AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 324
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....,000/- by treating the deposits made by the members of the society as unexplainable as done by the assessing officer." 3. During the course of appellate proceedings before this Tribunal the assessee also raised following additional grounds of appeal: "1.On the facts and in the circumstances of the case and in law, Ld. Assessing Officer erred in making the addition of Rs. 20,00,000/- and passing the impugned assessment order under section 153C rws 143(3) without reference to any incriminating material found and seized from the searched persons during the conduct of their search. 2. On the facts and in the circumstances of the case and in law, Ld. Assessing Officer erred in making the addition of Rs. 20,00,000/- and passing the impugned assessment order under section 153C rws 143(3) without reference to satisfaction recorded by the Assessing Officer of the searched persons and without supplying a copy of the said satisfaction to the appellant from the file of searched persons in whose case assessments were completed under section 153A. 3. On the facts and in the circumstances of the case and in law, Ld. Assessing Officer erred in making the addition of R....
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....uld decide the issue of admissibility of additional grounds taken by the assessee. 7. Ld. counsel for the assessee submitted that the additional grounds are legal in nature. They can be raised at any stage. He vehemently argued that in the light of the judgments relied by the assessee these grounds deserve to be admitted and allowed. Ld. counsel further reiterated the submission as made in the synopsis. The submissions of the assessee are reproduced as under: A. Additional Grounds of Appeal For all the three years under appeal i.e. A.Y. 2005-06 to 2007- 08, assessee has filed additional grounds of appeal through a separate application dated 07.09.2018 which are legal grounds on fundamental issue of jurisdiction going to the root of the matter. Assessee prays that these grounds of appeal may please be admitted in the interest of natural justice and appropriate adjudication of the matter. 1. Instant proceedings are the second round of appeal before the Hon'ble ITAT Bench of Indore after the matter was set aside by the Hon'ble Bench to the file of AO vide order pronounced on 03.09.2012 in appeal nos. IT(SS)A 300 to 302/Ind/2012.[refer PB 209 - 214] ....
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....case of searched persons,viz.Mohd. Atique, Mohd. Shafique and M/s. Ekta Transport Company. [copy annexed to this submission] 5. As per the law enshrined in section 153C which relates to assessment of income of any other person, it is the 'satisfaction' of the Assessing Officer of the person searched which is sine qua non for acquiring the jurisdiction u/s 153C. Only when 'satisfaction' has been recorded by the Assessing Officer of the person searched who alone is required under the law to record such satisfaction, even though 'satisfaction' has been recorded by the Ld. Assessing Officer of the assessee and therefore, in terms of law enshrined in section 153C such a recording of satisfaction does not clothe the Assessing Officer with the jurisdiction to initiate proceedings u/s 153C and consequently to frame any assessment u/s 153C rws 143(3). In the instant case, Ld. Assessing Officer of the assessee issued notice u/s 153C for the impugned assessment years on 16.09.2008. In other words, at the first stage, the AO of the person who has been searched must arrive at a satisfaction that the assets or documents seized does not belong to the sear....
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....f the said appeals. Their admittance shall help appellant in getting justice. 4. Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 reads - "The appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal under this rule : Provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground." Tribunal is under statutory obligation not only to entertain plea but also to decide the same after providing sufficient opportunity of being heard to the other side. 5. There are direct decisions which deal with the subject matter of this submission relating to admission of additional ground in the second round of appellate proceedings before the Hon'ble Tribunal. These are in addition to and in continuation of the case law paper book already on record. A Case Law Paper Book - Volume 2 has been furnished with th....
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....hese grounds were in respect of subject-matter of entire tax proceedings - Held, yes" [emphasis supplied] d) Hon'ble Gujarat High Court in the case of P.V. Doshi - [1978] 113 ITR 22 - HELD - "...............as the Tribunal had failed to notice this material distinction between a mere procedural provision which could be waived and such jurisdictional provision or a mandatory provision enacted in public interest which could not be waived, because by consent no jurisdiction could be conferred on the authority unless the conditions precedent were first fulfilled. The Tribunal's view was clearly erroneous that the matter became final when the Tribunal passed the earlier remand order so that this point of jurisdiction got finally settled, which could not be agitated unless the assessee had come in the reference to the High Court at this stage. The Tribunal's view was also incorrect that in restoring the case to the file of the ITO by the earlier order, the only point left open was in respect of addition on merits and that the legal or jurisdictional aspect whether the re-assessment proceedings were legally initiated was not kept open. Even the Tribual's view was erroneous th....
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....lied by the Ld. counsel for the assessee are distinguishable. The Ld. CIT-DR further submitted that the assessee ought to have been vigilant and should not be allowed to raise the stale issue at such belated stage. 9. We have heard the rival submissions and perused the materials available on records. There is no dispute with regard to the fact that the issue so raised goes to the root of the jurisdiction. Ld. counsel for the assessee has drawn our attention to the judgment of the Hon'ble jurisdictional High court in the case of Nandlal Sachdeva vs. CIT (2012) 19 ITJ 361. The Hon'ble Court has decided this issue as under: "10. The issue with regard to legality of proceedings undertaken u/s 154 after issue of notice u/s 143(2) is a purely legal issue can be raised at any stage. This issue was not raised by the assessee in the first round of appeal either before the CIT(A) or before the Tribunal. On the ground of notice u/s 143(2) having not been issued, the Ld. CIT(A) in the first round of appeal has annulled the assessment, However, in further appeal filed by the Revenue before the Tribunal, it was held by the Tribunal, vide order dated 3.6.2008 that notice was i....
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....itself it to be seen. The powers of the Tribunal are vested under section 254 of the Income Tax Act. Section 254(1) of the Income Tax Act, 1961 provides thus, " 254(1) the Appeal Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit." The appellate Tribunal after extending both the parties an opportunity of being heard, can pass such orders thereon as it think fit. Meaning thereby the Tribunal is empowered to decide the legal issue and also other issues based on facts. The powers of the tribunal are very wide. The legislation has given wide powers to the Tribunal under section 254(1). A similar question was considered by the Gujarat High Court in Saurashtra Packaging Pvt. Ltd. CIT (1993) 204 ITR 443)(Guj) in which the division bench of Gujarat High Court held thus: . In our opinion, the contentions raised on behalf of the assessee deserve to be accepted. Though reliance was placed by the assessee on the dissolution deed before the ITO for a different purpose, the fact remains that a copy of the dissolution deed was on the record of the case. As pointed ....
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.... on record, then in the aforesaid circumstances the Tribunal itself ought to have decided the matter itself. Apart from this, the matter relates to the assessment year 2000-01. Earlier the matter was remanded by the Tribunal vide Annexure A-4 on 3.6.2008 and a sufficient period has elapsed in the proceedings and at this juncture if the matter is remanded to decide the aforesaid legal issue, then it will be the another round of litigation. To save time, money and energy, it would be appropriate if the Tribunal is directed to decide on the aforesaid legal issue. In view of the aforesaid we find that the Tribunal erred in remanding the matter to the CIT(A) and accordingly the aforesaid part of the order is hereby set aside and the matter is remanded back to the Tribunal to decide it afresh, in accordance with law. However, while setting aside the aforesaid order, we observe that in case after hearing both the parties, the Tribunal still records an opinion that the matter deserves to be remanded back to decide the issues. The tribunal shall be freed to pass such order, after giving its reasons in this regard. 10. Further, reliance has been placed on the judgments o....
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....irst time, so long as the relevant facts are on record in respect of the item. From the above position it is clear, that if the material is on record on the basis whereof objection can be raised, the parties to the appeal cannot be precluded from raising such contention, especially the respondent, in view of Rule 27 of the ITAT Rules, 1963, quoted above. We are, therefore, of the considered view that both questions No. 3 and No. 4 in the Department's appeal deserve to be answered against the Department. In view of the wide powers that the Tribunal is invested with, as clearly referred to and spelt out by their Lordships in their decision in National Thermal Power Co. Ltd. (supra), the Tribunal cannot be precluded from considering the questions of law arising in an assessment proceeding not raised earlier, and restricted to issues arising out of appeal before the CIT(A). The assessees have also filed appeal from item Nos. 14 to 26 captioned above. Though a large number of questions have been raised by the assessees, the appeals have been admitted on the following questions, as formulated in IT Appeal No. 112 of 2003. (i) Whether the Tribunal was justified in dismissing ....
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....182 to 185/Ind/2016 dated 19.09.2018 and decision of the Delhi Tribunal rendered in the case of Jay Dee Securities & Finance Ltd (2017) 88 taxmann.com 626. Ld. Counsel submitted that the assessee is a cooperative society vide Registration No.D978 dated 29.4.2004 with main object to collect amount from members to purchase land. The land so purchased is then developed and divided units are allotted to the members of the society. 13. Ld. Departmental Representative opposed the submission and supported the orders of lower authorities. Ld. DR submitted that there is a categorical reference to the incriminating material related to the society. 14. Ld. Counsel for the assessee submitted that the reference is related to the objectives of the society which cannot be termed as incriminating material. As such no evidence has been gathered during the course of search. 15. We have heard rival contention and perused the records placed before us. We find that the A.O has made addition by observing as under; 7. It is noticed hat in this ease assessee has not submitted even a single paper as additional evidences. The submissions made by the assessee were already considered b....
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....rson. However, the revenue has grossly failed to furnish the satisfaction note recorded by the assessing officer of the searched person. He submitted that the law is clear on this issue as per section 153C. The assessing officer of the searched person is required to record a satisfaction note in case the material found during the course of search does not relate to the searched person. The assessing officer of the searched person is required record a satisfaction in this regard and transmits the record to the assessing officer of the other person. Ld. counsel submitted that the issue is squarely covered by the judgment of jurisdictional High Court rendered in the case of CIT vs. Mechmen (2015) 60 taxmann.com 484 (MP). 18. On the contrary, Ld. CIT-DR opposed these submissions and supported the orders of the authorities below. He placed reliance on the judgment of Hon'ble Delhi High Court rendered in the case of Ganpati Fincap Services Private Limited (2017) 82 taxmann.com 408. In rejoinder Ld. counsel for the assessee submitted that in fact the judgment relied by the revenue helps the assessee. He drew our attention to paragraph no.26 & 27 of the judgment of the Hon'bl....
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....n even where he is also the AO of the other person. In such event, the AO need make only one satisfaction note. That satisfaction note is qua the other person. Further it is sufficient that such satisfaction note is placed in the file of the other person by the AO in his capacity as the AO of such other person." 20. For the sake of clarity section 153C of the Act is reproduced as under: In section 153C of the Income-tax Act, in sub-section (1), with effect from the 1st day of June, 2015 for the portion beginning with the words and figures "Notwithstanding anything contained in section 139" and ending with the words "the Assessing Officer having jurisdiction over such other person", the words, figures, brackets and letters "Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a pe....