Dy.CIT Cir.3, Nanded, Nanded V. M/s. Lature Brothers & Co., Latur

ITA 149/PUN/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 7413 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 03-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANT LEUVA
• Keywords: Rectification of order; Block assessment
• Section: 143(3); 132; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER SR.NO. ITA NO. BLOCK PERIOD APPELLANT RESPONDENT 1. 147/PN/2011 1989-90 TO 1998-99 DY. CIT CIR. 3, NANDED GURUSHANTAPPA NAGAPPA LATURE SHARDA NIWAS, SIGNAL CAMP, LATUR PAN AAIPL 4744 N 2. 148/PN/2011 -DO- -DO- SHIVSHANKAR GURSHANTAPPA LATURE SAME AS ABOVE PAN AAIPL 4745 P 3. 149/PN/2011 -DO- -DO- LATURE BROTHERS & CO. SAME AS ABOVE PAN AACFL 4754 A APPELLANT BY: SHRI HEMANT LEUVA RESPONDENTS BY: NONE ORDER PER BENCH THESE THREE APPEALS BY THE REVENUE ARE DIRECTED AGAINST THREE DIFFERENT ORDERS OF CIT(A) AURANGABAD IDENTICALLY DATED 25-11-2010 PERTAINING TO BLOCK ASSESSMENT PERIOD 1989-90 TO 1998-99. SINCE COMMON GROUND IS RAISED IN ALL THESE THREE APPEALS PERTAIN ING TO THE SAME GROUP, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAK E OF CONVENIENCE. PAGE 2 OF 5 ITA NO. 147 TO 149/PN/2011 LATURE GROUP BLOCK PERIOD: 1989-90 TO 1998-99 2. WE SHALL FIRST TAKE UP APPEAL IN ITA NO. 149/PN/ 2011 IN THE CASE OF LATURE BROTHERS & CO., LATUR. THE SO LITARY ISSUE INVOLVED IN THIS APPEAL RELATES TO SURCHARGE LEVIED BY THE ASSESSING OFFICER IN AN ORDER DATED 23-7-2008 P ASSED U/S 154 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER RE FERRED TO AS THE ACT FOR SHORT) PERTAINING TO THE BLOCK PERIOD 1989-90 TO 1998-99. THE CIT(A) HAS DELETED THE SUR CHARGE AND THE SAID ACTION HAS BEEN CONTESTED BY THE REVEN UE BEFORE US. IN BRIEF, THE FACTS ARE THAT THE ASSESS EE IS A PART OF LATURE GROUP OF CASES IN WHICH A SEARCH ACTION U /S 132 OF THE ACT WAS CONDUCTED ON 9-3-1999. THE INCOME F OR THE BLOCK PERIOD WAS ASSESSED U/S 158BC READ WITH SECTI ON 143(3) OF THE ACT VIDE ORDER DATED 30-11-2007AT RS . 47,50,254/-. SUBSEQUENTLY, THE ASSESSING OFFICER P ASSED AN ORDER U/S 154 OF THE ACT DATED 23-7-2008 WHEREBY , INTER ALIA, HE LEVIED SURCHARGE OF RS 4,84,526/- AT THE R ATE OF 17% ON THE INCOME TAX LIABILITY. SUCH SURCHARGE WA S NOT LEVIED IN THE BLOCK ASSESSMENT ORDER FRAMED BY THE ASSESSING OFFICER BUT IN THE ORDER PASSED U/S 154 O F THE ACT AND HE NOTED THAT THE SURCHARGE WAS LEVIED IN T ERMS OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE O F CIT VS. SURESH N. GUPTA (297 ITR 322). PAGE 3 OF 5 ITA NO. 147 TO 149/PN/2011 LATURE GROUP BLOCK PERIOD: 1989-90 TO 1998-99 3. IN AN APPEAL, THE ASSESSEE CONTESTED THE LEVY ON FACTS AND LAW. THE CIT(A) HAS DELETED THE SURCHARGE ON T WO GROUNDS. FIRSTLY, AS PER THE CIT(A) NO SURCHARGE WA S LEVIABLE BECAUSE THE RELEVANT FINANCE ACT 1999 IN T HIS CASE DID NOT PRESCRIBE ANY SURCHARGE FOR ASSESSEE-FIRM O R AN INDIVIDUAL. SECONDLY, THE CIT(A) HELD THAT THE LEV IABILITY OF SURCHARGE OR OTHERWISE IS A DEBATABLE ISSUE AND THE SAME CANNOT BE LEVIED BY PASSING A RECTIFICATION ORDER U /S 154 OF THE ACT. ON BOTH THESE ASPECTS, LEVY OF SURCHARGE HAS BEEN DELETED. 4. BEFORE US, THE LEARNED DR APPEARING FOR THE REVE NUE HAS SUPPORTED THE ORDER OF THE ASSESSING OFFICER BY POINTING OUT THAT THE LEVY HAS BEEN MADE IN TERMS O F JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF SU RESH N. GUPTA (SUPRA) AND, THEREFORE, THE CIT(A) ERRED I N DELETING FOLLOWING THE SAME. 5. WE HAVE CONSIDERED THE SUBMISSIONS ADVANCED BY T HE LEARNED DR AND ALSO PERUSED THE ORDERS OF THE AUTHO RITIES BELOW. IN THIS CASE, SURCHARGE HAS BEEN LEVIED IN AN ORDER PASSED U/S 154 OF THE ACT. NO DOUBT, LEVIABILITY O F SURCHARGE IS A DEBATABLE ISSUE. HOWEVER, IN VIEW OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF SU RESH PAGE 4 OF 5 ITA NO. 147 TO 149/PN/2011 LATURE GROUP BLOCK PERIOD: 1989-90 TO 1998-99 N. GUPTA (SUPRA) DATED 7-1-2008, IT IS EVIDENT THAT ON THE DATE WHEN THE ASSESSING OFFICER PASSED THE ORDER U/ S 154 OF THE ACT THERE WAS NO SUCH DEBATE. THEREFORE, TH E ASSESSING OFFICER WAS WITHIN HIS JURISDICTION TO IN VOKE THE POWER OF LEVYING SURCHARGE IN PROCEEDING U/S 154 OF THE ACT. IN SO FAR AS THE MERITS OF LEVY IS CONCERNED, WE FIND THAT ON FACTS OF THE INSTANT CASE, SURCHARGE IS NOT LEVIABLE. AS PER THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF SURESH N. GUPTA (SUPRA), THE PROVISO TO SECTION 113 INSERTED BY THE FINANCE ACT 2002 WAS CLARIFICATORY IN NATURE AND THE SAID PROVISO WOULD BE APPLICABLE TO SEARCHES CONDUCTED PRIOR TO 1-6-2002 ALSO. SO, HOWE VER, IN THE SAID JUDGMENT IT HAS ALSO BEEN EXPLAINED THAT T HE PROVISO SO INSERTED IN SECTION 113 INDICATES THE LE VY OF SURCHARGE AS MANDATED BY THE RELEVANT FINANCE ACT. IN THE CASE BEFORE THE HONBLE SUPREME COURT, THE RELEVANT FINANCE ACT WAS OF 2001 WHICH PROVIDED FOR LEVY OF SURCHARGE AND, THEREFORE, LEVY WAS UPHELD. IN THE PRESENT CASE, THE CIT(A) HAS CORRECTLY NOTED THAT RELEVANT FINANCE ACT IS THE FINANCE ACT, 1999 AND IT IS FURTHER NOTE D THAT THE SAID FINANCE ACT DID NOT PROVIDE FOR LEVY OF SU RCHARGE IN THE CASE OF A PARTNERSHIP FIRM. THEREFORE, THE QUESTION OF LEVY OF SURCHARGE IN THE CASE OF THE ASSESSEE DI D NOT ARISE. SUCH FACTUAL APPRECIATION DONE BY THE CIT(A ) HAS PAGE 5 OF 5 ITA NO. 147 TO 149/PN/2011 LATURE GROUP BLOCK PERIOD: 1989-90 TO 1998-99 NOT BEEN ASSAILED BY THE REVENUE AND THEREFORE, ON THIS ASPECT, WE AFFIRM THE ORDER OF THE CIT(A) DELETING THE LEVY OF SURCHARGE. 6. NOW COMING TO THE APPEALS OF THE REVENUE IN ITA NO. 147 AND 148/PN/2011, WE FIND THAT THE FACTS ARE SIM ILAR TO THOSE IN ITA NO. 149/PN/2011. FOR THE DETAILED DIS CUSSION MADE IN THE PRECEDING PARAGRAPHS WHILE DEALING WITH APPEAL IN ITA NO. 149/PN/2011, WE AFFIRM THE ORDERS OF THE CIT(A) IN THESE CASES AS WELL. 7. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH 2011. SD/- SD/- (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE DATED THE 31 ST MARCH 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A)- AURANGABAD 4. CIT- AURANGABAD 5. THE D.R, A BENCH, PUNE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE