Madanlal Gangadhar Partani, Pune V. ACIT, Central Circle 1(2), Pune

ITA 1019/PUN/2012

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2089 (ITAT-PUNE)
• Duration Of Justice: 7 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-09-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 21-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Assessee Lawyers: HARI KRISHAN
• Keywords: Search and seizure; Period of limitation; Reasonable cause; Time period of passing order; Set aside
• Section: 143(3); 153A; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER . / ITA NOS.1016 & 1017/PUN/2012 / ASSESSMENT YEARS : 2001-02 & 2002-03 RAJESH MADANLAL PARTANI PLOT NO.25/6 NEW MANGALWAR PETH PUNE 411 011 PAN : AIMPP 1592L VS. ACIT, CENTRAL CIRCLE-1(2), PUNE . / ITA NOS.850 TO 855/PUN/2012 / ASSESSMENT YEARS : 2003-04 TO 2008-09 RAJESH MADANLAL PARTANI PLOT NO.25/6 NEW MANGALWAR PETH PUNE 411 011 PAN : AIMPP 1592L VS. ACIT, CENTRAL CIRCLE-1(2), PUNE . / ITA NOS.504 TO 506/PUN/2012 / ASSESSMENT YEARS : 2001-02, 2002-03 & 2005-06 RAJESH MADANLAL PARTANI (HUF) FINAL PLOT NO.25/6 NEW MANGALWAR PETH PUNE 411 011 PAN : AAGHP4475A VS. ACIT, CENTRAL CIRCLE-1(2), PUNE . / ITA NOS.1761 TO 1763/PUN/2012 / ASSESSMENT YEARS : 2006-07 TO 2008-09 RAJESH MADANLAL PARTANI, PLOT NO.25/6 NEW MANGALWAR PETH PUNE 411 011 PAN : AIMPP1592L VS. ACIT, CENTRAL CIRCLE-1(2), PUNE PARTANI GROUP CASES 2 . / ITA NOS.507 & 508/PUN/2012 / ASSESSMENT YEARS : 2001-02 & 2002-03 MADANLAL GANGADHAR PARTANI (HUF), FINAL PLOT NO.25/6 NEW MANGALWAR PETH PUNE 411 011 PAN : AAGHP4477C VS. ACIT, CENTRAL CIRCLE-1(2), PUNE . / ITA NOS.509 & 510/PUN/2012 / ASSESSMENT YEARS : 2001-02 & 2002-03 NITIN MADANLAL PARTANI (HUF), FINAL PLOT NO.25/6 NEW MANGALWAR PETH PUNE 411 011 PAN : AAGHP4476D VS. ACIT, CENTRAL CIRCLE-1(2), PUNE . / ITA NOS.1018 TO 1025/PUN/2012 / ASSESSMENT YEARS : 2001-02 TO & 2008-09 MADANLAL GANGADHAR PARTANI, FINAL PLOT NO.25/6 NEW MANGALWAR PETH PUNE 411 011 PAN : AAVPP4480E VS. ACIT, CENTRAL CIRCLE-1(2), PUNE . / ITA NOS.499 TO 503/PUN/2012 / ASSESSMENT YEARS : 2002-03, 2004-05 TO 2007-08 PARTANI UDYOG PVT. LTD. FINAL PLOT NO.25/6 NEW MANGALWAR PETH PUNE 411 011 PAN : AADCP2787 VS. ACIT, CENTRAL CIRCLE-1(2), PUNE ASSESSEE BY SHRI HARI KRISHAN REVENUE BY SHRI PANKAJ GARG DATE OF HEARING 05-09-2019 DATE OF PRONOUNCEMENT 06-09-2019 PARTANI GROUP CASES 3 / ORDER PER BENCH: THIS BATCH OF 31 APPEALS CONTAINS 28 QUANTUM APPEALS AND 3 APPEALS AGAINST PENALTY IMPOSED U/S.271B OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) BY DIFFERENT BUT CONNECTED AS SESSEES FOR THE YEARS CAPTIONED ABOVE. AS SOME COMMON ISSUES ARE INV OLVED IN THESE APPEALS, WE ARE, THEREFORE, PROCEEDING TO DISPOSE TH EM OFF BY THIS CONSOLIDATED ORDER. 2. THE FIRST LEGAL GROUND RAISED IN LEAD APPEAL BY SH. RAJESH MADANLAL PARTANI FOR THE ASSESSMENT YEAR 2005-06 (ITA NO.852/PUN/2012), WHICH IS COMMON IN ALMOST ALL THE QUANTUM APPEALS, IS AGAINST FAILURE TO ISSUE AND SERVICE NOTICE UPON THE ASSESSEE U/S.143(2) OF THE ACT WITHIN THE TIME PRESCRIBED. O N AN EARLIER OCCASION, THIS GROUND WAS NOT PRESSED ON BEHALF O F THE ASSESSEE. HOWEVER, THE ASSESSEE HAS AGAIN CHOSEN TO PRESS THIS GRO UND OF APPEAL. THE LD. COUNSEL SUBMITTED THAT NOTICE U/S.143(2) WAS NOT ISSUE D WITHIN THE STIPULATED PERIOD OF SIX MONTHS BEFORE COMPLETING THE ASSE SSMENT U/S.153A R.W.S. 143(3) OF THE ACT. THIS WAS FACTUALLY CON TROVERTED BY THE LD. DR WHO SUBMITTED THAT THE FIRST NOTICE U/S.143(2) WAS IS SUED IN TIME. PARTANI GROUP CASES 4 3. WE HAVE BRIEFLY HEARD THE PARTIES ON THIS ISSUE. THE LD. AR FAIRLY POINTED OUT THAT THE THIRD MEMBER BENCH OF THE MUMBAI TRIBUN AL IN SMT. SUMANLALA BANSAL VS. ACIT (TM) VIDE ITS ORDER DT. 20.5.2015 (ITA NO. 525-530/MUM/2008), FOLLOWING THE DIRECT JUDGMENT OF THE HONBLE DELHI HIGH COURT IN ASHOK CHADDHA VS. ITO (2011) 337 ITR 399 (DEL) , HAS HELD THAT NON-ISSUANCE OF NOTICE U/S 143(2) IS NOT A REQUIREMENT FOR COMPLETING ASSESSMENT U/S 153A. HOWEVER, RELYING ON ANOTHER JUDGMENT IN CIT VS. N.S. SOFTWARE (FIRM) (2018) 403 ITR 0259 (DELHI), THE LD. AR CONTENDED THAT THE PROVISIONS OF SECTION 143(2) APPLY TO THE PROCEEDINGS U/S 153A AS WELL, EVEN THOUGH IT WAS NOT A DIRECT ISSUE BEFORE THE HONBLE HIGH COURT. IN VIEW OF THE FACT THAT THE LD. DR CONTENDED THAT THE FIRST NOTICE U/S 143(2) OF TH E ACT WAS, IN FACT, ISSUED WITHIN THE STIPULATED PERIOD AND FURTHER THAT THE LD. AR ALSO EVINCED INTEREST IN KEEPING THE ISSUE ALIVE TO BE TAKEN UP BEFORE THE HIGHER FORUMS RATHER THAN EXTENSIVELY ARGUING BE FORE THE TRIBUNAL, WE DECIDE THIS ISSUE AGAINST THE ASSESSEE WITHOU T GOING FURTHER DEEP INTO IT. ITA NOS.850-855/PUN/2012 AND 1016-17/PUN/2012 SHRI RAJESH MADANLAL PARTANI 4. BRIEFLY STATED, THE FACTS OF THE LEAD YEAR 2005-06 (IN IT A NO.852/PUN/2012) WHICH ARE MUTATIS MUTANDIS SIMILAR TO THE OTHER SEVEN QUANTUM APPEALS ARE THAT THE ASSESSEE IS A MEMBER O F PARTANI PARTANI GROUP CASES 5 GROUP IN WHICH A SURVEY WAS INITIALLY CONDUCTED U/S.133A OF TH E ACT ON 04-07-2007, WHICH WAS CONVERTED INTO SEARCH U/S.132 ON THE SAME DAY. THE PARTANI GROUP IS ENGAGED IN DOING BUSINESS ON COMMISSION AGENCY AND FINANCING OF AUTO RICKSHAW VEHICLES THROUGH PER SONAL FINANCE AS WELL AS FINANCE THROUGH SHREE GANGADHAR NAGA RI SAHAKARI PAT SANSTHA. SIXTEEN DIARIES WERE FOUND DURING THE COURSE OF SEARCH AND SEIZURE CONTAINING DETAILS REGARDING OLD AND NEW VEHICLES ARRANGED BY THE ASSESSEE. IT HAD FURTHER DETAILS OF THE COMMISSION RECEIVED FROM EACH TRANSACTION, FINANCES MADE TO THE BORRO WERS AND INTEREST ETC. STATEMENT OF THE ASSESSEE WAS RECORDED ON 04- 07-2007. THE ASSESSEE MADE A SURRENDER OF RS.2.00 CRORE SPRE AD OVER CERTAIN YEARS IN HIS INDIVIDUAL HANDS, HOWEVER THE SAME WAS NOT FULLY OFFERED IN THE RETURNS FILED PURSUANT TO THE SEARCH. THE ASSESSEE FILED HIS RETURN FOR THE LEAD YEAR AT TOTAL INCOME OF RS.31,55,980/- INCLUDING THE AMOUNT SURRENDERED FOR THE YEAR AT RS.26,02,000/-, BUT THE ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS.1,63,73,720/- MAKING ADDITIONS ON ACCOUNT OF SUPPRESSED COMMISSION INCOME OF RS.83.78, 812/-; INTEREST INCOME OF RS.55,87,963/-; SUPPRESSED PROFIT OF RS .14,63,000/-; AND SUPPRESSED INTEREST OF RS.3,88,967/-. THE ASSESSE E APPEALED BEFORE THE LD. CIT(A) BUT REMAINED UNREPRESENTED, AS A RESULT OF WHICH THIS APPEAL AND HOST OF OTHER APPEALS CAME TO BE DECIDED EX PARTE QUA THE PARTANI GROUP CASES 6 RESPECTIVE ASSESSES. THIS IS HOW, THE ASSESSEE HAS APP ROACHED THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. IT IS SEEN THAT THE LD. CIT(A) FIXED T HE APPEAL OF THE ASSESSEE FOR HEARING ON 14-10-2010. ADJOURNMENT WAS S OUGHT, WHICH WAS GRANTED FOR 22-11-2010. SERIES OF ADJOURNMENTS WE RE TAKEN BY THE ASSESSEE AS HAS BEEN RECORDED IN PARA 3 OF THE I MPUGNED ORDER. SINCE THE ASSESSEE COULD NOT REPRESENT HIMSELF BEFORE THE LD. CIT(A), THE LD. FIRST APPELLATE AUTHORITY WAS LEFT WITH NO ALTERNATE OPTION BUT TO PROCEED WITH THE MATERIAL AVAILABLE ON RECORD. THAT IS HOW, MOST OF THE ADDITIONS CAME TO BE COUNTENANCED BY THE LD. CIT(A). TH E LD. AR CONTENDED THAT THE ASSESSEES FATHER WAS NOT KEEPING GOOD HEALTH DURING THE COURSE OF RELEVANT PROCEEDINGS WHICH PREVENTED HIM FROM PUTTING IN APPEARANCE BEFORE THE LD. CIT(A). 6. THE LD. DR VEHEMENTLY ARGUED THAT THE ASSESSEE WAS GIVE N PROPER OPPORTUNITY BY THE LD. CIT(A) BUT THE ASSESSEE FAILED TO AVAIL THE SAME. IT WAS THUS PRAYED THAT THE APPEALS OF THE ASSES SEE BE DISMISSED. IT WAS FURTHER POINTED OUT BY HIM THAT THE ASSESS MENT WAS GETTING TIME BARRED BUT THE ASSESSEE FAILED TO ADDUCE THE EV IDENCE IN TIME ENABLING THE AO TO EMBARK UPON PROPER ENQUIRY. IT WAS THUS PRAYED THAT THE ADDITIONS SO MADE AND SUSTAINED BE CONFIRME D. PARTANI GROUP CASES 7 7. BOTH THE SIDES ADMITTED THAT THE FACTS AND CIRCUMSTANCES OF THE OTHER SEVEN APPEALS ARE ALMOST SIMILAR ON MERITS. 8. IN VIEW OF THE FACT THAT THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE FROM APPEARING BEFORE THE LD. CIT(A) AS HIS FATHE R WAS NOT WELL AND THE FACT THAT THE AO COULD NOT PROPERLY APPRECIATE THE EVIDENCE BECAUSE OF LIMITATION PERIOD SETTING IN, BOTH THE SIDES FAIRLY AG REED THAT IT WOULD BE IN THE INTEREST OF JUSTICE IF THE IMPUGNED ORDERS AR E SET- ASIDE AND THE MATTER IS RESTORED TO THE FILE OF AO. CONSID ERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, WE ARE SATISFIED THAT THE ASSESSEE DESERVES TO BE GIVEN ONE MORE C HANCE TO PRESENT HIS CASE BEFORE THE AO. WE ORDER ACCORDINGLY. SETTIN G ASIDE THE IMPUGNED ORDERS, WE DIRECT THE AO TO FRAME THE ASSESS MENTS FOR THE YEARS UNDER CONSIDERATION AFRESH AS PER LAW AFTER ALLOW ING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 9. IN THE RESULT, ALL THE EIGHT APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ITA NOS. 499 TO 503/PUN/2012 PARTANI UDYOG PVT. L TD., ITA NOS. 504 & 505/PUN/2012 RAJESH M. PARTANI (HU F) ITA NOS. 507 & 508/PUN/2012 MADANLAL GANGADHAR PA RTANI (HUF) ITA NOS. 509 & 510/PUN/2012 NITIN MADANLAL PARTAN I (HUF) ITA NOS. 1018 & 1019/PUN/2012 - MADANLAL GANGADHAR PARTANI PARTANI GROUP CASES 8 10. APART FROM THE LEGAL ISSUE WHICH WE HAVE DISCUSSED HE REIN ABOVE, THE ONLY ISSUE RAISED IN THESE APPEALS IS AGAINST THE ESTIMATION OF COMMISSION INCOME. 11. BOTH THE SIDES ARE IN AGREEMENT THAT THE COMMISSION INC OME HAS BEEN ESTIMATED IN THE SAME WAY AS HAS BEEN DONE IN THE C ASE OF SH. RAJESH MADANLAL PARTANI IN THE LEAD CASE AS DISCUSSED SUPRA . FOLLOWING THE SAME VIEW, WE SET-ASIDE THE IMPUGNED ORDERS AND REMIT THE MATTER TO THE FILE OF THE RESPECTIVE AOS FOR FRESH DECISIO N. NEEDLESS TO SAY, THE ASSESSEE WILL BE ALLOWED REASONABLE OPP ORTUNITY OF HEARING TO THE ASSESSEE. 12. IN THE RESULT, ALL THE ABOVE APPEALS ARE ALLOWED FOR STATIS TICAL PURPOSES. ITA NOS. 506/PUN/2012 RAJESH M. PARTANI (HUF) 13. THIS APPEAL WAS NOT PRESSED BY THE LD. AR. THE SAME IS, THEREFORE, DISMISSED. ITA NOS. 1020 TO 1025/PUN/2012 MADANLAL G. PARTANI 14. THESE SIX APPEALS BY SH. MADANLAL GANGADHAR PARTANI RE LATE TO THE A.YRS. 2003-04 TO 2008-09. A COMMON ISSUE RAISED IN ALL THESE SIX PARTANI GROUP CASES 9 APPEALS IS AGAINST THE CONFIRMATION OF ADDITION ON ACCOUNT OF CASH DEPOSITED IN THE BANK ACCOUNT. 15. BRIEFLY STATED, THE FACTS FOR THE A.Y. 2003-04 ARE THAT THE AO, ON PERUSAL OF STATEMENT OF S.B. A/C. NO.8166 MAINTAINED BY THE A SSESSEE WITH MAHESH SAHKARI BANK, RAVIWAR PETH, PUNE OBSERVED THAT THE ASSESSEE DEPOSITED CASH OF RS.52,000/-, RS.11,500/-, RS.11,500/-, RS.11,500/-, RS.12,000/-, RS.12,000/-, RS.11,500/- ON 13-05-2002, 15-07-2002, 06-08-2002, 16-08-2002, 16-09-2002, 17- 09-2002 AND 16-10-2002 RESPECTIVELY. TOTAL OF SUCH CASH DEPOSITS CAME AT RS.1,22,000/-. IN THE ABSENCE OF THE ASSESSEE FURNISHIN G ANY EXPLANATION ABOUT THE SOURCE OF SUCH CASH DEPOSITS, THE AO MADE ADDITION, WHICH CAME TO BE CONFIRMED IN THE FIRST APPEAL. 16. THE LD. AR SUBMITTED THAT THE SAID BANK ACCOUNT IS A PAR T OF THE ASSESSEES REGULAR BOOKS OF ACCOUNT MAINTAINED PRIOR TO S EARCH AND HAS BEEN PROPERLY REFLECTED IN THE BALANCE SHEET AS WELL. THE LD . AR SUBMITTED THAT ALL THE ENTRIES OF CASH DEPOSITS FIND PLACE IN THE REGULAR BOOKS OF ACCOUNT. 17. HAVING HEARD BOTH THE SIDES AND GONE THROUGH THE RELE VANT MATERIAL ON RECORD, IT IS SEEN THAT THE AO MADE THE ADDITION SIM PLY BY CONSIDERING THE AMOUNTS OF CASH DEPOSITS ON DIFFERENT DATES IN THE PARTANI GROUP CASES 10 BANK ACCOUNT. ADDITION ON ACCOUNT OF CASH DEPOSITS CAN BE MADE ONLY IF THE SOURCE OF THE DEPOSITS REMAINS UNEXPLAINED. IF, ON THE OTHER HAND, THE CASH DEPOSITS IN THE BANK ARE FROM THE REGULAR B OOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE, THEN SUCH TRANSACTIONS C ANNOT BE SAID TO BE UNEXPLAINED. THE LD. AR HAS TAKEN THE ARGUMENT THAT THE SAID BANK ACCOUNT IS PART OF THE ASSESSEES REGULAR BOO KS OF ACCOUNT WHICH WAS REFLECTED IN THE BALANCE SHEET PRIOR TO THE DATE OF SEARCH. UNDER THESE CIRCUMSTANCES, WE SET-ASIDE THE IMPUGNED ORD ER AND REMIT THE MATTER TO THE FILE OF AO FOR EXAMINING IF ALL THE TRANSACTIONS , FOR WHICH THE ADDITION HAS BEEN MADE, WERE REFLECTED IN THE ASSE SSEES REGULAR BOOKS OF ACCOUNT MAINTAINED PRIOR TO THE DATE OF SE ARCH. IN CASE SUCH ENTRIES FIND THEIR PLACE IN THE REGULAR BOOKS OF A CCOUNT MAINTAINED PRIOR TO THE DATE OF SEARCH, THEN OBVIOUSLY NO A DDITION CAN BE MADE. IN THE OTHERWISE SCENARIO, THE AO WILL CONSIDER THE ISSUE AFRESH AS PER LAW. 18. FACTS AND CIRCUMSTANCES OF THE OTHER FIVE APPEALS ARE STATED TO BE MUTATIS MUTANDIS SIMILAR. 19. IN THE RESULT, ALL THESE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. PARTANI GROUP CASES 11 ITA NOS.1761 TO 1763/PUN/2012 SHRI RAJESH MADANLAL PARTANI 20. THESE APPEALS ARE DIRECTED AGAINST THE CONFIRMATION OF PENALTY U/S.271B OF THE ACT IN RELATION TO THE A.YS. 2006-07 TO 200 8-09. 21. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH THE RE LEVANT MATERIAL ON RECORD. IT IS A COMMON SUBMISSION BY BOTH THE SIDES THAT THE QUANTUM OF PENALTY IN THESE APPEALS IS DEPENDENT UPON THE GROSS RECEIPTS IN THE QUANTUM ASSESSMENT, WHICH ISSUE WE HAVE RE STORED ABOVE FOR FRESH ADJUDICATION. CONSEQUENTLY, THE IMPUGNED O RDERS ARE SET ASIDE AND THE PENALTY MATTERS ARE ALSO SENT BACK TO THE A O FOR CONSIDERING THE AMOUNT OF GROSS RECEIPTS TO BE FINALLY INCLUDIB LE IN THE FRESH DETERMINATION OF INCOME OF THE ASSESSEE AND THEN AS CERTAINING THE CORRECT AMOUNT OF PENALTY LEVIABLE, IF ANY. 22. IN THE RESULT, THESE THREE APPEALS ARE ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH SEPTEMBER, 2019. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 06 TH SEPTEMBER, 2019 PARTANI GROUP CASES 12 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A) CENTRAL, PUNE 4. 5. 6. THE CIT (CENTRAL), PUNE , , / DR B, ITAT, PUNE; / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR P RIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 05-09-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 06-09-2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *