M/s. Chandni Commercials (P) Ltd., Kolkata V. ITO, Ward 7(1), Kolkata, Kolkata

ITA 899/KOL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1104 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 28-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G HANGSHING
• Assessee Lawyers: MANOJ KATARUKA
• Keywords: Revision of order; Principle of natural justice
• Section: 143(3); 133(6); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SHRI M.BALAGANESH, AM & SHRI S.S. VISWANETHRA RAVI, JM] I.T.A NO. 899/KOL/201 7 ASSESSMENT YEAR : 2012-1 3 M/S CHANDNI COMMERCIAL P LTD. -VS- ITO, WARD-7(1), KOLKATA [PAN: AAECA 1544 N] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI MANOJ KATARUK A, ADVOCATE FOR THE RESPONDENT : SHRI G. HANGSHING, CIT DATE OF HEARING : 16.11.2017 DATE OF PRONOUNCEMENT : 16.11.2017 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE O RDER OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX(APPEALS)-3, KOLKATA [IN SHORT THE LD CIT(A)] IN MEMO NO. PR. CIT-3/KOL/ITO,W-7(1)/U/S 263/175/16-17 DATE D 15.03.2017 PASSED U/S 263 OF THE ACT AGAINST THE ORDER PASSED BY THE ITO, WARD- 7(1), KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (I N SHORT THE ACT) DATED 23.03.2015 FOR THE ASSESSMENT YEAR 2012-13. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS A S TO WHETHER THE LD. CIT WAS JUSTIFIED IN INVOKING REVISIONARY JURISDICTION U/S 263 OF THE ACT, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2 ITA NO.899/KOL/2017 CHANDNI COMMERCIALS LTD. A.YR.2012-13 2 3. THE BRIEF FACTS OF THIS APPEAL IS THAT THE ASSES SEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF TRADING OF COTTON KNITTE D FABRICS AND IRON & STEEL AND HAD FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 ON 20.09.2012 DECLARING TOTAL INCOME OF RS. NIL. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 23.03.2015 REDUCING THE LOSS OF RS. 9,53,26,082/- TO RS. 9,52, 25,880/-. THIS ASSESSMENT WAS SOUGHT TO BE REVISED BY THE LD. CIT U/S 263 OF THE ACT BY TREATING THE SAME AS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REV ENUE. A SHOW CAUSE NOTICE WAS ISSUED BY THE LD. CIT ON THE GROUND THAT THE ASSESSEE HAD SHO WN TOTAL PURCHASE OF RS. 93,36,54,725/- FROM M/S CORAL ENVIRONMENT PVT. LTD. (IN SHORT CEPL) WHEREAS CEPL HAD SHOWN SALES OF RS. 2,42,90,500/- IN ITS BA LANCE SHEET AND PROFIT AND LOSS ACCOUNT. THIS RESULTED IN EXCESS CLAIM OF PURCHASES BY THE ASSESSEE. IN THE OPINION OF LD. CIT, THIS ASPECT HAS NOT BEEN VERIFIED/ENQUIRED BY THE LD. AO. THEREBY MAKING HIS ORDER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO T HE INTEREST OF THE REVENUE. THE ASSESSEE WAS ASKED TO APPEAR BEFORE THE LD. CIT ON 03.03.201 7 . THIS SHOW CAUSE NOTICE DATED 21.02.2017 WAS SERVED ON THE ASSESSEE ONLY ON 06.03 .2017. ON 06.03.2017 THE ASSESSEE SOUGHT AN ADJOURNMENT TO 15.03.2017. THE LD. AR STA TED BEFORE US THAT ON 15.03.2017 THE ASSESSEE TOOK AN ADJOURNMENT TO 24.03.2017 AND DETAILED REPLY WAS FILED BY THE ASSESSEE BEFORE THE LD. CIT ON 24.03.2017. THE REPL Y LETTER FILED BEFORE THE LD. CIT ON 24.03.2017 IS PLACED ON RECORD BEFORE US. MEANWHILE , THE LD. CIT PROCEEDED TO PASS THE ORDER U/S 263 OF THE ACT ON 15.03.2017 ON THE G ROUND THAT THE LD. AO HAD NOT MADE PROPER ENQUIRIES WITH REGARD TO PURCHASES MADE BY THE ASSESSEE FROM CEPL AND HENCE, TREATED THE ORDER OF THE LD. AO AS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. AGGRIEVED, THE ASSESSEE IS IN APPEA L BEFORE US ON THE FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE ACTION OF THE LD. CIT TO PASS AND ORDER U/S 263 BY TREATING THE ORDER PASSED BY THE ASSESSING OFFICER AS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE IS INCORRECT AND BAD IN LAW. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE ACTION OF THE LD. CIT TO PASS AN ORDER U/S 263 WITHOUT AFFORDING REAS ONABLE OPPORTUNITY OF BEING 3 ITA NO.899/KOL/2017 CHANDNI COMMERCIALS LTD. A.YR.2012-13 3 HEARD IS IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND THEREFORE THE ORDER IS BAD IN LAW. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE NOTICE ISSUED U/S 263 BY THE LD. CIT IS ERRONEOUS AND BAD IN LAW. 4. THAT THE ORDER OF THE LD. CIT IS ARBITRARY, EXCE SSIVE AND ILLEGAL. 5. THAT THE ORDER OF THE LD. CIT(A) IS BAD IN LAW. 6. THAT THE ABOVE GROUNDS OF APPEAL SHALL BE ARGUED IN DETAIL AT THE TIME OF HEARING AND THE APPELLANT CRAVES LEAVE TO SUBMIT, A DD, ALTER, MODIFY, AMEND ANY GROUNDS OF APPEAL OR SUBMIT ANY ADDITIONAL GROUNDS OF APPEAL AT OR BEFORE THE TIME OF HEARING. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THA T THE LD. AR HAS PLACED FOLLOWING DOCUMENTS IN THE PAPER BOOK. SL. NO. PARTICULARS PAGE NOS. 01. COPY OF THE NOTICE U/S 263(1) OF THE ACT DATED 21.02.2017 1-2 02. COPY OF THE SPEED POST TRACKING CONSIGNMENT SHE ET SHOWING DELIVERY OF THE NOTICE ON 06.03.2017. 3 03. COPY OF THE ADJOURNMENT LETTER FILED BEFORE THE LD. CIT DATED 09.03.2017 4 04. COPY OF THE REPLY TO THE SHOW CAUSE NOTICE U/S 263(1) ALONG WITH ALL ANNEXURES FILED BEFORE THE LD. CIT ON 24.03.2017 5-17 05. COPY OF THE ASSESSMENT ORDER U/S 143(3) ALONG W ITH THE ENCLOSURES. 18- 24 FROM THE AFORESAID DETAILS OF THE PAPER BOOK WE FIN D THAT THE ASSESSEE HAD PURCHASED 1965465 KGS. OF COTTON KNITTED FABRICS FROM CEPL, 9 , EZRA ROAD, TOP FLOOR, KOLKATA- 700001 (PAN: AABCC 2837 P) FOR RS. 93,36,54,725/-. WE ALSO FIND THAT THE ENTIRE 1965465 KGS. OF GOODS HAVE BEEN SOLD BY THE ASSESS EE BEFORE THE END OF THE PREVIOUS 4 ITA NO.899/KOL/2017 CHANDNI COMMERCIALS LTD. A.YR.2012-13 4 YEAR AND NO STOCK WAS LYING WITH THE ASSESSEE THERE ON OUT OF THE SAID PURCHASE. THE ASSESSEE HAS ALSO FURNISHED THE SUMMARY OF PURCHASE S FOR THE PERIOD ENDING ON 31.03.2012 WHEREIN VAT HAS BEEN DULY SUFFERED FOR T HE ENTIRE PURCHASES MADE DURING THE YEAR. WE FIND FROM PAGE 8 OF THE PAPER BOOK FIL ED BY THE ASSESSEE THAT THE LD. AO HAD SOUGHT FOR THE ENTIRE DETAILS OF PURCHASE AND S ALES MADE BY THE ASSESSEE WITH FULL NAMES AND ADDRESS OF THE SUPPLIERS AND CUSTOMERS TO GETHER WITH THE QUANTITY OF ITEMS PURCHASED AND SOLD ALONG WITH DETAILS OF SALES TAX SUFFERED ON SUCH PURCHASES AND SALES, DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE AR OF THE ASSESSEE VIDE HIS REPLY DATED 12.02.2015 FURNISHED THE SAME BEFORE THE LD. AO. THIS INFORMATION WAS SOUGHT TO BE CROSS-VERIFIED BY THE ASSESSEE BY ISSUING N OTICE U/S 133(6) OF THE ACT FROM M/S CEPL VIDE LETTER DATED 16.02.2015 BY THE LD.AO WHIC H IS ENCLOSED IN THE PAGE 15 OF THE PAPER BOOK REFERRED TO SUPRA. THE SAID SUPPLIER M/S CEPL DULY RESPONDED TO THE INFORMATION SOUGHT BY THE LD. AO U/S 133(6) VIDE IT S LETTER DATED 25.02.2015 WHICH WAS FILED IN TAPAL ON 02.03.2015. THIS LETTER DATED 25. 02.2015 OF CEPL IS ENCLOSED IN PAGE 16 OF THE PAPER BOOK REFERRED SUPRA AND ALONG WITH THIS LETTER M/S CEPL HAD DULY CONFIRMED THE FACT THAT IT HAD SOLD 1965465 KGS. O F COTTON KNITTED FABRICS AMOUNTING TO RS. 93,36,54,725/- AND HAD ALSO GIVEN THE LEDGER AC COUNT OF THE ASSESSEE AS APPEARING IN THE BOOKS OF CEPL FOR THE PERIOD OF 01.04.2011 TO 3 1.03.2012 TOGETHER WITH ITS ENTIRE INCOME TAX ASSESSMENT PARTICULARS. HENCE, IT COULD BE CONCLUDED THAT THE LD. AO HAD DULY VERIFIED ALL THESE FACTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF. HOWEVER, WE FIND THAT THESE DETAILS WERE FURNISHED BY THE ASSESSEE BEFORE THE LD. CIT IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED FOR REV ISING THE ASSESSMENT ONLY ON 24.03.2017, ON WHICH DATE THE ORDER U/S 263 WAS AL READY PASSED BY THE LD. CIT. HENCE, THE LD. CIT COULD NOT GET THE BENEFIT OF ALL THESE INFORMATION AND DETAILS WHILE PASSING THE REVISION ORDER U/S 263 OF THE ACT ON 15 .03.2017. SINCE, WE FIND THAT THE INFORMATION HAS BEEN GATHERED BY THE LD. AO U/S 133 (6) OF THE ACT FROM CEPL DURING THE ASSESSMENT PROCEEDINGS ITSELF, IT SHOULD DEFINI TELY FORM PART OF THE RECORDS AT THE TIME OF EXAMINATION BY THE LD. CIT DURING THE REVIS ION PROCEEDINGS U/S 23 OF THE ACT. 5 ITA NO.899/KOL/2017 CHANDNI COMMERCIALS LTD. A.YR.2012-13 5 BUT WE FIND THAT NO FINDING HAS BEEN GIVEN BY THE L D. CIT IN THE ORDER PASSED U/S 263 OF THE ACT IN THIS REGARD. HENCE, WE DEEM IT FIT AN D APPROPRIATE IN THE INTEREST OF JUSTICE AND FAIR PLAY, TO REMAND THIS APPEAL TO THE FILE O F THE LD. CIT WITH A DIRECTION TO CONSIDER THE DETAILS AVAILABLE IN THE PAPER BOOK AN D DECIDE WHETHER IT IS NECESSARY TO REVISE THE ASSESSMENT ORDER U/S 263 OF THE ACT OR N OT. THE ASSESSEE IS ALSO AT LIBERTY TO FURNISH FURTHER EVIDENCES IN SUPPORT OF ITS CONTENT IONS. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 16.11.2017 SD/- SD/- [S.S. VISWANETHRA RAVI] [ M.BALAGA NESH ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 16.11.2017 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. M/S CHANDNI COMMERCIALS (P) LTD., (ADHIRATH COMM ERCIALS PVT. LTD. SINCE MERGED) SUBHAM APARTMENT, 6 TH FLOOR, 1, SAROJINI NAIDU SARANI, KOLKATA-700017. 2. ITO, WARD-7(1), AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-69. 3..C.I.T.- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S