RKBK Fiscal Services Pvt. Ltd., Kolkata V. D.C.I.T,C.C-XXX, Kolkata., Kolkata

ITA 441/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100144 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 04-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S BISWAS
• Assessee Lawyers: MRS NILIMA JOSHI
• Keywords: Earning of tax free income
• Section: 143(3); 14A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 441 / KOL / 2013 ASSESSMENT YEAR :2008-09 RKBK FISCAL SERVICES PVT. LTD., SHREE GANESH CENTRE, 216, A.J.C.BOSE ROAD, KOLKATA 700 017 [ PAN NO.AABCR 5623 E ] V/S . DCIT, CC-XXX, KOLKATA /APPELLANT .. / RESPONDENT /BY APPELLANT MRS NILIMA JOSHI, C.A /BY RESPONDENT SHRI R.S. BISWAS, CIT-DR /DATE OF HEARING 12-11-2015 /DATE OF PRONOUNCEMENT 27-11-2015 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX, KOLKATA-III IN APPEAL NO.CIT-III/DC(HQ) -3/KOL/263/2012-13/6727- 29 DATED 30.01.2013. ASSESSMENT WAS FRAMED BY ACIT, CIRCLE-7, KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) VIDE HIS ORDER DATED 16.07.2010 FOR ASSESSMENT YEAR 2008 -09. ASSESSEE RAISED THE FOLLOWING GROUNDS:- 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LEARNED CIT WAS UNJUSTIFIED IN PASSING ORDER U/S. 263 OF THE IN COME TAX ACT, 1961 AS THE ORDER PASSED BY THE AO WAS NEITHER ERRONEOUS NO R PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THE SAME SHOULD BE QUAS HED. ITA NO.441/KOL/2013 A.Y. 2008-09 RKBK FISCAL SERVICES PVT. LTD. V. DCIT-CC-XXX/KO L. PAGE 2 2. THAT WITHOUT PREJUDICE TO THE ABOVE A. THAT SINCE THE AO WAS SATISFIED WITH THE CORRECT IONS OF THE CLAIM OF EXPENDITURE MADE BY THE ASSESSEE THE SAME BEING AS PER RULE 8D(1) THE WAS NO NECESSITY OF MAKING DISALLOWANCE U NDER RULE 8D(2). B. THE LEARNED CIT ERRED IN THE SETTING ASIDE THE ASSESSMENT OF THE AO AND DIRECTING HIM TO COMPUTE DISALLOWANCE OF EXP ENDITURE RELATING TO EARNING OF EXEMPT INCOME AS PER PROVISI ONS OF RULE 8D ALTHOUGH THE AO HAD DISALLOWED EXPENSES U/S. 14A OF THE I.T. ACT AFTER BEING SATISFIED WITH THE CORRECTNESS OF CLAIM OF EXPENDITURE MADE BY THE ASSESSEE. 2. AT THE OUTSET, IT WAS BROUGHT TO OUR NOTICE BY L D. AR OF ASSESSEE THAT THE LD. CIT HAS PASSED THE ORDER U/S 263 OF THE ACT WITHOUT RECORDING THAT THE ORDER PASSED BY AO IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE. ACCORDINGLY THE LD. AR CLAIMED THAT THE O RDER PASSED BY THE AO IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST O F REVENUE AND PRAYED FOR QUASHING THE SAID ORDER. THE ISSUE OF THE CASE IS THAT THE LD. CIT PASSED OR DER AFTER DISALLOWING THE EXPENDITURE RELATING TO EARNING OF EXEMPTED INCOME AS PER PROVISIONS OF SEC. 14A OF THE ACT. HOWEVER, WE FIND FROM THE ORDER OF LD. CIT THAT LD. CIT HAS NOWHERE RECORDED IN HIS ORDER U/S 263 OF THE ACT THAT ORDER PASSED B Y ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF REVENUE. THE POWER OF REVISION CONFERRED ON THE COMMISSIONER IS OFTEN INV OKED UNDER SECTION 263 OF THE INCOME-TAX ACT ON THE GROUND THAT THE ORDER OF THE LOWER AUTHORITY SUBORDINATE TO THE COMMISSIONER IS ERRONEOUS AND HE NCE, PREJUDICIAL TO THE INTEREST OF THE REVENUE. 3. THE FINDING OF LD. CIT IS TOTALLY MISSING FROM H IS ORDER THAT THE ORDER PASSED BY ASSESSING OFFICER IS ERRONEOUS AND PREJUD ICIAL TO THE INTEREST OF REVENUE WHICH IS A MANDATORY REQUIREMENT. IT HAS BE EN HELD IN THE CASE OF CIT VS. R.K. METAL WORKS 112 ITR 445 (P & H) THAT I T IS NECESSARY TO DISCLOSE SUCH BASIS THAT THE ORDER PASSED BY THE AO IS ERRON EOUS AND PREJUDICIAL TO THE ITA NO.441/KOL/2013 A.Y. 2008-09 RKBK FISCAL SERVICES PVT. LTD. V. DCIT-CC-XXX/KO L. PAGE 3 INTEREST OF THE REVENUE. IN VIEW OF ABOVE, WE ARE I NCLINED TO QUASH THE ORDER MADE BY LD. CIT U/S 263 OF THE ACT WHICH IS ULTRA VIRES AND NOT AS PER THE PROVISION OF LAW. 4. SINCE THE ORDER PASSED U/S. 263 OF THE ACT HAS B EEN QUASHED THEN THE REMAINING ISSUE OF THE ASSESSEES APPEAL DOES NOT R EQUIRE ANY ADJUDICATION. 5. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 27/ 11/2015 SD/- SD/- (MAHAVIR SINGH) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 27 /1 1 /2015 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-RKBK FISCAL SERVICES PVT.LTD. SHRERE GAN ESH CENTRE, 216, A.J.C. BOSE ROAD, KOLKATA-17 2. /RESPONDENT-DCIT-CC-XXX/KOLKATA 3. * +,- - . / CONCERNED CIT KOLKATA 4. - - .- / CIT (A) KOLKATA 5.01233+,, - +, , / DR, ITAT, KOLKATA 6.26789 / GUARD FILE. BY ORDER/ -, /TRUE COPY/ / - +, ,