Kamala Tea Company Limited, Kolkata V. ITO, Ward 4(4), Kolkata, Kolkata

ITA 1537/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9375 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 14-02-2017
• Assessment Year: misc
• Appeal Filed On: 25-07-2016
• Court: TRIBUNAL
• Keywords: Rectification of order; Opportunity of being heard; Principle of natural justice
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI S.S.VISWANETHRA RAVI, JM & DR. A.L.SAI NI, AM ./ ITA NO.1537/KOL/2016 ( / ASSESSMENT YEAR:2009-10) KAMALA TEA COMPANY LIMITED, 240B, AJC BOSE ROAD, 3 RD FLOOR, KOLKATA-700020 VS. ITO WARD-4(4), KOLKATA ./ ./PAN/GIR NO.: AABCK 2866 L ( /APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SRI NICHOLAS MURMU, JCIT / DATE OF HEARING : 14/02/2017 /DATE OF PRONOUNCEMENT 22/02/2017 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTAINI NG TO ASSESSMENT YEAR 2009-2010, IS DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-2, KOLKATA IN APPEAL NO.1263/CIT(A)-2/14-15, DATED 10.05.2016, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER (AO) UNDER SECTION 154 OF THE INCOME TAX ACT 1961, (HERE INAFTER REFERRED TO AS THE ACT), DATED 05.02.2014. 2. BRIEF FACTS OF THE CASE QUA THE ASSESSEE ARE THA T THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE RELEVANT A.Y.2009-2010 ON 25.09.2009 DECLARING TOTAL LOSS OF RS.5433320/-. THE CASE OF T HE ASSESSEE WAS SELECTED FOR SCRUTINY AND THE AO FRAMED THE ASSESSM ENT U/S.143(3) MAKING VARIOUS ADDITIONS. LATER ON, THE AO RECTIFIE D THE ORDER U/S 154 OF THE ACT IN RESPECT OF MISTAKE IN COMPUTING 100% LOS S FROM EXPORT BUSINESS INSTEAD OF 40%. ITA NO.1537/KOL/2016 KAMALA TEA COMPANY LTD. 2 3. AGGRIEVED FROM THE ORDER OF AO, THE ASSESSEE FIL ED AN APPEAL BEFORE THE LD. CIT(A), WHO HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE OBSERVING THE FOLLOWINGS :- I HAVE CONSIDERED THE SUBMISSIONS OF THE AR OF THE APPELLANT. WHILE GOING THROUGH THE SUBMISSION FILED BY THE AR OF THE ASSESSEE HAS NOT POINTED OUT ANY MISTAKE IN THE ORDER OF THE AO AND ALSO NOT FILED ANY EVIDENCES DURING THE APPELLATE PROCEEDING IN SUPPORT OF THE CLAIM. IN VIEW OF THE ABOVE, THE ORDER OF THE A O IS UPHELD. THIS GROUND OF APPEAL IS DISMISSED. IN THE RESULT, THE APPEAL OF THE APPELLANT IS TREAT ED AS DISMISSED. 4. NOT BEING SATISFIED WITH THE ORDER OF LD. CIT(A) , THE REVENUE IS IN APPEAL BEFORE US AND HAS TAKEN THE FOLLOWING GROUND S OF APPEAL :- 1) THAT UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE IMPUGNED ORDER DATED 10.05.2016 AS PASSED BY THE LD . COMMISSIONER OF I.T. (APPEAL)-2, KOLKATA IS RATHER BAD, ILLEGAL AND ARBITRARY. 2) THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE CONCERNED ASSESSMENT CAN'T BE COVERED U/S. 154 AS T HE REFERRED MISTAKE, POINTED OUT BY THE LD. ITO WARD-4(4), KOLK ATA IS FIRST OF ALL NOT A MISTAKE. FURTHER WITHOUT PREJUDICE TO THE ABOVE, IF IT'S A M ISTAKE, THE SAME IS NOT APPARENT FROM RECORD. THEREFORE, THE SAID ASSESSMENT ORDER OF THE AO U/S 143(3) CANNOT BE RECTIFIED BY WAY OF INVOKING PROVISIONS U /S. 154 IN INCOME TAX ACT, 1961. 3) THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE COMPANY HAD EXPORTED MAJOR PART OF TEAS OUT OF TEAS PURCHAS ED FROM OUTSIDE AND ALSO OUT OF LEAVES PURCHASED FROM OUTSI DE AND PROCESSED IN THE FACTORY OF TEA ESTATE. THE INCOME FROM TEAS PURCHASED FROM OUTSIDE AND EXPORTED AS WELL AS TEAS MANUFACTURED OUT OF BOUGHT LEAVES AND EXPORTED CANN OT BE CONSIDERED AS AGRICULTURAL INCOME OF THE TEA ESTATE . HENCE, WHATEVER LOSS THERE HAS BEEN ON ACCOUNT OF EXPORT O F TEAS, 100% OF SUCH LOSS MUST BE ALLOWABLE. WRITTEN SUBMISSIONS WERE DULY PLACED AND EVERYTHING WAS DULY EXPLAINED AS DESIRED FROM TIME TO TIME DURING THE COURSE OF APPELLATE PROCEEDINGS. NO EVIDENCES WERE DESIRED DURING THE COURSE OF APPELLATE PROCEED INGS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS)- 2, KOLKAT A. HOWEVER, THE NECESSARY DOCUMENTARY EVIDENCES WOULD BE PRODUCED AT THE TIME OF FINAL HEARING OF THIS APPEA L PETITION AND THAT MAY BE CONSIDERED AND ALLOWED IN THE APPEAL. ITA NO.1537/KOL/2016 KAMALA TEA COMPANY LTD. 3 4) THAT THE APPELLANT PRAYS FOR ALL RELIEFS, BENEFI TS AND ADVANTAGES AND CRAVES LEAVE TO ADD, ALTER, AMEND, AND PUT FORW ARD ANY OTHER GROUNDS AT THE TIME OF THE HEARING OF THE INSTANT A PPEAL PETITION OR AT ANY TIME BEFORE DISPOSAL OF THE APPEAL. 5. ALTHOUGH, IN THIS APPEAL THE ASSESSEE HAS RAISED A MULTIPLE GROUNDS OF APPEAL BUT AT THE TIME OF HEARING THE SO LITARY GRIEVANCE OF THE ASSESSEE HAS BEEN CONFINED TO THE MAIN ISSUE TH AT ASSESSING OFFICER PASSED THE RECTIFICATION ORDER U/S 154 OF T HE ACT WITHOUT GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSE E. 5.1 LD. AR FOR THE ASSESSEE SUBMITTED BEFORE US THA T THE ASSESSING OFFICER HAS RECTIFIED THE ORDER U/S.154 SUO MOTO WI THOUT GIVING OPPORTUNITY TO THE ASSESSEE. IT IS ESSENTIAL CONDITION FOR RECT IFICATION U/S 154 OF THE ACT THAT IF THE RECTIFICATION OF MISTAKE RESULTS INTO R EDUCING THE REFUND OR INCREASING THE LIABILITY OF THE ASSESSEE, THE SAID RECTIFICATION ORDER SHOULD BE PASSED AFTER GIVING AN OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. HERE NO OPPORTUNITY WAS GIVEN BY THE AO TO THE ASSE SSEE, HENCE ORDER PASSED U/S 154 IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. 5.2. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELI ED ON THE ORDERS OF THE AUTHORITIES BELOW. 5.3. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMI SSIONS OF LD. AR FOR THE ASSESSEE, AS THE PROPOSITION CANVASSED BY LD. AR FO R THE ASSESSEE ARE SUPPORTED BY THE FACTS NARRATED BY HIM ABOVE. AS, T HE LD. AR FOR THE ASSESSEE HAS POINTED OUT THAT THE ASSESSING OFFICER HAS RECTIFIED THE ITA NO.1537/KOL/2016 KAMALA TEA COMPANY LTD. 4 ORDER U/S.154 SUO MOTO WITHOUT GIVING OPPORTUNITY T O THE ASSESSEE. THE ASSESSING OFFICER HAS VIOLATED THE PROVISIONS OF SE CTION 154 OF THE ACT, AS HE PASSED THE ORDER WITHOUT GIVING AN OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. THEREFORE, WE REMIT THE CASE BACK TO THE FILE OF AO TO RE- ADJUDICATE THE ISSUE AFRESH AFTER GIVING PROPER OPP ORTUNITY TO THE ASSESSEE. 5.4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22/02 /2017. SD/ - (S.S.VISWANETHRA RAVI) S D/ - (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA ; ! DATED 22/02/2017 ' $%& /PRAKASH MISHRA , SR.PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) % & , / ITAT, 1. / THE APPELLANT-KAMALA TEA COMPANY LIMITED 2. / THE RESPONDENT.- ITO WARD-4(4), KOLKATA 3. 0 ( ) / THE CIT(A), KOLKATA. 4. 0 / CIT 5. 12 3 4456 , 56 , / DR, ITAT, KOLKATA 6. 3 78 / GUARD FILE. 1 4 //TRUE COPY//