Shifa Hospitals, Tirunelveli V. ITO, Tirunelveli

ITA 1736/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7895 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-12-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 09-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C YAMUNA
• Assessee Lawyers: T VASUDEVAN
• Keywords: Income from undisclosed sources
• Section: 143(3); 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' # . $ , & ' BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICI AL MEMBER ./ I.T.A.NO.1735 TO 1737/MDS/2016 ( / ASSESSMENT YEARS: 2010-11 TO 2012-13) M/S. SHIFA HOSPITALS, 82, KAILASAPURAM MIDDLE STREET, TIRUNELVELI-627 001. VS THE INCOME TAX OFFICER, WARD-I(4), TIRUNELVELI. PAN:AAUFS1477M ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. T.VASUDEVAN, ADVOCATE /RESPONDENT BY : MS. C.YAMUNA, JCIT /DATE OF HEARING : 5 TH DECEMBER, 2016 /DATE OF PRONOUNCEMENT : 14 TH DECEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THESE THREE APPEALS ARE FILED BY THE ASSESSEE AGGRIEVED BY THE SEPARATE ORDERS OF THE LEARNED PRI NCIPAL COMMISSIONER OF INCOME TAX, MADURAI ALL DATED 07. 03.2016 IN C.NO.114/14,15 & 16/PCIT-2/MDU/2015-16 PASSED UN DER SECTION 263 OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS APPEALS, HOWEVER, THE CRUX OF THE COMMON ISSUE IN A LL THESE THREE APPEALS IS AS FOLLOWS:- THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS ERRED IN SETTING ASIDE THE ASSESSMENT ORDER DATED 28.03.2014 FOR THE ASSESSMENT YEARS 2010-11 TO 2012-13 PASSED BY THE LEARNED 2 ITA NO.1735 TO 1737/MDS/2016 ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT WITH A DIRECTION TO REDO THE ASSESSMENT IN ACCORDANCE WITH LAW AS IT IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF RUNNING HOSPITAL FILED I TS RETURNS OF INCOME FOR THE RELEVANT ASSESSMENT YEARS. INITIALLY , ALL THE RETURNS WERE PROCESSED UNDER SECTION 143(1) OF THE ACT. THEREAFTER, A SURVEY WAS CONDUCTED IN THE CASE OF T HE ASSESSEE DUE TO WHICH THE ASSESSMENTS WERE REOPENED FOR THE ASSESSMENT YEARS 2010-11 & 2012-13. THEREAFTER THE ASSESSMENT FOR THE ALL THE THREE ASSESSMENT YEARS W ERE COMPLETED UNDER SECTION 143(3) OF THE ACT. IN THE 2 63 PROCEEDINGS, THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX OPINED THAT SINCE THE ASSESSEES STAFF SMT. E.F ATHIMA HAD STATED IN THE SURVEY PROCEEDINGS, THE ASSESSEE TO HAVE MAINTAINED TWO SETS OF BOOKS, WHICH WAS NOT TAKEN N OTE OFF BY THE LEARNED ASSESSING OFFICER IN HIS ASSESSMENT PROCEEDINGS, THE ORDER OF THE LD.A.O IS ERRONEOUS. HE FURTHER OPINED THAT THE LEARNED ASSESSING OFFICER HAD ALSO NOT TAKEN NOTE OF THE STATEMENT OF THE MANAGING PARTNER WHERE IN HE 3 ITA NO.1735 TO 1737/MDS/2016 STATED THAT HE CONSTRUCTED A RESIDENTIAL BUILDING F ROM THE UNACCOUNTED INCOME OF THE ASSESSEE FIRM. THE LEARNE D PRINCIPAL COMMISSIONER OF INCOME TAX FURTHER OPINED THAT THE CONSULTATION FEES TO BE PAID TO THE DOCTORS WHI CH WAS RECORDED IN THE SECOND SET OF THE ASSESSEES BOOKS WAS ALSO NOT CONSIDERED BY THE LEARNED ASSESSING OFFICER. TH EREFORE, HE INVOKED THE PROVISIONS OF SECTION 263 OF THE ACT AND REMITTED THE MATTER BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR DE NOVO CONSIDERATION SETTING ASIDE THE ORDER OF THE LEARNED ASSESSING OFFICER. 4. BEFORE US, THE LEARNED ASSESSING OFFICER VEHEMEN TLY ARGUED STATING THAT THE LEARNED ASSESSING OFFICER H AD CONSIDERED ALL THESE ISSUES AND AFTER VERIFYING THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND TAKING DUE NOTE OF THE SURVEY PROCEEDINGS HAS COMPLETED THE ASSESSMENTS UNDER SEC TION 143(3) OF THE ACT. HE FURTHER ARGUED STATING THAT T HE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS SET ASIDE THE ORDER OF THE LEARNED ASSESSING OFFICER AND REMITTED THE MATER BACK TO HIS FILE FOR DE NOVO CONSIDERATION ONLY BAS ED ON PRESUMPTION AND ASSUMPTION. HENCE, HE PLEADED THAT THE 4 ITA NO.1735 TO 1737/MDS/2016 ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCO ME TAX UNDER SECTION 263 OF THE ACT MAY BE QUASHED. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND STOUTLY ARGUED SUPPORTING THE ORDER OF THE LEA RNED PRINCIPAL COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. ON PERUSING THE O RDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX, I T IS EVIDENT THAT THE CONSTRUCTION OF THE RESIDENTIAL BU ILDING HAD ONLY STARTED DURING THE FINANCIAL YEAR 2011-12 RELE VANT TO THE ASSESSMENT YEAR 2012-13 AND IT WAS COMPLETED IN THE FINANCIAL YEAR 2015-16. FURTHER THE APPEALS BEFORE US ARE FOR THE ASSESSMENT YEARS 2010-11, 2011-12 & 2012-13. HE NCE, THE UNACCOUNTED MONEY OF THE ASSESSEE, IF ANY DIVER TED FOR THE CONSTRUCTION OF THE MANAGING PARTNERS RESIDENT IAL BUILDING, WOULD NOT FALL WITHIN THE PERIOD OF THE R ELEVANT ASSESSMENT YEARS BEFORE US. FURTHER, THE LEARNED PR INCIPAL COMMISSIONER OF INCOME TAX WAS ONLY OF THE VIEW THA T THE 5 ITA NO.1735 TO 1737/MDS/2016 SECOND SET OF BOOKS MAINTAINED BY THE ASSESSEE WAS NOT CONSIDERED BY THE LEARNED ASSESSING OFFICER WHILE F RAMING THE ASSESSMENTS. HE HAS NOT BROUGHT OUT ANY CONCRET E FINDINGS FOR ARRIVING AT SUCH CONCLUSION. HENCE, AS POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE, IT APPEAR S THAT THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS IN VOKED HIS POWERS UNDER SECTION 263 OF THE ACT BASED ON SU RMISES & CONJECTURES. THEREFORE, WE DO NOT FIND ANY MERIT IN THE ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX PASSED UNDER SECTION 263 OF THE ACT. ACCORDINGLY, WE HEREB Y QUASH THE ORDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX PASSED UNDER SECTION 263OF THE ACT FOR ALL THE THREE ASSESSMENT YEARS. 7. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSE SSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 14 TH DECEMBER, 2016 SD/- SD/- ( ' # . $ ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 14 TH DECEMBER, 2016 SOMU 6 ITA NO.1735 TO 1737/MDS/2016 *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF