Sri. R. Lokesh, Bangalore V. CIT, Bangalore

ITA 1520/BANG/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9237 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 27-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G R REDDY I
• Keywords: Opportunity of being heard
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SMT ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.1520/BANG/2014 (ASSESSMENT YEAR: 2009-10) ASSESSEE BY : SHRI. RAGHAVENDRA CHAKRAVARTHY, CA REVENUE BY : SHRI. G. R. REDDY, CIT-DR-I DATE OF HEARING : 21.09.2016 DATE OF PRONOUNCEMENT : 16.12. 2016 ORDER PER INTURI RAMA RAO, AM : THIS APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE CIT(A)-III, BANGALORE DATED 18.02.2014 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961, HERE INAFTER CALLED THE ACT. THE GROUNDS OF APPEAL FILED BY THE APPELLANT ARE AS UNDER: MR. R. LOKESH NO. 107, II MAIN ROAD, CHIKKADUGODI, TAVREKERE POST, BANGALORE-560029. PAN : AAZPL 5461 F VS. COMMISSIONER OF INCOME TAX, BANGALORE III, C. R. BUILDINGS, QUEENS ROAD, BANGALORE 560001. APPELLANT RESPONDENT ITA NO.1520/BANG/2014 PAGE 2 OF 8 ITA NO.1520/BANG/2014 PAGE 3 OF 8 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF EXECUTION OF CIVIL CONTRACTS. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 FILED ON 25.09.2009, DECLARING TOTAL INCOME OF RS.1,86,57,660/-. AFTER ISSUING THE REQUISITE NOTI CE UNDER SECTION 143(2), THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 30.12.20 11 AT TOTAL INCOME OF RS.1,96,57,660/-. 3. SUBSEQUENTLY, THE CIT(A)-III, BANGALORE HAD ISSU ED A SHOW CAUSE NOTICE UNDER SECTION 263 OF THE INCOME T AX ACT PROPOSING TO REVISE THE ASSESSMENT, AS A SUM OF ITA NO.1520/BANG/2014 PAGE 4 OF 8 RS.74,19,860/- ON WHICH TAX WAS DEDUCTED AT SOURCE BY CITY MUNICIPAL CORPORATION WAS NOT OFFERED TO TAX A ND THEREFORE IT WAS PROPOSED VIDE SHOW CAUSE NOTICE TO BRING THE SAME TO TAX. IN RESPONSE TO THE SHOW CAUSE NOT ICE, THE APPELLANT HAD SUBMITTED THAT THE SAID SUM OF RS.74,19,860/- REPRESENTS EARNEST MONEY DEPOSIT WHI CH WAS RETAINED BY THE CONTRACTEE TILL THE COMPLETION OF THE PROJECT ON WHICH TDS WAS MADE. IT WAS FURTHER SUBM ITTED THAT THE CONTRACTEE I.E., BBMP HAS ERRONEOUSLY DEDU CTED TDS AND IT WAS FURTHER SUBMITTED THAT AS AGAINST TH E TOTAL CLAIM FOR TDS CREDIT OF RS.60,29,160/-, THE AO GRAN TED CREDIT ONLY TO THE EXTENT OF RS.52,05,831/- ON THE BASIS OF INFORMATION AVAILABLE ON FORM 26AS, AND THUS IT WAS SUBMITTED THAT THE ORDER OF ASSESSMENT WHICH WAS SO UGHT TO BE REVISED IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. THUS IT WAS SUBMITTED THAT CIT HAD NO JURISDICTION TO REVISE THE IMPUGNED ASSESSMENT ORDE R. 4. THE LEARNED CIT(A), AFTER CONSIDERING THE ABOVE SUBMISSION OF THE APPELLANT HELD AS FOLLOWS: ITA NO.1520/BANG/2014 PAGE 5 OF 8 ITA NO.1520/BANG/2014 PAGE 6 OF 8 5. THUS THE LEARNED CIT CONCLUDED THAT THE ASSESSEE HAD NOT OFFERED THE SAID AMOUNT OF RS.74,19,860/- AS IN COME AND AO HAD FAILED TO CAUSE NECESSARY ENQUIRY ON THI S ASPECT WHILE PASSING IMPUGNED ORDER AND PLACING RELIANCE O N THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. INFOSYS TECHNOLOGIES LTD. 341 ITR 293 AND THALIBAI JAIN VS. ITO 101 ITR 1 HELD THAT SUCH ORDER IS NOT ONLY ERRO NEOUS BUT ALSO PREJUDICIAL TO THE INTEREST OF REVENUE AND THE REFORE SET ASIDE TO THE FILE OF THE AO FOR DENOVO EXAMINATION OF THE ISSUE AFTER AFFORDING AN OPPORTUNITY TO BE HEARD TO THE ASSESSEE. 6. BEING AGGRIEVED, THE APPELLANT IS BEFORE US IN T HE PRESENT APPEAL. THE LEARNED AUTHORIZED REPRESENTAT IVE REITERATED BEFORE US THE SAME SUBMISSIONS MADE BEFO RE THE LEARNED CIT AND CONTENDED THAT THE SAID SUM IS NOT IN THE NATURE OF INCOME IN THE HANDS OF THE ASSESSEE AND T HEREFORE ITA NO.1520/BANG/2014 PAGE 7 OF 8 THE LEARNED CIT OUGHT NOT HAVE EXERCISED THE POWER OF REVISION. ON THE OTHER HAND, THE LEARNED CIT(DR) P LACED RELIANCE ON THE ORDER OF THE CIT PASSED UNDER SECTI ON 263. 7. WE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT APPEA L IS WHETHER THE LEARNED CIT IS JUSTIFIED IN EXERCISING THE POWER OF REVISION IN THE PRESENT CASE. IT IS TRITE LAW T HAT ASSUMPTION OF JURISDICTION U/S 263 OF THE ACT WAS J USTIFIED IN CASES WHERE THE AO WITHOUT APPLICATION OF MIND ON A NY ISSUE HAD PASSED ASSESSMENT ORDER. IN THE PRESENT CASE W HEN THE AO HAD NOTICED THAT THERE WAS A CLAIM FOR CREDI T OF TDS ON A SUM OF RS.74,19,860/- HE IS DULY BOUND TO EXAM INE WHETHER THE SAID SUM HAS BEEN OFFERED TO TAX OR NOT . FAILURE TO DO SO BY THE AO RENDERS THE ASSESSMENT O RDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE AND IT IS NOT THE CASE OF THE APPELLANT THAT THIS ISSUE WAS EXAMINED BY THE AO DURING THE COURSE OF REGULAR ASSESSMENT PROCEEDING NOR THE APPELLANT MADE ANY EF FORT TO DEMONSTRATE BEFORE US THAT ANY ENQUIRY WAS CAUSED B Y THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON T HIS ASPECT. THEREFORE, IT WAS HELD BY THE HONBLE SUPR EME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD., VS. CIT 243 ITR 83 THAT NON EXAMINATION OF AN ISSUE BY THE AO R ENDERS THE ASSESSMENT ERRONEOUS AND PREJUDICIAL TO THE INT ERESTS OF THE REVENUE AND EVEN IN THE DECISION OF THE JURISDI CTIONAL HIGH COURT IN THE CASE OF CIT VS. INFOSYS TECHNOLOG IES LTD. 341 ITR 293 IS SQUARELY APPLICABLE TO THE FACT OF T HE CASE. WE MAY ADD HERE THAT THE LEARNED CIT HAD ONLY SET A SIDE THE ISSUE FOR DENOVO EXAMINATION BY THE AO, WHICH I S ITA NO.1520/BANG/2014 PAGE 8 OF 8 PERMISSIBLE AS PER THE DECISION OF THE JURISDICTION AL HIGH COURT IN THE CASE OF INFOSYS TECHNOLOGIES LTD. 8. IN THE RESULT, THE APPEAL FILED BY THE APPELLANT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 16 TH DAY OF DECEMBER, 2016 SD/- SD/- (ASHA VIJAYARAGHAVAN) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : BANGALORE DATED :16/12/2016 /NS/ COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A)-II BANGALORE 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL BANGALORE