Sanjay Verma, V. ACIT, Range-I,

ITSSA 200/DEL/2005

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9472 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 16-03-2010
• Assessment Year: misc
• Appeal Filed On: 25-04-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAJANAND MEENA
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Opportunity of being heard; Block assessment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI C.L. SETHI, JUDICIAL MEMBER & SHRI R.C. SHARMA, ACCOUNTANT MEMBER IT(SS)A NO. 200/DEL/2005 BLOCK PERIOD : 01.04.1988 TO 16.04.1999 SHRI SANJAY VERMA, 1-16, SECTOR-10, FARIDABAD (HARYANA) VS. ACIT, RANGE-I, FARIDABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : DR. RAKESH GUPTA, ADV. RESPONDENT BY : GAJANAND MEENA, CIT D.R. O R D E R PER: C.L. SETHI, J.M. THIS PRESENT APPEAL HAS BEEN FILED BY THE ASSESSE E AGAINST THE ORDER DATED 29.03.2005 PASSED BY THE LD. CIT(A) IN THE MATTER O F A BLOCK ASSESSMENT MADE BY THE A.O. U/S 158BC READ WITH SECTION 158BD OF THE I NCOME TAX ACT, 1961 FOR THE BLOCK PERIOD FROM 01.04.1988 TO 16.04.1999. 2. THE ORIGINAL GROUNDS OF APPEAL RAISED BY THE ASS ESSEE IN THIS APPEAL ARE AS UNDER:- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) E RRED ON FACTS AS WELL AS IN LAW IN HOLDING THAT (A) ACIT, RANGE-1, FARIDABAD HAD JURISDICTION TO IS SUE NOTICE U/S 158BD. (B) THE NOTICE ISSUED U/S 158BD WAS A VALID NOTICE. (C) PROPER OPPORTUNITY WAS GIVEN TO THE ASSESSEE. IT(SS)A NO. 200/DEL/2005 2 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERR ED ON FACTS AS WELL AS IN LAW IN SUSTAINING ADDITION OF RS. 45,165 /- TOWARDS INVESTMENT IN M/S. NASA SYSTEMS. 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERR ED ON FACTS AS WELL AS IN LAW IN SUSTAINING ADDITION OF RS. 43,750 /- AS INVESTMENT IN PNB BUILDING. 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERR ED ON FACTS AS WELL AS IN LAW IN SUSTAINING ADDITION OF RS. 20,000 /- AS UNDISCLOSED EXPENDITURE ON MARRIAGE. 5. THE ASSESSEE DENIES LIABILITY TO PAY INTEREST CHARG ED U/S 158BFA(1). 3. IN THE COURSE OF HEARING OF THIS APPEAL, THE ASS ESSEE HAS ALSO RAISED ONE MORE ADDITIONAL GROUND, WHICH READS AS UNDER:- THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. A.O. HAS ERRED IN LAW AND ON FACTS IN ASSUMING JURISDICT ION U/S 158BD WITHOUT THERE BEING SATISFACTION RECORDED, MORE SO IN TERMS OF HONBLE SUPREME COURTS DECISION IN THE CASE OF MANISH MAHE SHWARI, INDORE CONSTRUCTION (P) LTD. VS. ACIT, CIT AND ANR. REPORT ED AT 289 ITR 341. 4. WE HAVE HEARD BOTH THE PARTIES AND HAVE GONE THR OUGH THE ORDERS OF THE AUTHORITIES BELOW. 5. THIS APPEAL WAS EARLIER DISPOSED OFF VIDE ORDER DATED 24.08.2007 PASSED BY THIS TRIBUNAL ALONGWITH SOME OTHER APPEALS IN THE C ASE OF SHRI PRATAP SINGH VERMA. THE ASSESSEES APPEAL WAS ALLOWED BY HOLDIN G THAT THE NOTICE ISSUED U/S 158 BD WAS NOT VALID AND THE MATTER WAS RESTORED TO THE FILE OF THE A.O. FOR PASSING A FRESH ORDER AFTER ISSUING A VALID NOTICE U/S 158BC. THE TRIBUNAL DID NOT DECIDE THE ISSUE REGARDING VARIOUS ADDITIONS MADE B Y THE A.O. ON THEIR MERIT. AGAINST THE TRIBUNALS ORDER, AN APPEAL WAS FILED B EFORE THE HONBLE HIGH COURT OF PUNJAB AND HARYANA COURT, WHICH WAS REGISTERED A S ITA NO. 193 OF 2008. IT(SS)A NO. 200/DEL/2005 3 THE HONBLE HIGH COURT OF PUNJAB AND HARYANA DISPOS ED OFF THE SAID APPEAL IN THE TERMS OF THE ORDER PASSED BY HONBLE HIGH COURT IN ITA NO. 511 OF 2008 IN THE CASE OF CIT, FARIDABAD VS. LATE NIRANJAN LAL VE RMA THROUGH SUBHASH VERMA. IN THE SAID APPEAL, THE HONBLE HIGH COURT SET ASID E THE ORDER OF THE TRIBUNAL AND REMAND THE MATTER TO THE TRIBUNAL TO DEAL WITH AFRE SH IN ACCORDANCE WITH LAW. BEFORE THE HONBLE HIGH COURT, THE ASSESSEE GAVE UP THE GROUND WHICH WAS RAISED BEFORE THE TRIBUNAL REGARDING THE VALIDITY O F THE NOTICE ISSUED U/S 158BC TO THE ASSESSEE WITHOUT GIVING CLEAR 15 DAYS TIME TO F ILE THE BLOCK RETURN. 6. IN THE LIGHT OF THE HONBLE HIGH COURT DECISION, WE, THEREFORE, PROCEED TO DECIDE THIS APPEAL ON MERIT. 7. THE QUESTION ABOUT THE VALIDITY OF NOTICE ISSUED U/S 158BC WITHOUT GIVING CLEAR 15 DAYS TIME DOES NOT SURVIVE ANY MORE. HENC E, IT IS REJECTED. 8. HOWEVER, THE ASSESSEE IN THE ORIGINAL GROUND OF APPEAL HAS TAKEN A PLEA THAT A.O. HAD NO JURISDICTION TO ISSUE NOTICE U/S 1 58BD, WHICH HAS NOW BEEN CERTIFIED CLEARLY BY TAKING ADDITIONAL GROUND OF AP PEAL, WHICH HAS BEEN REPRODUCED ABOVE. 9. THE CRUX OF THE POINT RAISED BY THE ASSESSEE IS THAT THE A.O. HAS ASSUMED JURISDICTION U/S 158BD WITHOUT THERE BEING ANY SATI SFACTION RECORDED TO PROCEED AGAINST THE ASSESSEE U/S 158BD OF THE ACT. 10. IN THE ASSESSMENT ORDER, THE A.O. HAS STATED TH AT A SEARCH AND SEIZER OPERATION U/S 132 OF THE ACT WAS UNDERTAKEN ON 12.0 3.1999, WHICH CONTINUED UP IT(SS)A NO. 200/DEL/2005 4 TO 16.04.1999, AT THE RESIDENCE OF SHRI SUBHASH VER MA AND SMT. KRISHNA VERMA, AND DURING THE COURSE OF WHICH, CERTAIN INCRIMINATI NG DOCUMENTS WERE SEIZED. THE A.O. ALSO STATED THAT EXAMINATION OF THESE INCR IMINATING DOCUMENTS SHOWED UNDISCLOSED INCOME ASSESSABLE IN THE HANDS OF THE P RESENT ASSESSEE ALSO. HE, THEREFORE, ISSUED NOTICE U/S 158BD TO THE ASSESSEE ON 23.04.2001, WHICH WAS DULY SERVED UPON THE ASSESSEE ON 24.04.2001. FROM THE A SSESSMENT ORDER, IT IS NOT CLEAR AS TO WHETHER ANY SATISFACTION REQUIRED U/S 1 58 BD WAS RECORDED WHILE MAKING THE ASSESSMENT OF SHRI SUBHASH VERMA AND/OR SMT. KRISHNA VERMA. THE LD. CIT(A) HAS REJECTED THE FIRST THREE GROUNDS RAI SED BY THE ASSESSEE, WHEREIN VALIDITY OF PROCEEDINGS U/S 158 BD OR THE NOTICE IS SUED U/S 158 BD WERE CHALLENGED BY OBSERVING THAT THE FIRST THREE GROUND S RAISED BY THE ASSESSEE CANNOT BE ACCEPTED. THE ISSUE WHETHER ANY SATISFACTION WA S RECORDED AS REQUIRED U/S 158BD HAS NOT BEEN THOROUGHLY EXAMINED AND DELIBERA TED UPON BY THE LD. CIT(A). SINCE THIS VERY GROUND CHALLENGING THE VER Y PROCEEDINGS INITIATED U/S 158BD IN THE ABSENCE OF ANY SATISFACTION BEING RECO RDED U/S 158BD GOES TO THE ROOT OF THE A.O.S JURISDICTION TO INITIATE PROCEED INGS U/S 158BC READ WITH SECTION 158BD AGAINST THE PRESENT ASSESSEE, WE ARE INCLINED TO RESTORE THE MATTER BACK TO THE FILE OF THE LD. CIT(A) FOR HIS FRESH ADJUDICATI ON AFTER EXAMINING AND VERIFYING ALL THE FACTS AND RECORDS OF THE CASE. SINCE THE V ERY JURISDICTIONAL ISSUE HAS BEEN RESTORED BACK TO THE FILE OF THE LD. CIT(A), THE OT HER GROUNDS CHALLENGING THE ADDITION OF RS. 45,165/-, RS. 43,750/- AND RS. 28,0 00/- RAISED IN GROUND NO. 2, 3 AND 4 NEED NOT ADJUDICATION AT THIS STAGE, AND THE SAME ARE ALSO RESTORED BACK TO IT(SS)A NO. 200/DEL/2005 5 THE LD. CIT(A) FOR HIS FRESH ADJUDICATION IF SITUAT ION SO ARISE. WE ORDER ACCORDINGLY. IT IS NEEDLESS TO MENTION THAT THE LD . CIT(A) SHALL PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE AS WELL AS TO THE A.O. BEFORE DECIDING THE VARIOUS ISSUES BY HIM. 11. IN THE RESULT, THE PRESENT APPEAL FILED BY THE ASSESSEE IS TREATED TO BE ALLOWED FOR A STATISTICAL PURPOSE. 12. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 16 TH MARCH, 2010. (R.C. SHARMA) ACCOUNTANT MEMBER (C.L. SETHI) JUDICIAL MEMBER DATED: 16 TH MARCH, 2010. MAMTA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. BY ORDER DEPUTY REGISTRAR