ACIT, Alwar V. M/S AMIL MEDICAMENTS (I) LTD., BHIWADI

ITA 719/JPR/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2134 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 1998-1999
• Appeal Filed On: 06-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAKASH MEENA
• Assessee Lawyers: RAJEEV SOGANI C A DHK
• Keywords: Opportunity of being heard; Assessment record
• Section: 143(3); 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES , JAIPUR JH HKKXPUN] YS[KK LNL; ,O JH DQY HKKJR] U;KF;D L NL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHAR AT, JM VK;DJ VIHY LA-@ ITA NO. 719/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 1998-99 THE ACIT CIRCLE- 2 ALWAR CUKE VS. M/S. AMIL MEDICAMENTS (I) LTD. NOW M/S. DALAS BIOTECH LTD. E-292, PHASE-1, INDUSTRIAL AREA, BHIWADI LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AACCS 4061 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT C.O. NO. 9/JP/2016 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 719/JP/2012) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 1998-99 M/S. AMIL MEDICAMENTS (I) LTD. NOW M/S. DALAS BIOTECH LTD. E-292, PHASE-1, INDUSTRIAL AREA, BHIWADI CUKE VS. THE ACIT CIRCLE- 3 ALWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AACCS 4061 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY: SHRI PRAKASH MEENA, JCIT - DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI RAJEEV SOGANI, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 09/03/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 21 /04/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), ALWAR DATED 09-05-2012 FOR THE ASSESSMENT YEAR 1998-99. THE ASSESSEE HAS FILED THE C.O. ITA NO. 719/JP/2012 THE ACIT, CIRC LE- 2, ALWAR VS. M/S. AMIL MEDICAMENTS (I) LTD. 2 2.1 THE REVENUE HAS RAISED THE FOLLOWING GROUND. THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS O N THE FACTS AND CIRCUMSTANCES OF THE CASE IN QUASHING THE ASSES SMENT MADE U/S 143(3) OF THE ACT BY THE AO. 3.1 THE ASSESSEE HAS RAISED THE FOLLOWING GROUND IN ITS C.O.. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN NOT ADJUDICATING THE GR OUND OF APPEAL RELATING TO ADDITIONS OF RS. 67,94,526/- MAD E BY THE AO U/S 68 OF THE I.T. ACT, 1961. THE ACTION OF THE LD. CIT(A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. 4.1 AT THE OUTSET OF THE HEARING, THE LD. AR OF THE ASSESSEE PRAYED FOR CONDONTION OF DELAY IN FILING THE CROSS OBJECTION W ITH FOLLOWING SUBMISSIONS. BEFORE THE LD. CIT(A) TWO GROUNDS OF APPEAL WERE RAISED. ONE WITH REGARD TO ADDITIONS U/S 68 AND THE OTHER WITH REGARD TO THE DELAY BY THE AO IN SERVING NOTICE U/S 143(2). LD. CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE COMPANY, FOR THE SECOND GROUND, THE NOTICE U/S 143( 2) WAS SERVED WITH DELAY AND HELD THAT ORDER U/S 143(3) WA S WITHOUT JURISDICTION AND INVALID. HOWEVER, LD. CIT(A) DID N OT ADJUDICATE UPON THE GROUND OF APPEAL WITH REGARD TO ADDITIONS U/S 68 ON THE PREMISE THAT SINCE THE ORDE R U/S 143(3) WAS QUASHED, THIS GROUND DID NOT REQUIRE ANY SEPARATE ADJUDICATION. SUBSEQUENTLY, APPEAL WAS FILED BY THE DEPARTMENT BEFORE HON'BLE ITAT JAIPUR BENCH AGAINST THE SAID ORDER OF THE LD. CIT(A). THE ASSESSEE COMPANY WAS UNABLE TO TAKE A ITA NO. 719/JP/2012 THE ACIT, CIRC LE- 2, ALWAR VS. M/S. AMIL MEDICAMENTS (I) LTD. 3 STAND WHETHER A CROSS OBJECTION WAS REQUIRED TO BE FILED FOR NON-ADJUDICATION BY THE LD. CIT(A) WITH REGARD TO THE ADDITION U/S 68. THE ASSESSEE COMPANY CONSULTED DIFFERENT TAX PRACTITIONERS AND FINALLY AFTER WIDE CONSULTATION C AME TO THE CONCLUSION THAT A CROSS OBJECTION MAY BE FILED IN T HIS REGARD. THIS RESULTED INTO DELAY IN FILING THE CROSS OBJECT ION BEFORE THE HON'BLE ITAT JAIPUR. 4.2 THE LD. AR OF THE ASSESSEE DURING THE COURSE OF RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF C OLLECTOR, LAND ACQUISITION VS. MST. KATIJI (1987),167 ITR 471 AND M/S. GMG ENGINEERING INDUSTRIES VS. M/S. ISSA GREEN POWER SO LUTION (CIVIL APPEAL NO. 4473/2015) WITH A.C. GOVINDARAJ AND ORS VS. M K RISHNAMMORTHY & ORS (CIVIL APPEAL NO. 4473/2015. THE HON'BLE SUPRE ME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI OBSERVED AS UNDER:- THE LEGISLATURE HAS CONFERRED POWER TO CONDONE DELA Y BY ENACTING SECTION 5 OF THE LIMITATION ACT, 1963, IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON MERITS. THE EXPRESSION ' SUFFICIENT CAUS E ' IN SECTION 5 IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY TH E LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTI CE--THAT BEING THE LIFE-PURPOSE OF THE EXISTENCE OF THE INSTITUTIO N OF COURTS. A JUSTIFIABLY LIBERAL APPROACH HAS TO BE ADOPTED ON P RINCIPLE. 'EVERY DAY'S DELAY MUST BE EXPLAINED' DOES NOT IMPL Y A PEDANTIC APPROACH. THE DOCTRINE MUST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER. ITA NO. 719/JP/2012 THE ACIT, CIRC LE- 2, ALWAR VS. M/S. AMIL MEDICAMENTS (I) LTD. 4 THE DOCTRINE OF EQUALITY BEFORE LAW DEMANDS THAT AL L LITIGANTS, INCLUDING THE STATE AS A LITIGANT, ARE A CCORDED THE SAME TREATMENT AND THE LAW IS ADMINISTERED IN AN EVENHAN DED MANNER. THERE IS NO WARRANT FOR ACCORDING A STEP-MOTHERLY T REATMENT WHEN THE STATE IS THE APPLICANT PRAYING FOR CONDONATION OF DELAY. 'WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATI ONS ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVES TO BE PREFERRED, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE A VESTED RIGHT IN INJUSTICE BEING DONE BECAUSE OF A NON-DELI BERATE DELAY.' 4.3 ON THE OTHER HAND, THE LD. DR OPPOSED THE CONDO NATION APPLICATION OF THE ASSESSEE FOR LATE FILLING OF CROSS OBJECTI ON. 4.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT EMERGES FROM THE RECORD AND ARGUMENTS OF THE LD. AR OF THE ASSESSEE THAT THE LD. CIT(A) HAS NOT ADJU DICATED UPON THE GROUND OF APPEAL RELATING TO THE ADDITION OF RS. 67 ,94,526/- MADE BY THE AO U/S 68 OF THE ACT. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO THE CASE LAWS RE LIED ON BY THE LD. AR OF THE ASSESSEE (SUPRA), THE DELAY IN FILING THE AP PEAL BY THE ASSESSEE IS CONDONED AND THE SOLITARY GROUND RAISED BY THE ASS ESSEE IN ITS C.O. (SUPRA) IN THE INTEREST OF EQUITY AND JUSTICE IS RE STORED TO THE FILE OF THE LD. CIT(A) TO DECIDE IT DENOVO BY PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THUS THE SOLITARY GROUND RAI SED BY THE ASSESSEE IN ITS C.O. IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 719/JP/2012 THE ACIT, CIRC LE- 2, ALWAR VS. M/S. AMIL MEDICAMENTS (I) LTD. 5 5.1 APROPOS SOLITARY GROUND OF THE REVENUE, THE FACTS A S EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- 4.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER, THE ASSESSMENT RECORD AS WELL AS SUBMISSION MADE BY THE APPELLANT AND CASES RELIED UPON. I FIND THAT NOTICE U/S 143(2) WAS ISSUED ON 15-09-1999 AND SENT BY REGISTERED AD. FROM THE RECORD, IT IS SEEN THAT NOTICE DATED 15-09-1999 HAS COME BACK UNSERVED WITH THE FOLLOWING REMARKS OF POSTAL AUTHORITY THERE IS NO SUCH FIRM ON THIS PLOT HENC E RETURNED DATED 17-09-1999. THE NOTICE HAS BEEN SENT TO M/S . AMIL MEDICAMENTS (INDIA), E-202, INDUSTRIAL AREA, BHIWAD I, ALWAR. FROM THE NOTING ON THE ENVELOP OF REGISTERED AD CONTAINING NOTICE DATED 15-09-1999 IT IS APPARENT T HAT NOTICE HAS NOT BEEN REFUSED BY THE APPELLANT AND IT HAS CO ME BACK UNSERVED. FROM THE RECORD, IT IS OBSERVED THAT THE NEXT NOTIC E U/S 143(2)/142(1) AND QUESTIONNAIRE HAS BEEN SENT ON 28 -02- 2000 WHICH HAS BEEN SERVED ON THE APPELLANT AS PER THE ACKNOWLEDGEMENT AVAILABLE ON FILE. THIS NOTICE HAS BEEN SENT TO M/S. SUDMAN LABORATORY LTD. , F-292, INDUSTRIAL AREA, BHIWADI. IN RESPONSE TO THIS NOTICE A REPLY/ TELEGR AM HAS BEEN RECEIVED BY THE AO ON 08-09-2000 AND A LETTER DATED 14-09-2000 HAS BEEN SENT TO THE ASSESSEE OR ADJOURN ING THE CASE TO27-09-2000. THIS SEQUENCE OF EVENT IS ALSO N OTED IN THE ORDER SHEET IN THE ASSESSMENT RECORD. SINCE THE RETURN IN THIS CASE WAS FILED ON 30-11-19 98, THE NOTICE U/S 143(2) WAS REQUIRED TO BE SERVED ON OR BEFORE THE EXPIRY OF 12 MONTHS FROM THE END OF THE MONTHS IN WHICH THE RETURN WAS FURNISHED I.E. ON OR BEFORE 30-11-19 99. FROM THE ABOVE PARA IT IS CLEAR THAT THERE WAS NO VALID SERVICE OF NOTICE U/S 143(2) IN THIS CASE ON OR BEFORE 30-11-1 999. IN THE FACTS AND CIRCUMSTANCES OF THE CASE IT IS HELD THAT SINCE THERE WAS NO VALID SERVICE OF NOTICE WITHIN THE TIME LIM IT LAID DOWN AS PER SECTION 143(2) OF THE I.T. ACT, THE SUB SEQUENT PROCEEDINGS AND THE ASSESSMENT ORDER U/S 143(3) IS FOUND TO ITA NO. 719/JP/2012 THE ACIT, CIRC LE- 2, ALWAR VS. M/S. AMIL MEDICAMENTS (I) LTD. 6 BE WITHOUT JURISDICTION AND INVALID. THEREFORE, THE ASSESSMENT ORDER U/S 143(3) IN THIS CASE IS HEREBY QUASHED. 4.4 SINCE THE ASSESSMENT ORDER HAS BEEN QUASHED THE ADDITION OF RS. 67,94,526/- U/S 68 OF THE ACT N O LONGER SURVIVES. THEREFORE, THERE IS NO NEED TO SEPARATELY ADJUDICATE ON THE GROUND OF THE APPELLANT AGAINST THIS ADDITIO N. 5. IN THE RESULT, THE APPEAL IS ALLOWED. 5.2 DURING THE COURSE OF HEARING, THE LD. DR PRAYED THAT THE LD. CIT(A) HAS ERRED IN QUASHING THE ASSESSMENT MADE U/S 143(3 ) OF THE ACT BY THE AO AND NOT CONSIDERING THE DECISION OF HON'BLE PUN JAB & HARYANA HIGH COURT IN THE CASE OF RAMESH KHOSLA S ITO AND ANR 1 55 ITR 556 WHEREIN IT WAS HELD THAT NOTICE DISPATCHED BY THE REGISTERE D POST EITHER NOT RECEIVED BACK OR RECEIVED BACK WITH ENDORSEMENT R EFUSED IS DEEMED SERVICE. CONCLUSIVELY, THE LD. DR PRAYED FOR ALLOWI NG THE GROUND OF APPEAL OF THE DEPARTMENT. 5.3 ON THE OTHER HAND, THE RELIED ON THE ORDER OF T HE LD. CIT(A). 5.4 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE TH E ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADIN G OF MEDICINES. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE C OMPANY FILED ITS RETURN OF INCOME ON 30-11-1998 DECLARING LOSS OF RS. 4,46, 915/-. IT IS NOTED FORM THE RECORDS THAT THE ASSESSEE COMPANY WAS INCORPORA TED ON 18-07-1989 ITA NO. 719/JP/2012 THE ACIT, CIRC LE- 2, ALWAR VS. M/S. AMIL MEDICAMENTS (I) LTD. 7 WITH THE NAME OF M/S. SUDMAN LABORATORIES LTD. WITH ITS REGISTERED ADDRESS AT E-292, INDUSTRIAL AREA, BHIWADI, TIJARA, ALWAR. THE NAME OF THE COMPANY WAS SUBSEQUENTLY CHANGED TO M/S. AMIL M EDICAMENTS (I) LTD. IT IS ALSO NOTICED THAT THE ASSESSEE COMPANY WHILE FILING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 1998-99 HAD MENTIONE D ITS NAME AS AMIL MEDICAMENTS (I) LTD. HAVING REGISTERED OFFICE AT E- 292, INDUSTRIAL AREA, BHIWADI, ALWAR. THE INTIMATION U/S 143 (1) FOR THE RELEVANT ASSESSMENT YEAR WAS SENT BY THE DEPARTMENT IN THE NAME OF THE ASSESSEE COMPANY I.E. M/S. AMIL MEDICAMENTS (I) LTD. THE AO ISSUED NOTICE U/S 143(2) ON 15- 09-1999 THROUGH REGISTERED AD TO THE ASSESSEE COMPA NY. THE ADDRESS MENTIONED IN THE SAID NOTICE WAS E-292, INDUSTRIAL AREA, BHIWADI, ALWAR. HOWEVER, THE SAID NOTICE CAME BACK UNSERVED WITH TH E REMARKS OF THE POSTAL AUTHORITIES THERE IS NO SUCH FIRM ON THIS PLOT HENCE RETURNED DATED 17-09-1999 . SUBSEQUENTLY, ANOTHER NOTICE U/S 143(2)/142(1) A ND QUESTIONNAIRE WAS SENT BY THE AO ON 28-02-2002 IN T HE NAME OF M/S.SUDMAN LABORATORIES LTD. THE ADDRESS MENTIONED IN THE SAID NOTICE WAS F-292, INDUSTRIAL AREA, BHIWADI, ALWAR. ALTHOUG H THE WRONG ADDRESS AND NAME WAS MENTIONED IN THE NOTICE YET THE SAME W AS SERVED ON THE ASSESSEE COMPANY. IT EMERGES FROM THE ABOVE DISCUSS IONS THAT THE ASSESSEE HAD CHANGED ITS NAME. FURTHER THE ASSESSEE HAD NOT CHALLENGED ITA NO. 719/JP/2012 THE ACIT, CIRC LE- 2, ALWAR VS. M/S. AMIL MEDICAMENTS (I) LTD. 8 THE SERVICE OF NOTICE BEFORE THE ASSESSING OFFICER AND THE ASSESSEE PARTICIPATED THE ASSESSMENT PROCEEDINGS. IN SUCH A SITUATION, THE LD. CIT(A) IS NOT JUSTIFIED IN QUASHING THE ASSESSMENT MADE U/S 143(3) OF THE ACT BY THE AO WHICH IS CONTRARY DECISION OF THE HON 'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RAMSH KHOSLA VS. ITO (SUPRA). THUS THE APPEAL OF THE REVENUE IS ALLOWED. 6.0 IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED AND THE C.O. OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PUR POSES. ORDER PRONOUNCED IN THE OPEN COURT ON 21 -04-201 7. SD/- SD/- DQY HKKJR HKKXPUN (KUL BHARAT) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 /04/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ACIT, CIRCLE- 2, ALWAR 2. IZR;FKHZ@ THE RESPONDENT- M/S. AMIL MEDICAMENTS (I) LTD., BH IWADI 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 719/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR