Meghmani Organic Ltd., Ahmedabad V. The Dy.CIT., Cent.Circle-1(1), Ahmedabad

ITSSA 763/AHD/2010

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9091 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-03-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 25-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: S N SOPARKAR
• Keywords: Search and seizure; Block assessment
• Section: 153A; 132; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , .. , '# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI T.R.MEENA, ACCOUNTANT MEMBER ./ I.T(SS).A. NO.763/AHD/2010 ( % & '& / ASSESSMENT YEAR : 2006-07) MEGHMANI ORGANICS LTD. MEGHMANI HOUSE SHRINIVAS SOCIETY NR.VIKAS GRUH ROAD AHMEDABAD % / VS. DCIT CENTRAL CIRCLE-1(1) AHMEDABAD ./ ./ PAN/GIR NO. : AABCM 0644 E ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S.N.SOPARKAR, A.R. / RESPONDENT BY : SHRI RAHUL KUMAR, SR.D.R. / DATE OF HEARING : 19/03/2013 !'# / DATE OF PRONOUNCEMENT : 30/4/13 $% / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING F ROM THE ORDER OF LD.CIT(A)-I, AHMEDABAD DATED 27/09/2010 PASSE D FOR A.Y.2006-07 CHALLENGING THE LEVY OF PENALTY U/S.271(1)(C) OF RS .75,79,740/-. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING PENALTY ORDER PASSED U/S.271(1)(C) DATED 23.02.2010 AND THE ASSESSMENT IT(SS)A NO.763/ AHD/2010 MEGHMANI ORGANICS LTD. VS. DCIT ASST.YEAR 2006-07 - 2 - MADE U/S.143(3) RWS 153C RWS 153B(1)(B) OF THE IT A CT DATED 31.12.2008 WERE THAT THE ASSESSEE-COMPANY WAS SUBJE CTED TO A SEARCH OPERATION U/S.132(1) OF IT ACT. THEREUPON, AN ASSESSMENT WAS MADE ON AN INCOME OF RS.19,96,66,450/-. IN CON SEQUENCE, THE IMPUGNED PENALTY WAS LEVIED. AT THE OUTSET, WE H AVE BEEN INFORMED THAT THE SAID ASSESSMENT ORDER STOOD QUASH ED BY THE ITAT A BENCH AHMEDABAD IN IT(SS)A NOS.224/AHD/2010 AN D 189/AHD/2009 FOR AY 2006-07 IN ASSESSEES OWN CASE, DATED 26/10/2012, WHEREIN VIDE PARAGRAPH NOS.4 & 5, THE T RIBUNAL HAS QUASHED THE IMPUGNED ASSESSMENT ORDER. SINCE THE A SSESSMENT ORDER ITSELF HAS BEEN QUASHED, THEN AUTOMATICALLY THE CON SEQUENTIAL PENALTY U/S.271(1)(C) DID NOT SURVIVE. FOR READY R EFERENCE, RELEVANT PARAGRAPHS ARE REPRODUCED BELOW:- 4. AFTER HEARING BOTH THE PARTIES AND PER USING THE RECORD WE FIND THAT THERE IS NO DISPUTE THAT THE SEARCH TOOK PLACE IN THIS CASE ON 22.09.2005 I.E. THE YEAR UNDER APPEAL. THEREFORE, T HE RATIO AS LAID DOWN BY HON'BLE TRIBUNAL IN THE CASE OF DR. MANSUKH KANJ IBHAI SHAH (SUPRA) IS SQUARELY APPLICABLE TO THE FACTS OF THIS CASE. R ELEVANT PORTION OF THE SAID DECISION READ AS UNDER: - '9.1 SECTION 153A OF THE IT ACT STARTS WITH THE WOR D 'NOTWITHSTANDING ANYTHING CONTAINED', IT IS NON-OBSTANTE CLAUSE. FOR APPLICABILITY OF ABOVE PROVISION, THE INITIATION OF SEARCH IS NECESS ARY. ONCE A WARRANT OF AUTHORIZATION OR REQUISITION IS ISSUED AND SEARC H IS CONDUCTED AND PANCHNAMA IS DRAWN, THE COMPLETED ASSESSMENTS FOR T HE ALL THE RELEVANT YEARS WOULD GET REOPENED IRRESPECTIVE OF W HETHER ANY INCRIMINATING MATERIAL IS FOUND OR NOT IN RELATION TO A PARTICULAR AY. IN OTHER WORDS, EVEN IF THE MATERIAL FOUND SHOWS TH E CONCEALMENT IN ONLY ONE YEAR, ALL THE COMPLETED ASSESSMENTS FALLIN G IN THE PERIOD OF SIX AYS PRECEDING THE YEAR OF SEARCH WILL GET REOPE N. THERE WAS AN IDENTICAL PROVISION CONTAINED IN CHAPTER XIV-B OF T HE ACT, WHICH PROVIDES THAT WHERE AFTER 30 TH JUNE, 1995, A SEARCH IS INITIATED U/S 132 IT(SS)A NO.763/ AHD/2010 MEGHMANI ORGANICS LTD. VS. DCIT ASST.YEAR 2006-07 - 3 - OR BOOKS ACCOUNTS ETC. ARE REQUISITIONED U/S 132A, THE AO SHALL PROCEED TO ASSESS UNDISCLOSED INCOME IN ACCORDANCE WITH PROVISIONS OF CHAPTER XIV-B FOR MAKING ASSESSMENT FOR BLOCK PE RIOD BUT IN THE BLOCK ASSESSMENTS, THE QUESTION OF ASSESSING AN UND ISCLOSED INCOME IN RELATION TO ANY AY WAS RESTRICTED TO THE INCRIMINAT ING MATERIAL ON UNDISCLOSED ASSETS DISCOVERED DURING THE COURSE OF SEARCH AND SEIZURE OR IN THE POST SEARCH INQUIRY THE MATERIAL WAS RELA TABLE TO SUCH EVIDENCE DISCOVERED IN SEARCH. THE INCOME ASSESSED IN THE REGULAR ASSESSMENTS WAS NOT TO BE CONSIDERED IN THE BLOCK A SSESSMENTS. HOWEVER, IN THE PRESENT PROVISIONS U/S 153A, THERE IS NO SUCH PROVISION PROVIDED IN THE ACT. ONCE WARRANT OF AUTH ORIZATION IS ISSUED AND THE SEARCH IS CONDUCTED AND PANCHNAMA IS DRAWN/ THE ASSESSMENTS FOR ALL THE SEVEN YEARS INCLUDING THE CURRENT YEAR HAVE TO BE COMPLETED U/S 153A, 153B AND 153C. EVEN THE ASSESSMENTS WHICH ARE COMPLETED BEFORE THE DATE OF SEARCH SHALL GET REOPENED AND TH OSE ASSESSMENTS WHERE THE PROCEEDINGS ARE PENDING AT THE TIME OF SE ARCH SHALL ABATE. THE AO, THEREFORE, SHALL ASSESS OR REASSESS SUCH IN COME FOR ALL THESE YEARS. 9.2 THE ABOVE PROVISION, THEREFORE, PROVIDES FOR RE OPENING OF THE COMPLETED ASSESSMENT OR ABATEMENT OR THE PENDING AS SESSMENTS TAKES PLACE IRRESPECTIVE OF WHETHER ANY INCRIMINATING MAT ERIAL IS FOUND DURING THE COURSE OF SEARCH OR NOT. IT CAN BE ILLUS TRATED BY TAKING AN EXAMPLE THAT IF DURING THE COURSE OF SEARCH AND SEI ZURE PROCEEDINGS, CERTAIN UNACCOUNTED VALUABLES OR MONEY IS FOUND AT THE TIME OF SEARCH WITHOUT THERE BEING INCRIMINATING MATERIAL OR DOCUM ENT FOR ANY OTHER YEAR OR YEARS, EVEN THEN ALL THE SIX ASSESSMENTS PR ECEDING THE ASSESSMENT YEAR IN WHICH SEARCH TOOK PLACE SHALL GE T REOPENED. SIMILARLY, IF REQUISITION IS MADE THEN IRRESPECTIVE OF WHETHER THERE IS ANYTHING INCRIMINATING FOUND AGAINST HIM IN RELATIO N TO OTHER YEAR OR YEARS OR NOT, THE ASSESSES HAS TO UNDERGO THE RIGOR OF THE ASSESSMENT PROCEEDINGS FOR ALL THE SIX YEARS AS WELL AS THE YE AR UNDER SEARCH.' 5. IN VIEW OF THE ABOVE, WE HAVE NO HESITATION IN HOLDING THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS U/S 153C R.W.S. 153A OF THE ACT. SINCE HON'BLE ITAT IN ITA NO.2938-2942/AHD/2008 DAT ED 16.01.2009 IN ASSESSEE'S OWN CASE HAS ALREADY HELD THAT THE OR DER PASSED BY THE ASSESSING OFFICER U/S 153C R.W.S. 153A WERE NOT SUS TAINABLE IN LAW AND THE SAME WERE QUASHED, THE ORDER PASSED BY THE ASSE SSING OFFICER FOR THE YEAR UNDER APPEAL IS ALSO HEREBY QUASHED. IT(SS)A NO.763/ AHD/2010 MEGHMANI ORGANICS LTD. VS. DCIT ASST.YEAR 2006-07 - 4 - 3. UNDISPUTEDLY, THE IMPUGNED ASSESSMENT ORDER ITS ELF NOW STOOD QUASHED BY THE RESPECTED COORDINATE BENCH FRO M WHERE THE PENALTY IN QUESTION HAS GERMINATED, THEREFORE, IN C ONSEQUENCE THEREOF, THIS PENALTY U/S.271(1)(C) DO NOT SURVIVE ANY MORE, HENCE HEREBY DIRECT TO REVOKE THE SAME. IN PRINCIPLE GRO UNDS ARE ALLOWED. 4. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. SD/- SD/- ( &..'# ) ( ' ' ( ) $ )* $ ( T.R. MEENA ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30/ 4 /2013 &.., .*../ T.C. NAIR, SR. PS ') * +,- .'-' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. , -. / / CONCERNED CIT 4. / () / THE CIT(A)-I, AHMEDABAD 5. 234 **-., -.#, 5'$,$ / DR, ITAT, AHMEDABAD 6. 467 8 / GUARD FILE. ')% / BY ORDER, 2 * //TRUE COPY// // 0 ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DIRECT DICTATION ON COMPUTER DATED 6.4.13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 25.4.13 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S 30.4.13 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30.4.13 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER