Trishul Hi-Tech Industries, Kolkata V. DCIT, Central Circle - XI, Kolkata, Kolkata

ITSSA 83/KOL/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0356 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-09-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 04-05-2011
• Court: TRIBUNAL
• Department Lawyers: SWETABH SUMAN
• Keywords: Documents seized
• Section: 153A; 80IB; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A , KOLKATA [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE S RI SHAMIM YAHYA, AM ] IT(SS)A NO.83/KOL/2011 ASSESSMENT YEAR : 2003-04 ( APPELLANT ) (RESPONDENT) TRISHUL HI-TECH INDUSTRIES -VS- D.C.I.T., CENTRA L-XI, KOLKATA KOLKATA (PAN:AACFT 3457 G) FOR THE APPELLANT SHRI SOMNATH GHOSH, ADVOCATE FOR THE RESPONDENT SHRI SWETABH SUMAN, CIT(DR) DATE OF HEARING : 27.08.2014 DATE OF PRONOUNCEMENT : 24. 09.2014. ORDER PER SHRI SHAMIM YAHYA, AM THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST ORDER OF LD. C.I.T.(A)- CENTRAL-I, KOLKATA DATED 03.01.2011 AND PERTAINS T O ASSESSMENT YEAR 2003-04. 2. THE GROUNDS OF APPEAL RAISED IN THIS APPEAL REA D AS UNDER :- 1. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, THE LD.COMMISSIONER OF INCOME TAX(APPEALS) CENTRAL-I, KOLKATA ACTED UNLAWF ULLY IN FAILING TO APPRECIATE THAT NONE OF THE CONDITIONS PRECEDENT EXISTED AND/OR HAV E BEEN COMPLIED WITH AND/OR FULFILLED FOR THE LD. DEPUTY COMMISSIONER OF INCOME TAX, CENT RAL CIRCLE XI, KOLKATA TO ASSUME JURISDICTION U/S 153C OF THE INCOME TAX ACT, 1961 A ND THEREBY UPHOLDING THE ASSESSMENT ORDER U/S 153C/143(3) OF THE ACT SIMPLY FOLLOWING T HE FINDINGS IN THE ASSESSMENT ORDER PASSED IN ORIGINAL ASSESSMENT PROCEEDING WITHOUT AN Y APPLICATION OF MIND ON THE MATTER AND /OR PASSING ANY SPEAKING ORDER ON THE ISSUES IN VOLVED AND HIS PURPORTED FINDINGS ON THAT BEHALF ARE ABSOLUTELY IS AB INITIO VOID, ULTRA VIRES AND NULL IN LAW. 2. FOR THAT THE SPECIOUS ACTION OF THE LD.COMMISSI ONER OF INCOME TAX (APPEALS) CENTRAL I, KOLKATA IN UPHOLDING THE ACTION OF THE L D.DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE XI, KOLKATA OF DENIAL OF DEDUCT ION CLAIMED U/S 80IB OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF TRANSPORT SUBSIDY AND C RANE HIRE CHARGES ON THE ALLEGATION THAT SUCH RECEIPTS BEING OF INCOME NATURE IS ALTOGE THER UNLAWFUL, ILLEGAL, INVALID AND UNTENABLE IN LAW. 3. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APP EALS) CENTRAL I, KOLKATA WAS UNJUSTIFIED IN UPHOLDING THE FINDING OF THE LD.DEPU TY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE XI, KOLKATA DENYING CLAIM OF DEDUCTI ON UNDER THE PROVISIONS OF S.80IB OF THE INCOME TAX ACT, 1961 DERIVED ON ACCOUNT OF TRAN SPORT SUBSIDY AND CRANE HIRE IT(SS)A.83/K/2011 TRIS HUL HI-TECH INDUSTRIES A.YR.2003-04 2 CHARGES WITHOUT CONSIDERING THE PITH AND SUBSTANCE OF THAT ENACTMENT AND HIS PURPORTED FINDING ON THAT BEHALF IS WHOLLY CAPRICIOUS, UNREAS ONABLE AND PERVERSE. 4. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) CENTRAL I, KOLKATA MISREAD FACTS, CONSIDERED IMPROPER ISSUES, FAILED T O CONSIDER PROPER POSITION IN LAW, MISPLACED ONUS OF PROOF AND CAME TO ERRONEOUS FINDI NGS THEREUPON IN UPHOLDING THE IMPUGNED ACTION OF THE LD.DEPUTY COMMISSIONER OF IN COME TAX, CENTRAL CIRCLE-XI, KOLKATA WHICH IS NOT PREDICATED ON MERITS. 3. AT THE OUTSET, IN THIS CASE THE LD. COUNSEL OF T HE ASSESSEE CHALLENGED THE ASSESSMENT ORDER PASSED IN THIS CASE ON THE GROUND THAT THE AO HAS NO JURISDICTION IN THIS CASE TO PASS AN ORDER U/S 153C OF THE ACT FOR THE CONCERNED ASSESSMENT YEAR AS THE SAME IS BEYOND THE PERIOD OF LIMITAITON. THE DETAIL ED SUBMISSIONS IN THIS REGARD ARE REPRODUCED AS UNDER :- THE PROVISIONS OF S.153C OF THE INCOME TAX ACT, 19 61 CONFERS AUTHORITY FOR THE ASSESSMENT OF INCOME OF ANY OTHER PERSON OTHER THAN THE PERSON SEARCHED AND THE CONDITIONS PRECEDENT FOR INVOKING SUCH PROVISIONS A GAINST SUCH OTHER PERSON ARE : 1. THE SEARCH OR REQUISITION MUST HAVE TAKEN PLACE IN CASE OF ANY PERSON. 2. WHERE THE ASSESSING AUTHORITY IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR OTHER THINGS OR BOOKS OF ACCOU NTS OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER T HAN THE PERSON REFERRED TO IN SEC.153A. 3. THE BOOKS ACCOUNTS OR DOCUMENTS OR ASSET SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING AUTHORITY HAVING JURISDICTION OVER SUCH OTHER PERSON. 4. THE ASSESSING OFFICER HAS TO PROCEED U/S 153C OF THE ACT AGAINST SUCH OTHER PERSON. IN THE PRESENT CONTEXT, THE SEARCH OPERATIO NS WERE CARRIED OUT ON THE PREMISES OF THE PARTNERS ON 24-01-2008 WHEREAS THE HANDING OVER OF THE MATERIALS RELATED TO THE APPELLANT AND THE CORRESPONDING SATISFACTION WAS RE CORDED ON 01-10.2009. SINCE IN THIS CASE SATISFACTION IS RECORDED ON THE 1 ST DAY OF OCTOBER, 2009 AND THE NOTICE U./S 153C OF THE ACT WAS ALSO ISSUED ON THE SAME DATE, THEN THE ONLY CONCLUSION IS THAT THE LD.ASSESSING OFFICER OF THE APPELLANT HAS TAKEN OVE R THE POSSESSION OF SEIZED MATERIALS ON THE 1 ST DAY OF OCTOBER, 2009. IN THIS RESPECT, IT IS NECES SARY TO REFER TO THE FIRST PROVISO TO S.153C(1) OF THE ACT WHICH READS AS UNDER :- PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE T O THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUIS ITION UNDER SECTION 132A IN THE SECOND PROVISO TO SUB-SECTION (1) OF SECTION 153A S HALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. ACCORDINGLY, FOR THE PURPOSES OF ASSUMING JURISDICT ION U/S 153C OF THE ACT, THE RELEVANT DATE OF SEARCH WOULD HAVE BEEN 01-10-2009 AND THE L D. ASSESSING OFFICER CAN ISSUE THE NOTICE U/S 153C OF THE ACT FOR THE PREVIOUS YEAR IN WHICH SUCH MATERIALS ARE HANDED OVER AND SIX ASSESSMENT YEARS PRECEDING SUCH ASSESSMENT YEAR. NOW, IN THIS CASE, THE PREVIOUS YEAR IN WHICH THE DOCUMENT IS HANDED OVER IS 1 ST DAY OF APRIL, 2009 TO 31 ST DAY OF MARCH, 2010 RELEVANT TO THE ASSESSMENT YEAR 2010 -11 AND SIX PRECEDING PREVIOUS YEARS AND THE RELEVANT ASSESSMENT YEARS WOULD BE AS UNDER : PREVIOUS YEAR ASSESSMENT YEAR 01-04-2008 TO 31-03-2009 2009-2010 IT(SS)A.83/K/2011 TRIS HUL HI-TECH INDUSTRIES A.YR.2003-04 3 01-04-2007 TO 31-03-2008 2008-2009 01-04-2006 TO 31-03-2007 2007-2008 01-04-2005 TO 31-03-2006 2006-2007 01-04-2004 TO 31-03-2005 2005-2006 01-04-2003 TO 31-03-2004 2004-2005 THE LD. ASSESSING OFFICER HOWEVER HAS ISSUED NOTICE U/S 153C OF THE ACT FOR THE ASSESSMENT YEAR 2003-2004 WHICH IS THUS CLEARLY BAR RED BY LIMITATION. THEREFORE, THE ISSUE OF NOTICE U/S 153C OF THE ACT DATED 01-10-200 9 CANNOT BE SUSTAINED AS IT IS CLEARLY BARRED BY LIMITATION. IN VIEW OF THE ABOVE, THE IMP UGNED NOTICE ISSUED U/S 153C OF THE ACT AND CONSEQUENTLY, THE ASSESSMENT COMPLETED IN P URSUANCE TO SUCH NOTICE, IS LIABLE TO BE QUASHED. 3.1. FURTHERMORE THE LD. COUNSEL PLEADED THAT JURIS DICTION IS FURTHER BAD AS NO INCRIMINATING MATERIAL WAS FOUND DURING SEARCH. ON MERITS HE CLAIMED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F HONBLE GAUHATI HIGH COURT IN THE CASE OF CIT VS MEGHALAYA STEELS LTD. 217 TAXMAN 184. 4. WE NOTE THAT THE ASSESSEE HAS ADMITTED THAT THOU GH ARGUMENTS AS REGARDS THE VALIDITY OF THE ASSESSMENT FRAMED U/S 153C/143(3) O F THE IT ACT WAS ADVANCED BEFORE THE LD.CIT(A), HOWEVER IN THE GROUNDS OF APPEAL NO SPECIFIC GROUND WAS URGED FOR ADJUDICATION. THE ASSESSEE HAS PLEADED THAT IN GROU ND NO.1 OF THE APPEAL BEFORE US THE ASSESSEE HAS CHALLENGED THE JURISDICTION. IT HAS BE EN CONTENDED THAT THE AFORESAID GROUND IS PURELY LEGAL IN NATURE AND GOES TO THE RO OT OF THE MATTER AND AS SUCH LEAVE TO ARGUE THE GROUND MAY PLEASE BE GRANTED. 5. WE HAVE HEARD THE LD. DR. UPON CAREFUL CONSIDERA TION WE FIND THAT THE ISSUE IS PURELY A LEGAL ONE AND GOES TO THE ROOT OF THE MATT ER. ACCORDINGLY ON THE ANVIL OF THE HONBLE APEX COURT IN THE CASE OF NTPC VS CIT 229 ITR 383 (SC) WE ARE ADJUDICATING THE AFORESAID GROUND RAISED ON JURISDI CTION. 5.1,. THE MAIN CONTENTION OF THE LD. COUNSEL OF TH E ASSESSEE IN THIS REGARD IS THAT ASSESSMENT IN THIS CASE HAS BEEN FRAMED U/S 153C OF THE ACT. A SEARCH OPERATION WAS CARRIED OUT IN THE PREMISES OF THE PARTNERS ON 24.0 1.2008 WHEREAS HANDING OVER OF THE MATERIALS RELATING TO THE ASSESEE AND THE CORRESPON DING SATISFACTION WAS RECORDED ON 01.10.2009. IN THIS CONNECTION THE LD. COUNSEL OF T HE ASSESSEE REFERRED TO THE PROVISO OF SECTION 153C(1) OF THE ACT AND SUBMITTED THAT FO R THE PURPOSE OF ASSUMING JURISDICTION U/S 153C OF THE ACT THE RELEVANT DATE OF SEARCH WAS 01.10.2009 AND THE IT(SS)A.83/K/2011 TRIS HUL HI-TECH INDUSTRIES A.YR.2003-04 4 AO CAN ISSUE NOTICE U/S 153C OF THE ACT FOR THE PRE VIOUS YEAR IN WHICH THE MATERIALS WERE HANDED OVER AND SIX ASSESSMENT YEARS PRECEDING SUCH ASSESSMENT YEAR. NOW IN THIS CASE THE PREVIOUS YEAR IN WHICH THE DOCUMENT I S HANDED OVER IS 1 ST APRIL, 2009 TO 31 ST MARCH, 2010 RELEVANT TO ASSESSMENT YEAR 2010-11.HE NCE SIX PRECEDING PREVIOUS YEARS CAN ONLY RELATE TO ASSESSMENT YEARS UPTO 2004 -05. IN THIS VIEW OF THE MATTER WHEN AO HAS ISSUED NOTICE U/S 153C OF THE ACT FOR A .YR.2003-04 IT IS CLEARLY BARRED BY LIMITATION. HENCE THE ASSESSEES CONTENTION IS T HAT ISSUE OF NOTICE U/S 153C OF THE ACT ON 01.10.2009 CANNOT BE SUSTAINED AND IT IS CLE ARLY BARRED BY LIMITATION. FROM THE ABOVE IT IS AMPLY CLEAR THAT ASSESSMENT YEARS UPTO WHICH ASSESSMENT U/S 153C OF THE ACT CAN BE FRAMED PURSUANT TO SEARCH IN THIS CASE I S UPTO A.YR.2004-05. THESE ARE FACTUAL ASPECTS. THE LD. DR COULD NOT CONTROVERT TH IS FACTUAL SUBMISSION OF THE LD. COUNSEL OF THE ASSESSEE. IN THESE CIRCUMSTANCES, IN OUR CONSIDERED OPINION CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE IS CORRECT THAT AO HAD NO JURISDICTION TO ISSUE NOTICE FOR ASSESSMENT U/S 153C OF THE ACT FOR A.YR.2003-04 AND CONSEQUENTLY THE ASSESSMENT FRAMED FOR A.YR.2003-04 IS LIABLE TO BE QUASHED AS THE SAME IS WITHOUT JURISDICTION. ACCORDINGLY WE QUASH THE ASSESSMENT FRAMED IN THIS CASE FOR A.YR.2003-04. 5.2. SINCE WE HAVE ALREADY HELD THAT THE AO HAS NO JURISDICTION TO ISSUE NOTICE IN THIS CASE FOR A.YR.2003-04 WE ARE NOT ADJUDICATING THE OTHER ISSUES ON JURISDICTION, NO INCRIMINATING MATERIAL ON SEARCH WAS FOUND IN THIS CASE AND HENCE THE ASSESSMENT IS BAD ON THAT ACCOUNT ALSO. WE ARE ALSO NOT ADJUDICAT ING THE ISSUE REGARDING THE MERITS OF THE CASE. THE ADJUDICATION ON THESE ASPECTS IS NOW OF ACADEMIC INTEREST ONCE THE JURISDICTION OF ASSESSMENT HAS BEEN QUASHED. 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE S TANDS ALLOWED. . ORDER PRONOUNCED IN THE COURT ON 24.09.2014 SD/- SD/- [ MAHAVIR SINGH ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 24.09.2014. R.G.(.P.S.) IT(SS)A.83/K/2011 TRIS HUL HI-TECH INDUSTRIES A.YR.2003-04 5 COPY OF THE ORDER FORWARDED TO: 1. TRISHUL HI-TECH INDUSTRIES, C/O SOMNATH GHOSH, ADVO CATE, 2 GARSTIN PLACE, 2 ND FLOOR, KOLKATA-700001. 2 D.C.I.T., CENTRAL-XI, KOLKATA. 3 . CIT(A)-CENTRAL-I, KOLKATA. 4. CIT - KOLKATA. 5. CIT-DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES