DCIT, Bangalore V. Sri. Bhaskar Raju, Bangalore

ITA 622/BANG/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76984 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-04-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 07-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRESCILLA SINGST
• Assessee Lawyers: A SHANKAR
• Keywords: Search and seizure; Retrospective amendment; Validity of assessment
• Section: 143(3); 153A

Judgement Text

ITA NOS.611 TO 622 P SHYAMARAJU BANGALORE PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE C BENCH, BANGALORE BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NOS.611 TO 616/BANG/2012 (ASSESSMENT YEARS: 2004-05 TO 2006-076) ACIT, CENTRAL CIRCLE 2(3) BANGALORE VS. SHRI. P. SHYAMARAJU, NO.343, IV MAIN UPPER PALACE ORCHARDS, SADASHIVANAGAR, BANGALORE 560080 PAN: AIOPP 2600 D (APPELLANT) (RESPONDENT) ITA NOS.617 TO 618/BANG/2012 (ASSESSMENT YEARS: 2004-05 & 2006-076) ACIT, CENTRAL CIRCLE 2(3) BANGALORE VS. SHRI UMESH RAJU, NO.343, IV MAIN UPPER PALACE ORCHARDS, SADASHIVANAGAR, BANGALORE 560080 PAN: ARMPS 9147 H (APPELLANT) (RESPONDENT) ITA NOS.619 TO 620/BANG/2012 (ASSESSMENT YEARS: 2004-05 & 2006-076) ACIT, CENTRAL CIRCLE 2(3) BANGALORE VS. SMT. ARATI RAJU, NO.32, 1 ST A CROSS, RMV EXTENSION, BANGALORE 560080 PAN: ADLPR 7952 G (APPELLANT) (RESPONDENT) ITA NOS.621 TO 622/BANG/2012 (ASSESSMENT YEARS: 2004-05 & 2006-076) ACIT, CENTRAL CIRCLE 2(3) BANGALORE VS. SHRI BHASKAR RAJU, NO.32, 1 ST A CROSS, RMV EXTENSION, BANGALORE 560080 PAN: ABJPR 0744 C (APPELLANT) (RESPONDENT ITA NOS.611 TO 622 P SHYAMARAJU BANGALORE PAGE 2 OF 8 DEPARTMENT BY: MS. PRESCILLA SINGST, CIT (DR) ASSESSEE BY: SHRI A. SHANKAR, ADVOCATE DATE OF HEARING: 24/04/2014 DATE OF PRONOUNCEMENT: 30/04/2014 O R D E R PER GEORGE GEORGE K. J.M. 1. THESE TWELVE APPEALS, AT THE INSTANCE OF THE REVENUE, ARE DIRECTED AGAINST THE CONSOLIDATED ORDERS OF THE CIT (A)-VI, BANGALORE DATED 29.2.2012 IN RESPECT OF (I) SRI P. SHYAMARAJU (INDIVIDUAL), (II) SRI UMESH RAJU, (III) SMT. ARATH I RAJU, AND (IV) SRI BHASKAR RAJU. THE RELEVANT ASSESSMENT YEARS AR E 2004-05, 2005-06 AND 2006-07 . I. ITA NOS.611, 612 & 613 AYS 2004-05 TO 2006-07 P.SHYAMARAJU (INDL): 2. THE REVENUE HAS, IN ITS MEMORANDUM OF APPEALS, RAISED AN IDENTICAL SOLITARY ISSUE, NAMELY, THAT THE CIT (A) FAILED TO RECOGNIZE THAT THE VALIDITY OF ASSESSMENT S IS LEGALLY NOT CONNECTED WITH THE ISSUE OF WARRANT WHI CH WAS ISSUED IN JOINT NAMES. II. ITA NOS.614, 615 & 616 AYS 2004-05 TO 2006-0 7 P.SHYAMARAJU (INDL); III. ITA NOS.617 & 618 AYS 2004-05 & 2006- 07 SRI UMESH RAJU (INDL); IV. ITA NOS.619 & 620 AYS 2004-05 & 2006-07 SMT ARATIRAJU (INDL); & V. ITA NOS.621 & 622 AYS 2004-05 & 2006-07 SRI BHASKARRAJU (INDL): ITA NOS.611 TO 622 P SHYAMARAJU BANGALORE PAGE 3 OF 8 3. THE REVENUE HAS ALSO, IN ITS MEMOR ANDUM OF APPEALS, RAISED AN IDENTICAL SOLITARY ISSUE IN ALL THE APPEALS, NAMELY, THAT THE CIT (A) OUGHT TO HAVE CONFIRMED THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT AS THERE HA S BEEN CATEGORICAL CONCEALMENT OF INCOME WHICH IS IN NO WA Y CONNECTED WITH THE ISSUE OF JOINT WARRANT. 4. AS THE ISSUES RAISED IN THESE APPE ALS BEING IDENTICAL AND PERTAINING TO THE SAME GROUP, FOR THE SAKE OF C ONVENIENCE AND BREVITY, THEY WERE HEARD AND CONSIDERED TOGETHE R AND DISPOSED OF IN THIS CONSOLIDATED ORDER. 5. BRIEFLY STATED, THE FACTS OF THE ISS UES ARE AS UNDER: THERE WAS A SEARCH AND SEIZURE OPERA TION IN THE PREMISES OF SHYAMRAJU GROUP ON 1.3.2007 AND ON SUBS EQUENT DATES. CONSEQUENTLY, IN COMPLIANCE TO THE NOTICES U/S 153A OF THE ACT DATED 14.11.2007, RETURNS OF INCOME WAS FUR NISHED FOR THE RELEVANT ASSESSMENT YEARS. THE AO HAD, FOR THE RELEVANT ASSESSMENT YEARS [AYS 2004.05 TO 2006-07] UNDER DIS PUTE, PASSED ORDERS U/S 143(3) R.W.S. S. 153A OF THE ACT DT 31.12.2008 BY MAKING CERTAIN ADDITIONS. AGGRIEVED, THE ASSESS EE PREFERRED APPEALS BEFORE THE CIT (A). THE THEN CIT (A)-VI, B ANGALORE HAD PASSED A COMMON ORDER DATED 11.2.2010 [IN ITA NOS.5 13, 514 & 515] IN ALLOWING THE APPEALS IN PART, THEREBY GIVIN G CERTAIN DIRECTIONS TO THE AO. ACCORDINGLY, THE AO PASSED O RDERS BY GIVING EFFECT TO THE CIT (A)S DIRECTIONS (SUPRA). AGGRIEVED, THE ASSESSEE HAD AGAIN APPROACHED THE CIT (A) FOR RELIE F. IN THE MEANWHILE, THE QUANTUM APPEALS AGAINST THE ORIGINAL LY FRAMED ASSESSMENT ORDERS U/S 143 (3) R.W.S. 153A OF THE AC T, DATED 31.12.2008 FOR THE SAID ASSESSMENT YEARS CAME UP FO R CONSIDERATION BEFORE THE EARLIER BENCH OF THIS TRIB UNAL WITH ITA NOS.611 TO 622 P SHYAMARAJU BANGALORE PAGE 4 OF 8 REGARD TO THE ISSUANCE OF JOINT WARRANT. AFTER H AVING CONSIDERED THE ASSESSEES CONTENTIONS AS WELL AS THE PERUSAL O F THE RELEVANT JOINT WARRANT ISSUED BY THE REVENUE, THE BENCH ST RUCK DOWN THE ASSESSMENT ORDERS DATED 31.12.2008 FOR THE AYS 2004 -05 TO 2006-07 AS NOT MAINTAINABLE AND ALSO DISMISSED THE REVENUES APPEALS. 5.1 THE ASSESSEES APPEALS AGAINST THE ORDERS OF AO GIVING EFFECT TO THE ORDERS OF THE THEN CIT (A) CAME UP FO R CONSIDERATION BEFORE THE PRESENT CIT (A). AFTER TAKING INTO ACCO UNT THE CONTENTIONS PUT-FORTH BY THE ASSESSEE AS WELL AS IN CONFORMITY WITH THE FINDINGS OF THE EARLIER BENCH OF THIS TRIB UNAL IN RESPECT OF ISSUANCE OF JOINT WARRANT (SUPRA) AND THE JUDG MENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T V. P.J. KUMAR, THE CIT (A) HAD TREATED THE ASSESSEES APPEA LS AS INFRUCTUOUS FOR THE FOLLOWING REASONS: 8. IN THE PRESENT CASE, THE ASSESSMENTS IN THE CAS E OF SRI P SHYMARAJU (HAS) HAVE ALREADY BEEN ANNULLED BY HONBLE ITAT FOR THE RELEVANT ASSESSMENT YEARS 2004 - 05, 2005-06 AND 2006-07. THE LEGAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. SINCE THE ORIGI NAL ASSESSMENT ORDERS IN THIS CASE HAS BEEN ANNULLED BY THE HONBLE ITAT VIDE ITS ORDER DATED 06.01.2012 IN ITA NOS.504, 505 & 507, THE PRESENT APPEAL IN ITA NOS. 98, 99 & 100/CIT (A)-VI/BANGALORE/2011 IN THESE YEARS ARE THUS NOT MAINTAINABLE AND, ACCORDINGLY, BECOMES INFRUCTUOUS. THEREFORE, THE APPEALS ARE TREATED AS INFRUCTUOUS. 6. WITH REGARD TO THE LEVY OF PENALTI ES U/S 271(1)(C) OF THE ACT IN THE CASES OF (I) P SHYMARAJU [A.YS. 2004 -05 TO 2006- 07], (II) SRI BHASKAR RAJU (AYS 2004-05 & 06-07), ( III) SRI UMESH RAJU [AYS. 2004-05 & 06-07] AND (IV) SMT. ARATHI R AJU [AYS 2004-05 & 06-07], THE COMMON FACTS, IN BRIEF, ARE A S UNDER: ITA NOS.611 TO 622 P SHYAMARAJU BANGALORE PAGE 5 OF 8 6.1. LEVY OF PENALTIES U/S 271(1)(C) OF THE ACT IN THE CASES OF THE ASSESSEES AND THE ASSESSMENT YEARS MENTIONE D SUPRA, EMANATED, CONSEQUENT OF THE ASSESSMENTS FRAMED BY T HE AO VIDE HIS ORDERS DATED 31.12.2008. WHEN THE QUANTUM APPE ALS WERE CONSIDERED BY THE EARLIER BENCH OF THIS TRIBUNAL FO R ADJUDICATION, THE BENCH HAD RULED VIDE ITS COMMON ORDER DATED 6.1 .2012 (SUPRA) THAT THE ASSESSMENTS MADE FOR THE AYS 2004- 05 TO 2006- 07 BASED ON A JOINT WARRANT WERE NOT MAINTAINABL E AND, ACCORDINGLY, ANNULLED. IN THE MEANWHILE, THE AO, BA SED ON THE ASSESSMENT ORDERS DATED 31.12.2008, HAD LEVIED PENA LTIES U/S 271(1) (C) OF THE ACT IN THOSE ASSESSEES FOR THE AS SESSMENT YEARS UNDER DISPUTE. AGGRIEVED, THE ASSESSEES TOOK UP TH E ISSUES BEFORE THE CIT (A). THE CIT (A) HAD, AFTER HAVING CONSIDERED THE ASSESSEES SUBMISSIONS AND ALSO FINDING OF THE EARL IER BENCH OF THIS TRIBUNAL ON THE ASSESSEES QUANTUM APPEALS, AL LOWED THE ASSESSEES APPEALS IN HER COMBINED ORDER FOR THE FO LLOWING REASONS: 6. IN THE PRESENT CASE, THE ASSESSMENTS IN THE CA SE OF SRI P SHYAMARAJU, SRI UMESH RAJU, SRI BHASKAR RAJU & SMT ARATHI RAJU HAS BEEN DISPOSED AND ANNULLED BY T HE HONBLE ITAT VIDE ORDER DATED 6.1.2012. IN THE LIG HT OF THE ABOVE AND IN PURSUANCE OF ITATS ORDER, THE ORD ERS U/S 143 R.W.S. 250 FRAMED LATER HAS BEEN ANNULLED A S NON-MAINTAINABLE BY ME VIDE ORDER DATED 29.2.2012. THE PRESENT APPEALS AGAINST PENALTY ORDERS U/S 271(1)(C) DATED 29.03.2011 WHICH EMANATES FROM THE ORIGINAL ASSESSMENT ORDER DATED 31.12.2008 U/S 143( 3) R.W.S. 153A AND U/S 143(3) R.W.S. 250 DATED 25.6.20 10 HAS BEEN ANNULLED AND TREATED AS INFRUCTUOUS. THEREFORE, THE PRESENT APPEALS ALSO BECOME INFRUCTU OUS AND, THEREFORE, THESE APPEALS ARE NON-MAINTAINABLE AND INFRUCTUOUS. 7. AGGRIEVED, THE REVENUE HAS CO ME UP BEFORE US WITH THE PRESENT APPEALS. DURING THE COURSE OF HEAR ING, THE ITA NOS.611 TO 622 P SHYAMARAJU BANGALORE PAGE 6 OF 8 LEARNED DR SUBMITTED THAT THE HONBLE EARLIER BENCH OF THIS TRIBUNAL HAD ANNULLED THE ASSESSMENT ORDERS PASSED IN THE SAME GROUP ON THE GROUND THAT THE WARRANT ISSUED IN JOIN T NAMES WAS NOT LEGAL BY RELYING ON THE JUDGMENT OF THE HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF SMT VANDANA VERMA AND ALSO ON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF P.J. KUMAR ON THE ISSUE OF JOINT WARRANT. IT WAS, FURTHER, SUBMITTED THAT THE CIT (A), FOLLOWING THE FINDINGS OF THE HONBLE TRIBUNAL (SUPRA) ALSO ANNULLED THE ORDERS PASSED BY THE AO SOLELY ON THE GROUND THAT SEARCH CONDUCTED BASED ON A JOINT WARRANT WAS ILLEGAL AND, AS SUCH, ASSESSMENT ORDERS PASSED CONSEQUENT TO SEARCH WAS AB INITIO VOID. THE LEARN ED DR HAD, FURTHER, ARGUED THAT WHILE ANNULLING THE ASSESSMENT ORDERS NEITHER THE HONBLE TRIBUNAL NOR THE CIT (A) CONSID ERED THE ISSUES ON MERIT WITH REGARD TO THE ADDITIONS MADE I N THE ASSESSMENT ORDERS. IT WAS SUBMITTED BY THE DR THAT BEING AGGRIEVED WITH THE FINDINGS OF THE HONBLE TRIBUNAL IN THE ABOVE MENTIONED CASES; THE DEPARTMENT HAS ALSO FILED APPE ALS BEFORE THE HONBLE JURISDICTIONAL HIGH COURT WHICH ARE STI LL PENDING. THE LEARNED DR HAD, FURTHER, SUBMITTED THAT THE DEP ARTMENT HAS ALSO FILED AN SLP BEFORE THE HONBLE SUPREME COURT IN THE CASE OF P.J. KUMAR AGAINST THE JUDGMENT OF THE HONBLE JURI SDICTIONAL HIGH COURT ON THE ISSUE OF A JOINT WARRANT. IN CON CLUSION, IT WAS PLEADED THAT IN VIEW OF THE RETROSPECTIVE EFFECT TO AMENDMENT TO SECTION 292CC OF THE ACT (W.E.F. 1.4.1976), THE ISS UES RAISED BY THE DEPARTMENT REQUIRE TO BE DECIDED IN ITS FAVOUR. 7.1. ON THE OTHER HAND, THE LEARN ED AR SUPPORTED THE FINDINGS OF THE (I) THE CIT (A), (II) THE HONBLE E ARLIER BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASES AND (III) THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF P. J. KUMAR ITA NOS.611 TO 622 P SHYAMARAJU BANGALORE PAGE 7 OF 8 (SUPRA). IN VIEW OF THE ABOVE, IT WAS PLEADED THAT THE APPEALS PREFERRED BY THE REVENUE IN RESPECT OF QUANTUM AS W ELL AS PENALTY APPEALS REQUIRE TO BE DISMISSED. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE RELEVANT MATERIALS ON RECORD AND ALSO T HE FINDINGS OF THE CIT (A) ON THE ISSUE. AT THE OUTSET, WE WOULD LIKE TO POINT OUT THAT THE EARLIER BENCH OF THIS TRIBUNAL HAD ANNULLE D THE ORIGINAL ASSESSMENTS MADE U/S 143(3) R.W.S. 153A OF THE ACT DATED 31.12.2008 AND, THUS, THE AOS ORDERS GIVING EFFECT TO THE THEN CIT (A)S ORDER ARE NOT MAINTAINABLE SINCE THE QUAN TUM APPEALS BASED ON THE ORIGINAL ASSESSMENT ORDERS DATED 31.12 .2008 HAVE SINCE BEEN KNOCKED DOWN BY THE TRIBUNAL (SUPRA). T HEREFORE, THE PRESENT CIT (A) WAS JUSTIFIED IN COMING TO A CONCLU SION THAT THE APPEALS PREFERRED BY THE ASSESSEE AGAINST THE ORDER S OF THE AO GIVING EFFECT TO THE THEN CIT (A)S ORDER WERE NOT MAINTAINABLE. 8.1. LIKEWISE, THE CIT (A) WAS ALSO JUS TIFIED IN TREATING THE ASSESSEES APPEALS AS INFRUCTUOUS AGAINST THE PENA LTY ORDERS PASSED BY THE AO U/S 271(1)(C) OF THE ACT DATED 29. 3.2011 WHICH EMANATED FROM THE ORIGINAL ASSESSMENT ORDERS DATED 31.12.2008 SINCE THEY HAVE BEEN ANNULLED BY THE EARLIER BENCH OF THIS TRIBUNAL. NEEDLESS TO MENTION, SINCE THE REVENUE HA S FILED APPEALS BEFORE THE HONBLE JURISDICTIONAL HIGH COUR T AGAINST THE FINDINGS OF THE EARLIER BENCH OF THIS TRIBUNAL WITH REGARD TO THE ANNULMENT OF ASSESSMENT ORDERS WHICH ARE PENDING FO R DISPOSAL, THE REVENUE SHALL BE AT LIBERTY TO REVIVE THE PRESE NT APPEALS DEPENDING ON THE OUTCOME OF THE JUDGMENT OF THE HON BLE COURT ON THE ISSUE. IN SUBSTANCE, THE DEPARTMENTS PRESEN T APPEALS, AGGREGATING TO TWELVE, ARE TREATED AS INFRUCTUOUS. ITA NOS.611 TO 622 P SHYAMARAJU BANGALORE PAGE 8 OF 8 9. IN THE RESULT, REVENUES APPEAL S IN ITA NOS.611 TO 622 ARE TREATED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL, 2014. SD/- SD/- (JASON P. BOAZ) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE DATED 30 TH APRIL, 2014. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCHES, BANGALORE