The DCIT, Central Circle-2(2), Ahmedabad V. M/s. Infotech Solutions, Ahmedabad

ITSSA 64/AHD/2008

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 7919 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-12-2011
• Assessment Year: misc
• Appeal Filed On: 28-08-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAMES KURAIR
• Keywords: Block assessment

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD .., .. , ! BEFORE SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER AND SHRI A.K.GARODIA, HONBLE ACCOUNTANT MEMBER IT(SS)A NO.64/AHD/2008 & C.O. NO.221/AHD/2008 (ARISING OUT IT(SS)A NO.64/AHD/2008) BLOCK PERIOD FROM 01/04/1996 TO 21/01/2003 DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(2), AHMEDABAD INFOTECH SOLUTIONS 5/6 SHUBHAM COMPLEX, VASTRAPUR, AHMEDABAD V/S. V/S. M/S INFOTECH SOLUTIONS 5/6, SHUBHAM COMPLEX, VASTRAPUR, PAN NO.AABFM2652M DCIT, CENTRAL CIRCLE- 2(2), AHMEDABAD (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SMT. URVASHI SHODHAN, AR REVENUE BY:- SHRI JAMES KURAIR, DR DATE OF HEARING 01-12-2011 DATE OF PRONOUNCEMENT 09-12-2011 ' ' ' ' /O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER:- THIS APPEAL IS FILED BY REVENUE AND CROSS OBJECTIO N (CO) IS FILED BY ASSESSEE AND THESE ARE DIRECTED AGAINST THE ORDER O F LD. COMMISSIONER OF INCOME-TAX (APPEALS)-III, AHMEDABAD DATED 03-06-200 8 FOR THE BLOCK PERIOD FROM 01-04-1996 TO 21-01-2003. IT(SS)A NO.64/AHD/2008 & CO.221/AHD/2008 B.P.1/4/96 TO 21/ 1/03 DCIT, CC-2(2) ABD V. M/S. INFOTECH SOLUTIONS PAGE 2 2. FIRST WE TAKE UP THE CO FILED BY THE ASSESSEE. T HE ADDITIONAL GROUND HAS BEEN RAISED IN THE CO WHICH IS AS UNDER:- 1. THE NOTICE ISSUED U/S.158BD OF THE ACT (ENCLOSE D HEREWITH) IS VAGUE AND DEVOID OF REQUISITE SATISFACTION TO BE RECORDED BY AO AND HENCE THE ASSESSMENT FRAMED BEING BAD IN LAW IN VIEW OF THE V ARIOUS JUDICIAL PRONOUNCEMENTS BY COURTS OF LAW DESERVES TO BE QUAS HED 3. IT WAS SUBMITTED BY THE AR OF THE ASSESSEE THAT THIS ADDITIONAL GROUND SHOULD BE ADMITTED AS THIS IS A LEGAL GROUND AND TH EREFORE, AS PER THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF NATIONAL THERMAL POWER CORPORATION V. CIT (1998) 229 ITR 383 (SC), THE SAME SHOULD BE ADMITTED AND DECIDED. 4. LD. DR OF THE REVENUE RAISED SOME OBJECTIONS BUT WE ARE CONVINCED THAT THIS IS A LEGAL GROUND AND THEREFORE, AS PER T HE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF NTPC (SUPRA), THE SAME IS ADMITTED. 5. REGARDING THIS ADDITIONAL GROUND LD. AR OF THE A SSESSEE SUBMITTED THAT THIS IS FULLY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION RENDERED IN THE CASE OF ACIT V. SHRI KAUSHIK R SHAH IN ITA NO. 185/AHD/2006 DATED 18-09- 2009. SHE SUBMITTED THE COPY OF ORDER AND POINTED O UT THAT THE NOTICE ISSUED BY ASSESSING OFFICER IN THAT CASE HAD BEEN REPRODUC ED BY THE TRIBUNAL ON PAGE NO.5 AND 6 OF THE TRIBUNALS ORDER AND SHE ALS O SUBMITTED THE COPY OF NOTICE ISSUED BY THE AO IN THE PRESENT CASE ON 01-0 6-2005. IT WAS HER SUBMISSION THAT IN BOTH THE CASES, THE NOTICE IS ID ENTICAL. IT IS ALSO SUBMITTED THAT IN THAT CASE, THE TRIBUNAL HAS FOLLOWED THE JU DGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF MANISH MAHESHWARI V. ACIT (2007) AS REPORTED IN 289 ITR 341 (SC) AND A JUDGMENT OF HONBLE DELHI HIGH C OURT RENDERED IN THE CASE OF NEW DELHI AUTO FINANCE PVT. LTD. V. JCIT (2008) AS REPORTED IN 300 ITR 83 (DEL) AND THEREAFTER DECIDED THE ISSUE IN FA VOUR OF ASSESSEE BY HOLDING IT(SS)A NO.64/AHD/2008 & CO.221/AHD/2008 B.P.1/4/96 TO 21/ 1/03 DCIT, CC-2(2) ABD V. M/S. INFOTECH SOLUTIONS PAGE 3 THAT THERE IS NON-APPLICATION OF MIND ON THE PART O F AO AND THE SATISFACTION OF THE AO IS NOT VISIBLE FROM THE CONTENTS OF THE NOTI CE. IT WAS ALSO HELD BY THE TRIBUNAL THAT NOTICE DOES NOT CONTAIN OR RECORD THE SATISFACTION OF AO NOR OTHER DETAILS AND HENCE, THE NOTICE HAS BEEN HELD AS VAGU E. ON THIS BASIS THE ASSESSMENT WAS QUASHED IN THAT CASE BY FOLLOWING TH E JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF MANISH MAHESHWARI (SUPRA). IT WAS HER SUBMISSION THAT IN THE PRESENT CASE ALSO, THE FACTS ARE IDENTICAL AND HENCE, IN THE PRESENT CASE ALSO, THE ASSESSMENT SHOULD BE QUA SHED. 6. LD. DR OF THE REVENUE SUPPORTED THE ASSESSMENT O RDER. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW AND THE JUDGMENTS CITED BY LD. AR OF THE ASSESSEE. WE FIND THAT IN TH E PRESENT CASE, SEARCH WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF SHRI CHUNI LAL H PUROHIT ON 21-01- 2003 IN CONNECTION WITH SEARCH ACTION IN THE CASE O F GORDHAN CATERERS GROUP . SHRI CHUNILAL H PUROHIT IS FATHER OF SHRI SURESH C PUROHIT AND YOGESH C PUROHIT WHO ARE PARTNERS OF THE ASSESSEE-FIRM AND T HE THIRD PARTNER IS SMT. CHHAGANBEN B PUROHIT, WIFE OF SHRI BHAVANISING PURO HIT. NOW, WE REPRODUCE THE NOTICE ISSUED BY THE ASSESSING OFFICER IN THE P RESENT CASE ON 01-06-2005 ASKING THE ASSESSEE TO FILE BLOCK RETURN WITHIN 16 DAYS OF SERVICE OF NOTICE. THE SAME IS REPRODUCED HERE:- NOTICE U/S 158BD R.W.S 158BC OF THE I.T. ACT, 1961 PAN NO.AABFM2652M BOCK PERIOD 1/4/96 TO 21/01/2003 OFFICE OF THE ASST/ COMMISSIONER OF INCOM E-TAX, CENTRAL CIRCLE-2(2), AAYAKA R BHAVAN 3RD FLOOR, ASHRAM ROAD, AHMEDA BAD TO, D ATE : JUNE 1, 2005 M/S. INFTECH SOLUTIONS, 5/6, SUBHAM COMPLEX, VASSTRAPUR, IT(SS)A NO.64/AHD/2008 & CO.221/AHD/2008 B.P.1/4/96 TO 21/ 1/03 DCIT, CC-2(2) ABD V. M/S. INFOTECH SOLUTIONS PAGE 4 AHMEDABAD, IN PURSUANCE OF THE PROVISIONS OF SECTION 158BD R.W .S. 158BC OF THE ACT, YOU ARE REQUIRED TO PREPARE A TRUE AND COR RECT RETURN OF YOUR TOTAL INCOME INCLUDING THE UNDISCLOSED INCOME IN RE SPECT OF WHICH YOU AS A FIRM IS ASSESSABLE FOR THE BLOCK PERIOD MENTIO NED IN SECTION 158BD R.W.S. 158BC OF THE ACT. THE RETURN SHOULD BE IN THE PRESCRIBED FORM NO.2B A ND BE DELIVERED IN THIS OFFICE WITHIN 16 DAYS OF SERVICE OF THIS NOTICE, DULY VERIFIED AND SIGNED IN ACCORDANCE WITH THE PROVISIO NS OF SECTION 140 OF THE INCOME-TAX ACT, 1961. SD/- G.JAYADEVAN (G.JAYADEVAN) ASSTT. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(2), AHMEDABAD 8. FROM THE TRIBUNALS DECISION, CITED BY AR OF THE ASSESSEE HAVING RENDERED IN THE CASE OF SHRI KAUSHIK R SHAH (SUPRA), WE REPRODUCE THE COPY OF NOTICE ISSUED BY THE ASSESSING OFFICER IN THAT C ASE AND WHICH HAS BEEN REPRODUCED BY THE TRIBUNAL IN PARA-10 OF THIS TRIBUNALS ORDER:- NOTICE U/S 158BD OF THE I.T. ACT, 1961 BLO CK PERIOD ENDING ON 13.12.2001 (I.E. FROM 1.4.1995 TO 13.12.01) P.A.NO./GIR NO. OFFI CE OF THE ASSTT. COMMISSIONER OF INCOME-TAX, CENT. CIR.1(3), AHMEDABAD DATED: 10.11.2003 TO SHRI KAUSHIK R SHAH, 105, MAURYA COMPLEX, NR, C.U. SHAH COLLEGE, AHMEDABAD-14 IN PURSUANCE OF THE PROVISIONS OF SECTION 158BD OF THE INCOME- TAX ACT, 1961, YOU ARE REQUESTED TO PREPARE A TRUE AND CORRECT RETURN OF YOUR TOTAL INCOME INCLUDING THE UNDISCLOSED INCOME IN RESPECT OF WHICH YOU AS INDIVIDUAL ARE ASSESSABLE FOR THE BLOCK MENT IONED IN SECTION 158BA OF THE I.T. ACT, 1961. THE RETURN SHOULD BE IN THE PRESCRIBED FORM NO.28 A ND BE DELIVERED IN THIS OFFICE WITHIN 45 DAYS OF SERVICE OF THIS NOTICE, DULY IT(SS)A NO.64/AHD/2008 & CO.221/AHD/2008 B.P.1/4/96 TO 21/ 1/03 DCIT, CC-2(2) ABD V. M/S. INFOTECH SOLUTIONS PAGE 5 VERIFIED AND SIGNED IN ACCORDANCE WITH THE PROVISIO N OF SECTION 140 OF THE INCOME-TAX ACT, 1961. SD/- S.K. MEHTA ASSTT. COMMISSIONER OF INCOME-TAX, C-1(3), AHMEDABAD 9. NOW, WE ALSO REPRODUCE THE NOTICE ISSUED BY ASSE SSING OFFICER IN THE CASE OF MANISH MAHESHWARI (SUPRA) BECAUSE THE CONTENTS OF THIS NOTICE WAS ALSO REPRODUCED BY THE TRIBUNAL IN THE ORDER IN THE CASE OF SHRI KAUSHIK R SHAH (SUPRA):- TO INDORE CONSTRUCTION CO.(P) LTD. 380, JAWAHAR MARK, INDORE, IN PURSUANCE OF THE PROVISIONS OF S. 158BC OF THE I T ACT, 1961, YOU ARE REQUESTED TO PREPARE A TRUE AND CORRECT RETURN OF Y OUR TOTAL INCOME INCLUDING THE UNDISCLOSED INCOME IN RESPECT OF WHIC H YOU AS AN INDIVIDUAL/HUF/FIRM/COMPANY/AOP/BODY OF INDIVIDUALS /LOCAL AUTHORITY ARE ASSESSABLE FOR THE BLOCK PERIOD MENTIONED IN S.158B (A) OF THE IT ACT, 1961. THE RETURN SHOULD BE I THE PRESCRIBED FORM NO.2B AN D BE DELIVERED IN THIS OFFICE WITHIN 16 DAYS OF SERVICE OF THIS NOTIC E DULY VERIFIED AND SIGNED IN ACCORDANCE WITH THE PROVISIONS OF S. 140 OF THE IT ACT, 1961. (SEARCH WAS CONDUCTED IN THE MONTH OF NOV, 11995). 10. NOW, WE ALSO REPRODUCE THE NOTICE ISSUED BY ASS ESSING OFFICER IN THE CASE OF NEW DELHI AUTO FINANCE P. LTD. (SUPRA), WHICH IS AS UNDER:- NOTICE UNDER S. 158BC/D OF IT ACT, 1961 PAN/GIR NO . BLOCK PERIOD: 1ST APRIL, 1985 TO 20TH MARCH, 1996 INCOME-TAX OFF ICE : DY. CIT SPECIAL RANGE-15, NEW DELHI DT. 26TH OCT. 1998 TO, PRINCIPAL OFFICER, NEW DELHI AUTO FINANCE (P) LTD., 174, KATRA BARYAN, DELHI-6 IN PURSUANCE OF THE PROVISIONS OF S. 158BC/D OF THE IT ACT, 1961, YOU ARE REQUIRED TO PREPARE A TRUE AND CORRECT RETURN O F YOUR TOTAL INCOME INCLUDING THE UNDISCLOSED INCOME IN RESPECT OF WHIC H YOU AS AN IT(SS)A NO.64/AHD/2008 & CO.221/AHD/2008 B.P.1/4/96 TO 21/ 1/03 DCIT, CC-2(2) ABD V. M/S. INFOTECH SOLUTIONS PAGE 6 INDIVIDUAL/HUF/FIRM/COMPANY/AOP/BOI/LOCAL AUTHORITY ARE ASSESSABLE FOR THE BLOCK PERIOD MENTIONED IN S. 158B(A) OF THE IT ACT,1961. THE RETURN SHOULD BE IN THE PRESCRIBED FORM NO.2B A ND BE DELIVERED IN THIS OFFICE WITHIN 16 DAYS OF SERVICE OF THIS NOTIC E, DULY VERIFIED AND SIGNED IN ACCORDANCE WITH THE PROVISIONS OF S. 140 OF THE IT ACT,1961. SD/- (D.V.SINGH), JT. CIT SPECIAL RANGE-15, NEW DELHI, RECD. ON 29TH OCT., 1998 BY. SH. J.B. AGGARWAL. 11. WE FIND THAT THE BASIC CONTENTS OF ALL THE FOUR NOTICES REPRODUCED ABOVE ARE SIMILAR IF NOT IDENTICAL. WE ALSO FIND THAT IN THIS TRIBUNALS ORDER, THE TRIBUNAL ALSO REPRODUCED SIMILAR NOTICES ISSUED IN TWO OTHER CASES, AS PER TRIBUNAL ORDER OF CHANDIGARH BENCH RENDERED IN THE CASE OF ANIL KUMAR JAGADHARI AND ALSO IN THE CASE OF DCIT V. C.S.L. SECURITIES (P) LTD AS PER THE TRIBUNALS ORDER OF DELHI BENCH. IN THOSE CASE ALSO , THE CONTENTS OF NOTICES ARE SIMILAR. THEREAFTER, THE TRIBUNAL HAS DECIDED THIS ISSUE IN FAVOUR OF ASSESSEE BY MAKING FOLLOWING OBSERVATION AS PER PARA-14 & 15 , WHICH ARE REPRODUCED BELOW:- 14. IT IS RELEVANT TO STATE THAT WE HAVE PERUSED T HE NOTICES ISSUED U/S. 1589BD OF THE ACT IN THE CASE OF C.S.L. SECURITIES (P) LTD. (SUPRA) AND ALSO THE NOTICE ISSUED U/S.158BD OF THE ACT IN THE INSTANT CASE. IF WE COMPARE THE NOTICES ISSUED IN THIS CASE WITH THE NO TICE ISSUED IN THE CASE OF M/S. C.S.L. SECURITIES (P) LTD. (SUPRA) WE FIND THAT THE NOTICE IN THE CASE OF THE PRESENT ASSESSEE ISSUED U/S.158BD O F THE ACT IS IDENTICAL TO THE NOTICE OF ISSUED IN THE CASE OF M /S. C.S.L. SECURITIES (P) LTD. (SUPRA). AFTER PERUSING THE NOTICE DATED 10-11 -2003 ISSUED U/S.158BD OF THE ACT, IT WOULD BE CLEAR THAT IT SHO WS NON-APPLICATION OF MIND ON THE PART OF THE A.O. FURTHERMORE, THE SATIS FACTION OF THE AO IS NOT VISIBLE FROM THE CONTENTS OF THE NOTICE. IN VIE W OF THE DECISION OF THE ITAT, DELHI BENCH (SUPRA) IN THE CASE OF C.S.L. SEC URITIES (P) LTD. WE HOLD THAT THE IMPUGNED NOTICE DOES NOT CONTAIN OR R ECORD THE SATISFACTION OF THE ASSESSING OFFICER NOR OTHER DET AILS, SUCH NOTICE IS TO BE HELD AS VAGUE. 15. RESPECTFULLY FOLLOWING THE DECISION OF THE ITAT DELHI BENCH IN THE CASE OF C.S.L. SECURITIES (P) LTD. (SUPRA), WE HOL D THAT THE NOTICE DATED 10-11-2003 ISSUED U/S. 158BD OF THE ACT IS NOT VALI D AS THE SAME DOES IT(SS)A NO.64/AHD/2008 & CO.221/AHD/2008 B.P.1/4/96 TO 21/ 1/03 DCIT, CC-2(2) ABD V. M/S. INFOTECH SOLUTIONS PAGE 7 NOT MEET THE REQUIREMENT OF LAW AS RULED BY THE HON BLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI (SUPRA). ACCORDINGLY, WE QUASHED THE ASSESSMENT ORDER AND ALLOW THE ADDITION AL GROU ND OF APPEAL OF THE ASSESSEE. 12. SINCE, IN THE PRESENT CASE ALSO, THE CONTENTS O F NOTICE ARE IDENTICAL, WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW AND HENCE, BY RESPECTFULLY FOLLOWING THE JUDGMENT OF THE CO-ORDINATE BENCH OF THE TRIBUNAL AND OF HONBLE DELHI HIGH COURT AND OF HONBLE APEX COURT CITED BY LD.AR OF THE ASSESSEE, WE HOLD THAT IN THE PRESENT CASE, THE NOTICE DATED 01-06-2005 ISSUED BY ASSESSING OFFICER U/S.158BD R.W.S 158BC IS NOT VALI D AS THE SAME DOES NOT MEET THE REQUIREMENT OF LAW AS RULED BY HONBLE APE X COURT IN THE CASE OF MANISH MAHESHWARI (SUPRA) AND THEREFORE, WE QUASH THE BLOCK ASSESSME NT ORDER AND ALLOW THE ADDITIONAL GROUND OF APPEAL. 13. SINCE, WE HAVE QUASHED THE BLOCK ASSESSMENT ITS ELF, THEREFORE, OTHER GROUNDS RAISED BY ASSESSEE IN CO ARE NOT TO BE DECI DED BECAUSE THE SAME ARE INFRUCTUOUS, AND SIMILARLY, THE APPEAL FILED BY REVENUE IS ALSO TO BE DISMISSED AS INFRUCTUOUS AND WE ORDER ACCORDINGLY. 12. IN THE RESULT, THE CO FILED BY ASSESSEE IS ALLOWED WHILE THE APPEAL FILED BY REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 09/12/2011 # ' $ %& '() 09 / 12 / 2011 !+ , $ - . SD/- SD/- ( .. ) ( .. ) (D.K.TYAGI) (A.K. GARODIA) ( ) ( ! ) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, *DKP '()- 09/12/2011 . ' ' ' ' $ $$ $ 012 012 012 012 32&1 32&1 32&1 32&1 / COPY OF ORDER FORWARDED TO:- 1. 56 / APPELLANT IT(SS)A NO.64/AHD/2008 & CO.221/AHD/2008 B.P.1/4/96 TO 21/ 1/03 DCIT, CC-2(2) ABD V. M/S. INFOTECH SOLUTIONS PAGE 8 2. 056 / RESPONDENT 3. (( 1 +9 / CONCERNED CIT 4. +9- / CIT (A) 5. 2<= 01' , , / DR, ITAT, AHMEDABAD 6. ? @# / GUARD FILE. BY ORDER/ ' , /TRUE COPY/ A/ (B , .