CONCRETE DEVELOPERS , NAGPUR V. PRINCIPAL COMMISSIONER OF INCOME TAX-2, , NAGPUR

ITA 60/NAG/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3365 (ITAT-NAGPUR)
• Duration Of Justice: 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 08-07-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Difference of opinion; Assessment record; Retraction; Condonation of delay; Change of opinion
• Section: 263; 132; 143(3); 153A

Judgement Text

आयकर अपीलȣय अͬधकरण Ûयायपीठ, नागप ु र मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL BENCH, NAGPUR (Through Virtual Hearing at Raipur) BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI JAMLAPPA D BATTULL, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 60/NAG/2021 Ǔनधा[रण वष[ / Assessment Year : 2013-14 M/s. Concrete Developers 151/152 Anjali Apartment Gandhi Nagar, Nagpur-440 016 (MH) PAN : AAAFC6294L .......अपीलाथȸ / Appellant बनाम / V/s. The Pr. Commissioner of Income Tax, Central, Nagpur. ......Ĥ×यथȸ / Respondent Assessee by : Shri Mahavir Atal, CA Revenue by : Shri Pradeep Headoo, CIT-DR स ु नवाई कȧ तारȣख / Date of Hearing : 17.02.2022 घोषणा कȧ तारȣख / Date of Pronouncement : 29.04.2022 2 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 आदेश/ ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the Pr. Commissioner of Income Tax (Central), Nagpur (for short ‘Pr. CIT’) u/s.263 of the Income-tax Act, 1961 (for short ‘the Act’), dated 30.03.2021, which in turn arises from the order passed by the A.O under Sec. 143(3) r.w.s 153A of the Act, dated 30.11.2017 for assessment year 2013-14. Before us the assessee has assailed the impugned order on the following grounds of appeal: “1. Whether the revision order passed by the leaned Pr. Commissioner of Income Tax by taking a recourse to section 263 on change of opinion is illegal and bad in law. 2. Whether the learned Pr. Commissioner of Income Tax u/s.263 is also required to record satisfaction that the approval given under section 153D was also erroneous,while revising the order passed under section 153A r.w.s. 143(3). In the absence of such satisfaction whether the order passed by the Learned Pr. Commissioner of Income Tax is illegal and bad in law. 3. Whether the revision order passed by the learned Pr. Commissioner of Income Tax without referring to the relevant clause of Explanation 2 is illegal and bad in law. 4. Appellant craves leave to add or alter any other ground at the time of hearing.” 3 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 2. At the very outset, it was submitted by the Ld. Authorized Representative (for short “A.R”) for the assessee that the present appeal involves a delay of 41 days. As regards the reasons leading to the aforesaid delay, it is the claim of the assessee before us that the Hon’ble Supreme Court vide its order dated 27.04.2021 in Miscellaneous Application No.665/2021 had extended the period of limitation as prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings, and the period of limitation from 01.03.2020 to 19.07.2021 has been excluded till further order.Backed by the aforesaid fact, it was submitted by the Ld. AR that as the delay involved in filing of the present appeal was for reasons beyond the control of the assessee, therefore, the same in all fairness be condoned. 2.1. Per contra, the Ld. Departmental Representative (in short ‘DR’) did not object to the seeking of condonation of delay involved in filing of the appeal by the assessee. 4 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 2.2. We have heard the ld. Authorized Representatives for both the parties and perused the reasons leading to the delay in filing of the present appeal. After giving a thoughtful consideration, we are of the considered view that as the delay in filing of the present appeal had occasioned for reasons which were beyond the control of the assessee and not on account of any lackadaisical approach on its part, therefore, its request for condonation of the delay involved in filing of the appeal merits acceptance. 3. Succinctly stated, the assessee firm which is engaged in the business of construction of residential and commercial complexes was subjected to search proceedings u/s 132 of the Act on 01.12.2015. Subsequent to the search proceedings return of income was filed by the assessee u/s.153A of the Act on 16.03.2016, declaring an income of Rs.1,33,19,430/-. Assessment was thereafter framed by the Assessing Officer vide his order passed u/s.143(3) r.w.s. 153A of the Act, dated 30.11.2017, determining the income of the assessee at Rs.2,98,03,930/-. 5 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 3.1 After culmination of the assessment proceedings the Pr. CIT called for the assessment records of the assessee firm. It was observed by the Pr. CIT that the ACIT, Central Circle -1(1), Nagpur pursuant to a search that was conducted in the case of M/s. Nagpur Neuro Science Clinic Pvt. Ltd. (for short ‘NNSCPL’), Nagpur had on the basis of an incriminating document, i.e., a loose sheet that was seized in the course of the aforesaid search proceedings shared certain information with the Assessing Officer. As per the aforesaid information, the assesee firm had over a period of 2-3 years, i.e., from 18.10.2011 to 24.02.2013 received an amount of Rs.1.10 crore [out of which an amount of Rs. 55 lacs and Rs. 30 lacs was paid in cash on the various dates during A.Y 2012-13 and A.Y 2013-14 (i.e the year under consideration)] towards construction of a hospital. It was observed by the Pr. CIT that the factum of the aforementioned payments was confirmed by Dr. Chandrashekhar Pakhmude, Director of M/s. NNSCPL in his statement recorded during the course of search proceedings. Observing that the Assessing Officer had failed to consider the aforesaid cash receipt while framing the assessment for the year under 6 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 consideration, the Pr. CIT holding a conviction that the same thus had rendered the order passed by him as erroneous in so far it was prejudicial to the interest of the revenue, therein called upon the assessee to explain as to why it may not be revised u/s.263 of the Act. 4. In reply, the assesee came forth with multiple contentions to impress upon the Pr. CIT that the Assessing Officer had framed the assessment after due application of mind and the order passed by him being as per the mandate of law was not amenable for revision u/s 263 of the Act, viz. (i) that Dr. Chandrashekhar Pakhmude(supra) had in his subsequent statement recorded on 20.03.2017 and also, in the course of his cross-examination by the assesee had retracted from his earlier statement that was recorded in the course of the search proceedings u/s.132(4) of the Act, for the reason that the same was recorded under due pressure; and (ii) that the Assessing Officer had carried out detailed verification qua the issue in question, i.e., impugned receipt of cash payment of Rs. 70 lacs (supra) from M/s. NNSCPL and had only after being satisfied not drawn any adverse inferences while framing the assessment. However, the Pr. CIT was 7 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 not persuaded to subscribe to the aforesaid explanation of the assessee. Observing, that the assessee had admitted of having received cheque payments as were mentioned in the seized document, i.e., loose sheet No.50/Bundle No.1, the Pr. CIT was of the view that the same irrefutably evidenced that the cash payments therein mentioned were also received by the assessee firm. Also, the Pr. CIT did not give any weightage to the retraction of the earlier statement of Dr. Chandrashekar Pakhmude (supra) that was recorded u/s.132(4) of the Act, for the reason, that the same having being done after a substantial lapse of time of recording of the earlier statement was nothing but merely an afterthought. 5. Observing that the seized “loose paper” was the actual account of the assessee firm that was maintained by Dr. Chandrashekhar Pakhmude(supra), the Pr. CIT held a strong conviction that the cash payments therein mentioned were the unaccounted receipts of the assessee firm. Backed by the aforesaid facts, the Pr. CIT being of the view that the Assessing Officer had failed to examine the aforesaid issue, i.e., receipt of unaccounted cash by the assessee during the year 8 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 under consideration, thus, held the order passed by him u/s. 143(3) r.w.s. 153A of the Act dated 30.11.2017 as erroneous in so far as it was prejudicial to the interest of the revenue u/s.263 of the Act and directed him to carry out necessary verifications and frame fresh assessment after conducting necessary enquiries. 6. Aggrieved, the assessee has assailed the order passed by the Pr. CIT u/s.263 of the Act, dated 30.03.2011 in appeal before us. 7. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. Before us, the Ld. Authorized Representative (for short ‘AR’) for the assessee has assailed the order passed by the Pr. CIT u/s.263 of the Act dated 30.03.2021, for the reason that as the Assessing Officer while framing the assessment vide his order u/s. 143(3) r.w.s. 153A, dated 30.11.2017 had after deliberating at length on the issue in question, i.e., receipt of the impugned amount of cash 9 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 of Rs.85 lacs as per seized “ loose paper No.50/Bundle No.1”, only on being satisfied with the explanation of the assessee had refrained from drawing any adverse inferences on the said count, therefore, the Pr. CIT could not have in the garb of his revisional jurisdiction sought substitution of his view as against that arrived at by the Assessing Officer. In order to buttress his aforesaid claim the Ld. AR had taken us through the queries that were raised by the Assessing Officer vide a letter dated 12.10.2017 that was issued by him in the course of the assessment proceedings. Adverting to the queries therein raised, it was submitted by the Ld. AR that the Assessing Officer had specifically called upon the assessee to furnish an explanation as regards the contents of the seized loose sheet No.50/Bundle No.1 (Page No 11/12 of the APB). We find that pursuant to the aforesaid query letter, the assesee had vide its letter dated 17.10.2017 (Page No.13 of APB) sought for a copy of the statement of Dr. Chandrashekhar Pakhmude (supra) that was recorded u/s.132(4) of the Act a/w. a copy of the seized loose sheet No.50/Bundle No.1, which was therein made available by the Assessing Officer (Page No. 14/15 of APB). Also, our 10 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 attention was drawn by the Ld. AR to the fact that pursuant to the request of the assessee, the Assessing Officer had vide his letter dated 23.10.2017 furnished a copy of the statement of Dr. Chandrashekhar Pakhmude (supra) that was recorded u/s. 132(4) of the Act on 11.02.2017 a/w. a copy of the seized “loose sheet No.15/Bundle No.1”. Our attention was also drawn by the Ld. AR to the fact that pursuant to the request of the assessee the Assessing Officer had allowed cross- examination of Dr. Chandrashekhar Pakhmude (supra) on 03.11.2017. The Ld. AR had also taken us through the statement of Dr. Chandrashekhar Pakhmude (supra) that was recorded on 03.11.2017, wherein, on being confronted with the contents of the seized loose sheet No.50/Bundle No.1, he had categorically stated that the contents therein mentioned were “budget estimates” that were prepared in respect of paymentswhich were to be made in the coming period and no cash payment of Rs.70 lac (supra) was made to the assessee firm i.e. M/s. Concrete Developers. It was also submitted by the Ld. AR that Dr. Chandrashekhar Pakhmude (supra) had in his statement recorded u/s.131 of the Act, dated 03.11.2017 retracted from his 11 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 earlier statement that was recorded u/s. 132(4) dated 13.02.2017 and had once again affirmed that no cash payment of Rs.70 lac (supra) was made to the assessee firm i.e. M/s. concrete developers. 8. Backed by the aforesaid facts, it was claimed by the Ld. AR that the issue in question i.e. impugned contents of the loose sheet No.50/ Bundle No.1 had duly been considered and deliberated upon by the Assessing Officer while framing the assessment vide his order u/s. 143(3) r.w.s. 153A of the Act, dated 30.11.2017, wherein he being satisfied with the explanation of the assessee had refrained from drawing any adverse inferences on the basis of the aforementioned impugned notings. In the backdrop of the aforesaid facts, it was claimed by the Ld. AR that as the Assessing Officer had arrived at a possible and a plausible view as regards the issue in question, therefore, the Pr. CIT could not have in the garb of his revisionary jurisdiction u/s.263 of the Act sought substitution of his view as against that arrived at by the Assessing Officer. 12 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 9. Per contra, the Ld. DR relied on the orders of the lower authorities. 10. After giving a thoughtful consideration to the issue in hand in the backdrop of the contentions advanced by the Ld. Authorized Representatives for both the parties, we find substantial force in the claim of the Ld. AR, that now when the Assessing Officer in the course of the assessment proceedings after deliberating at length on the contents of the seized document, i.e., loose sheet No.50/Bundle No.1 and finding the explanation of the assessee in order had accepted the same, therefore, the Pr. CIT was precluded from triggering his revisional jurisdiction with a purpose to substitute his view as against that arrived at by the Assessing Officer. As observed by us hereinabove, the contents of the seized loose sheet No.50/Bundle No.1 reveals the entries of payments, i.e., both in cash and cheque aggregating to Rs.1.10 crore spread over the period 18.10.2011 to 24.02.2013, as under: 13 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 Observing that the aforesaid incriminating document found and seized in the course of the search proceedings from the residential premises of Dr. Chandrashekhar Pakhmude (supra) read a/w the latters Sr. No. Date By Amount 1. 18.10.2011 Cash 1000000 2. 22.10.2011 Cash 1000000 3. 07.01.2012 Cash 1000000 4. 16.01.2012 Cash 1000000 5. 23.01.2012 Cheque 500000 6. 23.01.2012 Cash 500000 7. 11.02.2012 Cheque 1000000 8. 21.02.2012 Cash 1000000 9. 10.03.2012 Cheque 1000000 10. 18.02.2013 Cash 2000000 11. 24.02.2013 Cash 1000000 Total 11000000 14 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 statement recorded u/s 132(4) of the Act in the course of the search proceedings referred to a cash payment of Rs.70 lacs (supra) over and above those made through cheque, the Assessing Officer had vide his letter dated 12.10.2017 called upon the assessee to put forth an explanation as to why the aforesaid amount may not be added to his unaccounted income for the respective years. For the sake of clarity, the aforesaid query that was raised by the Assessing Officer in the course of the assessment proceedings is culled out as under: 15 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 16 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 17 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 In reply, the assesee after obtaining a copy of the statement of Dr. Chandrashekhar Pakhmude (supra) that was recorded u/s.132(4) of the Act a/w. copy of the seized loose sheet No.50/Bundle No.1, had thereafter, on 03.11.2017 cross-examined Dr. Chandrashekhar Pakhmude(supra). On a perusal of the statement of Dr. Chandrashekhar Pakhmude (supra) that was recorded on oath u/s.131 of the Act by the Assessing officer on 03.11.2017, we find that he on being confronted with the contents of the loose sheet No.50/Bundle No.1 that was seized from his residential premises during the course of search proceedings, had categorically stated that the same were in the nature of rough notings and estimation pertaining to the hospital project of MNSCPL whose construction at the relevant point of time was in progress. On being queried as regards his earlier statement that was recorded u/s. 132(4) of the Act dated 13.02.2017, wherein he had stated that the amount of Rs.70 lacs (supra) was paid to the assessee i.e. M/s. Concrete Developers, it was stated by him that he had clarified the said issue in his statement that was recorded by DDIT- III, Nagpur on 20.03.2017 and had clearly mentioned that he had not 18 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 made the aforesaid payment to the assessee firm i.e. M/s. Concrete Developers. It was further stated by him that after verification of the accounts, it was found that no such payment of Rs.70 lacs (supra) was made to the assessee firmi.e. M/s. Concrete Developers. In sum and substance, Dr. Chandrashekhar Pakhmude (supra) had denied of having made any payment of Rs. 70 lacs (supra) by the hospital, viz. M/s. Neuron Brain Spine and Criticare Centre, Dhantoli, Nagpur to M/s. Concrete Developers i.e. the assessee firm. 11. On being confronted with the cheque payment of Rs. 25 lacs (supra), it was stated by Dr. Chandrashekhar Pakhmude (supra) that the payment to the said extent was made to the assessee firm i.e.M/s. Concrete Developers for construction of hospital at Dhantoli, Nagpur. Once again on being confronted with the notings in respect of the balance amount of Rs.85 lacs (supra) mentioned in the aforesaid seized loose paper No.50/Bundle No.1, it was stated by him that the same were rough notings/estimation. Apart from that we find that Dr. Chandrashekhar Pakhmude(supra) on being queried that he had earlier vide Question No. 14/15 of his statement recorded u/s.132(4) of the 19 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 Act, dated 13.02.2017 categorically stated that the cash payments mentioned in the seized loose sheet No.50/Bundle No.1 were payments that were given to M/s. Concrete Developers for construction of Neuron Hospital, had therein stated that as at the relevant point of time he was under significant stress, therefore, he had merely on the basis of a presumption stated that the cash payments in question were made to M/s. Concrete Developers. 12. Also, we find that Dr. Chandrashekhar Pakhmude (supra) in his cross-examination by the assessee had categorically admitted that he had in his statement recorded u/s.132(4), dated 13.02.2017 remaining under significant stress had, therein, wrongly stated that the amount of Rs.70 lacs (supra) mentioned in the seized loose sheet No.50/ Bundle No.1 was paid to the assessee firm i.e.M/s.Concrete Developers. It was also categorically admitted by him that no payment of Rs.70 lacs (supra) was made by the hospital i.e.M/s. Neuron Brain Spine and Criticare Centre, Dhantoli, Nagpur to the assessee firm i.e. M/s.Concrete Developers. In the backdrop of the aforesaid facts, we find that the Assessing Officer in the course of the assessment 20 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 proceedings had queried at length as regards the contents of the seized loose sheet No.50/Bundle No.1 and had after exhaustive deliberations concurred with the assessee that no such payment of Rs.30 lacs(supra) was made by Dr. Chandrashekhar Pakhmude (supra) to the assesee during the year under consideration. 13. In the backdrop of our aforesaid observations, we are of the considered view that now when the Assessing Officer after exhaustive deliberations had accepted the explanation of the assessee and refrained from drawing any adverse inferences in its hand qua the issue in question i.e. contents of the seized loose sheet No.50/Bundle No.1, therefore, the Pr. CIT in the garb of exercise of his revisionary jurisdiction u/s.263 of the Act could not have sought for substitution of his view as against that arrived at by the Assessing Officer. 14. We, thus, not being able to persuade ourselves to subscribe to the exercise of the revisionary jurisdiction by the Pr. CIT u/s.263 of the Act set-aside his order and restore the order passed by the Assessing Officer u/s.143(3) r.w.s. 153A, dated 30.11.2017. Thus, the Grounds 21 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 of appeal No.(s) 1 to 3 are allowed in terms of our aforesaid observations. 15. Ground of appeal No.4 being general in nature is dismissed as not pressed. 16. In the result, appeal of the assessee is allowed in terms of our aforesaid observations. Order pronounced in the open court on 29 th day of April, 2022. Sd/- Sd/- JAMLAPPA D. BATTULL RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 29 th April, 2022 SB आदेशकȧĤǓतͧलͪपअĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT (Central), Nagpur. 4. ͪवभागीयĤǓतǓनͬध,आयकरअपीलȣयअͬधकरण, नागप ु र/ DR, ITAT, Nagpur. 5. गाड[फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, // True Copy// Ǔनजीसͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र / ITAT, Raipur. 22 M/s.Concrete Developers Vs. Pr. CIT, Central ITA No. 60/NAG/2021 Date 1 Draft dictated on 23.04.2022 Sr.PS/PS 2 Draft placed before author 25.04.2022 Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order