Sri. H. Jayaraj, Trivandrum V. The ITO, Trivandrum

ITA 209/COCH/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8480 (ITAT-COCHIN)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 27-07-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 03-05-2016
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: NONEADJT PETITION REJECTED
• Keywords: Non compliance; Reassessment proceedings
• Section: 143(3); 142(1); 148; 144

Judgement Text

ITA NO.209/COCH/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI B P JAIN, AM ITA NO.209/COCH/2016 (ASST YEAR : 2012-13) H. JAYARAJ, VADAKKE VEETTIL, POZHIYOOR, TRIVANDRUM-695 525. THE INCOME TAX OFFICER, WARD- 1(4), TRIVANDRUM. ( ASSESSEE APPELLANT) VS (REVENUE -RESPONDENT) PAN NO. ACVPH 2517C ASSESSEE BY NONE-ADJT. PETITION REJECTED REVENUE BY SHRI A. DHANARAJ, SR. DR DATE OF HEARING 28/06/2016 DATE OF PRONOUNCEMENT 28/06/2016 ORDER PER B.P. JAIN, AM: THIS APPEAL OF THE ASSESSEE ARISES FROM THE O RDER OF THE LD. CIT(A), TRIVANDRUM DATED 01-03-2016 FOR THE ASSESSMENT YEAR 2012-13. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS), TRIVANDRUM FOR THE ASSESSMENT YEAR 2013-14 IN SO FA R AS IT IS PREJUDICIAL TO THE APPELLANT IS OPPOSED TO LAW, FACTS AND CIRCUMST ANCES OF THE CASE. 2. THE WHOLE ORDER IS PATENTLY ILLEGAL, UNSUSTAINAB LE AND VOID ABINITIO SINCE THE ASSESSMENT ORDER HAS BEEN COMPLETED WITHO UT THE ISSUE OF MANDATORY NOTICE U/S. 143(2) OF THE INCOME TAX ACT. THE VIEW TAKEN BY THE CIT(APPEALS) IS UNACCEPTABLE IN LAW. ITA NO.209/COCH/2016 2 3. THE JUDGMENT OF ASHOK CHADDHA VS. ITO 337 ITR 3 99 RELIED ON BY CIT(APPEALS) TO SUPPORT THE NON ISSUE OF NOTICE U/S . 143(2) IS ILLEGAL SINCE IT WAS NOT PUT TO THE APPELLANT THEREBY VIOLATING N ATURAL JUSTICE. MOREOVER, THE SAID DECISION IS INAPPLICABLE IN SO M UCH SO IT APPLIES ONLY TO SEARCH CASES. 4. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSING OFFICER OUGHT TO HAVE MADE THE ASSESSMENT MANDATORILY U/S. 144 INSTEAD OF 143(3) IN SO FAR AS THERE WAS TOTAL NON COMPLIANCE TO THE NOTICES U/S. 142(1) ISSUED ON 18/12/2013 AND 15/01/2014. 5. NO REASONS FOR ISSUE OF NOTICE U/S. 148 WERE C OMMUNICATED TO THE APPELLANT WHICH IS MANDATORY. 6. THE IMPUGNED ORDER IS ALSO ILLEGAL SINCE THE S AME WAS COMPLETED ON THE BASIS OF A RETURN WHICH IS NON EST IN LAW AND I N FACT THERE IS NO RETURN IN EXISTENCE WHEN THE ORDER WAS PASSED. HENCE FOR THIS REASON ALSO THE ASSESSMENT OUGHT TO HAVE BEEN COMPLETED U/S. 144. 7. FOR THESE AMONGST OTHER GROUNDS THAT MAY BE RAI SED AND EVIDENCES ADDUCED AT THE TIME OF HEARING IT IS PRAYED THAT TH E IMPUGNED ORDER BE MODIFIED, SET ASIDE, CANCELLED OR QUASHED. PRAYED A CCORDINGLY. 3. AS REGARDS THE LEGAL ISSUE THAT THE ASSESSEE H AS NOT RECEIVED THE NOTICE U/S. 143(2) OF THE ACT, THE ORDER OF THE LD. CIT(A) IS A WELL REASONED ONE AND I DO NOT FIND ANY INFIRMITY IN HIS ORDER AN D THE SAME IS REPRODUCED HEREINBELOW:- 3.1 THE NEXT GROUND OF APPEAL IS ON NOTICE NOT BEE N ISSUED U/S. 143(2). THE CASE OF THE APPELLANT IS THAT ASSESSMENT GOT CO MPLETED WITHOUT ISSUING NOTICE UNDER THE ABOVE MENTIONED SECTION AN D THEREFORE ASSESSMENT COMPLETED IS VOID, ILLEGAL AND ARBITRARY . NOTICE U/S. 143(2) TO MY UNDERSTANDING NEED BE ISSUED ONLY WHEN RETURN IS FILED. HERE, SUBSEQUENT TO THE NOTICE ISSUED U/S. 148 ON 25/06/2 013, THE APPELLANT SHOULD HAVE FILED RETURN IN RESPONSE TO THE SAID NO TICE WITHIN STIPULATED TIME BUT NO SUCH RETURN HAS EVER BEEN FILED UNTIL T HE ASSESSMENT GOT COMPLETED 29.04.2014. IN FACT, ANOTHER NOTICE U/S. 142(1) SEEMS TO HAVE BEEN SENT TWICE ON 18/12/2013 AND 24.01.2014 TO THE APPELLANT DIRECTING ITA NO.209/COCH/2016 3 HIM TO FILE THE RETURN AND IN THE ABSENCE OF RETURN FILED FOR EVER, THE ASSESSING OFFICER WAS FORCED TO ISSUE PENALTY NOTIC E U/S. 271(1)(B) OF THE ACT ON 09.05.2014 THE FACT OF WHICH THE APPELLANT CANNOT DENY. HAVING NOT FILED THE RETURN EITHER IN RESPONSE TO THE NOTI CE ISSUED U/S. 148 OR IN RESPONSE TO THE NOTICE U/S. 142(1), THE APPELLANT H AS NO CASE TO ARGUE THAT THE ASSESSMENT COMPLETED IS VOID, ILLEGAL AND ARBITRARY. RELIANCE IS PLACED HERE TO THE DECISION OF THE HONBLE DELHI HI GH COURT IN THE CASE OF ASHOK CHADDHA VS. ITO (337 ITR 399) WHEREIN IT W AS HELD THAT NO SPECIFIC NOTICE WAS REQUIRED U/S. 143(2) OF THE ACT WHEN THE NOTICE AS REQUIRED U/S. 153A(I)(A) OF THE ACT WAS ALREADY GIV EN. NOTICE U/S. 153A(I)(A) CAN BE EQUATED WITH THE NOTICES ISSUED U /S. 148 AND 142(1) IN THE INSTANT CASE OF THE APPELLANT HENCE, OMISSION T O ISSUE NOTICE WILL NOT AFFECT THE ASSESSING OFFICERS JURISDICTION AND MAK E THE ASSESSMENT INVALID. THUS THE GROUND OF THE ASSESSEE ON THE LEGAL ISSUE IS DISMISSED. 4. AS REGARDS THE ISSUE ON MERIT, THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN ORIGINALLY DECLARING INCO ME OF RS.10,88,680/- BASED ON THE CONTRACT RECEIPT OF RS.1,36,08,530/-, WHICH IN TURN HAS SUBSEQUENTLY BEEN PROCESSED U/S. 143(1) OF THE ACT. THE ACCOUNTS GET AUDITED AND NECESSARY REPORTS HAVE DULY BEEN FILED ALONG WITH THE RETURN FILED. FINDING SUBSEQUENTLY THAT CONTRACT RECEIPTS AS MENTIONED IN FORM 26AS HAVE NOT BEEN CONSIDERED FULLY TO WORK OUT THE RETURNED INCOME OF RS.10,88,680/-, THE ASSESSMENT GOT REOPENED U/S. 14 8 OF THE ACT ON 25/06/2013 AND THE ASSESSEE WAS SPECIFICALLY DIRECT ED TO FILE RETURN IN RESPONSE TO THE SAID NOTICE ISSUED. SINCE THE ASSE SSEE HAD NOT RESPONDED TO THE SAID NOTICED ISSUED, NOTICE U/S. 142(1) OF T HE ACT WAS ISSUED TWICE ON 18.12.2013 AND 24.01.2014 DIRECTING THE ASSESSEE TO FILE RETURN. FINDING AGAIN THAT THERE WAS NO RESPONSE FROM THE ASSESSEE, PENALTY NOTICE U/S. ITA NO.209/COCH/2016 4 271(1)(B) OF THE ACT WAS ALSO ISSUED ON 09/05/2014. HOWEVER, THE REASSESSMENT PROCEEDINGS GOT COMPLETED AND ADDITION OF RS.22,83,451/- REPRESENTING THE DIFFERENCE BETWEEN THE AMOUNT MENT IONED IN FORM 26AS AND THE CONTRACT RECEIPT CONSIDERED FOR WORKING OUT THE RETURNED INCOME OF RS.10,88,680/- WAS MADE TO THE INCOME RETURNED. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE AND TH E ASSESSEES COUNSEL FILED THE ADJOURNMENT APPLICATION BUT NO SUFFICIENT CAUSE WAS ESTABLISHED AND THEREFORE, THE SAME IS REJECTED. ACCORDINGLY, I AM DECIDING THE APPEAL EX PARTE AFTER HEARING THE LD. DR AND THE MA TERIAL AVAILABLE ON RECORD. 6. THE FACTS RAISED BEFORE THE LD. CIT(A) ARE THAT THE ASSESSEE IS A CONTRACTOR AND AS PER FORM 26AS, THE ASSESSEE WAS P AID CONSIDERATION OF RS.1,43,01,720/- WHEREAS THE ASSESSEE CLAIMED AS PE R FORM 16A ISSUED BY THEM A RECEIPT OF RS.1,20,18,263/- THUS, THERE WAS A DIFFERENCE OF RS.10,13,391/-. IT WAS EXPLAINED THAT THE ASSESSE E WAS ACCOUNTING THE CONTRACT EARNINGS ON RECEIPT BASIS AS PER THE CERTI FICATES ISSUED BY THE DEDUCTORS AND THE CORRESPONDING EXPENSES ARE DEBITE D. ALSO THE COST OF MATERIAL SUPPLIED BY THE DEDUCTOR OUGHT TO HAVE BEE N REDUCED FROM THE TOTAL RECEIPTS. IT IS AN UNDISPUTED FACT THAT THE COST OF MATERIAL SUPPLIED HAS TO BE DEDUCTED FROM THE CONTRACT RECEIPTS FOR E ARNING THE INCOME ITA NO.209/COCH/2016 5 AND IN THE PRESENT CASE, THERE IS SUPPLY OF MATERIA L TO THE EXTENT OF RS.10,13,391/- WHICH SHOULD BE DEDUCTED OUT OF THE TOTAL SUM OF RS.1,43,01,720/- AND THEREFORE, THE ASSESSEE CANNO T BE TAXED ON THE SAID AMOUNT. ACCORDINGLY, ON MERIT, THE ISSUE GOES IN FAVOUR OF THE ASSESSEE AND ACCORDINGLY, THE ORDER OF THE LD. CIT(A) ON THI S ISSUE IS REVERSED. THUS ALL THE GROUNDS OF THE ASSESSEE ON MERIT ARE ALLOWE D. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I .T.A. NO.209/COCH/2016 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28-06-2016. SD/- (B.P. JAIN) ACCOUNTANT MEMBER PLACE : COCHIN DATED: 28 TH JUNE , 2016 GJ COPY TO: 1. H. JAYARAJ, VADAKKE VEETTIL, POZHIYOOR, TRIVAND RUM-695 525. 2. THE INCOME TAX OFFICER, WARD1(4), TRIVANDRUM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS), TRIVAND RUM. ITA NO.209/COCH/2016 6 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. THE DR/ITAT, COCHIN BENCH. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN