M/s G.P.Ispat Pvt.Ltd, Raipur(CG) V. C.I.T, Raipur(CG)

ITA 1/BIL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60047 (ITAT-RAIPUR)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 05-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DARSHAN SINGH
• Assessee Lawyers: N C BEGANI
• Keywords: Search and seizure; Loose papers; Document seized; Documents seized
• Section: 143(3); 142(1); 153A; 10B; 147; 263; 2; 15

Judgement Text

1 ITA NO. 01/BBLPR/2011 G.P. ISPAT PVT. LTD.. IN THE INCOME TAX APPELLATE TRIBUNAL BILASPUR BENCH, BILASPUR BEFORE SHRI SHAILENDRA KUMAR YADAV, J.M. AND SHRI R.K. PANDA, A.M. ITA NO. 01/BLPR/2011 ASSESSMENT YEAR 2007-08 M/S G.P. ISPAT PVT. LTD., PLOT NO. 688-693, URLA INDUSTRIAL AREA, URLA, RAIPUR (CG). VS COMMISSIONER OF INCOME-TAX, CENTRAL AVENUE BUILDING, CIVIL LINES, RAIPUR, CHATTISGARH. (APPELLANT) (RESPONDENT) PAN NO. AACG1364Q APPELLANT BY SHRI N.C. BEGANI & SHRI NIKHILESH BEG ANI RESPONDENT BY SHRI DARSHAN SINGH DATE OF HEARING 31.01.2012 DATE OF PRONOUNCEMENT 31.01.2012 ORDER PER R K PANDA, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DTD. 06.12.2010 PASSED BY THE CIT, RAIPUR U/S 263 OF THE INCOME-TAX ACT 1961 RELATING TO A.Y. 2007-08. 2. ALTHOUGH A NUMBER OF GROUNDS HAVE BEEN RAISED BY THE ASSESSEE, THEY ALL RELATE TO THE ORDER PASSED U/S 263 OF THE I.T. ACT, 1961 BY THE LD. CIT. 2.1 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE CO MPANY IS ENGAGED IN THE BUSINESS OF TMT BARS (ROLLING MILL). A SEARCH & SEIZURE OPERATION U/S 2 ITA NO. 01/BBLPR/2011 G.P. ISPAT PVT. LTD.. 132 OF THE I.T. ACT WAS CONDUCTED IN THE RESIDENTIA L AND BUSINESS PREMISES OF THE GROUP ON 16.7.2007. THE ASSESSEES CASE WAS ALSO COVERED IN THE SEARCH AND SEIZURE OPERATION. IN RESPONSE TO NOTIC E U/S 153A DTD. 23.01.2008 THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME AT RS. 14,16,520/-. SUBSEQUENTLY ON 04.08.2009 THE AS SESSEE VIDE LETTER DTD. IST AUGUST, 2009 REVISED THE COMPUTATION OF INCOME AT RS. 44,45,670/-. THEREAFTER THE A.O. COMPLETED THE ASSESSMENT U/S 15 3A R.W.S. 143(3) ON A TOTAL INCOME OF RS. 44,45,678/-. 2.2 THE A.O. SUBSEQUENTLY SENT A PROPOSAL TO THE CI T PROPOSING REVISION OF THE ORDER ON THE GROUND THAT THE SAME WAS PASSED WI THOUT MAKING PROPER ENQUIRY RELATING TO TWO SEIZED DOCUMENTS I.E. AI/92 COMPRISING 256 PAGES AND AI/93 COMPRISING 256 PAGES WHICH WERE LEDGER BO OKS OF M/S G.P. ISPAT (P) LTD. FOR THE PERIOD BEGINNING FROM 9 TH FEB. 2007 BECAUSE OF EXTREME PRESSURE OF WORK. IN VIEW OF THE ABOVE, THE LD. CI T ISSUED A NOTICE U/S 263 OF THE ACT PROPOSING REVISION OF THE ORDER ON THE G ROUND THAT THE A.O. HAS FAILED TO CONSIDER THE ENTRIES IN THE SEIZED DOCUME NTS MARKED AS AI/92 AND AI/93. THEREFORE THE INCOME HAS BEEN UNDER ASSESSED DUE TO THIS ERRONEOUS ACTION OF THE A.O. IN NOT CONSIDERING THE ENTRIES I N THE ABOVE SEIZED DOCUMENTS. FURTHER THE A.O. HAS WRONGLY INITIATED PENALTY U/S 271(1)(C) OF THE ACT INSTEAD OF PENALTY U/S 271 AAA OF THE ACT. 3 ITA NO. 01/BBLPR/2011 G.P. ISPAT PVT. LTD.. 2.3 IT WAS EXPLAINED BY THE ASSESSEE THAT AFTER MAK ING DETAILED ENQUIRY THE ORDER WAS PASSED BY THE A.O. ON 31.12.09 ACCEPT ING THE RETURNED INCOME OF THE ASSESSEE. IN THE COMPUTATION STATEMEN T ATTACHED WITH THE RETURN IT WAS MADE VERY CLEAR THAT THE ASSESSEE HAS DISCLOSED RS. 1 CORE TO COVER ENTIRE SEIZED MATERIAL AND EVIDENCE COLLECTED DURING THE COURSE OF SEARCH TO BUY PEACE AND TO AVOID VEXED LITIGATION. SINCE THE SAID SURRENDER HAS BEEN ACCEPTED BY THE A.O. AFTER DULY CONSIDERIN G THE ASSESSEES SUBMISSION IT WAS SUBMITTED THAT THERE IS NO REASON TO REVISE THE ORDER PASSED U/S 263 OF THE ACT. IT WAS ALSO SUBMITTED T HAT PENALTY IMPOSED U/S 271(1)(C) IS NOT LEVIABLE BECAUSE THE SURRENDER MAD E DURING SEARCH WAS VOLUNTARILY. THE PROVISIONS OF SECTION 271 AAA IS NOT ACCEPTABLE BECAUSE THERE IS NO UNDISCLOSED INCOME IN THE ASSESSEES CA SE AS THE RETURNED INCOME HAS BEEN ACCEPTED. 2.4 HOWEVER, THE LD. CIT WAS NOT CONVINCED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. HE OBSERVED THAT THE A.O. HERSELF HA S PROPOSED THE REVISION OF THE ORDER BECAUSE THE ORDER DTD. 31.12.2009 PASSED BY HER WAS WITHOUT TAKING INTO ACCOUNT TWO IMPORTANT SEIZED DOCUMENTS SEIZED FROM THE ASSESSEE. THEREFORE, HE WAS OF THE OPINION THAT THE ASSESSMENT ORDER PASSED BY THE A.O. WITHOUT MAKING PROPER ENQUIRY IS ERRONE OUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THEREFORE, HE SET ASIDE TH E SAME WITH A DIRECTION TO THE A.O. TO PASS A FRESH ORDER AS PER LAW ON THIS I SSUE AFTER GIVING PROPER 4 ITA NO. 01/BBLPR/2011 G.P. ISPAT PVT. LTD.. OPPORTUNITY TO THE ASSESSEE. AGGRIEVED WITH SUCH O RDER OF THE LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LD. COUNSEL FOR THE ASSESSEE REFERRING TO TH E ANNEXURE TO NOTICE U/S 142(1) (A COPY OF WHICH IS PLACED AT PAPER BOOK PAGE 11 & 12) SUBMITTED THAT VIDE CL. (III) OF THE SAID ANNEXURE THE A.O. H AS CALLED FOR THE BOOKS OF ACCOUNT, DIARIES, PADS, LOOSE PAPERS, INVENTORY OF THE ASSETS FROM THE POSSESSION OF THE ASSESSEE. REFERRING TO THE ORDER SHEET ENTRIES PLACED AT PAPER BOOK PAGE 3 & 4, THE LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT ON 13.11.2009 THE ASSESSEE ATTENDED THE OFFICE OF THE A.O. AND PRODUCED THE BOOKS OF ACCOUNT, BILLS, VOUCHERS WHICH WERE TEST C HECKED AND THE ASSESSEE ALSO FILED THE SUBMISSION. REFERRING TO THE LETTER ADDRESSED TO THE A.O. ON 24.12.2009 (COPY OF WHICH IS PLACED AT PAPER BOOK P AGE 5) HE SUBMITTED THAT THE ASSESSEE IN THE SAID LETTER HAD SUBMITTED THAT THE ASSESSEE COULD NOT FULLY EXPLAIN THE SEIZED MATERIAL WITH EVIDENCE DUE TO ADMINISTRATIVE PROBLEMS AND TO PURCHASE PEACE AND OFFER TRUE INCOM E IT SURRENDERED RS. 1 CRORE IN THE RETURN AS PER WORKING IN P&L ACCOUNT. HE SUBMITTED THAT THE LD. CIT HAS NOT CONSIDERED WHY RS. 1 CRORE WAS SURR ENDERED. FURTHER THE LD. CIT REVISED THE ORDER ON THE BASIS OF PROPOSAL MADE BY THE A.O. AND NOT BY INDEPENDENT APPLICATION OF HIS MIND. REFERRING TO THE DECISION OF THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF RAJIV ARORA V. CIT REPORTED IN (2011) 131 ITD 58 HE SUBMITTED THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE TRIBUNAL HAS SET ASIDE THE REVISION ORDER PASSED BY THE LD. CIT U/S 263 OF 5 ITA NO. 01/BBLPR/2011 G.P. ISPAT PVT. LTD.. THE ACT. HE ACCORDINGLY SUBMITTED THAT SINCE THE A .O. HAS PASSED THE ORDER AFTER DUE APPLICATION OF HER MIND, THE LD. CITS AC TION ASSUMING JURISDICTION U/S 263 MERELY ON THE BASIS OF PROPOSAL SENT BY THE A.O. IS NOT JUSTIFIED. 4. THE LD. D.R., ON THE OTHER HAND, WHILE SUPPORTIN G THE ORDER OF THE LD. CIT SUBMITTED THAT THE A.O. PASSED THE ORDER U/S 14 3(3) HAD MADE A PROPOSAL STATING THAT SEIZED DOCUMENTS IDENTIFIED A S AI/92 COMPRISING 256 PAGES AND AI/93 COMPRISING AGAIN 265 PAGES COULD N OT BE EXAMINED BECAUSE OF EXTREME WORK PRESSURE. THEREFORE, IN ABS ENCE OF EXAMINATION OF SUCH SEIZED DOCUMENTS, WHICH IS VITAL FOR COMPUTING THE TRUE INCOME, THE INCOME HAS BEEN UNDER ASSESSED. THEREFORE, THE ORDE R OF THE A.O. IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E. REFERRING TO THE DECISION OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF APPOLLO TYRES LTD. V. CIT REPORTED IN 65 ITD 263 HE SUBMITTED THAT THE LD . CIT CAN INVOKE THE JURISDICTION U/S 263 ON THE BASIS OF PROPOSAL MADE BY THE A.O. EVEN IF TIME LIMIT FOR INITIATING PROCEEDING U/S 147 IS AVAILABL E. HE ACCORDINGLY SUBMITTED THAT THE ORDER PASSED U/S 263 BY THE LD. CIT IS JUS TIFIED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE A.O. AND THE LD. CIT AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT THAT DU RING THE COURSE OF SEARCH THE DOCUMENTS IDENTIFIED AS AI/92 AND AI/93 COMPRIS ING OF 256 PAGES EACH, 6 ITA NO. 01/BBLPR/2011 G.P. ISPAT PVT. LTD.. WHICH ARE LEDGER BOOKS OF M/S G.P. ISPAT (P) LTD. F OR THE PERIOD BEGINNING FROM 9 TH FEB. 2007 WERE SEIZED WHICH COULD NOT BE EXAMINED BY THE A.O. DESPITE A QUERY RAISED BY THE BENCH, THE LD. COUNSE L FOR THE ASSESSEE COULD NOT FILE A COPY OF ANY REPLY TO THE A.O. STATING TH E CONTENTS OF ENTRIES IN THE SEIZED DOCUMENTS IDENTIFIED AS AI-92 AND AI/93. IT HAS BEEN HELD BY VARIOUS JUDICIAL DECISIONS THAT FOR EXERCISE OF POWER FOR R EVISION U/S 263 TWO CONDITIONS SHOULD BE FULFILLED I.E. (A) THE ORDER S HOULD BE ERRONEOUS AND (B) THE ORDER MUST HAVE CAUSED PREJUDICE TO THE INTERES T OF THE REVENUE. IN THE INSTANT CASE SINCE THE A.O. HAS NOT EXAMINED THE SE IZED DOCUMENTS IDENTIFIED AS AI/92 AND AI/93, THEREFORE, TRUE INCO ME HAS NOT BEEN CORRECTLY ASCERTAINED AND THEREFORE THE INCOME HAS BEEN UNDER ASSESSED WHICH HAS CAUSED PREJUDICE TO THE INTEREST OF THE REVENUE. TH EREFORE, THE LD. CIT IN OUR OPINION WAS JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT. THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE A.O. HAS VERIFIED EVERYTHING DOES NOT FIND MUCH FORCE IN VIEW OF THE PROPOSAL SENT BY THE SAME A.O. STATING THAT DUE TO EXTREME PRESSURE OF WORK T HE SEIZED DOCUMENTS IDENTIFIED AS AI/92 AND AI/93 COULD NOT BE EXAMINED . THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAS SURRENDERED AN AMOUNT OF RS. 1 CRORE TO BUY PEACE AND OFFER TRUE INCOME BY E XPLAINING THE SEIZED DOCUMENTS, WHICH COULD NOT BE FULLY EXPLAINED WITH EVIDENCE ALSO DOES NOT FIND ANY FORCE IN VIEW OF NON-EXAMINATION OF THE SE IZED DOCUMENTS. 7 ITA NO. 01/BBLPR/2011 G.P. ISPAT PVT. LTD.. 5.1 THE DECISION RELIED ON BY THE LD. COUNSEL FOR T HE ASSESSEE IN THE CASE OF RAJIV ARORA (SUPRA) IS DISTINGUISHABLE AND NOT A PPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THAT CASE THE A.O. HAD COMPLETED THE ASSESSMENT U/S 143(3) AFTER MENTIONING THAT THE CASE WAS DISCUSSED AND THE VARIOUS DETAILS FILED BY THE ASSESSEE WERE TEST CHECKED AND WERE FO UND CORRECT. THE DEDUCTION U/S 10B WAS ALSO ALLOWED TAKING INTO CONS IDERATION THE PAST HISTORY OF THE CASE. THEREAFTER ANOTHER A.O., WHO CAME IN PLACE OF THE A.O. WHO PASSED THE ASSESSMENT ORIGINALLY, REFERRED THE MATTER TO THE LD. CIT FOR INVOKING THE PROVISIONS U/S 263. HOWEVER IN THE IN STANT CASE THE SAME A.O. WHO HAS MADE THE ASSESSMENT HAS STATED THAT SEIZED DOCUMENTS IDENTIFIED AS AI/92 AND AI/93 COULD NOT BE EXAMINED DUE TO EXT REME PRESSURE OF WORK. THEREFORE THE DECISION CITED BY THE LD. COUNSEL FOR THE ASSESSEE IS DISTINGUISHABLE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THIS VIEW OF THE MATTER WE ARE OF THE CONSIDERED OPINION THAT THE JURISDICTION ASSUMED BY THE LD. CIT U/S 263 UNDER THE FACTS AND CIRCUMST ANCES OF THE CASE IS IN ACCORDANCE WITH LAW. WE THEREFORE UPHOLD THE SAME. THE GROUND RAISED BY THE ASSESSEE IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON 31.01.2012. SD/- (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER SD/- ( R K PANDA ) ACCOUNTANT MEMBER PLACE: BILASPUR : DATED: 31.01.2012. 8 ITA NO. 01/BBLPR/2011 G.P. ISPAT PVT. LTD.. RK COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT, CONCERNED, RAIPUR 4 CIT CONCERNED 5 DR BENCH BILASPUR 6 MASTER FILE /TRUE COPY/ BY ORDER SENIOR PRIVATE SECRETARY, ITAT, BILASPUR