Shri Rajesh Kumar Manchhani, Jabalpur V. Income Tax Officer Ward 1(1), Jabalpur

ITA 172/JAB/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1424 (ITAT-JABALPUR)
• Duration Of Justice: 2 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 06-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: I B KHANDELDR
• Assessee Lawyers: SHRIH S MODH
• Keywords: Set aside
• Section: 143(3); 139(1); 153C

Judgement Text

ITA NO.172/JAB/2018 (AY 2010-11) RAJESH KUMARMANCHHANI V. ITO 1 | PAGE IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR SMC BENCH, JABALPUR [THROUGH VIRTUAL HEARING] BEFORE SHRI NRS GANESAN, JUDICIAL MEMBER ITA NO.172/JAB/2018 ASSESSMENT YEAR: 2010-11 SHRI RAJESH KUMAR MANCHHANI, PROP. M/S. AMAR DAS POLYMERS, KARMETA, KATANGI ROAD, JABALPUR (MP) (PAN AHJPM 8020G) VS. INCOME TAX OFFICER, WARD 1(1), JABALPUR (M.P.) (APPELLANT ) (RESPONDENT) APPELLANT BY SHRIH.S.MODH, ADV RESPONDENT BY SHRI I. B.KHANDEL,DR DATE OF HEARING 18/11/2020 DATE OF PRONOUNCEMENT 18/11/2020 ORDER PER NRS GANESAN, JM: 1. THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-1, JABALPUR DATED 04.07.2018 AND PERTAINS TO AY 2010-1 1. 2. SHRI H.S. MODH, LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE ORGINAL ASSESSMENT U/S. 143(3) WAS COMPLETED BY AN ORDER DA TED 18.03.2013. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICE U /S. 153C ON 25.3.2013 AND PASSED AN ORDER ON 28.2.2014. SINCE THE ASSESSING O FFICER PASSED AN ORDER U/S. 153C ON 28.02.2013, THE ORDER PASSED UNDER 143(3) O N 18.3.2013 CANNOT STAND IN THE EYES OF LAW. THEREFORE, IT IS NOT NON EST IN THE EYES OF LAW. 3. ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENTA TIVE SUBMITTED THAT A SMALL ADDITION WAS MADE IN THE ASSESSMENT U/S. 143( 3) AND THE SAME WAS CONFIRMED BY THE CIT(A). THEREFORE, HE IS PLACING H IS RELIANCE ON THE ITA NO.172/JAB/2018 (AY 2010-11) RAJESH KUMARMANCHHANI V. ITO 2 | PAGE OBSERVATION MADE BY THE LD. CIT(A) ON THE IMPUGNED ORDER. ON A QUERY FROM THE BENCH REGARDING THE DATE OF RECEIPT OF THE SEAR CH DOCUMENT BY THE ASSESSING OFFICER, THE LD. DR SUBMITTED THAT THE SA ID INFORMATION WAS NOT AVAILABLE ON RECORD, THEREFORE, THIS TRIBUNAL DIREC TED THE AO TO JOIN THE VIDEO CONFERENCE MEETING TODAY I.E. 18.11.2020. ACCORDING LY, MR. MAHESH SHUKLA,THE ASSESSING OFFICER JOINED THE VIDEO CONFERENCE AND H E CLARIFIED THAT PRESENTLY THE SEARCH MATERIAL WAS NOT AVAILABLE ON RECORD AND ON A FURTHER QUERY FROM THE BENCH THAT WHEN THE SEARCH MATERIAL IS NOT AVA ILABLE ON RECORD HOW THE NOTICE U/S. 153C WAS ISSUED, HE COULD NOT EXPLAIN T HE REASONS FOR ISSUING NOTICE U/S. 153C, PROPERLY. THE ASSESSING OFFICER FURTHER CLARIFIED THAT DUE TO BIFURCATION OF THE DEPARTMENT, THE SEARCH MATERIAL, WHICH WAS RECEIVED FROM THE OTHER OFFICER WAS NOT TRACEABLE IN SPITE OF HIS BEST EFFORT, THEREFORE, THE SEARCH MATERIAL IS NOT AVAILABLE ON RECORD. THE ASS ESSING OFFICER AS WELL AS THE DEPARTMENTAL REPRESENTATIVE COULD NOT CLARIFY THE D ATE OF RECEIPT OF THE SEARCH MATERIAL FROM THE AO OF THE SEARCHED PERSON. 4. HAVING HEARD THE LD. COUNSEL FOR THE ASSESSEE, D EPARTMENTAL REPRESENTATIVE AND THE ASSESSING OFFICER, THIS TRIB UNAL IS OF THE CONSIDERED OPINION THAT ON THE DATE OF SEARCH, IF THE ASSESSME NT PROCEEDINGS ARE PENDING, THAT WILL ABATE AND THE ASSESSING OFFICER HAS TO PA SS A CONSOLIDATED ASSESSMENT ORDER IN RESPECT OF THE RETURN FILED PRIOR TO DATE OF SEARCH AND ALSO ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH OPERA TION. IN CASE THE ASSESSMENT PROCEEDINGS ARE NOT PENDING ON THE DATE OF SEARCH, THEN TWO ORDERS CAN BE PASSED, ONE IN RESPECT OF RETURN FILE D U/S. 139(1) AND ANOTHER ORDER RELATING TO MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. IN RESPECT OF THE PERSON OTHER THAN THE SEARCHED PERSO N THE DATE OF RECEIPT OF SEARCH MATERIAL FROM THE OTHER OFFICER WOULD BE THE RELEVANT DATE. IN OTHER WORDS, THE DATE ON WHICH THE ASSESSING OFFICER RECE IVED THE DOCUMENT I.E. THE MATERIAL UNEARTHED DURING THE COURSE OF SEARCH FROM THE SEARCHED PERSON, THE ASSESSMENT PROCEEDINGS ARE PENDING, THEN THAT WILL ABATE, THE ASSESSING OFFICER HAS TO PASS SINGLE AND COMPOSITE ORDER UNDE R 153C. HOWEVER, ON THE DATE OF RECEIPT OF THE SEARCH MATERIAL, THE ASSESSM ENT PROCEEDINGS ARE NOT PENDING AND COMPLETED, THEN THE ASSESSING OFFICER H AS THE OPTION OF PASSING ANOTHER ORDER U/S. 153C WITH REFERENCE TO MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION.IN THAT CASE THE ORDER ALREADY PAS SED UNDER SECTION 143(3) ITA NO.172/JAB/2018 (AY 2010-11) RAJESH KUMARMANCHHANI V. ITO 3 | PAGE WOULD ALSO STAND AS IT IS. IN THIS CASE, THE ASSESS ING OFFICER ADMITTEDLY PASSED ORDER U/S. 143(3) ON 18.03.2013. THE ASSESSING OFFI CER HAS ALSO ISSUED NOTICE U/S. 153C ON 25.3.2013. THEREFORE, IT IS OBVIOUS TH AT THE ASSESSING OFFICER OUGHT TO HAVE RECEIVED THE SEARCHED MATERIAL FROM T HE INVESTIGATING WING OF THE DEPARTMENT OR FROM THE AO OF THE SEARCHED PERSO N 15 TO20 DAYS BACK BEFORE ISSUING NOTICE U/S. 153C. NOW THE DEPARTMENT IS WITHHOLDING THE BEST AVAILABLE DOCUMENT ON THE GROUND THAT IT IS NOT TRA CEABLE DUE TO BIFURCATION OF THE DEPARTMENT. THIS KIND OF ATTITUDE OF THE DEPART MENT CANNOT BE ENCOURAGED AT ALL. WHEN THE PROCEEDINGS ARE PENDING AND THE AS SESSEE IS CHALLENGING THE ASSESSMENT ORDER BEFORE THE CIT(A) AND BEFORE THIS TRIBUNAL, IT IS THE DUTY OF THE DEPARTMENT TO PROTECT ALL THE DOCUMENTS. THEREF ORE, THIS TRIBUNAL HAS NO OPTION EXCEPT TO DRAW ADVERSE INFERENCE FOR WITHHOL DING THE BEST AVAILABLE DOCUMENT WITH THE DEPARTMENT. IN OTHER WORDS, THE P RESUMPTION IS THAT THE SEARCHED MATERIAL AND THE APPRAISAL REPORT FROM THE INVESTIGATING WING OF THE DEPARTMENT OUGHT TO HAVE BEEN RECEIVED BY THE ASSES SING OFFICER BEFORE 18.03.2013 AND BEFORE PASSING THE ORDER U/S. 143(3) OF THE ACT. CONSEQUENTLY, THE ASSESSMENT PROCEEDINGS ARE PENDING ON THE DATE OF RECEIPT OF SEARCH MATERIAL FROM THE OTHER OFFICER AND THE SAME WOULD ABATE, HENCE, THE ASSESSING OFFICER HAS NO AUTHORITY TO PASS AN ORDER U/S. 143(3). THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ORDE R PASSED U/S. 143(3) ON 18.03.2013 CANNOT STAND IN THE EYE OF LAW. ACCORDIN GLY, THE ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND APPEAL OF THE A SSESSEE STANDS ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18TH NOVEMBER 2020. SD/- (N.R.S.GANESAN) JUDICIAL MEMBER DATED: 18/11/2020 AKS(P) //TRUE COPY//