Jayantilal Pravinkumar Co., Ahmedabad V. The ACIT,Cent.Circle-1(4), Ahmedabad

ITSSA 129/AHD/2007

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9244 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 15-06-2010
• Assessment Year: misc
• Appeal Filed On: 03-08-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV BATHAM
• Assessee Lawyers: R K JINDALAR
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Block assessment
• Section: 6

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI MAHAVIR SINGH, JM AND D.C.AGRAWAL, AM JAYANTILAL PRAVINKUMAR CO., KANDOI NI. KHADAKI, SANKI SGERU, MANEKCHOWK, AHMEDABAD. VS . ASSTT. CIT, CEN.CIR.1(4), AHMEDABAD. (APPELLANT) .. (RESPONDENT) APPELLANTS BY :- SHRI R. K. JINDAL,AR RESPONDENT BY:- SHRI GAURAV BATHAM, DR O R D E R PER D. C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST OR DER OF LD. CIT(A) RAISING FOLLOWING GROUNDS :- 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING TH E AOS ORDER LEVYING PENALTY U/S 158BFA(2). THE IMPUGNED ORDER I S ILLEGAL AND REQUIRED TO BE QUASHED. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING TH E AOS ORDER LEVYING PENALTY U/S 158 BFA(2) OF RS.9,58,085/- 2. THUS ONLY ISSUE INVOLVED IN THIS APPEAL IS THAT LD. CIT(A) HAS CONFIRMED PENALTY OF RS.9,58,085/- LEVIED U/S 158 B FA(2). IT(SS)A NO.129/AHD/2007 BLOCK PERIOD FROM 1/4/95 TO 17/7/2001 2 3. THE FACTS OF THE CASE ARE THAT A BLOCK RETURN WA S FILED BY THE ASSESSEE DECLARING UNDISCLOSED INCOME AT RS.NIL IN RESPONSE TO NOTICE ISSUED UNDER SECTION 158BD. SEARCH AND SEIZURE OPER ATIONS WERE CARRIED BY THE OFFICIALS OF ENFORCEMENT DIRECTORATE UNDER S ECTION 37(3) OF FEMA AS WELL AS BY INCOME-TAX DEPARTMENT U/S 132(1) OF I .T. ACT, 1961 ON THE LUGGAGE VAN OF ASHRAM EXPRESS ON 9.7.2001 WHICH WAS TAKEN ON LEASE BY JAGDISH GUJJAR & PRABHU G. JADHAV AND WHICH RESULTE D IN SEIZURE OF VALUABLES LIKE INDIAN CURRENCY, GOLD BISCUITS, SILV ER BARS, DIAMONDS, JEWELLERY VALUING RS.3,34,89,705/-. THIS INCLUDED I NDIAN CURRENCY OF RS.1.97 CRORES OUT OF WHICH A SUM OF RS.15,50,000/- WAS ATTRIBUTED TO THE ASSESSEE. ACCORDINGLY ADDITION OF RS.15,50,000/- WA S MADE IN THE UNDISCLOSED INCOME OF THE ASSESSEE. IT WAS CLAIMED BY AO THAT VIDE THEIR LETTER DATED 25.02.2005 THE ASSESSEE HAD OFFERED TH E SUM OF RS.15,50,000/- FOR TAXING THE SAME IN HIS BOOKS OF ACCOUNT FOR VARIOUS REASONS SUCH AS ABSENCE OF BOOKS OF ACCOUNT. THE AD DITION WAS ACCORDINGLY MADE AND PENALTY UNDER SECTION 158BFA(2 ) WAS ALSO INITIATED. A SHOW CAUSE NOTICE WAS ISSUED BY THE AO ON 1.3.2005 ASKING THE ASSESSEE TO FURNISH A REPLY BY 14.3.2005. A REP LY WAS FILED ON 16.3.2005 BY THE ACCOUNTANT OF THE ASSESSEE. THE AO DID NOT CONSIDER THE SAME AND LEVIED THE PENALTY. THE LD. CIT(A) IN A SH ORT ORDER CONFIRMED THE LEVY OF PENALTY BY OBSERVING AS UNDER :- 3. I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF LD. COUNSEL AS WELL AS GONE THROUGH THE RECORDS. IT HAS BEEN NOTICED TH AT THE APPELLANT HAS ACCEPTED THE UNDISCLOSED MONEY IN THE ABSENCE OF BO OKS OF ACCOUNTS DURING BLOCK ASSESSMENT PROCEEDINGS THROUGH LETTER DATED 25.02.2005. ALSO, AFFIDAVIT WAS FILED ON 13.03.2005 BEFORE THE AO THAT RS.15,50,000/- SEIZED DURING SEARCH WAS UNDISCLOSED INCOME OF THE APPELLANT. THEREFORE, THE APPELLANT HAD FURNISHED INACCURATE PARTICULARS OF INCOME KNOWINGLY AND DELIBERATELY WITH THE INTENTION TO CONCEAL TAXA BLE INCOME WHICH HAS ALSO CLEARLY PROVED MENS REA ON THE PART OF THE APP ELLANT. LD.COUNSEL ALSO RELIED UPON VARIOUS CASE LAWS WHICH ARE NOT APPLICA BLE IN THE PRESENT 3 CASE SINCE FACTS ARE DIFFERENT. KEEPING IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, THERE IS NO FORCE IN THE CONTENTIONS RAISED BY LD. COUNSEL WHICH ARE HEREBY REJECTED AND NO INTERF ERENCE IS CALLED FOR IN IMPOSITION OF PENALTY IN THIS CASE. HENCE APPEAL IS DISMISSED. 4. BEFORE US LD. AR FOR THE ASSESSEE SUBMITTED THAT LD. AO AND THE LD. CIT(A) DID NOT CONSIDER THE LETTER DATED 16.3.2005 SUBMITTED BY THE ASSESSEE WHEREIN IT WAS MENTIONED THAT FATHER OF TH E C.A. OF THE ASSESSEE HAD EXPIRED ON 16.3.2005 AND ACCORDINGLY THE ASSESS EE WAS UNABLE TO SUBMIT A PROPER EXPLANATION. HE REFERRED TO THE LET TER AT PAGE 215 OF THE PAPER BOOK AS UNDER :- JAYANTILAL PRAVINKUMAR & CO., KANDOI NI KHADAKI, SAKADISERI, IN FRONT OF B.D. COLLEGE, MANEKCHOWK, AHMEDABAD, DATED 16/3/2005. SUB: LETTER FOR DEMANDING TIME DEPUTY DIRECTOR OF INCOME-TAX HEMANT LEUVA CENTRAL CIRCLE 1(4) AHMEDABAD. I KINDLY REQUEST THAT, OUR FIRM JANATILAL PRAVINKUM AR & CO. HAS DATE OF 16 TH MARCH, 2005 FOR THE YEAR 2001-02 ASST. YEAR 2003-0 3 BUT AS MY LAWYER CA RAJENDRA JINDAS FATHER IS PASSED AWAY TO DAY, WHO WAS SUFFERING FROM CANCER. AS HIS FATHER IS DEAD TODAY SO MY CA RAJENDRA JINDAL CANNOT COME FOR 5 TO 6 DAYS. SO ITS REQUEST ED YOU SIR, TO GRANT US TIME LIMIT FOR 5 TO 6 DAYS. YOURS FAITHFULLY FOR JAYANTILAL PRAVINKUMAR & CO. MEHTAJI CHHOTALAL AMBALAL PATEL RUBBER STAMP OF CENTRAL CIRCLE 1(4) 4 ON THIS BASIS IT WAS ARGUED THAT REASONABLE OPPORTU NITY OF BEING HEARD HAS NOT BEEN GIVEN TO THE ASSESSEE AND THERE IS A VIOLA TION OF PRINCIPLES OF NATURAL JUSTICE. 5. AGAINST THIS, LD. DR SUBMITTED THAT ASSESSEE WAS SUPPOSED TO SUBMIT REPLY BY 14.3.2005 WHICH WAS NOT SUBMITTED. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE CONSIDERED VIEW THAT PRINCIPLES OF NATURAL JUSTICE ARE VIOLATE D AND ASSESSEE HAS NOT BEEN GIVEN REASONABLE OPPORTUNITY OF BEING HEARD BE FORE LEVY OF PENALTY. FATHER OF CA WHO WAS REPRESENTING THE CASE OF THE A SSESSEE HAD EXPIRED ON 16.3.2005 AND, THEREFORE, IT WAS PRACTICALLY NOT POSSIBLE FOR THE ASSESSEE TO REPRESENT HIS CASE. WE ACCORDINGLY REST ORE THE MATTER TO THE FILE OF AO FOR GIVING REASONABLE OPPORTUNITY OF BEI NG HEARD TO THE ASSESSEE AND CONSIDERING THE ISSUE AFRESH. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED BUT FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 18/06/2010 SD/- SD/- (MAHAVIR SINGH) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD, DATED : 18/06/2010 MAHATA/- 5 COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD