Maharaja Amarsinhji Rathod (decd.), Himatnagar V. ITO, S.K. Ward-3, Himatnagar

ITA 2306/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7336 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2004-2005
• Appeal Filed On: 16-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T C MEENA
• Assessee Lawyers: K C THAKER
• Keywords: Retrospective amendment; Set aside
• Section: 143(3); 154

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO.2306/AHD/2017 / ASSESSMENT YEAR: 2004-05 MAHARAJA AMARSINHJI RATHOD (DECD.) THROUGH L/R. JAIDEEPSINH AMARSINHJI RATHOD PRATAP PALACE, HIMATNAGAR. VS ITO,S.K. WARD-3 HIMATNAGAR. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI K.C. THAKER, AR REVENUE BY : SHRI T.C. MEENA, SR.DR / DATE OF HEARING : 27/03/2019 /DATE OF PRONOUNCEMENT : 29 /04/2019 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A)- 2, AHMEDABAD DATED 1.9.2016 PASSED FOR THE ASSTT.YEAR 2004-05. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN DISMISSING ITS APPEAL AND CONFIRMING ORDER OF THE A O DATED 14.8.2015 PASSED UNDER SECTION 154 OF THE INCOME TAX ACT. 3. BRIEF FACTS OF THE CASE ARE THAT IN THE ASSTT.YE AR 2005-06 AN ASSESSMENT ORDER WAS PASSED UNDER SECTION 143(3) R. W.S. 147 ON 19.3.2013 WHEREBY AN ADDITION OF RS.35,82,131/- WERE MADE TO THE TOTAL INCOME OF THE ASSESSEE. THIS ADDITION WAS MADE ON ACCOUNT OF UNEXPLAINED LOANS AND ADVANCED RECEIVED FROM SHANTISURI SECURITIES P. LTD. WHEN THIS ITA NO.2306/AHD/2017 - 2 - DISPUTE TRAVELLED TO THE CIT(A), THEN VIDE ORDER DA TED 16.1.2015, THE LD.CIT(A) HAS OBSERVED THAT OUT OF THE ABOVE ADDITI ON, RS.26.44 LAKHS WAS RECEIVED IN THE F.Y.2003-04 AND CANNOT BE ADDED DURING THE ASSTT.YEAR 2005-06. THE FOLLOWING FINDING OF THE L D.CIT(A) IN THIS REGARD IS WORTH TO NOTE. IT READS AS UNDER: PAGE NO.13 HOWEVER, THE ADDITION IS DIRECTED TO BE RESTRIC TED TO THE AMOUNT OF RS.10 LAKH WHICH HAS BEEN ACCEPTED BY THE APPELLANT DURING THE YEAR. ADDITION OF RS.26.4 LACS RECEIVED IN FINANCIAL YEAR 2003-04 CANNOT BE MADE DURING THE PRESENT YEAR. NECESSARY ACTION MAY BE TAKEN BY THE AO IN THAT YEAR FOR TAXING THAT AMOUNT. THE DISALLOWA NCE OF INTEREST MADE BY THE AO ON THIS LOAN IS ALSO UPHELD ON SUBSTANTIVE B ASIS. 4. THE LD.AO HAS GIVEN EFFECT TO THIS ORDER OF THE LD.CIT(A) AND PASSED THE FOLLOWING ORDER IN THE ASSTT.YEAR 2004-0 5: ORDER GIVING EFFECT TO THE ORDER OF CIT(A)S ORDER SR.NO. PARTICULARS AMOUNT (RS.) TOTAL INCOME AS PER ORDER U/S.143(3) DATED 17.01.2006 4,88,687 ADDITION: AS PER ORDER CIT(A)-2, AHMEDABAD ORDER DATED 16.01.2015 VIDE PARA 4.3 1. ORDER GIVING TO CIT(A) O R DER 26,44,000 REVISED TOTAL INCOME 31,32,687/ - THE TOTAL INCOME IS REVISED ACCORDINGLY. REVISED DEMAND NOTICE AND CHALLAN/RO ISSUED ACCORDINGLY. PLACE : HIMATNAGAR SD/- DATE : 09/03/2015 [SANJAY PURABIYA] INCOME-TAX OFFICER S.K.WARD-3, HIMATNAGAR 5. ON RECEIPT OF THIS ORDER, THE ASSESSEE FILED AN APPLICATION FOR RECTIFICATION WHICH HAS BEEN REJECTED BY THE AO AND HIS ORDER HAS BEEN ITA NO.2306/AHD/2017 - 3 - REPRODUCED BY THE LD.CIT(A) IN THE IMPUGNED ORDER, WHICH READ AS UNDER: 'PLEASE REFER TO YOUR RECTIFICATION APPLICATION U/S . 154 OF THE I. T. ACT FILED ON 07/08/2015 ON THE ABOVE CITED SUBJECT. 2. IN THIS CONNECTION, 1 WOULD LIKE TO INFORM YOU T HAT THE HON'BLE CIT(A) - 2, AHMEDABAD HAS DIRECTED TO ITS ORDER NO.CIT(A)-2/ITO, SK WARD-3/91/13-14 DATED 16/01/2015 VIDE PARA NO. 4.3, THE AMOUNT OF C LOSING BALANCE OF RS.26,44,000/- RECEIVED BY ASSESSEE FOR F.Y. 2003-0 4 IS TO BE ADDED IN A. Y. 2004-05 AND THIS OFFICE WAS GIVEN APPEAL EFFECT ORD ER OF RETROSPECTIVE EFFECT TO THE ORDER OF HON'BLE CIT(A)S ORDER FOR A. Y. 2005-0 6. 3. IN THIS REGARD, YOUR RECTIFICATION APPLICATION U /S. 154 OF THE 1. T. ACT IS HEREBY REJECTED AND YOU ARE DISSATISFIED TO THIS AP PEAL EFFECT ORDER FOR A. Y. 2004-05 DATED 09/03/2015, YOU MAY BE PREFERRED AN A PPEAL BEFORE HON'BLE CIT(A)-2. AHMEDABAD. 4. FURTHER, YOU ARE REQUESTED TO PAY THE OUTSTANDIN G ART-EAR DEMAND OF RS.15,21,472/-FOR A.'Y. 2004-05 WITHIN 15 DAYS OF TH E RECEIPT OF THIS LETTER.' 6. DISSATISFIED WITH THIS ORDER, THE ASSESSEE CARRI ED THE MATTER IN APPEAL BEFORE THE LD.CIT(A). THE LD.CIT(A) HAS DIS MISSED THE APPEAL OF THE ASSESSEE. THE LD.CIT(A) HAS OBSERVED THAT THE ORDER PASSED BY THE AO ON 9.3.2015 CANNOT BE RECTIFIED UNDER SECTION 15 4 BECAUSE IT IS A DEBATABLE ISSUE AND THE ASSESSEE OUGHT TO HAVE CHAL LENGED THAT ORDER AGAINST WHICH NO APPEAL HAS BEEN FILED. 7. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. ON DUE CONSIDERATION OF THE ABOVE FACTS, WE ARE OF THE VIEW THAT THE ORDER DATED 9.3.2015 IS PATENTLY AN ILLEGAL ORDER. THE LD.CIT(A) HAS NOT GIVEN ANY DIRECTION TO GIVE EFFECT IN THE ASSTT.YEAR 2004-05. THE LD.CIT(A) HAS MERELY OBSER VED THAT ADDITION OF RS.26.44 LAKHS SHOULD BE MADE IN THE YEAR OF RECEIP T I.E. ASSTT.YEAR 2004- 06. THE AO OUGHT TO HAVE EITHER REOPENED THE ASSES SMENT OR ANY OTHER REMEDIAL ACTION REQUIRED UNDER THE LAW, BUT STRAIGH T AWAY HE COULD NOT ITA NO.2306/AHD/2017 - 4 - GIVE EFFECT TO AN ORDER WHICH WAS NOT PASSED FOR TH E ASSTT.YEAR 2004-05. THIS WAS AN EX PARTE ORDER. WHEN THE ASSESSEE CAME TO KNOW ABOUT THIS ORDER, HE FILED AN APPLICATION FOR RECTIFICATION. HIS APPLICATION CANNOT BE THROWN OUT LIKE THIS, AND THE LD.CIT(A) FAILED TO N OTE THIS ASPECT WHILE CONFIRMING THE VIEW POINT OF THE AO. THE AO HAS OB SERVED IN THE IMPUGNED ORDER DATED 14.8.2015 THAT HE HAS GIVEN EF FECT TO THE ORDER OF THE LD.CIT(A) PASSED IN THE ASSTT.YEAR 2004-05 ALSO , THOUGH, IT WAS PASSED IN THE ASSTT.YEAR 2005-06. HAD THE AO ENTER TAINED HIS RECTIFICATION APPLICATION AND PROCEEDED TO DISPOSE OF IN ACCORDANCE WITH LAW, THEN, HE WOULD HAVE VACATED HIS ORDER DATED 9. 3.2015 PASSED IN THE ASSTT.YEAR 2004-05. THERE IS NO DEBATABLE ISSUE IN THAT, RATHER HIS ORDER DATED 9.3.2015 WAS PATENTLY ILLEGAL. THE AO OUGHT TO HAVE ENTERTAINED THE APPLICATION OF THE ASSESSEE, AND OUGHT TO HAVE RECTIFIED HIS ORDER DATED 9.3.2015. THEREFORE, IN VIEW OF THE ABOVE DI SCUSSION, WE ALLOW THIS APPEAL AND SET ASIDE BOTH THE IMPUGNED ORDERS I.E. ORDER DATED 1.9.2016 PASSED BY THE LD.CIT(A) AND DATED 14.8.2015 PASSED BY THE AO. WE ALLOW THE APPLICATION OF THE ASSESSEE AND DIRECT TH E AO TO RECTIFY HIS ORDER DATED 9.3.2015 BY DELETING THE AMOUNT OF RS.2 6.44 LAKHS FROM THE TAXABLE INCOME OF THE ASSESSEE IN THE ASSTT.YEAR 20 04-05. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 29 TH APRIL, 2019. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED, 29/04/2019