Shri Rakesh J.Shah(Kachwala), Surat V. The ACIT.,Cent.Circle-2, Surat

ITSSA 337/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0614 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-02-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 11-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R B SHAH
• Keywords: Unexplained investment; Unexplained expenditure; Opportunity of being heard; Principle of natural justice; Non compliance; Condonation of delay
• Section: 142(1); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI ACCOUNTANT MEMBER IT (SS) A NO S . 303, 304, 336, 337 & 338 /AHD/20 11 A. Y S . 2004 - 05, 200 6 - 0 7 & 2007 - 08 SHRI RAKESH J. SHAH (KAC HWALA), KACHWALA STREET, GOLWAD, VYARA, SURAT. PAN: AEQPS 5367E VS ACIT, CENTRAL CIRCLE - 2, SURAT. (APPELLANT) (RESPONDENT) IT (SS) A NOS.305, 306, 334 & 335/AHD/20 11 A.Y S . 200 6 - 07 & 2007 - 08 SHRI KEYUR J. SHAH (KACHWALA), KACHWALA STREET, GOLWAD, V YARA, SURAT. PAN: ACIPS 3505N VS ACIT, CENTRAL CIRCLE - 2, SURAT. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SUBHASH BAINS , CIT - D.R. ASSESSEE(S) BY : SHRI R.B. SHAH , A.R. / DATE OF HEARING : 1 1 / 0 2 /201 5 / DATE OF PRONOUNCEMENT: 20 / 0 2 /201 5 / O R D E R PER MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THESE ARE TWO SETS OF APPEALS , BOTH HAVING IDENTICAL FACTS; HENCE, HEREBY CONSOLIDATED AND DECIDED BY THIS COMMON ORDER: A. RAKESH J. SHAH FOR A.YS.2006 - 07 & 2007 - 08 2. FOR A.YS.2006 - 07 & 2007 - 08 , A PPEALS HAVE BEEN FILED AGAINST THE ORDER OF LEARNED CIT(A), AHMEDABAD , DATED 18.01.2011 . THE GROUNDS RAISED ARE AS UNDER: ITA NO S . 303, 304, 305, 306, 334, 335, 336, 337, 338 /AHD/20 11 RAKESH J. SHAH & KEYUR J. SHAH (KANCHWALA) VS. ACIT, C.C. - 2, SURAT. FOR A.Y. 200 8 - 0 9 - 2 - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN COMPLETING THE ASSESSMENT U/S.144 RWS. 1 53A OF THE INCOME TAX ACT, 1961 GIVING VERY SHORT TIME TO THE APPELLANT FOR COMPLIANCE, WHICH IS IN VIOLATION OF TH E PRINCIPLES OF NATURAL JUSTICE AND EQUIT Y AND BAD IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN NOT APPRECIATING THE FACT THAT THE ASSESSING OFFICER HAS NOT ADVERSELY COMMENTED BY WAY OF REMAND REPORT ON THE VARIOUS EVIDENCES & OTHER SUBMISSIONS FORWARDED TO HIM. 3. TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION TO THE EXTENT OF RS.1,50,500/ - (RS.6,91,247/ - FOR A.Y.2007 - 08) MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT BEING AN AMOUNTS OF DEPOSITS IN SBI A/C. N O.4758 IN SURAT DIST. CO. OP. BANK. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS.9 ,75,0 00/ - (RS.6,00,000/ - FOR A.Y.2007 - 08) MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT BEING AN AMOUNT S OF L/3 R D SHARE OF THE APPELLANT IN RESPECT OF ALLEGED PURCHASE OF PROPERTY ONLY ON THE BASIS OF SEIZED MATERIAL. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITIONS MADE BY THE ASSESSING OFFICER WHEN THE SAME ADDITIO NS HAVE BEEN CONFIRMED IN THE HANDS OF OTHER ENTITIES IN THE GROUP THEREBY RESULTING IN DOUBLE TAXATION OF THE SAME INCOME. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN NOT APPLYING THE DEEMING PROVISIONS OF THE ACT WHILE MAKING THE ADDITION ON ACCOUNT OF UNDISCLOSED INCOME, UNEXPLAINED EXPENDITURE AND UNACCOUNTED INVESTMENTS U/S.69 OF THE I.T. ACT, 1961. THE ADDITIONS , THEREFORE, SUFFERS FROM LEGAL INFIRMITIES AND REQUIRE TO BE DELETED. 3. FACTS OF THE CASE HAVE REVEALED AS STATED IN THE ASSESSMENT ORDER PASSED U/S.144 R.W.S.153A BOTH DATED 28.11.2008 THAT CONSEQUENCE UPON A SEARCH U/S.132 CARRIED OUT ON 15.11.2 006 AT THE RESIDENTIAL PREMISES, ACTION WAS TAKEN AGAINST THE ASSESSEE . I T H AS ALSO BEEN MENTIONED THAT THE GROUP WAS ENGAGED IN THE BUSINESS OF LAND DEVELOPMENT AND BUILDING CONSTRUCTION . T HERE WAS NON - COMPLIANCE FROM THE SIDE OF THE ASSESSEE; THEREFORE, AN EX - PARTE ORDER WAS PASSED AND RESPECTIVELY AN ADDITION OF RS.12,00,500/ - AND RS.16,90,998/ - TOWARDS UNEXPLAINED EXPENDITURE/INVESTMENT WAS MADE FOR A.Y.200 6 - 0 7 AND 200 7 - 08. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY , THE ACTION ITA NO S . 303, 304, 305, 306, 334, 335, 336, 337, 338 /AHD/20 11 RAKESH J. SHAH & KEYUR J. SHAH (KANCHWALA) VS. ACIT, C.C. - 2, SURAT. FOR A.Y. 200 8 - 0 9 - 3 - TAKEN U/S.69 AGAINST THE ASSESSEE AND ADDITION ON ACCOUNT OF UNDISCLOSED INCOME WAS PARTLY ALLOWED. WITH THIS BRIEF BACKGROUND , AT THE OUTSET , WE HAVE BEEN INFORMED THAT THE ADDITIONS MADE IN THE HANDS OF THIS ASSESSEE WAS CONNECTED WITH THE ADDITIONS AS MADE IN THE HAND OF ONE SRI JAGDISH C. SHAH, FATHER OF THE ASSESSEE. LEARNED AR HAS INFORMED THAT IN SOME OF THE ADDITIONS ONLY 1/3 RD WAS TAXED IN THE HANDS OF THE ASSESSEE AND REST OF THE AMOUNT WAS TAXED IN THE HANDS OF SRI JAGDISH C. SHAH. HOWEVER, HE HAS INFORMED THAT RESPECTED ITAT C BENCH AHMEDABAD HAS DECIDED THE CASE OF SRI JAGDISH C. SHAH FOR A.Y.2007 - 08 BEARING ITA NO.239/AHD/2010 AND ITA NO.240/AHD/2010 (M/S. J.C. ASSOCIATES) VIDE ORDER DATED 21.09.2012 WHEREIN THE MATTER WAS RESTORED BACK TO THE FILE OF THE AO AFTER LEVYING PENALTY OF RS.5,000/ - RELEVANT PARAGRAPH 4 IS RE PRODUCED BELOW: 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND HAVE GO NE THROU G H THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT IN BOTH THE CASES, NONE APPEARED ON BEHALF OF THE ASSESSEE BEFORE THE A.O. AND, TH EREFORE , THE ASSESSMENT ORDER WAS PASSED BY THE A.O. U/S 144. WE FIND THAT IT IS NOTED BY THE A.O. ON PAGE 1 OF THE ASSESSMENT ORDER THAT SEARCH WAS CARRIED ON 15.11.2006 AT THE RESIDENTIAL PREMISES OF THE ASSESSEE AND SIMULT ANEOUSLY SURVEY ACTION U/S . 133 A WAS CONDUCTED AT THE BUSINESS PREMISES OF THE GROUP. THE A.O. HAS ALSO NOTED THAT DESPITE REMINDERS AND NOTICES , NO RETURN OF INCOME WAS FILED BY THE ASSESSEE AND THEREAFTER A NOTICE U /S . 142(1) WAS ISSUED ON 13.08.2008. ON PAGE 5 OF THE ASSESSMENT ORDER IN THE CASE OF INDIVIDUAL, THE A.O. HAS NOTED THE GIST OF NON COMPLIANCE AND NON COOPERATION OF STATUTORY NOTICES BY THE ASSESSEE AS PER WHICH HE HAS MENTIONED THAT NOTICE U/S . 142(1) WAS ISSUED ON 13.08.2008 AND REMINDER DATED 27.08.2008 AND, THEREAFTER PROP OSAL U/S .144 FOR BEST JUDGMENT ASSESSMENT WAS ISSUED ON 12.11.2008 AND ITS REMINDER WAS ISSUED ON 20.11 - 2008 AND , THEREAFTER, THE ASSESSMENT WAS COMPLETED ON 28.1 1.2008 . IN THE OTHER CASE ALSO, THE ASSESSMENT WAS COMPLETED ON 28.11.2008. IN THE COURSE OF P ROCEEDINGS BEFORE LD. C IT(A) WE FIND THAT IT IS NOTED BY LD. CIT(A) THAT THE APPEAL WAS FILED LATE BY THE ASSESSEE AND IN RESPONSE TO NOTICE ISSUED BY LD. CIT(A) ON 21 .07.20 09 , AMIT PATE L, FCA APPEARED AND FILED REPLY FOR CONDONATION OF DELAY FOR 66 DAYS I N FILING OF APPEAL AND ALSO REQUESTED FOR ADMISSION OF APPEAL AS PER THE PROVISIONS OF SECTION 249(4)(B) OF THE INCOME TAX ACT, 1961. LD. CIT(A) HAD CONDONED THE DELAY AND ALSO ADMITTED THE APPEAL U/S.249(4)(B) IN VIEW OF PAYMENT OF TOTAL TAX OF RS.24 LACS BY GROUP CONCERNS. LD. CIT(A) HAS MENTIONED THAT ALTHOUGH SUBMISSIONS WERE MADE ITA NO S . 303, 304, 305, 306, 334, 335, 336, 337, 338 /AHD/20 11 RAKESH J. SHAH & KEYUR J. SHAH (KANCHWALA) VS. ACIT, C.C. - 2, SURAT. FOR A.Y. 200 8 - 0 9 - 4 - REGARDING LATE FILING AND PAYMENT OF ADMITTED TAXES, NO SUBMISSION WAS FILED ON MERIT AND THEREAFTER, HE HAS PASSED THE ORDER ON 15.10.2009. UNDER THESE FACTS, WE ARE SATISFIE D THAT SUFFICIENT OPPORTUNITY WAS NOT PROVIDED BY LD. CIT(A) TO THE ASSESSEE HI BOTH THE CASES. THIS GOES TO SHOW THAT ALTHOUGH THE ASSESSEE DID NOT COMPLY WITH VARIOUS NOTICES ISSUED BY THE A.O. IN THE MONTH OF AUGUST 2008 AND SEP. 2008 BUT IT IS A FACT T HAT ALTHOUGH THE SEARCH WAS CARRIED OUT IN TH E MONTH OF NOVEMBER 2006 AND THE FIRST NOTICE WAS ISSUED BY THE A.O. ON 13.08.2008 AND THE ASSESSMENT WAS COMPLETED ON 28.11.2008 . HENCE, IN OUR CONSIDERED OPINION, SOME COST SHOULD BE IMPOSED ON THE ASSESSEE FO R NON COMPLIANCE OF TH E STATUTORY NO TICES BU T AT TH E SA M E TIME, IN THE INTEREST OF JUSTICE, ONE MORE OPPORTUNITY SHOULD BE PROVIDED TO THE ASSESSEE TO MAKE OUT HIS CASE AND HENCE, IN BOTH THE CASES, WE SET ASIDE THE ORDER OF LD. CIT(A) AND RE STORE THE MATT ER BACK TO THE F I LE OF TH E A.O. FOR A FRESH DECISION IN BOTH THE CASES ON THE CONDITION THAT THE ASSESSEE SHOULD PAY COST OF RS.5,000/ - IN EACH CASE. THE ASSESSEE SHOULD DEPOSIT THIS COST AS PER RULE AN D SUBMIT EVIDENCE THEREOF BEFORE THE A.O. AND, THEREAF TER, THE A.O. SHOULD DECIDE THE ISSUE AFRESH AND PASS NECESSARY ORDER AS PER LAW IN BOTH THE CASES AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 5. IN VIEW OF OUR DECISION WITH REGARD TO GROUND NO.2 OF THE ASSESSEE S APPEAL IN BOTH THE CASES, OTHER GROUNDS RAISED BY THE ASSESSEE DO NOT CALL OF ANY ADJUDICATION AT THIS STAGE. 4. HAVING HEARD THE SUBMISSION OF BOTH THE SIDES AND AFTER CONSIDERING THE FACTS OF THE CASE AS ALSO THE CONTENTS OF THE PAPER BOOK FILED BY THE ASSESSEE, WE ARE OF THE OPINION THAT ALTHOUGH THE LEARNED CIT(A) HAS DISCUSSED SOME OF THE ISSUES IN THE IMPUGNED APPELLATE ORDER BUT IN A SITUATION WHEN THE CONNECTED QUANTUM ADDITIONS HAVE ALREADY BEEN RESTORED BACK FOR DENOVO CONSIDERATION BY THIS TRIBUNAL IN THE CA SE OF ASSESSEE S FATHER ; THEREFORE , IN ALL FAIRNESS ITS IS JUSTIFIABLE TO RESTORE THIS GROUND AS WELL BACK TO THE FILE OF THE AO TO BE DECIDED IN THE LINE OF THE FINAL JUDGMENT TO BE TAKEN IN THE CASE OF SRI JAGDISH C. SHAH. SINCE, WE ARE RESTORING THE ISS UE BACK TO THE FILE OF THE AO FOR DENOVO ADJUDICATION AS DISCUSSED ABOVE; HENCE, THESE GROUNDS MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSE ONLY. HOWEVER, WE HAVE ALSO NOTED THAT WHILE RESTORING THE ISSUE THE RESPECTED CO - ORDINATE BENCH HAS IMPOSE D A FINE OF RS.5,000/ - . THIS DIRECTION AS WELL SHALL FOLLOW IN THIS CASE. GROUNDS RAISED ARE ALLOWED FOR STATISTICAL PURPOSE. ITA NO S . 303, 304, 305, 306, 334, 335, 336, 337, 338 /AHD/20 11 RAKESH J. SHAH & KEYUR J. SHAH (KANCHWALA) VS. ACIT, C.C. - 2, SURAT. FOR A.Y. 200 8 - 0 9 - 5 - ( B. ) IN THE CASES OF RA K ESH J. SHAH , THE PENALTY APPEALS U/S.271(1) (C) ARE B EFORE US FOR A.Y.2004 - 05, 2006 - 07 AND 2007 - 08 . IN RES PECT OF A.YS. 2006 - 07 AND 2007 - 08, THE MATTER BEING RESTORED BACK PERTAINING TO QUANTUM ADDITION ; THEREFORE , THESE TWO PENALTY A PPEALS SHALL BE DECIDED AS PER LAW , THEREAFTER. HOWEVER, FOR A.Y. 2004 - 05 (ITA NO.336/AHD/2011) , WE HAVE NOTED THAT A PENALTY OF RS.13,300/ - WAS LEVIED U/S.271(1)(C) OF IT ACT AND BECAUSE OF THE SMALLNESS OF THE A M OUNT , LEARNED A.R. HAS PLEADED THAT THIS PENALTY CAN BE DECIDED RIGHT NOW. WE ARE NOT IN AGREEMENT WITH THIS SUBMISSION OF LEARNED A.R. BECAUSE THE AO HAS ARRIVED AT THE FIGURE OF RS.70,000/ - TREATED AS UNEXPLAINED EXPENDITURE/INVESTMENT PRIMARILY ON THE BASIS OF A DISCLOSURE MADE BY SRI JAGDISH C. SHAH OF RS.70 LACS. THAT CASE NOW HAS BEEN RESTORED BACK TO THE FILE OF THE AO. THIS PENALTY APPEAL SHALL ALSO BE DECIDED AFT ER THE DECISION TAKEN IN THE GROUP CASES. C. KEYUR C. SHAH FOR A.Y.2006 - 07, 2007 - 08. 5. IN THE LIGHT OF THE ABOVE OBSERVATION , THESE QUANTUM A PPEALS ARISING FROM A CONSOLIDATED ORDER OF LEARNED CIT(A) - II, AHMEDABAD DATED 18.1.2011 ARE ALSO REQUIRED TO BE RESTORED BACK TO THE FILE OF THE AO IN THE LIGHT OF THE ORDER OF JAGDISH C. SHAH (SUPRA). RESULTANTLY, GROUNDS RAISED MAY BE TREATED AS ALLOWED BUT FOR STATISTICAL PURPOSE BEING RESTORED BACK TO THE FILE OF THE AO. D. IN THE CASE OF KEYUR J. SHAH, TWO APP EALS FOR A.Y.2006 - 07 AND 2007 - 08 AGAINST THE LEVY OF PENALTY U/S.271(1)(C) HAVE BEEN FILED. THESE ITA NO S . 303, 304, 305, 306, 334, 335, 336, 337, 338 /AHD/20 11 RAKESH J. SHAH & KEYUR J. SHAH (KANCHWALA) VS. ACIT, C.C. - 2, SURAT. FOR A.Y. 200 8 - 0 9 - 6 - APPEALS PERTAINING TO THE LEVY OF PENALTY SHALL BE DECIDED AS PER THE DECISION OF THE CASES FINALIZED PERTAINING TO THE QUANTUM ADDITION. 6. IN THE RESULT, A LL THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED BUT FOR STATISTICAL PURPOSE BEING RESTORED BACK TO THE FILE OF THE AO FOR DE NOVO CONSIDERATION A S PER THE DIRECTION. SD/ - SD/ - (ANIL CHATURVEDI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 20 / 0 2 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . S / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD