Devi Prasad Kakrania, Kolkata V. DCIT, Cir-11, Kolkata, Kolkata

ITSSA 28/KOL/2014

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1762 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 02-02-2016
• Assessment Year: misc
• Appeal Filed On: 11-02-2014
• Court: TRIBUNAL
• Department Lawyers: NONGOTHUNG JUNGIO
• Keywords: Document seized; Charitable institution; Period of limitation; Reasonable cause; Assessment record; Block assessment; Time period of passing order; Condonation of delay; Documents seized
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M. BALAGANES H, AM] I.T(SS).A NO. 28/KOL/2014 BLOCK PERIOD: 01.04.1996 TO 17.12.2002 DEVI PRASAD KAKRANIA VS. COMMISSIONER OF INCOME TAX, (PAN: AFZPK1063R) CENTRAL-11, KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 03.02.2016 DATE OF PRONOUNCEMENT: 19.02.2016 FOR THE APPELLANT: SHRI SUBASH AGARWAL, ADVOCATE FOR THE RESPONDENT: SHRI NONGOTHUNG JUNGIO, JCIT ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), CENTRAL-II, KOLKATA IN APPEAL NO. 318/CC-XXVII/CIT(A)C-II/06-07 DATED 31.0 5.2012. ASSESSMENT WAS FRAMED BY ACIT, CENTRAL CIRCLE-XXVII, KOLKATA U/S. 158BD OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR BLO CK PERIOD 01.04.1996 TO 17.12.2002 VIDE ITS ORDER DATED 29.12.2006. 2. AT THE OUTSET, IT IS SEEN THAT THE APPEAL BY AS SESSEE IS BARRED BY LIMITATION BY 543 DAYS AND ASSESSEE HAS FILED CONDONATION PETITION SU PPORTED BY AFFIDAVIT STATING THE FOLLOWING REASONS: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAD PASSED AN ORDER DATED 31.05.2012 WHICH WAS SERVED ON 18 TH JUNE 2012 TO THE ADVOCATE SRI P.K.TEKRIWAL. THE APPEAL WAS SUPPOSED TO BE FILED BY 18TH AUGUST 2012 . 2. ADVOCATE SRI P.K.TEKRIWAL IN TURN HANDED OVER TH E ORDER TO THE ACCOUNTANT SRI VIKASH SHARMA OF SRI DEVI PRASAD KAKARANIA WITH THE INSTRU CTION FOR FILING THE APPEAL BEFORE HONBLE TRIBUNAL AND PREPARATION THEREOF. 3. THE SAID ACCOUNTANT SRI VIKASH SHARMA LEFT THE S ERVICE WITH EFFECT FROM 30 TH JUNE 2012. BUT HE DID NOT CONVEYED THE MATTER TO SRI DEVI PRAS AD KAKRANIA. AND IN ABSENCE OF SUCH COMMUNICATION SO AS TO THE APPEAL IS TO BE FILED, T HE PRESENT APPEAL COULD NOT BE PRESENTED BEFORE YOUR KIND PERUSAL. 4. THIS MATTER CAME TO THE KNOWLEDGE OF MYSELF ONLY WHEN I RECEIVED A CALL FROM THE LEARNED INCOME TAX OFFICER ON 28 TH JANUARY 2014. 5. DUE TO THE DEFAULT AND NEGLIGENCE OF THE EMPLOYE E THE APPELLANT COULD NOT PREFER THIS APPEAL BEFORE YOUR CONSIDERATION. FOR THIS REASON A HUGE AMOUNT HAS ARISEN TO BE PAID AS INCOME TAX WHICH HAS CAUSED MYSELF IN A GREAT FINAN CIAL JEOPARDY. LD. COUNSEL FOR THE ASSESSEE STATED THAT SHRI VIKAS H SHARMA, WHO WAS EMPLOYEE OF THE ASSESSEE LEFT SERVICE AND NO COMMUNICATION SO AS TO FILE THE APPEAL WAS MADE WITH THE ASSESSEE BY THE EMPLOYEE AND NOW HE IS HOSTILE AND NOT COOPERATING. IN TERM OF THE ABOVE, LD. COUNSEL FOR THE ASSESSEE STATED THAT IT IS BEYOND THE CONTROL OF THE ASSESSEE TO 2 IT(SS)A NO. 28/KOL/2014 DEVI PRASAD KAKRANIA, BP 01.04.1996 TO 17.12.2002 FILE THIS APPEAL WITHIN LIMITATION PERIOD AND HENCE , THERE IS A REASONABLE CAUSE THAT DUE TO FAULT OF THE EMPLOYEE THE ASSESSEE SHOULD NOT BE PU NISHED. WE FIND THAT THE ORDER PASSED BY CIT(A) DATED 31.05.2012 WAS SERVED ON ASSESSEE O N 18.06.2012 AND APPEAL WAS TO BE FILED LATEST BY 18.08.2012 BUT APPEAL WAS FILED BEL ATEDLY ON 11.02.2014 THAT MEANS THERE IS A DELAY OF 543 DAYS. AS THE REASON FOR DELAY WA S EXPLAINED BY ASSESSEES COUNSEL THAT HIS ACCOUNTANT SHRI VIKASH SHARMA WHO WAS ENTRUSTED WITH THE TASK OF FILING OF APPEAL AND THE CIT(A)S ORDER WAS HANDED OVER TO HIM BY SH RI P. K. TEKRIWAL ALONG WITH APPEAL PAPERS WITH INSTRUCTIONS TO HIM TO FILE THE APPEAL BEFORE TRIBUNAL BUT SRI VIKASH SHARMA LEFT SERVICE W.E.F. 30.06.2012 AND HE HAS NOT CONVE YED THE MATTER TO THE ASSESSEE AND IN THE ABSENCE OF COMMUNICATION THE APPEAL COULD NOT B E PRESENTED WITHIN THE DUE TIME AND THE MATTER GOT DELAYED. ACCORDING TO LD. COUNSEL, A SSESSEE IS NOT GAINING ANYTHING BY DELAYED FILING OF THIS APPEAL RATHER HE IS BEING PU NISHED. LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE DECISION OF COORDINATE BENCH OF THI S TRIBUNAL IN THE CASE OF JCIT VS. TRACTORS & FARM & EQUIPMENTS LTD. (2007) 104 ITD 14 9 (CHENNAI TM). LD. COUNSEL FOR THE ASSESSEE ALSO RELIED ON THE DECISION OF HON BLE MADRAS HIGH COURT IN THE CASE OF SREENIVAS CHARITABLE TRUST VS. DCIT (2006) 280 ITR 357 (MAD) WHEREIN IT IS HELD AS UNDER: NO HARD AND FAST RULE CAN BE LAID DOWN IN THE MAT TER OF CONDONATION OF DELAY AND COURTS SHOULD ADOPT A PRAGMATIC APPROACH AND SHOULD EXERCISE THEIR DISCRETION ON THE FACTS OF EACH CASE KEEPING IN MIND THAT IN CONSTRUI NG THE EXPRESSION SUFFICIENT CAUSE THE PRINCIPLE OF ADVANCING SUBSTANTIAL JUSTICE IS OF PR IME IMPORTANCE AND THE EXPRESSION SUFFICIENT CAUSE SHOULD RECEIVE A LIBERAL CONSTRU CTION. 3. GOING BY THE FACTS OF THE PRESENT CASE, PROPOSIT ION OF LAW EXPLAINED IN VARIOUS PRECEDENTS, WE ARE OF THE VIEW THAT THE CAUSE OF DE LAY WAS REASONABLE AND ACCORDINGLY, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 4. THE FIRST ISSUE RAISED BY LD. COUNSEL FOR THE AS SESSEE IS AS REGARDS TO THE ORDER OF CIT(A) CONFIRMING THE BLOCK ASSESSMENT FRAMED BY TH E AO U/S. 158BD OF THE ACT WITHOUT ANY SATISFACTION RECORDED BY THE AO OF THE SEARCHED PARTY. 5. BRIEFLY STATED FACTS ARE THAT A SEARCH AND SEIZU RE OPERATION U/S. 132 OF THE ACT WAS CONDUCTED AT THE RESIDENCE AND BUSINESS PREMISES OF ONE SHRI PRAKASH KUMAR KOTHARI ON 17/18.12.2002 FROM WHERE CERTAIN DIARIES AND LOOSE SHEETS WERE FOUND AND SEIZED. THE AO OF THE ASSESSEE ALLEGED THAT SOME PAGES OF SEIZE D DOCUMENTS MARKED AS PKK-6, PKK-7, PKK-11 AND PKK-12 IN THE NAME OF ONE DEVI PR ASAD KAKRANIA AND HE WAS APPEARING AND ACCORDING TO HIM, THESE TRANSACTIONS THROUGH RUKKAS APPEARING IN THE 3 IT(SS)A NO. 28/KOL/2014 DEVI PRASAD KAKRANIA, BP 01.04.1996 TO 17.12.2002 SEIZED DOCUMENTS EVEN FROM THE POSSESSION OF SHRI K OTHARI WAS DONE BY THE ASSESSEE AND ACCORDINGLY, AO ISSUED NOTICE U/S. 158BD OF THE ACT ON 16.12.2004 AFTER A GAP OF TWO YEARS FROM THE DATE OF SEARCH. THE ASSESSEE FILED APPLICATION ALONG WITH RETURN IN RESPONSE TO THE NOTICE ON 06.01.2005 DECLARING UNDI SCLOSED INCOME AT NIL. LD. COUNSEL FOR THE ASSESSEE NOW BEFORE US RAISED A NEW ISSUE Q UA NON RECORDING OF SATISFACTION IN THE FILE OF SEARCHED PARTY WHERE ASSESSMENT U/S. 158BC WAS FRAMED. ON THIS, THE BENCH REQUIRED THE BLOCK ASSESSMENT RECORDS OF THE SEARCH PARTY BUT LD. COUNSEL FOR THE ASSESSEE STATED THAT HE HAS ALREADY OBTAINED INFORMATION UND ER RTI WHEREIN THE AO OF SEARCHED PARTY HAS CLEARLY STATED THAT NO ASSESSMENT RECORDS ARE AVAILABLE. THE RELEVANT RTI REPLY GIVEN BY ACIT, CIRCLE-43, KOLKATA VIDE ACIT, CIRCLE -43-MISC/2014-15/459 DATED 13.02.2015 READS AS UNDER: SUB: INFORMATION SOUGHT UNDER THE RIGHT TO INFORMA TION ACT, 2005 BY SRI DEVI PRASAD KAKRANIA, IN RESPECT OF SRI DEVI PRASAD KAKR ANIA. SRI PRAKASH KUMAR KOTHARI (AFZPK1063R) (AFJPK5488G) OF C/O JIWAN DASS GRAND SONS 156, MAHATMA GANDHI ROAD, KOLKATA - 700 007 - MATTER REG ARDING. REF:YOUR LETTER-NO. JCIT/R-6/NODAL/RTI/2014-15/168 DATED 29/01/2015. KINDLY REFER TO THE ABOVE. FROM THE RTI APPLICATION RECEIVED BY THIS OFFICE IT IS SEEN THAT THE APPLICANT HAS REQUIRED TWO INFORMATION 1. CERTIFIED COPIES OF STATEMENT RE CORDED OF SRI DEVI PRASAD KAKRANIA (AFZPK1063R) AND 2. SRI PRAKASH KUMAR KOTHARI (AFJP K5488G). JURISDICTION OF SRI DEVI PRASAD KAKRANIA IS LYING WITH THIS OFFICE AND THE SAID INFORMATION HAS SENT TO THE PETITIONER. JURISDICTION OF SHRI PRAKASH KUMAR KOTH ARI (AFJPK5488G) IS LYING WITH THE ITO WD-49(2), KOLKATA. ACCORDINGLY THE COPY OF RTI WAS SENT TO THE CONCERNED ITO ON 12/02/2015 VIDE LETTER NO.ACIT/CIRCLE-43/KOL/RTI/20 14-15/446 DATED 12.02.2015 BUT THE ITO WD-49(2), KOLKATA HAS RETURNED THE RTI APPLICAT ION TO THIS OFFICE STATING THAT THOUGH PAN LIES WITH ITO WD-49{2}, KOLKATA BUT THERE IS NO ASSESSMENT RECORDS. THIS OFFICE HAS NO OTHER ALTERNATIVE BUT TO SEND THE RTI APPLICATIO N TO THE JURISDICTION BECAUSE NEITHER THIS OFFICE HAS ANY PAN JURISDICTION OF THIS ASSESSEE SR I PRAKASH KUMAR KOTHARI (AFZPK1063R), NOR ANY ASSESSMENT RECORD RECEIVED FR OM ERSTWHILE CIRCLE-42, KOLKATA. THIS IS FOR YOUR KIND INFORMATION AND NECESSARY ACT ION. 6. LD. COUNSEL FOR THE ASSESSEE, IN VIEW OF THE ABO VE, STATED THAT THERE IS NO RECORDS AVAILABLE AND NO SATISFACTION IS RECORDED BY THE AO OF THE SEARCHED PARTY IN REGARD TO ASSESSEE AND HE REFERRED TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESWARI VS. ACIT (2007) 289 ITR 341 (SC). ON TH E OTHER HAND, THE LD. CIT, DR ALSO CONCEDED THE POSITION THAT HE IS UNABLE TO BRI NG ASSESSMENT RECORDS DESPITE NUMEROUS OPPORTUNITIES GIVEN TO HIM ON VARIOUS DATE S. IN SUCH CIRCUMSTANCES, WE CAN EASILY PRESUME THAT NO SATISFACTION IS RECORDED BY THE AO OF THE SEARCHED PARTY I.E. PRAKASH KUMAR KOTHARI WHERE MAIN SEARCH WAS CONDUCT ED U/S. 132 OF THE ACT AND THE ALLEGED DOCUMENT PERTAINING TO ASSESSEE WAS FOUND F ROM HIM AND LYING IN THE ASSESSMENT 4 IT(SS)A NO. 28/KOL/2014 DEVI PRASAD KAKRANIA, BP 01.04.1996 TO 17.12.2002 RECORDS OF PRAKASH KR. KOTHARI. ONCE THIS IS THE P OSITION, WE HAVE TO GO THROUGH THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MA NISH MAHESWARI, SUPRA, WHEREIN THE RATIO LAID DOWN READS AS UNDER: THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISI ONS OF SECTION 158BD ARE REQUIRED TO BE SATISFIED BEFORE THE PROVISIONS OF CHAPTER XIV B AR E APPLIED IN RELATION TO ANY PERSON, OTHER THAN THE PERSON WHOSE PREMISES HAD BEEN SEARC HED UNDER SECTION 132 OR WHOSE PREMISES HAD BEEN SEARCHED UNDER SECTION 132 OR WHO SE DOCUMENTS AND OTHER ASSETS HAD BEEN REQUISITIONED U/S 132A. LEARNED ASSESSING OFFI CER HAS TO APPLY HIS MIND TO MEET THE VERY ESSENTIAL INGREDIENT AS TO RECORD HIS SATISFAC TION AS TO THE APPELLANT HAD UNDISCLOSED INCOME IN THE NOTICE ITSELF AND COMMUNICATE THE SAM E IN WRITING TO THE APPELLANT. THE RECORDING SO AS TO THE SATISFACTION AS TO THE A PPELLANT HAD UNDISCLOSED INCOME WAS NEVER BEEN COMMUNICATED TO THE APPELLANT EITHER IN THE NOSTAGETICE U/S 1588C AND THEREAFTER IN THE PROCEEDINGS U/S 158BD . THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS) H AS ERRED IN GIVING HIS DECISION ON THE POINT THAT THE RECORDING AS TO THE SATISFACTION WAS MADE ON 16.12.2004 IN THE ASSESSMENT RECORDS ONLY BUT THE COMMUNICATION OF IT WAS NEVER MADE IN WRITING TO THE APPELLANT. AS SUCH THE NOTICE U/S 158BC SUFFERED A DEFECT OF NOT RECORDING THE REASON OF SATISFACTION AS TO THE SATISFACTION AS TO THE APPEL LANT HAD UNDISCLOSED INCOME AND AS SUCH IT WAS BAD IN LAW AND NOTICE U/S 158BD IS VOID AB INIT IO. IN VIEW OF THE GIVEN FACTS AND CIRCUMSTANCES AND TH E DECISION OF HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESWARI, SUPRA, WE ARE OF T HE VIEW THAT NO SATISFACTION IS RECORDED IN THE CASE OF SEARCHED ASSESSEE FOR FRAMI NG BLOCK ASSESSMENT U/S. 158BD OF THE ACT IN THE CASE OF THE ASSESSEE. HENCE, BLOCK ASSE SSMENT FRAMED U/S. 158BD OF THE ACT IS QUASHED. APPEAL OF ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . 8. ORDER IS PRONOUNCED IN THE OPEN COURT ON 19.02.2 014 SD/- SD/- (M. BALAGANESH) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19 TH FEBRUARY, 2016 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHRI DEVI PRASAD KAKRANIA, C/O, JEEWNA DASS & GRAND SONS, 156, MAHATMA GANDHI ROAD, KOLKATA-700 007. 2 RESPONDENT CIT, CENTRAL-11, KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. A CIT KOLKATA D R, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .