Mr. Vijay Kumar, Uttar Pradesh V. ACIT, New Delhi

ITA 3495/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4324 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 01-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Assessee Lawyers: B K DHINGRA
• Keywords: Additional evidence
• Section: 153A; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 3489/DEL/2015 ASSESSMENT YEAR: 2003-04 ITA NO. 3490/DEL/2015 ASSESSMENT YEAR: 2004-05 ITA NO. 3491/DEL/2015 ASSESSMENT YEAR: 2005-06 ITA NO. 3492/DEL/2015 ASSESSMENT YEAR: 2006-07 ITA NO. 3493/DEL/2015 ASSESSMENT YEAR: 2007-08 ITA NO. 3494/DEL/2015 ASSESSMENT YEAR: 2008-09 ITA NO. 3495/DEL/2015 ASSESSMENT YEAR: 2009-10 VIJAY KUMAR, VS ACIT, VILLAGE DARKULI, CENT. CIRCLE 16, TEHSIL/POST-SASNI, ROOM NO. 344, 3 RD FLOOR, MAHA MAYA NAGAR, HATRAS, E-2, ARA CENTRE, UTTAR PRADESH JHANDEWALAN EXTENSION, (PAN: BANPK8254N) NEW DELHI-110055 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B.K. DHINGRA, FCA RESPONDENT BY : SMT. APARNA KARAN CIT(DR) DATE OF HEARING: 10.10.2018 DATE OF PRONOUNCEMENT : 31.10.2018 ITA NO. 3489 TO 3495/DEL/2015 ASSESSMENT YEARS: 2003-04 TO 2009-10 2 ORDER PER SUDHANSHU SRIVASTAVA, J.M. ALL THE SEVEN APPEALS HAVE BEEN PREFERRED BY THE AS SESSEE AND THE RELEVANT DATES OF THE IMPUGNED ORDER/S AS W ELL AS ASSESSMENT YEARS ARE AS UNDER:- ITA NO. A.Y. DATE OF IM PUGNED ORDER 3489/D/2015 2003-04 24.04.2015 3490/D/2015 2004-05 24.04.2015 3491/D/2015 2005-06 24.04.2015 3492/D/2015 2006-07 24.04.2015 3493/D/2015 2007-08 24.04.2015 3494/D/2015 2008-09 24.04.2015 3495/D/2015 2009-10 24.04.2015 1.1 ALL THESE APPEALS WERE HEARD TOGETHER AND FOR THE SAKE OF CONVENIENCE, THEY ARE BEING DISPOSED OF THROUGH THI S COMMON ORDER. 1.2 FOR THE SAKE OF CONVENIENCE, WE ARE TAKING UP I TA NO. 3489/DEL/2015 PERTAINING TO ASSESSMENT YEAR 2003-04 AS THE LEAD CASE. THE FACTS ARE IDENTICAL IN ALL THE SEVEN YEARS UNDER APPEAL BEFORE US. 2.0 BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND S EIZURE ACTION U/S 132 OF THE INCOME TAX ACT, 1961 (HEREINAFTER RE FERRED TO AS 'THE ACT') WAS CARRIED OUT IN THE CASES OF SHRI B.K . DHINGRA, SMT. ITA NO. 3489 TO 3495/DEL/2015 ASSESSMENT YEARS: 2003-04 TO 2009-10 3 POONAM DHINGRA AND M/S MADHUSUDAN BUILDCON PVT. LTD . ON 20.10.2008 AND DURING THE COURSE OF SEARCH AT THE R ESIDENTIAL PREMISES AT F-6/5, VASANT VIHAR, NEW DELHI, CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE WERE SEIZED. ON THE BASI S OF DOCUMENTS SO FOUND, AFTER RECORDING SATISFACTION, PROCEEDINGS WERE INITIATED U/S 153C READ WITH SECTION 153A OF THE ACT. STATUT ORY NOTICES WERE ISSUED REQUIRING THE ASSESSEE TO FURNISH RETUR N OF INCOME BUT THE ASSESSEE NEITHER FURNISHED THE RETURN OF IN COME NOR COOPERATED IN THE ASSESSMENT PROCEEDINGS, THEREFORE , THE ASSESSMENT WAS COMPLETED U/S 144 R/W SECTION 153C O F THE ACT FOR ASSESSMENT YEAR 2003-04 AT AN ESTIMATED INCOME OF RS. 2,00,000/-. 2.1 SIMILARLY IN ASSESSMENT YEAR 2004-05, THE ASSES SMENT WAS COMPLETED U/S 144 R/W SECTION 153C OF THE ACT AT AN ESTIMATED INCOME OF RS. 3,00,000/- IN VIEW OF THE ASSESSEES FAILURE TO FURNISH RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153C OF THE ACT AS WELL AS HIS NON-COOPERATION DURING THE COURS E OF ASSESSMENT PROCEEDINGS. 2.2 LIKEWISE IN ASSESSMENT YEAR 2005-06, ON SIMILAR FACTS, DUE TO NON-FILING OF RETURN AND NON-COOPERATION OF THE ASSESSEE DURING ITA NO. 3489 TO 3495/DEL/2015 ASSESSMENT YEARS: 2003-04 TO 2009-10 4 THE COURSE OF ASSESSMENT PROCEEDINGS, THE INCOME WA S ESTIMATED AT RS. 4,00,000/-. 2.3 IN ASSESSMENT YEAR 2006-07 AGAIN, DUE TO NON-FI LING OF RETURN AND NON-COOPERATION BY THE ASSESSEE DURING T HE COURSE OF ASSESSMENT PROCEEDINGS U/S 153C ACT, THE INCOME OF THE ASSESSEE WAS DETERMINED BY ESTIMATE AT RS. 5,00,000/- 2.4 LIKEWISE, THE INCOME WAS ESTIMATED AT RS. 6,00, 000/- U/S 144 R/W SECTION 153C OF THE ACT IN AY 2007-08. 2.5 IN ASSESSMENT YEAR 2008-09, THE ESTIMATE OF INC OME MADE U/S 153C WAS RS. 8,00,000/-. 2.6 IN ASSESSMENT YEAR 2009-10, THE INCOME WAS ESTI MATED AT RS. 10,00,000/- UNDER SIMILAR CIRCUMSTANCES. 2.7 AGGRIEVED, THE ASSESSEE APPROACHED THE LD. CIT (A) AND CHALLENGED THE INITIATION OF PROCEEDINGS U/S 153C O F THE ACT FOR AY 2003-04 AND 2004-05 ON THE GROUND THAT THESE TWO YEARS FELL OUTSIDE THE OUTER LIMIT OF SIX YEARS FOR WHICH 153C PROCEEDINGS COULD BE INITIATED AS THE SATISFACTION NOTE IN THE CASE OF THE ASSESSEE WAS RECORDED ON 1.10.2010 AND, THEREFORE, THE SIX YEARS TO BE COVERED WOULD BE ONLY FROM AY 05-06 TO AY 10- 11. WITH RESPECT TO THE ASSESSMENTS OF AY 05-06 TO AY 2009-1 0, THE ASSESSEE SUBMITTED THAT NO MATERIAL BELONGING TO TH E ASSESSEE ITA NO. 3489 TO 3495/DEL/2015 ASSESSMENT YEARS: 2003-04 TO 2009-10 5 HAD BEEN SEIZED. HOWEVER, THE LD. CIT (A) DID NOT ACCEPT THE ASSESSEES CONTENTIONS AND HELD THAT THE PROCEEDING S WERE VALIDLY INITIATED IN ASSESSMENT YEARS UNDER APPEAL AND DISM ISSED THE ASSESSEES APPEALS. 2.8 AGGRIEVED, THE ASSESSEE IS NOW BEFORE THE ITAT AND HAS CHALLENGED THE ORDER OF THE LD. CIT (A) IN UPHOLDIN G THE ASSESSMENT PROCEEDINGS U/S 153C/144 OF THE ACT. 3.0 THE LD. AR DREW OUR ATTENTION TO THE SATISFACTI ON NOTE RECORDED IN THE CASE OF THE ASSESSEE AND SUBMITTED THAT THE SAID SATISFACTION NOTE WAS NOT VALID TO ASSUME JURISDICT ION U/S 153C AS THE SATISFACTION NOTE HAD NOT BEEN RECORDED BY T HE SPECIFIED AUTHORITY UNDER THE ACT I.E. THE ASSESSING OFFICER OF THE SEARCHED PARTY. DRAWING OUR ATTENTION TO THE SATISFACTION N OTE, IT WAS FURTHER SUBMITTED THAT THERE WAS NOT THE REMOTEST I NDICATION IN THIS NOTE THAT THE SAME WAS RECORDED DURING THE COU RSE OF ASSESSMENT OF THE SEARCHED PERSON. IT WAS A MERE N OTING BY THE ASSESSING OFFICER OF THE ASSESSEE (OTHER THAN SEARC HED PERSON) BEFORE THE ISSUANCE OF NOTICE U/S 153C OF THE ACT. IT WAS FURTHER SUBMITTED THAT THE SEARCH TOOK PLACE ON 20.10.2008 WHEREAS THE SATISFACTION NOTE ON THE BASIS OF WHICH ACTION U/S 153C OF THE ACT WAS TAKEN WAS DATED 01.10.2010 AND, THEREFORE, WITH REFERENCE TO ITA NO. 3489 TO 3495/DEL/2015 ASSESSMENT YEARS: 2003-04 TO 2009-10 6 THE SATISFACTION NOTE, THE YEAR OF SEARCH WAS ASSES SMENT YEAR 2011-12 AND THE SIX EARLIER YEARS SHOULD BE FROM AS SESSMENT YEAR 2005-06 TO 2010-11. IT WAS SUBMITTED THAT THEREFOR E, THE ASSESSMENTS FRAMED FOR ASSESSMENT YEARS 03-04 AND 0 4-04 WERE ILLEGAL. THE LD. AR ALSO PLACED ON RECORD COPY OF ORDER OF ITAT DELHI BENCH IN THE CASE OF TANVIR COLLECTIONS PVT. LTD. VS. ACIT REPORTED IN (2015) 168 TTJ 145(DELHI TRIBUNAL) AND SUBMITTED THAT THIS ASSESSEE I.E. TANVIR COLLECTIONS PVT. LTD . BELONGED TO THE SAME GROUP IN WHICH THE SEARCH WAS CARRIED OUT AND THE SATISFACTION NOTE AS REPRODUCED IN PARA 12 OF THE S AID ORDER OF ITAT WAS VERBATIM COPY OF THE SATISFACTION NOTE AS RECORDED IN THE ASSESSEES CASE. IT WAS FURTHER SUBMITTED THAT IN THIS CASE OF TANVIR COLLECTIONS PVT. LTD., THE ITAT DELHI BENCH HAD HELD THAT THERE WAS ABSENCE OF VALID SATISFACTION AND, THEREF ORE, THE SAME DID NOT CONFER ANY VALID AND LAWFUL JURISDICTION ON THE ASSESSING OFFICER OF THE ASSESSEE TO PROCEED WITH ASSESSMENT U/S 153C OF THE ACT. THE LD. AR FURTHER SUBMITTED THAT THIS OR DER OF THE ITAT WAS SUBSEQUENTLY UPHELD BY THE HONBLE DELHI HIGH C OURT IN THE CASE OF PR. CIT VS. TANVIR COLLECTIONS PVT. LTD. VI DE ORDER DATED 28.2.2018 IN ITA 264/2018. IT WAS FURTHER SUBMITTE D THAT THE DEPARTMENTS SPECIAL LEAVE PETITION AGAINST THE ORD ER OF THE ITA NO. 3489 TO 3495/DEL/2015 ASSESSMENT YEARS: 2003-04 TO 2009-10 7 HONBLE DELHI HIGH COURT WAS ALSO DISMISSED A COPY OF THESE TWO ORDERS WERE ALSO PLACED ON RECORD. IT WAS SUBMITTE D THAT IN VIEW OF IDENTICAL ISSUE IN THE CASE OF THE ASSESSEE BELO NGING TO THE SAME GROUP HAVING BEEN DECIDED IN FAVOUR OF THE ASS ESSEE, THE ASSESSEES APPEALS FOR THE CAPTIONED YEARS SHOULD B E ALLOWED. 3.1 THE LD. AR FURTHER PLACED ON RECORD A COPY OF T HE REMAND REPORT DATED 21/04/2014 SUBMITTED BY THE AO BEFORE THE LD. CIT (A) IN RESPECT OF ADMISSION OF ADDITIONAL EVIDENCES UNDER RULE 46A OF THE INCOME TAX RULES AND SUBMITTED THAT THIS REM AND REPORT WAS FOR ASSESSMENT YEARS 2003-04 TO 2009-10, I.E. A LL THE YEARS UNDER APPEAL IN WHICH IT HAD BEEN MENTIONED BY THE AO THAT ADMITTEDLY THERE WAS NO INCRIMINATING MATERIAL BELO NGING TO THE ASSESSEE WHICH WAS SEIZED DURING THE SEARCH PROCEED INGS IN THE CASES OF SHRI BK DHINGRA AND SMT. POONAM DHINGRA. I T WAS SUBMITTED THAT IN VIEW OF THIS FACTS ALSO, THE ASSE SSMENTS COULD NOT BE SUSTAINED. 4.0 IN RESPONSE, THE LD. CIT DR PLACED RELIANCE ON THE ORDER OF THE LOWER AUTHORITIES AND VEHEMENTLY ARGUED THAT AS SESSMENT PROCEEDINGS HAD RIGHTLY BEEN INITIATED IN THIS REGA RD. THE LD. CIT DR ALSO PLACED RELIANCE ON THE JUDGMENT OF THE HON BLE DELHI HIGH COURT IN THE CASE OF PCIT VS. SUPER MALLS PVT. LTD REPORTED ITA NO. 3489 TO 3495/DEL/2015 ASSESSMENT YEARS: 2003-04 TO 2009-10 8 IN 393 ITR 557 (DEL) FOR THE PROPOSITION THAT THE S ATISFACTION NOTE RECORDED BY THE OFFICER ISSUING NOTICE U/S 153C IS SUFFICIENT IF THE ASSESSING OFFICER OF THE SEARCHED PERSON AND THE TH IRD PARTY ARE THE SAME. IT WAS VEHEMENTLY ARGUED THAT THE APPEAL S DESERVED TO BE DISMISSED. 5.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT EVEN WIT HOUT GOING INTO THE QUESTION OF THE VALIDITY OR OTHERWISE OF THE SA TISFACTION NOTE, THE OBSERVATIONS OF THE AO IN THE REMAND REPORT ARE SUFFICIENT TO CLINCH THE ISSUE IN ASSESSEES FAVOUR. IT IS SEEN T HAT IN THE REMAND REPORT DATED 21.04.2014 WHICH WAS SUBMITTED BY THE AO BEFORE THE LD. CIT(A) FOR ASSESSMENT YEARS 2003-04 TO ASSE SSMENT YEAR 2009-10 ON THE QUESTION OF ADMITTING OF ADDITIONAL EVIDENCES UNDER RULE 46A OF THE INCOME TAX RULES, THE ASSESSI NG OFFICER HAS CATEGORICALLY STATED THAT IT WAS AN ADMITTED FA CT THAT NO INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE WA S SEIZED DURING THE SEARCH PROCEEDINGS U/S 132 IN THE CASE O F SHRI B.K. DHINGRA, SMT. POONAM DHINGRA AND M/S MADHUSUDAN BUI LDCON PVT. LTD. THE ASSESSING OFFICER HAS ALSO MENTIONED IN THE REMAND REPORT THAT THE INCOME OF THE ASSESSEE WAS ESTIMATE D FOR LACK OF DETAILS ETC. AT THE TIME OF ASSESSMENT. THUS, ADMI TTEDLY, THERE ITA NO. 3489 TO 3495/DEL/2015 ASSESSMENT YEARS: 2003-04 TO 2009-10 9 WAS NO INCRIMINATING MATERIAL FOUND DURING THE COUR SE OF SEARCH WHICH COULD BE ATTRIBUTED TO THE ASSESSEE AND, ACCO RDINGLY, THESE ADDITIONS CANNOT BE SUSTAINED. IT IS ALSO APPARENT FROM THE ASSESSMENT ORDERS THAT ALL THE ADDITIONS WERE ON AN ESTIMATE AND DO NOT RELATE TO ANY INCRIMINATING MATERIAL WHICH C OULD BE SAID TO BE BELONGING TO THE ASSESSEE. THEREFORE, IN OUR VIE W, SUCH ESTIMATED ADDITIONS COULD NOT HAVE BEEN MADE U/S 14 4 READ WITH SECTION 153C WITHOUT THE SAME BEING CORROBORATED WI TH ANY INCRIMINATING MATERIAL. ACCORDINGLY, WE HAVE NO HES ITATION IN HOLDING THAT THE IMPUGNED ASSESSMENTS CANNOT BE SUS TAINED AND THE SAME ARE QUASHED. ACCORDINGLY, ALL SEVEN APPEAL S OF THE ASSESSEE ARE ALLOWED. IN THE RESULT, THE APPEALS OF THE ASSESSEE STAND A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER, 2018. SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) VICE PRESIDENT JUDICIAL M EMBER DATED: 31 ST OCTOBER , 2018 GS ITA NO. 3489 TO 3495/DEL/2015 ASSESSMENT YEARS: 2003-04 TO 2009-10 10 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT BY ORDER ASSTT. REGISTRAR