M/S PROTECTION PLUS PHARMACEUTICALS PVT. LTD , JAMMU V. INCOME TAX OFFICER WARD-1(2), JAMMU

ITA 189/ASR/2019

AI Insights

The case involves M/s Protection Plus Pharmaceuticals Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals), Jammu, which upheld the Income Tax Officer's (ITO) assessment. The ITO had estimated the assessee's sales and profit for the assessment year 2011-12 based on a survey operation under section 133A of the Income Tax Act, 1961, which was conducted at the assessee's business premises. The assessee contested the jurisdiction of the ITO and the estimation of sales and profits, arguing that the registered office was in Mumbai and not in Jammu, and that the sales were arbitrarily estimated. The CIT(A) upheld the ITO's decision, leading to the assessee's appeal to the Income Tax Appellate Tribunal, Amritsar.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 114892 (ITAT-AMRITSAR)
• Duration Of Justice: 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-12-2022
• Assessment Year: misc
• Appeal Filed On: 17-12-2022
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard; Set aside
• Section: 143(3); 133A; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No.189/Asr/2019 Assessment Year: 2011-12 M/s Protection Plus Pharmaceuticals Pvt. Ltd. 126, A/D Gandhi Nagar Jammu. [PAN: AADCP6567D] (Appellant) Vs. ITO, Ward-1 (2), Jammu. (Respondent) Appellant by Sh.Ajay Sawhney, CA. Respondent by Sh. RadheyShyam Jaiswal, Sr. DR Date of Hearing 12.12.2022 Date of Pronouncement 21.12.2022 ORDER Per:Anikesh Banerjee, JM: The instant appeal of the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals),Jammu, [in brevity the ‘CIT (A)’] bearing appeal No.129/14-15, date of order 20.08.2018, the order passed u/s 250 (6) of the Income Tax Act 1961, [in brevity the Act] for A.Y. 2011-12.The impugned order was emanated from the order of the ld. Income Tax Officer Ward-1(2), Jammu, (in brevity the AO) order passed u/s 143(3) of the Act date of order 27.03.2014. I.T.A. No.189/Asr/2019 Assessment Year: 2011-12 2 2. Brief facts of the case are that the survey operation u/s 133A was conducted by the revenue in the business premises of the assessee. The assessee had not filed return of income,during the assessment for relevant assessment year. The assessee has claimed that the registered office of the company at Mumbai. But considering this survey jurisdiction the assessment was completed by the jurisdictional AO, Jammu. The issue was challenged before the ld. CIT(A) and the ld. CIT(A) has passed a speaking order in this legal issue. Further in factual position the assessee made sales for a quarter amount of Rs. 436,422/-. Considering this sale as base the ld. AO had calculated full year sales amount of Rs. 17,45,688/-. The profit was calculated @20% on estimated sale amount to Rs. 17,45,688/- which is worked out amount to Rs.349,138/-. The said amount was added back with the total income of the assessee. Being dissatisfied on the order of ld. AO, assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) upheld the order of the ld. AO. Being aggrieved assessee filed an appeal before us. 3. The ld. Counsel had filed an adjournment application before the bench. The assessee was called for hearing. The ld. Counsel for assessee appeared before the bench, requested to withdraw the application & argued the matter in favour of the assessee. The ld. Counsel for the assessee has argued on the factual position and mentioned that the revenue had arbitrarily estimated sale amount to Rs. 17,45,688/- and applied net profit @20% on sale. I.T.A. No.189/Asr/2019 Assessment Year: 2011-12 3 4. The ld. Sr. DR relied on the order of the ld. CIT(A) and pointed out in the relevant para 5.2 which is extracted as below: “5.2 1 have carefully considered the material on record as well as the observations of theAssessing Officer as made by him in the assessment order while assuming the jurisdiction in this case and thereafter making the impugned addition to the total income of the assessee company by estimation the sales and net profit. I am also of the opinion that the assessee company could not demonstrate that as to how the Assessing Officer has incorrectly assumed jurisdiction in its case and has made the impugned addition. No documentary evidence has also been brought on record which will prove that the jurisdiction of the case of the assessee company lies somewhere else. Even no documentary evidence with regard to filing of income tax returns somewhere else has been brought on record. Under such circumstances, the action of the Assessing Officer in assuming jurisdiction in this case and thereafter making the impugned addition to the total income of the assessee company cannot be said to be unjustified. Having said so, the action of the Assessing Officer in assessing the income of the assessee company at Rs.4,56,753/- after validly assuming jurisdiction in this case is, therefore, upheld. In the result, the grounds No. 1 to 5 of appeal taken by the assessee company are dismissed.” 5. We heard the rival submission and relied on the documents available in the record. The turnover was estimated by the ld. AO Rs.17,45,688/- but assessee on I.T.A. No.189/Asr/2019 Assessment Year: 2011-12 4 the other side claimed that the paid interest to SIDCO loan amount to Rs.21,73,185/- and also the depreciation of purchase and expenses was not considered. The ld. AO has estimated the net profit @20%and completed assessment u/s 144. The net profit @20% on estimated sale amount of Rs.17,45,688/- which is worked out to Rs.3,49,138/-. In factual position, it is correct that the assessee had neither filed its return. Bu as per assessee the books of accounts was impounded by the revenue during survey. The estimation of sale has no basis. It is just a multiplication factor. The calculation of Net profit is in higher side as per the ld. Counsel. The grievance of the assessee is that the all the notices of the CIT(A) were served on factory premises & the said factory is closed. No one was there to communicate the service of letter. Here, the assessee should get another fair chance of hearing for his argument before the lower authority. In our considered view the assessee’s appeal is remanded back to the ld. CIT(A) for further adjudication de novo on factual issue. Needless to say, that the CIT(A) shall provide proper and adequate opportunity of being heard to the assessee in set aside proceedings. The evidence/explanation submitted by assessee in its defence shall be admitted by the ld. CIT(A) and adjudicate in accordance with law.In the ground the assessee has challenged the legal issue, jurisdiction of the AO which was not pressed by the Counsel during the hearing. The ld. CIT(A) already had taken care the legal issue in the order & passed a speaking order about the jurisdiction AO. I.T.A. No.189/Asr/2019 Assessment Year: 2011-12 5 We are not intervening the order of the ld. CIT(A) related jurisdiction of AO for passing the order. We ordered accordingly with terms indicated above. 6. In the result, the appeal of the assessee bearing ITA No. 189/Asr/2019 is allowed for statistical purpose. Order pronounced in the open court on 21.12.2022 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE ) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By Order