Binani Industries Ltd., Kolkata V. ACIT, C.C - XXVIII, Kolkata

CO 132/KOL/2008

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 9091 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 10 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-11-2013
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 24-03-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 10-11-2009
• Court: TRIBUNAL
• Department Lawyers: K BISWAS; A SONDE V MEHTA
• Assessee Lawyers: DR SWETABH SUMAN
• Keywords: Period of limitation; Initiation of penalty proceedings; Assessment record
• Section: 143(3)

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND . . . . ''# ''# ''# ''#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 1420/KOL/2008 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2002-03 ASSISTANT COMMISSIONER OF INCOME-TAX, VS. BINANI I NDUSTRIES LTD. CENTRAL CIRCLE-XXVIII, KOLKATA. (PAN: AABCB0979M) (,- /APPELLANT ) (./,-/ RESPONDENT ) & C.O. NO.132/KOL/2008 IN & & & & / I.T.A NO. 1420/KOL/208 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2002-03 BINANI INDUSTRIES LTD. VS. ASSISTANT COMMISSION ER OF INCOME-TAX, CENTRAL CIRCLE-XXVIII, KOLKATA (CROSS OBJECTOR) (RESPONDENT) DATE OF HEARING : 19.11.2013 DATE OF PRONOUNCEMENT: 21.11.2013 FOR THE APPELLANT: DR. SWETABH SUMAN, CIT FOR THE RESPONDENT: S/SHRI A. SONDE, V. MEHTA & K. BISWAS $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE AND CROSS OBJECTION BY ASSES SEE ARE ARISING OUT OF ORDER OF CIT(A), CENTRAL-1, KOLKATA IN APPEAL NO. 86/CC-XXVI II/CIT(A),C-1/05-06 DATED 14.05.2008. ASSESSMENT WAS FRAMED BY ACIT, CC-XXVIII, KOLKATA U /S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASS ESSMENT YEAR 2002-03 VIDE HIS ORDER DATED 31.03.2005. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SHRI ARVIND SONDE MADE A MENTION THAT IN THE CROSS OBJECTION OF THE ASSESSEE THERE IS A JURI SDICTIONAL ISSUE, WHICH NEEDS TO BE DEALT WITH AT THE FIRST INSTANCE. HENCE, WE HEAR THE CROSS OB JECTION FIRST. THE ONLY ISSUE IN THE CROSS OBJECTION OF THE ASSESSEE IS THAT THE ASSESSMENT OR DER PASSED BY THE AO IS BARRED BY LIMITATION AND FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.1: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN NOT HOLDING THAT THE ASSESSMENT ORDER PASSED BY THE ASS ESSING OFFICER IS BAD IN LAW AS IT IS BARRED BY THE LIMITATION. 2 ITA NO. 1420/K/2008 & CO 132/K/2008 BINANI INDUSTRIES LTD.., AY: 2002-03 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE FIRS T OF ALL DREW OUT ATTENTION TO THE ASSESSMENT ORDER, WHICH IS DATED 31.03.2005 AND THE RELEVANT ASSESSMENT YEAR INVOLVED IS 2002- 03. HE STATED THAT THIS ASSESSMENT ORDER WAS SERVE D ON ASSESSEE BY HAND ON 13.04.2005. ACCORDING TO LD. COUNSEL, THE ASSESSMENT WAS NOT FR AMED AS ON 31.03.2005 BECAUSE IT DID NOT LEFT THE CONTROL OF THE OFFICER TILL THE DATE OF SE RVICE ON THE ASSESSEE BY HAND AS ON 13.04.2005. ACCORDING TO HIM, THE ASSESSMENT IS BARRED BY LIMIT ATION. THIS GROUND WAS RAISED BEFORE CIT(A) AND HE DISMISSED THIS GROUND BY OBSERVING IN PARA 3.2 OF HIS APPELLATE ORDER AS UNDER: 3.2. THE ALLEGATION ABOUT THE ASSESSMENT ORDER PAS SED BEYOND THE PERIOD OF LIMITATION WAS EXAMINED BY CALLING FOR THE ASSESSME NT RECORD FOR PROOF OF SERVICE OF THE ASSESSMENT ORDER. THOUGH THE PROOF OF SERVI CE OF THE NOTICE FOR INITIATION OF PENALTY PROCEEDINGS WAS ON RECORD, THE PROOF OF SER VICE OF ASSESSMENT ORDER WAS NOT. BUT IN MY OPINION THERE IS A DIFFERENCE BETWE EN PASSING THE ASSESSMENT ORDER AND ITS SERVICE: WHILE THE FIRST SHOULD BE COMPLETE D BEFORE THE END OF THE YEAR, THE SECOND CAN BE DONE WITHIN REASONABLE TIME THEREAFTE R. SERVICE OF THE ORDER ON 13.04.05 DOES NOT PROVE THAT THE ORDER WAS NOT PASS ED ON 31.3.05. IN MY OPINION, THE FIRST GROUND OF APPEAL MUST BE DISMISSED. WHEN THIS WAS POINTED OUT TO LD. SR. COUNSEL SHRI A . SONDE, HE FILED AN AFFIDAVIT OF LOCAL REPRESENTATIVE OF BINANI GROUP OF INDUSTRIES LTD., WHICH READS AS UNDER: I, SUSHIL MUNDHRA AGED ABOUT 66 YEARS, RESIDING A T P-63, BLOCK A, 4 TH FLOOR, BANGUR AVENUE, KOLKATA-700055 DO HEREBY SOLE MNLY AFFIRM AND DECLARE ON OATH AS UNDER: THAT, I LOCALLY REPRESENTING BINANI GROUP OF COMPA NIES IN KOLKATA. I SAY THAT I HAVE RECEIVED THE ASSESSMENT ORDER U/ S. 143(3) OF THE ACT IN THE CASE OF M/S. BINANI INDUSTRIES LIMITED FOR AY 2002- 03 DATED 31.03.2005 THROUGH HAND DELIVERY ON 13.04.2005. I SAY THAT THIS ORDER WAS SERVED UPON ME ON 13.04. 2005, WHEN I VISITED THE OFFICE OF THE INCOME TAX DEPARTMENT PODDAR COURT CE NTRAL CIRCLE XXVIII, KOLKATA AT 18, RABINDRA SARANI, PODDAR COURT 5 TH FLOOR, KOLKATA-700001. I SAY THAT WHAT IS MENTIONED ABOVE IS TRUE TO THE B EST OF MY KNOWLEDGE. SOLEMNLY AFFIRMED AT KOLKATA SD/- SUSHIL MUNDRA THIS 18 TH DAY OF NOVEMBER 2013 4. THIS AFFIDAVIT WAS CONFRONTED TO LD. CIT, DR SH RI S. SUMAN AND HE WAS ASKED TO PRODUCE ASSESSMENT RECORDS, WHICH WERE BROUGHT BY H IM. HE FILED COPY OF ACKNOWLEDGEMENT SLIP OF SERVICE OF THIS ASSESSMENT ORDER INCLUDING DEMAND NOTICE U/S. 156 OF THE ACT AND THE SAME WAS SERVED BY HAND ON ASSESSEE ON 13.04.2005. THE LD. CIT,DR WAS FURTHER ASKED, WHETHER THIS ASSESSMENT ORDER LEFT THE CONTROL OF A O OR HIS OFFICE AS ON 31.03.2005 OR NOT, THE LD. CIT, DR STATED CLEARLY THAT WHATEVER RECORDS AR E AVAILABLE, HE IS PRODUCING BEFORE THE BENCH. ON FURTHER ENQUIRY, WHETHER ANY DISPATCH RE GISTER IS THERE OR NOT, LD. CIT, DR FAIRLY STATED THAT ONCE THE ASSESSMENT ORDER INCLUDING THE DEMAND NOTICE WAS SERVED ON ASSESSEE ON 3 ITA NO. 1420/K/2008 & CO 132/K/2008 BINANI INDUSTRIES LTD.., AY: 2002-03 13.04.2005 BY HAND, THERE IS NO QUESTION OF ANY ENT RY IN DISPATCH REGISTER. HE FILED COPY OF ACKNOWLEDGMENT SLIP EVIDENCING THE SERVICE OF THE A SSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT DATED 31.03.2005 INCLUDING PENALTY NOTICE U/S. 271(1)(C) OF THE ACT ON 13.04.2005. IN VIEW OF THESE FACTS, LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SHRI SUBRATA ROY VS. ITO, I TA NO.240/KOL/2010, AY 2006-07 DATED 19.11.2012, WHEREIN IN THE SIMILAR CIRCUMSTANCES TH E COORDINATE BENCH OF THIS TRIBUNAL HAS CONSIDERED THE ISSUE AS UNDER: 11. FROM THE FACTS DISCUSSED ABOVE AS WELL THE CAS E LAWS, IT IS OBVIOUS THAT THIS BENCH ALLOWED REPEATED OPPORTUNITIES TO THE RE VENUE FOR PRODUCING EVIDENCES SO THAT THE FACT REGARDING DATE OF FRAMIN G OF ASSESSMENT ORDER COULD BE VERIFIED. HOWEVER, THE DEPARTMENT COULD NOT PRODUC E ANY EVIDENCE WHICH PROVE THAT THE ASSESSMENT ORDER WAS READY AS ON 31.12.200 8. THUS, WE HAVE NO OPTION BUT TO ACCEPT THE CONTENTION OF ASSESSEE THAT THE A SSESSMENT ORDER WAS NOT PASSED ON 31.12.2008. NO DOUBT THE PROVISIONS OF SECTION 153 REQUIRES THAT ASSESSMENT ORDER SHALL NOT BE PASSED AFTER THE EXPIRY OF TWO Y EARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INCOME WAS FIRST ASSES SABLE. THIS IS APPLICABLE TO THIS CASE. THERE IS NO REQUIREMENT THAT SERVICE MU ST BE EFFECTED BEFORE THE EXPIRY DATE BUT THERE MUST BE EVIDENCES TO SHOW THAT ASSES SMENT ORDER WAS INDEED PASSED BEFORE THE LIMITATION. IN THE PRESENT CASE BEFORE US NO SUCH EVIDENCE HAS BEEN ADDUCED BY REVENUE THAT THE ORDER WAS INDEED P ASSED ON OR BEFORE 31.12.2008. EVEN THOUGH THE ASSESSEE HAS TAKEN UP THIS ISSUE IN APPEAL AND REVENUE HAS REPEATEDLY BEEN ASKED TO PRODUCE EVIDEN CES TO THAT EFFECT. THERE IS NO EVIDENCE PRODUCED BEFORE THIS BENCH TO SHOW THAT THE ASSESSMENT ORDER AND DEMAND NOTICE WAS DISPATCHED BY REGISTERED POST AS ON THE DATE OF ASSESSMENT ORDER OF 31.12.2008. RATHER, EVIDENCES ARE AGAINST THE REVENUE THAT THE ASSESSMENT ORDER AND DEMAND NOTICE WERE DISPATCHED ONLY ON 12.02.2009 AND THE SAME WAS SERVED ON ASSESSEE ON 16.02.2009 I.E. BEYOND 47 DAYS OF LIMITATION. THERE CAN BE POSTAL DELAY OF A WEEKS TIME OR A FOR TNIGHTS TIME AT THE MAXIMUM AND IT CANNOT BE 47 DAYS DELAY. HENCE, WE ARE OF T HE VIEW THAT IN ORDER TO MAKE THE ASSESSMENT ORDER COMPLETE AND EFFECTIVE, IT SHO ULD BE ISSUED SO AS TO BE BEYOND THE CONTROL OF THE AUTHORITY CONCERNED FOR A NY POSSIBLE CHANGE OR MODIFICATION AND THIS SHOULD BE DONE WITHIN THE LIM ITATION PERIOD THOUGH ACTUAL SERVICE OF THE ASSESSMENT ORDER MAY BE BEYOND THAT PERIOD. WHEN AN ASSESSMENT ORDER HAS BEEN PURPORTED TO HAVE BEEN PASSED WITHIN THE PRESCRIBED PERIOD OF LIMITATION BUT THE SAME IS SERVED ON THE ASSESSEE A FTER UNREASONABLE DELAY WITHOUT BEING AN EXPLANATION COMING FORWARD FOR SUC H DELAY, IN THE ABSENCE OF ANY EXPLANATION WHATSOEVER IT CAN SAFELY BE PRESUME D THAT THE ORDER WAS NOT MADE ON THE DATE ON WHICH IT PURPORTS TO HAVE BEEN MADE AND ON THE BASIS OF SUCH PRESUMPTION IT CAN BE HELD THAT THE ORDER WAS PASSED AFTER THE EXPIRY OF LIMITATION. IN SUCH CIRCUMSTANCES, TAKING INTO CON SIDERATION ALL THE FACTS, WE HOLD THAT THE ASSESSMENT ORDER WAS BARRED BY LIMITA TION. HENCE, WE ALLOW THIS JURISDICTIONAL ISSUE IN FAVOUR OF ASSESSEE. 5. WE FIND FROM THE FACTS OF THIS CASE THAT THE ASS ESSMENT ORDER WAS NEVER DISPATCHED THROUGH POST AND THIS WAS HANDED OVER TO THE ASSESS EE BY HAND ON 13.04.2005. IT MEANS THAT THE ASSESSMENT ORDER NEVER LEFT THE CONTROL OF THE AO B EFORE 13.04.2005, WHEN ACTUALLY IT WAS HANDED OVER TO THE ASSESSEE IN PERSON. AS THE FACT S ARE EXACTLY IDENTICAL, IN THE CASE OF 4 ITA NO. 1420/K/2008 & CO 132/K/2008 BINANI INDUSTRIES LTD.., AY: 2002-03 COORDINATE BENCH, CITED SUPRA, TAKING A CONSISTENT VIEW, WE ARE OF THE VIEW THAT THE ASSESSMENT ORDER IS BARRED BY LIMITATION IN VIEW OF THE ABOVE GIVEN SET OF FACTS AND CIRCUMSTANCES. ONCE THE ASSESSMENT IS BARRED BY LIMITATION, WE ALLOW TH E ISSUE OF ASSESSEES CROSS OBJECTION. 6. AS REGARDS TO ITA NO. 1420/K/2008 FILED BY REVEN UE, NEITHER LD. CIT, DR NOR LD. COUNSEL FOR THE ASSESSEE MADE ANY ARGUMENT AND AS WE HAVE ALREADY QUASHED THE ASSESSMENT AS BARRED BY LIMITATION, WE NEED NOT TO GO INTO THE ME RITS OF THE CASE. THE APPEAL OF REVENUE IS DISMISSED AND THE CROSS OBJECTION OF ASSESSEE IS AL LOWED. 7. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED AN D THE CROSS OBJECTION OF ASSESSEE IS ALLOWED. 8. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21 ST NOVEMBER, 2013. SD/- SD/- . . . . ''# ''# ''# ''# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21ST NOVEMBER, 2013 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT ACIT, CENTRAL CIRCLE-XXVIII, KOLKATA 2 ./,- / RESPONDENT BINANI INDUSTRIES LTD., 37/2, CHINAR PARK, NEW TOWN, RAJARHAT MAIN ROAD, P.O. HATIARA, NORTH 24 PARGANAS , KOLJKATA-700 157. 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA. <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .