M/S SHREE SHYAM SPONGE & POWER PVT LTD, RAIPUR (CG) V. THE PR. COMMISSIONER OF INCOME TAX, BHOPAL

ITA 54/BIL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9243 (ITAT-RAIPUR)
• Duration Of Justice: 5 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 06-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Period of limitation; Set aside
• Section: 43B; 143(3); 153A; 13; 153; 263; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI PAWAN SINGH , JUDICIAL MEMBER I.T.A. NO. 54 /RPR/2016 FOR ( A Y : 20 08 - 09 ) M/S. S HREE SHYAM SPONGE & POWER PVT. LTD., 1 ST FLOOR, MAHAMAYA TOWE R, G.E. ROAD, RAIPUR (CG) V S. P RINCIPAL COMMISSIONER OF INCOME TAX ( CENTRAL ), BHOPAL . PAN NO. AAHCS 1901 N (APPELLANT) (RESPONDENT) ASSESSEE BY : S HRI VEEKAAS S SHARMA , CA. DEPARTMENT BY : SHRI P.K. MISHRA , CIT - DR DATE OF HEAR ING : 1 0 /08/2021. DATE OF PRONOUNCEMENT : 10 /08/2021. ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH , J UDICIAL M EMBER : 1. TH IS APPEAL FILED BY THE A SSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX , HEREINAFTER CALLED AS LD . P CIT BHOPAL , DATED 08 .0 2.2016 FOR THE A.Y. 20 08 - 09 . THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. PR. COMMISSIONER OF INCOME - TAX HAS ERRED IN RE - OPENING THE ASSESSMENT U/S 263 OF THE INCOME - TAX ACT, 1961 AND ERRED IN DIRECTING THE ASSESSING OFFICER TO PASS ASSESSMENT ORDER DE - NOVO AFTER MAKING INQUIRIES ON THE POINTS SET OUT IN THE NOTICE, WHICH WERE ALREADY EXAMINED AND CONSIDERED DURING ORIGINAL ASSESSMENT P ROCEEDINGS. 2. THE ORDER OF THE LD. PR. COMMISSIONER OF INCOME - TAX IS BAD IN LAW AND ON FACTS . M/S. SHREE SHYAM SPONGE & POWER PVT. LTD. ITA NO. 54 /RPR/201 6 2 3. THE APPELLANT RESERVES THE RIGHT TO ADD, AMEND, ALTER AND OMIT ALL OR ANY OF THE GROUNDS OF APPEAL WITH PERMISSION OF THE HON'BLE A PPELLATE A UTHORITY. 2. BRIE F FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF PRODUCTION OF SPONGE IRON FROM IRON ORE . THE ASSESSEE FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR (AY) 2008 - 09 ON 22.09.2008 DECLARING INCOME OF RS. 61,30,610/ - . A SEARCH ACTION UNDER SECTION 132 WAS CARRIED OUT IN ASSESSEES GROUP ON 21/06/2011 . IN SEARCH ACTION, CERTAIN INCRIMINATING EVIDENCES WERE FOUND. CONSEQUENT UPON SEARCH, NOTICE UNDER SECTION 153A WAS SERVED ON THE ASSESSEE . IN RESPONSE TO THE NOTICE UNDER SECT ION 153A, THE ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2008 - 09 ON 08.08.2012 . THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS COM P LETED UNDER SECTION 153A R.W.S. 143(3) ON 27/03/2014 . THE ASSESSING OFFICER (AO) WHILE PASSING THE ASSESSMENT ORDER MA DE ADDITIONS ON ACCOUNT OF SUPPRESSION OF PRODUCTION OF YIELD . SUBSEQUENTLY, THE ASSESSMENT WAS REVISED BY LD. PCIT VIDE ORDER DATED 08/02/2016. THE LD. PCIT BEFORE PASSING THE ORDER UNDER SECTION 263 ISSUED A COMBINED SHOW - CAUSE NOTICE DATED 28/05/2016 FOR THE A.YS. 2006 - 07 TO 2012 - 13 . FOR ASSESSMENT YEAR UNDER CONSIDERATION, THE LD. PCIT IDENTIFIED SPECIFIC ISSUE THAT TAX AUDIT REPORT REVEALS THE PROVISIONS OF PAYMENTS LIKE BONUS, PROFESSIONAL TAX, COMMERCIAL TAX AND ENTRY TAX ETC. A ND THAT THE AO HAS NOT EXAMINED/INVESTIGATE D THIS ISSUE . 3. IN RESPONSE TO THE SHOW - CAUSE NOTICE, THE ASSESSEE FILED ITS REPLY . IN THE REPLY T HE ASSESSEE SPECIFICALLY STATED THAT THE OBSERVATION IN THE SHOW - CAUSE M/S. SHREE SHYAM SPONGE & POWER PVT. LTD. ITA NO. 54 /RPR/201 6 3 NOTICE IS NOT CORRECT. THE AO HAS CALLED FOR TAX AUDIT REPORT A ND ALSO BOOKS OF ACCOUNT ALONG WITH BILLS AND VOUCHERS. THE ASSESSEE FURNISHED AUDIT REPORT AND PROVIDED PARTICULARS OF PAYMENTS MADE THEREIN B EFORE DUE DATE OF FILING OF RETURN. THE DETAILS CONTAINED THEREIN ARE SELF - EXPLANATORY AND NO FURTHER DISALLOWA NCE UNDER SECTION 43B OF THE ACT WAS CALLED FOR . THEREFORE , THE ASSESSMENT ORDER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST S OF THE REVENUE AND THAT REVISION IS NOT JUSTIFIED . THE REPLY OF THE ASSESSEE WAS NOT ACCEPTED BY THE LD. PCIT . THE LD. PCIT HELD THAT THE AO DID NOT EXAMINE OR INVESTIGATED THE ISSUE MENTIONED IN THE SHOW - CAUSE NOTICE. THE AO MADE ASSESSMENT WITHOUT CONDUCTING PROPER ENQUIRY WHICH IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE AO WAS DIRECTED TO CARRY O UT NECESSARY ENQUIRIES FOR LIMITED ISSUES. AGGRIEVED BY THE ORDER OF LD. PCIT , THE ASSESSEE HAS FILED THE PRESENT APPEAL BE F ORE THIS TRIBUNAL. 4. WE HAVE HEARD THE SUBMISSIONS OF L EARNED AUTHORISED REPRESENTATIVE (AR) FOR THE ASSESSEE AND THE LEARNED COMMISS IONER OF INCOME TAX - DEPARTMENTAL REPRESENTATIVE ( CIT - DR) FOR THE R EVENUE AND HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. THE LD. AR OF THE ASSESSEE SUBMITS THAT A SEARCH ACTION WAS CARRIED OUT ON ASSESSEES GROUP ON 21/06/2011 . CONSEQUENT UPON SEA RCH, THE ASSESSMENT WAS COMPLETED UNDER SECTION 153A R.W.S. 143(3) FOR A.Y S . 2006 - 07 TO 2012 - 13 IN A COMMON ASSESSMENT ORDER DATED 27/03/2014 . THE LD. PCIT BY EXERCISING POWERS CONFERRED UNDER SECTION M/S. SHREE SHYAM SPONGE & POWER PVT. LTD. ITA NO. 54 /RPR/201 6 4 263 HELD THAT ASSESSMENT ORDER PASSED UNDER SECTION 15 3A R.W.S. 143(3) IS ERRONEOUS ON CERTAIN ISSUES AND SET ASIDE THE CASE FOR DENOVO ASSESSMENT. THE LD.AR OF THE ASSESSEE SUBMITS THAT O N THE DATE OF SEARCH OPERATION UNDER SECTION 132, THE ASSESSMENT PROCEEDINGS FOR THE A.Y. 2008 - 09 HAD ATTAINED FINALITY M UCH PRIOR TO THE SEARCH ACTION. A CCORDINGLY, COMPLETED ASSESSMENT CANNOT BE DISTURBED IN ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE SEARCH AS HAS BEEN HELD BY HON'BLE DELHI HIGH COURT IN PCIT VS MEETA GUTGUIA IN ITA NO. 306 TO 310 OF 2017 . THE AO WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 153 A R.W.S. 143(3) HAD NOT REFERRED ABOUT ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE LD.AR OF THE ASSESSEE STRESSED THAT EVEN IN THE ORDER OF LD. PCIT , THERE IS NO REFERENCE OR WHISP ER ABOUT ANY INCRIMINATING MATERIAL BASED ON WHICH THE ASSESSMENT ORDER HAS BEEN HELD ERRONEOUS. THEREFORE , THE ASSUMPTION OF JURISDICTION UNDER SECTION 263 IS BAD IN LAW AT THE THRESHOLD AND SUBSEQUENT ACTION BEING BAD IN LAW AND VOID AB - IN I T I O . 5. ON THE O THER HAND, LD. CIT - DR OF THE REVENUE SUPPORTED THE ORDER OF THE LD.PCIT. THE LD. CIT - DR SUBMITS THAT THE AO HAS NOT CONDUCTED PROPER ENQUIRIES, ON VARIOUS PROVISIONS MADE IN THE TAX AUDIT REPORT AND NO DISALLOWANCE UNDER SECTION 43B WAS MADE BY THE AO. AC CORDINGLY, ASSESSMENT ORDER UNDER SECTION 153A R.W.S. 143(3) IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE . M/S. SHREE SHYAM SPONGE & POWER PVT. LTD. ITA NO. 54 /RPR/201 6 5 6. WE HAVE CONSIDERED THE RIVAL SUBMISS I ONS OF BOTH THE PARTIES AND GONE THROUGH THE RECORDS OF THE CASE CAREFULLY. THERE IS NO DISPUTE THAT A SEARCH ACTION WAS CARRIED OUT ON THE ASSESSEE S GROUP. CONSEQUENT UPON SEARCH, ASSESSMENT UNDER SECTION 153A R.W.S. 143(3) WAS COMPLETED ON 27/03/2014 . A PERUSAL OF ASSESSMENT ORDER REVEALS THAT THERE WAS NO INCRIMINATING MATERIAL WITH REGARD TO THE ISSUE IDENTIFIED BY LD. PCIT FOR REVISING THE ASSESSMENT ORDER . IT IS AN ADMI TTED POSITION UNDER THE LAW THAT AT THE TIME OF SEARCH , ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS NOT PENDING, THEREFORE THE ASSESSMENT FOR THE A.Y. 2008 - 09 REMAINED UNABATED. FURTHER, IN THE ASSESSMENT ORDER PASSED UNDER SECTION 153A R.W.S. 143(3), THERE WAS NO ISSUE THAT ANY INCRIMINATING MATERIAL WITH REGARD TO DISALLOWANCE UNDER SECTION 43B WAS PASSED . 7. SINCE THE ISSUE IDENTIFIED BY THE LD. PCIT WAS NOT THE SUBJECT MATTER OF ASSESSMENT COMPLETED UNDER SECTION 153A R.W.S. 143(3). THE ISSUE RELATING TO DISALLOWANCE UNDER SECTION 43B COULD BE THE SUBJECT MATTER OF REGULAR ASSESSMENT ALONE . REGULAR ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION HAS ALREADY BEEN EXPIRED WHEN SEARCH ACTION UNDER SECTION 132 WAS CARRIED OUT ON 21/06/2011. THEREFORE , THE TIME LIMIT FOR REVISING THE ASSE SSMENT ORDER , IF ANY , FOR A.Y. 2008 - 09 COULD BE PASSED WITHIN TWO YEARS FROM THE END OF FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED. ADMITTEDLY, THE IMPUGNED ORDER IS PASSED BY THE LD. PCIT ON 08/02/2016 WHICH IS MUCH BEYOND THE PRESCRIBED PERIOD OF LIMITATION OF TWO M/S. SHREE SHYAM SPONGE & POWER PVT. LTD. ITA NO. 54 /RPR/201 6 6 YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR. OUR VIEW IS ALSO SUPPORTED BY THE DECISION OF HON 'BLE SUPREME COURT IN CIT VS ALAGENDRAN FINANCE LT D . [162 TAXMAN 465] (SC) AND BOMBAY HIGH COURT IN CIT VS. ICICI BANK LD., [19 TAXMANN.COM 142] (BOMBAY) . ACCORDINGLY, THE ACTION INITIATED UNDER SECTION 263 IS BARRED BY TIME PERIOD PRESCRIBED UNDER SECTIO N 263(2) OF THE ACT. THUS, THE REVISION ORDER PASSED QUA A.Y. 2008 - 09 IS BAD IN LAW AND SUBSEQUENT ACTION INITIATED THEREIN IS VOID AB - INITIO. CONSIDERING, THE FACTS THAT WE HAVE QUASHED THE REVISION ORDER ON LIMITATION ISSUE ONLY, THEREFORE, DISCUSSIONS ON THE MERITS OF THE CASE HAVE BECOME ACADEMIC. IN THE RESULT THE GROUNDS OF THE APPEAL IS ALLOWED. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 1 0 - 08 - 2021 BY PLACING RESULT ON NOTICE BOARD. S D/ - SD/ - (PRADIP KUMAR KE DIA) ( PAWAN SINGH ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH AUGUST, 2021 VR S PS COPY TO: 1. THE ASSESSEE - M/S. SHREE SHYAM SPONGE & POWER PVT. LTD., 1 ST FLO OR, MAHAMAYA TOWER, G.E. ROAD, RAIPUR (CG) 2. THE REVENUE PR. CIT (CENTRAL), BHOPAL . 3. THE D.R., RAIPUR. 4. GUARD FILE . BY ORDER SR. PRIVATE SECRETARY, ITAT, RAIPUR (ON TOUR).