Tirupati Chowdary, Bhubaneswar V. DCIT, Bhubaneswar

ITSSA 29/CTK/2011

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9602 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 04-10-2013
• Assessment Year: 2000-2001
• Appeal Filed On: 28-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K AJAY KUMAR
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Period of limitation; Right to appeal
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI P.K.BANSAL(ACCOUNTANT MEMBER) AND SHRI D.T.GARASIA (JUDICIAL MEMBER) I.T.(SS)A NOS. 29 TO 35/ CTK/2011 ASSESSMENT YEARS:2000-01 TO 2006-07 S RI TIRUPATI CHOWDARY PLOT NO.A-103, SAHID NAGAR, BHUBANESWAR-751 007 PA NO.ACPPC 7818 M VS DCIT, CIRCLE 2(2), BHUBANESWAR. APPELLANT RESPONDENT I.T.(SS)A NO. 65/ CTK/2011 ASSESSMENT YEAR: 2006-07 DCIT, CIRCLE 2(2), BHUBANESWAR VS SRI TIRUPATI CHOWDARY PLOT NO.A-103, SAHID NAGAR, BHUBANESWAR-751 007 APPELLANT RESPONDENT ASSESSEE BY: NONE REVENUE BY : SHRI K AJAY KUMAR, DR DATE OF HEARING: 04/10/2013 DATE OF PRONOUNCEMENT: 10 /10/2013 O R D E R PER BENCH: ALL THESE APPEALS FILED BY THE ASSESSEE FOR ASSESS MENT YEARS 2000-01 TO 2006-07 ARE DIRECTED AGAINST SEPARATE ORDERS OF LD CIT(A) DATED 30.6.2011, IN THE MATTER OF ASSESSMENT YEAR 153A(B) OF THE INCOME TAX ACT, 1961.THE REVENUE HAS ALSO FILED APPEAL FOR ASSESSMENT YEAR 2006-07. 2. IN ALL THESE APPEALS, MOST OF COMMON GROUNDS HAV E BEEN TAKEN BY THE ASSESSEE. FIRST WE REPRODUCE COMMON EFFECTIVE GRO UNDS TAKEN IN GROUND NOS.1 TO 3 IN ALL THESE APPEALS, WHICH ARE AS UNDER: 2 I.T.A NOS. 29 TO 35/ CTK/2011 ASSESSMENT YEARS:2000-01 TO 2006-07 1. THAT THE LD CIT(A) HAS COMMITTED SERIOUS ERROR IN NOT ACCEPTING THE FACT THAT THE ASSESSMENT ORDER HAS BEEN SERVED ON APPELLANT O N 16.2.2008 I.E. AFTER 46 DAYS FROM THE PERIOD OF LIMITATION FOR WHICH THE AS SESSMENT ORDER IS NULLITY IN THE EYES OF LAW. 2. THAT THE LD CIT(A) HAS ERRED IN LAW AND IN FACT BY NOT CONSIDERING THAT THE AO HAS VIOLATED THE PRINCIPLES OF NATURAL JUSTICE BY C ALLING FOR RETURN OF INCOME U/S.153A OF THE INCOME TAX ACT, 1961. 3. THAT THE LD CIT(A) HAS ERRED IN LAW AND IN FACT BY NOT CONSIDERING THAT THE AO HAS NOT GIVEN REASONABLE OPPORTUNITY TO THE APPELLA NT TO PRODUCE EVIDENCE IN SUPPORT OF RETURN AND HAS VIOLATED THE PRINCIPLES O F NATURAL JUSTICE SO FAR AS THE ISSUANCE OF NOTICE U/S.143(2) OF THE ACT IS CONCERN ED. 3. THE REVENUE IS AGGRIEVED BY THE DECISION OF LD C IT(A) IN DELETING THE ADDITION OF RS.1 CRORE AS UNDISCLOSED INCOME. 3.1 SINCE GROUNDS ARE COMMON, WE PROCEED TO DISPOSE OF THEM BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 4. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL ENGAGED IN THE BUSINESS AND PROFESSION AND IS HAVING INCOME FROM OTHER SOURCES, FOR WHICH, ASSESSEE IS FILING RETURN OF INCOME REGULARL Y. A SEARCH AND SEIZURE ACTION WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF THE AS SESSEE ON 30.9.2005 IN CONSEQUENCE TO WARRANT OF AUTHORIZATION ISSUED BY THE DIRECTOR OF INCOME TAX (INV), BHUBANESWAR. THE ASSESSING OFFICER HAS ISSU ED NOTICE DATED 22.10.2007 UNDER SECTION 153A OF THE INCOME TAX ACT, 1961, AFT ER A LAPSE OF MORE THAN 2 YEARS AFTER THE SEARCH, REQUIRING THE ASSESSEE TO F ILE RETURN OF INCOME WITHIN SEVEN DAYS FROM THE RECEIPT OF THE SAID NOTICE. AO WITHOUT GIVING REASONABLE OPPORTUNITY TO DELIVER THE RETURN OF INCOME HAS THR EATENED VIDE HIS LETTER 20.12.2007 TO FILE PROSECUTION COMPLAINT AGAINST TH E ASSESSEE FOR NON FILING OF 3 I.T.A NOS. 29 TO 35/ CTK/2011 ASSESSMENT YEARS:2000-01 TO 2006-07 RETURN OF INCOME BUT ASSESSEE HAS FILED THE RETURN OF INCOME FOR VARIOUS ASSESSMENT YEARS. AO WITHOUT IGNORING THE SAID DEC LARATION ENCLOSED WITH THE RETURN OF INCOME AND WRITTEN SUBMISSION HAS PASSED A CRYPTIC ASSESSMENT ORDER IN THE RESPECTIVE ASSESSMENT YEARS WITHOUT FOLLOWIN G PRINCIPLES OF NATURAL JUSTICE. IN THE FIRST APPEAL, LD CIT(A) HAS DISMISSED THE AP PEAL OF THE ASSESSEE BY OBSERVING AS UNDER: GROUND NO.1 IS DIRECTED AGAINST ISSUANCE OF NOTICE U/S.153A OF THE ACT. IT IS ADMITTED FACT THAT A SEARCH AND SEIZURE OPERA TION WAS CARRIED OUT IN THE RESIDENTIAL PREMISES OF THE APPELLANT AT PLOIT NO.42, SAHEED NAGAR, BHUBANESWAR ON 30.9.2005. ONCE SEARCH AND SEIZURE OPERATION HAS CARRIED OUT, NOTICE IS REQUIRED TO BE ISSUED U/S.15 3A OF THE ACT WHICH THE AO HAS RIGHTLY DONE. THE APPELLANTS OBJECTION IS THAT NOTICE U/S.153A DT.11.1.2007 AND 13.7.2007 IS PER SE ILLEGAL AS THE APPELLANT IS NOT IN POSSESSION OF ALL THE BOOKS OF ACCOUNT AS ACCORDING TO THE APPELLANT CERTAIN BOOKS OF ACCOUNT WERE ILLEGALLY RETAINED BY THE DEPARTMENT. THIS WILL ALSO NOT INVALIDATED ISSUANCE OF NOTICE U/S.15 3A OF THE ACT. CONSIDERING THE FACTS OF THE CASE AND THE RIVAL SUB MISSION, I AM OF THE OPINION THAT THERE IS NO INFIRMITY IN INVOKING ACTI ON U/S.153A OF THE ACT. ACCORDINGLY, GROUND NO.1 IS DISMISSED. GROUND NO.2 CHALLENGES THE ISSUANCE OF NOTICE U/S. 143(2) ON 24.12.2007 TO PRODUCE EVIDENCE IN SUPPORT OF THE RETURN ON THE SAME DAY AT 11 AM. THIS, THE APPELLANT SUBMITS, IS HUMANLY NOT POSSIBL E. IN THE AOS ORDER THE AO HAS WRITTEN IN RESPONSE TO NOTICE U/S.143(2 ) DT.24.12.2007, SHRI B.D.OJHA, AR APPEARED ON 24.12.2007, FILED WRITTEN SUBMISSION WHICH WAS EXAMINED, BUT COULD NOT PRODUCE THE DETAILS CALLED AND THE CASE WAS ADJOURNED TO 26.12.2007 ON THE REQUEST OF THE LD A. R. THE AR HAS NOT CHALLENGED THE VALIDITY AND LEGALITY OF THE IMPUGNE D NOTICE AND HAS COOPERATED WITH THE ASSESSMENT PROCEEDINGS. THE CA SE WAS ADJOURNED AT THE REQUEST OF LD AR. IN VIEW OF THIS, NO MERIT IS FOUND IN THIS GROUND AND GROUND NO.2 IS ACCORDINGLY DISMISSED. 5. EARLIER, THESE APPEALS WERE FIXED FOR HEARING ON 1.10.2013 AND THE APPEALS WERE ADJOURNED TO 4.10.2013 AT THE REQUEST OF THE ASSESSEES 4 I.T.A NOS. 29 TO 35/ CTK/2011 ASSESSMENT YEARS:2000-01 TO 2006-07 REPRESENTATIVE VIDE LETTER DATED 1.10.2013. HOWEVER , NONE APPEARED ON BEHALF OF ASSESSEE ON THE DATE FIXED FOR HEARING. WE, THEREF ORE, PROCEED TO DECIDE THE APPEALS EXPARTE QUA THE ASSESSEE AFTER HEARING LD D .R. AND ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. 6. WE HAVE GONE THROUGH GROUND NOS.1 TO 3 TAKEN BY THE ASSESSEE, WHEREIN, IN GROUND NO.1, ASSESSEE HAS TAKEN THE CONTENTION T HAT LD CIT(A) HAS NOT ACCEPTED THE FACT THAT THE ASSESSMENT ORDER HAS BEE N SERVED ON THE ASSESSEE AFTER 46 DAYS FROM THE PERIOD OF LIMITATION. THERE FORE, THE ASSESSMENT ORDER IS NULLITY IN EYES OF LAW. THE SECOND GROUND IS THAT AO HAS VIOLATED THE PRINCIPLES OF NATURAL JUSTICE BY CALLING RETURN OF INCOME U/S. 153A OF THE I.T.ACT, 1961 AND THIRD GROUND IS THAT AO HAS NOT GIVEN REASONABLE OP PORTUNITY TO THE ASSESSEE TO PRODUCE ANY EVIDENCE IN SUPPORT OF RETURN AND HAS V IOLATED THE PRINCIPLES OF NATURAL JUSTICE INSOFAR AS THE ISSUANCE OF NOTICE U /S.143(2) IS CONCERNED. WE ALSO FIND THAT LD CIT(A) HAS DISMISSED THESE GROUNDS. W E ALSO FIND FROM THE ORDERS OF THE AO AS WELL AS LD CIT(A) THAT AO HAS NOT GIVEN R EASONABLE OPPORTUNITY OF HEARING BEFORE PASSING THE ORDERS TO THE ASSESSEE. THEREFORE, IN OUR OPINION, AO AND LD CIT(A) HAS PASSED THE ORDERS WITHOUT FOLLOWI NG PRINCIPLES OF NATURAL JUSTICE. IN RESPECT OF NOTICE UNDER SECTION 143(2) , WE FIND THAT NOTICE WAS ISSUED ON THE SAME DATE AT 11 AM AND IT WAS NOT POSSIBLE F OR THE ASSESSEE TO FILE WRITTEN SUBMISSION AND COULD NOT PRODUCE DETAILS AS CALLED FOR AND IN VIEW OF THIS, ASSESSEE WAS NOT ABLE TO COOPERATE WITH THE ASSESSM ENT PROCEEDINGS. 5 I.T.A NOS. 29 TO 35/ CTK/2011 ASSESSMENT YEARS:2000-01 TO 2006-07 7. THE HONBLE ORISSA HIGH COURT IN THE CASE OF RAD HIKA CHARAN BANERJEE V SAMBALPUR MUNICIPALITY, AIR 1979 ORISSA 69, HAS HEL D THAT RIGHT OF APPEAL WHEREVER CONFERRED INCLUDES A RIGHT OF BEING AFFORD ED OPPORTUNITY OF BEING HEARD IRRESPECTIVE OF LANGUAGE CONFERRING SUCH RIGHT THAT IS A PART AND PARCEL OF PRINCIPLES OF NATURAL JUSTICE. WHERE AN AUTHORITY IS REQUIRED TO ACT IN A QUASI- JUDICIAL CAPACITY, IT IS IMPERATIVE TO GIVE APPELLA NT AN ADEQUATE OPPORTUNITY OF BEING HEARD BEFORE DECIDING THE APPEAL. THE AIM OF THE RULE OF NATURAL JUSTICE IS TO PREVENT MISCARRIAGE OF JUSTICE AND DENIAL OF PRI NCIPLES OF AUDI ALTERAM PARTEM RESULTS INTO SUCH MISCARRIAGE OF JUSTICE. THEREFO RE, THE LEARNED CIT(A) SHOULD HAVE AFFORDED REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREFORE, IN ORDER TO IMPART SUBSTANTIAL JUSTICE TO THE ASSES SEE, WE REVERSE THE ORDERS OF LD CIT(A) AND RESTORE THE APPEALS TO THE FILE OF THE AO TO DECIDE GROUND NOS.1 TO 3 AFRESH AFTER GIVING REASONABLE OPPORTUNITY TO TH E ASSESSEE. 8. AS WE HAVE RESTORED GROUND NOS.1 TO 3, TO THE FI LE OF THE AO FOR DECIDING THE SAME AFRESH, WE NEED NOT ADJUDICATE OTHER GROUN DS TAKEN BY THE ASSESSEE IN DIFFERENT ASSESSMENT YEARS UNDER CONSIDERATION AND THEY ARE ALSO RESTORED TO THE FILE OF THE AO FOR DECIDING AFRESH. AO IS DIRECTED TO FRAME DENOVO ASSESSMENT AS PER LAW. 9. SINCE, WE HAVE RESTORED THE FILE OF THE ASSESSME NT YEAR FOR 2006-07 IN ASSESSEES APPEAL, THE APPEAL OF THE REVENUE IS ALS O RESTORED TO THE FILE OF AO FOR DENOVO ASSESSMENT AS PER LAW. 6 I.T.A NOS. 29 TO 35/ CTK/2011 ASSESSMENT YEARS:2000-01 TO 2006-07 10. IN THE RESULT, APPEALS FILED BY ASSESSEE FOR A. Y. 2001-01 TO 2006-07 AND APPEAL OF REVENUE FOR A.Y. 2006-07 ARE ALLOWED FOR STATISTICAL PURPOSES PRONOUNCED IN THE OPEN COURT ON 10 TH OCTOBER, 2013 SD/- (P.K.BANSAL) (ACCOUNTANT MEMBER) SD/- (D.T.GARASIA) (JUDICIAL MEMBER) CUTTACK: DATED 10 /10/2013 PARIDA COPY TO: 1. THE APPELLANT: TIRUPATI CHOWDARY, PLOT NO.A-10 3, SAHID NAGAR, BHUBANESWAR-751 007 2. THE RESPONDENT: DCIT, CIRCLE 2(2), BHUBANESWAR. 3. COMMISSIONER OF INCOME TAX (APPEAL)-II, BHUBANE SWAR 4. COMMISSIONER OF INCOME TAX, BHUBANESWAR. 5. DEPARTMENTAL REPRESENTATIVE, ITAT, CUTTACK //TRUE COPY// BY ORDER SR. PS, ITAT, CUTTACK