M/s. Raghunath Exporters, Kolkata V. PCIT-11, Kolkata

ITA 1279/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 3663 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: K M ROY
• Keywords: Revision of order; Opportunity of being heard; Audit objection; Assessment record; Set aside
• Section: 143(3); 263; 63

Judgement Text

ITA NO. 1279/KOL/2019 ASSESSMENT YEAR: 2012-2013 M/S. RAGHUNATH EXPORTERS 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 1279/KOL/2019 ASSESSMENT YEAR: 2012-2013 M/S. RAGHUNATH EXPORTERS........................... ...............................APPELLANT 5F, PARK PLAZA, KOLKATA-700 016 [PAN: AADFR8371E] -VS.- PRINCIPAL COMMISSIONER OF INCOME TAX-11,........... ...................RESPONDENT KOLKATA, 10B, MIDDLETON ROW, 3 RD FLOOR, KOLKATA-700 071 APPEARANCES BY: SHRI K.M. ROY, FCA, FOR THE APPELLANT SHRI A.K. NAYAK, CIT, D.R , FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : AUGUST 08, 2019 DATE OF PRONOUNCING THE ORDER : AUGUST 28, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. PRINCIPAL COMMISSIONER OF INCOME TAX-11, KOLKATA DA TED 27.03.2019 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 196 1. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 25.09.2012 DECLARING TOTAL INCOME OF RS.5,90,950/-. IN THE ASS ESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 10.03.2015 , THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICE R AT RS.60,32,880/-. THE RECORDS OF THE SAID ASSESSMENT CAME TO BE EXAMI NED BY THE CONCERNED LD. PRINCIPAL CIT AND ON SUCH EXAMINATION, HE FOUND THAT THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) WAS E RRONEOUS AS WELL AS ITA NO. 1279/KOL/2019 ASSESSMENT YEAR: 2012-2013 M/S. RAGHUNATH EXPORTERS 2 PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE, THE REFORE, SET ASIDE THE SAME VIDE HIS ORDER DATED 23.11.2016 PASSED UNDER S ECTION 263 AND DIRECTED THE ASSESSING OFFICER TO MAKE THE ASSESSME NT AFRESH. 3. AGAINST THE ORDER PASSED BY THE LD. PRINCIPAL CI T UNDER SECTION 263, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DATED 10.11.2017 PASSED IN ITA NO. 92/KOL/2017 SET ASIDE THE ORDER PASSED BY THE LD. PRINCIPAL CIT UNDER SECTION 263. IN PURSUANCE OF THE SAID ORDER OF THE TRIBUNAL, THE LD . PRINCIPAL CIT AGAIN ISSUED A NOTICE UNDER SECTION 263 AND SINCE THERE W AS NO COMPLIANCE ON THE PART OF THE ASSESSEE TO THE SAID NOTICE, HE PRO CEEDED TO PASS A FRESH ORDER DATED 27.03.2019 UNDER SECTION 263 SETTING AS IDE THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3) IN FU LL AND DIRECTING THE ASSESSING OFFICER TO MAKE THE FRESH ASSESSMENT AFTE R MAKING PROPER ENQUIRY AND VERIFICATION IN ACCORDANCE WITH LAW. AG GRIEVED BY THE SAME, THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE T RIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, THE APPEAL FILED BY THE ASSESSEE AGAI NST THE FIRST ORDER DATED 23.11.2016 PASSED BY THE LD. PRINCIPAL CIT UNDER SE CTION 263 WAS DISPOSED OF BY THE TRIBUNAL VIDE ITS ORDER DATED 10 .11.2017 PASSED IN ITA NO. 92/KOL/2017 AFTER RECORDING ITS FINDINGS AND OB SERVATIONS IN PARA NO. 7 OF ITS ORDER AS UNDER:- 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORDS. IN THE INSTANT CASE, IT IS AN UNDISPUTED FACT THAT THE AUDIT OBJECTION WAS RAISED. BUT WE NOTE THAT THE PROCEEDINGS WERE NOT I NITIATED MERELY ON THE BASIS OF AUDIT OBJECTION. IT IS BECAUSE NO REFERENC E HAS BEEN MADE BY LD. PR. CIT IN HIS IMPUGNED ORDER TO THE AUDIT OBJECTIO N AS DISCUSSED ABOVE. WE RATHER FIND THAT LD. PR CIT HAS GIVEN CATEGORICA LLY FINDING WHICH READS AS UNDER:- 2. THE ASSESSMENT RECORD OF THE ASSESSEE WAS CALLE D FOR AND ON THE BASIS OF THE VERIFICATION OF THE MATERIALS AVAI LABLE ON RECORD, IT WAS FOUND THAT THE ORDER OF ASSESSMENT W AS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF REVENUE ON THE FOLLOWING GROUNDS: ITA NO. 1279/KOL/2019 ASSESSMENT YEAR: 2012-2013 M/S. RAGHUNATH EXPORTERS 3 FROM THE ABOVE, WE HOLD THAT THE PROCEEDINGS U/S. 2 63 OF THE ACT HAS NOT BEEN INITIATED ON THE BASIS OF AUDIT OBJECTION. THU S, THE CASE LAWS RELIED BY LD. AR FOR THE ASSESSEE IS NOT APPLICABLE TO THE IN STANT FACTS OF THE CASE. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SOHANA WOOLLEN MILLS (SUPRA) HAS GIVEN A CATEGORICAL FINDING THAT NO RIGID RULE COULD BE LAID DOWN ABOUT THE SITUATION WHEN THE JURISDICTION CAN BE EXERCISED. WHETHER SATISFACTION OF THE COMMISSIONER FOR EXERCI SING JURISDICTION IS CALLED FOR OR NOT, HAS TO BE DECIDED HAVING REGARD TO A GIVEN FACT & SITUATION. SIMILARLY, WE FIND THAT THE PRINCIPLES LAID DOWN BY HON'BLE HIGH COURT OF CALCUTTA IN THE CASE OF JEEWANLAL LIMITED (SUPRA) A RE NOT APPLICABLE TO THE INSTANT CASE AS THE LD. CIT HAS EXERCISED HIS JURIS DICTION AFTER APPLYING HIS MIND AND NOT MERELY ON THE BASIS OF AUDIT OBJECTION . HOWEVER, AT THIS JUNCTURE WE FIND IMPORTANT TO REPR ODUCE THE PROVISION OF SEC 263 OF THE ACT WHICH READS AS UNDER : REVISION OF ORDERS PREJUDICIAL TO REVENUE . 263 . (1) THE [PRINCIPAL COMMISSION OR] COMMISSION MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN B Y THE [ASSESSING] OFFICER IS ERRONEOUS IN SO FAR AS IT I S PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR C AUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SU CH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, I NCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CAN CELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. A PLAIN LOOK AT THE ABOVE STATUTORY PROVISION MAKES IT CLEAR THAT LD. PR CIT BEFORE HOLDING THE ORDER OF AO AS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE HAS TO FIND OUT ERROR AFTER EXAMINATION OF THE RECORDS. THE MERE FINDING OF LD. PR CIT IS THAT NO DOCUMENTARY EVIDENCES ARE AVAILABLE ON RECORD DOES NOT RENDER THE ORDER O F THE AO AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. IN OUR CONSIDERED VIEW IT WAS THE DUTY UNDER THE ACT THAT THE LD. PR CIT TO MAKE NECESSARY ENQUIRY FOR ARIVING AT A CONCLUSION THAT THE ORDER OF AO IS ERR ONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. IN ABSENCE OF ANY SPECIFIC ERROR WE SET ASIDE THE ORDER PASSED BY LD. PR CIT U/S 263 OF THE ACT. THUS THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWE D. 5. A PERUSAL OF THE DECISION OF THE TRIBUNAL AS RE NDERED ABOVE CLEARLY SHOWS THAT THE ORDER INITIALLY PASSED BY THE LD. CI T UNDER SECTION 263 ON 23.11.2016 WAS SET ASIDE BY THE TRIBUNAL IN THE ABS ENCE OF ANY SPECIFIC ERROR POINTED OUT BY THE LD. PRINCIPAL CIT THEREBY RESTORING THE ORDER ORIGINALLY PASSED BY THE ASSESSING OFFICER UNDER SE CTION 143(3). AS RIGHTLY CONTENDED BY THE LD. COUNSEL FOR THE ASSESS EE, IT APPEARS THAT THE ITA NO. 1279/KOL/2019 ASSESSMENT YEAR: 2012-2013 M/S. RAGHUNATH EXPORTERS 4 DECISION OF THE TRIBUNAL WAS NOT PROPERLY APPRECIAT ED AND UNDERSTOOD BY THE LD. PRINCIPAL CIT AND BY MISINTERPRETING THE SA ME AS REMAND, HE WRONGLY ISSUED A FRESH NOTICE UNDER SECTION 263 AND PASSED AGAIN A FRESH ORDER UNDER SECTION 263, WHICH IS NOT SUSTAINABLE. EVEN THE LD. CIT (D.R.) HAS NOT DISPUTED THIS POSITION. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. PRINCIPAL CIT UNDER SECTION 263 AND ALLOW THIS APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 28, 20 19. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP ) JUDICIAL MEMBER V ICE-PRESIDENT (KZ) KOLKATA, THE 28 TH DAY OF AUGUST, 2019 COPIES TO : (1) M/S. RAGHUNATH EXPORTERS. 5F, PARK PLAZA, KOLKATA-700 016 (2) PRINCIPAL COMMISSIONER OF INCOME TAX-11, KOLK ATA, 10B, MIDDLETON ROW, 3 RD FLOOR, KOLKATA-700 071 (3) COMMISSIONER OF INCOME TAX (APPEALS)-9, KOLKA TA (4) COMMISSIONER OF INCOME TAX, KOLKATA- , KO LKATA, (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.