SPR Infrastructure (I) Ltd., Hyd, Hyderabad V. ACIT, Circle-3(2), Hyd, Hyderabad

ITA 926/HYD/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6607 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-04-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 08-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SITRAM
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Difference of opinion; Change of opinion
• Section: 143(3); 234B; 263; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NOS. 925 & 926/HYD/2015 ASSESSMENT YEARS: 2007-08 & 2008-09 SPR INFRASTRUCTURE (I) LTD., HYDERABAD. PAN AACCD 4913 G VS. ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 3(2), HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P. MURALI MOHAN RAO REVENUE BY : SHRI M. SITRAM DATE OF HEARING 21-04-2016 DATE OF PRONOUNCEMENT 29-04-2016 O R D E R PER S. RIFAUR RAHMAN, A.M.: BOTH THESE APPEALS ARE PREFERRED BY THE ASSESSEE A GAINST THE ORDERS OF THE LEARNED PR. COMMISSIONER OF INCOME-TA X 3, HYDERABAD FOR AY 2007-08 AND 2008-09. SINCE IDENTICAL ISSUES ARE INVOLVED IN BOTH THESE APPEALS, THEY WERE CLUBBED AND HEARD TOG ETHER AND, THEREFORE, WE DISPOSE OF THESE APPEALS BY WAY OF TH IS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE FACTS ARE EXTRACTED FROM AY 2007-08 THAT TH E ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE AY 2007- 08 ON 02/11/2007, DECLARING TOTAL INCOME OF RS. 6,48,27,000/-. SUBSEQ UENTLY, THE CASE WAS SELECTED FOR SCRUTINY. THE AO COMPLETED THE ASS ESSMENT U/S 143(3) R.W.S. 147 BY DETERMINING THE INCOME AT RS. 99,65,65,250/-. 2 ITA NOS. 925 & 926/HYD/2015 M/S SPR INFRASTRUCTURE (I) LTD. 3. THEREAFTER, THE PR. CIT CALLED FOR THE ASSESSMEN T RECORDS OF THE ASSESSEE AND ON VERIFICATIONS OF THE SAME, HE HELD THAT THE AO WHILE COMPLETING THE ASSESSMENT HAS NOT EXAMINED THE FOLL OWING ISSUES: (I) AS PER THE PROVISIONS OF SECTION 234B(1) R.W.E XPLANATION 2, THE INTEREST HAS TO BE LEVIED IN THE FOLLOWING MANN ER. (A) INTEREST TO BE LEVIED IN CASE OF DETERMINATION OF TOTAL INCOME U/S 143(1) AND (B) IN CASE OF REGULAR ASSESSMENT, THE INTEREST HAS TO BE LEVIED ON TOTAL INCOME ASSESSED AND EXPLANATION 2 CLEARLY SPEAKS THAT THE ASSESSMENT MADE FOR THE FIRST TIME U/S 147 (OR SECTION 153A) IS A REGULAR ASSESSMENT. IN THE INSTANT CASE, THE R EGULAR ASSESSMENT WAS COMPLETED FOR THE FIRST TIME U/S 147 AFTER 143(1). HENCE, INTEREST U/S 234B(1) WAS LEVIABLE FROM 01.04 .2007 TO 21.03.2013 I.E. UPTO THE DATE OF REGULAR ASSESSMENT . THE INTEREST U/S 234B HAS TO BE LEVIED FOR 72 MONTH S (RS.22,38,29,794/-) AS AGAINST 49 MONTHS (RS.15,36, 75,315/-). THE SHORT DEMAND OF INTEREST IS RS. 7,01,54,469/-. THIS WAS RELIED ON THE DECISION IN THE CASE OF MIS TEXTILE DYE- CHEM CORPORATION VS. THE CIT, CHENNAI (2013 TIOL-48 7 -HC- MAD-IT). 3.1 REFERRING THE ABOVE, THE PR. CIT HELD THAT THE ASSESSING OFFICER PROCEEDED TO COMPLETE THE ASSESSMENT WITHOU T PROPER EXAMINATION OF THE ABOVE FACTS, THEREBY RESULTING I N AN ASSESSMENT THAT IS NOT ONLY ERRONEOUS BUT PREJUDICIAL TO THE I NTEREST OF REVENUE AND THE PR. CIT IS EMPOWERED TO REVISE SUCH ASSESSM ENT BY INVOKING PROVISIONS OF SEC.263. ACCORDINGLY, A NOTICE U/S 26 3 DATED 18.02.2015 WAS ISSUED TO THE ASSESSEE, POSTING THE CASE FOR HE ARING ON 22.02.2015 TO SHOW CAUSE AS TO WHY THE ASSESSMENT S HOULD NOT BE REVISED OR SET ASIDE. 3.2. IN RESPONSE TO THE SHOW CAUSE NOTICE U/S 263, NONE APPEARED. HENCE, FINAL OPPORTUNITY AFFORDED TO THE ASSESSEE V IDE LETTER DATED 18.03.2015 AND POSTED THE CASE FOR HEARING ON 25.03 .2015. THE ASSESSEE'S AUTHORIZED REPRESENTATIVE APPEARED ON 26 .03.2015 AND FILED A LETTER ENCLOSING COPY OF HON'BLE TRIBUNAL C OMBINED ORDER FOR 3 ITA NOS. 925 & 926/HYD/2015 M/S SPR INFRASTRUCTURE (I) LTD. THE AYS 2007-08 AND 2008-09 THAT THE ASSESSMENT WAS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER WITH CERTAIN DIRE CTIONS. THE SUBMISSIONS MADE BY THE AUTHORIZED REPRESENTATIVE A ND THE ENCLOSED TRIBUNAL ORDER ARE CONSIDERED. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE PR. CIT HELD AS FOLLOWS: 6. HAVING TAKEN UP THE CASE FOR SCRUTINY IT IS TH E OBLIGATORY ON THE PART OF THE ASSESSING OFFICER TO EXAMINE ALL THE ISSUES AND COMPLETE THE ASSESSMENT. THE ASSESSING OFFICER HAS NOT VERIFIED PROPERLY THE DETAILS OF THE INTEREST U/S 234B(1) WH ICH HAS TO BE LEVIABLE FROM 01.04.2007 TO 21.03.2013 I.E. UP TO T HE DATE OF REGULAR ASSESSMENT. THE INTEREST U/S 234B WAS LEVIE D FOR 49 MONTHS AT RS.15,36,75,315/- INSTEAD OF 72 MONTHS AT RS.22,38,29,784/-. THE DIFFERENCE OF 23 MONTHS AT RS.7,01,54,469/- SHOULD BE LEVIED. HENCE, THE ASSES SING OFFICER IS DIRECTED TO EXAMINE AND VERIFY THE DETAILS AS PE R LAW AND THE DIFFERENCE SHOULD BE ADDED. 7. THEREFORE, THE ASSESSING OFFICER FAILED IN HIS BASIC DUTY TO EXAMINE THESE ASPECTS WHILE COMPLETING SCRUTINY ASSESSMENT. THE CASE HAS BEEN SELECTED FOR SCRUTINY REQUIRING T HE ASSESSING OFFICER TO EXAMINE THE VARIOUS ASPECTS. THE VERY PU RPOSE OF WHICH HAS BEEN DEFEATED BY NOT EXAMINING THE ABOVE ISSUED. HENCE THERE IS ERROR CREPT IN THE ASSESSMENT ORDER FRAMED BY THE ASSESSING OFFICER WHICH IS NOT ONLY PREJUDICIAL TO THE INTEREST OF THE REVENUE AND DESERVES TO BE SET ASIDE AND THE PR.COMMISSIONER OF INCOME TAX IS EMPOWERED TO REVIS E SUCH ASSESSMENT BY INVOKING PROVISIONS OF SECTION 263. 8. THE ASSESSING OFFICER IS DIRECTED TO CHARGE CORR ECT INTEREST U/S 234B WHILE PASSING AN ORDER CONSEQUENT TO THE ITAT ORDER. ASSESSING OFFICER TO APPLY HIS MIND ON THE PERIOD F OR WHICH INTEREST U/S 234B TO BE LEVIED. AN OPPORTUNITY TO B E PROVIDED TO THE ASSESSEE BEFORE COMPLETING THE ORDER. 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US R AISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. PR. CIT - 3 ERRED BOTH IN LAW AND ON FAC TS IN PASSING THE ORDER U/S 263 DATED 26.03.2015. 4 ITA NOS. 925 & 926/HYD/2015 M/S SPR INFRASTRUCTURE (I) LTD. 2. THE LD. PR. CIT - 3 HAS ERRED IN DIRECTING THE A O TO CHARGE INTEREST OF RS. 7,01,54,469/- U/S 234B OF THE ACT W HICH IS NOT CORRECT AND UNJUSTIFIED. 3. THE LD. PR. CIT - 3, ERRED IN PASSING THE ORDER U/S.263 BY FORMING MERE CHANGE OF OPINION AND WITHOUT CONSIDER ING THE FACT THAT THE ORIGINAL ASSESSMENT HAD BEEN COMPLETED U/S 144 R.W.S 143(3) R.W.S 147 OF THE IT ACT, 1961 AFTER CAREFUL VERIFICATION OF ALL THE INFORMATION FURNISHED. 4. THE LD. PR. CIT - 3, OUGHT TO HAVE APPRECIATED T HE SUBMISSIONS OF THE ASSESSEE BY FOLLOWING THE JUDGME NT OF HONORABLE SUPREME COURT OF INDIA IN THE CASE OF MAL ABAR INDUSTRIAL CO. LTD. V. COMMISSIONER OF INCOME TAX ( 2000)-243- ITR -0083 -(SC) 5. THE LD. PR. CIT - 3 OUGHT TO HAVE CONSIDERED THE FACT THAT FOR THE YEAR UNDER CONSIDERATION THE HON'BLE ITAT HAS S ET ASIDE THE CASE TO THE AO TO RECONSIDER THE RETURNED INCOME OF THE ASSESSEE COMPANY. 6. THE LD. PR. CIT - 3 OUGHT TO HAVE CONSIDERED TH E FACT THAT ONCE THE ASSESSMENT ORDER IS SET ASIDE BY THE ITAT, NO ORDER SURVIVES FOR THE INVOCATION OF PROVISIONS OF SECTIO N 263 OF THE ACT. 7. THE LD. PR. CIT - 3 OUGHT TO HAVE CONSIDERED THE FACT THAT THE ISSUE OF .INTEREST U/S 234B OF THE ACT DOES NOT ARI SE BECAUSE THE HON'BLE ITAT HAS PASSED AN ORDER ON 03.12.2014 BY D IRECTING THE AO TO ACCEPT THE ASSESSEE INCOME. 8. THE LD. PR. CIT - 3 OUGHT TO HAVE APPRECIATED TH AT THE ORDER OF AO HAS ALREADY MERGED WITH ORDER OF HON'BLE IT AT A ND THEREFORE PROVISIONS OF SECTION 263 CANNOT BE INVOKED. 9. THE LD. PR. CIT - 3 ERRED IN GIVING DIRECTIONS B EYOND THE ASSESSMENT ORDER UNDER CONSIDERATION I.E., ORDER OF AO PASSED U/S 144 R.W.S 143(3) R.W.S 147 OF THE ACT DATED 21. 03.2013 WHICH IS AGAINST THE PROVISIONS OF LAW. 10. THE ASSESSEE MAY ADD, ALTER OR MODIFY OR SUBSTI TUTE ANY OTHER POINT TO THE GROUNDS OF APPEAL AT ANY TIME BE FORE OR AT THE TIME OF HEARING OF THE APPEAL. 6. THE LD. AR SUBMITTED THAT ORIGINAL ASSESSMENT OR DER WAS REMITTED BACK TO THE FILE OF THE AO BY THE ITAT FOR REASSESSMENT ON 3 RD DECEMBER, 2014 AND THE LD. PR. CIT PASSED ORDER U/ S 263 ON 5 ITA NOS. 925 & 926/HYD/2015 M/S SPR INFRASTRUCTURE (I) LTD. 26/03/2015 TO REDO THE ASSESSMENT. HE SUBMITTED THA T WHEN THERE IS NO ORDER PENDING AS ON THAT DATE AS THE ORIGINAL OR DER WAS REMITTED BACK TO THE FILE OF THE AO FOR REASSESSMENT. HE, TH EREFORE, SUBMITTED THAT THE ASSESSEE IS NOT SURE WHICH ASSESSMENT ORDE R IS BEING REVIEWED BY THE LD. PR. CIT WHEN THERE IS NO ASSESS MENT ORDER PENDING. THE LD. AR SUBMITTED THAT FROM THE ACTION OF THE LD. PR. CIT, IT IS PRESUMED THAT HE WANTED TO REVIEW THE FUTURE ORDER OF THE AO. HE SUBMITTED THAT IT CAN BE INFERRED FROM THE LANGUAGE USED IN THE ORDER OF THE PR. CIT PASSED UNDER SECTION 263 OF THE ACT WHEREIN HE DIRECTED THE AO TO PASS THE ORDER IN CONSEQUENCE TO THE ITATS ORDER, WHICH IS NOT PROPER. 7. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORD ER OF THE PR. CIT. 8. CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES A ND PERUSED THE MATERIAL FACTS ON RECORD AS WELL AS THE ORDERS OF T HE REVENUE AUTHORITIES. WE ARE OF THE VIEW THAT THE COORDINATE BENCH OF THIS TRIBUNAL HAS SET ASIDE THE IMPUGNED ORDER OF AO PAS SED U/S 143(3) R.W.S. 147 FOR FRESH ASSESSMENT ON 03/12/2014. IN C ONSEQUENCE TO THE ABOVE DIRECTION, THE ORDER PASSED BY THE AO BECOMES VACATED. BUT, THE LD. PR. CIT-3, HAS CALLED FOR THE VACATED ORDER AND RELATED DOCUMENTS AND REVIEWED SUCH VACATED ORDER AND ISSUE D NOTICE U/S 263 FOR HEARING ON 18/02/2015 TO ASSESSEE AND POSTI NG FOR HEARING ON 22/02/2015. THE ACTION OF THE PR.CIT-3 IS NOT ACCOR DING TO THE PROPER PROCEDURE, HE CANNOT PASS ORDER U/S 263 ON THE VACA TED ASSESSMENT ORDER. MOREOVER, THE ORDER PASSED BY PR. CIT-3 IS F OR THE REASSESSMENT ORDER WHICH WILL BE PASSED BY THE AO I N CONSEQUENCE TO THE DIRECTION OF THE ITAT. THIS IS ALSO NOT PROP ER, AS SUCH ORDER WAS YET TO BE PASSED. CONSIDERING THE FACTS AND CIR CUMSTANCES OF THIS CASE, WE HOLD THAT THE ACTION OF PR.CIT-3 IS NOT PR OPER AND THE ORDER PASSED BY HIM IS HEREBY QUASHED. 6 ITA NOS. 925 & 926/HYD/2015 M/S SPR INFRASTRUCTURE (I) LTD. 9. AS THE FACTS AND GROUNDS RAISED IN AY 2008-09 AR E MATERIALLY IDENTICAL TO THAT OF AY 2007-08, FOLLOWING THE CONC LUSIONS DRAWN THEREIN, WE ALLOW THE APPEAL OF THE ASSESSEE IN AY 2008-09. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 29 TH APRIL, 2016. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 29 TH APRIL, 2016 KV COPY TO:- 1) M/S SPR INFRASTRUCTURE (INDIA) LTD., C/O P. MUR ALI & CO., CAS., 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 500 082 2) ACIT, CIRCLE 3(2), HYDERABAD 3 PR. CIT 3, HYDERABAD 4) ADDL. CIT, RANGE 3, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.