TaxTMI 
TaxTMI 
2023 (4) TMI 688
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is taken as the lead case. 2. Brief facts of the case is that the assessee is an individual and Partner in 14 Partnership Firms which are engaged in Construction, Trading of Commodities, Film Industry and deriving income from Business, Capital Gains and also Income from Other Sources. For the asst year 2006-07 the assessee filed his Return of Income on 31-07-2006 admitting total income of Rs.4,17,050/=. The return was processed under section 143[1] dated 06-12-2006 and refund was issued to the assessee. Thus there was no regular assessment u/s.143[3] of the Act. 2.1. There was Search action u/s.132 of the Act at the residential premises was commenced on 08.09.2011 and concluded on 09.09.2011 at 4.00 a.m. and no incriminating materials was found. Therefore Prohibitory order was passed on 09.09.2011 for the cupboard in the bedroom of Mr. Jay R. Patel [son of the assessee]. The said Prohibitory order was revoked on 15.09.2011 and continued with Search action, again nothing incriminatory documents were found to give rise to disclosure of undisclosed income. However, the Investigation Officer on 15.09.2011 showing the unauthenticated paper in his possession i.e. the code profile clie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....abad vide letter dated 01-01-2013 with a request to get details of foreign bank accounts held by the assessee with HSBC Geneva. In reply the Under Secretary [FT&TR-III][2] vide his letter bearing no. 504/0300/2012-FTD-1 dated 22-01-2013 stated in paragraph 2 that a reference for Administrative Assistance has been made to the Competent Authority under the provisions of "Exchange of information" under Indo-Switzerland Double Taxation Avoidance Agreement [DTAA]. Since the reference was made to the Competent Authority and the information was not received till 31- 03-2014, the limitation period to pass the assessment orders for the assessment years 2006-07 to 2012-13 gets extended by one year as per explanation [viii] to section 153B[1] of the Act. Therefore the one year from the end of 31-03-2014 shall get extended upto 31-03-2015 and therefore the notices issued are valid in law. 2.3. During the assessment proceedings again a statement u/s.131[1A] was recorded on 22-11-2013 from the assessee as follows: 11. Have you opened' any bank account with HSBC Geneva, either directly or through any of your agents or relatives? Ans:- No Sir, to the best of my knowledge and belief and ba....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed on oath and subsequently if it is found that you had made false affirmation, then you shall be subject to prosecution? You are therefore again asked to specify whether you are / were having the above mentioned bank account. Ans:- Sir, my replies to the questions are not false to the best of my knowledge, belief and my memory and I know that my replies should not be false in the statement recorded under oath. 2.4. Thus the assessing officer held that there was receipt of specific information that the assessee was holding and maintaining foreign bank account with client profile was created on 15-02-2005 along with the two persons namely Rashmikant V Bhalodia and Rajnikant M Bhalodia. Further based on the admission of Rs.39.6 crores by the assessee during the recording of statement under section 132[4] of the Act and the news report appearing in Indian express dated 09th February 2015 wherein details of independent investigation carried out by Washington-based International Consortium of Investigative Journalist [ICIJ] and the Paris based Le Monde News paper. The name of the assessee, as per the said report, is appearing at SR number 19 with balance of USD 69,08,661/= as the bal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere is no mention of any incriminating material in the statement recorded during the course of search on 08.09.2011 or subsequently in assessment order, which led to the addition of unexplained investment in bank account. Further, from the perusal of the assessment order, it is clear that during the course of search neither any material indicating the holding of any foreign bank account was found nor details / link of investment in HSBC Geneva. The AO has not made any reference in the assessment order in respect of any seized material. Had there been any material of incriminating nature, AO would have referred to it in the assessment order. Thus, it is abundantly clear that nothing was found in respect of HSBC Bank account during search and addition has been made without the backing of any incriminating material in connection with such alleged unexplained investments. 5.13 The second limb to this argument is that, whether voluntary disclosure of income made during search at the time of recording statement u/s 132(4) on revocation of PO in search constitute incriminating material? 5.14 In this regard, the AR of the assessee vehemently argued that since during the search, no incr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appreciated that no incriminating document was found during the course of search proceedings. It appears that the AO was also not sure of its own source of information and the veracity of the information on which heavy reliance is placed. 5.19 The AO till date has not been able to find/unearth any information regarding the purported offshore account of the appellant. It appears that upto the date, (FT&TR-1) Division has not been in a position to supply any positive information to the CIT(Central) in regard to the purported account. This is so even after the passage of more than eight years since the date of reference made by the Commissioner of Income tax (Central)-II Ahmedabad on 01.01.2013 to the JS(FT&TR-1) Division of the CBDT under DTAA 5.20, The AO has heavily relied on the so called "base document" in coming to the conclusion that the appellant has a Off Shore Account with HSBC Bank Geneva and that the amount of Rs.39.60 Crores was invested by the appellant in the said purported bank account with HSBC Bank Geneva. The so called "base document does not contain anything which says that the same indicated the ownership of the appellant in the HSBC Bank, Geneva. It is impor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pt of information which, (i) shows the assessee is holding foreign bank account. (ii) shows the assessee's date of birth and legal residential address, (iii) it clearly speaks of specific instructions given by the assessee to the bank, (iv) the assessee was in touch with the bank, wherein he was having active telephonic communication in respect of the investments, movement of funds etc. and (v) date and time of conversation with the bank officials are shown clearly. Thus, on these observations, the AO alleged that the assessee is having foreign bank account. However, on confrontation of the above information to assessee on different occasions, he denied having any such foreign bank account and reiterated the absence of any authentic information 5.25 Before me the AR of the assessee submitted that the document relied upon by the AO is not an evidence much less admissible evidence in view of the fact that data shown is not in original but photocopies, which were not authenticated and did not have any signature of the banking authority nor is it on letter-head He also emphasized that appearance of some personal details of the appellant on the photostat copy does not va....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unted income to the tune of Rs 39.60 crores, although he denied knowledge of having any foreign bank account. The statement recorded u/s. 132(4) of the Act, reproduced in the assessment order at Page 11, also clearly spells out that, the appellant had vehemently denied having knowledge of any foreign bank account, though however, in order to buy peace of mind and to cover up any incriminating material which is/may be found during search, in respect of his individual capacity or family members or group concerns, he is making admission of unaccounted income to the tune of Rs 39.60 crores. 5.27 It has been noticed that the appellant in the statement u/s 132(4) recorded on 15.09.2011 vide answer to Q.No.4 has surrendered the undisclosed income at Rs.39.60 Crores in the hands of family members, group concerns and companies etc. for the omissions, errors or any other unrecorded transactions. In the said surrender he has not specified the assessment year to which the said surrender pertained and the name of assessees in whose hands the said surrender pertained. Even the authorised officer while recording the statement of appellant has not asked for the specific details of the assessment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....foreign bank account. Further, the disclosure was voluntary on behalf of entire group and subject to finding out any undisclosed income or investment etc. As regards the retraction after more than two years, the AR stated that incriminating material only to the tune of Rs.2.05 crores was found and hence there was no justification to stick to the earlier admission of Rs.39.60 crores. 5.30 However, as discussed supra, the very material relied upon by the AO cannot be termed as evidence, therefore, the subsequent stand of the appellant of having retracted the admission, stands vindicated. I find substantial force in the argument of the assessee that there cannot be any admission of unaccounted income, in the absence of any incriminating material. The decisions relied upon by the AO are on different facts and are distinguishable. 5.31 In light of the above, in my opinion it is clear that (a) the appellant had made admission of unaccounted income with a rider that this is subject to any incriminating material being found from him or his family or group concerns; (b) that the appellant had vehemently denied having any knowledge of alleged foreign bank account; (c) that the para....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee. However, since there is no evidence of any real income earned/any incriminating material found/any concealment of income, etc, it can be construed that such onus is discharged by the assessee. It has been consistently held by various courts that a sworn statement cannot be relied upon for making any addition and must be corroborated by independent evidence for the purposes of making assessments. The statement recorded under section 132(4) cannot be independently used for making any addition in the hands of the assessee and the said statement cannot be the sole basis for making any addition and must be independently corroborated by evidence. 5.34 The reliance have also been placed on various decision/judgment whereby the Hon'ble Courts have upheld the similar ratio. Some of them are as under. Jurisdictional High Court in the case of Pr. CIT vs. Saumya Construction Pvt. Ltd. in 387 ITR 529 (Guj), has held that no addition can be made unless the incriminating material is found during the course of search when the assessment is not abated. The gist of the judgment is reproduced hereunder- Under section 153A of the Act, an assessment has to be made in relation to the sear....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d coercion. Assessing officer, however, made addition on basis of disclosure made by assessee in statement recorded under section 132(4). The question before the court was whether merely on basis of admission that few benami concerns were being run by assessee, whether the addition could be justified when despite retraction revenue could not furnish any corroborative evidence in support of such admission. The Court has ruled in favour of assessee following Kailashben Manharlal Chokshi v. CIT [2010] 328 ITR 411/[2008] 174 Taxman 466 (Guj.) (Para 6). 5.47 I have considered the material on record and various case Laws relied upon by the appellant and legal precedents laid down by the jurisdictional High Court and other High Courts as also by several Benches of the Hon'ble ITAT. The crux of the finding is that, Clause (a) of sub-section (1) of section 153A mandates the AO to issue notice in respect of the preceding six assessment years. Clause (b) mandates the AO to assess or reassess the income in respect of these years. A combined reading of both the provisions indicates that where a pending assessment has abated, the total income will comprise of the normal income on the basis....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... difficult to term the information in possession of the AO as evidence, much less incriminating. This proposition finds ample support from the various rulings referred supra, more particularly that of the jurisdictional High Court in the case of Saumya Construction Pvt. Ltd. supra. 5.49 In this case no such information was found during the search and hence in view of the principle laid down by the jurisdictional High Court in the case of Pr. CIT vs. Saumya Construction Pvt. Ltd. 387 ITR 529 and other decisions/judgments cited above, addition cannot be roped in the assessment u/s 153A particularly when it has not abated. This decision of jurisdictional High Court is binding and one acting under the same jurisdiction as a subordinate authority, is bound to follow the decision rendered by highest Court of the state. 5.50 Further my above view on legal aspect is also in consonance with the principle laid down by Hon'ble Gujarat High Court and various courts. Under the circumstances, the addition based on the alleged incriminating document, cannot be made in the assessment order passed u/s 153A if such document was not found in the possession of the assessee during the course of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thin the limit envisaged as per the provisions of IT Act but the appellant objected the same. The appellant submitted that as per the prevalent provisions of law u/s. 153B(1)(viii) the time limit for completion of assessment to be excluded was from date of reference and upto the date of receipt of the information or six months whichever is less. Appellant further submitted that the amendment in the provisions was made effective from 01.07.2012 and according to the amended provisions the time limit for completion of assessment was extended by excluding the period upto the date of receipt of such information or one year whichever is less. So appellant has submitted that the amended provisions which were effective from 01.07.2012 were not applicable on the facts of the case as search action in its case was taken place on 08.09.2011 and even notice for filing of return of income u/s 153A was issued on 12.06.2012. In other words, the amended provisions were applicable to such cases where search action has been initiated on or after 01.07.2012 which is not the case of the assessee. Thus according to the appellant the extended time limit for completion of assessment was 31.03.2014 while....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for a period of Six Months i.e. Period commencing from the date on which a reference for exchange of information is made ending with the date on which the information so requested is received by the Commissioner or a period of six months, whichever is less, shall be excluded. Since no information in this case has been received by the Pr. CIT, the upper limit of six months exclusion would be available to the AO for completion of assessment 6.16 The above situation is once again reiterated as under - Financial Year 2005-06 -Assessment Year 2006-07 -Return of income under section 153 A: 18.10.2013 -Date of Reference to Competent Authority: 21.02.2013 -Period of extension from the date of reference (Six Months) to end on 20.08.2013 - Due Date of completion of assessment: 31 March 2014. - Time available after the date of extension from 21.08.2013 to 31.03.2014 = 212 days In such a case the assessment order was to be passed by 31 March 2014 as the period available after the period of extension from the date of reference to competent authority is 212 days in view of proviso to Explanation of Section of 153 B of IT Act. However, in the instant case the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tation date of 22.04.2014. 6.19 To summarise the issue, it is noticed that as per Explanation (viii) to section 153B, the period to be excluded begins from the date of reference made, till the date of Six Months (or one year as per AO) or the receipt of the information whichever is earlier. Since, in the instant case on reference no information has been received from foreign authorities even till date, therefore the maximum available time would be six months (or one year as per AO). Accordingly if the above period of reference is excluded, then the following picture emerges: 1. If period of six months is considered then the period to be excluded would be from 21.02.2013 and till 20.08.2013. Thus period of 212 days were available (from 21.08.2013 to 31.03.2014). As per the proviso to the explanation (viii) to section 153 B which states that if the period available to the AO is less than 60 days for the purpose of limitation then the period available would get extended to 60 days or deemed to be extended accordingly. Thus no benefit of 60 days period as per the said proviso would be available to the AO for completion of the assessment as it was already having 212 days left with h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....been completed on 17.02.2015 which is much beyond the limitation date hence, assessment became barred by limitation Moreover, the proviso to explanation of Section 153 B for availability of 60 more days' time for completing the assessment would become infructuous and redundant as under no circumstances the period of sixty days mentioned in the said proviso would become applicable due to availability of extended period of six months from the normal time barring date as per Section 153 B(a) or (b) of IT Act. Thus, the working/counting of the limitation date for exclusion period (six months or one year) in view of Explanation (vii) of Section 153 B from the time barring date i.e. 31.03.2014 is not in consonance with the provisions of law as in that case the proviso to Explanation would become redundant / non workable and thus the same would not be in accordance with the provisions of law as intended by the legislature. The relevancy/applicability of the said proviso to explanation has been emphasized by the Hon'ble Delhi High Court in the case of CIT Vs. U Like Promoters Pvt. Ltd. in ITA No.1528/2010, 1529/2010, 1530/2010 and 1532/2010 dated 24.01.2005. For ready reference t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessment within 60 days from the date on which the special audit report was to be submitted to him." In view of the above discussion, there had been the breach of the period of limitation while passing the assessment order as the assessment has not been completed within the statutory time limit i.e. upto 31.03.2014 but completed on 17.02.2015 which was much later to the statutory time limits u/s. 153 of IT Act. Thus, the assessment is quashed." 4. Aggrieved against the common Appellate orders, the Revenue are in Appeal before us raising the following Grounds of Appeals: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that any addition during the assessment u/s.153A has to be confined to the incriminating material found during the course of search u/s. 132(1) of the Act, even though, there is no such stipulation in sec.153A of the Act. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating that sec.153A requires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year falling within six assessment years and to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pheld the order of the A.O. 9. It is, therefore, prayed that the order of the ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 5. Assessee has filed Cross Objections as against the Revenue Appeals before us raising the following Grounds of Appeals: 1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2. The Id. Commissioner of Income Tax (Appeals)-11, Ahmedabad [hereinafter referred to as the "CIT(A)"] erred on facts as also in law in not deciding the ground of appeal related to initiation of the proceedings and validity of notice issued u/s.153A of the Income-tax, 1961 [hereinafter referred as to the "Act"]. The notice issued u/s 153A of the Act is bad in law and without jurisdiction and therefore the same may kindly be quashed. 3. The Ld. CIT(A) erred on facts as also in law in not deciding on merit, the ground of appeal related to addition made of Rs.26,33,23,482/- on account of peak balance of impugned foreign bank account. The Action of ld. CIT(A) in not deciding the ground of appeal on merit is unjustified. The AO may kindly be directed to delete the addition. 4. The Ld. CIT(A) erred on facts as also in law....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is not justifiable. Further the Administrative Commissioner namely PCIT, Central has filed the present appeals for the Revenue, it is the very same office who had sought for information from the Under Secretary [FT& TR-III][2] and no information received before completion of assessment by the assessing officer. It is further stated in the Written/Reply Arguments that the assessee gathered information after inspecting the departmental records that the Ld CIT[A], Ahmedabad before finalizing the appellate orders, had once again called for a report from the AO, as to whether any information was received from the CBDT [FT&TR], post assessment order. Since the reply of the AO was not in affirmative, the Ld CIT[A] proceeded to finalize the appeals. Therefore the Ld CIT DR's request is reject and however directed to submit his Written Arguments within 15 days of completion of the hearings. 6.2. Thus the Ld CIT DR submitted his Notes on Arguments by email on 14-02-2023 the same is reproduced as follows: "Note on arguments by CIT DR in the case of Shri Rajeshkumar G. Patel, ITA Number 25/RJT/2021- AY 2006-07; ITA Number 25/RJT/2021 Brief facts of the case: 1. Information was available....
X X X X Extracts X X X X
X X X X Extracts X X X X
....disclosed amount to taxable income of the assessee, in respective years. 8. Ld. CIT (A) deleted the addition on technical/legal grounds without going into the merits of the case, quashing the assessment order for breach of time limits, and also, holding that no incriminating documents were found/seized during the course of Search and seizure action. 9. The Department is in appeal before Hon'ble ITAT on multiple grounds of appeal. Hearing on 02.02.2023: 10. The CIT-DR invited the attention of Hon. ITAT on the applicability of the provisions of Evidence Act on the 'admission' by the assessee, in response to the specific querry confronting documents pertaining to the investment in the Foreign HSBC-Geneva bank accounts held by the assessee. a. Applicability of provisions of evidence Act proceedings under the I.T.Act: In the case of Chuharmal vs. CIT (1988) 70 CTR(SC) 88/172 ITR 250(SC), hon'ble Apex court has held that "salutory principle of common law embedded in section 110 of the Evidence Act could be applied to the taxation provisions." Following is an extract from the order of :- "para.2...................there the contention was raised that the provisions in sec.110....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The simple definition of 'perjury' is giving/ furnishing/ submitting intentionally false evidence by the person when he is bound by law to state the truth or give/submit/furnish true evidence in the Court of Law. In addition to the offense of perjury, when if false evidence or oral testimony is submitted in the Court proceedings under oath, the contempt of Court is also committed. The definition of 'Criminal contempt of Contempt' within the meaning of section 2 of the Contempt of the Court Act 1971, includes "the doing of any act which interferes with obstructs or tends to obstruct the administration of justice in any manner". Making of false statement of oath may interfere with the admission of justice and may thus amount to contempt of Court. The offence of perjury, done by stating false testimony or furnishing false evidence by a person or oath, can be done by stating wrong or incorrect or suppressed information in the affidavit submitted in the Court proceedings. The main ingredient of the offence is 'intentional or voluntary' act of falsely testifying, submitting or furnishing fake evidence or suppressing information in the Court proceedings. In the case of Re-Suo-mot....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing all "Guilty, guilty!." The following anguish expressed by the Hon'ble Supreme Court in Swarna Singh vs. State of Punjab (2000) 5 SCC 668 about rampant perjury in courts merit a mention: "Perjury has also become a way of life in the Law Courts. A trial Judge knows that the witness is telling a lie and is going back on his previous statement, yet he does not wish to punish him or even file a complaint against him..." "....act of perjury is treated as a heinous offence in all civilized societies; consideration of complaints with regard to the same cannot be deferred or delayed; otherwise there is all possibility of the fountain of justice being polluted." In the case of Sejalben Tejasbhai Chovatia vs. State of Gujarat (Special Criminal Application) (Quashing) 7666 of 2016 the Hon'ble High court has Gujarat has ruled similarly. b. Perjury is also a criminal contempt of Court (i) In the case of Murray & Company Vs Ashok Kumar Nevatia, (2000) SCC 367, AIR 2000 SC 833, the Hon'ble Supreme Court has held that a false statement deliberately made in an affidavit before the Court amounted to contempt of Court. (ii) Hon'ble Supreme Court has held in the matter of MC Mehta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. However, the intent of judicial interpretation has been to see a perceptible link between the Search and Seizure proceedings and the additions in assessment order. In this case the link is established by the 'admission' in the statement, the confrontation of the information available with the department to the assessee leading to voluntary disclosure by the assessee of Rs. 39.60 Crores. It was further argued that the disclosure is not 1 Crores or 100 Crores, or even a round figure. A disclosure like 39.60 is a well thought of figure. The disclosure vide letter to Additional Director; and in response to the confrontation of an information about the foreign bank deposit of the assessee, is a material fact and is directly borne out of 'search and seizure proceedings', unlike the cited cases by ld. AR and the cases relied upon by Ld. CIT (A) while deciding the legal-issue. It is requested that further time may be given for arguments. 13. Due to paucity of time, rebuttal arguments have not been completely made. Ld. AR has pointed out several cases, repeatedly stating that the facts of its case are similar to the cited case. However, time is required to rebut the case laws relied up....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hese matters with officers in CBDT and have reliably learnt that the information regarding holding of investment by the assessee in the foreign banks (which were found to be not disclosed) were received through Government channels. Thus there remains no doubt on the authenticity of the documents based on which Search and Seizure actions were carried out and the assessee was confronted. I am trying to obtain a confirmation in this regard from CBDT/Investigation Wing. Since the matter is quite old, I humbly request you to provide a time of atleast 60 days, and also consider extension if circumstances so require and permit revenue to submit the factual details of chain of custody of information regarding foreign investment holding of the assessee. It is also requested to not to treat this case as 'heard' and provide sufficient time to the department to rebut the arguments and case laws submitted by ld. AR. It is further requested to make this submission a part of adjudication order." 6.3. The Ld AR submitted his Reply/Rejoinder Arguments on 01- 03-2023 and the same is reproduced as follows: "Para wise comments on the reply submitted by the ld. CIT(DR) dated 14.2.2023 1. Kind ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut foreign bank account held by Shri Rajeshkumar G Patel in HSBC Geneva when an action of search and seizure u/s. 132 of the I T Act was conducted in the premises of the assessee on 8.9.2011. Reply 1.1 No comments. However, the Respondent desires the Hon. Members to take note of the fact that, only information was available with the department and not any evidence, much less incriminating evidence. Para 2 (under the heading Brief facts of the case) Reply 2. No comments. Para 3 (under the heading Brief facts of the case) As per this para, the ld. CIT(DR) has held that, in the statement recorded u/s. 132(4), when the Respondent was asked about the foreign bank account, the Respondent stated that he is unable to recall the specifics and he also made a voluntary disclosure of an amount of Rs 39.60 crores. Thereafter he was asked about the value of holding in bank account, whereupon the Respondent stated that his disclosure covers the amount of investment in foreign bank account. Reply 3.1 The above finding of the Ld. CIT(DR) is taken out of context. Here the most sacrosanct version is the assessment order. Kind attention is drawn to para 6 to 6.2 of the assessment order, whic....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... her assessment order has corroborated the 'admission' of Shri Rajeshkumar G Patel with independent corroborative evidences. Reply 5.1 This finding is grossly untrue. Nowhere in the assessment order the AO has corroborated the admission of the Respondent with independent corroborative evidences. This is because, no such corroborative evidences (about foreign bank account) was found during search. Rather, it never existed. If there is a single corroborative evidence in this regard, then the ld. CIT(DR) ought to have unfolded this fact by referring to specific instance (from the assessmdent order). Thus, this is just a passing remark without substance. 6. As per this para, the ld. CIT(DR) has held that, the Respondent refused to provide the consent waiver form. Reply 6.1 In this connection the Respondent humbly submits that, the Investiation wing was carrying unauthenticate information about some foreign bank accounts, retrieved from some media reports. All throughout the proceedings, the Respondent sought authentic information/ data / documents from the Department. The very fact that the information available with the department was not authentic, is the reason why seach took ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e required for deciding the matter in issue. Direct evidence directly proves a fact or disapproves of the fact by its virtue. In the case of direct evidence, a particular fact is accepted directly without giving any reason to relate to the fact. One does not even need to point out the illustration provided as the evidence given by the witness in the court of law is the direct evidence which is sufficient enough to prove the matter as against the testimony to a fact proposing guilt. Here in the case of the Respondent, there is no direct evidence (as otherwise, the AO would have made it a part of the assessment order). In order to establish admission of evidence, the following facts should be consistent with the theory. * The circumstances from which the inference for the theory was drawn, should be fully established. * The circumstances should be of a decisive nature. * The circumstances should serve to mean and prove only the theory proposed to be proved and should not entertain any other theory. 10.3. None of the above pre-requisites are fulfilled here. Hence, a mere unauthenticated document, can never constitute evidence. 11. Under this para, the ld. DR has relied upon ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ision in letter and spirit. In CIT vs. G. Dalabhai & Co - 226 ITR 922, the Hon'ble Gujarat High Court has remarked - "Before parting with the case, we notice with anguish the language used by the Income Tax Officer in his assessment order saying that "with due respect to the decision of the Gujarat High Court, I do not follow the same'. The Income Tax Officer in not following the decision of the Gujarat High Court within whose supervisory territory he was functioning, is far from satisfactory, that is the least we can say. The minimum decorum of the system of hierarchy that Tribunals in the administration of justice and their judicial subordination to the High Court of the territory in which they function requires that they restrain in the use of proper expression while following or not following the decision of the High Court. Bishnu Ram Borah and Another vs. Parag Saikia & Ors. AIR 1984 SC 898 The board of Revenue any other subordinate tribunal is subject to the writ jurisdiction of the High Court under Article 226 of the Constitution. Just as the judgments and orders of the Supreme Court have to be faithfully obeyed and carried out throughout the territory of India under....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pposed to all principles of judicial discipline..... Precedents which enunciate rules of law from the foundation of administration of justice under our system. This is a fundamental principle which every presiding officer of a judicial forum ought to know for consistency in interpretation of law alone can lead to public confidence in our judicial system. (2) The decision of the special (large) Bench of the Tribunal must be held to be a binding precedent for division benches otherwise the very purpose of constituting them will get frustrated. This of course is subject to the exception that if there is a High Court decision on the same issue and not noticed by the Special Bench, then the High Court decision will receive preference as was done in Chandulal Venichand's case 38 ITD 138. 12.2 Hence, it would be unfair to hold that the ld. CIT(A) took a very narrow view, whereas the fact is that, the ld. CIT(A) only took a consistent stand as was taken by various High Courts. 13. Under this para, the ld. DR has sought time for rebutting case laws. This being the discretion of the Hon. Members, no opinion is formed. 14. Under this para, the ld. DR has sought time for rebutting case....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e assessment orders as time-barred. However Ground no.7 " the Ld CIT[A] has not following the proposition of law laid down in the Finance Act, 2012." Though this ground is not specific about the assessment order is barred by limitation, but considering that the Ld CIT[A] has not following the proposition of law laid down in Finance Act, 2012", which means about the amendment made in Clause [viii] of the Explanation to section 158B[1] of the Finance Act 2012, thereby extending the period of limitations from "six months" to "12 months" with effect from 1st day of July 2012. 7.2. For better understanding the Memorandum explaining the changes in the Income Tax Act vide Finance Bill 2012, wherein clauses 63, 65 the changes relevant to extension of time limit for completion of assessment, where information is sought under DTAA is explained as follows: "... The time limit for completion of an assessment provided in section 153 and 153B of the Income Tax Act. These provisions were amended vide Finance Act 2011 to exclude the time taken in obtaining for information [from foreign tax authorities] from the time prescribed for completion of assessment or reassessment in the case of an asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Ld CIT[A] in his Appellate order at paragraph 6.19 has elaborately dealt this issue and held that the assessment order is barred by limitation, since the same is passed after 22-04-2014. Therefore we have no hesitation in holding that the assessment orders passed by the Ld Assessing Officer on 17-02-2015 are clearly barred by limitation and the assessment orders are non existing in the eye of law. Thus the Ground no.7 raised by the Revenue is devoid of merits and the entire Revenue appeals fails and deserve to be dismissed. 8. Though the entire assessment is quashed on the ground of time barred, however we are required to adjudicate the other grounds raised by the Revenue. As stated earlier, Grounds nos. 1 to 4 are inter connected namely "Whether any incriminating material should be seized during the course of search for making assessment under section 153A of the Act". We notice that these common Grounds are raised by the Revenue in every search cases in a routine and mechanical manner. 8.1. It is seen from the Panchnama recorded during the course of search on 09-09-2011, lose paper file containing 99 pages were being found and seized by the Investigation team [which is placed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n sources and therefore such details do not validate the case of the AO in any manner. Further more if the "information" in the possession of the Revenue been authentic and concrete, then what is the necessity to collect the same again from the Competent Authority namely FT&TR Division. Even after ten years after such reference the Competent Authority could not produce the same to the Department. Thus the burden of proof for proving the connection of the alleged foreign bank account was upon the Revenue and not on the assessee. Therefore, what the AO attempted to draw an inference that the assessee owns and maintains foreign bank account, based on some unverified sheet of paper which is indicative of a bank statement, it is upon the AO to prove the truthfulness of the same. But till the stage of second appellate proceedings before this Tribunal, being the highest facts findings authority, the Revenue failed to prove the same with necessary materials and proper evidences. Therefore the Ground Nos. 1 to 4 raised by the Revenue are devoid of merits and the same is liable to be dismissed. 9.1. Regarding Ground Nos.5 & 6, it is appropriate to consider the written submissions of both th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....* The circumstances should be of a decisive nature. * The circumstances should serve to mean and prove only the theory proposed to be proved and should not entertain any other theory. 10.3.None of the above pre-requisites are fulfilled here. Hence, a mere unauthenticated document, can never constitute evidence. 11. Under this para, the ld. DR has relied upon the definition of the word perjury. Reply 11.1 The Respondent prays that, perjury is only applicable where there are false statements/ evidences. The Hon Members are humbly appraised that, the Department has also initiated prosecution proceedings. The only charge made in the prosecution filed by the department is failure to file return of income in time. Had there been alleged perjury, then obviously this too would have been the charge raised by the Department. This amply proves that, there is no perjury, as alleged. 9.2. Further the it is Nowhere in the assessment order the AO has corroborated the admission of the assessee with independent corroborative evidences. This is because, no such corroborative evidences (about foreign bank account) was found during search. If there is a single corroborative evidence in this r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s not justified in making addition of Rs. 6 lakhs on the basis of statement recorded by the Assessing Officer under section 132(4) of the Act. The Tribunal has committed an error in ignoring the retraction made by the assessee. 27. In the above view of the matter, addition of Rs. 1 lakh made on account of unaccounted cash is confirmed and the addition of Rs. 6 lakhs is hereby deleted." 9.4. Thus, we are of the considered opinion that the alleged unauthenticated and uncorroborated sheets of papers should not be considered as evidence, whether primary or secondary and therefore addition made by the Ld AO on such document is liable to be deleted. Therefore the Ground Nos. 5 to 6 raised by the Revenue namely deletion of addition made on account of deposit/ investments in HSBC Geneva bank account are devoid of merits and the same is liable to be dismissed. 10. It is appropriate to consider the Co-ordinate Bench of Delhi Tribunal in the case of Bhushan Lal Sawhney Vs. DCIT, Central Circle-7, New Delhi reported in [2021] 127 taxmann.com 642 wherein it was considered the temporal scope of Article 26 of the Amended Double Taxation Avoidance Agreement between India and Switzerland, there....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has submitted that the Ld. CIT-DR has furnished a letter Dated 26-6-2015 together with information asked for in relation to the assessee received from Swiss Authority. It may be seen that as per A.O's admitted case, reference was made under section 90 of the I.T. Act, 1961 under the provisions of "Exchange of Information", Article of Indo Switzerland Double Taxation Avoidance Agreement [DTAA] and such information was required for the period from 1-4-1995 to 31-3-2012 seeking information under the provisions of "Exchange of Information" Article 26 of Indo-Switzerland Double Taxation Avoidance Agreement [DTAA]. He has submitted that the above stated such reference made under section 90 is bad in Law and Revenue could not have made any such reference for seeking information for the period prior to 1-4-2011 and hence such illegal reference could not have been made in Law, could not have lead to extension of time limit for passing the assessment orders. Thus, the time limit in passing the impugned assessment orders in the case of the assessee expired on 31-3- 2014 itself. He has further submitted that in fact the Revenue could not have made reference for the period prior to 1-4-2011....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Double Taxation Avoidance Agreement between India and Switzerland. Therefore, such information could be provided from 1-4-2011. Learned Counsel for the Assessee also placed on record Notification Dated 27-12- 2011 between India and Switzerland Confederation for avoidance of double taxation. These would clearly show that these are applicable after assessment years under appeals and as per information provided vide letter Dated 26-6-2015 no such information could be provided prior to 1-4-2011. Therefore, Swiss Authorities have not provided any information to Revenue Authorities in India about assessee's bank account with HSBC, Geneva, Switzerland for assessment years under appeals i.e., A.Ys. 2006-2007 to 2011-2012. Thus, there is no incriminating material available on record to make any addition in any assessment years. It may also be noted here that assessee since the very beginning denied to have maintained any such bank accounts with HSBC, Geneva, Switzerland. There is no material available on record that assessee made deposits in HSBC Bank A/c in A.Y. 2006-2007 or thereafter earned any interest in remaining assessment years under appeals. 8.1 Considering the totality of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ial qua each of those AYs. Conclusion 72. To conclude: (i) Question (i) is answered in the negative i.e., in favour of the Assessee and against the Revenue. It is held that in the facts and circumstances, the Revenue was not justified in invoking Section 153A of the Act against the Assessee in relation to AYs 2000-01 to AYs 2003-04." 8.1. The above Judgment is confirmed by the Hon'ble Supreme Court by dismissing the SLP of the Department. Therefore, on this reason alone no addition could be made of any unexplained bank deposits or interest earned thereon in any of the assessment years. In view of the above, we set aside the Orders of the authorities below and delete the entire additions. In view of the above, there is no need to decide the remaining grounds of appeals which are left with academic discussion only. Accordingly, all the appeals of the Assessee are allowed. 8.2. In the result, all the appeals of the Assessee are allowed." 11. Further the Co-ordinate Bench of the Delhi Tribunal in the case of ANURAG DALMIA vs. DCIT reported in [2018] 52 CCH 0106 [ITAT Del] has considered similar HSBC Bank foreign account and deleted the additions made by the AO as follows....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e continued to deny such kind of transaction and even at the stage of the assessment proceedings the Assessing Officer did not confront with any material which can be said to have been recovered from the possession of the assessee in the course of search with regard to the deposits or any kind of link in the foreign bank accounts. The ld. CIT (A) in the impugned order also (which has been incorporated above) has not held that any document or evidence qua any link with the foreign bank accounts has found during the course of search, albeit he has given a finding that to the effect that it was on the basis of the information received which was precursor to carry out search and seizure action at the premises of the assessee and such an information/material even though not found in the course of search can be utilized for the purpose of assessment. For which reference was to made judgment of Hon'ble Supreme Court in the case of Pooranmal vs. DIT, (1974) 93 ITR 505 (SC). In the said judgment, Hon'ble Supreme Court held that if any evidence or material which has been found during the course of search can still be used/utilised, even if search has been held to be invalid. Nowhere ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y incriminating material antecedent to the search, that is, it was found during the course of search or as a result of search, then in that case Revenue had various other courses of action left under the provisions of Income Tax Act, but certainly not within the ambit and scope of Section 153A read with 2nd proviso thereto." 12. Another Co-ordinate Bench of Kolkata Tribunal in the case of Bishwanath Garodia Vs. DCIT, Central Circle-3(3), Kolkata reported in [2016] 76 taxmann.com 81 has considered similar HSBC Bank foreign account and deleted the additions made by the AO as no seized materials was found during the search operation. Operative portion of the decision reads as follows: "....8. We have considered the rival submissions and also perused the relevant material available on record. It is observed that the returns of income originally filed by the assessee for both the years under consideration were duly processed by the Assessing Officer under section 143(1) well before the date of search conducted on 28.07.2011. The said search was conducted in the case of the assessee on the basis of information received by the Assessing Officer from CBDT relating to the undisclosed acc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fficient to give jurisdiction to the Assessing Officer to proceed against the assessee under section 153A of the Act. In support of this contention, he has relied on the unreported decision of the Hon'ble Delhi High Court in the case of Anil Kumar Bhatia (supra). In the said case, a question was posed by the Hon'ble Delhi High Court in paragraph no. 12 of its order as to whether the Assessing Officer was empowered to reopen the proceedings and reassess the total income taking note of the undisclosed income, if any, unearthed during the search where an assessment order had already been passed in respect of all or any of those six assessment years either under section 143(1) or section 143(3) of the Act and such order was already in existence having been passed prior to the initiation of search/requisition. Although this question was not finally answered by the Hon'ble Delhi High Court in the case of Anil Kumar Bhatia (supra), it is quite clear from the said question raised by the Hon'ble Delhi High Court that there was no distinction made by Their Lordships in the assessments completed under section 143(1) and section 143(3) for determining the scope of the proceedin....