DCIT, New Delhi V. M/s S.G. Portfolio Pvt. Ltd., Delhi

ITA 3127/DEL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7613 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 27-11-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 17-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Search and seizure; Accommodation entries; Block assessment
• Section: 143(3); 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER I.T.A .NO. - 3 127 /DEL/201 3 (ASSESSMENT YEAR - 2010 - 11 ) DCIT VS. M/S S.G. PORTFOLIO (P.) LTD. CIRCLE - 9 , ROOM NO.357, 191, 2 ND FLOOR , NAYA BANS, ARA CENTRE, E - 2, DELHI - 11000 6 . JHANDEWALAN EXTN. NEW DELHI. PAN: AA HCS6810N (APPELLANT) (RESPONDENT) REVENUE BY: - SH. B. R.R. KUMAR, SR.DR. ASSESSEE BY: - SH. ASHWANI TANEJA , ADV. & SH. TARUN KUMAR, ADV. DATE OF HE A RING: 27.11.2014 ORDER PRONOUNCED ON: 27.11.2014 ORDER PER N. K. SAINI, AM THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 1 3.02.2013 OF LD. CIT (APPEALS) - XX XII , NEW DELHI. 2. F OLLOWING GROUND S HAVE BEEN RAISED IN THIS APPEAL : 1. THAT THE ASSESSMENT ORDER IS BAD IN LAW AS IT HAS BEEN PASSED IN TOTAL DISREGARD OF THE PROVISIONS OF THE INCOME TAX ACT AND EQUITY AND JUSTICE, SINCE ADEQUATE OPPORTUNITY WAS NOT AFFORDED TO THE ASSESSEE TO PRESENT ITS CASE. 2. ON FACTS WHILE FRAMING THE ASSESSMENT THE AO S OBSERVATION THAT NO RETURN HAS BEEN FILED IS INCORRECT. THE ASSESSEE HAD DULY FILED ITS RETURN ON 21.03.2011 DECLARING INCOME OF RS.4,317/ - AND AFTER CLAIMING CREDIT OF TDS OF RS.41,639/ - A NET REFUND OF RS.40,304/ - WAS CLAIMED. 2 3. ON FACTS AND LAW THE ASSESSING OFFICER WAS WHOLLY UNJUSTIFIED IN DISALLOWING EXPENDITURE OF RS.9,80,951/ - MORE SO WHEN THE EXPENDITURE IN QUESTION HAD BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PUR POSE OF BUSINESS. 4. ON FACTS AND LAW THE ASSESSING OFFICER WAS WHOLLY UNJUSTIFIED IN ADDING UNEXPLAINED CASH DEPOSITS OF RS.16,62,000/ - IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS MORE SO WHEN ON PAGE 4 OF THE ORDER IT HAS BEEN MENTIONED THAT SH. MANOJ KUMAR HAS ADMITTE D THAT HE HAD DEPOSITED CASH BELONGING TO BENEFICIARIES ON BEHALF OF ASEEM KUMAR GUPTA IN VARIOUS ACCOUNTS OF PROPRIETORSHIP CONCERNS AND COMPANIES. FURTHER ON PAGE 4 OF THE ORDER IT HAS BEEN CLEARLY MENTIONED THAT SH.ASEEM KUMAR GUPTA HAS ADMITTED TO HAV E USED THE BANK ACCOUNT OF THE ASSESSEE FOR PROVIDING ACCOMMODATION ENTRIES. IT THUS STANDS ESTABLISHED THAT THE CASH DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE DOES NOT BELONG TO IT AND ADDITION, IF ANY, IS REQUIRED TO BE MADE IN THE HANDS OF SH. ASEE M KUMAR GUPTA OR THE BENEFICIARIES. 5. ON THE FACTS AND QUESTIONNAIRE WAS ISSUED ONLY ON 01.12.2011 AND THE ASSTT. COMPLETED ON 26.12.2011. THUS PRACTICALLY SUFFICIENT TIME WAS NOT ALLOWED TO THE ASSESSEE TO FILE THE VOLUMINOUS INFORMATION CALLED FOR AS M ANY AS SEVEN ASSESSMENT YEARS. THE ASSESSEE, THEREFORE, SEEKS LEAVE FILE REQUISITE EVIDENCE DURING THE COURSE OF APPELLATE PROCEEDINGS. 6. ON THE FACTS AND LAW THE ASSESSING OFFICER WAS WHOLLY UNJUSTIFIED IN MAKING ADDITION ON PROTECTIVE BASIS OF UNEXPLAIN ED OTHER DEPOSITS OF RS.8,98,24,566/ - , MORE SO WHEN HE HAS RECORDED A CLEAR FINDING THAT THE ADDITION AS PER LAW WAS REQUIRED TO BE MADE IN THE HANDS OF THE PERSONS WHO WERE THE BENEFICIARIES. 3. THE FACTS OF THE CASE IN BRIEF ARE THAT A SEARCH AND SEIZU RE OPERATION WAS CONDUCTED ON 26.03.2010 AT VARIOUS PREMISES OF ONE SHRI ASEEM KUMAR GUPTA WHO WAS ADMITTEDLY ENGAGED IN PROVIDING ACCOMMODATION ENTRIES TO SEVERAL BENEFICIARIES. THE SEARCH AND SEIZURE ACTION ALSO COVERED PREMISES OF SEVERAL BENEFICIARIES INCLUDING THAT OF THE ASSESSEE. THE AO ISSUED A NOTICE U/S153C ON 3 8.11.2011 REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME. IN RESPONSE TO THAT ASSESSEE FILED THE RETURN DECLARING AN INCOME OF RS.4,316/ - . SUB SEQUENTLY THE NOTICES U/S 142(1) AND 143(2) OF THE ACT ALONG WITH QUESTIONNAIRE WERE ISSUED AND ULTIMATELY THE ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT . O N 26.12.2011 AT AN INCOME OF RS.9,24,71,830/ - . 4. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT( A) AND CHALLENGED THE VALIDITY OF THE ASSESSMENT ORDER AND FILED WRITTEN SUBMISSION WHICH HAS BEEN INCORPORATED IN PARA 4 & 5 OF THE IMPUGNED ORDER , THE SAME IS NOT REPRODUCED ON ACCOUNT OF REPETITION HEREIN. THE LD. CIT(A) ALSO ASKED THE REMAND REPORT FRO M THE AO WH O FURNISH THE SAME VIDE LETTER DATED 30.1.2013 AND AGAIN VIDE LETTER DATED 4.2.2013 STATING THEREIN AS UNDER: IN THIS REGARD, IT IS SUBMITTED THAT THE ASSTT. RECORDS HAVE BEEN PERUSED, AND FOUND THAT THE NOTICE U/S 143(2) FOR AY 2010 - 11 WAS IS SUED ON 12.12.2011. THE RETURN OF INCOME WAS E - FILED ON 21.03.2011. 5 . THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND T HE REMAND REPORT OF THE AO HELD THAT THE ASSESSMENT ORDER PASSED ON 26.12.2011 U/S 143(3) OF THE ACT W AS NULL AND VOID . 6 . NOW THE DEPARTMENT IS IN APPEAL. THE LD. DR STRONGLY SUPPORTED THE ORDER OF THE AO AND REITERAT ED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER DATED 26.12.2011. 7 . IN HIS RIVAL SUBMISSIONS, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY SUPPORTED THE 4 IMPUGNED ORDER . R ELIANCE WAS PLACED ON THE JUDGMENT OF THE HON BLE SUPREME COURT IN THE CASE OF ACIT AND ANOTHER VS. HOTEL BLUE MOON 321 ITR 362 (SC) AND THE JUDGMENT OF THE HON BLE GUJAR AT HIGH COURT IN THE CASE OF CIT VS. PANORAMA BUILDERS PVT . LTD. (GUJ). (COPY OF THE JUDGMENT WAS FURNISHED WHICH IS PLACED ON RECORD.) 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE IT IS AN ADMITTED FACT THAT THE NOTICE U/S 153C OF THE ACT WAS ISSUED BY THE AO ON 8.11.2011 AND THE ASSESSMENT ORDER WAS PASSED ON 26.12.2011. THE ASSESSMENT IN THIS CASE WAS TO BE FRAMED TILL 30.9.2011 I.E. WITHIN SIX MONTHS FROM THE END OF THE FINA NCIAL YEAR IN WHICH RETURN WAS FILED. THE RETURN OF INCOME WAS E - FILED ON 21.3.2011 THEREFORE, THE ASSESSMENT ORDER DATED 26.12.2011 PASSED U/S 143(3) OF THE ACT WAS BARRED BY LIMITATION AND NULL & VOID AB INITIO. 9 . FOR THE AFORESAID VIEW, WE ARE FORTIFIED BY THE RATIO LAID DOWN BY THE HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. PANORAMA BUILDERS PVT. LTD. (SUPRA) WHEREIN THEIR LORDSHIP HELD IN PARA 14 OF THE JUDGMENT AS UNDER: 14. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT SECTION 29 2BB DOES NOT APPLY TO ISSUANCE OF NOTICE, NEITHER IT CURES THE DEFECT OR ENLARGES STATUTORY PERIOD WHERE A MANDATORY NOTICE UNDER SECTION 143(2) OF THE ACT IS REQUIRED TO BE ISSUED WITHIN LIMITATION FIXED UNDER THE ACT. IN ABSENCE OF ISSUANCE OF THE NOTICE UNDER THE PROVISO TO SECTION 143(2) OF THE ACT WITHIN A PERIOD OF 12 MONTHS FROM THE END OF THE MONTH IN WHICH RETURN WAS FURNISHED BY THE 5 ASSESSEE, THE PROCEEDINGS INITIATED BY THE ASSESSING OFFICER WITH REGARD TO BLOCK ASSESSMENT PERIOD 1.4.1997 TO 25.7 .2002 ON THE BASIS OF NOTICE ISSUED ON 6.7.2006 UNDER SECTION 143(2), AFTER ABOUT 20 MONTHS, WAS TIME BARRED AND THE ENTIRE PROCEEDINGS IN PURSUANCE OF SUCH NOTICE IS NULL AND VOID. 10 . IN THE INSTANT CASE ALSO, FOR COMPLETING THE ASSESSMENT U/S 143(3) OF THE ACT, A NOTICE U/S 143(2) WAS REQUIRED TO BE ISSUED ON OR BEFORE 30.0 9 .2011 . HOWEVER, THE NOTICE WAS ISSUED ON 12.12.2011 WHICH WAS BEYOND TIME AS SUCH THE ASSESSMENT ORDER U/S 143(3) DATED 26.12.2011 WAS NULL AND VOID AND THE LD. CIT(A) RIGHTLY HELD SO. WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT. 1 1 . IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 /11/2014. SD/ - SD/ - (A. T. VARKEY) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 /11/2014 *AK VERMA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR