Laura Fernandes, Goa V. The Assistant Commissioner of Income Tax, Central Circle, Panaji., Panaji

ITSSA 55/PAN/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3426 (ITAT-PANAJI)
• Duration Of Justice: 5 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 08-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRA BHAT JHA
• Assessee Lawyers: D E ROBINSON
• Keywords: Assessment record; Block assessment
• Section: 158BC; 73; 13; 158BD; 69; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI, BENCH PANAJI , , BEFORE SHRI LALIET KUMAR, JM AND DR. MITHA LAL MEENA, AM IT (SS) A NO. 55 /PAN/201 6 ( BLOCK PERIOD : 01.04.1989 TO 01.11.1999 ) M RS. LAURA FERNANDES, BAIRO BONDIR, ST. CRUZ, ILHAS, GOA PAN : AA LPF 0360 P VS ACIT, CENTRAL CIRCLE, PANAJI GOA ( / APPELLANT ) .. ( / RESPONDENT ) AND IT(SS)A NO.56/PAN/2016 ( BLOCK PERIOD : 01. 04.1989 TO 01.11.1999 ) MR. OSWALD FERNANDES BONDIR, ST. CRUZ, ILHAS, GOA PAN : AAABO 0004 C VS ACIT, CENTRAL CIRCLE, PANAJI GOA ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI D.E.ROBINSON, ADV . /REVENUE BY : SHRI PRABHAT JHA, CIT DR / DATE OF HEARING : 05 /1 0 /202 1 / DATE OF PRONOUNCEMENT : 06 /10 /202 1 / O R D E R PER BENCH : TH ESE TWO APPEALS HAVE BEEN FILED BY TWO DIFFERENT ASSESSEE S AGAINST THE SEPAR ATE ORDER S PASSED BY THE CIT(A) - 2, PANAJI, DATED 27.04.2016 AND 12.04.2016 FOR THE BLOCK PERIOD FROM 01.04.1989 TO 01.11.1999. 2. SINCE COMMON GROUNDS HAVE BEEN RAISED BY BOTH THE ASSESSEE S IN BOTH THE APPEALS, THEREFORE, FOR THE SAKE OF CONVENIENCE THE GR OUNDS TAKEN IN IT(SS)A NO.55/PAN/2016 ARE TAKEN TO BE CONSIDERATION FOR DECIDING THE APPEALS, WHICH READ AS UNDER : - 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN CONFIRMING THE IMPUGNED BLOCK ASSESSMENT MADE WITHOUT ISSUING NOTICE U/S.139 CA LLING FOR THE RETURN OF INCOME. 2. THE IMPUGNED BLOCK ASSESSMENT HAVING BEEN MADE UNDER SECTION 158BD IS NOT VALID IN LAW AS NO VALID NOTE OF IT(SS)A NOS. 55&56 /PAN/2016 2 SATISFACTION IS RECORDED BY THE ASSESSING OFFICER IN THE SEARCHED CASE. 3. THE IMPUGNED ASSESSMENT IS BARRED BY LI MITATION AS NOT HAVING BEEN MADE WITHIN THE STATUTORY PERIOD. 4. THE DEPOSIT MADE ON 30.08.1999 BEING BEYOND THE SCOPE OF UNDISCLOSED INCOME IN TERMS OF PROVISIONS OF 158BB(1)(D) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE SAME AS UNDISCLOSED INCOME. 5. THE COMMISSIONER OF INCOME TAX (APPEALS ERRED IN NOT CONSIDERING THE PAST TAX RECORDS OF THE APPELLANT THAT EXPLAIN SOURCE OF INVESTMENT OF THE DEPOSITS TREATED AS UNDISCLOSED. 3. THE LD. AR FOR THE ASSESSEE DREW OUR ATTENTION TO ORDER PASSED BY THE ASSESSING OFFICER IN THE CASE OF RAUL RANCISCO FERNANDES , COPY OF WHICH IS PLACED AT PAGES 4 TO 19 OF THE PAPER BOOK, WHEREIN THE ASSESSING OFFICER IN LAST PORTION OF THE PARA 13.12 HA D MENTIONED AS UNDER : - ..I HOLD THAT ALL THESE FDRS BELONG TO THE ASSESSEE AND HE HAS ACQUIRED THE SAME OUT OF THE UNDISCLOSED INCOME. THE FDRS WERE TAKEN IN THE NAMES OF HIS CLOSE RELATIVES OVER WHOM HE COULD EXERCISE HIS INCLUDENCE FOR USING THE SAME IN THE WAY HE WANTED. THE ENTIRE INVESTMENTS IN F DRS OF RS.10,60,000/ - IS THEREFORE, CONSIDERED FOR TAXATION IN THE HANDS OF SHRI RAUL F.FERNANDES BEING HIS UNDISCLOSED INVESTMENT TAKING RECOURSE TO THE PROVISIONS OF SECTION 69 OF THE ACT. ON THE BASIS OF THE ABOVE SAID, IT WAS SUBMITTED THAT NO SATI SFACTION WAS RECORDED BY THE ASSESSING OFFICER IN THE CASE OF ASSESSEE AS IT IS THE CASE OF RAUL F.FERNANDES THA THE AMOUNT OF THE FDRS BELONG TO RAUL FERNANDES AND NOT WITH THE ASSESSEE BEFORE US. ON THE LAST DATE OF HEARING WE HAD DIRECTED THE LD. DEPA RTMENTAL REPRESENTATIVE TO FILE THE ASSESSMENT RECORD ALONG WITH SATISFACTION NOTE, IF ANY. TODAY, LD. DEPARTMENTAL REPRESENTATIVE HAD FILED LETTER DATED 05.10.2021 TO THE FOLLOWING EFFECT : - IT(SS)A NOS. 55&56 /PAN/2016 3 ON THE BASIS OF THE ABOVE, LD. AR SUBMITTED THAT THERE IS NO S ATISFACTION RECORDED IN THE CASE OF THE ASSESSEE BEFORE US AND, THEREFORE, THE ASSESSMENT MADE IN THE HANDS OF THE ASSESSEE WAS REQUIRED TO BE DELETED. LD.AR ALSO RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME TAX V. CALCUTTA KNITWEARS , 362 ITR 73 AND DREW OUR ATTENTION TO THE PAPER BOOK AT PAGE 69, WHEREIN THE HON'BLE SUPREME HAD HELD AS UNDER : - FOR THE PURPOSE OF SECTION 158BD OF THE ACT A SATISFACTION NOTE IS SINE QUA NON AND MUST BE PREPARED BY THE ASSESSING OFFICER BEFORE HE TRANSMITS THE RECORDS TO THE OTHER ASSESSING OFFICER WHO HAS JURISDICTION OVER SUCH OTHER PERSON. THE SATISFACTION NOTE COULD BE PREPARED AT EITHER OF THE FOLLOWING STAGES: (A) AT THE TIM E OF OR ALONG WITH THE INITIATION OF PROCEEDINGS AGAINST THE SEARCHED PERSON UNDER SECTION 158BC OF THE ACT; (B) ALONG WITH THE ASSESSMENT PROCEEDINGS UNDER SECTION 158BC OF THE ACT; AND (C) IMMEDIATELY IT(SS)A NOS. 55&56 /PAN/2016 4 AFTER THE ASSESSMENT PROCEEDINGS ARE COMPLETED UNDER SECTION 158BC OF THE ACT OF THE PERSON AGAINST WHOM SEARCH WAS CONDUCTED. TO SAY THAT SINCE THE S ATISFACTION NOTE WAS PREPARED AFTER THE PROCEEDINGS WERE COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 158BC OF THE ACT WHICH IS CONTRARY TO THE PROVISIONS OF SECTION 158BD READ WITH SECTION 158BE(2)(BUSINESS) WOULD BE CONTRARY TO THE PLAIN AND SIMPLE L ANGUAGE EMPLOYED BY THE LEGISLATURE UNDER SECTION 158BD OF THE ACT WHICH CLEARLY PROVIDES ADEQUATE FLEXIBILITY TO THE ASSESSING OFFICER FOR RECORDING THE SATISFACTION AFTER THE COMPLETION OF PROCEEDINGS IN RESPECT OF THE PERSON AGAINST WHOM SEARCH WAS COND UCTED UNDER SECTION158BC. HE HAS ALSO RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI [2007] 289 ITR 341 (SC) TO THE EFFECT THAT IN THE ABSENCE OF SATISFACTION NOTE, NO ADDITION CAN BE MADE. HE ALSO DREW OUR ATTENTIO N TO PARA 11, 12 & 13 OF THE ABOVE DECISION OF THE HONBLE SUPREME COURT, WHICH READS AS UNDER : - 11. CONDITION PRECEDENT FOR INVOKING A BLOCK ASSESSMENT IS THAT A SEARCH HAS BEEN CONDUCTED UNDER SECTION 132 , OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A . THE SAID PROVISION WOULD APPLY IN THE CASE OF ANY PERSON IN RESPECT OF WHOM SEARCH HAS BEEN CARRIED OUT UNDER SECTION 132A OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A . SECTION 158BD , HOWEVER, PROVIDES FOR TAKING RECOURSE TO A BLOCK ASSESSMENT IN TERMS OF SECTION 158BC IN RESPECT OF ANY OTHER PERSON, THE CONDITIONS PRECEDENTS WHEREFOR ARE : (I) SATISFACTION MUST BE RECORDED BY THE ASSESSING OFFICER T HAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OF THE ACT; (II) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS SEIZED O R REQUISITIONED HAD BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON; AND (III) THE ASSESSING OFFICER HAS PROCEEDED UNDER SECTION 158BC AGAINST SUCH OTHER PERSON. 12. THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISIONS OF SECTION 158BD , THUS, ARE REQUIRED TO BE SATISFIED BEFORE THE PROVISIONS OF THE SAID CHAPTER ARE APPLIED IN RELATION TO ANY PERSON OTHER THAN THE PERSON WHOSE PREMISES HAD BEEN SEARCHED OR WHOSE DOCUMENTS AND OTHER ASSETS HAD BEEN REQUISITIONED UNDER SECTION 132A OF THE ACT. 13. A TAXING STATUTE, AS IS WELL - KNOWN, MUST BE CONSTRUED STRICTLY. IN SNEH ENTERPRISES V. COMMISSIONER OF CUSTOMS, NEW DELHI [(2006) 7 SCC 714], IT WAS HELD : 'WHILE DEALING WITH A TAXING PROVISION, THE PRINCIPLE OF 'STRICT INTERPRETATION' SHOULD BE APPLIED. THE COURT SHAL L NOT INTERPRET THE STATUTORY PROVISION IN SUCH A MANNER WHICH WOULD CREATE AN ADDITIONAL FISCAL BURDEN ON A PERSON. IT WOULD NEVER BE DONE BY IT(SS)A NOS. 55&56 /PAN/2016 5 INVOKING THE PROVISIONS OF ANOTHER ACT, WHICH ARE NOT ATTRACTED. IT IS ALSO TRITE THAT WHILE TWO INTERPRETATIONS ARE POSSIBLE, THE COURT ORDINARILY WOULD INTERPRET THE PROVISIONS IN FAVOUR OF A TAX - PAYER AND AGAINST THE REVENUE.' 4. PER CONTRA, LD.DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. ADMITTEDLY, THERE IS NO SATISFACTION NOTE ON THE FILE OF THE ASSESSING OFFICER OF THE ASSESSEE BEFORE US AND, THEREFORE, INITIATION OF PROCEEDINGS U/S.158BD R.W.S.158BC BY THE ASSESSING OFFICER WAS WITHOUT RECORDING OF SATISFACTION AS CONTE MPLATED UNDER THE I.T.ACT IS BAD AND AGAINST THE LAW . SINCE THE SATISFACTION WAS NOT AVAILABLE ON THE FILE OF THE ASSESSING OFFICER AS CONFIRMED BY THE LD. CITDR, THEREFORE, WE HAVE NO HESITATION TO HOLD THAT THE ASSESSMENT ORDER AND THE APPELLATE ORDER PA SSED BY BOTH THE AUTHORITIES BELOW WERE WITHOUT ANY BASIS AND WERE AGAINST THE LAW . ACCORDINGLY, GROUND NO.2 OF THE APPEAL OF THE ASSESSEE IN IT(SS)A NO.55/PAN/2016 IS ALLOWED, WHICH IS ALSO PARI MATERIA WITH THE GROUND NO.2 RAISED IN THE APPEAL OF THE ASS ESSEE IN IT(SS)A 56/PAN/2016. SINCE, WE HAVE ALLOWED THE GROUND NO.2 OF THE ASSESSEE BEING LEGAL, THEREFORE, OTHER GROUNDS RAISED IN BOTH THE APPEALS OF THE ASSESSEE, BECOME ACADEMIC. 6 . IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 06 / 10 / 2021. SD/ - SD/ - ( ) (DR. M ITHA LAL MEENA ) ( ) (LALIET KUMAR) / ACCOUNTANT MEMBER / JUDICIAL MEMBER /PANAJI ; DATED 06 /10 /202 1 PRAKASH KUMAR MISHRA, SR.P.S. IT(SS)A NOS. 55&56 /PAN/2016 6 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , /ITAT, PAN AJI 1. / THE APPELLANT - 2. / THE RESPONDENT - ACIT, CENTRAL CIRCLE, PANAJI GOA 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, IT AT, PANJAJI 6. / GUARD FILE. //TRUE COPY//