Parthiv Mahendrakumar Mehta, Ahmedabad V. The DCIT, Circle-4(2), Ahmedabad

ITSSA 372/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6284 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 16-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Document seized; Documents seized
• Section: 143(3); 153A; 201; 13; 153C; 132; 12; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD [CONDUCTED THROUGH VIRTUAL AT AHMEDABAD] BEFORE SHRI WASEEM AHMED , ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER I .T. (SS) A. NO . 372 /AHD/201 9 (ASSESSMENT YEAR S : 201 1 - 1 2 ) PARTHIV MAHENDRAKUMAR MEHTA SIDDHACHAL, 2 ND FLOOR, NR. DOOR DARSHAN CENTER, DRIVE IN ROAD, AHMEDABAD VS. DCIT CIRCLE - 4(2), AHMEDABAD [ PAN NO. AGQPM6988H ] ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S. N. DIVATIA , A R REVENUE BY : SHRI MOHD. USMAN , CIT DR DATE OF HEARING 04 . 0 8 .20 2 1 DATE OF PRONOUNCEMENT 05 . 0 8 . 20 2 1 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 13 .0 5 .201 9 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 4 , AHMEDABAD ARISING OUT OF THE ORDER DATED 01 . 10 .201 8 PASSED BY THE DC IT, CIRCLE 4 ( 2 ), AHMEDABAD UNDER S ECTION 143(3) R.W.S. 153C OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS TO THE ACT ) FOR THE ASSESSMENT YEAR (A.Y.) 201 1 - 1 2. 2. THE BRIEF FACTS LEADING TO THE CASE IS THIS THAT A SEARCH UNDER SECTION 132(1) OF THE ACT WAS CONDUCTED AT THE RESIDENCE OF SHRI ANIL HIRALAL SHAH ON 04.12.2014 W HEREFROM CERTAIN DOCUMENTS INTER ALIA BEING DATA FROM ANILALIENWARE \ PRESENT FILE \ XLS FILES IN THE SHEET NO. 1 OF IT (SS) A NO. 372 /AHD/201 9 PARTHIV MAHENDRAKUMAR MEHTA V S. DCIT ASST.YEAR S 20 1 1 - 1 2 - 2 - MS. EXCEL FILE NAMED CCCCC.XLS WAS SEIZED. THE SAME SHEET IN THE FORM OF E - DATA WAS ALSO SEIZED FROM THE RESIDENCE OF SANKET JITENDRABHAI SHAH (VORA) DURING THE COURSE OF SEARCH CONDUCTED ON THE SAME DATE I.E. 04.12.2014. THE SHEE T CONTAINS RECORD OF VARIOUS RECEIPTS AND PAYMENT MADE DURING THE PERIOD 02.04.2010 TO 26.08.2010; THE ENTRIES RECORDED THEREIN ARE CASH RECEIPTS OF PAYMENTS WHERE IN CODING HAS BEEN USED. IT WAS FURTHER FOUND THAT ON THE RECEIPT SIDE VARIOUS ENTRIES HA VE BEEN RECORDED WHEREIN IN THE NARRATION NAME OF A PERSON, A NUMBER OF NAME PROJECT DEVELOPED OR BEING DEVELOPED BY M/S. SARTHAV INFRASTRUCTURE PVT. LTD. HAS BEEN RECORDED. THE LD. AO OF THE SEARCHED PERSON HAS DRAWN A SATISFACTION NOTE THAT SUCH DOCUMENTS PERTAIN ED TO THE ASSESSEE BEFORE US, SHRI PARTHIV MAHENDRAKUMAR MEHTA WHICH HAS BEARING ON DETERMINATION OF TOTAL INCOME FOR A.Y. 2009 - 10 TO 2015 - 16 AND FOUND IT A FIT CASE FOR INITIATING PROCEEDING UNDER SECTION 153C R.W.S. 153A OF THE ACT AND NOTICES ACC ORDINGLY WERE ISSUED. 3. LATER ON P URSUANT TO THE NOTICE DATED 31.03.2018 ISSUED UNDER SECTION 153C BY THE REVENUE. T HE ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2011 - 12 ON 26.04.2018 DECLARING TOTAL INCOME AT RS. 19,54,890/ - . THE LD. AO ISSUED NOTIC E UNDER SECTION 143(2)/142(1) R.W.S. 153C ON 14.08.2018 DIRECTING THE ASSESSEE TO EXPLAIN THE SOURCE OF MONEY OF RS. 5 LAKHS PAID FOR PURCHASE OF PLOT OF ABHISHREE ORCHID SCHEME OF SIPL. THE LD. AO FINALLY CONCLUDED THE PROCEEDING BY MAKING ADDITION OF RS . 5 LAKH TO THE TOTAL INCOME OF THE ASSESSEE HOLDING THE SAID AMOUNT PAID FOR PLOT NO. 35 OF DEVELOPED BY SARTHAV INFRASTRUCTURE LTD. IS NOTHING BUT UNDISCLOSED INCOME OF THE ASSESSEE. IT (SS) A NO. 372 /AHD/201 9 PARTHIV MAHENDRAKUMAR MEHTA V S. DCIT ASST.YEAR S 20 1 1 - 1 2 - 3 - 4. THE CRUX OF THE SUBMISSIONS A S MADE BEFORE US BY THE LD. SENIOR CO UNSEL APPEARING FOR THE ASSESSEE IS THIS THAT THE SEIZED DOCUMENTS DO NOT BELONG TO THE ASSESSEE AND, THUS, PROCEEDING UNDER SECTION 153C IN RESPECT OF ASSESSEE IS NOT SUSTAINABLE IN TERMS OF THE PRE - AMENDED PROVISION OF SECTION 153C OF THE ACT. 5. THE LD. DR, HOWEVER, HAS NOT BEEN ABLE TO CONTROVERT SUCH CONTENTION OF THE ASSESSEE. 6. THE LD. AO PROCEEDED AGAINST THE ASSESSEE UNDER SECTION 153C OF THE ACT ON THIS PRETEXT THAT THE SEIZED DOCUMENT PERTAINS TO THE ASSESSEE AS IT APPEARS AT PAGE 6 PARAGRAP H 15 OF THE ASSESSMENT ORDER. IN THIS REGARD, WE WOULD LIKE TO HIGHLIGHT THE REL EV ANT LEGAL PROVISION P REVAILING DURING THE RELEVANT PERIOD. THE SEARCH TOOK PLACE ON 04.12.2014 AT THAT MATERIAL POINT OF TIME THE PROVISION OF SECTION 153C WAS AS FOLLOWS: - PRE - AMENDMENT: 153C. [(1)NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION I53A, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFI CER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A : ] XXX XX XXX THE SAID SECTION HAS BEEN AMENDED ON 01.06.2015 WITH FOLLOWING CHANGE: POST - AMENDMENT: 153C. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT, IT (SS) A NO. 372 /AHD/201 9 PARTHIV MAHENDRAKUMAR MEHTA V S. DCIT ASST.YEAR S 20 1 1 - 1 2 - 4 - (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINED THEREIN, RELATES TO, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON A ND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOU NT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB - SECTION (1) OF SECTION 153A: XXX XX XXX 7 . BY SUCH AMENDMENT THE SCOPE OF SECTION 153C HAS BEEN WIDENED . U NDER THE OLD PROVISION, IF ANY MONEY, BULLION, JEWELER RY , ASSET S OR DOCUMENTS BELONGING TO AN ASSESSEE WAS FOUND DURING THE COURSE OF SEARCH OR REQUISITIONED, ONLY THEN SECTION 153C WOULD TRIGGER AGAINST TH AT ASSESSEE. HOWEVER, BY ENLARGING THE SCOPE OF SECTION 153C, THE NEW AMENDED PROVISION PROVIDES THAT IF ANY INCRIMINATING INFORMATION WAS FOUND IN THOSE DOCUMENTS RELATING TO THE ASSESSEE OR PERTAINING TO THE ASSESSEE, THEN ACTION UNDER SECTION 153C WOULD ALSO BE TAKEN UP. SINCE SEARCH WAS CONDUCTED ON 04.12.2014 PRIOR TO THE AMENDMENT MADE IN THE PROVISION OF SECTION 153C ON 01.06.2015 , THE SATISFACTION SHOULD HAVE BEEN RECORDED AS TO THE SEIZED MATERIAL BELONG ED TO THE ASSESSEE AND NOT PERTAINS TO THE AS SESSEE. 8 . IN FACT, IT IS EVIDENT ON RECORD THAT THE LD. AO OF THE SEARCHED PERSON NAMELY SARTHAV INFRASTRUCTURE PVT. LTD. RECORDED SATISFACTION THAT THE DOCUMENTS PERTAIN ED TO SHRI PARTHIV MAHENDRAKUMAR MEHTA , THE ASSESSEE HEREIN , WHICH HAS BEARING ON TH E DETERMINATION OF TOTAL INCOME FOR A.Y. 2009 - 10 TO 2015 - 16. RELYING UPON THIS PARTICULAR SATISFACTION NOTE THE LD. AO IN THE INSTANT CASE RECORDED SATISFACTION THAT THE DOCUMENTS FOUND DURING IT (SS) A NO. 372 /AHD/201 9 PARTHIV MAHENDRAKUMAR MEHTA V S. DCIT ASST.YEAR S 20 1 1 - 1 2 - 5 - THE SEARCH I.E. HARD DISK, THE ENTRIES RECORDED IN THIS EXCEL SHEETS NAMELY, CCCCC.XLS FOUND AT THE RESIDENCE OF ANIL HIRALAL SHAH BELONGS TO THE ASSESSEE AND INITIATED PROCEEDINGS UNDER SECTION 153C R.W.S. 153A OF THE ACT. 9 . RELEVANT TO MENTION THAT THE DOCUMENTS RELIED UPON BY THE LD. AO DO NOT C ONTAIN ANY NAME O F THE ASSESSEE AS IT APPEARS FROM THE RECORD THOSE WERE SEIZED DURING THE SEARCH PROCEEDING CONDUCTED AT THE PREMISES OF THE OTHER PERSONS AND NOT THE ASSESSEE. THEREFORE , WE FIND SUBSTANCE IN THE MAIN CONTENTION OF THE ASSESSEE IS THAT SINCE THE SEARCH TOOK PLACE ON 04.12.2014 THE PRE - AMENDED PROVISION OF SECTION 153C IS APPLICABLE AND THE CONDITION PRECEDENT AS CONTAINED IN THE SAID PRE - AMENDED PROVISION IF NOT SATISFIED THE IMPUGNED NOTICE UNDER SECTION 153C IS BAD IN LAW AND LIABLE TO BE QUASHED. IN THIS ASPECT WE HAVE ALSO CONSIDERED THE JUDGMENT PASSED BY THE HON BLE JURISDICTIONAL HIGH COURT AS RELIED UPON THE BY THE LD. AR IN THE CASE OF ANIL KUMAR G. AGRAWAL VS. ACIT, REPORTED IN 418 ITR 025. RELEVANT WHEREOF IS AS FOLLOWS: - 19.15 THIS COURT IS OF THE CONSIDERED VIEW THAT THAT THE TRIGGER FOR INITIATING ACTION WHETHER UNDER SECTION 153A OR 153C OF THE ACT IS THE SEARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A OF THE ACT AND THE STATUTORY PROVISIONS AS EXISTING ON THE DATE OF THE SEARC H WOULD BE APPLICABLE. THE MERE FACT THAT THERE IS NO LIMITATION FOR THE ASSESSING OFFICER OF THE SEARCHED PERSON TO RECORD SATISFACTION WILL NOT CHANGE THE TRIGGER POINT, NAMELY, THE DATE OF THE SEARCH. THE SATISFACTION OF THE ASSESSING OFFICER OF THE SEA RCHED PERSON WOULD BE BASED ON THE MATERIAL SEIZED DURING THE COURSE OF THE SEARCH OR REQUISITION AND NOT THE ASSESSMENT MADE IN THE CASE OF THE SEARCHED PERSON, THOUGH HE MAY NOTICE SUCH FACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, WHETHER THE SATISFACTION IS RECORDED IMMEDIATELY AFTER THE SEARCH, AFTER INITIATION OF PROCEEDINGS UNDER SECTION 153A OF THE ACT OR AFTER ASSESSMENT IS FRAMED UNDER SECTION 153A OF THE ACT IN THE CASE OF THE SEARCHED PERSON, THE TRIGGER POINT REMAINS THE SAME, VI Z., THE SEARCH AND, THEREFORE, THE STATUTORY PROVISION AS PREVAILING ON THAT DAY WOULD BE APPLICABLE.' IT (SS) A NO. 372 /AHD/201 9 PARTHIV MAHENDRAKUMAR MEHTA V S. DCIT ASST.YEAR S 20 1 1 - 1 2 - 6 - 10 . THUS, TAKING IN TO CONSIDERATION THE ENTIRE ASPECT OF THE MATTER WE FIND THAT THE AUTHORITIES BELOW HAVE FAILED TO SATISFY THE CONDITION PRECEDENT PRESCRIBED UNDER SECTION 153C(PRE - AMENDED) BY RECORDING SATISFACTION THAT THE MATERIAL LIKE EXCEL SHEETS NAMELY, CCCCC.XL S SEIZED DURING THE SEARCH AT THE RESIDENCE OF SHRI ANIL HIRALAL SHAH BELONG ED TO THE ASSESSEE . H ENCE, THE IMP UGNED NOTICE UNDER SECTION 153C IS NOT IN ACCORDANCE WITH LAW, T HE SAME IS BAD AND LIABLE TO BE QUASHED. WE ORDER ACCORDINGLY . T HE ADDITION MADE IN CONSEQUENCE THERETO ALSO FAILS. THE ASSESSEE S APPEAL IS , T HUS, ALLOWED. 11 . IN THE RESULT, THE APPEAL PREFERRED BY THE ASSESSEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 05 / 0 8 /20 2 1 SD/ - SD/ - ( WASEEM AHMED ) (MS. MADHUMITA ROY ) ACCOUNTANT MEMBER JUDICIAL MEMBER (TRUE COPY) AHMEDABAD; DATED 05 / 0 8 /20 2 1 TANMAY , SR. PS TRUE COPY