Joonktollee Tea & Industries Ltd., Kolkata V. DCIT, Circle - 4(1), Kolkata, Kolkata

ITA 1225/KOL/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6405 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 26-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G MALLIKARJUNA
• Assessee Lawyers: B K CHATORVEDI
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM & HONB LE SHRI A.T. VARKEY, JM ] I.T.A NO. 1225/KOL/20 17 ASSESSMENT YEAR : 2012-1 3 JOONKTOLLEE TEA & INDUSTRIES LTD. -VS- DCIT, CI RCLE-4(1), KOLKATA [PAN: AAACJ 6577 G] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI B.K. CHATORVEDI, AR FOR THE REVENUE : SHRI G. MALLIKARJUNA, CIT , DR DATE OF HEARING : 19.04.2018 DATE OF PRONOUNCEMENT : 18.05.2018 ORDER PER J.SUDHAKAR REDDY, AM THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX-2, KOLKATA PASSED U/S 26 3 OF THE INCOME TAX ACT, 1961 ( THE ACT). 2. THE ASSESSEE IS A COMPANY AND IS IN THE BUSINESS OF CULTIVATION AND MANUFACTURING OF TEA. IT FILED ITS RETURN OF INCOME ON 30.09.2012 DE CLARING TOTAL INCOME OF RS. 1,28,381/-. THIS RETURN WAS REVISED ON 24.03.2014 AND AFTER SET TING OFF OF, BROUGHT FORWARD LOSS, NIL INCOME WAS DECLARED. THE ASSESSING OFFICER PASSED A N ORDER U/S 143(3) OF THE ACT, ASSESSING INCOME AT RS. 97,33,140/- UNDER NORMAL PR OVISIONS AND AT RS. 2,92,21,474/- UNDER MAT PROVISION OF THE ACT. 2 ITA NO.1225/KOL/2017 JOONKTOLLEE TEA & INDUSTRIES LT D. A.YR .2012-13 2 3. THE LD. PR. CIT ISSUED A NOTICE U/S 263 OF THE A CT ON 28.10.2016, WHEREIN HE OBSERVED THAT THE ASSESSEE OFFICER HAD COMPUTED BOO K PROFITS FOR MAT PURPOSE AT RS. 2,92,21,474/-, WHICH WAS CONSIDERABLY LESS THAN THE RETURNED BOOK PROFIT OF RS. 5,37,02,730/- WHICH RESULTED IS UNDER ASSESSMENT OF BOOK PROFITS TO THE EXTENT OF RS. 2,88,64,607/- AND CONSEQUENTLY EXCESS REFUND OF RS. 68,89,246/-. AFTER HEARING THE SUBMISSIONS OF THE ASSESSEE THE LD. PR. CIT STATES THAT THE ASSESSEE COMPANY FAILED TO GIVE REPLY OF THE SPECIFIC QUARRY RAISED VIDE OFFIC E NOTICE DATED 28.10.2016. HENCE HE IN EXERCISE OF HIS REVISIONARY POWERS, REVISED THE AS SESSMENT ORDER AND RESTORED THE ISSUE TO THE AO WITH THE DIRECTION TO EXAMINE THE ISSUE AND PASS A SPEAKING ORDER AFTER GIVING OPPORTUNITY TO THE ASSESSEE COMPANY. THIS PA RT OF THE ORDER IS NOT CHALLENGED BY THE ASSESSEE BEFORE US. 4. FURTHER THE LD. PR. CIT HAS AT PAGE 4 OF HIS ORD ER PARA 2 HE FURTHER OBSERVED AS FOLLOWS: ASSESSEES SUBMISSION IS THAT IN ACCORDANCE WITH D ECISION OF THE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. JAYSHREE TEA & INDUSTR IES LTD. REPORTED IN 253 ITR 608, DIVIDEND DISTRIBUTION TAX HAS BEEN RIGHTLY LEV IED ON THE 40% OF THE AMOUNT OF DIVIDEND DISTRIBUTED. BUT, THE REVENUE HA S FILED AN SLP ON THIS ISSUE WHICH IS STILL PENDING BEFORE HON'BLE SUPREME COURT . IN VIEW OF THE ABOVE, I HAVE DECIDED TO RESTORE THIS ISSUE TO THE AO WITH I NSTRUCTION TO RE-EXAMINE THE ISSUE AND PASS A SPEAKING ORDER AFTER GIVING OPPORT UNITY TO THE ASSESSEE COMPANY. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US CHALL ENGED THE ONLY DIRECTION OF THE LD. PR. CIT IN THE ORDER PASSED U/S 263 OF THE ACT, GIV EN TO THE ASSESSING OFFICER, IN RESPECT OF DIVIDEND DISTRIBUTION TAX WHICH ARE AT PAGE 4 PA RA 2 OF HIS ORDER, WHICH IS EXTRACTED ABOVE. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO N OT ARGUED THE GROUNDS RAISED BY THE COMPANY ON THE LEGALITY OR JURISDICTION OF THE LD. PR. CIT-2, KOLKATA, IN PASSING THE ORDER U/S 263 OF THE ACT. 3 ITA NO.1225/KOL/2017 JOONKTOLLEE TEA & INDUSTRIES LT D. A.YR .2012-13 3 5. THE LD. COUNSEL FOR THE ASSESSEE, MR. B.K. CHATO RVEDI, SUBMITTED THAT WHEN THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER, THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. JAYSHREE TEA & IN DUSTRIES LTD. REPORTED IN 253 ITR 608 WAS BINDING ON HIM AND THE HON'BLE SUPREME COUR T HAD DISMISSED THE SLP FILED BY THE UNION OF INDIA AGAINST THIS JUDGMENT VIDE SPECIAL LEAVE TO APPEAL (CIVIL) CC 9853/2008 JUDGMENT DATED 01.08.2008. HE RELIED ON T HE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF M/S RUSSELLS PRO PERTIES PVT. LTD. VS. ACIT REPORTED IN 109 ITR 229 (CAL) WHEREIN IT IS HELD THAT, WHEN THE ASSESSING OFFICER HAD MERELY FOLLOWED THE DECISION OF THE APPELLATE TRIBUNAL AND WHEN THE CIT HAD NOT POINTED OUT THAT THERE WERE ANY MATERIALS BEFORE THE INCOME TAX OFFICER, NOT TO FOLLOW THE DECISION OF THE TRIBUNAL, THE ORDER OF THE ITO CANNOT, THERE FORE, BE SAID TO BE ERRONEOUS AND HENCE THE PROPOSED EXERCISE OF THE POWER OF REVISIO N U/S 263 OF THE ACT WAS ILLEGAL AND WITHOUT JURISDICTION. HE ALSO RELIED ON THE DECISIO N OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. G.M. MITTAL STAINLESS STEEL (P) LTD . REPORTED IN 263 ITR 255 THAT, WHEN AN ORDER IS PASSED ON THE VIEW BASED ON THE DECISIO N OF THE JURISDICTIONAL HIGH COURT AND SUCH HIGH COURT DECISION IS NOT UNDER APPEAL BE FORE THE HON'BLE SUPREME COURT, NO JURISDICTION LIES WITH THE COMMISSIONER TO REVIS E THE ASSESSMENT ORDER U/S 263 OF THE ACT. HE ALSO RELIED ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PAUL BROTHERS REPORTED IN 216 ITR 548 (BOM) FOR THE PROPOSITION THAT THE ORDER OF THE ASSESSING OFFICER, BASED ON THE DECISION OF THE HIGH COURT, CANNOT BE REVISED. HE PRAYED THAT THESE DIRECTIONS OF THE LD. CIT BE VACA TED. 6. THE LD. CIT DR ON THE OTHER HAND SUBMITTED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE JUDGMENT OF THE HON'BLE SUPREME COU RT IN THE CASE OF UNION OF INDIA AND ORS. VS. M/S TATA TEA COMPANY LTD. & ORS. CA NO . 9178 OF 2012 AND OTHER JUDGMENT DATED 20.09.2017. 4 ITA NO.1225/KOL/2017 JOONKTOLLEE TEA & INDUSTRIES LT D. A.YR .2012-13 4 7. HE FURTHER SUBMITTED THAT THE JUDGMENT OF JURIS DICTIONAL HIGH COURT IN THE CASE OF JAYSHREE TEA & INDUSTRIES LTD. SUPRA WAS CHALLENGED BY THE REVENUE BEFORE THE HON'BLE SUPREME COURT, BUT THE SAME WAS DISMISSED ON GROUND OF DELAY AND HENCE IT CANNOT BE SAID THAT THIS IS A PRECEDENT. HE FURTHER POINTED O UT THAT ON THE VERY SAME DATE I.E. 28.07.2006, AN APPEAL HAS BEEN FILED IN THE CASE OF TATA TEA COMPANY LTD. AND ANOTHER, M/S GEORGE WILLINGSON AND OTHER CASES AND THE SAME WERE ADMITTED BY THE HON'BLE SUPREME COURT AND HENCE THE LAW LAID DOWN I N THE JUDGMENT IN THE CASE OF JAYSHREE TEA & INDUSTRIES LTD. WAS IN CHALLENGE BEF ORE THE HON'BLE SUPREME COURT. HENCE HE SUBMITTED THAT NONE OF THE DECISION RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE APPLYING TO THE FACTS OF THE CASE. HE FURT HER SUBMITTED THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE ISSUE OF DI VIDEND DISTRIBUTION TAX AS NOWHERE IN THE ASSESSMENT ORDER, THIS WAS DISCUSSED. HENCE HE SUBMITTED THAT THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF TH E REVENUE AND PRAYED THAT THE ORDER OF THE LD. PR. CIT BE UPHELD. 8. AFTER HEARING RIVAL SUBMISSION AND PERUSING THE PAPER ON RECORD AND THE ORDER OF THE AUTHORITIES BELOW AS WELL AS CASE LAWS CITED WE HOL D AS FOLLOWS. 9. THE ASSESSING OFFICER HAS NOT DISCUSSED THIS ISS UE OF COMPUTATION OF DIVIDEND DISTRIBUTION TAX IN HIS ASSESSMENT ORDER. THE ASSES SEE COULD NOT DEMONSTRATE THAT THIS WAS AN ISSUE ENQUIRED INTO BY THE AO. HENCE THERE I S NO APPLICATION OF MIND BY THE ASSESSING OFFICER ON THIS ISSUE DURING THE COURSE O F ASSESSMENT OR IN THE ASSESSMENT ORDER. HENCE THE ARGUMENT OF THE LD. COUNSEL OF THE ASSESSEE, THAT THE ASSESSING OFFICER HAS APPLIED THE PROPOSITION OF LAW LAID DOWN BY THE HONBLE HIGH COURT IN THE CASE OF JAYSHREE TEA & INDUSTRIES LTD. TO THE FACTS OF THIS CASE IS FACTUALLY INCORRECT. NON- APPLICATION OF MIND BY THE AO TO AN ISSUE MAKES THE ORDER OF ASSESSMENT ERRONEOUS. THIS ERROR IS PREJUDICIAL TO REVENUE. 5 ITA NO.1225/KOL/2017 JOONKTOLLEE TEA & INDUSTRIES LT D. A.YR .2012-13 5 10. BE AS IT MAY, THIS DECISION OF M/S JAYSHREE TEA & INDUSTRIES LTD. WAS IN CHALLENGE BEFORE THE HON'BLE SUPREME COURT. WHILE ITS SLP AGA INST THE JUDGMENT OF JAYSHREE TEA & INDUSTRIES LTD. WAS DISMISSED BY THE HON'BLE SUPR EME COURT ON THE GROUND OF DELAY, THE APPEALS AGAINST THE VERY SAME PROPOSITION OF LA W LAID DOWN BY THE CALCUTTA HIGH COURT ON THE VERY SAME ISSUE, WAS ADMITTED BY THE H ON'BLE SUPREME COURT ON THE VERY SAME DATE I.E. 28.07.2006. 11. THUS THE DECISION RELIED UPON BY THE LD. COUNSE L FOR THE ASSESSEE, IN OUR VIEW DOES NOT APPLY TO THE FACTS OF THE CASE. 12. IN THE CASE OF RUSSELLS PROPERTIES PVT. LTD., I T WAS A CASE WHERE THE ASSESSING OFFICER PASSED ORDERS BASED ON THE DECISION OF THE TRIBUNAL . IN THE CASE OF THIS ASSESSEE THERE IS NO DISCUSSION OR APPLICATION OF MIND BY THE ASSESSI NG OFFICER, SO AS TO COME TO A CONCLUSION THAT HE HAD FOLLOWED THE JUDGMENT IN THE CASE OF JAYSHREE TEA & INDUSTRIES LTD.(SUPRA). HENCE THIS JUDGMENT IS NOT COME TO THE RESCUE OF THE ASSESSEE. 13. IN THE JUDGMENT OF M/S G.M. MITTAL STAINLESS ST EEL PVT. LTD. THE HON'BLE SUPREME COURT HAD HELD THAT IF THE JUDGMENT OF THE HONBLE HIGH COURT IS NOT IN APPEAL BEFORE THE HON'BLE SUPREME COURT, THEN THE LD. CIT COULD N OT EXERCISE THE REVISIONARY JURISDICTION U/S 263 WHEN THE AOS ORDER IS IN LINE WITH THE JUDGMENT OF THE HIGH COURT. IN THIS CASE, THE JUDGMENT OF THE HONBLE CA LCUTTA HIGH COURT WAS IN APPEAL BEFORE THE HON'BLE SUPREME COURT AND HENCE THE PROP OSITION OF LAW LAID DOWN IN THE CASE LAW, DOES NOT APPLY TO THE FACTS ON HAND. SI MILARLY IN THE CASE OF PAUL BROTHERS, IT WAS A CASE WHERE THERE WAS MERGER OF THE ORDER OF T HE ASSESSING OFFICER WITH THE ORDER OF THE AAC. IN THE CASE ON HAND, THERE IS NO SUCH M ERGER ON THE ISSUE OF DIVIDEND DISTRIBUTION TAX AND HENCE THIS CASE DOES NOT APPL Y. 6 ITA NO.1225/KOL/2017 JOONKTOLLEE TEA & INDUSTRIES LT D. A.YR .2012-13 6 14. UNDISPUTEDLY, THE ISSUE IS COVERED IN FAVOUR OF THE REVENUE BY THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA AND ORS. VS. M/S TATA TEA COMPANY LTD. AND ANOTHER SUPRA. IN VIEW OF THE ABOV E DISCUSSION WE DISMISS THE APPEAL OF THE ASSESSEE. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED . ORDER PRONOUNCED IN THE COURT ON 18.05.2018 SD/- SD/- [A.T.VARKEY] [ J.SUDHAKA R REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 18.05.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. JOONKTOLLEE TEA & INDUSTRIES LTD., 21, STRAND RO AD, KOLKATA-700001. 2. DCIT, CIRCLE-4(1), AAYAKAR BHAWAN, 8 TH FLOOR, P-7, CHOWRINGHEE SQUARE, KOLKATA- 700069. 3..C.I.T.(A)- , KOLKATA 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S