Meghmani Organic Ltd., Ahmedabad V. The Dy.CIT., Cent.Circle-1(1), Ahmedabad

ITSSA 224/AHD/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 3081 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 24-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 10-03-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D P GUPTA
• Keywords: Search and seizure; Block assessment
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEMBER I.T.(SS)A. NO.224/AHD/2010 A.Y. 2006-07 WITH I.T.(SS)A. NO.189/AHD/2009 A.Y. 2006-07 MEGHMANI ORGANICS LTD., MEGHMANI HOUSE, SHRINIVAS SOCIETY, NR. VIKAS RUH ROAD, AHMEDABAD PAN-AABCM0644E ( ASSESSEE ) VS. THE DCIT, CENTRAL CIRCLE-1(1) AHMEDABAD ( DEPARTMENT ) DEPARTMENT BY : SHRI D.P. GUPTA, CIT- D.R. ASSESSEE BY : SMT. URVASHI SHODHAN, A.R. DATE OF HEARING : 14.09.2012 DATE OF PRONOUNCEMENT : 26.10.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THESE CROSS APPEALS HAVE BEEN FILED AGAINST THE ORD ER OF LD. CIT(A)-1, AHMEDABAD DATED 12.11.2009. I.T.(SS) A. NO.224/AHD/2010 2. THE ASSESSEE, IN THIS APPEAL, VIDE ITS GROUND NO S.1 TO 4 HAS CHALLENGED THE JURISDICTION OF THE ASSESSING OFFICE R IN FRAMING THE ASSESSMENT U/S 153C READ WITH SECTION 153A OF THE A CT. LD. CIT(A) HAS DEALT THE ISSUE AS UNDER:- I.T.(SS)A. NO.224/AHD/2010, A.Y. 2006-07 WITH I.T.(SS)A. NO.189/AHD/2009, A.Y. 2006-0 7 2 IN THE GROUNDS OF APPEAL NOS.1 TO 4, THE APPELLANT HAS CHALLENGED THE ASSESSING OFFICERS ACTION IN FRAMIN G THE ASSESSMENT U/S 153C R.W.S. 153A OF THE I.T. ACT. TH E APPELLANT SUBMITTED THAT IN THE EARLIER ASSESSMENT YEARS, THE HONBLE ITAT HAS QUASHED THE ASSESSMENTS FRAMED BY THE ASSESSING OFFICER U/S 153C R.W.S. 153A OF THE I .T. ACT VIDE ORDER NO.ITA NO.2938-2942/AHD/2008 DATED 16.01.2009. IT WAS CONTENDED THAT RELYING ON THE H ONBLE ITAT DECISION, SUPRA, THE IMPUGNED ASSESSMENT ORDER SHOULD ALSO BE QUASHED. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT . IT IS NOTICED THAT THE IMPUGNED ASSESSMENT HAS BEEN FR AMED BY THE ASSESSING OFFICER U/S 143(3) OF THE I.T. ACT AND THE SAME IS THE NORMAL SCRUTINY ASSESSMENT ORDER. IN V IEW OF ABOVE, THIS GROUND OF APPEAL IS DISMISSED. 3. BEFORE US, LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESS MENT HAS BEEN FRAMED BY THE ASSESSING OFFICER U/S 143(3) OF THE A CT AND THE SAME WAS THE NORMAL SCRUTINY ORDER ONLY. PLACING RELIANCE O N THE DECISION OF THIS BENCH IN THE CASE OF DR. MANSUKH KANJIBHAI SHAH IN I.T.A. NOS.2878, 2879 & 2880/AHD/2007 IT WAS ARGUED THAT THE YEAR IN WHICH THE SEARCH TOOK PLACE HAS TO BE THE CASE OF SEARCH ASSESSMENT AND NOT THE REGULAR ASSESSMENT. THE ASSESSMENT FOR ALL THE 7 YEARS INC LUDING THE YEAR UNDER APPEAL HAVE TO BE COMPLETED U/S 153A OR 153B OR 153C, AS THE CASE MAY BE. SINCE THE YEAR UNDER APPEAL WAS THE Y EAR IN WHICH THE SEARCH TOOK PLACE, THE ORDER PASSED BY THE ASSESSIN G OFFICER WAS AN ASSESSMENT U/S 153C READ WITH SECTION 153A AND THER EFORE, THE DECISION OF HONBLE ITAT IN ITA NO.2938-2942/AHD/20 08 DATED 16.01.2009 IN ASSESSEES OWN CASE HAS TO BE RELIED WHEREIN THE ORDER PASSED BY THE ASSESSING OFFICER U/S 153C READ WITH SECTION 153A OF THE I.T.(SS)A. NO.224/AHD/2010, A.Y. 2006-07 WITH I.T.(SS)A. NO.189/AHD/2009, A.Y. 2006-0 7 3 ACT WERE QUASHED BY THE TRIBUNAL. FOLLOWING THE SA ME, THE ASSESSMENT MADE BY THE ASSESSING OFFICER U/S 153C READ WITH SE CTION 153A DESERVES TO BE QUASHED. LD. D.R., ON THE OTHER HAN D, RELIED ON THE ORDER OF LD. CIT(A). 4. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE FIND THAT THERE IS NO DISPUTE THAT THE SEARCH TOOK PLACE IN THIS CASE ON 22.09.2005 I.E. THE YEAR UNDER APPEAL. THEREFORE, THE RATIO AS LAID DOWN BY HONBLE TRIBUNAL IN THE CASE OF DR. MANSUKH KANJIBHAI SHAH (SUPRA) IS SQUARELY APPLICABLE TO THE FACTS OF THIS CASE. RELEVANT PORTION OF THE SAID DECISION READ AS UNDER:- 9.1 SECTION 153A OF THE IT ACT STARTS WITH THE WO RD NOTWITHSTANDING ANYTHING CONTAINED, IT IS NON-OBS TANTE CLAUSE. FOR APPLICABILITY OF ABOVE PROVISION, THE INITIATION OF SEARCH IS NECESSARY. ONCE A WARRANT OF AUTHORIZATI ON OR REQUISITION IS ISSUED AND SEARCH IS CONDUCTED AND P ANCHNAMA IS DRAWN, THE COMPLETED ASSESSMENTS FOR THE ALL THE RELEVANT YEARS WOULD GET REOPENED IRRESPECTIVE OF WHETHER AN Y INCRIMINATING MATERIAL IS FOUND OR NOT IN RELATION TO A PARTICULAR AY. IN OTHER WORDS, EVEN IF THE MATERIA L FOUND SHOWS THE CONCEALMENT IN ONLY ONE YEAR, ALL THE COM PLETED ASSESSMENTS FALLING IN THE PERIOD OF SIX AYS PRECED ING THE YEAR OF SEARCH WILL GET REOPEN. THERE WAS AN IDENT ICAL PROVISION CONTAINED IN CHAPTER XIV-B OF THE ACT, WH ICH PROVIDES THAT WHERE AFTER 30 TH JUNE, 1995, A SEARCH IS INITIATED U/S 132 OR BOOKS ACCOUNTS ETC. ARE REQUIS ITIONED U/S 132A, THE AO SHALL PROCEED TO ASSESS UNDISCLOSED IN COME IN ACCORDANCE WITH PROVISIONS OF CHAPTER XIV-B FOR MAK ING ASSESSMENT FOR BLOCK PERIOD BUT IN THE BLOCK ASSESS MENTS, THE QUESTION OF ASSESSING AN UNDISCLOSED INCOME IN RELATION TO ANY AY WAS RESTRICTED TO THE INCRIMINATING MATERIAL ON UNDISCLOSED ASSETS DISCOVERED DURING THE COURSE OF SEARCH AND SEIZURE OR IN THE POST SEARCH INQUIRY THE MATER IAL WAS RELATABLE TO SUCH EVIDENCE DISCOVERED IN SEARCH. T HE INCOME ASSESSED IN THE REGULAR ASSESSMENTS WAS NOT TO BE CONSIDERED IN THE BLOCK ASSESSMENTS. HOWEVER, IN T HE PRESENT PROVISIONS U/S 153A, THERE IS NO SUCH PROVI SION PROVIDED IN THE ACT. ONCE WARRANT OF AUTHORIZATION IS ISSUED I.T.(SS)A. NO.224/AHD/2010, A.Y. 2006-07 WITH I.T.(SS)A. NO.189/AHD/2009, A.Y. 2006-0 7 4 AND THE SEARCH IS CONDUCTED AND PANCHNAMA IS DRAWN, THE ASSESSMENTS FOR ALL THE SEVEN YEARS INCLUDING THE C URRENT YEAR HAVE TO BE COMPLETED U/S 153A, 153B AND 153C. EVEN THE ASSESSMENTS WHICH ARE COMPLETED BEFORE THE DATE OF SEARCH SHALL GET REOPENED AND THOSE ASSESSMENTS WHE RE THE PROCEEDINGS ARE PENDING AT THE TIME OF SEARCH SHALL ABATE. THE AO, THEREFORE, SHALL ASSESS OR REASSESS SUCH IN COME FOR ALL THESE YEARS. 9.2 THE ABOVE PROVISION, THEREFORE, PROVIDES FOR RE OPENING OF THE COMPLETED ASSESSMENT OR ABATEMENT OR THE PENDIN G ASSESSMENTS TAKES PLACE IRRESPECTIVE OF WHETHER ANY INCRIMINATING MATERIAL IS FOUND DURING THE COURSE O F SEARCH OR NOT. IT CAN BE ILLUSTRATED BY TAKING AN EXAMPLE TH AT IF DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS, CERTA IN UNACCOUNTED VALUABLES OR MONEY IS FOUND AT THE TIME OF SEARCH WITHOUT THERE BEING INCRIMINATING MATERIAL O R DOCUMENT FOR ANY OTHER YEAR OR YEARS, EVEN THEN ALL THE SIX ASSESSMENTS PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH TOOK PLACE SHALL GET REOPENED. SIMILARLY, IF REQUI SITION IS MADE THEN IRRESPECTIVE OF WHETHER THERE IS ANYTHING INCRIMINATING FOUND AGAINST HIM IN RELATION TO OTHE R YEAR OR YEARS OR NOT, THE ASSESSEE HAS TO UNDERGO THE RIGOR OF THE ASSESSMENT PROCEEDINGS FOR ALL THE SIX YEARS AS WEL L AS THE YEAR UNDER SEARCH. 5. IN VIEW OF THE ABOVE, WE HAVE NO HESITATION IN H OLDING THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS U/S 153C R.W.S. 153A OF THE ACT. SINCE HONBLE ITAT IN ITA NO.2938-2942/AHD/20 08 DATED 16.01.2009 IN ASSESSEES OWN CASE HAS ALREADY HELD THAT THE ORDER PASSED BY THE ASSESSING OFFICER U/S 153C R.W.S. 153 A WERE NOT SUSTAINABLE IN LAW AND THE SAME WERE QUASHED, THE O RDER PASSED BY THE ASSESSING OFFICER FOR THE YEAR UNDER APPEAL IS ALSO HEREBY QUASHED. 6. IN VIEW OF THIS DECISION, THE OTHER GROUNDS TAKE N BY THE ASSESSEE IN ITS APPEAL AND THE GROUNDS TAKEN BY THE REVENUE DO NOT REQUIRE ANY ADJUDICATION. I.T.(SS)A. NO.224/AHD/2010, A.Y. 2006-07 WITH I.T.(SS)A. NO.189/AHD/2009, A.Y. 2006-0 7 5 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED AND THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 26.10.2012 SD/- SD/- (T.R. MEENA) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. 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 6. THE GUARD FILE BY ORDER AR,ITAT,AHMEDABAD