Income Tax Appellate Tribunal - Kolkata
Ved Saran Singh, Kolkata vs Department Of Income Tax on 13 January, 2012
आयकर अपीलीय अधीकरण, Ûयायपीठ - "ए ", कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH "A", KOLKATA
(सम¢)Before ौी महावीर िसंह, Ûयायीक सदःय, एवं/and
Shri Mahavir Singh, Judicial
Member.
ौी सी.
सी.डȣ.
डȣ.राव, लेखा सदःय
Shri C.D.Rao, Accountant Member
आयकर अपील संÉया /
IT(SS)A No.5/Kol/2010
िनधॉरण वषॅ/Block AYears 1987-88 to
19996-97 and 1997-98
-वनाम-
(अपीलाथȸ/APPELLANT ) - (ू×यथȸ/RESPONDENT)
Shri Ved Saran Singh, Kolkata Versus- D.C.I.T., Central Circle-
(PAN:AMGPS 9750 B) . XXVI, Kolkata
आयकर अपील संÉया /
IT(SS)A No.9/Kol/2010
िनधॉरण वषॅ/Block AYears 1987-88 to
19996-97 and 1997-98
-वनाम-
(अपीलाथȸ/APPELLANT ) - (ू×यथȸ/RESPONDENT)
D.C.I.T., Central Circle-XXVI, Kolkata Versus- Shri Ved Saran Singh,
. Kolkata
(PAN:AMGPS 9750 B)
अपीलाथȸ कȧ ओर से/ For the Appellant: Shri S.L.Kochar
ू×यथȸ कȧ ओर से/For the Department: Shri S.K.Roy
सुनवाई कȧ तारȣख/Date of Hearing : 13.01.2012.
घोषणा कȧ तारȣख/Date of Pronouncement : 13.01.2012.
आदे श/ORDER
(सी.
सी.डȣ.
डȣ.राव)
राव), लेखा सदःय
Per Shri C.D.Rao, AM
The above cross appeals one filed by assessee and the other filed by the revenue are against orders dated 21.06.2010 of the ld. CIT(A)-XXXVI, Kolkata pertaining to Block Asstt.years 1987-88 to 1997-98.
22. The assessee has taken the very first ground which is going to the root of the matter which is as under :-
"1. For that the ld. CIT(A) erred in upholding that assumption of jurisdiction u/s 158BD of the Income Tax Act, 196 by the Assessing Officer was correct and valid and in that view of the matter erred in dismissing grounds 1 to 9 & 23 taken by the appellant in his appeal to the ld. CIT(A)."
3. The brief facts of this case are that a search and seizure was conducted by the Income Tax Department u/s 132 of the IT Act on 17.01.1997 in Binay Prakash group of cases for the Block periods 01.04.1986 to 17.01.1997. During the course of search on Binay Prakash group of case the following books and documents were found and seized :-
Book/documents Found at Brief description
i) PCM-42 Residential premises of This is a loose bunch of Prithivi Singh at papers in page 16,17 & 18 Murabad,Ranchi. names of the 14 concerns (including M/s.Samrat Enterprises to whom coke was allotted for various districts were not found.
ii)PCM-43 -do- Loose bunch of papers (page
1 to 117).This is a sort of
Day book for the period
1.4.86 to 28.10.96 reflecting
flow in and flow out of cash
iii)PCM-45 -do- This is also a bunch of loose
pages where net of funds as
on 20.1.96 of 'Prakash' was
to be found. The concerns
include M/s.Samrat
Enterprises.
iv) KS-4 Combined office presmies of From pages 2 to page 7 coke
M/s.R.D.Enterprises & lifted from collieries by
M/s.Solar Smokeless Fuels various handling agents
of Qrt.NO.6 Arogya including to M/s.Samrat
Bhawan,Bariatu Rd.,Ranch. Enterprises and sold to
various persons were to be
found.
v)KS-29 -do- This is a computer print out
reflecting the consolidated
trial balance & balance-sheet
of Prakash Group as on
17.1.97 i.e. the date of
search. On page 6 of this
3
documents cash and bank
balances of M/s.Samrat
Enterprises were entered.
vi)KS-6 Residential premises of Sri `Loose bunch of papers page
Binay Prakash in the 1st floor no.1 to 35 relating to 12 of Prakash Kunj, Bariatu, concerns and their profit Booty Rd., Ranchi. calculation on sale of soft coke where inter alia profit earned by M/s.Samrat Enterprises.
From the assessment order on the basis of the above findings and documents Assessing Officer initiated proceedings u/s 158 BD of the IT Act as there was no search warrant in the name of assessee. The assessee raised objection as regards assumption by AO first before the AO and then this was challenged before the ld. CIT(A), who confirmed the assumption of jurisdiction by stating that the AO in the instant case on receipt of seized records was satisfied that the undisclosed income evidenced from the seized material and assumption of jurisdiction is valid as per law. Aggrieved, assessee challenged this issue before us.
4. We have heard both the sides and gone through the records. At the outset it is to mention that the AO in the case of search party i.e. Binay Prakash group of cases has categorically stated that no such satisfaction qua the provision of section 158BD is recorded by him and qua the letter dated 10.01.2012 was filed by the ld. CIT(DR). The relevant text of the letter reads as under :-
"OFFICE OF THE INCOME TAX OFFICER, WARD -- 37(2), KOLKATA, 18 RABINDRA SARANI, PODDER COURT, KOLKATA -700 001.
No. ITO, WD.-37(2)/Kol/ V-8085 1/201 1-12/ 453..-- 10th January, 2012, To Mr. Ved Saran Singh, 88, Amherst St, Kolkata -- 700 009.
Sir, Subject: Shri Ved Saran Singh, G.I.R.- V-8085 - Block Asst. Yrs. -- 1987-88 to 1997-98 -
Certified copy of Satisfaction Note - Issue of - Reg.
Ref. Your letter dated 05.05.2011.
Kindly refer to the above.
In connection with the issue of certified copy of Satisfaction Note, requested by you on 05.05.2011, with challan value of Rs.100/-(paid on 11.02.2011) on the basis of which proceedings U/s 158BC/158BD of the I.T. Act, 1961 for the Block period 01.04.0987 to 4 17.01.1997(Block Asst. Yrs. 1987-88 to 1997-98) was initiated, it may please be noted that there is no Satisfaction Note available in block assessment folders, received on transfer from Central Circ1e-XXIV, Kolkata. Hence, no certified copy of Satisfaction Note, as prayed for in your above letter can be issued by this office.
This is for your information.
Yours faithfully, Sd/-
(T.K.RAY) .
I.T.O., WARD -37(2)KOLKATA".
4.1. The ld. DR appearing on behalf of the revenue also filed copy of order sheet entry dated 29.10.1998 in the case of assessee and according to him assessee's AO has recorded satisfaction vide this order sheet entry. The relevant order entry reads as under :-
"29.10.98 A S&S operation was conducted in the Vinay Prakash group of cases in the course of which certain books of a/cs/documents were seized in respect of the 'a'. Notice u/s 158BC was issued No return filed. Issue notice u/s 142(1)."
4.2. We find from the above facts that AO of the assessee dated 10th January, 2012 vide No.ITO,WD-37(2)/Kol/V-8085-1/2011-12/652 has categorically stated that there is no satisfaction recorded by the AO of the searched by the AO in the searched assessee's case i.e. Binay Prakash group of cases. Even there is no satisfaction recorded in the case of assessee as claimed by the Revenue that the same was recorded by the Order sheet entry dated 29.10.1998 as reproduced above.
4.3. We find that Hon'ble Supreme Court in the case of Manish Maheshwari vs ACIT and Another 92007) 289 ITR 341 (SC) has laid down the principle that before the provisions of section 158BD of the Act are invoked against a person other than the person whose premises have been searched u/s 132 of the Act or documents and other assets have been requisitioned u/s 132A of the Act, the conditions precedent have to be satisfied. The Hon'ble Apex Court has also discussed the conditions precedent for invoking a block assessment, are that a search has been conducted u/s 132 of the Act, or documents or assets have been requisitioned u/s 132A of the Act. The provisions of block assessment would apply in the case of a person in respect of whom search has been carried out u/s 132A of the Act or documents or assets have been requisitioned u/s 132A of the Act. Hon'ble Supreme Court has discussed the provision of section 5 158BD of the Act and observed that for taking recourse of block assessment in terms of section 158BC of the Act in respect of any other person the conditions precedent wherefor are as under :-
(i) satisfaction must be recorded by the Assessing Officer that any undisclosed income belongs to any other person other than the person with respect to whom search was made u/s 132 of the Act.
(ii) The books of accounts or documents or assets seized or requisitioned has been handed over to the Assessing Officer having jurisdiction over such other person and
(iii) The Assessing Officer has to proceed u/s 158BC of the Act r.w.s. 158BD against such other person.
4.4. It was further held that no proceeding under s. 158BC had been initiated. There is, thus, a patent non-application of mind. A prescribed form had been utilized. Even the status of the assessee had not been specified. It had only been mentioned that the search was conducted in the month of November, 1995. No other information had been furnished. The provisions contained in Chapter XIV-B are drastic in nature. It has draconian consequences. Such a proceeding can be initiated, it would bear repetition to state, only if a raid is conducted. When the provisions are attracted, legal presumptions are raised against the assessee. The burden shifts on the assessee. Audited accounts for a period of ten years may have to be reopened. As the AO has not recorded his satisfaction, which is mandatory; nor has he transferred the case to the AO having jurisdiction over the matter.
4.5. Before Hon'ble Supreme Court the facts were that the premises of director of the company and his wife were searched u/s 132 of the Act and block assessment was to be done in relation to the company. Hon'ble Supreme Court held that Assessing Officer had to record his satisfaction that any undisclosed income belonged to the company and handed over the books of accounts and other documents and assets seized to the Assessing Officer for having jurisdiction against the company. Since no such satisfaction was recorded by the Assessing Officer of the searched person against 6 the company Hon'ble Supreme Court allowed the appeals of assessee. In this the present case are exactly similar to the one decided by the Hon'ble Apex Court, as the search was conducted u/s 132 of the Act in the case of Binay Prakash group of cases on 17.1.1997 and in view of the letter dated 10.01.2012 of the Assessing officer there is no satisfaction recorded by the Assessing Officer of the searched person. Since the issue is in favour of assessee we decide this jurisdictional issue in favour of the assessee and against the revenue.
5. Since we have decided the jurisdictional issue in favour of the assessee the other grounds raised by assessee as well as the revenue will be of academic interest and requires no adjudication.
6. In the result the appeal of the assessee is allowed and the revenue's appeal is dismissed.
आदे श खुले Ûयायालय मɅ सुनाया गया है तारȣख 13.01.2012.
Order pronounced in the open court on 13.01.2012.
Sd/- Sd/-
महावीर
महावीर िसंह, Ûयाियक सदःय सी.
सी.डȣ.
डȣ.राव,
राव, लेखा सदःय,
सदःय
Mahavir Singh, Judicial Member C.D.Rao, Accountant Member.
(तारȣख)
तारȣख)Date: 13.01.2012.
R.G.(.P.S.)
आदे श कȧ ूितिलǒप अमेǒषतः-
Copy of the order forwarded to:
1. Ved Saran Singh, C/o Manoj Gupta, FCA, 4, Gangadhar Babu Lane, 1st floor, Kolkata-700012.
2 The D.C.I.T.,Central Circle-XXIV, Kolkata
3. The CIT, 4. The CIT(A)-XXXVI, Kolkata.
5. DR, Kolkata Benches, Kolkata स×याǒपत ूित/True Copy, आदे शानुसार/ By order, Deputy /Asst. Registrar, ITAT, Kolkata Benches 7