Mrs. Nahid Begum, Cuttack V. Principal CIT, Cuttack

ITA 321/CTK/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5308 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-12-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 26-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PIYUSH KOLHE
• Assessee Lawyers: C R DASH
• Keywords: Difference of opinion; Change of opinion
• Section: 143(3); 145; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAV AN KUMAR GADALE, JM ./ ITA NO. 32 1 / CTK /20 1 6 ( / ASSESSMENT YEAR : 20 1 1 - 20 1 2 ) MRS. NAHID BEGUM, AT - MANI SAHOO CHOWK, BUXI BAZAR, CUTTACK - 753001 VS. PR.CIT, CUTTACK CHARGE, CUTTACK ./ ./ PAN/GIR NO. : A CLPB 1495 M ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI C.R. DASH, AR /REVENUE BY : SHRI PIYUSH KOLHE , CIT DR / DATE OF HEARING : 2 7 / 1 2 /201 7 / DATE OF PRONOUNCEMENT 28 / 1 2 /201 7 / O R D E R PER SHRI PAV AN KUMAR GADALE, JM : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF CIT, CUTTACK, DATED 10.3.2016, PASSED U/S.263 OF THE ACT FOR THE ASSESSMENT YEAR 201 0 - 201 1 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - 1. FOR THAT, THE LD. AO HAS REJECTED THE BOOK RESULT BY INVOKING SECTION 145 OF THE ACT IN THE ABSENCE OF PRO PER BOOKS OF ACCOUNTS OF THE APPELLANT WHILE FRAMING THE ASSESSMENT. THEREAFTER ESTIMATED THE NET PROFIT AFTER TAKING PAST RECORDS AND COMPARABLE CASE OF THE APPELLANT BY TAKING THE N P & GP RATIO INTO CONSIDERATION AND PASSED THE ASSESSMENT ORDER U/S.143 (3) OF THE ACT. THEREAFTER THE SUBSEQUENT IMPUGNED ORDER U/S. 263 OF THE ACT HAS BEEN PASSED BY THE LD. PR. CIT, CUTTACK CHARGE, TO REVISE THE SAID ASSESSMENT ORDER WITH THE THOUGHT OF PROPER EXAMINATION OF THE TRADE CREDITORS IN ORDER TO MAKE FURTHER ADDI TION, IS MERE CHANGE OF OPINION, NON EXERCISE OF JUDICIAL MIND BY THE LD. PR. CIT, CUTTACK CHARGE. THE STATUTORY REVISION POWER VESTED U/S. 263(1) OF THE ACT HAS BEEN INCORRECTLY EXERCISED BY THE LD. PR. CIT; THEREFORE THE ORDER U/S.263 IS IMPERMISSIBLE UN DER LAW. 2. FOR THE LD. PR. CIT HAS WRONGLY ACKNOWLEDGED THE ASSESSMENT ORDER PASSED U/S.143(3), AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, THEREAFTER SET ASIDE THE SAME FOR RE - ADJUDICATION WITH CERTAIN DIRECTIONS TO THE LD. AO TO MAKE FURT HER EXAMINATION AFRESH ITA NO. 321 /CTK/201 6 2 AND REFRAME THE ASSESSMENT ORDER IN ORDER TO MAKE FURTHER ADDITION IS IMPERMISSIBLE UNDER LAW AS SETTLED. THUS THE REVISION ORDER U/S. 263 IS LIABLE TO BE QUASHED. 3. FOR THAT THE INVOCATION OF STATUTORY REVISION POWER VESTED U/S. 263(1) OF THE ACT BY THE LD. PR. CIT IS NOT PROPER FOR THE REASONS THAT THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT AFTER REJECTION OF BOOK RESULT BY THE LD. AO, IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE, THEREFORE THE ORDER U/ S.263 IS LACK OF JURISDICTION HENCE IMPERMISSIBLE UNDER LAW AS SETTLED. 4. FOR TH6T THE APPELLANT CRAVES LEAVE TO URGE ANY OTHER GROUNDS OF APPEAL AND TO FILE WRITTEN SUBMISSION ALONG WITH THE RELEVANT DOCUMENTS IN THE SHAPE OF PAPER BOOK, IF SO ARISES A T THE TIME OF HEARING OF THIS APPEAL. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DERIVES INCOME FROM WHOLESALE OF MEDICINE DRUGS AND MEDICAL EQUIPMENTS ETC. IN THE NAME AND STYLE OF M/S A.N.ENTERPRISES. THE RETURN OF INCOME FOR THE A.Y.2011 - 2012 WAS FILED ON 31.3.2011 DECLARING TOTAL INCOME OF RS.11,43,391/ - AND THE AO COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT DETERMINING TOTAL INCOME OF RS.12,81,110/ - . 4. THE PR.CIT ON EXAMINATION OF RECORDS, FOUND THAT THE ASSESSMENT ORDER PASSED U/S.143(3) O F THE ACT IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AS TOTAL LACK OF ENQUIRY BY THE AO WITH RESPECT TO SUBSTANTIA TE TRADE CREDITORS IN THE ASSESSMENT PROCEEDINGS . THEREFORE, THE PR. CIT SET ASIDE THE ASSESSMENT ORDER AND RESTORED BACK TO THE F ILE OF AO FOR ADJUDICATION O N THE ISSUE OF SUNDRY CREDITORS AFRESH AND REFRAME THE ASSESSMENT AFTER PROPER ENQUIRY AND INVESTIGATION OF THE SUNDRY CREDITORS. 5 . LD. AR SUBMITTED THAT THE ORDER PASSED BY THE PR.CIT U/S.263 OF THE I.T.ACT. IS MERE CHANGE OF OPINION AND NON EXERCISE OF JUDICIAL MIND . LD. AR ALSO SUBMITTED THAT INVOCATION OF STATUTORY REVISION POWER VESTED U/S. ITA NO. 321 /CTK/201 6 3 263(1) OF THE ACT BY THE LD. PR. CIT IS NOT PROPER FOR THE REASONS THAT THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT IS AFTER REJ ECTION OF BOOK S OF ACCOUNTS BY THE LD. AO, WHICH IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE, THEREFORE THE ORDER U/S.263 IS LACK OF JURISDICTION HENCE IMPERMISSIBLE UNDER LAW AND THE SAME SHOULD BE QUASHED AND FILED WRITTEN SUBMISSIONS . 5. CONTRA, L D. DR RELIED ON THE ORDERS OF PR.CIT AND SUBMITTED THAT THE ASSESSEE HAS FAILED TO FURNISH ANY DETAILS/DOCUMENTS IN SUPPORT OF THE SUNDRY TRADE CREDITORS TO SUBSTANTIATE THE GENUINENESS, IDENTITY AND CREDITWORTHINESS AND THE PR. CIT HAS PASS ED THE REVISION ORDER U/S.263 OF THE ACT HENCE , THE APPEAL OF THE ASSESSEE BE DISMISSED AND PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RAJMANDIR ESTATES (P) LTD. (2017) 77 TAXMANN.COM 285 (SC). 7 . WE HAVE HEARD RIVAL SUBMISSION S AND PERUSED THE MATERIAL ON RECORD. PRIMA FACIE, WE FIND THAT THE PR. CIT RESTORED BACK THE ASSESSMENT ORDER U/S.143(3) OF THE ACT TO THE FILE OF AO WITH A DIRECTION TO ADJUDICATE O N THE ISSUE OF SUNDRY CREDITORS AFRESH AND REFRAME THE ASSESSMENT AFTER PROPER ENQUIRY AND INVESTIGATION OF THE SUNDRY CREDITORS. THE AO IN THE ASSESSMENT ORDER OBSERVED THAT THE ASSESSEE HAS FAILED TO PRODUCE THE BILLS AND VOUCHERS, CASH BOOK AND STOCK REGISTER FOR VERIFICATION AND IN ABSENCE OF THESE DOCUMENTS THE AO REJECTE D THE BOOKS OF ACCOUNTS U/S.145 OF THE ACT AND OVERLOOKED ENQUIRY OF SUNDRY CREDITORS , IN OUR OPINION, THE LD. PR. CIT WAS JUSTIFIED IN TREATING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND WE ITA NO. 321 /CTK/201 6 4 SUPPORT OUR VIEW WITH THE R ECENT DECISION OF HONBLE SUPREME COURT IN THE CASE OF DENIEL MERCHANTS P. LTD. & ANR VS. INCOME TAX OFFICER & ANR. SPECIAL LEAVE TO APPEAL (C) NO.(S).23976/2017 ALONG WITH OTHER CONNECTED APPEALS, DATED 29.11.2017 WHEREIN THE HONBLE SUPREME COURT HAS HEL D AS UNDER : - IN ALL THESE CASES, WE FIND THAT THE COMMISSIONER OF INCOME TAX HAD PASSED AN ORDER UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 WITH THE OBSERVATIONS THAT THE ASSESSING OFFICER DID NOT MAKE ANY PROPER INQUIRY WHILE MAKING THE ASSESSMENT AN D ACCEPTING THE EXPLANATION OF THE ASSESSEE(S) INSOFAR AS RECEIPT OF SHARE APPLICATION MONEY IS CONCERNED. ON THAT BASIS THE COMMISSIONER OF INCOME TAX HAD, AFTER SETTING ASIDE THE ORDER OF THE ASSESSING OFFICER, SIMPLY DIRECTED THE ASSESSING OFFICER TO CA RRY THOROUGH AND DETAILED INQUIRY. IT IS THIS ORDER WHICH IS UPHELD BY THE HIGH COURT. WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE HIGH COURT. CONSIDERING THE OBSERVATIONS OF THE HONBLE SUPREME COURT AND APPLYING THE RATIO OF DECISION TO THE FAC TS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF THE SUBSTANTIVE OPINION THAT THE PR.CIT IS JUSTIFIED IN INVOKING HIS POWER S CONFERRED U/S.263 OF THE ACT . A CCORDINGLY, WE ARE NOT INCLINED TO INTERFERE WITH THE REVISION ORDER OF THE PR. CIT AND THE SAME IS UPHELD AND THE APPEAL OF THE ASSESSEE IS DISMISSED. 8 . IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 28 /12/2017. SD/ - ( N. S. SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUN TANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 28 / 1 2 /201 7 . . / PKM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT - 2. / THE RESPONDE NT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK ITA NO. 321 /CTK/201 6 5 / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//