ORDER
S.K. Yadav, J.M.
This appeal by the assessee is directed against the order of the CIT(A) on various grounds, which are as under :-
“1. The assessing officer after processing the return of income and issuing intimation under section 143(1)(a) dated 31-1-1994 was legally wrong in serving notice under section 148 dated 9-1-1997 instead of a notice under Section 143(2) to proceed further for passing an assessment order under section 143(3) or 144. The CIT(A) erred in not complying with the decisions of the Hon’ble High Courts on the issue and passed the impugned illegal order;
2. The assessee disclosed all the facts of the case fully and truly which were also in the knowledge of the assessing officer on the dale of processing the assessee’s return under section 143(1)(a). Issuing of the notice under section 148 by the successor assessing officer was for reviewing the opinion of his predecessor which is not permissible under section 147;
3. The assessing officer violating the provisions of section 147 issued the notice under section 148 dated 9-1-1997 for initiating the proceeding of reopening of time barred assessment and as such nullified the scheme and purpose of several procedural sections for assessment under the Act. The learned CIT(A) omitted to adjudicate the issue in view of the judgment of the Hon’ble High Court and complied with the illegal Circular No. 549 dated 31-10-1989;
4. The learned CIT(A) going beyond his jurisdiction acted as assessing officer in supplementing ex parte and suo motu legal provisions to legalise the illegal and irrelevant reasons recorded under section 148(2) by the assessing officer for initiating the alleged reopening proceedings under section 147 of the Act;
5. The assessing officer without complying with the mandatory provisions of sub-section (4) of section 124 passed the invalid and illegal assessment order under section 144 dated 26-8-1997 and the CIT(A) having no jurisdiction for deciding the questioned jurisdiction of the assessing officer illegally dismissed the assessee’s ground of appeal on the issue;
6. The assessing officer required no such document as mentioned in the notice under section 142(1) dated 14-8-1997 for completing the assessment, the notice was issued inconsistent to the provisions of section 142(1) and the assessee committed no default of its non-compliance as alleged in the impugned invalid assessment order under section 144. The CIT(A) neither adjudicated nor considered the assessee’s submissions on the issue in his impugned order dated 24-2-1999;
7. The assessee’s Rent Agreement dated 6-4-1983 granting lease to his sons is alegally acceptable document. The assessing officer has not discharged his onus for placing evidence to show it sham and the assessee’s mala fide. The revenue is factually and legally wrong in accepting it genuine for one purpose and holding it sham on suspicion for. other purpose in the assessee’s case since assessment year 1984-85. The learned CIT(A) neither applied his judicial mind nor made investigation in the issue;
8. The assessee’s bona fide in granting lease of his disputed and non-existing property to his sons is established with the fact that he charged higher rent of Rs. 3 per sq. ft. than the accepted receivable rent of Rs. 2.25 per sq. ft. with right to sub-let. The CIT(A) was not justified in ignoring the assessee’s un-controverted, legally acceptable and already accepted documentary evidences;
9. The firm M/s. Alliance Brothers charged rent (q) Rs. 6.25 per sq. ft. for. composite letting to Oriental bank of Commerce which can neither be added as receivable rent or annual letting value of the assessee’s property under section 22/23 of the Act nor be taxed in the hands of the assessee as income from property. The CIT(A) neither considered the assessee’s evidence nor followed the authoritative Rulings of the Hon’ble Supreme Court, the Honble High Courts and this Hon’ble Tribunal made on the issues of Annual Letting Value and Capital receipt;
10. The assessing officer was not justified in purposive interpreting and reproducing in the assessment order only a few tern-is and conditions of the Lease Deed between Ws. Alliance Brothers and the Bank. The CIT(A) erred in omitting to consider the assessee’s explanation and to adjudicate the terms and conditions;
11. The Ruling of the Hon’ble Supreme Court laid down in the case of McDowell & Co. Ltd. v. CTO (1985) 154 ITR 148/22 Taxman 11 is not applicable to the assessee’s case;
12. The assessing officer and the CIT(A) were legally and factually wrong in following mechanically the Tribunal’s order dated 23-12-1990 passed for the assessee’s assessment year 1984-85 and whereas this Hon’ble Tribunal have inherent jurisdiction to depart from its earlier view in subsequent assessment years.”
2. During the course of hearing, the learned counsel for the assessee has opted not to press ground Nos. 1 to 3. Accordingly, the same are dismissed, being not pressed.
3. Through ground Nos. 4 to 12 the assessee has challenged an addition of Rs. 1,36,664 made by the assessing officer on account of difference of rent received by M/s. Alliance Brothers from Oriental bank of Commerce and the rent paid by M/s. Alliance Brothers to the assessee, which was later on confirmed by the CIT(A).
4. Having heard the rival submissions and from a careful perusal of the record, we find that the assessee is the owner of the commercial property No. 17, Community Centre, Near Deep Cinema, Post Office, Ashok Vihal (Phase-II, Delhi. This plot was allotted to the assessee by the DDA and the construction was completed in 1983. The assessee let out first floor of the said building to M/s. Alliance Brothers @ Rs. 3 per sq. ft. vide agreement dated 6-4-1983. Both the partners of M/s. Alliance Brothers are Shri Surinder Singh and Shri Jitender Singh, sons of the assessee i.e. Shri Hari Singh Malhiyan. M/s. Alliance Brothers further let out this property to Oriental bank of Commerce (hereinafter referred to as OBC) @ Rs. 6.25 per sq. ft. on 12-11-1984 through lease deed executed between M/s. Alliance Brothers, OBC and the assessee as the confirming party. The assessee has simply shown the receipt of rent at Rs. 1,16,772 @ Rs. 3 per sq. ft. The assessing officer doubted the transaction and after having formed the opinion that the lease document between the assessee and the Alliance Brothers is a colourable device to evade the tax liability, computed the total rent collected at Rs. 2,53,416 @ Rs. 6.25 per sq. ft. and made the addition of the difference, which was later on confirmed by the CIT(A).
5. Now the assessee has preferred an appeal before the Tribunal. During the course of hearing, the learned counsel for the assessee has invited our attention to the order of the Single Member of the Tribunal dated 28-4-2004 pertaining to the assessment years 1985-86 to 1987-88, 1994-95, 1996-97 and 1997-98 through which the Tribunal has set aside the impugned issue to the file of the, assessing officer for its re-adjudication. During the course of hearing, our attention was also invited by the revenue that during the assessment year 1984-85 the issue of quantum of rent was examined by the assessing officer in the light of the agreement executed between the assessee and M/s. Alliance Brothers and the lease deed executed in favour of the bank and the assessing officer arrived at a conclusion that this agreement between the assessee and M/s. Alliance Brothers in which his sons are partners, was prepared to evade the tax liability and he accordingly quantified the total rent received by the assessee @ Rs. 6.25 per sq. ft. This matter travelled upto the Tribunal. Vide order dated 13-12-1990 the Tribunal has confirmed the order of the assessing officer and quantified the rent received by the assessee (d) Rs. 6.25 per sq. ft. This order of the Tribunal was passed by the Division Bench. Against his order of the Tribunal the assessee moved under section 254(2) to the Hon’ble High Court, but the same was also dismissed by the Hon’ble High Court, after holding that no question of law does arise out of the order of the Tribunal on the impugned issue. Since the finding of the Tribunal with regard to the agreement executed between the assessee and M/s. Alliance Brothers attained finality, it cannot be reversed by the Single Member of the Tribunal under any circumstances. If new facts are brought to the notice of the Single Member, the best course available to him was to refer the appeal to the Division Bench inasmuch as only Co-ordinate Bench can over-rule the decision of the earlier bench, if new 117acts are brought to its notice. A Single Member Bench cannot be called to be a Co-ordinate Bench of Division Bench.
6. We have also carefully examined the order of the Division Bench of the Tribunal as well as the Single Member order and we find that no new facts were even brought to the notice of the Single Member, which were not considered by the Division Bench of the Tribunal. During the course of hearing, our attention was also invited to the one more order of the Tribunal of the Division Bench pertaining to the assessment Years 1985-86 and 1987-88 in Wealth-tax Appeal in which the Tribunal vide its order dated 6-8-2004 has approved the finding of the Division Bench given in its order dated 13-12-1990. In this Wealth-tax Appeal the Tribunal has already made the comments over the judgment of the SMC Bench and held that the SMC Bench cannot over-rule the order of the Division Bench of the Tribunal.
7. We, however, carefully examined the agreements executed between the assessee and M/s. Alliance Brothers and we find that though these documents called to be an agreement as per the title, but it amount to a lease deed executed in favour of M/s. Alliance Brothers. As per the provisions of the Registration Act, the lease deed with respect to immovable property is required to be registered on payment of certain Stamp Duties. Since neither the requisite stamp duty has been affixed on this document nor it was registered with the Sub Registrar, this document cannot be taken into account as an evidence. We have also carefully examined the terms of the lease deed executed between M/s. Alliance Brothers and OBC and the assessee. Though M/s. Alliance Brothers and the OBC are identified to be a lessor and the lessee, but the assessee was also shown in this lease deed as the confirming party. Through its clause No. 15, the bank has given an advance of Rs. 5,00,000 by way of a loan to M/s. Alliance Brothers, but the assessee stood as a guarantor for Alliance Brothers with respect to this loan. As per clause 24 the assessee was also made responsible with respect to this lease in case the relationship between the assessee and the lessor ceased or comes to an end. If the lease deed and the agreement are carefully examined, only one inference can be drawn that this agreement was prepared only to reduce the tax liability so that the assessee may be taxed on a rent received at the rate of Rs. 3 per sq. ft. whereas through M/s. Alliance Brothers it was in fact let out to the bank @ Rs. 6.25 per sq. ft.
8. During the course of hearing, the learned counsel for the assessee has placed reliance on the rent on which other adjoining properties were let out, in support of his contention that the impugned property was let out to M/s. Alliance Brothers at a reasonable rate. This argument of the learned counsel for the assessee would not help the assessee in any manner because here the short question involved is whether the arrangement made by the assessee to let out the property to OBC is a colourable device or a genuine document. The issue has already been examined by the Tribunal in its earlier orders and has finally held that this agreement between the assessee and M/s. Alliance Brothers is a sham document and is a colourable device to evade the tax liability. Having examined again the documents on which the assessee wants to rely, we come to the same conclusion. We, 1herefore, do not find any infirmity in the order of the CIT(A). Accordingly, his order is hereby confirmed.
ITA No. 2360 (Delhi) of 1999.
Assessment year : 1993-94.
9. In the result, the appeal filed by the assessee is dismissed.
