Shri Janakbhai R Patel, Surat v. The J C I T (Asstt) S R 2, Surat

ITA 2660/AHD/2002 | 1988-1989
Pronouncement Date: 08-01-2010 | Result: Allowed

Appeal Details

RSA Number 266020514 RSA 2002
Assessee PAN ACTOF1963I
Bench Ahmedabad
Appeal Number ITA 2660/AHD/2002
Duration Of Justice 7 year(s) 4 month(s) 19 day(s)
Appellant Shri Janakbhai R Patel, Surat
Respondent The J C I T (Asstt) S R 2, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 08-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 13-07-2007
Date Of Final Hearing 10-07-2009
Next Hearing Date 10-07-2009
Assessment Year 1988-1989
Appeal Filed On 19-08-2002
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL: AHMEDABAD BEN CHES C BENCH: AHMEDABAD (BEFORE S/SHRI MAHAVIR SINGH JM AND A N PAHUJA AM ) ITA NO. 2660/AHD/2002 A Y: 1988-89 SHRI JANAKBHAI R. PATEL L/H OF LATE SHRI RAMJIBHAI SHIVHIBHAI PATEL 802 ARTH APARTMENT PARSHWANAGAR COMPLEX-II ABOVE RAYMOND SHOW ROOM. SANGRAMPURA SURAT [PA N: PT 6982] VS THE J. C. I. T. SPECIAL RANGE-2 OPP. NEW CIVIL HOSPITAL MAJURA GATE SURAT APPELLANT RESPONDENT ASSESSEE BY SHRI R. N. VEPARI AR REVENUE BY SHRI SAMIR VAKIL DR ORDER A N PAHUJA: THIS APPEAL BY THE ASSESSEE AGAINST AN ORDER DAT ED 6-10-2000 OF THE LEARNED CIT(A)-II SURAT RAISES T HE FOLLOWING GROUNDS: (I) REOPENING U/S. 147 OF THE ACT:- (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING REOPENING OF ASSESSMENT U/S. 147 OF THE ACT WHEN CONDITIONS REQUIRED FOR SUCH REOPENING WERE NOT SAT ISFIED. (2) THE REOPENING IS ALSO BAD IN LAW BECAUSE NOTICE FOR REOPENING WAS NOT SERVED ON ANY LEGAL HEIR OF THE D ECEASED SHRI RAMJIBHAI. (3) THE REOPENING OF ASSESSMENT HAVING BEEN DONE WR ONGLY THE ASSESSMENT IS REQUIRED TO BE CANCELLED. (II) RECEIPT OF AWARD MONEY : (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING ADDITION OF RS.47 82 943/- AS SHARE OF A PPELLANT IN AWARD GRANTED WHEN THE AMOUNT WAS CAPITAL IN NATURE. (2) ON THE FACTS AND IN THE CIRCUMSTANCES THE ADDI TION IS REQUIRED TO BE DELETED. (III) GENERAL: - (1) THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) ERRED IN CONFIRMING THE CHARGE OF INTEREST U/S. 215 OF THE A CT. ITA NO.2660/AHD/2002 LATE SHRI RAMJIBHAI SHIVJIBHAI PATEL L/H J. R. PATEL 2 (2) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING THE CHARGE OF INTEREST U/S. 139(8) OF TH E ACT. (3) THE APPELLANT CRAVES LEAVE TO ADD ALTER OR VAR Y ANY OF THE GROUNDS OF APPEAL. 2. AT THE OUTSET WE NOTICE THAT THE IMPUGNED ORDER IS STATED TO HAVE BEEN RECEIVED BY THE ASSESSEE ON 15-11-2000 WHILE THE AS SESSEE FILED THIS APPEAL ONLY ON 19-8-2002. THUS APPEAL IS LATE BY ONE YEAR AND 218 DAYS. IN THEIR CONDONATION APPLICATION FILED ON 10-10-2008 THE A SSESSEE WHILE SUBMITTING THAT APPEAL IS DELAYED BY 1 YEAR 5 MONTHS AND 5 DAYS ME NTIONED IN HIS AFFIDAVIT DATED 8-10-2008 THAT HIS FATHER LATE RAMJIBHAI SHIV JIBHAI PATEL CARRYING ON BUSINESS IN PARTNERSHIP IN LIMITED COMPANY ALONG WI TH HIS COUSINS AND BROTHER EXPIRED ON 24-1-1996. WITH EFFECT FROM 1-9-1997 AS PER FAMILY ARRANGEMENT FAMILY OF HIS FATHER SEPARATED FROM THE BUSINESS. T HE DISPUTES IN THE FAMILY WERE FINALLY SETTLED ON 21-10-2002 UNDER A COMPROMISE AG REEMENT. SINCE THE BUSINESS PREMISES OF THE ASSESSEE WAS SITUATED AT 202 NIRMAN BHAVAN MAJURA GATE SURAT THE IMPUGNED ORDER OF THE LEARNED CIT(A) WAS SERVED IN THAT PREMISES AND HAD BEEN RECEIVED BY HIS COUSIN. SINCE THE IMPUGNED ORDER WAS NOT SERVED ON THE ASSESSEE AND IT WAS ONLY AFTER THE ASSESSEE CAM E TO KNOW FROM THE ORDER OF THE LEARNED CIT(A) SOMETIMES IN AUGUST 2002 THAT T HIS APPEAL WAS FILED. SUBSEQUENTLY WHILE SUBMITTING A REVISED FROM NO. 3 6 ON 27.1.2009 AN AFFIDAVIT DATED 14-11-2008 OF SHRI S. LAKHANI COUSIN OF THE ASSESSEE WAS ALSO FILED WHEREIN AVERMENTS MADE IN THE AFFIDAVIT BY THE ASSE SSEE WERE AFFIRMED. IN THE LIGHT OF THE AVERMENTS MADE IN THE TWO AFFIDAVITS THE ASSESSEE PLEADED THAT THE DELAY IN FILING THE APPEAL MAY BE CONDONED. THE LEA RNED DR DID NOT OPPOSE THE AVERMENTS MADE IN THE TWO AFFIDAVITS. 3. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS ALSO REASONS ADDUCED IN THE TWO AFFI DAVITS. IN THIS CASE UNDISPUTEDLY THE APPEAL IS DELAYED BY MORE THAN ONE AND A HALF YEAR ON THE GROUND THAT THE IMPUGNED ORDER WAS RECEIVED BY THE ITA NO.2660/AHD/2002 LATE SHRI RAMJIBHAI SHIVJIBHAI PATEL L/H J. R. PATEL 3 COUSIN OF THE ASSESSEE AND HAD NOT BEEN SERVED UPON HIM. THE ISSUE BEFORE US IS AS TO WHETHER OR NOT THERE WAS S UFFICIENT CAUSE FOR DELAY IN FILING THE APPEAL. IN THE CASE OF STATE OF WEST BENGAL VS. ADMINISTRATOR HOWRAH MUNICIPALITY AIR 1972 SC 749 THE HON'BLE SUPREME COURT WHILE CONSIDERING THE SCOPE OF EXPRES SION 'SUFFICIENT CAUSE' FOR CONDONATION OF DELAY HAVE HELD THAT THE SAID EXPRESSION SHOULD RECEIVE A LIBERAL CONSTRUCTION SO AS TO ADVA NCE THE SUBSTANTIAL JUSTICE WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONA FIDE IS IMPUTABLE TO THE PARTY. IN THE CASE OF VEDA BAI ALIAS VAIJAYANTABAI BABULAO PATIL VS. SHANTARAM BABURAO P ATIL & ORS. IT WAS HELD BY THE HONBLE APEX COURT THAT WHILE EXERC ISING DISCRETION UNDER S. 5 OF THE LIMITATION ACT 1963 TO CONDONE DELAY FOR SUFFICIENT CAUSE IN NOT FILING THE APPEAL WITHIN TH E PERIOD PRESCRIBED COURTS SHOULD ADOPT A PRAGMATIC APPROACH. IN THE F ACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE OPINION TH AT THE REASONS GIVEN IN THE AFFIDAVIT BY THE ASSESSEE REFLECT S UFFICIENT CAUSE FOR CONDONATION OF DELAY. IT HAS BEEN CONSISTENTLY HELD BY THE HONBLE APEX COURT THAT IN THE MATTER OF CONDONATION OF DEL AY A LIBERAL AND PRAGMATIC VIEW SHOULD BE TAKEN. THE REASONS GIVEN B Y THE ASSESSEE FOR THE DELAY APPEAR TO BE SUFFICIENT CAUSE AND AC CORDINGLY THE DELAY IS LIABLE TO BE CONDONED. THE LAW OF LIMITATI ON IS ENSHRINED IN THE MAXIM INTEREST REIPUBLICAE UT SIT FINIS LITIUM (IT IS FOR THE GENERAL WELFARE THAT A PERIOD BE PUT TO LITIGATION). RULES OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHTS OF THE PARTIES RATHER THE IDEA IS THAT EVERY LEGAL REMEDY MUST BE KEPT ALIVE FOR A LEGISLA TIVELY FIXED PERIOD OF TIME. IN THE CASE OF COLLECTOR LAND ACQUISITION V. MST. KATIJI REPORTED IN [1987] 167 ITR 471 HON'BLE SUPREME COURT HELD AS FOLLOWS: 'THE LEGISLATURE HAS CONFERRED THE POWER TO CONDONE DELAY BY ENACTING SECTION 5 OF THE LIMITATION ACT OF 1963 IN ORDER TO ENABLE TH E COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON 'MERITS'. THE EXPRESSION 'SUFFICIENT CAUSE' ITA NO.2660/AHD/2002 LATE SHRI RAMJIBHAI SHIVJIBHAI PATEL L/H J. R. PATEL 4 EMPLOYED BY THE LEGISLATURE IS ADEQUATELY ELASTIC T O ENABLE THE COURTS TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTICE-THAT BEING THE LIFE-PURPOSE OF THE EXISTENCE OF THE INSTITUTIO N OF COURTS. IT IS COMMON KNOWLEDGE THAT THIS COURT HAS BEEN MAKING A JUSTIFI ABLY LIBERAL APPROACH IN MATTERS INSTITUTED IN THIS COURT. BUT THE MESSAGE D OES NOT APPEAR TO HAVE PERCOLATED DOWN TO ALL THE OTHER COURTS IN THE HIER ARCHY. AND SUCH A LIBERAL APPROACH IS ADOPTED ON PRINCIPLE AS IT IS REALIZED THAT: 1. ORDINARILY A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2. REFUSING TO CONDONE DELAY CAN RESULT IN A MERITO RIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DE FEATED. AS AGAINST THIS WHEN DELAY IS CONDONED THE HIGHEST THAT CAN HAPPEN IS T HAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT M EAN THAT A PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY EVERY S ECOND'S DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL COMMONSENSE AND PRAG MATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERA TIONS ARE PITTED AGAINST EACH OTHER THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEIN G DONE BECAUSE OF A NON- DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY OR ON ACCOUNT OF CULPABLE NEGLIGENCE OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOES NOT STAND TO BENEFIT BY RESORTING TO DELAY. IN FACT HE RUNS A S ERIOUS RISK. 6. IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECT ED NOT ON ACCOUNT OF ITS POWER TO LEGALISE INJUSTICE ON TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO.' 3.1 IN N. BALAKRISHNAN V. M. KRISHNAMURTHY REPO RTED IN [1998] 7 SCC 123 THE HONBLE APEX COURT EXPLAINED THE SCOPE OF LIMITATIO N AND CONDONATION OF DELAY OBSERVING AS UNDER (HEADNOTE): 'THE PRIMARY FUNCTION OF A COURT IS TO ADJUDICATE T HE DISPUTE BETWEEN THE PARTIES AND TO ADVANCE SUBSTANTIAL JUSTICE. THE TIME-LIMIT FIXED FOR APPROACHING THE COURT IN DIFFERENT SITUATIONS IS NOT BECAUSE ON THE EXPIR Y OF SUCH TIME A BAD CAUSE WOULD TRANSFORM INTO A GOOD CAUSE. RULES OF LIMITAT ION ARE NOT MEANT TO DESTROY THE RIGHTS OF PARTIES. THEY ARE MEANT TO SEE THAT P ARTIES DO NOT RESORT TO DILATORY TACTICS BUT SEEK THEIR REMEDY PROMPTLY. THE OBJECT OF PROVIDING A LEGAL REMEDY IS TO REPAIR THE DAMAGE CAUSED BY REASON OF LEGAL INJU RY. THE LAW OF LIMITATION FIXES ITA NO.2660/AHD/2002 LATE SHRI RAMJIBHAI SHIVJIBHAI PATEL L/H J. R. PATEL 5 A LIFESPAN FOR SUCH LEGAL REMEDY FOR THE REDRESS OF THE LEGAL INJURY SO SUFFERED. THE LAW OF LIMITATION IS THUS FOUNDED ON PUBLIC POL ICY.' 3.2 IN SHANKARRAO V. CHANDRASENKUNWAR REPORTE D IN [1987] SUPP SCC 338 THE HONBLE SUPREME COURT TOOK THE VIEW THAT THE CO URT SHOULD NOT ADOPT AN INJUSTICE-ORIENTED APPROACH IN REJECTING THE APPLIC ATION FOR CONDONATION OF DELAY. IN O.P. KATHPALIA V. LAKHMIR SINGH REPORTED IN AIR 1984 SC 1744 THE HON'BLE SUPREME COURT HELD THAT IF THE REFUSAL TO CONDONE T HE DELAY RESULTS IN GRAVE MISCARRIAGE OF JUSTICE IT WOULD BE A GROUND TO CON DONE THE DELAY. IN STATE OF HARYANA V. CHANDRA MANI REPORTED IN AIR 1996 SC 162 3 HON'BLE SUPREME COURT CONSIDERED A LARGE NUMBER OF ITS EARLIER JUDG MENTS INCLUDING BINOD BIHARI SINGH V. UNION OF INDIA REPORTED IN [1993] 1 SCC 57 2 SHAKAMBARI AND CO. V. UNION OF INDIA REPORTED IN [1993] SUPPL 1 SCC 487 WARLU V. GANGOTRIBAI REPORTED IN [1995] SUPPL 1 SCC 37 RAMLAL V. REWA COALFIELDS LTD. REPORTED IN AIR 1962 SC 361 CONCORD OF INDIA INSURANCE CO. LTD. V. SMT. NIRMALA DEVI [1979] 118 ITR 507 ; AIR 1979 SC 1666; [1979] 49 COMP CAS 463 MATA DI N V. A. NARAYANAN AIR 1970 SC 1953 AND HELD THAT EXPRESSION 'EACH DA Y'S DELAY MUST BE EXPLAINED' DOES NOT MEAN THAT A PEDANTIC APPROACH SHOULD BE MADE AND IT MUST BE APPLIED IN A RATIONAL COMMONSENSE PRAGMATIC MANN ER. 4. IN VIEW OF THE FOREGOING AND ESPECIALLY IN THE LIGHT OF OBSERVATIONS OF THE HONBLE APEX COURT IN O.P. KATHPALIA V. LAKHMIR SIN GH REPORTED IN AIR 1984 SC 1744 THAT IF THE REFUSAL TO CONDONE THE DELAY RES ULTS IN GRAVE MISCARRIAGE OF JUSTICE IT WOULD BE A GROUND TO CONDONE THE DELAY WE ARE OF THE OPINION THAT THE REASONS GIVEN BY THE ASSESSEE FOR THE DELAY IN FILI NG THE APPEAL REFLECT SUFFICIENT CAUSE AND ACCORDINGLY THE DELAY IS CONDONED. . 5. ADVERTING NOW TO THE FIRST GROUND OF THE APPEAL RELATING TO VALIDITY OF REOPENING OF ASSESSMENT U/S 147 OF THE ACT FACTS IN BRIEF AS PER RELEVANT ORDERS ARE THAT THE ASSESSEE WAS A PARTNER IN M/S. BHARAT VIJAY CONSTRUCTION ALONG WITH THREE OTHER PARTNERS. M/S. BHARAT VIJAY CONSTRUCTIO N WAS ENGAGED IN THE BUSINESS ITA NO.2660/AHD/2002 LATE SHRI RAMJIBHAI SHIVJIBHAI PATEL L/H J. R. PATEL 6 OF CONSTRUCTION. SUBSEQUENTLY A PRIVATE LIMITED CO MPANY IN THE NAME OF M/S. BHARAT VIJAY CONSTRUCTION CO. PVT. LTD. WAS FORMED AND TRANSFER DEED WAS EXECUTED BETWEEN THE FIRM AND THE COMPANY ON 5-11-1 988 WHEREUNDER ALL THE ASSETS AND LIABILITIES OF THE FIRM WERE TAKEN OVER BY THE COMPANY. HOWEVER THE RIGHTS AND INTEREST FOR PENDING CLAIMS IN CONNECTIO N WITH ALREADY EXECUTED CONTRACTS WERE NOT TRANSFERRED TO THE COMPANY AND W ERE TAKEN OVER BY THE PARTNERS ON DISSOLUTION OF THE FIRM. MEANWHILE WIT H EFFECT FROM 5-11-1981 TILL 24.10.1984 NO BUSINESS WAS CARRIED OUT BY THE FIRM . DURING THIS PERIOD CONSTRUCTION WORK OF DAMAN GANGA PROJECT WAS COMPLE TED ON 22-3-1983 AND THE FIRM SUBMITTED ITS FINAL BILL TO THE CONCERNED EXEC UTIVE ENGINEER. FURTHER CLAIM WAS ALSO MADE IN RESPECT OF PRICE ESCALATION AND EX TRA ITEMS IN ACCORDANCE WITH THE TERMS & CONDITIONS OF THE CONTRACT. DUE TO SOME DISPUTE THE MATTER WAS REFERRED BY THE GOVERNMENT OF GUJARAT TO ARBITRATOR WHO AWARDED AN AMOUNT OF RS. 1 91 31 690/- IN FAVOUR OF THE CONTRACTOR VIDE AWARD DATED 6-11-1986. MEANWHILE THE ASSESSEE AND THE OTHER 3 PARTNERS OF THE DISSOLVED FIRM MADE AN APPLICATION BEFORE THE COURT SEEKING EQUAL SHARE IN THE AFORESAID AMOUNT OF AWARD. IN ACCORDANCE WITH THE ORDER OF THE COURT P AYMENT OF RS.47 82 922.50 EACH WAS MADE ON 21-4-1987 TO ALL THE 4 PARTNERS IN CLUDING THE ASSESSEE. THE CHEQUE DATED 21-4-1987 RECEIVED BY THE ASSESSEE WAS DEPOSITED IN HIS SAVINGS BANK ACCOUNT ON 22-4-1987. THE AFORESAID FIRM DID N OT FILE ANY RETURN DISCLOSING THE AFORESAID AMOUNT OF AWARD WHILE THE ASSESSEE AL SO DID NOT INCLUDE THE AFORESAID AMOUNT OF RS.47 82 922.50 IN HIS RETURN OF INCOME FILED ON 24-5-1989 IN RESPONSE TO A NOTICE U/S 139(2) OF THE ACT. IN A NOTE ENCLOSED WITH THE RETURN IT WAS STATED AS UNDER: IN PURSUANCE OF ARBITRATION AWARD IN CONNECTION WI TH THE CLAIM OF M/S. BHARAT VIJAY CONSTRUCTION CO. (THE BUSINESS OF WHIC H HAS BEEN TAKEN OVER AND CONTINUED BY A PRIVATE LIMITED COMPANY) THE AS SESSEE AS A ERSTWHILE PARTNER OF THE SAID FIRM RECEIVED THE SUM DURING TH E YEAR. SINCE THIS AMOUNT REPRESENTS COLLECTION BY THE ASSESSEE OF A R IGHT IT IS NOT LIABLE TO TAX AND HENCE NOT INCLUDED IN THE RETURN OF TAXABLE INCOME. FURTHER ALSO AS THE ASSESSEE IS NOT CARRYING ANY BUSINESS THE QUES TION OF CONSIDERING THIS AMOUNT AS BUSINESS INCOME DOES NOT ARISE AND HENCE NOT INCLUDED IN THE RETURN OF TAXABLE INCOME. ITA NO.2660/AHD/2002 LATE SHRI RAMJIBHAI SHIVJIBHAI PATEL L/H J. R. PATEL 7 5.1 SINCE THE AWARD MONEY WAS NEITHER DISCLOSED BY THE FIRM NOR BY THE PARTNERS IN THEIR RETURNS OF INCOME THE AO ISSUED A NOTICE U/S 148 OF THE ACT IN THE LIGHT OF THE DECISION OF THE HONBLE GUJARAT HI GH COURT IN THE CASE OF BANYAN & BERRY REPORTED IN 222 ITR 831. AS REGARDS SERVIC E OF NOTICE DATED 26-3-1999 U/S 148 OF THE ACT THE LEARNED AR ON BEHALF OF TH E ASSESSEE INFORMED THE AO THAT THE ASSESSEE HAVING DIED IN JANUARY 1996 THE NOTICE SHOULD BE SERVED UPON THE LEGAL HEIRS. ACCORDINGLY A LETTER DATED 31.12. 1999 REPRODUCED IN THE ASSESSMENT ORDER WAS ADDRESSED TO SHRI R.N. VEPARI CHARTERED ACCOUNTANT MENTIONING INTER ALIA THAT THE AO WAS NOT INFORMED ABOUT DEMISE OF THE ASSESSEE SHRI RAMJIBHAI S. PATEL. IN THE SAID LETTE R THE AO REQUIRED THE ASSESSEE TO FURNISH COPY OF THE DEATH CERTIFICATE NAME AND ADDRESS OF THE LEGAL HEIRS BESIDES CERTAIN OTHER DETAILS. IN RESPONSE TO THE AFORESAID LETTER THE ASSESSEE VIDE LETTER DATED 10-1-2000 COMMUNICATED T O THE AO THAT A NOTICE U/S 148 IN THE NAME OF RAMJIBHAI S. PATEL WAS ISSUED BY ITO-WARD 2(3) SURAT AND THE ASSESSEE HAD RECEIVED THE SAID NOTICE. SUNSEQUE NTLY THE ASSESSEE EXPIRED IN JANUARY 1996. ACCORDINGLY THE LEARNED COUNSEL HA D WRITTEN A LETTER ON 12-4- 1997 REQUESTING THE AO TO IGNORE THE SAID NOTICE. SINCE NO SUCH NOTICE U/S 148 OF THE ACT IN THE NAME OF THE DECEASED ASSESSEE WAS AVAILABLE ON RECORDS NOR A COPY OF DEATH CERTIFICATE WAS MADE AVAILABLE TO THE AO WHILE EVEN STATEMENT OF ASSETS OR NAME AND ADDRESS OF THE LEGAL HEIRS OR E VEN A COPY OF THE ORDER OF THE APPROPRIATE COURT FOR DEVOLUTION/SUCCESSION OF THE ASSETS AND WEALTH OF LATE ASSESSEE RAMJIBHAI S PATEL THE AO ISSUED ANOTHER N OTICE IN THE NAME OF ALL THE LEGAL HEIRS OF LATE RAMJIBHAI S. PATEL ON 31-1-2000 WHEREIN INTER ALIA THE AO STATED AS UNDER: 2. WHEREAS IT HAS BEEN BROUGHT TO MY NOTICE THAT YOU HAD NOT OFFERED RS.47 82 923 FOR TAXATION DURING THE PREVIOUS YEAR RELEVANT TO A. Y. 1988- 89. THE ASSESSING OFFICER HAD REOPENED YOUR ASSESSM ENT FOR A. Y. 1988- 89 AND INSTEAD OF FILING REVISED RETURN YOU HAD CHO SEN TO CHALLENGE THE NOTICE U/S 148 ISSUED BY THE ASSESSING OFFICER BEFO RE THE HONBLE HIGH COURT. IT IS STATED THAT HONBLE GUJARAT HIGH COURT HAD QUASHED REOPENING OF THE ASSESSMENT. I. T. DEPARTMENT APPROACHED HON BLE SUPREME COURT OF INDIA AND THE APEX COURT HAD REVERSED THE ORDER OF HONBLE GUJARAT ITA NO.2660/AHD/2002 LATE SHRI RAMJIBHAI SHIVJIBHAI PATEL L/H J. R. PATEL 8 HIGH COURT. UNDER THE CIRCUMSTANCES HONBLE SUPREM E COURTS ORDER VALIDATING THE REOPENING OF ASSESSMENT HAS BECOME F INAL AND THE SAME IS BINDING ON YOU AS WELL AS ON THE I. T. DEPARTMENT. 5.2. IN RESPONSE TO THE AFORESAID NOTICE THE ASSES SEE DID NOT FILE ANY REPLY NOR SUBMITTED ANY RETURN. ACCORDINGLY ANOTHER LETTER D ATED 1-2-2000 WAS ISSUED TO ALL THE LEGAL HEIRS OF THE ASSESSEE SEEKING A COPY OF DEATH CERTIFICATE OF THE ASSESSEE AS ALSO ADDRESS OF ALL THE LEGAL HEIRS AND A COPY OF ORDER OF SUCCESSION OF THE APPROPRIATE COURT BESIDES SEEKING DETAILS VI DE LETTER DATED 31-12-1999. IN RESPONSE TO THIS NOTICE SHRI SUBHASH N SHAH CA AP PEARED ON 10-12-2000 BEFORE THE AO AND FURNISHED HIS POWER OF ATTORNEY. INTER ALIA IT WAS STATED THAT HE HAS AUTHORITY FROM ALL THE LEGAL HEIRS OF THE ASSES SEE LATE RAMJIBHAI S. PATEL TO REPRESENT THE CASE. DESPITE GIVING NUMBER OF OPPORT UNITIES THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNT OR BANK ACCOUNT. ACCORDING LY RELYING UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF BANYAN & BERRY (SUPRA) THE AO BROUGHT TO TAX THE AMOUNT OF RS.47 52 923/- ON ACCOUNT OF AWARD IN RELATION TO PAYMENT OF DAMAN GANGA PROJECT BESID ES SHARE INCOME FROM M/S. BHARAT VIJAY & CO. 6. ON APPEAL THE LEARNED CIT(A) WHILE RELYING UPON HIS OWN DECISION DATED 6.10.2000 IN THE CASE OF SHARADBHAI MADHAVJIBHAI LA KHANI DIRECTED THE AO TO DEAL WITH THE SHARE AND LIABILITY OF THE DECEASED AS PER PROVISIONS OF SECTION 159 OF THE ACT. 7. THE ASSESSEE IS NOW IN APPEAL BEFORE US A GAINST THE AFORESAID FINDINGS OF THE LEARNED CIT(A).AT THE OUTSET THE LEARNED AR ON BEHALF OF THE ASSESSEE CONTENDED THAT NOTICE U/S 148 OF THE ACT HAVING BEE N ISSUED IN THE NAME OF A DEAD PERSON AND NOT SERVED UPON THE LEGAL HEIRS TH E ENTIRE PROCEEDINGS SHOULD BE QUASHED. IN THIS CONNECTION THE LEARNED AR OF T HE ASSESSEE RELIED UPON A NUMBER OF DECISIONS IN THE CASE OF MRS. JERBANOO N. WADIA 36 ITD 185 (BOM) SAIKH ABDUL KADAR 34 ITR 451 (MP) GANGA PRAS AD JAISWAL 39 ITD 444 (ALL.) SMT. SUMITRADEVI L/H OF MELA RAM 7 ITD 811 (CHD.) E. ALFRED 32 ITR 401 ITA NO.2660/AHD/2002 LATE SHRI RAMJIBHAI SHIVJIBHAI PATEL L/H J. R. PATEL 9 (MAD.) LATE MANGILAL THROUGH BADRI PRASAD 83 TTJ 59 0 (JP.) LATE A. Y. PRABHAKAR THROUGH L/H 105 TTJ 391 (CHEN.) SUNSHINE ELECTRIC & REDIO CO. 37 TTJ 378 (DEL) LATE C. B. TARAPOREWALA BY L/H 28 TTJ 613 (BOM.) RAKESHKUMAR MUKESHKUMAR 13 DTR 209 (P &H) R. C. JAIN THROUGH L /H. 190 CTR 510 (LUCK) ANILKUMAR GOAL 115 ITD 510 (LUCK) SHRI NATH SURESH CHAND RAM NARESH 280 ITR 396 (ALL.) . SHITAL PRASAH KHARAJ PRASAD 28 0 ITR 541 (MP) PRABHAVATI GUPTA & OTHERS 231 ITR 188 (MP) JAI PRAKASH SINGH 111 ITR 507 (GAU) ISHWAR SINGH & SONS 32 ITR 401 (MAD)AND ASHOK KUMAR BADRI 198 CTR 260 (ALL.). ON THE OTHER HAND THE LD. DR SUPP ORTED THE FINDINGS OF THE LD. CIT(A) 8. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS ALSO THE DECISIONS RELIED UPON. WE FIND THAT THE LE ARNED CIT(A) IN THE IMPUGNED ORDER WITHOUT EVEN ADJUDICATING GROUND NO.1 RELA TING TO VALIDITY OF REOPENING OF ASSESSMENT AND SERVICE OF NOTICE MERELY RELIED UPO N HIS OWN DECISION IN THE CASE OF SHARADBHAI MADHAVJIBHAI LAKHANI AND DISPOS ED OF THE APPEAL. THE SAID DECISION OF THE LEARNED CIT(A) HAD BEEN FURTHER CHA LLENGED BY THE ASSESSEE WHEN THE ITAT VIDE THEIR ORDER DATED 22-7-2005 IN I TA NOS.158 TO 160/AHD /2001 UPHELD THE DECISION OF THE LEARNED CIT(A) IN THE FO LLOWING TERMS: 15. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSE D THE MATERIAL AVAILABLE ON RECORD FOR ALL APPEALS. THE F ACTS CIRCUMSTANCES CASE-LAWS ETC. HAVE BEEN GIVEN IN DETAILS AND THE O RDERS OF THE LOWER AUTHORITIES AND THE DECISIONS REGARDING REOPENING O F ASSESSMENT BY HONBLE GUJARAT HIGH COURT AND HONBLE SUPREME COUR T. AS FAR AS REOPENING OF THE ASSESSMENT IN THE HANDS OF THE PAR TNERS AND ISSUANCE OF NOTICE UNDER SECTION 148 IS CONCERNED WE ARE OF TH E VIEW THAT THE ISSUE STANDS FINALLY SETTLED BY THE HONBLE SUPREME COURT HOLDING THAT THE REASSESSMENT IS VALID IN THE CASE OF TWO PARTNERS BY REVERSING THE HIGH COURT JUDGMENT. THEREFORE THE ISSUE IS NO MORE OPE N FOR ANY ADJUDICATION BY THE TRIBUNAL. WE DO NOT AGREE WITH THE PLEA OF T HE LEARNED COUNSEL THAT ONE POINT MENTIONED ABOVE HAS NOT BEEN DECIDED BY T HE HONBLE SUPREME COURT THEREFORE THE SAME SHOULD BE ADJUDICATED. T HE HONBLE HIGH COURT CONSIDERED THESE ASPECTS AND ITS JUDGMENT HAS BEEN REVERSED BY THE HONBLE SUPREME COURT WITHOUT ANY QUALIFICATION TH EREFORE IT HAS TO BE HELD THAT THE SUPREME COURT HAS REVERSED ALL THE FI NDINGS OF THE HONBLE HIGH COURT. IT WAS FOR THE ASSESSEE TO RAISE AS MAN Y POINTS BEFORE THE ITA NO.2660/AHD/2002 LATE SHRI RAMJIBHAI SHIVJIBHAI PATEL L/H J. R. PATEL 10 SUPREME COURT AS IT LIKED. HAVING NOT DONE SO BEFO RE THE APEX COURT IT DOES NOT LIE WITH THE ASSESSEE TO RAISE ANY ISSUE FOR FURTHER ADJUDICATION MORE SO WHEN IT WAS ADMITTED BY THE LEARNED COUNSE L THAT THE REVIEW PETITION FILED BY THE ASSESSEE HAS BEEN DISMISSED B Y THE HONBLE SUPREME COURT. THEREFORE RESPECTFULLY FOLLOWING THE HONBL E SUPREME COURT JUDGMENT IT HAS TO BE HELD THAT REASSESSMENT PROCE EDINGS WERE VALIDLY INITIATED. 16. COMING TO THE CASE OF ONE OF THE PARTNERS SHR I SHAMJIBHAI SHIBJIBHAI LAKHANI HIS CASE CANNOT BE DISTINGUISHE D FROM OTHER PARTNERS THEREFORE FACTS REMAIN THE SAME. HONBLE HIGH COUR T HOLDING THAT ALL THE FACTS WERE MADE KNOWN TO THE AO AND THEREFORE NO OBJECTIVE SATISFACTION HAS BEEN DRAWN BY THE AO HAS BEEN REVISED BY THE H ONBLE SUPREME COURT. THEREFORE IT HAS TO BE HELD THAT IN THIS CA SE ALSO THAT ALL THE MATERIALS FACTS WERE NOT FULLY AND TRULY DISCLOSED THEREFORE THE RELIANCE ON FOUR YEARS PERIOD AS TIME LIMIT FOR ISSUE OF NOTIC E UNDER SECTION 148 AS PROVIDED BY PROVISO TO SECTION 147 CANNOT BE APPLIE D TO THIS PARTNER. GROUND NO.1 THEREFORE IS ALL THE CASES OF PARTNER S IS DISMISSED. 8.1 WE FURTHER NOTICE THAT ON A WRIT PETITION F ILED BY SHRI SHARADBHAI M LAKHANI VS. ITO 231 ITR 779 HONBLE GUJRAT HIGH COURT HAD QUASHED THE NOTICE U/S 148 OF THE ACT. ON APPEAL BY THE REVENUE THE SAID DECI SION HAS BEEN REVERSED IN ITO VS. SHRI SHARADBHAI M LAKHANI& ANOTHER 243 ITR 1(SC). THERE IS NOTHING TO SUGGEST AS TO WHETHER THE ISSUE OF SERVICE OF N OTICE U/S 148 OF THE ACT IN THE NAME OF THE DECEASED WAS RAISED BEFORE THE HONBLE HIGH COURT OR HONBLE APEX COURT. THE LD. AR ON BEHALF OF THE ASSESSEE HAS VE HEMENTLY ARGUED BEFORE US THAT NOTICE DATED 26.3.1999 U/S 148 OF THE ACT ISS UED IN THE NAME OF DECEASED ASSESSEE WAS NOT SERVED ON THE LEGAL HEIRS OF THE A SSESSEE AND THEREFORE THE REASSESSMENT PROCEEDINGS ARE VOID ABINITIO. THOUGH THE ASSESSEE HAD RAISED SUCH A GROUND SPECIFICALLY BEFORE THE LD. CIT(A) AN D FURTHER FILED THEIR CONTENTIONS IN THE WRITTEN SUBMISSIONS THE LD. CIT(A) WITHO UT EVEN ADJUDICATING GROUND NO.1 RELATING TO VALIDITY OF REOPENING OF ASSESSMEN T AND SERVICE OF NOTICE MERELY RELIED UPON HIS OWN DECISION IN THE CASE OF SHARA DBHAI MADHAVJIBHAI LAKHANI AND DISPOSED OF THE APPEAL . THE LD. DR APPEARING BEFORE US ALSO DID NOT THROW ANY LIGHT ON THE SERVICE OF NOTICE U/S 148 OF THE A CT ON THE LEGAL HEIRS OF THE ASSESSEE .IN THESE CIRCUMSTANCES IN THE INTEREST OF SUBSTANTIAL JUSTICE WE ITA NO.2660/AHD/2002 LATE SHRI RAMJIBHAI SHIVJIBHAI PATEL L/H J. R. PATEL 11 CONSIDER IT FAIR AND APPROPRIATE TO VACATE THE FIND INGS OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH THE DIRECTIONS TO FIRST ADJUDICATE THE ISSUE RELATING TO VALIDITY OF REOPENING OF ASSESSMENT AND SERVICE OF NOTICE U/S 148 OF THE ACT AND THEREAFTER DISPOSE OF THE OTHER ISSUES RAISED IN THE APPEAL IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. NEEDLESS TO SAY THAT WHILE REDECIDING THE APPEAL THE LEARNED CIT(A) SHA LL PASS A SPEAKING ORDER KEEPING IN MIND INTER ALIA THE MANDATE OF PROVISI ONS OF SEC. 250(6) OF THE ACT. WITH THESE DIRECTIONS GROUND NO. 1 IN THE APPEAL I S DISPOSED OF. AS A COROLLARY OTHER GROUNDS RAISED IN THE APPEALS DO NOT SURVIVE FOR ADJUDICATION AT THIS STAGE. 9. NO ADDITIONAL GROUND HAVING BEEN RAISED IN TERM S OF THE RESIDUARY GROUND NO.III(3) ACCORDINGLY THE SAID GROUND IS DISMISSED .. 10.. IN THE RESULT APPEAL IS ALLOWED BUT FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 8TH JA NUARY 2010 SD/- SD/- (MAHAVIR SINGH) (A.N. PAHUJA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE:8-1-2010 LAKSHMIKANT/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE 2. THE CONCERNED ASSESSING OFFICER 3. CIT(A)-II SURAT 4. THE CIT CONCERNED 5. THE D.R. ITAT AHMEDABAD 6. GUARD FILE BY ORDER DR / AR ITAT AHMEDABAD