PURSHOTTAM BUDHWANI, MUMBAI V. ASST CIT CIR 41, MUMBAI

ITA 5175/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1866 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 31-12-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 06-07-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A C TEJPAL
• Assessee Lawyers: AJAY R SINGH; DR K SHIVARAM
• Keywords: Opportunity of being heard; Retrospective amendment
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO.351/M/2009 (AY: 2000-2001) I.T.A. NO.352/M/2009 (AY: 2001-2002) I.T.A. NO.5175/M/2011 (AY: 2001-2002) SHRI PURUSHOTTAM G. BUDHWANI, B-2, HIMALAYA SOCIETY, MILIND NAGAR, ASALFA, GHATKOPAR (WEST), MUMBAI-400 084. PAN: ADGPB8380D VS. ACIT, CENTRAL CIRCLE-41, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. (APPELLANT) (RESPONDENT) I.T.A. NO.750/M/2009 (AY: 2000-2001) ACIT, CENTRAL CIRCLE-41, ROOM NO.655, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. VS. SHRI PURUSHOTTAM G. BUDHWANI, B-2, HIMALAYA SOCIETY, MILIND NAGAR, ASALFA, GHATKOPAR (WEST), MUMBAI-400 084. PAN: ADGPB8380D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI DR. K. SHIVARAM & MR. AJAY R SINGH REVENUE BY : SHRI A.C. TEJPAL, CIT - DR DATE OF HEARING: 8.1.2013 DA TE OF ORDER: 30.1.2013 O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE FOUR APPEALS UNDER CONSIDERATION. OUT O F THE FOUR APPEALS, ITA NO. 351/M/2009 (AY: 2000-2001) AND ITA NO. 750/M/2009 ( AY: 2000-2001) ARE CROSS APPEALS AND REMAINING TWO APPEALS ARE FILED BY THE ASSESSEE FOR THE SAME ASSESSMENT YEAR 2001-2002. THREE APPEALS ARE FILED AGAINST THE SAME ORDER OF CIT (A) CENTRAL-III, MUMBAI DATED 7.11.2008 AND ONE APPE AL ITA NO. 5175/M/2011 IS FILED AGAINST THE ORDER OF CIT (A)-38, MUMBAI DATED 20.1.20011 FOR THE ASSESSMENT YEAR 2001-2002. FOR THE SAKE OF CONVENIENCE, WE AR E ADJUDICATING ALL THE FOUR APPEALS BY THIS CONSOLIDATED ORDER IN THE FOLLOWING PARAGRAPHS. 2 2. DURING THE PROCEEDINGS BEFORE US, DR. SHIVARAM, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ADDITIONAL GROUNDS FILED BEFORE US AND THE SAME ARE READ AS UNDER: 1. THE ASSESSMENT MADE U/S 143(3) R.W.S U/S 153A ON BASIS OF SEARCH ACTION U/S 132 IS NOT A DENOVO ASSESSMENT AS POWER OF REVIEW IS NOT AVAILABLE UNDER THE ACT AND THEREFORE, ADDIT ION OF RS. 1,52,84,935/- MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT COMPLETED U/S 143(3) R.W.S 153A IS NOT BASED ON SEIZED MATERIAL OR ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH ACTION HENCE, THE SAME MAY BE DELETED. 2. THE WARRANT OF SEARCH AND THE PANCHANAMA WERE IN THE NAME OF TWO PERSONS NAMELY SHRI PURSHOTTAM BUDHWANI AND SHRI MADHUSUDAN G. BUDHWANI HOWEVER, THE ASSESSMENT IS C OMPLETED ONLY IN NAME OF THE ASSESSEE, THEREFORE THE ASSESSMENT F RAMED ONLY ON ONE PERSON IN BAD IN LAW. 3. REFERRING TO ADDITIONAL GROUND NO.1, LD COUNSEL MENTIONED THAT THIS ISSUE RELATES TO THE VALIDITY OF NOTICE ISSUED U/S 153A O F THE ACT AND THE SAME GOES TO THE ROOT OF THE MATTER. HE FURTHER MENTIONED THAT THIS ISSUE WAS NOT RAISED BEFORE THE LOWER AUTHORITIES AND THE SAME IS BEING RAISED BEFO RE THE TRIBUNAL FOR THE FIRST TIME. AS PER LD COUNSELS ARGUMENT, THE ISSUE HAS TO BE D ECIDED IN FAVOUR OF THE ASSESSEE CONSIDERING THE SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. V. DEPUTY COMMISSIONER OF INCOME-TAX (137 ITD 287) AS WELL AS THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANIL KUMAR BHATIA IN ITA NOS.1626, 1632, 1998, 2006, 2019 AND 2020 OF 2010, DATED 7 TH AUGUST, 2012. AS PER PARA 19 OF THE SAID HONBLE HIGH COURT JUDGMENT, IT WAS OBS ERVED THAT UNDER THE PROVISIONS OF SECTION 153A, THE ASSESSING OFFICER IS BOUND TO ISSUE NOTICE TO THE ASSESSEE TO FURNISH RETURNS FOR EACH ASSESSMENT YEAR FALLING WI THIN THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING TO THE ASSESSMENT YEAR RELEVA NT TO THE PREVIOUS YEAR IN WHICH THE SEARCH OR REQUISITION WAS MADE. FURTHER, HE MENTIONED THAT THE ISSUE ADJUDICATED BY THE SB IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. V. DEPUTY COMMISSIONER OF INCOME-TAX (137 ITD 287) WAS KEPT O PEN BY THE HONBLE HIGH COURT. FURTHER, REFERRING TO ALL CARGO GLOBAL LOGIS TICS LTD (SUPRA), AS PER PARA 58 OF THE SAID SPECIAL BENCH DECISION, CERTAIN PRINCIPLES ARE SET OUT WHICH ARE RELEVANT FOR NOTICES TO BE ISSUED U/S 153A OF THE ACT. THE SAID PRINCIPLES READ AS FOLLOWS: 3 58. THUS, QUESTION NO.1 BEFORE US IS ANSWERED AS UN DER : (A) IN ASSESSMENTS THAT ARE ABATED , THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON H IM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSES SMENT YEARS SEPARATELY; (B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS - (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COUR SE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL AS SESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN T HE COURSE OF SEARCH . 4. IN RESPECT OF THE BENCHS QUERY ON THE FULFILLMEN T OF THE SAID GUIDELINES / CONDITIONS SPECIFIED IN THE SPECIAL BENCH DECISION, LD COUNSEL MENTIONED THAT FOR THIS PURPOSE, THE APPEALS OF THE ASSESSEE MAY BE SET ASI DE TO THE FILES OF THE AO FOR EXAMINATION OF THE ISSUES AND DECIDING THE APPEALS IN THE LIGHT OF THE ABOVE REFERRED SPECIAL BENCH DECISION AND OTHER RELEVANT DECISIONS , IF ANY, IN FORCE. LD DR DOES NOT HAVE ANY OBJECTION IN THIS REGARD. HOWEVER, HE MEN TIONED THAT ALL THE REGULAR GROUNDS RAISED, IN THE APPEALS OF THE ASSESSEE AS W ELL AS THE REVENUE, SHOULD ALSO BE SET ASIDE CONSIDERING THE CHANGE OF LEGAL MATRIX RELATING TO THE PROVISIONS OF SECTION 153A OF THE ACT. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORDE RS OF THE REVENUE AUTHORITIES AND THE ADDITIONAL GROUNDS RAISED BEFOR E US. UNDISPUTEDLY, THE ADDITIONAL GROUNDS ARE LEGAL IN NATURE AS EVIDENT FROM THE VER Y NATURE OF THE GROUNDS RAISED. CONSIDERING THE JUDGMENT OF HONBLE APEX COURT IN T HE CASE OF CIT VS. NATIONAL THERMAL POWER CORPORATION (NTPC) (229 ITR 383) (SC) , WE ARE OF THE OPINION THAT THE SAID ADDITIONAL GROUNDS MUST BE ADMITTED FOR AD JUDICATION. SO FAR AS THE ADJUDICATION OF THE REGULAR GROUNDS AND THE APPLICA BILITY OF THE SPECIAL BENCH DECISION AND OTHER RELEVANT DECISIONS, IF ANY, ON T HE SUBJECT, IT IS AN ADMITTED FACT THAT THE MATTER HAS TO BE SET ASIDE TO THE FILES OF AO. THEREFORE, WE AGREE WITH THE PROPOSITIONS OF BOTH THE PARTIES IN THE DISPUTE, AC CORDINGLY ADDITIONAL GROUND NO.1 AND OTHER REGULAR GROUNDS RAISED BY THE ASSESSEE AS WELL AS THE REVENUE VIDE ITA NO.351/M/2009; ITA NO.352/M/2009 AND ITA NO.750/M/2 009 ARE SET ASIDE TO THE FILES OF THE AO . IN CONTINUATION, ITA NO. 5175/M/2011 WHICH IS RELE VANT FOR THE AY: 2001-2002 BEING CONSEQUENTIAL, THE SAME HAS ALSO TO BE SET ASIDE TOO FOR FRESH 4 ADJUDICATION AFTER GRANTING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, ALL THE GROUNDS RAISED IN ALL THE FOUR APPEALS MENTIONED ABOVE ARE SET ASIDE. 6. REGARDING ADDITIONAL GROUND NO.2, LD COUNSEL MEN TIONED THAT THE SAME IS NOT PRESSED CONSIDERING THE AMENDMENT BY THE FINANCE AC T, 2012 WHEREBY TO THE SECTION 292CC OF THE ACT WITH RETROSPECTIVE EFFECT. CONSIDERING THE ADMITTED POSITION, WE ARE OF THE OPINION THAT ADDITIONAL GROUND NO.2 R AISED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. 7. REGARDING THE OTHER GROUNDS RAISED BY THE PARTIE S IN THE APPEALS, IN OUR OPINION, THEIR ADJUDICATION BECOMES AN ACADEMIC EXE RCISE AT THIS POINT OF TIME IN VIEW OF OUR FINDINGS ABOVE ON THE ADDITIONAL GROUND S. THEREFORE, WE SET ASIDE ALL THE SAID GROUNDS TOO TO THE FILES OF THE AO FOR FRESH L OOK AND FOR WANT OF FRESH DECISION CONSIDERING THE AVAILABLE JUDICIAL FINDINGS IN FORC E. ACCORDINGLY, THESE GROUNDS ARE SET ASIDE. 8. IN THE RESULT, THREE APPEALS FILED BY THE ASSESSE E AND ONE APPEAL FILED BY THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JANUARY, 2013. SD/- SD/- (B.R. MITTAL) (D. KARUNAKARA RA O) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : .1.2013 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR C, BENCH, ITAT, MUMBAI. 6. GUARD FILE. 5 // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI