A,C.I.T. CENTRAL CIR.- 2(2), Nagpur V. SHRI DHARAMPAL R.AGRAWAL, Nagpur

ITA 290/NAG/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1288 (ITAT-NAGPUR)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 28-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: SACHIN LUTHRA
• Keywords: Documents seized; Reassessment proceedings
• Section: 143(3); 153A; 132

Judgement Text

1 ITA NOS. 290 & 291/NAG/2016. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER.. I.T.A. NOS. 290 & 291/NAG/2016 ASSESSMENT YEARS : 2005 - 06 & 2006 - 07. DY. COMMISSIONER OF INCOME - TAX, SHRI DHARAMPAL R. AGRAWAL. CENTRAL CIRCLE - 2(2), NAGPUR. VS. NAGPUR. PAN ABHPA2471M. APPELLANT. RESP ONDENT. APPELLANT BY : SHRI A.R. NINAWE. RESPONDENT BY : SHRI SACHIN LUTHRA. DATE OF HEARING : 2 5 - 11 - 2016 DATE OF PRONOUNCEMENT : 19 TH DEC., 2016 O R D E R. PER SHAMIM YAHY A , A.M. : THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF LEARNED CIT(APPEALS) DATED 26 - 02 - 2016. SINCE THE ISSUES ARE COMMON AND CONNECTED AND THE APPEALS WERE HEARD TOGETHER, THESE ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. COMMON GROUNDS RELATING TO VALIDITY OF JURISDICTION IN THIS CASE ARE AS UNDER : 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT THE NOTICE AND ACTION U/S 153A OF THE I.T. ACT WAS BAD IN LAW, EVEN THOUGH T HE ASSESSING OFFICER HAD RECORDED HIS SATISFACTION THAT THE DOCUMENTS SEIZED FROM VARIOUS PREMISES BELONGED TO THE ASSESSEE, WHICH IS THE ONLY PRE - CONDITION FOR ISSUE OF NOTICE UNDER SECTION 153A OF THE INCOME - TAX ACT, 1961? 2 ITA NOS. 290 & 291/NAG/2016. 2. ON THE FACTS AND CIRCUMSTANC ES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITIONAL GROUND AND CANCELLING THE ASSESSMENT WHEREAS THE DELHI HIGH COURT IN THE CASE OF CIT VS. ANIL KUMAR BHATIA REPORTED IN 352 ITR 493 AND THE KARNATAKA HIGH COURT IN THE CASE OF C ANERA HOUSING DEVELOPMENT CO. VS. DCIT, HAVE AFFIRMED THE SCOPE OF THE ASSESSING OFFICER TO ASSESS THE TOTAL INCOME IN THE PROCEEDINGS U/S 153A OF THE INCOME TAX ACT. 3 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) FAILED TO AP PRECIATE THAT THE ASSESSING OFFICER IS REQUIRED TO ASSESS OR RE - ASSESS THE TOTAL INCOME OF 6 ASSESSMENT YEARS AS PER PROVISIONS OF SECTION 153A(1)(B) OF THE I.T. ACT. 4 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN TREATING MERE PROCESSING OF RETURN U/S 143(1) OF THE I.T. ACT, 1961 BEFORE SEARCH ACTION AS COMPLETED ASSESSMENT BY IGNORING THE DECISION OF THE SUPREME COURT IN THE CASE OF DCIT VS. ESTATE DEVELOPMENT & INVESTMENT CO. LTD. (CA 6758 OF 2004) AND CIT VS. RAJESH JHAVERI STOCK BROKERS (P) LTD. 291 ITR 500 (2007). 3. IN BOTH THE CASES THE ASSESSEE HAS FILED RETURN OF INCOME EARLIER U/S 139(1). SUBSEQUENTLY PURSUANT TO SEARCH A ND SEIZURE OPERATION U/S 132, NOTICE U/S 153A WAS ISSUED. THE ADDITIONS WERE MADE BASED UPON THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET. NONE OF THE ADDITIONS WERE MADE WITH REFERENCE TO ANYTHING INCRIMINATING FOUND DURING THE SEARCH. 4. BEFORE THE LEAR NED CIT(APPEALS) THE ASSESSEE HAS RAISED ADDITIONAL GROUND AS UNDER : ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY THE LEARNED AO IS WITHOUT JURISDICTION AND BAD I N LAW AS THE JURISDICTION U/S 153A IS VITIATED AND THE ADDIT IONS BEING NOT BASED UPON ANY INCRIMINATING FOUND DURING THE SEARCH. 5. LEARNED CIT(APPEALS CONSIDERED THE ISSUE BY REFERRING TO SEVERAL CASE LAWS. LEARNED CIT(APPEALS) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY REFERRING TO HONBLE JURISDICTIONAL HIG H COURT DECISION IN THE CASE OF CIT VS. 3 ITA NOS. 290 & 291/NAG/2016. CONTINENTAL WAREHOUSING CORPORATION 58 TAXMANN.COM 78). LEARNED CIT(APPEALS) OBSERVED AS UNDER : IN CONTINENTAL WAREHOUSING CORPORATION (NAVA SHEVA) LTD. (SUPRA), THE BOMBAY HIGH COURT ANSWERED THE QUESTION FRAMED BY IT AS UNDER : A. IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON HIM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY; B. IN OTHER CASES, IN ADDITION TO THE INCOME TAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. THE HONBLE HIGH COURT REFERRED TO THE DECISIONS OF HONBLE NAGPUR BENCH OF BOMBAY HIGH COURT IN THE CASE OF MURLI AGRO PRODUCTS LTD. AND OF SPECIAL BENCH OF ITAT, MUMBAI IN THE CASE OF ALCARGO GLOBAL LOGISTICS LTD. 6. FURTHER LEARNED CIT(APPEALS) CONCLUDED AS UNDER : 19. VARIOUS TRIBUNALS AND HIGH COURTS HAVE HELD THAT THE ASSESSMENTS WHICH HAVE ALREADY CONCLUDED, WITHOUT ANY INCRIMINATING MATERIAL BEING FOUND DURING THE SEARCH, THE ADDITIONS MADE BY AO IN ASSESSMENTS PROCEEDINGS U/S 153A DO NOT SURVIVE AND THEREFORE ORDERED TO BE DELETED. IN CASE WHERE ASSESSMENT OR REASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETED AND ASS ESSMENT ORDERS HAVE BEEN PASSED DETERMINING ASSESSEES TOTAL INCOME AND SUCH ORDERS SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THE PRESENT CASE, THE ASSESSME NT HAD BEEN COMPLETED U/S 153A R.W.S. 143(3) OF THE I.T. ACT AS REPORTED BY THE AO IN REMAND REPORT DATED 09.11.2015. THE AO HAS STATED AS UNDER IN HIS REPORT DATED 09.11.2015 FOR THE AGRAWAL GROUP OF CASES : 4 ITA NOS. 290 & 291/NAG/2016. AS REGARDS THE CASES IN WHICH THE ASSESSMENT S WERE ABATED AS A RESULT OF SEARCH U/S 132 AND NOTICE U/S 153A OR 153C, IT IS TO INFORM THAT AS PER THE RECORDS, EXCEPT IN THE CASE OF M/S SHREE AGARWAL FINANCE INDIA PVT. LTD. FOR THE A.Y. 2009 - 10, THERE IS NO CASE IN WHICH ASSESSMENT WAS SO ABATED. IT I S ALSO SUBMITTED THAT IN FOLLOWING CASES THE ASSESSMENTS WERE DONE U/S 143(3) OF THE ACT, PRIOR TO THE SEARCH 1. M/S SHREE AGRAWAL COAL INDIA PVT. LTD. : A.Y. 2005 - 06, 2006 - 07, 2007 - 08 & 2008 - 09. 2. SHRI DARPAN DHARAMPAL AGRAWAL : A.Y. 2008 - 09. FROM THE AOS REPORT, IT IS SEEN THAT THERE WAS NO ASSESSMENT PENDING IN THIS CASE AND THE ASSESSMENT WAS NOT ABATED. THE TIME FOR ISSUE OF NOTICE U/S 143(2) HAD EXPIRED AS ON THE DATE OF SEARCH AND THEREFORE, THE ASSESSMENT HAD BECOME FINAL IN VIEW OF ITAT, MUMBAI DEC ISIONS REFERRED ABOVE IN CASES OF GURINDER SINGH B AWA AND THAT OF ATUL BAROT. 20. CONSIDERING THE DECISIONS DISCUSSED ABOVE AND RELYING UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING (BOMBAY HIGH COURT ) (APPEAL NO. 523 OF 2013) & CIT VS. MURLI AGRO PRODUCTS LTD. (NAGPUR BENCH OF BOMBAY HIGH COURT) (APPEAL NO. 36 OF 2009), THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. THE AO HAS MADE ALL THE ADDITIONS IN THE ASSESSMENT ORDER WITHOUT ANY REF ERENCE TO ANY MATERIAL SEIZED DURING SEARCH. NONE OF THE ADDITIONS HAVE BEEN MADE BASED ON ANY SEIZED MATERIAL WHATSOEVER OR FINDINGS DUE TO SEARCH U/S 132. 7 WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND T HAT IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (SUPRA). WE FURTHER FIND THAT HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GURINDER SINGH BAWA I N INCOME TAX APPEAL NO. 1839 OF 2013 VIDE ORDER DATED 05 - 10 - 2015 IN A CASE WHERE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1) HAS ALSO UPHELD THE DECISION OF CONTINENTAL WAREHOUSING CORPORATION (SUPRA). HENCE WE DO NOT FIND ANY INFIRM ITY IN THE ORDER OF LEARNED CIT(APPEALS). ACCORDINGLY WE UPHOLD THE SAME. 5 ITA NOS. 290 & 291/NAG/2016. 8. SINCE WE HAVE ALREADY DISCUSSED THE APPEAL ON INVALID JURISDICTION, ADJUDICATION ON MERITS OF ISSUES RAISED IS ONLY OF ACADEMIC INTEREST. HENCE WE ARE NOT DEALING WITH THE ADDITIO N ON MERITS 9 . IN THE RESULT, THESE APPEALS BY THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF DEC., 2016. SD/ - SD/ - (RAM LAL NEGI) ( SHAMIM YAHYA) JUDICIAL MEMBER. ACOUNTANT MEMBER. NAGPUR, DATED: 19 TH DEC. , 2016. COPY FORWARDED TO : 1. SHRI DHARAMPAL R. AGRAWAL, 290, SATNAMI LAY OUT, WARDHAMAN NAGAR, NAGPUR - 440008. 2. D.C.I.T., CENTRAL CIRCLE - 2 ( 2 ), NAGPUR. 3. C.I.T. - (CENTRAL), NAGPUR. 4. CIT(APPEALS) - 3, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE. 6 ITA NOS. 290 & 291/NAG/2016.