RAM SWAROOP MEENA, Jaipur V. JCIT(OSD), Jaipur

ITA 608/JPR/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1941 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 11-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PM H VIHYKFKHZ IZRFKHZ
• Section: 143(3); 153A; 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 607, 608 & 609/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07, 2007-08 & 2008-09. SHRI RAM SWAROOP MEENA 855, AKARON KA RASTA, KISHANPOLE BAZAR, JAIPUR. CUKE VS. JCIT,(OSD) CENTRAL CIRCLE-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABYPM 3113 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (C.A) JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18.09.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 26/10/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THESE THREE APPEALS BY THE ASSESSEE IN ITA NOS. 607 /JP/2015, 608/JP/2015 & 609/JP/2015 ARE DIRECTED AGAINST THE ORDERS OF THE LD. CIT (A)- 4, JAIPUR DATED 27.04.2015 PERTAINING TO A.Y. 2006-07, 2007-08, 200 8-09. THESE APPEALS WERE DECIDED VIDE ORDER DATED 28/02/2 017. SUBSEQUENTLY, THE ASSESSEE FILED A MISCELLANEOUS APPLICATION ON THE G ROUND THAT THE ADDITIONAL GROUND THAT RAISED IN THESE APPEALS, WAS NOT DECIDED. IT IS NOTICED THAT THIS ADDITIONAL GROUND RAISED BEFORE THIS TRIBUNAL WAS NOT BEFORE T HE LD. CIT(A). HOWEVER, THIS BEING THE LEGAL GROUND IS ADMITTED FOR ADJUDICATION . ACCORDINGLY, FINDING THE MISTAKE, THESE APPEALS WERE FIXED FOR HEARING AND ADJUDICATI ON OF THE ADDITIONAL GROUND. 2 ITA NOS. 607,608 & 609/JP/2015. SHRI RAM SWAROOP MEENA, JAIPUR. ITA NO. 607/JP/2015 2. FIRST WE TAKE UP ASSESSEES APPEAL IN ITA NO. 60 7/JP/2015 PERTAINING TO THE ASSESSMENT YEAR 2006-07. THE ASSESEE HAS RAISED THE ADDITIONAL GROUNDS OF TH IS APPEAL THAT READS AS UNDER:- ADDITIONAL GROUND OF APPEAL NO. 03 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. ASSESSING OFFICER HAS GROSSLY ERRED IN COMPLETING THE ASSESSMENT U/S 143(3) RWS153A/153C OF THE INCOME TAX ACT, 1961 EVEN WHEN NO INCRIMINATING PAPER WHATSOEVER WAS FOUND AS A RESULT OF SEARCH PERTAINING TO THE YEAR UNDER APPEAL, AND THE ADDITION HAS BEEN MADE BY LD. AO WITHOUT REFERRING TO ANY SINGLE MATERIAL FOUND DURING SEARCH THUS THE CONSEQUENT ORDER PASSE D DESERVES TO BE QUASHED. ADDITIONAL GROUND OF APPEAL NO. 3.1 THAT THE LD. AO HAS FURTHER ERRED IN MAKING ADDITIO NS U/S 143(3) R.W.S. 153A/153C TO THE RETURNED INCOME OF ASSESSEE WITHOU T REFERRING TO A SINGLE PAPER / INCRIMINATING MATERIAL SEIZED DURING THE CO URSE OF SEARCH PARTICULARLY WHEN NO ASSESSMENT PROCEEDINGS WERE PENDING BEFORE THE LD. AO AS ON THE DATE OF SEARCH, THEREFORE, THE ORDER OF LD. AO DESE RVES TO BE HELD BAD IN LAW AND THE CONSEQUENT ADDITIONS DESERVE TO BE DELETED. 3. AT THE TIME OF HEARING, LD. COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE IMPUGNED ASSESSMENT ORDER HAS BEEN FRAMED U/S 153A/ 143(3) OF THE INCOME TAX ACT, 1961. LD. COUNSEL SUBMITTED THAT THE ASSESSME NT HAS NOT BEEN FRAMED ON THE BASIS OF THE INCRIMINATING MATERIAL. THE ASSESSMEN T HAS BEEN FRAMED WITHOUT REFERRING TO ANY SINGLE PAPER/ INCRIMINATING MATERI AL SEIZED DURING THE COURSE OF SEARCH. LD. COUNSEL FOR THE ASSESSEE RELIED UPON T HE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. KABUL CHAWLA 234 TAXMAN 300(DELHI). 3 ITA NOS. 607,608 & 609/JP/2015. SHRI RAM SWAROOP MEENA, JAIPUR. 4. LD. COUNSEL FURTHER REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN BRIEF. THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE ARE IN SHORT IS THAT, IN VIEW OF THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. KABUL CHAWLA 234 TAXMAN 300(DELHI)(S UPRA), THE IMPUGNED ASSESSMENT ORDER IS UNSUSTAINABLE IN THE EYES OF TH E LAW. HE CONTENDED THAT THE ASSESSMENT IS NOT BASED UPON ANY SEIZED MATERIAL OR ANY MATERIAL WHICH FOUND DURING THE COURSE OF SEARCH. 5. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVES SUPP ORTED THE ASSESSMENT ORDER AND SUBMITTED THAT THE SEARCH WAS NOT CONDUCTED. T HE ASSESSEE WOULD NOT HAVE DISCLOSED INCOME RELATED TO INCOME FROM HIRING VEHI CLES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER IN PARA 3 OF HIS ORD ER AS OBSERVED AS UNDER:- 3. A SEARCH WAS CONDUCTED ON 18.03.2010 IN THE CAS E OF M/S NARAYANJI GAJAKWALE GROUP, JAIPUR TO WHICH THE ASSESSEE BELON GS. THE GROUP DEALS IN MANUFACTURING/TRADING TO GAJAK, NAMKEENS AND SWEETS . VARIOUS ASSETS/BOOKS OF ACCOUNTS AND DOCUMENTS HAVE BEEN FOUND AND SEIZE D AS PER ANNEXURE PREPARED DURING THE COURSE OF SEARCH. ACCORDINGLY NOTICE U/S 153A WAS ISSUED ON 18.05.2010 FOR THE A.Y. 2004-05 TO 2009-1 0 WHICH WAS SERVED UPON THE ASSESSEE ON 19.05.2010. IN COMPLIANCE TO NOTIC E U/S 153A OF THE IT ACT, 1961 RETURN DECLARING INCOME OF RS. 99,146/- WAS FI LED ON 16/08/2011. IT IS CONTENDED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSMENT U/S 143(3) R.W.S. 153A OF THE INCOME TAX ACT, 1961 IS MADE WIT HOUT REFERRING TO ANY INCRIMINATING MATERIAL DURING THE COURSE OF SEARCH, PARTICULARLY, WITH NO ASSESSMENT PROCEEDINGS WERE PENDING BEFORE THE ASSESSING OFFIC ER AS ON THE DATE OF SEARCH. IT 4 ITA NOS. 607,608 & 609/JP/2015. SHRI RAM SWAROOP MEENA, JAIPUR. IS NOT DISPUTED BY THE REVENUE THAT NO ASSESSMENT P ROCEEDING WAS PENDING AT THE TIME OF SEARCH. THE REVENUE HAS NOT DEMONSTRATED TH AT ANY INCRIMINATING MATERIAL WAS FOUND ON THE BASIS OF WHICH THE ASSESSMENT IS F RAMED AND ASSESSING OFFICER HAS ALSO NOT REFERRED TO ANY MATERIAL SEIZED DURING THE COURSE OF SEARCH WAS USED FOR THE PURPOSE OF THE FRAMING THE ASSESSMENT. THE HONBLE DELHI HIGH COURT UNDER THE IDENTICAL FACTS RENDERED IN THE CASE OF CIT VS. KAB UL CHAWALA (SUPRA) HELD AS UNDER:- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUE D TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN W HICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAV E TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN R ESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEAR CH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ON E ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH TH E DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE O F THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT M EAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RE LEVANCE OR NEXUS 5 ITA NOS. 607,608 & 609/JP/2015. SHRI RAM SWAROOP MEENA, JAIPUR. WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT H AS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATE RIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REAS SESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATAB LE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEAR CH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UND ER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A O. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASI S OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR P ROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL A SSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005- 06 AND 2006- 07.0N THE DATE OF THE SEARCH THE SAID ASSESSMENTS A LREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MAD E TO THE INCOME ALREADY ASSESSED. 39. THE QUESTION FRAMED BY THE COURT IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. FURTHER RELIANCE IS PLACED UPON THE HONBLE JURISDI CTIONAL HIGH COURT IN THE CASE OF JAI STEEL (INDIA) VS. ACIT 259 CTR (RAJ.) 281 WHERE IN IT IS HELD AS UNDER:- 6 ITA NOS. 607,608 & 609/JP/2015. SHRI RAM SWAROOP MEENA, JAIPUR. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT Y EARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE W ORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS A ND REASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHI CH WOULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIA TION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECES SARILY SUPPORT THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMEN TS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MATERIA L FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS. UNDER THESE UNDISPUTED FACT THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. KABUL CH AWLA (SUPRA) AND THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JAI STEEL (INDIA) VS. ACIT (SUPRA) IS SQUARELY APPLIED ON THE FACTS OF THE PRESENT CASE. THEREFOR E, RESPECTFULLY FOLLOWING THE SAME, HEREBY QUASHED THE ASSESSMENT ORDER. THE ADDITIONA L GROUNDS RAISED IN THIS APPEAL ARE ALLOWED. THE ASSESSMENT ORDER AS FRAMED IS HER EBY QUASHED. 7. IN THE RESULT, APPEAL OF THE ASSESSE IN ITA NO. 607/JP/2015 IS ALLOWED. 608 & 609/JP/2015 8. NOW, WE TAKE UP ITA NOS. 608/JP/2015 & 609/JP/20 15 PERTAINING TO THE A.Y. 2007-08 & 2008-09. 8.1 THE FACTS INVOLVED IN THESE TWO APPEALS ARE IDE NTICAL TO ITA NO. 607/JP/2015 PERTAINING TO THE AY 2006-07. THE RESPECTIVE REPRES ENTATIVES OF THE PARTIES HAVE 7 ITA NOS. 607,608 & 609/JP/2015. SHRI RAM SWAROOP MEENA, JAIPUR. ADOPTED THE SAME ARGUMENT AS WERE ADDRESSED IN ITA NO. 607/JP/2015. FOR THE SAME REASONING GIVEN IN ITA NO. 607/JP/2015, WE FIN D NO REASON TO TAKE A DIFFERENT VIEW IN THESE CASES. WE THEREFORE, ALLOW ADDITIONA L GROUNDS RAISED IN BOTH THE ASSESSEES APPEALS IN ITA NO. 608 & 609/JP/2015, AN D HEREBY QUASHED THE IMPUGNED ASSESSMENT ORDER. 9. IN THE COMBINED RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON THURSDAY, THE 26TH DAY OF OCTOBER 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 26/10/2017 POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI RAM SWAROOP MEENA, JAIPUR. 2. THE RESPONDENT JCIT, (OSD), CENTRAL CIRCLE-3, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NOS. 607,608 & 609/JP/2015 . ) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR