Sinhotia Metals & Minerals Private Limited, Durgapur V. PCIT, Durgapur, Durgapur

ITA 889/KOL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7571 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 28-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SRIHARI
• Assessee Lawyers: S M SURANA
• Keywords: Revision of order; Opportunity of being heard; Assessment record
• Section: 263; 63

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI A.T.VARKEY, JM &DR. A.L.SAINI, AM ./ITA NO.889/KOL/2017 ( / ASSESSMENT YEAR: 2012-13 ) SINHOTIA METALS & MINERALS PVT. LTD. C/O, CA AMIT KUMAR, 4/18 SUHATTA, CITY CENTRE, DURGAPUR-713216. VS. PCIT, DURGAPUR AAYAKAR BHAWAN ANNEXE, CITY CENTRE, DURGAPUR-713216 ./ ./PAN/GIR NO.: AAICS 1443 C (ASSESSEE) .. (REVENUE) ASSESSEE BY :SHRI S.M. SURANA, ADVOCATE RESPONDENT BY : SHRI P.K. SRIHARI, CIT DR / DATE OF HEARING : 19/12/2018 /DATE OF PRONOUNCEMENT : 16 /01/2019 / O R D E R PER DR. A. L. SAINI: 1. THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTA INING TO ASSESSMENT YEAR 2012- 13, IS DIRECTED AGAINST AN ORDER PASSED BY THE LEAR NED PRINCIPAL COMMISSIONER OF INCOME TAX -DURGAPUR (IN SHORT THE LD. PCIT], PASSE D U/S 263 OF THE ACT DATED 20.02.2017. 2. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE AS SESSEE DREW OUR ATTENTION TO THE LETTER DATED 18.08.2016, WHICH IS REPRODUCED AS UN DER: SINHOTIA METALS & MINERALS PVT. LTD. ITA NO.889/KOL/2017 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 2 22 2 NO. JT.CIT/R-2/DGP./REVISION/ 2016-17/571 DATED 18.08.2016 TO 1. THE ACIT, CIRCLE-2, DURGAPUR 2. THE ITO, WARD-2(1), DURGAPUR 3. THE ITO, WARD-2(2), DURGAPUR AAYAKAR BHAWAN, CITY CENTRE, DURGAPUR-713216 SUB: REVISIONARY ACTION U/S 263 OF THE I.T. ACT, 1 961- MATTER REGARDING THE HONBLE PCIT, DURGAPUR HAS DIRECTED THE UNDERSI GNED TO RESUBMIT THE PROPOSAL ENSURING THE CONDITIONS LAID DOWN IN EXPLA NATION 2 OF PROVISION OF SECTION 263 OF THE INCOME TAX ACT, 1961. ACCORDINGLY, YOU ARE DIRECTED TO RESUBMIT PROPOSAL IN THE CASE(S) OF YOUR JURISDICTION IN LIGHT OF EXPLANATION 2 OF SECTION 2 63 WITHIN 5 DAYS. ENCLO: AS STATED ABOVE. AJAY KR. KESHARI JCIT/R-2, DURGAPUR A BARE PERUSAL OF THE ABOVE SAID LETTER, INDICATES THE PCIT, DURGAPUR, HAD DIRECTED JCIT TO RESUBMIT THE PROPOSAL ENSURING THE CONDITIO NS LAID DOWN IN EXPLANATION 2 OF PROVISION OF SECTION 263 OF THE ACT. THE EXPLANA TION 2 OF SECTION 263 OF THE ACT IS GIVEN BELOW FOR READY REFERENCE. EXPLANATION 2.FOR THE PURPOSES OF THIS SECTION, I T IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEM ED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, SINHOTIA METALS & MINERALS PVT. LTD. ITA NO.889/KOL/2017 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 3 33 3 (A) THE ORDER IS PASSED WITHOUT MAKING INQUIRI ES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WI THOUT INQUIRING INTO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WIT H ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURISD ICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF THE ASSESSEE OR ANY OTHER PERS ON.. THE LD. COUNSEL ASSAILING THE DECISION OF LD. PCIT CONTENDED THAT THE REVISIONAL JURISDICTION CAN BE EXERCISED ONLY WHEN THE LD. PCI T HIMSELF CONSIDERS AFTER CALLING AND EXAMINING THE ASSESSMENT RECORDS HIMSEL F AND CONSIDERS THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PR EJUDICIAL TO THE INTEREST OF THE REVENUE AND THAT POWER VESTED TO HIM CANNOT BE DELE GATED TO JCIT/A.O. IN ORDER TO BUTTRESS THIS CONTENTION THE LD. COUNSEL REFERRED T HE DECISION OF THIS CO-ORDINATE BENCH IN THE CASE OF M/S RUPAYAN UDYOG IN I.T.A. NO . 1073/KOL/2012, FOR ASSESSMENT YEAR 2005-06 ORDER DATED 28.10.2018 WHER EIN IT WAS HELD AS FOLLOWS : A PERUSAL OF SEC. 263 OF THE ACT READS AS UNDER: REVISION OF ORDERS PREJUDICIAL TO REVENUE. 263(1) THE PRINCIPAL COMMISSIONER OR COMMISSIONER MAY CALL FOR AND EXAMI NE THE RECORD OF ANY PROCEEDING UNDER THIS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER IS ERRONEOUS IN S O FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, HE MAY, AFTER GIVI NG THE ASSESSEE AN OPPORTUNITY OF BEING HEARD. SO FROM A BARE READING OF SEC. 263 OF THE ACT REVEA LS THAT THE COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDING U NDER THE ACT AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE AO I S ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE MAY AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE PASS ORDERS AS PRESCRIBED UND ER THE ACT. SO, THE POWER VESTED IN THE CIT IS THAT OF REVISIONAL JURISDICTIO N TO INTERFERE WITH THE ORDER OF AO, IF IT IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE REVENUE AND, THEREFORE, THE POWER TO EXERCISE THE REVISIONAL JURISDICTION IS VE STED ONLY WITH THE PR. COMMISSIONER/COMMISSIONER IF HE CONSIDERS THE ORDER OF THE AO TO BE ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REV ENUE. THEREFORE, THIS POWER IS VESTED WITH THE PR. CIT/CIT TO EXERCISE REVISIONAL JURISDICTION IS ONLY WHEN HE CONSIDERS THAT THE ORDER PASSED BY THE AO IS ERRONE OUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THAT POWER CANNOT B E USURPED BY THE AO TO TRIGGER THE REVISIONAL JURISDICTION VESTED WITH THE CIT AS PER THE SCHEME OF THE ACT WHICH GIVES VARIOUS POWER TO VARIOUS AUTHORITIES TO EXERC ISE AND THEY HAVE TO EXERCISE POWERS IN THEIR RESPECTIVE GIVEN SPHERE WHICH IS CL EARLY EAR-MARKED AND SPELLED SINHOTIA METALS & MINERALS PVT. LTD. ITA NO.889/KOL/2017 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 4 44 4 OUT BY THE STATUTE. HERE, WE NOTE THAT THE AO WHO I S EMPOWERED BY THE ACT TO ASSESS A SUBJECT WITHIN A PRESCRIBED TIME PERIOD HA S FIRST ASSESSED THE ASSESSEE AND LATER AFTER PASSAGE OF TIME HAS TAKEN UP A PROP OSAL WITH THE CIT TO EXERCISE HIS REVISIONAL JURISDICTION CANNOT BE COUNTENANCED FOR THE SIMPLE REASON THAT WHEN IN THE FIRST PLACE THE AO NOTICING THAT HE FAI LED TO PROPERLY ENQUIRE BEFORE ASSESSING THE ASSESSEE WITHIN THE TIME LIMIT PRESCR IBED BY THE STATUTE CANNOT BE ALLOWED TO GET FRESH INNINGS TO REASSESS BECAUSE IT WAS HIS DUTY TO ENQUIRE PROPERLY WITHIN THE TIME LIMIT PRESCRIBED BY THE ST ATUTE. THEREFORE, THE VERY INVOCATION OF REVISIONAL JURISDICTION ON THE PROPOS AL OF THE AO ITSELF IS BAD IN LAW AND FOR COMING TO SUCH A DECISION WE RELY ON THE DE CISION OF THE TRIBUNAL IN THE CASE OF SHANTAI EXIM LTD. VS. CIT (2017) 88 TAXMANN .COM 361 (AHD. TRIB.) AND THE DECISION OF ITAT, MUMBAI BENCH IN THE CASE OF A SHOK KUMAR SHIVPURI VS. CIT FOR AY 2008-09 DATED 07.11.2014. THEREFORE, WE FIND MERIT IN THE CONTENTION OF THE LD. AR AND WE QUASH THE VERY USURPATION OF JURI SDICTION U/S. 263 OF THE ACT BY THE CIT. THEREFORE, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED. SINCE THE DEPARTMENT COULD NOT CONTROVERT THE CONTE NTS OF THE LETTER OF THE JCIT(SUPRA) DATED 18.08.2016 WHICH CLEARLY BRINGS OUT THAT LD. PCIT HAS CALLED FOR PROPOSAL FROM JCIT/ASSESSING OFFICER TO EXERCIS E THE JURISDICTION U/S 263. IT MEANS THE LD. PCIT HAS NOT EXERCISED THE JURISDICTI ON U/S 263 HIMSELF BUT HE EXERCISED THE JURISDICTION AT THE INSTANCE OF THE A .O. / JCIT WHICH IS AGAINST THE PROVISION OF LAW. THE POWER OF REVISIONAL JURISDICT ION IS VESTED ONLY WITH THE LD. PCIT. THEREFORE WE NOTE THAT THE EXERCISE OF THE JU RISDICTION U/S 263 OF THE ACT ITSELF IS NOT IN ACCORDANCE WITH LAW HENCE WE CANCE L THE ORDER PASSED BY LD. PCIT U/S 263 OF THE ACT. 3. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 16.01.2 019. SD/- ( A.T.VARKEY ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 16/01/2019 ( SB, SR.PS ) SINHOTIA METALS & MINERALS PVT. LTD. ITA NO.889/KOL/2017 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 5 55 5 / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. /THE APPELLANT SINHOTIA METALS & MINERALS PVT. LT D. 2. ! / THE RESPONDENT PCIT, DURGAPUR 3. ' ( ) / THE CIT(A), 4. ' / CIT 5. #$% &&'( , '( , / DR, ITAT, KOLKATA 6. %)*+ / GUARD FILE. !# &