DY. C.I.T. CIR-.2, Nagpur V. SHRI VILAS TUKARAM SATPUTE, Nagpur

ITA 600/NAG/2016

• Counselvise Citation: [2014] 117 COUNSELVISE.COM (IT) 8886 (ITAT-NAGPUR)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 23-10-2014
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 07-12-2016
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: TDS; Set aside
• Section: 40A(3); 143(3); 147; 148; 263; 63; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO.600/NAG/2016 (ASSESSMENT YEAR : 200809 ) DY. CIT CIR - 2 , ROOM NO 318, 3 RD FLOOR, AAYAKAR BHAWAN, TELANGKHEDI ROAD,CIVIL LINES, NAPUR . APPELLANT V/S VILAS TUKARAM SATPUTE, GOPAL NAGAR, RING ROAD, NAGPUR. APVPS3372K . RESPONDENT REVENUE BY : SHRI A.R. NINAWE. ASSESSEE BY : SHRI MANOJ G.MORYANI ADV. DATE OF HEARING 2 4 .03.2017 DATE OF ORDER O R D E R PER RAM LAL NEGI, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE APPELLANT/REV ENUE AGAINST ORDER DATED 20.9.2016 PASSED BY THE CIT(APPEALS)-2 NAGPUR PERTA INING TO THE ASSESSMENT YEAR 2008-09, WHEREBY THE LEARNED CIT(A) ALLOWED THE APP EAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER DATED 28.3.2013 PASSED U/S 143(3) READ WITH SECTION 263 OF THE INCOME TAX ACT, 1961, HEREINAFTER TO BE REFE RRED AS THE ACT. 2. BRIEF FACTS OF THE CASE WHICH NEED NECESSARY MEN TION FOR THE PURPOSE OF ADJUDICATION OF THE ISSUES INVOLVED IN THIS CASE AR E THAT THE ASSESSEE FILED ITS RETURN FOR THE ASSESSMENT YEAR 2008-09, DECLARING THE TOTA L INCOME OF RS.7,49,920/-. THE AO REOPENED THE CASE UNDER SECTION 147 OF THE ACT F OR THE REASON THAT THE ASSESSEE HAD MADE CASH PAYMENTS OF RS. 39,26,2000/- IN CONTR AVENTION OF THE PROVISIONS UNDER SECTION 40A(3) OF THE ACT. HOWEVER, AFTER VER IFYING THE FACTS THE AO DROPPED THE PROCEEDINGS INITIATED U/S 147 AND PASSED ORDER U/S 143 READ WITH SECTION 147 OF THE ACT. SUBSEQUENTLY, THE AO AGAIN ISSUED NOTICE U /S 148 OF THE ACT AND THE ASSESSMENT WAS ACCORDINGLY COMPLETED U/S 143 READ W ITH SECTION 148 OF THE ACT. 3. THE VALIDITY OF SECOND TIME REOPENING WAS CHALLE NGED BY THE ASSESSEE BEFORE THE LD. CIT(A). THE LD. CIT(A) AFTER HEARING THE AS SESSEE ALLOWED THE APPEAL. HOWEVER, THE ASSESSMENT ORDER PASSED U/S 143 READ W ITH SECTION 147 VIDE WHICH AO HAD DROPPED THE PROCEEDINGS INITIATED U/S 147 OF THE ACT, WAS SET ASIDE BY THE PR.CIT EXERCISING JURISDICTION UNDER SECTION 263 OF THE ACT. ACCORDINGLY, THE AO PASSED ASSESSMENT ORDER U/S 144 READ WITH SECTION 2 63 OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.1,22,00,870/- AS AGAINST THE RETURN INCOME OF RS. 7,49,920/- AFTER MAKING ADDITION OF RS. 1,14,50 ,950/-U/S 40(A)(IA)OF THE ACT. 4. THE ORDER PASSED BY THE PR. CIT U/S 263 WAS QUAS HED BY THE ITAT IN SECOND APPEAL. THE LD. CIT(A) ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ORDER DATED 30.12.2015 PASSED BY THE AO U/S 143(3) READ WITH S ECTION 263 OF THE ACT, BY FOLLOWING THE DECISION RENDERED BY THE ITAT IN APPE AL FILED BY THE ASSESSEE AGAINST REVISIONAL ORDER PASSED BY THE PR.CIT. AGAINST THE SAID ORDER, THE REVENUE IS IN APPEAL BY RAISING THE FOLLOWING EFFECTIVE GROUND OF APPEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE ON THE BASIS ITATS ORDER WHICH HAS NOT BEEN ACCEPTED BY THE DEP ARTMENT WITHOUT GOING INTO THE MERIT OF THE CASE. 5. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE PRESENT APPEAL HAS BEEN FILED BY THE DEPARTMENT DES PITE THE FACT THAT THE TRIBUNAL HAS QUASHED THE ORDER PASSED U/S 263 OF THE ACT. TH E LD. COUNSEL FURTHER SUBMITTED THAT IN VIEW OF THE SAID FACT, THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE AND IS LIABLE TO DISMISSED. 6. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRE SENTATIVE RELYING ON THE ORDER PASSED BY THE ASSESSING OFFICER SUBMITTED THA T THE LEARNED CIT(A) HAS PASSED THE IMPUGNED ORDER WITHOUT GOING ONTO THE MERITS OF THE CASE, THEREFORE, THE SAME IS LIABLE TO BE SET ASIDE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THR OUGH THE MATERIAL PLACED BEFORE US IN THE LIGHT OF THE RESPECTIVE SUBMISSION S OF THE PARTIES. WE NOTICE THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL HAS QUASHED T HE ORDER PASSED U/S 263 OF THE ACT AND ALLOWED THE APPEAL FILED BY THE ASSESSEE HO LDING AS UNDER:- 3.2 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL BEFORE US. WE FIND THAT THE AO HAD REOPENED THE ASS ESSMENT TWICE, THAT HE HAD DROPPED THE PROCEEDINGS U/S 147 OF THE ACT, THAT WHILE COMPLETING THE ASSESSMENT DURING THE SECOND ROUND H E MADE ADDITIONS ON ACCOUNT OF CONTRAVENTION OF NON-PAYMENT OF TDS A S WELL AS FOR CONTRAVENTIONS OF SECTION 40A(3) OF THE ACT. THEREF ORE, IN OUR OPINION, THE PCIT WAS NOT JUSTIFIED IN INVOKING THE PROVISIO NS OF SECTION 263 AS FAR AS THESE TWO ISSUES ARE CONCERNED. WE FIND THAT THE ASS WAS DIRECTED BY THE A.O. TO FILE DETAILS ABOUT RS.39.26 LAKHS. T HE ASSESSEE HAD FURNISHED THE NECESSARY DETAILS AND THE AO TOOK AN INFORMED DECISION IN THAT REGARD. THE PCIT HAS NOT MENTIONED AS HOW THE ORDER OF THE AO WAS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTERES T OF THE REVENUE REGARDING THE AMOUNT IN QUESTION. THE PCIT CANNOT E XPECT THE AO TO FOLLOW A PARTICULAR LINE WHILE FINALIZING THE ASSES SMENT. THEREFORE, WE ARE OF THE OPINION THAT THE PCIT HAD WRONGLY INVOKE D THE REVISIONARY POWERS. IN OUR OPINION, THE ORDER OF THE AO IS IN A CCORDANCE WITH LAW AND, THEREFORE, IS NOT ERRONEOUS. THEREFORE, REVERS ING THE ORDER OF THE PCIT, WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN F AVOUR OF THE ASSESSEE. 8. SINCE THE COORDINATE BENCH HAS QUASHED THE REVIS IONAL ORDER PASSED BY THE PR. CIT AND ALLOWED THE APPEAL THE ORDER GIVING EFFECT TO THE 263 ORDER DOES NOT SURVIVE. HENCE, THE LD. CIT(A) HAS RIGHTLY ALLOWED THE APPEAL OF THE ASSESSEEE. IN OUR CONSIDERED VIEW, THE APPEAL OF TH E DEPARTMENT IS, THEREFORE, NOT MAINTAINABLE. WE, ACCORDINGLY, UPHOLD THE DECIS ION OF THE LD. CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. IN THE RESULT, THE APPEAL FILED BY THE REVENUE FOR THE ASSESSMENT YEAR 2008-09 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MARCH 2017. SD/- SHAMIM YAHYA ACCOUNTANT MEMBER SD/- RAM LAL NEGI JUDICIAL MEMBER NAGPUR, DATED: 27.03.2017 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, NAGPUR DATE INITIAL 1. DRAFT DICTATED ON 27.03.2017 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 27.03.2017 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 27.03.2017 SR.PS 6. DATE OF PRONOUNCEMENT 27.03.2017 SR.PS 7. FILE SENT TO THE BENCH CLERK 27.03.2017 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER