The Narasimha Mills Private Ltd., Coimbatore V. DCIT, CHENNAI

ITA 1134/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8580 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 27-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: S VIDYA
• Keywords: Period of limitation
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , . , $ % BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A.NO.1134/MDS/2016 ( / ASSESSMENT YEAR: 2008-09) M/S. THE NARASIMHA MILLS PVT.LTD., 9/1, METTUPALAYAM ROAD, NARASIMMANAICKENPALAYAM, COIMBATORE-641 031. VS THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I(1), 46, M.G.ROAD, CHENNAI-34. PAN:AABCT2058D ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MS. S.VIDYA, C.A /RESPONDENT BY : MR. SUPRIYO PAL, JCIT /DATE OF HEARING : 6 TH JULY, 2016 /DATE OF PRONOUNCEMENT : 15 TH SEPTEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY T HE ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCO ME TAX CENTRAL-1, CHENNAI DATED 28.03.2016 IN C.NO.1523/C- I/15-16 PASSED UNDER SECTION 143(3) R.W.S. 147 & 263 OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS A PPEAL; HOWEVER THE CRUX OF THE ISSUE IS THAT THE LEARNED P RINCIPAL COMMISSIONER OF INCOME TAX HAS ERRED IN SETTING ASI DE THE ORDER OF THE LEARNED ASSESSING OFFICER BY INVOKING THE 2 ITA NO.1134/MDS/2016 PROVISIONS OF SECTION 263 OF THE ACT WITHOUT ANY JU RISDICTION WHEN IT IS BARRED BY LIMITATION. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF SPINNIN G MILL FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008-09 ON 29.09.2009 DECLARING LOSS OF RS.1,09,27,756/-. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143( 2) WAS ISSUED TO THE ASSESSEE ON 07.09.2009. THEREAFTER T HE ASSESSMENT WAS COMPLETED BY THE LEARNED ASSESSING O FFICER UNDER SECTION 143(3) OF THE ACT ON 15.12.2010 DISALLOWING THE EXPENDITURE OF RS.73,84,510/- CLAIMED BY THE ASSESS EE AS COMPENSATION. SUBSEQUENTLY, THE CASE WAS ONCE AGAIN TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED O N 26.03.2014 WHEREIN THE LEARNED ASSESSING OFFICER MADE FURTHER ADDITIONS TOWARDS DIFFERENCE IN RENTAL INCO ME OF RS.3,94,751/-, DISALLOWANCE OF PROFESSIONAL CHARGES RS.10,13,880/- AND DISALLOWANCE OF MAINTENANCE EXPE NDITURE 13,72,992/-. PURSUANT TO THIS ASSESSMENT ORDER DATE D 26.03.2014 , THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX INVOKED HIS POWERS UNDER SECTION 263 OF THE AC T VIDE HIS 3 ITA NO.1134/MDS/2016 ORDER DATED 28.03.2016 AND SET ASIDE THE ASSESSMENT ORDER FOR MAKING FURTHER ENQUIRIES AND VERIFICATIONS REGA RDING APPLICABILITY OF SECTION 79, DISALLOWANCE OF INTERE ST EXPENDITURE, RENTAL OF PLANT & MACHINERY TO M/S. TH IRUVALLUVAR TEXTILES PVT.LTD., AND APPLICABILITY OF WEALTH TAX. AGGRIEVED BY THE ORDER OF THE LEARNED PRINCIPAL CIT UNDER SEC TION 263 OF THE ACT, THE ASSESSEE IS IN APPEAL BEFORE US. 4. AT THE OUTSET, THE LEARNED AUTHORIZED REPRESENTA TIVE SUBMITTED THAT THE LEARNED PRINCIPAL COMMISSIONER O F INCOME TAX HAS INVOKED HIS POWERS UNDER SECTION 263 OF THE ACT BEYOND THE PERIOD OF LIMITATION OF TWO YEARS FROM T HE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED. THE LEARNED AUTHORIZED REPRESENTATIVE F URTHER ARGUED STATING THAT THE ORDER SOUGHT TO BE REVISED SHOULD BE TAKEN AS THE ORIGINAL ORDER PASSED UNDER SECTION 143(3) OF THE ACT WHICH IN THE CASE OF THE ASSESSEE WAS ON 15.12.2010 . THE LEARNED AUTHORIZED REPRESENTATIVE RELIED IN THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. ALAGENDRAN FINANCE LTD. REPORTED IN 293 ITR 001 TO JUSTIFY HIS STANT. 4 ITA NO.1134/MDS/2016 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NO T CONTROVERT TO THE SUBMISSIONS OF THE LEARNED AUTHOR IZED REPRESENTATIVE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. AS POINT ED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE THE HONBLE A PEX COURT IN THE ABOVE MADE DECISION HAS MADE IT CLEAR AS FOLLOWS:- IN RESPECT OF AN ISSUE WHICH WAS NOT SUBJECT MATTER OF REASSESSMENT, LIMITATION UNDER SECTION 263(2) WOULD RUN FROM THE DATE OF ORIGINAL ASSESSMENT AND REVISIONAL PROCEEDINGS INITIATED IN RESPECT OF SUCH ISSUE BEYOND THE PERIOD OF TWO YEARS FROM THE DATE OF ORIGINAL ASSESSMENT WERE BARRED BY LIMITATION. 7. FROM THE FACTS OF THE CASE, IT IS EVIDENT AND NO T DISPUTED THAT THE ORIGINAL ORDER PASSED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT W AS ON 15.12.2010 , WHILE AS THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS PASSED ORDERS UNDER SECTION 263 OF T HE ACT ON 28.03.2016 WHICH IS WELL BEYOND THREE YEARS PERIOD THEREBY VIOLATING THE PROVISIONS OF SECTION 263(2) OF THE ACT. 5 ITA NO.1134/MDS/2016 ACCORDINGLY, THE ORDER PASSED BY THE LEARNED PRINCI PAL COMMISSIONER OF INCOME TAX IS BARRED BY LIMITATION. THEREFORE, WE HEREBY QUASH THE ORDER PASSED BY THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT DATED 28.03.2016 IN THE CASE OF THE ASSESSE E. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 15 TH SEPTEMBER, 2016 SD/- SD/- ( . ) ( . ) (G.PAVAN KUMAR) ( A.MOHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 15 TH SEPTEMBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF