ITO 25(3)(2), MUMBAI v. KANTILAL R. SHAH, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI R.S. SYAL (AM) AND SMT ASHA VIJAYARAGHA VAN (JM) ITA NO. 1771/MUM/2010 (ASSESSMENT YEAR-1996-97) THE ITO 25(3)(2) C-11 R.NO. 306 PRATYSKHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA (E) MUMBAI-400 051 VS. SHRI KANTILAL R. SHAH A-2 MATRU ASHISH NEAR BAL BHARTI SCHOOL S.V. ROAD KANDIVALI(W) MUMBAI-400 067 PAN-AEAPS 3801F (APPELLANT) (RESPONDENT) APPELLANT BY: MRS. ASHINA GUPTA RESPONDENT BY: SHRI SHALIN S. DIVATIA O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD. CIT(A)-35 MUMBAI DATED 14.12.2009 FOR THE A.Y. 1996-97. 2. THIS APPEAL ARISES OUT OF THE ORDER OF HONBLE I TAT IN ITA NO. 4480/MUM/05 DT. 26.3.2008. IN THE ABOVE ORDER THE HONBLE TRIBUNAL DIRECTED THE CIT(A) TO DECIDE THE ISSUE OF TIME BAR RED ASSESSMENT FOR VERIFYING THE ASSESSMENT RECORDS. THE RESTORED APP EAL WAS TAKEN ON RECORD AND HEARING NOTICES WERE ISSUED TO THE ASSES SEE AND THE AO. FURTHER THE AO WAS DIRECTED TO SUBMIT HIS REPORT AF TER VERIFYING HIS RECORDS REGARDING THE CLAIM OF THE ASSESSEE THAT TH E ASSESSMENT WAS TIME BARRED. THE ASSESSEE CONTENDED THAT EVEN THOU GH THE ASSESSMENT ORDER DT. 29.3.2004 THE SAME WAS PASSED IN THE MONTH OF APRIL 2004 AS THE AO REFERRED TO BANK LETTER DT. 8 .4.2004 IN THE ASSESSMENT ORDER. THE AO SUBMITTED IN HIS REMAND R EPORT DT. 27.5.2009 WHICH WAS FORWARDED BY THE ADDL. CIT BY H IS LETTER DT. 1.6.2009. THE AO IN HIS REPORT SUBMITTED THAT THE RECORD INDICATED THAT THE AO IN THE 2 ND LAST PARA OF PAGE 2 OF THE ASSESSMENT ORDER ITA NO. 1771/M/10 2 MENTIONED THAT THE INFORMATION FROM BANK WAS DT. 28 .3.2004 AND RECORDS DO NOT INDICATE INCORPORATION OF ANY LETTER DT. 8.4.2004 IN THE ASSESSMENT ORDER AND THEREFORE THE CONTENTION OF THE APPELLANT DOES NOT APPEAR TO BE CORRECT. 3. A COPY OF REMAND REPORT WAS SUPPLIED TO THE REPR ESENTATIVE AND THE CASE WAS DISCUSSED WITH HIM. HE SUBMITTED THAT AS PER THE BANK LETTER COPY OF ACCOUNT WAS ENCLOSED IN WHICH THE T RANSACTIONS UPTO 7.4.2004 WERE INCLUDED WHICH MEANS THAT BANK COULD NOT HAVE SUBMITTED LETTER DT. 28.3.2004. HE FURTHER SUBMITTE D THAT THE LETTER ISSUED TO THE BANK WAS RECEIVED BY THE BANK ONLY ON 29.3.2004 AND THEREFORE THE REPLY COULD NOT HAVE BEEN SUBMITTED ON 28.3.2004. 4. THE LD. CIT(A) HELD AS FOLLOWS: THE RECORDS WERE CALLED FOR AND THE SAME WERE EXAM INED. IT WAS FOUND THAT ALONGWITH THE LETTER SARASWAT CO .OP. BANK LTD KANDIVALI BRANCH HAD ENCLOSED A COPY OF ACCOUNT UPT O 7.4.2004 IN PAGE 3 OF THE ENCLOSURE. IN THE COVERING LETTER T HERE WAS OVERWRITING IN THE MONTH COLUMN WHICH WAS CORRECTED AS 3 FROM 4. IT APPEARS THAT THE LETTER DT. 8.4.2004 WAS CORRECT ED AS 28.3.2004 BY INCORPORATING 2 BEFORE 8 AND BY CHANGING 4 AS 3. THE OVERWRITING OF 3 ON 4 IS EVIDENT FROM THE LETTER. FURTHER AS CONTENDED BY THE REPRESENTATIVE SHRI R.D. DHURI FR OM SARASWAT BANK HAS ACKNOWLEDGED THE ENQUIRY LETTER DT. 26.3.2 004 ISSUED BY THE AO ON 29.3.2004 AT 3.20 P.M. WITH SIGNATURE AND BANK SEAL. THE ABOVE CLEARLY INDICATES THAT THE BANK CO ULD NOT HAVE SUBMITTED REPLY ON 28.3.2004. A COPY OF LETTER GIV EN BY THE BANK ALONGWITH THE ENCLOSURE OF 3 PAGES IS ANNEXED TO TH IS APPELLATE ORDER. AS SEEN FROM PAGE 3 OF THE ANNEXURE THE DA TE IS WRITTEN FROM 1.4.2001 TO 7.4.2004 ON THE TOP AND AT THE END CLOSING BALANCE AS ON 7.4.2004 IS SHOWN AS 1130.50. THE AB OVE CLEARLY INDICATES THAT THE BANK LETTER DT. 8.4.2004 WAS COR RECTED AS 28.3.2004 TO SAVE THE LIMITATION OF TIME BARRING. IN THE CIRCUMSTANCES I ACCEPT THE CLAIM OF THE REPRESENTA TIVE THAT THE ASSESSMENT WAS NOT PASSED BEFORE 31.3.2004 AND THE SAME IS CANCELLED. THIS ISSUE WAS ALSO DISCUSSED WITH ADDL . CIT BY POINTING OUT THE EVIDENCES AVAILABLE ON RECORD FOR WHICH HE HAS NO SATISFACTORY REPLY EXCEPT STATING THAT IT WAS DONE LONG BACK WHEN NEITHER THE AO NOR HE WAS IN CHARGE OF THE CASE. AS THE ITA NO. 1771/M/10 3 ASSESSMENT IS CANCELLED THERE IS NO NECESSITY TO D EAL WITH THE OTHER ISSUES REMANDED BY THE HONBLE TRIBUNAL. IN THE RESULT THE APPEAL IS ALLOWED. 5. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) REVENU E IS IN APPEAL BEFORE US . 6. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON TH E ORDER OF THE LOWER AUTHORITIES. 7. THE LD. COUNSEL FOR THE ASSESSEE SHRI SHALIN S. DIVATIA BROUGHT TO OUR NOTICE THAT THE LETTER DT. 8.4.2004 FROM SARASW AT CO. OP. BANK LTD WHEREIN THE BANK HAD ENCLOSED THE COPY OF ACCOUNT IN WHICH THE TRANSACTIONS UPTO 7.4.2004 WERE INCLUDED. HE FURTH ER SUBMITTED AT PAGE-2 OF THE PAPER BOOK COPY OF THE LETTER OF THE ITO DT . 26.3.2004 ADDRESSED TO THE BANK WHICH WAS SERVED ON THE BANK ONLY ON 29.3. 2004 AND SUBMITTED THAT THE REPLY FROM THE BANK COULD NOT HAVE BEEN OB TAINED ON 28.3.2004. 8. WE HEARD BOTH THE PARTIES AND PERUSED THE MATERI AL AVAILABLE ON RECORD. AS PER THE BANKS LETTER THE COPY OF THE A CCOUNT WAS ENCLOSED IN WHICH THE TRANSACTION UPTO 7.4.2004 WERE INCLUDED WHICH MEANS THAT THE BANK COULD NOT HAVE SUBMITTED THE LETTER DT. 28.3.2 004. FURTHER THE ITO HIMSELF HAS ISSUED LETTER TO THE BANK MANAGER REQU ESTING FOR COPIES OF ACCOUNT OPENING FORM SIGNATURE VERIFICATION CARD A ND THE BANK STATEMENT FROM THE PERIOD FROM 1.4.1995 ONWARDS TILL DATE ON OR BEFORE 30.3.2004. WE THEREFORE DISMISS THE APPEAL OF THE REVENUE. 9. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON THIS 9 TH DAY OF FEBRUARY 2011 SD/- SD/- (R.S. SYAL) ( ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI DATED 9 TH FEBRUARY 2011. RJ ITA NO. 1771/M/10 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CENTRAL - I CONCERNED 5. THE DR I BENCH TRUE COPY BY ORDER ASST. REGISTRAR I.T.A.T MUMBAI ITA NO. 1771/M/10 5 DATE INITIALS 1 DRAFT DICTATED ON: 3.02.2011 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 4.02.2011 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: ______ SR. PS/PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK: ______ 9 DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER: ______