M/s Juhi Alloys Pvt. Ltd., Kanpur V. Commissioner of Income Tax--II, Kanpur

ITA 368/LKW/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4709 (ITAT-LUCKNOW)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-01-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 05-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 40A(3); 143(3); 142(1); 263

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.368/LKW/2015 ASSESSMENT YEAR:2010-11 C.I.T.-II, KANPUR. VS M/S JUHI ALLOYS PVT. LTD., 123/360, FAZALGANJ, KANPUR. PAN:AAACJ3420A (RESPONDENT) (APPELLANT) SHRI ASHISH JAISWAL, ADVOCATE APPELLANT BY SHRI SANJAY KUMAR, CIT, D. R. RESPONDENT BY 20 /01/2016 DATE OF HEARING 24/02/2016 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE OR DER PASSED BY LEARNED CIT-II, KANPUR DATED 30/03/2015 FOR THE ASS ESSMENT YEAR 2010- 2011 PASSED BY HIM U/S 263 OF THE ACT. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS: 1. BECAUSE ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT HAS ERRED IN PASSING ORDER U/S 263 OF T HE I.T. ACT. 2. BECAUSE ON FACTS AND CIRCUMSTANCES OF THE CASE T HE ORIGINAL ASSESSMENT ORDER IS NOT ERRONEOUS ON THE I SSUES ON WHICH ORDER U/S 263 HAS BEEN PASSED BY THE LD.CI T AND THEREFORE COULD NOT BE SAID TO BE PREJUDICIAL T O THE INTEREST OF REVENUE. 3. BECAUSE ON FACTS AND CIRCUMSTANCES OF THE CASE T HE LD.CIT HAS PASSED THE ORDER U/S 263 MECHANICALLY WITHOUT APPLICATION OF MIND. 2 4. THAT THE LD.CIT HAS NEITHER EXAMINED THE RECORDS NOR MADE OR CAUSE TO BE MADE SUCH INQUIRY AS REQUIRED T O JUSTIFY THE ORDER U/S 263 OF THE ACT. 5. THAT THE BASIS ON WHICH ORDER U/S 263 OF THE ACT IS PASSED WAS ALREADY EXAMINED BY THE ASSESSING OFFICE R U/S 143(3) OF THE ACT. 6. THAT THE ASSESSMENT ORDER PASSED U/S 143(3) IS N EITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENU E. 3. IT WAS SUBMITTED BY LEARNED A. R. OF THE ASSESSE E THAT THE NOTICE ISSUED BY LEARNED CIT U/S 263 DATED 11/02/2015 IS A VAILABLE ON PAGES 86 TO 88 OF THE PAPER BOOK. HE ALSO SUBMITTED THAT CO PY OF QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER U/S 142(1) OF THE A CT IS AVAILABLE ON PAGES 151-154 OF THE PAPER BOOK AND IN THIS QUESTIONNAIRE , QUERY WAS RAISED BY THE ASSESSING OFFICER ON ALL THE POINTS NOTED BY LE ARNED CIT IN HIS NOTICE U/S 263 OF THE ACT. HE FURTHER SUBMITTED THAT THE REPLY SUBMITTED BEFORE THE ASSESSING OFFICER IS ALSO AVAILABLE IN THE PAPE R BOOK ALONG WITH THE ENCLOSURES ON PAGES 100 TO 145 AND ON PAGES 89 TO 9 1 OF THE PAPER BOOK. 4. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDER OF LEARNED CIT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT IN THE NOTICE ISSUED BY LEARNED CIT ON 11/02/2015 U/S 263 OF THE ACT, VARIOUS POINTS HAVE BEEN RAISED BY HIM AND IT IS STATED IN THE NOTICE THAT ON THESE POINTS, THE ASSESSING OFFICER HAS NOT PROPERLY EXAM INED THE CASE. HENCE, IT IS SEEN THAT THIS IS NOT THE ALLEGATION OF LEARN ED CIT THAT THERE IS NO ENQUIRY OR THAT THERE IS NO APPLICATION OF MIND BY THE ASSESSING OFFICER AND HIS ALLEGATION IS THAT THE ISSUES WERE NOT PROPERLY EXAMINED BY THE ASSESSING OFFICER. THIS IS A SETTLED POSITION OF L AW BY NOW THAT LACK OF ENQUIRY BY THE ASSESSING OFFICER DEFINITELY MAKES T HE ASSESSMENT ORDER ERRONEOUS AND IN THAT SITUATION, LEARNED CIT MAY IN VOKE THE REVISIONARY 3 POWERS U/S 263 OF THE ACT BUT IN A CASE OF INADEQUA TE ENQUIRY BY THE ASSESSING OFFICER, THE REVISIONARY POWERS CANNOT BE INVOKED BY LEARNED CIT. IN THE PRESENT CASE, WE FIND THAT THE FIRST O BJECTION OF LEARNED CIT IS THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.2.80 LAC AND RS.2 LAC ON ACCOUNT OF ADVERTISEMENT AND PUBLICITY EXPENSES WIT HOUT DEDUCTING TDS U/S 194 OF THE ACT. IN THE NOTICE ISSUED BY THE ASS ESSING OFFICER U/S 142(1), THE ASSESSING OFFICER HAS ASKED THE ASSESSE E TO FURNISH THE DETAILS OF EXPENSES INCURRED UNDER THE HEAD ADVERTISEMENT A ND PUBLICITY OF RS.4.90 LAC AND THIS IS ALSO ENQUIRED IN THE SAME N OTICE AS TO WHETHER TDS WAS DEDUCTED OR NOT. HENCE, IT IS SEEN THAT ON TH IS ISSUE, ENQUIRY WAS DEFINITELY MADE BY THE ASSESSING OFFICER. THE SECO ND OBJECTION OF LEARNED CIT IS THAT CERTAIN PAYMENTS WERE MADE BY THE ASSES SEE IN CASH EXCEEDING RS.20,000/- IN ONE DAY AND THEREFORE, THERE IS VIOL ATION OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT. ON THIS ISSUE ALSO, WE FIND THAT IN THE QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER U/S 1 42(1) OF THE ACT, THE ASSESSING OFFICER HAS ASKED THE ASSESSEE REGARDING DETAILS OF THE AMOUNT INADMISSIBLE U/S 40A(3) OF THE ACT. HENCE, IT IS S EEN THAT ON THIS ISSUE ALSO, ENQUIRY WAS MADE BY THE ASSESSING OFFICER IN COURSE OF ASSESSMENT PROCEEDINGS. THE THIRD OBJECTION OF LEARNED CIT IS THAT THERE IS INCREASE IN THE QUANTUM OF FUEL AND COAL CONSUMED TO RS.747.79 LAC IN THE PRESENT YEAR AS AGAINST RS.384.79 LAC IN THE PRECEDING YEAR BUT THERE IS DECREASE IN THE TURNOVER AND THEREFORE, THIS IS THE OBJECTIO N OF LEARNED CIT THAT THE OVERALL TURNOVER SHOWN BY THE ASSESSEE LOOKS TO BE UNDERSTATED. IN THIS REGARD, WE FIND THAT IN THE QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER U/S 142(1) OF THE ACT, THE ASSESSING OFFICER HAS AS KED THE ASSESSEE TO FURNISH DETAILS OF VARIOUS EXPENSES INCLUDING POWER AND FUEL CONSUMED OF RS.747.79 LAC. HENCE, IT IS SEEN THAT ON THIS ISSU E ALSO, ENQUIRY WAS MADE BY THE ASSESSING OFFICER. UNDER THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT SINCE ENQUIRY WAS MADE BY THE ASSESSIN G OFFICER ON ALL THE 4 POINTS ON WHICH OBJECTION HAD BEEN RAISED BY LEARNE D CIT IN THE NOTICE ISSUED BY HIM U/S 263 OF THE ACT, THIS IS NOT A CAS E OF LACK OF ENQUIRY BY THE ASSESSING OFFICER OR LACK OF APPLICATION OF MIN D BY THE ASSESSING OFFICER BECAUSE ON ALL THE ISSUES, QUERY WAS RAISED BY THE ASSESSING OFFICER AND REPLIES WERE SUBMITTED BY THE ASSESSEE AND ONLY BECAUSE THE ASSESSING OFFICER HAS REACHED TO A DIFFERENT CONCLU SION AND LEARNED CIT HAS DIFFERENT CONCLUSION, IT CANNOT BE SAID THAT TH E ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E AND THEREFORE, THE INVOCATION OF REVISIONARY POWER U/S 263 OF THE ACT BY LEARNED CIT IN THE PRESENT CASE IS NOT VALID AND JUSTIFIED. 5.1 THE ISSUE IN DISPUTE IN THE PRESENT CASE IS COV ERED BY THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT RENDERED IN THE CAS E OF CIT VS. KRISHNA CAPBOX (P.) LTD. AS REPORTED IN [2015] 372 ITR 310 (ALL) AND RELIANCE ON THIS JUDGMENT WAS PLACED BY LEARNED A. R. OF THE AS SESSEE AND THE COPY OF THIS JUDGMENT IS AVAILABLE ON PAGES 1 TO 4 OF TH E JUDGMENTS PAPER BOOK. IN THIS CASE ALSO, IT IS NOTED BY HON'BLE ALLAHABAD HIGH COURT THAT THE ASSESSING AUTHORITY MADE CERTAIN QUERIES, WHICH WER E REPLIED BY THE ASSESSEE AND AFTER INQUIRY, THE ASSESSING OFFICER B EING SATISFIED IN RESPECT OF THE QUERIES REPLIED BY THE ASSESSEE, ACCEPTED DE CLARED INCOME AND PASSED THE ASSESSMENT ORDER AND UNDER THESE FACTS, IT WAS HELD BY THE TRIBUNAL IN THAT CASE THAT ONCE ENQUIRY WAS MADE BY THE ASSESSING OFFICER THEN FOR THE REASON THAT THERE IS NO DISCUSSION OR NO MENTION THEREOF IN THE ASSESSMENT ORDER, IT CANNOT BE SAID THAT THE ASSESS ING OFFICER DID NOT APPLY HIS MIND OR THAT HE HAD NOT MADE ENQUIRY ON T HE SUBJECT AND THIS WOULD NOT JUSTIFY INTERFERENCE BY THE LEARNED CIT B Y ISSUING NOTICE U/S 263 OF THE ACT. HON'BLE HIGH COURT CONFIRMED THE TRIBUN AL ORDER IN THAT CASE. THE FACTS IN THE PRESENT CASE ARE SIMILAR BECAUSE I N THE PRESENT CASE ALSO, QUERIES WERE MADE BY THE ASSESSING OFFICER IN COURS E OF ASSESSMENT 5 PROCEEDINGS AND THE REPLIES WERE SUBMITTED BY THE A SSESSEE TO THE ASSESSING OFFICER AND THEREFORE, IN THE PRESENT CAS E ALSO, LEARNED CIT IS NOT JUSTIFIED IN ISSUING NOTICE U/S 263 OF THE ACT AND THEREFORE, THE ORDER PASSED BY LEARNED CIT U/S 263 DESERVES TO BE QUASHE D. WE HOLD ACCORDINGLY. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GAROD IA ) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED:24/02/2016 *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 AS STT. REGISTRAR