Sinhgad Technical Education Society, Pune v. ACIT, Pune

ITA 114/PUN/2010 | 2000-2001
Pronouncement Date: 28-01-2011 | Result: Allowed

Appeal Details

RSA Number 11424514 RSA 2010
Assessee PAN AABTS3300Q
Bench Pune
Appeal Number ITA 114/PUN/2010
Duration Of Justice 1 year(s) 7 day(s)
Appellant Sinhgad Technical Education Society, Pune
Respondent ACIT, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 28-01-2011
Assessment Year 2000-2001
Appeal Filed On 21-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR AND SHRI D. KARUNAKARA RAO ITA NOS. 114 TO 117/PN/10 (AYS 2000-01 TO 2003-04) SINHGAD TECHNICAL EDUCATION SOCIETY S. NO. 44/A VADGAON (BK) OFF SINHGAD ROAD PUNE 411041 PAN NO. AABTS3300Q .... APPELLANT VS. ACIT CENTRAL CIRCLE 2(2) PUNE . RESPONDENT APPELLANT BY : SHRI S. N DOSHI RESPONDENT BY : SHRI A. S SINGH CIT DR ORDER PER D. KARUNAKARA RAO AM THESE ARE FOUR APPEALS FILED BY THE ASSESSEE AGAINST THE COMMONLY DATED BUT DIFFERENT ORDERS OF THE CIT(A)-II PUNE. THE GROUN DS OF APPEAL ARE MORE OR LESS THE SAME IN THESE APPEALS AND THE ADDITIONAL G ROUND RAISED BY THE ASSESSEE IS COMMON FOR ALL THE FOUR APPEALS. THEREFORE ALL THES E APPEALS ARE CLUBBED. FOR THE SAKE OF CONVENIENCE THE APPEAL FOR THE AY 2000- 01 IS TAKEN UP AND IT IS AGAINST THE ORDER OF THE CIT(A)-II PUNE DATED 24/12 /2009. THUS THE GROUNDS IN THE APPEAL FOR THE AY 2000-01 AND THE COMMON ADDITIO NAL GROUND RAISED BY THE ASSESSEE DURING THE PROCEEDINGS AY BEFORE US ARE AS UND ER:- GROUND NO. 1(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE ORDER OF CIT(A) IS BAD IN LAW AND INVALID AS HE HAS NOT ISSUED THE MAN DATORY NOTICE AS REQUIRED BY SEC. 251(2) OF THE INCOME TAX ACT 1961 IN ORDER TO ENHANCE THE ASSESSMENT THEREBY MAKING THE APPELLANT LIABLE ON THE GROUNDS DIFFERENT FROM THOSE NOT CONSIDERED BY THE ASSESSIN G OFFICER. ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 2 OF 15 GROUND NO. 1(B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND WITHOUT PREJUDICE TO THE ABOVE GROUND NO. 1 THE ORDER OF CIT(A) IS BAD I N LAW AND INVALID AS HE HAS DECIDED THE APPEAL BY CONSIDERING THE ISSUES WH ICH ARE NOT MENTIONED IN THE ASSESSMENT ORDER- REF CIT VS SHAPURJI PALLOJ I MISTRI 44 ITR 891(SC). GROUND NO. 2(C) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND WITHOUT PREJUDICE TO THE ABOVE GROUND NO. 1 THE LEARNED CIT(A) HAS ERRED IN NOT APPRECIATING THE ESTABLISHED LEGAL POSITION THAT HIS POWER OF EN HANCEMENT IS RESTRICTED TO THE SUBJECT MATTER OF ASSESSMENT WHICH HAS BEEN CONSIDERED EXPRESSLY OR BY CLEAR IMPLICATION BY THE ASSESSING OFFICER. R EFER CIT VS. RAJ BAHADHUR HARDUTROI MOTILAL CHAMARIA 66 ITR 443 (S C). GROUND NO. 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND WITHOUT PREJUDICE TO GROUND NO. 1 THE CIT(A) HAS ERRED IN TREATING THE A CQUISITION OF SHARES IN COOPERATIVE BANK FOR RS. 49 750/- AS IN CONTRAVENTI ON OF PROVISION OF SECTION 13(1)(D)(I) OF THE INCOME TAX ACT 1961 DIS REGARDING THE FACT THAT THIS ACQUISITION OF SHARE IS NEITHER THE INVESTMENT NOR THE DEPOSIT MADE OUT OF THE FUNDS OF THE INSTITUTION AND SUCH ACQUIS ITION WAS NECESSARY BEING A PRE-CONDITION FOR AVAILING THE LOAN FROM TH E SAID CO-OPERATIVE BANK. GROUND NO.3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND WITHOUT PREJUDICE TO GROUND NO.. 1 TO 3 THE CIT(A) HAS ERRED SUSTAINING THE DISALLOWANCES OF RS. 15 130/- U/S. 40A(3) AND TREATING THE REVENUE E XPENDITURE AS CAPITAL EXPENDITURE. GROUND NO. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND WITHOUT PREJUDICE TO GROUND NO.1 TO 3 THE CIT(A) HAS ERRED IN TREATING T HE DONATIONS RECEIVED TOWARDS TRUST CORPUS AS REVENUE INCOME. DENIAL OF E XEMPTION U/S. 11 CANNOT CHANGE THE BASIC AND TRUE NATURE OF THE RE CEIPT. GROUND NO. 5 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND WITHOUT PREJUDICE TO THE GROUND NO. 1 TO 3 THE CIT(A) HAS ERRED IN SUSTA INING THE ADDITION OF RS. 4 43 012/- PROPOSED AND MADE BY THE SPECIAL AUD ITORS BY INVOKING THE PROVISIONS OF SECTION 36(1)(VA) OF THE ACT ON ACCO UNT OF DELAY IN PAYMENT OF EMPLOYEES SHARE OF PROVIDENT FUND RWS SECTION 2( 24). GROUND NO. 6 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND WITHOUT PREJUDICE TO THE GROUND NO. 1 TO 3 THE CIT(A) HAS ERRED IN SUSTAI NING THAT THE DISALLOWANCE OF RS. 51 505/- MADE ON ACCOUNT OF PRI OR PERIOD EXPENDITURE DISREGARDING THE CONTENTION THAT THESE EXPENSES MAT ERIALIZED IN THE CONTEXT OF THEIR LIABILITY IN THE YEAR UNDER CONSID ERATION ONLY. GROUND NO. 7 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND WITHOUT PREJUDICE TO THE GROUND NO. 1 TO 3 THE CIT(A) HAS ERRED IN SUSTA INING THE DISALLOWANCE OF RS. 50 000/- ON ACCOUNT OF DONATIONS PAID. ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 3 OF 15 ADDITIONAL GROUND OF APPEAL - ITA NO 114 TO 117 FOR AY 2000-01 TO 2003-04 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3) R.W.S . 153C IS BAD IN LAW IN AS MUCH AS HE HAS FAILED TO RECORD AND INFORM THE N ECESSARY SATISFACTION AS WELL AS FAILED TO PROVIDE THE CERTIFICATE TRUE C OPIES OF THE DOCUMENTS SEARCHED AND SEIZED IN AN ACTION TAKEN UNDER SECTIO N 132 ON SHRI M.N. NAVALE. THIS GROUND IS LEGAL AND GOES TO THE ROOT OF THE IS SUE INVOLVED AND THEREFORE APPELLANT PRAYS THAT THIS ADDITIONAL GRO UND MAY KINDLY BE ADMITTED AND DISPOSED OFF ON MERIT 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN EDUCATIONAL INSTITUTION REGISTERED UNDER BOMBAY PUBLIC TRUST ACT 1950 & SOCIETIES REGISTRATION ACT 1860. IT WAS ALSO REGISTE RED U/S 12A(A) OF THE INCOME TAX ACT 1961 SINCE THE A.Y. 1994-95. THE SEARCH AND SEIZURE OPERATION U/S. 132 WAS CARRIED OUT IN THE CASE OF SHRI M.N. NAVALE ON 20/ 07/05. SHRI M.N. NAVALE IS THE PRESIDENT OF THE ASSESSEE EDUCATIONAL SOCIETY. I N THE COURSE OF SEARCH OPERATION THE SEARCH PARTY FOUND AND SEIZED CERTAIN LO OSE PAPERS. SIMULTANEOUSLY THE SURVEY ACTION WAS CONDUCTED ON T HE INSTITUTE. HOWEVER ON THE BASIS OF THE LOOSE PAPERS BUNDLE A-2 FOUND WITH AND SEIZED FROM SHRI M.N. NAVALE AND THE CIT ISSUED THE SHOW CAUSE NOTICE STATING THAT IN VIEW OF THE FINDINGS IN THE SEARCH OPERATION HE HAD REASON TO BEL IEVE THAT THE NOTINGS IN THE SAID LOOSE PAPERS ARE IN RESPECT OF CAPITATION FEES/ D ONATIONS AND THEREFORE CIT PROPOSED THAT THE REGISTRATION OF THE INSTITUTION WAS TO BE CANCELLED ON BOTH THE LIMBS NAMELY THE ACTIVITY OF THE TRUST ARE NOT GENUIN E AND THAT THESE ARE NOT BEING CARRIED ON IN ACCORDANCE WITH THE OBJECT OF THE TRUST. AFTER HEARING THE ASSESSEE THE CIT CANCELLED THE REGISTRATION U/S. 12A A(3). THIS ORDER OF THE CIT WAS CHALLENGED BEFORE THE HONOURBLE INCOME TAX APPEL LATE TRIBUNAL AND THE SAME WAS REVERSED ON TECHNICAL GROUNDS IE THE REGISTRATI ON GRANTED U/S 12A CANNOT BE CANCELLED U/S 12AA(3) OF THE ACT. 3. COMING TO THE SEARCH ASSESSMENT PROCEEDINGS OF THE SOCIETY THE AO ISSUED THE NOTICE U/S. 153C OF THE ACT AFTER RECORDING THE REASONS AND THE ASSESSEE FIELD THE RETURN CLAIMING THE EXEMPTION U/S. 11 OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER MADE THE REFERENCE FOR SPECIAL ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 4 OF 15 AUDIT U/S. 142(2A) OF THE ACT. IN DUE COURSE THE SP ECIAL AUDITOR COMPLETED THE AUDIT. HOWEVER THERE IS AN ALLEGATION BY THE ASSESSE E THAT THE SPECIAL AUDITOR CONDUCTED THE AUDIT TOTALLY IN CONTRAST TO THE TERMS AND REFERENCES MADE BY THE ASSESSING OFFICER FOR CONDUCTING THE SPECIAL AUDIT. T HE ASSESSING OFFICER ON THE BASIS OF THE ORDER OF CANCELLATION OF REGISTRATION HELD THAT THE ASSESSEE HAS TO BE TREATED AS AOP AND IT WOULD NOT BE ENTITLED TO THE C LAIM OF EXEMPTION U/S. 11 OF THE ACT. ASSESSING OFFICER ASSESSED THE INCOME AT RS . 246 13 935/- AS COMPUTED BY SPECIAL AUDITOR. 4. AGGRIEVED WITH THE ABOVE ORDER OF THE AO THE ASSES SEE FILED AN APPEAL BEFORE THE CIT(A) AND MADE VARIOUS SUBMISSIONS. CIT ( A) ALLOWED THE APPEAL OF THE ASSESSEE PARTLY. AGGRIEVED WITH THE SAID DECISION OF THE CIT(A) THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US AND MADE VARIOUS SU BMISSIONS. FURTHER LD COUNSEL RAISED AN ADDITIONAL GROUND AS NARRATED ABOVE AND ARGUED STATING THAT THE SAME IS LEGAL IN NATURE AND THERE IS NO NEED FOR ANY INVESTIGATION IN TO THE MATTER FOR DECIDING THE SAME BY THE TRIBUNAL. SOME OF THEM ARE EXTRACTED FROM THE WRITTEN SUBMISSION OF THE ASSESSEE AND THE S AME ARE AS UNDER. 1. IN THE PAPER BOOK FILED BY THE DEPARTMENT REPRESE NTATIVE ON 31/08/2010 IT IS FOUND THAT THE SATISFACTION NOTE IS MADE ON 18/4/2007. IT IS HOWEVER NOT CLEAR AS TO THE WARD/ CIRCLE OF THE ASS ESSING OFFICER WHO HAS RECORDED THIS NOTE. THE SATISFACTION NOTE HAS TO BE MADE BY THE ASSESSING OFFICER OF THE SEARCHED PERSON I.E. MR. M.N. NAVALE. ON THE DATE OF SEARCH ASSESSING OFFICER OF M.N. NAVALE WAS WARD 1 (3) AND OF THE APPELLANT WAS CIRCLE -6 PUNE. ** 2. EVEN THOUGH ON 18/4/2007 WHEN THE SATISFACTION NOTE IS MADE AND THE ASSESSING OFFICER WAS ONE AND THE SAME BOTH FOR MR. M.N. NAVALE AND THE APPELLANT IT IS NECESSARY TO HAVE THE MENTI ON IN THE SATISFACTION NOTE A TO WHO IS THE ASSESSING OFFICER I.E. THE WARD /CIRCLE. IT IS THE WARD/CIRCLE WHICH GETS THE JURISDICTION AND NOT AN IND IVIDUAL WHO GOVERNS OR ADMINISTERS THE SAID WARD/ CIRCLE. 3. THIS SATISFACTION NOTE HAS NOT BEEN PROVIDED TO THE APPELLANT AT ANY TIME IN THE COURSE OF ASSESSMENT PROCEEDINGS OR THEREAF TER TILL 31/8/2010 ON WHICH DATE THE PAPER BOOK IS FILED BY THE DEPARTME NT. IT IS NECESSARY FOR THE ASSESSING OFFICER OF THE APPE LLANT TO INFORM ABOUT THE SATISFACTION SO RECORDED AS WELL AS TO PROVIDE THE COPIES OF THE SEIZED DOCUMENTS AND THE APPELLANT MUST BE GIVEN A REASONAB LE OPPORTUNITY TO OBJECT TO THE SAME. REFER: JANKI INTERNATIONAL 278 IT R 296. THIS VIEW IS TAKEN BY DELHI HIGH COURT IN THE CASE OF JANKI INTERNATIONAL VS. UOI. ALTHOUGH IT IS K158BD AND 158BC NONETHELE SS NATURAL JUSTICE DEMANDS THAT THE ASSESSEE WHO IS PROCEEDED U/S. 153C MUST BE PROVIDED ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 5 OF 15 WITH THE COPY OF THE SATISFACTION NOTE AS WELL AS T HE CERTIFIED COPY OF THE DOCUMENT SEIZED. (SEE PAGE NO. 29) NEITHER IN THE NOTICE U/S. 153C THERE IS ANY MENTIO N ABOUT THE SATISFACTION OF THE ASSESSING OFFICER. IN THE ABSENC E OF SUCH A SATISFACTION THE ASSESSMENT COMPLETED ON THE BASIS OF SUCH NOTIC E WOULD BE INVALID. IN THIS NOTICE THERE IS NO MENTION OF THE SPECIFIC PAPERS ETC ONLY THE GENERAL STATEMENT IS MADE. NEITHER THE NOTICE IS ENCL OSED WITH THE SATISFACTION NOTE. 4. AS PER THE SATISFACTION NOTE IT IS CLEAR THAT BOT H THE SATISFACTION NOTE AND NOTICE U/S. 153C ARE DATED 18/4/2007. 5. IT IS ALSO NOT KNOWN AS TO THE DATE ON WHICH TH IS DOCUMENT BELONGING TO THE APPELLANT WERE RECEIVED BY THE ASSESSING OFFI CER OF THE APPELLANT. SEARCH ON 20/07/2005 ON WHICH DATE ASSES SING OFFICER OF SEARCHED PERSON WAS ITO WARD 1(3) AND THAT OF THE APP ELLANT WAS ITO CIRCLE 6. AS THE SATISFACTION NOTE IS MADE ON 18/04/2007 AND ASSUMING THE SAID DATE AS THE DATE OF RECEIVING THE DOCUMENTS ALLEGED TO BE BELONGING TO THE APPELLANT THE ASSESSING OFFICER OF THE APPELLANT CAN ISSUE THE NOTICE FOR SIX PRECEDING ASSESSMENT YEARS. AS THE DOCUMENTS A RE RECEIVED ON 18/04/2007 RELEVANT TO THE A.Y 2008-09 THE ASSESSIN G OFFICER OF THE APPELLANT CAN ISSUE NOTICES U/S. 153C FOR THE A.YS 2002-03 T O 2007-08. IN THE CASE OF THE APPELLANT NOTICES U/S. 153C ARE ISSUED FOR A.Y 2000-01 TO 2001-02 WHICH IS NOT PERMISSIBLE REFER THE JUDGEMENT OF ALLAHABAD BENCH IN THE CASE OF VIJAY VIMAWAL VS. ACIT 124 TTJ 508. COPY ENCLOSED. (SEE PAGE 31 OF THE PAPER BOOK AHAMADABAD BENCH). THE ASSESSMENT OF A.Y 2003-04 HAS BEEN COMPLETED U/S. 143(3) ON 30/03/2006. HENCE ON THE DATE RELEVANT DOCUMENTS WERE RECEIVED BY THE ASSESSING OFFICER I.E. 18/04/2007 THIS ASSESSMENT W AS NOT PENDING AND MADE U/S. 153(C) THEREFORE IS INVALID. 6. THE ASSESSMENT HAS BEEN MADE U/S. 153C R.W.S 143 (3). IN FACT THE ASSESSMENT SHOULD HAVE BEEN MADE U/S. 153C R.W.S. 15 3A. 7. NEITHER THE DOCUMENTS MENTIONED IN THE SAID SATISFACTION NOTE STATED TO BE BELONGING TO THE APPELLANT HAVE BEEN P ROVIDED TO THE APPELLANT WITH DUE CERTIFICATION THEREON. 8. IN PARA 2 OF THE SATISFACTION NOTE IT IS STATED THAT AS PER PANCHANAMA DATED 22/7/2005 THE VARIOUS PAGES MENTION ED AT SERIAL NO.S 1 TO 9 BELONG TO THE APPELLANT. WE EXPLAIN THE NATU RE OF THESE PAGES AS UNDER:- A. PAGES NO. 11 TO 15 MENTIONED AT SERIAL NO. 1 TO 5 THE CONTENTS ARE IN RESPECT OF THE PAYMENTS MADE BY SHRI M.N. NAVALE F OR PURCHASE OF CERTAIN PROPERTY FROM ONE SHREE AMIR MOHIDIN SHEIKH BY IS SUING CHEQUES FROM HIS PERSONAL BANK ACCOUNT WITH CENTRAL BANK OF I NDIA STES EXTENSION COUNTER. HOWEVER SHRI M.N. NAVALE HAS OBTAIN ED THE ACKNOWLEDGMENT ERRONEOUSLY BY USING THE PRINTED MANAGE MENT VOUCHERS ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 6 OF 15 OF STES. THE FACT HOWEVER REMAINS THAT THESE PAPERS DO NOT RELATE TO THE APPELLANT. (SEE PAGE NO. 7 TO 19 OF THIS PAPER BOOK) B. PAGE NO. 45 MENTIONED AT SERIAL NO. 6 IS THE CO PY OF THE LETTER DATED 23/06/2001 WRITTEN BY THE APPELLANTS COLLEGE OF PHARMACY TO THE DIRECTORATE OF TECHNICAL EDUCATION MUMBAI. THE CONTE NTS DO NOT SUGGEST EVEN REMOTEDLY THAT THERE COULD BE ANY HIDDEN INCOME. THE FIXED DEPOSIT MENTIONED IN THE SAID LETTER ARE DULY ACCOUNTED IN TH E REGULAR BOOKS OF ACCOUNTS OF THE APPELLANT. (SEE PAGE NO. 20) C. PAGE NO. 35 MENTIONED AT SERIAL NO. 7 IS A PIECE OF PAPER BEARING DATED 25/06/2005 AND IT SHOWS CERTAIN FIGURES. IT IS A DUMB PAPER AND DOES NOT CONVEY ANYTHING. (SEE PAGE NO.21). D. PAGE NO. 50 MENTIONED AT SERIAL NO. 8 SHOW THE D ETAILS OF STAFF ARRANGEMENTS MADE BY THE APPELLANT AND EXPLAINING THE ADMISSION PROCESS FOR THE F.Y 2003-04. (SEE PAGE NO. 22) E. PAGE NO. 54 MENTIONED AT SERIAL NO. 8 IS AN EXTRA CT OF G.R. DATED 5/09/2003 ISSUED BY GOVERNMENT OF MAHARASHTRA SHOWING THE NAMES OF NEW COLLEGES OF APPELLANT FOR WHICH PERMISSIONS ARE GRA NTED. (SEE PAGE NO. 23). F. PAGES NO. 58 TO 60 MENTIONED AT SERIAL NO. 9 SHO W THE EXPENDITURE INCURRED BY SHRI M.N. NAVALE WHO HOSTED THE PARTY IN HO TEL AURORA ON 29/08/2004 AND THE AMOUNT MENTIONED THEREIN OF RS. 5 5811.94 IS PAID IN CASH BY SHRI M.N. NAVALE AND THE SAME HAS BEEN DEBI TED TO HIS CAPITAL ACCOUNT IN HIS RETURN OF INCOME (SEE PAGE NO. 24 TO 2 6) NONE OF THESE PAGES SUGGEST PRIMA-FACIE BELIEF OF H IDDEN INCOME. THESE PAPERS RELATE TO F.Y. 2004-05 THAT TOO OF SHRI M.N. NAVALE AND NONE OF THESE PAPERS THEREFORE ARE RELATED TO FINANCIAL YEARS 1999-00 TO 2002-03 I.E. (AY. 2000-01 TO 2003-04 ). THEREFORE ON THE BASIS OF THESE DOCUMENTS PERTAINING TO THE F.Y. 2005-06 BY AN Y STANDARD THERE COULD BE ANY SUGGESTION THAT EVEN PRIMA-FACIE THERE I S SOME HIDDEN INCOME IN THE ASSESSMENT YEARS 2000-01 TO 2003-04 W ARRANTING ISSUE OF NOTICE U/S. 153C. THEREFORE THE ASSESSING OFFICER SHO ULD NOT HAVE PROCEEDED MECHANICALLY IN ISSUING THE NOTICES U/S. 1 53C. 9. NOTHING IS SEIZED PERTAINING TO A.Y 2000-01 TO 2003 -04 OBVIOUSLY THERE IS NO QUESTION OF RECORDING SATISFA CTION NOTE AND FORWARDING THOSE SEIZED MATERIALS TO THE ASSESSING OFF ICE OF THE APPELLANT. IN ABSENCE OF ANY SEIZURE OF ANY ASSET DOCUMENTS E TC PROCEEDING CANNOT BE INITIATED AGAINST THE APPELLANT U/S. 153C(1) RWS 153A REFER P. SRINIVAS NAIK VS. ACIT 114 TTJ 856 BANGALORE. (SEE PAGE N O. 53). 10. THOUGH THE SECTION 153C ONLY REQUIRES THE SATIS FACTION TO THE EFFECT THAT DOCUMENTS ETC. SEIZED BELONG TO THE CONNECTED PERSON NONETHELESS IT IS NECESSARY THAT SEIZURE OR REQUISITIO N MUST BE OF SUCH A CHARACTER AS TO PERSUADE THE ASSESSING OFFICER TO EVEN REOPEN THE CLOSED ASSESSMENTS. REFER DELHI HIGH COURT JUDGEMENT IN THE CASE OF SARAYA IND. LTD. VS. UOI 216 CTR 257. ALSO REFER THE SUPREME CO URT JUDGEMENT IN ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 7 OF 15 THE CASE MAHESH MAHESHWARI 289 ITR 341 WHERE THE APEX COURT HAS HELD THAT FISCAL LAW SHOULD BE CONSTRUCTED STRICTLY. (SEE PAGE NO. 40 AND 44) THE TERM BELONG IMPLIES SOMETHING MORE THAN A CASUAL CONNECTION AN D IT INVOLVES THE NOTION OF CONTINUITY INVOLVING INT IMATE CONNECTION OVER A PERIOD OF TIME. REFER BANGALORE ITAT BENCH JUDGEMENT I N THE CASE OF P SHRINAWAS NAIK VS. ASST. CIT 114 TTJ 856. (SEE PAGE NO. 53). 11. MERE PASSING OF THE SEIZED MATERIAL BY THE ASSESSIN G OFFICER OF THE SEARCHED PERSON DOES NOT AMOUNT TO R ECORDING OF REQUISITE SATISFACTION AND PROCEEDING U/S. 153C(1) IN SUCH A CASE WILL BE TREATED AS WITHOUT JURISDICTION . REFER NAUVIK INVESTMENT AND COMMERCIAL ENTERPRISE LTD. VS. DCIT- 5 DTR 479 DELHI HIGH COURT. COPY ENCLOSED (SEE PAGE NO. 58). 12. THE ISSUE OF NOTICE U/S. 153C(1) IN THE ABSENCE OF THE REQUIREMENT OF PRIMA-FACIE BELIEF THAT THERE COULD BE SOME HIDDEN INCOME IT WOULD NOT BE WITHIN THE PREDOMINANT OBJECT OF ASSESSING THE UNDISCLOSED INCOME FOR WHICH SECTION 153A AND 153C A RE BROUGHT ON STATUTE. 13. IT IS TRUE THAT SECTION 153C(1) PROVIDES THAT ON RECEIVING THE REQUISITE SATISFACTION FROM THE ASSESSING OFFICER THE ASSESSING OFFICER OF THE CONNECTED PERSON SHALL PROCEED AGAINST THE CONN ECTED PERSON FOR MAKING THE ASSESSMENT OR REASSESSMENT U/S. 153A. THE WORD SHALL IS INDICATIVE OF ENABLING THE ASSESSING OFFICER WITH T HE POWER TO PROCEED AGAINST THE CONNECTED PERSON AND THAT WORD IS NOT IND ICATIVE OF A MANDATORY DUTY. SUBMITTED THAT THE WORD SHALL SHOULD BE INTERPRETED AS ONLY DIRECTORY. THERE IS A LOGIC TO MAKE THIS PROPOSITION. IT IS BECA USE CERTAIN DOCUMENTS BELONGING TO THE CONNECTED PERSON ARE FOUND WITH THE SEARCHED PERSON AND IF THE ASSESSING OFFICER FINDS THAT THE TRANSACTI ONS MENTIONED IN THE SEIZED MATERIAL HAVE ALREADY BEEN DULY DISCLOSED BY T HE CONNECTED PERSON OR DULY RECORDED IN THE BOOKS OF ACCOUNTS REGULARLY MAI NTAINED IN THAT CASE IT WOULD BE INCORRECT OR UNFAIR FOR THE ASSESSING OFFICER TO PROCEED AGAINST THE CONNECTED PERSON CAUSING UNNECESSARY INCO NVENIENCE AND TROUBLE. 14. IT IS A KNOWN FACT THAT IN THE COURSE OF SEARCH WHILE EFFECTING THE SEIZURE THE SEARCH OFFICIALS NEED NOT HAVE TO FIND O UT WHETHER THE VALUABLE DOCUMENT ETC BELONGING TO THE CONNECTED P ERSON ARE DULY DISCLOSED BY HIM OR OTHERWISE AND NATURALLY THESE DOCU MENTS VALUABLES ETC. ARE ALSO SEIZED. THEREFORE MERE ACT OF SEIZURE DO ES NOT BY ITSELF LAY THE FOUNDATION FOR THE REASONABLE PRIMA-FACIE BELIEF THAT THERE IS SOME UNDISCLOSED INCOME. THE SEIZURE MUST BE OF SUCH A CH ARACTER AS TO PERSUADE THE ASSESSING OFFICER TO EVEN REOPEN THE COM PLETED ASSESSMENT SARYA INDUSTRIES VS. UOI 216 CTR 25/306 ITR 189 (SEE PAGE NO. 40). THE TAX LAW WILL BE INTERPRETED REASONABLE AND INCONS ONANCE WITH JUSTICE ADOPTING A PURPOSIVE APPROACH TO EFFECTUATE THE LEGI SLATIVE INTENTION. REFER CIT VS. GWALIOR RAYON SILK MFG. CO. LTD.- SUPREM E COURT 196 ITR 149 AND CIT VS. DODSAL LTD. - BOMBAY HIGH COURT 2 18 CTR 430. (SEE PAGE NO. 67 TO 75 AND PAGE NO. 76 TO 78). ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 8 OF 15 THE OBJECT BEHIND SECTION 153A AND SECTION 153C IS UNDISPUTEDLY TO BEING TO TAX UNDISCLOSED INCOME AND THEREFORE WHERE THE ASSE SSING OFFICER OF THE CONNECTED PERSON IS SATISFIED THAT THE SEIZED MA TERIALS RECEIVED BY HIM DOES NOT PRIMA-FACIE INDICATE THE EXISTENCE OF U NDISCLOSED INCOME HE NEED NOT SUBJECT THE CONNECTED PERSON TO NEEDLESS IN CONVENIENCE BY INITIATING AN ACTION U/S. 153C RWS 153A. SUCH AN ACTION OF THE ASSESSING OFFICER WOULD BE CO NTRARY TO THE PRINCIPLE OF NATURAL JUSTICE AND HAS BEEN SO HELD BY THE SUPREM E COURT IN SEVERAL CASES. REFER THE JUDGEMENT OF SUPREME COURT IN SAHARA INDIA (FIRM) VS CIT 216 CTR 303. ON THE SAME ANALOGY IT WILL BE LOG ICAL AND FAIR ON THE PART OF THE ASSESSING OFFICER OF THE CONNECTED PERSON TO AT LEAST GET HIMSELF SATISFIED THAT THE TRANSACTION NOTED IN THE DOCUMENT ARE OF SUCH A NATURE SUGGESTING NON DISCLOSURE OF INCOME AND FOR THA T PURPOSE SUCH ASSESSING OFFICER MAY CALL THE CONNECTED PERSON AND E NSURE THAT WHETHER THOSE TRANSACTIONS ARE INFACT DISCLOSED AND ACCOUNTED IN THE REGULAR BOOKS OF ACCOUNTS OR OTHERWISE. 5. ON THE OTHER HAND LD. DR FOR THE REVENUE ARGUED S TATING THAT THERE EXISTS THE SEIZURE OF THE VARIOUS DOCUMENTS BELONGING TO SINHGAD TECHNICAL EDUCATION SOCIETY (STES) FROM THE PREMISES OF MR NAVAL E AND THOSE DOCUMENTS UNDOUBTEDLY BELONG TO THE ASSESSEE AND IN SUCH CIRCU MSTANCES REQUIREMENT OF THE LAW AS MENTIONED IN SECTION 153C OF THE ACT ARE MET AND THEREFORE THE A.O VALIDLY ASSUMED JURISDICTION U/S. 153C OF THE INCOME TAX ACT. FURTHER AS PER THE DR THERE IS NO NEED FOR SEIZURE OF ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLES OR THING OR BOOKS OF ACCOUNT OR D OCUMENTS WITH ASSESSMENT YEAR SPECIFICITY. LD DR IS OF THE VIEW THAT MERE SEIZ URE OF ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLES OR THING OR BO OKS OF ACCOUNT OR DOCUMENTS BELONG TO THE PERSON COVERED U/S 153C OF THE ACT IS S UFFICIENT FOR THE AO TO ASSUME JURISDICTION IN RESPECT OF ALL THE SIX YEARS AS PER THE PROVISO TO SECTION 153A OF THE ACT AND THERE IS REQUIREMENT OF THE LAW T HAT THERE MUST EXIST SEIZURE OF ANY OF THE LIST MENTIONED ABOVE BELONGING TO ALL SIX YEARS BEFORE ASSUMING JURISDICTION U/S 153C OF THE ACT. FURTHER LD DR RELIE D ON THE ORDER OF THIS BENCH IN THE CASE OF KUMAR & COMPANY VIDE ITA NO. 1020/PN/ 08 AND OTHERS FOR THE A.YS 2001-02 TO 2003-04 DATED 02-02-2010 FOR THE PRO POSITION THAT THE AO RIGHTLY ASSUMED JURISDICTION AND HE READ OUT THE CONTE NTS OF PARA 24 OF SOME OF THE FINDINGS OF THE TRIBUNAL. 6. DURING THE TIME FOR REBUTTAL LD. COUNSEL RELIED ON ANOTHER ORDER OF THE TRIBUNAL IN THE CASE KUMAR & COMPANY VIDE ITA NO. 463 /PN/08 FOR THE A.Y 2000-01 DATED 02-02-2010 AND READ OUT PARA 25 OF THE SAID ORDER FOR THE ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 9 OF 15 PROPOSITION THAT THE A.O CANNOT ASSUME JURISDICTION U /S. 153C UNLESS THE DOCUMENTS SEIZED BELONG TO THE ASSESSEE MUST NOT ON LY BE A SPEAKING ONE BUT ALSO THE PRIMA FACIE INCRIMINATING ONE AND THE SUCH I NCRIMINATING MATERIAL SHOULD PERTAIN TO THE SIX ASSESSMENT YEAR ATTEMPTED TO BE DI STURBED BY ISSUE OF NOTICE U/S. 153C OF THE ACT. AS PER LD COUNSEL THE PROVISIO NS OF SEC. 153C CANNOT BE INVOKED AUTOMATICALLY IN RESPECT OF THE SIX A.YS U NLESS THERE EXISTS INCRIMINATING DOCUMENTS FOR ALL THE SIX A.YS AND THE PROVISION OF SECTION 153C CANNOT BE INVOKED BASED ON THE ROUTINE INFORMATION OR ALREADY ACC OUNTED INFORMATION DISCLOSED TO THE DEPARTMENT. FURTHER IT IS MENTIONED THAT UNLESS SOME SEIZED PAPERS ARE AVAILABLE WITH INCRIMINATING DOCUMENT SETT LED AND COMPLETED ASSESSMENT SHOULD NOT BE DISTURBED ROUTINELY AND AUTO MATICALLY MERELY FOR THE REASONS OF THE FIRST PROVISO TO SEC. 153A OF THE INCO ME TAX ACT. FURTHER HE REITERATED THE ARGUMENT THAT CONSIDERING THE FACT THAT THE DOCUMENTS ARE RECEIVED BY THE AO ON 18/4/2007 RELEVANT TO THE A.Y 2 008-09 THE ASSESSING OFFICER OF THE APPELLANT CAN ISSUE NOTICES U/S. 153C FOR THE A.YS 2002-03 TO 2007-08 AND THE ISSUE OF NOTICES U/S. 153C FOR A.Y 2 000-01 TO 2001-02 IS NOT PERMISSIBLE AS HELD IN THE JUDGMENT OF ALLAHABAD BEN CH IN THE CASE OF VIJAY VIMAWAL VS. ACIT 124 TTJ 508. FURTHER HE REITERATED T HAT THE ASSESSMENT OF A.Y 2003-04 WAS COMPLETED U/S. 143(3) ON 30/03/2006. HE NCE ON THE DATE RELEVANT DOCUMENTS WERE RECEIVED BY THE ASSESSING OFFICER I.E . 18/04/2007 THIS ASSESSMENT WAS NOT PENDING AND MADE U/S. 153(C) THE REFORE THE NOTICE IS INVALID. FURTHER ALSO HE SUMMED UP STATING THAT THE REASONS RECORDED AND THE INCRIMINATING PAPERS RELATE TO THE AY 2005-06 AND NONE OF THESE PAPERS THEREFORE ARE RELATED TO FINANCIAL YEARS 1999-00 TO 2002 -03 I.E. (AY. 2000-01 TO 2003-04) AND THEREFORE THE NOTICES ISSUED IN RESPECT OF THE AYS UPTO 2003-04 SHOULD BE QUASHED . 7. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDERS OF T HE REVENUE. FURTHER WE HAVE GONE THROUGH THE VOLUMINOUS PAPER BOO KS WRITTEN SUBMISSIONS PLENTY OF CITATIONS FILED BY BOTH THE PARTIES TO ADVANCE THEIR RESPECTIVE ARGUMENTS. ON CONSIDERATION OF THE ORIGINAL GROUNDS AND THE ADDITIONAL GROUNDS WE FIND IT RELEVANT TO CONSIDER T HE ADDITIONAL GROUND FIRST AS IT RELATES TO THE LEGAL ISSUE AND IT GOES INTO THE ROOT OF THE MATTER. IT QUESTIONS THE VALIDITY OF THE NOTICE ISSUED ISSUED U/S 153C OF TH E ACT FOR ALL THE FOUR AYS UNDER CONSIDERATION. THE RELEVANT DISCUSSION IS GIVEN IN TH E FOLLOWING PARAGRAPHS OF THIS ORDER. ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 10 OF 15 8. ADDITIONAL GROUND: INVALID NOTICES U/S 153C: IN THIS REGARD WE HAVE PERUSED THE REASONS RECORDED BY THE AO OF THE ASS ESSEE. WE FIND THAT THERE EXISTS THE REASONS FOR ISSUE OF NOTICE U/S 153C OF THE ACT AND IT IS AN UNDISPUTED FACT. WE ALSO FIND THAT THEY ARE COMMON REASONS FOR ALL SIX AYS INCLUDING THE FOUR AYS UNDER CONSIDERATION. THE COUN SEL FOR THE ASSESSEE ARGUED VEHEMENTLY THAT AO ISSUED NOTICES U/S 153C SIMPLY R ELYING ON THE CONTENTS OF SECTION 153A(1)(B) OF THE ACT AND ALSO ITS FIRST PROV ISO IGNORING VARIOUS SETTLED LEGAL PROPOSITIONS IE THE CONCLUDED ASSESSMENTS WHI CH FALL IN THE BUNCH OF SIX AY SHOULD NOT DISTURBED UNLESS THERE EXISTS INCRIMIN ATING MATERIAL RELEVANT FOR THE SAID AYS OR CONCLUDED ASSESSMENTS AND SUCH INCRIM INATING MATERIAL SHOULD BE OF THAT NATURE IT SHOULD NOT BE A DUMB DOCUMENTS. IN THIS REGARD THE STAND OF THE REVENUE IS THAT THE EXPRESS PROVISIONS ARE CLEAR ON THE PROPOSITION THAT THE AO IS EMPOWERED UNDER THE STATUTE TO ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED.. (FIRST PROVISO). CONSIDERING THE CONTRARY STANDS OF THE PARTIES WITHOUT GOING INTO THE MERITS OF THE ADDITIONS WE HAVE DECIDED TO ADJUDICATE THE LEGAL ISSUE IE AD DITIONAL GROUND AND IT INVOLVES THE STUDY THE DETAILS OF THE REASONS RECORDED BY THE A O BASED ON WHICH THE AO ISSUED THE IMPUGNED NOTICES U/S 153C OF THE ACT FOR THE IMPUGNED FOUR AYS. FOR THIS PURPOSE WE HAVE EXTRACTED THE RELEVANT PORTION OF THE REASONS AND THE SAME READ AS FOLLOWS. 9. SATISFACTION NOTE FOR PROCEEDINGS U/S 153C OF THE I T ACT 1961 IN THE CASE OF M/S SINHGAD TECHNICAL EDUCATIONAL SOCIETY ( STES) PUNE 1) PAGE 11 THIS IS VOUCHER OF SINHGAD TECHNICAL EDUCATION SOCIETY (STES) DT. 17-01- 2004 FOR CHEQUE PAYMENT OF RS. 2.80 LACS TO AMIR MOIDDIN SHAIKH. 2) PAGE 12 THIS IS VOUCHER OF STES DT. NIL FOR C HEQUE PAYMENT OF RS. 1 LACS TO AMIR MOIDDIN SHAIKH. 3) PAGE NO. 13- THIS IS VOUCHER OF STES DT. 30.01. 2005 FOR CHEQUE PAYMENT OF RS. 2 LACS TO SHAIKH AMIR SHAIKH. 4) PAGE NO. 14- THIS IS VOUCHER OF STES DT. 27.09. 2004 FOR CASH PAYMENT OF RS. 1 LACS TO SHAKI AMIR SHAIKH 5) PAGE NO. 15- THIS IS VOUCHER OF STES DT. NIL FO R CHEQUE PAYMENT OF RS. 50 000/- TO SHAIKH AMIR SHAIKH. 6) PAHE NO. 45- THIS IS AN OFFICE COPY OF LETTER D T. 23.06.2007 WRITTEN TO DIRECTOR OF DTE MUMBAI BY SINHGAD COLLEGE OF PH ARMACY OWNED BY STES. ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 11 OF 15 BUNDLE NO. A-2 7) PAGE NO. 35- THERE ARE THE BALANCES AVAILABLE T O VARIOUS INSTITUTE OF STES ON OR BEFORE 25.06.2005. BUNDLE NO. A-4 8) PAGE NO. 50 & 54 THESE PAGES CONTAINS THE DET AILS OF STAFF ARRANGEMENTS MADE BY THE STES COLLEGE OF ENGINEERIN G FOR ADMISSION PROCESS FOR F.Y. 2003-04. 9) PAGE NO. 58 TO 60- THESE PAGES CONTAIN THE DETA ILS OF EXPENSES INCURRED BY STES. 10. FROM THE ABOVE IT IS DEMONSTRATED BY THE LD COUN SEL THAT THE ITEMS AT SL NO 1 TO 5 ABOVE BELONGS TO THE AY 2004-05 OR THEREAFT ER. REFERRING TO THE REST OF THE ITEMS AT SL. 6 TO 9 ABOVE THE COUNSEL MENTIONE D THE SAID DOCUMENTS SEIZED ARE EITHER RECORDED IN THE BOOKS OF ACCOUNT OR INVOLVES CHEQUE TRANSACTIONS. THUS HE SUMMED UP STATING THAT THE DOCUMENTS IN QUESTION ARE NEITH ER THE INCRIMINATING ONES NOR UNACCOUNTED TRANSACTIONS OF TH E ASSESSEE AND NOR THEY RELATE TO THE IMPUGNED FOUR AYS. IN SUCH CIRCUMSTANCES THE AO NOT ONLY ASSUMED JURISDICTION INVALIDLY BUT ALSO ERRED IN DISTU RBING THE SETTLED AND COMPLETED ASSESSMENTS. ACCORDINGLY AO SHOULD NOT A SSUME JURISDICTION IN RESPECT OF SUCH AYS IN THE ABSENCE OF ANY INCRIMINATI NG INFORMATION OR TRANSACTIONS SPECIFIC TO ANY OF THE IMPUGNED FOUR AY S IE 2000-01 TO 2003-04. THE CONTRARY ARGUMENT FROM THE SIDE OF THE REVENUE IS THAT THE OVERALL APPROACH IN MATTERS OF CONCEALMENT BY THE GROUP ASSESSES AND ALL THE DISCOVERIES OF THE SEARCH ON MR NAVALE AND IT CONCERNS HAVE TO BE TAKEN INTO ACCOUNT WHILE FORMING THE SATISFACTION WITHIN THE MEANING OF SECTI ON 153C OF THE ACT. CONSIDERING THE DIVERGENT VIEWS OF THE PARTIES WE HA VE EXAMINED THE SAID SATISFACTION NOTE VERY CLOSELY AND FOUND THAT THE IM PUGNED REASONS MENTIONED BY THE AO ARE SILENT IN SO FAR AS ANY AY-SPECIFIC-INCRIMI NATING-INFORMATION (ASII) OR OTHERS IE UNACCOUNTED OR UNDISCLOSED OR HIDDEN INFORMAT ION TO THE REVENUE BY THE ASSESSEE. IN OUR OPINION THE IMPUGNED SATISFACT ION NOTE IS VERY GENERAL ONE FOR SIX YEARS. IT IS SURPRISING TO NOTE THAT THE AO HA S NARRATED SOME INFORMATION AGAINST THE MR NAVALE HUF WHICH IS NOT RELEVANT FOR T HE PRESENT ASSESSEE. IN THE PROCESS THE AO TOTALLY MISSED THE REQUIREMENTS OF TH E LAW IE ONLY THE AY WITH THE PENDING ASSESSMENTS AND THE AY WITH THE AY SPEC IFIC INCRIMINATING DOCUMENTS/ TRANSACTIONS OR SEIZED ASSET SHOULD ONLY B E REOPENED UNDER THE PROVISIONS OF THE FIRST PROVISO TO SECTION 153A OF THE ACT AND NOT OTHERWISE. 11. IN THIS REGARD WE HAVE PERUSED VARIOUS LEGAL PROPOS ITIONS. FIRST WE HAVE PERUSED THE DECISION OF THIS TRIBUNAL IN THE CASE OF KUMAR COMPANY FOR THE AY ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 12 OF 15 2000-01 (SUPRA) AND PARA 26 OF THE M/S. KUMAR AND COMP ANY VIDE ITA NO. 463/PN/08 FOR THE A.Y 2000-01 AND THE SAME READS AS F OLLOWS:- 25. THUS WE FIND THAT THE SEIZED DOCUMENTS BELONG TO THE ASSESSEE BY WAY OF LIMITED OWNERSHIP AND THEY ARE NOT DUMB DOCU MENTS AS ADVOCATED BY THE LD COUNSEL FOR THE REASON MENTIONED ABOVE. H OWEVER THEY ARE NOT FOUND TO BE INCRIMINATING DOCUMENTS FOR THE AY 2000-01. THE DOCUMENT MAY NOT BE A DUMB DOCUMENT AND THEREFO RE A SPEAKING ONE BUT THEY MUST BE THE DOCUMENT WITH PR IMA FACIE INCRIMINATING INFORMATION TOO. SUCH INCRIMINATING N ATURE OF THE SEIZED DOCUMENT IS AN ESSENTIAL FACTOR FOR SWITCHING ON TH E PROCEEDING U/S 153C. IN OTHER WORDS THE DOCUMENT SEIZED MUST NOT ONLY BE A SPEAKING ONE BUT ALSO BE PRIMA FACIE INCRIMINATING ONE FOR IGNITING THE PROCEEDINGS U/S153C. UNLIKE OTHER AYS THERE IS NOT HING MADE OUT BY THE AO WHAT IS CALLED INCRIMINATING FOR THE CURRENT AY UNDER CONSIDERATION. WHEN THE IMPUGNED DOCUMENTS MERELY CONTAINS THE NOT INGS OF ENTRIES WHICH ARE ALREADY FOUND PLACE IN THE BOOKS OF ACCOU NTS OR SUBJECTED TO SCRUTINY OF THE AO IN THE PAST IN REGULAR ASSESSMEN T U/S 143(3) OF THE ACT SUCH DOCUMENT CANNOT BE SAID TO BE CONTAINING THE I NCRIMINATING INFORMATION. WHAT IS THE POINT IN DISTURBING THE SE TTLED ASSESSMENT WHEN THE REVENUE DOES NOT HAVE INCRIMINATING INFORMATION FOR AN AY AND THE INFORMATION WHAT IS AVAILABLE IS ONLY ROUTINE ONE A ND WHEN THE AO MERELY MAKES AN ADDITION IN THE ASSESSMENT U/S 153C BASED ON CHANGE OF OPINION AND WHEN SUCH ADDITIONS ARE LIKELY TO BE DE LETED IN VIEW OF THE SETTLED NATURE OF THE ISSUES? INCOME TAX PROVISIONS ARE NOT MERELY FOR THE ISSUE OF NOTICE U/S 153C BUT IT IS ESSENTIALLY FOR TAXING THE INCOME OF THE PERSON. WHAT IS POINT IN ISSUING NOTICE U/S 153C ON FLIMSY GROUNDS AND FINALLY TAX NOTHING? SUCH PROCEEDINGS ONLY CREATES AVOIDABLE NUISANCE BOTH TO THE OVER-BURDENED TAXMAN AND THE MUCH HAZZL ED TAXPAYERS. IN THE INSTANT CASE PROVISIONS OF SECTION 153C ARE IN VOKED MERELY TO APPLY THE PROVISIONS OF SECTION 45(4) IN THIS YEAR THE I SSUE WHICH WAS ALREADY EXAMINED AND CONCLUDED AS INAPPLICABLE TO THE FACTS OF THE CASE. SUCH ISSUE OF NOTICE IS UNWARRANTED AND SUCH REOPENING O F THE ASSESSMENT FOR THE AY 2000-01 IS UNCALLED FOR. 26. THEREFORE THE PROCEEDINGS INITIATED U/S 153C IS NOT VALID IN VIEW OF THE DECISION IN THE CASE OF LMJ INTERNATIONAL (S UPRA). UNDER THESE CIRCUMSTANCES WE ARE OF THE OPINION THE AO HAS IN VALIDLY ISSUED THE NOTICE U/S 153C FOR THE AY 2000-01 ON THE WRONG PRESUMPTION THAT AO CAN ASSUME JURISDICTIONAL IN RESPECT ALL THE SIX AYS AUTOMATICALLY EVEN WITH OUT ANY INCRIMINATING DOCUM ENTS IN RESPECT OF THE CONCLUDED ISSUES TOO . ACCORDINGLY THE RELEVANT GROUNDS OF THE ASSESSEE ARE ALLOWED. 12. FROM THE ABOVE IT IS OUR FINDING THAT THE REASONS RECORDED BY THE AO AS EXTRACTED ABOVE DO NOT CONTAIN ANYTHING INCRIMINATING FOR THE AYS UPTO 2003-04. IT IS THE SETTLED POSITION OF THE LAW BASED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF LMJ INTERNATIONAL (SUPRA) THAT THE ISSUE OF N OTICE UNDER THE PROVISIONS OF THE FIRST PROVISO TO SECTION 153A(1) OF THE ACT IS NO T AUTOMATIC AND THERE IS NEED ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 13 OF 15 FOR AY-SPECIFIC INCRIMINATING INFORMATION (ASII) IN TH E POSSESSION OF THE AO TO BE THE FOUNTAIN HEAD FOR SPRINGING SATISFACTION TO HIM T HAT THERE EXISTS SOME INCOME OR ASSET TO BE ASSESSED IN THE HANDS OF ANY OTHER PERS ON WHO ARE REFERRED TO IN SECTION 153C OF THE ACT. REASON FOR THIS KIND OF IN TERPRETATION WAS ALREADY GIVEN IN PARA 25 AND 26 OF OUR ORDER IN THE CASE OF KUMAR COMP ANY FOR THE AY 2000- 01. IN THIS REGARD WE POSED QUESTION TO OURSELVES IF IT IS FAIR TO REOPEN THE ASSESSMENT WHICH IS ALREADY CONCLUDED WITHOUT ANY REA SON OR LOGIC THEREBY ENCROACH ON THE RIGHTS OF THE TAX PAYERS? SHOULD THE A O BE GIVEN UNFETTERED OR ARBITRARY POWERS TO ISSUE NOTICE FOR THE SIX AYS SPECIF IED IN THE FIRST PROVISO TO SECTION 153A(1) OF THE ACT WHEN THE IMPUGNED ASSESS MENTS FOR THE SAID SIX AYS ARE OTHERWISE REACHED FINALITY AFTER DUE PROCESS OF LAW. IN OUR OPINION THE ANSWER IS NEGATIVE AND IT IS IN FAVOUR OF THE ASSESS EE. IN ANY CASE DR HAS NOT BROUGHT ANYTHING ON RECORD TO DEMONSTRATE THAT THE DECI SIONS GIVEN BY THE TRIBUNAL IN THE CASE OF LMJ INTERNATIONAL (SUPRA) AND M/S KUMAR COMPANY (SUPRA) ARE NOT TO BE FOLLOWED IN THIS CASE. OUR PERUSA L OF ANOTHER ORDER OF THE TRIBUNAL IN THE CASE OF M/S KUMAR COMPANY FOR THE AY 2 201 TO 2003-04 VIDE ITA NO 1020 1250 1021 1251 1022 & 1252/PN/2008 RELIED U PON BY THE LD DR IS FOUND DISTINGUISHABLE IN SO FAR AS THE EXISTENCE OF THE INCRIMINATING DOCUMENT FOR THE RELEVANT AY IS CONCERNED. WHEREAS IN THE INST ANT CASE FIRST OF ALL THERE IS NO MENTION OF ANY DOCUMENT IN THE S AID REASONS RELATABLE TO THE IMPUGNED FOUR YEARS AND THE INCRIMINATING NATURE OF THE SAME IS OUT OF QUESTION. THEREFORE RELIANCE OF THE DR ON THE SAID CASE IS MISP LACED. 13. FURTHER WE HAVE EXAMINED VARIOUS OTHER JUDICIAL PRO POSITIONS MENTIONED BY THE LD COUNSEL AND SOME OF THEM ARE REPRODUCED AS UNDER. 1) ANIL KUMAR BHATIA & ORS. (2010) 1 ITR (TRIB) 48 4 (DEL) CONCLUSION:- IN RESPECT OF AN ASSESSMENT UNDER S. 153A WHERE P ROCESSING RETURNS UNDER S. 143(1)(A) STOOD COMPLETED IN RESPECT OF RE TURNS FILED IN DUE COURSE BEFORE SEARCH AND NO MATERIAL IS FOUND IN SEARCH THEREAFTER NO ADDITION CAN BE MADE. 2) SUNCITY ALLOYS (P) LTD. (2009) 124 TTJ (JD) 67 4 CONCLUSION:- ASSESSMENTS OR REASSESSMENTS MADE PURSUANT TO NOTI CE UNDER S. 153A ARE NOT DE NOVO ASSESSMENT AND THEREF ORE NO NEW CLAIM OF DEDUCTION OR ALLOWANCE CAN BE MADE BY ASSESSEE WHER E ADMITTEDLY THE REGULAR ASSESSMENTS ARE SHOWN AS COMPLETED ASSESSME NTS ON THE DATE OF INITIATION OF ACTION UNDER S. 132. ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 14 OF 15 3) MEGHMANI ORGANICS LTD. (2010) 129 TTJ (AHD) 255 CONCLUSION:- RECORD MAINTAINED BY A PERSON FOR HIS OWN PURPOSE THOUGH REFERABLE TO THE ASSESSEE CANNOT BE SAID TO BE BELONGING TO THE ASSESSEE WITHIN THE MEANING OF S. 153C. FURTHER WH ERE NONE OF THE ASSESSMENTS ARE PENDING ON THE DATE OF ACTION UNDER S. 153C SUCH ASSESSMENTS DO NOT ABATE . 4) LMJ INTERNATIONAL LTD. (2008) 119 TTJ (KOL) 214 CONCLUSION:- WHERE NOTHING INCRIMINATING IS FOUND IN THE COURSE OF SEARCH RELATING TO ANY ASSESSMENT YEARS THE ASS ESSMENTS FOR SUCH YEARS CANNOT BE DISTRIBUTED; ITEMS OF REGULAR ASSESSMENT CANNOT BE ADDED BACK IN THE PROCEEDINGS UNDER S. 153C WHEN NO INCRIMINATING DOCUMENTS WERE FOUND IN RESPECT OF THE DISALLOWED A MOUNTS IN THE SEARCH PROCEEDINGS. 5) KAILASH AUTO FINANCE LTD. (2009) 32 SOT 80 (LUCK ) CONCLUSION:- A NOTICE UNDER S. 148(1) CAN BE ISSUED EVEN WHERE NOTICE UNDER S. 143(2) HAS BEEN PENDING AND NOT CLOSED. BY PROCESSING THE RETURN AND BY ISSUING ACKNOWLEDGMENT AS TOKEN OF AC CEPTING THE RETURN THE PROCEEDINGS INITIATED BY FILING THE RETURN ARE TERMINATED AND NO PROCEEDINGS THEREFORE REMAIN PENDING. 6) R.M.L. MEHROTRA (2010) 320 ITR 403 CONCLUSION:- UNDISCLOSED INCOME OF THE BLOCK PERIOD HAS TO BE DETERMINED ON THE BASIS OF EVIDENCE FOUND AS A RESU LT OF SEARCH OR REQUISITION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WITH THE A.O AND RELATABLE TO SUCH EVIDENCE; AO CANNOT COMPUTE THE INCOME ON THE BASIS OF BEST JUDGEMENT. 14. FROM THE ABOVE IT IS EVIDENT THAT THE WHERE NOTH ING AY AND ASSESSEE SPECIFIC INCRIMINATING MONEY JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS THE ASSESSMENTS FOR ASSESSEE YEARS CANNOT BE DISTRIBUTED. FURTHER THE CONCLUDED ASSESSMENTS SHOULD NOT BE DISTURBED MERELY FOR MAKING ROUTINE ADDITIONS WHICH COULD HAVE BEEN O THERWISE DONE IN THE REGULAR ASSESSMENT AND OF COURSE THE PENDING ASSESSME NTS FALL UNDER EXCEPTIONS. AS STATED BY THE LD COUNSEL POINT NO 9 OF HIS NOTE REPRODUCED ABOVE NOTHING IS SEIZED PERTAINING TO A.Y 2000-01 TO 2003-04 OBVIOUSLY THERE IS NO QUESTION OF RECORDING SATISFACTION NOTE. ON THIS R EASONING ITSELF WE FIND THAT THE ASSESSEE HAS TO SUCCEED. THEREFORE WE DO NOT EXA MINE THE OTHER ARGUMENTS OF THE COUNSEL. OTHERWISE THE COUNSEL ARGUED THAT TH E REOPENING OF THE ASSESSMENT FOR THE AY 2000-01 TO 2001-02 IS IMPERMISS IBLE IN VIEW OF THE JUDGMENT OF ALLAHABAD BENCH IN THE CASE OF VIJAY VI MAWAL VS. ACIT 124 TTJ 508. ITA NO. 114 TO 117/PN/10 A.Y: 2000-01 TO 2003-04 PAGE 15 OF 15 FURTHER HE ALSO ARGUED THAT THE ASSESSMENT OF A.Y 200 3-04 WAS ACTUALLY COMPLETED U/S. 143(3) ON 30/03/2006 IE PRIOR TO RECEIP T OF THE IMPUGNED DOCUMENTS BY THE ASSESSING OFFICER ON 18/04/2007 TH IS ASSESSMENT WAS NOT PENDING. ATTENDING TO THESE ARGUMENTS OF THE COUNSEL IS SUPERFLUOUS AND MERELY AN ACADEMIC EXERCISE AS WE HAVE UPHELD THE APPLICABI LITY OF THE DECISION OF THE TRIBUNAL IN THE CASE OF LMJ INTERNATIONAL LTD (SUPRA) FOR THE PROPOSITION THAT THE WHERE NOTHING INCRIMINATING IS FOUND IN THE COURSE OF SEARCH RELATING TO ANY ASSESSMENT YEARS THE ASSESSMENTS FOR SUCH YEARS CA NNOT BE DISTRIBUTED AND OTHER LOCAL DECISION CITED ABOVE. ACCORDINGLY THE A DDITIONAL GROUND RAISED BY THE ASSESSEE FOR ALL THE FOUR APPEALS UNDER CONSIDERATION A RE ALLOWED AND IN FAVOUR OF THE ASSESSEE. 15. AS THE ADDITIONAL GROUND FOR ALL THE FOUR YEARS ARE ALLOWED IN FAVOUR OF THE ASSESSEE WE ARE OF THE CONSIDERED OPINION THE ADJUDI CATION OF THE GROUNDS RELATING TO THE MERITS OF THE ADDITIONS IS MERELY AN A CADEMIC EXERCISE. THEREFORE THE RELEVANT GROUNDS IN ALL THE FOUR APPEALS ARE DISMIS SED AS ACADEMIC. 16. IN THE RESULT ALL FOUR APPEALS OF THE ASSESSEE ARE ALLOWED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY 2011. SD/- SD/- (I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 28 TH JANUARY 2011. R COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. ACIT CENTRAL CIRCLE 2(2) PUNE 3. CIT(A)-II PUNE 4. CIT(CENTRAL) PUNE 5. D.R. ITAT B BENCH BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE