SH.ARUN NARULA, AMRITSAR V. DY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, AMRITSAR

ITA 127/ASR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6327 (ITAT-AMRITSAR)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-11-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 11-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRABHJO T KAUR LD
• Assessee Lawyers: ASHRAY SARNA LD
• Keywords: Unexplained cash credit; Search and seizure; Reasonable cause; Condonation of delay
• Section: 153A; 143(1); 192; 153; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N.K.CHOUDHRY, JUDICIAL MEMBER AND DR. A.L.SAINI, ACCOUNTANT MEMBER ITA NOS.127 & 128/ASR/2019 ASSESSMENT YEARS: 2010-11 & 2011-12 SH. ARUN NARULA D-47, RANJIT AVENUE, AMRITSAR. VS. DY. CIT, CENTRAL CIRCLE, ARMITSAR. [PAN:AERPN 7833F] (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ASHRAY SAR NA (LD. CA) RESPONDENT BY: SMT. PRABHJOT KAUR (LD. CIT- DR) DATE OF HEARING: 29.11.2019 DATE OF PRONOUNCEMENT: 01.01.2020 ORDER PER N.K.CHOUDHRY, JM: THE ASSESSEE HAS PREFERRED THE INSTANT APPEALS AGAINST THE SEPARATE ORDERS DATED 31.10.2018 PASSED BY THE LD. CIT( A)-5, LUDHIANA, U/S 250(6) OF THE INCOME TAX ACT, 1961 (HERE INAFTER CALLED AS THE ACT). 2. IN BOTH THE APPEALS THE ISSUES ARE IDENTICAL, THEREFORE, FOR THE SAKE OF BREVITY HAVE BEEN TAKEN SIMULTANEOUSLY FOR ADJ UDICATION BY THIS COMPOSITE ORDER AND THE FACTS OF THE CASE OF ITA NO. 127/ASR/2019 SHALL BE QUOTED AND RESULTS OF THE SAME SHALL APPLY MUTA TIS MUTANDIS TO ITA NO.128/ASR/2019. 3. AT THE OUTSET, IT WAS OBSERVED THAT THERE IS DELAY OF 34 DAYS IN FILING OF THE INSTANT APPEALS, FOR WHICH THE ASSESSEE HAS P RAYED FOR ITA NOS. 127 & 128 /ASR/ 2019 (A.YS.2 010-11 & 2011-12) SH. ARUN NARULA VS. DCIT 2 CONDONATION OF DELAY ON THE GROUND THAT THOUGH THE I MPUGNED ORDERS WERE SERVED UPON THE ASSESSEE ON DATED 09.11.2018 AND T HEREFORE, THE APPEALS WERE SUPPOSED TO BE FILED ON OR BEFORE 8 TH JANUARY, 2019. CONSEQUENTLY, IMPUGNED ORDER AND DOCUMENTS RELATED TO THE APPEALS WERE HANDED OVER TO THE ASSESSEES EMPLOYEE FOR TRANSMIT ION TO ASSESSEES COUNSEL WITH DIRECTION TO FILE THE APPEALS BEFORE THE HONBLE ITAT, AMRITSAR, HOWEVER, THE IMPUGNED ORDERS WERE MISP LACED AT THE ASSESSEE EMPLOYEES END AND AFTER FRANTIC SEARCH, THE ORIGI NAL ORDERS COULD NOT BE TRACED, HOWEVER, LATER ON THE SAME HAVE B EEN PROCURED AND PROVIDED TO THE COUNSEL WHO FILED THE INSTANT APPE ALS. CONSEQUENTLY DELAY OF AROUND 34 DAYS OCCURRED IN FILIN G OF THE INSTANT APPEALS. AS THE ASSESSEE WAS PREVENTED BY A REASONABLE CAUSE FOR NON-FILING OF THE APPEALS WITHIN THE PRESCRIBED TIME, THEREFORE, IN THE INTEREST OF JUSTICE, THE DELAY IS LIABLE TO BE CONDONED. THE ASSESSEE HAS ALSO FILED AFFIDAVIT IN SUPPORT OF HIS CONTENTIONS. 4. THE LD. DR, ON THE CONTRARY REFUTED THE CLAIM OF THE ASSESSEE AND SUBMITTED THAT THE ASSESSEE IS NOT ENTITLED FOR ANY L ENIENCY OF HIS LATCHES. 5. HAVING CONSIDERED THE SUBMISSIONS OF THE PARTIES. THE ASSE SSE HAS DULY FILED HIS AFFIDAVIT IN SUPPORT OF HIS CONTENTIO N. DELAY AS EXPLAINED BY THE ASSESSEE AS TO HANDING OVER THE DOCUMEN TS TO HIS EMPLOYEE, WHICH COULD NOT BE TRANSMITTED TO THE ASSESSEES COUNSEL BUT LATER ON THE ORDERS HAVE BEEN PROCURED AND CONSEQUE NTLY THE APPEALS HAVE BEEN FILED WITH DELAY. IN OUR CONSIDERED VIEW, THE REASONS FOR NOT FILING THE APPEAL WITHIN LIMITATION T IME SEEMS TO BE REASONABLE AND BEYOND THE REACH OF THE ASSESSEE. HENCE, CONSI DERING THE SAME AS GENUINE AND BONAFIDE, WE ARE INCLINED TO CO NDONE THE ITA NOS. 127 & 128 /ASR/ 2019 (A.YS.2 010-11 & 2011-12) SH. ARUN NARULA VS. DCIT 3 DELAY OF 34 DAYS IN FILING OF THE INSTANT APPEALS. HENCE , THE DELAY IN FILLING OF THE APPEALS UNDER CONSIDERATION STANDS CONDON ED. 6. IN ITA NO. 127/ASR/2019 , THE ASSESSEE HAD FILED HIS OR IGINAL RETURN OF INCOME BY DECLARING A NET INCOME AMOUNTING T O RS.4,07,000/- ON DATED 30.03.2011 WHICH WAS PROCESSED AND COMPLETED BY THE REVENUE DEPARTMENT ON DATED 23.11.2 011 U/S 143(1) OF THE ACT. THEREAFTER, A SEARCH WAS CARRIED U/S 132(1) OF THE ACT AT THE RESIDENCE OF ASSESSEE AND HIS FAMILY ON DATED 0 5.12.2013. CONSEQUENTLY, THE NOTICE DATED 18.07.2014 U/S 153A WAS ISSUED TO THE ASSESSEE AND THE ASSESSEE VIDE LETTER DATED 21.03.2015 STATED THAT THE ORIGINAL RETURN FILED MAY BE TREATED AS HAV ING BEEN FILED IN RESPONSE TO THE SAID NOTICE. THEREAFTER, VARIOUS STATUTOR Y NOTICES HAVE BEEN ISSUED WHICH REMAINED UN-COMPLIED. ULTIMATELY THE ASSESSING OFFICER MADE AN ADDITION OF RS.2,90,000/- AS AN AGRICUL TURE INCOME AND RS.29,65,000/- AS UNEXPLAINED CREDITS IN THE ACCOUNTS OF THE ASSESSEE U/S 68 OF THE ACT. 7. THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE THE LD. CIT(A) AND RAISED VARIOUS GROUNDS AND SUBMITTED THAT ASSESSMENT IN THE INSTANT CASE HAS ALREADY BEEN COMPLETED AND NO INCRIMINAT ING MATERIAL HAS BEEN FOUND, THEREFORE, NO ADDITION COULD BE MADE U/S. 153A/144 OF THE ACT. THE LD. CIT(A) VIDE IMPUGNED OR DER ON THE SAME FOOTING AS HELD BY ASSESSING OFFICER PARTLY UPHELD TH E ORDER OF THE ASSESSING OFFICER AND REDUCED THE ADDITION OF RS.29,6 5,000/- TO RS.22,75,000/- U/S 68 OF THE ACT, AGAINST WHICH THE A SSESSEE IS IN APPEAL BEFORE US. ITA NOS. 127 & 128 /ASR/ 2019 (A.YS.2 010-11 & 2011-12) SH. ARUN NARULA VS. DCIT 4 8. THE ASSESSE WHILE RELYING UPON THE JUDGMENT OF DELHI HI GH COURT IN THE CASE OF CIT VS. KABUL CHAWLA {61 TAXMANN. COM 412}, REITERATED THE SAME STAND TAKEN BY THE ASSEEEE BEFORE T HE AUTHORITIES BELOW. 9. ON THE CONTRARY, THE LD. DR RELIED UPON THE VARIOUS JUDGMENTS AND SUBMITTED THAT THOUGH THE INCRIMINATING MATERIAL WAS RECOVERED DURING THE TIME SEARCH OPERATION, HOWEVER IN LAW THER E IS NO NECESSITY OF ANY INCRIMINATING MATERIAL WHILE INITIATING PROCEE DINGS U/S 153 OF THE ACT AS HELD BY VARIOUS HIGH COURTS AND THE ADDITION CAN BE MADE WITHOUT ANY INCRIMINATING MATERIAL QUA THE YEARS COVER ED BY SEC.153A. THE LD. DR FURTHER ARGUED THAT THE CONCLUSION DRAWN B Y DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWALA (SUPRA) IS CONTRARY TO THE PRINCIPLE LAID BY THE SAME HIGH COURT IN THE CASE O F ANIL KUMAR BHATIA ( 24 TAXMANN.COM 98) AND CHETAN DAS LACHMAN DAS ( 25 TAXMANN.COM 227 ) AND ALSO VARIOUS DECISION OF OTHER HIGH COURTS. FURTHER THE DECISION OF KABUL CHAWLA (SUPRA) IS NOT A G OOD LAW BECAUSE THE ISSUE RELATING TO MATERIAL NOT FOUND DURING THE SEARCH WAS CONSIDERED TO BE OPEN IN ANIL KUMAR BHATIA (SUPRA) WHEREAS THE SAME WAS ALREADY DECIDED IN THAT CASE. CONSEQUENTLY, THE CASE DECIDED IN CHETAN DAS LACHMAN DAS (SUPRA) WAS NOT DISTINGU ISHABLE FROM THE CASE OF KABUL CHAWLA (SUPRA). 10. HAVING HEARD THE PARTIES AT LENGTH AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. THOUGH THE ASSEEEE HAS CLAIMED BEF ORE THE AUTHORITIES BELOW THAT WHERE NO ASSESSMENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION WERE PENDING, IN THAT EVENTUALITY , IN THE ABSENCE ITA NOS. 127 & 128 /ASR/ 2019 (A.YS.2 010-11 & 2011-12) SH. ARUN NARULA VS. DCIT 5 OF ANY INCRIMINATING EVIDENCE FOUND DURING THE COURSE O F SEARCH AND SEIZURE PROCEEDINGS, NO ADDITION/DISALLOWANCE CAN BE MAD E QUA UNABATED ASSESSMENT FOR THE SAID YEAR, HOWEVER THE AUTHO RITIES BELOW HELD HAVE HELD THAT AS PER KERALA HIGH COURT JUDGMEN T IN THE CASE OF KERALA HIGH COURT IN THE CASE OF E.N. GOPAL KUMAR VS. CIT(CENTRAL) (SUPRA), THERE IS NO CONDITION THAT THE DEPARTMENT HA S TO UNEARTH SOME INCRIMINATING MATERIAL TO CONCLUDE SOME METHOD AGAI NST THE ASSESSEE IN EVENTS WHERE THE ASSESSMENT IS TRIGGERED BY A N OTICE UNDER SECTION 153(1)(A) OF THE ACT. 10.1 ON THE BASIS OF RIVAL CLAIMS OF THE ASSESSEE AND THE R EVENUE DEPARTMENT, THE QUESTION INVOLVED IN THIS CASE RELATES T O THE SITUATION ' IF ON THE DATE OF SEARCH, THE ASSESSMENT PROCEEDING S ALREADY STOOD COMPLETED AND NO INCRIMINATING MATERIAL UNEAR THED DURING THE SEARCH OPERATION FROM THE ASSESSEE'S POS SESSION OR PREMISES, IN THAT EVENTUALITY, WHETHER THE ADDITION CAN BE MADE TO THE INCOME ALREADY ASSESSED' . 