DCIT, New Delhi V. Sh. Sanjay Jalan, New Delhi

ITA 3663/DEL/2011

• Counselvise Citation: 366320114 RSA 2011
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 14-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 28-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NIRANJAN KOULI
• Keywords: Period of limitation; Time period of passing order
• Section: 142(1); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMEBR AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER I.T.A NO. 3663/DEL/2011 ASSTT. YEAR 2005-06 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE- 19, ROOM NO. 319, ARA CENTRE, E-2, JHANDEWALAN EXTENSION, NEW DELHI 110 055. VS. SHRI SANJAY JALAN, N-118, SAHAR APARTMENTS, FLAT NO. 9, PANCHSHEEL PARK, NEW DELHI 110 017. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI NIRANJAN KOULI, CIT, DR RESPONDENT BY: SHRI RAJESH DUREJA, ADVOCATE ORDER PER RAJPAL YADAV, JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD. CIT(A) DATED 11 TH MAY, 2011 PASSED FOR ASSTT. YEAR 2005-06. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LD. CIT(A ) HAS ERRED IN QUASHING THE ASSTT. ORDER PASSED U/S 153A OF THE IN COME TAX ACT BY HOLDING THAT ASSTT. ORDER HAS BEEN PASSED AF TER EXPIRY OF LIMITATION PERIOD PROVIDED IN SECTION 153B OF THE I NCOME TAX ACT. ITA NO. 3663/DEL/2011 ASSTT. YEAR 2005-06 2 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH U/ S 132 OF THE INCOME TAX ACT WAS CARRIED OUT AT THE RESIDENTIAL P REMISES OF THE ASSESSEE. A NOTICE U/S 153A WAS ISSUED ON 4 TH JUNE, 2007, REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME FOR ASSTT. YEAR 2005-06. THE ASSESSEE FIRSTLY DID NOT FILE ANY RETURN IN RESPONSE TO THE NOTICE. AO HAS ISSUED A NOTICE U /S 142(1) ON 8 TH OCTOBER, 2007. ULTIMATELY, ASSESSEE HAS FILED THE RETURN ON 28.12.2007 DECLARING TAXABLE INCOME AT `. 1,23,480/ -. LD. AO HAD ISSUED NOTICE U/S 143(2) ON 9 TH SEPTEMBER, 2008. IN RESPONSE TO THE NOTICE, SHRI MURLY VYAS, CHARTERED ACCOUNTANT APPEARED BEFORE THE AO. THE AO HAS PASSED AN ASSTT. ORDER ON 30 TH DECEMBER, 2008. AO HAS DETERMINED THE TAXABLE IN COME AT ` 41,57,480/-. HE MADE AN ADDITION OF ` 40,34,00 0/-. DISSATISFIED WITH THE ADDITION, ASSESSEE CARRIED TH E MATTER IN APPEAL. HE POINTED OUT THAT ASSTT. ORDER PASSED BY THE AO IS BARRED BY LIMITATION. ACCORDING TO THE ASSESSEE, TH E SEARCH IN HIS CASE WAS COMMENCED ON 14 TH FEBRUARY, 2006 AND IT WAS CONCLUDED ON 28.3.2006. IN CASES OF OTHER ASSESSES IT WAS CONCLUDED ON 14 TH APRIL, 2006. THE FINDING OF THE LD. CIT(A) IN THIS REGARD READ AS UNDER :- ITA NO. 3663/DEL/2011 ASSTT. YEAR 2005-06 3 4. I HAVE CAREFULLY GONE THROUGH THE SUBMISSIONS M ADE BY THE APPELLANT, THE COPY OF THE REMAND REPORT WITH ITS ANNEXURE AS WELL AS THE REJOINDER FILED BY THE APPELLANT. IT IS APPA RENT FROM THE COPY OF THE PANCHNAMA ENCLOSED BY THE APPELLANT IN HIS C ASE AS WELL AS THE REMAND REPORT THAT THE SEARCH IN CASE OF SHRI S ANJAY JALAN WAS CONCLUDED ON 28.3.2006. WHILE IT MAY BE TRUE THAT T HE PREMISES OF THE APPELLANT WERE SEARCHED TOGETHER WITH THE GROUP OF RADICO KHAITAN, IN WHICH THE SEARCH WAS CONCLUDED ON 14.4. 2006, BUT THEN SINCE IN THE APPELLANTS CASE THE SEARCH HAD BEEN C ONCLUDED ON 28.3.2006 ITSELF, THEREFORE, THE TIME LIMIT FOR COM PLETION OF ASSESSMENT U/S 153A HAS TO BE CALCULATED WITH REFER ENCE TO THE SECOND PROVISO TO SECTION 153B(1), WHICH IN THE INS TANT CASE WOULD EXPIRE ON 31.12.2007 ITSELF. AS IN THE PRESENT CASE THE ASSESSMENT HAS BEEN FINALIZED ON 30.12.2008, THEREFORE, THE OR DER PASSED ON THIS DATE IS NOT IN CONFORMITY WITH THE PROVISIONS OF THE ACT. ACCORDINGLY, THE GROUND NOS. 5 AND 6 OF APPEAL ARE DECIDED IN FAVOUR OF THE APPELLANT. 3. LD. DR PLACED ON RECORD COPY OF WARRANT OF AUTHO RIZATION ISSUED U/S 132 OF THE INCOME TAX ACT 1961 READ WITH RULE 112(1) OF THE INCOME TAX RULES 1962 CONTAINED IN FO RM NO. 45. HE ALSO PLACED ON RECORD THE LAST PANCHNAMA IN THE CASE OF ASSESSEE. COPIES OF THESE DOCUMENTS WERE SUPPLIED T O THE COUNSEL FOR THE ASSESSEE. ON THE STRENGTH OF THESE DOCUMENTS, IT WAS CONTENDED BY THE LD. DR THAT LAST WARRANT OF AUTHORIZATION TO CARRY OUT THE SEARCH WAS EXECUTED IN THE CASE OF ASSESSEE ON 4 TH APRIL, 2006. THUS, THE SEARCH WAS FINALLY CONCLUDED ON THIS DAY. THE LIMITATION U/S 153B HAS TO BE COMPUTED FROM THIS DAY. HE POINTED OUT THAT IF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE WARRANT OF AUTHORIZATION FOR SEARCH U/S 132 WAS EXECUTED IS TO BE COMPUTED IN THIS CASE, THEN LIMITATION WOULD BE UPT O 31 ST ITA NO. 3663/DEL/2011 ASSTT. YEAR 2005-06 4 MARCH, 2009. THE ASSTT. ORDER IN THIS CASE HAS BEEN PASSED ON 30 TH DECEMBER, 2008, WHICH IS WITHIN THE TIME PERIOD AN D, THEREFORE, ORDER OF LD. CIT(A) IS NOT SUSTAINABLE. LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, WAS UNABLE TO CONT ROVERT THE CONTENTION OF LD. DR. HE POINTED OUT THAT IF THAT B E SO THEN MATTER BE REMITTED TO THE LD. CIT(A) FOR ADJUDICATI NG THE ISSUES ON MERIT. ACCORDING TO THE LD. COUNSEL , AO HAS MAD E AN ADDITION OF `. 40,34,000/- IN HIS INCOME. LD. CIT( A) HAS NOT ADJUDICATED THE ISSUES ON MERIT QUA THESE ADDITIONS . HE ALSO PREYED THAT ASSESSEE BE GIVEN A LIBERTY TO RAISE AL L THESE PLEAS ALSO BEFORE THE LD. CIT(A). 4. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. ON PERUSAL OF PANCHNA MA AS WELL AS WARRANT OF AUTHORIZATION PLACED ON RECORD BY THE LD. DR, WE FIND THAT SEARCH IN THE CASE OF ASSESSEE WAS CONCLU DED ON 4 TH APRIL, 2006. LD. FIRST APPELLATE AUTHORITY HAS ERRE D IN TAKING THE DATE OF CONCLUSION OF SEARCH AS 28.3.2006. IF THE D ATE IS TAKEN AS 28.3.2006 THEN ASSTT. ORDER PASSED BY THE AO IS TIME BARRED. BUT SINCE THE SEARCH WAS CONCLUDED IN THE NEXT FINA NCIAL YEAR, THE TIME LIMIT WOULD BE ONE MORE YEAR TO THE AO FO R PASSING THE ASSTT. ORDER AS PER SECTION 158B (1) OF THE INC OME TAX ACT. ITA NO. 3663/DEL/2011 ASSTT. YEAR 2005-06 5 THEREFORE, WE SET ASIDE THE ORDER OF LD. CIT(A). WE RESTORE THIS APPEAL TO THE FILE OF LD. CIT(A) FOR ADJUDICATING O THER ISSUES ON MERIT. THE ASSESSEE WILL BE AT LIBERTY TO RAISE ANY LEGAL PLEA BEFORE THE LD. FIRST APPELLATE AUTHORITY, EXCEPT TH E PLEA REGARDING LIMITATION FOR PASSING THE ASSTT. ORDER. IN OTHER WORDS, ASSESSEE WOULD BE PRECLUDED TO RAISE A PLEA THAT AS SESSMENT ORDER IS TIME BARRED ON ACCOUNT OF ALLEGED CONCLUSI ON OF SEARCH ON 28.3.2006. APART FROM THIS ISSUE, IF ANY OTHER L EGAL PLEA IS AVAILABLE TO THE ASSESSEE, HE WILL BE ENTITLED TO R AISE BEFORE THE LD. FIRST APPELLATE AUTHORITY. IT IS NEEDLESS TO SA Y THAT OBSERVATIONS MADE BY US WOULD NOT IMPAIR OR INJURE THE CASES OF AO ON MERIT OR IT WILL NOT CAUSE ANY PREJUDICE T O THE DEFENCE / EXPLANATION OF ASSESSEE QUA THE ADDITIONS ON MERIT. 5. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOW ED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH NOVEMBER, 2011. SD/- SD/- [K.G. BANSAL] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18.11.2011 VEENA ITA NO. 3663/DEL/2011 ASSTT. YEAR 2005-06 6 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT