Shri A.Vijayakant, CHENNAI V. ACIT, CHENNAI

ITA 28/CHNY/2012

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 2997 (ITAT-CHENNAI)
• Duration Of Justice: 7 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 06-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T R SENTHIL KUMAR SR
• Assessee Lawyers: R PADMANABHAN
• Keywords: Set aside
• Section: 143(3); 153A; 143(2); 132; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , ! ' # , % #& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NOS.28, 29, 30 & 31/CHNY/2012 ) *) / ASSESSMENT YEARS : 2001-02 TO 2004-05 SHRI A. VIJAYAKANT, NO.54 / 12-A, KANNAMMAL STREET, KANNIBIRAN COLONY, SALIGRAMAM, CHENNAI - 600 093. PAN : ABRPV 6479 N V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I(2), CHENNAI - 600 034. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI R. PADMANABHAN, CA ./,- 0 1 / RESPONDENT BY : SHRI T.R. SENTHIL KUMAR, SR. STANDING COUNSEL 2 0 3% / DATE OF HEARING : 16.01.02019 45* 0 3% / DATE OF PRONOUNCEMENT : 05.03.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : ALL THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAI NST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCOME T AX (APPEALS)-I, CHENNAI, DATED 29.11.2011 AND PERTAIN TO ASSESSMENT YEARS 2001-02, 2002-03, 2003-04 AND 2004-05. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN THESE APPEALS, WE HEARD THESE APPEALS TOGETHER AND DISPOSING THE SAME BY THIS COM MON ORDER. 2 I.T.A. NOS.28 TO 31/CHNY/12 2. SHRI R. PADMANABHAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT FOR ALL THE FOUR ASSESSMEN T YEARS UNDER CONSIDERATION, THE ASSESSEE FILED THE REGULAR RETUR N OF INCOME AND THE ASSESSMENTS UNDER SECTION 143(3) OF THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT') WERE ALSO COMPLETED BEFORE THE DATE OF SEARCH. ACCORDING TO THE LD. REPRESENTATIVE, THE DATE OF SE ARCH WAS 23.01.2007. FOR THE ASSESSMENT YEAR 2001-02, THE A SSESSMENT PROCEEDING UNDER SECTION 143(3) OF THE ACT WAS COMP LETED ON 19.03.2004. FOR THE ASSESSMENT YEAR 2002-03, THE A SSESSMENT PROCEEDING UNDER SECTION 143(3) R.W.S. 147 OF THE A CT WAS COMPLETED ON 29.03.2006. FOR THE ASSESSMENT YEAR 2 003-04, THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMP LETED ON 29.03.2006. SIMILARLY, FOR THE ASSESSMENT YEAR 200 4-05 ALSO, THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMP LETED ON 28.12.2006. ACCORDING TO THE LD. REPRESENTATIVE, S INCE THE ASSESSMENT PROCEEDINGS WERE COMPLETED BEFORE THE DA TE OF SEARCH, ON THE BASIS OF THE RETURN OF INCOME FILED IN THE R EGULAR COURSE, THE COMPLETED ASSESSMENT CANNOT BE REOPENED. 3. REFERRING TO SECTION 153A OF THE ACT, THE LD. RE PRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT PROC EEDING WHICH 3 I.T.A. NOS.28 TO 31/CHNY/12 IS PENDING BEFORE THE ASSESSING OFFICER ON THE DATE OF SEARCH ALONE ABATE AND IN RESPECT OF COMPLETED PROCEEDINGS, THE PROCEEDINGS WILL NOT ABATE. IN RESPECT OF THE ASSESSMENT YEARS FOR WHICH THE PROCEEDINGS WERE COMPLETED, THE ASSESSING OFFICER H AS TO ASSESS THE INCOME, IF ANY ESCAPED FROM THE ASSESSMENT, ONL Y ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH OPERA TION. ACCORDING TO THE LD. REPRESENTATIVE, THIS TRIBUNAL AND VARIOU S HIGH COURTS FOUND THAT IN RESPECT OF THE COMPLETED PROCEEDING, THERE CANNOT BE REOPENING UNLESS SOME MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OPERATION. THIS WAS FURTHER CLARIFIED BY TH E PARLIAMENT BY INTRODUCING THIRD PROVISO TO SECTION 153A OF THE AC T. ACCORDING TO THE LD. REPRESENTATIVE, EVEN THOUGH THE THIRD PROVI SO TO SECTION 153A OF THE ACT WAS INTRODUCED BY FINANCE ACT 2012, IT IS ONLY IN TUNE WITH THE DECISION OF THIS TRIBUNAL AND OTHER H IGH COURTS WHICH HAVE INTERPRETED SECTION 153A OF THE ACT THAT IN CA SE, THE ASSESSMENT PROCEEDINGS ARE NOT PENDING EITHER BY OP ERATION OF LAW ON EXPIRY OF TIME LIMIT FOR ISSUING NOTICE UNDER SE CTION 143(2) OF THE ACT OR BY AN ORDER UNDER SECTION 143(3) OF THE ACT ON THE DATE OF SEARCH, SUCH COMPLETED PROCEEDINGS CANNOT BE REOPEN ED UNLESS SOME MATERIAL WAS FOUND DURING SEARCH OPERATION. R EFERRING TO ASSESSMENT ORDER FOR THE ASSESSMENT YEARS UNDER CON SIDERATION, 4 I.T.A. NOS.28 TO 31/CHNY/12 THE LD. REPRESENTATIVE SUBMITTED THAT WHAT WAS FOUN D BY THE REVENUE IN THE COURSE OF SEARCH OPERATION IS A CASH OF 1,99,500/- AND JEWELLERY OF 2295.700 GRAMS. APART FROM THAT, NO MATERIAL WAS FOUND. THE LD. REPRESENTATIVE HAS ALSO CLARIFIED T HAT NO ADDITION WAS MADE BY THE ASSESSING OFFICER IN RESPECT OF CAS H TO THE EXTENT OF 1,99,500/- AND ALSO JEWELLERY OF 2295.700 GMS. THE ASSESSING OFFICER HAS RE-EXAMINED THE RETURNS FILED EARLIER O N WHICH ASSESSMENT PROCEEDINGS WERE ALREADY COMPLETED AND D ISALLOWED THE ALLOWANCE CLAIMED BY THE ASSESSEE. ACCORDING T O THE LD. REPRESENTATIVE, UNDER THE SCHEME OF THE INCOME-TAX ACT, THIS IS NOT PERMISSIBLE. 4. ON THE CONTRARY, SHRI T.R. SENTHIL KUMAR, THE LD . SR. STANDING COUNSEL FOR THE REVENUE, SUBMITTED THAT TH E ASSESSEE ADMITTEDLY FILED RETURNS OF INCOME FOR THE ASSESSME NT YEARS UNDER CONSIDERATION IN THE REGULAR COURSE AND ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT WERE COMPLETED BEFO RE THE DATE OF SEARCH. REFERRING TO SECTION 153A OF THE ACT, THE LD. SR. STANDING COUNSEL SUBMITTED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS. IN VIEW OF THE LANGUA GE OF THE 5 I.T.A. NOS.28 TO 31/CHNY/12 PARLIAMENT THAT THE ASSESSMENT CAN BE ASSESSED OR R EASSESSED EVEN THOUGH THERE WAS NO MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. ACCORDING TO THE LD. SR. STANDIN G COUNSEL, THE ASSESSING OFFICER CAN REASSESS THE INCOME WHICH IS ALREADY SUBJECT MATTER OF ASSESSMENT BEFORE THE DATE OF SEARCH. RE FERRING TO THIRD PROVISO TO SECTION 153A OF THE ACT, THE LD. SR. STA NDING COUNSEL SUBMITTED THAT THIS WAS INSERTED BY FINANCE ACT, 20 12 WITH EFFECT FROM 01.07.2012, THEREFORE, IT IS APPLICABLE FOR TH E ASSESSMENT YEARS UNDER CONSIDERATION. ACCORDING TO THE LD. SR. STAN DING COUNSEL, THE THIRD PROVISO IS PROSPECTIVE IN OPERATION, THEREFOR E, IT CANNOT BE MADE APPLICABLE DURING THE YEARS UNDER CONSIDERATIO N. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS FILED RETURN OF INCOM E IN REGULAR COURSE FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERA TION. THE ASSESSING OFFICER HAS ALSO COMPLETED THE ASSESSMENT S BY AN ORDER UNDER SECTION 143(3) OF THE ACT BEFORE THE DATE OF SEARCH. MOREOVER, NO ADDITION WAS MADE IN RESPECT OF CASH A ND JEWELLERY FOUND DURING THE COURSE OF SEARCH OPERATION FOR THE PRESENT ASSESSMENT YEARS. THE ENTIRE ASSESSMENTS WERE MADE BY 6 I.T.A. NOS.28 TO 31/CHNY/12 DISALLOWING THE CLAIM OF THE ASSESSEE WHICH WAS ALR EADY SUBJECT MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE AC T. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER THE AS SESSING OFFICER CAN ASSESS OR REASSESS THE INCOME WHICH WAS ALREADY SUBJECT MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE AC T BEFORE THE DATE OF SEARCH WHEN NO MATERIAL WAS FOUND DURING TH E COURSE OF SEARCH OPERATION? 6. WE HAVE CAREFULLY GONE THROUGH SECTION 153A OF T HE ACT WHICH READS AS FOLLOWS:- 153A. ASSESSMENT IN CASE OF SEARCH OR REQUISITION (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 1 39, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 13 2 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISIT IONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE A SSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETU RN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM A ND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PART ICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRE D TO BE FURNISHED UNDER SECTION 139 ; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON IS MADE : 7 I.T.A. NOS.28 TO 31/CHNY/12 PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SUCH AND FOR THE RELEVANT ASSESSMENT YEAR OR YEARS : PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, I F ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF AN D FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN THIS SUB-SE CTION PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION AND OF THE RELEVANT ASSESSMENT YEAR OR YEARS UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. PROVIDED ALSO THAT THE CENTRAL GOVERNMENT MAY BY RU LES MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZETTE (EXCEPT IN CA SES WHERE ANY ASSESSMENT OR REASSESSMENT HAS ABATED UNDER THE SEC OND PROVISO), SPECIFY THE CLASS OR CLASSES OF CASES IN WHICH THE ASSESSING OFFICER SHALL NOT BE REQUIRED TO ISSUE NOTICE FOR ASSESSING OR REASSESSING THE TOTAL INCOME FOR SIX ASSESSMENT YEARS IMMEDIATELY P RECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND OF THE RELEVAN T ASSESSMENT YEAR OR YEARS. PROVIDED ALSO THAT NO NOTICE FOR ASSESSMENT OR REAS SESSMENT SHALL BE ISSUED BY THE ASSESSING OFFICER FOR THE RELEVANT AS SESSMENT YEAR OR YEARS UNLESS(A) THE ASSESSING OFFICER HAS IN HIS P OSSESSION BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR EVIDENCE WHICH REVEAL THAT THE INCOME, REPRESENTED IN THE FORM OF ASSET, WHICH HAS ESCAPED ASSESSMENT AMOUNTS TO OR IS LIKELY TO AMOUNT TO FIFTY LAKH RUP EES OR MORE IN THE RELEVANT ASSESSMENT YEAR OR IN AGGREGATE IN THE REL EVANT ASSESSMENT YEARS ;(B) THE INCOME REFERRED TO IN CLAUSE (A) OR PART THEREOF HAS ESCAPED ASSESSMENT FOR SUCH YEAR OR YEARS ; AND(C) THE SEARCH UNDER SECTION 132 IS INITIATED OR REQUISITION UNDER SECTI ON 132A IS MADE ON OR AFTER THE 1ST DAY OF APRIL, 2017. EXPLANATION 1. FOR THE PURPOSES OF THIS SUB-SECTION, THE EXPRE SSION RELEVANT ASSESSMENT YEAR SHALL MEAN AN ASSESSMENT YEAR PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR I N WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE WHICH FALLS BEYOND SIX ASSESSMENT YEARS BUT NOT LATER THAN TEN ASSESSMENT YEARS FROM THE END OF THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH IS CONDUCTED OR REQUISITION IS MADE. EXPLANATION 2. FOR THE PURPOSES OF THE FOURTH PROVISO, ASSET SHALL INCLUDE IMMOVABLE PROPERTY BEING LAND OR BUILDING O R BOTH, SHARES AND SECURITIES, LOANS AND ADVANCES, DEPOSITS IN BANK AC COUNT. 8 I.T.A. NOS.28 TO 31/CHNY/12 (2) IF ANY PROCEEDING INITIATED OR ANY ORDER OF ASS ESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) HAS BEEN AN NULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING, THEN, NOTWITHSTANDIN G ANYTHING CONTAINED IN SUB-SECTION (1) OF SECTION 153, THE AS SESSMENT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR WHICH HAS ABATED UNDER THE SECOND PROVISO TO SUB-SECTION (1), SHALL STAND REVIVED WITH EFFECT FROM THE DATE OF RECEIPT OF THE ORDER OF SUCH ANNUL MENT BY THE PRINCIPAL COMMISSIONER OR COMMISSIONER : PROVIDED THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFE CT, IF SUCH ORDER OF ANNULMENT IS SET ASIDE. EXPLANATION FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED TH AT, (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SEC TION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION ; (II) IN AN ASSESSMENT OR REASSESSMENT MADE IN RESPE CT OF AN ASSESSMENT YEAR UNDER THIS SECTION, THE TAX SHALL B E CHARGEABLE AT THE RATE OR RATES AS APPLICABLE TO SUCH ASSESSMENT YEAR. 7. IN VIEW OF THE LANGUAGE EMPLOYED BY THE PARLIAME NT, WHEN THE ASSESSMENT PROCEEDING WAS PENDING ON THE DATE O F INITIATION OF SEARCH, THE SAME SHALL ABATE. IN THIS CASE, ADMITT EDLY, THE ASSESSMENT PROCEEDINGS WERE NOT PENDING BEFORE THE ASSESSING OFFICER ON THE DATE OF SEARCH. IT CULMINATED BY AN ORDER UNDER SECTION 143(3) OF THE ACT. THEREFORE, IT IS OBVIOU S THAT THE ASSESSMENT PROCEEDING ALREADY COMPLETED BY AN ORDER UNDER SECTION 143(3) OF THE ACT SHALL NOT ABATE. THE ASS ESSING OFFICER CANNOT REOPEN THE SAME IN THE ABSENCE OF ANY NEW MA TERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. ADMITTEDLY, IN RESPECT OF THE EXPENDITURE WHICH WAS DISALLOWED BY THE ASSESSING O FFICER IN THE 9 I.T.A. NOS.28 TO 31/CHNY/12 PRESENT PROCEEDING, NO MATERIAL WAS FOUND DURING TH E COURSE OF SEARCH OPERATION. WHAT WAS ADMITTEDLY FOUND IS CA SH OF 1,99,500/-, JEWELLERY OF 2295.700 GRAMS AND AN AGRE EMENT DATED 29.12.2006 WITH SHRI SARAVANA CREATIONS. ADMITTEDL Y NO ADDITION WAS MADE IN RESPECT OF ALL THE MATERIAL FOUND DURIN G THE COURSE OF SEARCH OPERATION. THE ASSESSING OFFICER REVIEWED H IS EARLIER ORDER PASSED UNDER SECTION 143(3) OF THE ACT AND MADE DIS ALLOWANCE IN RESPECT OF THE EXPENDITURE CLAIMED BY THE ASSESSEE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN THE ABSENCE OF ANY NEW MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION, THE CO MPLETED ASSESSMENT CANNOT BE DISTURBED. 8. AS RIGHTLY SUBMITTED BY THE LD. REPRESENTATIVE F OR THE ASSESSEE, THIS TRIBUNAL AND VARIOUS HIGH COURTS, EV EN BEFORE THE INTRODUCTION OF PROVISIONS OF SECTION 153A OF THE A CT, FOUND THAT IN THE ABSENCE OF ANY MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION, THE COMPLETED ASSESSMENT CANNOT BE REOPE NED. TO CLARIFY THE EXISTING POSITION, THE PARLIAMENT BY WA Y OF AMENDMENT IN FINANCE ACT, 2012, INTRODUCED THIRD PROVISO TO SECT ION 153A OF THE ACT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE AMENDMENT IS CLARIFICATORY IN NATURE, HENCE IT IS A PPLICABLE 10 I.T.A. NOS.28 TO 31/CHNY/12 RETROSPECTIVELY. IN VIEW OF THE ABOVE, THIS TRIBUN AL IS UNABLE TO UPHOLD THE CONTENTIONS OF THE LD. SR. STANDING COUN SEL FOR THE REVENUE. SINCE ADMITTEDLY NO MATERIAL WAS FOUND DU RING THE COURSE OF SEARCH OPERATION, THE ASSESSING OFFICER H AS NO AUTHORITY TO ISSUE NOTICE UNDER SECTION 153A OF THE ACT FOR A SSESSMENTS, THEREFORE, THE CONSEQUENTIAL ASSESSMENTS CANNOT STA ND IN THE EYE OF LAW. ACCORDINGLY, ALL THE ASSESSMENTS AS CONFIR MED BY THE CIT(APPEALS) ARE QUASHED. 9. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEE STAND ALLOWED. ORDER PRONOUNCED IN THE COURT ON 5 TH MARCH, 2019 AT CHENNAI. SD/- SD/- ( ! ' # ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 5 TH MARCH, 2019. KRI. 11 I.T.A. NOS.28 TO 31/CHNY/12 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-I, CHENNAI 4. 2 ;3 /CIT, CENTRAL-I, CHENNAI 5. 9< .3 /DR 6. =) > /GF.