Sri Santosh Kumar Sureka, Howrah V. A.C.I.T. CIR - 46 Kol, Kolkata

ITA 1964/KOL/2008

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48073 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 19-04-2011
• Assessment Year: 1989-1990
• Appeal Filed On: 22-10-2008
• Court: TRIBUNAL
• Department Lawyers: P C NAYAK
• Assessee Lawyers: S M SURANA
• Keywords: Reopening of assessment; Unexplained investment; Additional evidence; Question of law; Reassessment proceedings
• Section: 144

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : KOLKATA ( ) , , . . , , ) [BEFORE HONBLE SRI MAHAVIR SINGH, J.M. & HONBLE SRI C.D. RAO, A.M.] ! ! ! ! / I.T.A NO. 1964/KOL/2008 '# '# '# '# $% $% $% $% / ASSESSMENT YEAR : 1989-90 SHRI SANTOSH KUMAR SUREKA, HOWRAH -VS.- ASSISTANT COMMISSIONER OF INCOME TAX, (PAN : AMAPS 1884 Q) CIRCLE-46, KOLKATA ( &' &' &' &' /APPELLANT ) ( ()&' ()&' ()&' ()&' / RESPONDENT ) FOR THE APPELLANT : SHRI S.M. SURANA, A.R. FOR THE RESPONDENT : SHRI P.C. NAYAK, D.R. * * * * / ORDER PER BENCH :- THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDER OF CIT(A)-XXX, KOLKATA IN APPEAL NO.44/CIT(A)-XXX/CIRCLE-46/2007-08 VIDE DATE D 10.07.2008. THE ASSESSMENT WAS FRAMED BY ACIT, CIRCLE-46, KOLKATA U/S.147/143( 3)/254 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASS ESSMENT YEAR 1989-90 VIDE HIS ORDER DATED 31.03.2005. 2. THE FIRST LEGAL ISSUE IN THIS APPEAL OF THE ASSE SSEE IS AS REGARDS TO THE ORDER OF CIT(A) NOT ADJUDICATING THE ISSUE OF JURISDICTION I .E. REASSESSMENT U/S. 147 R.W.S. 148 OF THE ACT. FOR THIS, THE ASSESSEE HAS RAISED THE FOL LOWING EFFECTIVE GROUNDS: 2. FOR THAT THE LD. CIT(A.) ERRED IN CONFIRMING TH E ACTION UNDER SECTION. 147 INITIATED IN THE CASE OF THE ASSESSEE WHICH WERE UN LAWFUL AND NOT IN ACCORDANCE WITH LAW. 3. FOR THAT THE LD. CIT(A.) ERRED IN CONFIRMING THE ACTION UNDER SECTION WHEN NO REASONS WERE RECORDED IN THE CASE OF THE AS SESSEE AND THE COPY OF THE REASONS RECORDED OR DETAILED NOTINGS IN THE NOTES A TTACHED TO THE ASSESSMENT ORDER IN THE CASE OF G.S. SUREKA FOR THE ASSESSMENT YEAR 1989-90 WERE NOT COMMUNICATED TO THE ASSESSEE. THE RECORDING OF THE REASONS IN THE FILE OF THE ASSESSEE WERE NOT SUFFICIENT TO GIVE JURISDICTION T O REOPEN THE ASSESSMENT UNDER SECTION. 147. ITA NO.1964/KOL./2008 2 4. FOR THAT THE LD. CIT(A.) ERRED IN CONFIRMING THE ACTION UNDER SECTION. 147 AND THE ASSESSMENT THEREAFTER COMPLETED BY THE AO W HEN THE DETAILED NOTINGS REFERRED TO BY THE AO AS REASONS RECORDED WERE NOT COMMUNICATED TO THE ASSESSEE INSPITE OF VARIOUS REMINDERS. 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT CIT(APPEALS) HAS NOT DECIDED THIS ISSUE BY MENTIONING THAT THE TRIBU NAL WHILE SETTING ASIDE THE ASSESSMENT, REOPENING WAS NOT THE SUBJECT MATTER. THE RELEVANT PORTION OF THE LD. CIT(APPEALS)S ORDER READS AS UNDER :- THE APPELLANTS AR FILED ADDITIONAL GROUND. IT IS CONTENDED THAT THE AO ERRED IN INITIATING PROCEEDING UNDER SECTION/. 147. IT IS CONTENDED THAT THE REASONS RECORDED ARE VAGUE AND NOT SUPPORTED BY ANY EVIDENC E. IT IS CONTENDED THAT THE MATERIAL ON RECORD DOES NOT SHOW ANY ESCAPEMENT OF INCOME. IT IS CONTENDED THAT THE PROCEEDINGS TAKEN UNDER SECTION. 147 WERE BAD IN LAW AND THE ASSESSMENT IS ILLEGAL. THE AO MADE AN ASSESSMENT UNDER SECTION. 144/147 O N 26.03.2001 DETERMINING INCOME OF RS.32.26 ;LAKHS. ON APPEAL, C IT(A.) CONFIRMED THE ORDER. ON FURTHER APPEAL THE HONBLE ITAT IN ORDER NO. 161 1/KOL./02 DT. 12.12.03 SET ASIDE THE ASSESSMENT ORDER FOR MAKING FRESH ASSESSM ENT. CONSEQUENT TO THIS ITATS ORDER THE AO COMPLETED THE REASSESSMENT DETE RMINING THE TAXABLE INCOME OF RS.32.26 LAKH. THE AO COMPLETED THE REASS ESSMENT CONSEQUENT TO THE DIRECTION OF ITAT. REOPENING OF ASSESSMENT UNDER SE CTION. 147 IS NOT A SUBJECT MATTER IN THIS ASSESSMENT ORDER PASSED ON 31.3.2005 . THIS ORDER IS ONLY REASSESSMENT AND NOT ORDER PASSED CONSEQUENT TO REO PENING UNDER SECTION. 147. HENCE, THE GROUNDS OF APPEAL RAISED BY THE APPELLAN T ARE NOT RELEVANT FOR THE REASSESSMENT ORDER WHICH IS A SUBJECT MATTER OF THI S APPEAL. GROUNDS OF APPEAL ARE NOT MAINTAINABLE. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THIS B EING A LEGAL ISSUE CAN BE RAISED AT ANY TIME AND CIT(A) SHOULD HAVE ADJUDICATED THE SAME. HENCE, HE REQUESTED THE BENCH TO ADJUDICATE THIS ISSUE NOW. ON THE OTHER HAND, THE LD. CIT(D.R.) STA TED THAT REOPENING WAS NOT THE SUBJECT MATTER BEFORE ITAT WHILE SETTING ASIDE THE ORIGINAL ASSESS MENT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THR OUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT THE ORIGINAL ASSESSMENT IN THIS CASE W AS COMPLETED UNDER SECTION 144 / 147 ON 26.03.2001 FOR THE ASSESSMENT YEAR 1989-90 MAKING A DDITION OF RS.29,11,337/- AS UNEXPLAINED INVESTMENT IN PURCHASE OF GOODS AND 10% PROFIT THER EON. THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) AGAINST THE ASSESSMENT ORDER AND HE CONF IRMED THE ADDITIONS VIDE HIS ORDER DATED 21.09.1993. THE ASSESSEE FILED APPEAL BEFORE THE IT AT AND ITAT VIDE ITS ORDER IN ITA NO. ITA NO.1964/KOL./2008 3 626/627 AND 628 SET ASIDE THE ASSESSMENT ORDER FOR THE YEAR UNDER CONSIDERATION, I.E. 1989-90 ALONG WITH THE ORDERS FOR THE ASSESSMENT YEARS 1988 -89 AND 1990-91. THE ASSESSING OFFICER COMPLETED THE REASSESSMENT UNDER SECTION 147/ 143(3 )/ 254 OF THE ACT VIDE HIS ORDER DATED 31.03.2005 FOR THE YEAR UNDER CONSIDERATION. THE AS SESSING OFFICER REPEATED THE EARLIER ADDITIONS AND MADE FURTHER ADDITION OF RS.2,86,634/ - AS PROFIT FROM SALES. THE ASSESSEE DISPUTED THESE ADDITIONS AND ALSO INITIATION OF ASSESSMENT P ROCEEDINGS UNDER SECTION 147 R.W.S. 148 OF THE ACT BEFORE CIT(A), WHO DISMISSED THE GROUND BY HOLD ING THAT THE SAME WAS NOT THE SUBJECT MATTER BEFORE TRIBUNAL. 5. WE ARE OF THE VIEW THAT THE PROCEEDINGS TAKEN U/ S. 147 CAN BE DISPUTED EVEN IN THE SECOND ROUND OF APPEAL SINCE IF THE AO LACKS THE JU RISDICTION THE SAID JURISDICTION CAN BE DISPUTED AT ANY TIME AND EVEN IN THE SECOND ROUND O F APPEAL PASSED ON REMAND. THIS VIEW OF OURS IS SUPPORTED BY THE DECISION OF HONBLE GUJARA T HIGH COURT IN THE CASE OF P. V. DOSHI VS. CIT (1978) 113 ITR 22 (GUJ.), WHICH IS DIRECTLY ON THE ISSUE THAT ASSESSEE CAN DISPUTE THE VALIDITY OF REASSESSMENT PROCEEDINGS EVEN IN THE SE COND ROUND OF APPEAL. HONBLE GUJARAT HIGH COURT IN THE CASE OF P. V. DOSHI (SUPRA) HELD AS UNDER: THEREFORE, IF THIS SETTLED POSITION WAS BORNE IN M IND, THE TRIBUNAL'S VIEW WAS CLEARLY ERRONEOUS THAT THE MATTER BECAME FINAL WHEN THE TRIBUNAL PASSED THE EARLIER REMAND ORDER SO THAT THIS POINT OF JURISDIC TION GOT FINALLY SETTLED, WHICH COULD NOT BE AGITATED UNLESS THE ASSESSEE HAD COME IN THE REFERENCE TO THIS COURT AT THAT STAGE. THE TRIBUNAL'S VIEW WAS ALSO I NCORRECT THAT IN RESTORING THE CASE TO THE FILE OF THE INCOME-TAX OFFICER BY THE EARLIER ORDER, THE ONLY POINT LEFT OPEN WAS IN RESPECT OF ADDITION OF RS. 19,421 ON MERITS AND THAT THE LEGAL OR JURISDICTIONAL ASPECT WHETHER THE REASSESSMENT P ROCEEDINGS WERE LEGALLY INITIATED WAS NOT KEPT OPEN. EVEN ON THE THIRD QUES TION THE TRIBUNAL'S VIEW WAS ERRONEOUS THAT EVEN THOUGH THIS POINT WENT TO THE ROOT OF THE JURISDICTION AND WAS A PURE QUESTION OF LAW, MERELY BECAUSE THE POIN T WAS INITIALLY RAISED AND NOT PRESSED WHEN THE MATTER WAS TAKEN UP BEFORE TH E APPELLATE ASSISTANT COMMISSIONER, IT COULD BE WAIVED AND IT COULD NOT B E REAGITATED. THEREFORE, IN VIEW OF THE SETTLED LEGAL POSITION OUR ANSWERS ON Q UESTIONS NOS. 1 AND 2 ARE IN THE NEGATIVE, WHILE OUR ANSWER ON QUESTION NO. 3 IS IN THE AFFIRMATIVE, THAT IS TO SAY, ALL THE QUESTIONS ARE ANSWERED AGAINST THE REV ENUE AND IN FAVOUR OF THE ASSESSEE. FURTHER, HONBLE RAJASTHAN HIGH COURT IN THE CASE O F DEEP CHAND KOTHARI VS. CIT (1988) 171 ITR 381(RAJ.) HAS TAKEN A VIEW THAT IF THE OFFICER COMPLETED THE ASSESSMENT LACKED JURISDICTION, SUCH PLEA CAN BE RAISED EVEN IN SECOND ROUND OF APP EAL. HONBLE RAJASTHAN HIGH COURT IN THE CASE OF DEEP CHAND KOTHARI (SUPRA) HELD AS UNDER: ITA NO.1964/KOL./2008 4 IT IS NOT IN DISPUTE THAT THE JURISDICTION OF THE INCOME-TAX OFFICER WAS DULY CHALLENGED BY THE ASSESSEE BEFORE THE INCOME-TAX OF FICER HIMSELF AND ALSO IN THE MEMORANDA OF APPEALS FILED BEFORE THE APPELLATE ASS ISTANT COMMISSIONER. IT IS NOT DISPUTED THAT THE APPELLATE ASSISTANT COMMISSIO NER DID NOT TOUCH ON THIS POINT IN HIS COMMON ORDER DATED AUGUST 17, 1972, AN D DECIDED THE APPEALS ON MERITS IN FAVOUR OF THE ASSESSEE. AS SUCH, IT WOULD BE DEEMED THAT THE APPELLATE ASSISTANT COMMISSIONER DECIDED THE POINT OF JURISDI CTION AGAINST THE ASSESSEE. ADMITTEDLY, THE SAID POINT OF JURISDICTION WAS DULY RAISED BEFORE THE LEARNED TRIBUNAL BY LEARNED COUNSEL FOR THE ASSESSEE BEFORE THE CLOSE OF HIS ARGUMENTS. EVEN AN APPLICATION WAS MOVED BY HIM AT THAT TIME. RULE 27, INCOME-TAX (APPELLATE TRIBUNAL) RULES, 1963, PROVIDES THAT THE RESPONDENT, THOUGH HE MAY NOT HAVE APPEALED, MAY SUPPORT THE ORDER APPEALED A GAINST ON ANY OF THE GROUNDS DECIDED AGAINST HIM. THUS, THE ASSESSEE WAS ENTITLED TO SUPPORT THE ORDER OF THE APPELLATE ASSISTANT COMMISSIONER FOR N OT CLUBBING THE SAID TWO INCOMES ON THE SAID GROUND OF LACK OF JURISDICTION. THE ASSESSEE COULD SUBMIT HIS ARGUMENTS AND RAISE THE SAID PLEAS ONLY AFTER THE CONCLUSION OF THE ARGUMENTS OF THE LEARNED REPRESENTATIVE FOR THE DEP ARTMENT AS HE WAS THE RESPONDENT IN ALL THE APPEALS. IT HAS BEEN OBSERVE D IN KIRAN SINGH V. CHAMAN PASWAN, AIR 1954 SC 340, AS UNDER: ' IT IS A FUNDAMENTAL PRINCIPLE WELL ESTABLISHED T HAT A DECREE PASSED BY A COURT WITHOUT JURISDICTION IS A NULLITY, AND THAT I TS INVALIDITY COULD BE SET UP WHENEVER AND WHEREVER IT IS SOUGHT TO BE ENFORCED O R RELIED UPON, EVEN AT THE STAGE OF EXECUTION AND EVEN IN COLLATERAL PROCEEDIN GS. A DEFECT OF JURISDICTION, WHETHER IT IS PECUNIARY OR TERRITORIAL, OR WHETHER IT IS IN RESPECT OF THE SUBJECT- MATTER OF THE ACTION, STRIKES AT THE VERY AUTHORITY OF THE COURT TO PASS ANY DECREE, AND SUCH A DEFECT CANNOT BE CURED EVEN BY CONSENT OF PARTIES. ' IT HAS ALSO BEEN HELD IN CIT V. NELLIAPPAN [1967] 66 ITR 722 (SC) AND CIT V. DELHI SANITARY STORES [1981] 127 ITR 822 (RA J) THAT THE TRIBUNAL MAY ALLOW NEW GROUNDS TO BE URGED BEFORE IT. IN VIEW OF THESE FACTS, CIRCUMSTANCES AND AUTHORIT ATIVE OBSERVATIONS, WE HAVE NO HESITATION IN HOLDING THAT THE TRIBUNAL WAS LEGALLY NOT RIGHT IN NOT ALLOWING THE OBJECTIONS AS TO THE JURISDICTION OF T HE INCOME-TAX OFFICER TO ISSUE THE NOTICE AND AS TO THE VALIDITY OF THE PROCEEDING S TAKEN IN PURSUANCE THEREOF TO BE RAISED. THE QUESTION IS ACCORDINGLY ANSWERED IN THE AFFIRMATIVE AND AGAINST THE DEPARTMENT. IT IS WELL-SETTLED LAW THAT THE OBJECTION REGARDIN G LACK OF JURISDICTION IS DECIDED FIRST. ONLY AFTER ITS DECISION HOLDING THAT THE COURT OR THE TRIBUNAL HAS JURISDICTION, OTHER QUESTIONS RELATING TO THE MERIT S OF THE CASE ARISE FOR DECISION, OTHERWISE NOT. THE TRIBUNAL HAS POWER TO TAKE ADDITIONAL EVIDENCE . AFTER TAKING THE EVIDENCE WHICH IS CONSIDERED NECESSARY, THE SAID PO INT REGARDING LACK OF JURISDICTION CAN WELL BE DECIDED BY THE TRIBUNAL. A S SUCH, IT IS NEITHER NECESSARY NOR EXPEDIENT FOR THIS COURT TO DECIDE THE REMAININ G QUESTIONS. THE CASE ITA NO.1964/KOL./2008 5 DESERVES TO BE SENT BACK TO THE LEARNED TRIBUNAL FO R FIRST DECIDING THE SAID POINT REGARDING THE LACK OF JURISDICTION. IN VIEW OF THE ABOVE SETTLED LEGAL POSITION, WE ARE OF THE VIEW THAT THE CIT(A) SHOULD HAVE DECIDED THE JURISDICTIONAL ISSUE FIRST BY PASSING A SPEAKING ORDER, IN VIEW OF THIS, WE SET ASIDE THIS LEGAL ASPECT TO THE FILE OF THE CIT(A) FOR FRE SH ADJUDICATION. APART FROM LEGAL ISSUE, THE CIT(A) ALSO DECIDE THE ISSUES ON MERITS, IF REQUIRE D. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER RONOUNCED IN THE OPEN COURT. SD/- SD/- [C.D. RAO/ ( . . )] [ MAHAVIR SINGH / ] ACCOUNTANT MEMBER/ JUDICIAL MEMBER/ DATED : 19/ 04 / 2011 COPY OF THE ORDER FORWARDED TO: 1 . SHRI SANTOSH KUMAR SUREKA, 105/34/1, GIRISH GHOSH R OAD, LILUAH, HOWRAH-711 204. 2 ACIT, CIRCLE-46, KOLKATA, 3, GOVT. PLACE, KOLKATA-1 3 . CIT(A)- ,KOLKATA 4 . CIT, KOLKATA- 5 . DR, KOLKATA BENCHES, KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR, I.T.A.T., KOLKATA LAHA, SR. P.S.