ACIT, CHENNAI V. KDH Properties Private Limited, CHENNAI

ITA 1629/CHNY/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7762 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 22-11-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 15-07-2015
• Court: TRIBUNAL
• Assessee Lawyers: G P MEHTA
• Keywords: Assessment record
• Section: 143(3)

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ I.T.A.NO. 1 549/MDS/2015 / ASSESSMENT YEAR :20 11 - 12 M/S. KDH PROPERTIES PVT. LTD., KGN TOWERS, II FLOOR, NEW NO. 62, ETHIRAJ SALAI, EGMORE, CHENNAI 600 005. [PAN: A A CCK6839N ] VS. THE DEPUTY COMMISSIONER OF INCOM E TAX , COMPANY CIRCLE I I(4), CHENNAI 600 034 . ( / APPELLANT ) ( / RESPONDENT ) ./ I.T.A.NO. 1 629 /MDS/201 5 / ASSESSMENT YEAR :20 11 - 12 THE ASSISTANT COMMISSIONER OF INCOME TAX, C ORPORATE CIRCLE 4 ( 2 ), CHENNAI 600 0 34. VS. M/S. KDH PROPERTIES PVT. LTD., KGN TOWERS, II FLOOR, NEW NO. 62, ETHIRAJ SALAI, EGMORE, CHENNAI 600 005. ( / APPELLANT ) ( / RESPONDENT ) ASSESSEE BY : SHRI G.P. ME H T A, C.A. DEPARTMENT BY : MS. VIJAYALAKSHMI, CIT - DR / DATE OF HEARING : 1 6 .1 1 .201 6 / DATE OF P RONOUNCEMENT : 28 .1 2 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THESE CROSS APPEALS FILED BY THE ASSESSEE AS WELL AS THE REVENUE ARE DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 8, CHENNAI, DATED 23.03.2015 FOR THE ASSESSMENT YEAR 2011 - 12. THE ONLY I.T.A. NO S . 1 549 & 1 629 /M/ 15 2 EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE CHALLENGES VALIDITY OF ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE INCO ME TAX ACT, 1961 [ ACT IN SHORT]. ON THE OTHER HAND, THE REVENUE HAS RAISED THE EFFECTIVE GROUND WITH REGARD TO VALUING THE CLOSING STOCK. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS PROPERTY DEVELOPER AND FILED ITS RETURN OF INCOME ON 29.09.20 11 DECLARING A LOSS OF .2,67,65,783/ - . THE CASE OF THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 10.01.2012. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND A NOTICE UNDER SECTION 143(2) OF THE ACT DATED 17.05.2012 WAS ISSUED AND SERV ED ON THE ASSESSEE ON 29.05.2012. IN RESPONSE TO THE NOTICE ISSUED BY THE ASSESSING OFFICER, SHRI G.P. MEHTA, CA AND AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ALONG WITH SHRI RAJAT DUPTA, DIRECTOR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND FILED THE DE TAILS AS CALLED FOR. DURING THE FINANCIAL YEAR 2007 - 08 TO 2012 - 13, THE ASSESSEE HAS CONSTRUCTED A BUILDING KNOWN AS MOOLCHAND TOWERS [NOW KNOWN AS KGN TOWERS] LOCATED AT 31/32 C - IN - C ROAD, CHENNAI. THE PROFIT AND LOSS ACCOUNTS SUBMITTED BY THE ASSESSEE WER E EXAMINED BY THE ASSESSING OFFICER. 3. A SURVEY WAS UNDERTAKEN ON 25.04.2012 AND VARIOUS FACTS HAVE BEEN UNEARTHED DURING THE SURVEY AND SUBSEQUENT ENQUIRES. BY WAY OF SWORN STATEMENT, SHRI N. MURUGAPPAN, EXECUTIVE DIRECTOR OF THE ASSESSEE COMPANY HAS C ONFIRMED VARIOUS DETAILS AS UNEARNED DURING THE COURSE OF I.T.A. NO S . 1 549 & 1 629 /M/ 15 3 SURVEY. THE FACTS DECLARED IN THE SWORN STATEMENT WERE DULY RECONFIRMED BY SHRI MURUGAPPAN ON 14.05.2012. AFTER CONSIDERING THE SWORN STATEMENT OF SHRI MURUGAPPAN, ED OF THE ASSESSEE COMPANY, VERIFI CATION OF PROFIT AND LOSS ACCOUNT, VARIOUS QUERIES BY THE DEPARTMENT AND REPLY TO THE QUERIES FILED BY THE ASSESSEE, THE ASSESSING OFFICER HAS ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT .13,85,06,980/ - AND COMPLETED THE ASSESSMENT UNDER SECTION 143(3) O F THE ACT ON 30.04.2013. 4. THROUGH ITS AR, THE ASSESSEE HAS VIDE LETTER DATED 11.01.2013, BY CHALLENGING THE VALIDITY OF ISSUANCE OF NOTICE DATED 17.05.2012 UNDER SECTION 143(2) OF THE ACT AND STATED TO HAVE BEEN SERVED ON THE ASSESSEE ON 29.05.2012, T HE ASSESSEE HAS FURNISHED VARIOUS DETAILS/EXPLANATION IN RESPONSE TO LETTER DATED 24.12.2012. SINCE THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND MADE ADDITION OF .16,52,72,766/ - , THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND CHALLENGED THE VALIDITY OF ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT . 5. ON APPEAL, THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DISMISSE D THE GROUND RAISED BY THE ASSESSEE. 6. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. I.T.A. NO S . 1 549 & 1 629 /M/ 15 4 7. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN ASSESSEE S APPEAL, THE MAIN CONTENTION OF THE ASSESSEE IS THAT THE NOTICE UNDER SECTION 143(2) OF THE ACT DATED 17.05.2012 WAS SERVED ON THE ASSESSEE ON 29.05.2012 FIXING THE CASE ON 25.05.2012 AT 11.15 AM. THUS, ACCORDING TO THE ASSESSEE, THE NOTICE WAS RECEIVED BY THE ASSESSEE AFTER THE DATE OF FIXING THE CASE FOR HEARING. AS SUCH, THE ASSESSMENT IS BAD IN LAW AND TO BE QUASHED. WE HAVE CAREFULLY GONE THROUGH THE COPY OF THE NOTICE UNDER SECTION 143(2) OF THE ACT, WHICH IS PRODUCED AS UNDER: I.T.A. NO S . 1 549 & 1 629 /M/ 15 5 8. FROM THE ABOVE, IT IS NOT CLEAR AS TO WHETH ER THE NOTICE DATED 17.05.2012 WAS ISSUED ON 29.05.2012 AND IT HAS TO BE VERIFIED FROM THE ORIGINAL RECORDS AS MAY BE AVAILABLE WITH THE ASSESSING OFFICER. IF THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS DULY SERVED ON THE ASSESSEE BEFORE THE DATE OF HEA RING FIXED, THEN IT IS TO BE CONSIDERED VALID NOTICE AND THE ASSESSMENT SHALL BE HELD AS VALID. ON THE OTHER HAND, IF THE NOTICE IS SERVED TO THE ASSESSEE AFTER THE DATE FIXED FOR HEARING, THE ASSESSMENT SUBSEQUENTLY FRAMED IS LIABLE TO BE QUASHED. HENCE, THE ASSESSING OFFICER IS DIRECTED TO VERIFY WITH ASSESSMENT RECORDS AS TO WHETHER THE NOTICE DATED 17.05.2012 WAS SERVED BEFORE THE DATE OF HEARING I.E. 25.05.2012. 9. FURTHER, IT IS NEEDLESS TO MENTIONED HERE THAT IF THE ASSESSEE HAS DULY COOPERATED WI TH THE DEPARTMENT DURING THE COURSE OF ASSESSMENT, THE PROVISIONS OF SECTION 292BB OF THE ACT WILL COME TO THE ASSISTANCE OF THE DEPARTMENT AND THE ASSESSEE IS PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDINGS OR INQUIRY UNDER THE ACT THAT THE NOTICE WAS NOT SERVED UPON HIM. WITH THESE OBSERVATIONS, WE REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO VERIFY WHETHER NOTICE UNDER SECTION 143(2) OF THE ACT WAS SERVE ON THE ASSESSEE BEFORE 25.05.2012 OR NOT AND DECIDE THE ISSUE ACCORDINGLY. SIN CE WE HAVE REMITTED THE LEGAL ISSUE TO THE FILE OF THE I.T.A. NO S . 1 549 & 1 629 /M/ 15 6 ASSESSING OFFICER, AT THIS STAGE, WE ARE REFRAINING FROM GOING TO DECIDE REVENUE S APPEAL. 10 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPE AL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 28 TH DECEMBER , 20 16 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 28 . 1 2 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.