Sh. Inder Pal Singh, Jalandhar V. The Asstt. Commissioner of Income-tax, Jalandhar

ITA 49/ASR/2012

• Counselvise Citation: 4920914 RSA 2012
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 15-01-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 06-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Document seized; Period of limitation; Documents seized
• Section: 143(3); 142(1); 153A; 148

Judgement Text

ITA NO.49(ASR)/2012 2 2. THAT NOT BEING THE YEAR OF REQUISITION, UNDER AM ENDED LAW, IT WAS MANDATORY TO ISSUE NOTICE U/S 153A R.W.S. 153C, SANS WHICH, THE IMPUGNED ORDER IS VOID AB INITIO. 3. THAT THE LD. CIT(A) HAS ALSO ERRED IN REJECTING THE ASSESSEES CONTENTION THAT THE IMPUGNED ORDER WAS BARRED BY TI ME, INASMUCH AS THE ASSESSMENT OUGHT TO HAVE BEEN COMP LETED BY TAKING COGNIZANCE OF FIRST NOTICE ISSUED ON 30.03.2 005 BY ACIT, R-III, EVEN IF IT WAS WRONGLY ISSUED U/S 158B D, DID NOT VEST ANY VALID JURISDICTION WITH THE AO, EVEN WHEN IT WAS ISSUED BY THE AO OF COMPETENT JURISDICTION WITH THE SOLE INTENTION TO ASSESSEE A CASE OF SEARCH/REQUISITION. 4. THAT THE LD. CIT(A) HAS MISDIRECTED HIMSELF IN L AW AND ON FACT IN HOLDING THAT THE NOTICE ISSUED ON 30.03.2005 U/S 158BD, DID NOT VEST ANY VALID JURISDICTION WITH THE AO, EVEN W HEN IT WAS ISSUED BY THE AO OF COMPETENT JURISDICTION WITH THE SOLE INTENTION TO ASSESS A CASE OF SEARCH/REQUISITION. 5. THAT HAVING HELD THAT INITIAL NOTICE ISSUED U/ S 158BD ON 30.03.2005 DID NOT VEST ANY VALID JURISDICTION WITH ACIT,R-III, JALANDHAR AND IT WAS ORDER DATED 04.01.2006 ISSUED U/S 127 BY THE CIT WHICH VESTED JURISDICTION WITH ACIT CC-1, J ALANDHAR, THEN BY ANY RECKONING, THE LD. CIT(A) STILL COULD N OT FALL BACK UPON THE PURPORTED TRANSFER OF DOCUMENTS TO ACIT R- III, IN FY 2004-05 TO HOLD AY 2005-06 AS THE YEAR OF SEARCH, O BVIATING THE NECESSITY TO ISSUE NOTICE U/S 153C R.W.S. 153A. 6. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRM ING THE ADDITION OF RS.13 LACS AS MADE BY THE AO ON HIGHLY ERRONEOUS ASSUMPTIONS. 7. THAT IN ANY CASE, ADDITION BEYOND THE AMOUNT SEI ZED, COULD NOT BE UPHELD. 8. THAT THE CHARGING OF INTEREST U/S 234A, B & C WH EN THE CASH OF RS.15.5 LACS WAS SEIZED BY DEPARTMENT, SHOULD NOT HAVE BEEN UPHELD WITHOUT ADJUDICATION. ITA NO.49(ASR)/2012 4 ORDER DATED 04.01.2006 PASSED U/S 127(1), WHEREAFTE R NOTICES U/S 153C WERE ISSUED FOR SIX ASSESSMENT YEARS 1999-2000 TO 2004-0 5, WHICH CULMINATED IN THE PASSING OF IMPUGNED ORDER REJECTING ALL EXPLANA TIONS OF ASSESSEE TO HOLD THE IMPUGNED CASH AS UNDISCLOSED INCOME. 3. THE ASSESSEE RAISED AS MANY AS SIX GROUNDS OF AP PEAL BEFORE THE LD. CIT(A), WHICH FOR THE SAKE OF CONVENIENCE ARE REPRO DUCED AS UNDER: 1. THAT THE IMPUGNED ORDER PASSED U/S 143(3), IS V OID AB-INITIO INTERALIA ON FOLLOWING GROUNDS: A) THAT IT HAS BEEN PASSED WITHOUT ISSUING ANY NOTICE WITHIN THE MEANING OF SECTION 153A READ WITH SECTION 153C. B) THAT IT HAS BEEN FRAMED U/S 143(3) AS A NORMAL SCRU TINY CASE THOUGH IT WAS TRANSFERRED TO CC-! WITH THE MEANING OF SECTION 153C, PURSUANT TO REQUISITION U/S 132A IN THE CASES OF SH. JAGIDISH CHAND AND HARJIT SINGH. C) THAT IT HAS BEEN FRAMED BY TAKING COGNIZANCE OF AN INVALID RETURN FILED BEYOND THE PERIOD AVAILABLE U/S 139(1) AND 13 9(4). D) THAT NOTICE U/S 143(2) WAS ISSUED MUCH AFTER THE PR ESCRIBED PERIOD 12 MONTHS, EVEN IF THE RETURN FILED ON 28.4.2006 WA S TO BE TAKEN ANY COGNIZANCE OF. E) THAT IT HAS BEEN FRAMED BY THE AO WITHOUT VESTING H IMSELF WITH A VALID JURISDICTION IN THE MATTER. F) THAT IT SUFFERS FROM THE VICE OF LIMITATION. G) THAT IT WAS NOT PASSED WITH THE PRIOR APPROVAL OF T HE ADDL. CIT. ITA NO.49(ASR)/2012 6 ASSESSEE TO FILE A BELATED RETURN U/S 139(4) IS UPT O 31.3.2007 AND NOT 31.3.2006. IT IS APPARENT THAT THE AR HAS SOME HOW MISCALCULATED THE TIME AVAILABLE IN THIS REGARD U/S 139(4). AS SUCH T HERE IS NO MERIT IN THE CLAIM OF THE APPELLANT ON THIS ISSUE. 6. THE AR HAS CONTENDED THAT THE NOTICE U/S 158BD H AD BEEN ISSUED BY THE AC, RANGE-III, JALANDHAR ON 30.3.2005 WHICH WAS LATER ON FILED BY TERMING THE SAME AS WRONGLY INITIATED. IT WAS, THEREFORE, CONTENDED THAT TIME LIMITATION FOR PASSING THE ORDE R SHOULD BE RECKONED FROM 30.3.2005. THE AR CONTENDED THAT EVE N IF THE NOTICE WAS ISSUED UNDER A WRONG SECTION BUT BY AN AO HAVIN G JURISDICTION OVER THE ASSESSEE, THE VALIDITY OF THE SAME IS NOT VITIATED. THE AR SUBMITTED ARGUMENTS TO SHOW THAT THE PROCEEDINGS U/ S 158BD ARE AKIN TO THE PROCEEDINGS U/S 153C AND THEREFORE THE LIMIT ATION TO ASSESS THIS CASE SHOULD BE COUNTED FROM 31.3.2005. I DONT AG REE WITH THE SUBMISSIONS OF THE APPELLANT ON THIS ISSUE AS WRON GLY ISSUED NOTICE DOES NOT VEST ANY VALID JURISDICTION WITH THE AO AN D THE SAME CAN BE TREATED AS HAVING NEVER BEEN ISSUED... THE AO BY FI LING NOTICE U/S 158BD VIDE HIS ORDER DATED 8.11.2006 HAS CLEARLY MA DE HIS INTENTIONS CLEAR AND THE DELAY IN INITIATING THE CORRECT PROCE EDINGS HAS NOT JEOPARDIZED THE INTERESTS OF THE ASSESSEE. THEREFOR E, THE PERIOD OF LIMITATION CANNOT BE COUNTED FROM THE DATE OF AN IN VALID NOTICE ISSUED BY THE AO. 7. THE AR AS ALSO CONTENDED THAT THE AO WAS TRANSFE RRED JURISDICTION VIDE ORDER DATED 4.1.2006 AND THERE IS NO EVIDENCE OF TRANSFER OF SEIZED CASH TO THE AO SO AS TO VEST HIM WITH ANY JURISDICTION LEADING TO ISSUE OF NOTICE U/S 153C. T HE AR CONTENDED THAT FOR INVOKING JURISDICTION U/S 153C IT WAS INCU MBENT UPON THE DDIT OR THE AO OF THE PERSONS SEARCHED TO HAND OVER THE CASH REQUISITIONED TO ACIT, CC-1, JALANDHAR. THE AR REL IED UPON THE DECISION OF JURISDICTIONAL BENCH OF ITAT, AMRITSAR IN THE CASE OF ACIT VS. SONU VERMA. THE CONTENTIONS OF THE APPELLA NT IN THIS REGARD CAN NOT BE ACCEPTED AS THE CASH REQUISITIONED GETS TRANSFERRED TO THE PERSONAL DEPOSIT ACCOUNT OF THE CIT AND TRANSFER OF THE SAME TO THE JURISDICTIONAL CIT IS A MATTER OF ADMINISTRATIVE CO NVENIENCE. HOWEVER, THE EVIDENCE OF REQUISITION IN THE FORM OF PANCHNAMA RECORDED AT THE TIME OF SEARCH OPERATION AND THE S TATEMENTS OF VARIOUS PERSONS DOES NOT GET TRANSFERRED TO THE AO HAVING JURISDICTION OVER THE CASE. THE CASE RELIED UPON BY THE AR IS ON DIFFERENT FACTS AS ITA NO.49(ASR)/2012 8 CONSIDERING THE WRITTEN SUBMISSIONS BEFORE US AND B EFORE THE LD. CIT(A) AND THE REMAND REPORT AND THE COMMENTS IN REJOINDER, AS REGARDS THE CLAIM THAT THE RETURN FILED BY THE ASSESSEE ON 28.04.2006 WAS AN INVALID RETURN. IT WAS CONTENDED THAT THE DUE DATE OF FILING OF THE RETURN FOR THE ASSESSMENT YEAR 2005-06 WAS 31.05.2005 AND U/S 139(4) IT COULD BE F ILED UPTO 31.3.2006. IT WAS ARGUED THAT THE AO COULD PROCEED WITH THE RETUR N FILED BY EITHER ISSUING NOTICE UNDER SECTION 142(1) OR U/S 148 OR SECTION 1 53A/153C. THE LD. CIT(A) IN THIS REGARD HAS GIVEN A VERY VALID FINDIN G THAT THE ARGUMENT OF THE AR CANNOT SURVIVE BECAUSE THE TIME AVAILABLE TO TH E ASSESSEE TO FILE A BELATED RETURN U/S 139(4) IS UPTO 31.3.2007 AND NOT 31.03.2006 AND ACCORDINGLY THERE WAS NO MERIT IN THE CLAIM OF THE ASSESSEE. 6. IT WAS CONTENDED THAT THE TIME LIMITATION FOR P ASSING THE ORDER BY THE AO, RANGE-III, JALANDHAR SHOULD BE RECKONED FROM 3 0.03.2005. HE ARGUED THAT THE PROCEEDINGS UNDER SECTION 158BD ARE AKIN T O THE PROCEEDINGS U/S 153C AND NOTICE U/S 158BD WAS ACTUALLY INTENDED U/S 153C AND ACCORDINGLY LIMITATION TO ASSESS THE CASE SHOULD BE COUNTED FRO M 31.03.2005. IN THIS REGARD, WE FIND NO INFIRMITY IN THE ORDER OF THE LD . CIT(A) THAT WRONGLY ISSUED NOTICE DOES NOT VEST ANY VALID JURISDICTION WITH THE ASSESSING OFFICER AND THE SAME CAN BE TREATED AS HAVING NEVER BEEN IS SUED. THE AO BY FILING THE NOTICE U/S 158BD VIDE HIS ORDER DATED 8.11.2006 HAS CLEARLY MADE HIS ITA NO.49(ASR)/2012 10 132A COULD NOT BE EXECUTED. AS SUCH, THE LD. CIT(A) HAS RIGHTLY REJECTED THE ARGUMENTS MADE BY THE LD. COUNSEL FOR THE ASSES SEE. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE FINDINGS OF THE LD. CIT(A) THAT THE LD. AR ALSO RAISED THE ISSUE THAT THE AO HAS WRONGLY TREATED THE A.Y. 2005-06 AS THE YEAR OF REQUISITION/SEARCH AND THEREFORE DID NOT ISSUE U/S 153A/153C TO INITIATE THE PROCEEDINGS. IT WAS CLAIMED THAT THE FIRST YEAR TO BE RECKONED IS THE YEAR IN WHICH SEIZED ASSETS/DOCUMENT ARE HANDED OVER TO THE AO FOR INITIATING ACTION U/S 153C READ WITH SECTION 153A. IT WAS ARGUED THAT SINCE THE AC, CC-1, JALANDHAR GOT JURISDICTION ONLY ON 4.1.2006, THE SE IZED DATE I.E. 4.1.2006 WHICH MEANT THAT IT IS ASSESSMENT YEAR 2006-07 WHIC H SHOULD BE TAKEN AS THE YEAR OF SEARCH REQUIRING NO ISSUE OF NOTICE U/S 153 C READ WITH SEC. 153A. IT IS SEEN THAT THE AC, RANGE-III, JALANDHAR WAS ORIGI NALLY HANDED OVER THE SEIZED DOCUMENTS/ASSETS AND HE PROCEEDED TO ISSUE A WRONG NOTICE WHICH WAS LATER ON FILED. IT MEANT THAT BUT FOR THE ISSUE OF WRONG NOTICE THE AO HAD BEEN HANDED OVER THE REQUISITIONED ASSETS/DOCUMENTS WHICH WERE IN THE F.Y. 2004-05 AND THEREFORE THE YEAR OF SEARCH WOULD BE A .Y.2005-06 REQUIRING ISSUE OF NO NOTICE U/S 153C R.W.S. 153A. THE CONSEQ UENT CHANGE IN JURISDICTION TO THE NEW AO WOULD NOT HAVE THE EFFEC T OF CHANGE OF YEAR OF ITA NO.49(ASR)/2012 12 DATE AMOUNT 15.04.2004 25,00,000/- 05/06/2004 4,00,000/- 29.06.2004 1,00,000/- 02/07/2004 2,00,000/- 08/07/2004 21,53,225/- 12.07.2004 4,00,000/- 12.07.2004 4,00,000/- 15.07.2004 90,000/- 24/07/2004 2,50,000/- 26.07.2004 2,00,000/- 28.07.2004 2,00,000/- 31.07.2004 90,000/- IT IS QUITE OBVIOUS THAT THE AMOUNT OF RS. 2 LAC WI THDRAWN ON 28/07/2004 WAS NECESSITATED BY THE CONSUMPTION OF T HE WITHDRAWAL OF RS. 2 LACS MADE ON 26/07/2004. THEREFORE THE AVAILA BILITY OF AN AMOUNT OF RS. 13 LAC AS ON 30/07/2004 IS NOT PROVED FROM THE WAY AMOUNTS HAVE BEEN WITHDRAWN BY SH. SUKHA BOPALI. IT ALSO NEEDS TO BE KEPT IN MIND THAT MR. SUKHA BOPALI HAD CONSTRUCT ED A PALATIAL HOUSE IN HIS VILLAGE NIJHRA AND THE WITHDRAWALS COU LD VERY WELL BE FOR THE PURPOSE OF MEETING THE CONSTRUCTION RELATED EXP ENSES. APART FROM THIS THE PERUSAL OF SAVING BANK ACCOUNT OF ASSESSEE WITH ICICI BANK LIMITED SHOWS THAT HE WAS IN THE HABIT OF DEPOSITIN G EVEN SMALL AMOUNTS OF CASH AS UNDER:- DATE CASH DEPOSITED 03/05/2004 10,000/- 02/06/2004 5,000/- 12/07/2004 49,000/- 13/07/2004 21,000/- 02/08/2004 7,000/- 02/09/2004 7,000/- 01/10/2004 7,000/- 08/10/2004 6,500/- 03/11/2004 6,500/- 16/11/2004 10,000/- ITA NO.49(ASR)/2012 14 IN THE SAID BOOKS OF ACCOUNTS CANNOT REJECT THE SAM E ONLY ON THE GROUND THAT THESE HAD NOT BEEN PRODUCED BEFORE THE DDIT. THIS FACT OF NON-PRODUCTION OF BOOKS OF ACCOUNTS ONLY CREATES DO UBT ABOUT THE GENUINENESS OF THE SAME BUT THIS DOUBT ITSELF CANNO T BE TAKEN TO BE THE BASIS TO REJECT THE BOOKS. AS SUCH, THE WITHDRAWAL SHOWN FROM THE BOOKS OF ACCOUNTS, A DAY BEFORE THE DATE OF SEIZURE IS A VALID EXPLANATION. THE ADDITION TO THE EXTENT OF RS. 3 LA CS IS THEREFORE DIRECTED TO BE DELETED. 9.1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND ACCORDINGLY THE SAME IS UPHELD. HENCE, ALL THE GROUNDS OF THE ASSESSEE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.49(ASR)/2012 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14TH FEBRUARY, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14TH FEBRUARY, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH.INDERPAL SINGH, JALANDHAR 2. THE ADDL. CIT, CC-1, JALANDHAR 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR