Shri Narinder Singh Kohli, New Delhi v. DCIT, New Delhi

ITSSA 72/DEL/1998 | misc
Pronouncement Date: 30-07-2013 | Result: Allowed

Appeal Details

RSA Number 7220116 RSA 1998
Bench Delhi
Appeal Number ITSSA 72/DEL/1998
Duration Of Justice 15 year(s) 1 month(s) 20 day(s)
Appellant Shri Narinder Singh Kohli, New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 30-07-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 30-07-2013
Date Of Final Hearing 24-06-2013
Next Hearing Date 24-06-2013
Assessment Year misc
Appeal Filed On 10-06-1998
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : B : NEW DELHI BEFORE SHRI A.D. JAIN JUDICIAL MEMBER AND SHRI J.S. REDDY ACCOUNTANT MEMBER IT(SS)A NO.72/DEL/1998 BLOCK ASSESSMENT PERIOD ENDING ON 01.11.1996 SHRI NARINDER SINGH KOHLI 47 JOR BAGH NEW DELHI. VS. DCIT SPL. RANGE-23 NEW DELHI. ITA NO.73/DEL/1998 BLOCK ASSESSMENT PERIOD ENDING ON 01.11.1996 M/S SPEEDLINES PVT. LTD. 3-4 MALCHA MARG SHOPPING CENTRE NEW DELHI. VS. DCIT SPL. RANGE-23 NEW DELHI. ITA NO.76/DEL/1998 BLOCK ASSESSMENT PERIOD ENDING ON 01.11.1996 M/S SUNFLOWER ESTATES PVT. LTD. 3-4/48 MALCHA MARG SHOPPING CENTRE NEW DELHI. VS. DCIT SPL. RANGE-23 NEW DELHI. ITA NO.77/DEL/1998 BLOCK ASSESSMENT PERIOD ENDING ON 01.11.1996 MR. URVINDER SINGH KOHLI 227 JOR BAGH NEW DELHI. VS. DCIT SPL. RANGE-23 NEW DELHI. ITA NO.78/DEL/1998 BLOCK ASSESSMENT PERIOD ENDING ON 01.11.1996 MR. PARVINDER SINGH KOHLI 48 JOR BAGH NEW DELHI. DCIT SPL. RANGE-23 NEW DELHI. (APPELLANTS) (RESPONDENTS) IT(SS)A NOS.72 73 76 77 & 78/D/1998 2 ASSESSEE BY : SHRI C.S. AGGARWAL SR. ADVOCATE & SHRI RAVI PRATAP MALL ADVOCATE REVENUE BY : DR. SUDHA KUMARI CIT DR ORDER PER A.D. JAIN JUDICIAL MEMBER THESE ARE ASSESSEES APPEALS IN THE CASES OF FIVE ASSESSEES FOR THE BLOCK PERIOD FROM 01.04.1986 TO 01.11.1996. TH E FACTS ARE COMMON MUTATIS MUTANDIS SIMILAR IN ALL THESE CASES. T HEREFORE REFERENCE IS BEING MADE TO IT (SS) A NO.72/DEL/1998 FOR FACILITY. NUMEROUS GROUNDS HAVE BEEN RAISED. HOWEVER AT THE T IME OF ARGUMENT THE ISSUES CONTAINED IN GROUND NOS.2 AND 10 O NLY HAVE BEEN ADDRESSED AS THESE ISSUES ARE JURISDICTIONAL ISSUES AND NEED TO BE ADDRESSED FIRST. 2. AS PER GROUND NO.2 THE INITIATION OF PROCEEDINGS UNDER CHAPTER XIV-B OF THE IT ACT AND THE COMPLETION OF ASSESSMENT IN PURSUANCE THEREOF ARE WITHOUT JURISDICTION AS THE MANDATORY RE QUIREMENTS OF THE SAID CHAPTER HAVE NOT BEEN SATISFIED AND THE PRE-CONDI TIONS FOR MAKING A VALID ORDER OF ASSESSMENT DO NOT STAND FULFILLED. IN THIS REGARD IT HAS BEEN CONTENDED BEFORE US ON BEHALF OF THE ASSESSEE THAT THE ASSESSMENT FRAMED IS WITHOUT JURISDICTION SINCE NO NOTICE U/S 143 (2) OF THE ACT WAS ISSUED PRIOR TO THE FRAMING OF THE ASSESSME NT RENDERING THE ASSESSMENT ILLEGAL AS HELD IN ACIT & ANR. VS. HOTEL BLUE MOON 321 ITR 362 (SC). 3. THE LD. DR ON THE OTHER HAND HAS STRONGLY SUPPOR TED THE IMPUGNED ORDER IN THIS REGARD. 4. APROPOS THIS ISSUE IT IS SEEN THAT IN ALL THESE CASES TH E SEARCH WAS CONDUCTED ON 01.11.1996. HOWEVER UNDISPUTEDLY N O NOTICE U/S IT(SS)A NOS.72 73 76 77 & 78/D/1998 3 143 (2) OF THE ACT WAS ISSUED WHEREAS THE RESPECTIVE ASSE SSMENT ORDERS IN ALL THESE CASES WERE PASSED ON 22.05.1998 U/S 1 58BC OF THE ACT. NOW UNDER SIMILAR CIRCUMSTANCES THE HONBLE S UPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA) HAS HELD INTER ALIA THAT: SECTION 158 BC(B) PROVIDES FOR AN ENQUIRY AND ASSE SSMENT. THE SAID PROVISION READS THE ASSESSING OFFICER SHAL L PROCEED TO DETERMINE THE UNDISCLOSED INCOME OF THE BLOCK PERIOD I N THE MANNER LAID DOWN IN SECTION 158 BB AND THE PROVISION S OF SECTION 142 SUB-SECTION (2) AND (3) OF SECTION 143 SECTION 144 AND 145 SHALL SO FAR AS MAY BE APPLY. AN ANALYSI S OF THIS SUB SECTION INDICATES THAT AFTER THE RETURN IS FILED THIS CL AUSE ENABLES THE ASSESSING OFFICER TO COMPLETE THE ASSESS MENT BY FOLLOWING THE PROCEDURE LIKE ISSUE OF NOTICE UNDER SE CTIONS 143(2)/142 AND COMPLETE THE ASSESSMENT UNDER SECTION 1 43(3). THIS SECTION DOES NOT PROVIDE FOR ACCEPTING THE RETURN AS PROVIDED UNDER SECTION 143(I)(A). THE ASSESSING OFFICER HAS TO COMPLETE THE ASSESSMENT UNDER SECTION 143(3) ONLY. IN CASE OF DEFAULT IN NOT FILING THE RETURN OR NOT COMPLYING WITH THE NOTICE UNDER SECTIONS 143(2)/142 THE ASSESSING OFFICE R IS AUTHORIZED TO COMPLETE THE ASSESSMENT EX-PARTE UNDER SECTI ON 144. CLAUSE (B) OF SECTION 158 BC BY REFERRING TO S ECTIONS 143(2) AND (3) WOULD APPEAR TO IMPLY THAT THE PROVISI ONS OF SECTION 143(1) ARE EXCLUDED BUT SECTION 143(2) ITSELF BECOMES NECESSARY ONLY WHERE IT BECOMES NECESSARY TO CHECK THE RETURN SO THAT WHERE BLOCK RETURN CONFORMS TO THE UNDISCLOSED INCOME INFERRED BY THE AUTHORITI ES THERE IS NO REASON WHY THE AUTHORITIES SHOULD ISSUE A NOTICE UNDER SECTION 143(2). HOWEVER IF AN ASSESSMENT IS TO BE COMPLETED UNDER SECTION 143(3) READ WITH S ECTION 158- BC NOTICE UNDER SECTION 143(2) SHOULD BE ISSU ED WITHIN ONE YEAR FROM THE DATE OF FILING OF BLOCK RETURN. OMISSION ON THE PART OF THE ASSESSING AUTHORITY TO ISSUE NOTICE UNDER SECTIO N 143(2) CANNOT BE A PROCEDURAL IRREGULARITY AND THE SAME IS NOT CURABLE AND THEREFORE THE REQUIREMENT OF NOTICE UND ER SECTION 143(2) CANNOT BE DISPENSED WITH. THE OTH ER IMPORTANT FEATURE THAT REQUIRES TO BE NOTICED IS THAT THE SECTION 158 BC(B) SPECIFICALLY REFERS TO SOME OF THE PROVISIONS OF THE A CT WHICH ARE REQUIRED TO BE FOLLOWED BY THE ASSESSING OFFICER WHILE COMPLETING THE BLOCK ASSESSMENTS UNDER CHAP TER XIV-B. THIS LEGISLATION IS BY INCORPORATION. THIS S ECTION EVEN SPEAKS OF SUB-SECTIONS WHICH ARE TO BE FOLLOWED BY THE ASSESSING OFFICER. HAD THE INTENTION OF THE LEGISLATURE BEEN TO E XCLUDE THE PROVISIONS OF CHAPTER XIV THE LEGISLATURE WOULD HAVE OR COULD HAVE INDICATED THAT ALSO. A READING OF THE P ROVISION WOULD CLEARLY INDICATE THAT IF THE ASSESSING OFFI CER FOR ANY REASON REPUDIATES THE RETURN FILED BY THE ASSESSEE IN RESPONSE IT(SS)A NOS.72 73 76 77 & 78/D/1998 4 TO NOTICE UNDER SECTION 158 BC(A) HE MUST NECESSARILY ISSUE NOTICE UNDER SECTION 143(2) WITHIN THE TIME PRESCRIBED IN THE PROVISO TO SECTION 143(2). WHER E THE LEGISLATURE INTENDED TO EXCLUDE CERTAIN PROVISIONS FR OM THE AMBIT OF SECTION 158 BC(B) IT HAS DONE SO SPECI FICALLY. THUS WHEN SECTION 158 BC(B) SPECIFICALLY REFERS TO APPLICABILITY OF THE PROVISION PROVISO THERETO CANNOT BE E XCLUDED. THE CLARIFICATION GIVEN BY CBDT IN ITS CIRCULAR NO.717 D ATED 14.8.1995 HAS A BINDING EFFECT ON THE DEPARTMENT BUT NOT ON THE COURT. THIS CIRCULAR CLARIFIES THE REQUIREMENT OF LAW IN RESPECT OF SERVICE OF NOTICE UNDER SUB-SECTIO N (2) OF SECTION 143. ACCORDINGLY EVEN FOR THE PURPOSE OF CHAPTER XIV-B FOR THE DETERMINATION OF UNDISCLOSED INCOME FOR A BLOCK PERIOD UNDER THE PROVISIONS OF SECTION 158 BC THE PROVISIONS OF SECTION 142 AND SUB-SECTIONS (2) AND (3) OF SECTION 143 ARE APPLICABLE AND NO ASSESSMENT COU LD BE MADE WITHOUT ISSUING NOTICE UNDER SECTION 143(2). 5. THUS IT HAS BEEN EFFECTIVELY HELD BY THE HONBLE SUPREME COURT UNDER SIMILAR CIRCUMSTANCES THAT WHERE THE ASSESSING OFF ICER REPUDIATES THE RETURN FILED U/S 158BC (A) AND PROCEED S TO MAKE AN INQUIRY HE HAS NECESSARILY TO FOLLOW THE PROVISIONS OF SECTIONS 142 143(2) AND 143 (3) OF THE ACT. THAT BEING SO IN TH E PRESENT CASES WHERE ADMITTEDLY NO NOTICE U/S 143 (2) OF THE ACT W AS ISSUED BY THE ASSESSING OFFICER PRIOR TO THE FRAMING OF THE ASSESSMENT U/ S 158BC OF THE ACT THE ASSESSEES ARE RIGHT IN CONTENDING THAT THE ASSESSMENT FRAMED WAS WITHOUT JURISDICTION. RESPECTFULLY FOLLOW ING HOTEL BLUE MOON (SUPRA) WE HOLD ACCORDINGLY AND QUASH THE ASSESSM ENTS IN ALL THESE FIVE CASES AS ILLEGAL HAVING BEEN FRAMED WITHOUT JURISDICTION. 6. FOR THE ABOVE REASON THE ASSESSMENTS IN ALL THESE CASE S STAND NULLIFIED AND NOTHING SURVIVES FOR ADJUDICATION. IT IS FOR THIS REASON THAT THE MERITS OF THESE CASES ON OUR ASKING WERE NOT ARGUE D BY THE PARTIES. THIS ISSUE OF JURISDICTION GOING TO THE ROOT O F THE MATTER EVEN THE ISSUE OF LIMITATION IS NOT BEING ADDRESSED THOUGH A RGUMENTS WITH REGARD THERETO WERE DULY PUT FORTH BY THE PARTIES BE FORE US. IT(SS)A NOS.72 73 76 77 & 78/D/1998 5 7. IN THE RESULT ALL THE APPEALS FILED BY THE ASSESSEES A RE ALLOWED AS INDICATED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.07.20 13. SD/- SD/- [J.S. REDDY] [A.D. JAIN] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 30.07.2013. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR ITAT DELHI BENCHES