Dr. K.M.Dwivedi,, Farrukhabad v. ITO,Ward-2, Farrukhabad

ITA 73/AGR/2009 | 2003-2004
Pronouncement Date: 26-02-2010 | Result: Allowed

Appeal Details

RSA Number 7320314 RSA 2009
Assessee PAN ADKPD5201H
Bench Agra
Appeal Number ITA 73/AGR/2009
Duration Of Justice 11 month(s) 24 day(s)
Appellant Dr. K.M.Dwivedi,, Farrukhabad
Respondent ITO,Ward-2, Farrukhabad
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 26-02-2010
Date Of Final Hearing 21-01-2010
Next Hearing Date 21-01-2010
Assessment Year 2003-2004
Appeal Filed On 04-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH SMC AGRA BEFORE SHRI P.K. BANSAL ACCOUNTANT MEMBER ITA NOS.74 75 & 73/AGR/2009 ASST. YEARS: 2001-02 2002-03 & 2003-04 DR. K.M. DWIVEDI VS. INCOME-TAX OFFICER WARD 2 AVAS VIKAS COLONY FARRUKHABAD. FARRUKHABAD. (PAN : ADKPD 5201 H) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PANKAJ GARGH ADVOCATE RESPONDENT BY : SHRI R.C. SHARMA JR. D.R. ORDER THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAIN ST THREE SEPARATE ORDERS OF THE CIT(A) ALL DATED 31.12.2008 FOR THE ASSESSMENT YEARS 2001- 02 2002-03 & 2003-04 RESPECTIVELY. 2. SINCE THE GROUNDS TAKEN ARE COMMON FOR ALL THE T HREE ASSESSMENT YEARS (A.Y.) GROUNDS RAISED IN ITA NO.74/AGR/2009 FOR A.Y. 2001-02 ARE R EPRODUCED AS UNDER :- (1) BECAUSE THE PROCEEDINGS INITIATED U/S 147 OF T HE INCOME TAX ACT SOLELY ON THE BASIS OF THE REPORT OF VALUATION OFFICER ARE WR ONG ILLEGAL ARBITRARY AND WITHOUT JURISDICTION. THE ASSESSMENTS IS THEREFORE LIABLE TO BE ANNULLED. (2) BECAUSE THE LD. CIT(A) HAS ERRED IN REJECTING T HE APPELLANTS GROUND CHALLENGING THE REOPENING OF ASSESSMENT U/S 147 OF THE INCOME TAX ACT BY TREATING THE VALUATION REPORT TO BE MATERIAL FOR HA VING BONAFIDE REASON OF BELIEF FOR REOPENING WHEREAS VALUATION REPORT IS ONLY AN E STIMATE. THE REOPENING ON ESTIMATE IS BAD IN LAW AND THE ENTIRE ASSESSMENT MA DE U/S 148 OF THE INCOME TAX ACT DESERVERS TO BE CANCELLED. (3) BECAUSE THE PROCEEDINGS INITIATED U/S 147 OF T HE INCOME TAX ACT ARE WRONG AND ILLEGAL ALSO ON THE GROUND THAT REFERENCE TO THE VALUATION OFFICER FOR THE VALUATION OF PROPERTY BELONGING TO THE APPELLA NT WAS MADE WHEN NO PROCEEDINGS UNDER THE INCOME TAX ACT FOR ANY OF THE YEAR WERE PENDING. 2 (4) BECAUSE WITHOUT PREJUDICE TO THE GROUNDS AS MEN TIONED ABOVE AT S. NO.1 TO 3 THE REASSESSMENT AND THE ADDITION MADE ON THE BASIS OF VALUATION REPORT IS WRONG AND ILLEGAL ALSO ON THE GROUND THAT THE APPEL LANT MADE SEPARATE INVESTMENT IN THE PROPERTY BELONGING TO HIM WHEREAS THE ASSESS ING OFFICER HAS NOT OBTAINED SEPARATE VALUATION REPORT FOR THE YEAR UNDER CONSID ERATION. THE VALUATION REPORT DATED 30-11-2007 IS FOR FIVE YEARS AND IS BASED ON ESTIMATE. THERE WAS NOTHING ON RECORD TO WORK OUT THE CONSTRUCTION OF EACH YEAR . 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSM ENT HAS BEEN REOPENED BY THE ASSESSING OFFICER (A.O.) UNDER SECTION 148 OF THE INCOME TAX ACT 1961 (THE ACT HEREINAFTER) FOR ALL THE THREE ASSESSMENT YEARS. THE ASSESSEE HAS SUBMITTED THE ORIGINAL RETURN SHOWING THE INCOME OF RS.1 56 192/- FOR THE A.Y. 2001-02 RS.1 06 689/- F OR THE A.Y. 2002-03 AND RS.1 06 290/-FOR THE A.Y. 2003-04 SHOWING THE AGRICULTURAL INCOME AT RS. 1 50 000/- RS.20 000/- & RS.20 000/- RESPECTIVELY. A SURVEY UNDER SECTION 133A WAS COND UCTED ON 06.03.2003 IN ASSESSEES WIFES CASE. IN CONSEQUENCE THEREOF ASSESSEES WIFES HO SPITAL BUILDING WAS REFERRED TO THE VALUATION CELL ON 16.09.2004. THE ORIGINAL RETURN WAS FILED BY THE ASSESSEE ON 27.07.2001 FOR THE A.Y. 2001-02 ON 30.07.2002 FOR THE A.Y. 2002-03 AND ON 12.01.2004 FOR THE A.Y. 2003-04. THE VALUATION OFFICER SENT THE VALUATION REPORT DATED 0 4.01.2005. THE VALUATION REPORT IS FOR THE CONSTRUCTION PERIOD UPTO THE YEAR 2004. THE A.O. S ENT A LETTER TO THE VALUATION OFFICER ON 21.12.2005 FOR FURNISHING VALUATION REPORT FOR EACH PORTION BELONGING TO SMT. NEERJA DWIVEDI AND THE ASSESSEE. NOTICE UNDER SECTION 148 OF THE ACT WAS SERVED ON THE ASSESSEE DATED 13.03.2007 ON 14.03.2007 BY RECORDING THE FOLLOWING REASONS :- ASSESSMENT YEAR 2001-02 REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASS ESSMENT: A SURVEY U/S 133A OF THE I.T. ACT 1961 WAS CONDUCTE D ON 06.03.2003 IN THE CASE OF ASSESSEE SMT. NEERJA DWIVEDI PROP. M/S. V.S. MEMORI AL HOSPITAL AWAS VIKAS FARRUKHABAD. A STATEMENT OF SMT. NEERJA DWIVEDI WAS RECORDED IN WH ICH SHE STATED THAT HOSPITAL BUILDING HAS BEEN CONSTRUCTED ON TWO PLOTS ONE PLOT BELONGS TO HER AND OTHER BELONGS TO HER HUSBAND DR. K. M. DWIVEDI. TO ASCERTAIN CORRECT VALUE OF BUILDING THE CASE WAS REFERRED TO THE VALUATION OFFICER AGRA WHO SUBMITTED HIS REPORT ON 04.01.200 5. THERE IS HUGE DIFFERENCE BETWEEN THE 3 VALUE SHOWN IN THE VALUATION REPORT FURNISHED BY TH E VALUATION OFFICER AGRA AND INVESTMENT DECLARED BY THE ASSESSEE BEFORE VALUATION OFFICER. THE DETAILS ARE AS UNDER :- F.Y. A.Y. VALUE AS PER VALUATION OFFICER INVESTMENT DECLARED BY THE ASSESSEE BEFORE VALUATION OFFICER VALUE DECLARED IN RETURN DIFFERENCE 2000-2001 2001-2002 RS.4 42 863 RS.2 97 338 RS.NIL RS.4 42 863 THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR TH E A.Y. 2001-2002 ON 27.07.2001 IN WHICH HE HAS NOT DISCLOSED ANY DETAIL IN RESPECT OF INVESTMENT IN PROPERTY. IN VIEW OF THE ABOVE FACTS IT IS CLEAR THAT ASSESS EE SMT. NEERJA DWIVEDI HAS MADE UNEXPLAINED INVESTMENT IN THE PROPERTY AMOUNTING TO RS.4 42 863 DURING THE F.Y. 2000-2001 RELEVANT TO ASSESSMENT YEAR 2001-2002. THEREFORE I HAVE REASONS TO BELIEVE THAT THE ASSESSEE HAS ESCAPED ASSESSMENT AMOUNTING TO RS.4 42 863/-. PROCEEDINGS U/S 147 IS BEING INITIATED AND A NOTICE U/S 148 IS BEING ISSUED. SD/- (P.P. JAISWAL) INCOME TAX OFFICER WARD-2 FARRUKHABAD. ASSESSMENT YEAR 2002-03 REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASS ESSMENT: A SURVEY U/S 133A OF THE I.T. ACT 1961 WAS CONDUCTE D ON 06.03.2003 IN THE CASE OF ASSESSEE SMT. NEERJA DWIVEDI PROP. M/S. V.S. MEMORI AL HOSPITAL AWAS VIKAS FARRUKHABAD. A STATEMENT OF SMT. NEERJA DWIVEDI WAS RECORDED IN WH ICH SHE STATED THAT HOSPITAL BUILDING HAS BEEN CONSTRUCTED ON TWO PLOTS ONE PLOT BELONGS TO HER AND OTHER BELONGS TO HER HUSBAND DR. K. M. DWIVEDI. TO ASCERTAIN CORRECT VALUE OF BUILDING THE CASE WAS REFERRED TO THE VALUATION OFFICER AGRA WHO SUBMITTED HIS REPORT ON 04.01.200 5. THERE IS HUGE DIFFERENCE BETWEEN THE VALUE SHOWN IN THE VALUATION REPORT FURNISHED BY TH E VALUATION OFFICER AGRA AND INVESTMENT DECLARED BY THE ASSESSEE BEFORE VALUATION OFFICER. THE DETAILS ARE AS UNDER :- F.Y. A.Y. VALUE AS PER VALUATION OFFICER INVESTMENT DECLARED BY THE ASSESSEE BEFORE VALUATION OFFICER VALUE DECLARED IN RETURN DIFFERENCE 2001-2002 2002-2003 RS.13 28 666 RS.8 92 065 RS.NIL RS.13 28 666 THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR TH E A.Y. 2002-2003 ON 30.07.2002 IN WHICH HE HAS NOT DISCLOSED ANY DETAIL IN RESPECT OF INVESTMENT IN PROPERTY. 4 IN VIEW OF THE ABOVE FACTS IT IS CLEAR THAT ASSESS EE SMT. NEERJA DWIVEDI HAS MADE UNEXPLAINED INVESTMENT IN THE PROPERTY AMOUNTING TO RS.13 28 666/- DURING THE F.Y. 2001-2002 RELEVANT TO ASSESSMENT YEAR 2002-2003. THEREFORE I HAVE REASONS TO BELIEVE THAT THE ASSESSEE HAS ESCAPED ASSESSMENT AMOUNTING TO RS.13 28 666/-. PROCEEDINGS U/S 147 IS BEING INITIATED AND A NOTICE U/S 148 IS BEING ISSUED. SD/- (P.P. JAISWAL) INCOME TAX OFFICER WARD-2 FARRUKHABAD. ASSESSMENT YEAR 2003-04 REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASS ESSMENT: A SURVEY U/S 133A OF THE I.T. ACT 1961 WAS CONDUCTE D ON 06.03.2003 IN THE CASE OF ASSESSEE SMT. NEERJA DWIVEDI PROP. M/S. V.S. MEMORI AL HOSPITAL AWAS VIKAS FARRUKHABAD. A STATEMENT OF SMT. NEERJA DWIVEDI WAS RECORDED IN WH ICH SHE STATED THAT HOSPITAL BUILDING HAS BEEN CONSTRUCTED ON TWO PLOTS ONE PLOT BELONGS TO HER AND OTHER BELONGS TO HER HUSBAND DR. K. M. DWIVEDI. TO ASCERTAIN CORRECT VALUE OF BUILDING THE CASE WAS REFERRED TO THE VALUATION OFFICER AGRA WHO SUBMITTED HIS REPORT ON 04.01.200 5. THERE IS HUGE DIFFERENCE BETWEEN THE VALUE SHOWN IN THE VALUATION REPORT FURNISHED BY TH E VALUATION OFFICER AGRA AND INVESTMENT DECLARED BY THE ASSESSEE BEFORE VALUATION OFFICER. THE DETAILS ARE AS UNDER :- F.Y. A.Y. VALUE AS PER VALUATION OFFICER INVESTMENT DECLARED BY THE ASSESSEE BEFORE VALUATION OFFICER VALUE DECLARED IN RETURN DIFFERENCE 2002-2003 2003-2004 RS.4 03 395 RS.1 02 600 RS.1 02 600 RS.3 00 795 THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR TH E A.Y. 2003-2004 ON 08.01.2004 IN WHICH HE HAS NOT DISCLOSED ANY DETAIL IN RESPECT OF INVESTMENT IN PROPERTY. IN VIEW OF THE ABOVE FACTS IT IS CLEAR THAT ASSESS EE SMT. NEERJA DWIVEDI HAS MADE UNEXPLAINED INVESTMENT IN THE PROPERTY AMOUNTING TO RS.3 00 795/- DURING THE F.Y. 2002-2003 RELEVANT TO ASSESSMENT YEAR 2003-2004. THEREFORE I HAVE REASONS TO BELIEVE THAT THE ASSESSEE HAS ESCAPED ASSESSMENT AMOUNTING TO RS.3 00 795/-. PROCEEDINGS U/S 147 IS BEING INITIATED AND A NOTICE U/S 148 IS BEING ISSUED. SD/- (P.P. JAISWAL) INCOME TAX OFFICER WARD-2 FARRUKHABAD. 5 4. ULTIMATELY THE ASSESSMENT WAS COMPLETED BY THE A .O. IN THE A.Y. 2001-02 VIDE ORDER DATED 11.12.2007 BY MAKING AN ADDITION OF RS.1 45 5 25/- FOR THE A.Y. 2002-03 ON 11.12.2007 BY MAKING AN ADDITION OF RS.3 14 514/- AND FOR THE A.Y. 2003-04 ON 11.12.2007 BY MAKING AN ADDITION OF RS.49 953/-. THE ASSESSEE BEFORE ME CH ALLENGED THE INITIATION OF THE PROCEEDINGS UNDER SECTION 147 OF THE ACT AND CONTENDED THAT THE REASONS RECORDED DO NOT RELATE TO THE ASSESSEE. THE REASONS STATES THAT SMT. NEERJA DWIV EDI HAS MADE UNEXPLAINED INVESTMENTS IN THE PROPERTY. SINCE THE REASONS DO NOT BELONG TO THE A SSESSEE THE PROCEEDINGS INITIATED UNDER SECTION 147 ARE INVALID AND VOID AB INITIO. ON MERITS ALSO IT WAS CONTENDED THAT THERE WAS NO PROCEEDINGS PENDING BEFORE THE REVENUE WHEN REFEREN CE WAS MADE TO THE VALUATION OFFICER. THE ASSESSEE FILED THE RETURN WITHIN THE DUE DATE A ND THE ASSESSEE HAS NOT RECEIVED ANY NOTICE UNDER SECTION 143(2) UPTO 30.07.2002 AND 30.07.2003 FOR THE A.YS. 2001-02 & 2002-03 RESPECTIVELY. THEREFORE THE ASSESSMENTS FOR THESE YEARS SHALL BE DEEMED TO HAVE BEEN COMPLETED. IT WAS FURTHER CONTENDED THAT PROVISION S OF SECTION 142A WILL NOT ASSIST THE REVENUE AS THE ASSESSMENTS FOR A.Y. 2001-02 & 2002-03 HAVE ALREADY BEEN DEEMED COMPLETED PRIOR TO 30.09.2004. IN THIS REGARD RELIANCE WAS PLACED ON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. IQBAL HUSSAIN REPORTED IN 32 0 ITR 142 (ALL.). THE LD. D.R. ON THE OTHER HAND RELIED ON THE ORDER OF THE AUTHORITIES BELOW. 5. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION S AND PERUSED THE MATERIAL ON RECORD. I HAVE GONE THROUGH THE REASONS RECORDED BY THE A.O. FOR THE A.YS. 2001-02 2002-03 & 2003-04. THE COPIES OF WHICH ARE AVAILABLE AT PAGES 30 31 & 32 OF THE PAPER BOOK AS REPRODUCED HEREINABOVE. FROM THE REASONS RECORDED IT IS APPA RENT THAT THE REASONS RECORDED BY THE A.O. BELONGS TO SMT. NEERJA DWIVEDI AND NOT TO THE ASSES SEE. THE A.O. HAS CLEARLY STATED IN THE REASONS THAT THE ASSESSEES WIFE SMT. NEERJA DWIVED I HAS MADE UNEXPLAINED INVESTMENT IN THE 6 PROPERTY AMOUNTING TO RS.4 42 863/- RS.13 28 666/- AND RS.3 00 795/- FOR A.YS. 2001-02 2002- 03 & 2003-04 RESPECTIVELY. SECTION 147 OF THE ACT CLEARLY LAYS DOWN THAT THE A.O. MUST HAVE THE REASON TO BELIEVE THAT AN INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE A.Y. UNDER CONSIDERATION. THE REASONS MUST RELATE TO THE ASSE SSEE AND NOT TO ANY OTHER PERSON. THE ASSESSEE AS WELL AS HIS WIFE ARE SEPARATE ASSESSEES AND ARE BEING ASSESSED SEPARATELY. IN MY OPINION ON THE BASIS OF THE REASONS RECORDED IN THE CASE OF TH E WIFE OF THE ASSESSEE THE ASSESSMENT OF THE HUSBAND CANNOT BE REOPENED. I THEREFORE QUASH TH E ASSESSMENT FRAMED IN CONSEQUENCE OF THE PROCEEDINGS INITIATED UNDER SECTION 147 OF THE ACT. THUS ALL THE ASSESSMENTS FOR THE A.YS. 2001- 02 2002-03 & 2003-04 STAND CANCELLED. 6. ALTHOUGH I ALREADY QUASHED THE ASSESSMENT BUT SI NCE THE LD. A.R. VEHEMENTLY ARGUED ON MERIT FOR A.YS. 2001-02 & 2002-03 I THEREFORE DI SPOSE OF THESE APPEALS ON MERITS ALSO. 7. I HAVE GONE THROUGH THE DECISION OF HONBLE ALLA HABAD HIGH COURT IN THE CASE OF CIT VS. IQBAL HUSSAIN REPORTED IN 320 ITR 142 (ALL.). IN T HIS CASE IT WAS HELD AS UNDER :- THE ORIGINAL ASSESSMENT ON THE ASSESSEE UNDER SECT ION 143(1)(A) OF THE INCOME TAX ACT 1961 WAS COMPLETED ON NOVEMBER 19 1992. REASSESSMENT PROCEEDINGS UNDER SECTION 148 OF THE ACT WERE INITI ATED AND ON THE BASIS OF THE REPORT OF THE DISTRICT VALUATION OFFICER INVESTMENT IN PROPERTY WAS ADDED. THE TRIBUNAL SET ASIDE THE REASSESSMENT ORDER. ON APPEA L TO THE HIGH COURT. HELD DISMISSING THE APPEAL THAT IN VIEW OF THE PR OVISO TO SECTION 142A OF THE ACT REFERENCE TO THE DEPARTMENTAL VALUATION OF FICER FOR THE PURPOSE OF REASSESSMENT CANNOT BE TAKEN IF THE ASSESSMENT HAS BECOME FINAL BETWEEN THE PARTIES BEFORE SECTION 142A WAS INSERTED I.E. SEP TEMBER 30 2004. THE ORDER OF THE TRIBUNAL WAS VALID. 8. THIS DECISION IN MY OPINION IS EQUALLY APPLICA BLE IN THE CASE OF THE ASSESSEE FOR THE A.YS. 2001-02 & 2002-03 AS THE FACTS IN THE CASE OF THE ASSESSEE ARE ALSO THE SAME. FOR THE A.Y. 7 2001-02 THE ASSESSEE HAS SUBMITTED THE RETURN ON 27 .07.2001. NOTICE UNDER SECTION 143(2) COULD HAVE BEEN ISSUED BY 31.07.2002. BUT NO NOTICE UNDE R SECTION 143(2) WAS ISSUED TO THE ASSESSEE. THEREFORE THE ORIGINAL ASSESSMENT IN THE CASE OF T HE ASSESSEE UNDER SECTION 143(1)(A) STANDS COMPLETED ON 31.07.2002. SIMILARLY FOR THE A.Y. 2 002-03 THE RETURN HAS BEEN SUBMITTED BY THE ASSESSEE ON 30.07.2002. NOTICE UNDER SECTION 143(2 ) COULD HAVE BEEN ISSUED ONLY UPTO 31.07.2003 BUT NO SUCH NOTICE WAS ISSUED TO THE AS SESSEE. THEREFORE THE ASSESSMENT FOR THE A.Y. 2002-03 STAND COMPLETED UNDER SECTION 143(1)(1 )(A) BY 31.07.2003. THE PROCEEDINGS UNDER SECTION 148 WERE INITIATED IN THE CASE OF THE ASSESSEE NOT ON THE BASIS OF THE REASONS RELATING TO THE ASSESSEE BUT TO THE WIFE OF THE ASS ESSEE ON THE BASIS OF THE REPORT OF THE D.V.O. IN VIEW OF THE PROVISO TO SECTION 142A OF THE ACT REF ERENCE TO THE D.V.O. FOR THE PURPOSE OF REASSESSMENT CANNOT BE MADE IF THE ASSESSMENT HAS BECOME FINAL BETWEEN THE PARTIES BEFORE SECTION 142A WAS INSERTED I.E. 30 TH SEPTEMBER 2004. IN THE CASE OF THE ASSESSEE ASSE SSMENT FOR THE A.Y. 2001-02 & 2002-03 HAVE ALREADY BECOME FINA L AS ON 31.07.2002 AND AS ON 31.07.2003 RESPECTIVELY I.E. PRIOR TO THE INSERTION OF SECTI ON 142A I.E. PRIOR TO 30 TH SEPTEMBER 2004. THEREFORE ON THAT BASIS ALSO IN MY OPINION NO AD DITION CAN BE MADE AND THUS GROUND NO.2 HAS ALSO TO BE ALLOWED 9. SO FAR THE A.Y. 2003-04 IS CONCERNED SINCE I HA VE ALREADY CANCELLED THE ASSESSMENT ON THE BASIS OF THE LEGALITY THEREFORE NEXT GROUND D OES NOT REQUIRE ANY ADJUDICATION. 10. IN THE RESULT ALL THE THREE APPEALS FILED BY T HE ASSESSEE ARE ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 26.02.2010) SD/- (P.K. BANSAL) ACCOUNTANT MEMBER PLACE: AGRA DATE: 26 TH FEBRUARY 2010. 8 PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT BY ORDER 3. CIT CONCERNED 4. CIT (APPEALS) CONCERNED 5. DR ITAT AGRA BENCH AGRA 6. GUARD FILE ASSIST ANT REGISTRAR INCOME-TAX APPELLATE T RIBUNAL AGRA TRUE COPY