Shree Padmasagar Exports Private Ltd., Kolkata V. CIT-II, Kolkata, Kolkata

ITA 731/KOL/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8095 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 08-05-2012
• Court: TRIBUNAL
• Department Lawyers: A K MAHAPATRA
• Assessee Lawyers: MIRAJ D. SHAH
• Section: 143(3); 263; 63

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND , . . !' ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI C. D. RAO, AM ] # # # # / I.T.A NO. 731/KOL/2012 $% &' $% &' $% &' $% &'/ // / ASSESSMENT YEAR: 2008-09 SHREE PADMASAGAR EXPORTS PVT. LTD. VS. COMMISSIO NER OF INCOME-TAX-II, KOLKATA (PAN: AAECS4645D) ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 09.10.2012 DATE OF PRONOUNCEMENT: 25.10.2012 FOR THE APPELLANT: SHRI MIRAJ D. SHAH FOR THE RESPONDENT: SHRI A. K. MAHAPATRA, CIT(DR) !- / ORDER PER MAHAVIR SINGH, JM ( , , , , ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF REVISION ORDER OF CIT(A)-II, KOLKATA IN M. NO. CIT, KOL-II/U/S.263/C-15/2011-12/9823-26 DATED 05.0 3.2012. ASSESSMENT WAS FRAMED BY DCIT, CIRCLE-5, KOLKATA U/S. 143(3) OF THE INCOME-T AX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008-09 VIDE HIS ORDER DA TED 29.12.2010. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE REVISION ORDER PASSED BY CIT-II, KOLKATA U/S. 263 OF THE ACT. FOR THIS, ASSESSEE H AS RAISED FOLLOWING FOUR GROUNDS: 1. THAT THE NOTICE U/S 263 OF THE I T ACT 1961 ISS UED BY THE LEARNED COMMISSIONER OF INCOME TAX (CIT) WAS WITHOUT JURISDICTION AND INVAL ID AND THE ORDER PASSED ON THE BASIS OF SUCH NOTICE WAS BAD IN LAW HENCE THE SAME BE QUASHE D AND OR ANNULLED. 2. THAT THE LEARNED CIT WAS UNJUSTIFIED IN HOLDING THAT THE ASSESSMENT ORDER PASSED UNDER 143(3) OF THE INCOME TAX ACT, 1961 BY THE LEA RNED ASSESSING OFFICER (AO) ON 29-12- 2010 IN THE CASE OF THE APPELLANT FOR THE ASSESSMEN T YEAR 2008-09 WAS ERRONEOUS AND CONSEQUENTLY PREJUDICIAL TO THE INTEREST OF THE REV ENUE AND THEREBY SETTING ASIDE THE SAID ASSESSMENT ORDER UNDER SECTION 263 OF THE SAID ACT. 3. THAT THE LEARNED CIT FAILED TO APPRECIATE THAT T HE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE SAID ACT BY THE LEARNED AO ON 29-12-2010 FOR THE ASSESSMENT YEAR 2008-09 WAS NOT ERRONEOUS IN LAW AND CONSEQUENTLY, WAS NOT PREJUDICIAL TO THE INTEREST OF THE REVENUE AND AS SUCH, THE LEARNED CIT HAD NO JUR ISDICTION TO INTERFERE WITH THE SAID ASSESSMENT ORDER, DATED 29-12-2010, OF THE LEARNED AO. 4. THAT THE ORDER OF THE LEARNED CIT IS BASED ON WR ONG APPRECIATION OF THE FACTS OF THIS CASE AND IS BAD IN LAW. 2 ITA 731/K/2012 SHREE PADMASAGAR EXPORTS PVT. LTD. A.Y. 08-09 3. BRIEF FACTS LEADING TO THE ABOVE ISSUE ARE THAT THE ASSESSMENT WAS FRAMED BY AO U/S. 143(3) FOR THE RELEVANT AY 2008-09 VIDE HIS ORDER D ATED 29.12.2010. THE ASSESSEE FILED ITS RETURN OF INCOME ON 31.03.2001 WHICH WAS ASSESSED B Y ISSUING NOTICES U/S. 143(2) OF THE ACT AND IN LIEU OF THE NOTICES ASSESSEE FILED DETAILS F ROM TIME TO TIME AND CASE WAS HEARD BY AO AND DISCUSSED WITH THE ASSESSEES COUNSEL AND ASSESSMEN T WAS FRAMED. DURING THE YEAR UNDER CONSIDERATION, ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF INVESTMENT ACTIVITIES IN SHARES. THE AO AFTER GOING THROUGH THE DETAILS FRAMED ASSES SMENT ORDER. SUBSEQUENTLY, THE CIT-II, KOLKATA ISSUED SHOW CAUSE NOTICE VIDE NO. CIT-II/KO L/U/S.263/C-15/2010-11/9065 DATED 23.01.2012 AS UNDER: SUB: NOTICE U/S. 263 OF THE I. T. ACT 1961, IN YOU R CASE FOR A.Y. 2008-09 FIXATION OF HEARING MATTER REGARDING PAN-AAECS 4654 D I HAVE CALLED FOR AND EXAMINED THE ASSESSMENT REC ORD IN YOUR CASE FOR ASSESSMENT YEAR 2008-09. IT APPEARS THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE . YOU ARE REQUESTED TO APPEAR BEFORE ME EITHER PERSO NALLY OR THROUGH AN AUTHORIZED REPRESENTATIVE IN THIS REGARD ON 02.02.2012 AT 3.30 P.M. AND FINALLY, CIT-II, KOLKATA REVISED THE ASSESSMENT FRAMED U/S. 143(3) OF THE ACT BY PASSING A REVISION ORDER U/S. 263 OF THE ACT VIDE ORDER DATED 05.03.2012 AS UNDER: ORDER U/S. 263 OF THE I. T. ACT, 1961 THE ASSESSMENT ORDER FOR THE A. YR. 2008-09 WAS PAS SED U/S. 143(3) ON 29.12.2010 AT THE TOTAL INCOME OF RS.69,44,430/-. FROM THE PROFIT & LOSS ACCOUNT OF THE COMPANY, IT I S NOTICED THAT THE ASSESSEE CLAIMED LOSS ON SALE OF LAND AT RS.6,64,482,85/-. THIS DEA L WAS NOT ENQUIRED INTO. SUNDRY BALANCES (RS.1,28,035/-) WAS WRITTEN OFF. THIS ALSO REQUIRE D INVESTIGATION. THE A.O. DID NOT MAKE THE REQUISITE ENQUIRIES. HENCE, PROCEEDINGS U/S. 263 O F THE I. T. ACT WAS INITIATED. THE A.R. OF THE ASSESSEE COMPANY WAS HEARD IN THE M ATTER. I HOLD THAT THE ORDER PASSED BY THE A.O. IS ERRONEOUS IN SO FAR AS IT IS PREJUDI CIAL TO THE INTEREST OF THE REVENUE. THE ASSESSMENT ORDER IS SET ASIDE. THE A.O. IS DIR ECTED TO REFRAME THE ORDER AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE OF BEING HEA RD. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE TRIBUNA L AND RAISED AFORESAID GROUNDS. 4. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE STAT ED THAT THERE IS NO ISSUE RAISED IN THE SHOW CAUSE NOTICE AND EVEN HE HAS NOT APPLIED HIS M IND WHILE PASSING REVISION ORDER U/S. 263 OF THE ACT AS TO HOW THE ASSESSMENT ORDER IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE. HE STATED THAT THERE IS NO IOTA OF ALLEGA TION IN THE SHOW CAUSE NOTICE THAT ON WHAT ACCOUNT HE WANTED TO REVISE THE ASSESSMENT, WHICH W AS FRAMED BY AO AFTER DETAILED HEARING AND SUBMISSIONS TAKEN ON RECORD. EVEN THE ASSESSMEN T ORDER IS RUNNING INTO 8 PAGES. LD. 3 ITA 731/K/2012 SHREE PADMASAGAR EXPORTS PVT. LTD. A.Y. 08-09 COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT VS. G. K. KABRA, COOPERATIVE INDUSTRIAL ESTATE (1994) 75 TAXMAN 503 (AP). WHEREIN HONBLE HIGH COURT HAS DELIBERATED THAT WHA T IS REQUIRED U/S. 263 OF THE ACT IS THAT THE ASSESSEE MUST BE AFFORDED AN OPPORTUNITY OF BEING H EARD BY CIT WITH REGARD TO THE ERROR WHICH HE PROPOSES TO REVISE. FURTHER, OPPORTUNITY AFTER SETTING ASIDE THE ORDER OF AO WOULD NOT AMOUNT TO OPPORTUNITY OF MEETING THE ALLEGED ERROR IN ASSESSMENT PROPOSED TO BE REVISED. IN THE PRESENT CASE, LD. COUNSEL STATED THAT DURING THE CO URSE OF HEARING OR IN THE SHOW CAUSE NOTICE, THE CIT HAS NOT RAISED ANY ISSUE THAT WHAT IS THE E RROR IN THE ASSESSMENT ORDER WHICH AMOUNTED TO PREJUDICE TO THE REVENUE. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE ARE OF THE VIEW THAT POWERS OF THE CIT ARE VERY WIDE IN EXERCISING THE REVISIONARY POWERS U/S. 263 OF THE ACT. BUT ONLY LIMITATION ON HIS POW ERS IS THAT HE MUST HAVE SOME MATERIAL WHICH WOULD ENABLE HIM TO FORM A PRIMA FACIE OPINION THAT THE ORDER PASSED BY THE AO WAS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF R EVENUE. ONCE CIT COMES TO A CONCLUSION ON THE BASIS OF MATERIAL THAT THE ORDER OF THE AO IS ERRON EOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, HE HAS POWERS TO PASS AN ORDER AS THE CIRCUMSTANCES OF THE CASE MAY WARRANT. IN THE PRESENT CASE BEFORE US, FROM THE ORDER OF CIT PASSED U/S. 2 63 OF THE ACT I.E. IN THE REVISIONARY ORDER, NOWHERE, IT IS BROUGHT ON RECORD THAT THE CIT IS SA TISFIED THAT THE ORDER OF AO IS ERRONEOUS SO AS TO PREJUDICIAL TO THE INTEREST OF REVENUE. EVEN ASS ESSEE WAS NOT GIVEN NOTICE THAT WHAT IS ERRONEOUS AND HOW THE ASSESSMENT ORDER IS PREJUDICI AL TO THE INTEREST OF REVENUE. AT LEAST, BEFORE PASSING REVISIONARY ORDER, THE CIT SHOULD PU T THE ASSESSEE ON NOTICE THE REASONS OF SUCH REVISION. BUT IN THE PRESENT CASE, THE CIT HAS DON E NOTHING. IN SUCH CIRCUMSTANCES, WE HAVE NO HESITATION IN QUASHING THE ORDER PASSED BY CIT U/S. 263 OF THE ACT. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . 7. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH OCT., 2012. SD/- SD/- . . !' , (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( ' ' ' ') )) ) DATED : 25TH OCTOBER, 2012 ./ $01 2 JD.(SR.P.S.) 4 ITA 731/K/2012 SHREE PADMASAGAR EXPORTS PVT. LTD. A.Y. 08-09 !- 3 +4 5!4&6- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT SHREE PADMASAGAR EXPORTS PVT. LTD., RO OM NO.2, BLOCK-F, 2 ND FLOOR, MEHTA BUILDING, 55, B.R.B. BASU ROAD, KOLKA TA-700 001. . 2 +,)* / RESPONDENT CIT-II, KOLKATA 3 . -$ ( )/ THE CIT(A), KOLKATA 4. 5. D CIT, CIRCLE-5, KOLKATA 4<= +$ / DR, KOLKATA BENCHES, KOLKATA ,4 +/ TRUE COPY, !-$>/ BY ORDER, 1 /ASSTT. REGISTRAR .