ACIT, New Delhi V. Sh. Kuldeep Singh Solanki, New Delhi

ITA 452/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4167 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 29-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Search and seizure
• Section: 143(3); 153A; 234B; 131; 132; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES B: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA.NO.452/DEL./2016 ASSESSMENT YEAR 2012-2013 THE ACIT, CENTRAL CIRCLE - 17, ROOM NO.101, HALL NO.1, 1 ST FLOOR, ARA CENTRE, JHANDEWALAN EXTENSION NEW DELHI. VS., SHRI KULDEEP SINGH SOLANKI, B-9/16, VASANT VIHAR, NEW DELHI. PAN AAOPS0365E (APPELLANT) (RESPONDENT) C.O.NO.117/DEL./2016 ARISING OUT OF ITA.NO.452/DEL./2016 ASSESSMENT YEAR 2012-2013 SHRI KULDEEP SINGH SOLANKI, B-9/16, VASANT VIHAR, NEW DELHI. PAN AAOPS0365E VS., THE ACIT, CENTRAL CIRCLE - 17, ROOM NO.103, HALL NO.1, 1 ST FLOOR, ARA CENTRE, JHANDEWALAN EXTENSION, NEW DELHI. (CROSS OBJECTOR) (RESPONDENT) FOR REVENUE : MS. RACHNA SINGH, CIT - D.R. FOR CROSS-OBJECTOR : SHRI SAJJAN KUMAR TULSIYAN, ADVOCATE MS. NISHA RACHH, C.A., SHRI KARAN KUMAR, C.A. 2 ITA.NO.452/DEL./2016 & CO.NO.117/DEL./2016 SHRI KULDEEP SINGH SOLANKI, NEW DELHI. DATE OF HEARING : 07.12.2017 DATE OF PRONOUNCEMENT : 0 1 .01.2018 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY REVENUE AS WELL AS CROSS OBJECTION BY ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-27 , NEW DELHI, DATED 09.11.2015, FOR THE A.Y. 2012-2013 ON THE FOLLOWING GROUNDS : 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS E RRED IN LAW AND ON THE FACTS IN DIRECTING NOT TO CHARGE INTERES T U/S 234A OF THE ACT IN RESPECT OF SEIZED CASH OF RS.2,60,00,000 /- FROM THE DATE OF SEIZURE TO THE DATE OF COMPLETION OF ASSESS MENT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE DIRECTION OF CIT(A) IN CONTRADICTING TO HER DIRECTION TO ADJU ST THE SEIZED CASH AS SELF ASSESSMENT TAX AND THEREFORE, THE INTEREST U/S 234B IS LIVABLE UPTO THE DATE OF SUCH ADJUSTMENT. 3. (A) THE ORDER OF THE CIT (A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS, 3 ITA.NO.452/DEL./2016 & CO.NO.117/DEL./2016 SHRI KULDEEP SINGH SOLANKI, NEW DELHI. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. 2. BRIEFLY, THE FACTS OF THE CASE AS NOTED IN THE IMPUGNED ORDER ARE THAT ASSESSEE IS AN INDIVIDUAL AND WAS CO VERED UNDER SEARCH AND SEIZURE AND SURVEY OPERATIONS CONDUCTED UNDER SECTION 132 OF THE I.T. ACT, HELD ON 12 TH APRIL, 2012 AT ARYAN SAINIK GROUP. THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 153A OF THE I.T. ACT, 1961, WAS COMPLETED AND INCOME WAS COMPUTED AT RS. 15,31,56,140 AND NO DEMAND WAS RAISED. LATER ON, AN ORDER UNDER SECTION 154 WAS PASSED ON 9 TH JUNE, 2015 WHEREIN CREDIT OF SELF-ASSESSMENT TAX O F RS.2,60,00,000 BEING CASH SEIZED DURING THE SEARCH WAS WITHDRAWN AND A DEMAND OF RS.3,22,34,580 WAS RAISED. 