Ved Saran Singh, Kolkata V. DCIT, C.C. - XXIV, Kolkata, Kolkata

ITSSA 5/KOL/2010

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7782 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 12-08-2011
• Assessment Year: misc
• Appeal Filed On: 20-08-2010
• Court: TRIBUNAL
• Department Lawyers: S K ROY
• Assessee Lawyers: S L KOCHAR
• Keywords: Search and seizure; Block assessment
• Section: 132

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , ,, , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. . ! ! ! !. .. . , '# SHRI C.D.RAO, ACCOUNTANT MEMBER $ $ $ $ / IT(SS)A NO.5/KOL/2010 %& '( /BLOCK AYEARS 1987-88 TO 19996-97 AND 1997-98 ()* / APPELLANT ) SHRI VED SARAN SINGH, KOLKATA (PAN:AMGPS 9750 B) - % - - VERSUS - . (,-)*/ RESPONDENT ) D.C.I.T., CENTRAL CIRCLE- XXVI, KOLKATA $ $ $ $ / IT(SS)A NO.9/KOL/2010 %& '( /BLOCK AYEARS 1987-88 TO 19996-97 AND 1997-98 ()* / APPELLANT ) D.C.I.T., CENTRAL CIRCLE-XXVI, KOLKATA - % - - VERSUS - . (,-)*/ RESPONDENT ) SHRI VED SARAN SINGH, KOLKATA (PAN:AMGPS 9750 B) )* / 0 '/ FOR THE APPELLANT: SHRI S.L.KOCHAR ,-)* / 0 '/ FOR THE DEPARTMENT: SHRI S.K.ROY 1%2 / !# /DATE OF HEARING : 13.01.2012. 3' / !# /DATE OF PRONOUNCEMENT : 13.01.2012. '4 / ORDER ( (( ( . .. . ! ! ! !. .. . ) )) ), , , , '# PER SHRI C.D.RAO, AM THE ABOVE CROSS APPEALS ONE FILED BY ASSESSEE AND THE OTHER FILED BY THE REVENUE ARE AGAINST ORDERS DATED 21.06.2010 OF THE LD. CIT(A)-XXXVI, KOLKATA PERTAINING TO BLOCK ASSTT.YEARS 1987-88 TO 1997-98. 2 2. THE ASSESSEE HAS TAKEN THE VERY FIRST GROUND WH ICH IS GOING TO THE ROOT OF THE MATTER WHICH IS AS UNDER :- 1. FOR THAT THE LD. CIT(A) ERRED IN UPHOLDING THAT ASSUMPTION OF JURISDICTION U/S 158BD OF THE INCOME TAX ACT, 196 BY THE ASSESSI NG OFFICER WAS CORRECT AND VALID AND IN THAT VIEW OF THE MATTER ERRED IN DISMI SSING GROUNDS 1 TO 9 & 23 TAKEN BY THE APPELLANT IN HIS APPEAL TO THE LD. CIT (A). 3. THE BRIEF FACTS OF THIS CASE ARE THAT A SEARCH AND SEIZURE WAS CONDUCTED BY THE INCOME TAX DEPARTMENT U/S 132 OF THE IT ACT ON 17.0 1.1997 IN BINAY PRAKASH GROUP OF CASES FOR THE BLOCK PERIODS 01.04.1986 TO 17.01. 1997. DURING THE COURSE OF SEARCH ON BINAY PRAKASH GROUP OF CASE THE FOLLOWING BOOKS AND DOCUMENTS WERE FOUND AND SEIZED :- BOOK/DOCUMENTS FOUND AT BRIEF DESCRIPTION I) PCM-42 RESIDENTIAL PREMISES OF PRITHIVI SINGH AT MURABAD,RANCHI. THIS IS A LOOSE BUNCH OF PAPERS IN PAGE 16,17 & 18 NAMES OF THE 14 CONCERNS (INCLUDING M/S.SAMRAT ENTERPRISES TO WHOM COKE WAS ALLOTTED FOR VARIOUS DISTRICTS WERE NOT FOUND. II)PCM-43 -DO- LOOSE BUNCH OF PAPERS (PAGE 1 TO 117).THIS IS A SORT OF DAY BOOK FOR THE PERIOD 1.4.86 TO 28.10.96 REFLECTING FLOW IN AND FLOW OUT OF CASH III)PCM-45 -DO- THIS IS ALSO A BUNCH OF LOOSE PAGES WHERE NET OF FUNDS AS ON 20.1.96 OF PRAKASH WAS TO BE FOUND. THE CONCERNS INCLUDE M/S.SAMRAT ENTERPRISES. IV) KS-4 COMBINED OFFICE PRESMIES OF M/S.R.D.ENTERPRISES & M/S.SOLAR SMOKELESS FUELS OF QRT.NO.6 AROGYA BHAWAN,BARIATU RD.,RANCH. FROM PAGES 2 TO PAGE 7 COKE LIFTED FROM COLLIERIES BY VARIOUS HANDLING AGENTS INCLUDING TO M/S.SAMRAT ENTERPRISES AND SOLD TO VARIOUS PERSONS WERE TO BE FOUND. V)KS-29 -DO- THIS IS A COMPUTER PRINT OUT REFLECTING THE CONSOLIDATED TRIAL BALANCE & BALANCE-SHEET OF PRAKASH GROUP AS ON 17.1.97 I.E. THE DATE OF SEARCH. ON PAGE 6 OF THIS 3 DOCUMENTS CASH AND BANK BALANCES OF M/S.SAMRAT ENTERPRISES WERE ENTERED. VI)KS-6 RESIDENTIAL PREMISES OF SRI BINAY PRAKASH IN THE 1 ST FLOOR OF PRAKASH KUNJ, BARIATU, BOOTY RD., RANCHI. `LOOSE BUNCH OF PAPERS PAGE NO.1 TO 35 RELATING TO 12 CONCERNS AND THEIR PROFIT CALCULATION ON SALE OF SOFT COKE WHERE INTER ALIA PROFIT EARNED BY M/S.SAMRAT ENTERPRISES. FROM THE ASSESSMENT ORDER ON THE BASIS OF THE ABOVE FINDINGS AND DOCUMENTS ASSESSING OFFICER INITIATED PROCEEDINGS U/S 158 BD OF THE IT ACT AS THERE WAS NO SEARCH WARRANT IN THE NAME OF ASSESSEE. THE ASSESSE E RAISED OBJECTION AS REGARDS ASSUMPTION BY AO FIRST BEFORE THE AO AND THEN THIS WAS CHALLENGED BEFORE THE LD. CIT(A), WHO CONFIRMED THE ASSUMPTION OF JURISDICTIO N BY STATING THAT THE AO IN THE INSTANT CASE ON RECEIPT OF SEIZED RECORDS WAS SATIS FIED THAT THE UNDISCLOSED INCOME EVIDENCED FROM THE SEIZED MATERIAL AND ASSUMPTION O F JURISDICTION IS VALID AS PER LAW. AGGRIEVED, ASSESSEE CHALLENGED THIS ISSUE BEFORE US . 4. WE HAVE HEARD BOTH THE SIDES AND GONE THROUGH TH E RECORDS. AT THE OUTSET IT IS TO MENTION THAT THE AO IN THE CASE OF SEARCH PARTY I.E. BINAY PRAKASH GROUP OF CASES HAS CATEGORICALLY STATED THAT NO SUCH SATISFACTION QUA THE PROVISION OF SECTION 158BD IS RECORDED BY HIM AND QUA THE LETTER DATED 10.01.201 2 WAS FILED BY THE LD. CIT(DR). THE RELEVANT TEXT OF THE LETTER READS AS UNDER :- OFFICE OF THE INCOME TAX OFFICER, WARD 37(2), KO LKATA, 18 RABINDRA SARANI, PODDER COURT, KOLKATA -700 001. NO. ITO, WD.-37(2)/KOL/ V-8085 1/201 1-12/ 453.. 10TH JANUARY, 2012, TO MR. VED SARAN SINGH, 88, AMHERST ST, KOLKATA 700 009. SIR, SUBJECT: SHRI VED SARAN SINGH, G.I.R.- V-8085 - BLO CK ASST. YRS. 1987-88 TO 1997-98 - CERTIFIED COPY OF SATISFACTION NOTE - ISSUE OF - RE G. REF. YOUR LETTER DATED 05.05.2011. KINDLY REFER TO THE ABOVE. IN CONNECTION WITH THE ISSUE OF CERTIFIED COPY OF S ATISFACTION NOTE, REQUESTED BY YOU ON 05.05.2011, WITH CHALLAN VALUE OF RS.100/-(PAID ON 11.02.2011) ON THE BASIS OF WHICH PROCEEDINGS U/S 158BC/158BD OF THE I.T. ACT, 1961 F OR THE BLOCK PERIOD 01.04.0987 TO 4 17.01.1997(BLOCK ASST. YRS. 1987-88 TO 1997-98) WAS INITIATED, IT MAY PLEASE BE NOTED THAT THERE IS NO SATISFACTION NOTE AVAILABLE IN BLOCK AS SESSMENT FOLDERS, RECEIVED ON TRANSFER FROM CENTRAL CIRC1E-XXIV, KOLKATA. HENCE, NO CERTIFIED C OPY OF SATISFACTION NOTE, AS PRAYED FOR IN YOUR ABOVE LETTER CAN BE ISSUED BY THIS OFFICE. THIS IS FOR YOUR INFORMATION. YOURS FAITHFULLY, SD/- (T.K.RAY) . I.T.O., WARD -37(2)KOLKATA. 4.1. THE LD. DR APPEARING ON BEHALF OF THE REVENUE ALSO FILED COPY OF ORDER SHEET ENTRY DATED 29.10.1998 IN THE CASE OF ASSESSEE AND ACCORDING TO HIM ASSESSEES AO HAS RECORDED SATISFACTION VIDE THIS ORDER SHEET ENTRY. THE RELEVANT ORDER ENTRY READS AS UNDER :- 29.10.98 A S&S OPERATION WAS CONDUCTED IN THE VINAY PRAKASH GROUP OF CASES IN THE COURSE OF WHICH CERTAIN BOOKS OF A/CS/DOCUME NTS WERE SEIZED IN RESPECT OF THE A. NOTICE U/S 158BC WAS ISSUED NO RETURN FILED. I SSUE NOTICE U/S 142(1). 4.2. WE FIND FROM THE ABOVE FACTS THAT AO OF THE AS SESSEE DATED 10 TH JANUARY, 2012 VIDE NO.ITO,WD-37(2)/KOL/V-8085-1/2011-12/652 HAS C ATEGORICALLY STATED THAT THERE IS NO SATISFACTION RECORDED BY THE AO OF THE SEARCH ED BY THE AO IN THE SEARCHED ASSESSEES CASE I.E. BINAY PRAKASH GROUP OF CASES. EVEN THERE IS NO SATISFACTION RECORDED IN THE CASE OF ASSESSEE AS CLAIMED BY THE REVENUE THAT THE SAME WAS RECORDED BY THE ORDER SHEET ENTRY DATED 29.10.1998 AS REPROD UCED ABOVE. 4.3. WE FIND THAT HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS ACIT AND ANOTHER 92007) 289 ITR 341 (SC) HAS LAID D OWN THE PRINCIPLE THAT BEFORE THE PROVISIONS OF SECTION 158BD OF THE ACT ARE INVO KED AGAINST A PERSON OTHER THAN THE PERSON WHOSE PREMISES HAVE BEEN SEARCHED U/S 132 OF THE ACT OR DOCUMENTS AND OTHER ASSETS HAVE BEEN REQUISITIONED U/S 132A OF THE ACT, THE CONDITIONS PRECEDENT HAVE TO BE SATISFIED. THE HONBLE APEX COURT HAS ALSO DISCU SSED THE CONDITIONS PRECEDENT FOR INVOKING A BLOCK ASSESSMENT, ARE THAT A SEARCH HAS BEEN CONDUCTED U/S 132 OF THE ACT, OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED U/S 132A OF THE ACT. THE PROVISIONS OF BLOCK ASSESSMENT WOULD APPLY IN THE CASE OF A PERSO N IN RESPECT OF WHOM SEARCH HAS BEEN CARRIED OUT U/S 132A OF THE ACT OR DOCUMENTS O R ASSETS HAVE BEEN REQUISITIONED U/S 132A OF THE ACT. HONBLE SUPREME COURT HAS DISC USSED THE PROVISION OF SECTION 5 158BD OF THE ACT AND OBSERVED THAT FOR TAKING RECOU RSE OF BLOCK ASSESSMENT IN TERMS OF SECTION 158BC OF THE ACT IN RESPECT OF ANY OTHER PERSON THE CONDITIONS PRECEDENT WHEREFOR ARE AS UNDER :- (I) SATISFACTION MUST BE RECORDED BY THE ASSESSING OFFI CER THAT ANY UNDISCLOSED INCOME BELONGS TO ANY OTHER PERSON OTHER THAN THE P ERSON WITH RESPECT TO WHOM SEARCH WAS MADE U/S 132 OF THE ACT. (II) THE BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAS BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JU RISDICTION OVER SUCH OTHER PERSON AND (III) THE ASSESSING OFFICER HAS TO PROCEED U/S 158BC OF T HE ACT R.W.S. 158BD AGAINST SUCH OTHER PERSON. 4.4. IT WAS FURTHER HELD THAT NO PROCEEDING UNDER S. 158BC HAD BEEN INITIATED. THERE IS, THUS, A PATENT NON-APPLICATION OF MIND. A PRESCRIBED FORM HAD BEEN UTILIZED. EVEN THE STATUS OF THE ASSESSEE HAD NOT BEEN SPECIF IED. IT HAD ONLY BEEN MENTIONED THAT THE SEARCH WAS CONDUCTED IN THE MONTH OF NOVEMBER, 1995. NO OTHER INFORMATION HAD BEEN FURNISHED. THE PROVISIONS CONTAINED IN CHAPTER XIV-B ARE DRASTIC IN NATURE. IT HAS DRACONIAN CONSEQUENCES. SUCH A PROCEEDING CAN B E INITIATED, IT WOULD BEAR REPETITION TO STATE, ONLY IF A RAID IS CONDUCTED. W HEN THE PROVISIONS ARE ATTRACTED, LEGAL PRESUMPTIONS ARE RAISED AGAINST THE ASSESSEE. THE B URDEN SHIFTS ON THE ASSESSEE. AUDITED ACCOUNTS FOR A PERIOD OF TEN YEARS MAY HAVE TO BE REOPENED. AS THE AO HAS NOT RECORDED HIS SATISFACTION, WHICH IS MANDATORY; NOR HAS HE TRANSFERRED THE CASE TO THE AO HAVING JURISDICTION OVER THE MATTER. 4.5. BEFORE HONBLE SUPREME COURT THE FACTS WERE TH AT THE PREMISES OF DIRECTOR OF THE COMPANY AND HIS WIFE WERE SEARCHED U/S 132 OF T HE ACT AND BLOCK ASSESSMENT WAS TO BE DONE IN RELATION TO THE COMPANY. HONBLE SUPR EME COURT HELD THAT ASSESSING OFFICER HAD TO RECORD HIS SATISFACTION THAT ANY UND ISCLOSED INCOME BELONGED TO THE COMPANY AND HANDED OVER THE BOOKS OF ACCOUNTS AND O THER DOCUMENTS AND ASSETS SEIZED TO THE ASSESSING OFFICER FOR HAVING JURISDIC TION AGAINST THE COMPANY. SINCE NO SUCH SATISFACTION WAS RECORDED BY THE ASSESSING OFF ICER OF THE SEARCHED PERSON AGAINST 6 THE COMPANY HONBLE SUPREME COURT ALLOWED THE APPEA LS OF ASSESSEE. IN THIS THE PRESENT CASE ARE EXACTLY SIMILAR TO THE ONE DECIDED BY THE HONBLE APEX COURT, AS THE SEARCH WAS CONDUCTED U/S 132 OF THE ACT IN THE CASE OF BINAY PRAKASH GROUP OF CASES ON 17.1.1997 AND IN VIEW OF THE LETTER DATED 10.01. 2012 OF THE ASSESSING OFFICER THERE IS NO SATISFACTION RECORDED BY THE ASSESSING OFFICE R OF THE SEARCHED PERSON. SINCE THE ISSUE IS IN FAVOUR OF ASSESSEE WE DECIDE THIS JURIS DICTIONAL ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 5. SINCE WE HAVE DECIDED THE JURISDICTIONAL ISSUE IN FAVOUR OF THE ASSESSEE THE OTHER GROUNDS RAISED BY ASSESSEE AS WELL AS THE REV ENUE WILL BE OF ACADEMIC INTEREST AND REQUIRES NO ADJUDICATION. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED AND THE REVENUES APPEAL IS DISMISSED. '4 '4 '4 '4 #1' #1' #1' #1' 5 1% 6 7 !# 5 1% 6 7 !# 5 1% 6 7 !# 5 1% 6 7 !# 13.01.2012. ORDER PRONOUNCED IN THE OPEN COURT ON 13.01.2012. SD/- SD/- , , , , MAHAVIR SINGH, JUDICIAL MEMBER . .. . ! ! ! !. .. . , , , , '# '# '# '# , C.D.RAO, ACCOUNTANT MEMBER. ( (( (!# !# !# !#) )) ) DATE: 13.01.2012. '4 / ,8 9'8':- COPY OF THE ORDER FORWARDED TO: 1. VED SARAN SINGH, C/O MANOJ GUPTA, FCA, 4, GANGADHAR BABU LANE, 1 ST FLOOR, KOLKATA-700012. 2 THE D.C.I.T.,CENTRAL CIRCLE-XXIV, KOLKATA 3. THE CIT, 4. THE CIT(A)-XXXVI, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA -8 ,/ TRUE COPY, '4%1/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.) 7