Hotel Panchami, Thiruvalla V. ACIt, Calicut

CO 2/COCH/2009

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7602 (ITAT-COCHIN)
• Duration Of Justice: 3 year(s) 6 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 10-08-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-08-2012
• Assessment Year: misc
• Appeal Filed On: 15-01-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Assessee Lawyers: K I JOHN
• Keywords: Period of limitation; Block assessment

Judgement Text

1 IT(SS)A NO.81 & 123/COCH/2005 CO 02/COCH/2009 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.T(SS)A NO. 81/COCH/2005 (BLOCK PERIOD 01-04-1989 TO 29-07-1999) THE A.C.I.T.,CENT.CIR. VS M/S HOTEL PANCHAMI CALICUT RAILWAY STATION ROAD THIRUVALLA PAN : NOT AVAILABLE (APPELLANT) (RESPONDENT) I.T(SS)A NO. 123/COCH/2005 (BLOCK PERIOD 01-04-1989 TO 29-07-1999) THE A.C.I.T.,CENT.CIR. VS M/S HOTEL REDWOOD (P) LTD CALICUT RAILWAY STATION ROAD THIRUVALLA PAN : AAACR9834N (APPELLANT) (RESPONDENT) C.O. NO.02/COCH/2009 (ARISING OUT OF I.T(SS)A NO. 81/COCH/2005) (BLOCK PERIOD 01-04-1989 TO 29-07-1999) M/S HOTEL PANCHAMI VS A.C.I.T., CENT.CIR. THIRUVALLA CALICUT (APPELLANT) (RESPONDENT) REVENUE BY : MS. A.S. BINDHU ASSESSEE BY : SHRI K.I. JOHN DATE OF HEARING : 06/08/2012 DATE OF PRONOUNCEMENT : 10/08/2012 2 IT(SS)A NO.81 & 123/COCH/2005 CO 02/COCH/2009 O R D E R PER N.R.S. GANESAN (JM) THE REVENUE HAS FILED THE APPEALS AGAINST TWO INDE PENDENT ORDERS OF COMMISSIONER OF INCOME-TAX(A) IN RESPECT OF TWO INDE PENDENT ASSESSEES. ONE OF THE ASSESSEES HAS ALSO FILED CROSS OBJECTION. SINC E COMMON ISSUE ARISES FOR CONSIDERATION IN THE APPEALS AND THE CROSS OBJECTIO N WE HEARD THEM TOGETHER AND DISPOSE OF THE SAME BY THIS COMMON ORDER. 2. MS. S BINDHU, THE LD.DR SUBMITTED THAT THE COMMI SSIONER OF INCOME-TAX(A) CANCELLED THE ASSESSMENT ON THE GROUND THAT IT WAS BARRED BY LIMITATION AND NO SEIZED MATERIAL WAS AVAILABLE IN RESPECT OF THESE A SSESSEES FOR COMPLETING THE BLOCK ASSESSMENT. REFERRING TO THE ASSESSMENT ORDER , THE LD.DR SUBMITTED THAT THERE WAS A SEARCH U/S 132A OF THE ACT ON 27-09-1999 AND INCRIMINATING MATERIALS WERE FOUND IN RESPECT OF THESE TWO ASSESSEES DURING THE COURSE OF SEARCH PROCEEDINGS. SINCE THE SEARCH WAS CONDUCTED IN THE CASE OF THE PARTNERS OF THE ASSESSEE AND THE ACCOUNTANT, SHRI K.K. SASI PROCEEDIN GS WERE INITIATED U/S 158BD OF THE ACT. THE LD.DR SUBMITTED THAT THE SEIZED DO CUMENTS MARKED AS KPA 96 AND KPA 143 WERE FOUND IN THE PREMISES OF HOTEL PA NCHAMI WHICH RELATE TO THE PRESENT ASSESSEES. THE SEIZED MATERIAL A-3 WAS RE COVERED FROM SHRI K.K. SASI WHICH RELATES TO HOTEL AMRUTHA & BAR. THEREFORE, I T IS NOT CORRECT TO SAY THAT THERE WAS NO SEIZED MATERIAL FOR THE PURPOSE OF COM PLETING THE ASSESSMENT. REFERRING TO THE LIMITATION, THE LD.DR POINTED OUT THAT NOTICE WAS ISSUED U/S 158BD AND SERVED ON THE ASSESSEES ON 02-08-2001. THE BLOCK ASSESSMENT WAS COMPLETED ON 30-07-2003. SECTION 158BE(2)(B) PROVIDE S TWO YEARS FROM THE END OF THE MONTH IN WHICH NOTICE WAS SERVED ON THE ASSE SSEE. THEREFORE, ACCORDING TO THE LD.DR, THE ASSESSMENT WAS COMPLETED WITHIN T HE PERIOD OF LIMITATION AS PROVIDED IN SECTION 158BE OF THE ACT. THE LD.DR FU RTHER SUBMITTED THAT IN SPITE OF DIRECTION OF THIS TRIBUNAL THE REVENUE COULD NOT PR ODUCE THE SEIZED MATERIAL FOR CONSIDERATION. REFERRING TO THE AFFIDAVIT FILED BY SHRI P.N. DEVADASAN, C.I.T., KOZHIKODE, THE LD.DR POINTED OUT THAT THE ITO, KOZHIKOD E HAS NOT RECEIVED THE SEIZED RECORDS FROM THE ASST. COMMISSIONER OF INCOM E-TAX, CENTRAL CIRCLE, CALICUT. THE LD.DR FURTHER SUBMITTED THAT SEIZED MATERIAL KPA 143 WAS RETURNED TO THE ASSESSEE ON 19-06-2006 BY THE DY.C.I.T., CENT.CIR.1, KOZHIKODE. THIS FACT IS 3 IT(SS)A NO.81 & 123/COCH/2005 CO 02/COCH/2009 DISCLOSED IN THE AFFIDAVIT FILED BY SMT. PREETA HAR IT, C.I.T., KOTTAYAM. THE C.I.T. ALSO STATED THAT EFFORTS WERE MADE TO GET BACK THE M ATERIAL DOCUMENT. AN AFFIDAVIT FROM SMT. TRIPTI BISWAS, THE C.I.T., CENT RAL CIRCLE, COCHIN HAS ALSO BEEN FILED. THE FACT REMAINS IS THAT PART OF THE SEIZED MATERIALS WERE RETURNED TO THE REPRESENTATIVE OF THE ASSESSEES AND THE REMAINING S EIZED MATERIAL COULD NOT BE LOCATED. THEREFORE, IT COULD NOT BE PRODUCED BEFOR E THIS TRIBUNAL. THE LD.DR FURTHER SUBMITTED THAT THERE ARE SEIZED MATERIAL WH ICH WAS RELIED UPON BY THE ASSESSING OFFICER FOR COMPLETING THE ASSESSMENT. T HEREFORE, IT IS NOT CORRECT TO SAY THAT THERE IS NO SEIZED MATERIAL AT ALL. MEREL Y BECAUSE IT COULD NOT BE PRODUCED BEFORE THE TRIBUNAL IT CANNOT BE SAID THAT THERE WAS NO SEIZED MATERIAL. 3. ON THE CONTRARY, SHRI K.I. JOHN, THE LD.REPRESENT ATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAD NO JURISDI CTION TO PASS THE ASSESSMENT ORDER. ACCORDING TO THE LD.REPRESENTATIVE, THE ASS ESSING OFFICER WAS NOT SPECIFICALLY APPOINTED BY AN ORDER OF THE COMMISSIO NER OR CHIEF COMMISSIONER U/S 158BG OF THE ACT. THE LD.REPRESENTATIVE PLACED HIS RELIANCE ON THE JUDGMENT OF THE APEX COURT IN K.P. MOHAMMED SALIM VS C.I.T. ( 2008) 300 ITR 302(SC). THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT INITIALLY THE NOTICE WAS ISSUED U/S 158BC OF THE ACT. THE COPY OF THE NOTICE IS AVAILABLE AT PAGE 10 OF THE PAPER BOOK. THIS NOTICE IS DATED 22-12-2000. SUBSEQUENTLY THE JURISDI CTION OF THE ASSESSING OFFICER WAS TRANSFERRED FROM I.T.O., THIRUVALLA TO DY.C.I.T ., CENTRAL CIRCLE, KOZHIKODE BY THE C.C.I.T. BY AN ORDER DATED 17-04-2001. THE COPY OF THE NOTICE IS AVAILABLE AT PAGE 11 OF THE PAPER BOOK. THE LD.REPRESENTATIVE FU RTHER SUBMITTED THAT NOTICE ISSUED U/S 158BC WAS CANCELLED ON THE GROUND THAT T HERE WAS NO SEARCH IN THE CASE OF THE ASSESSEES AND NOTICE U/S 158BD WAS ISSU ED. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSMENT HAS TO BE COMPLET ED WITHIN TWO YEARS FROM THE DATE OF SEARCH. ADMITTEDLY, THE DATE OF SEARCH IS 27-09-1999. THEREFORE, THE ORDER PASSED BY THE ASSESSING OFFICER ON 30-07-2003 I S BARRED BY LIMITATION. THE LD.REPRESENTATIVE FURTHER SUBMITTED THAT THERE IS N O SEIZED MATERIAL ON RECORD IN RESPECT OF THESE TWO ASSESSEES. THEREFORE, THERE C ANNOT BE ANY UNDISCLOSED INCOME FOR THE BLOCK PERIOD. ACCORDING TO THE LD.RE PRESENTATIVE, THE UNDISCLOSED INCOME HAS TO BE COMPUTED ONLY ON THE BASIS OF THE EVIDENCE FOUND DURING THE COURSE OF SEARCH OPERATION. IN THIS CASE NO EVIDEN CE WAS FOUND DURING THE COURSE OF SEARCH OPERATION IN RESPECT OF THESE ASSESSEES. ON A QUERY FROM THE BENCH AS 4 IT(SS)A NO.81 & 123/COCH/2005 CO 02/COCH/2009 TO WHO HAS RECEIVED THE SEIZED MATERIAL FROM THE CO NCERNED OFFICER, THE LD.REPRESENTATIVE SUBMITTED THAT THE SEIZED MATERIA L APPEARS TO HAVE BEEN RETURNED TO THE REPRESENTATIVE OF HOTEL AMRUTA & BA R AND NOT TO THE PRESENT ASSESSEES. THEREFORE, THE PRESENT ASSESSEES HAVE N OTHING TO DO WITH THE RETURN OF THE DOCUMENTS. THE FACT REMAINS IS THAT ACCORDI NG TO THE LD.REPRESENTATIVE FOR THE ASSESSEES, THERE IS NO SEIZED MATERIAL ON RECOR D. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) HAS RIGHTLY CANCELLED THE ASSESSMENT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE MATERIAL AVAILABLE ON RECORD. THE MAIN CONTENTION OF THE AS SESSEE IS THAT THERE IS NO SEIZED MATERIAL ON RECORD, THEREFORE, THERE CANNOT BE ANY UNDISCLOSED INCOME FOR THE BLOCK PERIOD. NO DOUBT, FOR THE PURPOSE OF COMP UTING THE UNDISCLOSED INCOME, THE ASSESSING OFFICER HAS TO PLACE RELIANCE ON THE EVIDENCE FOUND DURING THE COURSE OF SEARCH OPERATION AND THE INFORMATION WHICH IS RELATABLE TO THE EVIDENCE FOUND DURING THE COURSE OF SEARCH OPERATIO N. IN VIEW OF THIS CONTENTION OF THE ASSESSEE, THIS TRIBUNAL CALLED FOR THE SEIZE D MATERIAL. HOWEVER, THE DEPARTMENT COULD NOT PRODUCE THE SEIZED MATERIAL BE FORE THIS TRIBUNAL. THEREFORE, THIS TRIBUNAL DIRECTED THE CONCERNED COM MISSIONERS TO FILE AFFIDAVITS EXPLAINING THE REASONS FOR NOT PRODUCING THE SEIZED MATERIAL BEFORE THIS TRIBUNAL FOR CONSIDERATION. THREE AFFIDAVITS HAVE BEEN FILE D BY THREE COMMISSIONERS OF INCOME-TAX. ONE AFFIDAVIT HAS BEEN FILED BY SHRI P. N. DEVADASAN, THE C.I.T., KOZHIKODE. HE CLAIMS THAT ON TRANSFER OF JURISDICTIO N, THE SEIZED MATERIALS WERE NOT RECEIVED FROM THE I.T.O. SMT. PREETA HARIT, TH E C.I.T., KOTTAYAM CLAIMS IN HER AFFIDAVIT THAT SEIZED MATERIALS KPA 96 AND KPA 143 SEIZED FROM THE BUSINESS PREMISES OF HOTEL AMRUTHA & BAR WERE NOT UNDER HER ADMINISTRATIVE CONTROL. SMT. TRIPTI BISWAS, THE C.I.T., CENTRAL, COCHIN CLA IMS THAT THERE IS NO EVIDENCE REGARDING TRANSFER OF SEIZED MATERIAL TO THE CONCER NED ASSESSING OFFICER AVAILABLE ON FILE. SHE FURTHER CLAIMS THAT AS PER THE ACKNOWL EDGEMENT AVAILABLE ON RECORD RECEIVED FROM THE DY.C.I.T., CENT.CIR.,KOZHIKODE, ONE SHRI K SASIDHARAN, CHARTERED ACCOUNTANT HAS RECEIVED PANCHANAMA ITEMS 1 TO 29 (E XCEPT 17) AND 1 TO 145 (EXCEPT 96). THE SAID SHRI K SASIDHARAN, CHARTERED ACCOUNTANT HAS ALSO GIVEN AN UNDERTAKING TO THE EFFECT THAT THE RELEASED DOCUMENT S WILL BE PRODUCED AS AND WHEN REQUIRED BY THE DEPARTMENT. HOWEVER, THE DEPA RTMENT HAS NOT TAKEN ANY EFFORT TO GET BACK THE DOCUMENT FROM SHRI K SASIDHARA N, CHARTERED ACCOUNTANT 5 IT(SS)A NO.81 & 123/COCH/2005 CO 02/COCH/2009 AND PRODUCED THE SAME BEFORE THIS TRIBUNAL FOR CONS IDERATION. FROM THESE FACTS ON RECORD IT IS VERY CLEAR THAT THERE ARE SOME SEIZ ED MATERIAL AVAILABLE ON RECORD; PART OF THE DOCUMENTS WERE RETURNED TO SHRI K. SASID HARAN, CHARTERED ACCOUNTANT AND PART OF THE DOCUMENTS COULD NOT BE L OCATED BY THE DEPARTMENT. UNLESS AND UNTIL THE SO-CALLED SEIZED MATERIALS ARE GONE THROUGH, THIS TRIBUNAL MAY NOT BE ABLE TO COME TO A CONCLUSION WHETHER THE RE WAS ANY SEIZED MATERIAL AVAILABLE ON RECORD. IN THESE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE OPINION THAT THE ASSESSING OFFICER HAS TO GET BACK THOSE DOCUMENT S FROM SHRI K. SASIDHARAN, CHARTERED ACCOUNTANT AND LOCATE THE OTHER PART OF T HE DOCUMENTS AVAILABLE WITH THE DEPARTMENT AND THEREAFTER RECONSIDER THE MATERI AL IN ACCORDANCE WITH LAW. 5. THE BEST EFFORTS TAKEN BY THE TRIBUNAL TO CONSIDE R THE DOCUMENTS IN THE APPEALS HAS FAILED SINCE THE DEPARTMENT COULD NOT P RODUCE THE SAME IN SPITE OF SEVERAL OPPORTUNITIES GIVEN BY THE TRIBUNAL. THERE FORE, THIS TRIBUNAL IS OF THE OPINION THAT THE MATTER NEEDS TO BE RECONSIDERED AF TER CONSIDERING THE SEIZED MATERIAL. SINCE THE MAIN ISSUE WITH REGARD TO THE S EIZED MATERIAL NEEDS TO BE RECONSIDERED BY ASSESSING OFFICER, THIS TRIBUNAL IS OF THE OPINION THAT THE ISSUE OF LIMITATION ALSO NEEDS TO BE RECONSIDERED BY THE ASS ESSING OFFICER. THE ASSESSING OFFICER SHALL ALSO CONSIDER THE CONTENTION OF THE L D.REPRESENTATIVE FOR THE ASSESSEES AS TO WHETHER THE ASSESSING OFFICER HAS J URISDICTION TO PASS THE ASSESSMENT ORDER IN THE LIGHT OF THE PROVISIONS OF SECTION 158BG OF THE ACT. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE AND THE ENTIRE ISSUE IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICE R. THE ASSESSING OFFICER SHALL CONSIDER ALL THE ISSUES RAISED BY THE ASSESSEES INC LUDING THE JURISDICTION OF THE ASSESSING OFFICER TO PASS THE ORDER, THE LIMITATION IN COMPLETING THE ASSESSMENT PROCEEDINGS AND THEREAFTER DECIDE THE ISSUE IN ACCO RDANCE WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEES. 6. THE CROSS OBJECTION OF THE ASSESSEE IN THE CASE OF M/S HOTEL PANCHAMI IS WITH REGARD TO JURISDICTION OF THE ASSESSING OFFICE R. SINCE WE HAVE REMITTED BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION, THE CROSS OBJECTION BECOMES INFRUCTUOUS. 6 IT(SS)A NO.81 & 123/COCH/2005 CO 02/COCH/2009 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE I N ITSS 81 & 123/COCH/2005 ARE ALLOWED FOR STATISTICAL PURPOSE AND THE CROSS O BJECTION OF THE ASSESSEE IN C.O. NO.02/COCH/2009 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH AUGUST, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 10 TH AUGUST, 2012 PK/- COPY TO: 1. THE APPELLANTS 2. THE RESPONDENTS 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH