The ITO, Ward-6(5), Ahmedabad V. Shri Bharat Govindbhai Patel, Ahmedabad

ITSSA 50/AHD/2008

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9263 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 08-05-2013
• Assessment Year: misc
• Appeal Filed On: 24-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK JOHRI
• Assessee Lawyers: G C PIPARA
• Keywords: Period of limitation; Procedural lapse; Block assessment; Time period of passing order
• Section: 142(1); 131; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI, PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER IT(SS)A NO.50/AHD/2008 & IT(SS)A NO.275/AHD/2012 BLOCK PERIOD FROM 01/04/1987 TO 17/06/1997 INCOME TAX OFFICER WARD-6(5), C.U. SHAH COLLEGE BUILDING, 2 ND FLOOR, ASHRAM ROAD, AHMEDABAD ASSTT. CIT, CIRCLE-6, A- 509, PRATYAKSHA KAR BHAVAN, NR. PANJRA POLE, AMBAWADI, AHMEDABAD 380 015 V/S . V/S . SHRI BHARAT GOBINDBHAI PATEL 34-B, SWEEPARK SOCIETY, NR. MADHUVRUND SWATANTRA BUNGLOWS, GHATLODIA, AHMEDABAD SHRI BHARAT G PATEL 34/B, SWEEPARK SOCIETY, NR. MADHUVRUND SWATANTRA BUNGLOWS, GHATLODIYA, AHMEDABAD- 380061 [ PAN NO. ABCPP 1650 L ] / APPELLANT .. / RESPONDENT) /BY ASSESSEE SHRI G.C. PIPARA, AR /BY REVENUE SHRI ALOK JOHRI, CIT-DR /DATE OF HEARING 09-05-2013 ! /DATE OF PRONOUNCEMENT 28 -06-2013 ' ' ' ' / // / O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- BOTH THESE APPEALS ARE FILED BY THE REVENUE WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF COMMISSIONER OF INCOME-TAX ( APPEALS)-XI, AHMEDABAD (CIT(A) FOR SHORT). ONE SUCH ORDER OF L D. CIT(A) IS DATED 11-02- IT(SS)A NO.50/AHD/08 & 275/AHD/12 B.P.1.4.87 TO 17.6.97 ITO WD-6(5), ABD V. SH BHARAT G PATEL PAGE 2 2008 AND THE SECOND ORDER OF LD. CIT(A) IS DATED 21 -03-2012 BUT THE BLOCK PERIOD AS PER BOTH THESE ORDERS IS SAME I.E., 01-04 -1997 TO 17-06-1997. 2. FIRST WE NOTE DOWN VARIOUS FACTS OF THIS CASE. I N THE PRESENT CASE, AN AMOUNT OF RS.25.13 LAKH WAS FOUND IN POSSESSION OF TWO PERSONS NAMELY MITESHKUMAR DINESHKUMAR AND KIRANKUMAR KAUSHIKBHAI AT NEW DELHI BY THE POLICE AUTHORITIES OF POLICE STATION, PASCHIM VIHAR , DELHI ON 17-06-1997. THE SAID TWO PERSONS WERE TAKEN TO THE POLICE STATION, WHEREIN THE SAID CASH WAS SEIZED BY THE ADIT (INVESTIGATION) UNIT IV (2) NEW DELHI ON BEING INFORMED BY THE POLICE AUTHORITIES. THE STATEMENT OF THESE TWO PERSONS WERE THEN RECORDED U/S. 132A(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFT ER REFERRED TO AS THE ACT) ON 17-06-1997 BY THE ITO (INV.)UNIT-IV(2), NEW DELH I. THESE TWO PERSONS STATED IN SAID STATEMENT THAT THEY ARE WORKING FOR SHRI SURENDRA TANEJA AND HE HAS HANDED OVER THIS CASH OF RS.25.13 LAKH FOUND AN D SEIZED FROM THEM AND IT WAS ALSO STATED THAT SAID CASH IS BELONGING TO HIM I.E., SHRI SURENDRA TANEJA OF DELHI. THEREAFTER STATEMENT OF SHRI SURENDRA TAN EJA WAS ALSO RECORDED U/S. 131 OF THE ACT ON 15-07-1997 BY THE ADIT, WHEREIN H E CATEGORICALLY DENIED KNOWING THE SAID TWO PERSONS AND ALSO STATED THAT T HE CASH SEIZED FROM THEM ALSO DID NOT BELONG TO HIM AND THAT HE DOES NOT KNO W ANYTHING ABOUT IT. IN VIEW OF THIS DENIAL BY SHRI SURENDRA TANEJA, FURTHER ENQ UIRIES WERE MADE BY THE DEPARTMENT FROM THE SAID TWO PERSONS AND THEREAFTER , IN ANOTHER STATEMENT OF 15-07-1997, IT WAS STATED BY THEM THAT DUE TO FEAR OF THE POLICE AND THE INCOME-TAX AUTHORITIES, THEY HAVE WRONGLY STATED TH E NAME OF SHRI SURENDRA TANEJA AND THE SAID CASH WAS ACTUALLY HANDED OVER T O THEM BY SHRI BHARAT G PATEL I.E. ASSESSEE. THE STATEMENT OF THE ASSESSEE THAT SHRI BHARAT G PATEL WAS THEN RECORDED ON 15-07-1997 BY THE ADIT, UNIT-I V NEW DELHI, WHEREIN HE CATEGORICALLY ADMITTED THAT THE CASH OF RS.25.13 LA KH SEIZED FROM THOSE TWO PERSONS AT NEW DELHI WAS BELONGING TO HIM. HE ALSO EXPLAINED THE PURPOSE AND REASONS FOR THE SAID CASH GIVEN BY HIM TO THESE PERSONS. THEREAFTER THE ASSESSEE WROTE A LETTER DATED 11-08-1997 TO CIT-III , AHMEDABAD FOR ADJUSTMENT OF CASH SEIZED AGAINST INCOME TAX FOR AY 1998-99 AND IN IT(SS)A NO.50/AHD/08 & 275/AHD/12 B.P.1.4.87 TO 17.6.97 ITO WD-6(5), ABD V. SH BHARAT G PATEL PAGE 3 CONTINUATION OF THE SAID LETTER, ASSESSEE WROTE ANO THER LETTER DATED 22-08-1997 ADDRESSED TO LD. CIT, GUJARAT-III, AHMEDABAD STATIN G THAT CASH OF RS.25.13 LAKH SEIZED ON 17-06-1997 IS FORMING PART OF THE CA SH BALANCE AS PER HIS REGULAR BOOKS OF ACCOUNT. SUBSEQUENT DEVELOPMENT RE GARDING SEIZED CASH IS NOT BEING DISCUSSED HERE. THE RELEVANT FACTS BEFORE US IS THAT SUBSEQUENTLY, THE ASSESSING OFFICER OF THE ASSESSEE ISSUED NOTICE TO THE ASSESSEE U/S. 158BC OF THE ACT ON 27-08-1997 AND IN RESPONSE TO T HIS, ASSESSEE FILED BLOCK RETURN ON 05-09-1997 DECLARING NIL UNDISCLOSED INCO ME. THE ASSESSMENT WAS COMPLETED BY THE AO ON 30-06-1999 ASSESSING UNDISCL OSED INCOME OF RS. 2 LAKH. OUT OF THE PRESENT APPEAL, IT(SS)A NO.50/AHD/ 2008 IS IN RESPECT OF THIS ASSESSMENT ORDER PASSED BY THE AO ON 30-06-1999. 3. THE SECOND APPEAL, IS IN RESPECT OF ORDER U/S.26 3 PROCEEDINGS AND IT IS IMPORTANT TO BE NOTED THAT AFTER PASSING OF THE ASS ESSMENT ORDER BY THE ASSESSING OFFICER ON 30-06-1999 ASSESSING UNDISCLOS ED INCOME AT RS.2 LAKH, THE REVISONAL POWERS WERE EXERCISED BY THE LD. CIT U/S. 263 OF THE ACT AS PER WHICH IT WAS HELD BY HIM THAT ASSESSMENT ORDER FRAM ED BY THE ASSESSING OFFICER ON 30-06-1999 IS ERRONEOUS AS WELL AS PREJU DICIAL TO THE INTEREST OF THE REVENUE AND HE ALSO HELD THAT THE AMOUNT OF SEIZED CASH OF RS.25.13 LAKH BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE AND B E ADDED TO THE UNDISCLOSED INCOME DETERMINED AT RS.2 LAKH VIDE THE ORDER U/S. 158BC OF THE ACT DATED 30-06-1999. IT WAS HELD BY HIM THAT THE T OTAL UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD SHOULD BE ASSESSE D AT RS.27.13 LAKH AND SUCH ORDER OF LD. CIT U/S. 263 OF THE ACT WAS CHALL ENGED BY THE ASSESSEE BEFORE THE TRIBUNAL BUT SUCH ORDER OF LD. CIT U/S. 263 OF THE ACT WAS UPHELD BY THE TRIBUNAL AND THEREFORE, ANOTHER ASSESSMENT O RDER WAS FRAMED BY THE ASSESSING OFFICER ON 29-12-2009 AS PER WHICH, HE AS SESSED THE UNDISCLOSED INCOME OF THE ASSESSEE AT RS.27,13,006/-. AGAINST T HIS ASSESSMENT ORDER ALSO, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A) WHO HAS HELD THAT THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S . 158BC R.W.S. 158BD OF DATED 09-06-2008 IS AB INITIO VOID AND BAD IN LAW A ND THE ASSESSMENT ORDER IT(SS)A NO.50/AHD/08 & 275/AHD/12 B.P.1.4.87 TO 17.6.97 ITO WD-6(5), ABD V. SH BHARAT G PATEL PAGE 4 FORMED BY THE ASSESSING OFFICER U/S. 158BD OF THE A CT DATED 29-12-2009 WAS QUASHED. NOW, THE REVENUE IS IN APPEAL AGAINST THIS ORDER OF LD. CIT(A). AS PER IT(SS)A NO.275/AHD/2012. 4. FIRST, WE TAKE UP IT(SS)A NO.50/AHD/2008 BECAUSE THIS APPEAL IS ARISING OUT OF ORIGINAL ASSESSMENT PROCEEDINGS AND AS PER THIS APPEAL, THE REVENUE IS DISPUTING THE ORDER OF LD. CIT AS PER WH ICH IT WAS HELD BY HIM THAT THE ASSESSMENT ORDER PASSED BY ASSESSING OFFICER U/ S. 158BC OF THE ACT IS BAD IN LAW. THE SECOND ISSUE RAISED BY THE REVENUE IN THIS APPEAL IS THIS THAT THIS BLOCK ASSESSMENT ORDER WAS HELD BY L. CIT(A) A S BAD IN LAW FOR THIS REASON ALSO THAT THE NOTICE U/S. 143(2) OF THE ACT WAS NOT ISSUED BY THE ASSESSING OFFICER WITHIN THE PRESCRIBED TIME BEING ONE YEAR FROM THE END OF THE MONTH IN WHICH THE BLOCK RETURN OF INCOME WAS F ILED BY THE ASSESSEE. FIRST WE DECIDE SECOND ASPECT. 5. IT IS NOTED BY THE ASSESSING OFFICER ALSO IN THE ASSESSMENT ORDER DATED 30-06-1999 THAT THE BLOCK RETURN OF INCOME WAS FILE D BY ASSESSEE ON 05-09- 1997 AND HE HAS ALSO NOTED IN THE SAME ASSESSMENT O RDER THAT NOTICE U/S. 143(2) AND 142(1) OF THE ACT DATED 30-03-1999 WERE ISSUED. LD. CIT(A) HAS GIVEN A CLEAR FINDING IN PARA-6 OF HIS ORDER THAT A S AGAINST THE LIMITATION PERIOD ENDING ON 30-09-1998 FOR ISSUE OF NOTICE U/S. 143(2 ) OF THE ACT, THE AO HAS ISSUED NOTICE U/S. 143(2) ON 30-03-1999. LD. DR OF THE REVENUE COULD NOT BRING ANY EVIDENCE ON RECORD TO CONTROVERT THIS CLE ARING FINDING OF LD. CIT(A). HENCE, IT HAS TO BE ACCEPTED THAT NO NOTICE WAS ISS UED BY THE AO U/S. 143(2) WITHIN THE TIME PRESCRIBED UNDER THAT SECTION. UNDE R THESE FACTS, ORIGINAL ASSESSMENT ORDER FRAMED BY THE AO ON 30-06-1999 IS BAD IN LAW AND HAS TO BE QUASHED. AS PER THE RATIO LAID IN THE JUDGMENT O F HONBLE SUPREME COURT IN THE CASE OF ACIT AND ANOTHER V. HOTEL BLUE MOON (2010) 321 ITR 362 (SC) IF AN ASSESSMENT IS TO BE COMPLETED UNDER SECTION 143( 3) READ WITH SECTION 158BC, NOTICE UNDER SECTION 143(2) SHOULD BE ISSUED WITHIN ONE YEAR FROM THE IT(SS)A NO.50/AHD/08 & 275/AHD/12 B.P.1.4.87 TO 17.6.97 ITO WD-6(5), ABD V. SH BHARAT G PATEL PAGE 5 DATE OF FILING OF THE BLOCK RETURN. OMISSION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE UNDER SECTION 143(2) CANN OT BE A PROCEDURAL IRREGULARITY AND IS NOT CURABLE. THEREFORE, THE REQ UIREMENT OF NOTICE UNDER SECTION 143(2) CANNOT BE DISPENSED WITH, WE THEREFO RE, HOLD THAT THIS BLOCK ASSESSMENT ORDER FRAMED BY THE AO ON 30-06-1999 IS BAD IN LAW AND THE SAME IS HEREBY QUASHED BY FOLLOWING THIS JUDGMENT O F HONBLE APEX COURT. 6. IN VIEW OF OUR DECISION AS PER ABOVE PARA, AS PE R WHICH, WE HAVE QUASHED THE ASSESSMENT ORDER DATED 30-06-1999 BY FO LLOWING THE JUDGMENT OF HONBLE SUPREME COURT RENDERED IN THE CASE OF HOTEL BLUE MOON (SUPRA), OTHER GROUNDS RAISED BY REVENUE IN THE PRESENT APPE AL QUA OF ACADEMIC INTEREST ONLY AND HENCE, ARE NOT REQUIRED TO BE DEC IDED. 7. IN THE RESULT, THIS APPEAL OF REVENUE I.E. IT(SS )A NO.50/AHD2008 IS DISMISSED. 8. NOW, WE TAKE UP THE SECOND APPEAL OF REVENUE I.E . IT(SS)A NO. 275/AHD/2012. THIS APPEAL IS ARISING OUT OF REVISIO NAL ORDER PASSED BY LD. CIT U/S. 263 IN RESPECT OF ORIGINAL BLOCK ASSESSMENT OR DER PASSED BY ASSESSING OFFICER ON 30-06-1999. AS PER THE ABOVE PARA, WE HA VE ALREADY HELD THAT THIS ORDER OF ASSESSING OFFICER DATED 30-06-1999 IS BAD IN LAW AND WE QUASHED THE SAME. ONCE THE ORIGINAL BLOCK ASSESSMENT ORDER ITSELF IS QUASHED, THE SAME CANNOT BE REVISED BY LD. CIT OR ON HIS DIRECTI ON BY THE AO. THEREFORE, THIS SECOND ORDER OF THE AO DATED 29-12-2009 IS ALS O BAD IN LAW AND DESERVES TO BE QUASHED IN CONSEQUENT OF OUR ORDER REGARDING THE ORIGINAL ASSESSMENT ORDER. THEREFORE, THIS BLOCK ASSESSMENT ORDER IS AL SO QUASHED. UNDER THESE FACTS, VARIOUS SPECIFIC GROUNDS RAISED BY THE REVEN UE IN THIS APPEAL ARE NOT REQUIRED TO BE DISCUSSED AND DECIDED BECAUSE IT WIL L BE AN ACADEMIC EXERCISES ONLY. IT(SS)A NO.50/AHD/08 & 275/AHD/12 B.P.1.4.87 TO 17.6.97 ITO WD-6(5), ABD V. SH BHARAT G PATEL PAGE 6 9. IN THE RESULT, THIS APPEAL OF REVENUE I.E. IT(SS )A NO.275/AHD/2012 IS ALSO DISMISSED. 10. IN COMBINED RESULT, BOTH THE APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (PRAMOD.KUMAR) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, SD/- A. MOHAN ALANKAMONY(AM) *DKP #$%- 28/06/2013 -./ 0 ' ' ' ' 112 112 112 112 32 32 32 32 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. $/$15 6 / CONCERNED CIT 4. 6- / CIT (A) 5. 2 9: 1115, 15!, -./ / DR, ITAT, AHMEDABAD 6. :<= >? / GUARD FILE. BY ORDER/ ' , @/- $ 15!, -./ 0