ITO, Hyderabad V. M/s Chakkilam Constructions P.Ltd., Hyderabad

ITA 1612/HYD/2008

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2841 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-08-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 30-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: P MURALI MOHANA RAO
• Section: 133A; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NOS. 1612, 1613, & 1614/HYD/2008 ASSESSMENT YEARS: 2001-02, 2002-03 & 2003-04 INCOME-TAX OFFICER, APPELLANT WARD - 14(1), HYDERABAD. VS. M/S CHAKKILAM CONSTRUCTIONS PVT. LTD., RESPON DENT HYDERABAD. (PAN AABCR1371D) APPELLANT BY : SMT. AMISHA S. GUPT RESPONDENT BY : SHRI P. MURALI MOHANA RAO DATE OF HEARING : 26/03/2013 DATE OF PRONOUNCEMENT : 03 /05/2013 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THESE THREE APPEALS PREFERRED BY THE REVENUE ARE DIRECTED AGAINST A COMMON ORDER OF CIT(A)-II, HYDERABAD, DAT ED 29/08/20008 FOR ASSESSMENT YEARS 2001-02, 2002-03 & 2003-04. AS THE IDENTICAL ISSUES ARE INVOLVED IN THESE APPEA LS, THEY WERE CLUBBED AND HEARD TOGETHER, THEREFORE, A COMMON ORD ER IS PASSED FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT A SURVEY U/S 133A WAS CONDUCTED IN THE CASE OF THE ASSESSEE ON 12/02/2004 . SUBSEQUENT TO THE SURVEY, SHOW CAUSE LETTERS WERE ISSUED TO TH E ASSESSEE COMPANY SEEKING VARIOUS INFORMATION. BASED ON THE I NFORMATION SUBMITTED BY THE ASSESSEE, THE AO FOUND THAT THE AS SESSEE HAD DEFAULTED IN RESPECT OF TAX DEDUCTION AT SOURCE FOR THE FOLLOWING TYPE OF PAYMENTS MADE: ITA NO. 1612, 1613 & 1613/HYD/2008 M/S CHAKKILAM CONSTRUCTIONS PVT. LTD. 2 ASSESSMENT YEARS: 2001-02, 2002-03 AND 2003-04 A) INTEREST PAYMENT ON UNSECURED LOANS B) PAYMENT OF SALARY (AY 2001-02 ONLY) C) PAYMENT OF PROFESSIONAL FEES D) PAYMENT TO CONTRACTORS ACCORDINGLY, THE AO WORKED OUT THE DEMAND AND INTER EST PAYABLE ON ACCOUNT OF THE DEFAULTS AS ABOVE AND HAS RAISED THE FOLLOWING DEMANDS: A.Y DEMAND U/S 201(1) & 201(1A) 2001-02 RS. 6,44,036/- 2002-03 RS. 7,10,549/- 2003-04 RS. 3,54,540/- 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE C ARRIED THE MATTER IN APPEAL FOR THE SAID ASSESSMENT YEARS BEFO RE THE CIT(A). IN ADDITION TO RAISING THE NORMAL GROUNDS OF APPEAL , WHICH HAVE ARISEN OUT OF THE ASSESSMENT ORDER, THE ASSESSEE FI LED ADDITION GROUND OF APPEAL, WHICH READS AS UNDER: WHILE PASSING THE ORDER U/S 201(1) & 201(1A) FOR TH E AYS 2001-02 TO 2003-04, THE SAME CANNOT BE REOPENED AS MORE THAN FOUR YEARS HAVE ALREADY BEEN OVER AND DUE TO T HAT THE ORDER PASSED IS NOT CORRECT, NOT JUSTIFIED AND BAD IN LAW. 4. DURING THE APPELLATE HEARING, IN SUPPORT OF THE ADDITION GROUND, THE AR OF THE ASSESSEE STATED THAT VERY REC ENTY THE HONBLE HYDERABAD ITAT HAD PASSED ORDERS IN THE CAS E OF AP STATE CIVIL SUPPLIES CORPORATION STATING THAT ORDERS U/S 201(1) & 201(1A) CANNOT BE PASSED BEYOND THE PERIOD OF 4 YEA RS FROM THE END OF THE FINANCIAL YEAR. THE AR HAD ALSO STATED T HAT FILING OF ADDITIONAL GROUND HAD BECOME NECESSARY SINCE THE DE CISION OF THE HONBLE TRIBUNAL HAS COME JUST RECENTLY AND IT WAS NOT THERE AT THE TIME OF FILING OF APPEALS. HE, THEREFORE, REQUE STED THAT THE ADDITIONAL GROUND MAY PLEASE BE ADMITTED SINCE THEY ARE VITAL FOR ITA NO. 1612, 1613 & 1613/HYD/2008 M/S CHAKKILAM CONSTRUCTIONS PVT. LTD. 3 DECIDING THE APPEALS. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HELD THAT THE ASSESSEE HAD NO OCCASION TO HAVE THE BENEFIT OF THE SAID DECISION A T THE TIME OF THE FILING OF THE APPEAL AND CONSIDERING THE FACT S TATED BY THE ASSESSEE THAT THE OMISSION TO TAKE THE GROUND OF AP PEAL BY THE ASSESSEE WAS NOT WILLFUL OR UNREASONABLE, THEREFORE , THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR ALL THE THREE YEA RS WAS ADMITTED FOR ADJUDICATION. 5. THE CIT(A) HELD AS FOLLOWS: 3.0 FIRST I TAKE UP THE ADDITIONAL GROUNDS RAISED B Y THE APPELLANT. THE APPELLANT HAD CONTENDED THAT THE ORD ER U/S 201(1) & 201(1A) ARE BAD IN LAW SINCE THE SAME CANN OT BE PASSED BEYOND A PERIOD 4 YEARS. AS STATED EARLIER T HE APPELLANT WHILE FILING THE ADDITIONAL GROUND HAS RE LIED ON THE DECISION OF ITAT, HYDERABAD A BENCH IN THE CASE OF AP STATE CIVIL SUPPLIES CORPORATION IN ITA NOS. 1117 TO 1122 /HYD/07 FOR ASSESSMENT YEARS 1999-2000 TO 2004-05. I HAVE G ONE THROUGH THE SAID DECISION PASSED BY THE ITA A BENCH VIDE ORDER DATED 01/08/2008. THESE SIX APPEALS WERE FILE D BY THE ASSESSEE AGAINST THE ORDERS PASSED BY ME DATED 26/09/2007. BEFORE ME THE APPELLANT HAD TAKEN A GRO UND THAT THE ORDERS DATED 30/11/2006 PASSED BY THE AO U /S 201(1) AND 201(1A) FOR THE ASSESSMENT YEARS 1998-99 TO 2001-02 ARE BARRED BY LIMITATION HAVING BEEN PASSED BEYOND A REASONABLE PERIOD OF FOUR YEARS. BEFORE ME THE SA ID APPELLANT HAD RELIED ON THE DECISION OF ITAT, MUMBA I BENCH IN THE CASE OF SBI VS. ACIT [2007] 106 ITD 589, WHE REIN, IT WAS HELD THAT THE ORDERS PASSED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT FINANCIAL YEAR W ERE TIME BARRED AND ACCORDINGLY QUASHED. HOWEVER, I HAD HELD THAT THE DELAY IN PASSING THE ORDERS WAS NOT ATTRIBUTABL E TO THE AO BUT TO THE APPELLANT AND HENCE THE ORDERS WERE N OT BARRED BY LIMITATION. OTHERWISE ALSO, THERE IS NO C LEAR CUT PROVISION IN THE IT ACT ON LIMITATION IN PASSING OR DER U/S 201(1) AND 201(1A). AGAINST, MY ORDER, THE ASSESSEE HAD FILED AN APPEAL BEFORE THE ITAT. HONBLE ITAT A B ENCH HAS ANALYZED THE DECISION BY THE ITAT MUMBAI IN THE CAS E OF SBI AND HAVE ALSO GONE THROUGH THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NHK JAPAN BROADCA STING CORPORATION [2008] 217 CTR 392. IN THE AFORESAID CA SE THE HONBLE DELHI HIGH COURT AT PAGE 394 HAS HELD (HEAD NOTE) ITA NO. 1612, 1613 & 1613/HYD/2008 M/S CHAKKILAM CONSTRUCTIONS PVT. LTD. 4 . INITIATION OF PROCEEDINGS U/S 201(1) AGAINST THE AS SESSEE IN RESPECT OF AY 1990-91 WAS BARRED BY LIMITATION H AVING BEEN INITIATED BEYOND A REASONABLE PERIOD OF TIME O F 4 YEARS. RELYING ON THE DECISION OF ITAT, MUMBAI A ND ALSO THE DECISION OF DELHI HIGH COURT, THE HONBLE ITAT A BENCH AT PARA 13 OF THE ORDER IN THE CASE OF AP STATE CIV IL SUPLLIES CORPORATION HAS HELD AS UNDER: 13. THUS, IN OUR VIEW THE ORDERS PASSED BY THE AO O N 30/11/2006 IN THE INSTANT CASE FOR THE FYS 1998-99 TO 2001-02 RELEVANT TO AY 1999-00 TO 2002-03 ARE BARRE D BY LIMITATION HAVING BEEN PASSED BEYOND A REASONAB LE PERIOD OF TIME OF 4 YEARS AND ACCORDINGLY THE COMMO N GROUNDS NO.1 TO 3 TAKEN BY THE ASSESSEE FOR THE ASSESSMENT YEARS 1999-00 TO 2002-03 ARE ALLOWED. 6. THE CIT(A), THEREFORE, HELD THAT IN THE APPEALS UNDER CONSIDERATION, THE ORDERS U/S 201(1) AND 201(1A) FO R THE FY 2000-01 TO 2002-03 TO THE ASSESSMENT YEARS 2001-02 TO 2003-04 WERE PASSED ON 28/02/2008 I.E. BEYOND A PERIOD OF 4 YEARS FROM THE END OF THE RESPECTIVE FINANCIAL YEARS, FOLLOWI NG THE DECISION OF THE ITAT IN AP STATE CIVIL SUPPLIES CORPORATION (SUPRA), THE AFORESAID THREE ORDERS U/S 201(1) ARE BARRED BY LIM ITATION AND THE SAME ARE LIABLE TO THE CANCELLED. HE ACCORDINGLY CA NCELLED THE ORDERS PASSED BY THE AO U/S 201(1) AND 201(1A) FOR THREE YEARS UNDER CONSIDERATION AND CONSEQUENTIALLY THE DEMANDS RAISED WERE DELETED. 7. AGGRIEVED, BY THE ORDER OF THE CIT(A), THE REVEN UE IS IN APPEAL BEFORE US FOR ALL THE THREE ASSESSMENT YEARS UNDER CONSIDERATION AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL, WHICH ARE COMMON IN THE THREE ASSESSMENT YEARS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ORDER OF THE LEARNED CIT(A) IS NOT ACCEPTABLE BOTH ON FACTS AND IN LAW. 2. THE LEARNED CIT(A) ERRED IN CANCELLING THE ORDER S PASSED U/S 201(1) & 201(1A). ITA NO. 1612, 1613 & 1613/HYD/2008 M/S CHAKKILAM CONSTRUCTIONS PVT. LTD. 5 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE CIT(A)-II ERRED IN NOT FOLLOWING THE DECISION OF TH AI AIRWAYS INTERNATIONAL PUBLIC CO. LTD. VS. ACIT [2005] 2 SOT 389 (DEL.) 4. THE LEARNED CIT(A) SHOULD HAVE APPRECIATED THAT NO TIME LIMIT WAS PRESCRIBED EITHER FOR INITIATION OR FOR C OMPLETION OF PROCEEDINGS U/S 201(1) & 201(1A) OF THE IT ACT. THE RE ARE VARIOUS CASE LAWS WHICH SUPPORT THE CONTENTION OF T HE DEPARTMENT. REFERENCE MAY BE DRAWN TO CIT VS. TIRCH UR CO- OP. BANK LTD., [2003] 184 CTR (KER.), SECRETARY SUL TAN BATTERY CO-OP HOUSING SOCIETY LTD., VS. CIT [2003] 181 CTR (KER) 219, ITAT DECISION IN THE CASE OF GUJARAT AMB UJA CEMENTS VS. DCIT [2005] 2 SOT 784 (MUMBAI.) 5. THE RELIANCE PLACED BY THE CIT(A) ON THE DECISIO N OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NHK JAPAN BROADCASTING CORPORATION [2008] 217 CTR (DELHI) 392 IS NOT APPLICABLE IN THIS CASE AS THE INITIATION OF PROCEE DINGS U/S 201(1) & 201(1A) ARE WITHIN THE PERIOD OF FOUR YEAR S FROM THE END OF THE RELEVANT FINANCIAL YEARS. 6. THE HONBLE SUPREME COURT IN THE CASE OF SMT. TARULATHA SYAM VS. CIT 1977 CTR (SC 275) HAS COMMEN TED THAT THE AUTHORITIES CANNOT READ ANY FOREIGN PROPOS ITIONS IN THE STATUTORY PROVISIONS OF THE ENACTMENT, MORE SO WHEN THE STATUTORY PROPOSITION IS MORE CLEAR AND UNAMBIGUOUS . 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AU THORITIES BELOW. BEFORE US, THE LEARNED COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVE RED BY THE DECISION OF THE JURISDICTIONAL TRIBUNAL IN THE CASE OF AP STATE CIVIL SUPPLIERS CORPORATION LTD., IN ITA NO. 1117 TO 1122 /HYD/07 VIDE ORDER DATED 28/02/2008. WE FIND THAT, AS NOTED BY T HE CIT(A), IN THE APPEALS UNDER CONSIDERATION, THE ORDERS U/S 201 (1) AND 201(1A) FOR THE FY 2000-01 TO 2002-03 TO THE ASSESS MENT YEARS 2001-02 TO 2003-04 WERE PASSED ON 28/02/2008 I.E. B EYOND A PERIOD OF 4 YEARS FROM THE END OF THE RESPECTIVE FI NANCIAL YEARS. THEREFORE, THE ISSUE UNDER CONSIDERATION IS SQUAREL Y COVERED BY THE DECISION OF AP STATE CIVIL SUPPLIERS CORPORATIO N LTD. (SUPRA). ITA NO. 1612, 1613 & 1613/HYD/2008 M/S CHAKKILAM CONSTRUCTIONS PVT. LTD. 6 WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE CIT(A) IN CANCELLING THE ORDERS PASSED BY THE AO U/S 201(1 ) AND 201(1A) AND DELETING THE DEMANDS RAISED CONSEQUENTIALLY. AC CORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) PASSED IN ALL THE TH REE YEARS UNDER CONSIDERATION AND DISMISS THE GROUNDS OF APPEAL OF THE REVENUE IN THIS REGARD. 9. IN THE RESULT, ALL THE THREE APPEALS UNDER CONSI DERATION, ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 3 RD MAY, 2013. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGH AVAN) ACCOUNTANT MEMBER JUDICIAL MEMBE R HYDERABAD, DATED: 3 RD MAY, 2013. KV COPY TO:- 1) ITO,WARD 14(1), 4B, IT TOWERS, AC GUARDS, HYDERABAD. 2) CHAKKILAM CONSTRUCTIONS PVT. LTD., 6-3-883/9, PUNJAGUTTA CROSS ROAD, HYDERABAD. 3) CIT(A)-II, HYDERABAD 4) CIT(TDS), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD.