Antony Metals P Ltd., CHENNAI V. ITO, Tirunelveli

ITA 1339/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6363 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 25-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RU GEORGE
• Assessee Lawyers: A S SRIRAMAN
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1338/MDS/2017 ' (' / ASSESSMENT YEAR : 2012-13 M/S JOHN SAW MILL PVT. LTD., D.NO.10/1, SEEVALAPERI ROAD, PALAYMKOTTAI, TIRUNELVELI 627 002. PAN : AACCJ 5450 A V. THE INCOME TAX OFFICER, WARD 1, TIRUNELVELI. (*+/ APPELLANT) (,-*+/ RESPONDENT) ./ ITA NO.1339/MDS/2017 ' (' / ASSESSMENT YEAR : 2012-13 M/S ANTONY METALS PVT. LTD., D. NO.7/2, SEEVALAPERI ROAD, PALAYMKOTTAI, TIRUNELVELI 627 002. PAN : AAJCA 2767 J V. THE INCOME TAX OFFICER, WARD 1, TIRUNELVELI. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANTS BY : SH. A.S. SRIRAMAN, ADVOCATE ,-*+ . / / RESPONDENT BY : SMT. RUBY GEORGE, CIT 0 . 1$ / DATE OF HEARING : 02.08.2017 2!( . 1$ / DATE OF PRONOUNCEMENT : 23.08.2017 2 I.T.A. NOS.1338 & 1339/MDS/17 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS OF THE TWO INDEPENDENT ASSESSEE S ARE DIRECTED AGAINST THE RESPECTIVE ORDERS PASSED BY TH E PRINCIPAL COMMISSIONER OF INCOME TAX, MADURAI, AND PERTAIN TO ASSESSMENT YEAR 2012-13. SINCE COMMON ISSUE ARISES FOR CONSID ERATION IN BOTH THE APPEALS, WE HEARD BOTH THE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. SH. A.S. SRIRAMAN, THE LD.COUNSEL FOR THE ASSESS EES, SUBMITTED THAT THE ASSESSING OFFICER COMPLETED THE ASSESSMENT IN BOTH THE CASES AFTER CALLING FOR ALL THE DETAILS NE CESSARY FOR COMPLETING THE ASSESSMENT. HOWEVER, THE PRINCIPAL COMMISSIONER FOUND THAT THERE WAS INCREASE IN THE CAPITAL CONTRI BUTED BY THE SHAREHOLDERS. ACCORDING TO THE LD. COUNSEL, WHEN T HE ASSESSING OFFICER CALLED FOR DETAILS AND EXAMINED THE SAME, T HE PRINCIPAL COMMISSIONER CANNOT SAY THAT THERE WAS NO ENQUIRY. AT THE BEST, IT MAY BE AN INADEQUATE ENQUIRY AND IT CANNOT BE SAID THAT THE ASSESSING OFFICER DID NOT MAKE ANY ENQUIRY. ACCORD ING TO THE LD. COUNSEL, INADEQUATE ENQUIRY WOULD NOT FALL WITHIN T HE PURVIEW OF PREJUDICIAL TO THE INTERESTS OF REVENUE. MOREOVER, THE ASSESSING 3 I.T.A. NOS.1338 & 1339/MDS/17 OFFICER INITIATED PENALTY UNDER SECTION 271(1)(C) O F THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') AND AFTER NECESSARY ENQUIRY, THE ASSESSING OFFICER DROPPED THE PENALTY PROCEEDINGS. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE PRINCIPAL COMMISS IONER CANNOT DIRECT THE ASSESSING OFFICER TO INITIATE PENALTY PR OCEEDINGS. 3. WE HAVE HEARD SMT. RUBY GEORGE, THE LD. DEPARTME NTAL REPRESENTATIVE, ALSO. IT IS AN ADMITTED FACT THAT THERE WAS INCREASE IN THE SHARE CAPITAL OF BOTH THE ASSESSEES. EVEN T HOUGH THE ASSESSEES CLAIM THAT THE ASSESSING OFFICER CALLED F OR NECESSARY DETAILS, THE ASSESSMENT ORDERS IN RESPECT OF BOTH T HE ASSESSEES DO NOT REFLECT ANYTHING ABOUT CALLING FOR THE MATERIAL AND APPLICATION OF MIND OF THE ASSESSING OFFICER TO THOSE MATERIALS. THE PROCEEDING BEFORE THE ASSESSING OFFICER IS DEEMED TO BE A JUDI CIAL PROCEEDING. THE ORDER PASSED BY THE ASSESSING OFFICER IS SUBJEC TED TO FURTHER APPEAL BEFORE HIGHER FORUMS AND ALSO SUBJECTED TO R EVERSION BY THE PRINCIPAL COMMISSIONER OF INCOME-TAX. THEREFORE, T HE DECISION TAKEN BY THE ASSESSING OFFICER HAS TO BE A REASONED ONE. IN OTHER WORDS, THE ASSESSING OFFICER HAS TO RECORD HIS OWN REASONING ON APPLICATION OF MIND TO THE MATERIAL AVAILABLE ON RE CORD. THE ASSESSING OFFICERS APPLICATION OF MIND SHALL BE RE FLECTED IN THE 4 I.T.A. NOS.1338 & 1339/MDS/17 ASSESSMENT ORDER. THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT THE APPLICATION OF MIND TO THE MATERIAL AVAILABLE O N RECORD BY THE DECISION MAKER / ASSESSING OFFICER HAS TO BE REFLEC TED IN THE ASSESSMENT ORDER. THIS WOULD AVOID ARBITRARY DECIS ION AND ALSO REPOSE CONFIDENCE ON THE TAX PAYER. SINCE THE ASSE SSING OFFICER HAS NOT RECORDED ANY REASONING WITH REGARD TO INCRE ASE IN SHARE CAPITAL AND ALSO FOR DROPPING THE PENALTY PROCEEDIN G, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE PRINCIPAL COMMIS SIONER HAS RIGHTLY EXERCISED HER POWER UNDER SECTION 263 OF TH E ACT. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITY AND ACCORDINGLY T HE SAME ARE CONFIRMED. 4. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEES STAND DISMISSED. ORDER PRONOUNCED ON 23 RD AUGUST, 2017 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 23 RD AUGUST, 2017. KRI. 5 I.T.A. NOS.1338 & 1339/MDS/17 . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. PRINCIPAL CIT, MADURAI-2, MADURAI 5. 68 ,1 /DR 6. 9' : /GF.