Shri Dinesh Shankar Pegu, Guwahati V. Assistant Commissioner of Income Tax, Circle - 1, Guwahati

ITSSA 24/GTY/2014

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8678 (ITAT-GUWAHATI)
• Duration Of Justice: 5 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 15-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M HAOKIP J
• Assessee Lawyers: UTTAM KR BORTHAKUR
• Keywords: Search and seizure; Peak credit; Block assessment; Tax effect; Reason to believe
• Section: 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH, GUWAHATI BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 23 / GAU / 2014 BLOCK PERIOD FROM:1991-92 TO 2001-02 MRS BICHITRA PEGU SHRI DINESH SHANKAR PEGU SHRI JYOTI PRAKASH PEGU L/H LATE ANANDA CHANDRA PEGU, HOUSE NO.5, ANANDA NAGAR, SIX MILE P.O. P.O. KHANAPARA, GUWAHATI- 781022 [ PAN NO.ADKPP 0426 C ] V/S . ACIT, CIRCLE-1, AAYAKAR BHAWAN, 6 TH FLOOR, CHRISTIAN BASTI, G.S. ROAD, GUWAHATI- 781005 /APPELLANT .. / RESPONDENT ITA NO. 24 / GAU / 2014 BLOCK PERIOD FROM:1991-92 TO 2001-02 SHRI DINESH SHANKAR PEGU HOUSE NO.5, ANANDA NAGAR, SIX MILE P.O. P.O. KHANAPARA, GUWAHATI- 781022 [ PAN NO.AJLPP 9429 J ] V/S . ACIT, CIRCLE-1, AAYAKAR BHAWAN, 6 TH FLOOR, CHRISTIAN BASTI, G.S. ROAD, GUWAHATI- 781005 /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI UTTAM KR. BORTHAKUR, ADVOCATE /BY REVENUE SHRI M. HAOKIP, JCIT-DR /DATE OF HEARING 04-07-2019 /DATE OF PRONOUNCEMENT 12-07-2019 / O R D E R ITA NO.23 & 24/GAU/2014 B.P. 199 1-92 TO 2001-02 M.R BICHITRA PEGU & D.S. PEGU VS. ACIT, CIR-1 GAU PAGE 2 PER BENCH:- THESE TWO APPEAL(S) PERTAIN TO AS MANY ASSESSEE(S) NAMELY MRS. BICHITRA PEGU AND DINESH SHANKAR PEGU FOR RELEVANT BLOCK ASSESSMENT 1991- 92 TO 2001-02, ARISING FROM THE COMMISSIONER OF INC OME TAX (APPEALS)- GUWAHATIS SEPARATE ORDER BOTH DATED 09.10.2013, PA SSED IN CASE NOS. GUWA-162 & 164/2002-03; RESPECTIVELY INVOLVING PROC EEDINGS U/S 158BC(C) R.W.S.143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD SHRI UTTAM KR. BORTHAKUR ADVOCATE APPEARING F OR THE ASSESSEES AND MR. M. HAOKIP JCIT-DR REPRESENTING THE DEPARTME NT. 2. IT TRANSPIRES AT THE OUTSET DURING THE COURSE OF HEARING THAT THE INSTANT LIS HAS EMANATED FROM THE SEARCH IN QUESTION DATED 20. 07.2000 CARRIED OUT IN CASE OF LATE SHRI ANAND CHAND PEGU ( PREDECESSOR IN INTEREST OF THESE TWO TAXPAYERS) . LEARNED COUNSEL INVITES OUR ATTENTION TO THIS TRI BUNALS INTERLOCUTORY ORDER DATED 20.04.2017 ADJOURNING BOTH THESE TWO CA SES SINE DIE TO AWAIT DECISION OF HONBLE APEX COURT IN CIT VS. R. RAMAIY A CIVIL APPEAL NO.2734 OF 2013 FILED BY THE REVENUE CHALLENGING CORRECTNESS O F THE CONCERNED HONBLE HIGH COURTS ORDER HOLDING THAT THIS TRIBIUNAL COUL D VERY WELL ADJUDICATE UPON THE ISSUE OF VALIDITY OF INITIATION OF A SEARCH. THERE IS NO DISPUTE THAT THE REVENUES SAID LIS STANDS DECLINED SINCE INVOLVING LOWER THAN THE PRESCRIBED TAX EFFECT VIDE ORDER DATED 17.09.2018. WE ARE THER EFORE TAKING UP THESE TWO APPEAL(S) IN VIEW OF ALL THESE INTERVENING JUDICIAL DEVELOPMENTS. 3. LEARNED COUNSEL INVITES OUR ATTENTION TO THE CO RRESPONDING FIRST IDENTICAL LEGAL GROUND THAT THE DEPARTMENT HAD NOT INITIATED THE SEARCH IN ISSUE WITHIN THE PROVISIONS OF LAW AND THEREFORE, THESE TWO COR RESPONDING ASSESSMENT(S) AS WELL AS THE PROCEEDINGS ARE NOT SUSTAINABLE. WE NOTICE IN THIS BACKDROP THAT CIT(A) HAS REJECTED THE ASSESSEES INSTANT LEG AL PLEA AS UNDER:- C. FOR THE SAKE OF CONVENIENCE, GROUNDS 1 AND 2 OF APPEAL ARE TAKEN UP TOGETHER. IN THESE GROUNDS THE APPELLANT HAS CONTENDED THAT ASSU MPTION OF JURISDICTION U/S 132 OF IT ACT WAS ILLEGAL AND WITHOUT AUTHORITY OF LAW; AN D THE RESULTANT ASSESSMENT ORDER U/S. 158BC(C)/143(3) OF IT ACT WAS BAD IN LAW AND L IABLE TO BE ANNULLED/QUASHED. IT IS ITA NO.23 & 24/GAU/2014 B.P. 199 1-92 TO 2001-02 M.R BICHITRA PEGU & D.S. PEGU VS. ACIT, CIR-1 GAU PAGE 3 SETTLED POSITION OF LAW THAT REASON TO BELIEVE FOR AUTHORIZING SEARCH AND SEIZURE U/S. 132 OF IT ACT NEED NOT BE DISCLOSED WHEN A MER E ALLEGATION IS MADE BY TD HE PETITIONER. FURTHER, ILLEGALITY OF SEARCH DOES NOT INITIATED EVIDENCE COLLECTED DURING SEARCH. FURTHER EVIDENCE COLLECTED DURING AN ILLEGA L SEARCH CAN ALSO BE USED AGAINST THE SEARCHED PARTY. IN THIS CONNECTION, THE CASE LA WS REPORTED AT DR. RATAP SINGH & ANOTHER VS DIRECTOR OF ENFORCEMENT & ORS. 155 ITR 1 66 (SC); GENOM BIOTECH (P)) LTD & ORS. VS DIT(INV.) & ORS. 23 DTR 241 (BOM)/ 22 4 CTR 270; POORAM MAL VS DIRECTOR OF INSPECTION (INVESTIGATION) & ORS. 93 IT R 505 (SC); STATE OF PUNJAB VS BALDEV SINGH ETC. 157 CTR 34 (SC). FURTHER, IN THE CASE OF ITO VS SETH BROS. 74 ITR 836 (SC), IT WAS HELD THAT WARRANT OF AUTHORIZATION NEED NOT SPECIFY THE PARTICULARS OF BOOKS OF ACCOUNT AND DOCUMENTS TO BE UNEARTHED IN S EARCH. FURTHERMORE, IT WAS HELD IN CIT VS PARA RICE MILLS 313 ITR 182 (P&H), THAT T RIBUNAL CANNOT GO INTO VALIDITY OR OTHERWISE OF ADMINISTRATIVE DECISION FOR CONDUCTING SEARCH AND SEIZURE WHEN HEARING AN APPEAL AGAINST THE ORDER OF ASSESSMENT. MOREOVER , PERUSAL OF SECTIONS 246A/246 OF IT ACT SHOWS THAT AUTHORIZING SEARCH AND SEIZURE U/S. 132 OF IT ACT IS NOT APPEALABLE AND THEREFORE THE GROUNDS 1 AND 2 OF APP EAL ARE NOT MAINTAINABLE. IN ANY CASE NOTHING HAS BEEN BROUGHT ON RECORD TO SUBSTANT IATE THE ALLEGATION THAT ASSUMPTION OF JURISDICTION U/S. 132 WAS ILLEGAL AND WITHOUT AUTHORITY OF LAW. THERE IS NO CREDIBLE EVIDENCE OR MATERIAL BEFORE ME TO HOLD THE VIEW THAT SEARCH CONDUCTED U/S 132 OF THE ACT WAS ILLEGAL OR WITHOUT AUTHORITY OF LAW. MOREOVER, THE ASSESSING OFFICER HAS ALSO CONFIRMED VIDE F.NO.ADKPP0426C/BP /ACOT/C-I/GHY/486 DATED 10/09/2010 THAT SEARCH WAS CONDUCTED AS PER THE PRO VISIONS OF THE INCOME TAX ACT, 1961. IN VIEW OF THE FOREGOING DISCUSSION, I FIND N O MERIT IN GROUNDS 1 AND 2 OF APPEAL. ACCORDINGLY, GROUND 1 AND 2 OF APPEAL ARE D ISMISSED. MR. BORTHAKUR VEHEMENTLY CONTENDS THAT SINCE VARIOU S HONBLE HIGH COURT(S) HAVE TAKEN DIVERGENT VIEW AND THERE IS NO ADJUDICAT ION COMING FROM HONBLE JURISDICTIONAL HIGH COURT, WE OUGHT TO ADOPT THE VI EW FAVOURING THE TAXPAYER GOING BY THE HONBLE APEX COURTS DECISION IN CIT VS. VEGETABLE PRODUCTS LTD. (1973) 88 ITR 192 (SC). WE FIND NO MERIT IN ASSESSE ES INSTANT LEGAL ARGUMENTS. WE MAKE IT CLEAR FIRST OF ALL THAT THE A SSESSEES CORRESPONDING LEGAL GROUND BEFORE THE CIT(A) AS WELL AS RAISED BE FORE US IN TRIBUNAL NOWHERE SPECIFIES THE MANNER IN WHICH THE SEARCH ACTION DOES NOT CONFIRM TO PROVISIONS OF THE LAW AT THE TIME OF INITIATION. T HIS CLINCHING FACTUAL ASPECT HAS GONE UNREBUJTTED FROM THE TAXPAYERS SIDE. THE FACT ALSO REMAINS THAT SINCE THE IMPUGNED INSTANT ISSUE OF VALIDITY OF SEARCH BE FORE THE TRIBUNAL HAS INVOLVED DIVERGENT LEGAL OPINION FROM VARIOUS HONB LE HIGH COURT(S) OTHER THAN THE HONBLE JURISDICTIONAL HIGH COURT; WE CONCLUDE WE CAN VERY WELL TAKE OUR CALL ON THE ISSUE. IT HAS COME ON RECORD THAT HONB LE CHATTISGARH HIGH COURTS DECISION DECLINING THE VERY LEGAL GROUND IN REVENUE S FAVOUR STANDS UPHELD IN SPECIAL LEAVE PETITION FILED/REJECTED IN HONBLE AP EX COURT (SUPRA) WHEREAS THE ITA NO.23 & 24/GAU/2014 B.P. 199 1-92 TO 2001-02 M.R BICHITRA PEGU & D.S. PEGU VS. ACIT, CIR-1 GAU PAGE 4 REVENUES APPEAL HAS BEEN DECLINED FOR INVOLVING LO W TAX EFFECT. WE THEREFORE CONCLUDE IN THESE PECULIAR FACTS THAT ASSESSEES FO RMER LEGAL PLEA DOES NOT WARRANT ACCEPT ONCE FOR LACK OF PROPER PLEADINGS AS WELL AS IN VIEW OF THE FORGOING SETTLED LEGAL POSITION. THESE TWO ASSESSEE S FAIL IN THEIR RESPECTIVE CORRESPONDING FOR SUBSTANTIVE GROUND THEREFORE. 4. COMING TO MERITS OF THE ISSUES RAISED IN BOTH TH ESE APPEAL CHALLENGING CORRECTNESS OF THE LOWER AUTHORITIES ACTION MAKING VARIOUS ADDITION(S) MAINLY THOSE OF INVESTMENTS IN BANK ACCOUNTS, CREDIT CO-OP ERATIVE SOCIETIES AND OTHER HEAD(S). LEARNED COUNSELS ONLY ARGUMENT IS THAT TH E CIT(A)S ORDER IS TOTALLY NON-SPEAKING WHEREIN HE HAS NOT CONSIDERED THE EVID ENCE FILED ON RECORD. WE FIND NO MERIT IN THESE LATTER ARGUMENTS AS WELL IN PRINCIPLE. THESE TWO ASSESSEES APPEAR TO HAVE EXPLAINED SOURCE OF THEIR RESPECTIVE INVESTMENTS AMOUNTS AS RECEIVED FROM THE FORMER ASSESSEES WIFE AND LATTER MOTHER SMT. BICHITRA PEGU (FORMER APPELLANT) AND THEIR CLAIM IS THAT SMT. PEGU WAS AN EXPERT WEAVER HAVING EARNED TO UNEXPLAINED INCOME O F RS.14,35,062/-. THESE TWO TAXPAYERS CLAIM CREDIT OF THE SAID AMOUNTS IN THEIR HANDS. WE FIND NO SUBSTANCE IN THE INSTANT ARGUMENTS AS WELL SINCE TH ERE IS NOT EVEN SMT. PEGUS CASH FLOW STATEMENT PLACED ON RECORD SUGGEST ING UTILIZATION OF SAID INCOME IN ASSESSEES INVESTMENTS. WE MAKE IT CLEAR THAT ALL THESE INVESTMENTS AND DEPOSITS HAVE BEEN MADE IN THE HANDS OF SEARCHE D ASSESSEE-ANAND CHANDRA PEGU AND DINESH SHANKAR PEGU ONLY. WE THUS CONCLUDE THAT THE LOWER AUTHORITIES HAVE RIGHTLY ASSESSED ALL THESE I NVESTMENTS IN THESE TWO ASSESSEES HANDS REPRESENTING ON THEIR UNEXPLAINED INCOME. 5. LASTLY COMES THE ISSUE OF CORRECT COMPUTATION OF THE IMPUGNED INVESTMENTS AND DEPOSITS. LEARNED DEPARTMENTAL REPR ESENTATIVE FAILS TO DISPUTE THE CRUCIAL FACTS THAT NEITHER THE ASSESSIN G OFFICER NOR THE CIT(A) HAVE CONSIDERED THE ASSESSEES CASH WITHDRAWALS IN EARLI ER ASSESSMENT YEARS AS WELL AS FROM THEIR RESPECTIVE BANK ACCOUNTS FOR THE PURPOSE OF PEAK CREDIT. THE FACT ALSO REMAINS THAT THE ASSESSEES HAVE NOT FILED SUCH DETAILS RIGHT FROM ITA NO.23 & 24/GAU/2014 B.P. 199 1-92 TO 2001-02 M.R BICHITRA PEGU & D.S. PEGU VS. ACIT, CIR-1 GAU PAGE 5 ASSESSMENT TILL DATE FOR THE PURPOSE OF SEEKING CRE DIT OF THEIR RESPECTIVE EARLIER CASH WITHDRAWALS. FACED WITH THIS PECULIAR SITUATIO N, WE DEEM IT APPROPRIATE THAT LARGER INTEREST OF JUSTICE WOULD BE AT THIS ST AGE IN CASE THE FORMER ASSESSEE IS ASSESSED FOR A LUMP SUM AMOUNT OF RS.28 LAKH OUT OF ADDITION THAN THAT ADDED IN THE LOWER PROCEEDINGS TO THE TUN E OF RS.31,53,807/- AND LATTER TAXPAYER FOR SIMILAR SUM FOR RS.12 LAC THAN RS.8,97,243/- AND RS.6,40,044/-. WE MAKE IT CLEAR THAT WE HAVE ARRIVE D AT THE FOREGOING ESTIMATION IN PECULIAR FACTS ONLY. THESE TWO ASSESS EES GET PART RELIEF ACCORDING. NECESSARY TELESCOPING FINAL COMPUTATION TO BE FINALIZED BY THE ASSESSING OFFICER AS PER LAW. 6. THESE TWO ASSESSEES APPEALS ARE PARTLY ALLOWED I N ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT 12/ 07/2019 SD/- SD/- ( ) (&' ) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) GUWAHATI, *DKP (- 12 / 07 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-MRS BICHITRA PEGU/DINESH SHARMA PEGU, HOU SE NO.5, ANANDANAGAR SIX MILE, P.O. KH ANAPARA, GUWAHATI-781022 2. /REVENUE-ACIT, CIR-1, AAYAKAR BHAWAN, 6 TH FL, CHRISTIAN BASTI, G.S. ROAD, GUWAHATI-781005 3. 3 4 9 / CONCERNED CIT GUWAHATI 4. 4- / CIT (A) GUWAHATI 5. < ''3, 3, 9 / DR, ITAT, GUWAHATI 6. B / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY (ON TOUR) 3,