Kishor K. Jain, Ahmedabad V. The ITO, Ward-4(2)(2), Ahmedabad

ITSSA 392/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4907 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 08-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Document seized
• Section: 143(3); 153A; 22; 153C; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD [CONDUCTED THROUGH VIRTUAL AT AHMEDABAD] BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER& MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.(SS)A. NO. 392/AHD/2019 (ASSESSMENT YEARS: 2011-12) KISHOR K JAIN 5, SASHI SHOPPING CENTRE B/S. SWAMI NARAYAN AVENUE NR. AMJALI CINEMA BHHATTA, PALDI, AHMEDABAD-380007 VS. ITO WARD-4(2)(2), AHMEDABAD [PAN NO. AAUPJ3458R] ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI PRAKASH D SHAH, AR REVENUE BY : SHRI VINOD TANWANI, CIT DR DATE OF HEARING 22 . 0 9 .20 2 1 DATE OF PRONOUNCEMENT 29 . 0 9 . 20 2 1 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL FILED BY THE ASSESSEE IS DIRECT ED AGAINST THE ORDER DATED 10.06.2019 PASSED BY THE COMMISSIONER O F INCOME TAX (APPEALS)-4, AHMEDABAD ARISING OUT OF THE ORDER DAT ED 21.12.2018 PASSED BY THE ITO, WARD 4(2)(2), AHMEDABAD UNDER SECTION 143(3) R.W.S. 153C OF THE INCOME TAX ACT, 1961 (HEREINAFTE R REFERRED AS TO THE ACT) FOR THE ASSESSMENT YEAR (A.Y.) 2011-12 WHEREB Y AND WHEREUNDER THE ADDITION OF RS. 5,00,000/- UNDER SECTION 69 OF THE ACT ON ACCOUNT OF SIPL MADE BY THE LD. AO HAS BEEN CONFIRMED. 2. WE HAVE HEARD THE RESPECTIVE PARTIES AND ALSO PE RUSED THE RELEVANT MATERIALS AVAILABLE ON RECORD. IT(SS)A NO.392/AHD/2019 KISHOR K JAIN VS. ITO ASST.YEARS 2011-12 - 2 - 3. THE BRIEF FACTS LEADING TO THE CASE IS THIS THAT A SEARCH WAS CONDUCTED IN THE CASE OF ONE SARTHAV INFRASTRUCTURE PVT. LTD. GROUP ON 04.12.2014 AT THE RESIDENCE OF SHRI ANIL HIRALAL SHAH WHERE CERTA IN DOCUMENTS WERE SEIZED IN THE FORM OF E-DATA FROM THE RESIDENCE OF ONE SANKET JITENDRABHAI SHAH (VORA) CONTAINING DETAILS REGARDING RECEIPT AN D PAYMENT OF CASH; MAJORITY OF PAYMENTS WERE SHOWN TOWARDS PURCHASE OF LAND AND DETAILS WHEREOF WERE ALSO MENTIONED THEREIN. IT WAS FOUND FROM THE SAID DATA THAT THE ASSESSEE HAS PAID RS. 5,00,000/- IN CASH FOR HI S INVESTMENT IN ABHISHREE ORCHID SCHEME OF M/S. SARTHAV INFRASTRUCTURE PVT. L TD. ON THE BASIS OF SEARCH DATA OF EXCEL SHEET CCCCC.XLS THE LD. AO O F THE SEARCHED PERSON RECORDED SATISFACTION THAT THE SAID DATA SHEET I.E. THE DOCUMENT SEIZED FROM THE SEARCH PREMISES UNDER SECTION 153A PERTAINS TO THE ASSESSEE AND THE CASE IS FIT TO PROCEED AGAINST THE ASSESSEE UNDER S ECTION 153C OF THE ACT. 4. THE ASSESSEE JOINS ON THIS ISSUE THAT THE SEARCH WAS CONDUCTED ON 04.12.2014 WHEN THE PREVAILING PROVISION UNDER SECT ION 153C REQUIRES THE SEIZED OR REQUISITIONED BELONGS TO PERSON OTHER THA N THE PERSON REFER TO IN SECTION 153A AND NOT PERTAINS TO WHICH WAS SUBSEQUE NTLY AMENDED WITH THE WORDS PERTAINS OR PERTAIN TO IN PLACE AND STEAD OF BELONGS OR BELONG TO. THE ASSESSEES CASE IS THIS THAT THE SATISFACTION, THEREFORE, SHOULD HAVE BEEN RECORDED AS TO THE SEIZED MATERIAL BELONGS TO THE ASSESSEE AND NOT PERTAINS TO ASSESSEE. IN FACT, AN IDENTICAL MATTER ARISING OUT OF THE SAME SEARCH CONDUCTED BY REVENUE WERE CHALLENGED BY THE ASSESSEE THEREIN WHICH TRAVELLED THROUGH THE TRIBUNAL. THE TRIBUNAL ON THE SAME ISSUE HAS BEEN PLEASED TO DECIDE THE MATTER IN FAVOUR OF THE ASSESSEE HOLDING THAT PRE- AMENDED PROVISION OF UNDER SECTION 153C IS APPLICAB LE AND IF THE CONDITION IT(SS)A NO.392/AHD/2019 KISHOR K JAIN VS. ITO ASST.YEARS 2011-12 - 3 - PRECEDENT AS CONTAINED IN THE SAID PRE-AMENDED NOT SATISFIED THE IMPUGNED NOTICE UNDER SECTION 153C IS BAD IN LAW AND LIABLE TO BE QUASHED CONSIDERING THE DATE OF SEARCH CONDUCTED ON 04.12.2 014. WE HAVE CONSIDERED THE SAID JUDGMENT PASSED IN THE CASE OF PARTHIV MAHENDRAKUMAR MEHTA SIDDHAVHAL VS. DCIT (IN ITA NO. 372/AHD/2019 FOR A.Y. 2011-12), THE RELEVANT DISCUSSION WHEREOF IS A S FOLLOWS:- 6. THE LD. AO PROCEEDED AGAINST THE ASSESSEE UNDER SECTION 153C OF THE ACT ON THIS PRETEXT THAT THE SEIZED DOCUMENT PERTAINS TO T HE ASSESSEE AS IT APPEARS AT PAGE 6 PARAGRAPH 15 OF THE ASSESSMENT ORDER. IN THIS REGA RD, WE WOULD LIKE TO HIGHLIGHT THE RELEVANT LEGAL PROVISION PREVAILING DURING THE RELE VANT PERIOD. THE SEARCH TOOK PLACE ON 04.12.2014 AT THAT MATERIAL POINT OF TIME THE PR OVISION OF SECTION 153C WAS AS FOLLOWS:- PRE-AMENDMENT: 153C. [(1)NOTWITHSTANDING ANYTHING CONTAINED IN SE CTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWEL LERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS S EIZED 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 ASS ETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESS ING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN A CCORDANCE WITH THE PROVISIONS OF SECTION 153A :] XXX XX XXX THE SAID SECTION HAS BEEN AMENDED ON 01.06.2015 WI TH FOLLOWING CHANGE: POST-AMENDMENT: 153C. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SEC TION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, WHERE THE ASSESSING OFFICER IS SATISFIED THAT, (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABL E 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, R ELATES TO, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTI ON 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITI ONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER S UCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE IT(SS)A NO.392/AHD/2019 KISHOR K JAIN VS. ITO ASST.YEARS 2011-12 - 4 - NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTH ER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSES SING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT 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 ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUI SITION IS MADE AND FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SU B-SECTION (1) OF SECTION 153A: XXX XX XXX 7. BY SUCH AMENDMENT THE SCOPE OF SECTION 153C HAS BEEN WIDENED. UNDER THE OLD PROVISION, IF ANY MONEY, BULLION, JEWELERRY, AS SETS OR DOCUMENTS BELONGING TO AN ASSESSEE WAS FOUND DURING THE COURSE OF SEARCH OR R EQUISITIONED, ONLY THEN SECTION 153C WOULD TRIGGER AGAINST THAT ASSESSEE. HOWEVER, BY ENLARGING THE SCOPE OF SECTION 153C, THE NEW AMENDED PROVISION PROVIDES TH AT IF ANY INCRIMINATING INFORMATION WAS FOUND IN THOSE DOCUMENTS RELATING T O 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 BELONGED TO THE ASSESSEE AND NOT PE RTAINS TO THE ASSESSEE. 8. IN FACT, IT IS EVIDENT ON RECORD THAT THE LD. AO OF THE SEARCHED PERSON NAMELY SARTHAV INFRASTRUCTURE PVT. LTD. RECORDED SATISFACT ION THAT THE DOCUMENTS PERTAINED TO SHRI PARTHIV MAHENDRAKUMAR MEHTA, THE ASSESSEE HERE IN, WHICH HAS BEARING ON THE DETERMINATION OF TOTAL INCOME FOR A.Y. 2009-10 TO 2 015-16. RELYING UPON THIS PARTICULAR SATISFACTION NOTE THE LD. AO IN THE INST ANT CASE RECORDED SATISFACTION THAT THE DOCUMENTS FOUND DURING THE SEARCH I.E. HARD DIS K, THE ENTRIES RECORDED IN THIS EXCEL SHEETS NAMELY, CCCCC.XLS FOUND AT THE RESIDEN CE OF ANIL HIRALAL SHAH BELONGS TO THE ASSESSEE AND INITIATED PROCEEDINGS UNDER SEC TION 153C R.W.S. 153A OF THE ACT. 9. RELEVANT TO MENTION THAT THE DOCUMENTS RELIED UP ON BY THE LD. AO DO NOT CONTAIN ANY NAME OF THE ASSESSEE AS IT APPEARS FROM THE RECORD THOSE WERE SEIZED DURING THE SEARCH PROCEEDING CONDUCTED AT THE PREMI SES 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 C ONTAINED IN THE SAID PRE-AMENDED PROVISION IF NOT SATISFIED THE IMPUGNED NOTICE UNDE R SECTION 153C IS BAD IN LAW AND LIABLE TO BE QUASHED. IN THIS ASPECT WE HAVE ALSO CONSIDERED THE JUDGMENT PASSED BY THE HONBLE JURISDICTIONAL HIGH COURT AS RELIED UPO N 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 TH AT THE TRIGGER FOR INITIATING ACTION WHETHER UNDER SECTION 153A OR 153C OF THE AC T IS THE SEARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A OF TH E ACT AND THE STATUTORY PROVISIONS AS EXISTING ON THE DATE OF THE SEARCH WO ULD BE APPLICABLE. THE MERE FACT THAT THERE IS NO LIMITATION FOR THE ASSES SING OFFICER OF THE SEARCHED PERSON TO RECORD SATISFACTION WILL NOT CHANGE THE T RIGGER POINT, NAMELY, THE DATE OF THE SEARCH. THE SATISFACTION OF THE ASSESSI NG OFFICER OF THE SEARCHED IT(SS)A NO.392/AHD/2019 KISHOR K JAIN VS. ITO ASST.YEARS 2011-12 - 5 - PERSON WOULD BE BASED ON THE MATERIAL SEIZED DURING THE COURSE OF THE SEARCH OR REQUISITION AND NOT THE ASSESSMENT MADE IN THE C ASE OF THE SEARCHED PERSON, THOUGH HE MAY NOTICE SUCH FACT DURING THE C OURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, WHETHER THE SATISFACTION IS RECORDED IMMEDIATELY AFTER THE SEARCH, AFTER INITIATION OF PROCEEDINGS U NDER 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 , VIZ., THE SEARCH AND, THEREFORE, THE STATUTORY PROVISION AS PREVAILING ON THAT DAY WOULD BE APPLICABLE.' 10. THUS, TAKING IN TO CONSIDERATION THE ENTIRE ASP ECT OF THE MATTER WE FIND THAT THE AUTHORITIES BELOW HAVE FAILED TO SATISFY THE CO NDITION PRECEDENT PRESCRIBED UNDER SECTION 153C(PRE-AMENDED) BY RECORDING SATISFACTION THAT THE MATERIAL LIKE EXCEL SHEETS NAMELY, CCCCC.XLS SEIZED DURING THE SEARCH A T THE RESIDENCE OF SHRI ANIL HIRALAL SHAH BELONGED TO THE ASSESSEE. HENCE, THE IMPUGNED NOTICE UNDER SECTION 153C IS NOT IN ACCORDANCE WITH LAW, THE SAME IS BAD AND LIABLE TO BE QUASHED. WE ORDER ACCORDINGLY. THE ADDITION MADE IN CONSEQUENC E THERETO ALSO FAILS. THE ASSESSEES APPEAL IS, THUS, ALLOWED. 5. IN THE ABSENCE OF ANY CHANGED CIRCUMSTANCES CONS IDERING THE IDENTICAL FACT WE DO NOT FIND ANY REASON TO DEVIATE FROM THE OBSERVATION MADE BY THE COORDINATE BENCH AND RESPECTFULLY RELYI NG UPON THE SAME WE QUASHED THE PROCEEDING INITIATED UNDER SECTION 153C AGAINST THE ASSESSEE FOR NOT SATISFYING THE PRECONDITION LAID DOWN IN TH E PROVISION UNDER SECTION 153(C) OF THE ACT AS MENTIONED HEREIN ABOVE. 6. IN THE RESULT, THE APPEAL PREFERRED BY THE ASSES SEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 29/09/2021 SD/- SD/- (WASEEM AHMED) (MS. MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 29/09/2021 TANMAY, SR. PS TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT IT(SS)A NO.392/AHD/2019 KISHOR K JAIN VS. ITO ASST.YEARS 2011-12 - 6 - 4. ( ) / THE CIT(A)- 5. , ! ' , #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD 1. DATE OF DICTATION 22.09.2021 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 23.09.2021 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 28 .09.2021 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .09.2021 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S .09.2021 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .09.2021 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