S.Ramanathan, Thanjavur V. JCIT, Thanjavur

ITA 131/CHNY/2015

• Counselvise Citation: 13121714 RSA 2015
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 06-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 16-01-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: K MEENAKSHISUNDARAM ITP
• Keywords: Opportunity of being heard

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , ! ' . #$ , % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ ITA NOS. 129 TO 132/MDS/2015 / ASSESSMENT YEARS : 2005-06, 2006-07, 2008-09 & 2009 -10 S. RAMANATHAN, NO.1985, SERVAIKARA STREET, KARANTHAI, THANJAVUR. PAN AKAPR 8714L APPELLANT) V. THE JOINT COMMISSIONER OF INCOME-TAX, THANJAVUR RANGE, THANJAVUR. RESPONDENT) / APPELLANT BY : SHRI K. MEENAKSHISUNDARAM, ITP / RESPONDENT BY : SHRI A.B.KOLI, JCIT ! / DATE OF HEARING : 06.10.2015 '# ! / DATE OF PRONOUNCEMENT: 09.10.2015 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST THE COMMON ORDER OF THE COMMISSIONER OF INCOME-TAX(APP EALS) DATED 30.10.2014 FOR THE ASSESSMENT YEARS 2005-06, 2006-07, - - ITA 129 TO 132/ 15 2 2008-09 AND 2009-10. SINCE, THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, THEY ARE CLUBBED TOGETHER, HEAR D TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE FIRST COMMON LEGAL ISSUE IN THESE APPEALS IS WITH REGARD TO ASSUMPTION OF JURISDICTION OF THE JOINT C OMMISSIONER OF INCOME-TAX, WITHOUT ORDER U/S.120(4)(B) OF THE I.T. ACT, 1961. 3. THE LD. AR SUBMITTED THAT THE JCIT ASSUMED JURIS DICTION TO FRAME THE ASSESSMENTS IN THESE CASES WITHOUT AN ORDER U/S.120(4)(B) OF THE ACT NOTIFYING THE OFFICE OF TH E JCIT, THANJAVUR RANGE, THANJAVUR, AS AN ASSESSING OFFICER. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. IT IS FAIRLY CONCEDED BY THE LD. AR THA T IN SIMILAR CIRCUMSTANCES IN THE CASE OF M/S. KARANDHAI V. CIT, THAT ASSESSEE HAS FILED A WRIT PETITION IN W.P.(MD) NO.8 062 OF 2011 & M.P.(MD) NO.1 OF 2011 AND THE SAME WAS DISPOSED B Y THE HIGH COURT VIDE ORDER DATED 24.8.2011 DECIDING THE ISSUE AGAINST THE ASSESSEE BY OBSERVING AS FOLLOWS: 8. ACCORDING TO THE LEARNED COUNSEL FOR THE RESPONDENTS, THERE IS A DISTINCTION BETWEEN ORDERS - - ITA 129 TO 132/ 15 3 PASSED UNDER SECTIONS 127(1) , 127 (2) AND 127(3) OF THE ACT. THE ASSESSEE IS CONFUSING THE ISSUE OF TRANSFE R OF CASE UNDER SECTION 127(3) OF THE ACT AS AGAINST THE TRANSFER OF CASE UNDER SECTION 127(1) AND (2) OF THE ACT. THOUGH THE PROVISION OF LAW IS NOT SPECIFICALLY MEN TIONED THE CORRECT PROVISION IN RESPECT OF THIS CASE WILL BE SECTION 127(3) ONLY AS IT IS A TRANSFER FALLING WITHIN THE SAME CITY, LOCALITY OR PLACE. IT IS ALSO STATED THA T THE TRANSFER OF CASE FILE IS NOT MADE TO THE OFFICER CO NCERNED IN TERMS OF SECTION 120(4)(B) OF THE ACT AND THE AVERMENTS TO THAT EFFECT IS TOTALLY MISCONCEIVED. PARAGRAPH 3 OF THE COUNTER AFFIDAVIT IS AS FOLLOWS: '3. I RESPECTFULLY SUBMIT THAT SUB-SECTION (3) OF SECTION 127 OF THE INCOME TAX ACT, 1961 DEALS WITH TRANSFER OF A C ASE MADE FROM ONE OFFICER TO ANOTHER IN THE SAME CITY, LOCALITY OR PLACE, IT MERELY MEANS THAT SUCH AN ORD ER IS PURELY AN ADMINISTRATIVE ORDER, PASSED FOR CONSIDER ATIONS OF CONVENIENCE OF THE DEPARTMENT, AND NO POSSIBLE PREJUDICE CAN BE INVOLVED IN SUCH A TRANSFER. THE REASONS FOR TRANSFERRING THE CASE NEED NOT BE RECOR DED, NOR IS THERE ANY REQUIREMENT THAT THE REASONS BE GI VEN TO THE ASSESSEE AS HELD BY THE HONOURABLE KERALA HIGH COURT IN THE CASE OF T.S.SUJATHA VS UNION OF INDIA REPORTED IN (1999) 151 CTR 29.' 9. SECTION 127(1) , (2) AND (3) OF THE ACT, WHICH ARE RELEVANT TO THE PRESENT CASE, READ AS FOLLOWS: ' SECTION 127 . (1) THE DIRECTOR GENERAL OR CHIEF COMMISSIONER OR COMMISSIONER MAY, AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD IN THE MATTER, WHEREVER IT IS POSSIBLE TO DO SO, AND AFTER RECORDING HIS REASONS FOR DOING SO, TRANSFER ANY CA SE FROM ONE OR MORE ASSESSING OFFICERS SUBORDINATE TO HIM (WHETHER WITH OR WITHOUT CONCURRENT JURISDICTION) T O ANY OTHER ASSESSING OFFICER OR ASSESSING OFFICERS (WHET HER - - ITA 129 TO 132/ 15 4 WITH OR WITHOUT CONCURRENT JURISDICTION) ALSO SUBOR DINATE TO HIM. (2) WHERE THE ASSESSING OFFICER OR ASSESSING OFFICE RS FROM WHOM THE CASE IS TO BE TRANSFERRED AND THE ASSESSING OFFICER OR ASSESSING OFFICERS TO WHOM THE CASE IS TO BE TRANSFERRED ARE NOT SUBORDINATE TO TH E SAME DIRECTOR GENERAL OR CHIEF COMMISSIONER OR COMMISSIONER:- (A) WHERE THE DIRECTORS GENERAL OR CHIEF COMMISSION ERS OR COMMISSIONERS TO WHOM SUCH ASSESSING OFFICERS AR E SUBORDINATE ARE IN AGREEMENT, THEN THE DIRECTOR GEN ERAL OR CHIEF COMMISSIONER OR COMMISSIONER FROM WHOSE JURISDICTION THE CASE IS TO BE TRANSFERRED MAY, AFT ER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEAR D IN THE MATTER, WHEREVER IT IS POSSIBLE TO DO SO, AND A FTER RECORDING HIS REASONS FOR DOING SO, PASS THE ORDER; (B) WHERE THE DIRECTORS GENERAL OR CHIEF COMMISSION ERS OR COMMISSIONERS AFORESAID ARE NOT IN AGREEMENT, TH E ORDER TRANSFERRING THE CASE MAY, SIMILARLY, BE PASS ED BY THE BOARD OR ANY SUCH DIRECTOR GENERAL OR CHIEF COMMISSIONER OR COMMISSIONER AS THE BOARD MAY, BY NOTIFICATION IN THE OFFICIAL GAZETTE, AUTHORISE IN THIS BEHALF. (3) NOTHING IN SUB-SECTION (1) OR SUB-SECTION (2) S HALL BE DEEMED TO REQUIRE ANY SUCH OPPORTUNITY TO BE GIV EN WHERE THE TRANSFER IS FROM ANY ASSESSING OFFICER OR ASSESSING OFFICERS (WHETHER WITH OR WITHOUT CONCURR ENT JURISDICTION) TO ANY OTHER ASSESSING OFFICER OR ASS ESSING OFFICERS (WHETHER WITH OR WITHOUT CONCURRENT JURISD ICTION) AND THE OFFICES OF ALL SUCH OFFICERS ARE SITUATED I N THE SAME CITY, LOCALITY OR PLACE.' - - ITA 129 TO 132/ 15 5 10. THE PETITIONER'S COUNSEL DOES NOT DISPUTE THAT THE CASE FALL UNDER SECTION 127(3) AS THE FILE IS TRANSFERRED TO THE ASSESSING OFFICER OF SAME CITY, LOCALITY OR PLA CE. THE CONTROVERSY RAISED BY THE PETITIONER IN THE PRESENT CASE REVOLVES ON INTERPRETATION OF SECTION 127(3) OF THE ACT. HE PLEADS THAT SINCE THE AUTHORITY IS DIFFERENT, TH E PROVISION OF SECTION 127(1) HAS TO BE COMPLIED. 11. SECTION 127(3) WAS CONSIDERED BY A BENCH OF FIVE JUDGES OF THE HONOURABLE SUPREME COURT IN KASHIRAM AGGARWALLA VS. UNION OF INDIA AND OTHERS REPORTED I N AIR 1965 SUPREME COURT 1028, IN A CASE OF TRANSFER OF PROCEEDINGS FROM INCOME TAX OFFICERS 'D' WARD DISTR ICT IV(I) AND 'F' WARD DISTRICT IV(2), CALCUTTA TO THE INCOME TAX OFFICER 'E' WARD COMPANIES DISTRICT III, CALCUT TA. THE CHALLENGE WAS MADE TO THESE ORDERS ON THE GROUND TH AT THE BOARD HAD FAILED TO COMPLY WITH A MANDATORY REQUIREMENT AS PRESCRIBED UNDER SECTION 127(1) OF THE ACT. THE HONOURABLE SUPREME COURT, CONSIDERING THE AMENDMENT MADE TO SECTION 127(1) OF THE ACT AND CONSEQUENT TO THE DECISION OF THE HONOURABLE SUPREM E COURT IN PANNALAR BINJRAJ VS. UNION OF INDIA REPORT ED IN 1957 SC 397, CLEARLY HELD THAT IN A CASE WHICH FALL S UNDER PROVISO TO SECTION 127(1) OF THE THEN ACT, WHICH DEALS WITH TRANSFER FROM ONE ASSESSING OFFICER TO A NOTHER ASSESSING OFFICER OF THE SAME CITY, LOCALITY OR PLA CE, NO OPPORTUNITY NEED TO BE GIVEN TO THE ASSESSEE AND CONSEQUENTLY THERE IS NO NEED TO RECORD REASONS FOR TRANSFER. PARAGRAPH 9 OF THE ABOVE CITED DECISION I S RELEVANT TO THE PRESENT CASE AND IT READS AS FOLLOW S: '9. IT IS IN THE LIGHT OF THESE CONSIDERATIONS THAT WE HAVE TO CONSTRUE THE PROVISO TO S.127(1). AS WE HAVE ALR EADY INDICATED, THE CONSTRUCTION FOR WHICH MR.JAIN CONTE NDS IS A REASONABLY POSSIBLE CONSTRUCTION. IN FACT, IF THE WORDS USED IN THE PROVISO ARE LITERALLY READ, MR.JAIN WOU LD BE - - ITA 129 TO 132/ 15 6 JUSTIFIED IN CONTENDING THAT THE REQUIREMENT THAT R EASONS MUST BE RECORDED APPLIES EVEN TO CASES FALLING UNDE R IT. ON THE OTHER HAND, IF THE OBVIOUS OBJECT OF THE PRO VISO IS TAKEN INTO ACCOUNT AND THE RELEVANT PREVIOUS BACKGR OUND IS BORNE IN MIND, IT WOULD ALSO SEEM REASONABLE TO HOLD THAT IN REGARD TO CASES FALLING UNDER THE PROVISO, AN OPPORTUNITY NEED NOT BE GIVEN TO THE ASSESSEE, AND THE CONSEQUENTIAL NEED TO RECORD REASONS FOR THE TRANSF ER IS ALSO UNNECESSARY, AND THIS VIEW IS PLAINLY CONSISTE NT WITH THE SCHEME OF THE PROVISION AND THE TRUE INTENT OF ITS REQUIREMENTS. WE WOULD ACCORDINGLY HOLD THAT THE IMPUGNED ORDERS CANNOT BE CHALLENGED ON THE GROUND THAT THE BOARD HAS NOT RECORDED REASONS IN DIRECTIN G THE TRANSFER OF THE CASES PENDING AGAINST THE ASSESSEE FROM ONE INCOME-TAX OFFICER TO ANOTHER IN THE SAME LOCAL ITY.' (EMPHASIS SUPPLIED) THEREFORE, THE CASE OF THE PETI TIONER THAT THE OPPORTUNITY SHOULD BE GIVEN AND A REASONED ORDER SHOULD BE PASSED HAS NO LEGAL BASIS. IN THIS CASE, THE TRANSFER WOULD FALL WITHIN THE MEANING OF TRANS FER WITHIN THE SAME CITY, LOCALITY OR PLACE AND THEREFO RE, THE REQUIREMENT OF OPPORTUNITY OR RECORDING OF REASONS DO NOT ARISE. 12. THE LEARNED COUNSEL FOR THE PETITIONER RELIES U PON THE FOLLOWING DECISIONS TO STATE THAT OPPORTUNITY SHOUL D BE GIVEN AND REASONS TO BE RECORDED:- (I) AJANTHA INDUSTRIES AND OTHERS VS. CENTRAL BOARD OF DIRECT TAXES AND OTHERS REPORTED IN (1976) 102 ITR 281 (SC), A CASE WHICH FALLS UNDER SECTION 127(1) OF THE ACT AND TRANSFER IN THAT CASE WAS FROM ITO, NELLORE TO ITO, B WARD, SPECIAL CIRCLE II, HYDERABAD. THEREFORE, IT W ILL NOT APPLY TO THE FACTS OF THE PRESENT CASE OF TRANSFER IN TERMS OF SECTION 127(3) OF THE ACT. - - ITA 129 TO 132/ 15 7 (II) GENERAL EXPORTERS VS. COMMISSIONER OF INCOME T AX AND ANOTHER DECIDED BY THE MADRAS HIGH COURT REPORT ED IN (1998)149 CTR (MAD) 138 IS ALSO A CASE OF TRANSF ER FROM CHENNAI TO NEW DELHI. THEREFORE SECTION 127(2) OF THE ACT WILL BE ATTRACTED AND NOT SECTION 127(3) OF THE ACT. (III) G.MOHANDAS AND ANOTHER VS. COMMISSIONER OF INCOME TAX AND OTHERS REPORTED IN (2000)163 CTR (MAD) 199 IS ALSO THE CASE UNDER SECTION 127(2) OF THE ACT AS THE TRANSFER WAS SAID TO BE MADE FROM CHENNA I TO TRIVANDRUM. (IV) SIMILARLY, THE DECISION IN CHAITANYA VS. COMMISSIONER OF INCOME TAX AND OTHERS RENDERED BY THE DIVISION BENCH OF BOMBAY HIGH COURT REPORTED IN (2010)328 ITR 208(BOM) IS ALSO A CASE OF TRANSFER F ROM ITO, WARDHA TO ITO, NAGPUR, WHICH WILL FALL UNDER SECTION 127(1) OR (2) OF THE ACT AND NOT UNDER SUB CLAUSE (3) OF SECTION 127 . (V) MADHU KHURANA VS. COMMISSIONER OF INCOME TAX AND ANOTHER RENDERED BY THE DIVISION BENCH OF GUJAR AT HIGH COURT REPORTED IN (2011) 237 CTR (GUJ) 304 IS ALSO A CASE WHICH FALLS UNDER SECTION 127(2) OF THE ACT. (VI) VIJAYASANTHI INVESTMENTS (P) LTD., VS. CHIEF COMMISSIONER OF INCOME TAX AND OTHERS RENDERED BY THE DIVISION BENCH OF ANDHRA PRADESH HIGH COURT REPORTED IN (1991)91 CTR (AP)36 EQUIVALENT TO (1991)187 ITR 405(AP) IS ALSO A CASE OF TRANSFER FR OM BOMBAY TO VISAKHAPATNAM. 13. THEREFORE, ALL THE DECISIONS CITED BY THE LEARN ED COUNSEL FOR THE PETITIONER WILL NOT APPLY TO THE FA CTS OF THE PRESENT CASE AS THEY ARE DISTINCTLY DIFFERENT AND T HE PROVISION OF LAW WHICH HAS BEEN CONSIDERED BY THE - - ITA 129 TO 132/ 15 8 COURTS IN THOSE CASES ARE NOT RELEVANT TO THE FACTS OF THE PRESENT CASE. 14. IN VIEW OF THE DECISION OF A FIVE JUDGES BENCH OF THE HONOURABLE SUPREME COURT REFERRED TO ABOVE, THE CONTENTION OF THE PETITIONER, CLEARLY HAS NO LEGAL BASIS. IT CLEARLY ESTABLISHES THE FACT THAT THE WRIT PETITION IS FILED WITH MALA FIDE INTENTION OF PROTRACTING THE ASSESSM ENT PROCEEDINGS BY INDULGING IN MEANINGLESS LITIGATION, KNOWING FULLY WELL THAT THE DECISION OF THE FIVE JU DGES BENCH OF THE HONOURABLE APEX COURT DOES NOT SUPPORT THE PETITIONER'S PLEA. IN FACT, THE CASE OF KASHIRA M AGGARWALLA CASE (AIR 1965 SUPREME COURT 1028) IS REFERRED TO IN THE HONOURABLE APEX COURT DECISION O F AJANTHA INDUSTRIES REPORTED IN (1976) 102 ITR 281 ( SC), RELIED UPON BY THE PETITIONER'S COUNSEL. KASHIRAM AGGARWALLA CASE WAS HELD TO BE INAPPLICABLE TO THE FACTS OF THE AJANTHA INDUSTRIES CASE BY THE HONOURABLE SUPREME COURT. THE LEARNED COUNSEL FOR PETITIONER W HEN ASKED AS TO WHY HE IS NOT REFERRING TO THE DECISION OF THE FIVE JUDGES BENCH REPORTED IN AIR 1965 SUPREME COUR T 1028 WHICH IS TO THE POINT IN ISSUE, HE PLEADED THA T HE DOES NOT RELY ON IT. THIS ONLY SHOWS THE DELIBERATE INTENTION TO MISINTERPRET THE LAW FOR PROTRACTING T HE ASSESSMENT PROCEEDING UNDER SOME PRETEXT. 15. ONE OTHER CONTENTION RAISED BY THE LEARNED COUN SEL FOR THE PETITIONER IS THAT THE TRANSFERRING OFFICER IS NOT VESTED WITH THE POWER SPECIFICALLY AND THEREFORE, T HE PROCEEDINGS ARE BAD. 16. THIS CONTENTION APPEARS TO BE TOTALLY MISCONCEI VED AS THE DEFINITION OF THE ASSESSING OFFICER UNDER SECTION 2 7(A) INCLUDES THE JOINT COMMISSIONER OF INCOME TAX. THEREFORE, THE SAID CONTENTION IS REJECTED AS IT IS WITHOUT ANY LEGAL BASIS. - - ITA 129 TO 132/ 15 9 SINCE THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THAT CONSIDERED BY THE JURISDICTIONAL HIGH COURT, WHICH IS APPLICABLE TO THE PRESENT CASE ALSO, FOLLOWING THE SAME, WE ARE INCLINED TO DISMISS THIS GROUND OF APPEAL. 5. OTHER GROUNDS RAISED BY THE ASSESSEE ARE WITH RE GARD TO CONFIRMING THE ADDITIONS MADE BY THE ASSESSING O FFICER IN THE ASSESSMENT ORDER PASSED U/S.144 OF THE ACT, BY THE CIT(APPEALS). 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY, IN THIS CASE, THE ASSESSMENT WAS FRAMED FOR ALL THE IMPUGNED ASSESSMENT YEARS, E X PARTE, U/S.144 OF THE ACT AND THE AO MADE VARIOUS ADDITION S BY ESTIMATING THE INCOME FROM SALE OF MILK, RENTAL REC EIPTS AND INTEREST INCOME. THE SAME WAS CONFIRMED BY THE CIT(APPEALS) WITHOUT PASSING A SPEAKING ORDER. HE HAS NOT GIVEN ANY REASON FOR CONFIRMING THE SAME, WHICH IS NOT PROPER. THEREFORE, IT IS APPROPRIATE TO REMIT THE ISSUE TO THE FILE OF THE AO FOR FRESH CONSIDERATION. ACCORDINGL Y, WE REMIT THE ISSUES RELATING TO ADDITION ON ACCOUNT OF SALE OF MILK, - - ITA 129 TO 132/ 15 10 RENTAL RECEIPTS AND INTEREST INCOME TO THE FILE OF THE AO FOR FRESH CONSIDERATION AFTER GIVING ADEQUATE OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. IT IS NEEDLESS TO SAY THAT THE ASSESSEE SHALL CO-OPERATE WITH THE DEPARTMENT TO CO MPLETE THE ASSESSMENT WITHIN THREE MONTHS FROM THE DATE OF RECEIPT OF THIS ORDER BY THE AO. IF THE ASSESSEE FAIL TO C O-OPERATE WITH THE DEPARTMENT AND FAIL TO RESPOND THE NOTICES ISSUED BY THE AO, THE AO IS AT LIBERTY TO DRAW ADVERSE INFERE NCE SO AS TO COMPLETE THE ASSESSMENT IN ACCORDANCE WITH LAW. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 9 TH OF OCT., 2015 AT CHENNAI. SD/- SD/- ( $ % . & '( ) ( ) * + , ) DUVVURU RL REDDY - ./012304556037- 8 9: /JUDICIAL MEMBER ! 9:;<<5=1>01>?@AB@3 )8 /CHENNAI, C9 /DATED, THE 9 TH OCT., 2015. MPO* - - ITA 129 TO 132/ 15 11 9D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H- /CIT(A) 4. H /CIT 5. FIJ K /DR 6. J(L /GF.