Nalini Kanta Muduli, Bhubaneswar V. ITO, Ward-3(4), Bhubaneswar

ITA 326/CTK/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5331 (ITAT-CUTTACK)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-04-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 22-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: G NAIKS K SARANGI
• Section: 143(3); 147; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PA V AN KUMAR GADALE, JM ./ ITA NO. 326 / CTK /20 1 7 ( / ASSESSMENT YEAR : 20 1 3 - 20 1 4 ) SRI NALINI KANTA MUDU LI, PLOT NO.67, SAHEED NAGAR, BHUBANESWAR VS. ITO, WARD - 3(4), BHUBANESWAR ./ ./ PAN/GIR NO. : A A VPM 9432 D ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI G.NAIK/S.K.SARANGI , AR /REVENUE BY : SHRI D.K.PRADHAN, DR / DATE OF HEARING : 03 / 05 /201 8 / DATE OF PRONOUNCEMENT 08 / 05 /201 8 / O R D E R PER SHRI PA V AN KUMAR GADALE, JM : TH IS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF CIT(A) - 2 , BHUBANESWAR , IN ITA NO. 0152 /201 6 - 1 7 , DATED 30.06 .2017, FOR THE ASSESSMENT YEAR 201 3 - 201 4 , PASSED U/S. 147/ 143(3)/250 OF THE I.T.ACT. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : - 1. FOR THAT THE ORDER DT.30.06.2017 FOR ASSESSMEN T YEAR 2013 - 14 AS PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX, (A) - 2 BHUBANESWAR IS FAR FROM JUST AND LEGAL ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING ACTION OF LD A.0 INITIATING) RE - ASSESSMENT PROCEEDING U/S 147/148 OF THE I T A CT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE. 3. FOR THAT LD CIT(A) ERRED IN CONFIRMING THE RE - ASSESSMENT ORDER U/S 147 OF THE IT A CT WHEN LD A.0 FAILED TO DISPOSE OF THE OBJECTIONS OF THE ASSESSEE RAISED ON RE - O PENING OF THE ASSESSMENT U/S 147 OF THE I T A CT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE. 4. FOR THAT LD CIT(A) SHOULD NOT HAVE CONFIRMED THE ADDITION OF CASH DEPOSITS IN BANK A/C AMOUNTING TO RS. 13,66,500/= U/S - 68 OF THE IT ACT ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND FILED THE RETURN OF INCOME ELECTRONICALLY FOR THE ASSESSMENT YEAR 2013 - ITA NO. 326 /CTK/2017 2 2014 ON 07.10.2014 WITH TOTAL INCOME OF RS.12,04,250/ - , WHEREAS THE AO FOUND THAT THE ASSESSEE ITR - V THE ACKNOWLEDGEMENT FORM FOR DUE VERIFICATION OF THE RETURN WAS NOT RECEIVED BY THE CPC, BENGALURU WITHIN THE DUE TIME. SINCE THE ASSESSEE HAS FAILED TO COMPLY THE PROVISIONS AND THE RETURN OF INCOME WAS TREATED AS NEVER BEEN FILED AND T HE AO APPLYING THE PROVISIONS OF SECTION 147 OF THE ACT WITH THE DUE APPROVAL HAS ISSUED NOTICE ON 17.12.2015 AND NOTICE U/S.142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WAS ISSUED . THE ASSESSEE FILED THE ITR - V ACKNOWLEDGEMENT WITH CPC AND IT WAS RECEIVED BY THE CPC ON 22.8.2016. THE ASSESSEE ON 16.12.2016 FILED LETTER MENTIONING THAT THE RETURN OF INCOME FILED ON 7.10.2014 WITH TOTAL INCOME OF RS.12,04,250/ - IS TO BE TREATED AS COMPLIANCE TO NOTICE U/S.148 OF THE ACT AND REQUESTED TO PROVIDE THE REASON S RECO RDED FOR RE - ASSESSMENT PROCEEDINGS U/S.147 OF THE ACT. THE AO ISSUED NOTICE U/S.143(2) AND CALLED FOR INFORMATION. THE AO FOUND THAT THE AMOUNT CREDITED IN THE BANK ACCOUNT IN CASH AND CHEQUE COULD NOT BE EXPLAIN ED PROPERLY AND, THEREFORE, MADE ADDITION AN D ASSESSED THE TOTAL INCOME ON 29,35,110/ - AND PASSED ORDER U/S.143(3) R.W.S.147 OF THE ACT, DATED 29.12.2016. 4. ON APPEAL, THE CIT(A) ON THE ABOVE DISPUTED ISSUE HAS CONFIRMED THE RE - ASSESSMENT PROCEEDINGS AND ADDITION AND GRANTED PARTIAL RELIEF IN RESPE CT OF OTHER CLAIMS AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. ITA NO. 326 /CTK/2017 3 6. LD. AR BEFORE US SUBMITTED THAT RE - ASSESSMENT ORDER U/S.147 OF THE ACT IS BAD IN LAW AS THE A O HAS FAILED TO DISPOSE OF THE OBJECTIONS OF THE ASSESSEE ON THE RE - OPENING OF ASSESSMENT AND ALSO THE CREDITS IN THE BANK ACCOUNT ARE SUPPORTED WITH THE SOURCE. LD. AR FURTHER EMPHASISED THAT THE ASSESSEE HAS FILED OBJECTION ON RE - ASSESSMENT AND THE AO SH OULD HAVE PASSED A SPEAKING ORDER IN RESPECT OF RE - ASSESSMENT PROCEEDINGS BEFORE DECIDING THE MATTER ON MERITS AND SUPPORTED WITH JUDICIAL DECISIONS. 7. CONTRA, LD. DR RELIED ON THE ORDER OF LOWER AUTHORITIES. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE GOING INTO MERITS OF THE CASE, FIRST WE ADJUDICATE THE LEGAL ISSUE RAISED BY THE ASSESSEE IN GROUND NO.3 WITH RESPECT TO THE AO FAILED TO DISPOSE OF THE OBJECTION RAISED BY THE ASSESSEE ON RE - OPENING OF ASSESSMENT. WE HAVE P ERUSED THE ASSESSMENT ORDER AND FOUND THAT THE ASSESSEE WAS PROVIDED REASONS FOR RE - OPENING ON 19.12.2016. LD. AR REFERRED TO THE PAPER BOOK AT PAGE 15 ADDRESSED TO THE AO TO FURNISH THE REASONS FOR RE - OPENING OF ASSESSMENT AND THE REASONS OF REOPENING WAS ISSUED TO THE ASSESSEE REFERRED AT ANNEXURE - 9 AT PAGE 19 OF THE PAPER BOOK. THE ASSESSEE SUBMITTED THAT THE OBJECTIONS WERE FILED WITH THE AO REFERRED AT PAGE 18 OF THE PAPER BOOK EXPLAINING THE SOURCE AND ALSO CHALLENGING THE REASONS RECORDED. THE CONTEN TION OF LD. AR THAT THE AO NOT DISPOS ED OF THE OBJECTION S OF THE ASSESSEE FILED IN THE RE - ASSESSMENT PROCEEDINGS WHICH IS BAD IN LAW AND SUPPORTED HIS ARGUMENTS WITH FOLLOWING JUDICIAL DECISIONS : - ITA NO. 326 /CTK/2017 4 I) JAYANTHI NATARAJAN VS. ACIT, (2018) 300 CTR (MAD) 225; II) BIR BAHADUR SINGH SIJWALI VS. ITO, [2015] 53 TAXMANN.COM 366 (DELHI - TRIB); III) GURPAL SINGH VS ITO, [2016] 71 TAXMANN.COM 108 (AMRITSAR - TRIB); IV) MEHUL V. VYAS VS. ITO, [2017] 80 TAXMANN.COM 311 (MUMBAI - TRIB); V) ITO VS. KAMAL KUMAR MISHRA, [2013] 33 TAXMANN.COM 610 (LUCKNOW - TRIB) 9. WE FOUND THAT THE AO IS SILENT ON THE DISPOSAL OF THE OBJECTION S RAISED BY THE ASSESSEE. IN THE PRESENT CASE THE AO HAVING RECEIVED THE OBJECTIONS ON THE REASONS RECORDED HAS NOT PASSED AN ORDER WHICH IS LEGALLY NOT ACCE PTABLE. WE SUPPORT OUR DECISION RELYING ON THE JUDICIAL PRECEDENCE LAID DOWN BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF JAYANTHI NATARAJAN,(2018) 300 CTR (MAD) 225, WHEREIN IT WAS DEALT THAT THE AO WAS BOUND TO DISPOSE OF THE REASONS BY PASSING A SPEA KING ORDER. THE HONBLE HIGH COURT HELD AS UNDER : - HELD : ON RECEIPT OF THE REASONS, THE NOTICEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE FOR REOPENING AND IF HE FILES SUCH OBJECTIONS, THE AO IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPE AKING. ORDER. THUS, THE PROCEDURE, WHICH WAS REQUIRED TO BE FOLLOWED BY THE RESPONDENT IS TO DISPOSE OF THE ASSESSEE'S OBJECTIONS BY PASSING A SPEAKING ORDER. ADMITTEDLY, IN THE INSTANT CASE, THIS HAS NOT BEEN DONE BY THE RESPONDENT, BUT THE RESPONDENT SEE KS TO SUSTAIN THE IMPUGNED ASSESSMENT ORDER STATING THAT IN THE FIRST FEW PARAGRAPHS OF THE ORDER, HE HAS DEALT WITH OBJECTIONS AND DISPOSED OF ACCORDINGLY. UNFORTUNATELY, THE MANNER IN WHICH THE RESPONDENT HAS DECIDED THE ISSUE IS WHOLLY UNSUSTAINABLE IN LAW. THE PURPOSE FOR PASSING A SEPARATE SPEAKING ORDER ON THE OBJECTIONS IS WITH A VIEW TO AFFORD AN OPPORTUNITY TO THE ASSESSEE TO QUESTION SUCH AN ORDER, IF HE LS AGGRIEVED. THE RESPONDENT BY PASSING THE IMPUGNED ORDER HAS TAKEN AWAY SUCH VALUABLE RIGHT FROM THE ASSESSEE INASMUCH AS THE IMPUGNED ORDER IS AN ORDER OF ASSESSMENT UNDER S. 143(3) IF AN ORDER OF ASSESSMENT HAS TO BE CHALLENGED, NECESSARILY AN APPEAL HAS TO BE PREFERRED AND ONLY IN RAREST OF RARE CASE, COURTS WOULD ENTERTAIN CHALLENGE TO ASSESS MENT ORDERS IN WRIT PROCEEDINGS. THUS, THE PROCEDURE ADOPTED BY THE RESPONDENT IS COMPLETELY FLAWED, WHICH GOES TO THE ROOT OF THE MATTER, THEREBY, VITIATING THE ENTIRE PROCEEDINGS. THE LAW DECLARED BY THE SUPREME COURT IS OF BINDING CHARACTER AND IS A SOU RCE OF LAW AND TO ITSELF, WHICH WILL BIND ALL AUTHORITIES. GKN DRIVESHAFTS (INDIA) LTD. VS. ITO & ORS. (2003) 179 ITA NO. 326 /CTK/2017 5 CTR (SC) 11 : (2003) 259 ITR 19 (SC) LAYS DOWN A LAW AND FAILURE TO COMPLY WOULD RENDER THE ASSESSMENT O RDER AS WITHOUT JURISDICTION. THUS, FO R THE ABOVE REASONS, THE IMPUGNED PROCEEDINGS ARE HELD TO BE UNSUSTAINABLE IN LAW AND ACCORDINGLY, THE IMPUGNED ORDER IS QUASHED GKN DRIVERSHAFTS (INDIA) LTD. VS. ITO & ORS. (2003) 179 CTR (SC) 11 : (2003) 259 ITR 19 (SC) FOLLOWED: KSS PETRON (P) LTD. VS . ASSTT. CIT (IT APPEAL NO.224 OF 2014 (BOM), DT. 3 RD OCT, 2016) CONCURRED WITH. WE APPLYING THE RATIO LAID DOWN IN THE ABOVE DECISION FOUND THAT THE ACTION OF AO IS NOT TENABLE AND THEREFORE, ORDER PASSED IN THE RE - ASSESSMEN T PROCEEDINGS IS QUASHED AND THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 10. SINCE WE HAVE QUASHED THE RE - ASSESSMENT ORDER , OTHER GROUND OF APPEAL ON MERIT OF THE ADDITION HAVE BECOME INFRUCTUOUS AND, HENCE, NOT ADJUDICATED BY US . 11 . IN THE RESULT, APPEAL OF THE ASSESSEE IS A LLOWED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 08 / 05 / 201 8 . SD/ - ( N.S.SAINI ) SD/ - ( PA V AN KUMAR GADALE ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER CUTTACK ; DATED 08 / 0 5 /201 8 . . / P KM , SENIOR PRIVATE SECRETARY / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - 2. / THE RESPONDENT - 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//