ACIT, Circle-4(1), Kolkata, Kolkata V. M/s. Asiatic Oxygen Ltd, Kolkata

ITA 714/KOL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9763 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 11-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Assessee Lawyers: CROSS OBJECTOR SHRI S M SURANA
• Keywords: Reason to believe
• Section: 142(1); 143(1); 147; 148; 132; 139

Judgement Text

1 ITA NO. 714/KOL/2017 & CO. 43/KOL/2 017 ASIATIC OXYGEN LTD., AY 2011-12 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 714/KOL/2017 ASSESSMENT YEAR: 2011-12 ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-4(1), KOLKATA VS. M/S. ASIATIC OXYGEN LTD. (PAN: AACCA6748G) APPELLANT RESPONDENT & CO. NO. 43/KOL/2017 IN I.T.A. NO. 714/KOL/2017 ASSESSMENT YEAR: 2011-12 M/S. ASIATIC OXYGEN LTD. VS. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-4(1), KOLKATA. CROSS OBJECTOR RESPONDENT DATE OF HEARING 10.04.2019 DATE OF PRONOUNCEMENT 01.07.2019 FOR THE REVENUE SHRI A. K. NAYAK, CIT, DR FOR THE ASSESSEE/CROSS OBJECTOR SHRI S. M. SURANA, ADVOCATE ORDER PER SHRI A.T.VARKEY, JM THE APPEAL PREFERRED BY THE REVENUE AND THE CROSS O BJECTION BY THE ASSESSEE ARE AGAINST THE ORDER OF THE LD. CIT(A)-17, KOLKATA DAT ED 05.08.2016 FOR AY 2011-12. 2. THE GROUNDS OF APPEAL FILED BY THE REVENUE ARE A S UNDER: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ADMITTING THE ADDITIONAL GROUND THAT NO NO TICE U/S.143(2) WAS ISSUED WITHIN STATUTORY TIME AFTER THE RETURN WAS FILED U/S.147, THE OBJECTION WAS RAISED BY THE ASSESSEE AND, THEREFORE, NOTICE U/S.143(2) ISSUED AFTER EXPI RY OF STATUTORY TIME CANNOT VALIDATE THE ASSESSMENT. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN CONSIDERING THE OBJECTION RAISED BY THE AO THAT NO SUCH OBJECTION WAS RAISED DURING THE SCRUTINY PROCEEDINGS BY THE ASSESSEE. 2 ITA NO. 714/KOL/2017 & CO. 43/KOL/2 017 ASIATIC OXYGEN LTD., AY 2011-12 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN ALLOWING THE GROUND OF THE ASSESSEE REGARD ING INITIATION OF PROCEEDINGS U/S.147 OF THE ACT. WHEREAS IN THIS CASE THE AO HAD REASON TO BELIEVE (BASED ON THE EVIDENCE AVAILABLE) THAT THE INCOME I.E. RS.12,80,02,205/- CHARGEABLE T O TAX HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. 4. THAT THE APPELLANT CRAVES FOR LEAVE TO ADD, DELE TE, AMEND OR MODIFY ANY GROUND BEFORE OR AT THE TIME OF APPELLATE PROCEEDINGS. 3. BRIEF FACTS OF THE CASE ARE THAT THE AO NOTES TH AT THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 29.09.2011 DECLARING A TOTAL INCOME OF RS .35,60,78,160/-. THEREAFTER THE CASE WAS PROCESSED U/S. 143(1) OF THE INCOME-TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT) ON A TOTAL INCOME OF RS.42,35,99,910/-. THEREAFTER THE AO NOTES THAT THE LD. CIT(A)-IV, KOLKATA VIDE ORDER DATED 05.08.2013 ALLOWED THE APP EAL OF THE ASSESSEE AND WHILE EFFECT WAS GIVEN TO THE EARLIER ORDER THE TOTAL INCOME CAME T O RS.35,60,78,160/-. THEREAFTER, THE AO NOTES THAT THE CASE FILE OF THE ASSESSEE WAS RECEIV ED ON TRANSFER FROM THE ITO, WARD-4(3), KOLKATA AND THE AO WAS IN RECEIPT OF SPECIFIC INFOR MATION REGARDING ESCAPEMENT OF INCOME. THEREAFTER THE ASSESSING OFFICER ISSUED NOTICE U/S. 148 OF THE ACT DATED 21.01.2013 AND SERVED UP ON THE ASSESSEE ON 24.01.2013. ACCORDING TO AO, THE ASSESSEE FILED A LETTER DATED 19.02.2013 AND REQUESTED TO TREAT THE RETURN FILED U/S. 139 OF THE ACT AS RETURN IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT AND HAS ALSO ASKED F OR THE REASONS RECORDED FOR INITIATION OF PROCEEDINGS U/S. 147 OF THE ACT. THE AO THEREAFTER NOTES THAT HE PROVIDED THE REASONS RECORDED TO THE ASSESSEE VIDE COMMUNICATION DATED 2 5.11.2013. THEREAFTER, THE ASSESSEE RAISED AN OBJECTION REGARDING REOPENING ASSESSMENT VIDE LETTER DATED 05.12.2013 WHICH WAS RECEIVED IN HIS OFFICE (A.O) ON 09.12.2013. ACCORD ING TO AO, THE OBJECTION OF THE ASSESSEE WAS DISPOSED OF BY A SPEAKING ORDER DATED 12.12.201 3 AND THEREAFTER HE ISSUED NOTICE U/S. 143(2) AND 142(1) OF THE ACT ON 12.12.2013. THE MA IN GRIEVANCE OF THE ASSESSEE WAS THAT SEC. 143(2) NOTICE OF THE AO WAS ISSUED AFTER SIX M ONTHS FROM THE END OF THE MONTH ON WHICH THE RETURN OF INCOME WAS FILED THOUGH THE ASS ESSEE HAD WRITTEN LETTER ASKING THE AO TO TREAT THE ORIGINAL RETURN OF INCOME AS THE RETURN O F INCOME PURSUANT TO SEC. 147/148 NOTICE. ACCORDING TO ASSESSEE, THE NOTICE SHOULD HAVE BEEN ISSUED BEFORE 31.08.2013 AND ADMITTEDLY, THE NOTICE U/S. 143(2) WAS ISSUED BY TH E AO ONLY ON 12.12.2013 AND, THEREFORE, THE VERY INITIATION OF REASSESSMENT IS NON-EST IN T HE EYES OF LAW WHICH CONTENTION OF THE ASSESSEE WAS UPHELD BY THE LD. CIT(A) AND HAS BEEN CHALLENGED BY THE REVENUE BEFORE US. 3 ITA NO. 714/KOL/2017 & CO. 43/KOL/2 017 ASIATIC OXYGEN LTD., AY 2011-12 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE DATES GIVEN ABOVE IN RESPEC T TO NOTICE ISSUED U/S. 148 AND THE LETTER WRITTEN BY THE ASSESSEE TO TREAT THE ORIGINAL RETUR N OF INCOME AS RETURN OF INCOME PURSUANT TO THE NOTICE U/S. 147/148 OF THE ACT ETC., WHICH IS E SSENTIAL FOR ADJUDICATING THE ISSUE BEFORE US IS NOT IN DISPUTE. THE LD. CIT, DR VEHEMENTLY ASSA ILING THE DECISION OF THE LD. CIT(A) SUBMITTED THAT AS PER SEC. 143(2) THE LIMITATION PE RIOD RUNS FROM THE DATE OF FILING THE RETURN OF INCOME PURSUANT TO NOTICE U/S 148/147 OF THE ACT AND NOT ANY LETTER WRITTEN BY THE ASSESSEE TO TREAT THE ORIGINAL RETURN OF INCOME FIL ED DULY U/S 139 OF THE ACT AS THE RETURN FILED PURSUANT TO SEC. 147/148 OF THE ACT. ACCORDI NG TO LD. CIT, DR, THERE IS A DIFFERENCE BETWEEN THE LETTER WRITTEN BY THE ASSESSEE AND THE RETURN OF INCOME AS PRESCRIBED BY THE STATUTE. ACCORDING TO HIM, WITHOUT GIVING CREDENCE TO THIS DIFFERENCE BETWEEN THE LETTER AND THE RETURN OF INCOME, THE LD. CIT(A) HAS ERRED IN U PHOLDING THE CONTENTION OF THE ASSESSEE. WE NOTE THAT THE NOTICE U/S. 148/147 OF THE ACT DAT ED 21.01.2013 PURSUANT TO WHICH THE ASSESSEE FILED LETTER DATED 19.02.2013 REQUESTING T HE AO TO TREAT THE ORIGINAL RETURN FILED U/S. 139 OF THE ACT AS RETURN IN RESPONSE TO NOTICE U/S. 148/147 OF THE ACT. AS PER SEC. 143(2), WHERE A RETURN HAS BEEN FURNISHED U/S. 139 OR IN RE SPONSE TO NOTICE UNDER SUB-SECTION(1) OF SEC. 142, THE AO CONSIDERS IT NECESSARY OR EXPEDIEN T TO ENSURE THAT THE ASSESSEE HAS NOT UNDERSTATED THE INCOME OR HAS NOT COMPUTED EXCESSIV E LOSS OR HAS NOT UNDER PAID THE TAX IN ANY MANNER, SHALL SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM ON A DATE T O BE SPECIFIED THEREIN EITHER TO ATTEND THE OFFICE OF THE AO OR CA USED TO BE PRODUCED BEFORE THE AO ANY EVIDENCE ON WHICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN. THE PROVISO TO SEC. 143(2) STATES THAT NO NOTICE UNDER THIS SUB-SECTION SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WH ICH THE RETURN IS FURNISHED. SO, FROM A BARE READING OF THE PROVISIONS, IT IS CLEAR THAT TH E AO IS BARRED FROM SERVING ANY NOTICE U/S. 143(2) OF THE ACT ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED. THEREFORE, IN THIS CASE, SINCE THE ASSESSEE PURSUANT TO THE NOTICE U/S. 147/148 OF THE ACT DATED 21.01.2013 HAD REQUESTED THE AO TO TREAT THE ORIGINAL RETURN OF INCOME FILED U/S. 139 OF THE ACT AS THE RETURN IN RESPONSE TO THE NOTICE U/S. 147/148 VIDE LETTER DATED 19.02.2013 MEANS THE AO H AD TO ISSUE 143(2) NOTICE BEFORE 31.08.2013. ADMITTEDLY, THE 143(2) NOTICE HAS BEEN ISSUED ON 12.12.2013 AND, THEREFORE, THE ACTION OF THE AO IS BARRED BY THE LIMITATION PR ESCRIBED BY THE 1 ST PROVISO TO SEC. 143(2) 4 ITA NO. 714/KOL/2017 & CO. 43/KOL/2 017 ASIATIC OXYGEN LTD., AY 2011-12 OF THE ACT AND THE HONBLE SUPREME COURT IN THE CAS E OF HOTEL BLUE MOON (321 ITR 362) HAS HELD THAT ISSUANCE OF NOTICE U/S 143(2) IS MAND ATORY FOR SCRUTINY ASSESSMENT EVEN IN CASES OF ASSESSMENTS AFTER SEARCH U/S 132 OF THE AC T. SINCE ISSUANCE OF NOTICE U/S 143(2) IS MANDATORY BEFORE SCRUTINY ASSESSMENT EVEN SECTION 2 92BB OF THE ACT CANNOT COME TO THE RESCUE OF THE AO. AND THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. C. PALANIAPAN (284 ITR 257(MAD)] HELD THAT ISSUANCE OF NOTICE U/S 143(2) IS MANDATORY IN REASSESSMENT CASES ALSO. FURTHER, WE DO NOT FIND ANY MERIT IN TH E ARGUMENT OF THE LD. CIT, DR THAT RETURN OF INCOME SHOULD HAVE BEEN FILED AND NOT THE LETTER REQUESTING THE AO TO TREAT THE ORIGINAL RETURN AS THE RETURN OF INCOME PURSUANT TO THE 147/ 148 NOTICE. FOR THAT WE RELY ON THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF IQBAL SINGH ATWAL VS. CIT (1984) 147 ITR 599 (CAL) AND HONBLE DELHI HIGH COU RT IN THE CASE OF PR. CIT VS. SHRI JAI SHIV SHANKAR TRADERS PVT. LTD. (2016) 383 ITR 448 ( DEL.). THEREFORE, THE NOTICE ISSUED BY A.O U/S 143(2) DATED 12.12.2013 IS HIT BY THE 1 ST PROVISO TO SECTION 143(2) OF THE ACT AND THEREFORE THE A.O HAD NO JURISDICTION TO ISSUE NOTI CE U/S 143(2) AFTER 31.08.2013 AND THEREFORE THE ISSUANCE OF NOTICE U/S 143(2) DATED 1 2.12.2013 AND ALL SUBSEQUENT ACTION IS NULL IN THE EYES OF THE LAW AND THEREFORE WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE AND THE ACTION OF THE LD. CIT(A) IN QUASHING THE RE ASSESSMENT PROCEEDING IS UPHELD. APPEAL OF REVENUE IS DISMISSED. 5. CROSS OBJECTION OF THE ASSESSEE IS SUPPORTIVE IN NATURE, THEREFORE, WE FIND NO NEED TO ADJUDICATE THE SAME AND HENCE, THE SAME IS DISMISSE D 6. IN THE RESULT, BOTH THE APPEAL OF REVENUE AND CR OSS OBJECTION OF ASSESSEE ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 ST JULY, 2019. SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 ST JULY, 2019 JD.(SR.P.S.) 5 ITA NO. 714/KOL/2017 & CO. 43/KOL/2 017 ASIATIC OXYGEN LTD., AY 2011-12 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ACIT, CIRCLE-4(1), KOLKATA 2 RESPONDENT M/S. ASIATIC OXYGEN LTD., 8, BBD BAG (EAST), KOLKATA-700 001. 3. 4. 5. CIT(A)-17, KOLKATA (SENT THROUGH E-MAIL) CIT, KOLKATA. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR ITAT KOLKATA