D.CI.T , CENTRAL CIRCLE - II, JALANDHAR V. SH. SUBASH GANDHI , JALANDHAR

ITA 408/ASR/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5728 (ITAT-AMRITSAR)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 20-02-2018
• Assessment Year: 2004-2005
• Appeal Filed On: 22-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S NEGI
• Keywords: Search and seizure; Opportunity of being heard; Competent authority
• Section: 153A; 147; 132; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER ITA NOS.408 TO 412/ASR/2017 ASSESSMENT YEARS : 2004-05 TO 2006-07, 2009-10 & 20 10-11 THE DCIT, CENTRAL CIRCLE-II, JALANDHAR. VS. SHRI SUBHASH GANDHI, PROP. KC. RESTAURANT & HOTEL, BANGA ROAD, NAWANSHAHAR. PAN: AFAPG0076R (APPELLANTS) (RESPONDENTS) ASSESSEE BY : NONE DEPARTMENT BY : SHRI S.S. NEGI DATE OF HEARING : 20.02.2018 DATE OF PRONOUNCEMENT : .02.2018 ORDER PER R.S. SYAL, VP: THESE FIVE APPEALS FILED BY THE REVENUE RELATE TO T HE ASSESSMENT YEARS 2004-05 TO 2006-07, 2009-10 & 2010-11. SINCE COMMON ISSUE IS ITA NOS.408 TO 412/ASR/2017 2 RAISED IN ALL THESE APPEALS, WE ARE, THEREFORE, PRO CEEDING TO DISPOSE THEM OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVE NIENCE. ASSESSMENT YEAR 2004-05 2. THE SOLITARY ISSUE RAISED THROUGH VARIOUS GROUND S IS AGAINST THE QUASHING OF ASSESSMENT ORDER BY THE LD. CIT(A) ON T HE GROUND THAT THE ORDER PASSED U/S 127 OF THE ACT TRANSFERRING THE JU RISDICTION OF THE ASSESSEE WAS NOT VALID. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PROPRIETOR OF M/S K.C. RESTAURANT & HOTEL ASSESSED UNDER THE REGULAR JURISDICTION OF ASSESSING OFFICER, NAWANSHAHAR. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT U/S 132 OF THE ACT AT THE PREMISES OF THE ASSESSEE ON 18.02.2010. PURSUANT TO SUCH SEARCH, T HE JURISDICTION OF THE ASSESSEE WAS TRANSFERRED UNDER THE PROVISIONS OF SE CTION 127 OF THE ACT TO CENTRAL CIRCLE-II, JALANDHAR, VIDE ORDER BY THE COMPETENT AUTHORITY DATED 09.08.2010. LATER ON, VIDE ORDER DATED 28.10 .2011, THE COMPETENT AUTHORITY RESTORED THE TRANSFER TO THE ITO, NAWANSH AHAR. HOWEVER, SUBSEQUENTLY, VIDE ORDER DATED 14.11.2011, THE JURI SDICTION WAS RE- ITA NOS.408 TO 412/ASR/2017 3 TRANSFERRED TO CENTRAL CIRCLE-II, JALANDHAR. ACCORD INGLY, THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS FRAMED BY ACIT //DCIT, CENTRAL CIRCLE-II, JALANDHAR AT A TOTAL INCOME OF RS.2,03,4 80/-, AGAINST THE INCOME RETURNED AT RS.1,00,406/-. THE ASSESSEE FIL ED APPEAL BEFORE THE LD. CIT(A) ARGUING THAT NO OPPORTUNITY WAS GRANTED BY THE COMPETENT AUTHORITY BEFORE THE TRANSFER OF THE JURISDICTION T O CENTRAL CIRCLE-II, JALANDHAR. THE LD. CIT(A) AGREED WITH THE ASSESSEE S CONTENTION AND SET ASIDE THE ASSESSMENT ORDER ON THE GROUND THAT T HE ORDER OF TRANSFER OF THE JURISDICTION OF THE CASE PASSED U/S 127 OF THE ACT WAS INVALID. THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEV ANT MATERIAL ON RECORD. THERE IS NO APPEARANCE FROM THE SIDE OF TH E ASSESSEE DESPITE NOTICE. NO PLAUSIBLE REASONS HAVE BEEN GIVEN IN TH E REQUEST FOR ADJOURNMENT, WHICH HAS BEEN REJECTED. IT IS OBSERVE D THAT THE LD. CIT(A) HAS QUASHED THE ASSESSMENT ON THE GROUND THAT NO VA LID ORDER WAS PASSED U/S 127 OF THE ACT BY THE COMPETENT AUTHORITY. IN THIS REGARD, IT IS RELEVANT TO NOTE THAT SECTION 127 DEALING WITH POWE R TO TRANSFER CASES ITA NOS.408 TO 412/ASR/2017 4 PROVIDES THROUGH SUB-SECTION (1) THAT : `THE DIRECT OR GENERAL OR CHIEF COMMISSIONER OR COMMISSIONER MAY, AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD IN THE MATTER , WHEREVER IT IS POSSIBLE TO DO SO, AND AFTER RECORDING HIS REASONS FOR DOING SO, TRANSFER ANY CASE FROM ONE OR MORE ASSESSING OFFICERS SUBORD INATE TO HIM (WHETHER WITH OR WITHOUT CONCURRENT JURISDICTION) T O ANY OTHER ASSESSING OFFICER OR ASSESSING OFFICERS (WHETHER WITH OR WITH OUT CONCURRENT JURISDICTION) ALSO SUBORDINATE TO HIM. THUS IT IS EVIDENT THAT THE POWER TO TRANSFER CASE LIES WITH THE DIRECTOR GENERAL OR CH IEF COMMISSIONER OR COMMISSIONER. 5. IT IS ELEMENTARY THAT AN AUTHORITY CAN EXERCISE ONLY SUCH POWERS AS VEST IN IT. SECTION 246A DEALS WITH THE POWERS OF T HE CIT(A). CHAPTER XX OF THE INCOME-TAX ACT, 1961 DEALS WITH : `APPEAL S TO THE DEPUTY COMMISSIONER (APPEALS) AND COMMISSIONER (APPEALS). SECTION 246A REFERS TO THE APPEALABLE ORDERS BEFORE THE COMMISSI ONER (APPEALS). THE CIT(A) CAN EXERCISE ITS POWER ONLY IN RESPECT OF SU CH ORDERS AS ARE LISTED IN THIS SECTION. SUB-SECTION (1) DEALING WITH THE O RDERS WHICH CAN BE APPEALED BEFORE THE CIT(A), RUNS AS UNDER : - ITA NOS.408 TO 412/ASR/2017 5 `(1) ANY ASSESSEE OR ANY DEDUCTOR OR ANY COLLECTOR AGGRIEVED BY ANY OF THE FOLLOWING ORDERS (WHETHER MADE BEFORE OR AFTER THE APPOINTED DAY) MAY APPEAL TO THE COMMISSIONER (APPEALS) AGAINST (A) AN ORDER PASSED BY A JOINT COMMISSIONER UNDER C LAUSE (II) OF SUB- SECTION (3) OF SECTION 115VP OR AN ORDER AGAINST TH E ASSESSEE WHERE THE ASSESSEE DENIES HIS LIABILITY TO BE ASSESSED UNDER THIS ACT OR AN INTIMATION UNDER SUB-SECTION (1) OR SUB-SECTION (1B ) OF SECTION 143 OR SUB-SECTION (1) OF SECTION 200A OR SUB-SECTION (1) OF SECTION 206CB, WHERE THE ASSESSEE OR THE DEDUCTOR OR THE COLLECTOR OBJECTS TO THE MAKING OF ADJUSTMENTS, OR ANY ORDER OF ASSESSMENT UNDER SU B-SECTION (3) OF SECTION 143 [EXCEPT AN ORDER PASSED IN PURSUANCE OF DIRECTIONS OF THE DISPUTE RESOLUTION PANEL OR AN ORDER REFERRED TO IN SUB-SECTION (12) OF SECTION 144BA OR SECTION 144, TO THE INCOME ASSESSE D, OR TO THE AMOUNT OF TAX DETERMINED, OR TO THE AMOUNT OF LOSS COMPUTE D, OR TO THE STATUS UNDER WHICH HE IS ASSESSED; (AA) AN ORDER OF ASSESSMENT UNDER SUB-SECTION (3) O F SECTION 115WE OR SECTION 115WF, WHERE THE ASSESSEE, BEING AN EMPLOYE R OBJECTS TO THE VALUE OF FRINGE BENEFITS ASSESSED; (AB) AN ORDER OF ASSESSMENT OR REASSESSMENT UNDER S ECTION 115WG; (B) AN ORDER OF ASSESSMENT, REASSESSMENT OR RECOMPU TATION UNDER SECTION 147 [EXCEPT AN ORDER PASSED IN PURSUANCE OF DIRECTI ONS OF THE DISPUTE RESOLUTION PANEL OR AN ORDER REFERRED TO IN SUB-SEC TION (12) OF SECTION 144BA]] OR SECTION 150; (BA) AN ORDER OF ASSESSMENT OR REASSESSMENT UNDER S ECTION 153A [EXCEPT AN ORDER PASSED IN PURSUANCE OF DIRECTIONS OF THE D ISPUTE RESOLUTION PANEL OR AN ORDER REFERRED TO IN SUB-SECTION (12) O F SECTION 144BA; (BB) AN ORDER OF ASSESSMENT OR REASSESSMENT UNDER S UB-SECTION (3) OF SECTION 92CD; (C) AN ORDER MADE UNDER SECTION 154 OR SECTION 155 HAVING THE EFFECT OF ENHANCING THE ASSESSMENT OR REDUCING A REFUND OR AN ORDER REFUSING TO ALLOW THE CLAIM MADE BY THE ASSESSEE UNDER EITHER O F THE SAID SECTIONS EXCEPT AN ORDER REFERRED TO IN SUB-SECTION (12) OF SECTION 144BA; ITA NOS.408 TO 412/ASR/2017 6 (D) AN ORDER MADE UNDER SECTION 163 TREATING THE AS SESSEE AS THE AGENT OF A NON-RESIDENT; (E) AN ORDER MADE UNDER SUB-SECTION (2) OR SUB-SECT ION (3) OF SECTION 170; (F) AN ORDER MADE UNDER SECTION 171; (G) AN ORDER MADE UNDER CLAUSE (B) OF SUB-SECTION ( 1) OR UNDER SUB- SECTION (2) OR SUB-SECTION (3) OR SUB-SECTION (5) O F SECTION 185 IN RESPECT OF AN 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 ASSESSMENT FOR THE ASSESSMENT YEAR COMMENCING ON OR BEFORE THE 1ST DAY OF APRIL, 1992 OR ANY EARLIER ASSESSMENT YEAR; (HA) AN ORDER MADE UNDER SECTION 201; (HB) AN ORDER MADE UNDER SUB-SECTION (6A) OF SECTIO N 206C; (I) AN ORDER MADE UNDER SECTION 237; (J) AN ORDER IMPOSING A PENALTY UNDER (A) SECTION 221; OR (B) SECTION 271, SECTION 271A, SECTION 271AAA, SECT ION 271AAB, SECTION 271F, SECTION 271FB, SECTION 272AA OR SECTI ON 272BB; (C) SECTION 272, SECTION 272B OR SECTION 273, AS TH EY STOOD IMMEDIATELY BEFORE THE 1ST DAY OF APRIL, 1989, IN RESPECT OF AN ASSESSMENT FOR THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1988, OR ANY EARLIER ASSESSMENT YEARS; (JA) AN ORDER OF IMPOSING OR ENHANCING PENALTY UNDE R SUB-SECTION (1A) OF SECTION 275; (K) AN ORDER OF ASSESSMENT MADE BY AN ASSESSING OFF ICER UNDER CLAUSE (C) OF SECTION 158BC, IN RESPECT OF SEARCH INITIATE D UNDER SECTION 132 OR ITA NOS.408 TO 412/ASR/2017 7 BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS REQ UISITIONED UNDER SECTION 132A ON OR AFTER THE 1ST DAY OF JANUARY, 19 97; (L) AN ORDER IMPOSING A PENALTY UNDER SUB-SECTION ( 2) OF SECTION 158BFA; (M) AN ORDER IMPOSING A PENALTY UNDER SECTION 271B OR SECTION 271BB; (N) AN ORDER MADE BY A DEPUTY COMMISSIONER IMPOSING A PENALTY UNDER SECTION 271C, SECTION 271CA, SECTION 271D OR SECTIO N 271E; (O) AN ORDER MADE BY A DEPUTY COMMISSIONER OR A DEP UTY DIRECTOR IMPOSING A PENALTY UNDER SECTION 272A; (P) AN ORDER MADE BY A DEPUTY COMMISSIONER IMPOSING A PENALTY UNDER SECTION 272AA; (Q) AN ORDER IMPOSING A PENALTY UNDER CHAPTER XXI; (R) AN ORDER MADE BY AN ASSESSING OFFICER OTHER THA N A DEPUTY COMMISSIONER UNDER THE PROVISIONS OF THIS ACT IN TH E CASE OF SUCH PERSON OR CLASS OF PERSONS, AS THE BOARD MAY, HAVIN G REGARD TO THE NATURE OF THE CASES, THE COMPLEXITIES INVOLVED AND OTHER RELEVANT CONSIDERATIONS, DIRECT. 6. A CAREFUL PERUSAL OF THE ABOVE PROVISION INDICATES THAT AN ORDER PASSED U/S 127 OF THE ACT IS NOT APPEALABLE BEFORE THE LD. CIT(A). SINCE THE FIRST APPELLATE AUTHORITY HAS NO JURISDICTION TO DECIDE THE VALIDITY OR OTHERWISE OF AN ORDER PASSED U/S 127, TRANSFERRING THE JURISDICTION FROM ONE ASSESSING OFFICER TO ANOTHER, IT IS, BUT, NATUR AL THAT HE CANNOT DECLARE ANY ORDER PASSED U/S 127 AS INVALID AND CONSEQUENTL Y SET ASIDE THE ASSESSMENT ORDER. ADVERTING TO THE FACTS OF THE IN STANT CASE, IT IS ITA NOS.408 TO 412/ASR/2017 8 OBSERVED THAT THE LD. CIT(A) CROSSED HIS JURISDICTI ON IN DECLARING THE ORDER U/S 127 OF THE ACT AS INVALID AND AS A FORTIO RI, QUASHING THE ASSESSMENT. THE IMPUGNED ORDER IS, THEREFORE, OVERT URNED AND THE MATTER IS RESTORED TO THE FILE OF LD. CIT(A) FOR DECIDING THE APPEAL ON MERITS, AFTER ALLOWING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. ASSESSMENT YEARS 2005-06, 2006-07, 2009-10 & 2010-1 1 7. THE FACTS AND CIRCUMSTANCES OF THESE FOUR APPEAL S ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF THE ASSESSMENT YEAR 2004-05. IN FACT, THE ORDER FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07 WAS PASSED BY THE LD. CIT(A) IN A COMBINED MANNER WITH THE ORDER FOR THE A.Y. 2004-05, WHICH WE HAVE DISCUSSED EARLIER. FOR THE ASSESSMEN T YEARS 2009-10 AND 2010-11, THE PROCEEDINGS WERE INITIATED PURSUAN T TO REOPENING AND THE ASSESSMENTS WERE FRAMED U/S 153A READ WITH SECT ION 147/148 OF THE ACT. IN ALL THE FOUR YEARS UNDER CONSIDERATION, TH E LD. CIT(A) HAS SET ASIDE THE ASSESSMENT ORDERS ON THE GROUND THAT NO V ALID ORDER U/S 127 OF THE ACT WAS PASSED TRANSFERRING THE JURISDICTION. FOLLOWING THE VIEW TAKEN HEREINABOVE, FOR THE ASSESSMENT YEAR 2004-05, WE SET ASIDE THE ITA NOS.408 TO 412/ASR/2017 9 IMPUGNED ORDERS AND REMIT THE MATTER TO THE FILE OF LD. CIT(A) FOR DISPOSING OF THESE APPEALS AFRESH ON MERITS, AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, ALL THE APPEALS ARE ALLOWED FOR S TATISTICAL PURPOSES. THE ORDER PRONOUNCED IN THE OPEN COURT ON 21.02.201 8. SD/- SD//- [N.K. CHOUDHRY] [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT DATED, 21 ST FEBRUARY, 2018. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, AMRITSAR.