RAJU R SHETE, MUMBAI V. ASST CIT CEN CIR 33, THANE

ITA 3272/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5059 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-09-2013
• Assessment Year: 1998-1999
• Appeal Filed On: 10-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYAL
• Assessee Lawyers: M A GOHEL
• Keywords: Search and seizure
• Section: 244A; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D, MUMBAI . . , ! ' , # $ BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : 3272 / / 2012 A.Y. 1998-99 ITA NO. : 3272/MUM/2012 (ASSESSMENT YEAR: 1998-99) . : 3273 / / 2012 A.Y. 2006-07 ITA NO. : 3273/MUM/2012 (ASSESSMENT YEAR: 2006-07) SHRI RAJU R. SHETE, 7-A, LOHTSE, RUIA PARK, JUHU TARA ROAD, JUHU, MUMBAI -400 049 .: PAN: AALPS 9355 D VS ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -3,/ 9 TH FLOOR, VARDAAN, MIDC, WAGLE ESTATE, THANE -400 604 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.A. GOHEL RESPONDENT BY : SHRI KISHAN VYAL /DATE OF HEARING : 12-09-2013 !' / DATE OF PRONOUNCEMENT : 13-09-2013 ( O R D E R ! ' , : PER VIVEK VARMA, JM: ITA NO. 3272/MUM/2012, AY 1998-99 : THE APPEAL ARISES FROM THE ORDER OF THE CIT(A) 1, THANE, D ATED 07.02.2012, WHEREIN, THE ASSESSEE RAISED THE FOLLOWING GROUNDS: 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A )] ERRED IN DISMISSING THE APPEAL ON THE GROUND THAT THE GROUND S OF APPEAL RAISED SHRI RAJU R. SHETE ITAS 3272 & 3273/M/2012 2 BY THE APPELLANT ARE NOT ARISING FROM THE ORDER PAS SED BY THE ASSESSING OFFICER GIVING EFFECT TO THE ORDER OF THE CIT(A). 2. THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEA L WITHOUT CONSIDERING THE ARGUMENTS OF THE APPELLANT AND THE MERITS OF TH E CASE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED ASSESSING OFFICER ERRED IN GIVING CREDIT FO R A SUM OF RS. 250,000, BEING CASH SEIZED DURING THE COURSE OF SEA RCH AT THE RESIDENTIAL PREMISES OF THE APPELLATE ON 20.11.1998 , WHILE PASSING THE ORDER GIVING EFFECT TO THE APPELLATE ORDER FOR ASSE SSMENT YEAR 1998- 1999 INSTEAD OF PASSING A SEPARATE ORDER GRANTING R EFUND FOR THE SAME INTEREST THEREON. 4. THE LEARNED ASSESSING OFFICER ERRED IN NOT GRATI NG INTEREST UNDER SECTION 244A OF THE ACT FOR THE PERIOD FROM 20.11.1998 TO 2 0.03.2007 WHILE GRANTING CREDIT FOR THE CASH SEIZED AS ABOVE IN ORD ER GIVING EFFECT TO THE APPELLATE ORDER FOR THE ABOVE YEAR. 5. IT IS SUBMITTED THAT IT IS A SETTLED LAW THAT WH EREVER THE ASSESSEE IS ENTITLED TO REFUND, THERE IS A STATUTORY LIABILITY ON THE REVENUE TO PAY INTEREST ON SUCH REFUND ON GENERAL PRINCIPLES TO PA Y INTEREST ON SUMS WRONGFULLY RETAINED BY IT. SINCE THE DEPARTMENT WRO NGFULLY RETAINED THE ABOVE REFERRED SUM OF RS. 250,000 FOR SUCH A LONG P ERIOD, THE APPELLANT IS ENTITLED TO INTEREST THEREON RIGHT SINCE THE SEI ZURE THEREOF TILL REFUND THEREOF. 2. THE SOLITARY ISSUE PERTAINS TO ADJUSTMENT OF CASH SEIZ ED AND COMPUTATION OF INTEREST THEREON BY THE DEPARTMENT. 3. THE FACTS ARE THAT THERE WAS A SEARCH AND SEIZURE OPERATIONS U/S 132 ON THE ASSESSEE ON 20.11.1998, WHEREIN CASH OF RS. 25 0,000/- WAS SEIZED. 4. IN THE ASSESSMENT PROCEEDINGS PURSUANT TO SEARCH, THE CIT(A) DIRECTED TO GIVE CREDIT FOR CASH SEIZED. IN THE APPEAL GIV ING EFFECT TO THE CIT(A) ORDER DATED 24.09.2007, THE AO PASSED ORDER DATED 20.11.2007. IN THE COMPUTATION FRAMED ALONG WITH THE ORDER GIVING EFFEC T AS ON 20.11.2007, THE AO COMPUTED THE CREDIT OF INTEREST ON CA SH SEIZED FROM 21.03.2007 TO 20.11.2007 U/S 244A(1)(B). 5. THE ISSUE WAS AGITATED BEFORE THE CIT(A), WHO DISMISSED THE APPEAL HOLDING THAT THE IMPUGNED GROUND DOES NOT ARISE FR OM THE ORDER GIVING EFFECT TO THE ORDER PASSED BY CIT(A). 6. THE AR POINTED OUT THAT THE ISSUE IS IN CONTINUATION OF THE ORIGINAL PROCEEDINGS AND HENCE THE ISSUE IS ALIVE. HE, PRAYED THAT THE COMPUTATION OF INTEREST ON THE SEIZED CASH SHOULD BE MAD E FROM THE SHRI RAJU R. SHETE ITAS 3272 & 3273/M/2012 3 DATE OF SEARCH TO THE DATE OF ORDER GIVING EFFECT, I.E. FROM 2 0.11.1998 TO 20.03.2007. 7. THE DR ON THE OTHER HAND SUBMITTED THAT THE ISSUE BE ALLOWED TO BE DISPOSED OFF BY THE CIT(A) ON THE FACTS ARISING OUT OF TH E VARIOUS ORDERS. 8. WE HAVE HEARD THE ARGUMENTS OF THE PARTIES AND WE ARE IN AGREEMENT WITH THE ARGUMENTS OF THE ASSESSEE THAT THE COMPUTATION OF INTEREST U/S 244 IS TO BE COMPUTED FROM THE DATE OF SEA RCH UPTO THE DATE OF FINALIZATION OF THE ASSESSMENT PROCEEDINGS. WE CANNO T ACCEPT THE ARGUMENT OF THE CIT(A) IN THE IMPUGNED ORDER AND THE ARGUMENT OF THE DR THAT THE ISSUE DOES NOT ARISE FROM THE IMPUGNED ORDER. IN OUR OPINION, THE ISSUE OF INTEREST BECAME A PART OF THE ASSESS MENT PROCESS FROM THE DATE OF SEARCH, WHEN THE CASH WAS SEIZED. IN FA CT, THE INTEREST STARTED TO TICK FROM THAT DAY. WE, THEREFORE, ARE OF THE O PINION THAT THE ISSUE OF INTEREST GERMANE FROM AND ON 20.11.1998 TILL THE DATE OF REFUND COMPUTED, I.E. 20.03.2007 AND COMPUTATION OF INTEREST DONE BY THE AO U/S 244A(1)(B). 9. IN THE LIGHT OF OUR OBSERVATION MADE AS ABOVE, WE RES TORE THE ISSUE TO THE FILE OF THE CIT(A), WHO SHALL FRAME THE ORDER AFRE SH BASED ON THE COMPUTATIONS AND ORDERS PASSED FOR ASSESSMENT YEAR 1998-99 IN VARIOUS PROCEEDINGS. 10. THE APPEAL FILED BY THE ASSESSEE, THEREFORE, ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 3273/MUM/2012, AY 2006-07 : 11. THE INSTANT APPEAL IS FILED BY THE ASSESSEE AGAINST T HE ORDER OF CIT(A) 1, THANE, DATED 29.02.2012. 12. AT THE TIME OF HEARING, THE AR SUBMITTED THAT THE IN STANT PROCEEDINGS WERE IN CONSEQUENCE AND PURSUANT TO ACTIO N U/S 263 TAKEN BY THE CIT. THE AR SUBMITTED THAT THE ASSESSEE FILED AN APPEAL SHRI RAJU R. SHETE ITAS 3272 & 3273/M/2012 4 BEFORE THE ITAT, MUMBAI AGAINST THE SAID ACTION OF THE CI T. THE COORDINATE BENCH IN ITAS NO. 2902 AND 2904/MUM/2011 SE T ASIDE THE ORDER OF THE CIT, PASSED U/S 263, RESTORING THE ORDER O F THE AO (COPY OF THE ORDER PLACED BEFORE US). SINCE, THE FOUNDATION OF THE IMP UGNED PROCEEDINGS ITSELF HAS BEEN DEMOLISHED, THE EDIFICE OF THE PR ESENT PROCEEDINGS CANNOT BE ENTERTAINED. 13. SINCE ORDER U/S 263 IS SET ASIDE, THE PRESENT PROCE EDINGS ARE VOID. WE, THEREFORE, ANNUL THE INSTANT PROCEEDINGS AND THE ORDERS OF THE AO AND CIT(A). IT MAY BE MENTIONED THAT SPECIFIC GROUN D HAD NOT BEEN TAKEN BY THE ASSESSEE, NOR ANY ADDITIONAL GROUND W AS FILED. BUT WE PROCEED TO ENTERTAIN THE ARGUMENT AND THE GROUND TAKEN BY THE ASSESSEE ORALLY, AS THE ISSUE GOES TO THE ROOT OF THE ASSESSMENT. 14. THE APPEAL FILED BY THE ASSESSEE IS, THEREFORE, ALLOWED. 15. IN THE RESULT, ITA NO. 3272/MUM/2012 IS ALLOWED FOR STATISTICAL PURPOSES ITA NO. 3273/MUM/2012 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPTEMBER, 2013. SD/- SD/- ( . . ) ( ! ' ) (R.S. SYAL) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 13 TH SEPTEMBER, 2013 / COPY TO:- 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) & & ' ( ) I, / THE CIT (A)-I, THANE. 4) & & ' / CITII , / THE CITII, THANE, 5) *+, - . , & - , /0 / SHRI RAJU R. SHETE ITAS 3272 & 3273/M/2012 5 THE D.R. D BENCH, MUMBAI. 6) ,. 1 COPY TO GUARD FILE. &23 / BY ORDER / / TRUE COPY / / [ 4 / 5 6 & - , /0 DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *895 . . * CHAVAN, SR. PS