Ashok Kumar Bajoria, Cuttack V. ITO, Cuttack

CO 42/CTK/2015

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 4081 (ITAT-CUTTACK)
• Duration Of Justice: 3 year(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 11-08-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: D K SHETH
• Keywords: Principle of natural justice; Additional evidence; Reassessment proceedings
• Section: 143(3); 142(1)

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. 249 / CTK /20 1 5 ( [ [ / ASSESSMENT YEAR : 20 0 8 - 20 09 ) ITO, WARD - 2(3), CUTTA CK VS. SRI ASHOK KUMAR BAJORIA, TOWN HALL ROAD, CUTTACK ./ ./ PAN/GIR NO. : A A VPB 6401 F ( / APPELLANT ) .. ( / RESPONDENT ) CROSS OBJECTION NO. 42/CTK /20 15 ( [ [ / ASSESSMENT YEAR :2008 - 2009 ) SRI ASHOK KUM AR BAJORIA, TOWN HALL ROAD, CUTTACK VS. ITO, WARD - 2(3), CUTTACK ./ ./ PAN/GIR NO. : A AVPB 6401 F ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI D.K.PRADHAN,CITDR [ /AS SES SEE BY : SHRI D.K.SHETH , AR / 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 : TH E REVENUE HAS FILED AN APPEAL AND THE ASSESSEE HAS FILED CROSS OBJE CTION AGAINST THE ORDER OF CIT (A) , CUTTACK , DATED 27.2.2015 , PASSED IN I.T.APPEAL NO. 106 / 20 13 - 14 , U/S. 147/ 143(3) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 20 0 8 - 20 09 , WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : - 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.FIRST APPELLATE AUTHORITY IS JUSTIFIED IN DELETING DISCREPANCY IN GROSS RECEIPTS TO THE TUNE OF RS.35,66,610 ON THE GROUND THAT CONTRACTUAL RECEIPTS OF RS.4,86,24,907 FROM THE IOCL INCLUDES SERVICE TAX OF RS.53,06,694 AND NOT RS.21,24,128 AS SHOWN BY THE AO - WHEN THE AO SPECIFICALLY IN THE BODY OF THE ORDER HAD MENTIONED THE EXTRACTED INFORMATION OBTAINED FROM IOCL AND ESTABLISHED THAT SERVICE TAX WAS RS.21,24,128 WHICH WAS NOT ITA NO. 249 /CTK/201 5 & CO NO. 42/CTK/2015 2 DENIED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. IN FACT, THIS SERVICE TAX DETAILS OF RS.53,06,694 ACCEPTED BY THE ID.CIT(A) APPARENTLY IS TO BE TREATED AS THE ADDITIONAL EVIDENCE WHICH WAS NOT BEFORE THE AO WHILE COMPLETING THE ASSESSMENT. LD.CIT(A) IS NOT JUSTIFIED IN DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE WITHOUT AFFORDING AN OPPORTUNITY TO THE A.O. TO EXAMINE THE ISSUE IN QUESTION - IN CONTRAVENTION OF PROVISIONS OF RULE 46A OF THE I.T.RULE 1962. 2. 02. THE ID.CIT(A) HAS ERRED IN GIVING DIRECTION TO DELETE THE ADDITION MADE FOR SHORT D ISCLOSURE OF CONTRACT RECEIPTS OF RS.35,66,610 BECAUSE, EVEN THOUGH THE DETAILS OF SERVICE TAX OF RS.53,06,694 ACCEPTED, THE GROSS RECEIPTS PER 26AS STATEMENT EXCLUDING THE SERVICE TAX WOULD COME TO RS.4,33,18,213 ( RS.4,86,24,907 - RS.53,06,694) AND NOT F OR RS.4,29,34,169 AS DISCLOSED BY THE ASSESSEE IN HIS P&L ACCOUNT. STILL THERE IS SHORT DISCLOSURE OF CONTRACT RECEIPTS OF RS.3,84,044 ( RS.4,33,18,213 - RS.4,29,34,169) WHICH IS REQUIRED TO BE ADDED TO THE TOTAL INCOME AS DISCLOSED BY THE ASSESSEE. 2. BRI EF FACTS OF THE CASE ARE THAT THE ASSESSEE IS IN THE BUSINESS OF LAYING OF PIPELINE, CABLE & CONDUITS, TRADING IN GRANULES & IRON STEEL AND FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 20 0 8 - 20 09 ON 29.09.2008 WITH TOTAL INCOME OF RS. 6,60,816/ - . THE A O ON VERIFICATION OF RETURN FOUND THAT THE ASSESSEE HAS TWO PROPRIETARY CONCERNS NAMELY HARRISON INDUSTRIES AND ANANT INTERNATIONAL AND ALSO VERIFIED THE 3CD TAX AUDIT REPORT FILED IN RESPECT OF EACH BUSINESS AND THE AO FOUND T HE AUDIT REPORT IN FORM NO.3 CD IS NOT COMPLETE AND THERE ARE DISCREPANCIES IN VALUATION OF CLOSING STOCK. THEREFORE, THE AO ISSUED NOTICE U/S.148 OF THE ACT AND THE LETTER WAS FILED BY THE ASSESSEE ALONG WITH SUBMISSIONS TO TREAT THE RETURN OF INCOME FILED ON 29.9.2008 AS IN RESPONSE TO THE NOTICE U/S.148 OF THE ACT AND THE ASSESSEE MADE A REQUEST TO COMMUNICATE THE REASONS FOR REOPENING THE ASSESSMENT. SUBSEQUENTLY, NOTICE U/S. 143(2) AND 142(1) OF THE ACT WERE ISSUED TO THE ASSESSEE. IN COMPLIANCE, THE LD. AR OF THE ASSESSEE APPEARED AND THE AO OBTAINED CONFIRMATION OF THE ITA NO. 249 /CTK/201 5 & CO NO. 42/CTK/2015 3 TRANSACTIONS BY THE ASSESSEE WITH INDIAN OIL CORPORATION FROM CHENNAI AND AS PER THE CLARIFICATIONS , THE ASSESSEE WAS CALLED TO FURNISH THE QUANTITATIVE DETAILS AND IT WAS SUBMITTED BY THE ASSESSEE ON 21.3.2013 . 3. D URING THE FINANCIAL YEAR 2007 - 08 THE ASSESSEE HAS PURCHASED PLASTIC GRANULES AND M.S. FLAT FOR TRADING PURPOSE AND DETAILS WERE ENCLOSED IN ANNEXURES AND THE CLOSING STOCK WAS VALUED AT 78.00 PER KG. AND VALUATION OF WORK IN PROGRESS AS ON 31.3.2008 WAS RS.1,25,35,000/ - REFLECTED IN THE BALANCE SHEET . THE AO FOUND DISCREPANCY IN THE AVERAGE VALUE OF OPENING STOCK VIS - - VIS CLOSING STOCK AND WORK IN PROGRESS . THE LD. AO OBSERVED THAT THE ASSESSEE HAS NOT MAINTAINED THE STOCK REGISTER . FURTHER ON VERIFICATI ON OF THE TDS CERTIFICATE ISSUED BY THE INDIAN OIL CORPORATION AND THE AMOUNT CREDITED TO ASSESSEE PROFIT AND LOSS ACCOUNT REFERRED AT PAGE 4 TO 7 OF THE ORDER AND THERE ARE DISCREPANCIES WITH RESPECT TO SERVICE TAX AND CONTRACT RECEIPTS . T HE ASSESSEE FAIL ED TO PRODUCE EVIDENCE AND COULD NOT SUBSTANTIATE THE PROFIT AND LOSS ACCOUNT AND ACCORDINGLY THE AO HAS MADE ADDITION OF RS.35,66,610/ - ALONG WITH OTHER ADDITIONS AND ASSESSEE TOTAL INCOME AT RS. 83,96,990/ - AND PASSED ORDER U/S.147 R.W..S143(3) OF THE AC T DATED 30.3.2013. 4 . AGGRIEVED BY THE ORDER OF AO , THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). LD. CIT(A) CONSIDER ED THE FINDINGS OF THE AO AND THE SUBMISSIONS MADE BY THE ASSESSEE IN RESPECT OF CONTRACT RECEIPTS AND ALSO SERVICE TAX PAYMENTS . IN THE APPELLATE PROCEEDINGS, THE ASSESSEE HAS SUBMITTED THE DETAILS OF SERVICE TAX IN RELATION TO THE GROSS RECEIPTS ITA NO. 249 /CTK/201 5 & CO NO. 42/CTK/2015 4 WHICH ARE TALLIED AND, THEREFORE, THE CIT(A) FOUND THAT THE ADDITION MADE BY THE AO CANNOT BE SUSTAINED AND DELETED THE ADDITION . 5 . AGGRIEVED B Y THE ORDER OF CIT(A), THE REVENUE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. BEFORE US, LD. DR ARGUED THAT THE CIT(A) HAS ERRED IN GRANTING RELIEF IRRESPECTIVE OF THE FACT THAT THE AO HAS MADE ADDITION OF RS.35,66,610/ - DUE TO THE DIFFERENCE IN THE CONTRACT RECEIPTS AND THE ASSESSEE HAS SUBMITTED IN APPELLATE PROCEEDINGS THE DETAILS OF RS. 53,06,694/ - AND THE CIT(A) HAS NOT CALLED FOR ANY REMAND REPORT OR COMMENTS FROM THE ASSESSING OFFICER ON THIS ISSUE AND PRAYED FOR ALLOWING THE APPEAL. 6 . CONTRA, LD. AR RELIED ON THE ORDER OF CIT(A) AND SUBMITTED THAT THE ORDER OF AO IS BAD IN LAW AS THE ASSESSEE HAS MADE A REQUEST BEFORE THE AO TO PROVIDE THE REASONS FOR INITIATING THE REASSESSMENT PROCEEDINGS AND NO REASONS WERE PROVIDED , THEREFORE, ORDER OF AO IS AGAIN ST THE LAW AND PRAYED FOR DISMISSAL OF REVENUES APPEAL. 7 . WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE, THE ALLEGATION OF THE REVENUE IS THAT THE CIT(A) HAS DELETED THE ADDITION CONSIDERING THE FACT THAT THE ASSESSEE HAS SUB MITTED INFORMATION RESPECT OF SERVICE TAX AND THE GROSS RECEIPTS. THE REVENUES CONTENTION IS THAT THIS INFORMATION WAS NOT PROVIDED TO THE AO, THEREFORE, THE AO WAS DEPRIVED TO VERIFY AND SUBMIT HIS COMMENTS. PRIMA FACIE LD. A RS CONTENTION THAT THERE IS A GROSS VIOLATION OF PRINCIPLE OF NATURAL JUSTICE AND RAISED THE GROUND THAT IN THE ASSESSMENT PROCEEDINGS THE ORDER PASSED BY THE AO IS UNDER SECTION 147/143(3) OF THE ACT AND THE ITA NO. 249 /CTK/201 5 & CO NO. 42/CTK/2015 5 ASSESSEE HAS FILED LETTER REQUESTING FOR REASONS FOR REOPENING OF ASSESSMEN T. FURTHER THE ASSESSMENT WAS REOPENED WITH RESPECT TO DISCLOSURE OF QUANT ITY AND SUBSEQUENTLY DUE TO CONFIRMATION FROM THE COMPANY THE AO WAS SATISFIED WITH THE SAME WHICH W AS DISCLOSED IN THE BALANCE SHEET. FURTHER THE L D. ARS CONTENTION THAT ASSESSMENT CANNOT BE SUSTAINED AS THE REASONS WERE NOT COMMUNICATED TO THE ASSESSEE. WE FOUND STRENGTH IN THE ARGUMENTS OF LD. AR , SINCE THIS GROUND WAS NOT RAISED BEFORE US BUT UNDER THE PROVISIONS OF R ULE 27 OF APPELLATE TRIBUNAL RULES 1963 THE LD. AR CAN ARGUE W HICH READ S AS UNDER : - 27. THE RESPONDENT, THOUGH HE MAY NOT HAVE APPEALED, MAY SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GROUNDS DECIDED AGAINST HIM. WE FIND THERE IS A MERIT IN THE ARGUMENTS OF LD. AR IN RESPECT OF NON - COMMUNICATION OF REASONS OF REASSESSMENT PROCEEDINGS AND R ULE 27 OF ITAT RULES, 1963 PERMIT RESPONDENT TO MAKE SUBMISSION S . ACCORDINGLY, IN THE INTEREST OF SUBSTANTIAL JUSTICE, WE REMIT THE ENTIRE DISPUTED ISSUE TO THE FILE OF THE ASSESSING OFFICER, WHO SHALL PROVIDE REASONS FOR REOPENING AND ASSESSEE SHALL FILE OBJECTIONS TO REASSESSMENT PROCEEDINGS AND AO SHALL PASS ORDER ON VALIDITY OF REASSESSMENT PROCEEDINGS AND SUBSEQUENTLY PASS SPEAKING ORDER ON MERITS OF THE CASE AFTER PROVIDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSES SEE. ACCORDINGLY, THE GROUNDS OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES 8 . THE ASSESSEE HAS FILED CROSS OBJECTION NO. 42/CTK/2015, SUPPORTING TO THE ORDER OF CIT(A). SINCE WE HAVE RESTORED THE DISPUTED ITA NO. 249 /CTK/201 5 & CO NO. 42/CTK/2015 6 ISSUE TO THE FILED OF AO , THE CROSS OBJECTION FIL ED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED. 9 . IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND CROSS OBJECTION OF THE ASSESSEE IS 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 : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. [ / GUARD FILE. //TRUE COPY//