TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 141
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....bmit that the questions proposed by the Revenue at page nos. 6 to 9 of the paper book of Income Tax Appeal No. 72 of 2014 are substantial questions of law and hence, the Appeal deserves to be admitted. 4. He would submit that the Tribunal has noted that Jai Corp group is a partner in 'Mumbai Special Economic Zone' and 'Navi Mumbai Special Economic Zone' projects of India. This group has floated various companies to purchase large chunks of land in the vicinity of Special Economic Zones. The group's real estate operations were being handled by Viredra Jain, Gaurav Jain and Dilip Dherai. Dilip Dherai was also managing land deals outside Mumbai Special Economic Zone. The assessee in Income Tax Appeal No. 72 of 2014 is one of the companies floated by this group to purchase land outside Mumbai Special Economic Zone. 5. On 5th March, 2009, a search action under Section 132 of the Income Tax Act, 1961 (for short, "the IT Act") was carried out in the case of this group, it's employees and close associates. They were involved in the process of acquiring land. During search of Dilip Dherai's residence, certain incriminating documents were seized and his statemen....
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....r of the Commissioner of Income Tax (Appeals) pertaining to the Assessment Year 200809 holding that the action under Section 153C of the IT Act was bad in law. 7. It is this conclusion of the Income Tax Appellate Tribunal which is assailed in this Appeal by the Revenue. Mr. Singh would submit that right from the beginning, the facts were clear. If the Income Tax Appellate Tribunal proceeded on an erroneous assumption that the Revenue is not disputing the position as pointed out by the assessee, then, that foundation for the ultimate conclusion is bad in law and on the face of it. There is no question of any consent or 'no objection' by the Revenue when the facts were clear. If the conclusion is de hors the facts, it denotes complete error of jurisdiction. It is in these circumstances that relying upon the findings in the order of the Assessing Officer and the Commissioner of Income Tax (Appeals), Mr. Singh would submit that the grounds raised by the Revenue in the present Appeal should be entertained and appropriate orders to subserve the larger interest of justice be passed. 8. On the other hand, Mr. Joshi appearing on behalf of the assessees in all these Appeals would r....
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....s and in the circumstances of the case and in law, the Tribunal was justified in quashing the order made under Section 143(3) of the Act by holding that Shri Dilip Dherai is an unrelated person to the assessee when the evidences discovered in the course of search operation and statements recorded under Section 132 (4) of the Act and other facts marshaled, as brought out in the assessment order and appellate order or the Ld. CIT (A) clearly show that Shri Dilip Dherai was actually working for and on behalf of the assessee as part of a larger common group with a common agenda? (ii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the additions made under Section 69C of the Act both on merits and point of law? (iii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in making incorrect observation that the Revenue has not brought on record a single statement of the vendors of land and sellers, and have not examined to substantiate the claim of extra cash actually changing hands, where as the independent evidences gathered and statements recorded in respect of M/s. Pathik Const....
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....hing of the order of the Assessing Officer under Section 143(3) of the Act by the Tribunal. Similarly he relies upon the challenge to the deletion of the addition made under Section 69C of the Act on merits and on point of law. The aforesaid questions do not bring out the challenge to the issue of jurisdiction. Nor is there any ground in support of the same. 6. We expect the Commissioner of Income Tax to examine this issue and put a record how this has happened and the corrective measures being taken by them to ensure that a considered view is taken in respect of the orders of the Tribunal which are being challenged before this Court. This casual attitude in filing of appeals leads to uncalled for harassment of the assessee and undue encroachment on scarce judicial time in the context of the large number of pending appeals. 7. The Registry is directed to forward a copy of this order to the Principal Chief Commissioner of Income Tax. 8. These appeals are at the request of the Revenue adjourned to 11th July, 2016." 10. Then these Appeals were placed on 1st August, 2016. On 1st August, 2016, after hearing both sides, this Court made the following order : "1. On the last date,....
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....e Act") are without jurisdiction. Therefore, the further questions raised on merits of the assessment appeared to be academic. In the above view, the appeals were adjourned so as to enable the Revenue to bring on record whether the decision to not challenge the finding of the Tribunal with regard to applicability of Section 153C of the Act, was an informed decision or not. Further, if it was an informed decision, then why challenge the other issues when the lack of jurisdiction has been accepted. We had also directed the Registry to forward a copy of the order to the Principal Chief Commissioner of the Income Tax. 3 Thereafter appeals reached hearing on 25th July 2016 for admission. At that time, the Revenue again sought time and appeals were adjourned to 1 August 2016. On 1 August 2016, an affidavit dated 25th July 2016 by Principal Commissioner of IncomeTax (Central)III was tendered. However, the Court found that the affidavit dated 25 July 2016 of the Principal Commissioner of Income Tax did not address the issues raised in its order dated 27 June 2016.Thus all the appeals adjourned to 9 August 2016 with direction to the Revenue to file a detailed affidavit addressing the issu....
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....peared to be academic. In the above view, the appeals were adjourned so as to enable the Revenue to bring on record whether the decision to not challenge the finding of the Tribunal with regard to applicability of Section 153C of the Act, was an informed decision or not. Further, if it was an informed decision, then why challenge the other issues when the lack of jurisdiction has been accepted. We had also directed the Registry to forward a copy of the order to the Principal Chief Commissioner of the Income Tax. 3 Thereafter appeals reached hearing on 25th July 2016 for admission. At that time, the Revenue again sought time and appeals were adjourned to 1 August 2016. On 1 August 2016, an affidavit dated 25th July 2016 by Principal Commissioner of Income-Tax (Central)III was tendered. However, the Court found that the affidavit dated 25 July 2016 of the Principal Commissioner of Income Tax did not address the issues raised in its order dated 27 June 2016.Thus all the appeals adjourned to 9 August 2016 with direction to the Revenue to file a detailed affidavit addressing the issues raised in order dated 27 June 2016. 4 The appeals thereafter reached hearing on 11 August 2016. At....
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.... alongwith the other Assessment Years on the basis that the Section 153C of the Act, would apply. Therefore, the Revenue ought to have raised the issue with regard to Tribunal being incorrect in holding that Section 153C of the Act applies to the Assessment Year 2009-2010. 4. In view of the above, the learned Additional Solicitor General seeks to add following additional question of law in all Appeals relating to Assessment Year 2009-10 i.e. Income Tax Appeal Nos. 72/2014; 114/2014; 122/2014; 124/2014, 225/2014 and 226/2014 for our consideration: Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT, Mumbai was right in holding that the action taken u/s. 153 C was bad in law, also for the 7th year/current year of the search i.e. A.Y. 2009-10 even when it does not fall under the ambit of provisions of section 153C of the IT Act, 1961?. 5. The Respondents-Assessee contests the claim made by the Revenue. In particular, it is pointed out that in all these Appeals relating to the Assessment Year 2009-10, the Commissioner of Income Tax (Appeals) has held that the provision of Section 153C of the Act applies to the Appeals relating to the Assessm....
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....on 254(2) of the IT Act. That is obviously a power vested in the Tribunal so as to correct the errors in its orders. Rather, that is a jurisdiction vesting in the Tribunal enabling it to rectify any mistake apparent from the record if that is brought to its notice by the assessee or the Assessing Officer. 16. It is apparent that this jurisdiction of the Tribunal can be exercised by it, now, within 6 months from the end of the month in which the order was passed, but prior to such insertion by Finance Act, 2016 w.e.f. 1st June, 2016, it could have been corrected within four years from the date of the order. 17. We are surprised that the Revenue was advised to move the Tribunal to seek rectification of the alleged mistake appearing on the face of the record in it's final order. However, prior to that, it was maintained by the Revenue before the Division Bench of this Court that no such application is necessary and even if any ground which was not raised by it before the Tribunal can now be raised in this Court for the first time if that is raising a pure question of law. We do not see any reason for the shift in this stand and we are, therefore, not surprised when the Division ....
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....ars 200708, 200809 and 2009-10. These Appeals were directed against the order of the learned Commissioner of Income Tax (Appeals) dated 27th October, 2011. The representatives of both sides, by consent, stated that there are 67 appeals pertaining to 52 different assessees, including the one before the Tribunal, which have been decided on identical facts. The issues are also common. That is how the Tribunal clubbed all the appeals together for the convenience sake. 20. The Tribunal noted the grounds of Appeal. It also noted the facts pertaining to the search and seizure action under Section 132 and the statement of Dilip Dherai. The Tribunal noted the fact that the entire land acquisition was looked after by Central Leadership Team of which Mr. Dilip Dherai, Mr. Anand Jain, Mr. Sanjay Punkhia and Mr. Ajit Warthy are key members. The Tribunal also referred to the seized documents. The Tribunal then referred to the order passed by the Commissioner of Income Tax (Appeals). Then the Tribunal noted the arguments of both sides. These arguments were noted in great details. Then, the Tribunal, in paragraph 18 and 19, held as under : "18. Thus it is clear that before issuing notice u/s. 15....
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....on. Therefore this plea of the Ld DR cannot be accepted. 19. Considering the entire facts and circumstances in the light of the impugned seized documents, we have no hesitation to hold that action taken u/s. 153C of the Act is bad in law." 21. Thereafter, in paragraph 20, the Tribunal considered the merits and once again, at great length. The particular argument revolving around the statement of Dilip Dherai and his answer to question No. 24 was also considered in paragraph 21 of the impugned order. Then, in paragraph 22, the Tribunal refers to the additions made under Section 69C. After reproducing Section 69C and adverting to the fact that Dilip Dherai has retracted his statement, the Tribunal arrived at the conclusion that merely on the strength of the alleged admission in the statement of Dilip Dherai, the additions could not have been made. The concurrent findings of fact would demonstrate that the essential ingredients of Section 69C of the IT Act enabling the additions were not satisfied. This is not a case of 'no explanation'. Rather, the Tribunal concluded that the allegations made by the authorities are not supported by actual cash passing hands. The entire de....