Swadist Oils Private Limited, Kanpur V. Deputy Commissioner of Income Tax, Central Circle-1, Kanpur

ITA 638/LKW/2018

AI Insights

The case involves two appeals filed by Swadist Oils Private Ltd. against the orders of the Commissioner of Income Tax (Appeals)-IV, Kanpur, for the assessment year 2008-09. The appeals challenge the assessment order passed under sections 147/143(3) of the Income Tax Act, 1961, which increased the assessee's income significantly from the returned income. The Tribunal also considered a penalty order under section 271(1)(c) of the Act, which imposed a penalty on the assessee. The main contention revolved around the validity of the initiation of proceedings under section 147 and the subsequent assessment and penalty orders, which the assessee argued were influenced by a survey and lacked proper approval and independent application of mind.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113199 (ITAT-LUCKNOW)
• Duration Of Justice: 4 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-08-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 19-09-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 147; 148; 132; 271(1)(c); 133A; 143(1)

Judgement Text

I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH ‘A’, LUCKNOW BEFORE SHRI SAKTIJIT DEY,VICE PRESIDENT AND SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER I.T.A. No.637 & 638/Lkw/2018 Assessment Year: 2008-09 Swadist Oils Private Ltd., Preet Vatika G-1, Ground Floor 3/40, Vishnupuri, Kanpur- 208004 PAN: AAECA 6774E Vs. Dy. C.I.T., Circle-1, Kanpur. (Appellant) (Respondent) O R D E R PER ANADEE NATH MISSHRA:A.M. (A) These two appeals have been filed by the assessee against the impugned appellate orders of learned Commissioner of Income Tax (Appeals)-IV, Kanpur [for short the ‘CIT(A)’] for the assessment year 2008- 09. For the sake of convenience these appeals are being taken up together and are being decided through this consolidated order. The grounds of appeal are as under: Appellants by None present for the Assessee Respondent by Shri Sanjeev Krishna Sharma, Addl. CIT(DR) Date of hearing 30/08/2023 Date of pronouncement 01/09/2023 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 2 ITA No. 637/Lkw/2018 “1. That the order of penalty has been made ex-parte, without giving the appellant an opportunity of hearing. 2. The Ld AO while issuing notice of proceedings u/s 271(1)(c) has failed to mention specifically thet whether the proceedings were for "concealment of Income" or for "furnishing of inaccurate particulars". 3. That the Ld.CIT(A)-IV, Kanpur erred in law as well as on facts in imposing the penalty u/s 271(1)(c) of the Act as the order against which the penalty has been initiated is itself subject to challenge regarding the validity of quantum proceedings. 4. That order of penalty shall stand void ab-initio, if the appellant gets a relief in the proceedings u/s 143(3)/147 which have been challenged by the appellant before this Hon'ble Bench.. 5. That the appellant craves liberty to add, alter or vary any ground of appeal either at the time of hearing of the appeal or before the disposal of the appeal before the Hon'ble Bench.” ITA No. 638/Lkw/2018 “1. That the Ld.CIT(A)-IV, Kanpur erred in law as well as on facts in rejecting the appellant's appeal and upholding the assessment framed in the case of the appellant u/s 147/143(3), without appreciating that fact with regards to the validity of initiation of proceedings under section 147 of the Act. 2. That the Ld. CIT(A)-IV has erred in law as well as on facts in not taking cognizance of the fact that the notice under section 148 of the Act was issued after taking approval of Commissioner Of Income Tax instead of Joint Commissioner Of Income Tax central Circle Kanpur, as the original proceedings had been completed u/s 143(1) only, and therefore the impugned assessment order is illegal and void ab initio. 3. That the Ld.CIT(A)-IV. Kanpur has failed to examine the facts placed on records as even in the remand report the Ld A.O has in fact not challenged or opposed the contentions made by the appellant. I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 3 Except the Ld AD has stated that the approval was taken from JCIT as well as CIT. 4. That the Ld. CIT(A)-IV has erred in law as well as on facts in not taking cognizance of the fact that letter of approval as enclosed by the Ld AO in his remand report contains approval of the Hon'ble Pr Commissioner Of Income Tax and only a forwarding is done by the Ld Jt Commissioner of Income Tax, mechanically, which is part of a normal procedure. 5. That the Ld. CIT(A)-IV has erred in law in not considering the fact that there is no statutory provision under which a power to be exercised by an officer can be exercised by a superior officer. 6. That the Ld. CIT(A)-IV has erred in law as well as on facts in not taking cognizance of the fact that the proceedings u/s 147/148 of the Income Tax Act have been taken on the basis of the survey carried out u/s 133A of the Income Tax Act 1961, when in the case of the appellant there was the warrant u/s 132 of the Act and this fact and defect goes to the roots of the proceedings and makes it illegal and bad in law. 7. That the Ld CIT (A)-IV Kanpur has erred in and also on facts in not taking cognizance of the fact that in the reason to believe recorded by the Ld A.O and consequentially in the order passed by the Ld A.O there is no independent application of mind and is solely based on the report received from the D.I Wing. 8. That the order appealed against is contrary to the facts, law, principals of natural justice and equity. 9. That the appellant craves liberty to add, alter or vary any ground of appeal either at the time of hearing of the appeal or before the disposal of the appeal before the Hon'ble Bench.” (B) In this case, assessment order was passed on 09.03.2016 u/s. 147/143(3) of the Income Tax Act, 1961 (for short ‘the Act’), whereby the assessee’s income was assessed at Rs.1,24,23,601/- (rounded of Rs.1,24,23,600/-) as against returned income of Rs.1,10,02,218/-. The assessee filed appeal against aforesaid assessment order in the Office of the I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 4 ld. CIT(A). Vide appellate order dated 19.07.2018, the ld. CIT(A) dismissed the assessee’s appeal. On perusal of Paragraph-3 of the impugned aforesaid appellate order dated 19.07.2018, we find that the ld. Authorized Representative of the assessee appeared and filed written submissions and the case was heard by the ld. CIT(A). The relevant portion of the aforesaid impugned appellate order dated 19.07.2018 of the ld. CIT(A) is reproduced below: I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 5 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 6 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 7 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 8 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 9 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 10 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 11 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 12 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 13 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 14 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 15 (C) The present appeal, vide ITA No. 638/Lkw/2018 is filed by the assessee against the aforesaid impugned appellate order dated 19.07.2018 of ld. CIT(A). During the appellate proceedings in Income Tax Appellate Tribunal, the paper book containing the following particulars were furnished: Sl. No. Particulars 1. Copy of Revised Form 36 a/2 Ground of Appeal 2. Copy of Board Resolution of Board of Directors of Rajasthan Liquors Ltd. 3. Copy of NCLT Order 4. Copy of penalty Order 5. Copy of Order of Ld. CIT(Appeals) 6. Copy of Form 35 a/w grounds of appeal filed before Ld. CIT(Appeals) (D) On perusal of the aforesaid paper book, we find that the National Company Law Tribunal (for short the ‘NCLT’) approved resolution plan vide order dated 13.02.2019 in C.A. No.01/2019. Since the aforesaid assessment order dated 09.03.2016 and the impugned appellate order dated 19.07.2018 have been passed by the Assessing Officer and the ld. CIT(A) respectively before the aforesaid order dated 13.02.2019 of NCLT, obviously the impact of the resolution plan approved by NCLT vide aforesaid order dated 13.02.2019, has not been factored in by the Assessing Officer and by the ld. CIT(A) in their respective orders. Therefore, in the fitness of things, we set aside the aforesaid impugned appellate order dated 30.07.2018 of ld. CIT(A) and we restore all matters in dispute to the file of the Assessing Officer with I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 16 the direction to pass fresh assessment order, in accordance with law after providing reasonable opportunity to the assessee; and after giving due consideration to aforesaid order dated 13.02.2019 of NCLT. For statistical purposes ITA No. 638/Lkw/2018 is partly allowed. (E) Separately, the Assessing Officer has also passed penalty order dated 28.09.2016 u/s. 271(1)(c) of the Act, imposing penalty amounting to Rs.5.00 lacs. The assessee has filed appeal against the aforesaid order dated 28.09.2016 of the Assessing Officer in the Office of the ld. CIT(A). Vide impugned appellate order dated 30.07.2018, the ld. CIT(A) dismissed the assessee’s appeal. The relevant portion of the aforesaid impugned appellate order dated 30.07.2018 of ld. CIT(A) is reproduced below: I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 17 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 18 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 19 I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 20 (F) The present appeal before us vide aforesaid ITA No. 637/Lkw/2018 has been filed by the assessee against the aforesaid impugned appellate order dated 30.07.2018 of ld. CIT(A). We find that the impugned order of ld. CIT(A) and the penalty order of the Assessing Officer have been passed on 30.07.2018 and 28.09.2016 respectively; whereas the aforesaid order of NCLT has been passed on a later dated i.e. on 13.02.2019. Obviously, therefore, the Assessing Officer and the ld. CIT(E) have not factored in the impact of the aforesaid order dated 13.02.2019. Consistent with the view taken by us in foregoing paragraph (D) of this order in the quantum proceedings, therefore, we are inclined to take the same view. Accordingly, we set aside the impugned appellate order dated 30.07.2018 of the ld. CIT(E) and we restore the issues in dispute to the file of the Assessing Officer with the direction to pass fresh order, in accordance with law, after providing reasonable opportunity to the assessee; and giving due consideration to the aforesaid order dated 13.02.2019 of NCLT as also to the fresh assessment going to be passed pursuant to our directions in foregoing paragraph (D) of this order. For statistical purposes, appeal vide ITA No. 637/Lkw/2018 is partly allowed. (G) In the result, for statistical purposes, both the appeals of assessee are allowed for statistical purposes. (Order pronounced in the open court on 01/09/2023) Sd/- Sd/- (SAKTIJIT DEY) (ANADEE NATH MISSHRA) Vice President Accountant Member Dated: 01/09/2023 Aks/- I.T.A. No. 637 & 638/Lkw/2018 Assessment year:2008-09 21 Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. The CIT(A) 5. D.R., I.T.A.T., Assistant Registrar