ACIT, Trichy V. M/s. Harihar Dwellings Pvt. Ltd., Trichy

ITA 1056/CHNY/2011

• Counselvise Citation: 105621714 RSA 2011
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 16-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 08-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHAJI P JACOB SRAR
• Assessee Lawyers: S KEERTHIRAJAN
• Keywords: Rectification of order
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.A. NO. 1056/MDS/2011 (ASSESSMENT YEAR : 2005-06) THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I(1), TRICHY. (APPELLANT) V. M/S HARIHAR DWELLINGS PVT. LTD., NO.1, RAJA COLONY, COLLECTORS OFFICE ROAD, TRICHY 620 001. PAN : AABCD8064D (RESPONDENT) APPELLANT BY : SHRI SHAJI P. JACOB, SR-AR RESPONDENT BY : SHRI S. K EERTHIRAJAN, C.A. DATE OF HEARING : 16.11.2011 DATE OF PRONOUNCEMENT : 18.11.2011 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE REVENUE, IT HAS RAISE D SEVEN GROUNDS OF APPEAL AS ALSO ONE ADDITIONAL GROUND OF APPEAL. THE ADDITIONAL GROUND OF APPEAL QUESTIONS THE POWER OF CIT(APPEALS) TO ADJUDICATE THE ISSUE REGARDING DEDUCTION UNDER SECT ION 80-IB(10) OF I.T.A. NO. 1056/MDS/11 2 INCOME-TAX ACT, 1961 (IN SHORT THE ACT). SINCE T HIS GOES TO THE VERY ROOT OF JURISDICTION OF LD. CIT(APPEALS) TO ADJUDIC ATE THE APPEAL BEFORE HIM, WE ARE INCLINED TO ADMIT IT. 2. LEARNED D.R. IN SUPPORT OF THE ADDITIONAL GROUND SUBMITTED THAT LD. CIT(APPEALS) HAD GONE INTO THE ISSUE OF DEDUCTI ON UNDER SECTION 80-IB(10) OF THE ACT CLAIMED BY THE ASSESSEE WHEN T HE APPEAL FILED BY THE ASSESSEE WAS AGAINST AN ORDER DATED 27.5.200 8 UNDER SECTION 154 OF THE ACT, PASSED BY THE ASSESSING OFFICER. A CCORDING TO HIM, THE SAID ORDER OF THE ASSESSING OFFICER HAD NOT, IN ANY WAY, MADE ANY RECTIFICATION IN THE ORIGINAL ORDER PASSED UNDER SE CTION 143(3) OF THE ACT, WITH REGARD TO THE CLAIM OF DEDUCTION UNDER SE CTION 80-IB(10) OF THE ACT, BUT HAD ONLY CORRECTED AN ERROR IN THE APP LICATION OF THE RATE OF TAX. 3. LEARNED A.R. IN SUPPORT OF THE ORDER OF LD. CIT( APPEALS) SUBMITTED THAT LD. CIT(APPEALS) HAD ADJUDICATED THE ISSUE REGARDING DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT CORREC TLY SINCE ASSESSEE HAD SPECIFICALLY MENTIONED BEFORE LD. CIT( APPEALS) THAT ITS APPEAL WAS BOTH AGAINST ORDER UNDER SECTION 143(3) OF THE ACT FOR THE I.T.A. NO. 1056/MDS/11 3 IMPUGNED ASSESSMENT YEAR AS WELL AS RECTIFICATION O RDER DATED 27.5.2008. A DETAILED WRITTEN SUBMISSION WAS ALSO FILED BY THE ASSESSEE JUSTIFYING HOW ASSESSEE WAS ELIGIBLE FOR C LAIMING DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT IN PROPORTION TO THE FLATS HAVING AREA LESS THAN 1500 SQ. FT. 4. WE HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW AS WELL AS HEARD THE RIVAL SUBMISSIONS CAREFULLY. THE CIT(APP EALS) IN THE APPEAL FILED BEFORE HIM WAS ADJUDICATING AGAINST A REVISIO N ORDER PASSED BY THE ASSESSING OFFICER AND THIS IS CLEAR FROM PARA 1 OF THE ORDER OF LD. CIT(APPEALS), WHICH IS REPRODUCED HEREUNDER:- THE PRESENT APPEAL HAS BEEN FILED AGAINST THE REVIS ION ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME -TAX, COMPANY CIRCLE-I, TRICHY U/S. 154 OF THE INCOME TAX A CT, 1961 DATED 27.05.2008 IN THE APPELLANTS CASE FOR THE AS SESSMENT YEAR 2005-06. IN RESPONSE TO NOTICE OF HEARING SHRI S. KEERTHI RAJAN, CHARTERED ACCOUNTANT ATTENDED AND ARGUED THE APPEAL . 5. A PERUSAL OF FORM NO. 35 FILED BEFORE LD. CIT(AP PEALS), WHICH WAS PRODUCED BY LEARNED A.R. CLEARLY SHOWS THAT THE SECTION UNDER WHICH ASSESSING OFFICER PASSED THE ORDER APPEALED A GAINST, WAS SECTION 154 OF THE ACT. SO, EFFECTIVELY ASSESSEE H AD FILED APPEAL AGAINST THE ORDER DATED 27.5.2008 OF THE ASSESSING OFFICER UNDER I.T.A. NO. 1056/MDS/11 4 SECTION 154 OF THE ACT. THE POINTS CONSIDERED BY T HE ASSESSING OFFICER IN SUCH RECTIFICATION ORDER, AS IS CLEAR FR OM THE BODY OF SUCH ORDER, CLEARLY SHOW THAT THERE WAS NOTHING REGARDIN G DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT DEALT WITH THEREIN. T HE BODY OF THE ORDER REPRODUCED HEREUNDER WOULD CLEARLY SHOW THIS:- IN THE ASSESSMENT MADE U/S 143(3) ON 10/12/2007 FOR THE ASSESSMENT YEAR 2005-06, TAX HAS BEEN WORKED WRO NGLY @ 7.5% ON THE ASSESSED INCOME AS AGAINST THE APPLICAB LE RATE OF 35%. A NOTICE U/S 154 WAS ISSUED ON 13/05/2008 INFORMING THE ASSESSEE COMPANY TO ADOPT CORRECT RATE OF TAX @ 35%, POSTING THE CASE FOR HEARING ON 23/05/2008. THE ASSESSEES REPRESENTATIVE HAD APPEARED ON 23/05/2008 AND AGREED FOR ADOPTING THE CORRECT RATE OF TAX @ 35% ON THE INCOME ASSESSED. WHILE ARRIVING THE TOTAL INCOME IN THE 143(3) ORDER , THE INCOME ADMITTED BY THE ASSESSEE WAS WRONGLY TAKEN AT RS.27,46,490/- INSTEAD OF RS.3,54,903/- AND DISALLO WANCE WERE MADE ON THE SUM OF RS.27,46,490/-. FURTHER, THE CLAIM OF SET OFF OF CARRY FORWARD LOSS OF RS.4,11,469/- PERTAINING TO A.Y 2004-05 HAS BEEN OM ITTED TO BE TAKEN IN TO ACCOUNT IN THE ASSESSMENT MADE. ASSESSING OFFICER HAD SIMPLY EFFECTED A CHANGE IN R ATE OF TAX THROUGH SUCH RECTIFICATION. SO, THE QUESTION THAT COULD AR ISE FROM SUCH ORDER, WAS CLEARLY CONFINED TO THE CHANGE IN RATE OF TAX W HETHER SUCH I.T.A. NO. 1056/MDS/11 5 CHANGE WOULD FALL WITHIN THE REALMS OF A POSSIBLE R ECTIFICATION UNDER SECTION 154 OF THE ACT. AS AGAINST THIS, ASSESSEE HAD RAISED VARIOUS GROUNDS IN ITS APPEAL REGARDING ITS ELIGIBILITY FOR CLAIMING DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT AND LD. CIT(APPE ALS) WITHOUT RECOGNIZING THAT ORDER APPEALED AGAINST, HAD NOT DE ALT WITH SUCH AN ISSUE, ADJUDICATED SUCH GROUNDS RAISED BY THE ASSES SEE. ASSESSEE WAS NOT IN APPEAL BEFORE LD. CIT(APPEALS) AGAINST T HE ORDER UNDER SECTION 143(3) OF THE ACT FOR THE IMPUGNED ASSESSME NT YEAR BUT ON THE OTHER HAND WAS IN APPEAL AGAINST THE RECTIFICAT ION ORDER DATED 27.5.2008 EFFECTED BY THE A.O. WE ARE, THEREFORE, OF THE OPINION THAT LD. CIT(APPEALS) ERRED AND WENT BEYOND JURISDICTION IN ADJUDICATING AN ISSUE WHICH DID NOT ARISE OUT OF THE ORDER IN APPEA L BEFORE HIM. WE, THEREFORE, HAVE NO HESITATION TO QUASH THE ORDER PA SSED BY LD. CIT(APPEALS) AND RESTORE THE ORDER OF THE A.O. DATE D 27.5.2008 PASSED UNDER SECTION 154 OF THE ACT. 6. AS FAR AS THE WRITTEN SUBMISSIONS FILED BY THE A SSESSEE IS CONCERNED, THESE ARE ON THE ISSUE REGARDING CLAIM O F DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT. AS ALREADY MENTIONED BY US, THIS WAS NOT AN ISSUE DEALT WITH BY THE A.O. IN HIS RECTIFIC ATION ORDER. SINCE WE I.T.A. NO. 1056/MDS/11 6 ARE ALLOWING ADDITIONAL GROUND OF APPEAL OF THE REV ENUE, THERE IS NO NECESSITY TO ADJUDICATE ON THE OTHER GROUNDS RAISED BY IT. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS AL LOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 18 TH NOVEMBER, 2011. SD/- SD/- (HARI OM MARATHA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 18 TH NOVEMBER, 2011. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A), TIRUCHIRAPALLI (4) CIT-I, TRICHY (5) D.R. (6) GUARD FILE