Income Tax Appellate Tribunal - Cochin
M/S.P.A.Kuriakose Jewellers,, Aluva vs The Acit, Ernakulam on 24 May, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
COCHIN BENCH, COCHIN
Before Shri Chandra Poojari, AM & Shri George George K, JM
ITA No.459/Coch/2010 : Asst.Year 2005-2006
ITA No.456/Coch/2010 : Asst.Year 2002-2003
ITA No.457/Coch/2010 : Asst.Year 2003-2004
ITA No.458/Coch/2010 : Asst.Year 2004-2005
ITA No.460/Coch/2010 : Asst.Year 2006-2007
ITA No.461/Coch/2010 : Asst.Year 2007-2008
ITA No.148/Coch/2015 : Asst.Year 2005-2006
ITA No.149/Coch/2015 : Asst.Year 2006-2007
ITA No.150/Coch/2015 : Asst.Year 2007-2008
&
SA No.17/Coch/2015
(Arising out of ITA No.148/Coch/2015)
SA No.18/Coch/2015
(Arising out of ITA No.149/Coch/2015)
SA No.19/Coch/2015
(Arising out of ITA No.150/Coch/2015)
M/s.P.A.Kuriakose Jewellers The Asst.Commissioner of
Padayattil Towers, Highway Vs. Income-tax,
Junction, Angamaly. Central Circle 1
PAN : AAGFP6239G. Ernakulam.
(Appellant) (Respondent)
Appellant by : Sri. Anil D.Nair, Advocate
Respondent by : Sri.Santham Bose, CIT-DR &
Sri. A.Dhanaraj, Senior DR
Date of
Date of Hearing : 23.05.2018 Pronouncement : 24.05.2018
ORDER
Per Bench ITA No.456/Coch/2010 to 461/Coch/2010 concerning assessment years 2002-2003 to assessment year 2007-2008 was restored to the ITAT by the judgment of the Hon'ble High Court in ITA No.172/2011 to 174/2011 and ITA 2 ITA No.459/Coch/2010 & Ors. SA No.17, 18 & 19/Coch/2015 M/s.P.A.Kuriakose Jewellers.
No.157/2011, 159/2011 and 164/2011 (judgment dated 11.11.2016).
2. ITA No.148/Coch/2015 to ITA No.150/Coch/2015 are appeals filed by the assessee against the orders of the CIT(A) confirming the orders of the Assessing Officer imposing penalty u/s 271(1)(c) of the I.T.Act. The relevant assessment years concerning the imposition of penalty are 2005-2006 to 2007-2008. The assessee has also filed three stay applications along with ITA No.148/Coch/2015 to ITA No.150/Coch/2015.
3. We shall take up for adjudication ITA No.456/Coch/2010 to ITA No.461/Coch/2010, which was restored by the Hon'ble High Court.
4. The brief facts of the case are as follows:-
The assessee is a firm doing business in jewellery. There was a search and seizure operation in the premises of the assessee u/s 132 of the I.T.Act on 13.02.2007. Subsequent to the search, assessment u/s 153A r.w.s. 143(3) of the I.T.Act was completed for assessment years 2002-2003 to 2007- 2008. On further appeal, the CIT(A) granted some relief to the assessee. The order of the CIT(A) was subjected to further appeal before the ITAT by the assessee. The ITAT disposed off the appeals filed by the assessee vide its order dated 04.05.2011. The ITAT allowed the appeals of the assessee for 3 ITA No.459/Coch/2010 & Ors. SA No.17, 18 & 19/Coch/2015 M/s.P.A.Kuriakose Jewellers.
assessment years 2002-2003 to 2004-2005 and dismissed the appeals for assessment years 2005-2006 to 2007-2008.
5. Aggrieved by the order of the ITAT, both the assessees and the Revenue filed appeal u/s 260A of the I.T.Act before the Hon'ble High Court. The Hon'ble High Court remanded the case to the ITAT vide judgment dated 11.11.2016. The Hon'ble High Court was pleased to follow the judgment of the Hon'ble High Court in ITA Nos.31, 38, 53, 63 and 64 of 2016. The Hon'ble High Court, while remanding the case to the Tribunal, had granted liberty to the assessee as well as the Revenue to raise additional grounds. Pursuant to the case being remanded by the Hon'ble High Court, the assessee has filed a petition to raise an additional ground in all the cases. The additional ground raised reads as follow:-
"Whether by virtue of the provisions of clause (iib) of Section 132(1) of the Income Tax Act, 1961 adopting the definition of `electronic record' supplied by Section 2(1)(f) of the Information Technology Act, 200 to the data seized from a computer, the threshold determination related to the admissibility and legitimacy of such data in whatever form has not to be undertaken in accordance with law and in particular, the mandatory prescription of Sections 65A, 65B of the Evidence Act, 1872 read with Section 93 and the Second Schedule of the Information Technology Act, 2000; before raising the presumption under sub-section (4-A) of Section 132 and also before using a statement taken from any person on the basis of such seized data against the assessee under sub-section (4) of Section 132?"
6. It was submitted that the additional ground raised is a pure legal issue, which goes to the root of the matter and for substantial cause and justice, the same needs to be admitted and adjudicated. It was submitted by the learned Counsel for 4 ITA No.459/Coch/2010 & Ors. SA No.17, 18 & 19/Coch/2015 M/s.P.A.Kuriakose Jewellers.
the assessee that during the course of search on 13.02.2007, apart from certain loose computer sheets recovered, the Computer Processing Unit (CPU) of the assessee was seized by the search party. It was submitted that additions are mainly based on the electronic record retrieved from the CPU. It was stated that Department did not comply with the conditions mentioned u/s 65B(4) of the Evidence Act, when electronic record seized was used as evidence against the assessee. The learned Counsel relied on the judgment of the Hon'ble Supreme Court in the case of Anvar P.V. v. P.K.Basheer & Ors. [(2014) 10 Supreme Court Cases 473]. Further, by relying on the judgment of the Hon'ble Supreme Court in the case of T.K.Sanalkumar v. CIT Cochin (judgment dated 04.07.2012 in SLP No.32635 of 2011), it was submitted that the ground which was similar to the additional ground raised in these appeals were considered by the Hon'ble Supreme Court and the Hon'ble Court directed the CIT(A) to dispose off the ground relating to compliance of conditions mandated u/s 65B(4) of the Evidence Act.
7. The learned Departmental Representative supported the order of the A.O. and the CIT(A). However, there was no objection for admission and remand of the additional ground to the files of the A.O.
8. We have heard the rival submissions and perused the material on record. The Hon'ble High Court while restoring the cases to the Tribunal vide judgment dated 11.11.2016, 5 ITA No.459/Coch/2010 & Ors. SA No.17, 18 & 19/Coch/2015 M/s.P.A.Kuriakose Jewellers.
had granted liberty to the assessee as well as the Revenue to raise additional grounds. Pursuant to the judgment of the Hon'ble High Court, the assessee had filed the additional ground mentioned above. The additional ground raised is a pure legal issue and goes to the root of the matter since the major additions are based on the materials that are retrieved from the CPU of the computer that was seized by the Department during the course of search. The Hon'ble Supreme Court in the case of Anvar P.V. v. P.K.Basheer & Ors. (supra) had held that if electronic record is being used as evidence, the conditions mentioned u/s 65B(4) of the Evidence Act has to be complied with. The conditions that are to be satisfied are enumerated in para 15 of the judgment of the Hon'ble Supreme Court on Anvar P.V. v. P.K.Basheer & Ors. (supra). The Hon'ble Supreme Court in the case of T.K.Sanalkumar v. CIT Cochin (supra), while disposing off SLP filed by the assessee, had directed the Commissioner to consider a ground which is identical to the additional ground raised by the assessee. The additional ground raised by the assessee is a legal issue, which is very vital for adjudicating the case, therefore, in the interest of justice and substantial cause, we admit the additional ground raised. Since the additional ground raised was not considered by the lower authorities, we restore the additional ground for adjudication to the files of the Assessing Officer. As we have restored the adjudication of the additional ground to the files of the A.O., 6 ITA No.459/Coch/2010 & Ors. SA No.17, 18 & 19/Coch/2015 M/s.P.A.Kuriakose Jewellers.
the other issues which are there in these appeals are also to be adjudicated by the A.O. afresh. It is ordered accordingly.
ITA No.148/Coch/2015 to 150/Coch/20159. These appeals are arising out of the orders of the CIT(A), which have confirmed imposition of penalty for A.Y. 2005- 2006 to 2007-2008. Since we have restored the quantum assessments to the files of the A.O., these appeals are also restored to the Assessing Officer. The A.O. shall take a decision on the imposition of penalty u/s 271(1)(c) after the quantum assessments, if any, are framed. It is ordered accordingly.
11. In the result, the appeals filed by the assessee are allowed for statistical purposes.
SA Nos.17, 18 & 19/Coch/2015
12. Since we have disposed off the appeals filed by the assessee, the Stay Applications are dismissed as infructuous.
Order pronounced on this 24th day of May, 2018.
Sd/- Sd/-
(Chandra Poojari) (George George K.)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Cochin ; Dated : 24th May, 2018.
Devdas*
7 ITA No.459/Coch/2010 & Ors.
SA No.17, 18 & 19/Coch/2015
M/s.P.A.Kuriakose Jewellers.
Copy of the Order forwarded to :
1. The Appellant.
2. The Respondent.
3. The CIT(A)-I, Ernakulam.
4. The CIT, Ernakulam.
5. The DR, ITAT, Cochin.
6. Guard File.
By Order
Asst.Registrar/ITAT, Cochin