M/s. Sri Bhavani Amman Finance, Salem V. ITO, Erode

ITA 423/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0870 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-02-2013
• Assessment Year: 1997-1998
• Appeal Filed On: 28-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GURU BASHYAM IRS
• Assessee Lawyers: T S LAKSHMIVENKATARAMAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI V.DURGA RAO, JUDICIAL MEMBER I.T.A.NOS. 423 & 424/MDS/2012 ASSESSMENT YEARS : 1997-98 AND 1998-99 M/S. SRI BHAVANI AMMAN FINANCE, 230/12, MAIN ROAD, VANNIYAR MADAM, BHAVANI. PAN ABAFS0271N VS. THE INCOME-TAX OFFICER WARD II(2), ERODE. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.S.LAKSHMI VENKA TARAMAN, CA RESPONDENT BY : SHRI GURU BASHYAM, IR S, JCIT DATE OF HEARING : 21 ST FEBRUARY, 2013 DATE OF PRONOUNCEMENT : 22 ND FEBRUARY, 2013 O R D E R PER DR. O.K. NARAYANAN, VICE-PRESIDENT THESE APPEALS ARE FILED BY THE ASSESSEE. THE RELEV ANT ASSESSMENT YEARS ARE 1997-98 AND 1998-99. THESE A PPEALS ARE DIRECTED AGAINST THE COMMON ORDER OF THE COMMISSION ER OF INCOME-TAX(APPEALS)-I AT COIMBATORE, DATED 22.12.20 11. THE ITA 423 & 424/12 :- 2 -: APPEALS ARISE OUT OF THE ASSESSMENTS COMPLETED UNDE R SEC.143(3), READ WITH SEC.254 OF THE INCOME-TAX ACT , 1961. 2. FOR BOTH THE ASSESSMENT YEARS, THE COMMON GROUND RAISED BY THE ASSESSEE IS THAT THE COMMISSIONER OF INCOME- TAX(APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE ASSESSEE AS AN ASSOCIATION OF PERSONS (AOP) INSTEAD OF THE STATUS OF A FIRM, CLAIMED BY THE A SSESSEE. 3. WE HEARD BOTH THE SIDES IN DETAIL. 4. THE FIRST ASSESSMENT YEAR IN THE CASE OF THE ASS ESSEE WAS 1995-96. THE ASSESSEE HAD FILED RETURNS FOR THE AS SESSMENT YEARS 1995-96 AND 1996-97 AND THESE RETURNS WERE PR OCESSED UNDER SEC.143(1). THE ASSESSEE HAD CLAIMED THE STA TUS OF FIRM FOR THE ABOVE TWO ASSESSMENT YEARS. SINCE THE ASSE SSMENTS WERE COMPLETED UNDER SEC.143(1), THE STATUS OF FIR M WAS LEFT UNDISTURBED. 5. BUT, AS FAR AS THE PRESENT ASSESSMENT YEARS 1997 -98 AND 1998-99 ARE CONCERNED, THE ASSESSING OFFICER HELD T HAT THE ASSESSEE IS NOT A FIRM BUT ONLY AN AOP. HE COM PLETED THE ASSESSMENTS ACCORDINGLY. IN FIRST APPEALS, THE STA TUS OF AOP ITA 423 & 424/12 :- 3 -: HAS BEEN CONFIRMED BY THE COMMISSIONER OF INCOME- TAX(APPEALS). 6. IN THE COURSE OF HEARING, ONE OF THE MOST FERVEN T ARGUMENTS ADVANCED BY THE LEARNED CHARTERED ACCOUNTANT APPEAR ING FOR THE ASSESSEE WAS THAT THE COMMISSIONER OF INCOME-TAX(AP PEALS) HAS ACCEPTED THE STATUS OF THE ASSESSEE AS A FIRM FOR THE SUBSEQUENT YEARS 1999-2000, 2000-01 AND 2001-02 AND THEREFORE, AS A MATTER OF CONSISTENCY, THERE IS NO REASON TO TREAT THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEARS AS AOP. 7. WE PERUSED A COPY OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX(APPEALS) AT COIMBATORE F OR THE SUBSEQUENT YEARS 1999-2000, 2000-01 AND 2001-02 DAT ED 22.12.2011. WE FIND FROM PARAGRAPH 10 OF THE COMMO N ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX(APPEALS) T HAT HE HAS COME TO THE CONCLUSION THAT THE STATUS OF THE ASSES SEE SHOULD BE TREATED AS FIRM, NOT AFTER EXAMINING THE MERITS O F THE CASE IN ITS SUBSTANTIVE SENSE, BUT ONLY ON THE BASIS OF CERTAIN OBSERVATION MADE ON PROCEDURAL MATTERS. THE COMMISSIONER OF IN COME- TAX(APPEALS) HAS OBSERVED THAT IN THE NOTICES ISSU ED UNDER SEC.148 FOR THE ASSESSMENT YEARS 1999-2000 AND 2000 -01, THE ITA 423 & 424/12 :- 4 -: STATUS OF THE ASSESSEE HAS BEEN SHOWN AS FIRM. H E ALSO STATED THAT PAN WAS OBTAINED BY THE ASSESSEE IN THE STATUS OF FIRM. THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS ALSO PO INTED OUT THAT IN VARIOUS NOTICES ISSUED BY THE ASSESSING OFF ICER, THE PRESCRIBED FORM RELATED TO FIRM. IT IS IN THESE CIRCUMSTANCES, THAT HE HAS HELD THAT THE ASSESSEE MUST BE ASSESSED IN T HE STATUS OF FIRM. 8. BUT, WE THINK THAT ALL THE ABOVE OMISSIONS AND M ISTAKES ARE COVERED BY SEC.292 B OF THE ACT AND THESE SUPERFLUO US POINTS CANNOT DECIDE THE QUESTION OF STATUS OF THE ASSESSE E. THE STATUS OF AN ASSESSEE IS A SUBSTANTIAL QUESTION. I T MUST BE ANSWERED AFTER EXAMINING ALL THE RELEVANT FACTS AND LAWS RELATING TO THE SAME. 9. IN THE PRESENT CASE, THE FIRST ASSESSMENT YEAR O F THE ASSESSEE WAS 1995-96. IT WAS THE DUTY OF THE ASSE SSEE TO FILE A COPY OF THE INSTRUMENT OF PARTNERSHIP DEED ALONG WI TH THE RETURN FOR ASSESSMENT YEAR 1995-96 WHICH THE ASSESSEE FAIL ED TO DO. THE ASSESSEE HAS NOT DISCUSSED ANYTHING ABOUT THE S TATUS OF FIRM BEFORE THE ASSESSING AUTHORITY TILL THE ASSE SSEE FILED ITS RETURNS, IN RESPONSE TO THE NOTICES ISSUED UNDER SE C.148 FOR ITA 423 & 424/12 :- 5 -: SUBSEQUENT ASSESSMENT YEARS. THE CLAIM OF STATUS A S FIRM SHOULD HAVE COME FROM THE ASSESSEE IN THE BEGINNING ITSELF SUO MOTO. THE EXISTENCE OF THE PARTNERSHIP MUST BE PRO VED BY THE INSTRUMENT OF PARTNERSHIP DEED. THE ASSESSEE SHOUL D STATE THE CAPITAL CONTRIBUTED BY ITS PARTNERS, THE SHARE OF P ROFIT AND LOSS AND ALL OTHER NECESSARY INGREDIENTS OF JURAL RELATIONSH IP THAT SHOULD EXIST AMONG THE PARTNERS. IN THE PRESENT CASE TILL FILING OF RETURNS IN RESPONSE TO NOTICES UNDER SEC.148 FOR THE ASSESS MENT YEARS 1999-2000 AND 2000-01, THE ASSESSEE HAS NOT BROUGHT ANYTHING ON RECORD TO SHOW THAT THE ASSESSEE WAS IN FACT A FIRM. 10. EVEN THOUGH THERE MAY BE OMISSIONS AND MISTAKES IN THE FORM SELECTED TO ISSUE NOTICES OR IN MENTIONING THE STATUS OF THE ASSESSEE, THE ASSESSMENTS HAVE BEEN CONSISTENTLY DO NE BY THE ASSESSING AUTHORITY IN THE STATUS OF AN AOP. FOR THE FIRST TWO ASSESSMENT YEARS 1995-96 AND 1996-97, THIS WAS NOT POSSIBLE ONLY FOR THE REASON THAT THE RETURNS WERE PROCESSED UNDER SEC.143(1). WHEREVER THE ASSESSING OFFICER HAS DO NE A SCRUTINY ASSESSMENT, THE STATUS ASSIGNED WAS AOP. 11. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF TH E CASE, WE FIND THAT THE ASSESSEE HAS NOT DISCHARGED ANY OF TH E STATUTORY AND ITA 423 & 424/12 :- 6 -: PROCEDURAL OBLIGATION CAST ON IT FOR ADVANCING ITS ARGUMENT THAT IT IS A FIRM AND NOT AN AOP. ON THE OTHER HAND, T HE ASSESSING OFFICER HAS RIGHTLY HELD, IN THE ABSENCE OF ANY OTH ER EVIDENCE, THAT THE ASSESSEE IS AN AOP. 12. IN RESULT, THESE TWO APPEALS FILED BY THE ASSES SEE ARE DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 22 ND OF FEBRUARY, 2013 AT CHENNAI. SD/- SD/- (V.DURGA RAO) (DR.O.K .NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 22 ND FEBRUARY, 2013 MPO* COPY TO : APPELLANT/RESPONDENT/CIT/CIT(A)/DR