ITO, Keonjhar Ward, Keonjhar V. Zonal Mining & Loading Contractors, Keonjhar

ITA 171/CTK/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3991 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-11-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 14-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J K LENKA
• Assessee Lawyers: B R
• Keywords: Reopening of assessment; Additional evidence; Tangible material; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 145(3); 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM . / ITA NO. 171 /CTK/20 1 8 ( / A SSESSMENT Y EAR : 20 09 - 20 10 ) ITO, KEONJHAR WARD, KEONJHAR V S. M/S ZONAL MINING & LOADING CONTRACTORS, AT/PO : JURUDI, JODA, KEONJHAR - 758034 PAN NO. : A AAFZ 2372 G ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI J.K.LENKA , DR /ASSESSEE BY : SHRI B.R. PANDA, ADVOCATE / DATE OF HEARING : 02 / 1 1 /20 20 / DATE OF PRONOUNCEMENT : 03 / 1 1 /20 20 / O R D E R PER L.P.SAHU, AM : TH IS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 12.02.2018 , PASSED BY THE CIT (A) , CUTTACK FOR THE ASSESSMENT YEAR 20 09 - 20 10 , ON THE FOLLOWING GROUNDS OF APPEAL : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) IS NOT JUSTIFIED IN LAW IN DELETING THE ADDITION OF RS.1,78,95,056/ - MADE BY THE A.O ON ACCOUNT OF SUPPRESSION OF GROSS RECEIPTS BY ADMITTING ADDITIONAL/FRESH EVIDENCE OF THE ASSESEE, WITHOUT ALLOWING AN OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE SAME AND THEREBY VIOLATING THE PROVISIONS CONTAINED IN RULE 46A OFTHEL.T.RULES,1962. 2. ON T HE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN RELYING ON THE EVIDENCE PRODUCED BEFORE HIM WITH REGARD TO THE AMOUNT OF RS.1,03,25,677/ - SHOWN IN THE AUDITED BALANCE SHEET AS 'OUTSTANDING LIABILITIES' (ANNEXURE - A) DURING THE REASSESSMENT PROCEEDINGS, WHILE THE SAME WAS SHOWN UNDER A DIFFERENT NOMENCLATURE AS 'ADVANCES RECEIVED'(ANNEXURE - B) DURING APPELLATE PROCEEDINGS IN A PLAIN SHEET OF PAPER INSCRIBING THE SAME AS BALANCE SHEET; 3. ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN ACCEPTING THE AMOUNT OF RS. 65,11,261/ - ALLEGED TO ITA NO. 171 /CTK/201 8 2 HAVE BEEN RECEIVED FROM S.K. MOHANTY, PARTNER PURPORTEDLY ON THE BASIS OF AN UNSIGNED LEDGER COPY (ANNEXURE - C) OF HIS ACCOUNT, WHICH ALSO HAPPENS TO BE AN ADDITIONAL EVIDENCE ADMITTED DURING APPELLATE PROCEEDINGS IN VIOLATION OF RULE - 46A OF IT RULES. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW IN ADMITTING FRESH/ADDITIONAL EVIDENCE WITHOUT RECORDING REASONS, WH ICH IS A MANDATORY REQUIREMENT AS PER SUB - RULE (2) TO RULE 46A OF THE IT RULES. 5 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. C1T(A) IS NOT JUSTIFIED IN STATING THAT THE GROSS RECEIPTS AMOUNTING TO RS.7,92,73,352/ - IN THE BANK ACCOUNT MAINT AINED WITH BOI WAS ALREADY VERIFIED DURING THE ASSESSMENT PROCEEDINGS BY WAY OF RECONCILIATION EXERCISE WHEREAS IT IS EVIDENT FROM THE QUESTIONNAIRE DTD. 14.07.2011 ISSUED DURING ASSESSMENT PROCEEDINGS THAT THE A.O HAD PUT THE QUESTION IN RELATION TO DETAI LS OF GROSS LOADING BILLS RECEIVED OF RS.6,22,89,447/ - BUT NOT THE TOTAL DEPOSITS IN THE BANK ACCOUNT (ANNEXURE - D) 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) OUGHT TO HAVE ALLOWED A REASONABLY OPPORTUNITY TO EXAMINE THE ADDITIONAL EVIDENCE, AS MANDATED UNDER SUB - RULE (3) TO RULE 46A OF IT RULES. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME ON 29.09.2009 FOR THE ASSESSMENT YEAR 2009 - 2010 DECLARING TOTAL INCOME OF RS.28,63,450/ - THE ASSESSEE IS ENGAGED IN THE BUSINESS OF LOADING CONTRACT, THE CASE WAS SELECTED FOR SC RUTINY AND STATUTORY NOTICES WERE ISSUED TO THE ASSESSEE. THE ASSESSEE WAS ASKED TO SUBMIT CERTAIN DETAILS AND ASSESSEE FILED BUT THE AO WAS NOT SATISFIED AND REJECTED THE BOOK SOF ACCOUNTS OF THE ASSESSEE AFTER APPLYING SECTION 145(3) OF THE ACT, 1961 AND ESTIMATED 6% NET PROFIT OF THE GROSS VALUE OF RS.6,22,89,647/ - WORKS OF CONTRACT RECEIPT A ND ASSESSED TOTAL INCOME AT RS.37,37,367/ - AGAINST THE INCOME SHOWING THE RETURN OF INCOME FILED BY THE ASSESSEE. ITA NO. 171 /CTK/201 8 3 3. LATER ON THE CASE WAS REOPENED BY NOTICE ISSUING U/S.148 OF THE I.T.ACT AFTER RECORDING REASONS BY HOLDING THAT THE INCOME HAS ESCAPED AS SESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T.ACT, 1961 AND ASSESSEE WAS ASKED TO FILE RETURN OF INCOME BUT THERE WAS NO COMPLIANCE OF THE NOTICE ISSUED U/S.148 OF THE I.T.ACT, 1961. LATER ON NOTICE U/S.142(1) OF THE ACT WAS ALSO ISSUED TO THE ASSE SSEE ON VARIOUS DATES FOR FILING RETURN OF INCOME BUT THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME. FINALLY, A SHOW CAUSE LETTER DATED 05.03.2014 WAS ISSUED TO THE ASSESSEE AS TO WHY THE CASE SHALL NOT BE ASSESSED U/S.14 4 OF THE I . T ACT ON THE BASIS OF M ATERIAL AVAILABLE ON RECORD. ACCORDING L Y, THE AO COMPLETED THE ASSESSMENT AND ASSESSED TOTAL INCOME AT RS.2,16,32,423/ - 4. FEELING AGGRIEVED FROM THE ORDER OF AO PASSED U/S.144/143(3) DATED 21.03.2014, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) CHALLENGIN G THE LEGAL GROUNDS AS WELL AS ON MERITS. LD. CIT(A) DECIDED THE ISSUE ON THE BASIS OF MERITS IGNORING THE LEGAL ISSUE RAISED BY HIM WHICH IS CLEAR FROM THE SL.NO.8 OF THE GROUNDS OF APPEAL TAKEN BEFORE THE CIT(A) AND ALLOWED THE APPEAL OF THE ASSESSEE ON MERITS OF THE CASE . 5. FEELING AGGRIEVED FROM THE ORDER OF IT(A) THE REVENUE IS IN APPEAL BEFORE US. 6. LD. SR. DR SUBMITTED THAT THE ASSESSEE FILED DIFFERENT BALANCE SHEET WHICH WAS NOT SIGNED BY ANY OF THE PERSON EITHER BY THE ASSESSEE ITA NO. 171 /CTK/201 8 4 OR BY CHARTERED ACC OUNT OR ANY AUTHORIZED REPRESENTATIVE AND ANNEXURE - A WITH THE GROUNDS OF APPEAL AND ANNEXURE - BC&D H AVE ALSO BEEN ENCLOSED ALONG WITH THE GROUNDS OF APPEAL. HE ALSO SUBMITTED THAT IN ANNEXURE - A THE ASSESSEE HAS SHOWN CURRENT LIABILITIES OF RS.1,03 , 25 , 677.97 WHEREAS THE SAME FIGURES ARE APPEARING IN THE BALANCE SHEET UNDER THE ACCOUNT HEAD ADVANCES RECEIVED WHICH HAS BEEN PLACED AS ANNEXURE - B BUT IT IS UNSIGNED. THE BOTH NOMENCLATURE USED BY THE ASSESSEE ARE DIFFERENT. THE OUTSTANDING LIABILITIES IS A LIABI LITY WHICH ARE TO BE PAID AGAINST THE EXPENSES INCURRED BY THE ASSESSEE WHEREAS THE AMOUNT RECEIVED IS A LIABILITY AGAINST THE MONEY RECEIVED BY HIM BUT NOT AS A EXPENDITURE INCURRED BY THE ASSESSEE. THE CIT(A) HAS ACCEPTED THE ADDITIONAL EVIDENCES FILED B Y THE ASSESSEE WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER AND HAS ALLOWED THE APPEAL OF THE ASSESSEE WHICH IS NOT CORRECT. THE LD. CIT(A) HAS VIOLATED COMPLETELY RULES 46A OF THE I.T.RULES, HE SHOULD NOT HAVE ACCEPTED THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE WHEREAS THE AO HAS GIVEN AMPLE OPPORTUNITIES TO THE ASSESSEE FOR FILING THE EVIDENCES AT DIFFERENT DATES, THEREFORE, THE ORDER OF THE AO SHOULD BE RESTORED. THE ANNEXURE - C WHICH IS SHOWING A LEDGER ACCOUNT OF MKM CAP CURRENT ACCOUNT B UT THE CIT(A) HAS ACCEPTED IT AS A LOAN ACCOUNT OF THE PARTNERS. IF IT IS TREATED AS A LOAN TAKEN FROM THE PARTNER AND THE SAME HAS BEEN REPAID IN CASH AND BY WAY OF BANKING MODE BUT THE CIT(A) HAS ITA NO. 171 /CTK/201 8 5 IGNORED THE LOAN REPAYMENT IN CASH. HE DID NOT APPLIED THE PENALTY PROVISIONS IN CASE OF REPAYMENT OF LOAN IN CASH U/S.269T OF THE ACT. ON THIS COUNT, THE CIT(A) IS ALSO WRONG . IT IS ALSO IN THE FORM OF ADDITIONAL EVIDENCE AND ANNEXURE - D IS A QUESTIONNAIRES ISSUED BY THE AO. 7. ON THE OTHER HAND, LD AR SUPPORTED THE ORDER OF CIT(A) ON MERITS OF THE CASE. HE DREW OUR ATTENTION ON THE ADMISSION OF ADDITIONAL GROUNDS OF APPEAL FILED BY HIM BEFORE THE INCOME TAX APPELLATE TRIBUNAL, APPLICATION DATED 02.09.2019 REGARDING ADMISSION OF ADDITIONAL GROUNDS OF APPEAL UNDER RULE 27 OF THE INCOME TAX ( APPELLATE TRIBUNAL ) RULES, 1963 IN WHICH THE ASSESSEE AS CONTESTED THE LEGAL ISSUE RAISED BY HIM BEFORE THE CIT(A) WHICH HAS NOT BEEN DECIDED BY THE CIT(A) AS PER GROUNDS NO.8 TAKEN BY THE ASSESSEE BEFORE HIM AND SUBMITTED THERE IS A COMPLETE CHANGE OF OPINION. THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE BEFORE US READ AS UNDER : - A. FOR THAT, THE REOPENING OF THE ASSESSMENT BY INVOKING SEC.147/148 OF THE IT ACT IS COMPLETELY BASSED ON CHANGE OF OPINION AND REVIEW OF ASSESSMENT ORDER PASSED U/S.143(3) OF THE IT ACT, WHICH IS BAD IN LAW. THEREFORE, THE ORDER PASSED U/S.144/143(3) OF THE IT ACT SHOULD BE QUASHED IN TOTO. B FOR THAT, THERE IS NO VALID REASON ASSIGNED BY THE LD. AO IN THE PURPORTED REASONS TO BELIEVE AND THE ALLEGED REASONS RECORDED WITHOUT ANY TANGIBLE MATERIALS IS AMOUNTED TO REVEIW THE ORDER PASSED U/S.143(3) OF THE IT ACT, THUS REOPENING OF ASSESSMENT ON THE SAME ISSUE DUE TO CHANGE OF OPINION IN ABSENCE OF ANY FRESH MATERIALS IS NULL AND VOID. LD. AR OF THE ASS ESSEE FURTHER SUBMITTED THAT T HE AO WAS NOT JUSTIFIED TO REOPEN THE COMPLETED ASSESSMENT ONLY ON THE BASIS OF TOTAL ITA NO. 171 /CTK/201 8 6 DIFFERENCE OF THE BANK ACCOUNT. HE ALSO DREW OUR ATTENTION ON THE PAPER BOOKS CONTAINING PAGE NO.1 TO 67 FILED BEFORE THE ITAT ON 13.01.2020 AND REFERRED TO THE RELEVANT PAGES. 8. AFTER HEARING BOTH THE SIDES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD, WE OBSERVE FROM THE ORDER OF THE CIT(A) THAT THE GROUND N O .8 RELATES TO THE LEGAL ISSUE RAISED BY HIM BEFORE THE CIT(A) REGARDING RE OPENING OF THE COMPETED ASSESSMENT U/S.147 /148 OF THE ACT AND THE ASSESSEE HAD ALSO CHALLENGED THE MERIT OF THE CASE BEFORE THE CIT(A) BUT THE CIT(A) DECIDED THE ISSUE ON MERITS AND GAVE RELIEF TO THE ASSESSEE. THE REVENUE HAS ALSO CHALLENGED DELETION MAD E BY THE CIT(A) ON MERITS OF THE CASE BY TAKING GROUNDS OF APPEAL AS NOTED SUPRA. THE ASSESSEE HAS ALSO FILED ADDITIONAL GROUNDS OF APPEAL UNDER RULE 27 OF THE INCOME TAX ( APPELLATE TRIBUNAL ) RULES ,1963 WHICH READS AS UNDER : - RESPONDENT MAY SUPPORT ORDER ON GROUNDS DECIDED AGAINST HIM. 27. THE RESPONDENT, THOUGH HE MAY NOT HAVE APPEALED, MAY SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GROUNDS DECIDED AGAINST HIM. 9. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE ORDER PASSED BY THE CIT(A) THAT THE GROUND NO.8 HAS NOT BEEN DECIDED BY HIM. AS PER OUR CONSIDERED OPINION AT THIS STAGE, AND WITH THE CONSENT OF BOTH THE PARTIES, THE APPLICATION OF THE ASSESSEE FILED DATED 02.09.2019 IS ACCEPTED AND THE ISSUE IS SENDING BACK TO THE CIT(A) AFTER CONSIDERING ALL THE ISSUES RAISED BEFORE HIM IN T HE FORM NO.35 ORIGINAL ITA NO. 171 /CTK/201 8 7 AND THE CIT(A) IS DIRECTED TO DECIDE THE ISSUE DE NOVO AFTER GIVING REASONABLE OPPORTUNITY TO BOTH THE PARTIES AND DECIDE THE ISSUE AS PER LAW ON BOTH THE COUNTS I.E, LEGAL ISSUE INVOLVED IN THIS CASE AND ON MERITS OF THE CASE. BOTH THE PARTIES ARE ALSO DIRECTED NOT TO SEEK ANY ADJOURNMENT FOR EARLY DISPOSAL OF THE CASE. THE ASSESSEE IS ALSO GIVEN LIBERTY TO FILE THE REVISED GROUNDS OF APPEAL FOR BETTER UNDERSTANDING OF THE CASE O F THE ASSESSEE. 10 . IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 03 / 1 1 / 20 20 . SD/ - ( C.M.GARG ) SD/ - (L.P.SAHU) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK ; DATED 03 / 1 1 /20 20 PRAKASH KUMAR MISHRA, SR.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , /ITAT, CUTTACK 1. / THE APPELLANT - ITO, KEONJHAR WARD, KEONJHAR 2. / THE RESPONDENT - M/S ZONAL MINING & LOADING CONTRACTORS, AT/PO : JURUDI, JODA, KEONJHAR - 758034 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TR UE COPY//