Dr Anoj Kumar Baliarsingh, Cuttack V. ACIT, Cuttack

ITA 152/CTK/2012

• Counselvise Citation: 15222114 RSA 2012
• Duration Of Justice: 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 22-02-2012
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: P K JESTHIM JESTHI ARS
• Keywords: Period of limitation; Initiation of penalty proceedings; Assessment record; Time period of passing order
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM, AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 152/CTK/2004 (ASSESSMENT YEAR 21007 - 08) DR. ANOJ KUMAR BALI ARSINHA, MALISAHI, DALMILL LANE, BAJRAKABATI ROAD, CUTTACK 753 0 01 PAN: ACCPB 5414 F VERSUS ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), CUTTACK. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI P.K.JESTHI/M.JESTHI, ARS FOR THE RESPONDENT SHRI S.C.MOHANTY, DR DATE OF HEARING : 13.03.2012 DATE OF PRONOUNCEMENT : 02.04.2012 ORDER SHRI K.S.S.PRASAD RAO, JM : THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) DT.23.1.2012 FOR THE ASSESSMENT YEAR 207 - 08 IN THE CASE OF THE ASSESSEE. 2. T HE ASSESSEE HAS RAISED THE FOLLOWING ISSUES IN ITS GROUNDS OF APPEAL. 1) THAT, UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ASSESSMENT MADE UNDER SECTION 143(3) BY THE ASSISTANT COMMISSIONER OF INCOME TAX, (IRCLE - 2(2), CUTTACK BEING BARRED B Y LIMITATION, THE LD.CIT (APPEALS) SHOULD HAVE PRIMAFACIELY QUASHED THE ORDER. 2) THAT, THE SAME CIT (APPEALS) UNDER SIMILAR CIRCUMSTANCES IN OTHER CASES HAS HELD THAT SUCH AN ASSESSMENT ORDER IS NON EST AND INEFFECTIVE UNDER LAW AND HENCE THIS ASSESSM ENT ORDER AND DEMAND NOTICE BEING SERVED AFTER 110 DAYS OF THE DATE OF ORDER SHOULD ALSO HAVE BEEN QUASHED. 3) THAT, THE ASSESSMENT ORDER TO BE EFFECTIVE SHOULD NOT ONLY BE PASSED BUT ALSO MUST BE COMMUNICATED BEFORE THE EXPIRY OF THE LI MITATION. HENCE T HIS ORDER BEING COMMUNICATED AFTER 110 DAYS OF THE LIMITATION SHOULD BE QUASHED IN LIMINE. 4) THAT, UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE TA. CIT (APPEALS) SHOULD HAVE TOTALLY DELETED THE ADDITI ONS MADE UNDER THE HEADS DOCTOR S REMUNE RATION & SALARY AND ALSO BOOKS AND JOURNALS. ITA NO.152/CTK/2004 2 5) THAT IN VIEW OF THE EVIDENCES PRODUCED BEFORE THE AUTHORITIES BELOW, THE ID. CIT (APPEALS) SHOULD HAVE ALLOWED THE DEDUCTION OF 50% OF THE INTEREST AMOUNTING TO 87,692 PAID TO HDFC BANK. 3. AT THE TIME OF HEARING, THE LEARNED AR OF THE ASSESSEE DID NOT PRESS THE ISSUE IN GROUND NO.5 AND HENCE, THE SAID GROUND IS DISMISSED AS NOT PRESSED. 4. BOTH THE PARTIES WERE HEARD ON THE ISSUES IN GROUNDS NO.1 TO 4 AND THEIR LEGAL IMPLICATIONS. 5. DURING THE COURSE OF HEARING, THE LEARNED AR OF THE ASSESSEE HAS VEHEMENTLY ARGUED THAT THE ISSUES IN GROUND NOS.1 TO 3 AND ALTERNATIVELY THE ISSUE IN GROUND NO.4. 6, ON CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBU NAL IN THE LIGHT OF THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND THE JUDICIAL PRONOUNCEMENTS RELIED ON BY THEM, THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE THAT THE ASSESSEE IS A DOCTOR WORKING IN SCB MEDICAL COLLEGE AND HOSPITAL AND IS ALSO RUNNING A CLINIC IN MALI SAHI, BAJRAKABATI ROAD, CUTTACK. THE ASSESSEE HAS FILED THE RETURN SHOWING TOTAL INCOME OF 7,61,480 FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THERE WAS A SURVEY CONDUCTED U/S.133A OF THE I.T.ACT,1961 IN THE CLINIC PREMISES OF THE ASSESS EE AT MALISAHI, BAJRAKABATI ROAD, CUTTACK. HENCE, THE CASE WAS TAKEN UP FOR SCRUTINY ASSESSMENT AFTER ISSUING NECESSARY STATUTORY NOTICES. IN RESPONSE TO THE STATUTORY NOTICES, SHRI P.K.JESTY, ADVOCATE APPEARED ON BEHALF OF THE ASSESSEE BEFORE THE ASSESSIN G OFFICER AND DISCUSSED THE CASE WITH THE ASSESSING OFFICER. AFTER HEARING THE ASSESSEES REPRESENTATIVE AND CONSIDERING THE MATERIAL PLACED BEFORE HIM , THE ASSESSING OFFICER HAS COME TO THE CONCLUSION THAT THE ASSESSEES CLAIM FOR DOCTORS REMUNERATION AND SALARY OF 1,20,000 AND 54,000 RESPECTIVELY WAS NOT CORRECT AND THOSE APPEARED TO BE BOGUS. ITA NO.152/CTK/2004 3 HENCE, HE ADDED 1,50,000 UNDER THAT HEAD. THEREAFTER HE CONSIDERED THE EXPENDITURE ON ACCOUNT OF BOOK OF 1,21,050 AND CAME TO THE CONCLUSION THAT THEY WERE ALSO BOGUS EXPENDITURE. THEREAFTER THE ASSESSING OFFICER CONSIDERED THE INCOME OF THE ASSESSEE FROM PROFESSION AND AFTER CONSIDERING THE SURVEYED MATERIAL PLACED BEFORE HIM BY THE SURVEY PARTY, THE ASSESSING OFFICER ESTIMATED THE ANNUAL GROSS RECEIPTS OF THE A SSESSEE AT 2,70,700 AND ADDED THE SAME TO THE INCOME TAXABLE IN THE HANDS OF THE ASSESSEE. THUS, HE PASSED THE ASSESSMENT ORDER DT.341.4.2009 U/S.143(3) OF THE I.T.ACT,19961. AT THE SAME TIME, HE PROPOSED INITIATION OF PENALTY PROCEEDINGS U/S.271(1)(C) AS WELL AS U/ S.271A OF THE I.T.ACT,1961 AGAINST THE ASSESSEE. 7. AGGRIEVED BY THIS ORDER, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A) BY PLEADING THE VERY SAME ISSUES AS WAS PLEADED BEFORE THE TRIBUNAL BEFORE US. THE LEARNED CIT(A), AFTER HEARING THE ASSESSEE AND C ONSIDERING THE MATERIAL MADE AVAILABLE BEFORE HIM AND TAKING INTO CONSIDERATION THE VIEWS OF THE ASSESSING OFFICER , HAS PASSED THE IMPUGNED ORDER BY ALLOWING THE APPEAL IN PART AND REJECTING THE CONTENTION OF THE ASSESSEE REGARDING THE VALIDITY OF THE ASS ESSMENT ORDER ON THE GROUND OF LIMITATION HOLDING THAT THE ASSESSEE IS NOT ABLE TO PRODUCE EVIDENCE REGARDING THIS CONTENTION. WHILE CONSIDERING THE ADDITIONS IN Q3UANTUM, HE GAVE RELIEF TO THE ASSESSEE IN PART. AGAINST THIS ORDER OF THE LEARNED CIT(A), TH E ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL REITERATING THE CONTENTIONS REGARDING THE TIME BARRING OF THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER AS WELL AS THE QUANTUM ADDITIONS SUSTAINED BY THE LEARNED CIT(A). 8. IN THE COURSE OF HEARIN G, THE LEARNED AR OF THE ASSESSEE HAS VEHEMENTLY ARGUED REGARDING THE ISSUE OF THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER HAVING BEEN PASSED AFTER THE TIME LIMIT PROVIDED IN THE ACT AND HENCE , IT IS BARRED BY LIMITATION AND BECOMES NON - EST. APART FROM ITA NO.152/CTK/2004 4 THAT HE MADE AVAILABLE THE ORDERS PASSED BY THIS TRIBUNAL IN THE CASE OF ASST.COMMISSIONER OF INCOME - TAX V. M/S.ORISSA STEVEDORES LTD IN ITA NOS.409,410, 411/CTK/2011 AND C.O.NOS.30,31 AND 32/CTK/2011 DT.22.12.2011, WHEREIN THIS BENCH OF THE TRIBUNAL HAS CONSIDERED THE ISSUE OF PASSING THE ASSESSMENT ORDER BEYOND TIME LIMIT PROVIDED IN THE STATUTE AS NON EST. HE HAS ALSO MADE AVAILABLE COPIES OF THE NOTICES DT.30.12.2009 AND SERVED ON THE ASSESSEE ON 20.4.2010 FOR LEVY OF PENALTY U/S.271(1)(C) AND U/ S.271A OF THE I.T.ACT,1961. THE LEARNED AR OF THE ASSESSEE CLAIMED THAT THESE TWO NOTICES ALONG WITH THE ASSESSMENT ORDER WERE SERVED BY THE ASSESSING OFFICER ON 20.4.2010. ACCORDING TO HIM, THE ASSESSMENT FOR THE ASSESSMENT YEAR 2007 - 08 HAS TO BE COMPLETE D BY 31 ST DECEMBER, 2009 BUT IN VIEW OF THE ASSESSMENT ORDER THOUGH DT.30.12.2009 HAS BEEN SERVED ON THE ASSESSEE ON 20.4.2010 DELAYED BY 110 DAYS , IS BARRED BY TIME AND HENCE, SUCH AN ASSESSMENT ORDER IS NON EST AND NON - ENFORCEABLE UNDER THE LAW. THE CIT (A) HAS NOT ACCEPTED THE CONTENTION OF THE ASSESSEE FOR THE REASON THAT THE ASSESSEE HAS NOT PRODUCED EVIDENCE IN THAT REGARD. BEFORE THE TRIBUNAL ALSO HE HAS NOT PLACED ANY EVIDENCE EXCEPT THE PENALTY NOTICES STATED SUPRA. THE LEARNED CIT(A) HAS NOT ACCEP TED THE ISSUE RAISED BY THE ASSESSEE FOR NON - PRODUCTION OF EVIDENCE RELATING TO THE SAME BUT NOWHERE IN THE IMPUGNED ORDER THE LEARNED CIT(A) HAS MENTIONED NOTHING ABOUT THE MATERIAL THAT IS AVAILABLE IN THE ASSESSMENT RECORDS CONTROVERTING THE CLAIM OF TH E ASSESSEE THAT THE ASSESSMENT ORDER WAS SERVED ON THE ASSESSEE ON 20.4.2010 ALONG WITH THE NOTICES FOR INITIATING PENALTIES U/S.271(1)(C) AND SECTION 271A OF THE I.T.ACT,1961. AS CAN BE SEEN FROM THE IMPUGNED ORDER, THE LEARNED CIT(A) HAS NOT FIND THE APP EAL FILED BY THE ASSESSEE BEFORE HIM AS BARRED BY TIME. AS PER THE PROVISIONS OF THE ACT, THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS APPEALABLE BEFORE THE CIT(A) WITHIN A PERIOD OF 30 DAYS FROM THE ITA NO.152/CTK/2004 5 DATE OF SERVICE OF THE ASSESSMENT ORDER ON TH E ASSESSEE. SINCE, AS CAN BE SEEN FROM THE IMPUGNED ORDER, THE APPEAL IS NOT FOUND TO HAVE BEEN BARRED BY LIMITATION HAVING BEEN FILED AFTER THE EXPIRY OF 30 DAYS FROM THE DATE OF RECEIPT OF THE ASSESSMENT ORDER. IT IS UNDISPUTED THAT THE APPEAL FILED BY T HE ASSESSEE BEFORE THE CIT(A) IS NOT BARRED BY TIME. IN THE ABSENCE OF ANY MATERIAL CULLED OUT BY THE CIT(A) CONTROVERTING THE CLAIM OF THE ASSESSEE THAT THE ASSESSMENT ORDER WAS SERVED ON 20.4.2010, THE CLAIM OF THE ASSESSEE HAS REMAINED UN - REBUTTED MORE SO DURING THE COURSE OF HEARING OF THE APPEAL ALSO THE LEARNED DR IS NOT ABLE TO BROUGHT ANY MATERIAL CONTROVERTING THE CLAIM OF THE ASSESSEE OF SER VICE OF THE ASSESSMENT ORDER ON 20.4.2010. UNDER THE PROVISIONS OF THE EVIDENCE ACT IN SECTION 114 , ILLUSTRA TION (G) THAT EVIDENCE WHICH COULD BE AND IS NOT PRODUCED WOULD, IF PRODUCED, BE UNFAOURABLE TO THE PERSON WITHHOLDS IT. HERE IS THE DEPARTMENT NECESSARILY HAVE AN ACKNOWLEDGEMENT FROM THE ASSESSEE OR ITS AUTHORIZED PERSON IN TOKE OF RECEIPT OF THE ASSESSM ENT ORDER. THE ASSESSING OFFICER HAS TO MAINTAIN THE DOCUMENT IN THE ASSESSMENT RECORD. INSPITE OF CATEGORICAL ASSERTION OF THE ASSESSEE THAT THE ASSESSMENT ORDER IS BARRED BY LIMITATION HAVING BEEN PASSED AFTER 31.12.2009 HAS BECOME UNREBUTTED BY THE DEPA RTMENT BY PLACING COGENT EVIDENCE I.E., ACKNOWLEDGEMENT FOR SERVICE OF THE ASSESSMENT ORDER ON THE ASSESSEE. THIS FACT COUPLED WITH THE FACTS OF NON - MENTIONING IN THE IMPUGNED ORDER OF NOTHING ABOUT THE BELATED FILING OF THE FIRST APPEAL BEFORE THE LEARNED CIT(A). THE DEPARTMENT HAS ALSO NOT PLACED THE FORM NO.35 THAT WAS FILED BY THE ASSESSEE BEFORE THE LEARNED CIT(A) WHILE FILING THE APPEALS, WHEREIN THERE IS A REQUIREMENT OF CLEARLY MENTIONING OF THE DATE OF SERVICE OF ASSESSMENT ORDER APPEALED BEFORE TH E CIT(A). THIS ENSURES COGENT EVIDENCE TO BELIE THE ASSERTION OF THE ASSESSEE THAT THE ASSESSMENT ORDER WAS PASSED BEYOND THE LIMITATION PERIOD PROVIDED IN THE ACT. THEREFORE, THE ITA NO.152/CTK/2004 6 NON - PRODUCTION OF THESE TWO DOCUMENTS BY THE DEPARTMENT AND THE EXISTENCE OF WHICH IS NOT DENIED BY THE LEARNED DR DURING THE COURSE OF HEARING BEFORE THE TRIBUNAL ITSELF GOES TO PROVE THAT THE CONTENTION OF THE ASSESSEE IS CORRECT. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT THE ASSESSMENT ORDER WAS SERVED ON HIM ON 20.4.2010 IS TO BE ACCEPTED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. IF THAT IS THE CASE, THE ORDER PASSED BY THIS BENCH OF THE TRIBUNAL IN THE CASE OF ASST.COMMISSIONER OF INCOME - TAX V. M/S.ORISSA STEVEDORES LTD (SUPRA) SQUARELY APPLIES AND HENCE, WE FIND THAT T HE ORDER PASSED BY THE ASSESSING OFFICER THOUGH DT.31.12.2009 WAS SERVED ON THE ASSESSEE ONLY ON 20.4.2010 I.E., AFTER A TIME BARRED OF 110 DAYS WHEREAS THE PROVISIONS IN THE I.T.ACT CATEGORICALLY PROVIDES THAT THE ORDER SHOULD BE PASSED AND COMMUNICATED TO THE ASSESSEE FIRST BY 31.12.2009 AS INTERPRETED BY THE HONBLE SUPREME COURT AND KERALA HIGH COURT AND THIS BENCH OF THE TRIBUNAL IN THE CASE OF ASST.COMMISSIONER OF INCOME - TAX V. M/S.ORISSA STEVEDORES LTD (SUPRA) MEANS THAT THE PASSING OF THE ASSESSMEN T ORDER INCLUDES THE SERVICE OF ORDER. HENCE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IN THE CASE OF THE ASSESSEE FOR THE PERIOD UNDER CONSIDERATION IS NON EST HAVI NG BEEN SERVED ON THE ASSESSEE ON 20.4.2010 IN THE LIGHT OF JUDICIAL PRONOUNCEMENTS STATED SUPRA AND RELIED ON BY THE LEARNED AR OF THE ASSESSEE. ACCORDINGLY, THE ASSESSMENT ORDER IS NON EST AND UNENFORCEABLE. IN THE CONSEQUENCE THE APPEAL ORDER PASSED BY THE LEARNED CIT(A) BY UPHOLDING SUCH AN ASSESSMENT ORDER WILL NOT STAND FOR LEGAL SCRUTINY. 9. SINCE THE ASSESSMENT ORDER IS HEREBY HELD AS NON EST HAVING BEEN PASSED BEYOND THE PERIOD OF TIME LIMIT PROVIDED IN THE ACT, THE QUANTUM ADDITIONS MADE IN SUCH AN ASSESSMENT ORDER HAVE ALSO NO EFFECT AND THE ITA NO.152/CTK/2004 7 LEARNED CIT(A)S ORDER IN UPHOLDING A PART OF SUCH ADDITIONS ALSO BECOMES INEFFECTIVE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART. S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER (K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 02.04.2012 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: DR. ANOJ KUMAR BALI ARSINHA, MALISAHI, DALMILL LANE, BAJR AKABATI ROAD, CUTTACK 753 001 2. THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), CUTTACK. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.