10.2 THERE ARE VARIOUS JUDGMENTS AGAINST THE ASSESSEES CONTEN TION BUT WE ARE QUOTING FEW ON WHICH THE REVENUE DEPARTME NT RELIED:- (I) E.N. GOPAL KUMAR VS. CIT (CENTRAL) REPORTED 390 ITR 131(KERELA HIGH COURT) (II) CIT VS. RAJ KUMAR ARORA, 52 TAXMANN.COM.172 (III) CIT VS. K.P. UMMAER, PROP. STAR ROLLING MILL [2019] 413 ITR 0251 (IV) CANARA HOUSING DEVELOPMENT CO. VS. DCIT 49 TAXMANN.COM 98, (V) CIT VS. ANIL KUMAR BHATIA 24 TAXMANN.COM 98 (VI) CIT VS. CHETAN DAS LUCHMAN DAS 25 TAXMANN.COM 227. ITA NOS. 127 & 128 /ASR/ 2019 (A.YS.2 010-11 & 2011-12) SH. ARUN NARULA VS. DCIT 6 10.3 THERE ARE MANY JUDGMENTS OF VARIOUS HIGH COURTS IN FAV OUR OF THE ASSESSEES CONTENTION. FOR THE SAKE OF BREVITY, WE ARE MENTIONING FEW. (1) CIT VS. KABUL CHAWALA 61 TAXMANN.COM 412 (2) PR. CIT VS. DHARAMPAL PREMCHAND LTD. [2018] 408 ITR 0170 (DELHI HIGH COURT) (3) PR. CIT VS. SUNRISE FINLEASE (PVT.T) LTD. [2018] 30 5 CTR (GUJ) 421 (GUJRAT HIGH COURT) (4) CIT VS. DEEPAK KUMAR AGARWAL & ORS [2017] 100 CCH 0011 (MUMBAI HIGH COURT) (5) PR. JOINT CIT VS. MEETA GUTGUTIA [2017] 395 ITR 526 (DELHI HIGH COURT) (6) PR. JOINT CIT VS. MEETA GUTGUTIA [2018] TAXMANN.COM 411 (SUPREME COURT) IN SLP (C ) DAIRY NO. 18121/2018 DATED 2 ND JULY, 2018. 10.4 NO DOUBT THERE ARE JUDGMENTS ON BOTH SIDES TO THE ISSUE, HOWEVER, AS PER DECISION OF HON'BLE APEX COURT IN THE CA SE OF CIT VS. VEGETABLE PRODUCTS 88 ITR 192 , WHEREIN THE HON'BLE CO URT LAID DOWN THE PROPOSITION TO THE EFFECTS 'WHENEVER THERE ARE TWO REASONABLE CONSTRUCTIONS OF A TAXING PROVISION ARE POSSIBLE TH AT CONSTRUCTION WHICH FAVOURS THE ASSESSEE MUST BE ADOPTED' MEANING THEREBY WHEN TWO DIFFERENT VIEWS OF COURT ARE AVAILABLE ON AN ISSUE THEN THE VIEW WHICH FAVORS THE ASSESSEE OR THE JUDGMENT WHICH FAVO URS THE ASSESSEE SHOULD BE FOLLOWED, WE DO NOT HAVE HESITATION TO FOLLOW THE JUDGMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT(CENTRAL-3) VS. KABUL CHAWLA (SUPRA) WHEREIN CLEARL Y HELD THAT IF ON THE DATE OF SEARCH, THE ASSESSMENT PROCEEDINGS ALREADY STOOD COMPLETED AND NO INCRIMINATING MATERIAL UNEAR THED DURING THE SEARCH, THEN NO ADDITION CAN BE MADE TO THE INCOME ITA NOS. 127 & 128 /ASR/ 2019 (A.YS.2 010-11 & 2011-12) SH. ARUN NARULA VS. DCIT 7 ALREADY ASSESSED . THE SAID DICTUM OF THE HONBLE HIGH COURT CONFIRMED BY THE HONBLE APEX COURT VIDE ORDER DATED 2 ND JULY, 2018 IN THE CASE OF PR. JOINT CIT VS. MEETA GUTGUTIA (SUPRA) BY DISMISSING THE SLP FILED AGAINST THE JUDGMENT OF DELHI HIGH COURT, WHEREIN THE SAME DICTUM HAS BEEN LAID DOWN BY THE H ON'BLE COURT AS LAID DOWN IN THE CIT VS. KABUL CHAWLA (SUPRA) , HENCE IT CANNOT SAID THAT LAW LAID DOWN BY DELHI HIGH COURT IN KABUL CHAWLA CASE {SUP RA} IS NOT A GOOD LAW AS CLAIMED BY THE LD. CIT DR. EVEN OTHERWISE THE CASES RELIED UPON DECIDED BY THE HIGH COURTS HAVE NOT BEEN CO NFIRMED BY THE HONBLE APEX COURT, HENCE, THE VIEW WHICH FAVORS TH E ASSESSEE AND/OR THE JUDGMENTS WHICH FAVOURS THE ASSESSEE ARE REQUIR ED TO THE RESPECTFULLY FOLLOWED . 10.5 WHILE COMING TO THE INSTANT CASE, THOUGH THE LD. C IT DR ALSO RELIED UPON THE JUDGMENT OF APEX COURT IN DY. CIT V S ZUARI ESTATE DEVELOPMENT AND INVESTMENT CO. LTD. [2015] 373 ITR 6 61 AND SUBMITTED THAT ANY INTIMATION ISSUED U/S 143(1) CANNOT BE CONSIDERED AS ASSESSMENT, HOWEVER IT IS A FACT THAT IN THIS CASE INCOME T AX RETURN FILED BY THE ASSESSEE FOR THE RELEVANT ASSESSMENT YE AR: 2011- 12 HAS BEEN PROCESSED AND COMPLETED ON 23.12.2011 BY THE REVENUE DEPARTMENT U/S 143(1) OF THE ACT AND IT IS NOT THE CASE OF THE REVENUE DEPARTMENT THAT THE ASSESSMENT PROCEEDINGS WERE ST ILL ALIVE AS ON THE DATE OF SEARCH OPERATION, THEREFORE THE CASE CI TED BY THE LD. CIT DR IS DISTINGUISHABLE ON FACTS. EVEN FROM THE ORDERS PASSED BY THE AUTHORITIES BELOW TH ERE IS NOTHING TO SUGGEST AS TO WHAT INCRIMINATING MATERIAL H AS BEEN FOUND ON DATED 05.12.2013 DURING THE SEARCH U/S 132(1) OF TH E ACT FROM THE ITA NOS. 127 & 128 /ASR/ 2019 (A.YS.2 010-11 & 2011-12) SH. ARUN NARULA VS. DCIT 8 ASSESSEE POSSESSION OR HIS PREMISES, ON THE BASIS OF WHICH THE ADDITIONS HAVE BEEN MADE. AS THE ISSUE INVOLVED IN THE INSTANT CASE IS SQUARELY COVER ED BY THE DECISIONS OF DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) AND CIT VS. MEETA GUTGUTIA (SUPRA), HENCE RESPECT FULLY FOLLOWING THE SAME, WE ARE INCLINED TO DELETE THE ADD ITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A). CONSEQUENTLY, THE APPEAL IS LIABLE TO BE ALLOWED. 11. IN THE RESULT, THE BOTH THE APPEALS FILED BY THE ASSESSE E STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/0 1/2020. SD/- SD/- (DR. A.L.SAINI) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDIC IAL MEMBER DATED: 01/01/2020. /PK/ PS. COPY FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THEN CIT(APPEALS) 5. SR DR, I.T.A.T. AMRITSAR 6. GUARD FILE TRUE COPY BY ORDER