Miscellaneous Appeal No.579 of 2007 Against the order dated 27.7.2007, passed in IT (SS)A Nos. 29 (Pat) of 2004 analogous with IT (SS) A No. 40(Pat) of 2004, passed by the Income Tax Appellate Tribunal, Patna Bench, Patna. Arun Kumar Agarwal, Son of Late Bhuth Nath Agrawal, R/o Shanti Kunj, Mohalla Chhajubagh, PS Kotwali, Distt. Patna .................... ..............Appellant Versus Commissioner of Income Tax, Central Circle, Patna .... .... Respondent with Miscellaneous Appeal No. 578 of 2007 Against the order dated 6.7.2007, passed in IT (SS)A Nos. 28 (Pat) of 2004 analogous with IT (SS) A No. 39(Pat) of 2004, passed by the Income Tax Appellate Tribunal, Patna Bench, Patna. Bina Agarwal, W/o A K Agrawal, R/o 202, Shanti Shanti Kunj, Mohalla Chhajubagh, PS Kotwali, Distt. Patna .... .... Appellant Versus Commissioner of Income Tax, Central Circle, Patna .... .... Respondent For the Appellant : Mr. K N Jain, Sr.Advocate For the Respondents : Mr. Rishi Raj Sinha. P R E S E N T HON’BLE MR. JUSTICE SUDHIR KUMAR KATRIAR and HON’BLE MR. JUSTICE AHSANUDDIN AMANULLAH S K KATRIAR, J. These are appeals under section 260A of the Income Tax Act, 1961 (hereinafter referred to as `the Act’). The appellants of the two appeals are husband and wife, are engaged in the same and/or overlapping business, and raise common issues of law. There are minor variations of facts with respect to the two appeals which would be indicated separately, if needed. Both the appeals 2 relate to block assessment for the period AY 1991-1992 to 2000 - 2001 (upto August 30.8.2001), under the provisions of section 158 BC of the Act. 2. The appellants have framed the following substantial questions of law for our consideration in the two appeals:- 1. Whether on the admitted facts and circumstances of the case and the materials on record the impugned assessment order dated 29.8.2002 is barred by limitation u/s 158BE of the Income Tax Act 1961 and consequently illegal, unauthorized and without the sanction of law and fit to be set aside? 2. Whether when the income derived from the various assets have been duly declared in the regular returns, the related assets thereto also stand disclosed, particularly because there is neither any specific provision nor any column in the prescribed return form requiring for their specific disclosure as such? 3. Whether the investments made in the aforesaid assets can be considered to represent undisclosed income within the meaning of sec. 158B(b) and if not can the unexplained amount be assessed only under the normal procedure prescribed u/s 143(3) and not under the special procedure prescribed u/s 158BC of the Act? 3. M A No. 579 of 2007 There was a search and seizure of the common residence and business premises of the two appellants on 28.6.2000, which concluded with search and seizure of the bank locker in their joint names on 30.8.2000. The appellant had submitted his returns. On a consideration of the entire materials on record, the learned Assistant Commissioner of Income Tax, Patna, being the Assessing Officer, passed order of assessment on 29.8.2002, whereby he assessed the appellant to tax. Aggrieved by the order of the learned 3 Assessing Officer, the appellant preferred appeal before the learned Commissioner of Income Tax (Appeals), Patna, which was disposed of by order dt. 20.1.2004, whereby certain reliefs were granted to the appellant, and certain additions were also made. Aggrieved by this order, the appellant as well as the Revenue preferred separate appeals before the learned Income Tax Appellate Tribunal, Patna Bench, which were disposed of by a common order dated 27.7.2007, whereby the appeal filed by the assessee was dismissed, and that of the Revenue was allowed in part. Aggrieved by the order of the learned Tribunal, the assessee has preferred the present appeal under the provisions of Section 260A of the Act, and impugned herein. 4. While assailing the validity of the impugned order, learned counsel for the appellant submits that if 28.6.2000 is taken to be last date of search, then the order of assessment is hit by the bar of limitation engrafted in Section 158 BE (1)(b) of the Act. He relies on the judgment of Allahabad High Court in C I T vs. Vandana Verma (2011) 330 ITR 533 (paras 37 and 38). An order under Section 158 BC of the Act has to be passed within a period of two years from the date of search and seizure as contemplated by Section 158 BE(1)(b) of the Act. He relies on a Division Bench judgment dated 25.10.2007 of the Delhi High Court in C I T vs. Rajhans Aromatics (2011) 336 ITR 68 (paras 2 and 6), and against which leave to appeal was rejected by the Supreme Court by order dated 29.10.2010, passed in SLP(Civil) No.31207 of 2000, reported in 2000 ITR 334 Page 1 (Statutes). He next submits that if the order 4 of assessment is hit by the bar of limitation, then the order on merits is of no effect. He relies on the following reported judgments:- (i) Pandurang vs. Maruti, AIR 1966 SC 153 (Para 10) (ii)C I T vs. Escorts Pvt. Ltd., 1989 Vol.180 ITR 280 He submits in the same vein that a mandatory provision of law cannot be waived or overlooked. He relies on the judgment in Dhirendra Nath vs. Sudhir Chandra, AIR 1964 SC 1300 (Para 6). He also submits that the question of jurisdiction can be raised at any stage. He relies on the judgment of a Division Bench of the Bombay High Court in Inventors Industrial Corporation Ltd. vs. C I T, (1992) 194 ITR 548. He submits that the question of limitation is a substantial question of law. He relies on the judgment of the Supreme Court in Santosh Hazari v. Purushottam Tiwari, (2001) 251 ITR 84 (paras 90 and 92). He next submits that the three items dealt with by the learning Assessing Officer on facts, namely, cash amount, unexplained amount, and unexplained income in cash were already disclosed in the returns. The same can, therefore, be considered in regular proceedings and not in block period assessment. He relies on a Division Bench judgment of the Delhi High Court in CIT vs. Bluechip Construction Company, (2007) 213 CTR 530. He lastly submits that the learned Tribunal has erred in deciding adversely on the question of FDR in the name of two daughters of the appellant from the first wife. The power of assessment is of the learned Assessing Officer, and the learned appellate authority cannot trace a new source of income for 5 assessment. The same was indeed a gift from the grand-father and, therefore, the appellant cannot be held liable. 5. Learned counsel for the respondents has supported the impugned order. He submits that the search had started on 28.6.2000, and concluded on 30.8.2000. The period of two years in terms of Section 158 BE(1)(b), commenced on 30.8.2000. The order was passed within two years from the date of execution of the last authorization. He relies on the judgment of a Division Bench of the Delhi High Court in CIT vs. S K Katyal, (2009) 308 ITR 168. He next submits that the issues are concluded by findings of fact. He relies on the following reported judgments:- (i) Judgment of the Supreme Court in K R Nair vs. CIT, (2001) 247 ITR 178 (ii) Judgment of a Division Bench of the Madhya Pradesh High Court in CIT vs. Vippy Solvex Products Ltd. (2005) 274 ITR 615 (iii) Judgment of a Division Bench of J & K High Court in Sudesh Kumar vs. CIT, (1975) 101 ITR 865. He further submits that there is a presumption about search and seizure in terms of Section 292C of the Act that the document belongs to the person in whose premises it was seized. The FDRs in the name of the two daughters were found during the course of search and seizure, and the question as to who is the donor is essentially a question of fact. He submits in the same vein that Section 158 BH is applicable. He submits that investments made in construction is a question of fact. He relies on the judgment of the Division Bench of the Allahabad High Court in CIT vs. Sudarshan Dass Bhasin, (1993) 199 ITR 564. He further submits that the addition under Section 69 of the Act on the basis of estimation is a 6 question of fact. He relies on the judgment of the Division Bench of the Allahabad High Court in Anjani Alankar Mandir vs. CIT, (1988) 172 ITR 67. He also relies on the following reported judgments:- (i) M Janardhana Rao vs. CIT, (2005) 2 SCC 324 (ii) Division Bench judgment of this court in Dy. Commissioner vs. Sulabh International Social Organization, 2011 (3) BBCJ 117 (iii) Sudesh Kumar vs. CIT (1975) 101 ITR 865 6. Learned counsel for the appellant has in reply submitted that the findings of facts bind this Court in appeal under Section 268 of the Act, except perverse findings of fact. He relies on the judgment of Deputy Commissioner vs. Sulabh International Social Organization (supra) (para 7). 7. We have perused the materials on record and considered the submissions of the learned counsel for the parties. It is evident on a perusal of the materials on record that the search and seizure had commenced on 28.6.2000, in the joint office and residential premises of the two appellants, and had concluded on 30.8.2000 on which date the joint locker of the two appellants was searched. The learned Assessing Officer passed the order of assessment on 29.8.2002, which is obviously within a period of two years from date of the last requisition and execution of the authorization thereof in terms of Section 158BE(1)(b) of the Act. The position is so evident in view of the facts on record that it does not admit of any argument, nor the support of a precedent. The elaborate and wholly irrelevant arguments on behalf of the appellant is without any substance at all. The contention on behalf 7 of the appellant on the ground of limitation is rejected. 8. Learned counsel for the respondents is right in his submission that facts have been examined in detail by the learned three authorities under the Act. In fact, such close has been the application of the mind on issues of facts that the learned appellate authority made variations in the order of the learned Assessing Officer on facts giving rise two appeals before the learned Tribunal – one at the instance of the assessee, and the other one at the instance of the Revenue. The learned Tribunal examined the issues of facts very closely, rejected the appeal of the assessee, and allowed that of the Revenue. Indeed the issues are concluded by findings of facts. Except minor variation of findings of facts, most of the findings are common to the orders by the learned three authorities under the Act. The hair-splitting arguments before us by the learned counsel for the appellant on facts could have been advanced before the learned assessing officer and are least fit to be advanced in an appeal under Section 260A of the Act. 9. The scope of Section 260A of the Act has been the subject matter of a large number of authoritative pronouncements of the Supreme Court, and followed by various High Courts. Reference may be made to the Division Bench judgment of this Court to which one of us (S.K. Katriar, J.) was a party, in Deputy Commissioner vs. Sulabh International Social Organization (supra). Relying on the judgment of the Supreme Court in M. Janardhana Rao vs. CIT (supra), this Court held that an appeal under Section 260A of the Act shall lie before this Court only if it raises a 8 substantial question of law. This Court had also taken the opportunity to examine the authoritative pronouncements of the Supreme Court as to the scope and ambit of Section 260A of the Act read with Section 100 of the Code of Civil Procedure. Appeals under both the provisions would be maintainable only if it raises a substantial question of law which has acquired a definite connotation by judicial pronouncements. Furthermore, Second Appeal under Section 100 of the Code of Civil Procedure is the third forum for the appellant, whereas appeal under Section 260A of the Act is the fourth forum for the appellant. 10. In view of the discussions in the orders of the learned authorities under the Act, we are of the view that the issues are concluded by findings of facts, and no question of law, much less a substantial question of law, arises in the present appeal. Learned counsel for the respondent has rightly relied on the judgment of the Division Bench of the Madhya Pradesh High Court in CIT vs. Dr. Ashok Jain, (2005) 275 ITR 350, wherein it has been held that “.......it is only when the factual finding is entirely de hors the subject, or it is based on no reasoning, or it is absurd to the extent that no reasonable prudent man can ever reach such conclusion, or it is against the provision of law, that a case for substantial question of law is made out....” It would bear repetition to state that the discussion on the issues of fact in the orders of the three learned authorities under the Act are very well discussed, and are valid findings of facts. No ground for interference is made out. MA No.579 of 2007 is hereby dismissed. 9 11. MA No.578 of 2007 The department had conducted common search and seizure in the joint office and residential premises of the aforesaid Arun Kumar Agrawal and Smt. Bina Agrawal, who are husband and wife. The search and seizure had commenced on 28.6.2000, and had concluded with the search and seizure of the locker in their joint names on 30.8.2000. The learned Assessing Officer passed the order of assessment on 29.8.2002, for the block period A/Y 1991- 1992, till the date of search on 30.8.2000. Aggrieved by this order, Smt. Bina Agrawal preferred appeal before the learned Commissioner of Income Tax (Appeals), Patna, who allowed the appeal in part, and substantially dismissed the same by order dated 20th January 2004. The order of the learned Assessing Officer was substantially upheld, and certain additions were made by him. Aggrieved by this order, the appellant and the Revenue filed separate appeals which have been dismissed by a common order dated 6.7.2007, passed by the learned Tribunal, and impugned herein. 12. Except variation of minor facts which are of no consequence in disposal of this appeal, the basic facts in this appeal are in common with that of M.A.no.579 of 2007. The present appeal is entirely covered by the aforesaid order in M.A.no.579 of 2007. There is no merit in this appeal. M.A.no. 578 of 2007 is accordingly dismissed. 13. In the result, MA No.579 of 2007, and MA No.578 of 2007, are dismissed. The substantial questions of law are answered 10 against the appellants, and in favour of the Revenue. In the circumstances of the case, there shall be no order as to costs. ( S K Katriar, J.) Ahsanuddin Amanullah, J. I agree. ( Ahsanuddin Amanullah, J. ) Patna High Court, Patna The 30th of August 2011 AFR/mrl