TaxTMI 
TaxTMI 
2022 (5) TMI 167
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....(Appeals), Allahabad (hereinafter called "the CIT(A)"),for Block Period 01/04/1988 to 23/08/1998, the appellate proceedings had arisen before learned CIT(A) from separate Block Period assessment order(s)all dated 30.05.2002 passed by learned Assessing Officer (hereinafter called "the AO") for Block Period 01.04.1988 to 23.08.1998, under Section 158BC(c) read with Section 158BD of the Income-tax Act,1961(hereinafter called " the Act")respectively, with respect to all these three assessee's . Since these three appeals involve similar issues and common grounds of appeal(s), these three appeals were heard together and are disposed off by this common appellate order. We have heard both the parties through physical hearing mode in Open Court. 2(a). First, we shall take up assessee's appeal in ITA No. 128/Alld/2017, for Block Period 01.04.1988 to 23.08.1998. The grounds of appeal raised by assessee in her appeal in ITA No. 128/Alld./2017, for Block Period 01.04.1988 to 23.08.1998 in memo of appeal filed with Income-Tax Appellate Tribunal, Allahabad Bench, Allahabad(hereinafter called " the tribunal"), reads as under:- "1. Because the learned CIT(A) had erred in fact and law to....
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....issions were made before me in this regard' are contrary to the facts and material on record. 7. Because the Ld. CIT(A) has erred in law and on facts in confirming the following additions made by the Ld. Assessing Officer:- S.No Particulars Amount (Rs.) 1 Addition u/s 68 in AY 19964997 10,000 2 Addition u/s 69 in AY 1998-1999 as unexplained investment. 31,725 3 Addition in AY 1998-1999 as undisclosed income from share trading. 30,200 4 Addition in AY 1998-1999 as undisclosed brokerage income. 16,000 5 Addition in AY 1998-1999 as undisclosed interest income. 6,210 6 Addition u/s 69 in AY 1997-1998 as unexplained investment. 5,02,000 7 Addition u/s 69 in AY 1997-1998 as investment from unexplained source. 2,04,500 8 Addition u/s 69 in AY 1995-1996 as investment from unexplained source. 10,000 9 Addition u/s 69 in AY 1995-1996 as unexplained investment 5,50,000 10 Addition u/s 68 in AY 1991-1992 94,902 Total 14,55,537 8. Because the Ld. CIT(A) has erred in law and on facts in accepting the findings of the learned Assessing officer to the effect that-....
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....ued, captioned as " Notice under section 158 BC of the Income-tax Act 1961" in all other cases ( even the cases where the block assessment order tinder section 158 BC had duly passed on 31.08.2000 " h) although, no Notice under section 143(2) was issued by the Ld. JCIT, even after the appellant had filed the Block return under protest in Form No. 2B, the appellant had duly appeared before the Assessing Officer (Id. JCIT) and there was not even a whisper, at any point of time, that the proceedings ( that had been going on before him) were the proceedings under section 158 BD ; i) even before filing the return on 16.08.2000, the counsel of the appellant had appeared in the other cases (in pursuance of which the satisfaction is stated to have been recorded on 26th April, 2000 ) and in case of the appellant itself, and there was not even slightest of inkling that the proceedings has been initiated under section 158 BD; and j) plethora of other material; which led to the inescapable conclusion that no satisfaction as such was recorded on 26th April, 2000 and /or could be so recorded, so as to hold that the Notice dated 05.05.2000 was the notice under ....
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....CIT(A) has erred in law and on facts in holding that the provisions of sections 143(2), were not applicable to the block assessment proceedings and non-issuance of the said notice within a period of one year from the date of filing the block return on 16.08.2000 (in compliance with the (Notice dated 05.05.2000 under section 158 BC) did not affect the jurisdiction to complete the block assessment order within a period of two years, from the end of the month in which Notice dated 05.05.2000 had been issued. 16. Because the notice under section 143(2) was mandatory in nature and non issuance of the same within a period of one year from the month in which return had been filed in Form 2B i.e. August 2000, had the effect of terminating the proceedings with the expiry of August 2001 and the proceedings that were kept alive by issuing various Notices thereafter, are bad in law. 17. Because none of the aforesaid items of addition fall within the definition of undisclosed income as envisaged in Section 158B(B) of the I.T.Act 1961. 18. Because in any case various additions, as are comprised in the impugned block assessment order, are vitiated in law as the same hav....
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.... under section 158BC(c) stated to be read with Section 158 BD of the I.T.Act, 1961( for the first time written in the block assessment order) is also bad in law and without jurisdiction. 2. Because, the impugned appellate order dated 16.02.2017 as passed under section 250(6) confirming the said illegal block assessment order dated 30.05.2002 is also patently illegal, without jurisdiction and bad in law and, therefore, deserves to be quashed by this Hon'ble Court. The appellate order is also not sustainable for the reason that there is no application of mind by the Id. CIT(A) himself but simply relied upon the findings as recorded by the Assessing Officer on all the issues which is against the provisions of Section 250(6) of the I.T.Act,1961. 3. Because the time limit for completion of block assessment order was also liable to be held to have expired on 31.08.2000 itself and all the proceedings that have taken place thereafter (including completion of block assessment order dated 30.05.2002) is bad in law and accordingly deserves to be quashed by this Hon'ble Bench. 4. Because the view taken by the Id. CIT (A), to the effect that the proceedings ha....
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.... appellant. 27.(sic.28) Because the assessee was never served with any notice u/s 158BD by the assessing officer on the appellant consequently all the subsequent proceedings as flowing therefrom lacks jurisdiction and liable to be declared as illegal and void-abinitio by this Hon'ble Court. 28.(sic.29) Because the Ld. CIT(A) has failed to appreciate the fact that the addition as made by the Ld. AO is beyond the purview of the assessment completed u/s 158BC of the Act, as same is not based on any document/material found as a result of search, thus, the additions so made is beyond the scope of provisions of section 158BC and should have been deleted as such." 3. The brief facts of the case are that there was a search and seizure operations conducted by the Revenue under Section 132(1) of the 1961 Act, on 23rd August, 1998 at various residential premises in the following cases, detailed as hereunder: Residential premises i. Sri Surendra Prasad Agarwal, Sri Mahendra Prasad Agarwal 447,Malviya Nagar, Allahabad. ii Sri Manoj Kumar Agarwal, K.P. Kakkar Road, Allahabad. iii. Sri Mukesh Kumar Agarwal, K 104-HIG, Preetam Nagar, Allahab....
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....essee for grant of extension of time for filing of return of income for Block Period 01.04.1988 to 23.08.1998, vide letter dated 31st May, 2000, which was claimed by Revenue to have been served on the assessee on 5th of June, 2000. The assessee moved another application dated 1st June, 2000 seeking copy of seized material, copy of income-tax records etc.. The AO in reply vide letter dated 12th June, 2000 intimated to the assessee that copy of seized material had already been provided to the assessee, and so far as with regard to the certified copy of income-tax record, the AO requested assessee to furnish the Zerox copy of acknowledgement of receipt of the return of income filled by the assessee with the Revenue. The assessee on its part did not furnish return of income for the Block Period. Thereafter, the AO issued detailed notice and a notice under Section 142(1) on 25th July, 2000 to the assessee, which was claimed by Revenue to have been served on assessee, on 26th July, 2000. The AO vide aforesaid notice raised various queries and the assessee was asked to give replies on every issue so raised by AO in the aforesaid notice. Subsequently, on 3rd August, 2000 return of total in....
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....was issued by AO on 29.04.2002 fixing hearing on 03.05.2002, but again there was no compliance by assessee on this date as no body attended on behalf of the assessee. However, on 07th May, 2002, Shri Sidharth Pathak, Advocate attended and reply dated 07th May, 2002 was filed on behalf of the assessee. The AO discussed the case with ld. Counsel for the assessee. The AO asked assessee to produce Shri Ram Krishna Agrawal, to give confirmation of Shri Mahendra Agrawal and to give copy of pass book of Smt. Deepa and Sri Ashish, to whom the gifts were given by the assessee. The assessee was also directed by AO to give replies to all the queries as were made vide order sheet entry dated 14th February, 2002. The case was adjourned by AO to 09th May, 2002 . Nobody attended on behalf of the assessee on 09th May, 2002.Thus, the AO was left with no option but to complete the assessment on the basis of seized materials available with the AO, material available on record, various statements recorded at the time of search. The AO observed that throughout the course of assessment proceedings, the assessee never attended though specific directions were issued by AO that personal appearance was desi....
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....idering the objections raised by the assessee on the issue of limitation, disposed off such objections vide order u/s 158BE of the 1961 Act, dated 28.05.2002, which is reproduced as hereunder: "OFFICE OF THE ASSTT. COMMISSIONER OF INCOME TAX (CENTRAL) ALLAHABAD Name and address of the assessee: Smt. Asha. Agrawal Status: Individual Block Period 01.04.88 to 23.08.98 Time limit for completion of block assessment- Section 158 BE of the I.T. Act- Order regarding issue of limitation as per directions of Hon'ble High Court Of Allahabad in civil Misc. writ petition No. 1708 of 2002- M/s Agrawal Brothers and nine others, Vs AC1T (C.C.), Allahabad ---------------------------------------------------------------------------------------------------------------------- Dated : 28-5.2002 M/s Agrawal Bros., 174, Meerganj, Allahabad and 9 others had filed a combined writ before the Hon'ble High court of Allahabad vide civil Misc. writ petition No. 1708 of 2002. The above writ petition was decided by the Hon'ble High Court on 9.5.2002 and the orders are as under :- "Heard Sri Rajesh Kumar, Ld. Advocate for the petitionersand Sri....
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....oned under section 132 A In the case of any person, then,- (a) the Assessing Officer shall - (i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days; (ii) In respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997, serve a notice to such person requiring him to furnish within such time not being less than fifteen days but nor more than forty five days, as may be specified in the notice a return in the prescribed form and verified In the same manner as a return under clause (i) of sub section (1) of section 142, setting forth his total income including the undisclosed income for the block period; Provided that no notice under section 148 Is required to be issued for the purpose of proceeding under this chapter.: Provided further that a persons who has furnished a return under this clause shall not be entitled to file a revised re....
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.... Bros, and 9 others ( petitioners in the writ) and he therefore recorded the reasons for initiating proceedings under section 158BD of the l. T. Act,1961 . In all these 10 cases of the petitioners vide his satisfaction note dated 26.04.2000. Notice under section 158BC of l.T. Act was, accordingly, issued on 5.5.2000 and was served, with the request to file a true and correct return of total income including undisclosed Income within 16 days of service of notice . The assessee moved application dated 01.06.2000 seeking copy of seized materials, copy of Income-tax records etc. In reply vide letter dated 12.06.2000 it was intimated to assessee that copy of seized material had already been provided and with regard to certified copy of Income-tax records he was requested to furnish zerox copy of acknowledgement receipt of returns filed by her. The assessee did not furnish the return for the block period. Thereafter detailed notice and notice under section 142(1) was issued and, subsequently on 16.8.2000 return for block period was filed showing total undisclosed income at NIL Thus it is clear that the proceedings were initiated u/s 158 BD of the l.T. Act on the basis o....
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.... This circular provides that the A.O. shall proceed to determine the undisclosed income of the block period and the provisions of the Section 142, sub section 2 and 3 of Section 143 and 144 shall apply accordingly. I have considered the contention of the assessee in this regard also. Section 143 (2) provides as under "(2) where a return has been made under Section 139, or in response to a notice under Sub Section (1) of the Section 142, the A.O. shall, if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub section shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished.' So section 143 (2) mainly applies where return of income is filed u/s 139 or in response to a notice u/s 142(1). Presently in th....
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....l Circle) Allahabad Copy to the assessee. Sd/- ACIT(Central Circle), Allahabad" 3.7 So far as show cause notice dated 10th May, 2002 issued by the AO ( placed in paper book filed on 22nd February, 2021 by assessee, on Page No. 20-21), the assessee chose not to file any reply whatsoever before the AO . The AO observed that the assessee has nothing to say on merits and is agreeing on the proposed additions as per SCN, dated 10.05.2002. These additions were mainly proposed by the AO based on the seized material . The AO was constrained to make the additions to the income of the assessee on merits to the tune of Rs. 14,55,537/- as undisclosed income for the block period 01.04.1988 to 23.08.2008 under various heads, vide Para No. 8 to 17 of the assessment order dated 30.05.2002 passed by the AO u/s 158BC(c) read with Section 158BD of the 1961 Act. The additions as were made by AO on the merits of the issue in the assessment order dated 30.05.2002, are summarized hereunder: a) An addition of Rs. 10,000/- was made by the AO with respect to credit appearing in the name of Sri Ram Krishna Agarwal as the assessee could not demonstrate compliance of Section 68 of....
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....nder Chapter XIVB of the 1961 Act,vide Block Period assessment order dated 30.05.2002. e) The AO made addition of Rs. 6,210/- being interest income earned by the assessee which was not disclosed by the assessee, which stood added to the income of the assessee as an undisclosed income for ay: 1998-99 by the AO under Chapter XIVB of the 1961 Act,vide Block Period assessment order dated 30.05.2002. f) The AO made addition of Rs. 5,02,000/- (Rs. 52,000/- + Rs. 60,000/- + Rs. 13,000/- + Rs. 60,000/- + Rs. 60,000/- + Rs. 2,57,000/- ) to the income of the assessee as undisclosed income for ay: 1997-98 under Chapter XIVB of the 1961 Act by invoking provisions of Section 69 of the 1961 Act, as the assessee could not explain the sources of investment made, vide Block Period assessment order dated 30.05.2002. The AO noted that the assessee has received brokerage income of Rs.16,155/- from Paced Capital Investment Consultant as per page 14 of seized annexure A-11, on these investments . The AO also observed that the assessee could not explain identity, creditworthiness and genuineness of the persons in whose name the investments were made. g) The AO made addition of ....
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....spect to non-explanation of sources of credit of Rs. 50,000/- and Rs. 44,902/- as appearing in seized material ( page 6 of seized annexure A-180), which was alleged by AO to be received by assessee in cash from M/s. M. K. Brothers. On being asked by the AO to give assessment particulars of M/s. M.K. Brothers, the assessee submitted vide reply dated 07.05.2002 that she is not concerned with this concern namely M/s M.K. Brothers, which led AO to make aforesaid additions as in view of the AO, the reply of the assessee is evasive. 4.1 Aggrieved by Block Period Assessment order dated 30.05.2002 passed by AO under the provision of Section 158BC(c) read with Section 158BD of the 1961 Act, the assessee filed first appeal before ld. CIT (A) . The Ld. CIT(A) passed an appellate order dated 28.09.2006 in appeal No. 40/ACIT/CC/Alld/ 2003-04, wherein Ld. CIT(A) quashed the Block Period assessment order dated 28.09.2006. It is pertinent to mention here that this appellate order was passed by Shri R. K. Jain on 28.09.2006, who has claimed to be holding charge of CIT(A), Allahabad, but as we see later in this order that he infact did not held the charge of CIT(A), Allahabad, on 28th September, ....
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....in claiming to be CIT(A), Allahabad in the case of instant assessee was a nullity in-limine. The ld. CIT(A) further held that the impugned proceedings in the instant cases were infact proceedings u/s 158BD of the 1961 Act, and the proceedings were initiated against the assessee through the issue of notice u/s 158BC of the 1961 Act . The ld. CIT(A) observed that merely not mentioning the fact that the said notice was issued read with Section 158BD, would not vitiate the proceedings. Reference was made by ld. CIT(A) to the decision of Madras- tribunal in the case of L Saroja v. ACIT 71 TTJ(2001) ((2001) 76 ITD 344(Mad.-trib.), as the Ld. CIT(A) observed that satisfaction was duly recorded by the AO on 26.04.2000, the conditions for issue of notice was duly fulfilled. Thus, the ld. CIT(A) upheld the notice dated 05th May, 2000 issued by the AO u/s 158BC and also upheld that the said notice was issued by AO with in the limitation period prescribed under the statute . So far as the grievance of the assessee that notices under Section 143(2) was not issued within the prescribed time, the ld. CIT(A) observed that the notice u/s 158BC was issued on 05.05.2000 by AO requesting the assessee ....
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....1), on 23rd August, 1998, in the Case of Sri Surendar Prasad Agrawal and other persons.The ld. Counsel for the assessee submitted that the assessee was not searched by Revenue . The Ld. Counsel for the assessee also submitted before the Bench that additional grounds of appeal has been filed by the assessee, and prayers were made to admit these additional grounds of appeal raised by assessee. The ld. Counsel for the assessee submitted that it transpired only after inspection was carried out by the assessee of the records that that there was no satisfaction note recorded by Revenue before invoking provisions of Section 158BD of the 1961 Act. The ld. Counsel for the assessee submitted that no notice under Section158BD was issued by AO. It was submitted that the Department is not able to provide satisfaction note recorded before invoking provision of Section 158BD read with Section 158BC of the 1961 Act. The ld. Counsel for the assessee submitted that order-sheet entries as recorded by Department are placed on record which clearly reveals that no satisfaction note was prepared by Revenue (Placed at Page No. 9 to 12 of the paper book filed on 17th June, 2021).The Ld. CIT-DR submitted in....
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....in the said order sheet entry. The ld. Counsel for the assessee relied upon following judgment and orders to support its contentions, as under: a) Hon'ble Supreme Court judgment and order dated 24.04.2018 in the case of Tapan Kumar Dutta v CIT, in Civil Appeal No. 2014 of 2007 b) Judgment and order dated 07.08.2014 of Hon'ble Delhi High Court in the case of Pepsi Foods Private Limited v. ACIT, in W.P. (C) 415/2014 & CM 823/2014 & Ors. c) Judgment and order dated 30.05.2011 of Hon'ble Delhi High Court in the case of CIT v. Radhey Shyam Bansal & Ors., in ITA no. 582/2008 & Ors.. d) Judgment and order dated 02nd December, 2014 of Hon'ble Karnataka High court in the case of CIT v. Srinivasa & Brothers, in ITA no. 817 of 2009. 6.2 The ld. Counsel for the assessee next raised the contention that no notice u/s 143(2) was issued by the AO within the limitation period and hence the entire proceedings are bad in law. The ld. Counsel for the assessee relied upon the decision of Hon'ble Supreme Court in the case of ACIT v. Hotel Blue Moon(2010)321 ITR 362(SC). It was submitted that return of income for the block period was submitted on 03.08.2000, while n....
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....Agarwal, K 104-HIG, Preetam Nagar, Allahabad ` iv. Sri Amar Nath Agarwal/ Sri Behari Lal Agarwal, Lakhpat Rai Road, Allahabad v. Sri Pramod Kumar Agarwal, Zero Road, Allahabad vi. Sri Mahabir Prasad Agarwal, Roashan Bagh, Allahabad The search operations under the provisions of Section 132(1) of the 1961 Act were also conducted by Revenue at the places where above noted person(s) were carrying out their business activities. During the course of search operation conducted by Revenue u/s 132(1) of the 1961 Act, various books of accounts and documents were found and seized by Revenue . The jurisdiction of the above cases were with the Joint Commissioner of Income Tax (Assessment)Special Range, Allahabad. After examination of the seized books of accounts and documents, the Joint Commissioner of Income-tax(Assessment), Special Range, Allahabad was satisfied that the undisclosed income as was recorded in some of such seized books of accounts pertained to the assessee,and he recorded the reasons for initiating proceedings under Section 158BD of the 1961 Act, in the case of the assessee vide his satisfaction note dated 26th April, 2000. Incidentally, the afores....
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.... 3rd August, 2000 return of total income including undisclosed income, for the block period 01.04.1988 to 23.08.1998 was filed by the assessee in the prescribed form, showing total undisclosed income of the assessee for Block Period 01.04.1988 to 23.08.1998, at Rs. Nil. The complete reference to proceedings before the AO are enumerated in detail by us in the preceding para's 3.4 to 3.7 of this order, which are not repeated again to avoid duplication. The AO finally passed assessment order dated 30th May, 2000, u/s 158BC(c) read with Section 158BD of the 1961 Act, computing undisclosed income of the assessee under Chapter XIV-B of the 1961 Act for the Block Period 01.04.1988 to 23.08.1998, at Rs. 14,55,537/-. The AO also passed an order u/s 158BE (reproduced in para 3.6 above in this order and is not repeated to avoid duplication) holding that the Block Period Assessment Order, can be passed within 2 years from the end of the month in which notice u/s 158BC, dated 05th May, 2000 was issued to the assessee. The AO also held that the return of total income including undisclosed income for the Block Period 01.04.1988 to 23.08.1998 was not filed by assessee in time and hence the same wa....
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....ate, are as under: a) That no satisfaction note was recorded by AO, while initiating proceedings under Chapter XIV-B against the assessee, and hence the proceedings are bad in law liable to be quashed. b) That there was no search conducted by Revenue against the assessee, u/s 132(1) of the 1961 Act and no warrant of authorization was issued by Revenue against the assessee, and hence no Block Period assessment under Chapter XIV-B could be framed by Revenue against the assessee. c) That no notice u/s 158BD of the 1961 Act was issued by AO. That notice dated 05.05.2000, u/s 158BC was issued without mentioning section 158BD in the notice, nor the assessee was informed by AO that proceedings were initiated against the assessee u/s 158BD of the 1961 Act, and hence the proceedings are bad in law liable to be quashed. d) That no notice u/s 143(2) was issued by AO within the limitation period provided under the 1961 Act, and hence the proceedings are bad in law liable to be quashed. e) That Block Period assessment order dated 30.05.2002 framed by AO u/s 158BC was beyond the time limit provided under the 1961 Act, and hence the proceedings are bad....
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....tisfaction was duly recorded by the then AO viz. Joint Commissioner of Income Tax(Assessment), Special Range, Allahabad, on 26.04.2000, which found mentioned in the assessment order dated 30.05.2002 passed by AO u/s 158BC(c) read with Section 158BD of the 1961 Act, but the satisfaction folder is presently not readily available mainly owing to long gap of time of almost 21 years. The law as laid down by Superior Courts as also plain reading of Section 158BD is very clear that if no satisfaction was recorded by the AO of the person searched that any undisclosed income as is reflected in the seized material prima-facie belonged to some other person, proceedings under Chapter XIV-B against such other person cannot be lawfully invoked. Reference is drawn to provisions of Section 158BD of the 1961 Act, as it stood at relevant time, which reads as under: "Undisclosed income of any other person. 158BD. Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, t....
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....proceedings for completion of assessment of a searched person under Section 158BC of the Act or during the stage of the assessment proceedings. It does not mean that after completion of the assessment, the assessing officer cannot prepare the satisfaction note to the effect that there exists income tax belonging to any person other than the searched person in respect of whom a search was made under Section 132 or requisition of books of accounts were made under Section 132A of the Act. The language of the provision is clear and unambiguous. The legislature has not imposed any embargo on the assessing officer in respect of the stage of proceedings during which the satisfaction is to be reached and recorded in respect of the person other than the searched person. 42. **** 43. **** 44. In the result, we hold that for the purpose of Section 158BD of the Act a satisfaction note is sine qua non and must be prepared by the assessing officer before he transmits the records to the other assessing officer who has jurisdiction over such other person. The satisfaction note could be prepared at either of the following stages: (a) at the time of or along with the initi....
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....rwal, K.P. Kakkar Road, Allahabad. iii. Sri Mukesh Kumar Agarwal, K 104-HIG, Preetam Nagar, Allahabad ` iv. Sri Amar Nath Agarwal/ Sri Behari Lal Agarwal, Lakhpat Rai Road, Allahabad v. Sri Pramod Kumar Agarwal, Zero Road, Allahabad vi. Sri Mahabir Prasad Agarwal, Roashan Bagh, Allahabad The search operations under the provisions of Section 132(1) of the 1961 Act were also conducted by Revenue at the places wher eabove noted person(s) were carrying out their business activities. During the course of search operation conducted by Revenue u/s 132(1) of the 1961 Act, various books of accounts and documents were found and seized by Revenue . The jurisdiction of the above cases were with the Joint Commissioner of Income Tax (Assessment)Special Range, Allahabad. The assessee was not searched by Revenue u/s 132(1) of the 1961 Act. But admittedly the AO of the searched persons viz. Joint Commissioner of Income Tax (Assessment)Special Range, Allahabad, was also the AO of the assessee. It is recorded in the assessment order dated 30.05.2002 in para 2/page 1 as under: "After examination of seized books of accounts and documents, the Joint Commis....
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....the question of limitation raised by the petitioners shall be decided as a preliminary one before passing any further order in the proceedings pending before the Respondents. The Respondents shall dispose off the case after hearing the Writ Petitioners recording reasons. The Writ Petition stands disposed off with the above observations. It is made clear that - we have not adjudicated on merits and contentions raised in the Writ Petition. Sd/- C.J. Dated : 09.05.2002 Sd/- J." Thus, the Hon'ble ....
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.... issued u/s 132(1) of the I.T. Act. In fact Search and seizure action U/S 132(1) of the Income Tax Act, 1961, was conducted on 23.08.98 at various premises pertaining to Sri Surendra Prasad Agrawal Group of cases and warrant under Section 132(1) of the I.T. Act were issued in following cases : Residential Premises (i) Sri Surendra Prasad Agrawal, Sri Mahendra Prasad Agarwal 447, Malgviya Nagar, Allahabad. (ii) Sri Manoj Kumar Agarwal, K.P. Kakkar Road, Allahabad. (iii) Sri Mukesh Kumar Agarwal, K 104-HIG, Preetam Nagar, Allahabad. (iv) Sri Amar Nath Agarwal/Sri Behari Lal Agarwal, Lakhpat Rai Road, Allahabad. (v) Sri Promod Kumar Agarwal, Zero Road, Allahabad (vi) Sri Mahabir Prasad Agarwal, Roshan Bagh, Allahabad. Search was also conducted at the places where above noted persons were carrying out their business activities.During the course of search various books of accounts and documents were found and seized. The jurisdiction over these case lied with Joint Commissioner of Income-tax,(Assessment)Special Range, Allahabad. After examination of seized books of accounts and documents the Joint Commissioner of In....
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....t the AO being a Government Gazetted Officer will have any reasons to falsify the accounts. Reference is drawn to provisions of Section 11, 16 and 35 of Indian Evidence Act, 1872, which read as under: "11. When facts not otherwise relevant become relevant.--Facts not otherwise relevant are relevant-- (1) if they are inconsistent with any fact in issue or relevant fact; (2) if by themselves or in connection with other facts they make the existence or non-existence of any fact in issue or relevant fact highly probable or improbable. 16. Existence of course of business when relevant.--When there is a question whether a particular act was done, the existence of any course of business, according to which it naturally would have been done, is a relevant fact. 35. Relevancy of entry in public record made in performance of duty.-- An entry in any public or other official book, register or 2 [record or an electronic record], stating a fact in issue or relevant fact, and made by a public servant in the discharge of his official duty, or by any other person in performance of a duty specially enjoined by the law of the country in which such book, re....
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....n pursuance to direction of Hon'ble High Court. The additions have also been made of undisclosed income in the case of the assessee based on seized material found and seized during the course of search operations. There is no reasons for us to accept that the AO being a Government Gazetted Officer while passing an order u/s 158BE, dated 28.05.2002 in pursuance to direction of Hon'ble High Court and also passing an assessment order dated 31.05.2002 u/s 158BC(c) and 158BD of the 1961 Act, will have any reasons to falsify the records by falsely recording that satisfaction was recorded that income as is emanating from seized material from the persons searched, prima-facie belonged to the assessee. The matter being very old almost 21 years ( satisfaction note dated 26.04.2000), there is every possibility that the said satisfaction note might have been misplaced or might have got tagged with other files ( of the searched persons or the other 9 petitioners against whom also the proceedings u/s 158BD read with Section 158BC were initiated). There is also no merit in the contention of the assessee that the order sheet entries in the assessment file of the assessee does not mention about the....
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....be framed by Revenue against the assessee. Chapter XIV-B provides for special procedure for assessments of search cases wherein undisclosed income in pursuance of search conducted u/s 132, or in the cases where books of account, other document or assets are requisitioned under Section 132A of the 1961 Act, is to be assessed to income-tax. The Block Period is defined u/s 158B(a) of the 1961 Act, while undisclosed income is defined u/s 158B(b) of the 1961 Act. The assessment of undisclosed income is to be done in the manner provided in Chapter XIVB in the case of the person searched in whose case warrant of authorization is issued . Further, Section 158BD provides that where the AO is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person and the provisions of this Chapter ....
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.... apply accordingly. Thus, once AO is satisfied that undisclosed income as is discernible from the seized material belonged to other persons, the AO has to record satisfaction and then hand over such seized material to the AO of such other person, to enable to proceed to frame Assessment against such other person, and in that eventuality Section 158BD itself provide that the provisions of Chapter XIVB shall apply accordingly. Section 158BD does not refer to any notice, while it is Section 158BC which provides that notice is to be served to such person requiring him to furnish return of income for the Block Period in the prescribed form. Section 158BD as was prevalent at the relevant time, read as under: "Undisclosed income of any other person. 158BD. Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such o....
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...., and no such objections were raised by the assesse during the course of assessment proceedings. Moreover, the assesse could not bring any material on record to justify that there was any prejudice cause to her or there was failure of justice, by merely not mentioning of Section 158BD in the notice dated 05th May, 2000 issued by AO under the provisions of Section 158BC. Further, even if it is presumed to be a defect in the issuance of notice u/s 158BC owing to non mentioning of Section 158BD in the said notice, it is a curable defect as Section 158BC is a procedural section, Reference is drawn to provisions of Section 292B of the 1961 Act . Refernece is also drawn to decision of Special Bench- Amritsar-tribunal decision in the case of Smt. Mahesh Kumari Batra v. JCIT, reported in (2005) 95 ITD 152(ASR)(SB) and decision of Madras-tribunal in the case of L. Saroja v. ACIT, reported in (2001) 76 ITD 344(Mad.) . Thus, there is no merit in the contentions of the assesse which are hereby rejected, and we hold that Notice u/s 158BC, dated 05th May, 2000 issued by AO, without mentioning Section 158BD, was a valid notice. We order accordingly. d)That no notice u/s 143(2) was issued by AO....
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....nd so far as with regard to the certified copy of income-tax record, the AO requested assessee to furnish the Zerox copy of acknowledgement of receipt of the return of income filled by the assessee with the Revenue. The assessee on its part did not furnish return of total income including undisclosed income, for the Block Period 01.04.1988 to 23.08.1998. Thereafter, the AO issued detailed notice and a notice under Section 142(1) on 25th July, 2000 to the assessee, which was claimed by Revenue to have been served on assessee, on 26th July, 2000. The AO vide aforesaid notice raised various queries and the assessee was asked to give replies on every issue so raised by AO in the aforesaid notice. Subsequently, on 3rd August, 2000 return of income including undisclosed income for the block period 01.04.1988 to 23.08.1998 was filed by the assessee, showing total undisclosed income of the assessee for Block Period 01.04.1988 to 23.08.1998, at Rs. Nil. Before proceedings further, it will be relevant to understand the scheme of Block Period assessment in case of searches as provided under Chapter XIV-B of the Act which lays down a special procedure for search cases, and is a complete cod....
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....ion 158BA(2) of the Act clearly states that the total undisclosed income relating to the block period "shall be charged to tax" at the rates specified under Section 113 as income of the block period irrespective of previous year or years. Under Section 113 of the Act, the undisclosed income is chargeable to tax at the rate of 60%. 28. From the above, it becomes manifest that Chapter XIVB comprehensively takes care of all the aspects relating to the block assessment relating to undisclosed income, which includes Section 158BA(2) as the charging section and even the rate at which such income is to be taxed is mentioned in Section 113 of the Act. No doubt, Section 4 of the Act is also a charging section which is made applicable on 'total income of previous year'. As per Section 2(45), 'total income' means the total amount of income referred to in Section 5, computed in the manner laid down in the Act. Section 5 of the Act enumerates the scope of total income and prescribes, inter alia, that it would include all income which is received or is deemed to receive in India in any previous year by or on behalf of a person who is a Resident. No doubt, undisclosed inc....
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.... If we see the scheme of assessment of income for the Block period under Chapter XIV-B, as mandated u/s 158BC, the AO can grant time to the assessee of not less than fifteen days from the date of service of notice, and maximum period of forty five days can be granted by the AO, for filing of return of total Income including undisclosed income for Block Period, in respect of search initiated or books of account or other documents or any assets requisitioned on or after the 1st day of January, 1997. In the instant case, the search was conducted by Revenue u/s 132(1) of the 1961 Act, on 23.08.1998, which is after 1st day of January, 1997. The provision of Section 158BC as were applicable at the relevant time, read as under: "Procedure for block assessment. 158BC. Where any search has been conducted under section 132 or books of account, other documents or assets are requisitioned under section 132A, in the case of any person, then, [(a) the Assessing Officer shall (i) in respect of search initiated or books of account or other documents or any assets requisitioned after the 30th day of June, 1995, but before the 1st day of January, 1997, serve a no....
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....24th May, 2000 before the AO requesting for extension of time, in filing of return of total income including undisclosed income, for Block Period ended 23rd August, 1998. The AO rejected said application of the assessee seeking extension of time in filing of aforesaid return of income by AO, vide letter dated 31st May, 2000, which was served on the assessee on 05th June, 2000. The AO issued notice u/s 142(1), dated 25th July, 2000, which was served on assessee on 26th July, 2000. The AO initiated the assessment proceedings vide aforesaid notice issued u/s 142(1), wherein several queries were raised and the assessee was directed to give replies. The upper most period of forty five days as allowed u/s 158BC for filing of return of total income including undisclosed income for Block Period, from the date of service of notice, in the instant case also expired on 22nd June, 2000 but the assessee did not filed any return of income within the aforesaid period of forty five days which expired on 22nd June,2000, while notice u/s 142(1) was issued by AO only on 24th July, 2000. The assessee did not even filed her return of income for Block Period, even on or before 24th July, 2000, and ultim....
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....he ingredients of genuine hardship must be determined keeping in view the dictionary meaning thereof and the legal conspectus attending thereto. Further, the Bombay High Court, in the case of Sitaldas K. Motwani v. DGIT (International Taxation) [2010] 187 Taxman 44/323 ITR 223, has held that while considering an application under section 119(2)(b), the term 'genuine hardship' has to be construed liberally and has held that CBDT cannot examine a refund closely to see if the claim succeeds. All that the CBDT can do is to verify if the case of the respondent/assessee needs consideration and does not suffer from apparent defect. The CBDT is not expected to go deep into the niceties of law. 17. The CBDT, in its order dated 16-1-2018, has not appreciated the reasons given by the respondent/assessee for the delay in filing the return of income nor has taken into consideration the documents produced by the respondent/assessee before rejecting the assessee's application seeking condonation of delay for filing its return of income for the assessment year 2014 - 2015 and that the same was beyond the control of the respondent/assessee. Further, the CBDT has examined the re....
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....erred to the said opinions, but has not taken the same into consideration while deciding the application of the respondent/assessee. 21. In the light of the aforesaid, this Court is of the opinion that the order passed by the learned Single Judge does not warrant interference. 22. However, Sri.Sanmathi, learned counsel for the department has stated before this Court that the present case will become time barred for the purpose of scrutiny and therefore, for the purpose of scrutiny and other proceedings, the right of the revenue to proceed ahead in accordance with law by taking into account the date of limitation from the date the order has been passed by the learned Single Judge may be protected. 23. The prayer made by the learned counsel for the Income-tax department appears to be genuine prayer and therefore, in the present case, for the purpose of scrutiny, if any, and for the purpose of other proceedings also, the limitation shall start from the date the order has been passed by the learned Single Judge." The assessee in the instant case did not sought any extension of time from CBDT, citing genuine hardship in delay in filing of return of total in....
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....earched, belonged to the assessee, wherein satisfaction note was prepared by the AO of the searched persons, on 26th April, 2000.Incidentally, the AO of the searched person is also the AO of the assessee. The assessments in the case of searched persons were concluded in August, 2000. The Revenue invoked provisions of Section 158BD against the assessee. The Notice u/s 158BC of the 1961 Act, was issued by the AO of the assessee, on 05th May, 2000, which was served on the assessee, on 08th May, 2000. The assessment is to be completed within a period of two years from the end of month in which notice u/s 158BC of the 1961 Act was served by the AO on the assessee, which in the instant case was served by the AO on the assessee, on 08th May, 2000, thus, the assessment for the Block Period ended 23.08.1998, in the instant case is to be completed latest by 31st May, 2002, as is provided u/s 158BE of the 1961 Act. In the instant case, the assessment order for the Block Period from 01.04.1988 to 23.08.1998 under the provisions of Section 158BC(c) read with Section 158BD, was passed by the AO, on 30th May, 2002, which is within the aforesaid limitation period of two years from the end of the m....
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....sub-section (1) shall be deemed to have been executed, (a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; (b) in the case of requisition under section 132A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer.]" The law as it stood at relevant time u/s 158BE is very clear. The proceedings initiated against the assessee were u/s 158BD. The notice u/s 158BC was issued by AO on 5th May, 2000, which was served on 08th May, 2000. The time limit for passing assessment for Block Period was two years from the end of month in which notice u/s 158BC was served, i.e. 31st May, 2002. The Block Period assessment order passed by AO u/s 158BC(c) read with Section 158BD, was dated 30th May, 2002, which is within limitation period. Thus, the contentions of the assessee are devoid of any merit and are hereby rejected. We order accordingly. f)That Shri R K Jain, the ld. CIT(A) passed an appellate order dated 28.09.2006 against the assessee quashing the Block Period assessment framed against the assess....
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....), which was submitted in pursuance of direction of CAT, was dismissed by CBDT vide orders dated 22.09.2006 which was served on him on 26.09.2006. On the same day successor in office Shri Assem Kumar assumed charge as CIT(A), Allahabad, which led to inference that order of transfer dated 31.5.2006 became operative after rejection of the representation of the then CIT(A), Shri R K Jain i.e. on and after 22.9.2006, or at least when the said order was communicated to him i.e. 25.09.2006, and since then he had no authority or jurisdiction to function as CIT(A), Allahabad . Instead he was obliged to assume his duty as CIT, ITAT, Allahabad where he was transferred . The Hon'ble Allahabad High Court held that, on 03.10.2006 in that matter which was before Hon'ble High Court in the case of ITA No. 14 of 2008 titled Dr. Vinod Kumar Rai v. ITAT, Allahabad & others ii) ITA No. 476 of 2007 titled Sri Subhash Chandra Kesarwani v. ITAT, Allahabad (302 ITR 148, that when Shri R K Jain passed appellate order as CIT(A) on 3rd October, 2006, he did not had the jurisdiction whatsoever to function as CIT(A), Allahabad. This judgment and order of Hon'ble Allahabad High Court is concerning discharge of ....
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.... the assessee as undisclosed income, which was later confirmed by ld. CIT(A), on merits are not sustainable in the eyes of law. We have observed that the assessee has not filed any submissions on merits of the additions made by the AO to the income of the assessee before the ld. CIT(A), and even before us no submissions were made on the merits of additions made to the income of the assesssee. The ld. CIT(A) passed a non speaking cryptic order confirming additions made by the AO vide appellate order dated 16th February, 2017, by holding as under: "5. Issue No. 3 On merits: Since no specific submissions have been made before me in this regard. I have no reasons to interfere with the detailed finding given by the AO. These while making the impugned additions are based on the seized/search material. The additions so made are, therefore, confirmed." We have observed that ld. CIT(A) dismissed the appeal of the assessee on the merits of the additions made by the AO in limine without discussing the issues on merits which were raised by the assessee in its appeal filed before ld. CIT(A). The reference is drawn to provision of Section 250(6) of the A....
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.... in this order.Thus keeping in view the entire facts and circumstances of the case as discussed above and in fairness to both the parties with a view to grant justice, we are inclined to set aside and remand the matter back to the file of ld. CIT(A) limited to adjudication of issues concerning additions to income made by the AO, to be adjudicated on merits and in accordance with law. Needless to say that ld. CIT(A) will give proper and adequate opportunity of hearing to the assessee in set aside remand proceeding as directed by us limited to adjudication of issues arising from additions to the income made by the AO, in accordance with the principle of natural justice and in accordance with law.The ld. CIT(A) is directed to pass reasoned and speaking order, while adjudicating the appeal of the assessee denovo as directed by us, limited to additions to income as were made by the AO. The evidences /explanations submitted by the assessee shall be admitted by ld. CIT(A) in accordance with law and be adjudicated on merits in accordance with law. We also clarify that we have not commented on the merits of the additions to the income made by the authorities below and all contentions so far....