Income Tax Appellate Tribunal - Jaipur
Smt. Prabhati Devi Meena , Jaipur vs Income Tax Officer, Ward-7-4, Jaipur on 26 February, 2020
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IN THE INCOME TAX APPELLATE TRIBUNAL,
JAIPUR BENCH 'A', JAIPUR
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Before : Shri Vijay Pal Rao, JM & Shri Vikram Singh Yadav, AM
vk;dj vihy la-@ITA No. 1283/JP/2018
fu/kZkj.k o"kZ@Assessment Year : 2009-10
Smt. Prabhati Devi Meena cuke The ITO
W/o late Shri Ram Dhan Meena Vs. Ward- 7(4)
Village & Post: Harwar, Tehsil: Amer Jaipur
Distt. Jaipur (Raj)
LFkk;h ys[kk la-@thvkbZvkj la-@ PAN/GIR No.: CMHPP 1163 J
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri R.N. Sharma, Advocate
jktLo dh vksj ls@ Revenue by : Ms. Chanchal Meena, JCIT-DR
lquokbZ dh rkjh[k@ Date of Hearing : 25/02/2020
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 26 /02/2020
vkns'k@ ORDER
PER VIJAY PAL RAO, JM
This appeal by the assessee is directed against the order of ld.
CIT(A)-3, Jaipur dated 11-09-2018 for the Assessment Year 2009-10.
The assessee has raised the following grounds.
''1.1 The impugned order u/s 143(3)/147 dated 10-03-2015 is bad in law and on facts of the case for want of jurisdiction, bared by limitation and various other reasons and hence the same may kindly be quashed.
2 ITA No.1283/JP/2018Smt. Prabhati Devi Meena vs ITO , Ward- 7(4), Jaipur 1.2 The action taken u/s 147 is bad in law and on facts of the case for want of jurisdiction and various other reasons and hence the same may kindly be quashed.
1.3 The AO has erred in passing the assessment order without providing adequate and reasonable opportunity of being heard and without confronting the material gathered in the gross breach of law. Hence, the assessment order so made and consequent additions so made may kindly be quashed and deleted.
2. Rs.7,00,000/-: The AO has grossly erred in law as well as on the facts of the case in making the addition of Rs. 7,00,000/- on account of cash deposited in her bank as a income from other sources while amount deposited was not an income from other sources income as per IT Act. Thus the AO has erred in taxing the income from other sources. Hence, the addition so made by the AO without considering the true facts and legal position is totally contrary to the provisions of law and facts. Hence, the same may kindly be deleted in full.
3. The AO erred in law as well as on the facts of the case in charging interest u/s 234B, 234C and 234D as consequential in nature. The appellant totally denies liability of charging of any such interest. Hence, the interest so charged, being contrary to the provisions of law and facts, may kindly be deleted in full.'' 2.1 The only issue arises in this appeal by the assessee is whether the AO had jurisdiction to make the addition of Rs. 7.00 lacs on account of unexplained cash deposit in the bank account when no addition was made by the AO in the reassessment proceedings on the issue for which assessment was reopened.
2.2 We have heard the ld.AR as well as the ld. DR and considered the relevant materials available on record. The assessee is an agriculturist and shown the agriculture income during the year under consideration. On the 3 ITA No.1283/JP/2018 Smt. Prabhati Devi Meena vs ITO , Ward- 7(4), Jaipur basis of the information regarding sale of land, the AO reopened the assessment by recording the reasons as under:-
''Name of the Assessee : Smt. Prabhati
W/o late Shri Ramdhan
Village:Harvar,Tehsil:Amer, Jaipur
Assessment Year : 2009-10
Status : Individual
Reasons to belief for reopening u/s 147of the I.T. Act, 1961 As per information received from Director of Income Tax (Inv), Jaipur vide letter No.DIT(Inv.)/ ITO(CRU)/Jaipur/2012-1/3231 dated 22-03-2013, a common land of Kajod, Prabahati, Ramdhan, Hari Narayan, situated at village-Harvar,Tehsil-Amer, Jaipur sold on02-08-2008 through registered documents with Sub-Registrar, Amer at Rs. 1,11,000/-. Out of this the assessee has 1/3rd share i.e. 37,000/-. Another land located at Village-Harver, Tehsil-Amer also sold by the assessee on 02-08-2008 at sale consideration Rs. 23,72,000/- and 23,72,000/- and got registered with Sub Registrar Amer on 02-08-2008. Thus the assessee has received total sale consideration Rs. 47,81,000/-( 37,000 +23,72,000+23,72,000). As per location, the land situated within the municipal limits of Jaipur Nagar Nigam and ascertained as capital asset. Thus the sale consideration in the meaning of sec 48 will be taken at Rs. 47,81,000/-.
As per record of this office, no return has been filed by the assessee for the A.Y. 2009-10.
I haven therefore, reason to believe that as the assessee has apparently not disclosed the income extent to Rs. 47,81,000/- for the A.Y. 2009-10 which is escaped assessment of income in the meaning of u/s 147of the Income Tax Act, 1961 for the A.Y. 2009-10.'' Dated 08-11-2013 Sd/-
(P.K..Kalyania) Income Tax Officer Ward- 7(3), Jaipur '' Thus it is clear that that the AO has reopened the assessment to assess the proposed income arising from sale of land. During the assessment 4 ITA No.1283/JP/2018 Smt. Prabhati Devi Meena vs ITO , Ward- 7(4), Jaipur proceeding, the AO conducted enquiry and after ascertaining the facts that the lands in question are situated beyond 8 KM from Jaipur Municipal Limit and no addition or assessment was made on account of sale of land. To this effect, the AO has given his findings at page 2 of his order as under:-
''rglhynkj] rglhy&vkesj us vius i= dzekad 321 fnukad 06-02- 2015 ds }kjk fu/kkZfjrh }kjk fodz; dh xbZ d`f"k Hkwfe ftuds [kljs u- 811]812]814]815]853]854] 855] 856] 858] 860] 861] 862] 882 vkSj 883 dks rglhynkj] vkesj }kjk izekf.kr djrs gq, fjikVZ is'k dh fd mijksDr [kljs u- uxj fuxe t;iqj dh lhek ls 8 fdyksehVj ds ckgj fLFkr gSA bl fjiksVZ ds vk/kkj ij fu/kkZfjrh }kjk fodz; dh xbZ d`f"k Hkwfe;ksa ij iwWthxr ykHk vftZr ugha gksrk gSA ''' Thereafter, the AO has come to conclusion that no income on account of sale of land has escaped assessment. The AO then take up the issue of deposit of Rs. 7.00 lacs in the bank account of the assessee on 4-08-2008 and made the addition of the said amount of Rs. 7.00 lacs. The ld.AR of the assessee has relied on various judgments on this issue including the judgment of Hon'ble Bombay High Court in the case of CIT vs Jet Airways (I) Ltd 331, ITR 236 as well as the judgement of Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs CIT 351 ITR 23. 5 ITA No.1283/JP/2018
Smt. Prabhati Devi Meena vs ITO , Ward- 7(4), Jaipur Once the AO in the reassessment proceedings was satisfied that no income has escaped assessment on account of sale of land then the AO cannot assume jurisdiction to make other addition by invoking the Explanation 3 to Section 147 of the Act as held by Hon'ble Bombay High Court in the case of CIT vs Jet Airways (I) Ltd (supra) in para 15 and 21 to 23 as under:-
''15. The Shorter Oxford Dictionary defines the expression "also" to mean 'further, in addition, besides, too'. The word has been treated as being relative and conjunctive. Evidently, therefore, what Parliament intends by use of the words "and also" is that the AO, upon the formation of a reason to believe under s. 147 and the issuance of a notice under s. 148(2) must assess or reassess : (i) 'such income'; and also (ii) any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. The words 'such income' refer to the income chargeable to tax which has escaped assessment and in respect of which the AO has formed a reason to believe that it has escaped assessment. Hence, the language which has been used by Parliament is indicative of the position that the assessment or reassessment must be in respect of the income in respect of which he has formed a reason to believe that it has escaped assessment and also in respect of any other income which comes to his notice subsequently during the course of the proceedings as having escaped assessment. If the income, the escapement of which was the basis of the formation of the reason to believe is not assessed or reassessed, it would not be open to the AO to independently assess only that income which comes to" his notice subsequently in the course of the proceedings under the section as having escaped assessment. If upon the issuance of a notice under s. 148(2), the AO accepts the objections of the assessee and does not assess or reassess the income which was the basis of the notice, it would not be open to him to assess income under some other issue independently. Parliament when it enacted the provisions of s. 147 w.e.f. 1st April, 1989 clearly stipulated that the AO has to assess or reassess the income which he had reason to believe had escaped assessment and also any other income chargeable to tax which came to his notice during the proceedings. In the absence of the assessment or reassessment of the former, he cannot independently assess the latter.6 ITA No.1283/JP/2018
Smt. Prabhati Devi Meena vs ITO , Ward- 7(4), Jaipur
21. Explanation 3 lifts the embargo, which was inserted by judicial interpretation, on the making of an assessment or reassessment on grounds other than those on the basis of which a notice was issued under s. 148 setting out the reasons for the belief that income had escaped assessment. Those judicial decisions had held that when the assessment was sought to be reopened on the ground that income had escaped assessment on a certain issue, the AO could not make an assessment or reassessment on another issue which came to his notice during the proceedings. This interpretation will no longer hold the field after the insertion of Expln. 3 by the Finance Act (No. 2) of 2009. However, Expln. 3 does not and cannot override the necessity of fulfilling the conditions set out in the substantive part of s. 147. An Explanation to a statutory provision is intended to explain its contents and cannot be construed to override it or render the substance and core nugatory.
Sec. 147 has this effect that the AO has to assess or reassess the income ("such income") which escaped assessment and which was the basis of the formation of belief and if he does so, he can also assess or reassess any other income which has escaped assessment and which, comes to his notice during the course of the proceedings. However, if after issuing a notice under s. 148, he accepted the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment, has as a matter of fact not escaped assessment, it is not open to him independently to assess some other income. If he intends to do so, a fresh notice under s. 148 would be necessary, the legality of which would be tested in the event of a challenge by the assessee.
22. We have approached the issue of interpretation that has arisen for decision in these appeals, both as a matter of first principle, based on the language used in s. 147(1) and on the basis of the precedent on the subject. We agree with the submissions which has been urged on behalf of the assessee that s. 147(1) as it stands postulates that upon the formation of a reason to believe that income chargeable to tax has escaped assessment for any assessment year, the AO may assess or reassess such income "and also" any other income chargeable to tax which comes to his notice subsequently during the proceedings as having escaped assessment. The words "and also" are used in a cumulative and conjunctive sense. To read these words as being in the alternative would be to rewrite the language used by Parliament. Our view has been supported by the background which led to the insertion of Expln. 3 to s.
147. Parliament must be regarded as being aware of the interpretation that was placed on the words "and also" by the Rajasthan High Court in Shri Ram Singh (supra). Parliament has not taken away the basis of that decision. While it is open to Parliament, having regard to the plenitude of its legislative powers to do so, the provisions of s. 147(1) as they stood after the amendment of 1st April, 1989 continue to hold the field.
7 ITA No.1283/JP/2018Smt. Prabhati Devi Meena vs ITO , Ward- 7(4), Jaipur
23. In that view of the matter and for the reasons that we have indicated, we do not regard the decision of the Tribunal in the present case as being in error. The question of law shall, accordingly, stand answered against the Revenue and in favour of the assessee. The appeal is, accordingly, dismissed. There shall be no order as to costs.'' Therefore, once the AO was satisfied on the issue on which the assessment was reopened that there is no escapement of assessment then he cannot proceed further to take up some other item of income and make the addition. It transpires from the record that the assessee had received a sum of Rs. 47.81 lacs as sale consideration from the sale of land vide sale deed dated 02-08-2008 and an amount of Rs. 7.00 lacs was found deposited on 4-08-2008 in the her bank account. Therefore, these facts itself are self-explanatory about the source of deposit of said amount of Rs. 7.00 lacs, though during the course of assessment proceedings, the assessee claimed that the source of deposit is agricultural income and past savings. However, once the sale consideration itself is sufficient source of deposit then the addition made by the AO in reassessment proceedings after dropping the issue on which the assessment was reopened is not sustainable in law. Hence, the addition of Rs. 7.00 lacs made by the AO is deleted.
8 ITA No.1283/JP/2018Smt. Prabhati Devi Meena vs ITO , Ward- 7(4), Jaipur 3.0 In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 26 /02/2020.
Sd/- Sd/-
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(Vikram Singh Yadav) (Vijay Pal Rao)
ys[kk lnL;@ Accountant Member U;kf;d lnL;@Judicial Member
Tk;iqj@Jaipur
fnukad@Dated:- 26/02/ 2020
*Mishra
vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1vihykFkhZ@The Appellant- Smt. Prabhati Devi Meena, Jaipur 2izR;FkhZ@ The Respondent- ITO, Ward- 7(4), Jaipur
3. vk;dj vk;qDr¼vihy ) @ CIT(A),
4. vk;dj vk;qDr@ CIT,
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No. 1283/JP/2018) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar