TaxTMI 
TaxTMI 
2012 (9) TMI 979
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..... The assessee is engaged in running of educational institutions. A search and seizure action u/s.132 of the Income Tax Act was conducted on 20-07-2005 in the case of Dr. D.Y. Patil group. The assessee being one of this group was covered u/s.133A of the Income Tax Act, 1961. On the basis of the seized/impounded documents during the course of search/survey and the enquiries conducted later on it was concluded by CIT, Central, Pune vide order dated 30-11-2007 that the activities of the trust are neither genuine nor are being carried out in accordance with the objects of the trust. The CIT, Central, Pune, therefore, for the various reasons mentioned in his order cancelled the registration of the assessee u/s.12AA (3) of the Income Tax Act, 1961. However, the ITAT vide ITA No. 182/PN/2008 order dated 28-11-2008 restored the registration u/s.12A of the Income Tax Act. Nothing contrary was brought to our notice against the order of the Tribunal restoring the registration u/s.12A of the Income Tax Act. 3. On the basis of various documents pertaining to the assessee trust found & seized during the search in case of the trustees the AO issued notice u/s.153C for the A.Y. 2000-01 to 2005-....
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....vely. iii. Page Nos. 11 & 14 are copies of debit vouchers dated 12-09-2001 of Dr. D.Y. Patil Pratishthan C/o. D.Y. Patil College of Engineering, Pimpri, Pune - 411018 connected with the D.Ds at Pages 9 & 10. Amount has been paid to the Karad Janata Sahakari Bank Ltd., Karad payable at Mumbai. The amount has been paid vide cheque No. 449705 through A/c No. 50/779 of Rupee Co-op Bank Ltd., Chinchwad Branch, Pune. iv. Page 16 is an order registration form No.153 dated 11-08-2001 through which Padmashree Dr. D.Y. Patil Pratishthan, C/o. Padmashree Dr. D.Y. Patil Nisargopchan Kendra, Yawat, Pune has given order for purchase of generator set to Cube Power Care Pvt. Ltd., 74/B, Muktangan Commercial Complex, Sahakar Nagar No.2, Pune-9, costing Rs. 1,08,500/-. v. Page 18 is a copy of A/c payee cheque No. 449719 dated 01-10-2001 of A/c. No.50/779 of Rupee C-op Bank Ltd., Chinchwad Branch, Pune, drawn in favour of Cube Power Care Pvt. Ltd., by Dr. D.Y. Patil Pratishthan amounting to Rs. 2,45,000/-. vi. Pages 24A is a copy of letter dt. 01-07-2001 from the Karad Janta Sahakari Bank Ltd., Karad, Mumbai Branch to Dr. D.Y. Patil Pratishthan, Mumbai & Pune intimating for payment of out....
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.... related to Dr. D.Y.Patil Pratishthan : Page 1 & 2 are bills of Roshani Services, d79 C/480A, Koregaon, Park, Pune for the fuel purchased by Dr. D.Y. Patil Pratishthan for its vehicle in the month of Feb., 2004. Page 5 is a challan cum invoice of Cube Power Care (P) Ltd., dated 1 -08-2001 against the delivery of Generator set to Dr. D.Y.Patil Pratisthan at Gulmohar, Koregaon Park, Pune. Its payment reflected at Page No. 18 of item No. 1 above. Page No. 6 & 7 are copies of service invoices (Invoice No. P2000473) Vehicle (MH-12-CA-6464) of D.Y. Patil Pratishthan, C/o. D.Y. Patil College of Engg. Pimpri, Pune - 411 018, dt. 23-10-2000 of Rs. 31,542/- & Rs. 846/- respectively. Page No.15 is a charter bill dated 15-07-2000 of Rs. 30,595/- of Dr. D. Patil Pratishthan, Opp: H.A. Ltd., Pimpri, Pune. Page 16 is a copy of purchase order dated 13-05-2005 give by Dr. D.Y. Patil Pratishthan's D.Y. Patil College of Engg. Akurdi, Pune, to Swift Industries, Pune for Rs. 78,144/-. As the above seized documents belong to Dr. D.Y. Patil Pratishthan, Kolhapur, notices under section 153C for A.Ys. 2000-2001 to 2005-06 are required to be issued in this case. Issue notices under section....
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....of notice u/s.153C of the Income Tax Act. It was submitted that the notice issued u/s.153C is not justified since no incriminating material was found pertaining to it. It was explained that the search was carried out on the trustees and no incriminating evidence pertaining to the assessee trust was found. It was submitted that in absence of any incriminating evidence the proceedings initiated u/s.153C are not invalid. It was submitted that the various additions made by the AO has nothing to do with any incriminating material found during the search. It was argued that additions can be made only in respect of the issues wherein some incriminating evidence is found. Accordingly it was argued that the proceedings initiated u/s.153C are illegal and therefore the consequent assessment has to be declared null and void. The relevant submission made by the assessee on this issue vide their letter dated 19-12-2008 and as reproduced by the CIT(A) in his order reads as under : "3.7 In this assessment, the learned AO has made additions on various grounds which have cropped up as a result of audit/asst. enquiry. They have nothing to do with the material found during the search. For example, ....
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....ound from the person who has been searched. Now, the documents pertaining to the appellant found during the course of search are not incriminating documents and therefore, the notice u/s.153C could not be issued. 3] In this context, Your Honour's kind attention is invited to the recent ITAT, Pune decision in the case of Sinhagad Technical Education Society (copy enclosed). This decision of the Hon'ble ITAT is for A.Y. 2000-01 to 2003-04. The notice u/s.153C was issued for the above years on the basis of certain documents found with Sri M.N. Navale were for A.Y. 2004-05 onwards and no documents were found for A.Y. 2000-01 to 2003- 04. On that basis, it was submitted that no notice could be issued u/s.153C for the earlier years for which no document was found with Shri Navale. Hon'ble ITAT accepted the claim of the assessee that when no specific document was found for A.Ys. 2000-01 to 2003-04 with Shri Navale, the notice u/s.153C cannot be issued for those years. It is further held that notice can be issued only when some incriminating evidence has been found. Accordingly, since no document was found for A.Ys. 200-01 to 2003-04, Hon'ble ITAT allowed the claim and held that the not....
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....of the Tribunal in the case of Harvey Heart Hospitals Ltd. Vs. ACIT reported in 36 DTR 201, the decision of the Bilaspur Bench of the Tribunal in the case of ACIT Vs. Panchuram Deshmukh and Others reported in 40 DTR (Bilaspur) (Trib) 252 (2010)/133 TTJ 53 and the decision of the Hon'ble Gujarat High Court in the case of Vijaybhai N. Chandrani Vs. ACIT reported in 231 CTR 474 (Gujarat) he held that the notice issued by the AO u/s.153C of the Income Tax was valid notice. 8. So far as the various additions made by the AO the learned CIT(A) gave partial relief to the assessee. Aggrieved with such order of the CIT(A) the assessee as well as revenue are in appeal before us with the following grounds : Grounds by Assessee : " 1. The learned CIT(A) erred in not appreciating that the asst. u/s.153C passed by the learned AO was null and void. 1.1. The learned CIT(A) erred in holding that the notice issued u/s.153C was valid and there was no requirement that any incriminating evidence was required to be found pertaining to the assessee in order to invoke the provisions of section 153C. 1.2. The learned CIT(A) failed to appreciate that the provisions of section 153C were applica....
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....failed to appreciate that no benefit was given to the trustee on account of payment to Mahindra Holidays and hence, the assessee has not violated the provisions of section 13(10(c). 5.5 The learned CIT(A) further erred in holding that the payment of audit fee to R.D. Patil & Co. Chartered Accountants was excessive and resulted in violation of section 13(1)(c). 5.6 The learned CIT(A) failed to appreciate that the audit fee paid to R.D. Patil & Co. Chartered Accountants was reasonable considering the volume of work and the time spent and hence, there was no reason to hold that the payment made to the said concern was in violation of section 13(1)(c). 6. The learned CIT(A) further erred in holding that the following expenses were not allowable as a deduction while computing the income of the appellant because the appellant had violated the provisions of section 13(1)(c) : Sr.No. Particulars Amount (Rs.) 1 Advertisement expenses 3,66,473.00 2 Payment of Membership Fee to Mahindra Holidays 1,52,550.00 3 Payment of Audit Fee to M/s. R.D. Patil & Co. 7,48,000.00 6.1 The learned CIT(A) failed to appreciate that the above expenses were incurre....
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....he learned CIT9A) erred in not setting off the excess deficit in the hands of the appellant till A.Y. 1999-00 against the income of the appellant for this year." 13. The appellant craves leave to add, alter, amend, or delete any of the above grounds of appeal Grounds by Department : "01 (i) Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) was justified in holding that advancing interest free loan of Rs. 2,17,08,290/- by the assessee to its related concern D.Y. Patil Education Society does not attract provisions of sec. 13(1)(d) of the IT. Act, 1961. (ii) Without prejudice, CIT(A) erred in not appreciating the fact that D.Y. Patil Education Society is an interested person as per section 13(3) of the Act and therefore, advancing interest free loan of Rs. 2,17,08,290/- by the assessee to D.Y. Patil Education Society is violation of provisions of sec. 13(1)(c). (iii) CIT(A) erred in not appreciating the fact that even in case wrong provision is invoked, mentioning wrong section, ie. Section 13(10(d) instead of 13(1)(c), is not fatal and it is merely a procedural lapse as held by many judicial authorities including Hon'ble Madras High Co....
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....ered u/s.40A (2)(b). (ii) CIT(A) erred in not appreciating that the accounts were subject to special audit u/s.142(2A). 06. Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) was justified in allowing development fee of Rs. 1,34,88,113/- as capital receipt ignoring the fact that the same was to be treated as income in view of cancellation of registration u/s.12A and also in view of violation of section 13(1)(c) which automatically rendered the income chargeable to tax. 07. (i) Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) was justified in holding that employees contribution which was not deposited within due date under that Act is allowable as expenditure when the same was rightly disallowed by the Assessing Officer. (ii) Whether the decision of Ld. CIT(A) ignoring the clear distinction between employee's contribution to ESI, PF and Pension Fund and employer's contribution is bad in law? (iii) Whether the decision of Ld. CIT(A) ignoring the provisions of section 2(24) (x) r.w.s. 36(1)(va) as per which employee's contribution to ESI, PF and Pension Fund is deductible only if payment is made before ....
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....b of the business. 2 2 a) Page No.7 of item NO.12 of Annexure 2001-02 'A' to the Panchanama made at above premises is a Xerox copy of balance certificate of D. Y. Patil Pratishthan, Kolhapur (A/c.No.333) given by Rajarambapu Sahakari Bank Ltd., Peth, Shahhupuri Branch, Kolhapur dt. 03-12-2001 showing balance of Rs. 18,25,687/- as on 03-09-2001 2001-02 YES This seized page no. 7 is a certificate issued by Rajarambapu Sahakari Bank Ltd., Peth, Shahupuri Branch, Kolhapur dt. 03-12-2001 showing balance of Rs. 18,25,687/- as on 03-09- 200 and pertains to Dr. D. Y. Patil Pratishthan, Kolhapur Division. This account is duly recorded in books of accounts of Kolhapur Division. The photocopy of ledger extract in the books of Dr. D. Y. Patil Pratishthan, Kolhapur Division and photocopy of bank statement of Rajarambapu Sahakari Bank Ltd. is enclosed at page no.1 to 11. 1 to 11 343 to 353 of PB 1 66 of PB NO 3 2 b) Pages 8 to 11 of item No. 12 are copy of account extract of A/c. No. 333 of D.Y. Patil Pratishthan, Kolhapur held in Rajarambapu Sah. Bank Ltd., Peth, Shahupuri Branch, Kol....
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....ent of Rs. 8,78,172.15 is enclosed at Page No. 14 to 16 14 to 16 356 to 358 of PB 20 to 24 85 to 89 of PB NO 6 3 Further, during the search and seizure action at residential premises of Shri D. Y. Patil, Shri Sanjay D. Patil and Satej D. Patil at flat No. 10, Gulmohar Palace, B Lane, North Main Road, Koregaon Park, Pune-1 following documents / books were seized pertaining to Dr. D. Y. Patil Pratishthan Kolhapur:- 7 a) Item No.1 Annexure 'A' to the Panchanama made at above premises, is a file containing some loose papers pertaining to Dr. D. Y. Patil Pratishthan - 8 * Page No. 9 and 10 in this file are copy of Demand Drafts No. 331957 & 331958 dated 12-09- 2001 drawn in favour of Dr. D.Y. Patil Pratishthan amounting to Rs. 1,00,000/- & Rs. 9,00,000/- respectively. 2002-03 YES YES These seized page no. 9 & 10 pertains to Dr. D.Y.Patil Pratishthan, Pune Division. These demand drafts are paid to Karad Janata Sahakari Bank Ltd. towards repayment of loan taken by our trust. These payments are....
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....a copy of A/c payee cheque No. 449719 dated 01-10-2001 of A/c.No.50/779 of Rupee Co-op. Bank Ltd., Chinchwad Branch, Pune, drawn in favour of Cube Power Care (P) Ltd., by Dr. D.Y. Patil Pratishthan amounting to Rs. 2,45,000/-. 2001-02 YES This seized document is photocopy of cheque no. 449719 of Rupee Co-op. Bank Ltd. paid for purchase of generator set. This purchase of generator is duly recorded in the books of accounts of Dr. D. Y. Patil Pratishthan, Pune Division. The photocopy of ledger extract of 19 to 20 Generator Ale towards recording of Generator set purchased from Cube Power Care Pvt. Ltd.and ledger extract of Cube Power Care Pvt. Ltd. towards payment appearing in the books of Dr. D. Y. Patil Pratishthan, Pune Division are enclosed at page no. 19 & 20 19 to 20 361 to 362 of PB 30 95 of PB NO 12 * Pages 24A is a copy of letter dt. 01-07-2001 from the Karad Janta Sahakari bank Ltd., Karad, Mumbai Branch to Dr. D.Y. Patil Pratishthan, Mumbai & Pune intimating for payment of outstanding interest on loan taken vide hire purchase loan A/c. No. 98. The interest upto 30-06-2002 is Rs. 74,256/-. 2002-03 YES This seized page no. 24A pertains to Dr....
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.... 23. 21 to 23 363 to 365 of PB 33 98 of PB NO 15 * Page 32 is a receipt No. 2100513 dated 22-11-2001 of Concorde Motors Ltd. 46/9, Vadgaon Sher, kharadi Road, of Pune Nagar Road, Pune-14 for the payment of Rs. 22,812/- received from D.Y. Patil Pratishthan against invoice No. 2100322 & 2100424. 2001-02 YES This seized paper no. 32 is photocopy of receipt received from Concorde Motors Ltd. 46/9, Vadgaon Sheri, Kharadi Road, off Pune-Nagar Road, Pune-14 for the payment of Rs. 22,8121 received from D. Y. Patil Pratishthan against invoice No. 2100322 & 2100424. This payment 24 to 34 of Rs. 22,812/- dated 22.11.2001 is duly recorded in the books of account of Dr. D. Y. Patil Pratishthan, Pune Division in repairs & Maintenance AIC on 22.11.2001. The photocopy of ledger extract of Repairs & Maintenance Alc is enclosed at page no. 24 to 34. 24 to 34 366 to 376 of PB 34 99 of PB This page indicates repairs expenditure on Mercedez car owned by the trust. The said expenditure is accounted for in the books. No addition has been made by the ld. AO on the ground as the said expenditure is accounted. This car is used for VIP guests of the trust. However, the AO ....
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....purpose of the trustees and disallowed the maintenance and depreciation expenditure related to the said flat. It is submitted that the flat is used as a guest house and the trustee, Dr. D.Y. Patil, also stays there whenever he visits pune. There is no question of disallowing the expenditure and depreciation . The expenditure noted therein is duly accounted and hence, it cannot be considered as an incriminatin g evidence 18 3 c) Item No. 3 of Annexure 'A' to the Panchanama is a file connected with the use of Chartered flight by Sri P.D. Patil, Director and Trustee of Dr. D.Y. Patil pratishthan has given an advance of Rs. 20 lac prior to 31- 01-2003 & of Rs. 15 lac prior to 30-11-2003. The bills have been adjusted from these advances. 2002-03 and 2003- 04 YES This seized file is regarding the use of chartered flight by Dr. D. Y. Patil. The trust has made advance payment of Rs. 10.00 Lacs each on 20.12.2002 and 20.01.2003 respectively and Rs . 15.00 Lacs on 27.07.2003 from Dr. D. Y. Patil Pratishthan, Pune Division to Taneja Aerospace and Aviation Ltd. These payments are duly recorded in the books of account of Dr. D.Y. Patil Pratishthan, Pune Division. The photocopy....
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....ly recorded in the books of Dr. D. Y. Patil Pratishthan's Dental College, 42 to 45 39 to 40 Pune Division under the head of Travelling & Conveyance A/C. The photocopy of Ledger Extract of Travelling & Conveyance AIC, Journal Entry and Ledger extract of Andhra Bank A/c towards payment of bills are enclosed at page no. 42 to 45 42 to 45 384 to 387 of PB 39 to 40 314 to 315 of PB NO 22 * Page 5 is a challan cum invoice of Cube Powe Care (P) Ltd., Dated 11-08-2011 against the delivery of Generator set to Dr. D.Y. Patil Pratishthan at Gulmohar, Koregaon Park, Pune. Its payment is reflected at Page No.18 of item No.1 above. 2001-02 YES This seized document is photocopy of challan cum invoice of Cube Power Care Pvt. Ltd for purchase of generator set. This purchase of generator is duly recorded in the books of accounts of Dr. D. Y. Patil Pratishthan, Pune Division. The photocopy of ledger extract of 19 to 20 Generator Alc towards recording of generator 41 set purchased from Cube Power Care Pvt. Ltd.and ledger extract of Cube Power Care Pvt. Ud. towards payment appearing in the books of Dr. D. Y. Patil Pratishthan, Pune Division are enclosed at page no. 20 & 21 ....
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....ounsel for the assessee drew the attention of the Bench to the various proofs/evidences to explain as to how all these entries reflected in the above documents are duly accounted for. Referring to the letter dated 02-05-2011 addressed to the CIT(A), a copy of which is placed at Paper Book Page Nos. 322 to 331 he submitted that it was explained by the assessee before the CIT(A) that all these documents did not constitute any incriminating evidence and all the entries mentioned in these documents are duly accounted for. 11. The learned counsel for the assessee submitted that the proceedings u/s.153C can be initiated against a third person if the documents found pertain to him and they are incriminating in nature. If the documents are not incriminating in nature, the proceedings u/s.153C cannot be initiated against a third person. Giving an example he submitted that Telco has appointed more than 200 dealers throughout the country. If the premises of one of the dealer is searched and a list containing the names of the other dealers throughout India including that of the principal, i.e. Telco is found from the premises of the searched party giving sales made etc. to each dealer by Te....
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....n of proceedings u/s.153C of the Income Tax Act. Referring to the decision of the Hon'ble Delhi High Court in the case of SSP Aviation Ltd. Vs. DCIT reported in 2012-305-HC-Delhi-IT he submitted that the Hon'ble High Court in the above decision has held that when during the search conducted on one person under Section 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted are found, then in that case the AO shall hand over the valuables or articles or books of accounts or documents etc. to the Assessing Officer having jurisdiction over the other person. Thereafter, the Assessing Officer having jurisdiction over the other person has to proceed against him and issue notice to that person in order to assess or reassess the income of such other person in the manner contemplated by the provisions of Section 153A. Therefore, in the facts and circumstances of the case the issue of notice u/s.153C by the AO is fully justified. The Learned CIT DR also relied on the following decisions : 1. ACIT Vs. Panchmukh Deshmukh and Others reported in 133 TTJ 53/40 DTR 252. 2. Trilok Singh Dhillon Vs. CIT reported in 33....
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..... 18. So far as the decision of the Hon'ble Gujarat High Court in the case of Vijaybhai N. Chandrani (Supra) he submitted that the said decision is not applicable to the facts of the present case. In that case the notice issued u/s.153C by the AO was quashed on the ground that the loose papers found at the time of search of one Housing Society do not belong to the assessee. The Hon'ble Gujarat High Court had no occasion to decide as to whether notice issued u/s.153C can be treated as valid in a case where no incriminating documents were found. 19. As regards the submission of the learned DR that intention of the legislature has to be seen he submitted that the Hon'ble Bombay High Court in the case of Murali Agro Products Ltd. (Supra) has held that the intention is to tax the undisclosed income. Therefore, the intension of the legislature is in favour of the assessee. So far as the various other decisions relied on by the learned DR he submitted that all those decisions relate to provisions of section 153A and not 153C. 20. He submitted that the Pune Bench of the Tribunal has already considered the decision of the Chennai Bench of the Tribunal in the case of Harvey Heart Ho....
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....ng the course of search. Addition, if any, made by the AO in case of 6 documents are indirect additions. For example: although the repair and maintenance bills found during the course of search as per Page 32 and 33 of Annexure to Panchanama have been reflected in the books of account of the assessee trust addition has been made on the ground that such expenditure has resulted in violation of the provisions of section 13(1)(c) of the Income Tax Act. Similarly although the cost of the flats (as per item 2 and 5 of Annexure) used for guest house are already reflected in the books of account, the AO has presumed that the said flat is used for the personal purpose of the trustees for which he disallowed depreciation and maintenance charges. Similarly, although the AO has accepted that payments made to Taneja Aerospace and Aviation Ltd. for use of Aircrafts (item 3 of Annexure-A) are accounted for in the books maintained by the assessee, however he has held that the expenditure resulted in violation of section 13(1)(c) of the Income Tax Act. Similar is the case with Page No.15 of Annexure-A to the Panchanama. 23. We find the Pune Bench of the Tribunal in the case of Sinhagad Technica....
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....ES), Pune......... "1) page 11 - this is voucher of Sinhgad Technical Education Society (STES) dt. 17-01-2004 for cheque payment of Rs. 2.80 lacs to Amir Moiddin Shaikh. 2) page 12 - this is voucher of STES dt. NIL for cheque payment of Rs. 1 lacs to Amir Moiddin Shaikh. 3) page no. 13- this is voucher of STES Dt. 30.01.2005 for cheque payment of Rs. 2 lacs to Shaikh Amir Shaikh. 4) page no. 14- this is voucher of STES dt. 27.09.2004 for cash payment of Rs. 1 lacs to Shaki Amir Shaikh 5) page no. 15- this is voucher of STES dt. NIL for cheque payment of Rs. 50,000/- to Shaikh Amir Shaikh. 6) pahe no. 45- this is an office copy of letter dt. 23.06.2007 written to director of DTE, Mumbai by Sinhgad College of Pharmacy, owned by STES. Bundle no. A-2 7) page no. 35- there are the balances available to various institute of STES on or before 25.06.2005. Bundle no. A-4 8) page no. 50 & 54 - these pages contains the details of staff arrangements made by the STES college of Engineering for admission process for F.Y. 2003-04. 9) page no. 58 to 60- these pages contain the details of expenses incurred by STES." 10. From the above, it is demonstrated by the Ld Coun....
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....l for the reason mentioned above. However, they are not found to be incriminating documents for the AY 2000-01. The document may not be a dumb document and therefore a speaking one, but they must be the document with prima facie incriminating information too. Such incriminating nature of the seized document is an essential factor for switching on the proceeding u/s 153C. In other words, the document seized must not only be a 'speaking one' but also be prima facie 'incriminating one' for igniting the proceedings u/s153C. Unlike other AYs, there is nothing made out by the AO what is called incriminating for the current AY under consideration. When the impugned documents merely contains the notings of entries, which are already found place in the books of accounts or subjected to scrutiny of the AO in the past in regular assessment u/s 143(3) of the Act, such document cannot be said to be containing the incriminating information. What is the point in disturbing the settled assessment when the revenue does not have incriminating information for an AY and the information what is available is only routine one and when the AO merely makes an addition in the assessment u/s 153C based on....
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.... of the Act when the impugned assessments for the said six AYs are otherwise reached finality after due process of law. In our opinion, the answer is negative and it is in favour of the assessee. In any case, DR has not brought anything on record to demonstrate that the decisions given by the Tribunal in the case of LMJ International (supra) and M/s Kumar Company (supra) are not to be followed in this case. Our perusal of another order of the Tribunal in the case of M/s Kumar Company for the AY 2201 to 2003-04 vide ITA No 1020,1250,1021,1251,1022 & 1252/PN/2008, relied upon by the Ld DR is found distinguishable in so far as the existence of the incriminating document for the relevant AY is concerned. Whereas, in the instant case, first of all, there is no mention of any document in the said reasons relatable to the impugned four years and the incriminating nature of the same is out of question. Therefore, reliance of the DR on the said case is misplaced. 13. Further, we have examined various other judicial propositions mentioned by the Ld Counsel and some of them are reproduced as under. 1) Anil Kumar Bhatia & Ors. (2010) 1 ITR (Trib) 484 (Del) Conclusion:- "In respect of ....
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....ld not be disturbed merely for making routine additions, which could have been otherwise done in the regular assessment and of course, the pending assessments fall under exceptions. As stated by the Ld Counsel point no 9 of his note reproduced above, "nothing is seized pertaining to A.Y 2000-01 to 2003-04 obviously there is no question of recording satisfaction note. On this reasoning itself, we find that the assessee has to succeed. Therefore, we do not examine the other arguments of the counsel. Otherwise, the counsel argued that the reopening of the assessment for the AY 2000-01 to 2001-02 is impermissible in view of the judgment of Allahabad bench in the case of Vijay Vimawal vs. ACIT 124 TTJ 508. Further, he also argued that the assessment of A.Y 2003-04 was actually completed u/s. 143(3) on 30/03/2006 ie prior to receipt of the impugned documents by the Assessing Officer on 18/04/2007, this assessment was not pending. Attending to these arguments of the counsel is superfluous and merely an academic exercise as we have upheld the applicability of the decision of the Tribunal in the case of LMJ International Ltd (supra) for the proposition that the "where nothing incriminating ....
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....ocuments were found in respect of the disallowed amounts in the search proceedings." Nothing is brought to our notice by the revenue contrary to the above and the decisions relied on by the DR are otherwise distinguishable on facts. 21. In the present case of the assessee and in the appeals arising from the order of the AO under section 153C rws 143(3) of the Act for the AY AYs 2000-01 to 2005-06, there are six AYs. Based on the existence of the seized documents, these six AYs can categorized into two categories. (i) the AYs without seizure of any documents or any other seizures as referred to in the provisions of section 153C of the Act; and (ii) the AY with the seizure of some documents as referred to in the provisions of section 153C of the Act. 22. Appeals by the Assessee - AYs 2000-01 to 2003-04 & 2005-06: In connection with the AYs at sl no (i) above ie AYs 2000-01 to 2004-05, admittedly, there is no seizure of the documents as evident from the satisfaction note and the tables explained by the assessee. Considering the above scope of the provisions and legal propositions already adopted by this bench in the case of Sinhgad Technical Education Society (supra), we are of ....
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....e of the considered opinion that the adjudication of the other grounds relating to the other legal and merit oriented issues is merely an academic exercise. Therefore, the relevant grounds in all the four appeals are dismissed as academic. 25. In the result all the six appeals of the assessee are allowed and consequently, the cross appeal by the revenue vide ITA1039/PN/10 for AY 2003-04 is dismissed." 25. We find the Pune Bench of the Tribunal in the case of Patangrao Kadam Pratishthan (Supra) has held as under : "11. The above extracts are self contained one and they relate to decision in the case of Sonhira Foundation for Rural Development (Supra). We have decided the issue in favour of the assessee relying on our decisions in the case of Sinhagad Technical Education Society, kumar and Co. copies of which are filed before the CIT(A) and also other orders in the cases of Bharati Vidyapeeth, Bharati Vidyapeeth Medical Foundation (Supra). These imported paragraphs contained an important discussion on the issues relating to the validity of the notice u/s.153C of the Act and adjudication in the sense that we have analysed the provisions of section 153C of the Act, the existin....
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....essee for the AYs 2000-01 to 2005-06, we have upheld the invalidity of the said notices and in favour of the assessee. Now, we shall take up the revenue's appeals for all the six years. It is an agreed position that, in view of our decision above, the adjudication of these appeals by the revenue become merely an academic exercise. Therefore, all the grounds of the revenue in respect of the six AYs under consideration have to be dismissed as an academic exercise. 16. In the result, six appeals of the revenue are dismissed." 26. Nothing contrary was brought to our notice against the above decisions of the Pune Bench of the Tribunal. However, we find the Pune Bench of the Tribunal while passing above decisions did not have the benefit of decision of the Hon'ble Delhi High Court in the case of SSP Aviation Ltd. (Supra) wherein the Hon'ble High Court has held as under : "14. Now there can be a situation when during the search conducted on one person under Section 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In such case, the Assessing Officer has to first be satisfied under Se....
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....ble to the petitioner herein, does not in any way infringe any rights of the petitioner or curtail or curb his right to be heard by the Assessing Officer or to file appeals and question the assessments made pursuant to the notice under Section 153A. There is no ground for any apprehension that the petitioner will not be heard before the assessments or reassessments for the six assessment years are completed. In fact, in the case of the petitioner itself the Assessing Officer has not made any addition in the assessments completed under Section 153A read with Section 153C for the assessment years 2003-04 to 2006-07 and 2008-09. He has made the addition of Rs. 86 crores only in the assessment year 2007-08 against which an appeal has already been filed, as stated by the ld. senior standing counsel. This also finds mention in para VI of the counter affidavit filed by the respondent. Thus, full opportunity of being heard is available, and in fact was made available to the petitioner herein to represent against the proposed assessments or reassessments. The apprehension expressed by Mr. Bajpai, ld. senior counsel for the petitioner seems to be futile and spartan in the present case, as no....
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....tice u/s.153C of the Income Tax Act by the AO is a valid notice in view of the decision of Hon'ble Delhi High Court in the case of SSP Aviation Ltd. (Supra). However, since all the entries found in those documents have already been reflected in the books of accounts as per the chart furnished by the assessee which have been reproduced at Para 9 of this order and which have been analysed above and which could not be controverted by the learned DR, therefore, in view of the decision of the Hon'ble Delhi High Court in the case of SSP Aviation Ltd. (Supra) further proceedings should have been closed by the AO. Otherwise it will cause undue harassment to the assessee. In our opinion the AO in the garb of proceedings u/s.153C cannot make roving and fishing enquiries after assessee proves that entries recorded in the documents seized from the searched party which belong to the assessee are already reflected in the regular books of account maintained. In this view of the matter and respectfully following the decision of the Hon'ble Delhi High Court in the case of SSP Aviation Ltd.(Supra) we hold that the notice issued u/s.153 is a valid notice. However, since the assessee has satisfactoril....