AMIR DEVELOPMENT CORPN., V. DCIT CIR 25(1),

MA 157/MUM/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 5938 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 03-12-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: misc
• Appeal Filed On: 09-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Keywords: Recovery proceedings; Document seized; Principle of natural justice; Bonafide belief; Documents seized
• Section: 147; 69; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'J' BENCH, MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER MA NO. 157/MUM/2010 (ARISING OUT OF ITA NOS. 7570 TO 7577/MUM/2005) (ASSESSMENT YEARS: 1987-88 TO 1994-95) M/S. AMIR DEVELOPMENT CORPN. DCIT, CIRCLE 25(1) C/O SHIR K.N. SHAIK BANDRA KURLA COMPLEX H205-206 OMMISQUITTA NAGAR CHS LTD. VS. BANDRA, MUMBAI VIDYAMANDIR ROAD, DAHISAR (E), MUMBAI PAN - AAEPS 8380 H APPELLANT RESPONDENT APPELLANT BY: SHRI PRAKASH PANDIT RESPONDENT BY: SMT ASHIMA GUPTA O R D E R PER B. RAMAKOTAIAH, A.M. THIS MISCELLANEOUS APPLICATION IS BY SHRI K.N. SHAI K. THE APPEALS IN THE CASE OF M/S. AMIR DEVELOPMENT CORPORATION IN IT A NOS. 7570 TO 7577/MUM/2005 FOR A.YS. 1987-88 TO 1994-95 WERE DEC IDED BY THE ITAT EXPARTE ASSESSEE ON 21 ST MAY 2008. 2. THE MA FILED IN THIS REGARD IS AS UNDER: - (I) M/S. AMIR DEVELOPMENT CORPORATION IS AN ASSOCIATION OF PERSONS. THERE IS NO CONSTITUTION OF SAID ASSOCIATION OF PERSONS, NOR THERE IS ANY WRITTEN AGREEMENT SPECIFYING THE NAMES OF THE MEMBERS AS WE LL AS SHARES OF THE INDIVIDUAL MEMBERS. (II) SHRI K.N. SHAIK WHO IS 82 YEARS OLD HAS RECEIV ED RECOVERY NOTICES FROM THE TAX RECOVERY OFFICER AGAINST THE INCOME TAX DUE S OF ASSOCIATION OF PERSONS UNDER THE NAME AND STYLE OF M/S. AMIR DEVEL OPMENT CORPORATION. IT IS PERTINENT TO NOTE HERE THAT THE SAID CASES WERE ATT ENDED BY SALALUDDIN SHAIK, SON OF K.N. SHAIK WITH WHOM SHRI K.N. SHAIK WAS HAV ING STRAINED RELATIONS AND HE WAS EXPIRED IN THE YEAR 2000. MA NO. 157/MUM/2010 M/S. AMIR DEVELOPMETN CORPN. 2 (III) ACCORDINGLY SHRI K.N. SHAIK TOOK INSPECTION O F RECORDS OF AMIR DEVELOPMENT CORPORATION AND RECEIVED A COPY OF ITAT S ORDER DATED 21.05.2008 AND REALISED THAT THERE ARE MISTAKES APP ARENT ON RECORD IN THE SAID ORDERS. THEREFORE SHRI K.N. SHAIK HEREBY WANTS TO APPLY FOR RECALLING THE SAID ORDERS DATED 21.05.2008 AS HIS RIGHTS ARE ADVE RSELY AFFECTED BY THE SAID ORDER FOR FOLLOWING AMONGST THE OTHER GROUNDS. (A) THERE WAS A SEARCH UNDER SECTION 132 OF THE IN COME TAX ACT 1961 AT FOLLOWING PLACES: - K.N. SHAIK QUARRY AT DAHISAR CHECK NAKA PROP. K.N. SHEIK DHAISAR EAST MUMBAI AMIR DEVELOPMENT CORPORATION AT DHAISAR CHECK NA KA ASSOCIATION OF PERSONS DLHAISAR EAST MUMBAI SHAIK CONSTRUCTION AT DAHISAR CHECK NAKA PARTNERSHIP FIRM DHAISAR EAST MUMBAI RESIDENTIAL PREMISES OF SHRI K.N. SHAIK FAMILY AT D AHISAR. (B) AFTER THE SEARCH ALL THE PROCEEDINGS BEFORE INC OME TAX AUTHORITIES WERE HANDLED BY M/S. R.V. SHAH, CHARTERED ACCOUNTANTS. I N THE MEANWHILE DISPUTE AROSE BETWEEN THE APPLICANT AND HIS SONS. HENCE THE APPLICANT STARTED LOOKING AFTER HIS OWN INDIVIDUAL CASES BEFORE THE INCOME TA X AUTHORITIES AND THE FIRMS INCOME TAX CASES WERE REPRESENTED BY HIS SON MR. SALALUDDIN AND THE SAID C.A., M/S. R.V. SHAH. C) RECENTLY WHEN THE APPLICANT STARTED DEVELOPING H IS OWN PROPERTY, INCOME TAX AUTHORITIES ATTACHED APPLICANTS SAID PR OPERTY AT PATHANWADI, MALAD MUMBAI IN ORDER TO RECOVER INCOME TAX DUES OF M/S. AMIR DEVELOPMENT CORPORATION, AN ASSOCIATION OF PERSONS. THE APPLICA NT CAME TO KNOW THAT BECAUSE OF NON-APPEARANCE BEFORE THE ITAT THE ABOVE CASES WERE DECIDED EXPARTE AND THE DEMAND WAS RAISED. (4) THE APPLICANT APPROACHED THE A.O. AND REQUESTED TO FURNISH COPIES OF THE ASSESSMENT ORDERS, CIT(A)S ORDERS AND ITAT OR DERS. THE APPLICANT HAS RECEIVED THE SAID ORDERS AND AFTER GOING THROUGH TH E SAME THE APPLICANT HEREBY APPLY TO THE HON'BLE ITAT TO RECALL THE ORDE RS PASSED ON 21.05.2008 IN CASE OF M/S. AMIR DEVELOPMENT CORPORATION AS THEY A RE CAUSING GREAT INJUSTICE TO THE APPLICANT FOR FOLLOWING AMONG THE OTHER GROUNDS: - MA NO. 157/MUM/2010 M/S. AMIR DEVELOPMETN CORPN. 3 A) ALL THE ASSESSMENTS ARE BASED ON SEIZED MATERIAL FO UND DURING THE SEARCH, COPIES OF WHICH WERE NEVER GIVEN TO THE APP LICANT AS ADMITTED BY THE A.O. IN PARA 11 AND 12 OF THE ASSES SMENT ORDERS. B) IN SPITE OF CIT(A)S DIRECTIONS TO PROVIDE COPIES O F THE SEIZED DOCUMENTS TO THE APPLICANT, THE A.O. PASSED THE ORD ERS ON THE BASIS OF THE SIZED DOCUMENTS WITHOUT SUPPLYING COPIES OF THE SAME TO THE APPLICANT. THE CIT(A) ALSO HAS NOT ADJUDICATED THE ISSUE OF THE A.O. NOT GIVING COPIES OF THE SEIZED FILES ON THE BASIS OF WHICH THE A.O. HAS PREPARED A CHART FOR MAKING ADDITIONS FOR ALL T HE YEAR UNDER APPEAL. C) THE APPLICANTS RIGHTS ARE AFFECTED BY THE SAID ORD ERS AS THE A.O. IS RECOVERING THE DUES FROM THE INDIVIDUAL ASSETS OF T HE APPLICANT WITHOUT TAKING ANY STEPS OF RECOVERY AGAINST THE AS SETS OF THE ASSOCIATION OF PERSONS OR THE PROPERTIES OF OTHER M EMBERS OF THE ASSOCIATION. D) ENTIRE GROSS RECEIPTS OF THE PROJECT UNDERTAKEN BY M/S. AMIR DEVELOPMENT CORPORATION ARE TAKEN AS INCOME UNDER S ECTION 69 OF THE INCOME TAX ACT 1961 AND HIGH PITCHED ASSESSMENT WERE PASSED BY THE A.O. E) ITAT HAS DECIDED THE SAID ORDER ON MERIT WITHOUT TA KING INTO CONSIDERATION THE FACTS OF EACH YEAR SEPARATELY AS WELL AS SPECIFIC GROUNDS AND SUBMISSIONS MADE BEFORE THE A.O. AND TH E CIT(A) WHICH WERE PART OF THE RECORD BEFORE THE ITAT. (5) IN VIEW OF THE ABOVE FACTUAL AND LEGAL POSITION THE ORDERS OF THE ITAT DATED 21.05.2008 REQUIRE TO BE RECALLED TO MEET THE PRINCIPLE OF NATURAL JUSTICE. 3. THE SAID SHRI. K.N. SHEIK ALSO STATED THAT THE ASSE SSEE WAS IN BONAFIDE BELIEF THAT THE LETTER DATED 05.04.1999 RE GARDING CHANGE OF ADDRESS WAS INFORMED TO THE ASSISTANT REGISTRAR AND ASSESSE E WAS HOPING THAT NOTICE COULD BE RECEIVED IN THE NEW ADDRESS. IT WAS SUBMIT TED THAT THE ASSESSEE HAS NOT RECEIVED THE NOTICE OF HEARING NOR THE EXPA RTE ORDER IN RESPECT OF THE MA NO. 157/MUM/2010 M/S. AMIR DEVELOPMETN CORPN. 4 SAID APPEAL TILL 06.02.2006( SIC ) WHEN THE ASSESSEE STATED TO HAVE RECEIVED COPY OF THE SAID ORDER FROM TAX RECOVERY OFFICE, RA NGE 2(1)]. 4. THE SAID SHRI K.N. SHAIK ALSO FILED AN AFFIDAVIT, W HICH IS AS UNDER: - 1. I SAY THAT I AM SUFFERING FROM ILL HEALTH AND I AM IN AND OUT OF HOSPITAL FOR NUMBER OF TIMES AND I AM BED-RIDDEN AN D I AM NOT ABLE TO MOVE OUT WITHOUT THE HELP OF FULL TIME ATTENDANT. 2. I SAY THAT THERE WAS A SEARCH U/S. 132 OF THE IN COME TAX ACT, 1961 AT FOLLOWING PLACES: - (1) K.N. SHAIK QUARRY, PROP. K.N. SHAIK, DAHISAR CHECK NAKA, DHISAR (EAST), MUMBAI (2) AMIR DEVELOPMENT CORPORATION, ASSOCIATION OF PERSONS, DAHISAR CHECK NAKA (3) SHAIK CONSTRUCTION, PARTNERSHIP FIRM, DAHISAR CHECK NAKA, DAHISAR (EAST), MUMBAI 3. I SAY THAT AFTER SEARCH, NOTICES U/S. 148 WAS IS SUED FROM A.Y. 1983-1984 TO 1992-93 AGAINST ME FOR DETERMINING THE INCOME OF MY PROPRIETARY BUSINESS UNDER THE NAME & STYLE OF M/S . K.N.. SHAIK QUARRY AND NOTICES U/S. 147 WERE ALSO ISSUED AGAIN ST M/S. AMIR DEVELOPMENT CORPORATION AND M/S. SHAIK CONSTRUCTI ON. I SAY THAT I AM NOT AWARE WHETHER SUCH NOTICE U/S. 147 WAS ISSUE D AGAINST M/S. AMIR DEVELOPMENT CORPORATION, A PARTNERSHIP FIRM. 4. I SAY THAT IN THE MEANWHILE, THE DISPUTE AROSE B ETWEEN ME, MY SONS AND THE CHARTERED ACCOUNTANT SO I STARTED LOOK ING AFTER MY OWN INDIVIDUAL CASES BEFORE INCOME TAX AUTHORITIES AND THE SAID ASSOCIATION OF PERSONS WERE REPRESENTED BY MY SON, MR. SALALUDD IN AND THE SAID M/S. R.V. SHAH, CHARTERED ACCOUNTANT. 5. I SAY THAT I WAS NOT HAVING ANY KNOWN SOURCE OF INCOME TILL 2009 STILL I HAVE TAKEN ALL MY CASES TO LOGICAL END AND I STARTED PAYING TAXES OUT OF THE PROPERTY, WHICH I HAD GIVEN FOR DEVELOPM ENT AND I HAD PAID ALMOST OF RS.1 CRORE IN LAST ONE YEAR. 6. I SAY THAT RECENTLY, THE INCOME TAX AUTHORITIES HAVE ATTACHED THE SAID DEVELOPMENT RIGHT IN RESPECT OF MY PROPERTY AT PATH AN WADI AT MALAD IN ORDER TO RECOVER MY INCOME TAX DUES. THEY ALSO INTE ND TO RECOVER INCOME TAX DUES OF M/S. SHAIK CONSTRUCTION AND M/S. AMI R DEVELOPMENT CORPORATION (A.O.P.). MA NO. 157/MUM/2010 M/S. AMIR DEVELOPMETN CORPN. 5 7. I SAY THAT I AM NOT THE MEMBER OF M/S. AMIR DEVE LOPMENT CORPORATION (ASSOCIATION OF PERSON). I HAVE NEVER R ECEIVED ANY NOTICE FROM THE A.O. OF M/S. AMIR DEVELOPMENT CORPORATION TO TREAT ME AS A MEMBER OF THE SAID ASSOCIATION OF PERSON. MY ASSESS MENT ORDER, WHICH IS PASSED BY THE SAME A.O. DOES NOT INCLUDE MY SHAR E IN THE INCOME OF THE SAID ASSOCIATION OF PERSON. 8. I SAY THAT I HAVE FILED APPEAL AGAINST THE C.I.T . APPEALS ORDER ONLY WITH THE APPREHENSION THAT MY INDIVIDUAL RIGHTS MAY BE AFFECTED BY THE SAID ORDER OF THE C.I.T. (APPEALS) PASSED IN THE CA SE OF M/S. AMIR DEVELOPMENT CORPORATION. 9. I SAY THAT IN THE CASE OF M/S. SHAIK CONSTRUCTIO N I HAVE FILED MISC. APPLICATION IN ALL TO RECALL THE ORDER PASSED BY IT AT IN ITA. I SAY THAT THE SAID ORDER WAS RECALLED. 10. I SAY THAT AS REGARDS M/S. AMIR DEVELOPMENT CO RPORATION IS CONCERNED, I HAVE APPROACHED THE I.T.A.T. BY MISC. APPLICATION NO. 157/M/2010 ARISING OUT OF ITA NO. 7570 TO 7577/M/20 05 WITH A REQUEST TO RECALL THE SAID ORDER DATED 21.05.2008 I N ITA NO. 7570 TO 7577/M/2005 SO AS TO PROVE THAT I AM NOT A MEMBER O F THE SAID ASSOCIATION OF PERSON AND I AM NEVER BEEN SERVED WI TH AN NOTICE BY THE A.O. FOR TREATING ME AS THE MEMBER OF THE ASSOCIATI ON OF PERSON. 5. THE LEARNED COUNSEL SUBMITTED THAT SHRI K.N. SHAIK WAS NOT A MEMBER OF THE AOP BUT THE REVENUE WAS PROCEEDING AG AINST THE PROPERTIES OF THE ASSESSEE FOR RECOVERY OF TAXES. THEREFORE TH E ORDERS ARE REQUIRED TO BE QUASHED STATING THAT SHRI K.N. SHAIK HAS NO CONNECT ION WITH AMIR DEVELOPMENT CORPORATION. IT IS ALSO FURTHER SUBMITT ED THAT THE APPEALS ON MERIT ARE TO BE HEARD AS THE NOTICES WERE NOT SERVE D AND THE ORDERS WERE PASSED EXPARTE. 6. THE LEARNED D.R., HOWEVER, OBJECTED TO THE MISCELLA NEOUS APPLICATION STATING THAT THE SAID K.N. SHAIK HAS NO LOCUS STANDI IN THE MATTERS AND CANNOT FILE THE MISCELLANEOUS APPLICATION. 7. WE HAVE CONSIDERED THE ISSUE AND EXAMINED THE RECOR D. EVENTHOUGH IN THE SAID AFFIDAVIT SHRI K.N. SHAIK SUBMITS THAT HE IS NOT A MEMBER OF THE AMIR DEVELOPMENT CORPORATION, THE APPEAL MEMOES IN FORM 36 FOR ALL THE YEARS WERE FILED BY SHRI K.N. SHAIK STATING TO BE P ARTNER, IN THE VERIFICATION. IN VIEW OF THIS, PRIMA FACIE THERE SEEMS TO BE EVID ENCE THAT THE CONTENTIONS OF THE AFFIDAVIT ARE NOT FULLY CORRECT. HOWEVER, SI NCE SHRI K.N. SHAIK HAS APPEALED TO THE ITAT AGAINST THE ORDERS OF THE CIT( A) HIS CONTENTION THAT HE IS NOT CONNECTED TO THE AOP REQUIRE EXAMINATION AND SINCE THERE SEEMS TO MA NO. 157/MUM/2010 M/S. AMIR DEVELOPMETN CORPN. 6 BE SOME CHANGE OF ADDRESS, WHICH WAS NOT BROUGHT ON RECORD CONSEQUENT TO WHICH THE APPEALS WERE DECIDED EXPARTE, WE ARE OF THE OPINION THAT THE APPEALS REQUIRE TO BE RECALLED VIDE RULE 24 OF THE APPELLATE TRIBUNAL RULES. WE ARE SATISFIED THAT BEING OLD AND INFIRMITY AND A LSO DUE TO THE CHANGE OF ADDRESS, THERE IS SUFFICIENT CAUSE FOR NON-APPEARAN CE BY THE SAID K.N. SHAIK OR HIS REPRESENTATIVE AND ACCORDINGLY THE ORDERS PA SSED VIDE COMMON ORDER DATED 21.05.2008 ARE SET ASIDE AND THE APPEALS ARE RESTORED. REGISTRY IS DIRECTED TO POST THE CASE IN DUE COURSE. 8. IN THE RESULT, MISCELLANEOUS APPLICATION IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD DECEMBER 2010. SD/- SD/- (R.S. PADVEKAR) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 3 RD DECEMBER 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) , MUMBAI 4. THE CIT , MUMBAI CITY 5. THE DR, J BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.