Mr. Ramratan Soni, Pune V. Addl. CIT,Range-2, Pune

ITA 1678/PUN/2007

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7598 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-02-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 12-12-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S SINGH
• Assessee Lawyers: SNIL GANOO
• Keywords: Question of law; Assessment record; Block assessment; Set aside
• Section: 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER S.NO . ITA NO. ASSTT.YEAR 1. 1678/PN/07 1998-99 2. 1679/PN/07 1999-2000 3. 619/PN/08 2000-01 4. 620/PN/08 2001-02 5. 621/PN/08 2002-03 6. 622/PN/08 2003-04 MR RAMRATAN B.SONI FLAT NO 2, SHREE GAJANAN KRIPA, .. APPELLANT BUNGALOW 63, MUKUNDNAGAR, PUNE. PAN APOPS 6714E VS. ADDL. COMMISSIONER OF INCOME-TAX, CEN.RANGE-2, PUNE .. RESPONDENT APPELLANT BY : SHRI SNIL GANOO RESPONDENT BY : SHRI A.S. SINGH ORDER PER G.S. PANNU, A.M: THE ABOVE SIX CAPTIONED APPEALS ARE PREFERRED BY T HE ASSESSEE AGAINST THE ORDERS DATED 12.9.1997 (A.Y 1998-99 & 1999-2000 ), 28.01.2008 (AY 2000- 01 & 2001-02) AND 13.2.2008 (AY 2002-03 & 2003-04) PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-1, PUNE WHICH, IN TURN, HAVE ARISEN FROM ITA NOS 1678-1679-PN-07,619-62 2-PN-08 RAMRATAN SONI, PUNE 2 THE ORDERS OF THE ASSESSING OFFICER DATED 27.3.2006 , PASSED UNDER SECTION 153A(B) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEARS 1998-99 TO 2003-04 RESPECTIVELY. S INCE A COMMON ISSUE IS INVOLVED IN ALL THESE SIX APPEALS, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY A CONSOLIDATED ORDER, FOR THE SAKE O F CONVENIENCE. 2. FOR THE ASSESSMENT YEARS 2000-01 AND 2001-02, TH ERE IS A DELAY OF 34 DAYS IN FILING THE APPEALS BEFORE THE TRIBUNAL. THE ASSESSEE VIDE HIS APPLICATION DATED 03.02.2011 HAS REQUESTED FOR CONDONATION OF T HE AFORESAID DELAY. IT IS STATED THAT THE ASSESSEE IS A PRACTICING ADVOCATE I N DISTRICT COURT, PUNE AND HAS BEEN IN THIS LINE FOR THE LAST 23 YEARS. IT IS STATED THAT THE HEARING OF THE APPEALS FOR FIVE ASSESSMENT YEARS 2000-01 TO 2003-0 4 AND 2004-05 TOOK PLACE BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, PUNE SIMULTANEOUSLY ON 28.1.2008. ACCORDING TO THE ASSESSEE, THE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) IN RESPECT OF THE ASSESSMENT Y EARS 2002-03 TO 2004-05 WERE RECEIVED BY THE ASSESSEE ON 14.3.2008 THROUGH COURIER AND THAT THE ASSESSEE HAD ENQUIRED ABOUT THE ORDERS FOR THE ASSE SSMENT YEARS 2000-01 AND 2001-02 WITH THE COURIER, WHO STATED THAT ONLY THRE E ORDERS FOR THE ASSESSMENT YEARS 2002-03 TO 2004-05 ONLY WERE SENT THROUGH COU RIER. IT IS STATED THAT THE APPELLATE ORDERS FOR THE ASSESSMENT YEARS 2000-01 A ND 2001-02 WERE PERSONALLY SERVED ON THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ON 7.2.2008. IN THE MEANTIME, THE SAID REPRESENTATIVE OF THE ASSESSEE HAD GONE OUT OF INDIA AND WAS EXPECTED TO RETURN TO INDIA ON LY BY 21.5.2008 AND THE LAST DATE FOR FILING OF APPEALS BEFORE THE TRIBUNAL WAS 7.4.2008 AND, THEREFORE, THE DELAY OF 34 DAYS WAS CAUSED IN FILING THE APPEALS B EFORE THE TRIBUNAL. IT IS PLEADED THAT THE ASSESSEE WAS NOT AWARE OF THE FACT THAT THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE HAD RECEIVED THE APP ELLATE ORDERS FOR THE SAID ASSESSMENT YEARS AND THE DELAY HAS BEEN CAUSED DUE TO IGNORANCE AND THERE WAS NO DELIBERATE ATTEMPT OR INTENTION ON THE PART OF THE ASSESSEE TO DELAY THE ITA NOS 1678-1679-PN-07,619-62 2-PN-08 RAMRATAN SONI, PUNE 3 FILING OF APPEALS BEFORE THE TRIBUNAL. THE ASSESSE E, THEREFORE, REQUESTED THAT THE DELAY OF 34 DAYS CAUSED IN FILING THE APPEALS B EFORE THE TRIBUNAL FOR THE ASSESSMENT YEARS 2000-01 AND 2001-02 MAY BE CONDONE D AND THE APPEALS MAY BE ADMITTED AND DECIDED ON MERITS. 3. WE HAVE HEARD BOTH THE PARTIES ON THIS ASPECT. I N VIEW OF THE FACTUAL POSITION POINTED OUT BY THE ASSESSEE IN HIS APPLICA TION DATED 3.2.2011 AND CONSIDERING THE CIRCUMSTANCES IN WHICH THE ASSESSEE WAS PLACED DUE TO THE ABSENCE OF HIS AUTHORIZED REPRESENTATIVE, WE ARE OF THE CONSIDERED OPINION THAT IN THE INTEREST OF JUSTICE AND FAIR-PLAY, THE DELAY NEEDS TO BE CONDONED. THE BONA FIDES OF THE REASONS HAVE NOT BEEN ASSAILED BY THE OTHER SIDE AND, THEREFORE, WE CONDONE THE DELAY OF 34 DAYS CAUSED I N FILING THE APPEALS BEFORE THE TRIBUNAL FOR THE ASSESSMENT YEARS 2000-01 AND 2 001-02. 4. SINCE THE FACTS AND CIRCUMSTANCES ARE IDENTICAL IN ALL THE APPEALS, WE TAKE UP FOR CONSIDERATION THE APPEAL FOR THE ASSESS MENT YEAR 1998-99, VIDE ITA NO 1678/PN/07. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE RAISED BY THE APPELLANT BY WAY OF ADDITIONAL GROUND OF APPEAL VIDE APPLICATION DATED 14.12.2010 GOES TO THE ROOT OF THE MATTER AND THE SAME SHOULD BE TAKEN UP FOR CONSIDERATION AT THRESHOLD. THE ADDITIONAL G ROUND SO RAISED BY THE ASSESSEE, WHICH IS COMMON TO ALL THE CAPTIONED ASSE SSMENT YEARS, READS AS UNDER: SINCE THE LEARNED ASSESSING OFFICER HAS FAILED TO SERVE ON THE APPELLANT-ASSESSEE THE NOTICE UNDER SECTION 143(2) OF THE INCOME-TAX ACT, 1961 WITHIN THE PRESCRIBED STATUTORY TIME LIMIT, THE IMPUGNED ASSESSMENT PROCEEDINGS ARE BAD IN LAW, NULL AND VOID AND WITHOUT JURISDICTION AND THEREFORE THE IMPUGNED ASS ESSMENT ORDER MAY PLEASE BE VACATED. 5. ACCORDING TO THE ASSESSEE, THE ABOVE-SAID ADDITI ONAL GROUND IS PURELY A LEGAL ONE AND DOES NOT REQUIRE FRESH INVESTIGATION INTO FACTS AND CAN BE ADJUDICATED UPON, ON THE BASIS OF THE FACTS AVAILAB LE ON RECORD AND THAT ADMISSION OF THE ADDITIONAL GROUND WOULD IN NO WAY CAUSE ANY PREJUDICE OR INJUSTICE TO THE RESPONDENT-REVENUE. ITA NOS 1678-1679-PN-07,619-62 2-PN-08 RAMRATAN SONI, PUNE 4 6. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE STRONGLY OPPOSED THE ADMISSION OF THE ADDITIONAL GROUND OF A PPEAL, BY POINTING OUT THAT THE SAME WAS NOT RAISED BEFORE EITHER OF THE LOWER AUTHORITIES. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND FORCE IN THE SUBMISSION OF THE ASSESSEE. THE ADDITIONAL GROUND O F APPEAL NOW SOUGHT TO BE RAISED BY THE ASSESSEE INVOLVES A QUESTION OF LAW O N FACTS WHICH ARE ON RECORD AND IT GOES TO THE ROOT OF THE MATTER, WHICH CAN BE ADJUDICATED WITHOUT RESORTING TO ANY FRESH INVESTIGATION OF FACTS. IN TERMS OF T HE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. V. CIT 229 ITR 383 (SC), THE AFORESAID GROUND RAISES A QUESTION OF LAW WITH THE FACTS ON RECORD IN THE ASSESSMENT PROCEEDINGS. THEREFORE, THE AFORE SAID ADDITIONAL GROUND OF APPEAL WAS ADMITTED FOR ADJUDICATION, AS ANNOUNCED IN THE COURSE OF THE HEARING, UPON WHICH THE RIVAL PARTIES ADVANCED THEI R RESPECTIVE ARGUMENTS ON THE MERITS. 8. THE LEARNED COUNSEL FOR THE ASSESSEE TOOK US THR OUGH THE ASSESSMENT ORDER TO POINT OUT THAT IN RESPONSE TO NOTICE ISSUE D UNDER SECTION 153A(A) OF THE ACT, ASSESSEE FILED A LETTER DATED 5.4.2004 STATING THAT THE RETURN FILED UNDER SECTION 139 OF THE ACT MAY BE TREATED AS A RETURN F ILED IN RESPONSE TO THE SAID NOTICE AND SUBSEQUENTLY VIDE LETTER DT 8.2.2004, CO PIES OF THE RETURN FILED UNDER SECTION 139 ALONGWITH THE INCOME EXPENDITURE ACCOUN T, CAPITAL ACCOUNT AND BALANCE SHEET WAS ALSO FILED. A REFERENCE WAS MADE TO DISCUSSION IN PARA 2.2 OF THE ASSESSMENT ORDER TO POINT OUT THAT NO NOTICE UN DER SECTION 143(2) OF THE ACT HAS BEEN ISSUED FOR THE CAPTIONED ASSESSMENT YEARS. THE ASSESSMENT WAS FINALIZED UNDER SECTION 153A(B) OF THE ACT VIDE ORD ER DATED 27.3.2006 WITHOUT ISSUANCE OF A NOTICE UNDER SECTION 143(2) OF THE AC T. IN THIS BACKGROUND, IT IS POINTED OUT THAT THE SAID ASSESSMENT IS UNTENABLE H AVING REGARD TO THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F ACIT V. HOTEL BLUE MOON 321 ITR 362 (SC). ITA NOS 1678-1679-PN-07,619-62 2-PN-08 RAMRATAN SONI, PUNE 5 9. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE, APPEARING FOR THE REVENUE, SUBMITTED THAT THE ASSESSEE HAD AP PEARED DURING THE ASSESSMENT PROCEEDINGS, THOUGH THERE IS NO MATERIAL IN THE ASSESSMENT RECORD TO SHOW ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. SINCE THE ASSESSEE WAS ALLOWED AN OPPORTUNITY TO APPEAR IN THE ASSESSM ENT PROCEEDINGS, NON- ISSUANCE OF A NOTICE UNDER SECTION 143(2) OF THE AC T WAS ONLY A TECHNICAL FAULT AND, THEREFORE, THE ASSESSMENT DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. THE IMPLICATIONS OF THE REQUIREMENT OF ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT TO FINALISE AN ASSESSMENT WAS THE SUBJECT MATTER OF CONSIDERATI ON OF THE HONBLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA). IN TH IS CONTEXT, THE HONBLE SUPREME COURT HELD AS UNDER: A READING OF THE PROVISION WOULD CLEARLY INDICATE, IN OUR OPINION, IF THE AO, IF FOR ANY REASON, REPUDIATES THE RETURN FILED BY THE ASSESSEE IN RESPONSE TO A NOTICE UNDER SECTION 158BC(A), THE AO MUST NECESSARILY ISSUE A N OTICE UNDER SECTION 143(2)OF THE ACT WITHIN THE TIME PRESCRIBED IN THE PROVISO TO SE CTION 143(2)OF THE ACT. WHERE THE LEGISLATURE INTENDED TO EXCLUDE CERTAIN PROVISIONS FROM THE AMBIT OF SECTION 158BC(B) IT HAS DONE SO SPECIFICALLY. THUS, WHEN SECTION 158BC( B) SPECIFICALLY REFERS TO (SIC-S 143(2)) APPLICABILITY OF THE PROVISO THERETO CANNOT BE EXCLUDED. WE MAY ALSO NOTICE HERE ITSELF THAT THE CLARIFICATION GIVEN BY CBDT IN ITS CIRCULAR NO 717 DT. 14 TH AUGUST 1995, HAS A BINDING EFFECT ON THE DEPARTMENT, BUT NOT ON THE COURT. THIS CIRCULAR CLARIFIES THE REQUIREMENT OF LAW IN RESPECT OF SERVICE OF NOTICE UNDER SUB-SECTION (2) OF SECTION 143 OF THE ACT. ACCORDINGLY, WE CONCLUDE EVEN FOR THE PURP OSE OF CHAPTER XIVB OF THE ACT, FOR THE DETERMINATION OF UNDISCLOSED INCOME FOR A BLOCK PERIOD UNDER THE PROVISIONS OF SECTION 158BC, THE PROVISIONS OF SECTION 142 AND SU B-SECTIONS (2) AND (3) OF SECTION 143 ARE APPLICABLE AND NO ASSESSMENT COULD BE MADE WITHOUT ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT. HOWEVER, IT IS CONTENDED BY SRI SHEKHAR, LEARNED COUNSEL FOR THE DEPARTMENT THAT IN VIEW OF THE EXPRESSION SO F AR AS MAY BE IN SECTION 153BC(B), THE ISSUE OF NOTICE IS NOT MANDATORY BUT OPTIONAL A ND ARE TO BE APPLIED TO THE EXTENT PRACTICABLE. IN SUPPORT O THAT CONTENTION, THE LEAR NED COUNSEL HAS RELIED ON THE OBSERVATION MADE BY THIS COURT IN DR PRATAP SINGHS CASE (SUPRA). IN THIS CASE, THE COURT HAS OBSERVED THAT SECTION 37(2) PROVIDES THAT THE PROVISIONS OF THE CODE RELATING TO SEARCHES, SHALL SO FAR AS MAY BE, APPLY TO SEARC HES DIRECTED U/S 37(2). READING THE TWO SECTIONS TOGETHER IT MERELY MEANS THAT THE METH ODOLOGY PRESCRIBED OR CARRYING OUT THE SEARCH PROVIDED IN SECTION 165 HAS TO BE GENERA LLY FOLLOWED. THE EXPRESSION SO FAR AS MAY BE HAS ALWAYS BEEN CONSTRUED TO MEAN THAT T HOSE PROVISIONS MAY BE GENERALLY FOLLOWED TO THE EXTENT POSSIBLE. THE LEARNED COUNSE L FOR THE RESPONDENT HAS BROUGHT TO OUR NOTICE THE OBSERVATIONS MADE BY THIS COURT IN T HE CASE OF MAGANLAL JAISWAL INDUSTRIES & ORS. (1989) 4 SCC 344, WHEREIN THIS CO URT WHILE DEALING WITH THE SCOPE AND IMPORT OF THE EXPRESSION AS FAR AS PRACTICABLE HAS STATED WITHOUT ANYTHING MORE THE EXPRESSION AS FAR AS POSSIBLE WILL MEAN THAT THE MANNER PROVIDED IN THE CODE FOR ATTACHMENT OR SALE OF PROPERTY IN EXECUTION OF A DE CREE SHALL BE APPLICABLE IN ITS ENTIRETY EXCEPT SUCH PROVISION THEREIN WHICH MAY NOT BE PRAC TICABLE TO BE APPLIED. THE CASE OF THE REVENUE IS THAT THE EXPRESSION SO FAR AS MAY BE APPLY INDICATES THAT IT IS NOT EXPECTED TO FOLLOW THE PRO VISIONS OF SECTION 142, SUB-SS.(2) AND (3) OF S.143 STRICTLY FOR THE PURPOSE OF BLOCK ASSE SSMENT. WE DO NOT AGREE WITH THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE REVENUE, SINCE WE DO NOT SEE ANY REASON TO RESTRICT THE SCOPE AND MEANING OF THE EXPRESSION S O FAR AS MAY BE APPLY. IN OUR VIEW, ITA NOS 1678-1679-PN-07,619-62 2-PN-08 RAMRATAN SONI, PUNE 6 WHERE THE AO IN REPUDIATION OF THE RETURN FIELD UND ER SECTION 158BC(A) PROCEEDS TO MAKE AN ENQUIRY, HE HAS NECESSARILY TO FOLLOW THE P ROVISIONS OF SECTION 142, SUB-SS. (2) AND(3) OF SECTION 143. FOLLOWING THE AFORESAID PARITY OF REASONING, THE IM PUGNED ASSESSMENT SUFFERS FROM A LEGAL INFIRMITY INASMUCH AS THE SAME HAS BEE N FINALIZED WITHOUT ISSUANCE OF A NOTICE UNDER SECTION 143(2) OF THE ACT. THE FA CTUM OF NON-ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT PRIOR TO COM PLETION OF ASSESSMENT, IS CLEARLY EMERGING FROM PARA 2.2 OF THE ASSESSMENT OR DER AND THE SAME HAS ALSO NOT BEEN DISPUTED BY THE LEARNED DEPARTMENTAL REPRE SENTATIVE DURING THE COURSE OF HEARING, WHEN A REFERENCE TO THE ASSESSME NT RECORDS WAS MADE AT THE TIME OF HEARING. AS PER THE HONBLE SUPREME COU RT, SERVICE OF NOTICE ON THE ASSESSEE UNDER SECTION 143(2) OF THE ACT WITHIN THE PRESCRIBED PERIOD OF TIME IS A PRE-REQUISITE FOR FRAMING THE BLOCK ASSESSMENT UN DER CHAPTER XIVB OF THE ACT. IN THE PRESENT CASE, THE DISCUSSION IN THE ASSESSME NT ORDER CLEARLY DEPICTS THAT NOTICE UNDER SECTION 143(2) OF THE ACT HAS NOT BEEN ISSUED AT ALL FOR THE ASSESSMENT YEAS UNDER CONSIDERATION, AND ACCORDINGL Y THE RATIO OF JUDGMENT IN THE CASE OF HOTEL BLUE MOON (SURA) CLEARLY APPLIES. ALTHOUGH, THE JUDGMENT IN THE CASE OF HOTEL BLUE MOON (SUPRA) RELATES TO AN A SSESSMENT UNDER CHAPTER XIV-B OF THE ACT, BUT THE PARITY OF REASONING WITH RESPECT TO SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT, IN OUR VIEW, SQUAR ELY APPLIES TO THE INSTANT SITUATION RELATING TO AN ASSESSMENT FINALIZED UNDER SECTION 153A(B) OF THE ACT. ACCORDINGLY, THE ASSESSMENT UNDER SECTION 153A(B) O F THE ACT DATED 27.3.2006 HAS BEEN FINALIZED WITHOUT ADHERING TO THE PRE-REQU ISITE OF SERVING THE NOTICE UNDER SECTION 143(2) OF THE ACT, THE SAME IS VITIAT ED, AND IS ACCORDINGLY SET ASIDE. 11. SINCE WE HAVE DECIDED THE PRELIMINARY GROUND ON THE ISSUE OF NOTICE SECTION 143(2) OF THE ACT IN FAVOUR OF THE ASSESSEE AND THE ENTIRE ASSESSMENT HAS BEEN SET ASIDE, THE OTHER GROUNDS OF APPEAL RAI SED BY THE ASSESSEE RELATING TO THE MERITS OF THE ADDITION HAVE BECOME ACADEMIC IN NATURE AND DOES ITA NOS 1678-1679-PN-07,619-62 2-PN-08 RAMRATAN SONI, PUNE 7 NOT REQUIRE ANY ADJUDICATION AT THIS STAGE. THUS, T HE APPEAL OF THE ASSESSEE IN ITA NO 1678/PN/07 FOR ASSESSMENT YEAR 1998-99 IS AL LOWED. 12. ON THE PARITY OF ABOVE REASONING, THE APPEALS F OR THE ASSESSMENT YEARS 1999-2000 TO 2003-04 ARE ALSO DECIDED IN THE LIKE M ANNER, SINCE THE FACTS AND CIRCUMSTANCES ARE IDENTICAL. 13. IN THE RESULT, THE CAPTIONED SIX APPEALS OF ASS ESSEE ARE ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 11TH DAY OF FEBRUARY, 2011. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G.S. PA NNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 11 TH FEBRUARY, 2011 COPY TO:- 1) MR RAMRATAN SONI, PUNE 2) ACIT CEN.R-2 PUNE 3) THE CIT (A)-1, PUNE 4) THE CIT-(CEN), PUNE. 5) THE DEPARTMENTAL REPRESENTATIVE, B BENCH, ITAT, PUNE BY ORDER TRUE COPY ASST. REGISTRAR, I.T.A.T., PUNE B