Shri Bipinchandra Chimanlal Doshi, Himatnagar v. The Dy.CIT.,S.K. Circle,, Himatnagar

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA J.M. & HONBLE SH RI N. S. SAINI A.M.) I.T.(SS)A. NO. 37/AHD./2008 ASSESSMENT YEAR : BLOCK PERIOD 1.4.1986 TO 31.3.199 6 & 1.4.1996 TO 1.8.1996 BIPINCHANDRA CHIMANLAL DOSHI HIMATNAGAR -VS.- DEP UTY COMMISSIONER OF INCOME TAX (PAN : AAZPO 3602 L) CIRCLE-1(1) GANDHIN AGAR (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.C. THAKER RESPONDENT BY : SMT. CHHAVI ANUPAM CIT D.R. O R D E R PER SHRI T.K. SHARMA JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 27.12.2007 OF LEARNED DEPUTY COMMISSIONER OF INCOME TAX SABARKANTHA CIRCLE HIM ATNAGAR UNDER SECTION 158BC READ WITH SECTION 158BD AND 143(3) OF THE INCOME TAX ACT 196 1 FOR THE BLOCK ASSESSMENT PERIOD 1.4.1986 TO 31.3.1996 & 1.4.1996 TO 1.8.1996. 2. VARIOUS GROUNDS RAISED BY THE ASSESSEE IN HIS AP PEAL READ AS UNDER :- (1) THE LD. ASSESSING OFFICER HAS GRIEVOUSLY ERRED IN LAW IN MAKING FRESH ASSESSMENT U/S. 158BC OF THE ACT ON 27.12.200 7 IN PURSUANCE OF THE HON'BLE ITATS ORDER DATED 17.11.2006 IGNORING THE FACT THAT THE SAID ORDER STOOD RECALLED BY THE ORDER DATED 30.08. 2007 PASSED BY THE HON'BLE ITAT ALLOWING THE MISC. APPLICATION FILED B Y THE ASSESSEE. THE ORDER SO MADE IS WITHOUT JURISDICTION VOID-AB-INIT IO AND MAY THEREFORE BE ANNULLED. (2) THE LD. ASSESSING OFFICER HAS FURTHER ERRED IN LAW IN MAKING THE FRESH ASSESSMENT. WHEN THE ORIGINAL ASSESSMENT WAS MADE WITHOUT JURISDICTION AND WAS ALSO BARRED BY LIMITATION. (3) THE LD. ASSESSING OFFICER HAS FURTHER ERRED IN LAW IN REPEATING ADDITIONS WHICH WERE NOT APPROVED BY THE COMPETENT AUTHORITY AT THE APPROPRIATE TIME. (4) THE LD. ASSESSING OFFICER HAS ALSO ERRED IN IGN ORING THE EVIDENCE BROUGHT ON RECORD BY THE DEPARTMENT BY RECORDING ST ATEMENTS U/S. 131 2 IT(SS)A NO. 37/AHD/2 008 ON OATH OF THE CONCERNED FARMERS AVAILABLE ON RECO RD IN THE ORIGINAL ASSESSMENT PROCEEDINGS. (5) THE LD. ASSESSING OFFICER HAS ALSO ERRED IN COM PUTING UNDISCLOSED INCOME AT RS.68 67 243/-. (6) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. ASSESSING OFFICER OUGHT TO HAVE DROPPED THE PROCEED INGS OUGHT NOT HAVE MADE THE ASSESSMENT AND OUGHT NOT HAVE COMPUTE D THE UNDISCLOSED INCOME AT RS.68 67 243/-. (7) IT IS THEREFORE PRAYED THAT THE ASSESSMENT BE ING WITHOUT JURISDICTION AND VOID-AB-INITIO MAY KINDLY BE ANNU LLED AND THE UNDISCLOSED INCOME COMPUTED AT RS.68 67 243/- MAY B E DELETED. 3. AT THE TIME OF HEARING BEFORE US ON BEHALF OF A SSESSEE SHRI K.C. THAKER APPEARED AND EXPLAINED THAT TRIBUNAL VIDE ITS EARLIER ORDER DATE D 17.11.2008 IN IT(SS)A. NO. 18/A/2000 RESTORED THE MATTER TO THE FILE OF ASSESSING OFFICE R TO MAKE ASSESSMENT DE-NOVO. SUBSEQUENTLY ON AN MISCELLANEOUS APPLICATION OF THE ASSESSEE TH E SAID ORDER OF TRIBUNAL DATED 17.11.2008 WAS RECALLED IN M.A. NO. 34/AHD/2007 DATED 30.08.20 07. THEREAFTER THE ASSESSING OFFICER REFRAMED THE ASSESSMENT UNDER SECTION 158BC READ WI TH SECTION 158BD AND 143(3) OF THE INCOME TAX ACT ON 27.12.2007 AT A TOTAL INCOME OF R S.68 67 243/- AS UNDER :- DISCLOSED INCOME FOR THE BLOCK PERIOD (AS PER RETURNS) RS.6 46 297/- ADD. UNDISCLOSED INCOME U/S. 69 (AS UNEXPLAINED INVESTMENT)- 1 PEAK AMOUNT AS PER PASSBOOK A-3/1 2. PEAK AMOUNT OF DEPOSITS APPEARING IN DIARY OF L.T. SEIZED BY FERA 3. INTEREST CALCULATED ON DEPOSITS RS.45 00 000/- RS.19 65 000/- RS. 3 40 416/- TOTAL RS.74 51 713/- LESS: DEDUCTION AS PER PROOF OF SECTION U/S. 158BB(1)(A) RS. 5 84 470/- TOTAL UNDISCLOSED INCOME RS.68 67 243/- 3 IT(SS)A NO. 37/AHD/2 008 4. THE LD. COUNSEL OF THE ASSESSEE CONTENDED THAT T HE AFORESAID ASSESSMENT IS MADE BY THE A.O. ON 27.12.2007 IN PURSUANCE OF ITAT ORDER DATED 17.11.2006 IGNORING THE FACT THAT THE SAID ORDER WAS RECALLED BY TRIBUNAL VIDE ORDER DATED 30. 08.2007 ALLOWING THE MISCELLANEOUS APPLICATION OF THE ASSESSEE. THE FRESH ASSESSMENT O RDER IS WITHOUT JURISDICTION. IN ANY CASE ITAT VIDE ORDER DATED 15.05.2009 FOLLOWING THE DECI SION OF ITAT SPECIAL BENCH DELHI IN THE CASE OF MANOJ AGARWAL VS.- DCIT REPORTED IN (2008) 113 ITD 377[(DEL.) SPECIAL BENCH] CANCELLED THE ORIGINAL ASSESSMENT FRAMED UNDER SECT ION 158BC READ WITH SECTION 158BD & 143(3) OF THE INCOME TAX ACT ON 27.12.2007. THEREFO RE THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT SINCE THE ORIGINAL ASSESSMENT IS CAN CELLED A FRESH ASSESSMENT IN PURSUANCE OF ITAT ORDER DATED 17.11.2006 SHOULD ALSO BE CANCELLE D. 5. ON THE OTHER HAND SMT. CHHUNI ANUPAM LD. DEPAR TMENTAL REPRESENTATIVE VEHEMENTLY OBJECTED TO THE AFORESAID SUBMISSIONS MADE BY THE L D. COUNSEL OF THE ASSESSEE ON THE FOLLOWING GROUNDS :- (I) THE DECISION OF ITAT DELHI SPECIAL BENCH IN TH E CASE OF MANOJ AGRAWAL (SUPRA) IS NOT APPLICABLE TO THE FACTS OF ASSESSEE S CASE BECAUSE IN THIS CASE THE ASSESSEE HAS HIMSELF FILED THE RETURN OF INCOME FOR THE BLOCK PERIOD ADMITTING UNDISCLOSED INCOME OF RS.6 46 297/- AND PAID THE TA X THEREON. (II) THE TRIBUNAL VIDE ITS EARLIER ORDER DATED 17.1 1.2006 RESTORED THE MATTER TO THE FILE OF ASSESSING OFFICER TO MAKE ASSESSMENT DE NOV O AFTER CONSIDERING EVIDENCE PRODUCED AND TO BE PRODUCED BY THE ASSESSEE. THEREF ORE IT WAS UPON TO THE ASSESSEE TO TAKE OBJECTION WHICH HE TOOK IN THE MIS CELLANEOUS APPLICATION. (III) SHE DREW OUR ATTENTION TO THE OBSERVATION OF A.O. ON PAGE 9 OF THE ORDER UNDER SECTION 158BC READ WITH SECTION 158BD AND 143 (3) DATED 27.12.2007 (FRESH ORDER PASSED IN PURSUANCE OF ITAT ORDER DATE D 17.11.2006) WHEREIN THE ASSESSING OFFICER OBSERVED AS UNDER :- SO JURISDICTION IS CHALLENGED BY THE ASSESSEE IS O NLY FOR MISGUIDING TO THE HON'BLE ITAT. WHEN THERE ARE SUFF ICIENT EVIDENCE ON RECORDS AND ALSO ASSESSEE HIMSELF AGREE D AND GIVEN STATEMENT REGARDING CASH DEPOSITS AND PARI L.T. SHR OFF THERE IS 4 IT(SS)A NO. 37/AHD/2 008 NO NEED FOR SATISFACTION NOTE TO BE APPROVED. ASSES SEE WAS GIVEN SUFFICIENT TIME TO PRODUCE THE DETAILS. DURING THE ASSESSMENT PROCEEDINGS ASSESSEE COULD TAKE OBJECTION FOR JURI SDICTION AND ALSO ASSESSEE COULD ASK FOR SATISFACTION NOTE REGAR DING ACTION U/S. 158BD AT THE TIME OF ASSESSMENT PROCEEDINGS. (IV) TRIBUNAL RECALLED ITS ORDER ONLY FOR THE PURPO SE OF DECIDING GROUNDS NO. 1 & 2 CHALLENGING THE VALIDITY OF BLOCK ASSESSMENT. IN THE MISCELLANEOUS APPLICATION THE ASSESSEE WAS NOT HAVING ANY GRIEVANCE REGARDING SETTING ASIDE OF THE ASSESSMENT. 6. ON THE BASIS OF ABOVE SHE POINTED OUT THAT FOR THE BLOCK PERIOD 1.4.1986 TO 31.3.1996 & 1.4.1996 TO 1.8.1996 THE ASSESSEE HIMSELF FILED THE RETURN OF INCOME DECLARING UNDISCLOSED INCOME OF RS.6 46 297/- AND PAID THE TAX THEREON. I N THE MISCELLANEOUS APPLICATION ONLY GRIEVANCE OF ASSESSEE WAS THAT GROUNDS NO. 1 & 2 CH ALLENGING THE VALIDITY OF BLOCK ASSESSMENT WERE NOT ADJUDICATED. THEREFORE THE ASSESSEE WAS N OT HAVING ANY GRIEVANCE REGARDING SETTING ASIDE OF THE ASSESSMENT AND ASSESSING OFFICER WAS H AVING NO OPTION BUT TO FRAME THE ASSESSMENT IN PURSUANCE OF DIRECTION OF LEARNED COMMISSIONER O F INCOME TAX(APPEALS). SHE POINTED OUT THAT WHEN ONCE THE BLOCK ASSESSMENT FOR THE PERIOD 1.4.1986 TO 31.3.1996 & 1.4.1996 TO 1.8.1996 IS SET ASIDE BY THE TRIBUNAL THE ASSESSEE SHOULD N OT HAVE ANY GRIEVANCE. THE GROUND RELATING TO JURISDICTION COULD HAVE BEEN TAKEN BEFORE THE ASSES SING OFFICER. SHE FURTHER POINTED OUT THAT TRIBUNAL RECALLED ITS EARLIER ORDER DATED 17.11.200 6 FOR THE PURPOSE OF DECIDING GROUNDS NO. 1 & 2 CHALLENGING THE VALIDITY OF BLOCK ASSESSMENT ON M ERIT AND NOT THE ENTIRE ASSESSMENT. THEREFORE THE ASSESSING OFFICER WAS HAVING NO OPTION BUT TO F RAME THE ASSESSMENT IN PURSUANCE OF EARLIER ORDER OF ITAT DATED 17.11.2008. 7. IN HIS REJOINDER THE LD. COUNSEL OF THE ASSESSE E SUBMITTED THAT IF THE DEPARTMENT WAS HAVING ANY GRIEVANCE AGAINST THE ORDER DATED 30.08. 2007 OF THE TRIBUNAL RECALLING ITS ORDER DATED 17.11.2006 OR AGAINST THE DECISION OF THE TRIBUNAL DATED 15.05.2009 CANCELLING THE ORIGINAL ASSESSMENT IN THAT EVENT REVENUE COULD HAVE FILED THE APPEAL AGAINST THOSE ORDERS AS PROVIDED IN SECTION 260A OF INCOME TAX ACT. SINCE NOW THE ORIGI NAL ASSESSMENT HAS BEEN QUASHED BY THE TRIBUNAL VIDE ORDER DATED 15.05.2009 THEREFORE AS SESSMENT NOW FRAMED BY THE ASSESSING OFFICER IN PURSUANCE OF DIRECTION OF THE TRIBUNAL C ANNOT SURVIVE AND SAME BE CANCELLED. 5 IT(SS)A NO. 37/AHD/2 008 8. HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. A SEARCH AND SEIZURE OPERATIONS WERE CARRIED FOR VARIOUS RESIDENCE AND BUSINESS PREMISES OF L.T. SHROFF GROUP AND CERTAIN CONNECTED PERSONS ON 1.8.1996. DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS CARRIED OUT SIMULTANEOUSLY AT VA RIOUS PREMISES VARIOUS PASSBOOKS ISSUED BY AND BEHALF OF L.T. SHROFF GROUP CONTAINING THE DETA ILS OF DEPOSITS MADE BY VARIOUS PERSONS WERE SEIZED. BESIDES THIS SOME OF THE PASSBOOKS WERE SE IZED FROM THE POSSESSION OF VARIOUS PERSONS WHO CAME TO THE RESPECTIVE OFFICES OF L.T. SHROFF G ROUP FOR DEPOSITING OR WITHDRAWING THE MONEY AND WERE CARRYING THE PASSBOOKS FOR THAT PURP OSE. DURING THE COURSE OF SEARCH IN THE CASE OF L.T. SHROFF GROUP CARRIED OUT ON 1.8.96 AT THEIR BOMBAY OFFICE IN ZAVERI BAZAR A PASS BOOK MARKED AS ANN. A-3/1 TO THE PANCHNAMA WAS SEIZED FR OM THE POSSESSION OF SHRI MANOJ KANAIYALAL GOUR. THE STATEMENT OF SHRI GOUR WAS REC ORDED U/S. 131 ON OATH ON 1.8.96. IN HIS STATEMENT HE CLARIFIED THAT THE SAID PASSBOOK CONTA INING DETAILS OF CASH TRANSACTIONS IN CODED MANNER (IN THOUSANDS) BELONGS TO HIS EMPLOYER NAMEL Y SHRI BIPINCHANDRA C. DOSHI. SUBSEQUENTLY THE STATEMENT OF SHRI BIPINCHANDRA C. DOSHI WAS ALSO RECORDED ON OATH ON 12.8.96 IN WHICH HE ACCEPTED THAT THE SAID PASSBOOK BELONGS TO HIM AND ALL THE TRANSACTIONS WERE MADE ON HIS BEHALF IN CASH AND ENTRIES ARE MADE IN CODED FO RM. ON THIS BASIS THE A.O. EARLIER MADE THE ASSESSMENT UNDER SECTION 158BC READ WITH SECTION 15 8BD AND 143(3) ON 29.02.2000 AT A TOTAL INCOME OF RS.68 67 243/-. ON APPEAL BY THE ASSESSEE TRIBUNAL VIDE ORDER DATED 30.08.2007 SET ASIDE THE SAID ASSESSMENT. SUBSEQUENTLY THE SAID OR DER WAS RECALLED AND THE ASSESSING OFFICER IN PURSUANCE OF THE DIRECTION OF THE TRIBUNAL FRAMED T HE FRESH ASSESSMENT ON 27.12.2007 AT A TOTAL UNDISCLOSED INCOME OF RS.68 67 243/-. HOWEVER SUBS EQUENTLY THE TRIBUNAL VIDE ORDER DATED 15.05.2009 FOLLOWING THE DECISION OF ITAT SPECIAL BENCH DELHI IN THE CASE OF MANOJ AGRAWAL (SUPRA) CANCELLED THE ORIGINAL ASSESSMENT FRAMED BY ASSESSING OFFICER ON 22.02.2000 UNDER SECTION 158BC READ WITH SECTION 158BD AND 143(3). T HE A.O. PASSED THE IMPUGNED FRESH ASSESSMENT ORDER ON 27.12.2007 WHEREAS TRIBUNAL RE- CALLED ITS EARLIER ORDER ON 31.08.2007. FRESH ASSESSMENT WAS MADE AFTER TRIBUNAL RE-CALLED ITS EA RLIER ORDER. IN THIS VIEW OF THE MATTER FRESH ASSESSMENT FRAMED BY THE ASSESSING OFFICER CANNOT S URVIVE AND THE SAME IS HEREBY CANCELLED. 9. BEFORE PARTING WITH REGARD TO PLEA OF LD. DEPAR TMENTAL REPRESENTATIVE THAT ASSESSMENT CANNOT BE CANCELLED BECAUSE THE ASSESSEE HIMSELF FI LED THE RETURN OF INCOME FOR THE BLOCK PERIOD 1.4.1986 TO 31.3.1996 & 1.4.1996 TO 1.8.1996 DECLAR ING UNDISCLOSED INCOME OF RS.6 46 297/- AND 6 IT(SS)A NO. 37/AHD/2 008 PAID THE TAX THEREON. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS.- SHELLY PRODUCTS [2003] 261 ITR 367 (SC) HELD THAT WHEN AN ASSESSMENT ORDE R IS SET ASIDE OR ANNULLED AND NO FURTHER ASSESSMENT CAN BE MADE THE ASSESSEE WOULD BE ENTIT LED ONLY TO AMOUNT OF TAX PAID CONSEQUENT TO FINAL ASSESSMENT AND NOT THE TAX PAID BY HIM BY WA Y OF ADVANCE TAX OR SELF ASSESSMENT TAX. IN THIS VIEW OF THE MATTER THE SELF-ASSESSMENT TAX IF ANY IS PAID BY THE ASSESSEE ON THE RETURN FILED BY HIM FOR THE BLOCK PERIOD CANNOT BE REFUNDED. TH EREFORE WHATEVER TAXES ARE PAID BY THE ASSESSEE AS PER RETURNED UNDISCLOSED INCOME IN OUR OPINION THOSE CANNOT BE REFUNDED. FURTHER IN CASE THE DEPARTMENT IS AGGRIEVED BY THE ORDER O F TRIBUNAL IN MISCELLANEOUS APPLICATION RECALLING THE ENTIRE ORDER AND THEREAFTER CANCELLIN G THE ASSESSMENT IN OUR OPINION THOSE ORDERS ARE SEPARATELY APPEALABLE BECAUSE TRIBUNAL IN THE PRESENT APPEAL HAS NO POWER TO REVIEW THOSE ORDERS. 10. IN THE RESULT FOR STATISTICAL PURPOSES THE AP PEAL OF THE ASSESSEE IS TREATED AS ALLOWED SUBJECT TO OUR OBSERVATION CONTAINED IN PARA 9 (SUP RA). THE ORDER WAS PRONOUNCED IN THE COURT ON 30.04.2010 . SD/- SD/- (N.S. SAINI) (T.K. SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30/ 04 /2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R. ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT AHMEDABAD LAHA/SR.P.S.