Manoj Kumar Tripathy, Cuttack V. Pr.CIT, Bhubaneswar

ITA 45/CTK/2022

AI Insights

The case involves an appeal by Sri Manoj Kumar Tripathy against the order of the Pr.CIT, Bhubaneswar-1, which revised the assessment for the year 2017-2018. The assessee's income was initially assessed under Section 144 based on the turnover and bank deposits during demonetization. The Pr.CIT later found the assessment to be erroneous and prejudicial to the interest of the revenue, leading to a revision under Section 263. The Tribunal considered precedents from the Supreme Court and other High Courts but concluded that the Pr.CIT's revision was justified due to the improper analysis of bank deposits and non-application of Section 115BBE.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127064 (ITAT-CUTTACK)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-02-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 11-04-2022
• Other Referred Cases: Malbar Industries Ltd. Vs. CIT, Pr.CIT Vs. M/s Orissa State Police Housing and Welfare Corporation Ltd., M/s. Earth Minerals Co. Ltd Vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 207

Judgement Text

आयकर अऩीऱीय अधधकरण, कटक न्यायऩीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK श्री जाजज माथन, न्याययक सदस्य एवं श्री अरुण खोड़पऩया ऱेखा सदस्य के समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अऩीऱ सं/ITA No.45/C TK/2022 (ननधाारण वषा / Asses s m ent Year : 2017-2 018) Sri Manoj Kumar Tripathy, Linahar, Salipur, Cuttack-754202 Vs Pr.CIT, Bhubaneswar-1 PAN No. :ALIPS 0067 J (अऩीऱाथी /Appellant) .. (प्रत्यथी / Respondent) ननधााररती की ओर से /Assessee by : Shri S.N.Sahu & Somanath Sahoo, ARs राजस्व की ओर से /Revenue by : Shri M.K.Gautam, CIT-DR स ु नवाई की तारीख / Date of Hearing : 14/02/2023 घोषणा की तारीख/Date of Pronouncement : 14/02/2023 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order of the ld. Pr.CIT, Bhubaneswar-1, dated 03.03.2022 passed in DIN & Order No.ITBA/REV/F/REV5/2021-22/1040315427(1), for the assessment year 2017-2018. 2. It was submitted by the ld. AR that the assessee’s case is clearly covered by the decision of the Hon’ble Supreme Court in the case of Malbar Industries Ltd. Vs. CIT, 243 ITR 83 (SC) as also the decision of the Hon’ble Jurisdictional High Court in the case of Pr.CIT Vs. M/s Orissa State Police Housing and Welfare Corporation Ltd., reported in 139 taxmann.com 207 (Orissa). Ld.AR has filed his written submission on 05.12.2022, which reads as under :- The assessee carries on business of stationary goods under the name of M/s. Maruti Agency. Assessment has been completed u/s.144 of the IT. Act,1961. The main issue in this case is that ITA No.45/CTK/2022 2 substantial amount has been deposited in bank account NO.- 04290500000101. It is alleged that several dates were fixed for hearing and in response to the notice, assessee made compliance and furnished materials and documents with a written submission. The AO has determined the income assessed at RS.10,79,190/-. Though the assessee has furnished documents and bank accounts etc as called for. In exparte assessment the learned AO in spite of compliances with documents the learned AO made order u/s.144 estimating the income on the basis of turnover. So far as the deposits, it is humbly stated that the return was not filed as the total income was below taxable limit. However, the AO has estimated the income u/s.44AD @ 8% on the total turnover of Rs.87,58,570/-. Though the AO after considering the totality of the facts including the bank deposits during the demonetization period still then the order has been set aside by the Pr. CIT u/s.263 to be erroneous and prejudicial in the interest of the revenue. It is humbly said that since the AO had considered all other ingredients to take such a view while completing the assessment hence under the facts and circumstances of the case including the explanation of the assessee, the case of the assessee will be covered by the decision of the Supreme Court in the case of M/s. Malabar Industries Ltd Vs. CIT, 243 ITR 83 (SC) and the order of the Pr. CIT will not tenable in law. Secondly though the Section 263, the Pr. CIT himself not examined the issue and passed the order. Therefore, the order has become illegal and according to the decision of the jurisdictional High Court in the case of Orissa State Police Housing & Welfare Corporation Ltd, 139 Taxmann.com 207 (Orissa) and decision of Cuttack Bench of Tribunal in the case of M/s. Earth Minerals Co. Ltd Vs. ACIT in ITA No.223/CTK/2019 dated 29/08/2022. PRAYER In view of the facts and circumstances of the case stated above and the case laws cited, it is respectfully submitted to consider the case judicially and allow the appeal of the assessee. And for this act of your kindness the appellant as in duty bound shall ever pray. 3. Further the ld. AR has filed his written submission on 10.02.2023, which reads as under :- This written note of submission is in substitution and modification to the submissions dated 05.12.2022 enclosed in the paper book dated 12.12.2022. ITA No.45/CTK/2022 3 The matter is covered by the ratio of the decision of Hon'ble Supreme Court of India in the case of M/s. Malbar Industries Ltd Vs. CIT, 243 ITR 83 (SC). In the said decision, it has been decided that, if the AO has completed an assessment after due verification of the books of account and other relevant materials and framed the assessment in accordance with law, then on mere change of opinion, the learned Pr. CIT cannot assume jurisdiction u/s.263 of the I.T. Act, 1961. The relevant paragraph of the said judgement is quoted below: "The phrase "prejudicial" to the interest of the Revenue has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue, as a consequence of an order of the Assessing Officer, cannot be treated as "prejudicial to the interest of the Revenue", for example when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue or where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, "unless the view taken by the Income' Tax Officer is unsustainable in law". There must be some grievous error in the order passed by the Income Tax Officer, which might set a bad trend or pattern for similar assessments, which on a broad reckoning the Commissioner might think to be prejudicial to the interests of Revenue administration. In the instant case the AO after verification of all the relevant materials produced, like explanation, in compliance to the show cause notice by way of Affidavits, maintenance of bank account in UCO Bank, in the business name i.e M/s. Maruti Agency, Photocopies of Bills etc has passed the order. All these facts are matter of record, admitted in the assessment order, which can be seen on perusal of the assessment order in Page-2 of the Order. Since the AO has taken reasonable decision in framing the order as per the legally acceptable concept, there is no question of error in the assessment order to attract invocation of Sec. 263. Therefore, the case is covered in favour of the assessee by the decision of the Supreme Court of India in the case of M/s. Malbar Industries Ltd Vs. CIT, 243 ITR 83 (SC) as per the relevant paragraph quoted above. The above principles laid down by the Supreme Court has been followed IT AT, Cuttack Bench in a series of cases ITAT 'E' Mumbai Bench In the case of Small Wonder Industries in ITA No.- 246/Mum/2013 dated 24/02/2017. Therefore, Honourable Tribunal should also follow the decision of Supreme Court followed by the Co-ordinate Bench in the in the interest of judicial discipline. Hence, the order u/s.263 made by the Pr. CIT is liable to be quashed. The next point submitted by the assessee is that the order is not sustainable in law, because after receipt of explanation in ITA No.45/CTK/2022 4 compliance to the show cause notice u/s.263, the learned Pr. CIT himself has not made any enquiry and investigation into the facts as required under law. He has simply cited plethora of case laws in a stereotype manner and has a set-a-aside the to be done de novo. More so, those case laws are distinguishable on facts and not are relevant to be applicable to the facts of the appellants' case. Following the case laws cited below in favour of the assessee it is respectfully prayed that the order of the Pr. CIT is not being sustainable in law is liable to be quashed. Full text of the order are enclosed herewith in Page-28 to 55 of the Paper Book dated 12/12/2022. a) M/s. Earth Minerals Co. Ltd Vs. ACIT, Rourkela In ITA No.- 223/CTK/2019, Order dated 29/08/2022 (Page 28 to 38) of Paper Book. b) Balar Fabrics Ltd Vs. CIT in ITA No.- 524/Jodh/2014, Order dated 10103/2016 (Page 39 to 42) of Paper Book. c) Pr. CIT Vs. M/s. Orissa State Police Housing and Welfare Corporation Ltd, (Orissa High Court) Order dated 26/04/2022 (Page 43 to 48) of Paper Book. d) Kamal Lochan Das Vs. Pr. CIT-1, Bhubaneswar, ITAT, Cuttack Bench in ITA No. - 54/CTK/2022, Order dated 28/09/2022 (Page 49 to 55) of Paper Book. PRAYER Therefore, in view of the facts and in the circumstances of the case and the case laws cited as above, it is respectfully prayed to consider the matter judicially and allow the appeal of the appellant, And for this act of your kindness the assessee as in duty bound shall ever pray. 4. In reply, ld. CIT-DR submitted that the assessment has been framed u/s.144 of the Act and there could be no formation of opinion by the AO after considering any evidence. It was submitted by the ld. CIT-DR that the order passed u/s.263 of the Act is liable to be upheld. 5. We have considered the rival submissions. A perusal of the assessment order clearly shows that the order passed by the AO is an ex- parte order even after substantial opportunities having been given to the assessee. A perusal of the order u/s.263 of the Act shows that ITA No.45/CTK/2022 5 opportunities had been given and the assessee had filed his reply. The ld. Pr.CIT has held that money deposited during the demonitisation period has not been analysed properly. He further goes on to hold that the provision of Section 115BBE of the Act which is to be statutorily applied but that has not been applied. This clearly shows violation on the part of the assessee in not giving any explanation in regard to the demonitisation of cash deposited in the current bank account before the AO. Thus, the issue has not been considered before the AO on the basis of documents submitted before the AO. Further non-application of provisions of Section 115BBE of the Act is clearly a violation of statute which is an error and the same is susceptible to revision u/s.263 of the Act. This being so, we are of the view that the order passed u/s.263 of the Act by the ld. Pr.CIT is on right footing and does not call for any interference. Here we would also like to mention that in fact the order passed u/s.263 of the Act is effectively giving another opportunity to the assessee to produce the evidence before the AO. In the circumstances, the appeal filed by the assessee is dismissed. 6. In the result, appeal of the assessee stands dismissed. Order dictated and pronounced in the open court on 14/02/2023. Sd/- (अरुण खोड़पऩया) (ARUN KHODPIA) Sd/- (जाजज माथन) (GEORGE MATHAN) ऱेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 14/02/2023 Prakash Kumar Mishra, Sr.P.S. ITA No.45/CTK/2022 6 आदेश की प्रनतलऱपऩ अग्रेपषत/Copy of the Order forwarded to : आदेशान ु सार/ BY ORDER, (Assistant Registrar) आयकर अऩीऱीय अधधकरण, कटक/ITAT, Cuttack 1. अऩीऱाथी / The Appellant- Sri Manoj Kumar Tripathy, Linahar, Salipur, Cuttack-754202 2. प्रत्यथी / The Respondent- Pr.CIT, Bhubaneswar-1 3. आयकर आय ु क्त(अऩीऱ) / The CIT(A), 4. आयकर आय ु क्त / CIT 5. पवभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, ITAT, Cuttack 6. गार्ज पाईऱ / Guard file. सत्यापऩत प्रयत //True Copy//