Income Tax Appellate Tribunal - Delhi
Amrik Singh Saluja, New Delhi vs Ito, Ward- 39(4), New Delhi on 20 July, 2022
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "A" DELHI
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER
&
SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
I.T.A. No.6094/DEL/2017
Assessment Year 1998-99
Amrik Singh Saluja, v. DCIT (Inv.),
A-89, Central Avenue Sainik Farms, Circle-15(1),
New Delhi. New Delhi.
TAN/PAN: BCPPS2224G
(Appellant) (Respondent)
Appellant by: None
Respondent by: Shri Kanav Bali, Sr.DR
Date of hearing: 27 06 2022
Date of pronouncement: 20 07 2022
ORDER
PER PRADIP KUMAR KEDIA, A.M.:
The captioned appeal has been filed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals)-XI, New Delhi ['CIT(A)' in short] dated 31.07.2017 arising from the assessment order dated 31.05.2000 passed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 1998-99.
2. As per the Tribunal's order in ITA No.2174/Del/2015 order dated 5 t h October, 2009, it was contended on behalf of the assessee that Ground No.5 raised before the CIT(A) was omitted from adjudication by the CIT(A). The ITAT consequently set aside Ground No.5 as raised by the assessee before the CIT(A) to decide the same on merits.
I.T.A. No.6094/Del/2017 23. Ground No.5 raised before the CIT(A) reads as under:
"5. The whole exercise of making the assessment is an eyewash. In fact it is learnt that there was a secret committee of very senior officials of income tax and Enforcement Directorate who interfered with the assessment repeatedly in spite of objections by me to the AO and the AO could not apply free mind in making the assessment, which has lead to grave miscarriage of justice. In fact the assessment order does not even acknowledge the same and I have been saddled with punitive demand devoid of any basis. The assessment thus having been made without the proper application of fee mind of the AO alone, is void and merits to be annulled on this ground alone."
4. Pursuant to the directions of the ITAT, the CIT(A) vide order dated 31.07.2017 disposed of the impugned Ground No.5 against the assessee after taking into account the submissions made on behalf of the assessee. The relevant operative paragraph of the order of the CIT(A) reads as under:
"3.2 I have gone through the facts of the case alongwith the earlier orders issued by- various authorities and the various submissions made by the AR before me and before my predecessor during the course of appellate proceedings. The main contentions of the AR are as under:
i. It is contended that all the grounds of appeal that were raised by the appellant at the time of filing of appeal against the assessment order are liable to be decided;
ii. It is further contended that the assessment order was passed by the AO under the influence of an extraneous authority and the AO has not applied her mind independently to determine I.T.A. No.6094/Del/2017 3 the fair income of the appellant. It is also submitted that the assessment records may be called to verify the issue and the appellant be given an opportunity to examine the same.
The contentions of the AR are discussed in the following paragraphs.
3.3 As far as the argument of the AR that all the grounds of appeal that were raised by the appellant at the time of filing of appeal against the assessment order are liable to be decided, is concerned, it is observed that the Hon'ble ITAT has in its order very clearly remanded Ground no. 5 of the appeal to the file of CIT(A) with the direction that the same be decided on merits after hearing the assessee. The appellant had filed a Miscellaneous Application before the Honhie ITAT regarding the decision in respect of the other grounds of appeal taken by the appellant. This application was dismissed vide order dated 26.08.2011 by Hon'ble ITAT (as already discussed above). In view of these facts, it is quite clear that the only window open before the CIT(A) is regarding the Ground no. 5 of appeal as stated in Para 2 of ITAT Order dated 05.10.2009. In view of this, the contention of the appellant to decide all the Grounds of appeal is rejected.
3.4 As far as the ground no. 5 of the appeal is concerned, the same is reproduced as under:
"5. The whole exercise of making, the assessment is an eyewash. In fact it is learnt that there was a secret committee of very senior officials of income tax and Enforcement Directorate who interfered with the assessment repeatedly in spite of objections by me to the AO and the AO could not apply free mind in making the assessment, which has lead to grave miscarriage of justice.
I.T.A. No.6094/Del/2017 4In fact the assessment order does not even acknowledge the same and I have been saddled with punitive demand devoid of any basis. The assessment thus having been made without the proper application of free mind of the AO alone, is void and merits to be annulled on this ground alone."
3.5 In the written submissions made by the AR during the course of appellate proceedings, the appellant has contended that the assessment order was passed by the AO under the influence of an extraneous authority and the AO has not applied her mind independently to determine the lair income of the appellant and therefore, the assessment order is void. In this context, the AR has submitted that after inspection of the assessment records, the AR had obtained certified copies of various documents and these documents contained a copy of an order u/s 144 of the Act dated 05.04.2000 in which some person other than the AO has scored out a portion of Para 12.2 and the same was changed by a written dictate. It is further contended that the certified copies contained a correspondence which establishes the existence of a high level coordination committee dealing with economic offences which was monitoring the assessment proceedings of the appellant. It is also submitted by the AR that although the assessment was completed u/s 143(3) of the Act yet in the Income Tax Computation Form (ITNS-150), interest u/s 158BFA has been charged which shows non application of mind on the part of the AO.
3.6 A perusal of the records shows that at the time of original appellate proceedings, the Ld. CIT(A)-XXIII had referred all these issues to the AO and the AO was asked to submit the report after verification of facts from the records. In respect of the interest charged u/s 158BFA of the Act, the AO had submitted I.T.A. No.6094/Del/2017 5 vide the Remand Report dated 06.11.2003 that the section 158BFA was wrongly mentioned and the interest was actually charged u/s 234B of the Act. The relevant portion of the Remand Report is reproduced as under:
"Kindly refer to your letter no. C1T/XXIH/02-03/227 dated 26/2.2003 and subsequent reminder vide your letter no. 123 dated 28.10,2003 on the subject mentioned above.
In this connection, I am to submit as under:
i. ITNS-150 and demand notice both dated 1.6.2000 in consequence of an order u/s 143 (3) dated 31.5.2000 are quite valid as the assessment order referred to therein was properly served. The assessment order alongwith demand notice etc. was duly posted by Registered Post No. 2573 dated 2.6.2000 from UP. Estate Post Office, New Delhi. Thus, the issue is not valid and baseless.
ii. As regards charging of interest under section 158 BFA is concerned. It is submitted that by mistake in palace of interest charged under section 234 B, section 158 BFA is mentioned.
In this case assessee filed a return of income on 31/10/98 at an income of Rs.55 lacs.
The return was processed under section 143 (1) (a) on 30/ 11/9S. The assesses did not pay any advance tax, interest under section 234 B of the Act was charged at Rs. 2,60,000/- correctly .
Regular assessment under section 143(3) was made on 1st June 2000 and interest under section 234 B of the Act should have been charged upto the date of assessment as per law. While preparing the ITNS 150 on 1/6/00, after charging interest under I.T.A. No.6094/Del/2017 6 section 234 B as mentioned earlier (though wrongly mentioned as interest under section 158 BFA), an amount of Ks. 2,60,000/- already charged under section 143 (1) (a) has been reduced from the total amount, as may be observed from page 2 of the ITNS 150 annexured hereto. This supports the submission that the interest is claimable under section 234 B and not under section 158 BFA as wrongly described in the ITNS 150, as under section 143 (1) (a ) no interest under section 158 BFA has been charged, but what was charged was interest under section 234 B. Furthermore, the rate of income tax applied as per normal rates applicable to individuals and not chargeable in case of search cases. Thus, this is a genuine mistake and there is no legal implication as contested by the assessee.
By way of reference it may be mentioned that under section 158 BFA interest is charged where return is submitted either late or not submitted in pursuance to notice under section 158 BC of the Act and. is for the period of default only, which is not so in the present case.
In view of the above facts supported by documentary evidence annexed here, your kind honour will agree that there is no merit in the legal objection taken by the assessee."
3.6.1 Further, in another Remand Report dated 15.01.2001 submitted by the AO, the AO has given the comments based on the records in respect of all the points raised by the AR. The relevant portion of the Remand Report is reproduced as under:
"Kindly refer to your letter F. No.CJ1(A)-XI/2000-01/ dated 9.1.2001 on the subject dated above wherein you have requested to send the report/comments on the basis of the submissions made by the AR of the assessee, The para-wise comments are as I.T.A. No.6094/Del/2017 7 under:
Point No. 1 & 2: Return of income for the A.Y. 1998-99 was original, filed on 31.10,98 at an income of Rs, 55,00,000/- which was processed u/s 143(1)(a) on 30.11.98 creating a demand of Rs.. 19,75,186/-. The assessee Sh. Amrik Singh Saluja and his wife Smt. Surinder Kaur filed declaration under VDIS, 1997 for Rs.55,00,000/- and Rs.65,00,000/- respectively on 12.8.97 and subsequently a search u/s 37 of FERA was conducted on 15.8.97 at the residence in which cash of Rs. 1,18,00,0007- was seized from his possession. The declaration under VDIS, 97 was rejected as they failed to make the payment of tax within the stipulated period i.e. within 3 months. Both the assessees than filed the return u/s. 139(1) declaring Rs.55,00,000/-and Rs.65,00,000/- respectively and requested that the tax payable on the above income be recovered from the amount seized by Enforcement Directorate and the balance amount be refunded to him. His- request was not accepted by; the department and the demand was created u/s 143(1fa) amounting to Rs.19,75,186/-. The assesses filed writ petition for stay of demand which was rejected by the Hon'ble High Court. Subsequently the assessee has filed revised return declaring Rs. NIL income on 31.3.99.
The assessee in his submission stated that the assessment is illegal since it is based on an invalid return of income and also based on arbitrary procedures adopted- The A.O. at the time of assessment treated the revised return filed on 31.3.99 as invalid and therefore rejected the same on the ground that the revised return is rot on account of any omission or wrong statement. The return can be revised u/s 139(5) only if certain conditions have been satisfied. 11 has been held in the case of CIT vs. Radhayshyam (1980) 123 ITR 125 (Ail) that revised return can I.T.A. No.6094/Del/2017 8 be filed u/s 139(5) only if the assessee discovers any omission or- wrong statement in return originally filed. Hence the A.O. has rightly taken the decision of rejecting the revised return, [also include 4.1 or asstt. order).
"In the assessee's case return was filed subsequent to search under FERA. This return was revised on 31.3.99 after assessee's VDIS declaration was rejected by the deptt. In this case the revision is not on a/c of any omission or wrong statement. Therefore the assessee's revised return u/s 139(5) cannot be treated as a valid one and is therefore rejected".
Point No.3 & 4: The A.O. before finalizing the asst, has given the assessee ample opportunities. A show cause notice dated 23.2.2000 containing proposed additions was served upon him on 29.2,2000 asking him to file his objections within 5 days of receipts. Final notice dated 23.5.2000 was served upon him by affixture but he failed to comply with the same. He requested for further adjournment vide letter dated 25.5.2000. Since the assessee had already sought many adjournments, no further adjournment was granted. A draft order was also served upon the assessee outlining all the additions proposed to be made, so that he could file his objections to the same if any and would not subsequently make the plea that he was not apprised of the additions to be made. However, the assessee has not filed any reply to the same. Therefore it can be presumed that he has no objections to offer. From the above it is clear that the AO has - not made the asstt. arbitrarily, unjustly and unfairly and against the principles of natural justice.
Point no. 5 & 6: During the course of asstt. proceedings the assessee never come forward for finalizing the asstt, He either did not attend the proceedings or kept seeking adjournment.
I.T.A. No.6094/Del/2017 9Before your honour, he has stated that the framing of asstt, by the A.O. was under illegal directions of higher authorities. The A.O. has framed his asstt. on the basis of records and has given full opportunity to the assessee. Moreover, the draft order was also served upon the assessee so that he could fi I e his objections.
Point No. 7: During the course of asstt. proceedings, the seizure by the ED indicates that the assessee had abroad in Indian/Foreign Currency to different year 1997-93. The assessee was asked to explain the nature of these transactions and sources of payments but no reply has been received from him. The total expenditure in Indian rupees as per information collected from foreign exchange agents about the exchange rates prevailing on the dates of the transactions was correctly added back as unexplained expenditure by the A.O. Point no.8: The seized papers also indicated receipt of Rs. 2,03,000/- from Sh. Chauhan on 24.7.97 by the assessee. The assessee was asked to explain the above receipts, but assessee did not reply. The same was therefore correctly added back by the A.O, as his income from undisclosed sources.
Point No. 9: On the basis of the seized papers, the assessee was also required to furnish the documentary evidences on the education and expenses in respect of Sh. Rajiv Saluja who is studying in Australia, sh. Rajiv Saluja's expenses had been estimated at 37500 USD and also the expenditure on education of Jasbir Saluja, younger brother of Rajiv Saluja, studying in USA has been worked out at Rs. 40,000/- USD during the F. Y. 1997-98. No reply had been furnished by the assessee. The A.O. therefore has rightly added back u/s-69C Rs.27,66,750/-, after getting the information of convertible foreign exchange into I.T.A. No.6094/Del/2017 10 Indian rupees.
Point no. 10: The assessee was also asked to explain as to why the amounts credited to his bank account on different dates during the F.Y. 97-98 should not be treated as his income from undisclosed sources as no business activities were done during this period as per his statement dated 20.4,99. Since no reply has been received from the assessee the amount of Rs.1139659/- credited with State Bank of Rajas than and State Bank of Bikaner & Jaipur are rightly added back by the A.O. it is pertinent to mention that the joint account in the name of Rajiv Saluja & Amrik Singh Saluja at State Bank of Bikaner & Jaipur, Connaught Raoe, ND was mainly operated, by Sh Amrik Singh Saluja as per statement recorded by the ED- Hence, the amount so credited was taken as the income of Sh Amrik singh Saluja Point No. 11: The assessee, in his statement before the Enforcement Directorate had stated that he had invested in property No.181/189, Sainik Farm for his son Rajiv when he was a minor. The assessee was asked to furnish the details of investment in the above but no reply from the assessee was received. The A.O. rightly treated the rent of Rs.55,000/-per month received from the property No.181/189, Sainik Farm as his income.
Point No. 12 : Looking to the status of Sh. Amrik Singh Saluja who is residing in a posh colony, whose children are educated abroad, and who owns an imported car, his house hold expenses were therefore estimated by the A.O. at Rs.50,000/- per month, which is quite a reasonable estimate. A.O. has therefore correctly added back as Rs.6,00,000/- as assessee's unexplained expenditure u/s 69-C. I.T.A. No.6094/Del/2017 11 The assessee throughout the period of asstt. proceedings has adopted the negative attitude towards the department. Before your honour he has stated that the A.O. has merely relied upon loose papers seized by ED. When there is no cooperation from the assessee's side and no details asked for have been produced, the A.O. has to rely upon the records available with her. Further he stated that the A.O. has not been able to apply her mind due to certain directions from above, because of which she had not been able render justice. The fact is that the A.O. has given ample opportunity to the assessee and also given draft asstt. order for any object ions but the assessee requested for further time when it was in his knowledge that there is no time .left. The A.O. made the asstt. on the basis of records, seized papers. & statement recorded during the course of search and A.O. made the best efforts in finalizing asstts.
Point no. 13: The assessee in this point has requested for further time to make appropriate submission. The asstt. was made by the A.O. in a right manner. The assessee had two years of time after the search to make his submissions. However, if respected CIT feels that no proper opportunity was given, the same may now be allowed to the assessee.
Point No. 14: The asstt. order was finalized on 31.5.2000. However, tax computation was made on 1.6.200/- & notice of demand was also served on 1.6.2000. As this matter was not getting time barred around May'2000 (but is actually getting time barred only on 31.3.2001), it is immaterial whether the demand notice & computation sheet show the date as 31.5.2000 or 1.6.2000. In my opinion this inconsistency does not render the order illegal."
3.6.2 It is observed that in Para 14 of the Remand Report quoted I.T.A. No.6094/Del/2017 12 above, the AO has clarified the issue regarding the mismatch of dates on the assessment order and the notice of demand. As stated earlier, the AO has also admitted that the section 158BFA was wrongly mentioned and the interest was actually charged u/s 234B of the Act. In view of tins, the contention of the appellant that due to these discrepancies, the order of the AO should be quashed by holding that the AO has not applied her mind, cannot be accepted and is therefore, rejected.
3.7 The AR has also contended that one of the correspondence shows that there was a high powered committee which was monitoring the assessment proceedings in this case and therefore, the AO acted under the influence of this authority and has not applied her mind independently while framing the order. From the records, it is observed that the correspondence referred to by the AR is a letter written by ACIT, Inv. Circle- 15(1), Delhi to CIT-IX, Delhi on 19.05.1999 which appears to be a proposal for transfer of case from one AO to another by stating that a search was carried out in this case by Enforcement Directorate and a High Level Coordination Committee dealing with Economic Offences is monitoring the assessment proceedings. The AR has also requested that the assessment records may be called to verify his contention of interference by extraneous authorities in the assessment proceedings. Accordingly, the assessment records were called for from the AO (ITO, Ward-31(4), Delhi) and the same have been examined. A perusal of the records shows that there was a High Level Coordination Committee for interdepartmental coordination in cases involving gross economic offences. This committee constituted of senior officers of the Income Tax Department, CBI, DRI, Anti Corruption Bureau etc. This committee was monitoring not only the appellant's case but also various other I.T.A. No.6094/Del/2017 13 cases which involve action under various laws being taken by different government agencies. A perusal of the records also shows that the said committee was involved in coordination of joint efforts between various departments in cases involving gross economic offences under various laws (FERA, Prevention of corruption Act, Custom & Excise etc.). The committee was seeking report regarding the status of the pending proceedings before various agencies and is not seen to be directly involved in the decision making process or adjudication which was to be dealt by the respective departments/authorities themselves. It is further observed from the records that the status report regarding the sharing of evidence and recovery of outstanding arrears under various laws was being submitted to the committee for better coordination in such cases which involved gross economic offences under various laws as stated above. In fact, the constitution of the Committee shows that it was similar to the Regional Economic Intelligence Committees (REIC) which is mandated to ensure effective interaction and coordination among all the concerned agencies in the area of economic offences. It also functions as the clearing house of all economic intelligence and provides a platform for such exchange between various agencies within the Department of Revenue and other intelligence and enforcement agencies including IB, RAW, CBI etc. From these facts, it is very clear that the Committee was in no way influencing the decision making of the AO and the AO was in a position to take independent decision based on facts and evidence on record. Thus, the contention that the AO has not applied her mind independently is not proved and the same is therefore, rejected.
3.8 The AR has also contended that there are two assessment orders on file and in one of the order; someone has made the I.T.A. No.6094/Del/2017 14 correction which shows that the AO was being influenced to pass the assessment order in a particular manner. In this context, a perusal of the records shows that before finalization of the assessment order, a draft was prepared by the AO which has been corrected before issue of the final order. It is normal practice that draft orders are prepared and corrections are made before signing the final order. It is further observed that the hand writing in which the corrections have been made in the draft order appears to match with the hand writing of the AO on the order sheet. Thus, this contention of the AR also does not hold any ground and the same is rejected.
3.9 In the Remand Report dated 15.01.2001, in point 5 & 6, the AO has mentioned that the appellant did not file the complete details at the time of the assessment and was seeking frequent adjournments. It is further stated by the AO that the assessment was finalized on the basis of records and the appellant was given full opportunity and a draft order was also served upon the appellant so that he could file his objections to the additions proposed. In one of the written submissions made before my predecessor, the AR has denied the fact that the appellant was served with a draft order before the final order was issued. In this regard, a perusal of the assessment record shows that the AO had issued a 'Final Show Cause Notice containing proposed additions' on 23.05.2000 which contained all the issues (including the issue of making addition in respect of the rental income from the property at 89, Sainik Farms) on which additions were proposed and the appellant was required to file the reply on or before 26.05.2000. This notice was got served through affixture by the AO on 24.05.2000. In the Remand Report, the AO has mentioned 'draft order' instead of this final show cause notice issued by the AO as this notice contains all I.T.A. No.6094/Del/2017 15 the issues deliberated at the time of assessment. The appellant had not filed any response on these issues to the AO after issue of this notice. In view of these facts, the contention of the AR that draft order/show cause notice giving details of proposed additions was not served on the appellant is found to be without any basis and is rejected.
3.10 In one of the submissions, the AR has also submitted that, the assessment records be called and the appellant be given an opportunity to examine the same. In this regard, it is observed that the appellant has already inspected the assessment records and has obtained certified copies from the AO and the same have been filed during the course of appellate proceedings. In view of this, the appellant was not provided any opportunity to examine the records when the same were called during the course of appellate proceedings. Moreover, it is felt that the appellant could have approached the AO again in case he wanted to inspect the records again. Therefore, the request of the appellant has not been considered to this extent.
3.11 In view of the above discussion and facts, I am of the opinion that there is no evidence to show that the AO had not applied her mind while finalizing the assessment order or that she was influenced by some outside agency or the High Level Committee influenced her decision-making while she was finalizing the assessment order. The AR has not been able to prove his contentions as raised in ground no. 5 of the appeal. Accordingly, the contentions of the appellant are rejected and the said ground of appeal is dismissed."
5. Aggrieved by the impugned order of the CIT(A), the assessee preferred appeal before the Tribunal.
I.T.A. No.6094/Del/2017 166. None appeared for the assessee. It is seen from the record that multiple opportunities have been given to the assessee to attend the proceedings however the assessee has continued to remain absent. Accordingly having regard to the continued indolence shown, we are constraint to presume that the assessee is not interested in pursuing the appeal. Accordingly, the order is accorded ex-parte.
7. On perusal of the case records, we find that as per Ground No.5, the assessee has challenged the exercise of passing the impugned order as an eyewash and under the influence of external authority, i.e., Enforcement Directorate. It was alleged that the Assessing Officer has not applied its mind independently to determine the total income of the assessee. It was thus contended that the assessment order is null and void. The CIT(A) inter alia noticed that the certified copies of various documents were provided by the Assessing Officer to the assessee. The certified copies contain a correspondence on the basis of which it was alleged that the existence of high level co-ordination committee dealing with economic offences which was monitoring the assessment proceedings of the assessee. The CIT(A) thereby took note of the remand report submitted by the Assessing Officer wherein the comments were made based on the records in respect of the points raised by the assessee. After taking into account the remand report and analysis of factual position, the CIT(A) noted that there was a High Level Co-ordination Committee for interdepartmental co-ordination in cases involving gross economic offences. The committee constituted of senior officers of the Income Tax Department, CBI, DRI, Anti Corruption Bureau etc. It was noted that committee was seeking report regarding the status I.T.A. No.6094/Del/2017 17 of pending proceedings before various agencies and it is not seen to be directly involved in the decision making process or any interference in the adjudication of the issues involved. The CIT(A) in our view has taken note of the relevant facts and found that the Assessing Officer has applied its mind independently. Without reiterating the process reasoning adopted by the CIT(A), we find no perversity therein. In the absence of any rebuttal from assessee, we decline to interfere with the order of the CIT(A).
8. In the result, the appeal of the assessee is dismissed ex- parte.
Order pronounced in the open Court on 20/07/2022.
Sd/- Sd/-
[KUL BHARAT] [PRADIP KUMAR KEDIA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
DATED: /07/2022
Prabhat