Lal ferro Alloys Co Pvt Ltd, Giridih V. ACIT CENTRAL CIR-, Dhanbad

ITA 292/RAN/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3853 (ITAT-RANCHI)
• Duration Of Justice: 3 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 18-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: INDERJEET SINGH
• Assessee Lawyers: K N PRASAD
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Set aside
• Section: 133A; 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO. 292/RAN/2016 ASSESSMENT YEAR 2010-11 M/S. LAL FERRO ALLOYS COMPANY PVT. LTD.................................APPELLANT BISHWASDIH, GADISRIRAMPUR, GIRIDIH 815301. [PAN: AABCL 1243 J] A.C.I.T. CENTRAL CIRCLE, DHANBAD.....................RESPONDENT DHANBAD 826001. APPEARANCES BY: SHRI K.N. PRASAD, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE. SHRI INDERJEET SINGH, SR. CIT(DR) APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : NOVEMBER 06, 2019 DATE OF PRONOUNCING THE ORDER : NOVEMBER 08, 2019 ORDER MS. MADHUMITA ROY, JM THE INSTANT APPEAL AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 22.07.2016 PASSED BY THE LD. CIT(A) 3, PATNA, ARISING OUT OF THE ORDER DATED 29.12.2011 PASSED U/S 153A OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) BY THE ACIT, CENTRAL CIRCLE, DHANBAD, FOR THE A.Y. 2010-11. 2. THE DISPUTE BASICALLY RELATES TO ADDITION OF RS. 9,71,167/- BY THE LD. CIT(A) ON ACCOUNT OF ALLEGED UNEXPLAINED/UNDISCLOSED STOCK; THE ADDITION HAS BEEN SOUGHT TO BE JUSTIFIED BY TAKING INTO CONSIDERATION THE CERTIFICATION AND / OR ESTIMATION ISSUED BY SURVEY OFFICER OF BCCL, DHANBAD UPON INVENTORY MADE BY THEM AT THE ASKING OF THE REVENUE. SUCH INVENTORY IS ARISING OUT OF A SEARCH AND SEIZURE U/S 132(1) OF THE ACT, CONDUCTED AT THE BUSINESS PREMISES AS WELL AS THE RESIDENTIAL 2 I.T.A. NO. 292/RAN/2016 M/S. LAL FERRO ALLOYS CO. PVT. LTD. A.Y. 2010-11 PREMISES OF THE LALL GROUP OF CASES ON 16.09.2009 AND ON SUBSEQUENT DATES AND ALSO A SURVEY U/S 133A OF THE ACT IN THE FACTORY PREMISES OF THE ASSESSEE COMPANY. 3. THE CASE OF THE ASSESSEE IS THIS THAT THE BCCL HAS NO AUTHORITY TO CERTIFY STOCK OF OTHER ORGANISATION BECAUSE OF THE PARTICULAR REASON THAT SEVERAL CASES PENDING BEFORE THE CBI WHERE THE INVENTORY OF STOCK MADE BY BCCL HAS BEEN FOUND TO BE BOGUS AND FALSE. THOUGH THE ASSESSEE MADE OBJECTION AGAINST SUCH SURVEY BEING DONE BY OFFICERS OF BCCL BEFORE THE AUTHORITIES BELOW, THE SAME WAS NOT TAKEN INTO CONSIDERATION. IT IS THE FURTHER CASE OF THE ASSESSEE THAT NOWHERE THE ACT HAS PROVIDED THAT MAKING INVENTORY OF CASH, STOCK OR OTHER VALUABLE ARTICLES OR THINGS CHECKED OR VERIFIED DURING THE SURVEY CAN BE DONE BY ANY PERSON OTHER THAN THE INCOME TAX AUTHORITY AS PROVIDED IN EXPLANATION A TO SECTION 133A OF THE ACT. THEREFORE, THE BCCL AUTHORITY CANNOT BE PERMITTED TO ACT AS AN INCOME TAX AUTHORITY UNDER THIS STATUTE. THE LEARNED TRIBUNAL IN ITA NO. 173/RAN/2014 IN THE MATTER OF M/S. SALUJA STEEL & POWER PVT. LTD. VS ACIT, DHANBAD IN THE IDENTICAL SET OF FACTS ACCEPTED SUCH CONTENTION MADE BY THE ASSESSEE IN NOT TAKING INTO CONSIDERATION, THIS PRELIMINARY OBJECTION RAISED BY THE ASSESSEE TOWARDS RELIANCE ON THE REPORT OF SURVEY OFFICERS BEFORE THE AUTHORITIES BELOW AND ULTIMATELY HAS BEEN PLEASED TO DIRECT THE AUTHORITY TO CONSIDER THIS ISSUE DE NOVO AND TO PASS ORDERS IN ACCORDANCE WITH LAW AS SUBMITTED BY THE LEARNED AR AT THE TIME OF HEARING OF THE INSTANT APPEAL; COPY OF THE SAID JUDGEMENT HAS ALSO BEEN SUBMITTED BEFORE US BY THE LEARNED AR. HE, THEREFORE, PRAYED FOR SIMILAR RELIEF BEFORE US. ON THE CONTRARY, THE 3 I.T.A. NO. 292/RAN/2016 M/S. LAL FERRO ALLOYS CO. PVT. LTD. A.Y. 2010-11 LEARNED DR RELIED UPON THE ORDER OF ADDITION MADE BY THE LD. AO, SUBSEQUENTLY CONFIRMED BY THE FIRST APPELLATE AUTHORITY. 4. HEARD THE PARTIES, PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD INCLUDING THE ORDER PASSED BY THE CO-ORDINATE BENCH IN ITA NO. 173/RAN/2014, M/S. SALUJA STEEL & POWER PVT. LTD. VS ACIT, DHANBAD. WHILE DEALING WITH THIS IDENTICAL ISSUE, THE HONBLE TRIBUNAL HAS BEEN PLEASED TO OBSERVE AS FOLLOWS: REFERRING TO THE ABOVE, LEARNED COUNSEL OF THE ASSESSEE STATED THAT NOWHERE IN THE ACT IT HAS BEEN PROVIDED THAT THE ACT OF MAKING INVENTORY OF ANY CASH STOCK OR OTHER VALUABLE ARTICLE OR THING CHECKED OR VERIFIED DURING THE SURVEY CAN BE DONE BY ANY PERSON OTHER THAN THE INCOME-TAX AUTHORITY AS PROVIDED IN EXPLANATION A TO SECTION 133A. LEARNED COUNSEL OF THE ASSESSEE HAS CONTENDED THAT BY NO STRETCH OF IMAGINATION THE SURVEY OFFICERS OF BCCL CAN BE DEEM AS AN INCOME-TAX AUTHORITY. WE FIND THAT THE ASSESSEE HAS ALSO REITERATED ITS OBJECTION BEFORE THE LEARNED CIT(A) BUT THE LEARNED CIT(A) HAS NOT COMMENTED ON THIS ASPECT. UPON CAREFUL CONSIDERATION, IN OUR CONSIDERED OPINION, IT WAS INCUMBENT UPON THE AUTHORITIES BELOW TO GIVE PROPER REASONS AS TO WHY THEY ARE REJECTING THE PRELIMINARY OBJECTION OF THE ASSESSEE FOR THE RELIANCE ON REPORT OF THE SURVEY OFFICERS OF BCCL REGARDING THE DISCREPANCY FOUND DURING SURVEY CONDUCTED U/S 133A OF THE IT ACT. HONBLE APEX COURT IN THE CASE OF SAHARA INDIA (FIRM VS. CIT 300 ITR 403 (SC) HAS HELD THAT EVEN ADMINISTRATIVE ORDERS HAVE TO BE CONSISTENT WITH RULES OF NATURAL JUSTICE. ACCORDINGLY WE REMIT THE ISSUE TO THE FILE OF THE AO. THE AO IS DIRECTED TO CONSIDER THE ISSUE DE NOVO AND PASS A SPEAKING ORDER AFTER CONSIDERING ALL THE ASPECTS RAISED BY THE ASSESSEE. 5. WE FIND NO REASON TO DEVIATE FROM SUCH OBSERVATION MADE BY THE HONBLE CO-ORDINATE BENCH AND, THEREFORE, RESPECTFULLY RELYING UPON THE RATIO LAID DOWN IN THE SAID ITA NO. 173/RAN/2014, WE SET ASIDE THIS PARTICULAR ISSUE OF PRELIMINARY OBJECTION FOR THE RELIANCE ON 4 I.T.A. NO. 292/RAN/2016 M/S. LAL FERRO ALLOYS CO. PVT. LTD. A.Y. 2010-11 THE REPORT OF THE SURVEY OFFICERAS RAISED BY THE ASSESSEE TO THE FILE OF THE LD. CIT(A) TO CONSIDER THE SAME AFRESH IN ACCORDANCE WITH LAW IN THE LIGHT OF THE DECISION OF CO-ORDINATE BENCH IN ITA NO. 173/RAN/2014 M/S. SALUJA STEEL & POWER PVT. LTD. VS ACIT, DHANBAD IT IS FURTHER DIRECTED THAT THE LD. CIT(A) WILL ALSO GIVE AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND ALSO TO TAKE INTO CONSIDERATION THE EVIDENCE ON RECORD AND ALSO THE EVIDENCE WHICH THE ASSESSEE MAY CHOOSE TO FILE AT THE TIME OF HEARING OF THE APPEAL AFRESH. ON THIS ISSUE BY THE ASSESSEE AS INDICATED HEREINABOVE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS THUS, ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08 NOVEMBER, 2018. SD/- SD/- ( PRADIP KUMAR KEDIA) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 08/11/2019 BISWAJIT, SR. P.S. COPY OF ORDER FORWARDED TO: 1. M/S. LAL FERRO ALLOYS COMPANY PVT. LTD. 2. ACIT, CENTRAL CIRCLE, DHANBAD. 3. THE CIT(A) 4. THE CIT 5. DR TRUE COPY, BY ORDER, SR. P.S. / H.O.O. ITAT, RANCHI