Shri V.R.Senniappan, Velur V. ACIT, Salem

ITSSA 12/CHNY/2009

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7701 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-02-2012
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 29-02-2012
• Assessment Year: misc
• Appeal Filed On: 06-04-2009
• Court: TRIBUNAL
• Department Lawyers: ASHOK KUMAR C I T CR
• Assessee Lawyers: J STANLY HEBSON SINGH
• Keywords: Search and seizure; Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENN AI BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER .. IT(SS)A NO.12/MDS./2009 BLOCK PERIOD: 1.4.96 TO 12.12.02 V.R.SENNIAPPAN R.GANESAN & OTHERS, 1/218,NORTH STREET, PALLAPATTI VILALGE, PARAMATHY,VELUR TALUK VS. THE ASSISTANT COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE, SALEM. PAN ASEPS 6512 P (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI J.STANLY HEBSON SINGH ADVOCATE DEPARTMENT BY : SHRI ASHOK KUMAR, C.I.T. CR DATE OF HEARING : 29.02.12 DATE OF PRONOUNCEMENT : 29. 02.12 O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(A),SALEM IN APPEAL NO.52 /07-08 DATED 20.01.2009 FOR THE BLOCK PERIOD 01.04.1996 TO 12.12.2002. SHRI J.STANLY HEBSON SINGH, ADVOCATE , REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI ASHO K KUMAR, LD. C.I.T. D.R. REPRESENTED ON BEHALF OF THE REVENU E. ITSS.12 /MDS/09 2 2. IT WAS SUBMITTED BY THE LD. AR THAT THERE WAS A SEARCH AND SEIZURE OPERATION ON THE PREMISES OF ONE SHRI R .GANESAN ON 12.12.2002. IT WAS SUBMITTED THAT IN THE COURSE OF SEARCH IN THE CASE OF SHRI R.GANESAN, CERTAIN DOCUMENTS WERE FOUND WHICH SHOWED CERTAIN CAPITAL CONTRIBUTION BY SHRI R .GANESAN AND FOUR PERSONS. IT WAS THE SUBMISSION THAT AS A CONSEQUENCE OF THE SAID DOCUMENT, A NOTICE U/S.158B D WAS ISSUED ON 17.02.2005 ON THE ASSESSEE IN THE STATUS OF ASSOCIATION OF PERSONS. IT WAS THE SUBMISSION TH AT SHRI R.GANESAN WAS THE OFFICIAL LICENSEE OF QUARRYING TH E SAND FROM PALAPATTI REACH AS PER THE REGISTERED LEASE DOCUMEN T BETWEEN THE ASSESSEE AND THE COLLECTOR OF NAMAKKAL DATED 18 .12.2002. IT WAS THE SUBMISSION THAT ON THE BASIS OF THE SAID DOCUMENT THE INCOME FROM THE SAND QUARRYING BUSINESS WAS ASS ESSED IN THE HANDS OF THE ASSESSEE. IT WAS THE SUBMISSION T HAT AS THE SEARCH IN THE CASE OF SHRI R.GANESAN HAD TAKEN PLAC E ON 12.12.02, THE ASSESSMENT IN THE CASE OF SHRI R.GANE SAN WAS COMPLETED ON 31.01.05. IT WAS THE SUBMISSION THAT THE NOTICE U/S.158BD WAS ISSUED ON 17.02.05, WHICH WAS BEYOND TWO YEARS PROVIDED U/S.158BE AS ALSO IN VIEW OF THE DE CISION OF THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF MANOJ AGGARWAL REPORTED IN 113 ITD 377 (DEL.)(SB), NOTICE U/S.158BD ITSS.12 /MDS/09 3 WAS LIABLE TO BE HELD TO BE INVALID. IT WAS FURTHE R SUBMISSION THAT THE VIEW EXPRESSED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MANOJ AGARWAL HAD ALSO BEEN APPROVED BY THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF MRIDUL A, PROP. DHRUV FABRICS REPORTED IN 335 ITR 266. IT WAS THE SUBMISSION THAT THE ORDER OF THE COMMISSIONER OF INCOME TAX(A) WAS LIABLE TO BE REVERSED AND THE ASSESSMENT ORDER QUAS HED. IN REPLY LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE COMMISSIONER OF INCOME TAX(A) AND THE ASSESSING OFF ICER. IT WAS THE SUBMISSION THAT THE PROVISIONS OF SEC.158BE WOULD NOT APPLY TO THE PROCEEDINGS U/S.158BD. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. PERUS AL OF THE ORDER OF BLOCK ASSESSMENT OF SHRI R.GANESAN, AN INDIVIDUAL, SHOWS THAT ON THE BASIS OF THE SAME EVI DENCES BEING CGKN/B&D/S-1 & 2 AN ADDITION REPRESENTING THE EARNINGS FROM SAND QUARRY BUSINESS HAS BEEN ASSESSE D THERE. PERUSAL OF THE ASSESSMENT ORDER OF THE PRESENT ASSE SSEES CASE SHOWS THAT U/S.158BD THE SAME EVIDENCE HAS BEE N USED TO MAKE THE ADDITION. THE QUANTUM OF ADDITION ON A CCOUNT OF SAND QUARRY BUSINESS MADE IN THE HANDS OF SHRI R.GA NESAN, AN INDIVIDUAL, IS THE SAME. ADMITTEDLY FOR THE PUR POSE OF ITSS.12 /MDS/09 4 INVOKING THE PROVISIONS OF SEC.158BD, SATISFACTION HAS TO BE RECORDED. THERE SHOULD BE A SATISFACTION ON THE PAR T OF THE ASSESSING OFFICER THAT THE INCOME BELONGED TO THE A SSESSEE. IN THE PRESENT CASE, THE ASSESSING OFFICER COMPLET ING THE ASSESSMENT U/S.158BC IN THE CASE OF SHRI R.GANESAN, AN INDIVIDUAL, HAS CATEGORICALLY FOUND THAT THE INCOM E BELONGS TO SHRI R.GANESAN. NOW TO TURN ROUND AND SAY THAT THER E IS A SATISFACTION THAT THE INCOME BELONGS TO THE AOP WOU LD BE FAR FETCHED. THUS, IT WOULD HAVE TO BE INFERRED THAT THERE IS NO SATISFACTION ON THE PART OF THE ASSESSING OFFICER, WHEN ISSUING THE NOTICE U/S.158BD ON THE ASSESSEE IN THE STATUS OF AOP, ESPECIALLY WHEN THE ASSESSMENT IN THE CASE OF SHRI GANESAN HAS ALREADY BEEN FRAMED MAKING THE ADDITION. ON TH IS GROUND ALONE, IN VIEW OF THE DECISION OF THE HONBLE SUPRE ME COURT IN THE CASE OF MANISH MAHESHWARI, THE NOTICE ISSUED U/ S.158BD WOULD BE LIABLE TO BE HELD INVALID AND WE DO SO. E VEN TAKING THE SUBMISSIONS MADE BY THE LD.A.R. THAT THE NOTIC E U/S.158BD IS BEYOND THE PERIOD OF TWO YEARS FROM T HE DATE OF SEARCH, IT IS NOTICED THAT THIS VIEW ALSO IS SUPPOR TED BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF MANOJ AGARWAL REFERRED TO SUPRA, WHICH IS ALSO APPR OVED BY THE HONBLE PUNJAB AND HARAYANA HIGH COURT IN THE C ASE OF ITSS.12 /MDS/09 5 MRIDULA PROP.DHRUV FABRICS REFERRED TO SUPRA. THE DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT IS ALSO THE ONLY DECISION ON THE ISSUE. NO OTHER DECISION TO THE CON TRARY HAS BEEN PLACED BEFORE US. IN THE CIRCUMSTANCES, RESPEC TFULLY FOLLOWING THE PRINCIPLES LAID DOWN BY THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF MRIDULA PROP.DHRU V FABRICS REFERRED TO SUPRA, IT IS HELD THAT THE NOTICE ISSUE D U/S.158BD IS BARRED BY THE LIMITATION AND CONSEQUENTLY BAD IN LA W. THUS, EVEN ON THIS GROUND THE ASSESSMENT PASSED IN CONSEQ UENCE OF NOTICE U/S.158BD ON 17.02.05 IS LIABLE TO ANNULL ED AND WE DO SO. IN THE CIRCUMSTANCES, THE APPEAL OF THE ASS ESSEE IS ALLOWED. 4. IN RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH FEBRURAY, 2012. SD/- SD/- ( N.S.SAINI ) (GEORGE MATHAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 29 TH FEBRUARY, 2012. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE ITSS.12 /MDS/09 6