Kalinga Institute of Industrial Technology, Bhubaneswar V. ACIT, Circle-2(2), Bhubaneswar, Bhubaneswar

CO 42/CTK/2014

• Counselvise Citation: [2017] 119 COUNSELVISE.COM (IT) 3430 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-06-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 19-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KUNAL SINGH
• Assessee Lawyers: S K AGRAWALLA
• Keywords: Unexplained cash credit; Search and seizure; Charitable institution; Difference of opinion; Revised return; Change of opinion; Reassessment proceedings
• Section: 142(1); 153A; 147; 12; 10; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ./ ITA NO. 266 , 162 &217 / CTK /20 1 4 ( [ [ / ASSESSMENT YEAR : 2006 - 07&2005 - 06 ) KALING A INSTITUTE OF INDUSTRIAL TECHNOLOGY (KIIT), PLOT NO. 383, 384, KIIT CAMPUS - 1, PATIA, BHUBANESWAR - 751024, ODISHA VS. ACIT, CIRCLE - 2(2), BHUBANESWAR, ODISHA ./ ./ PAN/GIR NO. : A A ATK 3103 C ( / APPELLANT ) .. ( / RESPO NDENT ) AND ./ ITA NO. 108&2 94 /CTK /20 14 ( [ [ / ASSESSMENT YEAR : 2004 - 05&200 6 - 0 7 ) ACIT, CIRCLE - 2(2), BHUBANESWAR, ODISHA VS. KALINGA INSTITUTE OF INDUSTRIAL TECHNOLOGY (KIIT), PLOT NO.383, 384, KIIT CAMPUS - 1, PATIA, BHUBANESWAR - 751024 , ODISHA ./ ./ PAN/GIR NO. : A AATK 3103 C ( / APPELLANT ) .. ( / RESPONDENT ) AND CROSS OBJECTION NO. 27&42 /CTK /20 1 4 ( [ [ / ASSESSMENT YEAR :200 4 - 05 & 200 6 - 0 7 ) KALINGA INSTITUTE OF INDUSTRIAL TECHNOLOGY (KI IT), PLOT NO.383, 384, KIIT CAMPUS - 1, PATIA, BHUBANESWAR - 751024, ODISHA VS. ACIT, CIRCLE - 2(2), BHUBANESWAR, ODISHA ./ ./ PAN/GIR NO. : A AATK 3103 C ( / APPELLANT ) .. ( / RESPONDENT ) [ /AS SESSEE BY : SHRI S.K.AGRAWALLA, AR /REVENUE BY : SHRI KUNAL SINGH ,CITDR / DATE OF HEARING : 29 / 0 8 /201 7 / DATE OF PRONOUNCEMENT 31 / 0 8 /201 7 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : ITA NO. 266,294,108,162&217 /CTK/201 4 & CO NO. 42 &27 /CTK/201 4 2 TH E SE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE AND ASSESSEE HAS FILED TWO CROSS OBJECTION S AGAINST THE ORDER OF CIT (A) - II , BHUBANESWAR , DATED 25.04.2014 , PASSED IN I.T.APPEAL NO. 0313 / 20 1 1 - 1 2 , PASSED U/S. 147 OF THE INCOME TAX ACT, 1961 . 2. SINCE THE ISSUE INVOLVED IN ALL THE APPEALS ARE CONNECTED AND COMMON, HENCE, ALL THE APPEALS ARE HEARD TOGETHER AND DISPOSED OFF BY THIS CONSOLIDATED ORDER. WE SHALL TAKE UP APPEAL I.E. ITA NO.266/CTK/201 4 (A : 2006 - 07) AND THE FACTS NARRATED THEREIN. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - WITHOUT PREJUDICE TO THE RIGHT OF SUBMISSION OF ADDITIONAL GROUND OF CROSS OBJECTIONS AT THE TIME OF HEARING THE RESPONDENT SUBMITS SUBMITTED AS UNDER: - 1. THAT THE LD. ASSESSING OFFICER IS NOT CORRECT IN REOPENING OF TH E ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT AND THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS NOT CORRECT IN ENDORSING THE ACTION OF THE LD. ASSESSING OFFICER ON THE FOLLOWING GROUNDS; A. THAT, THE PROVISIONS U/S 153A OF THE ACT HAS THE OVERRIDING EFFECT ON THE PROVISIONS OF SECTION 147 OF THE ACT AND THEREFORE THE LD. ASSESSING OFFICER HAS NO JURISDICTION TO REASSESS THE SAME INCOME WHICH WAS COMPLETED U/S 153A OF THE ACT FOR THE SELF SAME PERIOD. B. THAT, THE REOPENING OF THE ASSESSMENT PROCEEDINGS WITHOUT HA VING FRESH MATERIALS ON RECORD IS NOTHING BUT CHANGE OF OPINION AND THEREFORE THE REOPENING OF THE ASSESSMENT PROCEEDINGS BASING ON THE SEIZED MATERIALS ARE ILLEGAL AND LIABLE TO BE QUASHED. C. THAT, THE LD. ASSESSING OFFICER SUPPLIED THE REASON FOR REOPENING OF THE CASE ON 14 TH NOVEMBER 2011 (I.E. AFTER THE 31 ST MARCH 2011) WHICH IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THEREFORE THE ENTIRE PROCEEDINGS ARE ILLEGAL AND LIABLE TO BE QUASHED. D. THAT, THE ISSUANCE OF NOTICE U/S 143(2) IMMEDIATELY ON THE VERY SAME DAY AFTER FILING OF RETURN OF INCOME IS ILLEGAL AND THEREFORE THE ENTIRE PROCEEDINGS ARE LIABLE TO BE QUASHED. E. THAT, WITHOUT DISPOSING OFF THE OBJECTIONS RAISED TO THE ITA NO. 266,294,108,162&217 /CTK/201 4 & CO NO. 42 &27 /CTK/201 4 3 REOPENING OF THE CASE, THE LD. ASSESSING OFFICER PASSED THE ASSESSMENT ORD ER U/S 147 WHICH IS ILLEGAL AND LIABLE TO BE QUASHED. F. THAT, THE LD. ASSESSING OFFICER IS NOT PERMITTED TO REOPEN THE CONCLUDED PROCEEDINGS U/S 254/251/153A(B) AND THEREFORE THE ENTIRE REASSESSMENT PROCEEDINGS ARE VOID AB - INITIO. G. THAT, THE REASSESSMENT PROC EEDINGS ARE NOT SUSTAINABLE IN VIEW OF THE FACT THAT, THE REASON FOR REOPENING OF THE ASSESSMENT DOES NOT SURVIVE AFTER DELETION OF THE ADDITION FOR WHICH THE REOPENING WAS MADE AND THEREFORE NO OTHER ADDITIONS CAN BE MADE IN VIEW OF THE EXPLANATION 3 OF T HE SECTION 147 OF THE ACT. H. THAT, DURING THE PENDENCY OF ASSESSMENT PROCEEDINGS THE LD. ASSESSING OFFICER IS NOT PERMITTED TO REOPEN THE CASE U/S 147 AND ISSUE NOTICE U/S 148, THEREFORE THE REASSESSMENT PROCEEDINGS ARE ILLEGAL AND VOID AB - INITIO. 2. THAT, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS COMMITTED AN ERROR LAW IN ENDORSING THE ACTION OF THE LD. ASSESSING OFFICER THAT, THE ISSUANCE THE NOTICE U/S 142(1) ON 13 TH DECEMBER 2011 REQUISITIONING CERTAIN DOCUMENTS, CLARIFICATIONS ETC. BEFORE ISSUING OF NOTI CE U/S 143(2) OF THE ACT (I.E. NOTICE U/S 143(2) WAS ISSUED ON 15 TH DECEMBER 2011) AND EVEN BEFORE THE EXPIRY OF THE PERIOD OF FILING OF RETURN OF INCOME U/S 148. THUS THE ACTION OF THE LD. AUTHORITIES BELOW ARE NOT IN ACCORDANCE WITH THE PROVISIONS OF THE LAW AND THE ENTIRE REASSESSMENT PROCEEDINGS ARE VOID AB - INITIO AND LIABLE TO BE QUASHED. 3. THAT, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN DISMISSING THE GROUND NO.7 OF THE APPELLANT, I.E. WHILE PASSING THE REASSESSMENT ORDER U/S 147 THE LD. ASSESSING OFFICER REPRODUCED THE ASSESSMENT ORDER PASSED U/S 153B(B)/143(3) OF THE ACT EVEN WITHOUT ISSUING OF SHOW CAUSE IN ANY OF THE POINTS OF ADDITION, THEREFORE THE SAID ACTION OF THE LD. ASSESSING OFFICER IS ILLEGAL AND LIABLE TO BE QUASHED. 4. THAT, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS COMMITTED AN ERROR OF LAW IN CONFIRMING THE ADDITIONS OF ? 15,00,000 AS UNEXPLAINED CASH MERELY BASING ON THE FINDING OF HER PREDECESSOR (I.E. PREVIOUS CIT (A)) IN VIEW OF THE FACT THAT, THE SAME WAS E XPLAINED DURING THE COURSE OF ASSESSMENT/ REASSESSMENT PROCEEDING AND ALSO APPELLATE PROCEEDINGS, THEREFORE THE ADDITIONS OF ? 15,00,000 IS LIABLE TO BE DELETED. 5. THAT THE LD. AUTHORITIES BELOW FAILED TO APPRECIATE THE BASIC PRINCIPLE OF ACCOUNTING AND MADE ADDITIONS OF ? 6,53,640 AS UNEXPLAINED CASH CREDIT WHICH IS HIGHLY ARBITRARY, CONTRARY TO THE EVIDENCE ON RECORD, BAD IN LAW AND LIABLE TO BE DELETED. ITA NO. 266,294,108,162&217 /CTK/201 4 & CO NO. 42 &27 /CTK/201 4 4 6. THAT, FORUMS BELLOW HAD COMMITTED AN ERROR OF LAW IN DISALLOWING THE EXPENDITURE OF ? 24,15,644 & ? 73,2 1,600 INCURRED UNDER THE HEAD D. KHATEI (CONST.) IN VIEW OF THE FACT THAT, SRI HAREKRUSHNA PANIGRAHI HAD CLEARLY ADMITTED THAT, THE TRANSACTION IN QUESTION D. KHATEI (CONST.) HAD BEEN DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS OF THE APPELLANT IN THE STAT EMENT RECORDED ON 20.12.2010, THEREFORE THE ADDITIONS OF? 24,15,644 & ? 73,21,600 ARE LIABLE TO BE DELETED. 7. THAT, THE APPELLANT CRAVES TO ALTER, AMEND OR ADD ANY OTHER GROUND THAT MAY BE CONSIDERED NECESSARY IN THE COURSE OF APPEAL PROCEEDING. 3 . BRI EF FAC TS OF THE CASE ARE THAT THE ASSESSEE IS A CHARITABLE TRUST REGISTERED VIDE CERTIFICATE NO. 4268 - 191 DATED 30.06.1992 UNDER THE SOCIETY REGISTRATION ACT, 1860 AND CARRYING ON EDUCATIONAL ACTIVITIES AND PROFESSIONAL STUDIES. THERE WAS A SEARCH AND SEIZURE OPE RATION ON THE ASSESSEES PREMISES ON 9.8.2005 AND THE ASSESSMENT ORDER WAS PASSED U/S.153B(B)/143(3) OF THE ACT ON 31.12.2007 WITH TOTAL INCOME OF RS. 17,76,69,520/ - WHERE THE EXEMPTION U/S.11 WAS DENIED AND THE ASSESSMENT WAS ANNULLED BY THE ITAT IN IT(SS) A NO. 85/CTK/2009, DATED 4.12.2009. AGGRIEVED BY THE ORDER OF ITAT, THE REVENUE HAS PREFERRED APPEAL TO THE HONBLE HIGH COURT AND THE ASSESSMENT WAS REOPENED BY THE AO BY ISSUING NOTICE U/S.148 OF THE ACT DATED 22.12.2010. 4 . BEFORE GOING INTO THE MERITS O F THE CASE, LD. AR SUBMITTED THAT THE OBJECTION ON THE REASONS FOR REOPENING OF THE CASE WAS NOT DISPOSED OFF BY THE ASSESSING OFFICER AND HENCE THE ORDER OF THE AO IS BAD IN LAW. ACCORDINGLY, WE CONSIDER IT APPROPRIATE TO DEAL LEGAL GROUND OF VALIDITY OF REASSESSMENT PROCEEDINGS. ITA NO. 266,294,108,162&217 /CTK/201 4 & CO NO. 42 &27 /CTK/201 4 5 5 . LD. AR SUBMITTED THAT THE REASONS WERE PROVIDED BY THE AO TO THE ASSESSEE VIDE LETTER DATED 14.11.2011 ON THE REPRESENTATION OF THE ASSESSEE DATED 20.1.2011, AND THE ASSESSEE HAS FILED OBJECTIONS ON 21.11.2011 AND EXPLAINED IN HIS SUBMISSIONS AT PARA 8 OF THE LETTER REFERRED AT PAGE 117 OF THE PAPER BOOK WHICH READS AS UNDER : - 8. THAT, WITHOUT PREJUDICE TO THE SUBMISSION MADE HEREIN ABOVE REGARDING THE JURISDICTION ISSUE, THE ASSESSEE FURTHER SUBMITS THAT THE NOTICE ISSUED U/ S.148 OF THE ACT IS CONTRACT TO THE PROVISIONS OF SECTION 147 OF THE ACT AS THERE WAS NO FRESH MATERIALS AVAILABLE ON RECORD AND ALL THE SEIZED MATERIALS HAVE BEEN CONSIDERED IN THE ASSESSMENT PROCEEDINGS U/S.153A. THEREFORE, YOUR HONOUR HAD NOT APPLIED YO UR JUDICIOUS MIND BEFORE RECORDING OF THE REASONS FOR REOPENING OF THE CASE FOR REASSESSMENT. HENCE, THE ISSUANCE OF NOTICE IS NOT SUSTAINABLE IN LAW. 6 . LD.DR OF THE REVENUE HAS OPPOSED THAT THE ORDER DATED 30.11.2011 WAS PASSED CONSIDERING THE OBJECTIO NS OF THE ASSESSEE TO THE REASONS FOR REOPENING OF THE ASSESSMENT FOR THE ASSESSMENT YEAR 2006 - 07 REFERRED AT PAGE 112 OF THE PAPER BOOK, WHERE THE REVENUE HAS TREATED THE NOTICE U/S.148 OF THE ACT IS VALID AND REQUESTED THE ASSESSEE TO COMPLY THE CONDITI ONS. FURTHER, THE ASSESSEE FILED SUBMISSIONS ON 7.12.2011 REFERRED TO THE ORDER PASSED BY ACIT, CIRLCE - 2(1) BBSR/11 - 12, DTD,30.11.2011 IN THE A.Y.2006 - 07, WHEREIN IT WAS EMPHASISED AT PARA 8 WHICH IS AS UNDER : - 9. THAT, IN YOUR LETTER YOUR HONOUR HAD NOT CONSIDERED THE SUBMISSION MADE BY THE ASSESSEE IN PARA NO.8 OF ITS OBJECTION DATED 21 ST NOVEMBER 2011 WHICH IS ALSO A VITAL ISSUE IN DECIDING THE JURISDICTION ON YOU. 7 . LD. AR FILED LETTER DATED 20.1.2011 IN COMPLIANCE TO NOTICE U/S.148 OF THE ACT DATE D 22.12.2010 TO TREAT THE REVISED RETURN FILED ON 5.3.2007 AS A DUE COMPLIANCE OF RETURN FILED IN RESPONSE TO NOTICE U/S.148 OF THE ACT ITA NO. 266,294,108,162&217 /CTK/201 4 & CO NO. 42 &27 /CTK/201 4 6 AND PLACED A COPY OF LETTER ENDORSED BY THE DEPARTMENT. FURTHER, LD.ARS CONTENTION THAT THOUGH REASONS WERE PROVIDED TO THE ASSESSEE AND OBJECTIONS WERE FILED BUT THE OBJECTIONS OF THE ASSESSEE IN RESPECT OF PARA 8 IN THE OBJECTIONS ON THE SAME SET OF FACTS WAS NOT CONSIDERED AND THERE IS NO FINDING OR JUDICIAL APPLICABILITY AS NO FRESH MATERIAL WERE AVAILABLE ON RECORD A ND THE SEIZED MATERIAL WERE ALREADY CONSIDERED IN THE ASSESSMENT PROCEEDINGS U/S.153A WHEREAS LD. DR HAS VEHEMENTLY OBJECTED TO THE SUBMISSIONS. 8 . WE ARE OF THE CONSIDERED VIEW THAT THERE IS STRENGTH IN THE ARGUMENTS OF LD. AR AND DULY SUPPORTED WITH EVI DENCE AND SUBMISSIONS AND REL YING ON THE PROVISIONS OF LAW . P RIMA FACIE THE OBJECTIONS RAISED BY THE ASSESSEE AS REFERRED ABOVE AT PARA 8 IN LETTER DTD. 21 .11.2011 WAS NOT DISPOSED OFF BY THE AO THOUGH THE REVENUE HAS PASSED AN ORDER ON THE VALIDITY OF REAS SESSMENT PROCEEDINGS U/S.148 OF THE ACT IN LETTER DTD. 30 .11.2011. ACCORDINGLY, WE ARE OF THE VIEW THAT REASSESSMENT PROCEEDINGS HAS TO BE COMPLIED IN FULL AND THE OBJECTIONS OF THE ASSESSEE ON SAME SET OF FACTS AND THE MATERIAL WAS ALREADY AVAILABLE HAS TO DISPOSE OFF WITH FINDINGS AND SPEAKING ORDER. ACCORDINGLY, WITHOUT GOING INTO MERITS OF THE CASE, WE REMIT THE DISPUTED ISSUE TO THE FILE OF AO TO CONSIDER THE SUBMISSION S ON REASSESSMENT AND PASS THE ORDER ACCORDINGLY AND ALSO SHALL PROVIDE ADEQUATE OPPO RTUNITY OF HEARING TO THE ASSESSEE AND THE ASSESSEE SHALL ALSO COOPERATE IN SUBMITTING THE INFORMATION AT THE EARLIEST. ACCORDINGLY , THE ASSESSEES APPEAL IS RESTORED TO THE FILE OF AO. ITA NO. 266,294,108,162&217 /CTK/201 4 & CO NO. 42 &27 /CTK/201 4 7 9 . SIMILAR ISSUE HAS BEEN RAISED IN ASSESSEES APPEAL I.E. ITA NO. 162 & 2017 /CTK/2014 AND THE APPEALS FILED BY THE REVENUE IN ITA NOS. 217, 108 & 294/CTK/2014 (AY:2005 - 06, 2004 - 05 & 2006 - 07) . SINCE, WE HAVE RESTORED THE DISPUTED ISSUE TO THE FILE OF AO FOR CONSIDERING THE OBJECTION NOT DISPOSED OFF IN REASSESSMENT PROCEEDINGS A FTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE WHILE CONSIDERING THE APPEAL OF THE ASSESSEE IN ITA NO. 266/CTK/2014 (AY 2006 - 07), THEREFORE, THE ISSUE RAISED IN THE ABOVE APPEALS ARE RESTORED TO THE FILE OF AO AS PER OUR EARLIER OBSERVATION S . 10 . THE ASSESSEE HAS FILED CROSS OBJECTIONS IN CO NO. 42&27/CTK/2014 FOR THE ASSESSMENT YEAR 2006 - 07 & 2004 - 05 . SINCE WE HAVE REMITTED THE APPEALS FILED BY THE ASSESSEE AS WELL AS APPEAL OF THE REVENUE ON THE DISPUTED ISSUE, THEREFORE, THE CROSS OBJECTION FILED BY THE ASSESSEE HAVE BECOME INFRUCTUOUS AND THEY ARE DISMISSED. 1 1 . IN THE RESULT, APPEAL S OF THE ASSESSEE I.E. ITA NO.162&217/CTK/2014 AND THE APPEALS FILED BY THE REVENUE IN ITA NOS. 108 & 294/CTK/2014 ( 2004 - 05 & 2006 - 07) ARE ALLOWED FOR STATISTI CAL PURPOSES, WHEREAS THE CROSS OBJECTION OF THE ASSESSEE I.E. CO NO.27&42/CTK/2014 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 31 / 08 /201 7 . SD/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 31 / 0 8 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDENT - ITA NO. 266,294,108,162&217 /CTK/201 4 & CO NO. 42 &27 /CTK/201 4 8 / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. [ / GUARD FILE. //TRUE COPY//