Indrani Patnaik, Rourkela V. JCIT, Rourkela Range, Rourkela

ITA 156/CTK/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1542 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 03-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K GAUTAM
• Assessee Lawyers: S C BHADRA
• Keywords: Reassessment proceedings
• Section: 143(3); 148

Judgement Text

P A G E 1 | 6 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO . 156 /CTK/201 8 ASSESSMENT YEAR : 2011 - 2012 SMT. INDRANI PATNAIK, A/6, COMMERCIAL ESTATE, ROURKELA. VS. JCIT, ROURKELA RANGE, ROURKELA. PAN/GIR NO. ACCPP 6164 E (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.C.BHADRA , AR REVENUE BY : SHRI M.K.GAUTAM, CIT DR DATE OF HEARING : 10 / 1 2 / 20 20 DATE OF PRONOUNCEMENT : 14 / 1 2 /20 20 O R D E R PER C.M.GARG,JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), SAMBALPUR DATED 16.6.2016 FOR THE ASSESSMENT YEAR 2011 - 12 . 2. IN THE GROUNDS OF APPEAL, THE ORDER OF THE LD CIT(A) SUFFERS THE VICE OF ILLEGALITY AS FOUR ADDITIONS HAVE BEEN ADJUDICATED BY THE LD CIT(A) AS UNDER: I) DISALLOWANCE U/S.14A : RS.74,52,217/ - II) COMMISSION EXPENSES : RS.125973054/ - III) PLOT EXPENSES : RS .10113920 - IV) PENALTY : RS.3412187/ - ITA NO.156/CTK/2018 ASSESSMENT YEAR : 2011 - 2012 P A G E 2 | 6 3. LD A.R. SUBMITTED THAT THE ORDERS PASSED BY THE AO AS WELL AS THE LD CIT(A) SUFFERS THE VICE OF ILLEGALITY AND ARBITRARINESS. LD A.R SUBMITTED THAT IN THIS CASE, ORIGINAL ASSESSMENT ORDER WAS PASSED UNDER SECTION 143(3) OF THE ACT ON 2 9.3.2014 AND THE ASS ESSEE FILED APPEAL AGAINST SAID ORDER ON 9 .4.2014 BEFORE THE LD CIT(A). LD A.R.FURTHER EXPLAINED THAT BEFORE ADJUDICATION OF FIRST APPEAL BY THE LD CIT(A), THE AO INITIATED REASSESSMENT PROCEEDINGS U/S.147 AND ISSUANCE OF NOTICE U/S.148 OF THE A C T ON 3.3. 2016. 4. LD A.R. FURTHER SUBMITTED THAT WHEN THE APPEAL HAD COME UP FOR CONSIDERATION BEFORE THE LD CIT(A) AGAINST THE ORIGINAL ASSESSMENT ORDER DATED 29.3.2014, THE CIT(A) NOTED THE FACTUAL POSITION NARRATED BY LD A.R. OF THE ASSESSEE THAT THE ORDER U/S.143(3) OF THE ACT HAS BEEN REOPENED U/S.147 OF THE ACT AND, THEREFORE, ORDER U/S.143(3) OF THE ACT IS NO LONGER IN EXISTENCE AND WILL MERGE IN THE ORDER U/S.143(3) R.W.S 147 OF THE ACT TO BE PASSED BY THE AO AFTER COMPLETION OF REASSESSMENT PROCEEDINGS. LD A.R. SUB MITTED THAT WITH THESE OBSERVATIONS, THE LD CIT(A) DISMISSED THE FIRST APPEAL OF THE ASSESSEE WITHOUT ANY ADJUDICATION. 5. FURTHER, DRAWING OUR ATTENTION TOWARDS ORIGINAL ASSESSMENT ORDER DATED 29.3.2014 AND REASSESSMENT ORDER PASSED U/S.147 OF THE ACT DAT ED 30.12.2016, LD A.R. SUBMITTED THAT IN THE REASSESSMENT ORDER DATED 30.12.2016, THE AO WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE PICKED UP THE TOTAL INCOME OF THE ASSESSEE ASSESSED IN THE ORIGINAL ASSESSMENT ORDER DATED 29.3.2014 U/S.143(3) OF THE ACT, WHICH WAS ITA NO.156/CTK/2018 ASSESSMENT YEAR : 2011 - 2012 P A G E 3 | 6 RS.1949031458/ - AND, THEREAFTER, MADE TWO ADDITIONS. LD A.R. FURTHER EXPLAINED THAT IN THE SAID TOTAL INCOME ASSESSED BY THE AO IN THE ORIGINAL ASSESSMENT ORDER INCLUDES ADDITIONS/DISALLOWANCES MADE BY THE AO ON FOUR HEADS AS DISCUSSED IN PARAS 4 TO 8 OF THE ORIGINAL ASSESSMENT ORDER AND WHEN THE AO IS COMPUTING TOTAL TAXABLE INCOME OF THE ASSESSEE DURING REASSESSMENT ORDER WHILE PICKING UP THE AMOUNT TOTAL ASSESSED INCOME BY THE AO IN THE ORIGINAL ASSESSMENT ORDER, THEN IT HAS TO BE PRESUM ED THAT ADDITIONS MADE BY THE AO DURING ORIGINAL ASSESSMENT ORDER ARE STILL SURVIVE. 6. LD A.R. SUBMITTED THAT WHEN FOUR ADDITIONS MADE BY THE AO DURING ORIGINAL ASSESSMENT PROCEEDINGS HAVE BEEN MERGED WITH THE REASSESSMENT ORDER U/S.147 OF THE ACT THEN TH E GRIEVANCE OF THE ASSESSEE REGARDING THOSE FOUR ISSUES REMAINS UNDECIDED AND UNADJUDICATED AS THE LD CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE BY TAKING COGNIZANCE OF INITIATION OF REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AND ISSUANCE OF NOTICE U /S.148 OF THE ACT. LD A.R. SUBMITTED THAT AGAINST THE REASSESSMENT ORDER DATED 30.12.2016, THE ASSESSEE PREFERRED APPEAL BEFORE THE LD CIT(A) ON 4.2.2017 IN I.T.APPEAL NO.0020/17 - 18, WHICH WAS ADJUDICATED BY ORDER DATED 22.3.2018 BUT THE LD CIT(A) QUASHE D THE REASSESSMENT PROCEEDINGS AND REASSESSMENT ORDER ON THE SOLE GROUND THAT THE REASSESSMENT ORDER DATED 30.12.2016 HAS BEEN PASSED WITHOUT ISSUING NOTICE U/S.143(2) OF THE ACT AND CONSEQUENTLY, ADDITIONS MADE BY THE AO THEREIN HAVE BEEN DELETED. LD A.R. FURTHER POINTED OUT THAT EVEN IN A SITUATION WHEN THE APPEAL HAS ITA NO.156/CTK/2018 ASSESSMENT YEAR : 2011 - 2012 P A G E 4 | 6 BEEN ALLOWED BY THE LD CIT(A) WHILE PASSING ORDER DATED 22.3.2018, THE ADDITIONS MADE BY THE AO IN THE REASSESSMENT ORDER DO NOT SURVIVE. BUT AT THE SAME TIME, WHEN THE REASSESSMENT ORDER BY WAY OF ALLOWING THE APPEAL OF THE ASSESSEE HAS BEEN QUASHED BY THE LD CIT(A) THEN THE ORIGINAL ASSESSMENT ORDER DATED 29.3.2015 WOULD COME INTO RE - EXISTENCE AND SAID FOUR ADDITIONS MADE BY THE AO WOULD ALSO SURVIVE WH ICH REMAINED UNDECIDED WITHOUT ANY ADJUDICATION AND CONSIDERATION BY THE LD CIT(A). 7. WITH THESE FACTS AND CIRCUMSTANCES, LD A.R. HUMBLY SUBMITTED THAT SINCE THE GROUNDS OF THE ASSESSEE ADJUDICATED IN I.T.APPEAL NO.0046/14 - 15 DATED 16.6.2016 AGAINST WHICH PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE HAVE NOT BEEN ADJUDICATED DURING EARLIER FIRST APPELLATE PROCEEDINGS DUE TO INITIATION OF REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT AND ISSUANCE OF NOTICE U/S. 148 OF THE ACT, THEREFORE, AFTER QUASHING THE RE ASSESSMENT ORDER, THESE FOUR ISSUES REQUIRES CONSIDERATION AND ADJUDICATION AT THE LEVEL OF THE LD CIT(A), THEREFORE, APPEAL MAY KINDLY BE RESTORED TO THE FILE OF THE LD CIT(A) FOR ADJUDICATION OF FOUR ISSUES OF THE ASSESSEE. 8. LD CIT DR, IN ALL FAIRNESS, CANDIDLY SUBMITTED THAT AFTER THE ORDER OF LD CIT(A) DATED 22.3.2018 THE TWO ADDITIONS MADE BY THE AO DURING REASSESSMENT PROCEEDINGS HAVE BEEN DELETED AND DO NOT SURVIVE. HOWEVER, FOUR ADDITIONS MADE BY THE AO IN THE ORIGINAL ASSESSMENT PROCEEDINGS U/S. 143(3) OF THE ACT REQUIRES ADJUDICATION BY THE LD CIT(A) TO ADDRESS THE ITA NO.156/CTK/2018 ASSESSMENT YEAR : 2011 - 2012 P A G E 5 | 6 GRIEVANCE OF THE ASSESSEE. LD CIT DR SUBMITTED THAT IN THE ORDER DATED 16.6.2016, THE LD CIT(A) HAVE NOT ADJUDICATED FOUR GROUNDS OF THE ASSESSEE ON MERITS DUE TO INITIATION OF REASSE SSMENT PROCEEDINGS U/S.147 OF THE ACT AND ISSUANCE OF NOTICE U/S.148 OF THE ACT AND AFTER QUASHING THE REASSESSMENT PROCEEDINGS AND CONSEQUENT ORDER PASSED U/S.143(3)/147 OF THE ACT, THESE ISSUES REMAIN FOR CONSIDERATION AND ADJUDICATION AT THE LEVEL OF TH E LD CIT(A). THEREFORE, HE SUBMITTED THAT THE DEPARTMENT HAS NO SERIOUS OBJECTION IF THE GROUNDS RAISED BY THE ASSESSEE IN I.T.APPEAL NO.0046/14 - 15 IS REMITTED TO LD CIT(A ) FOR ADJUDICATION. 9. KEEPING IN VIEW THE FACTS AND MATRIX OF THE CASE, HISTORY OF THE LITIGATION BETWEEN THE ASSESSEE AND DEPARTMENT AS NARRATED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT SINCE THE GROUNDS OF THE ASSESSEE PERTAINING TO THE FOUR ADDITIONS MADE BY THE AO DURING ORIGINAL ASSESSMENT PROCEEDINGS IN ORDER DATED 29.3.2014 HAVE NOT BEEN CONSIDERED AND ADJUDICATED BY THE LD CIT(A) WHILE PASSING THE IMPUGNED ORDER DATED 16.6.2016, THEREFORE, IN THE CHANGED CIRCUMSTANCES, WHEN THE REASSESSMENT PROCEEDINGS HAVE BEEN QUASHED BY THE LD CIT(A), THEN THESE GROUNDS REQUIRES CONSIDERATION AND ADJUDICATION AT THE LEVEL OF THE LD CIT(A). THEREFORE, WE RESTORE THESE GROUNDS TO THE LD CIT(A) FOR CONSIDERATION AND ADJUDICATION AFTER ALLOWING DUE AND REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA NO.156/CTK/2018 ASSESSMENT YEAR : 2011 - 2012 P A G E 6 | 6 10. IN THE RESULT, APPEAL OF THE ASSESSEE I S ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 14 /1 2 /20 20 . SD/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 14 / 1 2 /20 20 B.K.PARIDA, SPS (OS) COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : SMT. INDRANI PATNAIK, A/6, COMMERCIAL ESTATE, ROURKELA. 2. THE RESPONDENT. JCIT, ROURKELA RANGE, ROURKELA 3. THE CIT(A) , SAMBALPUR 4. PR.CIT - , SAMBALPUR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//