HOOR C. JHURANI, MUMBAI V. DCIT 14(1),

ITSSA 27/MUM/2012

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 2897 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 07-06-2016
• Assessment Year: misc
• Appeal Filed On: 16-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C NAIK
• Keywords: Rectification of order; Block assessment
• Section: 143(3); 69; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH K, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER IT(SS)A NO.27/MUM/2012 ( BLOCK ASSESSMENT PERIOD 01/04/1988 TO 20/08/1998 ) HOOR C. JHURANI, 38B SHIV C.H.S. KOPRI COLONY, THANE (E) -400 603 PAN:AEHPJ0666E ...... APPELLANT VS. THE DCIT -14(1), MUMBAI .... RESPO NDENT APPELLANT BY : SHRI DHARMESH SHA H RESPONDENT BY : SHRI B.C.NAIK DATE OF HEARING : 13/01/2017 DATE OF PRONOUNCEMENT : 18/0 1/2017 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERT AINING TO BLOCK ASSESSMENT 01/04/1988 TO 20/08/1998 IS DIRECTED AGA INST AN ORDER PASSED BY CIT(A)-28, MUMBAI ARISING OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 158BC AND 254 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 29/12/2008. 2. ALTHOUGH IN THE MEMO OF APPEAL ASSESSEE HAS RAI SED VARIOUS GROUNDS OF APPEAL, BUT THE PERTINENT POINT RAISED BEFORE US, A T THE TIME OF HEARING 2 IT(SS)A NO.27/MUM/2012 REVOLVES AROUND ADDITIONAL GROUND OF APPEAL NO.1 RA ISED BY THE ASSESSEE, WHICH READS AS UNDER:- 1.THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN LAW AND IN FACTS IN NOT APPRECIATING THAT THE ASSESSMENT ORDER PASSED BY TH E ASSESSING OFFICER DATED 29.12.2008 WAS VOID AB INITIO AND INVALID. 3. IN ORDER TO APPRECIATE THE CONTOURS OF THE DIS PUTE IN THE AFORESAID GROUND, THE FOLLOWING FACTS ARE RELEVANT. THE APPE LLANT, BEFORE US IS AN INDIVIDUAL IN WHOSE CASE, A SEARCH ACTION UNDER SEC TION 132(1) OF THE ACT WAS CARRIED OUT BY THE DEPARTMENT ON 20/08/1998 ALONGWI TH SIMILAR ACTION CARRIED OUT IN GROUP OF CASES KNOWN AS MOTA GROUP. AS A CONSEQUENCE OF SUCH AN ACTION, AN ASSESSMENT WAS FINALIZED UNDER SECTION 1 58BC R.W.S. 143(3) OF THE ACT FOR THE BLOCK PERIOD 01/04/1988 TO 20/08/1998 ON 31/08/2000, WHEREIN SUBSTANTIAL ADDITIONS WERE MADE ON ACCOUNT OF UND ISCLOSED INCOME. NOTABLY, OUT OF THE TOTAL INCOME ASSESSED IN THE HANDS OF TH E ASSESSEE AT RS.5,31,57,930/- AN AMOUNT OF RS.3,49,02,022/- WAS MADE ON PROTECTIVE BASIS AS THE CORRESPONDING SUBSTANTIVE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEES BROTHER SHRI NIRMAL C. JHURANI, UNDER S ECTION 69 OF THE ACT. ON 25/11/2003, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE, AGAINST ASSESSMENT ORDER DATED 31/8/2000 DUE TO NON-ATTENDA NCE. ON 30/03/2004, CIT(A) RECTIFIED HIS EARLIER ORDER DATED 25/11/200 3 UNDER SECTION 154 OF THE ACT AND DELETED PART OF THE ADDITION ASSESSED ON PROTECTIVE BASIS. ON 29/09/2005, THE TRIBUNAL SET-ASIDE THE ORDER OF TH E CIT(A) DATED 25/11/2003 AND RESTORED THE ASSESSMENT TO THE FILE OF THE ASSE SSING OFFICER. ON 29/03/2007, THE ASSESSING OFFICER CONSEQUENTLY PASS ED A FRESH ASSESSMENT ORDER UNDER SECTION 158BC R.W.S. 254 OF THE ACT. O N 29/10/2007, THE TRIBUNAL DEALT WITH THE APPEAL AGAINST THE RECTIFICATION ORD ER PASSED BY THE CIT(A) ON 3 IT(SS)A NO.27/MUM/2012 30/3/2004 AND SET-ASIDE THE ASSESSMENT TO THE FILE OF ASSESSING OFFICER FOR MAKING A FRESH ASSESSMENT. ON 29/12/2008, THE AO P ASSED AN ORDER UNDER SECTION143(3) R.W.S. 158BC AND 254 OF THE ACT GIVIN G EFFECT TO THE ORDER OF THE TRIBUNAL DATED 29/10/2007. MEANWHILE, ON 17/02/200 9, THE ORDER PASSED BY THE ASSESSING OFFICER ON 29/03/2007 UNDER SECTION 1 58BC R.W.S. 254 OF THE ACT, AS A CONSEQUENCE OF THE ORDER OF THE TRIBUNAL DATED 29/09/2005, WAS CARRIED IN APPEAL BEFORE THE CIT(A), WHO QUASHED IT AS NULL AND VOID. IT HAS BEEN ASSERTED BY THE LD. REPRESENTATIVE FOR THE ASS ESSEE THAT THIS ORDER OF THE CIT(A) DATED 17/02/2009 HAS NOT BEEN CARRIED IN APP EAL BY THE DEPARTMENT BEFORE THE TRIBUNAL. NOW, THE CIT(A) HAS PASSED T HE IMPUGNED ORDER DISMISSING THE APPEAL OF THE ASSESSEE PREFERRED AGA INST THE ORDER OF THE ASSESSING OFFICER DATED 29/12/2008, WHICH WAS PASSE D GIVING EFFECT TO THE ORDER OF THE TRIBUNAL DATED 29/10/2007, WHICH HAD O STENSIBLY AS A CONSEQUENCE OF THE RECTIFICATION ORDER PASSED BY T HE CIT(A) ON 30/3/2004. 4. IN THIS BACK-GROUND, THE PERTINENT POINT RAISED BY THE ASSESSEE IS THAT THE PRESENT PROCEEDINGS HAVE ITS GENESIS FROM THE ORDER OF THE CIT(A) PASSED UNDER SECTION 154 OF THE ACT DATED 30/03/2004, WHER EBY HE HAS RECTIFIED HIS ORIGINAL ORDER PASSED ON 25/11/2003. IT IS CONTEND ED THAT THE PROCEEDINGS FROM THE ORIGINAL ORDER OF THE CIT(A) DATED 25/11 /2003 HAVE SINCE BECOME FINAL IN VIEW OF THE ORDER OF THE CIT(A) DATED 17/1 2/2009, WHEREBY THE ASSESSMENT ORDER DATED 29/03/2007( PASSED BY THE AS SESSING OFFICER IN TERMS OF THE DIRECTION OF THE TRIBUNAL DATED 29/09/2005, WHICH AROSE FROM THE ORDER OF THE CIT(A) DATED 25/11/2003) HAS BECOME FINAL BE CAUSE THE DEPARTMENT HAS NOT PREFERRED ANY APPEAL AGAINST THE ORDER OF THE CIT(A) DATED 17/02/2009. IT WAS, THEREFORE, CONTENDED THAT THE ASSESSMENT ORDER DATED 29/12/2008, WHICH IS CONSEQUENT TO ORDER PASSED BY THE CIT(A) UNDER 4 IT(SS)A NO.27/MUM/2012 SECTION 154 OF THE ACT DATED 30/03/2004, WOULD NOT SURVIVE. THE LD. REPRESENTATIVE FOR THE ASSESSEE EXPLAINED THAT SINC E THE ORIGINAL ASSESSMENT ORDER PASSED UNDER SECTION 158BC HAS COME TO BE NUL L AND VOID IN VIEW OF THE ORDER OF THE CIT(A) DATED 17/02/2009, THE INSTANT P ROCEEDINGS, WHICH ARE FOUNDED ON A RECTIFICATION ORDER CARRIED OUT UNDER SECTION 154 OF THE ACT WOULD NOT SURVIVE, AS SUCH PROCEEDINGS ARE NOT IND EPENDENT PROCEEDINGS. 5. IN THE COURSE OF HEARING, RELIANCE HAS BEEN PLAC ED ON THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE CIT V. D CM FINANCIAL SERVICES LTD., 8 TAXMANN.COM 254 (DEL) AND ALSO THE DECISION OF THE KOLKATA TRIBUNAL IN THE CASE OF SURANA MERCANTILE PVT. LTD. VS. ACIT, IN ITA NO..189/KOL/2013 DATED 11/09/2015. THE LD. DEPARTMENTAL REPRESENTATIVE H AS NOT CONTESTED THE FACTUAL MATRIX BROUGHT OUT BY THE APPELLANT AND POI NTED OUT THAT THE SAID ADDITIONAL GROUND HAS NOT BEEN RAISED IN THE TIME O F FILING OF THE APPEAL. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IN SO FAR AS, THE ADMISSIBILITY OF THE ADDITIONAL GROUND OF APPEAL IS CONCERNED, IN OUR VIEW, THE SAME INVOLVES A POINT OF APPLICATION OF APPROPRIATE LEGAL POSITION AND THE RELEVANT FACTS ARE EMERGING FROM THE RECORD. THERE FORE, IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION V. CIT,229 ITR 383(SC), THE SAID GROUND DESERVES TO BE ADMITTED FOR ADJUDICATION. THE AFORESAID WAS ALSO PUT ACROSS TO THE PARTIES AT THE TIME OF HEARING AND THE RIVAL COUNSELS HAVE MA DE THEIR RESPECTIVE SUBMISSIONS, WHICH HAVE BEEN CONSIDERED BY US. 6.1 THE FACTUAL MATRIX, WHICH HAS BEEN COPIOUSLY NO TED BY US IN THE EARLIER PARAS SHOWS THAT THE DISPUTE BETWEEN ASSESSEE AND T HE REVENUE STARTED WITH THE BLOCK ASSESSMENT ORDER PASSED UNDER SECTION 158 BC R.W.S. 143(3) OF THE 5 IT(SS)A NO.27/MUM/2012 ACT DATED 31/08/2000. THE SAID ASSESSMENT ORDER TR AVELLED THROUGH THE CIT(A) (VIDE ORDER DATED 28/11/2003) AND UPTO THE TRIBUNAL (VIDE ORDER DATED 29/9/2005), WHEREBY THE ASSESSMENT WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER, WHO AGAIN GIVING EFFECT TO THE ORDER OF TH E TRIBUNAL, PASSED A FRESH ASSESSMENT ORDER DATED 29/03/2007. THIS ORDER OF T HE ASSESSING OFFICER HAS BEEN QUASHED AS NULL AND VOID BY THE CIT(A) VIDE OR DER DATED 17/02/2009 AND SUCH ORDER OF THE CIT(A) HAS SINCE BECOME FINAL AS NO APPEAL AGAINST IT HAS BEEN FILED BY THE REVENUE. THIS ASPECT OF REVENUE NO T HAVING FILED AN APPEAL AGAINST THE ORDER OF THE CIT(A) DATED 17/2/2009 WAS SPECIFICALLY PUT TO THE PARTIES AND THE STATEMENT OF LD. REPRESENTATIVE FOR THE ASSESSEE AT BAR HAS NOT BEEN CONTROVERTED BY THE DEPARTMENT. THIS SHOWS T HAT THE PROCEEDINGS INITIATED BY THE ASSESSMENT ORDER DATED 31/8/2007 H AVE BECOME FINAL AS A RESULT OF THE ORDER OF CIT(A) DATED 17/2/2009. 6.2 THE PRESENT PROCEEDINGS BEFORE US ARISE OUT OF THE ORDER OF THE CIT(A) UNDER SECTION 154 OF THE ACT DATED 30/3/2004 RECTIF YING HIS EARLIER ORDER DATED 25/11/2003. THUS, THE ORIGINAL PROCEEDINGS, WHIC H ENTAILED THE ORDER OF THE CIT(A) DATED 25/11/2003 ALSO, HAVE SINCE ATTAINED FINALITY BY THE ORDER OF THE CIT(A) DATED 17/2/2009, THE PRESENT PROCEEDINGS, TH EREFORE, DO NOT SURVIVE INDEPENDENTLY, AS THE SAME ARE AS A RESULT OF RECTI FICATION OF THE ORDER OF CIT(A) DATED 25/11/2003. OBVIOUSLY, ONCE THE ORIGINAL PRO CEEDINGS DO NOT REMAIN RELEVANT IN THE EYES OF LAW, ANY RECTIFICATION OF S UCH PROCEEDING OR ANY PROCEEDING SUBSEQUENT TO SUCH RECTIFICATION ARE BAD IN LAW AND DO NOT SURVIVE. THEREFORE, IN THIS VIEW OF THE MATTER WE FIND ENOUG H FORCE IN THE GROUND RAISED BY THE ASSESSEE TO SAY THAT THE ORDER PASSED BY THE ASSESSING OFFICER DATED 29/12/2008 IS VOID-AB-INITIO AND INVALID. WE HOLD SO. AS A CONSEQUENCE, APPEAL OF THE ASSESSEE IS ALLOWED AS ABOVE. 6 IT(SS)A NO.27/MUM/2012 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 18/01/2017 SD/- SD/- ( AMARJIT SINGH) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 18/01/2017 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI