Late. Jawaharlal @ Subashchand , Hyderabad V. Deputy Commissioner of Income Tax, Circle-9(1), Hyderabad

ITA 2081/Hyd/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9926 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 20-02-2020
• Assessment Year: misc
• Appeal Filed On: 08-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Invalid notice; Search and seizure; Block assessment; Set aside
• Section: 208; 158BC; 9(1); 9(1); 9(1); 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 208 1/HYD./201 7 BLOCK PERIOD : 1987 - 88 TO 1996 - 97 LATE SH. JAWAHARLAL @ SUBASHCHAND VS. DY.CIT, CIRCLE 9(1) REPRESENTED BY HIS WIFE: SMT.SUSHILA BAI HYDERABAD L/H OF LATE R JAWAHARLAL @ SUBASHCHAND HYDERABAD PAN: A AXPL0538M (APPELLANT) (RESPONDENT) FOR ASSESSEE : SH. C.P. RAMASWAMY, A.R. FOR REVENUE : S H. SUNIL KUMAR PANDEY, D.R. DATE OF HEARING : 2 0 / 02 / 2020 DATE OF PRONOUNCEMENT : 09 / 06 / 20 20 O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE BLOCK PERIOD 1987 - 88 TO 1996 - 97 AGAINST THE ORDER OF LD.CIT(A) - 7 , HYDERABAD DATED 30.11.2016 . 2. THE BRIEF FACTS OF THE CASE ARE THAT THERE WAS A SEARCH AND SEIZURE OPERATION U/ 132 OF THE INCOME TAX ACT, 1961 (THE ACT) ON THE ASSESSEE ON 13.11.1996 CONSEQUENT TO WHICH , A NOTICE U/S ITA NO.2081/HYD/2 0 17 LATE JAWAHARLAL @ SUBASHCHAND REPRESENTED BY HIS WIFE S MT.SUSHILA BAI L/H BLOCK PERIOD 1987 - 88 TO 1996 - 97 2 158BC OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE FILED T HE RETURN OF INCOME AND THE ASSESSMENT WAS COMPLETED. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER AS WELL AS VALIDITY OF THE NOTICE U/S 158BC OF THE ACT DIRECTLY BEFORE THE TRIBUNAL AS PER THE THEN EXISTING PROVISIONS OF THE ACT. IT WAS ARGUED THAT TH E MANDATORY PERIOD OF 15 DAYS TIME WAS NOT GIVEN TO THE ASSESSEE TO FILE HIS RETURN OF INCOME. THE TRIBUNAL , VIDE ORDER DATED 0 3.09.2014 HAS HELD THAT THE NOTICE U/S 158BC WA S AN INVALID NOTICE AND, ACCORDINGLY SET ASIDE THE ASSESSMENT ORDER. SUBSEQUEN TLY , WHILE PASSING THE CONSEQUENTIAL ORDER , THE AO HAS ACCEPTED THE INCOME RETURNED BY ASSESSEE IN HIS RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 158BC OF THE ACT AND ADJUSTED THE CASH FOUND AND SEIZED DURING THE COURSE OF SEARCH TOWARDS THE DEMA ND WHICH HAS ARISEN ON SUCH ACCEPTANCE OF THE RETURN OF INCOME OF THE ASSESSEE. AGAINST THIS CONSEQUENTIAL ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) STATING THAT THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 158 BC WAS OUT OF TIME AND WAS NON - EST IN LAW AND PARTICULARLY, SINCE THE NOTICE ISSUED U/S 158BC CALLING FOR THE RETURN HAS BEEN HELD TO BE IN VALID . THE CIT(A), HOWEVER, OBSERVED THAT THE ITAT HAS ONLY SET ASIDE THE ORDER OF THE AO AND HAS NOT ANNULLED THE SAME, AND, THEREFORE, THE IN COME RETURNED BY THE ASSESSEE IN RESPONSE TO NOTICE U/S 158BC OF THE ACT HAS TO BE BROUGHT TO TAX. WITH REGARD TO CHARGING OF INTEREST U/S 22 0(2), THE CIT(A) HELD THAT THE ASSESSEE HAS ADMITTED HIS LIABILITY TO PAY TAX AS PER RETURN FILED AND ONCE THE ADM ITTED TAX IS PAID, OTHER CONSEQUENCES FOLLOW I.E. CHARGING OF INTEREST ETC., CIT(A) ACCORDINGLY DISMISSED THE APPEAL. ITA NO.2081/HYD/2 0 17 LATE JAWAHARLAL @ SUBASHCHAND REPRESENTED BY HIS WIFE S MT.SUSHILA BAI L/H BLOCK PERIOD 1987 - 88 TO 1996 - 97 3 3. ASSESSEE IS IN SECOND APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS. 1. THE CIT(A) ERRED IN NOT DISPOSING THE GROUND THAT THE ORDER DATED 13.05.2015 PASSED BY THE LEARNED ASSESSING OFFICER IS CONTRARY TO LAW. 2. THE CIT(A) ERRED IN NOT DISPOSING THE GROUND THAT THE LEARNED ASSESSING OFFICER ERRED IN RAISING DEMAND AGAINST THE APPELLANT. 3. THE CIT(A) ERRED IN NOT DISPOSING THE GROUND THA T THE LEARNED ASSESSING OFFICER ERRED IN CHARGING INTEREST U/S 220(2). 4. THE CIT(A) ERRED IN NOT DISPOSING THE GROUND THAT THE LD. ASSESSING OFFICER FAILED TO APPRECIATE THAT THE RETURN FILED BY THE ASSESSEE WAS NON - EST IN LAW. CONSEQUENTLY, THE AMOUNT CO LLECTED FROM PD ACCOUNT AND OTHERWISE IS LIABLE TO BE REFUNDED TO THE APPELLANT WITH INTEREST. 5. THE CIT(A) ERRED IN NOT DISPOSING THE GROUND THAT THE ASSESSING OFFICER GRIEVOUSLY ERRED IN ASSUMING THAT THE RETURN FILED WAS IN RESPONSE TO THE NOTICE ULS 15 8BC WHEREAS IT WAS OUT OF TIME AND THE NOTICE ISSUED CALLING FOR THE RETURN IS HELD AS INFIRM. 6. THE CIT(A) ERRED IN HOLDING THAT THE LT.A.T. HAS NOT ANNULLED THE ORDER AND ONLY SET - ASIDE THE ORDER. 7. THE CIT(A) ERRED IN NOT DISPOSING THE GROUND THAT ANY O THER GROUND(S) THAT MAY BE URGED BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 3.1. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE APPEAL FILED BY ASSESSEE CHALLENGING THE VALIDITY OF NOTICE U/S 158 BC OF THE ACT, THE TRIBUNAL HAS CLEARLY HELD THAT SUCH A NOTICE IS INVALID FOR NOT GIVING SUFFICIENT TIME AS REQUIRED U/S 158BC. LD.C OUNSEL SUBMITTED THAT THE TRIBUNAL HAD FOLLOWED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF ACIT VS. HOTEL BLUE MOON REPORTED IN 321 ITR 362 FOR COMING TO SUCH A CONCLUSION. HE ARGUED THAT SINCE THE NOTICE ITSELF HAS BEEN HELD TO BE BAD IN LAW , ALL THE CONSEQUENTIAL PROCEEDINGS INCLUDING THE RETURN FILED BY ASSESSEE IN RESPONSE TO SUCH A NOTICE ARE ALSO INVALID AND NON - EST IN LAW. ITA NO.2081/HYD/2 0 17 LATE JAWAHARLAL @ SUBASHCHAND REPRESENTED BY HIS WIFE S MT.SUSHILA BAI L/H BLOCK PERIOD 1987 - 88 TO 1996 - 97 4 HE SUBMITTED THAT THOUGH THE ASSESSEE HAD IN FACT RAISED AN ALTERNATIVE GROUND BEFORE THE TRIBUNAL TO REFUND THE TA XES PAID IN RESPONSE TO NOTICE U/S 158BC, THE TRIBUNAL HAD REFUSED TO ADMIT AND ADJUDICATE THE SAID GROUND , BUT THE CIT(A) HAS ERRONEOUSLY HELD THAT THE TRIBUNAL HAS NOT ANNULLED THE ASSESSMENT ORDER AND HAD ONLY SET IT ASIDE. HE PRAYED THAT THE CASH FO UND AND SEIZED DURING THE COURSE OF SEARCH WHICH WAS ADJUSTED AGAINST THE DEMAND BE DIRECTED TO BE REFUNDED TO THE ASSESSEE IN ACCORDANCE WITH LAW. 3.2 . LD.DR ON THE OTHER HAND , SUPPORTED THE ORDER OF THE TRIBUNAL AND SUBMITTED THAT THE TRIBUNAL HAS ALREADY CONSIDERED ASSESSEES REQUEST AND HAS REJECTED THE SAME BY FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SHELLY PRODUCTS AND ANOTHER REPORTED IN 271 I TR 367 , THEREFORE, ASSESSEES APPEAL ON THE SAME ISSUE AGAIN IS NOT MAINT AINABLE. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL PLACED ON RECORD, WE FIND THAT PURSUANT TO SEARCH AND SEIZURE OPERATION, THE ASSESSEE WAS ISSUED A NOTICE U/S 158 BC OF THE ACT IN RESPONSE TO WHICH THE ASSESSEE HA D FILED HIS RETURN OF INCOME. THE NOTICE U/S 158 BC OF THE ACT HAS BEEN HELD TO BE INVALID BY THE TRIBUNAL. THE AO GOT THE JURISDICTION OVER THE ASSESSEE ONLY BY ISSUANCE OF THE NOTICE U/S 158 BC , AND SINCE SUCH NOTICE HAS BEEN HELD TO BE INVALID, ALL CONSEQUENTIAL PROCEEDINGS ALSO WILL BECOME INVALID. ITA NO.2081/HYD/2 0 17 LATE JAWAHARLAL @ SUBASHCHAND REPRESENTED BY HIS WIFE S MT.SUSHILA BAI L/H BLOCK PERIOD 1987 - 88 TO 1996 - 97 5 4.1. HOWEVER, SINCE THE ISSUE HAD ALREADY BEEN RAISED BY THE ASSESSEE BEFORE THE BENCH AND WAS NEGATIVE D BY THE BENCH BY HOLDING AS UNDER: 16. IN THE COURSE OF PRESENT PROCEEDINGS, ASSESSEE RAISED ADDITIONAL GROUND ON THE ISSUE THAT TAXES PAID SHOULD BE REFUNDED IN CASE THE ASSESSMENT IS HELD INVALID. THIS ADDITIONAL GROUND EVEN THOUGH STATED TO BE LEGAL GROUND, COULD NOT BE ADMITTED BY US AS IT INVOLVES EXAMINATION OF FACTS. AS SEEN FROM THE ASSESSMENT ORDER ASSESSEE HIMSELF HAS DECLARED INCOMES IN THE BLOCK ASSESSMENT. WHETHER ASSESSEE HAS PAID TAXES OR NOT REQUIRE EXAMINATION AS NOTHING IS AVAILABLE ON RECORD NOR ASSESSEE PLACED ANY S UBMISSIONS IN THIS REGARD WHETHER TAXES HAVE BEEN PAID BY HIM OR COLLECTED BY THE REVENUE. BE THAT AS IT MAY, THE HONBLE SUPREME COURT IN THE CASE OF CIT VS SHELLY PRODUCTS AND ANOTHER 261 ITR 367 HELD THAT ADMITTED TAX SHOULD NOT BE REFUNDED. IT WAS HELD THAT FAILURE OR INABILITY TO FRAME ANOTHER ASSESSMENT AFTER THE EARLIER ASSESSMENT IS SET ASIDE OR NULLIFIED IN APPROPRIATE PROCEEDINGS DOES NOT ENTITLE THE ASSESSEE TO CLAIM REFUND OF ADVANCE TAX AND TAX PAID ON SELF - ASSESSMENT, BECAUSE TO THAT EXTE NT THE ASSESSEE HAS ADMITTED HIS LIABILITY TO PAY TAX IN ACCORDANCE WITH THE LAW. IF THE ASSESSING AUTHORITY, ON AN EARLIER ASSESSMENT MADE BEING SET ASIDE OR NULLIFIED IN APPROPRIATE PROCEEDINGS, CANNOT MAKE A FRESH ASSESSMENT, IT AMOUNTS TO DEEMED ACCEPT ANCE OF THE RETURN OF INCOME FURNISHED BY THE ASSESSEE. IN SUCH A CASE THE ASSESSING AUTHORITY IS DENUDED OF ITS AUTHORITY TO VERIFY THE CORRECTNESS AND COMPLETENESS OF THE RETURN, WHICH AUTHORITY IT HAS WHILE FRAMING 13 IT(SS)A.NO.26/HYD/2009 MR. JAWAHARL AL @ SUBASHCHAND, HYDERABAD. A REGULAR ASSESSMENT. THE ASSESSING AUTHORITY MUST ACCEPT THE RETURN AS FURNISHED AND CANNOT IN ANY EVENT RAISE A DEMAND FOR PAYMENT OF FURTHER TAXES. ACCEPTING THE INCOME AS DISCLOSED IN THE RETURN FURNISHED BY THE ASSESSEE, I T MUST REFUND TO THE ASSESSEE ANY TAX PAID BY THE ASSESSEE IN EXCESS OF THE LIABILITY INCURRED BY HIM ON THE BASIS OF THE INCOME DISCLOSED. ITA NO.2081/HYD/2 0 17 LATE JAWAHARLAL @ SUBASHCHAND REPRESENTED BY HIS WIFE S MT.SUSHILA BAI L/H BLOCK PERIOD 1987 - 88 TO 1996 - 97 6 16.1. IN VIEW OF THIS, WE ARE OF THE OPINION THAT ADDITIONAL GROUND CANNOT BE ADMITTED. WE ALSO TAKE SUPPOR T ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF S.A. BUILDERS LTD. 289 ITR 26 IN SUPPORT THAT ADDITIONAL GROUND CANNOT BE ADMITTED WHEN THE RELEVANT FACTS ARE NOT ON RECORD AND REQUIRE EXAMINATION OF FACTS. WE ALSO GET SUPPORT IN THIS REGARD FROM THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SOUTHERN GROUP INDUSTRIES 300 ITR 113. IN VIEW OF THIS, ADDITIONAL GROUND RAISED REGARDING REFUND OF TAX IS REJECTED . 4.2 . THE RIGHT COURSE OF ACTION FOR THE ASSESSEE WOULD HAVE BEEN TO CHALLENGE THE ABOVE ORDER OF THE TRIBUNAL . BY NOT CHALLENGING IT, THE FINDING OF THE TRIBUNAL HAS BECOME FINAL AND THIS BENCH HAS NO AUTHORITY TO SET ASIDE THE FINDING OF EARLIER BENCH. THEREFORE, THE ASSESSEES APPEAL FAILS. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN OPEN COURT ON 09. 06. 2020 . SD/ - SD/ - (MOHAN ALANKAMONY) (P MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09.06.2020. * GMV ITA NO.2081/HYD/2 0 17 LATE JAWAHARLAL @ SUBASHCHAND REPRESENTED BY HIS WIFE S MT.SUSHILA BAI L/H BLOCK PERIOD 1987 - 88 TO 1996 - 97 7 COPY OF ORDER FORWARDED TO: 1. LATE JAWAHARLAL @ SUBASHCHAND, REPRESENTED BY L.R. SMT.S USHILA BAI (WIFE), C/O SRI G.V.JHABAKH, C.A. 157, P.M.SWAMY COLONY, 5 TH STREET, COIMBATORE . 2. DY.CIT, CIRCLE 9 (1), HYDERABAD. 3. PR. CIT - 7, HYDERABAD 4. ACIT, RANGE 9 , HYDERABAD 5 . THE D.R. ITAT HYDERABAD 6. GUARD FILE ITA NO.2081/HYD/2 0 17 LATE JAWAHARLAL @ SUBASHCHAND REPRESENTED BY HIS WIFE S MT.SUSHILA BAI L/H BLOCK PERIOD 1987 - 88 TO 1996 - 97 8 1. DRAFT DICTATED ON 21/02/2020 2. DRAFT PLACED BEFORE THE AUTHOR 25 /02/2020 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY SECOND MEMBER 5. APPROVED DRAFT COMES TO SRPS 09 /06/2020 6. KEPT FOR PRONOUNCEMENT 09/06/2020 7. FILE SENT TO BENCH CLERK