Sh. Samsher Jang Bahadur, Hoshiarpur V. The Dy. Commissioner of Income-tax, Hoshiarpur

ITSSA 1/ASR/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1921 (ITAT-AMRITSAR)
• Duration Of Justice: 4 year(s) 6 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-08-2019
• Assessment Year: misc
• Appeal Filed On: 04-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANDEEP C HAUHAN LD
• Assessee Lawyers: J S BHASIN LD
• Keywords: Period of limitation; Set aside
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBU NAL AMRITSAR BENCH, AMRITSAR BEFORE SH. B.R. BASKARAN, ACCOUNTANT MEMBER AN D SH. N.K.CHOUDHRY, JUDICIAL MEMBER IT(SS)A NO.04/ASR/2 012 BLOCK PERIOD 01.04.1989 TO 08.02.2000 SH. SHAMSHER JANG BAHADUR C/O CA VINAY MALHOTRA PHAGWARA ROAD HOSHIARPUR [PAN:ABWPB 7485M] VS. ASST. CIT CENTRAL CIRCLE-1 JALANDHAR (APPELLANT) (RESPONDENT) IT(SS)A NO.01/ASR/20 15 BLOCK PERIOD: 01.04.1989 TO 08.02.2000 SH. SHAMSHER JANG BAHADUR STREET NO.3, TAGORE NAGAR HOSHIARPUR [PAN:ABWPB 7485M] VS. DY. CIT HOSHIAPUR CIRCLE HOSHIARPUR (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S. BHASIN (LD. ADV.) RESPONDENT BY: SH. SANDEEP CHAUH AN (LD. CIT-DR) DATE OF HEARING: 26.08.2019 DATE OF PRONOUNCEMENT: 04.09.2019 ORDER PER N.K.CHOUDHRY, JM: THESE TWO APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST SEPARATE ORDERS DATED 22/02/2012 & 30/12/2014 PASSED BY THE LD. CIT(A)-I, LUDHIANA & JALANDHAR FOR THE BLOCK PERIOD IT(SS)A NO. 04/ASR/ 2012 IT(SS) A NO.01/ ASR/2015 2 01.04.1989 TO 08.02.2000, WHEREBY THE LD. CITS(A) UP HELD THE ADDITION AND PENALTY ORDERS RESPECTIVELY. 2. BRIEF FACTS OF THE CASE THAT THE ASSESSEE'S PREMISES WERE SEARCHED BY THE DEPARTMENT ON DATED 08-02-2000 U/S 132 (1) OF THE ACT. THEREAFTER THE ASSESSEE FILED AN APPLICATION BEFORE THE SETTLEMENT ON 27-12-2001, WHICH WAS ADMITTED BY THE S ETTLEMENT COMMISSION ON 9-05-2002 U/S.245D(L), HOWEVER ADMITTED T AX WAS NOT PAID. SUBSEQUENTLY SETTLEMENT PROVISIONS WERE AMEND ED BY FINANCE ACT 2007 W.E.F. 01-07-20017 AND AS PER AMENDED PROVISIONS OF SECTION 245D(2D) R/W 245HA(II), IF ADMITTED TAX WA S NOT PAID ON OR BEFORE 31.7.2007, THE CASE WOULD STANDS ABATED. AS P ER SECTION 245HA (1) CLAUSE (II), READ WITH CLAUSE (B) OF EXPLANATI ON THERETO, THE CASE STOOD ABATED ON 31.07.2008 BECAUSE AS PER THE 2ND P ROVISO TO SECTION 153(4), AS AMENDED W.E.F. 1.6.2007, AFTER EXCLU DING THE PERIOD UNDER SUB-SEC (4) OF SEC 245HA, THE AO WAS TO FRAM E THE ASSESSMENT, WITHIN ONE YEAR OF THE SPECIFIED DATE I.E. ON LY UPTO 31.03.2008. HOWEVER, IN THIS CASE, THE ASSESSMENT ORDER WAS PASSED ON 31.03.2009 U/S 144/158BC(C), AGAINST WHICH THE ASSESSE E PREFERRED THE FIRST APPEAL BEFORE THE CIT(A), WHO H OWEVER DISMISSED THE SAME BY AFFIRMING THE ASSESSMENT FAMED BY THE A.O. . SUBSEQUENTLY THE ASSESSING OFFICER IMPOSED THE PENALTY, WH ICH ALSO STOOD CONFIRMED BY THE LD. CIT(A). 3. FEELING AGGRIEVED THE ASSESSEE PREFERRED THE INSTANT APPEAL AND IS SUPPORT OF ITS CASE SUBMITTED THAT IN THE SIMILAR CIRCUMSTANCE IN THE CASE OF ASSESSEE'S FIRM I.E. M/S UNITED TRADERS VS. TH E DCIT (IT (SS) NO. 5/ASR/2012 AND (IT (SS) NO. 5/ASR/2012 AND HON'BLE TRIBUNAL QUASHED THE ASSESSMENT ORDER AS WELL AS PENALTY O RDER. THE LD. D.R. DID NOT REFUTE THE CLAIM OF THE ASSESSEE. IT(SS)A NO. 04/ASR/ 2012 IT(SS) A NO.01/ ASR/2015 3 4. HAVING HEARD THE PARTIES AND PERUSED THE MATERIAL A VAILABLE ON RECORD INCLUDING THE ORDER PASSED BY THE CO-ORDINATE BE NCH IN THE ASSESSEE'S FIRM CASE I.E. M/S UNITED TRADERS VS. THE DCIT (SU PRA). LET US TO REPRODUCE THE CONCLUSION PART OF THE SAID DECISIO N FOR THE SAKE OF BREVITY AND READY REFERENCE. 10. AS PER SECTION 245D (4A): THE SETTLEMENT COMM ISSION SHALL PASS AN ORDER UNDER SUB-SECTION (4)- (I) IN RESPECT OF AN APPLICATION REFERRED TO IN SUB -SECTION (2A) OR SUBSECTION (2D), ON OR BEFORE THE 31 ST DAY OF MARCH, 2008. 11. IT IS NOT IN DISPUTE THAT THE ASSESSEE'S APP LICATION WAS ADMITTED U/S. 245D(L) ON 9.05.2002, I.E., WELL BEFO RE 1.6.2007. HOWEVER, ADMITTED TAX COULD NOT BE DEPOSITED TILL 1 .6.2007. THEREFORE, IT WAS A CASE COVERED BY SUB-SECTION (2D ), WHICH APPLIED TO A SITUATION WHERE THE APPLICATION STOOD ADMITTED BEFORE 1.6.2007 BUT OWING TO NON PAYMENT OF ADDITIONAL TAX UPTO THE SAID DATE, IT WAS NOT FURTHER ALLOWED TO BE PROCEEDED WITH. 12. NOW, FOR ABATEMENT, IT WAS COVERED BY CLAUSE (II) OF SECTION 245HA(1), WHICH, BESIDES COVERING SITUATION UNDER S UB-SEC (2A), SPECIFICALLY COVERED THE SITUATION UNDER SUB-SEC (2 D) APPLICABLE TO A CASE WHERE APPLICATION WAS NOT ALLOWED TO BE FURTHE R PROCEEDED WITH. 13. FURTHER, THE SPECIFIED DATE IN CLAUSE (II) A BOVE, WAS TO APPLY AS PER CLAUSE (B) OF THE EXPLANATION, I.E., 31 ST DAY OF JULY, 2007. 14. THEREFORE, THE ASSESSMENT HAD TO BE COMPLETED BY 31.07.2008, WHEREAS IT HAS BEEN MADE ON 31.3.2009, BY VIRTUE OF 2 ND PROVISO TO SECTION 153(4). THE ID.AO MISCONSTRUED THE FACTS AN D THE LAW, TO APPLY CLAUSE (IV) OF SEC 245HA(1) READ WITH CLAUSE (D) OF EXPLANATION, THEREBY WRONGLY EXTENDING THE LIMITATI ON FROM 31 ST MARCH, 2008, AS GIVEN IN CLAUSE (I) OF SUB-SEC (4A) . 15. THE POSITION BECOMES ABUNDANTLY CLEAR FROM T HE MEMORANDUM TO FINANCE ACT, 2007 UNDER THE REVISED SETTLEMENT S CHEME (CLAUSE 53 TO 61 AND 75 TO 83 TO PARA (IV)(B), REPRODUCED B ELOW: IN RESPECT OF APPLICATIONS WHICH WERE ADMITTED BEF ORE 1ST JUNE 2007, BUT ORDER OF SETTLEMENT WAS NOT PASSED B EFORE THE SAID DATE, THE TAX ON THE INCOME DECLARED IN TH E APPLICATION AND INTEREST THEREON SHALL HAVE TO BE P AID ON OR IT(SS)A NO. 04/ASR/ 2012 IT(SS) A NO.01/ ASR/2015 4 BEFORE 31' JULY, 2007. TAX AND INTEREST SHALL BE PA ID BY THIS DATE EVEN IN CASES WHERE THE COMMISSION HAS ALREADY GRANTED ANY EXTENSION OR INSTALLMENT FOR THE PAYMEN T OF TAX BEYOND THE SAID DATE. IF THE TAX AND INTEREST IS NO T PAID ON OR BEFORE 31 ST JULY 2007, THE APPLICATION SHALL NOT BE ALLOWED TO BE FURTHER PROCEEDED WITH, AND THE PROCEEDINGS BEFO RE THE COMMISSION SHALL ABATE ON 31 ST JULY, 2007' 16. IN APPRECIATION OF THE TRUE FACT SITUATION VIS A VIS THE ABOVE PROVISIONS OF LAW, AS ALSO THE BOARD MEMORANDUM, IT IS BEYOND DOUBT THAT THE ORDER UNDER APPEAL WAS TO BE PASSED ON OR BEFORE 31.7.2008, AND SINCE IT WAS PASSED MUCH THEREAFTER ON 31.3.2009, IT IS INVALID, BEING OUT OF TIME. IN RAJENDRA KUMA R VERMA VS. DGIT (INV), (2011) 237 CTR 86 (ALL), IT WAS HELD THAT T HERE WAS NO OCCASION FOR THE SETTLEMENT COMMISSION TO PASS ANY ORDER OF ABATEMENT, AS THE ABATEMENT WAS BY OPERATION OF LAW , BUT IT WAS THE OBLIGATION OF THE AO TO PASS THE ASSESSMENT ORD ER WITHIN THE STATUTORY PERIOD. LACK OF KNOWLEDGE ON PART OF AO C OULD NEVER BE A GOOD GROUND FOR EXTENDING THE PERIOD OF LIMITATION IN VIEW OF THE SPECIFIC STATUTORY PROVISION OF SEC. 153(4). 17. THE ID. CIT(A) CONCURRED WITH THE AO'S STAND POINT, AT PAGE 8, PARA 4 OF HIS ORDER, WITHOUT STATING AS TO HOW THE ASSESSEES STAND POINT WAS NOT CORRECT. 18. AS SUCH, THE ASSESSMENT IS CLEARLY BARRED BY TIME. IT IS, THEREFORE, HELD TO BE VOID AB INITIO, HIT BY LIMITA TION. ACCORDINGLY, IT IS CANCELLED. AS A CONSEQUENCE, THE CIT(A)S ORDER ALS O DOES NOT SURVIVE AND IT IS ALSO CANCELLED. IT(SS) NO.02/ASR/2015 19. THIS IS ASSESSEES APPEAL AGAINST THE PENAL TY OF RS.61,90,730/- LEVIED U/S 158BFA (2) OF THE INCOME TAX ACT, AS A CONSEQUENCE OF THE ADDITIONS MADE BY THE AO, WHICH ADDITIONS ARE THE SUBJECT MATTER OF GROUND NO.2 IN IT SS(5)/ASR/2 012 (SUPRA). SINCE THE ASSESSMENT ITSELF STANDS CANCELLED, AS AB OVE, THE PENALTY ALSO DOES NOT SURVIVE. IT IS ALSO CANCELLED. 20. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. 5. THE FACTS OF THE INSTANT CASES ARE EXACTLY SIMILAR TO T HE CASE REFERRED ABOVE DECIDED BY CO-ORDINATE BENCH DECISION IN THE ASSESSEE'S FIRM CASE, HENCE THE INSTANT CASES ARE SQUARELY COVERE D BY THE SAID DECISION, BECAUSE IN THIS CASE APPLICATION FILE D ON 27-12- IT(SS)A NO. 04/ASR/ 2012 IT(SS) A NO.01/ ASR/2015 5 2001 BEFORE THE SETTLEMENT COMMISSION, WAS ADMITTED BY THE SETTLEMENT COMMISSION ON 9-05-2002 U/S.245D(L), HOWEVE R ADMITTED TAX WAS NOT PAID ON OR BEFORE 31.7.2007 AND THEREFOR E AS PER AMENDMENT AMENDED PROVISIONS OF SECTION 245D(2D) R/W 245HA(II) AMENDED BY FINANCE ACT 2007 W.E.F. 01-07-20017, THE CASE STOOD ABATED AND THEREFORE THE AO WAS SUPPOSED TO FRAME THE ASSESSMENT, WITHIN ONE YEAR OF THE SPECIFIED DATE I.E. ONLY UPTO 31.03.2008, HOWEVER THE ASSESSMENT ORDER WAS PASSED ONLY ON 31.03.200 9 WHICH IS BEYOND THE PERIOD PRESCRIBED BY LAW AND THEREFORE E NTAIL QUASHING, CONSEQUENTLY THE ORDERS UNDER CHALLENGE WHEREBY THE LD. CIT(A) AFFIRMED THE QUANTUM ADDITION IS LIABLE TO BE SET ASI DE. PENALTY ORDER IS THE OUTCOME OF ADDITION/ASSESSMENT ORDER, WHICH IN THE INSTANT CASE IS LIABLE TO BE QUASHED, CONSEQUENTLY PENALTY ORDER ALSO LIABLE TO BE SET ASIDE, HENCE WE QUASH THE ASSESSMENT AND PENALTY OR DER. 6. IN THE RESULT, APPEALS FILED BY THE ASSESSEE STANDS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/0 9/2019 SD/- SD/- (B.R.BASKARAN) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 04/09/2019 /PK/ PS. COPY FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THEN CIT(APPEALS) 5. SR DR, I.T.A.T. AMRITSAR 6. GUARD FILE TRUE COPY BY ORDER