DIXIT RICE MILL , AURAIYA V. DCIT, BENGALURU

ITA 373/AGR/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9277 (ITAT-AGRA)
• Duration Of Justice: 1 year(s) 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Appeal Filed On: 15-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 147; 246; 132; 154; 143(1); 271D; 246A; 271B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH: AGRA BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND DR. MITHA LAL MEENA, ACCOUNTANT MEMBER I.T.A NO.373/AGRA/2018 (ASSESSMENT YEAR: 2016-17) M/S.DIXIT RICE MILL, BAHARPURA ROAD, NEVIL GANJ, ACHHALDA, DIST. AURAIYA PAN: AADFD9664Q (APPELLANT) VS. DEPUTY COMMISSIONER OF INCOME TAX (CPC), BENGALURU (RESPONDENT) APPELLANT BY NONE RESPONDENT BY SHRI WASEEM ARSHAD, SR. DR ORDER PER LALIET KUMAR, J.M.: THIS APPEAL OF ASSESSEE IS DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME TAX (APPEALS)-2, AGRA, DATED 28-02-2018, FOR THE AY.2016-17, ON THE FOLLOWING GROUNDS: 1. BECAUSE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE APPELLATE ORDER OF THE LD. CIT (A) DISMISSING THE APPEAL IS BAD IN LAW. INTIMATION U/S 143(1) IS AN APPEALABLE ORDER U/S 246A AND THE LD. CIT(A) OUGHT TO HAVE ADJUDICATED THE ISSUE ON MERITS. DATE OF HEARING 09-01-2020 DATE OF PRONOUNCEMENT 10-01-2020 I.T.A NO. 373/AGRA/2018 2 2. BECAUSE, THE DISALLOWANCE OF EXPENDITURES U/S 143(1) BY CPC IS A DEBATABLE ISSUE AND IS NOT A MISTAKE APPARENT FROM RECORD, WH ICH CANNOT BE RECTIFIED U /S 154. THE LD. CIT(A) HAS ERRED IN DIRECTING THE ASSE SSEE TO FILE ONLINE RECTIFICATION APPLICATION BEFORE THE CPC. 3 (I) BECAUSE THE CPC HAS ERRED IN LAW IN MAKING ADDITION ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE INDICATED IN THE AUDIT REPORT IN INTIMATION U/S 143(1). 3 (II) BECAUSE THE CPC HAS ACTED BEYOND ITS JUR ISDICTION IN MAKING DISALLOWANCE OF EXPENDITURE INDICATED IN THE AUDIT REPORT. ON TH E DATE ON WHICH SUCH INTIMATION HAS BEEN ISSUED BY THE CPC IT HAD NO JURISDICTION T O MAKE SUCH A PRIMA FACIE ADJUSTMENT U/S 143(1) AND HENCE SUCH INTIMATION U/S 143(1) BEING BAD IN LAW IS LIABLE TO BE QUASHED. 4. BECAUSE IN ANY VIEW OF THE MATTER, NO OPPORTUN ITY WAS PROVIDED TO THE ASSESSEE, BY THE CPC, BEFORE MAKING SUCH DISALLOWAN CE AND THEREFORE THE DISALLOWANCE BEING MADE IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE AND BAD IN LAW AND HENCE LIABLE TO BE DELETED. 5. BECAUSE THE ADDITIONAL GROUNDS OF APPEAL FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) HAVE NOT BEEN CONSIDERED BY THE LD. CIT(A). 6. BECAUSE ON FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) HAS ERRED IN NOT ALLOWING THE ASSESSEE A SUM OF RS. 20,73,725 /- PAID TO DAKSHNANCHAL VIDYUT VITRAN NIGAM LIMITED AGAINST ELECTRICITY EXPENSES P AID ON ACCOUNT OF GENUINE BUSINESS EXIGENCIES AND THERE BEING NO DOUBT REGARD ING THE GENUINESS OF THE PAYMENT, THE SAME OUGHT TO HAVE BEEN ALLOWED. THE A DDITION MADE IS LIABLE TO BE DELETED. 7. BECAUSE ON FACTS AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) HAS ERRED IN NOT ALLOWING A SUM OF RS. 24,057/- PAID TO KRISHI UTPAD AN MANDI SAMITI, ACHALDA, AMIYA AGAINST RENT PAID ON ACCOUNT OF GENUINE BUSIN ESS EXIGENCIES AND THERE BEING NO DOUBT REGARDING THE GENUINESS OF THE PAYME NT, THE SAME OUGHT TO HAVE BEEN ALLOWED. THE ADDITION MADE IS LIABLE TO BE DEL ETED. S 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. 3. AT THE OUTSET, LD.DR SUBMITTED THAT THE ASSESSEE WAS REQUIRED TO APPROACH CPC FOR RECTIFICATION AND ON FAILURE OF AS SESSEE GETTING ANY RELIEF , I.T.A NO. 373/AGRA/2018 3 THE ASSESSEE SHOULD FILE THE APPEAL BEFORE THE CIT( A) IN ACCORDANCE OF LAW. IT WAS ALSO SUBMITTED THAT THE ORDER OF THE LD.CIT( A) WAS IN ACCORDANCE WITH LAW AND OUR ATTENTION WAS DRAWN TO PARAS 5 & 6 OF T HE ORDER TO THE FOLLOWING EFFECT: 5. IT IS SEEN THAT THIS DEMAND HAS BEEN CREATED UN DER PROCESSING UNDER SECTION 143(1). IN THE INTIMATION SENT FROM CPC, INCOME TAX DEPARTMENT, BANGALORE IT IS SPECIFICALLY MENTIONED THAT IF THE ASSESSEE IS NOT SATISFIED WITH THE COMPUTATION OF INCOME, HE SHOULD FILE AN ONLINE RECTIFICATION APP LICATION FOR NECESSARY CORRECTION. HOWEVER, INSTEAD OF FILING A RECTIFICAT ION APPLICATION ASSESSEE HAS FILED THIS APPEAL BRINGING OUT FROM ITS DETAILED COMPUTAT ION AS HOW THE DISALLOWANCE OF RS.21,11,752/- HAS BEEN MADE INCLUDING DISALLOWANCE OF RS.24,057/- ON ACCOUNT OF PAYMENT OF SHOP RENT TO KRISHI UTPADAN MANDI SAMITI AND OF RS.20,72,735/- AGAINST ELECTRICITY BILL TO DAKSHINANCHAL VIDYUT VI TRAN NIGAM LTD. MADE BY CASH, AND A FURTHER AMOUNT OF RS. 13,970/- IS DISALLOWED UNDER SECTION 36. 6. IT IS SEEN THAT IN THE VARIOUS GROUNDS TAKEN BY THE ASSESSEE HE IS TRYING TO ARGUE CASE BY FILING EVIDENCES AS IS DONE DURING SCRUTINY ASSESSMENTS AND NOT U/S143(1) UNDER CENTRALIZED COMPUTERIZED PROCESSING. IN VIEW OF THE PROCEDURES THAT EXIST FOR COMPUTERIZED PROCESSING, ASSESSEE IS ADVISED TO FIR ST FILE A RECTIFICATION APPLICATION ONLINE AND CONTACT HIS JURISDICTIONAL AO FOR FOLLOW UP ONLY AFTER THE ONLINE RETURN GETS PUSHED TO AO FOR NECESSARY CORRECTIONS. 3.1. IT WAS ALSO SUBMITTED BY THE LD.DR THAT THE AP PEAL IS REQUIRED TO BE DISMISSED. 4. SINCE NONE APPEARED ON BEHALF OF THE ASSESSEE BE FORE US WE HAVE NOT TAKEN THIS CASE AS HEARD AND HENCE, WE WOULD BE DE CIDING THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD. I.T.A NO. 373/AGRA/2018 4 4.1. THE PROVISIONS OF SECTION 246 OF THE INCOME T AX ACT, PROVIDES AS UNDER: APPEALABLE ORDERS. 246. (1) SUBJECT TO THE PROVISIONS OF SUB-SECTION (2), ANY ASSESSEE AGGRIEVED BY ANY OF THE FOLLOWING ORDERS OF AN ASSESSING OFFICER (OTHER THAN THE DEPUTY COMMISSIONER) MAY APPEAL TO THE DEPUTY COMMISSIONER (APPEALS) BEFORE THE 1ST DAY OF JUNE, 2000 AGAINST SUCH ORDER (A) AN ORDER AGAINST THE ASSESSEE, WHERE THE ASSESSEE D ENIES HIS LIABILITY TO BE ASSESSED UNDER THIS ACT, OR AN INTIMATION UNDER SUB -SECTION (1) OR SUB- SECTION (1B) OF SECTION 143 , WHERE THE ASSESSEE OBJECTS TO THE MAKING OF ADJUSTMENTS, OR ANY ORDER OF ASSESSMENT UNDER SUB-S ECTION (3) OF SECTION 143 OR SECTION 144, WHERE THE ASSESSEE OBJECTS TO THE A MOUNT OF INCOME ASSESSED, OR TO THE AMOUNT OF TAX DETERMINED, OR TO THE AMOUN T OF LOSS COMPUTED, OR TO THE STATUS UNDER WHICH HE IS ASSESSED; (B) AN ORDER OF ASSESSMENT, REASSESSMENT OR RECOMP UTATION UNDER SECTION 147 OR SECTION 150; (C) AN ORDER UNDER SECTION 154 OR SECTION 155 HAVI NG THE EFFECT OF ENHANCING THE ASSESSMENT OR REDUCING A REFUND OR AN ORDER REFUSIN G TO ALLOW THE CLAIM MADE BY THE ASSESSEE UNDER EITHER OF THE SAID SECTI ONS; (D) AN ORDER MADE UNDER SECTION 163 TREATING THE A SSESSEE AS THE AGENT OF A NON- RESIDENT; (E) AN ORDER UNDER SUB-SECTION (2) OR SUB-SECTION (3) OF SECTION 170; (F) AN ORDER UNDER SECTION 171; (G) ANY ORDER UNDER CLAUSE (B) OF SUB-SECTION (1) OR UNDER SUB-SECTION (2) OR SUB-SECTION (3) OR SUB-SECTION (5) OF SECTION 185 I N RESPECT OF ANY ASSESSMENT FOR THE ASSESSMENT YEAR COMMENCING ON OR BEFORE THE 1ST DAY OF APRIL, 1992; (H) AN ORDER CANCELLING THE REGISTRATION OF A FIRM UNDER SUB-SECTION (1) OR UNDER SUB-SECTION (2) OF SECTION 186 IN RESPECT OF ANY AS SESSMENT FOR THE ASSESSMENT YEAR COMMENCING ON OR BEFORE THE 1ST DAY OF APRIL, 1992; (I) AN ORDER UNDER SECTION 201; (J) AN ORDER UNDER SECTION 216 IN RESPECT OF ANY A SSESSMENT FOR THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1988 OR AN Y EARLIER ASSESSMENT YEAR; (K) AN ORDER UNDER SECTION 237; I.T.A NO. 373/AGRA/2018 5 (L) AN ORDER IMPOSING A PENALTY UNDER (I) SECTION 221, OR (II) SECTION 271, SECTION 271A, SECTION 271B, SEC TION 272A, SECTION 272AA OR SECTION 272BB; (III) SECTION 272, SECTION 272B OR SECTION 273, AS THEY STOOD IMMEDIATELY BEFORE THE 1ST DAY OF APRIL, 1989, IN RESPECT OF AN Y ASSESSMENT FOR THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1988 OR ANY EARLIER ASSESSMENT YEARS. (1A) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECT ION (1), EVERY APPEAL FILED, ON OR AFTER THE 1ST DAY OF OCTOBER, 1998 BUT BEFORE TH E 1ST DAY OF JUNE, 2000, BEFORE THE DEPUTY COMMISSIONER (APPEALS) AND ANY MATTER AR ISING OUT OF OR CONNECTED WITH SUCH APPEAL AND WHICH IS SO PENDING SHALL STAN D TRANSFERRED TO THE COMMISSIONER (APPEALS) AND THE COMMISSIONER (APPEAL S) MAY PROCEED WITH SUCH APPEAL OR MATTER FROM THE STAGE AT WHICH IT WAS ON THAT DAY. (2) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTI ON (1), ANY ASSESSEE AGGRIEVED BY ANY OF THE FOLLOWING ORDERS (WHETHER MADE BEFORE OR AFTER THE APPOINTED DAY) MAY APPEAL TO THE COMMISSIONER (APPEALS) BEFORE THE 1ST DAY OF JUNE, 2000 AGAINST SUCH ORDER (A) AN INTIMATION OR ORDER SPECIFIED IN SUB-SECTIO N (1) WHERE SUCH INTIMATION IS SENT OR SUCH ORDER IS MADE BY THE DEPUTY COMMISSION ER IN EXERCISE OF THE POWERS OR FUNCTIONS CONFERRED ON OR ASSIGNED TO HIM UNDER SECTION 120 OR SECTION 124; (B) AN ORDER SPECIFIED IN CLAUSES (A) TO (E) (BOTH INCLUSIVE) AND CLAUSES (I) TO (L) (BOTH INCLUSIVE) OF SUB-SECTION (1) OR AN ORDER UND ER SECTION 104, AS IT STOOD IMMEDIATELY BEFORE THE 1ST DAY OF APRIL, 1988 IN RE SPECT OF ANY ASSESSMENT FOR THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY O F APRIL, 1987 OR ANY EARLIER ASSESSMENT YEAR MADE AGAINST THE ASSESSEE, BEING A COMPANY; (C) AN ORDER OF ASSESSMENT MADE AFTER THE 30TH DAY OF SEPTEMBER, 1984, ON THE BASIS OF THE DIRECTIONS ISSUED BY THE DEPUTY COMMIS SIONER UNDER SECTION 144A; (D) AN ORDER MADE BY THE DEPUTY COMMISSIONER UNDER SECTION 154; (DA) AN ORDER OF ASSESSMENT MADE BY AN ASSESSING OF FICER UNDER CLAUSE (C) OF SECTION 158BC, IN RESPECT OF SEARCH INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS REQUISITIONE D UNDER SECTION 132A, ON OR AFTER THE 1ST DAY OF JANUARY, 1997; (DB) AN ORDER IMPOSING A PENALTY UNDER SUB-SECTION (2) OF SECTION 158BFA; I.T.A NO. 373/AGRA/2018 6 (E) AN ORDER IMPOSING A PENALTY UNDER SECTION 271B OR SECTION 271BB; (EE) AN ORDER MADE BY A DEPUTY COMMISSIONER IMPOSIN G A PENALTY UNDER SECTION 271C, SECTION 271D OR SECTION 271E; (F) AN ORDER MADE BY A DEPUTY COMMISSIONER OR A DE PUTY DIRECTOR IMPOSING A PENALTY UNDER SECTION 272A; (FF) AN ORDER MADE BY A DEPUTY COMMISSIONER IMPOSI NG A PENALTY UNDER SECTION 272AA; (G) AN ORDER IMPOSING A PENALTY UNDER CHAPTER XXI BY THE INCOME-TAX OFFICER OR THE ASSISTANT COMMISSIONER WHERE SUCH PENALTY HAS B EEN IMPOSED WITH THE PREVIOUS APPROVAL OF THE DEPUTY COMMISSIONER UNDER SUB-SECTION (2) OF SECTION 274; (H) AN ORDER MADE BY AN ASSESSING OFFICER (OTHER TH AN DEPUTY COMMISSIONER) UNDER THE PROVISIONS OF THIS ACT IN THE CASE OF SUC H PERSON OR CLASSES OF PERSONS AS THE BOARD MAY, HAVING REGARD TO THE NATU RE OF THE CASES, THE COMPLEXITIES INVOLVED AND OTHER RELEVANT CONSIDERAT IONS, DIRECT. (3) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTI ON (1), THE BOARD OR THE PRINCIPAL DIRECTOR GENERAL OR DIRECTOR GENERAL, OR THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COM MISSIONER OR COMMISSIONER IF SO AUTHORISED BY THE BOARD, MAY, BY ORDER IN WRITING, TRANSFER ANY APPEAL WHICH IS PENDING BEFORE A DEPUTY COMMISS IONER (APPEALS) AND ANY MATTER ARISING OUT OF OR CONNECTED WITH SUCH APPEAL AND WHICH IS SO PENDING, TO THE COMMISSIONER (APPEALS) IF THE BOARD OR, AS THE CASE MAY BE, THE PRINCIPAL DIRECTOR GENERAL OR DIRECTOR GENERAL OR PRINCIPAL C HIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIO NER (AT THE REQUEST OF THE APPELLANT OR OTHERWISE) IS SATISFIED THAT IT IS NEC ESSARY OR EXPEDIENT SO TO DO HAVING REGARD TO THE NATURE OF THE CASE, THE COMPLEXITIES INVOLVED AND OTHER RELEVANT CONSIDERATIONS AND THE COMMISSIONER (APPEALS) MAY P ROCEED WITH SUCH APPEAL OR MATTER, FROM THE STAGE AT WHICH IT WAS BEFORE IT WA S SO TRANSFERRED: PROVIDED THAT THE APPELLANT MAY DEMAND THAT BEFORE PROCEEDI NG FURTHER WITH THE APPEAL OR MATTER, THE PREVIOUS PROCEEDING OR ANY PA RT THEREOF BE RE-OPENED OR THAT HE BE REHEARD. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) 'APPOINTED DAY' MEANS THE 10TH DAY OF JULY, 19 78, BEING THE DAY APPOINTED UNDER SECTION 39 OF THE FINANCE (NO. 2) ACT, 1977 ( 29 OF 1977); (B) 'STATUS' MEANS THE CATEGORY UNDER WHICH THE AS SESSEE IS ASSESSED AS 'INDIVIDUAL', 'HINDU UNDIVIDED FAMILY' AND SO ON. I.T.A NO. 373/AGRA/2018 7 4.2. FROM THE BARE PERUSAL OF THE SAID PROVISIONS O F THE ACT, IT IS ABUNDANTLY CLEAR THAT THE APPEAL LIES TO THE CIT(A) FROM AN ORDER PASSED / INITIATION GIVEN BY THE CPC U/S.143(1) & 143(1A) OF THE ACT IF THE ASSESSEE DENIES HIS LIABILITY PURSUANCE TO ORDER PASSED UNDE R SECTION 143(1) OF THE ACT. 4.3. LD.CIT(A) HAD WRONGLY MENTIONED IN THE ORDER R EPRODUCED HEREIN ABOVE THAT NO APPEAL LIES AGAINST THE INTIMATION IS SUED BY THE CPC UNDER SECTION 143( 1) OF THE ACT UNLESS THE ASSESSEE APPR OACHES THE CPC FOR RECTIFICATION. FROM THE PERUSAL OF THE PROVISION IS REPRODUCED HEREINABOVE IT IS ABUNDANTLY CLEAR THAT THERE IS NO REQUIREMENT IN LAW TO APPROACH TO THE CPC FOR RECTIFICATION OF THE ORDER, IF THE ASSESSEE IS AGGRIEVED BY THE ORDER AND DENIES HIS LIABILITY AS PER THE INTIMATION RECE IVED BY HIM UNDER SECTION 143 (1) OF THE ACT. 4.4. IN VIEW OF THE ABOVE, WE ARE OF THE OPINION TH AT THE MATTER IS REQUIRED TO REMAND BACK TO THE FILE OF CIT(A) FOR FRESH ADJU DICATION ON MERITS AS WE HOLD THAT THE APPEAL LIES BEFORE THE CIT(A) AGAINST THE ORDER PASSED U/S.143(1) OF THE ACT BY THE CPC. ADMITTEDLY THE A SSESSEE IS AFFECTED BY THE ORDER/INTIMATION OF THE CPC AS IS CLEAR FROM THE FA CTS OF PRESENT CASE. IN THE I.T.A NO. 373/AGRA/2018 8 LIGHT OF THE ABOVE, THE GROUNDS RAISED BY ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10-01-2020 SD/- SD/- (DR. M.L. MEENA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER TNMM COPY FORWARDED TO: 1. ASSESSEE 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT SR. PRIVATE SECRETARY ITAT AGRA