M/s. Pavun Silicates Pvt. Ltd., CHENNAI V. ITO, CHENNAI

ITA 2896/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8140 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-01-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 07-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B. SAHADEVAN
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 40A(3); 271(1)(b); 139; 143(3); 92; 143(2)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.2896/MDS/2016 ( / ASSESSMENT YEAR: 2006-07) M/S. PAVUN SILICATES PVT.LTD., 81, NEW AVADI ROAD, KILPAUK, CHENNAI-600 010. VS THE INCOME TAX OFFICER, COMPANY WARD-V(1), CHENNAI-34. PAN: AAACP1796K ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. J.PRABHAKAR, C.A /RESPONDENT BY : MR. B.SAHADEVAN, JCIT /DATE OF HEARING : 2 ND JANUARY, 2017 /DATE OF PRONOUNCEMENT : 5 TH JANUARY, 2017 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS)- 3, CHENNAI DATED 31.05.2016 IN ITA NO.16/2014-15/C IT(A)-3 PASSED UNDER SECTION 143(3) R.W.S. 147 & 250(6) OF THE ACT. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS IN ITS A PPEAL, HOWEVER THE CRUX OF THE ISSUE IS AS FOLLOWS:- (I) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ORDER OF REASSESSMENT MADE BY THE LEARNED ASSESSING OFFICER UNDER SECTION 147 OF THE ACT . 2 ITA NO.2896 /MDS/2016 (II) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF ` 16,63,885/- MADE BY THE LEARNED ASSESSING OFFICER BEING THE AMOUNT PAID TOWARDS EXCISE DUTY. (III) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF ` 1,19,502/- MADE BY THE LEARNED ASSESSING OFFICER UNDER SECTION 40A(3) OF THE ACT BEING THE AMOUNT PAID IN EXCESS OF ` 20,000/- BY CASH TOWARDS PURCHASE OF FIREWOOD. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A DOMESTIC COMPANY ENGAGED IN THE BUSINESS OF MANUFAC TURE OF SODIUM SILICATES FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 29.11.2006 DECLARING NIL INCOME. THE LEARNED ASSESSING OFFICER HAD REOPENED THE ASSESSMENT BY ISSUANCE OF NOTICE UNDER SECTION 148 ON 28.03.2013. THEREAFTER NOTICE UNDER SECTION 143(2) WAS ISSUED TO THE ASSESSEE ON 16.12.2013 AND THE ASSESS MENT WAS COMPLETED UNDER SECTION 143(3) R.W.S 147 OF THE ACT ON 05.03.2014, WHEREIN HE MADE CERTAIN DISALLOWANCES. 4. AT THE OUTSET, THE LEARNED AUTHORIZED REPRESENTA TIVE SUBMITTED THAT THE ASSESSMENT WAS REOPENED BECAUSE THE 3 ITA NO.2896 /MDS/2016 ASSESSEE HAD FILLED THE REQUISITE FORM ERRONEOUSLY. HE FURTHER SUBMITTED THAT AS PER SECTION 139(9) OF THE ACT, TH E LEARNED ASSESSING OFFICER OUGHT TO HAVE GIVEN AN OPPORTUNIT Y TO RECTIFY THE DEFECT IN THE RETURN OF INCOME FILED BE FORE THE REVENUE WITHIN A PERIOD OF FIFTEEN DAYS. HE FURTHE R ARGUED BY STATING THAT ONE MORE OPPORTUNITY MAY BE GIVEN TO T HE ASSESSEE IN ORDER TO EXPLAIN THE EXPENDITURE INCURR ED WITH RESPECT TO EXCISE DUTY, VARIATION IN PROCESS AND FI NISHED GOODS AND THE REASONS FOR HAVING PAID IN CASH TOWAR DS PURCHASE OF FIREWOOD. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENT LY ARGUED AGAINST THE SUBMISSIONS OF THE LEARNED AUTHO RIZED REPRESENTATIVE AND PLEADED THAT THE ORDER OF THE LD .CIT(A) MAY BE CONFIRMED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. WE DO NOT FIND ANY MERIT IN THE SUBMISSIONS OF THE LEARNED AUTHORIZED REPRESENT ATIVE. HOWEVER, SINCE HE CLAIMS THAT THE EXCISE DUTY PAID BY THE ASSESSEE AND THE OTHER EXPENDITURE INCURRED HAS BEE N 4 ITA NO.2896 /MDS/2016 CORRECTLY CLAIMED AS DEDUCTION WHICH COULD NOT BE APPRECIATED BY THE REVENUE DUE TO LACK OF OPPORTUNI TY PROVIDED BY THE REVENUE, IN THE INTEREST OF JUSTICE , WE HEREBY REMIT BACK THE ENTIRE CASE OF THE ASSESSEE BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR DE NOVO CONSIDERA TION. WE ALSO HEREBY DIRECT THE ASSESSEE TO PROMPTLY CO-OPER ATE WITH THE REVENUE IN THEIR PROCEEDINGS IN ORDER TO EXPEDI TE THEIR ORDERS FAILING WHICH THE REVENUE SHALL BE AT LIBERT Y TO PASS APPROPRIATE ORDERS IN ACCORDANCE WITH LAW & MERIT B ASED ON THE MATERIALS ON RECORD. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE 5 TH JANUARY, 2017 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATE: 05 .01. 2017 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF