BALWAN SINGH,KURUKSHETRA vs. ITO, W-1, KURUKSHETRA

आदेश/ORDER PER DIVA SINGH

The present appeal has been filed by the assessee wherein the correctness of the order dated 21.08.2018 of CIT(A), Karnal pertaining to 2012-13 assessment year has been assailed on the following grounds :

ITA 1441/CHD/2018 A.Y. 2012-13 Page 2 of 10 4. That the Ld. CIT(A), is not justified while upholding the orders of the AO in sustaining the addition by relying on the dumb documents/ inadmissible evidences i.e. photocopies of some alleged 'bayanas' without even the signatures of the assessee-appellant. 5. That the Ld. CIT(A) has grossly erred in upholding the additions on account of so called 'bayanas' particularly when even both the alleged parties to bogus/forged bayanas also denies any agreement entered between them. 6. That the Ld. CIT(A) has grossly erred in upholding the additions without appreciating the fact that all the investments made for purchase of land was made out of sale proceeds of 18 Kanal Land at Village Aahar. 7. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard and disposed off.” 2. However, at the time of hearing, ld. AR inviting attention to

ground No. 2 raised in the appeal submitted that the legal issue

may be decided first as the orders of the authorities have been

passed without jurisdiction.

2.1 Alternately it was submitted inviting attention to ground No.

3 that the impugned order even otherwise cannot stand in the

eyes of law as it is a non-speaking order passed by the CIT(A).

required to point out the infirmity in the order passed which is

addressed in ground No. 2 by the assessee. The ld. AR submitted

that the said issue has not been raised by the assessee before the

CIT(A) and is being raised for the first time before the ITAT. In

view of this fact, it was submitted that there is no finding on the

said issue. It was conceded on query that the assessee has

raised a fresh ground which though is not addressed in the

impugned order, however, being a legal ground, can be raised. It

ITA 1441/CHD/2018 A.Y. 2012-13 Page 3 of 10

was agreed that the said ground should have been raised by the

assessee by way of a specific application and in the

circumstances it was his prayer that the ground being a legal

ground may be admitted.

raising of the ground without a proper application as the issue

has not been addressed by the CIT(A) as no such ground was

raised before him. In the face of the objection of the ld. AR it was

submitted that no doubt it is a legal ground, hence he agreed

that it may be admitted. In the absence of any finding of the

CIT(A), it was his request that the matter may be remanded for

addressing whatever shortcoming the ld. AR/assessee wants to

argue as in the absence of any discussion in the order, he was

not in a position to make any submission on this aspect.

ultimately on the admission of the ground, there was no

objection, submitted that the issue is fully covered in his favour

by virtue of the order of the ITAT in the case of ITO Vs Shri Manpreet Singh Bhamra ITA No. 495/CHD/2014 dated 10.12.2015. Inviting attention to copy of the said order it was argued that re-

opening had been directed purely on the basis of the fact that the

assessee had not filed his return of income for the specific year

under consideration. This fact, it was submitted, was found to

be an incorrect fact by the ITAT and the order was quashed

ITA 1441/CHD/2018 A.Y. 2012-13 Page 4 of 10

Inviting attention to the copy of the reasons recorded by the AO

available at Paper Book page 15 it was his submission that

similar reasoning is available in the facts of the present case

also. It was submitted that when the said reasoning is compared

with para 1 of the assessment order where the AO takes note of

the fact that the assessee has returned income of Rs. 1,69,320/-+

Agriculture Income of Rs. 1,20,000/- by way of filing of return on

17.10.2012, the principle invoked by the ITAT in the said

decision, it was submitted, becomes fully applicable to the facts

of the present case also.

matter may be remanded. It was also submitted that the ld. AR

is incorrect in arguing that re-opening has been directed purely

on the grounds that the return was not filed. Reading from the

reasons recorded, it was his submission that the re-opening has

been necessitated purely on account of the fact that the assessee

had acquired an immovable property and paid for the same in

cash by an amount aggregating to Rs. 75,85,000/-. Thus even if

the return had been perused, the fact of available cash to the extent

noticed necessitated and needed examination and consideration as

the meager returned income suggested escapement of income. The

reason to believe, it was argued is sufficient and complete and thus

the principle invoked as laid down by the ITAT, it was his

submission, is not attracted in the facts of the present case.

ITA 1441/CHD/2018 A.Y. 2012-13 Page 5 of 10

However, it was mentioned that the issue be remanded as due to

non-discussion on the same by the CIT(A), the department is

handicapped on facts.

submitted that the return had been filed. On query he has

submitted that the assessee has been returning income from the

stated activity of supply of mid-day meals to schools etc. We find

that reference to the said fact is not evident from the record. The

ld. AR has also stated that the assessee has been in this line of

business and has been returning income from the stated activity

over a period of time which fact also is not coming from the

order.

material available on record. It is seen that in the facts of the

present case it is an admitted fact that return of income was filed

on 17.10.2012 and as per reasons recorded available on record,

the AO has noted the following facts :

Reasons for belief under section 147 of the Income Tax Act, 1961 that the income has escaped assessment, recorded for issuing notice under section 148 of the Income Tax Act, 1961: Assessee's name & address: Shri Balwan Singh, House No. 1. 2121/5, Vashisth Colony, Mohan Nagar, Kurukshetra. - PAN: - AYBPS 9443A. 2. Assessment year: 2012-13 3. Status Individual. 4.

ITA 1441/CHD/2018 A.Y. 2012-13 Page 6 of 10

(All the sections/sub-sections and clauses of the Act mentioned hereinafter refer to those of the Income-tax Act, 1961 unless specified otherwise) 1. As per the information on record of this office, the assessee has made investments in immovable property and paid the cash amounts aggregating to- Rs.75,85,000/- during the financial year 2011- 12 as advances against the purchase price aggregating to Rs. 1,27,41,347/- for the said property. The assessee has not filed his return of income for the corresponding assessment year 2012-13. 2. I, therefore, have reason to believe that the assessee's income of Rs.75,85,000/-, has escaped assessment within meaning of section 147 of the Income-tax Act, 1961. Therefore, a notice under section 148 of the Income-tax Act, 1961 is issued for the assessment year 2012-13. Sd/- (Maya Ram) Income-tax Officer, Ward-1, Kurukshetra. (emphasis supplied) 8.1 We find on a reading from the order of the ITAT in the case

of Manpreet Singh Bhamra (cited supra) relied upon by ld. AR the

following reasons were made available on record before the Co-

ordinate Bench :

"Sh. Manpreet Singh son of Sh. Hardeep Singh Bhamra has made various investments in Bank during the financial year 1 999-2000 and has not filed any income tax return and source of in these banks deposits remained unexplained. The above said cash deposits in the above said bank is from undisclosed sources. I, therefore, have reasons to believe that investment of above income of the assessee for the assessment year 2000-2001 under section 147 of the Income Tax Act, 1961 has escaped assessment as income of the assessee for the assessment year 2000-2001 under section 147 of the Income Tax Act, 1961." 8.1.1 In view of these facts, the Co-ordinate Bench concluded

the issue in the following manner :

“7. We have heard the rival submissions. The Assessing Officer recorded the reasons for re-opening of the assessment mainly on the reason that assessee has not filed any return of income for

ITA 1441/CHD/2018 A.Y. 2012-13 Page 7 of 10 assessment year under appeal which fact itself is incorrect because the assessee filed return of income in assessment year 1999-2000 on 08.03.2000. Copy of the acknowledgement of filing of the return is filed at page 28 of the Paper Book. Since the Assessing Officer recorded incorrect and non-existing reasons for re-opening of the assessment, therefore, re-opening of the assessment would not be justified in the matter. We rely upon decision of Hon'ble Punjab & Haryana High Court in the case of Atlas Cycle Industries 180 ITR 319. The issue is, therefore, covered in favour of the assessee by order of ITAT Chandigarh Bench in the case of Shri Rajneesh Bansal (supra). No infirmity have been pointed out in the order of ld. CIT(Appeals) in following the order of the Tribunal in the case of Shri Rajneesh Bansal (supra). We may also note here that on identical facts and reasons recorded for subsequent assessment year 2000-01, the ld. CIT(Appeals) vide order dated 24.02.2014 quashed the re-assessment proceedings against which, no departmental appeal have been filed. Therefore, on this reason also, order of the ld. CIT(Appeals) should be confirmed.”

8.2 In the facts of the present case, the ld. Sr.DR maintaining

his stand for a remand of the issue has tried to draw a material

distinction on facts as available in the reasons recorded in the

present case vis-à-vis the reasons recorded in the case of

Manpreet Singh Bhamra. The ld. Sr.DR has tried to made out a

case that the triggering factor was the payments in cash

amounting to Rs. 75 lakh odd for purchase of property. He has

attempted to argue that a perusal of the return would not have

addressed the issue. Thus, maintaining that the material fact

was payments made in cash for purchase of property and not

filing of the return. Accordingly, noting the objections of the

Sr.DR and in the inability of the ld. AR who was also not in a

position to address the relevant facts namely whether the assessee

has been a regular Income Tax assessee over the years and be said

to expect that the stated amounts noticed in the transaction

ITA 1441/CHD/2018 A.Y. 2012-13 Page 8 of 10

could readily be said to be available to him. Thus, in the

absence of relevant discussion on facts, we deem it appropriate

to set aside the said ground back to the file of the CIT(A) with the

direction to pass a speaking order in accordance with law after

obtaining necessary remand reports, if any on the past history of

the assessee, if need be and of course providing the assessee a

reasonable opportunity of being heard.

impugned order submitted that the CIT(A) has extracted

submissions of the assessee in pages 1 to 10 of his order.

Thereafter, discussing the facts as available in the assessment

order and extracting the remand report of the AO at pages upto

12, the issue was concluded by the CIT(A)at page 13 in the

following manner :

“11. It is, therefore, dear that the discrepancies pointed out by the A.O. 2 not been rebutted. Hence, the assessee's contention that the statement of the ties denying entering into the agreement cannot be relied upon. For example-, fact that signature of one of the persons, Sh. Manoj Kumar, recorded in the statement before the A.O. and also in one of the agreements match. Moreover, the witness in that particular case, Sh. Rajesh Kumar confirmed the transaction before the A.O. (Para 6.3 of the assessment order). In view of the detailed and logical findings of Assessing Officer, I confirm the said additions in respect of various property transactions amounting to Rs. 1,08,80,250/-. The grounds of appeal are dismissed.

9.1 Referring to the same it was his submission that not only

the facts as brought out in the aforesaid finding are incorrect,

even otherwise the detailed submissions advanced on the claims

ITA 1441/CHD/2018 A.Y. 2012-13 Page 9 of 10

remain unaddressed and thus the order being a non-speaking

order may be remanded back for a discussion and decision on

merits of the facts, evidences and record.

the assessee in the present proceedings agreed that the matter

may be remanded.

material available on record. On a perusal of the impugned order

we find ourselves constrained to hold that the order cannot be

upheld. The order cannot be said to be a speaking order in the

eyes of law as the affidavit relied upon on behalf of the assessee

has neither been discussed nor any reasons have been given why

it has to be discarded. In the absence of any discussion on the

facts and submissions advanced by the assessee before the

CIT(A), we are not in a position to conclude whether the finding

arrived at by the CIT(A) is correct on facts or not. Accordingly, we

set aside the impugned order and restore the issue back to the

file of the CIT(A) with the direction to pass a speaking order in

accordance with law.

posed by the assessee and thereafter in case the assessee does

not succeed on the jurisdictional issue, he shall proceed to

ITA 1441/CHD/2018 A.Y. 2012-13 Page 10 of 10 decide the issue on merits. Said order was pronounced in the Open Court at the time of hearing itself.

Order pronounced in the Open Court on 13.08.2019.

Sd/- Sd/- ( अ�नपूणा� गु�ता ) ( �दवा �संह ) (ANNAPURNA GUPTA) (DIVA SINGH) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member