Bhubaneswar Development Authority, Bhubaneswar V. CIT, Bhubaneswar

ITA 229/CTK/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52436 (ITAT-CUTTACK)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 30-11-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 25-04-2011
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Assessee Lawyers: R KARARS; G NAIK
• Keywords: Period of limitation; Assessment record; Benefit of exemption; Time period of passing order; Revised return
• Section: 143(3); 263

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 229/CTK/2011 (ASSESSMENT YEAR 2006 - 07) BHUBANESWAR DEVELOPMENT AUTHORITY, AKASH SHOVA BUILDING, SACHIVALAYA MARG, BHUBANESW AR 1, PAN: AAALB 0073 G VERSUS INCOME - TAX OFFICER , BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI G.NAIK & R.KAR, ARS FOR THE RESPONDENT SMT. PARAMITA TRIPATHY, DR DATE OF HEARING : 01.12.2011 DATE OF PRONOUNCEMENT : 02.12.2011 ORDER SHRI K.K.GUPTA, AM : THIS APPEAL BY THE ASSESSEE IS WITH RESPECT TO THE ASSUMPTION OF JURISDICTION UNDER THE PROVISIONS OF SECTION 263 OF THE INCOME - TAX ACT,1961 BY THE LEARNED CIT. 2. THE BRIEF FACTS AS HAVE BEEN BROUGHT ON RECORD ARE THAT THE A SSESSEE BHUBANESWAR DEVELOPMENT AUTHORITY WAS CREATED VIDE GOVT. OF ORISSA NOT IFICATION NO. 37627 - HUD DATED 3 1.08.1983 IN EXERCISE OF POWERS CONFERRED BY SECTION 3(3) & (5) OF ORISSA DEVELOPMENT AUTHORITIES ACT,1982(ORISSA ACT 14 OF 1982). THE ASSESSEE WAS AVAILIN G THE BENEFIT OF EXEMPTION U/S. 1 0(20A) OF THE INCOME TAX ACT,1961 UP TO ASSESSMENT YEAR 2002 - 03, BUT THE SAID PROVISION REGARDING EXEMPTION U/S . 10(20A) WAS OMITTED W.E.F 01.04.2003 BY THE FINANCE ACT,2002. RETURN OF LOSS WAS FILED ON 03.11.2006 S HOWING A LOSS OF 3,35,92,560 . SUBSEQUENTLY, DURING THE ASSESSMENT PROCEEDING, ANOTHER RETURN WAS FILED ON 31.10.2007 SHOWING TOTAL INCOME AT NIL. ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER VIDE HIS ORDER DATED 31.12.2008 U/S . 143(3). AFTER ALLOWING BRO UGHT FORWARD LOSS OF 4,03,29,151, T HE ASSESSED TOTAL INCOME WAS DETERMINED BY THE ASSESSING OFFICER. THE LEARNED CIT ASSUMING JURISDICTION U/S.263 ISSUED SHOW CAUSE NOTICE REQUIRING THE ITA NO.229/CTK/2011 2 ASSESSEE TO MATCH THE FIGURES AS WERE ULTIMATELY BROUGHT ON RECORD IN PURSUANCE T O AUDIT REPORT UNDER THE PROVISIONS OF SECTION 44AB WHEN THE ASSESSING OFFICER HAD PROCEEDED TO CONSIDER THE ASSESSEES COMPUTATION UNDER THE PROVISIONS OF SECTION 143(3) ON THE BASIS OF ORIGINAL RETURN WHICH WERE CLAIMED AS PROVISIONAL FIGURES BY THE ASSE SSEE AT THE TIME OF FILING OF THE RETURN U/S.139(1). 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE BEING A WHOLLY OWNED GOVERNMENT UNDERTAKING HAD PREFERRED NOT TO APPEAL AGAINST THE SAID ORDER OF THE ASSESSING OFFICER AS IT HAD NOT CREATED ANY DEMAND ON THE ASSESSEE BEING A GOVERNMENT ORGANISATION. THE LEARNED CIT THEREFORE, AS CAN BE PERUSED IN HIS ORDER, HELD THAT THE ASSESSING OFFICERS ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE WHICH HE HAS NOT BEEN ABLE TO HI GHLIGHT IN HIS ORDER EXCEPT THAT THE INTERNAL WORKING OF THE ASSESSEE HAS BEEN CONSIDERED BY THE LEARNED CIT IN THE MANNER THE ASSESSING OFFICER WAS TO FIND FAULT IN THE RESULTANT COMPUTATION AND ASSESSMENT. HE HAS, AFTER HAVING BEEN SUPPLIED WITH THE REQU ISITE EVIDENCES AND MATERIAL, PREFERRED TO HOLD THAT THE ORDER OF THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE WITHOUT BRINGING ON RECORD ANY SPECIFIC ERROR WHICH COULD BE HELD PREJUDICIAL. THE LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE CONSIDERATION OF THE AUDIT REPORT AND THE FINANCIAL STATEMENTS DULY CERTIFIED BY THE AUDITORS ALTHOUGH WAS ON RECORD WITH THE ASSESSING OFFICER HAS BEEN FURTHER CLARIFIED BY THE LEARNED CIT WHEN THE ASSESSING OFFICER HAD NOTED IN HI S ORDER THAT THE AUDITED ACCOUNTS WERE AVAILABLE IN THE RECORD BY WAY OF A REVISED RETURN FILED ON 31 ST OCTOBER, 2007 WAS ALSO AT NIL INCOME. THE LEARNED COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT IT IS THE ENDEAVOR OF THE ASSESSING OFFICER AND THE LEARNED CIT TO GIVE A MEANING TO THE FINANCIAL STATEMENTS DULY AUDITED THE PREROGATIVE OF ITA NO.229/CTK/2011 3 A CHARTERED ACCOUNTANT WHETHER WAS IN ACCORDANCE WITH THE PROVISIONS OF THE I.T.ACT. HE, THEREFORE, SUBMITTED THAT THE ASSESSING OFFICER WHO WOULD BE COMPLYING TO THE DIRECTION OF THE LEARNED CIT HAS NOT BEEN DIRECTED IN THE TERMS OF FINDING ERROR WHICH COULD BE PREJUDICIAL TO THE INTEREST OF REVENUE INSOFAR AS THE ASSESSEE IS A BONAFIDE GOVERNMENT UNDERTAKING SUBJECT TO AUDIT NOT ONLY UNDER THE PROVISIONS OF THE I .T.ACT BUT ALSO BY CAG AND STATE GOVERNMENT AUDITORS. THE GOVERNMENT MACHINERY FOR GETTING AUDIT WORK DONE AT THE SPEED WHICH IS BARRED BY LIMITATION AS PER I.T.ACT, THEREFORE, HAS RESULTED IN FILING THE REVISED RETURN BELATEDLY CANNOT BE SUBJECTED TO ASSU MING JURISDICTION U/S.263 MAY KINDLY BE NOTED. IT WILL BE A FUTILE TASK FOR THE ASSESSING OFFICER TO FOLLOW THE DIRECTION OF THE LEARNED CIT WHEN AS SUCH NO CLEAR - CUT DIRECTION HAS BEEN GIVEN ESPECIALLY IN VIEW OF THE FACT THAT THE ASSESSING OFFICER HAS TA KEN COGNIZANCE OF THE REVISED RETURN BELATEDLY FILED BUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHETHER WAS ADEQUATE TIME AVAILABLE TO THE ASSESSING OFFICER WHEN HE CHOSE TO UNDERTAKE THE HEARING IN THE LAST MONTH OF THE LIMITATION PERIOD NAMELY DECEM BER, 2008. HE PRAYED THAT AS THE REQUIREMENT OF THE LEARNED CIT AS PER THE SHOW CAUSE NOTICE HAD BEEN COMPLIED WITH, THE LEARNED CIT OUGHT NOT TO HAVE DEALT WITH THE ISSUES EXTRANEOUS TO THE ORDER OF THE ASSESSING OFFICER. HE SUBMITTED THAT A SUITABLE DIRE CTION MAY KINDLY BE GIVEN TO EITHER THE ASSESSING OFFICER OR THE LEARNED CIT FOR INCORPORATING THE ERROR WHICH ARE PREJUDICIAL TO THE INTEREST OF REVENUE UNDER THE PROVISIONS OF SECTION 263. 4. THE LEARNED DR SUPPORTED THE ORDER OF THE LEARNED CIT. SHE SUB MITTED THAT THE CLAIM OF CARRY FORWARD LOSSES CANNOT BE A PREROGATIVE OF THE CHARTERED ACCOUNTANT BELATEDLY CERTIFYING THE FINANCIAL STATEMENTS. CLAIM OF CARRY FORWARD LOSSES AND DEBTORS AND CREDITORS GOES TO THE ROOT OF THE DETERMINING INCOME OF THE ASSES SEE WHICH HAS BEEN ORIGINALLY HELD AT NIL BY ITA NO.229/CTK/2011 4 THE ASSESSING OFFICER. THE CONDUCT OF THE ASSESSEE, THEREFORE, FOR GETTING THE ACCOUNTS AUDITED BELATEDLY AGAINST THE COMPLIANCE TO THE PROVISIONS OF THE I.T.ACT INSOFAR AS THE LEARNED CIT HAS RAISED VARIOUS QUE STIONS REQUIRING THE ASSESSEE TO COME CLEAN WHEN IT BEING A GOVERNMENT UNDERTAKING W AS TO RECORD ITS DEFICIENCY LEADING TO FINDING THAT IT IS NOT TO BE TAXED AT ALL. SHE, THEREFORE, FULLY SUPPORTED THE ORDER OF THE LEARNED CIT FOR PART OF HER SUBMISSIONS. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON OUR CAREFUL CONSIDERATION OF THE FACTS, WE FIND FORCE IN THE SUBMISSIONS OF THE LEARNED AR OF THE ASSESSEE INSOFAR AS THE VARIOUS ISSUES RAISED BY THE LEARNED CIT IN HI S SHOW CAUSE NOTICE HAVE BEEN APTLY DEALT WITH BY THE ASSESSEE GIVING POINT WISE REPLIES TO THE ISSUES BUT WERE CONSIDERED BY THE LEARNED CIT IN HIS OWN MANNER WITHOUT INDICATING AS TO HOW THE SAME COULD BE CONSIDERED AS MISSING IN THE ASSESSMENT ORDER BY THE ASSESSING OFFICER U/S.143(3). THE ASSESSING OFFICER WAS ALSO AWARE OF THE REVISED RETURN WHEN HE HAD THE OPPORTUNITY TO COMPARE THE TWO WHEN THE PROVISIONAL FIGURES WERE TO BE MATCHED OR RECONCILED WITH THE AUDITED FIGURES FILED AT THE TIME OF THE REVI SED RETURN U/S.139(1). WE ARE ALSO UNABLE TO APPRECIATE THE ERRORS WHICH COULD BE PREJUDICIAL TO THE INTEREST OF REVENUE INSOFAR AS THE PAST HISTORY OF THE ASSESSEES CASE DOES NOT BELIE THE FIGURES WHICH ARE PROVISIONAL BUT LATER ON CONFIRMED BY THE AUDIT ORS IN THEIR FINANCIAL STATEMENTS U/S.44AB. HOWEVER, ON THE REQUEST OF THE LEARNED COUNSEL FOR THE ASSESSEE WE ARE IN AGREEMENT THAT AN OPPORTUNITY MAY BE GRANTED TO THE ASSESSEE AS WELL AS THE LEARNED CIT TO REFRAME THE CONTENTIONS OF FINDING ERRORS WHIC H ARE PREJUDICIAL TO THE INTEREST OF REVENUE IN AS MANY WORDS SO THAT THE ASSESSING OFFICER CARIES OUT THE DIRECTION OF THE LEARNED CIT IN ACCORDANCE WITH THE PROVISIONS OF THE I.T.ACT AND NOT MERELY ON AN OPINION OR ITA NO.229/CTK/2011 5 A VIEW NOT EXPRESSED BY THE ASSESSING OFFICER WHICH OPINION OR VIEW WAS NOT CONSIDERED APPROPRIATE BY THE LEARNED CIT ASSUMING JURISDICTION U/S.263. ASSESSMENTS FOR EARLIER AND LATER YEARS HAVE ALSO BEEN FRAMED BY THE ASSESSING OFFICER COULD NOT HAVE BEEN LOST SIGHT OF BY THE ASSESSING OFFICER WHICH THE LEARNED CIT COULD HAVE TAKEN INTO CONSIDERATION WHILE CONFINING HIMSELF WITH THE ASSESSMENT RECORDS OF THE IMPUGNED ASSESSMENT YEAR ONLY. THE ISSUES DEALT WITH BY HIM IN THE IMPUGNED ORDER ARE MOR E OR LESS AN OPINION REFLECTED WAS DEALT WITH IN THE ORDER OTHER THAN FOR OTHER AYS . IN VIEW OF THIS, THE ORDER OF THE LEARNED CIT IS SET ASIDE AND THE MATTER IS RESTORED TO HIS FILE . HE IS DIRECTED TO DECIDE THE SAME IN ORDER TO MAKE AVAILABLE THE ASSESSING OFFICER CLEAR - CUT DIRECTION S FOR COMPUTING TA XABLE INCOME, IF ANY, FOR THE IMPUGNED ASSESSMENT YEAR. NEEDLESS TO SAY THAT THE ASSESSEE WOULD BE AT LIBERTY TO APPROACH TRIBUNAL AGAIN, IF IT IS NOT SATISFIED WITH THE ORDER OF THE LEARNED CIT , IF SO ADVISED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. S D/ - S D/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 02.12.2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: BHUBANESWAR DEVELOPMENT AUTHORITY, AKASH SHOVA BUILDING, SACHIVALAYA MARG, BHUBANESWAR 1, 2. THE RESPONDENT: INCOME - TAX OFFICER , BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.