M/s Nemchand Jain & Sons, Siliguri V. D.C.I.T.Cir - 1,Siliguri, Siliguri

ITA 1874/KOL/2012

• Counselvise Citation: 187423514 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 20-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI JAIN
• Assessee Lawyers: SAJJAN KUMAR TULSIYAN
• Keywords: Depreciation; Period of limitation; Assessment record
• Section: 144

Judgement Text

I.T.A. NO. 1874/KOL./2012 ASSESSMENT YEAR: 2008-2009 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA BEFORE SHRI SHAMIM YAHYA (ACCOUNTANT MEMBER), AND SHRI GEORGE MATHAN (JUDICIAL MEMBER) I.T.A. NO. 1874/KOL./ 2012 ASSESSMENT YEAR : 2008-2009 M/S. NEMCHAND JAIN & SONS,................... ....APPELLANT NAYA BAZAR, SILIGURI [PAN : AAEFN 4627 L] -VS.- DEPUTY COMMISSIONER OF INCOME TAX,................. .RESPONDENT CIRCLE-1, SILIGURI-734 005 APPEARANCES BY: SHRI SAJJAN KUMAR TULSIYAN, ADVOCATE, FOR THE ASSESSEE SHRI RAVI JAIN, CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : SEPTEMBER 10, 20 14 DATE OF PRONOUNCING THE ORDER : SEPTEMBER 12, 2014 O R D E R PER GEORGE MATHAN: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), SILIGURI IN A PPEAL NO. 67/CIT(A)/SIG/2010-11 DATED 19.10.2012 FOR THE ASSE SSMENT YEAR 2008- 09. 2. SHRI SAJJAN KUMAR TULSIYAN, ADVOCATE, REPRESENTE D ON BEHALF OF THE ASSESSEE AND SHRI RAVI JAIN, CIT (D.R.), REPRESENTE D ON BEHALF OF THE REVENUE. 3. IN THE ASSESSEES APPEAL, ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS:- (1) THE ORDER PASSED BY THE LOWER AUTHORITIES ARE ARBITRARY, ERRONEOUS, INVALID AND BAD IN LAW. I.T.A. NO. 1874/KOL./2012 ASSESSMENT YEAR: 2008-2009 PAGE 2 OF 6 (2)(A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN GIVING A FACTUALLY WRONG FI NDING THAT THE NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961, ALLEGEDLY ISSUED ON 29.09.2009, HAD BEEN SERVED ON THE AUTHORIZED SIGNATORY ON BEHALF OF THE APPELLANT FIR M ON 30.09.2009. (2)(B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN HOLDING THAT THE DATE OF S ERVICE OF THE NOTICE U/S. 143(2) OF THE ACT SHOULD BE CONSID ERED AS THE DATE OF ISSUE OF THE NOTICE UNDER CONSIDERATIO N AND IN THAT WAY IN HOLDING THAT THE NOTICE U/S 143(2) SENT THROUGH SPEED POST ON 30.09.2009 BUT ACTUALLY SERVE D ON THE APPELLANT FIRM ON 03.10.2009 ONLY, SHOULD BE DE EMED TO HAVE BEEN SERVED ON 30.09.2009, I.E. WITH THE ST ATUTORY TIME LIMIT. (2)(C) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN HOLDING THAT THE NOTICE U/S 143(2) OF THE ACT, HAD BEEN SERVED WITHIN THE STATUTORY TI ME LIMIT AND IN THAT VIEW, IN REJECTING THE GROUND TAKEN BY THE APPELLANT AGAINST THE VALIDITY OF THE IMPUGNED ASSESSMENT. (3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN HOLDING THAT THE EX-PARTE ASSES SMENT MADE U/S 144 OF THE ACT, WAS VALID AND JUSTIFIED AL SO. (4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN CONFIRMING THE FOLLOWING ADDITI ONS:- (A) UNSECURED LOAN - RS.37,67,878/- (B) SUNDRY CREDITORS - RS.33,89,548/- (C) ADVANCE FROM BUYERS- RS.1,01,98,697/- _______________________ TOTAL RS.1,73,56,123/- __________________________ (5) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN CONFIRMING THE FOLLOWING DISALL OWANCES OUT OF VARIOUS EXPENSES CLAIMED IN THE P & L A/C.:- (A) BANK INTEREST - RS.9,14,454/- (B) DEPRECIATION - RS. 87,137/- (C) INTEREST PAID TO LOAN CREDITORS- RS.2,21,195/- (D) FREIGHT CHARGES RS. 72,392/- _____________________ RS.12,95,178/- ______________________ I.T.A. NO. 1874/KOL./2012 ASSESSMENT YEAR: 2008-2009 PAGE 3 OF 6 4. AT THE TIME OF HEARING, IT WAS THE SUBMISSION BY THE LD. A.R. ON BEHALF OF THE ASSESSEE THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR ON 30.09.2008. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAD ISSUED A NOTICE UNDER SEC TION 133(2) ON 29.09.2009 BUT THE SAME WAS SERVED ON THE ASSESSEE ONLY ON 03.10.2009. IT WAS THE SUBMISSION THAT IN THE ASSESSMENT ORDER THE ASSESSING OFFICER MENTIONS OF AN ACKNOWLEDGMENT SLIP FOR SERVICE OF T HE NOTICE BEARING THE SIGNATURE OF THE AUTHORIZED SIGNATORY AND THE FIRM S SEAL IS ON RECORD. LD. A.R. DREW OUR ATTENTION TO PAGE 23 OF THE PAPER BOO K, WHICH WAS A COPY OF THE TEAR OF ACKNOWLEDGMENT. IT WAS THE SUBMISSION T HAT THE SIGNATURE WAS NOT THAT ANY OF THE AUTHORIZED SIGNATORY OF THE ASS ESSEE. IT WAS THE FURTHER SUBMISSION THAT NO NOTICE UNDER SECTION 143 (2) WAS SERVED ON THE ASSESSEE VIDE THE TEAR OF ACKNOWLEDGMENT. IT WAS TH E SUBMISSION THAT 143(2) NOTICE WAS SERVED ON THE ASSESSEE THROUGH SP EED POST WHICH WAS POSTED FROM THE POST OFFICE AT SILIGURI ON 30.09.20 09 AS IS PROVED BY THE SPEED POST ACKNOWLEDGMENT ON THE COVER THROUGH WHIC H THE SAID NOTICE WAS SERVED. IT WAS THE SUBMISSION THAT THE NOTICE W AS POSTED ON 30.09.2009 AT 2-18 P.M. AND THE SAME WAS MOVED THRO UGH THE LOCAL POST OFFICE ON 01.10.2009 AND WAS SERVED ON THE ASSESSEE ON 03.10.2009. IT WAS THE SUBMISSION THAT THE NOTICE HAVING BEEN SERV ED BEYOND THE PERIOD OF LIMITATION ENDING ON 30.09.2009, ASSESSMENT AS P ASSED AS A CONSEQUENCE OF THE SAID NOTICE WAS LIABLE TO BE QUA SHED. HE PLACED RELIANCE ON THE DECISION OF THE HONBLE CALCUTTA HI GH COURT IN THE CASE OF AMAL KUMAR GHOSH REPORTED IN 105 DTR 351, WHEREIN T HE HONBLE JURISDICTIONAL HIGH COURT HAS CATEGORICALLY HELD TH AT THE INSTRUCTIONS OF THE CBDT MORE SO THE CIRCULARS ARE BINDING UPON THE DEPARTMENT. IT WAS THE SUBMISSION THAT THE CIRCULAR IN NO. 621 DATED 1 9.12.1991 SPECIFIED THAT NO NOTICE UNDER SECTION 143(2) CAN BE SERVED O N THE ASSESSEE AFTER THE EXPIRY OF THE FINANCIAL YEAR IN WHICH THE RETUR N IS FURNISHED OR THE EXPIRY OF TWELVE MONTHS FROM THE END OF THE MONTH I N WHICH THE RETURN IS FURNISHED, WHICHEVER IS LATER. IT WAS THE SUBMISSIO N THAT THE RETURN HAVING BEEN FILED ON 30.09.2008, THE TIME FOR SERVI CE OF THE NOTICE UNDER I.T.A. NO. 1874/KOL./2012 ASSESSMENT YEAR: 2008-2009 PAGE 4 OF 6 SECTION 143(2) EXPIRED ON 30.09.2009 AND CONSEQUENT LY THE NOTICE SERVED ON THE ASSESSEE WAS LIABLE TO BE TREATED AS INVALID . HE ALSO PLACED RELIANCE ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT I N THE CASE OF MAXIMA SYSTEMS LTD. REPORTED IN (2012) 344 ITR 204 (GUJ.), WHEREIN THE HONBLE GUJARAT HIGH COURT HAS CATEGORICALLY HELD THAT THE NOTICE UNDER SECTION 143(2) HAVING BEEN SERVED AFTER THE EXPIRY OF TWELV E MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN WAS FURNISHED, ASS ESSING OFFICER HAD NO JURISDICTION TO FRAME THE ASSESSMENT AND THE TRIBUN AL WAS JUSTIFIED IN HOLDING THAT THE ASSESSMENT ORDER FRAMED BY THE ASS ESSING OFFICER WAS INVALID. IT WAS THE SUBMISSION THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS LIABLE TO BE QUASHED. ON MERI TS, IT WAS THE SUBMISSION THAT IN THE ASSESSMENT THE ASSESSING OFF ICER HAS WITHOUT CONSIDERING THE SUBMISSIONS OF THE ASSESSEE MADE AN ARBITRARY ADDITION IN RESPECT OF THE UNSECURED LOAN, SUNDRY CREDITORS AND ADVANCE FROM BUYERS AS SPECIFIED IN THE BALANCE-SHEET AND FROM PROFIT & LOSS A/C. THE ASSESSING OFFICER DISALLOWED THE BANK INTEREST, DEP RECIATION, INTEREST PAID TO LOAN CREDITORS AS ALSO THE FREIGHT CHARGES. IT WAS THE SUBMISSION THAT THE ADDITION AS MADE BY THE ASSESSING OFFICER WITHOUT DOING ANY VERIFICATION WAS BAD IN LAW. 5. IN REPLY, LD. CIT (D.R.) SUBMITTED THAT IN PAGES 7 & 8 OF THE ORDER OF THE LD. CIT(APPEALS), THE LD. CIT(APPEALS) HAS CONS IDERED THE FACT THAT THE NOTICE HAS BEEN SERVED BY HAND. LD. CIT(D.R.) SUBMI TTED THAT THE ASSESSMENT ORDER WAS PASSED ON ACCOUNT OF NON-COMPL IANCE BY THE ASSESSEE. HE VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT(APPEALS). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE ASSESSMENT ORDER SHOWS THAT THE ASSESSEE HAS RAISED THE ISSUE THAT THE NOTICE UNDER SECTION 143(2) HAS NOT BEEN SERVED ON THE ASSESSEE WITHIN THE SPECIFIED TIME. THE ASSESSING OFFICER IN HIS AS SESSMENT ORDER STATES THAT THE NOTICE UNDER SECTION 143(2) HAS BEEN SERVE D ON THE ASSESSEE BY HAND AND THE SAME WAS DULY ACKNOWLEDGED BY THE AUTH ORIZED SIGNATORY ON I.T.A. NO. 1874/KOL./2012 ASSESSMENT YEAR: 2008-2009 PAGE 5 OF 6 30.09.2010. A PERUSAL OF THE SAID TEAR OF ACKNOWLED GMENT SLIP WHICH WAS SHOWN AT PAGE 23 OF THE PAPER BOOK SHOWS THAT THERE IS NO SIGNATURE TO IDENTIFY AS TO WHO HAS SERVED THE SAID NOTICE. THE REVENUE HAS ALSO NOT BEEN ABLE TO PLACE BEFORE US ANY RECORD OR REGISTER TO PROVE THE HAND DELIVERY OF THE SAID NOTICE. ADMITTEDLY WHEN A NOTI CE UNDER SECTION 143(2) IS PREPARED, THERE IS THE ORIGINAL AND THE C ARBON COPY. THE ORIGINAL IS SENT TO THE ASSESSEE. THE ASSESSEE HAS PLACED BE FORE US THE COPY OF THE ORIGINAL 143(2) NOTICE SERVED ON THE ASSESSEE THROU GH THE POSTAL AUTHORITIES THROUGH SPEED POST. IF THIS NOTICE HAS BEEN SERVED THROUGH THE SPEED POST, WHERE IS THE SECOND COPY WHICH COULD HA VE BEEN SERVED THROUGH THE TEAR OF ACKNOWLEDGMENT, BECAUSE THERE I S ONLY ONE ORIGINAL AND ONE COPY WHICH IS IN THE ASSESSMENT RECORDS. TH IS CLEARLY SHOWS THAT NO NOTICE UNDER SECTION 143(2) HAS BEEN SERVED ON T HE ASSESSEE ON 30.09.2009 THROUGH THE TEAR OF ACKNOWLEDGMENT SLIP. THE SERVICE OF THE NOTICE UNDER SECTION 143(2) WOULD HAVE TO BE ACCEPT ED AS MENTIONED IN THE POSTAL RECORDS AS 03.10.2009. CONSEQUENTLY AS T HE NOTICE HAS BEEN SERVED BEYOND THE SPECIFIED PERIOD OF TWELVE MONTHS , RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MAXIMA SYSTEMS LTD. AS ALSO THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT OF CALCUTTA IN THE CASE OF AMAL KUMAR GH OSH, THE NOTICE ISSUED UNDER SECTION 143(2) IS HELD TO BE INVALID AND THE CONSEQUENTIAL ASSESSMENT ALSO AS INVALID. THE WORDINGS OF SECTIO N 143(2) USED THE WORDS SERVED ON THE ASSESSEE NOT ISSUED. CONSEQUE NTLY AS THE NOTICE HAS NOT BEEN SERVED WITHIN THE SPECIFIED TIME AS PROVID ED IN THE SECTION, AS ALSO THE CIRCULAR ISSUED BY THE CBDT, THE ASSESSMEN T ORDER AS A CONSEQUENCE TO THE NOTICE SERVED UNDER SECTION 143( 2) BEYOND THE PRESCRIBED TIME STANDS QUASHED. 7. EVEN ON MERITS, IT IS NOTICED THAT THE ASSESSING OFFICER HAS BLINDLY DISALLOWED THE FIGURES FROM THE BALANCE SHEET AND T HE PROFIT & LOSS ACCOUNT WITHOUT GIVING ANY SPECIFIED REASON. THE AS SESSEE HAS SPECIFICALLY VIDE A LETTER DATED 16.12.2010 SERVED ON 22.12.2010 INTIMATED THAT THE I.T.A. NO. 1874/KOL./2012 ASSESSMENT YEAR: 2008-2009 PAGE 6 OF 6 NOTICE UNDER SECTION 143(2) HAD BEEN SERVED BEYOND THE PRESCRIBED TIME. STILL THE ASSESSING OFFICER HAD PROCEEDED WITH THE ASSESSMENT FULLY KNOWING THAT THE ASSESSMENT WOULD GET QUASHED. AS N O REASONS HAVE BEEN GIVEN BY THE ASSESSING OFFICER FOR DISALLOWING THE VARIOUS FIGURES IN THE BALANCE-SHEET AND THE EXPENSES CLAIMED IN THE PROFI T & LOSS A/C, WE ARE OF THE VIEW THAT THE ADDITIONS ARE UNSUSTAINABLE AN D THE SAME STANDS DELETED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH SEPTEMBER, 2014. SD/- SD/- SHAMIM YAHYA GEORGE MATHAN (ACCOUNTANT MEMBER) (JU DICIAL MEMBER) KOLKATA, THE 12 TH DAY OF SEPTEMBER, 2014 COPIES TO : (1) M/S. NEMCHAND JAIN & SONS, NAYA BAZAR, SILIGURI (2) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1, SILIGURI-734 005 (3) COMMISSIONER OF INCOME-TAX (APPEALS) (4) COMMISSIONER OF INCOME TAX (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.