ACIT Central Circle 1, Mumbai V. Shri Gokul Binani, Mumbai

ITSSA 524/MUM/2004

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 8782 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-11-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 25-10-2010
• Assessment Year: misc
• Appeal Filed On: 17-09-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REENA JHA TRR PATHI
• Keywords: Search and seizure; Procedural lapse; Assessment record; Block assessment
• Section: 143(3); 132

Judgement Text

1 ITA 524/M/10, CO 67/M/08 SHRI GOKUL BINANI IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H BEFORE SHRI P.M. JAGTAP, A.M. AND SMT. ASHA VIJAYAR AGHAVAN, JM IT(SS)A NO. 524/MUM/04 BLOCK PERIOD 1.4.90 TO 7.2.2001 A.C.I.T. CENT. CIR. 1, 9 TH FLOOR, OLD CGO BLDG., ANNEXE, M.K. ROAD, MUMBAI 20. VS. SHRI GOKUL BINANI, RATNAM APARTMENT, 5 TH FLOOR, 4, LITTLE GIBBS ROAD, MUMBAI . 400 006. PAN ADXPB2868F APPELLANT RESPONDENT C.O. NO. 67/MUM/08 ARISING OUT OF IT(SS) NO. IT(SS)A NO. 524/MUM/04 BLOCK PERIOD 1.4.90 TO 7.2.2001 SHRI GOKUL BINANI, RATNAM APARTMENT, 5 TH FLOOR, 4, LITTLE GIBBS ROAD, MUMBAI . 400 006. PAN ADXPB2868F VS. A.C.I.T. CENT. CIR. 1, 9 TH FLOOR, OLD CGO BLDG., ANNEXE, M.K. ROAD, MUMBAI 20. CROSS OBJECTOR RESPONDENT DEPARTMENT BY MS. REENA JHA TRR PATHI ASSESSEE BY SHRI DEEPAK TRALSHAWALA ORDER PER P.M. JAGTAP, A.M. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) CENT. 1 MUMBAI DATED 12.7.04 AND THE SAME IS BEING DISPOSED OF ALONG WITH C.O. FILED BY THE ASSESSEE BEING C.O. NO. 67/MUM/08. 2 ITA 524/M/10, CO 67/M/08 SHRI GOKUL BINANI 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIV IDUAL WHO BELONGS TO BINANI GROUP. A SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CO NDUCTED IN THE CASES BELONGING TO THE BINANI GROUP INCLUDING THE CASE OF THE ASSESSEE. O N THE BASIS OF MATERIAL FOUND DURING THE COURSE OF THE SAID SEARCH ACTION, ADDITION OF ` 5,68,88,000/- WAS MADE BY THE A.O. TO THE UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOC K PERIOD ON PROTECTIVE BASIS. THE SAID AMOUNT WAS ALSO ADDED TO THE UNDISCLOSED INCOME OF SHRI BRAJ BINANI FOR THE BLOCK PERIOD ON SUBSTANTIVE BASIS. ON APPEAL, THE LD. CIT (A) DELETED THE ADDITION OF ` 5,68,88,000/- MADE BY THE A.O. TO THE UNDISCLOSED I NCOME OF THE ASSESSEE ON PROTECTIVE BASIS HOLDING THAT THERE WAS NO BASIS TO MAKE THE S AID ADDITION EVEN ON PROTECTIVE BASIS. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVEN UE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL WHEREAS THE ASSESSEE HAS ALSO FILED HI S C.O. 3. IN THE C.O., THE ASSESSEE HAS RAISED A PRELI MINARY ISSUE CHALLENGING THE VALIDITY OF THE BLOCK ASSESSMENT MADE BY THE A.O. U/S 158BC R.W .S. 143(3) ON THE GROUND THAT THERE WAS NO NOTICE ISSUED BY THE A.O. U/S 143(2) BEFORE MAKING THE SAID ASSESSMENT. KEEPING IN VIEW THIS PRELIMINARY ISSUE RAISED BY THE ASSESS EE IN HIS C.O., THE LD. D.R. WAS DIRECTED TO PRODUCE THE RELEVANT ASSESSMENT RECORD TO PROVE THE SERVICE OF NOTICE U/S 143(2) ON THE ASSESSEE BY THE NEXT DATE OF HEARING WHICH WAS FIXE D ON 24.6.10. THE LD. D.R., HOWEVER, COULD NOT PRODUCE THE RELEVANT RECORD TO PROVE THE SERVICE OF NOTICE U/S 143(2) EITHER ON 24.6.10 OR EVEN 8.9.10. ON 8.9.10, A FINAL OPPORTU NITY WAS GIVEN BY THE BENCH TO THE LD. D.R. TO PRODUCE THE RELEVANT ASSESSMENT RECORD TO P ROVE THE SERVICE OF NOTICE U/S 143(2) ON THE NEXT DATE OF HEARING I.E. 25.10.10. AT THE TIME OF HEARING FIXED ON 25.10.10, THE LD. D.R. HAS FILED A COPY OF LETTER RECEIVED FROM THE A .O. INFORMING ABOUT THE NON- AVAILABILITY OF THE DOCUMENTARY EVIDENCE IN THE REL EVANT ASSESSMENT RECORDS INDICATING THE ISSUANCE OF NOTICE ON THE ASSESSEE U/S 143(2). THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO FILED A COPY OF ORDER DTD. 22.9.10 PASSED BY THE A. O. ON AN APPLICATION FILED BY THE ASSESSEE UNDER THE RIGHT TO INFORMATION ACT, 2005 C ONFIRMING THAT THE INFORMATION/DOCUMENTS AS SOUGHT BY THE ASSESSEE TO SHOW THE ISSUANCE/SERVICE OF NOTICE U/S 143(2) ARE NOT AVAILABLE IN THE RELEVANT RECORD S. THIS INFORMATION AVAILABLE BEFORE US 3 ITA 524/M/10, CO 67/M/08 SHRI GOKUL BINANI IS SUFFICIENT TO DRAW AN ADVERSE INFERENCE AGAINST THE REVENUE THAT THERE WAS NO NOTICE SERVED BY THE A.O. ON THE ASSESSEE BEFORE MAKING AS SESSMENT U/S 158BC R.W.S. 143(3). IN THE CASE OF ACIT VS. HOTEL BLUEMOON 321 ITR 362 CITED BY THE LD. COUNSEL FOR THE ASSESSEE, IT WAS HELD BY THE HONBLE SUPREME COURT THAT IF THE ASSESSMENT IS TO BE COMPLETED U/S 143(3) R.W.S. 158BC, NOTICE U/S 143(2 ) SHOULD BE ISSUED WITHIN ONE YEAR FROM THE DATE OF FILING OF BLOCK RETURN. IT WAS FU RTHER HELD THAT OMISSION ON THE PART OF THE ASSESSING AUTHORITIES TO ISSUE NOTICE U/S 143(2) CA NNOT BE A PROCEDURAL IRREGULARITY AND IT IS NOT CURABLE. IT WAS HELD THAT SERVICE OF NOTICE ON THE ASSESSEE U/S 143(2) WITHIN THE PRESCRIBED PERIOD OF TIME THUS IS A PRE-REQUISITE F OR MAKING BLOCK ASSESSMENT UNDER CHAPTER XIV-B OF THE INCOME TAX ACT 1961 AND THIS R EQUIREMENT CANNOT BE DISPENSED WITH. RESPECTFULLY FOLLOWING THE DECISION OF THE HO NBLE SUPREME COURT IN THE CASE OF HOTEL BLUEMOON (SUPRA), WE HOLD THAT THE BLOCK ASSE SSMENT MADE BY THE A.O. U/S 158BC R.W.S. 143(3) WITHOUT COMPLYING WITH THE PRE-REQUIS ITE CONDITION OF SERVICE OF NOTICE ON THE ASSESSEE U/S 143(2) WAS BAD IN LAW AND THE SAME IS LIABLE TO BE CANCELLED. WE ORDER ACCORDINGLY AND ALLOW THE C.O. FILED BY THE ASSESSE E. 4. IN VIEW OF OUR DECISION RENDERED ABOVE WHILE DISPOSING OF THE C.O. FILED BY THE ASSESSEE CANCELLING THE ASSESSMENT MADE BY THE A.O. U/S 158BC R.W.S. 143(3), THE APPEAL FILED BY THE REVENUE HAS BECOME INFRUCTUOUS. THE S AME IS ACCORDINGLY DISMISSED. 5. IN THE RESULT, THE C.O. FILED BY THE ASSESSE E IS ALLOWED WHEREAS THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 26 TH NOVEMBER, 2010. SD/- SD/- (ASHA VIJAYARAGHAVAN) ( P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 26 TH NOVEMBER , 2010. 4 ITA 524/M/10, CO 67/M/08 SHRI GOKUL BINANI RK COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 1 - MUMBAI 4. THE CIT- CENTRAL 1 MUMBAI 5. THE DR BENCH, H 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI 5 ITA 524/M/10, CO 67/M/08 SHRI GOKUL BINANI DATE INITIALS 1. DRAFT DICTATED 25.10.10 SR.P.S./P.S. 2. DRAFT PLACED BEFORE AUTHOR 2.11.10 SR.P.S./P.S. 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER. - J.M./A.M. 4.DRAFT DISCUSSED/ APPROVED BY SECOND MEMBER. J.M./A.M. 5. APPROVED DRAFT COMES TO THE SR.P.S./P.S. SR.P.S./P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S. 8. DATE OF WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER.