Late Shri Prakash Dhere, Pune V. DCIT, Cen. Cir.1(1), Pune, Pune

MA 9/PUN/2009

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7078 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-08-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 12-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA
• Assessee Lawyers: S U PATHAK
• Keywords: Block assessment
• Section: 260A; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH , PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER M.A. NO. 09/PN/2009 (ARISING OUT OF ITA NO. 475/PN/2005) (ASSTT. YEAR :2002-03) LATE SHRI PRAKASH DHERE, ... APP LICA NT L/H. VIJAY DHERE, 179, GURUWAR PETH, PUNE -411 042. PAN : ADUPD296IN V. DCIT, CENTRAL CIRCLE-1(1), PUNE RESPONDENT APPLICANT BY : SHRI. S.U. PATHAK RESPONDENT BY : SHRI HARESHWAR SHARMA (DR) DATE OF HEARING : 05.8 ..2011 DATE OF PRONOUNCEMENT : ORDER PER I.C. SUDHIR, JM THE GRIEVANCE OF THE ASSESSEE IS THAT THERE IS MIS TAKE APPARENT FROM RECORD IN THE ORDER DATED 30 TH SEPTEMBER 2008 OF THE TRIBUNAL. WHILE REITERATING THE CONTENTS OF THE APPLICATION, THE LD. A.R. POINTED O UT THAT DURING THE PERIOD, THE ASSESSEE WAS SUFFERING FROM CANCER, HE WAS BEDRIDDE N AND THUS HE HAD NOT FILED RETURN OF INCOME FOR A.Y. 2001-02 AND HAD NOT PAID THE ADVANCE TAX FOR A.Y. 2002- 03. HE SUBMITTED THAT DURING THE COURSE OF HEARING OF THE APPEAL, AN ARGUMENT WAS ADVANCED BEFORE THE TRIBUNAL THAT THE ADVANCE TAX O F RS. 2,02,000/- WAS PAID FOR THE A.Y. 2001-02 AND ACCORDINGLY, THE CAPITAL GAINS FOR A.Y. 2001-02 DID NOT CONSTITUTE UNDISCLOSED INCOME. SECONDLY, FOR THE A .Y. 2002-03, IT WAS SUBMITTED THAT THE SEARCH TOOK PLACE ON 8.1.2002 AND THE PR EVIOUS YEAR HAD NOT ENDED AND ACCORDINGLY, THE CLAUSE (D) OF SECTION 158BB(1) WAS TO BE INVOKED. HE SUBMITTED THAT AS PER THIS CLAUSE WHERE THE PREVIOUS YEAR HAS NOT ENDED ON THE DATE OF SEARCH, THE INCOME ON THE BASIS OF ENTRIES AS RECORDED IN T HE BOOKS OF ACCOUNT OR OTHER MA . NO 09/PN/2009 LATE SH. PRAKASH DHERE A.Y. 2002-03 PAGE OF 7 2 DOCUMENTS MAINTAINED IN THE NORMAL COURSE BEFORE TH E DATE OF SEARCH SHOULD BE CONSIDERED AS THE DISCLOSED INCOME. 2. THE LD. A.R. POINTED OUT THAT IN PARA NO. 10 OF THE ORDER, THE TRIBUNAL HAS HELD THAT THE ADVANCE TAX OF RS. 2,00,000/- WAS TOT ALLY INADEQUATE AND NOMINAL, CONSIDERING THE CAPITAL GAIN AND THEREFORE, IT HAS CONFIRMED THE STAND OF THE DEPARTMENT THAT THE CAPITAL GAINS OF RS. 6,37,013/- FOR A.Y. 2001-02 AND OF RS. 13,97,256 FOR A.Y. 2002-03 CONSTITUTED UNDISCLOSED INCOME. HE SUBMITTED THAT THIS ORDER OF THE TRIBUNAL SUFFERED FROM THE MISTAKES AP PARENT FROM RECORD. FIRSTLY ON PAGE NO. 34 OF THE PAPER BOOK, THE ASSESSEE HAD GIV EN THE COMPUTATION OF UNDISCLOSED INCOME MADE BY THE A.O FROM WHICH IT IS CLEAR THAT FOR THE A.Y. 2001- 02, THE ASSESEES TOTAL INCOME CONSTITUTED OF LONG TERM CAPITAL GAINS OF RS. 6,37,013/- ONLY. NOW ON THIS INCOME, THE TAX INST ANCE AT THE NORMAL RATE WAS TO THE TUNE OF 20% AND WHICH WOULD HAVE COME TO RS. 1, 27,402/- AND SURCHARGE OF RS.15,288/- THEREON, TOTALING TO RS.1,42,690/-. AS AGAINST THIS, THE ADVANCE TAX PAID BY THE ASSESSEE BEFORE THE SEARCH WAS RS. 2,00,000/ - WHICH WAS MUCH MORE THAN THE TAX INCIDENCE ON THIS INCOME. THUS, THERE IS M ISTAKE APPARENT IN HOLDING THAT NOMINAL TAX OF RS. 2,00,000/- PAID BY THE ASSESSEE WAS INADEQUATE. THE CONTENTION OF THE ASSESSEE REMAINED THAT THE ADVANCE TAX WAS P AID ON THE CAPITAL GAINS BEFORE THE SEARCH AND THEREFORE, THE QUESTION OF TREATING THIS CAPITAL GAIN OF RS.6,37,013/- AS AN UNDISCLOSED INCOME DID NOT ARISE AT ALL. HE CITED FOLLOWING CASES WITH THIS SUBMISSION THAT THEREIN IT HAS BEEN HELD THAT IF TH E ADVANCE TAX IS PAID BY AN ASSESSEE BEFORE THE SEARCH ON ITS INCOME, THEN, EV EN IF THE RETURN IS NOT FILED BY THE ASSESSEE FOR THAT YEAR PRIOR TO THE SEARCH, THE INC OME IS THE DISCLOSED INCOME WHICH CANNOT BE TAXED IN THE BLOCK ASSESSMENT : 1) CIT VS. MRS.KUMKUM KOHLI, 276 ITR 589 (DEL.) 2) NILESH SHAH VS. ACIT, 253 ITR 34 (AT) 3) ACIT VS. A.R. ENTERPRISES, 274 ITR 110(MAD.) MA . NO 09/PN/2009 LATE SH. PRAKASH DHERE A.Y. 2002-03 PAGE OF 7 3 3. THE LD. A.R. REFERRED THE CONTENTS OF PAGE NO. 1 1 OF THE ORDER OF THE TRIBUNAL HOLDING THAT THERE WERE DELIBERATE CONCEALMENT IN T HIS CASE AND THE ASSESSEE HAD PAID AN ADVANCE TAX OF RS. 2,02,000/- ON THE CAPITA L GAINS OF RS. 26,40,000/-. THE LD. A.R. SUBMITTED THAT IT IS NOT UNDERSTOOD THAT A S TO HOW THIS FIGURE OF CAPITAL GAINS IS WORKED OUT. HE SUBMITTED THAT THE ADVANCE TAX PAID WAS MORE THAN SUFFICIENT TO COVER THE TAX LIABILITY OF THE ASSESS EE FOR THE A.Y. 2001-02, THE QUESTION OF HOLDING A VIEW THAT ASSESSEES TAX PAYMENT WAS I NADEQUATE OR THE ASSESSEE DELIBERATELY CONCEALED INCOME, OR HE HAD MADE A MO CKERY OF THE LAW DOES NOT ARISE AT ALL. 4. REGARDING THE OTHER MISTAKE APPARENT FROM RECOR D IN THE ORDER OF THE TRIBUNAL, THE LD A.R. SUBMITTED THAT FOR THE A.Y. 2 002-03, THE CONTENTION OF THE ASSESSEE WAS THAT THE SALE PROCEEDS ON THE SALE OF PLOT IN THIS YEAR WAS DEPOSITED IN THE SAME BANK A/C. IN PUNE MERCHANT CO-OPERATIVE BA NK, WHEREIN THE ASSESSEE HAD DEPOSITED THE SALE PROCEEDS OF THE PLOT IN THE EARL IER YEAR I.E. A.Y. 2001-02. REFERENCE WAS INVITED TO PAGE NOS. 16 TO 22 OF THE PAPER BOOK. NOW FOR CAPITAL GAINS, THE BOOKS OF ACCOUNT ARE NOT REQUIRED TO BE MAINTAINED. CLAUSE (D) OF SECTION 158 BB(1) CLEARLY STATES THAT THE INCOME ON THE BASIS OF ENTRIES IN BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN NORMAL COU RSE WOULD BE CONSIDERED TO BE DISCLOSED INCOME. THE LD. A.R. POINTED OUT THAT I N THE PRESENT CASE, WHEN THE SEARCH WAS TAKEN PLACE ON 8.1.2002, THE PREVIOUS YE AR FOR A.Y. 2002-03 HAD NOT ENDED AND THE CLAUSE (D) OF SEC. 158 BB(1) WAS APP LICABLE. IT WAS, THEREFORE, SUBMITTED THAT BY MAKING THE ADVANCE TAX FOR A.Y. 2 001-02, THE INTENTION OF ASSESSEE THAT HE WANTED TO DISCLOSE THE INCOME WAS MADE ABSOLUTELY CLEAR AND AS THE SALE PROCEEDS OF THE PLOT IN THE NEXT YEAR ARE DEPOSITED IN THE SAME BANK ACCOUNT, THE ASSESSEE HAD THE INTENTION TO DISCLOS E THIS CAPITAL GAIN AS WELL TO THE DEPARTMENT. OTHERISE, HE WOULD NOT HAVE DEPOSITED THE SALE PROCEEDS OF THE PLOT IN THIS BANK ACCOUNT ONLY. SECONDLY, A BANK PASS BOOK HAD TO BE CONSIDERED AS A DOCUMENT MAINTAINED IN THE NORMAL COURSE BY AN ASSE SSEE FOR THE PURPOSES OF MA . NO 09/PN/2009 LATE SH. PRAKASH DHERE A.Y. 2002-03 PAGE OF 7 4 CLAUSE (D) OF SEC. 158BB(1). THE LD. A.R. SUBMITTE D THAT ON THIS BASIS, IT WAS CONTENDED BEFORE THE TRIBUNAL THAT THIS AMOUNT OF C APITAL GAIN FOR A.Y. 2002-03 SHOULD ALSO BE CONSIDERED TO BE THE DISCLOSED INCOM E WHICH COULD NOT BE TAXED IN THE BLOCK ASSESSMENT. SINCE THE TRIBUNAL HAS NOT D EALT WITH THESE CONTENTIONS, AND HAS SIMPLY UPHELD THE VIEW OF THE A.O THAT THE CAPI TAL GAINS FOR A.Y.2002-03 CONSTITUTED THE UNDISCLOSED INCOME, HAS RESULTED IN TO MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL. THE LD. A.R. ACCORDI NGLY PRAYED FOR RECTIFICATION OF THE ABOVE STATED MISTAKES, WHICH AS PER HIM, ARE APPARE NT FROM RECORD IN THE ORDER OF THE TRIBUNAL. 5. THE LD. D.R., ON THE OTHER HAND, OPPOSED THE APP LICATION. HE SUBMITTED THAT THE TRIBUNAL HAS GIVEN ITS FINDING ON THE ISSUES RA ISED BEFORE IT, AFTER CONSIDERING THE ABOVE SUBMISSIONS OF THE ASSESSEE, HENCE THERE IS N O MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL AND ONLY OPTION LEFT W ITH THE ASSESSEE IS TO PUT HIS GRIEVANCE, IF ANY, AGAINST THE ORDER OF THE TRIBUNA L, BEFORE THE HIGHER APPELLATE AUTHORITY U/S. 260A OF THE ACT. HE SUBMITTED THAT IF THE PRESENT APPLICATION IS ALLOWED, IT WOULD BE AMOUNTING TO REVIEW OF ITS ORD ER BY THE TRIBUNAL, WHICH IS NOT PERMITTED WITHIN THE PROVISION OF SECTION 254(2) OF THE ACT. HE PLACED RELIANCE IN THE DECISION OF THIRD MEMBER BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. KALYANCHANDRA DEY (2011), 57 DTR (GAU.) (TM) (TRI BUNAL) 137. 6. CONSIDERING THE ABOVE SUBMISSIONS, AND HAVING GO NE THROUGH THE ORDER DATED 30 TH SEPTEMBER 2008 OF THE TRIBUNAL, WE FIND THAT THERE IS MISTAKE APPARENT FROM RECORD IN THE ORDER DATED 30 TH SEPTEMBER 2008 OF THE TRIBUNAL IN RECORDING THE F ACTS OF THE CASE RELATING TO THE A.Y. 2001-02 AND 2002-0 3. THE SUBMISSION OF THE ASSESSEE REGARDING THE A.Y. 2001-02 REMAINED THAT D URING THE COURSE OF HEARING OF THE APPEAL, THE ASSESSEE HAD REFERRED PAGE NO. 34 O F THE PAPER BOOK FILED BY IT GIVING THE COMPUTATION OF UNDISCLOSED INCOME MADE B Y THE A.O FROM WHICH IT WAS MADE CLEAR THAT FOR THE A.Y. 2001-02, THE ASSESSEE S TOTAL INCOME CONSISTED OF LONG MA . NO 09/PN/2009 LATE SH. PRAKASH DHERE A.Y. 2002-03 PAGE OF 7 5 TERM CAPITAL GAINS OF RS. 6,37,013/- ONLY. ON THIS INCOME, THE TAX INCIDENCE AT THE NORMAL RATE WAS TO THE TUNE OF 20% WHICH WORKED OUT AT RS. 1,27,402/- AND SURCHARGE OF RS. 15,288/- THEREUPON, THUS TOTALING TO RS. 1,42,690/-. IT WAS SUBMITTED THAT AS AGAINST THIS, THERE WAS TAX PAID BY THE ASSESSEE BEFORE THE SEARCH WAS RS. 2,00,000/- WHICH WAS MORE THAN THE TAX INCI DENCE ON THIS INCOME. IN SUPPORT, THE ASSESSEE HAD CITED ABOVE REFERRED DECI SIONS TO STRENGTHEN ITS ARGUMENT THAT IF THE ADVANCE TAX IS PAID BY AN ASSESSEE BEFO RE THE SEARCH ON ITS INCOME, THEN, EVEN IF, THE RETURN IS NOT FILED BY THE ASSESSEE FO R THAT YEAR PRIOR TO THE SEARCH, THE INCOME IS THE DISCLOSEDINCOME, WHICH CANNOT BE TAXE D IN THE BLOCK ASSESSMENT. IT WAS POINTED OUT THAT THE ADVANCE TAX WAS PAID ON TH E CAPITAL GAIN BEFORE THE SEARCH, AND THEREFORE, THE QUESTION OF TREATING THE CAPITAL GAINS OF RS. 6,37,013/- AS AN UNDISCLOSED INCOME DID NOT ARISE. THE TRIBUNAL IN THE PARAGRAPH AT PAGE NO. 11 OF ITS ORDER HAS HELD THAT THERE WAS DELIBERATE CON CEALMENT IN THIS CASE AND THE ASSESSEE HAD PAID AN ADVANCE TAX OF RS. 2,02,000/- ON THE CAPITAL GAINS OF RS.26,40,000/-. THIS INADVERTENT MENTIONING OF WR ONG FACTS IS MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL WHICH HAS ALSO RESULTED IN PASSING AN ORDER BASED ON THE APPRECIATION OF WRONG FACTS. THE ORDE R ADJUDICATING THE ISSUE OF UNDISCLOSED INCOME IN THE A.Y. 2001-02 QUESTIONED B Y THE ASSESSEE IS THUS ALSO A MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TR IBUNAL. 7. HAVING GONE THROUGH THE ORDER OF THE TRIBUNAL, W E ALSO FIND SUBSTANCE IN THE SUBMISSION OF THE LD. A.R. THAT THE TRIBUNAL HAS NO T DEALT WITH THE CONTENTION OF THE ASSESSEE ON THE ISSUE OF UNDISCLOSED INCOME MADE IN THE A.Y. 2002-03. THE CONTENTION OF THE ASSESSEE IN THIS REGARD WAS THAT THE SALE PROCEEDS ON THE SALE OF PLOT IN THIS YEAR WERE DEPOSITED IN THE BANK ACCOUN T IN PUNE MERCHANT CO-OPERATIVE BANK WHEREIN THE ASSESSEE HAD DEPOSITED THE SALE PR OCEEDS OF THE PLOT IN EARLIER YEAR I.E. A.Y. 2001-02. A REFERENCE WAS INVITED TO PAGE NOS. 16 TO 22 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE IN THE APPEAL. IT WAS SUBMITTED THAT FOR CAPITAL GAINS, THE BOOKS OF ACCOUNTS ARE NOT REQUIRED TO BE MAINTAINED. CLAUSE (D) OF MA . NO 09/PN/2009 LATE SH. PRAKASH DHERE A.Y. 2002-03 PAGE OF 7 6 SECTION 158BB(1) CLEARLY STATES THAT THE INCOME ON THE BASIS OF ENTRIES IN BOOKS OF ACCOUNTS OR OTHER DOCUMENTS MAINTAINED IN THE NORMA L COURSE WOULD BE CONSIDERED TO BE THE DISCLOSED INCOME. IT WAS POINTED OUT THA T THE SEARCH WAS CONDUCTED ON 8.1.2002, HENCE THE PREVIOUS YEAR FOR A.Y. 2002-03 HAD NOT ENDED AND CLAUSE (D) OF SECTION 158BB(1) WAS APPLICABLE. IT WAS, THEREFORE , SUBMITTED THAT BY MAKING PAYMENT OF ADVANCE TAX FOR A.Y. 2001-02, THE INTENT ION OF THE ASSESSEE THAT HE WAS WANTED TO DISCLOSE THE INCOME WAS MADE CLEAR AND AS THE SALE PROCEEDS IN THE PLOT IN THE NEXT YEAR WERE DEPOSITED IN THE SAME BANK AC COUNT, THE ASSESSEE HAD THE INTENTION TO DISCLOSE THIS CAPITAL GAINS AS WELL TO THE DEPARTMENT. SECONDLY, A BANK PASS BOOK HAD TO BE CONSIDERED AS A DOCUMENT MAINTA INED IN THE NORMAL COURSE BY AN ASSESSEE FOR THE PURPOSE OF CLAUSE (D) OF SECTIO N 158BB(1). ON THIS BASIS, IT WAS CONTENDED THAT THIS AMOUNT OF CAPITAL GAIN FOR A.Y. 2002-03 SHOULD ALSO BE CONSIDERED TO BE THE DISCLOSED INCOME WHICH COULD N OT BE TAXED IN THE BLOCK ASSESSMENT. IN OUR VIEW, NON-CONSIDERATION OF THES E MATERIAL CONTENTIONS OF THE ASSESSEE BY THE TRIBUNAL WHILE DECIDING THE ISSUE R AISED IN THIS REGARD IN THE A.Y. 2002-03, IS A MISTAKE APPARENT FROM RECORD IN THE O RDER OF THE TRIBUNAL, WHICH ALSO NEEDS A RECTIFICATION U/S. 254(2) OF THE ACT. 8. UNDER THE ABOVE CIRCUMSTANCES, WE ARE OF THE VIE W THAT DUE TO APPRECIATION OF WRONG FACTS, AND NON-CONSIDERATION OF THE MATERI AL CONTENTIONS OF THE ASSESSEE, AS DISCUSSED ABOVE, THERE ARE, MISTAKES APPARENT FR OM RECORD IN THE ORDER DATED 30 TH SEPTEMBER 2008 WHICH NEEDS RECTIFICATION U/S. 254( 2) OF THE ACT, WHICH UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE CAN BE ACHIEVED ONLY BY RECALLING THE ORDER DATED 30 TH SEPTEMBER 2008 OF THE TRIBUNAL AND BY PASSING A RE CTIFIED ORDER BASED ON APPRECIATION OF CORRECT FACTS AND CO NSIDERATION OF MATERIAL CONTENTIONS OF THE ASSESSEE WHICH HAVE INADVERTENTL Y REMAINED TO BE CONSIDERED. WE ORDER ACCORDINGLY. MA . NO 09/PN/2009 LATE SH. PRAKASH DHERE A.Y. 2002-03 PAGE OF 7 7 9. THE MISCELLANEOUS APPLICATION IS ACCORDINGLY ALL OWED WITH DIRECTION TO THE REGISTRY TO FIX THE APPEAL FOR HEARING ON AN EARLIE R POSSIBLE DATE. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 23RD S EPTEMBER 2011. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE, DATED THE 23RD SEPTEMBER, 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT (CENTRAL), PUNE 4. THE CIT(A)- I, PUNE 5. THE D.R. ITAT PUNE BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE