Mr. Jaswant Rai,, New Delhi v. ACIT, New Delhi

ITSSA 9/DEL/2008 | misc
Pronouncement Date: 15-04-2010 | Result: Allowed

Appeal Details

RSA Number 920116 RSA 2008
Bench Delhi
Appeal Number ITSSA 9/DEL/2008
Duration Of Justice 2 year(s) 2 month(s) 24 day(s)
Appellant Mr. Jaswant Rai,, New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 15-04-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 15-04-2010
Date Of Final Hearing 15-04-2010
Next Hearing Date 15-04-2010
Assessment Year misc
Appeal Filed On 21-01-2008
Judgment Text
I.T.(SS)A. NO.09 /DEL/08 1/4 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER AND SHRI A.K. GARODIA ACCOUNTANT MEMBER I.T.(SS). A. NO.09 /DEL/2008 BLOCK PERIOD FROM 1.4.1990 TO 4.2.2001 SHRI JASWANT RAI ACIT N-94 PANCHSHEEL PARK CIRCLE-23 (1) NEW DELHI. V. NEW DELHI. APPELLANT) (RESPONDENT) PAN /GIR/NO.AEAPR-2849-Q APPELLANT BY : SHRI R.C. ROI C.A. RESPONDENT BY : SHRI B.K. GUPTA SR. DR. ORDER PER A.K. GARODIA AM: THIS IS AN ASSESSEE'S APPEAL DIRECTED AGAINST THE O RDER OF LD CIT(A)-XVII NEW DELHI DATED 7.11.2007 FOR BLOCK PERIOD FROM 1.4 .1990 TO 4.2.2001. 2. GROUND NO.1 OF THE APPEAL READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LD CIT(A) XVII GROSSLY ERRED IN UPHOLDING THE ORD ER OF LD ASSESSING OFFICER IN SPITE OF THE FACT THAT THE ORDER OF LD A SSESSING OFFICER IS AB INITIO VOID ILLEGAL AND UNTENABLE IN LAW DUE TO OF NON RE CORDING OF SATISFACTION BY LD ACITCC-9. 3. IT WAS SUBMITTED BY THE LD AR OF THE ASSESSEE TH AT THE PRESENT ASSESSMENT IS COMPLETED AFTER INVOKING THE PROVISI ONS OF SECTION 158 BD OF THE . I.T.(SS).A. NO.09/DEL/08 2/4 ACT. IT IS ALSO SUBMITTED THAT AS PER PROVISION OF SECTION 158 BD THE SATISFACTION HAS TO BE RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON. IT IS ALSO SUBMITTED THAT IN THE PRESENT CASE NO SUCH SATISFAC TION HAS BEEN RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON AND NOTICE U/S 158BD WAS ISSUED BY THE ASSESSING OFFICER OF THE PRESENT ASSESSEE ON TH E BASIS OF LETTER DATED 17.5.2004 ISSUED BY THE ASSESSING OFFICER OF THE SE ARCHED PERSON. IT IS ALSO SUBMITTED THAT THE SEARCH IN THE CASE OF USHA GROUP WAS CARRIED OUT IN THE MONTH OF FEBRUARY 2001 AND HENCE THE ASSESSMENT WAS TIME BARRED IN THAT CASE BY FEBRUARY 2003 AND HENCE EVEN IF THIS LETTER DATED 17.5.2004 IS CONSIDERED AS A SATISFACTION RECORDED BY THE ASSESSING OFFICER OF T HE SEARCHED PERSON IT IS AFTER THE COMPLETION OF BLOCK ASSESSMENT IN THE CASE OF SEARCHED PERSON AND AS PER THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL R ENDERED IN THE CASE OF MANOJ AGARWAL AS REPORTED IN 113 ITD 377 (SB) SATISFACTI ON HAS TO BE RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON BEFORE COM PLETION OF BLOCK ASSESSMENT IN THE CASE OF THE SEARCHED PERSON. IT IS ALSO SUB MITTED THAT FOR THESE REASONS THE PRESENT ASSESSMENT IS BAD IN LAW AND VOID AB IN ITIO AND THE SAME SHOULD BE QUASHED. 4. LD DR OF THE REVENUE SUBMITTED THAT THE DATE OF BLOCK ASSESSMENT IN THE CASE OF THE SEARCHED PERSON I.E. USHA GROUP IS NOT AVAILABLE AND HENCE IT IS NOT KNOWN AS TO WHETHER THE IMPUGNED LETTER DATED 17.5. 2004 IS BEFORE COMPLETION OF BLOCK ASSESSMENT IN THE CASE OF SEARCHED PERSON OR NOT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GON E THROUGH THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT IS STATED BY THE ASSESSING OFFICER OF THE SEARCHER PERSON IN HIS LETTER DATED 17.5.2004 THAT THE SEIZED DOCUMENTS WERE FOUND AND SEIZED ON 19.3.2001. AS PER THE PROVISION S OF SECTION 158 BE BLOCK ASSESSMENT HAS TO BE COMPLETED WITHIN TWO YEARS FR OM THE END OF THE MONTH IN WHICH LAST PANCHNAMA WAS MADE. IT MAY BE THAT THE S EARCH WHICH WAS INITIATED ON 14.2.2001 IN THE CASE OF USHA GROUP MIGHT HAVE B EEN COMPLETED AFTER A LAPSE OF SOME TIME BUT IT IS UNLIKELY THAT THE SAME MIGHT HAVE CONTINUED TILL MAY . I.T.(SS).A. NO.09/DEL/08 3/4 2002 I.E. FOR MORE THAN 14 MONTHS. HENCE WE FEEL T HAT EVEN IN THE ABSENCE OF THE ACTUAL DATE OF COMPLETION OF BLOCK ASSESSMENT IN THE CASE OF USHA GROUP I.E. THE SEARCHED PERSON IT CAN SAFELY BE HELD THAT THE IMPUGNED LETTER DATED 17.5.2004 WRITTEN BY THE ASSESSING OFFICER OF THE S EARCHED PERSON I.E. USHA GROUP IS AFTER THE COMPLETION OF BLOCK ASSESSMENT IN THAT CASE. IN THE CASE OF MANOJ AGARWAL (SUPRA) IT WAS HELD BY THE SPECIAL B ENCH THAT IF IN THE COURSE OF SECTION 158BC PROCEEDINGS THE ASSESSING OFFICER OF THE PERSON SEARCHED DOES NOT GIVE A FINDING THAT ANY PART OF UNDISCLOSED INC OME BELONGS TO A PERSON OTHER THAN THE PERSON SEARCHED SECTION 158 BD CAN NEVER BE INVOKED. IT WAS HELD THAT IF THERE IS A TIME LIMIT FOR PASSING THE BLOCK ASSE SSMENT ORDER U/S 158BC THERE IS AN IMPLIED TIME LIMIT FOR GIVING A FINDING AS TO TH E PERSON TO WHOM THE UNDISCLOSED INCOME BELONGS WHICH UNDER NO CIRCUMSTANCES CAN BE BEYOND TIME LIMIT SET OUT IN SECTION 158 BE OF THE ACT. IF THERE IS NO SUCH F INDING IS GIVEN IN THE ORDER U/S 158BC THE PROVISIONS OF SECTION 158BD STAND OUSTED AT THE EXPIRY OF THE SAID TIME LIMIT FOR THE REASON THAT SUCH A FINDING IS VE RY BASIS FOR INVOKING THE SECTION 158BD. IN THE PRESENT CASE THERE IS NO MATERIAL BR OUGHT ON RECORD BY THE AUTHORITIES BELOW THAT ANY SATISFACTION WAS RECORDE D BY THE ASSESSING OFFICER OF THE SEARCHED PERSON BEFORE COMPLETION OF BLOCK ASSE SSMENT IN THE CASE OF THE SEARCHED PERSON I.E. USHA GROUP. THE ONLY MATERIAL BROUGHT ON RECORD IS A LETTER DATED 17.5.2004 ISSUED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON TO THE ASSESSING OFFICER OF THE PRESENT ASSESSEE. THE SAM E APPEARS TO BE MUCH AFTER THE TIME LIMIT ALLOWED FOR COMPLETION OF BLOCK ASSE SSMENT IN THE CASE OF THE SEARCHED PERSON I.E. USHA GROUP AND HENCE THE CONDI TIONS SET OUT IN SECTION 158 BD ARE NOT COMPLIED WITH AS PER THIS DECISION OF TH E SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF MANOJ AGARWAL (SUP RA). RESPECTFULLY FOLLOWING THIS DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL WE QUASH THE IMPUGNED BLOCK ASSESSMENT ORDER FOR THE REASON THAT THE CONDITIONS PRECEDENT AS REQUIRED U/S 158BD WERE NOT COMPLIED WITH. HOWEVER WE WOULD LI KE TO OBSERVE THAT IN CASE IT IS FOUND THAT THE BLOCK ASSESSMENT IN THE CASE OF THE SEARCHED PERSON I.E. USHA GROUP WAS COMPLETED ON OR AFTER 17.5.2004 BEIN G THE DATE OF LETTER ISSUED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON TO THE ASSESSING OFFICER OF THE . I.T.(SS).A. NO.09/DEL/08 4/4 PRESENT ASSESSEE THE REVENUE IS AT LIBERTY TO MOVE A MISC. APPLICATION BEFORE THE TRIBUNAL FOR RECALL OF THE PRESENT ORDER AND THE TR IBUNAL SHOULD DECIDE THE MISC. APPLICATION OF THE REVENUE AS PER LAW IF SUCH MISC. APPLICATION IS MOVED BY THE REVENUE WITHIN THE PERIOD ALLOWED AS PER LAW. WITH THESE OBSERVATIONS WE ALLOW GROUND NO.1 OF THE ASSESSEE AND THE IMPUGNED BLOCK ASSESSMENT ORDER IS QUASHED FOR NON COMPLIANCE OF THE CONDITIONS PRECED ENT AS PRESCRIBED IN SECTION 158BD OF THE ACT. 6. SINCE WHILE DECIDING THE GROUND NO.1 OF THE ASSE SSEE WE HAVE QUASHED THE BLOCK ASSESSMENT ORDER NO ADJUDICATION IS CALL ED FOR WITH REGARD TO OTHER GROUNDS ON MERIT RAISED BY THE ASSESSEE 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE O F HEARING I.E. 15 TH APRIL 2010. SD/- SD/- (RAJPAL YADAV) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT.15.4.2010. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)- NEW DELHI. 5. THE DR ITAT LOKNAYAK BHAWAN KHAN MARKET NEW DELHI. TRUE COPY. BY ORDER (ITAT NEW DELHI).