Income Tax Appellate Tribunal - Ahmedabad
Smt. Kamini Hanskamal Grover vs Income Tax Officer on 24 January, 2005
Equivalent citations: (2005)95TTJ(AHD)363
ORDER
Rajpal Yadav, J.M.
1. The assessee is in appeal before us against the order of learned CIT(A)-VI, Surat, dt. 23rd Sept., 2003, passed for asst. yr. 1998-99. The assessee is impugning the order of learned first appellate authority on two counts; i.e., (i) CIT(A) has erred in confirming the action of AO for reopening the assessment under Section 147 of the Act; and (ii) the CIT(A) has erred in confirming the addition of Rs. 38,20,826 under Section 69A of the IT Act, 1961.
2. The brief facts of the case are that declaration under VDIS, 1997, was filed by the assessee, but she failed to pay tax on the income declared. Therefore, on the basis of assessee's declaration dt. 31st Dec., 1997, the learned AO found following unaccounted assets as owned by the assessee :
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Sl. No. Description of asset Value of asset
(Rs.)
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1. Gold and Diamond jewellery 12,78,675
2. Silvery articles and utensils 42,151
3. Cash withheld with M/s Sai Corporation, i.e., debt due 25,00,000
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38,20,826
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3. Since the assessee failed to pay tax on this voluntary disclosure of income, the AO assumed jurisdiction within the meaning of Clause (a) of Expln. 2 to Section 147 on the ground that income has escaped from assessment. Accordingly, he issued a notice under Section 148 of the Act which was served upon the assessee on 25th Feb., 2002. In response to the notice under Section 148, the assessee sought for extension of time and ultimately filed the return declaring NIL income. The learned AO thereafter issued notice under Section 142 as well as under Section 143(2) to the assessee. She (assessee) wrote a letter to him (AO) explaining that she has no information as if she filed any VDIS return, if so, kindly supply her a copy of such declaration. On her request, the AO supplied the copy of disclosure made by her. Subsequently, the assessee made submissions on merit and ultimately the learned AO determined the total taxable income at Rs. 38,20,826 against NIL income shown by the assessee and made these additions under Section 69A of the Act.
4. Dissatisfied with this addition, the assessee carried the matter in appeal before the CIT(A). Before the learned CIT(A), the assessee has challenged the validity of reopening of assessment as well as additions made on merit. During the course of hearing before the learned first appellate authority, a detailed affidavit sworn on 17th March, 2003, was filed. In this affidavit, the assessee has highlighted the circumstances which are responsible for such disclosure. In the affidavit, she disclosed that she is the second wife of Hanskamal Grover Hanskamal Grover was a notorious person who used to forge the signature; without assessee's knowledge, he has filed the alleged VDIS return on her behalf. She has never put her signature on that declaration. She further contended that her husband forged the signature of agriculturists and grabbed their land. He was arrested in PASA and remained in jail for six months. She enclosed the copy of arrest order along with her affidavit filed before the CIT(A). She has further disclosed in the affidavit that he has changed the order of Tribunal, Ahmedabad, by scoring out of some lines and overwriting it and for this forgery, a case was registered which was handed over to the CBI. His first wife, Smt. Ramadevi, filed a regular Suit No. 430 of 2000 on 8th day of his death for declaration that the assessee is not legally wedded wife of Hanskamal. She has challenged the decree of Court dt. 15th Nov., 1989 obtained by Shri Hanskamal by forging the signature of his first wife, Smt. Ramadevi. In this way, in her affidavit, she has disclosed 10-15 instances indicating as to how her husband has forged the signatures of other persons and has been facing civil as well as criminal proceedings. Relevant copies of the orders were also annexed. On the strength of these documents, it was contended that she has not signed the declaration. On the issue of reopening, it was contended before the learned CIT(A) that no income relevant to asst. yr. 1998-99 was disclosed in the VDIS declaration. Hence, no income escaped from assessment. Therefore, reopening is not justified. The learned first appellate authority briefly noticed these facts and spun down them. With regard to the allegation of the assessee that she has not filed the VDIS, the learned first appellate authority has observed that if her husband committed 10 wrongs, then that would not be sufficient for holding him guilty for committing the 11th wrong without thereof any concrete evidence. According to learned CIT(A), the assessee has failed to prove that the VDIS declaration was not signed by her. Similarly, the learned first appellate authority has confirmed the addition on merit.
5. Before us, learned counsel for the assessee, made three-fold submissions which are interlinked and inter-dependent of each other. He, firstly, reiterated her allegations levelled against husband of the assessee in the affidavit filed before the CIT(A) and whose copy is available at pp. 39 to 43 of the paper book. He took us through the contents of the affidavit and apprised us the circumstances responsible for the so-called VDIS declaration. Thereafter, Shri Rasesh Shah, learned counsel for the assessee, took us through the statement of Voluntary Disclosure of Income filed along with alleged VDIS declaration and available at p. 4 of the paper book. He contended that in this statement, no income relatable to asst. yr. 1998-99 was ever disclosed by the assessee. He, further took us through Section 147 of the IT Act and contended that expression "has reason to believe" employed in this section contemplates that before reopening of any assessment order, the AO should be satisfied with the assistance of some information or material that income chargeable to tax of that particular year has escaped assessment. If the material available with the AO is to be considered, then it will reveal that no information or material was available with the AO authorizing him to make an opinion that income chargeable to tax has escaped in asst. yr. 1998-99. In this connection, he specifically invited our attention towards the computation of income filed alongwith VDIS declaration and submitted that this is the only information available with the AO and in this information, income chargeable to tax in asst. yr. 1998-99 is nowhere discernible. Apart from this, the learned counsel for the assessee contended that the assessee has been filing her regular return at Ahmedabad and duly declared her PAN and ward number where she was regularly assessed. It is not understandable how the AO at Surat assumed the jurisdiction of deemed escapement while applying the provisions of Clause (a) of Expln. 2 appended with Section 147 of the Act.
6. On the other hand, the learned Departmental Representative relied upon the orders of Revenue authorities below.
7. We have duly considered the rival contentions. The AO started the investigation and gathered the information for reopening the assessment from the declaration made under VDIS. He, in fact, reopened the assessment with the aid of materials disclosed in such declaration. Hence, for adjudicating the controversy it is imperative upon us to take note of the computation of income filed along with the alleged VDIS. The same reads as under :
Kamini H. Grover Statement of Voluntarily Disclosed Income Amount of income declared (in figures and words) (Rs.) Assessment year(s) to which the income relates If the income is represented by cash (including bank deposits), jewellery, bullion, investment in shares, debts due form other persons commodities or any others assets. Remarks Description of Assets Name in which held Amount (Rs.) 2 3 4 5 6 7 1,278,675 (As on 1.4.87) Prior to A.Y. 1987-88 Gold & Diamond Jewellery Self 1,28,675 As per the valuation report of approved valuer 2,500,000 A.Y. 1987-88 to A.Y. 1997-98 Cash withheld with M/s Sai Corporation (Dipes Desai) as per the confession deed signed by Mr Dipesh Desai before Notary Public and police authorities, the copies of which are enclosed herewith. Hanskamal Grover(husband) As per the internal agreement with my husband through whom my funds were given to M/s Sai Corporation of which the actual ownership is mine. 2,500,000 Cash with held with m/s Sai Corporation (Dipesh Desai) as per the confession deed signed by Mr. Dipesh Desai before Notary Public and police authorities, the copies of which are enclosed herewith.
42,151 A.Y. 1998-99 Silver utensils Self 42,151 As per the valuation report of the approved valuer.
3,820,826 3,820,826
8. If the above informations are considered to have been taken into cognizance by the learned AO for invoking Section 147, then it reveals that with regard to accounting year relevant to asst. yr. 1998-99, no declaration was made by the assessee. If this is so, then it is not discernible as to how the learned AO prima facie believed that income has escaped assessment. Apart from other interdiction provided in the Section 148 to 153 for reopening of the assessment, we are satisfied that the AO was not having sufficient information in his possession which authorized him to believe that reasons are existing for reopening the assessment of asst. yr. 1998-99. Apart from this lapse, the assessee has demonstrated by filing her acknowledgement form available at pp. 1 to 6 of the paper book indicating the fact that the returns were filed at Ahmedabad, then as to how the learned AO assumed jurisdiction at Surat is also not discernible from the record. Therefore, in our opinion, the AO ought not to have reopened this assessment and we declare his order as null and void.
8.1. Before parting with the judgment, we would like to observe that the assessee has raised so many pleas relating to authenticity of declaration made by her. An affidavit to this effect filed before the CIT(A) was not analytically considered by the learned first appellate authority, nor its contents investigated. We have declared the assessment order as illegal purely on its legal infirmity by accepting the declaration true at its face value for the purpose of examining the issue of reopening only, and we are not expressing any opinion with regard to the genuineness of the declaration made by the assessee because sufficient material has not been placed before us nor adjudicated by the lower authorities. Therefore, this order will not impair or injure the AO's case or prejudice the defence or explanation of the assessee in any other proceedings, if taken.
9. With the above observation, the appeal of the assessee is allowed.