PRINCIPAL COMMISSIONER OF INCOME TAX vs. MEHUL LAVJIBHAI MEHTA

ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the learned Income Tax Appellate Tribunal, Ahmedabad “B” Bench, Ahmedabad (hereinafter referred to as “the learned Tribunal”) in respective Tax Appeals, being IT(SS)A No.674/Ahd/2010 & CO No.293/Ahd/2010 for the Assessment Year 2005-06 and IT(SS)A No.675/Ahd/2010 & CO No.294/Ahd/2010 for the Assessment Year 2006-07, revenue has preferred the present Tax Appeals with the following proposed questions of law; (A)

Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law and on facts in quashing the proceedings initiated in the case of the assessee under Section 153C of the Income Tax Act, 1961 without appreciating the fact that the satisfaction note to initiate proceeding under Section 153C read with Section 153A of the Income Tax Act in the case of the assessee was duly recorded by the Assessing Officer? (B)

Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in not reverting the order of the CIT(A) deleting the addition of Rs.43,15,624/- made by the Assessing Officer? [2.0] Ms. Mauna Bhatt, learned advocate appearing on C/TAXAP/208/2018 JUDGMENT behalf of the revenue has submitted that the learned Tribunal seems to have proceeded on erroneous findings that no satisfaction was recorded by the Assessing Officer of the searched person, and therefore, no cognizance under Section 153C of the Income Tax Act could be taken against the respondent – assessee. It is the case on behalf of the revenue that in fact the satisfaction was recorded by the then Deputy Commissioner of Income Tax, Central Circle -2(1), Ahmedabad and the Assessing Officer vide the aforesaid satisfaction note recorded on 22/07/2009 has clearly indicated the list of documents, namely, Annexure 54, Annexure 64 and Annexure 65 alongwith the details of purchase contained therein on the basis of which proceedings under Section 153(C) of the Income Tax Act were initiated in the case of Mehul Lavjibhai Mehta. It is submitted that however the departmental representative who appeared before the learned Tribunal also made the submission under some factual misconception, which, as such, are contrary to the record. [3.0] In response to the notice issued by this Court, Shri B.S. Soparkar, learned advocate has appeared on behalf of the respondent – assessee. He has submitted that before the learned Tribunal even the Deputy Commissioner of Income Tax, Central Circle 1 (3), Ahmedabad vide communication dated 19/09/2017 addressed to the Commissioner of Income Tax, ITAT -2, Ahmedabad also stated as under; “It is to submit that, on verification of available case records in case of Kunvarji Commodities Pvt. Ltd. no data /communication regarding recording of reasons /intimation for action under Section 153C of C/TAXAP/208/2018 JUDGMENT the Income Tax Act in case of Shri Mehul L. Mehta is found on record. It is further submitted that on verification of records intimation to Aos in case of (i)Mamtaben M. Mehta (PANo-AJ1PM8424B) and (ii)

Padamchand Mehta (PANo – ADFPM6202N), were noticed and copy of which are enclosed for reference.” [3.1] It is submitted that only thereafter and after the impugned common judgment and order is passed by the learned Tribunal, Department has changed the opinion and have taken a different stand. [4.0] Having heard the learned advocates appearing on behalf of the respective parties, we are of the opinion that whether there was a satisfaction recorded or not and thereafter proceedings under Section 153C of the Income Tax were initiated or not and whether the learned Tribunal and the departmental representative proceeded further erroneously and /or on erroneous facts, it may firmly be brought to the notice of the learned Tribunal by way of rectification application so that the learned Tribunal may consider the file and the material on record and consider the same whether the learned Tribunal has proceeded on erroneous facts and /or what was considered by it was even submitted by the Deputy Commissioner is borne out from the material on record /file or not, we are not further entering into the merits of the case at this stage and we relegate the department to submit appropriate rectification application /applications before the learned Tribunal pointing out what is stated in the present Tax Appeals with supporting material and if such application C/TAXAP/208/2018 JUDGMENT /applications are preferred within the period of four weeks from today, we direct the learned Tribunal to decide the same in accordance with law and on its own merits. As we have relegated the Department to first approach the learned Tribunal, the question with respect to limitation may not come in the way of the Department provided such rectification application /applications are preferred within a period of four weeks from today. [5.0] With this, all these Tax Appeals are disposed of at this stage. (M.R. SHAH, J.) (A.Y. KOGJE, J.) siji