Shetkari Sahakari Dudh Utpadak Sanstha Ltd, Solapur V. Income-tax Officer, Ward - 1, Pandharpur

ITA 1531/PUN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2829 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 26-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Set aside
• Section: 143(3)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER . / ITA NO.1531/PUN/2018 / ASSESSMENT YEAR : 2014-15 SHETKARI SAHAKARI DUDH UTPADAK SANSHTA LIMITED, AT & POST NARALE, TALUKA SANGOLA, DISTRICT SOLAPUR 413307. PAN : AAIAS5634D. . / APPELLANT V/S THE INCOME TAX OFFICER , WARD 1, SOLAPUR. . / RESPONDENT ASSESSEE BY : SHRI SUNIL GANOO. REVENUE BY : SHRI M.K. VERMA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 7, PUNE DATED 29.06.201 8 FOR THE ASSESSMENT YEAR 2014-15. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A CO-OPERATIVE SOCIETY STATED TO BE ENGAG ED IN THE BUSINESS OF SALE AND PURCHASE OF MILK AND ITS PRODUCTS, CA TTLE FEEDS AND CHARA CHHAVANI ETC. ASSESSEE ELECTRONICALLY FILED ITS RETU RN OF INCOME FOR A.Y. 2014-15 ON 01.04.2015 DECLARING TOTAL INCOME OF RS.NIL. THE CASE / DATE OF HEARING : 04.06.2019 / DATE OF PRONOUNCEMENT: 07.06.2019 2 ITA NO.1531/PUN/2018 WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WA S FRAMED U/S 143(3) OF THE ACT VIDE ORDER DATED 09.12.2016 AND THE TO TAL INCOME WAS DETERMINED AT RS.4,97,600/-. AGGRIEVED BY THE ORDER OF AO , ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DATE D 29.06.2018 (IN APPEAL NO.PN/CIT(A)-7/ITO, WD-1/10945/2016-17) GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASS ESSEE IS NOW IN APPEAL AND HAS RAISED THE FOLLOWING GROUNDS : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T.[A] OUGHT TO HAVE ANNULLED/CANCELLED THE IMPU GNED ASSESSMENT ORDER FRAMED BY THE LEARNED ASSESSING OFFICER AS TH E SAME WAS CONTRARY TO THE INSTRUCTION NO.7J2014 DATED 27/09/2014 ISSUE D BY THE C.B.D.T. AND HENCE BAD IN LAW AND BEING WITHOUT AUTHORITY OF LAW AND HENCE NULL AND VOID. 2 WITHOUT PREJUDICE TO ABOVE AND BY WAY OF AN ALTER NATE SUBMISSION IT IS SUBMITTED THAT THE LEARNED C.I.T.[A] HAS ERRED IN C ONFIRMING THE FOLLOWING DISALLOWANCES WHICH ARE BASED ON SURMISES AND CONJE CTURE AND BEING BAD IN LAW AND DEVOID OF MERITS AND HENCE THE SAME MAY PLEASE BE DELETED: 1. DISALLOWANCE OUT OF EXPENSES OF CHARA RS.2,09,349 .00 2. DISALLOWANCE OUT OF WATER EXPENSES - RS. 38, 250.00 3. BEFORE ME AT THE OUTSET, LD.A.R. SUBMITTED THAT IF GROUN D NO.1 IS RAISED IN THE PRESENT APPEAL IS DECIDED IN ASSESSEES FAVO UR, THE OTHER GROUNDS RAISED ON MERITS WOULD BE RENDERED ACADEMIC AN D WOULD THEREFORE REQUIRES NO ADJUDICATION. IN VIEW OF THE AFORESA ID SUBMISSIONS OF LD.A.R., I FIRST PROCEED TO DISPOSE OF GROUND NO.1. 4. BEFORE ME, LD.A.R. POINTING TO THE ASSESSMENT ORDER SUB MITTED THAT THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS FOR THE LIMITED PURPOSE TO IDENTIFY (1) CONTRACT RECEIPTS / FEE MISMATCH AND (2) TAX CREDIT MIS- MATCH. HE SUBMITTED THAT AO THEREAFTER IN THE ASSESSM ENT ORDER FRAMED U/S 143(3) OF THE ACT MADE ADDITIONS ON OTHER ISSUES NAME LY EXPENSES WITH RESPECT TO CHARA AND WATER AND INCOME FROM OTHE R SOURCES WHICH 3 ITA NO.1531/PUN/2018 WERE NOT PART FOR WHICH THE CASE WAS INITIALLY SELECTED U NDER CASS. HE SUBMITTED THAT WHEN THE CASE WHICH IS INITIALLY SELECTED FOR LIMITED SCRUTINY AND IS THEREAFTER CONVERTED INTO COMPLETE SCR UTINY, THE AO IS REQUIRED TO TAKE ADMINISTRATIVE APPROVAL FROM PCIT / CIT IN TERMS OF INSTRUCTION NO.5/2016 DATED 14.07.2016. HE SUBMITTED THA T IN THE PRESENT CASE, NO ADMINISTRATIVE APPROVAL FROM THE COMPET ENT AUTHORITY WAS OBTAINED BY THE AO. IN SUCH A SITUATION, HE SUBMITTE D THAT THE ORDER PASSED BY THE AO BEING CONTRARY TO THE INSTRUCTIONS ISS UED BY CBDT IS NULL AND VOID. IN SUPPORT OF HIS CONTENTIONS, HE PLACED RELIA NCE ON THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF AHIL YADEVI MAHILA DUDH UTPADAK SAHAKARI SANSTHA LTD., VS. ITO AND OTHERS (IN ITA NOS.1536-1540/PUN/2018 ORDER DATED 01.02.2019). HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION. FROM THE AFORE SAID ORDER, HE POINTED TO THE GROUNDS RAISED THEREIN WHICH ARE SIMILAR TO THE GROUNDS IN THE PRESENT APPEAL. HE FURTHER SUBMITTED THAT THE ISSUE IN THE PRESENT CASE IS SIMILAR TO THAT OF AHILYADEVI MAHILA DUDH UTPADAK SA HAKARI SANSTHA LTD., (SUPRA) AND FOLLOWING THE AFORESAID DECISION, THE ORDER OF AO BE HELD TO BE NULL AND VOID. LD. D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO AND LD.CIT(A). 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT AND AS NOTED BY AO IN THE ASSESSMENT ORDER THAT THE CASE OF THE ASSESSMENT WAS INITIALLY SELEC TED FOR SCRUTINY UNDER CASS FOR LIMITED PURPOSE OF EXAMINATION OF CONTRACT S RECEIPT/FEE MISMATCH AND TAX CREDIT MIS-MATCH. IT IS ALSO AN UNDISPUT ED FACT THAT NO ADMINISTRATIVE APPROVAL WAS OBTAINED BY THE AO FOR CON VERTING THE CASE OF THE ASSESSEE FROM LIMITED SCRUTINY INTO COMPLETE SCR UTINY CASE. 4 ITA NO.1531/PUN/2018 I FIND THAT IDENTICAL ISSUE AROSE IN THE CASE OF AHILYADEVI MAHILA DUDH UTPADAK SAHAKARI SANSTHA LTD., (SUPRA) WHEREIN THE CO-OR DINATE BENCH OF THE TRIBUNAL HAS HELD AS UNDER : 7. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE CASE OF THE ASSESSEE WAS INITIALLY SELECTED FOR SCRUTINY FOR THE LIMITED PURPOSE OF EXA MINATION OF CONTRACT RECEIPTS / FEE MISMATCH AND TAX CREDIT MISMATCH. IT IS ALSO AN UNDISPUTED FACT THAT NO ADMINISTRATIVE APPROVAL WAS OBTAINED B Y THE AO FOR CONVERTING THE CASE OF THE ASSESSEE FROM LIMITED SCRUTINY INT O COMPLETE SCRUTINY CASE. I FIND THAT THE INSTRUCTION NO.7 OF 2014 DT. 26.09.2014 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT) VIDE PARA 2 ST ATES THAT THE AO SHALL CONFINE HIS ENQUIRY OR VERIFICATION ONLY TO THE SPE CIFIC POINTS ON THE BASIS OF WHICH THE PARTICULAR RETURN HAS BEEN SELECTED FOR S CRUTINY. VIDE PARA 4 OF THE AFORESAID INSTRUCTION, IT IS STATED THAT IN CAS E DURING THE ASSESSMENT PROCEEDINGS, IT IS FOUND THAT THERE IS POTENTIAL ES CAPEMENT OF INCOME BASED ON THE MONETARY LIMITS PRESCRIBED THEREIN OR ON THE CONDITIONS STATED THEREIN, THE CASE MAY BE TAKEN UP FOR COMPREHENSIVE SCRUTINY WITH THE APPROVAL OF THE PCIT/DIT CONCERNED AND SUCH APPROVA L SHALL BE ACCORDED BY THE PCIT/DIT IN WRITING AFTER BEING SATISFIED A BOUT THE MERITS OF THE ISSUE NECESSITATING WIDER AND DETAILED SCRUTINY IN THE CASE. 8. IT IS A SETTLED LAW THAT THE CBDT IS COMPETENT T O ISSUE CIRCULARS U/S 119 OF THE INCOME TAX ACT, 1961. THE CIRCULARS SO ISSUED HAVE THE FORCE OF LAW AND ARE BINDING ON ALL THE OFFICERS OF THE DEPA RTMENT. IN THE PRESENT CASE, NO MATERIAL HAS BEEN PLACED ON RECORD BY THE REVENUE TO DEMONSTRATE THAT IN TERMS OF THE AFORESAID CIRCULAR THE AO HAD TAKEN THE APPROVAL OF THE CONCERNED PCIT/DIT. I FURTHER FIND THAT ON IDENTIC AL FACTS IN THE CASE OF SURESH JUGRAJ MUTHA (SUPRA) THE PUNE BENCH OF THE T RIBUNAL HELD THAT WHEN NO ADMINISTRATIVE APPROVAL FROM THE CIT WAS TA KEN FOR CONVERTING THE LIMITED SCRUTINY CASE TO FULL SCRUTINY CASE, THE ASS ESSMENT ORDER PASSED BY THE AO IN VIOLATION OF SUCH INSTRUCTIONS TO BE BAD AND VOID AB INITIO. BEFORE ME, REVENUE HAS NOT PLACED ANY CONTRARY BIND ING DECISION. I THEREFORE FOLLOWING THE DECISION IN THE CASE OF SUR ESH JUGRAJ MUTHA (SUPRA) AND FOR REASONS CITED HEREIN, HOLD THAT THE ASSESSM ENT ORDER PASSED BY THE AO WITHOUT FOLLOWING THE MANDATE PRESCRIBED IN THE INSTRUCTIONS OF CBDT TO BE HELD AS NULL AND VOID. THUS, THE GROUND NO.1 OF THE ASSESSEE IS ALLOWED. BEFORE ME, REVENUE HAS NEITHER POINTED OUT ANY DISTINGUISH ING FEATURE IN THE FACTS OF THE PRESENT CASE AND THAT OF AHILYADEVI MAH ILA DUDH UTPADAK SAHAKARI SANSTHA LTD., (SUPRA) NOR HAS PLACED ANY MATERIA L ON RECORD TO DEMONSTRATE THAT THE ORDER OF THE TRIBUNAL IN THE CASE OF AHILYADEVI MAHILA DUDH UTPADAK SAHAKARI SANSTHA LTD., (SUPRA) HAS BEE N SET ASIDE / STAYED / OVER-RULED BY THE HIGHER JUDICIAL FORUM. I, TH EREFORE FOLLOWING 5 ITA NO.1531/PUN/2018 THE DECISION IN THE CASE OF AHILYADEVI MAHILA DUDH UTPADAK SAHAKARI SANSTHA LTD., (SUPRA) AND FOR SIMILAR REASONS CITED HEREIN, H OLD THAT THE ASSESSMENT ORDER PASSED BY THE AO U/S 143(3) OF THE A CT TO BE NULL AND VOID AND THUS, THE GROUND NO.1 OF THE ASSESSEE IS ALLOWED. SINCE I HAVE HELD THE ASSESSMENT ORDER PASSED BY THE AO TO BE NU LL AND VOID, THE OTHER GROUNDS RAISED BY THE ASSESSEE ON MERITS HAVE B EEN RENDERED ACADEMIC AND THEREFORE DO NOT REQUIRE ADJUDICATION. THUS, THE GROUND NO.1 OF ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 7 TH DAY OF JUNE, 2019. SD/- SD/-- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 7 TH JUNE, 2019. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-7, PUNE. PR. CIT-6, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.