Andhra Organics Ltd., Hyderabad V. Deputy Commissioner of Income Tax, Hyderabad

ITA 1457/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74657 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 01-11-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D SUDHAKAR RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Revision of order; Bonafide belief; Reasonable cause; Condonation of delay
• Section: 43B; 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1457/HYD/2013 ASSESSMENT YEAR: 2008-09 ANDHRA ORGANICS LTD., HYDERABAD. PAN AABC8911E VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 1(1), HYDERABAD. APPELLANT RESPONDENT ASSESSEE BY: SRI S. RAMA RAO REVENUE BY: SRI D. SUDHAKAR RAO DATE OF HEARING: 05/03/2014 DATE OF PRONOUNCEMENT: 05/03/2014 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE CIT-I, HYDERABAD DATED 20/03/2013 PASS ED U/S 263 OF THE IT ACT, FOR THE ASSESSMENT YEAR 2008-09 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING SUBSTANTIAL GROUNDS: 2. THE LEARNED CIT ERRED IN HOLDING THAT THERE IS ANY ERROR IN THE ASSESSMENT MADE BY THE ASSESSING OFFICER U/S 14 3(3) DATED 31/12/2010 WHICH IS TO BE RECTIFIED U/S 263 OF THE IT ACT. 3. THE LEARNED CIT OUGHT TO HAVE SEEN THAT THE ASSE SSING OFFICER, WHILE COMPLETING THE ASSESSMENT PROCEEDING S ALREADY CONSIDERED ALL THE ISSUES RAISED BY THE LEARNED CIT AND COMPLETED THE ASSESSMENT. 4. THE LEARNED CIT ERRED IN HOLDING THAT THE PROVIS IONS OF SECTION 40(A)(IA) AND SECTION 43B WERE NOT EXAMINED BY THE ASSESSING OFFICER. 5. THE LEARNED CIT ERRED IN SETTING ASIDE THE ASSES SMENT AND IN DIRECTING THE ASSESSING OFFICER TO RE-DO THE ASSESS MENT 2 ITA NO. 1457/H/2013 ANDHRA ORGANICS LTD. PARTICULARLY WHEN NO SPECIFIC ERROR IS POINTED OUT IN THE ASSESSMENT MADE U/S 143(3) OF THE IT ACT. 2. THERE IS A DELAY OF 163 DAYS IN FILING THIS APPE AL BY THE ASSESSEE. IN THIS CONNECTION, THE ASSESSEE FILED PE TITION FOR REQUESTING FOR CONDONATION OF DELAY WHEREIN IT WAS, INTER-ALIA, STATED THAT THE PETITIONER WAS UNDER THE BONAFIDE BELIEF T HAT NO APPEAL NEED BE FILED AGAINST THE ORDER U/S 263 AND THE APPEAL L IES AGAINST THE REASSESSMENT MADE BY THE ASSESSING OFFICER IN CONSE QUENCE TO THE ORDER U/S 263 OF THE IT ACT. IT WAS FURTHER STATED WHEN A NOTICE U/S 143(2) WAS RECEIVED BY THE PETITIONER AGAIN ON 29/1 0/2013 IT APPROACHED AN ADVOCATE AND IT WAS ADVISED THAT AN A PPEAL LIES AGAINST THE ORDER U/S 263 OF THE IT ACT AND, ACCORD INGLY, APPEAL GOT PREPARED AGAINST THE ORDER U/S 263 AND THE SAME IS BEING FILED ON 01/11/2013 WITH A DELAY OF 163 DAYS. 3. BEFORE US, THE LEARNED AR SUBMITTED THAT THE DEL AY IS ON ACCOUNT OF THE FACT THAT THE ASSESSEE WAS UNDER BON A FIDE BELIEF THAT THE CIT HAS ONLY SET ASIDE THE ORDER OF THE ASSESSM ENT ON THE ISSUE AND DIRECTED THE ASSESSING OFFICER TO PASS FRESH OR DER ON THE SAME AND THE ASSESSEE WAS UNDER THE IMPRESSION THAT IT H AS A CHANCE TO MAKE OUT ITS CASE BEFORE THE ASSESSING OFFICER. FU RTHER, THE AR SUBMITTED THAT THE DELAY IS NOT WILFUL BUT IS ON AC COUNT OF THE FACT THAT THE ASSESSEE WAS IGNORANT ABOUT THE OPERATION OF TH E ORDER OF THE CIT. THE ASSESSEE HAS REALIZED THE LEGAL POSITION O NLY IN THE PROCEEDINGS BEFORE THE ASSESSING OFFICER AND IMMEDI ATELY TOOK STEPS TO FILE THE APPEAL. 4. WE HAVE HEARD BOTH THE PARTIES WITH REFERENCE TO CONDONATION OF DELAY IN FILING THE PRESENT APPEAL. ADMITTEDLY T HE REASONS ADVANCED BY THE ASSESSEE IN ITS PETITION IS CORRECT. THE DIR ECTIONS OF THE CIT IN HIS ORDER ARE CONTRADICTORY IN NATURE. BEING SO, TH E ASSESSEE FORMED THE OPINION THAT THE ASSESSING OFFICER WOULD GIVE A N OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE. ACCORDINGLY, IN O UR OPINION, THE 3 ITA NO. 1457/H/2013 ANDHRA ORGANICS LTD. ASSESSEE IS HAVING REASONABLE CAUSE FOR FILING THE APPEAL BELATEDLY. HENCE, THE DELAY IS CONDONED AND THE APPEAL IS ADMI TTED FOR ADJUDICATION. 5. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THAT THE CIT DOES NOT HAVE ANY JURISDICTION TO INVOKE THE PROVIS IONS OF SECTION 263 OF THE ACT IN DIRECTING THE ASSESSING OFFICER TO R E-DO ASSESSMENT, AS THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER U /S 143(3) OF THE ACT AND, THEREFORE, THE ORDER OF THE ASSESSING OFFI CER IS NOT PREJUDICIAL TO THE INTERESTS OF THE REVENUE. WE DO NOT FIND ANY MERIT IN THIS GROUND. THE ASSESSEE ITSELF CONCEDED BEFORE TH E CIT THAT AN AMOUNT OF RS. 30,542/- TO BE DISALLOWED U/S 43B. TH IS SHOWS THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 6. COMING INTO THE MERITS OF THE CASE, REGARDING DI SALLOWANCE U/S 43B, THE ASSESSEE COMPANY EXPLAINED THAT THE TAX AU DIT REPORT WAS SIGNED ON 22/09/2012 AND THE RETURN WAS FILED ON 27 /09/2008. THERE WERE PAYMENTS SUBSEQUENT TO TAX AUDIT REPORT AND ON LY AN AMOUNT OF RS. 30,542/- WAS REMAINED UNPAID ON THE DATE OF FIL ING OF THE RETURN AND CONCEDED THAT UNPAID AMOUNT OF RS. 30,542/- REQ UIRES DISALLOWANCE U/S 43B OF THE IT ACT. HE THEREFORE, SUBMITTED THAT WHATEVER PAID BEFORE THE DUE DATE OF FILING RETURN IN RESPECT OF ELS IS TO BE ALLOWED. SINCE THE ASSESSEE ADMITTED BEFORE THE CIT THAT THE AMOUNT OF RS. 30,542/- IS UNPAID, THE SAME IS TO BE DISALLOWED AND WHATEVER PAID BEFORE THE DUE DATE OF FILING OF RETU RN, THE SAME IS TO BE ALLOWED. 7. AS REGARDS THE APPLICABILITY OF SECTION 40(A)(IA ) OF THE ACT, WE ARE OF THE VIEW THAT THE CIT HAS NOT MADE OUT A CAS E IN THE IMPUGNED ORDER AS TO HOW THE ASSESSING OFFICER HAS NOT EXAMI NED THE ISSUE RELATING TO 40(A)(IA) OF THE ACT. THE ORDER OF THE CIT IS CRYPTIC MANNER 4 ITA NO. 1457/H/2013 ANDHRA ORGANICS LTD. AND AS SUCH WE ARE NOT IN A POSITION TO UPHOLD THE ISSUE RELATING TO SECTION 40(A)(IA). 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 05/03/2014. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 05/03/2014 KV COPY FORWARDED TO: 1. ANDHRA ORGANICS LTD., C/O SRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, H.NO. 3-6-643, ST. NO. 9, HIMAYAT NAGAR, HYDERABAD 500 029. 2. DCIT, CIRCLE 1(1), HYDERABAD 3. CIT-I, HYDERABAD 4. ADDL. CIT-I, HYDERABAD. 5. THE DR, ITAT, HYDERABAD