Shri Vinodrai Natvarlal Mehta, Mahuva V. The ACIT.,Circle-2, Bhavnagar

ITSSA 16/AHD/2009

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8672 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-01-2011
• Assessment Year: misc
• Appeal Filed On: 09-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK JOHRI
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Opportunity of being heard; Principle of natural justice; Block assessment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH (BEFORE S/SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND D.C. AGRAWAL, ACCOUNTANT MEMBER) IT(SS)A NO.16/AHD/2009 [BLOCK PERIOD 1.4.1985 TO 11.07.1995] DICTATED ON: 13-01-2011 SHRI VINODRAI NATVARLAL MEHTA C/O. MS/.MEHTA NATVARLAL V. MATHURADAS SHROFF BAZAR,MAHUVA. PAN : ACXPM 5613 L VS. ACIT, CIR.2 BHAVNAGAR. IT(SS)A NO.17/AHD/2009 [BLOCK PERIOD 1.4.1985 TO 11.07.1995] SHRI KRISHNAKANT NATVARLAL MEHTA C/O. MS/.MEHTA NATVARLAL V. MATHURADAS SHROFF BAZAR,MAHUVA. PAN : ACXPM 5612 M VS. ACIT, CIR.2 BHAVNAGAR. IT(SS)A NO.18/AHD/2009 [BLOCK PERIOD 1.4.1985 TO 11.07.1995] SHRI NAYANKUMAR NATVARLAL MEHTA C/O. MS/.MEHTA NATVARLAL V. MATHURADAS SHROFF BAZAR,MAHUVA. PAN : ACXPM 5611 J VS. ACIT, CIR.2 BHAVNAGAR. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MEHUL K. PATEL REVENUE BY : SHRI ALOK JOHRI O R D E R PER BHAVNESH SAINI, JUDICIAL MEMBER : ALL THE FIRST APPEALS FILED BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST DIFFERE NT ORDERS OF THE ACIT, CIRCLE- 2, BHAVNAGAR DATED 31-12-2008 FOR THE ABOVE BLOCK P ERIOD. 2. THE LEARNED COUNSEL FOR THE ASSESSEES, AT THE OU TSET, SUBMITTED THAT THE ORIGINAL BLOCK ASSESSMENT ORDER WAS PASSED ON 30-7- 1996 FOR THE ABOVE BLOCK PERIOD CONSEQUENT TO THE SEARCH UNDER SECTION 132 O F THE INCOME TAX ACT CARRIED OUT AT THE RESIDENTIAL AND BUSINESS PREMISE S OF THE ASSESSEES ON 11 TH IT(SS)A NO.16, 17 AND 18/AHD/2009 -2- JULY, 1995. HE HAS SUBMITTED THAT THE ADDITIONS WE RE MADE WHICH WERE CHALLENGED BEFORE THE ITAT, AHMEDABAD BENCHES IN IT A NOS.3819 TO 3821/AHD/1996 AND THE TRIBUNAL VIDE ORDER DATED 10- 3-2006 RESTORED THE MATTER TO THE FILE OF THE AO FOR GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEES. THE LEARNED COUNSEL FOR THE ASSESSE ES SUBMITTED THAT IN PURSUANCE OF THE ORDER OF THE TRIBUNAL, THE AO ISSU ED FIRST NOTICE TO THE ASSESSEES FOR APPEARANCE ON 7-12-2008 WHICH ACCORDI NG TO HIM WAS SUNDAY AND THEREAFTER THE MATTER WAS TAKEN UP BY ISSUING N OTICE DATED 22-12-2008 WHICH WAS SERVED ON 25-12-2008 AND THE ASSESSMENT O RDER WAS PASSED ON 31- 12-2008. HE HAS SUBMITTED THAT THE FACTS ARE SIMIL AR IN ALL THREE CASES AND IN THE CASE OF SHRI KRISHNAKANT NATVARLAL MEHTA, THE A SSESSEE IN REPLY DATED 26- 12-2008 BEFORE THE AO ALSO STATED THAT OPPORTUNITY MAY BE ALLOWED TO CROSS- EXAMINE IMPORTANT WITNESSES WHOSE STATEMENTS HAVE B EEN TAKEN INTO CONSIDERATION WHILE FRAMING THE BLOCK ASSESSMENT AG AINST THE ASSESSEES, BUT ONE WITNESS WAS STATED TO HAVE EXPIRED AND ANOTHER WITN ESS OF THE DEPARTMENT DID NOT APPEAR BY GIVING REPLY THAT HE DID NOT WANT TO BE CROSS-EXAMINED. THE LEARNED COUNSEL THEREFORE SUBMITTED THAT NO MEANING FUL OPPORTUNITY WAS BEING GIVEN TO THE ASSESSEES BY THE AO AND THEREFORE, THE AO HAS VIOLATED PRINCIPLE OF NATURAL JUSTICE AND THAT THE AO DID NOT COMPLY W ITH THE DIRECTIONS OF THE TRIBUNAL AND FURTHER NO MATERIAL ADVERSE IN NATURE WAS SUPPLIED TO THE ASSESSEES BEFORE FRAMING OF THE BLOCK ASSESSMENT AFRESH AND A S SUCH DIRECTION OF THE TRIBUNAL HAVE BEEN VIOLATED. HE HAS THEREFORE SUBM ITTED THAT THE AO MAY BE DIRECTED TO COMPLY WITH THE DIRECTION OF THE TRIBUN AL ALREADY ISSUED VIDE ORDER DATED 10-3-2006 AND THE MATTER MAY BE RESTORED TO T HE FILE OF AO FOR RECONSIDERATION. 3. THE LEARNED DR RELIED UPON THE ORDERS OF THE AO AND SUBMITTED THAT THE ASSESSEES AT THE FAG END FILED REPLY AND CHALLENGED THE JURISDICTION OF THE AO ONLY, THEREFORE, PROPER OPPORTUNITY WAS ALREADY GIV EN. BUT ALTERNATIVELY, HE SUBMITTED THAT MATTER MAY BE REMAND TO THE FILE OF THE AO FOR RECONSIDERATION. IT(SS)A NO.16, 17 AND 18/AHD/2009 -3- 4. WE CONSIDERED RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ITAT, AHMEDABAD BENCHES IN THE CAS ES OF ALL THE THREE ASSESSEES, VIDE ORDER DATED 10-3-2006 RESTORED THE MATTER BACK TO THE FILE OF THE AO FOR RECONSIDERATION. THE FINDINGS GIVEN IN PARA -3 ARE REPRODUCED AS UNDER: 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATE RIAL ON RECORD. THERE IS NO DOUBT THAT THE ASSESSMENTS AS FRAMED AR E A RESULT OF THE ASSESSEES, ATLEAST PARTLY, INACTION IN THE MATTER. HOWEVER, IN PRACTICAL REALITY, THE ASSESSEE(S) COULD BE CONSTRAINED FOR S EVERAL REASONS, AND THEREFORE, IT MAY NOT ALWAYS BE CORRECT TO IMPUTE M ALA FIDES IN ITS BEHAVIOR, SPECIALLY WHEN IT HAS NOTHING TO GAIN OUT OF ITS OWN NON- ACTION. ALSO, IT CANNOT BE DENIED THAT IT HAS NOT BEEN CONFRONTED WITH THE MATERIALS RELIED UPON IN FRAMING THE ASSESSMENT. W E FIND IT TO HAVE SPECIFICALLY RAISED GROUNDS TO THIS EFFECT, AMONG O THERS, IN EACH OF THE APPEALS, UNDER CONSIDERATION. AS SUCH, CONSIDERING THE CALL OF JUSTICE AS A PARAMOUNT CONSIDERATION, INCLUDING THE MANNER IN WHICH IT IS ADMINISTERED, WE ONLY CONSIDER IT FIT TO RESTORE TH ESE MATTERS TO THE FILE OF THE AO FOR GRANT OF REASONABLE OPPORTUNITY TO THE A SSESSEE(S) TO STATE/EXPLAIN ITS CASE BEFORE HIM. THE AO SHALL MA KE AVAILABLE, FOR THE PURPOSE, ALL MATERIAL RELIED UPON BY HIM IN THE FRA MING OF THE ASSESSMENT. AND ADJUDICATE, ACCORDINGLY, IN CONSON ANCE WITH THE LAW, PER A SPEAKING ORDER. THE ONUS TO ESTABLISH ITS CA SE IS SOLELY ON THE ASSESSEE, AND THE AO SHALL BE FREE TO DRAW ANY INFE RENCE AS PERMISSIBLE UNDER LAW IN CASE OF THE ASSESSEES FAILURE TO DISC HARGE THE SAME. WE DECIDE THESE APPEALS IN THE AFORESAID TERMS. THE ABOVE ORDER OF THE TRIBUNAL SHOWS THAT THE TRIB UNAL NOT ONLY RESTORED THE MATTER BACK TO THE FILE OF THE AO FOR RECONSIDERATI ON BY GIVING REASONABLE OPPORTUNITY TO THE ASSESSEES FOR BEING HEARD, BUT A LSO DIRECTED TO SUPPLY ALL MATERIAL RELIED UPON BY THE AO FOR THE PURPOSE OF F RAMING OF THE ASSESSMENTS. HOWEVER, THE DATES NOTED IN THE ASSESSMENT ORDERS S HOW THAT NO PROPER OPPORTUNITY OF BEING HEARD IS GIVEN TO THE ASSESSEE TO REPRESENT ITS CASE BEFORE THE AO BECAUSE THE ASSESSMENTS HAVE BEEN TAKEN ONLY AT THE FAG END OF THE LIMITATION AND FURTHER NO MATERIAL ADVERSE IN NATUR E, HAVE BEEN SUPPLIED TO THE ASSESSEE BEFORE FRAMING THE SET ASIDE ASSESSMENTS. WE FURTHER FIND THAT EVEN IN THE CASE OF KRISHNAKANT N. MEHTA, DESPITE ASSESSEE S REQUEST TO PRODUCE THE WITNESSES OF THE DEPARTMENT FOR CROSS-EXAMINATION O N BEHALF OF THE ASSESSEE, THE ASSESSEE HAS NOT BEEN ALLOWED TO CROSS-EXAMINE THE WITNESSES ON WHICH THE IT(SS)A NO.16, 17 AND 18/AHD/2009 -4- AO PLACED RELIANCE. THIS FACT WOULD SHOW THAT THE AO HAS NOT COMPLIED WITH THE DIRECTIONS OF THE TRIBUNAL DATED 10-3-2006. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AO AND RESTORE THESE MATTERS TO THE F ILE OF THE AO WITH DIRECTIONS TO GIVE REASONABLE OPPORTUNITIES TO THE ASSESSEES. THE AO SHALL ALSO SUPPLY ALL MATERIAL RELIED UPON BY HIM FOR FRAMING THE ASSESSM ENTS. THE AO SHALL ALSO ALLOW THE ASSESSEES TO CROSS-EXAMINE THE WITNESSES WHOSE STATEMENTS HAVE BEEN RELIED UPON FOR FRAMING OF THE ASSESSMENTS. 5. IN RESULT, ALL THE APPEALS OF THE ASSESSEE ARE A LLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 13 TH JANUARY, 2011 SD/- SD/- (D.C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER PLACE : AHMEDABAD DATE : 13-01-2011 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : DEPARTMENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD