ITO 2(3)(2), MUMBAI V. SHAH PRATAP INDUSTRIES P.LTD, MUMBAI

ITA 7448/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9770 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 05-07-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 19-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Keywords: Opportunity of being heard; Tax effect
• Section: 132

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 7448 /MUM/ 2016 (ASSESSMENT YEAR 20 06 - 07 ) I.T.A. NO. 7449/MUM/2016 (ASSESSMENT YEAR 2007 - 08) I.T.A. NO. 7450/MUM/2016 (ASSESSMENT YEAR 2008 - 09) ITO 2(3 )(2) ROOM NO. 581A AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. VS. M/S. SHAH PRATAP INDUSTRIES PRIVATE LTD. 16, GUNDECHA CHAMBERS NAGINDAS MASTER ROAD FORT, MUMBAI - 400 023. PAN : AAACS5494D ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI AKASH KUMAR DEP ARTMENT BY SHRI RAM TIWARI DATE OF HEARING 1 9 .9. 201 7 DATE OF PRONOUNCEMENT 19 . 9 . 201 7 O R D E R ALL THE THREE APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LEARNED CIT(A) - 50, MUMBAI AND THEY RELATE TO A.YS. 2006 - 07 TO 2008 - 09. 2. THE APPEAL FILED BY THE REVENUE FOR A.Y. 2006 - 07 RELATES TO ADDITION OF ` 5.58 LAKHS MADE BY THE ASSESSING OFFICER. LEARNED AR SUBMITTED THAT THE TAX EFFECT INVOLVED IN THIS APPEAL IS LESS THAN ` 10 LAKHS AND HENCE THE REVENUE IS PRECLUDED FROM PURSUING THIS APPEAL AS PER INSTRUCTION NO. 21/2015 DATED 10.12.2015 ISSUED BY CBDT. LEARNED AR SUBMITTED THAT THE DIVISION BENCH OF THE ITAT IN THE CASE OF A GROUP CONCERN OF THE ASSESSEE NAMED M/S. I.A & I.C PVT. LTD. (ITA NOS. 7482/MUM/2016 DATE D 13.7.2017) HAS DISMISSED THE APPEAL FILED BY THE REVENUE ON IDENTICAL REASONS. 3. LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT CONTROVERT THE SUBMISSIONS MADE BY LEARNED AR. M/S. SHAH PRATAP INDUSTRIES PRIVATE LTD. 2 4. IN VIEW OF THE SUBMISSIONS OF LEARNED AR, I DISMISS THE APPEAL FILED BY THE REVENUE FOR A.Y. 2006 - 07, SINCE THE TAX EFFECT INVOLVED IS LESS THAN ` 10 LAKHS. 5. WITH REGARD TO THE APPEALS FILED FOR A.YS. 2007 - 08 & 2008 - 09 LEARNED AR SUBMITTED THAT BOTH THE ASSESSMENTS FALL UNDER THE CATEGORY OF UNABATED ASSESS M ENTS AND THE ASSESSI NG OFFICER HAS MADE IMPUGNED ADDITIONS WITHOUT MAKING REFERENCE TO ANY OF THE INCRIMINATING MATERIAL. HE SUBMITTED THAT THE AO COULD MAKE ADDITION IN THE CASE OF UNABATED ASSESSMENTS ONLY ON THE BASIS OF INCRIMINATING MATERIALS FOUND DURING THE COURSE OF S EARCH. LEARNED AR FURTHER SUBMITTED THAT IDENTICAL ISSUE WAS CONSIDERED BY THE DIVISION BENCH IN THE CASE OF SISTER CONCERNS OF THE ASSESSEE NAMED M/S. I.A & I.C PVT. LTD. (ITA NOS. 7481/MUM/2016 AND OTHERS), AND THE TRIBUNAL VIDE ITS ORDER DATED 30.8.2007 , RESTORED THE MATTER TO THE FILE OF THE LEARNED CIT(A) WITH THE DIRECTION TO FOLLOW THE DECISION RENDERED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORPORATION (374 ITR 645) 6. I HEARD LEARNED DEPARTMENTAL REPRESENTATIVE . I NOTICED THAT THE DIVISION BENCH OF THE TRIBUNAL HAS RESTORED AN IDENTICAL ISSUE TO THE FILE OF THE LD CIT(A) WITH FOLLOWING OBSERVATIONS: - 7. WE HAVE HEARD THE AUTHORISED REPRESENTATIVES FOR BOTH THE PAR TIES, PERUSED THE ORDERS OF THE LOWER AUTHORITI ES AND THE MATERIAL AVAILABLE ON RECORD. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND ARE NOT IMPRESSED BY THE MANNER IN WHICH THE CIT(A) HAD PROCEEDED WITH AND DISPOSED OF THE APPEAL OF THE ASSESSEE. WE FIND THAT IT REMAINS AS A M ATTER OF FACT THAT THE CASE RECORDS OF THE ASSESSEE AS WERE THERE BEFORE THE CIT(A), AS CONCEDED BY THE LATTER, WERE FOUND TO HE INCOMPLETE. WE ARE UNABLE TO COMPREHEND THAT AS TO HOW THE CIT(A) IN THE ABSENCE OF COMPLETE RECORDS HAD CONCLUDED THAT NO INCR IMINATING MATERIAL BELONGING TO THE ASSESSEE WAS FOUND AND SEIZED DURING THE COURSE OF THE SEARCH & SEIZURE PROCEEDINGS CONDUCTED UNDER SEC. 132 ON M/S 31K INDUSTRIES LTD AND ITS PROMOTER SHRI R.G. PARIKH. WE ALSO FIND IT BEYOND OUR COMPREHENSION THAT IN T HE ABSENCE OF THE COMPLETE RECORDS HOW THE CIT(A) HAD OBSERVED THAT THE ASSESSMENT IN THE CASE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2007 - 08 WAS UNABATED. WE M/S. SHAH PRATAP INDUSTRIES PRIVATE LTD. 3 ARE OF THE CONSIDERED VIEW THAT A CORRECT FACTUAL POSITION IN CONTEXT OF THE AFORESAID ISSUES NOT ONLY HAD A MATERIAL BEARING, BUT RATHER WAS INDISPENSABLY REQUIRED FOR FAIR ADJUDICATION ON THE VALIDITY OF THE ASSUMPTION OF JURISDICTION BY THE A.O UNDER SEC. 153C IN THE CASE OF THE ASSESSEE. WE ARE UNABLE TO PERSUADE OURSELVES TO BE IN AGREEMENT WITH THE AFORESAID VIEW ARRIVED AT BY THE CIT(A) IN RESPECT OF THE VALIDITY OF THE ASSUMPTION OF JURISDICTION BY THE A.O UNDER SEC. 153C ON THE AFORESAID COUNT, AS THE SAME CAN SAFELY BE HELD TO HAVE BEEN ARRIVED AT BY THE CIT(A) ON THE BAS IS OF AN HALF HEARTED APPROACH ADOPTED BY HIM WHILE RECORDING THE FACTS ON THE BASIS OF INCOMPLETE RECORDS. WE FURTHER FIND THAT EVEN OTHERWISE THE AFORESAID OBSERVATIONS OF THE CIT(A) THAT NO INCRIMINATING MATERIAL WAS SEIZED DURING THE COURSE OF SEARCH & SEIZURE PROCEEDINGS CONDUCTED ON M/S JI K INDUS TRIES LTD AND ITS PROMOTER SHRI R.G. PARIKH, IS ITSELF FOUND TO MILITATE AND IS IN SERIOUS CONFLICT WITH HIS OBSERVATION THAT IT WAS NOT THE CASE OF THE ASSESSEE THAT ONLY ACKNOWLEDGEMENT OF RETURN AND COPIES OF THE FINAL ACCOUNT OF THE ASSESSEE WERE SEIZED DURING THE COURSE OF THE AFORESAID SEARCH & SEIZURE PROCEEDINGS. THE AFORESAID OBSERVATIONS OF THE CIT(A) THOUGH RENDERED IN CONTEXT OF THE CLAIM OF THE ASSESSEE THAT NO INCRIMINATING MATERIAL WAS FOUND AND SEIZED DURING THE COURSE OF THE SEARCH & SEIZURE PROCEEDINGS, THEREFORE, THE A.O COULD NOT HAVE ASSUMED JURISDICTION UNDER SEC. 153C, THUS RAISES DOUBTS AS REGARDS THE TRUE STATE OF AFFAIRS IN RESPECT OF THE NATURE OF THE MATERIAL BELONGING TO THE ASSESSEE , AS WAS SEIZED DURING THE COURSE OF THE SEARCH & SEIZURE PROCEEDINGS CONDUCTED M/S JIK INDUSTRIES LTD AND ITS PROMOTER SHRI R.G. PARIKH. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS, THUS IN ALL FAIRNESS AND IN THE INTEREST OF JUSTICE RESTORE THE MATTER TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION ON THE ISSUE AS TO WHETHER THE ASSESSMENT IN THE CASE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2007 - 08 WAS ABATED OR NOT, AND AS TO WHETHER ANY INCRIMINATING DOCUMENT /MATERIAL BELO NGING TO THE ASSESSEE WAS FOUND DURING THE COURSE OF THE SEARCH & SEIZURE PROCEEDINGS CONDUCTED AS ON 04.02.2011 ON M/S JIK INDUSTRIES LTD AND ITS PROMOTER SHRI R.G. PARIKH. THE CIT(A) IS DIRECTED TO PROCEED WITH THE FRESH ADJUDICATION DURING THE COURSE OF THE 'SET ASIDE' PROCEEDINGS ONLY AFTER SUMMONING THE COMPLETE CASE RECORDS OF THE ASSESSEE. THE CIT(A) SHALL AFTER PERUSING THE COMPLETE CASE RECORDS OF THE ASSESSEE ADJUDICATE THE VALIDITY OF THE ADDITIONS MADE BY THE A.O IN THE HANDS OF THE ASSESSEE, IN THE BACKDROP OF THE JUDGMENT OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF CIT - I!, THANE VS. CONTINENTAL WAREHOUSING CORPORATION (2015) 374 ITR 645 (BORN). NEEDLES TO SAY, THE CIT(A) SHALL DURING THE COURSE OF THE SET ASIDE PROCEEDINGS AFFORD SUFFICI ENT OPPORTUNITY OF BEING HEARD TO BOTH THE PARTIES, WHO SHALL REMAIN AT A LIBERTY TO SUBSTANTIATE THEIR M/S. SHAH PRATAP INDUSTRIES PRIVATE LTD. 4 RESPECTIVE CONTENTIONS DURING THE COURSE OF THE SET ASIDE PROCEEDINGS. WE FURTHER DIRECT THE CIT(A) TO COMPLETE THE SET ASIDE PROCEEDINGS WITHIN A P ERIO D OF SIX MONTHS FROM THE DATE OF RECEIPT OF THIS ORDER. THE EFFECTIVE GROUNDS OF APPEAL NO(S). 1 TO 4 ARE ALLOWED FOR STATISTICAL PURPOSES IN TERMS OF OUR AFORESAID OBSERVATIONS. 7. FOLLOWING THE DECISION RE N DERED BY THE DIVISION BENCH, I ALSO RESTORE ALL THE MATTERS TO THE LEARNED CIT(A) WITH IDENTICAL DIRECTIONS. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE FOR A.Y. 2006 - 07 IS DISMISSED AND OTHER TWO APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 1 9 . 9 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 1 9 / 9 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RE SPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI