ACIT, Kanpur V. M/s. J.B. Lottery, Kanpur

ITA 208/LKW/2010

• Counselvise Citation: 20823714 RSA 2010
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-04-2011
• Assessment Year: misc
• Appeal Filed On: 26-03-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A : LUCKNOW BEFORE SHRI H. L. KARWA, HONBLE VICE PRESIDENT AND SHRI N. K. SAINI, ACCOUNTANT MEMBER I.T.A. NOS.208 & 602/LKW/10 A.Y. :BLOCK PERIOD ENDING ON 17/10/97 A.C.I.T., VS. M/S J. B. LOTTERY, CENTRAL CIRCLE-2, 120/106A, LAJPAT NAGAR, KANPUR. KANPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRAVEEN KUMAR, D. R. RESPONDENT BY: SHRI ABHINAV MEHROTRA, C. A. ORDER PER N. K. SAINI: THESE TWO APPEALS BY THE DEPARTMENT ARE DIRECTED A GAINST THE SEPARATE ORDERS DATED 10/01/2010 AND 07/07/2010 OF THE CIT ( A)-I, KANPUR. FIRST WE WILL DEAL WITH I.T.A. NO.208/LKW/10. IN THIS APPEAL THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE ORDER OF THE CIT (A)-I, KANPUR IS PERV ERSE IN AS MUCH AS HE CONFIRMS THE ACTION OF THE ASSESSING OFF ICER IN THE BODY OF THE ORDER BUT IN THE END HE HAS ALLOWED THE APPEAL. 2. THAT THE CIT (A)-I, KANPUR IN PARA 5 OF THE ORDE R HAS CLEARLY HELD THAT THE CASE OF THE APPELLANT IS COVERED IN C ATEGORY (I) AS DIRECTED BY THE TRIBUNAL BUT HAS STILL ALLOWED T HE APPEAL WHERE AS, AS PER ITATS DIRECTION IF THE NOTICE FEL L IN THE CATEGORY (I) THEN ASSESSMENTS IN THE STATUS OF FIRM WAS A VALID ASSESSMENT. 2 3. THAT THE ORDER OF THE LEARNED CIT (A)-I, KANPUR BEING ERRONEOUS IN LAW AND ON FACTS BE VACATED AND THE OR DER OF THE ASSESSING OFFICER BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO AMEND ANY ONE OR MORE OF THE GROUNDS OF THE APPEAL AS STATED ABOVE AS AND WHEN NEED FOR DOING SO MAY ARISE. 2. THE FACTS RELATED TO THIS CASE, IN BRIEF, ARE TH AT A SEARCH WAS CONDUCTED IN THE CASE OF SHRI BHUPINDER SINGH, ONE OF THE PARTNE RS OF THE ASSESSEE ON 17/10/97 AND BOOKS OF ACCOUNT AND CERTAIN OTHER DOC UMENTS WERE SEIZED WHICH CONTAINED THE TRANSACTION OF THE ASSESSEE. THE ASS ESSING OFFICER ISSUED THE NOTICE U/S 158BC READ WITH SECTION 158BD OF THE I.T . ACT ON 11/11/99. IN RESPONSE TO THAT THE ASSESSEE FILED THE RETURN FOR THE BLOCK PERIOD DISCLOSING AN INCOME OF ` 1,96,350/- ON 05/09/2001. THE ASSESSING OFFICER FR AMED THE ASSESSMENT VIDE ORDER DATED 28/11/2001 AT AN INCOME OF ` 12,18,468/- IN THE STATUS OF THE FIRM. 3. BEING AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A) AND CLAIMED THAT THE STATUS SHOULD HAVE BEEN AOP AN D NOT AS FIRM. THE LEARNED CIT (A), VIDE ORDER DATED 07/02/2002, DIRECTED THE ASSESSING OFFICER TO WORK OUT THE TAX LIABILITY TREATING THE ASSESSEE AS AN AOP A ND NOT AS A FIRM. AGAINST THE SAID ORDER OF THE LEARNED CIT (A), THE ASSESSEE PRE FERRED AN APPEAL TO THE ITAT IN I.T.A. NO.385/LUC/02 WHEREIN THE ISSUE RELATING TO THE STATUS WAS RESTORED TO THE LEARNED CIT (A) VIDE ORDER DATED 22/02/2009 BY GIVING THE DIRECTION AS UNDER: 3 AFTER HAVING CONSIDERED THE RIVAL SUBMISSIONS AND THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS THE VARIOUS DE CISIONS RELIED UPON BY THE LD. A.R., WE ARE OF THE OPINION THAT TH ERE IS NO DOUBT AS TO THE PROPOSITION OF LAW LAID DOWN BY THE HON'BLE HIGH COURTS INCLUDING THE HON'BLE JURISDICTIONAL HIGH COURT OF ALLAHABAD THAT AN ASSESSMENT FRAMED IN A STATUS DIFFERENT THAN THE ST ATUS CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME, CANNOT BE SUS TAINED IN LAW AND IS LIABLE TO BE CANCELLED BUT SO FAR AS THE PRE SENT CASE IS CONCERNED, WE ARE OF THE OPINION THAT A VITAL FACT WHICH RELATES TO THE STATUS IN WHICH UNDER SECTION 158BC OF THE ACT WAS ISSUED HAS NOT BEEN BROUGHT ON RECORD BY EITHER OF THE PARTIES . THIS FACT IS VITAL BECAUSE (I) IF THE NOTICE UNDER SECTION 158BC ITSEL F WAS ISSUED IN THE STATUS OF FIRM, THEN THE A.O. MAY BE JUSTIFIED IN COMPLETING THE ASSESSMENT IN THE STATUS OF FIRM, BUT IN THAT CASE HE SHOULD NOT CONSIDER THE RETURN FILED IN THE STATUS OF AOP, (II ) IN CASE THE NOTICE WAS ISSUED IN THE STATUS OF INDIVIDUAL, THEN THE AS SESSMENT FRAMED IN THE STATUS OF FIRM IS LIABLE TO BE CANCELLED AND (III) IF THE NOTICE UNDER SECTION 158BC WAS ISSUED IN THE STATUS OF AOP OR WITHOUT MENTIONING ANY STATUS, THEN THE A.O WAS BOUND TO MA KE ASSESSMENT IN THE STATUS OF AOP AS CLAIMED BY THE A SSESSEE IN THE RETURN FURNISHED IN RESPONSE TO NOTICE UNDER SECTIO N 158BC OF THE ACT AND IN THAT CASE ALSO THE ASSESSMENT FRAMED IN THE STATUS OF A FIRM IS LIABLE TO BE CANCELLED. SINCE THE FACT OF S TATUS MENTIONED IN THE NOTICE UNDER SECTION 158BC IS TO BE VERIFIED, W E, IN THE INTEREST OF JUSTICE, RESTORE THIS ISSUE BACK TO THE FILE OF THE CIT(A) WITH THE DIRECTIONS THAT HE WILL DECIDE THE ISSUE AFTER VERI FYING THE STATUS IN WHICH NOTICE UNDER SECTION 158BC OF THE ACT HAD BEE N ISSUED IN ACCORDANCE WITH LAW AND ALLOWING A PROPER OPPORTUNI TY OF BEING HEARD TO THE PARTIES. 3.1 IN COMPLIANCE TO THE SAID DIRECTION, THE LEARNE D CIT (A) DECIDED THE ISSUE BY OBSERVING IN PARA 5 OF THE IMPUGNED ORDER AS UND ER: 5. A PERUSAL OF THE NOTICE AND RECORD SHOWS THAT THE NOTICE U/S 158BD ISSUED IN THIS IS IN THE CATEGORY OF '(I) IF THE NOTICE U/S 158BC ITSELF WAS ISSUED IN THE STATUS OF FIRM THEN THE AO MAY BE JUSTIFIED IN COMPLETING THE ASSESSMENT IN TH E STATUS OF FIRM BUT IN THAT CASE HE SHOULD NOT CONSIDER THE RETURN FILED IN THE STATUS OF AOP' BECAUSE AS REPRODUCED ABOVE T HE CATEGORIES OF STATUS APPEARING IN THE NOTICE ARE AL L APPEARING AS STROKE OFF. IN VIEW OF ABOVE DISCUSSION, I FIND THAT THE 4 CASE OF THE APPELLANT IS COVERED IN CATEGORY (I) AS DESCRIBED IN THE ORDER OF THE HON'BLE TRIBUNAL IN ITA NO.385(LUC.)/2002 DATED 22.10.2009. ACCORDINGLY, TH E ORDER OF HON'BLE TRIBUNAL IN TERMS OF CATEGORY (I) OF PARA-4 ABOVE IS APPLICABLE AND IN EFFECT THE MATTER WHICH WAS RESTORED BACK TO THE FILE OF CIT (A) FOR VERIFICATI ON, RESULTS IN APPEAL ALLOWED. NOW THE DEPARTMENT IS IN APPEAL. 4. THE LEARNED D. R. SUBMITTED THAT THE LEARNED CIT (A), IN THE IMPUGNED ORDER, HAS CONFIRMED THE ORDER OF THE ASSESSING OFF ICER AND THE STATUS OF THE ASSESSEE AS FIRM HAS BEEN UPHELD, THEREFORE, THE APPEAL OF THE ASSESSEE WAS DISMISSED BECAUSE THE ASSESSEE CLAIMED THAT THE STA TUS SHOULD HAVE BEEN AOP. IT WAS SUBMITTED THAT THE LEARNED CIT (A) W RONGLY MENTIONED IN THE IMPUGNED ORDER THAT THE APPEAL IS ALLOWED INSTEAD O F APPEAL IS DISMISSED. HE, THEREFORE, SUBMITTED THAT THE DIRECTION MAY BE GIVE N TO THE LEARNED CIT (A) TO GIVE THE CORRECT FINDING FOR THE SAID RESULT. 5. IN HIS RIVAL SUBMISSIONS, THE LEARNED COUNSEL FO R THE ASSESSEE SUBMITTED THAT IN THE NOTICE ISSUED U/S 158BC, NO STATUS WAS MENTIONED, THEREFORE, THE CASE OF THE ASSESSEE FALLS IN THE CATEGORY (III) OF THE DIRECTIONS ISSUED BY THE ITAT. AS SUCH, THE LEARNED CIT (A) WAS JUSTIFIED IN MENTIONI NG THAT THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT C ASE, IT IS NOT IN DISPUTE THAT THE ITAT, VIDE ITS ORDER DATED 22/10/2009 IN I.T.A. NO. 385/LUC/02, RESTORED THE ISSUE 5 RELATING TO THE STATUS OF THE ASSESSEE TO THE FILE OF THE LEARNED CIT (A) BY GIVING THE FOLLOWING THREE DIRECTIONS: 'THIS FACT IS VITAL BECAUSE (I) IF THE NOTICE U/S 1 58BC ITSELF WAS ISSUED IN THE STATUS OF FIRM, THEN THE AO MAY BE JU STIFIED IN COMPLETING THE ASSESSMENT IN THE STATUS OF FIRM BUT IN THAT CASE HE SHOULD NOT CONSIDER THE RETURN FILED IN THE STATUS OF AOP (II) IN CASE THE NOTICE WAS ISSUED IN THE STATUS OF INDIVIDUAL, THEN THE ASSESSMENT FRAMED IN THE STATUS OF FIRM IS LIABLE T O BE CANCELLED AND (III) IF THE NOTICE UNDER SECTION 158BC WAS ISS UED IN THE STATUS OF AOP OR WITHOUT MENTIONING ANY STATUS, THEN THE A O WAS BOUND TO MAKE ASSESSMENT IN THE STATUS OF AOP AS CLAIMED BY THE ASSESSEE IN THE RETURN FURNISHED IN RESPONSE TO NOTICE UNDER SECTION 158BC OF THE ACT AND IN THAT CASE ALSO THE ASSESSMENT FRAMED IN THE STATUS OF A FIRM IS LIABLE TO BE CANCELLED. 6.1 THE LEARNED CIT (A), WHILE ADJUDICATING THIS IS SUE VIDE PARA 5 OF THE IMPUGNED ORDER FOR THE BLOCK PERIOD ENDING ON 17/10 /97, HAS STATED THAT THE NOTICE WAS ISSUED IN THE STATUS OF THE FIRM. AT TH E SAME TIME HE HAS MENTIONED THAT THE CATEGORIES OF STATUS APPEARING IN THE NOTI CE ARE ALL APPEARING AS STRUCK OFF. SO IT IS NOT CLEAR HOW HE CAME TO THE CONCLUS ION THAT THE STATUS MENTIONED IN THE NOTICE U/S 158BC WAS A FIRM, IN OTHER WORDS, TH E NOTICE U/S 158BC WAS ISSUED TO THE ASSESSEE IN THE STATUS OF THE FIRM. IF THAT HAS BEEN THE FINDING OF THE LEARNED CIT (A), THEN THE RESULT OF THE APPEAL FILE D BY THE ASSESSEE SHOULD HAVE BEEN DISMISSED AND NOT ALLOWED PARTICULARLY WHEN TH E CLAIM OF THE ASSESSEE WAS THAT IT IS AN A.O.P. NOT A FIRM WHICH IS ALSO A PPARENT FROM GROUNDS OF APPEAL RAISED BY THE ASSESSEE BEFORE THE LEARNED CIT (A). ON PERUSAL OF THE OBSERVATIONS GIVEN BY THE LEARNED CIT (A) IN PARA 5 OF THE IMPUGNED ORDER, IT IS CRYSTAL CLEAR THAT A CONTRADICTORY FINDING HAS BEEN GIVEN BY THE LEARNED CIT (A). 6 ON THE ONE HAND HE HAS STATED THAT CATEGORIES OF ST ATUS APPEARING IN THE NOTICE ARE ALL APPEARING AS STRUCK OF, ON THE OTHER HAND H E IS SAYING THAT THE NOTICE U/S 158BC WAS ISSUED TO THE ASSESSEE IN THE STATUS OF F IRM. WE, THEREFORE, CONSIDERING THE TOTALITY OF THE FACTS, ARE OF THE V IEW THAT THIS ISSUE REQUIRES READJUDICATION AT THE PART OF THE LEARNED CIT (A) A FTER PROPER VERIFICATION FROM THE RECORD. IT IS ALSO RELEVANT TO MENTION THAT THE CO PY OF THE NOTICE ISSUED U/S 158BC OF THE I.T. ACT WAS NOT PLACED BEFORE THIS BENCH OF THE TRIBUNAL EITHER BY THE ASSESSEE OR BY THE DEPARTMENT. IN THE ABSENCE OF T HE COPY OF THE NOTICE U/S 158BC, WE ARE UNABLE TO REACH AT A JUST CONCLUSION. IN THAT VIEW OF THE MATTER, THE ISSUE IS REMANDED BACK TO THE LEARNED CIT (A) T O BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING A DUE AND REASO NABLE OPPORTUNITY OF BEING HEARD TO BOTH THE PARTIES. 7. NOW WE WILL DEAL WITH THE APPEAL IN I.T.A. NO.60 2/LKW/10. THIS APPEAL HAS BEEN FILED BY THE DEPARTMENT AGAINST THE ORDER OF T HE CIT (A) PASSED U/S 154 OF THE I.T. ACT. THE FACTS RELATED TO THIS ISSUE, IN BRIEF, ARE THAT THE DEPARTMENT MOVED A MISC. APPLICATION U/S 154 OF THE I.T. ACT. IN THE SAID APPLICATION DATED 05/02/2010, THE GRIEVANCE OF THE DEPARTMENT WAS THA T INADVERTENTLY MISTAKE HAS CREPT IN THE ORDER OF THE LEARNED CIT (A) DATED 11/ 01/2010 WHILE FINALLY ALLOWING THE ASSESSEES APPEAL. THE SAID APPLICATION HAS BE EN REJECTED BY THE LEARNED CIT (A) VIDE ORDER DATED 07/07/2010 BY OBSERVING A S UNDER: 7 2. I HAVE CONSIDERED THE SAID APPLICATION AND DO N OT FIND ANY MATTER FALLING U/S 154 OF THE I.T. ACT VIS--VIS TH E SAID APPELLATE ORDER NO.CIT(A)-I/78/CC-III/KNP/09-10/152 DATED 11/ 01/2010. IT IS SUFFICIENT TO NOTE THAT IT WAS A SET-ASIDE MATTER B Y THE HON'BLE TRIBUNAL WHICH HAS BEEN DECIDED AS PER DIRECTIONS O F THE HON'BLE TRIBUNAL. HENCE, AS SUCH THERE IS NO IMPLICATION O F APPEAL BEING ALLOWED/DISALLOWED AT THE END OF THE CIT (A). 3. IN VIEW OF ABOVE, THE ALLEGED RECTIFICATION APPL ICATION IS LACKING IN CAUSE OF ACTION, HENCE REJECTED. 8. SINCE WE HAVE RESTORED THE ISSUE TO THE FILE OF THE LEARNED CIT (A) WHILE ADJUDICATING THE APPEAL OF THE DEPARTMENT IN I.T.A. NO.208/LKW/10 (SUPRA), WHICH HAD BEEN FILED AGAINST THE ORDER DATED 11/01/2010 O F THE LEARNED CIT (A)-I, KANPUR, THEREFORE, THIS APPEAL OF THE DEPARTMENT IN I.T.A. NO.602/LKW/10 BECOMES INFRUCTUOUS. 9. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IN I .T.A. NO.208/LKW/10 IS ALLOWED FOR STATISTICAL PURPOSES WHILE THE APPEAL I N I.T.A. NO.602/LKW/10 IS DISMISSED AS INFRUCTUOUS. (ORDER PRONOUNCED IN THE OPEN COURT ON 08/04/2011) SD/. SD/. ( H. L. KARWA ) (N. K. SAINI) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 08/04/2011 *SINGH COPY FORWARDED TO THE: 1. APPELLANT. 2. RESPONDENT. 3. CIT (A) 4. CIT 5. DR. ASSISTANT REGISTRAR