Probir Chandra Sen, Noida V. ACIT, New Delhi

ITA 2353/DEL/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6862 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 01-12-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 21-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: UDAYAN VERMA
• Keywords: Reopening of assessment; Search and seizure
• Section: 37(1); 147; 132; 15

Judgement Text

1 BEFORE THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC 3 , NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 2 353 /DEL/2015 AY: 200 7 - 08 SH. PROBIR CHANDRA SEN VS. ACIT, CIRCLE 37(1) R/O FLAT NO.81, TOWER 15A NEW DELHI ATS GREEN VILLAGE EXPRESSWAY SECTOR 93A NOIDA 201 304 PAN: AKKPS 7348 R (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAKESH SINGH, ADV. AND SH. UDAYAN VERMA, ADV. RESPONDENT BY : SH. RAJESH KUMAR, SR.D.R. ORDER T HIS IS AN APPEAL FIL ED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - XX , NEW DELHI DATED 25/2/ 2015 FOR THE ASSESSMENT YEAR 2007 08. 2. FACTS IN BRIEF ARE THAT , THE ASSESSEE IS RETIRED IAS O FFICER WHOSE MAIN SOURCE OF INCOME IS, IN COME FROM SALARY (PENSION), INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE WAS A DIRECTOR OF INDIA INTERNATIONAL CENTRE, NEW DELHI. HE WAS ALSO OFFERED INDEPENDENT DIRECTORSHIP AT ROCKLAND HOSPIT ALS LTD. 3. DURING THE YEAR UNDER CONSIDERATION, R OCK LAND HOSPITALS LTD ISSUED SWEAT EQUITY TO 34 PERSONAL WHICH INCLUDED DOCTORS AND OTHER PERSONNEL , SUBJECT TO CERTAIN TERMS AND CONDITIONS .T HE ASSESSEE W AS ONE OF THE 2 BENEFICIARY. THE DIRECTOR OF INCOME T AX (INVESTIGATION), NEW DELHI CARRIED OUT A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (THE ACT) ON ROCKLAND GROUP OF CASES, WHEREUPON THE ABOVE INFORMATION PERTAINING TO SWEA T EQUITY WAS FOUND AND THIS MATERIAL WAS TRANSFERRED TO THE OFFICE OF THE AS ST COMMISSIONER OF I NCOME T AX, C IRCLE 37 (1), NEW DELHI. THE ASSESSING OFFICER (A.O.) RECORDED REASONS THAT INCOME SUBJECT TO TAX HAS ESCAPED ASSESSMENT AND REOPEN ED THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 147 OF THE ACT. 4. TH E ISSUE BEFORE ME IS WHETHER SUCH R EOPENING OF ASSESSMENT IS VALID IN LAW . 5. AFTER HEARING RIVAL CONTENTIONS , I FIND THAT THIS ISSUE IS NO MORE RES I NTEGRA , IN VIEW OF THE ORDER OF THE DELHI D BENCH OF THE T RIBUNAL IN ITA NO. 2430 /DEL/2015 ORDER DATED 20/05/2016 IN THE CASE OF RAJAT SUBRA CHATTERJEE VERSUS ACIT. 5.1. THE T RIBUNAL AT PARAGRAPH 7 PAGE 7 OF ITS ORDER HELD AS FOLLOWS: 7. ON HAVING GONE THROUGH THE DECISION CITED ABOVE SPECIALLY THE DECISION OF AMRITSAR BENCH IN THE CASE OF I T O V S ARUN KUMAR KAPOOR (SUPRA), WE FIND IN THAT CASE AS IN THE PRESENT CASE BEFORE US, REASSESSMENT WAS INITIATED ON THE BASIS OF INCRIMINATING MATERIAL FOUND IN SEARCH OF THIRD PARTY AND THE VALIDITY OF THE SAME WAS CHALLENGE D BY THE ASSESSEE BEFORE THE LD. CIT (APPEALS) AND THE LD. CIT (APPEALS) VITIATED (SIC) THE PROCEEDINGS. THE SAME QUESTION BY THE REVENUE (SIC) BEFORE THE ITAT AND THE ITAT AFTER DISCUSSING THE CASES OF THE PARTIES AND THE RELEVANT PROVISIONS IN DETAIL HAS COME TO THE CONCLUSION THAT IN THE ABOVE SITU ATION, PROVISIONS OF SECTION 15 3C WERE APPLICABLE WHICH EXCLUDES THE APPLICATION OF SECTIONS 147 AND 148 OF THE ACT. THE ITAT HELD THAT THE NOTICE ISSUED UNDER SECTION 148 AND PROCEEDINGS UNDER SECTION 147 AS I LLEGAL AND VOID AB INITIO. IT WAS HELD THAT ASSESSING OFFICER HAVING NOT FOLLO WED PROCEDURE UNDER SECTION 15 3C, REASSESSMENT O RDER WAS RIGHTLY QUASHED BY THE LD. CIT (APPEALS). IN THE PRESENT CASE BEFORE THUS, IT IS AN ADMITTED FACT, THAT (SIC) ALSO EVIDEN T FROM 3 THE REASONS RECORDED AND THE ASSESSMENT ORDER THAT THE INITIATION OF REOPENING PROCEEDINGS WAS MADE BY THE ASSESSING OFFICER ON THE BASIS OF INFORMATION RECEIVED FROM THE DIRECTOR OF INCOME TAX (INV. ) ON THE BASIS OF SEARCH AND SEIZURE OPERATIONS C O NDUCTED AT THE PREMISES OF ROCK LAND GROUP OF CASES AND THE DOCUMENTS RELATED TO THE ASSESSEE FOUND DURING THE COURSE OF SEARCH WERE MADE AVAILABLE TO THE ASSESSING OFFICER OF THE PRESENT ASSESSEE. WE THUS RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE BENCH OF THE ITAT IN THE CASE OF ACIT VERSUS ARUN KAPOOR - 140 TTJ 249(AMRITSAR) HOLD THAT PROVISIONS OF SECTION 15 3C OF THE ACT WERE APPLICABLE IN THE PRESENT CASE FOR FRAMING THE ASSESSMENT, IF ANY, WHICH EXCLUDES THE APPLICATION OF SECTION 147 OF THE ACT, HENCE, NOTICE ISSUED UNDER SECTION 148 OF THE ACT AND ASSESSMENT FRAMED IN FURTHERANCE THERETO UNDER SECTION 147 READ WITH SECTION 143 (3) OF THE ACT ARE VOID AB I NITIO. THE REASSESSMENT S IN QUESTION IS ACCORDINGLY QUASHED. 5.2. RESPECTFULLY FOLLOWING T HE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL CITED ABOVE , ON THE VERY SAME ISSUE IN THE CASE OF ANOTHER BENEFICIA RY A N D AS THE FACTS ARE UNDISPUTEDLY SAME IN THIS CASE I UPHOLD THE CONTENTIONS OF THE ASSESSEE AND HOLD TH AT REOPENING OF ASSESSMENT IS BAD IN LAW. 5.3. AS I HAVE ADJUDICATED THIS ISSUE ON THE PRELIMINARY POINT OF REOPENING, I DO NOT GO INTO THE MERITS OF THE CASE, AS IT WOULD BE AN ACADEMIC EXERCISE. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. 6 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2017. SD/ - (J.SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED: THE 25 TH JANUARY, 2017 *MANGA 4 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR