Rashmi Cement Ltd., Kolkata V. DCIT, CC-2(2), KOLKATA, Kolkata

ITSSA 32/KOL/2016

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3479 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-05-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 10-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOULEAN HANGSHING
• Assessee Lawyers: A K TIBREWAL; AMIT AGARWAL ARS
• Keywords: Revised return
• Section: 143(3); 153A; 132

Judgement Text

1 IT(SS)A NOS.31-36 & 43-44/KOL/2016 RASHMI CEMENT LTD., AYS 2007-08-2012-13 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE .., /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] I.T(SS).A NOS. 31 TO 36/KOL/2016 / ASSESSMENT YEARS: 2007-08 TO 2012-13 RASHMI CEMENT LTD. (PAN: AABCR4343R) VS. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(2), KOLKATA ( /APPELLANT ) ( / RESPONDENT ) & I.T(SS).A NOS. 43 & 44/KOL/2016 / ASSESSMENT YEARS: 2010-11 & 2011-12 DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(2), KOLKATA VS. RASHMI CEMENT LTD. ( /APPELLANT ) ( / RESPONDENT ) DATE OF HEARING 24.08.2017 DATE OF PRONOUNCEMENT 17.10.2017 FOR THE ASSESSEE/ S/SHRI A.K.TIBREWAL & AMIT AGARWAL, ARS FOR THE REVENUE/ SHRI GOULEAN HANGSHING, CIT, DR / ORDER PER SHRI A.T.VARKEY, JM I.T(SS).A NOS. 31 TO 36/KOL/2016 FOR AYS. 2007-08 TO 2012-13 PREFERRED BY THE ASSESSEE AND I.T(SS).A NOS. 43 & 44/KOL/2016 (CROSS APPEALS) FO R AYS.2010-11 AND 2011-12 PREFERRED BY THE REVENUE ARE AGAINST THE SEPARATE ORDERS OF THE CIT(A)-20, KOLKA TA, ALL DATED 31.03.2016. REVENUES APPEALS ARE TIME BARRED BY 3 DAYS. IN VI EW OF THE CONCESSION GIVEN BY THE LD. AR TO CONDONE THE DELAY, WE CONDONE THE DELAY AND A DMIT THE APPEAL FOR HEARING. 2. FIRST OF ALL WE WILL TAKE UP THE ASSESSMENTS OF ASS ESSEE FOR A.YS. 2007-08 TO 2010-11 AND CROSS APPEALS PREFERED BY THE REVENUE FOR AYS 2 010-11 & 2011-12. 2 IT(SS)A NOS.31-36 & 43-44/KOL/2016 RASHMI CEMENT LTD., AYS 2007-08-2012-13 3. IN THESE APPEALS THE COMMON GROUND NO. 1 AND 2 R ELATES TO THE LEGAL ISSUE THAT THE AO CANNOT ADD BACK ITEMS OF REGULAR ASSESSMENTS IN THE PROCEEDINGS U/S 153A OF THE ACT WHEN THE FACT REMAINS THAT THESE ASSESSMENTS WERE N OT PENDING (SO NOT ABATED) BEFORE THE AO ON THE DATE OF SEARCH I.E. 18.02.2013. IN ORDER TO APPRECIATE THE FACTS CLEARLY THE CHART MADE FOR THE AFORESAID ASSESSMENT YEARS ARE REPRODU CED BELOW: ASSTT. YEAR DATE OF FILING ORIGINAL RETURN DATE OF ORIGINAL ASSESSMENT ASST. COMPLETED U/S. DATE OF FILING RETURNS U/S. 153A WHETHER ABATED (1) (2) (3) (4) (5) (6) 2007-08 26.10.2009 20.09.2010 154/143(3) 19.06.2014 NO 2008-09 19.09.2008 30.12.2009 153A/143(3) 19.06.201 4 NO 2009-10 30.09.2009 28.11.2011 143(3) 19.06.2014 NO 2010-11 14.10.2010 30.12.2011 143(3) 19.06.2014 NO 2011-12 2011-12 30.09.2011 02.03.2012 NO REGULAR ASSESSMENT REVISED RETURN FILED 19.06.2014 NO 2012-13 29.09.2012 19.06.2014 YES 4. FROM THE PERUSAL OF THE TABLES ABOVE IT TRANSPIR ES THAT THE AO HAS ADDED BACK CERTAIN ADDITIONS/DISALLOWANCES WHICH HAVE NO NEXUS/CONNECT IONS WITH ANY SEIZED MATERIALS DURING THE SEARCH CONDUCTED ON 18.02.2013. FROM A PERUSAL OF THE COLUMN 6 REVEALS THAT ASSESSMENTS UP TO AY 2011-12 WERE NOT PENDING BEFOR E THE AO ON THE DATE OF SEARCH I.E. 18.02.2012. FOR AYS 2007-08 TO 2010-11 SCRUTINY ASS ESSMENTS WERE COMPLETED BEFORE 30.12.2011; AND FOR AY 2011-12, THE FACT REMAINS TH AT THE AO COULD NOT HAVE ISSUED 143(2) NOTICES ALSO BECAUSE FOR ASSESSMENT YEAR 2011-12 TH E AO WAS EMPOWERED TO ISSUE 143(2) NOTICE WAS ONLY UP TO 30.09.2012 AND ADMITTEDLY NO NOTICE WAS ISSUED U/S. 143(2) OF THE ACT BEFORE THE DATE OF SEARCH. SINCE THE SEARCH HAPPENE D ON 18.02.2013, THE ASSESSMENTS IN RESPECT TO ASSESSMENT YEARS 2007-08 TO 2011-12 WERE UNDISPUTEDLY NOT PENDING BEFORE THE AO, THEREFORE, IT IS AN UNABATED ASSESSMENT AND THE SETTLED POSITION OF LAW IS THAT NO ADDITION CAN BE MADE FOR UNABATED ASSESSMENTS WITHOUT INCRIM INATING MATERIALS. THE HON'BLE DELHI HIGH COURT IN THE ITA NO. 707, 709 & 7013 OF 2014 CIT CENTRAL-III VS. KABUL CHAWLA, WHEREIN THEIR LORDSHIPS HAVE HELD AS UNDER: SUMMARY OF LEGAL POSITION 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: 3 IT(SS)A NOS.31-36 & 43-44/KOL/2016 RASHMI CEMENT LTD., AYS 2007-08-2012-13 I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHE D REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVAN T TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE TOTAL INCOME OF THE AFOREMENTIONED SIX YEARS IN SEPARATE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS IN WHICH B OTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHE R POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE E VIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RE LEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UN DER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL. V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD ASSESS IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD REASSESS TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A ME RGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS O F THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A O. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATI NG MATERIAL UNEARTHED DURING THE COURSE OF PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHIC H WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL A SSESSMENT. 5. THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT VS VEERPRABHU MARKETING LTD. REPORTED IN (2016) 73 TAXMANN.COM 149 (CAL) HAS ALSO HELD AS UNDER: WE AGREE WITH THE VIEW EXPRESSED BY THE DELHI HIGH COURT THAT INCRIMINATING MATERIAL IS PRE- REQUISITE BEFORE POWER COULD HAVE BEEN EXERCISED U/ S 153(C) R.W SECTION 153(A). IN THE CASE BEFORE US, THE AO HAS MADE A DISALLOWANCE OF THE EXPENDITU RE, WHICH WAS HELD DISCLOSED, FOR ONE REASON OR THE OTHER, BUT SUCH DISALLOWANCES MADE BY THE AO WE RE UPHELD BY THE LD.CIT(A) BUT THE LD. TRIBUNAL DELETED THESE DISALLOWANCE. WE FIND NO INF IRMITY IN THE AFORESAID ACT OF THE LD. TRIBUNAL. THE APPEAL IS, THEREFORE, DISMISSED. 6. IN THE LIGHT OF THE AFORESAID RATIO LAID BY THE HON'BLE HIGH COURTS, WHEREIN, THE HONBLE HIGH COURT HELD THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIALS, THE COMPLETED ASSESSMENT CAN BE RE-ITERATED AND IN THE CASES BEFO RE US FROM A PERUSAL OF THE CHART, IT IS CLEAR THAT ON THE DATE OF SEARCH I.E. ON 18.02.2013 , ASSESSMENTS PERTAINING TO A.YS. 2007-08 TO 2011-12 WERE NOT PENDING BEFORE THE AO BECAUSE T HE LAST DATE FOR ISSUANCE OF SECTION 143(2) NOTICE FOR SCRUTINY WAS ON 30.09.2012 FOR AY 2011-12 AND FOR AY 2007-08 TO AY 2010-11 ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT BEFORE 30.12.2011 AND SO, IT CAN 4 IT(SS)A NOS.31-36 & 43-44/KOL/2016 RASHMI CEMENT LTD., AYS 2007-08-2012-13 BE SAFELY PRESUMED THAT THESE ASSESSMENTS WERE NOT PENDING BEFORE THE AO AND AS PER THE RATIO LAID BY THE HONBLE HIGH COURTS THESE ASSESS MENTS ARE CONCLUDED ASSESSMENTS, WHICH CANNOT BE TINKERED WITH FRESH ADDITIONS WITHOUT INC RIMINATING MATERIALS SEIZED DURING SEARCH. THEREFORE, NO ADDITION WITHOUT INCRIMINATIN G MATERIALS OUGHT TO HAVE BEEN SADDLED ON THE ASSESSEE FOR A.YS. 2007-08 TO 2011-12 AND SO , WE ALLOW THESE APPEALS OF THE ASSESSEE ON THE LEGAL ISSUE RAISED AND DIRECT THE DELETION O F THE ADDITIONS/DISALLOWANCES MADE BY THE AUTHORITIES BELOW. CONSEQUENTLY, THE REVENUE APPEAL S FOR AYS 2010-11 AND 2011-12 ARE DISMISSED. 7. COMING TO AY 2012-13, WHICH ASSESSMENT WAS PENDI NG, SINCE THE AO HAD TIME TO ISSUE NOTICE U/S. 143(2) OF THE ACT ON THE DATE OF SEARCH I.E. ON 18.02.2013, WHICH IS AN ASSESSEES APPEAL. THE ASSESSEE HAS RAISED THE SOLE GROUND OF APPEAL AGAINST THE ACTION OF LD. CIT(A) WHEREIN HE DIRECTED THE AO TO RE-EXAMINE THE ISSUE OF DISALLOWANCE OF RS.33,86,584/- MADE U/S. 40(A)(IA) OF THE ACT. BRI EFLY STATED FACTS ARE THAT THE AO MADE AN ADDITION OF RS.33,86,584/- INVOKING SECTION 40(A)(I A) OF THE ACT ON ACCOUNT OF SHORT PAYMENT OF TDS. THE AO OBSERVED THAT WHILE PERUSING THE TA N DETAILS AVAILABLE IN THE ITS DATA FOR AY 2012-13, IT WAS FOUND THAT TDS AMOUNTING TO RS.7 6,740/- HAS NOT BEEN PAID BY THE ASSESSEE COMPANY. THEREFORE, HE CONCLUDED THAT THE ASSESSEE EITHER DID NOT DEDUCT TAX OR AFTER DEDUCTING THE SAME, SOME PART OF TDS WAS NOT DEPOSITED IN THE GOVERNMENT ACCOUNT. ACCORDINGLY, HE DISALLOWED RS.33,86,584/- U/S. 40(A )(IA) OF THE ACT. BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED THAT THERE WAS SOME MISTAKE IN FILING OF THE TDS RETURN WHICH CAUSED ERROR IN ITS DATA, WHICH MISTAKE HAS BEEN CORRECTED AND, THEREFORE, THERE IS NO OUTSTANDING BEING REFLECTED ON ITS DATA. CONSIDERING THE SUBMI SSION OF THE LD. AR ON THIS ISSUE, LD. CIT(A) DIRECTED THE AO TO VERIFY THE CLAIM OF THE A SSESSEE AND IF FOUND TRUE, ALLOW IT AS PER THE PROVISIONS OF THE ACT. AGGRIEVED, THE ASSESSE E IS IN APPEAL BEFORE US. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO HAS ALREADY GIVEN EFFECT TO THE IMPUGNED DIRECTION/ORDER OF THE LD. CIT(A) WHICH IS FOUND PLACED AT PAPER BOOK VOLU ME-II AT PAGES 314-315. THE AO VIDE ORDER DATED 24.08.2016 WHILE GIVING EFFECT TO THE I MPUGNED DIRECTION OF LD CIT(A), HAS ASCERTAINED FROM ACIT (TDS) WHO IN TURN VIDE LETTER DATED 16.02.2016 HAS REPORTED THAT FOR AY 2012-13 THERE IS NO SHORT DEDUCTION OR NON-DEDUC TION OF TDS. THEREFORE, AO AS PER THE 5 IT(SS)A NOS.31-36 & 43-44/KOL/2016 RASHMI CEMENT LTD., AYS 2007-08-2012-13 DIRECTION OF THE LD. CIT(A) AFTER VERIFICATION FROM THE JURISDICTION ACIT (TDS) DELETED THE DISALLOWANCE MADE IN THE ORIGINAL ASSESSMENT ORDER FOR RS.33,86,584/- U/S. 40(A)(IA) OF THE ACT VIDE HIS ORDER DATED 24.08.2016. SINCE THE AO HAS GIVEN EFFECT TO THE ORDER OF THE LD. CIT(A) DELETING THE DISALLOWANCE OF RS.33,86,584/- MADE U/S. 40(A)(IA) OF THE ACT, WE FIND THAT THE APPEAL OF THE ASSESSEE IS INFRUCTUOUS AND, THEREFORE, THE SAME STANDS DISMISSED. 9. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE F ROM AY 2007-08 TO 2011-12 ARE ALLOWED, APPEAL OF THE ASSESSEE FOR AY 2012-13 IS D ISMISSED AND BOTH THE REVENUES APPEALS ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 17.10.2017 . SD/- SD/- (M. BALAGANESH) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :17TH OCTOBER, 2017 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT RASHMI CEMENT LTD., 39, SHAKESPEARE SAR ANI, 6 TH FLOOR, KOLKATA-700 017 2 RESPONDENT DCIT, CENTRAL CIRCLE-2(2), KOLKATA 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR. PVT. SECY.,