DCIT, CHENNAI V. M/s L.Milapchand Dadha & Sons (HUF), CHENNAI

ITA 1484/CHNY/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5266 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-04-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 09-09-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Keywords: Unexplained investment; Block assessment; Set aside
• Section: 143(3); 147; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHENNAI BENCH B : CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER] I.T.A NOS. 1483&1484/MDS/2010 ASSESSMENT YEARS : 1997-98 & 1998-99 THE DY. CIT BUSINESS CIRCLE I CHENNAI VS M/S L.MILAPCHAND DADHA & SONS(HUF) NO.4, P.V.KOIL STREET MYLAPORE, CHENNAI-4 [PAN AABHL0037P ] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.B.SEKARAN RESPONDENT BY : NONE O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THESE APPEALS OF THE REVENUE, FOR ASSESSMENT YE ARS 1997-98 AND 1998-99, ARE DIRECTED AGAINST THE COMMON ORDER OF THE LD. CIT(A)- IV, CHENNAI, DATED 3.5.2010. AS IDENTICAL ISSUES ARE INVOLVED IN THESE APPEALS, WE PROCEED TO DISPOSE THEM OFF BY A COMPO SITE ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. AT THE TIME OF HE ARING, NOBODY WAS PRESENT TO REPRESENT THE CASE OF THE ASSESSEE-RESP ONDENT. THE NOTICE OF HEARING SENT TO THE ASSESSEE BY REGISTERED POST HAS BEEN RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARK LEFT. THE ASSESSEE HAS NOT INFORMED THE REGISTRY REGARDING ANY CHANGE IN ADDRE SS, THEREFORE, WE PROCEED EX-PARTE AFTER HEARING THE LD.DR AT LENGTH. ITA 1483&1484/10 :- 2 -: 2. BRIEFLY STATED, THE FACTS OF THE CASE LEADING TO THESE APPEALS ARE THAT ACTION U/S 132 OF THE ACT WAS CARRIED OUT IN THE RESIDENTIAL AND BUSINESS PREMISES OF SHRI MAHENDRA CHAND DADHA ON 1 5.12.1998. CONSEQUENT UPON THE SEARCH, BLOCK ASSESSMENT ORDER U/S 158BD WAS FRAMED ON 31.7.2003 IN WHICH, INTER ALIA, UNEXPLAIN ED ACCRETION OF ASSETS IN ASSESSMENT YEARS 1997-98 AND 1998-99, TO THE TUNE OF ` 59,25,769/- AND ` 1,61,12,409/-, RESPECTIVELY, WERE TAXED AS UNDISCLOSED INCOME AS NO REGULAR RETURNS OF INCOME HAD BEEN FILED FOR THESE ASSESSMENT YEARS PRIOR TO THE DATE OF SEARCH. AFTER COMPLETION OF THE BLOCK ASSESSMENT , THE ASSESSING OFFICER ISS UED NOTICES U/S 148 R.W.S 147 OF THE ACT, FOR BOTH THESE YEARS, AFTER R ECORDING VALID REASONS IN FORM ITNS-10 THAT UNEXPLAINED INVESTMENTS AS STA TED ABOVE FOR THE ASSESSMENT YEARS HAD ESCAPED ASSESSMENT. THEREAFTE R, HE COMPLETED THE ASSESSMENT U/S 143(3) R.W.S 147 ON 31.3.2005 F OR BOTH YEARS. AGAINST THESE ASSESSMENT ORDERS, THE ASSESSEE PREFE RRED APPEAL BEFORE THE LD. CIT(A) BECAUSE THE ASSESSING OFFICER HAD RE CORDED REASONS IN FORM NO.10(ITNS) AND IN ITS COLUMN NOS.6 & 7 THE IN FORMATION WAS FOUND TO BE RECORDED IN CASUAL MANNER, THE LD. CIT( A) HAS CONCLUDED THAT THE ASSESSING OFFICER WAS NOT CERTAIN AS TO HO W MUCH INCOME HAD ESCAPED ASSESSMENT. THEREFORE, FINDING THE REASONS TO BE NOT VALID AND BEING CASUAL, THE LD. CIT(A) HAS HELD THE ASSES SMENT ORDERS FOR THESE YEARS AB INITIO VOID AND ACCORDINGLY, HAS ANNULLED THEM. NOW, ITA 1483&1484/10 :- 3 -: THE REVENUE IS IN APPEAL AND HAS TAKEN ALMOST IDENT ICAL GROUNDS. THE GROUNDS RAISED IN ASSESSMENT YEAR 1997-98 READ AS U NDER: 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2. THE LD CIT(A) ERRED IN HOLDING THAT RE-OPENING OF THE ASSESSMENT IS AB-INITIO VOID AND ANNULLING THE ASSESSMENT. 3. THE ID CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THAT ANY MISTAKE IN FILLING UP THE FORM - 10 IS A CURABL E DEFECT AND THE CIT(A) SHOULD HAVE SEEN THE SUM AND SUBSTANCE OF THE REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT. 4. THE LD CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THAT IT WOULD SUFFICE IF SATISFACTION FOR ESCAPEMENT OF INCOME IS ESTABLISHED AND AT THIS STAGE THE INCOME ESCAPED ASSESSMENT NEED NOT BE QUANTIFIED. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING , IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD.DR A ND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN O UR OPINION, THE LD. CIT(A) HAS COMMITTED AN ERROR IN ANNULLING THE ASSE SSMENT ORDERS FOR BOTH THE YEARS. THE MISTAKE IN FILLING UP FORM ITN S-10 IS A CURABLE DEFECT AND THE PROPER COURSE OF ACTION AVAILABLE TO THE AUTHORITIES IS TO RESTORE THE ISSUE BACK TO THE SAME AUTHORITY WHO HA S COMMITTED THAT DEFECT WITH A DIRECTION TO REMOVE THE DEFECT AND TH EREAFTER TO PROCEED FURTHER TO MAKE THE ASSESSMENT ORDERS AFRESH. WE, THEREFORE, RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFI CER WITH A DIRECTION ITA 1483&1484/10 :- 4 -: THAT AFTER REMOVING THE DEFECT AS POINTED OUT BY HE LD. CIT(A), THE ASSESSING OFFICER HAS TO MOVE FURTHER FROM SQUARE O NE, SUBJECT TO OTHER PROVISIONS OF THE ACT. 4. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE STAN D ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25.4 .2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER DATED: 25 TH APRIL, 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR