Krishna Kumar Goenka (AOP), Kanpur V. ITO, Kanpur

ITA 420/LKW/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75150 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-01-2014
• Assessment Year: 1986-1987
• Appeal Filed On: 06-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: S K GARG SHRI P K KAPOOR
• Keywords: Opportunity of being heard; Principle of natural justice; Period of limitation; Time period of passing order
• Section: 154

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.420/LKW/11 A.Y.:86 - 87 SHRI K. K. GOENKA (AOP), 316 ANANDPURI, KANPUR. VS. INCOME TAX OFFICER, WARD - 3(2), KANPUR. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. K. GARG, ADVOCATE SHRI P. K. KAPOOR, C.A. RESPONDENT BY SHRI ALOK MITRA, D.R. DATE OF HEARING 29/01/2014 DATE OF PRONOUNCEMENT 0 7 /02/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)II, KANPUR DATED 18/03/2011 PASSED BY HIM IN THE PROCEEDINGS INITIATED BY THE ASSESSING OFFICER AS PER HIS ORDER PASSED U/S 154 ON 14/02/2006. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. BECAUSE THE 'CIT(A)' HAS ERRED IN HOLDING THAT THERE WAS NO AMBIGUITY / ILLEGALITY IN THE ORDER DATED 1.11.2004 PASSED BY THE ASSESSING OFFICER, TO GIVE EFFECT TO THE ORDER DATED 22.6.2000 PASSED BY THE HON'BLE ITAT IN I TA NO.2570/ALLD/2000, AS NO APPEAL AS SUCH HAS BEEN FILED AGAINST THE SAID ORDER (DATED 1 . 11.2004). 2. BECAUSE THE SAID ORDER DATED 1.11.2004 WAS ERRONEOUS AT THE VERY FACE OF IT AS (A) THE SAME HAD BEEN PASSED BEYOND THE LIMITATION PERIOD PRESCRIBED UNDER SEC TION 153(2) OF THE 'ACT'; AND (B) THE APPELLANT'S PLEA FOR CANCELLATION OF THE SAME UNDER SECTION 154 WAS WELL FOUNDED AND BEYOND ANY DISPUTE OR DEBATE. 2 AND ACCORDINGLY, THE SAID ORDER DATED 1.11.2004 WAS LIABLE TO BE HELD AS UNENFORCEABLE IN THE EYES OF LAW, AS PER THE CONTENTIONS RAISED IN THE PETITION FILED BY THE 'APPELLANT' FOR RECTIFICATION OF THE SAME (ORDER DATED 01.11.2004). 3. BECAUSE IN ANY CASE THE 'CIT(A)', ON A DUE CONSIDERATION OF THE FACTS AND CIRCUMSTANCE OF THE CASE, PARTICULARLY THAT; (A) THE AOP BY THE NAME OF 'K.K. GOENKA (AOP)' CEASED TO EXIST ON 1.11.2004, WHICH IS THE DATE ON WHICH AN ORDER HAD BEEN PASSED PURPORTED TO GIVE EFFECT TO THE ORDER DATE 22.6.2000 PASSED BY THE HON'BLE ITAT IN IT A NO.2570/ALLD/2000; (B) THE ORDER SO PASSED AND THE ACCOMPANYING NOTICE OF DEMAND, IN ORDER TO BE VALID AND ENFORCEABLE IN THE EYES OF LAW, SHOULD HAVE BEEN ADDRESSED TO AND ISSUED IN THE NAMES OF ALL THE INDIVIDUAL MEMBERS OF ERSTWHILE AOP AND THE SAME WERE FURTHER REQUIRED TO BE SERVED ALSO AN EACH INDIV IDUAL MEMBER; AND (C) SAID PRE - REQUISITES OF LAW HAD REMAINED UNCOMPLIED WITH; SHOULD HAVE ACCEPTED THE APPELLANT'S PLEA THAT WHOLE OF THE ORDER WAS UNENFORCEABLE IN THE EYES OF LAW. WITHOUT PREJUDICE TO THE AFORESAID 4. BECAUSE THE DEMAND THAT HAS BEEN RAISED IN PURSUANCE OF ASSESSMENT ORDER DATED 27.3.1991 STOOD CANCELLED AS A WHOLE IN TERMS OF APPELLATE ORDER DATED 30.9.1992 AND ON REVERSAL OF THE SAID ORDER (PASSED BY THE ID. FIRST APPELLATE AUTHORITY) BY THE HON'BLE ITAT VIDE ITS ORDER DATED 22.6.2000, LEVY OF INTEREST UNDER SECTION 220(2) COULD NOT HAVE BEEN IMPOSED ON THE BASIS OF DEMAND THAT HAD REMAINED UNPAID, AS PER THE ASSESSMENT ORDER DATED 27.03.1991. 5. BECAUSE THE 'APPELLANT'S' CASE WAS FULLY COVERED BY THE PRINCIPLE LAID DOWN BY T HE HON'BLE APEX COURT IN THE CASE OF VIKRANT TYRES LIMITED VS. ITO REPORTED IN (2001) 247 ITR 821, AS FOLLOWED (UNDER THE SIMILAR CIRCUMSTANCES AS THAT OF THE 'APPELLANT') AND EXPLAINED, IN VARIOUS JUDICIAL PRONOUNCEMENTS AND THE 'CIT(A)' HAS ERRED IN LAW AND ON FACTS IN TAKING A VIEW 3 TO THE CONTRARY AND IN DISMISSING THE APPEAL FILED BY THE 'APPELLANT'. 6. BECAUSE LEVY OF INTEREST UNDER SECTION 139(8) AND SECTION 215 OF THE 'ACT' WAS ALSO ILLEGAL AS, NO OPPORTUNITY OF BEING HEARD WAS GIVEN TO THE 'APPELLA NT', BEFORE LEVY OF THE SAME. 7. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 3. LEARNED AR OF THE ASSESSEE MADE ARGUMENTS ONLY REGARDING INTEREST CHARGED U/S 220 (2) AS PER GROUND NO. 4 AND AFTER GOING THROUGH THE ORDERS OF THE AUTHORITIES BELOW, WE DO NOT FIND ANY MERIT IN THE REMAINING GROUNDS AND THEREFORE, THE SAME ARE REJECTED. FOR GROUND NO. 4, I T WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE BEFORE US THAT INTEREST U/S 220(2) SHOULD NOT BE CHARGED FROM THE DATE OF THE ORIGINAL ORDER BUT IT SHOULD BE CHARGED FROM THE DATE OF ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER ON 01/11/2004 U/S 143/14 7/254/251 OF THE ACT. IN SUPPORT OF HIS CONTENTION, HE PLACED RELIANCE ON THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF VIKRANT TYRES LTD. VS FIRST INCOME - TAX OFFICER [2001] 247 ITR 821 (SC) . 4. HE ALSO PLACED RELIANCE ON THE TRIBUNAL ORDER RENDERED IN THE CASE OF U.P. FOREST CORPORATION VS. ITO, (2008) 12 MTC 783. COPY OF THIS ORDER OF THE TRIBUNAL WAS FILED BUT OUR ATTENTION WAS DRAWN TO ONLY TWO CLAUSES I.E. (VI) AND (VII) OF PARA 37 OF THIS TRIBUNAL ORDER. THESE TWO CLAUSES ARE REPRODUCED AS UNDER: - (VI) SIMILARLY SUCH NOTICE OF DEMAND DOES NOT SURVIVE AFTER THE DEMAND IS TAKEN TO NIL BY THE ASSESSING OFFICER IN THE DEPARTMENTAL REGISTERS IN ORDER TO GIVE EFFECT TO AN APPELLATE ORDER AND A CONSEQUENT IAL DEMAND NOTICE OF NIL DEMAND IS ISSUED TO THE ASSESSEE. (VII) NOR CAN SUCH A NOTICE OF DEMAND BE RESURRECTED THEREAFTER, .E.G. AS IN THIS CASE, WHEN THE TRIBUNAL, ON THE BASIS OF DECISION HON'BLE SUPREME COURT, RESTORED THE ASSESSMENT ORDER AFTER IT HA D BEEN SET ASIDE ON APPEAL BY THE APPELLATE 4 AUTHORITY ON THE BASIS OF THE DECISION OF THE HON'BLE HIGH COURT IN FAVOUR OF THE ASSESSEE. 5. LEARNED D.R. OF THE REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMI SSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND THE JUDGMENT S CITED BY THE . FIRST OF ALL , WE CONSIDER THE APPLICABILITY OF THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF VIKRANT TYRES LTD. V S FIRST INCOME - TAX OFFICER (SUPRA). IN THAT CASE, IT IS NOTED THAT THE CONDITION PRECEDENT U/S 220(2) WAS THAT THERE SHOULD BE DEMAND NOTICE AND THERE SHOULD BE A DEFAULT IN PAYING THE AMOUNT SO DEMANDED WITHIN THE TIME STIPULATED IN THE NOTICE. IN THAT CASE , T HE ASSESSEE SATISFIED THE DEMANDS UNDER THE NOTICES ISSUED UNDER SECTION 156 AND NOTHING WAS DUE PURSUANT TO THE NOTICES OF DEMAND. UNDER THESE FACTS, IT WAS HELD THAT ORIGINAL NOTICE OF DEMAND DOES NOT SURVIVE. IN THE PRESENT CASE, THE FACTS ARE DIFFERENT. IN THE PRESENT CASE, THE DEMAND WAS NOT PAID BY THE ASSESSEE AS PER THE TIME ALLOWED IN THE NOTICE AND THEREFORE, THIS JUDGMENT IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. A CLEAR FINDING IS GIVEN BY LEARNED CIT(A) THAT THE ASSESSEE WAS LIABLE TO PAY REGULAR DEMAND RAISED BY THE ASSES SING OFFICER IN HIS ORIGINAL ASSESSMENT ORDER AND IT GOT REDUCED BY THE I.T.A.T. AND SINCE IT WAS NOT PAID THEN, THE INTEREST U/S 220(2) WAS PAYABLE FROM THE DAY IT BECAME DUE. WE ALSO FIND THAT AS PER THE PROVISIONS, THE AMOUNT WILL GET REDUCED DEPENDING UPON THE FINAL QUANTIFICATION BUT THE PERIOD WILL BE FROM THE ORIGINAL DATE OF DEMAND NOTICE. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE. 7. NOW, WE EXAMINE THE APPLICABILITY OF THE TWO CLAUSES OF PARA 37 O F THE TRIBUNAL ORDER CITED BY THE LEARNED AR, WHICH ARE REPRODUCED ABOVE. NO EVIDENCE IS FURNISHED BEFORE US THAT THE DEMAND WAS TAKEN TO NIL BY THE A.O. 5 BY SHOWING THE COPY OF CONSEQUENTIAL DEMAND NOTICE ISSUED BY THE A.O. AS NOTED IN CLAUSE (VI) OF THAT TRIBUNAL ORDER REPRODUCED ABOVE AND HENCE, THIS CLAUSE IS NOT APPLICABLE IN THE PRESENT CASE. AS PER CLAUSE (VII) REPRODUCED ABOVE, IF THE ASSESSMENT ORDER IS SET ASIDE BY THE APPELLATE AUTHORITY AND THE SAME IS RESTORED BY THE TRIBUNAL ON THE BASIS OF THE DECISION OF HONBLE SUPREME COURT, THE DEMAND NOTICE CANNOT BE RESURRECTED. IN THE PRESENT CASE, IT IS SUBMITTED BY THE LEARNED AR IN LETTER DATED 30.01.2014 THAT THE DEMAND WAS REDUCED TO NIL OWING TO APPELLATE ORDER DATED 30.09.1992 AS PER WHICH THE ASS ESSMENT WAS ANNULLED BUT THE SAME WAS RESTORED BY THE TRIBUNAL ON APPEAL OF THE REVENUE AS PER ORDER DATED 22.06.2000 AND THIS IS NOT A FACT OF THE PRESENT CASE THAT TRIBUNAL AS WELL AS HONBLE HIGH COURT ALSO UPHELD THE ORDER OF LEARNED CIT (A) AND THE S AME WAS RESTORED BY THE TRIBUNAL ON THE BASIS OF THE DECISION OF HONBLE APEX COURT AS IN THAT CASE. HENCE, THIS TRIBUNAL ORDER IS ALSO NOT RENDERING ANY HELP TO THE ASSESSEE IN THE FACTS OF THE PRESENT CASE. THIS GROUND IS ALSO REJECTED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS DISMISSED. (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: 0 7 / 0 2 /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