Income Tax Appellate Tribunal - Delhi
Jyoti Goyal, New Delhi vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'I' NEW DELHI)
BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER
AND
SHRI B.K. HALDAR, ACCOUNTANT MEMBER
I.T.A. No.1259/Del/2010
Assessment year : 2005-06
Smt. Jyoti Goyal, ITO,
C-2/16, Ashok Vihar, Ward-19 (2),
Phase-II, New Delhi. V. New Delhi.
(Appellant) (Respondent)
PAN /GIR/No.AEFPG
/GIR/No.AEFPG-
AEFPG-8035-
8035-G
Appellant by : Shri Ashwani Taneja &
Shri Tarun Kumar.
Respondent by : Shri Rohit Garg, Sr. DR.
ORDER
PER B.K. HALDAR, AM:
This is an appeal filed by the assessee against the order of Ld CIT(A)-XXII, New Delhi dated 12.2010 for assessment year 2005-06. The assessee has taken the following grounds of appeals:-
1. That having regard to the facts and circumstances of the case, the Ld CIT(A) has erred in law and on facts in confirming the action of the Ld Assessing Officer in passing the assessment order u/s 147/143(3) that too without serving the mandatory notice u/s 148 as per law, without obtaining valid approval as prescribed under the law, without recording valid reasons to believe that income has escaped assessment and without complying with the mandatory conditions as prescribed u/s 147 2 ITA No1259/Del/10 to 151 with regard to the reopening of the case u/s 147 and framing of the assessment u/s 147/143(3) thereto.
2. That having regard to the facts and circumstances of the case, the Ld CIT(A) has erred in law and on facts in confirming the action of Ld Assessing Officer in making an addition of `.1,01,000/- as income from unexplained source u/s 68 of the Income Tax Act, 1961 on account of gift received from Shri Ashok Bindal.
3. That in any case and in any view of the matter action of Ld CIT(A) in confirming the action of the Ld Assessing Officer in making an addition of `.1,01,000/- on account of gift received is illegal, unjustified bad in law and deserves to be quashed.
4.That having regard to the facts and circumstances of the case, Ld CIT(A) has erred in law and on facts in not reversing the action of Ld Assessing Officer in charging interest u/s 234A, 234B and 234C of the Income Tax Act, 1961.
5. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other."
2. The assessee filed return of income on 26.7.2005 declaring total income of `.1,63,748/-. The same was processed u/s 143(1) of the Act. Thereafter, information was received from DIT (Inv.I), New Delhi vide letter No, DIT (Inv.I)/2006-07/AE/1543 dated 5.2.2007 to the effect that the assessee had taken bogus accommodation entry amounting to `.1,01,000/- during the previous year under consideration. The 3 ITA No1259/Del/10 Assessing Officer, therefore, issued notice u/s 148 of the Act dated 13.3.2007 which was issued to the assessee through Speed Post dated 15.3.2007. The notice was also served by Notice Server on 29.3.2007. In response to the above notice, the assessee submitted that the return furnished on 26.7.2005 may be treated as return furnished in response to notice u/s 148 of the Act.
3. During the assessment proceedings, the Assessing Officer vide questionnaire dated 10.10.2007 required the assessee to file the copy of bank statement along with narration of each entry. The Assessing Officer also obtained a copy of bank statement of the assessee from the bankers. In the said bank statement, there were various deposits and the assessee was asked to explain the same, wherever required necessary confirmations were also asked for. As regards the amount of `.1,01,000/- received from Shri Ashok Bindal it was contended by the assessee that the same was a gift received from the said party vide cheque No.189768 dated 23.10.2004 drawn on Jaya Laxmi Cooperative Bank Ltd, Fatehpuri Branch, Delhi. The assessee also furnished a copy of affidavit, declaration of gift, income tax return acknowledgement for assessment year 2003-04, PAN No. in respect of Shri Ashok Bindal. The Assessing Officer, thereafter, issued summon u/s 131 of the Act dated 16,.11.2007 asking Shri Ashok Bindal to comply on 22.11.2007. However, the party did not appear. The Assessing Officer, therefore, required the assessee to produce Shri Ashok Bindal for cross verification. However, on the appointed date neither anybody attended on behalf of the assessee nor was the donor produced for examination. The assessee, however, sent a letter dated 29.11.2007 by Speed Post dated 08.12.2007 which was received by the Assessing Officer on 11.12.2007. The contents of the letter are reproduced hereunder:-
4 ITA No1259/Del/10 "In addition to our replies filed earlier, it is submitted that assessee has got copy of the bank statement of the donor which is enclosed. It is further submitted that assessee is trying to contact the donor to appear before your goodself and as soon as the assessee is able to persuade him, assessee would produce him. The assessee has got original gift deed also duly signed by the donor. Earlier photocopy of the gift deed unsigned from the donee's side and witness was filed. However, original document contained signature of donor and donee both and witness as well, a photocopy of such deed is again enclosed and it is requested that earlier copy may please be ignored as it was taken before the donee and witness could put his signature at the time of receiving the gift."
4. The Assessing Officer, thereafter, on the basis of evidence on record passed the assessment order on 12.12.2007. The Assessing Officer noted that the assessee did not indicate the relationship of the donor. If the donor was a stranger, the Assessing Officer opined that no reason has been adduced as to why he should part with his hard earned money. The bank statement of Shri Ashok Bindal was also not furnished by the assessee. The donor was never produced for examination. There was photocopy of gift deed which was not signed by the donor and witness and another photocopy of the deed furnished with the letter dated 29.11.2007 which had the signature of the two.
The affidavit of the donor was not an admissible evidence. Copy of I.T. return of assessment year 2005-06 of the donor was not furnished. Thus, the Assessing Officer observed that the source of gift has not been substantiated by the assessee. Even the occasion on which such gift was given to the assessee was not divulged by the assessee. In the 5 ITA No1259/Del/10 above facts and considering the various case laws which have been discussed by the Assessing Officer in the assessment order, the Assessing Officer did not accept the claim of the assessee that said amount of `.1,01,000/- was received by the assessee as gift from Shri Ashok Bindal. He, therefore, added the said amount as income of the assessee u/s 68 of the Act. The case laws relied on by the Assessing Officer were as under:-
1. Sajjan Dass & Sons v. CIT 264 ITR 435 (Del.).
2. CIT v. Korlay Trading Co. Ltd., 232 ITR 820 (Kol.).
3. Sudha Devi v. MP Narain (1988) w - SCJ 422.
4. Lal Chand v. CIT 22 CTR 135 (P&H).
5. CIT v. Durga Pd. More. 82 ITR 549 (SC).
6. Sumati Dayal vl CIT 214 ITR 801 (SC).
7. Yashpal Singh v. CIT 158 Taxman 306 (P&H).
5. Aggrieved, the assessee filed appeal before the Ld CIT(A).
6. Before the Ld CIT(A), the assessee challenged both validity of reopening of assessment as well as the justification of the addition of `.1,01,000/- u/s 68 of the Act.
7. With reference to validity of reopening of assessment u/s 147 of the Act, the following contention was raised by the assessee before the Ld CIT(A):-
1. There was no material on the basis of which the Assessing Officer could form a belief that income has escaped assessment.
The reasons recorded by the Assessing Officer for coming to such belief did not give any valid justification for reopening the assessment.
8. Reliance was placed on the following case laws:-
1. Ganga Saran & Sons Pvt. Ltd. V. ITO (1971) 82 ITR 29 (Cal.).
2. Y. Rajan v. ITO (1970) 839 (AP).
3. CIT v. Jeskaran Bhuvalka (1970) 76 ITR 128-140 (AP).
6 ITA No1259/Del/10
4. Muni Lal Ram Dayal v. ITO (1970) 76 ITR 151, 156 (Orissa).
5. S. Naraynappa v. CIT 63 ITR 219 (SC).
6. Dilip Chand Aggarwal v. ITO (1974) Tax LR 865 (Orissa).,
7. Phool Chand Bajrang Lal v. ITYO 203 ITR 456 (SC).
8. Indian Oil Corporation v. ITO 159 ITR 956, 970 (SC).
9. CIT v. Ram Lal Manohar Lal 158 ITR 9, 11 (Del.).
10.CIT v., Chand Ball Rice Mills P. Ltd. 203 ITR 368, 372 (Cal.).
11.CIT v,. Narender Nath Parveen Chand 101 ITR 7(Punj.).
12. CITv. Lakhmani Mewal Dass 103 ITR 437 (SC).
13.CIT v. Chugga Mal Raj Pal 79 ITR 603 (SC).
14. Sheo Nath Singh v. CIT 82 ITR 147 (SC).
15. CIT v. Pradeep Gupta in I.T.A. No.353/06 207 CTR 115(Del.).
9. With reference to the merit of addition of `.1,01,000/- it was submitted before the Ld CIT(A) that the assessee had furnished following evidence before the Assessing Officer:-
i) A copy of the letter to Assessing Officer in which it was explained that appellant received a gift of `.1,01,000/- from Shri Ashok Bindal.
ii) A copy of affidavit of Shri Bindal.
iii) A copy of PAN card of Mr. Bindal.
iv) A copy of return of Mr. Bindal to show that he was income tax
assessee.
v) A copy of another letter to Assessing Officer along with which
copy of bank statement of the donor and photocopy of the gift deed was filed.
vi) A copy of Gift Deed.
7 ITA No1259/Del/10
10. Thus, it was contended that the assessee had proved the identity of the donor and had also furnished necessary documents in support of the claim that the impugned amount was received as gift from the said party. It was further stated that the copy of statement of Shri Deepak Gupta recorded on 25.9.2004 in which Shri Gupta allegedly admitted that bank account of Shri Bindal was maintained and operated by him for providing bogus accommodation entry was never provided to the assessee and no opportunity to cross examine the said party was also provided. In the above facts, it was contended that the addition was not justified. Reliance was placed on the following case laws:-
1. DCIT v. Mayawati 113 TJ 178 (Del.).
2. DCIT v. Ramdeo Kumar Chitlangia 89 TTJ 346 (JD).
3. ITO v. Kailash Chand Bansal (Delhi Tribunal) 129 Taxman
10.
4. Asst. CIT v. Manoj Kumar Sekhri 142 Taxman 15 (ASR. Tribunal).
5. Nek Kumar v. Astt. CIT 191 CTR 207 (Raj.).
6. CIT v. R.S. Sibal 187 ITR 291 (Del.).
7. Jawahar Lal Oswal v. ACIT 71 ITD 324 (Chd.).
8. Sunita Vachani v. CIT 184 ITR 121 (Del.).
9. Rajpal Singh Sandhu v. ITO (I.T.A. No.3785/2004).
10.Govind Prasad v. ITO (I.T.A. NO. 4527/2004).
11. Meena Rastogi v. ACIT (I.T.A. No.5086/91).
12. Smt., Shanti Devi v. ITO 90 TTJ 651 (Agra).
13. ACIT v. Manoj Kumar Sekhri 86 TTJ 510 (Asr.).
11. The Ld CIT(A) noted that prior to reopening of assessment u/s 147 of the Act, only processing u/s 143(1) of the Act was done. The Assessing Officer, thereafter, received the information vide DIT (Inv.I), 8 ITA No1259/Del/10 New Delhi letter dated 15.2.2007. In the above facts, the ld CIT(A) opined that there was prima facie information available to the Assessing Officer on the basis of which action u/s 147 could validly be taken by the Assessing Officer. The Assessing Officer was not required to make further investigation before taking any action u/s 147 of the Act. Reliance was placed by him on the following case laws:-
1. 1. Phool Chand Bajrang Lal v. ITYO ((1993) 203 ITR 456 (SC). Sufficiency of reasons to reopen the case cannot be challenged.
2. Raymond Woollen Mills Ltd. v. ITO (1994) 236 ITR 34 (SC). Prima facie material to reopen, sufficiency of such material not a base for reopening.
3. Shivalika Cooperative Housing Ltd. v. ITO (2006) 101 ITD 391 (Del.).
4. ITO v. Smt. Gurinder Kaur (2006) 102 ITD 189 (Del.).
5. R. Dalmia v. Union of India (1972) 84 ITR 616, 619 (Del.).
6. MTNL v. Chairman CBDT (2000) 246 ITR 173 (Del.).
7. ACIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd. (2007) 291 ITR 500 (SC).
8. Consolidated Photo & Finvest Ltd. v. ACIT (2006) 281 ITR 394 (Del.).
9. ITO v. Shree Bajrang Commercial Co. (Pvt.) Ltd. (2004) 269 ITR 338 (Cal.).
10. Central Provinces Manganese Ore Co. Ltd. v. ITO (1991) 191 ITR 662 (SC).
12. The Ld CIT(A), therefore, upheld the validity of reopening of the assessment u/s 147 of the Act.
9 ITA No1259/Del/10
13. As regards the justification of addition, the Ld CIT(A) noted that the gift was given to the appellant through cheque on the same day on which a credit of equivalent amount was made in the account of the donor. The assessee also could not produce the donor for verification of the claim that the amount was indeed received as gift. The Ld CIT(A) opined that the papers/evidence furnished by the assessee were not sufficient to prove the genuineness of the transaction particularly when the donor was not presented before the Assessing Officer. Reliance was placed by him on the Hon'ble Punjab & Haryana High Court's judgment in the case of Tirath Ram Gupta v. CIT 304 ITR 145. The Ld CIT(A) opined that the jurisdictional High Court's decision in the case of Sajjan Dass & Sons (supra) was rightly applied by the Assessing Officer.
14. The Ld CIT(A) further held that the onus was on the assessee to establish that the donor had means and the gift was genuine. Reliance of the Assessing Officer on the following judgments was approved by the Ld CIT(A):-
1. Lal Chand Kalra v. CIT (1981) 22 CTR 135 (P&H).
2. CIT v. Durga Prasad More (1971) 82 ITR 540 (SC).
3. Sumati Dayal v. CIT (1995) 214 ITR 801 (SC).
4. Jaspal Singh v. CIT (2007) 158 Taxman 306 (P&H).
15. The Ld CIT(A), therefore, upheld the impugned addition of `.1,01,000/-. Aggrieved, the assessee has filed the appeal before the Tribunal.
16. Before us, the ld AR for the assessee in addition to submissions made before the authorities below, submitted that it could be seen 10 ITA No1259/Del/10 from the assessee's paper book page 9 that the reasons for reopening is in a cyclostyled form. From the same it could be concluded that the reopening was done by the Assessing Officer in a mechanical manner without proper application of mind. It was also argued by him that the facts and circumstances of the case would show that the satisfaction of the Assessing Officer was not of his own but merely a borrowed satisfaction of the Investigation Wing. In such circumstances, it was contended by him that the reopening of assessment u/s 147 of the Act has to be considered as invalid. Reliance was placed by him on the following case laws:-
1. Signature Hotels Pvt. Ltd. v. ITO Writ Petition No.8067/ 2010 dated 21st July, 2011 (Delhi High Court).
2. CIT v. Atul Jain 299 ITR 383 (Del.).
3. CIT v. Smt. Paramjit Kaur 311 ITR 38 (P&H).
4. CIT v. Indian Sugar & Gen. Industries Export & Import Corporation Ltd. 170 Taxman 229.
17. The Ld AR for the assessee referred us to the reasons recorded by the Assessing Officer in the present case and the reasons recorded by the Assessing Officer in the case of Signature Hotels (supra). It was contended by him that the two appear to be almost identical. Placing reliance on para 12 to 15 of the judgment of Hon'ble jurisdictional High Court in the case of Signature Hotels (supra), it was contended by him that the reopening of assessment u/s 148 may be considered as invalid.
18. The Ld DR, on the other hand, in addition to relying on the orders of the authorities below submitted that in the case at hand the information on the basis of which the case was reopened was not vague information. Thus, it was contended by him that the ratio of
11 ITA No1259/Del/10 Signature Hotels (supra) is not applicable in the facts of the present case. Placing reliance on page 8 & 9 of the Ld CIT(A)'s order, it was further contended by him that sufficiency of information cannot be gone into for deciding the issue of reopening of assessment. The Assessing Officer also cannot make any enquiry before reopening the assessment as that would amount to roving enquiry. It was submitted by him that there was prima facie evidence before the Assessing Officer on the basis of which it could be held by him that there was escapement of income. As only processing u/s 143(1) was done prior to the reopening of the assessment, it was contended by him that there is no question of change of opinion. The reopening was also not done mechanically. Mere recording of reasons in the cyclostyled form would not lead to the conclusion that the reopening was done in a mechanically manner. It was, thus, contended by him that the assessment was validly reopened by the Assessing Officer and the same was rightly confirmed by the Ld CIT(A).
19. We have heard the parties and perused the record. We have also gone through the case laws cited by both the sides. In the present case, the assessee has nowhere raised a contention that the statement of Shri Deepak Gupta which is available on assessee's paper book pages 27-31 (certified translated copy of which was furnished) was not available with the Assessing Officer before the case was reopened by him. In this view of the matter, we are of the considered opinion that the ratio laid down by the Hon'ble jurisdictional High Court in the case of Signature Hotels (supra) is not applicable in the facts of the present case. As regards the other contentions of the assessee that the reopening was done in a mechanical manner without application of mind, we find there is nothing on record to support such a contention. The reopening was also not done on account of change of opinion as 12 ITA No1259/Del/10 prior to reopening of the assessment the case was only processed u/s 143(1) of the Act. There is a live link between the information which was available with the Assessing Officer and his formation of belief that income has escaped assessment. Sufficiency of such information cannot be gone into while deciding the issue of validity of reopening. The Assessing Officer also cannot make any enquiry as no proceedings were pending before him for the relevant assessment year. In the above view of the matter, we are in agreement with the finding of the Ld CIT(A) that the reopening of assessment u/s 147 of the Act was valid. Thus, ground No.1 taken by the assessee is rejected.
20. As regards the ground taken with reference to addition of `.1,01,000/- on merit, the ld AR for the assessee in addition to reiterating the submissions made before the authorities below, submitted that the assessee was not aware of the statement of Shri Deepak Gupta during the assessment proceedings. It was contended that it could be seen from assessee's paper book pages 32, the statement was supplied by the Assessing Officer as per his letter dated 17.12.2007. Before the ld CIT(A), the assessee contended that the assessee may be given an opportunity to cross examine Shri Deepak Gupta. This is evident from assessee's paper book pages 62-63. However, no such opportunity was allowed to the assessee by the Ld CIT(A). It was contended that as the assessee has discharged its primary onus, it was for the revenue to establish that indeed the amount could be assessed as income of the assessee. In such circumstances, it was submitted that it was obligatory on the part of the revenue to allow the assessee cross examination of Shri Deepak Gupta. In support of the above contention following case laws were relied on:-
1. CIT v. Ahswani Gupta 322 ITR 396 (Del.) 13 ITA No1259/Del/10
2. CIT v. Anupam Kapoor, 299 ITR 179 (P&H).
21. It was also contended that the provision of section 68 was not applicable in the facts of the case in so far as the amount was not credited in the books of accounts of the assessee. Reliance was placed on the following case laws:-
1. Jwaharlal Oswal v. ACIT 71 ITD 324 (Chd.).
2. Ms. Mayawati v. DCIT 113 TTJ 178 (Del.).
3. CIT v. Taj Borewalls 291 ITR 232 (Mad.).
22. The Ld DR, on the other hand, in addition to relying on the orders of the authorities below submitted that in the present case, what is disputed is the genuinity of the gift. The case laws relied on by the Ld AR are not on the issue of gift. It was submitted that the case laws relied on by the Assessing Officer and the Ld CIT(A) were related to gift and thus the concurrent finding of the authorities below should be confirmed. It was pointed out by him that the onus that lay on the assessee in case of a gift was not discharged by the assessee and thus the same never shifted to the Assessing Officer. In such circumstances, it was contended by him/ that the submissions made by the Ld AR for the assessee are not applicable in the facts and circumstances of the present case.
23. We have heard the parties and perused the record. We have also gone through the case laws relied on by both the sides.
24. The facts of the present case are as under. The assessee contended that she had received an amount of `.1,01,000/- as gift from Shri Ashok Bindal by cheque dated 23.10.2004. In support of the above contention, the assessee furnished copy of gift deed which was not signed by the donor as well as the witness, the affidavit of the donor, copy of PAN card of the donor, copy of acknowledgement of filing of the return of the donor for assessment year 2003-04 with the return of 14 ITA No1259/Del/10 income. Such return of income was processed u/s 143(1) of the Act. Subsequently, information was received from DIT (Inv.I), New Delhi on 5.2.2007 to the effect that the assessee had taken bogus accommodation entry amounting to `.1,01,000/- during the previous year under consideration. The case was reopened on the basis of above information and during the assessment proceedings, the assessee was required to produce Shri Ashok Bindal for examination as the summon issued u/s 131 of the Act to the said party was not complied with. The assessee did not comply on the next date of hearing i.e. 29.11.2007. The assessee vide letter dated 29.11.2007 which was sent by Speed post dated 8.12.2007 furnished photo copy of gift deed which was signed by donee, donor and the witness as well as copy of bank account of Shri Bindal. The Assessing Officer on the basis of the evidence on record completed the assessment. In the said assessment order, the Assessing Officer made mention of the statement of Shri Deepak Gupta taken by Investigation Wing on 25.9.2004, a copy of which was enclosed with the assessment order. It was claimed by the assessee that the said statement was not received by her along with the assessment order and the Assessing Officer send the same to her as per his letter dated 17.12.2007. During the appellate proceedings before the Ld CIT(A), the assessee sought opportunity to cross examine Shri Deepak Gupta. The Ld CIT(A), did not consider such claim of the assessee in his appellate order.
25. In the above facts, it is for us to decide as to whether the addition of the impugned amount should be decided by us on merit by taking into account the facts on record or the assessee should be given a further opportunity to produce the donor before the Assessing Officer as well as the opportunity to cross examine Shri Deepak Gupta. Taking into consideration the facts that the case was reopened by issue of notice u/s 148 of the Act dated 13.3.2007 and the assessment was 15 ITA No1259/Del/10 completed on 12.12.2007 and the fact that the revenue has not produced any evidence that the statement of Shri Deepak Gupta was confronted to the assessee during the assessment proceedings, we deem it fit to set aside the orders of the authorities below on this issue and remit the matter back to the file of the Assessing Officer with the direction that the assessee be given further opportunity to produce Shri Ashok Bindal and the assessee should also be given opportunity to cross examine Shri Deepak Gupta. A fresh order be passed as per law after complying with above directions of ours and giving the assessee adequate opportunity of being heard. Thus ground No.2 and 3 taken by the assessee is allowed to the extent mentioned above.
26. As regards ground No.4, on charging of interest u/s 234A, 234B & 234C, nothing has been argued by the Ld AR for the assessee before us. Thus, this ground is not adjudicated by us.
27. In the result, the appeal filed by the assessee is allowed in part.
28. Order pronounced in the open court on the 25th day of October, 2011.
Sd/- Sd/- (U.B.S. BEDI) (B.K. HALDAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dt. 25.10.2011. HMS Copy forwarded to:- 1. The appellant 2. The respondent 3. The CIT 4. The CIT (A)-, New Delhi.
5. The DR, ITAT, Loknayak Bhawan, Khan Market, New Delhi.
True copy.
By Order (ITAT, New Delhi).
16 ITA No1259/Del/10
Date of hearing 15.9.2011
Date of Dictation 24.10.2011
Date of order signed by the .10.2011
Hon'ble" Member.
Date of order Sent to the .10.2011
concerned Bench