Shri Jeetu Keshi S/o. Shri Lanka Bahadur Keshi, Kapurthala V. The Income-tax Officer, Kapurthala

ITA 589/ASR/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63586 (ITAT-AMRITSAR)
• Duration Of Justice: 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 08-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIA
• Keywords: Invalid notice; Search and seizure; Principle of natural justice; Validity of assessment; Documents seized
• Section: 143(3); 142(1); 153A; 147; 148; 132; 139

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NOS.582, 583, 584 & 585(ASR)/2011 ASSESSMENT YEARS:2005-06, 2006-07,2007-08 & 2008- 09 PAN :BVPPK2835N SHRI MITHILESH KUMAR VS. INCOME TAX OFFICER, S/O SH. SURESH SHAH, KAURTHALA-1, R/O GALI NO.8, SATNAMPURA, KAPURTHALA. NEAR MARKFED CHOWK, KAPURTHALA. (APPELLANT) (RESPONDENT) I.T.A. NOS.586, 587, 588 & 589(ASR)/2011 ASSESSMENT YEARS:2004-05, 2005-06, 2007-08 & 2008 -09 PAN :BVPPK3083E SHRI JEETU KESHI VS. INCOME TAX OFFICER, S/O SH. LANKA BAHADUR KESHI, KAURTHALA-1, R/O GALI NO.8, SATNAMPURA, KAPURTHALA. NEAR MARKFED CHOWK, KAPURTHALA. (APPELLANT) (RESPONDENT) APPELLANTS BY: SH. SURINDER MAHAJAN, CA RESPONDENT BY:SH. R.L. CHHANALIA, DR DATE OF HEARING:08/11/2012 DATE OF PRONOUNCEMENT:21/11/2012 ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 2 ORDER PER BENCH ; THESE APPEALS OF BOTH THE ASSESSEES ARISE FROM THE CONSOLIDATED ORDERS OF THE LD. CIT(A), JALANDHAR, FOR ALL THE ASSESSMEN T YEARS I.E. 2005-06, 2006-07, 2007-08 & 2008-09 IN THE CASE OF MITHILESH KUMAR, WHICH HAS BEEN FOLLOWED BY THE LD. CIT(A), JALANDHAR BY HIS S EPARATE CONSOLIDATED ORDER IN THE CASE OF SH. JEETU KESHI FOR ALL THE A SSESSMENT YEARS I.E. 2004-05, 2005-06, 2007-08 & 2008-09. BOTH THE ASSESSEES HAVE RAISED FOLLOWING GROUNDS OF APPEALS IN DIFFERENT YEARS, AS UNDER: A. SH. MITHELESH KUMAR IN ITA NO.582 TO 585(ASR)/ 2011 1. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A), JALANDHAR HAS GROSSLY ERRED IN LAW IN CONCLUDING TH AT THE ASSESSMENT HAS BEEN FRAMED BY THE ITO, KAPURTHALA-1 , KAPURTHALA UPON ASSUMPTION OF VALID JURISDICTION U/ S 153C OF THE INCOME-TAX ACT, 1961 READ WITH SECTION 53A OF T HE ACT. 1.1. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A), JALANDHAR HAS GROSSLY ERRED IN LAW IN CONCLUDING TH AT THE LETTER DATED 29/12/2009 FOLLOWED BY THE LETTER DATED 12/01 /2010 ISSUED BY ACIT, CENTRAL CIRCLE-1, TO THE AO CONSTIT UTED RECORDING OF SATISFACTION, AS REQUIRED IN SECTION 1 53C OF THE ACT. 1.2. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A), JALANDHAR HAS GROSSLY ERRED IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT THAT THE JURISDICTION ASSUMED BY THE AO UNDER SECTION 153C OF THE ACT BY ISSUING NOTICE U/S 148/1 53C OF THE ACT IS INCORRECT, ILLEGAL AND VOID-AB-INITIO. ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 3 1.2.1 THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW IN HOL DING THAT THE DEFECTS IN THE AFORESAID NOTICE U/S 184/153C OF THE ACT ISSUED BY THE LD. AO DO NOT AFFECT ANY SUBSTANTIVE RIGHT O F THE APPELLANT AND THUS ARE CURABLE DEFECTS PROTECTED BY SECTION 292B OF THE ACT. 1.2.2 THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW IN HOL DING THAT THE NON RECEIPT OF CORRIGENDUM CORRECTING THE MISTAKES IN THE AFORESAID NOTICE U/S 148/153C OF THE ACT IS INCONSE QUENTIAL. 2. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, L D. CIT(A), JALANDHAR HAS GROSSLY ERRED IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT THAT THE ASSESSMENT FRAMED BY THE LD. AO IS ILLEGAL AND VOID-AB-INITIO SINCE NO NOTICE U/S 143( 2) OF THE ACT HAS BEEN SERVED 2.1 THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW IN HOLDING THAT THE NON ISSUE OF NOTICES U/S 143(2) AND 142(1) OF THE A CT IN ACCORDANCE WITH SECTION 282 OF THE ACT WOULD NOT RE SULT IN THE ASSESSMENT BEING ANNULLED. 2.2. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A), JALANDHAR HAS GROSSLY ERRED IN LAW IN HOLDING THAT NOTICE U/S 143(2) OF THE ACT IS NOT REQUIRED TO BE ISSUED FOR THE PURPOSE OF ASSESSMENT U/S 153C READ WITH SECTION 153A OF THE A CT. 2.3. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW IN NOT APPRECIATING THE FULL FACTS AND COMPLETE RULING OF HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADHA VS. ITO ( ITA NO.271/20 01 DATED 27.7.2011), WHICH HAS BEEN RELIED UPON BY THE LD. CIT(A) FOR REJECTING THE CONTENTION OF THE APPELLANT THAT ASSE SSMENT U/S 153C READ WITH SECTION 153A OF THE ACT CANNOT BE FR AMED WITHOUT ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. 3. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, L D. CIT(A), JALANDHAR HAS GROSSLY ERRED IN CONFIRMING THE ADDIT ION OF RS.54,80,408/- BY HOLDING THAT THE SOURCE OF THE PU RCHASE OF THE PROPERTIES IS FROM UNEXPLAINED SOURCES. ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 4 3.1. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN REJECTING THE CLAIM OF THE APPELLANT THAT HE HAD RECEIVED CASH OF RS.17,74 ,500/- FROM SH. JEETU KESHI DURING THE YEAR UNDER CONSIDERATION . 3.2. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN REJECTING THE CLAIM OF THE APPELLANT THAT HE HAD RECEIVED CASH OF RS.17,7 4,500/- FROM SH. JEETU KESHI DURING THE YEAR UNDER CONSIDERATION . 3.3. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN HOLDING TH AT THE COPIES OF ACCOUNTS SUBMITTED BY THE APPELLANT ARE UNRELIAB LE. 3.4. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN HOLDING TH AT THE SALE OF PROPERTY AT FATEHGARH AT RS.3,20,000/- HAS BEEN CON CLUDED IN THE YEAR UNDER CONSIDERATION. 3.4.1 THE LD. CIT(A) HAS GROSSLY ERRED IN ESTIMATI NG THE PROFIT ON SALE OF THE AFORESAID LAND ARBITRARILY AT 15% OF TH E SALE VALUE . THE ESTIMATE MADE IS ARBITRARY, WITHOUT ANY MATERIA L ON RECORD AND WITHOUT ANY BASIS WHATSOEVER. 3.5. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW I N NOT CONFRONTING THE APPELLANT AND NOT ALLOWING HIM PROPER OPPORTUNI TY TO EXPLAIN HIS CASE BEFORE ESTIMATING THE PROFITS ON S ALE OF PROPERTIES AND ALSO BEFORE CONCLUDING THAT THE INV ESTMENT IN PROPERTIES IS FROM UNEXPLAINED SOURCES. 4. THAT THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DIS POSED OFF. B. SH. JEETU KESHI IN ITA NOS. 586 TO 589(ASR)2011 1. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A), JALANDHAR HAS GROSSLY ERRED IN LAW IN CONCLUD ING THAT THE ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 5 ASSESSMENT HAS BEEN FRAMED BY THE ITO, KAPURTHALA-1 , KAPURTHALA UPON ASSUMPTION OF VALID JURISDICTION U/ S 153C OF THE INCOME-TAX ACT, 1961 READ WITH SECTION 53A OF T HE ACT. 1.2. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A), JALANDHAR HAS GROSSLY ERRED IN LAW IN CONCLUDING TH AT THE LETTER DATED 29/12/2009 FOLLOWED BY THE LETTER DATED 12/01 /2010 ISSUED BY ACIT, CENTRAL CIRCLE-1, TO THE AO CONSTIT UTED RECORDING OF SATISFACTION, AS REQUIRED IN SECTION 1 53C OF THE ACT. 1.2. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A), JALANDHAR HAS GROSSLY ERRED IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT THAT THE JURISDICTION ASSUMED BY THE AO UNDER SECTION 153C OF THE ACT BY ISSUING NOTICE U/S 148/1 53C OF THE ACT IS INCORRECT, ILLEGAL AND VOID-AB-INITIO. 1.2.3 THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW IN HOL DING THAT THE DEFECTS IN THE AFORESAID NOTICE U/S 184/153C OF THE ACT ISSUED BY THE LD. AO DO NOT AFFECT ANY SUBSTANTIVE RIGHT O F THE APPELLANT AND THUS ARE CURABLE DEFECTS PROTECTED BY SECTION 292B OF THE ACT. 1.2.4 THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW IN HOL DING THAT THE NON RECEIPT OF CORRIGENDUM CORRECTING THE MISTAKES IN THE AFORESAID NOTICE U/S 148/153C OF THE ACT IS INCONSE QUENTIAL. 2. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, L D. CIT(A), JALANDHAR HAS GROSSLY ERRED IN LAW IN REJECTING THE CONTENTION OF THE APPELLANT THAT THE ASSESSMENT FRAMED BY THE LD. AO IS ILLEGAL AND VOID-AB-INITIO SINCE NO NOTICE U/S 143( 2) OF THE ACT HAS BEEN SERVED 2.1 THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW IN HOLDING THAT THE NON ISSUE OF NOTICES U/S 143(2) AND 142(1) OF THE A CT IN ACCORDANCE WITH SECTION 282 OF THE ACT WOULD NOT RE SULT IN THE ASSESSMENT BEING ANNULLED. 2.4. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, LD. CIT(A), JALANDHAR HAS GROSSLY ERRED IN LAW IN HOLDING THAT NOTICE U/S 143(2) OF THE ACT IS NOT REQUIRED TO BE ISSUED FOR THE PURPOSE OF ASSESSMENT U/S 153C READ WITH SECTION 153A OF THE A CT. ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 6 2.5. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW IN NOT APPRECIATING THE FULL FACTS AND COMPLETE RULING OF HONBLE DELHI HIGH COURT IN THE CASE OF ASHOK CHADHA VS. ITO ( ITA NO.271/20 01 DATED 27.7.2011), WHICH HAS BEEN RELIED UPON BY THE LD. CIT(A) FOR REJECTING THE CONTENTION OF THE APPELLANT THAT ASSE SSMENT U/S 153C READ WITH SECTION 153A OF THE ACT CANNOT BE FR AMED WITHOUT ISSUANCE OF NOTICE U/S 143(2) OF THE ACT. 3. THAT ON THE FACTS & CIRCUMSTANCES OF THE CASE, L D. CIT(A), JALANDHAR HAS GROSSLY ERRED IN CONFIRMING THE ADDI TION OF RS.5,16,750/-. 3.1. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN ESTIMATING THE PROFITS ON SALE OF PROPERTIES PURCHASE IN FINANCIAL YEAR 20 00-01 AT 30% OF THEIR SALE VALUE. 3.2. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN ESTIMATING THE PROFITS ON SALE OF PROPERTIES PURCHASE IN FINANCIAL YEAR 1 995-96 AT 75% OF THEIR SALE VALUE. 3.3. THE ESTIMATES MADE BY THE LD. CIT(A) ARE ARBITRARY, WITHOUT ANY MATERIAL ON RECORD AND WITHOUT ANY BASIS WHATSO EVER. THE ESTIMATES HAVE BEEN MADE BY THE LD. CIT(A) ON THE B ASIS OF HIS OWN ASSUMPTIONS AND PRESUMPTIONS, SURMISES AND CONJ ECTURES. 3.4. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN NOT CONFRONTING THE APPELLANT AND NOT ALLOWING HIM PROPER OPPORTUNITY T O EXPLAIN HIS CASE BEFORE ESTIMATING THE PROFITS ON SALE OF P ROPERTIES. 4. THAT THE APPELLANT REQUESTS FOR LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DIS POSED OFF. 2. THE GROUNDS IN ALL OTHER APPEALS IN THE CASE OF BOTH THE ASSESSEE FOR ALL THE YEARS MENTIONED HEREINABOVE ARE HAVING IDENTICA L FACTS EXCEPT THE QUANTUM OF DISPUTE AND THEREFORE, WE ARE DECIDING A LL THE APPEALS AS MENTIONED HEREINABOVE BY THIS CONSOLIDATED ORDER. ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 7 3. FIRST OF ALL, WE TAKE UP APPEALS IN ALL THE YEAR S HAVING IDENTICAL FACTS IN THE CASE OF SH. MITHILESH KUMAR AND OUR ORDER IN TH ESE APPEALS SHALL BE APPLICABLE IN THE CASE OF SH. JEETU KESHI BEING ON IDENTICAL FACTS, AS MENTIONED HEREINABOVE. 4. THE BRIEF FACTS IN ALL THE APPEALS OF SH. MITHIL ESH KUMAR ARE THAT SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT AT T HE RESIDENTIAL AND BUSINESS PREMISES OF SH PARMINDER SIGH AND SURVEY OPERATIONS WERE CARRIED OUT AT THE BUSINESS PREMISES OF M/S. KAPURTHALA ESTATES PVT. L TD. & M/S. KAPURTHALA PROMOTERS & DEVELOPERS PVT. LTD. ON 04.03.2008. DUR ING THE ASSESSMENT PROCEEDINGS OF SH. PARMINDER SINGH, STATEMENT OF TH E AFORESAID ASSESSEES SH. MITHILESH KUMAR AND JEETU KESHI WERE RECORDED BY TH E AO OF SH. PARMINDER SINGH. AFTER COMPLETION OF ASSESSMENT PROCEEDINGS I N THE CASE OF SH. PARMINDER SINGH, THE AO OF SH. PARMINDER SINGH WROT E A LETTER TO AO OF SH. MITHILESH KUMAR & JEEU KESHI ASKING TO FRAME ASSESS MENT IN THE CASE OF SH. MITHILESH KUMAR & JEETU KESHI AFTER RECORDING SATIS FACTION AND ACCORDINGLY, THE AO OF SH. MITHILESH KUMAR & JEETU KESHI ISSUED NOTICE U/S 148/153C OF THE ACT. ASSESSEE FILED THE RETURNS UNDER PROTEST I N RESPONSE TO THE SAID NOTICES AND ASSESSMENTS WERE FRAMED FOR ALL THE YEA RS IN THE CASE OF SH. MITHILESH KUMAR & SH. JEETU KESHI. THE ASSESSEE FIL ED APPEALS BEFORE THE LD. CIT(A) FOR ALL THE YEARS WHEREIN ASSESSEE CHALL ENGED THE ASSESSMENT ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 8 ORDER FOR ALL THE ASSESSMENT YEARS ON LEGAL GROUNDS AS WELL AS ON MERITS. THE LD. CIT(A) REJECTED ALL THE LEGAL GROUNDS TAKEN BY THE ASSESSEE BUT ON MERITS ALLOWED CERTAIN RELIEF AND CONFIRMED THE REST OF TH E ADDITIONS. 5. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE, SH. SURINDER MAHAJAN, CA PRESSED THE LEGAL GROUNDS FIRST. THE LD. COUNSE L FOR THE ASSESSEE SUBMITTED WRITTEN SUBMISSIONS BEFORE THIS BENCH, WH ICH FOR THE SAKE OF CLARITY ARE REPRODUCED AS UNDER: 1. THAT THE APPELLANT IS ENGAGED IN THE BUSINESS OF PR OPERTY DEALING ON A SMALL SCALE AND EARNS COMMISSION BY AR RANGING MUTUAL TRANSACTIONS BETWEEN INTERESTED PARTIES. SEA RCH OPERATIONS WERE CARRIED OUT AT THE RESIDENCE AND BU SINESS PREMISES OF S. PARMINDER SINGH OF KAPURTHALA. THE A CIT, CC- 1, CALENDAR (LD. AO WHO HAD JURISDICTION OVER S. PA RMINDER SINGH SEARCH CASES) SENT CERTAIN DOCUMENTS TO ITO, KAPURTHALA (LD. AO HAD JURISDICTION OVER THE ASSESSEE) FOR TAK ING NECESSARY ACTION. THE ITO KAPURTHALA, AFTER RECORDING SATISFA CTION NOTE, PROCEEDED TO ISSUE NOTICE U/S 148/153C OF THE ACT T O THE ASSESSEE. ASSESSEE FILED RETURNS OF INCOME ON 20.12 .2010 AND ASSESSMENTS WERE FRAMED ON 30.12.2010. RETURNS WERE FILED UNDER PROTEST SUBJECT TO LEGALITY OF NOTICES ISSUED AND SUBJECT TO LEGALITY OF JURISDICTION ASSUMED. 2. THAT SEQUENCE OF EVENTS IS AS UNDER: S.NO. PARTICULARS REMARKS DATE 1. LETTER BY ACIT CENTRAL CIRCLE REFERENCE U/S 153C ALONGWITH COPIES OF DOCUMENTS SEIZED DURING SEARCH, ASKING THE AO TO RECORD SATISFACTION. 12.01.2010 ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 9 2. SATISFACTION NOTE BY THE ITO KAPURTHALA- 1. SATISFACTION NOTE FOR AY 2003-05 TO 2008-094 16.11.2010 3. NOTICE U/S 148/153C OF THE ACT SERVED ON 23.11.2010 WITH REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT U/S 147/153 OF THE ACT 22.11.2010 4.. NOTICE U/S 142(1) OF THE ACT THE NOTICE COULD NOT BE SERVED ON THE ASSESSEE AS PER REPORT OF NOTICE SERVER 06.12.2010 5. AFFIXTURE ORDER TO SERVE NOTICE U/S 142(1) DATED 06.12.2010 REPORT OF INSPECTOR SH. S.P. MALHOTRA DATED 09.12.2010 ON AFFIXTURE ORDER THAT NOTICE HAS BEEN AFFIXED ON 09.12.2010. IN THE WITNESS COLUMN SOME PERSON HAS SIGNED WHOSE NAME & ADDRESS NOT GIVEN. 08.12.2010 6. NOTICE U/S 142910 OF THE ACT. NOTICE SERVER ON 13.12.2010 HAS GIVEN HIS REPORT ON NOTICE THAT ASSESSEE IS NOT AVAILABLE INSPITE OF HIS REPEATED VISITS. 13.12.2010 7. AFFIXTURE ODER TO INSPECTOR HAS REPORTED ON THE 13.12.2010 ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 10 SERVE NOTICE U/S 142(10 DATED 13.12.2010 AFFIXTURE ORDER ON 14.12.2010 THAT NOTICE HAS BEEN AFFIXED IN THE PRESENCE OF SHASHI BHALLA INSPECTOR & ONE SH. PARMINDER SINGH BUT ADDRESS OF PARMINDER SINGH NOT GIVEN. 8. NOTICE U/S 142(1) OF THE ACT. THIS NOTICE HAS BEEN ISSUED ALONGWITH DETAILED QUESTIONNAIRE. AS PER REPORT DATED 16.12.2010 OF NOTICE SERVER VINOD KUMAR, NOTICE COULD NOT BE SERVED INSPITE OF HIS REPEATED VISITS. 16.12.2010 9. AFFIXTURE ORDER TO SERVE NOTICE U/S 142(10 OF THE ACT DATED 16.12.2010 INSPECTOR SH. S.P. MALHOTRA ON THE AFFIXTURE ORDER HAS GIVEN HIS REPORT DATED 16.12.2010 THAT NOTICE HAS BEEN AFFIXED IN THE PRESENCE OF SHASHI BHALLA INSPECTOR. 16.12.2010 10. RETURN OF INCOME FILE UNDER PROTEST RETURN WAS FILED IN RESPONSE TO NOTICE U/S 148/153C UNDER PROTEST SINCE NOTICE U/S 148/153C IS WITHOUT 29.12.2010 ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 11 ASSUMPTION OF VALID JURISDICTION. 11. RETURN OF INCOME PROCESSED 20.12.2010 12. NOTICE U/S 143(2) OF THE ACT REPORT DATED 20.12.2010 OF THE NOTICE SERVER SH. VINOD THAT INSPITE OF REPEATED VISITS, ASSESSEE IS NOT AVAILABLE. 20.12.2010 13. AFFIXTURE ORDER TO SERVE NOTICE U/S 143(20 DATED 20.12.2010 REPORT DATED 21.12.2010 OF SH. S.P. MALHOTRA INSPECTOR ON AFFIXTURE ORDER THAT NOTICE HAS BEEN AFFIXED IN THE PRESENCE OF SHASHI BHALLA INSPECTOR 21.12.2010 14. LETTER TO CIT-II PROPOSAL TO PROVISIONALLY ATTACH THE PROPERTY 13.12.2010 15. LETTER TO CIT-II PROPOSAL TO PROVISIONALLY ATTACH THE PROPERTY. 16.12.2010 16. ORDER U/S 281B OF THE ACT. AS PER ORDER U/S 281B PROPERTY ATTACHED 23.12.2010 17. ASSESSMENT ORDERS SENT FOR APPROVAL ASSTT. ORDERS SENT FOR APPROVAL TO ADDL. CIT, RANGE IV JALANDHAR ON 27.12.2010 27.12.2010 18. APPROVAL GRANTED APPROVAL GRANTED BY ADDL. CIT 28.12.2010 ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 12 RANGE IV JALANDHAR ON 28.12.2010. APPROVAL LETTER RECEIVED AT KAPURTHALA OFFICE ON 29.12.2010 19. ASSESSMENT ORDERS PASSED 29.12.2010 20. AFFIXTURE ORDER TO SERVE ASSESSMENT ORDERS ASSESSMETN ORDERS SERVICED THROUGH AFFIXTURE ON 30.12.2010 30.12.2010 3. THAT THE CASE OF THE ASSESSEE FALLS UNDER THE TE RM PERSON OTHER THE PERSON SEARCHED. LD. AO IN THIS CASE WAS REQUI RED TO ISSUE NOTICE U/S 153C OF THE ACT AND ASSESSMENT WAS TO BE COMPLE TED U/S 153A OF THE ACT. AS PER SECTION 153C OF THE ACT, THE FOLLOW ING ARE JURISDICTIONAL CONDITIONS FOR MAKING ASSESSMENT U/S 153C READ WITH SECTION 153A OF THE ACT. (DETAILED SUBMISSIONS AT P ARA 5 TO 7, PAGE 4 AND 5 OF OUR WRITTEN SUBMISSIONS BEFORE CIT(A) DATE D MAY 20,2011: A) WHERE THE AO IS SATISFIED. B) THAT MONEY/DOCUMENT ETC. SEIZED DURING SEARCH ARE BELONGING TO OTHER PERSON C) SUCH MONEY/DOCUMENT ETC SHALL BE HANDED OVER TO THE AO OF OTHER PERSON D) THEN AO OF OTHER PERSON SHALL PROCEED AGAINST OTHER PERSON AND ISSUE HIM A NOTICE AND THEN ASSESS/REASSESS HIM AS PER SECTION 153A OF THE ACT. 4. HOWEVER, NO SUCH SATISFACTION WAS RECORDED BY TH E AO OF PERSON SEARCHED. IT IS EVIDENT FROM THE LETTER DATE D 29.12.2009 AND 12.01.2010 ISSUED BY ACIT, CC-1, JALANDHAR, WHEREIN THE ACIT, CC- I, HAS ASKED THE ITO KAPURTHALA TO RECORD THE SATIS FACTION NOTE [ COPY OF LETTERS DATED 29.12.2009 AND 12.01.2009 HAVE BEE N REPRODUCED AT PAGE 57 OF THE CIT(A)S ORDER] [ DETAILED SUBMISSIO NS AT PARA 10 AND ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 13 11 , PAGE 8 AND 9 OF OUR WRITTEN SUBMISSIONS BEFORE CIT(A) DATED MAY 20,2011. 5. THAT IT IS AN ESTABLISHED LAW THAT RECORDING OF SATISFACTION BY LD. AO OF THE PERSON SEARCHED IS A PRE REQUISITE FO R ISSUE OF NOTICE UNDER SECTION 153C OF THE ACT BY LD. AO OF THE PERS ON OTHER THAN THE PERSON SEARCHED. FURTHERMORE, THE PROVISIONS OF SEC TION 153C AND 158 BD ARE PARI MATERIAL AS FAR AS RECORDING OF OBJ ECTIVE SATISFACTION IN WRITING IS CONCERNED. RELIANCE IS BEING PLACED O N: I) MANISH MAHESHWARI VS. ACIT & ANR. (2007) 289 ITR 3 41 (SC) II) ITO VS. ARUN KUMAR KAPOOR 140 TTJ (ASR) 249 III) JINDAL STAINLESS LTD. VS. ACIT (2009) 120 ITD 301 ( ITAT DEL.) IV) ACIT VS. SMT. SURINDER KAUR, 120 TTJ (LUCKNOW) 618 6. PROVISIONS OF SECTION 158B, 158BA, 158BB ARE SI MILAR TO PROVISIONS OF SECTION 153A, 153B, 153C UNDER THE NE W PROVISIONS OF ASSESSMENT OF SEARCH CASES AND AS SUCH ARE SUBSTANT IVE PROVISIONS. FAILURE TO COMPLY WITH SUBSTANTIVE PROVISIONS REN DERS THE PROCEEDINGS WITHOUT JURISDICTION AND ASSESSMENT FRA MED ARE ILLEGAL VOID AB INITIO ( DETAILED SUBMISSIONS AT PARA 9, PA GE 6 TO 8 OF OUR WRITTEN SUBMISSIONS BEFORE CIT(A) DATED MAY 20, 201 1) RELIANCE PLACED ON : I) SHIRISH MADHUKAR DALVI VS. ACIT & ORS (2006) 20 3 CTR (BOM) 621 : (2006) 287 ITR 242 (BOM.) II) MANISH MAHESHWARI VS. ACIT 289 ITR 341 (SC) III) SMT. MAHESH KUMARI BATRA VS. JCIT ITAT, AMRITS AR (SB) (2005) 95 TTJ(ASR) 461(2005) 95 ITD 152 (ASR) (TM). 7. THAT THE LETTERS DATED 29.12.2009 AND 12.01.2010 ISSUED BY ACIT, CC-I DO NOT DEPICT THAT THE AO OF THE PERSON SEARCH ED AND RECORDED HIS SATISFACTION ANYWHERE. ON THE CONTRARY, THE LET TERS CONFIRM THAT THE AO OF THE PERSON SEARCHED HAS SIMPLY ASKED THE AO OF THE OTHER PERSON TO RECORD SATISFACTION BEFORE ISSUING NOTICE U/S 153C OF THE ACT. 8. THAT THE ITO KAPURTHALA, HIMSELF RECORDED A SAT ISFACTION NOTE ( COPY OF SATISFACTION NOTE DATED 11.11.2010 WAS ENCL OSED AT PAGE 33- 35 OF OUR PAPER BOOK) AND ISSUED NOTICES U/S 148/15 3C OF THE ACT ON ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 14 22.11.2010 AS AGAINST NOTICE REQUIRED TO BE ISSUED U/S 153C OF THE ACT ( COPY OF NOTICES DATED 22.11.2010 WERE ENCLOSE D AT PAGE 36-41 OF OUR PAPER BOOK} IN THE AFORESAID NOTICE,, IT HAS BEEN MENTIONED T HAT THE AO HAS REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HA S ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147/153 OF THE ACT AND AO HAS PROPOSED TO ASSESS THE ESCAPED INCOME. THEREFOR E, IT IS CLEARLY IMPLIES THAT THE ITO KAPURTHALA HAD INVOKED PROVISI ONS OF SECTION 148 TO ASSESS PERSON OTHER THAN PERSON SEARCHED. TH E LD. CIT(A) HAS ALSO GIVEN A FINDING THAT THE ITO KAPURTHALA HA S RECORDED A SATISFACTION AS WHY NOTICE U/S 148/153C OF THE ACT IS BEING ISSUED, WHICH IS REQUIRED ONLY WHILE INITIATING PROCEEDINGS U/S 147 OF THE ACT (PARA 7.3 PAGE 60 OF CIT(A)S ORDER) HOWEVER, SECTION 153C OVER RIDES PROVISIONS OF SE C. 139, SEC.147, SEC. 148, SEC149, SEC. 151 AND SEC. 153. PROVISIONS OF SECTION 148 CANNOT BE INVOKED IN THE CASE OF PERSON OTHER THAN PERSON SEARCHED. RELIANCE IS BEING PLACED ON A) INCOME TAX OFFICER VS. ARUN KUMAR KAPOOR 140 TTJ (A SR) 249. AS SUCH NOTICES ISSUED U/S 148/153C ARE ILLEGAL & B AD IN LAW AND JURISDICTION ASSUMED AND ASSESSMENT FRAMED IS WITH OUT ASSUMPTION OF VALID JURISDICTION, WHICH MAKES THE ASSESSMENT FRAM ED ILLEGAL & VOID AB INITIO. ASSESSMENTS FRAMED WITHOUT ASSUMPTION OF VALID JURISDICTION ARE VOID AB INITIO (DETAILED SUBMISSIONS AT PARA 17 AND 18, PAGE 13 TO 16 OF WRITTEN SUBMISSIONS BEFORE CIT(A) DATED MAY 2 0, 2011) RELIANCE PLACED ON: A) CIT VS. PEARL MECH. ENGG. & FOUNDRY WORKS (P) LTD. (2004) 188 CTR (SC) 289. B) ARUN KUMAR VS UNION OF INDIA (2006) 286 ITR 89(SC) C) KIRAN SINGH VS. CHAMAN PASWAN AIR 1954 SC 340 D) CHIRANJILAL SHRILAL GOENKA VS. JASJIT SINGH ( 1993) 2 SCC 507 E) LT. COL. PARAMJIT SINGH VS. CIT & ANR (1996) 220 IT R 446 (P&H) F) CIT VS. MUNISH IRON STORE (2003) 263 ITR 484 (P&H) ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 15 9. THAT THE LD. CIT(A) HA HELD THAT THE DEFECTS C OMMITTED BY THE ITO KAPURTHALA IN THE AFORESAID NOTICES BY MENTIONI NG THE HEADING OF NOTICES AS 148/153C OF THE ACT ARE CURABLE DE FECTS AND THE APPELLANT SHOULD NOT BE ALLOWED TO BENEFIT FROM THE MISTAKE COMMITTED BY THE AO ( PARA 7.8 PAGE 65 OF CIT(A)S ORDER). HOWEVER, IT MAY PLEASE BE NOTED THAT JURISDICTIONAL DEFECTS I NOTICES ARE NOT CURABLE DEFECTS U/S 292B/292BB OF THE ACT. FURTHERMORE, THE PROVISIONS OF SECTION 153C OF THE ACT ARE SUBST ANTIVE PROVISIONS. THE AO CANNOT BE GIVEN AN OPTION TO ISSUE NOTICES W ITH CHOICE OF SECTIONS AND THEY CANNOT ASSUME THE JURISDICTION UN DER A SECTION OF THEIR CHOICE ( DETAILED SUBMISSIONS AT PARA 14, PAG E 10 AND 11 OF WRITTEN SUBMISSIONS BEFORE CIT(A) DATED MAY 20,2011 ) RELIANCE PLACED ON A. CIT VS. NORTON MOTORS (2005) 275 ITR 595 (P&H) B. CIT V. SHITAL PRASAD KHARAG PRASAD (2006) 280 I TR 541 (ALL) C. GAJENDRA KUMAR BANTHIA VS. UOI (19960 222 ITR 6 32 (CAL.) D. SUNROLLING MILLS (P) LTD. VS. ITO & ORS (1986) 160 ITR 412 (CAL.) E. P.N. SASIKUMAR & ORS VS. CIT (1988) 170 ITR 80 (KER) F.CIT VS. CEBON INDIA LTD. 226 CTR 188 (P&H) 10. THAT THE LD. CIT(A) HAS FURTHER HELD THAT THE NON RECEIPT OF CORRIGENDUM CORRECTING THE AFORESAID NOTICES SENT B Y THE AO IS NOT MATERIAL ( PARA 7.8 PAGE 65 OF CIT(A)S ORDER). HOW EVER, IT IS MOST HUMBLY SUBMITTED THAT THE PROVISIONS OF SECTION 153 C OF THE ACT ARE SUBSTANTIVE PROVISIONS. ANY DEFECT IN THE SAME WOUL D RENDER THE ASSESSMENT AS INVALID AND VOID AB INITO ( DETAILED SUBMISSIONS AT PARA 9, PAGE 6 TO 8 OF OUR WRITTEN SUBMISSIONS BEFO RE CIT(A) DATED MAY 20, 2011) GROUND OF APPEAL NO.2, 2.1, 2.2 & 2.3 A) CASE OF CIT(A) LD. CIT(A) REJECTED THE GROUNDS OF THE ASSESSEE WITH HIS OBSERVATIONS IN PARA 8, PAGE 66 TO 74 OF THE CIT(A) S ORDER. B) OUR SUBMISSIONS: ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 16 1. THAT THE LD. CIT(A) IN HIS ORDER HAS GIVEN A F INDING OF FACT THAT THE NOTICES U/S 143920 OF THE ACT AND 142(10 OF THE ACT HAVE NOT BEEN SERVED ON THE ASSESSEE IN ACCORDANCE WITH SECT ION 282 OF THE ACT (PARA 8.8 (LAST LINE) PAGE 73 OF THE CIT(AS OR DER) 2. THAT THE LD. CIT(A) HAS HELD THAT BASED ON THE DECISION OF ASHOK CHADHA VS. ITO, ITA NO.271/2001 DATED 27.01.2 011 [PARA 8.3, PAGE 68 OF CIT(A)S ORDER, ENCLOSED AS ANNEXUR E A TO CIT(A0S ORDER], NO NOTICE U/S 143(20 OF THE ACT IS REQUIRED TO BE ISSUED TO THE ASSESSEE. HOWEVER, THE LD. CIT(A) HAS NOT APPRECIATED THE FULL FACTS OF THE CASE OF ASHOK CHADHA VS. ITO (SUPRA0. THE CASE OF ASHOK CHADHA VS. ITO IS COMPLETELY DISTINGUISHABLE ON FAC TS FROM THE APPELLANTS CASE. ASHOK CHADHAS CASE YOUR HONOURS ATTENTION IS INVITED TO PARA 2 OF THE HONBLE HIGH COURTS ORDER WHEREIN IT HAS BEEN MENTIONED THAT T WO QUESTIONNAIRES DATED 07.12.2007 AND 27.12.2007 WERE ISSUED TO THE ASSESSEE WHICH WERE DULY COMPLIED BY HIM. FURTHERMORE, YOUR HONOURS ATTENTION IS INVITED TO PARA 14 OF THE HONBLE HIGH COURTS ORDER, WHEREIN IT HAS BEEN MEN TIONED THAT NO SPECIFIC NOTICE WAS REQUIRED U/S 143(20 OF THE A CT WHEN THE NOTICE IN THE PRESENT CASE AS REQUIRED U/S 153A(1)( A) OF THE ACT WAS ALREADY GIVEN. IN ADDITION, THE TWO QUESTIONNAIRES ISSUED TO THE ASSESSEE WERE SUFFICIENT SO AS TO GIVE NOTICE TO TH E ASSESSEE, ASKING HIM TO ATTEND THE OFFICE OF THE AO IN PERSON OR THR OUGH A REPRESENTATIVE DULY AUTHORIZED IN WRITING OR PRODUC E OR CAUSE TO BE PRODUCED AT THE GIVEN TIME ANY DOCUMENTS, ACCOUNTS, AND ANY OTHER EVIDENCE ON WHICH HE MAY RELY IN SUPPORT OF THE RET URN FILED BY HIM. THEREFORE, THE HONBLE HIGH COURT HAS HELD THE VIE W THAT THE TWO QUESTIONNAIRES ISSUED BY THE AO WERE SUFFICIENT TO GIVE NOTICE TO THE ASSESSEE SO AS TO ENABLE HIM TO ATTEND THE OFFICE O F AO. ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 17 APPELLANTS CASE IN THE APPELLANTS CASE, NO SUCH QUESTIONNAIRES WE RE EVER SERVED UPON THE APPELLANT. THEREFORE, THE APPELLANT HAD NO OPPO RTUNITY TO GIVE ANY EXPLANATION/FILE ANY DOCUMENTS WITH THE LD. AO. FURTHERMORE, YOUR HONOURS KIND ATTENTION IS INVITED TO THE SEQU ENCE OF EVENTS GIVEN ABOVE WHEREIN THE DETAILS AND TIMINGS OF NOTI CES ALLEGED TO HAVE BEEN ISSUED BUT NOT SERVED ON THE APPELLANT HA VE BEEN HIGHLIGHTED. AS IS CLEAR FROM THE AFORESAID TABLE, THE FIRST NO TICE U/S 148/153C OF THE ACT WAS SERVICED ON THE ASSESSEE ON 23.11.2010, APP ROXIMATELY 10 MONTHS AFTER THE DOCUMENTS WERE RECEIVED FROM ACIT, CC-1, JALANDHAR. NO NOTICES, BE IT BE 142(1) OR 142(20, WERE SERVED BY THE ITO KAPURTHALA SO AS TO ENABLE HIM TO ATTEND THE LD. AO S OFFICE OR TO PUT FORWARD HIS CONTENTIONS. FURTHERMORE, EVERYTHIN G WAS DONE IN SUCH A HASTE JUST SO AS TO MEET THE DEADLINE FOR CO MPLETION OF ASSESSMENT. 3. THAT ISSUE OF NOTICE U/S 143920 IS A CONDITION PRECEDENT TO THE VALIDITY OF ASSESSMENT IF NO NOTICE IS ISSUED OR IF NOTICE ISSUED IS SHOWN TO BE INVALID THEN PROCEEDINGS TAKEN BY THE A O WITHOUT A NOTICE OR IN PURSUANCE OF INVALID NOTICE WILL RENDE R THE PROCEEDING ILLEGAL AND BAD IN LAW. RELIANCE PLACED ON A) CIT VS. CEBON INDIA LTD. 226 CTR 188 (P&H) B) ACIT VS. HOTEL BLUE MOON 321 ITR 362 (SC) C) NARENDRA SINGH VS. ITO 138 TTJ 615 (AGRA) D) P. SUKUMAR HUF VS. ACIT 8 ITR 737 (CHENNAI) 4. THAT ASSESSMENT MADE WITHOUT GIVING NOTICE TO THE ASSESSEE, LACK PRINCIPLE OF NATURAL JUSTICE WHICH MAKES THE A SSESSMENT FRAMED VOID AB INITIO. RELIANCE PLACED ON: ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 18 A) HONBLE ITAT ALLAHABAD BENCH IN THE CASE OF MON GA METALS (P) LTD. VS. ACIT ITAT (2000) 67 TTJ (ALL) 247 AFTER D ISCUSSING VARIOUS CASE LAWS HAS HELD THAT ASSESSMENTS MADE IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE ARE TO ANNULLED. 5. THE QUASI-JUDICIAL DECISION RENDERED AND ORDER MADE IN VIOLATION OF AUDI ALTERAM PARTEM RULE IS NULL AND VOID AND THE O RDER IMPUGNED IN SUCH CASE CAN BE STRUCK DOWN AS INVALID ON THAT SCORE ONLY AND THIS VIEW IS FORTIFIED BY THE DECISIONS IN THE FOLL OWING CASES: RELIANCE PLACED ON: I) SWADESH COTTON MILLS COMPANY LTD. VS. UNION OF INDI A 51 ITC 210, 255 (SC) II) MENKA GANDHI VS. UNION OF INDIA AIR 1978 SC 597 III) SMT. KANTI KHARE VS. KALI PRASAD ASTHAN AIR 1983 AL L 45 IV) STATE OF KERALA VS. K.C. SHADULI GROCERY DEALERS, ETC. AIR 1977 SC 1627 V) COLONISERS VS. ASSTT. CIT (SUPRA) VI) MALWA VANASPATI & CHEMICALS LTD. VS. CIT (SUPRA) VII) DHAKESHWARI COTTON MILLS LTD. VS. CIT (1995) 27 C TR (SC) 126: AIR 1955 SC 65 VIII) SURESH KOSHY GEORGE VS. UNIVERSITY OF KERALA AIR 19 96 SC 198. 6. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF BOTH THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE WITH RESPECT TO THE LEGAL GROUNDS, WE ARE DECIDING THE LEGAL GROUNDS ONLY. FI RST LEGAL ISSUE RAISED BY THE ASSESSEE IS THAT NO SATISFACTION HAS BEEN RECOR DED BY THE AO OF THE ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 19 PERSON SEARCHED, WHICH IS PRE-REQUISITE FOR ISSUE O F NOTICE U/S 153C OF THE ACT BY THE AO OF PERSON OTHER THAN THE PERSON SEARC HED. THE LD. COUNSEL FOR THE ASSESSEE, SH. SURINDER MAHAJAN, CA HAS DRAWN OU R ATTENTION AT PB 31 & 32, WHICH IS A LETTER ADDRESSED BY THE AO OF PERSON SEARCHED I.E. LETTER ADDRESSED BY THE AO OF SH.PARMINDER SINGH TO THE AO OF SH. MITHILESH KUMAR AND JEETU KESHI ASKING HIM TO PREPARE A SATIS FACTION NOTE, WHICH IS REQUIRED PRIOR TO ISSUE OF NOTICE U/S 153C OF THE A CT. 7.1. THE LD. COUNSEL FOR THE ASSESSEE HIGHLIGHTED T HAT NO SATISFACTION WAS RECORDED BY THE AO OF PERSON SEARCHED. RATHER HE A SKED THE AO OF PERSON OTHER THAN THE PERSON SEARCHED TO RECORD A SATISFAC TION. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER DRAWN OUR ATTENTION TO PB- 33 TO 36, WHICH IS A SATISFACTION NOTE PREPARED BY THE AO OF SH. MITHILE SH KUMAR & JEETU KESHI. OUR FURTHER ATTENTION WAS DRAWN TO THE PROVISION OF SECTION 153C OF THE ACT, WHICH FOR THE SAKE OF CLARITY IS REPRODUCED AS UNDER: ASSESSMENT OF INCOME OF ANY OTHER PERSON. 153C. [(1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 , SECTION 147 , SECTION 148 , SECTION 149 , SECTION 151 AND SECTION 153 , WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY M ONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOO KS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A , THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHAL L BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH S UCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSE SS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A :] ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 20 [ PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE T O THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO [ SUB-SECTION (1) OF ] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF REC EIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISI TIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON.] [PROVIDED FURTHER THAT THE CENTRAL GOVERNMENT MAY BY RULES MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZETTE, SPECIFY T HE CLASS OR CLASSES OF CASES IN RESPECT OF SUCH OTHER PERSON, IN WHICH THE ASSESSING OFFICER SHALL NOT BE REQUIRED TO ISSUE NOTICE FOR ASSESSI NG OR REASSESSING THE TOTAL INCOME FOR SIX ASSESSMENT YEARS IMMEDIATELY P RECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH IS CONDUCTED OR REQUISITION IS MADE EXCEPT IN CASES W HERE ANY ASSESSMENT OR REASSESSMENT HAS ABATED.] (2) WHERE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS S EIZED OR REQUISITIONED AS REFERRED TO IN SUB-SECTION (1) HAS OR HAVE BEEN RECEIVED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER S UCH OTHER PERSON AFTER THE DUE DATE FOR FURNISHING THE RETURN OF INC OME FOR THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A AND IN RESPECT OF SUCH ASSESSMENT YEAR ( A ) NO RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OT HER PERSON AND NO NOTICE UNDER SUB-SECTION (1) OF SECTION 142 HAS BEEN ISSUED TO HIM, OR ( B ) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTH ER PERSON BUT NO NOTICE UNDER SUB-SECTION (2) OF SECTION 143 HAS BEEN SERVED AND LIMITATION OF SERVING THE NOTICE UNDER SUB-SECT ION (2) OF SECTION 143 HAS EXPIRED, OR ( C ) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN MADE , BEFORE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFF ICER HAVING JURISDICTION OVER SUCH OTHER PERSON, SUCH ASSESSING OFFICER SHALL ISSUE THE NOTICE AND ASSESS OR REASSESS TOTAL INCOME OF S UCH OTHER PERSON OF SUCH ASSESSMENT YEAR IN THE MANNER PROVIDED IN SECTION 153A. ] ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 21 7.2. THE LD. COUNSEL FOR THE ASSESSEE SH. SURINDER MAHAJAN, CA SUBMITTED THAT RECORDING OF SATISFACTION BY THE AO OF PERSON SEARCHED IS PRE-REQUISITE FOR ISSUE OF NOTICE U/S 153C OF THE ACT AND PLACED RELIANCE ON THE DECISIONS OF VARIOUS COURTS OF LAW, AS UNDER: I) MANISH MAHESHWARI VS. ACIT & ANR. (2007) 289 ITR 341 (SC) II) ITO VS. ARUN KUMAR KAPOR 140 TTJ (ASR) 249 V) JINDAL STAINLESS LTD. VS. ACIT (2009) 120 ITD 301 ( ITAT DEL.) VI) ACIT VS. SMT. SURINDER KAUR, 120 TTJ (LUCKNOW) 618 7.3. ON THE BASIS OF FACTS ON RECORD AND SUBMISSION S MADE BY THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR APPEARING O N BEHALF OF THE REVENUE, WE ARE OF THE VIEW THAT TO INVOKE THE PROVISIONS OF SECTION 153C OF THE ACT, RECORDING OF SATISFACTION BY THE AO OF PERSON SEARC HED IS PRE-REQUISITE WHICH HAS NOT BEEN RECORDED IN THE PRESENT CASE. OUR VIEW S FIND SUPPORT FROM THE CASE LAWS RELIED UPON BY THE LD. COUNSEL FOR THE AS SESSEE AS MENTIONED HEREINABOVE. 8. SECONDLY, LEGAL ISSUE RAISED BY THE ASSESSEE I S THAT THE AO HAS INVOKED THE PROVISIONS OF SECTION 148 OF THE ACT AN D ASSESSMENT HAS BEEN FRAMED U/S 153C READ WITH SECTION 143(3) OF THE ACT . THE LD. COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO PB 33 TO 36 , WHICH IS A SATISFACTION NOTE PREPARED BY THE AO OF SH. MITHILESH KUMAR & JE ETU KESHI. IN SECOND ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 22 LAST PARA AT PB-36, THE AO HAS STATED I AM, THERE FORE, SATISFIED THAT THE AFORESAID DOCUMENTS BELONG TO SH. MITHILESH KUMAR W HO IS A PERSON OTHER THAN ONE, REFERRED TO SECTION 153A OF THE ACT.. TH E LD. COUNSEL FOR THE ASSESSEE HAS FURTHER DRAWN OUR ATTENTION TO PB 37 T O 42, WHICH ARE THE NOTICES U/S 148/153C AND THE AO IN THESE NOTICES HA S STATED AS UNDER: WHEREAS I HAVE REASONS TO BELIEVE THAT YOUR INCOME CHARGEABLE TO TAX FOR THE ASSESSMENT YEAR 2003-04 HAS ESCAPED ASSESSM ENT WITHIN THE MEANING OF SECTION 147/153C OF THE INCOME TAX ACT, 1961. I, THEREFORE, PROPOSE TO ASSESS THE INCOME FOR THE SAID ASSESSMENT YEAR AND I HEREBY REQUIRE YOU TO DELIVER ME WITHIN 10 DA YS FROM THE DATE OF SERVICE OF THIS NOTICE, A RETURN IN THE PRESCRIBED FORM OF YOUR INCOME IN RESPECT OF WHICH YOU ARE ASSESSABLE FOR THE SAID AS SESSMENT YEAR. 8.1. NOTICES ISSUED BY THE AO OF SH. MITHILESH KUMA R & JEETU KESHI CLEARLY IMPLIES THAT THE AO, KAPURTHALA OF MITHILES H KUMAR & JEETU KESHI HAS INVOKED THE PROVISIONS OF SECTION 148 OF THE AC T TO ASSESS THE PERSON OTHER THAN THE PERSON SEARCHED. THE LD. CIT(A) HAS ALSO GIVEN A FINDING IN PARA 7.3 AT PAGE 60 OF HIS ORDER THAT THE AO HAS RE CORDED A SATISFACTION AS TO WHY NOTICE UNDER SECTION 148/153C OF THE ACT, IS BE ING ISSUED, WHICH IS REQUIRED ONLY WHILE INITIATING PROCEEDINGS U/S 147 OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE PROVISIONS OF SECTION 153C OF THE ACT WHICH OVER-RIDES THE PROVISIONS OF SECTION 139, SECTION 147, ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 23 SECTION 148, SECTION 149, SECTION 151 & SECTION 15 3 OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE CONCLUDED HIS SUBMISSIONS ON THE LEGAL GROUNDS BY SUBMITTING THAT THE PROVISIONS OF SECTION 148/153C AS INVOKED BY THE AO WHILE RECORDING SATISFACTION AND ISSUING NOTICE U/S 148/153C OF THE ACT CANNOT BE INVOKED IN THE CASE OF PERSON OTHER THAN PERSON SEARCHED AND ACCORDINGLY HE RELIED UPON THE DECISIONS OF VARIOUS COURT OF LAW MENTIONED HEREINABOVE, ESPECIALLY, THE DECISION IN THE CASE O F INCOME TAX OFFICER VS. ARUN KUMAR KAPOOR, 140 TTJ (ASR) 249. 8.2. ON THE BASIS OF FACTS ON RECORD AND ARGUMENTS MADE BY BOTH THE PARTIES, WE ARE OF THE VIEW THAT THE PROVISIONS OF SECTION 148 CANNOT BE INVOKED IN THE CASE OF THE PERSON OTHER THAN PERSON SEARCHED, SINCE SECTION 153C OVER RIDES THE PROVISIONS OF SECTION 148 OF TH E ACT. OUR FINDINGS SUPPORT THE DECISIONS RELIED UPON BY THE LD. COUNSE L FOR THE ASSESSEE, AS MENTIONED HEREINABOVE. THE NOTICE ISSUED BY THE AO IS A NOTICE U/S 148 OF THE ACT. IN THE PRESENT CASE, WHICH CANNOT BE ISSUE D IN THE CASE OF THE PERSON OTHER THAN THE PERSON SEARCHED. 8.3. THIRD LEGAL ISSUE RAISED BY THE LD. COUNSEL FO R THE ASSESSEE IS THAT ASSESSMENT HAS BEEN FRAMED WITHOUT ISSUANCE OF NOTI CE U/S 143(2) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THE SEQU ENCE OF EVENTS WHICH HAVE BEEN MENTIONED AT PB 2 TO 4 AND PB 43 TO 59, W HICH ARE COPIES OF ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 24 NOTICES ISSUED TO THE ASSESSEE, WHICH HAVE NEVER BE EN SERVED ON THE ASSESSEE. HE SUMITTED THAT INFORMATION WAS RECEIVED FROM THE AO OF PERSON SEARCHED VIDE LETTER DATED 12.01.2010, SATISFACTION NOTE WAS PREPARED ON 16.12.2010 AND NOTICES U/S 148/153C OF THE ACT, WAS ISSUED ON 22.11.2010 WHICH WERE SERVED ON 23.11.2010 WHEREAS ASSESSMENT WAS GETTING TIME BARRED ON 31.12.2010. ASSESSMENT WAS COMPLETED ON 29.12.2010. FROM THE SEQUENCE OF EVENTS, IT IS CLEAR THAT THE AO HAD ONLY 37 DAYS AFTER ISSUE OF NOTICE U/S 148/153C OF THE ACT, TO COMPLETE ASSESSMENT U/S 143 (3) OF THE ACT AND TO RECEIVE RETURNS, ISSUE QUESTIONNAIRES, RECEIVE REPL IES AND TO FRAME ASSESSMENT WHEREAS APPROXIMATELY ONE YEAR WAS AVAILABLE WITH T HE AO ON RECEIPT OF INFORMATION FROM THE AO TO COMPLETE ASSESSMENT. THE LD. COUNSEL FOR THE ASSESSEE, HAS DRAWN OUR ATTENTION TO PARA 8.8 LAST LINE AT PAGE 73 OF THE ORDER OF THE LD. CIT(A), WHEREIN THE LD. CIT(A) HAS GIVEN THE FINDING OF FACT THAT NOTICES ISSUED U/S 143(2) AND 142(1) WERE NOT SERV ED ON THE ASSESSEE IN THE MANNER PROVIDED IN SECTION 282 OF THE ACT. HE FURTH ER HELD BASED ON THE DECISION OF ASHOK CHADHA VS. ITO, ITA NO.271/2001 DATED 27.07.2011 [PARA 8.3 OF CIT(A)S ORDER, ENCLOSED AS ANNEXURE A TO CIT(A)S ORDER], NO NOTICE U/S 143(2) OF THE ACT, IS REQUIRED TO BE ISSUED TO THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE, SH. SURINDER MAHAJAN SUBMITTED THAT THE LD. CIT(A) HAS NOT APPRECIATED THE COMPLETE FACTS IN TH E CASE OF ASHOK CHADHA ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 25 VS. ITO (SUPRA), WHICH FACTS ARE COMPLETELY DISTING UISHABLE FROM THE CASE OF PRESENT ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO PARA 2 OF THE HONBLE HIGH COURTS ORDER, WHEREIN IT HAS BEEN MENTIONED THAT TWO QUESTIONNAIRE DATED 07.12.2007 AND 27.12.2007 W ERE ISSUED TO THE ASSESSEE WHICH WERE DULY COMPLIED BY HIM. FURTHERM ORE, IN PARA 14 OF HIGH COURTS ORDER, IT HAS BEEN MENTIONED THAT NO SPECIFIC NOTICE WAS REQUIRED U/S 143(2) OF THE ACT WHEN THE NOTICE IN T HE PRESENT CASE AS REQUIRED U/S 153(A)(1)(A) OF THE ACT WAS ALREADY GIVEN. IN A DDITION, THE TWO QUESTIONNAIRES ISSUED TO THE ASSESSEE WERE SUFFICIE NT SO AS TO GIVE NOTICE TO THE ASSESSEE, ASKING HIM TO ATTEND THE OFFICE OF TH E AO. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY ARGUED THAT NO QUESTIONNAIRES WERE SERVED UPON THE PRESENT ASSESSEE AND THEREFORE, THE PRESENT ASSESSE E HAD NO OPPORTUNITY TO GIVE ANY EXPLANATION/FILE ANY DOCUMENTS WITH THE A. O. THE LD. COUNSEL FOR THE ASSESSEE FURTHER ARGUED THAT ISSUE OF NOTICE UN DER SECTION 143(2) OF THE ACT IS A CONDITION PRECEDENT TO THE VALIDITY OF ASS ESSMENT. HE RELIED UPON TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF ACIT VS. HOTEL BLUE MOON 321 ITR 632 AND DECISION OF HONBLE PUNJ AB & HARYANA HIGH COURT IN THE CASE OF CIT VS. CEBON INDIA LTD. 226 CTR 188 (P&H). THE LD. COUNSEL FOR THE ASSESSEE FURTHER STATED THAT ASSESS MENT MADE WITHOUT GIVING NOTICE TO THE ASSESSEE, LACK PRINCIPLE OF NATURAL J USTICE AND QUASI JUDICIAL ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 26 DECISION RENDERED AND ORDER MADE IN VIOLATION OF AU DI ALTERAM PARTEM RULE IS NULL AND VOID. HE RELIED UPON THE DECISIONS OF VARI OUS COURTS OF LAW IN SUPPORT OF HIS VIEWS. 9. ON THE BASIS OF FACTS ON RECORD AND SUBMISSIONS MADE BY BOTH THE PARTIES, WE FIND FORCE IN THE CONTENTIONS OF THE LD . COUNSEL FOR THE ASSESSEE THAT THE COMPLETION OF ASSESSMENT AND ISSUE OF NOT ICE U/S 143(2) OF THE ACT OR ANY OTHER QUESTIONNNAIRE AND THAT TOO WITHIN A SHORT SPAN OF 37 DAYS IS BAD IN LAW. THE LD. COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATT ENTION TO THE FINDINGS GIVEN BY THE LD. CIT(A) IN PARA 8.8 AT PAG E 73 OF HIS ORDER AND SUBMITTED THAT FOR SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT, PROVISIONS OF SECTION 282 OF THE ACT HAVE NOT BEEN COMPLIED WITH. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE AO DOES N OT ASSUME JURISDICTION FOR ASSESSMENT AND ASSESSMENT SO MADE IS VOID AB INITI O AND BAD IN LAW AND THEREFORE, DIRECTED TO BE QUASHED. THUS, ALL THE GR OUNDS RAISED BY THE ASSESSEE IN ALL THE APPEALS IN THE CASE OF SH. MITH ILESH KUMAR ARE ALLOWED. 10. SINCE THE ASSESSEES APPEAL HAVE BEEN ALLOWED I N ALL THE YEARS ON LEGAL GROUNDS AS MENTIONED HEREINABOVE, WE DO NOT THINK I T PROPER TO DECIDE THE ISSUES OR GROUNDS RAISED BY THE ASSESSEE ON MERITS. ACCORDINGLY, ALL THE GROUNDS IN THE CASE OF MITHILESH KUMAR ARE ALLOWED. ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 27 11. NOW, WE TAKE UP APPEALS IN THE CASE OF SH. JEET U KESHI FOR THE ASSESSMENT YEARS MENTIONED HEREINABOVE IN ITA NOS.5 86 TO 589(ASR)/2011. THE FACTS IN THE PRESENT APPEALS ARE IDENTICAL AS M ENTIONED HEREINABOVE AND THEREFORE OUR ORDER IN THE CASE OF SH. MITHILESH KU MAR WILL BE IDENTICALLY APPLICABLE IN THE CASE OF SH. JEETU KESHI IN ALL TH E ASSESSMENT YEARS MENTIONED HEREINABOVE. ACCORDINGLY, ALL THE APPEALS IN THE CASE OF SH. JEETU KESHI ARE ALLOWED. 12. IN THE RESULT, THE APPEALS OF THE ASSESSEE IN ITA NOS.582, 583, 584 & 585(ASR)/2011 IN THE CASE OF SH. MITHILESH KUMAR AN D IN ITA NOS. 586, 587, 588 & 589(ASR)/2011 IN THE CASE OF SH. JEETU KESHI ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21ST NOVEMBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21ST NOVEMBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEES: I) SH. MITHILESH KUMAR, KAPURTHALA II) SH. JEETU KESHI KAPURTHALA 2. THE ITO KAPURTHALA-1, KAPURTHALA. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER ITA NOS. 582 TO 585(ASR)/2011 & ITA NO.586 TO 589(ASR)/2011 28 (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.