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2016 (5) TMI 727
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....es of Sujata Hotels Pvt. Ltd. of which the Respondent assessee was a Director, on the same day as the search u/s 132 in the residential premises of the Respondent assessee, namely 24.04.2003, could not be taken into consideration by the Assessing Officer while making the computation of the undisclosed income as held by the Tribunal, as the same did not amount to "such other materials or information as are available with the Assessing Officer" within the meaning of Section 158 BB(1) of the Act? 2. Whether the reliance placed by the Tribunal on the decision of the Madras High Court rendered in CIT vs. G. K. Senniapan (284 ITR 220) is misconceived being not applicable to the facts of the present case? 3. Whether the Tribunal has consequently erred in law in upholding the deletion of the addition of Rs. 1,59,40,263/- made by the Assessing Officer on the basis of the notebook and the Bank passbook, and such conclusion is also incorrect in view of the decision of the Delhi High Court rendered in Friends Overseas Pvt. Ltd.'s case (269 ITR 268)? 3. The brief facts leading to the aforesaid questions is that search and seizure operation under Section 132 of the Act was c....
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....0/- and Rs. 470/- short disclosure of income from other sources in regular return. 2002-03 5,01,210/- Rs.5,00,000/- peak cash credit of Harsh Kochar A/c in KPS-5 minus the cash balance in hand and Rs. 1210 is for short disclosure of income from other sources in regular return. Total 7,02,100/- 6. Subsequently, the assessee clarified on 19.04.2005 when he said to the following effect: "The record of KPS-5 is no way complete record and not a complete account. At this stage it is also not possible for me to give true and correct accounting of then recorded amount with evidence. Therefore, I considered the total amount of receipts and payments are of my account and all the transactions are mine and I have offered Rs. 7.00 lakhs for taxation. Though the peak of this amount is hardly Rs. 3.90 lakhs and my unexplained bank depsit is Rs. 1.40 lakhs. I preferred to disclose 7.00 lakh with a caution for mistake and left out items if any. The detailed calculation is enclosed herewith as Annexure A & B." 7. The Assessing Officer further noticed the answer to question No.6 recorded during the course of search and the reply of the assessee which i....
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....f the respondent, but the person of Sujata Hotel Pvt. Ltd., a separate assessee. The document KPS-5 was impounded from the premises of the Sujata Hotel Pvt. Ltd., therefore, the addition made by the Assessing Officer in block assessment in the hands of the respondent on the basis of KPS-5 is against the provision of law and against the normal presumption that the person from whose premises the paper is collected is to explain the contents of the paper and not the assessee. It was held that the Assessing Officer travelled beyond his jurisdiction by asking the assessee to explain the details of those papers which he has not written and about which he has no idea who has written that paper. Therefore, the order of CIT (A) is fully justified order and does not require any intervention. 11. Learned counsel for the Revenue before this Court argued that the assessee has furnished return of the block assessment period on the basis of note book KPS-5 recovered during survey operations at the premises of Sujata Hotel Pvt. Ltd. where the office cabin of the assessee is located. The note book has been written by Sri Hardeo Singh, but at the instance of the assessee. Not only the note book K....
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....he premises of another assessee. Such finding is vitiated, inter alia, for the following reasons: 14. Firstly, the assessee has referred to note book KPS-5 and undisclosed Saving Bank Account No.9266 while filing his block return for the assessment years 2001-02 and 2002-03. Once the assessee has himself relied upon the documents, which are said to have recovered from the premises of another assessee though from the cabin of the assessee in such premises, the assessee is estopped to say that the documents cannot be referred to or relied upon for framing assessment. 15. There is no dispute that there cannot be any estoppel against the Statute, but once a provision is made for the benefit of an individual, such benefit can always be waived as there is no public interest involved in waiving such right. Even if, the documents were recovered from the premises of Sujata Hotel Pvt. Ltd., but the assessee having filed his return on the basis of such documents, he cannot turn around to say that such documents cannot be referred to by the Assessing Officer while framing assessment for the block assessment. Reference is made to a decision of S. Raghbir Singh Gill v. S. Gurcharan Singh T....
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....viction) Act, 1972 negatived a contention advanced on behalf of the appellant therein that the said provision was for public benefit and could not be waived. It held that it is true that such benefit enacted under the said proviso covered a class of tenants, still the said protection would be available to a tenant only as an individual, hence, it gave the tenant concerned a locus poenitentiae to avail the benefit or not. It also held that the benefit given under the said section was purely personal to the tenant concerned, hence, such a statutory benefit though mandatory, can be waived by the person concerned. 14. From the ratio laid down by the Privy Council and followed by this Court in the above-cited judgments, it is clear that even though a provision of law is mandatory in its operation if such provision is one which deals with the individual rights of the person concerned and is for his benefit, the said person can always waive such a right. 15. Bearing in mind the above-decided principle in law, if we consider the mandatory requirement of issuance of notice under Section 28 of the Act, it will be seen that that requirement is provided by the statute solely ....
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.... wrong. (See Sushil Kumar v. Rakesh Kumar, (2003) 8 SCC 673, and Laxminarayan R. Bhattad v. State of Maharashtra, (2003) 5 SCC 413)." 18. A Constitution Bench in a judgment reported as Supdt. of Taxes v. Onkarmal Nathmal Trust, (1976) 1 SCC 766, held the benefit meant for a party can be waived. The Court held as under:- "26. .................. A procedural requirement imposed for the benefit or protection of one party alone has sometimes been construed as subject to implied exception that it can be waived by the party for whose benefit it is imposed. In that context, "waive" means that the party has chosen not to rely upon the non-compliance of the other party with the requirement, or has disentitled himself from relying upon it either by agreeing with the other party not to do so or because he has so conducted himself that it would not be fair to allow him to rely upon the non-compliance. 27. A distinction arises between the provisions which confer jurisdiction and provisions which regulate procedure. Jurisdiction can neither be waived nor created by consent. A procedural provision may be waived by conduct or agreement. In the case of Kammins Ballrooms Co., (1....
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....C No.9266 were in the control of the assessee though physically they were in the premises of Sujata Hotel Pvt. Ltd. The diary KPS-5 and the passbook of S.B. A/C No.9266 found from the premises of the Hotel were in the control of the assessee himself. 21. Section 158BB of the Act empowers the Assessing Officer to frame assessment of the block period on the basis of evidence found as a result of search. As discussed above, the diary, KPS-5 and undisclosed passbook of the S.B. A/C No.9266 though recovered from the survey of the premises of Sujata Hotel Pvt. Ltd., but not only the assessee had made a statement that his passbook and the cheque book are kept in the Sujata Hotel Pvt. Ltd but had also relied upon them while submitting his Block Return and had taken the said stand in his reply to the questionnaire. Still further, the Assessing Officer can take into consideration the other materials or information as are available with the Assessing Officer and relatable to such evidence recovered during the search operation. Therefore, such documents can be taken into consideration by the Assessing Officer. The documents taken into consideration are related to the search operation at the....
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....ly the survey was not illegal but also that the material collected was relied upon by the assessee himself to explain the basis of undisclosed income of Rs. 7,02,100/- for assessment years 2001-02 and 2002-03 shown in his block return, and therefore clearly relatable to evidence found as a result of search, etc. and, thus, was rightly made basis to frame block assessment by the Assessing Officer. 25. At this stage, several judgments referred to by the learned counsel for the assessee need to be noticed. One of the judgments referred to in this regard is in the case of Commissioner of Income-Tax V. G. K. Senniappan [2006] 284 ITR 220 (Mad). In such case, the search was conducted on the premises of A. P. Shanmugaraj, whereas the survey was conducted in the business premises of the assessee. It was found that only the evidence found, as a result of search or requisition of books of account or other documents, at the time of search can form basis of for computation of undisclosed income. 26. Similar is the judgments in the cases of Commissioner of Income-Tax v. Soora Subramaniam HUF (Individual) [2013] 353 ITR 298 (Mad); and Commissioner of Income-Tax v. S. Ajit Kumar [2008] 300 ....