Shri Vilas Tukaram Satpute, Nagpur V. PRINCIPAL COMMISSIONER F INCOME TAX-II, Nagpur

ITA 170/NAG/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4531 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGNES P THOMAS
• Assessee Lawyers: MANOJ MORIYANI
• Section: 40A(3); 143(3); 147

Judgement Text

1 , INCOME TAX APPELLATE TRIBUNAL,NAGPUR BENCH . . , BEFORE S/SH. D T GARASIYA,JUDICIAL MEMBER & RAJENDRA,ACCOUNTANT MEMBER ./ ITA/170/NAG/2015 , / ASSESSMENT YEAR:2008 - 09. SHRI VILAS TUKARAM SATPUTE, C/O MANOJ MORYANI,, ADVOCATE, 1 ST FLOOR, SUDAMA BHAVAN, SUT MARKET, GANDHI BAGH, NAGPUR. VS. PR.CIT - 2 ,NAGPUR. ( / APPELLANT) ( / RESPONDENT) REVENUE BY: SMT.AGNES P THOMAS ASSESSEE BY: SHRI MANOJ MORIYANI / DATE OF HEARING: 02.09.2016 / DATE OF PRONOUNCEMENT: 02.09.2016 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA A.M. - CHALLENGING THE ORDER,DATED 19/03/2015 OF THE PR.CIT - 2,NAGPUR THE ASSESSEE HAS FILED THE PRESENT APPEAL.THE EFFECTIVE GROUND OF APPEAL DEALS WITH ORDER PASSED BY THE PCIT U/S.263 OF THE ACT. FACTS OF THE CASE: 2.THE ASSESSEE FILED THE RETURN OF INCOME ON 30.09.2008 DECLARING INCOME AT RS. 7.49 LAKHS.IT WAS PROCESSED U/S.143(1)OF THE ACT ON 23.09.2009.ASSESSMENT WAS REOPENED ON 11/06/2012,AS PER THE PROVISIONS OF SECTION 147 OF THE ACT.THE AO DROPPED THE RE - ASSESSMENT PROCEEDINGS,VIDE HI S ORDER DTD.30.11.2012.HE AGAIN ISSUED A NOTICE U/S.148 OF THE ACT ON 06.03.2013.HE FINALIZED THE ASSESSMENT U/S. 143 (3)R.W.S.147 OF THE ACT,ON 20.12.2013,DETERMINING THE INCOME OF THE ASSESSEE AT RS.62.40 LAKHS.THE AO HAD MADE CERTAIN ADDITIONS TO THE IN COME OF THE ASSESSEE,WHO FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA). VIDE HIS ORDER DATED 14 - 11 - 2014 HE ALLOWED THE APPEAL FILED BY THE ASSESSEE.ON 05.02. 2015,THE PCIT ISSUED A NOTICE U/S.263 OF THE ACT,HOLDING THAT THE ORDER OF THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 2 3 .IN THE NOTICE ISSUED FOR INITIATING REVISIONARY PROCEEDINGS,THE PCIT MENTIONED THAT PAYMENT,AMOUNTING TO RS.39.26 LAKHS WAS MADE IN CONTRAVENTION OF THE PROVISIONS OF SECTION 40(A3)OF THE ACT,THAT PAY MENT OF RS.26.84 LAKHS WAS MADE WITHOUT MAKING TDS,THAT ASSESSEE HAD PAID RS.25 LAKHS IN CASH FOR PURCHASING A PLOT OF LAND AT TARODE. THE ASSESSE MADE ELABORATE SUBMISSIONS BEFORE THE PCIT. AFTER CONSIDERING THE SAME,SHE HELD THAT THERE WAS OMISSION ON PA RT OF THE ASSESSEE IN DROPPING THE PROCEEDINGS U/S 147, THAT THE ASSESSEE HAD MADE PAYMENT OF RS.39.26 LAKHS CONTRAVENING THE PROVISIONS OF SECTION 40A(3), THAT RS.26,84,401/ - WERE LIABLE TO BE DISALLOWED U/S 40(A)(IA) OF THE ACT, THAT THE PAYMENT MADE FOR LAND, AMOUNTING TO RS.25 LAKHS HAD TO BE DISALLOWED U/S 40A(3) OF THE ACT, THAT THE FAA HAD NOT DISCUSSED ANY OF THE ISSUE MENTIONED IN THE 263 NOTICE, THAT HE HAD CANCELLED THE ORDER ON TECHNICAL GROUND, THAT THE ORDER PASSED BY THE AO ON 30 - 11 - 2012 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. SHE DIRECTED THE AO TO VERIFY THE APPLICABILITY OF PROVISIONS OF SECTION 40A(3) AND 40(A)(IA) OF THE ACT. 4. BEFORE US THE AUTHORISED REPRESENTATIVE (AR) STATED WHILE PASSING THE ORDER U/S 143(3) R.W.S1 47 ON 20 - 123 - 2013, THE AO HAD MADE ENQUIRIES AB OUT ALL THE THREE ISSUES MENTIONED BY THE PCIT,THAT HE HAD MADE ADDITIONS OF RS.51.87 LAKHS (RS.26. 84 LAKHS U/S 40(A)(IA), + RS.3.05 LAKHS U/S 40(A)(IA) + RS.25 LAKHS U/S 40A(3) OF THE ACT),THAT ASSESSEE HAD ALSO FILED DETAILS OF RS.39.26 LAKHS REGARDING THIS ALLOWANCE OF CASH PAYMENT U/S 40A(3) OF THE ACT, IT WAS NOT A CASE FIT FOR INVOKING THE PROVISIONS OF SECTION 263. THE DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE PCIT. 5. WE HAVE HEARD TH E RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE AO HAD REOPENED THE ASSESSMENT TWICE,THAT HE HAD DROPPED THE PROCEEDINGS U./S 147 OF THE ACT,THAT WHILE COMPLETING THE ASSESSMENT DURING THE 3 SECOND ROUND HE HAD MADE ADDITIONS ON ACCO UNT OF CONTRAVENTION OF NON - PAYMENT OF TDS AS WELL AS FOR CONTRAVENTION OF SECTION 40A(3) OF THE ACT. THEREFORE, IN OUR OPINION THE PCIT WAS NOT JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 263 AS FAR AS THESE TWO ISSUES ARE CONCERNED. WE FIND THAT THE ASSESSEE WAS DIRECTED BY THE AO TO FILE DETAILS ABOUT RS.39.26 LAKHS.THE ASSESSEE HAD FURNISHED THE NECESSARY DETAILS AND THE AO TOOK AN INFORMED DECISION IN THAT REGARD. THE PCIT HAS NOT MENTIONED AS HOW THE ORDER OF THE AO WAS ERRONEOUS AS WELL AS PREJUD ICIAL TO THE INTEREST OF THE REVENUE REGARDING THE AMOUNT IN QUESTION. THE PCIT CANNOT EXPECT THE AO TO FOLLOW A PARTICULAR LINE WHILE FINALIZING THE ASSESSMENT. THEREFORE, WE ARE OF THE OPINION THAT THE PCIT HAD WRONGLY INVOKED THE REVISIONARY POWERS. IN OUR OPINION THE ORDER OF THE AO IS IN ACCORDANCE WITH LAW AND, THEREFORE, IS NOT ERRONEOUS. THEREFORE, REVERSING THE ORDER OF THE PCIT WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. AS A RESU LT APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND SEPTEMBER,2016. 02 , 2016 SD/ SD/ ( . . / D T GARASIYA ) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER NAGPUR; DATED :0 2 . 0 9 . 2016. / COPY OF THE ORDER FORWARDED TO : 1.APPELLANT / 2. RESPONDENT / 3.THE CONCERNED CIT(A)/ , 4.THE CONCERNED CIT / 5.DR NAGPUR BENCH, ITAT, / , , . . . 6.GUA RD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT,NAGPUR.