DCIT, CHENNAI V. Hemlatha Enterprises Pvt. Ltd., CHENNAI

ITA 2072/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8172 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 08-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B SAHADEVAN
• Assessee Lawyers: S DEEPA
• Section: 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . . !' , # $% BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO.2072/MDS/2016 & '& /ASSESSMENT YEAR : 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -2(1), INVESTIGATION WING, 46, NUNGAMBAKKAM HIGH ROAD, CHENNAI 600 035. V. M/S.HEMALATHA ENTERPRISES PVT.LTD., NO.12, CAVIN VILLE, CENOTAPH ROAD, TEYNAMPET, CHENNAI 600 018. PAN: AAACD 2714 R ( () /APPELLANT) ( *+() /RESPONDENT) () , - /APPELLANT BY : SHRI B.SAHADEVAN, JCIT *+(),- /RESPONDENT BY : MS.S.DEEPA, C.A. ,.# /DATE OF HEARING : 27.09.2016 /0' ,.# /DATE OF PRONOUNCEMENT : 28.10.2016 /O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-6, CHENNAI DATED 22.04.2016 AND PERTAINS TO ASSESSMENT YEAR 2011-12. 2 I.T.A. NO.2072/MDS/2016 2. SHRI B.SAHADEVAN, THE LEARNED DEPARTMENT REPRESE NTATIVE SUBMITTED THAT THE CIT(A) DISMISSED THE APPEAL AS W ITHDRAWN BY AN ORDER DATED 30.11.2015. SUBSEQUENTLY, THE ASSESSEE FILED A MISCELLANEOUS PETITION UNDER SECTION 154 OF THE ACT AND THE CIT(A) FOUND THAT THERE WAS A REFERENCE ABOUT THE SALE TO THE EX TENT OF 2,06,33,000/- IN THE FINANCIAL STATEMENT FILED BY THE ASSESSEE. T HE CIT(A) WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSING OFFICER HAS ALLOWED THE CLAIM OF THE ASSESSEE. NO VERIFICATION ALSO WAS MADE. THEREF ORE, THE LEARNED DEPARTMENT REPRESENTATIVE SUBMITTED THAT THE MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. 3. ON THE CONTRARY, MS.S.DEEPA, THE LEARNED REPRESE NTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS NOT DECLARED RS.2,06,33,000/- BEING THE DIFFERE NCE OF SALE MADE TO SISTER CONCERN NAMELY M/S.CAVINKARE PRIVATE LIMITED AS UNACCOUNTED SALES IN THE HANDS OF THE ASSESSEE AND THE SAME WAS ADDED TO THE TOTAL INCOME. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) . DURING THE PENDENCY OF THE ASSESSEES APPEAL BEFORE CIT(A), T HE ASSESSING OFFICER PASSED AN ORDER UNDER SECTION 154 OF THE ACT. THE A SSESSEE FELT THAT THE ASSESSING OFFICER GRANTED RELIEF TO THE ASSESSSEE I N THE PROCEEDING UNDER 3 I.T.A. NO.2072/MDS/2016 SECTION 154. ACCORDINGLY, THE APPEAL OF THE ASSESSE E BEFORE CIT(A) WAS WITHDRAWN. SUBSEQUENTLY, THE ASSESSEE FOUND THAT TH E DISALLOWANCE MADE BY THE ASSESSING OFFICER TO THE EXTENT OF RS.2 ,06,33,000/- AS UNDISCLOSED SALES IS NOT CORRECT AND THE ASSESSEE H AS FILED THE FINANCIAL STATEMENT OF THE ASSESSEE COMPANY BEFORE THE CIT(A) IN PROCEEDING UNDER SECTION 154. THE CIT(A) AFTER CONSIDERING THE FINANCIAL STATEMENT FILED BY THE ASSESSEE ALLOWED THE CLAIM OF THE ASSE SSEE. ON A QUERY FROM THE BENCH, WHETHER CIT(A) HAS POWER TO GRANT PERMIS SION TO WITHDRAW THE APPEAL FILED BY THE ASSESSEE, THE LEARNED REPRE SENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE CIT(A) HAS NO POWER TO GRANT PERMISSION TO WITHDRAW THE APPEAL AND THE CIT(A) OUGHT TO HAVE DI SPOSED OFF THE APPEAL ON MERIT. SINCE THE CIT(A) HAS NOT DISPOSED OFF THE APPEAL ON MERIT, THE LEARNED REPRESENTATIVE SUBMITTED THAT TH E MATTER MAY BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR RE-CONSIDERATION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDL Y, THE ASSESSEE CHALLENGED THE ADDITION MADE BY THE ASSESSING OFFIC ER TO THE EXTENT OF RS.2,06,33,000/- BEFORE THE CIT(A). THE APPEAL FILE D BY THE ASSESSEE WAS WITHDRAWN. AS RIGHTLY SUBMITTED BY THE REPRESEN TATIVE FOR THE ASSESSEE, THE CIT(A) HAS NO POWER TO DISMISS THE AP PEAL AS WITHDRAWN. WHEN THE ASSESSEE FILED THE APPEAL, IT IS FOR THE C IT(A) TO EXAMINE THE 4 I.T.A. NO.2072/MDS/2016 SAME ON MERIT AND DISPOSE OF THE SAME IN ACCORDANCE WITH LAW. WHEN THE PARLIAMENT SPECIFICALLY CONFERRED POWER TO ENHA NCE THE ASSESSMENT ON THE CIT(A), THIS TRIBUNAL IS OF THE CONSIDERED O PINION THAT THE CIT(A) CANNOT ALLOW THE ASSESSEE TO WITHDRAW THE APPEAL. T HEREFORE, THE CLAIM OF THE ASSESSEE TO THE EXTENT OF RS.2,06,33,000/- B EING THE UNDISCLOSED SALES HAS TO BE DISPOSED OFF ON MERIT. THE CIT(A) A LLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 154 OF THE ACT, WITHOUT GIVI NG ANY OPPORTUNITY TO THE ASSESSING OFFICER. THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT THE PROCEEDING UNDER SECTION 154 IS TO RECTIFY A PRIMA FACIE ERROR WHICH IS APPARENT ON THE FACE OF THE RECORD. SINCE THE CIT(A ) HAS NOT CONSIDERED THE APPEAL ITSELF ON MERIT AND DISMISS THE SAME AS WITHDRAWN, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE MATT ER NEEDS TO BE RE- CONSIDERED. ACCORDINGLY, ADDITION OF RS.2,06,33,000 /- TOWARDS UNDISCLOSED SALES HAS TO BE RE-CONSIDERED BY THE AS SESSING OFFICER ON THE BASIS OF THE FINANCIAL STATEMENT SAID TO BE FILED B EFORE CIT(A). ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES AR E SET ASIDE. THE DISALLOWANCE OF RS.2,06,33,000/- IS REMITTED BACK T O THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-E XAMINE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AND IN THE LIGHT OF THE FINA NCIAL STATEMENT FILED BY THE ASSESSEE AND THEREAFTER DECIDE THE SAME AFTER G IVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 5 I.T.A. NO.2072/MDS/2016 5. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 28 TH OCTOBER, 2016 AT CHENNAI. SD/- SD/- ( . . !' ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) # /ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 1 /DATED, THE 28 TH OCTOBER, 2016. SP. , *.!2 32'. /COPY TO: 1. () /APPELLANT 2. *+() /RESPONDENT 3. 4. ( )/CIT(A) 4. 4. /CIT, 5. 25 *. /DR 6. & 6 /GF.