Shri Sachdeo N. Giridhar, Kolhapur V. ACITCent. Cir., Kolhapur

ITA 1358/PUN/2007

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56425 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 26-04-2011
• Assessment Year: 1999-2000
• Appeal Filed On: 22-10-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V ANAND REJAN
• Keywords: Search and seizure
• Section: 143(3); 153A; 132

Judgement Text

1 ITA NO.1358/PN/2007 M/S GIRIDHAR & SONS . IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I.C.SUDHIR, JM AND SHRI D. KARUNAKARA RAO, AM ITA NO.1358/PN/2007 ASST. YEAR: 2004-05 M/S GIRIDHAR & SONS SHOP NO.1-2, CHH.SHAHU MARKET YARD KANDA BATATA MARKET KOLHAPUR PAN AACFJ1295Q APPELLANT VS. JT.COMMISSIONER OF INCOME TAX, (OSD) CENTRAL CIRCLE, KOLHAPUR RESPONDENT APPELLANT BY : SHRI M.K.KULKARNI, SR.ADVOCATE RESPONDENT BY : SHRI V.ANAND REJAN, CIT DR ORDER PER D. KARUNAKARA RAO, AM THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DT. 17-7-2007 FOR TH E ASSESSMENT YEAR 2004-05. AT THE VERY OUT SET, LD COUNSEL FOR THE ASSESSEE BROUG HT TO ATTENTION THE LETTER DATED 7.6.2011 AND THE ADDITIONAL GROUND MENTIONED THEREI N. THE SAID ADDITIONAL GROUND READ AS FOLLOWS. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE ASSESSMENT COMPLETED U/S 143(3) IS BAD IN LW AND WITHOUT JURIS DICTION SINCE ASSESSMENT YEAR BEING THE YEAR OF SEARCH U/S 132 OF THE ACT TH E ASSESSMENT OUGHT TO HAVE BEEN COMPLETED U/S 153A R W S 153B OF THE ACT. IT IS HELD ACCORDINGLY. 2 ITA NO.1358/PN/2007 M/S GIRIDHAR & SONS . 2. IN THIS REGARD, LD COUNSEL FILED A WRITTEN NOTE BRING OUT ATTENTION TO THE RATIO OF THE JUDGMENT OF THE ALLAHABAD HIGH COURT IN THE CASE OF SMT VANDANA VERMA 31(1) ITCL 434 (2010) FOR THE PROPOSITION THAT THE YEAR IN WHICH THE SEARCH TOOK PLACE HAS TO BE THE CASE OF THE SEARCH ASSESSMENT A ND NOT THE REGULAR ASSESSMENT. THE ASSESSMENTS FOR ALL THE SEVEN YEARS INCLUDING T HE CURRENT YEAR HAVE TO BE COMPLETD U/S 153A OR 153B OR 153C AS THE CASE MAY BE. FURTHER, THE COUNSEL MENTIONED THAT THE ABOVE RATIO WAS FOLLOWED IN THE CASE OF SUSHIL KUMAR JAIN REPORTED IN 7 TAXMANN 111 (INDORE) (2010). THE FOLL OWING IS THE WRITTEN TEXT OF THE COUNSEL FOR THE ASSESSEE. 3. IN THIS REGARD, THE LEARNED COUNSEL FOR THE ASSE SSEE MENTIONED THAT THE ASSESSEE IS AN ONION MERCHANT AND COMMISSION AGENT. HE WAS SEARCHED BY THE DEPARTMENT ON 19-11-2003 RELEVANT TO THE ASSESSMENT YEAR 2004-05. REFERRING TO THE ASSESSMENT ORDER, THE LEARNED COUNSEL DEMONSTRA TED THAT ASSESSMENT WAS COMPLETED IN A REGULAR ASSESSMENT U/S 143 OF THE AC T. SUCH ASSESSMENT SHOULD BE QUASHED AS THE SAME SHOULD HAVE BEEN COMPLETED AS P ER THE PROVISIONS OF SEC. 153A R.W.S.153B OF THE ACT. IN THIS REGARD, THE LE ARNED COUNSEL FOR THE ASSESSEE FILED A COPY OF THE DECISION OF THE INDORE BENCH OF THE TRIBUNAL IN THE CASE OF SUSHIL KUMAR JAIN 7 TAXMAN 111. FURTHER, THE LEARNED COUN SEL FOR THE ASSESSEE RELIED ON THE JUDGMENT OF THE HONOURABLE HIGH COURT IN THE CA SE OF CIT V. SMT.VANDANA VERMA 920100 31 (1) ITCL 434 (ALL HC). HE READ OUT RELEVANT PARAGRAPH OF THE SAID JUDGMENT, WHICH IS REPRODUCED HEREUNDER. (A) IN PARA 9.1 THE TRIBUNAL OBSERVED: S.153A I S A NON OBSTENTI CLAUSE. FOR APPLICABILITY OF ABOVE PROVISION THE I NITIATION OF SEARCH IS NECESSARY. ONCE A WARRANT OF AUTHORIZATION AND REQ UISITION IS ISSUED AND SEARCH IS CONDUCTED AND PANCHANAMA IS DR AWN, THE COMPLETED ASSESSMENT FOR ALL THE RELEVANT ASSESSMEN T YEARS WOULD GET REOPENED IRRESPECTIVE OF WHETHER ANY INCRIMINAT ING MATERIAL IS FOUND OR NOT IN RELATION TO A PARTICULAR ASSESSMENT YEAR. IN OTHER WORDS, EVEN IF THE MATERIAL FOUND SHOWS THE CONCEAL MENT IN ONLY ONE YEAR, ALL THE COMPLETED ASSESSMENT FALLING IN T HE PERIOD OF SIX ASSESSMENT YEARS PRECEDING THE YEAR OF SEARCH WILL GET REOPENED. ONCE THE WARRANT OF AUTHORIZATION IS ISSUED AND THE SEARCH IS CONDUCTED AND PANCHANAMA IS DRAWN, THE ASSESSMENTS FOR ALL 3 ITA NO.1358/PN/2007 M/S GIRIDHAR & SONS . THE SEVEN YEARS INCLUDING THE CURRENT YEAR HAVE TO BE COMPLETED UNDER SECTION 153A, 153B AND 153C. EVEN THE ASSESSMENTS WHICH AREA COMPLETED BEFORE THE DATE OF SEARCH SHALL GET REOPENED AND THOSE ASSESSMENTS WHERE THE PROCEE DINGS ARE PENDING AT THE TIME OF SEARCH SHALL ABATE. THE ASS ESSING OFFICER, THEREFORE, SHALL ASSESS OR REASSESS SUCH INCOME FOR ALL THESE YEARS. (B) IN PARAGRAPH 9.3 THE TRIBUNAL IN THE CASE FO SUSHIL KUMAR JAIN (SUPRA) OBSERVES: IT CAN BE ILLUSTRATED BY TAKING AN EXAMPLE THAT I F DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS, CERTAIN UNACCOUN TED VALUABLES OR MONEY IS FOUND AT THE TIME OF SEARCH WITHOUT THERE BEING INCRIMINATING MATERIAL OR DOCUMENT FOR ANY OTHER YE AR OR YEARS, EVEN THEN ALL THE SIX ASSESSMENTS PRECEDING THE ASS ESSMENT YEAR IN WHICH SEARCH TOOK PLACE SHALL GET REOPENED. SIMILA RLY, IF REQUISITION IS MADE THEN IRRESPECTIVE OF WHETHER THERE IS ANYTH ING INCRIMINATING FOUND AGAINST HIM IN RELATION TO OTHER YEAR OR YEAR S OR NOT, THE ASSESSEE HAS TO UNDERGO THE RIGOR OF THE ASSESSMENT PROCEEDINGS FOR ALL THE SIX YEARS AS WELL AS THE YE AR UNDER SEARCH. 4. WE HAVE TAKEN UP THIS PRELIMINARY GROUND WHICH I S LEGAL IN NATURE AND PERUSED THE REPORTED DECISION IN THE CASE OF SUSHIL KUMAR JAIN SUPRA AND FIND THE QUESTION ANSWERED IN 19 READ AS FOLLOWS. 19. IN VIEW OF THE ABOVE DISCUSSION, WE HOLD THAT T HE LD. CIT(A) WAS NOT CORRECT IN LAW IN HOLDING THAT ASSESSMENT FOR THE PREVIOUS YEAR IN WHICH SEARCH TOOK PLACE OR REQUISITION WAS MADE HAD TO BE COMPLETED UNDER THE NORMAL PROVISIONS OF THE ACT. 5. CONSIDERING THE ABOVE REPORTED DECISION OF THE TRI BUNAL, WE ARE OF THE OPINION, THE ADDITIONAL GROUND , WHICH IS LEGAL IN NATURE AND RAISED BY THE ASSESSEES COUNSEL FOR THE FIRST TIME BEFORE US IS ADMITTED AND ADJUDICATED IN FAVOUR OF THE ASSESSEE MAKING THE ASSESSMENT ORDER INVALID . ACCORDINGLY, THE ADDITIONAL GROUND IS ALLOWED . 4 ITA NO.1358/PN/2007 M/S GIRIDHAR & SONS . 6. REGARDING ORIGINAL GROUNDS RAISED IN THE APPEAL, WE FIND THE ADJUDICATION OF THE SAME IS MERELY AN ACADEMIC EXERCISE IN VIEW OF THE FINDING ON THE ADDITIONAL GROUND. THEREFORE, THESE GROUNDS ARE DISMISSED AS ACADEMIC. 7. IN THE RESULT, THE APPE AL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 30 TH DAY OF AUGUST, 2011 SD/- SD/- (IC SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE, DATED THE 30 TH AUGUST, 2011 *VNR COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEES AS MENTIONED IN THE CAUSE TITLE 2. JT.CIT, RANGE 2, SANGLI 3. CIT (A), KOLHAPUR 4. CIT CONCERNED, 5. D.R. ITAT B BENCH, PUNE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE