EL EL HOTELS & INVESTMENTS LIMITED, MUMBAI V. ACIT, CIRCLE 3(1), MUMBAI

ITA 1166/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8073 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 20-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANT LAL
• Assessee Lawyers: S C TIWARI
• Keywords: Search and seizure
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E : MUMBAI BEFORE SHRI D. MANMOHAN, V.P. AND R.K.PANDA, A.M. ITA. NO. 1166/MUM/2009 ASSESSMENT YEAR 2005-2006 ELEL HOTELS & INVESTMENTS LIMITED MUMBAI 400 050 PAN AAACE2846D VS. ACIT, CIRCLE 3 (1) MUMBAI. (APPELLANT) (RESPONDENT) FOR APPELLANT : SHRI S.C. TIWARI FOR RESPONDENT : SHRI HEMANT LAL ORDER PER D. MANMOHAN, V.P. 1. THIS APPEAL BY THE ASSESSEE-COMPANY IS DIRECTED AGAINST THE ORDER DATED 10-12-2008 PASSED BY THE CIT(A)-IX, MUMBAI AND IT PERTAINS TO THE ASSESSMENT YEAR 2005-2006. THOUGH A SSESSEE HAS RAISED NUMBER OF GROUNDS IN THE GROUNDS OF APPEAL A NNEXED TO FORM 36, ON 21-7-2010 THE ASSESSEE RAISED THE FOLLOWING ADDITIONAL GROUNDS IN TERMS OF RULE 11 OF THE APPELLATE TRIBUNAL RULES , 1963. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE AND IN LAW LEARNED CIT(A) HAS ERRED IN NOT ANNULLING AND INSTEAD CONFIRMING THE IMPUGNED ASSESSMENT ORDER MADE ON 22/11/2007 AND THEREBY DISMISSING THE APPEAL FILED BY THE APPELLANT. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS CASE AND IN LAW THE ASSESSMENT ORDER MADE BY THE ASSESSING OFFICER IN BOMBAY ON 22- 11-2007 NO LONGER SURVIVES AFTER THE ORDER U/S. 143(3) R/W. SECTION 153A HAS BEEN MADE ON 31-12- 2008. 2 2. LEARNED COUNSEL, APPEARING ON BEHALF OF THE ASS ESSEE, PLEADED THAT THE ISSUE URGED IN THE ADDITIONAL GROU NDS DESERVES TO BE ADMITTED AS IT GOES TO THE ROOT OF THE MATTER SINCE THE ASSESSMENT MADE BY THE ASSESSING OFFICER STANDS ABATED, UPON I NITIATING SEARCH AND SEIZURE PROCEEDINGS, AND THIS ISSUE WAS NOT RAI SED BEFORE THE TAX AUTHORITIES INADVERTENTLY. 3. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WE ADMIT ADDITIONAL GROUNDS SINCE FRESH FACTS ARE NOT REQUIR ED TO DISPOSE OF THE ADDITIONAL GROUNDS. LEARNED COUNSEL, APPEARING ON B EHALF OF THE ASSESSEE, FILED A COPY OF THE ORDER PASSED BY THE A SSESSING OFFICER UNDER SECTION 143 (3) READ WITH SECTION 153A OF THE INCOME TAX ACT, 1961 TO SUBMIT THAT SEARCH AND SEIZURE OPERATIONS, UNDER SECTION 132A OF THE I.T. ACT, 1961, WAS CONDUCTED ON 28-2-2 007 IN THE GROUP CASES OF SHRI SURESH NANDA AND IN THE PROCESS THE P REMISES OF THE ASSESSEE-COMPANY WAS ALSO COVERED. THEREUPON, NOTIC E UNDER SECTION 153A OF THE ACT WAS ISSUED ON 9-9-2008. ASSESSMENT WAS FINALLY COMPLETED, UNDER SECTION 153A OF THE ACT, IN RESPEC T OF THE ASSESSMENT YEAR UNDER CONSIDERATION, IN THE HANDS O F THE ASSESSEE- COMPANY. LEARNED COUNSEL, APPEARING ON BEHALF OF TH E ASSESSEE, ADVERTED OUR ATTENTION TO THE PROVISIONS OF SECTION 153A OF THE ACT WHICH READS AS UNDER : (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, WHERE A SEARCH IS INITIATED UNDER SECT ION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER T HE 31 ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL (2) IF ANY PROCEEDING INITIATED OR ANY ORDER OF ASS ESSMENT OR RE-ASSESSMENT MADE UNDER SUB-SECTION (1) HAS BEE N ANNULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING, THEN, NOTWITHSTANDING ANYTHING CONTAINED IN SUB- SECTION (1) OR SECTION 153, THE ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR WHICH HAS ABATED UNDER THE SECOND PROVISO TO SUB-SECTION (1), SHALL STAND REVIVED WITH EFFECT FROM THE DATE OF RECEIPT OF THE ORDER OF SUCH ANNULMENT BY THE COMMISSIONER. 3 4. AS COULD BE NOTICED FROM THE AFOREMENTIONED PRO VISION WHERE A SEARCH IS INITIATED UNDER SECTION 132 OF TH E ACT, AFTER THE 31 ST DAY OF MAY, 2003, THE ASSESSING OFFICER HAS TO ASSE SS OR RE-ASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FAL LING WITHIN SUCH SIX ASSESSMENT YEARS. THE SECOND PROVISO STATES THAT AN ASSESSMENT OR RE-ASSESSMENT, FALLING WITHIN THE PERIOD OF SIX ASS ESSMENT YEARS REFERRED TO ABOVE, SHALL ABATE IF SUCH PROCEEDINGS ARE PENDING ON THE DATE OF INITIATION OF THE SEARCH. HOWEVER, SUB-SECT ION (2) COMES INTO PLAY TO RESTORE THE ASSESSMENT ORIGINALLY MADE, IN THE EVENT OF ANNULMENT OF THE PROCEEDINGS INITIATED UNDER SECTIO N 153A OF THE ACT. LEARNED COUNSEL SUBMITTED THAT, IN THE INSTANT CASE , THE ASSESSEES PREMISES WAS ALSO COVERED IN THE PROCESS OF CARRYIN G OUT SEARCH AND A FORMAL NOTICE UNDER SECTION 153A WAS ISSUED ON 9-9- 2008 AND THUS ASSESSMENT ORDER PASSED ON 22-11-2007, DESERVES TO BE ANNULLED SINCE SUCH ASSESSMENT STANDS ABATED. 5. LEARNED DR ON THE OTHER HAND SUBMITTED THAT THE RE IS NO MATERIAL TO INDICATE THAT THE SEARCH OPERATIONS WER E CONDUCTED ON THE ASSESSEE PRIOR TO COMPLETION OF THE ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. HE THUS STRONGLY OBJECTED TO THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RECORD. AS COULD BE NOTICED FROM THE AS SESSMENT MADE UNDER SECTION 143 (3) READ WITH SECTION 153A OF THE I.T. ACT SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 28-2-2007 WH ICH IS A DATE ANTERIOR TO THE DATE OF COMPLETION OF THE ASSESSMEN T UNDER SECTION 143 (3) OF THE ACT. ADMITTEDLY, THE PREMISES OF M/S. EL EL HOTELS AND INVESTMENT LTD. WAS ALSO COVERED AND THE CASE WAS C ENTRALISED IN THIS CHARGE VIDE ORDER PASSED BY THE CIT(A)-IX, MUMBAI D ATED 28-11-2007. THE PROCESS OF CONDUCTING SEARCH, IN THE PREMISES O F M/S. ELEL HOTELS AND INVESTMENT LTD., INDICATE THAT A SEARCH IS INITIATED UNDER SECTION 132 OF THE ACT ON THE ASSESSEE, IN WHICH EV ENT, PENDING ASSESSMENTS STAND ABATED, IN TERMS OF SECTION 153A( 1) OF THE ACT. 4 7. SUB-SECTION (1) OF SECTION 153A NOT ONLY COVER S A CASE OF A PERSON IN WHOSE NAME SEARCH IS INITIATED UNDER SECT ION 132 OF THE ACT BUT ALSO A PERSON WHERE A SEARCH IS INITIATED. T HE SAID EXPRESSION COVERS THE GROUP WHOSE PREMISES WERE COVERED IN THE PROCESS OF SEARCH. ASSESSMENT MADE UNDER SECTION 143 (3) READ WITH SECTION 153A OF THE I.T. ACT INDICATES THAT THE SEARCH AND SEIZURE OPERATIONS UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THE GROUP CASES OF SH. SURESH NANDA. 8. UNDER THE ABOVE CIRCUMSTANCES, WE ARE OF THE OP INION THAT BY VIRTUE OF SECOND PROVISO TO SECTION 153A(1) OF THE ACT, THE ASSESSMENT ORIGINALLY MADE, FOR THE YEAR UNDER CONS IDERATION, STANDS ABATED, IN WHICH EVENT GROUNDS URGED BY THE ASSESSE E ON THE MERITS OF THE ADDITIONS MADE THEREIN ARE ACADEMIC FOR THE PRE SENT AND THEREFORE, DO NOT DESERVE CONSIDERATION AT THIS STA GE. IN OTHERWORDS, THE ADDITIONAL GROUNDS URGED BY THE ASSESSEE ARE AL LOWED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED ON THE PRELIMINARY GROUND. ORDER PRONOUNCED ACCORDINGLY IN THE OPEN COURT. SD/- SD/- (R.K. PANDA) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI, DATE 23 RD MARCH, 2011. VBP/- 5 COPY TO 1. ELEL HOTELS & INVESTMENTS LIMITED, HOTEL SEAROCK, B ANDSTAND, B.J. ROAD, BANDRA (WEST), MUMBAI400 050. PAN AAACE 2846D 2. ACIT, CIRCLE 3 (1), MUMBAI. 3. CIT(A)-IX, MUMBAI 4. CIT-IX, MUMBAI 5. DR E BENCH 6. GUARD FILE. (TRUE COPY) BY ORDER ASST. REGISTRAR, ITAT, MUMBAI BENCHES MUMBAI.