DCIT, Bhubaneswar V. Sarbeswar Mohanty, Bhubaneswar

ITSSA 5/CTK/2010

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8429 (ITAT-CUTTACK)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 04-04-2011
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 03-05-2010
• Court: TRIBUNAL
• Department Lawyers: J KHANRADR
• Assessee Lawyers: B D OJHA
• Keywords: Search and seizure
• Section: 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T (SS) A.NO. 05/CTK/2010 / ASSESSMENT YEAR 2006 - 07 DY.COMMISSIONER OF INCOME - TAX, CIRCLE 2(2),BHUBANESWAR. - - - VERSUS - SARBESWAR MOHANTY, PLOT NO. A - 318,SAHID NAGAR,BHUBANESWAR. P AN: ACKPM 3733 A ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI J.KHANRA,DR / FOR THE RESPONDENT: / SHRI B.D.OJHA, AR / ORDER . . . , , SHRI K.S .S.PRASAD RAO, JUDICIAL MEMBER . THIS APPEAL IS FILED BY THE REVENUE HAVING BEEN AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) DT.15.2.2010 FOR THE AY 2006 - 07 IN THE CASE OF THE ASSESSEE. 2. THE DEPARTMENT HAS TAKEN THE FOLLOWING TWO I SSUES IN THE GROUNDS OF APPEAL. 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN ANNULLING THE ASSESSMENT MADE U/S.153B(B)/143(3) ON MERE TECHNICAL GROUNDS WITHOUT CONSIDERING THE MERITS OF THE ADDITIONS MADE IN THE A SSESSMENT ORDER. 2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, EVEN OTHERWISE WHILE ANNULLING THE ASSESSMENT, THE LD. CIT(A) HAS NOT CONSIDERED THE SCOPE OF SECTION 292B OF THE I.T.ACT . 3. BOTH PARTIES WERE HEARD REGARDING THE ISSUES RAISED BY THE DEPARTMENT AND THEIR LEGAL IMPLICATIONS. 4. ON CAREFUL CONSIDERATION OF THE MATERIAL AVAILABLE TO THE TRIBUNAL, THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE THAT THE ASSESSEE IS A RETIRED IAS OFFICER AND ASSESSED AS AN INDIVIDUAL AS HE IS WORKING AS AN EMPLOYEE IN HI - TECH MEDICAL COLLEGE & HOSPITAL BY DRAWING SALARY. THE ASSESSEE IS ALSO ENGAGED IN THE BUSINESS AND PROFESSION AND IS HAVING INCOME FROM OTHER I.T(SS)A.NO. 05/CTK/2010 2 SOURCES AND THE ASSESSEE IS FILING RETURN OF INCOME REGULARLY. THERE WAS A SEARCH AND SEIZURE OPE RATION CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 30.9.2005 IN CONSEQUENCE TO WARRANT OF AUTHORIZATION ISSUED BY THE DIRECTOR OF INCOME - TAX (INV), BHUBANESWAR. THE ASSESSEE HAS FILED RETURN OF INCOME SHOWING INCOME AT 1,10,140. THE ASSESSING OFFICER, AFTER HEARING THE ASSESSEE, HAS PASSED THE ASSESSMENT ORDER ARRIVING AT THE INCOME OF 22,59,740. AGAINST THIS ORDER OF ASSESSMENT, THE ASSESSEE WENT IN APPEAL BEFORE THE COMMISSIONER OF INCOME - TAX (APPEALS) AND WAS SUC CESSFUL. HENCE, THE DEPARTMENT HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. DURING THE COURSE OF HEARING, THE LEARNED DR HAS VEHEMENTLY ARGUED ASSAILING THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) CONTENDING INTER ALIA THAT THE ASSESSING OFFICE R IS HAVING JURISDICTION AS PER THE PROVISIONS CONTAINED IN SECTION 292B OF THE I.T.ACT WHICH CLEARLY MANDATE THAT TECHNICAL GROUNDS ARE TO BE TAKEN LENIENTLY WHILE CONSIDERING THE JURISDICTION OF THE OFFICERS UNDER THE ACT. THEREFORE, THE IMPUGNED ORDER I S NOT SUSTAINABLE FOR LEGAL SCRUTINY AND ACCORDINGLY HE SOUGHT FOR SETTING ASIDE THE SAME BY ALLOWING THE APPEAL OF THE REVENUE. 6. CONTRARY TO THIS, THE LEARNED AR OF THE ASSESSEE HAS CONTENDED THAT THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) IS VERY MUCH RIGHT AS THE ASSESSING OFFICER HAS WRONGLY ASSUMED JURISDICTION AND THE PROVISIONS CONTAINED IN SECTION 292B WILL NOT COMPREHEND SUCH ASSUMPTION OF JURISDICTION AS WAS HELD BY THE ITAT, CUTTACK BENCH, WHICH THE LEARNED CIT(A) HAS RELIED ON IN THE IMPU GNED ORDER. THEREFORE, THERE IS NO INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(A) REQUIRING ANY INTERFERENCE. ACCORDINGLY, HE SOUGHT FOR DISMISSAL OF THE APPEAL OF THE REVENUE. I.T(SS)A.NO. 05/CTK/2010 3 7. ON OUR CAREFUL ANALYSIS OF THE IMPUGNED ORDER IN THE LIGHT OF THE RIVA L SUBMISSIONS OF BOTH THE PARTIES AS WELL AS THE PROVISIONS CONTAINED IN SECTION 292B AND THE ORDER OF THE ITAT, CUTTACK BENCH PASSED IN THE CASE OF KALINGA INSTITUTE OF INDUSTRIAL TECHNOLOGY (KIIT), BHUBANESWAR V. DCIT IN IT(SS)A NO. 85/CTK/2009 DT.4.12.2 009 FOR THE ASSESSMENT YEAR 2006 - 07,WHEREIN IT WAS HELD THAT THE ASSESSING OFFICER IS NOT COMPETENT TO ISSUE NOTICE U/S.153AA) OF THE ACT IN RESPECT OF THE ASSESSMENT YEAR DURING WHICH THE SEARCH HAD TAKEN PLACE . WHILE DOING SO, THE PROVISIONS RELATING TO COMPLETION OF ASSESSMENT IN THE CASE OF SEARCH AND SEIZURE AFTER INTRODUCTION OF SECTION 153A TO 153D OF THE ACT W.E.F. 1.6.2003 AND ALSO COMPARING THE NEW PROVISIONS WITH THE EARLIER PROVISIONS RELATING TO SEARCH AND SEIZURE ASSESSMENTS CONTAINED IN CHAPT ER XIVB OF THE ACT. THE LEARNED CIT(A) HAS ELABORATELY DISCUSSED ABOUT THE ORDER OF THE ITAT, CUTTACK BENCH PASSED BASING ON THE ORDER OF ITAT, LUCKNOW BENCH AS WELL AS THE CBDT CIRCULAR DT.7 DT.5.9.2003 [263 ITR (ST.)62] EXPLAINING THE MECHANISM RELATING TO SEARCH CASES AFTER 1.2.2003.AFTER THOROUGHLY EXAMINING THE FACTS IN THE PRESENT CASE IN THE LIGHT OF THE SAID ORDERS OF THE TRIBUNAL, THE LEARNED CIT(A) HAS FOUND THAT THE ASSESSING OFFICER HAS NO COMPETENCY TO ISSUE NOTICE U/S.153A(A) OF THE ACT IN RES PECT OF THE AY 2006 - 07 AS THE SEARCH TOOK PLACE ON 30.9.2005. THUS OBSERVING THE LEARNED CIT(A) FOUND THE NOTICE ISSUED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2006 - 07 AS BAD IN LAW. CONSEQUENTLY THE ASSESSMENT ORDER PASSED N31.1.22007 IS AB INITO NULL AND VOID. ON CAREFUL CONSIDERATION OF THE IMPUGNED ORDER IN THE LIGHT OF THE RELEVANT PROVISIONS AS WELL AS SHE ORDERS OF THE TRIBUNAL, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) IS NOT AT ALL INFIRM IN ANY WAY REQUIRING ANY INTERFERENCE. HENCE, THE SAME IS I.T(SS)A.NO. 05/CTK/2010 4 HEREBY UPHELD BY FINDING THAT THE ISSUE RAISED BY THE DEPARTMENT IS DEVOID OF MERITS. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER IS PRONOUNCE D IN OPEN COURT ON DT. 4 TH APRIL, 2011 S D / - S D/ - ( . . ) , , (K.K.GUPTA), ACCOUNTANT MEMBER. ( . . . ) , (K.S.S.PRASAD RAO), JUDICIAL MEMBER. ( ) DATE: 4 TH APRIL, 2011 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : DY.COMMISSIONER OF INCOME - TAX, CIRCLE 2(2),BHUBANESWAR 2 / THE RESPONDENT: SARBESWAR MOHANTY, PLOT N O. A - 318,SAHID NAGAR,BHUBANESWAR. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY ( ), ( H.K.PADHEE ), SENIOR. PRIVATE SECRETARY.