Income Tax Appellate Tribunal - Chennai
Shri S. M. Sakthivel, Salem vs Assessee on 21 July, 2014
आयकर अपील य अ धकरण, 'ए' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, CHENNAI
डॉ. ओ.के. नारायणन, उपा य एवं ी वकास अव थी, या यक सद य के सम
BEFORE Dr. O.K. NARAYANAN, VICE PRESIDENT &
SHRI VIKAS AWASTHY, JUDICIAL MEMBER
I.T.A. Nos. 132 & 133 /Mds/2014
Assessment Years : 2000-01 & 2001-02
Shri S.M.Sakthivel, Income Tax Officer,
No.311, E.B.Colony, Ward-I(2),
Mohanur, Vs Namakkal
Namakkal Dist.,
[PAN: AVTPS 3045 B]
(अपीलाथ /Appellant) ( यथ /Respondent)
अपीलाथ क ओर से / Appellant by : Shri T.S.Lakshmivenkataraman, FCA
यथ क ओर से / Respondent by : Shri Pramod Nangia, CIT
सन
ु वाई क तार ख / Date of hearing : 20-05-2014
घोषणा क तार ख / Date of Pronouncement : 21-07-2014
आदे श / O R D E R
PER VIKAS AWASTHY, J.M:
The appeals have been filed by the assessee impugning the orders of the Commissioner of Income Tax(Appeals), Salem relevant to the Assessment Years (AYs) 2000-01 & 2001-02, both dated 31-10-2013.
2. The facts in brief as emanating from the records are : 2 I.T.A. Nos. 132 & 133/Mds/14
A survey operation u/s.133A of the Income Tax Act, 1961 (herein after referred to as 'the Act') was conducted at the residence cum business premises of the assessee on 10-01-2003. The assessee along with other persons was carrying on the business of sand quarrying. A sworn statement of the assessee was recorded on 30-01-2003, wherein he admitted that the net income from the sand quarry business was `69,09,200/- and he has 2.5% share in the said income. This fact was supported by the documents and notings impounded by the Department during the survey. For the AY.2000-01, the assessee had not filed any return of income and notice u/s.148 of the Act was issued to the assessee on 18-04- 2005. Another notice u/s.142(1) was also served on the assessee on 03-06-2005. Thereafter, several letters were issued to the assessee to file the return of income and furnish details. The assessee neither furnished the details as called for, nor filed return of income. Thus, the Assessing Officer was constrained to make 'Best Judgment' assessment u/s.144 r.w.s.147 of the Act. The Assessing Officer vide order dt.29-12-2006, for AY.2000-01 assessed the total income of the assessee from un-explained sources as `11,16,510/-.3 I.T.A. Nos. 132 & 133/Mds/14
Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(Appeals), challenging the jurisdiction of Assessing Officer to initiate re-assessment proceedings u/s.147 beyond four years without seeking approval from competent authority. The assessee also assailed the additions made in assessment order. The CIT(Appeals) vide impugned order summarily rejected the submissions of the assessee challenging re-assessment proceedings. However, on merits, the CIT(Appeals) partly allowed the appeal of the assessee.
3. In respect of AY.2001-02, the assessee filed return of income on 19-12-2007 declaring income of `71,520/-. Assessment u/s.143(3) was completed on 28-12-2007. However, in the course of survey u/s.133A, it transpired that the assessee had earned income from sand quarry business which had escaped assessment. Accordingly, notice u/s.148 of the Act was issued to the assessee. The Assessing Officer vide order dt.28-12-2007 u/s.143(3) r.w.s.147 made certain additions in the income returned by the assessee.
The assessee preferred an appeal before the CIT(Appeals) against the assessment order dt.28-12-2007 challenging 4 I.T.A. Nos. 132 & 133/Mds/14 re-opening of assessment, as well as additions made in the income returned by the assessee. The CIT(Appeals) upheld the validity of re-opening proceedings but deleted some of the additions made by the Assessing Officer.
Now, the assessee has come in second appeal before the Tribunal assailing the orders of the CIT(Appeals) for both the AYs.
4. Shri T.S.Lakshmivenkataraman, appearing on behalf of the assessee submitted that in the AY.2000-01, re-assessment proceedings have been initiated after the expiry of four years from the end of relevant AY. The Assessing Officer has not taken sanction from competent authority for initiating re-assessment proceedings. Therefore, the assessment is bad in law. The CIT(Appeals) in appellate proceedings has not properly adjudicated the issue of re-opening of assessment. The important legal issue raised by the assessee regarding serving of notice u/s.148 without complying with the provisions of section 151 has not been answered by the CIT(Appeals). As regards the addition of `5,96,434/- u/s.69 of the Act, the ld.AR submitted that the Assessing Officer has taken the closing capital on 31-03-2002 as `21,33,304/-, whereas a perusal of statement of affairs as on 5 I.T.A. Nos. 132 & 133/Mds/14 31-03-2002 clearly show that the capital as on 31-03-2002 was only `9,87,990/-.
5. In respect of AY.2001-02, the ld.AR contended that the addition u/s.69 of the Act as un-explained investment in construction of residential house has been made merely on the basis of findings given in the assessment orders relevant to the AY.2000-01 which is already under appeal.
Apart from the above, no other issue was raised by the ld.AR of the assessee from the grounds of appeal.
6. On the other hand, Shri Pramod Nangia, appearing on behalf of the Revenue vehemently supported the orders of the CIT(Appeals) for both the AYs. The ld.DR further contended that for issuing notice u/s.148, proper procedure has been followed. The ld.DR made alternative submission that, in AY.2000-01, the assessee has not filed return of income, where no return has been filed, the provisions of section 151 will not be applicable. Thus, no sanction is required to be taken for initiating re-assessment proceedings.
6 I.T.A. Nos. 132 & 133/Mds/14
7. We have heard the submissions made by the representatives of both the sides and have perused the orders of the authorities below. A perusal of the impugned order for the AY.2000-01 shows, that the findings of the CIT(Appeals) on the issue of re-opening of assessment u/s.147 are sketchy and are therefore, not sustainable. The CIT(Appeals) has only mentioned that the Assessing Officer has followed the due process of law. The CIT(Appeals) has neither discussed about the validity of re- assessment nor he has given the details of approval for issuance of notice u/s.148. The proviso to sub-section(1) of section 151 clearly states that, after the expiry of four years from the end of the relevant AY, no notice u/s.148 shall be issued unless the Chief Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for issue of such notice. Therefore, the argument of the ld.DR that no sanction is required u/s.151, in case no return has been filed, is not tenable. It is an un-disputed fact that in AY.2000-01, re-assessment proceedings have been initiated against the assessee after the expiry of four years. In such circumstances, it was essential for the Assessing Officer to seek sanction from the competent authority before issue of notice u/s.148. After perusal of impugned order and assessment order for the AY.2000-01, we find that, vital 7 I.T.A. Nos. 132 & 133/Mds/14 information with respect to approval from competent authority for re-opening assessment after expiry of four years is not forth coming. The said information is necessary to adjudicate the validity of re-assessment proceedings. In the backdrop of aforesaid facts, we deem it appropriate to remit the case back to the Assessing Officer, to give complete details of the approvals for re-opening of the assessment for AY.2000-01.
8. In both the AYs, the assessee has assailed the findings of the CIT(Appeals) on the issue of confirming addition u/s.69 of the Act. The ld.AR has placed on record a photo copy of Statement of Affairs for the period starting from 01-04-2001 to 31-03-2002. As per the statement, Capital as on 31-03-2002 is `9,87,790/-. The CIT(Appeals) in his order has mentioned that the assessee had not produced any document before the Assessing Officer for verification. We deem it appropriate to remit this issue back to the Assessing Officer for proper appreciation of facts and to verify the opening and closing balances from the books of accounts maintained by the assessee. The Assessing Officer shall also ascertain the veracity of the financial statements of the assessee before recording his findings. The assessee is directed to produce all relevant records before the Assessing Officer for the AYs.2000- 8 I.T.A. Nos. 132 & 133/Mds/14 01, and AY.2001-02. The Assessing Officer shall decide this issue afresh, in accordance with law.
In the result, both the appeals of the assessee are partly allowed for statistical purpose.
Order pronounced on Monday, the 21st July, 2014 at Chennai.
Sd/- Sd/-
(डॉ. ओ.के. नारायणन) ( वकास अव थी)
(Dr. O.K. NARAYANAN) (VIKAS AWASTHY)
उपा य /VICE PRESIDENT या यक सद य/JUDICIAL MEMBER
चे नई/Chennai,
दनांक/Dated: 21st July, 2014
TNMM
आदे श क त ल प अ े षत/Copy to:
1. अपीलाथ /Appellant 2. यथ /Respondent
3. आयकर आयु त (अपील)/CIT(A) 4. आयकर आयु त/CIT
5. वभागीय त न ध/DR 6. गाड फाईल/GF