ITO, Bhiwani V. Shri Prem Kumar Garg Prop., Bhiwani

ITA 6028/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2894 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 07-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMI L A TRIPATHI
• Assessee Lawyers: P K KAMAL
• Keywords: Unexplained investment; Document seized; Period of limitation; Validity of assessment; Documents seized
• Section: 132

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH F, NEW DELHI BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 5345/DEL./2014 ASSESSMENT YEAR: 2007-08 SHRI PREM KUMAR GARG, S/O LATE SHRI JAI GOPAL, PROP. M/S. GARG TRADING CO., 36, VIKAS NAGAR, BHIWANI. (PAN: AATPG4562C) (APPELLANT) VS. INCOME - TAX OFFICER, WARD-1, BHIWANI. (RESPONDENT) ITA NO. 6028/DEL./2014 ASSESSMENT YEAR: 2007-08 INCOME - TAX OFFICER, WARD-1, BHIWANI. (APPELLANT) VS. SHRI PREM KUMAR GARG, S/O LATE SHRI JAI GOPAL, PROP. M/S. GARG TRADING CO., 36, VIKAS NAGAR, BHIWANI. (RESPONDENT) ASSESSEE BY SH. GAUTAM JAIN, ADV OCATE & SH. P.K. KAMAL, ADVOCATE REVENUE BY SMT. PARAMI L A TRIPATHI, CIT/DR ORDER PER L.P. SAHU, A.M.: THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSEE AS WELL AS THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), ROHTAK DATED 29.08.2014 FOR THE ASSESSMENT YEAR 2007-08. FOR THE SAKE OF CONVENIENC E, WE FIRST TAKE UP THE APPEAL OF THE ASSESSEE, WHEREIN THE ASSESSEE HAS RA ISED FOLLOWING GROUNDS : DATE OF HEARING 01.02.2018 DATE OF PRONOUNCEMENT 21 .03.2018 ITA NO. 5345 & 6028/DEL./2014 2 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS ERRED BOTH IN LAW AND ON FACTS IN NOT HOLDING THAT IMPUGN ED ORDER OF ASSESSMENT U/S 143(3)/153C OF THE ACT DATED 26.3.2013 IS BARRE D BY LIMITATION IN VIEW OF SECOND PROVISO TO SECTION 153B(1) OF THE ACT AND THEREFORE, DESERVED TO BE QUASHED AS SUCH. 2. THAT FURTHER MORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ALSO ERRED BOTH IN LAW AND ON FACTS IN NOT CONC LUDING THAT THE NOTICE U/S 153C OF THE ACT HAD BEEN ISSUED WITHOUT SATISFY ING THE STATUTORY PRECONDITIONS CONTAINED IN THE ACT AND, THEREFORE T HE ASSUMPTION OF JURISDICTION TO INITIATE PROCEEDINGS U/S 153C OF TH E ACT AND FRAME ASSESSMENT U/S 153C/143(3) OF THE ACT WAS NOT IN AC CORDANCE WITH LAW AND THUS, INVALID. 2.1 THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FAILED TO APPRECIATE THAT SINCE NO MONEY, BULLION JEWELLER Y OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNTS OR DOCUMENTS BELONGING TO THE APPELLANT WERE SEIZED AS A RESULT OF SEARCH ON SHRI S. K. SINGHAL GROUP OF CASES THE ASSUMPTION OF JURISDICTION U/S 153C OF TH E ACT WAS ILLEGAL, INVALID AND UNSUSTAINABLE. 2. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND S EIZURE OPERATION WAS CARRIED OUT IN THE CASE OF S.K. SINGH GROUP ON 17-1 8/09/2008. FOLLOWING DOCUMENTS BELONGING TO THE ASSESSEE WERE FOUND IN T HE SEARCH : (I). PAGES 9 TO 12 OF ANNEXURE A-2 SEIZED FROM E-12 7, RIICO INDUSTRIAL AREA, BHIWADI ALONG WITH COPY OF PAGE 22 OF THE APP RAISAL REPORT. (II). PAGES 3 TO 10 OF ANNEXURE A-2 SIEZED FROM E-1 27, RIICO INDUSTRIAL AREA, BHIWADI ALONGWITH COPY OF PAGE 37 OF THE APPR AISAL REPORT. (III). COPY OF STATEMENT OF SHRI PREM KUMAR GARG RE CORDED ON 06.03.2009 BEFORE THE ADIT (INV-II), JAIPUR WHEREIN HE HAS MADE SURRENDER OF INCOME IN RELATION TO THE ABOVE DOCUME NTS. 3. THE ASSESSING OFFICER INITIATED PROCEEDINGS U/S. 153C IN THE CASE OF ASSESSEE AFTER RECEIVED THE SEIZED DOCUMENTS. THE S EIZED DOCUMENTS WERE ITA NO. 5345 & 6028/DEL./2014 3 RECEIVED ON 08.04.2011 AND THE SATISFACTION NOTE WA S RECORDED ON 10.04.2011 BY THE ASSESSING OFFICER (ACIT, CENTRAL CIRCLE, ALW AR). ACCORDINGLY, THE NOTICE U/S. 153C WAS ISSUED ON 26.03.2012 WHICH WAS SERVED UPON THE APPELLANT ON 27.03.2012. THE ASSESSMENT WAS COMPLETED ON 26.03.2 013 WITH PRIOR APPROVAL OF JCIT, BHIWADI RANGE BY MAKING ADDITION OF RS.1,69,84,750/- ON ACCOUNT OF SHORT TERM CAPITAL GAIN, RS.50,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT AND RS.3,75,000/- ON ACCOUNT OF UNSECURE D LOANS AS AGREED BY ASSESSEE. IN APPEAL BEFORE THE LD. CIT(A), THE ASSE SSEE CHALLENGED THE VALIDITY OF ASSESSMENT U/S. 143(3)/153C OF THE ACT AND ALSO ON MERITS OF ADDITIONS. THE LD. CIT(A) REJECTED THE CONTENTION OF THE ASSES SEE REGARDING VALIDITY OF ASSESSMENT BEING BARRED BY LIMITATION AND PARTLY AL LOWED THE APPEAL OF THE ASSESSEE BY DELETING THE ADDITION OF RS.1,67,66,750 /- OUT OF THE ADDITION OF RS.1,69,84,750/- MADE BY ASSESSING OFFICER. HE ALSO DELETED THE ADDITION OF RS.50 LACS MADE ON ACCOUNT OF UNEXPLAINED INVESTMEN T. THE REVENUE IS IN APPEAL CHALLENGING THE RELIEF GRANTED BY THE ASSESS EE WHEREAS THE ASSESSEE HAS FILED THE APPEAL CHALLENGING THE VALIDITY OF ASSESS MENT AS CONFIRMED BY THE LD. CIT(A). 4. ADDRESSING TO THE POINT OF LIMITATION, THE LD. C OUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT MADE U/S. 153C IS NOT LEGALLY VALID BEING ITA NO. 5345 & 6028/DEL./2014 4 BARRED BY LIMITATION. IT WAS SUBMITTED THAT THE LD. CIT(A) WHILE APPRECIATING THIS ISSUE HAS FAILED TO CONSIDER THAT THE FIRST PR OVISO TO SECTION 152B OF THE ACT WAS NOT APPLICABLE IN THE INSTANT CASE AND AS PER S ECOND PROVISO TO THIS SECTION, WHICH IS APPLICABLE, THE TIME LIMIT FOR CO MPLETION OF ASSESSMENT U/S. 153C IN THE CASE OF PERSON OTHER THAN SEARCHED PERS ON IS 21 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE LAST OF AUTH ORIZATIONS FOR SEARCH UNDER SECTION 132 OR FOR REQUISITION U/S 132A WAS EXECUTE D; OR 9 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED ARE HANDED OVER UNDER SECTI ON 153C TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON, WHICHEVER IS LATER. IT WAS SUBMITTED THAT END OF FINANCIAL YEAR IN WHICH LAST OF AUTHORIZATION WAS EXECUTED OR SEARCH WAS COMPLETED WAS ON 31.03.2009 AND 21 MONTHS FROM THIS DATE EXPIRE ON 31.12.2010. SIMILARLY, THE DATE OF HANDING OVER THE DOCUMENTS WAS 01.04.2011, THE FINANCIAL YEAR OF WHI CH ENDS ON 31.03.2012 AND 9 MONTHS FROM THIS DATE EXPIRE ON 31.12.2012 . ACCORDINGLY, THE ASSESSING OFFICER COULD COMPLETE THE ASSESSEE UPTO 31.12.2012 , BUT THE IMPUGNED ASSESSMENT HAS BEEN MADE ON 26.03.2013 WHICH IS BAR RED BY LIMITATION. FOR THIS, HE HAS RELIED ON THE COMMON ORDER OF ITAT JAI PUR BENCH IN THE CASE OF SMT. KAMLESH RANI VS. ITO (ITA NOS. 707 & 708/JP/20 15) ALONGWITH VARIOUS OTHER ASSESSEES. (COPY PLACED ON PAPER BOOK). ITA NO. 5345 & 6028/DEL./2014 5 5. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF THE LD. CIT(A) ON THIS ISSUE AND SUBMITTED THAT THE ASSESSMENT MADE IS WEL L WITHIN THE PERIOD OF LIMITATION AS PER LAW AND CANNOT BE TREATED AS BARR ED BY TIME. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E GONE THROUGH THE ENTIRE MATERIAL AVAILABLE ON RECORD ON THE ISSUE OF LIMITATION AND WE FIND THAT THE ASSESSMENT MADE U/S. 153C IN THE CASE OF ASSESS EE IS NOT LEGALLY VALID BEING BARRED BY LIMITATION. IN VIEW CLAUSE (II) OF SECOND PROVISO TO SECTION 153B(1), THE TIME LIMIT FOR COMPLETION OF ASSESSMEN T U/S. 153C IN THE CASE OF PERSON OTHER THAN SEARCHED PERSON IS 21 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE LAST OF AUTHORIZATIONS FOR SEARCH UNDER SECTION 132 OR FOR REQUISITION U/S 132A WAS EXECUTED; OR 9 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH BOOKS OF ACCOUNT OR DOCUMENTS OR ASSE TS SEIZED OR REQUISITIONED ARE HANDED OVER UNDER SECTION 153C TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON, WHICHEVER IS L ATER. ADMITTEDLY, THE END OF FINANCIAL YEAR IN WHICH THE SEARCH WAS COMPLETED FA LLS IN THE INSTANT CASE ON 31.03.2009 AND 21 MONTHS FROM THIS DATE WOULD EXPIR E ON 31.12.2010 . ALSO, THE DATE OF HANDING OVER THE DOCUMENTS WAS ADMITTED LY 01.04.2011, THE FINANCIAL YEAR OF WHICH ENDS ON 31.03.2012 AND 9 MO NTHS FROM THIS DATE ITA NO. 5345 & 6028/DEL./2014 6 WOULD EXPIRE ON 31.12.2012. ACCORDINGLY, THE ASSESS MENT COULD BE COMPLETED UPTO 31.12.10 OR 31.12.2012 WHICHEVER IS LATER. HOW EVER, THE ASSESSMENT IN QUESTION HAS BEEN MADE ON 26.03.2013 WHICH IS BARRE D BY LIMITATION. THE LD. CIT(A) APPEARS TO HAVE CONSIDERED THE LIMITATION OF 12 MONTHS FROM THE DATE OF HANDING OVER THE DOCUMENTS TO THE ASSESSING OFFI CER OF OTHER PERSON, WHICH IS APPLICABLE IN CASE WHERE THE SEARCH IS COMPLETE D BEFORE 1 ST APRIL, 2004 OR AFTER 31.03.2010. IN THE INSTANT CASE, THE SEARCH O PERATION WAS EXECUTED ON 17.09.2008, WHICH PERIOD IS COVERED BY SECOND PROVI SO TO SECTION 153B(1) AND NOT UNDER FIRST PROVISO TO THIS SECTION. SIMI LAR VIEW HAS BEEN TAKEN BY COORDINATE BENCH OF ITAT, JAIPUR IN THE CASE OF SMT . KAMLESH RANI (SUPRA), WHERE, IN THE IDENTICAL FACTS AND CIRCUMSTANCES, TH E ASSESSMENTS HAVE BEEN HELD AS BARRED BY LIMITATION. NO CONTRARY MATERIAL IS LAID ON RECORD FROM THE SIDE OF REVENUE TO TAKE A DIFFERENT VIEW. ACCORDING LY, IN VIEW OF ABOVE LEGAL INTERPRETATION OF LAW AND RESPECTFULLY FOLLOWING TH E DECISION OF CO-ORDINATE BENCH, WE HOLD THE IMPUGNED ASSESSMENT AS LEGALLY I NVALID BEING BARRED BY LIMITATION, WHICH IS LIABLE TO BE QUASHED. ACCORDIN GLY, THE APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED ON THIS LEGAL ASPEC T. ITA NO. 5345 & 6028/DEL./2014 7 7. SINCE THE ASSESSMENT ORDER HAS BEEN QUASHED, BEI NG TIME BARRED, AS DISCUSSED ABOVE, THE APPEAL FILED BY THE REVENUE BE COMES INFRUCTUOUS AND IS THUS, LIABLE TO BE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED, AS INDICATED ABOVE AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST MARCH, 2018. SD/- SD/- (BHAVNESH SAINI) ( L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21 ST MARCH, 2018 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI