Krypton Industries Ltd., Kolkata V. DCIT, Circle -1, Kolkata, Kolkata

ITA 679/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100070 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-08-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 27-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KR
• Assessee Lawyers: D S DAMLE
• Keywords: Reason to believe
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 679 / KOL / 2012 ASSESSMENT YEAR :2002-03 KRYPTON INDUSTRIES LTD. ROOM NO 410, 4 TH FLOOR, 25A CAMAC STREET, VADAAN MARKET, KOLKATA 700 016 [ PAN NO.AABCK 0868 N ] V/S . DCIT, CIRCLE-1, 7 TH FLOOR, AYAKAR BHAWAN, P-13, CHOWRINGHEE SQUARE, KOLKATA 700 069 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI D.S.DAMLE, FCA /BY RESPONDENT SHRI ANIL KR. PANDE, JCIT-SR-DR /DATE OF HEARING 04-11-2015 /DATE OF PRONOUNCEMENT 20-11-2015 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLKATA IN APPEAL NO.R-2/CI T(A)-I/CIR-1/09-10 DATED 26.03.2012. ASSESSMENT WAS FRAMED BY DCIT, CI RCLE-1, KOLKATA U/S 143(3)/147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 04.02.2005 FOR ASSESSMENT YEAR 2002-03. 2. THE ASSESSEE HAS RAISED SEVERAL GROUNDS OF APPEA L BUT THE VITAL ISSUE INVOLVES IN ALL THE GROUNDS OF APPEAL IS WHETHER TH E ACTION OF AO FOR FRAMING THE ASSESSMENT UNDER SECTION 147 IS WITHIN HIS JURI SDICTION THOUGH THE TIME FOR SCRUTINY ASSESSMENT UNDER SECTION 143(3) HAS NOT LA PSED. ITA NO.679/KOL/2012 A.Y. 2002-03 KRYPTON INDS. LTD. V. DCIT, CIR-1, KOL. PAGE 2 3. AT THE OUTSET, IT WAS NOTICED THAT ASSESSEE HAS FILED ITS RETURN OF INCOME ON DATED 23.10.2002 AS PER THE PROVISIONS OF SEC. 1 39(1) OF THE ACT FOR ASSESSMENT YEAR 2002-03 WHICH WAS DULY PROCESSED UN DER SECTION 143(1) OF THE ACT. LATER THE AO FORMED THE REASON TO BELIEVE THAT THE INCOME OF ASSESSEE HAS ESCAPED FROM ASSESSMENT AND ISSUED NOT ICE UNDER SECTION 148 OF THE ACT ON DATED 15.7.2003. HERE THE PERTINENT P OINT IS THAT THE AO HAS EXERCISED HIS POWER TO ASSESS/ REASSESS THE INCOME UNDER SECTION 147 OF THE ACT THOUGH THE TIME FOR PICKING UP THE MATTER UNDER SCRUTINY AS SPECIFIED UNDER SECTION 143(2) WAS VERY MUCH THERE. IN THE PRESENT CASE THE TIME AVAILABLE FOR THE ISSUE OF NOTICE UNDER SECTION 143(2) FOR MAKING THE ASSESSMENT WAS TILL OCTOBER 2013. IT IS EASY TO UNDERSTAND FROM THE PLA IN READING OF THE SECTION WHICH IS REPRODUCED BELOW : 143.[(1) . .. [(2) WHERE A RETURN HAS BEEN FURNISHED UNDER SECTIO N 139, OR IN RESPONSE TO A NOTICE UNDER SUB-SECTION (1) OF SECTI ON 142, THE ASSESSING OFFICER SHALL, - (I) (II) NOTWITHSTANDING ANYTHING CONTAINED IN CLAUSE ( I(), IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE THAT THE ASSESS EE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIV E LOSS OR HAS NOT UNDER-PAID THE TAX IN ANY MANNER, SERVE ON THE ASSE SSEE A NOTICE REQUIRING HIM, ON A DATE TO BE SPECIFIED THEREIN, E ITHER TO ATTEND HIS OFFICE OR TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN: [ PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED O N THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE EN D OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED.]] 23. SUBSTITUTED BY THE FINANCE ACT, 2008, W.E.F, 1- 4-2008, PRIOR TO ITS SUBSTITUTION, PROVISO, AS AMENDED BY THE FINANC E ACT, 2003, W.E.F. 1- 6-2003, READ AS UNDER: PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED O N THE ASSESSEE AFTER THE EXPIRY OF TWELVE MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN IS FURNISHED. AS PER THE PROVISIONS OF THE ACT, THE AO IS UNDER O BLIGATION TO ISSUE A NOTICE AND ENSURE THE SERVICE OF NOTICE UPON THE ASSESSEE WITHIN THE SPECIFIED PERIOD. IN THE INSTANT CASE, AO WAS HAVING TIME TO SERVE THE NOTICE U/S. 143(2) OF THE ACT TILL 31.10.2003, HOWEVER THE AO SOUGHT T O INITIATE PROCEEDINGS U/S ITA NO.679/KOL/2012 A.Y. 2002-03 KRYPTON INDS. LTD. V. DCIT, CIR-1, KOL. PAGE 3 147 OF THE ACT BY ISSUING NOTICE U/S. 148 OF THE AC T ON 05.07.2003. IT IS BEYOND TO UNDERSTAND THAT WHY AO ISSUED A NOTICE U/S 148 I NSTEAD OF 143(2) OF THE ACT. IN THE INSTANT CASE, THE TIME FOR ISSUING NOTI CE U/S.143(2) DID NOT EXPIRE FOR MAKING THE SCRUTINY ASSESSMENT. BUT THE AO HAS ISSU ED NOTICE U/S 148 TO INITIATE PROCEEDINGS U/S. 147 OF THE ACT FOR THE CO NCEALMENT OF THE INCOME WHICH IS ULTRA VARIES. HOWEVER THE LD. CIT(A) HAS A LSO UPHELD THE ORDER OF THE AO ON THE GROUND THAT NO OBJECTION ABOUT THE JURISD ICTION WAS RAISED BY THE ASSESSEE AT THE ASSESSMENT STAGE. HOWEVER WE FIND T HAT SIMILAR ISSUE HAS BEEN DECIDED BY THE VARIOUS HON'BLE COURTS WHERE TH E INITIATION OF PROCEEDINGS U/S. 147 OF THE ACT WAS HELD AS BAD IN LAW. WE ARE RELYING IN THE JUDGMENT OF HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT V. TCP LTD. (2010) 323 ITR 346 (MAD) AND IN THE CASE OF CIT V. QATALYS SOFTWARE TECHNOLOGIES LTD. (2009) 308 ITR 249 (MAD) WHEREIN SUCH SITUATIONS THE PROCE EDINGS UNDER SECTION 147 OF THE ACT WERE HELD BAD IN LAW. FROM THE AFORESAID DISCUSSION, WE FIND THAT THE ACTION OF ASSESSING OFFICER IS ULTRA VARIOUS AN D NOT WITHIN THE PROVISION OF THE INCOME ACT. THEREFORE, WE ARE QUASHING THE ASSE SSMENT PROCEEDINGS DONE BY AO U/S 147 OF THE ACT. 4. REMAINING GROUNDS DO NOT CALL FOR ANY ADJUDICATI ON AT THIS STAGE BECAUSE ASSESSEES PRINCIPAL GROUND U/S. 147 OF THE ACT HAS BEEN QUASHING THE ASSESSMENT PROCEEDINGS. 5. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 20/ 11/2015 SD/- SD/- (MAHAVIR SINGH) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 20 /1 2 /2015 ITA NO.679/KOL/2012 A.Y. 2002-03 KRYPTON INDS. LTD. V. DCIT, CIR-1, KOL. PAGE 4 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-KRYPTON INDS. LTD. ROOM NO.410, 4 TH FL. 25A, CAMAC STREET VADAAN MARKET, K OLKATA-700 016 2. /RESPONDENT-DCIT, CIRCLE-1, 7 TH FLOOR, AAYAKAR BHAWAN, P-13, CHOWRINGH EE SQUARE, KOLKATA-700 069 3. * +, - - . / CONCERNED CIT KOLKATA 4. - - .- / CIT (A) KOLKATA 5. 012 33+,, - +, , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ - , /TRUE COPY/ / - +, ,