JAYANT TIPNIS CONSULTANTS P.LTD, MUMBAI V. ITO 6(1)(1), MUMBAI

ITA 117/MUM/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71768 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 07-11-2013
• Assessment Year: 1997-1998
• Appeal Filed On: 06-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B P K
• Keywords: Opportunity of being heard; Period of limitation; Time period of passing order
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL J JJ J BENCH, BENCH, BENCH, BENCH, MUMBAI MUMBAI MUMBAI MUMBAI , . , . , ! ! ! ! '# '# '# '# BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM & & & & SHRI SHRI SHRI SHRI D. KARUNAKARA RAO D. KARUNAKARA RAO D. KARUNAKARA RAO D. KARUNAKARA RAO, AM , AM , AM , AM ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.117/MUM/2012 117/MUM/2012 117/MUM/2012 117/MUM/2012 ( $% $% $% $% & & & & / ASSESSMENT YEAR :1997-98) JAYANT TIPNIS CONSULTANTS PVT. LTD., 1050, SADGURU DARSHAN, NEW PRABHARDEVI ROAD, MUMBAI-400025 % % % % / VS. INCOME TAX OFFICER, WARD 6(1)(1), AAYAKAR BHAVAN, M. K. MARG, CHURCHGATE, MUMBAI-400020 #' ! ./ ( ./ PAN/GIR NO. :AAACJ2093H ( ') / APPELLANT APPELLANT APPELLANT APPELLANT) .. ( *+') / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) $% $%$% $% ,- ,- ,- ,- . / . / . / . / /ASSESSEE BY : SHRI PRAKASH PANDIT # # # # . / . / . / . / / REVENUE BY : SHRI B. P. K. PANDA % % % % . .. . -! -! -! -! / DATE OF HEARING : 4 TH DECEMBER 2013 01& 01& 01& 01& . .. .-! -! -! -! /DATE OF PRONOUNCEMENT: 4 TH DECEMBER 2013 '2 / O R D E R PER : , . . / VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 28.10.2011 OF COMMISSIONER OF INCOME TAX(APPEALS) F OR THE ASSESSMENT YEAR 1997-98. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN THIS APPEAL: 1. (A) ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) ERRED IN UPHOLDING THE DISALLOWA NCE OF INTEREST OF ` 461329/- ON THE GROUND THAT BORROWED FUNDS WER E UTILIZED FOR THE PURPOSE OTHER THAN THE BUSINESS AND THAT NO BOO KS OF ACCOUNTS WERE PRODUCED WHICH WERE MORE THAN TEN YEA RS OLD. (B) ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN L AW THE LEARNED CIT(A) ERRED IN HOLDING THAT SUFFICIENT OPPORTUNITY OF BEING HEARD WAS GIVEN BY ASSESSING OFFICER. ITA NO.117/M/2012 JAYANT TIPNIS CONSULTANTS PVT. LTD. 2 2. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 254 O F THE INCOME TAX ACT, 1961 BY THE INCOME TAX APPELLATE TRIBUNAL IS BARRED BY LIMITATION AND HENCE SHOULD BE ANNULLED. 3. FIRST WE TAKE UP THE GROUND NO. 2 WHEREIN THE AS SESSEE HAS RAISED THE ISSUE OF VALIDITY BEING BARRED BY LIMITATION OF ASSESSMENT ORDER PASSED BY THE A.O IN PURSUANT TO THE DIRECTIONS OF THIS TR IBUNAL. 4. WE HAVE HEARD THE LD. A.R AS WELL LD. D.R AND CO NSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. A.R OF THE ASS ESSEE HAS POINTED OUT THAT THE MATTER WAS SET ASIDE BY THIS TRIBUNAL TO T HE RECORD OF THE ASSESSING OFFICER VIDE ORDER DATED 31.10.2006 BUT T HE ASSESSING OFFICER COULD NOT PASS THE GIVING EFFECT ORDER U/S 143(3) R .W.S. 254 WITHIN THE PERIOD OF LIMITATION PRESCRIBED U/S 153(2A). THE LD . A.R HAS REFERRED THE SECOND PROVISO TO SECTION 153(2A) OF THE INCOME TAX ACT AND SUBMITTE3D THAT THE ASSESSING OFFICER HAS TO PASS THE GIVING E FFECT ORDER BEFORE THE EXPIRY OF 9 MONTHS FROM THE END OF THE FINANCIAL YE AR IN WHICH THE ORDER U/S 254 IS RECEIVED BY THE CHIEF COMMISSIONER OR CO MMISSIONER AS CASE MAY BE. THE LD. A.R HAS THUS, SUBMITTED THAT THE OR DER PASSED BY THE A.O ON 5.12.2008 IS BEYOND THE LIMITATION PERIOD WHICH EXPIRED ON 31.12.2007. THUS, THE LD. A.R HAS SUBMITTED THAT THE ORDER PASS ED BY THE A.O GIVING EFFECT TO THE ORDER OF THIS TRIBUNAL IS A NULLITY A ND IS LIABLE TO BE QUASHED. ON THE OTHER HAND, THE LD. D.R HAS SUBMITTED THAT T HE ASSESSING OFFICER HAS MENTIONED IN THE ORDER GIVING EFFECT THAT THE O RDER OF THE TRIBUNAL IS DATED 21.11.2007 AND THEREFORE, THE IMPUGNED ORDER IS WITHIN THE PERIOD OF LIMITATION. IN REBUTTAL THE LD. A.R HAS FILED TH E GIVING EFFECT ORDER FOR THE ASSESSMENT YEARS 1994-95 AND 1998-99 AND SUBMITTED THAT THE A.O HAS ITA NO.117/M/2012 JAYANT TIPNIS CONSULTANTS PVT. LTD. 3 CLEARLY MENTIONED THE DATE OF THE TRIBUNAL ORDER AS 31.10.2006 IN BOTH THESE GIVING EFFECT ORDERS FOR THE ASSESSMENT YEAR 1994-95 AND 1998-99 BECAUSE THE TRIBUNAL ORDER IS COMPOSITE FOR ALL THR EE YEARS INCLUDING THE ASSESSMENT YEAR 1997-98. THUS, THE LD. A.R HAS SUBM ITTED THAT THE DATE MENTIONED BY THE A.O IN THE IMPUGNED ORDER IS INCOR RECT AND CONTRARY TO THE RECORD AS WELL AS A.OS OWN ORDERS FOR THE ASSE SSMENT YEARS 1994-95 AND 1998-99. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND CARE FUL PERUSAL OF THE RELEVANT RECORD WE NOTE THAT THE TRIBUNAL VIDE ITS COMPOSITE ORDER FOR THE ASSESSMENT YEARS 1994-94, 1997-98 AND 1998-99 SET A SIDE THE ISSUE OF ASSESSIBILITY OF RENTAL INCOME U/S 23(1)(A) AND SEC TION 24(1)(X) AS EXISTS AT THE RELEVANT TIME TO THE RECORD OF THE ASSESSING OF FICER. THUS, THERE IS NO AMBIGUITY ABOUT THE ORDER OF THIS TRIBUNAL PASSED O N 31.10.2006 THOUGH THE A.O HAS INCORRECTLY MENTIONED THE DATE OF ORDER IN THE IMPUGNED ORDER AS 21.11.2007. FURTHER THERE IS NO REASON OF ANY CO NFUSION ABOUT THE DATE OF THE ORDER OF THE TRIBUNAL BEING 31.10.2006 WHICH HAS BEEN DULY RECORDED BY THE A.O IN THE GIVING EFFECT ORDER FOR THE ASSESSMENT YEARS 1994-95 AND 1998-99 IN PARA 3 AS UNDER: 3. THE DEPARTMENT THEN PREFERRED AN APPEAL TO THE HONBLE TRIBUNAL ON THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF ` 4,61,280 /- MADE BY THE A.O U/S 23(1)(B) IGNORING THE FACT THE ASSESSEE HAD LET OUT THE PREMISES ON RENT TO THE TENANTS DURING THE RELEVANT YEAR AND THE RENT OF ` 5,76,600/- WAS RECEIVABLE BY THE ASSESSEE BEING THE OWNER OF THE PREMISES. THE HONBLE TRIBUNAL D BEN CH, MUMBAI VIDE ORDER NO. ITA/3993, 3994 & 3995/MUM/2003 DATED 31.10.2006 HAS CONFIRMED THE ADDITION MADE BY THE A .O OF ` 4,61,280/- U/S 23(1)(B) AND HAS SET ASIDE THE ISSUE REGARDING THE CLAIM OF THE ASSESSEE U/S 24(X) OF THE I.T. ACT. ITA NO.117/M/2012 JAYANT TIPNIS CONSULTANTS PVT. LTD. 4 6. IT IS DISCERNABLE FROM THE IMPUGNED ORDER OF T HE ASSESSING OFFICER AS WELL AS ORDERS FOR THE ASSESSMENT YEARS 1994-95 AND 1998-99 THAT THE INCORRECT DATE OF ORDER STATED IN PARA 3.1 OF THE A SSESSMENT ORDER IS ONLY WITH A VIEW TO COVER UP THE DELAY AND LATCHES ON TH E PART OF THE A.O IN GIVING EFFECT THE ORDER OF THE TRIBUNAL. THE ASSESS ING OFFICER HAS RECORDED IN PARA 3.1 AS UNDER: 3.1 THE HONBLE TRIBUNAL D BENCH, MUMBAI VIDE OR DER NO. ITA/3994 & 3995/MUM/2003 DATED 21.11.2007 HAS HELD THAT THIS ISSUE REQUIRES FRESH EXAMINATION BY THE A.O AND THE REFORE, SET ASIDE THE ORDER OF THE CIT(A) AND RESTORED THE MATT ER TO THE FILE OF THE A.O FOR ITS READJUDICATION AFRESH IN THE LIG HT OF ACCOUNTS AND BANK STATEMENTS OF THE ASSESSEE. 7. IT IS MANIFEST FROM THE RELEVANT PART OF THESE O RDERS THAT THE A.O HAS CORRECTLY MENTIONED THE ITA NOS. IN WHICH THE TRIBU NAL PASSED THE ORDER BUT THE A.O HAS FAILED TO PASS THE GIVING EFFECT OR DER WITHIN THE PERIOD OF LIMITATION FOR THE ASSESSMENT YEAR 1997-98 AND THER EFORE, THE DATE OF ORDER OF THE TRIBUNAL HAS BEEN DELIBERATELY MENTION ED INCORRECT. OTHERWISE IN THE OTHER TWO ASSESSMENT YEARS I.E. 19 94-95 AND 1998-99 THE GIVING EFFECT ORDERS HAVE BEEN PASSED WITHIN TH E LIMITATION AND THEREFORE, THE A.O HAS MENTIONED THE CORRECT DATE O F TRIBUNAL ORDER. THERE IS NO DISPUTE ABOUT THE PERIOD OF LIMITATION AS PRE SCRIBED U/S 153(2A) AS EXIST AT THE RELEVANT POINT OF TIME THAT AN ORDER O F FRESH ASSESSMENT IN PURSUANCE OF AN ORDER INTER ALIA U/S 254 MAY BE MAD E AT ANY TIME BEFORE THE EXPIRY OF 9 MONTHS FROM THE END OF THE FINANCIA L YEAR IN WHICH THE ORDER PASSED U/S 254 IS RECEIVED BY THE CHIEF COMMI SSIONER OR COMMISSIONER AS CASE MAY BE. IN THIS CASE THE TRIBU NAL HAS PASSED THE ORDER U/S 254 ON 31.10.2006 AND THEREFORE, THE PERI OD OF LIMITATION ITA NO.117/M/2012 JAYANT TIPNIS CONSULTANTS PVT. LTD. 5 RECKONS FROM THE END OF THE FINANCIAL YEAR I.E. 31. 3.2007 AND ACCORDINGLY, THE GIVING EFFECT ORDER WOULD HAVE BEEN PASSED ON O R BEFORE 31.12.2007. SINCE, THE IMPUGNED ORDER HAS BEEN PASSED ON 5.12.2 008 WHICH IS BEYOND THE PERIOD OF LIMITATION PRESCRIBED U/S 253(2A), TH EREFORE, THE SAME IS NULL AND VOID. HENCE WE QUASH THE IMPUGNED ORDER DATED 5 .12.2008 PASSED BY THE A.O U/S 153(3) R.W.S. 254. 8. AS REGARDS GROUND NO. 1 SINCE THE ASSESSMENT ORD ER PASSED U/S 153(3) R.W.S 254 HAS BEEN QUASHED THEREFORE, WE DO NOT PROPOSE TO DECIDE THE GROUND NO. 1 AS BECOME INFRUCTUOUS. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING I.E. 4 TH DAY OF DECEMBER 2013 SD/- SD/- ( . ) ! '# (D. KARUNAKARA RAO) ACCOUNTANT MEMBER ( ) $ '# (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 4 TH DECEMBER 2013 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI