ACIT CIR 16(1), MUMBAI V. SANDHYA P. VAKIL, MUMBAI

ITSSA 26/MUM/2011

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3553 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 26-05-2015
• Assessment Year: misc
• Appeal Filed On: 08-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANUNATHA SWAMY
• Keywords: Block assessment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & SHRI PAWAN SINGH (JM) I.T. SS . NO. 26 /MUM/20 11 (BLOCK PERIOD : 1.4.86 TO 29.12.09 ) ACIT 16(1) MATRU MANDIR TARDEO MUMBAI - 400 007. VS. SMT. SANDHYA P. VAKIL 10, SH RI KRISHNA MAHAL WALKESHWAR ROAD MUMBAI - 400 006. PAN : ABWPV5904B ( APPELLANT ) ( RESPONDENT ) A SSESSEE BY SHRI VINEET GARG DEPARTMENT BY S HRI MANUNATHA SWAMY DATE OF HEARING 2 . 1 1 . 201 7 DATE OF PRONOUNCEMENT 1 3 .1 2 . 201 7 O R D E R PER B.R. B ASKARAN (AM) : - THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 20.1.2011 PASSED BY THE LEARNED CIT(A) - 34, MUMBAI AND IT RELATES TO THE BLOCK PERIOD ENDING ON 23.1.1996. 2. GROUNDS URGED BY THE REVENUE READ AS UNDER: - 1) THE LEARNED C IT(A) ERRED IN HOLDING THAT NO UNDISCLOSED INCOME IS FOUND ON MERITS EVEN IN THE HANDS ON THE ASSESSEE WITHIN THE MEANING OF SECTION 158B(B) OF THE I.T. ACT TO BE ASSESSED U/S. 158BC. 2) THE LEARNED CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ASSESSEE HAS SHOWN RELUCTANCE AND NON - COOPERATION IN FILING ANY DETAILS WHATSOEVER IN NATURE WHICH CAN SUPPORT HER CLAIM OR CONTRADICT THE STAND TAKEN BY THE DEPA R TMENT AT THE TIME OF ORIGINAL ASSESSMENT DESPITE SEVERAL OPPORTUNITIES OF BEING HEARD GIVEN. 3. FAC TS RELATING TO THE CASE ARE STATED IN BRIEF. THE REVENUE CARRIED OUT SEARCH OPERATION U/S. 132 OF THE ACT IN M/S. VATSA GROUP OF CASES ON 12.12.1995. T HE ASSESSEE IS A DIRECTOR IN TWO COMPANIES NAMELY M/S. VATSA CORPORATION LTD. AND M/S. ROLEX HOLDINGS PVT . LTD. THE ASSESSEE WAS HAVING LOCKER WITH THE BANK OF MAHARASHTRA AND THE SAME WAS ALSO SEARCHED ON SMT. SANDHYA P. VAKIL 2 24.1.1996. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE U/S. 158BC OF THE ACT AND COMPLETED THE BLOCK ASSESSMENT ON 31.1.1997. THE ASSESSEE CARRIED THE MATTER IN APPEAL TO ITAT AND THE TRIBUNAL, VIDE ITS ORDER DATED 9.1.2009 PASSED IN IT(SS)A NO. 42/MUM/97, RESTORED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRAMING ASSESSMENT DE - NOVO . ACCORDINGLY, THE ASSESSING OFFICER PASSED A FRESH BLOCK ASSESSMENT ORDER DETERMINING UNDISCLOSED INCOME OF ` 190.34 LAKHS. 4. THE ASSESSEE CHALLENGED THE BLOCK ASSESSMENT ORDER BY FILING APPEAL BEFORE THE LEARNED CIT(A). IN THE SAID APPEAL THE ASSESSEE, INTER ALIA, RAISED A LEGAL GROUND THAT THE ASSESSING OFF ICER DID NOT ISSUE NOTICE U/S. 143(2) OF THE ACT DURING THE COURSE OF ORIGINAL BLOCK ASSESSMENT PROCEEDINGS AS WELL AS DURING THE COURSE OF RESTORED BLOCK ASSESSMENT PROCEEDINGS. ACCORDINGLY, BY PLACING RELIANCE ON THE DECISION RENDERED BY HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. HOTEL BLUE MOON (321 ITR 362) , THE ASSESSEE CONTENDED THAT THE IMPUGNED BLOCK ASSESSMENT ORDER IS NULL AND VOID. THE LEARNED CIT(A) WAS CONVINCED WITH THE SAID CONTENTION S AND ACCORDINGLY HELD THAT THE RATIO LAID DOWN BY HON'B LE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA) WOULD SQUARELY APPLY TO THE FACTS OF THE PRESENT CASE AND ACCORDINGLY QUASH ED THE BLOCK ASSESSMENT ORDER ON THE ABOVE SAID LEGAL GROUND. THEREAFTER, T HE LEARNED CIT(A) ALSO DEALT WITH THE ADDITIONS O N MERIT S AND HELD THAT NO UNDISCLOSED INCOME IS LIABLE TO BE ASSESSED IN THE HANDS OF THE ASSESSEE . A CCORDINGLY HE DELETED ENTIRE ADDITION OF ` 190.34 LAKHS. THE REVENUE IS AGGRIEVED BY THE DECISION SO RENDERED BY THE LEARNED CIT(A). 5. WE HEARD THE PART IES AND PERUSED THE RECORD. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE LEARNED CIT(A) HAS DELETED THE ADDITION ON MERIT S WITHOUT PROPERLY LOOKING TO THE FACTS OF THE CASE. HE SUBMITTED THAT THE ASSESSEE DID NOT FURNISH ANY INFORMATION WITH REGARD TO VARIOUS QUERIES RAISED BY THE AO. SMT. SANDHYA P. VAKIL 3 6. ON THE CONTRARY, LEARNED AR SUBMITTED THAT THE LEARNED CIT(A) HAS QUASHED THE BLOCK ASSESSMENT ORDER ON THE LEGAL GROUND THAT THE ASSESSING OFFICER DID NOT ISSUE NOTICE U/S. 143(2) OF THE ACT AND REVENUE HAS NOT CHALLENGED THE FINDINGS SO GIVEN BY THE LEARNED CIT(A). HE SUBMITTED THAT THE DECISION RENDERED BY LD CIT(A) ON THE ABOVE SAID LEGAL GROUND HAS ATTAINED FINALITY. HE FURTHER SUBMITTED THAT ON MERITS ALSO, THE LEARNED CIT(A) HAS DELETED THE ADDITION O N PROPER REASONING AND HENCE HIS ORDER DOES NOT CALL FOR ANY INTERFERENCE. 7. HAVING HEARD THE RIVAL SUBMISSIONS, WE NOTICED THAT THE REVENUE HAS NOT CHALLENGED THE DECISION RENDERED BY THE LEA RNED CIT(A) ON LEGAL GROUND URGED ON NON - ISSUE OF NOTICE U/S. 143(2) OF THE ACT BY HOLDING THAT THE SAME WOULD MAKE ASSESSMENT ORDER NULL AND VOID. WE NOTICED THAT THE LEARNED CIT(A) HAS FOLLOWED DECISION RENDERED BY HON'BLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA) IN DECIDING THE ABOVE SAID LEGAL ISSUE URGED BY THE ASSESSEE. THUS THE QUASHING OF ORDER ON ACCOUNT OF THIS LEGAL ISSUE HAS ATTAINED FINALITY. ONCE ASSESSMENT ORDER HAS BEEN QUASHED ON LEGAL GROUND, ANY DISCUSSION MADE ON MERITS OF ADDITIONS WOULD BECOME ACADEMIC IN NATURE. SINCE DECISION REND ERED BY THE LEARNED CIT(A) ON THE ABOVE SAID LEGAL ISSUE HAS ATTAINED FINALITY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PASSED BY THE LEARNED CIT(A) IN QUASHING THE ASSESSMENT ORDER . IN VIEW OF THE SAME, WE DO NOT FIND IT NECESSARY TO INTERF ERE WITH THE DECISION RENDERED BY LD CIT(A) ON MERITS, AS THE SAME WOULD BE ACADEMIC IN NATURE. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 13 . 1 2 .201 7. SD/ - SD/ - (PAWAN SINGH ) (B.R.BA SKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 13 / 1 2 / 20 1 7 COPY OF THE ORDER FORWARDED TO : SMT. SANDHYA P. VAKIL 4 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( SENIOR P RIVATE SECRETARY ) PS ITAT, MUMBAI