Agro Service Syndicate, Kolkata V. ITO, Ward-29(3)), Kolkata, Kolkata

ITA 1421/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99858 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 20-08-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 05-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILOY BASAN SOM JCITSRDR
• Assessee Lawyers: V N PUROHIT
• Keywords: Rectification of order
• Section: 143(3); 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 1421 / KOL / 2012 ASSESSMENT YEAR :2005-06 AGRO SERVICE SYNDICATE C/O A.K.DUTTA & CO. ROOM NO. 207, 2, CHURCH LANE, KOLKATA-01 [ PAN NO.AAFFA 3558 C ] V/S . ITO, WARD-29(3), AAYKAR BHAVAN (DAKSHIN), 2, GARIAHAT ROAD (S), KOLKATA-68 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI V.N.PUROHIT, FCA /BY RESPONDENT SHRI NILOY BASAN SOM, JCIT-SR-DR /DATE OF HEARING 08-09-2015 /DATE OF PRONOUNCEMENT 07-10-2015 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-XVI, KOLKATA IN APPEAL NO.74/C IT(A)-XVI/10-11/KOL DATED 21.02.2011. ORDER U/S. 154/264 WAS FRAMED BY ITO(TECH)-10, KOLKATA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT) VIDE HIS ORDER DATED 19.07.2011FOR ASSESSMENT YEAR 2005-06. 2. THE ISSUE RAISED BY THE ASSESSEE IN THE PRESENT APPEAL IS THAT THE LD.CIT HAS ERRED IN PASSING THE RECTIFICATION ORDER U/S 154 OF THE ACT. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND IS INTO THE BUSINESS OF PESTICIDES. THE FIRM WAS ASSESSED U /S 143(3) BY THE AO FOR ITA NO.1421/KOL/2012 A.Y. 2005-06 AGRO SERVICE SYNDICATE V. ITO WD-29(3) KOL. PAGE 2 THE ASSESSMENT YEAR 2005-06 FOR AN AMOUNT OF RS. 6, 10,300/- AND THE SAME ASSESSMENT ORDER WAS RECTIFIED U/S 154 OF THE ACT W HEREIN THE INCOME WAS ENHANCED TO AN AMOUNT OF RS. 6,23,420/-. SUBSEQUENT LY THE NOTICE WAS ISSUED UNDER SECTION 148 OF THE ACT AND ASSESSMENT WAS FRA MED ACCORDINGLY U/S 147 OF THE ACT BY MAKING AN ADDITION OF RS. 57,20,682/- TO THE INCOME OF THE ASSESSEE AND THE TOTAL INCOME WAS ENHANCED TO AN AM OUNT OF RS. 63,44,100/- 4. THE ASSESSEE FILED AN APPLICATION TO THE LD. CIT FOR REVISION U/S 264 OF THE ACT ON DATED 12-12-2011AGAINST THE ASSESSMENT O RDER PASSED U/S 143(3)R.W.S 154/147 OF THE ACT. THE LD.CIT HAS DELE TED THE ADDITION OF RS. 57,20,682/- BY PASSING A REVISION ORDER U/S 264 OF THE ACT ON DATED 30-12- 2011. HOWEVER, THE CIT FINDS FROM THE RECORD AND OR DER OF SECTION 264 A MISTAKE APPARENT FROM THE RECORDS IN SO FAR THE ORD ER U/S 264 OF THE ACT WAS PASSED IN CONTRAVENTION OF THE PROVISIONS OF SECTIO N 264(4) OF THE ACT I.E. ORDER PASSED BY THE AO WAS SUBJECT TO AN APPEAL TO CIT(A). THE CIT ISSUED A SHOW NOTICE TO THE ASSESSEE WHICH IS REPRODUCED AS UNDER:- PLEASE REFER TO YOUR APPLICATION FOR REVISION U/S 264 OF THE INCOME TAX ACT, 1961, FILED ON 12 TH DECEMBER, 2010, AGAINST ORDER U/S. 143(3)/154/147 PASSED BY ITO, WARD-29(3), KOLKATA ON 21-12-2010. IN THIS CASE AN ORDER U/S. 254 OF THE INCOME TAX ACT, 1961 WAS PASSED BY THE CIT, KOL KATA-X, KOLKATA ON 30- 12-2011 ALLOWING YOUR PETITION. IN THIS ORDER THE C IT HAD ADMITTED YOUR PETITION U/S. 264 BY GIVING THE FOLLOWING FINDING: FURTHER, THERE WAS NO APPEAL PENDING AGAINST THE IM PUGNED REASSESSMENT ORDER AS ON THE DATE OF FILLING THIS A PPLICATION. HOWEVER, ON GOING THROUGH THE RECORDS IT IS NOTICED THAT THE ABOVE FINDING IS ERRONEOUS AS YOU HAD FILED AN APPEAL AGAINST THE IM PUGNED REASSESSMENT ORDER BEFORE THE LD. CIT(A)-XVI, KOLKATA VIDE APPEA L NO. 74/CIT(A)- XVI/WARD-29(3)/10-11 WHICH WAS NOT ONLY PENDING ON THE DATE OF FILING THE REVISION APPLICATION BUT WAS ALSO PENDING ON THE DA TE OF ORDER MADE U/S. 264 OF THE INCOME-TAX ACT, I.E. 30-12-2011. FROM THE RE CORDS IT IS ALSO SEEN THAT YOU HAD FILED A LETTER DATED 13 TH DECEMBER, 2011 TO THE LD CIT(A)-VI, KOL STATING THAT YOU HEREBY WITHDRAW THE ABOVE APPEAL. HOWEVER, NO ORDER HAS BEEN PASSED BY THE CIT(A) BEFORE THE DISPOSAL OF AP PLICATION U/S. 254. AS PER THE PROVISION OF SECTION 264(4) OF THE INCO ME-TAX ACT, THE COMMISSIONER SHALL NOT REVISE ANY ORDER UNDER THAT SECTION WHERE THE ORDER HAS BEEN MADE, THE SUBJECT OF AN APPEAL TO THE COMM ISSIONER OF INCOME-TAX (APPEALS). AS PER CBDT CIRCULAR NO. 367 DATED 26 TH JULY, 1983, AN ORDER CANNOT BE SAID TO HAVE BEEN MADE SUBJECT OF AN APPEAL WHERE THE APPEALS ITA NO.1421/KOL/2012 A.Y. 2005-06 AGRO SERVICE SYNDICATE V. ITO WD-29(3) KOL. PAGE 3 WAS WITHDRAWN BY THE ASSESSEE AND IT IS DISMISSED A S SUCH BY THE CIT(A) WITHOUT PASSING AN ORDER ON MERITS. IN THE INSTANT CASE NO SUCH ORDER HAS BEEN PASSED BY THE LD. CIT(A)-XVI, KOL BEFORE THE DATE OF PASSING OF ORDER U/S. 264. THEREFORE, THE ASSESSMENT ORDER AGAINST W HICH THE APPLICATION U/S. 264 WAS MADE WAS STILL THE SUBJECT OF AN APPEAL BEF ORE THE COMMISSIONER (APPEALS)-XVI, KOL AND AS SUCH THE COMMISSIONER SHO ULD NOT HAVE REVISED ORDER U/S. 264 AS PER THE PROVISIONS OF SECTION 264 (4)(C). THIS BEING A MISTAKE APPARENT FROM RECORDS IS PROPO SED TO BE RECTIFIED U/S. 154 OF THE INCOME TAX ACT AND YOUR APPLICATION U/S. 264 AGAINST THE IMPUGNED ASSESSMENT ORDER IS PROPOSED TO BE DISMISSED AS NOT MAINTAINABLE IN LAW. YOU ARE GIVEN AN OPPORTUNITY TO SHOW CAUSE WHY THE PROPOSED ACTION SHOULD NOT BE TAKEN BY APPEARING BEFORE ME ON THE DATE SPE CIFIED IN THE NOTICE U/S. 154 OF THE INCOME TAX ACT DATED 03-04-2012, ENCLOSE D HEREWITH. THE A/R OF THE ASSESSEE DEMONSTRATED BEFORE THE LD. CIT THAT THE APPEAL FILED BY THE ASSESSEE HAS BEEN WITHDRAWN BY LETTER DATED 13-12-2011 BESIDES ASSESSEE HAS SUBMITTED VARIOUS CASE LAWS AND CBDT C IRCULAR IN SUPPORT OF ITS CLAIM. HOWEVER THE LD.CIT HAS REJECTED THE PLEA OF THE ASSESSEE AND HELD THAT THE ORDER OF THE AO DATED 21.12.2010 U/S 143(3)/154 /147 OF THE ACT STAND CORRECT. AGGRIEVED ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORDER OF LD. CIT U/S 154 OF THE ACT ON THE FOLLOWING GROUNDS OF APPEAL:- 1. FOR THE LEARNED CIT X/KOL ERRED IN INITIATING P ROCEEDINGS U/S. 154 TO RECTIFY THE ORDER U/S. 264 DATED 30.12.11 PASSED BY HIS PREDECESSOR IN OFFICE CIT X. 2. FOR THE FACT THAT THE ALLEGED MISTAKE WAS NOT AP PARENT FROM THE RECORDS BUT INTERPRETED AS SUCH BY THE CIT SRI SUBR AT MISHRA AFTER LONG ARGUMENTS, DEBATES AND INTERPRETATION, THE SAID ORD ER OF RECTIFICATION PASSED U/S. 154/264 WAS WRONG AND SHOULD BE CANCELL ED. 3. FOR THE LEARNED CIT X ERRED IN HOLDING THAT ON T HE DATE OF PASSING THE ORDER U/S. 264 BY THE CIT X ON 30,.12.2011, AN APPEAL BY THE ASSESSEE WAS PENDING BEFORE THE CIT(A) XVI IGNORING THE FACT THAT THE APPEAL WAS DISMISSED BY THE CIT(A) XVI ON 13.12.201 2 AS APPEARS FROM THE NOTING IN ORDER SHEET OF THE APPEAL PROCEE DINGS. MR.V.N. PURAHIT, LD. AR APPEARED ON BEHALF OF ASSES SEE AND MR. NILOY BASAN SOM, LD. DR APPEARED ON BEHALF OF REVENUE ITA NO.1421/KOL/2012 A.Y. 2005-06 AGRO SERVICE SYNDICATE V. ITO WD-29(3) KOL. PAGE 4 5. BEFORE US LD. AR SUBMITTED PAPER BOOK WHICH CONT AINS PAGES FROM NO. 1 TO PAGES 24 AND SUBMITTED THAT IN VIEW OF THE CBD T CIRCULAR THE ORDER PASSED BY THE AO CANNOT BE SAID TO HAVE BEEN MADE SUBJECT MATTER OF APPEAL IF THE APPEAL HAS BEEN DISPOSED OF BY THE LD.CIT( A) WITHOUT PASSING AN ORDER U/S 251(1) ON MERITS BESIDES THIS LD AR HA S SUBMITTED THE CASE LAWS IN SUPPORT OF HIS CLAIM AS MENTIONED UNDER : 1. CHIRANJILAL DAGA V. CIT & ANR. (1978) 113 ITR 36 3 (MAD) 2. RADHEY SHYAM SUBDAR MAL V. CIT (1984) 146 ITR 37 4(ALL) 3. LALA RAJESHWAR PERSHAD V. CIT (1955) 28 ITR 842 (P&H) 4. CIT V. UNITED MERCANTILE CO. (P) LTD. (1986) 1 58 ITR 41 (RAJ) THE LD DR VEHEMENTLY SUPPORTED THE ORDERS OF THE AU THORITIES BELOW. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AS PER SECTION 2 64 OF THE ACT THE ASSESSEE CAN SEEK RELIEF AGAINST THE ORDER OF AO BY MAKING A N APPLICATION TO THE LD. CIT WITHIN THE PRESCRIBED TIME. THE APPLICATION FOR REL IEF TO THE LD.CIT CAN BE FILED SUBJECT TO THE FULFILLMENT OF CERTAIN CONDITIONS AS ENUMERATED IN THE CLAUSE OF SUB SECTION (4) OF SECTION 264 OF THE ACT. CLAUSE READS AS UNDER:- 264. (4) THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER SH ALL NOT REVISE ANY ORDER UNDER THIS SECTION IN THE FOLLOWING CASES- (A) . (B) WHERE THE ORDER HAS BEEN MADE THE SUBJECT OF AN A PPEAL [TO THE COMMISSIONER (APPEALS) OR] TO THE APPELLANT TRIBUNA L. HOWEVER THE CBDT IN TERM OF ITS CIRCULAR NO. 367 DA TED 26.7.1983 HAS DESCRIBED THE SITUATIONS WHERE ORDER CAN BE SAID TO HAVE BEEN MADE SUBJECT OF AN APPEAL IN TERMS OF CLAUSE OF SUB SECTION (4) 1. SECTION 264(4) RE-PRODUCED AS UNDER:- 1. SECTION 264(4) PROVIDES THAT THE COMMISSIONER SHALL NOT REVISE ANY ORDER UNDER THAT SECTION WHERE THE ORDER HAS BEEN M ADE THE SUBJECT OF AN APPEAL TO THE COMMISSIONER (APPEALS) OR TO THE APPE LLANT TRIBUNAL. A DOUBT HAS BEEN RAISED WHETHER IN THE FOLLOWING SITUATIONS THE ORDER CAN BE SAID TO HAVE BEEN MADE SUBJECT OF AN APPEAL: ITA NO.1421/KOL/2012 A.Y. 2005-06 AGRO SERVICE SYNDICATE V. ITO WD-29(3) KOL. PAGE 5 (I) WHERE THE APPEAL WAS WITHDRAWN BY THE ASSESSEE AND IT WAS DISMISSED AS SUCH; (II) WHERE THE APPEAL WAS DISMISSED ON THE GROUND T HAT THE APPEAL WAS INCOMPETENT; (III) WHERE THE APPEAL WAS DISMISSED ON GROUND OF L IMITATION. 2. THE BOARD ARE OF THE VIEW THAT THE ORDER CANNOT BE SAID TO HAVE BEEN MADE SUBJECT OF AN APPEAL IF THE APPEAL HAS BEEN DISPOSED OF BY THE COMMISSIONER (APPEALS) OR THE APPELLANT TRIBUNAL WI THOUT PASSING ON ORDER UNDER SECTION 251(1) OR 254(1) ON MERITS. CIRCULAR : NO. 367 [F.NO.273/21/80ITJ], DATED 26-7- 1983 IN THE PRESENT CASE LD. CIT(A) HAS PASSED THE CLEAR ORDER DATED 03.09.2012 STATING THAT THE ASSESSEES APPEAL IS DISMISSED AS WITHDRAWN FOR STATISTICAL PURPOSE. HOWEVER THE CRUX OF THE ORDER OF CIT(A) IS REPRODUCED BELOW FOR THE SAKE OF CLARITY. 3. MR. A.K. DUTTA, CA & AR SUBMITTED A LETTER ON 1 3.12.2011 FOR WITHDRAWAL OF APPEAL AND SUBMITTED AS FOLLOWS:- FURTHER TO OUR LETTER DT. 9 TH DECEMBER, 2011, DEPOSITED IN YOUR OFFICE TODAY, WE STATE THAT WE DO HEREBY WITHDRAW THE ABOV E APPEAL. 3. LD. PREDECESSOR CIT(A)-IV VIDE ORDER SHEET DATED 13.12.2011 OBSERVED ON THE ORDER SHEET AS FOLLOWS:- MARK AS DISPOSAL IN VIEW OF APPLICATION FOR WITHDR AW FILED BY APPELLANT. FROM THE AFORESAID DISCUSSION, WE OBSERVE THAT THE APPLICATION FILED BY THE ASSESSEE FOR THE RELIEF UNDER SECTION 264 OF THE AC T BEFORE LD. CIT WAS ACCEPTED AND THE SAME WAS ADJUDICATED, GRANTING THE RELIEF TO THE ASSESSEE, BUT THE SAME RELIEF WAS REJECTED BY PASSING AN ORDE R UNDER SECTION 154 ON THE GROUND THAT THE ASSESSEE FOR THE SAME CASE HAS ALSO FILED AN APPEAL TO THE LD.CIT(A). THE LD.CIT ALSO FOUND THAT THE APPEAL BE FORE LD.CIT(A) WAS PENDING NOT ONLY AT THE TIME OF FILING THE APPLICAT ION BUT ALSO AT THE TIME OF ORDER UNDER SECTION 264 OF THE ACT. THE PROVISIONS OF SECTION 264(4)(C) OF THE ACT PROHIBITS THE LD. CIT TO PASS THE REVISION ORDE R IF APPEAL IS PENDING. HOWEVER IT WAS ALSO OBSERVED IN TERMS OF CBDT CIRCU LAR THAT AN ORDER CANNOT BE SUBJECT OF AN APPEAL IF APPEAL HAS NOT BEEN DISP OSED ON MERITS. IN THE ITA NO.1421/KOL/2012 A.Y. 2005-06 AGRO SERVICE SYNDICATE V. ITO WD-29(3) KOL. PAGE 6 PRESENT CASE, APPEAL OF ASSESSEE HAS NEVER BEEN DIS POSED ON MERITS RATHER THE APPEAL WAS WITHDRAWN BY THE ASSESSEE VIDE LATER DATED 9 TH DECEMBER 2011. HOWEVER THE LD. CIT(A) PASSED THE ORDER OF TH E APPEAL DISMISSAL ON DATED 03-09-2012, AND BY THAT TIME THE APPLICATION FILED FOR RELIEF TO THE LD. CIT UNDER SECTION 264 OF THE ACT WAS ADJUDICATED AND C ONSEQUENTLY THE IMPUGNED RECTIFICATION ORDER U/S.154 OF THE ACT WAS PASSED. THE FACT HOWEVER REMAINS THAT THE APPEAL OF THE ASSESSEE HAS NOT BEEN DISPOS ED ON MERITS. IN VIEW OF THIS, THERE WAS NO BAR TO THE CIT IN EXERCISING JUR ISDICTION U/S.264 OF THE ACT. THE FACTS CLEARLY SHOW THAT THE EMBARGO IMPOSED IN SEC.264 OF THE ACT THAT THERE SHOULD BE NO APPEAL PENDING BEFORE CIT(A) ON THE ISSUES RAISED IN THE APPLICATION U/S.264 OF THE ACT IS NOT APPLICABLE IN THE PRESENT CASE. WE ARE THEREFORE OF THE VIEW THAT THE ORDER U/S.154 OF THE ACT IS LIABLE TO BE CANCELLED AND THE SAME IS HEREBY CANCELLED. THE APPEAL OF TH E ASSESSEE IS ALLOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STA TISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT 07 /10/2015 SD/- SD/- (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 07 /10/2015 / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT-AGRO SERVICE SYNDICATE, C/O A.K.DUTTA& CO. ROOM NO.207 2, CHURCH LANE, KOL-01 2. / RESPONDENT-ITO WD-29(3) AAYKAR BHAVAN (DAKSHIN), 2 GARIAHAT RD,(S), KOL-68 3. * +,- - . / CONCERNED CIT KOLKATA 4.- - .- / CIT (A) KOLKATA 5.01233+,,- +, , / DR, ITAT, KOLKATA 6.26789 / GUARD FILE. BY ORDER/ -, /TRUE COPY/ / - +, ,