ACIT, New Delhi v. M/s. Kishori Lal Chander Bhan & Co., New Delhi

ITA 4757/DEL/2009 | 2001-2002
Pronouncement Date: 16-09-2011 | Result: Dismissed

Appeal Details

RSA Number 475720114 RSA 2009
Assessee PAN AAAFK5049H
Bench Delhi
Appeal Number ITA 4757/DEL/2009
Duration Of Justice 1 year(s) 9 month(s)
Appellant ACIT, New Delhi
Respondent M/s. Kishori Lal Chander Bhan & Co., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 16-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 16-09-2011
Date Of Final Hearing 13-09-2011
Next Hearing Date 13-09-2011
Assessment Year 2001-2002
Appeal Filed On 16-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE G.E. VEERABHADRAPPA HON'BLE VICE-PRESIDENT AND SHRI RAJPAL YADAV: HONBLE JUDICIAL MEMBER ITA NO. 4757/DEL/2009 ASSESSMENT YEAR: 2001-02 ASSISTANT COMMISSIONER OF IT VS. KISHOR I LAL CHANDER BHAN & CO. CIRCLE 29(1) 4105-A NAYA BAZAR NEW DELHI. NEW DELHI. (PAN: AAAFK5049H) (APPELLANT) (RESPONDENT) APPELLANT BY: MS. Y. KAKK AR DR RESPONDENT BY: SHRI RAJ KUMAR C A ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LEARNED CIT(APPEALS) DATED 04.11.2009 PASSED FOR ASSESSMENT YEAR 2001-02. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE READ AS UNDE R: 1. IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE LEARNED CIT(APPEALS) HAS FAILED TO APPRECIATE THE RELIABLE ESTABLISHED INFORMATION IN THE FORM OF PHOTOCOPIES OF DIARIES & OTHER SEIZED MATERIAL STATEMENT OF SHRI BN GUPTA & SHRI RAM AVT AR SINGHAL AFFIDAVIT AND ASSESSMENT ORDER OF SH. B.M. GUPTA IN DEPTH ANALYSIS OF THE SEIZED MATERIAL BY THE INVEST IGATION WING AND CONSEQUENT SATISFACTION NOTE/INFORMATION AND FU RTHER CLARIFICATORY LETTER FROM DCIT CC-19 ETC. 2 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEALS) ALSO FAILED TO APPRECIATE THE FACT THA T THE ASSESSEE MERELY DENIED THE TRANSACTION BUT COULD NOT PRODUCE ANY EVIDENCE IN SUPPORT OF HIS CONTENTION AND ON THE OTHER HAND THERE IS STRONG DOCUMENTARY EVIDENCE ON RECORD KIN FAVOUR OF TRANSA CTION BETWEEN & SHRI BM GUPTA WHICH SHRI BM GUPTA NOT ONLY ADMIT TED IN HIS STATEMENT RECORDED ON OATH BUT ALSO PAID TAX ON COM MISSION EARNED ON SUCH COMMISSION. 3. IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEALS) ALSO FAILED TO APPRECIATE THAT THERE I S STRONG DOCUMENTARY EVIDENCE ON WHICH A.O. FOUND HIS REASON TO BELIEVE AND THIS REASON TO BELIEVE WAS ALSO GIVEN BY THE AS SESSEE AND ASSESSEE COULD NOT PROVIDE ANY EVIDENCE TO PROVE CO NTRA TO THE FINDINGS OF THE A.O. 4. IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(APPEALS) ALSO FAILED TO APPRECIATE THAT ADDITIO NS WERE MADE BY THE A.O. ON THE BASIS OF STRONG DOCUMENTARY EVIDENC E AFTER GIVING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD. 5. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND MODIFY ALTER ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 2. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET SUBMITTED THAT A NOTICE UNDER SEC. 148 OF THE INCOME-TAX ACT 1961 W AS ISSUED UPON THE ASSESSEE BY THE ASSESSING OFFICER. ACCORDING TO THE ASSESSING OFFICER THIS 3 NOTICE WAS ISSUED ON 9 TH MARCH 2008 THROUGH REGISTERED POST AND ALSO THROUGH NOTICE SERVER ON 27.3.2008 MEANING THEREBY THIS NOTICE WAS ISSUED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE ASSE SSMENT YEAR 2001-02. ASSESSING OFFICER IN PARAGRAPH 6 OF THE ASSESSMENT ORDER HAS OBSERVED THAT ACTION UNDER SEC. 148 WAS INITIATED AFTER TAKING AP PROVAL OF THE ADDITIONAL CIT RANGE-29 NEW DELHI. HE POINTED OUT THAT AFTER EXPIRY OF FOUR YEARS THE NOTICE UNDER SEC. 148 HAS TO BE ISSUED AFTER TA KING APPROVAL OF THE CCIT OR CIT. IN THIS CONNECTION THE APPROVAL WAS NOT T AKEN FROM THE CCIT OR FROM THE CIT. THE ASSESSEE CHALLENGED THIS ACTION O F THE ASSESSING OFFICER IN APPEAL BEFORE THE LEARNED CIT(APPEALS). LEARNED CIT (APPEALS) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE AND QUASHED THE ASSESSMENT ORDER. HE MADE REFERENCE TO THE FINDINGS OF THE LEARNED CI T(APPEALS) RECORDED IN PARAGRAPH 3.2 WHICH READS AS UNDER: 3.2 THE SUBMISSIONS OF THE APPELLANT ARE CONSIDERE D. THERE IS MERIT IN GROUND 1 OF THE APPEAL. AS PER THE IMPUGNED ORDE R NOTICE U/S. 148 WAS ISSUED ON 19.3.2008 AFTER TAKING APPROVAL OF TH E ADDL. CIT RANGE-29. BUT SINCE ASSESSMENT U/S. 143(3) HAD BEE N COMPLETED IN THIS CASE ON 26.12.2002 THE ASSESSING OFFICER COUL D HAVE RE-REOPENED THE ASSESSMENT AFTER 31.3.2006 ONLY IN TERMS OF THE PROVISO APPEARING BELOW SUB-SECTION(1) OF SECTION 151. THE SAID PROVI SO MANDATES THE SATISFACTION OF THE CHIEF COMMISSIONER OF COMMISSIO N ON THE REASONS 4 RECORDED BY THE ASSESSING OFFICER BEFORE THE ISSUE OF THE NOTICE U/S. 148. SINCE THE SATISFACTION OF THE CHIEF COMMISSION ER OR COMMISSIONER WAS NOT OBTAINED THE REASSESSMENT PRO CEEDINGS ARE INITIATED. THERE IS MERIT IN GROUND 2 OF THE APPEAL ALSO AS THE ASSESSING OFFICER DID NOT DISPOSE THE OBJECTIONS OF THE APPELLANT TO THE REASSESSMENT PROCEEDINGS WHICH IS CONTRARY TO THE LAW LAID DOWN BY THE APEX COURT IN THE CASE OF GKN DRIVE SHAFTS (SUP RA). IN VIEW OF THE DISCUSSION ABOVE THE REASSESSMENT PROCEEDINGS ARE HELD TO BE BAD IN LAW. 3. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUB MITTED THAT SINCE THE LEARNED CIT(APPEALS) HAS QUASHED THE ASSESSMENT ORD ER FOR NOT TAKING APPROPRIATE APPROVAL FROM THE CCIT OR FROM THE CIT THE REVENUE HAS NOT CHALLENGED THIS PART OF THE ORDER OF THE ASSESSING OFFICER IN THE GROUNDS OF APPEAL THEREFORE THE APPEAL ON MERIT IS NOT MAINT AINABLE. HE FURTHER SUBMITTED THAT THIS ASPECT WAS POINTED OUT TO THE L EARNED DR. ON 16 TH JULY 2010 THEREAFTER THE REVENUE HAS TAKEN OVER TIME AN D THE ITAT HAS GIVEN ALMOST MORE THAN ONE YEAR BUT NEITHER THE GROUNDS H AVE BEEN RECTIFIED NOR ANY MATERIAL HAS BEEN PLACED ON RECORD WHICH SUGGES TS THAT APPROVAL WAS TAKEN FROM THE CCIT OR CIT. HE PRAYED THAT THE APPE AL OF THE REVENUE BE DISMISSED. 5 4. ON THE OTHER HAND LEARNED DR SUBMITTED THAT IN GROUND NO.1 REVENUE HAS PLEADED THAT IN THE FACTS AND CIRCUMSTA NCES OF THE CASE CIT HAS FAILED TO APPRECIATE THE RELIABLE ESTABLISHED INFOR MATION MEANING THEREBY REVENUE CAN TAKE THE PLEA THAT LEARNED CIT HAS WRON GLY QUASHED THE ASSESSMENT ORDER. SHE FURTHER PLACED ON RECORD COPY OF THE ITATS ORDER IN THE CASE OF MOHINI DEVI SINGH VS. DCIT IN IT(S.S) N O.21/DEL/1999. ON THE STRENGTH OF THIS ORDER SHE CONTENDED THAT THE ITAT CONSIDERED THE GRANT OF APPROVAL BY ADDITIONAL CIT INSTEAD OF COMMISSIONER UNDER SEC. 158BG IN A BLOCK ASSESSMENT AS A PROCEDURAL IRREGULARITY. THE SAME TREATMENT BE GIVEN IN THE PRESENT CASE. IN REBUTTAL LEARNED COUNSEL F OR THE ASSESSEE SUBMITTED THAT HON'BLE ALLAHABAD HIGH COURT HAS CONSIDERED TH IS ISSUE IN THE CASE OF DR. SHASHIKANT GARG VS. CIT REPORTED IN 285 ITR 158 . HONBLE COURT HAS QUASHED THE REOPENING OF THE ASSESSMENT ORDER IN A WRIT PETITION. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. SECTION 151 OF THE ACT PROVIDES T HAT WHERE AN ASSESSMENT UNDER SEC. 143(3) OR SECTION 147 HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR NO NOTICE SHALL BE ISSUED UNDER SEC. 148 BY A N ASSESSING OFFICER WHO IS BELOW THE RANK OF ACIT OR DCIT UNLESS THE JCIT IS S ATISFIED ON THE REASONS RECORDED BY SUCH ASSESSING OFFICER THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE. THE PROVISO APPENDED TO THIS SECTION CONTEM PLATES THAT AFTER THE 6 EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR NO SUCH NOTICE SHALL BE ISSUED UNLESS THE CCIT OR CIT IS SA TISFIED ON THE REASONS RECORDED BY THE ASSESSING OFFICER THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE. 6. IN THE PRESENT CASE ASSESSING OFFICER IN PARAGR APH NO.6 HAS RECORDED A FINDING THAT APPROVAL WAS TAKEN FROM THE ADDL.CIT . ADMITTEDLY NOTICE HAS BEEN ISSUED AFTER EXPIRY OF FOUR YEARS. LEARNED CIT (APPEALS) HAS ACCEPTED THIS ASPECT IN THE FINDING EXTRACTED SUPRA. NEITHER THE REVENUE HAS PLACED ON RECORD ANY MATERIAL EXHIBITING THE FACT THAT APPROV AL WAS TAKEN FROM THE CIT OR CCIT NOR TAKEN ANY GROUND OF APPEAL IMPUGNING TH E FINDINGS OF THE LEARNED CIT(APPEALS) ON THIS ISSUE. THUS THE APPEA L OF THE REVENUE IN THE PRESENT FORM IS NOT MAINTAINABLE. ACCORDINGLY IT I S REJECTED. DECISION PRONOUNCED IN THE OPEN COURT ON 16.09.2011 SD/- SD/- ( G.E. VEERABHADRAPPA) ( RAJPAL YAD AV ) VICE-PRESIDENT JUDICIAL MEMBER DATED: 16/09/2011 MOHAN LAL 7 COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR