Shri Chela Ram Bheel S/o Sh. Rama Ram Bheel, JODHPUR v. ITO, JODHPUR

ITA 405/JODH/2010 | 1998-1999
Pronouncement Date: 30-09-2010 | Result: Allowed

Appeal Details

RSA Number 40523314 RSA 2010
Assessee PAN ACVPL3247M
Bench Jodhpur
Appeal Number ITA 405/JODH/2010
Duration Of Justice 3 month(s) 5 day(s)
Appellant Shri Chela Ram Bheel S/o Sh. Rama Ram Bheel, JODHPUR
Respondent ITO, JODHPUR
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 30-09-2010
Assessment Year 1998-1999
Appeal Filed On 24-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI K.G. BANSAL ACCOUNTANT MEMBER ITA NO. 403/JU/2010 ASSTT. YEAR : 1998-99 SHRI CHAMPA LAL BHEEL VS. INCOME-TAX OFFICER S/O SHRI CHAGAN LAL BHEEL WARD 3(3) JODHPUR. VILLAGE UCHIYADA DISTT. JODHPUR. (PAN ACVPL 3247 M) ITA NO. 404/JU/2010 ASSTT. YEAR : 1998-99 SHRI RATANA RAM BHEEL BHEEL VS. INCOME-TAX OFFI CER S/O SHRI PABU RAM BHEEL WARD 3(3) JODHPUR. VILLAGE UCHIYADA DISTT. JODHPUR. (PAN AJWPR 9818 G) ITA NO. 405/JU/2010 ASSTT. YEAR : 1998-99 SHRI CHELA RAM BHEEL VS. INCOME-TAX OFFICER S/O SHRI RAMA RAM BHEEL WARD 3(3) JODHPUR. VILLAGE UCHIYADA DISTT. JODHPUR. (PAN AJWPR 9818 H) ITA NO. 406/JU/2010 ASSTT. YEAR : 1998-99 SHRI MADAN LAL BHEEL VS. INCOME-TAX OFFICER S/O SHRI RAMA RAM BHEEL WARD 3(3) JODHPUR. VILLAGE UCHIYADA DISTT. JODHPUR. (PAN ACVPR 7194 H) (APPELLANTS) (RESPONDENT) APPELLANT BY : SHRI U.C. JAIN A.R. RESPONDENT BY : SHRI AMIT NIGAM D.R. 2 ORDER PER JOGINDER SINGH J.M.: THIS IS A GROUP OF FOUR APPEALS BY DIFFERENT ASSES SEES FOR THE ASSESSMENT YEAR 1998-99 AGAINST THE CONSOLIDATED OR DER OF THE LD. CIT(A) DATED 06.01.2010 ON THE GROUND THAT ON THE FACTS AN D IN THE CIRCUMSTANCES OF THE CASE THE LEARNED FIRST APPELLATE AUTHORITY GRO SSLY ERRED IN UPHOLDING THE PROVISIONS OF SECTION 153C OF THE ACT AS THE LD. A SSESSING OFFICER WRONGLY INVOKED THE PROVISIONS OF SECTION 153C OF THE ACT RATHER OUGHT TO HAVE QUASHED THE ORDER SO FRAMED U/S. 153C READ WITH SEC TION 143(3) OF THE ACT. 2. DURING THE HEARING OF THESE APPEALS WE HAVE HEA RD SHRI U.C. JAIN THE LEARNED COUNSEL FOR THE ASSESSEE AND SHRI AMIT NIGA M LEARNED DEPARTMENTAL REPRESENTATIVE. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THE IMPUGNED ISSUES ARE COVERED BY THE DECISIO N OF THE TRIBUNAL IN THE CASE OF BEEJA RAM BHEEL JODHPUR & OTHERS (ITA NOS. 487 848 850 TO 856 793 TO 796/JU/2007 ORDER DATED 27.06.2008). IT WAS FURTHER SUBMITTED THAT POWER OF ATTORNEY WAS EXECUTED BY 19 PERSONS INCLUD ING THESE ASSESSEES BY FURTHER SUBMITTING THAT OUT OF THE TOTAL 19 PERSONS THE TRIBUNAL HAS IDENTICALLY DECIDED THE CASES OF 13 PERSONS VIDE A FORESAID ORDER DATED 27.06.2008. THEREFORE THESE FOUR APPEALS ARE COVER ED BY THE AFORESAID DECISION. THIS FACTUAL MATRIX WAS FAIRLY CONSENTED BY THE LD. DR. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSIO N WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE ORDER OF SHRI BEEJA RAM BHEEL & OTHERS (DATED 27.06.2008) : 3 ALL THESE APPEALS WERE FILED BY THE ASSESSEE HAVI NG BEEN AGGRIEVED BY THE ORDERS PASSED BY THE CIT(A) JODHP UR IN THEIR RESPECTIVE APPEALS FIELD BEFORE HIM. THE ASSESSEE H AVE RAISED THE COMMON ISSUES IN ALL THESE APPEALS CHALLENGING THE INITIATION OF PROCEEDINGS U/S 153C OF I.T. ACT AGAINST THEM A S WELL AS THE MERITS OF THE ADDITIONS MADE IN THEIR RESPECTIVE AS SESSMENTS AS DETAILED HEREUNDER; 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) GROSSLY ERRED IN UPHOLDING THE PROCEEDINGS U/S 153 C OF I.T. ACT 1961 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. ASSESSING OFFICER WRONGLY INVOKED THE PROVISIONS OF SECTION 153C AND AS SUCH THE LD. CIT(A) OUGHT TO HAVE QUASHED THE O RDERS PASSED BY THE ASSESSING OFFICER US/ 153C READ WITH SEC. 143(3) OF I.T. ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) GROSSLY ERRED IN SUSTAINING THE ADDITION MADE U/S 69C OF THE I.T. ACT IN THE ABSENCE OF ANY EVIDENCE FOUND FRO M THE SEARCHED PERSON SHOWING SUCH INVESTMENT BY THE ASS ESSEE. 4. IN THE ALTERNATIVE AND WITHOUT PREJUDICE TO THE ABOVE GROUNDS THAT NO FINDING WAS GIVEN IN THE ASSESSMENT ORDER OF THE SEARCHED PERSON TO THE EFFECT THAT THE ASSESSEE HA S MADE ANY UNEXPLAINED INVESTMENT TO WARRANT INITIATION OF P ROCEEDINGS U/S 153C AGAINST THE ASSESSEE AND NO DOCUMENTS OR PAPERS WERE FOUND FROM THE SEARCHED PERSON SHOWING INVEST MENTS MADE BY THE ASSESSEE. 5 CHALLENGING THE UPHOLDING OF LEVY OF INTEREST U/ S 234A AND 234B OF THE I.T. ACT. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES R AISED BY THE ASSESSEE AND THEIR LEGAL IMPLICATIONS. 4 1. THE LEARNED AR HAS VEHEMENTLY ARGUED THE LEGAL A SPECT INVOLVE DIN THE 1 ST TWO ISSUES CONTENDING INTER ALIA THAT THE PROVISIONS CONTAINED IN SEC. 153C OF THE IT ACT CLE ARLY AND CATEGORICALLY MANDATES THAT THE ASSESSING OFFICER O F THE SEARCHED PERSON MUST SEND THE DOCUMENTS OR ASSETS OR OTHER M ATERIAL FOUND TO HAVE BEEN BELONGING TO ANY OTHER PERSONS T HAN SEARCHED PERSON TO THE ASSESSING OFFICER OF SUCH O THER PERSON TO PROCEED AGAINST THE OTHER PERSON AS PER LAW. UNDISP UTEDLY IN THE PRESENT CASES ON HAND THE ASSESSING OFFICER OF THE SEARCHED PERSON HAS NOT ONLY RECORDED ANY FINDING IN THE ORD ER PASSED AGAINST THE SEARCHED PERSON BUT ALSO AHS NOT SENT T HE DOCUMENTS ALLEGED TO HAVE BEEN BELONGING TO THE ASSESSEE BUT FOUND IN THE SEARCH OF THE SEARCHED PERSON. THEREFORE THE INITIA TION OF THE PROCEEDINGS AGAINST THE ASSESSEE U/S 153C IS VOID A B INITIO. IN SUPPORT OF HIS CONTENTION HE RELIED ON THE FOLLOWIN G CITATIONS; 1. LOONAWAT JAYANT MANIKLA VS. DCIT REPORTED IN 297 IT R 155 (AT). 2. PRANSUKHLAL & SONS JEWLLERS VS. ACIT REPORTED IN 11 6 TTJ 197 (MUM) 3. MANISH MAHESHWARI VS. ACIT & ANOTHER REPORTED IN 289 ITR 341 (SC). HE ALSO RELIED ON THE CIRCULAR ISSUED BY THE CBDT I N CIRCULAR NO. 3 OF 2006 DT. 27.2.2006 AND REPORTED IN 282 ITR 222 (STAT). 2 THEREFORE HE HAS ADVERTED TO THE MERITS OF THE AD DITIONS MADE IN THE ASSESSMENT OF THE ASSESSEE CONTENDING I NTER ALIA THAT THE ASSESSING OFFICER HAS NOT PROPERLY APPRECI ATED THE CASE OF THE ASSESSEE WITH REFERENCE TO THE CLAIMS MADE I N THE RETURNS FILED BY THEM AND THE BASIS OF THE CLAIMS ITSELF. H E SIMPLY RELIED ON THE MENTIONING OF THE AMOUNT INVESTED AS PER THE AFFIDAVITS FILED BY THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS OF THE SEARCHED PERSON WITHOUT ADVERTING TO THE SPECIFIC M ENTION MADE IN THE SALE DEEDS UNDER WHICH THE ASSESSEE HAVE PUR CHASED THE LAND WHICH CLEARLY AND CATEGORICALLY STATES THAT TH E MAJOR PART OF THE CONSIDERATION WAS PAID EARLIER TO THE EXECUTION OF THE SALE- DEEDS AND A MEGRE PART OF IT ONLY PAID AT THE TIME OF EXECUTION OF THE SALE-DEEDS. IF THIS ASPECT OF THE MATTER WAS LOOKED INTO BY THE ASSESSING OFFICER THE IMPUGNED ADDITIONS WILL N OT BE MADE. THUS EITHER UNDER LAW OR ON THE FACTS OF THE CASE T HE ORDERS 5 PASSED BY THE ASSESSING OFFICERS AS UPHELD BY THE C IT(A) ARE UNSUSTAINABLE FOR LEGAL SCRUTINY AND HENCE ARE LIAB LE TO BE CANCELLED BY ALLOWING THE APPEALS OF THE ASSESSEE. 3. CONTRARY TO THIS THE LD. DR HAS VEHEMENTLY CONTE NDED THAT THE DEPARTMENTAL AUTHORITIES HAVE STRICTLY COM PLIED WITH THE PROVISIONS OF THE IT ACT. IN EVIDENCE THEREOF HE HA S FILED THE COPIES OF THE SATISFACTION RECORDED BY THE ASSESSIN G OFFICER OF THE SEARCHED PERSON IN THE ASSESSMENT FOLDER AND AL SO THE LETTER ADDRESSED BY HIM TO THE CONCERNED JCIT IN WHOSE JUR ISDICTION THE ASSESSEE ARE RESIDING AS HE CAN NOT DIRECTLY DI RECT THE CONCERNED ASSESSING OFFICER TO PROCEED AGAINST THE ASSESSEE AS PER SEC. 153C OF THE IT ACT ENCLOSING THERETO THE COPIES OF THE POWER OF ATTORNEY EXECUTED BY THE ASSESSEE IN FAVOU R OF THE SEARCHED PERSON S WELL AS THE COPIES OF THE AFFIDAV ITS FILED BY THE ASSESSEE HEREIN IN THE ASSESSMENT PROCEEDINGS O F THE SEARCHED PERSON. IN THIS VIEW OF THE MATTER THERE IS VERY MUCH COMPLIANCE OF THE PROVISIONS OF SEC. 153C OF THE IT ACT. THEREFORE THE PROCEEDINGS U/S 153C WERE VERY MUCH V ALID AND REQUIRED TO BE UPHELD. 4. ADVERTING TO THE MERIT OF THE ADDITIONS MADE BY THE ASSESSING OFFICER HE CONTENDED THAT THE ASSESSEE H AVE NOT PROVED THEIR CLAIMS MADE ON THEIR RETURNS BY PRODUC ING COGENT EVIDENCE IN SUPPORT THEREOF. HENCE THE ADDITIONS AR E VERY MUCH JUSTIFIED AND REQUIRED TO BE UPHELD. THUS CONTENDIN G HE SOUGHT FOR DISMISSAL OF THE APPEALS OF THE ASSESSEE BY UPH OLDING THE ORDERS PASSED BY THE DEPARTMENTAL AUTHORITIES. HE F URTHER POINTED OUT THAT THE AUTHORITIES RELIED ON BY THE L D. AR ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CA SE AS THEY WERE RENDERED UNDER ENTIRELY DIFFERENT FACTS AND CI RCUMSTANCES. 5. ON CAREFUL ANALYSIS OF THE MATERIAL MADE AVAILAB LE BEFORE US IN THE LIGHT OF THE RIVAL SUBMISSIONS AS WELL AS THE ORDERS PASSED BY THE DEPARTMENTAL AUTHORITIES AND THE RELE VANT PROVISIONS OF LAW AND VARIOUS JUDICIAL PRONOUNCEMEN TS RELIED ON BY BOTH THE PARTIES WE FIND THAT IN THE ASSESSME NT ORDER PASSED IN THE CASE OF SEARCHED PERSON THERE IS NO S ATISFACTION RECORDED TO THE EFFECT THAT THE DOCUMENT FOUND IN T HE COURSE OF SEARCH OF THE SEARCHED PERSON IS BELONGING TO AND R ELATED TO THE 6 ASSESSEE AND THE SAME WAS NOT SENT TO ASSESSING OFF ICERS HAVING JURISDICTION OVER THE ASSESSEE BUT THEY WERE ROUTE D THROUGH THE CONCERNED JCITS. AS CAN BE SEEN FROM THE COPIES OF THE LETTERS PRODUCED BEFORE US. THAT TOO ORIGINALS WERE NOT SE NT BUT ONLY COPIES WERE SENT. IN THE LIGHT OF THE LANGUAGE USED IN THE PROVISION CONTAINED IN SEC. 153C OF THE IT ACT. WH ICH IS AKIN TO THE PROVISIONS CONTAINED IN SEC. 158BD OF THE A CT. EXCEPT THE EXPRESSION ANY UNDISCLOSED INCOME BELONGING TO ANY PERSON AND WHICH WAS INTERPRETED BY THE HONOURABLE APEX COURT IN THE CASE OF MANISH MAHESHWARI (SUPRA) AND RELIED ON BY THE LD. AR WE FIND THAT THE FOLLOWING CONDITIONS ARE NECESSARY TO SHOW THE COMPLIANCE OF THE PROVISIONS OF SEC. 153C OF THE IT ACT; 1. WHERE THE ASSESSING OFFICER IS SATISFIED THAT AN Y MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG S OR BELONG TO A PERSON OTHER THAN SEARCHED. 2. THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZ ED OR REQUISITIONED ARE HANDED OVER TO THE ASSESSING OFFI CER HAVING JURISDICTION OVER SUCH OTHER PERSONS. 3. THE ASSESSING OFFICER WILL ACQUIRE JURISDICTION AFTER THE RECEIPT OF THE SEIZED MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS. THE HONURABLE SUPREME COURT HAS HELD IN THE CASE OF MANISH MAHESHWARI THAT THE CONDITIONS PRECEDENT FOR MAKIN G BLOCK ASSESSMENT ARE MANDATORY AND SHOULD BE SATISFIED. S INCE THE LANGUAGE USED IN THE BLOCK ASSESSMENT PROVISIONS AR E AKIN TO THE PROVISIONS CONTAINED IN SEC 153A 153B AND 153C RESPECTFULLY FOLLOWING THE DICTUM OF THE HONOURABLE APEX COURT WHICH HAS FURTHER HELD THAT FAILURE TO RECORD SATISFACTION THAT SUCH PERSON OTHER THAN SEARCHED PERSON HAS UND ISCLOSED INCOME AND TO TRANSMIT THE MATERIAL FOUND DURING TH E SEARCH BUT BELIEVED TO BE BELONGING TO THE PERSON OTHER THAN S EARCHED TO THE OFFICER HAVING JURISDICTION ON THE EPSON OTHER THAN SEARCHED WILL INVALIDATE THE ASSESSMENT OF THE PERSON OTHER THAN SEARCHED. IN ALL THESE CASES THE ASSESSING OFFICER OF THE SEA RCHED PERSON (KARAN SINGH) HANDED OVER THE ZEROX COPY OF THE ZER OX COPY SEIZED FROM KARAN SINGH AND WROTE A LETTER TO JCIT CIRCLE-3 JODHPUR TO TAKE ACTION U/S 153C AND ACCORDINGLY THE 7 PROCEEDINGS U/S 153C WERE INITIATED AGAINST THE ASS ESSEE. THEREFORE THIS IS NOT AMOUNTED TO BE A VALID ACTIO N IF EXAMINED IN THE LIGHT OF THE PROVISIONS CONCERNED. ACCORDING LY WE ARE OF THE CONSIDERED VIEW THAT THERE IS NO COMPLIANCE OF THE PROVISION CONTAINED IN SEC. 153C OF THE IT ACT AS THE DOCUME NT SEIZED FROM THE SEARCHED PERSON IS ONLY POWER OF ATTORNEY EXECUTED BY THE ASSESSEE HEREIN WITH A RIDER THAT THEY RESER VED THE RIGHT TO REVOKE THE SAME AT THEIR WISH AT ANY FUTURE TIME AN D IT DOES NOT BELONG TO THE ASSESSEE ENABLING THE INITIATION OF P ROCEEDINGS U/S 153C OF THE IT ACT. ON THE OTHER HAND IT EXCLUSIVE LY BELONGS TO THE SEARCHED PERSON AS IT IS ENABLING HIM TO ACT ON BEHALF OF THE ASSESSEE HEREIN WHO HAVE ATTORNED RIGHTS SPECIFIED THEREIN IN FAVOUR OF THE SEARCHED PERSON. THEREFORE WE ARE OF THE CONSIDERED VIEW THAT THE INITIATION OF THE PROCEEDI NGS U/S 153C AGAINST THE ASSESSEE HEREIN ARE NOT SUSTAINABLE FOR LEGAL SCRUTINY AND HENCE THE SAID PROCEEDINGS ARE HEREBY QUASHED. 6. NOW COMING TO THE MERITS OF THE ADDITIONS MADE I N THE ASSESSMENTS OF THE ASSESSEE WE FIND THAT THE MERITS OF THE ADDITIONS NEED NOT BE ADVERTED TO AS THEY ARE CONS EQUENT TO THE INITIATION OF THE PROCEEDINGS U/S 153C WHICH WAS Q UASHED BY US AS STATED SUPRA AS THEY WILL NOT SURVIVE DUE TO THE QUASHING OF THE PROCEEDINGS ITSELF AS WAS HELD BY THE HONOURABL E CALCUTTA HIGH COURT IN THE CASE OF RAWATMAL HARAKCHAND VS. C IT REPORTED IN 129 ITR 346 WHEREIN IT WAS HELD THAT ON CE THE INITIATION OF REASSESSMENT PROCEEDINGS IS HELD TO B E INVALID WHATEVER FOLLOWS THEREAFTER MUST ALSO NECESSARY BE INVALID. HENCE WE ARE OF THE CONSIDERED VIEW THAT THE ADDITI ONS WILL NOT SURVIVE AT ALL. 7. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE HE REBY ALLOWED. 4. IF THE TOTALITY OF FACTS AND ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL ARE KEPT IN JUXTAPOSITION WITH THE FACTS OF THE APPEALS BEFORE US THE UNCONTROVERTED FACT IS THAT THE FACTS ARE IDENTICAL IN THE PRESENT APPEALS ALSO AS THE APPEALS BEFORE US ARE OUT OF 19 PERSONS WHO EXECUTED THE POWER OF ATTORNEY. THE CRUX OF ARGUMENTS ADVANCED BY THE LD. COUNSEL IS TWO WAY. FIRSTLY THE POWER OF ATTORNEY SO FOUND CANNOT BE T HE BASIS FOR INITIATING 8 PROCEEDINGS U/S. 153C OF THE ACT AGAINST THE EXECUT ANTS OF THE POWER OF ATTORNEY AS THROUGH THIS INSTRUMENT AN AUTHORITY IS GIVEN OR CONFIRMED BY THE EXECUTANTS IN FAVOUR OF THE PERSON TO WHOM SUCH POWERS ARE DELEGATED. SECONDLY THE IMPUGNED ISSUES ARE COVERED BY THE AF ORESAID DECISION OF THE TRIBUNAL DATED 27.06.2008. THE TRIBUNAL WHILE DISPO SING OF THE BUNCH OF 13 APPEALS HAS ALREADY DISCUSSED VARIOUS DECISIONS IN CLUDING LOONAWAT JAYANT MANIKLAL VS. DCIT 297 ITR 155 (AT) PRANSUKHLAL & S ONS JEWELLERS VS. ACIT 116 TTJ 197 (MUM) ITO VS. LAKHMANI MEWALDAS 103 ITR 437 (SC) MANISH MAHESHWARI VS. ACIT & ANOTHER 289 ITR 341 (SC) AND ALSO THE CIRCULAR NO.3 OF 2006 DATED 27.02.2006 ISSUED B Y CBDT REPORTED IN 282 ITR 222 (ST). SINCE THE FACTS AND ISSUES ARE ABSOLU TELY IDENTICAL THEREFORE RESPECTFULLY FOLLOWING THE AFORESAID ORDER OF THE T RIBUNAL THESE FOUR APPEALS OF THE ASSESSEE ARE HEREBY ALLOWED. FINALLY THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE SIDES AT THE CONCLUSION OF HEARING ON 30.09.2010. SD/- SD/- (K.G. BANSAL) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH SEPTEMBER 2010 *AKS/- COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. INCOME-TAX OFFICER 4. CIT 5. D/R 6. GUARD FILE