Sidharth Construction & Trading Pvt. Ltd, Cuttack V. ACIT, Cuttack

CO 47/CTK/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0543 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 10 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 20-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 01-07-2013
• Court: TRIBUNAL
• Department Lawyers: SHOVAN KRISHNA SAHU
• Assessee Lawyers: D K SHETH
• Keywords: Opportunity of being heard; Period of limitation; Time period of passing order
• Section: 144; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH , CUTTACK [ , . . , BEFORE SHRI SUNIL KUMAR YADAV , J M & SHRI B.P.JAIN , A M ./ ITA NO. 164 /CTK/201 3 ( [ [ / ASSESSMENT YEAR : 200 7 - 0 8 ) ACIT, CIRCLE - 2(2), CUTTACK VS. M/S SIDHARTH CONSTRUCTION & TRADING PVT. LTD. RAJABAGICHA, CUTTACK ./ ./ PAN/GIR NO. : A A ECS 5783 P ( / APPELLANT ) .. ( / RESPONDENT ) AND ./ CO NO. 47 /CTK/2013 ( [ [ / ASSESSMENT YEAR :2007 - 08 ) M/S SIDHARTH CONSTRUCTION & TRADING PVT. LTD. RAJABAGICHA, CUTTACK VS. ACIT, CIRCLE - 2(2), CUTTACK ./ ./ PAN/GIR NO. : A AECS 5783 P ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI SHOVAN KRISHNA SAHU [ /ASSESSEE BY : SHRI D.K.SHETH / DATE OF HEARING : 20 TH MAY , 201 5 / DATE OF PRONOUNCEMENT 22 ND MA Y ,2015 / O R D E R PER SUNIL KUMAR YADAV (J.M) : TH IS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF CIT (A) , CUTTACK, DATED 26 - 12 - 2012, FOR THE ASSESSMENT YEAR 200 7 - 0 8 , INTER ALIA , ON FOLLOWING GROUNDS . : - 01. THE LD. CIT(A) WAS NOT AT ALL JUSTIFIED TO HOLD THAT THE ASSESSMENT ORDER MADE ON 24.12.2009 ALONG WITH THE DEMAND NOTICE DATED 24.12.2009 WAS BARRED BY LIMITATION ITA NO. 164 /2013 CO NO.47/2013 2 U/S.153(1) OF THE I .T.ACT ON THE GROUND THAT SUCH ORDER AND DEMAND NOTICE WAS NOT SERVED ON THE ASSESSEE WITHIN THE PERIOD OF LIMITATION AS PRESCRIBED U/S.153(1) OF THE IT.ACT.1961. 02. THE LD.CIT(A) WAS TOTALLY ERRONEOUS IN HIS FINDING IN SO FAR AS THE CORRECT IMPLICATION OF SECTION 153(1) OF THE IT. ACT 1961 WAS CONCERNED WHICH INCIDENTALLY P ROVIDES THAT NO ORDER OF ASSESSMENT SHALL BE MADE U/S.143 OR 144 AT ANY TIME AFTER THE EXPIRY OF 21 MONTHS FROM THE END OF TH E FINANCIAL YEAR IN WHICH THE INCOME WAS FIRST ASSESSABLE. 03. THE CIT(A) WAS GROSSLY IN ERROR TO IGNORE THE SPECIFIC STATUTORY PR OVISION OF SECTION OF 153(1) IN WHICH THE WORDS SPECIFIED ARE ' SHALL BE MADE' AND NOWHERE EXPLICITLY OR IMPLICITLY THE TERM 'SHALL BE SERVED' - HAS BEEN MENTIONED. 04. THE LD.CIT(A) WAS GROSSLY IN ERROR TO IMPORT THE CONDITION THAT AN ASSESSMENT ORDER M ADE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153(1) SHALL BE VALID ONLY WHEN SUCH ASSESSMENT ORDER AND DEMAND NOTICE ARE ALSO SERVED ON THE ASSESSEE WITHIN THE PERIOD PRESCRIBED U/S. 153(1) OF THE IT.ACT 1961. 05. THE LD. APPELLATE AUTHORITY WAS NOT JUSTIFIED TO IGNORE THE LEGISLATIVE INTENT SPECIFIED IN SECTION 143(2)/14G/15G(1) AND OTHER SECTIONS IN WHICH IT IS STATED THAT THE ASSESSING OFFICER 'SHALL SERVE ON THE ASSESSEE'.... AS COMPARED TO THE SPECIFICATION STATED IN SECTION 153(1). THE LEGISLATU RE IN ITS WISDOM HAS NOT USED THE TERM 'SHALL BE SERVED ON THE ASSESSEE' U/S.153(1) FOR ANY ASSESSMENT ORDER OR DEMAND NOTICE. 06'. THE LD.CIT(A) WAS CERTAINLY NOT JUSTIFIED TO IGNORE THE RATIO OF DECISION OF THE HON'BL E APEX COURT OF IN THE CASE OF R.K. UPADHYAYA VS SHANABHAI P.PATEL REPORTED IN 166 ITR 163 IN WHICH THE HON'BL E COURT HAS MADE A CLEAR DISTINCTION BETWEEN ' ISSUE OF NOTICE' AND 'SERVICE OF NOTICE' AND ALSO HAS LAID DOWN THE PRINCIPLE THAT SERVICE OF NOTICE UNDER THE I.T.ACT 1961 IS NOT A CO NDITION PRECEDENT TO CONFERMENT OF JURISDICTION ON THE INCOME TAX OFFICER TO DEAL WITH THE MATTER, BUT IS A CONDITION PRECEDENT TO THE MAKING OF THE ORDER OF ASSESSMENT. THE LD.CIT(A) FAILED TO APPLY SUCH BASIC PRINCIPLE TO THE STATUTORY PROVISIONS OF SECT ION 153(1) REGARDING MAKING AN ASSESSMENT ORDER AND SERVICE OF ASSESSMENT ORDER WITHIN THE PRESCRIBED PERIOD OF LIMITATION, ITA NO. 164 /2013 CO NO.47/2013 3 07. THE LD.CIT(A) WAS ALSO IN ERROR TO TOTALLY IGNORE THE R ATIO OF DECISION GIVEN BY HON'BL E ANDHRA PRADESH HIGH COURT IN THE CASE OF KODIDASU APPALASWAMY AND SURYANARAYANA VRS COMMISSIONER OF INCOME TAX (A.P) REPORTED IN 46 ITR 735 IN WHICH THEIR LORDSHIPS HAD HELD - WHERE AN ORDER OF ASSESSMENT HAS BEEN PASSED WITHIN THE PERIOD OF LIMITATION THE DATE ON WHICH ORDER OF ASSESSMENT AND DEMAND NOTICE IS SERVED IS NOT AT ALL MATERIAL, 08. THE LD.CIT(A) WAS ALSO NOT JUSTIFIED TO IGNORE THE RATIO OF DECISION OF HON'BIE GAUHATI HIGH COURT IN THE CASE OF RAMANAND AGARWALLA VRS. COMMISSIONER OF INCOME TAX, NORTH EASTERN REGION, SHI L LONG REPO RTED IN 151 ITR 216 IN WHICH THEIR LORDSHIPS HAD HELD THAT AS PER SUB SECTION 1 OF SECTION 153 OF THE I.T.ACT 1 961, THE ASSESSING OFFICER IS REQUIRED TO PASS AN ORDER OF ASSESSMENT WITHIN THE LIMITATION PERIOD. IT DOES NOT REQUIRE THAT THE DEMAND OF NOTICE AND ASSESSMENT ORDER SHALL ALSO BE ISSUED WITHIN THAT LIMITATION PERIOD. THE HON'BIE HIGH COURT HAS CLEARLY DISTINGUISHED THE LEGISLATIVE INTENT REGARDING MAKING OF ASSESSMENT ORDER AND SERVICE OF DEMAND NOTICE. IN OTHER WORDS, THE STATUTE REQUIRES THE IT AUTHORITY TO SERVE ANY NOTICE OF DEMAND U/S.156 OF THE I.T.ACT ON THE ASSESSEE NOT NECESSARILY WITHIN THE PERIOD OF LIMITATION U/S.153(1) OF THE I.T.ACT. 09. ANY OTHER MATTER, IF ANY, SHALL BE URGED AT THE TIME OF HEARING. 2. THE ASSESSEE HAS ALSO FILE D CROSS OBJECTION WHICH IS IN SUPPORT OF THE ORDER OF THE CIT(A). 3 . SINCE THE REVENUES APPEAL AND CROSS OBJECTION OF THE ASSESSEE WERE HEARD TOGETHER, THEREFORE, THE SAME ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. 4 . THOUGH VARIOUS GROUNDS HAVE B EEN RAISED BY THE REVENUE IN ITS APPEAL, BUT THEY RELATE TO THE VALIDITY OF THE ASSESSMENT ORDER PASSED WITHIN THE PERIOD OF LIMITATION. 5 . SUCCINCT FACTS CU LLED OUT FROM THE ORDER OF THE REVENUE AUTHORITIES ARE THAT THE ASSESSING OFFICER HAS PASSED THE AS SESSMENT ORDER ON ITA NO. 164 /2013 CO NO.47/2013 4 24 - 12 - 2009 BUT IT WAS SERVED UPON THE ASSESSEE ALONG WITH THE NOTICE OF DEMAND ON 6 - 4 - 2010. THE ASSESSEE HAS CONTENDED BEFORE THE CIT(A) THAT SINCE THE ASSESSMENT ORDER AND THE DEMAND NOTICE WAS SERVED AFTER THE PERIOD OF LIMITATION , THE ASSESS MENT ORDER BE QUASHED AS IT WAS PASSED BEYOND THE PERIOD OF LIMITATION. 6 . BEING CONVINCED WITH THE CONTENTION OF THE ASSESSEE THAT THE CIT(A) HELD THE ASSESSMENT ORDER A S BARRED BY LIMITATION AND HE QUAS HED THE SAME HAVING HELD THAT IT WAS N ON - EST IN LAW. NOW, THE REVENUE IS IN APPEAL BEFORE US WITH THE SUBMISSION FACT THAT AS PER THE PROVISIONS OF SECTION 153(1) OF THE ACT THE ASSESSMENT ORDER IS TO BE PASSED WITHIN THE PERIOD OF LIMITATION AND IN THE INSTANT CASE THE PERIOD OF LIMITATION WAS UPTO 31 - 12 - 2009, WHEREAS THE ASSESSMENT ORDER WAS PASSED ON 24 - 12 - 2009, MUCH BEFORE THE END OF LIMITATION. THERE IS NO REQUIREMENT OF LAW U/S.153 OF THE ACT THAT THE ASSESSMENT ORDER ALONG WITH NOTICE OF DEMAND MUST BE SERVED WITHIN THE PERIOD OF LIMIT ATION. IN THE INSTANT CASE, THE NOTICE OF ASSESSMENT ORDER WAS SERVED UPON THE ASSESSEE ALONG WITH NOTICE OF DEMAND. THE CIT(A) HAS PRESUMED THAT THE ASSESSMENT ORDER MIGHT HAVE BEEN PASSED BEYOND THE PERIOD OF LIMITATION. FOR HOLDING THE ASSESSMENT ORDER A S BARRED BY LIMITATION, THERE SHOULD BE SOME EVIDENCE BEFORE THE CIT(A). ON THE BASIS OF PRESUMPTION AND ASSUMPTION, IT CANNOT BE HELD THAT THE ASSESSMENT ORDER IS PASSED BEYOND THE PERIOD OF LIMITATION. THEREFORE, THE ORDER OF CIT(A) DESERVES TO BE SET A SIDE. ITA NO. 164 /2013 CO NO.47/2013 5 7. LEARNED COUNSEL FOR THE ASSESSEE PLACED RELIANCE UPON THE ORDER OF CIT(A). 8. HAVING CAREFULLY EXAMINED THE ORDER S OF AUTHORITIES BELOW IN THE LIGHT OF THE RIVAL SUBMISSIONS AND FROM PERUSAL OF THE PROVISIONS OF SECTION 153 OF THE ACT , WE FIND THA T THE ASSESSMENT ORDER IS REQUIRED TO BE PASSED BEYOND THE PERIOD OF LIMITATION AND IN THE INSTANT CASE UNDISPUTEDLY THE PERIOD OF LIMITATION WAS UPTO 31 - 12 - 2009 AND THE ASSESSMENT ORDER WAS PASSED ON 24 - 12 - 2009. IN THE ENTIRE ACT, THERE IS NO PROVISION FI XING THE TIME FOR SERVICE OF ASSESSMENT ORDER AND NOTICE OF DEMAND. GENERALLY AFTER PASSING OF THE ASSESSMENT ORDER, THE SAME TO BE SERVED UPON THE ASSESSEE ALONG WITH NOTICE OF DEMAND BUT NO TIME HAS BEEN SPECIFIED IN THE ACT, THEREFORE, IN THE ABSENCE OF ANY SPECIFIC PROVISION, IT CANNOT BE ASSUMED THAT THE ASSESSMENT ORDER IS BARRED BY TIME SIMPLY ON THE BASIS THAT NOTICE OF DEMAND ALONG WITH ASSESSMENT ORDER WAS SERVED AFTER THE PERIOD OF LIMITATION . WHILE HOLDING THE ASSESSMENT ORDER A S BARRED BY LIMIT ATION THERE SHOULD BE SOME CONCRETE EVIDENCE WITH THE LOWER AUTHORITIES. ON THE BASIS OF ASSUMPTION AND PRESUMPTION THE ASSESSMENT ORDER CANNOT BE HELD TO BE BARRED BY LIMITATION. ACCORDINGLY, WE ARE OF THE VIEW THAT SINCE THE ASSESSMENT ORDER WAS PASSED BEFORE THE END OF THE LIMITATION PERIOD, THE ASSESSMENT ORDER IS VALID AND ACCORDINGLY, WE SET ASIDE THE ORDER OF CIT(A) IN THIS REGARD. SINCE THE CIT(A) HAS NOT ADJUDICATED THE ISSUES ON MERIT, WE RESTORE THE MATTER TO HIS FILE WITH A ITA NO. 164 /2013 CO NO.47/2013 6 DIRECTION TO ADJUDI CATE THE ISSUES BEFORE HIM ON MERIT AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. AS WE HAVE ALLOWED THE APPEAL OF THE REVENUE, THE CROSS OBJECTION FILED BY THE ASSESSEE , WHICH IS IN SUPPORT TO THE FINDINGS OF THE CIT(A) , IS DISMISSED . 10 . IN THE RESULT, AP PEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES AND THE CROSS OBJECTION OF THE ASSESSEE IS HEREBY DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22 / 05 / 201 5 . SD/ - SD/ - ( . . ) ( B. P. JAIN ) ( ) ( SUNIL KUMAR YADAV) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 22 /0 5 / 201 5 . . /PKM , . / PS / COPY OF TH E ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, CUTTACK 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT , CUTTACK 6. [ / GUARD FILE. //TRUE COPY//