Paradeep Parivahan Pvt. Ltd, Jagatsinghpur V. CIT, Cuttack

ITA 263/CTK/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7846 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 13-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Assessee Lawyers: SASWAT ACHARYA
• Section: 143(3); 148; 263

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK (BEFORE S/SHRI K.K. GUPTA AM & K.S.S.PRASAD RAO, J M) I.T.A.NO. 263/CTK/2012 ASSESSMENT YEAR: 2005-06 PARADEEP PARIVAHAN PVT LTD., 204, OBC BUILDING, BANK STREET, PARADEEP, JAGATSINGHPUR PA NO.AACCP 0890 J VS DCIT, CIRCLE 1(1), CUTTACK APPELLANT RESPONDENT APPELLANT BY: SHRI SASWAT ACHARYA RESPONDENT BY: SHRI A BHATTACHARJEE DATE OF HEARING :25.6.2012 DATE OF PRONOUNCEMENT: 29.6.2012 ORDER PER K.S.S.PRASAD RAO, JM THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AG GRIEVED BY THE ORDER DATED 29.2.2012 OF THE CIT, CUTTACK FOR THE ASSESSMENT YE AR 2005-06 IN THE CASE OF THE ASSESSEE. 2. THE ASSESSEE HAS RAISED THE FOLLOWING ISSUES IN ITS GROUNDS OF APPEAL: 1. THAT FOR THE ORDER PASSED BY THE FORUM BELOW IS EX-FACIE ILLEGAL AND ARBITRARY AND IS BASED ON INCORRECT APPRECIATION OF LAW AS WE LL AS THE FACTS AND CIRCUMSTANCES OF THE CASE AND THUS DESERVES TO BE Q UASHED IN LIMINE. 2. FOR THAT THE INITIATION OF REVISION PROCEEDINGS U/S.263 BY THE LD CIT REMANDING THE MATTER BACK TO THE AO FOR MAKING ASSESSMENT AFR ESH IS AGAINST THE WEIGHT OF EVIDENCE AND AS SUCH LIABLE TO BE QUASHED. 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RAISED IN THE APPEAL AND ITS LEGAL IMPLICATIONS. I.T.A.NO. 263/CTK/2012 ASSESSMENT YEAR: 2005-06 2 4. ON CAREFUL ANALYSIS OF THE ORDER OF THE CIT IN T HE LIGHT OF MATERIAL MADE AVAILABLE BEFORE THE TRIBUNAL AS WELL AS RIVAL SUBMISSIONS OF BOTH PARTIES, THE UNDISPUTED FACTS RELATING TO THESE ISSUES ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956. THE ASSESSEE DERIVE S INCOME FROM TRANSPORTATION, MACHINERY HIRE AND SALE OF IRON ORE. IT IS REGUL ARLY TO ASSESS TO INCOME TAX. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, I.E. A.Y. 2005 -06, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3)/144/147 ON 30.12.2009 AND THE APPEAL AGAINST WHICH HAS BEEN FINALIZED BY THE FIRST APPELLATE AUTHORITY AS WELL AS SECOND APPELLATE AUTHORITY. 5. IN THE MEANWHILE, LD CIT ISSUED NOTICE UNDER SEC TION 263 TO THE ASSESSEE WAS SERVED ON 25.11.2010. SINCE THERE IS NO COMPLIANCE OF THE ASSESSEE TO THE NOTICE ISSUED UNDER SECTION 263, THEREFORE, THE CIT HAS PASSED TH E IMPUGNED ORDER HOLDING THAT THE AO WHILE FRAMING THE ASSESSMENT ORDER WAS APPARENTL Y IN ERROR IN NOT EXAMINING THE ISSUES HAVING DIRECT IMPACT ON THE COMPUTATION OF T OTAL INCOME IN THE HANDS OF THE ASSESSEE AS ENUMERATED IN SUB-PARA 1 TO 5 ON THE SE COND PARA OF THE IMPUGNED ORDER. ALL THE ASPECTS REFERRED THEREIN ARE WITH RESPECT T O APPLICABILITY OF PROVISIONS OF SECTION 40(A)(IA) OF THE I.T.ACT. HENCE, THE PRESENT APPEA L IS FILED BY THE ASSESSEE BEFORE THE TRIBUNAL. 6. ON CONSIDERATION OF THE MATERIALS MADE AVAILABLE WITH THE TRIBUNAL, IT IS FOUND THAT THE ASSESSEE HAS CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. AGAINST THE ORDER OF THE CIT(A), THE DEPARTMENT FIL ED APPEAL BEFORE THE TRIBUNAL BEING I.T.A. NOS.266 AND 267/CTK/2011 FOR THE ASSESSMENT YEARS 2005-06 AND 2007-08 AND THE ISSUE WAS ADJUDICATED BY THE TRIBUNAL IN A COMM ON ORDER DATED 12.9.2011. THE ISSUE RAISED BY THE DEPARTMENT FOR THE ASSESSMENT Y EAR 2005-06 IS IN RESPECT OF APPLICABILITY OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND THIS WAS ULTIMATELY FOUND THAT THE DISALLOWANCE MADE BY THE DEPARTMENT BY INV OKING SECTION 40(A)(IA) WAS HELD AS INVALID. NOW THE CIT HAS RAISED THE SAME ISSUE OF APPLICABILITY OF SECTION 40(A)(IA) TO THE AMOUNTS CLAIMED BY THE ASSESSEE IN ASSESSMENT A ND HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE CIT HAS NO JURISDICTION TO INVOKE THE POWERS UNDER SECTION 263 AS PER CLAUSE (C) MENTIONED IN EXPLANATION ATTACHED TO SECTION 263 OF THE ACT WHICH READS AS UNDER: I.T.A.NO. 263/CTK/2012 ASSESSMENT YEAR: 2005-06 3 (C) WHERE ANY ORDER REFERRED TO IN THIS SUB-SECT ION AND PASSED BY THE AO HAD BEEN THE SUBJECT MATTER OF ANY APPEAL (FILED ON OR BEFORE OR AFTER THE 1 ST DAY OF JUNE, 1988), THE POWERS OF THE COMMISSIONER UNDER T HIS SUB-SECTION SHALL EXTEND (AND SHALL BE DEEMED ALWAYS TO HAVE EXTENDED) TO SU CH MATTERS AS HAD NOT BEEN CONSIDERED AND DECIDED IN SUCH APPEAL. 7. IN THE PRESENT CASE ON HAND, THE DEPARTMENTS CO NTENTION IS THAT THE ISSUE INVOKED BY CIT REVISION IS OTHERWISE THE ISSUE CONS IDERED BY THE FIRST APPELLATE AND SECOND APPELLATE AUTHORITY AGAINST THE ASSESSMENT P ASSED ORIGINALLY. EVEN ASSUMING, BUT NOT ADMITTING, IT IS TO BE CORRECT AS CAN BE SE EN FROM THE ASSESSMENT ORDER DATED 31.12.2009 PASSED BY THE AO UNDER SECTION 143(3)/14 4/147 OF THE ACT, IT IS MENTIONED THAT ASSESSEE HAS FILED ITS RETURN OF INCOME FOR AS SESSMENT YEAR 2005-06 ON 22.11.2005 OFFERING INCOME OF RS.90,36,410 FOR TAXATION. THE SAME WAS ASSESSED ON A TOTAL INCOME OF RS.1,17,60,230 U/S.143(3) OF THE I.T.ACT. SUBSE QUENTLY, ON PERUSAL OF THE CASE RECORD, IT IS REVEALED THAT OUT OF TOTAL SUNDRY CRE DITORS PAYABLE OF RS.3,17,97,733, THERE WAS OUTSTANDING LIABILITY OF RS.71,52,617 IN THE NA ME OF M/S. AARPEE CARRIES PVT LTD.,, AND NO DEDUCTION HAD BEEN MADE ON THE EXPENDITURE W HICH IS DISALLOWABLE BY VIRTUE OF PROVISIONS OF SECTION 49(A)(IA) OF THE ACT. FROM T HESE OBSERVATIONS MADE IN THE ASSESSMENT ORDER, IT IS CLEAR THAT THE ORIGINAL ASS ESSMENT ORDER UNDER SECTION 143(3) WAS PASSED BEFORE THE ASSESSMENT UNDER SECTION 143( 3) R.W.S. 144/147 OF THE ACT, WHICH WAS SUPPORTED BY ISSUE OF NOTICE UNDER SECTIO N 148 DT.2.2.2009. IN THAT VIEW OF THE MATTER, AS PER SUB-SECTION (2) OF SECTION 263, NO ORDER UNDER SECTION 263(1) CAN BE PASSED BY THE CIT AFTER THE EXPIRY OF TWO YEARS FRO M THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED PER SE , THE ORDER OF ASSESSMENT PASSED BY THE AO UNDER SECTION 143(3) R.W.S 144/147 ON 31.12.2009 WAS SOUGHT TO BE REVISED BY THE CIT IN THE IMPUGNED ORDER. THE IMPUG NED ORDER IS DATED 29.2.2012. THIS ITSELF IS BARRED BY LIMITATION HAVING BEEN PASSED A FTER THE EXPIRY OF TWO YEARS I.E. ON 31.12.2009. HENCE, IN THAT VIEW OF THE MATTER ALSO , THE PRESENT ORDER PASSED BY THE CIT IS NOT SUSTAINABLE FOR LEGAL SCRUTINY AND IT IS HER EBY SET ASIDE BY ALLOWING THE APPEAL OF THE ASSESSEE CONSIDERING THE FIRST ISSUE WHEREIN IT WAS ALLEGED THAT THE ORDER PASSED BY THE CIT IS EX-FACIE ILLEGAL AND ARBITRARY AND IS BA SED ON INCORRECT APPRECIATION OF LAW IN THE FACTS AND CIRCUMSTANCES OF THE CASE AN D THUS D ESERVES TO BE QUASHED IN LIMINE I.T.A.NO. 263/CTK/2012 ASSESSMENT YEAR: 2005-06 4 8. IN THE RESULT, APPEAL IS ALLOWED. SD/- SD/- (K.K.GUPTA) (K.S.S.PRASAD RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29 TH JUNE, 2012 PARIDA COPY TO : 1. ASSESSEE- PARADEEP PARIVAHAN PVT LTD.,204, OBC B UILDING, BANK STREET, PARADEEP, JAGATSINGHPUR 2. ASSESSING OFFICER - DCIT, CIRCLE 1(1),CUTTACK 3. CIT CONCERNED 4. CIT ((A), CUTTACK 5. D.R., ITAT, CUTTACK. 6. GUARD FILE. TRUE COPY BY ORDER SR. PVT. SECRETARY