Appeal details
Counselvise Citation
[2022] 107 COUNSELVISE.COM (IT) 0577 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 2 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
03-08-2022
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
C
Assessment Year
2013-2014
Appeal Filed On
30-05-2019
Judgement Text
1. ITA No. 1352/Kol/2019 AY 2013-14 R.Piyarelall Iron & Steel Pvt.Ltd. आयकर अपील य अ धकरण, कोलकाता पीठ ‘सी’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH “C” KOLKATA सम : ी मनीष बोरड, लेखा सद य एवं ी संजय शमा , या यक सद य Before: Shri Manish Borad, Accountant Member, and Shri Sonjoy Sarma, Judicial Member आयकर अपील सं.य/ ITA No. 1352/ कोल /2019 नधा रण वष ः Assessment Year:2013-14 M/s. R.Piyarelall Iron & Steel Pvt. Ltd. 12 Govt. Place, East,Kolkata-700 069. बनाम V/s. DCIT, Circle 3(1), Aaykar Bhavan, P-7 Chowringhee Sq., Kolkata-700 069. PAN: AADCR0294D अपीलाथ /Appellant .. यथ /Respondent अपीलाथ क ओर से /By Appellant कोई नह ं यथ क ओर से /By Respondent Md. Atahar N.Choudhury, CIT, Ld.DR स ु नवाई क तार ख /Date of Hearing 27-07-2022 आदेश उ घोषणा क त थ / Date of Pronouncement 04-08 -2022 आदेश /O R D E R PER MANISH BORAD, AM : This appeal of the assessee for the assessment year 2013-14 is directed against the order dt. 20-03-2018 passed u/s. 263 of the Income-tax Act, 1961 [ hereinafter, referred to as ‘the Act’] by the ld. Principal Commissioner of Income-tax [ in short, hereafter referred to as ‘the Ld. PCIT], Kolkata-1, Kolkata, which is arising from the 2. ITA No. 1352/Kol/2019 AY 2013-14 R.Piyarelall Iron & Steel Pvt.Ltd. assessment order dt. 21-03-2016 passed by the DCIT,Circle-3(1), Kolkata framed u/s. 143(3) of the Act. 2. At the time of hearing the registry has informed that the present appeal is time barred by 345 days. The assessee prayed for condonation of the delay. The reasons for such delay are placed on record. In the condonation application the assessee submitted that Mr. Anurag Sharma was going through an unfortunate mental distress during this period as his son Mr. Akhil Sharma aged 21 had met with sudden unfortunate death on 01.04.2018. Therefore, due to this unfortunate incident and in the process of coping up with the loss of his son's premature and sudden death, Mr Anurag Sharma omitted to file the appeal within the due date. The appellate company had also faced acute financial crisis during this period as all its bank accounts had become NPA and hence there was no operational activities in the company. The Consultant was also followed up in respect of the appeal and at last, it was informed that he had missed out the filing of the appeal as he was mentally disturbed during that period. In the meantime when penalty notice was received for invoking penalty for the alleged concealment of income in respect of the stock, the matter was taken up and hence the appeal is being filed now. It is humbly requested that the delay of about 345 days may kindly be condoned as the delay is attributable to the unavoidable circumstances of the consultant and acute financial crisis of the company. 3. ITA No. 1352/Kol/2019 AY 2013-14 R.Piyarelall Iron & Steel Pvt.Ltd. 3. We, after perusing the condonation application as well as material available on record find merit in the reasonable cause stated by the assessee and in the larger interest of justice, condone the delay and admit the appeal for adjudication. 4. At the time of hearing none appeared on behalf of the assessee. A perusal of records shows that appeal of assessee was fixed for hearing on various dates available on record. Several opportunities have been provided to the assessee. Notice through Registered Post has been sent. But the assessee did not appear. Under these circumstances, we have no option except to proceed with the adjudication of the issues raised in this appeal ex parte qua the assessee. 5. The assessee has raised the following grounds of appeal:- 1. That on the facts and in the circumstances of the case invoking provision of Section 263 of the Income Tax Act, 1961 by the Ld. Principal Commissioner of Income Tax Kolkata- 700001 is bad in law. 2. That on the facts and in the circumstances of the case and in law the Ld. Principal Commissioner of Income Tax, Kolkata 700001 erred in setting aside assessment u/s 143(3) of Income Tax Act, 1961 dated 21.03.2016 without considering the whole facts and the provisions of Income Tax Act, 1961. 3. That the Ld. Principal Commissioner of Income Tax Kolkata 700001 erred in invoking the provisions of Section 263 of Income Tax Act, 1961 for setting aside assessment on the surmises of difference in valuation of stock without considering 4. ITA No. 1352/Kol/2019 AY 2013-14 R.Piyarelall Iron & Steel Pvt.Ltd. the details and facts furnished during the course of the proceedings. 4. The Appellant craves leave to add, amend, alter vary and / or withdraw any or all the above grounds of Appeal. 6. Brief facts of the case are that the assessee is a private limited company, engaged in trading business of iron ore fines. Nil income declared in return of income for the AY 2013-14. Case selected for scrutiny and notices u/s. 143(2) and 142(1) of the Act issued and duly served on the assessee. The ld. AO after considering the submissions of the assessee made certain additions/disallowances totalling to Rs.48,67,604/- and assessed loss at Rs.1,65,24,578/-. 7. Subsequently ld.PCIT called for assessment records and invoked jurisdictional revisionary power provided u/s. 263 of the Act. He observed that there was decrease in value of trade by Rs. 7,03,24,572/-, but there was no corresponding sale of trade items to this effect and thus, issued show cause notice u/s. 263 of the Act to the assessee. Reply was filed by the assessee stating that the said amount is the decrease in the value of stock, which has been claimed as a loss, but failed to satisfy the ld.PCIT by substantiating / producing with necessary evidence. The ld. PCIT accordingly held that the impugned assessment order dt. 21-03-2016 framed u/s. 143(3) of the Act is erroneous and prejudicial to the interest of the revenue and, thus, directed the ld.AO to pass fresh assessment order after considering the observations made in the impugned order of the ld.PCIT. 8. Aggrieved, the assessee is now in appeal before this Tribunal raising four grounds of appeal. Out of which two grounds are general in nature 5. ITA No. 1352/Kol/2019 AY 2013-14 R.Piyarelall Iron & Steel Pvt.Ltd. and remaining grounds are challenging the invocation of jurisdiction u/s. 263 of the Act and also challenging the direction of setting aside the assessment order. None present on behalf of assessee. However, the submissions made before the ld.PCIT by the assessee during the course of 263 proceedings of the Act are available on record. Per contra ld.DR vehemently argued supporting the impugned order of the ld.PCIT. 9. We have heard the ld.DR and perused the records placed before us. Jurisdiction invoked by the ld. PCIT u/s. 263 of the Act is in challenge by the assessee before us. On perusal of the of the impugned order, we find that following is the reason for carrying out revisionary proceeding:- “In the P& L account there was however a debit of Rs. 7,03,24,572/ - under the head ‘change in inventories’. Also as per note-22 of the P&L account giving the details of" Change in inventories of Stock in trade" it is observed that during the previous year relevant to the A.Y.2013-14 the opening balance' of stock-in-trade was Rs.25,74,76,320/- and the closing balance Rs, 18,71,51,748/-. No income from sales was shown during the year, Since the assessee was engaged in trading activities, it was imperative that this lowering of closing stock of (traded) goods should have resulted in income from sales also. However, this was not the case here and since the closing balance of the inventory of stock in trade was lowered 'by Rs.7,03,24,572/- with no corresponding sale (traded) items, the net profit of the assessee and hence its income was under assessed by the same amount of Rs.7,03,24,572/-. 10. Further on perusing the impugned order, we notice that the assessee has claimed that the value of stock has diminished/decreased from Rs.25,74,76,320/- (opening stock-in-trade) to Rs.18,71,51,748/- (closing stock-in-trade). Therefore, the stock-in-trade lowered/diminished by Rs.7,03,24,572/- has been claimed as loss in the return. During the course of proceeding u/s. 263 before the ld.PCIT the assessee failed to file any evidence to support/substantiate the claim of reduced value of closing 6. ITA No. 1352/Kol/2019 AY 2013-14 R.Piyarelall Iron & Steel Pvt.Ltd. stock. Perusal of assessment order reveals that no such issue came for consideration before the ld. AO. The assessee refrained from appearing and has not filed any details about the questionnaire issued by the ld.AO and whether any such information was called for by the ld.AO regarding the issue raised/referred in show cause notice u/s. 263 of the Act. 11. We are unable to find any such documents on record, which could show that this issue of decrease in closing stock came up before ld.AO at any point of time. It is a matter of claiming loss of Rs.7,03,24,572/- towards trading business and without complete evidence such loss claimed by the assessee cannot be allowed. Thus, ld. PCIT has rightly observed/held that the order of the AO u/s. 143(3) of the Act is erroneous and prejudicial to the interest of the revenue. We, therefore, find no infirmity in the impugned order passed u/s. 263 of the Act setting aside the assessment order dt.21- 03-2016 and directing the ld.AO to frame the assessment afresh after considering the observations/findings of the ld.PCIT. The ld.PCIT has rightly invoked jurisdiction u/s. 263 of the Act to setting aside the impugned assessment order passed u/s. 143(3) of the Act. Thus, ground nos. 1, 2 and 3 raised by the assessee are dismissed. Ground no. 4 is general in nature, which requires no adjudication. 12. प रणामत: नधा रती क अपील खा रज क जाती है। In the result, the appeal of the assessee is dismissed. आदेश ख ु ले यायपीठ म दनांक -08-2022 को उ घो षत। Order pronounced in the open Court on 04 -08-2022 Sd/- Sd/- (SANJOY SARMA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER दनांक /Dated : 04-08-2022 7. ITA No. 1352/Kol/2019 AY 2013-14 R.Piyarelall Iron & Steel Pvt.Ltd. **PP/SPS आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1.अपीलाथ /Appellant/Assessee: M/s. R.Piyarelall Iron & Steel Pvt. Ltd. 12 Govt. Place, East,Kolkata-700 069. 2. यथ /Respondent/Revenue: DCIT, Circle 3(1), Aaykar Bhavan, P-7 Chowringhee Sq., Kolkata-700 069. . 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त- अपील / CIT (A) 5. वभागीय त न ध, आयकर अपील य अ धकरण कोलकाता / DR, ITAT, Kolkata 6. गाड फाइल / Guard file. /True Copy By order/आदेश से, Assistant Registrar / Senior Private Secretary ITAT, Kolkata
