TaxTMI 
TaxTMI 
2023 (11) TMI 347
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....2023 With R/SPECIAL CIVIL APPLICATION NO. 12073 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12071 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12069 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12068 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12066 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12010 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12011 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12006 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12008 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12004 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12003 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12076 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12077 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12078 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12080 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12079 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12062 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12060 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12059 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12046 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12048 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12049 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12053 of 2023 With R/SPECIAL CIVIL A....
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....ICATION NO. 16086 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16087 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16109 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16361 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16373 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16388 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16386 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16385 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16389 of 2023 Appearance: For the Petitioner(s) No. 1 : Mr. Varun K.Patel, Ld. Senior Standing Counsel With Mr.Dev D. Patel, Advocate (3802) For the Respondent(s) No. 1 : Mr. Tushar Hemani, Ld. Senior Advocate With Parimalsinh Parmar(7296) COMMON CAV JUDGMENT (PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV) 1. All these petitions, 94 in number, under Articles 226 and 227 of the Constitution of India, challenge the order dated 24.08.2022 passed by the Income Tax Appellate Tribunal in respective Misc. Applications filed by the Revenue under Section 254(2) of the Income Tax Act, 1961 (hereinafter to be referred to as 'the Act' for short). 2. These Misc. Applications were filed by the Revenue, aggrieved by the order dated 12.11.2020 passed by the Income Ta....
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....1 issue is concerned, the Tribunal after considering the provisions held that jurisdiction under Section 153C of the Act prior to 01.06.2015 could be invoked only if the material seized during the course of search in case of third parties 'belongs to' some persons other than the searched person. Subsequent to 01.06.2015, the information embedded in the document is sufficient for taking action under Section 153C. On appreciation of the satisfaction recorded by the Assessing Officer of the searched person as well as the AO of the present assessees, the Tribunal found that the satisfaction indicated that the AO no where observed that the documents belonged to the assessee. Therefore, the Tribunal held that since the search was prior to 01.06.2015, the appeals of the assessees were allowed. 3.6 In Category-2 issue pertaining to Section 153A of the Act, the Tribunal relying on the decision of the Delhi High Court in the case of CIT v. Kabul Chawla reported in 380 ITR 573 (Del), opined that simultaneous search was carried out at the premises of Venus Infrastructure and Ashok Sundardas Vaswani and if any incriminating material belonging to the assessee is found at the premises of some ....
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....s amended with effect from 1.6.2015 and with regard to material found such as books of account or documents seized, the expression "belongs to" has been eliminated and in its place expression "pertains to" or any information wherein relates to, has been used. The finding of the Tribunal that in the satisfaction note, the Assessing Officer had nowhere recorded a finding that the documents belonged to the assessee and that it had recorded that the documents contained information which related to the assessee could not have been made applicable as the amended provision had only come into effect from 01.06.2015 and since the search was prior thereto, proceedings under Sec. 153(C) were bad. The Assessing Officer and in turn the Tribunal committed an error in quashing the 153(C) proceedings. 4.2 Mr. Varun Patel, learned Senior Standing Counsel, would submit that the Tribunal committed an error in holding that there was an essential jurisdictional error in assumption of jurisdiction. He would rely on a decision of the Hon'ble Supreme Court in the case of Income Tax Officer vs. Vikram Sujitkumar Bhatia reported in [2023] 453 ITR 417. He would submit that in accordance with this decision....
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....he additions made by the Assessing Officer in the case of the assessees were not sustainable because they were not based on the seized material during the course of search carried out at their premises, is bad. He would invite the Court's attention to paras 10 to 18 of the order passed in the miscellaneous applications, particularly para 13 of the order, whereby, the Tribunal while rejecting the application for rectification held that the Appellate Tribunal had analyzed the facts available on record and if the revenue was aggrieved by the order, the only remedy was to challenge the same at a higher forum. He would rely on the memo of the Miscellaneous Application annexed to the papers of Special Civil Application No. 12062 of 2023. He would submit that a specific ground was raised in the miscellaneous application and the Tribunal therefore clearly fell in error in dismissing the miscellaneous applications in context of Category 2. With regard to Category 3:- 4.7 Mr. Patel, learned Senior Standing Counsel, would submit that in context of the assessments under Sec. 153(A), the Tribunal in the orders passed in the Misc. Applications failed to appreciate that a clear mistake was ....
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....t alone. 5.2 With regard to other remaining 26 petitions, he would respond by making submissions, as made by the learned Senior Standing Counsel for the revenue, category wise. With regard to Category 1:- 5.3 In respect of the controversy revolving around Sec. 153(C), Mr. Hemani, learned Senior Counsel, would submit that the issue has been elaborately dealt with by the Income Tax Appellate Tribunal. He would submit that the search was commenced on 10.03.2015 and concluded on 13.3.2015 i.e. prior to 01.06.2015 being the date with effect from which Sec. 153 (C) was amended and its scope was enlarged. 5.4 Mr. Hemani, learned Senior Counsel, would invite the Court's attention to the Satisfaction Note annexed to the petition and submit that the Assessing Officer assumed jurisdiction based on this Satisfaction Note. The Satisfaction Note recorded that during the course of search, various documents were found which relates to / pertains to the assessee for the various assessment years. The Income Tax Appellate Tribunal decided the issue after considering the scheme of the Act viz-a-viz Sec. 153(C). The argument of the assessee before the Tribunal was that since the search was ....
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....of such decision would fall within the ambit of "mistake apparent from face of the record". Reiterating the dates, he would submit that the order in the Misc. Applications was passed on 24.08.2022. The six months from the MA order would expire on 23.02.2023, whereas, the judgement of the Supreme Court in case of Vikram Sujit Kumar Bhatia (supra), was delivered on 06.04.2023, later than the period of six months. The decision therefore would have no bearing on the Misc. Applications under Section 264(2) of the Act. Regarding Category 2: 5.8 In this regard, in respect of controversy revolved around Section 153A, Mr.Hemani would submit as under: I. That it was the case of the Revenue that the Tribunal has erred in not considering that authorizations were issued under Section 132 where assessments have been framed under Section 153A of the Act. The Revenue in the Misc. Application contended that the Tribunal erred in accepting the contention that the assessment under Section 153A has to be made on the basis of the material found during the search carried out in the case of the assessee concerned. II. Relying on the findings of the Tribunal, Mr. Hemani would submi....
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....5. The limitation for framing the assessment expired on 31.03.2017. Assessment orders were passed in December 2017 which were time barred under Section 153B of the Act. Regarding Category 4: 5.11 Mr. Hemani would submit that the Tribunal has on the basis of the material on record come to the conclusion that reassessment proceedings under Section 147 was based on borrowed satisfaction and therefore, there was no reason for the Tribunal while exercising powers under Section 254(2) of the Act to rectify the mistakes when there were none. ANALYSIS 6. As is evident from the proceedings before the Income Tax Appellate Tribunal and in the MA proceedings before it and the arguments canvassed by the respective counsels, the decision that follows would also be based category-wise. A. CATEGORY-1: WHETHER THE ASSESSMENT PROCEEDINGS UNDERTAKEN UNDER SECTION 153C ARE SUSTAINABLE IN THE EYE OF LAW ? 6.1 The case of the assessees - respondents herein before the Appellate Tribunal was that the search proceedings in the case were initiated on 10.3.2015 and concluded on 13.3.2015. The satisfaction note recorded that the seized material referred to/related to/pertained to the concern....
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....a person other than the person referred to in section 153A, then the books of account or 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 each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in subsection (1) of section 153A]:] 2.2.3 WITH EFFECT FROM 01.06.2015: Assessment of income of any other person. - -- 153C. -[(1)] --[Notwithstanding anything contained in section 139. section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,-- (a) any money, bullion, jewellery or other valuablearticle or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized orrequisitioned, or any information....
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....ar day-to-day business, and that contain certain information exhibiting the undisclosed income of the person other than the searched person, then the action under section 153C could be justified. But prior to 1.6.2015, the documents ought to be belonged to person other than the searched person. There is a clear distinction between both the conditions. Subsequent to 1.6.2015, the information embedded in the document is sufficient for taking action under section 153C, but prior to 1.6.2015 action under section 153C could be taken if documents belong to the person other than the searched person was found during the course of search. 16. Hon'ble Gujarat High Court in its decision rendered in the case of Anil Kumar Gopikrishna Agrawal Vs. ACIT (supra) considered an issue, whether post-amended section could be applicable on the pending assessments, meaning thereby, if search was conducted prior to 1.6.2015, but assessments were not concluded, whether postamended section is to be applied in such cases or not; because that would change the very nature of the disputes. 17. Hon'ble Gujarat High Court has formulated thefollowing question "whether section 153C of the ....
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....erson; or the date of issuance of notice under section 153C of the Act. 19.9 In the facts of the present case, the search was conducted in all the cases on a date prior to 1st June, 2015. Therefore, on the date of the search, the Assessing Officer of the person searched could only have recorded satisfaction to the effect that the seized material belongs or belong to the other person. In the present case, the hard-disc containing in the information relating to the petitioners admittedly did not belong to them, therefore, as on the date of the search, the essential jurisdictional requirement to justify assumption of jurisdiction under section 153C of the Act in case of the petitioners, did not exist. It was only on 1st June, 2015 when the amended provisions came into force that the Assessing Officer of the searched person could have formed the requisite belief that the books of account or documents seized or requisitioned pertain to or the information contained therein relates to the petitioners. 19.10 In this backdrop, to test the stage of applicability of the amended provisions, a hypothetical example may be taken. The search is carried out in the case of HN Safal....
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....ically situated persons differently, merely because in one case the Assessing Officer of the searched person records satisfaction as required under section 153C of the Act prior to the coming into force of the amended provisions and in any another case after the coming into force of the amended provisions. 19.12 In Pr. CIT v. Vinita Chaurasia, [2017] 394 ITR 758/248 Taxman 172/82 taxmann.com 153 (Delhi), the Delhi High Court has held that, at the outset, it requires to be noticed that the search in the present case took place on 19th June, 2009, i.e., prior to the amendment in section 153C(1) of the Act with effect from 1st June, 2015. Therefore, it is not open to the Revenue to seek to point out that the document in question 'pertains to' or 'relates to' the assessee. Against this decision the revenue filed a special leave petition before the Supreme Court being Pr. CIT v. Vinita Chaurasia [2018] 98 taxmann.com 414/259 Taxman 88 (SC) condoned the delay and dismissed the special leave petition. 19.13 In Pr. CIT v. Index Securities (P.) Ltd., [2017] 86 taxmann.com 84 (Delhi), on which reliance had been placed on behalf of the petitioners, the Delhi ....
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.... said documents might 'pertain' to the Assessees, they did not belong to them. Therefore, one essential jurisdictional requirement to justify the assumption of jurisdiction under Section 153 C of the Act was not met in the case of the two Assessees." 19.14 Thus, it is the date of search that has been considered to be the relevant date for the purpose of applying the amended provisions of section 153C(1) of the Act. 19.15 This court is of the considered view that the trigger for initiating action whether under section 153A or 153C of the Act is the search under section 132 or requisition under section 132A of the Act and the statutory provisions as existing on the date of the search would be applicable. The mere fact that there is no limitation for the Assessing Officer of the searched person to record satisfaction will not change the trigger point, namely, the date of the search. The satisfaction of the Assessing Officer of the searched person would be based on the material seized during the course of the search or requisition and not the assessment made in the case of the searched person, though he may notice such fact during the course of assessment proc....
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....ntre, Opp. Mayor's Bungalows, Law Garden. Ellisbridge, Ahmedabad and (ii) Terrace of Crystal Arcade, Nr. Navrangpura Telephone Exchange, C.G Road, Ahmedabad - contains information,which relates to the assessee, Shri Dilip Kumar Lalwani. Further, I am also satisfied that documents seized have a bearing on the determination of the total income of the assessee, | Shree Dilip Kumar Lalwani for assessment years 2009-10 to 2014-15 The assessee being other than the person referred to in section 153A of the Act. I have satisfaction to proceed against the assessee Shri Dilip Kumar Lalwani as per the provisions of Section 153C of the Income Tax Act, 1961. Therefore, it is fit case for initiation of proceeding u/s 153C of the I.T.Act . 8. Assessment years involved A.Y. 2009-10 to A.Y.2014-15. 20. Thereafter, we find that the AO has annexed annexure-A which contained the details of documents considered by him. Annexure-B is the satisfaction in the capacity of the AO of the searched person. It is a very exhaustive note, and with the assistance of the ld. representativs, we have gone through all these pages. We would like to take note of relevant part of the satisfaction vi....
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....[DCIT, Central Circle-1 (1), Ahmedabad] of M/s. Venus Infrastructure and Developer Pvt. Ltd., in whose case the search was conducted and documents relating to the appellant company was found and seized has recorded his satisfaction note for initiation of assessment proceedings in the case of appellant and forwarded to the ACIT, Circle-50(l), New Delhi, being the Assessing Officer of the appellant. The AO of appellant has recorded his satisfaction and issued notice u/s. 153C of the I. T. Act, 1961. The case of appellant was subsequently transferred to the ACIT, Central Circle -1(1), Ahmedabad. The appellant had raised objection before the new Assessing Officer against the earlier notice issued by DCIT, Circle -50(1), New Delhi, u/s. 153C of the I. T. Act, 1961. The AO who was also AO of M/s. Venus Infrastructure and Developer Pvt. Ltd. has withdrawn the earlier notice and issued fresh notice duly recording the satisfaction. The appellant has contended that the notice issued u/s. 153C of the Act was not valid as the seized material on the basis of which notice u/s. 153C was issued did not belong to the appellant. The appellant has also contended that there is no provision in the Inco....
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.... Kumar Gopikishna Agrawal Vs. ACIT, and further reiterated in other cases. At this stage, it is pertinent to note that, otherwise also, these 43 appeals are directly covered by the decision of Hon'ble jurisdictional High Court in the case of Anilk Kumar Gopikishna Agrawal Vs. ACIT (supra) because on the basis of entries embedded in the documents found at the premises of Venus Infrabuild and Shri Ashok Vaswani, notice under section 153C was issued in the case Ocean Valves Mfg. Co. Proprietor of that concern filed an SCA No.19647 of 2018. This was lead case, and notice issued under section 153C of the Act was quashed. The above facts are contained in paragraph-2.4 of the Hon'ble High Court's decision. For ready reference, we take note of this fact from there. It reads as under: "2.4 By an order dated 23.7.2018, the Assessing Officer rejected the objections filed by the petitioner." Being aggrieved, the petitioner has approached this court by way of present petition challenging the impugned notice dated 8.2.2018 issued by the Assessing Officer under section 153C of the Act for assessment year 2012-13." 2A In case of Venus Group, reference is made....
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....is section is being invoked with help of the section. The AO will be in a position to pass assessment order only if during the course of search, any money, bullion, jewellery and other valuable article or thing, or the documents found belong to other person prior to 1.6.2015, and the AO of the searched person was satisfied that such documents disclosed undisclosed income. The documents belonged to the appellants considered under this compartment of the arguments were not found, rather certain information relating to the assessees were found to be embedded in these documents, but prior to 1.6.2015, jurisdiction under section 153C cannot be invoked on the basis of such information. Therefore, we allow this preliminary ground of appeal raised by these 43 appellants (assessees) and quash all these assessment orders passed in the appeals mentioned at serial no.1 to 43 of the cause title of this order. Thus all the appeals of the assessee are partly allowed whereas the Revenue's appeal are dismissed." 6.4 When the Misc. Applications in respect of this category was filed in the order passed under the concerned Misc. Applications, the Tribunal in the MA Order impugned in these petit....
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....e basis of which proceedings under section 153C of the Act were initiated, were not belonging to the assessee. However from prima facie perusal of satisfaction note it revealed that the materials seized belong to the assessee. In this regard the tribunal also erred in not considering the decision of Hon'ble Jurisdictional high court in case of Kamlesh Dharamshi Patel vs. CIT reported in 31 taxmann.com 50 where it was held that the relation and reference of seized material. & Ors. (Shri Deepak Kumar Vasvani & Ors.) to the assesse is to be seen in the light of language of satisfaction note. The ITAT further erred in not directly applying the order of tribunal in case of Anilkumar Gopikisan Aggarwal against which department is in appeal and not considering the judgment of Hon'ble Delhi High Court in case of Kabul Chawla (supra) where the term undisclosed income is defined 23.2 In this regard, we note that the ITAT after elaborate discussion on the issue whether search materials belong to assessee or not, has taken a view that such materials do not belong to the assessee. In holding so the ITAT analyses the fact available on record, gives various reasoning and also refer the se....
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....at the assessment order was passed in the case of the respondent assessee on 26.12.2017. The question that would deserve consideration is whether the Misc. Applications were rightly rejected. The perusal of the Misc. Applications in this category indicates that the same was filed on the ground that the Tribunal erred in not holding that various documents clearly proved that the documents seized "belong" to the assessee. The other ground was that the Tribunal erred in not considering the decision in the case of Kamleshbhai Dharamshibhai Patel (supra) which stated that the language used in the satisfaction note will have to be seen with reference to the seized material. 7.3 Reading of the satisfaction note which has been reproduced in the relevant paras of the Appellate Order indicates that the note has brought in the wider concept of correlating the documents seized pertain to/or related to the assessees. When the revenue's case itself as per the satisfaction note wanted the scope to be considering the seized documents in "relation to/pertain to" now it is not open for them to apply for rectification on the ground that the Appellate Tribunal committed an error in not considering ....
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.... has been reproduced would indicate that the essential requirement for assumption of jurisdiction under Section 153C as it stood prior to the amendment qua the "other person" is that the seized documents forming the basis of the satisfaction note must not merely "pertain" to the other person but belong to the other person. 8.4 The Delhi High Court in the case of Pr.CIT vs Index Securities, (2017) 86 taxmann.com 84 (Delhi) has reproduced the decision of the Supreme Court in the case of Pr.CIT vs Vinita Chaurasia (2017) 394 ITR 758. The relevant paras of the decision read as under: "Analysis and reasons 27. The recent decision of the Supreme Court in Commissioner of Income Tax-III, Pune v. Sinhgad Technical Education Society (supra) is a complete answer to both points urged by the Revenue. The said decision, therefore, requires to be discussed in some detail. 28.1 The Supreme Court noted that the Assesseehad raised a challenge to the validity of the assumption of jurisdiction by the AO under Section 153C of the Act for the first time before the ITAT. It was urged on behalf of the Revenue that the ITAT erred in allowing the said challenge by the Assessee ....
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....he High Court affirming this view of the Tribunal is, therefore, without any blemish. Before us, it was argued by the Respondent that notice in respect of the Assessment Years 2000-01 and 2001-02 was time barred. However, in view of our aforementioned findings, it is not necessary to enter into this controversy." 28.3 From a reading of the above two paragraphs, itis plain that the Supreme Court (i) agreed with the ITAT that the documents seized had to relate to the AYs whose assessments were reopened and that this was an essential jurisdictional fact and (ii) upheld the decision of the ITAT to permit the additional ground to be raised before it for the first time. 28.4 The Supreme Court also agreed with thedecision of the Gujarat High Court in Kamleshbhai Dharamshibhai Patel (supra) to the extent it held that "it is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person other than the person referred to in Section 153A of the Act." The Supreme Court observed: "This proposition of law laid down by the High Court is correct,....
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....ecision of the jurisdictional high court is baseless. What the decision in the case of Kamleshbhai Dharamshibhai Patel (supra) indicates is that the essential requirement to invoke Section 153C is that the documents seized must belong to the assessee concerned. 8.6 The Tribunal in Appeal in context of the satisfaction note which brought in the concept of "pertains to/related to" in the case on hand found that when the search was prior to 1.6.2015, the post amendment criteria could not apply. In doing so, it considered various decisions especially that of the jurisdictional high court that covered the issue in the case of Anil Kumar Gopi Krishna Agrawal (supra) and therefore the Order refusing to entertain the Rectification Application on this count cannot be faulted. 9. Now coming to the argument of the learned Counsel for the Revenue that the decision of Vikram Bhatia (supra) of the Supreme Court would squarely apply and when read in light to the decision in the case of Saurashtra Kutch Stock Exchange Ltd.(supra) which said that failure to consider subsequent decision would be a good ground to rectify an order, some dates need to be mentioned. 9.1 The order of the Tribuna....
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.... 69/Ahd/2021 IT(SS)A 283/ Ahd/2019 9 Venus Infrabuild 12079 of 2023 15 Of 2022 2014-15 MA 73/Ahd/2021 IT(SS)A 836/ Ahd/2019 In the remaining 22 petitions which are pertaining to Misc. Applications of this category 1, no Tax Appeals are preferred as a result of low tax effect. B. CATEGORY-2:WHETHER THE ASSESSMENTS UNDER SECTION 153A IS TO BE FRAMED STRICTLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IN CASE OF CONCERNED ASSESSEE. 10. Here the Tribunal in considering the Appeals considered the dispute as to whether the assessment under Section 153A is to be framed directly based on incriminating material found during the search carried out in the cases of the concerned assessees. Based on the decisions of the High Courts, the assessees contended that assessments under Section 153A have to be framed on the basis of material found during the course of the search or requisitioned under Section 132A of the Act. Material found during the search of the third person cannot be used for the purposes of Section 153A. The submission of the assessees was that the assessment orders under Section 143 (3) read with Section 153A have to ....
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....other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of searc....
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....t during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person." 31. Order of the ITAT Delhi Bench in other cases viz. Asha Rani Lakhotia vs. ACIT and Subhag Khattar Vs. ACIT are on the same line. 32. Hon'ble Delhi High Court in the case of Subhag Khattar in Tax Appeal No. 60 of 2017 has considered the following question of law: "Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the additions made under Section 153A read with Section 143(3) of the Income Tax Act, 1961 in the circumstances of the case, were not justified and supportable in law? " 33. After putting reliance upon its decision in the case of CIT Vs. Kabul Chawla (supra) has replied this question as under: "6. The Assessee went in appeal before the Commissioner of Income Tax (Appeals) who dismissed it by an order dated 27th November, 2014. A further appeal was filed by the Assessee before the ITAT. The ITAT, inter alia, found substance in the contention of the Assessee that the assessment under Section....
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....earch to imply incriminating material, as against the finding of the Delhi High Court in Filatex India Ltd. v. CITIV (2015) 229 Taxman 555 wherein it is held that during the assessment u/s 153A additions need not be restricted or limited to incriminating material found during the course of search?" 35. Hon'ble Court concurred with the decision of Hon'ble Delhi High Court. We deem it appropriate to take note of relevant part of the decision, which reads as under: "16. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to....
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....ced reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K. Modi regarding the on-money received, copies of the assessment orders in case of said persons and also requested the Assessing Officer to permit him to cross-examine the said persons. The Assessing Officer issued summons to the said persons, however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to cross-examine the said persons, the Assessing Officer made the addition in question. 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in th....
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....rn with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed." 36. As far as decisions relied upon by the ld. CIT-DR are concerned, we have already considered the decision in the case of E.N. Gopakumar (supra). Other decisions are also on the similar line, but they are not in coherence with the position of law propounded by the Hon'ble jurisdictional High Court. Therefore, Tribunal being subordinate to the Hon'ble Gujarat High Court, is required to first follow Hon'ble Supreme Court and thereafter Hon'ble jurisdictional High Court. If no ratio of the law is available from Hon'ble Supreme Court as well as Hon'ble jurisdictional high Court, then the decision of non-jurisdictional High Court is to be followed. Therefore, we do n....
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....ifferent sections. In the present group of three assessees in different assessment years, search was conducted, but the additions have been made on the basis of the material found during the search relating to some third person. In other words, the AO has not made the addition on the basis of material found during the course of search of these three assessees." 10.2 Reading the findings of the Appellate Tribunal would indicate that the Tribunal had extensively considered the decision of the Delhi High Court in the case of CIT vs Kabul Chawla reported in 380 ITR 573. In the appeals under consideration before the Tribunal, simultaneous search was carried out at the premises of the Venus Infrastructure and Ashok Sunderdas Vaswani and the material found during the search could be used while framing assessment of Rajesh Vaswani and Deepak Vaswani. Material recovered from the premises of the other persons cannot be used in the hands of the searched persons. The Tribunal in detail analyzed the decisions of various High Courts and held that looking to the scheme of the Income Tax Act in case a search is carried out on an assessee then the search would give rise to proceedings under Sect....
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.... misplaced and which is against the principles laid down by the Hon'ble Supreme Court in the case of the VLS Finance Ltd versus CIT reported in 384 ITR 1. But the ITAT inadvertently has misinterpreted the impugned judgement of the Hon'ble Supreme Court. iii. & Ors. (Shri Deepak Kumar Vasvani & The last Panchnama was drawn in the month of May 2015 whereas the ITAT inadvertently has taken the same as March 2015 for calculating the Limitation period of passing the assessment order. iv. The locker No. 58, in the name of Shri Deepak Vaswani, maintained with bank of Maharashtra, SG Highway, wherefrom unaccounted jewellery of Rs. 2,48,400.00 was recovered. But the ITAT inadvertently has given a finding that such locker was not in the name of the assessee. 12.1 In view of the above, the learned DR before us contended that the order of the ITAT suffers from apparent mistakes and therefore, the same needs to be recalled within the provisions of section 254(2) of the Act. 12.2 On the other hand, the learned AR for the assessee before us contended that the ITAT has passed the order in detail after analysing all the issues raised in the impugned appea....
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....passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. In holding so we draw support and guidance from the judgment of Hon'ble Supreme Court in case of CIT vs. Reliance Telecom Ltd. (supra)." 10.5 In Category 2, the details of SCA where Tax Appals are filed as under: Sr. No. Assessee / Respondent SCA No. A.Y. M.A. No. IT(SS)A No. (Assessee (A)/Revenue (R)) T.A. No. Remarks 1. Rajesh Sundardas Vaswani 12062/2023 2009-10 91/Ahd/2021 95/Ahd/2019 (A) 54/2022 Lead ITA /Appeal 2 12060/2023 2010-11 92/Ahd/2021 96/Ahd/2019 (A) 46/2022 3. 12059/2023 2011-12 93/Ahd/2021 97/Ahd/2019 (A) 20/2022 4. 12046/2023 2012- 13 94/Ahd/2021 98/Ahd/2019 (A) 37/2022 5. 12048/2023 2013-14 95/Ahd/2021 99/Ahd/2019 (A) 33/2022 6. 12049/2023 2014- 15 97/Ahd/2021 100/Ahd/2019 (A) 9/2022 7. 12053/2023 2015- 16 96/Ahd/2021 101/Ahd/2019 (A) 22/2022 8. 12054/2023 2009- 10 58/Ahd/2021 235/A....
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....thorisation for search under Section 132 or requisition under Section 132A of the Act was executed. It was the case of the assessees that search in the case was conducted on 10.3.2015 and 12.3.2015 which lasted up to 13.3.2015. The time limit therefore for passing the assessment orders was 31,3,2017 within a period of two years from the end of the financial year (2014-2015) whereas the assessment order was framed beyond time on 26.12.2017. No doubt, as submitted by the learned assessee's counsel before the Tribunal that prohibitory orders can be issued and in the currency of such orders the period of limitation would get enhanced. The case of the assessees was that these prohibitory orders were issued merely to get a longer period of limitation. 11.1 After taking note of the submissions and the case law and the relevant provision, the Tribunal gave its findings in Paras 50-62 as under: "50. We have duly considered the rival contentions and gone through the record carefully. Section 153B has a direct bearing on the controversy. Therefore, we take note of the relevant part of this Section. 153B. (1) Notwithstanding anything contained in Section 153, the Assessing....
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....gments cited before us by the parties, this provisions under s.158BE Explanation (2) has been explained elaborately and the first judgment we would like to put in service is the judgment of the Hon'ble Karnataka High Court. The relevant discussion in that judgment is contained in para 73 to 75 which reads as under: "73. The second proviso to Section 132(1) deals with the "deemed seizure". When in the course of search, it is not possible to seize for the reasons set out in the aforesaid provisions. It is possible under four circumstances: (a) where it is not possible or practicable to take physical possession of any valuable article or thing ; (b) remove it to a safe place due to its volume, weight; (c) other physical characteristics ; and (d) due to being its dangers nature. 74. Therefore, the law recognizes such a situation and has provided a remedy to tackle such problems. The authorised officer has been given a discretion for the reasons to be recorded in writing to pass a restraint order in respect of the articles, books and other material which he could not take physical possession of, i.e., by making an inventory and leavi....
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....e probable continuation of search would be agonising. It is invading the right and freedom of the petitioners for a period more than required or necessary. The orders which are passed under Section 132(3) may have a very far-reaching effect on the business of an assessee. The order of restraint may adversely affect the business and, therefore, adequate safeguards are sought to be provided in the Act by the insertion of the provisions of sub-Section (8A) in Section 132. In order that the restraint order must not be continued indefinitely, sub-Section (8A) of Section 132 provides that the restraint order can be continued only if, before the expiry of 60 days, and for reasons to be recorded, the Commissioner grants an extension. The provisions of sub-Section (8A) cannot be bypassed or rendered nugatory by revoking an order under Section 132(3) and, thereafter, pass another order on the same date. In the nature of things, the search is to be done expeditiously and the undisclosed income is to be unearthed and proceeding has to be initiated against such person and the tax legitimately due to the Government is to be recovered. There cannot be any laxity on the part of the authorised offi....
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....tion is inserted. For the purpose of computing the limitation, it is the one year from the end of the month in which the last of the authorisations was executed. If there are more than one authorisation issued on the same day, then the last panchnama drawn in relation to the warrant of authorisation issued on the same day. As the period commences from the end of the month of the execution of the authorisation, the law has provided for the authorised officer to visit the purpose of inspection regarding the material which is the subject matter of prohibitory order or the restraint order, even after search. However, the said exercise has to be done expeditiously, as the period of limitation starts from the date of search was concluded as evidenced by the panchnama, as otherwise the very object with which these provisions was introduced would be defeated. 79. Circular No. 772, dated 23rd December, 1998, issued by Central Board of Direct Taxes explains this position as under ([1999] 235 ITR (St.) 35) : "According to Section 158BE, limitation of 2 years has to be counted from the end of the month in which last of the authorisations was executed. Use of the word 'aut....
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....r or prohibitory order, if a panchnama is written, that would not be the panchnama which has to be looked into for the purpose of computing the period of limitation. But, such a panchnama would only record what transpires on a re-visit to the premises and the incriminating material seized would become part of the search conducted in pursuance of the authorisation and would become the subject-matter of block assessment proceedings. But, such a panchnama would not extend the period of limitation. It is because the limitation is prescribed under the statute. If proceedings are not initiated within the time prescribed, the remedy is lost. The assessee would acquire a valuable right. Such a right cannot be at the mercy of the officials, who do not discharge their duties in accordance with law. The procedure prescribed under Section 132 of the Act is elaborate and exhaustive. The said substantive provision expressly provides for search and seizure. In the entire provision there is no indication of that search once commenced can be postponed. What can be postponed is only seizure of the articles. Therefore, once search commences it has to come to an end with the search party leaving the p....
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.... is passed. In such a case, it can be said that though the warrant of authorisation has been executed, proceedings under Section 132(3) are pending. Since the word 'execute', also means 'to complete', one has to wait for conclusion of the proceedings under Section 132(3) for the purpose of computation of limitation under Section 158BE(1) and the period of one year has to be computed from the end of the month in which the proceeding under Section 132(3) are conclude. If there are more than one warrant limitation will be counted from the execution of the last one. A contrary view is as much possible if one were to consider the spirit of the scheme which envisages expeditious disposal of the search cases and it would be reasonable to interpret that execution of warrant is not tantamount to completion of proceedings under Section 132 or 132A the period during which the proceedings under Section 132(3) remained pending has to be excluded for the purpose of counting limitation of one or two years under Section 158BE. Otherwise, it may lead to absurd results as it may take several years before restraint under Section 132(3) is lifted and it may thus extend the period of one or....
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....'ble Delhi High court in the case of PCIT vs. PPC Business & Products Pvt. Ltd. In this case, two places were searched one authorization was for the search to be undertaken Pithampura, Delhi and other premise Ashok Vihar, Delhi. In the authorization both the premises were shown to be in possession of the assessee and his brother both being the Directors of the entity including JHM. In respect of the authorization of the search of Ashok Vihar premise of first panchnama dated 22^nd March, 2007 and the warrant was in the case of assessee's brother i.e. Mr. Sanjay Jain. The search was closed on 22^nd March, 2007 as temporarily concluded. Second panchnama in relation to authorization of Ashok Vihar premises was prepared on 15^th May 2007 when prohibitory order was lifted. One Neena Jain was the person who has made acknowledgment of having received the second panchnama dated 15^th May, 2007 but according to the assessee, the jewellery belonging to Neena Jain at Ashok Vihar premise was valued on 21^st March, 2007 when the alleged search was temporarily concluded. The case of the assessee was that search was concluded on 22^nd March, 2007 when panchnama was prepared and restrain order was ....
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....icitor General from the Explanation (2) of Section 158BE but in paragraph no. 29, Hon'ble Supreme Court had specifically observed that without going into legal niecety. Thus according to the learned counsel for the assessee, it is the judgment on the facts of that case. This aspect has been considered by the Hon'ble Delhi High Court in the case of CIT vs. S. K. Katiyal. In this case also, an identical issue came up before the Hon'ble Delhi High Court and Hon'ble Court has considered the judgement of Bombay High Court in the case of Sandhya P. Naik, Kerala High Court in Dr. C. Balakrishnan Nair &Hon'ble Karnataka High Court in, C. Ramaiah Reddy, while dealing with its earlier decision in the case of VLS Finance. The Hon'ble Court made following observations: "30. The decision in VLS Finance (supra) also rests on a factual basis which is different from that of the present appeal. First of all, VLS Finance (supra) is a decision rendered in a writ petition under article 226 of the Constitution of India. In exercise of its writ jurisdiction a High Court decides cases on the basis of affidavits. It is open to the High Court to arrive at conclusions of fact (as well as of law....
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....001 is unexplained." 57. In other words, the Hon'ble Delhi High Court did not accept the contention of VLS Finance and dismissed its writ petition. The decision of Hon'ble Delhi High Court was taken up to the Hon'ble Supreme Court and Hon'ble Supreme Court affirmed the Delhi High Court. The Hon'ble Delhi High Court while dealing with this point was of the view that proposition in VLS Finance based on its facts is altogether different. 58. The next decision which was relied upon by the learned counsel for the assessee is the third member decision in the case of Nandlal M. Gandhi vs. ACIT 115 ITD 1. The facts in this case are that a search and seizure operation was carried out under s.132 of the Act at the residential premises of the assessee on 28th July, 1997 and continued till 02:30 a.m. on 29th July, 1997. During the said search, certain incriminating materials which inter alia included jewellery and shares, were found and the search party prepared an inventory in respect of search material as per para 5 of the panchnama only books of accounts and documents as per Annexure 'A' were seized and no seizure was affected in respect of other materials found during....
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.... in the case of Sandhya P. Naik while explaining the scope of Section 132(3) has observed that passing restraint order under Section 132(3), the time limit available for assessment cannot be extended. The other decisions referred by the learned counsel for the assessee are also to this effect, in the case of PPC Business Hon'ble Delhi High Court has categorically observed that when nothing was recovered while revoking the prohibitory order there cannot give rise to second panchnama. The Hon'ble Court in paragraph 26 of the judgment recorded that when nothing new for being seized was found then there would be no occasion to draw up a panchnama at all. It has been demonstrated before us that in the case of Ashok Sundardas Vasvani nothing was recovered when prohibitory order was lifted. 60. The relevant extract of the judgment of Hon'ble Kerala High court in the case of Dr. C Balakrishnan Nair v CIT reported in 237 ITR 70 reads as under: 10. From Ext.P3 second Panchanama dated 1011-1995 seven items, books of account and other valuable articles were seized. These articles which were available on 27-10-1995 were put in an almirah, according to the 2nd respondent, a....
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....ed from the premises of the assessee 5,729 gms. of gold ornaments, cash of Rs. 1,69,000 and books of account weighing nearly 500 kgs, then argument of the department that 45 kg. of silver ornaments had to be placed under PO due to their weight was not found tenable by the Tribunal and confirmed by the High Court as no impracticability was visualized in non seizure of 45 kg. of silver ornaments. 62. Now coming to the case on hand, we find that on the revocation of the prohibitory orders, the search team has seized only 277 pages which was very much possible to seize them during the search proceedings which were concluded on 13^th March 2015. The search team has to justify in the order passed under Section 132(3) of the Act that books/documents/valuables are not practicable to seize along with the reasons other than those mentioned in second proviso to Section 132(1)." 11.2 Appreciating the provisions of Section 153B of the Act, the Tribunal observed that the assessment orders have to be passed within two years from the end of the financial year in which the last authorisation was executed. The Tribunal, considering and reproducing the decision of the Karnataka High Court....
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....tention of learned counsel for the Department that it was not practical to seize huge quantity of silver at odd hours, was rightly held to be untenable by the Income-tax Appellate Tribunal, because at the same odd hour, the search party seized and removed from the premises of the assessee 5,729 gms. of gold ornaments, cash of Rs. 1,69,000 and books of account, weighing nearly 500 kgs. on October 26, 1996, 6 kgs. of silver articles in the said cupboard were released, a panchanama was made and a further order under Section 132(3) passed with respect to the said sealed cupboard and the seal was placed again. Thus, the Income-tax Appellate Tribunal rightly held that the proceedings. On October 26, 1996, could not be considered as part of the execution of the search proceedings which concluded on October 20, 1996. Indeed, by simply staring in the panchanama that the search is temporarily suspended, the authorised officer cannot keep the search proceedings in operation by passing a restraint order under Section 132(3). Reliance placed by the Department on the judgment of the Allahabad High Court in the case of Sriram Jaiswal v. Union of India [1989] 176 ITR 261, was correct. The restrain....
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....the Department itself has admitted that there were many defects in the panchanama. They were repeatedly saying that there were many defects in the panchanama and still were saying that "believe in it and accept it", is not acceptable. 17. Having heard both the advocates at length and having gone through the impugned order, so also the various authorities cited by Mr. Rivonkar, in our opinion, no fault can be found with the impugned order of the Income-tax Appellate Tribunal, Pune Bench. The impugned assessment indeed is barred by limitation and also invalid. In view of this, therefore, the impugned assessment was rightly annulled. No interference is therefore warranted. Hence, the following order : All the tax appeals are dismissed in limine." 11.3 While rejecting the Misc. Applications, the Tribunal observed as under: "14. The 2nd grievance of the Revenue is that the ITAT erred in holding that prohibitory order under section 132(2) was passed to prolong the search proceeding and thereby taken last date of panchnama drawn in March 2015 instead May 2015 which is in contrast to the decision of Hon'ble Supreme Court in case of VLS Finance Ltd(supra). The ....
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.... M.A. No. IT(SS)A No. (Assessee (A) / Revenue(R)) T.A. No. Remarks 1 16366/2023 2009-10 29/Ahd/2021 241/Ahd/ 2019 (R) 38/2022 Lead ITA/ Appeal 2 Ashok Sundardas Vaswani 16336/2023 2010-11 30/Ahd/2021 242/Ahd/2019 (R) 35/2022 3 16279/2023 2011-12 31/Ahd/2021 243/Ahd/2019 (R) 43/2022 4 16362/2023 2012-13 32/Ahd/2021 244/Ahd/2019 (R) 45/2022 5 16370/2023 2013-14 33/Ahd/2021 245/Ahd/2019 (R) 24/2022 6 16119/2023 2014-15 34/Ahd/2021 246/Ahd/2019 (R) 30/2022 7 16131/2023 2015-16 35/Ahd/2021 247/Ahd/2019 (R) 31/2022 8 16155/2023 2009-10 99/Ahd/2021 88/Ahd/2019 (A) 21/2022 9 16375/2023 2010-11 100/Ahd/2021 89/Ahd/2019 (A) 52/2022 10 16372/2023 2011-12 101/Ahd/2021 90/Ahd/2019 (A) 53/2022 11 16359/2023 2012-13 102/Ahd/2021 91/Ahd/2019 (A) 25/2022 12 16374/2023 2013-14 103/Ahd/2021 92/Ahd/2019 (A) 27/2022 13 16358/2023 2014-15 1....
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....23/Ahd/2021 250/Ahd/2019 (R) 71/2022 26 12087/2023 2012-13 24/Ahd/2021 251/Ahd/2019 (R) 63/2022 27 12089/2023 2013-14 25/Ahd/2021 252/Ahd/2019 (R) 50/2022 28 12090/2023 2014-15 26/Ahd/2021 253/Ahd/2019 (R) 70/2022 29 12091/2023 2015-16 27/Ahd/2021 254/Ahd/2019 (R) 39/2022 D. CATEGORY 4. WHETHER THE REOPENING OF THE ASSESSMENTS IN THE CASE OF ASHOK SUNDERDAS VASWANI IS JUSTIFIABLE ? 12. In a challenge to the validity of the assessment framed under Section 147 of the Act, what emerged from the facts was that the assessee was an individual and engaged in the business of property development. A search was carried out under section 132 of the Act on 10/3/2015 and 12/3/2015 on the Vaswani group. The assessee being part of the group was also subject of search. Notice under Section 148 was issued on 30/3/2015. The CIT upheld the order of assessment thereunder. The Income Tax Appellate Tribunal in the Appeal in paras 82-86 held as under: "82. We have heard the rival contentions of both the parties and perused the materials available on record. From t....
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....assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and for the relevant assessment year or years: The above provisions begins with the non obstante clause overriding the provisions of Section 147 of the Act. The provisions of Section 153A (1)(a) of the Act provides that once the search under Section 132 of the Act is conducted or requisition is made under Section 132A of the Act in the case of a person, the AO shall require such person to file return of income under for six preceding assessment year immediate to the assessment year in which search or requisition was made. Similarly the provision of Section 153A(1)(b) empowers the AO to assess or reassess the income for such six assessment year preceding to the A.Y. in which search conducted or requisition made. Thus in other words, the assessment under Section 153A of the Act as a result of search is applicable for the specified number of 6 years. 84. To illustrate the above provision, if a search was conducted dated 11th June 2015 falling under P.Y. 2015-16 relevant to A.Y. 2016-17, then, the following number of assessm....
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....ch was not the case in the instant case. [Para 11] Admittedly, the Assessing Officer had not issued notice of reassessment under Section 153A in respect of six assessment years, i.e., 2003-04 to 1998-99 whereas he had issued impugned notice of reassessment for the assessment year 1997-98 under Section 148 which was the subject-matter of the instant writ. [Para 12] The submission of the assessee that in cases of search, Section 148 had no application and, secondly, no order for reassessment could be passed beyond six years as provided in Section 153A could not be accepted. [Para 13] Section 148 being an independent Section, powers exercised by the Assessing Officer cannot be curtailed if the impugned notice otherwise satisfies the requirement of Section 148. The only fetter put on the powers of the Assessing Officer in taking recourse to Section 148 is that notice under said Section cannot be issued in relation to those six assessment years which are defined in Section 153A. This fetter is due to use of non obstante clause in Section 153A. In all other cases and for all other assessment years, Section 148 can always be resorted to subject of course to the ....
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....ilable on record, given various reasoning and also referred several judicial precedent. As Such the Revenue in M.A. has not pointed out any specific mistake in the order which is apparent from the record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. In holding so we draw support and guidance from the judgment of Hon'ble Supreme Court in case of CIT vs. Reliance Telecom Ltd. reported in 133 taxmann.com 41 where in was held as under: 4. In the present case, a detailed order was passed by the ITAT when it passed an order on 69- 2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under section 254(2) of the Act. If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to prefer the appeal before the High Court, whi....
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.... the High Court, but later on the Assessee withdrew the same in the instant case." 12.2 In this category of cases, the list of SCAs and relevant Tax Appeals are as under: DETAILS OF PETITIONS FILED IN VENUS GROUP OF MATTERS CATEGORY 4 CASES Sr. no. Assessee / Respondent SCA No. A.Y. M.A. No. IT(SS)A No. (Assessee (A) / Revenue (R)) T.A. No. Remarks 1 Rajesh Sundardas Vaswani 16361/2023 2008 -09 90/Ahd/2021 457/Ahd/2019 42/2022 Lead ITA/ Appeal 2 16373/2023 2008- 09 57/Ahd/2021 805/Ahd/2019 29/2022 3 Ashok Sundardas Vaswani 16388/2023 2008- 09 98/Ahd/2021 456/Ahd/2019 32/2022 4 16386/2023 2008- 09 28/Ahd/2021 806/Ahd/2019 48/2022 5 Deepak Budharmal Vaswani 16385/2023 2008- 09 12/Ahd/2021 461/Ahd/2019 16/2022 Lead MA 6 16389/2023 2008- 09 20/Ahd/2021 807/Ahd/2019 34/2022 13. Before we conclude, a brief re-look at the provisions of Section 254(2) and the decisions cited by Mr. Tushar Hemani, learned Senior Advocate needs to be considered. A bare reading of Section 2....
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....d that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by Section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2) of the Act. As observed hereinabove, the powers under Section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erro....
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....ction 254(2) of the Act. Power is conferred upon various authorities to rectify any "mistake apparent from the record". Though the expression "mistake" is of indefinite content and has a large subjective area of operation, yet, to attract the jurisdiction to rectify (an order) under Section 254(2), it is not sufficient if there is merely a mistake in the orders sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on the debatable point of law or undisputed question of fact, is not a mistake apparent from the record. 13 The contours of the jurisdiction under Section 254 (2) were examined by the Delhi High Court in Commissioner of Income Tax v. Income Tax Appellate Tribunal [(2005) 204 CTR Del 349]. It was held that: "6. It is evident from the above that the power available to the Tribunal is not in the nature of a review as is understood in legal parlance. The power is limited to correction of mistakes apparent from the record. What is significant is that the section envisages amendment of the original order of the Tribunal and not a total substitution thereof. That position is fairly well settled by two decisions of ....
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....l position, the Tribunal was not in our opinion justified in recalling the order passed by it in toto and setting the matter down for a fresh hearing. Just because a pronouncement made on the subject either by the Tribunal or by any other Court was not noticed by the Tribunal while taking a particular view on the merits of the controversy may constitute an error that would call for correction in an appropriate appeal against the order. Any such error may however fall short of constituting a mistake apparent from the record within the meaning of Section 254(2) of the Act. More importantly just because a point is debatable (which is one of the reasons given by the Tribunal in the instant case) would hardly provide a justification for recalling the order and fixing the appeal for a de novo hearing. While doing so, the Tribunal has no doubt made certain observations in regard to the levy of interest under Section 158BFA being statutory in nature with no power vested in any authority or Tribunal to condone the same, but the very fact that the Tribunal has made those observations would not render valid the order of recall passed by it. The net result of the order made by the Tribunal con....
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...., 1961. A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question. In Satyanarayan Laxminarayan Hegde and Ors. v. Millikarjun Bhavanappa Tirumale [1960] 1 SCR 890 this Court while spelling out the scope of the power of a High Court under Article 226 of the Constitution ruled that an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on a debatable point of law is not a mistake apparent from the record see Sidhramappa v. Commissioner of Income-tax, Bombay [1952] 21 ITR 333(Bom). The power of the officers mentioned in Section 154 of the Income tax Act, 1961 to correct "any mistake apparent from the record" is undoubtedly not more than that of the High Court to entertain a writ petition on the....
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.... it can be pointed out to the Court as regards the ground No. 3 and if the Court is convinced, then it may remit the matter to the Tribunal for fresh consideration of the ground No. 3, which the writ applicant is talking about. The power to rectify an order under Section 254(2) of the Act is extremely limited, as observed by the Delhi High Court in the case of Maruti Insurance (supra). It does not extend to correcting the errors of law or reappreciating the factual findings. Those properly fall within the appellate review of an order of Court of first instance. What legitimately falls for consideration are errors (mistakes) apparent from the record." 13.3 The Delhi High Court in the case of Commissioner of Income Tax-II v. Maruti Insurance Distribution Services Ltd. [(2012) 26 taxmann.com 68 (Delhi)] held as under: "9. The contours of the jurisdiction under Section 254 (2) were examined repeatedly by Division Benches of this Court. In Commissioner of Income Tax v. Income Tax Appellate Tribunal (2005) 204 CTR Del 349, it was held that: "6. It is evident from the above that the power available to the Tribunal is not in the nature of a review as is understood in l....
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....nt at a time when the appeal was taken up and was decided ex-parte. This position was highlighted by one of us (Justice Arijit Pasayat, Chief Justice) in CIT v. ITAT. Judged in the above background the order passed by the Tribunal is indefensible." 7. That being the legal position, the Tribunal was not in our opinion justified in recalling the order passed by it in toto and setting the matter down for a fresh hearing. Just because a pronouncement made on the subject either by the Tribunal or by any other Court was not noticed by the Tribunal while taking a particular view on the merits of the controversy may constitute an error that would call for correction in an appropriate appeal against the order. Any such error may however fall short of constituting a mistake apparent from the record within the meaning of Section 254(2) of the Act. More importantly just because a point is debatable (which is one of the reasons given by the Tribunal in the instant case) would hardly provide a justification for recalling the order and fixing the appeal for a de novo hearing. While doing so, the Tribunal has no doubt made certain observations in regard to the levy of interest under Secti....
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....oubt. Therefore the Income-tax Officer was not justified in thinking that on that question there can be no two opinions. It was not open to the Income-tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under Section 154 of the Income-tax Act, 1961. A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question. In Satyanarayan Laxminarayan Hegde and Ors. v. Millikarjun Bhavanappa Tirumale [1960] 1 SCR 890 this Court while spelling out the scope of the power of a High Court under Article 226 of the Constitution ruled that an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on a debatable point of law is not a mistake apparent from the record-see Sidhramappa v. Co....
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....2020 in various Tax Appeals under Section 260A of the Income Tax Act, 1960. We have set out against each Special Civil Application numbers category wise in which Tax Appeals have been filed. 15. In light of the decisions in the case of R.C.Sabharwal v. CIT reported in (2010) 2 taxmann.com 289 (Delhi) and in the case of CIT vs Muni Seva Ashram reported in (2013) 221 Taxman 27 (Guj), in such petitions where Tax Appeals are filed by the Revenue in the respective categories, the petitions so filed are not entertained while reserving the right of the Revenue to urge the grounds raised in these petitions while arguing the Appeals. The following petitions in which the Revenue has filed Tax Appeals and are pending are not entertained reserving the liberty to urge the grounds raised in the respective Tax Appeal. These petitions are accordingly disposed-off without assigning any further reasons. Sr.No. Assessee Before Hon'ble High Court Assessment Year Before Income Tax Appellate Tribunal SCA No. Tax Appeal No. Misc. Application No. Appeal No. 1 Hitesh Ashok Vaswani 12000 of....
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....1 Rajesh Sunderdas Vaswani 12028 of 2023 36 of 2022 2014-15 MA 62/Ahd/2021 IT(SS)A 239/Ahd/2019 22 Rajesh Sunderdas Vaswani 12024 of 2023 19 of 2022 2015-16 MA 63/Ahd/2021 IT(SS)A 240/Ahd/2019 23 Deepak Budharmal Vaswani 12020 of 2023 23 of 2022 2009-10 MA 13/Ahd/2021 IT(SS)A 111/Ahd/2019 24 Deepak Budharmal Vaswani 12017 of 2023 61 of 2022 2010-11 MA 14/Ahd/2021 IT(SS)A 112/Ahd/2019 25 Deepak Budharmal Vaswani 12016 of 2023 56 of 2022 2011-12 MA 15/Ahd/2021 IT(SS)A 113/Ahd/2019 26 Deepak Budharmal Vaswani 12014 of 2023 55 of 2022 2012-13 MA 16/Ahd/2021 IT(SS)A 114/Ahd/2019 27 Deepak Budharmal Vaswani 12081 of 2023 60 of 2022 2013-14 MA 17/Ahd/2021 IT(SS)A 115/Ahd/2019 28 Deepak Budharmal Vaswani 12082 of 2023 26 of 2022 2014-15 MA 18/Ahd/2021 IT(SS)A 116/Ahd/2019 29 Deepak Budharmal Vaswani 12083 of 2023 51 of 2022 2015-16 MA 19/Ahd/2021 IT(SS)A 117/Ahd/2019 30 Deepak Budharmal Vaswani 12084 of 2023 69 of 2022 2009-10 MA ....
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....wani 16124 of 2023 64 of 2022 2015-16 MA 105/Ahd/2021 IT(SS)A 94/Ahd/2019 51 Venus Infrastructure & Dev. P. Ltd. 16090 of 2023 66 of 2022 2009-10 MA 74/Ahd/2021 IT(SS)A 228/Ahd/2019 52 Venus Infrastructure & Dev. P. Ltd. 16082 of 2023 58 of 2022 2010-11 MA 75/Ahd/2021 IT(SS)A 229/Ahd/2019 53 Venus Infrastructure & Dev. P. Ltd. 16154 of 2023 62 of 2022 2011-12 MA 76/Ahd/2021 IT(SS)A 230/Ahd/2019 54 Venus Infrastructure & Dev. P. Ltd. 16369 of 2023 68 of 2022 2012-13 MA 77/Ahd/2021 IT(SS)A 231/Ahd/2019 55 Venus Infrastructure & Dev. P. Ltd. 16087 of 2023 41 of 2022 2014-15 MA 79/Ahd/2021 IT(SS)A 233/Ahd/2019 56 Venus Infrastructure & Dev. P. Ltd. 16109 of 2023 44 of 2022 2015-16 MA 80/Ahd/2021 IT(SS)A 234/Ahd/2019 57 Venus Infrastructure & Dev. P. Ltd. 16177 of 2023 12 of 2022 2009-10 MA 83/Ahd/2021 IT(SS)A 102/Ahd/2019 58 Venus Infrastructure & Dev. P. Ltd. 16117 of 2023 57 of 2022 2010-11 MA 84/Ahd/2021 IT(SS)A 103/Ahd/2019 59 Venus Infrastruc....
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....A 53/Ahd/2021 IT(SS)A 126/Ahd/2019 6 Vanita Dilip Vaswani 12035 of 2023 --- 2012-13 MA 54/Ahd/2021 IT(SS)A 127/Ahd/2019 7 Vanita Dilip Vaswani 12032 of 2023 --- 2013-14 MA 55/Ahd/2021 IT(SS)A 128/Ahd/2019 8 Vanita Dilip Vaswani 12031 of 2023 --- 2014-15 MA 56/Ahd/2021 IT(SS)A 129/Ahd/2019 9 Mamta Ashok Vaswani 12030 of 2023 --- 2009-10 MA 42/Ahd/2021 IT(SS)A 130/Ahd/2019 10 Mamta Ashok Vaswani 12075 of 2023 --- 2010-11 MA 43/Ahd/2021 IT(SS)A 131/Ahd/2019 11 Mamta Ashok Vaswani 12074 of 2023 --- 2011-12 MA 44/Ahd/2021 IT(SS)A 132/Ahd/2019 12 Mamta Ashok Vaswani 12073 of 2023 --- 2012-13 MA 45/Ahd/2021 IT(SS)A 133/Ahd/2019 13 Mamta Ashok Vaswani 12071 of 2023 --- 2013-14 MA 46/Ahd/2021 IT(SS)A 134/Ahd/2019 14 Mamta Ashok Vaswani 12069 of 2023 --- 2014-15 MA 47/Ahd/2021 IT(SS)A 135/Ahd/2019 15 Harsha Deepak Vaswani 12068 of 2023 --- 2009-10 MA 49/Ahd/2021 IT(SS)A 204/Ahd/2019 16 Harsha Deepak Vaswani 12066 of 2023 --- 2010-11 MA 50/Ahd/2021 IT(SS)A 205/Ah....