The ACIT, Circle-3, Surat V. Smt. Kalpana P.Kapadia, Surat

ITSSA 130/AHD/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 3073 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 09-10-2012
• Assessment Year: misc
• Appeal Filed On: 11-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A TIRKEY
• Assessee Lawyers: M G PATEL
• Keywords: Block assessment
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.(SS). NO.130 / AHD/2010 (BLOCK ASSESSMENT PERIOD 1990-91 TO 1999-2000 & UP TO 29.10.1999) ACIT, CIRCLE 3, SURAT VS. SMT. KALPANA P KAPADIA, B-203. CHANDAN PARK, CITY LIGHT LANE, SURAT PAN/GIR NO. : AFOPK3576N (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI A TIRKEY, SR. DR RESPONDENT BY: SHRI M G PATEL, AR DATE OF HEARING: 09.10.2012 DATE OF PRONOUNCEMENT: 31.10.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDE R OF LD. CIT(A) II, SURAT DATED 27.11.2009 FOR THE BLOCK PERIOD FOR M 01.04.1989 TO 29.10.1999. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1) ON THE FACTS AND CIRCUMSTANCE OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY THE A.O. OF RS.6,15,950 ON ACCOUNT OF UNACCOUNTED ON-MONEY PAID BY THE ASSESSEE FOR PURCHASE OF FLAT AT CHANDAN PARK SOCIE TY FROM OHM ORGANIZERS AND OHM DEVELOPERS HOLDING THAT THERE WA S INORDINATE DELAY IN INITIATION OF ACTION U/S. 158BD AND THEREB Y THE PROCEEDINGS INITIATED U/S. 158BD IS INVALID. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (A) OUGHT TO HAVE UPHELD THE ORDER OF T HE ASSESSING OFFICER. 3) IT IS, THEREFORE, PRAYED THAT THE ORDER O F THE CIT (A) MAY BE SET-ASIDE AND THAT OF ASSESSING OFFICER MAY BE REST ORED TO THE ABOVE EXTENT. I.T.A.NO.130 /AHD/2010 2 3. LD. D.R. SUPPORTED THE ASSESSMENT ORDER WHEREAS THE LD. A.R. SUPPORTED THE ORDER OF LD . CIT(A). LD. D.R. HAS PL ACED RELIANCE ON THE JUDGEMENT OF HONBLE CALCUTTA HIGH COURT RENDERED I N THE CASE OF BHURA EXPORTS LTD. IN I.T.A.NO. 116 OF 2011 DATED 30.08.2 011. IT WAS SUBMITTED THAT AS PER THIS JUDGMENT OF HONBLE CALC UTTA HIGH COURT, IT WAS HELD THAT THE ORDER PASSED BY THE A.O. U/S 201 OF THE INCOME TAX ACT, 1961 IS NOT BARRED BY LIMITATION BECAUSE THIS ACT D OES NOT SPECIFY ANY SPECIFIC TIME LIMIT FOR TREATING THE TAX PAYER AS ASSESSEE IN DEFAULT U/S 201 OF THE INCOME TAX ACT, 1961. HE SUBMITTED THAT REGARDING ISSUANCE OF NOTICE U/S 158BD ALSO, NO TIME LIMIT IS PRESCRIBED, AND HENCE, IT SHOULD NOT TO BE HELD AS TIME BARRED. 4. IT WAS ALSO SUBMITTED BY THE LD. D.R. THAT UP TO 6 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, THE ASSESSMENT CAN BE REOPENED U/S 147 AND, THEREFORE, THE ISSUE OF NOTICE U/S 158BD S HOULD ALSO BE VALID IF IT IS ISSUED WITHIN 6 YEARS. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY LD. CIT(A) AS P ER PARA 6, 6.1 & 6.2 OF HIS ORDER AND FOR THE SAKE OF READY REFERENCE, THES E PARAS ARE REPRODUCED BELOW: 6. I HAVE CAREFULLY CONSIDERED BOTH THE POSITIONS. IN ALL THE CASES OF THE INVESTORS WITH M/S. OHM DEVELOPERS AND OHM O RGANISERS WHOSE APPEALS HAVE BEEN DECIDED BY ME SO FAR, I HAV E TAKEN THE VIEW THAT THERE IS NO TIME LIMIT PRESCRIBED FOR PRO CEEDINGS TO BE INITIATED U/S.L58BD OF THE IT ACT. WHILE TAKING SUC H A VIEW, I HAVE RESPECTFULLY DISAGREED WITH THE VIEW TAKEN BY THE S PECIAL BENCH OF THE ITAT, DELHI IN THE CASE OF MANOJ AGGARWAL (SUPR A) ON THE BASIS OF THE LONG ESTABLISHED VIEW EXPRESSED BY EMI NENT JURISTS AND SEVERAL COURTS INCLUDING THE HON'BLE SUPREME COURT, AND RECENTLY RECONFIRMED ONCE AGAIN BY THE HON'BLE SUPREME COURT IN THE CASE OF UOI AND OTHERS V/S DHARMENDRA TEXTILE PROCESSORS & ORS. 2008 306 ITR 277, THAT THE ITAT IS NOT COMPETENT TO CREA TE LAW OR INTRODUCE ANY FICTIONAL AMENDMENT TO THE STATUTE. H ENCE, THE PROCEEDINGS INITIATED U/S.158BD CANNOT BE NULLIFIED ON THE BASIS I.T.A.NO.130 /AHD/2010 3 OF THE DECISION IN THE CASE OF MANOJ AGGARWAL (SUPR A). HOWEVER, I AM NOW FORCED TO TAKE A DIFFERENT VIEW. THIS IS BEC AUSE, I FIND THAT THE PROCEEDINGS U/S.158BD AGAINST THE INVESTORS IN DIFFERENT PROJECTS PROMOTED AND DEVELOPED BY M/S. OHM DEVELOP ERS AND M/S. OHM ORGANISERS, SEEM TO BE CONTINUING WITHOUT ANY SIGN OF FINALITY. 6.1 IT MUST BE REITERATED THAT THE SEARCH IN THE CA SE OF M/S. OHM DEVELOPERS, U/S.132 OF THE IT ACT WAS CONDUCTED ON 29.10.1999 WHICH MEANS THAT THE INVESTMENT IN THE PROPERTIES D EVELOPED BY M/S. OHM DEVELOPERS WAS MADE EARLIER TO THE SAID DA TE. IN COURSE OF THE BLOCK ASSESSMENT PROCEEDINGS, THE AO OF M/S. OHM DEVELOPERS SOUGHT DETAILS AND EXPLANATIONS U/S.133( 6) FROM ALL THE INVESTORS. THE BLOCK ASSESSMENT IN THE CASE OF M/S OHM DEVELOPERS WAS COMPLETED ON 30-11-2001. THE PROCEED INGS U/S.158BD IN THE CASE OF THE ASSESSEE WAS INITIATED AGAINST THE ASSESSEE VIDE NOTICE DATED 22.01.2007, I.E. 5(FIVE) YEARS LATER, AND THE ASSESSMENT COMPLETED AFTER ANOTHER 2 (TWO) YEAR S, ON 28,01.2009. INTERESTINGLY, THE AO HAS MADE NO MENTI ON OF THE DATE ON WHICH INTIMATION WAS RECEIVED BY HIM FROM THE AO OF M/S. OHM DEVELOPERS. ' 6.2 GIVEN SUCH FACTS AS DETAILED ABOVE, I AM OF THE VIEW THAT THERE HAS BEEN AN INORDINATE DELAY IN INITIATING AND COMP LETING THE PROCEEDINGS U/S.158BC R.W.S.158BD IN THE CASE OF TH E ASSESSEE. THOUGH, THE ACT DOES NOT LAY DOWN ANY TIME LIMIT FO R INITIATING PROCEEDINGS U/S.158BD YET, EQUITY DEMANDS THAT PROC EEDINGS SHOULD NOT BE KEPT PENDING INDEFINITELY AND THE SWO RD OF DAMOCLES BE KEPT HANGING OVER THE HEAD OF THE TAXPA YER FOR AN INDEFINITE PERIOD. EXPLANATION REGARDING THE INVEST MENT IN THE SAID PROPERTIES WAS FURNISHED BY THE ASSESSEE. IF THE AU THORITIES FAILED TO UTILISE AND COMMUNICATE SUCH INFORMATION ON TIME , THEN THE ASSESSEE COULD NOT BE PENALISED AND KEPT IN THE LOO P OF THE AUTHORITIES FOR SUCH A LONG PERIOD OF 7 (SEVEN) YEA RS. REGRETTABLY, I MUST TAKE THE VIEW THAT THE PROCEEDINGS INITIATED B Y THE A.O. U/S.158BD WAS INORDINATELY DELAYED AND THEREFORE W AS INVALID. CONSEQUENTLY, THE ADDITION OF THE SUM OF RS.6,15,95 0/- MADE BY THE A.O. WILL STAND DELETED. 6. FROM THE ABOVE PARAS OF THE ORDER OF LD. CIT(A), IT IS FOUND THAT THE ISSUE IN DISPUTE WAS DECIDED BY LD. CIT(A) IN F AVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF SPECIAL BENCH OF THE T RIBUNAL RENDERED IN THE CASE OF MANOJ AGGRAWAL 113 ITD 377 (SB) (DEL.). WE ALSO FIND THAT IN THE PRESENT CASE, THE PROCEEDINGS U/S 158 BD WERE I NITIATED BY THE AO I.T.A.NO.130 /AHD/2010 4 AFTER SEVEN YEARS AND THREE MONTHS AS NOTED BY LD. CIT(A) IN PARA 5.3 OF HIS ORDER. IT IS ALSO NOTED BY LD. CIT(A) IN PARA 6.1 OF HIS ORDER THAT THE A.O. HAS NOT MENTIONED THE DATE ON WHICH INTIMATION WAS RECEIVED BY THE A.O. FROM M/S. OHM DEVELOPERS I.E. THE SEARCHED PER SON. CONSIDERING THE FACTS OF THE PRESENT CASE, WE FIND THAT HIS ISS UE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF SPECIAL B ENCH OF THE TRIBUNAL RENDERED IN THE CASE OF MANOJ AGGRAWAL (SUPRA). TH E JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF MANISH M AHESHWARI VS ACIT AS REPORTED IN 289 ITR 341 ALSO SUPPORTS THE C ASE OF THE ASSESSEE. HENCE, WE DECLINE TO INTERFERE IN THE ORDER OF LD. CIT(A) ON THIS ISSUE. REGARDING THE JUDGEMENT CITED BY THE LD. D.R., WE F IND THAT THIS JUDGEMENT IS REGARDING PROCEEDINGS U/S 201 OF THE I NCOME TAX ACT, 1961 AND WE ARE CONCERNED WITH THE PROCEEDINGS U/S 158BD OF THE INCOME TAX ACT, 1961 AND MOREOVER, THIS ISSUE IS COVERED IN FA VOUR OF THE ASSESSEE BY THE JUDGEMENT OF HONBLE APEX COURT IN CASE OF MANI SH MAHESHWARI (SUPRA) AND THEREFORE, IN OUR CONSIDERED OPINION, T HIS JUDGEMENT OF HONBLE CALCUTTA HIGH COURT IS NOT RELEVANT IN THE PRESENT CASE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (G. C. GUPTA) (A. K. GARODIA) VICE PRESIDENT ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD I.T.A.NO.130 /AHD/2010 5 1. DATE OF DICTATION 12/10/2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 16/10/2012.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 31/10/2012 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.31/10 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31/1 0/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .