M/S SWARAJ BUILDERS, KORBA(CG) V. THE PR. COMMISSIONER OF INCOME TAX, BILASPUR(CG)

ITA 77/BIL/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4887 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 13-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K MISHRA
• Assessee Lawyers: G S AGRAWAL
• Keywords: Principle of natural justice
• Section: 143(3); 142(1); 147; 148; 263

Judgement Text

1 ITA NO. 7 7/BIL/2016 IN THE INCOME TAX APPE LLATE TRIBUNAL RAIPUR BENCH: RAIPUR BEFORE SHRI R. K. PANDA, ACCOUNTANT ME MBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A .NO. 77/BIL/201 6 (A.Y 2010-11) SWARAJ BUILDERS AGROHA MARG, KORBA KORBA (CG) ABDFS0662C (APPELLANT) VS PR. COMMISSIONER OF INCOME TAX AAYAKAR BHAWAN VYAPAR VIHAR, BILASPUR RAIPUR BILASPUR (CG) (RESPONDENT) APPELLANT BY SH. G. S. AGRAWAL, CA RESPONDENT BY SH. P. K. MISHRA, CIT DR ORDER PER SUCHITRA KAMBLE, JM THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER DATED 21/03/2016 PASSED UNDER SECTION 263 OF THE INCOME TAX ACT, 1961 BY THE PRINCIPAL COMMISSIONER OF INCOME TAX, BILASPUR, FOR ASSESSMENT YEAR 2010-11. 2. THE GROUNDS OF APPEAL ARE AS UNDER: 1. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE PROCEEDING U/S 263 ARE ILLEGAL AND BAD IN LAW, AS ALL THE ISSUES MENTIONED IN THE AFORESAID ORDER WERE DULY CONSIDERED AND EXAMINED DURING THE ASSESSMENT PROCEEDING AS WELL AS RE-ASSESSMENT PROCEEDINGS. 2. THAT THE ASSESSEE HAD SUBMITTED THE FORM 15G BE FORE THE ITO-TDS, BILASPUR , ON 3/5/2010, AND THE PROOF OF SUBMISSION HAD BEEN SUBMITTED BEFORE THE LEARNED A.O DURING THE RE-ASSESSMENT PRO CEEDING, AFTER CONSIDERING THE SAME AND BEING SATISFIED LEARNED A. O DROP THE RE- DATE OF HEARING 17.08.2018 DATE OF PRONOUNCEMENT 25.10.2018 2 ITA NO. 7 7/BIL/2016 ASSESSMENT PROCEEDING ON THAT. ON THE SAME ISSUE PR OCEEDING U/S 263 IS BEYOND THE JURISDICTION LEARNED PR. CIT AND THE ORD ER SO PASSED IS BAD IN LAW AND AGAINST THE PRINCIPAL OF NATURAL JUSTICE. 3. THAT THE APPELLANT RESERVE THE RIGHT TO ADD OMIT , OR AMEND ANY GROUND AFTER THE COPIES M RELEVANT DOCUMENTS-PRAYED FOR ARE SUPPLIED BY THE C IT. 3. THE ASSESSEE IS ENGAGED IN BUSINESS OF MINING CO NTRACTOR AND TRANSPORT CONTRACTOR. MOST OF THE TIME ASSESSEE REMAINED ENGA GED IN SUB-CONTRACT WORKS. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FIRM FILED ITS RETURN OF INCOME ON 05.10.2010 DISCLOSING NIL INCOME. THE CASE WAS S ELECTED FOR SCRUTINY AND FIRST NOTICE U/S 143(2) WAS ISSUED, WHICH WAS DULY SERVED ON THE ASSESSEE FIRM. THE SECOND NOTICE U/S 142(1) WAS ISSUED ON 09.01.20 12. A DETAILED QUERY LETTER WAS ISSUED ON 31.01.2012. IN RESPONSE, THE FCA & AR ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND FILED REQUISITE D OCUMENTS ALONG WITH REPLY. THE ASSESSING OFFICER AFTER MAKING DETAILED OBSERVA TIONS ON EACH QUERY AND REPLY OF THE ASSESSEE TO THE SAID QUERY MADE ADDITI ON OF RS.30,320/- AND COMPLETED THE ASSESSMENT U/S 143(3) OF THE INCOME T AX ACT, 1961 ON 28.03.2012. SUBSEQUENTLY, NOTICE UNDER SECTION 148 WAS ISSUED ON 27.03.2014 AND SERVED ON THE ASSESSEE ASKING HIM TO FILE RETURN OF INCOME. IN RESPONSE TO THIS NOTICE, CA APPEARED ON BEHALF OF T HE ASSESSEE AND ASSERTED THAT THE RETURN OF INCOME FILED ORIGINALLY ON 05.10 .2010 SHOULD BE TREATED AS RETURN FILED IN RESPONSE TO THE NOTICE U/S 148. HI S REPLY WAS ADMITTED BY THE ASSESSING OFFICER AND FURTHER NOTICES U/S 143(2) AN D 142(1) WERE ALSO ISSUED AND SERVED. IN RESPONSE TO THE SAID NOTICES THE CA OF THE ASSESSEE APPEARED FROM TIME TO TIME AND SUBMITTED WRITTEN EXPLANATION S WHICH WAS TAKEN ON RECORD BY THE ASSESSING OFFICER. AFTER DETAILED DIS CUSSIONS AND OBSERVATIONS, THE ASSESSING OFFICER VIDE ORDER DATED 25.03.2015 P ASSED ASSESSMENT ORDER U/S 147 R.W.S. 148/143(3) OF THE INCOME TAX ACT, 19 61 BY MAKING ADDITION OF RS. 51,360/-. 4. SUBSEQUENTLY, PROCEEDINGS U/S 263(1) OF THE INCO ME TAX ACT, 1961 WERE 3 ITA NO. 7 7/BIL/2016 INITIATED AND NOTICE WAS ISSUED ON 18.12.2015. DURI NG THE COURSE OF THE PROCEEDINGS U/S 263 OF THE ACT, THE ASSESSEE SUBMIT TED THE REPLY. THE PRINCIPAL COMMISSIONER OF INCOME TAX AFTER MAKING OBSERVATION HELD THAT THE ASSESSMENT ORDER PASSED ON 25.03.2015 IS ERRONEOUS IN SO FAR AS IT RELATES TO 194A READ WITH SECTION 40(A)(IA) OF THE ACT AND IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 5. BEING AGGRIEVED BY THE ORDER U/S 263 OF THE ACT PASSED BY THE PR. CIT, THE ASSESSEE FILED PRESENT APPEAL BEFORE US. 6. THE LD. AR SUBMITTED THAT THE ORDER OF THE PR. C IT IS ERRONEOUS AS THE ISSUE ON WHICH THE ORDER U/S 263 OF THE ACT IS PASS ED IS MERELY A SECOND OPINION AND THERE ARE NO NEW FACTS UNEARTHED BY THE PR. CIT REGARDING THE INTEREST PAID TO ALLEGED UNSECURED LOAN ON WHICH TD S U/S 194 IS APPLICABLE AS PER THE PR. CIT. IN FACT, THE LD. AR POINTED OUT PA RA 4 OF THE ASSESSMENT ORDER DATED 25.03.2015 WHEREIN IT IS CLEARLY MENTIONED BY THE ASSESSING OFFICER THAT THE ASSESSEE FILED THE DECLARATION IN FORM 15G AND THEREFORE, THE ASSESSING OFFICER HELD THAT TDS LIABILITY DOES NOT EXIST. THE LD. AR SUBMITTED THAT THE ASSESSEE AT NO POINT OF TIME SUPPRESSED ANY FACTUAL ASPECT OF THE CASE AND ALL QUERIES WERE PROPERLY ANSWERED BY THE ASSESSEE DURI NG THE ORIGINAL ASSESSMENT AS WELL AS DURING THE RE-OPENING PROCEEDINGS AS WEL L AND ALSO PRODUCED ALL THE REQUISITE DOCUMENT IN SUPPORT OF ASSESSEES CASE. T HEREFORE, THE PR. CIT HAS INCORRECTLY APPLIED SECTION 263 OF THE ACT IN ASSES SEES CASE. 7. THE LD. DR RELIED UPON THE ORDER OF THE PR. CIT. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. FROM THE ORIGINAL ASSESSMENT O RDER U/S 143(3) DATED 28.03.2012 AS WELL AS THE ASSESSMENT ORDER U/S 147 R.W.S. 148/143(3) DATED 25.03.2015, EACH AND EVERY TIME THE ASSESSEE HAS PR OVIDED ALL THE RELEVANT DOCUMENTS IN RESPECT OF THE QUERIES RAISED BY THE A SSESSING OFFICER. WHILE 4 ITA NO. 7 7/BIL/2016 INVOKING SECTION 263 (1) OF THE INCOME TAX ACT, 196 1, THE PR. CIT HAS NOT MADE OUT THE CASE THAT THE ASSESSMENT ORDER IS PASSED WI THOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE. THERE WAS NO MATERIAL BROUGHT BY THE PR. CIT STATING THEREIN THAT THE ASSESSMENT ORD ER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM OF THE ASSE SSEE. THUS, THE PR. CIT HAS ONLY EXPRESSED THE SECOND OPINION WHICH IS NOT PERM ISSIBLE UNDER SECTION 263 OF THE ACT. REVISIONARY POWER U/S 263 OF THE ACT IS CONFERRED BY THE ACT ON THE COMMISSIONER WHEN AN ORDER IS PASSED BY THE AUTHORI TY IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ORDERS WHICH ARE PASSED WITHOUT INQUIRY OR INVESTIGATION ARE TREATED AS ERRONEOUS A ND PREJUDICIAL TO THE INTEREST OF THE REVENUE, BUT WHICH ARE PASSED AFTER INQUIRY/ INVESTIGATION ON THE QUESTION/ISSUE ARE NOT PER SE ARE NORMALLY TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. BECAUSE, THE REVIS IONARY AUTHORITY FEELS AND OPINES THAT FURTHER INQUIRY/INVESTIGATION WAS REQUI RED OR DEEPER OR FURTHER SCRUTINY SHOULD BE UNDERTAKEN, THE SAME CANNOT BE I NITIATED WITHOUT FOLLOWING THE PROPER PROVISIONS U/S 263 OF THE ACT. IN THE P RESENT CASE THE ASSESSING OFFICER HAS MADE ALL THE INQUIRIES AND AFTER VERIFY ING THE DOCUMENTS/ MATERIAL ON RECORD PASSED A REASONED ASSESSMENT ORDER. THERE FORE, THE COMMISSIONER DOES NOT HAVE ANY LOCUS STANDI TO MAKE FURTHER INQU IRY. THEREFORE, ORDER U/S 263 OF THE ACT IN PRESENT APPEAL IS NOT JUSTIFIED A ND IS SET ASIDE HEREWITH. THEREFORE, THE ORDER U/S 263 IS PASSED BY THE COMMI SSIONER OF INCOME TAX IS SET ASIDE. 9. IN RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25TH OCTOBE R, 2018 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 25/10/2018 *R.N 5 ITA NO. 7 7/BIL/2016 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT PRIVATE SECRETARY.. RAIPUR BENCH, RAIPUR. DATE OF DICTATION 22.10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 22.10.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS .10.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT .10.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .10.2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER