TaxTMI 
TaxTMI 
2012 (6) TMI 701
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....vil contractors, was found to be engaging in systematic suppression of sales. The ld. CIT(A), finding substance in the assessee's contention of the assessment by the Assessing Officer (A.O.) as containing several mistakes, called for a remand report, and in which (dated 12/10/2006) several modifications were conceded to and, consequently, modifications allowed by the AO. On the assessee castigating the said report (vide its letter dated 11/12/2006) as still containing/bearing some omissions/mistakes/ duplications, a further remand report was called for, wherein, again, the subsisting errors were removed. The ld. CIT(A) has based his decision on the said second report, allowing further relief to the assessee by scaling down the assessment of gross profit on the suppressed turnover from 50% to 30%, quantifying the relief allowed per his order, so that the undisclosed income stood reduced to Rs. 4,31,004/-, i.e., as against Rs. 46,37,820/- originally computed by the Assessing Officer. 3. Before us like contentions stood raised, with the assessee challenging the assessment on both legal and factual grounds. The Revenue relies on the impugned order, stating that the same stands passe....
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.... the concerned person and, further, to enable him to initiate the proceedings for assessment, is contextual, and has to be considered with regard to the obtaining facts and circumstances of the case. Reference in this context may be made to the decision in the case of Subhan Javeed v. Asstt. CIT [2010] 122 ITD 307 (Bang.). In the present case, the AO, both of the assessee-firm and Shri C.P. David, is the same. Also, the satisfaction, as apparent from the assessment order, emanates from and is eminent from the material found and seized in search. That the satisfaction is to be a prima facie one, is well-settled by a host of decisions, to some of which reference may be made as, Rushil Industries Ltd. v. Harish Prakash, [2001] 251 ITR 608/[2002]120 Taxman 67 (Guj.); Priya Blue Industries (P.) Ltd. v. Jt. CIT, [2001] 251 ITR 615/[2002] 120 Taxman 696 (Guj.); Harvey Heart Hospitals Ltd. v. Asstt. CIT [2010] 130 TTJ 700 (Chennai). 4.3 Finally, we also find merit in the Revenue's argument that the warrant of authorisation, as apparent from the copy of the Panchnama (on record), stands issued in the name of Shri C.P. David in his capacity as the partner of the assessee-firm. This is for....
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.... facts, consistency has to be followed and the decision of the Hon'ble Third Member of the co-ordinate Bench is binding on us. Hence, respectfully following the order of the Hon'ble Third Member in IT(SS) A No.07/Coch/2006 for the block assessment years 1990-91 to 2000-01 dated 16-7-2010, I beg to differ with the findings of the Id. Brother which is in contra distinction to the majority decision of the Hon'ble Third Member. For the above reasons, I differ with the findings of the ld. Brother. Reference under section 255(4) of the Income-tax Act, 1961 As there is a difference of opinion between the Members who heard the appeal, the following questions are referred to the Hon'ble President, Income-tax Appellate Tribunal:- (1) Whether the decision of the Honble Third Member is applicable under the given set of facts and circumstances of the case? (2) Whether the decision of the Hon'ble Third Member is binding on this Tribunal? Separate Reference to Hon'ble President under section 255(4) of the Income-tax Act, 1961 In re: Kothamangalam Aggregates v. The Deputy Commissioner of Income tax [in IT(SS) A No. 24/Coch/2007 ] I have perused the dissent order by....
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....ns listed at paras 4.1 to 4.3 of the order proposed by the AM, or is it applicable in the facts and circumstances of the case, as found by the JM?" 3. I have carefully considered the above questions drawn by the Hon'ble Members of the Cochin Bench. I have also perused the orders of the learned Members. I have heard the learned representative for the assessee and the learned Senior Departmental Representative. 4. I feel it necessary to incorporate the facts of the case as gathered from the records before considering the submissions of both the sides. The facts are that the assessee firm was subjected to a search action u/s.132 of the Income-tax Act, 1961 on 18.12.2002 on the strength of search warrant in the name of Shri. C. P. David, a partner, when certain incriminating documents and books of account were seized. On the basis of the seized materials, it was found that the assessee was carrying on the business of hiring of vehicles and supply of rubble metals in various sizes to civil contractors which revealed suppression of sales. The assessee contended before the Commissioner of Income-tax (A) that the assessment order passed by the Assessing Officer contained several mist....
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....the ingredients for the exercise of power, as the existence of prima facie satisfaction from the material found as a result of search or information or evidence available with the Assessing Officer in relation thereto, is satisfied. The law in the matter is trite, and for which one may refer to the decision in the case of Hazari Mal Kuthiala v. ITO [1961] 41ITR 12 (SC). 4.2 The assessee contends that no satisfaction stands recorded. The law nowhere, as in the case of a section 148 notice, requires the said satisfaction to be in writing. Secondly, the manner and mode of its recording, which is essentially for handing over the relevant material to the Assessing Officer of the concerned person and, further, to enable him to initiate the proceedings for assessment, is contextual, and has to be considered with regard to the obtaining facts and circumstances of the case. Reference in this context may be made to the decision in the case of Suban Javeed v. Asstt. CIT, 122 ITD 307 (Bang.). In the present case, the Assessing Officer, both of the assessee-firm and Shri. C.P. David, is the same. Also, the satisfaction, as apparent from the assessment order, emanates from and is eminent from....
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....years 1990-91 to 2000-01 dated 16.7.2010, I beg to differ with the findings of the ld. Brother which is in contradistinction to the Majority decision of the Hon'ble Third Member. For the above reasons, I differ with the findings of the ld. Brother." 8. In view of the above dissenting orders, the questions extracted elsewhere of this order are referred by the Hon'ble President to me for consideration and disposal u/s.255(4) of the IT Act, 1961. 9. Before me, the learned representative for the assessee apart from filing a compilation of 107 pages, also filed a written submission, wherein, at the beginning he has extracted the questions raised by the Hon'ble Members which I have reproduced elsewhere in this order. The rest of the written submission reads as under : "(3) P.C. Mathew v. Asst. CIT in IT (SS)A No.7/Coch/2006 dated 16.07.2010. This order is in the paper book from page 1 to page 40. (4) Please refer to para 22, 23 and 24 of the order (page 18, 19 and 20 of the paper book). (5) The search warrant was in the name of K. M. Thomas, K T Mathew, K T Thomas & K. T Joseph Page No. 19 of paper book para 22 of the order. The above persons are in the Panchanama recor....
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....s in the instant case :- Submission:- In the appellant's case the person other than the one against whom search warrant is issued can be assessed only u/s.l58BD. Kothamangalam Aggregates is the 'other person' and hence the Accountant Member is agreeing that Kothamangalam Aggregates should be assessed u/s. 158BD. (b) The Revenue maintains that search on Sri. C. P. David was only in his capacity as a partner of the assessee firm being its principal partner. Submission:- The copy of the Panchanama paper book pages 84 to 90 make it clear that the search was on C.P. David and the search in the business premises of Kothamangalam Aggregates in which Sri. C.P. David is a partner is only an ancillary search to find out any undisclosed income of Sri. C.P. David. Hon'ble Supreme Court in the case of "Manish Maheswari - 289 ITR 341 - It is decided that when search is conducted against two persons who are the Directors of the company the assessment of those persons should be done u/s.159BC and the company should be assessed u/s. 158BD. For the same reason Sri. C.P. David is to be assessed u/s.158BC and Kothamangalam Aggregate the Appellant firm in which Sri. C.P. David is a pa....
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....to be assessed u/s, 158BD. When this decision of Third Member is accepted by the same Judicial Member and Accountant Member they should not take a different view in the Appellant's case with identical facts of the case. It is also pertinent to note that no subsequent decision against the above has been taken on this issue by any of the Benches of the Hon'ble Tribunal or by the High Court or Supreme Court. Since this being the position the very same Accountant Member taking a different decision primarily based on the wrong understanding of the facts of the case is not sustainable. Question No. 2 referred is .- Whether the decision of the Hon'ble Third Member is binding on this Tribunal ? I may request the Hon'ble Third Member may refer to the following decisions :- (1) Dy. CIT v. Oman International Bank - Mumbai Special Bench [2006] 102 TTJ 207 and [2006] 100 ITD 285. (2) Dy. CIT v. Padam Prakash [2006] -ITAT - Delhi(E) Special Bench - 2006 104 TTJ - 989 - (2006) 10 SOT 1 (DEL) (SB) In the above decisions it is decided that the decision of the Third Member is to be followed by the coordinate bench for an identical case. Hence it is submitted that the decision of....
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....athew (supra) was sustainable in law. We also find from the records that in the case of C.P. David (partner of Kothamangalam Aggregates Nelkrishi), assessment has already been completed u/s.158BC and the matter also reached the Tribunal and the Tribunal has decided the issues raised before them vide their order dated. 13.11.2009. Thus, when already an assessment has been completed u/s.158BC in the case of the partner Shri. C.P. David, the assessment in the case of "other person", namely, Kothamangalam Aggregates Nelkrishi, the assessee, the present assessment could be made only u/s 158BD. The Hon'ble Accountant Member has misunderstood that the warrant was issued in the case of Shri. C P. David as partner of the firm Kothamangalam Aggregates Nelkrishi, whereas nothing as such is noted in the respective Panchanamas. Since the assessment has already been made in the case of Shri. C.P. David u/s 158BC and nothing as mentioned by the Hon'ble Accountant Member is appearing on the Panchanamas to come to a conclusion that it was the search in the case of Kothamangalam Aggregates Nelkrishi, I am of the view that the assessment has to be made u/s. 158BD only in the case of Kothamangalam Agg....