Shri Mukesh Nagjibhai Dodia, RAJKOT-GUJARAT V. The Deputy Commissioner Of Income Tax, Circle 2, RAJKOT-GUJARAT

ITSSA 32/RJT/2010

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1760 (ITAT-RAJKOT)
• Duration Of Justice: 9 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 22-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJEET SINGH
• Keywords: Loose papers; Set aside
• Section: 158BC; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT [CONDUCTED THROUGH E COURT AT AHMEDABAD] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ IT(SS)A.NO.32/RJT/2010 / ASSTT. YEAR: BLOCK PERIOD 1.4.1991 TO 31.5.2001 MUKESH NAGJIBHAI DODIA C/O. RAM ENTERPIRSE SHAKI SOCIETY-2 B/H. SCHOOL NO.13 RAJKOT. VS DCIT, CIR.2 RAJKOT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : WRITTEN SUBMISSION REVENUE BY : SHRI RANJEET SINGH, CIT-DR / DATE OF HEARING : 26/11/2019 / DATE OF PRONOUNCEMENT: 10 /12/2019 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.COMMISSIONER OF INCOME TAX(A)-III, RAJKOT DATED 8.12.2009 PASSED FOR BLOCK PERIOD STARTING FROM 1.4.1991 AND ENDING ON 3 1.5.2001. 2. THE ASSESSEE HAS TAKEN ELEVEN GROUNDS OF APPEAL; OUT OF WHICH GROUND NO.8 READS AS UNDER: 8. WITHOUT PREJUDICES, THE LD.CIT(A) HAS ERRED IN LAW AND FACTS, IN NOT CONSIDERING THE ASPECT THAT THE ASSESSEE HAS BE EN ASSESSED IN PURSUANCE OF SECTION 158BD WITHOUT BEING SATISFIED IN TERMS OF SECTION 158BD THAT THE AMOUNT UNDER DISPUTE IS THE INCOME T HAT BELONGS TO THE ASSESSEE. IT(SS)A NO.32 /RJT/2010 2 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT WAS CARRIED OUT IN THE GROUP CASES OF M/S.S HRI RAM ENTERPRISES ON 31.3.2001. ACCORDING TO THE AO, BOOKS OF ACCOUNTS, DOCUMENTS, LOOSE PAPERS WERE FOUND, AND THEREFORE, PROCEEDINGS UNDER SECTIO N 158BD OF THE ACT HAS BEEN TAKEN AGAINST THE ASSESSEE. THE OPENING LINES OF THE ASSESSMENT ORDER FOR INITIATING THIS PROCEEDING ARE ONLY RELEVANT FOR TH E PURPOSE OF DECIDING THIS GROUND, AND THEREFORE, WE TAKE NOTE OF THESE LINES AS UNDER: DURING THE COURSE OF SEARCH OPERATION U/S 132 OF T HE ACT ON 3 I-05- 2001-IN THE GROUP CASE OF M/S SHRI RAM ENTERPRISE A T THE BUSINESS PREMISES SITUATED AT RADHESHYAM PRINT BUILDING. PE DAK ROAD, KAJKOL. A BOOKS OF ACCOUNTS, DOCUMENTS, ETC., WERE FOUND AN D SEIZED DURING THE COURSE OF SEARCH PROCEEDINGS. THE MATERIAL/LOOSE PA PER FILES AS PER ANN. A-1, A-2 ARE BELONGS TO M/S. SHRI RAM ENTEPRIS E, RADHESHYAM PRINT BUILDING, PEDAK ROAD, RAJKOT. THE INTIMATION U/S. 158BD OF THE ACT REGARDING THE DOCUMENTS/LOOSE PAPER FILED FOUND AND SEIZED AS ABOVE IN RESPECT OF SHRI RAM ENTERPRISE HAS BEEN SU BMITTED TO THIS OFFICE. ACCORDINGLY, ON THE BASIS OF MATERIAL IMPO UNDED AND SEIZED DURING THE COURSE OF SEARCH PROCEEDINGS, A NOTICE U /S. 158BC OF THE ACT WAS ISSUED ON 13.12.2005 AND DULY SERVED UPON THE A SSESSEE ON 06.1.2006 REQUIRING HIM TO FURNISH THE RETURN OF IN COME FOR THE BLOCK PERIOD 01.04.1991 TO 31.05.2001 WITHIN 16 DAYS FROM THE DATE OF RECEIPT OF THIS NOTICE. HOWEVER, (HE ASSESSEE HAS N OT FURNISHED (LIE RETURN OF INCOME FOR THE BLOCK PERIOD 01.04.199L'TO 31.05.2001 TILL DATE. 4. THE ASSESSEE PLEADED BEFORE THE LD.CIT(A) THAT N O SATISFACTION WAS RECORDED BY THE AO OF THE SEARCHED PERSON, AND THER EFORE NOTICE ISSUED UNDER SECTION 158BD IS ILLEGAL. THE LD.CIT(A) HAS RECORD ED THE FOLLOWING FINDING ON THIS ISSUE, WHICH READS AS UNDER: 3. IN THE GROUNDS OF APPEAL, THE APPELLANT HAS RAI SED 7 GROUND OF APPEAL. IT IS NOTICED THAT THE GROUNDS OF APPEAL NO . 1 TO 3 ARE GENERAL IN NATURE. THE GROUND OF APPEAL NO. 4 IS AS UNDER: IT(SS)A NO.32 /RJT/2010 3 '4. LD. AO HAS ASSESSED THE ASSESSEE IN PURSUANCE OF SEC.!58BD, WITHOUT BEING SATISFIED IN TERMS OF SEC.158BD THAT THE AMOUNT UNDER DISPUTE IS THE INCOME THAT BELONGS TO THE ASS ESSEE. ' 3.2. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE. I HAVE FOUND THAT BEFORE THE AO NO EXPLANATION WAS FILED AND NO COMPL IANCE WAS MADE AND THE ASSESSMENT WAS COMPLETED EX-PARTE U/S.158BC R.W.S. 144 OF THE IT. ACT, 1961. THEREFORE, THE APPELLANT'S CLAIM THA T ASSESSMENT U/S. 158BD WAS MADE WITHOUT SATISFACTION IS NOT FOUND CO RROBORATED BY ANY EXPLANATION OR EVIDENCE. ON THE OTHER HAND, THE AO' S SATISFACTION IS BASED ON APPRECIATION OF FACTS AVAILABLE IN RECORD, AND THEREFORE, IS HELD TO BE CORRECT. THIS GROUND OF APPEAL IS DISMIS SED. 5. WITH THE ASSISTANCE OF THE LD.DR, WE HAVE GONE T HROUGH THE RECORD CAREFULLY AND PERUSED WRITTEN SUBMISSIONS FILED BY THE LD.COUNSEL FOR THE ASSESSEE. IT HAS BEEN SETTLED NOW THAT BEFORE INIT IATING PROCEEDINGS UNDER SECTION 158BD, THERE SHOULD BE A SATISFACTION OF TH E AO OF THE SEARCHED PERSON EXHIBITING THE FACT THAT MATERIAL/LOOSE PAPE RS ETC. WERE FOUND DURING THE COURSE OF SEARCH BELONGED TO THE THIRD PERSON A ND SHOWS ESCAPEMENT OF INCOME. AFTER RECORDING SUCH SATISFACTION, HE WOUL D TRANSMIT THE RECORD TO THE AO OF SUCH THIRD PERSON, AND WHO WILL ANALYSIS ON T HIS INFORMATION, AND THEREAFTER HE WILL ISSUE NOTICE UNDER SECTION 158BD . A PERUSAL OF ORDERS OF THE LD.AO AS WELL AS THE LD.CIT(A) IT WOULD REVEAL THAT THIS ASPECT HAS TOTALLY BEEN IGNORED BY BOTH THE AUTHORITIES IN SPITE OF SP ECIFIC REQUEST MADE BY THE ASSESSEE. THE LD.CIT(A) HAS DEALT WITH THIS ISSUE IN A PERIPHERAL MANNER WITHOUT SPECIFICALLY RECORDING A FINDING. NO EXPLA NATION OF THE ASSESSEE IS REQUIRED IN THIS CONNECTION. IT IS FOR THE REVENUE TO RECORD A CATEGORICAL FINDING ON THIS ASPECT. THEREFORE, WE DEEM IT APPR OPRIATE TO SET ASIDE BOTH THE ORDERS, AND RESTORE THE ISSUE TO THE FILE OF THE LD .CIT(A) FOR RE-ADJUDICATION. THE LD.CIT(A) IS DIRECTED TO FIND OUT WHETHER ANY S ATISFACTION NOTE WAS RECORDED BY THE AO OF THE SEARCHED PERSON. IF YES, THEN SUCH SATISFACTION NOTE SHOULD BE REPRODUCED IN THE ORDER TO BE PASSED. IN CASE SATISFACTION NOTE IS IT(SS)A NO.32 /RJT/2010 4 AVAILABLE OR NOT RECORDED, THEN THE ASSESSMENT ORDE R SHOULD BE QUASHED. IN CASE IT IS ASCERTAINED THAT SATISFACTION NOTE IS AV AILABLE, AND THE AO HAS INITIATED PROCEEDINGS AFTER POSSESSING THAT SATISFA CTION NOTE, IN THAT CASE, THE ASSESSEE WILL BE AT LIBERTY TO CHALLENGE FRESH ORDE R OF THE LD.CIT(A) ALONG WITH OTHER ISSUES ON MERIT BEFORE THE TRIBUNAL. IN VIEW OF THE ABOVE, DISCUSSION, WE ARE NOT ADJUDICATING OTHER GROUNDS, WHICH ARE ON MERITS OF THE ADDITIONS. THEY WILL BE ADJUDICATED AFTER ADJUDICATION OF JURI SDICTIONAL ISSUE AT THE LEVEL OF LD.CIT(A), AND IF NEEDS ARISE. THE REASON FOR O UR ABOVE FINDING IS THAT THIS IS AN APPEAL PENDING IN THE TRIBUNAL FOR THE LAST N INE YEARS. NEITHER THE ASSESSEE IS ABLE TO PRODUCE SUCH SATISFACTION NOTE NOR THE REVENUE. THE LD.COUNSEL FOR THE ASSESSEE, SHRI D.R. ADHIA IS SUF FERING FROM HEARING LOSS, AND HE IS UNABLE TO APPEAR BEFORE THE TRIBUNAL. HE USED TO SUBMIT WRITTEN SUBMISSIONS ONLY. CONSIDERING THE ABOVE ASPECTS, W E DEEM IT APPROPRIATE TO SET ASIDE THIS PRELIMINARY ISSUE TO THE FILE OF THE LD.CIT(A) FOR FRESH ADJUDICATION. 6. IN THE RESULTS, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 10 TH DECEMBER, 2019 AT AHMEDABAD. SD/- SD/- ( WASEEM AHMED ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 10/12/2019