M/s Padmalaya Sales Corporation, Berhampur V. ITO, Berhampur

ITA 346/CTK/2011

• Counselvise Citation: 34622114 RSA 2011
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 30-11-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 01-07-2011
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: R KARARS; G NAIK
• Section: 147; 148; 234B

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 346/CTK/2011 (ASSESSMENT YEAR 2005 - 06) M/S.PADMALAYA SALES COR PORATION, O.W.T.ROAD, BERHAMPUR PAN: AADFP 9753 A VERSUS INCO ME - TAX OFFICER, AMBOPUA, WARD 2 - , BERHAMPUR (GANJAM) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI G.NAIK AND R.KAR, ARS FOR THE RESPONDENT SHRI S.C.MOHANTY, DR DATE OF HEARING : 30.11.2011 DATE OF PRONOUNCEMENT : 02.12.2011 O RDER SHRI K. K.GUPTA, AM : THIS APPEAL BY THE ASSESSEE AGITATES THE LEARNED CIT(A) DISMISSING THE ASSESSEES APPEAL ON THE LEGAL ISSUE THAT THE MANDATORY REQUIREMENT TO THE COMPLIANCE OF THE ISSUE OF NOTICE UNDER THE PROVISIONS OF SECTION 143(3)/147 WERE N OT MADE WITH DILIGENTLY BY THE ASSESSING OFFICER WAS FIT FOR ANNULLING THE ORDER VIS - - VIS TAKING RECOURSE TO THE PROVISIONS OF SECTION 292BB OF THE I.T.ACT,1961 W.E.F. 1.4.2008. 2. THE BRIEF FACTS ARE THAT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER S ECTION 14 3(3) READ WITH S ECTION 147 ON 24TH DECEMBER,2009 DETERMININ G TOTAL INCOME AT 3,27,517 WHICH RESULTED IN AN ADDITION OF 1 ,53,467 TO THE INCOME RETURNED U/S 148 AND U/S 139. CONSEQUENTLY, THE AP PELLANT WAS ASKED TO PAY DEMAND OF 82,2 12 WHICH INC LUDES INTEREST U/S 244A(3), 234B & 234D AND EXCLUDES PREPAID TAX OF 63,690. ACCORDING TO THE ASSESSING OFFICER , THE ASSESSEE DID NOT DISCLOSE GROSS BILL OF 1,53,467 RECEIVABLE FROM BERHAMPUR MUNICIPAL CORPORATION IN THE LEDGER ACCOUNT FOR THE PREVIOUS YEAR ENDING 31,3,2005 AS A RESULT, THE TOTAL VALUE OF ASSETS AS DISCLOSED IN THE BALANCE SHEET FOR THAT PREV IOUS YEAR ENDING REMAINED UNDER STATED TO THAT EXTENT IN COMPUTING THE ITA NO.346/CTK/2011 2 TA XABLE PROFIT FOR THE AY 2005 - 06. THEREFORE, HE MADE THE ADDITION OF 1,53,467 TO THE RETURNED INCOME U/S.69. 3. AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY STATING THAT THE ASSESSING OFFICER IS NOT JUSTIFIED IN COMPLETING THE ASSESSMENT ON 24 - 12 - 2009 MOST HURRIEDLY AND ARBITRARILY WITHOUT DISPOSING OF THE PETITION DATED 15 - 12 - 2009 BY A SPEAKING ORDER IN TERMS OF THE SUPREME COURT DECISION IN THE CASE OF G K N DRIVE SHAFTS (INDIA) LTD VS ITO REPORTED IN 259 ITR 19. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT I N THE CASE OF MCM EXPORT S VS DCIT REPORTED IN 23 DTR 356 (GUJ) , IT HAS BEEN HELD TH AT REASSESSMENT FRAMED BY THE ASSESSING OFFICER WITHOUT DISPOSING OF THE PRIMARY OBJECTION RAISED BY THE ASSESSEE TO THE ISSUE OF REASSESSMENT NOTICE ISSUED BY HIM WAS LIABLE TO BE QUASHED. IN THE CASE OF PREMIER LTD VS . DCIT [ WRIT PETITION NO.2340 DATED 22 - 10 - 2008] HONBLE BOMBAY HIGH COURT HELD THAT NOTICE ISSUED U/S 142 (1) & 143 (2) WITHOUT DISPOSING OF THE OBJECTION RAISED IN RESPONSE TO THE REASONS RECORDED HELD INVA LID . IN THE PRESENT CASE THE ASSESSING OFFICER HAVING COMPLETED THE ASSESSMENT WITHOUT DISPOSING OF THE PRIMARY OBJECTION FILED BY THE ASSESSEE , THE ASSESSMENT SO COMPLETED IS LIABLE TO BE QUASHED. THE LEARNED CIT(A) SHOULD NOT HAVE UPHELD THE RE - ASSESSMENT MADE ON 24 - 12 - 2009. CONCLUD ING HIS ARGUMENT, HE SUBMITTED THAT IF THE BENCH SO DESIRES AND IN VIEW OF THE FACTUAL POSITION BROUGHT ON RECORD BY THE LEARNED CIT(A) , HE HAS NO OBJECTION IF THE ISSUE WAS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERATION ON MERITS AS PER T HE FACTUAL MERITS CONSIDERED BY THE ASSESSING OFFICER RATHER LEAN IN FAVOUR OF THE ASSESSEE TO BE CONSIDERED BY THE LEARNED CIT(A) WITHOUT TAKING RECOURSE TO THE PREROGATIVE OF SECTION 292BB WHICH INCIDENTALLY ALSO STANDS COV ERED BY THE DECISION OF THE ITA T, DELHI SPECIAL BENCH IN THE CASE OF KUBER TOBACCO PRODUCTS (P)LTD V. DCIT (COPY FURNISHED) . ITA NO.346/CTK/2011 3 4. THE LEARNED DR SUPPORTED THE ORDER OF THE LEARNED CIT(A) ON THE LEGAL ISSUE OF MAINTAINABILITY OF ORDER U/S.143(3)/147 IN ACCORDANCE WITH THE PROVISIONS OF TH E I.T.AC T RELYING ON THE NEW PROVISION OF SECTION 292BB BROUGHT INTO THE STATUTE W.E.F. 1.4.2008. HE A LSO DID NOT HAVE ANY OBJECTION TO THE PRAYER OF THE LEARNED COUNSEL FOR THE ASSESSEE FOR CONSIDERATION OF THE ISSUE ON MERITS BY THE LEARNED CIT(A), IF SO DEEMED NECESSARY, ON THE FACTUAL ASPECTS BROUGHT ON RECORD BY THE ASSESSING OFFICER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON OUR CAREFUL CONSIDERATION OF THE FACTS, WE ARE INCLINED TO HOLD THAT THE ASSESSEE WAS PRIMAFACIE SUBJECTED TO PROCEEDINGS U/S.143(3)/147 WHEN THE LEGAL ISSUE OF MAINTAINABILITY OF PROCEEDINGS WERE SUBJECTED TO LEGAL SCRUTINY. THE LEARNED CIT(A) SUPPORTED THE ORDER OF THE ASSESSING OFFICER BY RELYING ON THE PROVISIONS OF SECTION 292BB IN TRODUCED W.E.F. 1.4.2008 WHICH ISSUE HAS ALSO BEEN DEALT WITH BY THE ITAT, SPECIAL BENCH, DELHI IN THE CASE OF KUBER TOBACCO PRODUCTS (P) LTD V. DCIT (SUPRA). WE HAVE ALSO PERUSED THE ORDER OF THE ASSESSING OFFICER ON MERITS ON FACTUAL ASPECTS WHICH DO NOT REQUIRE ANY FURTHER DELIBERATION INSOFAR AS THE CREATION OF THE DEMAND SOLITARY ON THE INCOME RECEIVABLE CONSIDERED ASPECTS BROUGHT TO TAX U/S.69 BY THE ASSESSING OFFICER WAS TO BE ADDRESSED BY THE LEARNED CIT(A) WITHOUT ANY FURTHER ARGUMENTS FOR CORRELA TING THE TDS CERTIFICATES WHICH WAS THE BONE OF CONTENTION FOR ASSUMING JURISDICTION U/S.147. THE ACCOUNTING TREATMENT WAS MERELY AN OPINION OF THE ASSESSING OFFICER THEREFORE WAS TO BE DEALT WITH BY THE LEARNED CIT(A) IN ITS PROPER PERCEPTIVE. IN THIS VIE W OF THE MATTER, WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTORE THE ISSUE TO HIS FILE TO CONSIDER THE ISSUE ON MERITS AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE AS WELL AS THE ASSESSING OFFICER. ITA NO.346/CTK/2011 4 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. SD/ - SD/ - ( K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 02.12.2011 H.K .PADHEE, SENIOR PRIVATE SECRETARY. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: M/S.PADMALAYA SALES CORPORATION, O.W.T.ROAD, BERHAMPUR 2. THE RESPONDENT: INCOME - TAX OFFICER, AMBOPUA, WARD 2 - , BERHAMPUR (GANJAM) 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.