Jayantibhai Shamalbhai Patel, Vadodara V. The Pr. CIT (Central ), Surat At-Vadodara

ITA 142/AHD/2022

AI Insights

The case involves Jayantibhai Shamalbhai Patel, who, along with others, was implicated in a search and seizure operation under the 'Hathee & Ananta Group' in Vadodara. Following this, reassessment under Section 153A of the Income Tax Act revealed unaccounted cash receipts amounting to Rs.2,38,12,500, which were added as long-term capital gains. The assessee later settled this under the DTVSV, but the PCIT issued a notice under Section 263, questioning the manner of taxation of these receipts. The Tribunal held that the PCIT's action was without jurisdiction as the matter was already settled under the DTVSV, leading to the quashing of the PCIT's order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 125400 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 28-05-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 03-05-2022
• Other Referred Cases: Gopalakrishnan Rajkumar vs. PCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 263; 143(3); 54F; 153A; 69A; 139(1); 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, AHMEDABAD BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER & Ms. MADHUMITA ROY, JUDICIAL MEMBER आयकर अपील सं./ I. T. A. Nos. 141 & 142 /Ahd/2022 ( नधा रण वष / A ss es sment Years : 2014 -1 5 & 20 15-16) Ja y a nt i b h a i Sh a m al bh ai Pat e l 3, H a st in a p u r S oc ie t y, K ar el ib au g, V a d o da ra बनाम/ Vs . PCIT (Central) S u r at A T V a d o da r a थायी लेखा सं./जीआइआर सं./P A N/ G I R N o . : A C Q P P7 6 6 0 M (अपीलाथ /Appellant) . . ( यथ / Respondent) अपीलाथ ओर से /Appellant by : Shri Bhavin Marfatia, A.R. यथ क ओर से/Respondent by : Shri A. P. Singh, CIT. D.R. स ु नवाई क तार ख / D a t e o f H e a r i ng 29/05/2023 घोषणा क तार ख /D a t e o f P ro n o u nc e me n t 31/05/2023 O R D E R PER Ms. MADHUMITA ROY - JM: Both the appeals filed by the assessee are directed against the order dated 24.03.2022 & 25.03.2022; respectively, passed by the Ld. PCIT (Central), Surat at Vadod under Section 263 of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) for Assessment Year 2014-15 & 2015-16, respectively. 2. We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record. ITA Nos. 141 & 142/Ahd/2022 (Jayantibhai Shamalbhai Patel vs. PCIT) A.Y.– 2014-15 & 2015-16 - 2 - 3. The brief facts leading to the case is this that the assessee has filed the return of income for the year under consideration on 19.09.2014 declaring total income at Rs.2,23,04,630/-. Subsequently, search and seizure action was carried out in ‘Hathee & Ananta Group’ of Vadodara on 31.01.2018 and the case of the assessee was found to be covered in search and seizure action. Consequently, re-assessment under Section 153A of the Act was conducted during which it was found by the Ld. AO that the assessee jointly alongwith Shri Mahendra J. Shah and Shri Sureshchandra J. Shah owned property lying and situated at Moje Khatamba in the Sub-District of Vadodara bearing old R.S. No. 295, Block No. 215/A, 215/B and 215/C having share of 50%, 25% & 25%; respectively. The land being non-agricultural used for construction of the project of Ananta Shubh Labh executed by the partnership firm M/s. ShubhLabh Homes at Waghodiya, Vadodara wherein the assessee alongwith other two co-owners signed a development agreement with the said firm. As the assessee received unaccounted cash amount of Rs.2,38,12,500/- from the said firm during the year under consideration, which was neither disclosed in the return of income filed under Section 139(1) of the Act nor in the return filed in response to notice under Section 153A of the Act, the same was, therefore, treated as long term capital gain under Section 45 of the Act and added to the total income of the assessee for the year under consideration by the Ld. AO. 4. During the appellate proceeding, the assessee filed declaration under Direct Tax Vivad Se Vishwas Scheme, 2020 (DTVSV) in Form 1 & 2 on 19.12.2020 and finally the same was settled by issuance of Form No.5 under DTVSV Act, 2020 being Acknowledgement No. 742409061271021 dated 27.10.2021. ITA Nos. 141 & 142/Ahd/2022 (Jayantibhai Shamalbhai Patel vs. PCIT) A.Y.– 2014-15 & 2015-16 - 3 - 5. However, notice under Section 263 of the Act was issued to the assessee directing the assessee as to why the impugned amount of Rs.2,38,12,500/- should not be taxed under Section 69A r.w.s. 115BBE of the Act on the premise that the impugned cash receipts were neither recorded in the books of accounts nor been explained the nature and source of receipt of such cash. Despite of the said fact, by finalizing the assessment, the Ld. AO has taxed the unexplained cash receipts under Section 45 of the Act in stead of Section 69A r.w.s. 115BBE of the Act. 6. The assessee while replying inter alia raised the maintainability of such proceeding initiated under Section 263 of the Act, particularly, when the case was settled under DTVSV Act, 2020. 7. Finally, the Ld. PCIT did not accept the contention made by the assessee in support of the case and the order under Section 153A r.w.s. 143(3) of the Act for the year under consideration passed by the Ld. AO on 27.12.2009 in the case of the assessee was declared erroneous and insofar as prejudicial to the interest of the Revenue within the meaning of Section 263 of the Act. The Ld. PCIT has further been pleased to direct the Ld. AO to modify the assessment order and tax the said unaccounted impugned amount of Rs.2,38,12,500/- as unexplained money under Section 69A r.w.s. 115BBE of the Act and to pass a modified order in accordance with the provisions of the Act. As the assessee has already filed the declaration under DTVSV Act, 2020, which has been accepted by the Department, the Ld. AO was further directed to consider the same and compute the tax while passing the modified assessment order. An opportunity of being heard to the assessee was further been directed to be given by the Ld. AO. Hence the instant appeal. ITA Nos. 141 & 142/Ahd/2022 (Jayantibhai Shamalbhai Patel vs. PCIT) A.Y.– 2014-15 & 2015-16 - 4 - 8. The moot question before us is this that as to whether the Ld. PCIT is justified in exercising the jurisdiction under Section 263 of the Act despite of the fact that the issue has already been settled by the appellant under the DTVSV Act, 2020. 9. The issue involved in this particular matter and the consequential addition made by the Ld. AO has already been settled under DTVSV Act. Section 8 whereof mentions that the immunity is not available for any proceeding either than in relation to which the declaration has been made. On the other hand, the Ld. PCIT raised the same issue which has already been thoroughly verified by the Ld. AO and finally got a stamp of closure by way of settlement under the DTVSV Scheme. The revisionary jurisdiction exercised by the Ld. PCIT is not justified in reopening the assessment under the garb of the provision of Section 263 of the Act by the Ld. PCIT; the same is found to be without jurisdiction. The entire proceeding is, thus, vitiated. 10. On this aspect, we have further considered the judgment relied upon by the Ld. AR in the case of Gopalakrishnan Rajkumar vs. PCIT, reported in [2022] 140 taxmann.com 394 (Madras) passed by the Hon’ble Madras High Court, wherein during the pendency of appeals filed by assessee against assessment order, assessee had opted to settle its cases under Direct Tax Vivad Se Vishwas Act; it was held by the Hon’ble Court that the impugned notice under section 263 for revising assessment order on the ground that assessee had incorrectly claimed deduction under 54F was not justified. 11. Thus, we find that in the present facts and circumstances of the case, the ratio laid down by the Hon’ble Madras High Court is squarely applicable and ITA Nos. 141 & 142/Ahd/2022 (Jayantibhai Shamalbhai Patel vs. PCIT) A.Y.– 2014-15 & 2015-16 - 5 - respectfully relying upon the same and also with the observation made hereinabove by us, we quash the impugned order passed by the Ld. PCIT under Section 263 of the Act as the same is found erroneous and lack of jurisdiction. 12. In the result, assessee’s appeal is allowed. 13. The decision in ITA No. 141/Ahd/2022 for A.Y. 2014-15 shall also apply mutatis mutandis in ITA No. 142/Ahd/2022 for A.Y. 2015-16. 14. In the result, assessee’s both appeals are allowed. This Order pronounced on 31/05/2023 Sd/- Sd/- (ANNAPURNA GUPTA) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 31/05/2023 True Copy S. K. SINHA आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं%धत आयकर आय ु 'त / Concerned CIT 4. आयकर आय ु 'त(अपील) / The CIT(A)- 5. *वभागीय -त-न%ध, आयकर अपील य अ%धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड3 फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील$य अ%धकरण, अहमदाबाद / ITAT, Ahmedabad