Sri K.Paramasivakonar, Madurai V. ACIT, Madurai

ITSSA 156/CHNY/2003

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0806 (ITAT-CHENNAI)
• Duration Of Justice: 11 year(s) 11 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 17-07-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA
• Assessee Lawyers: V D GOPAL
• Keywords: Period of limitation; Block assessment
• Section: 6; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER I.T.(SS) A. NO.156/MDS/2003 BLOCK ASSESSMENT YEARS : 1988-89 TO 1998-99 SHRI K. PARAMASIVAKONAR, 2A/2, ANTHONIAR KOIL STREET, MADURAI. PAN : 7001-G V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE II, MADURAI. (()/ APPELLANT) (+,()/ RESPONDENT) I.T.(SS) A. NO.194/MDS/2003 BLOCK ASSESSMENT YEARS : 1988-89 TO 1998-99 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE II, MADURAI. V. SHRI K. PARAMASIVAKONAR, 2A/2, ANTHONIAR KOIL STREET, MADURAI. (()/ APPELLANT) (+,()/ RESPONDENT) -./ /ASSESSEE BY : SH. V.D. GOPAL, ADVOCATE 0 /REVENUE BY : SH. PATHLAVATH PEERYA, CIT 1 2 /% / DATE OF HEARING : 13.05.2015 3'4 2 /% / DATE OF PRONOUNCEMENT : 26.06.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH, ASSESSEE AND REVENUE FILED THE APPEALS AGAI NST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I I, MADURAI, 2 I.T.(SS) A. NO.156/MDS/2003 I.T.(SS) A. NO.194/MDS/2003 DATED 31.03.2003 WHICH PERTAIN TO BLOCK PERIOD 1988 -89 AND 1998- 99. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN BOTH THE APPEALS, WE HEARD BOTH THE APPEALS TOGETHER AND DIS POSING OF THE SAME BY THIS COMMON ORDER. 2. FIRST, LETS TAKE ASSESSEES APPEAL IN I.T.(SS) A. NO.156/MDS/2003. 3. SHRI V.D. GOPAL, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND W ITH REGARD TO LIMITATION. ACCORDING TO THE LD. COUNSEL, THERE WA S A SEARCH IN THE PREMISES OF THE ASSESSEE UNDER SECTION 132 OF THE I NCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') ON 5.12.1997. NOTICE UND ER SECTION 158 BC WAS ISSUED ON 7.11.2000 PURPORTING TO BE A NOTICE U NDER SECTION 158BD ALSO. THE ASSESSMENT WAS COMPLETED ON 29.11. 2002. THE ASSESSEE HAS ALSO RAISED AN ISSUE OF VALIDITY UNDER SECTION 158BD OF THE ACT BEFORE THE ASSESSING OFFICER. ACCORDING TO THE LD. COUNSEL, THE WARRANT WAS IN THE NAME OF THE ASSESSE E, THEREFORE, THE ASSESSMENT PROCEEDING OUGHT TO HAVE BEEN COMPLE TED UNDER SECTION 158BC AND THEREFORE, PROCEEDING UNDER SECTI ON 158BD IS NOT TENABLE IN LAW. THE LD.COUNSEL FURTHER SUBMITT ED THAT SINCE THE SEARCH WAS CONDUCTED ON 5.12.1997, THE ASSESSMENT S HOULD HAVE BEEN COMPLETED ON OR BEFORE 31.12.1999 AND THE ORDE R PASSED ON 3 I.T.(SS) A. NO.156/MDS/2003 I.T.(SS) A. NO.194/MDS/2003 29.11.2002 IS BARRED BY LIMITATION. THE LD.COUNSEL FURTHER SUBMITTED THAT FOR THE PURPOSE OF ISSUING NOTICE UNDER SECTIO N 158BD, THE ASSESSING OFFICER HAS NOT RECORDED HIS SATISFACTION . THEREFORE, THE ENTIRE PROCEEDING INITIATED BY THE ASSESSING OFFICE R IS NOT VALID. THE LD.COUNSEL FURTHER SUBMITTED THAT THE NOTICE UNDER SECTION 158BD WAS ISSUED WITH THE INTENTION TO VIEW THE COST OF C ONSTRUCTION OF HOTEL NEW KPS AND THE SOURCE OF INCOME AVAILABLE TO THE CO- OWNERS. THE LD.COUNSEL FURTHER SUBMITTED THAT HOTE L NEW KPS WAS A BUILDING UNDER CONSTRUCTION EVEN ON THE DATE OF S EARCH AND ONLY SURVEY WAS CONDUCTED IN RELATION TO HOTEL NEW KPS. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE PROCEEDING INITIA TED UNDER SECTION 158BD IS NOT VALID. 4. ON THE CONTRARY, SH. PATHLAVATH PEERYA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT ADMITTE DLY THE SEARCH WAS INITIATED IN THE HANDS OF THE ASSESSEE AND THE SEARCH WARRANT WAS ALSO ISSUED AGAINST THE ASSESSEE. THEREFORE, T HE ASSESSMENT WAS MADE UNDER SECTION 158BC ONLY AND NOT UNDER SEC TION 158BD OF THE ACT. REFERRING TO THE ASSESSMENT ORDER, THE LD. D.R. POINTED OUT THAT THE ASSESSING OFFICER CLEARLY SAYS THAT TH E ASSESSMENT WAS FRAMED UNDER SECTION 158BC OF THE ACT. A MERE INCL USION OF SECTION 158BD WOULD NOT MAKE THE ASSESSMENT INVALID . REFERRING 4 I.T.(SS) A. NO.156/MDS/2003 I.T.(SS) A. NO.194/MDS/2003 TO SECTION 158BE OF THE ACT, THE LD. D.R. POINTED O UT THAT THE ORDER PASSED UNDER SECTION 158BC OF THE ACT WITHIN TWO YE ARS FROM THE END OF THE MONTH IN WHICH THE LAST OF THE AUTHORISA TIONS FOR SEARCH UNDER SECTION 132 OF THE ACT WAS EXECUTED. SINCE T HE ASSESSMENT ORDER ADMITTEDLY PASSED IN 2002, ACCORDING TO THE L D. D.R., THE ORDER PASSED BY THE ASSESSING OFFICER IS WITHIN THE PERIOD OF LIMITATION. THE LD. D.R. FURTHER SUBMITTED THAT NO TICE WAS INITIALLY ISSUED TO ALL THE INDIVIDUAL PERSONS UNDER SECTION 158BC OF THE ACT. SUBSEQUENTLY, THE CASE WAS TRANSFERRED TO THE ASSIS TANT COMMISSIONER OF INCOME TAX, INVESTIGATION CIRCLE I, MADURAI ON 7.11.2000. SINCE THE CASE WAS TRANSFERRED TO ASSIS TANT COMMISSIONER OF INCOME TAX, INVESTIGATION CIRCLE I, MADURAI AND THE NOTICE WAS ISSUED ONLY ON 7.11.2000, ACCORDING TO THE LD. D.R., THE ORDER PASSED UNDER SECTION 158BC IS WITHIN THE PERIOD OF LIMITATION. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE SEARCH WAS CONDUCTED ON 5.12.1997 IN THE PREMISES O F THE ASSESSEE AND THE WARRANT OF SEARCH WAS ISSUED AGAIN ST THE ASSESSEE. THOUGH THE ASSESSMENT ORDER AT PARA 6 SA YS THAT NOTICES UNDER SECTION 158BC OF THE ACT WERE ISSUED TO ALL INDIVIDUAL 5 I.T.(SS) A. NO.156/MDS/2003 I.T.(SS) A. NO.194/MDS/2003 PERSONS, IT APPEARS THAT THE CASE WAS SUBSEQUENTLY TRANSFERRED TO ACIT, INVESTIGATION CIRCLE I, MADURAI, WHO AGAIN IS SUED NOTICE UNDER SECTION 158BC READ WITH SECTION 158BD OF THE ACT ON 7.11.2000. THERE IS NO REFERENCE ABOUT THE EXECUTION OF AUTHOR ISATION OF SEARCH ISSUED AGAINST THE ASSESSEE IN THE ORDERS OF THE LO WER AUTHORITIES. SECTION 158BE CLEARLY SAYS THAT THE ASSESSMENT ORDE R HAS TO BE PASSED WITHIN TWO YEARS FROM THE END OF THE MONTH I N WHICH LAST OF THE AUTHORISATION FOR SEARCH UNDER SECTION 132 WAS EXECUTED. SINCE THESE FACTS WERE NOT EXAMINED BY THE CIT(APPE ALS), THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS TO BE RECONSIDERED. IN FACT, THE ASSESSEE HAS ALSO NOT R AISED THIS ISSUE BEFORE THE CIT(APPEALS). THE ISSUE OF LIMITATION G OES TO VERY ROUTE OF THE QUESTION. THEREFORE, THE MATTER NEEDS TO BE RE-EXAMINED. IN THE ABSENCE OF FACTUAL FINDING WITH REGARD TO EXECU TION OF LAST AUTHORISATION OF SEARCH, THE MATTER NEEDS TO BE RE- EXAMINED BY THE CIT(APPEALS) AFTER CALLING FOR THE SEARCH FOLDER FR OM THE CONCERNED OFFICERS. ACCORDINGLY, THE ORDERS OF THE LOWER AUT HORITIES ARE SET ASIDE AND THE ISSUE WITH REGARD TO LIMITATION IS RE MITTED BACK TO THE FILE OF THE CIT(APPEALS). THE CIT(APPEALS) SHALL R E-EXAMINE AFTER CALLING FOR THE RELEVANT RECORDS FROM THE CONCERNED OFFICERS AND THEREAFTER DECIDE THE ISSUE IN ACCORDANCE WITH LAW. THE ISSUE RAISED BY THE ASSESSEE ON MERIT IS ALSO REMITTED BA CK TO THE 6 I.T.(SS) A. NO.156/MDS/2003 I.T.(SS) A. NO.194/MDS/2003 CIT(APPEALS) WHO SHALL DECIDE THE ISSUE AFRESH AFTE R GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEE AS WE LL AS THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 26 TH JUNE, 2015 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 26 TH JUNE, 2015. KRI. 2 +/78 984/ /COPY TO: 1. -./ /ASSESSEE 2. ASSESSING OFFICER 3. 1 :/ () /CIT(A)-II, MADURAI 4. 1 :/ /CIT, MADURAI 5. 8; +/ /DR 6. - < /GF.