Kavyasheetal Infrastructure Pvt.Ltd, Nashik V. Income-tax Officer, Ward - 1(3), Nashik

ITA 1858/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5225 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-10-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 31-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P S SHINGTE
• Keywords: Search and seizure; Opportunity of cross examination
• Section: 69; 148; 6

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI , AM . / ITA NO. 1858 /P U N/201 7 / ASSESSMENT YEAR : 20 09 - 10 KAVYASHEETAL INFRASTRUCTURE PVT. LTD., FLAT NO.303, SR.NO.798/2, PANCHASEEL APART. BEHIND PRAKASH PETROL PUMP, NASHIK 422009 . / APPELLANT PAN: A A DC K5882A VS. THE INCOME TAX OFFICER, WAD 1 ( 3 ), NASHIK . / RESPONDENT / APPELLANT BY : SHRI P.S. SHINGTE / RESPONDENT BY : SHRI RAJESH GAWALI / DATE OF HEARING : 18 . 12 .201 8 / DATE OF PRONOUNCEMENT: 06 . 0 2 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 1 , NASHIK , DATED 17 . 0 5 .201 7 RELATING TO ASSESSMENT YEAR 20 09 - 10 AGAINST ORDER PASSED UNDER SECTION 1 43(3) R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 1858 /P U N/201 7 KAVYASHEETAL INFRASTRUCTURE PVT. LTD. 2 1 . ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN INITIATING THE REASSESSM ENT PROCEDURE U/S 147 MERELY O N THE BASIS OF SATISFACTION OF THIRD PARTY AND THERE IS NO INDEPENDENT SATISFACTION BY LEARNED ASSESSING OFFICER, THEREFORE ENTIRE ACTION OF REOPENING IS BAD IN LAW AND NEEDS TO BE QUASHED. 2 . ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN NOT PASSING OF SPEAKING ORDER AGAINST THE OBJECTION RAISED FOR REASONS RECORDED. THIS BEING A PATENT IRREGULARITY AND AS AND IN VIOLATION OF PRINCIPAL LAID DOWN BY HON'BLE SUPREME COURT IN CASE OF GKN DRIVESHAFT INDIA LTD, VS. ITO 259 ITR 19 (SC) THEREFORE ENTIRE RE - ASSESSMENT PROCEEDINGS ARE VOID - AB - INITIO AND DESERVES TO BE STRUCK DOWN. 3 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED ASSESSING OFFICER ERRED MA KING AN ADDITION OF RS.6,00,000/ - BY INVOKING PROVISIONS OF SECTION 69 BEING TRANSACTION OF PURCHASE OF SHARES BY TREAT I NG I T AS ACCOMMODATION ENTRY BY DISREGARDING APPELLANT CONTENTION AND DOCUMENTARY EVIDENCE BROUGHT ON RECORD, THE ACTION IS ARBITRARY AN D ENTIRE ADDITION DESERVES TO BE DELETED. 4 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN NOT PROVIDING THE COPY OF STATEMENT RECORDED OF ONE MR PRAVIN KUMAR JAIN AND ALSO FURTHER ERRED IN NOT GRANTIN G OPPORTUNITY OF CROSS EXAMINATION OF SUCH PERSON WHOSE STATEMENT IS USED AGAINST THE APPELLANT WHILE FRAMING THE ASSESSMENT ORDER THIS BEING A PATENT IRREGULARITY AND THEREFORE ENTIRE ACTION NEEDS TO BE QUASHED. 3. THE ASSESSEE HAS ALSO RAISED AN ADDITIO NAL GROUND OF APPEAL WHICH READS AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED ASSESSING OFFICER ERRED IN NOT PROVIDING THE COPIES OF REASONS RECORDED FOR REOPENING THE ASSESSMENT, THIS BEING PATENT IRREGULARITY THE ENTIRE PROCEEDINGS ARE VOID - AB - INITIO AND DESERVES TO BE STRUCK DOWN IN ITS ENTIRETY IN VIEW OF CONSISTENT VIEW TAKEN BY HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS. VSNL 21 TAXMANN.COM 53 (BOM) AND SUCH OTHER SUBSEQUENT CASES. 4. THE ASSESSEE HAS RAISE D SEVERAL GROUNDS OF APPEAL AGAINST RE - ASSESSMENT PROCEEDINGS INITIATED UNDER SECTION 147 OF THE ACT AND CONSEQUENT ADDITION MADE IN THE HANDS OF ASSESSEE OF 6 LAKHS UNDER SECTION 69 OF THE ACT. FURTHER, THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND OF APPEAL, WHEREIN IT HAS RAISED THE ISSUE THAT THE ASSESSING OFFICER HAS ERRED IN NOT PROVIDING COPIES OF REASONS RECORDED FOR REOPENING THE ASSESSMENT AND HENCE , ENTIRE ITA NO. 1858 /P U N/201 7 KAVYASHEETAL INFRASTRUCTURE PVT. LTD. 3 PROCEEDINGS WERE VOID - AB - INITIO . IN THIS REGARD, HE HAS PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. V IDESH SANCHAR NIGAM LTD. REPORTED IN 21 TAXMANN.COM 53 (BOM) . THE ADDITIONAL GROUND OF APPEAL RAISED BY A SSESSEE BEING PURELY LEGAL IN NATURE IS ADMITTED FOR ADJUDICATION AND WE PROCEED TO DECIDE THE SAME BEFORE ADDRESSING OTHER GROUNDS OF APPEAL RAISED BY ASSESSEE. 5. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING T OTAL INCOME OF 2,110/ - . THE ASSESSING OFFICER RECEIVED CERTAIN INFORMATION FROM DIT (INV), NAGPUR. CONSEQUENT TO SEARCH AND SEIZURE ACTION ON ONE SHRI PRAVINKUMAR JAIN AND HIS ASSOCIATES IN MUMBAI ON 01.10.2013, AS PER INFORMATION AVAILABLE WITH THE AS SESSING OFFICER, THE ASSESSEE HAD SOLD SHARES OF 6 LAKHS TO NON - GENUINE PARTY AND HENCE, THE ASSESSING OFFICER RECORDED REASONS FOR REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT AND ISSUED NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSING OFFIC ER RECORDED REASONS ON 30.03.2015 AND NOTICE UNDER SECTION 148 OF THE ACT WAS RECEIVED BY THE ASSESSEE ON 05.05.2015. IN RESPONSE THERETO, THE ASSESSEE FILED LETTER DATED 02.06.2015 THAT THE RETURN ORIGINALLY FILED MAY BE TREATED AS RETURN FILED IN RESPON SE TO NOTICE UNDER SECTION 148 OF THE ACT. THEREAFTER, THE ASSESSEE SOUGHT REASONS FOR REOPENING THE ASSESSMENT. HOWEVER, NO SUCH REASONS WERE SUPPLIED TO THE ASSESSEE. 6. THE HONBLE BOMBAY HIGH COURT IN CIT VS. IDBI LTD. (2016) 76 TAXMANN.COM 227 (B OM) AND ALSO IN CIT VS. VSNL (SUPRA) HAVE HELD THAT WHERE THE REASONS WERE RECORDED FOR REOPENING THE ASSESSMENT WHICH WERE NEVER COMMUNICATED TO THE ASSESSEE, THEN THE ASSESSMENT ORDER PASSED IN THE ABSENCE OF SUPPLY OF REASONS RECORDED FOR ISSUE OF REOPE NING NOTICE, THEN SUCH ITA NO. 1858 /P U N/201 7 KAVYASHEETAL INFRASTRUCTURE PVT. LTD. 4 RE - ASSESSMENT NOTICE WOULD BE WITHOUT JURISDICTION. THE HONBLE BOMBAY HIGH COURT IN CIT VS. VSNL (SUPRA) HAS FURTHER HELD THAT WHERE THE REASONS WERE FURNISHED ONLY AFTER COMPLETION OF ASSESSMENT, RE - ASSESSMENT ORDER COULD NOT BE UPHELD. APPLYING THE SAID PROPOSITION TO THE FACTS OF PRESENT CASE, WHERE THE PLEA OF ASSESSEE IS THAT IT HAS NOT RECEIVED REASONS RECORDED FOR REOPENING THE ASSESSMENT, THEN RE - ASSESSMENT PROCEEDINGS IN THE PRESENT CASE NEEDS TO BE QUASHED. ACCORDINGLY, WE HOLD SO. THE ADDITIONAL GROUND OF APPEAL RAISED BY ASSESSEE IS THUS, ALLOWED. IN VIEW THEREOF, THERE IS NO MERIT IN THE ISSUE RAISED ON MERITS, WHICH BECOMES ACADEMIC IN NATURE. 7 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED AS IND ICATED ABOVE. ORDER PRONOUNCED ON THIS 6 TH DAY OF FEBR UARY , 201 9 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWL A ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 6 TH FEBR UARY , 201 9 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE C IT(A) - 1 , NASHIK ; 4. THE PR. CIT - 1 , NASHIK ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE