High Court Of Madhya Pradesh : Indore Bench
Manish Maheshwari vs. Income Tax Appellate Tribunal
Section 158BC, 158BD, 260A
Asst. Year 1986-87 to 20th Nov., 1995
A.M. Sapre & Ashok Kumar Tiwari, JJ.
IT Appeal No. 60 of 1999
28th September, 2004
Counsel Appeared :
G.M. Chafekar with Sarda, for the Appellant : None, for the Respondent
ORDER
A.M. Aapre, J. :
This is an appeal filed by the assessee under s. 260A of the IT Act against an order dt. 23rd April, 1999, passed by Tribunal in IT(SS)A No. 61/Ind/1996.
2. At the outset it may be stated that this appeal was entertained by this Court on 8th March, 2000 by passing following order : “8th March, 2000 Shri H.C. Sarda, learned counsel for the appellant. Heard on admission. Admit. Issue notice to other side on payment of P.F. within a week. R.D. Vyas, J. Shambhoo Singh J.”
Under s. 260A of the Act, the appeal can be admitted for final hearing only when it involves any substantial question of law. Sub-s. (3) then obliges the High Court to formulate substantial question of law which, in the opinion of High Court, is involved. Sub-s. (4) then empowers the High Court to hear and decide the appeal only on the question so formulated. Proviso to sub-s. (4) enables the High Court to decide the appeal, on reasons to be recorded, on that question not initially framed provided High Court is satisfied that such question does arise and/or (is) involved in the case. As stated supra, what we find from the order dt. 8th March, 2000 that no such power seems to have been exercised by the Court while entertaining the appeal and directing issuance of notice to other side. In other words, the order-sheet dt. 8th March, 2000 does not indicate nor any order-sheet subsequent thereto that any substantial question of law is formulated and/or framed to enable this Court to hear and decide the appeal finally. Even the appellant has not made any attempt by making any application requesting this Court to either formulate/frame the question for hearing of the appeal. Since, none has appeared for the other side despite service, we do not have any assistance for and on behalf of respondent. It is with this background we are called upon to hear and decide the appeal which may be taken to be either hearing at its first instance with a view to find out whether appeal involves any substantial question of law within the meaning of s. 260A of the Act and, if it involves, then which is that question which is involved and wrongly decided by the Tribunal. We thus propose to do both the exercise lest it may be urged by the learned counsel for the assessee that full arguments were not heard despite the appeal being “admitted for hearing” though defectively and de hors the provisions of s. 260A ibid.
In substance, the question that was raised by the appellant (assessee) in this matter was, whether AO erred in making assessment of assessee under s. 158BC of the Act when there was no search on assessee under s. 132 of the Act, nor any Panchanama was prepared ? It is not in dispute that there was a raid at the residence of parents of assessee on 21st Nov., 1995. It is also not in dispute that assessee lives in the same house. It is in this search operation that was carried out by the income-tax sleuths, certain shares were recovered. According to assessee some shares belongs to him out of total lot recovered. The appellant was assessed under s. 158BC r/w s. 143 of the Act for the block period from asst. yr. 1986-87 to 20th Nov., 1995. It is in this order of assessment, the aforesaid question was sought to be raised by the assessee before the Tribunal. As stated supra, the Tribunal while repelling the objection raised by the assessee upheld the assessment made. The Tribunal while overruling the objection and answering the question in favour of the Revenue placed reliance on law laid down by Gujarat High Court in the case of Khandhubhai Vasanji Desai vs. Dy. CIT (1998) 150 CTR (Guj) 577 : (1999) 236 ITR 73 (Guj). This is what is held by Gujarat High Court while dealing with this very issue raised by assessee : “This provision indicates that where the AO, who is seized of the matter and has jurisdiction over the person other than the person with respect to whom search was made under s. 132 or whose books of account or other documents or any assets were requisitioned under s. 132A, he shall proceed against such other person as per the provisions of Chapter XIV-B which would mean that on such satisfaction being reached that any undisclosed income belongs to such other person, he must proceed to serve a notice to such other person as per the provisions of s. 158BC of the Act. If the AO who is seized of the matter against the raided person reaches such satisfaction that any undisclosed income belongs to such other person over whom he has no jurisdiction, then, in that event, he has to submit the material to the AO who has jurisdiction will proceed against such other person by issuing the requisite notice contemplated by s. 158BC of the Act.”After placing reliance on the aforesaid principle of law, the Tribunal recorded following finding in favour of Revenue : “The above interpretation and enunciation of the principles of law embedded in s. 158BD amply suggests that the action of the AO in issuing a notice under s. 158BC and framing the assessment under the said section is in accordance with the law and perfectly valid. The various decisions relied upon by the learned counsel for the assessee to assail the issue of notice to the assessee under s. 158BC and consequential assessment under s. 158BC, in the facts and circumstances of the assessee’s case do not render any assistance to the assessee. We, therefore, decide this ground against the assessee and hold that the assessment was framed under the correct provisions of law.” We respectfully concur with the view taken by Gujarat High Court in the case of Khandhubhai (supra) as it is based on correct interpretation of s. 158BC r/w s. 158BD. In other words, no flaw can be noticed in the impugned assessment made on assessee for the block period in question by AO. Submission of learned counsel for the appellant (assessee) that the appellant had the time left for filing return and hence, no proceedings under the special provision could be taken is not acceptable in view of principle of law laid down in the case of Khandhubhai (supra). In view of aforesaid, we notice that the appeal has no substance whether we take it to be a hearing prior to admission or after admission because the question posed which could be held to be question of law then it has to be answered against an assessee. So in either event, the appeal is held to be devoid of substance. It fails and is hereby dismissed. No costs.
[Citation : 289 ITR 324]
