ACIT, Central Circle,1(1), Pune V. Mr Amod Subhash Pingale, Pune

ITA 609/PUN/2003

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1587 (ITAT-PUNE)
• Duration Of Justice: 13 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 21-05-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S SINGH
• Keywords: Document seized; Opportunity of being heard; Block assessment; Tax effect; Documents seized

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE . . , , ' # BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.609/PN/2003 BLOCK PERIOD 01-04-1989 TO 08-12-1999 ACIT, CENTRAL CIRCLE-1(1), PUNE . / APPELLANT V/S MR. AMOD SUBHASH PINGALE, 25, SUVIND, NAVKETAN SOCIETY, KOTHRUD, PUNE 29 PAN NO.AAUPP2485L . / RESPONDENT C.O. NO.10/PN/2004 (ARISING OUT OF ITA NO.609/PN/2003) BLOCK PERIOD 01-04-1989 TO 08-12-1999 MR. AMOD SUBHASH PINGALE, 25, SUVIND, NAVKETAN SOCIETY, KOTHRUD, PUNE 29 PAN NO.AAUPP2485L . / CROSS OBJECTOR V/S ACIT, CENTRAL CIRCLE - 1(1), PUNE . / APPELLANT IN THE APPEAL ASSESSEE BY : SHRI SUNIL GANOO REVENUE BY : SHRI S. SINGH, CIT / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE REVENUE AND CO FILED BY THE ASSES SEE ARE DIRECTED AGAINST THE ORDER DATED 07-03-2003 OF THE CIT(A)-I, PUNE RELATING TO THE BLOCK PERIOD 01-04-1989 TO 08-12-1 999. FOR THE SAKE OF CONVENIENCE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. / DATE OF HEARING :05.07.2016 / DATE OF PRONOUNCEMENT: 08.07.2016 2 ITA NO.609 /PN/2003 AND CO NO.10/PN/2004 ITA NO.609/PN/2003 (BY REVENUE) : 2. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBM ITTED THAT THE TAX EFFECT IN THE GROUNDS RAISED BY THE REVENUE IS B ELOW RS.10 LAKHS. THEREFORE, IN VIEW OF THE CBDT CIRCULAR NO.21/2015 DA TED 10-12-2015 THE APPEAL FILED BY THE REVENUE IS NOT MAINTAIN ABLE AND SHOULD BE DISMISSED. 3 THE LD. DEPARTMENTAL REPRESENTATIVE FAIRLY CONCEDED T HAT THE TAX EFFECT IN THE INSTANT APPEAL FILED BY THE REVENUE IS ADM ITTEDLY BELOW RS.10 LAKHS. 4. AFTER HEARING THE RIVAL CONTENTIONS MADE BY BOTH THE S IDES, WE FIND THE TAX EFFECT IN THE INSTANT APPEAL FILED BY THE REVENU E IS ADMITTEDLY BELOW RS.10 LAKHS. THEREFORE, IN VIEW OF CIRCULAR NO.21/2015 DATED 10-12-2015 OF CBDT RAISING THE MONETAR Y LIMIT FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE TRIBUNAL, WHICH ALSO APPLIES TO PENDING APPEALS FILED BY THE REVENUE, THE A PPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE AND HAS TO BE DISMISSE D. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE REVENUE IS DISMISSED. CO NO.10/PN/2004 (BY ASSESSEE) : 5. GROUND OF APPEAL NO.1 OF THE CO RAISED BY THE ASSESSEE READS AS UNDER : 1. THE RESPONDENT ASSESSEE DENIES HIS LIABILITY TO PAY SURCHARGE. THE LD.CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE LE VY OF SURCHARGE OF 10% ON THE TAX PAYABLE AS WORKED OUT ON THE BASIS OF T HE ASSESSED UNDISCLOSED INCOME OF THE RESPONDENT ASSESSEE. THE AFORESA ID LEVY OF SURCHARGE BEING PATENTLY ILLEGAL AND WITHOUT ANY LEG AL AUTHORITY THE SAME DESERVES TO BE DELETED. 6. FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO IN THE BOD Y OF THE ASSESSMENT ORDER HAS LEVIED SURCHARGE OF 10% ON THE T AX PAYABLE AS 3 ITA NO.609 /PN/2003 AND CO NO.10/PN/2004 WORKED OUT ON THE BASIS OF THE ASSESSED UNDISCLOSED INCO ME. BEFORE CIT(A) THE ASSESSEE CHALLENGED THE VALIDITY OF THE SURCHARG E LEVIED BY THE AO, HOWEVER, THE LD.CIT(A) CONFIRMED THE LEVY OF SUCH SURCHARGE. 7. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE HAS FILED THE CROSS OBJECTION. 8. AFTER HEARING BOTH THE SIDES, WE FIND THE ISSUE OF LEVY O F SURCHARGE IN CASE OF BLOCK ASSESSMENTS PERTAINING TO THE PERIOD PRIOR TO 01-06-2002 HAS BEEN SETTLED BY THE LATEST DEC ISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. VATIKA TOWN SHIP PVT. LTD. REPORTED IN 367 ITR 466. IT HAS BEEN HELD IN THE S AID DECISION THAT THOUGH PROVISION FOR SURCHARGE UNDER THE FINANCE ACTS HAS BEEN IN EXISTENCE SINCE 1995, THE CHARGE OF SURCHARGE WIT H RESPECT TO BLOCK ASSESSMENTS, HAVING BEEN CREATED FOR THE FIRST T IME BY THE INSERTION OF THE PROVISO TO SECTION 113 OF THE I.T. ACT, 19 61 BY THE FINANCE ACT, 2002, IT IS CLEARLY A SUBSTANTIVE PROVISION AN D IS TO BE CONSTRUED AS PROSPECTIVE IN OPERATION. THE AMENDMENT NEITHER PURPORTS TO BE MERELY CLARIFICATORY NOR IS THERE ANY MAT ERIAL TO SUGGEST THAT IT WAS INTENDED BY PARLIAMENT. ACCORDINGLY, IT WAS HELD THAT SURCHARGE WILL NOT BE APPLICABLE TO BLOCK ASSESSMENT S PERTAINING TO PERIOD PRIOR TO 01-06-2002. SINCE THE BLOCK PERIOD IN THE INSTANT CASE IS ADMITTEDLY FOR THE PERIOD 01-04-1989 TO 08-12- 1999, I.E. PRIOR TO 01-06-2002, THEREFORE, SURCHARGE IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. ACCORDINGLY, THE ORDE R OF THE CIT(A) IS SET ASIDE AND THE GROUND OF CROSS OBJECTION NO.1 RAISE D BY THE ASSESSEE IN THE CO IS ALLOWED. 4 ITA NO.609 /PN/2003 AND CO NO.10/PN/2004 9. GROUND NO.2 OF THE CO RAISED BY THE ASSESSEE READS AS UNDER: 2. THE RESPONDENT ASSESSEE DENIES HIS LIABILITY TO PAY A NY INTEREST U/S.158BFA(1) OF THE I.T. ACT, 1961. THE LD.CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO CHARGE THE SAID INTEREST. THE A FORESAID DIRECTION OF THE LD.CIT(A) BEING PATENTLY ILLEGAL AND WITHOUT AUTHORITY OF LAW THE SAME DESERVES TO BE VACATED. 10. AFTER HEARING BOTH THE SIDES, WE FIND THE ASSESSEE FILED THE RETURN OF UNDISCLOSED INCOME ON 05-09-2000 WHEREAS THE NOTICE U/S.158BC WAS ISSUED ON 27-07-2000 REQUIRING THE ASSESS EE TO FILE THE RETURN OF UNDISCLOSED INCOME FOR THE BLOCK PERIOD WITHIN 30 DAYS FROM THE RECEIPT OF THE NOTICE. THE NOTICE WAS SERVED ON THE ASSESS EE ON 31-07-2000. THE ASSESSEE DID NOT FILE THE RETURN OF IN COME ON OR BEFORE 30-08-2000 BUT SOUGHT ADJOURNMENT BY FILING AN AP PLICATION ON 22-08-2000 AND 25-08-2000 WHICH HAS BEEN ALLOWED BY THE AO TILL 06-09-2000. IN APPEAL THE LD.CIT(A) OBSERVED THAT TH E AO DOES NOT HAVE POWER TO EXTEND TIME FOR FILING THE RETURN OF BLOC K PERIOD. HE, THEREFORE, ASKED THE ASSESSEE TO EXPLAIN AS TO WHY IN TEREST U/S.158BFA(1) SHOULD NOT BE CHARGED. REJECTING THE VARIO US EXPLANATIONS GIVEN BY THE ASSESSEE HE DIRECTED THE AO T O CHARGE INTEREST U/S.158BFA AS PER LAW. 11. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DELAY IN RECEIVING OF THE DOCUMENTS FROM THE DEPARTMENT FOR PREPA RING THE RETURN FOR THE BLOCK PERIOD SHOULD BE EXCLUDED FOR COMPUT ING THE PERIOD OF 30 DAYS. RELYING ON THE DECISION OF THE PUNE BE NCH OF THE TRIBUNAL IN THE CASE OF MR. MUKUND KRISHNAJI PURANDARE AN D VICE- VERSA VIDE ITA NO.608/PN/2003 AND CO NO.09/PN/2004 HE SUBMITTED THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES TH E TRIBUNAL HAS RESTORED THE ISSUE OF LEVY OF INTEREST U/S.158BFA(1) TO THE FILE OF THE AO FOR FRESH CONSIDERATION. HE ACCORDINGLY SUBMITTED THAT HE 5 ITA NO.609 /PN/2003 AND CO NO.10/PN/2004 HAS NO OBJECTION IF THE MATTER IS RESTORED TO THE FILE OF THE AO FOR DECIDING THE ISSUE IN THE LIGHT OF THE DIRECTION OF THE TRIBUNAL. 12. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). 13. AFTER HEARING BOTH THE SIDES, WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF MR. MUKUND KRISHNAJI PURANDARE (SUPRA). WE FIND THE TRIBUNAL HAS DISCUSSED THE ISSUE AT PARA 4 OF THE ORDER AND HAS RESTORED THE ISSUE TO THE FILE OF THE AO FOR FRESH CONSIDERATION BY OBSERVING AS UNDER : 4. WE HAVE HEARD THE PARTIES . THE ONLY GRIEVANCE O F THE ASSESSEE IS THAT THE INTEREST CHARGED BY THE A.O U/S. 158BFA (1) IS ILL EGAL AS ASSESSEE FILED THE RETURN OF INCOME WITHIN 45 DAYS AS PER THE GRACE PERIOD GIVEN BY THE A.O. THE LD COUNSEL SUBMITS THAT THE A.O. HAS FI XED THE TIME LIMIT OF 30 DAYS FOR THE NOTICE ISSUED TO THE ASSESSEE, BUT AS P ER LAW, THE ASSESSEE HAD TIME LIMIT UPTO 45 DAYS. HE PLEADED THAT PR ESUMING THERE IS A SMALL DELAY, AND THAT WAS NOT ATTRIBUTABLE TO THE ASSESSEE AS ASSESSEE WAS NOT FURNISHED WITH THE COPIES IN RESPECT OF TH E SEIZED DOCUMENTS FOR PREPARING THE RETURN FOR THE BLOCK PER IOD. HENCE, AT LEAST TO THE EXTENT OF THE PERIOD I.E. BETWEEN THE DATE O F THE APPLICATION FOR GETTING THE COPIES TILL THE DATE OF FURNISHING THE CO PIES OF THE SEIZED DOCUMENTS TO THE ASSESSEE, THE PERIOD IS TO BE EXCLUDED F OR COMPUTING THE PERIOD OF 30 DAYS. THE LD COUNSEL RELIED ON THE D ECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. MESCO AIRL INES LTD., 327 ITR 554 (DEL.). HE SUBMITS THAT HE HAS NO OBJECTION EVEN I F THE ISSUE OF LEVY OF INTEREST IS RESTORED TO THE FILE OF THE A.O FOR REC ONSIDERATION IN THE LIGHT OF THE PRINCIPLES LAID DOWN IN THE CASE OF MESCO AIRLINES LTD.(SUPRA). THE LD. D.R. HAS NO OBJECTION. WE, ACCO RDINGLY, RESTORE THE ISSUE OF LEVY OF INTEREST U/S. 158BFA(1) TO THE FILE OF THE A.O. FOR FRESH CONSIDERATION. ACCORDINGLY, GROUND NO. 2 IS ALLOWED F OR STATISTICAL PURPOSES. 14. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BE NCH OF THE TRIBUNAL CITED (SUPRA) WE RESTORE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE ISSUE OF LEVY OF INTEREST U/S .158BFA(1) IN THE LIGHT OF THE DECISION OF THE TRIBUNAL AND IN ACCORDANC E WITH LAW AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASS ESSEE. WE 6 ITA NO.609 /PN/2003 AND CO NO.10/PN/2004 HOLD AND DIRECT ACCORDINGLY. GROUND NO.2 OF THE CROSS OB JECTION IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISM ISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 08-07-2016. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE; ! DATED : 08 TH JULY, 2016. % &'( ) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . THE CIT(A ) - I, PUNE 4. 5. 6. THE CIT CENTRAL, PUNE # &&' , ' , / DR, ITAT, A PUNE; + / GUARD FILE. / BY ORDER, // TRUE COPY // // # & //TRUE -. & ' / SR. PRIVATE SECRETARY ' , / ITAT, PUNE