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From: Kapil Goel <advocatekapilgoel@gmail.com>
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Sent: Sunday, 18 August 2013 9:14 AM
Subject: [Gzb_CA Group -CA. VINAY MITTAL] ITAT Having no power under Income tax Act to dismiss appeals for non prosecution in limine as Allahabad high court holds no difference in old & current regime (applies SC order in 1974 ITR 41 ) ; Reopening on guesswork basis on vague Investigation wing recommendations not allowed; Transfer u/s 127 from one delhi to nodia without opportunity u/s 127 held by high court ITAT rightly quashed such assessment
From: Kapil Goel <advocatekapilgoel@gmail.com>
To:
Sent: Sunday, 18 August 2013 9:14 AM
Subject: [Gzb_CA Group -CA. VINAY MITTAL] ITAT Having no power under Income tax Act to dismiss appeals for non prosecution in limine as Allahabad high court holds no difference in old & current regime (applies SC order in 1974 ITR 41 ) ; Reopening on guesswork basis on vague Investigation wing recommendations not allowed; Transfer u/s 127 from one delhi to nodia without opportunity u/s 127 held by high court ITAT rightly quashed such assessment
Included in this update:
i) Allahabad high court in case of Deepak gupta on forceful and malafide exercise of jurisdiction by ACIT Noida against section 127 procedure duly appellable before ITAT in appeal proceedings: ITAT rightly quashed illegal proceedings; (all legal questions answered in assessee's favor)
ii) Allahabad High Court on surmisical reopening on vague recommendations of investigation wing (ass fav reopening order)
iii) Allahabad high Court ITAT cannot short circuit the proceedings by exparte dismissing appeal for non prosecution (even under present regime)
Case :- INCOME TAX APPEAL DEFECTIVE No. - 90
of 2012
Appellant :- Commissioner Of Income Tax (Noida)
Respondent :- M/S Sh. Deepak Gupta
Counsel for Appellant :- Dhananjay Awasthi
The department has preferred the appeal on the following
questions of law:-
"(1) Whether, the ITAT was justified in quashing the order of the A.O. u/s 148 in view of the provisions of Section 127 (4) which stipulates transfer of case at any stage which shall not rendor reissuance of notice already issued by the earlier A.O.?
(II) Whether the ITAT was justified in quashing the order of the A.O. u/s 147 /144 on basis of territorial jurisdiction completely ignoring the provisions of Section 124 (3) which talks about raising of jurisdictional issue within one month of issuance of notice which was not done in the present case?
(III) Whether the ITAT was justified in quashing the order u/s 127 on grounds of non opportunity when it is clear that 127 does not talk of mandatory opportunity? (IV) Whether the ITAT was correct in law in quashing the order u/s 127 when the assessee could not substantiate his address before the CIT (A)?
(V) Whether the ITAT was correct in holding that Noida in Delhi geographically separate when both fall in N.C.R. Region?
(VI) Whether the ITAT was correct in quashing the administrative order passed under Section 127 on grounds of opportunity when addressed this is quarable terror specially when the assessee had participated in the subsequent proceeding?"
The ITAT concluded as follows:-
6.2 Coming to issue raised by the assessee that the transfer of jurisdiction order u/s 127 (2) is also not proper in the eyes of law, it is clear that the CCIT, Meerut issued the letter to both the Commissioner i.e. CIT, Ghaziabad and CIT Delhi for inter charge transfer of jurisdiction on 3.3.2004. The impugned 127 (4) order has been passed by the CIT, Delhi on 9.3.2004 i.e. within 5 days. There is no reference to any opportunity of being heard given to the assessee. There is neither any reference in the order nor Ld. DR could dispute this fact. Ld. DR has only argued that it is an administrative order and denial of opportunity of hearing is not appellable, therefore, no prejudice is caused to the assessee. We are unable to agree with Ld. DR. Statutory requirements are always mandatory irrespective of the fact whether the same is appealable or not, therefore, any transfer order passed u/s 127 (2) of inter charge jurisdiction, without complying with the statutory requirement of giving opportunity of being heard to the assessee is invalid.
The ITAT has rightly found that the reasons given by CIT (A) in
deciding the objections were not sufficient as the transfer of jurisdiction was made on the request of A.O. to which objections were filed and were not decided by the A.O. We agree with the reasoning given by ITAT that it was
mandatory for the A.O. to decide objections and that the exercise of discretion on the objections would in any case not validate the notice under Section 147/148 of the Income Tax Act.
On the aforesaid discussion, we do not find any merit in these appeals. The questions of law are decided against the department and in favour of the assessee.
HIGH COURT OF JUDICATURE AT ALLAHABAD
?Court No. - 32
Case :- INCOME TAX APPEAL No. - 164 of 2013
Appellant :- M/S Mayur Sheet Grah (P) Ltd.
1. We have heard Shri Vinod Kumar Rastogi for the appellant-company. Shri Ashok Kumar appears for the department.
2. In these Income Tax Appeals under Section 260-A of Income Tax Act, 1961 arising out of an order� dated 30.8.2012 passed by Income Tax Appellate Tribunal, Agra dismissing ITA Nos.92 & 93/Agra/2012 for assessment years 2007-08 and 2008-09 in limine on the ground that the appellant did not appear, the question raised is, 'whether the Income Tax Appellate Tribunal, exercising powers of second appeal under Section 254 of the Act, can dismiss the appeal in limine without going into the merits of the case.'
3. Both the appeals were preferred and were admitted on following two substantial questions of law:-
"1. Whether under the facts and circumstances of the case the Hon'ble Income Tax Appellate Tribunal was justified in dismissing the appeal in limine, without going into the merits of the case?
2. Whether the Income Tax Appellate Tribunal was justified in exercising the power given under Section 254 of the I.T. Act, 1961, in dismissing the appeal in limine, without appreciating the scope of the aforesaid provisions that the same should be disposed off on merits." 9. We do not propose to enter into the merits of the grounds of petitioner's absence form the proceedings as we find that both the questions raised in the appeal are covered by the opinion expressed by the Supreme Court in Commissioner of Income Tax, Madras v. S. Chenniappa Mudaliar, Madurai (Supra).� The Supreme Court ruled that the Income Tax Appellate Tribunal is not competent to dismiss the appeal for want of prosecution.� The judgment was given explaining the provisions of Section 33 (4) of the Income Tax Act, 1922. Section 254 of the Act read with Rule 24 of the IT (Appellate Tribunal) Rules, 1963 do not provide for any such powers to the Tribunal to dismiss appeal in limine.� In our view there is no difference in the Tribunal's powers under the old and the new Act.�
10. Both the questions raised in this appeal are thus decided against the revenue and in favour of the assessee. The income tax appeals are allowed.� The order of the Income Tax Appellate Tribunal dated 30.8.2012 is set aside.� The matter is remanded to be decided on merits.�
11. In order to avoid any complaint regarding service of notice on the appellant-assessee, we direct that the assessee will file certified copy of the order in both the appeals in the Income Tax Appellate Tribunal within one month and will also provide his current address for service of notice in the office of the Tribunal.
?Court No. - 32
Case :- INCOME TAX APPEAL No. - 164 of 2013
Appellant :- M/S Mayur Sheet Grah (P) Ltd.
1. We have heard Shri Vinod Kumar Rastogi for the appellant-company. Shri Ashok Kumar appears for the department.
2. In these Income Tax Appeals under Section 260-A of Income Tax Act, 1961 arising out of an order� dated 30.8.2012 passed by Income Tax Appellate Tribunal, Agra dismissing ITA Nos.92 & 93/Agra/2012 for assessment years 2007-08 and 2008-09 in limine on the ground that the appellant did not appear, the question raised is, 'whether the Income Tax Appellate Tribunal, exercising powers of second appeal under Section 254 of the Act, can dismiss the appeal in limine without going into the merits of the case.'
3. Both the appeals were preferred and were admitted on following two substantial questions of law:-
"1. Whether under the facts and circumstances of the case the Hon'ble Income Tax Appellate Tribunal was justified in dismissing the appeal in limine, without going into the merits of the case?
2. Whether the Income Tax Appellate Tribunal was justified in exercising the power given under Section 254 of the I.T. Act, 1961, in dismissing the appeal in limine, without appreciating the scope of the aforesaid provisions that the same should be disposed off on merits." 9. We do not propose to enter into the merits of the grounds of petitioner's absence form the proceedings as we find that both the questions raised in the appeal are covered by the opinion expressed by the Supreme Court in Commissioner of Income Tax, Madras v. S. Chenniappa Mudaliar, Madurai (Supra).� The Supreme Court ruled that the Income Tax Appellate Tribunal is not competent to dismiss the appeal for want of prosecution.� The judgment was given explaining the provisions of Section 33 (4) of the Income Tax Act, 1922. Section 254 of the Act read with Rule 24 of the IT (Appellate Tribunal) Rules, 1963 do not provide for any such powers to the Tribunal to dismiss appeal in limine.� In our view there is no difference in the Tribunal's powers under the old and the new Act.�
10. Both the questions raised in this appeal are thus decided against the revenue and in favour of the assessee. The income tax appeals are allowed.� The order of the Income Tax Appellate Tribunal dated 30.8.2012 is set aside.� The matter is remanded to be decided on merits.�
11. In order to avoid any complaint regarding service of notice on the appellant-assessee, we direct that the assessee will file certified copy of the order in both the appeals in the Income Tax Appellate Tribunal within one month and will also provide his current address for service of notice in the office of the Tribunal.
HIGH COURT OF JUDICATURE AT ALLAHABAD
?AFR
Court No. - 32
Case :- INCOME TAX APPEAL No. - 555 of 2009
Appellant :- Commissioner Of Income Tax
Respondent :- Smt. Reena Arora
1. We have heard Shri Sambhu Chopra, learned counsel for the income tax department. Shri Ashish Bansal appears for the respondent-assessee.
2. This income tax appeal under Section 260A of the Income Tax Act, 1961 arises out of the order dated 6.2.2009 passed by the Income Tax Appellate Tribunal in ITA No.342/LUC/2008 for the assessment year 2002-03.
3. The department has preferred the appeal on following questions of law:-
"1. Whether on the facts and circumstances of the case, Hon'ble ITAT was justified in law in canceling the action u/s.147 of the I.T. Act on the basis of information received from investigation wing leading to a bonafide belief of income escaping assessment.
2. Whether the order of the Hon'ble ITAT is perverse in as much as it failed to take into account the fact that the assessee in course of reassessment surrendered the Long Term Capital Gain thus accepting the reasons recorded by the Assessing Officer that the Long Term Capital Gain shown in the return was bogus.
3. Whether on the facts and circumstance of the case the order of the ITAT is perverse in as much as it placed wrong reliance on the decision of CIT Vs. Anupam Kapoor (Punjab & Haryana High Court) and CIT Vs. Pradeep Kumar Gupta (Delhi) wherein the question of validity of notice u/s. 147 was not an issue at all."
9. We have examined the assessment orders, appellate order as well as the order of the ITAT and do not find that there was any credible material, which could relate to or connect to the investment of Rs.21 lacs by Reena Arora, which she had paid to D.N. Taneja. The entries in the diary of D.N. Taneja found during search and seizure, which he admitted were not of the amount of Rs.21 lacs paid by Smt. Reena Arora. The entries were with noting on the top (Praveen, Dilbagh) only indicated a schedule of payment. The name of Reena Arora did not appear in the diary. The A.O. while relying upon additions on the basis of the entries did not provide reasonable opportunity to the assessee. He did not allow cross-examination of D.N. Taneja by the assessee nor any bank statement or other records were found connecting these entries to Reena Arora. The A.O. relied upon the report of DI that since investment has been found in the diary entries of D.N. Taneja and which relates to Arora Group, Reena Arora, who had purchased two properties must have made additional undisclosed investment of Rs.21 lacs. The investment made by Reena Arora and quantum was purely a guess work, which has been arrived at on surmises and conjectures without giving her an opportunity to be heard. She should have been allowed cross-examination of Shri D.N. Taneja to establish that she had not paid the amount to him. There was no other material on record to connect undisclosed investment made by Smt. Reena Arora in the properties.
10. We are of the view that the findings recorded by the appellate authority and the Income Tax Appellate Tribunal do not suffer from any error of law nor the questions of law framed are substantial questions of law, which require to be decided by this Court, to admit the appeal.
11. The income tax appeal is dismissed in limine.
?AFR
Court No. - 32
Case :- INCOME TAX APPEAL No. - 555 of 2009
Appellant :- Commissioner Of Income Tax
Respondent :- Smt. Reena Arora
1. We have heard Shri Sambhu Chopra, learned counsel for the income tax department. Shri Ashish Bansal appears for the respondent-assessee.
2. This income tax appeal under Section 260A of the Income Tax Act, 1961 arises out of the order dated 6.2.2009 passed by the Income Tax Appellate Tribunal in ITA No.342/LUC/2008 for the assessment year 2002-03.
3. The department has preferred the appeal on following questions of law:-
"1. Whether on the facts and circumstances of the case, Hon'ble ITAT was justified in law in canceling the action u/s.147 of the I.T. Act on the basis of information received from investigation wing leading to a bonafide belief of income escaping assessment.
2. Whether the order of the Hon'ble ITAT is perverse in as much as it failed to take into account the fact that the assessee in course of reassessment surrendered the Long Term Capital Gain thus accepting the reasons recorded by the Assessing Officer that the Long Term Capital Gain shown in the return was bogus.
3. Whether on the facts and circumstance of the case the order of the ITAT is perverse in as much as it placed wrong reliance on the decision of CIT Vs. Anupam Kapoor (Punjab & Haryana High Court) and CIT Vs. Pradeep Kumar Gupta (Delhi) wherein the question of validity of notice u/s. 147 was not an issue at all."
9. We have examined the assessment orders, appellate order as well as the order of the ITAT and do not find that there was any credible material, which could relate to or connect to the investment of Rs.21 lacs by Reena Arora, which she had paid to D.N. Taneja. The entries in the diary of D.N. Taneja found during search and seizure, which he admitted were not of the amount of Rs.21 lacs paid by Smt. Reena Arora. The entries were with noting on the top (Praveen, Dilbagh) only indicated a schedule of payment. The name of Reena Arora did not appear in the diary. The A.O. while relying upon additions on the basis of the entries did not provide reasonable opportunity to the assessee. He did not allow cross-examination of D.N. Taneja by the assessee nor any bank statement or other records were found connecting these entries to Reena Arora. The A.O. relied upon the report of DI that since investment has been found in the diary entries of D.N. Taneja and which relates to Arora Group, Reena Arora, who had purchased two properties must have made additional undisclosed investment of Rs.21 lacs. The investment made by Reena Arora and quantum was purely a guess work, which has been arrived at on surmises and conjectures without giving her an opportunity to be heard. She should have been allowed cross-examination of Shri D.N. Taneja to establish that she had not paid the amount to him. There was no other material on record to connect undisclosed investment made by Smt. Reena Arora in the properties.
10. We are of the view that the findings recorded by the appellate authority and the Income Tax Appellate Tribunal do not suffer from any error of law nor the questions of law framed are substantial questions of law, which require to be decided by this Court, to admit the appeal.
11. The income tax appeal is dismissed in limine.
__._,_.___
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