Smt. Babita Jain, Gwalior V. A.C.I.T., Circle-1, Gwalior

CO 33/AGR/2011

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8171 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 11-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-01-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 05-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: V BAPNA
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure
• Section: 142(1); 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 150/AGRA/2011 ASSTT. YEAR : 2006-07 A.C.I.T., CIRCLE-1, VS. SMT. BABITA JAIN, GWALIOR. JAINA JEWELLERS, SARAFA BAZAR, LASHKAR, GWALIOR. (PAN : AESPJ 2883 A) C.O. NO. 33/AGRA/2011 (IN ITA NO. 150/AGRA/2011) ASSTT. YEAR : 2006-07 SMT. BABITA JAIN, VS. A.C.I.T., CIRCLE-1, JAINA JEWELLERS, SARAFA BAZAR, GWALIOR. LASHKAR, GWALIOR. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI WASEEM ARSHAD, SR. D.R. ASSESSEE BY : SHRI V. BAPNA, C.A. DATE OF HEARING : 09.01.2013 DATE OF PRONOUNCEMENT OF ORDER : 11.01.2013 ORDER PER BHAVNESH SAINI, J.M.: THE DEPARTMENTAL APPEAL AS WELL AS THE CROSS-OBJEC TION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A), GWALIOR D ATED 10.02.2011 FOR THE ASSESSMENT YEAR 2006-07. ITA NO. 150 & C.O. NO. 33/AGRA/2011 2 2. IN THE DEPARTMENTAL APPEAL, THE REVENUE CHALLENG ED THE ORDER OF THE LD. CIT(A) IN HOLDING THAT THE ISSUE OF NOTICE U/S. 143 (2) IS COMPULSORY FOR COMPLETION OF ASSESSMENT PROCEEDING IGNORING THE FACT THAT THE AO HAS ISSUED NOTICE U/S. 153A/143(3) U/S. 142(1) DATED 03.09.2009. 3. THE BRIEF FACTS OF THE CASE ARE THAT SURVEY U/S. 133A, WHICH WAS CONVERTED INTO SEARCH AND SEIZURE OPERATION U/S. 132A, HAS BE EN CARRIED OUT AT THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE AND FAMILY MEMBERS ON 20.02.2008. THE RETURN OF INCOME WAS FILED IN RESPONSE TO NOTICE U/ S. 153A OF THE IT ACT AND THE AO COMPLETED THE ASSESSMENT ORDER U/S. 153A ON 24.1 2.2009 AND COMPUTED TOTAL INCOME OF ASSESSEE AT RS.14,98,839/- BY MAKING ADDI TION OF RS.1,46,230/- AS INCOME FROM UNDISCLOSED SOURCES, RS.11,20,000/- AS UNEXPLAINED INVESTMENT AND RS.2,00,000/- AS UNEXPLAINED CASH DEPOSIT. ADDITION S WERE CHALLENGED BEFORE THE LD. CIT(A) AND ASSESSEE RAISED ADDITIONAL GROUND OF APPEAL STATING THAT ENTIRE ASSESSMENT ORDER PASSED U/S. 153A IS BAD IN LAW AS NO NOTICE U/S. 143(2) HAS BEEN ISSUED BEFORE COMPLETION OF ASSESSMENT BY THE AO. T HE ASSESSEE REFERRED TO THE ORDER OF ITAT AGRA BENCH IN SUPPORT OF THE SAME CON TENTION AS WELL AS THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HO TEL BLUE MOON, 320 ITR 362. THE LD. CIT(A) FOLLOWING THE ORDER OF THE TRIBUNAL HELD THAT SINCE NO NOTICE U/S. ITA NO. 150 & C.O. NO. 33/AGRA/2011 3 143(2) HAS BEEN ISSUED, THEREFORE, IT IS NON-CURABL E DEFECT AND QUASHED THE ASSESSMENT ORDER. 4. THE LD. REPRESENTATIVES OF BOTH THE PARTIES SUBM ITTED THAT THE ISSUE IS NOW COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADDHA VS. ITO, 337 ITR 399 IN W HICH IT WAS HELD A SEARCH UNDER SECTION 132(1) OF THE ACT WAS CARRIE D OUT IN THE RESIDENTIAL PREMISES OF THE ASSESSEE AS WELL AS HIS BANK LOCKER. IN THE COURSE OF SEARCH, CASH AND JEWELLERY WERE FOUND AT THE RESIDENCE AND JEWELLERY WAS FOUND IN THE LOCKER. IN RESPONSE TO A NOTICE UNDER SECTION 153A, THE ASSESSEE FILED A RETURN DECLARING A TOTAL INCOME OF RS.90,080. TWO QUESTIONNAIRES WERE ISSUED TO THE AS SESSEE WHICH WERE DULY COMPLIED WITH BY HIM. AFTER HEARING THE ASSESS EE, THE TOTAL INCOME WAS COMPUTED AT RS.23,31,760/-. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER (APPEALS). AN ADDITI ONAL GROUND TAKEN BEFORE THE COMMISSIONER (APPEALS) WAS THAT SI NCE THE ISSUANCE OF A NOTICE UNDER SECTION 143(2) IS A MANDATORY REQ UIREMENT, THE ASSESSMENT WAS BAD IN LAW AND VOID AB INITIO AND RE QUIRED TO BE CANCELLED. THE COMMISSIONER (APPEALS) DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE AND UPHELD THE ASSESSMEN T AS FRAMED BY THE ASSESSING OFFICER. ANOTHER GROUND TAKEN BEFORE THE COMMISSIONER (APPEALS) WAS AGAINST THE ADDITION OF RS.10 LAKHS U NDER SECTION 69A OF THE ACT IN THE HANDS OF THE ASSESSEE IN RESPECT OF CASH SEIZED FROM AN EMPLOYEE OF THE ASSESSEE. THE ASSESSEE CONTENDED THAT THE AMOUNT BELONGED TO HIS NEPHEW S, WHO HAD SENT THE MONEY FO R A PROPERTY TRANSACTION. TO SUPPORT THIS CONTENTION, HE FILED A COPY OF A RECOVERY SUIT FILED BY S. THE COMMISSIONER (APPEALS) DID NOT ACCEPT THE EXPLANATION. THIS ORDER WAS UPHELD BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT : HELD, DISMISSING THE APPEAL, THAT (I) NO SPECIFIC NOTICE WAS REQUIRED UNDER SECTION 143(2) OF THE ACT WHEN THE N OTICE AS REQUIRED UNDER SECTION 153A(1)(A) OF THE ACT WAS ALREADY GIV EN. IN ADDITION, THE TWO QUESTIONNAIRES ISSUED TO THE ASSESSEE WERE SUFFICIENT SO AS TO ITA NO. 150 & C.O. NO. 33/AGRA/2011 4 GIVE NOTICE TO THE ASSESSEE, ASKING HIM TO ATTEND T HE OFFICE OF THE ASSESSING OFFICER IN PERSON OR THROUGH A REPRESENTA TIVE DULY AUTHORIZED IN WRITING OR PRODUCE OR CAUSE TO BE PRO DUCED AT THE GIVEN TIME ANY DOCUMENTS, ACCOUNTS, AND ANY OTHER EVIDENC E ON WHICH HE MAY RELY IN SUPPORT OF THE RETURN FILED BY HIM. 5. THE LD. DR SUBMITTED THAT THE AO HAS ISSUED NOTI CE U/S. 153A/142(1) ON 03.09.2009. THEREFORE, THE ISSUE IS COVERED IN FAVO UR OF THE REVENUE BY THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADDHA (SUPRA), WHICH FACT HAS NOT BEEN DISPUTED BY THE LD. COUNSEL FOR THE ASSESSEE. IT MAY ALSO BE NOTED HERE THAT THE LD. CIT(A) DID NOT DECIDE THE A PPEAL OF ASSESSEE ON MERITS BECAUSE THE APPEAL WAS ALLOWED FOR NON-ISSUANCE OF NOTICE U/S. 143(2) OF THE IT ACT. THEREFORE, THE LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE ISSUE ON MERIT MAY BE REMANDED TO THE FILE OF LD. CIT(A) FOR DECID ING THE APPEAL ON MERITS. THEREFORE, HE MAY BE PERMITTED TO WITHDRAW THE CROS S-OBJECTION. 6. ON CONSIDERATION OF THE ABOVE FACTS AND THE SUBM ISSIONS OF THE PARTIES, IT IS CLEAR THAT THE ISSUE DECIDED BY THE LD. CIT(A) FOR QUASHING OF THE ASSESSMENT ORDER ON THE REASONS THAT NO NOTICE U/S. 143(2) HAS BEEN ISSUED AT THE ASSESSMENT STAGE, HAS BEEN DECIDED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADDHA (SUPRA) BY CONSIDERING THE JUDGMENT OF HONBLE SUPR EME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA) AND DECIDED THE ISSUE IN FA VOUR OF THE REVENUE. FOLLOWING THE ABOVE JUDGMENT IN THE CASE OF ASHOK C HADDHA (SUPRA), WE SET ASIDE ITA NO. 150 & C.O. NO. 33/AGRA/2011 5 THE ORDER OF THE LD. CIT(A) AND RESTORE THE ORDER O F THE AO ON THIS ISSUE AND WITH REGARD TO ADDITIONS ON MERITS, THE APPEAL OF THE AS SESSEE IS RESTORED TO THE FILE OF LD. CIT(A) WITH DIRECTION TO DECIDE THE APPEAL OF THE A SSESSEE ON MERITS BY GIVING REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. IN THE RESULT, THE DEPARTMENTAL APPEAL IS ALLOWED AND CROSS OBJECT ION OF THE ASSESSEE IS DISMISSED AS WITHDRAWN. 7. IN THE RESULT, THE DEPARTMENTAL APPEAL IS ALLOWE D AND THE CROSS-OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY