Shri Francisco X. Pacheco, Benaulim V. Deputy Commissioner of Income Tax, Central Circle, Panaji

ITSSA 63/PAN/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3030 (ITAT-PANAJI)
• Duration Of Justice: 3 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-08-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: WT(D)
• Next Hearing Date: 16-06-2022
• Assessment Year: 2008-2009
• Appeal Filed On: 24-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJAN KUMAR
• Keywords: Principle of natural justice; Set aside
• Section: 144; 139; 143(3); 142(1); 153A; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, ‘PANAJI’ BENCH, PANAJI-GOA BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER IT(SS)A Nos.63 to 69/PAN/2018 Assessment Year: 2008-09 to 2014-15 Shri Francisco X. Pacheco HNO. 79/A(1), Fransa House, Church Square, Bhim Vaddo, Benaulim, Salcete, Goa. PAN: AKAPP 9958 J Vs. DCIT, Central Circle, Panaji (Appellant) (Respondent) Present for: Appellant by : Shri N.N. Lotlikar, CA Respondent by : Shri Ranjan Kumar, CIT, DR Date of Hearing : 17.06.2022 Date of Pronouncement : 30.08.2022 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: The present seven appeals by the assessee are arising out of the common order of ld. CIT(A)-2, Panaji dated 25.07.2018 against the respective assessment orders passed for each of the seven years u/s 144 r.w.s. 153A of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) for A.Y. 2008-09, 2009-10 & 2014-15 dated 31.03.2016 and u/s 143(3) r.w.s. 153A for A.Y. 2010-11, 2011-12, 2012-13 & 2013-14 dated 20.12.2016. 2. The grounds raised in all the seven years are common in nature except for difference in their quantum. The summary of grounds in respect of various additions made in the assessments is tabulated below for ease of reference: IT(SS)A Nos.63 to 69/PAN/2018 Shri Francisco X. Pacheco A.Y. 2008-09 to 2014-15 2 Appeal No. A.Y. Unexplained Investments Undisclosed Income Deposits in A/c Others Total IT(SS)A 63/Pan/2018 2008-09 7360000 16354317 23714317 IT(SS)A 64/Pan/2018 2009-10 4050000 10000000 30791378 44841378 IT(SS)A 65/Pan/2018 2010-11 0 0 33351609 546035 33897644 IT(SS)A 66/Pan/2018 2011-12 0 10930988 837029 11768017 IT(SS)A 67/Pan/2018 2012-13 0 35410671 660140 36070811 IT(SS)A 68/Pan/2018 2013-14 0 0 56352258 922787 57275045 IT(SS)A 69/Pan/2018 2014-15 0 439901 6459792 6899693 Total 11410000 10439901 189651013 296599 1 214466905 3. Further, grounds of appeal for one of the seven years i.e. A.Y. 2008-09 are also reproduced for ease of reference: “i. The assessment order passed by the ld. AO u/s 144 r.w.s. 153A of the Income-tax Act, 1961 and sustained by the ld. CIT(A) is without jurisdiction, suffers from infirmity, bad in law and passed without following the principles of natural justice. ii. The Ld. CIT(A) has erred in passing the order ex-parte without noting the issues faced by the appellant, in regard to the documents to support his claims. iii. The Ld. CIT(A) has erred in sustaining the assessment order of the AO without giving hearing opportunity to the appellant and passing the order ex-parte. It is also to be noted that the appellant did not have any documents to support his claim as all their documents and files were seized by Crime Branch, Goa. iv. The Ld. CIT(A) has erred in sustaining the additions made by the AO which are without any base or supporting as all files and documents of the appellant were seized by the Crime Branch, Goa. IT(SS)A Nos.63 to 69/PAN/2018 Shri Francisco X. Pacheco A.Y. 2008-09 to 2014-15 3 v. The appellant craves leave to add, amend, alter, delete or withdraw any or all the grounds of appeal.” 4. Before us, Shri N.N. Lotlikar, CA & Shri S. Nayak, CA represented the Assessee and Shri Ranjan Kumar, CIT, DR represented the Department. 5. Since the grounds raised are common in nature and also ld. CIT(A) has passed a consolidated order for all the seven years taken together, we are inclined to dispose off all the seven appeals before us through this consolidated order by taking the factual narratives from one of the seven years i.e. A.Y. 2008-09. 6. Brief facts of the case are that assessee is engaged in the business of travel agency. Return of income u/s 139 was filed by the assessee on 25.02.2009 reporting a total income of Rs. 9,90,760/-. A search u/s 132 of the Act was carried out in the case of the assessee on 20.02.2014. Notice u/s 153A of the Act dated 22.01.2015 was issued and duly served on the assessee on 29.01.2015. Against the said notice, assessee filed a return of income on 09.03.2016 reporting a total income of Rs. 51,85,952/- with aggregate tax liability of Rs. 17,00,408/, prepaid taxes of Rs. 3,25,517/- and amount payable towards self- assessment tax of Rs. 13,74,891/-. Since the assessee did not pay the tax liability as per return of income, ld. AO issued a notice u/s 139(9) dated 11.03.2016, giving assessee an opportunity to rectify the defect of the return by payment of amount payable towards self-assessment tax by 25.03.2016. According to the ld. AO, since the assessee did not rectify the defect of the return, it was treated as invalid. Subsequently, ld. AO issued notices u/s 142(1) and since replies could not be filed by the assessee, he proceeded to complete the assessment u/s 144 of the Act. It is noted that since the return was treated as invalid owing to IT(SS)A Nos.63 to 69/PAN/2018 Shri Francisco X. Pacheco A.Y. 2008-09 to 2014-15 4 non-payment of self-assessment tax as per the return of income, no notice u/s 143(2) of the Act was issued by the ld. AO. 6.1. This is a fact pattern common to three assessment years under consideration i.e. A.Y. 2008-09, 2009-10 & 2014-15 where the assessment was completed u/s 144 r.w.s. 153A and notice u/s 143(2) has not been issued by the ld. AO since the return has been held to be invalid return in terms of section 139(9) of the Act. In respect of the other four years i.e. A.Y. 2010-11, 2011-12, 2012-13 & 2013-14, the issue of defective return did crop up. Assessee had deposited the tax on the returned income in all the seven years on 31.03.2016 for A.Y. 2008- 09 and on 30.03.2016 for all the remaining six assessment years, details of which were placed before the ld. AO. However, cognizance of payment of self-assessment tax on the returned income was taken on record in respect to four assessment years i.e. A.Y. 2010-11 to A.Y. 2013-14 and the defect pointed out was considered as cured. For these four years, notices u/s 143(2) of the Act were issued and assessments were completed u/s 143(3) r.w.s. 153A of the Act. Additions made in all the seven years have been tabulated in the above chart. 7. Apart from the above facts, certain other background of the case are important to bring on record to address the grounds raised by the assessee, more particularly ground no. 3 and 4 wherein the assessee has pointed out that he did not have any document to support his claim as all his documents and files were seized by Crime Branch, Goa and additions have been made which are without any basis or supporting. 7.1. It is noted that CID, Crime Branch, DonaPaula conducted a search on the assessee on 04.06.2010. Further, a search was conducted by CBI, EOU-V, New Delhi in the case of the assessee on IT(SS)A Nos.63 to 69/PAN/2018 Shri Francisco X. Pacheco A.Y. 2008-09 to 2014-15 5 08.09.2010 wherein a search list and production-cum-seizure memo was prepared for the details of property seized by Police Officer acting under the provisions of Criminal Procedure Code. Both, the search list and the seizure memo are placed on record to demonstrate the details of property/material seized in the said search. In respect of this matters of search by CID, Crime Branch and CBI, EOU-V, relevant proceedings were conducted and finally, Closure Report u/s 173 of Cr.P.C. in the case – CBI RC SIB 2010 E 0005 EOU against the assessee and others was accepted and was accordingly disposed off vide order dated 20.12.2017 by the Judicial Magistrate First Class, ‘F’ Court, Margao, Goa. Similarly, the case in Criminal Miscellaneous Application No. 34/2017, charges were dropped vide opinion dated 22.01.2015 from the Director of Prosecution, State of Goa. 7.2. Assessee had made applications before the Court of the Sessions Judge and Court by CBI, South Goa, Margao dated 15.09.2017 which was registered on 22.09.2017 and dated 14.11.2017. Both the applications specifically mentioned the request to release the material seized as they are required for contesting the appeal before the CIT(A) at Panaji which will otherwise cause hardship and will lead to loss to the assessee. All these documents are also placed on record by the assessee to substantiate the ground taken before us in ground no. 3 and 4 (supra). 8. Coming back to the assessment proceeding in the matters before us, aggrieved by the additions made by the ld. AO, appeals were preferred before the ld. CIT(A). In all the Form 35, in Row no. 8.1 (c) “Details of Taxes Paid”, assessee had filled in self-assessment tax paid by him on the returned income. Ld. CIT(A) passed a consolidated order for all the seven assessment years since the grounds of appeal were IT(SS)A Nos.63 to 69/PAN/2018 Shri Francisco X. Pacheco A.Y. 2008-09 to 2014-15 6 common and dismissed the appeals for non-prosecution by the assessee. 9. Aggrieved, the assessee is in appeal before the Tribunal. 10. At the outset, ld. counsel for the assessee prayed that matter may be remitted back to the file of ld. AO for just and proper appreciation of merits of the case by considering the material which has been seized attached. As referred above, once they are released by the respective authorities to support the prayer made by the ld. counsel, all the relevant documents relating to the proceeding conducted by the CID, Crime Branch and CBI can be placed on record. Ld. Counsel of the assessee also furnished copy of challans in respect of self-assessment taxes deposited by the assessee on the returned income for each of the seven years under consideration. Ld. Counsel also submitted that assessee has taken all the possible measure by making application to the concerned authorities for the release of seized material which will enable the assessee to explain its case in respect of various additions made by the ld. AO in all the seven years. However, the concerned authorities have not acted upon the applications made by the assessee and have not released the seized item for which assessee is making continuous follow up. 10.1. When these submissions of the ld. Counsel were confronted to the ld. CIT, DR, he did not raise any objection on the prayer made by the ld. Counsel for remitting the matter back to the file of ld. AO. However, ld. CIT, DR submitted that when the matter is set aside to the file of ld. AO, a direction may be given to the assessee to comply with the notices diligently and get the proceedings completed expeditiously by avoiding adjournments. IT(SS)A Nos.63 to 69/PAN/2018 Shri Francisco X. Pacheco A.Y. 2008-09 to 2014-15 7 11. We have heard the rival contentions and perused the material on record and given our thoughtful consideration to the issue raised before us. Admittedly, it is a fact on record that assessee has deposited the self-assessment tax on the returned income filed in respect of notices issued u/s 153A of the Act, on 31.03.2016/30.03.2016. Copies of the challans for the taxes so deposited have been produced before us also and are placed on record. In respect of treating the returns filed by the assessee as defective returns, proviso to section 139(9) provides that “provided that where the assessee rectifies the defects after the expiry of the said period of 15 days or the further periods allowed, but before the before the assessment is made, the Assessing Officer may condone the delay and treat the return as valid return”. Thus, considering the proviso to section 139(9) which empowers the ld. AO to condone the delay where the self-assessment tax has been deposited by the assessee after the expiry of 15 days but before the completion of assessment and the fact of deposit of challans on record in terms of the said proviso to section 139(9), we find it proper to direct the ld. AO to treat the said returns as valid returns where the defects have been removed by the assessee, by condoning the delay. Further, we note that assessee has made his earnest attempt by filing his requisite applications before the concerned authorities for the release of seized material and is pursuing the matter, as stated by the ld. Counsel. 12. Considering the prayer made by the ld. Counsel and no objection raised by the ld. CIT, DR on the same, we find it proper to set aside the order of ld. CIT(A) and remit the matter for all the seven years under consideration, back to the file of ld. AO for de-novo assessment considering the material submitted by the assessee, once the same is made available by the respective concerned authorities for which applications have been made for their release. We also direct the ld. AO who is adequately empowered under the Act and has all the where- IT(SS)A Nos.63 to 69/PAN/2018 Shri Francisco X. Pacheco A.Y. 2008-09 to 2014-15 8 whittle to call for the information and records for the purpose of completing the assessment proceeding, to make all the concerted efforts to make the seized material available to the assessee to substantiate his claims. The assessee is also directed to comply with the notices in respect of the assessment proceeding and be diligent by avoiding to take any adjournments except in specific unavoidable circumstances. Considering the submission of the ld. CIT, DR, we also direct the assessee to appear before the ld. AO within one month from the date of receipt of our this order to mark his attendance and enable the initiation of assessment proceeding. Needless to say that the assessee be given a reasonable opportunity of being heard to make his submission in respect of claims made by him in his returns. Since the matter is restored to the file of ld. AO for fresh adjudication in terms of findings and observations made herein above, we are not expressing any view on the merits of the case, so as to limit the assessment procedure. The observations made herein above by us in remanding the matter back to the file of ld. AO will not impair or injure, the case of the revenue nor will it cause any prejudice to the defense/explanation of the assessee on the merits of the case. Accordingly, in terms of the above, the appeals of the assessee for all the seven years are allowed for statistical purposes. 13. In the result, all the seven appeals of the assessee for all the seven years are allowed for statistical purposes. Order pronounced under Rule 34(4) of the IT (AT) rules, 1963 on 30.08.2022. Sd/- Sd/- (CHANDRA MOHAN GARG) (GIRISH AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 30.08.2022. Biswajit, Sr. P.S. IT(SS)A Nos.63 to 69/PAN/2018 Shri Francisco X. Pacheco A.Y. 2008-09 to 2014-15 9 Copy to: 1. The Appellant: Shri Francisco X. Pacheco. 2. The Respondent: DCIT, Central Circle, Panaji. 3. The CIT, Concerned, 4. The CIT (A) Concerned, 5. The DR Concerned Bench //True Copy// [ By Order Sr. Private Secretary