Anup KumarChatterjee, Jamshedpur V. ACIT, Central Circle, Jamshedpur

ITSSA 70/RAN/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1075 (ITAT-RANCHI)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 06-08-2019
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER () ./ I.T(SS).A. NOS. 70 TO 74/RAN/2019 ( ASSESSMENT YEARS : 2005-06, 2006-07, 2007-08, 2008-09 & 2010-11) ANUP KUMAR CHATTERJEE 265, RADIO MAIDAN, ADYA MANDIR PATH, NEW SITARAMDERA, JAMSHEDPUR, JHARKHAND - 831009 / VS. ACIT CENTRAL CIRCLE, JAMSHEDPUR ./ ./ PAN/GIR NO. : ACNPC3733F ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI K. M. ROY, A.R. / RESPONDENT BY : SHRI INDERJEET SINGH, CIT.D.R. !' DATE OF HEARING 06/11/2019 #$%& !' / DATE OF PRONOUNCEMENT 19/12/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEALS DIRECTED AT THE INSTANCE OF A SSESSEE ARISE FROM THE RESPECTIVE ORDERS OF THE COMMISSIONER OF I NCOME TAX (APPEALS) (CIT(A)) FOR DIFFERENT ASSESSMENT YEARS AS TABULATED BELOW: IT(SS)A NOS. NAME OF ASSESSEE AY CIT(A)S ORDER DATED AOS ORDER DATED AOS ORDER UNDER SECTION 70/RAN/19 ANUP KUMAR 2005-06 30.07.19 30.12.11 153A R.W.S. 143(3) OF THE IT(SS)A NOS. 70 TO 74/RAN/19 [ANUP KUMAR CHATTERJEE VS. ACIT] - 2 - CHATTERJEE INCOME TAX ACT (IN SHORT THE ACT) 71/RAN/19 -DO- 2006-07 -DO- -DO- -DO- 72/RAN/19 -DO- 2007-08 -DO- -DO- -DO- 73/RAN/19 -DO- 2008-09 -DO- -DO- -DO- 74/RAN/19 -DO- 2010-11 -DO- -DO- 143(3) OF THE ACT 2. AT THE BEGINNING OF THE HEARING, IT WAS STATED O N BEHALF OF THE ASSESSEE THAT ALL THE FIVE MATTERS CAPTIONED ABOVE ARE INTER-CONNECTED AND INVOLVES COMMON ISSUE. ACCORDINGLY, ALL MATTERS WERE HEARD TOGETHER FOR ADJUDICATION PURPOSES. 3. WE SHALL TAKE ASSESSEES APPEAL IN IT(SS)A NO. 7 0/RAN/2019 CONCERNING AY 2005-06 AS A LEAD CASE FOR ADJUDICATI ON. IT(SS)A NO. 70/RAN/2019 AY - 2005-06 4. GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER: 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN SUSTAINING THE ORDER PASSED BY ASSESSING OFFICER WH ICH HAS BEEN PASSED WITHOUT OBTAINING REQUIRED APPROVAL UNDER SE CTION 153D OF INCOME TAX ACT, 1961. 2. THAT THE ASSESSMENT ORDER, WITHOUT REQUISITE AP PROVAL IS NON-EST IN EYES OF LAW AND HENCE ADDITION NEEDS TO BE QUASH ED. 5. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND W HICH IS REPRODUCED HEREUNDER: THAT INTEREST U/S 234 AND 234B CAN ONLY BE LEVIED ONLY ON THE TOTAL INCOME DECLARED IN THE RETURN AND NOT ON THE INCOME ASSESSED AND DETERMINED BY THE AO. THE ISSUE IS COVERED IN VIEW OF FULL BENCH JUDGMENT OF RANCHI BENCH OF PATNA HIGH COURT IN THE CASE OF SMT. TEJ KUMARI. 6. THE ADDITIONAL GROUND BEING PURELY LEGAL IN NATU RE REQUIRES TO BE ENTERTAINED AS THERE CANNOT BE NO ESTOPPEL AGAIN ST LAW. THE ADDITIONAL GROUND OF APPEAL IS ACCORDINGLY ADMITTED FOR ADJUDICATION. IT(SS)A NOS. 70 TO 74/RAN/19 [ANUP KUMAR CHATTERJEE VS. ACIT] - 3 - 7. WE SHALL ADVERT TO THE MAIN GROUNDS OF APPEAL WH EREBY THE ASSESSEE HAS CHALLENGED THE ACTION OF THE AO IN PAS SING THE ASSESSMENT ORDERS FOR VARIOUS ASSESSMENT YEARS AS P ER THE CAPTIONED APPEALS WITHOUT TAKING THE APPROVAL OF THE COMPETEN T AUTHORITY UNDER S.153D OF THE ACT. 8. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE SUBMITTED THAT ALL THE IMPUGNED ASSESSMENT S IN APPEAL WERE PASSED IN THE SECOND ROUND UNDER S.153A OF THE ACT PURSUANT TO THE DIRECTIONS OF THE ITAT IN THE FIRST ROUND OF HEARIN G. THE ASSESSMENT ORDER PASSED UNDER S.153A/144 R.W.S. 254 OF THE ACT DATED 27.10.2016 IS SUBJECT MATTER OF CHALLENGE. IT WAS POINTED OUT BY THE LEARNED AR FOR THE ASSESSEE THAT IN THE SECOND ROUN D OF PROCEEDINGS BEFORE THE AO PURSUANT TO DIRECTIONS OF THE ITAT FO R FRESH ADJUDICATION AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE, THE AO HAS PASSED THE ASSESSMENT ORDER WITHOUT TAKING APPR OVAL MANDATED UNDER S.153D OF THE ACT. IT WAS CONTENDED THAT LAC K OF APPROVAL UNDER S.153D OF THE ACT WOULD INVALIDATE THE ASSESS MENT ORDER WHICH IS NOT CURABLE DEFECT AS HELD BY THE CO-ORDINATE BE NCH OF TRIBUNAL IN ASHOK KUMAR AGARWAL VS. DCIT ITA NO. 269/AGR/2017 ORDER DATED 18 TH SEPTEMBER, 2019 AND D. S. INDIA JEWELMART P LTD. VS. ACIT ITA NOS. 260 TO 267/AGR/2017 ORDER DATED 18.09.2019 9. THE LEARNED DR FOR THE REVENUE, ON THE OTHER HAN D, RELIED UPON THE ORDER OF THE CIT(A). 10. WE HAVE HEARD THE RIVAL SUBMISSIONS ON THE ISSU E AND PERUSED THE ORDER OF THE CIT(A) DEALING WITH THE ISSUE. TH E CORE ISSUE IN CONTROVERSY IS WHETHER THE AO IS ENTITLED TO OVERLO OK THE MANDATE PROVIDED UNDER S.153D OF THE ACT WHILE PASSING THE ASSESSMENT ORDER IN PURSUANCE TO DIRECTION OF THE TRIBUNAL. IT(SS)A NOS. 70 TO 74/RAN/19 [ANUP KUMAR CHATTERJEE VS. ACIT] - 4 - 11. THE CIT(A) DID NOT SEE ANY MERIT IN THE LEGAL O BJECTION TOWARDS ABSENCE OF APPROVAL UNDER S.153D OF THE ACT. THE RE LEVANT OPERATIVE PARA OF THE ORDER OF THE CIT(A) IS REPRODUCED HEREU NDER FOR READY REFERENCE: I HAVE CAREFULLY PERUSED THE SUBMISSION MADE BY TH E APPELLANT AND THE RELEVANT PROVISIONS GOVERNING THE PROCEDURE FOR SEARCH ASSESSMENTS. CHAPTER-XIV CONTAINING SEC.139 TO SEC. 158 DEALS WITH PROCEDURE FOR ASSESSMENT. AGAIN SEC.153A TO SEC.153 D SPECIFICALLY DEALS WITH ASSESSMENT IN CASE OF SEARCH OR REQUISIT ION. AS PER SEC,153A, WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT , OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SEC TION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH, WITHIN SUCH PERIOD , AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF E ACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS. FURTHER, SEC.1 53D MANDATES THAT, NO ORDER OF ASSESSMENT OR REASSESSMENT SHALL BE PASSED BY AN ASSESSING OFFICER BELOW THE RANK OF JOINT COMMISSIONER IN RES PECT OF EACH ASSESSMENT YEAR REFERRED TO IN SEC.153A. THE WHOLE PURPOSE AND LEGISLATIVE INTENTION BEHIND THIS SAFEGUARD IS TO S EE THAT THE AO BEING A LOWER AUTHORITY, SHOULD NOT PASS ANY HIGH PITCHED O RDER SO AS TO PUT THE ASSESSES TO UNNECESSARY HARDSHIP. FURTHER, SEC.153D ALSO PROVIDES THAT NO APPROVAL OF JOINT COMMISSIONER IS REQUIRED, WHER E THE ASSESSMENT ORDER IS REQUIRED TO BE PASSED WITH PRIOR APPROVAL OF COMMISSIONER U/S. 144BA. THE PURPOSE AND IMPORT OF EXCLUDING THE APPR OVAL OF JOINT COMMISSIONER U/S.144BA IS THAT WHEN A SUPERIOR AUTH ORITY IS INVOLVED IN DIRECTING AND GUIDING THE AO IN FRAMING THE ASSESSM ENT ORDER, THE APPROVAL OF INTERMEDIATE AUTHORITY IS NOT REQUIRED. IN THE INSTANT CASE THE ORDER IS PASSED U/S.254 UNDER THE DIRECTION OF HON'BLE ITAT WHICH IS FAR SUPERIOR TO THE JOINT COMMISSIONER. FURTHER, IN MY CONSIDERED VIEW, THE APPROVAL OF JOINT COMMISSIONER IS REQUIRED ONLY IN THE FIRST ROUND OF ASSESSMENTS WHERE THE AO IS DUTY BOUND TO ISSUE NOT ICE U/S.153A OR 153C AS THE CASE MAY BE IN CONSEQUENCE OF VALID SEA RCH U/S.132(1) OF THE ACT. IF THE PROPOSITION OF THE APPELLANT IS ACCEPTE D, THAN EVERY ORDER PASSED U/S.154, 147, 251, 254, 260. 263 ETC, R.W.S. 153A OR 153C SHALL REQUIRE THE APPROVAL OF JOINT COMMISSIONER U/S.153D , WHICH WAS NEITHER THE SCHEME OF THE ACT OR LEGISLATIVE INTENTION. HEN CE, I HOLD THAT THE ADDITIONAL GROUND RAISED BY THE APPELLANT HAS NO LE GAL BASIS AND ACCORDINGLY DISMISSED . 12. HAVING NOTICED THE FINDINGS OF CIT(A), WE SHALL NOW TURN TO ORDER OF CO-ORDINATE BENCH OF ITAT IN FIRST ROUND O F PROCEEDINGS. ON PERUSAL OF THE ORDER OF THE ITAT IN IT(SS)A NOS. 29 TO 33/RAN/2014 ORDER DATED 11.03.2016 IN FIRST ROUND O F PROCEEDINGS, IT IS NOTICED THAT THE MATTER WAS REMANDED BACK TO THE FILE OF THE AO SUMMARILY OWING TO INADEQUACY IN THE OPPORTUNITY AT THE TIME OF THE IT(SS)A NOS. 70 TO 74/RAN/19 [ANUP KUMAR CHATTERJEE VS. ACIT] - 5 - ASSESSMENT. THE TRIBUNAL HAS RESTORED THE ISSUE BA CK TO THE FILE OF THE AO FOR DE NOVO ASSESSMENT WITHOUT MAKING ANY INDEPENDENT OBSERVATION OF ITS OWN ON MERITS. IN THE CIRCUMSTA NCES, WHERE THE ISSUE WAS KEPT OPEN IN A PLENARY MANNER AND THE AO WAS ENTITLED TO MAKE THE ASSESSMENT AFRESH WITHOUT ANY FETTER, ALL THE PROVISIONS OF THE ACT REQUIRES TO BE APPLIED IN THE SAME MANNER A S WOULD BE APPLICABLE IN THE FIRST ROUND OF ASSESSMENT. WE TH EREFORE ARE OF THE OPINION THAT THE CIT(A) WAS INCORRECT IN REJECTING THE APPEAL OF THE ASSESSEE TAKING SHELTER OF SECTION 144BA OF THE ACT . IT IS TRITE THAT WHERE THE AO IS REQUIRED TO DO A PARTICULAR ACT IN A PARTICULAR MANNER, HE CANNOT BYPASS THE MANDATE OF LAW AND ADO PT A DIFFERENT APPROACH. THE SUPERVISORY POWER MANDATED UNDER S.1 53D OF THE ACT IN CASE OF SEARCH ASSESSMENT COULD NOT BE BYPASSED. THE CO-ORDINATE BENCH IN D. S. INDIA JEWELMART P LTD. (SUPRA) HAS TAKEN NOTE OF VARIOUS JUDICIAL DECISIONS AND ARRIVED AT CONCLUSIO N THAT LACK OF APPROVAL UNDER S.153D OF THE ACT COULD INVALIDATE T HE ASSESSMENT ORDER. THE NONCOMPLIANCE OF SECTION 153D OF THE AC T IS A SUBSTANTIVE DEFECT AND THUS NOT CURABLE. SUCH ABS ENCE OF APPROVAL HAS RENDERED THE ASSESSMENT ORDER PASSED UNDER S.15 3A OF THE ACT AS BAD IN LAW AT THE THRESHOLD. 13. THEREFORE, THE ACTION OF THE CIT(A) IS REVERSED AND THE MAIN GROUND OF THE ASSESSEE IS ALLOWED. 14. WE SHALL NOW TURN TO LEGAL OBJECTIONS RAISED BY WAY OF ADDITIONAL GROUND. THE ADDITIONAL GROUND PERTAINS TO LEVY OF INTEREST UNDER S.234A AND 234B OF THE ACT WITH REFERENCE TO ASSESSED INCOME INSTEAD OF RETURNED INCOME. 14.1 WE FIND THAT IDENTICAL ISSUE HAS COME UP BEFOR E THE CO-ORDINATE BENCH OF ITAT IN ITO VS. M/S. ANAND VIHAR CONSTRUCT ION PVT. LTD. IT(SS)A NOS. 70 TO 74/RAN/19 [ANUP KUMAR CHATTERJEE VS. ACIT] - 6 - ITA NO. 335/RAN/2017 ORDER DATED 28.11.2018 WHEREIN THE ISSUE WAS DEALT WITH AS UNDER: 16. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL ON RECORD. PRIMA FACIE THE DISPUTED ISSUE, BEING CHARG ING OF INTEREST U/S.234A & 234B AS ENVISAGED BY LD. AR, IS COVERED BY THE DECISION OF HOB'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF AJ AY PRAKASH VERMA IN ITA NO.38 OF 2010 REPORTED IN 2013(1) TMI 140. THE HON'BLE COURT IN PARA23&24 HELD AS UNDER :- '23. LEARNED COUNSEL FOR THE APPELLANT SUBMITTED TH AT IT HAS BEEN ORDERED BY THE AO THAT INTEREST BE CHARGED AS PER R ULE. INTEREST CAN BE LEVIED UNDER SECTION 234A AND 234B OF THE AC T. IT IS SUBMITTED THAT IN VIEW OF THE JUDGMENT OF FULL BENC H OF RANCHI BENCH OF PATNA HIGH COURT DELIVERED IN THE CASE OF SMT. TEJ KUMARI VRS. COMMISSIONER OF INCOME-TAX REPORTED IN [2001] THE INTEREST CANNOT BE LEVIED OVER THE ASSESSED INCOME AND IT CAN BE LEVIED ONLY ON THE INCOME DECLARED IN THE RETURN. T HE REVENUE PREFERRED SLP BEFORE HON'BLE SUPREME COURT AGAINST THE SAID JUDGMENT OF THE FULL BENCH OF PATNA HIGH COURT, WHI CH WAS DISMISSED BY THE HON'BLE SUPREME COURT ON MERITS VI DE ORDER DATED 01.08.2000 BY SAYING THAT THERE IS NO MERIT I N THE APPEAL. 24. LEARNED COUNSEL FOR THE REVENUE COULD NOT DISPU TE THIS LEGAL POSITION. THEREFORE, SO FAR AS QUESTION OF LAW INVOLVED IN TH IS APPEAL THAT WHETHER THE INTEREST COULD HAVE BEEN LEVIED AGAINST THE ASSESSED INCOME OF THE ASSESSEE UNDER SECTIONS 234A AND 234B IS CONCERNED, IN VIEW OF THE FULL BENCH JUDGMENT OF RA NCHI BENCH OF PATNA HIGH COURT DELIVERED IN THE CASE OF SMT. TEJ. KUMARI, THE REVENUE CAN LEVY THE INTEREST ONLY ON THE TOTAL INC OME DECLARED IN THE RETURNS AND NOT ON THE INCOME ASSESSED AND DETE RMINED BY THE AO TO THAT EXTENT. THE ORDERS PASSED BY THE AUTHORI TIES BELOW ARE ACCORDINGLY MODIFIED AND INTEREST SHALL BE CHARGEAB LE IN THE LIGHT OF THE FULL BENCH JUDGMENT, REFERRED ABOVE.' 17. LD. AR ALSO PLACED RELIANCE ON THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI GIRDHARI LAL SHARM A VS. ITO, WARD- 1(4), JAMSHEDPUR IN ITA NO. 31/RAN/2013 BY AN ORDER DATED 07.05.2012 IN PARA NO. 6 RELYING UPON THE ABOVE DECISION OF TH E HON'BLE JHARKHAND HIGH COURT HELD :- 'WE ACCORDINGLY FOLLOWING THE ABOVE DECISION, DIREC T THE ASSESSING OFFICER TO RE-COMPUTE THE INTEREST UNDER SECTION 2348 ON THE BASIS OF THE TOTAL INCOME DECLARED BY THE AS SESSEE IN THE RETURN FILED.' 18. WE RESPECTFULLY FOLLOWING THE DECISION OF THE J URISDICTIONAL HIGH COURT AND THE DECISION OF COORDINATE BENCH OF THE T RIBUNAL DIRECT THE AO TO RECOMPUTED THE INTEREST U/S.234B ON THE BASIS OF TOTAL INCOME DECLARED BY THE ASSESSEE IN THE RETURN FILED. THIS GROUND OF CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. IT(SS)A NOS. 70 TO 74/RAN/19 [ANUP KUMAR CHATTERJEE VS. ACIT] - 7 - 14.2 IN CONSONANCE WITH THE VIEW EXPRESSED BY THE C O-ORDINATE BENCH HOLDING THAT INTEREST UNDER S.234A & 234B OF THE ACT IS CHARGEABLE WITH REFERENCE TO RETURNED INCOME ONLY, WE ARE INCLINED TO ADJUDICATE THE LEGAL OBJECTION RAISED BY WAY OF ADD ITIONAL GROUND IN FAVOUR OF THE ASSESSEE. 14.3 IN THE RESULT, ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. 15. IN THE RESULT, CAPTIONED APPEAL FILED BY THE AS SESSEE IS ALLOWED AND IN PARITY ALL OTHER CAPTIONED APPEALS ARE ALSO ALLOWED. SD/- SD/- (MADHUMITA ROY) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER RANCHI: DATED 19/12/2019 TRUE COPY S. K. SINHA / COPY OF ORDER FORWARDED TO:- ). / REVENUE 2. / ASSESSEE +. ,-.! /! / CONCERNED CIT 4. /!- / CIT (A) 2. 345 6!6-.7 ' -.&7 / DR, ITAT, RANCHI 9. 5:; < / GUARD FILE. BY ORDER, SR. PRIVATE SECRETARY ITAT, AHMEDABAD THIS ORDER PRONOUNCED IN OPEN COURT ON 19/12/2019