M/s.Lekshmi Traders, Kollam V. The DCIT, Kollam

MA 27/COCH/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4424 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 29-07-2016
• Assessment Year: misc
• Appeal Filed On: 07-04-2015
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: A S NARAYANAMOORTHY
• Keywords: Block assessment; Reassessment proceedings

Judgement Text

M.P. NO. 27/COCH/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI B P JAIN, AM & GEORGE GEORGE.K, JM M.P. NO. 27/COCH/2015 (ARISING OUT OF IT(SS)A NO.14/COCH/2002 (BLOCK PERIOD : 01/04/1988 TO 23/02/1999) M/S. LAKSHMI TRADERS, ABKARI CONTRACTORS, ERUMAKUZHY, NOORANADU, KOLLAM. VS THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOLLAM. ( APPLICANT ) (RESPONDENT) PAN NO. AAAAL 1578P ASSESSEE BY SHRI A.S. NARAYANAMOORTHY, CA REVENUE BY SHRI A. DHANARAJ, SR. DR DATE OF HEARING 29-07-2016 DATE OF PRONOUNCEMENT 29/07/2016 ORDER PER B.P. JAIN, AM: THIS MISCELLANEOUS PETITION OF THE ASSESSEE ARISES FROM THE ORDER OF THE TRIBUNAL IN I.T.(SS)A. NO.14/COCH/2002 DATED 12/02/ 2015. 2. THE LD. COUNSEL FOR THE ASSESSEE HAS FILED TH E MISCELLANEOUS PETITION WHICH FOR THE SAKE OF CONVENIENCE IS REPRODUCED HEREINBEL OW: M.P. NO. 27/COCH/2015 2 THIS APPEAL BY THE APPELLANT ASSESSEE WAS DECIDED ON 12/02/2015, BY THE HONORABLE TRIBUNAL ON REMAND FROM THE HONORABLE HIG H COURT OF KERALA. THE REMAND FROM THE HONORABLE HIGH COURT WAS TO ADMIT THE ADDITIONAL GROUND URGED BEFORE THE TRIBUNAL BY THE APPELLANT A BOUT THE VALIDITY OF THE BLOCK ASSESSMENT PROCEEDINGS IN THE ABSENCE OF RECO RDING OF SATISFACTION FOR INITIATING REASSESSMENT PROCEEDINGS U/S. 158BD READ WITH SECTION 158BC AND TO ADJUDICATE THE VALIDITY OF THE BLOCK ASSESSMENT. THE ARGUMENTS URGED BEFORE THE HONORABLE TRIBUNAL B Y THE APPELLANT WERE THE FOLLOWING: 1) THE APPELLANT WAS REGULARLY ASSESSED TO INCOME TAX BY THE INCOME TAX OFFICER, WARD-2, KOLLAM. THE APPELLANTS JURISDICT ION CONTINUED TO BE WITH THIS OFFICER WHEN THE SEARCH HAD TAKEN PLACE. 2) THE JURISDICTION WAS SUBSEQUENTLY TRANSFERRED TO T HE DEPUTY COMMISSIONER OF INCOME TAX, INVESTIGATION CIRCLE, K OLLAM ON 16.11.1999. 3) AS THERE WAS A TRANSFER OF JURISDICTION FROM THE IN COME TAX OFFICER, WARD-2, KOLLAM TO DEPUTY COMMISSIONER OF INCOME TAX , CIRCLE-1, KOLLAM, AFTER THE DATE OF SEARCH THERE WAS A TRANSF ER OF JURISDICTION INVOLVED AND EVEN ASSUMING THAT THE JURISDICTIONAL HIGH COURT DECISION IN CIT VS. PANCHAJANYAMN MANAGEMENT AGENCIES & SERV ICES (333 ITR 281) (KER.), IS CONSIDERED, THE FACTS IN THE APPELL ANTS CASE WERE DISTINGUISHABLE. IT WAS ALSO SUBMITTED BEFORE THE HONORABLE TRIBUNAL THAT, AFTER THE JURISDICTIONAL HIGH COURT DECISION IN PANCHAJANYAM MANAGEMENT AGENCIES & SERVICES CASE (333 ITR 281) WAS RENDERED , THE HONOURABLE SUPREME COURT HAS PRONOUNCED THE FOLLOWING TWO DECI SIONS IN WHICH IT HAS BEEN REITERATED THAT, RECORDING OF SATISFACTION IS A PRE-CONDITION FOR COMMENCEMENT OF SEARCH ASSESSMENT PROCEEDINGS AGAIN ST AN ASSESSEE WHO WAS NOT SEARCHED BUT WHOSE UNDISCLOSED INCOME O R VALUABLES WERE ALLEGEDLY FOUND IN THE PREMISES OF THE SEARCHED PER SON: 1) ACIT VS. A.R. ENTERPRISES (350 ITR 489) (SC) AND 2) CIT VS. CALCUTTA KNITWEARS (362 ITR 673) (SC) THE APPELLANT HAD ALSO SUBMITTED THAT, AS PER THE D ECISION OF THE HONORABLE APEX COURT IN MANISH MAHESWARI VS. ACIT ( 289 ITR 341) (SC), THE PRINCIPLE LAID DOWN IS THAT RECORDING OF SATISFACTI ON IS ESSENTIAL AND THE M.P. NO. 27/COCH/2015 3 CONCLUSION THAT SUCH RECORDING OF SATISFACTION IS N OT REQUIRED WHEN THERE IS NO TRANSFER OF JURISDICTION FROM ONE OFFICER TO ANOTHER CANNOT BE READ INTO THAT JUDGMENT. THIS IS ESPECIALLY RELEVANT AS THE HONOURABLE APEX COURT HAS REITERATED THIS VIEW IN TWO DECISIONS POI NTED OUT ABOVE SUBSEQUENT TO THE DECISION OF THE KERALA HIGH COURT IN PANCHANJANYAMS CASE REPORTED IN (333 ITR 281) (KER.). IT WAS ALS O SUBMITTED THAT, THE KERALA HIGH COURT IN POOTHUNDA PLANTATIONS PRIVATE LIMITED VS. AGRICULTURAL INCOME TAX OFFICER (221 ITR 557) (SC), HAS LAID DOW N THE PRINCIPLE THAT IF THE APEX COURT HAS CONSTRUED THE MEANING OF A PARTI CULAR PROVISION, THEN ANY DECISION TO THE CONTRARY GIVEN BY ANY OTHER AUT HORITY MUST BE HELD TO BE ERRONEOUS. IN THE LIGHT OF THE ABOVE, IT WAS PLE ADED THAT PRINCIPLE LAID DOWN BY THE HONORABLE APEX COURT THAT THE RECORDING OF SATISFACTION IS A PRE-CONDITION FOR COMMENCEMENT OF SEARCH ASSESSMENT PROCEEDINGS IN THE CASE OF A PERSON NOT SEARCHED BE FOLLOWED. THE HONORABLE TRIBUNAL IN ITS ORDER HAS DECIDED THE ISSUE ON THE UNDERSTANDING THAT THE APPELLANT HAS RELIED ON THE TYPOGRAPHICAL ERROR IN THE ASSESSMENT ORDER IN THE DATE OF TRANSFER OF THE JURISDICTION TO URGE THAT THERE WAS A TRANSFER OF JURISDICTION FROM ONE OFFIC ER TO ANOTHER. THE APPELLANT HAD IN THE SUBMISSIONS MADE BEFORE THE HO NORABLE TRIBUNAL ONLY URGED THAT THE JURISDICTION OF THE APPELLANT W HICH WAS BEFORE THE INCOME TAX OFFICER, WARD-2, KOLLAM WAS TRANSFERRED TO THE DCIT, INVESTIGATION CIRCLE, KOLLAM, AFTER THE SEARCH AND HENCE THE FACTS OF THE KERALA HIGH COURT DECISION WAS DISTINGUISHABLE. TH E APPELLANT HAD AT NO TIME RELIED ON THE TYPOGRAPHIC ERROR IN THE ASSESSM ENT ORDER TO URGE A TRANSFER OF JURISDICTION. FURTHER, THE APPELLANT HAD ALSO RELIED ON THE APEX COURT DECISIONS CITED ABOVE BEFORE THE HONORABLE TRIBUNAL BUT THE HONORAB LE TRIBUNAL HAS NOT ADVERTED TO THE POINTS URGED BEFORE IT BY THE APPEL LANT BASED ON THOSE DECISIONS. AS THE HONORABLE TRIBUNAL HAS NOT FULLY AND CORRECT LY FOLLOWED THE APEX COURT DECISION AND THE SUBMISSIONS OF THE APPELLANT MADE BEFORE IT, A MISTAKE APPARENT ON THE RECORDS HAS OCCURRED IN THE ORDER. HENCE THE APPELLANT HUMBLY REQUESTS THAT THE HONORABLE TRIBUN AL MAY BE PLEASED TO RECALL THE ORDER DATED 12/02/2015 IN IT(SS)A NO. 14/COCH/2002. 3. THE LD. DR OPPOSED THE ARGUMENTS IN THE MISCELL ANEOUS PETITION FILED BY THE ASSESSEE AND OPPOSED THE ARGUMENTS MADE BY THE LD. AR. M.P. NO. 27/COCH/2015 4 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE FACTS OF THE CASE. THE MAIN ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE I N THE MISCELLANEOUS PETITION IS THAT AFTER THE JURISDICTIONAL HIGH COURT DECISIO N IN THE CASE OF PANCHANJANYAM MANAGEMENT AGENCIES & SERVICES (SUPRA) WAS RENDERED , THE HONBLE SUPREME COURT HAS PRONOUNCED TWO DECISIONS IN THE CASE OF A .R. ENTERPRISES (SUPRA) AND CALCUTTA KNITWEARS (SUPRA) IN WHICH IT HAS BEEN REI TERATED THAT RECORDING OF SATISFACTION IS A PRE-CONDITION FOR COMMENCEMENT OF SEARCH ASSESSMENT PROCEEDINGS AGAINST AN ASSESSEE WHO WAS NOT SEARCHE D BUT WHOSE UNDISCLOSED INCOME OR VALUABLES WERE ALLEGEDLY FOUND IN THE PRE MISES OF THE SEARCHED PERSON. AS A MATTER OF FACT, THE TRIBUNAL AT PARA 4.2 AT PGS. 5&6 HAS DEALT WITH THE SAID DECISIONS OF HONBLE SUPREME COURT IN THE CASE OF A.R. ENTERPRISES (SUPRA) AND CALCUTTA KNITWEARS (SUPRA) AND ALSO IN PARA 6.1 THE TRIBUNAL HAS DEALT IN DETAIL THE DECISION IN THE CASE OF PANCHAN JANYAM MANAGEMENT AGENCIES AND SERVICES (SUPRA). ACCORDINGLY, WE DO NOT FIND ANY MISTAKE APPARENT FROM THE RECORD WHICH CAN FALL WITHIN THE AMBIT AND SCOPE OF SECTION 254(2) OF THE ACT WHICH HAS A LIMITED SCOPE. THE M ISCELLANEOUS PETITION FILED BY THE ASSESSEE AND THE ARGUMENTS MADE BY THE LD. AR O N BEHALF OF THE ASSESSEE ARE MAINLY TO GET THE ORDER OF THE ITAT REVIEWED WH ICH, AS ALREADY POINTED OUT, IS BEYOND THE SCOPE OF SECTION 254(2) OF THE ACT. ACC ORDINGLY, THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IS DISMISSED. M.P. NO. 27/COCH/2015 5 5. IN THE RESULT, THE MISCELLANEOUS PETITION FIL ED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPE N COURT ON 29-07-2016. SD/- SD/- (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER COCHIN: DATED: 29 TH JULY 2016 GJ COPY TO: 1. M/S. LAKSHMI TRADERS, AB KARI CONTRACTORS, ERUMAKUZHY, NOORANADU, KOLLAM. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1, KO LLAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-III, TRI VANDRUM. 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. DR/ITAT, COCHIN 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN