A.C.I.T., Central Circle-1, JODHPUR V. Shri V.B. Giri, JODHPUR

MA 4/JODH/2012

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2349 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 26-09-2014
• Assessment Year: misc
• Appeal Filed On: 21-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SINGH
• Assessee Lawyers: N R MERTIA
• Keywords: Document seized; Assessment record; Documents seized
• Section: 142(1); 131; 132; 144; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER MA NO S . 0 4 , 05 /JODH/20 12 (ARISING OUT OF ITSS A NO S . 13 & 14 /J U /20 08 ) ( BLOCK PERIOD : 1997 - 98 TO 2 003 - 04 ) (01/04/1996 TO 20/12/2002) A N D MA NO. 06 /JODH/2012 (ARISING OUT OF ITSSA NO. 08 /J U /20 0 9 ) (A.Y . : 1997 - 98 TO 2003 - 04) (01/04/1996 TO 20/12/2002) ACIT, CENTRAL CIRCLE - 1, JODHPUR . VS. SHRI V.B. GIRI, E - 64, SHASTRI NAGAR, JODHPUR. (APPELLAN T) PAN NO. AEDPG 2731 H (RESPONDENT) APPELLANT BY : SHRI JAI SINGH D.R. RESPONDENT BY : SHRI N.R. MERTIA . DAT E OF HEARING : 26 - 0 9 - 2014 DATE OF PRONOUNCEMENT : 29 - 0 9 - 201 4 ORDE R PER N.K. SAINI , A .M . TH E S E MISCELLANEOUS APPLICATION S ARIS ING OUT OF THE COMMON ORDER DATED 14 - 0 9 - 20 09 IN IT SS A NO S . 13 & 14 /J U /20 08 & 08 /J U /20 09 FOR THE BLOCK PERIOD 2 1997 - 98 TO 2003 - 04 HA VE BEEN FILED BY THE DEPARTMENT . THE COMMON CONTENTION RAISED I N THESE APPLICATIONS READ AS UNDER : - THE HON'BLE TRIBUNAL HAS PASSED ORDER ON 14.09.2009 IN THE APPEAL AS MENTIONED ABOVE FILED BY THE DEPARTMENT. THE HON'BLE IT AT HAS HELD IN PARA NO. 11 PAGE NO. 10 & 11 OF ITS ORDER THAT 'HAVING CONSIDERED THE MANDATO RY PROVISIONS AS CONTAINED U/S 158BD OF I. T. ACT AND AS CLARIFIED BY THE HON'BLE APEX COURT IN THE CASE OF MANISH MAHESHWARI VS ACIT IT IS EXPLICITLY CLEAR THAT BEFORE PROCEEDING AGAINST ANY PERSON OTHER THAN THE SEARCHED PERSON U/S 158BD OF THE I. T. ACT , THE LAW REQUIRES THAT A SATISFACTION TO THE EFFECT THAT THE DOCUMENTS FOUND AS A RESULT OF SEARCH GIVE RISE TO UNDISCLOSED INCOME OF ANY OTHER PERSON OTHER THAN THE SEARCHED PERSON, IS REQUIRED TO BE REACHED IN THE CASE OF PERSON SEARCHED U/S 132 OF I. T . ACT. IN THE PRESENT CASE IN APPEAL, NO SUCH SATISFACTION IS FOUND REACHED OR RECORDED IN THE CASE OF SEARCHED PERSON SHRI VIJAY RAJ KHARIWAL. EVEN A NOTICE U/S 158BC OF I T ACT WHICH IS ALSO A CONDITION ESSENTIAL FOR PROCEEDING AGAINST SUCH PERSON HAS NO T BEEN MET OUT THOUGH THE CONDITION OF HANDING OVER OF THE SEIZED DOCUMENTS CAN BE DEEMED TO HAVE BEEN SATISFIED AS THE ASSESSING OFFICER OF BOTH THE PERSONS IS SAME OFFICER. AS THE PRECONDITIONS OF INVOKING JURISDICTION U/S 158BD OF IT ACT AS LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF MANISH MAHESWARI VS ACIT, ARE NOT SATISFIED, THE NOTICE SO ISSUED U/S 158BD OF THE I. T ACT ON THE STRENGTH OF WHICH ASSESSMENT OF UNDISCLOSED INCOME OF THE APPELLANT HAS BEEN MADE, IS HEREBY QUASHED. AS A RESULT ALL CONSEQUENCES THEREOF SHALL FOLLOW. IN THIS VIEW OF THE MATTER PENALTY U/S 158BFA ALSO SHALL NOT BE LEVIABLE.' PRAYER IN SO FAR AS THE RECORDING OF SATISFACTION IN THE CASE OF THE SEARCHED PERSON IS CONCERNED THE HON'BLE IT AT HAS RELIED ON THE LETTER OF I TO, WARD - 3(3), JODHPUR DATED 07.09.09 (WHO IS PRESENTLY HOLDING THE JURISDICTION OVER THE CASE OF THE SEARCHED PERSON I.E. SHRI VIJAY RAJ KHARIWAL), WHICH MIGHT BE NOT STATED ENTIRE FACTS CORRECTLY. THE AO OF THE SEARCHED PERSON HAD COMPLETED THE ASSESSME NT OF THE SEARCHED PERSON U/S 158BC/143(2) ON 31.12.2004. IN THE SAID ORDER THE AO HAD RECORDED AN OFFICE NOTE WHEREIN AT POINT NO. 13, HE HAD RECORDED HIS SATISFACTION IN THE FILE OF THE SEARCHED 3 PERSON REGARDING ACTION TO BE TAKEN IN THE CASE OF SHRI KUL DEEP GEHLOT AND SHRI V. B. GIRI (THE PRESENT ASSESSEE) AS UNDER : 'COPY OF BANK ACCOUNT OF SHRI KULDEEP GEHLOT AND SHRI V. B. GIRI WERE FOUND AT THE RESIDENCE OF THE ASSESSEE. ACTION U/S 158BD OF THE ACT IN RESPECT OF BANK TRANSACTION OF SHRI KULDEEP GEHLO T AND SHRI V. B. GIRI.' (EMPHASIS SUPPLIED). IN SUCH FACT AND CIRCUMSTANCES AND SETTLED LEGAL POSITION, THE HON'BLE IT AT HAS ERRED IN NOT EXAMINING THE ABOVE SUBSTANTIAL NOTE WHILE PASSING THE ORDER. THE COPY OF THE SAID SATISFACTION NOTE REGARDING REASON S FOR INITIATING PROCEEDINGS U/S 158BD OF THE I T ACT 1961 IN THE CASE OF SHRI V. B. GIRI, STOREKEEPER OF M/S CHEMICAL AND MINERAL INDUSTRIES PVT. JODHPUR IS SUBMITTED HEREWITH.' THAT IT IS ALSO PERTINENT TO SUBMIT HERE THAT THE AO HAS NOT RECORDED HIS SAT ISFACTION IN ELABORATE DETAIL BUT THERE CAN BE NO DOUBT ABOUT THE VIEW OF THE AO AS TO WHOM THE SAID BANK ACCOUNTS BELONGED AS CAN BE SEEN FROM THE AFOREMENTIONED ASSESSMENT ORDER OF THE SEARCHED PERSON AND THE OFFICE NOTE THAT THE BANK ACCOUNTS OF THE SAI D TWO PERSONS WERE TO BE CONSIDERED IN THEIR HANDS AND NOT IN THE HANDS OF THE SEARCHED PERSON. THIS ASSUMES MORE RELEVANT AS THE SEARCHED PERSON AND THE ASSESSEE WERE ASSESSED BY THE SAME AO WHICH FACT HAS BEEN MENTIONED IN THE HON'BLE IT AT IN THEIR ORDE R ALSO. HENCE, FIRST CONDITION LAID DOWN BY THE HON'BLE SUPREME COURT HAS BEEN FULFILLED IN THE PRESENT CASE WHILE PASSING THE ASSESSMENT ORDER AND AFTER THIS FULF ILLMENT OF THE CONDITION IT CAN NOT BE SAID THAT THERE IS ANY LACK OR LATCH ON THE PART OF THE AO IN PASSING THE ASSESSMENT. THAT IT IS ALSO SUBSTANTIAL TO SUBMIT HERE THAT THIRD CONDITION AS LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE SUPRA IS CONCERN IT IS RESPECTFULLY SUBMITTED THAT IT HAS ALSO BEEN FULFILLED IN THE PRESENT CASE AS THE AO HAD ISSUED NOTICE U/S 158BD DATED 5/7/05 TO THE ASSESSEE THROUGH REGISTERED POST WHICH WAS RETURNED UNSERVED. SUBSEQUENTLY THE SAME WAS SERVED ON THE ASSESSEE RESPONDENT IN PERSON ON 16/8/05 THROUGH AN INSPECTOR. THIS FACT HAS BEEN ACKNOWLEDGED BY THE ASS ESSEE RESPONDENT IN HIS STATEMENT RECORDED BY THE AO ON 5/6/05 U/S 131 OF THE I. T. ACT, 1961. THE SAID SUBSTANTIAL FACT AND RECORD MIGHT HAVE NOT PRODUCED BEFORE THE HON'BLE IT AT WHILE HEARING. ALL THESE ARE AVAILABLE ON ASSESSMENT RECORD OF THE ASSESSEE . IN VIEW OF THIS THE FOLLOWING FINDING OF FACT BY THE IT AT MAY KINDLY BE MODIFIED - 'EVEN A NOTICE U/S 158BD OF THE I. T. ACT, 1961 WHICH IS 4 ALSO CONDITION ESSENTIAL FOR PROCEEDING AGAINST SUCH PERSON HAS ALSO NOT BEEN MET OUT THOUGH THE CONDITION OF HAND ING OVER THE SEIZED DOCUMENTS CAN BE DEEMED TO HAVE BEEN SATISFIED AS THE ASSESSING OFFICER OF BOTH THE PERSONS IS SAME OFFICER. THAT IT IS ALSO RELEVANT TO EXPEDITE THE SUBMISSION THAT HON'BLE IT AT HAS NOT CORRECTLY INTERPRETED THE PROVISIONS OF SECTION 158BD AND SECTION 158BC. AS STATED EARLIER THE NOTICE U/S 158BD DATED 5/7/05 WAS SENT TO THE ASSESSEE RESPONDENT THROUGH REGISTERED AD POST AS WELL AS SERVED ON HIM PERSONALLY THROUGH INSPECTOR ON 16/8/05. A NOTICE UNDER SECTION 158BD CAN BE ISSUED IN THE CASE OF THE SEARCHED PERSON I.E. IN WHOSE NAME A WARRANT HAS BEEN ISSUED. IN THE CASE OF OTHER PERSONS NOTICES ARE TO BE ISSUED U/S 158BD AND THEREAFTER PROCEDURE LAID DOWN U/S 158BC IS TO BE FOLLOWED. THE NOTICE U/S 158BD OF THE INCOME TAX ACT, 1961 IS AL WAYS READ WITH SECTION 158BC OF THE ACT, 1961. AT THE BEST IT CAN BE SAID THAT THE WORD 'READ WITH SECTION 158BC' HAS NOT BEEN MENTIONED BY THE AO IN THE SAID NOTICE. BUT THIS IS NOT A FATAL FLAW AND THE SAID NOTICE CANNOT BE HELD TO BE ILLEGAL WHICH WOULD BE COVERED UNDER SECTION 292 OF THE I T ACT. THE AO HAD ALSO ISSUED NOTICE U/S 142(1) IN THIS CASE AS THE ASSESSEE DID NOT FILE HIS RETURN OF INCOME AND ULTIMATELY THE ASSESSMENT WAS COMPLETED U/S 144 READ WITH SECTION 158BD. THUS, THE PROCEDURE LAID DOWN IN THE RELEVANT PROVISIONS HAS BEEN DULY FOLLOWED BY THE AO. HENCE THE THIRD CONDITION LAID DOWN BY THE HON'BLE SUPREME COURT IN THE SAID CASE SUPRA HAS ALSO BEEN FULFILLED IN THIS CASE. THE FINDING OF FACT OF THE HON'BLE IT AT THAT THE ISSUE OF NOTICE U/ S 158BD OF THE ACT, 1961 WHICH IS A CONDITION ESSENTIAL FOR PROCEEDINGS AGAINST A PERSON UNDER SAID SECTION HAD NOT BEEN MET IS INCORRECT. THUS I T IS CLEAR THAT THE HON'BLE IT AT HAS NOT PROPERLY APPRECIATED THE FACTS AVAILABLE ON RECORD WHILE PASSING THE O RDER AND THE SAME MAY KINDLY BE MODIFIED. THAT IT IS ALSO RESPECTFULLY SUBMITTED THAT IN VIEW OF THE LEGAL GROUNDS ASSAILED HEREINABOVE, THE ORDER PASSED BY THE HON'BLE IT AT IN QUASHING THE ORDER PASSED U/S 154 MAY KINDLY BE MODIFIED AS CIT(A) HAS PASSED THE REASONED ORDER FOR REJECTING THE APPLICATION MOVED FOR THE RECTIFICATION. AS IT HAS BEEN MADE CLEAR BY THE CIT(A) WHILE PASSING THE ORDER U/S 154 OF THE ACT THE APPEAL ORDER DATED 14.10.2008 HAS BEEN PASSED WITH APPLICATION OF MIND AND NOTHING REMAINS FOR RECTIFICATION. THE RECTIFICATION CLAIMS BY THE 5 ASSESSEE IN APPEAL ORDER HAS ALREADY DEALT AND DISCUSSED AND DECIDED BY THE CIT(A) IN HIS APPEAL ORDER. IT, IS THEREFORE, HUMBLY REQUESTED THAT THE MISCELLANEOUS PETITION U/S 254(2) MAY KINDLY BE ACCEPTED AND ORDER MAY KINDLY BE MODIFIED ACCORDINGLY. 2 DURING THE COURSE OF HEARING, L EARNED D.R. REITERATED THE CONTENTS OF THE AFORESAID MISC. A PPLICATIONS AND SUBMITTED THAT THERE IS A MISTAKE APPARENT FROM THE RECORD THEREFORE, THE ORDER DATED 14/09/2009 MAY BE RECALLED. 3. IN HIS RIVAL SUBMISSIONS, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO MISTAKE IN THE ORDER DATED 14/09/2009 PASSED BY THE ITAT AND THE DEPARTMENT WA NTS TO GET THE SAID ORDER RECALL ED , WHICH IS NOT PERMISSIBLE U / S . 254 (2) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) . 4 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE ITAT AFTER CONSIDERING THE VARIOUS JUDICIAL PRONOUNCEMENTS AND THE FACTS OF THE CASE , CAME TO THE CONCLUSION THAT NO SATISFACTION WAS FOUND TO BE REACHED OR RECORDED IN THE CASE OF SEARCHED PERSON SHRI VIJAY RAJ KHARIWAL AND EVEN A NOTICE U / S 158 BC OF THE A CT WHICH IS ALSO A CONDITION ESSENTIAL FOR PROCEEDING AGAINST SUCH PERSON HAD NOT BEEN MET OUT. FROM THE ABOVE, IT IS CLEAR THAT ITAT JODHPUR BENCH ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD AND THE VARIOUS 6 JUDICIAL PRONOUNCEMENTS REACHED A CONCLUSION. N OW THE REVENUE DEPARTMENT WANTS TO GET THE ORDER REVIEWED , WHICH IS NOT PER MISSIBLE U/S. 254(2) OF THE ACT . THEREFORE, THERE IS NO MISTAKE IN THE ORDER DATED 14/09/2009 AS SUCH WE DO NOT SEE ANY MERIT IN THESE MISC. APPLICATIONS OF THE DEPARTMENT , ACCORDIN GLY THE SAME ARE DISMISSED. 5. IN THE RESULT, THE MISC. APPLICATION S FILED BY THE DEPARTMENT ARE DISMISSED . (ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 - 0 9 - 201 4 . ) S D/ - SD/ - (HARI OM MARATHA) (N.K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29 TH SEPTEMBER , 201 4 V R/ - COPY TO: - 1.THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE LD. CIT(A) 5. THE DR 6. THE GUARD FILE SR. PRIVATE SECRETARY, ITAT, JODHPUR