M/s. Apporva Extrusion Pvt. Ltd., New Delhi V. DCIT, New Delhi

CO 303/DEL/2010

• Counselvise Citation: [2014] 123 COUNSELVISE.COM (IT) 0016 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-10-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 08-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MISRA
• Assessee Lawyers: SURESH ANANTHARAMAN
• Keywords: Business income; Document seized; Documents seized
• Section: 143(3); 153A; 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : A : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI GEORGE GEORGE K. , JM ITA NO.3308/DEL/2010 ASSESSMENT YEAR : 2002-03 DCIT, CENT. CIRCLE-18, ARA CENTRE, E-2, JHANDEWALAN EXTENSION, NEW DELHI. VS. AP O ORVA EXTRUSION PVT. LTD., 305, 3 RD FLOOR, BHANOT CORNER, PAMPOSH ENCLAVE, GK-1, NEW DELHI. PAN : AAACA2120L CO NO.303/DEL/2010 (ITA NO.3308/DEL/2010) ASSESSMENT YEAR : 2002-03 AP O ORVA EXTRUSION PVT. LTD., 305, 3 RD FLOOR, BHANOT CORNER, PAMPOSH ENCLAVE, GK-1, NEW DELHI. PAN : AAACA2120L VS. DCIT, CENT. CIRCLE-18, ARA CENTRE, E-2, JHANDEWALAN EXTENSION, NEW DELHI. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI SURESH ANANTHARAMAN, CA DEPARTMENT BY : SHRI A. MISRA, CIT, DR ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARISE OUT OF THE ORDER PASSED BY THE CIT(A) ON 30.0 4.2010 IN RELATION TO THE ASSESSMENT YEAR 2002-03. ITA NO.3308/DEL/2010 CO NO.303/DEL/2010 3 3. THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTI NY U/S 153C OF THE ACT. IN RESPONSE TO THE NOTICE ISSUED, THE ASS ESSEE FILED RETURN OF INCOME FOR THE A.Y. 2002-03 DECLARING NIL INCOME. THE ASSESSEE HAD PAID TAXES ON BOOK PROFIT OF ` 2,68,344/- U/S 115 JB. EVENTUAL ASSESSMENT WAS COMPLETED U/S 153C READ WITH SECTION 143(3) OF THE ACT DETERMINING THE BOOK PROFIT AT THE SAME LEVEL O F ` 2,68,344/-, BUT CHANGING THE HEAD OF INCOME FROM BUSINESS INCOME TO INCOME FROM OTHER SOURCES. THE ASSESSEE CHALLENGED THE ASSESS MENT ORDER BEFORE THE LD. CIT(A) CONTENDING , INTER ALIA , THAT NO ADDITION WAS MADE BY THE AO ON THE BASIS OF DOCUMENTS SEIZED WHICH FORMED TH E BASIS FOR ISSUING NOTICE U/S 153C OF THE ACT AND HENCE THE AS SESSMENT BE QUASHED. THE LD. CIT(A) OBSERVED THAT THE DOCUMENT S CLAIMED AS BELONGING TO THE ASSESSEE WERE NOT DISCUSSED IN THE ASSESSMENT ORDER. CONSIDERING CERTAIN DECISIONS, THE LD. CIT (A) CAME TO HOLD THAT SINCE THE DOCUMENTS SEIZED DID NOT BELONG TO THE AS SESSEE OR RELATE TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THE AO WAS NOT JUSTIFIED IN INITIATING THE PROCEEDINGS U/S 153C READ WITH SECTION 153 OF T HE ACT. HE, THEREFORE, SET ASIDE THE INITIATION OF PROCEEDI NGS U/S 153C OF THE ACT. IN VIEW OF HIS DECISION THAT THE AO DID NOT H AVE ANY JURISDICTION TO INITIATE OR MAKE ASSESSMENT U/S 153A READ WITH SECT ION 153C, HE DID ITA NO.3308/DEL/2010 CO NO.303/DEL/2010 5 WHICH WERE FOUND FROM THE PREMISES OF THE PERSONS S EARCHED. WHEN WE PERUSE THESE DOCUMENTS, IT CAN BE EASILY NOTICED THAT THE BANK BOOKS BEAR THE NAME OF THE ASSESSEE AND RELATE TO F INANCIAL YEARS STARTING FROM 1.4.2004. PAGES 31-35 IS A PRINT-OUT OF THE TRIAL BALANCE OF THE ASSESSEE AS ON 31.3.2004 WHICH WAS AGAIN FOU ND FROM THE PREMISES OF THE PERSON SEARCHED. THERE IS ANOTHER DOCUMENT ON PAGE NO.36 WHICH IS A CERTIFICATE ISSUED BY THE ASSESSEE CONFIRMING THAT IT HAD GIVEN A SUM OF ` 10 LAC TO MR. S.A. HASHMI VIDE CHEQUE NO.995233 DATED 2.6.2004. A CLOSE SCRUTINY OF THESE DOCUMENTS BELONGING TO THE ASSESSEE FOUND FROM THE PREMISES O F THE PERSONS SEARCHED, INDICATES THAT THESE BELONG TO THE ASSESS EE BUT PERTAIN TO A PERIOD FROM 1.4.2004. IN OTHER WORDS, THESE DOCUME NTS RELATE TO ASSESSMENT YEAR 2005-06 ONWARDS. THE LD. AR BOLSTE RED THE VIEW CANVASSED BY THE LD. CIT(A) QUASHING THE INITIATION OF ASSESSMENT FOR THE YEAR UNDER CONSIDERATION BY CONTENDING THAT NON E OF THE SEIZED DOCUMENTS RELATE TO THE ASSESSMENT YEAR UNDER CONSI DERATION. IN THE OPPOSITION, THE LD. DR CONTENDED THAT THE ASSESSMEN T WAS RIGHTLY FRAMED U/S 153C READ WITH SECTION 153A OF THE ACT. 5. IN ORDER TO ANSWER WHETHER THE QUASHING OF THE I NITIATION OF ASSESSMENT FOR THE YEAR UNDER CONSIDERATION ON THE GIVEN COUNT IS ITA NO.3308/DEL/2010 CO NO.303/DEL/2010 7 SINCE THE ASSESSMENT OR REASSESSMENT OF SUCH OTHER PERSON HAS TO BE DONE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, LET US EXAMINE THE PRESCRIPTION OF THE RELEVANT PARTS OF S ECTION 153A(1), WHICH IS AS UNDER :- NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 13 2 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISIT IONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE A SSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNIS H WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B) , IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PART ICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRE D TO BE FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSME NT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON IS MADE: 7. ON CIRCUMSPECTION OF THE CLAUSE (A) OF THE ABOVE PROVISION, IT IS AMPLY CLEAR THAT THE AO SHALL ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH THE RETURN OF INCOME IN RESPECT OF E ACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS AS REFERRED TO IN CLAUSE (B) AND, THE LATTER CLAUSE, PROVIDES THAT THE ASSESSING OFFICER SHALL ASSESSS OR REASSESS THE TOTAL INCOME OF SIX ASSESSM ENT YEARS ITA NO.3308/DEL/2010 CO NO.303/DEL/2010 9 MATERIAL IS FOUND. WHEN WE READ SECTION 153C IN A H OLISTIC MANNER, IT BECOMES EVIDENT THAT THE TRIGGERING POINT FOR ASSUM ING JURISDICTION ON THE PERSON OTHER THAN THE PERSON SEARCHED U/S 153C IS THE FINDING OF ANY MONEY, BULLION, JEWELLERY OR BOOKS OF ACCOUNT O R DOCUMENT FROM THE PERSON SEARCHED. ONCE ANY MONEY, BULLION, JEWL LERY OR BOOKS OF ACCOUNT OR DOCUMENT SEIZED OR REQUISITIONED FROM TH E PERSON SEARCHED ARE FOUND TO BE BELONGING TO THE OTHER PER SON, THEN, THE ASSESSMENT OR REASSESSMENT OF SUCH OTHER PERSON IS TO BE NECESSARILY COMPLETED IN TERMS OF SECTION 153A, WHICH IN NO UNC ERTAIN TERMS REFERS TO SIX ASSESSMENT YEARS IMMEDIATELY PRECEDIN G THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SE ARCH IS CONDUCTED OR REQUISITION IS MADE. FURTHER, THE USE OF THE W ORD SHALL IN SECTION 153A IMMEDIATELY BEFORE CLAUSE (A) HAS LEFT NOTHING TO DOUBT THAT THE ASSESSMENT IS REQUIRED TO BE MADE FOR ALL THE SIX A SSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON IS MADE. AS THE LEGISLATURE HAS NOT MADE THE MAKING OF SUCH ASSESSM ENT OR REASSESSMENT FOR ALL THE SIX ASSESSMENT YEARS SUBJE CT TO ANY CONDITION OF FINDING OF ANY INCRIMINATING MATERIAL OR OTHERWI SE, WE ARE UNABLE TO ITA NO.3308/DEL/2010 CO NO.303/DEL/2010 11 ON THE INITIATING OR MAKING OF ASSESSMENT OR REASSE SSMENT FOR SOME OF THE YEARS OF OTHER PERSON, MORE SO, WHEN SECTION 1 53C(1) HAS BEEN EXPRESSLY MADE TO ACCORD WITH THE PROVISIONS OF SEC TION 153A. WE, THEREFORE, JETTISON THE CONTENTION URGED ON BEHALF OF THE ASSESSEE AS SANS MERIT. 9. IN ORDER TO SUPPORT THE IMPUGNED ORDER, THE LD. AR ALSO TOOK SUPPORT OF SUB-SECTION (2) OF SECTION 153C TO CONTE ND THAT THE ASSESSMENT OF THE OTHER PERSON CAN BE MADE ONLY FOR SUCH ASSESSMENT YEARS FOR WHICH THE MONEY, BULLION, JEWE LLERY OR BOOKS OF ACCOUNT OR OTHER DOCUMENTS ARE FOUND AND FOR NO OTH ER YEARS. THIS WAS COUNTERED BY THE LD. DR. 10. TO APPRECIATE THIS CONTENTION RAISED ON BEHAL F OF THE ASSESSEE, IT WOULD BE APT TO NOTE THE PRESCRIPTION OF SUB-SECTIO N (2) OF SECTION 153C, WHICH RUNS AS UNDER:- (2) WHERE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED AS REFERRED TO IN SUB-SECTION (1) HAS OR HAVE BEEN RECEIVED BY THE ASSESSING OFFICER HAVING JURISDICTI ON OVER SUCH OTHER PERSON AFTER THE DUE DATE FOR FURNISHING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A AND IN RESPECT OF SUCH ASSESSMENT YEAR ITA NO.3308/DEL/2010 CO NO.303/DEL/2010 13 ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH IS CONDUCTED U/S 132 OR REQUISITION IS MADE U/S 132A. THUS, IT IS AMPLY CLEAR THAT WHEREAS SUB-SECTION (2) OF SECTION 153C DEALS WITH THE ASSESSMENT FOR THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED, SUB-SECTION (1) OF SECTI ON 153C READ WITH SECTION 153A REFERS TO SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. AS WE ARE PRESENTLY CONCERNED WITH ONE OF THE SIX ASSESSMENT YEARS IMMEDIATELY PR ECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SUCH SEARCH WAS CONDUCTED, IT IS THE MANDATE OF SUB-SECTION (1) OF SECTION 153C READ WITH SECTION 153A WHICH SHALL APPLY. 12. REVERTING TO THE FACTS OF THE INSTANT CASE, IT IS NOTICED THAT THE DOCUMENTS FOUND FROM THE PERSONS SEARCHED, PLACED A T PAGES 26-36 OF THE DEPARTMENTAL PAPER BOOK, DO BELONG TO THE AS SESSEE. AS SUCH, THERE CAN BE NO QUESTION OF LACK OF JURISDICTION OF THE AO TO INITIATE ASSESSMENT OF THE ASSESSEE U/S 153C READ WITH SECTI ON 153A OF THE ACT FOR THE INSTANT YEAR, WHICH IS ONE OF THE SIX A SSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH WAS CONDUCTED. IN VIEW OF THE FOREGOING ITA NO.3308/DEL/2010 CO NO.303/DEL/2010 15 AS PER LAW, IN CONSONANCE WITH OUR ABOVE DIRECTIONS . NEEDLESS TO SAY, THE ASSESSEE WILL BE ALLOWED A REASONABLE OPPORTUNI TY OF BEING HEARD IN SUCH FRESH PROCEEDINGS. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED AND C.O. OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 09.10.201 4. SD/- SD/- [ GEORGE GEORGE K. ] [ R.S. SYAL ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 09 TH OCTOBER, 2014. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI. *