Appeal details
Counselvise Citation
[2015] 134 COUNSELVISE.COM (IT) 1441 (ITAT-PANAJI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
18-08-2015
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
DB
Assessment Year
2007-2008
Appeal Filed On
03-06-2015
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI, HON'BLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 253 TO 257/PNJ/2015 : (A.YS 2007 - 08 TO 2011 - 12) M/S. TIMBLO PRIVATE LIMITED KADAR MANZIL, NEAR HARI MANDIR, MARGAO, GOA 403 601. PAN : AA BCT1944N (APPELLANT) VS. PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL), CENTRAL REVENUES BUILDING, QUEENS ROAD, BANGALORE 560 001 (RESPONDENT) ITA NO. 258 TO 262/PNJ/2015 : (A.YS 2007 - 08 TO 2011 - 12) SMT. RADHA S. TIMBLO KADAR MANZIL, NEAR HARI MANDIR, MARGAO, GOA 403 601. PAN : A BUPT4107E (APPELLANT) VS. PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL), CENTRAL REVENUES BUILDING, QUEENS ROAD, BANGALORE 560 001(RESPONDENT) ASSESSEES BY : V. CHANDRASEKHAR, ADV. & V. NARENDRA SHARMA, ADV. RESPONDENT BY : ANAND S. MARATHE, LD. DR DATE OF HEARING : 18/08/2015 DATE OF PRONOUNCEMENT : 18/08/2015 O R D E R PER GEORGE MATHAN : 1. ITA NOS. 253 TO 257/PNJ/2015 ARE APPEALS FILED BY THE ASSESSEE, M/S. TIMBLO PRIVATE LTD. AGAINST THE ORDERS OF THE PRINCIPAL COMMISSIONER OF 2 ITA NOS. 253 TO 262/PNJ/2015 (A.YS. : 2007 - 08 TO 2011 - 12) INCOME TAX (CENTRAL), BANGALORE IN F.NO. 263/TIMBLO PVT. LTD./PR.CIT(C)/ 2014 - 15 ALL DT. 30.3.2015. 2. ITA NO. 258/PNJ/2015 IS APPEAL FILED BY THE ASSESSEE, SMT. RADHA TIMBLO AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL), BANGALORE IN F.NO. 263/TIMBLO PVT. LTD./PR.CIT(C)/2014 - 15 DT. 30.3.2015 AND ITA NOS. 259 TO 262/PNJ/2015 ARE AP PEALS FILED BY THE ASSESSEE, SMT. RADHA TIMBLO AGAINST THE ORDERS OF THE PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL), BANGALORE IN F.NO. 263/TIMBLO PVT. LTD./PR.CIT(C)/2014 - 15 ALL DT. 31.3.2015. 3. AS THE ISSUES INVOLVED IN ALL THESE APPEALS ARE COMMON , THEY ARE BEING DISPOSED OFF BY THIS COMMON ORDER. THE ASSESSEE S HAVE ALSO FILED ADDITIONAL GROUND TODAY WHEREIN THE ASSESSEES HAVE RAISED THE FOLLOWING GROUND : 1. WHETHER THE LEARNED COMMISSIONER OF INCOME - TAX WAS RIGHT IN LAW AND ON FACTS IN EXERCIS ING THE POWERS UNDER THE PROVISIONS OF SECTION 263 OF THE ACT WHEN THE VERY VALIDITY OF ASSESSMENT PASSED UNDER SECTION 143[3] R.W.S. 153A OF THE ACT ITSELF WAS CHALLENGED BY THE APPELLANT BEFORE THE LEARNED COMMISSIONER OF INCOME - TAX [APPEALS] AND THE COM MISSIONER OF INCOME - TAX IS NOT JUSTIFIED REVISING BY INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT AND THE ACTION OF THE COMMISSIONER OF INCOME - TAX, IS NOT IN ACCORDANCE WITH LAW UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THE ADDITIONAL GROUND BE ING PURELY A LEGAL GROUND, THE SAME IS ADMITTED IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. REPORTED IN 229 ITR 383. SHRI V. CHANDRASEKHAR AND SHRI V. NARENDRA SHARMA, ADVOCATES REPRESENTED ON BEHALF OF THE ASSESSEES AND SHRI ANAND S. MARATHE , LD. DR REPRESENTED ON BEHALF OF THE REVENUE. 3 ITA NOS. 253 TO 262/PNJ/2015 (A.YS. : 2007 - 08 TO 2011 - 12) 4. IT WAS SUBMITTED BY THE LD. AR THAT THERE WAS A SURVEY ON THE PREMISES OF THE ASSESSEE - COMPANY, M/S. TIMBLO PVT. LTD. ON 21.4.2010. IN THE COURSE OF THE SURVEY , THE MANAGING DIRECTOR OF THE ASSESSEE - COMPANY, SMT. RADHA S. TIMBLO HAD IN HER STATEMENT RECORDED U/S 133A OF THE ACT SURRENDERED THE EXISTENCE OF TWO FOREIGN BANK ACCOUNTS VIZ. WING HANG BANK LTD., TSIMSHATSUI BRANCH AND ANOTHER ONE WITH BANK OF COMMUNI CATION, HONG KONG BRANCH. THE LOCKER OF THE ASSESSEE WAS ALSO OPENED WHEREIN CASH AND JEWELLERY WAS ALSO FOUND. AS THE CASH AND JEWELLERY WAS IN EXCESS OF RS. 1 CRORE, THE SURVEY PROCEEDINGS WERE CONVERTED INTO SEARCH ON 21.4.2010 ON SMT. RADHA S. TIMBLO IN HER INDIVIDUAL CAPACITY. IN THE COURSE OF THE SEARCH OPERATIONS, NO MATERIALS OR DOCUMENTS PERTAINING TO THE ABOVE TWO BANK ACCOUNTS WERE FOUND OR SEIZED. AS A CONSEQUENCE OF THE SEARCH, NOTICE U/S 153A WAS ISSUED AND THE ASSESSEE FILED ITS RETURN OF INCOME OFFERING THE IRON ORE PRICE DIFFERENCE RECEIVED IN THE SAID TWO BANK ACCOUNTS, THE INTEREST RECEIVED FROM THE SAID TWO BANK ACCOUNTS AND THE FOREIGN EXCHANGE DIFFERENCE. THE RETURNED INCOME WAS ACCEPTED AFTER MAKING CERTAIN OTHER ADDITIONS. IT WA S THE SUBMISSION THAT AGAINST THE ASSESSMENT ORDER PASSED U/S 153A R.W.S. 143(3) OF THE ACT, THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). IT WAS THE SUBMISSION THAT IN THE APPEAL FILED BEFORE THE LD. CIT(A), THE ASSESSEE HAS RAISED AN ADDITIONAL G ROUND RELATING TO THE VALIDITY OF THE ASSESSMENT ORDER PASSED U/S 153A R.W.S. 143(3) OF THE ACT. 5. IT WAS THE SUBMISSION THAT , IN THE MEANTIME THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE INVOKED HIS POWERS U/S 263 OF THE ACT AND I SSUED A SHOW - CAUSE NOTICE DT. 15.12.2014 HOLDING THAT FROM THE RECORDS IT WAS NOTICED THAT THE ASSESSEE HA D RESORTED TO UNDER - INVOICING AS COMPARED TO THE AVERAGE SALE FOB PRICE FOR THE SAME GRADE AND SAME PERIOD WHILE EXPORTING THE IRON ORE. AS THE AO HAD NOT CONSIDERED THE 4 ITA NOS. 253 TO 262/PNJ/2015 (A.YS. : 2007 - 08 TO 2011 - 12) PERCENTAGE OF UNDER - INVOICING BY THE ASSESSEE, THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE PROPOSED TO REVIEW THE ASSESSMENT ORDER BY INVOKING HIS POWERS U/S 263 OF THE ACT. IT WAS THE SUBMISSION TH AT THE ASSESSEE HAD REPLIED TO THE SHOW CAUSE NOTICE WHEREIN THE ASSESSEE HAD BROUGHT OUT ALL THE FACTS BEFORE THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE AND HAD ALSO RAISED THE ISSUE THAT THE AO HAD IN THE COURSE OF THE ASSESSMENT P ROCEEDINGS EXAMINED THE DETAILS OF THE EXPORTS MADE AND THE AMOUNTS REALIZED AND CONSEQUENTLY, THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE COULD NOT INVOKE HIS POWERS U/S 263 OF THE ACT. IT WAS THE SUBMISSION THAT WHEN THE ASSESSMENT ORDER ITSELF WAS UNDER CHALLENGE IN RESPECT OF THE JURISDICTION, MORE SPECIFICALLY THE VALIDITY, THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE COULD NOT INVOKE HIS POWERS U/S 263 OF THE ACT IN RESPECT OF THE SAID ASSESSMENT ORDER. IT WAS THE FURTHER SUBMISSION THAT THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE DID NOT ACCEPT THE CONTENTIONS OF THE ASSESSEE AND HAD PASSED AN ORDER U/S 263 OF THE ACT WHICH IS IMPUGNED IN THIS APPEAL. IT WAS THE SUBMISSION THAT THE LD . PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS TAKEN REFERENCE TO THE SHAH COMMISSION REPORT WHICH WAS A COMMISSION OF INQUIRY APPOINTED BY THE GOVERNMENT OF INDIA UNDER THE CHAIRMANSHIP OF HON'BLE SHRI M.B. SHAH, FORMER JUDGE OF THE HON'B LE SUPREME COURT OF INDIA. IT WAS THE SUBMISSION THAT THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS RELIED ON THE SAID REPORT BEING SHAH COMMISSION REPORT TO HOLD THAT THERE WAS SUBSTANTIAL UNDER - INVOICING BY THE ASSESSEE. IT WAS THE SUBMISSION THAT THE ASSESSEE WAS NOT PUT TO NOTICE IN RESPECT OF THE SHAH COMMISSION REPORT AND, IN ANY CASE, THE SHAH COMMISSION REPORT , IN THE CASE OF THE ASSESSEE , WAS THE SUBJECT MATTER OF WRIT PETITION BEFORE THE JURISDICTIONAL HIGH COURT AT BOMBA Y AND THE HON'BLE HIGH COURT HAS ALSO GRANTED AN INTERIM STAY IN 5 ITA NOS. 253 TO 262/PNJ/2015 (A.YS. : 2007 - 08 TO 2011 - 12) RESPECT OF THE SHAH COMMISSION REPORT. THE LD. AR FURTHER PLACED BEFORE US AN AFFIDAVIT WHEREIN IT HAS BEEN AVERRED THAT THE ORDER PASSED U/S 263 OF THE ACT IS CONTRARY TO THE RECORDS INASMU CH AS THERE WAS NO MENTION OF THE SOURCE OF THE INFORMATION RELATING TO THE UNDER - INVOICING EITHER IN THE SHOW CAUSE NOTICE ISSUED U/S 263 OF THE ACT OR FOR THAT MATTER DURING THE COURSE OF THE REVISIONARY PROCEEDINGS PURSUANT TO THE NOTICE U/S 263 OF THE ACT. IT WAS THE SUBMISSION THAT THE ASSESSEE HAVING NOT BEEN PUT TO NOTICE IN RESPECT OF THE SHAH COMMISSION REPORT, THE RELIANCE PLACED BY THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE ON THE SAID SHAH COMMISSION REPORT WAS NOT PROPER AND THE ORDER PASSED U/S 263 WAS LIABLE TO BE ANNULLED. IT WAS THE SUBMISSION THAT THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS ALSO NOT GIVEN ANY POSITIVE FINDING IN RESPECT OF THE ALLEGED UNDER - INVOICING OR EVASION AND CONSEQUE NTLY, IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT OF BOMBAY IN THE CASE OF GABRIEL INDIA LTD. REPORTED IN 203 ITR 108 THE ORDER PASSED U/S 263 OF THE ACT WAS LIABLE TO BE ANNULLED. 6. IN REPLY, THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF T HE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE PASSED U/S 263 OF THE ACT. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET, A PERUSAL OF THE SHOW CAUSE NOTICE ISSUED BY THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE FOUND AT PAGES 51 TO 53 OF THE ASSESSEES APPEAL SHOWS THAT THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS ALLEGED THAT THE AO HAS NOT CONSIDERED THE PERCENTAGE OF UNDER - INVOICING BY THE ASSESSEE AS CALCULATED ON THE BASIS OF THE AVERAGE RATE OF FOB PRICE FOR THE SAME GRADE AND THE SAME PERIOD WHILE COMPLETING THE ASSESSMENT. A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT SUCH AN EXERCISE HAS NOT BEEN DONE BY THE AO AND THE AO HAS, IN FACT, ONLY REFERRED TO THE TRANSACTIONS 6 ITA NOS. 253 TO 262/PNJ/2015 (A.YS. : 2007 - 08 TO 2011 - 12) IN RESPECT OF THE AMOUNT OFFERED IN RESPECT OF THE SAID TWO UNDISCLOSED BANK ACCOUNTS. HE HAS NOT DONE ANY EXAMINATION IN RESPECT OF THE COMPLETE TRANSACTIONS DONE BY THE ASSESSEE. THOUGH THE AO HAS UNDERSTOOD THE MODUS OPERANDI OF THE ASSESSEE, HE HAS CONSIDERED THE TRANSACTIONS IN RESPECT OF M/S. JFE SHOJI TRADE CORPORATION, JAPAN AND THERE IS NO DISCUSSION IN ANY MANNER WHATSOEVER OF SIMILAR EXERCISE BEING DONE IN RESPECT OF THE OTHER TRANSACTIONS DONE BY THE ASSESSEE WITH OTHER PARTI ES. HOWEVER, A PERUSAL OF THE SHOW CAUSE NOTICE SHOWS THAT THE TRANSACTIONS DEALT WITH IN THE SHOW CAUSE NOTICE IS IN RESPECT OF THE TRANSACTIONS WITH CHINA WHEREAS M/S. JFE SHOJI TRADE CORPORATION IS OF JAPAN. THUS, ADMITTEDLY THE AO HAS ONLY DONE A PAR T EXAMINATION WHEREAS HE SHOULD HAVE DONE THIS EXERCISE IN RESPECT OF ALL THE TRANSACTIONS AS IT IS AN ADMITTED FACT BY THE ASSESSEE ITSELF THAT THEY ARE DOING UNDER - INVOICING. WHETHER THE SAID TWO BANK ACCOUNTS , WHICH HAVE BEEN DISCLOSED IN THE COURSE OF THE SURVEY/SEARCH , ARE THE ONLY BANK ACCOUNTS OR WHETHER THERE ARE OTHER BANK ACCOUNTS IN RELATION TO THE TRANSACTIONS WHICH ARE DEALT WITH OTHERS HAS NOT BEEN EXAMINED. THIS IS BECAUSE THE SAID TWO BANK ACCOUNTS ARE CONNECTED WITH THE TRANSACTIONS WITH M/S. JFE SHOJI TRADE CORPORATION. 8. AS REGARDS T HE ISSUE WHETHER THE ASSESSEE MUST BE PUT TO NOTICE IN RESPECT OF THE EVIDENCES WHICH ARE BEING RELIED UPON BY THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE WHEN INVOKING HIS POWERS U/ S 263 OF THE ACT, THE ANSWER WOULD BE IN THE NEGATIVE. TRUE, THE ASSESSEE MUST BE GIVEN AN OPPORTUNITY OF BEING HEARD AND THAT IS EXACTLY WHAT THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS DONE WHEN HE ISSUED THE NOTICE U/S 263. T HE SHAH COMMISSION REPORT IS ONLY A N EVIDENCE WHICH HAS SUBSEQUENTLY COME TO THE ATTENTION OF THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE AFTER PASSING OF THE 7 ITA NOS. 253 TO 262/PNJ/2015 (A.YS. : 2007 - 08 TO 2011 - 12) ASSESSMENT ORDER , WHICH HAS LED TO THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE TO INVOKE HIS POWERS U/S 263 OF THE ACT. THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS NOT USED THE SHAH COMMISSION REPORT FOR THE PURPOSE OF PASSING THE ORDER U/S 263 OF THE ACT. IN FACT, A PERUSAL OF THE ORDER OF THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE PASSED U/S 263 IN PAGE 3, PARA 4 WHERE IN HE HAS EXTRACTED THE RESPONSE OF THE ASSESSEE TO THE SHOW CAUSE NOTICE, THEREIN AT PARA 4.1 THE ASSESSEE HAS ITSELF SUBMITTED AS FOLLOWS : AS MENTIONED ABOVE BEFORE, THE ASSESSEE COMPANY VOLUNTARILY BROUGHT TO THE NOTICE OF THE DEPARTMENT AS REGARD TO THE BANK ACCOUNT ABROAD DURING THE COURSE OF SURVEY PROCEEDINGS AND HAD CATEGORICALLY STATED THAT THE SAID DEPOSIT IN SUCH BANK ACCOUNT WAS NOTHING BUT THE ADDITIONAL SALE PROCEEDS R ECEIVED BY THE ASSESSEE COMPANY AS PER THE ADDENDUM TO THE MAIN AGREEMENT BETWEEN THE ASSESSEE COMPANY WITH THE JAPANESE COMPANY TO WHOM THE ASSESSEE COMPANY HAD EXPORTED THE ORES IS NOTHING BUT A CONTRACTUAL OBLIGATION WHICH CAN BE VERIFIED FROM THE IMPOR TER OF THE IRON ORE FROM THE DEPARTMENT AS THE ADDRESS OF THE IMPORTER ARE MENTIONED IN THE COPY OF THE INVOICES RAISED. THUS, THE ASSESSEE ITSELF HAS ADMITTED TO THE RECEIPT OF ADDITIONAL SALE PROCEEDS IN RESPECT OF THE AGREEMENT BETWEEN THE ASSESSEE - CO MPANY WITH THE JAPANESE COMPANY TO WHOM THE ASSESSEE - COMPANY HAD EXPORTED THE ORES AND THIS MONEY WAS KEPT IN THE TWO FOREIGN BANK ACCOUNTS WHICH WAS UNDISCLOSED. THE ASSESSEE IS NOT DEALING ONLY WITH THE JAPANESE COMPANY BUT IS ALSO DEALING WITH OTHER CO MPANIES. THIS HAS NOT BEEN EXAMINED IS WHAT HAS BEEN ALLEGED BY THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE . 9. FURTHER, A PERUSAL OF THE ORDER OF THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE IN PARA 12.1 TO 1 2.3 SHOWS THAT THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS VERY MUCH 8 ITA NOS. 253 TO 262/PNJ/2015 (A.YS. : 2007 - 08 TO 2011 - 12) FOUNDED HIS ORDER U/S 263 AFTER SHOWING THAT NO INQUIRY AT ALL WAS MADE BY THE AO REGARDING THE EXPORTS AND THE VARIATION IN THE PRICE. THERE IS NO RECONCILIATI ON MADE BY THE AO OF THE SALES DECLARED BY THE ASSESSEE WITH THE INWARD FOREIGN EXCHANGE REMITTANCE RECEIVED BY THE ASSESSEE. THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS FURTHER IN PARA 12.2 CATEGORICALLY MENTIONED THAT THERE WAS SPECIFIC EVIDENCE TO SHOW THAT THE ASSESSEE HAS SUPPRESSED ITS SALES BY UNDER - INVOICING THE VALUE OF EXPORTS MADE TO M/S. JFE SHOJI TRADE CORPORATION, JAPAN AND THE AO HAS FAILED TO MAKE ANY INQUIRY REGARDING TH E CORRECTNESS OF THE SALES DECLARED BY THE ASSESSEE IN RESPECT OF THE OTHER SHIPPING BILLS. THIS IS EXACTLY WHAT HAS NOT BEEN DONE BY THE AO IN THE COURSE OF THE ASSESSMENT WHICH HAS LED TO THE SAID ASSESSMENT ORDER BEING ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. FURTHER, A PERUSAL OF PARA 12.9 OF THE ORDER OF LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE ALSO SHOWS THAT THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS CATEGORICALLY GONE THROUGH THE VAR IOUS STATEMENTS RECORDED FROM SMT. RADHA S. TIMBLO WHEREIN SHE HAS ADMITTED THAT THE AMOUNTS WERE REMITTED TO THE ACCOUNT OF SMT. RADHA S. TIMBLO AND THE SAME WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS OR IN THE RETURNS. FURTHER, A PERUSAL OF THE ORDER OF THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE SHOWS THAT THOUGH THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS INVOKED HIS POWERS U/S 263 ON THE BASIS OF THE FRESH EVIDENCE IN THE FORM OF SHAH COMMISSION REPORT, HE HAS NOT FOUNDED HIS ORDER U/S 263 OF THE ACT ON THE BASIS OF THE SAID SHAH COMMISSION REPORT. HE HAS DONE HIS OWN INDEPENDENT INQUIRY FROM THE RECORDS AS WERE AVAILABLE BEFORE HIM TO COME TO THE CONCLUSION THAT THERE IS UNDER - INVOICING WHICH HAS NOT BE EN VERIFIED BY THE AO IN THE COURSE OF THE ASSESSMENT. CLEARLY, THIS HAS MADE THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IT IS AFTER THIS 9 ITA NOS. 253 TO 262/PNJ/2015 (A.YS. : 2007 - 08 TO 2011 - 12) THAT THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS SET A SIDE THE ASSESSMENT ORDER AND HAS DIRECTED THE AO TO RE - DO THE ASSESSMENT AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. HERE, IT IS PERTINENT TO NOTE THAT THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS NOT DIRECTE D THE AO TO APPLY THE SHAH COMMISSION REPORT OR TO FOLLOW THE SHAH COMMISSION REPORT. IN FACT, THE FINDINGS AND THE DIRECTIONS OF THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE ARE CATEGORICAL AND SPECIFIC AND THERE IS NO DIRECTION TO T HE AO TO HAVE ANY REFERENCE TO THE SHAH COMMISSION REPORT. THE APPREHENSION , WHICH HAS BEEN EXPRESSED BY THE LD. AR ON BEHALF OF THE ASSESSEES , THAT THE SHAH COMMISSION REPORT WOULD BE USED AGAINST THE ASSESSEES CONSEQUENTLY DOES NOT FIND ANY FOUNDATION. IN ANY CASE, THE ISSUE OF SHAH COMMISSION REPORT BEING USED AGAINST THE ASSESSEES IS THE SUBJECT MATTER OF AN INTERIM STAY BY THE HON'BLE JURISDICTIONAL HIGH COURT. IT SHOULD BE SPECIFICALLY UNDERSTOOD HERE THAT THE LD. PRINCIPAL COMMISSIONER OF INCOME - T AX (CENTRAL), BANGALORE HAS NOT DIRECTED THE AO TO CONSIDER OR TO FOLLOW THE SHAH COMMISSION REPORT. THE AO HAS ONLY BEEN DIRECTED BY THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE TO RE - DO THE ASSESSMENT BY DOING PROPER VERIFICATION IN RESPECT OF ALL THE TRANSACTIONS DONE BY THE ASSESSEE AFTER GRANTING THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. THE DECISION RELIED UPON BY THE LD. AR IN RESPECT OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF GABRIEL INDIA REFERRED TO SUPRA WOU LD NOT COME TO THE RESCUE OF THE ASSESSEE INSOFAR AS THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS CATEGORICALLY POINTED OUT IN PARA 12.2 OF HIS ORDER THE SHORTFALL, MORE SPECIFICALLY, THE ABSENCE OF INQUIRY DONE BY THE AO AND THE A REA WHERE THE AO HAS SPECIFICALLY NOT DONE THE INQUIRY. THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE IN THIS CASE HAS NOT SIMPLY ASKED THE AO TO RE - EXAMINE THE MATTER. IT IS AFTER DETAILED 10 ITA NOS. 253 TO 262/PNJ/2015 (A.YS. : 2007 - 08 TO 2011 - 12) EXAMINATION, AFTER CONSIDERING THE SURRENDER /ACCEPTANCE OF THE ASSESSEE IN RESPECT OF THE UNDER - INVOICING OF PART OF THE TRANSACTIONS THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE HAS DIRECTED THE EXAMINATION OF ALL THE TRANSACTIONS WHICH HAS NOT BEEN DONE BY THE AO. IN THESE CI RCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSEE HAS NOT BEEN ABLE TO POINT OUT ANY ERROR WHICH MAKES THE ORDER PASSED U/S 263 BY THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE UNSUSTAINABLE. IN THE CIRCUMSTANCES, THE ORDER PASSED U/S 263 BY THE LD. PRINCIPAL COMMISSIONER OF INCOME - TAX (CENTRAL), BANGALORE STANDS UPHELD AND THE APPEALS FILED BY THE ASSESSEES STANDS DISMISSED. 10. IN REGARD TO THE ADDITIONAL GROUND, NO ARGUMENTS HAVE BEEN PLACED AND THEREFORE THE SAID GROUND IS DISMISSE D AS NOT SUBSTANTIATED. 1 1 . IN THE RESULT, THE APPEALS FILED BY THE ASSESSEES STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 8 /08/2015. S D / - (N.S. SAINI) ACCOUNTANT MEMBER S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 1 8 /08/ 201 5 *SSL* 11 ITA NOS. 253 TO 262/PNJ/2015 (A.YS. : 2007 - 08 TO 2011 - 12) COPY TO : (1) APPELLANT S (I) M/S. TIMBLO PRIVATE L TD., (II) SMT. RADHA S. TIMBLO (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER, 12 ITA NOS. 253 TO 262/PNJ/2015 (A.YS. : 2007 - 08 TO 2011 - 12) DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 18/08/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 18/08/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 18/08/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 18/08/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 18/08/2015 SR.PS 6. DATE OF PRONOUNCEMENT 18/08/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 18/08/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER
Mehul