Medi Scan, Kolkata V. DCIT, CIR-22, KOLKATA, Kolkata

ITA 1395/KOL/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5026 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 18-11-2015
• Court: TRIBUNAL
• Department Lawyers: SUJIT DAS
• Assessee Lawyers: K M ROY
• Keywords: Depreciation; Opportunity of being heard
• Section: 154

Judgement Text

ITA NO.1395/KOL/2015-MEDI-SCAN-A.Y.2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC B ENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM ] I.T.A NO.1395/KOL/201 5 ASSESSMENT YEAR : 2010-1 1 MEDI-SCAN -VS.- D.C.I.T., CIRCLE-22, KOLKATA KOLKATA (PAN:AAJFM 4182 E) (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI K.M.ROY, FCA FOR THE RESPONDENT : SHRI SUJIT DAS, J CIT, SR.DR DATE OF HEARING : 17.03.2016. DATE OF PRONOUNCEMENT : 6.4.2016. ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 17.07.2015 OF CIT(A)-6, KOLKATA RELATING TO AY 2010-11. 2. THERE IS A DELAY OF ABOUT 47 DAYS IN FILING THE PRESENT APPEAL BY THE ASSESSEE BEFORE THE TRIBUNAL. IT HAS BEEN MENTIONED IN THE AFFIDAVI T FILED BY ONE OF PARTNERS OF THE ASSESSEE FIRM THAT THE IMPUGNED ORDER OF CIT(A) WAS RECEIVED BY ASSESSEE AND WAS HANDED OVER TO THE ASSESSEES ADVOCATE ONE MR.P.K.D AS FOR FILING THE APPEAL BEFORE THE TRIBUNAL. BECAUSE OF THE ADVOCATES ILLNESS THE SAME WAS NOT FILED IN TIME. HE FINALLY RETURNED THE RELEVANT PAPERS TO THE ASSESS EE ON 06.11.2015 EXPRESSING HIS INABILITY TO TAKE UP THE ASSESSEES CASE. THEREAFTE R THE APPEAL PAPERS WERE GIVEN TO THE PRESENT CHARTERED ACCOUNTANT, WHO FILED IT WITH A D ELAY OF 47 DAYS IN FILING THE APPEAL. THE ERSTWHILE ADVOCATE OF THE ASSESSEE HAS ALSO SWO RN TO THE FACTS STATED BY THE ASSESSEE IN THE PETITION FOR CONDONATION OF DELAY. IN THE LIGHT OF THE REASONS GIVEN FOR THE DELAY IN FILING THE APPEAL, I AM OF THE VIEW T HAT THE DELAY IN FILING THE APPEAL HAS TO BE CONDONED AS THE DELAY HAS OCCURRED DUE TO REA SONABLE AND SUFFICIENT CAUSE. THE DELAY IN FILING THE APPEAL BY THE ASSESSEE IS ACCOR DINGLY CONDONED. ITA NO.1395/KOL/2015-MEDI-SCAN-A.Y.2010-11 2 3. AS FAR AS THE MERITS OF THE ASSESSEES APPEAL IS CONCERNED, THE FACTS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM. FOR A.Y.2010-11 THE ASSESSEE FILED RETURN OF INCOME ELECTRONICALLY DECLARING THE TOTAL INCOME OF RS.1,3 4,450/- (WHICH COMPRISES ONLY OF INCOME UNDER THE HEAD INCOME FROM BUSINESS OR PROF ESSION). THE RETURN OF INCOME WAS PROCESSED ELECTRONICALLY AND AN INTIMATION U/S 143(1) OF THE ACT DATED 25.02.2011 WAS ISSUED ACCEPTING THE TOTAL INCOME RETURNED BY T HE ASSESSEE. 4. BY AN ORDER DATED 30.05.2012 PASSED U/S 154 OF THE ACT AN INTIMATION DATED 25.02.2011 WAS AMENDED WHEREBY THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED AT RS.5,00,100/-. 5. AGAINST THE AFORESAID ORDER DATED 30.05.2012 TH E ASSESSEE PREFERRED APPEAL BEFORE CIT(A). BEFORE CIT(A) THE ASSESSEE POINTED OUT THAT THE INCOME DECLARED IN THE RETURN OF INCOME BY THE ASSESSEE AT RS.1,34,445/- W AS ERRONEOUS AND WAS BASED ON THE PROFIT AS PER PROFIT AND LOSS ACCOUNT OF RS.4,95,63 8/-. THIS PROFIT AS PER PROFIT AND LOSS ACCOUNT WAS WRONGLY CALCULATED BECAUSE OF OVER VALU ATION OF CLOSING STOCK BY RS.6310 AND NON ALLOWANCE OF REMUNERATION OF PARTNERS AND I NTEREST ON THEIR CAPITAL OF RS.4,93,790/-. IF BOTH THE ABOVE FIGURES ARE CONSI DERED THEN THERE WOULD BE A LOSS OF RS.4462 AS PER THE PROFIT AND LOSS ACCOUNT. THE CO NSEQUENT TOTAL INCOME THAT SHOULD BE ARRIVED AT WOULD BE LOSS OF RS.4462/-. THE ASSE SSEE HAD POINTED OUT THAT THE EXCESS NET PROFIT WOULD BE RS.5,00,100 (RS.6310 + RS.4,93, 790). THE ASSESSEE POINTED OUT THESE FACTS TO THE AO. THE AO HOWEVER UNDERSTOOD T HE ABOVE FACTS AS AN ADMISSIBLE BY THE ASSESSEE THAT ITS INCOME WAS UNDERSTATED BY RS.5,00,100 AND HE PROPOSED A RECTIFICATION OF THE INTIMATION U/S.143(1) OF THE A CT BY ISSUING A NOTICE U/S.154 OF THE ACT DATED 27.1.2012 AND THEREAFTER PASSED THE IMPUG NED ORDER U/S.154 OF THE ACT. THE ASSESSEE POINTED OUT BEFORE CIT(A) THAT THE AO HAS NOT PROPERLY ITS STAND BEFORE THE AO AND THE AO PASSED THE IMPUGNED ORDER U/S.154 OF THE ACT DATED 25.2.2011 WHEREBY HE DETERMINED THE TOTAL INCOME OF THE ASSES SEE AT RS.5,00,100/-. WE MUST POINT OUT THAT THE GROUNDS OF APPEAL FILED BY THE ASSESSEE BEFORE CIT(A) WAS NOT HAPPILY WORDED IN THIS REGARD AND IT READ AS FOLLOW S :- 1. YOUR PETITIONER HAS FILLED RECTIFICATION REQUEST U/ S 154 ON 23.04.2012. BUT CPC BANGALORE DID NOT ACCEPT THE SAME AND SEND THE DEMA ND NOTICE OF RS.1,80,330/.-. ITA NO.1395/KOL/2015-MEDI-SCAN-A.Y.2010-11 3 2. FOR ACCEPTANCE OF NOTIFICATION REQUEST OF COMBINED PROFIT OF BOTH CENTRE. THROUGH PROFIT & LOSS A/C SHOED A LOSS OF RS.4,462/- DUE TO WRONG CASTING OF BALANCE INSPITE OF PROFIT OF RS.24,709 AND DEPOSITED A TOTAL TAX OF RS.9,162 ON 29-3-2012. HENCE, YOUR PETITION ASSETS THAT THE RECTIFICATION REQUEST SHOULD NOT CONSIDERED BY CPC, BANGALORE, MAY BE ACCEPTED. 6. BEFORE CIT(A), THE STAND OF THE ASSESSEE WAS T HAT AT THE TIME OF FILLING RETURN OF INCOME IN FORM NO. ITR- V ITS TAX CONSULTANT DID NO T PROPERLY FILL THE FORM PROPERLY. THE ASSESSEE POINTED OUT THAT IT HAD TWO UNITS IN T HE TRADE NAME OF M/ S MEDI SCAN, ARINDAM COMPLEX, AMARABATI MORE, SODEPUR, KOL KATA, AND ANOTHER AT 1,K.D COMPLEX, BASUDEVPUR ROAD, 2 ANJANGARH, FEEDER ROAD, SHYAMNAGAR, 24 PGS(N). DURING THE F. Y 2009-10, AMARABATI (SODEPUR UNITS) HAD A PROFIT OF RS. 60,300/ - WHILE SHYAMNAGAR UNIT INCURRED LOSS OF RS. 64,762/- . AS A RESULT THE NET LOSS TO THE ASSESSEE WAS RS. 4,462/-. IT WAS INADVERTENTLY SHOW N IN I.T.R- V THAT THE GROSS TOTAL INCOME OF THE ASSESSEE WAS RS.1,34,445/ - AS AGAINS T LOSS OF RS. 4,462/-. THE ASSESSEE POINTED OUT THAT IT HAD FILED A REVISED RE TURN BUT THAT WAS ALSO INCORRECTLY FILLED UP BY ITS TAX CONSULTANT. AS A RESULT, COMP UTERISED PROCESSING CENTRE (CPC) BANGALORE SENT DEMAND NOTICE OF INTIMATION U/ S 143 (1) FOR RS. 48,480/- VIDE INTIMATION DATED 25.2.2011. THE ASSESSEE ALSO POIN TED OUT THAT IT APPLIED FOR RECTIFICATION U/S 154 TO CPC, BANGALORE AGAINST ABO VE ORDER AND SUBMITTED COPIES OF PROFIT AND LOSS A/ C AND BALANCE SHEET. THEREAFTER THE ASSESSEE HAD SUBMITTED ONLINE RECTIFICATION REQUEST U/S 154 ON 23.04.2012. THE AS SESSEE POINTED OUT THAT THE CPC BANGALORE RAISED A DEMAND OF RS. 1,80,330/- IN ITS ORDER DATED 30.5.2012 WHICH WAS IN CHALLENGE BEFORE CIT(A). 7. IT IS SEEN THAT THE CPC, BANGALORE, HAD ISSUED A NOTICE U/S 154 DATED 27.01.2012 WHICH READS AS UNDER:- ' THE ORDER PASSED UNDER SEC 143(1) DATED 25/02/201 1 IN YOUR CASE IS REQUIRED TO THE AMENDED AS THERE IS A MISTAKE, AS PER DETAIL S FROM THE RECORDS WITHIN THE MEANING OF SECTION 154 OF THE INCOME TAX ACT, 1961. THE RECTIFICATION OF THE MISTAKE, AS PER DETAILS GIVEN BELOW WILL HAVE THE E FFECT OF ENHANCING THE ASSESSMENT/ REDUCING THE REFUND/INCREASING YOUR LIA BILITY. IN CASE YOU HAVE ANY OBJECTIONS TO THE SAME, YOUR W RITTEN REPLY ON THE ATTACHED RESPONSE SHEET SHOULD REACH THIS OFFICE WITHIN 15 D AYS FROM THE DATE OF RECEIPT OF THIS NOTICE. RESPONSE SHEET IS ATTACHED TO THIS NOTICE. ITA NO.1395/KOL/2015-MEDI-SCAN-A.Y.2010-11 4 PARTICULARS OF THE MISTAKE PROPOSED TO BE RECTIFIED . SAME AMOUNT OF DEPRECIATION HAS BEEN CLAIMED BY YOU IN THE SCHEDULE BP U/S 32(1)(I) AND 32(1)(II) I N THE RETURN OF INCOME AFORESAID DEPRICIATION U/S 32(L)(I ) CLAIMED IN THE RETURN OF INCOME AND ALLOWED WHILE PROCESSING IS PROPOSED TO BE WITHDRAWN AS DEPRECIATION U/S 32(1)(I) IS NOT ALLOWABLE IN YOUR CASE, SINCE THE NATURE OF BUSINESS IN YOUR CASE IS NOT GENERATION AND DISTRIBUTION OF POWER WHICH ARE COVERED UNDER BUSINESS CODE 114 IN SCHEDULE NATURE OF BUSINESS IN THE R/ I. 8. THE CIT(A) HOWEVER DISMISSED THE APPEAL OF THE ASSESSEE OBSERVING AS THAT IT APPEARS THAT THE ORDER U/S 154 DATED 30.05.2012 WAS PASSED IN CONSEQUENCE OF THE NOTICE DATED 27.1.2012 DISCUSSED ABOVE. THE CIT(A) HELD THAT THE APPELLANT HAS NOT MADE ANY SUBMISSIONS ABOUT THE NATURE OF MISTAKE DE SCRIBED IN THE NOTICE. THE CIT(A) ALSO OBSERVED THAT DURING THE APPELLATE PROC EEDINGS ALSO, THE AR SIMPLY SIMPLY RELIED UPON THE STATEMENT OF FACTS AND FURNI SHED A WRITTEN SUBMISSION STATING THAT THERE WERE CERTAIN MISTAKES IN FILLING THE E-R ETURN WHILE FURNISHING DETAILS OF THE GROSS RECEIPTS AND PARTNERS' REMUNERATION. THE CIT( A) FURTHER OBSERVED THAT IT ALSO APPEARS THAT THE NOTICE OF THE CPC WAS NOT RESPONDE D TO. THE PROVISIONS OF SECTION 143(1) PROVIDE FOR PRIMA-FACIE ADJUSTMENTS IN RELAT ION TO ARITHMETICAL ERRORS AND INCORRECT CLAIMS APPARENT FROM ANY INFORMATION IN T HE RETURN. THE CIT(A) WAS OF THE VIEW THAT THE ACIT(CPC) WAS CORRECT IN DISALLOWING THE INCORRECT CLAIM U/S 32(1)(I) APPARENT FROM THE RETURN. HENCE, HE REJECTED THE AP PEAL OF THE ASSESSEE, AGAINST WHICH ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSE SSEE BEFORE THE TRIBUNAL. 9. AFTER HEARING THE RIVAL SUBMISSIONS I AM OF THE VIEW THAT IT IS FIT AND PROPER TO SET ASIDE THE ORDER OF CIT(A) AND REMAND THE ISSUE FOR FRESH CONSIDERATION BY CIT(A). IN THIS REGARD THE LEARNED COUNSEL FOR THE ASSESSEE HA S SUBMITTED BEFORE US THAT THE ASSESSEE COULD NOT PROPERLY SET OUT BEFORE CIT(A) T HE ASSESSEES GRIEVANCES WITH REGARD TO THE ORDER DATED 30.05.2012. KEEPING IN M IND THE ABOVE ASSURANCE THAT THE ASSESSEE WOULD SET FORTH ITS GRIEVANCE PROPERLY, I SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE CIT(A) TO ALLOW OPPORTUNITY TO THE ASSES SEE TO SET FORTH HIS GRIEVANCES AND ITA NO.1395/KOL/2015-MEDI-SCAN-A.Y.2010-11 5 DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTE R AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE WILL ADDRESS T HE GRIEVANCE AS SET OUT BY THE AO IN THE SHOW CAUSE NOTICE DATED 27.1.2012. THE CIT(A) WILL ALSO ADDRESS THE GRIEVANCE OF THE ASSESSEE AS SET OUT IN PARA-4 OF THIS ORDER. T HE CIT(A) WILL AFFORD OPPORTUNITY OF BEING HEARD TO THE PARTIES BEFORE DECIDING THE APPE AL. IN THIS REGARD I MAY ALSO OBSERVE THAT U/S 250(5) OF THE ACT, POWERS OF THE C IT(A) ARE VERY WIDE AND EMPOWER HIM TO GO INTO ANY GROUND NOT SPECIFIED IN THE GRO UNDS OF APPEAL. THE CIT(A) THEREFORE IS REQUESTED TO CONSIDER AND ADJUDICATE T HE GRIEVANCES THAT MAY BE RAISED BY THE ASSESSEE IN THE SET ASIDE PROCEEDINGS;. FOR STA TISTICAL PURPOSES THE APPEAL IS TREATED AS ALLOWED. 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS TR EATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 6.4.2016. SD/- [ N.V.VASUDEVAN ] JUDICIAL MEMBER DATED : 6.4.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.MEDISCAN, GR.FLOOR, ARINDAM COMPLEX, BARASAT ROAD , AMARABOTI, SODEPUR, KOLKATA-700110. 2. D.C.I.T., CIRCLE-22, KOLKATA. 3. CIT(A)-6, KOLKATA. 4. CIT-8, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER A SSTT.REGISTRAR, ITAT, KOLKATA BENCHES ITA NO.1395/KOL/2015-MEDI-SCAN-A.Y.2010-11 6