Hari Poddar v. The Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 23.04.2021 CORAM THE HON'BLE MR.JUSTICE M. DURAISWAMYANDTHE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY Tax Case Appeal Nos.877 to 879 of 2017andC.M.P.Nos.22355 & 22357 of 2017 Hari Poddar32, Ottukkaa Chinniah StreetErode – 638 003Chennai – 600 004. ...Appellant in all appealsVs. The Assistant Commissioner of Income Tax Central Circle-IVCoimbatore. ... Respondent in all appeals Tax Case Appeals in T.C.A.Nos.877 to 879 of 2017 filedunder Section 260A of the Income Tax Act, 1961 against the orderof the Income Tax Appellate Tribunal, Chennai "A" Bench, dated24.05.2017 passed in I.T.(SS) A.No.166/Mds/2005, I.T.(SS)A.No.171/Mds/2005 and C.O. No.38/Mds/2006 in I.T.(SS)A.No.171/Mds/2005 respectively, against the Common appellateorder passed by the Commissioner of Income Tax (A)-II, dated31/08/2005 in I.T.A Nos.325-C/04-05, 326-C/04-05, 327-C/04-05and against the Assessment order passed by the AssistantCommissioner of Income Tax Central Circle-IV, Coimbatore, dated21/10/2004 made in PAN/GIR No. for the Block Period of1997-1998 to 2003-2004. For Appellant : Mr.R.Venkata Narayanan(in all) for M/s.Subbaraya Aiyar Padmanabhan in all appealsFor Respondent : Mr.T.R.Senthil Kumar(in all)Senior Standing Counsel and Mrs.K.G.Usha Rani Junior Standing Counsel in all appeals C O M M O N J U D G M E N T (Delivered by M.DURAISWAMY, J.) The above appeals filed by the assessee under Section 260Aof the Income Tax Act, 1961 ('the Act' for brevity), aredirected against the order dated 24.05.2017 passed by the IncomeTax Appellate Tribunal, Chennai "A" Bench, ('the Tribunal' forbrevity)inI.T.(SS)A.No.166/Mds/2005,I.T.(SS)A.No.171/Mds/2005 and C.O. No.38/Mds/2006 in I.T.(SS)A.No.171/Mds/2005 for the Block Period 1997-98 to 2003-04 (upto08.08.2002). The appellant/assessee has raised the followingsubstantial questions of law in the above appeals: “T.C.A.No.877 of 2017 : 1.Whether the Income Tax Appellate Tribunal wasright in law in holding that the block assessmentorder passed on 21.10.2004 is within time limit asprescribed in Explanation 2 to Section 158BE(1)(b) ofthe Income Tax Act 1961 without appreciating that thelast Panchanama in respect of execution of relevantwarrant of authorization was drawn on 08.08.2002 andnot on 03.10.2002? 2.Whether the Tribunal was right in law infollowing the Judgment in the case of VLS Finance Ltd.Vs CIT [384 ITR 1 (SC)] which has no application tothe facts of the present case? 3.Whether the Tribunal was right in law inholding that block assessment is not barred bylimitation without appreciating that in the presentcase, there was no subsequent search at all and onlyPanchanamas were prepared subsequently and that too,regarding the lifting of prohibitory orders? 4.Whether the Income Tax Appellate Tribunal wasright in law in holding that the Panchanama drawn on01.10.2002 ( in the case of Hari Poddar the lastPanchanama was drawn on 3.10.2002) in respect of allthree assessees consequent to physical seizure of thehard disk on the basis of the main warrant issued bythe D.I.T Chennai has to be treated as Last Panchanamaand therefore the assessment order passed on21.10.2004 were within two years from the end of themonth in which the last Panchanama was drawn.? 5.Whether the Tribunal was right in law inholding that the last Panchanama was drawn in relationto the appellant on 03.10.2002 and thereby upholdingthe block assessment without deciding on the legalityof the conclusion of search with reference to thePanchanama dated 03.10.2002 ? 6.Whether the Income Tax Appellate Tribunal wasright in law in sustaining the addition towardsundisclosed turnover in the absence of anyincriminating material or evidence found as a resultof the search? T.C.A.Nos.878 and 879 of 2017 : 5.Whether the Tribunal was right in law inholding that the last Panchanama was drawn in relationto the appellant on 03.10.2002 and thereby upholdingthe block assessment without deciding on the legalityof the conclusion of search with reference to thePanchanama dated 03.10.2002 ? 6.Whether the Income Tax Appellate Tribunal wasright in law in sustaining the addition towardsundisclosed turnover in the absence of anyincriminating material or evidence found as a resultof the search? T.C.A.Nos.878 and 879 of 2017 : 1.Whether the Income Tax Appellate Tribunal wasright in law in sustaining the addition towardsundisclosed turnover in excess of Rs.22 crores in theabsence of any incriminating material or evidencefound as a result of the search? 2.Whether the Tribunal was right in law inrestoring the addition of Rs.33.89 Lakhs asunexplained cash credits under Section 68 of the Actwithout appreciating that this amount was recorded inthe books of account regularly maintained by theappellant and that these amounts were received fromthe parties for supply of goods? 3.Whether the Tribunal was right in law inrestoring the addition of Rs.24,44,835/- on account ofunaccounted purchases without appreciating the factthat this amount was received from the parties forsupply of goods and hence it could not be treated ascash credit for the purpose of Section 68 of theIncome Tax Act 1961. 4.Whether the Income Tax Appellate Tribunal wasright in law in restoring the addition of Rs.1.80Crores made on account of unaccounted purchaseswithout appreciating that this amount was alreadyconsidered as undisclosed turnover of Rs.22 crores ofthe appellant? 5.Whether the Tribunal was right in law inholding that u/s.68 of the Act entire unexplainedcredit to be considered as income of the assessee andthere is no question of estimation of GP on https://hcservices.ecourts.gov.in/hcservices/ unexplained credit so as to determine the undisclosedincome.” 2. We have heard Mr.R.Venkata Narayanan for M/s.SubbarayaAiyar Padmanabhan, learned counsel for the appellant/ assesseeand Mr.T.R.Senthil Kumar, learned Senior Standing Counsel andMrs.K.G.Usha Rani, learned Standing Counsel for therespondent/Revenue. 3. It may not be necessary for this Court to decide theSubstantial Questions of Law framed for consideration on accountof certain subsequent developments. The Government of Indiaenacted the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3 of2020) to provide for resolution of disputed tax and for mattersconnected therewith or incidental thereto. The Act of theParliament received the assent of the President on 17[th] March2020 and published in the Gazette of India on 17[th] March 2020. 4. We are informed by the learned counsel for the appellant/assessee that the assessee had already been issued with Form-3on 29.03.2021 and the learned counsel for the appellant seekspermission of this Court to withdraw the above appeals. 5. In view of the submission made by the learned counsel forthe appellant/assessee, the above Tax Case Appeals standdismissed as withdrawn. No costs. Consequently, connectedmiscellaneous petitions are closed. Sd/- Assistant Registrar(CS IV) //True Copy// Sub Assistant Registrar mkn To 1. The Income Tax Appellate Tribunal, Chennai "A" Bench, Chennai. 2.The Assistant Commissioner of Income Tax Central Circle-IV Coimbatore. Central Circle-IV Coimbatore. https://hcservices.ecourts.gov.in/hcservices/ 3.The Commissioner of Income Tax (A)-II, Coimbatore. Coimbatore. +1cc to Mr.T.R.Senthilkumar, Advocate Sr.25240 Tax Case Appeal Nos.877 to 879 of 2017 ev[co]srg 29/06/2021