M/s. Yog International (P) Ltd., Kanpur V. The Asstt. Commissioner of Income Tax, Kanpur

ITA 357/LKW/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83370 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-09-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 03-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 153A; 12

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.357/LKW/2012 ASSESSMENT YEAR:2002 - 03 M/S YOG INTERNATIONAL (P) LTD., 123/1F, KALPI ROAD, KANPUR. PAN:AAACY0486D VS. A.C.I.T., CC - II, KANPUR (APPELLANT) (RESPONDENT) ITA NO.426/LKW/2012 ASSESSMENT YEAR:2002 - 03 A.C.I.T., CC - II, KANPUR VS. M/S YOG INTERNATIONAL (P) LTD., 123/1F, KALPI ROAD, KANPUR. PAN:AAACY0486D (APPELLANT) (RESPONDENT) O R D E R PER A. K. GARODIA, A.M. THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT(A) - I, KANPUR DATED 30/04/2012 FOR ASSESSMENT YEAR 2002 - 2003. ASSESSEE BY SHRI SUDHINDRA JAIN, C.A. SHRI ANURAG GUPTA, C.A. REVENUE BY SHRI S. L. MEENA, CIT, D.R. DATE OF HEARING 09/09/2014 DATE OF PRONOUNCEMENT 2 1 /10/2014 2 2. FIRST WE TAKE UP THE APPEAL OF THE ASSESSEE I.E. I.T.A. NO.357/LKW/2012 FOR ASSESSMENT YEAR 2002 - 2003. IN T HIS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. LEARNED CIT(A) - I, KANPUR HAS FAILED TO APPRECIATE THAT MATERIAL AVAILABLE ON RECORD INCLUDING THE AFFIDAVIT OF LENDER WAS SUFFICIENT TO DISCHARGE THE INITIAL ONUS BY THE APPELLANT & THERE IS NOTHING ON RECORD TO DISLODGE THE MATERIAL ON RECORD. 2. WHILE ADJUDGING THE TRANSACTION OF LOAN AS NOT GENUINE LD. CIT(A) - I, KANPUR HAS BEEN GUIDED BY IRRELEVANT CONSIDERATION & FACTORS NOT GERMANE TO LAW IN AS MUCH AS THE FACTOM OF REPAYMENT OF LOAN BY THE APPELLANT HAS BEEN IGNORED. 3. THAT THE ORDER OF THE LD. C.I.T.(A) - I, KANPUR TO THE EXTENT STATED IN GROUNDS OF APPEAL NO. 1 AND 2 IS INSUPPORTABLE IN LAW AND ON FACTS AND IS ALSO CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE AND EQUITY. 4. THAT ANY OTHER RELIEF OR RELIEFS AS YOUR HONOURS MAY DEEM FIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, BE GRANTED. 3. THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GROUND AS GROUND NO. 5, WHICH IS AS UNDER: 5. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 1, KANPUR HAS ERRED IN LAW AND ON FACTS IN CURSORILY DISMISSING THE GROUND OF APPEAL NO. XIII TAKEN BY THE APPELLANT BEFORE HIM. FOR THE SAKE OF READY REFERENCE THE AFORESAID GROUND NO. XIII IS REPRODUCED BELOW: (QUOTE) THAT THE LD. A.O. AND AP PELLATE AUTHORITY WHO HAVE DEALT WITH THE ASSESSMENT UNDER APPEAL HAVE FAILED TO CONSIDER AND APPRECIATE THAT THE PROVISION OF THE SECTION 153C OF THE INCOME TAX ACT, 1961, COULD NOT HAVE BEEN TAKEN WITHOUT FIRST RECORDING REASONS IN SOME CASE PENDING BEFO RE THE 3 SAME OR ANY OTHER ASSESSING OFFICER UNDER SECTION 153A OF THE INCOME TAX ACT, 1961, AND IN THE ABSENCE OF ANY SUCH SATISFACTION CONTEMPLATED UNDER SECTION 153C OF THE INCOME TAX ACT, 1961, THE ASSESSMENT UNDER APPEAL IS INSUPPORTABLE IN LAW AND ON F ACTS AND IS LIABLE TO BE QUASHED? 4. REGARDING ADDITIONAL GROUND, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THIS ISSUE WAS NOT DECIDED BY CIT(A) ON MERIT BUT TILL DATE THE REVENUE HAS NOT BROUGHT ON RECORD ANY SATISFACTION RECORDED BY THE ASS ESSING OFFICER OF THE SEARCHED PERSON. IN THIS REGARD HE DRAWN OUR ATTENTION TO LETTER DATED 05/09/2014 RECEIVED FROM THE ASSESSING OFFICER OF SHRI AMAR NATH GUPTA, DIRECTOR OF THE ASSESSEE COMPANY AND IN THIS LETTER , IT IS STATED BY THE ASSESSING OFFICER THAT THE INFORMATION ASKED FOR BY THE ASSESSEE IS NOT TRACEABLE IN THE AVAILABLE RECORDS. HE ALSO SUBMITTED THAT ALONG WITH THE LETTER OF THE ASSESSING OFFICER, HE HAS ENCLOSED A LETTER DATED 05/03/2014 SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSING OFFI CER SEEKING CERTIFIED COPY OF SATISFACTION RECORDED BY THE ASSESSING OFFICER AS CONTEMPLATED U/S 153C OF THE ACT FOR ASSESSMENT YEAR 2002 - 03 IN THE CASE OF M/S YOG INTERNATIONAL PVT. LTD. HE FURTHER SUBMITTED THAT SINCE SATISFACTION, AS REQUIRED UNDER THE PROVISIONS OF SECTION 153C, COULD NOT BE BROUGHT ON RECORD BY THE REVENUE, IT SHOULD BE HELD THAT THE ASSESSMENT ORDER IS WITHOUT JURISDICTION AND HENCE, THE SAME SHOULD BE QUASHED. 5. AS AGAINST THIS, IT WAS SUBMITTED BY LEARNED D.R. OF THE REVENUE THAT SINCE NO SPEAKING ORDER HAS BEEN PASSED BY THE CIT(A), THE MATTER MAY BE RESTORED BACK TO HIS FILE FOR PASSING SPEAKING ORDER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THA T THIS ISSUE WAS DECIDED BY LEARNED CIT(A) AS PER PARA 4.2 OF HIS ORDER AND IN THIS PARA THE LEARNED CIT(A) HAS REFERRED TO THE ORDER OF HIS PREDECESSOR DATED 07/07/2010 4 IN RESPECT OF GROUND RAISED BEFORE CIT(A) IN THE FIRST ROUND TO THE EFFECT THAT THE NO TICE DATED 16/10/2006 ISSUED U/S 153C FOR JURISDICTION OVER THE ASSESSEE IS BAD IN LAW AND, THEREFORE, THE ASSESSMENT PROCEEDINGS IS VOID AB INITIO AND DESERVES TO BE QUASHED. THIS GROUND WAS DECIDED BY CIT(A) IN FIRST ROUND VIDE ORDER DATED 07/07/2010 ON THE BASIS THAT: 'IN VIEW OF THE ABOVE AND AS CALCULATED BY AO BY EXCLUDING THE DAY ON WHICH ORDER IS PASSED FOR THE PURPOSE OF CALCULATIONS OF LIMITATION AS PER THE LIMITATION ACT, THERE IS NO ELEMENT OF TIME BARRING IN THE EXERCISE OF PROCEEDING UNDER SECTION 142(2A). THE APPELLANT HAS NOT BEEN ABLE TO PROVE THAT LIMITATION HAS EXPIRED IN TERMS OF SECTION 153 AND 142(2A) READ WITH SECTION 12 OF THE LIMITATION ACT. UNDER THE CIRCUMSTANCES, THE ARGUMENT AND SUBMISSIONS ON THE ISSUE LIMITATION ARE FACTUALL Y INCORRECT HENCE SAME ARE DISMISSED...' 7. IN THE IMPUGNED ORDER, THE LEARNED CIT(A) HAS DECIDED THE ISSUE ON THIS BASIS ALONE THAT THE ADDITIONAL GROUND OF THE ASSESSEE IS NOT BEING ADMITTED BECAUSE IT IS BEYOND THE SCOPE OF LIMITED JURISDICTION AVAILAB LE TO THE CIT(A) UNDER REMAND PROCEEDINGS. THIS IS A SETTLED LAW BY NOW THAT THE LEGAL ISSUE OF JURISDICTION CAN BE RAISED AT ANY STAGE AND THEREFORE, THE CIT(A) WAS NOT JUSTIFIED IN REFUSING TO ADMIT THE ADDITIONAL GROUND RAISED BEFORE HIM REGARDING JURI SDICTION OF THE ASSESSING OFFICER IN THE ABSENCE OF SATISFACTION NOTE HAVING BEEN RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON. BUT STILL WE FEEL THAT IN THE INTEREST OF JUSTICE, THE MATTER SHOULD GO TO CIT(A) FOR DECIDING THE ISSUE AFRESH. H ENCE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE TO DECIDE THE ISSUE AS TO WHETHER THE ASSESSING OFFICER HAS ASSUMED JURISDICTION PROPERLY OR NOT AFTER RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON REQUIRED U/S 153C OF THE ACT. THE LEARNED CIT(A) SHOULD PASS A SPEAKING ORDER ON THIS ISSUE AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. THE ADDITIONAL GROUND OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 5 8. SINCE WE HAVE RESTORED THE MATTER BACK TO THE FILE OF CIT(A) FOR HIS DECISION ON THIS LEGAL OBJECTION OF JURISDICTION OF THE ASSESSING OFFICER, THE OTHER GROUNDS RAISED BY THE ASSESSEE DO NOT CALL FOR ANY ADJUDICATION AT THIS STAGE. IN CASE IT IS FOUND BY LEARNED CIT(A) THAT THE ASSESSING OFFICER DID NOT HAVE PROPER JURISDICTION OVER THE ASSESSEE BECAUSE OF NON RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON, AS REQUIRED U/S 153C OF THE ACT, THEN THE ASSESSMENT ITSELF GOES BAD AND NO OTHER ISSUE REMAINS TO BE DECIDED BUT IN CASE HE FINDS THAT THE ASSESSING OFFICER HA D PROPER JURISDICTION BECAUSE SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON AS REQUIRED U/S 153C OF THE ACT, THEN HE SHOULD DECIDE THE ISSUE ON MERIT AFRESH BECAUSE THE ISSUE ON MERIT CAN BE DECIDED ONLY AFTER DECIDING THE ISSUE OF JURISDICTION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 10. NOW WE TAKE UP THE APPEAL OF THE REVENUE FOR ASSESSMENT YE AR 2002 - 03 I.E. I.T.A. NO.4 26/LKW/2012. 11. THE REVENUE HAS RAISED AS MANY AS 14 GROUNDS BUT THE MAIN GRIEVANCE OF THE REVENUE ARE THREE I.E. DELETING THE ADDITION OF RS.64.50 LAC S BEING UNEXPLAINED SHARE APPLICATION MONEY, DELETING THE ADDITION OF RS.25 LAC S IN RESPECT OF LOAN FROM SHRI MANOJ SHUKLA AND DELETING THE ADDITION OF RS.7 LAC S MADE ON ACCOUNT OF UNEXPLAINED LOAN FROM SHRI MANOJ KUMAR KATIYAR. WHILE DECIDING THE APPEAL OF THE ASSESSEE , WE HAVE RESTORED BACK THE MATTER TO THE FILE OF CIT(A) FOR FRESH DECISION REGARDING ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER AND HENCE, THESE ISSUES ON MERIT OF VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER AND DELETED BY CIT(A) CANNOT BE DECIDED AT PRESENT BECAUSE THE DECISION OF CIT(A) ON THIS ISSUE HAS TO BE AFRESH AFTER HIS FINAL 6 DECISION ON JURISDICTION ASPECT. IF IT IS FOUND BY CIT(A) THAT THE ASSESSING OFFICER DID NOT HAVE JURISDICTION OVER THE ASSESSEE THEN THE ASSESSMENT ORDER ITSELF GOES BAD AND THERE IS NO ISSUE TO BE DECIDED BY CIT(A) BUT IN CASE IT IS FOUND BY CIT(A) THAT THE ASSESSING OFFICER WAS HAVING PROPER JURISDICTION THEN HE SHOULD DECIDE THESE ISSUES ON MERIT AFRESH AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 12. IN THE RESULT, THE APPEAL OF THE REVEN UE STANDS ALLOWED FOR STATISTICAL PURPOSES. 13. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASSESSEE AND REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 1 /10/2014 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR