DCIT CEN. CIR. - 8, MUMBAI V. Sri. ANJAN CHATERJEE, MUMBAI

ITSSA 34/MUM/2004

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9108 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 20-01-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARISH MOTIWALLA
• Assessee Lawyers: S S RANA
• Keywords: Procedural lapse; Block assessment
• Section: 143(3); 142(1); 145; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.V. EASWAR, HONBLE PRESIDENT AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER IT(SS) NO.34/MUM/2004 BLOCK PERIOD FROM 01.04.1990 TO 03.11.2000 DCIT CEN CIR-8, 8 TH FLR., OLD CGO BLDG., M.K. RD., NEW MARINE LINES, MUMBAI 400 020. VS. SHRI ANJAN CHATTERJEE 4 TH FLR., HARIOM CHAMBERS, B-16, VEERA INDUSTRIAL ESTATE, OFF NEW LINK RD.,ANDHERI (W), MUMBAI 400 053. PAN : AABPC1526A (APPELLANT) (RESPONDENT) CO NO.291/MUM/2007 ARISING OUT OF IT(SS) NO.34/M/2004 BLOCK PERIOD FROM 01.04.1990 TO 03.11.2000 SHRI ANJAN CHATTERJEE 4 TH FLR., HARIOM CHAMBERS, B-16, VEERA INDUSTRIAL ESTATE, OFF NEW LINK RD.,ANDHERI (W), MUMBAI 400 053. PAN : AABPC1526A VS. DCIT CEN CIR-8, 8 TH FLR., OLD CGO BLDG., M.K. RD., NEW MARINE LINES, MUMBAI 400 020. (CROSS OBJECTOR) (RESPONDENT) ASSESSEE BY : SHRI S.S. RANA (DR) DEPARTMENT BY : SHRI HARISH MOTIWALLA (AR) O R D E R PER J. SUDHAKAR REDDY, A.M. THIS IS AN APPEAL FILED BY THE REVENUE, DIRECTED AG AINST THE ORDER OF THE LEARNED CIT(A)CENTRAL-II, MUMBAI DATED 14.11.20 03 FOR THE BLOCK PERIOD 01.04.1990 TO 03.11.2000. THE ASSESSING OFFICER H AD PASSED THE ORDER U/S.158BC R.W.S. 143(3) OF THE ACT ON 30.11.2002. IT(SS) NO.34/MUM/2004 CO NO.291/MUM/2007 2 2. THE ASSESSEE HAS FILED A CROSS OBJECTION. 3. THE SOLE GROUND OF APPEAL RAISED BY THE REVENUE IS AS FOLLOWS: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, T HE LEARNED CIT(A) ERRED IN ALLOWING RELIEF OF RS.16.96 LAKHS OUT OF RS.40,08,272/- AND ALLOWING FURTHER RELIEF OF RS.3,21,325/-. 4. IN THE CROSS OBJECTION THE ASSESSEE HAS RAISED T HE FOLLOWING GROUNDS: 1. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITI ONS TO THE EXTENT OF RS.19,90,947/- ON THE BASIS OF ESTIMATION OF FOOD COST TO SALES RATIO, WITHOUT ANY EVIDENCE ON RECORD FOUND D URING THE SEARCH. 2. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THAT PURCHASE OF MATERIAL WAS FULLY DISCLOSED IN REGULAR RE TURNS OF INCOME FILED BY THE APPELLANT AND NO EVIDENCE WAS FOUN D DURING SEARCH TO ESTABLISH THAT PURCHASES WERE INFLATED AND THER EFORE NO ADDITION COULD HAVE BEEN MADE FOR THE BLOCK PERIOD. 3. THE LEARNED CIT(A) ERRED IN ESTIMATING THE PERQUIS ITES FROM M/S. SITUATION ADVERTISING AND MARKETING SERVIC ES PRIVATE LIMITED AT RS.77481/- WHEN THE APPELLANT WAS RESIDING IN H ISOWN FLAT WHICH WAS ALLOWED TO BE USED AS OFFICE OF THE COMPA NY WITHOUT ANY RENT, IN WHICH HE WAS DIRECTOR AND GETTI NG REMUNERATION. 4. THE LEARNED CIT(A) ERRED IN ESTIMATING THE INCOME FROM HOUSE PROPERTY FOR BLOCK PERIOD AT RS.83,122/-. 5. THE ASSESSEE HAS RAISED AN ADDITIONAL GROUND OF APPEAL IN THE CROSS OBJECTION WHICH READS AS FOLLOWS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEAR NED DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-8, MUMBAI , ERRED IN PASSING THE ASSESSMENT ORDER ON 30.11.2002 FOR THE BLOCK PERIOD FROM 01.04.1990 TO 03.11.2000 U/S.158BC R.W.S. 143(3) PARTICULARLY WHEN NOTICES U/S.143(2) & 142(1) WERE ISSUED ON LY ON 16.09.2002 I.E. AFTER 12 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN FOR THE BLOCK PERIOD IS FILED I.E. ON 24.07.2001. THEREFORE THE ASSESSMENT IS BAD IN LAW AND VOID AB INITIO . 6. WE FIRST TAKE UP THE ADDITIONAL GROUND OF APPEAL . WE HAVE HEARD SHRI HARISH MOTIWALLA , LEARNED COUNSEL FOR THE ASSESSEE AND SHRI S.S. RAN A, IT(SS) NO.34/MUM/2004 CO NO.291/MUM/2007 3 LEARNED DR. THE ASSESSEE HAS FILED THE APPLICATIO N UNDER RIGHT TO INFORMATION ACT, 2005. THE REPLY IS AS UNDER: 1. THE APPLICANT HAS FILED AN APPLICATION DATED 29.01.2010 FOR OBTAINING INFORMATION UNDER RIGHT TO INFORMATION AC T, 2005 IN THIS OFFICE ON 14.02.2010. 2. THE APPLICANT, IN HIS APPLICATION, HAS SOUGHT THE INFORMATION VIZ. DATE OF ISSUANCE OF NOTICES U/S.143(2), 142(1) & 158BC FOR THE BLOCK PERIOD 01.04.1990 TO 03.11.2000 IN HIS CASE FOR BLOCK ASSESSMENT. 3. THE APPLICANT HAS PAID THE FEES OF RS.10/- BY WAY OF AFFIXING COURT FEES STAMPS THEREON. 4. THE INFORMATION SOUGHT BY THE APPLICATION, AS ABOVE, IS GIVEN HEREUNDER; DATE OF ISSUANCE OF NOTICE U/S.158BC 01.12.2000 DATE OF ISSUANCE OF NOTICE U/S.143(2) 16.09.2002 DATE OF ISSUANCE OF NOTICE U/S.142(1) 16.09.2002 5. IN VIEW OF THE ABOVE INFORMATION AS PROVIDED TO THE APPLICANT, THE APPLICATION STANDS DISPOSED OFF. 6. THE APPEAL, IF ANY, LIES AGAINST THIS ORDER TO THE AD DL. COMMISSIONER OF INCOME TAX-8(3), ROOM NO.220, 2 ND FLR., AAYAKAR BHAVAN, MUMBAI 400 020; AND THE APPEAL MAY BE WITHIN 30 DAYS FROM RECEIPT OF THIS ORDER. 7. FROM THE ABOVE IT IS CLEAR THAT THE ASSESSEE WAS ISSUED NOTICE U/S.143(2) ON 16.09.2002. THE UNDISPUTED FACT IS THAT THE ASSESSEE HAS FILED A BLOCK RETURN OF INCOME IN FORM NO.2B ON 24. 07.2001. THUS THE NOTICE U/S.143(2) WAS ISSUED BEYOND A PERIOD OF 12 MONTHS. 8. THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS . HOTEL BLUE MOON REPORTED IN 321 ITR 362(SC) HELD AS FOLLOWS: IF THE ASSESSING OFFICER, FOR ANY REASON, REPUDIATES THE RETURN FILED BY AN ASSESSEE IN RESPONSE TO NOTICE U/S.158BC(A) OF THE I.T. ACT, 1961 RELATING TO A BLOCK ASSESSMENT, THE ASSESSING OF FICER MUST NECESSARILY ISSUE NOTICE U/S.143(2) OF THE ACT WIT HIN THE TIME PRESCRIBED IN THE PROVISO TO SECTION 143(2). BY MAKING THE ISSUE OF NOTICE MANDATORY, SECTION 158BC, D EALING WITH BLOCK ASSESSMENTS, MAKES SUCH NOTICE THE VERY FOU NDATION FOR JURISDICTION. SUCH NOTICE IS REQUIRED TO BE SERV ED ON THE PERSON WHO IS FOUND TO HAVE UNDISCLOSED INCOME. IT(SS) NO.34/MUM/2004 CO NO.291/MUM/2007 4 SECTION 158BC PROVIDES FOR ENQUIRY AND ASSESSMENT. AFTER THE RETURN IS FILED, CLAUSE (B) OF SECTION 158BC PROVIDES TH AT THE ASSESSING OFFICER SHALL PROCEED TO DETERMINE THE UND ISCLOSED INCOME OF THE BLOCK PERIOD IN THE MANNER LAID DOWN IN SECTION 158BB AND THE PROVISIONS OF SECTION 142, SUB-SECTIONS(2) AN D (3) OF SECTION 143, SECTION 144 AND SECTION 145 SHALL, SO FAR AS M AY BE, APPLY. THIS INDICATES THAT THIS CLAUSE ENABLES THE AS SESSING OFFICER, AFTER THE RETURN IS FILED, TO COMPLETE THE ASSESSMENT U/S.143(2) BY FOLLOWING THE PROCEDURE LIKE ISSUE OF NO TICE U/S.143(2)/142. THIS DOES NOT PROVIDE ACCEPTING THE RET URN AS PROVIDED U/S.143(1)(A) : THE OFFICER HAS TO COMPLETE THE ASSESSMENT U/S,.143(3) ONLY. IF AN ASSESSMENT IS TO BE COMPLETED U/ S.143(3) R.W.S. 158BC, NOTICE U/S.143(2) SHOULD BE ISSUED WITHIN ON E YEAR FROM THE DATES OF FILING OF THE BLOCK RETURN. OMISS ION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE U/S.143(2) CAN NOT BE A PROCEDURAL IRREGULARITY AND IS NOT CURABLE. THEREFORE, THE REQUIREMENT OF NOTICE U/S.143(2) CANNOT BE DISPENSED WITH . 9. RESPECTFULLY FOLLOWING THE JUDGEMENTS OF THE HON BLE SUPREME COURT WE HAVE TO NECESSARILY HOLD THAT THE ASSESSMENT IN QUESTION IS BAD IN LAW AND HENCE HAS TO BE QUASHED. THUS WE ALLOW THIS G ROUND OF CROSS OBJECTION. 10. AS THE CROSS OBJECTION HAS BEEN ALLOWED ON THE GROUND OF JURISDICTION WE NEED NOT ADJUDICATE THE REVENUE APPEAL AS IT WOU LD BE ACADEMIC EXERCISE. 11. IN THE RESULT, THE CROSS OBJECTION OF THE ASSES SEE IS ALLOWED AND REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 18 TH DAY OF JUNE, 2010. SD/- (R.V. EASWAR) (PRESIDENT) SD/- (J.SUDHAKAR REDDY) (ACCOUNTANT MEMBER) MUMBAI, DATED 18 TH JUNE, 2010. JANHAVI IT(SS) NO.34/MUM/2004 CO NO.291/MUM/2007 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-XXIV, MUMB AI 4. COMMISSIONER OF INCOME TAX, CITY-XXIV, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH G, MUMBAI //TRUE COPY// BY ORDER ASSTT. 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