M/s Chandrika Investments, V. ITO,

ITA 631/BANG/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9353 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: S ANNAMALAI SHRI SANJAY KUMAR
• Keywords: Revised return
• Section: 142(1); 133A; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C, BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO.631(BANG) 2013 (ASSESSMENT YEAR 2009-10) M/S CHANDRIKA INVESTMENTS, NO.8/A, 24 TH MAIN, I PHASE, JP NAGAR, BANGALORE-560 078 PAN NO.AAFFC6379A APPELLANT VS THE INCOME TAX OFFICER, WARD-4(3), UNITY BLDG. P KALINGA RAO ROAD, BANGALORE RESPONDENT AND ITA NO.873(BANG)/2013 (ASSESSMENT YEAR : 2009-10) (BY REVENUE) ASSESSEE BY: SHRI S. ANNAMALAI, ADVOCATE REVENUE BY: SHRI SANJAY KUMAR, CIT-III DATE OF HEARING : 18-08-2016 DATE OF PRONOUNCEMENT: : -09-2016 O R D E R PER SHRI A.K.GARODIA, AM THESE ARE CROSS APPEAL FILED BY THE ASSESSEE AND RE VENUE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-II, BANGALORE D ATED 14-03-2013 FOR THE ASSESSMENT YEAR 2009-10. 2. GROUND NO.1 & 2 OF THE ASSESSEES APPEAL ARE AS UNDER; ITA NOS.631 & 873(B)2013 2 1. THE ORDERS OF THE LOWER AUTHORITIES IN SO FAR AS THEY ARE AGAINST THE APPELLANT IS OPPOSED TO LAW, EQUITY AND WEIGHT OF EVIDENCE, PROBABILITIES FACTS AND CIRCUMSTANCES OF THE CASE 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E ORDER PASSED BY THE LEARNED IT) IS WITHOUT JURISDI CTION, CONTRARY TO THE INSTRUCTIONS NO.1/201 DATED 31-01- 2011, CONSEQUENTLY THE ORDER IS LIABLE TO BE SET AS IDE. 3. THE LEARNED AR OF THE ASSESSEE SUBMITTED COPY OF CBDT INSTRUCTION NO.1/2011 DATED 31-01-2011 AND IT WAS S UBMITTED THAT THESE INSTRUCTIONS WERE ISSUED BY THE BOARD U/S 119 OF THE IT ACT, 1961 AND THEREFORE, THESE ARE BINDING OF THE AO. THEREA FTER, HE SUBMITTED THAT IN THE PRESENT CASE, AS PER THE RETURN OF INCO ME FILED BY THE ASSESSEE IN PURSUANCE TO NOTICE U/S 142 (1) OF THE ACT, THE ASSESSEE DECLARED TOTAL INCOME OF RS.3,42,45,991/- AND EVEN AS PER THE REVISED RETURN FILED BY THE ASSESSEE, THE INCOME DECLARED B Y THE ASSESSEE IS RS.127,50,050/- AND AS PER THE INSTRUCTIONS OF THE BOARD, IF THE INCOME DECLARED BY THE ASSESSEE IS MORE THAN RS.30.00 LAKH S IN METRO CITIES, THE ASSESSMENT HAS TO BE FAMED BY THE DCIT OR ACIT . BUT IN THE PRESENT CASE, THE ASSESSMENT ORDER HAS BEEN PASSED BY THE ITO AND THEREFORE, THIS ORDER IS NOT VALID AND SHOULD BE QU ASHED. AT THIS JUNCTURE, IT WAS POINTED OUT BY THE BENCH THAT EVE N IF IT IS HELD THAT THE ITO WAS NOT COMPETENT TO PASS THE IMPUGNED ORDER, T HEN THE MATTER HAS TO GO BACK FOR FRAMING DE-NOVO ASSESSMENT BY DCIT OR ACIT AND IN REPLY, LD. AR OF THE ASSESSEE HAD NOTHING TO SAY. AS AGAINST THIS, THE ITA NOS.631 & 873(B)2013 3 LD. DR OF THE REVENUE PLACED RELIANCE ON THE JUDGME NT OF THE HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS KAP IL JAIN REPORTED IN 50 DTR 342(DEL.) IN SUPPORT OF HIS CONTENTION THAT IF NO OBJECTION HAS BEEN RAISED BY THE ASSESSEE REGARDING THE JURISDICT ION OF THE AO WITHIN ONE MONTH AFTER COMPLETION OF THE ASSESSMENT THEN T HE ASSESSEE CANNOT RAISE SUCH OBJECTION AFTERWARDS. HE ALSO SUPPORTED THE ORDER OF THE LD. CIT(A) WHEREIN HE HAS GIVEN A FINDING THAT THE CBDT INSTRUCTION NO.1/2011 DATED 31-01-2011 ARE APPLICABLE ONLY IN C ASES WHERE RETURNS HAVE BEEN FILED IN COMPLIANCE WITH THE PRO VISIONS OF SEC.139(1) OF THE IT ACT, 1961 BUT NOT WHERE THE RETURN IS FIL ED FOLLOWING A SURVEY CONDUCTED U/S 133A OF THE IT ACT, 1961. HE FURTHER SUBMITTED THAT IN THE PRESENT CASE, A SURVEY WAS CONDUCTED BY THE ASS ESSEE AND THEREAFTER, IN PURSUANCE TO NOTICE ISSUED U/S 142(1 ) OF THE IT ACT, THIS RETURN WAS FILED BY THE ASSESSEE AND THEREFORE, THE SE INSTRUCTIONS OF THE BOARD ARE NOT APPLICABLE IN THE PRESENT CASE. 4. THE FACTS ARE NOT IN DISPUTE. AS PER THE RETURN FILED BY THE ASSESSEE AFTER SURVEY IN COMPLIANCE TO NOTICE ISSUE D U/S 142(1) OF THE ACT, THE INCOME DECLARED BY THE ASSESSEE IS RS.342. 45 LAKHS AND AS PER THE REVISED INCOME ALSO, THE INCOME DECLARED BY THE ASSESSEE IS RS.127.50 LAKHS AND THEREFORE, THE INCOME DECLARED BY THE ASSESSEE IS MUCH IN EXCESS OF THE LIMIT PRESCRIBED BY THE CBDT INSTRUCTION NO.1/2011 DATED 31-01-2011 AS PER WHICH THE ITO HAS NO JURISDICTION TO FRAME AN ASSESSMENT ORDER WHERE THE INCOME DECLA RED BY THE ITA NOS.631 & 873(B)2013 4 ASSESSEE IN A METRO CITY AS PER THE RETURN OF INCOM E IS RS.30.00 LAKHS AND THE DATE OF ASSESSMENT ORDER PASSED BY THE AO I S 17-10-2011 AND THESE INSTRUCTION ARE APPLICABLE WITH EFFECT FROM 0 1-04-2011. THEREFORE, THIS IS AN ADMITTED POSITION THAT THE IMPUGNED ASSE SSMENT ORDER PASSED BY THE ITO IS NOT VALID. BUT WE FEEL THAT T HE ASSESSMENT ORDER IS IRREGULAR BUT NOT ILLEGAL AND THEREFORE, WE FEEL TH AT THE MATTER SHOULD GO BACK FOR DE-NOVO ASSESSMENT BY A COMPETENT OFFICER BEING ACIT OR DCIT. 5. REGARDING THE JUDGMENT OF THE HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF KAPIL JAIN (SUPRA) ON WHICH RELIANCE HAS BEEN PLACED BY THE REVENUE, WE FIND THAT IN THAT CASE, T HE CASE OF THE ASSESSEE WAS TRANSFERRED TO CIRCLE-36(1) AND SUCH T RANSFER ORDER WAS PASSED BY THE CIT ON 21-04-2004 BUT ON THE DATE OF ISSUE OF NOTICE U/S158BD R.W.S.158BC OF THE ACT ON 19-04-2004, THE JURISDICTION VESTED WITH THE ITO, WARD29(1) IN SO FAR THE ASSESS EE WAS CONCERNED. ADMITTEDLY, IN THAT CASE, THE NOTICE U/S 158BC WAS ISSUED BY ACIT, CIRCLE-36(1), NEW DELHI ON 19-04-2004 AND AT THAT P OINT OF TIME, THE JURISDICTION VESTED WITH ITO, WARD-29(1) BUT THIS W AS ALSO TRUE THAT THE OBJECTION WAS RAISED BY THE ASSESSEE ONLY AFTER EXP IRY OF ONE MONTH FROM THE DATE ON WHICH NOTICE WAS SERVED ON THE ASS ESSEE U/S 143(2) OF THE ACT, 1961. UNDER THESE FACTS, IT WAS HELD BY T HE HONBLE DELHI HIGH COURT THAT SUCH OBJECTION IS NOT VALID. IN THIS RE GARD, WE WOULD LIKE TO OBSERVE THAT THIS RESTRICTION ON THE ASSESSEE TO RA ISE OBJECTION ABOUT ITA NOS.631 & 873(B)2013 5 JURISDICTION OF THE AO IS IN SUB-SEC.3 OF SEC.124 A ND SUCH OBJECTION ABOUT JURISDICTION IS IN RESPECT OF DIRECTION OF OR DER ISSUED UNDER SUB- SEC.1 AND.2 OF SEC.120 I.E. REGARDING THE TERRITORI AL JURISDICTION. IN THE PRESENT CASE, THE OBJECTION IS NOT REGARDING TERRIT ORIAL JURISDICTION BUT THE COMPETENCE OF THE ITO TO ASSESS THE INCOME OF T HE ASSESSEE WHO HAVE DECLARED INCOME IN EXCESS OF THE SPECIFIED LIM IT AND BECAUSE OF THAT, THE JURISDICTION LIES WITH ACIT OR DCIT AND N OT WITH ITO. IN OUR CONSIDERED OPINION, IN THE FACTS OF THE PRESENT CA SE, THE JUDGMENT OF THE HONBLE DELHI HIGH COURT CITED BY THE LD. DR OF THE REVENUE IS NOT APPLICABLE. REGARDING THIS CONTENTION THAT THIS CIR CULAR IS APPLICABLE ONLY IN THOSE CASES WHERE RETURN IS FILED U/S 139 9 1) AND IT IS NOT APPLICABLE WHERE RETURN IS FILED U/S 142 (1) AFTER SURVEY, WE FEEL THAT THERE IS NO MERIT IN THIS CONTENTION BECAUSE THERE IS NO SUCH RESTRICTION IN THE CIRCULAR AND OTHERWISE ALSO, IF ITO IS NOT C ONSIDERED TO BE COMPETENT TO FRAME AN ASSESSMENT WHERE RETURN IS FI LED U/S 139 (1) DECLARING INCOME IN EXCESS OF A SPECIFIED LIMIT, TH EN HOW THE ITO CAN BE COMPETENT TO ASSESSS SIMILAR RETURN BUT FILED AFTER SURVEY U/SC 142 (1). HENCE, THIS CONTENTION IS REJECTED. 6. IN VIEW OF OUR ABOVE DISCUSSION, WE HOLD THAT TH E ASSESSMENT ORDER PASSED BY THE ITO IN THE PRESENT CASE IS NOT A VALID ASSESSMENT ORDER AND HENCE, WE SET ASIDE THE SAME AND RESTORE THE MATTER BACK FOR FRAMING A DE-NOVO ASSESSMENT BY A COMPETENT OFFICER BEING ACIT OR DCIT. IN VIEW OF OUR DECISION, OTHER GROUNDS RAIS ED BY THE ASSESSEE IN ITA NOS.631 & 873(B)2013 6 ITS APPEAL AND THE APPEAL OF THE REVENUE DO NOT REQ UIRE ANY SEPARATE ADJUDICATION AT THIS STAGE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. (VIJAY PAL RAO) (A.K. GARODIA) JUDICAL MEMBER ACCOUNTANT MEMBER BANGALORE: D A T E D : AM* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER AR, ITAT, BANGALORE ITA NOS.631 & 873(B)2013 7 1. DATE OF DICTATION .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P. S. .. 4 DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH T HE ORDER COMES BACK TO THE SR. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER DOES FOR XEROX & ENDORSEMENT . 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK. 11 THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER. 12 THE DATE ON WHICH THE FILE GOES TO THE DISPATCH SECTION FOR DISPATCH OF THE TRIBUNAL ORDER 13 DATE OF DISPATCH OF ORDER