Samarth Urban Coop Bank Ltd., Osmanabad V. DCIT, Circle-3, Nanded

ITA 2555/PUN/2012

• Counselvise Citation: 255524514 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 26-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Rectification of order; Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 2555/PN/2012 (ASSESSMENT YEAR 2007-08) SAMARTH URBAN COOP. BANK LTD., KALA MARUTI CHOWK, OSMANABAD .. APPELLANT PAN NO.AAAAS5332G VS. CIT-I, AURANGABAD .. RESPONDENT ASSESSEE BY : SHRI S.N. PURANIK REVENUE BY : SHRI B.C. MALAKAR DATE OF HEARING : 19-11-2014 DATE OF PRONOUNCEMENT : 26-11-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 12-10-2012 OF THE CIT(A), AURANGABAD RE LATING TO ASSESSMENT YEAR 2007-08. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE COOPERATIVE BANK FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 29-10-2007 DECLARING INCOME AT RS.10,95,809/-. THE AO COMPLETED THE ASSESSMENT U/ S.143(3) ON 30-12-2009. IN THE SAID ORDER, THE AO HELD THAT INTEREST ON STICKY ADVANCES OF RS.34,58,116/- SHOULD BE ADDED T O THE TOTAL INCOME. HOWEVER, WHILE COMPUTING THE TOTAL INCOME, NET PROFIT AS PER PROFIT AND LOSS ACCOUNT WAS TYPED WRO NGLY AT 2 RS.5,39,193/- AND FIGURE OF TOTAL INCOME OF RS.21,6 0,233/- WAS ALSO TYPED WRONGLY. SUBSEQUENTLY, THE AO PASSED TH E ORDER U/S.154 RECTIFYING THE SAME AND DETERMINED TOTAL IN COME AT RS.42,94,570/-. 3. THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A ) CHALLENGING THE VALIDITY OF THE 154 ORDER AS WELL A S THE ADDITION OF INTEREST AMOUNTING TO RS.34,58,116/- ON NPA ACCO UNTS. THE LD.CIT(A) DECIDED THE ISSUE OF ADDITION OF INTEREST ON ACCOUNT OF NPA ACCOUNTS IN FAVOUR OF THE ASSESSEE. HOWEVER , THE VALIDITY OF THE ORDER PASSED U/S.154 REMAINED UNADJ UDICATED. THE ASSESSEE FILED A RECTIFICATION PETITION BEFORE LD.CIT(A) STATING THAT THE ISSUE OF VALIDITY OF 154 PROCEEDIN GS REMAIN UNADJUDICATED. 4. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESS EE BY OBSERVING AS UNDER : 3. THE GROUND NO.1 RAISED BY THE APPELLANT IS 'ORDE R PASSED U/S 154 IS AB-INITIO BAD-IN-LAW. HENCE THE SAME M AY PLEASE BE ANNULLED.' IN THIS REGARD, IT HAS BEEN NOTI CED THAT THE A.O. HAS NOT FOLLOWED THE LEGAL PROCEDURE FOR RECTIF YING HIS ORDER U/S 143(3) BY PASSING ORDER U/S 154 OF THE ACT. T HE ABOVE FACT HAS BEEN NOTED FROM PARA-4 & 5 OF THE RE PORT OF THE ACIT, CIRCLE-3, NANDED DATED 18/08/2011, WHICH ARE EXTRACTED BELOW - '4. AS PER SUB-SECTION 3 TO SECTION 154, AN AMENDMENT, WHICH HAS THE EFFECT OF ENHANCING AN ASSESSMENT OR REDUCING A REFUND OR OTHERWISE INCREASING THE LIABILITY OF THE ASSESSEE, SHALL NOT BE MADE UNDER THIS SECTION UNLESS THE AUTHORITY CONCERNED HAS GIVEN TO THE ASSESSEE TO ITS INTENTION SO TO DO AND HAS ALLOWED THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD, 3 5. HOWEVER, THERE IS NO EVIDENCE ON RECORD REGARDING THE OPPORTUNITY GIVEN TO THE ASSESSEE, SINCE THERE IS NO ENTRY IN ORDER SHEET NOR THERE IS NOTICE O N RECORD. THE ORDER PASSED U/S 154 OF THE I.T. ACT, 1961 IS WELL WITHIN TIME AND AS THE MISTAKE IS APPARENT FROM RECORD. THOUGH MISTAKE IS CREPT IN THE ORDER U/S 143(3) BUT THE SUBSTANCE IN ORDER IS CORRECT. ; THE ORDER CANNOT BE TREATED AS BAD IN LAW DUE TO TYPOGRAPHICAL MISTAKE CREPT IN THE ORDER. THE APPEAL MAY BE DECIDED ACCORDING TO MERITS.' 4. FROM THE ASSESSMENT ORDER OF THE A.O. PASSED U/S 143(3) DATED 30/12/2009, IT HAS BEEN NOTICED THAT HE HAS MADE ADDITION OF RS.34,58,116/- TO THE INCOME RETURN ED IN PARA-5 OF THE ASSESSMENT ORDER STATING REASONS FOR THE SAM E, IN PARA-1 OF THE ASSESSMENT ORDER, THE A.O. HAS STATED TH E INCOME RETURNED BY THE APPELLANT AT RS.10,95,809/-. HOWEVER, THE A.O. WHILE COMPUTING THE TOTAL INCOME OF THE AP PELLANT HAS INADVERTENTLY CONSIDERED THE FIGURES OF SOME OTHER ASSES SEE DUE TO TYPOGRAPHICAL MISTAKE ON ACCOUNT OF COPY PA STE' AT THE TIME OF TYPING THE ORDER. THEREFORE, THERE WAS M ISTAKE APPARENT FROM RECORD IN THE ORDER OF THE A.O. HOWEV ER, WHILE PASSING RECTIFICATION ORDER U/S 154, THE A.O. HAS NOT FOLLOWED PROPER LEGAL PROCEDURE MENTIONED IN SECTION 154 OF T HE ACT FOR RECTIFYING THE ORDER. IN VIEW OF THE ABOVE FACT S, GROUND NO.1 OF THE APPELLANT THAT THE ORDER PASSED BY THE A. O. IS VOID- AB-INITIO IS ALLOWED AS THE A.O. HAS NOT FOLLOWED LEGA L PROCEDURE MENTIONED IN SECTION 154 OF THE ACT FOR RE CTIFYING THE ORDER. THE A.O. IS, HOWEVER, FREE TO PASS FRESH REC TIFICATION ORDER U/S 154 BY FOLLOWING LEGAL PROCEDURE MENTIONED IN SECTION 154 OF THE ACT. 5. IN THE RECTIFICATION APPLICATION DATED 15/11/201 1, THE APPELLANT HAS MENTIONED THAT - 'YOUR HONOUR'S ORDER A GAINST ORDER U/S 143(3) IS DATED 12/09/2011. HOW SAID CAN BE CONSIDERED TO HAVE FOLLOWED IN ORDER DATED 07/09/201 1.' HOWEVER, THE APPEAL ORDER PASSED IN RESPECT OF APPEAL AGAINST ORDER U/S 154 IS DATED 13/09/2011 AND NOT 07/09/2011 AS MENTIONED BY THE APPELLANT. 6. THUS, THE MISTAKE IN THE APPELLATE ORDER POINTED O UT BY THE APPELLANT HAS BEEN RECTIFIED AS ABOVE. 5. AGGRIEVED WITH SUCH ORDER OF THE LD.CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. HONBLE CIT(A) HAS CANCELLED THE ORDER U/S.154 PA SSED BY AO, BUT ERRED IN FURTHER OBSERVING ASSESSING OFFICE R IS, HOWEVER, FREE TO PASS FRESH ADJUDICATION ORDER U/S.154 FOLLOWING LEGAL PROCEDURE MENTIONED IN SECTION 154 O F THE INCOME TAX ACT, 1961. 4 2. GROUND NO.1 IS WITHOUT PREJUDICE TO OUR GROUND IN APPEAL AGAINST CIT(A) ORDER IN AGAINST 143(3) THAT OR DER U/S.143(3) BY ASSESSING OFFICER IS BAD IN LAW, AND CIT(A) HAS NOT DECIDED THIS GROUND. APPELLANT PRAYS FOR DIRECTI ON IN THE MATTER. 6. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES. THE GRIEVANCE OF THE ASSESSEE IS REGARD ING LAST SENTENCE OF PARA 4 OF THE ORDER OF LD.CIT(A) WHICH READS AS UNDER : THE A.O. IS, HOWEVER, FREE TO PASS FRESH RECTIFICATIO N ORDER U/S 154 BY FOLLOWING LEGAL PROCEDURE MENTIONED IN SECTIO N 154 OF THE ACT. 6.1 IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE SAME SHOULD BE DELETED SINCE THE SAME IS I NVALID AND WITHOUT JURISDICTION. ACCORDING TO HIM, THE LD.CIT (A) CANNOT DIRECTLY OR INDIRECTLY SET ASIDE OR DIRECT THE AO A S HE HAS NO POWERS OF SETTING ASIDE. ACCORDING TO THE LD. COUN SEL FOR THE ASSESSEE WHAT CANNOT BE DONE DIRECTLY CANNOT BE DON E INDIRECTLY AND THEREFORE, ONCE THE ORDER OF THE AO IS UPHELD AS INVALID AND VOID AB-INITIO, THE SAME CANNOT BE REVI VED. FURTHER, ACCORDING TO HIM, THE LD.CIT(A) CANNOT DO SO WHILE PASSING THE ORDER U/S.154 AS THE ISSUE AS TO WHETHE R THE LD.CIT(A) CAN ISSUE A DIRECTION TO THE ITO IS A DEB ATABLE ISSUE. 6.2 WE DO NOT FIND ANY SUBSTANCE IN THE ABOVE ARGUM ENTS OF THE LD. COUNSEL FOR THE ASSESSEE. THE LD.CIT(A) WH ILE HOLDING THAT THE ORDER PASSED U/S.154 IS VOID AB-IN ITIO HAS MERELY OBSERVED THAT AO IS FREE TO PASS FRESH RECTI FICATION 5 ORDER U/S.154 BY FOLLOWING LEGAL PROCEDURE MENTION ED IN SECTION 154 OF THE INCOME TAX ACT. HE HAS NOT GIVE N ANY DIRECTION TO THE AO TO FOLLOW A PARTICULAR PROCEDUR E BYPASSING LEGAL REQUIREMENTS. THEREFORE, THE ASSESSEE SHOULD NOT HAVE ANY GRIEVANCE. HE CAN HAVE GRIEVANCE ONLY IF CERTA IN ADDITION IS MADE WHICH IS NOT AS PER LAW. WE, THEREFORE, DO NOT FIND ANY MERIT EITHER IN THE GROUNDS OF APPEAL OR IN THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE. ACCO RDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 26-11-2014. SD/- SD/- (SUSHMA CHOWLA) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 26 TH NOVEMBER, 2014 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A), AURANGABAD 4. THE CIT, AURANGABAD 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE