Smt. Parveen Kapoor, Solan V. ITO, Solan

ITA 475/CHANDI/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1305 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-12-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH CIT DR
• Keywords: Reassessment proceedings; Set aside
• Section: 43B; 143(1); 43; 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BE NCH B, CHANDIGARH .., ! '# #$ %, & '( BEFORE: SHRI. N.K.SAINI, VP & SHRI , SANJAY GARG, J M ./ ITA NOS. 475 TO 479/CHD/2018 / ASSESSMENT YEARS : 2008-09 TO 2012-13 SMT. PRAVEEN KAPOOR PROP. M/S K.K. CONSULTANTS THADA KA THAKUR DAWARA SOLAN THE ITO SOLAN (H.P.) ./ PAN NO: ANNPK3865B / APPELLANT / RESPONDENT ! ' / ASSESSEE BY : SHRI PARIKSHIT AGGARWAL, CA # ! ' / REVENUE BY : SHRI MANJIT SINGH, CIT DR $ % ! &/ DATE OF HEARING : 05/12/2019 '()* ! &/ DATE OF PRONOUNCEMENT : 05/12/2019 ')/ ORDER PER N.K. SAINI, VICE PRESIDENT THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER DATED 31/01/2018 PASSED BY THE LD. CIT(A), SHIMLA F OR THE ASSESSMENT YEARS 2008-09 TO 2012-13. 2. SINCE THE ISSUES INVOLVED IN ALL THESE APPEALS A RE COMMON WHICH WERE HEARD TOGETHER, SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. AT THE FIRST INSTANCE WE WILL DEAL WITH THE APPE AL IN ITA NO. 475/CHD/2018 FOR THE A.Y. 2008-09 WHEREIN ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS: 1. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY CIT(A) IN APPEAL NO. 40/16-17 DATED 31.01.2018 HAS ERRED IN PASSING THAT ORDER IN CONTRAVENTION OF THE PROVISIONS OF SECTION 250(6) O F THE INCOME TAX ACT, 1961. 2 2. THAT ON LAW, FACTS AND CIRCUMSTANCES OF THE CASE, T HE WORTHY CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE ACTION OF THE LD. AO WHE REIN THE LD. AO ILLEGALLY INITIATED THE RE-ASSESSMENT PROCEEDINGS BY ISSUANCE OF NOTICE U/S 148 OF THE ACT AND FURTHER ERRED IN CONTINUATION AND COMPLETION OF THE SAID REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT EVEN WHEN THE WHOLE PROCEEDINGS WERE ILLEGAL AND HENCE ARE REQUIRED TO BE DECLARED VOID-AB-INITI O 3. THAT ON THE FACTS, CIRCUMSTANCES AND LEGAL POSITION OF THE CASE, THE WORTHY CIT(A) HAS ERRED IN CONFIRMING THE IMPUGNED ACTION OF LD. AO WHEREIN HE HAS ERRED IN MAKING ADDITION OF RS. 39,02,206/- U/S 43B OF THE ACT ON OUTSTANDING SERVICE TAX LIABILITY. 4. THAT THE APPELLANT CRAVES LEAVE FOR ANY ADDITION , DELETION OR AMENDMENT IN THE GROUNDS OF APPEAL ON OR BEFORE THE DISPOSAL OF THE SAME. 4. GROUND NO. 1 & 4 ARE GENERAL IN NATURE WHILE GRO UND NO. 2 WAS NOT PRESSED SO THESE GROUNDS DO NOT REQUIRE ANY COMMENT ON OUR PART. 5. THE ONLY GRIEVANCE OF THE ASSESSEE VIDE GROUND N O. 3 RELATES TO THE SUSTENANCE OF ADDITION OF RS. 39,02,206/- MADE BY T HE A.O. BY INVOKING THE PROVISIONS OF SECTION 43B OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS ACT) ON ACCOUNT OF OUTSTANDING SERVICE TAX LIABIL ITY. 6. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 26/09/2008 BY DECLARING AN INCOME OF RS. 10,32,140/ - WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. THEREAFTER THE CAS E WAS REOPENED ON THE BASIS THAT AN UNPAID LIABILITY OF RS. 26,19,956/- TOWARDS SERVICE TAX AS ON 31/03/2008 WAS OUTSTANDING AND NOT PAID TILL DUE DATE OF FILIN G OF RETURN. THE ASSESSEE FILED OBJECTION AGAINST THE ISSUANCE OF NOTICE UNDER SECT ION 148 OF THE ACT FOR REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE A CT. THOSE OBJECTIONS WERE DISPOSED OF BY THE A.O. THE A.O. WAS NOT SATISFIED FROM THE EXPLANATION OF THE ASSESSEE AND MADE THE ADDITION OF RS. 39,02,206/- B Y DISALLOWING THE SAID AMOUNT UNDER SECTION 43B OF THE ACT, SINCE IT WAS N OT PAID BEFORE FILING THE RETURN OF INCOME. THE A.O. ALSO OBSERVED THAT EVEN IF EXCISE OR VAT WERE NOT ROUTED THROUGH P&L ACCOUNT THEN IT DID NOT MEAN THA T THOSE WOULD BE OUTSIDE THE PROVISIONS OF SECTION 43B OF THE ACT. 3 7. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO SUSTAINED THE ADDITION MADE BY THE A.O. 8. NOW THE ASSESSEE IS IN APPEAL. 9. LD. COUNSEL FOR THE ASSESSEE DURING THE COURSE O F HEARING SUBMITTED THAT THE IMPUGNED AMOUNT WAS NOT ROUTED THROUGH P&L ACCO UNT AND NOW THIS ISSUE HAS BEEN DECIDED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOBLE & HEWITT (INDIA) (P) LTD. REPORTED AT (2008) 305 ITR 324 AND OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. KNIGHT FRANK INDI A PVT. LTD. REPORTED AT (2016) 290 CTR 25 WHEREIN IT HAS BEEN HELD THAT SECTION 43 B OF THE ACT WILL HAVE NO APPLICATION IF NO DEDUCTION WAS CLAIMED IN THE P&L ACCOUNT AND THAT THE PROVISIONS OF SECTION 145A(A)(II) OF THE ACT, WOULD NOT APPLY TO THE SERVICE TAX. HOWEVER HE WAS FAIR ENOUGH TO ADMIT THAT THE COPIES OF THOSE JUDGMENTS WERE NOT AVAILABLE EITHER TO THE A.O. OR TO THE LD. CIT (A). HE REQUESTED TO REMAND THIS CASE BACK TO THE FILE OF THE A.O. TO BE DECIDED AFT ER VERIFICATION FROM THE RECORD AS TO WHETHER THE AMOUNT IN QUESTION WAS ROUTED THR OUGH P&L ACCOUNT AND THE RATIO LAID DOWN IN THE AFORESAID REFERRED TO JUDGME NTS. 10. IN HIS RIVAL SUBMISSIONS THE LD. CIT DR SUPPORT ED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE PROVISIONS OF SECTION 43B OF THE ACT WERE CLEARLY APPLICABLE IN THIS CASE AS THE LIABILITY OU TSTANDING ON ACCOUNT OF SERVICE TAX WAS NOT PAID BY THE ASSESSEE BEFORE FILING THE RETURN OF INCOME. 11. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD, IN THE PRESENT CASE IT IS AN ADMITTED FACT THAT THE DECISION OF THE HON'BLE DELH I HIGH COURT & HON'BLE BOMBAY HIGH COURT NOW RELIED BY THE LD. COUNSEL FOR THE ASSESSEE WERE NOT CITED EITHER BEFORE THE A.O. OR BEFORE THE LD. CIT( A) SO THEY HAVE NO OCCASION TO GO THROUGH THOSE DECISION AND TO SEE THEIR APPLI CABILITY TO THE FACTS OF THE ASSESSEES CASE. IN THE PRESENT CASE, IT IS ALSO NO T CLEAR AS TO WHETHER THE 4 ASSESSEE ROUTED THE IMPUGNED AMOUNT THROUGH THE P&L ACCOUNT OR NOT. WE THEREFORE DEEM IT APPROPRIATE TO SET ASIDE THIS ISS UE BACK TO THE FILE OF THE A.O. TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFT ER CONSIDERING THE AFORESAID REFERRED TO DECISIONS RELIED BY THE LD. C OUNSEL FOR THE ASSESSEE AND VERIFYING FROM THE RECORD AS TO WHETHER IMPUGNED AM OUNT WAS ROUTED THROUGH THE P&L ACCOUNT OR NOT. 12. THE FACTS AND ISSUE INVOLVED IN ITA NO. 475 TO 479/CHD/2018 FOR THE A.YS 2009-10 TO 2012-13 ARE SIMILAR TO THE FACTS AND ISS UES INVOLVED IN ITA NO. 475/CHD/2018 FOR THE A.Y. 2008-09 WHICH WE HAVE ALR EADY ADJUDICATED IN THE FORMER PART OF THIS ORDER, THEREFORE OUR FINDINGS FOR THE ASSESSMENT YEAR 2008 -09 SHALL APPLY MUTATIS MUTANDIS FOR ALL THE APPEALS UN DER CONSIDERATION FOR THE A.YS 2009-10 TO 2012-13. 13. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLO WED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 05/12/2019) SD/- SD/- # ++ ,..-, (SANJAY GARG ) ( N.K. SAI NI) & '(/ JUDICIAL MEMBER ! / VICE PRESIDENT AG DATE: 05/12/2019 (/ ! 01 21 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. $ 3 / CIT 4. $ 3 ()/ THE CIT(A) 5. 16+ 7, & 7, 89:+;/ DR, ITAT, CHANDIGARH 6. +: <%/ GUARD FILE