K.V.Peter, Adimaly V. DCIT, Ernakulam

ITA 331/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61428 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 28-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 24-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: JOSE KAPPAN
• Section: 263

Judgement Text

1 ITA 331/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N (AM) I.T.A. NO.331/COCH/2010 (ASSESSMENT YEAR 2005-06) K.V. PETER VS THE DY.CIT, CIR.1(1) KAKKANATTU JEWELLERY KOCHI ADIMALY 685 561 PAN : AFFPP6197R (APPELLANT) (RESPONDENT) DATE OF HEARING : 28-03-2012 DATE OF PRONOUNCEMENT : 19-04-2012 APPELLANT BY : SHRI JOSE KAPPAN RESPONDENT BY : SHRI S.R. SENAPATI O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF ADMINISTRATIVE COMMISSIONER U/S 263 OF THE INCOME-TAX ACT. 2. SHRI JOSE KAPPAN, THE LD.REPRESENTATIVE FOR THE A SSESSEE SUBMITTED THAT THE INTEREST BEARING FUNDS WERE USED ONLY FOR THE PURPO SE OF BUSINESS DURING THE YEAR UNDER CONSIDERATION. IT IS NOT CORRECT TO SAY THAT THE INTEREST BEARING FUNDS WERE USED FOR NON BUSINESS PURPOSE. THE LD.REPRESENTATI VE FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED ALL THE DETAILS BEFORE THE ASSES SING OFFICER. THE ASSESSING OFFICER, AFTER CONSIDERING THE ENTIRE MATERIAL, ALL OWED THE CLAIM OF THE ASSESSEE. THEREFORE, THERE IS NO ERROR MUCH LESS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 2 ITA 331/COCH/2010 3. ON THE CONTRARY, SHRI S.R. SENAPATI, THE LD.DR SUBMITTED THAT THE ASSESSING OFFICER HAS NOT PASSED ANY SPEAKING ORDER. THEREFOR E, THE ADMINISTRATIVE COMMISSIONER DIRECTED THE ASSESSING OFFICER TO REDO THE ASSESSMENT, AFTER AFFORDING OPPORTUNITY OF HEARING TO THE ASSESSEE. THE LD.DR PLACED RELIANCE ON THE IMPUGNED ORDER OF THE ADMINISTRATIVE COMMISSION ER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAR EFULLY GONE THROUGH THE ORDER OF ASSESSMENT. THE ORDER OF ASSESSMENT IS VAGUE AN D DOES NOT GIVE ANY REASON FOR ACCEPTING THE CLAIM OF THE ASSESSEE. THE ASSES SING OFFICER EVEN THOUGH NOT A JUDICIAL OFFICER IS EXPECTED TO GIVE REASON FOR COM ING TO THE CONCLUSION IN THE ASSESSMENT ORDER ITSELF. THE ASSESSMENT PROCEEDING S BEING JUDICIAL PROCEEDINGS, THE ASSESSING OFFICER IS EXPECTED TO PASS A SPEAKING ORDER. SPEAKING ORDER IS NOTHING BUT AN ORDER WHICH CONTAINS THE REASONS FOR THE CONCLUSIONS ARRIVED AT THEREIN. IN FACT, THE ASSESSMENT ORDER DOES NOT DI SCUSS ANYTHING. WE FIND THAT THE APEX COURT IN THE CASE OF TOYOTA MOTOR CORPORAT ION VS COMMISSIONER OF INCOME-TAX (2008) 306 ITR 52 FOUND THAT THE ASSESSIN G OFFICER WAS EXPECTED TO PASS A REASONED ORDER. IN FACT THE APEX COURT HAS OBSERVED AS FOLLOWS AT PAGE 53 OF THE ITR: WE ARE NOT INCLINED TO INTERFERE WITH THE IMPUGNE D ORDER OF THE HIGH COURT. THE HIGH COURT HAS HELD THAT THE A SSESSING OFFICER HAD DISPOSED OF THE PROCEEDINGS STATING THE PENALTY PROCEEDINGS INITIATED IN THIS CASE UNDER SECTION 271C READ WITH SECTION 274 OF THE INCOME-TAX ACT, 1961 ARE HEREBY DROPPED. ACCORD ING TO THE HIGH COURT, THERE WAS NO BASIS INDICATED FOR DROPPI NG THE PROCEEDINGS. THE TRIBUNAL REFERRED TO CERTAIN ASPEC TS AND HELD THAT THE INITIATION OF PROCEEDINGS UNDER SECTION 263 OF THE INCOME-TAX ACT, 1961 (IN SHORT, THE I.T. ACT) WAS IMPERMISSI BLE WHEN CONSIDERED IN THE BACKGROUND OF THE MATERIALS PURPOR TEDLY PLACED 3 ITA 331/COCH/2010 BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. WHAT THE HIGH COURT HAS DONE IS TO REQUIRE THE ASSESSING OFFICER TO PAS S A REASONED ORDER. THE HIGH COURT WAS OF THE VIEW THAT THE TRIB UNAL COULD NOT HAVE SUBSTITUTED ITS OWN REASONINGS WHICH WERE REQU IRED TO BE RECORDED BY THE ASSESSING OFFICER. ACCORDING TO TH E ASSESSEE, ALL RELEVANT ASPECTS WERE PLACED FOR CONSIDERATION AND IF THE OFFICER DID NOT RECORD REASONS, THE ASSESSEE CANNOT BE FAULTED. WE DO NOT THINK NECESSARY TO INTERFERE AT THIS STA GE. IT GOES WITHOUT SAYING THAT WHEN THE MATTER BE TAKEN UP BY THE ASSESSING OFFICER ON REMAND, IT SHALL BE HIS DUTY TO TAKE INTO ACCOUNT ALL THE RELEVANT ASPECTS INCLUDING THE MATERIALS, IF ANY, A LREADY PLACED BY THE ASSESSEE, AND PASS A REASONED ORDER. IN VIEW OF THE ABOVE JUDGMENT OF THE APEX COURT, TH E ASSESSING OFFICER IS EXPECTED TO PASS A REASONED ORDER FOR ACCEPTING OR REJECTING THE CLAIM OF THE ASSESSEE. IN THE ABSENCE OF ANY REASONS IN THE ASS ESSMENT ORDER, THIS TRIBUNAL IS OF THE OPINION THAT THE ADMINISTRATIVE COMMISSIONER HAS RIGHTLY EXERCISED HIS JURISDICTION U/S 263 OF THE INCOME-TAX ACT. WE DO N OT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY , THE APPEAL OF THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF APRIL, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 19 TH APRIL, 2012 PK/- COPY TO: 1. K.V. PETER, KAKKANATTU JEWELLERY, ADIMALY 685 561 2. THE DY.CIT, CIR.1(1), KOCHI 3. THE COMMISSIONER OF INCOME-TAX, KOCHI 4. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, KOCHI