Delhi High Court
Pr. Commissioner Of Income Tax ... vs Panchmukhi Management Services Pvt. ... on 26 September, 2022
Author: Manmohan
Bench: Manmohan, Manmeet Pritam Singh Arora
$~4, 6 & 7
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA 319/2022
PR. COMMISSIONER OF INCOME
TAX (CENTRAL)-2 ..... Appellant
Through: Mr.Sanjay Kumar, Advocate with
Ms.Easha Kadian, Advocate.
versus
PANCHMUKHI MANAGEMENT
SERVICES PVT. LTD. ..... Respondent
Through: Mr. Salil Aggarwal, Sr. Advocate
with Mr. Madhur Aggarwal,
Advocate.
6
+ ITA 321/2022
PR. COMMISSIONER OF INCOME
TAX (CENTRAL)-2 ..... Appellant
Through: Mr.Sanjay Kumar, Advocate with
Ms.Easha Kadian, Advocate.
Versus
PANCHMUKHI MANAGEMENT
SERVICES PVT. LTD. ..... Respondent
Through: Mr. Salil Aggarwal, Sr. Advocate
with Mr. Madhur Aggarwal,
Advocate.
ITA 319/2022, ITA 321/2022 & ITA 326/2022 Page 1 of 7
Signature Not Verified
Digitally Signed By:JASWANT
SINGH RAWAT
Signing Date:27.09.2022
18:28:36
7
+ ITA 326/2022
PR. COMMISSIONER OF INCOME TAX
(CENTRAL)-2 ..... Appellant
Through: Mr. Sanjay Kumar, Sr. Standing
Counsel for Revenue with Ms. Easha
Kadian, Advocate.
versus
PANCHMUKHI MANAGEMENT SERVICES
PVT. LTD. ..... Respondent
Through: Mr. Salil Aggarwal, Sr. Advocate
with Mr. Madhur Aggarwal,
Advocate.
% Date of Decision: 26th September, 2022
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
JUDGMENT
MANMOHAN, J (Oral):
CM APPL. 39947/2022 in ITA 319/2022 CM APPL. 39949/2022 in ITA 321/2022 CM APPL. 40148/2022 in ITA 326/2022 Exemptions allowed, subject to all just exceptions. Accordingly, present applications stand disposed of.ITA 319/2022, ITA 321/2022 & ITA 326/2022 Page 2 of 7 Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:27.09.2022 18:28:36 ITA 319/2022 ITA 321/2022 ITA 326/2022
1. Present income tax appeals have been filed challenging the common order dated 28th February, 2022, passed by the Income Tax Appellate Tribunal ('ITAT') in ITA No.767/Del/2018 for the Assessment Year 2011- 12 ITA 768/Del./2018 for the Assessment Year 2012-13 and ITA 766/Del./2018 for the Assessment Year 2010-11 deleting the protective additions made in the hands of the respondent-assessee.
2. Learned counsel for the appellant states that the ITAT has erred in holding that no incriminating material was found in the search, whereas the original copies of share certificates pertaining to share capital and premium allotted to investor companies were found at the premises of issuing company itself instead of investor company's premises evidencing, that, the investor companies were bogus/accommodation entry providing entities.
3. He emphasises that in the present cases, there is a live link between the additions in question and the incriminating material.
4. Per contra, learned senior counsel for the Respondent, who appears on advance notice, states that in the present case the alleged incriminating materials do not pertain to the assessment years in question. In support of his contention, he relies on the satisfaction note dated 29th January, 2016 which reads as under:-
"Satisfaction Note for issue of notice u/s 153C of the Income Tax Act. Name of the assessee: M/s. Panchmukhi Management Services Pvt. Ltd. A.Y : 2008-09 TO 2013-14.
PAN : AADCP7635E.
Search and seizure action u/s 132 of the Income Tax Act was carried out on 20.09.2013 in the case of Mind Group of cases for A.Ys, 2008-09 to 2013-14 ITA 319/2022, ITA 321/2022 & ITA 326/2022 Page 3 of 7 Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:27.09.2022 18:28:36 under Section 153A/143(3). The material seized from the premises of the assessee has been examined by the undersigned being the jurisdictional Assessing Officer. After examining such seized material I am satisfied that the following seized documents belong to persons other than Minda Group of cases. The details of such papers are as under:-
Party Page No. Brief description Person to F.Y. No./Annexure of of documents. whom the involved.
No./ Seized Annexure Documents
from: belongs.
O-2/A-4, JAY 28 to 34 Annual Report M/s. 2011-12
USHIN LTD. of Panchmukhi
GP-14, Sector M/s.Panchmukhi Management
18, Gurgaon Management Services Pvt.
Services Pvt. Ltd. Ltd.
as on 31.3.2012
O-2/A-4, JAY 35 Details of M/s. 2012-13
USHIN LTD. amount invested Panchmukhi
GP-14, Sector by M/s. Management
18, Gurgaon. Panchmukhi Services Pvt.
Management Ltd.
Services Pvt. Ltd.
as on 1.01.2013.
O-2/A-4, JAY 70-71 Extract of annual M/s.
USHIN LTD. return of M/s. Panchmukhi
GP-14, Sector Panchmukhi Management
18, Gurgaon Management Services Pvt.
Services Pvt. Ltd. Ltd.
(period not
known)
K4/PMEC 3 1-75 Bank account M/s. 2007-08
Rajesh Shiv & details from Panchmukhi
Associates, M/s. 1.04.2005 to Management
Panchmukhi 31.03.2008 Services Pvt.
Management Ltd.
Services Pvt.
Ltd., M/s
ITA 319/2022, ITA 321/2022 & ITA 326/2022 Page 4 of 7
Signature Not Verified
Digitally Signed By:JASWANT
SINGH RAWAT
Signing Date:27.09.2022
18:28:36
Electricals &
electronics (I)
Ltd., M/s.
Manish
Merchants Pvt..
Ltd., M.s
Consortium
Vyapaar Pvt.
Ltd., Business
Communication
Centre, 21 Parsi
Charch Street,
Opp.18 Erza
Street, Kolkata-
12
O-2/A-11, JAY 47, 48, 51 Original Share M/s. 2009-10.
USHIN LTD. to 57, 60, certificates dated Panchmukhi
GP-14, Sector 61, 63 to 9.01.2010 were Management
18, Gurgaon. 72. transferred to Services Pvt.
M/s. Ltd.
Panchmukhi
Manage-ment
Services Pvt. Ltd.
9.02.2010
I have examined the above mentioned documents/papers and as the undersigned is the jurisdictional assessing officer for Minda Group of search cases (DOS: 20.09.2013), I am satisfied that the provisions of section 153C are invoke able in this case for A.Y.2008-09 to 2013-14. Accordingly this information is being passed to the jurisdictional AO of M/s. Panchmukhi Management Services Pvt. Ltd. For taking necessary action under Section 153C for A.Y.2008-09 to 2013-14. This satisfaction note is placed in the file for record purposes.
Sd/-
ACIT-CC-13, New Delhi.
Dated: 29.01.2016."ITA 319/2022, ITA 321/2022 & ITA 326/2022 Page 5 of 7 Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:27.09.2022 18:28:36
5. He also states that the genuineness of the share capital has been accepted in the case of JP Minda Group of Companies by the ITAT.
6. A perusal of the paper book reveals that in the present case a satisfaction note was drawn up under Section 153C of the Income Tax Act, 1961, (the 'Act') on 29th January, 2016. Consequently, the search year would be the Assessment Year 2016-17 and Revenue would be entitled to re-open the returns for the Assessment Years 2010-11 to 2015-16.
7. Perusal of the satisfaction note reveals that no document pertaining to Assessment Year 2011-12 was seized during search. The Supreme Court in Commissioner of Income Tax-III, Pune Vs. Sinhgad Technical Education Society reported in [2017] 397 ITR 344 has held that seized material can be considered to be incriminating in terms of Section 153C of the Act only if the said material pertains to the Assesssment Years in question.
8. With respect to Assessment Years 2010-11 & 2012-13, this Court is of the view that the recovery of the annual report and the share certificate of the Petitioner from premises of Minda Group cannot be considered to be incriminating documents. After all, the Minda Group was not a third party but the issuing authority of the share certificates. In fact, both the appellate authorities below have given a concurrent finding that no incriminating material had been brought on record by the Assessing Officer to sustain the additions on merit. Also, the genuineness of the share capital has been accepted both by CIT (A) and ITAT and also there is no live link between seized material and the additions made. Therefore, this Court is of the view that assumption of jurisdiction in the present cases by the Assessing Officer was erroneous.
ITA 319/2022, ITA 321/2022 & ITA 326/2022 Page 6 of 7 Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:27.09.2022 18:28:369. Further, today, this Court by a separate order in a batch of appeals being ITA Nos.360-368/2022 has upheld the order of the ITAT deleting the substantive additions on merits made in different concerns of JP Minda Group. Consequently, the issue of protective addition in the hand of the respondent-assessee does not arise.
10. Accordingly, this Court is of the view that no substantial question of law arises for consideration in the present appeals and the same are dismissed.
MANMOHAN, J MANMEET PRITAM SINGH ARORA, J SEPTEMBER 26, 2022 KA ITA 319/2022, ITA 321/2022 & ITA 326/2022 Page 7 of 7 Signature Not Verified Digitally Signed By:JASWANT SINGH RAWAT Signing Date:27.09.2022 18:28:36