ITO, Ward-2(1), Kolkata, Kolkata V. M/s Qualitron Commodities Pvt. Ltd., Kolkata

ITA 1955/KOL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3536 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 05-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G HANGSHING
• Keywords: Search and seizure
• Section: 143(3); 68; 144

Judgement Text

1 ITA NO. 1955/KOL/2016 QUALITRON COMMODITIES PVT. LTD., AY 2011-12 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 1955/KOL/2016 ASSESSMENT YEAR: 2011-12 INCOME-TAX OFFICER, WD-2(1), KOLKATA. VS. M/S. QUAL ITRON COMMODITIES PVT. LTD. (PAN: AAACQ0950E) APPELLANT RESPONDENT DATE OF HEARING 14.06.2018 DATE OF PRONOUNCEMENT 21.08.2018 FOR THE APPELLANT SHRI G. HANGSHING, CIT, DR FOR THE RESPONDENT SHRI SUDESH GARG, AR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A)-1, KOLKATA DATED 12.07.2016 FOR AY 2011-12. 2. THE REVENUE BY PREFERRING THIS APPEAL HAS CHAL LENGED THE ACTION OF LD. CIT(A) ANNULLING THE ASSESSMENT ORDER PASSED BY ITO, WARD- 2(1), KOLKATA. 3. WE NOTE THAT THE ASSESSEE IS A CORPORATE ASSESSE E REGULAR IN FILING OF RETURN. FOR THE ASST. YR.2011-12, THE CASE OF THE ASSESSEE WAS SELE CTED FOR SCRUTINY AT CENTRAL CIRCLE- 5, NEW DELHI. THE ASSESSEE WAS SCRUTINIZED U/S. 153C/1 43(3) OF THE IT ACT, 1961 FOR A.Y. 2005-06 TO 2009-10 . SUBSEQUENTLY, THE ASSESSEE WAS SCRUTINIZED U/S. 143(3) FOR PRECEDING YEARS INCLUDING A. Y. 2011-12. SIMULTANEOUSLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY U/S.143(3) BY AO WARD - 2(1), KOLKATA. 2 ITA NO. 1955/KOL/2016 QUALITRON COMMODITIES PVT. LTD., AY 2011-12 4. SINCE, THE JURISDICTION OF THE ASSESSEE WAS PASS ED ON TO CENTRAL CIRCLE-5, NEW DELHI PURSUANT TO SEARCH CONDUCTED AT THE GROUP COMPANY O F THE ASSESSEE IN NEW DELHI AND AS SUCH ASSESSEE HAD ITS ONGOING SCRUTINY AT CENTRAL C IRCLE-5, NEW DEL. HOWEVER, SINCE AN ASSESSMENT ORDER U/S. 144 WAS PASSED BY ITO, WARD-2 (1), KOLKATA AGAINST THE ASSESSEE, THE SAME WAS CHALLENGED BEFORE THE LD. CIT(A), WHO WAS PLEASED TO ANNUL THE ASSESSMENT ORDER PASSED BY ITO, WARD-2(1), KOLKATA BY OBSERVIN G AS UNDER: AFTER CONSIDERING THE AO'S FINDING AND WRITTEN SUBM ISSIONS, REMAND REPORT OF THE A 0 AND REJOINDER FILED BY A R OF THE APPELLANT, IT IS OBSE RVED THAT THE ASSESSMENT PROCEEDINGS WERE INITIATED BY THE A 0, I. E. ITO, WARD-2(1), KOLKATA ON THE BASIS OF INFORMATION FOR SELECTION OF THE CASE FOR SCRUTINY UNDER CASS FOR AY. 2011-12 AN D JURISDICTION WAS ASSUMED ON THE BASIS OF PAN OF THE APPELLANT. AS REGARDS THE ISSUE OF CH ALLENGE OF THE VALIDITY OF JURISDICTION WITH ITO, WARD-2(1),KOLKATA THE APPELLANT HAS STATED THA T ITS CASE WAS CENTRALIZED WITH A0, CENTRAL CIRCLE -51 NEW DELHI PURSUANT TO SEARCH AND SEIZURE IN THE 'RAJDARBAR GROUP OF CASES' ON 31.07.2008. IT WAS FURTHER AVERRED THAT THE ASSESSM ENTS IN THE APPELLANT'S CASE WERE COMPLETED U/S 153C/143(3) FOR ASST YEARS 2005-06 TO 2008-09 O N 21.12.2010 AND U/S 143(3) FOR ASST YEAR 2009-10 ON 21.12.2010 (IN TOTAL 4+1 = 5 YEARS ASSESSMENT AT CENTRAL CIRCLE - 51 NEW DELHI ON 21.12.2010). IT IS OBSERVED THAT THE I. T. O, WARD-2(1),KOLKATA ALTHOUGH HE OBSERVED THAT EFFORTS WERE MADE FOR SERVING STATUTORY NOTICE S AT THE AVAILABLE ADDRESSES OF THE APPELLANT COMPANY IN NEW DELHI THROUGH THE INSPECTOR, HOWEVER THERE ADMITTEDLY A.O HAS NOT COMMENTED UPON WHETHER ANY EFFORTS WAS MADE TO SERV E THE STATUTORY NOTICES BY LOCATING THE CORRECT CURRENT REGISTERED ADDRESS OF THE COMPANY O R THE PRINCIPAL OFFICER/DIRECTORS FROM THE R.O.C WEB-SITE 6R DEPARTMENT'S DATABASE IN NEW DELH I. IT IS NOTED THAT THE MENTION OF EFFORTS TO TRANSFER THE PAN MADE BY THE A.O BY WRITING TO T HE CIT, KOLKATA-1, INDICATES THAT THE A.O WAS AWARE OF TRANSFER OF JURISDICTION OVER THE APPE LLANTS CASE FROM KOLKATA TO NEW DELHI, BUT SINCE THE ASSESSMENT WAS GETTING TIME-BARRED THE PR OCEEDINGS WERE FINALIZED HURRIEDLY BY SERVING NOTICES THROUGH AFFIXTURE AT THE LAST AVAIL ABLE KOLKATA ADDRESS AND NOTICES TO DIRECTOR THROUGH MAIL/SPEED POST. THERE IS SUBSTANCE IN THE APPELLANT'S ARGUMENT THAT THE JURISDICTION OVER THE APPELLANT'S CASE WAS BEING EXERCISED CONTINUOUSLY BY THE A.0,CENTRAL CIRCLE-5, NEW DELHI AFTER CENTRALIZATION. OF THE CASE, EVIDENCED FROM COPIES OF RELEVANT ASSE SSMENT ORDERS PLACED ON RECORD. IT IS ALSO PERTINENT THAT, 'ALL THE ORDERS U/S 153C/143(3) WER E PASSED AFTER OBTAINING APPROVAL OF ADDL. CIT, CENTRAL RANGE - II, NEW DELHI.' THE APPELLANT HAS ALSO ARGUED THAT 'IT IS DEAR FROM PARA (4) AND (5) THAT LD. A. O. ALSO HAD IN MIND TO TRAN SFER THE FILE BUT HE TRIED WITH WRONG ADDRESS. OTHERWISE SAME ITO WARD 14(4),NEW DELHI WHO WAS VES TED WITH THE JURISDICTION ON DECENTRALIZATION OF FILE VIDE ORDER U/S 127 OF THE I. T. ACT, 1961 DATED 30/05/2014 PASSED BY CIT, (CENTRAL) - 1, NEW DELHI. 12) THUS, LD. A. O. OF KOLKATA HAS ISSUED NOTICES A T WRONG ADDRESS, APPROACH ITO, DELHI GIVING WRONG ADDRESS, THUS, HAS CAME TO A WR ONG CONCLUSION.' THE APPELLANT'S A. R HAS FURTHER ARGUED THAT IT CAN NOT BE HELD RESPONSIBLE FOR THE A. O'S DEFAULT IN TRANSFER/MIGRATION OF THE PAN TO DELHI A . 0., WHICH WAS THE RESPONSIBILITY OF I. T. DEPARTMENT AT KOLKATA AND NOT OF THE APPELLANT. IT WAS REITERATED THAT AFTER SEARCH, APPELLANT WAS REGULARLY ASSESSED WITH LD. A. O. CC-5, NEW DEL HI AND APPELLANT WAS HAVING NO OCCASION TO PERUSE THE MATTER OF TRANSFER OF PAN TO NEW DELH I. A.O. THE APPELLANT'S A.R HAS REFERRED TO SEVERAL CBDT CIRCULARS ON THE SUBJECT OF MIGRATION OF PAN AS ADMITTED BY THE DEPARTMENT 3 ITA NO. 1955/KOL/2016 QUALITRON COMMODITIES PVT. LTD., AY 2011-12 ITSELF, INCLUDING THE FOLLOWING: CIRCULAR NO. F.NO. DGIT(S)/DIT(S)-L/AIS DATED 16.07.2015 BY DIT (SYSTEM); CIRCULAR NO. F. NO. DIT(S)- DIT (SYSTEM); CIRCULAR NO. F. NO. DIT(S)-1/AIS/NODA L/1213 DATED 08/10/2012 BY DIT (SYSTEM); INSTRUCTION NO. 80[F. NO. SW/3] DATED 30. 01.2012 BY DIT (SYSTEM) VIDE 25/98/01- DIT(S) -19744-88]; INSTRUCTION NO. 97(F. NO. CIT/OS D/, DATED 28/09/2011 BY DIT (SYSTEM) VIDE AIS/2011-12]. ON THE ISSUE OF' APPELLANTS CON TENTION REGARDING LACK OF VALID JURISDICTION EXERCISED BY THE A. 0 IN PASSING ORDER U/S 144 OF T HE ACT, RELIANCE WAS PLACED UPON THE DECISION OF KERALA HIGH COURT IN THE CASE OF P.A. A HAMMED V. CHIEF CIT & ARD (2006) 282 ITR 334 (KER), WHEREIN ON SIMILAR FACTS, THE HON'BL E COURT OBSERVED AS UNDER: 'THE MAIN CONTENTION RAISED BY THE PETITIONER AGAIN ST TRANSFER OF FILE IS THAT ONLY 'CASE' TAN BE TRANSFERRED UNDER SECTION 127 FROM ON E OFFICER TO ANOTHER OFFICER BY THE CHIEF CIT AND THE SAME DOES NOT APPROVE (SIC-INCLUD E) TRANSFER OF JURISDICTION IN RESPECT OF AN ASSESSEE. HOWEVER, EXPLANATION TO SEC TION 127 CLARIFIES THAT 'CASEMEANS THE ENTIRE PROCEEDINGS UNDER THE ACT. T HEREFORE, THIS ARGUMENT DOES NOT ENTITLE THE PETITIONER TO RETAIN ASSESSMENTS WITH T HE PREVIOUS OFFICER EVEN AFTER TRANSFER OF THE RAID FILE TO ANOTHER OFFICER. THIS COURT HAS TAKEN A SIMILAR VIEW IN REDWOOD HOTEL LTD. V. CHIEF CIT & ORS. (2003) 259 ITR 191 ( KER). THE NEXT CONTENTION RAISED BY COUNSEL FOR THE PETITIONER IS THAT EVEN IF THE R AID CASES WERE TRANSFERRED TO CENTRAL CIRCLE, REGULAR ASSESSMENT SHOULD BE RETAINED WITH THE PREVIOUS ASSESSING OFFICER. I DO NOT FIND ANY PROVISION IN THE ACT WHEREUNDER TWO AS SESSING OFFICERS RETAIN 'CONCURRENT JURISDICTION OVER THE SAME ASSESSEE. AT ANY GIVEN P OINT OF TIME ONLY ONE ASSESSING OFFICER CAN HAVE REGULAR JURISDICTION OVER AN ASSES SEE FOR ASSESSMENT IS THE SCHEME OF THE ACT. THEREFORE, WHEN TRANSFER IS EFFECTED, THE ENTIRE FILES OLD, PENDING AND THE RETURNS TO BE FILED WILL GET TRANSFERRED TO THE OFF ICER TO WHOM THE FILE IS TRANSFERRED BY THE CHIEF COMMISSIONER OF INCOME TAX. THEREFORE, CH ALLENGE AGAINST EXT. P14 IS WITHOUT ANY JUSTIFICATION. THE ORIGINAL PETITION IS DEVOID OF ANY MERIT AND IS DISMISSED. IN VIEW OF THE ABOVE DISCUSSION AND CONSIDERING THE RATIO OF THE CITED CASE LAW IN P.A. ANEMMED V. CHIEF CIT & ARD (2006) 282 ITR 334 (KER) , WHICH IS FOUND TO BE SQUARELY APPLICABLE TO THE FACTS OF THE APPELLANT'S CASE, IT IS FOUND THAT ADMITTEDLY THE APPELLANT'S CASE WAS BEING ASSESSED CONTINUOUSLY WITH THE A. 0, CENT RAL CIRCLE-5, NEW DELHI AS, ASSESSMENTS IN THE APPELLANT'S CASE WERE COMPLETED U/S 153C/143(3) FOR ASST YEARS 2005-06 TO 2008-09 ON 21.12.2010 AND U/S 143(3) FOR ASST YEAR 2009-10 ON 21.12.2010 AFTER CENTRALIZATION OF THE JURISDICTION OVER THE APPELLANT COMPANY'S CASE. THU S, THE ASSUMPTION OF JURISDICTION OVER THE APPELLANT COMPANY BY THE I. T. 0, WARD-2( 1), KOLKA TA ON THE BASIS OF PAN AWAITING TRANSFER, IS FOUND TO BE NOT JUSTIFIED. THEREFORE, THE IMPUGN ED ASSESSMENT ORDER U/S 144 IS FOUND BE PASSED WITHOUT VALID JURISDICTION AND WAS THUS BAD IN LAW AND IS ANNULLED. SINCE THE ASSESSMENT HAS BEEN HELD TO BE INVALID A ND BAD IN LAW AS DISCUSSED ABOVE, THERE IS NO NEED TO ADJUDICATE GROUND NO. 4 RELATIN G TOI ADDITION OF THE SHARE CAPITAL TO THE TOTAL INCOME BY THE AO ON MERITS. THEREFORE, THE G ROUND NO. 1, 2, 3 & 5 OF THE APPELLANT ARE ALLOWED. 5. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), THE REVENUE IS BEFORE US. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE ASSESSEE HAS FILED ITS RETU RN OF INCOME ELECTRONICALLY FOR THE ASSESSMENT YEAR 2011-12 ON 07.07.2012 VIDE ACKNOWLE DGMENT NO. 40634147107712. 4 ITA NO. 1955/KOL/2016 QUALITRON COMMODITIES PVT. LTD., AY 2011-12 PURSUANT TO SEARCH AND SEIZURE IN RAJDARBAR GROUP OF CASES ON 31.07.2008, THE ASSESSEES ASSESSMENT WAS CENTRALIZED TO THE FILE OF CENTRAL C IRCLE-5, NEW DELHI, WE NOTE THAT IN THE CASE OF ASSESSEES ASSESSMENTS FOR AYS 2005-06 TO 2 008-09 WERE COMPLETED U/S. 153C/143(3) ON 21.12.2010 AND U/S. 143(3) FOR AY 20 09-10 ON 21.12.2010 BY AO (DCIT) OF CENTRAL CIRCLE-5, NEW DELHI AFTER OBTAINING APPR OVAL OF ADDITIONAL CIT, CENTRAL RANGE- 11, NEW DELHI. FURTHER, WE NOTE THAT IN THE ASSESS MENT ORDER FOR AY 2011-12 THE AO HAS MENTIONED THE ADDRESSES AS UNDER: 13B, 3 RD FLOOR, NETAJI SUBHAS MARG, DARYAGANJ, NEW DELHI-40 0002 7. AND THE ASSESSMENT ORDER FOR THIS RELEVANT ASSES SMENT YEAR WAS SCRUTINIZED U/S. 143(3) OF THE ACT AND WAS PASSED BY DEPUTY COMMISSI ONER OF INCOME-TAX ON 28.03.2014. WE ALSO NOTE THE CIT (CENTRAL-1), NEW DELHI BY ORD ER U/S. 127 OF THE ACT DATED 30.05.2014 HAS TRANSFERRED THE JURISDICTION OF ASSE SSEE COMPANY FROM CENTRAL CIRCLE-5, NEW DELHI TO WARD-14(4), NEW DELHI FROM WHICH IT IS CLE ARLY INFERRED THAT CENTRAL CIRCLE-5 AO (DCIT) HAD JURISDICTION OF ASSESSEE AY 2011-12 AND AS PER THE HONBLE KERALA HIGH COURT ORDER IN P.A. AHMED (SUPRA), THE ITO, WARD-2(1) DI D NOT ENJOY JURISDICTION. SO THE LD. CIT(A) HAS RIGHTLY ANNULLED THE ASSESSMENT PASSED U /S. 144 OF THE ACT. MOREOVER, IT WAS BROUGHT TO OUR NOTICE BY LD. AR THAT ON MERITS ALSO NO ADDITION COULD HAVE BEEN MADE U/S. 68 OF THE ACT BECAUSE THE MONEY IN QUESTION WAS REC EIVED IN EARLIER YEARS AND NOT IN THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION. SO, IN ANY VIEW OF THE MATTER, THE ORDER IMPUGNED IS UPHELD AND APPEAL OF REVENUE IS DISMISS ED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21ST AUG UST, 2018 SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21ST AUGUST, 2018 JD.(SR.P.S.) 5 ITA NO. 1955/KOL/2016 QUALITRON COMMODITIES PVT. LTD., AY 2011-12 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-2(1), KOLKATA. 2 RESPONDENT M/S. QUALITRON COMMODITIES PVT. LTD. , 4 TH FLOOR, 7, GANHELSH CHANDRA AVENUE, KOLKATA-700 013. 3. 4. CIT(A)-1, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY