Shri Ram Kishore Choudhary, JODHPUR V. DCIT, JODHPUR

ITSSA 2/JODH/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8656 (ITAT-JODHPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-12-2012
• Assessment Year: misc
• Appeal Filed On: 17-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Assessee Lawyers: U C JAIN SHRI GAUTAM CHAND
• Keywords: Block assessment
• Section: 143(3); 133A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITSSA NO. 9/JU/2010 [BLOCK PERIOD FROM 1998-99 TO 2003-04 UPTO 6.2.2003 ] THE A.C.I.T VS. SHRI RAM JEEVAN CHOUDHARY CENTRAL CIRCLE- 1 B-6, SHRAMIKPURA JODHPUR MASURIYA, JODHPUR PAN NO. AAKPC 0996 P ITSSA NO. 1/JU/2010 [BLOCK PERIOD FROM 1.4.1996 TO 6.2.2003] SHRI RAM JEEVAN CHOUDHARY VS. THE DY.C.I.T B-6, SHRAMIKPURA CENTRAL CIRCLE- 1 MASURIYA, JODHPUR JODHPUR PAN NO. AAKPC 0996 P ITSSA NO. 8/JU/2010 [BLOCK PERIOD FROM 1.4.1996 TO 6.2.2003] THE DY.C.I.T VS. SHRI JUGAL KISHORE CHOUDHARY CENTRAL CIRCLE- 1 B-6, SHRAMIKPURA JODHPUR MASURIYA, JODHPUR PAN NO. AAKPC 0993 J 2 ITSSA NO. 3/JU/2010 [BLOCK PERIOD FROM 1.4.1996 TO 6.2.2003] SHRI JUGAL KISHORE CHOUDHARY VS. THE DY.C.I. T B-6, SHRAMIKPURA CENTRAL CIRCLE- 1 MASURIYA, JODHPUR JODHPUR PAN NO. AAKPC 0993 J ITSSA NO. 2/JU/2010 [BLOCK PERIOD FROM 1.4.1996 TO 6.2.2003] SHRI RAM KISHORE CHOUDHARY VS. THE DY.C.I.T B-6, SHRAMIKPURA CENTRAL CIRCLE- 1 MASURIYA, JODHPUR JODHPUR PAN NO. AAKPC 0995 Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI U.C. JAIN SHRI GAUTAM CHAND DEPARTMENT BY : SHRI A.K. KHANDELWAL, DR DATE OF HEARING : 14.12.2012 DATE OF PRONOUNCEMENT : 23.01.2013 3 ORDER PER BENCH :- IN THE ABOVE CAPTIONED APPEALS, SHRI U.C. JAIN HAS RAISED AN ADDITIONAL GROUND THAT THESE APPEALS ARIS E AS A RESULT OF SEARCH OPERATION CONDUCTED IN THE CASE OF SHRI BADRI RAM CHOUDHARY U/S 132 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT', FOR SHORT]. 2. THESE APPEALS EMANATE FROM THE ORDERS PASSED U/S 158BD R.W.S 158BC OF THE ACT. IT WAS ARGUED TH AT THE SEARCH CONDUCTED IN THE CASE OF SHRI BADRI RAM CHOU DHARY HAS BEEN DECLARED NULL AND VOID AND, THEREFORE, IN VIEW OF THAT FINDING, THE ASSESSMENT ORDERS FRAMED ON THE B ASIS OF THE VERY SAME SEARCH CANNOT SURVIVE. THIS BEING AN IMPORTANT LEGAL ISSUE, THE ADDITIONAL GROUND RAISED IN ALL THESE CASES HAVE BEEN ACCEPTED AND ADMITTED. 4 3. WE HAVE HEARD THE RIVAL SUBMISSIONS ON THIS GROUND AND HAVE CAREFULLY PERUSED THE ENTIRE MATERI AL ON RECORD. WE HAVE FOUND THAT SEARCH WAS CONDUCTED U/ S 132 OF THE ACT IN THE BUSINESS PREMISES OF SHRI BADRI R AM ON 6.2.2003. EARLIER, A SURVEY PROCEEDING U/S 133A OF THE ACT WAS INITIATED WHICH WAS LATER ON CONVERTED INTO SEA RCH. CONSEQUENT UPON THIS SEARCH, ASSESSMENT WAS COMPLET ED U/S 158BC(C) R.W.S 144 OF THE ACT ON 27.6.2005. AT THE TIME OF PASSING THE SAID ASSESSMENT ORDER, THE A.O. RECORDED SATISFACTION NOTE FOR ISSUANCE OF NOTICE U /S 158BC TO THE OTHER ASSESSEES BEFORE US. CONSEQUENTLY, ASSESSMENT ORDERS U/S 158BD R.W.S. 143(3) WERE COMP LETED IN ALL THESE CASES. THE ASSESSEE SHRI BADRI RAM CH OUDHARY HAD CHALLENGED SEARCH OPERATION ITSELF AND THE SAME WAS DECLARED TO BE NULL AND VOID BY THE TRIBUNAL VIDE T HEIR ORDER DATED 19.1.2012 PASSED IN ITSSA NO, 55/JP/200 6, COPY OF WHICH IS FURNISHED ON RECORD. SIMILARLY, T RIBUNAL HAS ALSO QUASHED THE PROCEEDINGS U/S 158BD ON SIMIL AR FACTS WHILE DECIDING THE CASE OF KAMINI CONSTRUCTIO N CO. P. LTD BY PASSING DECISION IN ITSSA NO. 4/JODHPUR/2010 ON 5 13.1.2012. A COPY OF THIS ORDER IS ALSO PLACED AT PAGES 74 TO 80 OF THE ASSESSEES PAPER BOOK. THE HELD PORTI ON OF THIS ORDER IS CONTAINED IN PARA 2.5 AND IS EXTRACTE D VERBATIM FOR READY REFERENCE: WE HAVE HEARD BOTH THE PARTIES. THE REASONS RECORDE D ARE AVAILABLE AT PAGES 5 AND 6 OF THE PAPER BOOK FILED BY THE ID. AR. THE REASONS HAVE BEEN RECORDED BY THE AO HAVING JURISDICTION OVER THE ASSESSEE. THE AO WHO HAS RECO RDED THE REASONS SATISFACTION IS NOT THE AO IN THE CASE OF T HE PERSON SEARCHED BUT IS IN THE CASE OF THE ASSESSEE. THESE REASONS HAVE BEEN RECORDED ON 21-05-2007. NOTICE U/S 158BD HAS A LSO BEEN ISSUED ON THE SAME DATE. IN THE REASONS RECORDED, I T IS MENTIONED THAT CERTAIN DOCUMENTS WERE FOUND DURING SEARCH IN THE CASE OF SHRI BADRI RAM CHOUDHARY. THE BLOCK ASS ESSMENT U/S 158BC IN THE CASE OF SHRI BADRI RAM CHOUDHARY W AS PASSED ON 27-06-2005. THE IT AT JODHPUR BENCH IN THE CASE OF PANCHRATNA COMPLEX VS. ACIT VIDE ORDER DATED 31-08- 2009 IN ITSSA NO. 45/HU/2004 HAD AN OCCASION TO CONSIDER TH E VALIDITY OF NOTICE ISSUED U/S 158BD. THE SATISFACTION WAS RE CORDED BY THE AO HAVING JURISDICTION OVER THE PERSON AGAINST WHOM NOTICE 6 U/S 158BD WAS ISSUED. IN THAT CASE, THE AO WAS THE SAME WHO WAS HAVING JURISDICTION OVER THE SEARCHED PERSON AN D THE ASSESSEE AND IT WAS CONTENDED BEFORE THE TRIBUNAL T HAT REQUIREMENT OF SECTION 158BD STANDS SATISFIED. THE ITAT JODHPUR BENCH HELD THAT THE NOTICE ISSUED IS AB INI TO VOID. THE IT AT MUMBAI BENCH IN THE CASE OF ACIT VS. KISHORE LAI BALWANT RAI AND OTHERS' HAS HELD THAT REQUIREMENT OF SECTIO N 158BD WITH RESPECT TO RECORDING OF SATISFACTION IS NOT DI LUTED IN THE CASE WHERE THE AO OF THE PERSON SEARCHED AND OTH ER PERSON IS COMMON. IN THIS CASE BEFORE THE MUMBAI TRIBUNAL, THE ASSESSMENT U/S 158BC WAS MADE ON 21-05-2001 WHILE SATISFACTION WAS RECORDED ON 15-03-2002. SUCH SATIS FACTION WAS TREATED AS BELATED AND IT WAS HELD THAT NOTICE U/S 158BD IS INVALID. THE SPECIAL BENCH IN THE CASE OF MANOJ AGA RWAL VS. DCIT, 113 ITD 377 (DEL.) HAD AN OCCASION TO CONSIDE R IN RESPECT OF TIME LIMIT FOR ISSUING NOTICE U/S 158BD. THE LE GISLATURE HAS FIXED THE TIME LIMIT U/S 158BE FOR PASSING THE BLOCK ASSESSMENT U/S 158BC AND THEREFORE, THIS TIME LIMIT AUTOMATICALLY APPLIES FOR INVOKING THE PROVISIONS O F SECTION 158BD. THE SPECIAL BENCH HELD THAT SATISFACTION IS TO BE 7 RECORDED BY THE AO HAVING JURISDICTION OVER THE SEA RCHED PERSON. THE DELHI BENCH IN THE CASE OF ACIT VS. ASH NA MONGA, 2010-TIOL -531-ITAT DELHI HAD AN OCCASION TO CONSID ER THE VALIDITY OF ISSUE OF NOTICE U/S 158BD AFTER 30 MONT HS OF ORDER PASSED U/S 158BC. IN THIS CASE, THE SATISFACTION WA S RECORDED ON 13-01-2004 I.E. BEYOND THE TIME LIMIT PRESCRIBED U/S 158BE FOR PASSING THE ORDER U/S 158BC. THIS TIME LIMIT ST OOD EXPIRED ON 29-08-2002. THE DELHI BENCH HELD THAT NOTICE U/S 158BD IS INVALID. IN THIRD MEMBER DECISION OF JABALPUR BENCH IN THE CASE OF ADDL. CIT VS. MUKTA GOYANKA, 129 ITD 201, I T WAS HELD THAT SATISFACTION SHOULD BE RECORDED BY THE AO OF T HE SEARCHED PERSON. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. CALCUTTA KNITWEARS, 338 ITR 239 HELD THAT SATISFACTION U/S 158BD RECORDED AFTER COMPLETI ON OF BLOCK ASSESSMENT U/S 158BC WILL MAKE THE NOTICE U/S 158BD AS INVALID. CONSIDERING THE ORDER OF THE SPECIAL BE NCH AND THE DECISIONS AS REFERRED ABOVE, WE HOLD THAT NOTIC E U/S 158BD IS NOT VALID IN THE EYE OF LAW. ONCE THE NOTI CE IS INVALID THEN CONSEQUENTIAL ORDER PASSED IS ALSO INVALID. WE THEREFORE, CANCEL THE ORDER OF THE AO AND WE DO NOT FEEL TO AD JUDICATE 8 UPON THE OTHER GROUNDS OF APPEAL. THUS THE ORDER OF THE AO STANDS CANCELLED. 4. ACCORDINGLY, WE HOLD THAT ALL THE ASSESSMENT ORD ERS IN RESPECT OF ALL THE ASSESSEES BEFORE US HAVE TO BE Q UASHED. WE QUASH ALL THE ASSESSMENT ORDERS AND ALLOW THE AP PEALS OF ASSESSEE AND DISMISS THE APPEAL OF THE REVENUE. 5. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE ALLOWED WHEREAS THE APPEALS OF THE REVENUE ARE DISM ISSED ORDER PRONOUNCED IN THE COURT ON 23 RD JANUARY, 2013. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23 RD JANUARY, 2013 VL/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) BY ORDER 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR