TMI Blog2023 (4) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... -Switzerland, DTAA. Since the reference been made after 1st July 2012, the amended extension period of 12 months will be applicable in the present case. Memorandum explaining the changes in the Income Tax Act vide Finance Bill 2012 stated that the time period to be excluded would start from the date on which the process of getting information is initiated by making an reference by the Competent Authority in India to the foreign tax authorities and end with the date on which information is received by the Commissioner. In the present case since the reference was made on 21-02-2013 by the Competent Authority, the extended 12 months period expires on 20- 02-2014. But the normal time barring period for completion of assessment order is on 31-03-2014. Thus there is 38 days time available from 21-02-2013 to 31-03- 2014. Since the regular time limit of 38 days available with the AO, as per the above proviso, 60 days namely further time of 22 days, that is upto 22-04- 2014 is available to the AO for completion of the assessment order. However the Ld Assessing Officer completed the assessment order on 17-02-2015 which is clearly barred by limitation. Both the AO and Ld CIT DR could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly for roving inquiry. Unauthenticated and uncorroborated sheets of papers should not be considered as evidence, whether primary or secondary and therefore addition made by the Ld AO on such document is liable to be deleted. Ground raised by the Revenue namely deletion of addition made on account of deposit/ investments in HSBC Geneva bank account are devoid of merits and the same is liable to be dismissed. Processing of returns of income filed by the assessee as made by the Assessing Officer under section 143(1) could not be regarded as assessment and it is, therefore, not a case where the assessments for both the years under consideration could be said to have been completed - Special Bench, Mumbai in the case of All Cargo Global Logistics Ltd. ( 2012 (7) TMI 222 - ITAT MUMBAI(SB)] wherein it was held that in a case or in a circumstances where the proceedings have reached finality, assessment under section 143(3) read with section 153(3) has to be made as was originally made and in a case certain incriminating documents were found indicating undisclosed income, then addition shall only be restricted to those documents/incriminating material. Additions as finally made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der was passed on 09.09.2011 for the cupboard in the bedroom of Mr. Jay R. Patel [son of the assessee]. The said Prohibitory order was revoked on 15.09.2011 and continued with Search action, again nothing incriminatory documents were found to give rise to disclosure of undisclosed income. However, the Investigation Officer on 15.09.2011 showing the unauthenticated paper in his possession i.e. the code profile client from foreign bank (Which was not even found from assesse's possession) vide Qn. 4 5 as follows: Q.No.4: I am showing you code profile client 5095020378, which contains three different pages. Please explain what you want to say on this. Ans : At this moment this thing is not in my memory and we shall inquire about this. However, keeping in mind whatever is unrecorded transactions or investments, of our family members, groups and business concerns, companies etc., or if there is any errors and omissions of the accounts, or if any information of unrecorded investments is gathered or may be gathered, from any other agency or medium, we have made total voluntary disclosure of Rs 39.60 crores on adhoc basis on behalf of family members, group concerns and compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne year from the end of 31-03-2014 shall get extended upto 31-03-2015 and therefore the notices issued are valid in law. 2.3. During the assessment proceedings again a statement u/s.131[1A] was recorded on 22-11-2013 from the assessee as follows: 11. Have you opened' any bank account with HSBC Geneva, either directly or through any of your agents or relatives? Ans:- No Sir, to the best of my knowledge and belief and based on my memory, 1 state that, we do not have account with HSBC Geneva. 12. As per information available with the department, you are having bank account jointly with Rashmikant Bhalodia and Rajnikant Bhalodia (your cousin brothers) with HSBC Geneva. Please affirm whether you are having any such foreign account(s) or not. Ans:- No Sir, as far as I remember and to the best of my knowledge and belief, I have not opened such bank account. 13. I am showing you certain information available with the department, as per which you are having foreign bank account jointly with your above mentioned cousin brothers, the details of which are as under:- User customer code:- 5095020378 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation that the assessee was holding and maintaining foreign bank account with client profile was created on 15-02-2005 along with the two persons namely Rashmikant V Bhalodia and Rajnikant M Bhalodia. Further based on the admission of Rs.39.6 crores by the assessee during the recording of statement under section 132[4] of the Act and the news report appearing in Indian express dated 09th February 2015 wherein details of independent investigation carried out by Washington-based International Consortium of Investigative Journalist [ICIJ] and the Paris based Le Monde News paper. The name of the assessee, as per the said report, is appearing at SR number 19 with balance of USD 69,08,661/= as the balance as on 11/2006. Though the assessee filed the retraction statement by sworn affidavit dated 21-03-2014 which is 29 months after making the first admission of unaccounted income, the same was rejected following various judicial decisions. Since the maximum amount invested is US 59, 56,197.30, wherein the exchange rate as on March 2006 was Rs.44.21 for one US Dollar. Therefore the investment in Indian rupees works out to Rs.26,33,23,482/= which is treated as unexplained investment and tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment order in respect of any seized material. Had there been any material of incriminating nature, AO would have referred to it in the assessment order. Thus, it is abundantly clear that nothing was found in respect of HSBC Bank account during search and addition has been made without the backing of any incriminating material in connection with such alleged unexplained investments. 5.13 The second limb to this argument is that, whether voluntary disclosure of income made during search at the time of recording statement u/s 132(4) on revocation of PO in search constitute incriminating material? 5.14 In this regard, the AR of the assessee vehemently argued that since during the search, no incriminating material was found, AO could not have deviated from already assessed income u/s 143(1) on 05.12.2006 in view of the fact that such assessment had attained finality. Therefore, he has no jurisdiction to make any addition without establishing link with incriminating material found in search, if any. Since this is missing in this case, the AO could not have made any variation in the income already assessed u/s. 143(1). 5.15 It is worth to mention in the case that no incriminat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the CIT(Central) in regard to the purported account. This is so even after the passage of more than eight years since the date of reference made by the Commissioner of Income tax (Central)-II Ahmedabad on 01.01.2013 to the JS(FT TR-1) Division of the CBDT under DTAA 5.20, The AO has heavily relied on the so called base document in coming to the conclusion that the appellant has a Off Shore Account with HSBC Bank Geneva and that the amount of Rs.39.60 Crores was invested by the appellant in the said purported bank account with HSBC Bank Geneva. The so called base document does not contain anything which says that the same indicated the ownership of the appellant in the HSBC Bank, Geneva. It is important that the base document is the photocopy of pieces of paper which, though according the AO is a Base document which suggests that the appellant is the owner of a Off Shore Account with HSBC Bank Geneva, is nothing except pieces of paper which mentions the name and certain personal details of the appellant. The papers relied by the AO do not contain any reference to the source from which it is found/received, it is unauthenticated and unverifiable and it is needless to add t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearly. Thus, on these observations, the AO alleged that the assessee is having foreign bank account. However, on confrontation of the above information to assessee on different occasions, he denied having any such foreign bank account and reiterated the absence of any authentic information 5.25 Before me the AR of the assessee submitted that the document relied upon by the AO is not an evidence much less admissible evidence in view of the fact that data shown is not in original but photocopies, which were not authenticated and did not have any signature of the banking authority nor is it on letter-head He also emphasized that appearance of some personal details of the appellant on the photostat copy does not validate the information. The personal details are easily available from known sources and therefore, such details do not better the case of the AO in any manner. He also submitted that had the information been authentic and concrete, no necessity would have arisen to collect the same again from FT TR Division. The burden of proof for proving the connection of the alleged foreign bank account with the assessee was upon the AO and not on the appellant. Therefore, where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al capacity or family members or group concerns, he is making admission of unaccounted income to the tune of Rs 39.60 crores. 5.27 It has been noticed that the appellant in the statement u/s 132(4) recorded on 15.09.2011 vide answer to Q.No.4 has surrendered the undisclosed income at Rs.39.60 Crores in the hands of family members, group concerns and companies etc. for the omissions, errors or any other unrecorded transactions. In the said surrender he has not specified the assessment year to which the said surrender pertained and the name of assessees in whose hands the said surrender pertained. Even the authorised officer while recording the statement of appellant has not asked for the specific details of the assessment year and the persons in whose hands the aforesaid surrender of undisclosed income has been made. In view of the above facts, the surrender of undisclosed income could not be said to be pertaining in relation to A.Y 2006-07 2007-08. Thus, the AO cannot take cognizance of such surrender of undisclosed income for making the addition in A.Y.2006-07 2007-08. 5.28 The assessee on the other hand contends that, the said disclosure of income was not linked with or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be termed as evidence, therefore, the subsequent stand of the appellant of having retracted the admission, stands vindicated. I find substantial force in the argument of the assessee that there cannot be any admission of unaccounted income, in the absence of any incriminating material. The decisions relied upon by the AO are on different facts and are distinguishable. 5.31 In light of the above, in my opinion it is clear that (a) the appellant had made admission of unaccounted income with a rider that this is subject to any incriminating material being found from him or his family or group concerns; (b) that the appellant had vehemently denied having any knowledge of alleged foreign bank account; (c) that the parallel drawn by the AO that the disclosure of unaccounted income and the value of investment as per the information available with her being almost same, it is clear that the appellant had admitted out of such unaccounted bank account only, is only a surmise, which is not backed by any legal document, (d) the retraction seems to be justified in the absence of any incriminating material and (e) nowhere the appellant had stated that the disclosure is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be independently used for making any addition in the hands of the assessee and the said statement cannot be the sole basis for making any addition and must be independently corroborated by evidence. 5.34 The reliance have also been placed on various decision/judgment whereby the Hon'ble Courts have upheld the similar ratio. Some of them are as under. Jurisdictional High Court in the case of Pr. CIT vs. Saumya Construction Pvt. Ltd. in 387 ITR 529 (Guj), has held that no addition can be made unless the incriminating material is found during the course of search when the assessment is not abated. The gist of the judgment is reproduced hereunder- Under section 153A of the Act, an assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 1534 of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following Kailashben Manharlal Chokshi v. CIT [2010] 328 ITR 411/[2008] 174 Taxman 466 (Guj.) (Para 6). 5.47 I have considered the material on record and various case Laws relied upon by the appellant and legal precedents laid down by the jurisdictional High Court and other High Courts as also by several Benches of the Hon'ble ITAT. The crux of the finding is that, Clause (a) of sub-section (1) of section 153A mandates the AO to issue notice in respect of the preceding six assessment years. Clause (b) mandates the AO to assess or reassess the income in respect of these years. A combined reading of both the provisions indicates that where a pending assessment has abated, the total income will comprise of the normal income on the basis of returned income plus the income escaping assessment on the basis of seized material found in the course of search. Where the assessment has reached finality and hence not abated, the income under section 153A shall be determined on the basis of the material found in search. In any case, the income to be determined u/s. 153A has to be on the basis of material found in the course of search. If no incriminating material is found in the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Pr. CIT vs. Saumya Construction Pvt. Ltd. 387 ITR 529 and other decisions/judgments cited above, addition cannot be roped in the assessment u/s 153A particularly when it has not abated. This decision of jurisdictional High Court is binding and one acting under the same jurisdiction as a subordinate authority, is bound to follow the decision rendered by highest Court of the state. 5.50 Further my above view on legal aspect is also in consonance with the principle laid down by Hon'ble Gujarat High Court and various courts. Under the circumstances, the addition based on the alleged incriminating document, cannot be made in the assessment order passed u/s 153A if such document was not found in the possession of the assessee during the course of search operation. In view of the above discussion, as also after considering the relevant judicial pronouncements, the addition of unexplained deposits/investment in foreign bank account made by the AO cannot survive and hence deleted. Thus, this additional ground of appeal is allowed. Decision on Additional Ground of appeal in A.Y.2007-08 Since the above additional ground of appeal is also invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions was made effective from 01.07.2012 and according to the amended provisions the time limit for completion of assessment was extended by excluding the period upto the date of receipt of such information or one year whichever is less. So appellant has submitted that the amended provisions which were effective from 01.07.2012 were not applicable on the facts of the case as search action in its case was taken place on 08.09.2011 and even notice for filing of return of income u/s 153A was issued on 12.06.2012. In other words, the amended provisions were applicable to such cases where search action has been initiated on or after 01.07.2012 which is not the case of the assessee. Thus according to the appellant the extended time limit for completion of assessment was 31.03.2014 while the assessment has been completed on 17.02.2015. Thus as per appellant the assessment completed was time barred. I have considered the submissions filed by the assessee as also the arguments of the AR in respect of time limit to pass such order contained in section 153B of the Act. The assessee relies on the fact that the information in possession of the department is not certified or authent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e available to the AO for completion of assessment 6.16 The above situation is once again reiterated as under - Financial Year 2005-06 -Assessment Year 2006-07 -Return of income under section 153 A: 18.10.2013 -Date of Reference to Competent Authority: 21.02.2013 -Period of extension from the date of reference (Six Months) to end on 20.08.2013 - Due Date of completion of assessment: 31 March 2014. - Time available after the date of extension from 21.08.2013 to 31.03.2014 = 212 days In such a case the assessment order was to be passed by 31 March 2014 as the period available after the period of extension from the date of reference to competent authority is 212 days in view of proviso to Explanation of Section of 153 B of IT Act. However, in the instant case the assessment was completed on 17th February, 2015 which was beyond t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority was less than 60 days and hence in view of proviso to Explanation 153 B of IT Act the AO would have the 60 days time to complete the assessment which expired on 22.04.2014. In this case also the assessment completed on 15.02.2015 is far later than the limitation date of 22.04.2014. 6.19 To summarise the issue, it is noticed that as per Explanation (viii) to section 153B, the period to be excluded begins from the date of reference made, till the date of Six Months (or one year as per AO) or the receipt of the information whichever is earlier. Since, in the instant case on reference no information has been received from foreign authorities even till date, therefore the maximum available time would be six months (or one year as per AO). Accordingly if the above period of reference is excluded, then the following picture emerges: 1. If period of six months is considered then the period to be excluded would be from 21.02.2013 and till 20.08.2013. Thus period of 212 days were available (from 21.08.2013 to 31.03.2014). As per the proviso to the explanation (viii) to section 153 B which states that if the period available to the AO is less than 60 days for the purpose of limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... normal time barring date as per Section 153 B(a) or (b) of IT Act. Similarly, if the exclusion period of six months is counted from the date of limitation of assessment i.e. 31.03.2014 then also the limitation expires on 30.09.2014 while the assessment in the case has been completed on 17.02.2015 which is much beyond the limitation date hence, assessment became barred by limitation Moreover, the proviso to explanation of Section 153 B for availability of 60 more days' time for completing the assessment would become infructuous and redundant as under no circumstances the period of sixty days mentioned in the said proviso would become applicable due to availability of extended period of six months from the normal time barring date as per Section 153 B(a) or (b) of IT Act. Thus, the working/counting of the limitation date for exclusion period (six months or one year) in view of Explanation (vii) of Section 153 B from the time barring date i.e. 31.03.2014 is not in consonance with the provisions of law as in that case the proviso to Explanation would become redundant / non workable and thus the same would not be in accordance with the provisions of law as intended by the legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60 days, if after excluding the time mentioned in the Explanation, the time for completing the assessment is less than 60 days. In terms of the said proviso, the Assessing Officer had the extended period to complete the assessment proceedings. The Assessing Officer had to complete the assessment within 60 days from the date on which the special audit report was to be submitted to him. In view of the above discussion, there had been the breach of the period of limitation while passing the assessment order as the assessment has not been completed within the statutory time limit i.e. upto 31.03.2014 but completed on 17.02.2015 which was much later to the statutory time limits u/s. 153 of IT Act. Thus, the assessment is quashed. 4. Aggrieved against the common Appellate orders, the Revenue are in Appeal before us raising the following Grounds of Appeals: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that any addition during the assessment u/s.153A has to be confined to the incriminating material found during the course of search u/s. 132(1) of the Act, even though, there is no such stipulation in sec.153A of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee during the course of search. 7. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has not following the proposition of law laid down in the Finance Act, 2012. 8. On the facts and in the circumstances of the case and in law, the ld. CIT(A) ought to have upheld the order of the A.O. 9. It is, therefore, prayed that the order of the ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 5. Assessee has filed Cross Objections as against the Revenue Appeals before us raising the following Grounds of Appeals: 1. The grounds of appeal mentioned hereunder are without prejudice to one another. 2. The Id. Commissioner of Income Tax (Appeals)-11, Ahmedabad [hereinafter referred to as the CIT(A) ] erred on facts as also in law in not deciding the ground of appeal related to initiation of the proceedings and validity of notice issued u/s.153A of the Income-tax, 1961 [hereinafter referred as to the Act ]. The notice issued u/s 153A of the Act is bad in law and without jurisdiction and therefore the same may kindly be quashed. 3. The Ld. CIT(A) erred on facts as also in law in not deciding on merit, the ground of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We have carefully considered the submissions of the rival parties and granted time to the Ld DR to submit his written arguments within 15 days of the conclusion of the hearings of the appeals. Since the question of getting the details of foreign bank account from CBDT/Investigation Wing after a period of 10 years is not justifiable. Further the Administrative Commissioner namely PCIT, Central has filed the present appeals for the Revenue, it is the very same office who had sought for information from the Under Secretary [FT TR-III][2] and no information received before completion of assessment by the assessing officer. It is further stated in the Written/Reply Arguments that the assessee gathered information after inspecting the departmental records that the Ld CIT[A], Ahmedabad before finalizing the appellate orders, had once again called for a report from the AO, as to whether any information was received from the CBDT [FT TR], post assessment order. Since the reply of the AO was not in affirmative, the Ld CIT[A] proceeded to finalize the appeals. Therefore the Ld CIT DR s request is reject and however directed to submit his Written Arguments within 15 days of completion of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee when confronted with the details of Bank-deposit in HSBC, Geneva and other corroborating and circumstances indicating that the amount held by assessee has not been disclosed in the Return of Income for AY 2006-07 and AY 2007- 08, added the amount of deposits (converted into Indian rupees), the ld. AO added the undisclosed amount to taxable income of the assessee, in respective years. 8. Ld. CIT (A) deleted the addition on technical/legal grounds without going into the merits of the case, quashing the assessment order for breach of time limits, and also, holding that no incriminating documents were found/seized during the course of Search and seizure action. 9. The Department is in appeal before Hon ble ITAT on multiple grounds of appeal. Hearing on 02.02.2023: 10. The CIT-DR invited the attention of Hon. ITAT on the applicability of the provisions of Evidence Act on the admission by the assessee, in response to the specific querry confronting documents pertaining to the investment in the Foreign HSBC-Geneva bank accounts held by the assessee. a. Applicability of provisions of evidence Act proceedings under the I.T.Act: In the case of Chuh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etracted his disclosure. (the affidavit is not on record and is Hon. ITAT may require the assessee to provide a copy of Affidavit filed before AO). Thereafter arguments were made on perjury and that perjury, even by filing an affidavit has been held as contempt of court in various decision of Hon ble Supreme Court: a. Perjury: The simple definition of perjury is giving/ furnishing/ submitting intentionally false evidence by the person when he is bound by law to state the truth or give/submit/furnish true evidence in the Court of Law. In addition to the offense of perjury, when if false evidence or oral testimony is submitted in the Court proceedings under oath, the contempt of Court is also committed. The definition of Criminal contempt of Contempt within the meaning of section 2 of the Contempt of the Court Act 1971, includes the doing of any act which interferes with obstructs or tends to obstruct the administration of justice in any manner . Making of false statement of oath may interfere with the admission of justice and may thus amount to contempt of Court. The offence of perjury, done by stating false testimony or furnishing false evidence by a person or oa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said in Richard III about perjury; the relevant stanza runs as under: My conscience hath a thousand several tongues, And every tongue brings in a several tale, and ever tale condemns me for a villain. Perjury, Perjury in the highest degree; Murther, in the direst degree; All several sins, all us'd in each degree. throng to the bar, crying all Guilty, guilty!. The following anguish expressed by the Hon'ble Supreme Court in Swarna Singh vs. State of Punjab (2000) 5 SCC 668 about rampant perjury in courts merit a mention: Perjury has also become a way of life in the Law Courts. A trial Judge knows that the witness is telling a lie and is going back on his previous statement, yet he does not wish to punish him or even file a complaint against him... .act of perjury is treated as a heinous offence in all civilized societies; consideration of complaints with regard to the same cannot be deferred or delayed; otherwise there is all possibility of the fountain of justice being polluted. In the case of Sejalben Tejasbhai Chovatia vs. State of Gujarat (Special Criminal Application) (Quashing) 7666 of 2016 the Hon ble High court has Gujarat has ruled similarly. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from case like Saumya Construction (Gujarat HC); Kabul Chawla (Delhi HC) by pointing out that that the assessment order has a direct connection with the findings of Search and seizure action. The view taken by ld. CIT (A) is a very narrow view, wherein he has harped on the requirement of document found or seized during the Search and Seizure proceedings. However, the intent of judicial interpretation has been to see a perceptible link between the Search and Seizure proceedings and the additions in assessment order. In this case the link is established by the admission in the statement, the confrontation of the information available with the department to the assessee leading to voluntary disclosure by the assessee of Rs. 39.60 Crores. It was further argued that the disclosure is not 1 Crores or 100 Crores, or even a round figure. A disclosure like 39.60 is a well thought of figure. The disclosure vide letter to Additional Director; and in response to the confrontation of an information about the foreign bank deposit of the assessee, is a material fact and is directly borne out of search and seizure proceedings , unlike the cited cases by ld. AR and the cases relied upon by Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT has been pleased to provide only 15 days. It is humbly submitted that this is a case filed in the year 2021 and there appears no basis to hurry up the proceedings in department s appeal and brush aside the request by the CIT DR that time is needed to collect information and also to rebut the arguments by the Ld. AR. In the meantime, I have discussed these matters with officers in CBDT and have reliably learnt that the information regarding holding of investment by the assessee in the foreign banks (which were found to be not disclosed) were received through Government channels. Thus there remains no doubt on the authenticity of the documents based on which Search and Seizure actions were carried out and the assessee was confronted. I am trying to obtain a confirmation in this regard from CBDT/Investigation Wing. Since the matter is quite old, I humbly request you to provide a time of atleast 60 days, and also consider extension if circumstances so require and permit revenue to submit the factual details of chain of custody of information regarding foreign investment holding of the assessee. It is also requested to not to treat this case as heard and provide sufficient t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR) to revisit the work done by a senior officer of the same rank. 6. In light of the above, the Respondent proceeds to furnish para wise comments on the report / finding of the Ld. CIT(DR), as under. Para 1 (under the heading Brief facts of the case) 1. As per this para, the ld. CIT(DR) has held that, information was available with the income tax department about foreign bank account held by Shri Rajeshkumar G Patel in HSBC Geneva when an action of search and seizure u/s. 132 of the I T Act was conducted in the premises of the assessee on 8.9.2011. Reply 1.1 No comments. However, the Respondent desires the Hon. Members to take note of the fact that, only information was available with the department and not any evidence, much less incriminating evidence. Para 2 (under the heading Brief facts of the case) Reply 2. No comments. Para 3 (under the heading Brief facts of the case) As per this para, the ld. CIT(DR) has held that, in the statement recorded u/s. 132(4), when the Respondent was asked about the foreign bank account, the Respondent stated that he is unable to recall the specifics and he also made a voluntary disclosure of an amount of Rs 39.60 crores. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im to proceed in the matter. No such materials were given to the Respondent. This is the reason why it took so long to file retraction affidavit. Interestingly, in para 5 of the letter of the ld. CIT(DR) affirms this fact. Further, Hon ble Members may please appreciate that, this is not a retraction but rather a clarification. 5. As per this para, the ld. CIT(DR) has submitted that, the ld. AO in her assessment order has corroborated the admission of Shri Rajeshkumar G Patel with independent corroborative evidences. Reply 5.1 This finding is grossly untrue. Nowhere in the assessment order the AO has corroborated the admission of the Respondent with independent corroborative evidences. This is because, no such corroborative evidences (about foreign bank account) was found during search. Rather, it never existed. If there is a single corroborative evidence in this regard, then the ld. CIT(DR) ought to have unfolded this fact by referring to specific instance (from the assessmdent order). Thus, this is just a passing remark without substance. 6. As per this para, the ld. CIT(DR) has held that, the Respondent refused to provide the consent waiver form. Reply 6.1 In this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documentary evidence includes the evidence that shows the original documents as mentioned in Section 62 of the Indian Evidence Act, whereas secondary documentary evidence is the evidence that includes copies of documents that can be presented in the court under certain circumstances or as mentioned in Section 63 and Section 65 of the Indian Evidence Act. Direct Evidence is acknowledged as the most important evidence required for deciding the matter in issue. Direct evidence directly proves a fact or disapproves of the fact by its virtue. In the case of direct evidence, a particular fact is accepted directly without giving any reason to relate to the fact. One does not even need to point out the illustration provided as the evidence given by the witness in the court of law is the direct evidence which is sufficient enough to prove the matter as against the testimony to a fact proposing guilt. Here in the case of the Respondent, there is no direct evidence (as otherwise, the AO would have made it a part of the assessment order). In order to establish admission of evidence, the following facts should be consistent with the theory. The circumstances from which the inference for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or refuse to follow it on the ground that the verdict had not been accepted by the Department and that the matter was carried further and was pending before the Supreme Court. When a point is concluded by a decision of the Court, all subordinate courts and inferior Tribunals within the territory of the State and subject to the supervisory jurisdiction of the High Court are bound by it and must scrupulously follow the said decision in letter and spirit. In CIT vs. G. Dalabhai Co 226 ITR 922, the Hon ble Gujarat High Court has remarked Before parting with the case, we notice with anguish the language used by the Income Tax Officer in his assessment order saying that with due respect to the decision of the Gujarat High Court, I do not follow the same . The Income Tax Officer in not following the decision of the Gujarat High Court within whose supervisory territory he was functioning, is far from satisfactory, that is the least we can say. The minimum decorum of the system of hierarchy that Tribunals in the administration of justice and their judicial subordination to the High Court of the territory in which they function requires that they restrain in the use of proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered as binding on the law point decided on the principle of judicial discipline. The following are the observations of the Supreme Court from the decision in S l Rooplal Another vs. L. G. of New Delhi (2000) SCC 644. (1) At the outset, we must express our serious dissatisfaction in regard to the manner in which a co-ordinate Bench of the Tribunal has overruled in effect, an earlier judgment of the same Tribunal. This is opposed to all principles of judicial discipline .. Precedents which enunciate rules of law from the foundation of administration of justice under our system. This is a fundamental principle which every presiding officer of a judicial forum ought to know for consistency in interpretation of law alone can lead to public confidence in our judicial system. (2) The decision of the special (large) Bench of the Tribunal must be held to be a binding precedent for division benches otherwise the very purpose of constituting them will get frustrated. This of course is subject to the exception that if there is a High Court decision on the same issue and not noticed by the Special Bench, then the High Court decision will receive preference as was done in Chandul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessment orders are barred by limitation and therefore the entire assessment itself is quashed. In our considered view, this is the primary LEGAL Ground which ought to have been challenged by the Revenue in the present appeals, however no such specific ground is raised and further Ld CIT DR has not addressed this issue in his Notes on Arguments . Thus we presume that the Revenue is not challenging the findings of Ld CIT[A] quashing the assessment orders as time-barred. However Ground no.7 the Ld CIT[A] has not following the proposition of law laid down in the Finance Act, 2012. Though this ground is not specific about the assessment order is barred by limitation, but considering that the Ld CIT[A] has not following the proposition of law laid down in Finance Act, 2012 , which means about the amendment made in Clause [viii] of the Explanation to section 158B[1] of the Finance Act 2012, thereby extending the period of limitations from six months to 12 months with effect from 1st day of July 2012. 7.2. For better understanding the Memorandum explaining the changes in the Income Tax Act vide Finance Bill 2012, wherein clauses 63, 65 the changes relevant to extensi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar time limit of 38 days available with the AO, as per the above proviso, 60 days namely further time of 22 days, that is upto 22-04- 2014 is available to the AO for completion of the assessment order. However the Ld Assessing Officer completed the assessment order on 17-02-2015 which is clearly barred by limitation. Both the AO and Ld CIT DR could not able to justify that the assessment order passed is well within the period of limitation. Whereas the Ld CIT[A] in his Appellate order at paragraph 6.19 has elaborately dealt this issue and held that the assessment order is barred by limitation, since the same is passed after 22-04-2014. Therefore we have no hesitation in holding that the assessment orders passed by the Ld Assessing Officer on 17-02-2015 are clearly barred by limitation and the assessment orders are non existing in the eye of law. Thus the Ground no.7 raised by the Revenue is devoid of merits and the entire Revenue appeals fails and deserve to be dismissed. 8. Though the entire assessment is quashed on the ground of time barred, however we are required to adjudicate the other grounds raised by the Revenue. As stated earlier, Grounds nos. 1 to 4 are inter connected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IES, which were not authenticated. It neither have any signature of the Banking Authority nor it has the Bank Logo/emblem in it. [for ready reference the same is enclosed as Annexure 1 of this order, this document is also not eligible being a Photo copy]. Further mere appearance of some personal details of the assessee on the three pages photostat copy does not validate the information as true and correct. Since personal details are easily available from known sources and therefore such details do not validate the case of the AO in any manner. Further more if the information in the possession of the Revenue been authentic and concrete, then what is the necessity to collect the same again from the Competent Authority namely FT TR Division. Even after ten years after such reference the Competent Authority could not produce the same to the Department. Thus the burden of proof for proving the connection of the alleged foreign bank account was upon the Revenue and not on the assessee. Therefore, what the AO attempted to draw an inference that the assessee owns and maintains foreign bank account, based on some unverified sheet of paper which is indicative of a bank statement, it is upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law is the direct evidence which is sufficient enough to prove the matter as against the testimony to a fact proposing guilt. Here in the case of the Respondent, there is no direct evidence (as otherwise, the AO would have made it a part of the assessment order). In order to establish admission of evidence, the following facts should be consistent with the theory. The circumstances from which the inference for the theory was drawn, should be fully established. The circumstances should be of a decisive nature. The circumstances should serve to mean and prove only the theory proposed to be proved and should not entertain any other theory. 10.3.None of the above pre-requisites are fulfilled here. Hence, a mere unauthenticated document, can never constitute evidence. 11. Under this para, the ld. DR has relied upon the definition of the word perjury. Reply 11.1 The Respondent prays that, perjury is only applicable where there are false statements/ evidences. The Hon Members are humbly appraised that, the Department has also initiated prosecution proceedings. The only charge made in the prosecution filed by the department is failure to file return of income in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss and until, some corroborative evidence is found in support of such admission. We are also of the view that from the statement recorded at such odd hours cannot be considered to be a voluntary statement, if it is subsequently retracted and necessary evidence is led contrary to such admission. Hence there is no reason not to disbelieve the retraction made by the Assessing Officer and explanation duly supported by the evidence. We are, therefore, of the view that the Tribunal was not justified in making addition of Rs. 6 lakhs on the basis of statement recorded by the Assessing Officer under section 132(4) of the Act. The Tribunal has committed an error in ignoring the retraction made by the assessee. 27. In the above view of the matter, addition of Rs. 1 lakh made on account of unaccounted cash is confirmed and the addition of Rs. 6 lakhs is hereby deleted. 9.4. Thus, we are of the considered opinion that the alleged unauthenticated and uncorroborated sheets of papers should not be considered as evidence, whether primary or secondary and therefore addition made by the Ld AO on such document is liable to be deleted. Therefore the Ground Nos. 5 to 6 raised by the Revenue name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned orders have been passed on 2-3-2015. The Ld. CIT(A) did not appreciate the above issue. He has submitted that reason of passing the assessment orders Dated 2-3-2015 advanced by the Ld. CIT-DR was that since a reference under section 90 of the I.T. Act, 1961 was made to Swiss Authority and no information was received till the time of passing of the assessment orders, hence, the time limit was extended by one year under Explanation-IX of Section 153B of the I.T. Act, 1961. He has submitted that the Ld. CIT-DR has furnished a letter Dated 26-6-2015 together with information asked for in relation to the assessee received from Swiss Authority. It may be seen that as per A.O's admitted case, reference was made under section 90 of the I.T. Act, 1961 under the provisions of Exchange of Information , Article of Indo Switzerland Double Taxation Avoidance Agreement [DTAA] and such information was required for the period from 1-4-1995 to 31-3-2012 seeking information under the provisions of Exchange of Information Article 26 of Indo-Switzerland Double Taxation Avoidance Agreement [DTAA]. He has submitted that the above stated such reference made under section 90 is bad in Law an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed on record letter of the A.O. Dated 22-8-2019 in which it is clearly mentioned by the A.O. that last panchanama was drawn on Dated 26-9-2011. Learned Counsel for the Assessee also placed on record letter Dated 26-6-2015 issued by Swiss Competent Authority addressed to the Government of India in which it is specifically mentioned that information as required could be provided from F.Y. 2011-2012 as the prior years are not covered by temporal scope of Article 26 of the Amended Double Taxation Avoidance Agreement between India and Switzerland. Therefore, such information could be provided from 1-4-2011. Learned Counsel for the Assessee also placed on record Notification Dated 27-12- 2011 between India and Switzerland Confederation for avoidance of double taxation. These would clearly show that these are applicable after assessment years under appeals and as per information provided vide letter Dated 26-6-2015 no such information could be provided prior to 1-4-2011. Therefore, Swiss Authorities have not provided any information to Revenue Authorities in India about assessee's bank account with HSBC, Geneva, Switzerland for assessment years under appeals i.e., A.Ys. 2006-2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shing factors in Dayawanti Gupta (supra), therefore, do not detract from the settled legal position in Kabul Chawla (supra) which has been followed not only by this Court in its subsequent decisions but also by several other High Courts. 71. For all of the aforementioned reasons, the Court is of the view that the ITAT was justified in holding that the invocation of Section 153A by the Revenue for the AYs 2000-01 to 2003-04 was without any legal basis as there was no incriminating material qua each of those AYs. Conclusion 72. To conclude: (i) Question (i) is answered in the negative i.e., in favour of the Assessee and against the Revenue. It is held that in the facts and circumstances, the Revenue was not justified in invoking Section 153A of the Act against the Assessee in relation to AYs 2000-01 to AYs 2003-04. 8.1. The above Judgment is confirmed by the Hon'ble Supreme Court by dismissing the SLP of the Department. Therefore, on this reason alone no addition could be made of any unexplained bank deposits or interest earned thereon in any of the assessment years. In view of the above, we set aside the Orders of the authorities below and delete the entire addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uggest that either the assessee was having any bank account in Switzerland with HSBC or assessee was any way linked to these bank accounts. In the statement recorded u/s. 132(4) the assessee had categorically denied having such bank accounts or having any link with the bank accounts of such entities. No material or evidence was found to rebut the denial statement of the assessee. Apart from that, even during the course of the assessment proceedings when statement was recorded by the AO, assessee continued to deny such kind of transaction and even at the stage of the assessment proceedings the Assessing Officer did not confront with any material which can be said to have been recovered from the possession of the assessee in the course of search with regard to the deposits or any kind of link in the foreign bank accounts. The ld. CIT (A) in the impugned order also (which has been incorporated above) has not held that any document or evidence qua any link with the foreign bank accounts has found during the course of search, albeit he has given a finding that to the effect that it was on the basis of the information received which was precursor to carry out search and seizure action at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng information which can implicate assessee but the said information has been received as a result of search carried out on 20.01.2012. Once any document which though is in the nature of incriminating material but if it has not been found in the course of search, then in view of the principle laid down by the Hon'ble Jurisdictional High Court in several cases, such an addition cannot be roped in the assessment u/s.153A especially in the assessments which are not abated. If the Revenue had any incriminating material antecedent to the search, that is, it was found during the course of search or as a result of search, then in that case Revenue had various other courses of action left under the provisions of Income Tax Act, but certainly not within the ambit and scope of Section 153A read with 2nd proviso thereto. 12. Another Co-ordinate Bench of Kolkata Tribunal in the case of Bishwanath Garodia Vs. DCIT, Central Circle-3(3), Kolkata reported in [2016] 76 taxmann.com 81 has considered similar HSBC Bank foreign account and deleted the additions made by the AO as no seized materials was found during the search operation. Operative portion of the decision reads as follows: . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee on the basis of incriminating material found during the course of search. 13. At the time of hearing before us, the ld. D.R. has contended that the processing of returns of income filed by the assessee as made by the Assessing Officer under section 143(1) could not be regarded as assessment and it is, therefore, not a case where the assessments for both the years under consideration could be said to have been completed. He has also contended that the conclusion of such alone is sufficient to give jurisdiction to the Assessing Officer to proceed against the assessee under section 153A of the Act. In support of this contention, he has relied on the unreported decision of the Hon'ble Delhi High Court in the case of Anil Kumar Bhatia (supra). In the said case, a question was posed by the Hon'ble Delhi High Court in paragraph no. 12 of its order as to whether the Assessing Officer was empowered to reopen the proceedings and reassess the total income taking note of the undisclosed income, if any, unearthed during the search where an assessment order had already been passed in respect of all or any of those six assessment years either under section 143(1) or sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the assessments for the said years had become final prior to the date of search and there was no incriminating material found during the course of search to support and substantiate the said addition. The said additions made for both the years under consideration are, therefore, deleted allowing the relevant grounds of the assessee's appeals. 15. Thus the Ground Nos.8 9 raised by the Revenue are general in nature and does not require separate adjudication. In the result the appeal filed by the Revenue is devoid of merits and liable to be dismissed and we confirm the order of Ld CIT[A] who held that the assessment order is barred by limitation. 16. C.O.No.1/RJT/2021 filed by the assessee and Grounds of Appeal raised therein are that the CIT[A] failed to decide the initiation of proceedings u/s.153A and failed to decide the additions made by the AO on merits of the case. We do not find merits in the grounds raised by the assessee, since the Ld CIT[A] who quashed the assessment order itself as time barred which is confirmed by us, therefore there is no separate adjudication is required on the merits of the case on the additions/disallowance made by the AO, since the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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