RNB Mercantile Pvt. Ltd., NEW DELHI V. ITO, Ward-1(3), BIKANER

CO 18/JODH/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9716 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-06-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-06-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 12-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Keywords: Procedural lapse
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 340/JU/2013 ASSESSMENT YEAR: 2008-09 THE INCOME-TAX OFFICER VS. M/S R.N.B. MERC ANTILE P. LTD WARD 1(3) BAJAJ HOUSE, RANI BAZAR BIKANER BIKANER PAN NO. AABCR 9334 G (APPELLANT) (RESPONDENT) CO NO. 18/JU /2013 A/O ITA NO. 340/JU/2013 ASSESSMENT YEAR: 2008-09 M/S R.N.B. MERCANTILE P. LTD VS. THE INCOME- TAX OFFICER BAJAJ HOUSE, RANI BAZAR WARD 1(3) BIKANER BIKANER PAN NO. AABCR 9334 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL SARDA DEPARTMENT BY : SHRI N.A. JOSHI, DR DATE OF HEARING : 09.06.2014 DATE OF PRONOUNCEMENT : 13.06.2014 2 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL BY THE REVENUE AND CROSS OBJECTION [CO] BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF T HE CIT(A), BIKANER DATED 22.03.2013 PERTAINING TO A.Y 2008- 2009. 2. IN THE CO, THE ASSESSEE HAS RAISED THE QUESTION OF JURISDICTION OF THE A.O. AFTER HEARING OF THE APPE AL, IT WAS PLEADED BY THE LD. A.R. THAT HE WAS NOT AWARE O F THE CONSEQUENCES OF NOT PRESSING A ISSUE WHEREAS THE LE GAL ISSUE RAISED IN THE CO IS OF UTMOST IMPORTANCE. WE ALSO FOUND THAT THE LEGAL ISSUE RAISED IN THE CO, IF NOT DECIDED, WILL DEFEAT AN IMPORTANT RIGHT OF THE ASSESSEE, WHI CH IS PROVIDED BY THE ACT. ACCORDINGLY, WE RELEASED THIS APPEAL AS WELL AS THE CO FOR FRESH HEARING AND THE MATTERS WERE HEARD INCLUDING ON THIS LEGAL ISSUE AFRESH. IT WAS CONTENDED THAT AS PER THE PROVISION OF SECTION 124( 4) OF 3 THE ACT, WHEN ANY ASSESSEE RAISES AN OBJECTION REGA RDING JURISDICTION OF THE A.O., IT IS THE BOUNDEN DUTY OF THE A.O. TO REFER THE MATTER TO HIGHER AUTHORITIES IF HE IS NOT SO SATISFIED. HOWEVER, IN THIS CASE, NO SUCH MANDATOR Y PROVISION WAS FOLLOWED AND THEREFORE, THE ORDER ITS ELF BECOMES INVALID AND ILLEGAL IN THE EYES OF LAW. 2.1 ON THE OTHER HAND, THE LD. SR. DR STATED THAT T HIS IS SIMPLY A PROCEDURAL IRREGULARITY AND AT BEST, CAN B E CORRECTED BY FOLLOWING DUE PROCESS OF LAW. HE ALSO ARGUED THAT IN EARLIER YEARS ALSO, THE SAME A.O. HAS PASSE D ASSESSMENT ORDER IN THIS CASE. 2.2 AFTER HEARING BOTH THE SIDES, WE ARE SATISFIED AND FIND FORCE IN THE LEGAL ARGUMENT RAISED IN THE CO. THE ASSESSEE HAS CLAIMED THAT THE ORIGINAL AND LEGAL JURISDICTIO N OVER THE ASSESSEE OR HIS BUSINESS LIES BEFORE THE A.O. I N DELHI AND NOT WITH THE A.O., BIKANER. IT IS ALSO FOUND TO BE A CORRECT FACT THAT THE ASSESSEE RAISED OBJECTION REG ARDING 4 JURISDICTION BEFORE THE A.O. ITSELF AND THE A.O. HA S FAILED TO REFER THIS MATTER TO HIGHER AUTHORITIES TO SETTL E THE ISSUE OF JURISDICTION IN VIOLATION OF PROVISIONS OF SECTION 124(4) OF THE ACT. THEREFORE, WE ALLOW THIS GROUND RAISED IN THE CO AND DIRECT THE A.O. TO SETTLE THE ISSUE A S PER LAW, FAILING WHICH THE ASSESSMENT ORDER ITSELF WILL BECOME A NULLITY. ACCORDINGLY, WE RESTORE THIS ISSUE TO T HE FILE OF THE A.O. FOR FRESH ADJUDICATION. ACCORDINGLY, THE CO OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 2.3 ON MERITS, THE ONLY GROUND RAISED BY THE REVENU E IS REGARDING DELETION OF ADDITION OF RS. 12,57,498/- M ADE ON ACCOUNT OF EXCESS SHORTAGE OF RAW WOOL. 2.4 FACTS OF THIS ISSUE ARE THAT THE ASSESSEE IS A WOOL MERCHANT AND DERIVES INCOME FROM THAT BUSINESS. FO R A.Y. 2008-09, THE ASSESSEE-COMPANY FILED ITS RETURN OF I NCOME [ROI] ON 30.9.2008 DECLARING TOTAL INCOME AT RS. 12 ,610/-. SUBSEQUENTLY, IT WAS NOTICED BY THE A.O. THAT IN TH IS YEAR, THE SHORTAGE IN RAW WOOL WHICH DEPENDS ON WEATHER 5 CONDITIONS, ESPECIALLY THE TEMPERATURE OF A PLACE A ND IS THE CAUSE FOR RELEVANT SHORTAGE IS MORE IN THIS YEA R AS COMPARED TO OTHER YEARS. HE HAS REFERRED TO THE FO LLOWING CHART AND WITH REFERENCE TO VARIOUS OTHER FACTORS, HE HAS REJECTED THE BOOKS OF ACCOUNT AND HAS MADE THE IMPU GNED TRADING ADDITION ON ACCOUNT OF SHORTAGE IN WOOL AT RS. 12,57,498/-: A.Y. WOOL PURCHASES SHORTAGE % 2005 - 06 235412 K.G. 1084 K.G. 0.46% 2006 - 07 205966 K.G. 8977 K.G. 4.35% 2007 - 08 83 8939 K.G. 2298 K.G. 2.74% 2008 - 09 880920 K.G. 28495 K.G. 3.23% THE LD. CIT(A) ACCEPTED THE DISCLOSED SHORTAGE ON T HE BASIS OF TRIBUNALS FINDING GIVEN IN A.Y. 2006-07 WHEREUNDER THE TRIBUNAL RESTORED THIS ISSUE TO THE FILE OF THE A.O., WHO AFTER CONSIDERING THE OBSERVATIONS OF THE TRIBUNAL AS WELL AS THE ENTIRE CASE, HAS ACCEPTED T HE DISCLOSED PERCENTAGE OF SHORTAGE IN WOOL. IN A.Y. 2005-06, 6 THE A.O. HIMSELF WHILE FRAMING THE ASSESSMENT ORDER U/S 143(3) OF THE I.T. ACT, 1961 HAS ACCEPTED SUCH SHOR TAGE @ 5.25%. SINCE THE SHORTAGE IN PERCENTAGE IS LESS IN THIS YEAR, THE LD. CIT(A) HAS DELETED THE ENTIRE ADDITIO N. THE REVENUE HAS COME IN APPEAL ON THIS ISSUE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. BO TH THE PARTIES HAVE REITERATED THEIR EARLIER ARGUMENTS. A S IS CLEAR FROM THE NARRATED FACTS THAT THIS SHORTAGE IN RAW WOOL IN PERCENTAGE HAS BEEN ACCEPTED BY THE A.O. HI MSELF IN THE A.Y. 2005-06 WHEN THIS PERCENTAGE WAS HIGHER THAN THERE IS NO REASON TO INTERFERE WITH THE FINDING OF THE LD. CIT(A). ACCORDINGLY, WE CANNOT ALLOW THE SOLE GROU ND RAISED IN THIS REVENUES APPEAL AND DISMISS THE SAM E. 7 4. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED WHEREAS THE CROSS OBJECTION OF THE ASSESS EE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 13 TH JUNE, 2014. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 TH JUNE, 2014 VL/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR