Shri Dinobandhu Sadhukhan, Howrah V. I,T.O.,Ward-48(3), Kolkata

ITA 970/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5197 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 30-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: S M SURANA
• Keywords: Revision of order; Opportunity of being heard; Right to appeal; Set aside
• Section: 143(3); 263

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 970 / KOL / 2019 ASSESSMENT YEAR :2014-15 SHRI DINOBANDHU SADHUKHAN, PROP. M/S ARINDAM EGG SUPPLY, POLGUSTIA, P.S. JAGATBALLAVPUR, HOWRAH- 711410 [ PAN NO.CJOPS 4318 G ] V/S . INCOME TAX OFFICER WARD-48(3), 3, GOVT. PLACE (WEST), 1 ST FLOOR, KOLKATA-001 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI S.M. SURANA, ADVOCATE /BY RESPONDENT DR. P.K. SRIHARI, CIT-DR /DATE OF HEARING 19-08-2019 /DATE OF PRONOUNCEMENT 23-08-2019 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2014-15 ARISES AGAINST THE PRINCIPAL COMMISSIONER OF INCOME TAX-16 KOLKATAS O RDER DATED 25.02.2019 PASSED IN CASE NO.PCIT-16/263/2018-19 INVOLVING PRO CEEDINGS U/S 263 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES ONLY GRIEVANCE CANVASSED DURING T HE COURSE OF HEARING IS THAT PCIT HEREIN HAS INVOKED SEC. 263 REVISION J URISDICTION WITHOUT APPLYING ITA NO.970/KOL/2019 A.Y. 2014-15 SH. DINOBANDHU SADHUKHAN VS. ITO WD-48(3), KO L. PAGE 2 HIS INDEPENDENT MIND AS PER THE RELEVANT SHOW-CAUSE NOTICE DATED.04.02.2019 READING AS UNDER:- THE ADDL. CIT, RANGE-48, KOLKATA HAS MOVED A PETITI ON FOR REVISING THE COMPLETED ASSESSMENT U/S 143(3) DATED 26.12.2016 DO NE BY THE ASSESSING OFFICER. THE SUM AND SUBSTANCE OF THE PROPOSAL IS A UNDER: 2. THE CASE WAS SELECTED BY CASS UNDER CATEGORY COMPLETED SCRUTINY ON THE GROUND OF LOW NET PROFIT OR LOSS SHOWN FROM THE LARGE GROSS RECEIPT. FROM THE PERUSAL OF CORD OF THE ASSESSING OFFICER APPARE NTLY IT IS FOUND THAT THE ASSESSING OFFICER HAS FAILED TO EXAMINE THE FOLLOWI NG: 2.1 ON EXAMINATION OF ASSESSMENT FOLDER IT IS FOUND THAT A PURCHASE OF RS.1,31,20,897/- DURING THE YEAR BUT AS PER SUNDRY CREDITOR LIST OF FY 2012-13 RELEVANT TO AY 2013-14 THERE WAS A CLOSING BALANCE (CR) OF RS.6,13,874/- AS ON 1.03.2013 IN RESPECT OF M/S LAKSHMI POULTRY FARM S. HOWEVER, THIS CREDIT BALANCE WAS NOT SHOWN AS OPENING BALANCE DURING THE FY 2013-14 RELEVANT TO ASSESSMENT YEAR 2014-15,. IN ADDITION TO THAT IT WA S ALSO REVEALED THAT THERE WAS NO CLOSING BALANCE (CREDIT BALANCE) AS PER LIST OF SUNDRY 2013-14 RELEVANT TO AY 2014-15 IN RESPECT OF M/S LAKSHMI POULTRY FAR MS. APPARENTLY, IT IS THE CASE OF CESSATION OF LIABILITY DURING THE YEAR WHIC H SHOULD HAVE BEEN TAXED AS INCOME OF THE YEAR. 2.2 A IT WAS A CASE OF LOW NET PROFIT MAJOR PURCHAS ES AND MAJOR EXPENSES IN P&L A/C VIZ. CARRIAGE INWARD OF RS.1,72,66,200/-. P ACKING CHARGES OF RS.40,06,725/- AND CLAIM DAMAGE GOODS OF RS.13,17,4 56/- WERE REQUIRED TO BE VERIFIED WHICH HAS NOT BEEN DONE BY THE ASSESSIN G OFFICER. 2.3 THE ASSESSING OFFICER HAS ALSO FAILED TO RECONC ILE THE SALES FROM THE BANK STATEMENTS AS BOTH CASH SALES AND CREDIT SALES HAVE BEEN DONE TO THE RELEVANT PERIOD. 2.4 THAT THE ASSESSMENT ORDER HAS BEEN PASSED WITHO UT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN DONE UNDER COMPLETE SCRUTINY AND SUFFERS DEFECTS UNDER CLAUSE (A) OF EXPLANATION 2 T O SECTION 263 OF THE INCOME-TAX ACT, 1961. IN VIEW OF THE ABOVE THE ASSESSMENT ORDER PASSED US . 143(3) DATED 26.12.2016 APPEARS TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. SINCE THE UNDERSIGNED IS PROPOSING TO REVISE THE AS SESSMENT ORDER YOU MAY PLEASE FURNISH YOUR WRITTEN OR ORAL SUBMISSION ON 1 1.02.2019 AT 4.30 P.M. 3. LEARNED CIT-DR FAILS TO REBUT THE ABOVE CLINCHIN G FACT THAT THE PCIT HAS ISSUED THE ABOVE STATED SHOW-CAUSE NOTICE ON ADDL. CIT PETITION FOR REVISING THE REGULAR ASSESSMENT IN QUESTION DATED 26.12.2016 WITHOUT APPLICATION OF HIS MIND THAT THE SAME WAS ERRONEOUS CAUSING PREJUD ICE TO INTEREST OF THE REVENUE. IT FURTHER TRANSPIRES FROM THE ASSESSEES PAPER BOOK THAT THE ASSESSING OFFICER HAD MADE DETAILED INQUIRIES REGAR DING THE CORRESPONDING PURCHASES RELATING TO M/S LAKSHMI POULTRY FARMS. WE MAKE IT CLEAR THAT THE RELEVANT ASSESSMENT NATINGS TO THIS EFFECT FORMING PART OF RECORD BEFORE US IN ITA NO.970/KOL/2019 A.Y. 2014-15 SH. DINOBANDHU SADHUKHAN VS. ITO WD-48(3), KO L. PAGE 3 PAGES 18 TO 21. THIS TRIBUNALS CO-ORDINATE BENCH D ECISION IN CASE OF M/S RUPAYAN YDYOG VS. CIT-XVII, KOLKATA ITA NO.1073/KOL/2012 DECIDED ON 28.11.2018 REVERSE THE CITS SIMILAR EXERCISE OF SE C. 263 JURISDICTION FOR NON- APPLICATION OF MIND AS UNDER:- 2. AT THE OUTSET ITSELF, WE NOTE THAT THERE IS A DE LAY OF 1124 DAYS IN FILING THE ASSESSEE'S APPEAL. THE ASSESSEE HAS FILED DETAILED AFFIDAVIT EXPLAINING THE REASONS FOR THE DELAY. FROM THE PERUSAL OF THE SAME , IT IS NOTED THAT THE ASSESSEE WAS A PARTNERSHIP FIRM WHICH WAS FORMED BY DEED OF PARTNERSHIP DATED 30.06.1999 AND LATER GOT DISSOLVED ON 02.04.2 007 BY EXECUTION OF DEED OF DISSOLUTION. THEREAFTER, THE IMPUGNED ORDER WAS PASSED ON 05.06.2009 WHICH WAS HANDED OVER TO THE EX-PARTNER SHRI DEBASI SH CHAKRABORTY ON 19.06.2009 AND SINCE THE PARTNERSHIP WAS DISSOLVED AND THE PARTNERS WERE SEPARATED AND COULD NOT BE CONTACTED AND ALSO BECAU SE OF ADVICE OF SHRI DILIP KUMAR SAHA, FCA, THE PARTNER OF ASSESSEE FIRM SHRI DEBASISH CHAKRABORTY DID NOT PURSUE FILING AN APPEAL BEFORE THE TRIBUNAL . WHEN THE DEMAND WAS RAISED BY THE DEPARTMENT AND THE DEPARTMENT ATTACHE D THE BANK ACCOUNT OF ALL THE PARTNERS SHRI DILIP KR. SAHA CONTACTED SHRI SOUMITRA CHOUDHURY, ADVOCATE ON 2ND WEEK OF JULY, 2012, WHO IN TURN ADV ISED THE ASSESSEE TO FILE AN APPEAL IMMEDIATELY ALONG WITH THE CONDONATION PE TITION ON 17.07.2012 AND THUS, THERE WAS A DELAY OF 1124 DAYS WHICH WAS CAUS ED BECAUSE OF THE WRONG ADVICE GIVEN BY THE SAID SHRI DILIP KUMAR SAHA, FCA . WE HAVE PERUSED THE REASONS GIVEN IN THE AFFIDAVIT AND WE ARE OF THE OP INION THAT BECAUSE OF THE WRONG ADVICE GIVEN BY AN AR THE ASSESSEE'S RIGHT TO APPEAL SHOULD NOT CURTAILED AND ASSESSEE SHOULD NOT BE PENALIZED, SO IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE CONDONE THE DELAY AND ADMIT THIS APPEAL FOR HEARING. 3. AT THE OUTSET ITSELF, ASSAILING THE DECISION OF THE LD. CIT EXERCISING HIS REVISIONAL JURISDICTION U/S. 263 OF THE ACT THE LD. AR DREW OUR ATTENTION THE SECOND PARAGRAPH OF THE IMPUGNED ORDER WHICH READS AS UNDER: '2. THEREAFTER, THE AO VIDE LETTER DATED 15.04.2008 HAS SENT PROPOSAL U/S. 263 OF THE L. T. ACT STATING THEREIN THAT IN RESPECT OF 10 PARTIES FROM WHOM ADVANCE OF RS.42,75,375/- WAS REC EIVED, NO VERIFICATION COULD BE MADE ABOUT THE SOURCE OF RECE IPT. THE AO FURTHER STATED THAT IN RESPECT OF 4 OUT OF AFORESAID 10 PAR TIES NOTICES WERE NOT SERVED AND THE INSPECTOR RETURNED THE NOTICES UNSER VED AND THEREFORE AS PER OPINION OF THE AO, THE ASSESSMENT ORDER IS E RRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND ACCORDINGLY REQUIRED TO BE SET ASIDE TO FRAME DE NOVO ASSESSMENT ON RECEIVING DIRECTION FROM THE CIT. 4. FROM A PERUSAL OF THE AFORESAID PARAGRAPH OF THE IMPUGNED ORDER IT IS DISCERNED THAT AO VIDE LETTER DATED 15.04.2008 HAS SENT A PROPOSAL TO THE LD. CIT TO EXERCISE HIS JURISDICTION U/S. 263 OF THE AC T TERMING THE ASSESSMENT ORDER AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE FOR THE REASON THAT THE AO COULD NOT RECEIVE THE VERIFICATION IN R ESPECT OF THE SOURCE OF RECEIPT FROM 10 PARTIES FROM WHOM THE ASSESSEE HAS TAKEN ADVANCES TO THE TUNE OF RS.42,75,375/-. IN THE LIGHT OF THE AFORESA ID PROPOSAL FROM THE AO, THE ITA NO.970/KOL/2019 A.Y. 2014-15 SH. DINOBANDHU SADHUKHAN VS. ITO WD-48(3), KO L. PAGE 4 LD. CIT HAS EXERCISED HIS JURISDICTION U/S. 263 OF THE ACT. A PERUSAL OF SEC. 263 OF THE ACT READS AS UNDER: 'REVISION OF ORDERS PREJUDICIAL TO REVENUE. 263(1) THE PRINCIPAL COMMISSIONER OR COMMISSIONER M AY CALL FOR AND EXAMINE TILE RECORD OF ANY PROCEEDING UNDER THIS AC T, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSE SSING OFFICER IS ERRONEOUS ILL SO FAR AS IT IS PREJUDICIAL TO THE IN TERESTS OF THE REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORTUNITY OF BE ING 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 PROCEEDI NG UNDER 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 PRESCRIB ED UNDER THE ACT. SO, THE POWER VESTED IN THE CIT IS THAT OF REVISIONAL JURIS DICTION TO INTERFERE WITH THE ORDER OF AO, IF IT IS ERRONEOUS IN SO FAR AS PREJUD ICIAL TO THE REVENUE AND, THEREFORE, THE POWER TO EXERCISE THE REVISIONAL JUR ISDICTION IS VESTED ONLY WITH THE PR. COMMISSIONER/COMMISSIONER IF HE CONSIDERS T HE ORDER OF THE AO TO BE ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THEREFORE, THIS POWER IS VESTED WITH THE PR. CIT/CIT TO EXERCISE RE VISIONAL JURISDICTION IS ONLY WHEN HE CONSIDERS THAT THE ORDER PASSED BY THE AO I S ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THAT POWER CANNOT BE USURPED BY THE AO TO TRIGGER THE REVISIONAL JURISDICTION VESTE D WITH THE CIT AS PER THE SCHEME OF THE ACT WHICH GIVES VARIOUS POWER TO VARI OUS AUTHORITIES TO EXERCISE AND THEY HAVE TO EXERCISE POWERS IN THEIR RESPECTIV E GIVEN SPHERE WHICH IS CLEARLY EAR-MARKED AND SPELLED OUT BY THE STATUTE. HERE, WE NOTE THAT THE AO WHO IS EMPOWERED BY THE ACT TO ASSESS A SUBJECT WIT HIN A PRESCRIBED TIME PERIOD HAS FIRST ASSESSED THE ASSESSEE AND LATER AF TER PASSAGE OF TIME HAS TAKEN UP A PROPOSAL WITH THE CIT TO EXERCISE HIS RE VISIONAL JURISDICTION CANNOT BE COUNTENANCED FOR THE SIMPLE REASON THAT WHEN IN THE FIRST PLACE THE AO NOTICING THAT HE FAILED TO PROPERLY ENQUIRE BEFORE ASSESSING THE ASSESSEE WITHIN THE TIME LIMIT PRESCRIBED BY THE STATUTE CAN NOT BE ALLOWED TO GET FRESH INNINGS TO REASSESS BECAUSE IT WAS HIS DUTY TO ENQU IRE PROPERLY WITHIN THE TIME LIMIT PRESCRIBED BY THE STATUTE. THEREFORE, THE VER Y INVOCATION OF REVISIONAL JURISDICTION ON THE PROPOSAL OF THE AO ITSELF IS BA D IN LAW AND FOR COMING TO SUCH A DECISION WE RELY ON THE DECISION OF THE TRIB UNAL IN THE CASE OF SHANTAI EXIM LTD. VS. CIT (2017) 88 TAXMANN.COM 361 (AHD.TR IB.) AND THE DECISION OF ITAT, MUMBAI BENCH IN THE CASE OF ASHOK KUMAR SHIVP URI 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 JURISDIC TION U/S 263 OF THE ACT BY THE CIT. THEREFORE, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED . LEARNED CIT-DR TOOK A LOT OF PAINS TO BUTTRESS THE PCITS FINDINGS UNDER CHALLENGE IN HIS IMPUGNED ORDER IN EXERCISE OF JURI SDICTION REVISION HIS CASE IS THAT THE ASSESSEE HAS DEPLOYED SUSPICIOUS METHODS I N ITS BUSINESS ACTIVITIES AS IS EVIDENT FROM THE ADDL.CIT PETITION FORMING SU BJECT-MATTER OF THE PCITS ITA NO.970/KOL/2019 A.Y. 2014-15 SH. DINOBANDHU SADHUKHAN VS. ITO WD-48(3), KO L. PAGE 5 SHOW-CAUSE NOTICE (SUPRA). WE FIND NO MERIT IN REVE NUES INSTANT ARGUMENTS SINCE IT HAS ALREADY COME ON RECORD THAT THE VERY A SSUMPTION OF JURISDICTION IN THE INSTANT CASE DOES NOT SATISFY THE BASIC PARAMET ERS OF REVISION JURISDICTION AS PER CO-ORDINATE BENCHS DETAILED FINDINGS. WE TH EREFORE ACCEPT ASSESSEES ARGUMENTS. THE PCITS ORDER UNDER CHALLENGE EXERCIS ING REVENUES JURISDICTION IS HELD TO BE NOT SUSTAINABLE IN THE E YES OF LAW. 4. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 23 /08/2019 SD/- SD/- ( %) (' %) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP (- 23 / 08 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SHRI DINOBANDHU SADHUKHAN, PROP. M/S ARI NDAM EGG SUPPLY, POLGUSTIA, P.S. JAGATBALLAVPUR, HOWRAH-711410 2. /RESPONDENT-ITO WD-48(3), 3, GOVT. PLACE (WEST), 1 ST FLOOR, KOLKATA-001 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ 3,