VASUDEV GANGWANI, Jaipur V. ADIT, Jaipur

ITA 576/JPR/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1981 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 12-07-2017
• Assessment Year: 2001-2002
• Appeal Filed On: 31-05-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM ROY DCIT DHK
• Keywords: Reopening of assessment; Unexplained investment; Loose papers; Block assessment; Reason to believe; Reassessment proceedings
• Section: 69C; 143(3); 133A; 147; 68; 69; 148; 15

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 576/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2001-02 VASUDEV GANGWANI, E-14-16, GT BAZAR, MALVIYA NAGAR, JAIPUR. CUKE VS. ADIT(INTERNATIONAL TAXATION), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AFLPG 8130 P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM ROY (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 28/09/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 06/10/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER OF THE LD. CIT(A)-42, NEW DELHI DATED 22/03/2016 FOR THE A.Y. 2001-02 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT ORDER PASSED BY AO U/S 147 OF THE IT ACT, 1961 IS NOT BAR RED BY LIMITATION AND THEREBY AFFIRMING THE LEGALITY OF THE ORDER. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITION OF RS. 10,11,791/- U/S 69C ON ACCOUNT OF UNEXPLAINE D INVESTMENT IN BUILDING BY INCORRECTLY HOLDING THAT HONBLE ITAT H AS ALREADY GIVEN A ITA 576/JP/2016_ VASUDEV GANGWANI VS. ADIT (IT) 2 CONCLUSIVE FINDINGS OF FACTS ON THIS ISSUE IN AY 20 02-03 AND THEREBY NOT DECIDING THE MERIT OF THE ADDITION MADE BY AO. 2. THE ASSESSEE IS A NON-RESIDENT INDIAN, ENGAGED IN TRADING OF READYMADE GARMENTS IN THE NAME OF PROPRIETORY CONCE RN M/S YOURS FASHION. A SURVEY U/S 133A OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT) WAS CARRIED OUT ON 18/12/2001, IN WHICH THE ASSE SSEE HAD SURRENDERED RS. 12.00 LACS ON ACCOUNT OF UNDISCLOSE D INVESTMENT IN BUILDING, FURNITURE AND ELECTRICAL GOODS FOR THE PR EVIOUS YEAR RELEVANT TO ASSESSMENT YEAR 2002-03. THIS AMOUNT WAS ADDED U/S 69 OF THE ACT. THE RELEVANT PORTION OF THE ORDER IS AS UNDER: KEEPING IN VIEW THAT ABOVE DISCUSSIONS, THE NATURE OF THE LOOSE PAPER FOUND, THE REPLIES OF THE ASSESSEE AND STATEMENTS OF THE ASSESSEE AND HIS FATHER, AN ADDIT ION OF RS. 12,00,000/- IS MADE TO THE INCOME OF THE ASSESSEE U NDER SEC. 69 OF THE IT ACT, 1961. OUT OF THE ABOVE ADDITI ON OF RS. 12 LACS, ADDITION OF RS. 10,11,791/- IS BEING MADE PROTECTIVELY IN THIS YEAR TO BE MADE SUBSTANTIVELY IN ASSESSMENT YEAR 2001-02 I.E. THE YEAR OF PURCHASE O F BUILDING. THUS, AN ADDITION OF RS. 12,00,000/- IS MA DE TO THE INCOME OF THE ASSESSEE UNDER SECTION 69 OF THE INCO ME TAX ACT, 1961. IN THIS ORDER, THE ASSESSING OFFICER HAS CLEARLY M ENTIONED THAT OUT OF THE ADDITION OF RS. 12.00 LACS, THE ADDITION OF RS. 10,11,791/- BEING ITA 576/JP/2016_ VASUDEV GANGWANI VS. ADIT (IT) 3 MADE PROTECTIVELY IN THIS YEAR TO BE MADE SUBSTANTI VELY IN THE ASSESSMENT YEAR 2001-02 I.E. THE YEAR UNDER CONSIDE RATION. THE ASSESSING OFFICER DID NOT INITIATE THE PROCEEDINGS FOR THE ASSESSMENT YEAR 2001-02 FOR MAKING SUBSTANTIVE ADDITION. 3. THE LD. CIT(A) SUSTAINED THE FINDING OF THE ASSESS ING OFFICER THAT ADDITION OF RS. 10,11,791 IS TO BE INCLUDED AND ASS ESSED IN ASSESSMENT YEAR 2001-02, FOR WHICH THE ASSESSING OFFICER HAS H IMSELF WRITTEN IN THE BODY OF THE ASSESSMENT ORDER. IN THE APPEAL AGA INST THE ORDER, THE HONBLE ITAT JAIPUR BENCHES HAS GIVEN THE FINDING ON HIS ISSUE, WHICH IS AS UNDER: 'THE LD. CIT(A) VIDE PARA 2.3 OF HIS ORDER HAS OBSE RVED THAT THE AO HAS GIVEN CORRECT FINDING THAT CONSIDERING THE YEAR OF PURCHASE OF THE BUILDING THE RELEVANT UNACCOUNTED INVESTMENT OF RS. 10,11,791/- IS TO BE ASSESSED SUBSTANTIVELY IN THE ASSESSMENT YEAR 20 01-02 AND REMAINING ADDITION OF RS. 1,88,209/- WAS CONFIRMED FOR THE IMPUGNED ORDER. THE LD. CIT(A) DELETED THE PROTECTIVE ADDITI ON OF RS. 10,11,791/- WHICH HAS TO BE INCLUDED AND ASSESSED DURING THE AS SESSMENT YEAR 2001-02 WHICH HAS BEEN REFERRED BY THE AO. THE LD. CIT(A) DISMISSED THE GROUND OF THE ASSESSEE. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERSUED THE FACTS OF THE CASE. THE LD. CIT(A) HAS RIGHTLY OBSERVED VIDE PARA 2.3 O F HIS ORDER THAT SHRI RAMCHAND GANGWANI, THE MANAGER, FATHER AND POWER OF ATTORNEY HOLDER OF THE BUSINESS OF THE ASSESSEE AND THE EVID ENCE FOUND IN THE ITA 576/JP/2016_ VASUDEV GANGWANI VS. ADIT (IT) 4 SHAPE OF THE DOCUMENTS HAVING CLEAR NOTING REGARDIN G TOTAL INVESTMENT MENTIONING CASH PAYMENT PARTICULARS. THE STATEMENT OF SHRI RAMCHAND GANGWANI HAS EVIDENTIARY VALUE AGAINST THE ASSESSEE . SUBSEQUENT AFFIDAVIT COULD NOT BE PROVED AND ARE DEVOID OF TRU TH AND UNSUBSTANTIATED. IN SUCH CIRCUMSTANCES AND FACTS OF THE CASE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS, GROUND NO. 2 OF THE ASSESSEE IS DISMISSED.' ON THE BASIS OF THIS ORDER, THE ASSESSING OFFICER I SSUED NOTICE U/S 148 OF THE ACT FOR THE ASSESSMENT YEAR 2001-02 AND THE REASONS RECORDED AS UNDER: ' A SURVEY U/S 133A WAS CARRIED OUT AT THE BUSINESS P REMISES OF SHRI VASUDEV GANGWANI PROP M/S YOURS FASHION ON 18.12.20 01. DURING THE COURSE OF SURVEY PROCEEDING SOME LOOSE PAPERS, DOCU MENTS WERE FOUND IN WHICH INVESTMENT IN BUILDING, FURNITURE AND ELEC TRICAL GOODS WAS FOUND. THE BUSINESS WAS FOUND OPERATED BY THE FATHE R OF THE ASSESSEE, POA HOLDER, WHO HAS ADMITTED THAT THE ASSESSEE HAS MADE UNDISCLOSED INVESTMENT IN BUILDING, FURNITURE AND ELECTRICAL GO ODS. DURING THE COURSE OF SURVEY PROCEEDING HE HAS SURRENDERED RS. 12 LACS ON ACCOUNT OF UNDISCLOSED INVESTMENT. THE BUILDING WAS PURCHAS ED IN AY 2001-02 AND INVESTMENT IN SHOW ROOM WAS MADE. THEREFORE, AD DITION OF RS. 12 LAKHS WAS MADE. OUT OF WHICH RS. 1,88,209/- WAS PER TAIN TO AY 2002- 03 AND RS. 10,11,791/- PERTAIN TO AY 2001-02. DURIN G THE COURSE OF ASSESSMENT PROCEEDING OF RS. 10,11,791/- WAS ALSO A DDED IN AY 2002- 03 ON PROTECTIVE BASIS. THE ASSESSEE PREFERRED APPE AL BEFORE LD. CIT(A)- II, JAIPUR. THE LD. CIT(A) HAS CONFIRMED THE ADDITI ON OF RS. 12 LAKHS BUT THE LD. CIT(A) HAS DIRECTED THAT RS. 10,11,791/- PE RTAINS TO AY 2001-02. THEREFORE, THIS AMOUNT IS REQUIRED TO BE ADDED IN A Y 2001-02. THE LD. CIT(A) HAS CONFIRMED RS. 1,88,209/- IN AY 2002-03. THE HON'BLE ITAT ITA 576/JP/2016_ VASUDEV GANGWANI VS. ADIT (IT) 5 HAS ALSO CONFIRMED THE FINDING O THE LD. CIT(A) VID E ORDER DATED 31.12.2008. SINCE THE LD. CIT(A) HAS DIRECTED TO AD D RS. 10,11,791/- IN AY 2001-02. THEREFORE, RS. 10,11,791/- IS ESCAPED A SSESSMENT FOR THE YEAR UNDER CONSIDERATION ON ACCOUNT OF UNDISCLOSED INVESTMENT. THEREFORE, I HAVE REASON TO BELIEVE THAT RS. 10,11, 791/- IS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 R.W.S. 150 OF THE INCOME TAX ACT, 1961.' 4. AT THE OUTSET OF HEARING, THE LD AR HAS SUBMITTE D THAT THE ASSESSING OFFICER HAS TAKEN A SHELTER OF THE PROVIS IONS OF SECTION 150 OF THE ACT FOR INITIATING THE PROCEEDINGS U/S 148 O F THE ACT, WHICH IS UNJUSTIFIED. WHEN THE ASSESSING OFFICER HIMSELF WAS OF FIRM VIEW THAT THE SUBSTANTIVE ADDITION OF RS. 10,11,791/- IS TO B E MADE IN THE ASSESSMENT YEAR 2001-02 THEN HE MUST HAVE INITIATED THE PROCEEDINGS U/S 148 OF THE ACT FOR THE ASSESSMENT YEAR 2001-02 BUT HE HAD NOT DONE SO. AT THE TIME OF ASSESSMENT PROCEEDINGS FOR A.Y. 2002-03 HE WAS CERTAIN AND GAVE FIRM FINDINGS REGARDING TAX LIA BILITY OF RS. 10,11,791/-. THERE WAS SUFFICIENT TIME TO INITIATE P ROCEEDINGS U/S 148 WITHIN TIME AS PROVIDED IN SECTION 149 OF THE ACT. TH E A.O.S NON- INITIATION OF PROCEEDINGS U/S 148 WITHIN THE PERIOD AS PROVIDED IN SECTION 149 OF THE ACT IS SUFFERING FROM LACHES. THE REFORE, THE ASSESSING OFFICER CANNOT TAKE SHELTER OF THE PROVIS IONS OF SECTION 150 OF THE ACT IN INVOKING THE ACTION U/S 148 OF THE AC T. LD. AR SUBMITTED ITA 576/JP/2016_ VASUDEV GANGWANI VS. ADIT (IT) 6 THAT THAT THE PROCEEDINGS ARE BARRED BY LIMITATION. HE PLEADED TO SET ASIDE THE ORDER OF AUTHORITIES BELOW. THE LD AR ALSO PLACED RELIANCE ON THE FOLLOWING CASE LAWS: 1. SURBHI BUILDERS AND DEVELOPERS VS. ACIT 80 CCH 0007 (MUM.)(HC) (2012) (PB 23- 26) THE ASSESSEE IS A BUILDER AND DEVELOPER. A SURVEY WAS CONDUCTED U/S 133A ON ITS SISTER CONCERN. IN SURVEY PROCEEDINGS CERTAI N DOCUMENTARY MATERIALS WERE FOUND RELATING TO THE ASSESSEE. THE AO COMPLET ED THE ASSESSMENT U/S 143(3) FOR AY 2004-05 AFTER CONSIDERING THE DOCUMEN TARY MATERIALS FOUND DURING THE COURSE OF SURVEY AND THE EXPLANATIONS GI VEN BY THE ASSESSEE. HOWEVER, HE REOPENED THE ASSESSMENT U/S 147 AFTER T HE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT AY STATING THAT AS PER THE ORDER OF CIT(A) OF AY 2003-04, CERTAIN INCOME DID NOT PERTAIN TO AY 03-04 BUT PERTAINS TO THE YEAR UNDER CONSIDERATION AND THUS IT HAS REASON TO BELIEVE THAT ASSESSEE HAS ESCAPED ASSESSMENT FOR AY 04-05.IT WAS HELD THA T THE EFFECT OF SECTION 150(1) IS TO LIFT THE BAR OF LIMITATION WHICH IS CO NTAINED IN SECTION 149. SECTION 150 DOES NOT ENLARGE THE POWER OF THE AO TO REOPEN AN ASSESSMENT UNDER SECTION 148 NOR DOES IT CONFER UPON THE AO A JURISDICTION WHICH IS WIDER THAN WHAT IS CONTEMPLATED BY SECTION 148. ALL THAT SECTION 150 PUTS IN PLACE IS TO LIFT THE BAR OF LIMITATION WHICH SECTIO N 149 ENACTS WHERE SECTION 148 IS TAKEN RECOURSE TO FOR THE PURPOSE OF MAKING AN ASSESSMENT OR REASSESSMENT OR RE-COMPUTATION IN CONSEQUENCE OF OR TO GIVE EFFECT TO A FINDING OR DIRECTION CONTAINED IN AN ORDER PASSED B Y AN AUTHORITY IN A PROCEEDING UNDER THE ACT BY WAY OF AN APPEAL, REFER ENCE OR REVISION. SINCE ALL THE NECESSARY FACTS WERE AVAILABLE WITH THE AO AT THE TIME OF MAKING ASSESSMENT U/S 143(3) FOR AY 2004-05, JURISDICTIONA L CONDITION FOR REOPENING AN ASSESSMENT AFTER FOUR YEARS HAS NOT BE EN FULFILLED. THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. THUS, THE REOPENING OF THE ASSESSMENT CANNOT BE SUSTAINED ON THE BASIS OF THE REASONS REC ORDED BY THE AO. 2. RAKESH N DUTT VS. ACIT311 ITR 247 (BOM.)(HC) (PB 27-30) IN THIS CASE, ON THE BASIS OF THE MATERIAL GATHERE D DURING THE COURSE OF SEARCH AND THE STATEMENT RECORDED OF THE ASSESSEE, THE BLOCK ASSESSMENT PROCEEDINGS WERE INITIATED. IN THE BLOCK ASSESSMENT ORDER, SHARE APPLICATION MONEY OF RS.90 LACS IN RESPECT OF TWO COMPANIES WAS TREATED AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE WHO IS A DIRECT OR IN THESE COMPANIES. IN APPEAL THERE AGAINST, TRIBUNAL HELD THAT THE ADDITI ONS BY WAY OF UNDISCLOSED INCOME CANNOT BE MADE BY APPLYING THE PROVISIONS OF SECTION 68 TO 69C IN A ITA 576/JP/2016_ VASUDEV GANGWANI VS. ADIT (IT) 7 BLOCK ASSESSMENT AND THAT THE SAME CAN BE MADE IN R EGULAR ASSESSMENTS. AT THE SAME, IT OBSERVED THAT THE ADDITION, IF AT A LL PERMISSIBLE, CAN BE CONSIDERED IN THE HANDS OF TWO COMPANIES AND NOT IN THE HANDS OF THE ASSESSEE DIRECTOR.LT WAS HELD THAT IN VIEW OF THE A BOVE CATEGORICAL FINDING RECORDED BY THE ITAT, THE CONTENTION OF THE REVENUE THAT THE TRIBUNAL HAS GIVEN A FINDING OR DIRECTION TO THE EFFECT THAT THE AMOUNT OF RS. 90 LAKHS ARE LIABLE TO BE TAXED IN THE REGULAR ASSESSMENTS OF TH E ASSESSEE CANNOT BE ACCEPTED. CONSEQUENTLY, REOPENING OF THE ASSESSMENT S BY INVOKING THE PROVISIONS OF SECTION 150 OF THE ACT CANNOT BE SUST AINED. ONCE IT IS HELD THAT SECTION 150 OF THE ACT IS NOT APPLICABLE, THEN THE REOPENING OF THE ASSESSMENT BEYOND THE PERIOD OF 6 YEARS FROM THE EN D OF THE RELEVANT ASSESSMENT YEAR WOULD BE TIME BARRED. 3. ANIL SURI VS. ITO (2014) 40 CCH 88 (MUM.) (TRIB. ) AO REOPENED ASSESSMENT TAKING RECOURSE TO PROVISIO N OF SEC. 150 ON BASIS OF ORDER PASSED BY TRIBUNAL IN YEAR 2011 IN ASSESSE E'S CASE FOR AY 2002-03, WHEREIN IT WAS OBSERVED THAT SINCE ASSESSEE RECEIVE D CONSIDERATION IN PART AND GRANTED DEVELOPER RIGHT TO ENTER PLOT TO CARRY OUT CONSTRUCTION WORK OF ADDITIONAL BUILT UP AREA ON 09.02.2000 ITSELF, BY V IRTUE OF DEEMING PROVISIONS OF SEC. 45(1), CAPITAL GAIN WAS TO BE BR OUGHT TO TAX FOR AY 2000- 01 AND NOT IN AY 2002-03. CIT(A) HELD THAT RECOURSE BY AO TO PROVISIONS OF SEC. 150 READ WITH SEC. 148 FOR REOPENING THE ASSES SMENT WAS VALID. HELD SEC. 150(1) IS AN EXCEPTION WHICH BRINGS WITHIN ITS AMBIT ONLY SUCH CASES WHERE REOPENING OF PROCEEDINGS MAY BE NECESSARY TO COMPLY WITH AN ORDER OF HIGHER AUTHORITY. OBSERVATION OF TRIBUNAL FOR PU RPOSE OF DELETING ADDITION IN RESPECT OF AY 2002-03 CANNOT BE TREATED TO BE A 'FINDING' FOR REOPENING AY 2001-02 (SIC AY 2000-01) AS APPEAL FOR SAID ASSE SSMENT YEAR HAS NOT BEEN BEFORE TRIBUNAL FOR ADJUDICATION. OBSERVATION OF TRIBUNAL THAT CASE OF ASSESSEE IS TO BE BROUGHT TO TAX FOR ASSESSMENT YEA R 2000-01 AND NOT ASSESSMENT YEAR 2002-03 AS DONE BY AO WAS INCIDENTA L FOR HOLDING THAT ADDITION MADE IN AY 2002-03 WAS NOT JUSTIFIABLE AND SAME CANNOT BE BASIS FOR HAVING RECOURSE TO SEC. 150 BY HOLDING IT AS 'F INDING OR DIRECTION'. SECTION 150 WAS NOT APPLICABLE TO ASSESSEES CASE. ACCORDIN GLY, REOPENING OF ASSESSMENT BEYOND THE PERIOD OF SIX YEARS FROM END OF THE RELEVANT ASSESSMENT YEAR WOULD BE TIME BARRED. 4. ITO VS. AAREN CHEMICALS (2013) 37 CCH 224 (MUM.) (TRIB.) CIT(A) FOR AY 2005-06 FOUND THAT SUNDRY CREDITORS, IN RESPECT OF WHOM ADDITIONS WAS MADE WERE OLD AND RELEVANT PURCHASES WERE MADE IN AYS 2000-01 TO 2004-05. CIT(A) DELETED ADDITION. CIT(A) STATED THAT AO WOULD ITA 576/JP/2016_ VASUDEV GANGWANI VS. ADIT (IT) 8 BE FREE TO EXAMINE THOSE PURCHASES IN RESPECT OF RE LEVANT AYS. PURSUANT TO ABOVE ORDER, AO INITIATED REASSESSMENT PROCEEDINGS FOR AY 2001-02 BY ISSUE OF NOTICE U/S 148 STATING THAT INCOME OF ASSE SSEE ESCAPED ASSESSMENT AND CIT(A) HAD DIRECTED AO TO REOPEN SAID AY. AO RE LIED ON SECTION 150(1) AND 150(2) FOR REOPENING. THEREAFTER, AO MADE ADDIT ION SECTION 150 OF TWO CREDITORS HOLDING THAT THESE WERE NOT GENUINE. CIT( A) STATED THAT ASSESSMENT WAS REOPENED BEYOND PERIOD OF SIX YEARS AND THAT THERE WAS NO SUCH DIRECTION GIVEN BY CIT(A), THUS REOPENING OF A SSESSMENT WAS NOT JUSTIFIED. IT WAS HELD THAT OBSERVATION MADE BY CIT (A) WHILE DISPOSING APPEAL FOR AY 2005-06 WAS ONLY OPTION GIVEN TO AO T O TAKE OR NOT TO TAKE ACTION IN RESPECT OF CREDITORS IN RELEVANT AYS IN W HICH PURCHASES WERE MADE AND THAT TOO STRICTLY WITHIN FOUR CORNERS OF LAW TO ASCERTAIN GENUINENESS OF PURCHASES. SINCE REASSESSMENT PROCEEDING WAS INITIA TED BEYOND PERIOD SPECIFIED IN SECTION 149, IT WAS VIEWED THAT ACTION OF AO TO ISSUE NOTICE U/S 148 WAS BARRED BY LIMITATION AND SAID NOTICE WAS NO T SAVED UNDER PROVISION OF SECTION 150(1) OR 150(2). HENCE, ORDER OF CIT(A) THAT ACTION OF AO WAS NOT IN ACCORDANCE WITH LAW AND ASSESSMENT ORDER PAS SED BY AO WAS LIABLE TO BE QUASHED, WAS CONFIRMED. 5. EMGEEYAR PICTURES PVT. LTD. VS. DCIT (2016) 138 DTR 20/159 ITD 1 (CHENNAI) (TRIB.) (TM) WHILE DISPOSING OF THE APPEALS FOR AYS 2003-04 AND 2004-05, A CASUAL OBSERVATION WAS MADE BY THE TRIBUNAL TO DEAL WITH T HE ISSUE BEFORE THEM AS TO WHETHER THE CAPITAL GAINS IS ASSESSABLE IN AYS 2 003-04 AND 2004-05. PURSUANT THERETO, AO SOUGHT TO INVOKE THE PROVISION S OF SEC. 148 R.W.S. 150 FOR THE AY 2001-02 AND ACCORDINGLY ISSUED A NOTICE ON 10.06.2011. IT WAS HELD THAT THERE IS NO SPECIFIC FINDING OR DIRECTION IN THE ORDER OF THE TRIBUNAL THAT THE IMPUGNED CAPITAL GAIN IS ASSESSABLE TO TAX IN AY 2001-02. EVEN OTHERWISE, THE REOPENING OF ASSESSMENT FOR THE AY 2 001-02 IS BAD IN LAW AS THE LIMITATION FOR ISSUING NOTICE U/S 148 HAD EXPIR ED IN THE YEAR 2008, WELL BEFORE THE TRIBUNAL PASSED THE SAID ORDER IN THE YE AR 2010. 5. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE ASSESSING OFFICER HAS RIGHTLY INITIATED THE PROCEEDINGS ON TH E BASIS OF DECISION OF THE HONBLE ITAT, THEREFORE, THE ISSUE IS COVERED BY THE PROVISIONS OF SECTION 150 OF THE ACT. ITA 576/JP/2016_ VASUDEV GANGWANI VS. ADIT (IT) 9 6. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. IT IS FACT THAT THE ASSESSING OFFICER WAS WELL AWARE ABOUT THE FACT THAT T HE ADDITION OF RS. 10,11,791/- IS TO BE MADE IN THE ASSESSMENT YEA R 2001-02 SUBSTANTIVELY AT THE TIME OF FINALIZATION OF ASSESS MENT FOR THE ASSESSMENT YEAR 2002-03. HE HAS MADE THIS ADDITION ONLY ON PROTECTIVE BASIS IN THE ASSESSMENT YEAR 2002-03. THE RELEVANT PORTION OF THE ASSESSING OFFICERS ORDER IS AS UNDER:- 'IN MY CONSIDERED VIEW THE ASSESSING OFFICER HAS GI VEN CORRECT FINDING THAT CONSIDERING YEAR OF PURCHASE OF THE BUILDING T HE RELEVANT UNACCOUNTED INVESTMENT OF RS. 10,11,791/- IS TO BE ASSESSED SUBSTANTIVELY IN THE AY 2001-02 AND REMAINING ADDIT ION OF RS. 1,88,209/- IS CONFIRMED FOR THE AY UNDER CONSIDERATION. HOWEVE R, THE PROTECTIVE ADDITION MADE OF AFORESAID AMOUNT OF RS. 10,11,791/ - IN THIS YEAR IS HEREBY DELETED WHICH IS TO BE INCLUDED AND ASSESSED IN THE AY 2001-02 FOR WHICH THE AO HIMSELF HAS WRITTEN IN THE BODY OF ASSESSMENT ORDER. WITH THIS DISCUSSION, THE RELEVANT GROUND OF APPEAL IS HEREBY DISMISSED.' THE REASONS RECORDED BY THE ASSESSING OFFICER AS REP RODUCED ABOVE SHOWS THAT FOR THE LIMITATION, THE ASSESSING OFFICER SOUGHT HELP OF SECTION 150 OF THE ACT. THE PROVISIONS OF SECTION 15 0 OF THE ACT READ AS UNDER: 150. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 149 , THE NOTICE UNDER SECTION 148 MAY BE ISSUED AT ANY TIME FOR THE PURPOSE OF MAKIN G AN ASSESSMENT OR REASSESSMENT OR RECOMPUTATION IN CONS EQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN AN ORDER PASSED BY ANY AUTHORITY IN ANY PROCEEDING UNDER THIS ACT BY WAY O F APPEAL, REFERENCE OR REVISION OR BY A COURT IN ANY PROCEEDING UNDER ANY OTHER LAW. ITA 576/JP/2016_ VASUDEV GANGWANI VS. ADIT (IT) 10 (2) THE PROVISIONS OF SUB-SECTION (1) SHALL NOT APP LY IN ANY CASE WHERE ANY SUCH ASSESSMENT, REASSESSMENT OR RECOMPUTATION AS I S REFERRED TO IN THAT SUB-SECTION RELATES TO AN ASSESSMENT YEAR IN RESPEC T OF WHICH AN ASSESSMENT, REASSESSMENT OR RECOMPUTATION COULD NOT HAVE BEEN MADE AT THE TIME THE ORDER WHICH WAS THE SUBJECT-MATTER OF THE APPEAL, REFERENCE OR REVISION, AS THE CASE MAY BE, WAS MADE BY REASON OF ANY OTHER PROVISION LIMITING THE TIME WITHIN WHICH ANY ACTION FOR ASSES SMENT, REASSESSMENT OR RECOMPUTATION MAY BE TAKEN. THE LIMITATIONS AS PROVIDED IN SECTION 149 OF THE AC T ARE NOT APPLICABLE FOR MAKING AN ASSESSMENT OF REASSESSMENT OR RECOMPU TATION IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN ANY ORDER PASSED BY ANY AUTHORITY IN ANY PROCEED INGS UNDER THIS ACT BY WAY OF APPEAL, REFERENCE OR REVISION. THUS THE LI MITATION AS PROVIDED IN SECTION 149 FOR ISSUING NOTICE U/S 148 OF THE AC T IS NOT TO BE CONSIDERED WHEN THE REASSESSMENT IS IN CONSEQUENCE O F OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN ANY APPEAL, REFERENCE OR REVISION. IN THIS CASE, THE ASSESSING OFFICER HIMSE LF AS REPRODUCED ABOVE RECORDED THAT THE ADDITION OF RS. 10,11,791/- IS TO BE SUBSTANTIVELY MADE IN ASSESSMENT YEAR 2001-02 I.E. THE YEAR UNDER CONSIDERATION. THEREAFTER HE HAS WAITED FOR THE ITAT APPEAL ORDER TO INITIATE PROCEEDINGS U/S 148 OF THE ACT AND THEN SO UGHT THE HELP OF THE PROVISIONS OF SECTION 150 OF THE ACT FOR COMING OUT OF THE LIMITATIONS AS PROVIDED IN SECTION 149 OF THE ACT, WHICH IS COMPLET ELY UNJUSTIFIED. THE A.O. WAS LEGALLY EMPOWERED TO INITIATE PROCEEDINGS ON HIS OWN WITHIN ITA 576/JP/2016_ VASUDEV GANGWANI VS. ADIT (IT) 11 THE TIME AS PROVIDED IN SECTION 149 OF THE ACT AT T HE RELEVANT TIME. THEREFORE, I SET ASIDE THE ORDER OF THE ASSESSING OF FICER BEING BARRED BY LIMITATION. THIS GROUND OF APPEAL IS ALLOWED. SINC E THE ASSESSMENT HAS BEEN QUASHED BEING BARRED BY LIMITATION, THEREF ORE, THE OTHER GROUNDS OF APPEAL ARE BEING ACADEMIC, HENCE THE SAM E ARE BEING NOT ADJUDICATED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/10/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06 TH OCTOBER, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI VASUDEV GANGWANI, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ADIT (INTERNATIONAL TAXATION) JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 576/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR