Shri Jitendra P.Chotalia, Ahmedabad V. The ACIT., Circle-9, Ahmedabad

ITSSA 13/AHD/2007

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9245 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-06-2010
• Assessment Year: misc
• Appeal Filed On: 19-01-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained investment; Principle of natural justice; Block assessment
• Section: 143(3); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI T.K.SHARMA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING: 7.06.10 DRAFTED ON:7.06.2010 IT(SS)A NO.13/AHD/2007 BLOCK ASSESSMENT PERIOD FROM 1.04.1985 TO 31.03.1995 & FROM 1.04.1995 TO 20.03.1996 JITENDRA P. CHOTALIA 16, CHOTALAL AVENUE PARK, BHIMJIPURA, NAVA VADAJ, AHMEDABAD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRC.9, AHMEDABAD. PAN/GIR NO. : (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI ANIL KSHATRIYA A.R. RESPONDENT BY: SHRI ANIL KUMAR D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED ASSESSING OFFICER DATED 22.12.2006 PASSED U NDER SECTION 158BC R.W.S. 143(3) AND 254 OF THE INCOME TAX ACT, 1961 TAKING THE FOLLOWING GROUNDS OF APPEAL. 1. THE BLOCK ASSESSMENT ORDER IS ARBITRARY AND AGA INST THE PRINCIPLES OF NATURAL JUSTICE , BASED ON ASSUMP TIONS, SURMISES AND CONJECTURES, BRUSHING ASIDE ALT WRITTE N AS WELL AS ORAL SUBMISSIONS MADE BY LETTERS DATED 3.9.2006 AND ALSO THE CHART FOR THE WORKING OF PEAK ALONGWITH A SPECI FIC NOTE TOO. - 2 - 2. THE ASSESSING OFFICER AGAIN ERRED IN NOT CONSIDE RING SUBMISSIONS MADE BY THE APPELLANT WHICH ARE THE SAM E AS NARRATED IN PARAGRAPH 3 & 4 OF TRIBUNAL'S ORDER DAT ED 19.4.2005 AS SUCH THE SAME TANTAMOUNT TO RENDER TH E ASSESSMENT ORDER ARBITRARY, ILLEGAL AND BAD IN LAW. 3. THE ASSESSING OFFICER HAS WRONGLY AND ERRONEOUSL Y MENTIONED IN PARAGRAPH 5 AND 6 OF THE ORDER THAT I) THE ASSESSEE HAS NOT SUBMITTED ANY EXPLANATION REGARDING WORKING OF PEAK IN THE BANK ACCOUNTS. THE WORKING OF PEAK HAS ALSO NOT BEEN FURNISHED. II) THE ASSESSEE DID NOT SUBMIT THE SOURCE OF CREDITS MADE IN THE BANK ACCOUNTS AND ITS UTILIZATION. III) THE ASSESSEE ALSO DID NOT PRODUCE ANY BANK BOOK FOR VERIFICATION FOR THE CREDITS AND DEBITS ENTRIES REFLECTED IN THE BANK BOOK. IV) IT WAS ADMITTED BY THE ASSESSEE IN PARA 4 OF HIS REPLY DATED 12/9/97 THAT DUE TO LAPSE OF TIME AND IMPROPER MAINTENANCE OF THE RECORD HE WAS NOTABLE TO FURNISHED FULL DETAILS OF SUCH CREDITS IN THE BANK ACCOUNTS AND CORRESPONDING DEBITS MADE IN THE BANK PASSBOOK FOR THE CONSTRUCTION WORK CARRIED OUT. V) THOUGH THE DETAILS WERE AVAILABLE ON RECORD. 4. THE ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN HOLDING THAT APPELLANT HAD FAILED TO ESTABLISH THE NATURE AND SOURCE OF CHEQUES DEPOSITED IN THREE BANK ACCOUNTS AND, THEREFORE, THE AGGREGATE OF RS.28,49,877/- OF SUCH DEPOSITS WAS UNDISCLOSED INCOME OF THE APPELLANT 5. THE ASSESSING OFFICER FURTHER ERRED ON FACTS AND IN LAW HOLDING THAT PEAK AMOUNT OF CASH DEPOSITS AND WITHDRAWALS AMOUNTING TO RS.97,146/- IN THE THREE B ANK ACCOUNTS WAS UNEXPLAINED INVESTMENT OF THE APPELLAN T AND, THEREFORE, WAS TO BE ADDED TO THE TOTAL INCOME OF T HE APPELLANT. - 3 - 6. IT IS PRAYED THAT ALL THE ABOVE ADDITIONS CONS IDERED BY THE ASSESSING OFFICER AS THE APPELLANT'S UNDISCLOSE D INCOME FOR THE BLOCK PERIOD ARE ARBITRARY AND UNJUSTIFIED, AND THAT THESE HAVE BEEN FULLY AND CONCLUSIVELY EXPLAINED DU LY SUPPORTED WITH NECESSARY EVIDENCE IN THE COURSE OF ASSESSMENT PROCEEDINGS, WHICH HAVE BEEN BRUSHED ASI DE AND THEREFORE THE SAID ADDITIONS MAY BE FULLY DELET ED. 3. AT THE OUTSET, THE LEARNED AUTHORISED REPRESENTA TIVE OF THE ASSESSEE POINTED OUT THAT THE ASSESSEE FILED APPEAL TO THE TRIBUNAL AGAINST THE ORIGINAL ORDER PASSED BY THE LEARNED AS SESSING OFFICER DATED 17.09.1997 UNDER SECTION 158BC READ WITH SECT ION 144 OF THE ACT FOR THE BLOCK PERIOD 1.04.1985 TO 31.03.1995 AND 1. 04.1995 TO THE DATE OF SEARCH. THIS ORDER OF THE LEARNED ASSESSING OFF ICER WAS SET ASIDE BY THE TRIBUNAL AND DIRECTED HIM TO MAKE IT DE NOVO ASSESSMENT AFTER ALLOWING PROPER OPPORTUNITY OF HEARING TO THE ASSES SEE VIDE ORDER DATED 19.04.2005 IN IT(SS)A NO.199/AHD/1997. 4. THE ASSESSEE FILED MISCELLANEOUS APPLICATION BEF ORE THE TRIBUNAL WHICH WAS NUMBERED AS M.A.NO.191/AHD/2006. IN THE SAID MISCELLANEOUS APPLICATIONS, THE ASSESSEE POINTED OU T THAT THE TRIBUNAL AT PARAGRAPH NO.3 OF THE ORDER AGREED WITH THE SUBM ISSIONS OF THE ASSESSEE THAT LEARNED ASSESSING OFFICER DID NOT HAV E JURISDICTION OF FRAMING THE ASSESSMENT FOR THE BLOCK PERIOD BY INVO KING THE PROVISIONS OF SECTION 144 OF THE ACT AND THE NON-CONSIDERATION OF THE ASSESSEES REPLY SUBMITTED DURING THE ASSESSMENT PROCEEDINGS A ND, THEREFORE, THE ORDER OF THE LEARNED ASSESSING OFFICER SHOULD BE AN NULLED. HOWEVER, IN PARAGRAPH NO.5 OF THE SAID ORDER, THE TRIBUNAL S ET ASIDE THE ORDER OF THE ASSESSING OFFICER AND DIRECTED HIM TO MAKE A DE NOVO ASSESSMENT AFTER ALLOWING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. - 4 - 5. THE TRIBUNAL, AFTER CONSIDERING THE SUBMISSIONS MADE BY BOTH THE PARTIES ON THE MISCELLANEOUS APPLICATION FILED BY T HE ASSESSEE, OBSERVED AS UNDER:- 5. AFTER HAVING CONSIDERED THE RIVAL SUBMISSIONS, FACTS AND CIRCUMSTANCES OF THE CASE, TRIBUNALS ORDER UND ER REFERENCE AS WELL AS THE PROVISIONS OF SECTIONS 158 BC AND 144 OF THE ACT, WE ARE OF THE OPINION THAT THE FINDINGS/OBSERVATIONS OF THE TRIBUNAL CONTAINED IN PARAGRAPH NO.3.1 SEEMS TO HAVE BEEN ARRIVED AT WITH OUT CONSIDERING A VITAL FACT AS TO WHETHER THE ASSESSEE WAS EVER SERVED WITH A NOTICE U/S. 142(1) OF THE ACT OR NOT BECAUSE IF THE PROVISIONS OF SECTION 144 ARE HELD TO BE APPLIC ABLE IN THE CASE OF BLOCK ASSESSMENT TO BE FRAMED U/S.158BC OF THE ACT, THEN THE FACT RELATING TO SERVICE OF NOTICE U/ S.142(1) OF THE ACT MAY BECOME RELEVANT. EVEN OTHERWISE, PROVIS IONS OF SECTION 158BC(B) OF THE ACT SPEAKS OF APPLICATIO N OF PROVISIONS OF SECTION 142 OF THE ACT, SO FAR AS MAY BE AND, THEREFORE, THIS ASPECT ALSO SEEMS TO HAVE NOT BEEN TAKEN CARE OF WHILE DECIDING THE ASSESSEES APPEAL. 6. WE ARE, FURTHER, OF THE OPINION THAT PARAGRAPH N O.5 OF THE TRIBUNALS ORDER ALSO SEEMS TO BE CONTRARY TO T HE FINDINGS IN PARAGRAPH NO.3.1., BUT THAT DOES NOT ME AN THAT FINDINGS IN PARAGRAPH NO.3.2 SHOULD BE RELIED UPON AND ASSESSMENT BE CANCELLED. 7. THE OMISSIONS/MISTAKES LEADING TO FINDINGS IN PARAGRAPH NOS.3.1 & 5 OF TRIBUNALS ORDER, IN OUR O PINION , REQUIRES TO BE RECONSIDERED BECAUSE OF OMISSION TO CONSIDER CERTAIN FACTS AS DISCUSSED HEREINBEFORE. CONSEQUENT LY, IN THE INTEREST OF JUSTICE, WE RECALL THE FINDINGS CON TAINED IN PARAGRAPH NOS. 3.1 AND 5 OF TRIBUNALS ORDER DATED 19/04/2005 (IT(SS)A NO.199/AHD/1997) WHICH RESULTS IN RECALLING OF WHOLE OF THE ORDER OF THE TRIBUNAL DAT ED 19/04/2005. - 5 - 8. IN THE RESULT, THE TRIBUNALS ORDER DATED 19/04/ 2005 IS RECALLED AND REGISTRY IS DIRECTED TO FIX THE ASSESS EES APPEAL FOR FRESH HEARING IN DUE COURSE. 9. AS A RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED. 6. THEREAFTER, THE TRIBUNAL DECIDED THE APPEAL OF T HE ASSESSEE VIDE ORDER DATED 10.08.2007 IN ITA NO.199/AHD/1997. 7. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE SUBMITTED THAT IN VIEW OF THE ABOVE FACTS, THE PRESENT ORDER PASSED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 158BC R.W.S. 143(3) AND 254 OF THE INCOME TAX ACT, DATED 22.12.2006 CANNOT SURVIVE AND THE SAME SHOULD BE CANCELLED. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND SUBMITTED THAT THE ISSUES RAISED IN THE PRESENT APP EAL ARE COVERED BY THE DECISION OF THIS TRIBUNAL DATED 10.08.2007 IN ITA N O.199/AHD/1997. 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE ORIGINAL ORDE R PASSED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 158BC READ WITH SECTION 144 OF THE INCOME TAX ACT, 1961 ON 17.09.1997 WAS SET A SIDE BY THE TRIBUNAL IN THE APPEAL FILED BY THE ASSESSEE IN ITA NO.199/AHD/1997 VIDE ORDER DATED 19.04.2005 AND THE LEARNED ASSESSI NG OFFICER WAS DIRECTED TO MAKE A DE NOVO ASSESSMENT AFTER ALLOWING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. THEREAFTER, IN THE MISCELLANEOUS APPLICATION NO.191/AHD/2006 FILED BY THE ASSESSEE, THE TRIBUNAL VIDE ITS ORDER DATED 16.03.2007 RECALLED ITS ORDER DATED 19.04.2005 AND - 6 - THEREAFTER, DECIDED THE APPEAL VIDE ITS ORDER DATED 10.08.2007. THE PRESENT APPEAL HAS BEEN FILED AGAINST THE ORDER OF THE LEARNED ASSESSING OFFICER WHICH WAS PASSED BY THE LEARNED ASSESSING O FFICER IN PURSUANCE TO THE ORIGINAL ORDER DATED 19.04.2005 PA SSED BY THE TRIBUNAL. HOWEVER, AS OBSERVED ABOVE, THE TRIBUNAL HAS RECALLED ITS ORDER DATED 19.04.2005 VIDE SUBSEQUENT ORDER DATED 16.03.2007AND THEREAFTER ALSO DECIDED THE ORIGINAL APPEAL OF THE ASSESSEE VIDE ITS ORDER DATED 10.08.2007. THUS, THE ORDER OF THE LEARNED A SSESSING OFFICER UNDER APPEAL CANNOT STAND AS THE ORDER OF THE TRIBU NAL HAS BEEN RECALLED IN PURSUANCE TO WHICH IT WAS PASSED. THEREFORE, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING IN THE PRESENCE OF THE PARTIES ON THIS 7 TH DAY OF JUNE, 2010. SD/- SD/- ( T.K. SHARMA ) ( N .S. SAINI ) JUDICIAL MEMBER ACCOUNTAN T MEMBER AHMEDABAD; ON THIS 7 TH DAY OF MAY, 2010 PARAS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD - 7 - DATE INITIALS 1. DRAFT DICTATED ON 07.06.2010 ---------------- --- 2. DRAFT PLACED BEFORE AUTHORITY08.06.2010 ------- ------------ 3. DRAFT PROPOSED & PLACED 08.06.2010 ----------- -------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 08.06.2010 ---------- --------- JM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S09.06.2010 --------- ----------- 6. KEPT FOR PRONOUNCEMENT ON ---------------- --- ----------------- 7. FILE SENT TO THE BENCH CLERK 09.06.2010 ------ -------------- 8. DATE ON WHICH FILE GOES TO THE---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------