The Ito Ward 8 3 Ahmedabad v. Shantisuri Securities Pvt Ltd Ahmedabad

In The Income Tax Appellate Tribunal B Bench Ahmedabad Before Shri Pradip Kumar Kedia Accountant Member Shri Mahavir Prasad Judicial Member Sl Nos Ita No S Assessment Year S Appeal S By Appellant Vs Respondent Appellant Respondent 1 2481 Ahd 2014 2005 06 Ito Ward 8 3 Ahmed Abad Shantisuri Securities Pvt Ltd 206 207 Shanti Comm Complex Nagar Sheth No Vando Gheekanta Ahmedabad 380 001 Pan Aaccs 6864 P 2 Co 28 4 Ahd 201 4 In Ita No 2481 Ahd 2014 2005 06 Assessee Revenue 3 2482 Ahd 2014 2006 07 Revenue Assessee 4 Co 285 Ahd 2014 In Ita No 2482 Ahd 2014 2006 07 Assessee Revenue Revenue By Shri Rajdeep Singh Sr Dr Assessee By Shri Anil Kshtriya Ar Date Of Hearing 06 12 2017 Date Of Pronouncement 21 12 2017 O R D E R Per Pradip Kumar Kedia Am The Captioned Appeals Have Been Filed At The Insta Nce Of The Revenue Relevant To Assessment Years Ays 2005 06 2006 07 Ita No 2481 2482 Ahd 2014 By Revenue Co Nos 284 285 Ahd 2014 Income Tax Officer Vs Shantisuri Securities P Ltd Asst Years 2005 06 2006 07 2 Against Separate Orders Of The Commissioner Of Inco Me Tax Appeals Xiv Ahmedabad Cit A In Short Both Dated 03 06 2014 Arising I N The Matter Of Assessment Orders Passed Under S 143 3 R W S 153 C R W S 263 Of The Income Tax Act 1961 Hereinafter Referred T O As The Act Dated 11 12 2012 13 12 2012 For Ays 2005 06 2006 07 R Espectively 2 The Assessee Has Also Filed Cross Objections In The Respective Appeals Of The Revenue Wherein The Assessee Has Cha Llenged The Validity Of Proceedings Itself In Invoking Section 153 C Of T He Act 3 As The Cross Objections Of The Assessee Seeks To Strike The Very Bais Of Assumption Of Jurisdiction Under S 153 C By Asser Ting That The Assumption Of Jurisdiction Itself Is Void Ab Initio And Thus Subsequent Assessment Proceedings Are Without Authority Of Law It Is Desirable To Adjudicate The Cross Objections Of The Assessee Fir St 4 For The Sake Of Convenience We Shall Take Up C Ross Objection Of The Assessee Relevant To Ay 2006 07 As Mentioned B Y The Assessee Which Is Reproduced Hereunder For Sake Of Convenience The Ld Cit Appeals Has Failed To Appreciate The Fa Ctual Legal Position Of The Case Thereby Erred In Rejecting T He Ground Of Validity Of Proceedings U S 153 C Of The Act By Wron Gly Relying On Sec 292 B Of The Act Ita No 2481 2482 Ahd 2014 By Revenue Co Nos 284 285 Ahd 2014 Income Tax Officer Vs Shantisuri Securities P Ltd Asst Years 2005 06 2006 07 3 5 When The Matter Was Called For Hearing The Ld Ar For The Assessee At The Outset Submitted That The Return Of Income Rel Evant To Ay 2006 07 Was Originally Filed At Rs 1 32 070 On 27 12 2006 The Assessment Was Finalized Vide Order Under S 143 3 Of The Act Date D 27 11 2008 Thereafter A Search Operation Was Carried Out In A Sian Group Of Cases On 07 02 2008 Consequently The Case Of The Assessee Was Covered Under S 153 C Of The Act In Response To Proceedings Init Iated Under S 153 C The Assessment Was Finalized Under S 153 C R W S 143 3 Of The Act Vide Order Dated 24 12 2009 Wherein The Total Income Declared By The Assessee Company Was Accepted Subsequent Thereto The Cit Concerned Set Aside The Aforesaid Assessment Order Passed Under S 153 C R W S 143 3 Of The Act In Exercise Of Power Conferred Upon Him Under S 263 Of The Act In Pursuance Of Directions Of The Order Of The Cit Und Er S 263 Of The Act A Fresh Assessment Was Passed Under S 143 3 R W S 15 3 C R W S 263 Of The Act Dated 13 12 2012 Which Is Subject Matter Of Con Troversy The Ld Ar Submitted That The Aforesaid Order Passed In Pursua Nce Of Direction Under S 263 Of The Act Was Challenged Before The Cit A W Herein The Jurisdiction Exercised Under S 153 C Of The Act Was Inter Alia Agitated It Was Inter Alia Contended Before The Cit A That No Incriminating Material Relating To The Assessee Was Found For Inv Oking Provisions Of Section 153 C Of The Act In The Case Of The Assessee Herein It Was Further Contended Before The Cit A That No Satisfaction Was Recorded By The Ita No 2481 2482 Ahd 2014 By Revenue Co Nos 284 285 Ahd 2014 Income Tax Officer Vs Shantisuri Securities P Ltd Asst Years 2005 06 2006 07 4 Assessing Officer Ao Of The Searched Party As Con Templated Under S 153 C Of The Act It Was Submitted By The Ld Ar T Hat The Cit A Did Not Pay Heed To The Aforesaid Challenge Concerning Jurisdictional Defect And Dismissed It Summarily The Ld Ar Thereafter R Eferred To The Copy Of The Inspection Report Obtained From The Ao On 18 09 2017 Pursuant To Inspection Of Record For Ays 2005 06 2006 07 The Ld Ar Pointed Out That The Ao Himself Has Admitted The Fa Ct That No Specific Name Or Other Details Of The Searched Person Was Fo Und Or Available On Record On The Basis Of Which Notice Under S 153 C Of The Dated 05 10 2009 Was Issued For Ay 2005 06 2006 07 It Was Conten Ded That The Identity Of Searched Person Itself Is Vague And Non Descript It Was Further Observed That No Information Relating To In Criminating Material Belonging To Assessee Company Seized As A Result Of Search Carried Out In The Case Of Asian Group Of Cases On 07 01 2008 Is Found Or Available In The Case Records It Was Further Admitted By The A O In The Foresaid Inspection Report That No Satisfaction Note As Requ Ired For Issuance Of Notice Under S 153 C Dated 05 10 2009 Is Available O N Record The Ld Ar Thereafter Invited Our Attention To An Application Made Under Rule 6 Of The Rti Act 2005 Dated 18 08 2017 Addressed To Cen Tral Information Officer On 21 08 2017 With Reference Thereto The Ld Ar Further Invited Our Attention To The Reply Thereof Dated 12 09 2017 Whereby An Inability Was Expressed On Availability Of Information Sought Towards Specific Name Of The Searched Person Incriminating Material Belonging To The Ita No 2481 2482 Ahd 2014 By Revenue Co Nos 284 285 Ahd 2014 Income Tax Officer Vs Shantisuri Securities P Ltd Asst Years 2005 06 2006 07 5 Assessee And Satisfaction Note Recorded By The Ao O F Searched Person Among Others The Ld Ar Thus Submitted That It Is Ostensible From Case Record Of The Ao That Even The Ao Is Not Privy To The Specific Name Of The Searched Person Which Ultimately Triggered Sect Ion 153 C Of The Act In The Hands Of The Assessee Concerning Ay 2005 06 As Well As Ay 2006 07 It Is Also Manifest That No Incriminating Mate Rial Belonging To The Assessee Was Found And Seized Which Is Belonging To The Assessee Per Se The Ao Has Failed To Discharge Its Onus For Bringin G Incriminating Material On Record The Ld Ar Thereafter Contended That No Satisfaction Note Recorded By The Ao Of Searched Person If Any Is Also Available On Record For Assumption Of Jurisdiction For Assessmen T Under S 153 C Of The Act The Ld Ar Accordingly Submitted That The Basi C Ingredients For Assumption Of Jurisdiction Itself Are Conspicuously Absent In The Present Appeals The Ld Ar Accordingly Submitted That Wi Thout Adverting On Facts Any Further The Assessment Order Passed Unde R S 153 C Itself Is Required To Be Declared Null And Void Ab Initio The Consequent Assessment Proceedings Is Thus Rendered Infructuou S The Order Passed By The Ao In Consequence Of Such Illegal Notice Und Er S 153 C Is Required To Be Quashed At The Threshold In View Of The Afore Said Facts The Ld Ar Thereafter Referred To The Decision Of The Coordina Te Bench Of Tribunal In Ita No 2483 Ahd 2014 Order Dated 21 062017 Where In Identical Set Of Facts The Issue Pertaining To Legality Proceedings Under S 153 Was Decided In Favour Of Assessee The Ld Ar Thereafte R Referred To The Ita No 2481 2482 Ahd 2014 By Revenue Co Nos 284 285 Ahd 2014 Income Tax Officer Vs Shantisuri Securities P Ltd Asst Years 2005 06 2006 07 6 Decision Of Honble Delhi High Court In The Case Of Pr Cit Vs Indus Securities Pvt Ltd Ors In Tax Appeal No 566 O Rs 2007 Order Dated 04 09 2017 And Contended That Possession Of Incrimi Nating Material Belonging To Other Person Assessee Herein Is Para Mount For Invoking Provisions Of Section 153 C Of The Act The Incrimi Nating Material Being Absent As Demonstrated The Entire Proceedings Is B Ad In Law The Ld Ar Thereafter Submitted That The Order Under S 153 C R W S 263 Has Been Passed Without Statutory Approval Of Jt Cit Under 1 53 D And Is Thus Vitiated To Support This Contention He Referred To A Decision Rendered By The Honble Bombay High Court In The Case Of Cit Vs Akil Gulamali Somji In Tax Appeal No 1416 Of 2012 And Ors Order Dated 15 01 2013 For The Proposition That In The Absence Of Prior Ap Proval Of The Competent Authority Jcit Contemplated Under S 153 D Of The A Ct The Assessment Order Passed Cannot Be Sustained The Ld Ar Accordi Ngly Urged That Either The Assessment Order Giving Rise To The Pres Ent Appeal Requires To Be Quashed In View Of The Substantive Multiple Legal I Nfirmities As Pointed Out Above 6 Per Contra The Ld Dr Relied Upon The Orders Of The Authorities Below 7 We Have Carefully Considered The Rival Submissio Ns And The Orders Of The Authorities Below Case Laws Cited And Mater Ial Placed On Record Ita No 2481 2482 Ahd 2014 By Revenue Co Nos 284 285 Ahd 2014 Income Tax Officer Vs Shantisuri Securities P Ltd Asst Years 2005 06 2006 07 7 The Predominant Question For Determination In The P Resent Appeal Is Towards Validity Of The Assessment Order Passed Und Er S 153 C R W S 143 3 Of The Act Alleging Lack Of Jurisdicti On By The Assessee 8 To Address The Issue We Take Note Of The Plea O N Behalf Of The Assessee That The Action Against The Assessee Has Been Taken Under S 153 C Of The Act On The Ground Of Some Search Initiated Asian Group Of Cases On 07 02 2008 It Is The Case Of Assessee That As Ian Group Is A Very Generic And Vague Term The Inspection Report Duly Signed By The Ao Dated 18 09 2017 Makes It Abundantly Clear That Mos T Elementary Information Towards Specific Name Of The Searched Person Itself Is Not Available On Record The Proceedings Under S 153 C Emanates From A Valid Proceedings Under S 153 A Of The Act The Ao Is Apparently Not Privy To The Details Of Searched Person The Assum Ption Of Power For A Non Descript And Unintelligible Entity Is Beyond Co Mprehension 8 1 We Also Take Note Of The Another Plea Of The Assessee As Demonstrated From The Inspection Report That No Inc Riminating Material Belonging To The Assessee Company Purportedly Seize D As A Result Of Search Carried Out In Asian Group Of Cases Was Fo Und Available On The Case Records We Find Considerable Merit In This P Lea Of The Assessee As Well Predominantly For The Reason That The Revenue Has Failed To Demonstrate Possession Of Any Incriminating Materia L Coupled With This Ita No 2481 2482 Ahd 2014 By Revenue Co Nos 284 285 Ahd 2014 Income Tax Officer Vs Shantisuri Securities P Ltd Asst Years 2005 06 2006 07 8 We Also Take Note Of The Fact That In The First Ro Und Of Proceedings Before The Ao Under S 153 C Of The Act No Reference To Inc Riminating Material Was Made And The Returned Income Filed In Pursuance Of Notice Under S 153 C Of The Act Was Fully Accepted And Assessed A S Such Which Clearly Reinforces The Allegation Of Absence Of Any Incrim Inating Material 8 2 The Ao Of Searched Person As A Jurisdiction Al Requirement Must Record His Satisfaction That Incriminating Material Found As A Result Of Search Belongs To Assessee Herein In This Regard We Take Note Of The Plea Of The Assessee That No Satisfaction Note Has Been Found Recorded By The Ao Of The Searched Person To Show That Any Money B Ullion Jewelery Or Other Valuablearticles Or Things Or Books Of Accoun Ts Or Documents Seized Etc Belongs To The Assessee Company Which Has Any Bearing On The Determination Of Total Income Of Assessee Herein It Goes Without Saying That Substantive Action Under S 153 C Is Not Permiss Ible For An Empty Cause Without Corroboration Of Incriminating Materi Al 8 3 Thus It Is Obvious That Revenue Has Gross Ly Failed To Substantiate Legal Foundation Of Action Undertaken By Invoking S 153 C And Further Failed To Controvert Any Of The Aforesaid Formidab Le Pleas Raised On Behalf Of The Assessee In Support Of Its Cross Obje Ction This Being So It Is Crystal Clear That The Prerequisites For Invokin G Jurisdiction Conferred On The Ao Under S 153 C Of The Act Are Not Satisfied And The Proceedings Ita No 2481 2482 Ahd 2014 By Revenue Co Nos 284 285 Ahd 2014 Income Tax Officer Vs Shantisuri Securities P Ltd Asst Years 2005 06 2006 07 9 Under S 153 C Is A Complete Non Starter Thus The Notice Issued Under S 153 C Of The Act Is Clearly Without Sanction Of La W And Thus Void Ab Initio The Consequent Proceedings And The Assessment Fr Amed Based On Such Illegal Notice Issued Without Authority Of Law Is Thus Null And Void Therefore The Very Edifice For Framing The Assessm Ent Order In Appeal Is Crumbled The Revenue Has Totally Failed To Satisfy Us About Regularity Of Proceedings Under S 153 C Of The Act Consequently The Orders Passed Under S 153 C Are Quashed 9 In The Result Both The Cross Objections For Ays 2005 06 2006 07 Filed By The Assessee Are Allowed Whereas Both The Appeals Of The Revenue For Ays 2005 06 2006 07 Are Dismissed This Order Pronounced In Open Court On 21 12 2017 Sd Sd Mahavir Prasad Pradip Kumar Kedia Judicial Member Accountant Member Ahmedabad Dated 21 12 2017 T C Nair Sr Ps Ita No 2481 2482 Ahd 2014 By Revenue Co Nos 284 285 Ahd 2014 Income Tax Officer Vs Shantisuri Securities P Ltd Asst Years 2005 06 2006 07 10 Copy Of The Order Forwarded To 1 0 The Appellant 2 1 0 The Respondent 3 234 5 Concerned Cit 4 5 The Cit A Xiv Ahmedabad 5 67834 34 2 Dr Itat Ahmedabad 6 89 Guard File By Order 16 True Copy Dy Asstt Registrar Itat Ahmedabad 1 Date Of Dictation 6 12 17 Dictation Pad 23 Pa Ges Attached At The End Of This Appeal File 2 Date On Which The Typed Draft Is Placed Before The Dictating Member 7 12 17 3 Other Member 4 Date On Which The Approved Draft Comes To The Sr P S P S 5 Date On Which The Fair Order Is Placed Before The D Ictating Member For Pronouncement 6 Date On Which The Fair Order Comes Back To The Sr P S P S 21 12 17 7 Date On Which The File Goes To The Bench Clerk 21 12 17 8 Date On Which The File Goes To The Head Clerk 9 The Date On Which The File Goes To The Assistant Re Gistrar For Signature On The Order 10 Date Of Despatch Of The Order