ACIT CEN CIR 24 & 26, V. ANDHRI ICE AND COLD STORAGE P. LD,

MA 497/MUM/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 5297 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-10-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: misc
• Appeal Filed On: 05-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M D SONGATE
• Assessee Lawyers: DR K SHIVRAM
• Keywords: Search and seizure; Loose papers; Retrospective amendment; Block assessment

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER M.A. NO. 497/MUM/2010 (IN IT(SS)A NO.47/MUM/2007) BLOCK PERIOD : 1996-97 TO 2001-02. ASSTT. COMMISSIONER OF INCOME-TAX, M/S ANDHERI ICE & COLD STORAGE CENTRAL CIRCLE,24&26, MUMBAI.. VS. PVT. LTD., HANLEEN, 1 ST FLOOR, 32, MAIN AVENUE, SANTACTRUZ (W), MUMBAI 400 054. PAN AADCA2198M. (APPLICANT) (RESP ONDENT) APPLICANT BY : SHRI M.D. SONGATE. RESPONDENT BY : DR. K. SHIVRAM. O R D E R PER D. MANMOHAN, V.P. THIS MISCELLANEOUS APPLICATION WAS FILED AT THE I NSTANCE OF THE REVENUE. 2. BRIEF FACTS NECESSARY FOR THE DISPOSAL OF THIS APPLICATION ARE AS UNDER : CONSEQUENT TO THE SEARCH AND SEIZURE OPERATION CA RRIED OUT AT THE PREMISES OF M/S SKY BUILD ENTERPRISES WHICH IS A S ISTER CONCERN OF THE ASSESSEE COMPANY, WHEREIN CERTAIN LOOSE PAPERS PERTAINING TO THE ASSESSEE WERE FOUND, THE 2 ASSESSEE WAS CALLED UPON TO FURNISH BLOCK RETURN AN D IN RESPONSE TO THE NOTICE ISSUED U/S 158BD OF THE ACT, THE ASSESSEE FURNISHED THE BLOCK RETURN ON 15-03-2004 DISCLOSING NIL INCOME. THEREAFTER NOTICE WAS ISSUED U/S 143(2) OF THE ACT AND THE BLOCK ASSESSMENT WAS COMPLETED BY DETERMINING THE U NDISCLOSED INCOME AT RS.2,39,85,912/-. 3. AGGRIEVED, THE ASSESSEE CONTENDED BEFORE THE CI T(APPEALS) THAT THE DETERMINATION OF INCOME IS NOT IN ACCORDANCE WITH L AW AND IN PARTICULAR IT WAS CONTENDED THAT THE NOTICES ISSUED U/S 143(2) AND 14 3(1) WERE BEYOND THE TIME LIMIT LAID DOWN IN THE PROVISO TO SECTION 143(2)(II) AND HENCE THE BLOCK ASSESSMENT MADE BY THE AO IS BAD IN LAW. 4. THE CIT(APPEALS), HOWEVER, DISMISSED THE APPEAL AND THUS THE ASSESSEE PREFERRED THE SECOND APPEAL BEFORE THE APP ELLATE TRIBUNAL.. 5. THOUGH IN THE GROUND ENCLOSED TO FORM NO. 36 TH E ASSESSEE DID NOT RAISE A SPECIFIC GROUND WITH REGARD TO THE VALIDITY OF THE NOTICE ISSUED U/S 143(2) OF THE ACT, SUBSEQUENT THERETO THE ASSESSEE FILED THE REVISED GROUNDS CHALLENGING THE VALIDITY OF THE NOTICE ISSUED U/S 143(2). GROUND NO . 4 IN THE REVISED GROUND, WHICH IS RELEVANT IN THIS CONTEXT, READS AS UNDER : THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE NOTICE U/S 143(2) DATED 17-10-2005 IS ISSUED BEYOND THE PERIOD OF 1 Y EAR. THE BLOCK RETURN WAS FILED ON 15/3/2004. IN THE LIGHT OF THE DECISION OF THE APEX COURT IN T HE CASE OF HOTEL BLUE MOON 321 ITR 362, THE TRIBUNAL QUASHED THE BLOCK ASSESSMENT PROCEEDINGS SINCE THE FACTUM OF ISSUANCE OF NOTICE U/S 143(2) OF THE ACT BEYOND THE PERIOD OF ONE YEAR WAS NOT CHALLENGED. IT MAY ALSO BE NOTICED THAT DURING THE COURSE OF APPELLATE PROCEEDINGS THE REVENUE HAS NEITHER FILED ANY CROSS OBJECTION N OR RAISED A SPECIFIC ISSUE WITH 3 REGARD TO APPLICABILITY OF PROVISIONS OF SECTION 29 2BB OF THE ACT. IN FACT SECTION 292BB WAS INTRODUCED IN THE STATUTE BOOK BY THE FIN ANCE ACT, 2008 WITH EFFECT FROM 01-04-2008 AND IT WAS NOT INTENDED TO BE RETRO SPECTIVE IN ITS CHARACTER AND PRESUMABLY BECAUSE OF THAT REASON THE REVENUE DID N OT CHOOSE TO FILE ANY CROSS OBJECTION APART FROM THE FACT THAT SUCH AN OBJECTIO N WAS NEVER RAISED DURING THE COURSE OF APPELLATE PROCEEDING, BEARING IN MIND THE FACT THAT THE NOTICE WAS ISSUED ON 17-10-2005 WHICH ITSELF WAS BEYOND THE PERIOD O F ONE YEAR AND THE BLOCK ASSESSMENT PERTAINS TO THE PERIOD PRIOR TO 01-04-20 08. 6. DDESPITE THE AFOREMENTIONED FACTUAL MATRIX, THE REVENUE CHOOSES TO FILE A MISCELLANEOUS APPLICATION AS UNDER : A) THE TRIBUNAL IGNORED THE FACT THAT THE ASSESSEE HAS TAKEN OBJECTION I.E. FILED ADDITIONAL GROUND OF APPEAL ON 1.4.2008. THE ASSESSEE NEVER TOOK ANY OBJECTION DURING THE COURSE OF ASSESSMENT PROCEEDIN GS OR DURING THE APPELLATE PROCEEDINGS BEFORE CIT(A) AND THEREFORE A SSESSEE SHALL BE PRECLUDED FROM TAKING ANY OBJECTION TO ANY PROCEEDI NGS OR ENQUIRY ON THE GROUND AS PER SECTION 292BB OF THE I.T. ACT. B) THE HONBLE ITAT WAS NOT CONSIDERED THE PROVISIO NS OF SECTION 292BB OF THE INCOME TAX ACT TO THE FACTS OF THE CAS E. C) THE HONBLE ITAT HAS NOT INTERPRETED THE PROVISI ONS OF SECTION 292BB OF THE I.T. ACT IN ITS RIGHT PERSPECTIVE AND TRUE MEANING. IN THE CIRCUMSTANCES, IT IS RESPECTFULLY SUBMITTED THAT THE HONBLE ITAT MAY PLEASE RECTIFY THE ORDER U/S 254(2) OF THE I.T. ACT, 1961. 7. WE HAVE HEARD THE LEARNED DR AS WELL AS THE LEA RNED COUNSEL FOR THE ASSESSEE IN THIS REGARD AND CAREFULLY PERUSED THE R ECORD. AS COULD BE NOTICED FROM THE MISCELLANEOUS APPLICATION, THE APPLICANT ASSUME D THAT THE ASSESSEE HAS NEVER OBJECTED TO THE DELAY IN ISSUING NOTICE U/S 143(2) OF THE ACT DURING THE COURSE OF PROCEEDINGS BEFORE THE CIT(APPEALS) OVERLOOKING THE FACT THAT PARA 2 OF THE 4 CIT(APPEALS) ORDER CLEARLY SHOWS THAT THE ASSESSEE HAS RAISED THIS OBJECTION BUT THE LEARNED CIT(APPEALS) OMITTED TO CONSIDER THIS ISSUE . WHEN A GROUND IS ALREADY URGED BEFORE THE CIT(APPEALS) IT CANNOT BE SAID TO BE AN ADDITIONAL GROUND BEFORE THE APPELLATE TRIBUNAL. HOWEVER, THE ASSESSEE HAVIN G NOT RAISED THIS ISSUE, IN SPECIFIC TERMS, IN THE GROUND OF APPEAL ANNEXED TO FORM NO.36, THE SAID GROUNDS WERE REVISED WHEREIN IT WAS SPECIFICALLY SUBMITTED THAT NOTICE ISSUED U/S 143(2) IS BEYOND THE PERIOD OF ONE YEAR (SEE GROUND NO.4). IN THE CASE OF HOTEL BLUE MOON (SUPRA) THE APEX COURT OBSERVED THAT THE ISSUANCE O F NOTICE U/S 143(2) OF THE ACT WITHIN THE PERIOD PRESCRIBED THEREIN IS MANDATORY WHICH IMPLIES THAT IT IS A SUBSTANTIVE PROVISION WHICH IMPELS THE ASSESSING OF FICER TO ISSUE NOTICE WITHIN THE PRESCRIBED PERIOD SINCE IT EFFECTS THE VERY FOUNDAT ION FOR MAKING AN ASSESSMENT. IT IS WELL SETTLED THAT ANY MANDATORY PROVISION WHICH TOUCHES THE JURISDICTION/FOUNDATION FOR MAKING AN ASSESSMENT IS TO BE TREATED AS PROSPECTIVE IN NATURE UNLESS OTHERWISE STATUTE EXPLICITLY MAKES IT RETROSPECTIVE IN ITS OPERATION. IN THE CASE OF KUBER TOBACCO PRODUCTS (P) LTD. 117 ITD 273 THE ITAT, DELHI SPECIAL BENCH CATEGORICALLY OBSERVED THAT SECTION 292BB OF THE ACT, INSERTED BY THE FINANCE ACT, 2008, HAS NO RETROSPECTIVE EFFECT AND HAS TO BE APPLIED PROSPECTIVELY. THE ORDER OF THE ITAT, SPECIAL BENCH WHICH IS BINDI NG UPON ALL THE BENCHES OF THE TRIBUNAL WAS PASSED ON 14 TH JANUARY, 2009 AND THUS THE VIEW TAKEN THEREIN IS BINDING AND OBLIGATORY IN THE INSTANT CASE ALSO. TH E IMPUGNED ORDER OF THE ITAT HAVING BEEN PASSED ON 24 TH FEB., 2010, THE LEARNED DR, BEING AWARE OF THE LEG AL POSITION ON THE DATE WHEN THE ARGUMENTS WERE ADVANC ED, DID NOT RAISE SUCH AN ISSUE AS PER THE PROCEDURE PRESCRIBED UNDER THE ACT. SUCH BEING THE CASE, IT CANNOT BE SAID THAT THERE IS A MISTAKE APPARENT FROM RECORD I N THE ORDER PASSED BY THE ITAT. FOR THE DETAILED REASONS GIVEN HEREIN ABOVE, WE ARE OF THE VIEW THAT THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS LIABLE TO BE REJECTED. 5 8. IN HE RESULT THE MISCELLANEOUS APPLICATION FILE D BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 8 TH DAY OF OCT., 2010. SD/- SD/ - (RAJENDRA SINGH) (D. MANMOHAN) ACCOUNTANT MEMBER. VICE PRESIDENT MUMBAI, DATED : 8 TH OCT., 2010. WAKODE COPY TO : 1. APPLICANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, H-BENCH (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI BEN CHES, MUMB AI.