Smt. Kusum Lata Sarda, JODHPUR V. DCIT, NAGAUR

ITSSA 12/JODH/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9361 (ITAT-JODHPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-06-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-05-2013
• Assessment Year: misc
• Appeal Filed On: 13-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Assessee Lawyers: N R MERTIA
• Keywords: Unexplained investment; Loose papers; Document seized; Block assessment
• Section: 142(1); 132; 15

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ITSSA NO. 12/JODH/2010 BLOCK PERIOD : 1997-98 TO 2003-04 PAN: AMPPS 7319 P SMT. KUSUM LATA SARDA VS. THE DCIT L/H OF AND W/O LATE SHRI RAMAVTAR SHARDA CIRCLE PROP: M/S BINACO MARBLE WORKS, NAGAUR NEARR RAM DEVRA TEMPLE, MAKRANA (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.R.MERTIA DEPARTMENT BY : SHRI G.R. KOKANI DATE OF HEARING : 01-05-2013 DATE OF PRONOUNCEMENT :19-06-2013 ORDER PER N.K. SAINI, A.M. THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 01-10-2010 OF THE LD. CIT(A), CENTRAL, JAIPUR . FOLLOWING GROUNDS HAVE B EEN RAISED IN THIS APPEAL. 1 THE IMPUGNED ORDER U/S 250 DATED 01.10.2010 IN ITA NO. 120/07-08 MADE BY LEARNED CIT (A), CENTRAL, JAIPUR IS BAD IN LAW AND BAD IN FACTS, THUS, LEARNED CIT (A) ERRED I N MAINTAINING THE ASSESSMENT ORDER U/S 158BD DT. 25.07.2007 PASSED BY D.CIT. CIRCLE, NAGAUR, AS VALID IN LAW AND ON MERIT OF THE CASE. 2 THAT THE LD. CIT (A) HAS ERRED AND WAS UNJUSTIFI ED IN GIVING FINDING THAT THE ORIGINAL DOCUMENT SEIZED WE RE FORWARDED /TRANSMITTED TO THE LD. A.O. OF APPELLANT AS REQUIR ED U/S 158BD OF THEACT. THE FINDING IS WRONG ON FACTS. 2 3. THAT THE LD. CIT (A) HAS ERRED AND WAS UNJUSTIFI ED IN GIVING THE FINDING FOR RECORDING OF SATISFACTION REQUIRED BY S ECTION 158BD OF THE ACT AS VALID ONE. 4. THAT THE LD. CIT(A) HAS ERRED AND WAS UNJU STIFIED IN HOLDING AND APPROVING FINDING OF LD. A.O. RELATING TO THE APPEARANCE OF THE NAME OF THE LATE SHRI RAMAVTAR SHARDA, IN THE STATEMENT RECORDED, DURING THE COURSE OF SEARCH OF SH. NARVIR SING PAR MAR, WHEREAS NO NAME OF APPELLANT APPEARED IN THE RELEVANT COPY OF STATEMENT PROVIDED TO THE APPELLANT, AS WAS ALLEGED. 5. THAT THE LD. CIT (A) ERRED AND WAS UNJUSTIFIED I N HOLDING THAT THE PROCEEDINGS U/S 158BD WAS VALID AS THE NOTICE I SSUED ITSELF WAS VALID U/S 158BD/158BC. THE ID. CIT (A) ALSO ERRED I N HOLDING THAT THE BLOCK PERIOD AS WAS MENTIONED ON THE NOTICE U /S 142(1) DT. 12 TH JUNE, 2007, THEREFORE, IT IS TO BE TREATED AS THE B LOCK PERIOD WAS ALSO MENTIONED ON THE NOTICE ISSUED U/S 158 BD/158BC OF THE ACT. 6. THAT THE ID. CIT (A) ERRED AND WAS UNJUSTIFIED I N HOLDING THAT THE NOTICE U/S 158BD WAS VALID IN VIEW OF SECTION 292B OF THE ACT. 7. THAT THE ID. CIT(A) ERRED IN HOLDING THAT IMPUGN ED ASSESSMENT PROCEEDINGS WERE NOT BARRED BY LIMITATION WHEREAS I N VIEW OF THE LAW AND ALSO BINDING JUDICIAL PRONOUNCEMENTS THE SAME W AS BARRED BY LIMITATION. 8. THAT, IN THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN VIEW OF THE MATERIAL AVAILABLE ON RECORD THE LD. CIT (A) ERRED IN MAINTAINING THE ADDITION OF RS. 1,00,000/- SOLELY ON ASSUMPTION AND PRESUMPTION AND BY RELYING ON STATEMENT OF THIRD PARTY IN WHICH THERE WAS NO MENTION OF APPELLANT NAME AND ON THE CONTRARY THE STATEM ENT RELIED UPON HAD SUPPORTED THE CASE OF THE APPELLANT. 9. THAT THE LD. A.O. AND THE CIT (A) OUGHT NOT TO H AVE MADE THE IMPUGNED ADDITION OF RS. 1,00,000/-. THE HON'BLE TR IBUNAL MAY VERY KINDLY DELETE THE ADDITION BY QUASHING THE ORDER. 3 10. THAT APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D OR DELETE THE GROUNDS HERE IN THE ABOVE TAKEN ON OR BEFORE THE HE ARING. 11. THE APPELLANT, THEREFORE, MOST RESPECTFULLY PRA YS THAT HER APPEAL MAY KINDLY BE ALLOWED. 2.1 VIDE GROUND NOS. 1 TO 7, THE ASSESSEE HAS CHAL LENGED THE VALIDITY OF BLOCK ASSESSMENT ORDER PASSED U/S 158BD READ WITH SECTION 158BC OF THE ACT. 2.2 THE FACTS OF THE CASE IN BRIEF ARE THAT A SEARC H AND SEIZURE ACTION U/S 132 OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED TO AS T HE ACT IN SHORT ) WAS CARRIED OUT AT THE OFFICE PREMISES OF M/S PARMAR BUILDERS & DEVELOPES, SILVASSA AT I GURUDEV COMPLEX, SAYALI ROAD, SILVASSDA. THE ASSESSING OFFICER OBSER VED THAT DURING THE COURSE OF SEARCH, ANNEXURE B-1 PAGE NOS. 1 TO 8 WAS FOUND WHICH CONTA INED THE NAME OF SHRI RAMAVATAR SARDA TO WHOM UNACCOUNTED CONSIDERATION WAS PAID BY THE PERSONS AGAINST THEIR NAMES. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE H AD MADE UNACCOUNTED INVESTMENT IN THE FLATS IN GURUDEV COMPLEX-II, BUILDING H, SILVASDA A S MENTIONED IN COLUMN AS UNACCOUNTED CONSIDERATION AND ACCORDINGLY PROCEEDINGS U/S 158 BD OF THE ACT WERE INITIATED AND THE ASSESSEE WAS REQUIRED TO FURNISH THE RETURN OF THE BLOCK PERIOD BY 13-06-2006. BUT NO RETURN OF INCOME FOR THE BLOCK PERIOD WAS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER FRAMED THE ASSESSMENT AT AN INCOME OF RS. 1.00 LAC, CONSID ERING THE SAME AS UNDISCLOSED INVESTMENT IN PLOT NO. H/B-11, GURUDEV COMPLEX-II, SILVASSA. 2.3 THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT( A) AND CHALLENGED THE SATISFACTION ACQUIRED BY THE ASSESSING OFFICER U/S 158BD OF THE ACT BY STATING THAT THERE BEING NO REQUISITION U/S 132A OF THE ACT BY THE ASSESSING OF FICER BEFORE FRAMING ASSESSMENT ORDER AND THAT IN THE NOTICE SO ISSUED U/S 158BD ON 15-07 -2005, THE BLOCK PERIOD WAS NOT MENTIONED AND ONLY BLOCK PERIOD WITH DATE AS 17-07- 2002 WAS MENTIONED WHICH DID NOT QUANTIFY THE COMPLETE BLOCK PERIOD. IT WAS FURTHER STATED THAT NOTICES ALSO DID NOT SPECIFY THE STATUS OF THE ASSESSEE TO WHOM NOTICES WERE ISSUED. IT WAS CONTENDED THAT VIDE LETTER DATED 4 17-08-2005, THE ASSESSEE REQUESTED TO PROVIDE THE R EASONS RECORDED FOR ISSUING THE NOTICE AND VIDE SUBSEQUENT LETTER DATED 17-05-06 / 30-05-0 6 OF ASSESSING OFFICER, THE ASSESSEE WAS REQUESTED TO FURNISH THE RETURN FOR THE BLOCK PERIO D BY 13-06-2006 BUT EXTENSION WAS SOUGHT. IT WAS STATED THAT ANOTHER NOTICE U/S 142 ( 1) DATED 12-06-2007 WAS ISSUED FOR THE BLOCK PERIOD AND TILL THAT DATE I.E. 12-06-2007, TH E ASSESSEE WAS NOT AWARE ABOUT THE PROCEEDINGS OF BLOCK PERIOD AND EVEN FROM THE INTER VENING COMMUNICATION LETTER DATED 17- 05-2006 IT SEEMS THAT THE INFORMATION WAS PASSED ON BY THE ACIT CENTRAL CIRCLE- SURAT TO THE ASSESSING OFFICER OF THE ASSESSEE AND NO DOCUME NTS WERE PASSED ON. ACCORDINGLY , NO RETURN WAS FILED BY THE ASSESSEE BECAUSE OF THE FAC TS OF INVALIDITY AND ACTION BECOMING BARRED BY LIMITATION AND MOREOVER LOOSE PAPERS PAGE NO. 20 TO 24 REVEALED THAT THERE WAS NO NAME OF THE ASSESSEE ON THOSE PAPERS AND FACTUALLY THE ASSESSEE HAD NOT GIVEN ANY UNACCOUNTED MONEY TO M/S PARMAR CONSTRUCTION. 2.4 THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE OBSERVED THAT NOTICE DATED 15-07-2005 WAS ISSUED FOR THE BLOCK P ERIOD REQUIRING THE ASSESSEE TO FURNISH THE RETURN OF INCOME AND IN THE SAID NOTICE, BLOCK PERIOD WITH DATE 17-07-2002 WAS MENTIONED WHICH IMPLIED THAT NOTICE WAS FOR THE BLO CK PERIOD ENDING ON 17-07-2002. HE FURTHER OBSERVED THAT THE ASSESSEE DID NOT OBJECT T O THIS NOTICE ON THE GROUND OF NON-MENTION OF BLOCK PERIOD BUT IN REPLY TO IT, DETAILS OF REAS ONS FOR ISSUE OF NOTICE WERE ASKED FOR. ACCORDING TO THE LD. CIT(A), THE ASSESSEE WAS COMMU NICATED THE REASONS FOR ISSUE OF SUCH NOTICE U/S 158BD OF THE ACT VIDE LETTER DATED 17-05 -2006/ 30-05-2006. THEREFORE, THE NOTICE U/S 158BD COULD NOT BE HELD TO BE INVALID. T HE LD. CIT(A) HELD THAT IN VIEW OF THE PROVISIONS U/S 292B OF THE ACT, SUCH NOTICE SHALL N OT BE DEEMED TO BE INVALID MERELY BY REASONS OF THE ALLEGED MISTAKE AS THE NOTICE IS IN SUBSTANCE AND IN EFFECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. THE LD. CIT(A) POINTED OUT THAT NOTICE WAS ISSUED FOR THE BLOCK PERIOD ENDING ON 17-07-200 2 WHICH WAS MENTIONED INSTEAD OF EXPLICIT PERIOD OF BLOCK PERIOD FROM 01-04-1996 TO 17-07-2002 BEING MENTIONED. THE LD. 5 CIT(A) HELD THAT THERE WAS NO TIME LIMIT PROVIDED FOR ISSUANCE OF NOTICE U/S 158BD OF THE ACT AND THAT THE TIME LIMIT HAD BEEN PROVIDED FOR C OMPLETION OF ASSESSMENT. THE LD. CIT(A) ALSO HELD THAT IN ASSESEE'S CASE THE NOTICE U/S 15 8BD OF THE ACT WAS ISSUED ON 15-07-2005 AND THE TIME LIMIT FOR COMPLETION OF THE ASSESSMENT AS PRESCRIBED IN SECTION 158BE OF THE ACT WAS 31-07-2007 AND THE ORDER WAS PASSED ON 25-0 7-2007. THEREFORE, IT WAS NOT BARRED BY LIMITATION. THE LD. CIT(A) ALSO REJECTED THE CON TENTION OF THE ASSESSEE THAT BOOKS OF ACCOUNT OR DOCUMENTS WERE NOT PASSED ON TO THE ASSE SSING OFFICER, WHICH IS THE CONDITION OF ISSUANCE OF NOTICE U/S 158BD OF THE ACT BY STATI NG THAT THE ASSESSING OFFICER OF THE ASSESSEE HAD NOT ONLY RECEIVED THE RELEVANT DOCUMEN TS FROM THE ASSESSING OFFICER HAVING JURISDICTION OVER PARMAR BUILDER GROUP OF CASES BUT HAD EVEN SUPPLIED THOSE COPIES OF DOCUMENTS TO THE ASSESSEE VIDE LETTER DATED 12-07-2 007. 2.5 NOW THE ASSESSEE IS IN APPEAL. 2.6 THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT NOTICE DATED 15-07-2005 PURPORTEDLY ISSUED U/S 158BD READ WITH SECTION 158BC WAS NOT AT ALL A NOTI CE U/S 158BD OF THE ACT BECAUSE THE SAME DID NOT DISCLOSE ANY SATISFACTION HAVING BEEN RECORDED ON ANY DATE OR PROCEEDINGS DURING WHICH IT WAS SO RECORDED AND ALSO DID NOT GI VE ANY COMMUNICATION OF ANY MATERIAL ON WHICH SATISFACTION WAS BASED AND DID NOT SAY AS TO WHETHER THE SAID SEIZED MATERIAL WAS HANDED OVER TO THE ASSESSING OFFICER OF THE ASSESSE E. REFERENCE WAS MADE TO PAGE NO. 23 OF THE ASSESEE'S PAPER BOOK WHICH IS THE COPY OF NOTIC E DATED 15-07-2005, ISSUED U/S 158BD / 158BC OF THE ACT. RELIANCE WAS PLACED ON THE JUDGE MENT OF HON'BLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS ACIT & ANR. (2007), 28 9 ITR 341. IT WAS CONTENDED THAT NO SATISFACTION WAS RECORDED IN THE CASE OF THE PER SONS SEARCHED. THEREFORE, THE NOTICE U/S 158BD OF THE ACT IN THE CASE OF ASSESSEE WAS INVALI D. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS. 1. V.B. GIRI VS ACIT (2009) 126 TTJ (JD) 217 6 2. ACIT VS FASHION FABRICS (2010) 134 TTJ (CHD) (UO ) 60. 3. CIT VS RAJ PAL BHATIA (LATE), 333 ITR 315 (DEL.) 2.7 IN HIS RIVAL SUBMISSIONS, THE LD. D.R. FOR THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 2.8 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIALS AVAILABLE ON RECORD. IN THE PRESENT CASE, IT APPEARS THAT WHILE ISSUING THE NOTICE U/S 158BD OF THE ACT, COPY OF WHICH IS PLACED AT PAGE N O. 23 OF THE ASSESSEE'S PAPER BOOK, THE ASSESSING OFFICER HAD NOT MENTIONED THE BLOCK PERIO D AND ALSO HAD NOT MENTIONED WHETHER THE SAID NOTICE WAS U/S 158BD OR 158BC OF THE ACT BECAU SE BOTH THE SECTIONS ARE PRINTED ON THE SAID NOTICE. IN THE PRESENT CASE, IT IS ALSO NOT BR OUGHT ON RECORD AS TO WHETHER ANY SATISFACTION WAS RECODED BY THE ASSESSING OFFICER WHO FRAMED THE ASSESSMENT U/S 158BC OF THE ACT IN THE HANDS OF THE PERSONS SEARCHED. ON A SIMILAR ISSUE, THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS RAJ PAL BHATIA (LATE), 333 ITR 314 HELD AS U NDER:- BEFORE INVOKING THE PROVISIONS OF SECTION 158BD O F THE INCOME TAX ACT, 1961, THE ASSESSING OFFICER OF THE PERSON SEAR CHED U/S 132(1) MUST SATISFY HIMSELF THAT SOME UNDISCLOSED INCOME BELONGS TO A P ERSON OTHER THAN THE PERSONS WITH RESPECT TO WHOM SEARCH WAS MADE U/S 13 2(1) OF THE ACT. SUCH SATISFACTION MUST BE BASED ON MATERIAL FOUND IN THE COURSE OF SEARCH. IN THE ABSENCE OF ANY SUCH SATISFACTION (WHICH IS TO BE RE CODED IN WRITING) THE CONCERNED ASSESSING OFFICER DOES NOT GET ANY JURISD ICTION TO ASSESS THAT OTHER PERSON BY INVOKING SECTION 158BD OF THE ACT. FURTHE R, THE SATISFACTION OF THE ASSESSING OFFICER HAS TO BE IN RESPECT OF THE FOLLO WING ASPECTS: (I) THERE SHOULD BE UNDISCLOSED INCOME WITHIN TH E MEANING OF SECTION 158B(B) REFERABLE TO THE ASSETS OR BOOKS/ D OCUMENTS FOUND SEIZED REQUISITIONED; (II) THERE SHOULD BE A FINDING BY THE ASSESSING OFF ICER THAT THERE WAS UNDISCLOSED INCOME IN SUCH ASSETS OR BOOKS OF A CCOUNT OR DOCUMENTS OF THE SEARCHED PERSON; AND 7 (III) THAT SUCH UNDISCLOSED INCOME BELONGED TO THE PERSON OTHER THAN THE ONE SEARCHED . 2.9 IN THE PRESENT CASE ALSO, NOTHING IS BROUGHT ON RECORD TO SUBSTANTIATE THAT DURING THE COURSE OF SEARCH CARRIED OUT AT THE OFFICE PREMISES OF M/S PARMAR BUILDERS & DEVELOPERS, SILVASSA, ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS O R OTHER ASSETS PERTAINING TO THE ASSESSEE WAS FOUND OR SEIZED AND THE ASSESSING OFFICER HAVIN G JURISDICTION OVER THE CASE OF M/S PARMAR BUILDERS & DEVELOPERS RECORDED ANY SATISFACTION WHI CH IS MANDATORY REQUIREMENT THAT THE ASSESSEE HAD UNDISCLOSED INCOME. THEREFORE, THE PRO CEEDINGS U/S 158BD OF THE ACT WERE NOT VALID. 2.10 SIMILARLY, THE HON'BLE SUPREME COURT IN THE CA SE OF MANISH MAHESHWARI VS CIT, 289 ITR 341 HAS HELD AS UNDER:- BEFORE THE PROVISIONS OF SECTION 158BD OF THE INCO ME TAX ACT, 1961 ARE INVOKED AGAINST A PERSON OTHER THAN THE PERSON WHOSE PREMISES HAVE BEEN SEARCHED U/S 132 OR DOCUMENTS AND OTHER ASSETS HAVE BEEN REQUISITIONED U/S 132A, THE CONDITIONS PRECEDENT HAVE TO BE SATISFIED . IT HAS BEEN FURTHER HELD THAT :- WHERE THE PREMISES OF A DIRECTOR OF A COMPANY AND HIS WIFE WERE SEARCHED U/S 132 OF THE INCOME-TAX ACT, 1961 AND A BLOCK ASSESSMENT HAD TO BE DONE IN RELATION TO THE COMPANY, THE ASSESSING O FFICER HAD TO (I) RECORD HIS SATISFACTION THAT ANY OTHER UNDISCLOSED INCOME BEL ONGED TO THE COMPANY, AND (II) HAND OVER THE BOOKS OF ACCOUNT AND OTHER DOCUM ENTS AND ASSETS SEIZED TO THE ASSESSING OFFICER HAVING JURISDICTION AGAINST T HE COMPANY. 2.11 IN THE PRESENT CASE ALSO, THE CONDITIONS PRECEDENT HAD NOT BEEN SATISFIED BECAUSE THE ASSESSING OFFICER HAVING JURISDICTION OVER THE CASE OF M/S PARMAR BUILDERS & DEVELOPERS, SILVASSA IN WHOSE CASE THE SEARCH WAS CONDUCTED, RE CORDED HIS SATISFACTION THAT ANY UNDISCLOSED INCOME BELONGED TO THE ASSESSEE OR ANY BOOKS OF ACCOUNT / OTHER DOCUMENTS OF THE ASSESSEE SEIZED FROM M/S PARMAR BUILDERS & DEVELOPE RS, SILVASSA WERE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSE SSEE. THEREFORE, IN VIEW OF ABOVE 8 DISCUSSIONS AND THE RATIO LAID DOWN IN THE AFORESAI D REFERRED TO JUDICIAL PRONOUNCEMENTS, WE ARE OF THE VIEW THAT NOTICE ISSUED TO THE ASSESSEE U/S 158BD OF THE ACT WAS NOT VALID AND SUBSEQUENT PROCEEDINGS WERE INVALID. WE THEREFORE, QUASH THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER. 2.12 SINCE WE HAVE QUASHED THE ASSESSMENT ORDER PA SSED BY THE ASSESSING OFFICER, THEREFORE, ANOTHER GROUNDS RAISED BY THE ASSESSEE B ECOMES OF ACADEMIC INTEREST AND NO FINDINGS ARE REQUIRED TO BE GIVEN ON OUR PART. 3.0 IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19-06 -2013.) SD/- SD/- (HARI OM MARATHA) (N.K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 19 TH JUNE, 2013 MISHRA COPY TO:- 1.THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE LD. CIT(A) 5. THE DR 6. THE GUARD FILE ASSISTANT REGISTRAR ITAT, JODHPUR