Appeal details
Counselvise Citation
[2024] 100 COUNSELVISE.COM (IT) 3832 (ITAT-PANAJI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 7 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
15-02-2024
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
WT(D)
Next Hearing Date
12-02-2024
Assessment Year
2014-2015
Appeal Filed On
19-06-2022
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH : PANAJI [THROUGH VIRTUAL HEARING AT INCOME TAX APPELLATE TRIBUNAL : PUNE BENCHES : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK RIPOTE, ACCOUNTANT MEMBER Sl. No. I.T.(S.S.)A.No. Name of Assessee Respondent A.Y. CIT(A)-2's Panaji’s Order Appealed Against Proceedings under sec. 1. 24/PAN./2022 Norbert Fitness Studio JV Classic Squares, 106, First Floor, Fortune Square, Morod, Mapusa, Goa. PIN 403507 PAN AABAN7262R ACIT, Central Circle, 2 nd Floor, Pundalik Niwas, Rua De Ourem, Panaji, Goa PIN 403 001 2014-15 DIN : ITBA/APL/M/250/2022-23/ 1042811722(1), Dated 22.04.2022 153C of the Income Tax Act, 1961 (in short "the Act"). 2. 25/PAN./2022 2015-16 CIT(A)-2/PNJ/11402/2014-15 Dated 22.04.2022 3. 26/PAN./2022 2016-17 DIN : ITBA/APL/M/250/2022-23/ 1042811783(1), Dated 22.04.2022 4. 27/PAN./2022 2017-18 DIN : ITBA/APL/M/250/2022-23/ 1042811808(1), Dated 22.04.2022 5. 28/PAN./2022 2018-19 DIN : ITBA/APL/M/250/2022-23/ 1042811846(1), Dated 22.04.2022 6. 29/PAN./2022 Zoes Fitness, G-2, Ameya Building, Opp. St. Inez Church, Panaji. Goa. PIN 403 001 PAN AABFZ2493H ACIT, Central Circle, 2 nd Floor, Pundalik Niwas, Rua De Ourem, Panaji, Goa PIN 403 001 2015-16 DIN : ITBA/APL/M/250/2022-23/ 1042811990(1), Dated 22.04.2022 7. 30/PAN./2022 2016-17 DIN : ITBA/APL/M/250/2022-23/ 1042812015(1), Dated 22.04.2022 8. 31/PAN./2022 2017-18 DIN : ITBA/APL/M/250/2022-23/ 1042812030(1), Dated 22.04.2022 9. 32/PAN./2022 2018-19 DIN : ITBA/APL/M/250/2022-23/ 1042812074(1), Dated 22.04.2022 10. 33/PAN./2022 Mr. Norbert Ezequiel D Souza, 255, Nairalem, Morod, Caranzalem, Goa. PIN 403 002 PAN AGNPD7226Q ACIT, Central Circle, 2 nd Floor, Pundalik Niwas, Rua De Ourem, Panaji, Goa PIN 403 001 2014-15 DIN : ITBA/APL/M/250/2022-23/ 1042811534(1), Dated 22.04.2022 U/sec.153A of the Income Tax Act, 1961 (in short "the Act"). 11. 34/PAN./2022 2015-16 DIN : ITBA/APL/M/250/2022-23/ 1042811553(1), Dated 22.04.2022 12. 35/PAN./2022 2016-17 DIN : ITBA/APL/M/250/2022-23/ 1042811593(1), Dated 22.04.2022 13. 36/PAN./2022 2017-18 DIN : ITBA/APL/M/250/2022-23/ 1042811627(1), Dated 22.04.2022 14. 37/PAN./2022 2018-19 DIN : ITBA/APL/M/250/2022-23/ 1042811655(1), Dated 22.04.2022 15. 38/PAN./2022 NRB-Norbert Fitness Studio, Shop No.SH1 to SH7, Ground Floor, Confiraria Enclave, Mundvel, Vas-da-Gama, Goa. PIN 403 802 PAN AAJFN0877F ACIT, Central Circle, 2 nd Floor, Pundalik Niwas, Rua De Ourem, Panaji, Goa PIN 403 001 2014-15 DIN : ITBA/APL/M/250/2022-23/ 1042811883(1), Dated 22.04.2022 U/sec.153C of the Income Tax Act, 1961 (in short "the Act"). 16. 39/PAN./2022 2016-17 DIN : ITBA/APL/M/250/2022-23/ 1042811902(1), Dated 22.04.2022 17. 40/PAN./2022 2017-18 DIN : ITBA/APL/M/250/2022-23/ 1042811943(1), Dated 22.04.2022 18. 41/PAN./2022 2018-19 DIN : ITBA/APL/M/250/2022-23/ 1042811969(1), Dated 22.04.2022 19. 42/PAN./2022 Smt. Sheryl Elizabeth Afonso E. D Souza, 255, Nairalem, Morod, Caranzalem, Goa. PIN 403 002 PAN AHCPA0764C ACIT, Central Circle, 2 nd Floor, Pundalik Niwas, Rua De Ourem, Panaji, Goa PIN 403 001 2014-15 DIN : ITBA/APL/M/250/2022-23/ 1042811383(1), Dated 22.04.2022 20. 43/PAN./2022 2015-16 DIN : ITBA/APL/M/250/2022-23/ 1042811414(1), Dated 22.04.2022 21. 44/PAN./2022 2016-17 DIN : ITBA/APL/M/250/2022-23/ 1042811448(1), Dated 22.04.2022 22. 45/PAN./2022 2017-18 DIN : ITBA/APL/M/250/2022-23/ 1042811473(1), Dated 22.04.2022 23. 46/PAN./2022 2018-19 DIN : ITBA/APL/M/250/2022-23/ 1042811497(1), Dated 22.04.2022 For Assessees : Shri Niraj Mangla, A.R. For Revenue : Shri P.S. Shivshankar, CIT-DR Date of Hearing : 13.02.2024 Date of Pronouncement : 16.02.2024 2 I.T.(S.S.)A.Nos.24 to 46/PAN./2022 ORDER PER BENCH : The instant batch of twenty three appeals pertains to five assessee’s herein viz., Mr. Norbert Ezequiel D Souza, his spouse Smt. Sheryl Elizabeth Afonso E. D Souza [assessed by way of “apportionment” u/sec.5A @ 50% of the alleged undisclosed income going by Portuguese Civil Code] and the remaining three group concerns/joint ventures M/s. Norbert Fitness Studio JV Classic Squares, Zoes Fitness, and NRB-Norbert Fitness Studio; as the case may be. All other relevant details of the instant batch already tabulated hereinabove. We have heard all the assessees as well as the department at length through their respective learned representatives. Case files perused. 2. It emerges at the outset with the able assistance coming from both the parties that all these cases have arisen out of the department’s sec.132 search action dated 19.09.2018 carried-out in the case of Mr. Norbert Ezequiel D Souza/the appellant in I.T.(S.S).A.No.33 to 37/PAN./2022. And that the departmental authorities thereafter carried-out survey(s) as well followed by initiation of sec.153C proceedings against these remaining four assessees which finally culminated in an identical addition of un- reconciled turnover(s) in their respective hands to the tune of 50% ; involving varying sums. 3 I.T.(S.S.)A.Nos.24 to 46/PAN./2022 2.1. Learned counsel first of all sought to raise an additional ground in these four assessees’ cases i.e., Norbert Fitness Studio JV Classic Squares; Zoes Fitness; NRB-Norbert Fitness Studio and Smt. Sheryl Elizabeth Afonso E. D Souza that sec.153C proceedings initiated against them are not sustainable in law. The Revenue on the other hand raised a very strong technical objection that the assessees’ foregoing additional ground deserves to be rejected since raised at this belated stage. We find no merit in light of this tribunal’s Special Bench decision in All Cargo Global Logistics Ltd. vs. DCIT [2012] 137 ITD 287 [Mum.] [SB]; after considering National Thermal Power Co. Ltd. vs. CIT [1998] 229 ITR 383 [SC], holding that we can very well entertain such a pure legal question for determining the correct tax liability of an assessee provided all the relevant facts are already on record. 3. We now advert to the first and foremost substantial question of validity of sec.153C proceedings itself in these four assessees’ cases other than the “searched” party Mr. Norbert Ezequiel D Souza. We find from a perusal of the department’s combined paper book dated 09.11.2023 itself that there is no satisfaction recorded by the Assessing Officer herein; atleast in case of three assessees’ i.e., Norbert Fitness Studio JV Classic Squares; Zoes Fitness and NRB-Norbert Fitness Studio, that any of the seized material found/seized during the course of search herein dated 19.09.2018 either “belonged” or “pertain” or “related to” them so as to trigger the impugned proceedings. We make it clear that the 4 I.T.(S.S.)A.Nos.24 to 46/PAN./2022 legislature has amended sec.153C vide Finance Act 2015 w.e.f. 01.06.2015 that an Assessing Officer, who happens to be common for all these taxpayers, has to record his satisfaction as to “(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates “to a third party other than the searched- party”. In otherwords, the legislative mandate is explicitly clear that without recording the mandatory clinching satisfaction in the above statutory terms; an Assessing Officer ought not to proceed against a third person as held in Super Malls Pvt. Ltd., vs. PCIT (2020) 423 ITR 281 (SC), in such a vague fashion. Faced with the situation, we adopt stricter construction in light of Commissioner of Customs (Imports), Mumbai vs. M/s. Dilip Kumar And Co. & Ors. [2018] 9 SCC 1 (SC) (FB), to quash these three sec.153C assessments involving M/s. Norbert Fitness Studio JV Classic Squares, Zoes Fitness, and NRB-Norbert Fitness Studio; respectively. 4. Learned CIT-DR at this stage invited our attention to the Assessing Officer’s satisfaction not recorded in case of Smt. Sheryl Elizabeth Afonso E. D Souza. He sought to buttress the point that she is the spouse of the searched-assessee herein Mr. Norbert Ezequiel D Souza; both of them are governed by the Portuguese Civil Code. The Assessing Officer therefore, had rightly proceeded u/sec.5A of the Act whilst recording his satisfaction that the undisclosed income admitted by her husband in the search 5 I.T.(S.S.)A.Nos.24 to 46/PAN./2022 statement is apportioned and therefore, not only it will have “equal bearing” in her hands but also the documents seized “is deemed to belong to Smt. Sheryl Elizabeth Afonso E. D Souza”. 5. We hardly see any reason to express our agreement with the learned CIT-DR’s foregoing arguments. This is not only for the precise reason that such seized documents in the course of a search could not be held to be belonging to a third person as the said clinching statutory expression gets attracted in case if “any money, bullion, jewellery or other valuable article or thing, seized or requisitioned”, other than regarding documents concerned which are covered under the latter limb of “(b)” wherein the legislature has only incorporated “pertains” or “pertain” and “relates to”, in different connotations. Learned CIT-DR could further not dispute the clinching statutory position that the legislature has nowhere included an instance of “apportionment” of income falling u/sec.5A of the Act; in case of applicability of Portuguese Civil Code, as part of sec.153C so as to trigger the consequential proceedings under this Chapter. Section 292C of the Act prescribing presumption of correction of the entries in seized documents applicable in case of the searched-person only than against a third-party, also fortifies our reasoning. We accordingly invoke “stricter interpretation” herein as well to accept Smt. Sheryl Elizabeth Afonso E. D Souza’s arguments in same terms. 6. We now advert to the identical issue involved in all these twenty three cases on merits as well. It emerges during the course 6 I.T.(S.S.)A.Nos.24 to 46/PAN./2022 of hearing all what the learned Assessing Officer has done is not to disallow any claim of assessees’ expenses @ 50% as he had proceeded to add 50% of the receipts of visiting faculties collection in their respective hands for want of details on estimation basis. We deem it appropriate to observe here that these assessees had claimed to have settled both the receipts as well as the corresponding payments made to twenty six trainers. They also submitted the list of their names along with PANs which have undisputedly gone un-rebutted from the departmental side. It is in this factual backdrop that the Assessing Officer observed in his identical findings that once these assessees’ had failed to reconcile their turnover(s); the impugned claims involving varying sums in all these cases deserve to be added to the tune of 50% each and u/sec.5A in Smt. Sheryl Elizabeth Afonso’s hands (supra). We are of the considered opinion that such a course of action of making an adhoc addition of the alleged un-reconciled turnover(s) is not available in an instance involving search assessment(s) wherein the learned departmental authorities ought to act as per the “undisclosed” income related documents detected during the course of search whose contents carry presumption of correctness u/sec.292C of the Act. Faced with the situation, we conclude that the learned Assessing Officer as well as the CIT(A) have erred in law and on facts in making all these impugned adhoc additions @ 50% in these five appellant’s respective cases; involving varying sums. The same are directed to be deleted in very terms. Ordered accordingly. 7 I.T.(S.S.)A.Nos.24 to 46/PAN./2022 All other assessees’ pleadings stand rendered academic in foregoing terms. 7. These five assessee’s twenty three appeals are allowed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open Court on 16.02.2024. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 16 th February, 2024 VBP/- Copy to 1. The applicant 2. The respondent 3. The CIT(A)-2, 3 rd Floor, Pundalik Niwas, Rua De Ourem, Panaji, Goa – 403 001. 4. The Addl. CIT, (Central Range), Panaji. 5. The D.R. ITAT, Panaji Bench, Panaji 6. Guard File. //By Order// //True Copy // Assistant Registrar, ITAT, Pune Benches, Pune.