2.1. THE ASSESSEE AGGRIEVED AGAINST THE ORDER PASS ED UNDER SECTION 154, FILED APPEAL BEFORE THE LD. CIT(A) AND IT WAS EXPLAINED THAT A.O. HAS ERRED IN NOT ALLOWING OR WITHDRAWING THE CREDIT OF RS.2.60 LAKHS BEING CASH SEIZED DURING THE COURSE O F SEARCH AND CLAIMED AS SELF-ASSESSMENT TAX IN ITR FILED UNDER S ECTION 153A. THERE WAS NO MISTAKE APPARENT ON RECORD. THEREFORE, THE O RDER UNDER 4 ITA.NO.452/DEL./2016 & CO.NO.117/DEL./2016 SHRI KULDEEP SINGH SOLANKI, NEW DELHI. SECTION 154 IS BAD IN LAW. THE ASSESSEE ALSO EXPLAI NED THAT DURING THE COURSE OF SEARCH CASH OF RS.2.65 CRORES WAS FOU ND, OUT OF WHICH, RS.2.60 CRORES WAS SEIZED. ASSESSEE NOTED IN THE ST ATEMENT RECORDED UNDER SECTION 131 SUBMITTED THAT CASH LYING AT HIS RESIDENCE WAS OUT OF UNDISCLOSED INCOME UNDER THE HEAD INCOME FROM O THER SOURCES. THE ASSESSEE VIDE LETTER DATED 10 TH JUNE, 2012 REQUESTED TO ADJUST THE ABOVE CASH SEIZED TOWARDS PAYMENT OF TAX DUE AS ADDITIONAL INCOME OFFERED. THE ASSESSEE ALSO MADE SIMILAR STAT EMENT IN HIS STATEMENT RECORDED UNDER SECTION 131. THE ASSESSEE HAS CLAIMED RS.2.60 CRORES AS SELF ASSESSMENT TAX IN THE RETURN FILED UNDER SECTION 153A OF THE I.T. ACT WHICH WERE THE CASH SEIZED DUR ING THE COURSE OF SEARCH. THE ASSESSEE ALSO SUBMITTED BEFORE A.O. AT ASSESSMENT STAGE THAT CASH SO SEIZED MAY BE ADJUSTED AGAINST THE SEL F-ASSESSMENT TAX. THE A.O. WHILE PASSING THE ORDER UNDER SECTION 143( 3) R.W.S. 153A DATED 30 TH MARCH, 2015, ACCEPTED THE AMOUNT OFFERED ON ACCOUN T OF CASH SEIZED OF RS.2.60 CRORES. THE A.O. GAVE BENEFI T OF SEIZED CASH AS ADJUSTMENT OF TAX. THE A.O. LATER ON PROPOSED RECTI FICATION UNDER SECTION 154 FOR WITHDRAWING THE BENEFIT OF RS.2.60 CRORES AS FOUND DURING THE COURSE OF SEARCH PAID TOWARDS SELF-ASSES SMENT TAX. IT IS 5 ITA.NO.452/DEL./2016 & CO.NO.117/DEL./2016 SHRI KULDEEP SINGH SOLANKI, NEW DELHI. WELL SETTLED LAW THAT THE ISSUE WHICH IS DEBATABLE, CANNOT BE RECTIFIED UNDER SECTION 154 OF THE I.T. ACT. THE A.O. HAS ALS O FAILED TO NOTE THAT ADJUSTMENT OF TAX HAS ALREADY BEEN GIVEN IN INTIMAT ION ISSUED UNDER SECTION 143(1) OF THE I.T. ACT. THE LD. CIT(A) CONS IDERING THE EXPLANATION OF ASSESSEE IN THE LIGHT OF ORDER OF IT AT, KOLKATA BENCH IN THE CASE OF NARENDRA N. THACKER DATED 28.09.2015 IN I.T.(SS)A.NO.1/KOL/2012, ALLOWED THE APPEAL OF ASSE SSEE. HIS FINDINGS IN PARAS 5 AND 6 OF THE ORDER ARE REPRODUCED AS UND ER : FINDING : 5. I HAVE GONE THROUGH THE ABOVE SUBMISSIONS MADE BY T HE LD. COUNSEL OF THE APPELLANT IT IS OBSERVED FROM TH E DETAILS FURNISHED DURING POST SEARCH PROCEEDINGS, ASSESSMEN T PROCEEDINGS AND PROCEEDING U/S 154 OF THE INCOME TA X ACT, 1961 THAT THE APPELLANT HAS ON VARIOUS OCCASIONS REQUEST ED FOR ADJUSTMENT OF CASH SEIZED OF RS. 2,60,00,000/- TOWA RDS ITS TAX LIABILITY AND ALSO CLAIMED THE SAME AS SELF ASSESSM ENT TAX WHILE FILING THE RETURN U/S 153A OF THE INCOME TAX ACT, 1 961 FOR A.Y. 2012-13. 6 ITA.NO.452/DEL./2016 & CO.NO.117/DEL./2016 SHRI KULDEEP SINGH SOLANKI, NEW DELHI. 5.1 THE A.O. ALSO GAVE CREDIT OF SAME WHILE FRAMING ASSESSMENT U/S 143(3) R.W.S. 153A. LATER ON A.O. RE CTIFIED THE ORDER U/S 154 OF THE INCOME TAX ACT, 1961 AND WITHD RAWN THE SAME. HOWEVER THIS ACTION OF A.O. IS NOT CORRECT IN VIEW OF FACT THAT THIS MISTAKE IS NOT APPARENT FROM THE RECORD A ND CANNOT BE RECTIFIED U/S 154 OF THE INCOME TAX ACT, 1961. THIS FACT IS ALSO CLEAR FROM THE RECENT JUDGMENT DT. 28.09.2015 IN THE CASE OF ACIT VS. NARENDRA N THACKER OF ITAT BENCH B, KOLKAT A, IT (SS) A NO. 01/KOL/2012 CITED BY THE LD. COUNSEL OF THE APPELLANT. 5.2 BASED ON THE ABOVE FINDING, THE CONTENTION OF THE A PPELLANT APPEARS TO BE ACCEPTABLE AND ACCORDINGLY AND THE AB OVE ORDER PASSED U/S 154 OF THE INCOME TAX ACT, 1961 IS CANCE LLED AND A.O IS DIRECTED TO GIVE THE CREDIT OF CASH SEIZ ED OF RS.2,60,00,000/- AS SELF ASSESSMENT TAX AS CLAIMED BY THE APPELLANT. 5.3 FURTHER THE A.O. IS DIRECTED NOT TO CHARGE INTEREST U/S 234B OF THE INCOME TAX ACT, 1961 FROM THE DATE OF SEIZUR E OF CASH TO THE DATE OF COMPLETION OF ASSESSMENT IN RESPECT OF CASH SEIZED OF 7 ITA.NO.452/DEL./2016 & CO.NO.117/DEL./2016 SHRI KULDEEP SINGH SOLANKI, NEW DELHI. RS. 2,60,00,000/-. 6. IN THE RESULT, THE APPEAL IS ALLOWED. 3. THE LD. D.R. RELIED UPON THE ORDER OF THE A.O. 4. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE, REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND SUBMITTED THAT ITAT, KOLKATA BENCH IN THE CASE OF N ARENDRA N. THACKER (SUPRA) HELD THAT ADJUSTMENT OF SEIZED CASH AS SELF- ASSESSMENT TAX IS IN ORDER. 5. ON CONSIDERATION OF THE RIVAL SUBMISSIONS, WE D O NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. IT IS AN ADMI TTED FACT THAT ASSESSEE SINCE THE DAY OF THE SEARCH TILL THE REGUL AR ASSESSMENT IS MADE, REQUESTED THE REVENUE DEPARTMENT TO ADJUST RS .2.60 CRORES FOUND DURING THE COURSE OF SEARCH AS SELF-ASSESSMEN T TAX. THE ASSESSEE ALSO MADE SIMILAR CLAIM IN THE RETURN OF I NCOME FILED UNDER SECTION 153A OF THE I.T. ACT WHICH HAVE BEEN ACCEPT ED BY THE A.O. WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 15 3A/143(3) DATED 30 TH MARCH, 2015. THUS, THE CLAIM OF ASSESSEE HAS BEEN ACCEPTED FOR ADJUSTMENT OF THE SEIZED CASH TOWARDS SELF-ASSESSME NT TAX. THE A.O. 8 ITA.NO.452/DEL./2016 & CO.NO.117/DEL./2016 SHRI KULDEEP SINGH SOLANKI, NEW DELHI. LATER ON WITHOUT ANY JUSTIFICATION PROPOSED TO WITH DRAW THE ADJUSTMENT OF RS.2.60 CRORES TOWARDS SELF-ASSESSMEN T TAX DESPITE NO ADVERSE VIEW WAS TAKEN EITHER IN THE REGULAR ASSESS MENT OR WHILE ISSUING INTIMATION UNDER SECTION 143(1) OF THE I.T. ACT. IT IS WELL SETTLED LAW THAT AN ISSUE WHICH IS HIGHLY DEBATABLE CANNOT BE RECTIFIED UNDER SECTION 154 OF THE I.T. ACT. THE HONBLE PUNJ AB & HARYANA HIGH COURT IN THE CASE OF CIT VS. INVESTMENT TRUST OF IN DIA 184 TAXMAN 381 HELD THAT NO RECTIFICATION UNDER SECTION 154 IS PERMISSIBLE ON DEBATABLE ISSUE. THE HONBLE KOLKATA HIGH COURT IN THE CASE OF HINDUSTAN LEVER LIMITED 289 ITR 42 WHILE CONSIDERIN G THE SCOPE OF SECTION 154(1) OF THE I.T. ACT HELD THAT THE MISTAK E MUST BE SO OBVIOUS THAT IT CAN BE EASILY CORRECTED TO WIT AN A RITHMETIC ERROR, WRONG QUOTATION OF SECTION ETC., BUT NOT A DEBATABL E ISSUE. IN THE PRESENT CASE, THE CLAIM OF ASSESSEE FOR ADJUSTMENT OF SEIZED CASH TOWARDS SELF-ASSESSMENT TAX WAS ACCEPTED BY THE A.O . AFTER CONSIDERING THE EXPLANATION AND STATEMENT OF ASSESS EE. THEREFORE, WITHOUT JUSTIFICATION, THE A.O. SHOULD NOT HAVE REC TIFIED THE ORDER FOR WITHDRAWING SUCH BENEFIT TO THE ASSESSEE. THE LD. C IT(A), THEREFORE, CORRECTLY FOLLOWED THE ORDER OF THE ITAT, KOLKATA B ENCH IN THE CASE OF 9 ITA.NO.452/DEL./2016 & CO.NO.117/DEL./2016 SHRI KULDEEP SINGH SOLANKI, NEW DELHI. NARENDRA N. THACKER (SUPRA). SINCE, THE ISSUE WAS H IGHLY DEBATABLE BEFORE THE A.O, THEREFORE, IN SUCH CIRCUMSTANCES, A .O. SHOULD NOT HAVE PASS THE RECTIFICATION ORDER UNDER SECTION 154 OF THE I.T. ACT. NO INFIRMITY HAVE BEEN POINTED OUT IN THE ORDER OF THE LD. CIT(A). WE, THEREFORE, CONFIRM THE SAME AND DISMISS THE APPEAL OF THE REVENUE. 6. THE CROSS OBJECTION FILED BY THE ASSESSEE IS ME RELY IN SUPPORT OF THE ORDER OF THE LD. CIT(A). THE SAME IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE DEPARTMENT AS WELL AS CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRASHANT MAHARISHI) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 1 ST JANUARY, 2018 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT B BENCH 6. GUARD FILE 10 ITA.NO.452/DEL./2016 & CO.NO.117/DEL./2016 SHRI KULDEEP SINGH SOLANKI, NEW DELHI. //BY ORDER// ASST. REGISTRAR : ITAT : DELHI BENCHES : DELHI.