International Book Distributing Co., Lucknow V. Income Tax Officer-2(1), Lucknow

ITA 118/LKW/2014

• Counselvise Citation: 11823714 RSA 2014
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 27-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S C AGRAWAL
• Keywords: Revision of order; Reasonable cause; Condonation of delay
• Section: 40A(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.118/LKW/2014 ASSESSMENT YEAR:2009-10 INTERNATIONAL BOOK DISTRIBUTING CO. LUCKNOW V. INCOME TAX OFFICER 2(1) LUCKNOW TAN/PAN:AABFI0993F (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. S. C. AGRAWAL, ADVOCATE RESPONDENT BY: SHRI. AMIT NIGAM, D.R. DATE OF HEARING: 08 10 2015 DATE OF PRONOUNCEMENT: 06 11 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX PASSED UNDER SECTION 263 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT'), INTER ALIA, ON THE FOLLOWING GROUNDS:- 1. THAT THE ORDER PASSED U/S 263 (1) OF THE INCOME TAX ACT IS UNTENABLE IN LAW AND BEYOND JURISDICTION. 2. THAT THE LD. CIT ERRED AND ACTED BEYOND HIS POWER TO REVISE THE ASSESSMENT ORDER DATED 21.12.2011 U/S 143 (3) OF THE INCOME TAX ACT. 3. THAT THE LD. CIT WAS WRONG IN HOLDING THAT THE ASSESSMENTS ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. :- 2 -: 4. THAT THE LD. CIT WAS WRONG IN HOLDING THAT 'THE ASSESSING OFFICER CONCLUDED ASSESSMENT WITHOUT INQUIRING AND WITHOUT EXAMINING THE ISSUE IN LIGHT OF STATUTORY PROVISIONS'. 5. THAT THE LD. CIT WAS WRONG IN HOLDING THAT THE PAYMENT IN CASH RS.95,550/- WAS NOT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 40A (3) OF INCOME TAX ACT. 6. THAT THE CASE CITED BY THE LD. CIT ARE NOT APPLICABLE TO THE PRESENT CASE AND WERE WRONGLY REALISED ON. 7. THAT THE ORDER OF LD. CIT IS AGAINST FACTS AND LAW. 2. DURING THE COURSE OF HEARING, IT HAS BEEN BROUGHT TO OUR NOTICE THAT THE APPEAL IS FILED LATE BY 24 DAYS, FOR WHICH ASSESSEE HAS MOVED AN APPLICATION FOR CONDONATION OF DELAY ALONG WITH MEDICAL CERTIFICATE OF THE ASSESSEE. 3. HAVING CAREFULLY EXAMINED THE CONTENTS OF THE APPLICATION FOR CONDONATION OF DELAY AND THE EVIDENCE FILED ALONG WITH IT, WE ARE OF THE VIEW THAT THERE IS A REASONABLE CAUSE FOR DELAY IN FILING OF THE APPEAL. WE ACCORDINGLY CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 4. SO FAR AS THE ISSUE ON MERIT IS CONCERNED, WE FIND THAT THE LD. COMMISSIONER OF INCOME-TAX HAS SET ASIDE THE ORDER OF THE ASSESSING OFFICER ONLY ON THE POINT THAT THE ASSESSING OFFICER HAS NOT EXAMINED THE CASH PAYMENTS UNDER THE HEAD EXHIBITION EXPENSES IN THE LIGHT OF PROVISIONS OF SECTION 40A(3) OF THE ACT. THEREFORE, THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, AGAINST WHICH THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT UNDER THE HEAD EXHIBITION EXPENSES, THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.2,65,25/- WHICH HAVE BEEN CLAIMED AS EXPENDITURE IN THE PROFIT AND LOSS ACCOUNT. UNDER THIS HEAD OF :- 3 -: EXPENDITURE, THREE CASH PAYMENTS I.E. RS.46,300/-; RS.27,400/- AND RS.21,850/- WERE DEBITED ON 27.8.2008; 20.1.2009 AND 22.2.2009 RESPECTIVELY. WITH REGARD TO THESE CASH PAYMENTS, THE ASSESSING OFFICER HAS RAISED A QUERY VIDE HIS LETTER DATED 16.12.2011 AND IN RESPONSE THERETO, THE ASSESSEE HAS FURNISHED COMPLETE DETAILS BEFORE THE ASSESSING OFFICER VIDE ITS LETTER DATED 20.12.2011. ALONG WITH THIS LETTER, THE ASSESSEE HAS FURNISHED THE DETAILS OF EXPENSES IN ORDER TO JUSTIFY THE NATURE OF EXPENSES INCURRED IN CASH. THE ASSESSING OFFICER HAS EXAMINED THE REPLY OF THE ASSESSEE AND THEREAFTER DID NOT MAKE DISALLOWANCE FOR THE SAME. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT SINCE THE ASSESSING OFFICER HAS ALREADY APPLIED HIS MIND TO THIS NATURE OF EXPENSES, THE SAME CANNOT BE REVISED UNDER SECTION 263 OF THE ACT. THEREFORE, THE ORDER OF THE LD. COMMISSIONER OF INCOME- TAX DESERVES TO BE SET ASIDE. 5. THE LD. D.R., ON THE OTHER HAND, HAS PLACED RELIANCE UPON THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX. 6. HAVING CAREFULLY EXAMINED THE ORDERS OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE LD. COMMISSIONER OF INCOME-TAX HAS REVISED THE ORDER UNDER SECTION 263 OF THE ACT ONLY ON THE ISSUE OF CASH PAYMENTS, HAVING NOTED IT TO BE IN VIOLATION OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT. WITH RESPECT TO THESE EXPENSES, THE ASSESSING OFFICER HAS ISSUED A QUESTIONNAIRE VIDE LETTER DATED 16.12.2011, THROUGH WHICH THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF EXPENSES UNDER THE HEADS CONVEYANCE EXPENSES; ELECTRICITY EXPENSES; EXHIBITION EXPENSES; PRINTING AND STATIONERY EXPENSES, ETC. AND IN RESPONSE THERETO THE ASSESSEE HAS FILED THE REPLY BEFORE THE ASSESSING OFFICER VIDE ITS LETTER DATED 20.12.2011 AND ALSO FURNISHED THE DETAILS OF EXPENSES BEFORE THE ASSESSING OFFICER. COPY OF THE DETAILS OF EXPENSES IS ALSO PLACED BEFORE US, IN WHICH ONLY ON THREE POINTS THE :- 4 -: ASSESSEE HAS INCURRED EXPENDITURE IN CASH. COPY OF THE SAME IS AVAILABLE AT PAGE 7 OF THE COMPILATION OF THE ASSESSEE WHEREFROM IT IS NOTICED THAT MOST OF THE PAYMENTS ARE MADE THROUGH CHEQUE OR IF THERE IS ANY PAYMENT IN CASH, IT WAS BELOW THE PRESCRIBED LIMIT. WE FIND FORCE IN THE CONTENTION OF THE ASSESSEE THAT ONCE ASSESSEES EXPLANATION HAS BEEN EXAMINED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD. COMMISSIONER OF INCOME-TAX CANNOT REVISE THE ASSESSMENT ORDER UNLESS AND UNTIL IT IS BROUGHT ON RECORD THAT THE VIEW TAKEN BY THE ASSESSING OFFICER IS CONTRARY TO THE PROVISIONS OF THE ACT. SINCE THE ASSESSING OFFICER HAS ALREADY APPLIED HIS MIND BEFORE ACCEPTING THE CLAIM OF THE ASSESSEE, THE ORDER CANNOT BE REVISED FOR THE SIMPLE REASON THAT THE LD. COMMISSIONER OF INCOME-TAX DID NOT AGREE WITH THE VIEW TAKEN BY THE ASSESSING OFFICER. IN THE INSTANT CASE, THE CASH PAYMENT WAS MADE ONLY OF RS.95,550/- OUT OF TOTAL PAYMENT OF RS.2,65,425/-. WE ARE, THEREFORE, OF THE VIEW THAT SINCE THE ASSESSING OFFICER HAS ALREADY APPLIED HIS MIND ON THE IMPUGNED ISSUE, IT CANNOT BE REVISED UNDER SECTION 263 OF THE ACT BY THE LD. COMMISSIONER OF INCOME- TAX. ACCORDINGLY, WE SET ASIDE HIS ORDER. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- SD/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:6 TH NOVEMBER, 2015 JJ:0810 :- 5 -: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR