M/s Navjeewan Apartments Pvt. Ltd., Kanpur V. ACIT Cent. Circle-vI, Kanpur

ITA 577/LKW/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78538 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 19-05-2014
• Assessment Year: misc
• Appeal Filed On: 04-10-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEK MISRA
• Assessee Lawyers: P K KAPOOR
• Keywords: Search and seizure; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO S . 577 TO 583/LKW/2011 ASSESSMENT YEAR S : 2001 - 02 TO 2007 - 08 M/S NAVJEEWAN APARTMENTS P VT. LTD. 7/130, SWAROOP NAGAR KANPUR V. THE ASSTT. CIT CENTRAL CIRCLE VI KANPUR PAN: AAACN4459P (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. P. K. KAPOOR, C.A. RESPONDENT BY: SHRI. VIVEK MISRA, CIT (DR) DATE OF HEARING: 19 05 2014 DATE OF PRONOUN CEMENT: 23 05 2014 O R D E R PER SUNIL KUMAR YADAV: THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST THE RESPECTIVE ORDER OF THE LD. CIT(A) ON COMMON GROUNDS AND AS SUCH THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OF THROUGH THIS CONSOLIDAT ED ORDER. FOR THE SAKE OF REFERENCE, WE EXTRACT THE GROUNDS RAISED IN ITA NO.577/LKW/2011 AS UNDER: - 1 . BECAUSE THE 'APPELLANT' HAD RAISED SUBSTANTIAL OBJECTIONS TO THE VERY VALIDITY OF INITIATION OF PROCEEDINGS UNDER SECTION 153C ALSO THE ASSESSMENT MADE T HERE UNDER AND THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DISMISSING THE SAME BY HOLDING THAT THERE IS NO TECHNICAL INFIRMITY AS SUCH IN FRAMING THE ASSESSMENT ORDER. THUS, TECHNICAL OBJECTIONS RAISED IN THIS REGARD BY THE APPELLANT ARE REJECTED. 2 . BECAUSE NOT ONLY THE SEARCH AND SEIZURE ACTION IN THE CASES OF 'GROUP OF PERSONS' BY ISSUANCE OF JOINT WARRANTS OF AUTHORIZATION WERE ILLEGAL, THE PRE - CONDITIONS FOR INITIATING PROCEEDINGS UNDER PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : SECTION 153C IN THE CASE OF THE 'APPELLANT' WERE WHOLLY NON - EXISTENT AND INITIATION OF THE SAME AS WELL AS ASSESSMENT MADE THERE UNDER WERE LIABLE TO BE DECLARED AS ILLEGAL, VOID AB - INITIO. 3 . BECAUSE THERE DID NOT EXIST ANY VALID ORDER TRANSFERRING JURISDICTION IN THE CASE OF THE 'APPELLANT' AND THE ACIT, CENTRAL CIRCLE - VI , KANPUR (PASSING THE ASSESSMENT ORDER DATED 31.12.2008) NEVER GOT VESTED WITH THE JURISDICTION TO MAKE ASSESSMENT UNDER SECTION 153C IN THE CASE OF THE 'APPELLANT' 4 . BECAUSE THE ASSESSMENT ORDER DATED 31.12.2008 AS HAD BEEN IMPUGNED IN THE APPEAL PREFERRED BEFORE 'CIT(A)' WAS INVALID AS (A) MANDATORY NOTICE UNDER SECTION 143(2) WAS NEVER ISSUED/SERVED ON THE 'APPELLANT'; AND (B) IN ANY CASE THE REQUISITE APPROVAL, AS REQUIRED TO BE GIVEN BY JT. CIT, CENTRAL CIRCLE, KANPUR, WAS NOT THERE. WITHOUT P REJUDICE TO THE AFORESAID 5 . BECAUSE THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN DISALLOWING/UPHOLDING THE DISALLOWANCE OF EXPENSES TO THE EXTENT OF RS.5,000/ - ON ADHOC BASIS. 6 . BECAUSE ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW APPLICABLE T HERETO, NO SUCH DISALLOWANCE COULD BE MADE IN THE ASSESSMENT MADE UNDER SECTION 153C, OWING TO THERE BEING NO INCRIMINATORY MATERIAL FOUND IN SEARCH THAT TOOK PLACE ON A GROUP OF PERSON IN JOINT NAME. 7 . BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 2 . SIMILAR GROUNDS ARE RAISED IN OTHER APPEALS, EXCEPT THE DIFFERENCE IN QUANTUM. IN ALL THESE APPEALS EXCEPT ITA NO.582/LKW/2011, AD HOC DISALLOWANCE OF RS.5,000/ - EACH WAS MADE OUT OF EXPENSES CLAIMED BY THE ASSESSEE. IN ITA NO.582/LKW/2011, AD HOC DISALLOWANCE OF RS.3,000/ - WAS MADE OUT OF EXPENSES CLAIMED BY THE ASSESSEE. BESIDES AD HOC DISALLOWANCE, THE ASSESSEE HAS CHALLENGED THE ORDER OF THE LD. CIT(A) ON VARI O US GROUNDS AS GROUNDS NO.1 TO 4, BUT NO AR GUMENT WAS ADVANCE D ON THESE GROUNDS. T HEREFORE, WE REJECT THE SAME. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : 3 . SO FAR AS AD HOC DISALLOWANCE IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS CLAIMED NOMINAL EXPENDITURE ON ACCOUNT OF SALARY AND ON OTHER HEADS , WHIC H WERE NOT ACCEPTED BY THE ASSESSING OFFICER AND MADE AD HOC DISALLOWANCE OF RS.5,000/ - OR RS.3,000/ - WITHOUT POINTING OUT ANY SPECIFIC DEFECT IN THE MAINTENANCE OF THE ACCOUNT. SINCE AD HOC DISALLOWANCE IS NOT PERMISSIBLE UNDER THE LAW WITHOUT POINTING O UT SPECIFIC DEFECT IN THE MAINTENANCE OF THE ACCOUNT , THE SAME MAY BE DELETED. 4 . THE LD. D.R., ON THE OTHER HAND, HAS SUPPORTED THE ORDER OF THE LD. CIT(A). 5 . HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT THE ASSESSING OFFICER HAS MAD AD HOC DISALLOWANCE FOR THE SAKE OF DISALLOWANCE WITHOUT POINTING OUT ANY SPECIFIC DEFECT IN THE MAINTENANCE OF ACCOUNTS. MOREOVER, IN ALL THE ASSESSMENT YEARS, THE ASSESSING OFFICER HAS MADE AD HOC DISALLOWANCE OF RS.5,000/ - EXCEPT IN ITA NO.582/LKW /2011, IN WHICH AD HOC DISALLOWANCE OF RS.3,000/ - WAS MADE. SINCE THE AD HOC DISALLOWANCE WAS MADE WITHOUT POINTING OUT ANY SPECIFIC DEFECT IN THE MAINTENANCE OF THE ACCOUNT , WE FIND NO MERIT THEREIN. ACCORDINGLY, WE DELETE THE SAME. 6 . IN THE RESULT, APPEA LS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.5.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 23 RD MAY , 2014 JJ: 1905 PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )