Kerala State Civil supplies Corporation Ltd, Ernakulam V. ACIT, Cochin

ITA 72/COCH/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64936 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 03-09-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 24-01-2011
• Court: TRIBUNAL
• Assessee Lawyers: RADHESH BHAT
• Keywords: Principle of natural justice; Assessment record; Revised return
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. NO. 72/COCH/2011 ASSESSMENT YEAR : 2005-06 M/S. KERALA STATE CIVIL SUPPLIES CORPORATION LTD. MAVELI BHAVAN, GANDHI NAGAR, KOCHI-682 020 [PAN : AAACK 6767F] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(2), KOCHI. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI RADHESH BHAT, CA REVENUE BY SHRI PRATAP NARAYAN SHARMA, JR. DR DATE OF HEARING 03/09/2012 DATE OF PRONOUNCEMENT 16/11/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 17.3.2010 PASSED BY LD. CIT, KOCHI U/S 263 OF THE ACT AND IT RELATES TO THE ASSESSMENT YEAR 2005-06. THE ASSESSEE IS CHALLENGING THE VALIDITY OF INITIAT ION OF REVISION PROCEEDINGS. THE APPEAL IS BARRED BY LIMITATION BY 247 DAYS. THE ASSESSEE HAS MOVED A PETITION REQUESTING THE BENCH TO CONDONE THE DELAY. IN THE PETITION, IT IS STATED THAT THE APPELLANT IS A GOVERNMENT OF KERALA UNDERTAKING AND THE IMPUGNED R EVISION ORDER WAS MISPLACED IN TRANSIT WHILE SENDING THE SAME TO THE TAX CONSULTAN TS. WITHOUT KNOWING THE FACT OF MISPLACEMENT, THE ASSESSEE WAS UNDER THE IMPRESSION THAT THE TAX CONSULTANTS WOULD HAVE TAKEN NECESSARY ACTION. THE PRESENT APPEAL WA S PREFERRED IMMEDIATELY UPON REALISING THE FACT OF MISPLACEMENT. ACCORDINGLY IT IS PRAYED THAT THE DELAY MAY KINDLY BE CONDONED. THE LD D.R FORMALLY OBJECTED TO THE PETI TION FILED BY THE ASSESSEE. HAVING REGARD TO THE SUBMISSIONS MADE IN THE PETITION, WE ARE OF THE VIEW THAT THERE WAS I.T.A. NO.72/COCH/2011 2 SUFFICIENT CAUSE FOR THE DELAY IN FILING THE PRESEN T APPEAL. ACCORDINGLY, WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 2. THE FACTS RELATING TO THE SAID ISSUE ARE STA TED IN BRIEF. THE ADMINISTRATIVE COMMISSIONER, WHILE EXAMINING THE ASSESSMENT RECORD , NOTICED THAT THE ASSESSING OFFICER DID NOT EXAMINE FOLLOWING POINTS WHILE COMP LETING THE ASSESSMENT:- (A) LONG OUTSTANDING CURRENT LIABILITIES, WHICH WE RE POINTED OUT BY THE AUDITORS. (B) INTEREST ACCRUED ON SHORT TERM DEPOSITS. (C) INTEREST ACCRUED ON ADVANCES (D) INTEREST TO BE CHARGED U/S 201(1A) OF THE ACT. ACCORDINGLY, AFTER HEARING THE ASSESSEE, THE LD CIT DIRECTED THE AO TO EXAMINE THE ABOVE SAID ISSUES AFRESH. THE ASSESSEE IS AGGRIEVE D BY THE SAID DIRECTION OF THE LD. CIT. 3. THE LD. COUNSEL APPEARING ON BEHALF OF THE A SSESSEE SUBMITTED THAT THE ASSESSMENT ORDER PASSED BY THE AO DOES NOT SUFFER F ROM ANY ERROR AND THE SAME IS ALSO NOT PREJUDICIAL TO THE INTERESTS OF THE REVENUE. A CCORDINGLY HE CONTENDED THAT THE VERY INITIATION OF REVISION PROCEEDINGS IS NOT IN ACCORD ANCE WITH LAW. HE FURTHER SUBMITTED THAT THE ISSUES POINTED OUT BY THE LD CIT WAS IN FA CT EXAMINED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND IN SUPPORT OF THE SAID SUBMISSION, THE LD A.R DREW OUR ATTENTION TO THE LETTER DATED 17-10-2007 I SSUED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 4. ON THE OTHER HAND, THE LD D.R SUBMITTED THAT THE ASSESSMENT ORDER IS RENDERED ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVEN UE, SINCE THE AO HAS FAILED TO EXAMINE THE ISSUES THAT WERE POINTED OUT BY THE LD CIT. THE LD D.R SUBMITTED THAT THE ASSESSEE HAD FILED A REVISED RETURN OF INCOME AND T HERE WAS HUGE DIFFERENCE BETWEEN THE FIGURES MENTIONED IN THE ORIGINAL BALANCE SHEET AND THE REVISED BALANCE SHEET IN RESPECT OF VARIOUS ITEMS. HENCE, THE AO HAS SOUGHT CLARIFICATION ONLY IN RESPECT OF SUCH DIFFERENCE ONLY AND THE SAME CANNOT BE TAKEN AS EXA MINATION ON THE PART OF THE AO. THE LD D.R FURTHER POINTED OUT THAT THE ASSESSMENT ORDER, BEING A JUDICIAL ORDER, SHOULD I.T.A. NO.72/COCH/2011 3 SPEAK ITSELF, WHERE AS THE IMPUGNED ASSESSMENT ORDE R IS A CRYPTIC ONE AND IT DOES NOT SHOW THAT THE AO DID EXAMINE THE ISSUES THAT WERE P OINTED OUT BY LD CIT. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE RECORD. THE FACT REMAINS THAT THE AO HAS RAISED QUERY WITH REGARD TO THE DIFFERENCES IN THE FIGURES BETWEEN THE ORIGINAL BALANCE SHEET AND REVISED BALA NCE SHEET. THUS, AS POINTED OUT BY LD D.R., THE AO DID NOT EXAMINE THE IMPUGNED ISSUES DURING THE COURSE OF ASSESSMENT PROCEEDINGS FROM TAXATION ANGLE. FOR RESOLVING THE ISSUE BEFORE US, WE CAN GAINFULLY REFER TO THE DECISION RENDERED BY HONBLE SUPREME C OURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD VS. CIT (248 ITR 83). THE FOLLO WING OBSERVATIONS MADE BY THE HONBLE APEX COURT ARE RELEVANT HERE. THERE CAN BE NO DOUBT THAT THE PROVISION CANNOT BE INVOKED TO CORRECT EACH AND EVERY TYPE OF MISTAKE OR ERROR COMMITTED B Y THE ASSESSING OFFICER, IT IS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. AN INCORRECT ASSUMPTION OF FACTS OR AN INCORRECT APPLICATION OF LAW WILL SATISFY THE REQUIREMENT OF THE ORDER BEING ERRONEOUS. IN THE SAME CATEGORY FALL ORDERS PASSED WITHOUT APPLYING T HE PRINCIPLES OF NATURAL JUSTICE OR WITHOUT APPLICATION OF MIND THE PHRASE PREJUDICIAL TO THE INTERESTS OF THE R EVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE A SSESSING OFFICER. EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF THE ASSESSING OFFICER, CANNOT BE TREATED AS PREJUDICIAL TO THE INTERESTS O F THE REVENUE, FOR EXAMPLE, WHEN AN INCOME-TAX OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS OF REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE INCOME-TAX OFFICER HAS TAKEN ONE VIEW WITH WHICH THE COMMISSIONER DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF T HE REVENUE UNLESS THE VIEW TAKEN BY THE INCOME-TAX OFFICER IS UNSUSTAINABLE IN LAW. 6. THUS THE NON-APPLICATION OF MIND ON THE PART OF THE AO ALSO RENDERS THE ASSESSMENT ORDER TO BE ERRONEOUS ONE. FURTHER, WH AT IS IMPORTANT IS THAT AO SHOULD HAVE APPLIED HIS MIND AND SHOULD HAVE TAKEN ONE PLAUSIBLE VIEW ON THE MATTER UNDER DISPUTE. EVEN FOR A MOMENT, IT IS PRES UMED THAT THE AO DID APPLY HIS MIND; THE SAME SHOULD BE BROUGHT IN THE ASSESSM ENT ORDER. IN THIS CONNECTION, WE FEEL IT PERTINENT TO EXTRACT THE FOL LOWING OBSERVATIONS MADE BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. TOYOTA MOTOR CORPORATION (306 ITR I.T.A. NO.72/COCH/2011 4 52) HAS APPROVED THE FOLLOWING OBSERVATIONS MADE BY HONBLE DELHI HIGH COURT IN THAT CASE REPORTED IN 309 ITR 49:- WE FIND THAT THE ORDER PASSED BY THE ASSESSING OF FICER IS CRYPTIC, TO SAY THE LEASE, AND IT CANNOT BE SUSTAINED. THE TRIBUN AL CANNOT SUBSTITUTE ITS OWN REASONING TO JUSTIFY THE ORDER PASSED BY THE A SSESSING OFFICER WHEN THE ASSESSING OFFICER HIMSELF DID NOT GIVE ANY REA SON IN THE ORDER PASSED BY HIM. UNDER THE CIRCUMSTANCES, WE ANSWER THE QU ESTION IN THE AFFIRMATIVE, IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE AND REMAND THE MATTER BACK TO THE FILE OF THE ASSESSIN G OFFICER TO DECIDE THE ISSUE AFRESH IN TERMS OF THE ORDER PASSED BY THE C OMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT. IN THE INSTANT CASE, THE IMPUGNED ASSESSMENT ORDER IS A CRYPTIC ONE. IT DOES NOT SPEAK OF THE RESULT OF EXAMINATION OF THE VARIOUS I SSUES. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE REVISION ORDER PASSED BY LD CIT U/S 263 OF THE ACT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. PRONOUNCED ACCORDINGLY ON 16-11-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 16 TH NOVEMBER, 2012 GJ COPY TO: 1. M/S. KERALA STATE CIVIL SUPPLIES CORPORATION LTD ., MAVELI BHAVAN, GANDHI NAGAR, KOCHI-682 020 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1(2), KOCHI. 3. THE COMMISSIONER OF INCOME-TAX, KOCHI. 4. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 5. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN I.T.A. NO.72/COCH/2011 5