M/s M.P Biscuits Pvt. Ltd., Kanpur V. Astt. Commissioner of Income Tax, Kanpur

ITA 335/LKW/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0559 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 06-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S MINHAS
• Keywords: Principle of natural justice; Reasonable cause
• Section: 153A; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 334 & 335/LKW/2016 ASSESSMENT YEAR: 2008 - 09 & 2009 - 10 M/S M.P. BISCUITS PVT. LTD. 8 3/141, JUHI PARAMPURWA KANPUR V. ACIT VARANASI T AN /PAN : AADCM8831D (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI J.S. MINHAS, D.R. DATE OF HEARING: 12 12 201 7 DATE OF PRONOUNCEMENT: 13 12 201 7 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THESE APPEALS PREFERRED BY THE ASSESSEE EMANATE FROM SEPARATE ORDERS OF THE LD. CIT(A) - 1, LUCKNOW DATED 24/3/2016. 2 . THOUGH THE ASSESSEE HAS PREFERRED MULTIPLE GROUNDS OF APPEAL CHALLENGING THE ADDITIONS CONFIRMED BY THE L D. CIT(A), WHICH ARE COMMON IN BOTH THE APPEALS EXCEPT THE DIFFERENCE IN AMOUNT, BUT AT THE TIME OF HEARING, THE ASSESSEE HAS FILED A COPY OF THE ORDER OF THE TRIBUNAL DATED 26/7/2017 IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2006 - 07 TO 2009 - 10 WHERE IN THE ASSESSMENTS WERE QUASHED BY THE LD. CIT(A) AND IT WAS UPHELD BY THE CO - ORDINATE ITAT BENCH. THE LD. A.R. OF THE ASSESSEE PUT FORTH ARGUMENT THAT FOR THIS ASSESSMENT YEAR ALSO , THE LD. CIT(A) HAS QUASHED THE ASSESSMENT AND AT THE SAME TIME PROCEEDED TO DECIDE THE CASE ON MERIT. WHEN THE ASSESSMENT ORDER IS [ ITA NO.334 & 335/LKW/2016 ] 2 ALREADY QUASHED, THEN WHETHER DECIDING THE ISSUES ON MERIT HAS ANY RELEVANCE IN VIEW OF THE ITAT ORDER DATED 26/7/2017 PLACED BEFORE US. 3 . SINCE BOTH THE CASES RELATE TO SAME ASSESSEE AND THE FACT S & THE ISSUES INVOLVED THEREIN ARE COMMON, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. 4 . FIRST WE WILL TAKE UP THE APPEAL IN ITA NO.334/LKW/2016. THE FACTS IN BRIEF ARE THAT THE ASSESSEE - COMPANY WAS INCORPORATED ON 22/8/2003 AND A SEARCH HAD TAKEN PLACE IN THE ASSESSEE - COMPANY ON 19/11/2009 AND 20/11/2009. THIS SEARCH CONDUCTED IN CONNECTION WITH THE SEARCH TAKEN PLACE AT THE BUSINESS PREMISES OF M/S RANI SUNDARI ESTATE PVT. LTD., VARANASI. THE ASSESSEE - COMPANY IS BEING ASSESSED TO TAX AT KANPUR. IN T HE ASSESSMENT ORDER VARIOUS ADDITIONS/DISALLOWANCES WERE MADE AND THEREAFTER APPEAL S WERE PREFERRED BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAS QUASHED THE ASSESSMENT ORDER S AND THEREAFTER HAS PROCEEDED TO DECIDE T HE ISSUES ON MERIT. 5 . WE HAVE PERUSED THE CASE RECOR D AND WE FIND THAT IN THE ORDER DATED 26/7/2017 OF THE CO - ORDINATE ITAT BENCH PLACED BEFORE US BY THE ASSESSEE, THE ASSESSEE HAS RAISED A GROUND THAT THE ORDER PASSED UNDER SECTION 153A OF THE ACT READ WITH SECTION 144 OF THE ACT WAS CONTRARY TO THE FACTS, BAD IN LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND LIABLE TO BE QUASHED. THE LD. CIT(A) ON THE SAID ISSUE HAS GIVEN THE FOLLOWING FINDING: - 'GROUND NO. 1 & 2 RELATE TO THE ASSESSMENT ORDER HAVI NG BEEN FRAMED UNDER SECT 144 OF THE ACT, 1961. AS NARRATED ABOVE, THE ASSESSMENT HAS BEEN FRAMED WITH GIVING ADEQUATE OPPORTUNITY TO THE ASSESSEE. THE FIRST NOTICE DATED 23.01.2013 Y ISSUED FOR COMPLIANCE BY 28.01.2014. THE SECOND NOTICE WAS ISSUED ON 28 . [ ITA NO.334 & 335/LKW/2016 ] 3 01 . 2014 COMPLIANCE ON 30.01.2014. BOTH THESE NOTICES HAVE BEEN ISSUED GIVING LESS THAN FIFTEEN DAYS' TIME TO MAKE COMPLIANCE. THE AO SHOULD HAVE GIVEN AT LEAST FIFTEEN DAYS TIME TO MAKE COMPLIANCE. THE AO HAS MOVED UNDER THE PRESUMPTION THAT ASSESSMENT W AS GETTING BARRED BY LIMITATION, WHICH ACCORDING TO THE DATES WAS GETTING BARRED. IN FACT, AFTER THE DATE OF SEARCH ON 20.11.2009, THE LAST DATE FOR PASS THE ORDER WOULD HAVE BEEN 31.03.2012. THE TIME TAKEN DURING WHICH THE PROCEEDING REMAINED STAYED BY TH E HIGH COURT (FROM 11.03 2011 TO 10.12.2013) IS TO BE EXCLUDED. IN SUCH C IRCUMSTANCES, THE AO HAD TIME FROM 11.03.2011 THE DATE OF GRANTING STAY TO 31.03.2012 I.E. 385 DAYS TO COMPLETE THE ASSESSMENT. AFTER EXCLUDING THE PERIOD LIFE THE AO WOULD HAVE QOT TI ME OF 295 DAYS, FROM THE DATE OF THE ORDER OF THE HIGH COURT/295 DAYS FROM 10.12.2013 WOULD BE 30.09.2014 (IN THIS PERIOD THE LIMITATION TIME WAS REDUCED FROM 24 MONTHS TO 21 MONTHS). ACCORDINGLY, I HOLD THAT ASSESSMENT HAS BEEN FRAMED IN UTTER HASTE THE A SSESSEE WAS PREVENTED BY SUFFICIENT AND REASONABLE CAUSE. THE AO WAS NOT JUSTIFIED IN FRAMING THE ASSESSMENT EX PARTE. GROUND NO. 3 RELATES TO THE JOT GIVING APPROVAL UNDER SECTION 153D IT IS THE CASE THE APPELLANT THAT THE APPROVAL HAS BEEN G IVEN BY THE JCIT WITHOUT LOOKING INTO CASE RECORDS. IT HAS FURTHER BEEN SUBMITTED THAT HAD THE JCIT LOOKED INTO THE RECORDS HE WOULD HAVE NOT GIVEN THE APPROVAL TO FRAME THE ASSESSMENT EX PARTE. AS ADMITTED BY THE AO HIMSELF IN THE REMAND REPORT DATED 04.01.2016 THAT WHILE FRAMING THE ASSESSMENT THE CASE RECORD FILES WERE NOT BEFORE THE THEN AO THEN HOW COULD THE SAME BE BEFORE THE JCIT . I AGREE WITH THE AR THAT APPROVAL MEANS APPLICATION OF MIND AFTER TAKING INTO CONSIDERATION APPRAIS AL OF THE ENTIRE RECORD. IT CANN OT BE A CASE OF BLIND APPROVA L OR APPROVAL FOR THE SAKE OF APPROVAL. APPROVAL I S NOT AN EMPTY FORMALITY. THE CASE LAW RELIED UPON BY THE AR SUPPORT THE ABOVE VIEW LOOKING TO THE FACTS OF THE CASE L AM OF THE CONSIDERED VIEW THAT THE APPROVAL HAS N OT BEING GIVEN IN THE MANNER IT SHOULD BE. AT LEAST THE CASE RECORD HAS NOT BEEN LOOK ED INTO BY T H E JC IT. ON THIS GROUND ALSO [ ITA NO.334 & 335/LKW/2016 ] 4 THE ASSESSMENT IS LIABLE TO BE QUASHED. THIS GROUND OF APPEAL STANDS ALLOWED. 6 . THEREAFTER FOR ASSESSMENT YEAR S 2004 - 05 AND 2005 - 06 THE LD. CIT(A) HAS SET ASIDE THE ORDER PASSED UNDER SECTION 153A OF THE ACT READ WITH 144 OF THE ACT AND THE REVENUE HAS NOT CHALLENGED THE ORDER OF THE LD. CIT(A) DATED 24/3/2016 ON THE SAID LEGAL ISSUE. IN THE SAID CIRCUMSTANCES, THE FINDING OF THE LD. CIT(A) FOR ASSESSMENT YEAR S 2004 - 05 AND 2005 - 06 BECOME FINAL. THE APPEALS FOR ASSESSMENT YEARS 2006 - 07 TO 2009 - 10 ARE ALSO OUTCOME OF THE PROCEEDINGS FOR ASSESSMENT YEAR 2004 - 05 AND 2005 - 06 AND IN ALL THESE APPEALS, THE LD. CIT(A) HAS DECIDED THE LEGAL ISSUE AS FOLLOWS: - GROUNDS NO. 1,2,3 ARE WITH RESPECT TO THE ASSESSMENT HAVING BEING FRAMED EX PARTE AND VALIDITY OF THE SAME. THIS MATTER HAS ALREADY BEEN DECIDED IN APPEAL FOR THE ASSESSMENT YEAR 2004 - 05 AND THE SAME IS BEING FOLLOWED HERE. THUS, GROUND NOS. 1 TO 3 ARE ALLOWED. 7 . SIMILARLY, FOR ASSESSMENT YEAR 2006 - 07 TO 2009 - 10, IT WAS HELD BY THE CO - ORDINATE ITAT BENCH , AS OBSERVED IN THE ORDER , THAT THE LD. CIT(A) HAS QUASHED THE ASSESSMENT PROCEEDINGS UNDER SECTION 153A READ WITH SECTION 144 OF THE ACT BY VI RTUE OF ORDER DATED 24/3/2016. THE SAID ORDER HAS NOT BEEN CHALLENGED BY THE REVENUE TILL DATE. EVEN IN THE PRESENT APPEAL, THE REVENUE DID NOT RAISE ANY LEGAL GROUND. HOWEVER, IN ALL THE APPEALS FOR ASSESSMENT YEAR 2006 - 07 TO 2009 - 10, THE REVENUE HAS N OT CHALLENGED THE ISSUE ON MERIT. SINCE THE ORDER UNDER SECTION 153A READ WITH SECTION 144 OF THE ACT HAS BEEN QUASHED FOR ASSESSMENT YEAR 2004 - 05 AND 2005 - 06, THEREFORE, THE ASSESSMENT S FOR ASSESSMENT YEAR 2006 - 07 TO 2009 - 10 WERE ALSO HELD TO BE NOT SUST AINABLE IN THE EYES OF LAW. THE CO - ORDINATE ITAT BENCH DECIDED THE LEGAL ISSUE IN FAVOUR OF THE ASSESSEE. WE ARE , THEREFORE, OF THE [ ITA NO.334 & 335/LKW/2016 ] 5 CONSIDERED VIEW THAT FOLLOWING THESE DECISIONS IN THE ASSESSEES OWN CASE WHERE THE LD. CIT(A) HAS QUASHED THE ASSESSMENTS , ANY FURTHER ADJUDICATION ON MERIT BECOMES INFRUCTUOUS. THEREFORE, GROUND OF APPEAL NO.6 IS ALLOWED WHEREAS GROUNDS NO.1 TO 5 BECOMES ACADEMIC IN NATURE AND HENCE NO ADJUDICATION IS REQUIRED. THE APPEAL OF THE ASSESSEE IS ALLOWED. 8 . SINCE THE FACTS, CIRCU MSTANCES AND THE ISSUE ARE SAME IN ITA NO.335/LKW/2016, FOLLOWING OUR AFORESAID DECISION IN ITA NO.334/LKW/2016, GROUND NO.6 IS ALLOWED WHEREAS GROUNDS NO.1 TO 5 BECOME S ACADEMIC IN NATURE AND HENCE NO ADJUDICATION IS REQUIRED . THE APPEAL OF THE ASSESSEE IS ALLOWED. 9 . IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 /12/ 201 7 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH DECEMBER , 2017 JJ: 1212 CO PY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR