Rajeev Wadhwa, Gwalior V. A.C.I.T., Circle-1, Gwalior

CO 45/AGR/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7092 (ITAT-AGRA)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-05-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-05-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 19-10-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ARUN DAGA
• Keywords: Opportunity of being heard
• Section: 153A; 6; 15

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. 250 TO 255/AGRA/2011 ASSTT. YEAR : 2002-03 TO 2007-08 A.C.I.T., CIRCLE 1, VS. SHRI RAJEEV WADHWA, GWALIOR. KRISHNA KUNJ, GANDHI ROAD, GWALIOR. (PAN: AAIPW 3232G) C.O. NO. 42 TO 47/AGRA/2011 (IN ITA NO. 250 TO 255/AGRA/2011) ASSTT. YEAR : 2002-03 TO 2007-08 SHRI RAJEEV WADHWA, VS. A.C.I.T., CIRCLE 1, KRISHNA KUNJ, GANDHI ROAD, GWALIOR. GWALIOR. (APPELLANT) (RESPONDENT) REVENUE BY : WRITTEN SUBMISSIONS ASSESSEE BY : SHRI ARUN DAGA, C.A. DATE OF HEARING : 04.05.2012 DATE OF PRONOUNCEMENT OF ORDER : 04.05.2012 ORDER PER BENCH: ALL THE DEPARTMENTAL APPEALS AS WELL AS CROSS OBJE CTIONS BY THE ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(A), GW ALIOR DATED 21.03.2011 FOR ALL THE ASSESSMENT YEARS MENTIONED ABOVE. ITA NO. 250 TO 255/AGRA/2011 & C.O. NO. 42 TO 47/AGRA/2011 2 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE SEAR CH AND SEIZURE OPERATIONS HAVE BEEN CONDUCTED ON 22.06.2007 IN WADHWA GROUP OF CAS ES. IN RESPONSE TO NOTICES ISSUED U/S. 153A OF THE IT ACT, THE ASSESSEE FILED RETURNS OF INCOME SHOWING INCOME UNDER DIFFERENT HEADS. THE AO ISSUED STATUTO RY NOTICES AGAINST THE ASSESSEE AS WELL AS QUESTIONNAIRES CALLING EXPLANATION OF TH E ASSESSEE ON DIFFERENT SEIZED PAPERS AND AFTER COMPLETING THE INVESTIGATION, SEVE RAL ADDITIONS HAVE BEEN MADE IN DIFFERENT ASSESSMENT YEARS AND THE ASSESSMENT ORDER S U/S. 153A OF THE IT ACT HAVE BEEN COMPLETED. 3. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDERS BE FORE THE LD. CIT(A) ON SEVERAL GROUNDS OF APPEALS ON MERITS AS WELL AS ON LEGAL GROUNDS. THE FIRST GROUND RELATES TO VALIDITY OF THE ASSESSMENT PROCEEDINGS O N THE GROUND THAT NO NOTICE U/S. 143(2) HAS BEEN ISSUED AND SERVED AND NO VALUABLE I TEMS, ACCOUNT BOOKS OR DOCUMENTS HAVE BEEN FOUND OR SEIZED, MUCH LESS, INC RIMINATING MATERIAL WARRANTING THE ADDITIONS MADE BY THE AO. THE LD. CI T(A) CONSIDERED THE ISSUE IN THE LIGHT OF SEVERAL DECISIONS CITED BY THE ASSESSE E AND HELD THAT SINCE ASSESSMENTS U/S. 153A HAVE BEEN COMPLETED WITHOUT ISSUANCE OF A NY STATUTORY NOTICE U/S. 143(2) BEFORE COMPLETION OF THE ASSESSMENT PROCEEDINGS, TH EREFORE, THE ASSESSMENT ORDERS U/S. 153A WERE CANCELLED. SINCE THE ASSESSMENT ORDE RS PASSED U/S. 153A HAVE BEEN CANCELLED, THEREFORE, IT WAS HELD THAT THE AO CANNO T MAKE ANY ADDITION TO THE ITA NO. 250 TO 255/AGRA/2011 & C.O. NO. 42 TO 47/AGRA/2011 3 RETURNED INCOME OF THE ASSESSEE. HOWEVER, OTHER GRO UNDS OF APPEAL ON MERIT ON WHICH THE AO MADE ADDITIONS WERE NOT ADJUDICATED UP ON IN VIEW OF THE CANCELLATION OF THE ASSESSMENT ORDERS. 4. THE REVENUE ON GROUND NO. 1 IN ALL THE APPEALS C HALLENGED THE ORDERS OF LD. CIT(A) IN HOLDING THAT NO NOTICE U/S. 143(2) HAS BE EN ISSUED/SERVED ON THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 15 3A IN SPITE OF THE FACT THAT NOTICES U/S. 143(2) HAVE BEEN ISSUED IN THE CASES O F THE ASSESSEE. ON THE REMAINING SEVERAL GROUNDS, THE REVENUE CHALLENGED THE ORDER O F LD. CIT(A) IN DELETING THE ADDITIONS. 5. THE ASSESSEE IN THE CROSS-OBJECTIONS CHALLENGED THE ORDER OF THE AO IN PASSING THE ASSESSMENT ORDERS AND ALSO STATED THAT THE DEPARTMENTAL APPEALS ARE FRIVOLOUS ON RAISING THE GROUNDS ON MERITS BECAUSE THE LD. CIT(A) DID NOT DECIDE THE GROUNDS ON MERITS, AS THE ASSESSMENTS HAVE BEEN CANCELLED. 6. THE LD. DR FILED WRITTEN SUBMISSION STATING THER EIN THAT THE NOTICES U/S. 143(2) HAVE BEEN ISSUED AND SERVED UPON THE ASSESSE E BEFORE COMPLETION OF ASSESSMENT PROCEEDINGS IN ALL THE ASSESSMENT YEARS AND COPIES OF SUCH NOTICES ARE FILED WITH THE WRITTEN SUBMISSIONS TO SHOW THAT THE STATUTORY NOTICES U/S. 143(2) ITA NO. 250 TO 255/AGRA/2011 & C.O. NO. 42 TO 47/AGRA/2011 4 HAVE BEEN SERVED UPON THE ASSESSEE BEFORE COMPLETIO N OF THE ASSESSMENT PROCEEDINGS. IT IS FURTHER SUBMITTED THAT THE ISSUE IS NOW COVERED IN FAVOUR OF THE REVENUE BY THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADDHA VS. ITO, 337 ITR 399 (DELHI), IN WHICH IT W AS HELD THAT IN THE PROCEEDINGS U/S. 153A, ISSUE OF NOTICE U/S. 143(2) IS NOT MANDATORY. THE LD. DR IN THE WRITTEN SUBMISSIONS STATED THAT SINCE THE LD. C IT(A) DID NOT DECIDE THE GROUNDS OF APPEAL ON MERITS, THEREFORE, THE APPEALS MAY BE RESTORED TO THE FILE OF LD. CIT(A) FOR ADJUDICATION ON MERITS. THE LD. COUNSEL FOR THE ASSESSEE CONCEDED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADDHA VS. ITO (SUPRA) WITH REGARD T O THE ISSUE OF NOTICE U/S. 143(2) OF THE IT ACT IN PROCEEDINGS U/S. 153A OF TH E IT ACT. THEREFORE, THE MATTER MAY BE REMANDED TO THE FILE OF LD. CIT(A) FOR ADJUD ICATION OF THE GROUNDS OF APPEAL ON MERITS. IN THIS VIEW OF THE MATTER, THE LD. COUN SEL FOR THE ASSESSEE DID NOT PRESS THE CROSS-OBJECTIONS ALSO. 7. ON CONSIDERATION OF THE FACTS OF THE CASES IN TH E LIGHT OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADD HA (SUPRA), WE ARE OF THE VIEW THAT THE MATTER REQUIRES RECONSIDERATION AT TH E LEVEL OF THE LD. CIT(A) FOR DECIDING THE APPEALS ON MERITS. THE LD. CIT(A) CANC ELLED THE ASSESSMENT ORDERS U/S. 153A OF THE IT ACT BECAUSE NO NOTICES U/S. 143(2) H AVE BEEN ISSUED TO THE ASSESSEE ITA NO. 250 TO 255/AGRA/2011 & C.O. NO. 42 TO 47/AGRA/2011 5 BEFORE COMPLETION OF THE ASSESSMENT PROCEEDINGS. TH OUGH, LD. DR FILED COPIES OF NOTICES U/S. 143(2) WITH WRITTEN SUBMISSIONS TO SHO W THAT THE SAME WERE SERVED UPON THE ASSESSEE PRIOR TO COMPLETION OF ASSESSMENT PROCEEDINGS, BUT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE REVENUE BY THE JU DGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADDHA (SUPRA), IN WHIC H THE HONBLE DELHI HIGH COURT 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 ITA NO. 250 TO 255/AGRA/2011 & C.O. NO. 42 TO 47/AGRA/2011 6 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 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. 7.1 HONBLE DELHI HIGH COURT IN THIS CASE CONSIDERE D THE PROVISIONS OF SECTION 153A OF THE IT ACT AND PROVISIONS OF SECTION 158BC OF THE IT ACT AND DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. HOTEL BLUE MOON, 321 ITR 362(SC) BEFORE ARRIVING AT THE DECISION IN THE MATTER. THE ISSUE IS, THEREFORE, SQUARELY COVERED IN FAVOUR OF THE REVENUE. WE ACCORDINGLY, S ET ASIDE THE ORDERS OF THE LD. CIT(A) AND RESTORE ALL THE APPEALS TO THE FILE OF C IT(A) FOR DECIDING THEM ON MERITS IN ACCORDANCE WITH LAW BY GIVING REASONABLE AND SUF FICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE AO. WE MAY ALSO NOTE HERE THAT APART FROM THE ABOVE LEGAL ISSUE, THE REVENUE RAISED SEVERAL GROUNDS OF APPEAL ON MERITS IN ALL THE APPEALS DESPITE THE FACT THAT NONE OF THE ADDITIONS , ON WHICH GROUNDS OF MERITS HAVE BEEN RAISED IN THE DEPARTMENTAL APPEALS, HAVE BEEN DECIDED BY THE LD. CIT(A). SUFFICIENT TIME WAS GIVEN TO THE REVENUE TO AMEND T HE GROUNDS OF APPEAL, BUT NO ATTEMPT IS MADE IN THIS REGARD. SUCH TYPE OF APPROA CH IS NOT APPRECIATED AND WHILE FILING THE DEPARTMENTAL APPEALS, CARE SHOULD BE TAK EN TO DRAFT THE GROUNDS OF APPEAL WHICH ARISE FROM THE ORDER OF LD. CIT(A) INSTEAD OF LENGTHY AND UNNECESSARY GROUNDS, WHICH DO NOT ARISE FROM THE IMPUGNED ORDER . WE HOPE THAT SUCH THINGS ITA NO. 250 TO 255/AGRA/2011 & C.O. NO. 42 TO 47/AGRA/2011 7 WOULD NOT BE REPEATED IN FUTURE. IN THIS VIEW OF TH E MATTER ALL THE DEPARTMENTAL APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES AND CR OSS OBJECTIONS OF ASSESSEE ARE DISMISSED AS NOT PRESSED. 8. IN THE RESULT, ALL THE DEPARTMENTAL APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 04.05.2012. 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