M/s Kerala Minerals and Metals Ltd, Kollam V. ACIT, Kollam

ITA 543/COCH/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4509 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 16-06-2011
• Assessment Year: misc
• Appeal Filed On: 17-11-2009
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI
• Assessee Lawyers: R RAJASEKHARAN CAAR
• Keywords: Revised return
• Section: 143(3); 139(5)

Judgement Text

ITA NO. 543/COCH/2009 (AY 1999- 2000) 1 IN THE INCOME TAX APPELLAT E TRIBUNAL COCHIN BEN CH, COCHIN BEFORE S/SHRI N.VIJAYAKUMARAN, JM AND SANJAY AR ORA, AM I.T.A. NO. 543/COCH/2009 ASSESSMENT YEAR:1999-2000 KERALA MINERALS & METALS LTD., SANKARAMANGALAM, CHAVARA, KOLLAM. [PAN: AAACT 8118R] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, KOLLAM. (ASSESSEE -APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI R.RAJASEKHARAN, CA-AR REVENUE BY SHRI S.R.SENAPATI, SR.DR O R D E R PER SANJAY ARORA, AM: THIS APPEAL BY THE ASSESSEE, A PUBLIC SECTOR UNDER TAKING OF THE STATE GOVERNMENT, IS DIRECTED AGAINST THE ORDER BY THE COMMISSIONER O F INCOME-TAX (APPEALS)-I, TRIVANDRUM (CIT(A) FOR SHORT) DATED 16.9.2009, AN D THE ASSESSMENT YEAR UNDER REFERENCE IS 1999-2000 2.1 THE ONLY ISSUE ARISING IN APPEAL, IT WAS URGED BY THE LD. AR, THE ASSESSEES COUNSEL, IS WHETHER THE REVISED RETURN FILED BY THE ASSESSEE ON 22.3.2001 IS A VALID RETURN U/S. 139(5) OF THE INCOME-TAX ACT, 1961 (`THE ACT HEREINAFTER) OR NOT. RECOUNTING THE FACTS IN BRIEF, IT WAS EXPLAINED THAT THE ASSESSEE FILED ITS ORIGINAL RETURN FOR THE RELEVANT YEAR AT AN INCOME OF ` 8626.51 LAKHS. THE SAME WAS PROCESSED U/S. 143(1) AT THE RETURNED INCOME, AND INTIMATION U/S. 143(1)(A) OF THE ACT IS SUED (COPY ON RECORD ). THE ASSESSEE, HOWEVER, FILED A REVISED RETURN ON 22.3.2001 , REVISING ITS INCOME TO A LOWER SUM OF ` 8312.49 LAKHS. ON THE SAME BEING NOT PROCESSED AND TAKEN COGNIZANCE OF, THE MATTER WAS CARRIED TO THE FIRST APPELLATE AUTHORITY, WHICH , VIDE ITS ORDER DATED 9.9.2004 (IN I.T.A. NO. 147-Q/01-02), DIRECTED THE ASSESSING AUTHORITY TO VERIFY WHETHER THE REVISED RETURN ITA NO. 543/COCH/2009 (AY 1999- 2000) 2 FILED BY THE ASSESSEE WAS A VALID RETURN UNDER THE ACT. THE ASSESSING OFFICER (AO), IN THE APPEAL-EFFECT GIVING PROCEEDINGS, STATED VIDE ORDER DATED 26.5.2005 THAT THE SECOND RETURN FILED BY THE ASSESSEE WAS NOT A VALID REVISION U/S. 139(5) AS IT WAS FILED AFTER THE PROCESSING OF THE ORIGINAL RETURN OF INCOME. THE SA ID ORDER, HOWEVER, DID NOT BEAR THE DATE OF THE SAID PROCESSING OR THE ISSUE OF THE INTIMATI ON UNDER REFERENCE. IN THE APPELLATE PROCEEDINGS, THE ASSESSEE FILED THE COPY OF THE INT IMATION DATED 30.3.2001 , WHICH AMPLY CLARIFIED THAT THE ORDER OF THE AO BORE A MISTAKE, AS THE PROCESSING U/S. 143(1) WAS ONLY AFTER THE FILING OF THE SECOND RETURN, AND THE REVE NUES OBJECTION THUS NOT VALID. THIS PROCESS, AS IT APPEARS, STOOD REPEATED, WITH THE FI RST APPELLATE AUTHORITY PASSING ANOTHER SET ASIDE/REMAND ORDER (NO. 60Q/2005-06 DATED 16.01.200 7), TO, NO EFFECT; THE AO CONFIRMING HIS EARLIER STAND VIDE ORDER DATED 28/5/ 2007. THE LD. CIT(A), FINALLY, DISALLOWED THE ASSESSEES CLAIM, DOUBTING THE AUTHE NTICITY OF `ITS INTIMATION, AS THAT ON THE RECORD OF THE DEPARTMENT DID NOT BEAR EITHER TH E DATE OF ITS PASSING OR THE D&C (DEMAND AND COLLECTION) NUMBER, WHILE THAT FURNISHE D BY THE ASSESSEE CONTAINED BOTH. 2.2 THE ASSESSEE, IT WAS FURTHER URGED BY HIM, HAS NO CONTROL OVER THE RECORDS MAINTAINED BY THE DEPARTMENT AND, THUS, COULD IN NO MANNER BE PENALIZED FOR THE SAME. IN ANY CASE, IF IN DOUBT, THE LD. CIT(A) OUGHT TO H AVE VERIFIED THE FACTS WITH REFERENCE TO THE D&C NO., RATHER THAN PROCEEDING TO HOLD THAT TH E ASSESSEE HAD FAILED TO ESTABLISH THE GENUINENESS OF THE INTIMATION FURNISHED BY IT AND, CONSEQUENTLY, ITS CLAIM. FURTHER ON, IRRESPECTIVE OF THE DATE OF INTIMATION, I.E., WHETH ER BEFORE OR AFTER 22.3.2001, AN INTIMATION U/S. 143(1)(A) DOES NOT CONSTITUTE AN `A SSESSMENT AND, AS SUCH, THE RETURN FILED ON THAT DATE (22.3.2001) IS A VALID RETURN U/S. 139 (5) AND, THUS, IS TO BE TAKEN ON RECORD, AND TAKEN COGNIZANCE OF BY THE DEPARTMENT. TOWARD T HE SAME, HE CITED THE DECISION IN THE CASE OF CIT (ASST.) VS. RAJESH JHAVERI STOCK BROKERS PVT. L TD. (2007) 291 ITR 500 (SC) AND S.R. KOSHTI VS. CIT , 276 ITR 165 (GUJ). 2.3 THE LD. DR, ON THE OTHER HAND, STRONGLY REFUTED THE ASSESSEES CLAIM. IT IS ONLY THE DOCUMENT ON RECORD WHICH COULD BE TAKEN COGNIZANCE OF BY THE LD. CIT(A), AND NOT WITH THE ASSESSEE, WHICH IS NOT BINDING ON THE REVENUE. AS SUCH, NO INFIRMITY ATTENDS THE ITA NO. 543/COCH/2009 (AY 1999- 2000) 3 INFERENCE BY THE LD. CIT(A) THAT THE ASSESSEE HAS B EEN UNABLE TO PROVE ITS CLAIM OF THE REVISION OF ITS RETURN AS HAVING BEEN MADE PRIOR TO THE PROCESSING OF ITS (ORIGINAL) RETURN U/S. 143(1)(A) AND, THUS, BEING VALID IN LAW. AS RE GARDS THE ASSESSEES ARGUMENT THAT THE INTIMATION U/S. 143(1) OF THE ACT DOES NOT CONSTITU TE AN ASSESSMENT INASMUCH AS THE SAME IS NOT AN ASSESSMENT U/S. 143(3) OR U/S. 144, THE P ROVISION OF S. 139(5) EMPLOYS THE TERM `ASSESSMENT AND NOT `REGULAR ASSESSMENT, WHICH (L ATTER) ONLY IS DEFINED U/S. 2(40) TO MEAN AN ASSESSMENT MADE U/S. 143(3) OR U/S. 144. SE C. 143(1) IS ONLY A FORM OF ASSESSMENT, AS THE HEADING OF THE SECTION WOULD CLA RIFY; THE SECTION ITSELF FALLING UNDER CHAPTER XIV TITLED PROCEDURE FOR ASSESSMENT. 3. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 3.1 WE FIND THE REVENUES CASE AS NOT MAINTAINA BLE. AS CLARIFIED BY THE APEX COURT IN THE CASE OF CIT (ASST.) VS. RAJESH JHAVERI STOCK BROKERS PVT. L TD. (SUPRA), THERE HAVE BEEN SUBSTANTIAL AND MATERIAL CHANGES IN SEC. 143(1) W.E .F. APRIL 1, 1989. THE EXTANT LAW ONLY ALLOWED THE ASSESSING OFFICER TO MAKE CERTAIN PRIMA FACIE ADJUSTMENTS THERE-UNDER TO THE RETURNED INCOME. FURTHER, THE SAME IS WITHOUT PREJU DICE TO THE PROVISION OF S. 143(2), SO THAT THE PROCESSING OF THE RETURN U/S. 143(1) WOULD NOT PRECLUDE THE ASSESSING OFFICER FROM INITIATING ACTION THERE-UNDER AND FRAMING AN A SSESSMENT U/S. 143(3). IT WAS EXPLAINED THAT, THEREFORE, THERE IS A CONCEPTUAL DI FFERENCE BETWEEN THE TWO PROVISIONS, I.E., SS. 143(1) AND 143(3), OF THE ACT. NO DOUBT, AS AR GUED BY THE LD. DR, THE SAID DECISION WAS IN A DIFFERENT CONTEXT, I.E., THE MAINTAINABILI TY OF THE ACTION U/S. 147 IN VIEW OF ABSENCE OF ANY REGULAR ASSESSMENT; THE SAME IS, HOW EVER, RELEVANT IN-AS-MUCH AS IT CLARIFIES THAT AN INTIMATION U/S. 143(1)(A), WHICH IS WITHOUT PREJUDICE TO S. 143(2), CANNOT BE EQUATED WITH AN ASSESSMENT. IN FACT, PER SUB-SE CTION (1B) TO SECTION 143, THE LAW ITSELF PROVIDES FOR FURNISHING A REVISED RETURN SUBSEQUENT TO THE ISSUE OF AN INTIMATION U/S. 143(1). THAT IS, THE SAID PROVISION, INSERTED BY FI NANCE ACT, 1996 W.R.E.F. 1.4.1989, ABUNDANTLY CLARIFIES THAT THE ISSUE OF AN INTIMATIO N U/S. 143(1) WOULD NOT OPERATE TO BAR THE REVISION OF A RETURN PROCESSED, WHERE IT IS OTH ERWISE IN TERMS OF THE RELEVANT SECTION, I.E., S. 139(5), SETTLING ANY CONTROVERSY THAT MAY HAVE EXISTED IN THE MATTER. THE DECISION IN THE CASE OF S.R. KOSHTI VS. CIT (SUPRA) IS ALSO SQUARELY ON THE POINT. ITA NO. 543/COCH/2009 (AY 1999- 2000) 4 3.2 IN VIEW OF THE FOREGOING, WE FIND NO MERIT IN T HE REVENUES CASE IN DECLINING TO TAKE THE ASSESSEES REVISED RETURN FILED ON 22.3.20 01 ON RECORD, AND ACCORD DUE COGNIZANCE THERETO. WITH REGARD TO THE SECOND CONTE NTION, WHICH WE MAY NOT DWELL THERE- UPON FOR THE REASON OF HAVING ADJUDICATED THE MATTE R ON THE BASIS OF THE VALIDITY OF THE RETURN, FOLLOWING THE CLEAR LAW IN THE MATTER, SO T HAT THE SAME BECOMES SUPERFLUOUS. HOWEVER, WE MAY ADD THAT IT IS INDEED UNFORTUNATE T HAT THE DEPARTMENT HAS, FIRSTLY, ISSUED AN UNDATED AND INCOMPLETE INTIMATION AND, SECONDLY, DECLINES TO VERIFY THE AUTHENTICITY OF THE ASSESSEES CLAIM, MADE WITH REFERENCE A DOCUMEN T ISSUED BY IT, EVEN AS THE VERY EXISTENCE OF TWO DIFFERENT `INTIMATIONS QUA A PARTICULAR PROCESSING SHOULD ITSELF BE A CAUSE OF CONCERN AND CONSTERNATION. THE MISSING ING REDIENTS ARE ESSENTIAL FOR THE VALIDITY AND INTEGRITY OF THE SAID DOCUMENT. WE COULD UNDERS TAND A CONTROVERSY; THE ONUS TO RESOLVE WHICH AGAIN WOULD AGAIN LIE ON THE REVENUE, WHERE THE INTIMATION ON RECORD WITH THE DEPARTMENT SHOWED DIFFERENT PARTICULARS, I.E., A DIFFERENT DATE AND D&C NO. COULD AN ORDER BE UNDATED ? FURTHER, COULD IT YET BE CONSIDERED AS FINAL ? THE D&C NO. SHOULD IN FACT PROVIDE AN INSTANT ANSWER OR AT LEAST A LEAD I N THE MATTER. IT IS FOR WANT OF PROPER CARE AND REGARD TO THE BASIC PRINCIPLES OF NATURAL JUSTI CE THAT THE ASSESSEE HAS BEEN PUT THROUGH CONSIDERABLE EXERCISE, NECESSITATING AN APPEAL BEFO RE THE TRIBUNAL, AS WELL AS THRICE BEFORE THE FIRST APPELLATE AUTHORITY, CONSUMING A TIME PER IOD OF OVER A DECADE. WE CLOSE THE MATTER WITH THESE COMMENTS. 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 15TH JULY, 2011 GJ COPY TO: 1. M/S. KERALA MINERALS & METALS LTD., SANKARAMANGA LAM, CHAVARA, KOLLAM. ITA NO. 543/COCH/2009 (AY 1999- 2000) 5 2. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE -1, KOLLAM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, TRIV ANDRUM. 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE .