Upendra Kumar Sharma, New Delhi V. DCIT, New Delhi

ITA 3140/DEL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4236 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-04-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 12-04-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 08-07-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N K CHAND
• Assessee Lawyers: AURAV ROHTAGI
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 153A; 143(2); 132

Judgement Text

ITA NOS. 3137,3138,3139,3140&3141/DEL/2009 A.YRS. 2000-01, 2002-03, 2003-04, 2005-06 & 2006-07 1 IN THE INCOMETAX APPELATE TRIBUNAL DELHI BENCH H: NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER & SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NOS. 3137, 3138, 3139, 3140 & 3141/DEL/2009 A.YRS. : 2000-01, 2002-03, 2003-04, 2005-06 & 2006-0 7 UPENDRA KUMAR SHARMA, VS. DCIT, C/O RAJ KUMAR & ASSOCIATES, CIRCLE 9(1), NEW DELHI CHARTERED ACCOUNTANTS, 4435/7, ANSARI ROAD, DARYA GANJ, NEW DELHI 110 002 [PAN : AANPS4928G] (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. RAJ KUMAR GUPTA, CA & SH. AURAV ROHTAGI, CA DEPARTMENT BY : SH. N.K. CHAND, SR. DR O R D E R PER BENCH THESE APPEALS BY THE ASSESSEE EMANATE OUT OF RESP ECTIVE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) FOR THE SEPARATE ASSESSMENT YEARS. SINCE THE ISSUES ARE CO NNECTED AND THE APPEALS WERE HEARD TOGETHER, THESE ARE BEING CONSOL IDATED AND DISPOSED OFF TOGETHER FOR THE SAKE OF CONVENIENCE. ITA NOS. 3137, 3138, 3139 & 3140/DEL/09 2. THE FIRST COMMON ISSUE RAISED IS THAT NO ADDITIO N CAN BE MADE U/S 153A IN THE ABSENCE OF ANY INCRIMINATING MATER IAL FOUND DURING SEARCH RELATING TO RELEVANT ISSUE. ITA NOS. 3137,3138,3139,3140&3141/DEL/2009 A.YRS. 2000-01, 2002-03, 2003-04, 2005-06 & 2006-07 2 2.1 BEFORE US LD. COUNSEL SUBMITTED THAT HE SHALL NOT BE PRESSING THIS GROUND. ACCORDINGLY, THIS GROUND IS DISMISSE D AS NOT PRESSED. 3. AS REGARDS THE MERITS OF THE CASE AT THE THRESHO LD IT HAS BEEN MENTIONED THAT NO REASONABLE OPPORTUNITY OF HEARING HAS BEEN ALLOWED AND THEREFORE THE IMPUGNED ASSESSMENT ORD ERS ARE ILLEGAL AND UNSUSTAINABLE. 3.1 ON THIS ISSUE IT HAS BEEN CONTENDED BY THE ASSE SSEE THAT WITHIN A SHORT SPAN OF FIVE DAYS, THE ASSESSMENT PROCESS FROM ISSUE OF NOTICE TO COMPLETION OF ASSESSMENT HAS BE EN COMPLETED IN A VERY HASTY MANNER. IT HAS BEEN CLAIMED THAT THE RE IS NO PROPER APPLICATION OF MIND BY THE ASSESSING OFFICER. MORE OVER, ASSESSEE HAS NOT BEEN PROVIDED ADEQUATE OPPORTUNITY TO CA NVASS THE CASE PROPERLY. IN THIS REGARD LD. COUNSEL OF ASSESSEE H AS GIVEN THE FOLLOWING CHRONOLOGY OF EVENTS:- SEARCH ON 30.08.2005. - NOTICE U/S 153A DATED 27.12.2007. - RETURN FILED ON 28.12.2007. - ONLY 1 QUESTIONNAIRE DATED 28.12.2007 AND NOTICE U/S 143(2) DATED 28.12.2007 ISSUED FOR 31.12.2007. - REPLY FILED ON 31.12.2007. - ASSESSMENT CLOSED AND ORDER DATED 31.12.2007. ITA NOS. 3137,3138,3139,3140&3141/DEL/2009 A.YRS. 2000-01, 2002-03, 2003-04, 2005-06 & 2006-07 3 3.2 IN THE LIGHT OF THE ABOVE LD. COUNSEL SUBMITTED THAT ISSUE ON MERITS MAY BE REMITTED BACK TO THE FILES OF THE ASS ESSING OFFICER TO CONSIDER THE SAME AFRESH. 3.3 LD. DEPARTMENTAL REPRESENTATIVE DID NOT HAVE A NY SERIOUS OBJECTION TO THIS PROPOSITION. 3.4 UPON CAREFUL CONSIDERATION, WE FIND THAT ASSESS ING OFFICER HAS MADE THE ASSESSEEMENT IN A VERY HASTY MANNER AND L D. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE SAME. THE CONTENTION OF THE ASSESSEE THAT ADEQUATE OPPORTUNI TY HAS NOT BEEN GRANTED HAS A DOLLOP OF COGENCY. IN THIS REGARD WE NOTE THAT HONBLE APEX COURT IN THE CASE M/S SAHARA INDIA (FARMS) VS. CIT & ANR. IN [2008] 300 ITR 403 HAS HELD THAT EVEN AN ADMINISTRATIVE ORDER HAS TO BE CONSISTENT WITH THE RULES OF NATURAL JUSTICE . IN OUR CONSIDERED OPINION, THE INTEREST OF JUSTICE WILL BE SERVED, I F THE MATTER IS REMITTED TO THE FILES OF THE ASSESSING OFFICER TO CONSIDER THE SAME AFRESH, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THE MATTER TO CONSIDER TH E MERITS OF THE CASE IS REMITTED TO THE FILES OF THE ASSESSING OFFI CER. HENCE, THESE APPEALS ARE PARTLY ALLOWED FOR STATISTICAL PURPO SES. ITA NO. 3141/DEL/09 4. THE FIRST ISSUE RAISED IN THIS CASE IS THAT THE SEARCH BEING CONDUCTED ON 30.8.2005, NO ASSTT. U/S 153A COULD HA D BEEN DONE FOR A.Y. 2006-07, CONSEQUENTLY, THE WHOLE PROCEED INGS COMMENCING FROM ISSUANCE OF NOTICE U/S 153A AND END ED WITH ITA NOS. 3137,3138,3139,3140&3141/DEL/2009 A.YRS. 2000-01, 2002-03, 2003-04, 2005-06 & 2006-07 4 FRAMING OF ASSTT. U/S 153A ARE WITHOUT JURISDICTION , ILLEGAL AND UNSUSTAINABLE IN LAW. 4.1 WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. WE CAN GAINFULLY REFER HERE THE PROVISION OF SECTIO N 153A IN THIS REGARD AS UNDER:- 153A. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SE CTION 139, SECTION 147, SECTION 148, SECTION 149, SECTI ON 151 AND SECTION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31 ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS 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 REQUIRED TO BE FURNISHED UNDER SECTION. 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ITA NOS. 3137,3138,3139,3140&3141/DEL/2009 A.YRS. 2000-01, 2002-03, 2003-04, 2005-06 & 2006-07 5 ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESSEE OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS: 4.2 A READING OF THE ABOVE MAKES IT CLEAR THAT SE CTION 153A MANDATES THE ASSESSING OFFICER TO ASSESS SIX ASSESS MENT YEARS IMMEDIATELY PRECEDING ASSESSMENT YEAR RELEVANT TO T HE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED. IN THIS C ASE THE SEARCH HAVING BEEN CONDUCTED ON 30.8.2005. THE PREVIOUS Y EAR OF THE SEARCH HENCE IS 2005-06 AND ASSESSMENT YEAR IS 200 6-07. SECTION 153A MANDATES ASSESSMENT OF SIX ASSESSMENT YEARS PRECEDING ASSESSMENT YEAR 2006-07. HENCE ASSESSMEN T YEAR 2006-07 ITSELF COULD NOT BE SUBJECT TO THE ASSESSM ENT U/S 153A. HENCE THE ASSESSEES CONTENTION HERE IS IN ACCORDAN CE WITH LAW. 4.3 LD. DEPARTMENTAL REPRESENTATIVE ON THIS ISSUE FAIRLY AGREED TO THIS PROPOSITION. HOWEVER, HE CLAIMED THAT IT WA S A MISTAKE ON THE PART OF THE REVENUE TO HAVE ISSUED NOTICE U/S 153A INSTEAD OF NOTICE OF REOPENING U/S 148. HENCE HE REQUESTED T HAT DIRECTION MAY BE GIVEN IN THIS REGARD. ITA NOS. 3137,3138,3139,3140&3141/DEL/2009 A.YRS. 2000-01, 2002-03, 2003-04, 2005-06 & 2006-07 6 4.4 UPON CAREFUL CONSIDERATION WE FIND OURSELVES IN AGREEMENT WITH THE CONTENTION OF THE LD. COUNSEL OF THE ASSES SEE THAT AS PER THE CLEAR PRESCRIPTION OF SECTION 153A ASSESSMENT YEAR 2006-07 WAS NOT TO BE THE SUBJECT MATTER OF ASSESSMENT U/S. 153A ON THE FACTS OF THE CASE, BASED UPON THE DATE OF SEARCH. ACCORDINGLY, WE HOLD THAT ASSESSMENT IN THIS CASE U/S 153A IS WITHOUT JURISDI CTION AND HENCE NOT UNSUSTAINABLE. SINCE WE ARE QUASHING THE ASSES SMENT ON THE JURISDICTION ITSELF, THE OTHER ISSUES RAISED IN THI S APPEAL ARE NOT BEING ADJUDICATED. ACCORDINGLY, THIS APPEAL FILED B Y THE ASSESSEE IS ALLOWED. 5. IN THE RESULT THE ASSESSEES APPEAL NO. 3137, 31 38, 3139 & 3140/DEL/09 ARE PARTLY ALLOWED FOR STATISTICAL PUR POSES AND APPEAL NO. 3142/DEL/09 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12/04/2010 UP ON CONCLUSION OF THE HEARING. SD/- SD/- [C.L. SETHI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 12/04/ 2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES