Mr. Anees Firoz Sarkar, Surat v. The ACIT.,Circle-2,, Surat

ITSSA 34/AHD/2009 | misc
Pronouncement Date: 25-10-2013 | Result: Partly Allowed

Appeal Details

RSA Number 3420516 RSA 2009
Assessee PAN ADAPS6444H
Bench Ahmedabad
Appeal Number ITSSA 34/AHD/2009
Duration Of Justice 4 year(s) 3 month(s) 29 day(s)
Appellant Mr. Anees Firoz Sarkar, Surat
Respondent The ACIT.,Circle-2,, Surat
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 25-10-2013
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 25-10-2013
Date Of Final Hearing 21-10-2013
Next Hearing Date 21-10-2013
Assessment Year misc
Appeal Filed On 26-06-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BENCH AHMEDABAD .. ! ! ! ! ' #$ BEFORE SHRI N.S. SAINI ACCOUNTANT MEMBER AND SHRI KUL BHARAT JUDICIAL MEMBER 1. (SS) !./ I.T(SS).A. NO.34/AHD/2009 2. (SS) !./ I.T(SS).A. NO.35/AHD/2009 (BLOCK PERIOD : 01/04/1990 TO 27/04/2000) 1. MR.ANEES FIROZ SARKAR 3/2940-48 CHALAMWAD RUSTAMPURA SURAT PAN : ADAPS 6444 H 2. MR.IQBAL FIROZ SARKAR 3/2940-48 CHALAMWAD RUSTAMPURA SURAT PAN : ADAPS 6453 J / VS. 1. ACIT CIRCLE-2 SURAT 2. ACIT CIRCLE-2 SURAT ( &' / // / APPELLANTS ) .. ( ()&' / RESPONDENT ) ASSESSEE(S) BY : SHRI M.K. PATEL AR REVENUE BY : SHRI T.P.KRSHNAKUMAR CIT-DR ' * + $ / / / / DATE OF HEARING : 21/10/2013 -./ + $ / DATE OF PRONOUNCEMENT : 25/10/2013 0 / O R D E R PER SHRI KUL BHARAT JUDICIAL MEMBER : BOTH THESE APPEALS BY THE DIFFERENT ASSESSEES ARE D IRECTED AGAINST THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME TA X(APPEALS)-II SURAT (CIT(A) FOR SHORT) BOTH DATED 16/03/2009 FOR THE BLOCK PERIOD FORM 01/04/1990 TO 27/04/2000. SINCE COMMON ISSUES ARE I NVOLVED BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. IT(SS)A NOS.34 &35/AHD/2009 MR. ANEES FIROZ SARKAR& MR.IQBAL FIROZ SARKAR VS. ACIT BLOCK PERIOD 01/04/1990 TO 27/04/2000 - 2 - 2. FIRST WE TAKE UP THE ASSESSEES APPEAL I.E. IT (SS)A NO.34/AHD/2009 FOR THE BLOCK PERIOD FROM 01/04/1990 TO 27/04/2000. THE ASSESSEE HAS RAISED THE FOLLOWING COMMON GROUNDS OF APPEAL:- 1. THAT THE LEARNED CIT (APPEAL)-II SURAT HAS GRI EVOUSLY ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ASSESSMENT IS VALID WHEREAS IN THE ABSENCE OF RECORDING OF NECESSARY SATISFACTI ON AND ALSO ON LIMITATION THE ASSESSMENT FRAMED U/S.158BD OF THE INCOME-TAX ACT-1961 IS CLEARLY INVALID AND VOID AB INITIO. 2. THAT ON THE FACTS IT OUGHT TO HAVE BEEN HELD T HAT LEARNED ASSESSING OFFICER HAD NOT GIVEN SUFFICIENT OPPORTUN ITY NOR PROVIDED COPIES OF SEIZED MATERIALS NOR OPPORTUNIT Y OF CROSS EXAMINATION OF CONCERNED PERSONS AND HENCE ENTIRE A SSESSMENT IS INVALID. 3. THAT THE LEARNED CIT(A)-II HAD GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.2 25 750/- A S UNEXPLAINED INVESTMENT U/S.69 OF THE INCOME-TAX ACT-1961. 2.1. THE FACTS IN IT(SS)A NO.34/AHD/2009 ARE TAKE N UP AS LEAD CASE. BRIEFLY STATED FACTS OF THE CASE ARE THAT A SEARCH ACTION U/S.132 OF THE ACT WAS CONDUCTED IN THE CASE OF ONE SHRI SHASHIKANT V .TAMAKUWALA ON 27/04/2000. DURING THE COURSE OF SEARCH VARIOUS D OCUMENTS WERE FOUND IN RESPECT OF SALE OF PLOT. THE AO ISSUED NOTICE U /S.158BD R.W.S158BC OF THE ACT ON 29/03/2006 AND SERVED UPON THE ASSESS EE ON 20/04/2006 REQUIRING THE ASSESSEE TO FILE THE BLOCK RETURN OF INCOME WITHIN THIRTY DAYS OF THE SERVICE OF NOTICE. THE AO FRAMED ASSESSME NT U/S.158BD OF THE ACT ON 30/04/2008 THEREBY ADDITION OF RS.2 25 750/ - WAS MADE AS UNEXPLAINED INVESTMENT. AGAINST THIS THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A) WHO AFTER CONSIDERING THE SUBMISSION S DISMISSED THE ASSESSEES APPEAL. THE ASSESSEE HAS RAISED VARIOU S GROUNDS OF APPEAL IT(SS)A NOS.34 &35/AHD/2009 MR. ANEES FIROZ SARKAR& MR.IQBAL FIROZ SARKAR VS. ACIT BLOCK PERIOD 01/04/1990 TO 27/04/2000 - 3 - BEFORE THE LD.CIT(A) INCLUDING THE VALIDITY AND LEG ALITY OF THE ORDER PASSED U/S.158BD OF THE ACT. 3. THE LD.COUNSEL FOR THE ASSESSEE(S) SUBMITTED THA T THE ASSESSMENT ORDER IS NOT VALID AND THE SAME DESERVES TO BE QUAS HED. THE LD.COUNSEL FOR THE ASSESSEE MADE THREE-FOLD SUBMISSIONS; FIRST LY THAT THERE WAS NO VALID SATISFACTION RECORDED BY THE AO OF THE SEARCH ED PARTY SECONDLY NOTICE U/S.158BD OF THE ACT IS TIME-BARRED AND BEYO ND THE REASONABLE PERIOD AND THIRDLY NO REASONABLE OPPORTUNITY IS GR ANTED BY THE AUTHORITIES BELOW TO CROSS-EXAMINE SHRI SHASHIKANT V.TAMAKUWALA ON THE BASIS OF WHOSE STATEMENT THE IMPUGNED ADDITION HAS BEEN MADE . HE FURTHER SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE SPECIAL BENCH OF DELHI TRIBUNAL RENDERED IN THE CASE OF M ANOJ AGGARWAL VS. DCIT REPORTED AT (2008) 113 ITD 337 (DEL.)(SB) AS WELL AS THE JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT REND ERED IN THE CASE OF CHANDRAKANTBHAI AMRATLAL THAKKAR VS. DY.CIT & ANR. REPORTED AT (2011) 55 DTR 249 (GUJ.). HE SUBMITTED THAT ADMITTEDLY TH E AO OF THE SEARCHED PARTY HAD RECORDED SATISFACTION IN RESPECT OF M/S.S ARKAR PLYWOOD (P) LTD. HE SUBMITTED THAT ON THE BASIS OF THE SATISFACTION OF THE SEARCHED PARTY NOTICE U/S.158BD WAS ISSUED AND THE PROCEEDINGS WER E INITIATED BUT THOSE PROCEEDINGS WERE DROPPED BY THE CONCERNED AO AS M/S .SARKAR PLYWOOD (P) LTD. WAS NOT INCORPORATED AT THE RELEVANT TIME. HE SUBMITTED THAT THEREFORE THERE WAS NO SATISFACTION IN RESPECT OF T HE APPELLANT. IT WAS ONLY THE AO OF M/S.SARKAR PLYWOOD (P) LTD. WHO HAD INFOR MED TO THE AO OF THE APPELLANT THROUGH THE ADDITIONAL COMMISSIONER O F INCOME-TAX RANGE-2 SURAT. THEREFORE HE SUBMITTED THAT THE OR DER IS NOT VALID IN THE IT(SS)A NOS.34 &35/AHD/2009 MR. ANEES FIROZ SARKAR& MR.IQBAL FIROZ SARKAR VS. ACIT BLOCK PERIOD 01/04/1990 TO 27/04/2000 - 4 - ABSENCE OF THE VALID SATISFACTION. HE SUBMITTED TH AT SATISFACTION BY THE AO OF THE SEARCHED PARTY IS A SINE QUA NON FOR INI TIATING THE PROCEEDINGS U/S.158BD OF THE ACT. HE DREW OUR ATTENTION TOWARD S THE PAPER-BOOK AT PAGE-7 SUBMITTED BY THE REVENUE WHICH IS A LETTER D ATED 20/09/2005 OF THE AO OF M/S.SARKAR PLYWOOD (P) LTD. ADDRESSED TO THE ADDL.CIT RANGE-2 SURAT. THE LD.COUNSEL FOR THE ASSESSEE AL SO DREW OUR ATTENTION TOWARDS THE PAPER-BOOK AT PAGE-9 WHEREIN A LETTER DATED 31/07/2003 FROM THE ASST.CIT CIRCLE-4 SURAT ADDRESSED TO JT. CIT RANGE-4 SURAT IS ENCLOSED. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THIS IS THE LETTER OF THE AO OF THE SEARCHED PARTY WHO HAS STATED THAT A PLOT OF LAND IS PURCHASED IN THE NAME OF COMPANY AND REQUEST WAS MA DE TO DIRECT THE CONCERNED AO TO TAKE ACTION U/S.158BD OF THE ACT. HE SUBMITTED THAT THERE IS NOTHING ON RECORD SUGGESTING THAT THE AO O F THE SEARCHED PARTY HAS RECORDED SATISFACTION OF THE APPELLANT. THEREF ORE THE ACTION OF THE AO TO FRAME ASSESSMENT U/S.158BD OF THE ACT IN RESP ECT OF THE APPELLANT IS ILLEGAL AND BAD IN LAW. HE SUBMITTED THAT IN TH IS CASE SEARCH OPERATION WAS CARRIED OUT ON 27/04/2000 AND NOTICE WAS ISSUED U/S.158BD OF THE ACT ON 29/03/2006 AND SERVED UPON THE ASSESSEE ON 2 0/04/2006 NERELY AFTER SIX YEARS FROM THE DATE OF SEARCH. HE SUBMIT TED THAT ON THIS GROUND ALSO THE ACTION OF THE AUTHORITIES BELOW CANNOT BE SUSTAINED IN VIEW OF THE BINDING PRECEDENT OF THE SPECIAL BENCH OF HONB LE DELHI TRIBUNAL RENDERED IN THE CASE OF MANOJ AGGARWAL VS. DCIT RE PORTED AT (2008) 113 ITD 337 (DEL.)(SB) AS WELL AS THE JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF C HANDRAKANTBHAI AMRATLAL THAKKAR VS. DY.CIT & ANR. REPORTED AT (201 1) 55 DTR 249 (GUJ.). IN SUPPORT OF HIS ARGUMENT THAT WITHOUT R ECODING OF SATISFACTION IT(SS)A NOS.34 &35/AHD/2009 MR. ANEES FIROZ SARKAR& MR.IQBAL FIROZ SARKAR VS. ACIT BLOCK PERIOD 01/04/1990 TO 27/04/2000 - 5 - BY THE AO OF THE PERSON WITH RESPECT TO WHOM THE SE ARCH WAS MADE PRIOR TO HANDING OVER THE DOCUMENTS THE BASIC CONDITION O F PRECEDENT FOR INVOKING THE SECTION 158BD OF THE ACT QUA THE APPE LLANT IS NOT SATISFIED. THEREFORE THE PROCEEDING CONCLUDED U/S.158BD OF TH E ACT REQUIRES TO BE QUASHED. HE HAS ALSO RELIED ON THE DECISIONS OF TH E CO-ORDINATE BENCHES RENDERED IN THE CASE OF SHRI BHARATKUMAR C.RANKA VS . ACIT IN IT(SS)A NO.65/AHD/2008 DATED 05/12/2008 AND ALSO IN THE CA SE OF SHRI RAMESH AMBALAL VAGHASIA VS. ACIT IN IT(SS)A NO.80/AHD/2007 DATED 07/11/2008. THE LD.COUNSEL FOR THE ASSESSEE SUBMIT TED THAT EVEN OTHERWISE ALSO THE ASSESSMENT MADE U/S.158BD OF THE ACT CANNOT BE SUSTAINED IN VIEW OF THE FACT THAT THE ASSESSEE WAS NOT GRANTED OPPORTUNITY OF CROSS-EXAMINATION. HE SUBMITTED THA T THE RIGHT TO CROSS- EXAMINE IS A LEGAL RIGHT AND CANNOT BE DENIED. IN SUPPORT OF HIS CONTENTION HE RELIED UPON A DECISION OF HONBLE AP EX COURT IN THE CASE OF KISHINCHAND CHELLARAM VS. CIT REPORTED AT 125 IT R 713(SC) :: (1980) 4 TAXMAN 29 (SC). 3.1. ON THE CONTRARY LD.CIT-DR SUPPORTED THE ORDE RS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT ORIGINALLY THE SATISFACTI ON WAS RECORDED IN RESPECT OF M/S.SARKAR PLYWOOD (P) LTD. SINCE THE SA RKAR PLYWOOD (P) LTD. WAS PROMOTED BY THE APPELLANT ON FUTURE DATE A ND AT THAT POINT OF TIME THE LAND WAS PURCHASED IN THE NAME OF THE COMP ANY BUT SUCH COMPANY WAS NOT IN EXISTENCE THEREFORE THE CONCER NED AO REFERRED THIS MATTER TO THE AO OF THE APPELLANT. HE SUBMITTED TH AT ANY LAPSE WITH REGARD TO SATISFACTION IS ONLY PROCEDURAL AND CANNO T VITIATE THE ENTIRE PROCEEDINGS. HE FURTHER SUBMITTED THAT THERE IS NO LIMITATION PROVIDED IT(SS)A NOS.34 &35/AHD/2009 MR. ANEES FIROZ SARKAR& MR.IQBAL FIROZ SARKAR VS. ACIT BLOCK PERIOD 01/04/1990 TO 27/04/2000 - 6 - UNDER THE PROVISIONS OF THE ACT. THE FACTS IN THE PRESENT CASE ARE DISTINGUISHABLE FROM THE FACTS AS WERE IN THE DECIS ION OF SPECIAL BENCH OF DELHI TRIBUNAL RENDERED IN THE CASE OF MANOJ AGGARW AL VS. DCIT(SUPRA). HE FURTHER SUBMITTED THAT THERE IS NOTING ON RECORD TO SUGGEST THAT THE APPELLANT HAD SOUGHT FOR CROSS-EXAMINATION AND HE W AS DECLINED BY THE AUTHORITIES BELOW. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD.CIT(A) HAS DECIDED THIS ISSUE I N A CAUSAL MANNER WITHOUT REFERRING TO THE FACTS OF THE CASE. THE LD .CIT(A) HAS NOT GIVEN ANY FINDING ON THE SUBMISSION OF THE ASSESSEE THAT SATISFACTION WAS RECORDED BY THE AO OF THE SEARCHED PARTY IN RESPECT OF THE COMPANY BUT NOT IN RESPECT OF THE APPELLANT. THIS KIND OF CAS UAL APPROACH OF LD.CIT(A) IS HIGHLY DEPRECATED. HE OUGHT TO HAVE R EFER TO THE MATERIAL AVAILABLE ON RECORD. FROM THE RECORDS SUBMITTED BY THE REVENUE IT IS EVIDENT THAT INITIALLY THE SATISFACTION WAS RECORDE D BY THE AO OF THE SEARCHED PARTY IN RESPECT OF THE COMPANY NAMELY M /S.SARKAR PLYWOOD (P) LTD. THE PROCEEDINGS U/S.158BD R.W.S.158BC OF THE ACT WERE ISSUED AND DROPPED BY THE AO OF THE SAID COMPANY ON THE BA SIS THAT WHEN THE PLOT WAS PURCHASED THE COMPANY HAD NOT COME INTO E XISTENCE. THE AO OF THE COMPANY NAMELY M/S.SARKAR PLYWOOD (P) LTD. THROUGH HIS LETTER DATED 20/09/2005 ADDRESSED TO THE ADDL.CIT RANGE-2 SURAT REQUESTED THAT S/SHRI ANEES F.SARKAR & IQBAL F.SARKAR ARE ASS ESSED TO TAX IN RANGE- 2 SURAT AND IN VIEW OF THE FACTS MENTIONED IN PARA -3 OF HIS LETTER ALSO REQUESTED TO DIRECT THE ACIT CIR-2 SURAT TO TAKE NECESSARY ACTION IT(SS)A NOS.34 &35/AHD/2009 MR. ANEES FIROZ SARKAR& MR.IQBAL FIROZ SARKAR VS. ACIT BLOCK PERIOD 01/04/1990 TO 27/04/2000 - 7 - U/S.158BD R.W.S.158BC OF THE ACT IN THE CASE OF ABO VE NAMED ASSESSEES. THIS FACT IS NOT CONTROVERTED BY THE LD.CIT-DR. AS PER PROVISIONS OF SECTION 158BD OF THE ACT IT IS THE AO OF THE PERSO N WITH WHOM SEARCH WAS MADE U/S.132 HAS TO RECORD HIS SATISFACTION THA T ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON OTHER THAN THE PERSON WITH WHOM THE SEARCH WAS MADE U/S.132 OF THE ACT OR WHOSE BOOKS O F ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED UNDER SE CTION 132A THEN THE BOOKS OF ACCOUNT OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE AO HAVING JURISDICTION OVER S UCH OTHER PERSON AND THAT AO SHALL PROCEED U/S.158BC AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHALL APPLY ACCORDINGLY. THE LD.CIT(A) FAILED TO APPRECIATE THE FACT THAT COMPANY IS HAVING DISTI NCT ENTITY. WE FIND FORCE IN THE CONTENTION OF THE LD.COUNSEL FOR THE A SSESSEE THAT EVEN IF THE REVENUE WANTED TO PROCEED AGAINST THE APPELLANT TH E AO OF THE SEARCHED PARTY SHOULD HAVE RECORDED HIS STATEMENT. UNDISPUT EDLY THIS HAS NOT BEEN DONE. IN OUR CONSIDERED VIEW UNDER THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE THE SATISFACTION AS RECORDED BY T HE AO IS NOT VALID IN VIEW OF THE FACT THAT THE SATISFACTION HAS BEEN REC ORDED BY THE AO OTHER THAN THE AO OF THE SEARCHED PARTY. THEREFORE RATI O LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF C HANDRAKANTBHAI AMRATLAL THAKKAR VS. DY.CIT & ANR. REPORTED AT (201 1) 55 DTR 249 (GUJ.) WOULD APPLY. RESPECTFULLY FOLLOWING THE SAM E THE ASSESSMENT MADE IS REQUIRED TO BE QUASHED ON THIS BASIS ALONE. IT IS ALSO UNDISPUTED FACT THAT IN THIS CASE SEARCH WAS CONDUCTED ON 27/ 04/2000 AND NOTICE WAS ISSUED U/S.158BD OF THE ACT ON 29/03/2006 I.E. AFT ER A LAPSE OF NEARLY SIX YEARS. THE CONTENTION OF THE AR IS THAT STRANGELY LD.CIT(A) HAS NOT IT(SS)A NOS.34 &35/AHD/2009 MR. ANEES FIROZ SARKAR& MR.IQBAL FIROZ SARKAR VS. ACIT BLOCK PERIOD 01/04/1990 TO 27/04/2000 - 8 - FOLLOWED THE BINDING PRECEDENT OF THE SPECIAL BENCH RENDERED IN THE CASE OF MANOJ AGGARWAL VS. DCIT(SUPRA) ON THE BASIS THA T NO LIMITATION IS PROVIDED BY THE LEGISLATURE. THE LD.CIT(A) OUGHT T O HAVE APPRECIATED THAT THE INTENTION OF LEGISLATURE IS ALSO NOT THAT AND HAS NOT GIVEN LICENCE TO THE AO TO KEEP SITTING OVER THE MATER INDEFINITE LY. THE PROCEEDINGS ARE REQUIRED TO BE INITIATED WITHIN A REASONABLE TI ME EVEN IF THERE IS NO LIMITATION IS PROVIDED. AS PER SECTION 158BE(1) OF THE ACT THE ORDER U/S.158BC IS REQUIRED TO BE PASSED WITHIN 2 YEARS F ROM THE END OF MONTH IN WHICH THE LAST OF THE AUTHORIZATIONS FOR SEARCH UNDER SECTION 132 OR FROM REQUISITION UNDER SECTION 132A AS THE CASE MA Y BE WAS EXECUTED AND IN RESPECT OF ASSESSMENT MADE U/S.158BD OF THE ACT TWO YEARS FROM THE END OF THE MONTH IN WHICH THE NOTICE UNDER THIS CHAPTER WAS SERVED ON SUCH OTHER PERSON. IN RESPECT OF SEARCH INITIAT ED OR BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY OTHER ASSETS ARE REQUISIT IONED ON OR AFTER THE 1 ST DAY OF JANUARY 1997. HOWEVER THERE IS NO LIMITAT ION FOR ISSUING A NOTICE U/S.158BD IS PROVIDED UNDER THE ACT BUT THIS CANNO T BE CONSTRUED AS THE PROCEEDINGS CAN BE INITIATED EVEN AFTER LAPSE OF MA NY YEARS OR AFTER INDEFINITE PERIOD. THE HONBLE DELHI TRIBUNAL (SPE CIAL BENCH) IN THE CASE OF MANOJ AGGARWAL VS. DCIT(SUPRA) HAS DECIDED THIS ISSUE BY OBSERVING AS UNDER:- 116. A VIEW IS EXPRESSED THAT WHEREVER A TIME-LIMI T IS INTENDED THE PARLIAMENT HAS PROVIDED FOR THE SAME AND IN THE ABSENCE OF A SPECIFIC PROVISION MADE IN THIS RESPECT IT HAS TO B E ASSUMED THAT THERE IS NO TIME-LIMIT INTENDED IN LAW. IT HAS TO BE REMEMBERED THAT THE MATER RELATES TO FIXING HUGE FINANCIAL AND OTHER CIVIL LIABILITY ON THE PERSON AFFECTED AND IT HAS BEEN RE PEATEDLY HELD THAT THERE MUST BE A FINALITY TO ANY PROCEEDING UNDER TH E ACT AND THAT A CONCLUDED PROCEEDING CANNOT BE REOPENED AT THE WHIM AND FANCY IT(SS)A NOS.34 &35/AHD/2009 MR. ANEES FIROZ SARKAR& MR.IQBAL FIROZ SARKAR VS. ACIT BLOCK PERIOD 01/04/1990 TO 27/04/2000 - 9 - OF THE ASSESSING OFFICER WITHOUT THE DUE PROCESS OF LAW. STRICT INTERPRETATION OF FISCAL STATUES IS THE ORDER OF TH E DAY AND AS THE PROVISIONS FOR SEARCH ARE DRACONIAN IN NATURE SUCH PROVISIONS HAVE NECESSARILY TO BE STRICTLY CONSTRUED. IT WILL HAVE TO BE REMEMBERED THAT SECTION 158BD PROVIDES FOR INVOKING JURISDICTION UNDER THE SAID SECTION ENABLING THE ASSESSING OFFIC ER ASSESSING THE OTHER PERSON IN RESPECT OF WHOM THE ASSESSING OFFIC ER ASSESSING THE PERSON SEARCHED GIVES A FINDING THAT THE UNDISC LOSED INCOME UNEARTHED AS A RESULT OF SEARCH BELONGS TO THE SAID PERSON AND ONCE SUCH A FINDING IS GIVEN THE PROVISIONS OF SECT ION1 158BD COME INTO OPERATION. THIS THEREFORE INVOLVES ASS UMPTION OF JURISDICTION AND CANNOT BE CONSTRUCTED AS A PROCEDU RAL MATER. IN THE ABSENCE OF A FINDING IN THIS BEHALF THERE IS N O JURISDICTION TO THE OTHER ASSESSING OFFICER AT ALL TO PROCEED FURTH ER IN THE MATTER. AS THE TIME-LIMIT SET IN SECTION 158BE APPLES TO SU CH FINDING TI IS ONLY LOGICAL THAT THE SAID TIME-LIMIT AUTOMATICALLY APPLIES FOR INVOKING THE PROVISIONS OF SECTION 158BD AND IT IS FOR THIS REASON THAT THE PARLIAMENT DID NOT FIND IT NECESSARY TO SP ECIFY A SEPARATE TIME-LIMIT FOR THE SAME AS THE ENACTMENT ITSELF SH OWS THAT BOTH SECTIONS 158BC AND 158BD ARE INTER-LINKED INTERLAC ED AND INTER- WINDED AND BOTH FORM PART AND PARCEL OF THE SAME CH APTER. 4.1. RESPECTFULLY FOLLOWING THE AFORESAID DECISION THE ACTION OF THE AUTHORITIES BELOW CANNOT BE SUSTAINED ON THIS GROUN D AS WELL AND THE SAME IS HEREBY QUASHED. WE ALSO FIND FORCE IN THE CONTENTION OF LD.COUNSEL FOR THE ASSESSEE THAT REVENUE OUGHT TO H AVE GIVEN OPPORTUNITY OF CROSS-EXAMINATION SINCE THE CROSS-EXAMINATION IS A LEGAL RIGHT OF ANY PERSON AGAINST WHOM SOME MATERIAL IS BEING USED/COL LECTED FROM THE POSSESSION OF THE THIRD PARTY. THE HONBLE SUPREME COURT IN THE CASE OF KISHINCHAND CHELLARAM VS. CIT REPORTED AT 125 ITR 7 13(SC) :: (1980) 4 TAXMAN 29 (SC) HAS HELD AS UNDER:- 1. THE LETTERS DATED 14-2-1955 AND 9-3-1959 DID NOT CONSTITUTE ANY MATERIAL EVIDENCE WHICH THE TRIBUNAL COULD LEGI TIMATELY TAKE IT(SS)A NOS.34 &35/AHD/2009 MR. ANEES FIROZ SARKAR& MR.IQBAL FIROZ SARKAR VS. ACIT BLOCK PERIOD 01/04/1990 TO 27/04/2000 - 10 - INTO ACCOUNT FOR THE PURPOSE OF ARRIVING AT THE FIN DING THAT THE AMOUNT OF RS.1 07 350 WAS REMITTED BY THE ASSESSEE FROM ITS MADRAS OFFICE AND IF THESE TWO LETTERS WERE ELIMIN ATED FROM CONSIDERATION THERE WAS NO MATERIAL EVIDENCE AT AL L BEFORE THE TRIBUNAL WHICH COULD SUPPORT ITS FINDING. WHAT THE MANAGER OF THE BANK WROTE IN HIS LETTERS COULD NOT POSSIBLY BE BAS ED ON HIS PERSONAL KNOWLEDGE BUT WAS BASED ON HERE SAY. THE REVENUE AUTHORITIES OUGHT TO HAVE CALLED UPON THE MANAGER T O PRODUCE THE DOCUMENTS AND PAPERS ON THE BASIS OF WHICH HE MADE THE STATEMENT AND CONFRONTED THE ASSESSEE WITH THOSE DOCUMENTS AN D PAPERS. NO EXPLANATION HAS BEEN FURNISHED BY THE REVENUE AS TO WHAT HAPPENED WHEN THE MANAGER APPEARED IN OBEDIENCE TO THE SUMMONS AND WHAT STATEMENT HE MADE. 4.2. AFTER CONSIDERING ALL THE ASPECTS WE FIND MER ITS IN THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE AND THE GROUNDS RAISED BY THE ASSESSEE ARE HEREBY ALLOWED. 5. IN THE RESULT ASSESSEES APPEAL IN IT(SS)A NO.3 4/AHD/2009 FOR THE BLOCK PERIOD 01/04/1990 TO 27/04/2000 IS ALLOWED. 6. NOW WE TAKE UP THE ASSESSEES APPEAL (IN THE C ASE OF MR.IQBAL FIROZ SARKAR) I.E. IT(SS)A NO.35/AHD/2009 FOR BLOCK PERI OD 01/04/1990 TO 27/04/2000. THE ASSESSEE HAS RAISED THE FOLLOWIN G COMMON GROUNDS OF APPEAL:- 1. THAT THE LEARNED CIT (APPEAL)-II SURAT HAS GRI EVOUSLY ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ASSESSMENT IS VALID WHEREAS IN THE ABSENCE OF RECORDING OF NECESSARY SATISFACTI ON AND ALSO ON LIMITATION THE ASSESSMENT FRAMED U/S.158BD OF THE INCOME-TAX ACT-1961 IS CLEARLY INVALID AND VOID AB INITIO. 2. THAT ON THE FACTS IT OUGHT TO HAVE BEEN HELD T HAT LEARNED ASSESSING OFFICER HAD NOT GIVEN SUFFICIENT OPPORTUN ITY NOR PROVIDED COPIES OF SEIZED MATERIALS NOR OPPORTUNIT Y OF CROSS IT(SS)A NOS.34 &35/AHD/2009 MR. ANEES FIROZ SARKAR& MR.IQBAL FIROZ SARKAR VS. ACIT BLOCK PERIOD 01/04/1990 TO 27/04/2000 - 11 - EXAMINATION OF CONCERNED PERSONS AND HENCE ENTIRE A SSESSMENT IS INVALID. 3. THAT THE LEARNED CIT(A)-II HAD GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS.2 25 750/- A S UNEXPLAINED INVESTMENT U/S.69 OF THE INCOME-TAX ACT-1961. 7. SINCE THE FACTS AND CIRCUMSTANCES ARE SIMILAR TO TH E FACTS AND CIRCUMSTANCES OF ASSESSEES APPEAL (IN THE CASE OF MR.ANEES FIROZ SARKAR) IN IT(SS)A NO.34/AHD/2009 FOR BLOCK PERIOD 01/04/1990 TO 27/04/2000(SUPRA) FOLLOWING THE SAME REASONING WE HEREBY ALLOW THIS APPEAL OF THE ASSESSEE. 8. IN THE COMBINED RESULT APPEALS OF THE ASSESSEE S ARE ALLOWED. ORDER PRONOUNCED IN COURT ON THE DATE MENTIONED HE REINABOVE AT CAPTION PAGE SD/- SD/- ( .. ) (' #$) ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 25/10 /2013 3 .. .../ T.C. NAIR SR. PS 0 + ($4 54/$ 0 + ($4 54/$ 0 + ($4 54/$ 0 + ($4 54/$/ COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. ()&' / THE RESPONDENT. 3. !! $ '6 / CONCERNED CIT 4. '6() / THE CIT(A)-IV AHMEDABAD 5. 4 #7 ($ / DR ITAT AHMEDABAD 6. 789 :* / GUARD FILE. 0' 0' 0' 0' / BY ORDER )4$ ($ //TRUE COPY// ; ;; ;/ // / !< !< !< !< ( DY./ASSTT.REGISTRAR) / ITAT AHMEDABAD