Mrs Kunjamma Varkey, Angamally V. ACIT, Ernakulam

ITA 628/COCH/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52220 (ITAT-COCHIN)
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 26-07-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 22-11-2010
• Court: TRIBUNAL
• Department Lawyers: S C SONKAR
• Assessee Lawyers: K P PAULSON CAAR
• Keywords: Question of law; Documents seized
• Section: 153A; 15

Judgement Text

IN THE INCOME TAX APPELLAT E TRIBUNAL COCHIN BEN CH, COCHIN BEFORE S/SHRI N.VIJAYAKUMARAN, JM AND SANJAY AR ORA, AM I.T.A. NOS. 624-629/COCH/2010 ASSESSMENT YEARS: 2001-02 TO 2006-07 MRS. KUNJAMMA VARKEY, PYNADATH HOUSE, NAYATHODE P.O., ANGAMALY. [PAN: ABKPV 8543J] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. (ASSESSEE-APPELLANT) (REVENUE-RESP ONDENT) ASSESSEE BY SHRI K.P. PAULSON, CA-AR REVENUE BY SHRI S.C.SONKAR, CIT-DR DATE OF HEARING 28/07/2011 DATE OF PRONOUNCEMENT 26/08/2011 O R D E R PER SANJAY ARORA, AM: THESE ARE A SET OF SIX APPEALS BY THE ASSESSEE FOR SIX CONSECUTIVE YEARS, I.E., A.Y. 2001-02 TO 2006-07, AGITATING THE SEPARATE ORDERS P ASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, KOCHI (CIT(A) FOR SHORT) FOR EACH YEAR. AS THE APPEALS RAISE COMMON ISSUES, THESE WERE HEARD TOGETHER, AND ARE B EING DISPOSED OF BY A COMMON, CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ASSESSEE HAS RAISED THREE LEGAL GROUNDS, I.E ., APART FROM ASSAILING THE ADDITIONS MADE ON MERITS, CHALLENGING THE VALIDITY OF THE IMP UGNED ASSESSMENTS. WE SHALL TAKE UP THE SAME FIRST, AS, IF THE ASSESSEE SUCCEEDS THEREO N, THE ASSESSMENTS WOULD NO LONGER HOLD, BEING BAD IN LAW, SO THAT THE QUESTION OR OCCASION OF ADJUDICATION ON THE MERITS OF THE ADDITIONS MADE ON ASSESSMENT WOULD NOT ARISE FOR CO NSIDERATION. I.T.A. NOS. 624-629 /COCH/2010 ( ASSTT. YEARS 2001-02 TO 2006-07) 2 3. VIDE HER FIRST LEGAL OBJECTION (GROUND # 3 OF TH E CONCISE AND AMENDED GROUNDS OF APPEAL), THE ASSESSEE IMPUGNS THE ASSESSMENTS ON TH E GROUND THAT THE SEARCH IS ILLEGAL. THE LD. CIT(A) FOUND THE SAME AS NOT MAINTAINABLE A S THE ASSESSEE HAD NOT BROUGHT FORTH ANY MATERIAL TO ESTABLISH THE ILLEGALITY OF THE SEA RCH AND, CONSEQUENTLY, THE ASSESSMENT/S FRAMED PURSUANT THERETO. TWO, EVEN SO, S. 246A DOE S NOT PROVIDE FOR AN APPEAL DISPUTING THE VALIDITY OF A SEARCH, CITING THE DECISIONS IN T HE CASE OF LAL M.B. VS. CIT , 279 ITR 298 (DEL.) AND PROMAIN LTD. VS. DY. CIT , 281 ITR (AT) 107 (DEL.) (SB) IN SUPPORT. THE ASSESSEE BEFORE US HAS, THOUGH RAISED THE SAID GROU ND, NOT ASSAILED THE APPELLATE ORDER IN ANY MANNER, EITHER ON FACTS OR IN LAW. IT IS WELL- SETTLED THAT THE TRIBUNAL - AN APPELLATE AUTHORITY UNDER THE ACT, ITS POWERS ARE LIMITED TO THAT PROVIDED THEREBY, SO THAT IT CANNOT DECIDE ON THE ILLEGALITY OF A SEARCH U/S. 132 OF TH E ACT, EVEN AS NO MATERIAL TOWARD THE SAME HAS BEEN BROUGHT ON RECORD (ALSO REFER TRILOK SINGH DHILLON VS. CIT , 332 ITR 185 (CHHATTISGARH); CIT VS. PARAS RICE MILLS, 313 ITR 182 (P&H); AND GAYA PRASAD PATHAK VS. CIT (ASST.) , 290 ITR 128 (MP). THE ASSESSEES SAID GROUND/S I S WITHOUT MERIT AND, ACCORDINGLY, DISMISSED. 4.1 THE SECOND LEGAL ISSUE CHALLENGES THE ASSUMPTIO N OF JURISDICTION U/S. 153C OF THE ACT IN-AS-MUCH AS NO INCRIMINATING MATERIAL BELONGI NG TO THE ASSESSEE, HAS BEEN FOUND, AND, SECONDLY, NO SATISFACTION RECORDED BY THE ASSE SSING OFFICER (AO) IN ITS RESPECT (VIDE GROUND # 7 FOR A.Y. 2001-02, 2002-03, 2005-06 AND 2 006-07, AND GROUND # 8 FOR A.Y. 2003-04 AND 2004-05). THIS GROUND HAS BEEN TAKEN B EFORE THE TRIBUNAL FOR THE FIRST TIME. HOWEVER, IT IS THE LEGAL GROUND, GOING TO THE ROOT OF THE MATTER. AS SUCH, IF THE FACTS NECESSARY FOR DECIDING THE SAME ARE ON RECORD AND, FURTHER, NOT DISPUTED, THE SAME COULD BE ADMITTED AS PER LAW LAID DOWN BY THE APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT (1998) 229 ITR 383 (SC). ON THE OTHER HAND, IF THE RELEVANT FACTS ARE NOT BORNE OUT BY THE RECORD, OR ARE DISPUTED, T HE ISSUE WOULD BECOME A MIXED QUESTION OF LAW AND FACT, WHICH COULD NOT BE ADMITTED AT THI S STAGE. THE QUESTION, THEREFORE, THAT ARISES IS WHETHER ANY MATERIAL, BEING MONEY, BULLIO N, JEWELLERY OR OTHER ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS BELONGING TO THE ASSE SSEE WAS SEIZED IN THE SEARCH UNDER REFERENCE. I.T.A. NOS. 624-629 /COCH/2010 ( ASSTT. YEARS 2001-02 TO 2006-07) 3 4.2 WE HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER FOR EACH OF THE RELEVANT YEARS, INCLUDING FOR A.Y.2007-08 (COPY ON RECORD), DURING THE PREVIOUS YEAR RELEVANT TO WHICH THE RELEVANT SEARCH TOOK PLACE, AND FIND COMPLETE A BSENCE OF ANY REFERENCE TO ANY MATERIALS, MUCH LESS THOSE SPECIFIED IN S. 153C, BE LONGING TO THE ASSESSEE AMONG THAT SEIZED IN SEARCH. THE SAME CONSTITUTES A PREREQUIS ITE INASMUCH AS IT IS ONLY ON THE BASIS THEREOF THAT THE AO DERIVES SANCTION IN LAW TO ISSU E NOTICE U/S. 153A. IN THE INSTANT CASE, THE AO OF THE PERSON SEARCHED, I.E., THE GROUP CASE S OF P.A. KURIAKOSE AND PAULSON VARKEY GROUP, AND THE ASSESSEE - THE CASES BEING C ENTRALISED IS THE SAME, SO THAT THERE WOULD BE NO OCCASION OR NECESSITY FOR BEING HANDED OVER THE SAME BY THE AO OF THE PERSON SEARCHED, I.E., THE ASSESSES AO. YET, THE E XISTENCE OF SUCH MATERIALS, AMONG THOSE SEIZED (AND/OR REQUISITIONED), BELONGING TO THE ASS ESSEE, IS A BASIC CONDITION FOR INITIATING PROCEEDINGS AND ISSUE OF NOTICE U/S. 153A R/W S. 15 3C. AS AFORE-MENTIONED, SURPRISINGLY THOUGH, THERE IS NO MENTION ANYWHERE IN ANY OF THE ASSESSMENT ORDERS FOR EACH OF THE SEVEN YEARS, I.E., 2001-02 TO 2007-08, THAT FOR A.Y . 2007-08 HAVING BEEN SPECIFICALLY CALLED FOR BY THE BENCH. LIKEWISE, IN THE APPELLAT E ORDERS. THE TERMS OF S. 153C ARE CLEAR AND EXPLICIT, AND IT IS ONLY WHERE ANY OF THE SPECI FIED MATERIALS BELONGING TO THE ASSESSEE ARE SUBJECT TO SEIZURE AND/OR REQUISITION THAT THE ASSESSMENT PROCEEDINGS U/S. 153A R/W S. 153C CAN BE INITIATED BY ISSUE OF NOTICE U/S. 153A, THE RELEVANT PART OF WHICH READS AS UNDER:- ASSESSMENT OF INCOME OF ANY OTHER PERSON 153 C. (1)NOTWITHSTANDING ANYTHING CONTAINED IN SEC TION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHE RE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OT HER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIO NED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTIO N 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OT HER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERS ON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A: PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE T O THE DATE OF INITIATION OF THE SEARCH U/S. 132 OR MAKING OF REQUISITION U/S. 132A IN THE SECOND PROVISO TO S. I.T.A. NOS. 624-629 /COCH/2010 ( ASSTT. YEARS 2001-02 TO 2006-07) 4 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE O F RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. 4.3 THE NATURE OF THE ADDITIONS MADE FOR EACH OF THE YE ARS, AND THE MATERIAL/S ON WHICH THE SAME ARE BASED, AGAIN, LEAVES US IN NO MANNER O F ANY DOUBT THAT NO SEIZED BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS BELONGING TO THE AS SESSEE WERE AVAILABLE WITH THE AO; THE ASSESSMENT ORDERS BEING DE HORS ANY REFERENCE THERE TO, ENABLING THE INITIATION OF LEGALLY VALID PROCEEDINGS. WE MAY CLARIFY THAT IT IS NOT THE WANT OF EXPLICIT EXPRESSION OF SATISFACTION (IN THE ASSESSMENT ORDERS), WHICH IS T O BE FIRSTLY, PRIMA FACIE AND, SECONDLY, IS LIABLE TO HAVE SOME ELEMENT OF SUBJECTIVITY, THAT I NFLICTS THE PRESENT PROCEEDINGS. THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. PANJANYAM MANAGEMENT AGENCIES AND SERVICES (2011) 239 CTR 424 (KER.) HAS EXPLAINED THAT THERE IS NO REQUIREMENT OF RECORDING THE SATISFACTION, WHICH IS PRINCIPALLY FO R THE TRANSFER OF THE RELEVANT MATERIALS BY THE AO OF THE PERSON SEARCHED TO THAT OF THE ASSESS EE - WHICH IS NOT APPLICABLE IN THE INSTANT CASE - IN WRITING. BUT, WE MAY REITERATE, THE ABSENCE OF RELEVANT MATERIALS BELONGING TO THE ASSESSEE AND, CONSEQUENTLY, IS A C ASE OF LACK OF JURISDICTION. WE, ACCORDINGLY, UPHOLDING TH ASSESSEES CLAIM, HOLD TH E ASSESSMENTS AS WITHOUT JURISDICTION AND, THUS, BAD IN LAW, RATHER, VOID AB INITIO . THE DECISIONS CITED BY THE ASSESSEE , I.E., P. SRINIVAS NAIK VS. ACIT (2008) 117 ITD 201 (BANG.) AND SINHGAD TECHNICAL EDUCATION SOCIETY VS. ACIT (IN I.T.A. NOS. 114 TO 117/PN/2010 DATED 28.1.2011/ COPY ON RECORD) ARE RELEVANT IN THIS REGARD. WE DECIDE ACCORDINGLY. 5.1 THE THIRD LEGAL GROUND RAISED BY THE ASSESSEE IS THAT THE COMPLETED ASSESSMENTS WOULD NOT ABATE IN THE ABSENCE OF ANY FRESH EVIDENC E BEING FOUND IN THE COURSE OF SEARCH (GROUND # 8 FOR A.Y. 2001-02, 2002-03, 2005-06 AND 2006-07 AND GROUND # 9 FOR A.Y. 2003-04 AND 2004-05). WE CONSIDER THE SAID GROUND/ S AS OF NO CONSEQUENCE. THIS IS AS THE RELEVANT PROVISION, BEING THE SECOND PROVISO TO S.153A, WHICH READS AS UNDER, IS ONLY CONSEQUENTIAL:- I.T.A. NOS. 624-629 /COCH/2010 ( ASSTT. YEARS 2001-02 TO 2006-07) 5 ASSESSMENT IN CASE OF SEARCH OR REQUISITION 153A. (1) . PROVIDED THAT PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS SUB-SECTION PENDING ON THE DATE OF INITIATION OF THE SEARCH U/S. 132 OR MAKING OF REQUISITION U/S. 132A, AS THE CASE MAY BE, SHAL L ABATE. (2) IF ANY PROCEEDING INITIATED OR ANY OR DER OF ASSESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) HAS BEEN ANNULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING, THEN, NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SE CTION (1) OR SECTION 153, THE ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSM ENT YEAR WHICH HAS ABATED UNDER THE SECOND PROVISO TO SUB-SECTION (1), SHALL STAND REVIVED WITH EFFECT FROM THE DATE OF RECEIPT OF THE ORDER OF SUCH ANNULMENT BY THE COMMISSIONER: PROVIDED THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT, IF S UCH ORDER OF ANNULMENT IS SET ASIDE. 5.2 ALL IT STATES IS THAT IN VIEW OF THE ASSUMPTION OF JURISDICTION TO FRAME THE ASSESSMENT/S U/S. 153A FOR THE SIX YEARS PRECEDING THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED (AND/OR REQUISITION MADE), THE ASSESSM ENTS FOR ANY OF THOSE YEARS, IF PENDING ON THE DATE OF INITIATION OF SEARCH (OR THE MAKING OF REQUISITION), SHALL ABATE. THE LAW, THUS, CONTEMPLATES ONLY ONE ASSESSMENT PROCEEDINGS BEFORE THE AO, THEREBY PRECLUDING PARALLEL ASSESSMENTS. AS AFORESAID, THE SAME IS CO NSEQUENTIAL AND NO INDEPENDENT CAUSE OF ACTION AND, ACCORDINGLY, CAUSE OF GRIEVANCE TO T HE ASSESSEE, ARISES. IF THE ASSUMPTION OF JURISDICTION TO FRAME THE ASSESSMENT IN THE INST ANT CASE WERE TO BE HELD AS VALID, THE PENDING ASSESSMENTS HAVE TO, IN TERMS OF THE CLEAR MANDATE OF LAW, ABATE. EVEN ON FACTS, THE ASSESSEE HAS NOT EXHIBITED THE PENDENCY OF ANY ASSESSMENT FOR ANY OF THE ASSESSMENT YEARS UNDER REFERENCE, NOR DOES THE RELEVANT GROUND /S REFER SPECIFICALLY TO ANY ASSESSMENT FOR ANY PARTICULAR YEAR. THE RELEVANT GROUND/S IS W ITHOUT MERIT AND, THEREFORE, DISMISSED. WE DECIDE ACCORDINGLY. I.T.A. NOS. 624-629 /COCH/2010 ( ASSTT. YEARS 2001-02 TO 2006-07) 6 6. WE HAVE FOUND THAT THERE IS NO VALID ASSUMPTION OF JURISDICTION IN THE IMPUGNED SET OF ASSESSMENTS, SO THAT THE SAME STAND ANNULLED . WE, THEREFORE, FIND NO REASON TO DECIDE ON THE MERITS OF THE ADDITIONS SUSTAINED IN FIRST APPEAL, AS AGITATED BEFORE US BY THE ASSESSEE. WE DECIDE ACCORDINGLY. 7. IN THE RESULT, THE ASSESSEES APPEALS ARE ALLOWE D. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 26TH AUGUST, 2011 GJ COPY TO: 1. MRS. KUNJAMMA VARKEY, PYNADATH HOUSE, NAYATHODE P.O., ANGAMALY. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRA L CIRCLE-1, ERNAKULAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, KOCH I. 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE .