The Income-tax Officer, Bathinda V. Sh. Gurnam Singh, Bathinda

ITA 311/ASR/2013

• Counselvise Citation: 31120914 RSA 2013
• Duration Of Justice: 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-04-2014
• Assessment Year: 1994-1995
• Appeal Filed On: 10-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 54; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.311(ASR)/2013 ASSESSMENT YEAR:1994-95 PAN :AEJPK8514L INCOME TAX OFFICER, VS. SH.GURNAM SINGH WARD 1(1), BATHINDA. L/H OF LATE SMT. GURCHARAN K AUR, C/O M/S. GURNAM COLD STORAGE & ICE FACTORY, BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. TARSEM LAL, DR RESPONDENT BY: NONE DATE OF HEARING: 09/04/2014 DATE OF PRONOUNCEMENT:15/04/2014 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER OF THE CIT(A), BATHINDA, DATED 05.02.2013 FOR THE ASSESSMENT YEA R 1994-95.THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE FOLLOWING: (I) ALLOWING APPLICATION U/S 154 OF THE ACT WHICH IS IN FRUCTUOUS AND BAD IN THE EYE OF LAW. ITA NO.311(ASR)/2013 2 (II) RS.6,16,842/- ADJUSTED FROM REFUND DUE AGAINST OUTS TANDING DEMAND IN THE CASE OF LEGAL HEIR HAS BEEN DIRECTED TO ISSUE REFUND WHICH IS AGAINST THE REVENUE. 2. THAT IT IS PRAYED THAT THE ORDER OF THE LD. CIT( A) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OFF OR DISPOSED O F. 2. THE BRIEF FACTS IN THE GROUNDS OF APPEAL OF THE REVENUE ARE THAT THE ORDER UNDER SECTION 154 OF THE ACT WAS PASSED BY TH E A.O. DATED 18.08.2010, WHICH FOR THE SAKE OF CONVENIENCE IS PRODUCED AS UN DER: ORDER U/S 154 OF THE INCOME TAX ACT, 1961 THE COUNSEL SH. S.K.BANSAL, ADVOCATE FILED AN APPLI CATION U/S 154 OF THE ACT IN THE CASE OF THE ABOVE STATED ASSESSEE. 2. THE INCOME TAX DEMAND OF RS.9,96,994/- BESIDE IN TEREST CHARGEABLE U/S 220(2) ARISING OUT OF ORDER U/S 143( 3)/147 DATED 15.02.2002 WAS OUTSTANDING SINCE LONG. THE AMOUNT O UTSTANDING WAS RECOVERED/DEPOSITED AS PER INFORMATION ALREADY PROV IDED VIDE THIS OFFICE LETTER DATED 27.01.2010. IT WAS HELD BY THE HONBLE ITAT THAT THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE THAT T HE SUBSTANTIVE ASSESSMENT HAS BEEN MADE. IN THE ABSENCE OF SUBSTAN TIVE ASSESSMENT, THE PROTECTIVE ASSESSMENT TAKES CHARACTER OF SUBSTA NTIVE ASSESSMENT. THE DEMAND OUTSTANDING WAS RECOVERED/DEPOSITED AS P ER LAW AND THERE IS NO MISTAKE APPARENT FROM RECORD. HENCE, TH E APPLICATION U/S 154 OF THE ACT IS TREATED AS INFRUCTUOUS AND ACCORD INGLY REJECTED. 3. THE LD. CIT(A) VIDE PAGE 3 OF HIS ORDER, DIRECT ED THE A.O. TO RECTIFY THE ORDER OF ADJUSTMENT OF REFUND U/S 154 OF THE AC T AND ISSUE THE REFUND DUE ACCORDINGLY AND THE APPEAL OF THE ASSESSEE WAS ALL OWED IN VIEW OF THE DECISIONS OF VARIOUS COURTS OF LAW, RELIED UPON. ITA NO.311(ASR)/2013 3 4. THE LD. DR, MR. TARSEM LAL, RELIED UPON THE ORDE R OF THE A.O. AND PRAYED TO REVERSE THE ORDER OF THE LD. CIT(A). 5. NONE APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF VALID SERVICE OF NOTICE. ACCORDINGLY, WE ARE PROCEEDING TO DECIDE TH IS APPEAL ON THE BASIS OF MATERIAL ON RECORD AND AFTER HEARING THE LD. DR. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS AVAILABLE ON RECORD. FIRST OF ALL, WE REPRODUCE THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE, WHICH ARE REPRODUCED AT PAGE 2 OF CIT(A) S ORDER FOR THE SAKE OF CONVENIENCE AS UNDER: THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE ASSESSMENT U/S 143(3) HAS BEEN COMPLETED ON PROTECTIVE BASIS IN THE HANDS OF SMT. GURSHARAN KAUR. SMT. GURSHARAN KAUR DIED AND AFTER HER DEATH PENALTY IN THIS CASE HAS BEEN LEVIED IN THE NAME OF GURNAM SINGH AS LEGAL HEIR. AGAINST THIS PENALTY ORDER APPEAL HAS B EEN FILED BEFORE THE LD. CIT(A). DURING THE APPEAL SH. GURNAM SINGH HAS PAID A SUM OF RS.616842/- AGAINST THIS PENALTY ORDER DATED 20.11. 2008 ON 09.03.2009. THE PAYMENT HAS BEEN MADE BY SHRI GURNA M SINGH PERSONALLY NOT IN HIS CAPACITY AS LEGAL REPRESENTAT IVE AS DEFINED IN SECTION 159 OF THE ACT. THE APPEAL OF SH. GURNAM SI NGH WAS ALLOWED AND AFTER APPEAL EFFECT SH. GURNAM SINGH WAS ENTITL ED FOR REFUND BUT INSTEAD OF ISSUING REFUND TO SH.GURNAM SINGH THE AM OUNT HAS BEEN ADJUSTED AGAINST OUTSTANDING DEMAND IN THE CASE OF LATE SMT. GURSHARAN KAUR ON 24.12.2009. AFTER THIS ADJUSTMENT SH.GURNAM SINGH WAS INFORMED ON 27.01.2010. SH. GURNAM SINGH OBJECTED THIS ADJUSTMENT ON VARIOUS ISSUES VIDE APPLICATION U/S 1 54 OF THE ACT, THE SAME WAS REJECTED WHEREAS IT IS WELL SETTLED LAW T HAT BEFORE MAKING ANY ADJUSTMENT OF REFUND DUE THE ASSESSEE HAS TO BE INFORMED U/S 245 OF THE ACT AS HELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF SH.VIJAY KUMAR BHATI V. CIT (1994) 205 ITR 110, 120 (DEL), SPECIAL LEAVE PETITION DISMISSED BY THE SUPREME COURT (1993 ) 203 ITR (ST.) 1 (SC). FURTHER, THE JURISDICTIONAL HONBLE PUNJAB & HARYANA HIGH ITA NO.311(ASR)/2013 4 COURT HAS ALSO TAKEN THE SIMILAR VIEW IN THE CASE O F STATE BANK OF PATIALA VS. CIT (1999) 239 ITR 421. IN VIEW OF THE ABOVE JUDGMENTS THE STATUTORY PROVISIONS OF THE ACT ARE VERY CLEAR THAT BEFORE MAKING ADJUSTMENT, NOTICE U/S 245 HAS TO BE GIVEN AND IF T HE STATUTORY PROVISIONS ARE OVER LOOKED THEN IT IS A MISTAKE APP ARENT ON THE RECORD AND ON THAT BASIS RECTIFICATION U/S 154 CLEARLY ADM ISSIBLE. CIT VS. STEEL STRIPS LTD. (2011) 200 TAXMAN 368/11. 6.1. AFTER PERUSING THE RECORD AND THE WRITTEN SUBM ISSIONS OF THE ASSESSEE BEFORE THE LD. CIT(A), WE ARE OF THE VIEW THAT UNDE R SECTION 245 OF THE ACT, THERE IS NO BAR TO SET OFF THE AMOUNT TO BE REFUND OR ANY PART OF THAT AMOUNT, AGAINST THE SUM IF ANY, PAYABLE UNDER THE I.T.ACT B Y THE PERSON TO WHOM THE REFUND IS DUE BUT THE SAME CAN BE DONE BY THE AO ON LY AFTER GIVING INTIMATION IN WRITING TO SUCH PERSON OF THE ACTION PROPOSED TO BE TAKEN UNDER THIS SECTION I.E. SEC. 245 OF THE ACT. FOR THE SAKE OF CONVENIENCE, WE REPRODUCE SECTION 245 OF THE ACT AS UNDER: SET OFF OF REFUNDS AGAINST TAX REMAINING PAYABLE. 245 . WHERE UNDER ANY OF THE PROVISIONS OF THIS ACT, A R EFUND IS FOUND TO BE DUE TO ANY PERSON, THE [ASSESSING] OFFICER, [ DEPUTY COMMISSIONER (APPEALS)] [, COMMISSIONER (APPEALS)] OR [CHIEF COMMISSIONER OR COMMISSIONER], AS THE CASE MAY BE, MAY, IN LIEU OF PAYMENT OF THE REFUND, SET OFF THE AMOUNT TO BE REFUNDED OR ANY PART OF THAT AMOUNT, AGAINST THE SUM, IF ANY, REMAINING PAY ABLE UNDER THIS ACT BY THE PERSON TO WHOM THE REFUND IS DUE, AFTER GIVI NG AN INTIMATION IN WRITING TO SUCH PERSON OF THE ACTION PROPOSED TO BE TAKEN UNDER THIS SECTION. 6. 2. IN THE PRESENT CASE, THE AO HAS NOT GIVEN ANY I NTIMATION AND OPPORTUNITY IN WRITING TO THE ASSESSEE AND THEREFOR E, THE AO HAS VIOLATED THE ITA NO.311(ASR)/2013 5 PROVISIONS OF SECTION 245 OF THE ACT. WE FIND SUPP ORT FROM THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF HONBLE DELHI HIGH COURT IN THE CASE OF SH.VIJAY KUMAR BHATI V. CIT (1994) 205 ITR 110, 120 (DEL), WHERE SPECIAL LEAVE PETITION HAS BEEN DISMISSED BY THE H ONBLE SUPREME COURT, AS REFERRED TO HEREINABOVE. IN THE FACTS AND CIRCUMSTA NCES OF THE CASE, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO H AS RIGHTLY DIRECTED THE AO TO RECTIFY THE ORDER OF ADJUSTMENT OF REFUND U/S 15 4 OF THE ACT AND ISSUE THE REFUND DUE ACCORDINGLY TO THE ASSESSEE AS PER LAW. THUS, ALL THE GROUNDS OF THE REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IN IT A NO.311(ASR)/2013 IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 15TH APRIL, 2014. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15TH APRIL, 2014 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH.GURNAM SINGH, BATHINDA. 2. THE ITO WARD 1(1), BATHINDA. 3. THE CIT(A), BATHINDA. 4. THE CIT, BATHINDA. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER