ITO, Ward-3(2), Hyderabad, Hyderabad V. Rawani Foods & Beverages Private Limited, Hyderabad, Hyderabad

ITA 378/HYD/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2608 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 02-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L R AMJI RAO
• Assessee Lawyers: K A SAI PRASAD
• Keywords: Business income; Period of limitation; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC - B BENCH : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT ITA.NO. 378/HYD/2017 ASSESSMENT YEAR 2004 - 2005 INCOME TAX OFFICER, WARD 3(2), HYDERABAD. VS. RAWANI FOOD & BEVERAGES PRIVATE LIMITED, SHOP NO.5, MJ ROAD, C/O. RAFIQ BROTHERS, NAMPALLY, HYDERABAD. PAN:AACCR 0907 L (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI K.A. SAI PRASAD FOR REVENUE : SHRI L RAMJI RAO, DR DATE OF HEARING : 21 .09.2017 DATE OF PRONOUNCEMENT : 21 .09.2017 ORDER PER D. MANMOHAN, VP. THIS IS AN APPEAL FILED AT THE INSTANCE OF ASSESSEE AND IT IS DIRECTED AGAINST ORDER PASSED BY LD. CIT(A) - 3, HYDERABAD. FOLLOWING GROUNDS WERE URGED BEFORE THE TRIBUNAL. 1. THE LD. CIT(A) ERRED BOTH IN LAW AND ON FACTS OF THE CASE. 2. THE LD. CIT(A) ERRED IN DELETING THE ESTIMATION MADE BY THE A.O. OF RS. 91,668/ - BEING 10% OF THE TOTAL SALES REPORTED BY THE ASSESSEE. 3. THE LD. CIT(A) ERRED IN HOLDING THAT THE INITIAL NOTICE U/S 143(2) WAS NOT SERVED ON THE ASSESSEE WITHIN THE TIME LIMIT PRESCRIBED, WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE NEVER PUT FORTH ANY OBJECTION BEFORE THE A.O. WITH REGARD TO THE SAME AND ALSONOT CONSIDERING THE FACT THAT THE NOTICE WAS ISSUED ON 28.10.2005. 4. THE LD . CIT(A) ERRED IN HOLDING THAT THE A.O. ERRED IN ESTIMATING THE INCOME NOT CONSIDERING THE FACT THAT THE ASSESSEE NEVER SUBMITTED ANY BOOKS OF ACCOUNT / BILLS / VOUCHERS IN SUPPORT OF THE CONTENTIONS OF THE ASSESSEE. 5. THE LD. CIT(A) ERRED IN NOT AFFORDING AN OPPORTUNITY TO THE A.O. TO REFUTE THE OBJECTIONS RAISED BY THE ASSESSEE. 2 2. ASSESSEE WAS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF MINERAL WATER. FOR THE YEAR UNDER CONSIDERATION IT DECLARED LOSS OF RS. 1.06 CRS ON 29.10.2004 WHICH WAS PROCES SED U/S 143(1) OF THE ACT ON 23.03.2005. THEREAFTER A NOTICE U/S 143(2) WAS STATED TO HA VE BEEN ISSUED ON 28.10.2005 , S INCE A NOTICE U/S 143(2) CAN BE ISSUED WITHIN ONE YEAR FROM THE END OF THE MONTH IN WHICH RETURN WAS FILED . I T MAY BE NOT IC ED THAT THE NOTICE WAS SERVED UPON THE ASSESSEE ON 10.11.2005 . BASED ON THE SAID NOTICE ASSESSMENT WAS COMPLETED ON A TOTAL INCOME OF RS. 91,670/ - . 3. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE RAISED A PRELIMINARY O B J E C T I O N THAT THE NOTICE SERVED UPON HIM ON 10.11.200 5 WAS BEYOND THE STATUTORY PERIOD OF LIMITATION AND HENCE THE ASSESSMENT MADE , BASED ON SUCH NOTICE , IS INVALID AND LIABLE TO BE QUASHED. GROUND NO.2 RAISED BEFORE THE LD. CIT(A) READS AS UNDER: - 2. THE NOTICE ISSUED U/S 143(2) OF THE INCOME TAX ACT, 1961, DATED 28.10.2005 SENT ON 8.11.2005 AND SERVED UPON THE APPELLANT ON 10.11.2005 SHOULD HAVE BEEN QUASHED BY THE LEARNED ASSESSING OFFICER BEING ILLEGAL, VOID - AB - INITIO, NOT MAINTAINABLE AND ISSUED BEYOND EXPIRY OF STATUTORY PERIOD. IT WAS ALSO CONTENDED THAT A.O. ERRED IN REJECTING THE ENTIRE LOSS OVERLOOKING THE FACT THAT ALL THE DETAILS CALLED FOR WERE PRODUCED. 4. IN THE WRITTEN SUBMISSIONS FILED BEFORE CIT(A), ASSESSEE RELIED UPON SEVERAL CASE LAW TO CONTEND THAT THE NOTICE ISSUED BY A.O. IS VOID AND CONSEQUENTLY ASSESSMENT COMPLETED BASED ON SUCH NOTICE WAS ALSO VOID. 5. LD. CIT(A) EXAMINED THE RECORD AS WELL AS RELEVANT PROVISIONS UNDER THE INCOME TAX ACT, 1961 AND OBSERVED THAT A NOTICE SHOULD BE ISSUED WITHIN 12 MONTHS FROM THE END OF THE MONTH IN WHICH RETURN IS FILED WHEREAS IN THE INSTANT CASE , THERE IS NO PROOF THAT THE NOTICE WAS SERVED ON TIME. HE HAD ALSO CONSIDERED THE MATTER ON MERITS AND FINALLY HELD THAT THE ORDER PASSED BY A.O. DESERVES TO BE SET ASIDE BOTH ON TECHNICAL GROUND S AS WELL AS ON MERITS. IN OTHERWORDS THE APPEAL FILED BY THE ASSESSEE WAS ALLOWED. 6. AGGRIEVED, REVENUE PREFERRED AN APPEAL BEFORE THE TRIBUNAL CONTENDING INTER - ALIA THAT THE NOTICE WAS ISSUED ON 28.10.2005. DURING THE COURSE OF HEARING LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE NOTICE WAS SENT BY REGISTERED POST ON 8.11.2005 WHICH WAS ULTIMATELY SERVED ON THE ASSESSEE ON 10.11.2005 ( P A G E 1 5 O F 3 P A P E R B O O K ) AND EVEN ON THAT PRELIMINARY GROUND THE ORDER PASSED BY A.O. CANNOT STAND. THUS HE STRONGLY RELIED UPON THE ORDER PAS SED BY LD. CIT(A). LD DR COULD NOT PLACE RELEVANT ASSESSMENT RECORD AND NOTICE TO CONTRADICT THE CLAIM OF ASSESSEE AS WELL AS FINDING OF LD. CIT(A). UNDER THESE CIRCUMSTANCES I DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY LD. CIT(A). AS DECLARED IN THE OPEN COURT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 1 S T SEPTEMBER, 2017 S D / - (D. MANMOHAN) VICE PRESIDENT HYDERABAD, DATED: 2 1 S T SEPTEMBER , 2017 OKK, SR.PS COPY TO 1. RAWANI FOOD & BEVERAGES PRIVATE LIMITED, SHOP NO.5, MJ ROAD, C/O. RAFIQ BROTHERS, NAMPALLY, HYDERABAD. 2. INCOME TAX OFFICER, WARD 3(2), O/O. 7 TH FLOOR, SIGNATURE TOWERS, KONDAPUR, HYDERABAD. 3. CIT(A) - 3 , HYDERABAD. 4. PR. CIT - 3 , HYDERABAD. 5. D.R. ITAT A B - SMC BENCH, HYDERABAD. 6. GUARD FILE