GCS Infoserv Private Limited, CHENNAI V. ITO, CHENNAI

ITA 2009/CHNY/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9448 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 28-03-2016
• Assessment Year: misc
• Appeal Filed On: 25-07-2014
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Keywords: Depreciation; Opportunity of being heard; Revised return
• Section: 142(1); 139(5); 144; 139

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 2009/MDS/2014 / ASSESSMENT YEAR :2007 - 08 M/S. GCS INFOSERV PRIVATE LIMITED, NO.2, IIND STREET, IIIRD CROSS, VAISHNAVI NAGAR, AVADI, CHENNAI 600 109 . [PAN: A AC CG2946E ] VS. THE INCOME TAX OFFICER , CO MPANY WARD II(1 ) , CHENNAI . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI S. SRIDHAR , ADVOCATE / RESPONDENT BY : SHRI A.V. SREEKANTH , J CIT / DATE OF HEARING : 28 . 0 3 .201 6 / DATE OF P RONOUNCEMENT : 29 . 0 4 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH I S APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) II , CHENNAI , DAT ED 2 6 . 0 2 .20 1 4 RELEVANT TO THE ASSESSMENT YEAR 2007 - 08 BY RAISING FOLLOWING EFFECTIVE GROUNDS: (I) CONFIRMATION OF DISALLOWANCE OF DEPRECIATION AMOUNTING TO .99,911/ - . (II) CONFIRMATION OF DISALLOWANCE OF ADMINISTRATIVE CHARGES AGGREGATING TO .6,38,000/ - . I.T.A. NO . 2009 /M/ 14 2 (III) SUSTAINING ADDITION OF .4,26,750/ - ON ACCOUNT OF THE DIFFERENCE AS PER THE TDS CERTIFICATE AND THE AMOUNT CHARGED TO THE P&L ACCOUNT (IV) SUSTAINING THE ADDITION OF .6,34,489/ - BEING THE CASH CREDIT/CLOSING BALANCE OF UNSECURED LOANS. (V) ORDER PASSED UNDER SECTION 144 OF THE INCOME TAX ACT [ ACT IN SHORT] IS WITHOUT JURISDICTION AND NOT SUSTAINABLE BOTH ON FACTS AND LAW. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY AND FILED ITS RETURN ON 15.11.2007 ADMITTING NIL INCOME CLAI MING A LOSS OF .10,42,456/ - AND REFUND OF .2,34,292/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NECESSARY DETAILS WERE CALLED FOR. A PROPOSAL UNDER SECTION 144 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 29.10.2009, PROPOSING TO ASSESS THE TOT AL INCOME OF THE ASSESSEE AT .26,27,377/ - . THE ASSESSEE WAS REQUESTED TO FILE ITS OBJECTIONS, IF ANY, TO THE PROPOSED ASSESSMENT ON OR BEFORE 09.11.2009. ON 09.11.2009, THE ASSESSEE HAS FILED ONLY TWO PAGE LETTER AND THE RECONCILIATION STATEMENT BETWEEN T DS CERTIFICATE AND TURNOVER WITHOUT ANY EVIDENCE AT ALL. AFTER CONSIDERING THE CONTENTION OF THE LETTER FILED BY THE ASSESSEE, THE ASSESSMENT UNDER SECTION 144 OF THE ACT WAS COMPLETED BY DETERMINING TOTAL INCOME OF THE ASSESSEE AT .21,82,810/ - AFTER MAKI NG VARIOUS ADDITIONS/DISALLOWANCES. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND RAISED VARIOUS GROUNDS. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A) PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE. I.T.A. NO . 2009 /M/ 14 3 4. O N BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. FIRST WE SHALL DECIDE THE ISSUE RELATING TO ASSUMPTION OF JURISDICTION U NDER SECTION 144 OF THE ACT. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER PROPOSED ASSESSMENT UNDER SECTION 144 OF THE ACT AND COMMUNICATED TO THE ASSESSEE FOR FILINGS ITS OBJECTION, IF ANY. HOWEVER, THE ASSESSING OFFICER FAILED TO INDICATE UNDER WHAT CI RCUMSTANCES THE ASSESSING OFFICER PROCEEDED TO PROPOSE FOR BEST JUDGEMENT ASSESSMENT. THE ASSESSING OFFICER HAS NOT MENTIONED ANYTHING AS TO WHETHER THE ASSESSEE FAILED TO FILE THE RETURN OF INCOME EITHER UNDER SECTION 139(1) OR 139(4) OR 139(5) OF THE ACT OR FAILED TO COMPLY WITH ALL THE TERMS OF NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT OR 143(2) OF THE ACT ARE AVAILABLE. THE ASSESSING OFFICER HAS RIGHT TO PASS BEST JUDGMENT ASSESSMENT IN VIEW OF THE PROVISIONS OF SECTION 144 OF THE ACT AND THE SAID P ROVISIONS IS REPRODUCED HEREUNDER: 144. (1) IF ANY PERSON (A) FAILS TO MAKE THE RETURN REQUIRED UNDER SUB - SECTION (1) OF SECTION 139 AND HAS NOT MADE A RETURN OR A REVISED RETURN UNDER SUB - SECTION (4) OR SUB - SECTION (5) OF THAT SECTION, OR (B) FAILS TO C OMPLY WITH ALL THE TERMS OF A NOTICE ISSUED UNDER SUB - SECTION (1) OF SECTION 142 OR FAILS TO COMPLY WITH A DIRECTION ISSUED UNDER SUB - SECTION (2A) OF THAT SECTION, OR (C) HAVING MADE A RETURN, FAILS TO COMPLY WITH ALL THE TERMS OF A NOTICE ISSUED UNDER SUB - SECTION (2) OF SECTION 143, THE ASSESSING OFFICER, AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL WHICH THE ASSESSING OFFICER HAS GATHERED, SHALL, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD, MAKE THE ASSESSMENT OF THE TOTAL INCOME OR LOSS TO THE BEST OF HIS JUDGMENT AND DETERMINE THE SUM PAYABLE BY THE ASSESSEE ON THE BASIS OF SUCH ASSESSMENT : I.T.A. NO . 2009 /M/ 14 4 PROVIDED THAT SUCH OPPORTUNITY SHALL BE GIVEN BY THE ASSESSING OFFICER BY SERVING A NOTICE CALLING UPON THE ASSESSEE TO SHOW CAUSE, ON A DATE AND TIM E TO BE SPECIFIED IN THE NOTICE, WHY THE ASSESSMENT SHOULD NOT BE COMPLETED TO THE BEST OF HIS JUDGMENT: PROVIDED FURTHER THAT IT SHALL NOT BE NECESSARY TO GIVE SUCH OPPORTUNITY IN A CASE WHERE A NOTICE UNDER SUB - SECTION (1) OF SECTION 142 HAS BEEN ISSUED PRIOR TO THE MAKING OF AN ASSESSMENT UNDER THIS SECTION. (2) THE PROVISIONS OF THIS SECTION AS THEY STOOD IMMEDIATELY BEFORE THEIR AMENDMENT BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987 (4 OF 1988), SHALL APPLY TO AND IN RELATION TO ANY ASSESSMENT FOR TH E ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1988, OR ANY EARLIER ASSESSMENT YEAR AND REFERENCES IN THIS SECTION TO THE OTHER PROVISIONS OF THIS ACT SHALL BE CONSTRUED AS REFERENCES TO THOSE PROVISIONS AS FOR THE TIME BEING IN FORCE AND APPLICABLE TO THE RELEVANT ASSESSMENT YEAR. 6. IN TOTALITY, THE ASSESSMENT ORDER IS VERY CRYPTIC AND WITHOUT CONTAINING ALL THE DETAILS AS ENUNCIATED UNDER THE ABOVE PROVISIONS , THE ASSESSING OFFICER MADE THE ASSESSMENT . THE ASSESSEE HAS VERY MUCH OBJECTED DURING THE COURSE OF FIRST APPELLATE PROCEEDINGS WITH REGARD TO FRAMING ASSESSMENT UNDER SECTION 144 OF THE ACT . HOWEVER, IN THE APPELLATE ORDER, THE LD. CIT(A) HAS NOT RECORDED ANYTHING AS TO WHETHER HE HAS CALLED FOR THE RECORDS FROM THE ASSESSING OFFICER TO V ERIFY THE ASSESSMENT ORDER PASSED UNDER SECTION 144 OF THE ACT SATISFIES THE BASIC REQUIREMENTS OF THE PROVISIONS OF THE ACT OR NOT? WE ARE OF THE OPINION THAT THE ORDERS OF AUTHORITIES BELOW SHOULD CONTAIN ALL DETAILS WHICH BECOME AUTHENTICITY FOR THE FIN AL FACT S FINDING AUTHORITY TO PROCEED TO DECIDE THE APPEAL OF THE ASSESSEE/REVENUE. IN THE ABSENCE OF RECORDING REASONS FOR FRAMING ASSESSMENT UNDER SECTION 144 OF THE ACT, WE SET ASIDE THE ORDER PASSED BY THE AUTHORITIES BELOW AND DIRECT I.T.A. NO . 2009 /M/ 14 5 THE ASSESSING OFFICER TO PASS A SPEAKING ORDER CONTAINING THE COMPLIANCE WITH REGARD TO SERVICE OF NOTICE UNDER SECTION 142(1) OF THE ACT, 143(2) OF THE ACT, ETC. AND DETAILS OF OPPORTUNITIES OFFERED TO THE ASSESSEE FOR FILING RELEVANT DETAILS AS REQUIRED TO COMPLETE THE REGULAR ASSESSMENT. THE ASSESSEE SHOULD BE AFFORDED SUFFICIENT OPPORTUNITIES OF BEING HEARD TO FILE ALL THE DETAILS BEFORE COMPLETING THE ASSESSMENT. IF THE ASSESSEE FAILS TO FURNISH COMPLETE DETAILS, THE ASSESSING OFFICER IS AT LIBERTY TO PASS ORDER AFTER CONSIDERING THE MATERIALS AVAILABLE ON RECORD IN ACCORDANCE LAW. SINCE WE HAVE SET ASIDE THE ORDERS OF AUTHORITIES BELOW WHILE DECIDING THE ISSUE WITH REGARD TO ASSUMPTION OF JURISDICTION UNDER SECTION 144 OF THE ACT, THE OTHER GROUNDS RAISED IN THE APPEAL OF THE ASSESSEE REQUIRES NO ADJUDICATION BY US 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED ON THE 29 TH APRIL , 201 6 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUN TANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 29 . 0 4 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.