ACIT, PALI V. Shri Om Prakash Mandora, PALI

ITSSA 6/JODH/2008

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8493 (ITAT-JODHPUR)
• Duration Of Justice: 4 year(s) 5 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-09-2012
• Assessment Year: misc
• Appeal Filed On: 10-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K CHOUBAY
• Keywords: Search and seizure; Block assessment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER IT(SS)A NO. 06/JU/2008 BLOCK PERIOD 1989-1990 TO 1999-2000 THE ACIT. VS. SHRI OM PARKASH MANDORA, CIRLE, PALI S/O SHRI MANGI LAL, PALI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.K. CHOUBAY RESPONDENT BY : NONE DATE OF HEARING : 10.09.2012 DATE OF PRONOUNCEMENT : 12.09.2012 ORDER PER N.K.SAINI, A.M. THIS IS AN APPEAL FILED BY THE DEPARTMENT AGAINST T HE ORDER DATED 20.2.2008 DATED OF CIT(A), JODHPUR. 2. THE ONLY GROUND RAISED IN THIS APPEAL READS AS U NDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD CIT(A), JODHPUR HAS ERRED IN HOLDING THAT THE ASSESSMENT BARRED BY LIMITATION IGNORING THE FACT T HAT SEARCH IN THIS CASE HAS CONCLUDED ON THE DATE OF LA ST PANCHNAMA DRAWN ON 13.4.1999 AND RECOVERY OF 2 SEIZURE IS NOT LEGALLY RELEVANT TO THE DATE OF COMP LETION OF THE SEARCH. 2. DURING THE COURSE OF HEARING, NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE, NEITHER ANY ADJOURNMENT WAS SOUGHT. WE, THEREFORE, DISPOSED OF THE APPEAL EX.-PARTE, ON MERIT AFTER HEARING THE LD DR. 3. THE FACTS OF THE CASE IN BRIEF ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERR ED TO AS THE ACT IN SHORT] WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 3.2.1999. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, CERTAIN INCRIMINATING DOCUMENTS HAD BEEN SEIZED. THE ASSESS ING OFFICER FRAMED THE ASSESSMENT U/S 158 BC(C ) OF THE ACT AT AN INCOME O F RS. 33,22,690/- VIDE ORDER DATED 27.4.2001. AGAINST THE SAID ORDER, TH E ASSESSEE PREFERRED AN APPEAL TO THE LD CIT(A) WHO DISMISSED THE APPEAL IN -LIMINE VIDE ORDER DATED 29.1.2004. SUBSEQUENTLY, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE ITAT, JODHPUR WHEREIN VIDE ORDER DATED 13.3.2007 IN APPEA L NO. IT(SS)A 28/JODHPUR/2006 FOR THE BLOCK PERIOD 1989-90 TO 199 9-2000 CONDONED THE DELAY OF ONE DAY AND RESTORED THE APPEAL IN ITS ENT IRETY TO THE FILE TO LD CIT(A) TO DECIDE THE SAME AFRESH. IT WAS ALSO DIRE CTED THAT ANY LEGAL GROUND, IF TAKEN, SHALL ALSO BE DECIDED. BEFORE THE LD CI T(A), THE ASSESSEE CHALLENGED THE VALIDITY OF THE ORDER DATED 27.4.200 1 U/S 158BC AND SUBMITTED THAT SEARCH WAS CONDUCTED AT THE RESIDENTIAL PREMIS ES OF THE ASSESSEE ON 3.2.1999 AND WAS CONCLUDED IN ALL RESPECT ON THE SA ME DAY. HOWEVER, FOR NAME SAKE, THE SEARCH TEAM LOCKED ONE EMPTY ALMIRAH IN THE BED ROOM AND 3 ISSUED PROHIBITORY ORDER U/S 132 (3) OF THE ACT AND THE SAME WAS LATER REVOKED ON 13.4.1999 BUT NOTHING WAS FOUND NOR SEIZ ED FROM THE SAID ALMIRAH ON 13.4.1999. THUS, THE ACTION U/S 132(3) ON 3.2.1 999 WAS ONLY FOR THE NAME SAKE AND THE SAME WAS ARBITRARY, UNLAWFUL AND MEANI NGLESS. IT WAS CONTENDED THAT THE SEARCH WAS ILLEGAL AND UNLAWFULL Y PROLONGED AFTER 3.2.1999, AND THE TIME LIMIT FOR COMPLETION OF THE ASSESSMENT COMMENCED FROM FEBRUARY 1999, THEREFORE, THE BLOCK ASSESSMEN T SHOULD HAVE BEEN COMPLETED ON OR BEFORE FEBRUARY, 2001 AS AGAINST WH ICH THE BLOCK ASSESSMENT WAS MADE ON 27.4.2001. ACCORDINGLY, IT WAS SUBMITT ED THAT BLOCK ASSESSMENT ORDER WAS MADE BEYOND THE TIME LIMIT PRESCRIBED AND HENCE, IT WAS TIME BARRED. 4. THE LD CIT(A) AFTER CONSIDER THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT SEARCH WAS CONDUCTED ON 3.2.1999 AND AS PER PA NCHNAMA OF THE SAID DATE, BOOKS OF ACCOUNT AND DOCUMENTS AS PER PARA NO.5 (B) (I) OF THE PANCHNAMA WERE FOUND WHEREAS OTHER VALUABLE ARTICLES, THINGS INCLUDING MONEY WERE FOUND AS PER PARA 5(B)(II) OF THE PANCHNAMA DATED 3 .2.1999. HE ALSO OBSERVED THAT ONLY BOOKS OF ACCOUNT AND DOCUMENTS W ERE SEIZED BUT NO CASH OR JEWELLERY OR SILVER ARTICLES OR OTHER VALUABLE ITEMS WERE SEIZED. HE ALSO OBSERVED THAT STATEMENT OF THE ASSESSEE WAS RECORDE D (PARA NO.6 OF THE PANCHNAMA) ON 3.2.1999 AND PARA NO.8 OF THE PANCHNA MA DATED 3.2.1999 REVEALED THAT THE SEARCH COMMENCED ON 3.2.1999 AT 8 .45 AM AND THE PROCEEDINGS WERE TEMPORARY CONCLUDED AT 10.30 PM. THE LD. CIT(A) POINTED OUT THAT PARA 8 OF THE PANCHNAMA DATED 3.2.1999 REV EALED THAT ORDER U/S 132(3) WAS PASSED IN RESPECT OF AN ALMIRAH IN LAST BED ROOM OF THE RESIDENCE 4 OF THE ASSESSEE, SUBSEQUENTLY, SEARCH PARTY VISITED THE RESIDENCE OF THE ASSESSEE ON 13.4.1999 AND WITHDREW THE PROHIBITORY ORDERS U/S 132(3) RELATING TO THE ALMIRAH SEALED EARLIER ON 3.2.1999 AND AS FR ESH PANCHNAMA DATED 13.4.1999 WAS DRAWN WHICH REVEALED THAT NOTHING WAS FOUND NOR ANYTHING WAS SEIZED FROM THE SAID SEALED ALMIRAH, THIS FACT WAS CLEAR FROM PARA NOS.5(A) AND 5(B) OF THE PANCHNAMA DATED 13.4.1999. HE ALSO POINTED OUT THAT DURING THE COURSE OF PROCEEDINGS ON 13.4.1999, NO S TATEMENT WAS RECORDED AND THE PROCEEDINGS WHICH COMMENCED AT 2.30 PM WERE CLOSED AT 3.00 PM ON THE SAME DAY I.E. 13.4.1999. ACCORDING TO LD CIT(A ), NOTHING WAS FOUND NOR ANYTHING WAS SIZED ON VACATING THE PROHIBITORY ORDE R AND THE SAID ALMIRAH WAS VACANT AT THE TIME OF PASSING ORDER U/S 132(3) OF THE ACT. HE, THEREFORE, WAS OF THE VIEW THAT THE ALMIRAH WHICH WAS SEALED O N 3.2.1999 WAS WITHOUT ANY BASIS OR PURPOSES AS NOTHING WAS FOUND FROM THE ALMIRAH AND ACCORDINGLY NOTHING WAS SEIZED. LD CIT(A) OPINED THAT THE ENTI RE ACTION ON 13.4.1999 RELATING TO WITHDRAWING THE PROHIBITORY ORDER ISSUE D EARLIER WAS AN EMPTY FORMALITY, THROUGH WHICH THE ALREADY CONCLUDED SEAR CH WAS UNNECESSARILY DRAGGED TO SHOW CONTINUITY THEREOF. HE THEREFORE, HELD THAT SEARCH WAS EFFECTIVELY CONCLUDED ON 3.2.1999. THE LD CIT(A) H ELD THAT THE TIME LIMIT FOR COMPLETION OF THE BLOCK ASSESSMENT WILL HAVE TO BE RECKONED FROM 3.2.1999 ON WHICH DATE THE SEARCH WAS CONCLUDED AGAINST THE ASSESSEE. CONSEQUENTLY, THE BLOCK ASSESSMENT ORDER WAS REQUIRED TO BE PASSE D ON OR BEFORE 28.2.2001 AS AGAINST WHICH THE BLOCK ASSESSMENT ORDER WAS PAS SED ON 27.4.1001. RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS:- I) ACIT VS RAMESH CHAND SONI 81 TTJ 253 (ITAT, JODHP UR) II) ANANTHA N. NAIK VS. ACIT 66 TTJ 533 (ITAT, JODHPU R) 5 III) CIT VS MRS SANDHYA T. NAIK & ORS 253 ITR 534 (BOM ) 5. THE LD CIT(A) ACCORDINGLY TREATED THE BLOCK ASSE SSMENT ORDER PASSED AS TIME BARRED. NOW, THE DEPARTMENT IS IN APPEAL. 6. THE LD. DR SUBMITTED THAT LAST PANCHNAMA AFTER L IFTING THE PROHIBITORY ORDER U/S 132(3) OF THE ACT WAS DRAWN ON 13.4.1999, AS SUCH, THE TIME AVAILABLE FOR COMPLETING THE ASSESSMENT U/S 158 BC WAS AVAILABLE UPTO 30.4.2001 AND THE ASSESSING OFFICER PASSED THE ASS ESSMENT ORDER ON 27.4.2001, THEREFORE, THE LD CIT(A) WAS NOT JUSTIFI ED IN HOLDING THAT THE ORDER PASSED U/S 158BC BY THE ASSESSING OFFICER WAS BARRE D BY LIMITATION. 7. WE HAVE CONSIDERED THE SUBMISSIONS OF LD DR AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THE PRESENT CAS E, IT IS AN ADMITTED FACT THAT THE SEARCH WAS CONDUCTED ON 3.2.1999 AT THE RESIDEN TIAL PREMISES OF THE ASSESSEE AND THE PANCHNAMA WAS DRAWN ON THE SAME DA TE. ALL THE INCRIMINATING DOCUMENTS, VALUABLE JEWELLERY, CASH E TC. WERE FOUND ONLY ON THAT DATE. ON THE SAID DATE OF SEARCH, ONE ALMIRAH WAS SEALED BY PASSING THE PROHIBITORY ORDER U/S 132(3) OF THE ACT ON 3.2.1999 AND THE SAID PROHIBITORY ORDER WAS LIFTED ON 13.4.1999. HOWEVER, NOTHING WA S SEIZED OR FOUND FROM THE SAID ALMIRAH. EVEN NO STATEMENT WAS RECORDED D URING THE COURSE OF PROCEEDINGS ON 13.4.1999 AND THE PROCEEDINGS ON THE SAID DATE WERE CLOSED WITHIN HALF AN HOUR I.E. IT STARTED AT 2.30 PM AND CLOSED AT 3.00 PM, THEREFORE, IT IS NOT KNOWN THAT WHAT WAS THE PURPOS E FOR ISSUING A PROHIBITORY ORDER FOR AN EMPTY ALMIRAH PARTICULARLY WHEN NOTHIN G IS BROUGHT ON RECORD TO 6 SUBSTANTIATE THAT THE ASSESSEE WAS NOT COOPERATING FOR OPENING OF ALMIRAH, IF IT WAS LOCKED AT THE TIME OF SEARCH ON 3.2.1999. O N A SIMILAR ISSUE, THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS WHITE & WHITE MINERALS P. LTD [2011] 330 ITR 172 (RAJ) HAS HELD AS UNDER:- WHERE AFTER REVOKING THE PROHIBITORY ORDER ON DECEMBER 21, 2002 THERE WAS NOTHING TO SHOW THAT ANY FRESH PROHIBITORY ORDER WAS PASSED, NOR THAT TH E SEARCH REMAINED INCOMPLETE OR WAS CONTINUED ON ANY SUBSEQUENT DATE IN THE CLOSE PROXIMITY OR IN CONTINUITY. IT HAS FURTHER BEEN HELD THAT - SINCE ON JANUARY 3, 2003 NOTHING WAS DONE EXCEPT PREPARING PANCHNAMA IT WOULD NOT EXTEND THE TIME LIMIT FOR PASSING AN ORDER OF BLOCK ASSESSMENT. 8. THE SPECIAL LEAVE PETITION FILED AGAINST THE SAI D ORDER HAS BEEN DISMISSED BY THE HON'BLE SUPREME COURT AS REPORTED IN [2010] 322 ITR (ST.)4]. IN THE PRESENT CASE ALSO, AFTER REVOKING THE PROHIBITORY ORDER U/S 132(3) OF THE ACT ON 13.4.2009, NO FRESH PROHIBITOR Y ORDER WAS PASSED AND THE PANCHNAMA DATED 3.2.1999 DID NOT SHOW THAT THE SEAR CH REMAINED INCOMPLETE OR WAS CONTINUED TO BE COMPLETED ON ANY SUBSEQUENT DATE IN THE CLOSE PROXIMITY OR IN CONTINUITY. IN THE INSTANT CASE, N OTHING WAS DONE ON 13.4.1999 EXCEPT MERELY PREPARING THE PANCHNAMA AND THE SEARCH COMMENCED AT 2.30 PM WHICH WAS CONCLUDED AT 3.00 PM. THEREFO RE, IN VIEW OF THE RATIO LAID BY THE HON'BLE SUPREME COURT IN THE AFORESAID REFERRED TO CASE, THE SAID EXERCISE WOULD NOT EXTEND THE TIME LIMIT FOR PASSIN G AN ORDER OF BLOCK 7 ASSESSMENT. IN THAT VIEW OF THE MATTER, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF LD CIT(A) ON THIS ISSUE. ACCORDINGLY, WE DO NOT SEE ANY MERIT IN THE APPEAL OF THE DEPARTMENT AND DISMISS THE SAME. . 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. (ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12.09.2 012 ) SD/- SD/- (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 12 TH SEPTEMBER, 2012 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR