Late Shri Jayant Maneklal Wagle, Pune V. Income-tax Officer,

ITA 1521/PUN/2014

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2304 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-10-2018
• Assessment Year: 2005-2006
• Appeal Filed On: 31-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHABANA PARVEEN
• Keywords: Search and seizure; Document seized; Question of law; Assessment record; Documents seized
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1521 /P U N/201 4 / ASSESSMENT YEAR : 20 05 - 06 LATE JAYANT MANEKLAL WAGLE THROUGH HIS LEGAL HEIR MRS. RAJLAXMI DILIP PARULKAR C/O MRS. RAJAKSHMI DILIP PARULKAR B - 9, VARSHA PARK, BANER ROAD, PUNE 411045 . / APP ELLANT PAN: A A QPW7659H VS. THE INCOME TAX OFFICER , WARD 4(6), PUNE . / RESPONDENT / APPELLANT BY : SHRI NIKHIL PATHAK / RESPONDENT BY : MS. S H ABANA PARVEEN / DATE OF HEARING : 01 . 1 1 .201 8 / DATE OF PRONOUNCEMENT: 14 . 11 .201 8 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - II , PUNE , DATED 2 8 .0 2 .201 4 RELATING TO ASSESSMENT YEAR 20 05 - 06 AGAINST ORDER PA SSED UNDER SECTION 14 4 R.W.S. 153C OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 1521 /P U N/20 1 4 LATE JAYANT MANIKLAL WAGLE L/H MRS. RAJLAXMI DILIP PARULKAR 2 2. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ADDITIONAL GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THE JURISDICTIONAL ISSUE, HENCE THE SAM E NEEDS TO BE ADDRESSED FIRST BEFORE REFERRING TO THE ISSUE RAISED ON MERITS OF ADDITIONS MADE. 3. THE ADDITIONAL GROUNDS OF APPEAL RAISED BY ASSESSEE READ AS UNDER: - 1] THE ASSESSEE SUBMITS THAT THE NOTICE ISSUED U/S 153C WAS BAD IN LAW AND ACCORDINGLY, THE ASST. COMPLETED U/S 144 R.W.S. 153C BE DECLARED NULL AND VOID. 2] THE ASSESSEE SUBMITS THAT NO PROPER SATISFACTION WAS RECORDED WHILE ISSUING THE NOTICE U/S 153C TO THE ASSESSEE AND HENCE, THE ASSESSMENT ORDER PASSED U/S. 144 R.WS. 153C IS BAD IN LAW AND THE SAME MAY BE DECLARED AS NULL AND VOID. 4. WE FIND THAT THE ASSESSEE HAS CHALLENGED THE NOTICE ISSUED UNDER SECTION 153C OF THE ACT ON THE GROUND THAT NO PROPER SATISFACTION WAS RECORDED BEFORE ISSUING THE SAID NOTICE AND HENCE, THE ASSESSMENT ORDE R PASSED UNDER SECTION 144 R.W.S. 153C OF THE ACT BE DECLARED AS NULL AND VOID. 5. THE ISSUE RAISED VIDE ADDITIONAL GROUNDS OF APPEAL IS JURISDICTIONAL IN NATURE AND INVOLVES QUESTION OF LAW AND NO VERIFICATION OF FACTS, HENCE THE SAME IS ADMITTED FOR ADJ UDICATION. 6. BRIEFLY, IN THE FACTS OF THE CASE, SEARCH ACTION UNDER SECTION 132(1) OF THE ACT WAS CARRIED OUT IN SINHGAD TECHNICAL EDUCATIONAL SOCIETIES (STES) / M N NAVALE GROUP ON 20.07.2005. DURING THE COURSE OF SEARCH AT THE RESIDENCE AND OFFICE PRE MISES, CERTAIN DOCUMENTS WERE SEIZED, IN WHICH THERE WAS REFERENCE TO ASSESSEE. THE ASSESSING OFFICER INCHARGE OF M N NAVALE GROUP OF CASES FORWARDED THE SEIZED DOCUMENTS BELONGING TO ASSESSEE TO THE ASSESSING OFFICER IN WHOSE JURISDICTION THE ASSESSEE WA S BEING ASSESSED. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER VIDE PARA 2 HAS REFERRED TO THE SEIZED ITA NO. 1521 /P U N/20 1 4 LATE JAYANT MANIKLAL WAGLE L/H MRS. RAJLAXMI DILIP PARULKAR 3 DOCUMENTS AND IN PARA 3 HAS NOTED THAT THE AFORESAID SEIZED DOCUMENTS BELONGING TO THE ASSESSEE WERE PASSED ON BY THE DCIT, CENTRAL CIRCLE 2(2), PUNE TO THIS OFFICE AS PROVIDED UNDER SECTION 153C OF THE ACT. THE ASSESSING OFFICER THEN TALKS ABOUT SEIZED DOCUMENTS AND ISSUE OF NOTICE UNDER SECTION 153C OF THE ACT. THE ASSESSING OFFICER FIRST ISSUED NOTICE UNDER SECTION 153C OF THE ACT BUT THERE WAS NO RE SPONSE TO THE SAME. ANOTHER OPPORTUNITY WAS GIVEN VIDE LETTER DATED 03.10.2008, WHICH WAS ALSO NOT RESPONDED TO AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 144 R.W.S. 153C OF THE ACT. 7. THE ASSESSEE BY WAY OF ADDITIONAL GROUNDS OF APPEAL CHALLENGED THE EXERCISE OF JURISDICTION UNDER SECTION 153C OF THE ACT ON THE GROUND THAT NO PROPER SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER OF SEARCHED PERSON. THE SAID ISSUE AS POINTED OUT, RAISED BY WAY OF ADDITIONAL GROUNDS OF APPEAL FOR THE FIRST TIME BEFORE US. SO, IN ORDER TO DECIDE THE SAME, THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE WAS DIRECTED TO PRODUCE ASSESSMENT RECORDS WITH SATISFACTION NOTE VIDE NOTING DATED 25.04.2017. THE APPEAL WAS FIXED ON 18.07.2017 AND THEREAFTER ON 12.1 0.2017 AND SOME DIRECTIONS WERE AGAIN GIVEN TO THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. IN RESPONSE , ON THE NEXT DATE OF HEARING I.E. 07.11.2017, LETTER DATED 01.11.2017 WAS FILED WHEREIN IT WAS POINTED OUT THAT SINCE IT WAS VERY OLD RECOR D, HENCE MORE TIME BE GRANTED TO PRODUCE THE SAME BEFORE THE BENCH. THE PLEA OF LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE WAS ACCEPTED AND THE MATTER WAS ADJOURNED TO 23.01.2018, ON WHICH DATE, AGAIN SIMILAR LETTER WAS FILED BY LEARNED DEPARTMEN TAL REPRESENTATIVE FOR THE REVENUE ALONG WITH A LETTER FROM THE ASSESSING OFFICER POINTING OUT THAT SINCE THE SCRUTINY FOLDER WAS NOT AVAILABLE WITH HIS OFFICE AND HENCE, SATISFACTION NOTE UNDER SECTION 153C OF THE ACT OF THE ASSESSING OFFICER, COPIES OF D OCUMENTS AND ITA NO. 1521 /P U N/20 1 4 LATE JAYANT MANIKLAL WAGLE L/H MRS. RAJLAXMI DILIP PARULKAR 4 STATEMENT ON THE BASIS OF WHICH SATISFACTION FOR THE ISSUE OF NOTICE UNDER SECTION 153C OF THE ACT WAS RECORDED BY THE ASSESSING OFFICER AND ASSESSMENT RECORD OF PROCEEDINGS UNDER SECTION 153C OF THE ACT , COULD NOT BE PROVIDED BY TH E OFFICE AS THE SAME WAS NOT TRANSFERRED TO HIM BY THE ORIGINAL ITO, WARD 2(2), PUNE. THIS LETTER WAS WRITTEN BY ACIT, CIRCLE - 2, PUNE. AGAIN REQUEST WAS MADE FOR GRANTING TIME TO COMPLY WITH DIRECTIONS OF TRIBUNAL. THE MATTER WAS ADJOURNED TO 07.03.2018 AND AGAIN TO 14.05.2018 WITH THE REMARK THAT IT WOULD BE LAST AND FINAL OPPORTUNITY FOR THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE TO SEEK ADJOURNMENT. ON 14.05.2018, ANOTHER ADJOURNMENT LETTER WAS MADE BY LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE RE VENUE ON THE GROUND THAT THE ASSESSING OFFICER OF M N NAVALE VIDE HIS LETTER DATED 11.05.2018 HAS REQUESTED FOR SOME MORE TIME AS THE RECORDS PERTAIN ED TO OLD PERIOD. THE MATTER WAS AGAIN ADJOURNED TO 17.07.2018 AND LAST AND FINAL OPPORTUNITY WAS GIVEN TO THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE. ON THE AFORESAID DATE, AGAIN ANOTHER REQUEST WAS MADE AND THE APPEAL WAS FIXED FOR HEARING ON 04.10.2018 AND THEREAFTER ON 23.10.2018. FINALLY, THE APPEAL WAS HEARD ON 01.11.2018 ON WHICH DATE THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FILED LETTER DATED 30.10.2018 POINTING OUT THAT RELEVANT RECORDS WERE NOT TRACEABLE. SINCE SO MANY OPPORTUNITIES WERE GIVEN TO THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE TO PRODUCE SATISFAC TION NOTE AND ALSO TO PRODUCE ASSESSMENT RECORDS BUT BECAUSE OF FAILURE TO PRODUCE THE SAME, THE MATTER IS BEING DECIDED AFTER HEARING BOTH THE LEARNED AUTHORIZED REPRESENTATIVES. 8 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE A SSESSMENT ORDER PASSED BY ASSESSING OFFICER AND POINTED OUT THAT THE PERUSAL OF THE SAME REFLECTS THAT IN PARA 2 THERE WAS REFERENCE TO THE SEIZED DOCUMENTS ITA NO. 1521 /P U N/20 1 4 LATE JAYANT MANIKLAL WAGLE L/H MRS. RAJLAXMI DILIP PARULKAR 5 AND PARA 3 REFERS TO THE SEIZED DOCUMENTS BEING PASSED ON BY THE ASSESSING OFFICER OF SEARCHED PERS ON TO THE ASSESSING OFFICER OF ASSESSEE FOR PROCEEDINGS UNDER SECTION 153C OF THE ACT. HOWEVER, THERE IS NO REFERENCE MADE AT ALL TO ANY SATISFACTION BEING RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON WHILE FORWARDING THE SEIZED DOCUMENTS TO T HE ASSESSING OFFICER OF THE PERSON. IN THE ABSENCE OF ANY RECORDING OF SATISFACTION, THE ASSESSMENT COULD NOT BE PROCEEDED AGAINST. HE FURTHER REFERRED TO PARA 5 OF THE ASSESSMENT ORDER, WHEREIN THERE IS MENTION OF NOTICE BEING ISSUED UNDER SECTION 153C OF THE ACT BUT THERE IS NO MENTION OF SATISFACTION NOTE BEING RECORDED BY THE ASSESSING OFFICER OF SEARCHED PERSON ON THE BASIS OF WHICH THE AFORESAID PROCEEDINGS WERE STARTED UNDER SECTION 153C OF THE ACT. 9 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR T HE REVENUE FAIRLY ADMITTED THAT RECORDS WERE NOT TRACEABLE AS IT IS APPARENT FROM THE LETTER DATED 30.10.2018 AND SHOWED INABILITY TO PRODUCE THE SAME. 10 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSMENT IN THE CASE WAS INITIAT ED CONSEQUENT TO SEARCH PROCEEDINGS BEING CONDUCTED AGAINST M N NAVALE GROUP. THE SAID SEARCH HAD TAKEN PLACE ON THE SAID GROUP ON 20.07.2005. DURING THE COURSE OF SEARCH, CERTAIN DOCUMENTS WERE FOUND WHICH WERE SEIZED VI DE PANCHANAMA DATED 22.06.2005 ; D URING THE COURSE OF SEARCH AT THE RESIDENCE OF SHRI M N NAVALE IN THE SAID SEIZED DOCUMENTS, THERE WAS MENTION OF CERTAIN TRANSACTIONS WITH THE ASSESSEE. IT MAY BE POINTED OUT THAT THE ASSESSEE IS DECEASED AND IS BEING REPRESENTED BY HIS LEGAL HEIR. THE ASSESSING OFFICER IN PARA 1 TALKS ABOUT SEARCH AND SEIZURE OPERATION AND IN PARA 2 HAS REFERRED TO THE SEIZED DOCUMENTS RELATING TO THE ASSESSEE. IN PARA 3 OF ASSESSMENT ORDER, THE ASSESSING OFFICER MENTIONS THAT ITA NO. 1521 /P U N/20 1 4 LATE JAYANT MANIKLAL WAGLE L/H MRS. RAJLAXMI DILIP PARULKAR 6 SEIZED DOCUMENTS BELONGING TO THE ASSESSEE WERE PASSED ON TO HIM BY DCIT, CENTRAL CIRCLE 2(2), PUNE TO HIS OFFICE AS PROVIDED UNDER SECTION 153C OF THE ACT. FURTHER, VIDE PARA 5 THE ASSESSING OFFICER ISSUES NOTICE UNDER SECTION 153C OF THE ACT AND TAKES UP THE ASSESSMENT PROCEEDINGS AGAINST ASSES SEE AND PASSES THE ORDER UNDER SECTION 144 R.W.S. 153C OF THE ACT. 1 1 . NOW, LET US LOOK AT THE PROVISIONS OF SECTION 153C OF THE ACT, WHICH RELATES TO THE ASSESSMENT OF A PERSON OTHER THAN THE PERSON SEARCHED. SECTION PROVIDES THAT IN CASE DURING THE COU RSE OF SEARCH ON THE SEARCHED PERSON, CERTAIN DOCUMENTS ARE FOUND WHICH BELONG TO ANOTHER PERSON, THEN THE ASSESSING OFFICER INCHARGE OF THE SEARCHED PERSON HAS TO RECORD SATISFACTION IN THIS REGARD AND THEREAFTER, PASS ON THE DOCUMENTS TO THE ASSESSING OF FICER INCHARGE OF THE OTHER PERSON. RECORDING OF SATISFACTION BEFORE PASSING ON INFORMATION ALONG WITH SEIZED DOCUMENTS IS MUST ; IN THE ABSENCE OF WHICH PROCEEDINGS INITIATED UNDER SECTION 153C OF THE ACT ARE VITIATED. SINCE THE ASSESSMENT ORDER IS SILEN T ABOUT RECORDING OF SATISFACTION OR HANDING OVER OF SATISFACTION NOTE BY THE ASSESSING OFFICER OF SEARCHED PERSON TO THE ASSESSING OFFICER OF ASSESSEE, THEN IT WAS INCUMBENT UPON THE DEPARTMENT TO PROVE ITS CASE OF HAVING JURISDICTION UNDER SECTION 153C O F THE ACT I.E. TO PRODUCE SATISFACTION NOTE OF THE ASSESSING OFFICER INCHARGE OF THE SEARCHED PERSON, PURSUANT TO WHICH DOCUMENTS WERE HANDED OVER TO THE ASSESSING OFFICER OF ASSESSEE AND PROCEEDINGS WERE INITIATED UNDER SECTION 153C OF THE ACT. DESPITE S EVERAL OPPORTUNITIES BEING ALLOWED TO THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE, SATISFACTION NOTE AND THE ASSESSMENT RECORDS COULD NOT BE PRODUCED , THOUGH EFFORTS WERE MADE BUT ON THE GROUND THAT RECORDS ARE VERY OLD, THE SAME CANNOT BE PROD UCED. BUT THIS CANNOT BE TAKEN AS GROUND FOR ALLOWING THE CLAIM OF DEPARTMENT. THE ONUS WAS UPON THE ITA NO. 1521 /P U N/20 1 4 LATE JAYANT MANIKLAL WAGLE L/H MRS. RAJLAXMI DILIP PARULKAR 7 REVENUE TO PROVE ITS CASE THAT PROPER SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER INCHARG E OF THE SEARCHED PERSON BEFORE HANDING OVER THE DOCUMENT S TO THE ASSESSING OFFICER OF THE ASSESSEE AND FOR NON PRODUCTION OF SUCH SATISFACTION NOTE AND NON MENTIONING OF SATISFACTION NOTE IN THE ASSESSMENT ORDER, VITIATES THE ASSESSMENT ORDER PASSED IN THE CASE OF ASSESSEE UNDER SECTION 143(3) R.W.S. 153C OF TH E ACT . HENCE, THE SAME IS HELD TO BE INVALID AND BAD IN LAW. CONSEQUENTLY, ADDITIONAL GROUNDS OF APPEAL RAISED BY ASSESSEE STANDS ALLOWED AND THE OTHER GROUNDS OF APPEAL RAISED BY ASSESSEE ON MERITS BECOME ACADEMIC. 1 2 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 14 TH DAY OF NOVEMB ER , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 14 TH NOVEM BER , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - II , PUNE ; 4. THE CIT - II , PUNE ; 5. 6. , , / DR A , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE