The ACIT, Central Circle 1, Baroda V. Smt. Lomharshini A. Patel, Baroda

ITSSA 373/AHD/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3238 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 24-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Principle of natural justice
• Section: 234B; 132; 154

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER !# I.T.A. NO. 373/AHD/2013 ( / ASSESSMENT YEAR : 2009-10) ASSTT. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, BARODA # VS. SMT. LOMAHARSHINI A. PATEL D/9, AMRUTA BUNGLOWS, NAVDEEP SOCIETY. B/H GOKULDHAM SOCIETY, MANJALPUR, BARODA $ # % & # PAN/GIR NO. : AGCPK 1023 H ( !$' / APPELLANT ) .. ( ($' # RESPONDENT ) !$') # APPELLANT BY : SHRI KEYUR PATEL, SR.DR ($'*) / RESPONDENT BY : SHRI URVASHI SODHAN, AR + ,*-. / DATE OF HEARING 06/03/2017 /012*-. / DATE OF PRONOUNCEMENT 29/05/2017 3# O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IV, AHMEDABAD, DATED 17/07/2013 FOR THE ASSESSMENT YEAR (AY) 2009-10. 2. REVENUE HAS TAKEN THE FOLLOWING GROUNDS OF APPEA LS: THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE ASSESSING OFFICER TO GIVE CREDIT OF RS.16,21,300/- TO THE ASSESSEE FOR THE ITA NO.373/AHD/ 2013 ACIT VS. SMT. LOMAHARSHINI A. PATEL ASST.YEAR 2009-10 - 2 - PAYMENT OF SELF ASSESSMENT TAX U/S.140A(3) OF THE I T ACT OUT OF THE DEPOSITS MADE BY THE ASSESSEE IN THE PD ACCOUNT OF THE CIT FOR THE RELEASE OF GOLD ETC. WITH EFFECT FROM THE DATE OF F ILING OF RETURNS OF INCOME AND FURTHER DIRECTED OF CHARGING OF INTEREST AFTER MAKING THIS ADJUSTMENT. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- (I) A SEARCH ACTION U/S. 132 OF THE ACT WAS CONDUCT ED AT THE PREMISES OF THE APPELLANTS ON 10-09-2009. (II) DURING THE COURSE OF SEARCH, CASH, JEWELLERY, BULLION ETC. WERE SEIZED. THE SEIZED GOLD JEWELLERY/BULLION WERE RELEASED ON PAYMENT OF CORRESPONDING AMOUNT BY WAY OF CHEQUES/DEMAND DRAFTS. THE DETAILS OF THE SAME ARE AS UNDER: SR. NO. NAME OF THE DEPARTMENT CASH SEIZED (RS.) PAYMENT MADE BY WAY OF DDS/CHEQUE FOR THE RELEASE OF SEIZED GOLD ORNAMENTS (RS.) 1. SHRI GIRDHARBHAI RAMJIBHAI PATEL 10,80,000/- 2. SMT. MADHUBEN DALSUKHBHAI PATEL - RS. 6,28,000/- 3. SMT. LOMHARSHINI AMITBHAI PATEL - RS.16,21,300/- 4. (I) SMT. PRAGNABEN KIRITBHAI PATEL - RS. 8,80,000/- RS.36,05,000/- (II) KIRITBHAI DALSUKHBHAI PATEL (HUSBAND) RS.27,25,000/- ITA NO.373/AHD/ 2013 ACIT VS. SMT. LOMAHARSHINI A. PATEL ASST.YEAR 2009-10 - 3 - (III) THE APPELLANTS VIDE LETTERS DATED 24-06-2010 HAVE REQUESTED FOR ADJUSTMENT OF SEIZED CASH / AMOUNT PAID FOR REL EASE OF GOLD AGAINST TAX LIABILITY OF A.Y. 2009-10. (IV) IN THE RETURNS OF INCOME FILED BY THE APPELLAN TS, THE CREDIT OF CASH SEIZED / PAYMENTS MADE FOR RELEASE OF GOLD ORN AMENTS HAVE BEEN CLAIMED AS PAYMENT OF ADVANCE TAX AS ON 1 0-09- 2009 I.E. THE DATE OF SEARCH. (V) THE AO DID NOT CONSIDER THE SEIZED CASH/PAYMENT MADE FOR RELEASE OF JEWELLERY TOWARDS PAYMENT OF ANY TAX LIA BILITY AND ACCORDINGLY CHARGED INTEREST U/S 234A / 234B / 234C OF THE ACT WHILE PROCESSING THE RETURNS U/S 143(1) OF THE ACT. (VI) THE APPELLANTS FILED APPLICATION U/S 154 OF TH E ACT FOR RECTIFICATION OF MISTAKE REGARDING ADJUSTMENT OF SE IZED CASH/PAYMENT MADE FOR RELEASE OF JEWELLERY AGAINST THE TAX LIABILITY OF THE APPELLANTS. (VII) THE AO DIDN'T AGREE TO THE REQUEST OF THE APP ELLANTS AND DISPOSED OFF THE APPLICATIONS FILED U/S 154 OF THE ACT. (VIII) APPELLANT STATED THAT AO HAS NOT PROVIDED AN Y REASON WHATSOEVER FOR NOT GRANTING THE APPELLANTS CREDIT O F TAXES DULY ALLOWABLE AS PER SECTION 132B OF THE ACT. ITA NO.373/AHD/ 2013 ACIT VS. SMT. LOMAHARSHINI A. PATEL ASST.YEAR 2009-10 - 4 - (IX) THE APPELLANTS HAVE ALREADY FILED LETTERS BEFO RE THE DY.CIT, CENTRAL CIRCLE-1, BARODA FOR ADJUSTMENT OF AMOUNT A GAINST APPELLANT'S TAX LIABILITY. IT WAS STATED IN THE ABO VE MENTIONED LETTER THAT THE SAID AMOUNT MAY BE USED AGAINST ADJ USTMENT OF TAX LIABILITY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 132B OF THE ACT. (X) THE APPELLANTS ALSO FILED UNCONDITIONAL IRREVOC ABLE CONFIRMATION REGARDING ADJUSTMENT OF CASH SEIZED/AM OUNT PAID FOR RELEASE OF GOLD ORNAMENTS SEIZED DURING TH E COURSE OF SEARCH ON 10-09-2009 AGAINST THE TAX LIABILITY F OR AY 2009-10. LEARNED AO DID NOT CONSIDER THE SUBMISSION MADE BY THE APPELLANT AND TOTAL INCOME AS PER RETURN OF INCOME FILED UNDE R SECTION 153(A) OF RS.1,09,70,560/- WAS DETERMINED. 4. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LEARNED CIT(A). THE DECISION OF THE LEAR NED COMMISSIONER OF INCOME TAX (A) IS REPRODUCED AS UNDER: 6. I HAVE CAREFULLY CONSIDERED THE SUBMISSION MADE BY THE APPELLANT AND GONE THROUGH THE ORDER UNDER SECTION 154 PASSED BY THE ASSESSING OFFICER AND IT WAS FURTHER OBSERVED BY THE LEARNED CIT(A). 6.1 IT IS AN UNDISPUTED FACT THAT CASH OF RS.10,80, 000/- WAS SEIZED U/S. 132 OF THE ACT IN THE CASE OF SHRI GIRDHARBHAI RAMJIBHAI PATEL ON ITA NO.373/AHD/ 2013 ACIT VS. SMT. LOMAHARSHINI A. PATEL ASST.YEAR 2009-10 - 5 - 10-09-2009. FURTHER, PAYMENTS HAVE BEEN MADE IN THE PD ACCOUNT FOR RELEASE OF GOLD JEWELLERY ETC. IN OCTOBER, 2009 VID E DDS/CHEQUE AS PER THE DETAILS AS UNDER: SR.NO. NAME OF THE APPELLANT PAYMENT MADE IN OCT, 2009 1. SMT. MADHUBEN DALSUKHBHAI PATEL RS. 6,28,000/ - 2. SMT. LOMHARSHINI AMITBHAI PATEL RS.16,21,300/- 3. SMT. PRAGNABEN KIRITBHAI PATEL RS.36,05,000/- IN THE FORWARDING LETTER DTD. 24/06/210 IT WAS SUBM ITTED THAT THE AMOUNT DEPOSITED IN PD ACCOUNT MAY BE USED FOR ADJUSTMENT AGAINST TAX LIABILITY. IN THE CASE OF SHRI GIRDHARBHAI RAMJIBHA I PATEL, THE RELEVANT PORTION OF THE SAID LETTER IS REPRODUCED AS UNDER: I REQUEST TO YOUR GOODSELVES THAT OUT OF THE ABOVE CASH SEIZED DURING THE COURSE OF SEARCH FROM MY POSSESSION, CAS H AMOUNTING TO RS.10,80,000/- TO BE ADJUST AGAINST MY TAX LIABI LITY FOR THE ASSESSMENT YEAR 2009-10. IN THE ABOVE MATTER IT MAY NOT BE OUT OF PLACE TO S TATE THAT ADJUSTMENT OF THE SAME WAS SOUGHT FOR IMMEDIATELY A FTER SEARCH. HENCE, THIS IS A FORMAL REQUEST QUANTIFYING THE TAX LIABILITY TO THE ADJUSTED ON THE BASIS OF THE RETURN WHICH IS BEING FILED. KINDLY TREAT THIS REQUEST AS UNCONDITIONAL AND IRREVOCABLE AND DO THE NEEDFUL AT YOUR END. ANY FORMALITIES IF REQUIRED FR OM OUR SIDE MAY KINDLY BE INTIMATED US SO THAT THE SAME CAN BE COMPLIED. SIMILAR SUBMISSIONS WERE MADE IN THE CASE OF OTHER APPELLANTS. 6.2 AS PER LEARNED CIT(A), THE LEARN APPELLANTS HAV E CLAIMED FOR THE ADJUSTMENT OF THE SEIZED CASH AGAINST THE TAX PAYAB LE AS PER RETURNS OF INCOME. THUS, THE TAX LIABILITY OF THE APPELLANTS H AS COME INTO EXISTENCE AS PER SECTION 140A(3) OF THE ACT FROM THE DATE OF FILING THE RETURNS OF INCOME. IN HIS OPINION, THE AO SHOULD HAVE ADJUSTED THE SEIZED CASH AS WELL AS PAYMENT MADE FOR RELEASE OF GOLD ORNAMENTS AGAINST TAX LIABILITY OF THE APPELLANTS WHICH CAME INTO EXISTENCE U/S. 14 0A(3) OF THE ACT W.E.F. DATE OF FILING OF RETURNS OF INCOME. THE NON -ADJUSTMENT OF THE SEIZED CASH/PAYMENT MADE FOR RELEASE OF GOLD JEWELL ERY ETC. AGAINST THE TAX LIABILITY U/S. 140A(3) OF THE ACT, ON THE PART OF THE AO, AND CHARGING ITA NO.373/AHD/ 2013 ACIT VS. SMT. LOMAHARSHINI A. PATEL ASST.YEAR 2009-10 - 6 - OF INTEREST FOR NON-PAYMENT OF SELF-ASSESSMENT TAX WHEN THE CORRESPONDING AMOUNT OF SEIZED CASH IS IN POSSESSIO N OF DEPARTMENT, IS SIMPLY AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 6.3. IN VIEW OF THE ABOVE AND CONSIDERING THE FACT THAT THE TAX LIABILITY UNDER SECTION 140A(3) CAME INTO EXISTENCE W.E.F DAT E OF FILING OF RETURN OF INCOME, THE AO WAS DIRECTED TO GIVE CREDIT TO TH E APPELLANT FOR THE PAYMENT OF SELF ASSESSMENT TAX U/S. 140A(3) OUT OF THE SEIZED CASH/PAYMENTS MADE FOR THE RELEASE OF GOLD ETC. WIT H EFFECT FROM THE DATE OF FILING OF RETURNS OF INCOME IN THE CASE OF EACH OF THE APPELLANTS. THE AO DIRECTED TO CHARGE INTEREST U/S. 234A, 234B & 23 4C OF THE ACT AFTER MAKING ABOVE ADJUSTMENTS AND APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED BY THE LEARNED CIT(A). 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. IN SIMILAR MATTER COORDINATING BENCH IN IT(SS)A NO.375 /AHD/2013 FOR A.Y. 2009-10. THE OPERATIVE PART OF THE DECISION OF THE TRIBUNAL IS REPRODUCED HERE BELOW: DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, LEARNED DR STATED THAT LEARNED COMMISSIONER OF INCOME TAX(A) H AS ERRED IN LAW AND ON FACT IN DIRECTING THE ASSESSING OFFICER TO G IVE CREDIT OF RS. 36,05,000/- FOR PAYMENT OF SELF ASSESSMENT TAX U/S. 140A(3) OF THE ACT OUT OF THE DEPOSIT MADE BY THE ASSESSEE IN THE PD A CCOUNT OF THE COMMISSIONER OF INCOME TAX FOR THE RELEASE OF GOLD ETC. ON OTHER HAND, THE ID. COUNSEL RELIED ON THE ORDER OF THE LD. COMM ISSIONER OF INCOME TAX(A) AND ALSO PLACED RELIANCE ON THE DECISION OF ITAT SMC BENCH AHMEDABAD ITA NO. 2824/AHD/2013 DATED 30/09/2016 SH RI ANIL KUMAR C. RADHANPURA VS. DCIT. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERI AL ON RECORD CAREFULLY. WE FIND THAT THE ASSESSEE HAD MADE APPLI CATION TO THE ASSESSING OFFICER FOR ADJUSTMENT OF THE SEIZED CASH AGAINST THE TAX PAYABLE AS PER RETURN OF INCOME. WE ALSO NOTICED TH AT THE ASSESSING OFFICER HAS NOT STATED ANY REASON FOR REJECTION OF RECTIFICATION APPLICATION OF THE ASSESSEE MADE U/S 154 OF THE ACT . WE HAVE ALSO PERUSED THE PROVISION OF SECTION 132B OF THE ACT AN D HAVE NOTED THAT EXPLANATION 2 TO PROVISION OF SECTION 132B OF THE A CT WAS INTRODUCED W.E.F. 01-06-2013 IN WHICH IT IS DECLARED THAT THE EXISTING LIABILITY DOES ITA NO.373/AHD/ 2013 ACIT VS. SMT. LOMAHARSHINI A. PATEL ASST.YEAR 2009-10 - 7 - NOT INCLUDE ADVANCE TAX PAYABLE IN ACCORDANCE WITH THE PROVISION OF PART C OF CHAPTER XVII. WE HAVE SEEN THAT ASSESSEE' S APPLICATION WAS NOT ADJUDICATED WITH PROPER REASON BY THE ASSESSING OFFICER. WE HAVE ALSO PERUSED THE DECISION OF THE CO-ORDINATE BENCH OF THE ITAT, AHMEDABAD IN THE CASE OF KANISHKA PRINTS PVT. LTD V S. ACIT 34 TAXMANN.COM 307 (2013) IN WHICH IT WAS HELD THAT EX PLANATION HAS BEEN MADE APPLICABLE W.E.F. 01-06-2013. WE FIND THAT THE LD. COMMISSIONER OF INCOME TAX(A) HAS GIVEN COMPLETE FINDING IN THE CASE OF THE ASSESSEE WHICH INDICATES THAT THE TAX LIABILITY U/S. 140A(3) HAS COME INTO EXISTENCE W.E.F. DATE OF FILING OF RETURN OF INCOME AND LEARNED CIT(A) HAS CORRECTLY DIRECTED THE ASSESSING OFFICER TO GIV E CREDIT TO THE ASSESSEE FOR THE PAYMENT OF SELF ASSESSMENT TAX U/S . 140A(3) OUT OF THE SEIZED CASH PAYMENT MADE FOR THE RELEASE OF GOLD ET C. IN VIEW OF THE ABOVE FACTS AND FINDINGS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LEARNED COMMISSIONER OF INCOME TAX( A). 6. RESPECTFULLY, FOLLOWING OUR OWN COORDINATING BENCH S DECISION, WE DISMISS THE APPEAL FILED BY THE REVENUE. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 29 / 05 /201 7 SD/- SD/- ( ) 4 5 ( N.K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 29/05/2017 PRITI YADAV, SR.PS ITA NO.373/AHD/ 2013 ACIT VS. SMT. LOMAHARSHINI A. PATEL ASST.YEAR 2009-10 - 8 - !'#$ %$' # COPY OF THE ORDER FORWARDED TO : 1. !$' / THE APPELLANT 2. ($' / THE RESPONDENT. 3. 67- + 8- / CONCERNED CIT 4. + 8- 4!5 / THE CIT(A)-IV, AHMEDABAD. 5. 9:;-67 !.!672 ! / DR, ITAT, AHMEDABAD 6. ;<=, # GUARD FILE. & ' / BY ORDER, (9-- //TRUE COPY// (/' )* ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD TRUE COPY 1. DATE OF DICTATION ..19/05/2017 (DICTATION-PAD 5 PAGES ATTACHED AT THE END OF THIS APPEAL- FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 22/05/2017 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 26/05/2017 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER