DR. GUNJAN JAIN, Jaipur V. ACIT, Jaipur

ITA 500/JPR/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82729 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-12-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 24-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C SHARMA
• Assessee Lawyers: BIOND KUMAR GUPTA
• Keywords: Depreciation; Search and seizure
• Section: 143(3); 153A; 6; 132; 139

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JAIPUR BENCH: JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. MEENA) I.T.A. NO. 500/JP/2011 ASSTT. YEAR- 2005-06 PAN NO. ADGPJ 2908 K DR. GUNJAN JAIN, THE A.C.I.T., PROP. JAIN FERTILITY & MOTHER CARE VRS. CIRCLE-7, JAIPUR. HOSPITAL, D-253, AMRAPALI MARG, VAISHALI NAGAR, JAIPUR. (APPELLANT) (RESPONDENT) ASSESSEE BY :- SHRI BIOND KUMAR GUPTA. DEPARTMENT BY :- SHRI D.C. SHARMA. DATE OF HEARING : 05/08/2014 DATE OF PRONOUNCEMENT : 08/08/2014 O R D E R PER: T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28/03/2011 OF THE LEARNED C.I.T.-III, JAIPUR FOR THE A.Y. 2005-06. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE EXCLUSIVE JURI SDICTION, RELATING TO THE ASSESSMENT PROCEEDINGS IN THE APPEL LANTS CASE FOR THE A.YRS. 2003-04 TO 2009-10 (INCLUDING THE A.Y. 2 005-06 UNDER CONSIDERATION OF THIS APPEAL), PASSES TO THE HONBL E SETTLEMENT COMMISSION. THIS FACT WAS ALSO BROUGHT TO THE NOTICE OF THE LEARNED A.R.. HENCE, IN THESE FACTS AND CIRCUMSTANC ES, THE PRESENT APPEAL, PENDING IN THIS OFFICE, HAS BECOME INFRUCTUOUS AND THUS, THE SAME IS DISMISSED. 2 2. IMPUGNED ASSESSMENT ORDER PASSED U/S 143(3) IS B AD IN LAW AND ON FACTS BEING AGAINST THE PRINCIPLE OF NATURAL JUS TICE AND FOR MANY MORE OTHER REASONS. 3. UNDER THE FACTS AND CIRCUMSTANCES, THE LEARNED A .O. HAS ERRED BY DISALLOWING OF RS. 26,84,584/- ON ACCOUNT OF CHEQUE THOUGH ISSUED AND HANDED OVER BUT NOT PRESENTED UP TO 31/0 3/2005, IGNORING THE FACT THAT BALANCE EXIST AS ON 31/3/200 5 IN THE BANK ACCOUNT OF THE ASSESSEE. THE DISALLOWANCE MADE IN J USTIFIED, ILLEGAL OR EXCESSIVE. 4. UNDER THE FACTS AND CIRCUMSTANCES, THE LEARNED A .O. HAS ERRED BY DISALLOWING BUSINESS PROMOTION EXPENSES TO THE EXTEN T OF RS. 1,50,000/-. THE DISALLOWANCE MADE IS UNJUSTIFIED, IL LEGAL OR EXCESSIVE. 5. UNDER THE FACTS AND CIRCUMSTANCES, THE LEARNED A.O. HAS ERRED BY MAKING AN ADDITION OF RS. 2,45,979/- U/S 69 OF THE I.T. ACT. THE ADDITION MADE IS UNJUSTIFIED, ILLEGAL AND EXCESSIVE . 6. UNDER THE FACTS AND CIRCUMSTANCES, THE LEARNED A.O. HAS ERRED BY DISALLOWING RS. 24,663/- BEING 1/5 TH OF THE TOTAL TRAVELLING AND CONVEYANCE EXPENSES OF RS. 1,23,314/-. THE DISALLOWAN CE MADE IS UNJUSTIFIED, ILLEGAL OR EXCESSIVE. 7. UNDER THE FACTS AND CIRCUMSTANCES, THE LEARNED A.O. HAS ERRED BY DISALLOWING RS. 24,830/- BEING 1/5 TH OF THE TOTAL DEPRECIATION ON VEHICLE CHARGED FOR RS. 1,24,151/-. THE DISALLOWANCE MADE IS UNJUSTIFIED, ILLEGAL OR EXCESSIVE. 8. UNDER THE FACTS AND CIRCUMSTANCES, THE LEARNED A.O. HAS ERRED BY DISALLOWING RS. 19,971/- BEING 1/5 TH OF THE TOTAL DEPRECIATION ON VEHICLE CHARGED FOR RS. 99,856/-. THE DISALLOWANCE MA DE IS UNJUSTIFIED, ILLEGAL OR EXCESSIVE. 9. UNDER THE FACTS AND CIRCUMSTANCES, THE LEARNED A.O. HAS ERRED BY DETERMINING TOTAL TAXABLE INCOME OF THE ASSESSEE TO BE RS. 18,78,900/- AS AGAINST RS. 5,81,933/- DECLARED BY A SSESSEE. 10. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, LEARNED A.O. HAS ERRED BY INITIATING PENALTY PROCEEDINGS U/S 271 (1)(C) AGAINST THE ASSESSEE. 11. THAT THE APPELLANT CRAVES YOUR INDULGENCE TO ADD , AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3 2. IN THIS CASE, THE LEARNED ASSESSING OFFICER PAS SED ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON 20/12 /2007 AND VARIOUS ADDITIONS WERE MADE BY HIM IN SCRUTINY ASSESSMENT. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED ASSE SSING OFFICER, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT, WHO H AS DISMISSED THE APPEAL ON THE GROUND THAT THERE WAS A SEARCH AND SEIZURE OP ERATION IN THIS CASE U/S 132 OF THE ACT ON 06/1/2009. THEREFORE, THE ASSESSME NT PROCEEDING FOR THE A.YRS. 2003-04 TO 2009-10 WERE PENDING AT THE END O F THE LEARNED ASSESSING OFFICER. HOWEVER, THE APPELLANT HAD FILED A SETTLEME NT PETITION ON 16/11/2010 BEFORE THE HONBLE SETTLEMENT COMMISSION FOR THE AB OVE ASSESSMENT YEARS. THEREFORE, IT HAS BEEN HELD BY HIM THAT THERE IS NO JURISDICTION OF THE LEARNED CIT(A) IN A.Y. 2005-06 AGAINST THE REGULAR ASSESSMEN T MADE BY THE LEARNED ASSESSING OFFICER ON 20/12/2007. 4. THE LEARNED A.R. FOR THE ASSESSEE ARGUED THAT DR. GUNJAN JAIN IS A DOCTOR IN GYANE, PROPRIETOR OF M/S JAIN FERTILITY & MOTHER CARE HOSPITAL IS AN INDIVIDUAL. THE DATE WISE BRIEF HISTORY OF THE CASE I S AS FOLLOWS: PARTICULARS DATE ORIGINAL RETURN U/S 139 FILED DECLARING INCOME AT R S. 5,81,933/- 26/12/2005 SELECTED FOR SCRUTINY U/S 143(2) 06/10/2006 ORDER PASSED U/S 143(3) AND INCOME ASSESSED AT RS. 18,78,897/- 28/12/2007 APPEAL FILED BEFORE CIT(A) 17/01/2008 SEARCH AND SEIZURE OPERATION 06/01/2009 NOTICE U/S 153A TO FILE RETURN 20/02/2009 4 RETURN FILED IN RESPONSE TO NOTICE U/S 153A 26/06/2 009 APPLICATION FILED BEFORE INCOME TAX SETTLEMENT COMMI SSION, NEW DELHI FOR A.Y. 2003-04 TO 2009-10. 16/11/2010 APPEAL DECIDED BY CIT(A) AGAINST ORIGINAL ORDER U/S 143(3) 28/03/2011 ORDER PASSED BY SETTLEMENT COMMISSION PURSUANT TO APPLICATION 04/05/2012. IT IS ARGUED THAT IN THIS CASE, ORDER U/S 143(3) OF THE ACT WAS PASSED BY THE LEARNED ASSESSING OFFICER FOR THE RETURN FILED U/S 139 OF THE ACT, WHICH WAS PASSED BEFORE THE DATE OF SEARCH AND ISSUANCE OF NO TICE U/S 153A OF THE ACT. THE PROCEEDINGS WERE CONCLUDED ON 28/12/2007 WHEREAS SEARCH WAS CONDUCTED ON 06/1/2009, THEREAFTER NOTICES WERE ISSU ED AGAINST THE ASSESSEE FOR SIX YEARS LATER ON AS DATE GIVEN IN THE CHART. THEREFORE, THERE WAS NO PROCEEDING PENDING FOR A.Y. 2005-06 AS THE ASSESSIN G OFFICER HAS COMPLETED THE ORDER AGAINST THE APPELLANT HAD FILED THE APPEA L BEFORE THE LEARNED CIT(A). HE HAS DRAWN OUR ATTENTION ON DEFINITION OF CASE PE NDING BEFORE THE ASSESSING OFFICER AS ON THE DATE ON WHICH AN APPLICATION UNDE R SUB-SECTION (1) OF SECTION 245C OF THE ACT IS MADE AND ARGUED THAT THI S SCRUTINY ASSESSMENT COMPLETED BY THE ASSESSING OFFICER WAS NOT COVERED B Y HIS DEFINITION OF CASE. THEREFORE, HE REQUESTED TO SET ASIDE THE ORDER OF LE ARNED CIT(A) DATED 28/3/2011 FOR A.Y. 2005-06. 5. AT THE OUTSET, THE LEARNED D.R. RELIED UPON THE ORDER OF THE LEARNED CIT(A). 5 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, REGULAR ASSESSMEN T HAS BEEN COMPLETED ON 28/12/2007 WHEREAS SEARCH WAS CONDUCTED BY THE DEPART MENT ON 06/1/2009 THEREAFTER NOTICES U/S 153A OF THE ACT WERE ISSUED ON 20/2/2009, RETURN FILED BY THE ASSESSEE ON 26/6/2009 AND APPLICATION FILED BEFORE THE SETTLEMENT COMMISSION ON 16/11/2010. THEREFORE, THE PROCEEDING U/S 153A OF THE ACT WAS INITIATED ON 20/2/2009. THIS REGULAR ASSESSMENT I S NOT COVERED BY DEFINITION OF CASE PENDING, THUS WE HAVE CONSIDERED VIEW THAT THE LEARNED CIT(A) WAS NO RIGHT TO DISMISS THE ASSESSEE APPEAL ON THE GROUND THAT THE APPELLANT HAD FILED APPLICATION FOR SETTLEMENT BEFO RE ITSC. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE JAI STEEL (INDIA) VS. ACIT IN ITA NO. 53/2011 HAS HELD THAT WHERE THE ASSESSMENT ALREADY STAND CO MPLETED, THE ASSESSING OFFICER CAN REOPEN THE ASSESSMENT AND ASSESSMENT OR DER HAVE BEEN PASSED DETERMINING THE ASSESSEES TOTAL INCOME AND SUCH OR DER ARE SUCCEEDING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THE RE IS NO QUESTION OF ANY ABATEMENT. SINCE NO PROCEEDING ARE PENDING. SIMILAR LEGAL VIEW HAS BEEN CONFIRMED BY THE HONBLE ALLAHABAD HIGH COURT IN TH E CASE OF CIT VS. SMT. SHAILA AGARWAL (2012) 346 ITR 130 (ALL), WHEREIN THE H ONBLE COURT HAS HELD AS UNDER:- THE ABATEMENT OF ANY PROCEEDINGS HAS SERIOUS EFFECT INASMUCH AS IT TAKES AWAY ALL THE CONSEQUENCES THAT ARISE THEREAFTE R. THE MATERIAL FOUND IN THE SEARCH MAY BE A GROUND FOR NOTICE AND ASSESSMENT UNDER 6 SECTION 153A OF THE ACT BUT THAT WOULD NOT EFFACE OR TERMINATE ALL THE CONSEQUENCES, WHICH ARISE OUT OF THE REGULAR ASSESSM ENT OR REASSESSMENT RESULTING IN A DEMAND OR PROCEEDINGS F OR PENALTY. IN VIEW OF THE ABOVE LEGAL PROPOSITION BY THE HONBL E ALLAHABAD HIGH COURT, WE SET ASIDE THE ORDER OF THE LEARNED CIT(A). 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 08/08/2014. SD/- SD/- (R.P. TOLANI) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR, DATED : 08 TH AUGUST, 2014 * RANJAN COPY FORWARDED TO :- 1. DR. GUNJAN JAIN, JAIPUR 2. THE ACIT, CIRCLE-6, JAIPUR 3. THE CIT (A) 4. THE CIT 5. THE D/R GUARD FILE (I.T.A. NO. 500/JP/2011) BY ORDER, AR ITAT JAIPUR.