SHRI KISHORILAL GUPTA, MUMBAI v. THE ACIT (OSD)-26(1), MUMBAI

ITSSA 18/MUM/2006 | misc
Pronouncement Date: 16-03-2011 | Result: Allowed

Appeal Details

RSA Number 1819916 RSA 2006
Assessee PAN AABPG2772J
Bench Mumbai
Appeal Number ITSSA 18/MUM/2006
Duration Of Justice 5 year(s) 2 month(s)
Appellant SHRI KISHORILAL GUPTA, MUMBAI
Respondent THE ACIT (OSD)-26(1), MUMBAI
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 16-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 16-03-2011
Date Of Final Hearing 06-01-2010
Next Hearing Date 06-01-2010
Assessment Year misc
Appeal Filed On 16-01-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A MUMBAI BEFORE SHRI R.S. SYAL (AM) AND SMT. ASHA VIJAYARAGH AVAN (JM) IT(SS)A NO. 18/MUM/2006 BLOCK PERIOD 01.4.1995 TO 14.9.2000 SHRI KISHORILAL GUPTA 7B SNEH MILAN KHANDELWAL FRIENDS CHS 17 TH ROAD KHAR (W) MUMBAI-400 052 PAN-AABPG 2772J VS. THE ACIT (OSD) - 26(1) MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI PANKAJ TOPRANI RESPONDENT BY: SHRI SRAVAN KUMAR O R D E R PER ASHA VIJAYARAGHAVAN (JM) THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 1-.11.2005 PASSED BY THE LD. CIT(A)-XXVIII FOR THE BLOCK PERIOD 1.4.1995 TO 14.9.2000. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SALARIED EMPLOYEE EMPLOYED WITH GOLCHA GROUP OF COMPANIES NAMELY CHAN DRA & CO. GOLCHA TALKAM & COSMETICS PVT. LTD. AS CHIEF EXECUT IVE ON A SALARY OF RS. 15 000/- PER MONTH PLUS BONUS ETC. THE ASSESSE E IS ASSESSED TO TAX BY THE A.C. OF I.T. RANGE-28(2). BESIDES SALARY H IS OTHER SOURCES OF INCOME ARE DIVIDEND BANK INTEREST CAPITAL GAIN ON THE SALE OF SHARES ETC. 3. THE AO WHILE COMPLETING THE ASSESSMENT U/S. 158B C R.W.S. 143(3) OF THE I.T. ACT THE ASSESSED INCOME AT RS. 95 38 6 60/-. ON FURTHER APPEAL BEFORE THE LD. CIT(A) THE LD. CIT(A) PARTLY ALLOWED THE ASSESSEES IT(SS)A NO.18/M/06 2 APPEAL. HOWEVER ON THE MAJOR ISSUES THE LD. CIT(A ) CONFIRMED THE ORDER OF THE AO. 4. AGGRIEVED ASSESSEE IS IN APPEAL BEFORE US. 5. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE SHRI PANKAJ TOPRANI RAISED AN ADDITIONAL GROUND WHICH IS AS FOLLOWS: ON FACTS AND IN LAW THE AO ERRED IN ISSUING NOTIC E U/S. 158BD BEYOND THE LIMITATION PERIOD AND HENCE THE BL OCK ASSESSMENT IS NULL & VOID AND LIABLE TO BE QUASHED. 6. THE ADDITIONAL GROUND IS ADMITTED RELYING ON THE DE CISION IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS CIT IN WHICH IT HAS BEEN HELD AS UNDER: THE TRIBUNAL SHOULD NOT BE PREVENTED FROM CONSIDER ING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS ALTHOUGH NOT RAISED EARLIER. THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO ISSUES ARISING OUT OF THE APPEAL BEFORE THE COMM ISSIONER (APPEALS) IS TOO NARROW A VIEW TO TAKE OF THE POWER S OF THE TRIBUNAL. UNDOUBTEDLY THE TRIBUNAL HAS THE DISCRETION TO ALL OW OR NOT TO ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRI BUNAL IS ONLY REQUIRED TO CONSIDER THE QUESTION OF LAW ARISI NG FROM FACTS WHICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS THERE IS NO REASON WHY SUCH A QUESTION SHOULD NOT BE ALLOWE D TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER THAT QUEST ION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSE E. THE TRIBUNAL HAD JURISDICTION TO EXAMINE A QUESTIO N OF LAW WHICH AROSE FROM THE FACTS AS FOUND BY THE INCOME-T AX AUTHORITIES AND HAVING A BEARING ON THE TAX LIABILI TY OF THE ASSESSEE. 7. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED AS FO LLOWS: ON THE BASIS OF THE LETTER DT. 23.12.2002 FROM DCIT CENTRAL CIRCLE-21 (CENTRAL RANGE V MUMBAI) THE ACIT RAN GE -28(2) IT(SS)A NO.18/M/06 3 MUMBAI ISSUED A NOTICE U/S. 158BD OF THE I.T. ACT. 1961 ON 20.1.2003 FROM WHICH IT CAN BE SEEN THAT IN THE SAI D NOTICE U/S. 158BD THE ASSESSING OFFICER HAD WRONGLY STATED THA T SEARCH WARRANT U/S. 132(1) OF THE I.T. ACT WAS IN THE NAME OF THE ASSESSEE. THE AO HAD ALSO WRONGLY ASSUMED THAT THERE WAS A SE ARCH ACTION U/S. 132 OF THE ACT AGAINST THE ASSESSEE ON 14.9.20 00. THE SEARCH ACTION ON 14.9.2000 WAS ON THE MUNSHI GROUP OF COMP ANIES AND NOT ON THE ASSESSEE. 8. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITT ED AS FOLLOWS: AS PER THE DECISION OF THE DELHI SPECIAL BENCH IN THE CASE OF MANOJ AGARWAL VS DY. CIT (113 ITD 377) SATISFACTIO N NOTE SHOULD PRECEDE THE DATE OF BLOCK ASSESSMENT ORDER PASSED U /S. 158BC. IN THE ABOVE CASE SATISFACTION NOTE HAS BEEN MADE AFT ER 2 MONTHS FROM THE DATE OF PASSING OF 158BC ORDER; HENCE 158B D PROCEEDINGS ARE TIME-BARRED. AS PER THE SATISFACTION NOTE DT. 23.12.2002 (PAGE NO. 36 OF THE PAPER BOOK) THE AO PASSING 158BC ORDER HAS STA TED THAT THE APPELLANT MAY NOT HAVE ACCOUNTED THE CASH LOANS. T HEREFORE THE USE OF WORD MAY INDICATE THAT HE HIMSELF IS NOT S URE AND IS IN DOUBT AND THEREFORE SATISFACTION ON HIS PART MAY NO T BE EQUATED WITH THE SATISFACTION CONTEMPLATED BY THE SUPREME COURT DECISION IN THE CASE OF MAHISH MAHESWARI VS ACIT (289 ITR 341) AND THE SPL. BENCH DECISION IN THE CASE OF MANOJ AGARWAL VS ACIT (SUPRA). AS PER THE DECISION OF THE DELHI TRIBUNAL IN THE CA SE OF RADHEY SHYAM BANSAL VS ACIT CIRCLE 37(1) NEW DELHI IT (SS) A NO. 12/DEL/2007 SHRI MANOJ BANSAL VS ACIT CIRCLE 37(1) NEW DELHI IT (SS) A NO. 14/DEL/2007 SHRI SURESH KUMAR VS ACIT C IRCLE 37(1) NEW DELHI NOTICE U/S. 158 BD IS TO BE ISSUED WITHI N A PERIOD OF 60 DAYS FROM COMPLETION OF THE BLOCK ASSESSMENT OF THE SEARCHED PERSON. 9. THE LD. AR RELIED ON THE DECISION IN THE CASE OF NEW DELHI AUTO FINANCE (P) LTD. VS JCIT (217 CTR 628) WHEREIN IT H AS BEEN HELD THAT MANDATORY REQUIREMENT OF RECORDING OF SATISFACTION TO THE EFFECT THAT UNDISCLOSED INCOME BELONGED TO THE ASSESSEE (OTHER THAN THE PERSON IT(SS)A NO.18/M/06 4 SEARCHED) BEING PATENTLY LACKING THERE WAS NO VALI D ASSUMPTION OF JURISDICTION AND BLOCK ASSESSMENT U/S. 158BD WAS IN VALID. 10. THE LD. DEPARTMENTAL REPRESENTATIVE REPLIED THA T SATISFACTION NOTE IS PART OF THE 158BC ORDERS. 11. WE FIND THAT IN THE CASE OF MANOJ AGGARWAL VS D CIT 113 ITD 377 (DEL)(SB) IT HAS BEEN HELD AS FOLLOWS: NEXT QUESTION WAS WHETHER THERE WAS ANY RECORDING OF SATISFACTION THAT MEETS THE REQUIREMENT OF LAW. T HIS NOTE RECORDED THAT SEARCH IN THE CASE OF M AND ASSOCIATE CONCER NS AND THE BLOCK ASSESSMENT MADE ON HIM CONCLUSIVELY ESTABLISHED THE FACT THAT HE WAS INVOLVED IN PROVIDING BOGUS ACCOMMODATION BOOK ENTRIES TO VARIOUS PERSONS ON COMMISSION BASIS AND FOR THIS PU RPOSE HE HAD USED THE NAMES AND BANK ACCOUNTS OF VARIOUS COMPANI ES BENAMI PROPRIETORSHIP CONCERNS IN THE NAMES OF HIS EMPLOYE ES IN THE NAMES OF RELATIVES VARIOUS HUF ENTITIES AND FIRMS AND ON E SUCH CONCERN WAS THE ASSESSEE THE BANK ACCOUNTS OF WHICH WERE O PERATED BY MN AND HIS FATHER B AND THAT THE SOURCES OF CAS H AND CLEARING DEPOSITS AND THE WITHDRAWALS FROM THESE BANK ACCOUN TS NEEDED TO BE EXAMINED; THESE ACCOUNTS HAD BEEN USED FOR ACCOM MODATION BOOK ENTRIES AND HENCE UNDISCLOSED INCOME HAD ARI SEN IN THE HANDS OF THIS CONCERN WHICH HAD BEEN FOUND DURING T HE COURSE OF SEARCH AND SEIZURE OPERATIONS IN THE CASE OF M AN D HIS ASSOCIATE CONCERNS; THUS PROCEEDINGS U/S. 158BD WERE APPLICA BLE IN THIS CASE. ADMITTEDLY THIS NOTE WAS AFTER THE DATE OF BLOCK ASSESSMENT IN THE CASE OF M WHICH WAS FINALIZED ON 29.8.2002 . FURTHER THE NOTE OF SATISFACTION WAS NOT RECORDED BY THE DY. CI T CENTRAL CIRCLE- 3 NEW DELHI ACTING AS THE AO MAKING THE ASSESSMENT U/S. 158BC OF M SINCE THE SAID ASSESSMENT HAD BEEN FINALIZED EARLIER. CLEARLY THE NOTE OF SATISFACTION DT. 19.12.2002 WAS BEYOND THE DATE OF BLOCK ASSESSMENT IN SEC. 158BC PROCEEDINGS DT. 29.8.2002 IN THE CASE OF M. THEREFORE THE SATISFACTION RECORDED WAS BELA TED. 12. THEREFORE THE AO ERRED IN ISSUING NOTICE U/S. 1 58BD BEYOND THE LIMITATION PERIOD AND HENCE THE BLOCK ASSESSMENT IS NULL & VOID AND LIABLE TO BE QUASHED. IT(SS)A NO.18/M/06 5 13. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 16 TH DAY OF MARCH 2011 SD/- SD/- (R.S. SYAL) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED 16 TH MARCH 2011 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR A BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR I.T.A.T MUMBAI IT(SS)A NO.18/M/06 6 DATE INITIALS 1 DRAFT DICTATED ON: 10 . 0 3 .201 1 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 14 .0 3 .2011 ______ SR. PS/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER: _________ ______ JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER: _________ ______ JM/AM 5. APPROVED DRAFT COMES TO THE SR. PS/PS: _________ ______ SR. PS/PS 6. KEPT FOR PRONOUNCEMENT ON: _________ ______ SR. PS/PS 7. FILE SENT TO THE BENCH CLERK: _________ ______ SR. PS/PS 8. 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK: DATE ON WHICH FILE GOES TO AR _________ ______ 10 . DATE OF DISPATCH OF ORDER: _________ ______