9911796707
TMI Blog2014 (12) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... om the assessee during the course of search, no addition was made by the AO either in the hands of the assessee or in the hands of the respective parties to whom the cash of ₹ 2 crores relate - the assessment order cannot be set aside or revised for inadequate enquiry by the CIT u/s 263. These assessments are framed u/s 153A of the Act consequent to the search operation upon the assessees in which cash of ₹ 2 crores were found - While framing the assessments, questionnaires were issued with regard to the availability of cash and source and the same were duly replied by the assessees - according to the assessees, this cash belongs to certain other parties/concerns in whose cases assessments were also framed u/s 153C of the Act - it cannot be said that the AO has not applied his mind to the factum of seizure of cash during the course of search operation – CIT cannot invoke jurisdiction u/s 263 of the Act for setting aside the assessment order if he does not agree with the conclusion of the AO on a particular issue - since the factum of seizure of cash during the course of search operation was duly examined by the AO, invocation of provisions of section 263 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as wrongly inferred to be so, the order be annulled. 6. Because there being no separate notice u/s 263 of the Act as mandated by the statute and there being no independent satisfaction of the CIT (Central), the combined notice issued u/s 263 for all the assessment years i.e. A.Y. 2005-06 to 2010- 11 is without jurisdiction, void abinitio, bad in law and the order passed thereon being illegal be quashed. 7. Because none of the issues raised by the CIT (Central) in his notice u/s.263 dated 06.09.2013 relating to A.Y. 2005-06 to 2010-11 arising out of the assessment order passed by the AO, the very show cause notice is bad in law and the order passed u/s.263 be quashed. 8. Because the order passed u/s 263 of the Act, holding that the assessment orders for the A.Y. 2005-06 to 2011-12 (specially when there is no notice for A.Y. 2011-12) passed by the Assessing Officer to be set aside u/s 263 is bad in law be quashed. 9. Because the CIT (Central) has erred on facts and in law in holding that the Assessing Officer has failed to make necessary enquiries as would have been relevant for the purpose of assessment, and as such, has erred in setting aside the assessment framed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddressing to the Branch Managers of different banks. Consequent to search, the case of Shri. Mehtab Alam group was centralized under section 127 of the Act and thereafter notices under section 153A of the Act, dated 19.1.2012 were also served upon the assessees requiring them to file the return of income within 30 days. Consequently returns were filed and the assessments were framed. 5. The ld. Commissioner of Income-tax, Central Circle, Kanpur reexamined the assessment records and has noticed that the statement of Shri. Mehtab Alam recorded during the course of search operation was found untrue and incorrect in the light of explanations furnished by the assessee, Shri. Mehtab Alam and denomination of the currency found during the course of search. The ld. Commissioner of Income-tax accordingly formed a view that the Assessing Officer has not taken the following facts into consideration while completing the assessment under section 153A of the Act:- (1) Source of cash of ₹ 2 crores found and seized during the course of search. (2) Details of house property constructed in A.Y. 2005-06 and later years. (3) Details regarding house hold expenses. 6. He was also of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessees during the course of assessment proceedings. Since the assessment was made after obtaining approval from the Joint Commissioner of Income-tax (JCIT) in terms of provisions of section 153D of the Act, the ld. Commissioner of Income-tax has also set aside the approval granted by the JCIT under section 153D of the Act. 8. Aggrieved, the assessees have preferred appeals before the Tribunal with the submission that during the course of search, the statement of the assessee was recorded and in that statement the assessee has explained the source of availability of cash with the contentions that he was going to Kolkata to purchase raw hides. The ld. counsel for the assessee has invited our attention to the questionnaire issued by the Assessing Officer and the reply submitted by the assessee with respect to the availability of cash at the time of search operation at Choudhary Charan Singh Airport. 9. The copy of the questionnaire issued to the assessee, Smt. Nausheen Farah Lari dated 14.5.2012 is placed on record at Sl. No.312 to 313 of the compilation filed in the case of Smt. Nausheen Farah Lari, through which a specific query was raised with regard to the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act and once the JCIT has also applied his mind to the facts of the case, the assessment orders cannot be revised or set aside under section 263 of the Act. In support of this contention, he has placed reliance upon the judgment of the jurisdictional High Court in the case of CIT vs. Dr. Ashok Kumar in appeal No.192 of 2000; 163 of 2008; 413 of 2012 and 414 of 2012 vide order dated 6.9.2012 and in the case of Akil Gulamali Somji vs. ITO in I.T.A. No. 455 to 458 (Pune) vide order dated 30.3.2012. 12. It was also contended that the invocation of provisions of section 263 of the Act is also bad on account of issuance of joint show cause notice under section 263 of the Act. In support of this contention, the ld. counsel for the assessee has placed reliance upon the judgment of the Hon'ble jurisdictional High Court in the case of Mohd. Ayub vs. ITO, 346 ITR 30 (Alld), in which assessment was reopened by issuing a combined notice for four years and the Hon'ble High Court has held that notice under section 148 of the Act are to be issued for each year separately, therefore, the combined notice issued for all the four years, the reassessment is not valid. Besides, reliance was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor M/s Model Tanners (India) Pvt. Ltd., Jajmau, Kanpur, Unit-11, to AGM, Canara Bank, Overseas Branch, Civil Lines, Kanpur. 2. Letter written by the Partner M/s Model Exims, Jajmau, Kanpur to Canara Bank, Overseas Branch, Civil Lines, Kanpur. 3. Letter written by the Director M/s Model Echoes Pvt. Ltd., Jajmau, Kanpur to AGM, Canara Bank, Overseas Branch, Kanpur. 4. Letter written by the Prop. of M/s S.K. Enterprises, 95/26, Farrash Khana, Kanpur to the Manager, IDBI Bank, MG Road, Kanpur 5. Letter written by the Partner for M/s AI-Razeeq Traders, Jajmau, Road, Opp. Sultan Tanners, Kanpur to Branch Manager, IDBI Bank, MG Road, Kanpur. 16. Consequent to the search, the case of Shri. Mehtab Alam group was centralized. Thereafter notice under section 153A of the Act was issued and consequent thereto assessee filed reply enclosing therewith copy of the assessment order passed under section 143 of the Act with the submission that the return already filed may be treated as return in compliance to the notice under section 153A of the Act. Thereafter the Assessing Officer has issued a questionnaire to the assessee vide letter dated 14.5.2012 and through question No.22 a de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. -Do- Partner AL - Razeeq Traders Jajmau, Kanpur NIL That we draw the cash ₹ 70,00,0007- from your branch for the purpose of raw hides from Kolkata due to less price prevail in the market and cash carried by Mr. Mehtab Alam. In this letter a request made to issue a certificate for mentioned purpose You are required to explain the source of amount of ₹ 2 Crore found and seized from your possession with reference to the above 5 letters. The languages of these letters indicate that the mentioned amounts have been withdrawn from the respective banks on a particular date. Please explain on which particulars dates these amounts were withdrawn and from which bank account these amounts were withdrawn. Please submit your reply with all necessary documents and evidence. 17. This query was duly replied by the assessee vide his letter dated 16.11.2012, in which detailed reply with regard to the availability of cash and its source were explained. For the sake of reference, we extract this reply as under:- With reference to the assessment proceedings in the above mentioned case and in response to your query regarding source and acquis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sunday, it would not have been possible to enter into the transactions through bank. Moreover the transactions through bank is not feasible for the reason of time factor as well as the identity of the seller. Besides the assessee and his concerns do not have any purchase centre at Kolkatta. Unless and until raw hides are not inspected it is not possible make the deal go thru. That the assessee is interested, as a director and partner in Model Tanners, Model Echoes and Model Exims. Likewise his wife is also interested in the said concerns either as director and partners. M/s S.K. Enterprises and AL Razeek are separate concerns of different persons who supply raw hides to the assessee's concerns and also to other persons. The aforesaid amount was being carried by the assessee for purchase of raw hides from Calcutta. The assessee through above mentioned companies, is in the business of purchase of raw hides, tanning the same, manufacture of leather goods and export thereof. M/s. S.K. Enterprises and AL Razeek are commission agents who purchase raw hide from the market and supply the same to the above mentioned companies and as well as in the open market. The aforesaid amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces, it is prayed that the source and acquisition of cash of R.2 Crores found from the possession of the assesses and his wife is totally explained. The purposes/reasons for carrying such cash has also been explained above. The same is related and for the purposes of business. No part of the same belongs to the assessee or to his wife individually. We trust you will find above in order and do the needful. However, if your honour needs any further information in this respect, the same shall be furnished on hearing of the same. 18. Similarly, queries in this regard were also raised in the case of other assessee, Smt. Nausheen Farah Lari vide letter dated 14.5.2012 through query No.22. This query was again replied by the assessee, Smt. Nausheen Farah Lari vide her letter dated 16.11.2012. For the sake of reference, the letter written by the assessee, Smt. Nausheen Farah Lari is also extracted hereunder:- With reference to the assessment proceedings in the above mentioned case and in response to your query regarding source and acquisition of ₹ 2 Crores found from the possession of the assessee on 24.09.2010 at Chaudhari Charan Singh Airport, it is submitted as under fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he cash was claimed to relate, were thoroughly examined by the Assessing Officers in their respective hands by making detailed enquiries/investigations and once the Assessing Officer was convinced with the explanations with regard to the source of cash of ₹ 2 crores found from the assessee during the course of search, no addition was made by the Assessing Officer either in the hands of the assessee or in the hands of the respective parties to whom the cash of ₹ 2 crores relate. 21. It is also placed on record that the Assessing Officer has framed the assessment in the assessee s case after obtaining approval from the JCIT. Therefore, not only the Assessing Officer but the JCIT has also applied his mind to the factum of seizure of cash of ₹ 2 crores from the assessee during the course of search. Therefore, it cannot be said that the Assessing Officer has not applied his mind or has not properly made necessary enquiries with regard to the issue of recovery of cash of ₹ 2 crores during the course of search operation from the Choudhary Charan Singh Airport. 22. So far as the legal position is concerned, it is settled position of law that the assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Officer to re-examine the facts. 26. Again in the case of CIT vs. Max India Limited [2007] 295 ITR 282 (SC), their Lordships of the Hon'ble Apex Court have re-examined the scope of provisions of section 263 of the Act and has held that where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income-tax Officer is unsustainable in law. 27. Similar view was again reiterated by the Hon'ble Delhi High Court in the case of CIT vs. Sunbeam Auto Ltd., 332 ITR 167 (Del) and their Lordships have observed that for inadequate enquiry, the order of the Assessing Officer cannot be held to be erroneous. Their Lordships have examined the difference between lack of proper enquiry and inadequate enquiry and have held that there is a distinction between lack of enquiry and inadequate enquiry . If there was any inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has a different opinion in the matter. Such a cours ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to the revenue or if it is not erroneous but it is prejudicial to the revenue recourse cannot be had to section 263(1) of the Act. It is a pre-requisite that the Commissioner must give reasons to justify the exercise of suo motu revisional powers by him to reopen a concluded assessment. A bare reiteration by him that the order of the Income-tax Officer is erroneous insofar as it is prejudicial to the interest of the revenue, will not suffice. if a query is raised during the course of scrutiny by the Assessing Officer, which was answered to the satisfaction of the Assessing Officer, but neither the query nor the answer were reflected in the assessment order, this would not by itself lead to the conclusion that the order of the Assessing Officer called for interference and revision. In that case the assessee explained that the capital investment made by the partners, which had been called into question by the Commissioner, was duly reflected in the respective assessments of the partners who were income-tax assessees and the unsecured loan was duly reflected in the assessment order of the said creditor, which was also an assessee. Their Lordships in that case has held that provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention that combined show cause notice for initiating action under section 263 of the Act cannot be issued and if issued, the order consequent thereto is not valid in law, but in this judgment the jurisdictional High Court has dealt with the issue of common notice issued for reopening of assessment under section 147 of the Act. Undisputedly notice under section 148 of the Act was issued to assume jurisdiction to reframe assessment after reopening of assessment. Therefore, the controversy involved in this case is not covered by this judgment. However, an analogy can be drawn in favour of the assessee, but on merit we find force in the contention of the assessee. 34. Turning to the facts of the case, we find that these assessments are framed under section 153A of the Act consequent to the search operation upon the assessees in which cash of ₹ 2 crores were found. While framing the assessments, questionnaires were issued with regard to the availability of cash and source and the same were duly replied by the assessees. According to the assessees, this cash belongs to certain other parties/concerns in whose cases assessments were also framed under section 153C of the Act. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
