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Income Tax Appellate Tribunal, BANGALORE BENCH ‘C’, BANGALORE
Before: SHRI SUNIL KUMAR YADAV & SHRI A. K. GARODIA
O R D E R PER SHRI A.K.GARODIA, AM Both these appeals are filed by two different but related assessees and these are directed against two separate orders of the ld. CIT(A)-II, Bangalore both dated 30-03-2014 for the assessment years 2007-08.
Both these appeals were heard together and are being disposed of by this common order for the sake of convenience.
Brief facts till the assessment stage are noted by the ld. CIT(A) in his order in the case of Shri Alok Bhartia in and in the case of Smt. Alpana Bhartia, in ITA No.856(B)/2016 at para-7.1 & 7.2 and these para-7.1 & 7.2 are herein below reproduced for the sake of ready reference;
“7.1 The appellant was subjected to search proceedings u/s 132 of the IT Act, 1961 on 25-08- 2011. In the course of search proceedings a statement on oath was recorded from the appellant. The appellant said in her statement that only her husband knows about the bank accounts, immovable properties etc. The appellant’s husband Mr. Alok Bhartia had admitted in the statement u/s 132(4) that the said account No.5091468103 in HSBC Geneva is in the name of Mr. Alok Bhartia and Mrs. Alpana Bhartia and it is a joint account. 7.2 The sworn statement was followed up with a letter from the appellant’s husband dated 29-08-2011. In that he said that in order to avoid the hassles and to buy peace, he agreed to offer the declaration for extra income, as per calculation enclosed in annexure. In the annexure, he has offered Rs.5,98,40,617/-(US D 13,50,804 @Rs.44.30 /USD (Feb.2007) as additional income declared as per letter to DDIT Unit II(2). Therefore, the undisclosed income was admitted in the sworn statement u/s 132(4) as also in the letter filed before DDIT after a few days.
However, while filing the return or income for the year, in response to notice u/s 153A of the IT Act, 1961, the appellant did not offer any income on the above account. In the show cause issued, appellant was also asked to furnish a confirmation from HSBC Geneva stating that the said bank account does not belong to Mrs. Alpana Bhartia. Failure to substantiate, the deposits were to be brought to tax in the hands of the appellant, Mrs. Alpana Bhartia as the said account was a joint account. The appellant has replied to the show cause notice dated 25-02-2014 as under; “ I have not at any pint of time made any disclosure /statement u/s 132(4) of the Act. There being no statement there is no knowledge of any bank account as it is referred to in the letter. There is therefore, no question of any addition to my income. Any statement made by any person is not relevant to/binding on me”.
In the case of Shri Alok Bhartia, in Para 7.1.
& 7.2 read as under;
“7.1 The appellant was subjected to search proceedings u/s 132 of the IT Act, 1961 on 25-08-
2011. In the course of search proceedings a statement on oath was recorded from the appellant. In the course of the statement, the appellant was shown the details of his bank account in HSBC Bank, Geneva. The existence of this account was accepted then by the appellant and he had agreed to offer the undisclosed income in respect of this bank account to tax.
7.2 The sworn statement was followed up with a letter from the appellant dated 29-08-2011. In that he said that in order to avoid the hassles and to buy peace, he agreed to offer the declaration for extra income, as per calculation enclosed in annexure, he has offered Rs.5,98,40,617/- (US D 13,50,804
@Rs.44.30 /USD (Feb.2007) as additional income declared as per letter to DDIT Unit II(2). Therefore, the undisclosed income was admitted in the sworn statement u/s 132(4) as also in the letter filed before
DDSIT after a few days.
However, while filing the return of income for the year, in response to notice u/s 153A of the IT Act,
`1961, the appellant did not offer any income on the above account and ultimately, the AO made the addition as stated above”.
Being aggrieved, both these assessees carried the matter in appeal before the ld. CIT(A) but without success and therefore, further appeals have been filed by these two assessees before us.
In course of hearing before us, ld. AR of the assessee submitted that under similar facts and circumstances, the Delhi Bench of the Tribunal in the case of Shyam Sundar Jindal Vs ACIT in dated 10-04-2017 has decided similar issue and the matter has been restored back to the file of AO for a fresh decision after confronting the assessee with the documents relating to the assessee and the said documents should be unauthentic documents. He submitted that the copy of this Tribunal order is available on pages-341 – 391 of the paper book. He further submitted that the Kolkata Bench of the Tribunal has also decided similar issue in the case of Shri Bishwanath Garodia in ITA Nos.853 & 854/Kol/2016 dated 21-09-2016 and copy of this Tribunal order is available on pages-392-411 of the paper book. He submitted that in this case, the Tribunal has held that the assessments for the relevant years had become final prior to the date of search and there was no incriminating material found during the course of search and therefore, the addition made by the AO has been deleted in that case. Thereafter, he submitted that in view of these Tribunal judgments, in the present two cases also, the addition made by the AO should be deleted and if not deleted, it should be restored back to the file of the AO for a fresh decision as has been held by the Delhi Bench of the Tribunal.
5.1 As against this ld. DR of the revenue supported the orders of the authorities below.
He has also submitted that it is noted by the AO on page-9 of the assessment order in the case of Shri Alok Bhartia, that on 29/08/11, Shi Alok Bhartia filed a letter in course of post search proceedings and in this letter also, he has agreed for declaration of extra income in the present year to the extent of Rs.5,98,40,617/-. He also submitted that the search was conducted on 25-08-2011 and therefore, at the time of filing this letter on 29-08-2011, it cannot be said that there was any duress on the assessee and therefore, this letter of assessee is of great significance. He also submitted that on page-2 in para-4 of the assessment order also, it is noted by AO that in the sworn statement recorded u/s 131 on 25-08- 2011, Shri Alok Bhartia, admitted that the amount in the bank account i.e. HSBC, Geneva are not reflected in the books of account and offered to admit them and declared extra income. Subsequently, on 29-08-2011, the letter was filed as per which the undisclosed income was declared at Rs.5,98,40,617/- being the value of USD1350o at the rate of Rs.44.30 per USD. Thereafter, he submitted a copy of the letter dated 08-01-2015 issued by ld.CIT(Central) Bangalore to the standing counsel Shri Jeevan Neeralgi in respect of proposal for launching prosecution proceedings U/s 276C(1) in case of Shree Alok Bhartia and pointed out that as per this letter, for the present year, a demand of Rs.210,02,226/- was raised on Shri Alok Bhartia in respect of this addition of Rs.5,98,40,617/- and against this demand, the assessee has made payment of Rs.2.00 Crores on 28-03-2004 and Rs.5,82,500/- on 18-06-2014 and there was a refund adjustment of Rs.2,83,104/- and the net outstanding payment is only Rs.1,36,658/. He submitted that this fact that the assessee has made payment of the tax also goes to show that the assessee agrees to the offer of disclosing extra unaccounted income in this regard. He further submitted that as per para-8 of the same letter dated 31-07-2013, a format for consent was issued to Shri Alok Bhartia and Smt. Alpana Bartia for filling up the form and giving their consent for obtaining the information about bank account in HSBC, Geneva, but till January, 2015, these assessees have not given their consent as per this letter. In fact, till now, the assessee has not given their consent and if the assessee now give their consent for obtaining the information then also, the matter may be restored back to the file of the AO for fresh decision after obtaining the information about the bank accounts in HSBC, Geneva but without such consent of the assessee, there will be no purpose served by restoring back the matter to the file of the AO. He placed reliance on the following judicial pronouncements; a) DCIT Vs Kamal Pasha in & CO No.128(B)/2015 dated 8-11-2016 b) Canara Housing Dev. Co. Vs DCIT 274 CTR 122(Kar.) c) W.P.No.3172 of 2015 in the case of Soignee R Kothari Vs DCIT dated 05- 04-2016…..wherein it was held that if the person is nothing to hide, the person would have co-operated in obtaining the bank statement. d) CIT Vs Dr.P.Sasikumar387 ITR 8 (Ker.) e) Smt Dayawanti Vs CIT 75 Taxman.com 308(Del.) f)Navdeep Dhingra Vs CIT 232 Taxman425(P&H) g)Bhagirath Aggarwal Vs CIT 351 ITR 143(Del.) h) CIT V s Abdul Razak 350 ITR 71 (Ker.) i) Pr.CIT Vs M/s Nau Nidhi Overseas Pvt.Ltd. in ITA No.58/2017 dated 03- 02-2017
We have considered the rival submissions. First of all we examine the applicability of two Tribunal orders on which reliance has been placed by the ld. AR of the assessee as noted above. The first Tribunal order is of Kokata Bench of the Tribunal rendered in the case of Shri Bishwanath Garodia Vs DCIT (Supra). In this case also, the facts are similar. In that case also, information was received by the Govt. of India from various Govt. under the provisions of exchange of information clauses of the Bilateral Double Taxation Agreement with that country that the assessee had a bank account in HSBC, Geneva, Switzerland showing a sum of US Dollars 10,74,837/- in May, 2006 and US Dollars 10,64,933/- in December, 2006 relating to assessment year 2007-08. On the basis of this information, a search and seizure action u/s 132 of the IT Act, was conducted in the case of the assessee as well as in other cases belonging to Mangal Steel Group on 28-07-2011 as well as on subsequent dates. In course of search, statement of assessee was recorded u/s 131 of the Act, wherein he admitted for having maintaining a bank account in HSBC, Geneva, Switzerland. He also admitted that the said bank account was opened on 07-06-1999 and his wife Smt. Usha Garodia was an authorized person to operate the said account maintained in his name. In that case also, it was agreed by him that he will pay income tax if any due on this amount because this was undisclosed amount. In that case also, the AO started proceedings u/s 153A of the Act and although the return of income were filed by the assessee in that case for both the years i.e. AY:
2006-07 & 2007-08, but no income was offered on account of these bank accounts in the said returns in any of these years and the addition was made by the AO in that case also in both these years and when the matter went to the Tribunal, the Tribunal deleted the addition on this basis that in a case where assessment proceedings have already reached finality, assessment u/s 143(3) r.w.s.153A has to be made as was originally made and only in those cases, where certain incriminating material was found indicating undisclosed income then, additions shall be made by restricting the same to these documents/incriminating material. For the sake of ready reference, we re-produce para-10 & 11 of this Tribunal order.
“10. At the time of hearing before us, the ld. DR has contended that the processing of return of income filed by the assessee as made b y the AO u/s 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 AO to proceed against the assessee u/s 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 para-NO.12 of its order as to whether the AO 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 assessments years either under section 143(1) or sec.143(3) of the Act, and such order was already inexistence having been passed prior to the initiation of search/requisition. Although, this question was not finally answered y he Hon’ble Delhi High Court in the case of Anil Kumar Bhatia(Supra), it is quite clear from the said question raised by the Hon’ble Delhi High Court that there was no distinction made by their Lordships in the assessments completed u/s 143(1) and sec.143(3) for determining the scope of the proceedings u/s153A. However, the said question arose specifically for the consideration of Mumbai Bench of this Tribunal in the case of ACIT Vs Prathiba Industries reported in 141 ITD 151 and after referring to the discussions made by the Hon’ble Delhi High Court in this context in the case of Anil Kumar Bhatia (Supra) , the Tribunal held that the only logical conclusion which could be traced out by harmonizing the legislative intendment and the judicial decision was that where the assessments ad already become final prior to the date of search, the total income has to be determined u/s 153A by clubbing together the income already determined in the original assessments and the income that is found to have escaped assessment on the basis of incriminating material found during the course of search. To arrive at this conclusion, reliance was placed by the Tribunal on the decision on Special Bench, Mumbai in the case of All Cargo Global Logistics Ltd. (Supra) wherein it was held that even though all the six years shall become subject matter of assessment u/s 153A as a result of search, the AO shall get the free hand through abatement only on the proceedings that are ending. But in a case or in a circumstances where the proceedings have reached finality, assessment u/s 143(#) r.w.s.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.
11. Keeping in view the discussion made above, we hold that the additions as finally made to the total income of the assessee on account of transactions reflected in the Bank account of the assessee with HSBC, Geneva, Switzerland and income relating thereto for both the years under consideration are beyond the scope of sec.153A 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”.
We find as per this Tribunal order, it was held that if no incriminating material has been found in course of search justifying any undisclosed income then no addition can be made u/s153A but on this aspect, the judgment of the Hon’ble Karnataka High Court rendered in the case of Canara Housing Dev. Co. Vs DCIT (Supra) is supporting the case of the revenue. Para 10 of this judgment is relevant and it is reproduced hereinbelow for ready reference. It is as under:- “10. Section 153A of the Act starts with a non obstante clause. The fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub-section (1) of Section 153A opens. The time-limit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. Therefore, it is clear even if an assessment order is passed under Section 143(1) or 143(3) of the Act, the Assessing Officer is empowered to reopen those proceedings and reassess the total income taking note of the undisclosed income, if any, unearthed during the search. After such reopening of the assessment, the Assessing Officer is empowered to assess or reassess the total income of the aforesaid years. The condition precedent for application of Section 153A is there should be a search under Section 132. Initiation of proceedings under Section 153A is not dependent on any undisclosed income being unearthed during such search. The proviso to the aforesaid section makes it clear the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. If any assessment proceedings are pending within the period of six assessment years referred to in the aforesaid sub- section on the date of initiation of the search under Section 132, the said proceeding shall abate. If such proceedings are already concluded by the Assessing Officer by initiation of proceedings under Section 153A, the legal effect is the assessment gets reopened. The block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved; resulting in multiple assessments. Under Section 153A, however, the Assessing Officer has been given the power to assess or reassess the total income of the six assessment years in question in separate assessment orders. The Assessing Officer is empowered to reopen those proceedings and reassess the total, income, taking note of the undisclosed income, if any, unearthed during the search. He has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. When once the proceedings are initiated under Section 153A of the Act, the legal effect is even in case where the assessment order is passed it stands reopened. In the eye of law there is no order of assessment. Re-opened means to deal with or begin with again. It means the Assessing Officer shall assess or reassess the total income of six assessment years. Once the assessment is reopened, the assessing authority can take note of the income disclosed in the earlier return, any undisclosed income found during search or and also any other income which is not disclosed in the earlier return or which is not unearthed during the search, in order to find out what is the "total income" of each year and then pass the assessment order. Therefore, the Commissioner by virtue of the power conferred under Section 263 of the Act gets no jurisdiction to initiate proceedings under the said provision because the condition precedent for initiating proceedings under Section 263 is any order passed under the Act by the Assessing officer is erroneous insofar as it is prejudicial to the interest of the revenue. Once the order passed by the Assessing officer gets reopened, there is no order which can be said to be erroneous insofar as it is prejudicial to the-interest of the revenue which confers jurisdiction on the Commissioner to exercise the power of the jurisdiction.
In the case of DCIT Vs Shi Kamal Pasha (Supra), the Tribunal has already considered this judgment of the Hon’ble Karnataka High Court and it was held that as per this judgment of the Karnataka High Court, this is not the requirement of law that there must be some undisclosed income having been unearthed during the course of search.
The Tribunal also noted that as per the judgment, initiation of proceedings u/s 153A is not dependent on any undisclosed income being unearthed during the search. The Tribunal further noted that as per this judgment of the Hon’ble Karnataka High Court, not only the income disclosed in the earlier return and income unearthed during the search, the AO can take into consideration any other income also for completing the assessment u/s 153A of the Act, 1961.
For the sake of ready reference, we re-produce para-10 of this Tribunal order which is as under;
“10. Now, we examine the applicability of the judgment of the Hon’ble Karnataka High Court rendered in the case of M/s CHDC (Supra). In this case, the assessee before the Karnataka High Court was the searched person as in the present case. Para no.10 & 11 of this judgment of the Hon’ble Karnataka High Court are relevant and for the sake of ready reference, these paras are re-produced herein below; “10. Section l53A of the Act starts with a non obstante clause. The fetters imposed upon the Assessing Officer by the strict procedure to " assume Jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the. non" obstante clause with which sub section (1) of '. Section"153A opens. The time-limit within which the notice under Section 'i4·S·can be issued, as provided in Section 149 .has also been made inapplicable by the non obstante clause. 'Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered 'by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose, case is covered by Section 153A, by even making reassessments. without any fetters, if need be. Therefore, it is', clear even if an assessment order is passed under Section '143(1) 'or 143(3) ~f the Act, the Assessing Officer is empowered to re-open those proceedings and reasons the total income taking note of the undisclosed income, if any, unearthed during the search. After such reopening of the assessment, the AO is empowered to assess or re-assess the total income of the aforesaid years. The condition precedent for application of Sec.153A is there should be a search under section 132. Initiation of proceedings u/s 153A is not dependent on any undisclosed income being unearthed during such search. The proviso to the aforesaid section makes it clear the AO shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. If any assessment proceedings are pending within the period of six assessment years referred to in the aforesaid sub-section on the date-of concluded by the assessing officer before initiation of search u/s 132, the said proceedings under Section, 153A, -the' legal effect' is the assessment gets reopened. The 'block assessment robed in only the undisclosed income and the regular assessments. Under Section' 153A, however, the Assessing Officer has been given the power to assess or reassess the assessments. Under Section' 153A, however, the Assessing Officer has been given the power to assess or reassess the "total income" ,of the- six assessment years in question in separate assessment orders. The Assessing Officer is empowered to' reopen those proceedings and reassess the total, income, taking note of the undisclosed income, if any, unearthed during the search. He has been entrusted with the' duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. When once 'the proceedings are initiated under Section 153A: of the Act, the " legal effect is even in case where the assessment order is passed it stands reopened. In the eye of law there is no order of assessment. Re-opened means s to deal www woo begin with again. It means the Assessing 'Officer:sha!l assess or reassess the total income of six assesment, years. Once the assessment is reopened, the assessing authority can take note of the' income disclosed in the earlier return. Any other income which is not disclosed in the earlier return or which is not unearthed during the search, in order to find out what is the total income of each year and then pass the assessment order. Therefore, the Commissioner by virtue of the power conferred under Section 263 of the Act gets no jurisdiction to initiate proceedings under the said provision "because the condition precedent for initiating proceedings under Section 263 is any order passed under the Act by the Assessing officer is erroneous insofar as it is prejudicial to the interest of the revenue. Once the order passed by the AO gets reopened, there is no order which can be said to be erroneous insofar as it is prejudicial to the interest of the revenue which confers jurisdiction on the Commissioner to exercise the power of the jurisdiction.
11. The Tribunal has proceeded on the assumption by virtue of the judgment of the special Bench of the Mumbai, the scope of enquiry u/s 153A is to be confined only to the undisclosed income unearthed during search and if there is any other income which is not the subject matter of search, the same cannot be taken into consideration. Therefore, the revisional authority can exercise power u/s 263. In the entire scheme of 153A of the Act, there is no prohibition for the assessing authority to take note of such income. On the contrary, it is expressly provided u/s 153A of the Act the AO shall assess or reassess the total income of six assessment years which means the said total income includes income which was returned in the surlier return, the income which was unearthed during search and income which is not the subject matter of aforesaid two income. If the Commissioner has come across any income that the assessing authority has not taken note of while passing the earlier order, the said material can be furnished to the assessing authority and the assessing authority shall take note of the said income also in determining the total income of the assessee when the earlier proceedings are reopened and that income also shall become the subject matter of said proceedings. In that view of the matter the reasoning given by the Tribunal is not justified. Commissioner did not have jurisdiction to initiate any proceedings u/s 263 of the Act”.
As per the above paras reproduced from the judgment of the Hon’ble Karnataka High Court rendered in the case of M/s CHDC (Supra, it was held in this case that even if the assessment order is passed u/s143(3) of the IT Act, the AO is empowered to re-open those proceedings and reassess the total income taking note of the undisclosed income if any unearthed during the search and it was also held that after such re- opening of the assessment, the AO is empowered to assess or reassess the total income of the aforesaid years. It was also held by the Hon’ble Karnataka High Court that application of Sec.153A of the Act requires only this that there should be a search u/s 132 and initiation of proceedings u/s153A is not dependent on any undisclosed income being unearthed during the search. Hence, this is categorically made clear by the Hon’ble Karnataka High Court that for the re-assessment of the searched person u/s 153A of the Act, this is not a requirement of law that there must be some undisclosed income having been unearthed during the course of search. This is also made clear by the Hon’ble Karnataka High Court that once the assessment is re-opened, the assessing authority can take note of the income disclosed in the earlier return, any undisclosed income found during the search or/and also any other income which is not disclosed in the earlier return or which is not unearthed during the search in order to find out what is the total income of each year and then pass the assessment order. Hence, it is seen that as per this judgment of the Hon’ble Karnataka High Court, not only the income disclosed in the earlier return and income unearthed during the search, the AO can take into consideration any other income also for completing the assessment u/s 153A of the Act, 1961. In the present case, in our considered opinion, this judgment of the Honble Karnataka High Court rendered in the case of M/s CHDC (Supra) is squarely applicable because, the assessee before us is also a searched person as in that case. Hence, respectfully following this judgment of the Hon’ble Karnataka High Court rendered in the case of M/s CHDC (Supra), we reverse the order of the ld. CIT(A) and restore that of the AO.
It is seen that after considering the judgment of the Hon’ble Karnataka High Court having rendered in the case of Canara Housing Dev. Co. (Supra), the issue regarding validity of the assessment order u/s 153A and possibility of making addition in the said assessment on the basis of material available with the department although not found during the course of search is covered in favour of the revenue by this judgment of the Hon’ble Karnataka High Court and therefore, on this aspect of the matter, we are duty bound to follow this judgment of the Hon’ble Karnataka High Court in preference to the Tribunal order cited by the ld. AR of the assessee having been rendered in the case of Shri Bishwanath Garodia (Supra).
The second Tribunal order on which reliance has been placed by the ld. AR of the assessee has been rendered by the Delhi Bench of the Tribunal in the case of Shyam Sunder Jindal Vs ACIT (Supra). In that case also, the issue in dispute was regarding addition made by the AO under similar facts, in respect of assessee’s bank account with HSBC Bank, Geneva, Switzerland. In that case, the Tribunal restored the matter back to the file of AO for fresh decision and for the sake of ready reference, para-23 of the Tribunal order is reproduced. This is as under:-
“23. From the aforesaid notings, it is clear that the AO informed the assessee about the copy of bank account obtained under DTAA. However, a contradictory observation has been made in para-6 of the assessment order that the requisite information from Swiss banking authority had not been received. We, therefore, considering the totality of the facts as discussed hereinabove, set aside the impugned order and restore the matter back to the file of the AO to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard and by confronting the assessee with the documents which relates to him. As regards to the legal issue relating to the validity of the assessment u/s 153A of the Act, it is noticed that the assessee inpara-2.20 of his written submissions dated 22-08-2016 stated that the search team had confronted the assessee with unauthentic document. In the present case, it is not clear as to whether any authentic document was confronted to the assessee or not. The AO also mentioned that a reference was made on 27-11-2012 but it is not clear for which purpose the said reference was made. So in the absence of clear facts on record, this issue is also set aside to the file of the AO to be adjudicated afresh, in accordance with law after providing a due and reasonable opportunity of being heard to the assessee”.
11.1 As per the above Para, reproduced from the Tribunal order rendered in the case of Shyam Sunder Jindal Vs ACIT (Supra), it is seen that in that case, the matter was restored back by the Tribunal to the file of the AO for fresh decision on this basis that authenticated copy of the statement was not confronted to the assessee. In this regard, we find that the judgment of the Hon’ble Bombay High Court rendered in the case of Soignee R Kothari Vs DCIT (Supra) supports the case of the revenue. In that case, it was held by the Hon’ble Bombay High Court that in the normal course of human conduct, if a person has nothing to hide and serious allegations/questions are being raised about the funds, a person, would make available the documents which would put to rest all questions seems to arise in the minds of the authorities.
In that case also, the assessee was asked to give consent waiver form to enable the bank to get copies of the bank statements of HSBC, Geneva, Switzerland, but the assessee in that case did not provide consent waiver although modified consent was provided by the assessee and it was learnt that a modified consent waiver form would not enable the bank to give copies of the bank statement of HSBC, Geneva, Switzerland. In that case also, it was the argument of the ld. AR of the assessee that it is for the revenue to establish that income has accrued or arisen in India which was lying on 26-03-2006 in account no.5091404580 in HSBC, Geneva, Switzerland. For the sake of ready reference, we re- produce para-11 of this judgment of the Hon’ble Bombay High Court. The same is as under;
“11. However, on enquiry by the revenue from HSBC, Geneva, it was learnt that a modified consent waiver form would not enable the bank to give copies of the bank statement of account No.5091404580 since the waiver would have to be provided without modifications. We notice that the principal contention of the petitioner before us has been that she is non-resident and it s only her income which is received or accrued or arising in India which can be brought to tax under the Act. Thus, it is submitted that it is for the revenue to establish that the income had accrued or arisen in India which was lying on 26th March, 2006 in account no.5091404580 in HSBC, Geneva. We find that the petitioner and/or her uncle- Dilip Mehta i.e. Executor of the Estate of late Ramniklal N Mehta who could probably amongst others be able to produce copies of the bank statement either by giving a consent waiver form to the IT Dept. or in the alternative Mr. Dilip Mehta could instruct the Director of M/s White Cedar to apply for and furnish to him copies of the bank statement in account no.5091404580 of HSBC, Geneva. The fact that t is within the authority/power of Mr. Dilip Mehta to instruct M/s White Cedar is evident from the letter dated 14th August 2014 addressed by HSBC Bank, Geneva to M/s Red Oak Operation Ltd. which has been taken on record and marked X for identification. This bank statement if obtained from HSBC, Geneva, would reveal and/or possibly give clues as to the source of amounts deposited in the account no.5091404580 of HSBC bank, Geneva. Neither the petitioner nor her uncle i./e Executor o the Estate of late Ramniklal N Mehta is ready to obtain the necessary statement either directly or through M/s White Cedar from HSBC, Geneva in respect of account no.5091404580 by exercising or causing to be exercised the limited authority to instruct White Cedar to apply for and obtain the requisite information. In the normal course of human conduct if a person has nothing to hide and serious allegations/questions are being raised about the funds a person would make available the documents which would put to rest all questions which seem to arise in the mind of the authorities. The conduct on the part of the petitioner and her uncle, in not being forthcoming, to our mind leads us to the conclusion that this is a not a fit case where we should exercise our extra ordinary writ jurisdiction and/or interfere with the orders passed by the authorities under the Act. If a person has nothing to hide, we believe the person would have co-operated in obtaining the bank statements”.
12.1 It is seen from the judgment of the Hon’ble Bombay High Court rendered in the case of Soignee R Kothari Vs DCIT (Supra)that it was held by the Hon’ble Bombay High Court that if a person has nothing to hide, person would have co-operated in obtaining the bank statements.
In the present case also, the assessee is not co-operating in obtaining bank statement and without the bank statement being obtained from overseas i.e. HSBC bank, Geneva, Switzerland, no fruitful purpose will be served by restoring the matter back to the file of the AO for fresh decision in line with the Tribunal order on which reliance has been placed by the ld. AR of the assessee having been rendered in the case of Shyam Sunder Jindal Vs ACIT (Supra). In that case, the judgment of the Hon’ble Bombay High Court rendered in the case of Soignee R Kothari (Supra) on which reliance has been placed by the revenue in the present case was not brought to the notice of the Tribunal and therefore, this fact is very important that in the present case, a specific finding is given by the ld. CIT that the assessee is not giving consent letter for obtaining bank statement and before us also, in spite of specific query from the Bench, the ld. AR of the assessee did not agree for providing the consent of the assessee required for obtaining information about the bank account in HSBC, Geneva. Therefore, in the facts of the present case, by respectfully following the judgment of the Hon’ble Bombay High Court, we hold that no fruitful purpose will be served by restoring the matter back to the file of the AO, particularly, when the assessee is not agreeing to give consent for obtaining bank statements from HSBC, Geneva. Therefore, this is a fit case to draw inference against the assessee by respectfully following the judgment of the Hon’ble Bombay High Court rendered in the case of Soignee R Kothari (Supra). In view of difference in facts, as per which in spite of specific request of the department and in spite of query of the Bench in the course of hearing, the assessee is not ready to provide consent for obtaining bank statements from HSBC, Geneva, Switzerland, we hold that this Tribunal order is not required to be followed in the present case, in view of this difference in facts because it will not serve any fruitful purpose.
In view of above discussion, it comes out that none of the judgments cited by the learned AR of the assessee is rendering any help to the assesseev in the present case. We also find that as per the judgment of the Hon’ble Bombay High Court rendered in the case of Soignee R Kothari (Supra), asdverse inference has to be drawn against the assessee because the assessee is not ready to provide consent to get bank statement from overseas bank. Hence, we decline to interfere in the order of CIT (A) in both these cases.
In the result, both the appeals of the assessee are dismissed.
Order pronounced in the open court on the date mentioned on the caption page.