ITO, Pune V. Shri Nandkumar Ganpatdas Shah, Pune

ITA 1564/PUN/2013

• Counselvise Citation: 156424514 RSA 2013
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 08-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Keywords: Transfer pricing
• Section: 143(3); 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.1564/PN/2013 (A.Y: 2005-06) DY.CIT (CIB)-1, PUNE APPELLANT VS. SHRI NANDKUMAR GANPATDAS SHAH 773-1, NAMDEV MANDIR AREA, INDAPUR, PUNE 413106 PAN: ADXPS1173J RESPONDENT ASSESSEE BY : SHRI MAHAVIR JAIN DEPARTMENT BY : SHRI P.S. NAIK DATE OF HEARING: 20.08.2014 DATE OF ORDER : 28.08.2014 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-CENTRAL, PUN E, DATED 15.05.2013 FOR A.Y. 2005-06 ON THE FOLLOWING GROUND S. 1. THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS CONTRARY TO THE LAW AND FACTS AND CIRC UMSTANCES OF THE CASE. 2. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN NOT REFERRING TO THE DECISIO N OF THE HON'BLE ITAT'S ORDER IN THE CASE OF SMT PUSHADEVI S . DOSHI FOR THE A.Y. 2005-06. (ITA NO.1603/PN/2011 DTD.13-2 - 2013) ON THE SAME GROUND OF ISSUES. 3. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN ANNULLING THE ASSESSMENT ON THE GROUND OF LACK OF JURISDICTION. 4. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THE FACT TH AT THE SCRUTINY PROCEEDINGS WERE INITIATED BY THE DY. CIT( CIB)-1, 2 ITA NO.1564/PN/13 SHRI NANDKUMAR GANPATDAS SHAH PUNE, ON THE BASIS OF NON PAN AIR DATA AND WAS VERY MUCH WITHIN HIS JURISDICTION. 5. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THE FACT TH AT THE ASSESSMENT WAS COMPLETED UNDER SECTION 144 OF THE I . T. ACT IN THE ABSENCE OF ANY RESPONSE FROM THE ASSESSEE IN SPITE OF VALID SERVICE OF NOTICES ISSUED UNDER SECTION 143(2 ) & 142(1) OF THE I. T. ACT, 1961. 6. THE LD. COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND IN LAW IN ADMITTING ADDITIONAL EVIDENC E IN THE FORM OF THE ASSESSEE'S SUBMISSION WITH REGARD TO TH E PAN OF THE ASSESSEE, THE SOURCES OF INVESTMENTS AND DECIDI NG THE ISSUE WITHOUT REMANDING THE MATTER TO THE ASSESSING OFFICER, THEREBY VIOLATING RULE 46A OF THE I. T. RULES , 196 2. 7. FOR THESE AND SUCH ABOVE OTHER GROUNDS AS MAY BE URGED AT THE TIME OF THE HEARING, THE ORDER OF THE LEARNED CIT (APPEALS) MAY BE VACATED AND THAT OF THE ASSESS ING OFFICER BE RESTORED. 8. THE APPELLANT CRAVES, LEAVE TO ADD, AMEND, ALTER OR DELETE ANY OF THE ABOVE GROUND OF APPEAL DURING THE COURSE OF THE APPELLANT PROCEEDINGS BEFORE THE ITAT. 2. THE ASSESSEE IS AN INDIVIDUAL. AS PER THE INFOR MATION RECEIVED VIA ANNUAL INFORMATION RETURN U/S.285BA OF THE ACT, DURING THE RELEVANT PREVIOUS YEAR (PY), THE ASSESSE E MADE DEPOSITS IN CASH IN HIS SAVINGS BANK ACCOUNT AGGREG ATING TO RS.11,23,390/-. ON THE BASIS OF THIS INFORMATION, A NOTICE U/S.142(1) OF I.T ACT WAS ISSUED TO THE ASSESSEE BY THE ASSESSING OFFICER CALLING FOR THE RETURN OF INCOME FOR AY 200 5-06. SINCE THE ASSESSEE FAILED TO COMPLY WITH THE NOTICE OF THE AS SESSING OFFICER, THE ASSESSING OFFICER PASSED AN ORDER EX-PARTE U/S. 144 TREATING THE ENTIRE DEPOSIT OF RS.11,23,390/- AS UNEXPLAINED . 2.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF THE ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) HAS DECIDED THE ISSUE BY OBSERVING AS UNDER: 3 ITA NO.1564/PN/13 SHRI NANDKUMAR GANPATDAS SHAH 5. I HAVE CAREFULLY PERUSED THE IMPUGNED ASSESSMEN T ORDER, THE STATEMENT OF FACTS AND WRITTEN SUBMISSIO NS MADE ON BEHALF OF THE APPELLANT, AS WELL AS THE VER BAL EXPLANATIONS PROVIDED BY THE LD. AR. 6. PERUSAL OF DOCUMENTS PRODUCED BY THE APPELLANT R EVEALS THAT AT THE RELEVANT TIME THE APPELLANT WAS ALREADY ASSESSED TO TAX WITH ITO WARD 5(4), PUNE WITH PAN. ADXPS1173 J. IN RESPECT OF THE PERSONS WHOSE NAMES APPEAR IN ANNUAL INFORMATION RETURN, CCIT PUNE ISSUED JURISDICTION O RDERS U/S.120 OF IT. ACT ON 1/8/2007. THE RELEVANT PORTIO N OF ORDER IS REPRODUCED BELOW:- 'ORDER UNDER SECTION 120 OF THE INCOME TAX ACT, 1961 IN EXERCISE OF POWERS CONFERRED BY SECTION 120 OF T HE INCOME TAX ACT AND INSTRUCTION NO.6/2006 DATED 1ST AUGUST, 2006, I HEREBY ORDER THAT THE ASSESSING OFFICERS WORKING UNDER THE CONTROL OF COMMISSIONER OF INCOME TAX (CIB), PUNE, AS MENTIONED BELOW SHALL ACT AS WITH 'DESIGNATED ASSES SING OFFICERS' (DAOS) AND SHALL EXERCISE CONCURRENT JURI SDICTION WITH RESPECT TO THE ASSESSEE FALLING WITHIN THE JUR ISDICTION OF COMMISSIONERS OF INCOME TAX I, II, III, IV, V PUNE COMMISSIONERS OF INCOME TAX COMMISSIONER OF INCOME TAX- I AND II, NASIK; COMMISSIONER OF INCOME TAX AURANGA BAD; COMMISSIONER OF INCOME TAX-I AND II & III, THANE, COMMISSIONER OF INCOME TAX (CENTRAL), PUNE AND DIRE CTOR OF INCOME TAX (TRANSFER PRICING), PUNE WHOSE NAMES APP EAR IN ANNUAL INFORMATION RETURN (ARI) DATA RELATING TO PU NE REGION AND WHOSE PAN ARE NOT MENTIONED AIR DATA. S.NO ASSESSING OFFICER I. INCOME TAX OFFICER (HQ)(CIB), PUNE 2. INCOME TAX OFFICER (CIB) - 3, PUNE 2. THE DAOS SHALL HAVE CONCURRENT JURISDICTION OVER THE CASES FOR ISSUING NOTICES U/S 142(1). IN CASE OF NO N-EXISTING ASSESSEES (WHO HAVE NEVER FILED A RETURN OF INCOME EARLIER) THE DAO SHALL ASSESS THE CASE U/S 143(3) OR 144, AS THE CASE MAY BE. IN ALL OTHER CASES THE DAOS SHALL TRAN SFER THE AIR INFORMATION TO THE JURISDICTIONAL ASSESSING OFF ICERS (JAO). 3. THIS ORDER IS WITH IMMEDIATE EFFECT AND UNTIL FURTHER ORDER. 4 ITA NO.1564/PN/13 SHRI NANDKUMAR GANPATDAS SHAH SD/- CHIEF COMMISSIONER OF INCOME TAX, PUNE. ' 7 . THEREFORE, IN VIEW OF THE JURISDICTION ORDER DT. 1/ 8/2007, DCIT (CIB)-1, PUNE DID NOT HAVE JURISDICTION TO ASS ESS THE APPELLANT U/S. 143(3) OR 144 OF I.T.ACT AS THE APPE LLANT WAS NOT A NON-EXISTING ASSESSEE (WHO HAS NEVER FILED A RETURN OF INCOME EARLIER). UNDER THE CIRCUMSTANCES, DCIT (CIB )-1 PASSED ORDER U/S. 144 OF I.T.ACT DT.24/12/2007 WAS WITHOUT JURISDICTION AND, THEREFORE, THE ASSESSMENT IS HEREBY ANNULLED. THE APPEAL IS, THEREFORE, ALLOWED. 2.2 THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF O F THE REVENUE AND IN SUM AND SUBSTANCE REQUESTED TO SET A SIDE THE ORDER OF CIT(A) AND TO THAT OF ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, THE LEARNED AUTHORIZED REPRESENTATI VE HAS SUPPORTED THE ORDER OF CIT(A). 2.3 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT AT THE RELEVANT POINT OF TIME, THE ASSESSEE WAS ALREADY ASSESSED TO TAX WITH ITO WARD 5(4), PUN E WITH PAN. ADXPS1173J. IN RESPECT OF THE PERSONS WHOSE NAMES APPEAR IN ANNUAL INFORMATION RETURN, CCIT PUNE ISSUED JURISDI CTION ORDERS U/S.120 OF IT. ACT ON 01.08.2007 AS DISCUSSED ABOVE . 2.4 IN VIEW OF JURISDICTION ORDER DATED 01.08.2007, THE DCIT (CIB)-1, PUNE DID NOT HAVE JURISDICTION TO ASSESS T HE ASSESSEE U/S. 143(3) OR 144 OF I.T.ACT AS THE ASSESSEE WAS N OT A NON- EXISTING ASSESSEE (WHO HAS NEVER FILED A RETURN OF INCOME EARLIER). UNDER THE CIRCUMSTANCES, CIT(A) RIGHTLY HELD THAT T HE DCIT (CIB)- 1 PASSED ORDER U/S. 144 OF THE ACT DT. 24.12.2007 W AS WITHOUT JURISDICTION AND, THEREFORE, THE ASSESSMENT WAS ANN ULLED. THIS VIEW IS FORTIFIED BY THE DECISION OF ITAT, PUNE IN THE CASE OF ITO VS. SHRI CHANDRABHAN V. KHALADE IN ITA NO.928/PN/20 13, 5 ITA NO.1564/PN/13 SHRI NANDKUMAR GANPATDAS SHAH WHEREIN THE SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER: 4. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD, WE ARE NOT INCLINED TO INTERFERE WITH TH E FINDING OF CIT(A) WHO ON PERUSAL OF THE MATERIAL AVAILABLE ON RECORD OBSERVED THAT THE ASSESSEE WAS ALREADY ASSESSED TO TAX WITH ITO, WARD 8(2), PUNE WITH PAN ALCPK2993F. UNDER TH E CIRCUMSTANCES, ITO, CIB-3, PUNE DID NOT HAVE JURISD ICTION TO ASSESS THE ASSESSEE. IN RESPECT OF THE PERSONS WHOSE NAME APPEARS IN ANNUAL INFORMATION RETURN, CCIT, PU NE ISSUED JURISDICTION ORDERS U/S.120 OF I.T ACT ON 01 .08.2007. THE RELEVANT PORTION OF THE ORDER READS AS UNDER: 'ORDER UNDER SECTION 120 OF THE INCOME TAX ACT, 1961 IN EXERCISE OF POWERS CONFERRED BY SECTION 120 OF T HE INCOME TAX ACT AND INSTRUCTION NO.6/2006 DATED 1ST AUGUST, 2006, I HEREBY ORDER THAT THE ASSESSING OFFICERS WORKING UNDER THE CONTROL OF COMMISSIONER OF INCOME TAX (CIB), PUNE, AS MENTIONED BELOW SHALL AC T AS WITH 'DESIGNATED ASSESSING OFFICERS' (DAOS) AND SHALL EXERCISE CONCURRENT JURISDICTION WITH RESPECT TO THE ASSESSEE FALLING WITHIN THE JURISDICTION OF COMMISSIONERS OF INCOME TAX I, II, III, IV, V PUNE COMMISSIONERS OF INCOME TAX COMMISSIONER OF INCOME TAX-I AND II, NASIK; COMMISSIONER OF INCOME TAX AURANGABAD; COMMISSIONER OF INCOME TAX-I AND II & III, THANE, COMMISSIONER OF INCOME TAX (CENTRAL), PUNE AND DIRECTOR OF INCOME TAX (TRANSFER PRICING), PUNE WHOSE NAMES APPEAR IN ANNUAL INFORMATION RETURN (ARI) DATA RELATING TO PUNE REGION AND WHOSE PAN ARE NOT MENTIONED AIR DATA. 2. THE DAOS SHALL HAVE CONCURRENT JURISDICTION OVER THE CASES FOR ISSUING NOTICES U/S 142(1). IN CASE O F NON-EXISTING ASSESSEES (WHO HAVE NEVER FILED A RETU RN OF INCOME EARLIER) THE DAO SHALL ASSESS THE CASE U/ S 143(3) OR 144, AS THE CASE MAY BE. IN ALL OTHER CAS ES S.NO ASSESSING OFFICER 1. INCOME TAX OFFICER (HQ)(CIB), PUNE 2. INCOME TAX OFFICER (CIB) - 3, PUNE 6 ITA NO.1564/PN/13 SHRI NANDKUMAR GANPATDAS SHAH THE DAOS SHALL TRANSFER THE AIR INFORMATION TO THE JURISDICTIONAL ASSESSING OFFICERS (JAO). 3. THIS ORDER IS WITH IMMEDIATE EFFECT AND UNTIL FURTHER ORDER. SD/- CHIEF COMMISSIONER OF INCOME TAX, PUNE.' 4.1 IN VIEW OF JURISDICTION ORDER DATED 01.08.2007, ITO, CIB-3, PUNE DID NOT HAVE JURISDICTION TO THE ASSESS U/S.143(3) OR 144 OF THE ACT AS THE ASSESSEE WAS NO T A NON- EXISTING ASSESSEE (WHO HAS NEVER FILED RETURN OF IN COME EARLIER). UNDER THE CIRCUMSTANCES, THE ORDER PASSE D U/S.144 OF THE ACT DATED 31.12.2007 BY ITO, CIB-3 W AS RIGHTLY HELD WITHOUT JURISDICTION BY CIT(A). ACCOR DINGLY, ASSESSMENT WAS ANNULLED BY HIM. THIS REASONED FACT UAL LEGAL FINDING WITH REGARD TO ANNULLING THE ASSESSME NT NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. THIS VIEW IS FORTIFIED BY THE COORDINATE BENCH IN THE CA SE OF MRS. SAYALI (APARNA) S. PATIL (SUPRA) AS DISCUSSED ABOVE . 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. 2.5 NOTHING CONTRARY HAS BEEN BROUGHT TO OUR KNOWLE DGE ON BEHALF OF THE REVENUE. IN VIEW OF ABOVE, THE REASO NED FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE BECAUSE THE ASSESSEE WAS NOT A NON-EXISTING ASSESSEE AND HE WAS ASSESSED WITH ITO, WARD 5(4), PUNE WITH PAN.ADXPS1173J. WE UPHOLD THE SAME. 3.S IN THE RESULT, APPEAL FILED BY THE REVENUE IS D ISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF AUGUST, 2014. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 28 TH AUGUST, 2014 GCVSR 7 ITA NO.1564/PN/13 SHRI NANDKUMAR GANPATDAS SHAH COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-CENTRAL, PUNE 4) THE CIT-CENTRAL, PUNE 5) THE DR, B BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE