Mr. Anukool Mukund Purandare, Pune V. ACIT, Central Circle,1(1), Pune

CO 11/PUN/2004

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4183 (ITAT-PUNE)
• Duration Of Justice: 12 year(s) 5 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 19-01-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S SINGH
• Keywords: Document seized; Opportunity of being heard; Block assessment; Tax effect; Documents seized; Set aside
• Section: 11

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.610/PN/2003 BLOCK PERIOD 01-04-1989 TO 08-12-1999 ACIT, CENTRAL CIRCLE-1(1), PUNE . / APPELLANT V/S MR. A NUKOOL MUKUND PURANDARE , A-7, SNEHSHILP SOCIETY, SHRIPATI SUTAR PATH, KOTHRUD, PUNE 38 PAN NO.AAUPP2486M . / RESPONDENT C.O. NO.11/PN/2004 (ARISING OUT OF ITA NO.610/PN/2003) BLOCK PERIOD 01-04-1989 TO 08-12-1999 MR. A NUKOOL MUKUND PURANDARE , A-7, SNEHSHILP SOCIETY, SHRIPATI SUTAR PATH, KOTHRUD, PUNE 38 PAN NO.AAUPP2486M . / CROSS OBJECTOR V/S ACIT, CENTRAL CIRCLE - 1(1), PUNE . / APPELLANT IN THE APPEAL ASSESSEE BY : SHRI SUNIL GANOO REVENUE BY : SHRI S. SINGH, CIT / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE AND CO FILED BY THE ASSESS EE ARE DIRECTED AGAINST THE ORDER DATED 07-03-2003 OF THE CIT (A)-I, PUNE RELATING TO THE BLOCK PERIOD 01-04-1989 TO 08-12-1999. FOR THE SAKE OF / DATE OF HEARING :05.07.2016 / DATE OF PRONOUNCEMENT: 08.07.2016 2 ITA NO.610/PN/2003 AND CO NO.11/PN/2004 CONVENIENCE THESE WERE HEARD TOGETHER AND ARE BEING D ISPOSED OF BY THIS COMMON ORDER. ITA NO.610/PN/2003 (BY REVENUE) : 2. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBM ITTED THAT THE TAX EFFECT IN THE GROUNDS RAISED BY THE REVENUE IS BELOW RS.10 LAKHS. THEREFORE, IN VIEW OF THE CBDT CIRCULAR NO.21/2015 DATED 10 -12-2015 THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE AND SHO ULD BE DISMISSED. 3 THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY CONCEDED THAT THE TAX EFFECT IN THE INSTANT APPEAL FILED BY THE REVENUE IS ADMITTED LY BELOW RS.10 LAKHS. 4. AFTER HEARING THE RIVAL CONTENTIONS MADE BY BOTH THE S IDES, WE FIND THE TAX EFFECT IN THE INSTANT APPEAL FILED BY THE REVENU E IS ADMITTEDLY BELOW RS.10 LAKHS. THEREFORE, IN VIEW OF CIRCULAR NO.21/2015 DATED 10-12-2015 OF CBDT RAISING THE MONETAR Y LIMIT FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE TRIBUNAL, WHICH ALSO APPLIES TO PENDING APPEALS FILED BY THE REVENUE, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE AND HAS TO BE DISMISSED. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE REVENUE IS DISMISSED. CO NO.11/PN/2004 (BY ASSESSEE) : 5. GROUND OF APPEAL NO.1 OF THE CO RAISED BY THE ASSESSEE READS AS UNDER : 1. THE RESPONDENT ASSESSEE DENIES HIS LIABILITY TO PAY SURCHARGE. THE LD.CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE LEVY OF SURCHARGE AS LEVIED BY THE ASSESSING OFFICER. IT MAY PLEASE BE HELD THAT THE R ESPONDENT ASSESSEE IS NOT LIABLE TO PAY ANY SURCHARGE. 3 ITA NO.610/PN/2003 AND CO NO.11/PN/2004 6. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO IN THE B ODY OF THE ASSESSMENT ORDER HAS LEVIED SURCHARGE OF 10% ON THE TA X PAYABLE AS WORKED OUT ON THE BASIS OF THE ASSESSED UNDISCLOSED INCO ME. BEFORE CIT(A) THE ASSESSEE CHALLENGED THE VALIDITY OF THE SURCHARG E LEVIED BY THE AO, HOWEVER, THE LD.CIT(A) CONFIRMED THE LEVY OF SUCH SURCHARGE. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE HAS FILED THE CROSS OBJECTION. 8. AFTER HEARING BOTH THE SIDES, WE FIND THE ISSUE OF LEVY O F SURCHARGE IN CASE OF BLOCK ASSESSMENTS PERTAINING TO TH E PERIOD PRIOR TO 01-06-2002 HAS BEEN SETTLED BY THE LATEST DECISION OF HO NBLE SUPREME COURT IN THE CASE OF CIT VS. VATIKA TOWNSHIP PVT. LTD. RE PORTED IN 367 ITR 466. IT HAS BEEN HELD IN THE SAID DECISION THAT THOU GH PROVISION FOR SURCHARGE UNDER THE FINANCE ACTS HAS BEEN IN EXISTENCE SINCE 1995, THE CHARGE OF SURCHARGE WITH RESPECT TO BLOCK ASSESSM ENTS, HAVING BEEN CREATED FOR THE FIRST TIME BY THE INSERTION OF THE PROVISO TO SECTION 11 3 OF THE I.T. ACT, 1961 BY THE FINANCE ACT, 2002, IT IS CLEARLY A SUBSTANTIVE PROVISION AND IS TO BE CONSTRUED AS PROSPECTIVE IN OPERA TION. THE AMENDMENT NEITHER PURPORTS TO BE MERELY CLARIFICATORY NO R IS THERE ANY MATERIAL TO SUGGEST THAT IT WAS INTENDED BY PARLIAMENT. A CCORDINGLY, IT WAS HELD THAT SURCHARGE WILL NOT BE APPLICABLE TO BLOCK ASS ESSMENTS PERTAINING TO PERIOD PRIOR TO 01-06-2002. SINCE THE BLOCK PERIOD IN THE INSTANT CASE IS ADMITTEDLY FOR THE PERIOD 01-04-1989 TO 08-12-1999, I.E. PRIOR TO 01-06-2002, THEREFORE, SURCHARGE IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. ACCORDINGLY, THE ORDER OF THE CIT(A) IS SET ASIDE AN D THE GROUND OF CROSS OBJECTION NO.1 RAISED BY THE ASSESS EE IN THE CO IS ALLOWED. 4 ITA NO.610/PN/2003 AND CO NO.11/PN/2004 9. GROUND NO.2 OF THE CO RAISED BY THE ASSESSEE READS AS UNDER : 2. THE RESPONDENT ASSESSEE DENIES HIS LIABILITY TO PAY A NY INTEREST U/S.158BFA(1) OF THE I.T. ACT, 1961. THE LD.CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO CHARGE THE SAID INTEREST. THE AFORE SAID DIRECTION OF THE LD.CIT(A) BEING PATENTLY ILLEGAL AND WITHOUT AUTHOR ITY OF LAW THE SAME DESERVES TO BE VACATED. 10. AFTER HEARING BOTH THE SIDES, WE FIND THE ASSESSEE FILED THE RETURN OF UNDISCLOSED INCOME ON 05-09-2000 WHEREAS THE NOTICE U /S.158BC WAS ISSUED ON 27-07-2000 REQUIRING THE ASSESSEE TO FILE T HE RETURN OF UNDISCLOSED INCOME FOR THE BLOCK PERIOD WITHIN 30 DAYS FROM THE RECEIPT OF THE NOTICE. THE NOTICE WAS SERVED ON THE ASSESSEE O N 31-07-2000. THE ASSESSEE DID NOT FILE THE RETURN OF INCOME ON OR BEFO RE 30-08-2000 BUT SOUGHT ADJOURNMENT BY FILING AN APPLICATION ON 22-08-2 000 AND 25-08-2000 WHICH HAS BEEN ALLOWED BY THE AO TILL 06-09-20 00. IN APPEAL THE LD.CIT(A) OBSERVED THAT THE AO DOES NOT HAVE POWER TO EXTEND TIME FOR FILING THE RETURN OF BLOCK PERIOD. HE, THEREFO RE, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY INTEREST U/S.158BFA(1 ) SHOULD NOT BE CHARGED. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE HE DIRECTED THE AO TO CHARGE INTEREST U/S.158BFA AS PER LAW. 11. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DELAY IN RECEIVING OF THE DOCUMENTS FROM THE DEPARTMENT FOR PREPA RING THE RETURN FOR THE BLOCK PERIOD SHOULD BE EXCLUDED FOR COMPUTIN G THE PERIOD OF 30 DAYS. RELYING ON THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF MR. MUKUND KRISHNAJI PURANDARE AND VICE-VE RSA VIDE ITA NO.608/PN/2003 AND CO NO.09/PN/2004 HE SUBMITTED THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE TRIBUNAL HAS RESTOR ED THE ISSUE OF LEVY OF INTEREST U/S.158BFA(1) TO THE FILE OF THE AO FOR FRESH CONSIDERATION. HE ACCORDINGLY SUBMITTED THAT HE HAS NO OBJECTION IF THE 5 ITA NO.610/PN/2003 AND CO NO.11/PN/2004 MATTER IS RESTORED TO THE FILE OF THE AO FOR DECIDING THE IS SUE IN THE LIGHT OF THE DIRECTION OF THE TRIBUNAL. 12. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 13. AFTER HEARING BOTH THE SIDES, WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF MR. MUKUND KRISHNAJI P URANDARE (SUPRA). WE FIND THE TRIBUNAL HAS DISCUSSED THE ISSUE AT PA RA 4 OF THE ORDER AND HAS RESTORED THE ISSUE TO THE FILE OF THE AO FO R FRESH CONSIDERATION BY OBSERVING AS UNDER : 4. WE HAVE HEARD THE PARTIES . THE ONLY GRIEVANCE O F THE ASSESSEE IS THAT THE INTEREST CHARGED BY THE A.O U/S. 158BFA (1) IS ILL EGAL AS ASSESSEE FILED THE RETURN OF INCOME WITHIN 45 DAYS AS PER THE GRACE PERIOD GIVEN BY THE A.O. THE LD COUNSEL SUBMITS THAT THE A.O. HAS FIXED THE TIME LIMIT OF 30 DAYS FOR THE NOTICE ISSUED TO THE ASSESSEE, BUT AS PER LAW, T HE ASSESSEE HAD TIME LIMIT UPTO 45 DAYS. HE PLEADED THAT PRESUMING THERE I S A SMALL DELAY, AND THAT WAS NOT ATTRIBUTABLE TO THE ASSESSEE AS ASSESSEE WAS NO T FURNISHED WITH THE COPIES IN RESPECT OF THE SEIZED DOCUMENTS FO R PREPARING THE RETURN FOR THE BLOCK PERIOD. HENCE, AT LEAST TO THE EXTENT OF THE PERIOD I.E. BETWEEN THE DATE OF THE APPLICATION FOR GETTING THE COPIES T ILL THE DATE OF FURNISHING THE COPIES OF THE SEIZED DOCUMENTS TO THE ASSESSEE, THE P ERIOD IS TO BE EXCLUDED FOR COMPUTING THE PERIOD OF 30 DAYS. THE LD COUNSEL RELIED ON THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE O F CIT VS. MESCO AIRLINES LTD., 327 ITR 554 (DEL.). HE SUBMITS THAT HE HAS NO OB JECTION EVEN IF THE ISSUE OF LEVY OF INTEREST IS RESTORED TO THE FILE OF THE A.O FOR RECONSIDERATION IN THE LIGHT OF THE PRINCIPLES LAID DOWN IN THE CASE OF MESCO AIRLINES LTD.(SUPRA). THE LD. D.R. HAS NO OBJECTION. WE, ACCO RDINGLY, RESTORE THE ISSUE OF LEVY OF INTEREST U/S. 158BFA(1) TO THE FILE OF THE A.O. FOR FRESH CONSIDERATION. ACCORDINGLY, GROUND NO. 2 IS ALLOWED F OR STATISTICAL PURPOSES. 14. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BEN CH OF THE TRIBUNAL CITED (SUPRA) WE RESTORE THE ISSUE TO THE FILE OF T HE AO WITH A DIRECTION TO DECIDE THE ISSUE OF LEVY OF INTEREST U/S.158BF A(1) IN THE LIGHT OF THE DECISION OF THE TRIBUNAL AND IN ACCORDANCE WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. W E HOLD AND DIRECT ACCORDINGLY. GROUND NO.2 OF THE CROSS OBJECTION IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 6 ITA NO.610/PN/2003 AND CO NO.11/PN/2004 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISM ISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08-07-2016. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; ! DATED : 08 TH JULY, 2016. % &'( ) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . THE CIT(A ) - I, PUNE 4. 5. 6. THE CIT CENTRAL, PUNE # &&' , ' , / DR, ITAT, A PUNE; + / GUARD FILE. / BY ORDER, // TRUE COPY // // # & //TRUE -. & ' / SR. PRIVATE SECRETARY ' , / ITAT, PUNE