DCIT CC-8(4), Mumbai V. KALYANJI VELJI HUF, MUMBAI

ITA 2337/MUM/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 3007 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2014-2015
• Appeal Filed On: 13-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Document seized; Documents seized
• Section: 148; 143(3); 153A; 48; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H” MUMBAI BEFORE SHRI KULDIP SINGH (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 2337/MUM/2021 Assessment Year: 2014-15 DCIT Cent. Circle-8(4), Room No. 659, 6 th floor, Aayakar Bhavan, M.K. Road, Mumbai-400020. Vs. M/s Kalyanji Velji HUF Plot No. 368, Vishrani Niwas, Bhandarkar Road, Matunga C.R. Mumbai-400019. PAN No. AAAHK 1097 D Appellant Respondent Revenue by : Mr. Jasdeep Singh, CIT-DR Assessee by : None Date of Hearing : 30/05/2022 Date of pronouncement : 26/08/2022 ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue is directed against the order dated 15.09.2021 passed by the Ld. Commissioner of Income-Tax (Appeals)-50, Mumbai [in short ‘the Ld. CIT(A)] for assessment year 2014-15, raising following grounds: 1. On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax(Appeals)-50, Mumbai, was erred in holding that the assessment proceeding have been framed u/s 153C r.w.s. 153A without appreciating that in absence of a satisfaction by AO u/s 153A that seized material belonged to assessee, no proceedings u/s 153C could have been legally initiated. 2. 2. On the facts and circumstances of the case and in law, the learned Commissioner of Income was erred in alluding to the fact that once the conditions of issue of notice u/s 153C were not satisfied, the proceedings u/s 147 could n undisclosed income based on a seized document. 3. On the facts and circumstances of the case and in law, the learned Commissioner of Income was not correct in ignoring the decision of Hon'ble High Court in the case of Shirish Madhukar Dalvi 287 ITR 242(Bom.) section 48 is a substantive provision whereas section 153C is procedural section. Both sections definitely stand on different footings. 4. On the facts and circumstances of the case an learned Commissioner of Income considered the decision of the Income Tax Appellate Tribunal Ahmedabad in the case of Shri Shailesh S. Patel, ITA No.3063/Ahd/2016, Palanpur Vs The Income Tax Officer, Ward-5 on 31 Augu 5. The appellant craves leave to amend or alter any ground and/ or add new grounds which may be necessary. M/s Kalyanji Velji HUF was erred in holding that the assessment proceeding have been framed u/s 153C r.w.s. 153A without appreciating that in absence of a satisfaction by AO u/s 153A that seized material belonged to assessee, no proceedings u/s 153C could have been legally initiated. 2. On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax(Appeals)-50, Mumbai, was erred in alluding to the fact that once the conditions of issue of notice u/s 153C were not satisfied, the proceedings u/s 147 could not be repelled for making assessment of undisclosed income based on a seized document. On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax(Appeals)-50, Mumbai, was not correct in ignoring the decision of Hon'ble High Court in the case of Shirish Madhukar Dalvi 287 ITR 242(Bom.) section 48 is a substantive provision whereas section 153C is procedural section. Both sections definitely stand on different footings. On the facts and circumstances of the case and in law, the learned Commissioner of Income-tax(Appeals)-50 has not considered the decision of the Income Tax Appellate Tribunal Ahmedabad in the case of Shri Shailesh S. Patel, ITA No.3063/Ahd/2016, Palanpur Vs The Income Tax Officer, 5 on 31 August, 2018 in this regard. The appellant craves leave to amend or alter any ground and/ or add new grounds which may be necessary. M/s Kalyanji Velji HUF ITA No. 2337/M/2021 2 was erred in holding that the assessment proceedings should have been framed u/s 153C r.w.s. 153A without appreciating that in absence of a satisfaction by AO u/s 153A that seized material belonged to assessee, no proceedings u/s 153C could 2. On the facts and circumstances of the case and in law, the 50, Mumbai, was erred in alluding to the fact that once the conditions of issue of notice u/s 153C were not satisfied, the proceedings u/s ot be repelled for making assessment of On the facts and circumstances of the case and in law, the 50, Mumbai, was not correct in ignoring the decision of Hon'ble Bombay High Court in the case of Shirish Madhukar Dalvi 287 ITR 242(Bom.) section 48 is a substantive provision whereas section 153C is procedural section. Both sections definitely d in law, the 50 has not considered the decision of the Income Tax Appellate Tribunal - Ahmedabad in the case of Shri Shailesh S. Patel, ITA No.3063/Ahd/2016, Palanpur Vs The Income Tax Officer, The appellant craves leave to amend or alter any ground and/ 2. At the outset, the Ld. Departmental Representative (DR) submitted that this appeal has been filed with a delay of 14 days. submitted that the period of the delay is covered Hon’ble Supreme Court in Miscellaneous Application No. 665 of 2021 in SMW(C) No. 3 of 2020 extended the limitation for instituting appeal before the Tribunal till 3 is no delay in filing the present appeal. The Ld. Authorized Representative (AR) of the assessee did not object for condoning the delay in filing the appeals. 3. We have heard the rival submissions of the parties on the issue of condonation of the delay in filing the appeal decision of the Hon’ble Supreme Court dated 23.09.2021 (supra), wherein the Hon’ble Supreme Court has extended period of limitation for any limitation was due M/s Kalyanji Velji HUF At the outset, the Ld. Departmental Representative (DR) submitted that this appeal has been filed with a delay of 14 days. he period of the delay is covered by the decision of Hon’ble Supreme Court in Miscellaneous Application No. 665 of SMW(C) No. 3 of 2020, wherein Hon’ble Supreme Court extended the limitation for instituting suit or proceeding appeal before the Tribunal till 3 rd October 2021 and therefore there is no delay in filing the present appeal. The Ld. Authorized Representative (AR) of the assessee did not object for condoning the delay in filing the appeals. d the rival submissions of the parties on the issue of condonation of the delay in filing the appeal. decision of the Hon’ble Supreme Court dated 23.09.2021 (supra), ble Supreme Court has extended period of suit, application or proceedings wherever was due between the period from M/s Kalyanji Velji HUF ITA No. 2337/M/2021 3 At the outset, the Ld. Departmental Representative (DR) submitted that this appeal has been filed with a delay of 14 days. He by the decision of Hon’ble Supreme Court in Miscellaneous Application No. 665 of wherein Hon’ble Supreme Court has proceedings including October 2021 and therefore there is no delay in filing the present appeal. The Ld. Authorized Representative (AR) of the assessee did not object for condoning the d the rival submissions of the parties on the issue In view of the decision of the Hon’ble Supreme Court dated 23.09.2021 (supra), ble Supreme Court has extended period of application or proceedings wherever 15.03.2020 to 03.10.2021. Since, the delay in the present appeal is during the said period where the Hon’ble Supreme Court has extended the limitation, therefore, t 4. Briefly stated, the facts of the case are that the assessee filed its return of income for the year under consideration on 04.11.2014 declaring total income of certain documents seized during the search action at the premises of Mr. Pankaj Goshar on 10. reopened by way of issue of notice u/s 148 of the Income Tax Act, 1961 (in short ‘the Act’) dated 27.11.2018. The assessment was completed after making certain additions as discussed in the assessment order dated 31.12.2019 passed u/s 143(3) r.w.s. 147 of the Act. On further appeal, the assessee challenged legality of the assessment completed u/s 147 of the Act. According to the assessee, the addition has been made based on the documents seized during the search proceedings in the case of another person and therefore, M/s Kalyanji Velji HUF 03.10.2021. Since, the delay in the present appeal is during the said period where the Hon’ble Supreme Court has extended the , therefore, the delay in filing the appeal is condoned. Briefly stated, the facts of the case are that the assessee filed its return of income for the year under consideration on 04.11.2014 declaring total income of ₹5,650/-. Subsequently, on the basis of s seized during the search action at the premises of Mr. Pankaj Goshar on 10.09.2015, the case of the assessee was reopened by way of issue of notice u/s 148 of the Income Tax Act, 1961 (in short ‘the Act’) dated 27.11.2018. The assessment was ter making certain additions as discussed in the assessment order dated 31.12.2019 passed u/s 143(3) r.w.s. 147 of the Act. On further appeal, the assessee challenged legality of the assessment completed u/s 147 of the Act. According to the assessee, ddition has been made based on the documents seized during the search proceedings in the case of another person and therefore, M/s Kalyanji Velji HUF ITA No. 2337/M/2021 4 03.10.2021. Since, the delay in the present appeal is during the said period where the Hon’ble Supreme Court has extended the y in filing the appeal is condoned. Briefly stated, the facts of the case are that the assessee filed its return of income for the year under consideration on 04.11.2014 . Subsequently, on the basis of s seized during the search action at the premises he case of the assessee was reopened by way of issue of notice u/s 148 of the Income Tax Act, 1961 (in short ‘the Act’) dated 27.11.2018. The assessment was ter making certain additions as discussed in the assessment order dated 31.12.2019 passed u/s 143(3) r.w.s. 147 of the Act. On further appeal, the assessee challenged legality of the assessment completed u/s 147 of the Act. According to the assessee, ddition has been made based on the documents seized during the search proceedings in the case of another person and therefore, in view of amended provisions of section 153C of the Act, the reassessment should have been completed u/s 153C of the Act rather than section 148 of the Act proceedings completed u/s 148 of the Act are invalid. The Ld. CIT(A) following the finding of the Tribunal in the case of assessee’s own case for assessment years 2010 reassessment made by the Assessing Officer. is in appeal before the Tribunal. 4.1 Despite notifying none appeared on behalf of the assessee and therefore, the appeal is adjudicated hearing arguments of the Ld. DR. 5. We find that the only the re-assessment proceedings should have been initiated in the case u/s 147 of the Act or u/s 153C of the Act the assessee contended that 153C have been amended and according to which if any document M/s Kalyanji Velji HUF in view of amended provisions of section 153C of the Act, the reassessment should have been completed u/s 153C of the Act than section 148 of the Act, thus, the reassessment proceedings completed u/s 148 of the Act are invalid. The Ld. CIT(A) following the finding of the Tribunal in the case of assessee’s own case for assessment years 2010-11 to 2013-14 reassessment made by the Assessing Officer. Aggrieved is in appeal before the Tribunal. Despite notifying none appeared on behalf of the assessee and therefore, the appeal is adjudicated ex-parte qua the assessee after nts of the Ld. DR. We find that the only issue-in-dispute in the case is whether assessment proceedings should have been initiated in the case u/s 147 of the Act or u/s 153C of the Act. Before the Ld. CIT(A), the assessee contended that w.e.f. 01.06.2015 provisions of section 153C have been amended and according to which if any document M/s Kalyanji Velji HUF ITA No. 2337/M/2021 5 in view of amended provisions of section 153C of the Act, the reassessment should have been completed u/s 153C of the Act , the reassessment proceedings completed u/s 148 of the Act are invalid. The Ld. CIT(A) following the finding of the Tribunal in the case of assessee’s own 14, annulled the Aggrieved, the Revenue Despite notifying none appeared on behalf of the assessee and qua the assessee after dispute in the case is whether assessment proceedings should have been initiated in the . Before the Ld. CIT(A), .06.2015 provisions of section 153C have been amended and according to which if any document seized pertains to or any information contained therein relates to a person other than the person searched case of the other person has t provisions of section 153A r.w.s. 153C of the Act. Whereas the contention of the Revenue 153C(1)(b), the first condition of to the other person, shou document in the form of printout of the mobile phone seized from Mr. Pankaj Goshar did not pertains to the assessee and therefore, requisite of section 153C are not satisfied and hence the Assessing Officer has rightly initiated proceedings u/s 147 of the Act. We find that identical issue was in existence in the assessment years 2010 11 to 2013-14 in the case of the assessee. The Ld. CIT(A) has followed the finding of the Tribunal wherein it is held that appropriate action in the case of the assessee should have been M/s Kalyanji Velji HUF seized pertains to or any information contained therein relates to a person other than the person searched, then reassessment in the case of the other person has to be completed in accordance with provisions of section 153A r.w.s. 153C of the Act. Whereas the contention of the Revenue before us is that for invoking section the first condition of the document seized must pertains , should be satisfied. According to the Ld. DR, the document in the form of printout of the mobile phone seized from Mr. Pankaj Goshar did not pertains to the assessee and therefore, requisite of section 153C are not satisfied and hence the Assessing rightly initiated proceedings u/s 147 of the Act. We find that identical issue was in existence in the assessment years 2010 14 in the case of the assessee. The Ld. CIT(A) has followed the finding of the Tribunal wherein it is held that iate action in the case of the assessee should have been M/s Kalyanji Velji HUF ITA No. 2337/M/2021 6 seized pertains to or any information contained therein relates to a then reassessment in the o be completed in accordance with provisions of section 153A r.w.s. 153C of the Act. Whereas the that for invoking section the document seized must pertains According to the Ld. DR, the document in the form of printout of the mobile phone seized from Mr. Pankaj Goshar did not pertains to the assessee and therefore, requisite of section 153C are not satisfied and hence the Assessing rightly initiated proceedings u/s 147 of the Act. We find that identical issue was in existence in the assessment years 2010- 14 in the case of the assessee. The Ld. CIT(A) has followed the finding of the Tribunal wherein it is held that iate action in the case of the assessee should have been taken u/s 153C of the Act. The relevant finding of the Ld. CIT(A) is reproduced as under: “7.3.12 In view of above discussions, and respectfully following the above referred decision of the Hon'ble I appellant's own case for AYS 2010 been held that the Ld. AO was not justified in taking action u/s 147 of the Act as in the present case, the provisions of sec 153C of the Act were applicable and the Ld. AO ough action therein and the fact that the present assessment year 2014-15 falls within said period of six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made, as the search in case of Goshar Group was conducted on 10.09.2015, I am of the considered opinion that in the present case, the provisions of sec 153C of the Act were applicable and the Ld. AO was not justified in assuming jurisdiction u/s 147 of the Act and consequently framing assessment order u/s 143(3) rws 147 of the Act is bad in law and liable to be annulled. Therefore, the impugned assessment order u/s 143(3) rws 147 of the Act is annulled and accordingly, the impugned additions would not survive. ALLOWED.” 5.1 Since, we find that the Ld. CIT(A) has followed the binding precedent in the case of the assessee itself. M/s Kalyanji Velji HUF taken u/s 153C of the Act. The relevant finding of the Ld. CIT(A) is reproduced as under: 7.3.12 In view of above discussions, and respectfully following the above referred decision of the Hon'ble ITAT, Mumbai in appellant's own case for AYS 2010-11 to 2013-14, wherein it has been held that the Ld. AO was not justified in taking action u/s 147 of the Act as in the present case, the provisions of sec 153C of the Act were applicable and the Ld. AO ought to have taken action therein and the fact that the present assessment year 15 falls within said period of six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is e, as the search in case of Goshar Group was conducted on 10.09.2015, I am of the considered opinion that in the present case, the provisions of sec 153C of the Act were applicable and the Ld. AO was not justified in assuming jurisdiction u/s 147 of t and consequently framing assessment order u/s 143(3) rws 147 of the Act is bad in law and liable to be annulled. Therefore, the impugned assessment order u/s 143(3) rws 147 of the Act is annulled and accordingly, the impugned additions would not survive. The Ground No.3 raised in appeal is Since, we find that the Ld. CIT(A) has followed the binding precedent in the case of the assessee itself. Therefore, w M/s Kalyanji Velji HUF ITA No. 2337/M/2021 7 taken u/s 153C of the Act. The relevant finding of the Ld. CIT(A) is 7.3.12 In view of above discussions, and respectfully following TAT, Mumbai in 14, wherein it has been held that the Ld. AO was not justified in taking action u/s 147 of the Act as in the present case, the provisions of sec 153C of t to have taken action therein and the fact that the present assessment year 15 falls within said period of six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is e, as the search in case of Goshar Group was conducted on 10.09.2015, I am of the considered opinion that in the present case, the provisions of sec 153C of the Act were applicable and the Ld. AO was not justified in assuming jurisdiction u/s 147 of t and consequently framing assessment order u/s 143(3) rws 147 of the Act is bad in law and liable to be annulled. Therefore, the impugned assessment order u/s 143(3) rws 147 of the Act is annulled and accordingly, the impugned additions The Ground No.3 raised in appeal is Since, we find that the Ld. CIT(A) has followed the binding Therefore, we do not find any error in the order of the Ld. CIT(A) accordingly, we uphold the same. The grounds of appeal of the Revenue are accordingly dismissed. 6. In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open Court in Sd/- (KULDIP SINGH JUDICIAL MEMBER Mumbai; Dated: 26/08/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// M/s Kalyanji Velji HUF any error in the order of the Ld. CIT(A) on the issue we uphold the same. The grounds of appeal of the Revenue are accordingly dismissed. In the result, the appeal filed by the Revenue is dismissed. ounced in the open Court in 26/08/2022. Sd/ KULDIP SINGH) (OM PRAKASH KANT MEMBER ACCOUNTANT Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary ITAT, Mumbai M/s Kalyanji Velji HUF ITA No. 2337/M/2021 8 on the issue-in-dispute and we uphold the same. The grounds of appeal of the In the result, the appeal filed by the Revenue is dismissed. /08/2022. Sd/- OM PRAKASH KANT) MEMBER Sr. Private Secretary) ITAT, Mumbai