Shri Sanjay Kumar, Kolkata V. ACIT, Circle - 23, Kolkata, Kolkata

ITSSA 6/KOL/2012

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8254 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-07-2012
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 1998-1999
• Appeal Filed On: 17-02-2012
• Court: TRIBUNAL
• Department Lawyers: A K PRAMANICK
• Assessee Lawyers: B C JAIN
• Keywords: Reasonable cause; Block assessment; Condonation of delay; Documents seized
• Section: 153A; 147; 132

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND ! ' ! ! ' ! ! ' ! ! ' ! , ) [BEFORE SHRI PRAMOD KUMAR, AM & SHRI MAHAVIR SINGH, JM] # # # # / I.T(SS).A NOS. 06 TO 11/KOL/2012 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEARS : 1998-99 TO 2003-04 SHRI SANJAY KUMAR MALL VS. ASSISTANT COMMISSIONE R OF INCOME-TAX, (PAN: AJPPM0769C) CIRCLE-23, KOLKATA. ()* /APPELLANT ) (+)*/ RESPONDENT ) FOR THE APPELLANT: SHRI B. C. JAIN FOR THE RESPONDENT: SHRI A. K. PRAMANICK DATE OF HEARING: 28.06.2012 DATE OF PRONOUNCEMENT: 12.07.2012 , / ORDER PER BENCH: ALL THESE SIX APPEALS BY ASSESSEE ARE ARISING OUT O F COMMON ORDER OF CIT(A)-XIV, KOLKATA IN APPEAL NO.04,05,06,07,08,09/CIT(A)-XIV/1 0-11 DATED 25.01.2012. ASSESSMENTS WERE FRAMED SEPARATELY BY ACIT, CIRCLE-23, KOLKATA U/S. 153C/144 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASS ESSMENT YEARS 1998-99 TO 2003-04 VIDE HIS ORDERS DATED 31.03.2008. 2. THE FIRST ISSUE IN THESE SIX APPEALS OF ASSESSE E IS AGAINST THE ORDER OF CIT(A) IN DISMISSING THESE APPEALS AS UNADMITTED AND TREATING THE SAME AS DELAYED APPEALS BY 1 YEAR 11 MONTHS AND 22 DAYS. THE ISSUE OF THE ASSESSEE IS T HAT ASSESSMENT ORDERS AND DEMAND NOTICES WERE NEVER SERVED ON THE ASSESSEE BUT WERE TAKEN AS CERTIFIED COPIES FOR ALL THESE SIX YEARS. FOR THIS, ASSESSEE HAS RAISED FOLLOWING FOUR EFFECTIVE GROUNDS WHICH ARE COMMON IN ALL THE SIX YEARS. FOR THE SAKE OF CONVENIENCE, WE REPRODUCE THE GROUN DS AS RAISED IN AY 2003-04: 1) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) ERRED IN NOT ADMITTING THE APPEAL FILED ON RECEIPT OF CERTIFIED COPY OF T HE ASST. ORDERS ETC. 2) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN NOT CONSIDERING THE ALTERNATE SUBMISSION OF THE APPELLANT FOR CONDO NATION OF SO CALLED DELAY IN FILING THE APPEAL. 2 IT(SS)A NOS. 06 TO 11/K/2012 SANJAY KUMAR MALL A.Y. 1998-99 TO 2003-04 3) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN NOT CONSIDERING THE EVIDENCES AND SUBMISSIONS REGARDING NON SERVICE OF DEMAND NOTICE PRIOR TO -7/04/2010 (DATE OF RECEIPT OF CERTIFIED COPY). 4) THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN TREATING THE DATE OF SERVICE OF NOTICE OF DEMAND AS 16.04.2008, IGNORING THE FACTS. 3. THE BRIEF FACTS RELATING TO THE ABOVE ISSUE ARE THAT IN ALL THE ABOVE MENTIONED SIX ASSESSMENT YEARS, ASSESSMENTS WERE FRAMED U/S. 153C R.W.S. 144 OF THE ACT ON 31.03.2008. AS PER THE ORDER OF CIT(A), THERE IS SUBSTANTIAL GAP O F ALMOST TWO YEARS BETWEEN THE PASSING OF THESE ASSESSMENT ORDERS AND FILING OF APPEALS BY AS SESSEE ON 08.04.2010 BEFORE HIM. CIT(A) GOT THE FACTS VERIFIED FROM AO AND NOTED THAT THE ASSESSMENT ORDERS, AS PER THE REMAND ORDER OF THE AO DATED 02.07.2010, WERE PASSED U/S. 153C R.W. S. 144 OF THE ACT ON 31.03.2008 AND ALSO SERVED ON ASSESSEE ON 16.04.2008. THE AO FILED COP IES OF ACKNOWLEDGMENT SLIP OF RECEIPT OF ASSESSMENT ORDERS RECEIVED BY ASSESSEE FOR ALL THES E SIX YEARS AND ACCORDING TO AO, ASSESSMENT ORDERS AND DEMAND NOTICES WERE SERVED ON ASSESSEE O N 16.04.2008. IN VIEW OF THESE FACTS, ACCORDING TO CIT(A), THE APPEAL IS DELAYED BY 1 YEA R 11 MONTHS AND 22 DAYS. WHEN THIS WAS POINTED OUT TO ASSESSEE BY CIT(A), THE ASSESSEE STA TED THAT THE DEMAND NOTICE FOR AY 2004-05 WAS SERVED ON ASSESSEE ON 03.04.2008 AND A PROPER R UBBER STAMP OF THE CONCERNED ASSESSEE, THE NAME OF THE RECIPIENT AND DESIGNATION OF PERSON SER VICING NOTICE IS CLEARLY MENTIONED AS INSPECTOR. BUT FOR ASSESSMENT YEARS UNDER CONSID ERATION, IN THE TEAR OFF SLIPS NEITHER THE NAME OF RECIPIENT NOR THE NAMES/DESIGNATION OF THE PERSON SERVICING THE NOTICE IS CORRECTLY MENTIONED. THE ASSESSEE DENIED THE SERVICE OF ANY DEMAND NOTICE FOR ALL THESE SIX YEARS AS ON 16.04.2008 BUT THE ASSESSEES CONTENTION WAS THAT N O DEMAND WAS EVER PRESSED FOR RECOVERY AS THE PREVAILING TREND IN THE DEPARTMENT IS THAT THER E IS ALWAYS PROCEEDINGS FOR COLLECTION OF DEMANDS. CIT(A) AFTER GOING THROUGH THESE FACTS H ELD THAT THE ASSESSMENT ORDERS AND DEMAND NOTICES WERE SERVED ON ASSESSEE ON 16.04.2008 AND, THEREFORE, THERE IS DELAY IN FILING OF APPEAL BY 1 YEAR 11 MONTHS AND 22 DAYS FOR ALL THESE SIX Y EARS. EVEN THOUGH THE ASSESSEE ALSO CONTENDED ALTERNATIVELY THAT THE DELAY BE CONDONED BUT CIT(A) HAS NOT CONDONED THE DELAY AND DISMISSED THE APPEALS AS UNADMITTED FOR ALL THESE S IX YEARS. AGGRIEVED, NOW ASSESSEE IS IN APPEALS BEFORE US. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSMENT ORDERS AND DEMAND NOTIC ES FOR THESE SIX YEARS ARE DATED 31.03.2008 BUT FROM THE REMAND REPORT OF THE AO DATED 09.01.20 12, SUBMITTED TO THE CIT(A), DOES NOT 3 IT(SS)A NOS. 06 TO 11/K/2012 SANJAY KUMAR MALL A.Y. 1998-99 TO 2003-04 CLARIFY WHETHER THESE ACTUALLY WERE SERVED ON ASSES SEE OR NOT. EVEN THE AO HAS CAST DOUBT IN HIS REMAND REPORT ABOUT THIS BY OBSERVING AS UNDER: REGARDING RUBBER STAMP OF THE ASSESSEE: WHILE SER VICING ON THE SALARY ASSESSEE, IT IS OUR PRACTICAL EXPERIENCE THAT MOST OF THE CASES THE ASSESSEE CANNOT GIVE THEIR RUBBER STAMP AND A GOOD NUMBERS OF CASES WE HAVE TO SERVE SOME STAFF CONCERN OF THE ASSESSEE, THEY SIGNED ON BEHALF OF THE ASSESSEE. IN THE INST ANT CASE THE ASSESSEE RECEIVED LETTERS WITHOUT AFFIXING RUBBER STAMP WITH ONLY A INITIAL S IGNATURE WHICH IS ALSO ILLEGIBLE. COPY OF SUCH TEAR OFF ACKNOWLEDGMENT IS ENCLOSED HEREWITH F OR YOUR KIND NOTICE. IT MAY KINDLY BE NOTED THAT IN THE PLACE OF SERVED BY ONLY INITIAL SIGNATURE IS THERE, INSPECTOR/NS NOT WRITTEN IN THE SAID TEAR STILL THAT WAS PROPER SERV ICE AS PER RECORDS SINCE IN THE SIMILAR TYPES OF TEAR OFF ACKNOWLEDGMENT SLIP BUT ALMOST EV ERY POINTS OF THE SUBMISSION OF THE ASSESSEE RELATES TO SERVICES OF DEMAND NOTICE. PRECISELY, IF THIS IS THE CASE THAT THERE IS DOUBT ON ACKNOWLEDGMENT SLIPS FOR SERVICE OF ASSESSMENT ORDERS AND DEMAND NOTICES, WE ARE OF THE VIEW THAT THIS IS MORE THAN A REASONABLE CAUSE FOR CONDONATION OF DELAY IF THERE IS DELAY IN FILING APPEALS. FURTHERMORE, IT IS CLEAR THAT THE ASSESSMENT ORDERS ATTACHED WITH THE APPEAL MEMO BEFORE CIT(A) ARE CERTIFIED COPIES AND CERTIFIED BY ONE DULAL CH. SARDAR (OFFICE SUPERINTE NDENT) RANGE-24 KOLKATA ON 07.04.2010. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CA SE, WE ARE OF THE VIEW THAT, FIRST OF ALL, IT SEEMS THAT THERE IS NO PROPER SERVICE OF ASSESSMENT ORDERS AND DEMAND NOTICES FOR ALL THE RELEVANT SIX YEARS ON THE ASSESSEE. EVEN IF WE PRE SUME THAT THERE IS SERVICE IN VIEW OF THE REMAND REPORT OF THE AO DATED 09.01.2012, WHICH CRE ATES DOUBTS, IS MORE A REASONABLE CAUSE FOR CONDONATION OF DELAY BEFORE CIT(A). HENCE, WE CONDONE THE DELAY OCCURRED BEFORE CIT(A) AND DIRECT HIM TO ADMIT THE APPEALS AND ADJUDICATE THE SAME ON MERITS. 5. ONE MORE ISSUE RAISED BY ASSESSEE IS AS REGARDS TO ASSUMPTION OF JURISDICTION BY AO U/S. 153C OF THE ACT WITHOUT RECORDING SATISFACTION AS M ANDATED BY SECTION 153C OF THE ACT. FOR THIS ASSESSEE HAS RAISED FOLLOWING GROUND NO.5, WHI CH IS COMMON IN ALL THE SIX YEARS, HENCE, WE ARE REPRODUCING FROM AY 2003-04: 5. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) ERRED IN NOT CONSIDERING THAT THE ASSUMPTION OF JURISDICTION BY THE LD. AO U/S. 153C WAS UNJUSTIFIED AND UNLAWFUL. 6. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE OPERATION WAS CARRIED OUT U/S. 132 OF THE ACT ON THE PREMISES OF S.K. MALL COMMERCIAL & S ERVICES PVT. LTD. ON 30.06.2003 AT 1 ST FLOOR 2/6, M. G. ROAD, KOLKATA AND ALSO ON SUBSEQU ENT DATES ON 07.07.2003. IN THE ASSESSMENT ORDER U/S. 153C/144 OF THE ACT FOR ALL THESE ASSESS MENT YEARS, THE AO NOTED THAT ON RECEIPT OF INFORMATION FROM ACIT, CENTRAL CIRCLE-XXII, KOLKATA NOTICES U/S. 153C OF THE ACT WERE ISSUED 4 IT(SS)A NOS. 06 TO 11/K/2012 SANJAY KUMAR MALL A.Y. 1998-99 TO 2003-04 FOR ALL THE SIX YEARS PERTAINING TO AY 1998-99 TO 2 003-04 AND ALSO FOR AY 2004-05 ASSESSMENT WAS REOPENED U/S. 147 OF THE ACT. NO RETURN OF INC OME WAS FILED BY ASSESSEE IN RESPONSE TO NOTICE U/S. 153C OF THE ACT. DCIT, CENTRAL CIRCLE- XXII, KOLKATA VIDE LETTER NO. DCIT/CC- XXII/07-08/KOL/362 DATED 26.10.2007 HANDED OVER SEA RCHED DOCUMENTS TO ACIT, CIRCLE-23 ON 07.11.2007. THE ASSESSEES COUNSEL BEFORE US ALSO P RODUCED COPY OF ORDER SHEET ENTRY NOTED BY ACIT, CENTRAL CIRCLE-XXII, KOLKATA ON 27.03.2006 WH ICH READS AS UNDER: 25.07.2006 : SEEN LETTER OF THE ACIT, CENTRAL CIRC LE-XXII NO.ACIT/CC- XXII/153C/2005-06/KOL/4261 DATED 27.03.2006. A SEAR CH AND SEIZURE OPERATION U/S. 132 WAS CONDUCTED ON 30.06.2003 AND ON SUBSEQUENT DATES IN THE PREMISES OF MALL GROUP, CERTAIN INFORMATION/PARTICULARS OF INCOME HAS BEEN TRACED OUT IN RESPECT OF THE ASSESSEE IN COURSE OF SEARCH. THE PERIOD INVOLVED RELATING TO ASSESSMENT YEAR 1998-99 TO 2003-04. I AM, THEREFORE, SATISFIED THAT THE CASE IS FIT FOR PROCEEDINGS U/S. 153C READ WITH SECTION 153A OF THE I. T. ACT. ISSUE NOTICES U/S. 153C FOR ASSESSMENT YEAR 1998-1999. IN VIEW OF THIS, LD. COUNSEL FOR THE ASSESSEE STAT ED THAT THERE IS NO SATISFACTION RECORDED BY AO OF THE SEARCHED PARTY I.E. DCIT, CENTRAL CIRC LE-XXII, KOLKATA AND IT IS MANDATORY FOR THE AO OF SEARCHED PARTY TO RECORD SATISFACTION IN VIEW OF SECTION 153C(1), WHICH READS AS UNDER: NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSI NG OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERS ON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENT S OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVIN G JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EA CH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME O F SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. THIS PROVISION OF SECTION 153C (1) AS REGARDS TO RE CORDING OF SATISFACTION BY THE AO OF THE SEARCHED PERSON HANDING OVER THE SEIZED MATERIAL TO THE PERSON OTHER THAN THE PERSON SEARCHED IS MANDATORY. ACCORDING TO LD. COUNSEL, THIS IS PA RI MATERIA WITH THE PROVISION OF SECTION 158BD OF THE ACT IN THE CASE OF BLOCK ASSESSMENT. IN THE PRESENT CASE, ACCORDING TO LD. COUNSEL, THERE IS NO SATISFACTION NOTE RECORDED BY AO OF THE SEARCHED PERSON IN THE PRESENT ASSESSEES CASE, NO ASSESSMENT U/S. 153C OF THE ACT CAN BE FRAMED. WE HAVE GONE THROUGH THE PROVISIONS AND ARE OF THE VIEW THAT THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MANISH MAHESWARI VS. ACIT (2007) 289 ITR 341 (SC), WHEREIN HONBLE SUPREME COURT HAS HELD AS UNDER: AS THE ASSESSING OFFICER HAS NOT RECORDED HIS SATI SFACTION, WHICH IS MANDATORY; NOT HAS HE TRANSFERRED THE CASE TO THE ASSESSING OFFICE R HAVING JURISDICTION OVER THE MATTER, WE ARE OF THE OPINION THAT THE IMPUGNED JUD GMENTS OF THE HIGH COURT CANNOT 5 IT(SS)A NOS. 06 TO 11/K/2012 SANJAY KUMAR MALL A.Y. 1998-99 TO 2003-04 BE SUSTAINED, WHICH ARE SET ASIDE ACCORDINGLY. THE APPEALS ARE ALLOWED. HOWEVER, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THERE SHAL L BE NO ORDER AS TO COSTS. RECORDING OF SATISFACTION IS MANDATORY EVEN IN THE ASSESSMENT FRAMED U/S. 153C OF THE ACT BUT IN THE PRESENT CASE AS THE REVENUE COULD NOT PRODUC E BEFORE US ANY SATISFACTION RECORDED BY AO OF THE SEARCHED PERSON, WE ARE OF THE VIEW THAT ASS ESSMENT IN THE ABSENCE OF SATISFACTION NOTE CANNOT BE UPHELD BUT THESE FACTS ARE NOT VERIFIED B Y CIT(A) AS HE HAS DISMISSED THE APPEAL AS UNADMITTED. WE REMIT THIS ISSUE ALSO BACK TO THE F ILE OF CIT(A) FOR FRESH ADJUDICATION IN THE LIGHT OF THE ABOVE OBSERVATIONS. THE CIT(A) WILL A LSO CONSIDER THE DECISION OF MANISH MAHESWARI, SUPRA. ALL THE APPEALS OF ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEALS OF ASSESSEE ARE ALLOWED F OR STATISTICAL PURPOSES 8. ORDER PRONOUNCED IN OPEN COURT ON 12.07.2012. SD/- SD/- , ! ! ! ! ' ! ' ! ' ! ' ! , (PRAMOD KUMAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( - - - -) )) ) DATED : 12TH JULY, 2012 ./ '$01 '2 JD.(SR.P.S.) , 3 ''4 54&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT SHRI SANJAY KUMAR MALL, 216, MAHATMA GA NDHI ROAD, KOLKATA-700 007. 2 +)* / RESPONDENT - ACIT, CIRCLE-23, KOLKATA. 3 . ',$ ( )/ THE CIT(A), KOLKATA 4. ',$ / CIT, KOLKATA 5 . ='> '$ / DR, KOLKATA BENCHES, KOLKATA +4 '/ TRUE COPY, ,$/ BY ORDER, ! 1 /ASSTT. REGISTRAR .