M/s. Magnum Industries, Hooghly V. CIT, Kol-XVI, Kolkata,

ITA 344/KOL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48035 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 16-02-2010
• Court: TRIBUNAL
• Department Lawyers: S SINHA
• Assessee Lawyers: DIPAK KAR
• Keywords: Business expenditure; Principle of natural justice; Period of limitation; Time period of passing order
• Section: 263; 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH B, KOLKATA () BEFORE . .. . . .. . , , , , , SHRI B.R.MITTAL, JUDICIAL MEMBER. /AND . .. .!' !'!' !'. .. . , #$ SHRI C.D.RAO, ACCOUNTANT MEMBER % % % % / ITA NO . 344/KOL/2010 &' ()/ ASSESSMENT YEAR : 2005-06 (+, / APPELLANT ) M/S. MAGNUM INDUSTRIES (PAN : AAFFM 9928 C ) - & - - VERSUS - . (./+,/ RESPONDENT ) C.I.T., KOLKATA-XVI, KOLKATA +, 0 1 #/ FOR THE APPELLANT: SHRI DIPAK KAR ./+, 0 1 #/ FOR THE RESPONDENT: SHRI S.SINHA, CIT #2 / ORDER ( (( ( . .. .!' !'!' !'. .. . ) )) ), , , , #$ PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 30.03.2009 OF THE CIT,KOLKATA-XVI, KOLKATA PERTAINING TO ASSESSMENT Y EAR 2005-06. 2. THERE IS A DELAY OF 223 DAYS IN FILING OF THE APPEAL BY THE ASSESSEE FOR WHICH THE ASSESSEE HAS FILED A CONDONATION PETITION EXPLA INING THE REASONS FOR SUCH DELAY. AFTER CONSIDERING THE SUBMISSIONS BY THE ASSESSEE T HE DELAY IS CONDONED. 3. THE ONLY ISSUE RAISED IN THIS APPEAL IS ORDER PASSE D BY THE LD. CIT(ADMN.) U/S 263 OF THE IT ACT. 4. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL A PPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE IMPUGNED ORDER OF THE L D. CIT-XVI, KOLKATA IS BARRED BY LIMITATION IN AS MUCH AS THE ORDER WAS RECEIVED AFT ER THE PERIOD OF LIMITATION AND AS SUCH LIABLE TO BE QUASHED. THE LD. CIT(ADMN.) ERRED IN LAW AND WAS NOT JUSTIFIED IN PASSING THE IMPUGNED ORDER WITHOUT GIVING THE ASSES SEE A REASONABLE OPPORTUNITY OF 2 BEING HEARD AND AS SUCH THE ORDER IS BAD IN LAW AND LIABLE TO BE QUASHED. THE LD. CIT(ADMN) WAS NOT JUSTIFIED IN HOLDING THAT THE ORD ER U/S 143(3) PASSED BY THE AO IS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE IN TEREST OF THE REVENUE AND WRONGLY STATING IN THE IMPUGNED ORDER THAT THE AMOUNT OF RS .3,91,817/- WAS NOT ALLOWABLE AS BUSINESS EXPENSES AS PER PROVISION OF SECTION 40(A) (IA) OF THE IT ACT, 1961 AND AS SUCH THE IMPUGNED ORDER IS BAD IN LAW AND LIABLE TO BE Q UASHED. THE LD. CIT(ADMN.) WAS NOT JUSTIFIED IN IGNORING THE FACT THAT SECTION 194 C OF THE IT ACT, 1961 IS NOT AT ALL APPLICABLE IN THE INSTANT CASE AND AS SUCH THE IMPU GNED ORDER IS BAD IN LAW AND LIABLE TO BE QUASHED. HE FURTHER SUBMITTED THAT THE IMPUGN ED ORDER OF THE LD. CIT(ADMN.) IS CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE AND I S OTHERWISE BAD IN LAW AS WELL AS ON FACTS. 5 . ON THE OTHER HAND THE LD. DR WHILE REFERRING TO THE ORDER PASSED U/S 263 CONTENDED THAT THE LD. CIT(ADMN.) HAS CATEGORICALLY MENTIONED THAT THE ASSESSEE IS TAKING ADJOURNMENTS ON SEVERAL OCCASIONS AND NOW TH E ASSESSEE IS COMING WITH THE PLEA THAT THE ORDER PASSED BY THE LD. CIT(ADMN.) WA S RECEIVED BY THE ASSESSEE AFTER THE PERIOD OF LIMITATION IS NOT TENABLE AS THE DEL AY IN PASSING THE ORDER IS ATTRIBUTABLE TO THE ASSESSEE HIMSELF. HE FURTHER POINTED OUT THA T THE LD. CIT(ADMN.) HAS NOT GIVEN ANY DIRECTION TO THE AO TO APPLY THE PROVISION OF S ECTION 40(A)(IA) OF THE IT ACT, 1961 BUT SIMPLY SET ASIDE THE ASSESSMENT ORDER AND DIREC TED THE AO TO EXAMINE THE MATTER PROPERLY AND TO MAKE PROPER DISALLOWANCE U/S 40(A)( IA) OF THE IT ACT, 1961. KEEPING IN VIEW OF THE FACT THAT THE ASSESSEE IS NOT COOPER ATING WITH THE LD. CIT(ADMN.). THEREFORE, HE REQUESTED TO UPHOLD THE SAME. 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD, IT IS OBSERVED FROM THE IMPUGN ED ORDER THAT THE LD. CIT(ADMN.) PASSED THE ORDER ON 30 TH MARCH, 2009 I.E. WITHIN THE SPECIFIED TIME AS PROV IDED IN THIS STATUTE. THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL TO THE EFFECT THAT HE HAS NOT PASSED THE O RDER ON 30 TH MARCH, 2009. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT THE IMPUGNED OR DER SERVED ON THE ASSESSEE AFTER THE PERIOD OF LIMITATIONS IS NOT ACCEPTABLE. IT IS FURT HER OBSERVED THAT ONE OF THE PARTNERS OF 3 THE ASSESSEE FIRM HAS ASKED THE ADJOURNMENT BEYOND THE LIMITATION PERIOD. THEREFORE, IN OUR CONSIDERED OPINION, THE ARGUMENTS MADE BY TH E LD. COUNSEL FOR THE ASSESSEE IS NOT AN ACCEPTABLE ONE. IT IS FURTHER OBSERVED THAT THE AO HAS NOT THEN DEALT WITH THE ISSUE RAISED BY THE LD. CIT(ADMN.) U/S 263 OF THE I T ACT AND THE ASSESSEE HAS NOT BROUGHT ANY MATERIAL TO THE FACT THAT THIS ISSUE WA S CONSIDERED BY THE AO AT THE TIME OF SCRUTINY ASSESSMENT. THEREFORE, IN OUR CONSIDERED O PINION THE LD. CIT(ADMN.) IS JUSTIFIED IN INVOKING PROVISION OF SECTION 263 OF T HE IT ACT. THEREFORE, WE CONFIRM THE SAME. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISM ISSED 3 #2 4 5& 6 37 8 ORDER PRONOUNCED IN THE COURT ON 05.04.2011. SD/- SD/- . .. . . .. . B.R.MITTAL, JUDICIAL MEMBER . .. .!' !'!' !'. .. . , ,, , #$ #$ #$ #$ , C.D.RAO, ACCOUNTANT MEMBER. ( (( ('$ '$ '$ '$) )) ) DATE: 05.04.2011. #2 0 .9 :#9(;- COPY OF THE ORDER FORWARDED TO: 1. M/S.MAGNUM INDUSTRIES, ICHAPUR, PURBAPARA, P.O., SA TRAGACHI, HOWRAH- 711104. 2 CIT, KOLKATA-XVI, KOLKATA 3. THE CIT, 4. THE CIT 5. DR, KOLKATA BENCHES, KOLKATA /9 ./ TRUE COPY, #2&5/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES R.G.(.P.S.) 4 .