Vyas Realties Pvt. Ltd,., Pune V. DCIT, Range-7, Pune

ITA 566/PUN/2011

• Counselvise Citation: 56624514 RSA 2011
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 29-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TEJENDRA SINGH
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NOS. 566 & 567/PN/2011 (ASSTT. YEARS: 2006-07 & 2007-08) VYAS REALTIES PVT. LTD. ... APPELLANT 1206/4A, VYAS VERTEX, JANGALI MAHRAJ ROAD, PUNE 411 004 PAN : AABCV7092D V. ITO, WARD IV, PUNE RESPONDENT APPELLANT BY : SHRI S.N. PURANIK RESPONDENT BY : SHRI TEJENDRA SINGH DATE OF HEARING : 01.12.11 DATE OF PRONOUNCEMENT: 23.1 2.11 ORDER PER I.C. SUDHIR, JM IN THESE APPEALS, IN COMMON GROUND NO.1, THE ASSE SSEE HAS QUESTIONED VALIDITY OF NOTICE ISSUED U/S. 263 AS WITHOUT JURI SDICTION AND ALSO THE ORDER PASSED U/S. 263 AS BAD IN LAW. 2. GROUND NO. 2 WHICH IS ALSO COMMON IN BOTH THE AP PEALS, IS AN ALTERNATIVE GROUND WHEREIN THE ASSESSEE HAS QUESTIONED ACTION O F THE LD CIT IN INVOKING 2 ITA . NOS. 566 & 567/PN/2011 VYAS REALTIES PVT. LTD. A.YS. 2006-07&2007-08 PAGE OF 5 PROVISIONS OF SECTION 263 AND DIRECTING THE A.O TO RE-COMPUTE INCOME IN SPITE OF THIS FACT THAT A.O HAD CONDUCTED SURVEY TO VERIFY THE CO MPLIANCE OF ALL THE CONDITIONS U/S. 80 IB (10), AND THE ASSESSEE HAD SUBMITTED DETAILE D NOTES ALONG WITH COPIES OF AGREEMENTS. THE ISSUES WERE DISCUSSED IN DEPTH DURI NG ASSESSMENT PROCEEDINGS, IN RESPECT OF TRANSACTIONS WITH SCRIPS SCROLL (INDIA) PVT. LTD. IT HAS ALSO BEEN CONTENDED THAT OFFICE NOTE BY A.O. CONTENDS SATISF ACTION BY HIM ON VARIOUS ISSUES INCLUDING SALARY TO GREECE VYAS ETC., RAISED IN THE A.Y. 2007-08. 3. IN GROUND NO. 3, THE CONTENTION OF THE ASSESSEE IS THAT ITEM DISCUSSED IN PARA NO. 8 OF THE ORDER U/S. 263 IN A.Y. 2006-07 AND ITE MS DISCUSSED IN PARA NOS. 8 TO 11, 14 TO 28 OF THE SEC. 263 ORDER IN A.Y. 2007-08 WERE NEVER PART OF THE NOTICE ISSUED U/S. 263 NOR WERE DISCUSSED/RAISED ANY TIME DURING THE PROCEEDINGS. GROUND NO.1 4. IN SUPPORT OF GROUND NO. 1, THE LD. A.R. SUBMITT ED THAT THE LD CIT HAS NOT GIVEN ANY POSITIVE FINDING THAT THE ASSESSMENT ORDE RS FOR THE A.YS. UNDER CONSIDERATION ARE ERRONEOUS WHICH IS MANDATORY TO I NVOKE THE JURISDICTION U/S. 263 OF THE ACT. HE POINTED OUT THAT EVEN IN THE SHOW C AUSE NOTICE ISSUED U/S. 263 OF THE ACT, THE LD CIT HAS NOWHERE PROPOSED THAT AS PER HI M THE ASSESSMENT ORDERS IN QUESTION ARE ERRONEOUS. BOTH THE SHOW CAUSE NOTICE S AND ORDERS U/S. 263 IN QUESTION HAVE BEEN ISSUED/PASSED ON THE BASIS THAT ASSESSMENT ORDERS ARE PREJUDICIAL TO THE INTEREST OF REVENUE. HE CONTEND ED THAT FOR INVOKING THE PROVISION OF SEC. 263 OF THE ACT, IT IS PRE-REQUISITE FOR THE EXERCISES OF JURISDICTION BY THE COMMISSIONER THAT THERE MUST BE FINDING OF THE COMM ISSIONER THAT THE ASSESSMENT ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED ABOUT THE CONDITI ONS NAMELY (I) THE ORDER OF THE 3 ITA . NOS. 566 & 567/PN/2011 VYAS REALTIES PVT. LTD. A.YS. 2006-07&2007-08 PAGE OF 5 A.O SOUGHT TO BE REVISED IS ERRONEOUS; (II) IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. IF ONE OF THEM IS ABSENT RECOURSE CAN NO T BE HAD TO SEC. 263 OF THE ACT. THE LD. A.R. PLACED RELIANCE ON THE FOLLOWING DECI SIONS : 1. CIT V/S. GREEN WORLD CORPORATION, 314 ITR 81(SC ) 2. MALABAR INDUSTRIAL CO. LTD. VS. CIT, 243 ITR 83 (SC) 3. JEWEL OF INDIA VS. ACIT, 325 ITR 92 (BOM) 4. CIT V/S. ASHISH RAJPAL, 320 ITR 674 (DEL.) 5. CIT V/S. ANIL KUMAR SHARMA, 335 ITR 83 (DEL.) 5. THE LD. A.R. SUBMITTED FURTHER THAT BEFORE THE A.O, THE ASSESSEE HAD FURNISHED ALL THE NECESSARY INFORMATION REQUIRED B Y THE A.O ON THE ISSUES RELATING TO CLAIMED DEDUCTION U/S. 80IB(10), REMUNERATION TO DI RECTORS, CONSTRUCTION AT BANGALORE ETC., IN SUPPORT, HE REFERRED PAGE NOS. 299 TO 423 OF THE PAPER BOOK. THESE ARE THE COPIES OF SUBMISSION MADE BY THE ASSE SSEE TIME TO TIME BEFORE THE A.O. THE LD. A.R. SUBMITTED THAT THE A.O HAS FRAM ED THE ASSESSMENT IN A.YS. UNDER CONSIDERATION AFTER APPLICATION OF HIS MIND. THUS IT IS NOT A CASE OF NON- APPLICATION OF MIND BY THE A.O WHILE GRANTING RELI EF TO THE ASSESSEE. 6. THE LD. D.R., ON THE OTHER HAND, TRIED TO JUSTIF Y THE ORDERS PASSED U/S. 263 OF THE ACT QUESTIONED IN THE APPEALS. 7. CONSIDERING THE ABOVE SUBMISSIONS, WE FULLY CONC UR WITH THE CONTENTION OF THE LD. A.R. WHICH IS ALSO WELL SUPPORTED BY THE DECI SIONS RELIED UPON BY HIM THAT THE JURISDICTION U/S. 263 CAN BE EXERCISED ONLY WHEN B OTH THE FOLLOWING ARE SATISFIED, FIRSTLY, THE ORDER OF THE A.O SHOULD BE ERRONEOUS A ND SECONDLY, IT SHOULD BE PREJUDICIAL TO THE INTEREST OF REVENUE. THESE CONDI TIONS ARE CONJECTIVE. AN ORDER OF ASSESSMENT PASSED BY THE A.O SHOULD NOT BE INTERFER ED WITH ONLY BECAUSE ANOTHER 4 ITA . NOS. 566 & 567/PN/2011 VYAS REALTIES PVT. LTD. A.YS. 2006-07&2007-08 PAGE OF 5 VIEW IS POSSIBLE. SIMILAR VIEW HAS BEEN EXPRESSED BY THE HONBLE SUPREME COURT IN ITS RECENT DECISION IN THE CASE OF CIT V/S. GREEN W ORD CORPORATION & OTHERS (SUPRA). IN ITS RECENT DECISION , THE HONBLE JURISDICTIONA L BOMBAY HIGH COURT IN THE CASE OF JEWEL OF INDIA VS. ACIT (SUPRA), WHILE DEALING WITH THE APPEAL HAS BEEN PLEASED TO HOLD THAT THE ORDER WAS FOUND TO BE ERRONEOUS BY TH E REVISIONAL AUTHORITY BUT NOWHERE THE FINDING WAS RECORDED THAT THE ORDER PAS SED BY THE A.O WAS PREJUDICIAL TO THE INTEREST OF REVENUE. IN THE ABSENCE OF A POS ITIVE FINDING THAT THE ORDER WAS NOT IN THE INTEREST OF REVENUE, IT WAS NOT OPEN FO R THE REVISIONAL AUTHORITY TO ASSUME JURISDICTION. THE ORDER OF REVISION WAS NOT VALID, HELD THE HONBLE HIGH COURT. IN THE CASE OF MALABAR INDUSTRIAL COMPANY L TD., VS. CIT (SUPRA), THE HONBLE SUPREME COURT HAS BEEN PLEASED TO HOLD THAT THE PH RASE PREJUDICIAL TO THE INTEREST OF REVENUE U/S. 263 HAS TO BE READ IN CONJUNCTI ON WITH THE EXPRESSION ERRONEOUS PASSED BY THE A.O. UNDISPUTEDLY, IN TH E PRESENT CASE, THERE IS NO FINDING OF THE LD. CIT IN THE ORDERS U/S. 263 IMP UGNED THAT THE ASSESSMENT ORDERS ON THE ISSUES DISCUSSED BY HIM ARE ERRONEOUS. IN A BSENCE OF SUCH FINDING BY THE LD. CIT AS REQUIRED U/S. 263 OF THE ACT, MERE SAYING TH AT THE ASSESSMENT ORDERS ON THOSE ISSUES ARE PREJUDICIAL TO THE INTEREST OF REV ENUE IS NOT SUFFICE TO ACQUIRE JURISDICTION U/S. 263 OF THE ACT BY HIM. WE THUS RESPECTFULLY FOLLOWING THE ABOVE CITED DECISIONS OF HONBLE SUPREME COURT AS WELL AS HONBLE JURISDICTIONAL HIGH COURT HOLD THAT THE REVISIONAL ORDERS IN QUESTION ARE BAD IN LAW AND THE SAME ARE QUASHED AS SUCH. THE GROUND NO. 1 OF THE APPEAL IS ACCORDINGLY ALLOWED. 8. IN VIEW OF THE ABOVE FINDING ON VALIDITY OF THE REVISIONAL ORDERS IN QUESTION, THE ALTERNATIVE GROUND NO. 2 AND GROUND NO. 3 DO NO T SURVIVE AND HENCE DO NOT NEED ADJUDICATION. THE SAME ARE DISPOSED OFF ACCORD INGLY, WITHOUT COMMENTING ON 5 ITA . NOS. 566 & 567/PN/2011 VYAS REALTIES PVT. LTD. A.YS. 2006-07&2007-08 PAGE OF 5 MERITS THEREOF. 9. IN THE RESULT, APPEALS ARE ALLOWED. THE ORDER IS PRONOUNCED IN OPEN COURT ON 23.12.2011. SD/- SD/- (G.S. PANNU) (I.C. SUDHIR) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED THE 23RD DECEMBER, 2011 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT -IV, PUNE 4. THE D.R. B BENCH, PUNE 5. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE