Susee Cars (P) Ltd., Vellore V. Addl .CIT, Madurai

ITA 994/CHNY/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7596 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 21-04-2014
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: T VASUDEVAN
• Keywords: Income from undisclosed sources
• Section: 143(3); 133A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENC H, CHENNAI BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER / I .TA NOS. 994, 995 & 996/MDS/2014 ( / ASSESSMENT YEARS:2005-06, 2006-07 & 2007-08 M/S. SUSEE CARS (P) LTD., NO. 271, CHITTOR HIGH ROAD, VELLORE-632 007 / VS. ADDL. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-III, MADURAI ./ ./ PAN/GIR NO. AAHCS 4953N / I .TA NOS. 997, 998 & 999/MDS/2014 ( / ASSESSMENT YEARS:2005-06, 2006-07 & 2007-08 M/S. SUSEE TRUCKS (P) LTD., NO. 6, 5 TH EAST CROSS ROAD, GANDHI NAGAR, VELLORE-6 / VS. ADDL. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-III, MADURAI ./ ./ PAN/GIR NO. AAJCS 2331L / I .TA NOS. 1000,1001,1002,1003,1004,1005 & 1006/MDS/2014 ( / ASSESSMENT YEARS:2001-02,2002-03, 2003-04, 2004-05, 2005-06, 2006-07& 2007-08 M/S. SUSEE MOTORS, LTD., NO. 271,(OLD NO. 98/1 CHITTOR HIGH ROAD, VELLORE-632 007 / VS. ADDL. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-III, MADURAI ./ ./ PAN/GIR NO. AAPFS 9764E ( / APPLICANT ) .. ( / RESPONDENT ) / APPLICANT BY: SHRI T. VASUDEVAN, ADVOCATE / RESPONDENT BY: SHRI P. RADHAKRISHNAN, JCIT, DR ITA NO. 994 TO 996/MDS/2014,997 TO 999 & . 1000 TO 1006/M/14 2 / DATE OF HEARING :18.02.2016 ! / DATE OF PRONOUNCEMENT : 24.03.2016 '# / O R D E R PER C.N. PRASAD, JM: ALL THESE APPEALS ARE FILED BY VARIOUS ASSESSEES O F THE SAME GROUP AND SINCE THE ISSUES IN ALL THESE APPEALS ARE COMMON, THEY ARE HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDE R FOR THE SAKE OF CONVENIENCE. 2. IN ALL THESE APPEALS ASSESSEE HAS RAISED SEVERAL GROUNDS ON MERIT AS WELL AS ON JURISDICTION OF THE ASSESSING O FFICER IN COMPLETING THE ASSESSMENTS U/S. 153C OF THE ACT. A SPECIFIC G ROUND WAS RAISED BY THE ASSESSEE IN ALL THESE APPEALS WHICH READS AS UN DER: THE CIT(A) FURTHER FAILED TO APPRECIATE THAT RECOR DING OF SATISFACTION BY THE OFFICER AS TO THE UNDISCLOSED N ATURE OF THE INCRIMINATING MATERIAL FOUND IN THE SEARCH WAS PARA MOUNT AND THERE BEING NO SUCH RECORDING, THE ASSESSMENT FRAME D U/S. 153C STANDS VITIATED AND NEEDS TO BE CANCELLED. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT BY THIS GROUND, ASSESSEE CHALLENGES THE ORDER OF THE A SSESSING OFFICER FRAMED U/S. 153C OF THE ACT AS THERE IS NO RECORDI NG OF SATISFACTION BY THE ASSESSING OFFICER AS TO THE UNDISCLOSED NATURE OF THE INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARC H. THEREFORE THE LD. COUNSEL SUBMITS THAT IN THE ABSENCE OF RECORDIN G OF SUCH SATISFACTION BY THE ASSESSING OFFICER THE ASSESSMEN T IS BAD IN LAW. IN OTHER WORDS, THE ASSESSEE CONTENDS THAT RECORDING O F SATISFACTION NOTE BY THE ASSESSING OFFICER IS A PRE-REQUISITE FO R COMPLETION OF ITA NO. 994 TO 996/MDS/2014,997 TO 999 & . 1000 TO 1006/M/14 3 ASSESSMENT. HE PLACES RELIANCE ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF M/S. CALCUTTA KNITWEAR S IN CIVIL APPEAL NO. 3958 OF 2014 DATED 12.3.2014 AND CIRCULAR OF CB DT NO. 24 OF 2015 DATED 31.12.2015. IN VIEW OF THE DECISION OF T HE HONBLE SUPREME COURT IN THE CASE OF CALCUTTA KNITWEARS, TH E LD. COUNSEL SUBMITS THAT THE ASSESSMENTS MADE U/S. 153C ARE BAD IN LAW. 3. OBJECTING TO THIS GROUND OF APPEAL FILED BY THE ASSESSEE, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT THIS GROUN D WAS NOT RAISED BEFORE THE LD. CIT(A) AND FOR THE FIRST TIME THIS GROUND IS RAISED BEFORE THE TRIBUNAL. THE LD. DR SUBMITS THA T SINCE THIS GROUND IS NOT RAISED BEFORE THE LD. CIT(A), THE MATTER MAY BE SET ASIDE TO THE CIT(APPEALS). HOWEVER, THE LD. COUNSEL FOR THE ASSE SSEE SUBMITS THAT IN THE WRITTEN SUBMISSION FILED BEFORE THE LD. CIT( A) THE ASSESSEE CONTENDED THAT IN THE ABSENCE OF SATISFACTION RECOR DED BY THE ASSESSING OFFICER, THE ASSESSMENT IS BAD IN LAW. T HEREFORE HE SUBMITS THAT THIS ISSUE IS RAISED BEFORE THE LD. CIT(A) AND IT IS NOT A NEW GROUND BEFORE THE TRIBUNAL. 4. WE HAVE PERUSED THE ORDERS OF THE LOWER AUTHORIT IES, WRITTEN SUBMISSION FILED BY THE ASSESSEE BEFORE THE LD. CIT (A), THE GROUNDS OF APPEAL BEFORE THE LD. CIT(A). FROM THE PERUSAL OF THE GROUNDS OF APPEAL FILED BY THE ASSESSEE BEFORE THE LD. CIT(A), NO SPECIFIC GROUND WAS RAISED BY THE ASSESSEE IN RESPECT OF NON RECORD ING OF SATISFACTION BY THE ASSESSING OFFICER AND THEREBY THE ASSESSMEN T ORDER IS NULL AND VOID, THOUGH IT WAS CONTENDED IN THE WRITTEN SU BMISSION BEFORE THE LD. CIT(A) THAT THE SATISFACTION THAT IS CONTE MPLATED FOR ISSUE OF NOTICE IS NOT A SUBJECTIVE ONE BUT SHOULD BE OBJECT IVE AND BASED ON CONCRETE MATERIAL AS TO THE EXISTENCE OF INCRIMINAT ING MATERIAL ITA NO. 994 TO 996/MDS/2014,997 TO 999 & . 1000 TO 1006/M/14 4 WARRANTING FURTHER ACTION. IT WAS ALSO CONTENDED THAT SATISFACTION SHOULD BE EXPLICITLY RECORDED AT THE TIME OF ISSUE OF NOTICE U/S. 153C OF THE ACT. FURTHER, IT WAS ALSO PLACED RELIANCE B Y THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHW ARI (289 ITR 341) FOR THE PROPOSITION THAT NON FULFILLMENT OF TH E CONDITIONS FOR ISSUE OF NOTICE U/S. 153C WOULD RENDER THE ASSESSME NT VOID. 5. WE HAVE ALSO PERUSED THE ORDERS OF THE LD. CIT(A ) AND FIND THAT IN THE ABSENCE OF ANY SPECIFIC GROUND THE LD. CIT(A ) HAS NOT DEALT WITH THIS ISSUE. THE ASSESSEE RAISED GROUNDS ON JUR ISDICTION STATING THAT ASSESSING OFFICER ERRED IN FOLLOWING THE PROCE DURE LAID DOWN U/S. 132 OF ACT FOR THE ASSESSEES CASE IN FINALIZING TH E ASSESSMENTS U/S. 143(3) R.W. SEC. 153C AS AGAINST THE PROCEDURE LAI D DOWN U/S. 133A OF THE ACT. THE LD. CIT(A) ON JURISDICTION HELD THA T THE ASSESSMENTS ARE COMPLETED BASED ON THE MATERIAL SEIZED DURING T HE COURSE OF SEARCH U/S. 132 OF THE ACT FROM THE RESIDENCES OF T HE DIRECTORS/PARTNERS OF THE ASSESSEE AND THESE SEIZED MATERIALS CONTAINS ENTRIES WHICH HAVE A BEARING ON DETERMINAT ION OF THE UNACCOUNTED INCOME OF THE ASSESSEE. THUS, HE HELD THAT COMPLETION OF ASSESSMENTS U/S. 153C ARE IN ORDER. THEREFORE, ON PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES AND THE SUBMISSIONS MADE BEFORE THEM, ASSESSEE HAS NOT RAISED ANY SPECIFIC GROUND I N RESPECT OF RECORDING OF SATISFACTION BY THE ASSESSING OFFICER TO THE UNDISCLOSED NATURE OF INCRIMINATING MATERIAL FOUND IN THE COURS E OF SEARCH AND THE JURISDICTION IN PASSING THE ASSESSMENT ORDER. THIS GROUND OF THE APPEAL IS RAISED FOR THE FIRST TIME BEFORE THE TRIB UNAL. WE ARE OF THE CONSIDERED VIEW THAT THE CONTENTIONS OF THE ASSESSE E WITH REGARD TO THE NEW GROUND HAVE TO BE EXAMINED WITH REFERENCE T O THE RECORDS OF ITA NO. 994 TO 996/MDS/2014,997 TO 999 & . 1000 TO 1006/M/14 5 THE ASSESSING OFFICER IN ALL THESE CASES. THUS, WE RESTORE ALL THESE APPEALS TO THE FILE OF THE LD. CIT(A) FOR DISPOSING THE GROUND RAISED BY THE ASSESSEE ON RECORDING OF THE SATISFACTION NOTE OF THE ASSESSING OFFICER IN ISSUING THE NOTICE U/S. 153C OF THE ACT IN ACCORDANCE WITH LAW AND KEEPING IN VIEW THE HONBLE SUPREME COURT D ECISION IN THE CASE OF CALCUTTA KNITWEARS AND THE BOARD CIRCULAR R EFERRED TO ABOVE. 6. AT THE SAME TIME, WE ARE NOT COMMENTING OR DECID ING THE ISSUES ON MERITS I.E. ADDITIONS OR DELETIONS MADE I N THE ASSESSMENT ORDER, SINCE WE ARE RESTORING THE JURISDICTION IS SUE TO THE LD. CIT(A) WHICH HAS BEARING ON THE OUTCOME OF THE APPEAL AND THE SURVIVAL OF THE ASSESSMENT ORDER ITSELF. THEREFORE, WE ARE RES TORING ALL OTHER ISSUES IN THE APPEALS TO THE LD. CIT(A) TO DECIDE A FRESH IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BE ING HEARD ALONGWITH ISSUE OF JURISDICTION OF ASSESSING OFFICE R IN PASSING THE ASSESSMENT ORDER IN THE ABSENCE OF RECORDING SATISF ACTION FOR ISSUE OF NOTICE AND INITIATION OF ASSESSMENT PROCEEDINGS. 5. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSE SSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH MARCH, 2016. SD/- SD/- (CHANDRA POOJARI) (C.N. PRASAD ) ' / ACCOUNTANT MEMBER $ % ' /JUDICIAL MEMBER &' DATED : 24 TH MARCH, 2016 . % . ./ RJ , SR. PS ITA NO. 994 TO 996/MDS/2014,997 TO 999 & . 1000 TO 1006/M/14 6 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ' ( ) / THE CIT(A)- 4. ' / CIT 5. () * %%+, , +,! , - . / DR, ITAT, MADRAS 6. * /0 1 / GUARD FILE. / BY ORDER, ( % //TRUE COPY// / !' (DY./ASSTT. REGISTRAR) '# $ , - . / ITAT, MADRAS