCEEDINGS U/S 14 7 AFTER ISSUING NOTICE U/S 148 OF THE ACT. IN RESPONSE TO THE NOTIC E U/S 148 OF THE ITA NO. 86-CHD-2020- SH SAPI NER SINGH RAJPURA 2 ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSM ENT YEAR UNDER CONSIDERATION DECLARING INCOME OF RS. 1 57 860/- AN D AGRICULTURAL INCOME OF RS. 2 66 800/- ACCORDINGLY AO ISSUED NOT ICES U/S 142(1) AND 143(2) OF THE ACT ALONG WITH QUESTIONNAIRE. SIN CE THE ASSESSEE OR HIS AUTHORIZED REPRESENTATIVE FAILED TO APPEAR BEFO RE THE AO ON THE DATES FIXED FOR HEARING AO DECIDED TO PROCEED U/S 144 OF THE ACT. AS PER THE INFORMATION RECEIVED THE ASSESSEE HAD DEPO SITED RS. 25 00 000/- IN HIS ACCOUNT ON 01.11.2010. DURING VE RIFICATION THE ASSESSEE HAD CONTENDED THAT HE ALONG WITH HIS BROTH ER ENTERED INTO AN AGREEMENT TO SELL THEIR LAND TO SH. VIKRANT SANDAL AND RECEIVED ADVANCE PAYMENT OF RS. 50 00 000/-. SINCE THE DEAL COULD NOT BE FINALIZED THEY FORFEITED THE ENTIRE AMOUNT RECEIVE D FROM SH. VIKRANT SANDAL AND HE DEPOSITED HIS SHARE OF RS. 25 00 000/ - IN HIS BANK ACCOUNT. DURING ASSESSMENT PROCEEDINGS THE AO VERI FIED THE AFORESAID FACTS AND ON THE BASIS OF THE REPLY RECEI VED FROM SH. VIKRANT SANDAL AO MADE ADDITION OF THE SAID AMOUNT TO THE I NCOME OF THE ASSESSEE AS UNEXPLAINED CREDIT AND DETERMINED THE T OTAL INCOME OF THE ASSESSEE AT RS. 26 57 860/- BESIDES THE AGRICULTURA L INCOME OF RS. 02 66 800/-. IN THE FIRST APPEAL THE LD. CIT(A) UP HELD THE ASSESSMENT ORDER AND CONFIRMED THE ADDITION MADE BY AO. THE AS SESSEE IS IN APPEAL AGAINST THE SAID FINDINGS OF THE LD. CIT(A). 3. THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER B Y RAISING THE FOLLOWING GROUNDS: - ITA NO. 86-CHD-2020- SH SAPI NER SINGH RAJPURA 3 1. THAT THE APPLICANT PROVIDED SOURCE OF CASH DEPOSIT OF RS. 25 00 000/- WITH DETAILS OF THE PERS ONS FROM WHOM IT WAS RECEIVED AND WAS DULY RETURNED THROUGH BANK THE APPLICANT HAS EXPLAINED THE SOURCE OF CASH AND HAVE DISCHARGED HIS PRIMARY ONUS TO EXPLAIN THE SOURCE OF CASH WITH DETAILS. I PRAY TO SEE THE TWO ASPECTS TO THIS TRANSACTION O NE IS CASH RECEIVED AND SECOND IS THE SAME AMOUNT TRANSFERRED BACK THE SAME PERSON FROM WHOM IT WAS RECEIVED THROUGH BANK ACCOUNT. IT IS HIGHLY INAPPROPRIATE TO CONSIDER THE MONEY TRANSFERRED THOUGH BANK AS AN ADVANCE TO THE SAME PERSON. 3. DURING PENDENCY OF THE SAID APPEAL THE LD. COUN SEL MOVED AN APPLICATION FOR ALLOWING THE ASSESSEE TO RAISE ADDI TIONAL GROUND OF APPEAL CHALLENGING THE VALIDITY OF REOPENING OF ASS ESSMENT U/S 147 READ WITH SECTION 148 OF THE ACT. THE ADDITIONAL GR OUND OF APPEAL READS AS UNDER: - THAT THE LD. ASSESSING OFFICER HAS ERRED IN REOPENING THE CASE U/S 147 READ WITH NOTICE U/S 148 AS THERE WAS NEITHER ANY REASON TO BELIEVE AND ALSO THERE HAS BEEN MECHANICAL SATISFACTION OF THE PCIT AND AS SUCH THE ASSESSMENT AS REOPENED DESERVES TO BE QUASHED. 4. DURING THE COURSE OF ARGUMENTS THE LD. COUNSEL SUBMITTED BEFORE US THAT THE ASSESSEE WANTS TO CHALLENGE THE REASSESSMENT PROCEEDINGS AND FINDINGS OF THE LD. CIT(A) IN APPEL LATE PROCEEDINGS ON LEGAL GROUND AFTER SEEKING PERMISSION TO RAISE A DDITIONAL GROUND. THE LD. COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE HAS MOVED APPLICATION DATED 24.08.2021 FOR ADMISSION OF ADDIT IONAL GROUND. THE ITA NO. 86-CHD-2020- SH SAPI NER SINGH RAJPURA 4 LD. COUNSEL PLACING RELIANCE ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION VS. CIT 229 ITR 383 SUBMITTED THAT SINCE THE ASSESSEE HAS RAISED THE L EGAL GROUND WHICH DOES NOT REQUIRE ENQUIRY/VERIFICATION OF FACT S THE APPLICATION FOR PERMISSION TO RAISE ADDITIONAL GROUND MAY BE AL LOWED AND THE ASSESSEE MAY BE PERMITTED TO ARGUE THE CASE ON LEGA L GROUND AS WELL. 5. ON THE OTHER HAND THE LD. DR. THE LD. DEPARTMEN TAL REPRESENTATIVE (DR) OPPOSED THE APPLICATION ON THE GROUND THAT THE ASSESSEE HAS NOT RAISED THE SAID GROUND BEFORE THE LD. CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. AS POINTED OUT BY THE LD. COUNS EL THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS A LEGAL GROUND WHI CH DOES NOT REQUIRE ANY INQUIRY OR VERIFICATION. IN OUR CONSIDERED VIEW THE LEGAL GROUND RAISED BY THE ASSESSEE GOES TO THE ROOT OF THIS APP EAL. HENCE FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE SUPREM E COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION VS. CIT (SUPRA) WE ALLOWED THE APPLICATION OF THE ASSESSEE AND PERMITT ED THE LD. COUNSEL TO ARGUE THE APPEAL ON THE LEGAL GROUND AS WELL. 7. THE LD. COUNSEL SUBMITTED THAT THE LD. CIT(A) H AS ERRED IN CONFIRMING THE ACTION OF THE AO IN INITIATING RE-AS SESSMENT PROCEEDINGS ON THE BASIS OF APPROVAL GRANTED BY THE LD. PR. CIT IN A MECHANICAL MANNER. THE LD. POINTED OUT THAT IN TH E PRESENT CASE SINCE THE AO INITIATED REASSESSMENT BEYOND THE PERI OD OF 4 YEARS ITA NO. 86-CHD-2020- SH SAPI NER SINGH RAJPURA 5 THE COMPETENT AUTHORITY WAS REQUIRED TO ACCORD VALI D SANCTION AFTER RECORDING HIS SATISFACTION ON THE BASIS OF THE REAS ONS RECORDED BY THE AO. THE LD. COUNSEL FURTHER SUBMITTED THAT SINC E THE LD. PR. CIT ACCORDED SANCTION FOR INITIATING PROCEEDINGS U/S 14 7 OF THE ACT AGAINST THE ASSESSEE IN A MECHANICAL MANNER WITHOUT APPLICATION OF MIND THE ASSESSMENT ORDER PASSED BY THE AO AND THE APPELLATE ORDER PASSED BY THE LD. CIT(A) ARE VOID AND LIABLE TO BE QUASHED. THE LD. COUNSEL INVITED OUR ATTENTION TO PAGE 3 OF THE PAPER BOOK WHICH IS THE COPY OF SANCTION ACCORDED BY THE LD. P R. CIT FOR INITIATING PROCEEDINGS U/S 147 READ WITH SECTION 14 8 OF THE ACT AND POINTED OUT THAT THE LD. PR. CIT HAS MERELY ENDORSE D THE PROPOSAL BY WRITING YES I AM SATISFIED THE LD. COUNSEL FUR THER SUBMITTED THAT THE ACTION OF THE LD. CIT(A) IS NOT IN CONSONA NCE WITH THE RATIO LAID DOWN BY THE HON'BLE MADHYA PRADESH HIGH COURT IN CIT VS S. GAYANKA LIME & CHEMICALS LTD. [2015] 56 TAXMAN.COM 390(MP ) WHEREIN THE HON'BLE COURT HAS DECLARED THE REOPENI NG INVALID ON THE GROUND THAT THE COMPETENT AUTHORITY HAS ACCORDED SANCTION FOR ISSUING NOTICE U/S 148 IN A MECHANICAL MANNER WITHOUT APPLICATION OF MIND. THE LD. COUNSEL FURTHER POINTE D OUT THAT THIS BENCH OF THE TRIBUNAL HAS DECIDED THE IDENTICAL ISS UE IN FAVOUR OF THE ASSESSEE AND SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) IN THE CASE OF CHARANJIT KAUR V ITO ITA NO. 193/CHD/2020 ON THE IDENTICAL GROUND. IN VIEW OF THE AFORESAID FACTS AN D CIRCUMSTANCES ITA NO. 86-CHD-2020- SH SAPI NER SINGH RAJPURA 6 OF THE CASE AND THE LAW LAID DOWN BY THE HON'BLE HI GH COURT THE LD. COUNSEL SUBMITTED THAT THE IMPUGNED ORDER MAY B E SET ASIDE. 8. ON THE OTHER HAND THE LD. DR SUPPORTING THE OR DER PASSED BY THE LD. CIT(A) SUBMITTED THAT SINCE THE ASSESSEE HA D FAILED TO DISCLOSE THE SOURCE OF CREDIT IN HIS BANK ACCOUNT THE LD. CIT(A) HAS RIGHTLY MADE CONFIRMED THE ADDITION MADE BY THE AO. ON THE ISSUE OF APPLICATION OF MIND BY THE LD. PR. CIT TH E LD. DR SUBMITTED THAT THE LD. PR. CIT HAS ACCORDED THE SAN CTION FOR ISSUING NOTICE U/S 148 OF THE ACT ON THE BASIS OF THE REASO NS RECORDED BY THE AO THEREFORE THERE IS NO INFIRMITY IN THE ORDE R PASSED BY THE LD. CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PART IES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE CASES RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE. AS POINTED OUT BY THE LD. COUNSEL IN THE CASE OF CIT VS S. GAYANKA LIME & CHEMICALS LTD. (SUPRA) THE HON'BLE MADHYA PRADESH HIGH COURT HAS QUASHED T HE RE- ASSESSMENT PROCEEDINGS FOR THE REASONS THAT THE PCI T HAS RECORDED HIS SATISFACTION BY WRITING YES SATISFIED IT IS A FIT CASE FOR ISSUE OF NOTICE U/S 148 . IN THE PRESENT CASE ALSO THE LD. PR. CIT HAS ACCORDED SANCTION BY WRITING REASONS SEEN. YES I AM SATISFIED WHICH SHOWS THAT THE LD. PR. CIT DID NOT APPLY HIS MIND WHILE GRANTING SANCTION. AS PER THE RATIO LAID DOWN BY TH E HONBLE MADHYA PRADESH HIGH COURT IN THE AFORESAID CASE SA TISFACTION HAS ITA NO. 86-CHD-2020- SH SAPI NER SINGH RAJPURA 7 TO BE RECORDED OBJECTIVITY ON OBJECTIVE MATERIAL. F URTHER THIS BENCH OF THE TRIBUNAL HAS ALREADY DECIDED THE IDENT ICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF SMT. CHARAJIT KAUR VS ITO (SUPRA) BY FOLLOWING THE RATIO LAID DOWN BY THE HON 'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS S. GAYANKA LIME & CHEMICALS LTD . WHEREIN THE HON'BLE HIGH COURT HAS HELD AS UNDER: - 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND WE FIND THAT WHILE ACCORDING SANCTION THE JOINT COMMISSIONER INCOME TAX ONLY RECORDED SO YES I AM SATISFIED WHICH INDICATES AS IF HE WAS TO SIGN ONLY ON THE DOTTED LINE. EVEN OTHERWISE ALSO THE EXERCISE IS SHOWN TO HAVE BEEN PERFORMED IN LESS THAN 24 HOURS OF TIME WHICH ALSO GOES TO INDICATE THAT THE COMMISSIONER DID NOT APPLY HIS MIND AT ALL WHILE GRANTING SANCTION. THE SATISFACTION HAS TO BE WITH OBJECTIVITY ON OBJECTIVE MATERIAL. 8. IF THE CASE IN HAND IS ANALYSED ON THE BASIS OF THE AFORESAID PRINCIPLE THE MECHANICAL WAY OF RECORDING SATISFACTION BY THE JOINT COMMISSIONER WHICH ACCORDS SANCTION FOR ISSUING NOTICE UNDER 148 IS CLEARLY UNSUSTAINABLE AND WE FIND THAT ON SUCH CONSIDERATION BOTH THE APPELLATE AUTHORITIES HAVE INTERFERED INTO THE MATTER. IN DOING SO NO ERROR HAS BEEN COMMITTED WARRANTING RECONSIDERATION. 10. HENCE CONSISTENT WITH OUR FINDINGS IN THE CASE OF SMT. CHARANJIT KAUR VS ITO (SUPRA) WE HOLD THAT IN THE PRESENT CASE THE LD. PR. CIT HAS ACCORDED THE SANCTION FOR ISSUI NG NOTICE U/S 148 OF THE ACT IN A MECHANICAL MANNER WITHOUT APPLICAT ION OF MIND. THEREFORE THE LD. CIT(A) HAS WRONGLY CONFIRMED THE REASSESSMENT ITA NO. 86-CHD-2020- SH SAPI NER SINGH RAJPURA 8 ORDER PASSED BY THE AO. ACCORDINGLY WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION. 11. SINCE WE HAVE DECIDED THE LEGAL ISSUE IN FAVOUR OF THE ASSESSEE WE DO NOT DEEM IT NECESSARY TO DECIDE THE GROUNDS RAISED BY THE ASSESSEE ON MERITS. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 31.08.2021 SD/- SD/- ( N.K. SAINI) (R.L.NEGI) / VICE PRESIDENT / JUDICIAL MEMBER DATED : 31.08 .2021 .. -.- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / / CIT 4. / ( )/ THE CIT(A) 5. - 2 %2 4 / DR ITAT CHANDIGARH 6. / GUARD FILE / BY ORDER / ASSISTANT REGISTRAR