Commissioner Of Income Tax-Ii, Aaykar Bhawan, Jodhpur v. Shri Rameshwar Lal Soni

HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR D.B. Income Tax Appeal No. 34 / 2007 Commissioner of Income Tax-II, Aaykar Bhawan, Jodhpur. ----Appellant Versus Shri Rameshwar Lal Soni S/o Late Sh. Mangi Lal Soni, 22-A,Anand Mangal, Hanuwant Vihar Colony, Rai-Ka-Bagh, Jodhpur. ----Respondent Connected With D.B.CIV.CROS.OBJ.IT APP No. 1 / 2010 Shri Rameshwar Lal Soni S/o Late Shri Mangilal Soni, 22-A, AnandMangal, Hanuwant Vihar Colony, Rai Ka Bagh, Jodhpur. ----Petitioner Versus Commissioner of Income Tax-II, Aaykar Bhawan, Jodhpur. ----Respondent _____________________________________________________ For Appellant(s) : Mr. Sunil Bhandari for the Department.For Respondent(s) : Mr. Anjay Kothari for the Assessee. _____________________________________________________ HON'BLE THE ACTING CHIEF JUSTICE HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATIOrder 07/03/2017 1.By way of this appeal, the appellant has challenged theimpugned judgment and order of the Tribunal allowing the appealpreferred by the assessee and dismissing the appeal preferred bythe Department against the order of CIT(A). 2.This Court while admitting the appeal on 25.07.2007framed the following substantial question of law:- (a) Whether on the facts and in the circumstances ofthe case, the learned ITAT was legally justified indismissing the appeal filed by the Revenue ignoringthe fact that the additions made by the AO werebased on the documentary evidence and declarationmade by the assessee during the course of searchoperation within the meaning of section 132(4) of theAct which were of utmost evidentiary value? (b) Whether on the facts and in the circumstances of the case, the learned ITAT was legally justified inaccepting and relying on the receipt and paymentaccount and financial statement etc. produced by theassessee which were prepared after the searchoperations and as such they were nothing but self-serving documents? (c) Whether on the facts and in the circumstances ofthe case, the learned ITAT was legally justified inallowing benefit of telescoping/set off without properlytaking into account the facts and circumstances of the case and appreciating the law applicable? 3.Counsel for the appellant has specifically contended that thethird member while deciding the matter on the ground oflimitation under Section 158 BD has committed serious error inappeal before the CIT(A) itself was not competent. In that view ofthe matter, the matter is required to be remitted back to theTribunal where both the sides should be allowed to raise all contentions and the matter may be remitted back to the tribunal. 4.It is further contended that in the considered opinion ofDepartment, limitation of two years would apply and not of oneyear. It is further contended that in view of such contention wasnot raised before the CIT(A), such contention ought not to havebeen allowed before the third member for limitation. Therefore,the contention that the search which was made 03.01.1997, theamended provision will apply and appeal will be competent beforethe Tribunal, which he has not preferred and when he hasapproached the tribunal, the case became time barred andtherefore, the assessment order has attained finality. contentions and the matter may be remitted back to the tribunal. 4.It is further contended that in the considered opinion ofDepartment, limitation of two years would apply and not of oneyear. It is further contended that in view of such contention wasnot raised before the CIT(A), such contention ought not to havebeen allowed before the third member for limitation. Therefore,the contention that the search which was made 03.01.1997, theamended provision will apply and appeal will be competent beforethe Tribunal, which he has not preferred and when he hasapproached the tribunal, the case became time barred andtherefore, the assessment order has attained finality. 5.Counsel for the respondent has contended that thematter is squarely covered by the decision of the Division Bench ofthis Court in Income Tax Appeal No.49/2003 (Commissionerof Income Tax, Jaipur-II, Jaipur Vs. M/s.Somani Industries,A-85, Road NO.9, VKI Area, Jaipur decided on 03.01.2017)and decision of Gujarat High Court in Chetnaben J Shah LegalHeir of Jagdishchandra K. Shah Vs. Income Tax Officer,reported in (2016) 288 CTR 0579 (Guj.), wherein one of us(Hon’ble the Acting Chief Justice Mr. K.S. Jhaveri) was party andhas already taken a view that limitation of one year would applyand the assessment beyond the same will be barred by limitation.With regard to the cross objection, counsel for the respondent hasplaced reliance on Commissioner of Income Tax Vs. MangilalRameshwar Lal, reported in (2008) 214 CTR (Raj.) 696. 6.We have heard Mr. Sunil Bhandari, counsel for the appellant. 7.Taking into consideration the aforesaid two judgmentsof this Court as well as Gujarat High Court, we are of theconsidered opinion that the limitation will start from 03.01.1997and assessment is beyond one year. In that view of the matter,the contention that the appeal is required to be preferred beforethe Tribunal and such contention was not raised before the thirdmember and limitation issue is a mixed question of law and factscan be raised any time. 8.In that view of the matter, the appeal deserves to beand is hereby dismissed. The issue of limitation is answered infavour of the assessee in the cross objection and against thedepartment. (DR. PUSHPENDRA SINGH BHATI)J. (K.S. JHAVERI)ACTING C.J. Skant/-