ITO 2(2)(1), MUMBAI vs. I.A. & I.C PVT .LTD, MUMBAI

Per Manoj Kumar Aggarwal (Accountant Member):- 1. Aforesaid appeals by revenue for Assessment Years [AYs] 2005-06 and 2006-07 contest separate orders of Ld. first appellate authority on identical grounds of appeal and therefore, disposed-off by way of this common order for the sake of convenience & brevity.

7. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record. We have given a thoughtful consideration to the facts of the case and are not impressed by the manner in which the CIT(A) had proceeded with and disposed of the appeal of the assessee. We find that it remains as a matter of fact that the case records of the assessee as were there before the CIT(A), as conceded by the latter, were found to be incomplete. We are unable to comprehend that as to how the CIT(A) in the absence of complete records had concluded that no incriminating material belonging to the assessee was found and seized during the course of the search & seizure proceedings conducted under Sec. 132 on M/s JIK Industries Ltd and its promoter Shri. R.G. Parikh. We also find it beyond our comprehension that in the absence of the complete records how the CIT(A) had observed that the assessment in the case of the assessee for the year under consideration, viz. A.Y. 2007-08 was unabated. We are of the considered view that a correct factual position in context of the aforesaid issues not only had a material bearing, but rather was indispensably required for fair adjudication on the validity of the assumption of jurisdiction by the A.O under Sec. 153C in the case of the assessee. We are unable to persuade ourselves to be in agreement with the aforesaid view arrived at by the CIT(A) in respect of the validity of the assumption of jurisdiction by the A.O under Sec. 153C on the aforesaid count, as the same can safely be held to have been arrived at by the CIT(A) on the basis of an half hearted approach adopted by him while recording the facts on the basis of incomplete records. We further find that even otherwise the aforesaid observations of the CIT(A) that no incriminating material was seized during the course of search & seizure proceedings conducted on M/s JIK Industries Ltd and its promoter Shri. R.G. Parikh, is itself found to militate and is in serious conflict with his observation that it was not the case of the assessee that only acknowledgement of return and copies of the final account of the assessee were seized during the course of the aforesaid search & seizure proceedings. The aforesaid observations of the CIT(A) though rendered in context of the claim of the assessee that no incriminating material was found and seized during the course of the search & seizure proceedings, therefore, the A.O could not have assumed jurisdiction under Sec. 153C, thus raises doubts as regards the true state of affairs in respect of the nature of the material belonging to the assessee, as was seized during the course of the search & seizure proceedings conducted on M/s JIK Industries Ltd and its promoter Shri. R.G. Parikh. We thus in the backdrop of our aforesaid observations, thus in all fairness and in the interest of justice restore the matter to the file of the CIT(A) for fresh adjudication on the issue as to whether the assessment in the case of the assessee for the year under consideration, viz. A.Y. 2007-08 was abated or not, and as to whether any incriminating document /material belonging to the assessee was found during the course of the search & seizure proceedings conducted as on 04.02.2011 on M/s JIK Industries Ltd and its promoter Shri. R.G. Parikh. The CIT(A) is directed to proceed with the fresh adjudication during the course of the ‘set aside’ proceedings only after summoning the complete case records of the assessee. The CIT(A) shall after perusing the complete case records of the assessee adjudicate the validity of the additions made by the A.O in the hands of the assessee, in the backdrop of the judgment of the Hon’ble High Court of Bombay in the case of CIT-II, Thane Vs. Continental Warehousing Corporation (2015) 374 ITR 645 (Bom). Needless to say, the CIT(A) shall during the course of the set aside proceedings afford sufficient opportunity of being heard to both the parties, who shall remain at a liberty to substantiate their respective contentions during the course of the set aside proceedings. We further direct the CIT(A) to complete the set aside proceedings within a period of six months from the date of receipt of this order. The effective Grounds of appeal No(s). 1 to 4 are allowed for statistical purposes in terms of our aforesaid observations.

In view of the admitted position and taking a consistent stand, both the appeals stands remitted back to the file of Ld. CIT(A) for fresh adjudication on similar lines.