M/s. B.U. Bhandari Schemes, Pune V. Pr. Commissioner of Income-tax, Central, Pune

ITA 640/PUN/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2290 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 09-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Assessee Lawyers: V L JAIN
• Keywords: Depreciation; Search and seizure
• Section: 143(3); 153A; 263; 132; 10; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO , AM . / ITA NO S . 637 TO 641 /P U N/201 8 / ASSESSMENT YEAR S : 20 09 - 10 TO 20 1 3 - 1 4 M/S. B.U. BHANDARI SCHEMES, 1182, ABOVE HDFC BANK, FC ROAD, SHIVAJI NAGAR, PUNE 411005 . / APPELLANT P AN: AAGFB6865J VS. THE PR. COMMISS IONER OF INCOME TAX - CENTRAL , PUNE . / RESPONDENT . / ITA NO. 642 /P U N/201 8 / ASSESSMENT YEAR : 2009 - 10 M/S. B.U. BHANDARI ENTERPRISES, 1182, ABOVE HDFC BANK, FC ROAD, SHIVAJI NAGAR, PUNE 411005 . / APPELLANT PAN: AAIFB0139M VS. THE PR. COMMISSIONER OF INCOME TAX - CENTRAL, PUNE . / RESPONDENT . / ITA NO. 643 /P U N/201 8 / ASSESSMENT YEAR : 2009 - 10 M/S. B.U. BHANDARI NANDGUDE PATIL ASSOCIATES, 11 82, ABOVE HDFC BANK, FC ROAD, SHIVAJI NAGAR, PUNE 411005 . / APPELLANT PAN: AAGFB8429C VS. THE PR. COMMISSIONER OF INCOME TAX - CENTRAL, PUNE . / RESPONDENT ITA NO S . 637 TO 643 /P U N/20 1 8 M/S. B.U. BHANDARI SCHEMES AND ORS. 2 ASSESSEE BY : SHRI V.L. JAIN REVENUE BY : S HRI S.B. PRASAD, CIT / DATE OF HEARING : 2 3 . 1 0 .201 8 / DATE OF PRONOUNCEMENT: 14 . 1 1 .201 8 / ORDER PER SUSHMA CHOWLA, J M : THIS BUNCH OF APPEALS FILED BY DIFFERENT ASSESSEE ARE AGAINST RESPECTIVE ORDERS OF PR. CIT - (CEN TRAL), PUNE , DATED 2 8 .0 3 .201 8 & 23.03.2018 RELATING TO DIFFERENT ASSESSMENT YEAR S 2009 - 10 TO 201 3 - 1 4 AGAINST RESPECTIVE ORDERS PASSED UNDER SECTION 263 / 143(3) R.W.S. 153A OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. OUT OF THIS BUNCH OF APPEALS, FIVE APPEALS RELATE TO ONE ASSESSEE AND TWO APPEALS RELATE TO SEPARATE ASSESSEE. 3. THE ISSUE RAISED IN THIS BUNCH OF APPEALS IS SIMILAR, HENCE THEY ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, IN ORDER TO ADJUD ICATE THE ISSUE, WE MAKE REFERENCE TO THE FACTS AND ISSUE IN ITA NO.637/PUN/2018, RELATING TO ASSESSMENT YEAR 2009 - 10. 4. THE ASSESSEE IN ITA NO.637/PUN/2018, RELATING TO ASSESSMENT YEAR 2009 - 10 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED PCIT ERRED IN LAW AND ON FACTS IN ASSUMING JURISDICTION U/S 263 OF THE INCOME TAX ACT, 1961. 2. THE LEARNED PCIT ERRED IN LAW AND ON FACTS IN NOT PASSING A SPEAKING ORDER NEGATING THE CONTENTIONS OF THE APPELLANT. 3. THE LEARNED PCIT ERRED IN SETTING ASI DE THE ASSESSMENT ORDER TO BE FRAMED DE - NOVO AFTER EXAMINATION OF ISSUES WHICH HAVE ALREADY BEEN CONSIDERED BY THE AO. ITA NO S . 637 TO 643 /P U N/20 1 8 M/S. B.U. BHANDARI SCHEMES AND ORS. 3 5. THE ASSESSEE HAS CHALLENGED THE ASSUMPTION OF JURISDICTION BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT BUNCH OF APPEALS IS SQUARELY COVERED BY DIFFERENT ORDERS OF THE PUNE BENCH OF TRIBUNAL. HOWEVER, HE PLACED RELIANCE ON LEAD ORDER IN THE CASE OF DHARIWAL INDUST RIES LIMITED VS. CIT IN ITA NOS.1108 TO 1113/PUN/2014, RELATING TO ASSESSMENT YEARS 2004 - 05 TO 2006 - 07 & 2008 - 09 TO 2010 - 11, ORDER DATED 23.12.2016. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF COMMISSIONER UNDER SECTION 263 OF THE ACT. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. BRIEFLY, IN THE FACTS OF THE CASE, SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED UNDER SECTION 132 OF THE ACT IN THE CASE OF PORWAL, MUTHA, KARIA , AGARWAL AND BHANDARI GROUP OF CASES ON 26.02.2014. FOR THE SAID SEARCH AND SEIZURE OPERATION, WARRANT WAS COMBINELY EXECUTED IN THE CASE OF (I) M/S. B U BHANDARI LANDMARKS, (II) M/S. B U BHANDARI SCHEMES, (III) M/S. B U BHANDARI ENTERPRISES AND (IV) M/S . B U BHANDARI REAL ESTATE AND THE OFFICE PREMISES OF ASSESSEE WAS COVERED. DURING THE COURSE OF SEARCH OPERATIONS, CASH OF 3,05,080/ - WAS FOUND AND SEIZED. THE ASSESSEE HAD ORIGINALLY FILED RETURN OF INCOME ON 19.08.2009 DECLARING INCOME OF 43,73,420/ - . THEREAFTER, CASE OF ASSESSEE WAS TAKEN UP FOR SCRUTINY. THE ASSESSING OFFICER VERIFIED SEIZED MATERIAL AND AFTER EXAMI NATION, CERTAIN QUERIES WERE RAISED, WHICH WERE REPLIED UPON BY THE ASSESSEE AND ASSESSMENT OF ASSESSEE WAS COMPLETED AND RETURNED INCOME WAS ACCEPTED. ORDER WAS PASSED UNDER SECTION 143(3) R.W.S. 153A OF THE ACT. THE ASSESSING OFFICER WHILE PASSING ORDE R CLEARLY RECORDS THAT THIS ORDER IS ITA NO S . 637 TO 643 /P U N/20 1 8 M/S. B.U. BHANDARI SCHEMES AND ORS. 4 PASSED WITH THE PRIOR APPROVAL OF THE JOINT COMMISSIONER OF INCOME TAX, CENTRAL RANGE - 2, PUNE ISSUED UNDER SECTION 153D OF THE INCOME TAX ACT, 1961 VIDE HIS LETTER NO.PN/JT CIT/CR2/ASSESSMENT/2015 - 16/1106 DATED 17/03/20 16. THEREAFTER, THE COMMISSIONER ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE UNDER SECTION 263 OF THE ACT. HE NOTED THAT ORDER WAS PASSED UNDER SECTION 153A R.W.S. 143(3) OF THE ACT. HE HAS RAISED VARIOUS ISSUES AS TO WHY THE ASSESSMENT ORDER PASSED IN THE CASE WAS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. HOWEVER, WE ARE NOT GOING INTO THE SAID ISSUE AS FIRST THE JURISDICTIONAL ISSUE HAS BEEN RAISED IN THE PRESENT APPEAL AS TO WHETHER IN CASE WHERE THE ASSESSMENT HAS BEEN COMPLETED UNDER SECTION 143(3) R.W.S. 153A OF THE ACT AFTER OBTAINING APPROVAL OF ADDITIONAL CIT UNDER SECTION 153D OF THE ACT, CAN THE COMMISSIONER INVOKE HIS REVISIONARY POWERS UNDER SECTION 263 OF THE ACT ON THE GROUND THAT THE ORDERS PASSED BY ASSESSING OFFICER FOR AL L THE YEARS WERE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE PLEA OF ASSESSEE BEFORE US IS THAT ONCE THE ORDER HAS BEEN PASSED BY ASSESSING OFFICER AFTER OBTAINING APPROVAL OF ADDITIONAL CIT UNDER SECTION 153D OF THE ACT, THEN THE COMMISSION ER HAS NO POWER TO EXERCISE HIS JURISDICTION UNDER SECTION 263 OF THE ACT. 8. WE FIND THAT SIMILAR ISSUE OF EXERCISE OF REVISIONARY JURISDICTION BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT IN A CASE WHERE ASSESSMENT WAS COMPLETED UNDER SECTION 143( 3) R.W.S. 153A OF THE ACT AFTER OBTAINING APPROVAL OF ADDITIONAL CIT UNDER SECTION 153D OF THE ACT, AROSE BEFORE THE TRIBUNAL IN BUNCH OF APPEALS IN THE CASE OF DHARIWAL INDUSTRIES LIMITED VS. CIT (SUPRA). THE TRIBUNAL VIDE ORDER DATED 23.12.2016 OBSERVED AS UNDER: - 12. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE LD.CIT AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSES SING OFFICER IN THE INSTANT CASE FOR ALL THE SIX ASSESSMENT YEARS HAS PASSED THE ORDER U/S.153A R.W.S. 143(3) AFTER OBTAINING APPROVAL OF THE ITA NO S . 637 TO 643 /P U N/20 1 8 M/S. B.U. BHANDARI SCHEMES AND ORS. 5 ADDL.CIT U/S.153D OF THE I.T. ACT. WE FIND THE LD.CIT INVOKED HIS REVISIONAL POWERS U/S.263 OF THE I.T. ACT ON THE GROUND THAT THE ORDER PASSED BY THE ASSESSING OFFICER FOR ALL THE YEARS ARE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE SINCE HE HAS FAILED TO DISALLOW THE EXPENDITURE U/S.14A FOR A.YRS. 2004 - 05 TO 2006 - 07 AND FAILED TO DISALLOW THE CLAIM OF DEPRECIATION ON ASSETS OF HYDERABAD UNIT WHICH IS DEFUNCT FOR A.Y.2008 - 09 TO 2010 - 11. 13. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE THE ORDER HAS BEEN PASSED BY THE ASSESSING OFFICER AFTER OBTAINING APPROVAL OF THE ADDL.CIT U/S.15 3D OF THE I.T. ACT, THEREFORE, THE LD.CIT HAS NO POWER TO EXERCISE HIS JURISDICTION U/S.263 OF THE I.T. ACT, 1961. IT IS ALSO HIS SUBMISSION THAT EVEN ON MERIT THE TRIBUNAL HAS DECIDED BOTH THE ISSUES IN FAVOUR OF THE ASSESSEE. 14. WE FIND MERIT IN THE ABO VE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE. WE FIND THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF MEHTAB ALAM VS. ACIT VIDE ITA NOS.288 TO 294/LKW/2014 ORDER DATED 18 - 11 - 2014 WHILE DECIDING AN IDENTICAL ISSUE HAS OBSERVED AS UNDER : 31. BESIDES OTHER JUDGMENTS WERE ALSO REFERRED BY THE ASSESSEE IN THIS REGARD AND WE HAVE ALSO CAREFULLY EXAMINED THE SAME AND WE FIND THAT SIMILAR VIEWS WERE EXPRESSED BY VARIOUS JUDICIAL AUTHORITIES. 32. WE HAVE ALSO EXAMINED THE JUDGMENT OF THE HON'BLE JURISDICTIO NAL HIGH COURT IN THE CASE OF CIT VS. DR. ASHOK KUMAR (SUPRA) ON AN ISSUE WHETHER THE ASSESSMENT ORDER WAS PASSED WITH THE APPROVAL OF THE ADDL. CIT AND THEIR LORDSHIPS HAVE HELD THAT THE ASSESSING OFFICER WAS FULLY ALIVE ABOUT THE FACTS OF THE CASE AND TH AT IS WHY HE GOT NECESSARY APPROVAL OF THE ADDL. CIT BEFORE COMPLETING THE ASSESSMENT ORDERS FOR ALL THE ASSESSMENT YEARS AND ONCE THAT IS NOT DISPUTED BY THE REVENUE, THEN THE LD. COMMISSIONER OF INCOME - TAX WOULD NOT BE JUSTIFIED IN INTERFERING IN THE APP ROVAL ACCORDING BY THE ADDL. CIT FOR FRAMING THE ASSESSMENT ORDER AND THUS THERE WAS NO CASE FOR SETTING ASIDE THE ASSESSMENT ORDER FOR THE ASSESSMENT YEARS IN QUESTION. 14.1 WE FIND THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF CH. KRISHNA MURTHY VS . ACIT VIDE ITA NO.766/HYD/2012 ORDER DATED 13 - 02 - 2015 FOLLOWING THE DECISION OF THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF MEHTAB ALAM (SUPRA) HELD THAT CIT(A) IS NOT JUSTIFIED IN ASSUMING JURISDICTION U/S.263 WHEN THE ORDER HAS BEEN PASSED IN TERM S OF SECTION 153D OF THE ACT. 14.2 WE FIND THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF M/S. TRINITY INFRA VENTURES LTD. (SUPRA) HAD AN OCCASION TO DECIDE AN IDENTICAL ISSUE AND IT HELD THAT THE ASSESSMENT ORDER APPROVED BY THE ADDL.CIT U/S.153D CANN OT BE SUBJECT TO REVISION U/S.263 OF THE I.T. ACT. THE RELEVANT OBSERVATION OF THE TRIBUNAL AT PARA 5.4 OF THE ORDER READS AS UNDER : 5.4. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER SUBMITTED THAT THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 15 3C WAS PASSED AFTER GETTING APPROVAL OF ADDL. CIT UNDER SECTION 153DOF THE I.T. ACT AND THEREFORE SUCH AN ASSESSMENT CANNOT BE REVISED WITHOUT REVISING THE DIRECTIONS OF THE ADDL. CIT UNDER SECTION 153D OF THE I.T. ACT. THE LD. COUNSEL FOR THE ASSESSEE, HA S RELIED UPON THE DECISIONS OF THIS TRIBUNAL IN THE CASE OF CH. KRISHNA MURTHY VS. ACIT, C.C.3, HYDERABAD IN ITA.NO.766/HYD/2012 DATED 13.02.2015 AND ALSO THE DECISION OF LUCKNOW BENCH OF ITAT IN THE CASE OF MEHTAB ALAM 288/LUCK/2014 DATED 18.11.2014 IN SU PPORT OF THIS CONTENTION. HE HAS ALSO PLACED RELIANCE UPON THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. DR. ASHOK KUMAR IN I.T. APPEAL NO. 192 OF 2000 WHEREIN IT ITA NO S . 637 TO 643 /P U N/20 1 8 M/S. B.U. BHANDARI SCHEMES AND ORS. 6 HAS BEEN HELD THAT THE ASSESSMENT ORDER APPROVED BY THE ADDL. CIT UNDER SECTION 153D, CANNOT BE SUBJECTED TO REVISION UNDER SECTION 263OF THE I.T. ACT. IN VIEW OF THE ABOVE DECISION ALSO, WE HOLD THAT THE REVISION ORDER UNDER SECTION 263 OF THE I.T. ACT IS NOT SUSTAINABLE. ACCORDINGLY, WE ALLOW THE GROUNDS OF THE ASSESSEE. 15. SINCE IN THE INSTANT CASE ALSO THE ASSESSING OFFICER HAS PASSED THE ORDER AFTER OBTAINING NECESSARY APPROVAL FROM ADDL.CIT U/S.153D OF THE I.T. ACT, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE - MENTIONED DECISIONS OF THE COORDINATE BENCHES OF THE TRIBUN AL WE ARE OF THE CONSIDERED OPINION THAT THE CIT HAS NO POWER TO REVISE THE ORDER U/S.263 OF THE I.T. ACT IN THE INSTANT CASE SINCE THE SAME HAS BEEN PASSED WITH THE APPROVAL OF THE ADDL.CIT U/S.153D OF THE I.T. ACT. 9. THE ISSUE ARISING BEFORE US IS IDE NTICAL TO THE ISSUE BEFORE THE TRIBUNAL AND FOLLOWING THE SAME PARITY OF REASONING, WE HOLD THAT WHERE THE ASSESSING OFFICER HAD PASSED THE ORDER AFTER OBTAINING NECESSARY APPROVAL FROM ADDITIONAL CIT UNDER SECTION 153D OF THE ACT, THEN THE COMMISSIONER IS PRECLUDED FROM EXERCISING HIS REVISIONARY POWER UNDER SECTION 263 OF THE ACT AND CONSEQUENTLY, ORDER PASSED BY THE COMMISSIONER IS BOTH INVALID AND BAD IN LAW AND THE SAME IS CANCELLED. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS, ALLOWED. 10. THE FACTS AND ISSUE IN ITA NOS.638/PUN/2018 TO 64 2 /PUN/2018 ARE IDENTICAL TO THE FACTS AND ISSUE IN ITA NO.637/PUN/2018 AND OUR DECISION IN ITA NO.637/PUN/2018 SHALL APPLY MUTATIS MUTANDIS TO ITA NOS.638/PUN/2018 TO 64 2 /PUN/2018 . ITA NO.643/UN/2018 M/ S. B.U. BHANDARI NANDGUDE PATIL ASSOCIATES 11. NOW, COMING TO THE APPEAL OF ASSESSEE IN ITA NO.643/PUN/2018, WHERE FACTS ARE SAME EXCEPT THAT THE ORDER HAS BEEN PASSED UNDER SECTION 143(3) R.W.S. 153C OF THE ACT. 12. THE PERUSAL OF ASSESSMENT ORDER REF LECTS THAT THE PROCEEDINGS WERE INITIATED AND COMPLETED BY ASSESSING OFFICER AFTER OBTAINING PRIOR APPROVAL OF ITA NO S . 637 TO 643 /P U N/20 1 8 M/S. B.U. BHANDARI SCHEMES AND ORS. 7 JCIT, CENTRAL RANGE - 2, PUNE UNDER SECTION 153D OF THE ACT VIDE LETTER DATED 17.03.2016. WE HAVE ALREADY DELIBERATED UPON THE SAME ISSUE THOUGH I N RESPECT OF ASSESSMENT COMPLETED UNDER SECTION 143(3) R.W.S. 153A OF THE ACT BUT SIMILAR PROPOSITION WOULD APPLY IN THE PRESENT APPEAL ALSO WHERE THE ASSESSMENT ORDER HAS BEEN PASSED UNDER SECTION 143(3) R.W.S. 153C OF THE ACT, SINCE THE ASSESSMENT ORDER HAD BEEN PASSED BY TAKING APPROVAL OF JCIT AND HENCE, THE EXERCISE OF REVISIONARY POWERS BY THE COMMISSIONER IS BOTH INCORRECT AND INVALID IN LAW. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS, ALLOWED. 13. IN THE RESULT, ALL THE APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON THIS 14 TH D AY OF NOVEMBER , 201 8 . SD/ - SD/ - ( D.KARUNAKARA RAO ) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 14 TH NOVEMBER , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3 . 4 . , , / DR A , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE