Sh. Iqbal Singh, Khanna V. DCIT, Ludhiana

ITA 712/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6833 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 03-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Keywords: Document seized; Validity of assessment; Documents seized
• Section: 143(3); 142(1); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 712/CHD/2016 ASSESSMENT YEAR: 2008-09 SH. IQBAL SINGH VS. DCIT OPP. NEW MEDICINE TRADERS, CENTRAL CIRCLE-I, NAI ABADI, KHANNA LUDHIANA PAN NO. AZAPS3969H (APPELLANT) (RESPONDENT) APPELLANT BY : SH. PARIKSHIT AGGARWAL RESPONDENT BY : SMT. CHANDRAKANTA DATE OF HEARING : 06/09/2017 DATE OF PRONOUNCEMENT : 20/09/2017 ORDER PER DR. B.R.R KUMAR, A.M. THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 21/03/2016 PASSED BY THE CIT(A)-5, LUDHIANA. 2. IN THIS APPEAL ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUNDS: 2. THAT ON LAW, FACTS & CIRCUMSTANCES OF THE CASE, THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE IMPUGNED ASSESSMENT WHI CH WAS FRAMED U/S 153A AFTER INITIATING THE PROCEEDINGS BY ISSUANCE OF NOT ICE U/S 153A EVEN WHEN THE YEAR IN QUESTION WAS THE SEARCH YEAR AND NO ASSESSM ENT COULD HAVE BEEN FRAMED U/S 153A FOR THE SEARCH YEAR. THEREFORE, THE INITIATION AS WELL AS ITS CONTINUATION AND COMPLETION OF PROCEEDINGS U/S 153A IS ILLEGAL AND THE WHOLE PROCEEDINGS DESERVES TO BE QUASHED. 3. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CAS E, THE WORTHY CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF LD. AO IN MAKING ADDITI ON OF RS. 10,00,000/- UNDER THE NON-EXISTENT / SELF CREATED HEAD OF INCOME FROM UN DISCLOSED SOURCES ON ACCOUNT OF SURRENDER MADE BY THE APPELLANT UNDER DU RESS/INVOLUNTARY DURING SEARCH CONDUCTED, EVEN WHEN THERE IS NO EVIDENCE OF UNACCOUNTED / UNDISCLOSED INCOME EMERGING OUT OF SEIZED DOCUMENTS DURING THE COURSE OF SEARCH . 2 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH U/S 13 2 OF THE I.T. ACT WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF SH. IQBAL SINGH AND HIS FAMILY MEMBERS ON 04.10.2007. THE ASSESSEE IS AN INDIVIDUAL AND IS HAVING INCOME UNDER THE HEAD 'INCOME FROM BUSINESS OR PROFESSION'. BESIDES THIS THE ASSESSEE IS ALSO HAVING INCOME UNDER THE HEAD 'INCOME FROM CAPITAL G AINS' AND INTEREST INCOME UNDER THE HEAD 'INCOME FROM OTHER SOURCES'. DURING SEARCH OPERATION, SOME INCRIMINATING DOCUMENTS WERE FOUND & SEIZED. D URING THE ASSESSMENT PROCEEDINGS NOTICE U/S 142(1) READ WITH SECTION 153 A DATED 21.07.08 WAS ISSUED TO THE ASSESSEE BY THE ASSESSING OFFICER. IN RESPON SE TO THE NOTICE, THE ASSESSEE FILED HIS RETURN OF INCOME IN FORM-ITR-4 ON 21.10.0 9 DECLARING INCOME OF RS.90,870/-. SUBSEQUENTLY NOTICE UNDER SECTION 143(2) ALONG WITH QUESTIONNAIRE WAS ISSUED ON THE ASSESSMENT WAS COMPLETED UNDER SECTIO N 142(1) READ WITH SECTION 153A ASSESSING THE TOTAL INCOME AT RS. 10,90,870/- WHICH INCLUDED THE AMOUNT OF RS. 10,00,000/- BEING THE AMOUNT SURRENDERED DURING THE SEARCH AS PER THE STATEMENT RECORDED UNDER SECTION 132(4). THE AO HAS NOT CORRELATED THE SURRENDER IN ANY WAY WITH ANY SEIZED MATERIAL FOUND DURING THE SEARCH. THE BASIS PREMISES OF THE ADDITION WAS THE STATEMENT GIVEN BY THE ASSESSEE DURING THE SEARCH AND THE AFFIDAVIT FILED POST SEARCH PROCEEDI NGS. 4. DURING THE PROCEEDINGS BEFORE THE LD.CIT(A), IT WAS HELD THAT THE ASSESSEE HAS MADE STATEMENT AT THE TIME OF SEARCH OFFERING R S. 10,00,000/- AS ADDITIONAL INCOME FOR THE FINANCIAL YEAR 2007-08 SUBJECTED TO NO PENAL ACTION. THE ADDITION WAS UPHELD BY THE LD. CIT(A) AS THE ASSESS EE HAS AFFIDAVITS ON 28/12/2007 AND 04/10/2007DECLARING THE ADDITIONAL I NCOME. FURTHER THE LD. CIT (A) VIDE PAGE NO. 13 OF THE ORDER HAS DEALT THE ISS UE OF ASSESSMENT UNDER SECTION 153A BUT HAS NOT COMMENTED ON THIS ISSUE. 5. BEFORE US THE ASSESSEE HAS TAKEN UP THE GROUNDS OF VALIDITY OF ASSESSMENT UNDER SECTION 153A FOR THE YEAR OF SEARCH I.E. 2008 -09 AS PER THE GROUND NO. 2 MENTIONED ABOVE. 6. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORDS. THE LD. AR ARGUED THAT ASSESSMENT CANNOT BE COMPLETED UNDER SE CTION 153A IN THE CASE OF SEARCHED PARTY FOR THE SEVENTH YEAR. THE LD. DR ARGUED THAT THE ASSESSMENT IS IN REALITY DONE UNDER SECTION 143(3) AND NOTICE UND ER SECTION 143(3) WAS ALSO 3 ISSUED AND MENTIONING OF SECTION 153A IN THE ASSESS MENT ORDER COULD BE A TYPOGRAPHICAL MISTAKE AND HENCE THE ASSESSMENT IS V ALID. 7. WE CAN GAINFULLY REFER HERE THE PROVISION OF SEC TION 153A IN THIS REGARD AS UNDER: '153A. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SE CTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, IN T HE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF A CCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER T HE 31 ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL - (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANN ER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROV ISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION. 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF S IX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PRE VIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESSEE OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS:' 8. A READING OF THE ABOVE MAKES IT CLEAR THAT SECTI ON 153A MANDATES THE ASSESSING OFFICER TO ASSESS SIX ASSESS MENT YEARS IMMEDIATELY PRECEDING ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED. IN THIS CASE THE SEARCH HAVING BEEN COND UCTED ON 04/10/2007. THE PREVIOUS YEAR OF THE SEARCH HENCE IS 2007-08 AND AS SESSMENT YEAR IS 2008-09 SECTION 153A MANDATES ASSESSMENT OF SIX ASSESSMENT YEARS PRECEDING ASSESSMENT YEAR 2008-09. HENCE ASSESSMENT YEAR 2008 -09 ITSELF COULD NOT BE SUBJECT TO THE ASSESSMENT U/S 153A. HENCE THE ASSES SEE'S CONTENTION HERE IS IN ACCORDANCE WITH LAW. THE ASSESSING OFFICER HAS ALSO ISSUED NOTICE UNDER SECTION 142(1) READ WITH SECTION 153A ON 21/07/2008 WHICH B ELIES THE ARGUMENT OF THE LD. SR. DR THAT THE SECTION MENTIONED IN THE ASSESS MENT ORDER COULD BE A TYPOGRAPHICAL MISTAKE AND ASSESSMENT IS INTENDED TO BE UNDER SECTION 143(3). 9. UPON CAREFUL CONSIDERATION WE FIND OURSELVES IN AGREEMENT WITH THE CONTENTION OF THE ID. COUNSEL OF THE ASSESSEE THAT AS PER THE CLEAR PRESCRIPTION OF SECTION 153A ASSESSMENT YEAR 2008-09 WAS NOT TO BE THE SUBJECT MATTER OF ASSESSMENT U/S. 153A ON THE FACTS OF THE CASE, BASE D UPON THE DATE OF SEARCH. ACCORDINGLY, WE HOLD THAT ASSESSMENT IN THIS CASE U /S 153A IS WITHOUT JURISDICTION AND HENCE NOT UNSUSTAINABLE. SINCE WE ARE QUASHING THE ASSESSMENT ON THE 4 JURISDICTION ITSELF, THE OTHER ISSUES RAISED IN THI S APPEAL ARE NOT BEING ADJUDICATED. ACCORDINGLY, THIS APPEAL FILED BY THE ASSESSEE IS A LLOWED. 10. IN THE RESULT APPEAL OF THE ASSESEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON SD/- SD/- (DIVA SINGH) (DR. B.R .R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20/09/2017 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR