Asst. Director of Income-tax (Intl.Txn)-I, Hyderabad V. M/s Kayson Constructions Company, Hyderabad

CO 33/HYD/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9411 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 03-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 28-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A V RAGHURAM
• Keywords: Reopening of assessment
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER C.O. NO. 33/HYD/2013 ARISING OUT OF ITA 393/HYD/2013 ASSESSMENT YEAR 2003*04 THE ASST. DIT (INTL. TXN)*I HYDERABAD VS. M/S. KAYSON CONSTRUCTIONS COMPANY, HYDERABAD PAN: AABCK7046E [APPELLANT] [RESPONDENT*CROSS OBJECTOR) REVENUE BY: SRI SOLGY JOSE T. KOTTARAM ASSESSEE BY: SRI A.V. RAGHURAM DATE OF HEARING: 03.02.2014 DATE OF PRONOUNCEMENT: 03.02.2014 ORDER ORDER ORDER ORDER PER CHANDRA POOJARI, AM : THIS CROSS OBJECTION (CO) BY THE ASSESSEE IS DIREC TED AGAINST THE ORDER OF THE CIT(A)*V, HYDERABAD DATED 18.12.2012 FOR A.Y. 2003*04. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS IN THE CO : (1) THE CIT(A) ERRED IN NOT DECIDING THE GROUND WITH RE SPECT TO REOPENING THE ASSESSMENT U/S. 147 OF THE IT ACT. (2) THE CIT(A) OUGHT TO HAVE HELD THE ORDER PASSED U/S. 144C TO BE VOID AB INITIO SINCE THE SAME IS PASSED IN GROSS VIOLATION OF PROVISIONS OF SECTION. THE CIT(A) FAILED TO APPR ECIATE THAT THE AO WITHOUT PROVIDING AN OPPORTUNITY TO THE RESP ONDENT HAD PASSED THE ASSESSMENT ORDER THEREBY GROSSLY VIO LATING THE PROVISIONS OF SECTION 144C OF THE IT ACT. CO NO. 33/HYD/2013 M/S. KAYSON CONSTRUCTIONS COMPANY =============================== 2 (3) BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE AY 2003*04 ADMITTING LOSS OF RS. 4,55,16,486/*. AN ORDER UNDER SECTION 143(3) OF THE ACT WAS PASSED ON 14.03.2006 DETERMINING IN THE LOSS AT RS. 4,09,13,9 92/*. SUBSEQUENTLY, THE CASE WAS REOPENED UNDER SECTION 1 47 OF THE ACT ON THE GROUND THAT THE ASSESSEE HAD OFFERED NET SALES REVENUE AT RS. 45,56,76,433/* AGAINST THE ACTUAL PA YMENTS RECEIVED AT RS. 74,89,67,167/* BY DEBITING RS. 29,3 2,90,734/* TOWARDS WORK*IN*PROGRESS. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER OPINED THAT THIS IS CONTRARY TO THE ASSESSE E'S OWN STAND IN THE PRECEDING TWO YEARS WHERE IT HAD NOT OFFERED ANY CONTRACT PAYMENTS AS SALES REVENUE AND HAD CAPITALI ZED THE WHOLE EXPENDITURE UP TO THE END OF THE YEAR AS 'WOR K*IN* PROGRESS'. ON THIS DIFFERENCE OF SALES OF RS. 29,32 ,90,734/*, THE ASSESSING OFFICER ESTIMATED 8% PROFIT AND REDUCED T HE SAME FROM THE LOSS RETURNED BY THE ASSESSEE . IN PARA 6 OF THE ASSESSMENT ORDER, IT WAS MENTIONED THAT A DRAFT ORD ER WAS FORWARDED TO THE ASSESSEE PROPOSING TO ASSESS THE I NCOME AS ABOVE AND AS THERE IS NO RESPONSE TO THE PROPOSAL W ITHIN THE TIME LIMITS MENTIONED IN SECTION 144C(2), THE FINAL ORDER WAS PASSED. (4) BEFORE THE CIT(A), THE ASSESSEE RAISED THE GROUND W ITH REGARD TO PASSING OF THE FINAL ORDER WITHOUT WAITIN G FOR THE OBJECTIONS OF THE ASSESSEE UNDER SECTION 144C OF TH E ACT. IN PARAGRAPH 6 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER MENTIONED THAT THERE WAS NO RESPONSE FROM THE ASSES SEE FOR THE CO NO. 33/HYD/2013 M/S. KAYSON CONSTRUCTIONS COMPANY =============================== 3 DRAFT ORDER WITHIN THE TIME LIMITS MENTIONED IN SEC TION 144C(2) AND ACCORDINGLY SHE PROCEEDED TO PASS THE FINAL ORD ER. THE ASSESSING OFFICER HAD NOT REFERRED TO ANY DETAILS O F THE DRAFT ORDER, LIKE DATE, WHEN IT WAS SERVED ON THE ASSESSE E AND WHAT IS THE LAST DATE AVAILABLE FOR THE ASSESSEE TO RESPOND TO SUCH DRAFT ORDER. IT IS WITHOUT GIVING ANY DATES, THE ASSESSI NG OFFICER HAD CONCLUDED THAT THERE IS NO RESPONSE FROM THE ASSESS EE IN FILING OBJECTIONS TO THE DRAFT ORDER. (5) THE ASSESSEE ALSO CHALLENGED REOPENING OF THE CONCLUDED ASSESSMENT. (6) THE CIT(A) NOT DECIDED THE ISSUE OF 'REOPENING OF ASSESSMENT' AND ALSO REGARDING PASSING OF FINAL ORD ER WITHOUT WAITING FOR OBJECTION OF THE ASSESSEE U/S. 144C OF THE ACT. THE CIT(A) OBSERVED THAT THE ASSESSING OFFICER HAD NOT GIVEN ANY DATES OF SERVING THE DRAFT ORDER ON THE ASSESSEE AN D HE ALSO OBSERVED THAT THE ASSESSEE ALSO NOT GIVEN ANY DETAI LS AND IT WAS ONLY SUBMITTED IN THE STATEMENT OF FACTS THAT THE D RAFT ORDER WAS RECEIVED BY THEM ON 28.02.2011, I.E., AFTER THE DAT E OF FINAL ASSESSMENT ORDER. NO EVIDENCES IN THIS REGARD WERE FILED. (7) IN OUR OPINION, IT IS INCUMBENT UPON THE CIT(A) TO DECIDE THE ABOVE TWO LEGAL ISSUES BEFORE DECIDING THE MERI T OF ADDITION. HENCE, IT IS APPROPRIATE TO REMIT THESE TWO ISSUES TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION. SIN CE THE CIT(A) HAS GIVEN A FINDING ON MERIT OF THE ISSUE RELATING TO T HE ADDITION CO NO. 33/HYD/2013 M/S. KAYSON CONSTRUCTIONS COMPANY =============================== 4 MADE BY THE AO AND GIVEN RELIEF TO THE ASSESSEE, WE DECLINE TO ADJUDICATE THESE GROUNDS IN REVENUE APPEAL AT THIS STAGE, AS WE HAVE REMITTED THE LEGAL ISSUES BACK TO THE FILE OF THE CIT(A). THE APPEAL OF THE REVENUE IS KEPT PENDING TO DECIDE THE SAME AFTER DECIDING THE IMPUGNED LEGAL ISSUES RAISED BY THE ASSESSEE IN ITS CROSS OBJECTIONS. (8) IN THE RESULT, THE CO BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD FEBRUARY, 2014. SD/* (D. MANMOHAN) VICE PRESIDENT SD/* (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED THE 3 RD FEBRUARY, 2014 TPRAO COPY FORWARDED TO: 1. M/S. KAYSON CONSTRUCTIONS CO., C/O. SRI K. VASANT K UMAR & AV RAGHU RAO, ADVOCATES, 610, BABUKHAN ESTATES, BAS HEER* BAGH, HYDERABAD*4. 2. THE ASS. DIRECTOR OF INCOME*TAX (INTERNATIONAL TAXA TION)*1, 6 TH FLOOR, IT TOWERS, AC GUARDS, HYDERABAD. 3. THE CIT(A)*V, HYDERABAD. 4. THE DIT (INTERNATIONAL TAXATION), HYDERABAD. 5. THE DR BENCH 'B', ITAT, HYDERABAD