M/s. Vivek Builders, Nadiad V. The ACIT.,Cent.Circle-2, Baroda

ITA 1385/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89268 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 06-04-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 13-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Unexplained expenditure; Tangible material; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD 00 , ! ' #$, % & BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ ITA NO.1385/AHD/2011 % ) *)/ ASSESSMENT YEAR: 2002-03 M/S VIVEK BUILDERS , SHIVASHERAY COMPLEX, PIJ BHAGOL, PAN : AACFV 6600 R VS ACIT, CENTRAL CIRCLE-2, BARODA +, / (APPELLANT) -. +, / (RESPONDENT) ASSESSEE(S) BY : SHRI S.N. SOPARKAR, AR REVENUE BY : SHRI NIMESH YADAV, SR. DR. / DATE OF HEARING : 06/04/2015 / DATE OF PRONOUNCEMENT: 10/04/2015 // O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV, AHMEDABAD DATED 08.03.2011. 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL:- 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ERRED IN DISMI SSING GROUND OF APPEAL CHALLENGING THE INITIATION OF REAS SESSMENT PROCEEDINGS AND FRAMING REASSESSMENT ORDER U/S 147 OF THE ACT. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED T HAT REASSESSMENT PROCEEDINGS IN APPELLANTS CASE ITSELF IS BAD IN LAW AND CONSEQUENTIAL REASSESSMENT ORDER PASSED BY AO REQUIRES TO BE QUASHED. ITA NO.1385/AHD/2011 VIVEK BUILDERS FOR AY 2002-2003 2 2. WITHOUT PREJUDICE TO ABOVE, IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE, THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT REASSESSMENT PROCEED INGS INITIATED U/S 147 OF THE ACT IS BAD IN LAW IN TERMS OF PROVISIONS OF SECTION 149(1)(B) OF THE ACT. 3. (A) IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E APPELLANTS CASE, THE LEARNED CIT(A) HAS GROSSLY ER RED IN CONFIRMING ADDITION OF RS.12,86,090/- ON THE GROUND OF UNEXPLAINED CASH DEPOSITS RECEIVED DURING THE YEAR AND UNEXPLAINED EXPENDITURE. HE OUGHT TO HAVE DELETED ENTIRE ADDITION MADE BY AO. (B) IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E APPELLANTS CASE, THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THAT ENTIRE ADDITION HAS BEEN MADE BY SOLELY ON THE BASIS OF LAPTOP FOUND FROM THE POSSESSION OF THIRD PARTY AND FURTHER THAT THE DATA FOUND FROM THE LAPTOP WAS ENTERED BY A 10 TH FAIL PERSON WHO WAS NOT CONVERSANT WITH ACCOUNTS AND WIT H DIGITAL OPERATION OF COMPUTER. 4. IN THE LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E CASE, THE APPELLANT DENIES HIS LIABILITY TO PAY INTEREST. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND /OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL EITHER BEF ORE OR DURING THE COURSE OF HEARING THE APPEAL. 3. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE, W HILE ARGUING GROUND NO.1 OF THE APPEAL, SUBMITTED THAT THE ASSES SEE HAS RAISED OBJECTIONS TO THE ISSUANCE OF NOTICE U/S 148 OF THE ACT VIDE LETTER DATED 11.11.2009 WHICH WAS RECEIVED IN THE OFFICE OF THE ASSESSING OFFICER ON 16.11.2009. HE HAS PLACED A COPY OF THE SAID LETTE R ON RECORD. HE FURTHER SUBMITTED THAT THE IMPUGNED ORDER WAS PASSE D WITHOUT DISPOSING OFF THE OBJECTIONS OF THE ASSESSEE SEPARA TELY AND WITHOUT WAITING FOR REASONABLE TIME BEFORE PASSING THE IMPU GNED RE-ASSESSMENT ORDER AND THEREFORE, THE RE-ASSESSMENT ORDER IS LIA BLE TO BE QUASHED. THE AR OF THE ASSESSEE RELIED UPON THE ORDER OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA P. L TD. V. DCIT, [2013] ITA NO.1385/AHD/2011 VIVEK BUILDERS FOR AY 2002-2003 3 354 ITR 0244 (GUJ.). HE FURTHER SUBMITTED THAT TH IS BENCH OF THE TRIBUNAL IN THE CASE OF SHRI RAMESHBHAI BABULAL SHA H VS. ACIT VIDE ORDER DATED 28.11.2014 IN ITA NO.1406/AHD/2011 IN A .Y. 2002-03, FOLLOWING THE ORDER OF HONBLE GUJARAT HIGH COURT I N THE CASE OF GENERAL MOTORS INDIA P. LTD. (SUPRA), QUASHED THE RE-ASSESS MENT ORDER ON THE GROUND THAT THE ASSESSEES OBJECTIONS TO THE RE-ASS ESSMENT PROCEEDINGS WERE NOT DISPOSED OFF BY THE ASSESSING OFFICER BY P ASSING A SEPARATE ORDER, BUT WAS DISPOSED OFF IN THE ASSESSMENT ORDER DATED 18.11.2009 ITSELF, PASSED U/S 143(3) R.W.S. 147 OF THE ACT. 4. ON THE OTHER HAND, THE DEPARTMENTAL REPRESENTATI VE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 5. WE FIND THAT, IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE FILED HIS OBJECTIONS AGAINST THE ISSUANCE OF NOTICE U/S 148 OF THE ACT VIDE HIS LETTER DATED 11.11.2009 WHICH WAS RECEIVED BY THE OFFICE OF THE ASSESSING OFFICER ON 16.11.2009. THER EAFTER, THE ASSESSING OFFICER PASSED THE IMPUGNED RE-ASSESSMENT ORDER ON 18.11.2009, DISPOSING OFF THE OBJECTIONS TO RE-ASSESSMENT PROCE EDINGS OF THE ASSESSEE IN THE ORDER ITSELF. THUS, THESE FACTS SH OW THAT THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE ISSUANCE OF NOTI CE U/S 148 OF THE ACT WERE NOT DISPOSED OFF BY THE ASSESSING OFFICER BY P ASSING A SPEAKING ORDER THEREON AND ALLOWING REASONABLE TIME TO THE A SSESSEE AFTER COMMUNICATING THE FATE OF THE OBJECTIONS BEFORE PRO CEEDING WITH THE RE- ASSESSMENT. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA P. LTD V. DCIT (SUPRA) HAS HELD AS UND ER:- FROM THE AFORESAID DISCUSSION, WE ARE OF THE CONSI DERED OPINION THAT THE WRIT PETITION UNDER ARTICLE 226 OF THE CON STITUTION OF INDIA IS MAINTAINABLE WHERE NO ORDER HAS BEEN PASSED BY T HE ASSESSING OFFICER DECIDING THE OBJECTION FILED BY THE ASSESSE E UNDER SECTION 148 OF THE ACT AND ASSESSMENT ORDER HAS BEEN PASSED OR THE ITA NO.1385/AHD/2011 VIVEK BUILDERS FOR AY 2002-2003 4 ORDER DECIDING AN OBJECTION UNDER SECTION 148 OF TH E ACT HAS NOT BEEN COMMUNICATED TO THE ASSESSEE AND ASSESSMENT OR DER HAS BEEN PASSED OR THE OBJECTION FILED UNDER SECTION 14 8 HAS BEEN DECIDED ALONG WITH THE ASSESSMENT ORDER. IF THE OBJ ECTION UNDER SECTION 148 HAS BEEN REJECTED WITHOUT THERE BEING A NY TANGIBLE MATERIAL AVAILABLE WITH THE ASSESSING OFFICER TO FO RM AN OPINION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT AND IN THE ABSENCE OF REASONS HAVING DIRECT LINK WITH THE FORM ATION OF THE BELIEF, THE WRIT COURT UNDER ARTICLE 226 CAN QUASH THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT. THE WRIT PETITION FI LED BY THE PETITIONER IS MAINTAINABLE. THE ASSESSING OFFICER I S MANDATED TO DECIDE THE OBJECTION TO THE NOTICE UNDER SECTION 14 8 AND SUPPLY OR COMMUNICATE IT TO THE ASSESSEE. THE ASSESSEE GETS A N OPPORTUNITY TO CHALLENGE THE ORDER IN A WRIT PETITION. THEREAFT ER, THE ASSESSING OFFICER MAY PASS THE REASSESSMENT ORDER. WE HOLD TH AT IT WAS NOT OPEN TO THE ASSESSING OFFICER TO DECIDE THE OBJECTI ON TO NOTICE UNDER SECTION 148 BY A COMPOSITE ASSESSMENT ORDER. THE ASSESSING OFFICER WAS REQUIRED TO, FIRST DECIDE THE OBJECTION OF THE ASSESSEE FILED UNDER SECTION 148 AND SERVE A COPY O F THE ORDER ON THE ASSESSEE. AND AFTER GIVING SOME REASONABLE TIME TO THE ASSESSEE FOR CHALLENGING HIS ORDER, IT WAS OPEN TO HIM TO PASS AN ASSESSMENT ORDER. THIS WAS NOT DONE BY THE ASSESSI NG OFFICER, THEREFORE, THE ORDER ON THE OBJECTION TO THE NOTICE UNDER SECTION 148 AND THE ASSESSMENT ORDER PASSED UNDER THE ACT D ESERVES TO BE QUASHED. 6. THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECI SION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED ORDER OF RE-ASSESSMENT PASSED BY THE ASSES SING OFFICER WITHOUT DISPOSING OFF THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE ISSUANCE OF NOTICE U/S 148 BY A SEPARATE ORDER IS L IABLE TO BE QUASHED. WE ORDER ACCORDINGLY. THUS, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 7. AS WE HAVE QUASHED THE RE-ASSESSMENT ORDER DATED 18.11.2009 WHILE DISPOSING OFF GROUND NO.1 OF THE APPEAL OF TH E ASSESSEE, THE OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE ON THE MER ITS OF THE ADDITION IN THIS APPEAL HAVE BECOME INFRUCTUOUS AND HENCE DI SMISSED. ITA NO.1385/AHD/2011 VIVEK BUILDERS FOR AY 2002-2003 5 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 10 TH OF APRIL, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 10/04/2015 PBN/* / 0 -%$12 32*$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! () / THE CIT(A)-IV, AHMEDABAD 5. $%& '', , )*++ / DR, ITAT, AHMEDABAD 6. &,- . / GUARD FILE. / ' / BY ORDER, TRUE COPY 4/ !5 ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD