D.C.I.T., Cir-6, Kolkata, Kolkata V. CFL Capital Financial Services Ltd., Kolkata

ITA 1553/KOL/2009

• Counselvise Citation: 155323514 RSA 2009
• Duration Of Justice: 4 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 06-02-2013
• Assessment Year: 1999-2000
• Appeal Filed On: 03-09-2009
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN LD
• Assessee Lawyers: DS DAMLE FCA LD AR
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 147; 148; 144

Judgement Text

ITA NO.1553/KOL//2009 M/S. CFL CAPITAL FIN. SERV. L TD-B-AM 1 , B IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH: KO LKATA ( ) , , BEFORE HONBLE SRI MAHAVI R SINGH, JM & HONBLE SRI SHAMIM YAHYA, AM / ITA NO.1553/KOL/2009 A.Y 1999-2000 D.C.I.T, CIRCLE-6, KOLKATA - - - VERSUS - . M/S. CFL FINANCIAL SERVICES LTD PAN:AABCCO 704F ( ! / APPELLANT ) ( '#! / RESPONDENT ) FOR THE APPELLANT/DEPARTMENT /SHRI RAVI JAIN, LD.CIT/DR FOR THE RESPONDENT/ASSESSEE: / SHRI D,S DAMLE, FCA, LD.AR & ' /DATE OF HEARING: 26-06-2014 & ' /DATE OF PRONOUNCEMENT: 26- 06--2014 / ORDER , SRI SHAMIM YAHYA, ACCOUNTANT MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-VI, KOLKATA DATED 18.06.2009 P ERTAINING TO ASSESSMENT YEAR 1999- 2000. 2. AT THE OUTSET, IT IS NOTICED THAT THERE IS A DE LAY OF 2 DAYS IN FILING THE APPEAL BY THE REVENUE. THE LD. COUNSEL OF THE ASSESSEE DID NOT HA VE ANY OBJECTION IN OUR CONDONING THE DELAY. ACCORDINGLY, WE CONDONE THE DELAY IN FILING THE APPEAL BY THE REVENUE. 3. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REA D AS UNDER:- 1. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DIRE CTING THE ASSESSING OFFICER TO CONSIDER THE INCOME OF RS.17,0 8,93,315/- ( AS PER ORDER U/S. 144A/143(3) DATED 27.03.2002) WHI CH HAS ALREADY BEEN REVISED AS RS. 20,20,26,676/- (AS PER ORDER U/S. 144/147/251 DATED 31.03.2006). 2. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN N OT CONSIDERING THE FACT THAT AS THE ORDER U/S. 144/147/251 DATED 31.03.2006 ITA NO.1553/KOL//2009 M/S. CFL CAPITAL FIN. SERV. L TD-B-AM 2 HAS NOT BEEN CANCELLED OR ANNULLED BY ANY HIGHER AU THORITY THE INCOME DETERMINED THEREIN IS STILL VALID AS ON DATE . 3. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT CONSIDERING THE FACT THAT THE ASSESSEE ITSELF ACK NOWLEDGED THE FACT THAT NOTICE U/S. 148 WAS PROPERLY SERVED AND T HE RETURN IN RESPONSES TO THAT NOTICE WAS DULY SUBMITTED BY THE ASSESSEE WHICH PROVES THAT ASSESSEE WAS COMPLETELY AWARE OF THE PROCEEDINGS INITIATED U/S. 148. 4. IN THIS CASE THE AO HAS PASSED AN ORDER U/S. 25 4/143(3) OF THE I.T ACT 1961 VIDE ORDER DATED 2-7-2007. THE ASSESSEE APPEALED AGAINST THE ABOVE ORDER BEFORE THE LD. CIT(A). THE ASSESSEE CONTESTED AGAINST THE ACTION O F THE AO IN STARTING THE COMPUTATION OF TOTAL INCOME MADE IN THE ORDER PASSED U/S. 254 /143(3) OF THE ACT WITH REFERENCE TO AN ORDER ALLEGEDLY MADE U/S. 144/147/251 DATED 31-0 3-2006 CLAIMING THAT NO SUCH ORDER WAS MADE AND/EXISTED AND/SERVED UPON THE ASSESSEE. THE ASSESSEE SUBMITTED AS UNDER:- 4.1 THE APPELLANT FILED ITS RETURN OF INCOME FOR TH E ASSESSMENT YEAR PRESENTLY UNDER APPEAL ON 31-12-99 DECLARING A N INCOME OF RS.4,65,12,521/- WHICH WAS SET-OFF AGAINST THE UNAB SORBED LOSSES OF EARLIER YEARS AND RETURNED A NIL INCOME. THE ASSE SSMENT WAS COMPLETED ON 27-3-02 U/S. 144A/143(3) DETERMINING T OTAL INCOME OF RS. 17,08,93,315/-. AGAINST THE ORDER MADE U/S. 14 4A/143(3), THE APPELLANT PREFERRED AN APPEAL BEFORE THE CIT(A)-XII , KOLKATA. THE LD. CIT(A) PASSED AN ORDER DATED 24-9-04 IN APPEAL NO.32/XII/DCIT CIRCLE-12/01-02. THE APPELLANT STATE S THAT IT HAS TILL DATE NOT RECEIVED THE CONSEQUENTIAL ORDER GIVI NG EFFECT TO THE ORDER OF THE LD.CIT(A). 4.2 THE APPELLANT AS WELL AS THE DEPARTMENT PREFER RED AN APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL, KO LKATA AGAINST THE ORDER DATED 24-09-04 PASSED BY THE LD. CIT(A). THE TRIBUNAL IN ITS CONSOLIDATED ORDER DATED 31-05-07 IN ITA NOS. 2529/K/2004 AND 14/K/2005 DISPOSED OF THE APPEALS. THE AO PASSE D AN ORDER U/S. 254/143(3) DATED 2-7-07 ALLEGEDLY GIVING EFFEC T TO THE ORDER OF THE TRIBUNAL DATED 31-05-07. 4.3 IN THE IMPUGNED ORDER MADE U/S. 254/143(3) DATE D 2-7-07, THE AO MADE THE REVISED COMPUTATION OF INCOME START ING WITH TOTAL INCOME OF RS.20,20,26,676/- ALLEGEDLY AS PER ORDER MADE U/S. 144/147/251 DATED 31-03-06. THE APPELLANT HAS NEVE R BEEN MADE ITA NO.1553/KOL//2009 M/S. CFL CAPITAL FIN. SERV. L TD-B-AM 3 AWARE OF EXISTENCE OF ANY SUCH ORDER MADE U/S. 144 /147/251 DATED 31-03-06 AND THE APPELLANT DENIES THAT THE ALLEGED ORDER MADE U/S. 144/147/251 DATED 31-03-06 WAS EVER SERVED UPON TH E APPELLANT WHEREIN TOTAL INCOME OF RS.20,20,26,676/- HAS ALLEG EDLY BEEN DETERMINED. AS PER THE RECORDS OF THE APPELLANT, THE ONLY ORDERS MADE BY THE AO AND SERVED UPON THE APPELLANT FOR TH E ASSESSMENT YEAR 1999-2000 WERE AS UNDER:- (I) ORDER DATED 27-03-2002 MADE U/S. 144A/143(3) DE TERMINING TOTAL INCOME OF RS.17,08,93,315/- AND TAX PAYABLE O F RS.6,97,69,844/-; AND (II) ORDER DATED 06-06-02 MADE U/S. 154/143(3) DE TERMINING TOTAL INCOME OF RS.17,08,93,315/- AND TAX PAYABLE OF RS.6 ,56,17,787/-. 4.4 THE APPELLANT ALSO SUBMITS THAT IT IS TRUE THAT A NOTICE U/S. 148 DATED 16-8-04 WAS MADE AND SERVED UPON THE APPE LLANT ON 17- 08-04. IN RESPONSE TO THE AFORESAID NOTICE ISSUED U /S. 148, THE APPELLANT FILED A RETURN OF INCOME ON 15-09-04. THE APPELLANT ALSO VIDE ITS LETTER DATED 19-08-04 REQUESTED THE AO TO FURNISH THE RECORDED REASONS FOR ALLEGED ESCAPEMENT OF INCOME. THE APPELLANT SUBMITS THAT AFTER THE RETURN OF INCOME WAS FILED ON 15-09-04 IN RESPONSE TO THE NOTICE U/S. 148 DATED 16-08-04, THE RE HAS NOT BEEN ANY FURTHER DEVELOPMENT IN THE PROCEEDINGS INITIA TED U/S. 148 OF THE ACT, WHICH THE APPELLANT WAS MADE AWARE OF OR WAS COMMUNICATED. 4.5 THE APPELLANT THEREFORE SUBMITS THAT THE ACTION OF THE AO IN STARTING THE COMPUTATION WITH REFERENCE TO THE INCO ME DETERMINED IN THE ALLEGED ORDER MADE U/S.144/147/251 DATED 31 -3-06 IN THE IMPUGNED ORDER MADE U/S. 254/143(3) DATED 2-7-07 W AS ARBITRARY AND BAD IN LAW AND THE APPELLANT REQUESTS YOUR HONO UR THAT THE AO BE DIRECTED TO CONSIDER THE INCOME OF RS.17,08,93,3 15/- DETERMINED IN THE ORDER MADE U/S. 144A/143(3) DATED 27-03-02 A ND RE-COMPUTE THE REVISED TOTAL INCOME. 5. TO VERIFY THE SUBMISSIONS OF THE ASSESSEE THE SA ME WAS FORWARDED BY THE LD. CIT(A) TO THE ACIT, CIRCLE-6 FOR HIS COMMENTS. THE AO IN HIS REPLY SUBMITTED AS UNDER:- 5.1 ON GOING THROUGH THE FILE, IT IS SEEN THAT ON THE ISSUE OF ADMISSIBILITY OF AMOUNT TRANSFERRED TO LEASE EQUAL IZATION RESERVE, THE AO MADE PROPOSAL FOR REOPENING U/S. 147 ON 27-7 -04. 5.2 THE CIT BEING SATISFIED ON SUCH PROPOSAL APPROV ED THE REOPENING ON 12-8-04. ITA NO.1553/KOL//2009 M/S. CFL CAPITAL FIN. SERV. L TD-B-AM 4 5.3 A NOTICE U/S 148 WAS ISSUED ON 16-8-04 AND THE ASSESSEE SUBMITTED A REPLY ASKING FOR THE REASONS FOR REOPE NING ON 20-8-04. SINCE AS PER THE SUPREME COURT ORDER IN GKN DRIVESH AFT CASE THERE IS NO NECESSITY OF SENDING OF THE REASONS UNL ESS RETURN IN RESPONSE TO THE NOTICE IS SUBMITTED, ASSESSEES RE QUEST WAS TURNED DOWN. 5.4 ON 15-09-04 THE ASSESSEE SUBMITTED ITS RETURN U /S. 148 WITH INCOME DISCLOSED AS PER ORIGINAL RETURN U/S. 139(1 ). 5.5 THEREAFTER, THE JURISDICTION OVER THE CASE WAS TRANSFERRED TO DCIT, CIR-6, KOL AND THE EARLIER AO THROUGH LETTER DT. 15-10-04, FORWARDED THE CASE RECORDS TO DCIT, CIR-6, KOL. 5.6 THE DCIT, CIR-6, KOL THEREAFTER, ON 23-9-05 ISS UED A NOTICE U/S. 143(2) TO THE ASSESSEE DIRECTING THEM FOR APPE ARANCE ON 8-11- 05, AGAINST WHICH THERE WAS NO COMPLIANCE RECORDED . 5.7 AS PER RECORD ANOTHER LETTER REFIXING THE CAS E WAS SENT ON 6-2-06 WHERE HEARING WAS FIXED ON 20-2-06. THEN ON 31-3-06 THE ORDER WAS PASSED RAISING A DEMAND OF RS.25,320/-. HOWEVER, RECORD OF SERVICE OF BOTH THE REFIXATION NOTICE AS WELL AS ORDER IS NOT THERE IN THE FILE. 5.8 THE ORDER WAS ALSO RECORDED IN THE DEMAND & COL LECTION REGISTER FOR F.Y 2005-06 VIDE NO.P-32/24/05-06 DT. 31-3-06. 5.9 THE CIT(A) MAY DECIDE THE CASE ON THE FACTS STA TED ABOVE. 6. CONSIDERING THE ABOVE FACTS AND SUBMISSIONS TH E LD.CIT(A) HELD AS UNDER :- 7. I HAVE GONE THROUGH THE SUBMISSIONS MADE BY TH E APPELLANT AND ALSO THE REMAND REPORT OF AO AS SEEN FROM THE R EMAND REPORT, ON 15-09-04 THE ASSESSEE SUBMITTED THE RETURN U/S. 148 WITH INCOME DISCLOSED AS PER ORIGINAL RETURN U/S. 139(1) . LATER THE RECORD WAS TRANSFERRED TO DCIT, CIRCLE-6 THROUGH LE TTER DATED 15- 10-04. THE AO REPORTED THAT RECORD OF SERVICE OF T HE HEARING NOTICE AS WELL AS THE ASSESSMENT ORDER PASSED ON 31 -03-06 IS NOT THERE IN THE FILE. IT APPEARS THAT THE NOTICE U/S. 143(2) WAS NOT SERVED UPON THE ASSESSEE AND ALSO THE ASSESSMENT ORDER PASSED ON 31-03-06 WAS ALSO NOT SERVED ON THE APPELLANT. THE ASSESSEE WAS NOT GIVEN THE OPPORTUNITY OF BEING HEARD AND ALSO BY NOT SERVING THE ASSESSMENT ORDER DATED 31-03-06, THE AS SESSEE WAS DENIED THE OPPORTUNITY OF GOING ON APPEAL AGAINST T HE SAID ORDER. APPLYING THE PRINCIPAL OF NATURAL JUSTICE I AGREE W ITH ARGUMENTS OF THE APPELLANT AND DIRECT THE AO TO CONSIDER THE INC OME OF ITA NO.1553/KOL//2009 M/S. CFL CAPITAL FIN. SERV. L TD-B-AM 5 RS.17,08,93,315/- AS DETERMINED IN THE ORDER MADE U/S.144A/143(3) DATED 27-03-02 AND RECOMPUTE THE RE VISED TOTAL INCOME U/S. 254/143 DATED 02-07-07. 7. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD BOTH THE COUNSELS AND PERUSED THE RECORD. WE FIND THAT IN THE ORDER MADE U/S. 254/143(3) OF THE ACT THE AO HAD STARTED COMPUTATION WITH REFERENCE TO AN ORDER MADE U/S.144/147/251 DATED 31-03-06, WHEREIN TOTAL INCOME WAS SHOWN AT RS.20,20,26,676/-. NOW IT IS THE CASE OF THE ASSESS EE WAS THAT NO SUCH ORDER WAS MADE AND SERVED UPON THE ASSESSEE. IN THIS REGARD, THE LD.C IT(A) HAS OBTAINED REMAND REPORT FROM THE AO. WE PRODUCED THE SAID REPORT AS ABOVE. THE AO H AS DULY STATED THAT THERE IS NO RECORD OF SERVICE OF NOTICE AS WELL AS REFIXATION OF NOTI CE AS WELL AS THE SERVICE OF ORDER PASSED ON 31-03-2006. IN THE CIRCUMSTANCES, THE LD. CIT(A) H AS CONCLUDED THAT NOTICE U/S. 143(2) OF THE ACT WAS NOT SERVED UPON THE ASSESSEE AND ALSO T HE ASSESSMENT ORDER DATED 31-3-06 WAS NOT SERVED UPON THE ASSESSEE. THUS, WE AGREE WITH THE LD. CIT(A) THAT THE ASSESSEE WAS NOT GIVEN OPPORTUNITY OF BEING HEARD AND ALSO BY NOT S ERVING THE ASSESSMENT ORDER DATED 31-3- 06, THE ASSESSEE WAS DENIED THE OPPORTUNITY OF GOIN G ON APPEAL AGAINST THE SAID ORDER. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN DIRECTING THE AO TO CONSIDER THE INCOME OF RS.17,08,93,315/- AS DETERMI NED IN THE ORDER MADE U/S.144A/143(3) DATED 27-03-02 AND RECOMPUTE THE REVISED TOTAL INCO ME U/S. 254/143 DATED 02-07-07. ACCORDINGLY, WE UPHOLD THE SAME. 8. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED AS STATED ABOVE. * ' ORDER PRONOUNCED IN THE OPEN COURT ON 26/06/2014 SD/- SD/- [ , ] [ , ] [ MAHAVIR SINGH, JUDICIAL MEMBER ] [ SHAMIM YAHYA, ACCOUNTANT MEMBER ] ( ' ) DATED :26/06/2014 ITA NO.1553/KOL//2009 M/S. CFL CAPITAL FIN. SERV. L TD-B-AM 6 ** PRADIP SPS & '. /. / COPY OF THE ORDER FORWARDED TO: 1. . ! / THE APPELLANT : D.C.I.T CIRCLE-6 P-7 CHOWRINGHE E SQ, KOLKATA 2 '#! / THE RESPONDENT- M/S.CFL CAPITAL FINANCIAL SERV ICES LTD, 31 N.S RD, KOL-1 3. 4. . / THE CIT, ( )/ THE CIT(A) 5 . ' / DR, KOLKATA BENCH 6 . GUARD FILE . #. ' / TRUE COPY, / BY ORDER, / ASSTT REGIS TRAR