TMI Blog2011 (9) TMI 132X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the A.O. has initiated the proceedings under sections 148/147 of the Act, which appears reasonable in the peculiar facts and circumstances of the case - Decided in favour of Revenue. - ITA No. 157 of 2008 - - - Dated:- 30-9-2011 - Devi Prasad Singh And Dr. Satish Chandra, J J . Petitioner Counsel : D. D. Chopra Judgment Dr. Satish Chandra, J. This appeal has been filed by the Department-appellant under section 260-A of the Income Tax Act against the judgment and order dated 31.03.2008 passed by the Income Tax Appellate Tribunal, Lucknow in I.T.A.No.334/Luc/2003 for the assessment year 1993-94. On 10.09.2008, a Division Bench of this Court had admitted the appeal on the following substantial questions of law:- 1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in upholding the order of the Commissioner of Income Tax (Appeals) and thus annulling the assessment order and directing the Assessing Officer to proceed u/s 158BD of the I.T.Act, 1961. 2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal erred in not properly ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the total unaccounted money pertaining to the entire sale of space in the building in question and made the addition of ₹ 42,58,142/-. Being aggrieved, the assessee has filed an appeal before the CIT (A), who vide order dated 14th March, 2003 observed that addition was made on the basis of information gathered at the time of search in the case of Shri Ashok Kumar, so the provision of Section 158BD of the Act is applicable in the case of assessee Company, and certainly not the provisions of section 148/147 of the Act, which were invoked by the A.O. Being unsatisfied, the Department-appellant has filed an appeal before the Tribunal, who vide its impugned order dated 31.03.2008 has confirmed the order of the CIT (A) and dismissed the appeal filed by the Department. Being aggrieved, the Department has knocked the door of this Court. With this backdrops, Shri D.D.Chopra, learned counsel for the appellant relied on the A.O.'s order. He submits that the assessee has received partly unaccounted money while selling the space in Shree Ram Tower. Such type of unaccounted money generally is known as 'on money'. He also submits that in the instant case, it is evident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k assessment proceedings under section 158 BC were not completed against Sri Ashok Kumar, the Assessing Officer of M/s Abhyudaya Builder (P) Ltd., (assesses) proceeded to initiate reassessment proceedings under section 147/148 and as rightly passed an order under section 147 of the Act. Lastly, he justified the impugned order passed by the Assessing Officer. On the other hand, Sri Amit Shukla, learned counsel for the respondent-assessee relied on impugned order passed by the Tribunal. He submits that assessee is a Company engaged in the business of constructions and sale of building. For the business activities so carried out, it has been regularly assessed to tax, mostly under section 143(3) of the Act. For the assessment under consideration (1993-94), the assessment was completed under section 143(3) on 27.03.1996 at an income of ₹ 2,66,080/- as against the loss of ₹ 3,91,500/- disclosed by the assessee in its return of income. He further submits that the Assessing Officer has reopened the case under section 147 by issuing notice under section 148 dated 30.03.1998 and completed the assessment at an income of ₹ 42,84,910/- after estimating the entire sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to be handed over by the Assessing Officer of Sri Ashok Kumar to the Assessing Officer of the assessee having jurisdiction upon it; and Lastly, the Assessing Officer of the assessee was bound to apply the provisions of Chapter XIVB, and proceed against it. According to him, it would be seen that the finding of the CIT(A) and Tribunal cannot be held to be erroneous in law in any manner even though more stringent provisions have been applied in the case of the assessee by the CIT(A) as well as by the ITAT as Chapter XIVB is applicable for six assessment years contained in the block period and rate of tax is also 60%. Wholly without prejudice to the submissions made above, it was submitted by the counsel of the assessee that if provisions of section 148/147 are held to be applicable, then the entire matter has to be remanded back to the file of CIT(A) to deal and decide the issue of validity of proceedings u/s 147 and also on merits of the addition based on the outcome of the finding and enquiry in the case of Sri Ashok Kumar especially of the Assessing Officer on the seized material relating to payment of On-money as per the direction given by the ITAT, as none ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation, speculation, suspicion; (ii) a nexus between such material and the belief of escapement of income from assessment in the circumstances outlined in clause (a) or (b); (iii) an application of mind by the Assessing Officer to such material; and (iv) an inference based on reason drawn tentatively by the officer that income has escaped assessment. The A.O. would be acting without jurisdiction if the reason for his believe that the conditions are satisfied does not exist, or is not material or relevant to the belief required by the section. The Court can always examine this aspect though the declaration or the sufficiency of the reasons for the belief cannot be investigated by the Court, as per the ratio laid down in the case of ITO vs. Purushottam Das Bangur (1997) 224 ITR 362 (SC). In the instant case, a search was conducted at the business and residential premises of one Sri Ashok Kumar, who had purchased office premise on the 3rd floor in the building of Shree Ram Tower from the assessee. The seize paper No.177A shows that Sri Ashok Kumar had made a total payment of ₹ 13,00,000/- to the Assessee Company, whereas the cost of the building as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated period for initiating the proceeding under section 158 BD has expired, so the income has escaped from the clutches of the tax.For this reason only, the A.O. has initiated the proceedings under sections 148/147 of the Act, which appears reasonable in the peculiar facts and circumstances of the case. Therefore, we uphold the order passed by the A.O. for the reasons mentioned above, especially when the section 158 BD is analogous to section 147 as per the ratio laid down in the case of Janki Exports International (supra). The answer to the substantial questions of law is in favour of the revenue department and against the assessee. However, in the instant case, the CIT(A) has annulled the assessment order passed by the A.O. Though he has affirmed on merit and the Tribunal endorsed it. Thus, the matter was not discussed on merits by the Tribunal. Therefore, we set aside the impugned order and restore the matter to the file of the Tribunal to decide the addition strictly on merit as per law expeditiously and preferably, say, within a period of three months after receipt of a certified copy of this order. Appeal is disposed of accordingly. - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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