M/s N.S.S. Enterprises, Pathankot V. The Asstt. Commissioner Of Income Tax, Pathankot

CO 19/ASR/2015

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3026 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 14-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-04-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 03-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL KAPOOR LD
• Assessee Lawyers: RAHUL DHAWANLD
• Keywords: Competent authority
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TR IBUNAL AMRITSAR BENCH; AMRITSAR BEFORE SH.T.S. KAPOOR, ACCOUNTANT MEMBER AND SH.N.K.CHOUDHRY, JUDICIAL MEMBER I.T.A. NO.337(ASR)/2015 ASSESSMENT YEAR:2006-07 ASST. CIT, CIRCLE-VI, PATHANKOT. VS. M/S. N.S.S. ENTERPRISES, SARNA NEHAR SARNA, PATHANKOT. PAN:AACFN-3256H (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.19(ASR)/2015 (ARISING OUT OF ITA NO.337(ASR)/2015) ASSESSMENT YEAR:2006-07 M/S. N.S.S. ENTERPRISES, SARNA NEHAR SARNA, PATHANKOT. PAN:AACFN-3256H VS. ASST. CIT, CIRCLE-VI, PATHANKOT. (CROSS OBJECTOR) (RESPONDENT) APPELLANT BY : SH. RAHUL DHAWAN (LD. DR) RESPONDENT BY: SH. SALIL KAPOOR (LD.ADV.) DATE OF HEARING:27.04.2017 DATE OF PRONOUNCE MENT:14.07.2017 ORDER PER N. K. CHOUDHRY (JM): THE REVENUE DEPARTMENT HAS PREFERRED THE INSTANT APPE AL, FEELING AGGRIEVED AGAINST THE ORDER DATED 10 TH MARCH, 2015, PASSED IN APPEAL NO.337/13-14, BY THE CIT(A)-1, AMRITSAR. THE ASSESSEE HAS ALSO PREFERRED TO FILE CROSS OBJECTIONS. 2. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE DEPARTME NT AND CROSS OBJECTIONS TAKEN BY THE ASSESSEE ARE REPRODUCED HEREIN BELOW. I TA NO.337(ASR)/2015 C.O.19(ASR)/2015 A SST. YEAR: 2006-07 2 GROUNDS OF APPEAL OF REVENUE DEPARTMENT WHETHER, IN THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) IS RIGHT IN QUASHING THE ORDER MERE ON TECHNICAL GROUNDS AGA INST INTENTION OF THE PARLIAMENT BEHIND OBTAINING SANCTIONS OF THE HIGHER AUTHORITY PRIOR TO THE ISSUE OF NOTICE U/S 148 WHEN ASSESSEE FAILED TO FUR NISH THE FACT RECORDING ASSESSMENT MADE U/S 143(3) BEFORE THE ASSESSING OFF ICER AND FAILED TO RAISE ANY SUCH OBJECTION REGARDING THE VALIDITY OF THE NO TICE BEFORE THE ASSESSING OFFICER DURING ENTIRE ASSESSMENT PROCEEDINGS. GROUNDS OF CROSS OBJECTIONS. {{{{ 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-I I, AMRITSAR HAS, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, GR OSSLY ERRED IN LAW IN HOLDING THAT THE JURISDICTION OVER THE CASE OF THE APPELLANT VESTED TO CIRCLE-VI, PATHANKOT AND HE WAS COMPETENT TO ISSUE NOTICE U/S.148 OF I.T. ACT. 2. THAT THE LD. DCIT, CIRCLE-VI, PATHANKOT DID NOT HAVE ANY JURISDICTION OVER THE CASE OF THE ASSESSEE AND HAD GROSSLY ERRED IN LAW IN REOPENING THE ASSESSMENT BY NOTICE U/S.148 ON 15/18.03.2013 F OR A.Y.2006-07. THE REOPENING WAS ILLEGAL AND WITHOUT JURISDICTION AS THE ASSESSEE FIRM WAS REGULARLY ASSESSED AT AMRITSAR. 3. THAI THE REASONS RECORDED WERE ALSO VAGUE, IRRELEVA NT AND UNJUSTIFIED AND THE REOPENING OF THE ASSESSMENT WAS ILLEGAL AND BAD IN LAW. 4. THAT THE OBJECTIONS FILED REGARDING JURISDICTION OF THE DCIT, CIRCLE-VI, PATHANKOT WERE WRONGLY IGNORED AND WERE NOT LEGALLY DISPOSED OFF AND THE ASSESSMENT HAS BEEN MADE WITHOUT JURISDICTION. 5. THAT ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE MATERIAL AVAILABLE ON RECORD AND THE LEGAL PROVISIONS HAVE NOT BEEN PR OPERLY CONSIDERED AND JUDICIALLY INTERPRETED AND THE LD. C.I.T.(APPEALS) HAS WRONGLY HELD THAT THE DCIT, CIRCLE-VI, PATHANKOT HAD THE JURISDICTION TO ISSUE THE SAID NOTICE U/S.148. 6. THAT THE NOTICE ISSUED U/S 148 AND THE REASSESSMEN T ORDER PASSED ARE ILLEGAL, BAD IN LAW AND WITHOUT JURISDICTION EVEN O N THE ISSUES OTHER THAN THE ONES DECIDED BY THE CIT(A). 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE ASSESSMENT IS MADE U/S 144/147 OF THE ACT ON 26.02.2014, COMPUTING THE INCOME OF RS.52,86,559/- WHI CH INCLUDED ADDITION OF RS.32,57,194/- MADE ON ACCOUNT OF UNEXPLAINED CASH DEPOSITS IN SAVING BANK ACCOUNT NO.7216 WITH UNION BANK OF INDIA, DALHOUSIE ROAD, PATHANKOT. I TA NO.337(ASR)/2015 C.O.19(ASR)/2015 A SST. YEAR: 2006-07 3 NOTICE U/S 148 WAS ISSUED AND SERVED ON 18.03.2013, BY THE ASSESSING OFFICER AFTER OBTAINING APPROVAL OF THE A DDITIONAL COMMISSIONER OF INCOME TAX RANGE-VI, PATHANKOT, ON THE BASIS OF PAN/MATERIAL AVAILABLE WITH HIM WITHOUT KNOWING THE PAST HISTORY AND RECORD OF THE CASE WHICH WAS BEING ASSESSED PREVIOUSLY AT AMRITSAR. ASSESSEE VIDE LETTER DATED 04.12.2013 RAISED THE OBJECTIONS REGARDING REASONS RECORDED PRIOR TO ISSUE OF NO TICE U/S 148 WHICH WERE DISPOSED OF BY WRITTEN ORDER ON 17.12. 2013. LATER ON THE CIT(A) VIDE ITS ORDER DATED 10.3.2015 W HICH IS UNDER CHALLENGE QUASHED THE ASSESSMENT ORDER DATED 26.02.2014 ISSUED U/S 144/147 BY HOLDING THE SAME AS NUL L AND VOID AND FURTHER REOPENING OF THE ASSESSMENT BY ISSUE OF NOTICE U/S 148 AS ILLEGAL ON THE GROUND THAT THE SAME WAS ISSUED WITHOUT THE AUTHORITY OF LAW AND JURISDICTION BECAUSE SA NCTION OF THE SAME WAS NOT OBTAINED FROM THE COMPETENT AUTHORITY AS PRESCRIBED IN PROVISO TO SEC.151(1) OF THE ACT. 4. FEELING AGGRIEVED BY THE SAID ORDER PASSED BY THE LD. CIT(A), THE REVENUE DEPARTMENT PREFERRED THE INSTANT APPEAL AND SUBMITTED THAT CIT(A) HAS ERRED IN QUASHING THE ORDER MERE ON TECHNICA L GROUNDS. SANCTIONS OF THE HIGHER AUTHORITY PRIOR TO ISSUE OF NOTI CE U/S 148 IS TO ENSURE ASSESSMENT OF ESCAPED INCOME ON VALID GROUNDS AS WELL AS FAIRNESS TO ASSESSEE AND TO AVOID REPEATED ASSESSMENTS WITHOU T VALID GROUNDS AND ALSO WHEN ASSESSEE FAILED TO FURNISH THE FACTS R EGARDING ASSESSMENT MADE U/S 143(3) BEFORE THE ASSESSING OFFICER AND F URTHER FAILED TO RAISE ANY SUCH OBJECTION REGARDING THE VALIDI TY OF THE NOTICE I TA NO.337(ASR)/2015 C.O.19(ASR)/2015 A SST. YEAR: 2006-07 4 BEFORE THE LD. ASSESSING OFFICER DURING ASSESSMENT PROCEEDING S AND ALSO BEFORE THE TIME LIMIT I.E. DATED 31 ST MARCH, 2013 FOR ISSUE OF NOTICE U/S 148 SO THAT THE REVISED NOTICE WAS VALIDLY ISSUED TO THE ASSESSEE BEFORE TIME BARRING LIMIT. FINALLY, THE LD. DR ARGUED THAT WHATEVER, PECULIAR CIRCUMSTANCES ARISES, THE AO IN A BONAFIDE MANNERS, PASSED THE ORDER WHICH IS WELL WITHIN THE PARA METERS OF THE LAW. 5. ON THE OTHER HAND, THE LD. ADVOCATE, SH. SALIL KAPOOR, ON BEHALF OF THE ASSESSEE, ARGUED IN SUPPORT OF THE IMPUGNED ORDER AND EMPHASIZED THAT THE LD. CIT(A) QUASHED THE ASSESSMENT U/S 143 BECAUSE THE SAME WAS BEYOND FOUR YEARS WHICH IS MAXIMUM LI MIT UNTIL AND UNLESS EXTENSION PRESCRIBED BY LAW AND IT IS THE MAN DATE OF THE LAW THAT THE SANCTION HAS TO BE TAKEN FROM THE CHIEF C OMMISSIONER OR COMMISSIONER ONLY BUT IN THE INSTANT CASE THIS IS NOT IN DISPUTE THAT THE SAME HAS BEEN TAKEN FROM ADDITIONAL CIT AND ACCORD ING TO SEC.143 OF THE ACT APPROVAL/SANCTION IS VERY MUCH NECESSARY FROM THE COMPETENT AUTHORITY ONLY AND THE SAME CANNOT BE WAIVED OFF. 6. FOR THE SAKE OF CONVENIENCE AND BREVITY AND TO AVOID REPETITION, IT IS APPROPRIATE TO DECIDE THE APPEAL OF THE REVENUE FIRST. LET US SEE THE CONTENTS OF SECTIONS 149 & 151 OF THE ACT. I TA NO.337(ASR)/2015 C.O.19(ASR)/2015 A SST. YEAR: 2006-07 5 149. TIME LIMIT FOR NOTICE (1) 5 NO NOTICE UNDER SECTION 148 SHALL BE ISSUED FOR TH E RELEVANT ASSESSMENT YEAR,- (A) IN A CASE WHERE AN ASSESSMENT UNDER SUB- SECTION ( 3) OF SECTION 143 OR SECTION 147 HAS BEEN MADE FOR SUCH ASSESSMENT YEAR,- (I) IF FOUR YEARS HAVE ELAPSED FROM THE END OF THE REL EVANT ASSESSMENT YEAR, UNLESS THE CASE FALLS UNDER SUB- CLAUSE (II) OR SUB- CLAUS E (III); (II) IF FOUR YEARS, BUT NOT MORE THAN SEVEN YEARS, HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCOME CHARGEAB LE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOUNTS TO OR IS LIKELY TO AMOUNT TO RUP EES FIFTY THOUSAND OR MORE FOR THAT YEAR: (III) IF SEVEN YEARS, BUT NOT MORE THAN TEN YEARS, HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE INCOME CHARGEA BLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOUNTS TO OR IS LIKELY TO AMOUNT TO [***] RUPEES ONE LAKH OR MORE FOR THAT YEAR; (B) IN ANY OTHER CASE,- (I) IF FOUR YEARS HAVE ELAPSED FROM THE END OF THE REL EVANT ASSESSMENT YEAR, UNLESS THE CASE FALLS UNDER SUB- CLAUSE (II) OR SUB- CLAUS E (III); (II) IF FOUR YEARS, BUT NOT MORE THAN SEVEN YEARS, HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE INCOME CHARGEA BLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOUNTS TO OR IS LIKELY TO AMOUNT TO RUP EES TWENTY- FIVE THOUSAND OR MORE FOR THAT YEAR; (III) IF SEVEN YEARS, BUT NOT MORE THAN TEN YEARS, HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE INCOME CHARGEA BLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOUNTS TO OR IS LIKELY TO AMOUNT TO RUP EES FIFTY THOUSAND OR MORE FOR THAT YEAR. EXPLANATION.- IN DETERMINING INCOME CHARGEABLE TO T AX WHICH HAS ESCAPED ASSESSMENT FOR THE PURPOSES OF THIS SUB- SECTION, T HE PROVISIONS OF EXPLANATION 2 OF SECTION 147 SHALL APPLY AS THEY APPLY FOR THE PU RPOSES OF THAT SECTION.]. (2) THE PROVISIONS OF SUB- SECTION (1) AS TO THE ISSUE OF NOTICE SHALL BE SUBJECT TO THE PROVISIONS OF SECTION 151. (3) IF THE PERSON ON WHOM A NOTICE UNDER SECTION 148 I S TO BE SERVED IS A PERSON TREATED AS THE AGENT OF A NON- RESIDENT UNDER SECTI ON 163 AND THE ASSESSMENT, REASSESSMENT OR RECOMPUTATION TO BE MADE IN PURSUAN CE OF THE NOTICE IS TO BE MADE ON HIM AS THE AGENT OF SUCH NON- RESIDENT, THE NOTICE SHALL NOT BE ISSUED AFTER THE EXPIRY OF A PERIOD OF TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. 151. SANCTION FOR ISSUE OF NOTICE (1) IN A CASE WHERE AN ASSESSMENT UNDER SUB- SECTION ( 3) OF SECTION 143 OR SECTION 147 HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO NOTICE SHALL BE ISSUED UNDER SECTION 148 3 BY AN ASSESSING OFFICER, WHO IS BELOW THE RANK OF ASSISTANT COMMISSIONER, UNLESS THE DEPUTY COMMISSIONER IS SAT ISFIED ON THE REASONS RECORDED BY SUCH ASSESSING OFFICER THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE]: PROVIDED THAT, AFTER THE EXPIRY OF FOUR YE ARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, NO SUCH NOTICE SHALL BE ISSUED UNL ESS THE CHIEF COMMISSIONER OR I TA NO.337(ASR)/2015 C.O.19(ASR)/2015 A SST. YEAR: 2006-07 6 COMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY THE ASSESSING OFFICER AFORESAID, THAT IT IS A FIT CASE FOR THE ISSUE OF S UCH NOTICE. (2) IN A CASE OTHER THAN A CASE FAILING UNDER SUB- SEC TION (1), NO NOTICE SHALL BE ISSUED UNDER SECTION 148 BY AN ASSESSING OFFICER, W HO IS BELOW THE RANK OF DEPUTY COMMISSIONER, AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE DEPUTY COMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY SUCH ASSESSING OFFICER, THAT IT IS A FI T CASE FOR THE ISSUE OF SUCH NOTICE.] FROM THE CONJOINT READING OF SEC.149 & 151 OF THE ACT, IT IS CLEAR THAT NO NOTICE U/S 148 SHALL BE ISSUED FOR THE RELEVANT ASSESSMENT YEAR IF FOUR YEARS HAVE ELAPSED FROM THE END OF THE RELEVA NT ASSESSMENT YEAR, UNLESS THE CASE FALLS UNDER SUB-CLAUSE (II) OR SUB-CLA USE (III) OF SEC.149. FURTHER SECTION 151 PRESCRIBED THAT AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, NO SUCH NOTICE SHALL BE ISSUED, UNLESS THE CHIEF COMMISSIONER OR COMMISSIO NER IS SATISFIED, ON THE REASONS RECORDED BY THE ASSESSING OFFICER, THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE. NOW COMING TO THE INSTANT CASE, THIS CASE BELONGS TO ASSESSMEN T YEAR:2006-07 AND THE NOTICE U/S 148 WAS ISSUED ONLY ON 1 8 TH MARCH, 2013 WITH THE SANCTION OF THE ADDITIONAL COMMISSIONER O F INCOME TAX, CERTAINLY WHICH GOES TO THE CONTRARY TO THE STATUTE AND IN ANY CASE CANNOT BE ALLOWED TO BE ISSUED WITHOUT BEING APPROVED BY THE COMPETENT AUTHORITY WHICH IS ACCORDING TO THE ACT UNDISP UTEDLY THE CHIEF COMMISSIONER OR THE COMMISSIONER ONLY. THE INSTA NT CASE IS BASED ON THE LEGAL GROUND AND LEGAL GROUND CANNOT BE TAKEN AT ANY I TA NO.337(ASR)/2015 C.O.19(ASR)/2015 A SST. YEAR: 2006-07 7 STAGE UNLESS AND UNTILL SPECIFICALLY BARRED, THEREFORE, D OES NOT REQUIRE ANY FACTUAL CONSIDERATION AND FOR THE AFORESAID REASONS RECORDED, THE APPEAL OF THE REVENUE DEPARTMENT STANDS DISMISSED. 6.1 C.O. NO.19(ASR)/2015 FILED BY THE ASSESSEE CONCERNING TO THE DECLARING THE NOTICE U/S 148 DATED 13 TH MARCH, 2013 AS NULL AND VOID IS ALLOWED AND REST OF THE GROUNDS OF THE C.O. DOES NOT REQUIRE ANY SEPARATE ADJUDICATION AS THE SAME WERE NOT SPECIFICALLY AG ITATED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED AND C.O. FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14.07.2017. SD/- SD/- (T. S. KAPOOR) (N.K.CHOUD HRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:14.07.2017. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A) (4) THE CIT, ASR. (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER