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Shivam Gramodyog Sanstan Versus Commissioner of Income Tax

2015 (10) TMI 1018 - ALLAHABAD HIGH COURT

Proceedings under Section 153C - Jurisdiction of assessing officer to initiate the proceedings under Section 147 read with Section 148 on the basis of the same material that was discovered during the search operation - whether in case of a valid search under Section 132 the assessment, if any, was only permissible under Section 153A or under Section 153C and that no assessment or reassessment was permissible under Section 147 read with Section 148? - Held that:- There were two sets of incriminat .....

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which were found at the assessee premises, pursuant to which proceeding under Section 153A of the Act was initiated, but was subsequently dropped on account of the fact that the warrant of authorisation was issued against a wrong person. The materials, so seized, at the appellant premises could be utilised for the purpose of assessment.

In Dr.Sarad B. Sahai and another vs. Commissioner of Income Tax and others [2010 (9) TMI 383 - ALLAHABAD HIGH COURT] held it is a settled principle .....

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n that once proceeding under Section 153C of the Act was dropped, proceeding under Section 147 could not be initiated, is patently erroneous. We find that proceeding under Section 153C was initiated on different set of documents and on separate satisfactory note recorded whereas the proceedings which were initiated against the assessee-appellant under Section 147 of the Act was based on different set of documents. - Income Tax Appeal No. 243 of 2015, Income Tax Appeal No. 244 of 2015, Income Tax .....

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nd residential premises of Sri Brij Mohan Pandey and his family members (hereinafter called the "Pandey Group"). This Pandey Group was engaged in the business of manufacture of Kattha and Khaini and was also in the business of trading of Kattha and Khaini and other raw materials used in the manufacture of Pan Masala. On the same day, a search was also conducted at the factory premises of the assessee-appellant at E-1, E-13, Site-1, UPSIDC Industrial Area, Rania, Kanpur Dehat. Incrimina .....

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A of the Act. During the course of the proceeding, the Income Tax authority found that the warrant of authorisation issued under Section 132 of the Act was in the name of "Shivam Gram Udyog Sansthan Pvt. Limited" and was not in the name of the appellant, namely, "M/s Shivam Gram Udyog Sansthan". Since the warrant of authorisation was issued in the name of a wrong entity, the Income Tax authority suo moto dropped the proceedings initiated under Section 153A of the Act. 4. On t .....

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iation of the proceeding under Section 153C of the Act, is as under: "A search & seizure operation u/s. 132 of I.T. Act, 1961 was carried out on 19.04.2006 at the business and residential premises of Shri Brij Mohan Pandey and his family members. This group (Pandey Group) is engaged in business of manufacturing/ production of Kaththa and Khaini and trading of Kaththa, Khaini and raw material used in manufacturing of Pan Masala. The assessee group also has a Petrol Pump in the name of Ya .....

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As per BK-17 BK-17 3 Sale Register of M/s Shivam Gramodyag Sansthan As per BK-18 BK-18 4 Khata of M/s Shivam Gramodyag Sansthan As per BK-19 BK-19 5 License issued by CMO in the name of Shivam Gramodyag Sansthan to Sri Shiv Badan Singh on 01.04.05. As per LP-2 LP-2 6 Bills of Shivam Gramodyag Sansthan As per LP-2 LP-2 In the case of M/s Shivam Gramodyag Sansthan, above details and books of accounts were found and seized during the course of search and seizure operation at premises No.53/12, Nay .....

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ase of assessee for A.Y. 2001-02 to 2006-07 and notice under Section 153C read with 153A is being issued for the verification and assessment of correct income of the assessee. 5. The proceeding under Section 153C of the Act was subsequently dropped by the assessing authority by an order dated 31.12.2008. The said order is extracted hereunder: "A search and seizure operation u/s 132 of the Income Tax Act, 1961 was conducted on 19.04.2006 in the residential and business premises of Pandey Gro .....

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e u/s.153C read with 153A was issued in the name of Shivam Gramodyog Sansthan. There exists no case in the name of M/s. Shivam Gramodyag Pvt.Ltd. No satisfaction can be recorded in the proceeding in the name of M/s Shivam Gramodyag Sansthan Pvt. Ltd. As such, action u/s.153C taken is not as per the law. With the approval of Addl. Commissioner of Income Tax, Central Range, Kanpur, the proceedings initiated U/S.153C are hereby dropped for A.Y.2001-02 to 2006-07. Proceedings u/s.143(3) for A.Y. 200 .....

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ns recorded by the assessing authority for reopening the proceeding under Section 147 of the Act is extracted here under: "REASONS FOR INITIATING PROCEEDINGS UNDER SECTION 147 OF INCOME TAX ACT, 1961 FOR THE A.Y. 2003-04 IN THE CASE OF M/s. SHIVAM GROMODYOG SANSTAHN, 53/6 NAYA GANJ, KANPUR. 09.03.2010 A Search and seizure operation u/s, 132 of the Income Tax Act, 1961 was conducted on 19.04.2006 in the residential and business premises of Pandey Group of cases. The search period for assessm .....

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in regular course for relevant assessment year, thus evading the payment of due taxes to the Government. The value of transactions as recorded in the diaries/documents, seized from the assessee premises during the course of search in the form of production, sales and stock prima facie is under relating to F.Y. 2002-03 [relevant to A.Y.2003-04]. Annexure name of the document. Page No. Nature of product Weight in Kg. Rate per Kg. Total Value (Rs.) A.Y.to which pertains BK-2 5 Kattha 18456 110/- 2 .....

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s in the seized documents are higher. Therefore, I have reason to believe that assessee's income which is more than ₹ 1,00 lac, has escaped assessment. The action u/s 147 is being taken with the approval of Learned Commissioner of Income Tax (Central), Kanpur to assess the income escaped from tax. The approval of Learned CIT (Central), Kanpur is received vide letter F. No. CIT(C)/ KNP/ approv/ u/s.148/ 09-10/2611 dated 05.03.2010. Accordingly, notice u/s.148 is being issued." 7. P .....

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pellate authority for a fresh decision. Thereafter the appellant filed an application under Section 254 of the Act for rectification of certain errors, which application was rejected. The appellant has thereafter filed the present appeal against the order dated 10.12.2014 by which the appeal of the revenue was allowed in part and the matter was remitted to the first appellate authority to decide the appeal on merits. 8. In this back drop we have heard Sri Abhinav Mehrotra, the learned counsel fo .....

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proceedings under Section 147 read with Section 148 of the Act, on the basis of the same material that was discovered during the search operation as this would amount to a change of opinion. 10. In support of his submission the learned counsel for the appellant has placed reliance upon a decision of this Court in Anand Prakash Agarwal vs. The Commissioner of Income Tax, Manu/UP/1962/ 2014= (2014)367 ITR 526 (Alld) and Chandra Prakash Agarwal vs. Assistant Commissioner of Income Tax and others, 2 .....

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t of the books of account or other documents or assessed or requisitioned under Section 132A of the Act, the assessment can only be made under Section 153C of the Act, i.e., under Chapter XIV-B and not under Chapter XIV of the Act. 12. It was thus contended that having regard to the scheme of various provisions of Chapter XIV-B of the Act the provisions of Chapter XIV of the Act are not attracted. The learned counsel contended that consequently proceeding cannot be initiated under Section 148 of .....

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but, we find that the submission cannot be accepted. The appellant is trying to confuse two issues in order to gain undue benefit which cannot be permitted. We find that there were two sets of incriminating documents seized against the appellant. One set of documents, so seized, were found at the appellant's premises and the other set of documents was found at the premises of Anurag Pandey. The materials found at the premises of Anurag Pandey were used to initiate proceedings under Section 1 .....

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