PARADISE HOME SHELTERS P. LTD, ULHASNAGAR V. DCIT CEN CIR 1, THANE

ITSSA 10/MUM/2010

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8371 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 21-04-2011
• Assessment Year: misc
• Appeal Filed On: 17-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJIR KUMAR SINHA
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 143(3); 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI BEFORE SHRI D.K. AGARWAL (J.M.) AND SHRI T.R. SOOD ( A.M.) IT(SS)A NO. 10/MUM /2010 BLOCK PERIOD 01.04.1996 TO 08.05.2002 M/S PARADISE HOME SHELTERS PVT. LTD., C/O MADHU BATHIJA DIRECTOR AMIT ASHIANA, NEAR BRAHMAKUMARI ASHRAM, GOAL MAIDAN BHAJI MARKET, ULHASNAGAR 421 001. PAN : AABCP 2402P VS. DCIT, CENTRAL CIRCLE - 1, THANE, 2 ND FLOOR, PAWAR INDUSTRIAL ESTATE, EDULJI ROAD, CHARAI, THANE 400 601. (APPELLANT) (RESPONDENT) IT(SS)A NO. 24/MUM /2010 BLOCK PERIOD 01.04.1996 TO 08.05.2002 DCIT, CENTRAL CIRCLE - 1, THANE, 2 ND FLOOR, PAWAR INDUSTRIAL ESTATE, EDULJI ROAD, CHARAI, THANE 400 601. VS. M/S PARADISE HOME SHELTERS PVT. LTD., IST FLOOR, NEW SHALIMAR CHS, NEAR IST ULHASNAGAR COURT, ULHASNAGAR . PAN : AABCP 2402P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIJAY MEHTA RESPONDENT BY : SHRI AJIR KUMAR SINHA O R D E R PER D.K. AGARWAL, J.M. THESE CROSS APPEALS BY THE ASSESSEE AND REVENUE AR E DIRECTED AGAINST THE ORDER DTD. 15.11.2009 PASSED BY THE LD. CIT(A) FOR THE A.Y. PERTAINING TO BLOCK PERIOD 1.4.1996 TO 8.5.2002. B OTH THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE. IT(SS)A 10/M/2010 & IT(SS)A 24/M/2010 M/S PARADISE HOME SHELTERS PVT. LTD . 2 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY DERIVES INCOME AS BUILDER AND DEVELOPER. A SEARCH A ND SEIZURE ACTION U/S132(1) OF THE INCOME TAX ACT, 1961 (THE ACT) WA S CARRIED OUT ON 8.5.2002 IN THE RESIDENTIAL PREMISES OF SHRI KANAYO PINJANI. SHRI KANAYO PINJANI IS CLOSE ASSOCIATES OF SHRI SRICHAND KUKREJ A, DIRECTOR OF M/S BHARAT UDYOG LTD. DURING THE COURSE OF SEARCH ACTI ON AT THE RESIDENCE OF SHRI KANAYO PINJANI, CERTAIN DOCUMENTS IN RESPECT O F M/S PARADISE HOMES SHELTERS PVT. LTD. THE ASSESSEE WERE FOUND AN D SEIZED. ACCORDINGLY, NOTICE U/S 158BD FOR THE BLOCK PERIOD 1.4.96 TO 8.5.02 WAS ISSUED AND SERVED UPON THE ASSESSEE. IN RESPONSE, THE ASSESSEE FILED NIL RETURN. HOWEVER, THE ASSESSMENT WAS COMPLETED AT AN UNDISCLOSED INCOME OF ` 10,770,505/- VIDE ORDER DATED 30.9.2008 PASSED U/S 158BD R.W.S. 143(3) OF THE ACT. ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE HAS RAISED VARIOUS GROUNDS CONTENDING INTER ALIA THAT T HE A.O. HAS NOT COMMUNICATED THE REASONS RECORDED FOR ISSUANCE OF N OTICE U/S 158 BD AND INFORMATION RECEIVED FROM THE A.O. OF SHRI KANA YO PINJANI AND HAS ALSO FAILED TO AFFORD OPPORTUNITY OF CROSS EXAMINAT ION OF THE POSSESSOR SRI KANAYO PINJANI INSPITE OF SPECIFIC REQUEST IN THIS REGARD MADE BY THE ASSESSEE. APART FROM THIS, THE ASSESSEE HAS ALSO C HALLENGED THE VARIOUS ADDITIONS MADE BY THE A.O. HOWEVER, THE LD. CIT(A) WITHOUT PROVIDING SATISFACTION NOTE, REASONS, INFORMATION AND OPPORTU NITY TO CROSS EXAMINE HAS HELD THAT THE ACTION OF THE A.O. IS WITHIN THE FOUR CORNERS OF LAW AND UPHELD THE SAME. ON OTHER ISSUES, ON MERITS, THE LD . CIT(A) ALLOWED PART RELIEF TO THE ASSESSEE. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE AND REVENUE BOTH ARE IN APPEAL BEFORE US. THE ASSESSEE IN ITS APPEAL, IN ALL THE GROUNDS CHALLENGED THE VALIDITY OF THE ORDER PA SSED BY THE A.O. U/S 158BD WITHOUT PROVIDING REASONS, SATISFACTION, INFO RMATION AND CROSS EXAMINATION. APART FROM THIS, THE ASSESSEE HAS ALS O CHALLENGED THE IT(SS)A 10/M/2010 & IT(SS)A 24/M/2010 M/S PARADISE HOME SHELTERS PVT. LTD . 3 SUSTENANCE OF VARIOUS ADDITIONS MADE BY THE A.O. TH E ASSESSEE IN THE ADDITIONAL OF APPEAL HAS ALSO CHALLENGED THAT THE N OTICE ISSUED U/S 158BD WAS BARRED BY LIMITATION. WHEREAS THE REVENUE IN ALL THE GROUNDS IS AGAINST THE RELIEF ALLOWED BY THE LD. CIT(A). 4. AT THE TIME OF HEARING, BOTH THE PARTIES HAVE AG REED THAT SINCE THE ASSESSEE WAS NOT PROVIDED REASONS, SATISFACTION, IN FORMATION AND CROSS EXAMINATION, THEREFORE, IN THE INTERESTS OF JUSTICE , ALL THE ISSUES MAY BE SET ASIDE TO THE FILE OF THE A.O. TO PROVIDE THE SA ME AND TO MAKE AFRESH ASSESSMENT ACCORDING TO LAW. 5. HAVING CAREFULLY HEARD THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND MERIT THAT THE A.O. WITHOUT PROVIDING REASONS, SATISFACTION, INFORMATIO N AND CROSS EXAMINATION MADE THE ASSESSMENT AND THE LD. CIT(A) HAS ALSO UPHELD THE SAME WITHOUT PASSING SPEAKING ORDER. SINCE THERE IS A GROSS VIOLATION OF RULE OF NATURAL JUSTICE, THEREFORE, WE ARE OF THE V IEW THAT IN THE INTERESTS OF JUSTICE, THE ORDERS PASSED BY THE REVENUE AUTHOR ITIES ON THIS ACCOUNT MAY BE SET ASIDE TO THE FILE OF THE A.O. AND ACCORD INGLY WE SET ASIDE THE ORDERS PASSED BY THE A.O. AND LD. CIT(A) AND RESTOR E ALL THE ISSUES TO THE FILE OF THE A.O. WHO SHALL DECIDE THE SAME AFRESH I N THE LIGHT OF OUR OBSERVATIONS HEREINABOVE AND ACCORDING TO LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE GRO UNDS INCLUDING THE ADDITIONAL GROUND TAKEN BY THE ASSESSEE AND THE REV ENUE ARE, THEREFORE, PARTLY ALLOWED FOR STATISTICAL PURPOSE. IT(SS)A 10/M/2010 & IT(SS)A 24/M/2010 M/S PARADISE HOME SHELTERS PVT. LTD . 4 6. IN THE RESULT, BOTH THE APPEALS STAND PARTLY ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 29.04.20 11. SD/ - (T.R. SOOD) ACCOUNTANT MEMBER SD/ - (D.K. AGARWAL) JUDICIAL MEMBER MUMBAI, DATED 29.04.2011. RK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- 35, MUMBA I 4. COMMISSIONER OF INCOME TAX, 25, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH C, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI IT(SS)A 10/M/2010 & IT(SS)A 24/M/2010 M/S PARADISE HOME SHELTERS PVT. LTD . 5 1 DRAFT DICTATED ON 2 1 .4.11 SR PS 2 DRAFT PLACED BEFORE AUTHOR ON 2 5 .4.11 SR PS 3 DRAFT PROPOSED & PLACE BEFORE THE 2 ND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY 2 ND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR PS 7 FILE SENT TO THE BENCH CLERK SR PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DESPATCH SR PS