Sivagami Holdings Private Limited, CHENNAI V. ACIT, CHENNAI

ITA 1121/CHNY/2015

• Counselvise Citation: 112121714 RSA 2015
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 19-11-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 12-05-2015
• Court: TRIBUNAL
• Department Lawyers: DR U ANJANEYALU
• Assessee Lawyers: R RAJASEKARAN
• Keywords: Revision of order
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1121/MDS/2015 / ASSESSMENT YEAR : 2010-11 M/S SIVAGAMI HOLDINGS PVT. LTD 202, ANNA SALAI CHENNAI 600 002 VS. THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE VI(3) CHENNAI [PAN AAECS 3279 A ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI R. RAJASEKARAN, CA /RESPONDENT BY : DR. U. ANJANEYALU, CIT / DATE OF HEARING : 19 - 1 1 - 2015 ! / DATE OF PRONOUNCEMENT : 27 - 11 - 2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEEE IS DIRECTED AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME-TAX-6, CHE NNAI, DATED 4.3.2015 PASSED U/S 263 OF THE INCOME-TAX ACT, AND PERTAINS TO ASSESSMENT YEAR 2010-11. 2. SHRI R. RAJASEKARAN, LD. REPRESENTATIVE FOR THE AS SESSEE SUBMITTED THAT THE PRINCIPAL COMMISSIONER FOUND THA T THE INCOME ITA NO.1121/15 :- 2 -: EARNED BY THE ASSESSEE AT MALAYSIA WAS NOT TAXED B Y THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT. THEREFORE , THE PRINCIPAL CIT FOUND THAT THERE WAS AN ERROR IN THE ORDER OF THE A SSESSING OFFICER WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE . ACCORDINGLY, THE PRINCIPAL CIT DIRECTED THE ASSESSING OFFICER TO RED O THE ASSESSMENT BY INCLUDING THE INCOME EARNED BY THE ASSESSEE AT MAL AYSIA. REFERRING TO THE ORDER OF THE PRINCIPAL CIT, MORE PARTICULARL Y AT PAGE 2, THE LD. REPRESENTATIVE SUBMITTED THAT FOR THE EARLIER ASSES SMENT YEARS VIZ. 2000-01, 2001-02, 2002-03 AND 2005-06, THIS TRIBUNA L BY AN ORDER DATED 31.5.2011 FOUND THAT THE MALAYSIAN INCOME CAN NOT BE LIABLE FOR TAXATION IN INDIA. A SIMILAR VIEW WAS TAKEN IN AS SESSEES OWN CASE FOR ASSESSMENT YEARS 2006-07, 2008-09 AND 2009-10. WHE N THE ORDER OF THIS TRIBUNAL WAS BROUGHT TO THE NOTICE OF THE PRIN CIPAL CIT, HE FOUND THAT THE ORDER OF THIS TRIBUNAL WAS NOT ACCEPTED BY THE DEPARTMENT AND ITS APPEAL IS PENDING BEFORE THE HIGH COURT. T HEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, WHEN THE TRIBUNAL DECIDE D THE MATTER AND FOUND THAT MALAYSIAN INCOME IS NOT TAXABLE IN INDIA , THE PRINCIPAL CIT CANNOT SAY THAT THE ORDER OF THE ASSESSING OFFICER WHICH EXCLUDED MALAYSIAN INCOME IS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF THE REVENUE. 3. ON THE CONTRARY, DR. U.ANJANEYALU, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT IN THE EARLIER ASSESS MENT YEARS, AS ITA NO.1121/15 :- 3 -: POINTED OUT BY THE LD. REPRESENTATIVE, THIS TRIBUNA L FOUND THAT THE MALAYSIAN INCOME IS NOT TAXABLE IN INDIA. HOWEVER, THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THIS TRIBUNAL BEFORE THE HIGH COURT AND THAT IS PENDING. IF THE PRINCIPAL CIT HAS NOT EXERCISED HIS POWER U/S 263 AND THE HIGH COURT ALLOWED THE APPEAL OF TH E REVENUE IN A LATER STAGE THEN THE REVENUE MAY NOT HAVE ANY REMED Y TO ASSESS THE INCOME WHICH WAS EARNED BY THE ASSESSEE AT MALAYS IA. THEREFORE, TO KEEP THE MATTER ALIVE, THE PRINCIPAL CIT EXERCIS ED HIS POWER U/S 263 OF THE ACT AND DIRECTED THE ASSESSING OFFICER TO R EDO THE ASSESSMENT BY INCLUDING THE MALAYSIAN INCOME TO THE TAXABLE IN COME OF THE ASSESSEE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FOR EXERCISING POWERS U/S 263 OF THE ACT, TWO PRECONDITIONS ARE TO BE SAT ISFIED I.E THE ORDER OF THE ASSESSING OFFICER SHALL BE ERRONEOUS, AND IT SHOULD BE PREJUDICIAL TO THE INTEREST OF THE REVENUE. BEFORE US, THE ONL Y REASON FOR EXERCISING THE REVISIONAL JURISDICTION BY THE PRINC IPAL CIT IS THAT MALAYSIAN INCOME WAS NOT SUBJECTED TO TAX IN THE AS SESSMENT ORDER. THE FACT REMAINS THAT IN THE EARLIER ASSESSMENT PRO CEEDINGS, THE MATTER REACHED BEFORE THIS TRIBUNAL AND THIS TRIBUN AL FOUND THAT THE MALAYSIAN INCOME CANNOT BE THE SUBJECT MATTER OF TA XATION IN INDIA. WHEN THIS TRIBUNAL FOUND THAT MALAYSIAN INCOME CANN OT BE TAXED IN ITA NO.1121/15 :- 4 -: INDIA, THE PRINCIPAL CIT CANNOT FIND FAULT WITH TH E ASSESSING OFFICER FOR NOT INCLUDING THE INCOME EARNED IN MALAYSIA FOR THE YEAR UNDER CONSIDERATION. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER PASSED THE ORDER IN CONSONANCE WI TH THE DECISION TAKEN BY THIS TRIBUNAL FOR THE EARLIER ASSESSMENT Y EARS, THEREFORE, THE ORDER PASSED BY THE ASSESSING OFFICER IS NOT ERRON EOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. MERELY BECAUSE THE APPEAL IS PENDING BEFORE THE HIGH COURT AGAINST THE ORDER OF THIS TRI BUNAL FOR THE EARLIER ASSESSMENT YEARS, THAT CANNOT BE A REASON TO REVISE THE ORDER OF THE ASSESSING OFFICER U/S 263 OF THE ACT. IN VIEW OF THE ABOVE, WE ARE UNABLE TO UPHOLD THE ORDER OF THE PRINCIPAL CIT. A CCORDINGLY, THE SAME IS SET ASIDE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2015, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 27 TH NOVEMBER, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF