M/S ABHISHEK STEEL INDUSTRIES LIMITED, RAIPUR (CG) V. THE PR. COMMISSIONER OF INCOME TAX, BHOPAL

ITA 70/BIL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5457 (ITAT-RAIPUR)
• Duration Of Justice: 5 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 06-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA
• Keywords: Document seized; Documents seized; Set aside
• Section: 143(3); 263

Judgement Text

ITA NO.70/RPR/2016 A.Y. 2011-12 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER A ND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER ITA NO.70/RPR/2016 ASSESSMENT YEAR: 2011-12 M/S. ABHISHEK STEEL INDUSTRIES LTD., VS. PR. CIT(CE NTRAL), 1 ST FLOOR, MAHAMAYA TOWER, BHOPAL. G.E. ROAD, RAIPUR (CG) [PAN AAECA 3704 G] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VEEKAAS S. SHARMA, A.R. RESPONDENT BY : SHRI P.K. MISHRA, CIT D.R. DATE OF HEARING : 02.08.2021 DATE OF PRONOUNCEMENT : .09.2021 O R D E R PER PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE REVISIONAL ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) (PCIT IN SHORT), BHOPAL COMMUNICATED TO ASSESSEE ON 15.02.20 16 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 (THE ACT IN SHORT) WHEREBY THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER (A.O.) DATED 27.03.2014 UNDER SECTION 143(3) OF THE ACT CONCERNING ASSESSMENT YEAR (A.Y.) 2011-12 WAS SOUGH T TO BE SET ASIDE FOR REFRAMING THE ASSESSMENT IN TERMS OF SUPERVISORY JURISDICTION . 2. AS PER ITS GROUNDS OF APPEAL, THE ASSESSEE HAS C HALLENGED THE REVISIONAL ACTION OF THE PCIT WHEREBY THE ASSESSING OFFICER (A.O.) WA S DIRECTED TO PASS THE ASSESSMENT ORDER DENOVO AFTER MAKING ENQUIRIES ON THE POINTS SET OUT IN TH E NOTICE WHICH HAS ALREADY EXAMINED AND CONSIDERED DURING TH E ORIGINAL ASSESSMENT PROCEEDINGS CONCERNING A.Y. 2011-12. THE ASSESSEE HAS CHALLENGED THE ASSUMPTION OF JURISDICTION BY THE PCIT UNDER SECTION 263 OF TH E ACT ON THE GROUND THAT THE ASSESSMENT ORDER UNDER REVISION IS NEITHER ERRONEOU S NOR PREJUDICIAL TO THE INTEREST OF THE REVENUE. ITA NO.70/RPR/2016 A.Y. 2011-12 PAGE 2 OF 5 3. WHEN THE MATTER WAS CALLED FOR HEARING BEFORE TH E TRIBUNAL, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED AT THE OUTSET TH AT THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS WAS FULLY SATISFIED WITH THE EXPLANATIONS OFFERED BY THE ASSESSEE ON ALL THE SEIZED MATERIAL INCLUDING E XPLANATION OF THE ASSESSEE ON LPS- 3 OF PAGE NO.4 TO 10 WHICH CONTAINS THE PROVISIONAL BALANCE SHEET AND PROFIT & LOSS ACCOUNT WHICH IS ALREADY ON RECORD OF THE A.O. A R EFERENCE WAS MADE TO THE OBSERVATION OF THE PCIT THAT THERE IS A DIFFERENCE IN SEVERAL HEADS BETWEEN AUDITED PROFIT & LOSS ACCOUNT AND BALANCE SHEET VIZ-A-VIZ T HE SEIZED DOCUMENTS AS PER LPS- 3 OF ANNEXURE-A6. THE LEARNED COUNSEL CONTENDED TH AT AS EMANATING FROM THE REVISION ORDER, THE PCIT HAS OBSERVED THAT THERE IS A DIFFERENCE IN SEVERAL HEADS BETWEEN THE AUDITED PROFIT& LOSS ACCOUNT/BALANCE SH EET VIZ-A-VIZ SEIZED DOCUMENTS. AS PER LPS-3 OF ANNEXURE-A6. IN THIS REGARD, IT WA S SUBMITTED THAT THE OBSERVATION OF THE PCIT THAT THE RECORDS DO NOT DEMONSTRATE THAT T HE A.O. HAS MADE PROPER ENQUIRY ON THE ISSUE IS WHOLLY INCORRECT. THE LEARNED COUN SEL FOR THE ASSESSEE VOCIFEROUSLY SUBMITTED THAT THE A.O. DID REQUIRE THE EXPLANATION OF THE ASSESSEE ON ALL THE SEIZED MATERIAL AND THE ASSESSEE HAS PLACED THE SPECIFIC R EPLY TO EXPLANATION ON CONTENTS OF THE SEIZED MATERIAL VIDE LETTER DATED 24.03.2014, W HICH IS ALREADY ON RECORD OF THE A.O., A COPY OF WHICH IS ALSO PLACED IN THE PAPER B OOK SUBMITTED TO THE TRIBUNAL (PAGE NOS.29 TO 31 OF VOLUME 2 OF PAPER BOOK). THE LEARN ED COUNSEL THUS SUBMITTED THAT THE BASIS FOR INVOKING REVISION ALLEGING NON-EXAMIN ATION ITSELF IS FACTUALLY INCORRECT. TO EXPOUND FURTHER, THE LEARNED COUNSEL FOR THE ASSESS EE ADVERTED OUR ATTENTION TO THE EXPLANATION OFFERED ON THE PROVISIONAL BALANCE SHEE T SEIZED IN THE COURSE OF SEARCH. IT WAS REITERATED THAT AS A MATTER OF FACT, THE ASS ESSEE HAD SUBMITTED SPECIFIC REPLY AS POINTED OUT EARLIER, WHICH CONTAINS PROVISIONAL BAL ANCE SHEET FOR THE YEAR ENDED 31.03.2011 AND AFTER CONSIDERING THE REASONS CITED IN THE REPLY, THE A.O. DID NOT FIND ANY PERCEPTIBLE REASON TO TAKE ANY ADVERSE VIEW. 4. IT WAS NEXT CONTENDED THAT WITHOUT PREJUDICE, TH E PROVISIONAL BALANCE SHEET (LPS-3) AS WELL AS THE AUDITED FINANCE ACCOUNTS WER E DULY AVAILABLE BEFORE THE PCIT HIMSELF AND IT IS NOT UNDERSTANDABLE AS TO WHAT ENQ UIRY IS REQUIRED TO BE UNDERTAKEN WHEN ALL THE RELEVANT DOCUMENTS WERE MADE AVAILABLE TO HIM ALSO. TO EXPLAIN THE DIFFERENCE, IT WAS POINTED OUT THAT THE SAID SEIZED DOCUMENTS ARE TRIAL BALANCE ETC. GENERATED AND OBTAINED DURING SEARCH AND CONTAINED ITEM-WISE BALANCES. HOWEVER, WHILE FINALISING THE ACCOUNTS AND PREPARING BALANCE SHEETS, ITEM WISE BALANCES WERE APPROPRIATELY GROUPED AND ALL ITEMS FALLING IN A GR OUP WERE INCORPORATED IN RELEVANT ITA NO.70/RPR/2016 A.Y. 2011-12 PAGE 3 OF 5 GROUPS AS PER REQUIREMENT OF SCHEDULE-VI OF THE COM PANIES ACT AND THERE IS NO DIFFERENCE IN THE FIGURES GIVEN PER SE . THE EXERCISE WAS UNDERTAKEN FOR PROPER REFLECTION OF THE SAME SET OF FIGURES. IT WAS CONT ENDED THAT NO INDEPENDENT ENQUIRY BY THE A.O. IS REQUIRED ON THIS ASPECT HAVING REGARD T O THE FACTS OF THIS CASE. WHERE THE RELEVANT DOCUMENTS WERE AVAILABLE BEFORE THE PCIT, HE COULD HAVE VERY WELL SEEN THIS ACT OF GROUPING OF BALANCES BELONGING TO A PARTICUL AR GENERE HIMSELF WHICH WAS, IN ANY CASE, DULY VERIFIED AT THE TIME OF REGULAR ASSESSME NT. IT WAS THUS CONTENDED THAT THE ACTION OF PCIT IS MANIFESTATION OF WITCH HUNT WITH A CASUALNESS TO RE-VERIFY AND RE- EXAMINE THE NONEXISTENT DIFFERENCES. THE LEARNED C OUNSEL THUS QUESTIONED THE RATIONALE FOR INVOKING POWERS OF REVISION ON ALREAD Y VERIFIED FACTS WITHOUT INDULGING ANY MINIMAL INQUIRY HIMSELF. THE LEARNED COUNSEL THUS URGED FOR SETTING ASIDE THE REVISIONAL ORDER AND RESTORATION OF THE ASSESSMENT ORDER. 5. THE LEARNED CIT D.R., ON THE OTHER HAND, RELIED UPON THE REVISIONAL ORDER. 6. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED THE REVISIONAL ORDER AND MATERIAL PLACED ON RECORD. IT IS AN ADMITTED P OSITION THAT THE LOOSE PAPER LPS-3 AS WELL AS THE AUDITED BALANCE SHEET ARE AVAILABLE ON RECORD. SPECIFIC QUERIES WERE ALSO FOUND TO HAVE BEEN RAISED BY THE A.O. TO VERIF Y THE VERY FACTS RELATING TO SEIZED MATERIAL INCLUDING LPS-3 IN QUESTION. THE VARIANCE S IN THE AUDITED BALANCE SHEET VIZ- A-VIZ LOOSE PAPER ARE STATED TO BE ON ACCOUNT OF GR OUPING AND REGROUPING ON VARIOUS HEADS AND SUB-HEADS OF INCOME AS EMERGING FROM THE MATERIAL PLACED ON RECORD. PERTINENTLY, THE PCIT HAS NOT GIVEN ANY SPECIFIC FI NDING ON THE SPECIFIC DIFFERENCES FROWNED UPON BY HIM. THE PCIT HAS SUMMARILY DISCARD ED THE EXPLANATION OFFERED BY THE ASSESSEE AND CONCLUDED THAT THE A.O. HAS NOT EX AMINED THE ISSUE. IN CONTRAST, SPECIFIC EXPLANATION/REPLY OF THE ASSESSEE IS STATE D TO HAVE BEEN FILED ON WHICH THE PCIT HAS NOT MADE ANY COMMENT. THIS APPROACH OF TH E PCIT WHILE SEEKING TO DISTURB THE ASSESSMENT ORDER WITHOUT PROPER BASIS THUS CANN OT BE COUNTENANCED. 7. IT IS APPARENT THAT REASONABLE ENQUIRIES HAVE BE EN CARRIED OUT BY THE A.O. ON THE POINT IN ISSUE WHEREAS THE ACTION OF THE PCIT I S UNINTELLIGIBLE IN THE ABSENCE OF ANY SPECIFIC DEFECT IN THE ACTION OF THE A.O. IT IS A COMMON KNOWLEDGE THAT THE A.O. ORDINARILY DISCUSSES ONLY THOSE ISSUES IN THE ASSES SMENT ORDER WHERE HE IS AT VARIANCE WITH THE EXPLANATIONS OF THE ASSESSEE. AN EXPLANAT ION WHICH IS ACCEPTED IS NOT ORDINARILY DISCUSSED IN THE ASSESSMENT ORDER. SUCH NON-DISCUSSION OF EXPLANATION ITA NO.70/RPR/2016 A.Y. 2011-12 PAGE 4 OF 5 FOUND SATISFACTORY WOULD NOT IPSO FACTO GIVE RISE TO INFERENCE THAT THE A.O. HAS NOT APPLIED HIS MIND TO THE ISSUE. IN THE CIRCUMSTANCE S, WHERE SPECIFIC QUERIES WERE RAISED AND RESPONSE THERETO WAS FILED BY THE ASSESS EE, A NORMAL PRESUMPTION WOULD ARISE THAT THE A.O. HAS PERFORMED HIS TASK AS EXPEC TED FROM HIM. TO REBUT SUCH ORDINARY PRESUMPTION, THE SUPERIOR AUTHORITY IS EXP ECTED TO BE OBJECTIVE AND PROVIDE PROPER DETAILS AS TO HOW THE ERROR HAS BEEN COMMITT ED. THE PCIT IN THE INSTANT CASE COULD HIMSELF ATTEMPT TO VERIFY THE ALLEGED DIFFERE NCES AND SEEK EXPLANATION FROM THE ASSESSEE TO SHUN HIS DOUBTS AND DETERMINE THE PREJU DICE CAUSED. IN THE INSTANT CASE, THE DIRECTIONS OF THE PCIT ARE HOLLOW WITHOUT SHOWI NG THAT THE ACTION OF THE A.O. IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE. IN CONTRAST, THE ASSESSEE HAS SUCCESSFULLY DEMONSTRATED THAT ENQUIRY HAS BEEN CONDUCTED COMMENSURATE WITH THE ISSUE AND WITH DUE APPLICATIO N OF MIND AFTER RAISING THE POINTS IN THE COURSE OF THE ASSESSMENT. IN THE CIRCUMSTAN CES, WE FIND MERIT IN THE PLEA OF THE ASSESSEE THAT THE REVISIONAL ACTION OF THE PCIT IS WITHOUT AUTHORITY OF LAW. WE HAVE THUS NO HESITATION IN QUASHING THE REVISIONAL ORDER OF THE PCIT. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED ON ..09.2021 AS PER RULE 34(5) OF THE INCOME TAX APPELLATE TRIBUNAL RULES,1963. (N.K. CHOUDHRY) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER RAIPUR, THE . DAY OF SEPTEMBER, 2021 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER UE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ITA NO.70/RPR/2016 A.Y. 2011-12 PAGE 5 OF 5 1. DATE OF TAKING DICTATION: 2. DATE OF TYPING & DRAFT ORDER PLACED BEFORE THE DI CTATING MEMBER: 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S.: ................................ 4. DT. ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT: .............. ........ 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: . .......................... 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: ..... 7. THE DT. ON WHICH THE FILE GOES TO THE ASTT. REGI STRAR FOR SIGNATURE ON THE ORDER: ............... .......... 8. DATE OF DESPATCH OF THE ORDER: ................. .......