DCIT, Circle - 4(2), Kolkata , Kolkata V. M/s. M.V. Food Industries Ltd., , Kolkata

ITA 1043/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2092 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 17-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHYAM
• Keywords: Assessment record
• Section: 143(3); 142(1); 292BB; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1043/KOL/2018 ( / ASSESSMENT YEAR: 2012-13) DCIT, CIRCLE-4(2), KOLKATA VS. M/S M. V. FOOD INDUSTRIES LTD. 1 ST FLOOR, GASTIN PLACE STREET, KOLKATA-700001. ./ ./PAN/GIR NO.: AACCM 3003 A (ASSESSEE) .. (REVENUE) ASSESSEE BY : SHRI RADHEY SHYAM, CIT DR RESPONDENT BY : NONE / DATE OF HEARING : 18/04/2019 /DATE OF PRONOUNCEMENT : 19/06/2019 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERTA INING TO ASSESSMENT YEAR 2012-13, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-7, KOLKATA, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT) DATED 30/03/2015. 2. GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS FOLLOWS: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN LAW IN DECIDING THE FACT THAT THE NOTICE U /S 143(2) OF THE ACT IN INVALID IN THE EYES OF LAW. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS ERRED IN CONSIDERING THE ESSENCE OF SECTION 292BB O F THE I.T. ACT BEFORE DECIDING NOTICE U/S 143(2) OF THE ACT WAS NOT VALID . M/S M.V. FOOD INDUSTRIES LTD. ITA NO.1043/KOL/2018 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 2 22 2 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN CONSIDERING THE ADDITIONS MADE IN THE ORIG INAL ASSESSMENT PROCEEDINGS IN WHICH THE ASSESSEE DID NOT OBJECT AG AINST THE JURISDICTION OF ITS CASE. 4. THAT THE APPELLANT CRAVES FOR LEAVE TO ADD, DELE TE, AMEND OR MODIFY ANY GROUND BEFORE OR AT THE TIME OF APPELLATE PROCEEDIN GS. 3. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASION AND LD . DEPARTMENTAL REPRESENTATIVE(DR), WAS PRESENT FOR THE APPELLANT R EVENUE. IN THE ABSENCE OF ANY APPEARANCE BY THE ASSESSEE, THE APPEAL IS BEING DIS POSED OF EX PARTE QUA THE ASSESSEE, AFTER HEARING LD. DR FOR THE REVENUE ON M ERITS IN TERMS OF RULE 24 OF THE INCOME TAX APPELLATE, TRIBUNAL, RULES, 1963. 4. WE NOTE THAT THE SOLITARY GRIEVANCE OF THE REVEN UE IN THIS APPEAL UNDER CONSIDERATION IS THAT NOTICE U/S 143(2) HAS NOT BEE N ISSUED BY ASSESSING OFFICER WITHIN THE STATUTORY LIMIT PRESCRIBED UNDER THE AC T THEREFORE THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT. HOWEVER, LD. CIT(A) OUGHT TO HA VE CONSIDERED THE PROVISIONS OF SECTION 292BB, THAT IS, NOTICE DEEMED TO BE VALI D IN CERTAIN CIRCUMSTANCES. 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS ADJUDICATED THE ISSUE IN FAVOUR OF THE ASSESSEE HOLDING THAT NOTICE U/S 143(2) OF THE ACT WAS NOT ISSUED TO THE ASSESSEE WITHIN THE STATUTORY LIMIT PRESCRIBED UNDER THE ACT THEREFORE THE ASSESSMENT ORDER FRAMED BY THE ASSESSING OFFICER IS NULL AND VOID IN THE EYE OF LAW OBSERVING THE FOLLOWING: 4. AFTER A CAREFUL CONSIDERATION THE CONTENTION OF THE A/R OF THE ASSESSEE AND AFTER GOING THROUGH THE FACTS AND CIRCUMSTANCES, TH E ASSESSMENT RECORD WAS CALLED FOR EXAMINATION BY ME VIDE LETTER DATED 23/01/2018. ON GOING THROUGH THE ASSESSMENT RECORDS, IT WAS FOU ND THAT THE INCOME TAX OFFICER, WARD-1(3), KOLKATA ISSUED THE NOTICE U/S 1 43(2) ON 08.08.2013 IGNORING THE INSTRUCTION NO. 1/2011 WHICH WAS ISSUED BY CBDT BEFORE THE TIME OF SELECTION OF SCRUTINY. M/S M.V. FOOD INDUSTRIES LTD. ITA NO.1043/KOL/2018 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 3 33 3 THE FACTS AND CIRCUMSTANCES IN THE PRESENT CASE ARE THAT THE INCOME TAX OFFICER, WARD-1(3), KOLKATA ISSUED THE NOTICE U/S 143(2) WIT HOUT ANY JURISDICTION BECAUSE THE ASSESSEES INCOME WAS MORE THAN 30 LAKHS AND AS PER CBDTS INSTRUCTION, HE MONETARY LIMIT IN RESPECT OF CORPORATE ASSESSEE IN THE METRO CHARGES LIKE KOLKATA WAS UPTO 30 LAKHS OF THE INCOME DECLARED FOR IT TO BE WITHIN THE JURISDICTION OF AN INCOME TAX OFFICER. SINCE THE RETURNED INCOME WAS M ORE THAT RS. 30.00 LACS, THE JURISDICTION TO ASSESS THE ASSESSEE LAY ONLY WITH A C/DC AND NOT WITH AN INCOME TAX OFFICER. IT IS SETTLED LAW THAT THE SERVICE OF NOTICE U/S 143(3) OF THE ACT IS A SINE QUA NON FOR AN ASSESSMENT TO BE MADE U/S 143(3 ) OF THE ACT. IN THIS CASE, NOTICE U/S 143(2) OF THE ACT WAS ISSUED ON 08/08/20 13 BY THE ITO, WARD-1(3), KOLKATA. SUBSEQUENTLY, WHEN THE ITO REALIZED THAT HE DID NOT HAVE THE PECUNIARY JURISDICTION TO ISSUE NOTICE, HE DULY TRANSFERRED T HE FILE TO DCIT, CIRCLE-4(2), KOLKATA. THE DCIT WITHOUT MANDATORILY ISSUING THE N OTICE U/S 143(2) OF THE INCOME TAX ACT PASSED THE ASSESSMENT ORDER U/S 143( 3) OF THE INCOME TAX ACT WHICH IS NOT VALID IN THE EYES OF LAW AND THEREFORE IS NULL AND VOID. SINCE I HAVE QUASHED THE ASSESSMENT MADE AND THE APPEAL OF ASSES SEE IS ALLOWED ON THIS LEGAL ISSUE, THE OTHER GROUNDS RAISED BY THE ASSESSEE NEE D NOT BE ADJUDICATED BECAUSE IT IS ONLY ACADEMIC. AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REVENU E IS IN APPEAL BEFORE US. 6. THE LD. DR FOR THE REVENUE SUBMITTED BEFORE US W RITTEN SUBMISSION IN 10 PAGES WE HAVE GONE THROUGH THE WRITTEN SUBMISSION OF LD. DR AND NOTED THE IMPORTANT FINDINGS FROM THE WRITTEN SUBMISSION. THE IMPORTANT ASPECT, WHICH IS HIGHLIGHTED BY THE LD. DR IN HIS WRITTEN SUBMISSION IS THAT THE ISSUE OF VALIDITY OF JURISDICTION COULD HAVE BEEN RAISED BY THE ASSESSEE BEFORE THE A .O. AFTER THE EXPIRY OF ONE MONTH FROM THE DATE OF ISSUANCE OF NOTICE U/S 143(2 ) OF THE ACT. BUT IT HAS BEEN RAISED BY ASSESSEE ONLY BEFORE LD. CIT(A). THE LD. CIT(A) HAS IGNORED THE CONCEPT OF CONCURRENT JURISDICTION. THE INSTRUCTION NO. 119 IS ADMINISTRATIVE IN NATURE, WHICH IS THOUGH BINDING ON A.O., BUT NOT ON APPELLA TE AUTHORITIES. NOTICE ISSUED US/ 143(2) WAS BASED ON CONCURRENT JURISDICTION. TH E NOTICE WAS LEGALLY ISSUED WITHIN THE PRESCRIBED TIME LIMIT. 7. WE HAVE HEARD LD. DR FOR THE REVENUE AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE NOTICE U/S 143(2) OF INC OME TAX ACT, 1961 DATED 08/08/2013 ISSUED BY THE ITO, WARD 1(3), KOLKATA, F IXING THE DATE OF HEARING ON 26/09/2013 WITHOUT JURISDICTION AS PER CBDT'S INSTR UCTION NO. 1/2011 DATED 31/01/2011 [F. NO. 187/12/2010-IT(A-L)] IN WHICH IT IS MENTIONED THAT CORPORATE RETURNS HAVING INCOME UPTO RS. 30 LAKHS IS UNDER TH E JURISDICTION OF ITO AND M/S M.V. FOOD INDUSTRIES LTD. ITA NO.1043/KOL/2018 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 4 44 4 INCOME ABOVE RS. 30 LAKHS WILL COME UNDER THE JURIS DICTION OF DC'S/AC'S. WE NOTE THAT THE LD ASSESSING OFFICER ISSUED THE NOTIC E U/S 143(2) ON 08/08/2013 WITHOUT HIS JURISDICTION BECAUSE THE INCOME OF THE ASSESSEE IS MORE THAN RS. 30 LAKHS WHICH IS ILLEGAL AND BAD IN LAW. WE ALSO NOT E THAT THE LD DCIT ISSUED THE NOTICE U/S 142(1) OF THE INCOME TAX ACT, 1961 ALONG WITH THE QUESTIONNAIRE FIXING THE DATE OF HEARING ON 28/11/2014 AND PASSED THE AS SESSMENT ORDER U/S 143(3) DATED 30/03/2015 WITHOUT ISSUING THE NOTICE U/S 143 (2) OF INCOME TAX ACT, 1961 BY THE JURISDICTIONAL AUTHORITY WHICH IS ILLEGAL. FOR THAT WE RELY ON THE JUDGMENT OF HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS MALAYALA MANORAMA & CO. LTD [1983] 143 ITR 29/12 TAXMAN 253, HELD THAT THE BOA RD'S CIRCULAR THROUGH BINDING ON THE REVENUES OFFICERS CANNOT GO AGAINST THE PROV ISIONS OF THE ACT. WE NOTE THE PROVISIONS OF SECTION 119 OF THE INCOM E TAX ACT, 1961- INCOME TAX AUTHORITIES INSTRUCTIONS TO SUB-ORDINATE AUTHORIT IES. THE INSTRUCTION OF CBDT IS GIVEN BELOW: INSTRUCTION NO. 1/2011 [F. NO. 187/12/2010-IT(A-I)] , DATED 31.1.2011 REFERENCES HAVE BEEN RECEIVED BY THE BOARD FROM A L ARGE NUMBER OF TAXPAYERS, ESPECIALLY FROM MOFUSSIL AREAS, THAT THE EXISTING MONETARY LIM ITS FOR ASSIGNING CASES TO ITOS AND DCS /ACS IS CAUSING HARDSHIP TO THE TAXPAYERS, AS I T RESULTS IN TRANSFER OF THEIR CASES TO A DC/AC WHO IS LOCATED IN A DIFFERENT STATION, WHICH INCREASES THEIR COST OF COMPLIANCE. THE BOARD HAD CONSIDERED THE MATTER AND IS OF THE O PINION THAT THE EXISTING LIMITS NEED TO BE REVISED TO REMOVE THE ABOVE MENTIONED HARDSHIP. AN INCREASE IN THE MONETARY LIMITS IS ALSO CONSIDERED DESIRABLE IN VIEW OF THE INCREASE I N THE SCALE OF TRADE AND INDUSTRY SINCE 2001, WHEN THE PRESENT INCOME LIMITS WERE INTRODUCE D. IT HAS THEREFORE BEEN DECIDED TO INCREASE THE MONETARY LIMITS AS UNDER: METRO CHARGES FOR THE PURPOSE OF ABOVE INSTRUCTIONS SHALL BE AHMEDABAD, BANGALORE, CHENNAI, DELHI, KOLKATA, HYDERABAD, MUMBAI AND PUNE . THE ABOVE INSTRUCTIONS ARE ISSUED IN SUPER SESSION OF THE EARLIER INSTRUCTIONS AND SHALL BE APPLICABLE WITH EFFECT FROM 01.04.2011. WE NOTE THAT THE ASSESSEES RETURN INCOME IS RS. 30 ,86, 410/-. AS PER THE ABOVE INSTRUCTION, THE JURISDICTION FOR SCRUTINY ASSESSME NT VESTED TO THE ACS / DCS FROM 01/04/2011 AND THE NOTICE U/S 143(2) OF THE AC T SHOULD BE ISSUED BY THE AC /DC. IN THE PRESENT CASE, THE NOTICE WAS ISSUED BY THE INCOME TAX OFFICER, WARD- M/S M.V. FOOD INDUSTRIES LTD. ITA NO.1043/KOL/2018 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 5 55 5 1(3), KOLKATA ON 08/08/2013 WHICH IS MUCH AFTER THE CBDTS INSTRUCTION. WE NOTE THAT ISSUE OF NOTICE U/S 143(2) IS JURISDICTIONAL A ND IT SHOULD BE ISSUED ONLY BY THE AUTHORIZED OFFICER, LIKE ASSISTANT COMMISSIONER, DE PUTY COMMISSIONER, ITO ETC. IN THE ASSESSEES CASE THE NOTICE U/S 143(2) WAS ISSUE D BY ITO, WHO IS NOT AUTHORIZED BY THE ACT OR INSTRUCTION OF CBDT, HENCE IT WILL BE TREATED THAT NO NOTICE U/S 143(2) WAS ISSUED TO THE ASSESSEE AND CONSEQUENTLY THE ASSESSMENT PROCEEDINGS AND ASSESSMENT MADE BY ITO IS NULL AND VOID IN THE EYE OF LAW. THAT BEING SO, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY LD. CIT (A) HIS ORDER ON THIS ISSUE IS HEREBY UPHELD AND GROUNDS RAISED BY REVENUE IS DISM ISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 19.06.2019 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 19/06/2019 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. DCIT, CIRCLE-4(2), KOLKATA 2. M/S M.V. FOOD INDUSTRIES LTD. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES