M/s. Tirupati Polymers, Delhi V. CIT- VII, New Delhi

ITA 5704/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6580 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 20-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 21-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: IPS BINDRA
• Keywords: Assessment record; Condonation of delay
• Section: 143(3); 263; 139

Judgement Text

1 ITA NO. 5704/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI R. S. SYAL, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JU DICIAL MEMBER I.T.A .NO.- 5704/DEL/2014 (ASSESSMENT YEAR 2009-10) TIRUPATI POLYMERS RAJIV SAXENA & CO. (ADVOCATES & SOLICITORS) 318, POCKET-D, MAYUR VIHAR-II DELHI AAEFT6692F (APPELLANT) VS CIT(A) - VII NEW DELHI (RESPONDENT) APPELLANT BY SH. RAJEEV SAXENA, ADV RESPONDENT BY SH. I. P. S. BINDRA, CIT DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED AGAINST THE ORDER DATED 28/03/ 2014 PASSED BY THE CIT-VII, NEW DELHI, U/S 263 OF THE IN COME-TAX ACT 1961. DATE OF HEARING 20.10.2016 DATE OF PRONOUNCEMENT 05 .12.2016 2 ITA NO. 5704/DEL/2014 2. APPLICATION FOR CONDONATION OF DELAY WAS FILED B Y THE ASSESSEE BY GIVING REASONS THE DELAY IS CONDONED AN D THE APPEAL IS HEARD ON MERIT HEREINAFTER. 3. THE GROUNDS OF APPEAL ARE AS FOLLOWS:- 1. THAT THE LD. COMMISSIONER OF INCOME TAX, DELHI-VII HAS ERRED IN LAWS AS WELL AS ON FACTS IN SETTING ASIDE THE ORDER DATED 16/12/2011 PASSED U/S 143() BY THE ASSESSING OFFICER , ITO, WARD 21(4), NEW DELHI BECA USE OF AMONGST THE FOLLOWING GROUNDS: (A) THE ASSESSMENT MADE IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE. (B) THE BASIS OF ACTION TAKEN U/S 263 I.E ASSESSMEN T ORDER FOR ASSESSMENT YEAR 2010-11 PASSED BY ITO, NAHAN, HIMACHAL PRADESH DATED 23/3/2013 WAS WITHOUT JURISDICTION. (C) ITO, NAHAN HAS NOT EXAMINED THE FACTS OF THE PR ESENT CASE FROM THE ASSESSMENT RECORDS OF 2009-10 WHICH W AS THE FIRST YEAR OF CLAIM U/S 80 IC. (D) THE LD.CIT(A) AND ITO, NAHAN HAVE NOT APPRECIAT ED THAT ASSETS TRANSFERRED TO HIMACHAL PRADESH WERE MUCH BELOW 20% AND SO DEDUCTION U/S 80 IC CANNOT BE DENI ED. 2. THE LD. CIT HAS NO JURISDICTION TO TAKE ACTION U /S 263 ONCE THE ASSESSMENT RECORDS WERE TRANSFERRED BY ITO , DELHI TO ITO, NAHAN AND THE ORDER FOR ASSESSMENT YEAR 2010-1 1 WAS PASSED BY THE INCOME TAX OFFICER, NAHAN ON 23/3/201 3. 3 ITA NO. 5704/DEL/2014 4. THE ASSESSEE FIRM IS ENGAGED IN BUSINESS OF MANU FACTURING OF RUBBER SHEET, RUBBER FLOOR MATS, AUTO PARTS ETC. T HE ASSESSEE FIRM HAS SHOWN TURNOVER OF RS.2,33,89,255/- AND AS DECLA RED GROSS PROFIT OF RS.72,93,227/- GIVING THEREBY G. P RATIO OF 31.18% AS COMPARED TO TURNOVER OF RS.54,69,965/- GROSS PROFIT OF RS.9,27,780/- AND G.P RATIO OF 16.96% IN THE PREVIO US YEAR. SINCE, THE G.P RATE IS BETTER AS COMPARED TO LAST Y EAR, TRADING RESULTS OF THE ASSESSEE ARE NOT DISTURBED. 5. THE CIT-VII HAS PASSED ORDER U/S 263 OF THE INC OME-TAX ACT 1961 BY GIVING PROPER JUSTIFICATION FOR DIRECTING T HE ASSESSING OFFICER TO MAKE THE FRESH ASSESSMENT AS PER THE PR OVISIONS OF LAW AFTER VERIFYING OF THE FACTS AND EVIDENCES SUBMITTE D BY THE ASSESSEE AS WELL AS MATERIAL ON RECORD. THE CIT-VI I, OBSERVED THAT THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2009-10 WA S PASSED BY ITO, WARD-21 (4) U/S 143(3) ON 16/12/2011 AT RETURN NIL INCOME AFTER ALLOWING DEDUCTION OF RS.21,84,263/- CLAIM BY THE ASSESSEE U/S 80IC OF THE INCOME TAX ACT 1961. AS THE FACTS AND CIRCUMSTANCES FOR THE ASSESSMENT YEAR 2010-11 IN WH ICH DEDUCTION U/S 80IC WAS DISALLOWED. THE SAME CLEARL Y REVEALED THAT DEDUCTION U/S 80IC HAS BEEN WRONGLY ALLOWED IN ASSESSMENT YEAR 2009-10. THE SAME IS ERRONEOUS AND PREJUDICIA L TO THE INTEREST OF REVENUE AS AMOUNT OF RS.21,84,263/- WAS WRONGLY 4 ITA NO. 5704/DEL/2014 ALLOWED AS DEDUCTION U/S 80IC. THE SAME HAD ESCAPE D ASSESSMENT FOR TAXATION. 6. THE LD. AR SUBMITTED THAT THE CIT, DOES HAVE JUR ISDICTION TO PASS ORDER U/S 263 FOR THE ASSESSMENT YEAR 2009-10, AS THE ASSESSEE IS FILING RETURNS AS WELL AS HAVING HIS BU SINESS IN HIMACHAL PRADESH & ASSESSING OFFICER NAHAN HIS JUR ISDICTION FOR THE ASSESSMENT OF THE ASSESSEE. THE LD. AR SUBMITT ED THAT THE REVENUE HAS NOT PRODUCED ANY ORDER U/S 127 OF THE I NCOME TAX ACT AND HAS NOT GIVEN ANY OPPORTUNITY BY TRANSFERRI NG THE MATTER TO NEW DELHI. ON MERIT, THE LD. AR SUBMITTED THAT THERE WAS NO MANUFACTURING ACTIVITY FOR THE ASSESSMENT YEAR 2007 -08 & 2008- 09 & ASSESSMENT YEAR 2009-10 IS THE FIRST ASSESSMEN T. THEREFORE, THE DEDUCTION U/S 80IC HAS TO BE ALLOWED. THE LD. AR RELIED ON VARIOUS CASE LAWS IN RESPECT OF CHALLENGING THE JUR ISDICTION OF CIT FOR PASSING ORDER U/S 263 AS WELL AS ON MERIT. 7. THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER, NEW DELHI I.E. ITO, WARD-21(4) SINCE THE BEGINNING WAS HAVING THE JURISDICTION FOR THE ASSESSMENT PROCEEDINGS OF THE ASSESSEE AS THE DOCUMENTS FILED BY THE ASSESSEE REVEALED THAT THE P ARTNER OF THE ASSESSEE IN HIS CAPACITY AS A PARTNER OF THE ASSESS EE GIVEN HIS RESIDENTIAL ADDRESS WHICH IS AT NEW DELHI. THOUGH THE RETURN FOR ASSESSMENT YEAR 2009-10 WAS PHYSICALLY FILED BY THE ASSESSEE IN HIMACHAL PRADESH THE WORD 21(4) IS A CORRECT ASSESS ING THEM FOR 5 ITA NO. 5704/DEL/2014 THE ASSESSEE. THEREFORE, ORDER U/S 263 IS PROPERLY PASSED BY THE CIT-VII, AND PROPER JURISDICTION IS BESTOWED UPON T HE CIT-VII. U/S 124 SUB SECTION 3 NO PERSON SHALL BE ENTITLED T O QUESTION THE JURISDICTION OF AN ASSESSING OFFICER WHERE HE HAS M ADE A RETURN UNDER SUB SECTION 1 OF SECTION 139 AFTER EXPIRY OF ONE MONTH FROM THE DATE OF WHICH HE WAS SERVED WITH A NOTICE UNDER SUB SECTION OF SECTION 142 OR SUB SECTION 2 OF SECTION 143 OR A FTER THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER. THIS CLEARLY SHOWS THAT THE ASSESSEE DOES NOT HAVE ANY VALID LEG AL SUPPORT FOR CHALLENGING THE JURISDICTION OF THE ASSESSING OFFIC ER AS WELL AS THE CONCERNED CIT. THEREFORE, ORDER U/S 263 OF THE ACT PASSED BY THE CIT-VII WHO IS THE JURISDICTION CONCERNING TO ITO, WARD-21(4) IS A VALID ORDER. ON MERIT, THE LD. DR SUBMITTED THAT T HE ASSESSING OFFICER HAS NOT AT ALL DISCUSSED ABOUT ANYTHING REL ATED TO THE DEDUCTION U/S 80IC AND THUS IT IS NECESSARY FOR THE CIT PASSED ORDER U/S 263 OF THE ACT WHEN THE ORDER IS ERRONEOU S AND PRE- JUDICIAL TO THE INTEREST OF THE REVENUE. 8. WE HAVE HEARD BOTH THE SIDES. THE ASSESSEE IS I N THE HABIT OF FILING RETURN OF INCOME AS PER HIS OWN CONVENIENCE HE HAS AT NO POINT OF TIME, CHALLENGED ANY OF THE ASSESSING OFFI CERS JURISDICTION EITHER THAT OF DELHI OR THAT OF NAHAN (HP). SECTIO N 124(3) ALSO CLEARLY MAKES IT A POINT THAT NO PERSON SHALL BE EN TITLED TO QUESTION THE JURISDICTION OF AN ASSESSING OFFICER. IF THE 6 ITA NO. 5704/DEL/2014 JURISDICTION OF ASSESSING OFFICER IS NOT CHALLENGED BY THE ASSESSEE AT ANY POINT OF TIME THEN THE JURISDICTION OF THE C ONCERNED CIT CANNOT BE CHALLENGED AT THE LATER POINT, BECAUSE TH E JURISDICTION OF A PARTICULAR ASSESSING OFFICER IS A PRIMARILY TO TH E ZONE ASSIGNED TO THAT OFFICER AND ON WHICH LATEST JURISDICTION OF CIT DERIVES. AS SUCH IN THIS PARTICULAR CASE ITO, WARD-21 (4) WAS I N THE CHARGE OF CIT-VII, WHICH WAS NEVER DOUBTED BY THE ASSESSEE. T HE CONTENTION OF THE LD. AR THAT IN 2010-11 ASSESSING OFFICER WAS THAT OF ITO, NAHAN AND, THEREFORE, WHEN THE ASSESSMENT PROCEEDIN GS WERE TRANSFERRED TO ITO, NAHAN, CIT-VII WILL NOT HAVE AN Y JURISDICTION. THIS ARGUMENT DOES NOT SUSTAIN AS THIS IS A CASE FO R ASSESSMENT YEAR 2009-10 AND NOT THAT OF 2010-11. IF THE CASE WAS THAT OF ASSESSMENT YEAR 2010-11 WHICH WAS ASSESSED BY ITO, NAHAN THEN DEFINITELY CIT-VII WILL NOT HAVE ANY JURISDICT ION FOR PASSING ORDER U/S 263 OF THE ACT. BUT ASSESSMENT YEAR 2009 -10, ITO, WARD 21(4) WAS COMING UNDER THE CHARGE OF CIT-VII, AND IT IS THE RIGHT JURISDICTION OF CIT-VII, WHICH HAS BEEN AVAIL ED BY PASSING ORDER U/S 263 OF THE ACT. ON MERIT, THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2009-10 HAS NOT AT ALL DISCUSSED 80 IC DEDUCTION AND ITS ALLOWANCE TO THE ASSESSEE. THE ORDER PASSE D BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO T HE INTEREST OF THE REVENUE WHICH HAS GUIDED THE CIT-VII TO PASS ORDER U/S 263 OF THE ACT. IT IS NOT A CASE OF THE ASSESSEE THAT FAIR OPP ORTUNITY WAS NOT 7 ITA NO. 5704/DEL/2014 GIVEN TO THE ASSESSEE BEFORE PASSING ORDER U/S 263 OF THE ACT. THE CASE LAWS CITED BY THE LD. AR WILL NOT BE APPLICABL E IN THE ASSESSEES CASE AS AT NO POINT OF TIME THE ASSESSEE HAS OBJECTED OR CHALLENGE THE JURISDICTION OF ANY OF THE ASSESSING OFFICER WHETHER THAT OF DELHI OR HIMACHAL PRADESH, NAHAN. IN FACT SECTION 124(3) OF THE ACT WHICH CLEARLY STATES THAT NO PERSON SHAL L BE ENTITLED TO CALL QUESTION THE JURISDICTION OF ASSESSING OFFICER AFTER THE EXPIRY OF ONE MONTH FROM THE DATE ON WHICH HE WAS SERVED W ITH A NOTICE UNDER SUB-SECTION 1 OF SECTION 142 OR SUB SECTION 2 OF SECTION 143 OR AFTER THE COMPLETION OF THE ASSESSMENT WHICH EVER IS EARLIER. THEREFORE, APPEAL OF THE ASSESSEE IS DISMISSED. 9. IN RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 05 TH OF DECEMBER, 2016. SD/- SD/- (R.S. SYAL) (SUC HITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05/12/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR 8 ITA NO. 5704/DEL/2014 ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 20.10.2016 PS 2. DRAFT PLACED BEFORE AUTHOR 21.10.2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS .12.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK .12.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 9 ITA NO. 5704/DEL/2014