Income Tax Appellate Tribunal - Delhi
Jyoti Foundation, New Delhi vs Assessee on 24 August, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: 'D' NEW DELHI
BEFORE SHRI G.D. AGRAWAL, HON'BLE VICE-PRESIDENT AND
SHRI I.C.SUDHIR, JUDICIAL MEMBER
I.T.A. NO. 1896/Del/2012
Assessment Year: 2006-07
M/s Jyoti Foundation, Director of Income Tax
A-1/1, Rajouri Garden Vs. (Exemptions)
New Delhi Delhi
PAN: AAATJ0166G
(APPELLANT) (RESPONDENT)
Appellant by: Shri Salil Aggrawal, Adv. & Others.
Respondent by: Mrs. Renu Jauhri, CIT(DR)
Hearing on: 27/06/2012
Order Pronounced on the Date: 24.08.2012
ORDER
PER I.C.SUDHIR, JM:
The appellant / assessee trust as questioned the validity of revisional order u/s 263 of the Act passed on 30.3.2012 on several grounds:
1. "That order u/s 263 of the Act dated 30.3.2012 by learned Director of Income Tax (Exemptions) Delhi has been made without satisfying the statutory preconditions contained in the Act and is therefore without jurisdiction and thus, deserves to be quashed as such.
1.1 That finding of the learned Director of Income Tax (Exemptions) that order of assessment u/s 147/143(3) dated 8.6.2009 was framed in hurried and casual 2 ITA NO.1896/Del/2012 manner, without application of mind and without making proper enquiries is factually incorrect, contrary to record and therefore unsustainable.
1.2 That further finding that, order of assessment dated 8.6.2009 is erroneous and prejudicial to the interest of revenue as the entire consideration as per bayana receipt dated 4.10.2005 has not been brought to tax is also based on factual misconception and misinterpretation of provisions of law and thus, unsustainable.
1.3. That the learned Director of Income Tax (Exemptions) has failed to appreciate that once the learned Assessing Officer on examination of the facts on record and after making all possible enquiries had accepted that declared consideration, then such an order of assessment could not be regarded as erroneous in as much as prejudicial to the interest of revenue merely because the learned Director of Income Tax (Exemptions) had a different opinion and that too, without having established in any manner that, view adopted by the learned Assessing Officer was an impossible view.
1.4 That the learned Director of Income Tax (Exemptions) has overlooked the reply to show cause notice and material on record and as such order made mechanically and with a premeditated opinion is vitiated and, not in accordance with law.
1.5 That further the learned Director of Income Tax (Exemptions) has also failed to appreciate that, u/s 263 of the Act, an order of assessment cannot be set aside to simply to make further enquiries and thereafter pass fresh order of assessment and as such, impugned order is contrary to law and hence, unsustainable.
1.6 That learned Director of Income Tax (Exemptions) has failed to appreciate that bayana receipt had been signed by the complainant Sh. Jayant Pandey and not by the appellant trust and as such there was no material which 3 ITA NO.1896/Del/2012 could enable the learned Director of Income Tax (Exemptions) to regard order of assessment an erroneous and prejudicial to interest of revenue.
1.7 That the learned Director of Income Tax (Exemptions) has otherwise also failed to appreciate that appellant trust was a charitable trust and as such, even assuming though the same is seriously disputed that, any income was not assessed to tax then too no lawful tax was omitted to be charged since entire income was eligible for exemption.
1.8 That findings recorded by the learned Director of Income Tax (Exemptions) otherwise contradictory in as much as on one hand he held that entire consideration as per bayana receipt dated 4.10.2005 has not been brought to tax and on the other hand, he held that order of assessment is set-
aside with directions to the learned Assessing Officer, Trust Ward-IV, New Delhi to make enquiry from Sh.
Jayant Pandey and obtain the original bayana receipt at the time of examination of various persons and bring it to the notice of the purchaser as the signatures is apparently same and conduct other enquiries to arrive at proper conclusion on the veracity of bayana receipt, in question and pass a fresh assessment in accordance with law after due opportunity of hearing of the assessee. This alone is sufficient to establish that, impugned order is a vitiated order."
The relevant facts are that in its return of income the assessee had declared 'Nil' Income and assessment was also framed at 'Nil' Income. Subsequently it came to the notice of the AO that assessee had sold land situated in village Nangli, Sakarawati, Delhi for a consideration of Rs.84 lacs, whereas the assessee had declared the sale consideration at Rs.16 lacs only in its return of income. The case was reopened u/s 147 of the Act and the assessment was framed u/s 143 (3) / 147 on 8.6.2009 at 'Nil' Income. The Ld. Director of Income Tax (Exemption) invoking the provisions of Section 263 of the Act, has held that the assessment framed u/s 147 / 143 (3) is erroneous and prejudicial to the interest of revenue. The Ld. Director of Income Tax 4 ITA NO.1896/Del/2012 (Exemption) has set aside the assessment order with direction to the AO to make inquiry from Shri. Jayant Pandey and obtain the original 'Bayana receipt' and to conduct other inquiries to arrive at proper conclusion on the veracity of 'Bayana receipt' in question and pass a fresh assessment in accordance with law after affording due opportunity of hearing to the assessee's. This action of the Ld. Director of Income Tax (Exemption) has been questioned by the assessee before the Tribunal.
2. We have heard and considered the arguments advanced by the parties in view of orders of the authorities below and the decisions relied upon by them.
3. The Ld. AR submitted that the AO has framed assessment u/s 147 / 143(3) dated 8.6.2009 in question on examination of the facts on record and after making all possible inquiries. Thus such assessment order could not be treated as erroneous in as much as prejudicial to the interest of revenue merely because the Ld. Director of Income Tax (Exemption) [DIT (E)] was having different opinion. He submitted that it is not the case of DIT (E) that view adopted by the Assessing Officer was an impossible view. The Ld. DIT (E) has also failed to appreciate that u/s 263 an order of assessment cannot be set aside simply to make further inquiries and there after pass fresh order of assessment. The Ld. AR pointed out that the Ld. DIT (E) has failed to appreciate that assessee is a charitable trust and as such even assuming though the same is seriously disputed that any income was not assessed to tax, then too no lawful tax was omitted to be charged since entire income 5 ITA NO.1896/Del/2012 was eligible for exemption. The AO had examined buyer and seller both and had also issued summons to Shri Jayant Pandey, the complainant but the Inspector reported that Shri Pandey, was not available at the given address. Thus all the possible inquiries were conducted by the AO before framing the assessment in question. Shri Jayant Pandey, who in his complaint had alleged that the property i.e. Plot No. B-32 area 2000 sq. yard in village Nangli, Sakarwati, Delhi owned by the assessee was agreed to be sold to Shri Rajesh Gupta and Alka Gupta for Rs.84 lac @ Rs.4200 per sq. yard but the documentation was made for Rs.16 lac only, had later on deposed on affidavit dated 1.3.2012 sent to the department that due to difference with management of Jyoti Manav Seva Sansthan Hospital on due salary payment he had filed several complaint against the assessee and Shri Jagjyoti Jain to the Income Tax Department, Police etc. on the basis of some documents which were not true copies of actual transaction of sale of land by Shri Jagjyoti Jain / Jyoti Foundation. In the said affidavit he had deposed that he has now resolved his salary dispute with the trust Manager Jagjyoti Jain by receiving mutually agreed amount in full and final discharge off all his claims. The Ld. AR referred page nos. 118 to 120 of the paper book i.e. show cause notice issued u/s 263 to the assessee, wherein there is reference of affidavit dated 1.3.2012 of Shri Jayant Pandey. It has been further stated 6 ITA NO.1896/Del/2012 in the said show cause notice that Shri Jayant Pandey was confronted with his affidavit and he has clearly stated that several documents were forcibly got signed by Mr. Jagjyoti Jain and Associates including the fake application addressed to Income Tax Officer. Nowhere it is mentioned as to who confronted Shri Jayant Pandey and when he was confronted. The Ld. AR referred page nos. 22 to 112 of the paper book i.e. the copies of documents filed by the assessee before the authorities below in support of its claim. The Ld. AR submitted that both the parties i.e. buyer and seller have denied their signatures on the 'Bayana receipt' furnished by the complainant Shri Pandey. He also informed that no addition u/s 69 of the Act has been made in the case of the buyer. The Ld. AR thus questioned the finding of the Ld.DIT (E) that the assessment order in question is erroneous and prejudicial to the interest of revenue. He placed reliance on the following decisions:
i) CIT Vs. Leisure Wear Exports Ltd. (2011) 11 Taxmann.com 54 (Delhi).
ii) CIT Vs. Sunbeam Auto Ltd (2010) 189 Taxman 436 (Delhi).
iii) Vodafone Essar South Ltd. Vs. CIT (2011) 141 TTJ 84 (Delhi).
iv) Roshan Lal Vegetable Products Pvt. Ltd. Vs. ITO (2012) 18 Taxmann. Com 295 (Asr.),
v) CIT Ved Prakash Choudhari (2008) 305 ITR 245 (Delhi).
vi) ITO Vs. D.G. Housing Project (2012) 20 Taxman. Com 587 (Del).7 ITA NO.1896/Del/2012
4. The Ld. CIT - DR on the other hand tried to justify the revisional order impugned. Reiterated the finding of the Ld. DIT (E) that both the buyer and seller are interested persons hence their statements that the property was sold on the declared amount of Rs.16 lac only and not for Rs.84 lac as reported, cannot be relied upon. He placed reliance on the following decisions:
i) S. Monika Vs. ITO 123 ITD 235 (Chennai).
ii) CIT Vs. Jagdish Chand Gupta (2010) 329 ITR 583 (P&H).
iii) Dr. Ravindra Kumar Singh Vs. CIT (2011) 136 TTJ 336 (Ranchi).
iv) CIT Vs. Sunil Goyal (2009) 176 Taxmann 184 (Uttar).
5. Considering the above submission we find that the Ld. DIT (E) has held the assessment order in question as erroneous and prejudicial to the interests of revenue only on the basis that the AO should have made further inquiry on Shri Jayant Pandey, the complainant who had produced a copy of 'Bayana receipt' before the Department claiming that the property in question was actually sold by the assessee trust to Shri Rajesh Gupta and Smt. Alka Gupta for Rs.84 lac against the shown consideration by the assessee at Rs.16 lac only. While setting aside the assessment order the Ld. DIT (E) has directed the AO to make inquiry from Shri Jayant Pandey and obtained the original 'Bayana receipt' and conduct other inquiries to arrive 8 ITA NO.1896/Del/2012 at proper conclusion on the veracity of 'Bayana receipt' and pass a fresh assessment in accordance with law after affording due opportunity of hearing to the assessee. On the other hand we find from the assessment order in question that the AO had examined both the seller i.e. assessee trust and the buyers Shri Rajesh Gupta and Smt. Alka Gupta who have affirmed the sale consideration at Rs.16 lac. The AO had also issued summons to the complainant Shri Jayant Pandey but he could not be served with the summons since the Inspector reported that Shri Pandey was not available on the given address. Under this fact when fresh address was not available with the AO, the AO was having no option but to frame the assessment on the issue on the basis of material available on record. It is not the case of the Ld. DIT (E) that despite having known the availability of Shri Pandey on some fresh address the AO did not bother to secure his presence to examine the veracity of his complaint and the 'Bayana receipt' filed by him. It also appears from the paper book filed under certificate of the assessee that all the relevant documents relating to the transactions were filed by the assessee before the AO along with copy of minute books of the trust for F.Y. 2005-06 in which Shri Jayant Pandey (The then administrator of the Hospital run by the assessee), the complainant was also one of the attendants in which sale of property for Rs.16 lacs by trust was approved. Copy of SB account of the 9 ITA NO.1896/Del/2012 assessee with Syndicate Bank New Delhi was also filed. The assessee had also filed before the A.O. the copies of the agreements to sale of two comparable sale instances of the land to prove that the sale consideration received by the assessee is at market rate. Under these circumstances we are of the view that the Ld. DIT (E) was not justified in coming to the conclusion that the AO had not made proper inquiries to examine the claimed transaction on the declared consideration before framing the assessment and in holding the assessment as erroneous and prejudicial to the interests of revenue. We thus while setting aside the revisional order impugned restore the assessment order passed u/s 147 / 143 (3) of the Act. The aforecited decisions relied upon by the Ld. DR are having distinguishable facts, hence are not helpful to the revenue. In the case of Dr. Ravindra Kumar Singh Vs. CIT (Supra) relied upon by Ld. DR search seizure operations were carried on by the Department leading to recovery of incriminating material, it was held that it was incumbent upon Assessing Officer to collect relevant information not only from assessee but from all concern agencies. Likewise in the case of CIT Vs. Sunil Goel (Supra) relied upon by Ld. DR the Assessing Officer had not duly verified the sundry creditors. Similarly in the case of CIT Vs. Jagdish Chand Gupta (Supra) relied upon by the Ld. DR the Hon'ble Punjab & Haryana High Court has 10 ITA NO.1896/Del/2012 justified the invocation of Section 263 of the Act, since the A.O. therein had failed to tax cash seized and later surrendered by the assessee. In the present case before us as discussed above, requisite inquiries was however made by the A.O. on the issue of receipt of consideration against the land sold, hence assessment order was not erroneous. The only grievance of the Ld. DIT (E) against the assessment order in the present case remained that the A.O. should have gone deeper in the matter whereas the A.O. had already made the requisite inquiries by examining the buyers and sellers, considering the submissions made by the assessee and confronted the 'Bayana receipt' furnished to the department with the assessee. The complainant Shri Pandey, was also summoned but he was not found available on the given address as reported by the Inspector of the Department. Under almost similar facts in the case of CIT Vs. Leisure Wear Exports Ltd. (Supra) the Hon'ble jurisdictional Delhi High Court has been pleased to hold that where the assessment order has been passed by the Assessing Officer after taking into account the assessee's submissions and documents furnished by him and no material whatsoever has been brought on record by the Commissioner which showed that there was any discrepancy or falsity in evidences furnished by the assessee, the order of the Assessing Officer cannot be set aside for making deep inquiry only on the presumption and assumption that 11 ITA NO.1896/Del/2012 something new may come out. Similarly in the case of CIT Vs. Sunbeam Auto Ltd. (Supra) the Hon'ble Delhi High Court has been pleased to hold that making an inadequate enquiry by an Assessing Officer by itself will not give occasion to Commissioner to pass order u/s 263 mainly because he has different opinion in matters, it is only in case of lack of inquiry that such a course of action would be open. The grounds involving the issue regarding the validity of the revisional order passed under Section 263 of the Act, are thus allowed.
6. In result appeal is allowed.
7. Orders pronounced in the open Court on 24/08/2012.
Sd/- Sd/-
( G.D.AGRAWAL ) (I.C.SUDHIR)
VICE-PRESIDENT JUDICIAL MEMBER
Dated: 24/08/2012
*AK VERMA*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR