Panjkosi M.P. Coop. Society Ltd., Abohar V. The Income Tax Officer, Abohar

ITA 123/ASR/2010

• Counselvise Citation: 12320914 RSA 2010
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 08-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAVISH SOOD
• Keywords: Revision of order; Income from undisclosed sources; Opportunity of being heard; Assessment record
• Section: 143(3); 147; 148; 263; 63; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: AMRITSAR BENC H: AMRITSAR BEFORE SHRI H L KARWA, VP AND SHRI D K SRIVASTAVA, AM ITA NO. 227/ASR/2010 AY 2000-01 M/S BENI EXPORTS V C.I.T. I, JALANDHAR BASTI BAWA KHEL, JALANDHAR ITA NO. 228/ASR/2010 AY 2000-01 M/S JAMBA EXPORTS V C.I.T. I, JALANDHAR WS-104-BASTI SHEIKH, JALANDHAR APPELLANT BY: SHRI RAVISH SOOD RESPONDENT BY: SHRI TARSEM LAL DATE OF HEARING: 12.12.2011 DATE OF PRONOUNCEMENT: 16.12.2011 ORDER D K SRIVASTAVA : BOTH THE PARTIES SUBMITTED AT THE TIME OF HEARING THAT THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS THE GROUNDS OF APPEALS TAKEN BY BOTH THE ASSESSEES ARE IDENTICAL AND THERE FORE THEY SHOULD BE DISPOSED OFF BY A CONSOLIDATED ORDER. ON PERUSAL O F THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE FACTS GOVERNING BOTH THE C ASES AS WELL AS THE GROUNDS OF APPEALS TAKEN BY BOTH THE PARTIES ARE IDENTICAL. WE THEREFORE FIND IT CONVENIENT TO DISPOSE OFF BOTH THE APPEALS BY A CON SOLIDATED ORDER. 2. IN ITA NO. 227/ASR/2010, FOLLOWING GROUNDS OF AP PEAL HAVE BEEN TAKEN:- 1 THAT THE ORDER OF THE LD. CIT PASSED U/S 263 OF THE INCOME-TAX ACT, 1961 IS AGAINST THE LAW AND FACTS OF THE CASE. 2. THAT THE LD. CIT TRANSGRESSING HIS ARENA OF JURI SDICTION HAS THEREIN GRAVELY ERRED IN LAW AND FACTS OF THE CASE IN ASSUMING JURISDICTION AND PASSING ORDER U/S 263 OF THE ACT. BENI EXPORTS AND OTHER V ITO ITAS NO. 227 AND 228/ASR/2010 2 3. THAT WITHOUT PREJUDICE TO THE AFORESAID, THE LD. CIT ACTING IN GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTI CE HAD EVEN OTHERWISE ERRED IN PASSING THE ORDER U/S 263 OF THE ACT WITHO UT AFFECTING A VALID SERVICE OF SHOW CAUSE NOTICE AND THEREIN PROVIDIN G A SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. THAT WITHOUT PREJUDICE TO THE AFORESAID, EVEN OT HERWISE THE LD. CIT GRAVELY ERRED IN MISCONCEIVING THE FACTS OF THE CASE AND SET ASIDE THE ASSESSMENT WHICH STOOD FRAMED BY THE AO U/S 143 (3) OF THE ACT AFTER DUE APPLICATION OF MIND. 5. THAT WITHOUT PREJUDICE TO THE AFORESAID, EVEN OT HERWISE THE LD. CIT GRAVELY ERRED IN FAILING TO APPRECIATE THE FACT S OF THE CASE IN LIGHT OF THE SETTLED POSITION OF LAW AND THEREIN DREW ADVERS E INFERENCES AS REGARDS THE IMPUGNED DEPB SCRIP AMOUNTING TO RS. 94 ,56,252/- IN THE HANDS OF THE ASSESSEE. 6. ANY OTHER GROUNDS OF APPEAL AS MAY BE ALLOWED TO BE RAISED AT THE TIME OF HEARING OF THE APPEAL. 3. IN ITA NO. 228/ASR/2010, FOLLOWING GROUNDS OF AP PEAL HAVE BEEN TAKEN:- 1 THAT THE ORDER OF THE LD. CIT PASSED U/S 263 OF THE INCOME-TAX ACT, 1961 IS AGAINST THE LAW AND FACTS OF THE CASE. 2. THAT THE LD. CIT TRANSGRESSING HIS ARENA OF JURI SDICTION HAS THEREIN GRAVELY ERRED IN LAW AND FACTS OF THE CASE IN ASSUMING JURISDICTION AND PASSING ORDER U/S 263 OF THE ACT. 3. THAT WITHOUT PREJUDICE TO THE AFORESAID, THE LD. CIT ACTING IN GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTI CE HAD EVEN OTHERWISE ERRED IN PASSING THE ORDER U/S 263 OF THE ACT WITHO UT AFFECTING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. BENI EXPORTS AND OTHER V ITO ITAS NO. 227 AND 228/ASR/2010 3 4. THAT WITHOUT PREJUDICE TO THE AFORESAID, EVEN OT HERWISE THE LD. CIT GRAVELY ERRED IN MISCONCEIVING THE FACTS OF THE CASE AND SET ASIDE THE ASSESSMENT WHICH STOOD FRAMED BY THE AO U/S 143 (3) OF THE ACT AFTER DUE APPLICATION OF MIND. 5. THAT WITHOUT PREJUDICE TO THE AFORESAID, EVEN OT HERWISE THE LD. CIT GRAVELY ERRED IN FAILING TO APPRECIATE THE FACT S OF THE CASE IN LIGHT OF THE SETTLED POSITION OF LAW AND THEREIN DREW ADVERS E INFERENCES AS REGARDS THE IMPUGNED DEPB SCRIP AMOUNTING TO RS. 17 LAKHS IN THE HANDS OF THE ASSESSEE. 6. ANY OTHER GROUNDS OF APPEAL AS MAY BE ALLOWED TO BE RAISED AT THE TIME OF HEARING OF THE APPEAL. 4. FOR THE SAKE OF CONVENIENCE, WE ARE EXTRACTING T HE RELEVANT FACTS FROM THE CASE RECORD OF M/S BENI EXPORTS ITA NO. 227/ASR /2010. THE FACTS, IN BRIEF, IN THE CASE OF BENI EXPORTS ARE THAT A NOTICE U/S 1 48 OF THE INCOME-TAX ACT, 1961 WAS ISSUED BY THE AO ON 28.3.2007 CALLING UPON THE ASSESSEE TO FILE ITS RETURN OF INCOME. THE ASSESSEE HOWEVER DID NOT FILE THE RETURN OF INCOME. THE AO COMPLETED THE ASSESSMENT U/S 143(3)/148 ASSESSIN G THE TOTAL INCOME AT RS.34,35,600/- EVEN IN THE ABSENCE OF RETURN. PERU SAL OF SECTION 143 SHOWS THAT THE ASSESSMENT U/S 143 CAN BE COMPLETED ONLY W HERE A RETURN HAS BEEN MADE U/S 139 OR IN RESPONSE TO THE NOTICE ISSUED U/ S 142(1). 5. IN EXERCISE OF HIS JURISDICTION U/S 263 OF THE A CT, THE LD. CIT CALLED FOR THE RECORDS AND EXAMINED THEM. HE FOUND THAT THE AO HAD RECEIVED INFORMATION FROM THE ANTI SMUGGLING WING OF THE CU STOMS DEPARTMENT, AMRITSAR REGARDING EXPATRIATION OF FOREIGN CURRENCY TO DUBAI AND FRAUDULENT PROCUREMENT OF DEPB SCRIPS BY BOTH THE ASSESSES, VI DE LETTER DATED 13/14.5.2002 YET HE DID NOT EXAMINE THE RELEVANT AS PECTS OF THE CASE WHILE COMPLETING THE ASSESSMENT. THE FINDINGS OF THE LD. CIT IN THIS BEHALF ARE AS UNDER:- 2 EXAMINATION OF THE RECORD REVEALS THAT WHILE COM PLETING THE ASSESSMENT, THE AO CONSIDERED THE VALUE OF FOREIGN CURRENCY EXPATRIATED BENI EXPORTS AND OTHER V ITO ITAS NO. 227 AND 228/ASR/2010 4 BY THE ASSESSEES CONCERN AMOUNTING TO RS. 38,72,00 0/- AS INCOME FROM UNDISCLOSED SOURCES AND ADDED TO THE INCOME OF THE AOP. HOWEVER, HE FAILED TO LOOK INTO THE ISSUE CONCERNING FRAUDULENT LY AVAILED DEPB SCRIPTS AMOUNTING TO RS. 94,56,252/- IN THE LIGHT OF THE RE ASONS RECORDED U/S 147 OF THE ACT. THE AO THUS MADE THE ASSESSMENT IN UNDUE HASTE WITHOUT APPLICATION OF MIND SINCE HE FAILED TO TAKE INTO ACCOUNT ALL THE MATERIAL FACTS FOR WHICH PROCEEDINGS U/S 147 OF THE ACT WERE INITIATED. 3. ACCORDINGLY, SHOW CAUSE NOTICE U/S 263 OF THE IN COME-TAX ACT, 1961 WAS ISSUED ON 19.2.2010 FOR 8.3.2010. SINCE T HE SERVICE OF THE SHOW CAUSE NOTICE WAS NOT POSSIBLE THROUGH ORDINARY MEANS, THE SAME WAS EFFECTED UPON THE ASSESSEE THROUGH AFFIXTURE. T HERE BEING NO COMPLIANCE, ANOTHER SHOW CAUSE NOTICE DATED 17.3.20 10 WAS SERVED BY AFFIXURE IN THE PRESENCE OF TWO WITNESSES NAMELY JA SWINDER, 383, KATEHRA MOH., BASTI BAWA KHEL, JALANDHAR. THE CASE WAS FIXED FOR 24.3.2010 AND ASSESSEE REQUIRED TO EXPLAIN AS TO WH Y THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE INCOME-TAX ACT, 1961 DATED 31.12.2007 SHOULD NOT BE REVISED. IN RESPONSE, NONE APPEARED N OR ANY WRITTEN SUBMISSIONS HAVE BEEN FILED ON THE SAID DATE. 4. I HAVE CONSIDERED THE FACTS OF THE CASE AND GONE THROUGH THE ASSESSMENT RECORD AND FIND THAT THE AO HAS FAILED T O ADD THE FRAUDULENTLY OBTAINED DEPB SCRIPS AMOUNTING TO RS. 94,56,252/- TO THE ASSESSABLE INCOME OF THE ASSESSEE. THE SAID FAILUR E ON THE PART OF THE AO HAS RESULTED IN AN ASSESSMENT ORDER WHICH IS NOT ONLY ERRONEOUS BUT IS ALSO PREJUDICIAL TO HE INTEREST OF THE REVENUE. THE ASSESSMENT ORDER PASSED ON 31.12.2007 IS, THEREFORE, SET ASIDE U/S 2 63 OF THE ACT WITH THE DIRECTION THAT THE ASSESSMENT BE MADE AFRESH AFTER TAKING INTO CONSIDERATION ALL THE RELEVANT FACTS AND EVIDENCE. THE AO WILL NO DOUBT GIVE PROPER OPPORTUNITY OF BEING HEARD TO THE ASSES SEE BEFORE COMPLETING THE ASSESSMENT AFRESH. 6. AS EVIDENT FROM THE AFORESAID THAT THE LD. CIT(A ) HAS CANCELLED THE ASSESSMENT FRAMED BY THE AO ON 13.1.2007 AND DIRECT ED HIM TO MAKE A FRESH BENI EXPORTS AND OTHER V ITO ITAS NO. 227 AND 228/ASR/2010 5 ASSESSMENT IN CONFORMITY WITH LAW AFTER TAKING INTO CONSIDERATION ALL THE RELEVANT FACTS AND MATERIALS. 7. AGGRIEVED BY THE AFORESAID ORDER, THE ASSESSEE I S NOW IN APPEAL BEFORE THIS TRIBUNAL. HIS SUBMISSIONS, IN BRIEF, ARE TWO F OLD. ONE, THE LD. CIT HAS PASSED THE IMPUGNED ORDER WITHOUT GIVING ANY OPPORT UNITY OF HEARING TO THE ASSESSEE. HE SUBMITTED THAT THE NOTICES ISSUED BY T HE LD. CIT WERE NEVER RECEIVED BY HIM. TWO, THE CUSTOMS DEPARTMENT HAD CA NCELLED THE DEPB SCRIPS AND THEREFORE THERE WAS NO QUESTION OF ANY BENEFIT ACCRUING TO THE ASSESSEE ON ACCOUNT OF DEPB SCRIPS, WHICH CAN BE THE SUBJECT MA TTER OF TAX. 8. IN REPLY, THE LD. DR SUPPORTED THE ORDER PASSED BY THE LD. CIT. 9. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY CON SIDERED THEIR SUBMISSIONS. THE CASE OF THE ASSESSEE IS THAT THE D EPB SCRIPS WERE CANCELLED BY THE JOINT DIRECTOR GENERAL AND THEREFORE THE BEN EFITS EMANATING THERE-FROM COULD NOT BE SAID TO HAVE ACCRUED TO THE ASSESSEE S O AS TO ATTRACT TAX. IN SUPPORT OF HIS CASE, THE LD. AUTHORISED REPRESENTAT IVE FOR THE ASSESSEE HAS RELIED UPON THE JUDGMENTS IN CIT V. PUNJAB BONE MIL LS, 232 ITR 795 (P&H) AND 251 ITR 780 (SC) AND THE JUDGMENT DATED 11.10.2010 OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V. SRIYANSH KNITTE RS P LTD, ITC NO. 184 OF 1994. ON BEING ASKED AS TO WHY THESE JUDGMENTS WERE NOT P LACED BEFORE THE LD. CIT, THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT NOTICE OF HEARING PURPORTEDLY ISSUED BY THE LD. CIT WAS NEVER RECEIVED BY THE ASSESSEE AND THEREFORE THE ASSESSEE COULD NOT ENTER APPEARAN CE BEFORE THE LD. CIT AND EFFECTIVELY SUPPORT HIS CASE. THE LD. CIT HAS PASS ED THE IMPUGNED ORDER EX- PARTE QUA THE ASSESSEE. THE MATERIALS BROUGHT BY H IM ON RECORD CANNOT BE IGNORED LIGHTLY. AT THE SAME TIME, THE JUDGMENTS BR OUGHT TO OUR NOTICE BY THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE CAN ALSO NOT BE IGNORED. THE FACT, HOWEVER, REMAINS THAT THE JUDGMENTS PLACED BE FORE US BY THE LD. AUTHORISED REPRESENTATIVE FOR THE ASSESSEE CANNOT B E ACTED UPON UNLESS THE RELEVANT FACTS ARE PLACED ON RECORD. THE ORDER OF L D. CIT IS SILENT IN THIS BEHALF. TAKING INTO ACCOUNT THE TOTALITY OF THE FACTS AND C IRCUMSTANCES OF THE CASE, WE CONSIDER IT APPROPRIATE TO SET ASIDE THE IMPUGNED O RDER PASSED BY THE LD. CIT BENI EXPORTS AND OTHER V ITO ITAS NO. 227 AND 228/ASR/2010 6 AND RESTORE THE MATTER TO HIS FILE FOR A FRESH DECI SION IN CONFORMITY WITH LAW AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO T HE ASSESSEE. WE ORDER ACCORDINGLY. WE DIRECT THE ASSESSEE TO ENTER APPEAR ANCE BEFORE THE LD. CIT WITHIN ONE MONTH OF THE RECEIPT OF THIS ORDER UPON WHICH THE LD. CIT WILL HEAR HIM AND THERE-AFTER PASS A SPEAKING ORDER IN CONFOR MITY WITH LAW AFTER TAKING INTO ACCOUNT THE SUBMISSIONS MADE BY THE ASSESSEE I NCLUDING THE JUDGMENTS THAT MAY BE CITED BEFORE HIM. RESULTANTLY, THE APPE AL FILED BY BOTH THE ASSESSEES IS TREATED AS ALLOWED FOR STATISTICAL PUR POSES. ORDER PRONOUNCED ON 16.12.2011 SD/- SD/- (H L KARWA) (D K SRIVASTAVA) VICE PRESIDENT ACCOUNTANT MEMBER AMRITSAR, 16.12.2011 SURESH COPY TO:- 1. THE APPELLANT, M/S KIRAN METAL WORKS 2. THE RESPONDENT, I.T.O 3. THE CIT(A), JALANDHAR 4. THE LD. CIT, JALANDHAR 5. THE D.R., INCOME TAX DEPARTMENT, AMRITSAR BENI EXPORTS AND OTHER V ITO ITAS NO. 227 AND 228/ASR/2010 7