Appeal details
Counselvise Citation
[2017] 128 COUNSELVISE.COM (IT) 9611 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 7 month(s) 21 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-01-2017
Appeal Filed By
Assessee
Bench Allotted
A
Next Hearing Date
01-11-2016
Assessment Year
2007-2008
Appeal Filed On
21-05-2012
Judgement Text
ITA NO.820/KOL/2012-M/S. MITRA GUHA & BUILDERS (IND IA) CO. A.Y.2007-08 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE HONBLE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO.820/KOL/2012 ASSESSMENT YEAR : 2007-08 M/S. MITRA GUHA & BUILDERS (INDIA) CO.,8/2, KIRAN SHANKAR ROY ROAD, 3 RD FLOOR, FLAT NO.33,KOLKATA PAN : AAFFM2988Q V/S . COMMISSIONER OF INCOME TAX-XI, KOLKATA 10B, MIDDLETON TOW, 3 RD FLOOR, KOLKATA-700071. /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI J.M.THARD, ADVOCATE /BY RESPONDENT SHRI AVINASH MISHRA, CIT-DR /DATE OF HEARING 22-12-2016 /DATE OF PRONOUNCEMENT 11-01-2017 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL HAS BEEN FILED BY THE ASSESSEE RELATING TO ASSESSMENT YEAR 2007-08. THIS APPEAL IS AGAINST THE ORDER PASSED BY COMMISSIONER OF INCOME TAXXI, KOLKATA UNDER THE PROVISION OF 263 OF THE I NCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) VIDE HIS OR DER DATED 28.03.2012. ASSESSMENT WAS FRAMED BY D.C.I.T., CIRCLE-33, KOLKA TA U/S 115WE(3) VIDE HIS ORDER DATED 27.12.2010. THE GROUNDS RAISED BY THE A SSESSEE ARE AS UNDER : 1. THAT THE IMPUGNED ORDER HAS BEEN PASSED BY THE LD. COMMISSIONER OF INCOME TAX WITHOUT PROPER APPLICATION OF MIND, AS S UCH IT IS NOT SUSTAINABLE IN LAW AND FACTS OF THE CASE. 2. THAT THE LD. COMMISSIONER OF INCOME TAX HAS PASS ED ORDER U/S 263 OF THE I.T. ACT, 1961 WITHOUT ISSUING ANY PROPER AND L EGAL NOTICE TO THE ITA NO.820/KOL/2012-M/S. MITRA GUHA & BUILDERS (IND IA) CO. A.Y.2007-08 2 APPELLANT. FOR WANT OF LEGAL AND PROPER NOTICE THE IMPUGNED ORDER IS LIABLE TO BE QUASHED ON THIS GROUND ALONE. 3. WITHOUT PREJUDICE TO FOREGOING CONTENTION THAT T HE LD. COMMISSIONER OF INCOME TAX IS NOT JUSTIFIED IN HOLDING THAT THE ORD ER U/S 115WE(3) OF THE I.T. ACT, 1961 PASSED ON 21.12.2009 IS ERRONEOUS AN D PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE FINDING IS MISPLACED, UNTENABLE AND CONTRARY TO THE FACTS OF THE CASE, AS VARIOUS LEGAL AND FACT UAL CONTENTIONS RAISED ON BEHALF OF THE APPELLANT HAVE NOT BEEN CONSIDERED PR OPERLY, WHICH HAS RESULTED IN ERRONEOUS ORDER AND UNTENABLE CONCLUSIO N. PROVISIONS OF SECTION 115WE (3) OF THE I.T. ACT, 1961 HAVE BEEN M ISCONSTRUED AND MISAPPLIED IN THE MATTER. 4. THAT THE IMPUGNED ORDER IS WITHOUT JURISDICTION, UNTENABLE AND CONTRARY TO LAW. 2. AT THE OUTSET, THE LD. AR HAS CHALLENGED TH E PROCEEDINGS INITIATED U/S 263 OF THE ACT ON THE GROUND THAT NO PROPER AND LEG AL NOTICE WAS ISSUED BY THE COMMISSIONER OF INCOME TAX. THE LD. AR SUBMITTED TH AT NOTICE FOR INITIATION OF PROCEEDINGS U/S 263 OF THE ACT WAS NOT ISSUED BY TH E PROPER AUTHORITY. THE NOTICE WAS ISSUED AND SIGNED BY D.C.I.T., HQRS-11, KOLKATA VIDE NO.CIT- 11/KOL/263/AAFFM2988Q/11-12/1629 DATED 11 TH JULY, 2011 WHICH IS PLACED AT PAGE 1 OF THE PAPER BOOK. AS PER THE LAW THE NOTICE SHOULD HAVE BEEN ISSUED AND SIGNED BY THE LD. CIT. THE LD. AR FURTHER SUBMI TTED THAT THE NOTICE UNDER SECTION 263 OF THE ACT WAS ISSUED WITHOUT MENTIONIN G THE REASONS FOR TREATING THE ORDER OF THE AO AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE NO TICE WAS ISSUED BY D.C.I.T., HQRS-11, KOLKATA IN TERMS OF DIRECTIONS I SSUED TO HIM. IT MEANS THAT THERE WAS A PROPER AUTHORISATION MADE BY THE COMMIS SIONER OF INCOME TAX FOR ISSUING THE NOTICE U/S 263 OF THE ACT. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 3. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE P ARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE CASE BEFORE U S, THE LD. AR HAS CHALLENGED THE PROCEEDINGS U/S 263 OF THE ACT ON TWO GROUNDS. FIRSTLY THE NOTICE U/S 263 ITA NO.820/KOL/2012-M/S. MITRA GUHA & BUILDERS (IND IA) CO. A.Y.2007-08 3 OF THE ACT HAS NOT BEEN SIGNED BY THE PROPER AUTHOR ITY. IT WAS SIGNED BY D.C.I.T., HQRS.11, KOLKATA. SECONDLY, NO REASON FOR TREATING THE ORDER OF THE AO AS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INT EREST OF THE REVENUE HAS BEEN MENTIONED. NOW THE ISSUE BEFORE US ARISES FOR OUR ADJUDICATION SO AS TO WHETHER THE NOTICE ISSUED U/S 263 OF THE ACT IS VAL ID IN THE AFORESAID FACTS AND CIRCUMSTANCES. AT THIS JUNCTURE WE FIND RELEVANT TO PRODUCE THE PROVISION OF SECTION 263 OF THE ACT WHICH READS AS FOLLOWS :- 263 (1) THE PRINCIPAL COMMISSIONER OR COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT , AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER I S ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY , AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BEING HEARD AND AFTER MAKING OR CAUS ING TO BE MADE SUCH INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THEREON AS T HE CIRCUMSTANCES OF THE CASE JUSTIFY, INCLUDING AN ORDER ENHANCING OR MODIF YING THE ASSESSMENT, OR CANCELLING THE ASSESSMENT AND DIRECTING A FRESH AS SESSMENT. A BARE READING OF THE SAID PROVISION, REVEALS THAT IT IS COMMISSIONER, WHO IS TO SATISFY HIMSELF BEFORE INITIATING THE PROCEEDING S U/S 263 OF THE ACT. THE COMMISSIONER HAS BEEN DEFINED UNDER SECTION 2(16) O F THE ACT WHICH READS AS UNDER :- DEFINITIONS. 2.IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUIR ES,- [(16) COMMISSIONER MEANS A PERSON APPOINTED TO BE A COMMISSIONER OF INCOME-TAX OR A DIRECTOR OF INCOME TAX ARE THAT A PRINCIPAL COMMISSIONER OR A PRINCIPAL DIRECTOR OF INCOME TAX SUB-SECTION (1) OF SECTION 117UNDER SUB-SECTION (1) OF SECTION 117;] FROM THE FACTS OF THE CASE IN HAND, WE FIND THAT NO TICE U/S 263 OF THE ACT WAS NOT SIGNED BY THE COMMISSIONER OF INCOME TAX AS REQ UIRED UNDER THE PROVISIONS OF LAW. IN THE SIMILAR FACTS AND CIRCUMS TANCES THE HONBLE ITAT, KOLKATA BENCH IN THE CASE OF BARDHMAN CO-OPERATIVE MILK PRODUCERS UNION LIMITED VS CIT IN ITA NOS.310-311/KOL/2009 FOR A.Y.2003-04 AND 20 04-05 HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. T HE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW :- ITA NO.820/KOL/2012-M/S. MITRA GUHA & BUILDERS (IND IA) CO. A.Y.2007-08 4 9. FROM THE ABOVE DISCUSSION REGARDING THE PROVISI ON OF LAW AND THE CASE LAW IN THIS REGARD, IT IS CLEAR THAT FOR A VALID ASSUMP TION OF THE JURISDICTION U/S 263 OF THE ACT, THE NOTICE ISSUED U/S 263 OF THE ACT SHOUL D BE ISSUED BY THE LD. CIT. IN THIS CASE, IT IS UNDISPUTED THAT NOTICE WAS ISSUED BY ACIT, HQRS, BURDWAN WHO IS NOT COMPETENT TO ASSUME JURISDICTION U/S 263 OF THE ACT. HENCE, THE NOTICE WAS NOT UNDER THE SEAL AND SIGNATURE OF LD. CIT. HENCE, AS PER THE PRECEDENTS REFERRED TO ABOVE, THE ASSUMPTION OF JURISDICTION U /S 263 OF THE ACT IN THIS CASE IS NOT VALID. ACCORDINGLY, THE ORDER U/S 263 OF THE AC T PASSED IN THESE CASES ARE QUASHED. WE FURTHER FIND THAT THERE WAS NO REASON MENTIONED IN THE NOTICE ISSUED U/S 263 OF THE ACT FOR TREATING THE ORDER OF AO AS ERRO NEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN THIS CASE, WE FIND THAT IT IS A MANDATORY REQUIREMENT FOR THE LD.CIT TO INCORPORATE THE REASONS FOR TREAT ING THE ORDER OF AO AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. IN HOLDING SO, WE RELY UPON THE DECISION OF THE HONBLE MADHYA PRADESH HIG H COURT IN THE CASE OF CIT VS SATTANDAS MOHANDAS SIDHI REPORTED IN 230 ITR 591 (MP) WHEREIN IT WAS HELD AS FOLLOWS :- HELD, (I) THAT UNDER SECTION 263, NOTICE HAS TO BE SENT TO THE ASSESSEE AND THE NOTICE SHOULD CONTAIN REASONS AS TO HOW THE ORDER I S PREJUDICIAL TO THE REVENUE. ACCORDING TO SECTION 282 OF THE INCOME-TAX ACT, A N OTICE OR REQUISITION UNDER THE ACT HAS TO BE SERVED ON THE PERSON EITHER BY POST OR AS IF IT WERE A SUMMONS ISSUED BY THE COURT UNDER THE CIVIL PROCEDURE CODE, 1908. IN THE PRESENT CASE, NEITHER OF THE REQUIREMENTS WAS COMPLIED WITH BY TH E COMMISSIONER. NOTICE, BY WAY OF TELEGRAM COULD NOT BE SAID TO BE A SUBSTITUT E FOR A NOTICE BY POST. (II) THAT SO FAR AS THE SERVICE OF THE NOTICE UNDER SECTION 282 OF THE ACT IS CONCERNED, IT IS MANDATORY AND IT HAS TO BE IN THE MANNER PROVIDED UNDER THE ACT AND IN NO OTHER WAY. NOTICE UNDER SECTION 263 O F THE ACT REQUIRES THAT THE REASON FOR EXERCISING THE REVISIONAL JURISDICTION H AS TO BE MENTIONED IN THE NOTICE. THE TELEGRAM WHICH WAS SENT TO THE ASSESSE E BY THE COMMISSIONER DID NOT CONTAIN ANY REASON, EXCEPT DIRECTING HIM TO APP EAR BEFORE THAT AUTHORITY, AND THAT WAS ALSO MISCONCEIVED. (III) THAT, THEREFORE, THE ORDER PASSED BY THE COMM ISSIONER OF INCOME TAX UNDER SECTION 263 WAS INVALID FOR WANT OF DETAILED SHOW-C AUSE NOTICE UNDER HIS SEAL AND SIGNATURE. THE FACTS OF THE PRESENT CASE BEING IDENTICAL TO TH E CASE REFERRED ABOVE, WE RESPECTFULLY FOLLOWING THE SAME HOLD THAT THE ASSUM PTION OF JURISDICTION U/S 263 OF THE ACT IN THE PRESENT CASE IS NOT VALID. ACCORD INGLY ORDER U/S 263 OF THE ACT IS QUASHED AND APPEAL OF THE ASSESSEE IS ALLOWED. T HE OTHER GROUNDS OF ITA NO.820/KOL/2012-M/S. MITRA GUHA & BUILDERS (IND IA) CO. A.Y.2007-08 5 ASSESSEES APPEAL ON MERITS BECOME ACADEMIC AND INF RUCTUOUS AND WE DISMISS THE SAME AS HAVING BECOME INFRUCTUOUS. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT _11 /01/2017 SD/- SD/- ( ') ( ') (S.S.VISWANETHRA RAVI) (WASEE M AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) *RG.PS $- 11 /01/2017 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S MITRA GUHA & BUILDERS (INDIA) CO. 8/ 2, KIRAN SHANKAR ROY ROAD, 3 RD FLOOR, FLAT NO.33, KOLKATA 2. /RESPONDENT-CIT, KOLKAT-XI, 10B, MIDDLETON ROW, 3 RD FLOOR, KOLKATA-71 3. . 1 / CONCERNED CIT 4. 1- / CIT (A) 5. 4 ., ., KOLKATA / DR, ITAT, KOLKATA 6. : / GUARD FILE. BY ORDER/ , / .,
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