The ITO, Ward-5(4), Surat V. Shri Rames D. Shah, Surat

ITA 2006/AHD/2014

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 1984 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-03-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 03-07-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: NISHIT SHAH
• Keywords: Document seized; Reason to believe; Documents seized; Reassessment proceedings
• Section: 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.2006/AHD/2014/SRT / ASSESSMENT YEAR: 2005-06 INCOME TAX OFFICER, WARD-5(4), SURAT. VS. SHRI RAMESH D. SHAH, FLAT NO.6-B, SIDDHSHILA APARTMENT, NANPURA, SURAT. [PAN: ACQPS 9804A] ( ' / APPELLANT) ( #$' /RESPONDENT) / ASSESSEE BY : SHRI SAURABH SOPARKAR, SR. ADVOCATE WITH SHRI NISHIT SHAH, C.A /REVENUE BY : SHRI VINOD KUMAR, SR. D.R /DATE OF HEARING : 26-10-2018 / DATE OF PRONOUNCEMENT : 26-10-2018 / ORDER PER C.M. GARG, JUDICIAL MEMBER: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, SURAT (CIT (A) FOR SHORT) DATED 08.04.2014 FOR THE ASSESSMENT YEAR (A.Y) 2005-06. 2. THE GROUNDS RAISED BY THE REVENUE READ AS FOLLOW S: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) HAS ERRED IN HOLDING THE NOTICE ISSUED U/ S.148 OF THE ACT AS VOID AB INITIO ON THE GROUNDS THAT THE AO FAILED TO RECORD IN THE REASON 2 ITA NO.2006/AHD/2014/SRT (A.Y: 2005-06) SHRI RAMESH D. SHAH THE PRIMA FACIE CONCLUSION THAT THE INCOME ESCAPING ASSESSMENT WAS LIKELY TO BE RS. 1,00,000/- OR MORE. THE LD.CIT(A) HAS FAILED TO APPRECIATE THAT IN THE REASON RECORDED IN WRITING, THE AO HAS MENTIONED THAT TRANSACTIONS RECORDED IN ANNEX B-L/1 AND B-L/2 WERE ADMITTED BY THE ASSESSEE TO BE NOT RECORDED IN HIS REGULAR BOOKS OF ACCOUNT FOR THE A.Y.2005-06. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) HAS OVERLOOKED THE FACT THAT IN THE STATE MENT RECORDED U/S.131 OF THE ACT ON 19.01.2011, THE ASSESSEE HAD ADMITTED THAT UNDISCLOSED TRANSACTIONS RECORDED IN ANNEX B-L/1 AND B-L/2 RELA TED TO HIS MONEY LENDING BUSINESS AND PROPERTY DALALI BUSINESS AND O N THE BASIS OF THESE IMPOUNDED DOCUMENTS MENTIONED IN THE REASON RECORDE D FOR ISSUING THE NOTICE U/S.148 OF THE ACT AN ADDITION OF RS.56,85,0 00/- AND RS.13,24,916/- WERE MADE IN THE ORDER U/S.143(3) R. W.S. 147 OF THE ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) HAS FAILED TO APPRECIATE THAT IN THE DETA ILED REASONS RECORDED IN WRITING BEFORE THE ISSUE OF NOTICE U/S.148, THE AO BY RELYING ON THE SEIZED DOCUMENTS, ANNEX B-L/1 AND B-L/2 AND STATEME NT RECORDED U/S.131 ON 19.02.2011 HAS INDICATED THAT INCOME WHI CH HAS ESCAPED ASSESSMENT WAS MORE THAN RS. 1,00,000/- 3. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE T RIBUNAL. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT THE LD.CIT(A) HAS ERRED IN HOLDING THE NOTICE ISSUED U/S.148 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) AS VOID AB INITIO ON THE GROUNDS THAT THE AO FAILED TO RECORD IN THE REASON THE PRIMA FACIE CONCLUSION THAT THE INCO ME ESCAPING ASSESSMENT WAS LIKELY TO BE RS. 1,00,000/- OR MORE. THE LD.CIT(A) HAS FAILED TO APPRECIATE THAT IN THE REASON RECORDED IN WRITING, THE AO HAS MENTIONED THAT TRANSACTIONS RECORDED IN ANNEX B-L/1 AND B-L/2 WERE ADMITTED BY THE ASSESSEE TO BE NOT RECORDED IN HIS REGULAR BOOKS OF ACCOUNT FOR THE A.Y.2005-06. THE LD. DR FURTHER SU BMITTED THAT THE LD.CIT(A) HAS OVERLOOKED THE FACT THAT IN THE STATE MENT RECORDED U/S.131 OF THE ACT ON 19.01.2011, THE ASSESSEE HAD ADMITTED THAT UNDISCLOSED 3 ITA NO.2006/AHD/2014/SRT (A.Y: 2005-06) SHRI RAMESH D. SHAH TRANSACTIONS RECORDED IN ANNEX B-L/1 AND B-L/2 RELA TED TO HIS MONEY LENDING BUSINESS AND PROPERTY DALALI BUSINESS AND O N THE BASIS OF THESE IMPOUNDED DOCUMENTS MENTIONED IN THE REASON RECORDE D FOR ISSUING THE NOTICE U/S.148 OF THE ACT AN ADDITION OF RS.56,85,0 00/- AND RS.13,24,916/- WERE MADE IN THE ORDER U/S.143(3) R.W.S. 147 OF THE ACT. THE LD. DR ALSO SUBMITTED THAT THE LD.CIT(A) HAS FAILED TO APPRECIA TE THAT IN THE DETAILED REASONS RECORDED IN WRITING BEFORE THE ISSUE OF NOT ICE U/S.148, THE AO BY RELYING ON THE SEIZED DOCUMENTS, ANNEX B-L/1 AND B- L/2 AND STATEMENT RECORDED U/S.131 ON 19.02.2011 HAS INDICATED THAT I NCOME WHICH HAS ESCAPED ASSESSMENT WAS MORE THAN RS. 1,00,000/-. TH E LD. DR SUBMITTED THAT THE LD. CIT(A), WHILE ALLOWING APPEAL OF THE A SSESSEE ON LEGAL GROUND, AS CONSIDERED THE REASONS RECORDED FOR AY 2004-05 A ND HIS CONCLUSION IN THE QUANTUM APPEAL OF AY 2004-05, WHEREIN THE ASSES SMENT HAS BEEN TREATED AS VOID AB INITIO BUT IN THE REASONS RECORD ED IN AY 2005-06, THE AO HAS SPECIFICALLY STATED THAT I HAVE REASON TO BELIEVE THAT THE ASSESSEE HAS CONCEALED HIS INCOME MORE THAN RS. 1,00,000/- O UT OF THE RELEVANT TRANSACTIONS W.R.T AY 2005-06 WITHIN THE MEANING OF S. 148 OF THE ACT . THEREFORE, THE LD. CIT(A) WAS NOT CORRECT IN FOLLOW ING HIS ORDER FOR AY 2004-05 FOR THE PRESENT AY 2005-06 HAVING DISTINCT AND DISSIMILAR FACTS AND CIRCUMSTANCES. THE LD. DR FINALLY SUBMITTED TH AT THE FINDINGS OF THE LD. CIT(A) MAY KINDLY BE SET ASIDE AND THE CASE MAY BE SENT TO THE FIRST APPELLATE AUTHORITY FOR ADJUDICATION OF GROUNDS AND MERITS. 4 ITA NO.2006/AHD/2014/SRT (A.Y: 2005-06) SHRI RAMESH D. SHAH 4. REPLYING TO THE ABOVE, THE LD. SR. COUNSEL, IN A LL FAIRNESS, CANDIDLY SUBMITTED THAT THE REASONS RECORDED BY THE AO FOR A Y 2004-05 AND 2005- 06 ARE QUITE DIFFERENT AND DISSIMILAR AND THE AO HA S COMPLIED WITH THE REQUIREMENT OF S. 147 OF THE ACT IN THE REASONS REC ORDED FOR AY 2005-06 BY MENTIONING THAT I HAVE REASON TO BELIEVE THAT THE ASSESSEE HAS CONCEALED HIS INCOME MORE THAN RS. 1,00,000/- OUT O F THE RELEVANT TRANSACTIONS W.R.T AY 2005-06 WITHIN THE MEANING OF S. 148 OF THE ACT . THE LD. SR. COUNSEL SUBMITTED THAT THE ASSESSEE HAS NO OBJECTION IF THE CASE IS RESTORED TO THE FILE OF THE LD. CIT(A) FOR ADJUDICATION OF OTHER GROUNDS ON MERITS. 5. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS AND COPIES OF THE REASONS RECORDED BY THE AO FOR AY 2004-05 (ASSE SSEES PAPER BOOK PAGE 2) AND REASONS RECORDED BY THE AO FOR AY 2005- 06 (ASSESSEES PAPER BOOK PAGE 52), WE CLEARLY OBSERVE THAT THE LD . AO HAS COMPLIED WITH THE REQUIREMENT OF VALID ASSUMPTION OF JURISDI CTION FOR INITIATION OF REASSESSMENT PROCEEDINGS BY MENTIONING IN THE LAST PART OF THE REASONS THAT I HAVE REASON TO BELIEVE THAT THE ASSESSEE HAS CON CEALED HIS INCOME MORE THAN RS. 1,00,000/- OUT OF THE RELEVANT TRANSACTIONS W.R.T AY 2005-06 WITHIN THE MEANING OF S. 148 OF THE ACT . THEREFORE, THE LD. CIT(A) WAS NOT CORRECT AND JUSTIFIED IN ALLOWING TH E LEGAL GROUND OF THE ASSESSEE ON THE REASONING ADOPTED BY HIM FOR AY 200 4-05 BY HOLDING THE NOTICE U/S. 148 OF THE ACT AS VOID AB INITIO THEREFORE, THE FINDINGS RECORDED 5 ITA NO.2006/AHD/2014/SRT (A.Y: 2005-06) SHRI RAMESH D. SHAH BY THE FIRST APPELLATE AUTHORITY ARE REVERSED AND C ONSEQUENTLY LEGAL GROUND OF THE ASSESSEE IS DISMISSED. FROM THE IMPUG NED FIRST APPELLATE AUTHORITY, IT IS CLEAR THAT THE LD. CIT(A) HAS ALLO WED APPEAL OF THE ASSESSEE ON LEGAL GROUND WITHOUT ANY ADJUDICATION ON THE OTH ER GROUNDS ON MERITS TREATING THE SAME AS INFRUCTUOUS. SINCE, BY THE EA RLIER PART OF THIS ORDER, WE HAVE REVERSED FINDINGS OF THE LD. CIT(A) WHICH G RATED RELIEF TO THE ASSESSEE THEREFORE, IT WOULD BE APPROPRIATE THAT TH E CASE BE RESTORE TO THE FILE OF LD. CIT(A) TO THE FIRST APPELLATE STAGE FOR ADJUDICATION OF OTHER GROUNDS RAISED BY THE ASSESSEE IN FORM NO.35 ON MER ITS. THEREFORE, WE DIRECT THE LD. CIT(A) TO ADJUDICATE THE GROUNDS OF THE ASSESSEE ON MERITS AFTER AFFORDING DUE OPPORTUNITY OF HEARING TO THE A SSESSEE AND WITHOUT BEING PREJUDICED FROM THE EARLIER FIRST APPELLATE O RDER. 6. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED WITH THE DIRECTIONS TO THE LD. CIT(A) AS NOTED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 6 TH OCTOBER, 2018. / SURAT ; DATED : 26 TH OCTOBER, 2018 EDN # & / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT ; 3. $ ( ) / THE CONCERNED CIT(A); 4. THE CONCERNED PRL. CIT; 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE . SD/- SD/- ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) /JUDICIAL MEMBER