Sanjay Sales Corporation, Bhavnagar V. The ACIT.,Cent.Circle-2(1), Ahmedabad

ITSSA 32/AHD/2013

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5043 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 10-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ORS MS
• Assessee Lawyers: URVASHI SHODHAN ARS; S N SOPARKAR
• Keywords: Document seized; Documents seized; Set aside
• Section: 143(3); 153A

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER () ./ I.T(SS).A. NOS. 32 & 33/AHD/2013 & 494/AHD/2012 ( ASSESSMENT YEARS : 2004-05, 2005-06 & 2006-07) M/S. SANJAY SALES CORPORATION 1563/A, ASHIRWAD, OPP: PANNA TOWER, RUPANI SARDARNAGAR ROAD, BHAVNAGAR / VS. ACIT CENTRAL CIRCLE-2(1), 3 RD FLOOR, AAYKAR BHAVAN, ASHRAM ROAD, AHMEDABAD ./ ./ PAN/GIR NO. : AARFS6360C ( APPELLANT ) .. ( / RESPONDENT ) & () ./ I.T(SS).A. NO. 505/AHD/2012 ( ASSESSMENT YEAR : 2006-07) ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-2(1), 3 RD FLOOR, ROOM NO.306, ANNEXIE TO AAYAKAR BHAVAN, ASHRAM ROAD, AHMEDABAD / VS. M/S. SANJAY SALES CORPORATION 1563/A-ASHIRWAD, OPP: PANNA TOWER, RUPANI SARDARNAGAR ROAD, BHAVNAGAR-364001 ( APPELLANT ) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI S. N. SOPARKAR & SMT. URVASHI SHODHAN, A.RS. / REVENUE BY : SHRI ALOK SINGH, CIT.D.R. IT(SS)A NOS. 32/AHD/13 & 3 ORS. [M/S. SANJAY SALES CORPORATION] -2 - !' DATE OF HEARING 27/08/2019 #$%& !' / DATE OF PRONOUNCEMENT 14/10/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEALS AND CROSS APPEAL DIRECTED AT THE INSTANCE OF ASSESSEE & REVENUE ARISE FROM THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) (CIT(A)) AGAINST RESPECTI VE ASSESSMENT ORDERS FOR DIFFERENT ASSESSMENT YEARS AS TABULATED BELOW: IT(SS)A NOS. NAME OF ASSESSEE AY CIT(A)S ORDER DATED AOS ORDER DATED AOS ORDER UNDER SECTION 32/AHD/13 SANJAY SALES CORPORATION 2004-05 09.11.12 30.12.11 153C/153A R.W.S. 143(3) OF THE ACT 33/AHD/13 -DO- 2005-06 -DO- -DO- -DO- 494/AHD/12 & 505/AHD/12 SANJAY SALES CORPORATION 2006-07 31.07.12 30.12.11 -DO- 2. THE GRIEVANCES RAISED BEING COMMON, ALL THE CASE S WERE HEARD TOGETHER AND DISPOSED OF BY THE COMMON ORDER. 3. AS TABULATED ABOVE, THE CAPTIONED APPEALS HAVE B EEN FILED BY THE ASSESSEE CONCERNING AY 2004-05, 2005-06 & 2006-07 A GAINST RESPECTIVE ORDERS OF THE CIT(A). THE REVENUE HAS ALSO FILED C ROSS APPEAL IN AY 2006- 07 SEEKING TO CHALLENGE CERTAIN ACTION OF THE CIT(A ) ON MERITS. WE HOWEVER ALSO NOTICE THAT THE ASSESSEE HAS RAISED A COMMON GROUND IN ALL THE THREE YEARS WHEREBY THE ASSESSEE HAS CHALLENGED THE JURISDICTION USURPED BY THE AO UNDER S.153C R.W.S. 153A OF THE ACT TOWARDS ADDITIONS/DISALLOWANCES MADE. IN VIEW OF THE PRELI MINARY OBJECTION OF THE ASSESSEE WHICH SEEKS TO PUT QUESTION MARK OVER THE LEGITIMACY OF THE IT(SS)A NOS. 32/AHD/13 & 3 ORS. [M/S. SANJAY SALES CORPORATION] -3 - ADDITIONS/DISALLOWANCES MADE UNDER S.153C OF THE AC T, WE DEEM IT EXPEDIENT TO ADJUDICATE THE AFORESAID PRELIMINARY G ROUND FIRST AS IT STRIKES TO THE ROOT OF THE MATTER. 4. THE LEARNED SENIOR COUNSEL FOR THE ASSESSEE AT T HE OUTSET POINTED OUT THAT GROUND NO.1 TOUCHES UPON THE JURISDICTIONAL AS PECTS OF THE PROCEEDINGS UNDER S.153C OF THE ACT. THE LEARNED SENIOR COUNSE L FOR THE ASSESSEE POINTED OUT THAT IN THE SEARCH CONDUCTED IN PRIYA B LUE GROUP AND ITS ASSOCIATES ON 12.01.2010, NO INCRIMINATING DOCUMENT S BELONGING TO THE ASSESSEE WAS SHOWN TO HAVE BEEN FOUND OR ESTABLISHE D BY THE AO AND CONSEQUENTLY, THE PROCEEDINGS UNDER S.153C OF THE A CT ARISING FROM SUCH SEARCH IS VOID AB INITIO AND A COMPLETE NON-STARTER. A REFERENCE WAS MADE TO THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY (2017) 397 ITR 344 (SC) AND THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF PR.CIT VS. AMIT VASANTLAL SHAH R/TAX APPEAL NO. 287/2019 JUDGMENT DATED 08.07.2019 FOR THE PROPOSITION THAT IN THE ABSENCE OF INCRIMINATING MA TERIAL WITH REFERENCE TO THE ASSESSMENT YEAR IN QUESTION, THE PROVISIONS OF SECTION 153C OF THE ACT COULD NOT BE INVOKED. 4.1 THE LEARNED SENIOR COUNSEL THEREAFTER ADVERTED OUR ATTENTION TO THE FIRST APPELLATE ORDER AS APPEALED AGAINST AND SUBMI TTED THAT THE IDENTICAL POINT CONCERNING JURISDICTIONAL DEFECT WAS RAISED B EFORE THE FIRST APPELLATE AUTHORITY BUT HOWEVER, THE SAID AUTHORITY HAS COME TO THE CONCLUSION THAT THE ACTION UNDER S.153C OF THE ACT IS AN AUTOMATIC CONSEQUENCE OF THE SEARCH CONDUCTED NOTWITHSTANDING ABSENCE OF SEIZED DOCUMENTS. THE LEARNED SENIOR COUNSEL SUBMITTED THAT SUCH COURSE I S NOT OPEN TO THE REVENUE WITHOUT SHOWING THE RELATION TO THE INCRIMI NATING DOCUMENTS FOR INVOKING JURISDICTION UNDER S.153C OF THE ACT AS IN TERPRETED BY VARIOUS COURTS. 4.2 THE LEARNED DR FOR THE REVENUE RELIED UPON THE ORDER OF THE CIT(A). IT(SS)A NOS. 32/AHD/13 & 3 ORS. [M/S. SANJAY SALES CORPORATION] -4 - 5. THE PRELIMINARY OBJECTION RELATES TO THE JURISDI CTIONAL ASPECTS FOR CONFERRING POWER ON THE AO TO ASSUME JURISDICTION U NDER S.153C OF THE ACT. A PERUSAL OF THE ORDER OF THE CIT(A) GIVES AN IMPRE SSION THAT THE CIT(A) HAS PROCEEDED ON THE BELIEF THAT PROCEEDINGS UNDER S.153C OF THE ACT COULD BE CARRIED OUT DE HORS THE INCRIMINATING MATERIAL. SUCH CONCLUSION OF TH E FIRST APPELLATE AUTHORITY IS WHOLLY UNSUSTAINABLE I N LAW IN THE LIGHT OF LONG LINE OF JUDICIAL PRECEDENTS. THEREFORE, AO COULD N OT HAVE PROCEEDED UNDER S.153C OF THE ACT WITHOUT MEETING THE PRE-REQUISITE S OF SECTION 153C OF THE ACT. IT IS HOWEVER NOT KNOWN AS TO WHETHER ANY INC RIMINATING MATERIAL WAS ACTUALLY FOUND OR NOT AND WHETHER THE ADDITIONS/DIS ALLOWANCES HAS ANY PROXIMITY WITH SUCH INCRIMINATING MATERIAL OR OTHER WISE IN THE ABSENCE OF FINDINGS ON FACTS AND IN THE ABSENCE OF RELEVANT MA TERIAL PLACED BEFORE US. WE ARE THUS NOT IN A POSITION TO RECORD OUR FINDING IN THIS REGARD. WE THEREFORE CONSIDER IT JUST AND PROPER TO REMIT THE MATTER BACK TO THE FILE OF THE CIT(A) FOR ADJUDICATION AFRESH IN ACCORDANCE WI TH LAW AND AFTER EXAMINING THE RELEVANT FACTS PERTAINING TO INCRIMIN ATING MATERIAL, IF ANY. IT SHALL BE OPEN TO THE ASSESSEE TO PLACE ALL SUBMISSI ONS AND EVIDENCES TO DEFEND ITS CASE BEFORE THE CIT(A) ON JURISDICTION A SPECTS. THE MATTER IS THUS RESTORED TO THE FILE OF THE CIT(A) IN TERMS OF DIRECTION NOTED ABOVE. 6. IN VIEW OF OBSERVATIONS, WE ARE NOT INCLINED TO ADJUDICATE THE ISSUE RAISED ON MERITS AT THIS STAGE OF THE PROCEEDINGS. THE ASSESSEE SHALL BE AT LIBERTY TO PREFER THE APPEAL BEFORE THE TRIBUNAL IN ACCORDANCE WITH LAW IF SO ADVISED DEPENDING UPON THE OUTCOME OF THE PROCEEDIN GS BEFORE THE CIT(A) IN PURSUANCE OF THIS ORDER. 7. IN THE RESULT, ALL THREE APPEALS FILED BY ASSESS EE IN IT(SS)A NOS. 32 & 33/AHD/2013 & 494/AHD2012 ARE ALLOWED FOR STATIST ICAL PURPOSES. 8. AS THE ORDERS OF THE CIT(A) IN ALL THE THREE YEA RS HAVE BEEN SET ASIDE FOR RE-ADJUDICATION OF THE LEGAL OBJECTION WITH REF ERENCE TO THE ASSUMPTION OF JURISDICTION UNDER S.153C R.W.S. 153A OF THE ACT , WE DO NOT CONSIDER IT EXPEDIENT TO LOOK INTO THE MERITS OF THE ADDITIONS/ DISALLOWANCES AT THIS STAGE PENDING ADJUDICATION OF THE CARDINAL ISSUE TO WARDS JURISDICTION. IT(SS)A NOS. 32/AHD/13 & 3 ORS. [M/S. SANJAY SALES CORPORATION] -5 - THE REVENUE SHALL HOWEVER BE ENTITLED TO APPROACH T HE TRIBUNAL AFRESH IN ACCORDANCE WITH LAW. ON CONCLUSION OF THE PROCEEDI NGS BEFORE THE CIT(A). THE APPEAL OF THE REVENUE IN IT(SS)A NO. 505/AHD/20 12 IS ACCORDINGLY DISMISSED AS INFRUCTUOUS. 9. IN THE RESULT, ALL THREE APPEALS FILED BY ASSESS EE ARE ALLOWED FOR STATISTICAL PURPOSES WHEREAS APPEAL OF THE REVENUE IS DISMISSED AS INFRUCTUOUS. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 14/10/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- ). / REVENUE 2. / ASSESSEE +. ,-.! /! / CONCERNED CIT 4. /!- / CIT (A) 2. 345 6!6-.7 ' -.&7 89, / DR, ITAT, AHMEDABAD :. 5;< / GUARD FILE. BY ORDER / 7 /8 ' -.&7 89, THIS ORDER PRONOUNCED IN OPEN COURT ON 14/10/201 9