Roopal Naresh Panchal, Ahmedabad V. The Dy.CIT.,Cent.Circle-1(3), Ahmedabad

ITSSA 420/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0561 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 03-02-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 20-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Principle of natural justice; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD , LH LHLH LH BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER . IT(SS)A. NOS. 417 TO 422/AHD/2011 (ASSESSMENT YEARS: 2000-01, 01-02, 02-03, 04-05, 05 -06 & 06-07) ROOPAL NARESH PANCHAL 47, KAMESHWAR TWINS, B/H MANEKBAUG HALL, AHMEDABAD AP PELLANT VS. DCIT, CENTRAL CIRCLE-1(3), AHMEDABAD RESPONDENT PAN: AFVPP3739H & IT(SS)A. NOS. 423 & 424/AHD/2011 (ASSESSMENT YEARS: 2004-05 & 2005-06) ARJAV NARESH PANCHAL 47, KAMESHWAR TWINS, B/H MANEKBAUG HALL, AHMEDABAD A PPELLANT VS. DCIT, CENTRAL CIRCLE-1(3), AHMEDABAD RESPONDENT PAN: AGZPP2986M IT(SS)A. NOS. 417 TO 422/AHD/2011 FOR A.YS.2000-01, 01-02, 02-03, 04-05 & 05-06 & 06-07 (ROOPAL N. PANCHAL VS. DCIT) & IT(SS)A NOS. 423 & 424/AHD/11 FOR A.Y. 04-05 & 05 -06 (ARJAV N. PANCHAL VS. DCIT) PAGE 2 / BY REVENUE :SHRI T. P. KRISHNAKUMAR, CIT D.R. / BY ASSESSEE : ASSESSEE /DATE OF HEARING :03.02.2015 !' /DATE OF PRONOUNCEMENT : 06 .02.2015 ORDER PER BENCH ALL THESE APPEALS FILED BY TWO ASSESSEES ON SIMILAR ISSUE FOR A.Y. 2000-01, 01-02, 02-03, 04-05, 05-06 & 06-0 7 IN CASE OF ROOPAL N. PANCHAL AND FOR A.Y. 2004-05 & 05-06 I N CASE OF ARJAV N. PANCHAL ARISING OUT FROM THE RESPECTIVE OR DER OF CIT(A)-III, AHMADABAD, ON SIMILAR GROUNDS. SO, THE Y ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAK E OF CONVENIENCE. 2. IN A.Y. 2000-01 ASSESSEE HAS FILED APPEAL ON FOL LOWING GROUNDS: 1.1 THE ORDER OF ASSTT. PASSED U/S.250 DATED 28.02 .2011 FOR A.Y.2000-01 BY CIT(A)-III, ABAD IS WHOLLY ILL EGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JU STICE. 1.2 THE IMPUGNED ORDER HAS BEEN PASSED BY CIT(A) WITHOUT GIVING ANY OPPORTUNITY OF HEARING, MUCH LES S REASONABLE OPPORTUNITY OF HEARING AND HENCE THERE COULD NOT BE ANY APPEARANCE OR SUBMISSIONS MADE ON PART OF THE APPELLANT. THE PERUSAL OF RECORD OF THE APPELLANT SHOWS THAT SHE HAS NOT BEEN GIVEN HEARING S ON VARIOUS DATES FROM 23-08-10 TO 22-02-11 AND SHRI DIPAK PANCHAL HAS NOT APPEARED ON HER BEHALF NOR DI D IT(SS)A. NOS. 417 TO 422/AHD/2011 FOR A.YS.2000-01, 01-02, 02-03, 04-05 & 05-06 & 06-07 (ROOPAL N. PANCHAL VS. DCIT) & IT(SS)A NOS. 423 & 424/AHD/11 FOR A.Y. 04-05 & 05 -06 (ARJAV N. PANCHAL VS. DCIT) PAGE 3 SHE AUTHORIZE SHRI DIPAK PANCHAL TO APPEAR ON BEHAL F OF HER. THUS THE IMPUGNED ORDER PASSED BY CIT(A] IS GROSSLY AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 2.1 THE LD. CIT (A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN UPHOLDING THAT THE PROCEEDINGS INITIATED U/S.153A WERE NOT INVALID, UNLAWFUL AND WITHOUT JURISDICTION. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT (A) OUGHT TO HAVE HELD THAT THE NOTICE ISSUED U/S.153A AND THE ASSTT. PROCEEDINGS THERE UNDER WERE ILLEGAL, UNLAWFUL AND WITHOUT JURISDICTION. THE LD. CIT (A) HAS FAILED TO APPRECI ATE THAT SINCE THE SEARCH WARRANT WAS ISSUED IN JOINT NAMES, THE ENTIRE ACTION WAS INVALID AND UNLAWFUL. 3.1 THE LD. CIT (A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN UPHOLDING THAT THE APPELLANT WAS NOT AN INVESTOR BUT A TRADER IN SHARES AND SECURITIES AND THEREBY UPHOLDING THE PROFIT ON SALE OF SHARES AS BUSINESS INCOME AS AGAINST STCG CLAIMED BY THE APPELLANT. 