Sameer Maheshwari, Indore V. ITO-3(3) , Indore

ITA 224/Ind/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7760 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 05-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MOURYA
• Assessee Lawyers: N D PATWA ADVS
• Keywords: Unexplained investment; Question of law
• Section: 143(3); 13; 22; 27; 148; 10

Judgement Text

[ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE SMC BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.224/IND/2019 ASSESSMENT YEAR: 2012-13 SHRI SAMEER MAHESHWARI J-29, MIG COLONY INDORE / VS. ITO - 3 ( 3 ) INDORE ( APPELLANT ) ( REVENUE ) P.A. NO. ALYPM9116E APPELLANT BY SHRI ASHISH GOYAL & SHRI N.D. PATWA, ADVS RE VENUE BY SHRI R.P. MOURYA , SR. DR DATE OF HEARING: 22.07.2020 DATE OF PRONOUNCEMENT: 27.07.2020 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER O F THE COMMISSIONER OF INCOME TAX APPEALS [CIT(A)]-I, I NDORE DATED 22.01.2019 PERTAINING TO THE ASSESSMENT YEAR 2012 - 13. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE:- 1.THE REASSESSMENT ORDER IS INVALID, BARRED BY LIMI TATION, ILLEGAL, BAD IN LAW, VOID-AB-INITIO AND THEREFORE L IABLE TO BE QUASHED. 2. THE LD. CIT(A) ERRED IN SUSTAINING THE REASSESSM ENT ORDER [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 2 WHICH IS INVALID, BARRED BY LIMITATION, ILLEGAL BAD IN LAW, VOID AB INITIO AND THEREFORE LIABLE TO BE QUASHED. 3. THE LD. CIT(A) ERRED IN CONFIRMING ADDITION OF RS.17,28,000/- TO THE TOTAL INCOME OF THE APPELLANT , TREATING THE SAME AS UNEXPLAINED INVESTMENT. 2. AT THE OUTSET OF HEARING, LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT HE DOES NOT WISH TO PRESS GROUND NO.1 & 2. GROUND NO.1 & 2 OF THIS APPEAL ARE THEREFORE, DISMISSE D. 3. GROUND NO.3 IS AGAINST THE CONFIRMING ADDITION OF RS.17,28,000/- AS UNEXPLAINED INVESTMENT. 4. THE FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT THE ASSESSEE HAD FILED HIS RETURN OF INCOME ON 23.03.3013 DECLARING TOTAL INCOME RS.4,01,470/-. IT IS OBSERVED BY THE ASSESSING OFFICER THAT ON VERIFICATION OF DETAILS SUBMI TTED WITH THE INCOME TAX DEPARTMENT DURING THE YEAR UNDER APPEAL. IT WAS NOTICED THAT THE ASSESSEE HAD MADE INVESTMENT OF RS.48,00,000/- IN THE PROJECT NAMELY G OLD LINK/GOLD GREEN WHILE PURCHASING A PLOT ON 21.10.201 1. AS PER THE SAID AGREEMENT OF SALE OF THAT PLOT THE AMOUN T [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 3 DISCLOSED IS RS.30,72,000/- AND ASSESSING OFFICER WAS OF THE VIEW THAT REMAINING AMOUNT WAS PAID BY THE ASSESSEE AS ON MONEY. FURTHER THE ASSESSING OFFICER WAS OF THE V IEW THAT THE INVESTMENT MADE BY THE ASSESSEE WAS NOT COMMENSURATE TO THE INCOME OFFERED FOR TAXATION FROM A.YS.2009-10 TO 2012-13. THEREFORE, THE CASE OF THE ASSESSEE WAS REOPENED BY ISSUING NOTICE U/S 148 OF TH E ACT. IN RESPONSE TO THE NOTICE AUTHORISED REPRESENT ATIVE OF THE ASSESSEE APPEARED AND FILED THE REQUISITE DETAILS. T HE ASSESSING OFFICER FRAMED ASSESSMENT U/S 143(3) R.W.S 1 47 OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED AS T HE ACT) VIDE ORDER DATED 27.11.2017, HEREBY, THE ASSESSING O FFICER MADE ADDITION OF RS.17,28,000/- BEING UNEXPLAINED INVESTMENT PURCHASE OF PLOT. 5. AGGRIEVED AGAINST THIS THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS CONFIRMED THE ADDITION. NOW THE ASSESSEE IS IN APPEAL [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 4 BEFORE THIS TRIBUNAL. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT UNDER THE IDENTICAL FACTS THE DIVISION BENCH OF THIS TRIBUNAL HAS RULED THAT IN THE LIGHT OF JUDGM ENT OF HON'BLE GUJARAT HIGH COURT AND COORDINATE BENCH OF TH E TRIBUNAL SIMPLY RELYING UPON THE DECLARATION MADE BEFOR E THE SETTLEMENT COMMISSION NO ADDITION CAN BE MADE. H E TOOK ME THROUGH THE DECISION OF THE TRIBUNAL IN THE CASE OF ANANTNADH CONSTRUCTION AND FARMS (P.) LTD. VS. DCIT (2017) 83 TAXMANN.COM 164 (MUMBAI). HE FURTHER REITERATED THE SUBMISSIONS MADE IN THE SYNOPSIS. THE SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED AS UNDER: BEING AGGRIEVED AND DIS-SATISFIED BY THE ADDITION, THE APPELLANT SUBMITS AS UNDER: 1. NO EVIDENCE FOR ON-MONEY: - DURING SEARCH, NO INCRIMINATING DOCUMENT, LOOSE PAPER, ANY HANDWRITTEN OR PRINTED D OCUMENT WAS FOUND SHOWING ON-MONEY PAYMENT BY ASSESSEE. IT WAS ONLY AFTER SEARCH, THE GARHA GROUP APPLIED BEFORE T HE SETTLEMENT COMMISSION, AND IN THE SPIRIT OF SETTLEM ENT, THEY MADE A DISCLOSURE IN AN EXCEL SHEET REGARDING ON-MO NEY PAYMENT. 2. THE DISPOSITION OF MAKING 'ON-MONEY' PAYMENT IS MER ELY A BALD ALLEGATION WHICH IS NOT CORROBORATED BY ANY EV IDENCE. THE EXCEL SHEET FILED BY THEM BEFORE SETTLEMENT COMMISS ION, WHICH [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 5 IS NOT CORROBORATED BY ANY EVIDENCE, HAS NO EVIDENT IARY VALUE. 2. EVIDENCE BEFORE SETTLEMENT COMMISSION CANNOT BE USE D AGAINST ASSESSEE: FURTHER, A DISCLOSURE BEFORE SETTLEMENT COMMISSION IS CONFIDENTIAL INFORMATION, AND CANNOT BE USED AGAINST THE ASSESSEE ITSELF; WHAT TO TALK ABOUT THI RD PARTY. THUS, THE DECLARATION MADE BY GARHA GROUP, WHICH WA S NOT BACKED BY ANY EVIDENCE, WHICH IS A CONFIDENTIAL INF ORMATION, AND JUST 'IN THE SPIRIT OF SETTLEMENT' CANNOT BE US ED AGAINST THE ASSESSEE. IT WAS HELD IN ANANTNADH CONSTRUCTIONS AND FARMS {2 017} 83 TAXMANN.COM 164 (MUM. TRIB.), AT PARA 13 AS UNDER: 'WE FIND THAT ASSESSEE HAS MADE DECLARATION AND FIL ED SOME INFORMATION BEFORE SETTLEMENT COMMISSION ADMITTED UNDER SECTION 2450 OF THE ACT AND IT CAN BE USED ONLY FOR LIMITED PURPOSE FOR SETTLEMENT OF TAX DISPUTE AND PASSING AN ORDER UNDE R SECTION 2450{4} OF THE INCOME TAX ACT AND NOT FOR OTHER PURPOSE WE FIND THAT ANY CONFIDENTIAL INFORMATION DISCLOSE D IN ANNEXURE TO THE SETTLEMENT APPLICATION BEFORE INCOME TAX SET TLEMENT COMMISSION CAN NEVER BE THE BASIS TO MAKE THE ADDIT ION.' 3. THIRD PARTY EVIDENCE NOT BINDING UNLESS CORROBORATE D: - FURTHER, IT IS A SETTLED LAW THAT ENTRIES IN BOOKS OF THIRD PERSON/ STATEMENT OF THIRD PERSON IS NOT BINDING ON THE ASS ESSEE. HERE, IN THE PRESENT CASE, THERE WERE NO ENTRIES IN THE B OOKS OF THIRD PERSON, OR STATEMENT OF THIRD PERSON, IT WAS ONLY A N EXCEL SHEET, WHERE THEY MADE CERTAIN DISCLOSURE. SUCH DIS CLOSURE WAS 'IN THE SPIRIT OF SETILEMENT', AS STATED BY ID ASSESSING OFFICER HIMSELF. IN CHIRANJI LAL STEEL ROLLING MILLS VS. CIT (1972) 84 ITR 222 {P&H}, CONSIDERING SECTION 27 OF THE EVIDENCE ACT, IT WAS HELD THAT STATEMENT OF CO-ACCUSED CANNOT BE READ IN EVID ENCE AGAINST ANOTHER CO-ACCUSED UNLESS AND UNTIL IT IS CORROBORA TED WITH INDEPENDENT MATERIAL. FURTHER RELIANCE IS PLACED ON M.K. BROTHERS 163 ITR 249 (RAJ.), WHERE IT WAS HELD THAT STATEMENT RECORDED U/S. 132{ 4} OR 131 OF THE THIRD PARTIES ARE BINDING UPON THEM IN THEIR OWN CASE ONLY [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 6 AND SAME CANNOT BE FOISTED UPON THE OTHER PARTIES I N THE ABSENCE OF SUFFICIENT CORROBORATORY MATERIAL. FURTHER RELIANCE IS PLACED ON FOLLOWING CASES: ACT VS PRABHAT OIL MILLS 52 TTL 533 (AHD); CHIRONJILAL STEEL ROLLING MILLS VS CIT 84 ITR 222 (P&H). CBI VS V.C. SHUKLA 1998 SCC 410; SHETH AKSHYA PUSHPAVANDAN 130 TT) 42 (AHD.); COMMON CAUSE (SC)~ FOLLOWING V.C. SHUKLA (SUPRA) 4. NOT CONFRONTED: - THE EXCEL SHEET ITSELF WAS NEVER PROVIDED TO THE ASSESSEE. IT WAS ONLY AT THIS STAGE, THEY PROVIDED A COPY OF SAME. ALTHOUGH THE EXCEL SHEET IS INCONSEQUENTIAL, STILL THE RESPONDENTS RELIED ON SAME, WITHOUT PROVIDING A COP Y OF THE SAME. IT IS PRAYED THAT, ONCE THE DEPARTMENT RELIED ON CERTAIN DOCUMENT, IT WAS INCUMBENT UPON THEM TO PROVIDE A C OPY OF THE SAME BEFORE MAKING ASSESSMENT, AND IF THE SAME HAD NOT BEEN PROVIDED, NO ADDITION CAN BE MADE BASED ON SAME. KISHINCHAND CHELLARAM 125 ITR 713 (SC) THUS, IT IS SUBMITTED THAT NO ON-MONEY WAS PAID BY THE ASSESSEE. THE ADDITION WHICH IS WITHOUT ANY BASIS, MAY KINDLY BE DELETED. 6. PER CONTRA LD. DR OPPOSED THE SUBMISSIONS AND SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOT DISPUTED THAT TH E ASSESSMENT WAS REOPENED ON THE GROUND THAT THE 3 RD PARTY HAD MADE AN APPLICATION BEFORE THE SETTLEMENT COMMISSION. THE GARHA GROUP OF INDORE HAD OFFERED/ [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 7 ESTIMATED THE RECEIPT OF ON MONEY FOR SUCH UNITS WAS ALSO SOLD. THE REVENUE HAS NO OTHER MATERIAL EXCEPT THE STATEMENT MADE BEFORE SETTLEMENT COMMISSION, I FIND F ORCE INTO THE CONTENTION OF THE ASSESSEE THAT THE ISSUE IS COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIB UNAL RENDERED IN THE CASE OF ANANTNADH CONSTRUCTION AND FARMS (P.) LTD. VS. DCIT WHEREIN THE TRIBUNAL HAS HELD AS UNDER: 13. WE FIND THAT ASSESSEE HAS MADE DECLARATION AN D FILED SOME INFORMATION BEFORE SETTLEMENT COMMISSION ADMIT TED UNDER SECTION 245D OF THE ACT AND IT CAN BE USED ONLY FOR LIMITED PURPOSE FOR SETTLEMENT OF TAX DISPUTE AND PASSING A N ORDER UNDER SECTION 245D(4) OF THE INCOME TAX ACT AND NOT FOR OTHER PURPOSE. THE ASSESSEE HAS MADE A DISCLOSURE AND SUC H DISCLOSURE ULTIMATELY ENDED IN SETTLEMENT ORDER UND ER SECTION 245D(4) OF THE ACT. THE DISCLOSURE CAME TO THE POSS ESSION OF AO. THE FACT THAT THE DISCLOSURE MADE UNDER SECTION 245 D(1) OF THE ACT EVEN IF CONSTRUCTED AS IF NO ORDER UNDER SECTIO N 245D(4) HAS BEEN PASSED IT WILL NOT GIVE A LICENSE TO THE AO TO USE THE CONFIDENTIAL INFORMATION DISCLOSED IN AN ANNEXURE T O THE APPLICATION OF THE SETTLEMENT COMMISSION. IF THE AP PLICATION IS TREATED AS NOT ADMITTED UNDER 245D(1) OF THE ACT, T HEN THE PROVISIONS ARE CLEAR THAT CONFIDENTIAL INFORMATION CAN NEVER BE PASSED ON TO THE AO NOR CAN IT BE USED IN EVIDENCE AGAINST THE ASSESSEE. SECTION 245D(4) HAS CLEARLY HELD THAT ADM ISSION OF ASSESSEE'S APPLICATION UNDER SECTION 245(1) WAS INC ORRECT. WE FIND THAT ANY CONFIDENTIAL INFORMATION DISCLOSED IN ANNEXURE TO THE SETTLEMENT APPLICATION BEFORE INCOME TAX SETTLE MENT COMMISSION CAN NEVER BE THE BASIS TO MAKE THE ADDIT ION. WE FIND THAT IN THE INSTANT CASE, THE AO HAS REOPENED THE ASSESSMENT UNDER SECTION 147. THEREAFTER, AO HAS NO T BROUGHT ANY EVIDENCE OR MADE ANY INQUIRY THAT ASSESSEE HAS EARNED ADDITIONAL INCOME OF RS.5 LAKHS AS BROKERAGE INCOME . [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 8 IN THE INSTANT CASE, AFTER REOPENING THE ASSESSMEN T ORDER, THE AO HAD NOT MADE ANY INQUIRY AND NOT EXAMINED THE MA TERIAL WHICH WAS BEFORE HIM THAT HOW THIS INCOME WAS DECLA RED BY THE ASSESSEE AND ADDITION HAS BEEN MADE SIMPLY RELY ING UPON THE DECLARATION MADE IN THE APPLICATION BEFORE THE SETTLEMENT COMMISSION UNDER SECTION 245D. THE AO WAS IN POSSES SION OF THE PAPER RELATING TO THE INCOME BUT IN ABSENCE OF ANY MATERIAL NO ADDITION CAN BE MADE. THE HON'BLE GUJARAT HIGH C OURT IN THE CASE OF MARUTI FABRICS (SUPRA) HAS HELD THAT WHATEV ER MATERIAL IS PRODUCED ALONG WITH APPLICATION BY THE ASSESSEE BEFORE SETTLEMENT COMMISSION OR RESULT OF INQUIRY HELD OR EVIDENCE RECORDED BY THE SETTLEMENT COMMISSION IN COURSE OF PROCEEDINGS BEFORE IT CAN BE USED BY THE ADJUDICATING AUTHORITY AS IF SAME HAD BEEN PRODUCED BEFORE SUCH CENTRAL EXCISE OFFICE R. ONCE APPLICATION OR PROCEEDINGS BEFORE SETTLEMENT COMMIS SION FAILS, CENTRAL EXCISE OFFICER IS REQUIRED TO ADJUDICATE EN TIRE PROCEEDINGS AND SHOW CAUSE NOTICE AND HON'BLE GUJAR AT HIGH COURT HAS HELD AS UNDER: 'CONSIDERING SUB-SECTION (2) OF SECTION 32L OF THE ACT, IN A CASE WHERE AN ORDER IS PASSED BY THE SETTLEMENT COMMISSI ON UNDER SUB-SECTION (1) OF SECTION 32L AND THEREAFTER ADJUD ICATING AUTHORITY IS REQUIRED TO ADJUDICATE THE CASE, THE C ENTRAL EXCISE OFFICER SHALL BE ENTITLED TO USE ALL THE MATERIALS AND OTHER INFORMATION PRODUCED BY THE ASSESSEE BEFORE THE SET TLEMENT COMMISSION OR THE RESULT OF INQUIRY HELD OR EVIDENC E RECORDED BY THE SETTLEMENT COMMISSION IN THE COURSE OF THE PROC EEDINGS BEFORE IT AS IF SUCH MATERIALS, INFORMATION, INQUIR Y AND EVIDENCE HAVE BEEN PRODUCED BEFORE SUCH CENTRAL EXCISE OFFIC ER OR HELD OR RECORDED BY HIM IN THE COURSE OF THE PROCEEDINGS BEFORE HIM ON FAIR READING OF SUB-SECTION (2) OF SECTION 32L O F THE ACT WHATEVER IS ADMITTED BY THE ASSESSEE WHILE SUBMITTI NG THE APPLICATION BEFORE THE SETTLEMENT COMMISSION SUBMIT TED UNDER SECTION 32E(1) OF THE ACT STRAIGHTWAY CANNOT BE SAI D TO BE ADMISSION ON BEHALF OF THE ASSESSING ACCEPTING THE LIABILITY. WHATEVER THE MATERIAL IS PRODUCED ALONGWITH THE APP LICATION AND/OR ANY MATERIAL AND/OR OTHER INFORMATION PRODUC ED BY THE [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 9 ASSESSEE BEFORE THE SETTLEMENT COMMISSION OR THE RE SULT OF THE INQUIRY HELD OR EVIDENCE RECORDED BY THE SETTLEMENT COMMISSION IN THE COURSE OF THE PROCEEDINGS BEFORE IT CAN BE U SED BY THE ADJUDICATING AUTHORITY AS IF SUCH MATERIALS, INFORM ATION, INQUIRY AND EVIDENCE HAS BEEN PRODUCED BEFORE SUCH CENTRAL EXCISE OFFICER, WHILE ADJUDICATING THE SHOW CAUSE NOTICE A ND THE PROCEEDINGS. IF THE CONTENTION ON BEHALF OF THE APP ELLANT IS ACCEPTED, IN THAT CASE, THERE IS NO QUESTION OF FUR THER ADJUDICATION BY THE CENTRAL EXCISE OFFICER WITH RES PECT TO THE AMOUNT ADMITTED BY THE ASSESSEE WHILE SUBMITTING TH E APPLICATION BEFORE THE SETTLEMENT COMMISSION SUBMIT TED UNDER SECTION 32E(1) OF THE ACT. ONCE THE APPLICATION OR PROCEEDINGS BEFORE THE SETTLEMENT COMMISSION FAILS, THE CENTRAL EXCISE OFFICER IS REQUIRED TO ADJUDICATE THE ENTIRE PROCEE DINGS AND SHOW CAUSE NOTICE. UNDER THE CIRCUMSTANCES, SO FAR AS PROPOSED QUESTION OF LAW NO.1 IS CONCERNED, THE PRESENT TAX APPEALS DESERVE TO BE DISMISSED AND ARE, ACCORDINGLY, DISMI SSED BY ANSWERING THE PROPOSED QUESTION OF LAW NO.1 AGAINST THE REVENUE.' 14. RESPECTFULLY FOLLOWING THE SAME, WE HOLD THAT H ON'BLE GUJARAT HIGH COURT'S JUDGMENT IN THE CASE OF MARUTI FABRICS (SUPRA) PERTAINS TO CENTRAL EXCISE BUT IF WE COMPAR E CENTRAL EXCISE UNDER SECTION 32E OF THE CENTRAL EXCISE ACT THIS SECTION IS PARALLEL TO SECTION 245C OF THE INCOME TAX ACT. ONE PRIMARY CONDITION MENTIONED IN SECTION 32E FOR FILING CENTR AL EXCISE SETTLEMENT PETITION IS 'A SHOW CAUSE NOTICE FOR REC OVERY OF DUTY ISSUED BY CENTRAL EXCISE OFFICER HAS BEEN RECEIVED' . IN INCOME TAX ACT SECTION 245C REQUIRES SOME PENDENCY OF PROCEEDINGS. THE CENTRAL EXCISE APPLICATION IS ALLOWED OR REJECT ED VIDE ORDER UNDER SECTION 32F(1). THIS SECTION IS PARALLEL TO S ECTION 245D(1). SECTION 32L GIVES THE POWERS AND PROCEDURE OF CENTR AL EXCISE SETTLEMENT COMMISSION. THIS SECTION IS SIMILAR TO SECTION 245F OF THE INCOME TAX ACT. SECTION 32L GIVES THE POWERS OF THE SETTLEMENT COMMISSION TO SEND THE CASE BACK TO THE CENTRAL EXCISE OFFICER. SECTION 32L READS AS UNDER: '32L(1) THE SETTLEMENT COMMISSION MAY, IF IT IS OF OPINION THAT ANY PERSON WHO MADE AN APPLICATION FOR SETTLEMENT U NDER [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 10 SECTION 32E HAS NOT CO-OPERATED WITH THE SETTLEMENT COMMISSION IN THE PROCEEDINGS BEFORE IT, SEND THE C ASE BACK TO THE CENTRAL EXCISE OFFICER HAVING JURISDICTION WHO SHALL THEREUPON DISPOSE OF THE CASE IN ACCORDANCE WITH PR OVISIONS OF THE ACT AS IF NO APPLICATION UNDER SECTION 32E HAD BEEN MADE. 32L(2) FOR THE PURPOSE OF SUB-SECTION (1), THE CENTRAL EXCISE OFFICER SHALL BE ENTITLED TO USE ALL THE MATERIALS AND OTHER INFORMATION PRODUCED BY THE ASSESSEE BEFORE THE SET TLEMENT COMMISSION IN THE COURSE OF THE PROCEEDINGS BEFORE IT AS IF SUCH MATERIALS, INFORMATION, INQUIRY AND EVIDENCE HAD BE EN PRODUCED BEFORE SUCH CENTRAL EXCISE OFFICER OR HELD OR RECOR DED BY HIM IN THE COURSE OF THE PROCEEDINGS BEFORE HIM.' 15. WE FIND THAT SECTION 245HA(1) OF THE INCOME TAX ACT LISTS SEVERAL CIRCUMSTANCES IN WHICH THE CASE BEFORE THE SETTLEMENT COMMISSION WOULD ABATE; WHEREAS IN SECTION 32L(1) N ON - COOPERATION OF THE PETITIONER IS THE ONLY GROUND. T HE CENTRAL EXCISE OFFICER DERIVES ITS POWER ITS POWER TO ASSES S SUCH ABATED PROCEEDING VIDE SECTION 32L(2) OF THE CENTRAL EXCISE ACT. THIS IS IDENTICAL TO POWERS VESTED WITH AN AO UNDER SECTION 245HA(2) AND 245HA(3) UNDER THE INCOME TAX ACT. IT IS THEREF ORE VERY CLEAR THAT THE PROVISIONS OF CENTRAL EXCISE SETTLEM ENT COMMISSION AND THAT FOR INCOME TAX SETTLEMENT COMMI SSION ARE IDENTICAL. THEREFORE, THE JUDGMENT OF HON'BLE GUJAR AT HIGH COURT IN THE CASE OF MARUTI FABRICS ALTHOUGH PERTAINING T O CENTRAL EXCISE SHOULD BE APPLIED TO CASES ABATED UNDER SECT ION 245HA OF THE INCOME TAX ACT ALSO. 16. THEREFORE, WE ARE OF THE VIEW THAT THE JUDGMENT OF HON'BLE GUJARAT HIGH COURT IS APPLICABLE TO THE FACTS OF TH E ASSESSEE'S CASE. WE FIND THAT HON'BLE GUJARAT HIGH COURT HAS H ELD THAT IF THE PETITION FILED BEFORE THE SETTLEMENT COMMISSION WHEREIN ASSESSEE HAS MADE DECLARATION BUT PROVES THAT ASSES SEE HAS NEITHER EARNED SUCH INCOME NOR ANY INCRIMINATING MA TERIAL WAS FOUND DURING THE SEARCH RELATING TO UNDISCLOSED INC OME THEN NO ADDITION CAN BE MADE. [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 11 17. WE HAVE ALSO GONE THROUGH THE JUDGMENT OF ITAT, MUMBAI IN THE CASE OF DOLAT INVESTMENTS LTD. (SUPRA) WHEREIN THE ITAT HAS SPECIFICALLY HELD IN PARA 22 WHICH READS AS UNDER: '22. THE FIRST ISSUE IS WHETHER THE CASE OF THE ASS ESSEE FOR ASSESSMENT YEAR 2005-06 WAS ADMITTED BY THE SETTLEM ENT COMMISSION UNDER SECTION 245D(1) OF THE ACT? ON THIS ISSUE, WE HAVE ALREADY SEEN THAT IN THE ORD ER DATED 30- 11-2007 UNDER SECTION 245D(4) OF THE ACT, THE SETTL EMENT COMMISSION HAS CLEARLY HELD THAT THE ASSESSEE FOR A SSESSMENT YEAR 2005-06 DOES NOT SATISFY THE CRITERIA OF OFFER ING INCOME ON WHICH AT LEAST AN INCOME-TAX PAYABLE SHOULD EXCEED RS. 1 LAKH. THE SETTLEMENT COMMISSION HAS FURTHER HELD THAT WHE N ADMITTING THE PETITION OF THE ASSESSEE FOR ASSESSME NT YEAR 2005-06, THIS ASPECT WAS OVERLOOKED AND THAT THEY A RE RECTIFYING THE APPARENT ERROR BY EXCLUDING ASSESSME NT YEAR 2005-06 OF THE ASSESSEE FROM THE PROCESS OF SETTLEM ENT. THUS, THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2005-0 6 CANNOT BE CONSIDERED TO HAVE BEEN ADMITTED FOR THE PROCESS OF SETTLEMENT UNDER SECTION 245D(1) OF THE ACT. CONSEQ UENTLY, THE CONFIDENTIAL INFORMATION DISCLOSED IN THE ANNEXURE TO THE SETTLEMENT APPLICATION COULD NOT HAVE BEEN USED BY THE ASSESSING OFFICER AGAINST THE ASSESSEE TO MAKE THE IMPUGNED ADDITION. THEREFORE, THE ADDITION TO THE INCOME MAD E BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 2005-06 WHICH IS BASED ONLY ON THE DISCLOSURE MADE IN THE ANNEXURE TO THE SETTLEMENT COMMISSION IS NOT VALID IN LAW. CONSEQUENTLY, THE I MPOSITION OF PENALTY ON THE BASIS OF SUCH INVALID ADDITION CANNO T BE SUSTAINED. IN VIEW OF THE ABOVE CONCLUSION, WE DO N OT WISH TO GO INTO THE OTHER ALTERNATE ARGUMENT OF THE LEARNED CO UNSEL FOR THE ASSESSEE REGARDING ABATEMENT OF PROCEEDINGS BEFORE SETTLEMENT COMMISSION AND USE OF CONFIDENTIAL INFORMATION DISC LOSED BY THE ASSESSEE IN SUCH PROCEEDINGS BY THE ASSESSING O FFICER IN MAKING ASSESSMENT.' 18. FROM THE ABOVE DECISION OF THE TRIBUNAL WHERE T HEY HAVE DISCUSSED THE SECTION 245C(1) AND SECTION 245D(I) A ND 245HA BY FOLLOWING OBSERVATION: [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 12 '20. THE FINANCE ACT, 2007 MADE CHANGES TO THE PROVISIONS FOR SETTLEMENT OF CASES CONTAINED IN CHAPTER XIX-A OF T HE INCOME- TAX ACT, 1961. ONE CHANGE INVOLVES INTRODUCTION OF A NEW CONCEPT OF ABATEMENT OF PROCEEDINGS BEFORE THE SETT LEMENT COMMISSION FOR WHICH PROVISIONS HAS BEEN MADE IN TH E NEWLY INSERTED SECTION 245HA RELEVANT PORTION WHEREOF REA DS THUS : '245HA. ABATEMENT OF PROCEEDING BEFORE SETTLEMENT COMMISSION. (1) WHERE.... (I) AN APPLICATION MADE UNDER SECTION 245C ON OR AFTER THE 1ST DAY OF JUNE, 2007 HAS BEEN REJECTED UNDER SUB-SECTI ON (1) OF SECTION 245D; (II) AN APPLICATION MADE UNDER SECTION 245C HAS NOT BEEN ALLOWED TO BE PROCEEDED WITH UNDER SUB-SECTION (2A) OR FURTHER PROCEEDED WITH UNDER SUB-SECTION (2D) OF SECTION 24 5D; (III) AN APPLICATION MADE UNDER SECTION 245C HAS BEEN DECLARED AS INVALID UNDER SUB-SECTION (2C) OF SECTI ON 245D; (IV) IN RESPECT OF ANY OTHER APPLICATION MADE UN DER SECTION 245C, AN ORDER UNDER SUB-SECTION (4) OF SECTION 245 D HAS NOT BEEN PASSED WITHIN THE TIME OR PERIOD SPECIFIED UND ER SUB- SECTION (4A) OF SECTION 245D, THE PROCEEDINGS BEFOR E THE SETTLEMENT COMMISSION SHALL ABATE ON THE SPECIFIED DATE. SPECIFIED DATE WOULD BE (I) IN RESPECT OF AN APP LICATION REFERRED TO IN SUB-SECTION (2A) OR SUB-SECTION (2D) , ON OR BEFORE THE 31ST DAY OF MARCH, 2008; (II) IN RESPECT OF AN APPLICATION MADE ON OR AFTER 1ST DAY OF JUNE, 2007 WITHIN NINE MONTHS FROM THE END OF THE MONTH IN WHICH THE APPLICATION WAS M ADE. (2) WHERE A PROCEEDING BEFORE THE SETTLEMENT COM MISSION ABATES, THE ASSESSING OFFICER OR AS THE CASE MAY BE ANY OTHER INCOME-TAX AUTHORITY BEFORE WHOM THE PROCEEDING AT THE TIME OF MAKING THE APPLICATION WAS PENDING, SHALL DISPOSE O F THE CASE IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT AS IF NO APPLICATION UNDER SECTION 245C HAD BEEN MADE. (3) FOR THE PURPOSES OF SUB-SECTION (2), THE ASS ESSING OFFICER OR AS THE CASE MAY BE, OTHER INCOME-TAX AUTHORITY, SHALL BE ENTITLED TO USE ALL THE MATERIAL AND OTHER INFORMAT ION PRODUCED BY THE ASSESSEE BEFORE THE SETTLEMENT COMMISSION OR THE RESULTS OF THE INQUIRY HELD OR EVIDENCE RECORDED BY THE SET TLEMENT [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 13 COMMISSION IN THE COURSE OF THE PROCEEDINGS BEFORE IT, AS IF SUCH MATERIAL, INFORMATION INQUIRY AND EVIDENCE HAD BEEN PRODUCED BEFORE THE ASSESSING OFFICER OR OTHER INCOME-TAX AU THORITY OR HELD OR RECORDED BY HIM IN THE COURSE OF THE PROCEE DINGS BEFORE HIM.' 21. THUS, WHEN A PROCEEDINGS BEFORE THE SETTLEMENT COMMISSION ABATES, IT REVERTS TO THE INCOME-TAX AUT HORITY BEFORE WHOM IT WAS PENDING AT THE TIME OF MAKING THE APPLI CATION FOR SETTLEMENT AND THE INCOME-TAX AUTHO-RITY HAS TO DIS POSE OF THE CASE IN ACCORDANCE WITH THE PROVISIONS OF THE ACT A S IF NO APPLICATION FOR SETTLEMENT HAD BEEN MADE AND FOR TH AT PURPOSE, IT IS ENTITLED TO USE ALL THE MATERIAL AND OTHER IN FORMATION PRODUCED BY THE ASSESSEE BEFORE THE SETTLEMENT COMM ISSION OR THE RESULTS OF THE INQUIRY HELD OR EVIDENCE RECORDE D BY THE SETTLEMENT COMMISSION IN THE COURSE OF THE PROCEEDI NGS BEFORE IT.' 19. WE FIND FROM THE ABOVE PROPOSITION OF LAW BY HO N'BLE GUJARAT HIGH COURT AND TRIBUNAL THAT SIMPLY RELYING UPON THE DECLARATION MADE BEFORE THE SETTLEMENT COMMISSION N O ADDITION CAN BE MADE. IN THIS GROUP CASE, THE SEARCH WAS CON DUCTED IN THE BUSINESS PREMISES OF LODHA GROUP AND SUBSEQUENT TO SEARCH ACTION ASSESSEE COMPANY ALONG WITH OTHER COM PANIES OF LODHA GROUP FILED A PETITION UNDER SECTION 245C(1) OF THE ACT BEFORE SETTLEMENT COMMISSION. THE ASSESSEE HAS OFFE RED ADDITIONAL INCOME OF RS.5 LAKHS TOWARDS THE LAND BR OKERAGE INCOME. THIS OFFER WAS MADE FOR MAINTAINABILITY OF PETITION BEFORE SETTLEMENT COMMISSION AS STATED IN CLAUSE (I ) AND CLAUSE (IA) OF SECTION 245C(1) OF THE ACT. WE ARE OF THE V IEW THAT AFTER REOPENING OF THE ASSESSMENT ORDER NO ADDITION CAN B E MADE ON THE BASIS OF INCOME OFFERED BY THE ASSESSEE BEFORE SETTLEMENT COMMISSION. WE FIND THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH ACTION SUBSTANTIATING T HAT ASSESSEE HAS ACTUALLY EARNED UNDISCLOSED INCOME. THEREFORE, JUST BECAUSE ASSESSEE HAS OFFERED ADDITIONAL INCOME BEFO RE SETTLEMENT COMMISSION, NO ADDITION CAN BE MADE WITH OUT BASIS. HENCE, THE ADDITION MADE BY THE AO AND LD. CIT (A) IS DELETED. [ITA NO.224/IND/2019] [SAMEER MAHESHWARI ] 14 8. THEREFORE, RESPECTFULLY, FOLLOWING THE DECISION OF THE DIVISION BENCH OF THIS TRIBUNAL, I HEREBY DIRECT THE ASSESSING OFFICER TO DELETE THIS ADDITION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER WAS PRONOUNCED IN THE OPEN COURT ON 27 .07. 2020. SD/- (KU L BHARAT) JUDICIAL MEMBER INDORE; DATED : 27/07/2020 PATEL/PS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE