Arun Kanti Samanta, Kolkata V. CIT, Kolkata - XX, Kolkata

ITA 1516/KOL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87682 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 14-07-2014
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Assessee Lawyers: D K BANDYOPADHYAY
• Keywords: Opportunity of being heard; Reasonable cause; Revised return
• Section: 143(3); 139(5); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOLKATA [BEFORE HON BLE SHRI MAHAVIR SINGH, JM & HON BLE SHRI SHAMIM YAHYA AM ] I.T.A NO.1516/KOL/2014 ASSESSMENT YEAR: 2009 - 10 ARUN KANTI SAMANTA VS. C.I.T., KOL XX, KOLKATA KOLKATA (APPELLA NT) ( RESPONDENT) (PAN: AZHPS 9474 Q) FOR THE APPELLANT : SHRI D.K.BANDYOPADHYAY, FOR THE RESPONDENT : SHRI RAVI JAIN, CIT(DR) DATE OF HEARING : 19 .02 .2015. DATE OF PRONOUNCEMENT: 20.02.2015. ORDER PER SHRI SHAMIM YAHYA, AM : THIS APPEAL B Y THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT, KOL - XX, KOLKATA , PASSED U/S 263 OF THE I.T.ACT AND PERTAIN S TO ASSESSMENT YEAR 2009 - 10. 2. AT THE OUTSET WE NOTE THAT THERE IS A DELAY OF 80 DAYS IN FILING THE APPEAL. THE REASONABLE CAUSE FOR TH IS DELAY HAS BEEN ATTRIBUTED TO THE ILLNESS OF THE ASSESSEE. A COPY OF THE MEDICAL CERTIFICATE IN THIS REGARD HAS BEEN ENCLOSED ALONG WITH THE CONDONATION PETITION. UPON HEARING BOTH THE PARTIES AND PERUSING THE RECORDS, IN OUR CONSIDERED OPINION, THE DELA Y IN FILING THE APPEAL IN THIS CASE DESERVES TO BE CONDONED. ACCORDINGLY THE DELAY IS CONDONED. 3 . THE GROUNDS OF APPEAL READ AS UNDER : - 1. FOR THAT THE INITIATION OF PROCEEDINGS BY ISSUING NOTICE U/S 263 DTD. 31 - 07 - 2013 SIGNED BY THE I.T.O., TECHNICA L - XX, KOLKATA IS ERRONEOUS AND BAD IN LAW SINCE THE NOTICE DOES NOT SPEAK ANYTHING WHETHER THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND/OR PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY, ,THE PROCEEDINGS U/S 263 BY THE LD.C.I.T. - XX, KOLK ATA SHOULD BE QUASHED. 2. FOR THAT THE REVISION ORDER U/S 263 PASSED BY THE C.I.T. - XX, KOLKATA DTD. 05 - 02 - 2014 AGAINST THE ASSESSMENT ORDER PASSED BY THE I.T.O., WARD - 1(4), HOOGHLY DTD. 27 - 12 - 2011 CONSIDERING 8% PROFIT ON UNACCOUNTED SALES FROM POTATO SEED S OF RS.15,34,470/ - I.E. ITA NO. 1516/KOL/2014 SHRI ARUN KANTI SAMANTA A.YR. 2009 - 10 2 RS.1,22,750/ - TO THE TOTAL INCOME OF THE ASSESSEE IS ERRORNEOUS AS POINTED OUT BY THE J.C.I.T., RANGE - 1, HOOGHLY AND BY THAT ACTION U/S 263 WAS INITIATED WHICH IS FOUND TO BE VERY MUCH ARBITRARY, UNLAWFUL AND UNJUST. 3. FOR THAT TH E ORDER U/S 263 DIRECTING THE A.O. FOR ADDITIONS TO THE TOTAL INCOME OF THE ASSESSEE AS PER ORIGINAL RETURN DTD. 29 - 07 - 2009 OF RS.1,28,364/ - BY AN AMOUNT OF RS.16,96,517/ - THE VERY BASIS OF ARRIVING SUCH AN AMOUNT IS ARBITRARY, UNLAWFUL AND UNJUST. 4. FOR THAT THE DIRECTION U/S 263 BY THE LD. CIT, KOLKATA - XX, WITHOUT CONSIDERING THE REVISED RETURN FILED BY THE ASSESSEE WITHIN THE TIME ALLOWED U/S 139(5) OF THE I.T.ACT, 1961 BUT DULY CONSIDERED BY THE A.O. AND ASSESSED U/S 143(3) DTD. 27 - 12 - 2011 TAKING INTO ACCOUNT THE PROFIT FROM TRADING OF POTATO SEEDS BUSINESS AND ACCORDINGLY, THE ORDER PASSED BY THE LD. C.I.T., KOLKATA - XX IS ERRONEOUS AND BAD IN LAW. 5. FOR THAT THE APPELLANT CRAVES LEAVE TO ADDUCE ADDITIONAL GROUNDS IF ANY BEFORE OR AT THE TIME OF HEARI NG. 4. IN THIS CASE ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 27.12.2011. SUBSEQUENTLY REVISION NOTICE U/S 263 WAS ISSUED ON 31.07.2013 AND ORDER U/S 263 WAS PASSED ON 05.02.2014. NOW IN THE APPEAL FILED BY THE ASSESSEE THE FIRST GRO UND RAISED BY THE ASSESSEE PERTAINS TO THE NOTICE ISSUED U/S 263 OF THE ACT DATED 31.07.2013. THE LD. COUNSEL OF THE ASSESSEE HAS URGED THAT THE SAID NOTICE WAS ISSUED BY I.T.O., TECHNICAL - XX, KOLKATA. THE LD. COUNSEL SUBMITTED THAT SECTION 263 OF THE ACT GIVES POWER TO THE LD. CIT. HE SUBMITTED THAT THERE IS NO PROVISION IN THE ACT WHEREBY HE CAN DELEGATE THE SAME. HENCE HE SUBMITTED THAT THE LD. CIT ONLY HAS JURISDICTION OF ISSUING OF VALID NOTICE U/S 263 OF THE ACT. NOTICE IN THIS CASE IS ISSUED BY ITO, TECHNICAL - XX, KOLKATA AND NOT BY THE LD. CIT. HENCE THE LD. COUNSEL SUBMITTED THAT THE JURISDICTION ASSUMED BY THE LD. CIT IS INVALID. IN THIS REGARD THE RECORDS OF THE LD. CIT WAS ALSO CALLED FOR. FROM THE RECORDS ALSO THE LD. CIT(DR) COULD NOT POINT OU T AS TO WHETHER THERE WAS ANY APPLICATION OF MIND BY THE LD. CIT ON THE ISSUE OF NOTICE U/S 263 OF THE ACT. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT SECTION 263 (1) OF THE ACT POSTULATES AS UNDER : - 263 (1) THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, O R CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. ITA NO. 1516/KOL/2014 SHRI ARUN KANTI SAMANTA A.YR. 2009 - 10 3 5.1. WE FIND THAT A BARE READING OF THE ABOVE SECTION MAKES IT AMPLY CLEAR THAT SECTION 263 OF THE ACT GIVES POWER TO THE LD. CIT TO EXAMINE THE RECORDS UNDER THE PROVISIONS OF THE ACT AND IF HE FINDS ORDER PASSED THEREIN BY THE AO IS ERRONEOUS OR PREJUDICIAL TO THE INTERESTS OF THE REVENUE, H E MAY AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD PASS AN ORDER. NOW WE FIND THAT SECTION POSTULATES THAT ASSESSMENT ORDER HAS TO BE CONSIDE RED AND EXAMINED BY THE LD. CIT HIMSELF BEFORE HE CONSIDERS IT ERRONEOUS AND GIVES NOTICE TO THE ASSESSEE. NOW IN THIS CASE WE FIND THAT NOTICE U/S 263 OF THE ACT HAS BEEN ISSUED BY ITO, TECHNICAL - XX, KOLKATA. THE RECORDS OF THE REVENUE DO NOT SHOW THAT T HERE WAS ANY EXAMINATION OF RECORDS BY THE LD. CIT HIMSELF BEFORE ISSUING OF NOTICE U/S 263 OF THE ACT. IN ABSENCE OF VALID NOTICE ISSUED U/S 263 OF THE ACT THE JURISDICTION ASSUMED BY THE LD. CIT IS BAD AND HENCE THE ORDER PASSED U/S 263 OF THE ACT IS NOT SUSTAINABLE. ACCORDINGLY IN THE BACKGROUND OF THE AFORESAID DISCUSSION IN OUR CONSIDERED OPINION THE JURISDICTION ASSUMED BY THE LD. CIT U/S 263 OF THE ACT IN ABSENCE OF PROPER NOTICE U/S 263 OF THE ACT IS BAD. HENCE ORDER PASSED U/S 263 OF THE ACT IS LI ABLE TO BE QUASHED. ACCORDINGLY ORDER PASSED BY THE LD. CIT IS QUASHED. 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDE R PRONOUNCED IN THE COURT ON 2 0.02.2015. SD/ - SD/ - [ MAHAVIR SINGH ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 20.02.2015. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . SHRI ARUN KANTI SAMANTA, C/O M/S.D.K.BANDYOPADHYAY & CO., CHARTERED ACCOUNTANTS, 87, LENIN SARANI, 2 ND FLOOR, KOLKATA - 700013. 2 C.I.T., KOLKATA - XX, KOLKATA. 3 . CIT - DR, KOLKATA BENCHE S, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES ITA NO. 1516/KOL/2014 SHRI ARUN KANTI SAMANTA A.YR. 2009 - 10 4