ASIAN CONSTRUCTION COMPANY, Ajmer V. CIT, Ajmer

ITA 794/JPR/2012

• Counselvise Citation: 79423114 RSA 2012
• Duration Of Justice: 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 05-10-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Keywords: Audit objection
• Section: 143(3); 147; 148; 263; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI B.R. JAIN AND SHRI KUL BHARAT) ITA NO. 794/JP/2012 ASSESSMENT YEAR : 2006-07 PAN: AACFSA 5540 P M/S. ASIAN CONSTRUCTION COMPANY VS. THE CIT 716/A, 3 RD STREET, BIHARI GANJ, AJMER AJMER (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.C. PARWAL DEPARTMENT BY: SHRI A.K. KHANDELWAL DATE OF HEARING: 23-08-2013 DATE OF PRONOUNCEMENT: 27-08-2013 ORDER PER KUL BHARAT, JM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE LD. LD. CIT, AJMER DATED 07-09-2012 FOR THE ASSESSMENT YEAR 2006-07 WH EREIN THE ASSESSEE HAS RAISED THE GROUNDS AS UNDER:- THAT UNDER THE FACTS OF THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN:- (1) ISSUING THE NOTICE U/S 263 OF THE I.T. ACT, 196 1 AND CONSIDERING THE AOS ORDER DATED 22-11-2011 PASSED U/S 143(3) READ WITH SECTION 147 AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. (2) SETTING ASIDE THE ISSUE RELATED TO APPLICABILIT Y OF PROVISIONS OF SECTION 40(A)(IA) OF THE I.T. ACT, 19 61 EVEN AFTER SUBMITTING ALL FACTS AND SPECIFICALLY WHEN NEEDFUL AMENDMENT TAKEN IN LAW. 2.1 BRIEFLY, THE FACTS STATED ARE THAT IN THIS CASE THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) ON 22-12-2008. SUBSEQUENTLY, THE CASE WA S REOPENED U/S 148 AND REASSESSMENT 2 WAS MADE U/S 143(3) OF THE ACT. THE SAID ORDER WAS REVISED BY THE LD. CIT VIDE IMPUGNED ORDER. FEELING AGGRIEVED BY THE REVISION OF THE ORD ER, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 2.2 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE ORDER REVISING THE ASSESSMENT ORDER IS NOT JUSTIFIED. HE SUBMITTED THAT FIRSTLY T HE ORIGINAL ASSESSMENT WAS CONCLUDED WHEREBY THE AO REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND ESTIMATED THE PROFIT. HE SUBMITTED THAT WHERE THE PROFIT IS COMPUTED ON E STIMATE BASIS THEN THERE IS NO REASON TO MAKE FURTHER ADDITION BY INVOKING THE PROVISION OF SECTION 40(A)(IA) OF THE ACT. HE SUBMITTED THAT AMENDMENT TO THE SECTION 40(A)(IA) H AS BEEN MADE ON 01-04-2010. HE HAS RELIED UPON THE DECISION OF HON'BLE CALCUTTA HIGH COURT RENDERED IN THE CASE OF CIT VS. VIRGIN CREATIONS (GA N0. 3200/2011). THIS DECISION OF HON'BLE CALCUTTA HIGH COURT HAS BEEN FOLLOWED BY VARIOUS COORDINATE BENCH OF THE HO N'BLE TRIBUNALS. HE SUBMITTED THAT EVEN OTHERWISE ALSO, NO PREJUDICE HAS BEEN CAUSED T O THE REVENUE AS TAX HAS BEEN DEDUCTED AND PAID. HE SUBMITTED THAT THOUGH THE TAX WAS DEDUCTED LATE BUT WAS PAID BEFORE DUE DATE OF FILING OF RETURN OF INCOME AND I T WAS DEPOSITED IN THE GOVT. ACCOUNT BEFORE THE DATE OF FILING OF RETURN. 2.3 ON THE OTHER HAND, THE LD. DR STRONGLY OPPOSED THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE AND SUPPORTED THE ORDER OF THE LD. CIT. HE SUBMITTED THAT TAX WAS DEDUCTED AFTER EXPIRY OF PREVIOUS YEAR I.E. ON 28-04-206. THEREFORE, THE ASSESSEE CANNOT TAKE SHELTER UNDER AMENDED PROVISIONS. 2.4 WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIALS AVAILABLE ON RECORD. IN THIS CASE THE ORIGINAL ASSESSMENT WAS MADE VIDE ORD ER DATED 22-12-2008 U/S 143(3) OF THE 3 ACT. BY FRAMING THE ASSESSMENT ORDER U/S 143(3), TH E AO REJECTED THE BOOKS OF ACCOUNT AND ESTIMATED THE PROFIT. SUBSEQUENTLY, ON THE BASI S OF THE AUDIT OBJECTION, THE CASE WAS REOPENED AND THE ORDER U/S 143(3) READ WITH SECTION 148 WAS PASSED. THIS ORDER WAS REVISED BY THE LD. CIT BY INVOKING THE PROVISION OF SECTION 263 OF THE ACT. IT IS NOT THE CASE OF THE REVENUE THAT THE TAX IS NEITHER DEDUCTE D NOR DEPOSITED INTO GOVT. ACCOUNT BUT THE CASE OF THE REVENUE IS THAT THE TAX WAS DEDUCTE D AFTER EXPIRY OF THE RELEVANT PREVIOUS YEAR AND WAS PAID TO THE GOVT. ACCOUNT. THE SETTLED PROPOSITION OF LAW IS THAT IN ORDER TO EXERCISE THE POWER U/S 263 OF THE ACT BY THE LD. CI T, TWIN CONDITIONS ARE TO BE SATISFIED. THE ORDER SHOULD BE ERRONEOUS IN SO FAR IT IS PREJU DICIAL TO THE INTEREST OF THE REVENUE. IN THE LIGHT OF THIS SETTLED PROPOSITION OF LAW, WE NE ED TO EXAMINE WHETHER IN THE PRESENT CASE, THE ORDER PASSED BY THE AO IS ERRONEOUS AND T HAT CAUSED ANY PREJUDICE TO THE INTEREST OF THE REVENUE. 2.5 THE AO WHILE PASSING AN ORDER U/S 143(3) READ W ITH SECTION 148 OF THE ACT EXPRESSED HIS OPINION THAT THE AMENDMENT IN SECTION 40(A)(IA) OF THE ACT IS RETROSPECTIVE IN NATURE. THEREFORE, NO MATERIAL DISCREPANCY IS NO TICED. THE LD. CIT IN HIS ORDER OPINED THAT THE AMENDMENT BROUGHT BY FINANCE ACT, 2010 IS NOT RETROSPECTIVE IN NATURE. HE OPINED THAT THE AMENDMENT BECAME EFFECTIVE ONLY FRO M 01-04-2010 AND HE FURTHER OBSERVED THAT IT IS NOWHERE STATED THAT AMENDMENT I S CURATIVE OR DECLARATORY IN NATURE NOR IS SUCH AS INCLINATION IS DISCERNIBLE. THE ANOTHER CONTENTION OF THE LD. AR WAS THAT HON'BLE ITAT JAIPUR BENCH IN ITA NO. 48/JP/2011 DA TED 5-08-2011 FOR THE ASSESSMENT YEAR 2007-08 IN ASSESSEE'S OWN CASE HELD THAT AMEN DMENT TO SECTION 40(A)(IA) OF THE ACT IS RETROSPECTIVE IN NATURE. THE LD. CIT DID NOT ACC EPT THIS CONTENTION ON THE BASIS THAT SINCE THE AFORESAID DECISION HAS NOT BEEN ACCEPTED BY THE DEPARTMENT, THEREFORE, THE 4 APPEAL IS PENDING BEFORE THE HON'BLE HIGH COURT. AS SUCH, THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE WAS REJECTED. THE UNDISPUT ED FACT REMAINS THAT CONTENTION OF THE ASSESSEE WAS REJECTED ON THE BASIS THAT THE AMENDME NT BROUGHT VIDE FINANCE ACT, 2010 WAS NOT RETROSPECTIVE IN NATURE. THE RELIANCE IS PL ACED BY THE LD. COUNSEL FOR THE ASSESSEE ON THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN T HE CASE OF CIT VS. VIRGIN CREATIONS (SUPRA) AND OTHER DECISIONS OF HON'BLE COORDINATE BENCHES RENDERED IN THE CASES OF ALPHA PROJECTS SOCIETY (P) LTD. VS. DCIT (ITA NO. 2 869/AHD/2011 DATED 23-03-2012 - AHEMDABAD) AND ITO VS. BHUMI CONSTRUCTIONS (ITA NO. 503/RJT/2012 DATED 7-12-2012 RAJKOT). THE REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD AGAINST THE ORDER OF HON'BLE CALCUTTA HIGH COURT THAT ANY SPECIAL LEAVE PETITION HAS BEEN FILED BY THE DEPARTMENT OR HON'BLE APEX COURT HAS STAYED THE OPE RATION OF THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. VIRGIN C REATIONS (SUPRA). WE FIND THAT THERE IS NOTHING ON RECORD TO SUGGEST THAT THE DECISIONS WER E AVAILABLE AT THE TIME OF FRAMING ASSESSMENT. THEREFORE, NO FAULT CAN BE FOUND IN THE ORDER OF LD. CIT. HOWEVER, THE LD. CIT HAS GIVEN THE DIRECTION TO THE AO TO FRAME THE ASSE SSMENT DEONOV ON THE BASIS OF AMENDED PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. AFTER CONSIDERING THE SUBMISSIONS AND ALL THE ASPECTS OF THE MATTER, WE FEEL THAT THI S DIRECTION OF THE LD. CIT NEEDS TO BE MODIFIED, IN VIEW OF THE DECISIONS RELIED UPON BY T HE LD. AR OF THE ASSESSEE. WE THEREFORE, MODIFY THE DIRECTION OF THE LD. CIT TO T HAT EXTENT THAT THE AO WOULD CONSIDER THE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR TH E ASSESSEE BEFORE DECIDING THE ISSUE AFRESH. THUS THE APPEAL OF THE ASSESSEE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES 5 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27-08-2013 . SD/- SD/- (B.R. JAIN) (KUL BHARAT) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 27 TH AUG, 2013 *MISHRA COPY FORWARDED TO:- BY ORDER 1. M/S. ASIAN CONSTRUCTION COMPANY, AJMER 2. THE CIT, AJMER 3. THE LD. CIT 4. THE LD. DR 5. THE GUARD FILE (IT NO.794/JP/12 ) A.R. ITAT: JAIPUR 6 7