Anshu Gupta, Jaipur V. ACIT, Noida

ITA 6348/DEL/2014

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4800 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 20-11-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATPAL GULATI
• Assessee Lawyers: S L PODDAR
• Keywords: Search and seizure; Validity of assessment
• Section: 143(3); 142(1); 153A; 201; 143(2); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI C BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI G.S.PANNU, PRESIDENT & SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.6348/DEL/2014 ASSESSMENT YEAR : 2010-11 MS. ANSHU GUPTA, F-2, VINAY PATH, KANTI CHAND ROAD, BANI PARK, JAIPUR. PAN-AJTPG0540M VS ACIT, CIRCLE-3, NOIDA. APPELLANT RESPONDENT APPELLANT BY SH. S.L.PODDAR, CA RESPONDENT BY SH. SATPAL GULATI, CIT DR DATE OF HEARING 08.09.2021 DATE OF PRONOUNCEMENT 30 .09.2021 ORDER PER KUL BHARAT, JM : THIS APPEAL FILED BY THE ASSESSEE PERTAINING TO ASS ESSMENT YEAR 2010-11 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-33, NOI DA DATED 29.08.2014. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE ORDER PASSED BY THE LEARNED ASSESSING OFFICER U/S 153A/143(3) OF THE INCOME TAX ACT, 1961 IS VOID AB- INITIO DESERVES TO BE QUASHED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT(A) HAS ERRED IN CONFIRMATION THE TRADING ADDITION OF R S. 73,70,671/- ON ACCOUNT OF DIFFERENCE OF STOCK WITHOUT BRINGING ANY MATERIAL ON RECORD ON THE BASIS OF STATEMENT OF THIRD PERSON U/S 132(4) O F THE INCOME TAX ACT, 1961 WHICH HAS NO EVIDENTIARY VALUE. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT(A) HAS ERRED IN NOT CONSIDERING THE SUBMISSION OF THE ASSESSEE THAT THERE WAS ITA NO.6348/DEL/2014 ASSESSMENT YEAR : 2010-11 PAGE | 2 NO DIFFERENCE IN STOCK AND IT WAS ONLY MISUNDERSTAN DING AS THE BOOKS WERE NOT COMPLETE AT THE TIME OF SEARCH. 4. THAT THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEND OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF H EARING. 2. GROUND NO.1 RAISED BY THE ASSESSEE IS AGAINST TH E LEGALITY OF ASSESSMENT ORDER. 3. FACTS GIVING RISE TO THE PRESENT APPEAL ARE THAT THE ASSESSING OFFICER HAS RECORDED THAT A SEARCH AND SEIZURE OPERATION WAS CO NDUCTED ON 15.09.2009. THE CASE WAS CENTRALIZED VIDE ORDER U/S 127 OF THE INCOME TAX ACT, 1961 (THE ACT) WHICH WAS PASSED BY LD.CIT, JAIPUR-II, JAIPUR DATED 02.11.2011. THEREAFTER, NOTICE U/S 143(2) R.W.S.142(1) OF THE A CT WAS ISSUED. FURTHER, THE ASSESSING OFFICER RECORDED THAT IN RESPONSE TO THE QUESTIONNAIRE, THE ASSESSEE FILED REPLIES, THE SAME WAS PLACED ON RECORD. FURT HER, IT WAS RECORDED BY THE ASSESSING OFFICER THAT IN THE CASE OF THE ASSESSEE , SH. SUBHASH GUPTA, FATHER- IN-LAW OF THE ASSESSEE HAD MADE STATEMENT U/S 132(4 ) OF THE ACT DURING THE COURSE OF SEARCH AND SURRENDERED RS.73,70,671/- ON ACCOUNT OF DIFFERENCE IN STOCK IN THE HANDS OF M/S SALASAR JEWELLERS UNDER T HE PROPRIETORSHIP OF MS. ANSHU GUPTA. HENCE, THE ASSESSING OFFICER MADE AD DITION OF RS.73,70,671/- IN THE HANDS OF THE ASSESSEE, AND COMPUTED THE INCO ME AT RS.75,29,130/- AGAINST THE RETURNED INCOME OF RS.1,58,460/-. FURT HER, THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS U/S 271AAA OF THE ACT. THE ASSESSING OFFICER RECORDED THAT THE IMPUGNED ASSESSMENT ORDER WAS PAS SED WITH THE PRIOR APPROVAL OF LD. ADDL. CIT, CENTRAL RANGE, MEERUT WI THIN THE MEANING OF SECTION ITA NO.6348/DEL/2014 ASSESSMENT YEAR : 2010-11 PAGE | 3 153D OF THE ACT VIDE F.NO.ADDL.CIT/CR/MRT/S&S/153D2 011-12/681 DATED 29.12.2011. 4. AGGRIEVED AGAINST THIS, THE ASSESSEE PREFERRED A PPEAL BEFORE LD.CIT(A) WHO DISMISSED THE APPEAL BY OBSERVING THAT NO OBJEC TION REGARDING ASSESSMENT BEING FRAMED U/S 153A OF THE ACT WAS TAKEN AT THE S TAGE OF ASSESSMENT. 5. AGGRIEVED AGAINST THIS, THE ASSESSEE IS IN APPE AL BEFORE THIS TRIBUNAL. 6. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ASSESSMENT ORDER IS EX FACIE , LEGAL AND NONEST. HE SUBMITTED THAT IN THIS CASE , NO SEARCH ACTION WAS CARRIED OUT. HE SUBMITTED THA T THE STAND OF THE REVENUE IS SELF-CONTRADICTORY AND AGAINST THE FACTS THAT TH E ASSESSMENT AS FRAMED U/S 143(3) OF THE ACT. HE SUBMITTED THAT THE ENTIRE AS SESSMENT ORDER SPEAKS ABOUT SEARCH AND PROVISION OF SECTIONS 153A AND 153D OF T HE ACT. EVEN THE PENALTY PROCEEDINGS ARE EVITABLE U/S 271AAA OF THE ACT. 7. ON THE CONTRARY, LD.CIT DR, SH. SATPAL GULATI VE HEMENTLY OPPOSED THESE SUBMISSIONS AND SUBMITTED THAT IT IS A FACT THAT TH E ASSESSING OFFICER HAS MENTIONED SECTION 153A OF THE ACT BUT IT IS ONLY A MISTAKE. HE TOOK US THROUGH THE REMAND REPORT FILED BEFORE THE LD.CIT(A) WHERE IT HAS BEEN CATEGORICALLY STATED THAT THE ASSESSMENT FOR ASSESSMENT YEAR 201 1-12 WAS COMPLETED U/S 153A WHICH IS BEYOND THE PURVIEW OF SECTION 153A/15 3C OF THE ACT AS THE DATE OF SEARCH WAS 15.09.2009. ACCORDINGLY, SIX PREVIOU S YEARS FROM THE DATE OF SEARCH WERE TO BE COMPLETED U/S 153A/153C AND THE C URRENT YEARS ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS COM PLETED U/S 143(3) OF THE ACT. LD.CIT DR SUBMITTED THAT SECTION 292B OF THE ACT COMES TO THE RESCUE OF ITA NO.6348/DEL/2014 ASSESSMENT YEAR : 2010-11 PAGE | 4 THE REVENUE UNDER THE FACTS AND CIRCUMSTANCES OF TH E PRESENT CASE. HE SUBMITTED THAT IN VIEW OF PROVISION OF SECTION 292B OF THE ACT, THE ASSESSMENT ORDER CANNOT BE ANNULLED. 8. IN RE-JOINDER, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT SECTION 292B OF THE ACT WOULD NOT COME FOR THE RESCUE OF THE REV ENUE AS THE INTENT OF THE ASSESSMENT ORDER IS WITH REGARD TO FRAMING THE ASSE SSMENT U/S 153A OF THE ACT. IT IS NOT THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT, AS SUBMITTED BY LD.CIT DR. HE SUBMITTED THAT LD.CIT(A) HAS CONCEDE D THE FACT THAT NO SEARCH TOOK PLACE IN THE CASE OF THE ASSESSEE. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORDS AND GONE THROUGH THE ORDERS OF THE AUTHO RITIES BELOW. THE DISPUTE IS WITH REGARD TO THE LEGALITY OF THE IMPUGNED ASSE SSMENT ORDER. THEREFORE, FOR THE SAKE OF EFFECTIVE ADJUDICATION, THE RELEVANT CO NTENTS OF IMPUGNED ASSESSMENT ORDER ARE REPRODUCED AS UNDER:- A SEARCH & SEIZURE OPERATION WAS CONDUCTED IN THIS CASE N 15.09.2009. THE CASE WAS CENTRALIZED VIDE ORDER UNDER SECTION 1 27 OF INCOME TAX ACT WHICH WAS PASSED BY LD. COMMISSIONER OF INCOME TAX. JAIPUR II, JAIPUR DATED 02.11.2011. NOTICE U/S 143(2)/142(1) OF INCO ME TAX ACT WAS ISSUED. RETURN OF INCOME WAS E-FILED ON 14.10.2010 DECLARING INCOME OF RS. 1,58,460/-. NOTICE UNDER SECTION 142(1) ALONG W ITH QUESTIONNAIRE WAS ALSO ISSUED. IN RESPONSE ON BEHALF OF ASSESSEE SHR I SUBHASH GUPTA. FATHER IN LAW AND HOLDER OF POWER OF ATTORNEY ATTEN DED FROM TIME TO TIME AND FILED THE DETAILS, WHICH ARE PLACE ON RECORD A ND THE CASE WAS DISCUSSED WITH HIM. 2. IN RESPONSE TO QUESTIONNAIRE, ASSESSEE FILED RE PLY SAME IS PLACED ON RECORD. DURING THE YEAR ASSESSEE HAS SHOWN INCOME F ROM SHREE SALASAR ITA NO.6348/DEL/2014 ASSESSMENT YEAR : 2010-11 PAGE | 5 JEWELLERS. INVESTMENT MADE BY THE ASSESSEE DURING T HE YEAR, CROSS- EXAMINED AND DETAILS THEREOF IS PLACED ON RECORD. A SSESSEE CLAIMED DEDUCTION UNDER CHAPTER VIA OF INCOME TAX ACT. ASSE SSEE HAS ALSO FILED AUDITED BALANCED, P&L A/C, WHICH ARE PLACED ON RECO RD. IN THE CASE OF ASSESSEE, SHRI SUBHASH GUPTA, FATHER IN LAW, MADE S TATEMENT UNDER SECTION 132(4) OF INCOME TAX ACT DURING THE COURSE OF SEARCH AND HAS SURRENDER AMOUNT OF RS. 73,70,671/- ON ACCOUNT OF D IFFERENT IN STOCK IN THE HANDS OF M/S SALASAR JEWELLERS UNDER THE PROPRIETOR SHIP OF ASSESSEE I.E. MRS. ANSHU GUPTA, ADDITION IN THIS REGARD FOR RS.73 ,70,671/- IS BEING MADE IN THIS CURRENT YEAR. ADDITION RS. 73,70,671/- 3. BOOKS OF ACCOUNTS WITH VOUCHERS AND BANKS STATEM ENTS WERE PRODUCED AND TEST CHECKED ON RANDOM BASIS. ASSESSEE HAS MADE CASH SALES FOR WHICH IT WAS SUBMITTED THAT IT IS IN THEIR TRADE TH AT GENERALLY CASH SALES ARE MADE. THE CASH SALES ARE PREVAILING IN THEIR RE GION. ASSESSEE ALSO FILED A WRITE UP FROM SARAFA ASSOCIATION THAT CASH SALES ARE PREVALENT IN THE REGION AND THEY ARE DOING THEIR BUSINESS ON THE BAS IS OF CASH SALES ALTHOUGH PURCHASES ARE MADE IN CHEQUE ONLY. DETAILS THEREOF ARE PLACED ON RECORD. 4. WITH THESE REMARKS TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER : RETURN INCOME : RS.1,58,460/- ADD: AS PER PARA 2 : RS73,70,671/- TOTAL TAXABLE INCOME : RS.75,29,131/- OR RS.75,29,130/- ASSESSED. ISSUED DEMAND NOTICE AND CHALLAN. GIVE C REDIT TO PREPAID TAXES. CHARGE INTEREST ACCORDINGLY. PENALTY PROCE EDINGS UNDER SECTION 271AAA OF INCOME TAX ACT IS BEING INITIATED SEPARAT ELY. I AM SATISFIED THAT THIS IS A FIT CASE FOR INITIATION OF PENALTY UNDER SECTION 271AAA OF INCOME TAX ACT. ITA NO.6348/DEL/2014 ASSESSMENT YEAR : 2010-11 PAGE | 6 THIS ORDER IS PASSED WITH THE PRIOR APPROVAL OF ADD L.CIT, CENTRAL RANGE, MEERUT WITH IN THE MEANING OF SECTION 153D OF INCOM E TAX ACT VIDE F.NO.ADDL.CIT/CR/MRT/S&S/153D2011-12/681 DATED 29 TH DEC, 2011. 10. FROM THE ASSESSMENT ORDER, IT IS CLEAR THAT SAM E HAS BEEN FRAMED U/S 153A R.W.S 143(3) OF THE ACT. IT IS ALSO EVIDENT F ROM THE ASSESSMENT ORDER THAT IT SPEAKS OF SEARCH AND SEIZURE OPERATION WAS CARRI ED OUT ON 15.09.2009. IT FURTHER STATES THAT THE ASSESSMENT ORDER WAS PASSED IN THE PRIOR APPROVAL OF LD. ADDL. CIT, CENTRAL RANGE, MEERUT WITHIN THE MEA NING OF SECTION 153D OF THE ACT VIDE F.NO. ADDL.CIT/CR/MRT/S&S/153D2011-12/681 DATED 29.12.2011. THESE FACTS ARE NOT DISPUTED BY THE REVENUE. THE O NLY SUBMISSION BY LD.CIT DR IS THAT THESE ARE MISTAKES WHICH WOULD FALL WITH IN THE AMBIT OF SECTION 292B OF THE ACT. FOR THE SAKE OF CLARITY AND FOR R EADY-REFERENCE, THE PROVISION OF SECTION 292B OF THE ACT IS REPRODUCED HEREUNDER: - RETURN OF INCOME, ETC., NOT TO BE INVALID ON CERTAI N GROUNDS. 292B. NO RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING, FURNISHED OR MADE OR ISSUED OR TAKEN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUA NCE OF ANY OF THE PROVISIONS OF THIS ACT SHALL BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEE DING IF SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEE DING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE I NTENT AND PURPOSE OF THIS ACT. 11. THE AFORESAID PROVISION SPEAKS ABOUT NO RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING, FURNISHED OR M ADE OR ISSUED OR TAKEN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSUED OR TAKEN IN PURSUANCE OF ITA NO.6348/DEL/2014 ASSESSMENT YEAR : 2010-11 PAGE | 7 ANY OF THE PROVISIONS OF THIS ACT SHALL BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IF SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING IS IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURP OSE OF THIS ACT. 12. LOOKING TO THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS CONSCIOUSLY MADE ASSESSMENT U/S 153A OF THE ACT AND ON THE BASI S OF ALLEGED STATEMENT RECORDED DURING THE SEARCH. THEREFORE, IT CANNOT B E CONSTRUED THAT RECORDINGS OF SUCH FACTS IS BY MISTAKE. THEREFORE, THE IMPUGN ED ASSESSMENT ORDER DO NOT SATISFY THE TEST OF LAW, THE SAME DESERVES TO BE QU ASHED. WE, THEREFORE, HEREBY QUASH THE IMPUGNED ASSESSMENT ORDER. THUS, GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED. 13. GROUND NOS. 2 & 3 RAISED BY THE ASSESSEE ARE ON MERIT OF THE CASE. SINCE WE HAVE QUASHED THE ASSESSMENT ORDER, THESE GROUNDS HAVE BECOME OF ACADEMIC INTEREST ONLY HENCE, ARE NOT BEING ADJUDIC ATED. 14. GROUND NO.4 RAISED BY THE ASSESSEE IS GENERAL I N NATURE, NEEDS NO SEPARATE ADJUDICATION. 15. IN THE RESULT, THE APPEAL OF THE ASSESSE IS PAR TLY ALLOWED. ABOVE DECISION WAS PRONOUNCED ON CONCLUSION OF VIRT UAL HEARING IN THE PRESENCE OF BOTH THE PARTIES ON 30 TH SEPTEMBER, 2021. SD/- SD/- (G.S.PANNU) (KUL BHARAT) PRESIDENT JUDICIAL MEMBER ITA NO.6348/DEL/2014 ASSESSMENT YEAR : 2010-11 PAGE | 8 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI