TaxTMI 
TaxTMI 
2008 (4) TMI 395
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....inst the aforesaid block assessment made on 30th Sept., 1997. The said block assessment dt. 30th Sept., 1997 was set aside by the Tribunal, Pune Bench, Pune, vide order dt. 5th March, 2003 in IT(SS)A No. 131/Pn/1997 [reported as Prakash Bhalaji Bafna vs. Asstt. CIT (2004) 82 TTJ (Pune) 667-Ed.]. The AO has stated that the Hon'ble Tribunal has set aside the assessment with a direction to pass fresh assessment order in accordance with the provisions of law after providing adequate reasonable opportunity of being heard to the assessee. Fresh assessment has been made by the AO on 25th Feb., 2005, which according to the assessee, is beyond time-limit provided under s. 153(2A) of the Act, inasmuch as the order of the Tribunal, dt. 5th March, 2003, was sent by registered post to the then CIT-IV, Pune, on 24th March, 2003 which was served upon the CIT-IV, Pune, by 31st March, 2003 in the normal course and as such the concerned assessment should have been completed by the AO before 31st March, 2004 as provided under s. 153(2A) of the Act. In support of the contentions advanced by the learned counsel for the assessee, reliance was placed on the decision of Tribunal, Delhi 'A' Bench, in the c....
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.... 1996. The assessee had filed a return of income for the block period in Form No. 2B on 30th Dec., 1996. In the block return, the assessee declared undisclosed income at Rs. nil. After examining the facts of the case and after hearing the assessee, the AO prepared a draft block assessment order on 25th Sept., 1997, by determining the total undisclosed income at Rs. 40,44,250, a copy of which was forwarded by the AO to the assessee vide letter No. PN.AC.Cir.3(3)/1997-98 dt. 25th Sept., 1997 with an intimation to the assessee that the assessee may seek an opportunity of being heard before Hon'ble CIT, Prapikar Sadan, 60/61 Erandawane, Karve Road, Pune-411004, at 11.30 a.m. on 26th Sept., 1997. After taking the approval from the aforesaid CIT, the AO completed the block assessment under s. 158BC on 30th Sept., 1997 determining the total undisclosed income of the assessee at Rs. 70,18,180. Being aggrieved with the AO's block assessment order dt. 30th Sept., 1997, the assessee preferred an appeal before the Tribunal. The appeal so filed before the Tribunal was registered as IT(SS)A No. 131/Pn/1997. In this appeal, the Asstt. CIT, Cir. 3(3) was made as the respondent being the AO who pas....
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....ent or change as to the name and designation of the respondent in the memo of appeal. Therefore, the Registry was very much justified to send the Tribunal's order dt. 5th March, 2003 by R.P.A.D. to the office of the CIT, Karve Road, Pune-411004, who had jurisdiction over the case when the assessment was made by the AO and also when the appeal was filed by the assessee before the Tribunal. Be it also stated here that the CIT, Karve Road, Pune, was the authority, who approved the draft assessment order made by the AO under s. 158BC of the Act. 9. In the light of the provisions contained in sub-s. (3) of s. 254 as it stands after the amendment made by the Finance (No. 2) Act, 1991 w.e.f. 27th Sept., 1991, the Tribunal is required to send a copy of any order passed by it under s. 254 of the Act to the assessee and to the CIT. Rule 35 of the Income-tax (Appellate Tribunal) Rules, 1963 also prescribes the same thing. It is pertinent to note that between 1st April, 1988 and 26th Sept., 1991 under s. 254(3) of the Act, the Tribunal was required to send a copy of any order passed under s. 254 to the assessee and to the Chief CIT or the CIT. As a result of the amendment effective from 27t....
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....r the matter in respect of which the original order was passed by the concerned AO, the designation of which is mentioned in the memorandum of appeal unless otherwise modified or amended subsequently by any application filed either by the appellant or by the respondent before the Tribunal. 10. It is also pertinent to note that if the Chief CIT or CIT is aggrieved of any part of the order passed by the Tribunal may file an appeal to the High Court as provided in sub-s. (2) of s. 260A of the Act, and such appeal by the Chief CIT or CIT shall be filed within 120 days from the date on which the order appealed against is received by the Chief CIT or CIT. It is thus clear that for the purpose of computing the limitation period of 120 days for filing the appeal to the High Court by the Department, the relevant date is the date on which the order passed by the Tribunal is received by the Chief CIT or the CIT and not the date on which the order of the Tribunal is received by the concerned AO or the date on which the concerned officer has given effect to the Tribunal's order. What is material is the date on which order of the Tribunal is received by the Chief CIT or the CIT for the purpos....
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....er sought to be appealed against was communicated to the CIT. (iii) Sec. 254(3)-provides that the Tribunal shall send a copy of any order passed by the Tribunal to the assessee and to the CIT. (iv) Sec. 260A(2) and s. 260A(2)(c) provide that the Chief CIT or the CIT may file an appeal to the High Court against any order passed by the Tribunal within 120 days from the date on which the order appealed against is received by the assessee or the Chief CIT or CIT. 11. In the light of the scheme of the Act contained in the aforesaid provisions, it is amply clear that the date of receipt of the appellate order appealed against by the CIT or Chief CIT, as the case may be, is material for the purposes of filing an appeal by the CIT to the Tribunal and by the Chief CIT or CIT to the High Court and for the purposes of computing the period of limitation for filing such appeal. Identical-provisions as analogous to the provisions contained in ss. 253(3) and 260A(2)(a) have been made by the legislature with reference to the time-limit provided for completing the fresh assessment by the AO on its remand either by the CIT(A) or by the Tribunal or by any authority as mentioned in sub-s. (2A....
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....was held that the period of limitation for passing the penalty order is to be reckoned with reference to the receipt of the order of the CIT(A) or, as the case may be, the Tribunal, by the CIT or the Chief CIT and not from the date when the appeal effect was given by the AO on the strength of any copy of order otherwise communicated to him either by the assessee or any other means. The relevant portion of the said order is as under: "8.17 We further deem it necessary to take note of the following provisions of the IT Act, which relate to the procedure of appeals to the CIT(A), or the Tribunal and the Hon'ble High Court, and which are necessary to be considered to decide the aforesaid controversy involved in these appeals. Sub-s. (1) of s. 253 provides the provision for filing appeal to the Tribunal by any assessee. Sub-s. (2) of s. 253 makes a provision for filing appeal to the Tribunal by the CIT. Sub-s. (1) of s. 253 begins with the words, 'Any assessee aggrieved by any of the following orders may appeal to the Tribunal against such order.' Sub-s.(2) of s. 253 begins with the words, 'The CIT may, if he objects to any order passed by a Dy. CIT(A) before the 1st day of Oct., 199....
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.... filing appeal by the CIT to the Tribunal begins to run from the date on which the order sought to be appealed against is communicated to the CIT as provided under main sub-s. (3) of s. 253 of the Act. On a plain reading of sub-s. (3) of s. 254 of the Act, it is clear beyond any doubt that the Tribunal is required to send a copy of any order passed under s. 254 to the assessee and to the CIT, on being aggrieved by any order passed by the Tribunal, the right of filing an appeal to the High Court by the Department has been conferred upon the Chief CIT or the CIT, and such appeal by the Chief CIT or the CIT shall be filed within one hundred and twenty days from the date on which the order of the Tribunal appealed against is received by the Chief CIT or CIT as would be clear from sub-s. (2) of s. 260A of the Act. In s. 275(1)(a), the unequivocal and plain words used by the legislature are 'six months from the end of the month in which the order of the CIT(A) or, as the case may be, the Tribunal is received by the Chief CIT or CIT....' 8.19 Thus, in the light of unambiguous and clear provisions contained in ss. 250(7), 253(2), 253(3), 254(3), 260A and s. 275(1)(a), the expression 'th....
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.... angle. It is well-settled position of law that where the service of any order required to be made on any person is made on a person who was not an authorized agent of that person, the service made would be no valid service. Sub-s. (7) of s. 250 and sub-s. (3) of s. 254 provide that the order passed by the CIT (A) or, as the case may be, by the Tribunal shall be required to be communicated or sent to the assessee and to the Chief CIT or the CIT, or to the assessee and to the CIT, respectively so that the assessee and the CIT or the Chief CIT to whom the order is so communicated or sent may, if aggrieved, seek redress in a higher forum by filing an appeal within the stipulated time as per law. The Chief CIT or CIT is only empowered to file an appeal for the Department to the High Court within the stipulated time as provided under s. 260A(2) of the Act, and as such, the order passed by the Tribunal is to be validly served on the CIT in the manner laid down under s. 254(3) of the Act. Unless and until the order passed by the Tribunal is validly communicated to the CIT as required under s. 254(3) of the Act, the time-limit for filing an appeal to the High Court would not begin to run. ....
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....justified in despatching the copy of order passed by it to the CIT, Karve Road, Pune, as per the last information and materials available in the records. Therefore, the date on which the order of the Tribunal was received by the CIT, Karve Road, Pune, would be material for the purpose of computing the period of limitation for passing the fresh assessment order by the AO. 17. In the present case, the assessee has produced a copy of issuing register maintained by the Tribunal showing that the copy of the order was issued on 24th March, 2003 to the CIT, Karve Road, Pune. No material is available on record to show that when the same was actually delivered at the post office for onward delivery to the addressee. However, having regard to the practice followed in the Tribunal, the copy of the order issued on 24th March, 2003 might have been posted either on the same day or otherwise on 25th March, 2003. No direct evidence or materials have been produced before us as to when this order was actually received by the CIT, Karve Road, Pune. The learned counsel for the assessee has submitted that having regard to the normal time taken for delivering the registered letter at the same place o....
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.... Karve Road, Pune, is to be taken as 2nd April, 2003, the period of limitation under s. 153(2A) would expire only on 31st March, 2005 and there would be no much material difference in the time-barring date. We, therefore, reject this ground on the facts of the case by taking the date of service of order as 2nd April, 2003. The ground of limitation thus raised by the assessee is rejected. 18. The next ground relates to determination of undisclosed income at Rs. 41,25,925 by the AO. 19. Following amounts have been treated to be the undisclosed income for the block period by the AO: Undisclosed income as per para 3.1.1 Rs. 2,75,000 Undisclosed income as per para 3.1.2 Rs. 8,250 Undisclosed income as per para 3.1.3 Rs. 16,000 Undisclosed income as per para 3.1.5 Rs. 4,00,000 Undisclosed income as per para 3.1.6 Rs. 2,52,000 Undisclosed income as per para 3.1.7 Rs. 18,73,925 Undisclosed income as per para 3.1.8 Rs. 4,00,000 Undisclosed income as per para 3.1.9 &nb....
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....ed during the search. The content 27/50 cannot be translated as Rs. 27,50,000 without any further evidence, Further interrogation of concerned person may reveal the truth relating to true figure represented by 27/50 appearing in the seized paper. These documents also clearly indicate that the assessee gave certain funds in relation to carrying out the activity of arranging bogus gifts from NRE account. The amount of capital required for carrying out such activity has to be estimated on the basis of aggregate gifts made out of such bogus NRE accounts in the name of various so-called NRE donors. Likewise, the other additions made on the basis of said seized paper require further probe and investigation. The statements of concerned persons including the statement of Mr. R.D. Mehta will have to be recorded in the presence of the assessee. 27. As regards the addition made in respect of unexplained investment in construction of house property is concerned, this matter also requires further investigation. The comparison of the valuation made by the registered valuer and DVO should be made and exact reasons of the difference should be ascertained. The AO will have to examine both the DV....
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....ribunal may also be kept in view. (d) Mr. R.D. Mehta should be examined in the presence of the assessee in respect of various facts recorded in assessment order in the case of the assessee as well as in the case of Mr. R.D. Mehta and in relation to any other relevant material." 22. The first addition is Rs. 2,75,000 made by the AO after interpreting the code word "27.50" as Rs. 2,75,000 on the basis of the assessee's statement made before FERA authorities. Originally, this amount was taken by the AO at Rs. 27,50,000, but in the fresh assessment, the AO has taken the same to be of Rs. 2,75,000. On this issue, the Tribunal has restored the matter back to the file of the AO by observing that this addition would require further probe and investigation. The Tribunal also directed that the statements of the concerned persons including the statement of Mr. R.D. Mehta will have to be recorded in the presence of the assessee. However, on going through the present assessment order, we find that the AO did not make any further inquiry or investigation nor the statement of Shri R.D. Mehta was recorded in the presence of the assessee giving an opportunity to the assessee to cross-examine ....
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....unaccounted money in the guise of gift in his or his son's account. The AO has not followed the necessary directions and instructions given by the Tribunal in its order while framing fresh assessment order. Since no further materials were brought by the AO to disbelieve the assessee's version, we do not find any justification to sustain the addition. Hence, the same is deleted. 26. The AO has also made an addition of Rs. 4,00,000 on account of unexplained income utilized in purchasing fictitious NRE gifts of Rs. 4,00,000 as aforesaid. Since the original amount introduced in the books of account as gift has been deleted by us, the question of making this addition of Rs. 4,00,000 does not arise. Hence, the same is also deleted. 27. The next addition is of Rs. 2,52,750 made on account of unexplained investment in construction of house property. This addition has been made on the basis of valuation report given by the DVO. In this connection, the Tribunal directed the AO that the comparison of the valuation made by the registered valuer and the DVO should be made, and exact reasons of the difference should be ascertained. The Tribunal also directed that the AO will have to examin....