Sushil Kumar Rout, Rourkela V. ACIT, Rourkela

ITA 253/CTK/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7207 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-01-2017
• Assessment Year: 1998-1999
• Appeal Filed On: 22-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: B R PANDA
• Keywords: Period of limitation; Tangible material; Non compliance
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 253/CTK/2015 ASSESSMENT YEAR : 1998 - 1999 MR SUSHIL KUMAR ROUT, FF/2,CIVIL TOWNSHIP, ROURKELA. VS. ACIT, ROURKELA CIRCLE, ROURKELA PAN/GIR NO. AAWPR 6924 L (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI B.R.PANDA, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 24 /01/ 2017 DATE OF PRONOUNCEMENT : 24 /01/ 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - ROURKELA , DATED 31.7.2006 , FOR THE ASSESSMENT YEAR 1998 - 1999 . 2. THE APPEAL FILED BY THE ASSESSEE IS BARRED BY 232 DAYS. THE ASSESSEE HAS FILED CONDONATION PETITION DATED 21.5.2015 FOR CONDONING THE DELAY IN FILING THE APPEAL. THE ASSESSEE HAD ALSO FILED W.P.(C) NO. 10813/2006 BEFORE THE HONBLE ORISSA HIGH COURT CHALLENGING THE ORDER OF THE FIRST APPELLATE AUTHORITY AND THE HONBLE HIGH COURT VIDE ITS JUDGMENT DATED 27.4.2015 HAS HELD AS UNDER: 2 ITA NO. 253/CTK/2015 ASSESSMENT YEAR :1998 - 1999 HEARD LD COUNSEL FOR THE PETITIONER AND MR KAR, LD STANDING COUNSEL FOR THE REVENUE. THE CHALLENGE IN THE PRESENT WRIT APPLICATION HAS BEEN MADE TO THE FIRST APPELLATE ORDER DATED 31.7.2006 FOR THE ASSESSMENT YEAR 1998 - 99. WE ARE NOT INCLINED TO ENTERTAIN THIS WRIT APPLICATION SINCE THE ALT ERNATIVE REMEDY BY WAY OF FILING A SECOND APPEAL IS AVAILABLE TO THE PETITIONER. ACCORDINGLY, THIS WRIT APPLICATION IS DISPOSED OF GRANTING LIBERTY TO THE PETITIONER TO FILE A SECOND APPEAL. IF SUCH AN APPEAL IS FILED WITHIN FOUR WEEKS FROM TODAY ALONGWITH AN APPLICATION FOR CONDON ATION OF DELAY, THE DELAY SHALL BE CONDONED KEEPING IN VIEW THE PENDENCY OF THIS WRIT APPLICATION BEFORE THIS COURT. 2.1 IT IS OBSERVED FROM RECORD THAT THE APPEAL HAS BEEN FILED ON 22.5.2015 WHICH IS WITHIN FOUR WEEKS OF THE PAS SING OF ORDER BY HONBLE HIGH COURT DATED 27.4.2015. RESPECTFULLY FOLLOWING THE ORDER OF HONBLE HIGH COURT, I CONDONE THE DELAY OF 232 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL AND ADMIT THE APPEAL FOR HEARING. 3. IN GROUND NO.3 OF THE APPEAL, THE AS SESSEE HAS TAKEN THE FOLLOWING GROUND: FOR THAT THE AO WITHOUT APPLICATION OF OWN MIND OR HAVING OWN REASONS TO BELIEVE REOPENED THE CASE HAVING FOLLOWED THE DIRECTION OF THE HIGHER AUTHORITIES ON MERE SUSPECT AND SUCH INITIATION OF PROCEEDINGS U/S.147 RE AD WITH SEC.148 OF THE I.T.ACT ON SUSPECT WITHOUT TANGIBLE MATERIAL IS BAD IN LAW SO ALSO NOTICE U/S.143(2) OF THE I.T.ACT HAD NOT BEEN ISSUED TO THE APPELLANT, THUS THE ENTIRE REASSESSMENT PROCEEDING IS VOID AND BE QUASHED IN TOTO. 4. LD A.R. OF THE ASSE SSEE SUBMITTED THAT AS NOTICE U/S.143(2) OF THE ACT WAS NOT ISSUED BY THE ASSESSING OFFICER BEFORE PASSING THE ORDER U/S.143(3)/147 OF THE ACT, THE ORDER PASSED BY THE ASSESSING OFFICER ON 30.1.2006 IS BAD IN LAW AND IS LIABLE TO BE ANNULLED. 3 ITA NO. 253/CTK/2015 ASSESSMENT YEAR :1998 - 1999 5. LD D.R. VE RY FAIRLY CONCEDED THAT NO NOTICE U/S.143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE BEFORE PASSING OF THE ORDER U/S.143(3)/147 OF THE ACT, 1961 ON 30.1.2006 BY THE ASSESSING OFFICER. 6. IN VIEW OF ABOVE FACTS, I FIND THAT THIS ISSUE IS SQUARELY COVERED BY T HE DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF M/S. TRAVANCORE DIAGNOSTICS (P) LTD VS. ACIT (ITA NO.221 OF 2015) ORDER DATED 5 TH OCTOBER, 2016, WHEREIN, THE HONBLE HIGH COURT WAS ADJUDICATING THE ISSUE AS UNDER IN PARA 13 OF ITS ORDER, WHICH READS AS UNDER: ADDITIONAL JURISDICTIONAL GROUNDS WERE RAISED BY THE ASSESSEE BEFORE THE ITAT. PRIMARY AMONG THEM BEING THAT SINCE THE ASSESSMENT WAS COMPLETED BY THE ASSESSING AUTHORITY UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT, A NOTICE UNDER SECTION 143(2) OF THE ACT HAD TO BE ISSUED WITHIN THE PERIOD OF LIMITATION. THE ASSESSEE MAINTAINS THAT NO SUCH NOTICE UNDER SECTION 143(2) HAD EVER BEEN ISSUED TO HIM AND THAT IN SUCH CIRCUMSTANCES, THE ENTIRE ASSESSMENT FAILS. THE ASSESSEE ALSO RAISED AN ISSUE REGARDING THE ASSUMPTION OF JURISDICTION FOR ASSESSMENT BY THE ASSESSING OFFICER UNDER SECTION 147(1) WHICH HE CLAIMED WAS WITHOUT JURISDICTION. IT IS THE SPECIFIC CASE OF THE ASSESSEE THAT THE ASSESSING OFFICER HAD INITIATED ACTION UNDER SECTION 147 WITHOUT SUFFICIENT MATERIAL AND WITHOUT SUFFICIENT CAUSE OR REASON AND THAT THUS IT ERODED THE SUBSTRATUM OF THE ENTIRE PROCESS INITIATED UNDER SECTION 147 OF THE ACT. THE ASSESSEE HAS ALSO ASSERTED THAT THE QUANTIFICATION OF UNACCOU NTED INCOME AND THAT THE ASSESSMENT/RE - ASSESSMENT HAS BEEN DONE WITHOUT ANY DISCERNIBLE RATIONALE OR COMPREHENSIBLE REASON AND THAT IT, THEREFORE, SUFFERS FROM GROSS ILLEGALITY. 7. HONBLE HIGH COURT IN PARA 35 OF ITS ORDER HAS HELD AS UNDER: FROM THE RECORDS AVAILABLE BEFORE US, WE ARE UNABLE TO UNDERSTAND WHY A NOTICE UNDER SECTION 143(2) WAS NOT ISSUED FOR THE YEAR 2009 - 10 WHEN THE SAME WAS ISSUED FOR THE YEAR 2010 - 11. THE ORDER SHEET, ANNEXURE - A2 ANNEXED ALONG WITH THE PAPERS IN ITA 221/2015, SHOWS THAT THE ASSESSING OFFICER WAS AWARE OF THE NEED FOR ISSUANCE OF THE SAID NOTICE AS EARLY AS IN APRIL 2012. THE ONLY REASON FOR NOT ISSUING A SECTION 143(2) NOTICE HAS BEEN RECORDED BY HIM IN THE ORDER SHEET AS 'IT IS NOT POSSIBLE TO GENERATE NOTICE UNDER SECTION 143(2) THROUGH AN AST, SINCE THE ASSESSEE HAS NOT FILED THE RETURN ELECTRONICALLY'. THE ORDER SHEET 4 ITA NO. 253/CTK/2015 ASSESSMENT YEAR :1998 - 1999 FURTHER SHOWS THAT THE ASSESSEE WAS AGAIN REQUESTED TO FILE THEIR RETURN IN RESPONSE TO SECTION 148 ELECTRONICALLY. THIS CONDUCT OF THE ASSESSING OFFICER IS RATHER SURPRISING AND IT DEFIES LOGIC, SINCE THE ASSESSEE CANNOT BE FORCED AND COERCED TO FILE THEIR RETURN ELECTRONICALLY SO AS TO THEN ENABLE THE ASSESSING OFFICER TO ISSUE A NOTICE UNDER SECTION 143(2) OF THE ACT. THIS IS MORE SO BECAUSE EVEN IN THE ABSENCE OF SUCH AN ELECTRONIC RETURN FOR THE YEAR 2010 - 11, THE ASSESSING OFFICER HAD IN FACT ISSUED THE MANDATORY NOTICE FOR T HAT YEAR ON 11.01.2012. IT IS BEYOND COMPREHENSION THAT EVEN THOUGH THE ASSESSING OFFICER HAD TIME TILL 30.09.2011 TO ISSUE NOTICE UNDER SECTION 143(2) AND EVEN THOUGH HE HAD RECORDED THE REASONS FOR ASS UMING JURISDICTION UNDER SECTION 147 FOR RE - ASSESSMENT ON 21.09.2011, HE HAD STILL NOT CHOSEN TO ISSUE THE NOTICE WHICH WOULD HAVE THEN GIVEN HIM THE JURISDICTION TO CONTINUE WITH THE PROCEEDINGS. WE A RE UNABLE TO OBTAIN ANY REASONS TO THESE OMISSIONS AND IT IS RATHER DISTRESSING, AS WE HAVE RECORDED IN THE OPENING LINES OF THE JUDGMENT, THAT ON ACCOUNT OF THIS OMISSION AND NON COMPLIANCE OF MANDATORY AND IMPERATIVE PROVISIONS, THE ASSESSEE WOULD NOW BE ENTITLED TO RELIEFS WHICH THEY OTHERWISE WOULD NOT HAVE ABLE TO OBTAIN. WE HAVE, THEREFORE, NO OTHER OPTION BUT TO HOLD IN THE ABSENCE OF A SECTION 143(2) NOTICE, PROCEEDINGS OF ASSESSMENT INITIATED, CO NDUCTED AND COMPLETED FOR THE YEAR 2009 - 10 WILL HAVE TO FAIL BUT FOR THE YEAR 2010 - 11, SINCE THE PROCEEDINGS HAVE BEEN CONTINUED ON THE BASIS OF A VALIDLY ISSUED SECTION 143(2) NOTICE, SAME IS BEING UPHELD. 8. RESPECTFULLY FOLLOWING THE ABOVE QUOTED DECISION OF HONBLE KERALA HIGH COURT IN THE CASE OF M/S. TRAVANCORE DIAGNOSTICS (P) LTD (SUPTS), I HOLD THAT THE RE ASSESSMENT ORDER PASSED ON 30.1.2006 U/S.143(3)/147 IS BAD IN LAW AND CANCEL THE REASSESS MENT ORDER AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 9. AS I HAVE CANCELLED THE REASSESSMENT ORDER DATED 30.1.2006 PASSED U/S.143(3)/147 OF THE ACT WHILE DECIDING GROUND NO.3 OF THE APPEAL OF THE ASSESSEE, THE OTHER GROUNDS OF APPEAL OF THE ASSESSEE ON MERITS OF ADDITION HAVE BECOME INFRUCTUOUS AND HENCE DISMISSED. 5 ITA NO. 253/CTK/2015 ASSESSMENT YEAR :1998 - 1999 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 24 / 01/2017 IN THE PRESENCE OF PARTIES. ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 24 /01 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK DATE INITIAL 1. DRAFT DICTATED ON 24 /01/17 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 24 /01/11 (DICTATION PAD HAS BEEN ENCLOSED ALONG WITH ORIGINAL FILE) SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE H.C. 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER. 1. THE APPELLANT : MR SUSHIL KUMAR ROUT, FF/2,CIVIL TOWNSHIP, ROURKELA 2. THE RESPONDENT. ACIT, ROURKELA CIRCLE, ROURKELA 3. THE CIT(A) ROURKELA 4. PR. CIT , 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY// 6 ITA NO. 253/CTK/2015 ASSESSMENT YEAR :1998 - 1999