Wtax/572/2018 Of Chandra Mohan Tiwari v. Income Tax Officer-1(1), Kanpur And 3 Others

Court No. - 21 Reserved Case :- WRIT TAX No. - 572 of 2018 Petitioner :- Chandra Mohan TiwariRespondent :- Income Tax Officer-1(1), Kanpur And 3 OthersCounsel for Petitioner :- Abhinav MehrotraCounsel for Respondent :- S.S.C.,A.S.G.I.,Ashish Agrawal,Subham Agrawal Hon'ble Krishna Murari,J.Hon'ble Ashok Kumar,J. (Delivered by Hon'ble Ashok Kumar, J.) Heard Sri Abhinav Mehrotra, learned counsel for the petitioner,Sri Shubham Agrawal, learned senior standing counsel, Sri AshishAgrawal, learned junior standing counsel for the Income TaxDepartment and Sri Vaibhav Tripathi, learned counsel appearing forrespondent no.3. The instant writ petition has been filed by the petitioner againstthe notice of re-assessment issued under Section 148 of the Income TaxAct, 1961 (hereinafter referred to as the 'Act'). The petitioner has challenged the notice of re-assessment issuedon 14.4.2017 by the respondent no.1, Income Tax Officer – 1(1),Kanpur for initiating re-assessment proceedings for the Assessment Year2014-15 and the order dated 7.3.2018, which is an order passed byrespondent no.1 by which the objection raised with regard to re-assessment proceedings are disposed of. The brief facts of the case are that the petitioner Chandra MohanTiwari, an individual by status, has filed his return of income for A.Y.2014-15, declaring a total income of Rs.2,27,590/-. During the course of proceedings for A.Y. 2014-15 the assessingauthority noticed that the petitioner has purchased an immovableproperty during the financial year 2013-14 relevant to assessment year2014-15 for a consideration of Rs.20,00,000/- having stamp value ofRs.1,55,60,000/- and the petitioner has not furnished the source of investment of the aforesaid amount of Rs.20,00,000/-. On the basis ofthe aforesaid information the Assessing Authority prima facie was of theopinion that the said investment has escaped assessment for the A.Y.2014-15. The assessing authority has recorded the following reasons forissuance of notice under Section 148 dated 19.4.2017 : “The Department is in the possession of information thatassessee has purchased immovable property during F.Y.2013-14 relevant to A.Y. 2014-15 for a consideration ofRs.20,00,000/- having stamp value of Rs.1,55,60,000/-.Therefore, the source of investment of Rs. 20,00,000/- hasescaped assessment for the A.Y. 2014-15. After examination of ITR and other paper, I havereason to believe that the income with regard to source ofinvestment of Rs.1,55,60,000/- (Rs.20,00,000/- forpurchase of property and Rs.1,35,60,000/- differencebetween stamp value and purchase value u/s 56(2)(vii)(b)of the I.T. Act) has escaped assessment for the A.Y. 2014-15. In order to assess the above income which has escapedthe assessment and also any other income chargeable toincome tax, which has escaped the assessment and whichcomes to my notice subsequently in the course of theassessment proceedings under the provisions of section 147of the Income Tax Act, 1961. As the period involved is A.Y. 2014-15 and to issuenotice u/s 148 of the Income Tax Act, 1961, necessaryapproval of your honour is required. In view of the above,the proposal is being sent to the Add. Commissioner ofIncome Tax, Range-1, Kanpur for according sanction toissue notice u/s. 148 of the I.T. Act, 1961 in this case forthe A.Y. 2014-15.” After recording the reasons a notice under Section 148 of the Actdated 27.4.2017 (wrongly mentioned by the petitioner as 24.4.2017)requiring the petitioner to submit its reply within a period of 15 days isissued. In pursuance of the aforesaid notice the petitioner filed its returnof income and has asked the statement of reasons recorded by theassessing authority. The assessing authority has supplied the reasonswhich are recorded by it for initiation of re-assessment proceedings. Thesaid reasons are supplied to the petitioner on 10.6.2017. The claim ofthe petitioner before the assessing authority was that the Assessing After recording the reasons a notice under Section 148 of the Actdated 27.4.2017 (wrongly mentioned by the petitioner as 24.4.2017)requiring the petitioner to submit its reply within a period of 15 days isissued. In pursuance of the aforesaid notice the petitioner filed its returnof income and has asked the statement of reasons recorded by theassessing authority. The assessing authority has supplied the reasonswhich are recorded by it for initiation of re-assessment proceedings. Thesaid reasons are supplied to the petitioner on 10.6.2017. The claim ofthe petitioner before the assessing authority was that the Assessing Authority has no jurisdiction for starting the impugned re-assessmentproceedings over the petitioner under Section 147 of the Act and furtherthat though the demised land was purchased in the name of presentpetitioner but in fact was purchased in the capacity of trustee/agent forone M/s Vidya Niketan Education Centre. The claim of the petitionerthat on account of the aforesaid reasons being the “Mantri/Prabandhak”he had authority to execute the transaction in question. The aforesaid objections are filed by the petitioner before theassessing authority on 23.2.2018. In his objection the petitioner has alsosubmitted that the provisions of Section 56(2)(viiib) are not applicable.The petitioner has also contended that for the purpose of issuance ofnotice under Section 148 the permission has not been accorded by thecompetent authority therefore, the proceedings impugned are vide abinitio. In para 13 of the writ petition the petitioner has stated as below : “The petitioner is the General Secretary of M/s VidyaNiketan Education Center (respondent no.4) and isresponsible for the overall administration and functioningof the Society.” In para 14 of the writ petition the petitioner has stated that thetrust, the respondent no.4 was in need of land for the purpose ofestablishing School and hence the petitioner was authorised to negotiateand purchase any suitable land to meet the requirement of Society. According to petitioner being acting the powers vested in him byvirtue of Board's resolution dated 20.4.2010, the petitioner, for and onbehalf of and in the capacity of agent/trustee of the trust purchasedcertain immovable property for and on behalf of the society. The assessing authority has dealt with the objection raised by thepetitioner by disposing of the same dealing with all points which areraised by the petitioner in his objection. Regarding point no.8 raised bythe petitioner in his objection the assessing authority has decided thesame by observing as follows : “On this point you have submitted that you are theHonorary Secretary of M/s Vidya Niketan Education Centre and for few other educational centres. Please statewhether these aspects has disclosed to the Department, ifyes when and how. Please justify these aspects withdocumentary evidences. You are also requested to file thecopies of Audit Report, Balance Sheet, P & L Account alongwith all annexures and copy of ITR with computation forM/s Vidya Niketan Education Centre for the relevantperiod as well as for three succeeding years.” The assessing authority after due consideration of the objectionsraised by the petitioner has properly disposed of the same and hasrequested the petitioner to make proper compliance to all the noticeswhich are issued by him. The petitioner has been asked to furnish theinformation/details of the documents in pursuance of the notice issuedunder Section 142(1) dated 12.6.2017, a copy of the same is againenclosed by the assessing authority while dispose of the objections. Learned counsel for the petitioner has submitted that vide orderdated 19.7.2013 S.D.M./ Tehsildar has issued the requisite permissionto the parties to carry out the conveyance of the demised property andconsequently the sale deed was executed. The assessing authority after due consideration of the objectionsraised by the petitioner has properly disposed of the same and hasrequested the petitioner to make proper compliance to all the noticeswhich are issued by him. The petitioner has been asked to furnish theinformation/details of the documents in pursuance of the notice issuedunder Section 142(1) dated 12.6.2017, a copy of the same is againenclosed by the assessing authority while dispose of the objections. Learned counsel for the petitioner has submitted that vide orderdated 19.7.2013 S.D.M./ Tehsildar has issued the requisite permissionto the parties to carry out the conveyance of the demised property andconsequently the sale deed was executed. Counsel for the department has submitted that the facts of thepresent case clearly reveals that the property in question has beenpurchased by the petitioner himself and not by the trust or for the trust.He has further submitted that while filing the return for A.Y. 2014-15the petitioner has not disclosed any material with regard to purchase ofthe property in question hence the assessing authority has rightlyproceeded to initiate proceedings under Section 148 of the Act. He hasfurther submitted that the writ petition is premature and since it isagainst show cause notice the same is liable to be dismissed. He has further submitted that the petitioner may appear beforethe respondent authorities and establish its claim with regard to thesource of investment and no prejudice is being caused to the petitionerat this stage. Prima facie, the case for reassessment with respect toescapement of income is clearly made out. Sanction, in the present, has been granted by the AdditionalCommissioner as per section 151(2) of the I.T. Act. It is submitted thatthe Additional Commissioner is an authority highter in rank to the Joint Commissioner. Even otherwise, it is submitted that the office of the JointCommissioner was vacant and Additional Commissioner was holdingcharge of the office of Joint Commissioner and hence thepermission/sanction has been granted by the Additional Commissionerin accordance with section 151(2) of the Act. We have perused the sale deed, which has been executed andfiled as Annexure-3 to the writ petition, which clearly indicates that thename of the purchaser or the property in question is mentioned asChandra Mohan Triwari, S/o Bal Mukund Tiwari, who is the petitioner.We have further noticed that in coloumn 'stamp duty paid' the name ofthe petitioner is mentioned. Similarly, the Deputy Registrar, Region 1, Kanpur Nagar hasissued a certificate clearly mentioning therein the name of the purchaserand the address being, Chandar Mohand Tiwari, R/o H.No. 509, SafipurPratham, Kanpur, which is the address of the petitioner in the instantwrit petition also. Similarly the order issued by the District Magistrate, KanpurNagar dated 28.10.2013 clearly indicates the name of the purchaserbeing the petitioner Chandra Mohan Tiwari. This order has been passedby the Collector, under Section 157 (1) of U.P.Z.A. & L.R. Act. For theready reference the relevant contents of the aforesaid order dated28.10.2013 are quoted hereinbelow : अतः उपरो्ሹ िविविेचना एविं तहसीलदार सदर की उ्ሹ आख्या के आधार परउ0 प0 जं0 िविनाश एविं भूमिमि व्यविस्था अिधिनयमि 1950 की धारा-157(क)-56 के अन्तगरत आविेदक िशवि पसाद पु्ቔ बंशीलाल िनविासीदेविीगंज बिगयाचकेरी वि िजला कानपुर नगर को मिौजा/्ቇामि-चकेरी के खाता संख्या-495 केगाटा सं0-29 िमि0 रकबा 0.1331 हे0 खाता सं0-217 तथा गाटा सं0-29 िमि0, रकबा 0.2559 हे0 कुल रकबा 0.389 हे0 भूमिमि को गैर अनुसूमिचतजाित के ्ቅेता चन् मिोहन ितविारी पु्ቔ स्वि0 बालमिुकुन्द ितविारी िनविासी-509सफीपुर पथमि कानपुर नगर को िवि्ቅय करने की अनुमित पदान की जाती है।यिद भिविष्य मिे उ्ሹ भूमिमि के सम्बन्ध मिे कोई अन्यथा तथ्य पकाश मिे आता हैतो यह अनुमित स्वितः ही िनरस्त समिझी जाविेगी। इस आदेश की पिततहसीलदार सदर एविं सब रिजस्टरार को पेिषित की जाये। विाद आविश्यककायरविाही प्ቔाविली दािखल दफतर हो। अतः उपरो्ሹ िविविेचना एविं तहसीलदार सदर की उ्ሹ आख्या के आधार परउ0 प0 जं0 िविनाश एविं भूमिमि व्यविस्था अिधिनयमि 1950 की धारा-157(क)-56 के अन्तगरत आविेदक िशवि पसाद पु्ቔ बंशीलाल िनविासीदेविीगंज बिगयाचकेरी वि िजला कानपुर नगर को मिौजा/्ቇामि-चकेरी के खाता संख्या-495 केगाटा सं0-29 िमि0 रकबा 0.1331 हे0 खाता सं0-217 तथा गाटा सं0-29 िमि0, रकबा 0.2559 हे0 कुल रकबा 0.389 हे0 भूमिमि को गैर अनुसूमिचतजाित के ्ቅेता चन् मिोहन ितविारी पु्ቔ स्वि0 बालमिुकुन्द ितविारी िनविासी-509सफीपुर पथमि कानपुर नगर को िवि्ቅय करने की अनुमित पदान की जाती है।यिद भिविष्य मिे उ्ሹ भूमिमि के सम्बन्ध मिे कोई अन्यथा तथ्य पकाश मिे आता हैतो यह अनुमित स्वितः ही िनरस्त समिझी जाविेगी। इस आदेश की पिततहसीलदार सदर एविं सब रिजस्टरार को पेिषित की जाये। विाद आविश्यककायरविाही प्ቔाविली दािखल दफतर हो। We have also noticed that while passing the order under Section9(1) of U.P. Revenue Code 2006, the petitioner has been shown as thepurchaser of the property and no where it has been mentioned that theproperty has been purchased by the petitioner as a trustee/agent of therespondent no.4 trust. Per contra, the counsel for the petitioner has submitted that thepetitioner has filed the return of income as an individual capacity bydisclosing the correct income. He has submitted that no property hasbeen purchased by the petitioner as individual or for himself and in factthe property in question has been purchased for and on behalf of thetrust of which the petitioner is a trustee/secretary general. He has further submitted that without prejudice, there is noapplication of mind by the authority before granting sanction asrequired under law. There is no reason or application of mind. We find no substance in the submission of the learned counsel forthe petitioner as we have noticed from the documents which areenclosed by the petitioner in his writ petition clearly discloses that theproperty in question has been purchased solely by the petitioner himselfand in his claim no documentary evidence has been produced by thepetitioner which establishes that the petitioner has purchased theproperty for and on behalf of the trust. In the instant writ petition, thepetitioner has nowhere stated that the said property is purchased by thetrust and trust has disclosed the purchase of the property in its returnfor the A.Y. 2014-15. The assessing authority has reached to theconclusion by believing that income had escaped assessment. Even during the course of arguments, counsel for the petitionerhas argued that the assessment should be made in the hands of thesociety and only provisional assessment could be made in the hands ofthe petitioner. It is submitted that section 147 of the Act is applicablewhere any income chargeable to tax has escaped assessment and thepower is given to the assessing officer, to both assess or reassess underSection 147. Thus, in the reassessment proceedings, if proper evidenceis furnished by the petitioner, only then it could be adjudged as to whether the income liable to be taxed in the hands of the petitioner hasescaped assessment, or not, which cannot be adjudicated in the writpetition. Without going into the merit of the case prima facie we aresatisfied with the initiation of the proceedings by the assessing authorityand we are further of the opinion that at this stage the petitioner cannotsucceed as the material and evidence which are adduced by thepetitioner are clearly disclosing that the petitioner has effected thepurchase of property in his name. However, without going into themerits of the case we dismiss the writ petition with liberty to thepetitioner to raise his grievance before the competent authority. It wouldbe open to the petitioner to adduce whatever evidence or documents ashe may rely in support his contention. The writ petition is accordingly dismissed. Order Date :- 02.05.2018 S.S. . (Ashok Kumar, J.) (Krishna Murari, J.)