Ravi Mandawat, UDAIPUR V. ACIT, UDAIPUR

ITA 139/JODH/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7948 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-11-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 11-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: RAJESH DEOPURA
• Keywords: Reopening of assessment; Block assessment; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NOS. 137 TO 139/JU/2011 ASSESSMENT YEAR: 1999-2000, 2001-02 & 2002-03 SHRI RAVI MANDAWAT VS. THE A.C.I.T PROP. M/S RRH ENTERPRISES CENTRAL CIRCLE- 2 50, GOVARDHAN VILAS UDAIPUR UDAIPUR PAN NO. ABQPM 3365 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJESH DEOPURA DEPARTMENT BY : SHRI G.R. KOKANI, DR DATE OF HEARING : 20.11.2012 DATE OF PRONOUNCEMENT : 17.12.2012 ORDER PER HARI OM MARATHA, J.M. THIS IS A BUNCH OF THREE APPEALS FILED BY THE SAME ASSESSEE FOR A.YS. 1999-2000, 2001-02 AND 2002-03, IN WHICH IDENTICAL ISSUES ARE INVOLVED BUT THESE ARE D IRECTED AGAINST SEPARATE ORDERS OF THE LD. CIT(A). FOR THE SAKE OF 2 CONVENIENCE AND BREVITY, WE ARE DECIDING THEM BY TH IS COMMON ORDER. THE GROUNDS RAISED IN ALL THE APPEALS ARE ALMOST COMMON, EXCEPT FOR THE AMOUNTS OF ADDITION. THE SAMPLE GROUND FOR A.Y. 1999-2000 READS AS UNDER: 1. THE LD. CIT(A) HAS ERRED IN LAW AND FACTS AND WRONGLY UPHELD THE REOPENING ASSESSMENT PROCEEDING S U/S 147 JUSTIFIED WHICH IS BAD IN LAW AND DESERVES TO BE ANNULLED/QUASHED. 2. THE LD. CIT(A) HAS ALSO ERRED IN LAW AND FACTS AND WRONGLY UPHELD THE ADDITION MADE TO INCOME BY THE A.O. ON ACCOUNT OF DIFFERENCE IN CLOSING CASH AND BANK BALANCE IGNORING AND EFFECTING THE OPENING DIFFERENCE. THUS PRESUMPTIVE ADDITION DESERVED TO BE DELETED/SET ASIDE. ITA NO. 137/JU/2011 [A.Y. 1999-2000] 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH U/S 132OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REF ERRED TO AS 'THE ACT', FOR SHORT] WAS CONDUCTED ON 2.5.20 02 IN THE CASE OF THE ASSESSEE AND BLOCK ASSESSMENT ORDER WAS MADE 3 UNDER SPECIAL PROVISIONS OF CHAPTER XIB OF THE ACT. IN APPEAL, THE IMPUGNED ADDITION WAS DELETED BY THE LD . CIT(A), UDAIPUR. LATER, THE A.O. TAKING A CUE FROM THIS ORDER OF THE LD. CIT(A), INITIATED ACTION U/S 147 R .W.S 148 OF THE ACT. THE ASSESSEE IS CARRYING ON THE BUSINE SS OF STD/PCO BOOTH SINCE THE A.Y. 1990-91. TRANSPORTATI ON BUSINESS WAS ALSO ADDED AND CARRIED ON DURING THE Y EAR UNDER CONSIDERATION. BOTH BUSINESS ACTIVITIES WERE OPERATED UNDER THE NAME AND STYLE OF THE ASSESSEES PROPRIETARY FIRMS M/S R.R.H. ENTERPRISES AND M/S RA VI MOTORS RESPECTIVELY. IN REASSESSMENT ORDER PASSED ON 22.1.22006, VARIOUS ADDITIONS WERE MADE. AGAINST T HIS ORDER, THE ASSESSEE PREFERRED APPEAL BY RAISING LEG AL ISSUE CHALLENGING THE ACTION TAKEN U/S 147 OF THE ACT. B UT THE LD. CIT(A) DID NOT AGREE AND CONFIRMED BOTH ACTIONS TAKEN FOR REASSESSMENT AS WELL AS ADDITIONS MADE THEREIN . ASSESSEE IS IN FURTHER APPEAL BEFORE US. THE MAIN ISSUE RAISED IN THIS APPEAL IS REGARDING CHALLENGING THE REASSESSMENT PROCEEDINGS AND AGAINST THE SUSTAINED ADDITIONS. 4 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. I T WAS ARGUED BY THE LD. A.R. THAT SEARCH WAS CARRIED OUT ON 2.5.2002 BUT DURING THE SEARCH, NO UNDISCLOSED VALU ES / INVESTMENT/INCOMES OR EXPENSES WERE FOUND. IN COMPLIANCE OF NOTICE 158BC, THE ASSESSEE FILED RETU RN FOR THE BLOCK PERIOD COMPRISING OF A.YS. 1997-98 TO 200 2-03 UPTO 2.5.2002, WHICH WAS FILED ON 16.10.2002 DECLAR ING NIL UNDISCLOSED INCOME. ACCORDING TO THE LD. A.R., THE A.O. PASSED ORDER OF ASSESSMENT U/S 158BC(C) R.W.S 158B B AND SECTION 143(3) MAKING ARBITRARY ADDITION OF RS. 8,5 1,769/- ON ACCOUNT OF UNDISCLOSED INCOME. AGAINST THIS ORDE R, APPEAL WAS PREFERRED. THE LD. CIT(A), VIDE HIS ORD ER DATED 20.10.2002, DELETED THE ENTIRE ADDITION MADE IN QUA NTUM APPEAL AS UNDISCLOSED INCOME. IT WAS VEHEMENTLY ARG UED BY THE LD. A.R. THAT PROVISO TO SUB-SECTION (III) O F CLAUSE (A) OF SECTION 158BC DEBARS REOPENING OF ASSESSMENT ORDER ALREADY COMPLETED. IT WAS ARGUED THAT THIS SUBMISS ION IS SUPPORTED BY VARIOUS DECISIONS INCLUDING THAT OF JO DHPUR BENCH RENDERED IN THE CASE OF ACIT VS. RAMESH CHAND SONI 5 REPORTED IN [2006] 105 TTJ 262 WHEREIN IT HAS BEEN HELD THAT UNDISCLOSED INCOME FOUND DURING SEARCH IN VIEW OF FIRST PROVISO TO SUB-SECTION (III) OF CLAUSE (A) OF SECTION 158BC A.O. IS NOT AUTHORIZED TO ISSUE NOTICE U/S 14 8 IN RESPECT OF ESCAPED INCOME FOUND AS A RESULT OF SEAR CH WHICH IS TO BE DEALT UNDER SPECIAL PROVISIONS OF CH APTER XIVB. 4. ON THE OTHER HAND, THE LD. D.R. SUPPORTED THE OR DERS OF THE LD. CIT(A). 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE HAVE FOUND THAT THE LEGAL ISSUE OF REASSESSMENT U/S 147 R.W.S. 148 IN RESPECT OF UNDISCLOSED INCOME, IF ANY, FOUND DURING THE COURSE OF SEARCH IS NOT PERMITTED BY EXPRESS PR OVISION OF THE ACT. THIS VIEW ALREADY STANDS COVERED BY TH E AFOREMENTIONED TRIBUNAL ORDER. ACCORDINGLY, WE ALL OW THIS LEGAL ISSUE IN FAVOUR OF THE ASSESSEE AND SET ASIDE THE ASSESSMENT ORDER ITSELF BY ANNULLING/QUASHING THE S AME. 6 6. IN ALL OTHER YEARS, SIMILAR LEGAL ISSUE HAS BEEN RAISED. THE FACTS AND OTHER CIRCUMSTANCES OF THIS LEGAL ISS UE ARE SIMILAR IN OTHER YEARS ALSO. THEREFORE, BY FOLLOWI NG OUR VIEW TAKEN ABOVE, WE QUASH THE ASSESSMENT ORDERS FO R A.YS. 2001-02 AND 2002-03 ALSO. 7. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 17 TH DECEMBER, 2012. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 17 TH DECEMBER, 2012 VL/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) BY ORDER 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR