M/s. Shree Balaji Agro Pest (P) Ltd., SRIGANGANAGAR V. ACIT, SRIGANGANAGAR

ITA 474/JODH/2014

• Counselvise Citation: 47423314 RSA 2014
• Duration Of Justice: 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 12-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SINGH
• Assessee Lawyers: RAKESH GUPTA
• Section: 143(3); 147; 68; 263

Judgement Text

IN THE INCOMETAX APPELLATE TRIBUNAL JODHPUR BENCH: J ODHPUR ( BEFORE SHRI H ARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER ) I.T.A. NO. 4 7 4 /JODH/201 4 (A.Y. 20 05 - 06 ) M/S SHREE BALAJI AGRO PEST [P] LTD V S THE A .C.I.T 3 - A - 17, JA WAHAR NAGAR SRIGANGANAGAR S RIGANGANAGAR PAN NO . AAHCS 0333 C (APPELLANT) (RESPONDENT) ASSESSEE BY : - SHRI RAKESH GUPTA DEPARTMENT BY : - SHRI JAI SINGH , D.R. DATE OF HEARING : 24 /0 9 /201 4 DATE OF PRONOUNCEMENT : 26 / 0 9 /20 14 O R D E R P E R HARI OM MARATHA, J.M. : THIS APPEAL O F THE ASSESSEE, FOR A.Y. 20 0 5 - 06 IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) , BIKANER DATED 3 1 .0 7 .2014. 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: 1. THAT THE LD. C.I. T. (A) ERRED IN SUSTAINING THE DECISION OF REOPENING OF THE ASSESSMENT UNDER SECTION 147/148 OF THE INCOME TAX ACT, 1961, EVEN WHEN THE AO FAILS TO DISPOSE OFF THE OBJECTIONS SUBMITTED BY THE ASSESSEE IN VIEW OF JUDGMENT OF HONBLE SUPREME COURT DECIDED IN CASE M/S G.K.N. DERIVE SHAFTS (INDIA) LTD. 2. THAT THE LD. C.I.T. (A) ERRED IN SUSTAINING THE ADDITION OF RS. 5,27,396/ - MADE ON ACCOUNT OF PROVISIONS OF SERVICE TAX. 3. THAT THE LD. C.I.T. (A) ERRED IN SUSTAINING THE ADDITION OF RS. 17,50,657/ - MADE BY THE AO ON ACCOUNT OF UNEXPLAINED LIABILITIES U/S 68 OF THE INCOME TAX ACT, 1961. 4. THAT THE LD. C.I.T. (A) ERRED IN SUSTAINING THE ADDITION OF RS. 16,33,602/ - MADE BY THE AO ON ACCOUNT OF REMISSION OR CESSATION OF LIABILITIES U/S 41(1) OF THE INCOME TAX ACT, 1961. 5. THAT THE LD. C.I.T. (A) ERRED IN SUSTAINING THE DECISION OF CHARGING OF INTEREST. 6. THAT THE HUMBLE APPELLANT MAY BE ALLOWED TO ADD OR AMEND ANY GROUND OF APPEAL AT OR BEFORE THE TIME OF HEARING. 3 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A PRIVATE LIMITED COMPANY AND CLEARING & FORWARDING AGENT OF M/S NORTHERN MINERALS LTD AND M/S DHANUKA PESTICIDES LTD. THE ASSESSEE HAD FILED ITS RETURN OF INCOME TAX FOR THE A.Y. 2005 - 06 ON 31 - 10 - 2005 DECLARING TOTAL INCOME OF RS. 8,57,634/ - . ASSESSMENT U/S 143(3) OF THE INCOME - TAX ACT, 1961 ['THE ACT' FOR SHORT] WAS COMPLETED ON 5 - 10 - 2007 QUANTIFYING INCOME OF RS. 8,97,900/ - . LATER ON, THE LD. CIT ALSO INVOKED THE PROVISION S OF SECTION 263 OF THE ACT AND REVISED THE ASSESSMEN T ORDER VIDE HIS ORDER DATED 26 - 03 - 2010 AND DIRECTED THE A.O TO MAKE HIS DE NOVO ORDER. BUT THE A.O DID NOT GIVE EFFECT TO THIS REVISIONAL ORDER WITHIN THE PERMITTED PERIOD. THEREFORE, TO OVERCOME THAT POSITION, THE A.O ISSUED NOTICE 148 OF THE ACT AND H AS COMPLETED THE PRESENT RE ASSESSMENT ORDER BY MAKING VARIOUS ADDITIONS. 2.1 THE ASSESSEE FILED APPEAL AND THE LD. CIT(A) HAS CONFIRMED THE ADDITIONS MADE BY THE A.O. NOW THE ASSESSEE IS FURTHER AGGRIEVED AND HAS FILED THIS APPEAL. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. 4 3. 1 GROUND NO. 1 IS REGARDING THE REOPENING OF THE ASSESSMENT U/S 147/148 OF THE ACT. THEREFORE, THIS GROUND OF THE ASSESSEE HAS CHALLENGED THE VERY REOPENING U/S 148 OF THE A CT AND HAS ALSO ASSAILED IT WITH THE HELP OF THE JUDGEMENT OF THE APEX COURT RENDERED IN THE CASE OF M/S. GKN DERIVE SHAFTS (INDIA) LTD. WHILE ARGUING ON THIS G ROUND LD. A.R. SHRI GUPTA HAS EMPHASIZED ONLY ON THE VALIDITY OF THE RE - OPENING. HIS MAIN ARGUME NT EMERGED THAT THE A.O. HAS PASSED HIS ORDER U/S 143 ( 3) AFTER CONSIDERING EACH AND EVERY INCOME AND HAS TAKEN ONE OF THE POSSIBLE VIEW, AND THAT THE ASSESSEE SUBMITTED FULL AND FINAL FACTS OF ALL THE INCOMES AND NO NEW MATERIAL CAME TO THE POSSESSION OF T HE A.O .FOR INITIATING ACTION U/S 147 R.W.S. 148 OF THE ACT. THEREFORE, THE NOTICE U/S 148 IS BASED ON THE CHA N GE OF HIS OPINION WHICH IS PROMPTED DUE TO HIS INABILITY TO CARRY OUT THE DIRECTIONS OF LD. COMMISSIONER (ADMINISTRATION) PASSED IN THE 263 PROCE EDINGS. ON THE OTHER PART RELATING TO NON DISPOSAL OF ASSESSEES OBJECTIONS THE A.R. DID NOT SAY MUCH. 3.1 P ER CONTRA LD. D.R. H A S STATED THAT THE OBJECTIONS RAISED AGAINST THE NOTICE ISSUED U/S 148 WERE MEET OUT BY THE A.O. BY PASSING HIS ORDER. ON THE RE - OPENING THE LD. D.R. STATED THAT ALL POSSIBLE VENUES ENSHRINED BY THE ACT CAN BE LEGALLY ADOPTED BY THE A.O. AND EVEN 5 WHEN THE DIRECTIONS GIVEN IN THE ORDER U/S 263 OF THE ACT WERE NOT CARRIED OUT THE A.O. CAN RESORT TO THE PROVISIONS OF SECTION 147 R.W .S. 148 OF THE ACT. 3.2 WE HAVE CAREFULLY PERUSED THE ENTIRE RECORD. WE HAVE FOUND IT FOR A FACT THAT THE COMMISSIONER OF INCOME TAX HAS CALLED FOR THE RECORD OF THIS ASSESSMENT ORDER DATED 05.10.2007 AND AFTER SHOW CAUSING THE ASSESSEE U/S 263, HAD FOUN D THE ORDER NOT ONLY ERRONEOUS BUT ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE AND HAD DIRECTED THE A.O. TO REVISE HIS ORDER. BUT THE A.O. FAILED, INADVERTENTLY, TO GIVE EFFECT TO THE REVISIONAL DIRECTIONS AND THE SAME BECAME TIME BARRED. THIS FACT HAS REMAINED UNCONTROVERTED, RATHER, IS FOUND TO BE CORRECT. HAVING FOUND THAT, WE HAVE FURTHER NOTICED THAT THE A.O. HAS ISSUED NOTICE U/S 148 AFTER RECORDING SAME REASONS AS WERE THE GROUNDS OF REVISION IN THE NOTICE ISSUE D U/S 263 OF THE ACT BY THE COMMISS IONER. THUS, IT BECOMES CLEAR THAT WITH THE OBJECT OF CORRECTL ING HIS MISTAKE THE A.O. HAS TAKEN THE ROUTE OF RE - ASSESSMENT. WE HAVE FOUND IT FOR A FACT THAT NO NEW MATERIAL CAME TO THE POSSESSION OF THE A.O. THE ASSESSEE HAD DISCLOSED ALL THE FACTS OF HIS CASE FULLY AND TRULY. IN FACT THE A.O. HAS MISSED THE BUS AND HAS TRIED TO PLAY WITH THE PROVISIONS OF THE ACT AS PER HIS FREE WILL. NO AUTHORITY CAN BE ALLOWED TO TAKE A 6 BENEFIT OF ITS MISTAKES. THE PROVISIONS OF THE AC ARE VERY CLEAR. THESE ARE NOT TO BE CARRIED OUT SIMULTANEOUSLY. IT WOULD AMOUNT TO MISUSE OF THE PROVISIONS OF THE ACT IN CASE WE ACCEPT THE CONTENTION OF LD. D.R. THAT THE A.O. CAN PUT INTO USE ALL THE PROVISIONS OF THE ACT AT HIS SWEET WILL. THIS IS NOT THE INTENTION OF THE LEGISLATION. T HE A.O. HAS, IN FACT, NOT APPLIED HIS MIND TO FORM HIS OPINION REGARDING THE ESCAPEMENT OF INCOME. HE HAS SIMPLY FOLLOWED THE REVISION ORDER. WHILE MAKING HIS ORDER U/S 143(3) THE A.O. HAS EXAMINED AND INVESTIGATED INTO EACH ITEM OF INCOME AND HAS CAME TO ONE POSSIBLE CONCLUSION. THUS, IT IS DEFINITELY A CASE OF CHARGE OF OPINION AND ON THAT BASIS ACTION U/S 147 CANNOT AND IS NOT PERMITTED. THE RECENT JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS M/S. VARDHMAN INDUSTRIES D.B. I.T. N O. 172/2011 DATED 30.08.2013 IS ON THIS VERY ISSUE AND DICTATES THAT R EASSESSMENT ON THE BASIS OF CHAN GE OF OPINION BY THE A.O. IS ILLEGAL. THEREFORE, WE HOLD THE NOTICE ISSUED U/S 148 IN THIS CASE AS INVALID AND QUASH THE RE - ASSESSMENT ORDER BEING AB - INIT IO VOID. HENCE, WE ALLOW LEGAL ISSUE IN THE FAVOUR OF THE ASSESSEE. IN THAT EVENTUALITY, WE ARE NOT REQUIRED TO DECIDE OTHER ISSUES RAISED ON MERITS. 7 4 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 4 7 4 /JU/2014 FOR A.Y. 20 05 - 06 STANDS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 26 TH SEPTEMBER , 2014. SD/ - SD/ - (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26 TH SEPTEMBER , 2014 VL/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT BY ORDER 4 . THE CIT(A) 5. THE DR SENIOR PRIVATE SECRETARY ITAT, JODHPUR