M/s. DCIT, New Delhi V. M/s. B L Kashyap & Sons, New Delhi

ITA 1294/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74139 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-01-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 06-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SALIL KAPOOR SANAT KAPOOR
• Keywords: Gift; Search and seizure; Principle of natural justice; Non compliance; Reassessment proceedings
• Section: 143(3); 142(1); 153A; 27; 132; 12

Judgement Text

ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `A NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER I.T.A.NO.1294/DEL/2013 ASSESSMENT YEAR : 2002-03 DY.COMMISSIONER OF INCOME TAX, VS B.L. KA SHYAP & SONS, CENTRAL CIRCLE-17, B-1/A-21 EXTN., ROOM NO.353, MOHAN COOPERATIVE INDUSTRIAL E-2, ARA CENTRE, ESTATE, MATHURA ROAD, JHANDEWALAN EXTENSION, NEW DELHI-110017 NEW DELHI. (PAN: AAAFB4369B) C.O. NO.100/D EL/2013 (IN I.T.A.NO.1294/DEL/2013) ASSESSMENT YEAR : 2002-03 B.L. KASHYAP & SONS, VS DY.COMMISSIONER OF INCOM E TAX, NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: MS RENU JAUHRI, C.I.T. DR SR.DR, MS Y.KAKKAR, DR RESPONDENT BY : S/SHRI SALIL KAP OOR, SANAT KAPOOR O R D E R PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAIN ST THE ORDER OF COMMISSIONER OF INCOME TAX(A)II, NEW DELHI DATED 3 1.12.2012 IN APPEAL NO. 353/09-10 FOR AY 2002-03. 2. THE REVENUE HAS RAISED SOLE GROUND IN THIS APPEA L WHICH READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSEE NOT SUBMITTING THE RELEVANT DETA ILS DURING THE ASSESSMENT PROCEEDINGS TO VERIFY THE GENUINENESS OF THE EXPENSES, THE LD. COMMISSIONER O F INCOME TAX(A) HAS ERRED IN DELETING THE ADDITION OF RS. ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 2 10,00,000/- OUT OF THE TOTAL EXPENSES CLAIMED OF RS .5.25 CRORES. 3. REMAINING GROUND NO. 2 IS GENERAL IN NATURE WHIC H NEEDS NO ADJUDICATION. 4. BRIEFLY STATED THE FACTS GIVING RISE TO THIS APP EAL ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT, 1962 WAS COND UCTED BY THE INVESTIGATION WING OF THE DEPARTMENT ON 19.2.2008 I N THE CASE OF M/S B.L. KASHYAP & SONS GROUP OF CASES INCLUDING ASSESSEE PA RTNERSHIP FIRM. SUBSEQUENTLY, ALL THE CASES WERE CENTRALIZED U/S 12 7(2) OF THE ACT IN THE CENTRAL CIRCLE-17, NEW DELHI. IN RESPONSE TO THE N OTICE U/S 153A OF THE ACT, THE ASSESSEE FILED A RETURN FOR AY 2003-04 ON 10.2. 2009 DECLARING AN INCOME OF RS.25,65,243/-. THEREAFTER, NOTICES U/S 143(2) AND 142(1) ALONG WITH QUESTIONNAIRE DATED 30.9.2009 CALLING FOR DETAILS R ELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION IN THIS APPEAL I.E. 2002-0 3 WERE ISSUED AND SERVED ON THE ASSESSEE. AS PER ASSESSING OFFICER, THE ASS ESSEE FILED ONLY PARTS OF DETAIL CALLED BUT DETAILS/EXPLANATION RELATED TO ST ATEMENT OF ALL BANK ACCOUNTS ALONG WITH BANK RECONCILIATION STATEMENT, CONFIRMED COPIES OF ACCOUNTS IN TERMS OF UNSECURED LOANS, PARTY WISE DETAIL OF PURC HASES AND PURCHASE RETURNS ALONG WITH SUPPORTING DOCUMENTS AND BOOKS O F ACCOUNTS ALONG WITH SUPPORTING BILLS AND VOUCHERS WERE NOT FILED BEFORE THE ASSESSING OFFICER. ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 3 THE ASSESSING OFFICER HELD THAT IN ABSENCE OF THE S AME, IT WAS PRACTICALLY IMPOSSIBLE TO EXAMINE THE FINANCIAL STATEMENT FILED ALONG WITH THE AUDIT REPORT OR VARIOUS OTHER TRANSACTIONS CONDUCTED BY T HE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR. THE ASSESSING OFFICER HE LD THAT SINCE ASSESSEE HAS FAILED TO FILE REQUISITE DETAILS/EXPLANATION AND DO CUMENTS ETC., THEREFORE, HE IS LEFT WITH NO OTHER ALTERNATIVE BUT TO COMPLETE ASSE SSMENT PROCEEDINGS ON MERITS AND ON THE BASIS OF MATERIAL AVAILABLE ON RE CORD. 5. THE ASSESSING OFFICER MADE A DISALLOWANCE AND AD DITION OF RS. 10 LAKH OUT OF TOTAL CLAIM OF EXPENSES AMOUNTING TO RS . 5.25 CRORE WITH FOLLOWING OBSERVATIONS AND FINDINGS:- 6. FROM THE FOREGOING DISCUSSION, IT IS EVIDENT T HAT THE ASSESSEE HAS NOT FILED NECESSARY DETAILS, DOCUMENTS , INFORMATIONS AND EXPLANATIONS WHICH WERE REQUIRED V IDE QUESTIONNAIRE DATED 30.09.2009 TO COMPLETE THE ASSESSMENT PROCEEDINGS AS MENTIONED IN PARA 3 ABOVE . IT IS NOT OUT OF PLACE TO MENTION HERE THAT THE COUNSE L OF THE ASSESSEE FIRM HAS NEVER PRODUCED BOOKS OF ACCOUNTS WITH SUPPORTING BILLS AND VOUCHERS AT ANY STAGE DURING T HE ASSESSMENT PROCEEDINGS. IN THESE CIRCUMSTANCES, VERACITY OF TRADING RESULTS WRITTEN BY THE ASSESSEE FIRM COULD NOT BE ESTABLISHED. FURTHER, REASONABILITY, NATURE, PURPOSE AND AUTHENTICITY OF VARIOUS EXPENSES DEBITE D TO THE PROFIT AND LOSS ACCOUNT COULD NOT BE EXAMINED. THOUGH, THE ASSESSEE FIRM HAS FILED AUDIT REPORT U/ S 44AB OF THE I.T.ACT, 1961 ALONG WITH THE RETURN OF INCOME BUT THE FINDINGS OF ANY AUDIT REPORT ON THE VARIOUS ISSUES RELATED TO THE BALANCE SHEET AND PROFIT AND LOSS AC COUNT OF THE ASSESSEE FIRM ARE NOT SUBSTITUTE TO THE EXPL ANATION AND REPLIES REQUIRED TO BE FILED BY THE ASSESSEE FI RM IN RESPONSE TO THE QUESTIONS RAISED BY THE ASSESSING O FFICER ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 4 VIDE LETTER DATED 30.09.2009 ON VARIOUS ISSUES RELE VANT TO ASSESSMENT WHICH THE ASSESSING OFFICER DEEMED FIT T O RAISE. THE FACTS OF THE CASE CLEARLY SHOW THAT THE ASSESSEE HAS FAILED IN HIS DUTY TO ADDRESS ALL SUCH RELEVANT QUESTIONS THOUGH SPECIFICALLY ASKED TO REP LY. IN THESE CIRCUMSTANCES, I AM LEFT WITH NO OTHER ALTERN ATIVE BUT TO DISALLOW EXPENSES AMOUNTING TO RS. 10 LAKHS OUT OF TOTAL EXPENSES OF RS. 5.25 CRORES. I AM SATISFIE D THAT THIS IS A FIT CASE FOR INITIATING PENALTY PROCEEDIN GS U/S 271(1)( C) OF THE I.T.ACT, 1961. 6. THE AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFOR E THE COMMISSIONER OF INCOME TAX(A), NEW DELHI WHICH WAS ALLOWED BY DE LETING DISALLOWANCE AND ADDITION AND THE RELEVANT OPERATIVE PARA OF IMP UGNED ORDER READS AS UNDER:- 6.3 THE SUBMISSIONS OF THE AR ARE CONSIDERED. IT IS SEEN FROM THE IMPUGNED ORDER THAT THE ASSESSMENT PROCEED INGS BEGAN FROM THE AO'S END ONLY FROM OCTOBER 2009 AND THE APPELLANT BEGAN TO COMPLY ONLY IN THE MONTH OF DECE MBER 2009, WHEN THE ASSESSMENT WAS GETTING BARRED BY LIMITATION. THE SUBMISSION OF THE AR THAT THERE WER E MORE THAN 200 CASES IN THE GROUP AND HENCE COMPLIANCE WA S IN PARTS - IS HARDLY AN EXPLANATION, MUCH LESS A JUSTI FIABLE ONE, FOR NOT COMPLYING WITH THE REQUIREMENTS SPECIF IED BY THE AO. AT THE SAME TIME, SOME FAULT SHOULD ALSO LI E AT THE DOOR OF THE AO, WHO STARTED THE PROCEEDINGS AFTER M ORE THAN 7 MONTHS FROM THE DATE OF FILING THE RETURN U/ S 153A. MOREOVER, THE AO WAS NOT PRECLUDED FROM TAKING STER N MEASURES PROVIDED IN THE ACT FOR NON COMPLIANCE BY THE ASSESSEE. IT IS NOTED THAT THE IMPUGNED ORDER REFER S TO THE INITIATION OF PENALTY NOTICE U/S 271(L)(C) IN RESPE CT OF THE ESTIMATED DISALLOWANCE, BUT IS SILENT ON THE INITIA TION OF PENALTY U/S 271(1)(B) THAT IS SPECIFICALLY MEANT FO R CASES OF NON COMPLIANCE WITH NOTICE. THEREFORE, WHEN THE AO HIMSELF HAS FAILED TO INVOKE THE PROVISIONS TO ENSU RE COMPLIANCE BY THE ASSESSEE, IT MAY NOT BE A STRONG BASIS TO ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 5 MAKE A RANDOM ESTIMATED DISALLOWANCE OUT OF THE EXP ENSES DEBITED TO THE P & L ACCOUNT. IT IS ALSO A MATTER O F FACT THAT NO DEFECT OR EVEN DOUBT HAS BEEN POINTED OUT BY THE AO WITH REGARD TO ANY PARTICULAR EXPENSE, TO WHICH THE DISALLOWANCE COULD HAVE BEEN PEGGED. UNDER THE CIRCUMSTANCES, THE AD-HOC DISALLOWANCE, BEING WITHO UT ANY BASIS, IS DELETED. HOWEVER, IN VIEW OF THE FACTS, T HERE IS NO VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE. AS A RESULT, GROUND 7 OF THE APPEAL IS DISMISSED, AND GROUND 8 O F THE APPEAL IS ALLOWED. 7. NOW, THE AGGRIEVED REVENUE IS BEFORE THIS TRIBUN AL IN THIS SECOND APPEAL WITH THE SOLE GROUND AS MENTIONED HEREINABOV E. 8. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PARTIE S AND CAREFULLY PERUSED THE RECORD PLACED BEFORE US, INTER ALIA ORD ERS OF THE AUTHORITIES BELOW AND LEGAL PROPOSITIONS AND CITATIONS RELIED BY BOTH THE PARTIES. LD. DR SUBMITTED THAT THE FACTS OF THE CASE CLEARLY SHOW T HAT THE ASSESSEE HAS FAILED IN HIS DUTY TO ADDRESS ALL SUCH RELEVANT QUESTIONS THOUGH SPECIFICALLY ASKED TO REPLY BY THE ASSESSING OFFICER AND THE ASSESSEE HAS NOT FILED THE REQUIRED DETAILS AND EXPLANATION WHICH WERE REQUIRED VIDE QU ESTIONNAIRE DATED 30.09.2009, THEN THE ASSESSING OFFICER WAS LEFT WIT H NO OTHER ALTERNATIVE BUT TO DISALLOW THE AMOUNT OF RS.10 LAKH OUT OF TOTAL C LAIM OF EXPENSES AMOUNTING TO RS.5.25 CRORES. THE DR FURTHER SUBMIT TED THAT THE COMMISSIONER OF INCOME TAX(A) WRONGLY HELD THAT THE AD HOC DISALLOWANCE IS NOT SUSTAINABLE. THE DR SUPPORTED THE ASSESSMEN T ORDER AND SUBMITTED ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 6 THAT THE IMPUGNED ORDER MAY BE SET ASIDE BY RESTORI NG THAT OF THE ASSESSING OFFICER. 9. THE DR PLACED RELIANCE ON THE RECENT DECISIONS O F HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF C OMMISSIONER OF INCOME TAX VS ANIL KUMAR BHATIA (2012) 24 TAXMAN 98 (DEL) AND COMMISSIONER OF INCOME TAX VS CHETAN DASS LACHMAN D ASS (2012) 25 TAXMAN.COM 227 (DELHI). 10. REPLYING TO THE ABOVE, LD. COUNSEL OF THE ASSES SEE PLACED RELIANCE ON VARIOUS DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI AND ITAT DELHI INCLUDING DECISION OF SPECIAL BENCH ITAT , MUMBAI IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS DCIT (20 12) 23 TAXMAN.COM 103(MUMBAI)(SB), DECISION OF ITAT G BENCH MUMBAI IN THE CASE OF GURINDER SINGH BAWA VS DCIT(2012) 28 TAXMANN.COM 32 8 (MUM) , DECISION OF ITAT D BENCH DELHI IN THE CASE OF KUSUM GUPTA VS DCIT IN ITA NO. 4873/DEL/2009 DATED 28.3.2013 AND DECISION OF ITAT E BENCH NEW DELHI IN THE CASE OF MGF AUTOMOBILES LTD. VS ACIT IN ITA NO. 4212 & 4213/DEL/2011 DATED 28.6.2013. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT UNDISPUTEDLY UNDER THE PROVISIONS OF SECTION 153A OF THE ACT, IN ALL CASES WHERE SEARCH IS CONDUCTED U/S 132 OF T HE ACT, THE ASSESSING ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 7 OFFICER IS EMPOWERED TO ASSESS OR REASSESS TOTAL IN COME OF SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH WAS CONDUCTED. 11. THE COUNSEL FURTHER SUBMITTED THAT AS PER DEC ISION OF SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA) , THE PROVISIONS OF SECTION 153A CAME INTO OPERATION IF SEARCH OR REQUISITION I S INITIATED AFTER 31.05.2003 AND ON SATISFACTION OF THIS CONDITION, T HE ASSESSING OFFICER IS UNDER OBLIGATION TO ISSUE NOTICE TO THE PERSON REQU IRING HIM TO FURNISH THE RETURN OF INCOME FOR SIX YEARS IMMEDIATELY PRECEDIN G THE YEAR OF SEARCH. THE COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT THE ASSESSING OFFICER RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISD ICTION U/S 153 OF THE ACT FOR WHICH ASSESSMENT SHALL BE MADE FOR EACH ASSESSMENT YEAR SEPARATELY AND IN THE CASES WHERE ASSESSMENT HAS ABATED, THE ASSESSIN G OFFICER CAN MAKE ADDITION IN THE ASSESSMENT EVEN IF NO INCRIMINATING MATERIAL HAS BEEN FOUND DURING THE SEARCH BUT IN OTHER CASES WHERE ASSESSME NT HAS BEEN FINALIZED BEFORE THE SEARCH, ASSESSMENT U/S 153A CAN BE MADE ON THE BASIS OF INCRIMINATING MATERIAL WHICH IN THE CONTEXT OF RELE VANT PROVISIONS MEANS BOOKS OF ACCOUNTS AND OTHER DOCUMENTS FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND U NDISCLOSED INCOME OR PROPERTY DISCOVERED DURING THE COURSE OF SEARCH. ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 8 12. ON CAREFUL CONSIDERATION OF ABOVE RIVAL CONTENT IONS AND SUBMISSIONS OF BOTH THE PARTIES, WE OBSERVE THAT THE ISSUE OF D ISALLOWANCE AND ADDITION DURING THE ASSESSMENT OR REASSESSMENT PROCEEDINGS U /S 153A OF THE ACT HAS BEEN DEALT WITH BY VARIOUS COURTS BUT IN THE RECENT JUDGMENT OF SPECIAL BENCH MUMBAI IN THE CASE OF ALL CARGO GLOBAL LOGIST ICS LTD. VS DCIT (SUPRA), THE INCORPORATION OF PROVISIONS HAS BEEN M ADE AS UNDER:- 51. HAVING HELD SO, AN ASSESSMENT OR REASSESSMENT U/S 153A ARISES ONLY WHEN A SEARCH HAS BEEN INITIATED AND CONDUCTED. THEREFORE, SUCH AN ASSESSMENT HAS A VITAL LINK WITH THE INITIATION AND CONDUCT OF THE SEARCH. WE HAVE MENTIONED THAT A SEARCH CAN BE AUTHORISED ON SATISFACTION OF ONE OF THE THREE COND ITIONS ENUMERATED EARLIER. THEREFORE, WHILE INTERPRETING T HE PROVISION CONTAINED IN SECTION 153A, ALL THESE COND ITIONS WILL HAVE TO BE TAKEN INTO ACCOUNT. WITH THIS, WE P ROCEED TO LITERALLY INTERPRET TO PROVISION IN 153A AS IT E XISTS AND READ IT ALONGSIDE THE PROVISION CONTAINED IN SECTIO N 132(1). 52. THE PROVISION COMES INTO OPERATION IF A SEARCH OR REQUISITION IS INITIATED AFTER 31.5.2003. ON SAT ISFACTION OF THIS CONDITION, THE AO IS UNDER OBLIGATION TO IS SUE NOTICE TO THE PERSON REQUIRING HIM TO FURNISH THE R ETURN OF INCOME OF SIX YEARS IMMEDIATELY PRECEDING THE YEAR OF SEARCH. THE WORD USED IS SHALL AND, THUS, THERE I S NO OPTION BUT TO ISSUE SUCH A NOTICE. THEREAFTER HE HA S TO ASSESS OR REASSESS TOTAL INCOME OF THESE SIX YEARS. IN THIS RESPECT ALSO, THE WORD USED IS SHALL AND, THEREFO RE, THE AO HAS NO OPTION BUT TO ASSESS OR REASSESS THE TOTA L INCOME OF THESE SIX YEARS. THE PENDING PROCEEDINGS SHALL ABATE. THIS MEANS THAT OUT OF SIX YEARS, IF ANY ASS ESSMENT OR REASSESSMENT IS PENDING ON THE DATE OF INITIATIO N OF THE SEARCH, IT SHALL ABATE. IN OTHER WORDS PENDING PROCEEDINGS WILL NOT BE PROCEEDED WITH THEREAFTER. THE ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 9 ASSESSMENT HAS NOW TO BE MADE U/S 153A (1)(B) AND T HE FIRST PROVISO. IT ALSO MEANS THAT ONLY ONE ASSESSME NT WILL BE MADE UNDER THE AFORESAID PROVISIONS AS THE TWO PROCEEDINGS I.E. ASSESSMENT OR REASSESSMENT PROCEED INGS AND PROCEEDINGS UNDER THIS PROVISION MERGE INTO ONE . IF ASSESSMENT MADE UNDER SUB-SECTION (1) IS ANNULLED I N APPEAL OR OTHER LEGAL PROCEEDINGS, THEN THE ABATED ASSESSMENT OR REASSESSMENT SHALL REVIVE. THIS MEANS THAT THE ASSESSMENT OR REASSESSMENT, WHICH HAD ABATED, S HALL BE MADE, FOR WHICH EXTENSION OF TIME HAS BEEN PROVI DED UNDER SECTION 153B. 53. THE QUESTION NOW IS WHAT IS THE SCOPE OF ASSESSM ENT OR REASSESSMENT OF TOTAL INCOME U/S 153A (1) (B) AN D THE FIRST PROVISO? WE ARE OF THE VIEW THAT FOR ANSWERIN G THIS QUESTION, GUIDANCE WILL HAVE TO BE SOUGHT FROM SECT ION 132(1). IF ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS RELEVANT TO THE ASSESSMENT HAD NOT BEEN PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND FOUND IN THE COUR SE OF SEARCH IN OUR HUMBLE OPINION SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS HAVE TO BE TAKEN INTO ACCOUNT WHILE MAKING ASSESSMENT OR REASSESSMENT OF TOTAL INCOME U NDER THE AFORESAID PROVISION. SIMILAR POSITION WILL OBTA IN IN A CASE WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPER TY HAS BEEN FOUND AS A CONSEQUENCE OF SEARCH. IN OTHER WORDS, HARMONIOUS INTERPRETATION WILL PRODUCE THE FOLLOWING RESULTS :- ( A ) INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, TH E JURISDICTION TO MAKE ORIGINAL ASSESSMENT AND ASSESS MENT U/S 153A MERGE INTO ONE AND ONLY ONE ASSESSMENT FOR EACH ASSESSMENT YEAR SHALL BE MADE SEPARATELY ON TH E BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER M ATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO, (B) IN RESPECT OF NON-ABATED ASSESSMENTS, THE ASSESSMENT W ILL BE MADE ON THE BASIS OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT BUT FOUND IN THE COURSE OF SEARCH, AND UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY DISCOVER ED IN THE COURSE OF SEARCH. ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 10 13. FURTHER, THE ABOVE VIEW OF SPECIAL BENCH HAS BE EN REITERATED AND FOLLOWED BY G BENCH OF ITAT, MUMBAI IN THE CASE O F GURINDER SINGH BAWA VS DCT(SUPRA). THE RELEVANT OPERATIVE PORTION OF THIS ORDER READS AS UNDER:- 6. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE RAISED IS REGARD ING LEGAL VALIDITY OF ADDITION MADE BY AO UNDER SECTION 153A OF THE ACT. UNDER THE PROVISIONS OF SECTION 153A, I N ALL CASES, WHERE SEARCH IS CONDUCTED UNDER SECTION 132 OF THE ACT, AO IS EMPOWERED TO ASSESS OR REASSESS TOTA L INCOME OF SIX ASSESSMENT YEARS PRECEDING THE ASSESS MENT YEAR IN WHICH SEARCH WAS CONDUCTED. THE SECTION ALS O PROVIDES THAT ASSESSMENT OR REASSESSMENT RELATING T O ANY ASSESSMENT YEAR FALLING WITHIN PERIOD OF SIX ASSESS MENT YEAR IF PENDING ON THE DATE OF INITIATION OF SEARCH SHALL ABATE. THERE HAVE BEEN DIVERGENT VIEWS REGARDING SC OPE OF APPLICATION OF SECTION 153A IN CASES WHERE NO INCRIMINATING MATERIAL WAS FOUND INDICATING ANY UNDISCLOSED INCOME. SOME OF THE TRIBUNAL BENCHES HA D TAKEN THE VIEW THAT IN CASE NO INCRIMINATING MATERI AL WAS FOUND AO HAD NO JURISDICTION TO MAKE ASSESSMENT OR REASSESSMENT UNDER SECTION 153A WHILE SOME OTHER BENCHES HELD THAT JURISDICTION UNDER SECTION 153A W AS AUTOMATIC TO REASSESS SIX IMMEDIATE PRECEDING ASSESSMENT YEARS IRRESPECTIVE OF THE FACT WHETHER A NY INCRIMINATING MATERIAL WAS FOUND OR NOT. ANOTHER AS PECT ON WHICH THERE HAD BEEN DIVERGENT VIEWS WAS WHETHER EVEN IF AO HAD JURISDICTION UNDER SECTION 153A, ADD ITION CAN BE MADE IN ASSESSMENT /REASSESSMENT ONLY WHEN SOME INCRIMINATING MATERIAL HAS BEEN FOUND. ALL THE SE ASPECTS HAD BEEN REFERRED TO THE SPECIAL BENCH OF T HE TRIBUNAL IN CASE OF ALCARGO GLOBAL LOGISTICS LTD. A ND ORDER OF SPECIAL BENCH DATED 6.7.2012 HAS BEEN REFE RRED. 6.1 THE SPECIAL BENCH IN THE CASE OF ALCARGO GLOBAL LOGISTICS LTD.(SUPRA), HAS HELD THAT PROVISIONS OF SECTION ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 11 153A COME INTO OPERATION IF A SEARCH OR REQUISITION IS INITIATED AFTER 31.5.2003 AND ON SATISFACTION OF TH IS CONDITION, THE AO IS UNDER OBLIGATION TO ISSUE NOTI CE TO THE PERSON REQUIRING HIM TO FURNISH THE RETURN OF I NCOME FOR SIX YEARS IMMEDIATELY PRECEDING THE YEAR OF SEA RCH. THE SPECIAL BENCH FURTHER HELD THAT IN CASE ASSESSM ENT HAS ABATED, THE AO RETAINS THE ORIGINAL JURISDICTIO N AS WELL AS JURISDICTION UNDER SECTION 153A FOR WHICH ASSESSMENT SHALL BE MADE FOR EACH ASSESSMENT YEAR SEPARATELY. THUS IN CASE WHERE ASSESSMENT HAS ABATE D THE AO CAN MAKE ADDITIONS IN THE ASSESSMENT, EVEN IF NO INCRIMINATING MATERIAL HAS BEEN FOUND. BUT IN OTHER CASES THE SPECIAL BENCH HELD THAT THE ASSESSMENT UNDER SE CTION 153A CAN BE MADE ON THE BASIS OF INCRIMINATING MATE RIAL WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS B OOKS OF ACCOUNT AND OTHER DOCUMENTS FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED INCOME OR PROPERTY DISCL OSED DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, T HE ASSESSMENT HAD BEEN COMPLETED UNDER SUMMARY SCHEME UNDER SECTION 143(1) AND TIME LIMIT FOR ISSUE OF NO TICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF SEA RCH. THEREFORE, THERE WAS NO ASSESSMENT PENDING IN THIS CASE AND IN SUCH A CASE THERE WAS NO QUESTION OF ABATEME NT. THEREFORE, ADDITION COULD BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING SEARCH. 6.2 IN THIS CASE, THE AO HAD MADE ASSESSMENT ON THE INFORMATION/MATERIAL AVAILABLE IN THE RETURN OF INC OME. THE INFORMATION REGARDING THE GIFT WAS AVAILABLE IN THE RETURN OF INCOME AS CAPITAL ACCOUNT HAD BEEN CREDIT ED BY THE ASSESSEE BY THE AMOUNT OF GIFT. SIMILAR WAS TH E POSITION IN RELATION TO ADDITION UNDER SECTION 2(22 )(E). THE AO HAD NOT REFERRED TO ANY INCRIMINATING MATERI AL FOUND DURING THE SEARCH BASED ON WHICH ADDITION HAD BEEN MADE. THEREFORE FOLLOWING THE DECISION OF THE SPECIAL BENCH (SUPRA), WE HOLD THAT THE AO HAD NO JURISDICTION TO MAKE ADDITION UNDER SECTION 153A. T HE ADDITION MADE IS THEREFORE DELETED ON THIS LEGAL GR OUND. ON MERIT ALSO WE DO NOT FIND ANY CASE TO SUSTAIN TH E ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 12 ADDITION. THE ADDITION MADE IS ON ACCOUNT OF GIFT WHICH IS NOTHING BUT LOAN TAKEN BY THE ASSESSEE WHICH WAS CONVERTED INTO GIFT DURING THE YEAR. THUS SOURCE OF GIFT WAS LOAN WHICH THE AO HIMSELF HAS ADMITTED HAD BEEN TAKEN BY THE ASSESSEE IN THE YEAR PRIOR TO 2000. THEREFORE, ADDITION IF ANY COULD HAVE BEEN MADE IN THE YEAR OF LOAN. SIMILARLY, CLAIM OF THE ASSESSEE AND FINDING OF CIT(A) THAT THERE WAS NO ACCUMULATED PROFIT HAS NOT BEEN CONTROVERTED BEFORE US. WE AGREE WITH CIT(A) T HAT CURRENT YEAR PROFIT HAS TO BE EXCLUDED. THEREFORE, THERE IS NO CASE FOR ANY ADDITION UNDER SECTION 2(22)(E). WE , THEREFORE, DISMISS THE APPEAL OF THE REVENUE AND AL LOW THE APPEAL FILED BY THE ASSESSEE. 14. LD. COUNSEL OF THE ASSESSEE HAS DRAWN OUR ATTEN TION TOWARDS PARA NO. 5.1 OF THE IMPUGNED ORDER AND REITERATED THE SUBMIS SIONS AND CONTENTIONS OF THE ASSESSEE WHICH WERE ALSO PLACED BEFORE COMMISSI ONER OF INCOME TAX(A) AND SUBMITTED THAT THE ASSESSMENT PROCEEDING FOR TH E YEAR UNDER APPEAL WAS NOT PENDING ON THE DATE OF SEARCH. HENCE, THE PROC EEDINGS DID NOT ABATE AND THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING A DDITIONS NOT BASED ON ANY INCRIMINATING SEIZED DOCUMENT OR EVIDENCE OR ANY OT HER MATERIAL WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS BOOKS OF A CCOUNTS AND OTHER DOCUMENTS OR EVIDENCE OR MATERIAL FOUND IN THE COUR SE OF SEARCH BUT NOT PRODUCED BY THE ASSESSEE IN THE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED INCOME OR PROPERTY DISCOVERED DURING TH E COURSE OF SEARCH. THE COUNSEL POINTED OUT THAT WHEN ASSESSMENT PROCEEDING S FOR THE YEAR UNDER CONSIDERATION HAVE BEEN COMPLETED PRIOR TO CONDUCT OF SEARCH, THEN DURING ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 13 THE REASSESSMENT PROCEEDINGS U/S 153A OF THE ACT, N O DISALLOWANCE OR ADDITION CAN BE MADE ON THE SAME MATERIAL WITHOUT A NY INCRIMINATING MATERIAL OR DOCUMENT OR EVIDENCE FOUND IN THE COURS E OF SEARCH BUT NOT PRODUCED DURING THE ORIGINAL ASSESSMENT PROCEEDINGS AND ANY OTHER UNDISCLOSED INCOME OR PROPERTY IS DISCOVERED DURING THE COURSE OF SEARCH. 15. REPLYING TO THE ABOVE, LD. DR SUBMITTED THAT WH EN THE ASSESSEE IS NOT REPLYING TO THE QUESTIONNAIRE ISSUED BY THE ASSESSI NG OFFICER AND ASSESSEE HAS NOT FILED REQUIRED DOCUMENTS, DETAILS AND EVIDE NCE DURING THE REASSESSMENT PROCEEDINGS, THEN THE ASSESSING OFFICE R IS OBVIOUSLY LEFT WITH NO OTHER ALTERNATIVE BUT TO COMPLETE REASSESSMENT O R ASSESSMENT PROCEEDINGS ON MERITS ON THE BASIS OF MATERIAL AVAILABLE ON REC ORD. 16. IN THE LIGHT OF ABOVE CONTENTIONS AND SUBMISSIO NS, AT THE OUTSET, WE OBSERVE THAT THE AUTHORITIES BELOW AND LD. DR APPEA RING BEFORE US HAVE NOT DISPUTED THE FACT THAT ASSESSMENT PROCEEDING FOR TH E YEAR UNDER CONSIDERATION IN THIS APPEAL WAS NOT PENDING ON THE DATE OF SEARC H. HENCE, WHEN THE ASSESSMENT PROCEEDINGS WERE COMPLETED PRIOR TO THE DATE OF SEARCH, THEN THE SAME DID NOT ABATE. NOW, IN THIS SITUATION, ASSESS ING OFFICER IS EMPOWERED TO DO REASSESSMENT U/S 153A OF THE ACT FOR THE YEAR UNDER CONSIDERATION AND DURING REASSESSMENT PROCEEDINGS. IN RESPECT OF NON -ABATED ASSESSMENT, THE ASSESSMENT WILL BE MADE ON THE BASIS OF BOOKS OF AC COUNT OR OTHER ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 14 DOCUMENTS NOT PRODUCED IN THE COURSE OF ORIGINAL AS SESSMENT BUT FOUND IN THE COURSE OF SEARCH AND UNDISCLOSED INCOME OR UNDI SCLOSED PROPERTY DISCOVERED IN THE COURSE OF SEARCH. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSING OFFICER ASKED TO SUBMIT ANY DOCUMENT, DET AIL OR MATERIAL WHICH WAS NOT BEFORE HIM DURING THE ORIGINAL ASSESSMENT P ROCEEDINGS AND ALSO THERE WAS INCRIMINATING MATERIAL, EVIDENCE OR DOCUM ENT BEFORE THE ASSESSING OFFICER WHICH WERE FOUND DURING THE COURSE OF SEARC H OR ANY UNDISCLOSED PROPERTY WAS DISCOVERED DURING THE COURSE OF SEARCH . ALTHOUGH IT IS A WELL- ACCEPTED PROPOSITION THAT WHEN THE ASSESSEE IS NOT SUBMITTING REQUIRED DOCUMENTS, DETAILS DURING THE ASSESSMENT OR REASSES SMENT PROCEEDINGS AND THE ASSESSEE IS NOT COOPERATING WITH THE ASSESSING OFFICER DURING THESE PROCEEDINGS, THEN THE ASSESSING OFFICER IS LEFT WIT H NO ALTERNATIVE BUT TO COMPLETE ASSESSMENT PROCEEDINGS ON MERITS AND ON TH E BASIS OF MATERIAL AVAILABLE ON RECORD. IN THIS SITUATION, THE ASSESS ING OFFICER IS EMPOWERED TO MAKE ESTIMATED OR AD HOC ADDITIONS PERTAINING TO DO UBTFUL CLAIM OF THE ASSESSEE. BUT AT THE SAME TIME, WE ALSO OBSERVE TH AT DURING THE REASSESSMENT PROCEEDINGS U/S 153A OF THE ACT IN RESPECT OF NON-A BATED ASSESSMENT, THE ASSESSMENT/REASSESSMENT WILL BE MADE ON THE BASIS O F BOOKS OF ACCOUNTS OR OTHER DOCUMENTS NOT PRODUCED DURING THE COURSE OF O RIGINAL ASSESSMENTS BUT ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 15 FOUND IN THE COURSE OF SEARCH AND ALSO ON THE BASIS OF UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY DISCOVERED IN THE COURSE OF SE ARCH. 17. ON COMBINED READING OF PARA 6 OF ASSESSMENT ORD ER AND PARA 6.3 OF THE IMPUGNED ORDER OF THE COMMISSIONER OF INCOME TA X(A), WE CLEARLY OBSERVE THAT THE ASSESSING OFFICER MADE IMPUGNED DI SALLOWANCE AND ADDITION OUT OF TOTAL EXPENSES CLAIMED BY THE ASSES SEE WITHOUT ANY INCRIMINATING MATERIAL SAID TO BE FOUND DURING THE COURSE OF SEARCH AND ON THE ESTIMATE AND AD HOC BASIS. ON THE OTHER HAND, THE COMMISSIONER OF INCOME TAX(A) DELETED THE ADDITION WITH AN OBSERVAT ION THAT WHEN THE ASSESSING OFFICER HIMSELF HAS FAILED TO INVOKE THE RELEVANT PROVISIONS OF THE ACT TO ENSURE COMPLIANCE OF THE DIRECTIONS BY THE A SSESSEE, IT MAY NOT BE A STRONG BASIS TO MAKE A RANDOM ESTIMATED DISALLOWANC E OUT OF EXPENSES DEBITED TO THE P&L ACCOUNT. THE COMMISSIONER OF IN COME TAX(A) WAS ALSO JUSTIFIED IN HOLDING THAT NO DEFECT OR EVEN DOUBT H AS BEEN POINTED OUT BY THE ASSESSING OFFICER WITH REGARD TO ANY PARTICULAR EXP ENSE TO WHICH DISALLOWANCE COULD HAVE BEEN PEGGED AND UNDER THESE CIRCUMSTANCES, AD HOC DISALLOWANCE BEING WITHOUT ANY BASIS IS NOT SUSTAIN ABLE. FROM THE ORDERS OF THE AUTHORITIES BELOW, WE CLEARLY OBSERVE THAT THER E WAS NO INCRIMINATING MATERIAL BEFORE THE ASSESSING OFFICER WHICH WAS FOU ND DURING THE COURSE OF SEARCH TO SUPPORT THE IMPUGNED AD HOC DISALLOWANCE AND ADDITION. UNDER ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 16 THESE FACTS AND CIRCUMSTANCES AND ON THE BASIS OF F OREGOING DISCUSSION, WE ARE OF THE FIRM OPINION THAT THE ASSESSING OFFICER MADE DISALLOWANCE AND ADDITION DURING THE REASSESSMENT PROCEEDINGS U/S 15 3A OF THE ACT WITHOUT ANY BASIS AND JUSTIFIED COGENT REASON. ON THE OTHE R HAND, THE COMMISSIONER OF INCOME TAX(A) RIGHTLY DELETED THE DISALLOWANCE A ND ADDITION AS PER LETTER AND SPIRIT OF THE RELEVANT PROVISIONS OF THE ACT. THE OBSERVATIONS AND FINDINGS OF THE COMMISSIONER OF INCOME TAX(A) ARE A S PER STATUTORY PROVISIONS OF THE ACT AS WELL AS PER RATIO OF RELE VANT CITATIONS AND LEGAL PROPOSITIONS. RESPECTFULLY FOLLOWING THE DECISIONS OF SPECIAL BENCH MUMBAI IN THE CASE OF ALL CARGO (SUPRA), WE HOLD TH AT IMPUGNED ORDER OF COMMISSIONER OF INCOME TAX(A) IS BASED ON JUSTIFIED AND COGENT REASONS WHEREIN WE ARE UNABLE TO SEE ANY AMBIGUITY OR PERVE RSITY AND WE DECLINE TO INTERFERE WITH THE SAME. ACCORDINGLY, SOLE GROUND OF THE REVENUE IS DISMISSED. C.O. NO.100/DEL/2013 18. AGAINST THE IMPUGNED ORDER OF THE COMMISSIONER OF INCOME TAX(A), THE ASSESSEE HAS ALSO FILED FOLLOWING CROSS OBJECTI ONS:- 1. THAT THE NOTICE ISSUED U/S 153A AND THE ASSESSMENT ORDER MADE UNDER SECTION 153A R.W.S. 143(3) IS ILLEGAL, BAD IN LAW, BARRED BY LIMITATION AND WITHOUT JURISDICTION. ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 17 2. THAT THE ADDITIONS/DISALLOWANCE MADE BY THE ASSESSING OFFICER BY PASSING THE ASSESSMENT ORDER U/S 153A R.W.S. 143(3) ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. 3. THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER ARE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. HENCE ASSESSMENT ORDER PASSED U/S 153A/143(3) AND THE ADDITIONS/DISALLOWANCES ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION. 4. THAT THE ASSESSING OFFICER HAS ERRED IN FRAMIN G THE ASSESSMENT U/S 153A R.W.S. 143(3) WHEN THE ASSESSMENT ALREADY COMPLETED U/S 143(1) BEFORE COMMENCEMENT OF THE SEARCH, WHICH DOES NOT STAND ABATED AS PER PROVISO TO SECTION 153A(1) OF THE INCOME TAX ACT, 1961. C.O. 1 & 2 19. APROPOS THESE C.O.S, THE LD. COUNSEL OF THE ASS ESSEE SUBMITTED THAT SINCE THE ORDER DATED 29.12.2009 WAS SERVED ON THE ASSESSEE ON 2.1.2010 WHEREAS THE ASSESSMENT WAS GETTING BARRED BY LIMITA TION ON 31.12.2009, THEREFORE, SERVICE OF THE ASSESSMENT ORDER AND THE DEMAND NOTICE WAS ILLEGAL, BAD IN LAW, BARRED BY TIME LIMITATION AND WITHOUT J URISDICTION. THE COUNSEL FURTHER CONTENDED THAT THE ADDITIONS/DISALLOWANCE M ADE BY THE ASSESSING OFFICER BY PASSING SUCH ASSESSMENT ORDER U/S 153A R /W SECTION 143(3) OF THE ACT ARE ALSO ILLEGAL, BAD IN LAW AND WITHOUT JURISD ICTION. ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 18 20. REPLYING TO THE ABOVE, LD. DR POINTED OUT PARA NO. 4 TO 4.2 OF THE IMPUGNED ORDER AND SUBMITTED THAT THE COMMISSIONER OF INCOME TAX(A) HAS DEALT THE ISSUE IN DETAIL BEFORE DISMISSING THE REL EVANT GROUND OF APPEAL OF THE ASSESSEE. THE DR SUBMITTED THAT ADMITTEDLY, TH E ASSESSMENT ORDER WAS PASSED ON 29.12.2009 AND THE APPELLANT RECEIVED THE SAME ON 2.1.2010, THEN IT IS OBVIOUS THAT THE TIME GAP WAS ACTUALLY TAKEN FOR POSTAL DELIVERY AND UNDER THESE CIRCUMSTANCES, THE SERVICE OF THE ORDER AND DEMAND NOTICE CANNOT BE PRESUMED AS ILLEGAL, BAD IN LAW, BARRED B Y LIMITATION AND WITHOUT JURISDICTION. THE DR SUPPORTED THE ACTION OF THE A UTHORITIES BELOW. 21. FIRST OF ALL, WE OBSERVE THAT THE COMMISSIONER OF INCOME TAX(A) HAS DECIDED AND DISMISSED THIS ISSUE AGAINST THE ASSESS EE WITH FOLLOWING OBSERVATIONS AND FINDINGS:- 4. IN GROUND 3 OF THE APPEAL, THE APPELLANT HAS CHALLENGED THE IMPUGNED ORDER ON THE GROUND THAT IT WAS TIME BARRED SINCE THE ORDER DATED 29-12-2009 WAS SE RVED ON 2-1-2010 WHEREAS THE ASSESSMENT WAS GETTING BARR ED BY LIMITATION ON 31-12-2009. 4.1 THE AUTHORISED REPRESENTATIVE (AR) ARGUED THAT THE COMPLETION OF ASSESSMENT INCLUDED THE SERV ICE OF THE ASSESSMENT ORDER AND THE DEMAND NOTICE. THE CAS E OF SHANTILAL GODAWAT & OTHERS V ACIT 126 ITJ 135 (JODHPUR) WAS CITED IN SUPPORT OF THIS CONTENTION. 4.2 THE SUBMISSIONS OF THE AR ARE CONSIDERED AND REJECTED. IT IS AN ADMITTED FACT THAT THE IMPUGNED ORDER WAS PASSED ON 29-12-2009, TWO DAYS BEFORE THE ASSESSMENT WAS GETTING BARRED BY LIMITATION. THE DE MAND ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 19 NOTICE U/S 156 WAS ALSO SIGNED BY THE ASSESSING OFF ICER (AO) ON 29-12-2009. AS PER THE APPELLANT, THE ASSESSMENT ORDER AND THE NOTICE OF DEMAND U/S 156 W ERE RECEIVED BY IT ON 2-1-2010. IT IS EVIDENT THAT THE IMPUGNED ORDER WAS PASSED WITHIN THE PERIOD PRESCRI BED IN SECTION 153B(L) AND HENCE THERE IS NO ILLEGALITY ON THIS ACCOUNT. IT IS ALSO A SETTLED LAW THAT THE SERVICE OF THE DEMAND NOTICE IS DEEMED TO HAVE BEEN DONE ONCE THE ASSESSMENT ORDER IS SIGNED AND THE REQUISITE ENTRY IS MADE IN THE DEMAND AND COLLECTION REGISTER. REFEREN CE IS ALSO MADE TO SECTION 282 OF THE ACT THAT PROVIDES F OR THE SERVICE OF NOTICE / ORDER BY DELIVERY OR TRANSMISSI ON BY POST ETC. AS PER SECTION 27 OF THE GENERAL CLAUSES ACT, SERVICE IS DEEMED TO BE EFFECTED WHEN THE ORDER/NOT ICE IS SENT TO THE CORRECT ADDRESS BY POST. THIS MATTER HA S BEEN RECENTLY DEALT IN THE CASE OF MILAN PODDAR V CIT [2 012] 24 TAXMAN.COM 27 (JHARKHAND) WHICH RELIES ON THE DECISIONS OF THE SUPREME COURT IN THE CASES OF D VI NOD SHIVAPPA V NANDA BELIAPPA AIR 2006 SC 2179; HARCHARAN SINGH V SHIVRANI AIR 1981 SC 1284; AND C C ALAVI HAJI V PALAPETTI MUHAMMAD 2007 6SCC555. THE CASE LAW RELIED UPON BY THE AR IS DIFFERENTIATED ON FACTS SINCE IN THAT CASE THE ENVELOPE CONTAINING THE ORDE R WAS HANDED OVER TO THE POSTAL AUTHORITIES ON 2.1.2008 WHEREAS THE TIME BARRING DATE WAS 31.12.2007. IN T HE CASE AT HAND, WHEN THE APPELLANT RECEIVED THE ORDER DATED 29.12.2009 ON 2.1.2010, IT IS OBVIOUS THAT TH E TIME GAP WAS ACTUALLY THE TIME TAKEN FOR POSTAL DELIVERY . UNDER THE CIRCUMSTANCES THERE BEING NO MERIT IN THE ARGUMENT, GROUND 3 OF THE APPEAL IS DISMISSED. 22. SINCE, BY THE FIRST PART OF THIS ORDER, WE HAVE DISMISSED THE APPEAL OF THE REVENUE UPHOLDING THE FINDINGS OF THE COMMISSIO NER OF INCOME TAX(A) WHICH DELETED THE ONLY ADDITION MADE BY THE ASSESSI NG OFFICER, THEREFORE, THERE IS NO DISALLOWANCE AND ADDITION AGAINST THE A SSESSEE FOR THE YEAR UNDER ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 20 CONSIDERATION. UNDER THESE CIRCUMSTANCES, LEGAL CO NTENTION AND C.O. OF THE ASSESSEE BECOME ACADEMIC IN NATURE. 23. DURING THE ARGUMENTS, THE COUNSEL OF THE ASSESS EE SUBMITTED THAT IF APPEAL OF THE REVENUE IS DISALLOWED, THEN THE ASSES SEE DOES NOT WANT TO PRESS LEGAL CROSS OBJECTIONS. THE COUNSEL FAIRLY ACCEPTE D THAT IF APPEAL OF THE REVENUE IS DISALLOWED, THEN THE CROSS OBJECTIONS BE COME ACADEMIC WHICH THE ASSESSEE DOES NOT WANT TO PRESS. IN VIEW OF AB OVE SUBMISSIONS, SINCE WE HAVE DISALLOWED THE APPEAL OF THE REVENUE, THEN LEG AL CROSS OBJECTIONS NO. 1 AND 2 ARE DEEMED TO BE NOT PRESSED AND WE DISMISS T HE SAME AS NOT PRESSED. C.O. 3 & 4 OF THE ASSESSEE 24. SINCE WE HAVE UPHELD THE IMPUGNED ORDER OF THE COMMISSIONER OF INCOME TAX(A) WHICH DELETED THE ONLY DISALLOWANCE A ND ADDITION MADE BY THE ASSESSING OFFICER AND NO DISALLOWANCE AND ADDIT ION EXISTS AGAINST THE ASSESSEE FOR ASSESSMENT YEAR UNDER CONSIDERATION, T HEREFORE, C.O. 3 AND 4 OF THE ASSESSEE DO NOT SURVIVE FOR ADJUDICATION AND WE DISMISS THE SAME WITHOUT GOING ON MERITS. 25. IN THE RESULT, THE APPEAL OF THE REVENUE AS WEL L AS CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ITA NO.1294/DEL/2013 ASSTT.YEAR: 2002-03 21 ORDER PRONOUNCED IN THE OPEN COURT ON 31.01.2014. SD/- SD/- (G.D. AGRAWAL) (CHANDRAMOHAN GARG) VICE PRESIDENT JUDICIAL MEMBER DT. 31ST JANUARY 2014 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. C.I.T.(A) 4. C.I.T. 5. DR BY ORDER ASSTT.REGISTRAR