Satya Power and Ispat Ltd., Bilaspur V. Deputy Commissioner of Income Tax, Central Circle-2, Raipur

ITA 51/RPR/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4767 (ITAT-RAIPUR)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 27-05-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA
• Assessee Lawyers: AMIT MALOO JAIN
• Keywords: Period of limitation; Assessment record; Time period of passing order; Capital Gains
• Section: 143(3); 153A; 143(1); 143(2); 13; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI N. K. CHOUDHRY, JUDICIAL MEMBER ./ I.T.A. NOS.51 & 52/RPR/2021 ( / ASSESSMENT YEAR : 2012-13 & 2013-14) SATYA POWER AND ISPAT LTD., FIRST FLOOR, V R PLAZA, LINK ROAD, BILASPUR-495001 (CG) / VS. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, RAIPUR ./ ./ PAN/GIR NO. : AAHCS 4472 N ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI AMIT M ALOO JAIN, CA / RESPONDENT BY : SHRI P.K. MISHRA, CIT-DR / DATE OF HEARING 30.07.2021 / DATE OF PRONOUNCEMENT 29.09.2021 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE REVISIONAL ORDERS OF THE PRINC IPAL COMMISSIONER OF INCOME TAX (CENTRAL) (PCIT IN SHORT), BHOPAL O F EVEN DATED 30.03.2021 PASSED UNDER SECTION 263 OF THE INCOME T AX ACT, 1961 (THE ACT IN SHORT) WHEREBY THE ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER (AO IN SHORT) DATED 28.12.2018 UNDER SECTION 153A R.W.S. 143(3) OF THE ACT CONCERNING ASSESSMENT YEARS (AY IN SHORT) 2012-13 & 2013-14 WERE SOUGHT TO BE SET A SIDE FOR REFRAMING THE ASSESSMENT IN TERMS OF SUPERVISORY JU RISDICTION. 2. AS PER ITS GROUNDS OF APPEAL, THE ASSESSEE HAS C HALLENGED THE REVISIONAL ACTION OF THE PCIT WHEREBY THE AO WAS DI RECTED TO PASS THE ASSESSMENT ORDER DE NOVO AFTER MAKING INQUIRIES ON THE POINTS SET OUT IN THE NOTICE WHICH IS STATED TO HAVE ALREA DY BEEN EXAMINED ITA NOS.51 & 52/RPR/2021 SATYA POWER AND ISPAT LTD VS. DCIT AY : 2012-13 & 2013-14 - 2 - AND CONSIDERED DURING THE ORIGINAL ASSESSMENT PROCE EDINGS CONCERNING AYS 2012-13 & 2013-14. THE ASSESSEE HAS CHALLENGED THE ASSUMPTION OF JURISDICTION BY THE PCIT UNDER SE CTION 263 OF THE ACT ESSENTIALLY ON THE GROUND THAT THE ASSESSMENT O RDER UNDER REVISION IS NEITHER ERRONEOUS NOR PREJUDICIAL TO TH E INTEREST OF THE REVENUE. 3. THE RELEVANT FACTS, IN BRIEF, ARE THAT THE RETUR N OF INCOME FILED BY THE ASSESSEE FOR ASSESSMENT YEARS 2012-13 WAS SU BJECTED TO SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 24.02.2015. SIMILARLY, THE RETURN OF INCOME FILED FOR ASSESSMENT YEAR 2013-14 WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AND STOOD CONCLUDED ON 30.09.2014 IN THE AB SENCE OF ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. SUBSEQUENTLY, AFTER BOTH THE RETURNS STOOD CONCLUDED, A SEARCH WA S CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 08.02.2017. ASSESS MENT WAS CONSEQUENTLY CARRIED OUT UNDER SECTION 153A R.W.S. 143(3) OF THE ACT VIDE ORDER DATED 28.12.2018 FOR BOTH THE ASSESS MENT YEARS IN QUESTION. 4. SUBSEQUENTLY, THE REVISIONAL AUTHORITY, I.E. PCI T, CALLED FOR THE ASSESSMENT RECORDS AND OPINED THAT THE ASSESSME NT SO PASSED UNDER SECTION 153A OF THE ACT SUFFERS FROM THE VICE OF BEING ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. CONSEQUENTLY, SHOW-CAUSE NOTICE DATED 10.03.2021 WA S ISSUED UNDER SECTION 263 OF THE ACT FOR BOTH THE ASSESSMENT YEAR S. IN TERMS OF THE SHOW-CAUSE NOTICE, IT WAS ALLEGED THAT THE ASSESSIN G OFFICER HAS FAILED TO MAKE INQUIRIES AND VERIFICATIONS THAT SHO ULD HAVE BEEN MADE TO ASCERTAIN THE LEGITIMACY OF THE LONG TERM C APITAL GAIN (LTCG) CLAIMED AS EXEMPT UNDER SECTION 10(38) OF TH E ACT IN THE WAKE OF THE FACT THAT SUCH LTCG WAS EARNED BY PURCH ASE AND SALE OF ITA NOS.51 & 52/RPR/2021 SATYA POWER AND ISPAT LTD VS. DCIT AY : 2012-13 & 2013-14 - 3 - SHARES OF REGENCY TRUST LTD. WHICH IS BRANDED AS PE NNY STOCK COMPANY. THE CAPITAL GAINS AROSE ON SUCH TRANSACTI ONS OF REGENCY TRUST LTD. AMOUNTS TO RS.49,35,753/- AND RS.2,55,65 0/- FOR ASSESSMENT YEARS 2012-13 AND 2013-14 RESPECTIVELY. IN RESPONSE, THE ASSESSEE EXPLAINED THAT SPECIFIC QUERIES WERE R AISED IN THE COURSE OF SEARCH ASSESSMENT IN THIS REGARD AND AFTE R VERIFICATION OF THE RELEVANT DETAILS, BILLS, BANK PAYMENTS ETC., TH E TRANSACTION GIVING RISE TO THE LTCG WAS ACCEPTED AS BONAFIDE. IT WAS T HUS CONTENDED BEFORE THE PCIT THAT PROVISIONS OF SECTION 263 IS N OT ATTRACTED IN THE FACTUAL MATRIX. THE PCIT, HOWEVER, DID NOT AGRE E WITH THE CONTENTIONS OF THE ASSESSEE TOWARDS LEGITIMACY OF T HE LTCG IN QUESTION AND HELD THAT THE ASSESSMENTS FOR ASSESSME NT YEARS 2012- 13 AND 2013-14 IN QUESTION ARE ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE CONSEQUENTLY SET A SIDE THE ASSESSMENTS CARRIED OUT UNDER SECTION 153A WITH REF ERENCE TO THE ABOVE SAID ISSUE FOR PROPER VERIFICATION. AGGRIEVE D, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL. 5. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED COUNSEL FOR THE ASSESSEE, AT THE OUTSET, ADVERTED OUR ATTEN TION TO THE ADDITIONAL GROUND TAKEN BY THE ASSESSEE AND CLAIMED THAT JURISDICTION EXERCISED BY THE REVISIONAL AUTHORITY WITH REFERENCE TO IMPUGNED ORDER UNDER SECTION 153A IN ITSELF IS TIME BARRED UNDER SECTION 263(2) OF THE ACT. 6. THE ISSUE BEING FUNDAMENTAL AND GOES TO THE ROOT OF THE MATTER, THE ADDITIONAL GROUND SO RAISED IS ADMITTED FOR ADJUDICATION. 7. THE LEARNED COUNSEL, IN SUPPORT OF THE ADDITIONA L GROUND, POINTED OUT THAT THE ASSESSMENTS IN THE INSTANCE CA SE WERE EARLIER STOOD CONCLUDED EITHER UNDER SECTION 143(1) OR UNDE R SECTION 143(3) ITA NOS.51 & 52/RPR/2021 SATYA POWER AND ISPAT LTD VS. DCIT AY : 2012-13 & 2013-14 - 4 - OF THE ACT PRIOR TO SEARCH. CONSEQUENTLY, IN THE S EARCH ASSESSMENT UNDER SECTION 153A, IT WAS INCUMBENT UPON THE ASSES SING OFFICER TO DIVULGE THE DETAILS OF INCRIMINATING MATERIAL CONNE CTED TO THE ISSUES INVOLVING ADDITIONS/DISALLOWANCES. IT IS AN ADMITT ED POSITION THAT NO INCRIMINATING DOCUMENTS WERE FOUND IN THE COURSE OF SEARCH IN RELATION TO PURCHASE AND SALE TRANSACTIONS OF REGEN CY TRUST LTD. THE CONTRACT NOTES, THE MODE OF PAYMENTS ETC. WERE ALREADY RECORDED IN THE BOOKS AND DULY ASSESSED AT THE PREVIOUS OCCA SION. HENCE, THE IMPUGNED ISSUE TOWARDS LEGITIMACY OF THE LTCG ARISI NG FROM PURCHASE AND SALE OF CERTAIN SHARES IN A CONCLUDED ASSESSMENT IS PROHIBITED IN THE WAKE OF JUDICIAL PRECEDENTS. THU S, WHERE THE ASSESSING OFFICER HIMSELF WAS NOT AUTHORIZED IN LAW TO MAKE ADDITIONS/DISALLOWANCES ON THE SCORE, THE PCIT COUL D NOT HAVE DIRECTED FURTHER INQUIRIES ON THE BASIS OF REVISION AL POWERS CONFERRED UNDER SECTION 263 OF THE ACT. THE ONLY R ECOURSE AVAILABLE TO THE PCIT IN THE INSTANT CASE WAS TO SEEK REVISIO N WITH REFERENCE TO THE ORIGINAL ASSESSMENT ALREADY CONCLUDED. IT W AS THEREAFTER POINTED OUT THAT, WHEN SEEN WITH REFERENCE TO THE O RIGINAL ASSESSMENT, THE TIME LIMIT AVAILABLE UNDER SECTION 263(2) OF THE ACT STANDS ALREADY EXPIRED AT THE TIME OF ISSUE OF NOTI CE. THE ISSUANCE OF NOTICE UNDER SECTION 263(1) IS THUS TIME BARRED AND THE ENTIRE SUBSEQUENT PROCEEDINGS ARE NON EST IN LAW. THE REVISIONAL ORDER PASSED IN CONSEQUENCE OF SUCH NON EST NOTICE IS THUS BAD IN LAW. THE LEARNED COUNSEL FOR THE ASSESSEE MADE REFERENCE TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALAGENDRAN FINANCE LTD (2007) 293 ITR 0001 AND THE DECISIONS O F HONBLE HIGH COURT IN THE CASE OF CWT VS. A.K. THANGA PILLAI (20 01) 252 ITR 260 (MAD); CIT VS. KANUBHAI ENGINEERS (P.) LTD. (20 00) 241 ITR 665 (CAL) FOR THE PROPOSITION THAT AN ISSUE WHICH I S NOT THE SUBJECT MATTER OF THE ASSESSMENT ORDER UNDER REVISION COULD NOT BE REVISED ITA NOS.51 & 52/RPR/2021 SATYA POWER AND ISPAT LTD VS. DCIT AY : 2012-13 & 2013-14 - 5 - UNDER SECTION 263 OF THE ACT AND THE PERIOD OF LIMI TATION PROVIDED UNDER SECTION 263(2) OF THE ACT WOULD BEGIN TO RUN FROM THE DATE OF THE ORDER OF THE ORIGINAL ASSESSMENT AND NOT FROM T HE SUBSEQUENT ORDER OF REASSESSMENT OR SEARCH ASSESSMENT. 8. ON MERITS, IT WAS CONTENDED THAT A SPECIFIC QUER Y WAS RAISED FOR SALE OF SHARES AND THE ASSESSEE HAS GIVEN REPLY CORROBORATED WITH DOCUMENTARY EVIDENCES IN THIS REGARD; AND, THEREFOR E, THE ACTION OF THE ASSESSING OFFICER IS AFTER DUE APPLICATION OF M IND FOLLOWED BY APPROVAL THEREOF BY THE JCIT UNDER SECTION 153D OF THE ACT. THE LEARNED COUNSEL THUS SUBMITTED THAT THE NOTICE ISSU ED UNDER SECTION 263 OF THE ACT DOES NOT STAND THE TEST OF LEGITIMAC Y BOTH ON ACCOUNT OF BEING BARRED BY LIMITATION AND ALSO ON MERITS. H E THUS URGED FOR CANCELLATION OF REVISIONAL ORDER PASSED IN CONSEQUE NCE OF A NON EST SHOW-CAUSE NOTICE. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, RELIED UPON THE CONTENTS OF THE REVISIONAL ORDER UN DER CHALLENGE. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. WE STRAIGHT AWAY NOTICE THE FACTS NARRATED ABOVE AND F IND THAT IN THE ABSENCE OF INCRIMINATING DOCUMENTS SHOWN TO HAVE BE EN FOUND IN THE COURSE OF SEARCH, THE ASSESSING OFFICER WAS PRE CLUDED FROM MAKING ANY ADDITIONS/DISALLOWANCES ON THE ISSUE IN THE SEARCH ASSESSMENT UNDER SECTION 153A OF THE ACT WHERE BOTH THE ASSESSMENTS IN QUESTION STOOD CONCLUDED AND REMAINE D UNABATED AT THE TIME OF SEARCH. THE POSITION OF LAW ON THIS PO INT IS WELL SETTLED AND DOES NOT REQUIRE ELABORATION. THUS, WE FIND MER IT IN THE PLEA OF THE ASSESSEE THAT LIMITATION PERIOD IN SUCH CASE WI LL HAVE TO BE RECKONED FROM THE ORIGINAL ASSESSMENT AND NOT WITH REFERENCE TO THE SUBSEQUENT POST SEARCH ASSESSMENT WHICH IS SOUGHT T O BE REVISED. ITA NOS.51 & 52/RPR/2021 SATYA POWER AND ISPAT LTD VS. DCIT AY : 2012-13 & 2013-14 - 6 - WHEN SEEN WITH REFERENCE TO THE ORIGINAL ASSESSMENT S FOR THE RESPECTIVE ASSESSMENT YEARS, APPARENTLY THE LIMITAT ION PERIOD FOR ISSUANCE OF NOTICE PRESCRIBED UNDER SECTION 263(2) OF THE ACT STOOD EXPIRED. THE SHOW-CAUSE NOTICE ISSUED UNDER SECTIO N 263(1) OF THE ACT IS THUS, AT THE THRESHOLD, TIME BARRED AND THUS NON EST . THE CONSEQUENTIAL REVISIONAL ORDER UNDER SECTION 263 FO R BOTH THE ASSESSMENT YEARS GIVING DIRECTIONS TO THE ASSESSING OFFICER FOR REVISION OF THE IMPUGNED ASSESSMENT ORDERS PASSED U NDER SECTION 153A OF THE ACT THUS CANNOT SURVIVE. THE REVISIONA L ORDERS SO PASSED ARE THUS QUASHED. 11. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. PRONOUNCED ON 29.09.2021 AS PER RULE 34(4) OF THE I NCOME TAX APPELLATE TRIBUNAL RULES,1963. SD/- SD/- (N. K. CHOUDHRY) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMB ER BT TRUE COPY / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. , , / DR, ITAT, RAIPUR 6. / GUARD FILE. BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR