Gulab Badgujar (HUF), Thane V. Commissioner of Income-tax (Central),

ITA 799/PUN/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6313 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-10-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 29-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Document seized; Period of limitation; Difference of opinion; Reason to believe; Documents seized; Change of opinion; Reassessment proceedings; Set aside
• Section: 143(3); 148; 263; 63; 132

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NOS.798 AND 799/PUN/2015 / ASSESSMENT YEARS : 2006-07 & 2011-12. GULAB BADGUJAR (HUF), 204, PASHUPATINATH, C-02, B WING, MAHADEV SANKALP COMPLEX, GANDHARE VILLAGE, NEAR KAHDAKPADA CHOWK, KALYAN (WEST), THANE 421301. PAN : AAEHG6475C. . / APPELLANT V/S THE COMMISSIONER O F INCOME - TAX (CENTRAL), NAGPUR. . / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE. REVENUE BY : SHRI RAJEEV KUMAR, CIT. / ORDER PER ANIL CHATURVEDI, AM : 1. THESE TWO APPEALS FILED BY ASSESSEE ARE EMANATING OUT O F SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (CENTRAL), NAGPUR, BOT H DATED 19.03.2015 UNDER SECTION 263 OF THE ACT FOR THE ASSESSM ENT YEARS 2006- 07 & 2011-12, RESPECTIVELY. 2. BOTH THE APPEALS RELATING TO THE SAME ASSESSEE AGAINST ORDER PASSED UNDER SECTION 263 OF THE ACT WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. / DATE OF HEARING : 21.02.2019 / DATE OF PRONOUNCEMENT: 03.05.2019 2 ITA NOS.798 & 799/PUN/2015 3. THE GROUNDS RAISED BY THE ASSESSEE IN A.Y. 798/PUN/2 015 FOR A.Y. 2006-07 READS AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) 1, MUMBAI ERR ED IN INVOKING PROVISIONS U/S 263 OF THE ACT, ON THE ISSUE WHICH W AS DECIDED BY THE ASSESSING OFFICER AND THEREFORE SUCH ADDITION WHICH IS MERELY BASED ON CHANGE OF OPINION IS BAD IN LAW AND VOID AB INITIO. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) 1, MUMBAI ERR ED IN HOLDING THAT THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147 O N 14.02.2014 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. 3.1 S UBSEQUENTLY, ASSESSEE FILED THE ADDITIONAL GROUND WHICH RE ADS AS UNDER : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LEARNED CIT(CENTRAL), NAGPUR, ERRED IN PASSING ORDER U/S 26 3, FOR CONSIDERING THE REVISION OF ORDER PASSED U/S 143(3) R.W.S. 147, DT. 14.02.2014, FOR ASST. YEAR 2006-07, ESPECIALLY IN VIEW OF THE FACT THAT T HE IMPUGNED PROCEEDINGS WERE INITIATED POST SEARCH ENQUIRIES IN CASE OF SUY OJIT GROUP, AND NECESSARY EXPLANATIONS WERE OFFERED BEFORE DDI(INV) , IN CONNECTION WITH DOCUMENTS SEIZED DURING THE SEARCH ACTION AND NECES SARY INQUIRIES ARE ALREADY MADE. 4. SIMILAR GROUNDS HAVE BEEN RAISED IN ITA NO.799/PUN/201 5 FOR A.Y. 2011-12. 5. FIRST, WE SHALL TAKE UP APPEAL RELATING TO A.Y. 2006-07. 6. BEFORE US, LD.A.R. SUBMITTED THAT THE EXERCISE OF REVISION ARY POWERS IN BOTH THE ASSESSMENT YEARS LACKS JURISDICTION AND THER EFORE ARE BAD IN LAW. HE SUBMITTED THAT THE BASIS ON WHICH ASSESSMENTS W ERE REOPENED WERE LOOKED INTO BY AO IN THE RE-ASSESSMENT PROCEEDINGS AND THE ADDITIONS WERE MADE. IN SUCH A SITUATION, EXERCISE OF REV ISIONARY PROCEEDINGS ARE NOT PERMISSIBLE AS REOPENING WAS ON SPEC IFIC GROUNDS AND FOR THIS PROPOSITION, HE RELIED ON VARIOUS DECISIONS. HE THER EFORE SUBMITTED THAT THE ORDERS OF COMMISSIONER OF INCOME TAX BE SET ASIDE. 3 ITA NOS.798 & 799/PUN/2015 LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF COMMISS IONER OF INCOME TAX. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. BRIEFLY, IN THE FACTS OF THE CASE, ASSESSEE HAS FU RNISHED THE ORIGINAL RETURN OF INCOME ON 16.08.2010. SEARCH UNDER SECT ION 132 OF THE ACT WAS CARRIED OUT ON SUYOJIT GROUP OF CASES ON 17.09.2 010. DURING THE COURSE OF SEARCH, CERTAIN DOCUMENTS WERE FOUND AND SEIZED. THEREAFTER, ELABORATE ENQUIRIES WERE MADE AND THE SEIZED DOCUMENTS WERE CONFRONTED AND STATEMENT OF SHRI GULAB MAHARU BADGUJAR WAS RECORDED ON 16.10.2010. BEFORE THE DDIT., INVESTIGATION, THE TRANSAC TION WAS EXPLAINED VIDE LETTER DT.09.11.2010. POST THE SEARCH AND THE ENQUIRIES MADE, NO NOTICE UNDER SECTION 153C OF THE ACT OR SEC.148 OF THE ACT WERE ISSUED TO THE ASSESSEE; BUT NOTICE UNDER SECTION 153C O F THE ACT WAS ISSUED TO SEVERAL OTHER PARTIES. THEREAFTER, NOTICE UNDE R SECTION 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON SPECIFIC REASONS. THE AO PASSED ORDER UNDER SECTION 143(3) R.W.S. 147 OF THE ACT VIDE ORDE R DATED 14.02.2014. THE ASSESSMENT WAS RE-OPENED FOR SPECIFIC REA SONS AND ADDITION ON ACCOUNT OF THE SAID REASONS WAS MADE IN THE HANDS OF ASSESSEE WHICH IS NOT DISPUTED. THEREAFTER, THE COMMISSION ER OF INCOME TAX EXERCISED HIS JURISDICTION UNDER SECTION 263 OF THE AC T AND ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE. THE COMMISSIONER OF INCOME TAX REFERS TO PART OF A TRANSACTION BETWEEN ASSESSEE AND SHRI ANANT KESHAV RAJEGAONKAR, WHOSE RESIDENTIAL PREMISES WAS ALSO SEARCHED UNDER SECTION 132 OF THE ACT AS PART OF SUYOJIT GROUP OF CASES ON 17.0 9.2010. IT MAY BE POINTED HEREIN ITSELF, THAT THE BASIS OF THE INITIATION OF THE 263 PROCEE DINGS IS A DOCUMENT FOUND DURING THE SEARCH WHICH REFLECTS A TR ANSACTION 4 ITA NOS.798 & 799/PUN/2015 TOTALING TO RS.2.98 CRORE SPREAD OVER A PERIOD OF FIVE YEA RS. THE YEARS TO WHICH IT RELATES ARE AS UNDER : A.Y. AMOUNT (LAKH) 2006-07 19.00 2007-08 127.00 2008-09 45.00 2009-10 40.00 2011-12 67.00 TOTAL 298.00 8. HOWEVER, ONLY IN TWO ASSESSMENT YEARS, ASSESSMENTS W ERE RE- OPENED UNDER SECTION 263 OF THE ACT I.E., FOR A.Y. 2006-07 AND 2011-12. ADMITTEDLY, THE ASSESSMENT PROCEEDINGS FOR A.Y. 2007-08 W HEREIN THERE IS A TRANSACTION OF RS.127 CRORE HAS BEEN ACCEPTED AND NO ACTION UNDER SECTION 263 OF THE ACT HAS BEEN INITIATED. IT MAY ALSO BE CLARIFIED HEREIN THAT THE OTHER SIDE TRANSACTIONS IN THE HANDS OF ANANT KESHAV RAJEGAONKAR WERE ALSO LOOKED INTO BY THE REVENUE AUTH ORITIES AND WE ARE NOT CONCERNED WITH THE FATE OF THE ADDITIONS IN HIS HANDS. 9. THE QUESTION WHICH ARISES IS THE EXERCISE OF REVISIONARY JURISDICTION BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF T HE ACT AGAINST THE ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE A CT, WHEREIN THE ASSESSMENT PROCEEDINGS WERE RE-OPENED ON SPECIFIC REAS ONS RECORDED FOR RE-OPENING. WE HAVE ALREADY REFERRED TO THE ADDITIONS MA DE ON THE AFORESAID REASONS IN THE HANDS OF ASSESSEE IN THE PARA A BOVE. ONCE, THE RE-ASSESSMENT PROCEEDINGS ARE INITIATED ON A SPECIFIC ISSUE AND THE ADDITION IS MADE IN THE HANDS OF THE ASSESSEE THEN THE C OMMISSIONER OF 5 ITA NOS.798 & 799/PUN/2015 INCOME TAX IS PRECLUDED FROM EXERCISE OF JURISDICTION UNDE R SECTION 263 OF THE ACT ON A GROUND WHICH IS NOT COVERED BY THE REASO NS DURING THE RE- OPENING OF THE ASSESSMENT SINCE THE TIME FOR COMPLETING T HE ASSESSMENT U/S 143(3) OF THE ACT HAD EXPIRED. HENCE, WE FIND NO MER IT IN THE EXERCISE OF REVISIONARY POWER BY THE COMMISSIONER OF INCOM E TAX UNDER SECTION 263 OF THE ACT IN THE PRESENT FACTS AND CIRCUMSTANCES. 10. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HONB LE BOMBAY HIGH COURT IN THE CASE OF M/S. ASHOKA BUILDCON LIMITED VS . ACIT REPORTED IN (2010) 191 TAXMANN 29 WHEREIN ALSO THE QUEST ION WAS OF REVISIONARY PROCEEDINGS INITIATED UNDER SECTION 263 OF THE ACT AGAINST THE ASSESSMENT MADE WHICH WAS RE-OPENED UNDER SECTION 147 OF THE ACT. THE HONBLE BOMBAY HIGH COURT NOTED THAT THE RE-ASSESSME NT PROCEEDINGS WERE IN RELATION TO A PARTICULAR GROUNDS AND SUBSEQUENT THERETO OF PASSING OF THE RE-ASSESSMENT AND EXERCISE OF JURISDICTION UNDER SECTION 263 OF THE ACT WITH REFERENCE TO THE ISSUES, WHICH DID NOT FORM SUBJECT OF RE-OPENING OF ASSESSMENT CANNOT BE EXERCISED. 11. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S. A SHOKA BUILDCON LIMITED (SUPRA) AT PARA 8 HELD AS UNDER : 8. WHERE AN ASSESSMENT HAS BEEN REOPENED UNDER SEC TION 147 IN RELATION TO A PARTICULAR GROUND OR IN RELATION TO CERTAIN SP ECIFIED GROUNDS AND, SUBSEQUENT TO THE PASSING OF THE ORDER OF REASSESSM ENT, THE JURISDICTION UNDER SECTION 263 IS SOUGHT TO BE EXERCISED WITH RE FERENCE TO ISSUES WHICH DO NOT FORM THE SUBJECT OF THE REOPENING OF THE ASS ESSMENT OR THE ORDER OF REASSESSMENT, THE PERIOD OF LIMITATION PROVIDED FOR IN SUB-SECTION (2) OF SECTION 263 WOULD COMMENCE FROM THE DATE OF THE ORDER OF ASSESSMENT AND NOT FROM THE DATE ON WHICH THE ORDER REOPENING THE REASSESSMENT HAS BEEN PASSED. 6 ITA NOS.798 & 799/PUN/2015 THE HONBLE BOMBAY HIGH COURT AT PARA 10 FURTHER HELD THAT 10. WHERE A REASSESSMENT HAS BEEN MADE PURSUANT TO A NO TICE UNDER SECTION 148, THE ORDER OF REASSESSMENT PREVAILS IN RESPECT OF THOSE ITEMS WHICH FORM PART OF REASSESSMENT. ON ITEMS WHICH DO NOT FO RM PART OF THE REASSESSMENT, THE ORIGINAL ASSESSMENT CONTINUES TO HOLD THE FIELD. WHEN THE ASSESSING OFFICER REOPENS AN ASSESSMENT ON A PA RTICULAR ISSUE, IT IS OPEN TO HIM TO MAKE A REASSESSMENT ON THAT ISSUE AS WELL AS IN RESPECT OF OTHER ISSUES WHICH SUBSEQUENTLY COME TO HIS NOTICE DURING THE COURSE OF THE PROCEEDINGS UNDER SECTION 147. THE SUBMISSION OF TH E REVENUE IS THAT BY NOT PASSING AN ORDER OF REASSESSMENT IN RESPECT OF OTHER INDEPENDENT ISSUES, THE ORDER OF THE ASSESSING OFFICER CAN BE C ONSTRUED TO BE ERRONEOUS AND TO BE PREJUDICIAL TO THE INTEREST OF THE REVENU E WITHIN THE MEANING OF SECTION 263. THE SUBMISSION CANNOT BE ACCEPTED I N THE FACTS OF THE PRESENT CASE. THE SUBSTANTIVE PART OF SECTION 147 A S WELL AS EXPLANATION 3 ENABLES THE ASSESSING OFFICER TO ASSESS OR REASSESS INCOME CHARGEABLE TO TAX WHICH HE HAS REASON TO BELIEVE HAD ESCAPED ASSE SSMENT AND OTHER INCOME WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THE SECTION. THERE IS NOTHING ON THE RECORD OF THE PRESENT CASE TO INDICA TE THAT THERE WAS ANY OTHER INCOME WHICH HAD COME TO THE NOTICE OF THE AS SESSING OFFICER AS HAVING ESCAPED ASSESSMENT IN THE COURSE OF THE PROC EEDINGS UNDER SECTION 147 AND WHEN HE PASSED THE ORDER OF REASSESSMENT. T HE COMMISSIONER, WHEN HE EXERCISED HIS JURISDICTION UNDER SECTION 26 3, IN THE FACTS OF THE PRESENT CASE, WAS UNDER A BAR OF LIMITATION SINCE L IMITATION WOULD BEGIN TO RUN FROM THE DATE ON WHICH THE ORIGINAL ORDER OF AS SESSMENT WAS PASSED. WE MUST HOWEVER CLARIFY THAT THE BAR OF LIMITATION IN THIS CASE ARISES BECAUSE THE REVISIONAL JURISDICTION UNDER SECTION 2 63 IS SOUGHT TO BE EXERCISED IN RESPECT OF ISSUES WHICH DID NOT FORM T HE SUBJECT MATTER OF THE REASSESSMENT PROCEEDINGS UNDER SECTION 143(3) READ WITH 147. IN RESPECT OF THOSE ISSUES, LIMITATION WOULD COMMENCE WITH REFE RENCE TO THE ORIGINAL ORDER OF ASSESSMENT. IF THE EXERCISE OF THE REVISIO NAL JURISDICTION UNDER SECTION 263 WAS TO BE IN RESPECT OF ISSUES WH ICH FORMED THE SUBJECT MATTER OF THE REASSESSMENT, AFTER THE ORIGINAL ASSE SSMENT WAS REOPENED, THE COMMENCEMENT OF LIMITATION WOULD BE WITH REFERE NCE TO THE ORDER OF REASSESSMENT. THE PRESENT CASE DOES NOT FALL IN THA T CATEGORY. TAKING STRENGTH FROM THE ORDER OF HONBLE BOMBAY HIGH C OURT IN ASHOKA BUILDCON LIMITED (SUPRA), WE HOLD THAT THE ORDER OF REVISION PASSED IN THE PRESENT CASE, ON ISSUES WHICH DID NOT FORM SUBJECT OF R E-OPENING OF THE ASSESSMENT OR ORDER OF REASSESSMENT, CANNOT BE UPHELD. THEREFORE THE REVISIONARY PROCEEDINGS EXERCISED BY THE COMMISSIONER OF I NCOME TAX IS NOT CORRECT. HENCE, THE SAID ORDER OF COMMISSIONER OF I NCOME TAX IS SET ASIDE. 7 ITA NOS.798 & 799/PUN/2015 12. BEFORE PARTING WE MAY ALSO MENTION THAT THE COMMISSIO NER OF INCOME TAX HAD ISSUED THE SHOW CAUSE NOTICE FOR A.Y. 200 6-07 AGAINST THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT DT.14.02.2014 ASSESSING THE TAXABLE INCOME AT RS.60,25,970/- . HOWEVER, IN THE FINAL PARA I.E., PARA 6, THE COMMISSIONER OF INCOME TAX WAS OF THE CONSIDERED OPINION THAT THE ORDER PASSED UNDER SECTION 143(3) OF THE ACT DT.28.03.2013 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE FINAL FINDING OF THE COMMISSIONER OF INCOME TAX IS CONTRAR Y TO THE FACTS AS THE ASSESSMENT ORDER WHICH WAS IN QUESTION WAS PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT DT.14.02.2014; BUT THE C OMMISSIONER OF INCOME TAX IN THE FINAL ANALYSIS HELD THAT AN ORDER PA SSED UNDER SECTION 143(3) OF THE ACT DT.28.03.2013 TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE WHERE NO SUCH ORDER UNDER SEC TION 143(3) OF THE ACT HAS BEEN PASSED BY ANY OF THE AUTHORITIES FOR A.Y. 20 06-07, HENCE, THE FINDING OF THE COMMISSIONER OF INCOME TAX SUFFERS FROM IN FIRMITY AND ON THIS ACCOUNT ALSO THE EXERCISE OF JURISDICTION BY THE C OMMISSIONER OF INCOME TAX CANNOT STAND. 13. NOW COMING TO THE APPEAL IN A.Y. 2011-12, WHICH IS ALSO AGAINST THE EXERCISE OF REVISIONARY JURISDICTION BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT, THE REASON FOR EXERCISE OF THE SAID JURISDICTION BY THE COMMISSIONER OF INCOME TAX IS AGAIN AT THE SAME DOCUMENT WHICH WAS FOUND FROM THE RESIDENTIAL PREMISES OF S HRI ANANT KESHAV RAJEGAONKAR WHEREIN THE TRANSACTION TOTALING TO RS.2.98 CRORE IS MENTIONED. IT MAY BE POINTED OUT THAT THE SAID TRANSAC TION RELATES TO NUMBER OF YEARS AND WE HAVE ALREADY REFERRED TO THE DE TAILS IN THE PARAS ABOVE. THE FIRST YEAR WAS A.Y. 2006-07 WHEREIN THE AMOUN T MENTIONED ON THE DOCUMENT WAS RS.19 LAKH. WE HAVE ALREADY HELD TH E EXERCISE OF 8 ITA NOS.798 & 799/PUN/2015 JURISDICTION BY THE COMMISSIONER OF INCOME TAX UNDER SECT ION 263 OF THE ACT TO BE NOT IN ACCORDANCE WITH THE LAW IN THE PARAS ABOVE. 14. NOW COMING TO APPEAL IN A.Y. 2007-08, WHEREIN THE TRANS ACTION NOTED IS RS.127 LAKH, THE ASSESSMENT FOR THIS YEAR WAS CO MPLETED UNDER SECTION 143(3) OF THE ACT BUT NO PROCEEDINGS U/S 263 OF THE ACT HAVE BEEN INITIATED AGAINST THE ASSESSEE. SIMILARLY, FOR A.YS. 2008-09 A ND 2009-10 WHEREIN THE TRANSACTIONS NOTED WERE RS.45 LAKH AND RS.40 LAKH, RESPECTIVELY, THOUGH THE ASSESSMENT HAS BEEN COMPLETED IN THE HANDS OF THE ASSESSEE BUT NO PROCEEDINGS U/S 263 OF THE ACT HA VE BEEN COMPLETED. IN THE CAPTIONED ASSESSMENT YEAR I.E., A.Y. 2011-12, THE AM OUNT NOTED IN THE SEIZED DOCUMENT IS RS.67 LAKH AND IS THE BASIS FOR EXE RCISE OF REVISIONARY POWER BY THE COMMISSIONER OF INCOME TAX AGAIN ST THE ASSESSEE. ONCE THE TRANSACTION HAS BEEN ACCEPTED IN T HE EARLIER YEARS AND THE TRANSACTION EMANATE FROM THE SAME SEIZED DOCU MENT, THEN THE REVENUE AUTHORITIES CANNOT TAKE DIFFERENT STAND IN DIFFERENT YEARS. WE THEREFORE FIND NO MERIT IN THE EXERCISE OF JURISDICTION UNDE R SECTION 263 OF THE ACT AGAINST THE ASSESSEE BY THE COMMISSIONER OF INC OME TAX UNDER SECTION 263 OF THE ACT IN A.Y. 2011-12. HENCE, THE SAID OR DER PASSED UNDER SECTION 263 OF THE ACT IS SET ASIDE. 15. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON 3 RD DAY OF MAY, 2019. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 3 RD MAY, 2019. YAMINI 9 ITA NOS.798 & 799/PUN/2015 #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 CIT(CENTRAL), NAGPUR. '#$ %%&',) &', / DR, ITAT, A PUNE; $,-./ GUARD FILE. / BY ORDER // TRUE COPY // // TRUE COPY /01%2&3 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.