DR MABLE KATYARE , HAZARIBAGH V. ITO WARD-1(1), HAZARIBAGH

ITA 287/RAN/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8722 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 16-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDAN DAS
• Keywords: Search and seizure; Document seized; Reason to believe; Documents seized; Reassessment proceedings
• Section: 143(3); 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH SMC RANCHI BEFORE SHRI S.S, GODARA , JUDICIAL MEMBER ITA NO. 287 /RAN / 201 7 ASSESSMENT YEAR: 20 13 - 14 DR. MABLE KATYARE, HBAGH PAN: AFSPK1459G / V/S . INCOME TAX OFFICER, WARD - 1 ( 1 ), HBAGH / APPELLANT .. / RESPONDENT / BY APPELLANT SHRI DEVESH PODDAR, ADVOCATE / BY RESPONDENT SHRI CHANDAN DAS, JCIT - DR / DATE OF HEARING 1 0 - 01 - 2019 / DATE OF PRONOUNCEMENT - 0 4 - 2019 ITA NO. 336/RAN / 2017 ASSESSMENT YEAR: 2013 - 14 RAMCHANDRA PRASAD PAN: AFOPP7929L / V/S . INCOME TAX OFFICER, WARD - 1(1), HBAGH / APPELLANT .. / RESPONDENT / BY APPELLANT SHRI DEVESH PODDAR, ADVOCATE / BY RESPONDENT SHRI CHANDAN DAS, JCIT - DR / DATE OF HEARING 09 - 01 - 2019 / DATE OF PRONOUNCEMENT 8 - 04 - 2019 / O R D E R TH ESE TWO ASSESSE HAVE FILED THEIR INSTANT APPEALS AGAINST THE CIT(A), HBAGH, JHARKHAND S SEPARATE ORDERS DATED 27 - 09 - 2017 & 09 - 10 - 2017 PASSED IN CASE NO S . 10134/HZB/2016 - 17 AND 10019/HZB/2016 - 17 RESPECTIVELY , INVOLVING PROCEEDINGS U/S. 143(3) R.W.S 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO S . 287 & 336/RAN/2017 DR. MABLE KATYARE & RAMCHANDRA PRASAD PAGE 2 2. HEARD BOTH THE PARTIES . CASE FILE S PERUSED. 3. THE FIRST GROUND RAISED IN BOTH THE ASSESSES AT THE BEHEST CHALLENGING THE CORRECTNESS THE VALIDITY OF IMPUGNED RE - OPENING / RE - ASSESSMENTS INITIATED IN FURTHERANCE THE SEARCH IN ISSUE DATED 29 - 06 - 2013 CONDUCTED IN M/S. SANTOSH GROUP OF INSTITUTION S AND ITS CHAIRMAN/MANAGING TRUSTEE, DR.P.MAHALINGAM INDICATING THAT THESE TWO TAX PAYERS HAVE TO DENY CAPITAT ION /DONATION FEE OF RS. 25 LAKHS EACH AS PER SEIZED DOCUMENTS AS WELL AS SEARCH STATEMENT OF DR. P. P.MAHALINGAM. THE N ONLY CASE IS THAT LOWER AUTHORITIES HAVE ERRED IN LAW AND IN FACTS IN INITIATING THE IMPUGNED PROCEEDINGS THAN THOSE U/S 153C OF THE ACT . THE REVENUES CASE ON THE OTHER HAND STRONGLY SUPPORTS THE IMPUGNED RE - ASSESSMENT/RE - OPENING INITIATED ON ACCOUNT OF DDIT INFORMATION PASSED ON TO THE RESPECTIVE ASSESSING OFFICERS. 4. I FIND IN THIS BACKDROP OF FACTS AND PLEADINGS THAT THIS TRIBUNALS CO - ORDINATE BENCH IN ITA NO. 86 & CO NO. 07/AGRA/2017 IN ITO VS. KAMLESH KUMAR HAS QUASHED SIMILAR RE - ASSESSMENT/RE - OPENING . I HOLD THAT IN SUCH INSTANCE IS TO SAY INTO MOTION 153C AS FOLLOWS: - 4. AS PER C.O. NO.1, THE ORDER PASSED BY THE AO U/S 147/143(3) OF THE IT ACT IS BAD IN LAW, SINCE THE PROVISIONS OF SECTION 153C WERE NOT INVOKED AGAINST THE ASSESSEE. THE FAC TS ARE THAT THE AO RECEIVED INFORMATION FROM THE INVESTMENT WING OF THE DEPARTMENT, THAT AS A RESULT OF SEARCH ON THE SANTOSH GROUP OF INSTITUTIONS, GHAZIABAD, IT HAD BEEN REVEALED THAT THE ASSESSEE HAD PAID A CAPITATION FEE OF RS.21 LACS TO SANTOSH MEDICA L COLLEGE, GHAZIABAD, FOR ADMISSION OF HIS DAUGHTER. ON THE BASIS OF THIS INFORMATION, THE AO REOPENED THE ASSESSEE'S COMPLETED ASSESSMENT AND PASSED ORDER ON 18.03.2015 UNDER SECTIONS 147 / 143(3) OF THE ACT. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE ON 'SUSHIL GAUR AND SHELLY AGARWAL VS. ITO', ORDER DATED 08.08.2017, PASSED BY THE SMC BENCH OF THE DELHI (TRIB.) IN ITA 1500 & 1501/DEL/2017 . THE LD. DR, PER CONTRA, RELIES ON ' CIT VS. SINHGAD TECHNICAL EDUCATIONAL SOCIETY ', JUDGMENT OF THE HON'BLE SUPREME COURT, PASSED ON 29.08.2017 IN CIVIL APPEAL NO.11080 OF 2017, 'GUDWILL HOUSING LTD. VS. ITO', 45 TAXMANN.COM 144 (KARN), 'ASSTT. CIT VS. SHRI VIDIT KUMAR AGARWAL ', 26 TAXMANN.COM 185 AGRA AND 'HONDA MOTOR PVT. LTD. VS. A CIT ', ORDER DATED 20.07.2016, PASSED BY THE HON'BLE ALLAHABAD HIGH COURT IN ITA NO.147/2016. ITA NO S . 287 & 336/RAN/2017 DR. MABLE KATYARE & RAMCHANDRA PRASAD PAGE 3 6. HEARD. THE AO RECORDED THE FOLLOWING REASONS U/S 147 OF THE IT ACT , FOR REOPENING THE ASSESSEE'S COMPLETED ASSESSMENT: 'THE INFORMATION ORIGINALLY RECEIVED BY ITO(2), KANPUR ON 19.03.2014 WHICH IS TRANSFERRED TO THIS OFFICE AS PAN OF THE ASSESSES IS LYING AT ETAWAH. INFORMATION HAS BEEN PASSED ON BY O/O DY. DIRECTOR OF INCOME TAX (INV.) - V(1), NEW DELHI VIDE L ETTER F.NO.DDIT(LNV.)/U - V(1)/2013 - 14/304 DATED 19.03.2014 REGARDING DONATION/CAPITATION FEE PAID OVER AND ABOVE THE REGULAR COURSE FEES TO SANTOSH MEDICAL COLLEGE, GHAZIABAD FOR AY 2007 - 08. BY SHRI KAMLESH KUMAR I.T.A NO. 86/AGRA/2017 C.O. NO. 07/AGRA/2017 YADAV FOR MBBS COURSE ON 03.06.2006 AMOUNTING TO RS.21 LAKHS. THE FEES SO PAID TO THE SANTOSH GROUP OF INSTITUTION OF WHICH A SEARCH AND SEIZURE ACTION U/S 132 OF THE INCOME TAX ACT , 1961, WAS CARRIED OUT ON 27.06.2013 DURING WHICH CERTAIN DOCUMENTS / BOOKS OF ACCOUNTS WERE SEIZED FROM THE MAIN ADMINISTRATIVE BLOCK OF THE COLLEGE. FROM THE RECEIPTS IT WAS REVEALED THAT THE SAID INSTITUTION WAS CHARGING DONATION/CAPITATION FEES OVER AND ABOVE THE REGULAR CO URSE FEES FROM THE STUDENTS. WHEN THE SAME WAS CONFRONTED TO THE CHAIRMAN OF THE TRUST DR. P. MAHALINGAM, HE HAD CATEGORICALLY ADMITTED OF ACCEPTING THE AFORESAID DONATION/CAPITATION FEES IN CASH AND OFFERED THE UNACCOUNTED MONEY SO RECEIVED FOR TAXATION I N THE RELEVANT YEAR FROM THE STATEMENT OF DR. P. MAHALINGAM RECORDED U/S 132(4) OF THE INCOME TAX ACT , 1961, DURING THE SEARCH OPERATION, IT IS AMPLE CLEAR THAT AS THE FEES PAID IN CASH, THE SAME WAS UNA CCOUNTED MONEY IN THE HANDS OF SHRI KAMLESH KUMAR YADAV. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT THE INCOME AMOUNTING TO RS. 21 LAKHS OF THE ASSESSEE HAS ESCAPED ASSESSMENT FOR A.Y. 2007 - 08 IN RESPECT OF UNACCOUNTED MONEY WHICH WAS NOT DISCLO SED BEFORE THE DEPARTMENT. ACCORDINGLY, TO BRING THIS INCOME AS WELL AS OTHER INCOME UNDER THE PURVIEW OF TAXATION, IT IS NECESSARY TO ISSUE NOTICE U/S 148. NOTICE U/S. 148 OF THE INCOME TAX ACT, 1961 IS BEING ISSUED WITH THE PRIOR APPROVAL OF THE LD. JCIT , RANGE - 5, FIROZABAD. 7. THUS, AS AVAILABLE FROM THE REASONS RECORDED, A SEARCH WAS CARRIED OUT ON 27.06.2013 ON THE SANTOSH GROUP OF INSTITUTIONS, GHAZIABAD. CERTAIN DOCUMENTS/BOOKS OF ACCOUNT WERE SEIZED, FROM WHICH A SUM OF RS.21 LACS WAS FOUND TO HAVE BEEN PAID BY THE ASSESSEE, OVER AND ABOVE THE REGULAR COURSE FEES, TO SANTOSH MEDICAL COLLEGE, GHAZIABAD, FOR A.Y. 2007 - 08, I.E., THE YEAR UNDER CONSIDERATION, FOR MBBS COURSE, ON 03.03.2006, WHICH AMOUNT THE CHAIRMAN OF THE GROUP CATEGORICALLY ADMITTED T O HAVE ACCEPTED. 8. THUS, IN THE ASSESSEE'S CASE, THE AO INITIATED REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT ON THE BASIS OF INFORMATION RECEIVED BASED ON MATERIAL QUA THE ASSESSEE, FOUND IN THE SEARCH ON THE SANTOSH GROUP OF INSTITUTIONS, GHAZIABAD. ITA NO S . 287 & 336/RAN/2017 DR. MABLE KATYARE & RAMCHANDRA PRASAD PAGE 4 9. THE PROPOSITION CANVASSED BY THE ASSESSEE IS THAT AS PER THE PROVISIONS OF SECTION 153C OF THE IT ACT, PERSONS RELATING TO WHOM SOME MATERIAL IS FOUND IN THE SEARCH OF SOME OTHER PERSON, SHOULD BE ASSESS ED U/S 153C OF THE ACT AND THE AO IN THE PRESENT CASE HAS ERRED IN INVOKING THE PROVISIONS OF SECTION 147 OF THE ACT. 10. IN 'SUSHIL GAUR AND SHELLY AGARWAL', (SUPRA) THIS PROPOSITION HAS BEEN ACCEPTED. THEREIN, THE FACTS ATTENDING WERE, MUTATIS MUTANDIS, IDENTICAL WITH THOSE I.T.A NO. 86/AGRA/2017 C.O. NO. 07/AGRA/2017 OF THE PRESENT CASE. SUSHIL GAUR (SUPRA) RELIES ON ' ACIT VS. ARUN KAPUR ', 140 TTJ 249 (ASR) AND 'RAJAT SHUBRA CHATTERJI VS. ACIT', ORDER DATED 20.05.2016, PASSED BY THE DELHI ITAT, IN ITA 2430/DEL/2015. NO CONTRARY DECISION HAS BEEN CITED ON BEHALF OF THE DEPARTMENT. NEITHER 'SINHGAD TECHNICAL EDUCATIONAL SOCIETY' (SUPRA), NOR 'GUDW ILL HOUSING LTD.' (SUPRA), NOR 'VIDIT KUMAR AGARWAL' (SUPRA), NOR EVEN 'HONDA MOTOR INDIA PVT. LTD.' (SUPRA) DEALS WITH THE ISSUE AT HAND. 11. THEREFORE, RESPECTFULLY FOLLOWING 'SUSHIL GAUR' (SUPRA) AND 'ARUN KAPUR' (SUPRA) AND 'RAJAT SHUBRA CHATTERJI' (SU PRA), I HOLD THAT SINCE IN THE PRESENT CASE, ADMITTEDLY, THE ASSESSEE, WITH REGARD TO WHOM INCRIMINATING MATERIAL WAS FOUND AND SEIZED, AS PER THE REASONS RECORDED U/S 147 OF THE ACT IN THE ASSESSEE'S CASE, FROM WHICH MATERIAL, IT CAME OUT THAT A SUM OF RS .21 LAC HAD BEEN PAID BY THE ASSESSEE ON 03.03.2006 TO SANTOSH MEDICAL COLLEGE, GHAZIABAD, A PART OF THE SANTOSH GROUP OF INSITITUTIONS, GHAZIABAD, ON WHOM, A SEARCH WAS CONDUCTED ON 27.06.2013, AND SINCE THE ASSESSEE WAS NOT ASSESSED U/S 153C OF THE ACT, WHICH PROVISION SPECIFICALLY EXCLUDES THE OPERATION OF SECTION 147 OF THE ACT, THE AO ERRED IN INVOKING THE PROVISIONS OF SECTION 147 OF THE ACT INS TEAD OF THOSE OF SECTION 153C , THEREBY ILLEGALLY RENDERING THE PROVISIONS OF SECTION 153C AS REDUNDANT. 12. IN VIEW OF THE ABOVE, THE REASONS RECORDED U/S 147 OF THE ACT AND ALL PROCEEDINGS PURSUANT THERETO, CULMINATING IN THE ORDER UNDER APPEAL, ARE QUASHED. NOTHING FURTHER SURVIVES FOR ADJUDICATION, NOR WAS ANYTHING ELSE ARGUED. 5. I ADOPT THE ABOVE DETAILED REASONING MUTADIS MUTANDIS TO QUASH IMPUGNED RE - OPENING/RE - ASSESSMENT IN BOTH THE CASES ON THIS COUNT. THUS ASSESSEES ONLY SUBSTANTIVE GROUND ON MERITS IS RENDERED INFRUCTUOUS. 6 . TH ESE TWO ASSESSEES APPEAL S ARE ALLOWED . ORDER PRONOUNCED ON 8/4/19 . SD/ - (S.S. GODARA ) DATE: 8/4/19 JUDICIAL MEM BER ITA NO S . 287 & 336/RAN/2017 DR. MABLE KATYARE & RAMCHANDRA PRASAD PAGE 5 * PP /SR.PS / COPY OF ORDER FORWARDED TO: - 1. /APPELLANT - 1) DR. MABLE KATYARE, RAVI X - RAY CLINIC & LABORATORY, CHARHI, HBAGH - 825336 2) /RAMCHANDRA PRASAD, MEHTA NURSING HOME, ICHAK MORE, HBAGH, 825302 (JH). 2. /RESPONDENT - ITO WARD - 1 (1), RAVINDRA PATH, HBAGH - 825301(JH). 3. / CONCERNED CIT 4. - / CIT (A) 5. , / DR, ITAT, RANCHI 6. / GUARD FILE. BY ORDER/ , SR. PRIVATE SECRETARY/P.S ITAT RANCHI