3.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT (A) HAS GRIEVOUSLY ERRED IN UPHOLDING THAT THE APPELLANT WAS TRADING IN SHARES AND SECURITIES AND NOT AS AN INVESTOR. 4.1 THE LD. CIT (A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN UPHOLDING THE CHANGING THE CHARACTER OF INCOME A S UNDER: AS PER ASSESSEE AS PER AO & CIT(A) AMOUNT (RS.) STCG ON SALE OF SHARES BUSINESS INCOME IN SHARE TRADING 56,790 4.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN TR EATING THE STCG ON SALE OF SHARES AS BUSINESS INCOME. IT(SS)A. NOS. 417 TO 422/AHD/2011 FOR A.YS.2000-01, 01-02, 02-03, 04-05 & 05-06 & 06-07 (ROOPAL N. PANCHAL VS. DCIT) & IT(SS)A NOS. 423 & 424/AHD/11 FOR A.Y. 04-05 & 05 -06 (ARJAV N. PANCHAL VS. DCIT) PAGE 4 4.3 THE LD CIT(A) HAS ERRED IN PASSING THE IMPUGNED ORDER ON THE BASIS OF THE ISSUES UNDER APPEAL IN THE GROU P CASES AND RELYING UPON THE ORDER IN CASE OF DEVANGI PANCHAL, THOUGH THE FACTS OF THE CASE WERE NOT IDENTICAL. 3. WE FIND THAT ASSESSEE HAS ALSO FILED APPLICATION FOR CONDONATION OF DELAY INTER ALIA SUBMITTING THAT AT RELEVANT POINT OF TIME SHE WAS SUFFERING FROM VIRAL INFECTIO N AND HER HEALTH FURTHER DETERIORATED WITH DEPRESSION AND ILL NESS. SHE WAS NOT ABLE TO MOVE OUT OF HER HOUSE. SO, SHE COU LD NOT FILE APPEAL IN TIME AND THERE IS DELAY OF ABOUT 30 DAYS IN FILING APPEAL. IN THE FACTS AND CIRCUMSTANCES, WE FIND TH AT ASSESSEE WAS PREVENTED TO FILE APPEAL IN TIME. IN THE INTER EST OF JUSTICE, WE CONDONE THE DELAY. 4. COMING ON MERIT, AMONG OTHER GROUNDS, ASSESSEE H AS TAKEN PLEA OF ABSENCE OF DUE OPPORTUNITY OF HEARING IN ALL THESE APPEALS. IN SUM AND SUBSTANCE, THE CONTENTION OF A SSESSEE IS THAT SHE HAS NEVER AUTHORIZED DIPAK PANCHAL ON BEHA LF OF HER AND CIT(A) WENT ON THE PREMISES THAT DIPAK PANCHAL WAS AUTHORIZED ON BEHALF OF ASSESSEE TO REPRESENT HER C ASE, WHICH IS NOT FACT AS STATED BY ASSESSEE BEFORE US THAT SHE H AS NEVER AUTHORIZED DIPAK PANCHAL TO REPRESENT ON HER BEHALF . SAME SITUATION WAS IN CASE OF ARJAV NARESH PANCHAL WHO I S SON OF ROOPAL NARESH PANCHAL. IT SHOWS THAT PRACTICALLY A SSESSEE WAS NOT PROVIDED OPPORTUNITY OF HEARING. OPPORTUNITY O F HEARING IS ESSENCE OF PRINCIPLES OF NATURAL JUSTICE, SO IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTO RE THE MATTER IT(SS)A. NOS. 417 TO 422/AHD/2011 FOR A.YS.2000-01, 01-02, 02-03, 04-05 & 05-06 & 06-07 (ROOPAL N. PANCHAL VS. DCIT) & IT(SS)A NOS. 423 & 424/AHD/11 FOR A.Y. 04-05 & 05 -06 (ARJAV N. PANCHAL VS. DCIT) PAGE 5 TO HIM WITH DIRECTION TO DECIDE THE MATTER AS PER F ACT AND LAW AVAILABLE AT RELEVANT POINT OF TIME AND AFTER PROVI DING DUE OPPORTUNITY OF HEARING TO BOTH PARTIES. SINCE WE A RE RESTORING THE MATTER ON PRELIMINARY ISSUE OF OPPORTUNITY OF H EARING, WE ARE REFRAINING TO COMMENT ON MERIT OF ISSUE AT HAND . 5. AS A RESULT APPEAL FILED BY ASSESSEE FOR A.Y. 20 00-01 IS ALLOWED FOR STATISTICAL PURPOSE. 6. SIMILAR ISSUE AROSE IN OTHER YEARS. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, ALL APPEALS ARE RESTORED TO CIT(A) WITH SIMILAR DIRECTION. 7. AS A RESULT THESE APPEALS ARE ALSO ALLOWED FOR S TATISTICAL PURPOSE. 8. NOW WE TAKE ITA NO. 423/AHD/2011 FOR A.Y. 2004- 05 FILED BY ASSESSEE, ARJAV NARESH PANCHAL ON FOLLOWING GROU NDS: 1.1 THE ORDER OF ASSTT. PASSED U/S.250 DATED 28.02 .2011 FOR A.Y.2004-05 BY CIT(A)-III, ABAD IS WHOLLY ILL EGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JU STICE. 1.2 THE IMPUGNED ORDER HAS BEEN PASSED BY CIT(A) WITHOUT GIVING ANY OPPORTUNITY OF HEARING, MUCH LES S REASONABLE OPPORTUNITY OF HEARING AND HENCE THERE COULD NOT BE ANY APPEARANCE OR SUBMISSIONS MADE ON PART OF THE APPELLANT. THE PERUSAL OF RECORD OF THE APPELLANT SHOWS THAT SHE HAS NOT BEEN GIVEN HEARING S ON VARIOUS DATES FROM 23-08-10 TO 22-02-11 AND SHRI DIPAK PANCHAL HAS NOT APPEARED ON HER BEHALF NOR DI D SHE AUTHORIZE SHRI DIPAK PANCHAL TO APPEAR ON BEHAL F OF HER. THUS THE IMPUGNED ORDER PASSED BY CIT(A] IS GROSSLY AGAINST THE PRINCIPLES OF NATURAL JUSTICE. IT(SS)A. NOS. 417 TO 422/AHD/2011 FOR A.YS.2000-01, 01-02, 02-03, 04-05 & 05-06 & 06-07 (ROOPAL N. PANCHAL VS. DCIT) & IT(SS)A NOS. 423 & 424/AHD/11 FOR A.Y. 04-05 & 05 -06 (ARJAV N. PANCHAL VS. DCIT) PAGE 6 2.1 THE LD. CIT (A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN UPHOLDING THAT THE PROCEEDINGS INITIATED U/S.153A WERE NOT INVALID, UNLAWFUL AND WITHOUT JURISDICTION. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT (A) OUGHT TO HAVE HELD THAT THE NOTICE ISSUED U/S.153A AND THE ASSTT. PROCEEDINGS THERE UNDER WERE ILLEGAL, UNLAWFUL AND WITHOUT JURISDICTION. 2.3 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT (A) OUGHT TO HAVE TREATED THE PROCEEDINGS INITIATED AND NOTICE ISSUED U/S.153A AS INVALID AND UNLAWFUL. THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT SINCE THE SEARCH WARRANT WAS ISSUED IN JOINT NAMES, THE ENTIRE ACTION WAS INVALID AND UNLAWFUL. 3.1 THE LD. CIT (A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN UPHOLDING THAT THE APPELLANT WAS NOT AN INVESTOR BUT A TRADER IN SHARES AND SECURITIES AND THEREBY UPHOLDING THE PROFIT OF RS.18,27,280/- ON S ALE OF SHARES AS BUSINESS INCOME AS AGAINST STCG CLAIME D BY THE APPELLANT. 3.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD. CIT (A) HAS GRIEVOUSLY ERRED IN UPHOLDING THAT THE APPELLANT WAS TRADING IN SHARES AND SECURITIES AND NOT AS AN INVESTOR, SO THAT STCG OF RS.18,27,280/- WAS BUSINESS INCOME. 4.1 THE LD. CIT (A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN UPHOLDING THE LOSS OF RS.18,13,750/- ON TH E SALE OF SHARES OF CURE SPECTS AS NON GENUINE BUSINE SS LOSS. 4.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN TR EATING THE LOSS OF RS.18,13,750/- ON SALE OF CURE SPECTS A S NON GENUINE BUSINESS INCOME. 5.1 THE LD. CIT (A) HAS ERRED IN LAW AND/OR ON FACT S IN NOT ALLOWING TAX REBATE U/S.88 IN RESPECT OF IDBI FEXI- BONDS OF RS.90,000/-. IT(SS)A. NOS. 417 TO 422/AHD/2011 FOR A.YS.2000-01, 01-02, 02-03, 04-05 & 05-06 & 06-07 (ROOPAL N. PANCHAL VS. DCIT) & IT(SS)A NOS. 423 & 424/AHD/11 FOR A.Y. 04-05 & 05 -06 (ARJAV N. PANCHAL VS. DCIT) PAGE 7 9. SIMILAR ISSUE AROSE IN IT(SS)A NOS. 417 TO 422/A HD/2011 ON CONDONATION AND ON MERIT. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, APPEALS FOR BOTH YEARS ARE RESTORED TO CIT(A) WITH SIMILAR DIRECTION. 10. AS A RESULT, BOTH APPEALS ARE ALSO ALLOWED FOR STATISTICAL PURPOSE. 11. IN THE RESULT, ALL APPEALS FILED BY BOTH ASSESS EES ARE ALLOWED FOR STATISTICAL PURPOSE.. PRONOUNCED IN THE OPEN COURT ON THIS THE 06 TH DAY OF FEBRUARY, 2015. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA # # # # %& %& %& %& '&' '&' '&' '&' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. ,, - / CONCERNED CIT 4. -- / CIT (A) 5. &12 %, , / DR, ITAT, AHMEDABAD 6. 256 78 / GUARD FILE. BY ORDER / # , 9/ , , ;