M/s Trimurti Exports., Margao V. The Assistant Commissioner of Income Tax, Central Circle, Panaji, Goa., Panaji

ITSSA 46/PAN/2015

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2281 (ITAT-PANAJI)
• Duration Of Justice: 6 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 19-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 29-12-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANAND SHANKAR MARATHE
• Keywords: Search and seizure; Condonation of delay
• Section: 143(3); 153A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER IT (SS) A NO S . 45 & 46 /P A N/201 5 (ASST. YEAR : 200 7 - 0 8 & 2008 - 09 ) M/S. TRIMURTI EXPORTS, C/F - 1 & 3, J.B. APARTMENTS, NEAR PANDAVA CHURCH, AQUEM, ALTO, MARGAO GOA. VS. P R. CIT ( CENTRAL ) , BANGALORE . PAN NO. AADFT 5082 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRAMOD VAIDYA ADV . DEPARTMENT BY : SHRI ANAND SHANKAR MARATHE - DR DATE OF HEARING : 19 / 0 7 /201 6 . DATE OF PRONOUNCEMENT : 19 / 0 7 /201 6 . O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS OF THE PRINCIPAL COMMISSIONER OF INCOME TAX ( CENTRAL ) , BANGALORE IN F.NO. 263/TRIMURTI EXPORTS/PR.CIT(C)/2014 - 15 , EACH DATED 25/03/2015 FOR THE ASSESSMENT YEAR S 2007 - 08 & 2008 - 09 . 2. SHRI PRAMOD VAIDYA , ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE AND SHRI ANAND SHANKAR MARATHE, DEPARTMENTAL REPRESENTATIVE REPRESENTED ON BEHALF OF THE RE VE N UE. 3 . IT WAS THE SUBMISSION THAT THE APPEALS FILED BY THE ASSESSEE ARE D ELAYED BY 219 DAYS , FOR WHICH THE ASSESSEE HAS FILED A NECESSARY AFFIDAVIT FOR CONDONATION OF DELAY, WHEREIN IT WAS MENTIONED THAT THE 2 IT (SS) A NO S . 45 & 46 /P A N/201 5 ORDERS HAVE BEEN SERVED ON THE RECEPTIONIST OF THE ASSESSEE MR. AKBAR DHARWAD AND IT WAS NOT INTIMATED TO THE ASSESSEE BY HIM AND I T WAS ONLY , WHEN THE ISSUE WAS TAKEN UP BY THE ASSESSING OFFICER FOR GIVING EFFECT TO THE ORDER OF THE PR. COMMISSIONER OF INCOME TAX PASSED UNDER SECTION 263, THE ASSESSEE WAS AWARE THAT SUCH AN ORDER HA S BEEN PASSED AND IMMEDIATELY COPY OF THE ORDER WAS TRACED AND ON ADVICE FROM THE ASSESSEES COUNSEL , THE APPEAL HAD BEEN FILED. THE DEPARTMENTAL REPRESENTATIVE DID NOT RAISE ANY SERIOUS OBJECTION FOR CONDONATION OF DELAY. 4 . AS IT IS NOTICED THAT THE ASSESSEE HAS GIVEN REASONABLE EXPLANATION FOR CONDONATION OF DELAY AND THE SAME HAS NOT BEEN SERIOUSLY OBJECTED TO BY THE R E V E NUE, THE DELAY STANDS CONDONED AND THE APPEAL S ARE DISPOSED OF ON MERITS. 5. IT WAS SUBMITTED BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ASSESSEE IS A TRADER AND EXPORTER OF IRON ORE AND MINERALS. IT WAS THE SUBMISSION THAT THERE WAS A SEARCH AND SEIZURE OPERATION ON THE PREMISES OF THE ASSESSEE ON 12/10/2010 AND THE ASSESSMENT CAME TO BE COMPLETED UNDER SECTION 153A READ WITH SE C. 143(3) ON 28/03/2013. IT WAS THE SUBMISSION THAT THIS ORDER UNDER SECTION 153A WAS A SUBJECT MATTER OF REVISION UNDER SECTION 263 FOR THE ASSESSMENT YEARS 2007 - 08 & 2008 - 09 ON THE GROUND THAT THERE WAS UNDER INVOICING BY THE ASSESSEE ON THE BASIS OF AVERAGE FOB PRICE FOR THE SAME GRADE AND THE SAME PERIOD AND THIS WAS NOT LOOKED UP INTO BY THE ASSESSING OFFICER. IT WAS THE SUBMISSION THAT THE METHODOLOGY OF ARRIVING AT THE AVERAGE RATE OF FOB PRICE WAS NOT PUT TO THE ASSESSEE BY THE PR. COMMISSIONER OF INCOME TAX. IT WAS THE SUBMISSION THAT THERE IS A SUBSTANTIAL DIFFEREN CE BETWEEN A PERSON WHO DOES ACTIVITY OF MINING AND EXPORTS AND A PERSON WHO DOES TRADING AND EXPORTS. IT WAS THE SUBMISSION THAT THE ASSESSEE IS A TRADER AND IS NOT A MINER. IT W AS THE SUBMISSION THAT THE ACCOUNTS OF THE ASSESSEE ARE UNDER STATUTORY AUDIT 3 IT (SS) A NO S . 45 & 46 /P A N/201 5 AND EVEN T HE PARTY - WISE BREAKUP AND THE FOB VALUE ACTUALLY REALIZED WERE BEFORE THE ASSESSING OFFICER. IT WAS THE SUBMISSION THAT THE PR.COMMISSIONER OF INCOME TAX HAS ADOPTED A N AVERAGE RATE OF FOB PRICE AND HAS ATTEMPTED TO TAX HYPOTHETICAL INCOME IN THE HANDS OF THE ASSESSEE. IT WAS THE FURTHER SUBMISSION THAT UNDER THE SIMILAR CIRCUM ST ANCES, NOTICE UNDER SECTION 263 HAD BEEN ISSUED ON OTHER ASSESSEES AND THE PROCEEDINGS HAD ALSO BEEN DROPPED. IT WAS THE SUBMISSION THAT THE ORDER UNDER SECTION 263 IN THE CASE OF ASSESSEE WAS LIABLE TO BE SET ASIDE . HE ALSO RELIED UPON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GABRIEL INDIA LTD. REPORTED IN 203 ITR 108 TO SUPPORT HIS SUBMISSION TH A T SIMPLY BECAUSE OF COMMISSIONER DID NOT AGREE WITH THE CONCLUSION OF THE ASSESSING OFFICER, THE ORDER OF THE ASSESSING OFFICER CANNOT BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVEN UE . HE PLACED FURTHER RELIANCE ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF R.K. CONSTRUCTION COMPANY REPORTED IN 313 ITR 65 TO SUBMIT THAT THE COMMISSIONER OF INCOME TAX WAS NOT JUSTIFIED IN INVOKING HIS REVISIONAL JURISDICTION WHEN T HE ASSESSING OFFICER HAS TAKEN A PARTICULAR VIEW ON THE BASIS OF EVIDENCE PRODUCED BEFORE HIM. HE FURTHER PLACED RELIANCE ON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF KRISHNA C A PBOX (P.) LTD . REPORTED IN (2015) 60 TAXMANN.COM 243 (ALL.) TO SUBMIT THAT A MERE NON - DISCUSSION OR NON - MENTION OF ENQUIRY DONE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER COULD NOT LEAD TO THE ASSUMPTION THAT THE ASSESSING OFFICER DID NOT APPLY HIS MIND. HE ALSO PLACED RELIANCE ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF DEEPAK REAL ESTATE DEVELOPERS (I) (P.) LTD. REPORTED IN 367 ITR 377 (RAJ.) TO SUBMIT THAT THE ASSESSING OFFICER HAVING EXAMINED RELEVANT MATERIAL ON RECORD , COMMISSIONER OF INCOME TAX WITHOUT R EJECTING THOSE DOCUMENTS COULD NOT PASS REVISIONAL ORDER. HE ALSO PLACED RELIANCE ON THE DECISION OF THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF JAI KUMAR KANKARIA REPORTED IN 251 ITR 707 TO SUBMIT THAT THE TERM ERRONEOUS HAS TO BE LOOKED INTO FROM FACTS AND CIRCUMSTANCES 4 IT (SS) A NO S . 45 & 46 /P A N/201 5 AND MATERIALS WHICH ARE PLACED BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT AND THERE IS NO SCOPE UNDER SECTION 263 TO REOPEN AN ASSESSMENT ON SUBSEQUENT EVENT OR ANY NEW MAT ERIAL . 6 . IN REPLY, DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE PR. COMMISSIONER OF INCOME TAX. HE PLACED RELIANCE ON THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. TIMBLO PRIVATE LTD . IN ITA NO S . 253 TO 257/PNJ/2015 , DATED 18/08/2015 , WHEREIN ON AN IDENTICAL ISSUE THE ORDER UNDER SECTION 263 HAD BEEN UPHELD . HE FURTHER PLACED RELIANCE ON THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL AT MUMBAI IN THE CASE OF M/S.CRO MPTON GREAVES IN ITA NO. 1994/MUM/ 2013 DATED 01/02/2016 WHEREIN IT HAS BEEN HELD THAT THE EXPLANATION 2 TO SECTION 263 INTRODUCED W.E.F. 01/06/2015 IS DECLARATORY & CLARIFICATORY IN NATURE AND IS INSERTED TO PROVIDE CLARITY ON THE ISSUE AS TO WH I CH ORDERS PASSED BY THE ASSESSING OFFICER SHALL CONSTITUTE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE FOR THE PURPOSE OF INVOKING THE POWER S UNDER SECTION 263. IT WAS THE SUBMISSION THAT IN VIEW OF THE EXPLANATION 2 TO SECTION 263 INTRODUCED , THE DECISION S RELIED UPON BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE WERE NO MORE GOOD LAW . 7 . IN REPLY , AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMI T TED THAT THE ORDER IN THE CASE OF M/S. TIMBLO PRIVATE LTD. (SUPRA) WAS DISTINGUISHABLE INSOFAR AS IN THE SAID CASE, THE UNDISCLOSED BANK ACCOUNTS HAD BEEN FOUND AND THE ASSESSEE HAD ALSO ADMITTED TO THE UNDER INVOICING . IT WAS THE SUBMISSION THAT THERE WAS NO EVIDEN C E OF UNDER INVOICING IN THE ASSESSEES CASE . 8 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSAL OF THE ORDER PASSED UNDER SECTION 263 IN THE PRESENT CASE, CLEARLY SHOWS THAT THE PR.COMMISSIONER OF INCOME TAX HAS GIVEN THE ASSESSEE S DETAILS OF UNDER INVOICING WHICH IS ALLEGED AGAINST THE ASSESSEE. THIS IS FOUND IN 5 IT (SS) A NO S . 45 & 46 /P A N/201 5 THE CHART AT PAGE NO. 2 OF THE ORDER OF THE PR. COMMISSIONER OF INCOME TAX. A PERUSAL OF THE COMMERCIAL INVOICE AS PROVIDED BY THE ASSESSEE WHICH IS FOUND AT PAGE NO. 129 OF THE PAPER BOOK ALSO, IN FACT SHOWS THE QUALITY REPRESENTING FE CONTENT OF THE IRON OR E EXPORTED. THE ISSUE OF UNDER INVOICING HAD RA ISED UP ADEQUATE N A TIONAL ISSUE S IN RESPECT OF EXPORT OF IRON ORE AND THE COMMISSION UNDER THE NAME SHAH COMMISSION HAD B E EN APPOINTED TO VERIFY THE SAID QUESTION. ADMITTEDLY, THE SHAH COMMISSION WAS MORE TOWARDS THE EVASION OF THE CUSTOMS DUTY IN RESPECT OF EXPORT OF THE IRON ORE CONSEQUENT TO UNDER INVOICING. IT HAD NOTHING TO DO WITH THE INCOME TAX ANGLE . HOWEVER , THE SAID SHAH COMMISSIONS REPORT HAS ALSO IDENTIFIED THE ASSESSEE AS ONE OF THE EXPORTERS, WHO HAD DONE UNDER INVOICING. THE PR. COMMISSIONER OF INCOME TAX HAS NOT RELIED UPON THE SHAH COMMISSION REPORT. HOWEVER, HE HAS IDENTIFIED THE ISSUES OF UNDER INVOICING IN RESPECT OF THE EXPORTS MADE BY THE ASSESSEE TO CHINA. FURTH ER, A PERUSAL OF THE ORDER OF PR. COMMISSIONER OF INCOME TAX AT PARA 6 CLEARLY SHOWS THAT FROM THE ASSESSEES SUBMISSION, THE ASSESSEE HAS CLEARLY CONCEDED THAT THERE IS A SCOPE FOR SHORT REALIZATION OF EXPORTS. ADMITTEDLY, THESE HAVE NOT BEEN EXAMINED BY THE ASSESSING OFFICER. THIS IS NOT A CASE WHERE THE ASSESSING OFFICER HAS EXAMINED THE ISSUES, BUT HAS NOT RECORDED THE SAME IN THE ASSESSMENT ORDER . THIS IS A CASE WHERE ISSUE OF UNDER INVOICING HAS NOT BE E N LOOKED INTO AT ALL BY THE ASSESSING OFFICER AS IS EVIDENT FROM PARA 6 OF THE ORDER OF THE PR.COMMISSIONER OF INCOME TAX. THE ASSESSEE HAS ALSO NOT BEEN ABLE TO SHOW ANY EVIDENCE TO SHOW THAT THE ISSUE OF UNDER INVOICING WAS EVEN TOUCHED UPON BY THE ASSESSING OFFICER . A PERUSAL OF THE DECISION RELIED ON BY THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SHOWS THAT NONE OF THE SAID DECISIONS APPLY INSOFAR AS THIS IS NOT A CASE WHERE THE COMMISSIONER HAS TAKEN A DIFFERENT VIEW FROM THAT T AKEN BY THE ASSESSING OFFICER. THIS IS A CLEAR CASE WHERE THERE HAS BEEN NO INVESTIGATION BY THE ASSESSING OFFICER IN RESPECT OF THE ISSUE . THE SUBMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE 6 IT (SS) A NO S . 45 & 46 /P A N/201 5 PR. COMMISSIONER OF INCOME TAX HAS DROPPE D THE PROCEEDINGS IN OTHER CASES WOULD NOT COME TO THE RESCUE OF THE ASSESSEE , I NSOFAR AS ON WHAT BASIS , THE ISSUES HAVE BEEN DROPPED H AVE NOT BEEN PLACED BEFORE US. THE DECISION RELIED UPON BY THE DEPARTMENTAL REPRESENTATIVE IN THE CASE OF M/S. TIMBLO PRIVATE LTD. (SUPRA) , THOUGH ADMITTEDLY ON AN IDENTICAL ISSUE, THE SUBMISSION OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE ASSESSEE THEREIN ITSELF HAD ADMITTED TO THE RECEIPT OF ADDITIONAL SALE PROCEEDS AND THE TWO FOREIGN BANK ACCOUNTS , WHIC H WERE UNDISCLOSED HAS ALSO BEEN FOUND , T HUS, MAKE THE FACTS IN THE ASSESSEES CASE DIFFERENT FROM THAT OF M/S. TIMBLO PRIVATE LTD S CASE , HOWEVER, THE PRINCIPLE LAID DOWN BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. TIMBLO PRIVATE LTD. (SUPRA) DOES APPLY INSOFAR AS IT WAS ALSO A CASE OF UNDER INVOICING OF PART OF TRANSACTIONS IN THE EXPORT OF IRON ORE TO CHINA . AS MENTIONED EARLIER, AS IT IS NOTICED THAT THE ASSESSING OFFICER HAS NOT EXAMINED THE ISSUE OF UNDER INVOICING, WE ARE OF THE VIEW THAT THE ORDER OF THE PR. COMMISSIONER OF INCOME TAX PASSED UNDER SECTION 263 IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. 9. IN THE RESULT, APPEALS OF THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON TUESDAY , THE 19 TH DAY OF JULY , 201 6 AT GOA . SD/ - SD/ - (N.S.SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19 TH JU LY , 201 6 . VR/ - 7 IT (SS) A NO S . 45 & 46 /P A N/201 5 COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI