N.R.Dhanapalan, CHENNAI V. ACIT, CHENNAI

ITSSA 7/CHNY/2013

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1878 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 11-02-2016
• Assessment Year: misc
• Appeal Filed On: 05-04-2013
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA
• Keywords: Block assessment
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . ! ' , # '$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER IT(SS)A NO. 7/MDS/2013 BLOCK PERIOD FROM 1989-90 TO 1998-99 AND 1.4.1998 T O 11.2.1999 SHRI N.R.DHANAPALAN, #35, RAMASAMY STREET, SRI DEVI KARUMARIAMMAN NAGAR, VALASARAVAKKAM, CHENNAI 600 087. PAN AFAPD6469D ( /APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-V(I), CHENNAI - 34. RESPONDENT) / APPELLANT BY : SHRI PHILIP GEORGE / RESPONDENT BY : SHRI PATHLAVATH PEERYA, CIT / DATE OF HEARING : 11.02.2016 / DATE OF PRONOUNCEMENT : 06.04.2016 % / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 31 .12.2012. - - IT(SS)A 7/13 2 2. THE FIRST GROUND IN THIS APPEAL IS WITH REGARD T O THE VALIDITY OF THE BLOCK ASSESSMENT ORDER OF THE ASSESSING OFFI CER. 3. AT THE TIME OF HEARING, THE LD. AR DID NOT PRESS THIS GROUND. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. 4. THE NEXT GROUND IN THIS APPEAL IS THAT THE COMMI SSIONER OF INCOME-TAX(APPEALS) OUGHT TO HAVE APPRECIATED TH AT ADDITION OF ` 17,50,008/- WAS ADDED BOTH IN REGULAR ASSESSMENT F OR THE ASSESSMENT YEAR 1999-2000 AND FOR THE BLOCK PERIOD 1989-90 TO 11.02.1999 AND SUFFERED DOUBLE TAXATION. 5. THE FACTS OF THE ISSUE ARE THAT THERE WAS SEARCH U/S.132 OF THE ACT AT THE RESIDENTIAL PREMISES OF THE ASSES SEE ON 11.2.1999. CONSEQUENTLY, ASSESSMENT WAS MADE U/S.1 58BC OF THE ACT, AGAINST WHICH THE ASSESSEE WENT IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX(APPEALS) AS WELL AS BEFO RE THE TRIBUNAL. THE TRIBUNAL SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMITTED THE MATTER BACK TO THE FIL E OF THE AO WITH DIRECTION TO COMPLETE THE ASSESSMENT DE NOVO VIDE O RDER DATED 31.8.2006 IN IT(SS)A NO.135/MDS/2002. - - IT(SS)A 7/13 3 6. BEFORE THE ASSESSING OFFICER, WHILE PASSING THE BLOCK ASSESSMENT U/S.158BC OF THE ACT, THE ASSESSEE HAS T AKEN A PLEA THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE ISSUE REGARDING FILM BUSINESS LOSS ` 72,59,225/- AND THE AO MADE THE FOLLOWING OBSERVATIONS FOR DISALLOWING THE SAME : 1. DURING THE BLOCK ASSESSMENT PROCEEDING, THE THEN ASSESSING OFFICER HAS NOT CONSIDERED THE FILM LOSS AS CLAIMED BY THE ASSESSEE. 2.CIT(A) HAS SUMMARILY REJECTED THE ASSESSE'S FILM LOSS CLAIM STATING, 'THERE IS NO MERIT IN THE GROUN D AS THE ASSESSING OFFICER COMPUTED THE UNDISCLOSED INCOME ON THE NET ASSET BASIS'. 3.ITAT ORDER FOR THE AY1998-99 HAS GIVEN ITS VERDIC T ONLY ON THE ISSUE OF THE SAME INCOME BEING TAXED TWICE BUT IT DID NOT SAY ANYTHING ABOUT THE FILM LO SS. 4.THOUGH THE ASSESSEE STATES THAT THE FILM LOSS WAS NOT CONSIDERED DURING BLOCK ASSESSMENT PROCEEDING BY THE THEN ASSESSING OFFICER, THERE IS NO ANY EVIDENCE TO HIGHLIGHT THAT THE ASSESSE FILM LOSS WAS REJECTED BY THEN ASSESSING OFFICER. 5.IT IS A NEW ISSUE RAISED BY THE ASSESSE IN THE SET ASIDE PROCEEDING. SINCE IT IS A NEW ISSUE, THE AO DOES NOT HAVE ANY LOCUS STANDI TO CONSIDER THE FILM - - IT(SS)A 7/13 4 LOSS, WHICH DOES NOT FORM PART OF THE BLOCK ASSESSMENT. AGAINST THIS, THE ASSESSEE CARRIED THE MATTER BEFOR E THE CIT(APPEALS) . THE CIT(APPEALS) OBSERVED THAT THE ASSESSEE HAS NOT AGITATED THE ISSUE RELATING TO FILM BUSINES S LOSS BEFORE THE TRIBUNAL IN IT(SS)A NO.135/MDS/2011 AND THERE WAS NO FINDING ON THIS ISSUE. FURTHER, THE CIT(APPEALS) O BSERVED THAT THIS ISSUE WAS NOT BEFORE THE TRIBUNAL ON EARLIER O CCASION AND HE CANNOT CONSIDER THIS ISSUE, WHICH IS NOT SUBJECT MA TTER OF APPEAL BEFORE THE TRIBUNAL WHILE DECIDING THE ISSUE. AGGR IEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE ARE OF THE VIEW THAT THE LE GAL GROUND RAISED BY THE ASSESSEE IS WELL FOUNDED AS NO RESTRICTION OR LIMITATION HAS BEEN RAISED BY THE TR IBUNAL ON THE APPELLATE POWER OF THE COMMISSIONER. WHEN HE ENTERTAINS AN APPEAL UNDER THE PROVISIONS OF THE AC T, THE CIT(APPEALS) IS, AS COMPETENT AS THE AO IS IN RELAT ION TO ALL MATTERS CONCERNING THE ASSESSMENT WHICH ARE WIT HIN THE SCOPE OF THE ASSESSING OFFICER WHILE MAKING THE - - IT(SS)A 7/13 5 ASSESSMENT. THE SCOPE OF THE APPELLATE POWER UNDER THE INCOME-TAX ACT WAS CONSIDERED BY THE APEX COURT IN THE CASES OF CIT VS. KANPUR COAL SYNDICATE [1964] 53 ITR 225; JU TE CORPORATION OF INDIA LTD. VS. CIT [1991] 187 ITR 68 8 (SC) AND CIT VS. NIRBHERAM DALURAM [1997] 224 ITR 610 (SC). THE POWER OF THE APPELLATE AUTHORITY IS WIDE AS THAT OF THE A SSESSING OFFICER IS EMPHATICALLY STATED IN THESE DECISIONS. IN THE C ASE OF KANPUR COAL SYNDICATE [1964] 53 ITR 225 (SC), THE APEX COU RT DEALT WITH SECTIONS 3, 31(3)(B), (4), 33(4) OF THE INDIAN INCO ME-TAX ACT, 1922, WHICH IS SIMILAR TO SECTION 251(1)(A) OF THE INCOME-TAX ACT, 1961. THE APEX COURT IN THAT CASE OBSERVED THAT THE APPELLATE ASSISTANT COMMISSIONER HAS PLENARY POWERS IN DISPOS ING OF AN APPEAL. THE SCOPE OF HIS POWER IS COTERMINOUS WITH THAT OF THE INCOME-TAX OFFICER. HE CAN DO WHAT THE INCOME-TAX O FFICER CAN DO AND ALSO DIRECT HIM TO DO WHAT HE HAS FAILED TO DO. IN THE CASE OF JUTE CORPORATION OF INDIA LTD. [1991] 187 ITR 68 8 THE APEX COURT HELD THAT THE INCOME-TAX ACT DID NOT PLACE AN Y RESTRICTION OR LIMITATION ON THE EXERCISE OF APPELLATE POWER. EVEN OTHERWISE, THE APPELLATE AUTHORITY, WHILE HEARING THE APPEAL AGAIN ST THE ORDER OF A SUBORDINATE AUTHORITY, HAS ALL THE POWERS WHICH T HE ORIGINAL - - IT(SS)A 7/13 6 AUTHORITY MAY HAVE IN DECIDING THE QUESTION BEFORE IT SUBJECT TO THE RESTRICTIONS OR LIMITATIONS, IF ANY, PRESCRIBED BY THE STATUTORY PROVISIONS. IN THE ABSENCE OF ANY RESTRICTION OR LI MITATION PRESCRIBED BY STATUTORY PROVISION, THE APPELLATE AU THORITY IS VESTED WITH ALL THE PLENARY POWERS WHICH THE SUBORD INATE AUTHORITY MAY HAVE IN THE MATTER. THE LAW LAID DOWN IN THOSE TWO DECISIONS WAS REITERATED BY THE APEX COURT IN THE C ASE OF CIT VS. NIRBHERAM DALURAM [1997] 224 ITR 610. 8. THE ACT PROVIDES THAT THE COMMISSIONER (APPEALS) 'MAY PASS SUCH ORDER AS HE THINKS FIT WHICH MAY INCLUDE AN ORDER ENHANCING THE ASSESSMENT OR PENALTY'. THE PROVISO T HEREUNDER REQUIRES THE COMMISSIONER TO GIVE REASONABLE OPPORT UNITY TO THE ASSESSEE TO SHOW CAUSE AGAINST ANY PROPOSED ENHANCE MENT OF THE ASSESSMENT OR PENALTY. THERE IS NO OTHER RESTRI CTION PLACED UPON THE POWERS OF THE COMMISSIONER (APPEALS). THE COMMISSIONER (APPEALS), WHEN HE ENTERTAINS THE APPE AL UNDER THE PROVISIONS OF THE INCOME-TAX ACT, IS, THEREFORE , COMPETENT AS THE INCOME-TAX OFFICER IS, IN RELATION TO ALL MATTE RS CONCERNING THE ASSESSMENT ARE WITHIN THE SCOPE OF THE INCOME-TAX OFFICER WHILE MAKING THE ASSESSMENT. - - IT(SS)A 7/13 7 9. THIS ACTION OF THE COMMISSIONER IN REJECTING THE CONTENTION IS AGAINST THE WELL-RECOGNIZED PRINCIPLE OF LAW, AS AFORESAID. THE COMMISSIONER OUGHT TO HAVE GIVEN AN OPPORTUNITY TO PLACE THE MATERIALS AS REQUIRED UNDER THE RULES AND OUGHT TO HAVE ADJUDICATED THE ISSUE WITHOUT REJECTING THE SA ME ON THE PREMISE THAT IT HAS NOT BEEN TAKEN BEFORE. THE ACTI ON OF THE APPELLATE AUTHORITY, IN REJECTING THE GROUND AS NOT BEING TAKEN BEFORE THE LOWER AUTHORITY, IS NOTHING BUT NEGATION OF THE POWER THAT VESTS WITH HIM AND ALSO AGAINST THE WELL-RECOG NIZED PRINCIPLES OF LAW. THE ORDER OF THE APPELLATE AUTHO RITY HAS BEEN AFFIRMED BY THE TRIBUNAL. HENCE, WE ARE OF THE VIEW THAT THE ASSESSEE HAS TO SUCCEED ON THAT GROUND. THERE IS A LINE OF DECISIONS TO SHOW THAT THE POWER OF THE APPELLATE A SSISTANT COMMISSIONER/COMMISSIONER (APPEALS) IS COTERMINOUS WITH THAT OF THE ASSESSING OFFICER AND THEY ARE CWT VS. PRASA D PRODUCTIONS P. LTD. [2003] 259 ITR 88 (MAD), TRAVAN CORE ELECTRO CHEMICAL INDUSTRIES LTD. VS. CIT [1998] 229 ITR 272 (KER), SMT. PRABHAVATI S. SHAH VS. CIT [1998] 231 ITR 1 (BOM) A ND SMT. VIJAYKUNVERBA VS. CIT [1994] 208 ITR 312 (GUJ). IN VIEW OF THIS, - - IT(SS)A 7/13 8 WE DIRECT THE CIT(APPEALS), TO ADJUDICATE THE ABOVE GROUND IN ACCORDANCE WITH LAW. 10. THE NEXT GROUND IN THIS APPEAL IS WITH REGARD T O ADDITION OF ` 17,50,008/- IN THE REGULAR ASSESSMENT FOR THE ASST . YEAR 1999-2000 AND ONCE AGAIN IN THE BLOCK ASSESSMENT PE RIOD FROM 1989-1990 TO 11.2.1999. 11. THE FACTS OF THE ISSUE ARE THAT AN AMOUNT OF ` 17,50,008/- WAS TAXED IN THE PREVIOUS ASSESSMENT FOR THE ASST. YEAR 1998-99 RELEVANT TO THE ASST. YEAR 1999-2000 AND THE SAME W AS CONSIDERED FOR ADDITION IN THE BLOCK PERIOD FROM 19 89-90 TO 11.2.1999 WHICH AMOUNTS TO DOUBLE TAXATION. THE CI T(APPEALS) HAS PLACED RELIANCE ON THE JUDGMENT OF THE BOMBAY H IGH COURT IN THE CASE OF HERCILLIA CHEMICALS LTD. V. CIT (221 ITR 194), WHEREIN IT WAS HELD AS FOLLOWS : ..THOUGH AN APPEAL IS MAINTAINABLE FROM THE FRESH ORDER PASSED BY THE INCOME-TAX OFFICER TO GIVE EFFECT TO A REVISIONAL ORDER OR AN APPELLATE ORDER, ONLY SUCH ISSUES CAN BE AGITATED IN SUCH APPEAL WHICH HAVE NOT ATTAINED FINALITY BY VIRTUE OF EARLI ER ORDERS OF THE REVISIONAL OR APPELLATE AUTHORITIES. IT IS - - IT(SS)A 7/13 9 NOT OPEN IN SUCH AN APPEAL TO AGITATE ANY POINT WHICH HAS ALREADY BEEN DECIDED BY THE REVISIONAL OR THE APPELLATE AUTHORITIES IN THEIR ORDER. IN VIEW OF THIS, THE CIT(APPEALS) DISMISSED THE GRO UND OF APPEAL OF THE ASSESSEE. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 12. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE AMOUNT OF ` 17,50,008/- IS ALREADY TAXED IN THE ASST. YEAR 1999-2000 VIDE ASSESSMENT ORDER DATED 22 .3.2005 PASSED U/S.143(3) READ WITH SEC.263 OF THE ACT. TH IS ORDER OF THE ASSESSMENT WAS SUBJECT MATTER BEFORE THE CIT(APPEAL S). THE CIT(APPEALS) VIDE ORDER DATED 31.12.2012 OBSERVED T HAT THE ASSESSMENT ORDER GIVING EFFECT TO THE ORDER OF THE CIT U/S. 263 CANNOT BE APPEALED AGAINST BEFORE HIM AND HE DISMIS SED THE APPEAL OF THE ASSESSEE. THUS, IT MEANS THAT AN AMO UNT OF ` 17,50,008/- WAS ALREADY CONSIDERED FOR ADDITION IN REGULAR ASSESSMENT YEAR 1999-2000 CONSEQUENT TO THE ORDER P ASSED U/S.263 OF THE ACT. BEING SO, THE SAME AMOUNT CANN OT BE CONSIDERED IN THE BLOCK ASSESSMENT WHICH AMOUNTS TO DOUBLE ADDITION. ACCORDINGLY, THIS ADDITION IS DELETED. - - IT(SS)A 7/13 10 13. AS FAR AS THE ISSUE OF LEVY OF INTEREST U/S.158BFA OF THE ACT IS CONCERNED, IT IS MANDATORY, CONSEQUENTIAL IN NATURE AND, THEREFORE, TO BE COMPUTED ACCORDINGLY. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 6 TH OF APRIL, 2016 AT CHENNAI. SD/- SD/- ( ! ) ( '#$ % ) & '()(* +,-(./ 01(*2.( '334(.5/ 6 7 89 /JUDICIAL MEMBER 89 :;;3,*<(*< =>-?>. '6 /CHENNAI, @8# /DATED, THE 6 TH APRIL, 2016. MPO* A8B 7CD ED /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. A A F / /CIT(A) 4. A A F /CIT 5. DGH 77IJ /DR 6. HKL M /GF.