Smt. Sunita Ajit Patil., Belgaum V. Asst. Commissioner of Income Tax, Circle-1. Belgaum., Belgaum

ITA 190/PAN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2068 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 11-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NATARAJ S
• Assessee Lawyers: SANJAY S MUDNUR
• Keywords: Unexplained cash credit; Gift; Opportunity of being heard; Condonation of delay
• Section: 143(3); 68; 69; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 190 /P A N/201 5 S.A.NO. 07/PAN/2016 (ASST. YEAR : 200 9 - 1 0 ) SMT. SUNITA AJIT PATIL, PROP. MAHANT RUBBER FACTORY, PLOT NO . 98E, HONGA INDUSTRIAL AREA , BELGAUM. VS. A CIT, CIRCLE - 1, BELGAUM PAN NO. ABVPP 299 3 D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJAY S. MUDNUR C A. DEPARTMENT BY : SHRI NATARAJ S. - DR DATE OF HEARING : 28 / 0 6 /201 6 . DATE OF PRONOUNCEMENT : 28 / 0 6 /201 6 . O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER ITA NO. 190/PAN/2015 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , BELGAUM IN APPEAL NO . 688/BGM/2010 - 11, DATED 11/02/2015 FOR THE ASSESSMENT YEAR 2006 - 07 . S.A.NO. 07/PAN/2016 IS A STAY PETITION FILED BY THE ASSESSEE IN ASSESSEES APPEAL IN ITA NO. 190/PAN/2015 . A S THE APPEAL OF THE ASSESSEE IS BEING DISPOSED OF, THE STAY PETITION FILED BY THE ASSESSEE NO MORE SURVIVES. 2 ITA NO. 190 /P A N/201 5 S.A.NO. 07/PAN/2016 2. SHRI SANJAY S. MUDNUR, CA REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI NATARAJ S., DEPARTMENTAL REPRESENTATIVE REPRESENTED ON BEHALF OF THE REVENUE . 3 . THE APPEAL FILED BY THE ASSESSEE WAS DELAYED BY 11 DAYS, FOR WHICH THE ASSESSEE HAS FILED AN APPLICATION ALONG WITH AN AFFIDAVIT FOR CONDONATION OF DEL A Y. THE R EVENUE HAS NOT OBJECTED TO THE CONDONATION OF DELAY , INSOFAR AS THE ASSESSEE HAS GIVEN JUSTIFI A BLE CAUSE FOR THE DELAY IN FILING OF THE APPEAL. CONSEQUENTLY, THE DELAY IN FILING OF THE APPEAL STANDS CONDONED AND THE APPEAL IS DISPOSED OF ON MERITS. 4 . IT WAS SUBMITTED BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ASSESSEE IS AN INDIVIDUAL, WHO WAS DOING THE BUSINESS OF MANUFACTURING OF T READ RUBBER . IT WAS THE SUBMISSION THAT ORIGINAL ASSESSMENT ORDER UNDER SECTION 143(3) CAME TO BE PASSED ON 23/08/2007 . THE SAID ORDER OF ASSESSMENT UNDER SECTION 143(3) WAS A SUBJECT MATTER OF REVISION UNDER SECTION 263 IN F NO. NIL, DATED 23/03/2010. IT WAS THE SUBMISSION THAT THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE ORDER PASSED UNDER SECTION 263 BEFORE THE INCOME TAX APPELLATE TRIBUNAL. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAD GIVEN EFFECT TO THE ORDER OF THE COMMISSIONER OF INCOME TAX PASSED UNDER SECTION 263 VIDE AN ORDER DATED 15/12/2010. IT WAS THE SUBMISSION THAT AGAINST THE ORDER DATED 15/12/2010 PASSED UNDER SECTION 143(3) READ WITH SEC. 263 , THE ASSESSEE HAD FILED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), BELGAUM, WHO VIDE HIS ORDER IN ITA NO. 688/BGM/2010 - 11, DATED 11/02/2015 , HAD DISMISSED THE ASSESSEES APPEAL . IT WAS THE SUBMISSION THAT THE ISSUES IN THE APPEAL WERE 1 ) AGAINST THE ACTION OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION MADE UNDER SECTION 68 IN RESPECT OF THE GIFTS RECEIVED BY THE ASSESSEE FROM HIS FATHER AND HIS SISTER ; 2) A GAINST THE ACTION OF THE COMMISSIONER OF INCOME TAX 3 ITA NO. 190 /P A N/201 5 S.A.NO. 07/PAN/2016 (APPEALS) IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SEC. 40(A)(IA) OF THE ACT ; 3) AGAINST THE ACTION OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRM ING THE ADDITION MADE BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SEC. 69 OF THE ACT IN RESPECT OF THE INVESTMENT IN TREAD DI E S , AND 4) AGAINST THE ACTION OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE ADDITION ON ACCOUNT OF INTEREST ON THE RD AND INTEREST ON DEPOSITS . 5. AT THIS POINT , IT WAS ASKED TO THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE AS TO HOW AN APPEAL COULD BE FILED AGAINST THE ORDER GIVING EFFECT TO THE ORDER OF THE COMMISSIONER OF INCOME TAX PASSED UNDER SECTION 263 TO THE COMMISSIONER OF INCOME TAX (APPEALS) . IT WAS SUBMITTED BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT AS THE ASSESSING OFFICER HAS PASSED THE ORDER , THE ASSESSEE HAD PREFERRED AN APPEAL TO THE COMMISSIONER OF INCOME TAX (APPEALS) . THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE WAS REQUESTED TO POINT OUT AS TO UNDER WHAT PROVISIONS, THE ASSESSING OFFICERS ORDER WAS AN APPEALABLE WHEN THE SAME WAS ONLY FOR THE PURPOSE OF GIVING EFFECT TO THE ORDER OF THE COMMISSIONER O F INCOME TAX PASSED UNDER SECTION 263 OF THE ACT. TO THIS, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE DID NOT HAVE ANY REPLY. ON A QUERY TO THE DEPARTMENTAL REPRESENTATIVE AS TO HOW THE APPEAL HAD BEEN ADJUDICATED BY THE COMMISSIONER OF INCOME TAX (APPEALS) , T HE DEPARTMENTAL REPRESENTATIVE ALSO DID NOT HAVE ANY REPLY. 6 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH SIDES. A PERUSAL OF THE ORDER PASSED UNDER SECTION 263 BY THE COMMISSIONER OF INCOME TAX , BELGAUM , DATED 23/03/2010 CLEARLY SHOWS THAT IN PARA 5.7 AT PAGE NO. 10 OF THE SAID ORDER , THE COMMISSIONER OF INCOME TAX HAS DIRECTED THE ASSESSING OFFICER TO BRING TO TAX THE AMOUNT S OF 3 LAC AND 4 ITA NO. 190 /P A N/201 5 S.A.NO. 07/PAN/2016 2,50,000/ - , BEING GIFTS RECEIVED BY THE ASSESSEE FROM H ER FATHER AND SISTER , AS UNEXPLAINED CASH CREDITS BY MODIFYING THE ORIGINAL ASSESSMENT. IN PARA 6.3 AT PAGE NO. 12, COMMISSIONER OF INCOME TAX HAS DIRECTED THE ASSESSING OFFICER TO MODIFY THE ORIGINAL ASSESSMENT AFTER OBTAINING THE SOURCE OF ADDITION T O FIXED ASSETS ETC . AND IF NO EVIDENCE IS FURNISHED, THE ENTIRE INVESTMENT IS TO BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF LAW. THIS REPRESENTING THE ADDITION MADE UNDER SECTION 69 , REPRESENTING THE INVESTMENT IN THREAD DIES. IN PARA 7.2 AT PAGE NO. 13, COMMISSIONER OF INCOME TAX HAS DIRECTED THE ASSESSING OFFICER TO MODIFY THE ORIGINAL ASSESSMENT BY BRING TO TAX THE BANK INTEREST , NOT OFFERED TO TAX BY THE ASSESSEE. IN PARA 4.5 AT PAGE NO. 6, THE COMMISSIONER OF INCOME TAX HAS DIRECTED THE ASSESSING OFFICER TO MO D I F Y THE ORIGINAL ASSESSMENT MADE BY DISALLOWING THE ENTIRE JOB WORK CHARGES PAID TO THE TWO SISTER CONCERNS UNDER SECTION 40(A)(IA) OF THE ACT AND IN PARA 8 , THE COMMISSIONER OF INCOME TAX HAS SPECIFICALL Y H E LD THAT THE ORIGINAL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCORDINGLY , THE ASSESSING OFFICER IS DIRECTED TO MODIFY THE ORIGINAL ASSESSMENT IN THE LIGHT OF THE ABOVE DISCUSSIONS . THUS, THESE ARE CLEAR DIRECTIONS GIVEN BY THE COMMISSIONER OF INCOME TAX TO THE ASSESSING OFFICER . I N SHORT, THE COMMISSIONER OF INCOME TAX AFTER INVOKING THE POWERS UNDER SECTION 263 , HAS DONE THE INVESTIGATION AND HAS COMPLETED THE ASSESSM ENT , I N THE ORDER PASSED UNDER SECTION 263 AS IS EXPECTED TO BE DONE WHILE PASSING THE ORDER UNDER SECTION 263 . THE ASSESSING OFFICER IN HIS ORDER DATED 15/12/2012 HAS ONLY GIVEN EFFECT TO THE ORDER PASSED UNDER SECTION 263 . HERE , IT WOULD BE WORTHWHILE TO EXTRACT THE PROVISIONS OF SECTION 263 (1) , WHICH READS AS UNDER: - 263. (1) THE [PRINCIPAL COMMISSIONER OR] COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSES SING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER 5 ITA NO. 190 /P A N/201 5 S.A.NO. 07/PAN/2016 MAKING OR CAUSING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. 7. A PERUSAL OF THE SAID PROVISIONS CLEARLY SHOWS THAT T HE PRINCIPAL COMMISSIONER ( OR ) COMMISSIONER ....... PASS SUCH ORDER THEREON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIFYING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT . T HE WORDS PASS SUCH ORDER THEREON AS THE CIRCUMSTA N CES OF THE CASE JUSTIFY SHOWS THAT IT IS THE ORDER UNDER SECTION 263 WHICH HAS TO BE LOOKED INTO TO FIND OUT AS TO WHAT IS THE INTENTION OF THE COMMISSIONER. IN THE PRESENT CASE, CLEARLY THERE IS NO INTENTION ON THE PART OF THE COMMISSIONER TO CANCEL THE ASSESSMENT AND DIRECT A FRESH ASSESSMENT , B UT IT IS CLEAR ONE WHERE THE ORIGINAL ASSESSMENT HAS BEEN MODIFIED BY HIM. ONCE THE PRINCIPAL COM M ISSIONER/ COMMISSIONER PASSES AN ORDER UNDER SECTION 263 CANCELLING THE AMENDMENT AND DIRECTING A FRESH ASSESSMENT , THEN THE ASSESSING OFFICER GIVES EFFECT TO SUCH ORDER UNDER SECTION 153(2A) WHICH ALSO PRESCRIBES THE TIME LIMIT , IN CASE THE PRINCIPAL COMMISSIONER/ COMMISSIONER HAS DIRECTED A FRESH ASSESSMENT. THIS IS BECAUSE THE WORDS USED IN SECTION 153 (2A) IS AN ORDER OF FRESH ASSESSMENT IN PURSUANCE TO AN ORDER UNDER SECTION 250 OR SECTION 254 OR SECTION 263 OR SECTION 264 , SETTING ASIDE OR CANCELLING AN ASSESSMENT . THUS, IF THERE IS A CANCELLATION OF AN ASSESSMENT UNDER SECTION 263 AND DIRECTION FOR FRESH ASSESSMENT , THEN IN VIEW OF THE PROVISIONS OF SECTION 153(1) READ WITH SECTION 153(2A), THE ASSESSING OFFICER HAS TO DO A FRESH ASSESSMENT AS PER THE DIRECTIONS GIVEN IN THE ORDER UNDER SECTION 263 . IF THERE IS NO CANCELLATION OF AN ASSESSMENT , BUT IT IS ONLY A MODIFICATION OF THE ASSESSMENT , THEN THE ASSESSING OFFICER ONLY GIVES EFFECT TO THE ORDER OF THE COMMISSIONER UNDER SECTION 263 AND SUCH ORDER GIV ING EFFECT TO THE ORDER UNDER SECTION 263 DOES NOT TAKE COLOUR OF AN ORDER 6 ITA NO. 190 /P A N/201 5 S.A.NO. 07/PAN/2016 UNDER SECTION 14 3 (3) OR 144 AND IT REMAINS AN ORDER UNDER SECTION 263 AND IT IS ONLY FOR THE PURPOSE OF COMPUTATION OF TOTAL INCOME AND R A ISING OF THE DEMAND THAT THE ASSESSING OFFICER DOES IN THE ORDER GIVING EFFECT TO THE ORDER UNDER SECTION 263 . A PPEALABLE ORDERS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) IS VERY SPECIFIC INSOFAR AS IT IS AN ORDER OF ASSESSMENT UNDER SECTION 143(3) OR 144 WHERE THE ASSESSEE OBJECTS TO THE AMOUNT OF INCOME ASSESSED OR TO THE AMOUNT OF TAX DETERMINED , WHICH IS APPEALABLE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) . A PERUSAL OF THE PROVISIONS OF SECTION 253 PROVIDES FOR THE APPEAL AGAINST THE ORDER UNDER SECTION 263 TO THE APPELLATE TRIBUNAL. THUS, IT CAN BE NOTICED THAT AN ORDER UNDER SECTION 26 3 CAN BE ONE WHERE THERE IS AN ENHANCEMENT OR MODIFICATION OF THE ASSESSMENT AND ONE WHERE TH E RE IS CANCELLING OF THE ASSESSMENT AND DIRECTING OF THE FRESH ASSESSMENT. WHEN IT IS AN ISSUE OF ENHANCING OR MODIF Y ING THE ASSESSMENT ORDER, THEN THE ASSESSING OFFICER ONLY GIVES EFFECT TO THE ORDER UNDER SECTION 263 BY RE - COMPUTING THE TOTAL INCOME / TOTAL TAX LIABILITY AND SUCH ORDERS WHERE ASSESSING OFFICER HAS GIVEN EFFECT BY ONLY RE - COMPUTING AS PER ORDER OF THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 IS NOT APPEALABLE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) . IN A CASE WHERE THE COMMISSIONER OF INCOME TAX HAS BY INVOKING HIS POWERS UNDER SECTION 263 HAS CANCELLED THE ASSESSMENT AND HAS DIRECTED A FRESH ASSESSMENT, HE WOULD HAVE TO GIVE SPECIFIC DIRECTIONS IN REGARD TO THE METHODOLOGY OF THE FRESH ASSESSMENT. A FAILURE ON THIS PART BY THE COMMISSIONER OF INCOME TAX WOULD RENDER THE ORDER UNDER SECTION 263 UNSUSTAINABLE . THIS VIEW GETS SUPPORT FROM THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GABRIEL INDIA LTD. (203 ITR 108) (BOM.) IF THE ENTIRE ASSESSMENT HAS NOT BEEN CANCELLED AND ONLY A PART OF THE ASSESSMENT ORDER IS TINKERED WITH BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 , IT FALLS UNDER THE CATEGORY OF ENHANCING O R MODIFYING THE ASSESSMENT. THE ENHANCING OR MODIFYING THE ASSESSMENT HAVING BEEN BY THE 7 ITA NO. 190 /P A N/201 5 S.A.NO. 07/PAN/2016 COMMISSIONER OF INCOME TAX , THE ASSESSING OFFICER IS PRECLUDED FROM APPLYING HIS OPINION TO SUCH ENHANCEMENT OR MODIFICATION AND CONSEQUENTLY THE ORDER GIVING EFFECT BY THE ASSESSING OFFICER IN RESPECT OF SUCH ENHANCEMENT OR MODIFICATION CANNOT BE CHALLENGED IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) , I NSOFAR AS IT WOULD IN EFFECT BE A CHALLENGE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) IN RESPECT OF ORDER PASSED UNDER SECTION 263 BY THE COMMISSIONER OF INCOME TAX. 8 . IN SHORT , SHORN OF ALL THE F R ILLS AN ORDER GIVING EFFECT TO AN ORDER PASSED UNDER SECTION 263 BY THE COMMISSIONER OF INCOME TAX IS NOT AN APPEALABLE ORDER BEFORE THE COMMISS IONER OF INCOME TAX (APPEALS) OR THE APPELLATE TRIBUNAL INSOFAR AS WHEN THE COMMISSIONER OF INCOME TAX I N V O K E S HIS POWERS UNDER SECTION 263 HE IS INVOKING HIS CO TERMINOUS POWERS OF THE ASSESSING OFFICER AND IS DOING THE ASSESSMENT IN THE SHOES OF THE ASSESSING OFFICER AFTER EXAMINING OR CAUSING INQUIRY TO BE CONDUCTED AS PROVIDED IN THE PROVISIONS OF SECTION 263. 9 . IN THE PRESENT CASE, ADMITTEDLY, THE ORDER UNDER SECTION 263 HAS ONLY MODIFIED THE ASSESSMENT. THE ASSESSMENT ORDER HAS NOT BEEN CANCELLED NOR ANY FRESH ASSESSMENT DIRECTED BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 . THIS BEING SO , THE ENTERTAINMENT OF THE APPEAL B Y THE COMMISSIONER OF INCOME TAX (APPEALS) ITSELF IS ERRONEOUS AND WITHOUT JURISDICTION. BE THAT AS IT MAY , NO APPEAL AGAINST THE ORDER GIVING EFFECT TO THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX UNDER SECTION 263 BY THE ASSESSING OFFICER IS MAINT AINABLE B EFORE THE COMMISSIONER OF INCOME TAX (APPEALS) NO R BEFORE THE APPELLATE TRIBUNAL ALSO A S THIS APPEAL IS NOT AGAINST THE ORDER PASSED UNDER SECTION 263 BY THE COMMISSIONER OF INCOME TAX . IN THESE CIRCUMSTANCES , THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED AS NOT MAINTAINABLE. 8 ITA NO. 190 /P A N/201 5 S.A.NO. 07/PAN/2016 1 0 . IN THE RESULT, APPEAL AS WELL AS STAY PETITION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON TUESDAY , THE 28 TH DAY OF JUNE , 201 6 AT GOA . S D / - S D / - (N.S.SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH JUNE , 201 6 . VR/ - COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI .