M/s K.M Shakar Karkhana Pvt. Ltd., Kanpur V. The Dy. Commissioner of Income Tax, Kanpur

ITA 447/LKW/2013

• Counselvise Citation: 44723714 RSA 2013
• Duration Of Justice: 1 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 14-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND MISHRA
• Assessee Lawyers: P K KAPOOR
• Keywords: Opportunity of being heard; Principle of natural justice; Non compliance
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER ITA NO.447/LKW/2013 ASSESSMENT YEAR:2009-10 M/S K.M. SHAKAR KARKHANA PVT. LTD. 11, MOTI BHAWAN 52/1, COLLECTORGANJ, KANPUR V. DCIT RANGE 5 KANPUR TAN/PAN:AADCK1730D (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. P. K. KAPOOR, C.A. RESPONDENT BY: SHRI. ARVIND MISHRA, D.R. DATE OF HEARING: 02 03 2015 DATE OF PRONOUNCEMENT: 13 03 2015 O R D E R PER SUNIL KUMAR YADAV: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON VARIOUS GROUNDS WHICH ARE AS UNDER:- 1. BECAUSE, WHILE DECIDING THE APPEAL PREFERRED BY THE 'APPELLANT' AGAINST THE ORDER DATED 16.12.2011, THE 'CIT(A)' HAS ERRED IN LAW AND ON FACTS IN NOT ADJUDICATING UPON THE GROUND NOS. 1, 2,3,4 & 5 AS TAKEN BEFORE HIM, AS ARE REPRODUCED HEREUNDER:- 1. BECAUSE SELECTION OF THE CASE OF THE 'APPELLANT' FOR SCRUTINY ASSESSMENT BY ISSUE OF NOTICE UNDER SECTION 143(2) DATED 24.08.2010 BY ITO-3(2), KANPUR BEING NOT IN ACCORDANCE WITH THE PROVISIONS CONTAINED IN THE SAID SECTION, THE ASSESSMENT ORDER DATED 16.12.2011 CAPTIONED AS ORDER 'UNDER SECTION 144 OF THE ACT' IS VOID AB-INITIO AND DESERVES TO BE QUASHED. :- 2 -: 2. BECAUSE SELECTION OF THE CASE FOR SCRUTINY IS THE SOLE PREROGATIVE OF THE 'ASSESSING OFFICER' BASED ON HIS OWN 'OBJECTIVE OPINION' AND THE NOTICE UNDER SECTION 143(2) DATED 24.08.2010 [AS HAS BEEN ISSUED IN THE INSTANT CASE BY ITO- 3(2), KANPUR] BASED ON SELECTION UNDER COMPUTER AIDED SCRUTINY SCHEME (CASS) IS WHOLLY ILLEGAL AND THE ASSESSMENT ORDER PASSED CAPTIONED AS 'ORDER UNDER SECTION 144' IS LIABLE TO BE DECLARED NULL AND VOID. 3. BECAUSE THE 'VARIATION' BETWEEN THE 'RETURNED INCOME' AND THE 'ASSESSED INCOME' IS WHOLLY UNAUTHORIZED AND ILLEGAL OWING TO NON COMPLIANCE OF THE MANDATORY PROVISION OF SECTION 143(2) OF THE ACT AND THE SAME DESERVES TO BE QUASHED ON THE AFORESAID PRELIMINARY GROUND ALONE. 4. BECAUSE IN THE ABSENCE OF ANY VALID ORDER HAVING BEEN PASSED BY THE ID. CIT UNDER SECTION 127 (2) OF THE ACT THE 'DY. CIT', CIRCLE-5, KANPUR NEVER GOT VESTED WITH THE JURISDICTION OF 'ASSESSING OFFICER' IN THE CASE OF THE 'APPELLANT' AND CONSEQUENTLY THE ASSESSMENT ORDER DATED 16.12.2011 IS LIABLE TO BE DECLARED AS NULL AND VOID. 5. BECAUSE WHOLLY WITHOUT PREJUDICE TO THE CONTENTIONS RAISED IN THE FOREGOING GROUNDS, THE ITO-3(2) INITIATING THE PROCEEDINGS BY ISSUE OF NOTICE UNDER SECTION 143(2) CONTINUED TO HOLD JURISDICTION OF 'ASSESSING OFFICER' IN THE CASE OF THE 'APPELLANT' TILL LAST AND THE ASSESSMENT ORDER DATED 16.12.2011 AS PASSED BY 'DY. CIT', CIRCLE-5, KANPUR IS WHOLLY ILLEGAL. 2. BECAUSE THE AUTHORITIES BELOW HAVE ERRED IN LAW AND ON FACTS IN MAKING ASSESSMENT/UPHOLDING THE ASSESSMENT AT AN INCOME OF RS.2,05,88,260/- (AS AGAINST RETURNED LOSS OF RS.17,90,109). WITHOUT PREJUDICE TO THE AFORESAID 3. BECAUSE THE ASSESSMENT ORDER DATED 16.12.2011 PASSED BY THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-5, KANPUR AND INCOME :- 3 -: ESTIMATED THEREUNDER HAVE BEEN UPHELD BY THE 'CIT(A)' WITHOUT GIVING DUE CONSIDERATION, MUCH LESS ADJUDICATION OF GROUND NOS 6, 7, 8 AND 9 AS HAD BEEN TAKEN BEFORE HIM AND ACCORDINGLY FIRST APPEAL (AGAINST THE ASSESSMENT ORDER DATED 16.12.2011) CANNOT BE TREATED TO HAVE BEEN DECIDED IN ACCORDANCE WITH THE PROVISIONS OF LAW. 4. BECAUSE THE ASSESSMENT ORDER DATED 16.12.2011 (WHICH WAS THE SUBJECT MATTER OF FIRST APPEAL) AND ESTIMATE OF INCOME AS STOOD COMPRISED THEREIN, COULD NOT HAVE BEEN UPHELD BY THE 'CIT(A)' EVEN ON THE GROUND THAT BOOKS OF ACCOUNT WERE NOT EVEN PRODUCED BEFORE HIM (APPELLATE AUTHORITY) AS IT WAS A MATTER OF RECORD THAT BOOKS OF ACCOUNT OF SUGAR MANUFACTURING UNITS OF - (A) JARANDESHWAR SAHKARI SHAKAR KARKHANA (PVT) LTD. (SATARA FACTORY); (B) YASWANT SHAKARI SHAKAR KARKHANA PRIVATE LIMITED (NAGWADA FACTORY) WERE NOT IN POSSESSION OF THE APPELLANT BECAUSE OF ON-GOING DISPUTES WITH THE LOCALS. 5. BECAUSE THE ORDER DATED 28.03.2013 HAS BEEN PASSED BY THE 'CIT(A)' IS BASED ON NON-CONSIDERATION/NON-APPRECIATION OF VITAL MATERIAL AND INFORMATION AS WAS AVAILABLE ON RECORD AND THE SAME IS NOT SUSTAINABLE, EITHER ON FACTS OR IN LAW. 6. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLES OF NATURAL JUSTICE. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT THE LD. CIT(A) HAS NOT ADJUDICATED THE ISSUES RAISED BEFORE HIM. IN SUPPORT OF HIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE GROUNDS REPRODUCED BY THE LD. CIT(A) AND THE GROUNDS RAISED BEFORE HIM. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO CONTENDED THAT THE LD. CIT(A) HAS NOT EVEN REPRODUCED ALL THE GROUNDS RAISED BEFORE HIM IN HIS ORDER. MOREOVER, WHATEVER FINDING IS GIVEN :- 4 -: BY THE LD. CIT(A), IT WAS ALSO SUMMARILY REJECTION OF THE CONTENTIONS OF THE ASSESSEE. IN THE LIGHT OF THESE FACTS, THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THE MATTER BE RESTORED TO THE LD. CIT(A) WITH A DIRECTION TO RE- ADJUDICATE THE GROUNDS RAISED BEFORE HIM ON MERIT BY PASSING A SPEAKING ORDER AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. THE LD. D.R. DID NOT DISPUTE THE FACTUAL ASPECT OF THE MATTER. 4. HAVING CAREFULLY EXAMINED THE ORDER OF THE LD. CIT(A); THE GROUNDS RAISED BEFORE HIM AND THE GROUNDS RAISED BEFORE US IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE LD. CIT(A) HAS REPRODUCED IN HIS ORDER ONLY FIVE GROUNDS RAISED BEFORE HIM; WHEREAS THE ASSESSEE HAS RAISED ALMOST TEN EFFECTIVE GROUNDS BEFORE HIM. IT IS ALSO NOTICED THAT THE LD. CIT(A) HAS NOT EVEN GIVEN A FINDING ON ALL THE GROUNDS WHICH ARE MENTIONED IN HIS ORDER. IN THE LIGHT OF THESE FACTS, WE ARE OF THE VIEW THAT THE LD. CIT(A) HAS NOT ADJUDICATED ALL THE GROUNDS RAISED BEFORE HIM AND HAS DISPOSED OF THE APPEAL SUMMARILY. IN VIEW OF THESE FACTS, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE WITH A DIRECTION TO RE-ADJUDICATE THE GROUNDS OF APPEAL RAISED BEFORE HIM ON MERIT BY PASSING A SPEAKING ORDER AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTIONED PAGE. SD/- S/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:13 TH MARCH, 2015 JJ:0203 :- 5 -: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR