Sri. P.A. Rajeshmani, Palakkad V. The ITO, Palakkad

ITA 202/COCH/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7733 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 26-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: T M SREEDHARAN
• Keywords: Revision of order; Opportunity of being heard; Principle of natural justice; Period of limitation
• Section: 143(3); 148; 263; 63

Judgement Text

ITA NO . 202/COCH/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH KOCHI BEFORE S/ SHRI B P JAIN , AM & GEORGE GEORGE K, JM ITA NO . 202/COCH/2016 (A SST YEAR 2008 - 09 ) SHRI P A RAJESHMANI PROP : AIWARYA AGENCY BAVA NIVAS THATTAKKATUTHARA KODUVAYUR PALAKKAD 678 501 VS THE PRINCIPAL COMMISSIONER OF INCOME TA X THRISSUR 680 001 ( APPELLANT) (RESPONDENT) PAN NO. AMQPP0806M ASSESSEE BY SH T M SREEDHARAN REVENUE BY SH A DHANARAJ, SR DR DATE OF HEARING 29 TH AUG 2016 DATE OF PRONOUNCEMENT 29 TH AUG 2016 ORDER PER GEORGE GEORGE K,JM: THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE IS DIRECTED AGAINST THE CIT S ORDER DATED 31.3.2016 PASSED U/ S 263 OF THE I T ACT. THE RELEVANT ASSESSMENT YEAR IS 2008 - 09. 2 THE BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM WHOLE SALE LOTTERY BUSINESS . FOR THE ASSESSMENT YEAR 20089 - 09, THE RETURN OF INCOME WAS FILED ON 18.3.2010 DECLARING TOTAL I NCOME OF RS. 1 ,77,980/ - . THE ASSESSMENT U/S 143(3) ITA NO . 202/COCH/2016 2 WAS COMPLETED VIDE ORDER DATED 30.12.2010 , ACCEPT ING THE RETURNED INCOME . THEREAFTER, NOTICE U/S 148 WAS ISSUED ON 15.3.2013 AND THE REASSESSMENT U/S 143(3) R.W.S 147 WAS COMPLETED BY DETERMINING THE TOTAL INCOME AT RS. 9,07,680/ - . THE AO HAD MADE AN ADDITION OF RS. 7,29,700/ - , WHICH WAS CHALLENGED IN APPEAL BEFORE THE CIT(A). 3 WHEN THE APPEAL WAS PENDING BEFOR E T HE C IT ( A), THE ADMINISTRATIVE COMMISSIONER ISSUED NOTICE U/S 263 AND SET ASIDE THE ASSESSMENT ORDER DATED 27.3.2014. THE CIT DIRECTED THE AO TO EXAMINE WHETHER THE C OMMISSION PAID TO 45 PERSONS AMOUNTING TO RS. 7,29,700/ - WAS IN COMPLIANCE WITH THE PROVISIONS OF SECTION 194G OF THE ACT. THE CIT FURTHER DIRECTED THE AO TO EXAMINE THE CASH DEPOSITED IN THE ASSESSEE S BANK ACCOUNT , TO THE EXTENT OF RS. 56.17 LACS. 4 A GGRIEVED BY THE ORDER OF THE CIT PASSED U/S 263 OF THE ACT , THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS: 1 THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX , T HRISSUR, PASSED U/S 263 OF THE I T ACT, 1961 DATED 31.3.2016 WITH REFERENCE TO THE ASST. YEAR 2008 - 09 IS OPPOSE D TO LAW FACTS AND CIRCUMSTANCES OF THE CASE. 2 THE IMPUGNED ORDER DATED 31 . 3 . 2016 IS PASSED IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND THE STATUTORY PROVISIONS CONTAINED IN SECTION 263 OF THE ACT AND AS SUCH ILLEGAL AND INVALID . 3 IT IS SUBMITTED THAT THE ASSUMPTION OF JURISDICTION AND ISSUANCE OF NOTICE IS ALSO ARBITRARY AND ILLEGAL . NO VALID NOTICE AS CONTEM PLATED IN LAW IS SERVED ON THE APPELLANT BEFORE THE PERIOD OF LIMITATION AND AS SUCH , THE ASSUMPTION OF JURISDICTION U/S . 2 63 IS ALSO ILLEGAL AND INVALID . 4 WITHOUT PREJUDICE , IT IS SUBMITTED THAT THE NOTICE DATED 18 . 3 . 2016 CANNOT BE CONSIDERED AS A VALID NOTICE U/S . 263 IN AS MUCH AS THE SAME WAS NOT COMMUNICATED TO THE APPELLANT BY AFFORDING REASONABLE OPPORTUNITY BEFORE SO' ITA NO . 202/COCH/2016 3 MARCH , 2016 SO AS TO ENABLE THE PRINCIPAL COMMI SSIONER TO ASSUME JURISDICTION U/S . 263 . THE NOTICE IS ALSO INVALID IN AS MUCH AS THE REQUIREMENT OF SECTION 263 OF THE ACT AS REGARDS GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WITHIN THE PERIO D OF LIMITATION WAS NOT COMPLIED WITH . 5 ON ALL THESE GROUNDS , THE IMPUGNED ORDER PASSED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX IS AB INITIO VOID AND NON - EST IN LAW . 6 WITHOUT PREJUDICE TO THE CONTENTIONS RAISED ABOVE , IT IS RESPECTFULLY SUBMITTED THAT THERE IS NO BASIS FOR THE PRINCIPAL COMMISSIO NER OF INCOME TAX TO RELY UPON THE GROUND NOS . 1 AND 2 OF THE SHOW CAUSE NOTICE RELATING TO PAYMENT OF COMMISSION OF RS . 7 , 29 , 700/ - WHICH IS ALREADY ADDED IN THE RE - ASSESSMENT ORDER U/S . 148 AND IS THE SUBJECT MATTER OF APPEAL BEFORE THE CIT (A) , THRISSUR IN ITA NO . 13/14 - 15 . 7 AS REGARDS GROUND NO . 3 , THERE IS NO MATER IAL BEFORE THE COMMISSIONER TO ASSUME THAT THE BANK ACCOUNTS WERE NOT EXAMINED BY THE ASSESSI NG OFFICER . IN THE ASST . ORDER U/S . 143 ( 3 ) VIDE PARA 2 , THERE IS CLEAR FINDING THAT A L L THE DETAILS CALLED FOR DURING THE COURSE OF THE ASST . PROCEEDINGS WERE FURNISHED AND VERIFIED . MOREOVER , THE ASSESSMENT WAS ALSO THE SUBJECT MATTER OF RE - ASSESSMENT . THERE IS VIOLATION ON THE PART OF THE PRINCIPAL COMMISSIONER TO EXAMINE THE BOOKS BEFORE MAKING THE ABOVE OBSERVATION AND AS SUCH , THAT GROUND IS ALSO NOT SUSTAINABLE , THEREBY MAKING THE ENTIRE NOTICE ARBITRARY AND WITHOUT BASIS . FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING , IT IS HUMBLY PRAYED THAT THE HON BLE INCOME TAX APPELLATE TRIBUNAL , COCHIN BENCH, COCHIN MAY KINDLY BE PLEASED TO SET ASIDE THE ORDER PASSED U/S 263 DATE D 31.3.2016, ALLOW THE APPEAL AND RENDER JUSTICE. 5 THE L D COUNSEL FOR THE ASSESSEE RELIED ON THE GROUNDS RAISED; WHEREAS THE LD DR SUPPORTED THE ORDER OF THE CIT. 6 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECOR D. IT IS A CLAM OF THE ASSESSEE THAT THOUGH THE REVISIONARY PROCEEDINGS U/S 263 IS INITIATED BY NOTICE DATED 18.3.2016 , THE NOTICE WAS ACTUALLY COMMUNICATED TO THE ASSESSEE AND HIS CHARTERED ACCOUNTANT ONLY ON 30.3.2016. IT WAS SUBMITTED THAT THE CA, WHO HAD ACKNOWLEDGED THE RECEI PT OF THE SAME AT 7.12 PM ON ITA NO . 202/COCH/2016 4 30. 3 .2016 HAD SOUGHT FOR ADJOURNMENT OF THE CASE , SINCE SUPPORTING MATERIALS WERE TO BE PRODUCED AT THE TIME OF HEARING. THE CIT , WITHOUT GRANTING ANY FURTHER OPPORTUNITY, PASSED ORDER US 263 OF THE A CT ON T HE VERY NEXT DAY I.E. 31.3.2016 . IT WAS S UBMITTED THAT THE ORDER PASSED U/S 263 OF THE AC T IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND NE E DS TO BE QUASHED . THE ASSESSEE HAS ALSO FILED AN AFFIDAVIT ( IN TH E S TAY PETITION ) TO THE E FFECT THAT NOTICE INITIATING 263 PROCEEDINGS WAS SERVED ONLY ON 30.3.2016 AND THE REVISIONARY ORDER WAS PASSED NEXT DAY WITHOUT GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. WE ARE OF THE VIEW THAT IN THE FACTS OF THE PRESENT CASE THERE IS A VIOLAT ION OF PRINCIPLES OF NATURAL JUSTICE AND IN THE INTEREST OF JUSTICE AND EQUITY, ONE MORE OPPORTUNI TY SHOULD BE GRANTED TO THE ASSESSEE TO REPRESENT HIS CASE PROPERLY BEFORE THE CIT. THEREFORE, WE SET ASIDE THE ORDER PASSED BY THE CIT U/S 263 AND RESTORED THE MATTER TO THE CIT. THE CIT SHALL PASS FRESH R EVISIONARY ORDER U/S 263 AFTER AFFORDING REASONABLE OPPORTUNITY OF H E ARING TO THE ASSESSEE. IT IS ORDERED ACCORDINGL Y . 7 IN THE RESULT , THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF AUG 2016 . ( B P JAIN ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: DATED 29 TH AUG 2016 RAJ* ITA NO . 202/COCH/2016 5 ITA NO . 202/COCH/2016 6 COPY TO: 1 . APPELLANT 2 . R ESPONDENT 3 . CIT(A) 4 . CIT, 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN 1 DATE OF DICTATION 29 AUG 2016 2 DT ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 29 AUG 2016 3 DT ON WHICH THE APPROVED DRAFT COMES TO THE SR PS/PS 4 DT ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER 5 DT OF PRONOUNCEMENT 6 DT ON WHICH THE FILE GOES TO THE BENCH CLERK 7 DT ON WHICH THE FILE GOES TO THE HEAD CLERK 8 DT ON WHICH THE FILE GOES TO AR 9 DT OF DISPATCH OF THE OR DER