The ACIT, 1 (2), v. M/s Raksha Builders,

PAGE 1 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : AAEFG9741L. I.T.(SS)A.NO.133/IND/2008 TO 135/IND/2008 A.YS. : 2003-04 2004-05 & 2005-06 ACIT M/S. G.M. INFRASTRUCTURE 1(2) VS E-5 ARERA COLONY BHOPAL BHOPAL APPELLANT RESPONDENT PAN NO. : AAEFG9741L. C.O.NOS.91 TO 93/IND/2008 (ARISING OUT OF I.T(SS).A.NOS. 133 TO 135/IND/2008 A.YS. : 2003-04 2004-05 & 2005-06 M/S. G.M. INFRASTRUCTURE ACIT E-5 ARERA COLONY VS 1(2) BHOPAL BHOPAL CROSS OBJECTOR RESPONDENT PAN NO. : AEXPG-5741G. I.T.(SS)A.NO.136/IND/2008 TO 140/IND/2008 A.YS. : 2000-01 TO 2004-05 ACIT SHRI S.N. GOEL 1(2) VS E-4/73 ARERA COLONY BHOPAL BHOPAL APPELLANT RESPONDENT PAGE 2 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS C.O.NOS.84 TO 88/IND/2008 (ARISING OUT OF I.T(SS).A.NOS. 136 TO 140/IND/2008 A.YS. : 2000-01 TO 2004-05 M/S. G.M. INFRASTRUCTURE ACIT E-5 ARERA COLONY VS 1(2) BHOPAL BHOPAL CROSS OBJECTOR RESPONDENT PAN NO. : AAEFR1758B I.T.(SS)A.NO.163/IND/2008 TO 169/IND/2008 A.YS. : 2000-01 TO 2004-05 ACIT M/S. RAKSHA BUILDERS 1(2) VS E-5/16 ARERA COLONY BHOPAL BHOPAL APPELLANT RESPONDENT PAN NO. : AAEFR1758B C.O.NOS.74 TO 80/IND/2008 (ARISING OUT OF I.T(SS).A.NOS. 163 TO 169/IND/2008 A.YS. : 2000-01 TO 2004-05 M/S. RAKSHA BUILDERS ACIT E-5/16 ARERA COLONY VS 1(2) BHOPAL. BHOPAL CROSS OBJECTOR RESPONDENT I.T.(SS)A.NO.161 & 162/IND/2008 A.YS. : 2005-06 & 2006-07 ACIT 1(2) BHOPAL SHRI VIPIN GOEL E-4/73 ARERA COLONY BHOPAL. PAGE 3 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS 1(2) VS BHOPAL L APPELLANT RESPONDENT C.O.NOS.109 & 110//IND/2008 (ARISING OUT OF I.T(SS).A.NOS. 161 & 162/IND/2008 A.YS. : 2005-06 & 2006-07 SHRI VIPIN GOEL E-4/73 ARERA COLONY BHOPAL ACIT 1(2) BHOPAL. VS CROSS OBJECTOR RESPONDENT DEPARTMENT BY : SHRI K.K.SINGH CIT DR ASSESSEE BY : SHRI S.S.DESHPANDE C.A. AND SHRI RAJENDRA SHRAMA C. A. DATE OF HEARING : 20/01/2010 O R D E R PER BENCH THIS BUNCH OF 34 APPEALS BELONG TO THE SAME ASSESSE E GROUP AND INVOLVE COMMON ISSUES. THESE APPEALS WERE HEARD TOG ETHER AND THESE ARE BEING DISPOSED OF THROUGH THIS CONSOLIDATED ORDER F OR THE SAKE OF CONVENIENCE. 2. FIRST WE SHALL TAKE UP APPEALS IN I.T.A.NOS. 133 T O 135/IND/2008 AND CROSS OBJECTION NOS. 91 TO 93/IND/ 2008. IN THESE CROSS OBJECTIONS THE COMMON ISSUE INVOLVED IS AS UNDER : - PAGE 4 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS NOT CORRECT IN HOLDING THAT ASSESSMENT PROCEEDINGS WERE VALIDLY INITIATED AND FURTHER HOLD ING THAT THE ASSESSMENT ORDER WAS NOT ILLEGAL AND INVALID. 3. THE LEARNED COUNSEL AT THE VERY BEGINNING SUBMITTED THAT IN ALL THE CROSS OBJECTIONS THIS IDENTICAL ISSUE WAS INVO LVED. SIMILARLY IN ALL THE REVENUES APPEALS THE ISSUE OF SUPPRESSED UNDISCLO SED SALE CONSIDERATION WAS INVOLVED. HENCE ON THE BASIS OF ALL THESE APP EALS ALL OTHER APPEALS COULD BE DISPOSED OF. 4. THE FACTS IN BRIEF ARE THAT SEARCH U/S 132(1) AND SURVEY OPERATION U/S 133A WERE CARRIED OUT ON 16.9.2005. C ERTAIN DOCUMENTS RELATED TO ASSESSEE FIRM WERE FOUND DURING THE COUR SE OF SAID SEARCH HENCE NOTICE U/S 153C READ WITH SECTION 153A WAS I SSUED IN THIS CASE ON 22.3.2006 WHEREBY THE ASSESSEE WAS REQUIRED TO FIL E THE RETURN WITHIN 30 DAYS FROM THE DATE OF SERVICE OF SUCH NOTICE. HOWEV ER NO RETURN WAS FILED WITHIN 30 DAYS SO STIPULATED. SUBSEQUENTLY THE ASS ESSEE VIDE ITS LETTER DATED 21.8.2006 SUBMITTED THAT RETURNS FILED EARLIE R U/S 139 FOR VARIOUS YEARS COULD BE CONSIDERED AS FILED IN COMPLIANCE TO SAID NOTICE. THE A.O. HOWEVER REJECTED THIS PLEA OF THE ASSESSEE AND REQ UIRED THE ASSESSEE TO FILE SEPARATE RETURN. SUBSEQUENTLY NOTICE U/S 142( 1) DATED 31 ST AUGUST PAGE 5 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS 2007 WAS ISSUED REQUIRING THE ASSESSEE TO PRODUCE THE ACCOUNTS OR DOCUMENTS SPECIFIED IN ANNEXURE TO THIS LETTER BEFO RE THE A.O. ON 13.9.2007. NOTICE U/S 143(2) WAS ALSO ISSUED ALONGW ITH SUCH NOTICE ISSUED U/S 142(1). THE ASSESSEE HOWEVER FILED RET URN OF INCOME ON 15.10.2007 DECLARING INCOME OF RS. 1 15 840/-. THE A.O. THEREAFTER NOTICING THE FACT OF DELIBERATE ACTION OF THE ASSES SEE NOT TO GIVE AN ADEQUATE OPPORTUNITY TO THE A.O. COMPLETED THE ASSE SSMENT PROCEEDINGS ON 31.12.2007 BY MAKING ADDITION ON ACCOUNT OF UND ISCLOSED SALE CONSIDERATION AND OTHER MINOR ADDITIONS. AGGRIEVED BY THIS THE ASSESSEE CARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A ) WHEREIN IT WAS CONTENDED THAT THE A.O. ISSUED NOTICE U/S 143(2) ON 31.8.2007 PRIOR TO THE FILING OF RETURN HENCE IT WAS ILLEGAL AND INVALID BECAUSE NOTICE U/S 143(2) COULD BE ISSUED ONLY WHEN THE ASSESSEE HAD F ILED THE RETURN AND ACCORDINGLY THE ORDER PASSED BY THE ASSESSING OFFI CER WAS VOID AB INITIO. THE LD. CIT(A) HOWEVER HELD THAT THOUGH THERE WAS IRREGULARITY IN THE ISSUE OF NOTICE U/S 143(2) HOWEVER MERELY FOR THA T REASON THE ASSESSMENT PROCEEDINGS COULD NOT BE DECLARED AS VOID PARTICUL ARLY WHEN SUCH FAILURE HAD NOT CAUSED ANY PREJUDICE TO THE ASSESSEE. AGGRI EVED BY THIS THE ASSESSEE HAS FILED THIS CROSS OBJECTION. 5. THE LEARNED COUNSEL FOR THE ASSESSEE NARRATED THE F ACTS AND CONTENDED THAT EXISTENCE OF A VALID REASON WAS A SI NE QUA NON FOR ISSUANCE PAGE 6 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS OF A VALID NOTICE U/S 143(2) AND IN THE PRESENT CAS E IT WAS AN ADMITTED FACT THAT THE ASSESSEE FILED RETURN OF INCOME ONLY ON 15 .10.2007 HENCE NOTICE ISSUED U/S 143(2) ON 31.8.2007 WAS NON EST IN LAW. THEREAFTER HE CONTENDED THAT THE ISSUANCE OF NOTICE U/S 143(2) AF TER FILING OF RETURN WAS ALSO A MANDATORY CONDITION FOR MAKING A VALID ASSES SMENT U/S 143(3) OR U/S 15 OF THE ACT. HENCE ASSESSMENT ORDER PASSED W ITHOUT ISSUING A VALID NOTICE U/S 143(2) WAS AN ILLEGAL ORDER AND THEREF ORE A NULLITY. HE FURTHER CONTENDED THAT THE LD. CIT(A) ALSO ADMITTED THAT TH ERE WAS SOME IRREGULARITY IN ISSUING NOTICE U/S 143(2) HOWEVER HE TREATED SUCH IRREGULARITY AS A CURABLE ONE WHICH WAS NOT A CORR ECT POSITION IN LAW HENCE THE ORDER OF THE LD. CIT(A) WAS NOT CORRECT IN THIS REGARD. HE FURTHER CONTENDED THAT THE PROVISIONS OF SECTION 29 2BB WERE BROUGHT ON STATUTE WITH EFFECT FROM 1.4.2008 AND WERE OF PROSP ECTIVE NATURE HENCE THE SAME COULD NOT ALSO BE OF ANY HELP TO THE CAUSE OF REVENUE. 6. THE LD. DEPARTMENTAL REPRESENTATIVE FIRST OF ALL POINTED OUT THE APPROACH OF THE ASSESSEE IN ADOPTING THE DILLY DELA YING TACTICS. THEREAFTER HE CONTENDED THAT NOTICE ISSUED U/S 143(2) ON 31.8. 2007 WAS VALID NOTICE AND REFERRED TO PAGE 91 OF THE PAPER BOOK. THE BENC H ON READING THE CONTENTS OF SAID NOTICE REQUIRED THE DEPARTMENT TO CLARIFY ON THE ASPECT WHETHER THE ASSESSEE HAD FILED ANY RETURN OF INCOME PRIOR TO ISSUE OF SUCH NOTICE AS IN PARA 1 OF THE SAID NOTICE THE A.O. HA D STATED THAT THERE WERE PAGE 7 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS CERTAIN POINTS IN CONNECTION WITH THE RETURN OF INC OME SUBMITTED BY YOU FOR THE ASSESSMENT YEAR 2005-06 ON WHICH THE A.O. REQUIRED SOME FURTHER INFORMATION THE LD. CIT DR ADMITTED THAT IT WAS AN INCORRECT FACT AS THE ASSESSEE HAD FILED RETURN OF INCOME ONLY ON 15.10.2 007. THIS FACT WAS ALSO CORROBORATED BY THE LEARNED COUNSEL FOR THE AS SESSEE. THE LD. CIT(A) THEREAFTER CONTENDED THAT IN NOTICE ISSUED U/S 153A READ WITH SECTION 153C TIME OF 30 DAYS HAD BEEN GIVEN TO THE ASSESSEE TO FILE THE RETURN OF INCOME. HOWEVER THE ASSESSEE DID NOT FIL E THE RETURN SEPARATELY AND INSTEAD SUBMITTED THAT RETURNS FILED U/S 139 OR IGINALLY COULD BE TREATED AS FILED IN RESPONSE THERETO HENCE SUCH LETTER OF THE ASSESSEE WAS TO BE DEEMED AS A RETURN FILED U/S 153A READ WITH SECTION 153C AND THEREFORE NOTICE U/S 143(2) ISSUED ON 31.8.2007 WAS VALID. HE FURTHER CONTENDED THAT SUCH NOTICE WAS ALSO SERVED WITHIN 12 MONTHS HENCE FOR THIS REASON ALSO THERE EXISTED NO INFIRMITY. HE FURTHER CONTEN DED THAT THERE WERE TWO ASPECTS U/S 142(1) OF THE ACT I.E. THE A.O. COULD R EQUIRE THE ASSESSEE TO FILE A RETURN OF INCOME IN CASE THE ASSESSEE HAD NO T FILED THE RETURN WITHIN THE TIME ALLOWED U/S 139(1) OR BEFORE THE END OF RE LEVANT ASSESSMENT YEAR AND SECONDLY THE A.O. COULD REQUIRE THE ASSESSEE T O PRODUCE SAID ACCOUNTS OR DOCUMENTS OR INFORMATION AS THE A.O. MI GHT REQUIRE AND IN THIS CASE THE NOTICE U/S 142(1) HAD BEEN ISSUED O N THE SECOND ASPECT AND NOT FOR CALLING A RETURN. HENCE THE ACTION OF THE A.O. IN ISSUING NOTICE U/S PAGE 8 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS 143(2) ON 31.8.2007 COULD NOT BE CONSIDERED AS IRRE GULAR OR FAULTY. HE FURTHER CONTENDED THAT IN THE ORIGINAL NOTICE THE ASSESSEE WAS GIVEN 30 DAYS PERIOD TO FILE THE RETURN WHICH THE ASSESSEE DID NOT COMPLY AND THE ASSESSEE INTENTIONALLY CHOSE TO FILE THE RETURN AS LATE AS POSSIBLE AND THEREFORE SUCH ACTION OF THE ASSESSEE WAS HIGHLY O BJECTIONABLE BECAUSE IF SUCH ACTION OF THE ASSESSEE WAS UPHELD THEN EVERY ASSESSEE WOULD FILE RETURN OF INCOME ON THE LAST DATE FOR PASSING THE A SSESSMENT ORDER AND IN THAT CASE THE A.O. WOULD NOT GET ANY OPPORTUNITY T O EXAMINE THE CLAIMS OF THE ASSESSEE. HE FURTHER CONTENDED THAT THE ASSE SSEE APPEARED AND PARTICIPATED IN THE PROCEEDINGS BEFORE AND AFTER FI LING OF RETURN HENCE FOR THIS REASONS ALSO THE ASSESSMENT PROCEEDINGS COULD NOT BE DECLARED NULL AND VOID. 7. THE LEARNED COUNSEL IN THE REJOINDER CONTENDED TH AT RETURN FILED BY THE ASSESSEE WAS U/S 153C READ WITH SECTIO N 153A ON 15.10.2007 AND NOTICE U/S 143(2) WAS ISSUED BEFORE THAT DATE HENCE ASSESSMENT PROCEEDINGS WERE NOT VALID. HE FURTHER CONTENDED TH AT DEPARTMENT HAD SEVERAL OPTIONS FOR ENFORCING THE ASSESSEE TO FILE THE RETURN BEFORE THE TIME LIMITATION FOR PASSING THE ASSESSMENT AND ALSO HAD POWERS WITHIN LAW TO MAKE A BEST JUDGMENT ASSESSMENT U/S 114 ON THE BASI S OF MATERIAL AVAILABLE ON RECORD AND THEREFORE THE ACTION OF T HE ASSESSEE IN FILING RETURN IN OCTOBER 2007 COULD NOT RESULT INTO AN A DVERSE INFERENCE AGAINST PAGE 9 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS THE ASSESSEE. HE FURTHER CONTENDED THAT IN THIS CA SE THE RETURN HAD BEEN FILED NEARLY ONE AND A HALF MONTHS BEFORE THE TIME BARRING PERIOD AND NOT ON THE LAST DATE FOR PASSING ASSESSMENT ORDER. HENC E THE RELEVANT THE CONTENTIONS OF THE LD. CIT DR HAD TO BE REJECTED. 8. THE LD. CIT DR AT THIS STAGE SUBMITTED THAT MATTE R COULD BE HEARD ON MERITS AS WELL. ACCORDINGLY HE TOOK UP TH E ISSUE OF DELETION OF ADDITION OF RS. 32 73 930/- MADE BY THE ASSESSING O FFICER ON ACCOUNT OF UNDISCLOSED SALE PROCEEDS. THE LD. CIT DR THEREAFT ER NARRATED THE FACTS AND TOOK US THROUGH THE ASSESSMENT ORDER AS WELL AS SEIZED DOCUMENTS TO SUPPORT THE ORDER OF THE A.O. 9. THE LEARNED COUNSEL ON THE OTHER HAND SUBMITTED THAT THE SEIZED DOCUMENTS WERE ONLY OF PLANNING NATURE AND T HE INTERPRETATION OF THE SAME MADE BY THE ASSESSING OFFICER WAS A CASE O F SUSPICION OR PRESUMPTION ONLY. HE FURTHER REFERRED TO PAGES 64 T O 87 OF THE PAPER BOOK CONTAINING DETAILED SUBMISSIONS MADE BEFORE THE REV ENUE AUTHORITIES WHEREIN THE VARIOUS ASPECTS OF THE ISSUE INVOLVED H AD BEEN CLARIFIED. ON A QUERY FROM THE BENCH AS TO ON WHAT BASIS THE A.O. MADE ADDITION ONLY @ 25 % TO ARRIVE AT QUANTUM OF UNDISCLOSED SALE PRO CEEDS. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT WAS PURE LY AN AD HOC DECISION WITHOUT ANY MATERIAL/BASIS. THE LD. DEPARTMENTAL RE PRESENTATIVE IN THE REJOINDER CONTENDED THAT KACHCHI CASH BOOK WAS FOU ND WHEREIN THE PAGE 10 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS TRANSACTIONS OF RECEIPT OF ON MONEY HAD BEEN RECORD ED BY THE PARTNERS OF THE FIRM HENCE THE SAME SHOULD HAVE BEEN EXPLAINE D. HOWEVER THE ASSESSEE GAVE EVASIVE REPLIES. THE LD. CIT DR ALSO DREW OUR ATTENTION TO PAGE 60 TO 63 OF THE PAPER BOOK TO SHOW THE CONTENT S OF THE SEIZED PAPERS AND THE BASIS ADOPTED BY THE ASSESSING OFFICER FOR MAKING SUCH ADDITION. THE LD.AUTHORIZED REPRESENTATIVE WITH THE PERMISSIO N CONTENDED THAT THE ENTRIES PERTAINED TO DIFFERENT ENTITIES OF THE ASSESSEE GROUP WHICH WERE DULY EXPLAINED IN THE RESPECTIVE CASES HENCE IT WAS NOT A CASE OF EVASIVE REPLIES OR NON-FURNISHING OF EXPLANATION. H E FURTHER PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 10. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 11. FIRSTLY WE WOULD TAKE UP THE LEGAL ISSUE. 12. IT IS AN ADMITTED FACT THAT NOTICE U/S 153A READ WI TH SECTION 153C WAS ISSUED ON 22 ND MARCH 2006 WHEREBY THE ASSESSEE WAS REQUIRED TO FILE THE RETURN OF INCOME WITHIN 30 DAYS FROM TH E DATE OF RECEIPT OF SUCH NOTICE. HOWEVER THE ASSESSEE DID NOT FILE A S EPARATE RETURN BUT FILED A LETTER ON 21.8.2006 STATING THAT THE RETURNS FILE D U/S 139 EARLIER SHOULD BE TREATED AS RETURN FILED IN RESPONSE TO SUCH NOTICE. AS PER THE ASSESSMENT ORDER IT IS EVIDENT THAT THE A.O. HAS NOT ACCEPTED THIS LETTER OF THE ASSESSEE AS HE HAS HIMSELF OBSERVED THAT THE ASSES SEES SUCH PLEA WAS PAGE 11 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS REJECTED AND THE ASSESSEE WAS MADE AWARE OF THE FAC T THAT RETURN IN RESPONSE TO NOTICE ISSUED U/S 153-A READ WITH SECTI ON 153C WAS TO BE FILED SEPARATELY. ACCORDINGLY ONCE THE A.O. HAS TA KEN A VIEW IN THE MATTER THEN SUCH LETTER FILED BY THE ASSESSEE HAS GOT NO LEGAL CONSEQUENCE ESPECIALLY WHEN THE ASSESSEE HAD FILED SEPARATE RETURN THOUGH SUBSEQUENTLY WHICH HAS BEEN ACTED UPON BY T HE ASSESSING OFFICER. ACCORDINGLY WE REJECT THIS CONTENTION OF THE REVENUE THAT SUCH LETTER SHOULD BE TREATED AS DEEMED RETURN. BEFORE D ECIDING THE CORE ISSUE INVOLVED IN THIS GROUND WE STATE THAT THE REVENUE AUTHORITIES HAVE BEEN GIVEN AMPLE POWERS TO COMPEL THE ASSESSEE TO FILE T HE RETURNS AND IN CASE THE ASSESSEE DOES NOT COMPLY WITH THE NOTICES ISSUE D BY THE ASSESSING OFFICER IN THIS REGARD THEN PENAL PROVISION EXIST S WHICH CAN BE INVOKED TO PENALIZE THE ASSESSEE. THE ASSESSEE CAN ALSO BE MADE LIABLE TO PAY INTEREST FOR THE PERIOD OF FAILURE. APART FROM THAT ASSESSING AUTHORITIES CAN MAKE AN ASSESSMENT U/S 144 READ WITH SECTION 14 2(1). HENCE WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE REVENUE THAT THE ASSESSEE BY NOT FILING THE RETURN IN ACCORDANCE WITH THE NOTICE ISSUED BY THE ASSESSING OFFICER CAN CAUSE PREJUDICE TO THE INTERESTS OF THE REVENUE. IN THIS REGARD IT IS FURTHER NOTEWORTHY THAT THE A.O. ISSUED NOTIC E U/S 153A READ WITH SECTION 153C ON 22.3.2006 AND THEREAFTER TILL 31. 8.2007 HE HAS NOT BOTHERED TO TAKE OTHER MEASURES AS PROVIDED IN THE STATUTE TO GET THE RETURN PAGE 12 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS OF INCOME FILED. IT IS FURTHER NOTED THAT EVEN IN T HE NOTICE ISSUED U/S 142(1) HE HAS REQUIRED THE ASSESSEE TO PRODUCE THE ACCOUNTS OR DOCUMENTS AND NOT THE RETURN OF INCOME. SIMILARLY IN THE NOTICE ISSUED U/S 142(1) ON 3.10.2007 HE HAS CALLED CERTAIN INFO RMATION ONLY. IN THE BACKGROUND OF THESE FACTS THIS CONTENTION OF THE R EVENUE IN OUR OPINION LACKS SUBSTANCE BECAUSE IF THE ASSESSEE HAS NOT FIL ED THE RETURN THE A.O. IS MORE RESPONSIBLE FOR NOT TAKING A TIMELY ACTION AND AT THIS STAGE THE ASSESSEE CANNOT BE SOLELY HELD RESPONSIBLE FOR SUCH A SITUATION. OUR THIS VIEW FURTHER FINDS STRONG SUPPORT FROM THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DIVINE AND FINANCE LIM ITED & OTHERS (2008) 298 ITR 268. THE HON'BLE COURT OBSERVED AS U NDER :- NO QUESTION OF LAW FAR LESS ANY SUBSTANTIAL QUEST ION OF LAW ARISES FOR OUR CONSIDERATION. WE MAY HOWEVER BRIE FLY REFLECT UPON A SUBMISSION MADE BY LEARNED COUNSEL F OR THE RESPONDENT TO THE EFFECT THAT THE ASSESSEE HAD BY ITS LETTER DATED MARCH 8 1999 REQUESTED THE ASSESSING OFFIC ER TO EXAMINE THE ASSESSMENT RECORDS OF THE SHARE APPLICA NTS WHOSE GR NOS. HAD BEEN SUPPLIED. IT IS NOT CONTROVE RTED THAT ACTION WAS NOT TAKEN BY THE A.O. BUT IT HAS JUSTIF IABLY BEEN CONTENDED THAT THIS INACTION WAS DUE TO PAUCITY OF TIME LEFT AT THAT STAGE SINCE THE ASSESSMENT HAD TO BE FRAMED BY MARCH 31 1999. IT HAS BEEN POINTED OUT THAT SEVERAL ADJOU RNMENTS PAGE 13 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS HAD BEEN GRANTED BY THE ASSESSING OFFICER ON THE AS KING OF THE ASSESSEE. THE TIMING OF THE ASSESSEES SAID LET TER IS MOST SUSPECT. GENERALLY SPEAKING IT IS INCUMBENT ON THE A.O. TO MANAGE HIS SCHEDULE WHILE GRANTING ADJOURNMENTS I N SUCH A MANNER THAT HE DOES NOT RUN OUT OF TIME FOR DISCH ARGING THE DUTIES CAST ON HIM BY THE STATUTE. IN THE PRESENT C ASE THE DETAILS HAD BEEN FURNISHED TO THE A.O. MUCH BEFORE MARCH 1999 BUT HE FAILED TO REACT TO THE SHIFTING OF THE BURDEN TO INVESTIGATE INTO THE CREDITWORTHINESS OF THE SHARE APPLICANTS. THEREFORE THE APPEAL IS DISMISSED. 13. NOW COMING TO THE CORE ISSUE WE FIND THAT PROVISI ONS OF SECTION 143(1) AND 143(2) COME INTO PLAY ONLY WHEN A RETURN HAS BEEN FURNISHED U/S 139 OR IN RESPONSE TO NOTICE ISSUED U /S 142(1) OF THE ACT. HENCE WE FIND SUFFICIENT FORCE IN THE CONTENTION O F THE ASSESSEE THAT NOTICE ISSUED PRIOR TO FILING OF RETURN IS NON-EST IN LAW. IN THIS REGARD WE ARE FURTHER OF THE VIEW THAT PROVISIONS OF SECTION 143(2) NOT ONLY A CASE OF PROCEDURAL PROVISION BUT THESE ALSO GIVE JURISDI CTION TO THE A.O. TO COMPUTE THE TOTAL INCOME IN A PARTICULAR MANNER AND THUS NOT AN EMPTY FORMALITY. THEREFORE FAILURE TO COMPLY WITH SUCH P ROVISIONS CANNOT BE TAKEN LIGHTLY AND THE ACTION OF THE A.O. CANNOT BE JUSTIFIED MERELY BECAUSE NO PREJUDICE HAS BEEN CAUSED TO THE ASSESSE E AS HELD BY THE LD. CIT(A). WE ALSO FIND THAT PROVISIONS OF SECTION 292 BB ARE OF PROSPECTIVE NATURE PARTICULARLY HAVING REGARD TO T HE PROVISO THERETO PAGE 14 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS HENCE DO NOT COME TO THE RESCUE OF THE REVENUE. ON THE CONTRARY IN OUR VIEW THE VERY ENACTMENT OF THIS PROVISION MAKES IT CLEAR THAT LEGISLATURE DOES NOT TREAT SUCH NATURE AND SCOPE OF SECTION 143 MERELY AS A FORMALITY AND THAT IS WHY THE ASSESSEE HAS BEEN GIVEN AN OPPO RTUNITY EVEN U/S 292BB TO RAISE SUCH PLEA BEFORE THE COMPLETION OF A SSESSMENT. 14. IT IS ALSO NOTEWORTHY THAT PRIOR TO SUCH NEW PROCED URE OF ASSESSMENT IN SEARCH CASES THE UNDISCLOSED INCOME FOUND AS A CONSEQUENCE OF SEARCH HAD TO BE ASSESSED IN ACCORDA NCE WITH THE PROVISIONS OF SECTIONS 158BC/158BD UNDER CHAPTER XI VB OF THE ACT. THE PROVISIONS OF SECTION 153A SERVE THE SAME PURPO SE. RATHER IF WE TAKE NOTE OF EXPLANATION 1 TO SECTION 153A THEN IT BECOMES APPARENT THAT PROVISIONS OF SECTION 143(2) HAVE TO BE APPLIED IN ITS FULLEST SCOPE IN RESPECT OF ASSESSMENT OR REASSESSMENT TO BE MADE U/ S 153A. HAVING STATED SO WE FIND THAT IN THE CASE OF BLOCK ASSESS MENT PROCEEDINGS UNDER CHAPTER XIV THE PROVISIONS THEREOF BEING SIMILAR IN THIS REGARD THERE WAS A CONTROVERSY REGARDING NO REQUIREMENT OF SERVI CE OF NOTICE U/S 143(2) OR NON-APPLICABILITY OF TIME LIMIT OF SERVIC E OF NOTICE U/S 143(2). HOWEVER RECENTLY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. PAWAN GUPTA AS REPORTED IN 318 ITR 322 AFTER CONSI DERING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF R.DALMI A AS REPORTED IN 236 ITR 480 AND THE DECISION OF THE HON'BLE GAUHATI HIG H COURT IN THE CASE PAGE 15 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS OF VANDANA GOGOI AS REPORTED IN 289 ITR 28 HAS HEL D THAT SERVICE OF NOTICE U/S 143(2) WAS MANDATORY EVEN IN CASE OF BLO CK ASSESSMENT AND NON-SERVICE OF SUCH NOTICE WOULD MAKE THE ASSESSMEN T ORDER VOID. IN THAT CASE ALSO PLEAS OF PARTICIPATION BY THE ASSESSEE I N THE ASSESSMENT PROCEEDINGS AND NO PREJUDICE TO THE INTERESTS OF AS SESSEE WERE TAKEN LIKE THE PRESENT CASE HOWEVER THE SAME DID NOT FIND FA VOUR WITH THE HON'BLE HIGH COURT. THE PROVISIONS OF SECTION 143(2) ARE UN DISPUTEDLY APPLICABLE TO THE PROVISIONS OF SECTION 153A HENCE RATIO OF THIS DECISION IS EQUALLY APPLICABLE HERE. ACCORDINGLY IN OUR OPINION THE N OTICE U/S 143(2) MUST BE SERVED IN THE MANNER AS SPECIFIED IN LAW WHICH HAS NOT BEEN DONE IN THE PRESENT CASE AS IT IS EVIDENT THAT NO NOTICE U NDER THIS SECTION HAS BEEN SERVED ON THE ASSESSEE AFTER THE FILING OF RETURN O N 15.10.2007. CONSEQUENTLY WE QUASH THE ASSESSMENT PROCEEDINGS F OR ALL THESE YEARS AS NULL AND VOID. 15. BEFORE PARTING WE MAY ALSO ADD THAT COMPLIANCE OF THE PROVISIONS OF SECTION 143(2) HAVING REGARD TO NATU RE AND SCOPE OF THESE PROVISIONS AND LANGUAGE EMPLOYED THEREIN CAN HAPPE N ONLY AFTER THE RECEIPT OF RETURN OR DOCUMENTS AS SPECIFIED U/S 142 (1)(II) HENCE ISSUE OF NOTICE U/S 143(2) PRIOR TO SUCH STAGE DOES NOT SERV E ANY PURPOSE HENCE REDUNDANT. WE MAY ALSO ADD THAT TOTAL NON-COMPLIANC E OR PART COMPLIANCE OF NOTICE ISSUED U/S 143(2) MAY ALSO RESULT INTO FR AMING OF ASSESSMENT U/S PAGE 16 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS 144 HENCE FOR THIS REASON ALSO THE COMPLIANCE OF PROVISIONS OF SECTION 143(2) IN THE MANNER AS PRESCRIBED BY LAW IS NECE SSARY. 16. NOW WE SHALL DISPOSE OF GROUND NO.1 OF REVENUES A PPEAL IN I.T.A.NO. 133/IND/2008 IN RESPECT OF WHICH FACTS A ND CONTENTIONS OF BOTH THE PARTIES HAVE ALREADY BEEN NARRATED HEREIN BEFOR E. 17. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 18. IT IS NOTED THAT IN THE COURSE OF SEARCH CERTAIN D OCUMENTS WERE FOUND AS REGARD TO THE CONSTRUCTION OF CERTAIN COMM ERCIAL/RESIDENTIAL PROJECTS. THE A.O. FROM THE NOTINGS MADE THEREIN IN FERRED THAT THE ASSESSEE WAS INDULGED IN RECEIVING ON MONEY WHICH WAS NOT DISCLOSED IN THE BOOKS OF ACCOUNT. HOWEVER FROM THE PERUSAL OF SUCH SEIZED DOCUMENTS AND THE ASSESSMENT ORDER IT IS EVIDENT T HAT THE A.O. HAS REACHED TO THIS CONCLUSION ON HIS OWN WITHOUT MAKIN G NECESSARY ENQUIRIES IN REGARD TO ACTUAL CONSIDERATION OF SIMILAR PROPER TIES OF OTHER BUILDERS NOR HE HAS MADE ANY INQUIRY FROM THE BUYERS OF SUCH PROPERTIES. IT IS FURTHER NOTED THAT THE A.O. HAS NOT GIVEN TOTAL EFF ECT TO THE SEIZED DOCUMENTS BY ADDING ONLY 25 % OF THE QUANTUM OF UND ISCLOSED SALES CONSIDERATION ARRIVED BY HIM AND NO BASIS FOR ADOPT ION OF SUCH RATE IS EVIDENT IN THE ASSESSMENT ORDER. WE FURTHER FIND TH AT THE LD. CIT(A) HAS ALSO EXAMINED THIS ISSUE IN DETAIL AND WE ARE IN AG REEMENT WITH SUCH PAGE 17 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS FINDINGS OF THE LD. CIT(A). FOR THE SAKE OF READY R EFERENCE WE REPRODUCE THE SAME AS UNDER :- I HAVE CONSIDERED THE SUBMISSIONS OF THE AR THE ASSESSMENT ORDER AND THE COPY OF SEIZED PAPER AND OTHER DOCUMENTS FURNISHED BEFORE THE A.O. DURING ASSESSMENT PROCEEDINGS. IT IS FOUND THAT THE ASSESS EE HAD SUBMITTED BEFORE THE A.O. THAT THE CONSTRUCTION APPEARING IN SUCH PAPER WAS NOT MADE. COPY OF APPROVED MAP WAS PRODUCED BEFORE THE A.O. AND THE A.O. WAS ALSO INFORMED THAT HE COULD PHYSICALLY VER IFY THE SAME. THE A.O. HAS DISREGARDED THE SUBMISSIONS OF THE ASSESSEE WITHOUT MENTIONING ANY REASONS FOR NOT ACCEPTING THE SAID EXPLANATION. IT IS OBVIOUS FROM THE APPROVED MAP THAT THE SHOPS MENTIONED IN THE SEIZED PAPER ARE DIFFERENT THAN THE SHOPS MENTIONED IN THE APPROVED MAP. THUS IT CANNOT BE HELD THAT THE SAID LOOSE PAPER COULD HAVE FORMED BASIS OF CALCULATING THE SALE OF THE ASSESSEE. IT IS FURTHER OBSERVED THAT T HE PAPER CONTAINS MENTION OF @5 ETC. IN FRONT OF THE AREAS MENTIONED IN THE LOOSE PAPER WHICH HAS BEEN INFERRED BY THE ASSESSING OFFICER AS MENTION OF SAL E PAGE 18 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS RATE @ RS. 5 000/- PER SQ.FT. HOWEVER THERE IS NO INDICATION IN THE PAPER THAT THE SAID FIGURE RELATE S TO POSSIBLE SALE RATE OR THAT THE FIGURES ARE IN CODE. THE SAME COULD HAVE BEEN RELATED TO POSSIBLE RENT OR TO SOME OTHER ACTIVITY IT IS FURTHER OBSERVED THAT TH E A.O. HAS NOT BROUGHT ON RECORD ANY SPECIFIC CASE WHERE T HE ASSESSEE HAS BEEN FOUND TO MAKE ANY UNRECORDED SALES. THE A.O. WAS NOT JUSTIFIED IN TREATING THE F IGURES MENTIONED AS SALE RATES IN CODE WITHOUT BRINGING AN Y COLLABORATIVE EVIDENCE OR AT LEAST COMPARABLE CASE ON RECORD SPECIFICALLY WHEN THE PROPERTIES ARE CLAIMED TO HAVE BEEN SOLD AT RATES EQUAL TO OR MORE THAN THE R ATES FIXED BY THE REGISTERING AUTHORITIES. FOR THE REASONS MENTIONED ABOVE THE ADDITIONS MADE AS UNRECORDED SALES IN ALL THE YEARS UNDER APPEAL A RE HEREBY DELETED AND THUS THESE GROUNDS OF THE APPELL ANT ARE ALLOWED. 19. BOTH THE PARTIES HAVE STATED THAT THE MAJOR ISSUE I NVOLVED IN ALL THESE APPEALS IS REGARDING UNDISCLOSED SALES CONSID ERATION AND THE FACTS ARE IDENTICAL HENCE THIS ISSUE IN ALL THE APPEALS FILED BY THE ASSESSEE IS PAGE 19 OF 19 IT(SS)A.NOS. 133 & 134/IND/2008 ETC. M/S. G.M. INFRASTRUCTURE & OTHERS DECIDED IN FAVOUR OF THE ASSESSEE. CONSEQUENTLY AL L THE GROUNDS OF THE REVENUE IN THIS REGARD ARE DISMISSED. 20. THOUGH SOME MINOR ISSUES ARE ALSO INVOLVED IN VARIO US APPEALS IN RESPECT OF WHICH BOTH THE PARTIES HAVE REITERATE D THEIR RESPECTIVE STAND BUT IN VIEW OF OUR DECISION IN RESPECT OF ASSESSEE S CROSS OBJECTIONS WE DO NOT CONSIDER IT NECESSARY TO DEAL WITH SUCH MINO R ISSUES. 21. IN THE RESULT ALL THE CROSS OBJECTIONS FILED BY TH E ASSESSEES ARE ALLOWED AND ALL THE REVENUES APPEALS ARE DISMISSED . THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 27 TH JANUARY 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 27 TH JANUARY 2010. CPU* 212225