Shri Jayesh T.Desai, Surat V. The ACIT., Cent.Circle-7, Surat

ITSSA 95/AHD/2007

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9329 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-05-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-05-2010
• Assessment Year: misc
• Appeal Filed On: 24-05-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Block assessment
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : AHMEDABAD CAMP AT SURAT (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HONBLE SH RI D.C. AGRAWAL, A.M.) I.T.(S.S.)A. NO. 95 & 96/AHD./2007 ASSESSMENT YEAR : BLOCK ASSESSMENT PERIOD FROM 30.1 0.1989 TO 29.10.1999 JAYESH T. DESAI, SURAT -VS.- ASSISTANT COMMISSIONER OF INCOME TAX, (PAN : ABFPD 2353 M) CENTRAL CIRCLE-7, SURA T (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJESH SHAH RESPONDENT BY : SHRI SANJEEV KASHYAP , SR. D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THESE TWO APPEALS FILED BY THE ASSESSEE ARE AGAINS T TWO SEPARATE ORDERS BOTH DATED 15.03.2007 OF LEARNED COMMISSIONER OF INCOME TAX(AP PEALS)-IV, SURAT FOR THE BLOCK ASSESSMENT PERIOD 30.10.1989 TO 29.10.1999. 2. BOTH THE APPEALS WERE HEARD ON THE SAME DATE, AR GUED BY THE LD. COMMON REPRESENTATIVE, THEREFORE, THESE ARE DISPOSED OF BY THIS COMMON ORD ER FOR THE SAKE OF CONVENIENCE. 3. VARIOUS GROUNDS RAISED BY THE ASSESSEE IN ITS AP PEAL BEING IT(SS)A. NO. 95/AHD/2007 ARE AS UNDER :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AS WELL AS LAW ON THE SUBJECT, THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TAKING ACTIO N U/S. 158BD OF THE ACT AFTER LAPSE OF ABOUT 5 YEARS. (2) ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LD. CIT(A) HAS ERRED IN PARTLY CONFIRMING THE ACTIO N OF THE AO IN MAKING ADDITION OF RS.2,10,087/- OUT OF TOTAL ADDITION OF RS.4,82,0 98/- MADE BY A.O. FOR ALLEGED UNDISCLOSED INCOME FOR BLOCK PERIOD. 2 IT(SS)A NO.95 & 96/A HD/2007 (3) ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF TH E ASSESSING OFFICER IN MAKING ADDITION OF RS.95,022/- FOR ALLEGED UNEXPLAINED INC OME. 3.1. SUBSEQUENTLY THE ASSESSEE ALSO RAISED ADDITION AL GROUND VIDE LETTER DATED 01.04.2010, WHEREIN IT IS STATED THAT THIS ADDITIONAL GROUND BE SUBSTITUTED IN PLACE OF GROUND NO. 1 TAKEN IN ORIGINAL GROUNDS OF APPEAL. THE SAID ADDITIONAL GRO UND READS AS UNDER :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED ASSESSING OFFICER HAS ERRED IN PASSING ORDE R U/S. 158BD OF THE ACT. THE ORDER PASSED U/S. 158BD IS ILLEGAL AND VOID AB INIT IO. 4. WITH RESPECT OF THE ADDITIONAL GROUND OF APPEAL, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE AFORESAID GROUND OF APPEAL INVOLVED A PURE QUESTION OF LAW AND THE SAME BE ADMITTED. 5. ON MERIT, THE LD. COUNSEL OF THE ASSESSEE SUBMIT TED THAT SEARCH IN THE CASE OF M/S. OM DEVELOPERS WAS CONDUCTED ON 29.10.2009 AND IN THAT CASE, THE ASSESSING OFFICER FRAMED THE ASSESSMENT IN THE MONTH OF NOVEMBER, 2001. IN THE C ASE OF ASSESSEE, NOTICE UNDER SECTION 158BD WAS ISSUED ON 10.02.2004. RELYING ON THE DECISION D ATED 21.05.2010 OF ITAT, AHMEDABAD (CAMP AT SURAT) IN THE CASE OF ACIT, CIRCLE-3, SURA T VS.- VIMAL VADILAL SHAH, SURAT AND VICE- VERSA AND OTHERS IN IT(SS)A. NOS. 10 & 28/AHD/2008 CONTENDED THAT NOTICE UNDER SECTION 158BD IN THE CASE OF ASSESSEE CANNOT BE ISSUED AFTE R THE CLOSURE OF BLOCK ASSESSMENT PROCEEDINGS IN THE CASE OF PERSON SEARCHED FROM WHICH THE PROCE EDINGS UNDER SECTION 158BD OF THE ACT AGAINST THE ASSESSEE, WERE INITIATED. ON THIS BASIS , HE SUBMITTED THAT THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER BE QUASHED. 6, ON THE OTHER HAND, SHRI SANJEEV KASHYAP, SR. D.R . APPEARING ON BEHALF OF THE REVENUE COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS MADE BY THE LD. COUNSEL OF THE ASSESSEE. 7. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUT HORITIES BELOW. WE ADMIT THE ADDITIONAL GROUND FOR ADJUDICATION IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CORPORATION LTD. VS.- CIT [ 1998] 229 ITR 383 (SC). ADMITTEDLY, IN THIS CASE, SEARCH UNDER SECTION 132 OF THE ACT WAS CARRIED OUT IN THE BUSINESS PREMISES OF M/S. 3 IT(SS)A NO.95 & 96/A HD/2007 OHM ORGANIZERS, SURAT ON 29.10.1999. CERTAIN BOOKS OF ACCOUNTS AND DOCUMENTS RELATING TO THE ASSESSEE WERE ALSO SEIZED. THE ASSESSING OFFICER HA VING JURISDICTION OVER THE CASE OF M/S. OHM ORGANIZERS, SURAT FOUND THAT CERTAIN INVESTMENT IN PURCHASE OF FLATS/ SHOPS WERE MADE BY THE ASSESSEE AND PAYMENT OF ON-MONEY WAS MADE BY HIM TO THE BUILDER. THEREAFTER CERTAIN INQUIRIES WERE CARRIED OUT FROM THE ASSESSEE UNDER SECTION 13 3(6) OF THE ACT BY WAY OF NOTICE ISSUED ON U/S. 133(6). FURTHER LETTERS WERE ALSO ISSUED. HOWE VER, NOTICE UNDER SECTION 158BD WAS ISSUED TO THE ASSESSEE ON 04.02.2005. IN THE IMPUGNED ORDER, THE LD. CIT(A) UPHELD THE LEGALITY OF ACTION UNDER SECTION 158BD OF THE ACT. 8. IT IS PERTINENT TO NOTE THAT IN THE CASE OF ACIT , CIRCLE-3, SURAT VS.- VIMAL VADILAL SHAH, SURAT AND VICE-VERSA AND OTHERS OF ITAT, AHMEDABAD (CAMP AT SURAT) IN IT(SS)A. NOS. 10 & 28/AHD/2008 (SUPRA) RELIED BY THE LD. COUNSEL OF TH E ASSESSEE, ON IDENTICAL FACTS, WE HAVE QUASHED THE BLOCK ASSESSMENT VIDE DECISION DATED 21 .05.2010 FOR THE REASONS THAT NOTICE ISSUED UNDER SECTION 158BD OF THE ACT WAS INVALID BECAUSE THIS WAS ISSUED AFTER COMPLETION OF ASSESSMENT IN THE CASE OF PERSON SEARCHED I.E. M/S. OHM DEVELOPERS. 9. FOLLOWING THE DECISION, WE HOLD THAT THE BLOCK A SSESSMENT FAMED IN CASE OF THE ABOVE ASSESSEE IS NOT LEGALLY VALID AND THEREFORE IS QUAS HED FOR THE REASON THAT NOTICES U/S.158BD OF THE ACT WAS ISSUED IN THIS CASE LONG AFTER COMPLETION O F ASSESSMENT IN THE CASE OF PERSON SEARCHED I.E. OHM DEVELOPERS . 10. NOW WE TAKE UP THE APPEAL BEING IT(SS)A. NO. 96 /AHD/2007 FILED BY THE ASSESSEE. THE ONLY GROUND RAISED BY THE ASSESSEE IN HIS APPEAL RE ADS AS UNDER :- ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN PARTLY CONFIRMING THE ACTION OF ASSESSING OFFICER IN IMPOSING PENALTY U/S. 158BFA OF THE I.T. ACT, 1961 BY SUSTAINING PENALTY TO THE EXTENT OF 100% OF TAX ON THE AMOUNT OF ADDITION OF RS.3,05,109/- SUSTAINED BY HIM IN QUANTUM APPEAL . 4 IT(SS)A NO.95 & 96/A HD/2007 11. IN QUANTUM APPEAL FILED BY THE ASSESSEE IN ITA NO. 95/AHD/2007, THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER IS QUASHED, THEREFORE PENA LTY OF RS.3,05,109/- LEVIED BY THE ASSESSING OFFICER UNDER SECTION 158BFA OF THE INCOME TAX ACT IS ALSO QUASHED. 12. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 28.05.2010 . SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 / 05 /2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.