Rupashree Das, Bhubaneswar V. CIT, Bhubaneswar

ITA 303/CTK/2011

• Counselvise Citation: 30322114 RSA 2011
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 20-10-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 31-05-2011
• Court: TRIBUNAL
• Department Lawyers: PARAMITA TRIPATHY
• Assessee Lawyers: P C SETHIAR
• Keywords: Opportunity of being heard; Principle of natural justice; Assessment record
• Section: 148; 263; 40A(3); 143(3); 142(1)

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 303/CTK/2011 (ASSESSMENT YEAR 2006 - 07) SMT.RUPASHREE DAS, PLOT NO.22, MADHUSUDAN NAGAR, BHUBANESWAR. PAN:ADLPD 3110 E VERS US COMMISSIONER OF INCOME - TAX, BHUBANEWWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI P.C.SETHI,AR FOR THE RESPONDENT SMT. PARAMITA TRIPATHY, DR DATE OF HEARING : 20.10.2011 DATE OF PRONOUNCEMENT : 09.11.2011 ORDER SHRI K.S.S.PRASAD RAO, JM : THIS APPEAL IS FILED BY THE ASSESSEE HAVING BEEN AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME - TAX DT.17.3.2011 PASSED U/S.263 OF THE INCOME - TAX ACT,1961 FOR THE ASSESSMENT YEAR 2006 - 07 IN CASE OF THE ASSESSEE. 2. THE ASSESSEE HAS RAISED THE FOLLOWING ISSUES IN ITS GROUNDS OF APPEAL. 1. THAT, THE ORDER OF THE LEARNED CIT IS ILLEGAL, WITHOUT JURISDICTION, CONTRARY TO THE PROVISIONS OF ACT AND IS IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND FOR THAT MATTER THE IMPUGNED ORDER U/S 263 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) IS LIABLE TO BE QUASHED AND/OR ANNULLED. 2. THAT, THE NOTICE U/S 263 OF THE ACT HAS NOT BEEN ISSUED BY THE COMMISSIONER OF INCOME - TAX AND FOR THAT MATTER THE ORDER U/S 263 OF THE ACT, IS LIABLE TO BE QUASHED AND/OR ANNULLED. 3. THAT, THE CERTIFIED COPIES OF ORDER SHEET AND PARTICULARS RELATING TO THE ASSESSMENT STARTING FROM ISSUANCE OF NOTICE U/S 143(2) OF THE ACT TO TILL THE COMPLETION OF ASSESSMENT U/S 143(3) OF THE ACT HAS NOT BEEN P ROVIDED TO THE APPELLANT IN SPITE OF REPEATED REQUEST AND FOR THAT MATTER THE ORDER U/S 263 OF THE ACT, IS PASSED WITHOUT GIVING OPPORTUNITY OF BEING HEARD AND IS IN GROSS VIOLATION TO PRINCIPLES OF NATURAL JUSTICE AND FOR THAT MATTER THE ORDER U/S 263 OF THE ACT IS LIABLE TO BE QUASHED AND/OR ANNULLED. 4. THAT, THE ORDER OF THE LEARNED CIT IS ILLEGAL, WITHOUT JURISDICTION AS THE ORDER HAS NOT CONSIDERED THE WRITTEN SUBMISSION FILED BY ITA NO.303/CTK/2011 2 THE APPELLANT AND FOR THAT MATTER THE ORDER U/S 263 OF THE ACT, IS LIAB LE TO BE QUASHED AND/OR ANNULLED. 5. THAT, THE LEARNED CIT HAS FAILED TO GIVE ANY SPECIFIC AND COGENT REASON SO AS TO CANCEL THE ASSESSMENT ORDER AND FOR THAT MATTER THE ORDER U/S 263 OF THE ACT, IS LIABLE TO BE QUASHED AND/OR ANNULLED. 6. THAT, THE CASE LAWS CITED BY THE LEARNED CT IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND FOR THAT MATTER THE ORDER U/S 263 OF THE ACT BASING ON SUCH JUDGMENTS IS LIABLE TO BE QUASHED AND/OR ANNULLED. 7. THAT, THE COST OF APPEAL MAY BE GIVEN TO THE A PPELLANT IN ACCORDANCE WITH THE RULES. 8. THAT THE APPELLANT MAY ADD, ALTER, AMEND, MODIFY OR WITHDRAW ANY OF THE GROUNDS AT THE TIME OF HEARING OF THE MATTER WITH THE LEAVE OF THE HONBLE TRIBUNAL. 3. BOTH THE PARTIES WERE HEARD REGARDING THE ISSUES RA ISED BY THE ASSESSEE AND THEIR LEGAL IMPLICATIONS. 4. ON CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL AND ANALYZING THE SAME IN THE LIGHT OF THE SUBMISSIONS OF BOTH THE PARTIES, THE UNDISPUTED FACTS RELATING TO THE ISSUES ARE THAT T HE ASSESSMENT IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2006 - 07 WAS COMPLETED BY THE ASSESSING OFFICER U/S.143(3) OF THE I.T. ACT ON 21.10.2008. THE LEARNED CIT CALLED FOR THE ASSESSMENT RECORDS OF THE ASSESSMENT AND EXAMINED . ON SUCH EXAMINATIO N IT WAS FOUND BY HIM THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. HENCE, HE ISSUED SHOW CAUSE NOTICE DT.9.2.2010 PROPOSING TO MODIFY/CANCEL THE ASSESSMENT ORDER UNDER PROVISIONS OF SECTION 263 OF THE I . T. ACT . THE ASSESSEE WAS SERVED WITH THE SAID NOTICE IN RESPONSE TO WHICH THE ASSESSEE HAS SUBMITTED THAT THE SHE WOULD BE ABLE TO REPLY TO THE SAID SHOW CAUSE NOTICE ONLY AFTER RECEIVING THE CERTIFIED COPIES OF THE RECORDS OF THE ITA NO.303/CTK/2011 3 A SSESS MENT PROCEEDINGS FOR WHICH SHE HAD APPLIED TO THE ASSESSING OFFICER BUT THE AO HAD NOT FURNISHED THE SAME TO HER. THE LEARNED CIT ISSUED ANOTHER LETTER DT.3.3.2010 STATING THEREIN THAT THE ORDER OF THE ASSESSING OFFICER WAS CONSIDERED ERRONEOUS DUE T O SPECIFIC REASONS GIVEN IN THE SHOW CAUSE NOTICE. THEREFORE, OBTAINING OR OTHERWISE OF THE CERTIFIED COPIES OF THE ASSESSMENT RECORD LIKE ORDER SHEET ETC. WAS NOT A VALID REASON FOR NOT SUBMITTING HER EXPLANATION ON SUCH SPECIFIC POINTS MADE OUT IN THE S HOW CAUSE NOTICE MORE SO WHEN THE ASSESSEE DID NOT AVAIL THE OPPORTUNITY GIVEN BY THE ASSESSING OFFICER TO INSPECT THE ASSESSMENT RECORD. THE ASSESSEE AGAIN REQUESTED FOR ADJOURNMENT OF THE HEARING FOR NUMBER OF TIMES. LATER ON THE ASSESSEE HAS FILED WRIT TEN SUBMISSIONS BUT WITHOUT MENTIONING ANY EXPLANATION REGARDING THE SHOW CAUSE NOTICE ISSUED TO HER. THE ENTIRE WRITTEN SUBMISSION IS ONLY ON THE ASPECT OF NON - FURNISHING OF COPIES OF THE ORDER SHEET AND OTHER DOCUMENTS BY THE ASSESSING OFFICER TO HER AND IN THAT VIEW OF THE MATTER, SHE WAS NOT IN A POSITION TO GIVE HER EXPLANATION. HOWEVER, THE ASSESSEE WAS GIVEN FURTHER OPPORTUNITY FOR SUBMITTING HER EXPLANATION IN PERSON OR THROUGH HER REPRESENTATIVE OR THROUGH WRITTEN SUBMISSION. THIS TIME ALSO THE ASS ESSEE REQUESTED FOR TIME AND ACCORDINGLY ALLOWED BY THE CIT. THE FINAL DATE OF HEARING WAS FIXED ON 10.3.2011, BUT THE ASSESSEE HAS NOT AVAILED THIS OPPORTUNITY. THEREFORE, THE LEARNED CIT WAS CONSTRAIN ED TO PASS THE IMPUGNED ORDER DIRECTING CANCELLATION O F THE ASSESSMENT ORDER DT.21.20.2008 AND PASS A DE NOVO ASSESSMENT ORDER BY MAKING A PROPER EXAMINATION OF THE ISSUES MENTIONED IN THE ORDER DULY CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THAT REGARD. AGGRIEVED BY THIS ORDER, THE ASSESSEE FILED THE PR ESENT APPEAL BEFORE THE TRIBUNAL. 5. DURING THE COURSE OF HEARING, THE L EARNED AR OF THE ASSESSEE HAS VEHEMENTLY ARGUED CONTENDING INTER ALIA THAT THERE IS NO PROPER SHOW CAUSE ITA NO.303/CTK/2011 4 NOTICE ISSUED BY THE CIT AS THE SAID SHOW CAUSE NOTICE WAS NOT SIGNED BY HIM A ND THE ASSESSEE IS NOT IN A POSITION TO GIVE ANY EXPLANATION TO THE ASPECTS MOOTED IN THE SHOW CAUSE NOTICE AS SHE WAS NOT GIVEN THE COPIES BY THE ASSESSING OFFICER OF THE ASSESSMENT PROCEEDINGS AS WELL AS THE DOCUMENTS FILED DURING THE ASSESSMENT PROCEEDI NGS BEFORE HIM AND FOR THE SAME REASON THE ASSESSEE WAS NOT ABLE TO APPEAR BEFORE THE LEARNED CIT AND PLEAD ITS CASE. THEREFORE, THOUGH THE CI T HAS GIVEN ADJOURNMENTS AT THE REQUEST OF THE ASSESSEE, THE ASSESSEE COULD NOT PROCEEDED WITH THE MATTER BEFORE T HE LEARNED CIT FOR WANT OF RECORDS FOR WHICH COPIES THE ASSESSEE HAD APPLIED FOR BEFORE THE ASSESSING OFFICER AND WERE NOT FURNISHED BY THE ASSESSING OFFICER TILL NOW BY THE ASSESSING OFFICER. APART FROM THAT THE ASSESSING OFFICER HAS ISSUED NOTICE U/S.143 (2) AND 142(1) FOR WHICH THE ASSESSEE HAS GIVEN PROPER REPLIES AND FURNISHED THE REQUIRED INFORMATION ALONG WITH COGENT EVIDENCES TO THE ASSESSING OFFICER AND AFTER CONSIDERING ALL THESE THINGS ONLY THE ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER. TH EREFORE, THERE IS NO LAPSE OF ANY KIND ON THE PART OF THE ASSESSING OFFICER IN COMPLETING THE ASSESSMENT PROCEEDINGS U/S.143(43) AGAINST THE ASSESSEE. THE MERE MENTION IN THE IMPUGNED ORDER THAT THE ASSESSMENT ORDER IS PREJUDICIAL TO THE INTEREST OF REVENU E IS NOT SUFFICIENT WITHOUT GIVING ANY SUPPORTIVE MATERIAL TO COME TO THE CONCLUSION AS TO HOW THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS PREJUDICIAL TO THE INTEREST OF REVENUE AND IN THAT VIEW OF THE MATTER, THE LEARNED CIT HAS NO JURISDICTIO N TO PASS THE IMPUGNED ORDER. ON THAT SCORE AGAIN THE IMPUGNED ORDER IS NOT SUSTAINABLE FOR LEGAL SCRUTINY. THUS CONTENDING, HE SOUGHT FOR SETTING ASIDE THE IMPUGNED ORDER OF THE LEARNED CIT BY ALLOWING THE APPEAL OF THE ASSESSEE. IN SUPPORT OF HIS ARGUMEN TS , HE RELIED ON VARIOUS JUDICIAL PRONOUNCEMENT AS UNDER : 1 ) CIT V. ABDUL RAHMAN SAIF (306 ITR 142) (MAD) , ITA NO.303/CTK/2011 5 2 ) LARK CHEMICALS LTD., V. CIT [139 TTJ (MUMBAI)(UO) 33], 3 ) REGENCY PARK PROPERTY MANAGEMENT SERVICES P.LTD V. CIT [130 TTJ (DEL) 669], 4 ) MALABAR INDUSTRIAL CO . LTD., V. CIT (243 ITR 83) (SC) , 5 ) CIT V. GABRIEL INDIA LTD (203 ITR 108) (BOM) , 6 ) RAMESH P. MODI V. CIT [ 122 TTJ 566] 7 ) RAJ SHYAMA CONSTRUCTIONSO (P) LTD. V. ASST.COMMISSIONER OF INCOME - TAX [135 TTJ (DEL)(UO) 33], 8 ) SRI CHANDAN MISHRA V. ASST.COMMISSIONER OF INCO ME - TAX IN ITA NO.233/CTK/2009 DT.15.2.2011 PASSED BY ITAT,CUTTACK BENCH. 6. CONTRARY TO THIS, THE LEARNED DR HAS VEHEMENTLY ARGUED CONTENDING INTER ALIA THAT SINCE THE CIT AFTER THOROUGH EXAMINATION OF THE ASSESSMENT RECORDS OF THE ASSESSEE HAS COME TO THE CONCLUSION THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS PREJUDICIAL TO THE INTEREST OF REVENUE AND HENCE, HE ISSUED THE SHOW CAUSE NOTICE AS MENTIONED IN THE IMPUGNED ORDER DETAILING THEREIN THE ASPECTS ON WHICH THE ASSESSEE HAS TO SHOW CA USE BUT THE ASSESSEE HAS NOT GIVEN REPLY TO THE SHOW CAUSE NOTICE ON THE GROUND THAT COPIES OF DOCUMENTS WERE NOT SUPPLIED BY THE ASSESSING OFFICER THOUGH PROPERLY APPLIED. THE DOCUMENTS FILED BY THE ASSESSEE ARE AVAILABLE IN THE ASSESSMENT RECORD. THEREFO RE, SHE CANNOT SAY THAT COPY OF THE SAID DOCUMENTS FILED BEFORE THE ASSESSING OFFICER ARE NOT AVAILABLE WITH HER AND SHE IS BADLY IN NEED OF THEM FOR GIVING REPLY TO THE SHOW CAUSE NOTICE ISSUED BY THE LEARNED CIT. INSPITE OF THAT THE ASSESSEE WAS GIVEN SU FFICIENT AND REASONABLE OPPORTUNITIES BY THE LEARNED CIT FOR ANSWERING THE SAID SHOW CAUSE NOTICE AS WELL AS FOR SUBSTANTIATING ITS CLAIM BEFORE HIM BUT THE ASSESSEE HAS NOT AVAILED OF THE OPPORTUNITIES GIVEN BY THE LEARNED CIT TO HER. EVEN IN THE WRITTEN SUBMISSION, THE ASSESSEE IS NOT ABLE TO GIVE EXPLANATION ITA NO.303/CTK/2011 6 TO THE SHOW CAUSE NOTICE ISSUED BY THE LEARNED CIT EXCEPT QUOTING THAT THE COPIES APPLIED FOR BY HER BEFORE THE ASSESSING OFFICER OF THE DOCUMENTS OF THE ASSESSMENT RECORDS ARE NOT GIVEN TO HER. INSP ITE OF THAT THE LEARNED CIT HAS THREAD BARE EXAMINED THE ASSESSMENT RECORD AND ISSUES INVOLVED IN THE ASSESSMENT AND CAME TO CONCLUSION THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND IS PREJUDICIAL TO THE INTEREST OF REVENUE. HE NCE, HE PASSED THE IMPUGNED ORDER ONLY DIRECTING THE CANCELLATION OF THE SAID ASSESSMENT ORDER AND FURTHER DIRECTING THE ASSESSING OFFICER TO COMPLETE DE NOVO ASSESSMENT AND PASS THE ASSESSMENT ORDER AFRESH AFTER HEARING THE ASSESSEE AND CONSIDERING ITS CL AIMS. THEREFORE UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPUGNED ORDER CAN NEVER BE SAID AS UNSUSTAINABLE UNDER LAW AND HENCE, THE LEARNED DR SOUGHT FOR UPHOLDING THE SAME BY DISMISSING THE APPEAL OF THE ASSESSEE. 7. ON CAREFUL ANALYSIS OF THE IMPUGNED ORDER PASSED BY THE LEARNED CIT IN THE LIGHT OF THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AS WELL AS THE JUDICIAL PRONOUNCEMENTS RELIED ON BY THEM AND THE MATERIAL MADE AVAILABLE TO THE TRIBUNAL, IT IS SEEN THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS NOT PASSED AFTER CAREFUL CONSIDERATION OF THE MATERIAL MADE AVAILABLE BY THE ASSESSEE TO THE ASSESSING OFFICER. THEREFORE, THE LEARNED CIT HAS RIGHTLY FOUND THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND TH EREBY PREJUDICIAL TO THE INTEREST OF REVENUE. HENCE, HE PASSED THE IMPUGNED ORDER U/S.263 ONLY CANCELLING THE ASSESSMENT AND DIRECTING THE ASSESSING OFFICER FOR DE NOVO ASSESSMENT AND PASS ASSESSMENT ORDER AFRESH AFTER HEARING THE ASSESSEE AND CONSIDERING THE MATERIAL PLACED BY THE ASSESSEE. THE JUDICIAL PRONOUNCEMENT S THAT WERE RELIED ON BY THE ASSESSEE AS STATED SUPRA ARE NOTHING BUT MISAPPLIED AS THEY ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS DETAILED HERE UNDER . ITA NO.303/CTK/2011 7 7.1. THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. ABDUL RAHMAN SAIF (306 ITR 142) (MAD) , HAS CONSIDERED THE PROVISIONS CONTAINED IN SECTION 147AND 148 OF THE I.T.ACT. 7.2. THE BOMBAY BENCH G, ITAT HAS CONSIDERED THE PROVISIONS CONTAINED IN SE CTION 40A(3) R .W.S. 263 OF THE I.T.ACT IN THE CASE OF LARK CHEMICALS LTD., V. CIT [139 TTJ (MUMBAI)(UO) 33], IN A CASE WHERE ASSESSMENT IS DONE U/S.147 AND THE CIT HAS PASSED THE ORDER U/S.263 ON THE ASPECTS NOT COVERED BY THE ASSESSMENT ORDER. 7.3. THE DELHI BENCH F , ITAT HAS CONSIDERED THE ASPECTS FOR WHICH THE ASSESSEE HAS GIVEN PROPER REPLY ALONG WITH SUPPORTIVE MATERIAL DURING THE ASSESSMENT PROCEEDINGS IN THE CASE OF REGENCY PARK PROPERTY MANAGEMENT SERVICES P.LTD V. CIT [130 TTJ (DEL) 669] . 7.4. THE HONBLE APE X COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD., V. CIT (243 ITR 83), CONSIDERED THE PROVISIONS OF SECTION 2 ( 1A) AND 56 OF THE I.T.ACT ALONG WITH SECTION 263. 7.5. THE HONBLE BOMBAY HIGH COURT HAS CONSIDERED THE PROVISIONS CONTAINED IN SECTION 263 OF T HE I.T.ACT IN ITS ORDER IN THE CASE OF CIT V. GABRIEL INDIA LTD (203 ITR 108) (BOM) ALONG WITH THE ISSUE OF EXPENDITURE ALLOWED BY INCOME - TAX OFFICER AS REVENUE IN NATURE. 7.6. THE MUMBAI BENCH D ITAT HAS CONSIDERED THE ASPECT OF APPROVAL OF 10% EOU WHILE INVOKING SECTION 263 BY THE CIT, IN THE CASE OF RAMESH P. MODI V. CIT [ 122 TTJ 566] . 7.7. THE DELHI BENCH F OF ITAT HAS CONSIDERED THE PROVISIONS OF SECTION 143(2) CONSIDERED BY THE CIT WHILE INVOKING SECTION 263 IN THE CASE OF RAJ SHYAMA CONSTRUCTION SO (P) LTD. V. ASST.COMMISSIONER OF INCOME - TAX [135 TTJ (DEL)(UO) 33] . ITA NO.303/CTK/2011 8 7.8. HENCE, ALL THE PRONOUNCEMENTS HAVE NO RELEVANCE IN THE PRESENT CASE ON HAND AS THE ISSUE BEFORE US IS THAT THE CIT HAS FOUND THAT THE ASSESSING OFFICER HAS NOT CONDUCTED REASONABLE AND A D EQUATE ENQUIRY INTO THE NATURE AND MODES OF ACCOUNTING INCOME BY THE ASSESSEE AND EXPENSES WERE NOT PROPERLY EXAMINED AND THE ASSESSING OFFICER HAS NOT RECONCILED THE TOTAL CREDITS TO THE BANK ACCOUNT OF THE ASSESSEE WITH THE AMOUNT OF COMMISSION RE CEIVED BY THE ASSESSEE DURING THE YEAR. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED ORDER PASSED BY THE LEARNED CIT IS VERY MUCH RIGHT AND THE ISSUES RAISED BY THE ASSESSEE IN THIS APPEAL ARE NOT TENABLE AND HENCE, THE SAME ARE DISMISSED BY UPHOLDING THE ORDER OF THE LEARNED CIT. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. S D/ - S D/ - (K.K.GUPTA) ACCOUNTANT MEMBER ( K.S.S.PRASAD RAO) JUDICIAL MEMBER DATE: 9 TH NOVEMBER, 2011 H.K.PADHEE, SENIOR P RIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: SMT.RUPASHREE DAS, PLOT NO.22, MADHUSUDAN NAGAR, BHUBANESWAR. 2. THE RESPONDENT: COMMISSIONER OF INCOME - TAX, BHUBANEWWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.