Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI RAVISH SOOD & SHRI ARUN KHODPIA
आदेश / ORDER PER RAVISH SOOD, JM:
The present appeal filed by the assessee is directed against the order passed by the Principal Commissioner of Income Tax, Raipur-1(for short ‘Pr. CIT’) u/s. 263 of the Income Tax Act, 1961 (for short ‘the Act’) dated 18.03.2021, which in turn arises from the order passed by the A.O. u/ss. 143(3)/147 of the Act, dated 11.12.2018 for A.Y. 2015-16. The assessee has assailed the impugned order on the following grounds of appeal before us:
“1. Ld. Pr. CIT erred in invoking the provisions of Sec.263 and in setting aside the assessment order for fresh enquiry. Order passed u/s.263 is unsustainable and is passed without properly appreciating the facts and evidences on record. The assessment order is neither erroneous nor prejudicial to the interest of the revenue. 2. The appellant reserves the right to add, amend or modify any of the ground/s of appeal.”
The case of the assessee was reopened by the A.O u/s.147 of the Act based on the following “reasons to believe”-
“Reasons for the belief that the income has escaped assessment The assessee did not file the return for the relevant assessment year. As per the information available in this office, a total cash of Rs.13,00,000/- and professional or technical fees Rs.45,021/- during the F.Y. 2014-15 relevant to A.Y. 2015- 16.
3 Awanish Pandey Vs. Pr. CIT, Raipur-1 ITA No. 128/RPR/2022
The above amounts constitute the part of the total income of the assessee and therefore should have brought under tax net by filing return income for the said assessment year. However, the assessee has not filed the same. In view of the above, I have reason to believe that the income in the said case, has escaped the assessment for the assessment year 2015-16 amounting to Rs.13,45,021/- under section 147 of I.T.Act,1961. For taxing the said amount, issue of notice u/s.148 is necessary. Accordingly, necessary approval u/s. 151(1) of the 1.T Act may be accorded at your end. Date :25.01.2018 Sd/- Pradeep Kumar Ramteke Income Tax Officer-2, Ambikapur”
Notice u/s.148 of the Act dated 08.06.2018 was issued to the assessee. In compliance, the assessee filed his return of income declaring an income of Rs.3,08,670/-. Thereafter, assessment was framed by the AO vide his order passed u/ss. 143(3)/147 of the Act dated 11.12.2018 accepting the assessee’s returned income as such.
The Pr. CIT after culmination of the assessment proceedings called for the assessment records of the assessee. The Pr. CIT observed that though the case of the assessee was reopened for bringing within the tax net two-facet income of the assessee which had escaped assessment, viz. (i) cash deposits in bank account: Rs.13 lacs; and (ii) professional /technical fees: Rs.45,021/-, but the A.O while framing the assessment had without carrying out any verifications summarily accepted the assessee’s unsubstantiated explanation on the aforesaid issues.
4 Awanish Pandey Vs. Pr. CIT, Raipur-1 ITA No. 128/RPR/2022
Accordingly, the Pr. CIT holding a conviction that the failure on the part of A.O to carry out necessary enquiries on the aforementioned issues had rendered his order as erroneous in so far it was prejudicial to the interest of the revenue, thus set-aside the assessment order with a direction to the A.O to reframe the same after affording a reasonable opportunity of being heard to the assessee.
The assessee being aggrieved with the order of the Pr. CIT u/s.263 of the Act dated 18.03.2021 has carried the matter in appeal before us.
At the very outset, we may herein observe that the present appeal involves a delay of 408 days. Our attention was drawn by the Ld. AR to the application filed by the assessee seeking condonation of the delay involved in filing of the present appeal a/w. an “affidavit” that was filed in support thereof. On a perusal of the aforesaid application it transpires that the delay of 408 days is attributable to two reasons, viz. (i) delay of 379 days (17.05.2021 to 31.05.2022) is covered by the order of the Hon’ble Supreme Court in Suo-moto writ petition (C) No.3 of 2022 dated 10.01.2022 ; and (ii) delay of 29 days had crept in for the reason that the assessee was unaware about his right to prefer an appeal against the order passed by the Pr. CIT u/s. 263 of the Act before the Tribunal. For the sake of clarity, the reasons leading to the aforesaid delay in filing of the appeal as stated by the assessee in his “affidavit” are culled out as under:
5 Awanish Pandey Vs. Pr. CIT, Raipur-1 ITA No. 128/RPR/2022
“THAT the appeal was delayed for the following reasons:- i) Regarding delay from 17.05.2021(due date) to 31.05.2022 (379 days) Although the revision order was passed in March, 2021, the time available for filing appeal before Hon'ble ITAT was up to 31.05.2022 for the reason that in suo moto writ petition (C) no. 3 of 2022, vide order dt. 10.01.2022, Hon'ble Supreme Court has directed vide para no. 5 (1 & HI) that in the matter of filing appeal etc., where the limitation expired during the period between 15.03.2020 to 28.02.2022, the aforesaid period shall stand excluded for the purpose of limitation and the period of limitation remaining w.e.f. 01.03.2022 shall stand extended for a period of 90 days. Therefore, as per the above decision of Hon'ble Supreme Court, the due date of filing appeal before Hon'ble ITAT was 31.05.2022. ii) Regarding delay from 31.05.2022 to 29.06.2022 (29 days) The assessee had appointed a counsel for representing her case before the AO during the original assessment proceedings and after completion of assessment, services were not availed from such counsel. Thereafter, whatever compliance were needed, the assessee did on his own and was thus not assisted by any counsel. Even during the set aside assessment proceedings, the assessee was not assisted by any counsel and the compliance was made by the assessee himself. After receiving order u/s 147 r.w.s 263, since demand was raised the assessee appointed new counsel to guide him. The new counsel so approached advised the assessee to file appeal before ITAT against the revision order passed u/s 263 along with a request for condonation of delay. Until this time, the assessee was not aware of procedure relating to appeal. Therefore, the delay is attributable mainly to the fact that the assessee did not know about the availability of option to file appeal against the revision order.”
On a careful perusal of the aforesaid reasons, we find that in so far the delay of 379 days (supra) is concerned the same clearly falls within the extended period of limitation as laid down by the Hon’ble Supreme Court vide its order passed in Suo-moto writ petition (C) No.3 of 2022 dated 10.01.2022. As regards the delay of 29 days (supra), it transpires that the
6 Awanish Pandey Vs. Pr. CIT, Raipur-1 ITA No. 128/RPR/2022
same had occasioned for the reason that the assessee who was not assisted by any counsel upto the stage of the set-aside assessment proceedings, had learned about his right to prefer an appeal against the order passed by the Pr. CIT u/s.263 of the Act before the Tribunal only after he had engaged a counsel to assail the order passed by the A.O u/ss. 143(3)/147 dated 11.12.2018 before the CIT (Appeals). Considering the fact that the assessee was not represented by any counsel during the course of proceedings u/s. 263 of the Act before the Pr. CIT, Raipur, we find substance in his claim that delay in filing of the present appeal had occasioned because of his unawareness about his right to assail the impugned order before the Tribunal. Be that as it may, as the delay in filing of the present appeal does not smack of any malafide intention or lackadaisical approach on the part of the assessee, but is apparently prompted on account of a bonafide mistake which had occasioned on his part, therefore, the same merits to be condoned. We, thus, in all fairness condone the delay involved in filing of the present appeal before us.
At the very outset, it was averred by the Ld. Authorized Representative (for short ‘AR’) that as the case of the assessee was reopened on the misconceived and incorrect facts, therefore, in absence of valid assumption of jurisdiction the consequential assessment framed by the A.O u/ss. 143(3)/147 of the Act was devoid and bereft of any force of law and was in fact non-est. Carrying his contention further, it was
7 Awanish Pandey Vs. Pr. CIT, Raipur-1 ITA No. 128/RPR/2022
submitted by the Ld. AR that now when the impugned assessment framed u/ss.143(3)/147 dated 11.12.2018 was itself invalid and non-est, therefore, the same could not have been revised by the Pr. CIT u/s.263 of the Act. Elaborating further, it was submitted by the Ld. AR that as the total cash deposits in the assessee’s bank account No.10906144768 with State Bank of India, Branch: Ambikapur City aggregated to Rs.2.95 lacs (as against Rs.13 lacs stated in the “reasons to believe”), therefore, the reopening of his case on the basis of misconceived facts was invalid and non-est and had no existence in the eyes of law.
Per contra, the Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. Controverting the claim of the Ld. AR that the reopening of the assessee’s case was based on misconceived and wrong facts, it was submitted by the Ld. AR that as the copy of the “Annual Information Report” (AIR) of the assessee revealed cash deposit of Rs.13 lacs in his bank account during the year under consideration, therefore, no infirmity did emerge from the reopening of the assessee’s case wherein the AO had formed a bonafide belief as regards escapement of the income of the assessee on the basis of the material as was there before him. Our attention was drawn by the Ld. DR towards the copy of the AIR which supported the aforesaid factual position. The Ld. DR submitted that as the A.O had failed to carry out the bare minimum verifications on the issues which had formed the very basis for reopening
8 Awanish Pandey Vs. Pr. CIT, Raipur-1 ITA No. 128/RPR/2022
of the assessee’s case u/s. 147 of the Act, therefore, the Pr. CIT had rightly stepped in and set-aside the assessment order in exercise of the powers that were vested with him as per “Explanation 2” of Section 263 of the Act.
We have given a thoughtful consideration and find substance in the claim of the Ld. DR that the Pr. CIT had rightly stepped in and set-aside the order passed by the A.O u/ss. 143(3)/147 of the Act dated 11.12.2018. Apropos the contention of the Ld. AR that as the order passed by the A.O u/ss. 143(3)/147 of the Act dated 11.12.2018 was in itself invalid and non-est, therefore, the same could not have been revised by the Pr. CIT u/s. 263 of the Act, the same does not find favour with us. We, say so, for the reason that a perusal of the AIR information of the assessee (available in the assessment .records) in itself makes a reference of cash deposits of Rs.13 lacs in the assessee’s bank account during the year under consideration. On the basis of the aforesaid factual position, we are of the considered view that the A.O had rightly arrived at a bonafide belief that the income of the assessee chargeable to tax parked in the form of cash deposits in bank amounting to Rs.13 lacs (supra) had escaped assessment. At this stage, we are reminded of the judgment of the Hon’ble Supreme Court in the case of Raymond Woollen Mills Ltd. Vs Income-Tax Officer and Ors. (1999) 236 ITR 34 (SC), wherein the Hon’ble Apex Court had observed that the validity of the reopening of an assessment is to be tested on the touchstone as to whether there was prima facie some material with
9 Awanish Pandey Vs. Pr. CIT, Raipur-1 ITA No. 128/RPR/2022
the A.O on the basis of which he could arrive at a bonafide believe that the income of the assessee chargeable to tax had escaped assessment. It was further observed that the sufficiency or correctness of the material is not a thing to be considered at the stage of reopening of a case.
Considering the aforesaid mandate of law as had been laid down by the Hon’ble Supreme Court, we are of the considered view that now when the AIR information of the assessee (available in the assessment record) in itself makes a reference of cash deposits of Rs.13 lac in his bank account during the year under consideration, therefore, reopening of his case by the AO cannot be held to be suffering from any infirmity. We, thus, in terms of our aforesaid observations are unable to concur with the contention of the Ld. AR that the A.O had wrongly assumed jurisdiction and reopened the case of the assessee on the basis of misconceived and wrong facts.
Adverting to the merits of the case, it transpires on a bare perusal of the assessment order that the A.O had summarily accepted the unsubstantiated claim of the assessee with regard to both the issues on the basis of which the proceedings u/s 147 were initiated, viz. (i) cash deposit in bank account: Rs.13 lacs; and (ii) professional/technical fees that had escaped assessment: Rs.45,021/-. Neither there is anything discernible from the assessment order nor any material has been placed
10 Awanish Pandey Vs. Pr. CIT, Raipur-1 ITA No. 128/RPR/2022
on record by the Ld. AR which would reveal that the A.O while framing assessment had only after carrying out necessary verifications accepted the assessee’s claim as regards both of the aforementioned issues. In fact, the contention of the Ld. AR that the assessee had only made a cash deposit of Rs.2.95 lacs (supra) (as against Rs.13 lacs stated in the “reasons to believe”) further supports the claim of the department. We, say so, for the reason that if the claim of the assessee that he had only made cash deposits of Rs.2.95 lacs (supra) in his bank account during the year is found to be correct, then, we are unable to comprehend that as to what verification the A.O had carried out as regards the cash deposits of Rs.13 lacs (supra) as had been stated by him in the body of the assessment order.
Be that as it may, we are of a strong conviction that as observed by the Pr. CIT and, rightly so, as the A.O while framing the assessment had failed to carry out the bare minimum verifications with respect to both the aforementioned issues which had formed the very basis for initiating proceedings u/s.147 of the Act, therefore, the same had rendered the order passed by him u/ss. 143(3) r.w.s. 147 dated 11.12.2018 as erroneous in so far it was prejudicial to the interest of the revenue u/s.263 of the Act. We, thus, in terms of our aforesaid observations finding no infirmity in the view taken by the Pr. CIT u/s.263 of the Act, uphold his order.
11 Awanish Pandey Vs. Pr. CIT, Raipur-1 ITA No. 128/RPR/2022
In the result, appeal of the assessee is dismissed in terms of our aforesaid observations.
Order pronounced in open court on 03rd day of August, 2023.
Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; �दनांक / Dated : 03rd August, 2023 *SB आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant. 2. ��यथ� / The Respondent. 3. The Pr. CIT, Raipur-1 (C.G) 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, रायपुर ब�च, रायपुर / DR, ITAT, Raipur Bench, Raipur. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // �नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur.