Jhaveri Infotech Pvt.Ltd., Baroda V. The CIT-1, Baroda

ITA 3030/AHD/2008

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0315 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 30-10-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 26-08-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D P GUPTA
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD D BENCH BEFORE: SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER AND SHRI ANIL CHAT URVEDI, ACCOUNTANT MEMBER M/S JHAVERI INFOTECH PVT.LTD. C/O ASHISH TANDON 304, RADHE APARTMENT PASHBHAI PARK, BARODA (APPELLANT) PAN NO. AAACJ5887B VS. COMMISSIONER OF INCOME TAX- 1 AAYKAR BHAVAN, RACE COURSE CIRCLE, BARODA (RESPONDENT) REVENUE BY : SRI D.P GUPTA, CIT- D.R. ASSESSEE BY : SRI MILIN MEHTA, A.R. DATE OF HEARING : 30-10-2012 DATE OF PRONOUNCEMENT : 21-01-2013 / ORDER PER : MUKUL KR. SHRAWAT, JUDICIAL MEMBER:- THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FR OM THE ORDER OF CIT(A)-I, BARODA U/S 263 DATED 08 TH APRIL, 2008. THE ASSESSEE HAS CHALLENGED THE INVOCATION OF PROCEEDINGS U/S 263 AS ALSO THE VALIDITY OF THE SAID ORDER DATED 8 TH APRIL, 2008. ITA NO. 3030/AHD/2008 A.Y.:-2004-2005 ITA NO.3030/AHD/2008 A.Y. 2004-05 PAGE NO M/S JHAVERI INFOTECH PVT. LTD. VS. COMMISSIONER OF INCOME-TAX 2 1.1 THE PRESENT APPEAL NOW BEFORE US HAS A HISTORY BECAUSE IN THE PAST THE IMPUGNED ORDER U/S 263 DATED 8 TH APRIL, 2008 WAS QUASHED BY THE RESPECTED CO-ORDINATE BENCH D ITAT BEARING ITA NO. 3030/AHD /2008 A.Y. 04-05 VIDE ORDER DATED 19-02-2009 TITLED AS:- M/S. JHAVERI INFOTECH PVT LTD., VS. CIT T -I, AAYAKAR BHAVAN C/O ASHISH TONDON, RACE COURSE CIRCLE, 304, RADHE APARTMENT, BARODA PARSHABHAI PARK, BARODA, (RESPONDENT) PAN NO. AAACJ 58887 B (APPELLANT) 1.2 AGAINST THE QUASHING OF THE ORDER, REVENUE DEP ARTMENT HAD GONE IN APPEAL AND THE HONBLE GUJRAT HIGH VIDE AN ORDER DA TED 29-06-2011 IN TAX APPEAL NO. 1891 OF 2009 HAS QUASHED THE SAID ORDER OF THE TRIBUNAL (SUPRA) DATED 19-02-2009 WITH THE FOLLOWING DIRECTIONS:- 7. HAVING THUS HEARD LEARNED ADVOCATES FOR THE PAR TIES, WE ARE OF THE OPINION THAT THE TRIBUNAL SHOULD TO BE REQUESTE D TO EXAMINE THE LEGALITY OF THE REVISIONAL ORDER ON MERITS. WE FIN D THAT THE TRIBUNAL HAD INTERFERED WITH THE ORDER OF CIT SOLELY ON THE GROUND THAT THERE WAS NO FINDING IN THE REVISIONAL ORDER ABOUT THE SA TISFACTION OF THE TWIN CONDITIONS FOR EXERCISING THE POWER UNDER SECT ION 263 OF THE ACT. CONCEDEDLY POWERS UNDER SECTION 263 OF THE ACT CAN BE EXERCISED ONLY WHEN THE ORDER OF THE ASSESSING OFFICER IS ERR ONEOUS AND IS ALSO PREJUDICIAL TO BE INTEREST OF THE REVENUE. HOWEVER, WE DO NOT FIND ANY REQUIREMENT OF LAW THAT SUCH CONCLUSIONS MUST B E RECORDED ONLY IN SUCH TERMS AND WORDINGS. AS LONG AS THE ORDER O F THE COMMISSIONER GIVES SUFFICIENT REASONS TO COME TO TH E CONCLUSION THAT THE ASSESSMENT ORDER IS ERRONEOUS AND THAT IT IS ALSO PREJUDICIAL TO THE INTEREST OF OTHER REVENUE, IN WHAT LANGUAGE SUCH CONCLUSIONS ARE EXPRESSED, WOULD NOT BE CRUCIAL. TO PUT IS DIF FERENTLY, IF THE CONCLUSIONS OF THE COMMISSIONER REGARDING SATISFACT ION OF THE TWIN CONDITIONS IS MANIFEST IN HIS ORDER, MERELY BECAUSE HE HAS NOT SO STATED IN SUCH PRECISE WORDS, IN OUR OPINION, WOULD NOT BE FATAL TO THE INTEREST OF THE REVENUE. WHAT IS IMPORTANT IS THE SUBSTANCE AND NOT FORM. SINCE WE FIND THAT THE TRIBUNAL STRUCK D OWN THE ORDER OF THE ITA NO.3030/AHD/2008 A.Y. 2004-05 PAGE NO M/S JHAVERI INFOTECH PVT. LTD. VS. COMMISSIONER OF INCOME-TAX 3 CIT ONLY ON THIS COUNT WITHOUT EXAMINING THE RIVAL CONTENTIONS ON MERITS OF THE ORDER OF THE COMMISSIONER, IT WOULD N OT BE APPROPRIATE ON OUR PART TO TRAVEL BEYOND STRIKING DOWN THE ORDE R AND REQUESTING FRESH CONSIDERATION AND DISPOSAL OF THE SAME IN ACCORDANCE WITH LAW. UNDER THE CIRCUMSTANCES, IMPUGNED ORDER DATED 19-02-2009 OF THE TRIBUNAL IS SET ASIDE. PROCEEDINGS ARE REMANDED TO THE TRIBUNAL FOR FRESH CONSIDERATION AND DISPOSAL OF THE SAME IN ACC ORDANCE WITH LAW. ( HIGHLIGHTED BY US WITH DUE RESPECT) 2. CONSEQUENT THEREUPON, THIS APPEAL IS AGAIN PUT U P FOR HEARING AND THE PARTIES WERE HEARD. LD. A.R., SRI MILIN MEHTA HAS PLEADED THAT THE ASSESSMENT WAS MADE U/S 143 DATED 18-12-2006, MEANI NG THEREBY THE AO HAD APPLIED HIS MIND. THAT ORDER OF THE AO WAS NEI THER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. LD. A. R. HAS EXPRESSED THAT INQUIRES WERE MADE IN RESPECT OF THE IMPUGNED AMOUN T AND AFTER PROPER APPLICATION OF MIND THE ASSESSMENT ORDER WAS PASSED . HENCE, LD. COMMISSIONER WENT WRONG IN HOLDING SUCH AN ORDER AS AN ERRONEOUS ORDER, SO UNJUSTIFIED IN INVOKING THE PROVISIONS OF SECTIO N 263 OF I.T. ACT AS ALSO DIRECTING THE AO TO INCLUDE AN AMOUNT OF RS. 15,32, 019/- IN THE HANDS OF THE ASSESSEE. SUCH DIRECTIONS OF THE LD. COMMISSIONER SHOULD BE QUASHED, LD A.R. HAS PLEADED. 3. FROM THE SIDE OF THE REVENUE LD. D.R. HAS NOT ON LY SUPPORTED THE ACTION TAKEN BY LD. COMMISSIONER U/S 263 BUT ALSO V EHEMENTLY ARGUED THAT THE SUM AND SUBSTANCE OF THE ORDER OF HONBLE HIGH COURT IS THAT QUASHING OF CIT{ U/S 263} ORDER BY THE TRIBUNAL WAS INCORREC T. THEREFORE, THE LAW AS ALSO THE PRINCIPLE OF JUDICIAL HIERARCHY REQUIRE S TO FOLLOW THE OBSERVATIONS OF THE HONBLE HIGH COURT. ITA NO.3030/AHD/2008 A.Y. 2004-05 PAGE NO M/S JHAVERI INFOTECH PVT. LTD. VS. COMMISSIONER OF INCOME-TAX 4 4. WE HAVE HEARD THE SUBMISSIONS OF BOTH THE SIDES. WE HAVE ALSO CAREFULLY PERUSED THE IMPUGNED ORDERS. THE LD. COM MISSIONER HAD MADE AN OBSERVATION THAT THE ASSESSEE HAD FOLLOWED MERCANTI LE SYSTEM OF ACCOUNTING. STILL, THE ASSESSEE HAD FAILED TO SHOW SURPLUS SERV ICES RECEIPTS ON ACCRUAL BASIS. LD. COMMISSIONER HAS DULY NOTED THAT THE AS SESSEE HAD SHOWN NET INCREASES IN THE DEBTORS I.E. RS. 15,32,019/- (22,5 2,588-7,20,659). AS PER AN ANOTHER OBSERVATION, LD. COMMISSIONER HAS NOTICED T HAT THE AMOUNT OF SUNDRY DEBTORS INCLUDED RECEIVABLE FROM ASSOCIATED CONCERNS M/S INTERNET SERVICES OF RS. 16,08,210/- AS ON 31-03-2004. THER EFORE, IN THE OPINION OF THE LD. COMMISSIONER SINCE THE ASSESSEE HAD MAINTAI NED MERCANTILE SYSTEM OF ACCOUNTING, THEREFORE, THE SAID AMOUNT OF 15,32, 019/- WAS REQUIRED TO BE OFFERED FOR TAX IN THE YEAR UNDER CONSIDERATION. A S FAR AS THE ASSESSMENT ORDER IN QUESTION IS CONCERNED, THERE WAS NO SUCH F INDING ABOUT THE INQUIRY MADE IN RESPECT OF THE SAID AMOUNT, AS NOTICED BY L D. COMMISSIONER WHILE EXERCISING REVISIONARY POWERS . THERE WAS NO WHISP ER IN THE ASSESSMENT ORDER ABOUT ANY ADJUDICATION ON THIS ISSUE AS NOTIC ED BY THE LD. COMMISSIONER WHILE EXERCISING ADMINISTRATIVE POWERS TO REVIEW AN ORDER OF THE AO. AN ATTEMPT HAS BEEN MADE BY LD. A.R BEFORE US THAT THE ASSESSEE HAS FURNISHED THE AUDITED ACCOUNTS ALONG WITH RELEV ANT INFORMATION THEREFORE, THE ASSESSMENT WAS MADE AFTER DUE VERIFICATION OF T HE COMPLETE RECORD AVAILABLE TO THE AO. ACCORDING TO LD. AR IT WAS WR ONG TO PRESUME THAT ALL THOSE FACTS AND FIGURES HAVE NOT BEEN CONSIDERED BY THE AO AND THEREFORE, HE HAD FORMED AN OPINION NOT TO ASSESS INCOME IN QUEST ION. WE HAVE CONSIDERED THIS ASPECT AS WELL AND IN OUR HUMBLE OP INION IT IS WRONG TO PRESUME THAT ALL THE VOLUMINOUS RECORD, AUDITED REP ORT, ANNEXURES ETC HAVE BEEN THOROUGHLY EXAMINED BY THE AO. IN FACT, THE POSSIBILITY IS THAT THE ASSESSMENT WOULD HAVE BEEN MADE WITHOUT APPRECIATIN G EACH AND EVERY PAGE ITA NO.3030/AHD/2008 A.Y. 2004-05 PAGE NO M/S JHAVERI INFOTECH PVT. LTD. VS. COMMISSIONER OF INCOME-TAX 5 OF THE VOLUMINOUS COMPILATION FILED DURING THE COUR SE OF ASSESSMENT PROCEEDINGS. THEREFORE, THE COMMISSIONER HAS BEEN GIVEN POWER UNDER THE ACT TO RE-ADJUDICATE THE ASSESSMENT AND IF SOME MI STAKE IS FOUND, THEN THE SAME CAN BE REVIEWED AND DIRECTED TO BE RECTIFIED. THIS REVISIONAL POWER IS WIDE ENOUGH TO TACKLE A SITUATION WHERE THE AO HAD FAILED TO APPLY HIS MIND IN RESPECT OF THE ASSESSMENT OF AN INCOME. IN THE RESULT, WE HEREBY HOLD THAT THE ORDER PASSED U/S 263 WAS CORRECT, HENCE UP HOLD THE SAME. ASSESSEES GROUNDS DISMISSED. 5. APPEAL DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) (M UKUL KR. SHRAWAT) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 21/01/2013 A.K. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '#