Mrs Anita gopichand Lalwani, Kolhapur V. DCIT, Kolhapur

ITA 1157/PUN/2012

• Counselvise Citation: 115724514 RSA 2012
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 12-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 01-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS SUNITA RAO
• Keywords: Unexplained investment; Value adopted by valuation officer; Search and seizure; Cost of acquisition
• Section: 143(3); 142(1); 153A; 234B; 69; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHE A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.1157/PN/2012 (ASSESSMENT YEAR : 2008-09) MRS. ANITA GOPICHAND LALWANI, 250-B TRIMURTI, E-WARD, NAGALA PARK, KOLHAPUR. PAN : ACJPL4817B . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOLHAPUR. . RESPONDENT ASSESSEE BY : MR. M. K. KULKARNI DEPARTMENT BY : MRS. SUNITA RAO DATE OF HEARING : 16-06-2014 DATE OF PRONOUNCEMENT : 20-06-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AG AINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATED 15.03.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 30.1 2.2009 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL :- 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDI TION OF RS.1,02,550/- PERTAINING TO 50% SHARE OF THE APPELLANT IN THE PRO PERTY PURCHASED AS THE ADDITION WAS MADE BY THE A.O. U/S 69 ON ACCOUNT OF DIFFERENCE IN COST OF ACQUISITION AS RECORDED IN THE AUDITED BOOKS OF ACC OUNT SUPPORTED BY REGISTERED SALE DEED AND THE VALUATION MADE BY DVO U/S 142A OF THE ACT. THE PROVISIONS OF S. 69 DO NOT APPLY TO THE FACTS O F THE CASE. THE DIFFERENCE BEING MARGINAL ONE BETWEEN COST OF ACQUISITION AND DVO'S VALUATION THE SAME OUGHT TO HAVE BEEN DELETED. IN VIEW OF THIS TH E ADDITION BE QUASHED. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDI TION OF RS.2,16,500/- PERTAINING TO 50% SHARE OF THE APPELLANT IN THE PRO PERTY PURCHASED BEING THE ADDITION MADE BY THE A.O. U/S 69 ON ACCOUNT OF DIFFERENCE IN COST OF ACQUISITION AS RECORDED IN THE AUDITED BOOKS OF ACC OUNT SUPPORTED BY ITA NO.1157/PN/2012 A.Y. 2008-09 REGISTERED SALE DEED AND THE VALUATION MADE BY DVO U/S 142A OF THE ACT. THE PROVISIONS OF S. 69 DO NOT APPLY TO THE FACTS O F THE CASE. THE DIFFERENCE BEING MARGINAL ONE BETWEEN COST OF ACQUISITION AND DVO'S VALUATION THE SAME OUGHT TO HAVE BEEN DELETED. IN VIEW OF THIS TH E ADDITION BE QUASHED. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDI TION OF RS.2,25,000/- MADE BY THE A.O. ON ACCOUNT OF DIFFERENCE IN INVEST MENT AS RECORDED IN BOOKS OF ACCOUNT/RECORDS AND AS ESTIMATED BY DVO IN VALUATION MADE U/S 142A OF THE ACT. THE REFERENCE TO DVO ITSELF WAS UN WARRANTED AS IT WAS NOT PERMISSIBLE IN LAW. THE DIFFERENCE WAS NOT OF SUCH HUGE AMOUNT WHICH COULD BE REFERRED TO DVO UNDER S. 142A OF THE ACT. THE DIFFERENCE WAS VERY MARGINAL WHICH WAS THE RESULT OF ESTIMATION ON LY. THE ADDITION BE QUASHED. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. C1T(A) WAS NOT JUSTIFIED IN CONFIRMING THE ADDI TION OF RS.1,25,000/- MADE BY THE A.O. ON ACCOUNT OF DIFFERENCE IN INVEST MENT AS RECORDED IN BOOKS OF ACCOUNT/RECORDS AND AS ESTIMATED BY DVO ON VALUATION MADE U/S 142A OF THE ACT. THE REFERENCE TO DVO ITSELF WAS UN WARRANTED AS IT WAS NOT PERMISSIBLE IN LAW. THE DIFFERENCE WAS NOT OF SUCH HUGE AMOUNT THE VALUATION OF WHICH COULD BE REFERRED TO DVO UNDER S . 142A OF THE ACT. THE DIFFERENCE WAS VERY MARGINAL WHICH WAS THE RESULT O F ESTIMATION ONLY. THE ADDITION BE QUASHED. 5) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDINGS THAT THE A SSESSMENT MADE UNDER S. 143(3) WAS CORRECTLY MADE. IT IS NOW SETTLED LAW TH AT IN VIEW OF THE PRONOUNCED JUDGMENTS OF THE JUDICIAL FORUMS THE ASS ESSMENT FOR THE ASSESSMENT YEAR IN WHICH SEARCH ACTION WAS CONDUCTE D MUST BE SO COMPLETED U/S 153A R.W.S. 143(3) OF THE ACT. IN VIE W OF THIS LEGAL POSITION THE ASSESSMENT COMPLETED U/S 143(3) IS BAD IN LAW A ND WITHOUT JURISDICTION. IT IS QUASHED ACCORDINGLY. 6) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEVY OF INTEREST U/S 234B/234C WAS NOT JUSTIFIED IN VIEW OF HUGE AMOUNT SEIZED OF RS.16,00,000/- AT THE TIME OF SEARCH ACTI ON AND IT ADJUSTED AS PER PROVISIONS OF S. 132B NO INTEREST AS LEVIED WOULD H AVE BEEN PAYABLE BY THE APPELLANT. THE INTEREST LEVIED BE QUASHED. 3. THE APPELLANT, BEFORE US, IS AN INDIVIDUAL BELON GING TO LALWANI GROUP OF CASES, WHEREIN A SEARCH ACTION U/S 132 OF THE ACT W AS CONDUCTED DURING THE PERIOD FROM 08.04.2007 TO 20.04.2007. CONSEQUENT T O THE SEARCH, ASSESSEE FILED A RETURN OF INCOME FOR THE ASSESSMENT YEAR 20 08-09 ON 30.07.2008 DECLARING A TOTAL INCOME OF RS.1,99,570/-. THE ASS ESSING OFFICER SUBJECTED THE RETURN OF INCOME TO A SCRUTINY ASSESSMENT IN TERMS OF SECTION 143(3) OF THE ACT, WHEREIN THE TOTAL INCOME WAS DETERMINED AT RS. 8,68,567/- AFTER MAKING CERTAIN ADDITIONS ON ACCOUNT OF UNACCOUNTED INVESTM ENT IN IMMOVABLE PROPERTIES. THE ASSESSEE ASSAILED THE ADDITIONS IN APPEAL BEFORE THE CIT(A), ITA NO.1157/PN/2012 A.Y. 2008-09 WHO HAS SINCE AFFIRMED THE SAME. NOT BEING SATISFI ED WITH THE ORDER OF THE CIT(A), ASSESSEE IS IN FURTHER APPEAL BEFORE THE TR IBUNAL. 4. IN SO FAR AS THE GROUNDS OF APPEAL NO.1 & 2 ARE CONCERNED, THEY RELATE TO ADDITIONS OF RS.1,02,500/- AND RS.2,16,500/- MAD E BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT STATED TO HAVE BEEN MADE TOWARDS ACQUISITION OF TWO PROPERTIES AT E WARD, KASABA BAV ADA, KOLHAPUR. 5. THE PERTINENT FACTS IN RELATION TO THE AFORESAID CONTROVERSY ARE AS FOLLOWS. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT ASSESSEE, AS A CO-OWNER, ACQUIRED TWO PR OPERTIES, NAMELY, 804/1 AND 805/1, E WARD, KASABA BAVADA, KOLHAPUR FOR STAT ED CONSIDERATION OF RS.9,00,000/- AND RS.42,50,000/- ON 02.02.2008 AND 15.01.2008 RESPECTIVELY. THE SHARE OF THE ASSESSEE BEING 50%, THE ASSESSEES SHARE OF THE COST OF ACQUISITION CAME TO RS.4,50,000/- AND RS.21,25,000/ - RESPECTIVELY. THE ASSESSING OFFICER REFERRED THE AFORESAID PROPERTIES U/S 142A OF THE ACT TO THE DEPARTMENTAL VALUATION OFFICER (DVO) IN ORDER TO ES TIMATE THE COST OF ACQUISITION, WHO ESTIMATED THE COST OF THE PROPERTI ES AT RS.11,05,000/- AND RS.46,83,000/- RESPECTIVELY. ACCORDINGLY, THE DIFF ERENCE BETWEEN THE COST ESTIMATED BY THE DVO AND THE COST OF ACQUISITION DE CLARED BY THE ASSESSEE CAME TO RS.1,02,500/- AND RS.2,16,500/- (BEING ASSE SSEES SHARE) RESPECTIVELY. THE AFORESAID DIFFERENCE WAS CONSIDE RED BY THE ASSESSING OFFICER AS INVESTMENT MADE BY THE ASSESSEE TOWARDS ACQUISITION OF THE SAID PROPERTIES OVER AND ABOVE THE AMOUNTS DECLARED IN T HE RESPECTIVE PURCHASE DEEDS AND THE SAME WAS BROUGHT TO TAX BY INVOKING S ECTION 69B OF THE ACT. THE CIT(A) HAS ALSO SUSTAINED THE ADDITION, AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE US. 6. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS NO JUSTIFICATION FOR THE SAID ADDITION BECAUSE IT WAS BASED ON A VALUATION ITA NO.1157/PN/2012 A.Y. 2008-09 REPORT OF THE DVO, WHICH COULD NOT BE SAID TO BE AN EVIDENCE JUSTIFYING ANY INVESTMENT BY THE ASSESSEE. 7. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE APPEARING FOR THE REVENUE HAS JUSTIFIED THE ADDITION ON THE B ASIS OF THE REASONING ADVANCED BY THE LOWER AUTHORITIES, WHICH IS BASED O N THE REPORT OF THE DVO SHOWING THAT THE VALUE OF THE PROPERTY WAS MORE THA N THE COST OF ACQUISITION DECLARED BY THE ASSESSEE. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN THE CONTEXT OF THE PRESENT CONTROVERSY, WE HAVE PERUSED THE ASSESS MENT ORDER AND FIND THAT APART FROM THE REPORT OF THE DVO, THERE IS NO INCRI MINATING MATERIAL FOUND DURING THE COURSE OF SEARCH SHOWING THAT ASSESSEE H AD MADE INVESTMENT IN THE ACQUISITION OF THE IMPUGNED PROPERTIES, WHICH I S OVER AND ABOVE THE STATED INVESTMENTS. IN-FACT, IN THE ABSENCE OF ANY INCRIM INATING MATERIAL UNEARTHED BY THE REVENUE IN THE COURSE OF SEARCH, THE REPORT OF THE DVO CANNOT IPSO FACTO LEAD TO A CONCLUSION THAT ASSESSEE HAS MADE ANY INV ESTMENT OVER AND ABOVE THE STATED CONSIDERATION IN THE RESPECTIVE SA LE-DEEDS. THUS, THE ADDITION IS UNSUSTAINABLE. THE AFORESAID PROPOSITI ON IS IN LINE WITH THE FOLLOWING JUDGEMENTS OF THE HONBLE DELHI HIGH COUR T : (I) CIT VS. ABHINAV KUMAR MITTAL (2012) 30 TAXMANN.COM 357 (DELHI); (II ) CIT VS. SADHNA GUPTA (2013) 32 TAXMANN.COM 185 (DELHI); AND, (III) CIT V S. DINESH JAIN HUF (2012) 25 TAXMANN.COM 550 (DELHI). IN VIEW OF THE AFORESA ID, WE ARE INCLINED TO UPHOLD THE PLEA OF THE ASSESSEE THAT THE IMPUGNED A DDITIONS ARE NOT JUSTIFIED MERELY ON THE BASIS OF THE REPORT OF THE DVO. WE H OLD SO. 9. IN THE RESULT, THE ORDER OF THE CIT(A) IS SET-AS IDE AND THE ASSESSING OFFICER IS DIRECTED TO DELETE THE ADDITIONS OF RS.1 ,02,500/- AND RS.2,16,500. THUS, ASSESSEE SUCCEEDS ON GROUNDS OF APPEAL NO.1 & 2. ITA NO.1157/PN/2012 A.Y. 2008-09 10. IN SO FAR AS THE GROUNDS OF APPEAL NO.3 & 4 REL ATING TO THE ADDITIONS OF RS.2,25,000/- AND RS.1,25,000/-, ARE CONCERNED, THE SAME RELATE TO ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED INVESTMENT IN ACQUISITION OF TWO PROPERTIES BY THE ASSESSEE AT TI RUMALA RESIDENCY, NALALA PARK, KOHLAPUR. HEREIN ALSO THE FACTUAL MATRIX REV EALS THAT THE ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER BY INVOKING SECT ION 69B OF THE ACT ON THE BASIS OF THE REPORT OF THE DVO, WHICH SHOWED THE ES TIMATED COST IN EXCESS WHAT WAS STATED IN THE RESPECTIVE SALE-DEEDS. THE MANNER OF MAKING THE ADDITION IS SIMILAR TO THAT CONSIDERED BY US IN GRO UNDS OF APPEAL NO.1 & 2 IN THE EARLIER PARAGRAPHS. ON THIS ISSUE ALSO A PERUS AL OF THE ASSESSMENT ORDER DOES NOT REVEAL THAT ANY INCRIMINATING MATERIAL WAS FOUND IN THE COURSE OF SEARCH WHICH WOULD SHOW THAT ASSESSEE EXPENDED ANY MONIES TOWARDS ACQUISITION OF THE IMPUGNED PROPERTIES OVER AND ABO VE THE AMOUNTS DECLARED IN THE RESPECTIVE SALE-DEEDS. THEREFORE, FOLLOWING THE PARITY OF REASONING TAKEN BY US IN DISPOSING OF GROUNDS OF APPEAL NO.1 & 2 IN THE EARLIER PARAGRAPHS, THESE TWO GROUNDS ARE ALSO DECIDED ACCO RDINGLY. RESULTANTLY, THE GROUNDS OF APPEAL NO.3 AND 4 ARE ALSO ALLOWED. 11. THE GROUND OF APPEAL NO.5 RELATES TO THE PLEA O F THE ASSESSEE THAT THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION OUGHT T O HAVE BEEN COMPLETED U/S 153A(B) OF THE ACT SINCE THE SEARCH ACTION U/S 132(1) OF THE ACT WAS CARRIED OUT FROM 18.04.2007 TO 20.04.2007. IN CONT RAST, THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2 008-09 HAS BEEN COMPLETED U/S 143(3) OF THE ACT. IN THIS CONTEXT, IT IS NOTICEABLE THAT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER DID NOT ISSUE ANY NOTICE U/S 153A OF THE ACT CALLING FOR A RETURN OF INCOME. ACCORDING TO THE ASSESSEE, THE ASSESSMENT OUGHT TO HAVE BEEN COMPLET ED U/S 153A(B) OF THE ACT. IT WAS A COMMON POINT BETWEEN THE PARTIES THA T AN IDENTICAL CONTROVERSY HAS BEEN CONSIDERED IN THE CASES OF SOU. DIVYA JAYR AM MEGHANI & OTHERS VS. DCIT VIDE ITA NOS.1134 TO 1139/PN/2012 ORDER DATED 29.10.2013, WHEREIN ITA NO.1157/PN/2012 A.Y. 2008-09 FOLLOWING AN EARLIER DECISION OF THE TRIBUNAL IN TH E CASE OF SHRI AMRITSINGH J. BINDRA & ORS. VS. ITO VIDE ITA NOS.329 TO 332/PN/20 12, ITA NOS.377 & 378/PN/2012, ITA NOS.379 & 380/PN/2012, ITA NOS.381 TO 383/PN/2012, ITA NOS.1050 & 1051/PN/2012, ITA NO.1052/PN/2012, ITA N O.29/PN/2013, ITA NO.30/PN/2013, ITA NO.31/PN/2013, ITA NO.33/PN/2013 , ITA NO.868/PN/2013 AND ITA NO.872/PN/2013 DATED 29.08.2 013, THE ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE UPHOLDING THE STA ND OF THE REVENUE THAT THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT IN RESP ECT OF THE ASSESSMENT YEAR UNDER CONSIDERATION, IS JUSTIFIED. THE FOLLOW ING PORTION OF THE ORDER OF THE TRIBUNAL DATED 29.10.2013 (SUPRA) IS REPRODUCED HER EINAFTER TO BRING OUT THE REASONING WEIGHING WITH THE TRIBUNAL TO HOLD THE IS SUE AGAINST THE ASSESSEE :- 3. SO FAR AS THE GROUND NO. 3 IS CONCERNED THE CON TENTION OF THE ASSESSEE IS THAT THE ASSESSMENT FOR A.Y. 2008-09 SH OULD ALSO HAVE BEEN COMPLETED U/S. 153A(B) OF THE ACT AND NOT U/S. 143( 3) OF THE ACT. IN SUPPORT OF THE SAID PROPOSITION, THE ASSESSEE RELIED ON THE DE CISION OF THE HON'BLE HIGH COURT OF KERALA IN THE CASE OF DR. K.M. MAHABOOB VS . DCIT & ANR. (2012) 76 DTR (KER) 90 AS WELL AS THE DECISION IN THE CASE OF DCIT, CIRCLE-1(1), UJJAIN VS. SUSHIL KUMAR JAIN (2010) 127 ITD 264 (INDORE). IN THIS CASE, A SEARCH AND SEIZURE ACTION U/S. 132(1) OF THE ACT HAS BEEN CARRIED OUT ON 18-04-2007 AND WHICH WAS CONCLUDED ON 20-04-2007. IN RESPECT OF A.Y. 2008-09 ASSESSMENT OF THE ASSESSEE HAS BEEN COMPLETED U/S. 143(3). 4. FROM THE ASSESSMENT ORDER IT IS SEEN THAT NO NOT ICE U/S. 153A FOR FILING OF THE RETURN OF INCOME HAS BEEN ISSUED TO THE ASSESSEE. THE IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN THE CA SE OF SHREE AMRITSINGH J. BINDRA & ORS. VS. INCOME TAX OFFICER (CENTRAL), NAS HIK BEING ITA NOS. 329 TO 332/PN/2012, ITA NOS. 377 & 378/PN/2012, ITA NOS. 3 79 & 380/PN/2012, ITA NOS. 381 TO 383/PN/2012, ITA NOS. 1050 & 1051/PN/20 12, ITA NO. 1052/PN/2012, ITA NO. 29/PN/2013, ITA NO. 30/PN/201 3, ITA NO. 31/PN/2013, ITA NO. 33/PN/2013, ITA NO. 868/PN/2013 AND ITA NO. 872/PN/2013. IN THE SAID CASE, THE TRIBUNAL HAS CONSIDERED THE DECISION OF THE HON'BLE HIGH COURT OF KERALA IN THE CASE OF DR. K.M. MAHBOOB VS. DCIT & A NR. (SUPRA) AND HAS HELD AS UNDER: 21. AS MENTIONED HERE-IN-ABOVE, THERE WAS A SEARCH AND SEIZURE ACTION AGAINST THE BINDRA GROUP U/S. 132(1) OF THE ACT ON 15-03- 2007. IN CONSEQUENCE OF SEARCH AND SEIZURE OPERATI ON THE ASSESSMENTS UPTO THE A.Y. 2006-07 HAVE BEEN COMPLET ED U/S. 153A OR 153C R.W.S. SEC. 143(3) OF THE ACT SAVE THE A.Y. 20 07-08 FOR WHICH YEAR THE ASSESSMENTS HAVE BEEN COMPLETED U/S. 143(3) OF THE INCOME-TAX ACT. THE LEARNED COUNSEL SUBMITS THAT THE ASSESSME NTS COMPLETED FOR THE A.Y. 2007-08 ARE WITHOUT JURISDICTION AND VOID AB INITIO AS THOSE ASSESSMENTS OUGHT TO HAVE BEEN MADE U/S. 153A R.W.S . 143(3) OF THE ACT. HE HAS PLACED HIS RELIANCE ON THE FOLLOWING D ECISIONS: 1. DR. K.M. MAHABOOBVS. DCIT &ANR. (2012) 76 DTR (K ER) 90. ITA NO.1157/PN/2012 A.Y. 2008-09 2. M/S. BAHUBALINEMINATHMUTTIN VS. ACIT, CENTRAL C IRCLE-I, BELGAUM, ITA NOS. 161 &165/PN/2010 ORDER DATED 08-0 7- 2011. 3. DR.MANSUKHKANJIBHAI SHAH VS. ACIT (2010) 36 (II ) ITCL 62 (AHD) ORDER DATED 21-05-2010. 4. DCIT, CIRCLE-1(1), UJJAIN VS. SUSHIL KUMAR JAIN (2010) 127 ITD 264 (INDORE). 5. M/S. GIRIDHAR& SONS VS. JCIT (OSD) CENTRAL CIRC LE, KOLHAPUR, ITA NO. 1358/PN/2007 ORDER DATED 30-08-2011. WE HAVE ALSO HEARD THE LD. DR. 22. IN THE CASE OF DR. K.M. MAHABOOB (SUPRA),BATCH OF WRIT PETITIONS WERE FILED WITH PRAYER TO QUASH THE ASSES SMENT ORDERS PASSED, IN CONSEQUENCE OF THE SEARCH AND SEIZURE A CTION (U/S. 144 R.W.S. SEC. 153A AND 153C OF THE ACT) FOR THE A.YS. 2003-04 TO 2009- 10. IT WAS THE CASE OF THE ASSESSEE-PETITIONER THA T NOTICES U/S. 153A WERE ISSUED ONLY FOR THE A.YS. 2003-04 TO 2008-09 A ND THERE WAS NO NOTICE FOR THE A.Y. 2009-10. IT WAS ALSO STATED TH AT THE SIX ASSESSMENT YEARS IN RESPECT OF WHICH ASSESSMENT COULD HAVE BEE N MADE U/S. 153A WERE THE A.YS. 2003-04 TO 2008-09 AND THAT THE ASSESSMENT FOR THE A.Y. 2009-10 WAS ALSO MADE U/S. 144 R.W.S. 153C OF THE ACT WHICH WAS PATENTLY ILLEGAL (PARA NO. 13 OF THE JUDGMENT). THE DEPARTMENT RESISTED THE SAID STATEMENT OF THE ASSESSEE BY FILI NG THE AFFIDAVIT IN REPLY WHICH IS AS UNDER: 14. IN VIEW OF THE AFORESAID CONTENTIONS RAISED, A N ADDITIONAL STATEMENT DT. 14TH MARCH, 2011 HAS BEEN FILED ON BE HALF OF THE RESPONDENT. INSOFAR AS THE VALIDITY OF THE ASSESSME NT FOR THE YEAR 2009-10 IS CONCERNED, IN THE ADDITIONAL STATEMENT I T HAS BEEN STATED THUS : '2. IN PARA NO. 3 OF THE REPLY-AFFIDAVIT THE PETITI ONER IS TRYING TO ESTABLISH THAT THE ASSESSMENT MADE FOR ASST. YR. 20 09-10 IS ILLEGAL SINCE THE ASSESSMENT SHOULD HAVE BEEN MADE ONLY FRO M ASST. YR. 2003-04 TO ASST. YR. 2008-09 I.E. FOX SIX ASSESSMEN T YEARS ONLY AND NOT FOR ASST. YR. 2009-10. THIS ARGUMENT IS WRONG FOR T HE FOLLOWING REASONS: (A) AS PER THE PROVISIONS OF THE ACT THE ASSESSMENT IN SUCH CASES SHALL BE MADE FOR SIX ASSESSMENT YEARS IMMEDI ATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR I N WHICH THE SEARCH IS CONDUCTED OR REQUISITION IS MADE. THE RELEVANT S EARCH IN THIS CASE WAS CONDUCTED IN THE FINANCIAL YEAR 2008-09 WHICH I S RELEVANT TO THE ASST. YR. 2009-10. HENCE, THE SIX ASSESSMENT YEARS WILL BE 2003-04, 2004-05, 2005-06, 2006-07, 2007-08 AND 2008-09. ACC ORDINGLY NOTICES UNDER S. 153A R/W S. 153C WERE ISSUED FOR THESE YEA RS. (B) AS PER THE EXISTING INSTRUCTIONS ALL SEARCH AND SEIZURE CASES HAVE TO BE COMPULSORILY SCRUTINIZED FOR THE RELEVAN T ASSESSMENT YEAR. THAT MEANS THE ASSESSEE'S ASSESSMENT FOR THE ASST. YR. 2009-10 HAD TO BE COMPLETED UNDER S. 143(3). SINCE THE ASSESSEE HAD NOT FILED HIS RETURN A NOTICE UNDER S. 142(1) WAS ISSUED CALLING FOR HIS RETURN. THE ASSESSEE DID NOT RESPOND TO THIS NOTICE NOR DID HE CO-OPERATE IN COMPLETING THE ASSESSMENT WHICH WAS THEREFORE COMPL ETED UNDER S. 144. NO NOTICE UNDER S. 153A WAS ISSUED FOR THE ASS T. YR. 2009-10. FOR THESE REASONS THE ASSESSEE'S OBSERVATION IS AGAINST FACTS.' 23. IN SUM AND SUBSTANCE, THE CASE OF THE REVENUE W AS THAT FOR THE A.Y. 2009-10 THE ASSESSMENT HAD TO BE COMPL ETED U/S. 143(3) ITA NO.1157/PN/2012 A.Y. 2008-09 OF THE ACT AND THE ASSESSEE WAS ALSO ISSUED A NOTIC E U/S. 142(1) CALLING FOR RETURN FOR THE SAID YEAR. FINALLY THE ASSESSMENT WAS COMPLETED U/S. 144 OF THE ACT AND NO NOTICE WAS ISS UED U/S. 153A FOR THE A.Y. 2009-10. THE HON'BLE HIGH COURT FINALLY D ISMISSED THE WRIT PETITION. IN OUR OPINION DECISION RELIED ON BY LD. COUNSEL IN DR.K.M. MAHABOOB (SUPRA) IN FACT SUPPORT CASE OF THE REVENU E. 24. THE TRIBUNAL HAS OCCASION TO CONSIDER THE IDENT ICAL ISSUE IN THE CASE OF AKBANISALIM ABDUL GAFFARVS. DC IT, CENTRAL CIRCLE, KOLHAPUR, ITA NO. 873/PN/2008 ORDER DATED 31-08-201 2. IN THE SAID CASE, THE ASSESSMENT WAS COMPLETED U/S. 143(3) FOR THE A.Y. 2005-06 AND THE ASSESSEE TOOK THE STAND THAT THE ASSESSING OFFICER WAS LEGALLY BOUND TO PASS THE ASSESSMENT ORDER U/S. 153A/153B O F THE ACT AS THERE WAS A SEARCH AND SEIZURE ACTION AGAINST THE A SSESSEE U/S. 132 OF THE ACT ON 02-02-2005. IN THE SAID DECISION THI S TRIBUNAL HAS CONSIDERED THE DECISIONS RELIED ON BY THE LEARNED C OUNSEL IN THE FOLLOWING CASES (1) SUSHIL KUMAR JAIN (SUPRA), (2 ) M/S. BAHUBALINEMINATHMUTTIN (SUPRA) AND (3) DR.MANSUKHKA NJIBHAI SHAH (SUPRA). THE OPERATIVE PART OF THE DECISION IS AS UNDER: 8. WE FIND THAT THE CONTENTION OF THE LD. COUNSEL IS WELL SUPPORTED BY THE DECISION IN THE CASE OF SHRISUSHIL KUMAR JAIN (SUPRA) AS WELL AS M/S. BAHUBALINEMINATHMUTTIN (SUPRA). IN THE CASE OF SHRISUSHIL KUMAR JAIN WHICH IS THE LEAD CASE AND H AS HELD BY THE CO- ORDINATE BENCH EVEN IN RESPECT OF THE ASSESSMENT RE LEVANT TO THE PREVIOUS YEAR IN WHICH THE WARRANT OF AUTHORIZATION IS EXECUTED, SHOULD ALSO TO BE MADE IN COMPLIANCE WITH THE PROVISIONS O F SEC. 153A AND 153B. 9. IN THE ASSESSMENT ORDER, SECTION 143(3) IS MEN TIONED, CAN IT BE SAID THAT THE ASSESSEES ASSESSMENT IS NO T IN CONFORMITY AS CONTEMPLATED IN THE PROVISIONS 153A, 153B AND 153C ? SO FAR AS THE TIME LIMIT FOR ASSESSMENT IS CONCERNED, IT IS PROVI DED IN SEC. 153B(1)(B). THE LD COUNSEL FAIRLY ADMITTED THAT TH E ASSESSMENT IS COMPLETED AS PER THE TIME LIMIT AS POVIDED IN THE S AID PROVISO I.E. WITHIN THE PERIOD OF 2 YEARS FROM THE END OF F.Y. 2004-05 AS ADMITTEDLY, THE ASSESSMENT IS COMPLETED ON 29.12.20 06. HENCE, THE A.O HAS MADE THE COMPLIANCE OF THE MANDATORY CONDIT ION IN COMPLETING THE ASSESSMENT AS PROVIDED U/S. 153B(1)( B) OF THE ACT. 10. THEN NEXT QUESTION WHICH ARISES FOR CONSIDERAT ION IS WHETHER THE A.O HAS CONSIDERED THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH FOR FRAMING THE ASSESSMENT OF THE ASSESSEE OR NOT. WE FIND THAT THE A.O HAS CONSIDERED THE SEIZED MATE RIAL FOUND DURING THE COURSE OF SEARCH AND THE ASSESSMENT IS NOT MERE LY BASED ON THE BOOKS OF ACCOUNT AND RECORD PRODUCED BY THE ASSESSE E DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. WHAT IS TO B E SEEN IN THE SUBSTANCE OF THE ASSESSMENT ORDER AND NOT MERELY FO RMAT OF AN ORDER. IN OUR OPINION, MERELY BECAUSE SEC. 143(3) IS TYPED BY THE A.O BUT OTHERWISE, THE SUBSTANCE OF THE ASSESSMENT IS IN CO NFORMITY THAT THE ASSESSMENT AS CONTEMPLATED U/S 153A & 153B, THE AS SESSMENT ORDER CANNOT BE SAID TO BE UNLAWFUL. WE, THEREFORE, HO LD THAT THE ASSESSMENT ORDER, AS IT IS BASED ON THE SEIZED MATE RIAL AS WELL AS AS PER POST SEARCH ENQUIRY, THERE IS NO INFIRMITY IN T HE ASSESSMENT ORDER. WE, ACCORDINGLY, DISMISS THE ADDITIONAL GROUND RAIS ED BY THE ASSESSEE. 25. ON PERUSAL OF THE IMPUGNED ASSESSMENT ORDERS, I T IS SEEN THAT THE ASSESSING OFFICER HAS CONSIDERED THE INCOME OFFERED BY THE ASSESSEE DURING THE COURSE OF SEARCH AND SEIZUR E PROCEEDINGS AS ITA NO.1157/PN/2012 A.Y. 2008-09 WELL AS THE CASH AND JEWELLERY FOUND AND SEIZED. M OREOVER, SAID ASSESSMENT HAS BEEN COMPLETED WITHIN TIME SPECIFIED U/S. 153B(1)(B) I.E. WITHIN PERIOD OF TWO YEARS FROM END OF FINANCI AL YEAR IN WHICH SEARCH HAS TAKEN PLACE. HENCE, OTHERWISE ALSO THER E IS COMPLIANCE OF THE MANDATORY CONDITION IN COMPLETING THE ASSESSMEN T AS PROVIDE U/S. 153B(1)(B) OF THE ACT. WE ACCORDINGLY HOLD THAT TH ERE IS NO MERIT IN THE GROUNDS TAKEN BY THE ASSESSEE IN A.Y. 2007-08 AND R ESPECTIVE GROUND IS DISMISSED 5. IN THIS CASE ALSO, THE ASSESSMENT OF THE ASSESSE E HAS BEEN COMPLETED WITHIN THE TIME LIMIT PRESCRIBED U/S. 153 B(1)(B) OF THE ACT HENCE, THE ASSESSEE SHOULD NOT HAVE ANY GRIEVANCE. MOREOVER, THIS ISSUE STANDS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THI S TRIBUNAL IN THE CASE OF BINDRA GROUP (SUPRA). WE, THEREFORE, FOLLOWING THE DECISION IN THE CASE OF BINDRA GROUP (SUPRA), DISMISS THE GROUND NO. 3. 12. FOLLOWING THE AFORESAID DECISION, WHICH HAS BEE N RENDERED UNDER IDENTICAL CIRCUMSTANCES, THE GROUND OF APPEAL NO.5 RAISED BY THE ASSESSEE IS HEREBY DISMISSED. 13. BY WAY OF GROUND OF APPEAL NO.6, THE PLEA OF TH E ASSESSEE IS THAT CASH OF RS.16,00,000/- SEIZED DURING THE COURSE OF SEARC H HAS NOT BEEN ADJUSTED AGAINST THE LIABILITY OF ADVANCE TAX FOR THE PURPOS ES OF COMPUTING INTEREST CHARGEABLE UNDER SECTIONS 234B & 234C OF THE ACT. 14. ON THIS ASPECT, WE FIND THAT NO SUCH PLEA WAS R AISED BEFORE THE LOWER AUTHORITIES, AS IT IS NOT EMERGING FROM EITHER OF T HE ORDER OF THE AUTHORITIES BELOW. EVEN IN THE COURSE OF HEARING BEFORE US, TH E LEARNED COUNSEL HAS NOT ASSERTED THAT ANY SPECIFIC REQUEST WAS MADE BY THE ASSESSEE IN THIS REGARD BEFORE THE LOWER AUTHORITIES FOR ADJUSTING THE CASH SEIZED AGAINST THE ADVANCE TAX LIABILITY. THEREFORE, IN THE ABSENCE OF ANY RE QUEST FROM THE ASSESSEE FOR ADJUSTMENT OF THE SEIZED CASH, IN SUCH A SITUATION, IN OUR VIEW, ASSESSEE CANNOT ESCAPE FROM THE LIABILITY TO PAY THE REQUISI TE INTEREST CHARGEABLE UNDER SECTIONS 234B & 234C OF THE ACT. THUS, THE GROUND OF APPEAL NO.6 RAISED BY THE ASSESSEE IS HEREBY DISMISSED. ITA NO.1157/PN/2012 A.Y. 2008-09 15. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JUNE, 2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 20 TH JUNE, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), KOLHAPUR; 4) THE CIT, KOLHAPUR; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE