The ITO, Cochin V. Sri.Joseph Philip, Cochin

MA 14/COCH/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5338 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Department
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 17-01-2017
• Court: TRIBUNAL
• Department Lawyers: A DHANARAJ
• Assessee Lawyers: A S NARAYANA MURTRY
• Keywords: Difference of opinion; Change of opinion
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : COCHIN BENCH : KOCHI. [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMB ER AND SHRI GEORGE GEORGE. K., JUDICIAL MEMBER] M.P.NOS.11, 12, 13, 14, 15 & 16/COCH/2017 ( ./I.T.A. NOS.409, 410, 411, 412, 413 & 414/COCH/201 5.) / ASSESSMENT YEARS : 2000-2001 TO 2005-2006. INCOME TAX OFFICER, WARD 1(2), NON CORPORATE RANGE -1, KOCHI. VS. SHRI. JOSESPH PHILIP RECCA ENCLAVE, PADAMUGAL, VAZHAKKALA. [PAN ABOPP 7516P] ( APPELLANT ) ( /RESPONDENT) PETITIONER BY : SHRI. A. DHANARAJ, SR.DR , RESPONDENT BY : SHRI. A.S. NARAYANA MURTRY, C.A. /DATE OF HEARING : 2 4 - 03 - 201 7 /DATE OF PRONOUNCEMENT : 24 - 03 - 201 7 ! ! ! ! / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER THROUGH THESE MISCELLANEOUS PETITIONS FILED BY TH E DEPARTMENT IT SEEK RECTIFICATION OF THE ORDER PASSE D BY THIS TRIBUNAL IN ITA NOS.409 TO 414/COCH/2015 ON 21.06.2016. M.P. NOS. 11 TO 16/COCH/2017 ( IN ITA NOS. 409 TO 414/COCH/2015) :- 2 -: 2. LD. COUNSEL FOR THE REVENUE SUBMITTED THAT THE TRIB UNAL WHILE GIVING THE DECISION IGNORED THE FINDINGS OF T HE LD. COMMISSIONER OF INCOME TAX (APPEALS) THAT ASSESSMENT ORDERS WERE DISPATCHED ON 31.12.2010. AS PER LD. DR THERE WAS A SPECIFIC ST AMP IN THE ASSESSMENT ORDERS WHICH PROVED THE DATE OF PASSING SUCH ORDERS. AS PER LD. DR DISPATCH REGISTER PRODUCED BY THE DEPAR TMENT CLEARLY SHOW THAT THE ASSESSMENT ORDERS WERE DISPATCHED ON 31.1 2.2010 WITHIN THE TIME LIMIT AND THEREFORE THE FINDING OF THE TRIBUN AL THAT ASSESSMENT ORDERS WERE BARRED BY LIMITATION WAS CLEARLY A MIS TAKE APPARENT ON RECORD. HE ALSO PLACED ON RECORD A COPY OF THE DIS PATCH REGISTER ON 31.12.2010 IN SUPPORT OF ITS CASE. FURTHER, AS PER LD. DR DISPATCH REGISTER AS ON 12.04.2011 CLAIMED BY ASSESSEE TO BE THE DATE ON WHICH THE ORDERS WERE DISPATCHED, PROVED THAT ONLY COPIES OF THE ORDERS WERE GIVEN ON THAT DAY. ACCORDING TO HIM, T HEREFORE THE TRIBUNAL HAD TO MODIFY ITS ORDER DATED 21.06.2016 W HERE IT HELD THAT ASSESSMENT WERE TIME BARRED. 3. PER CONTRA, LD. AUTHORIZED REPRESENTATIVE STRONGLY SUPPORTING THE ORDER OF THE TRIBUNAL SUBMITTED THAT THERE WAS NO ERROR APPARENT ON RECORD WARRANTING A RECTIFICATION. M.P. NOS. 11 TO 16/COCH/2017 ( IN ITA NOS. 409 TO 414/COCH/2015) :- 3 -: 4. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE ORDERS OF LOWER AUTHORITIES AS WELL AS THE TRIBUNAL ORDER. CONTENTI ON OF THE DEPARTMENT IS THAT DISPATCH REGISTER FOR 31.12.2010 CLEARLY S HOW THAT ASSESSMENT ORDERS WERE DISPATCHED ON 31.12.2010. ARGUMENTS TAK EN BY THE ASSESSEE DURING THE PROCEEDINGS BEFORE THIS TRI BUNAL IS REPRODUCED HEREUNDER:- 4 THE LD COUNSEL FOR THE ASSESSEE ARGUED THAT THE ASSESSEE IS A MANAGING PARTNER IN THE FIRM M/S SKYLINE BUILDERS WHERE SEARCH WAS CONDUCTED AT THE PREMISES OF THE FIRM AND ALSO RESIDENTIAL HOUSES OF THE PARTNERS. ACCORDINGLY, THE ASSESSMENT WAS FRAMED. THE CIT SET ASIDE THE ASSESSMENT U/S 263 OF THE ACT BECAUSE CERTAIN DOCUMENTS WERE NOT SEEN BY THE AO AND ACCORDINGLY THE CIT HELD THAT THE SAME IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ISSUE IS TWO-FOLD ONE IS LEGAL ISSUE AND THE OTHER ONE IS FACTUAL ASPECT. 5 THE LD COUNSEL FOR THE ASSESSEE, AT THE OUTSET ARGUED THAT HE HAS A STRONG CASE ONLY ON LEGAL ISSUE AND THE ASSESSMENT IS TIME BARRED SINCE THE ASSESSMENT ORDER WAS DISPATCHED ON 12.4.2011 WHEREAS IT SHOULD HAVE BEEN DISPATCHED BY 31 ST DECEMBER 2010 I.E. AFTER ELAPSE OF NINE MONTHS FROM 31.3.2010. HE RELIED ON THE JUDGMENTS OF THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT VS SREE NARAYANA CHANDRIKA TRUST REPORTED IN (1995) 212 ITR 0456 AND IN THE CASE OF COMMISSIONER OF AGRICULTURAL INCOME TAX VS KAPPUMALAI ESTATE REPORTED IN (1998) 234 ITR 0187 IN THIS REGARD. 5.1 ON THE OTHER HAND, THE LD DR ARGUED THAT AS PER THE DISPATCH REGISTERED PRODUCED, THE ASSESSMENT ORDER DISPATCHED WAS 31 ST DEC 2010. M.P. NOS. 11 TO 16/COCH/2017 ( IN ITA NOS. 409 TO 414/COCH/2015) :- 4 -: THE FINDINGS OF THE TRIBUNAL AS IT APPEARS AT PARA 6 & 7 IS REPRODUCED HEREUNDER:- 6 I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. I AGREE WITH THE CONTENTIONS OF THE LD COUNSEL OF THE ASSESSEE WHO RELIED ON TWO DECISIONS OF THE HONBLE KERALA HIGH COURT IN THE CASE OF SREE NARAYANA CHANDRIKA TRUST (SUPRA) AND IN THE CASE OF COMMISSIONER OF AGRICULTURAL INCOME TAX VS KAPPUMALAI ESTATE (SUPRA). THE RELEVANT PORTIONS OF THE JUDGMENT IN THE CASE OF SREE NARAYANA CHANDRIKA TRUST (SUPRA) READ AS UNDER: WE SHALL NOW DEAL WITH THE OTHER REFERENCES AND APPLICATIONS UNDER SECTION 256(2) WHICH HAVE BEEN HEARD ALONG WITH THESE REFERENCES. THE QUESTIONS REFERRED FOR THE YEAR 1978-79 ARE SIMILAR, EXCEPT THAT ONE FURTHER QUESTION HAS BEEN REFERRED AT THE INSTANCE OF THE ASSESSEE, NAMELY, 'WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE APPELLATE TRIBUNAL WAS RIGHT IN HOLDING THAT THE ORDER OF THE COMMISSIONER OF INCOME-TAX PASSED UNDER SECTION 263 IS NOT BARRED BY LIMITATION'. WE SHALL DEAL WITH THIS QUESTION WHICH ARISES IN INCOME-TAX REFERENCES NOS. 81 AND 82 OF 1986 RELATING TO THIS YEAR. THE INCOME-TAX OFFICER MADE AN ORDER OF ASSESSMENT ON JANUARY 12, 1981, HOLDING THAT INCOME ACCRUING TO THE ASSESSEE-TRUST FROM THE FIRMS OF WHICH IT WAS A PARTNER WAS EXEMPT UNDER SECTION 10(22A), AS INCOME ACCRUING TO THE HOSPITAL, DEVIATING FROM THE STAND TAKEN BY HIM EARLIER. THE COMMISSIONER OF INCOME-TAX TOOK UP THE MATTER IN REVISION UNDER SECTION 263 AND SET ASIDE THE ORDER OF ASSESSMENT. THE REVISIONAL ORDER WAS PASSED ON JANUARY 11, 1983, AND COMMUNICATED WITHIN A PERIOD OF SIX DAYS THEREAFTER. THE QUESTION WAS WHETHER THE EXERCISE OF THE M.P. NOS. 11 TO 16/COCH/2017 ( IN ITA NOS. 409 TO 414/COCH/2015) :- 5 -: REVISIONAL POWER WAS BARRED BY TIME. THE TRIBUNAL HELD OTHERWISE AND SUSTAINED THE ORDER. IT IS IN THESE CIRCUMSTANCES THAT THE ADDITIONAL QUESTION HAS BEEN REFERRED. SUB-SECTION (2) OF SECTION 263 AS IT STOOD AT THE RELEVANT TIME, PRESCRIBED THAT NO ORDER SHALL BE MADE UNDER SUB-SECTION (1) OF THE SECTION AFTER THE EXPIRY OF TWO YEARS FROM THE DATE OF THE ORDER SOUGHT TO BE REVISED. THE TRIBUNAL WAS OF THE VIEW THAT THE COMMISSIONER HAD PASSED HIS ORDER WITHIN THE TIME PRESCRIBED, THOUGH IT WAS COMMUNICATED LATER. THE QUESTION AS TO WHEN AN ORDER CAN BE STATED TO HAVE BEEN MADE WAS THE SUBJECT OF CONSIDERATION BY THIS COURT IN GOVERNMENT WOOD WORKSHOP V. STATE OF KERALA [1988] 69 STC 62 ; [1987] 1 KLT 804 IN WHICH THIS COURT STATED, AFTER RELYING ON VARIOUS DECISIONS OF THE SUPREME COURT CULMINATING IN B. J. SHELAT V. STATE OF GUJARAT, AIR 1978 SC 1109, AS FOLLOWS (AT PAGE 69) : ' THE ORDER OF ANY AUTHORITY CANNOT BE SAID TO BE PASSED UNLESS IT IS IN SOME WAY PRONOUNCED OR PUBLISHED OR THE PARTY AFFECTED HAS THE MEANS OF KNOWING IT. IT IS NOT ENOUGH IF THE ORDER IS MADE, SIGNED, AND KEPT IN THE FILE, BECAUSE SUCH ORDER MAY BE LIABLE TO CHANGE AT THE HANDS OF THE AUTHORITY WHO MAY MODIFY IT, OR EVEN DESTROY IT, BEFORE IT IS MADE KNOWN, BASED ON SUBSEQUENT INFORMATION, THINKING OR CHANGE OF OPINION. TO MAKE THE ORDER COMPLETE AND EFFECTIVE, IT SHOULD BE ISSUED, SO AS TO BE BEYOND THE CONTROL OF THE AUTHORITY CONCERNED, FOR ANY POSSIBLE CHANGE OR MODIFICATION THEREIN. THIS SHOULD BE DONE WITHIN THE PRESCRIBED PERIOD, THOUGH THE ACTUAL SERVICE OF THE ORDER MAY BE BEYOND THAT PERIOD. ' THE TRIBUNAL HAS NOT REFERRED TO THIS DECISION THOUGH IT IS RELEVANT. WE FEEL THAT THE MATTER M.P. NOS. 11 TO 16/COCH/2017 ( IN ITA NOS. 409 TO 414/COCH/2015) :- 6 -: HAS NOT BEEN CONSIDERED BY THE TRIBUNAL IN THE MANNER IN WHICH IT SHOULD HAVE BEEN, PARTICULARLY AFTER ADVERTENCE TO THE AFORESAID DECISION. WE, THEREFORE, DECLINE TO ANSWER THE ADDITIONAL QUESTION REFERRED AT THE INSTANCE OF THE ASSESSEE IN INCOME-TAX REFERENCES NOS. 81 AND 82 OF 1986. 6.1 IN THE CASE OF COMMISSIONER OF AGRICULTURAL INCOME TAX VS KAPPUMALAI ESTATE(SUPRA), THE HONBLE HIGH COURT HELD AS UNDER: SECTION 35(2) PROVIDES THAT NO ORDER OF ASSESSMENT UNDER SECTION 18 OR OF ASSESSMENT OR REASSESSMENT UNDER SUB-SECTION (1) OF SECTION 35 SHALL BE MADE AFTER THE EXPIRY OF FIVE YEARS FROM THE END OF THE YEAR FROM WHICH THE AGRICULTURAL INCOME WAS FIRST ASSESSABLE. FOR THE YEAR 1979-80, IT IS SEEN THAT THE ASSESSMENT ORDER IS DATED MARCH 13, 1985, IT WAS DES PATCHED ON APRIL 22, 1985, AND RECEIVED BY THE ASSESSEE ON APRIL 26, 1985. THE ASSESSMENT ORDER FOR THE YEAR 1980-81 WAS DATED MARCH 24, 1986, WAS DISPATCHED ON DECEMBER 2, 1986, AND WAS RECEIVED BY THE ASSESSEE ON DECEMBER 5, 1986. BY APPLYING THE PRINCIPLES LAID DOWN BY THIS COURT IN GOVERNMENT WOOD WORKS V. STATE OF KERALA [1988] 69 STC 62 AND IN AN EARLIER DECISION OF A BENCH OF THIS COURT IN MALAYIL MILLS V. STATE OF KERALA (T. R. C. NOS. 15 AND 16 OF 1981), IT HAS TO BE TAKEN THAT FOR BOTH THE YEARS THE ASSESSMENT ORDER HAD NOT BEEN MADE WITHIN THE PERIOD PRESCRIBED UNDER SECTION 35(2). THIS COURT HAD TAKEN THE VIEW THAT TO MAKE THE ORDER COMPLETE AND EFFECTIVE IT SHOULD BE ISSUED SO AS TO BE BEYOND THE CONTROL OF THE AUTHORITY CONCERNED, FOR ANY POSSIBLE CHANGE OR MODIFICATION. THIS SHOULD BE DONE WITHIN THE PRESCRIBED PERIOD, THOUGH THE ACTUAL SERVICE OF THE ORDER MAY BE BEYOND THAT PERIOD. FOR BOTH THE YEARS THE ASSESSMENT ORDERS WERE DISPATCHED AFTER THE PERIOD OF FIVE YEARS PRESCRIBED UNDER SECTION 35(2) . IN THE LIGHT OF THE ABOVE, WE ANSWER THE QUESTION IN THE NEGATIVE, IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. M.P. NOS. 11 TO 16/COCH/2017 ( IN ITA NOS. 409 TO 414/COCH/2015) :- 7 -: 7 IN THIS VIEW OF THE MATTER AND THE DECISIONS RELIED UPON BY THE LD COUNSEL FOR THE ASSESSEE IN THE CASE OF SREE NARAYANA CHANDRIKA TRUST (SUPRA) AND IN THE CASE OF COMMISSIONER OF AGRICULTURAL INCOME TAX VS KAPPUMALAI ESTATE (SUPRA), I AM OF THE OPINION THAT THE ASSESSMENT IS TIME BARRED AND THEREFORE, THE ASSESSMENT MADE IS DIRECTED TO BE QUASHED. ACCORDINGLY, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED ON LEGAL ISSUE. THE VIEW TAKEN BY THE TRIBUNAL WAS THAT ASSESSMENT ORDERS WERE TIME BARRED. A VERIFICATION OF THE DISPATCH REGISTER FO R 31.12.2010 NOW PRODUCED BEFORE US, SHOW THAT WHAT WAS DISPATCHED BY THE DEPARTMENT ON THAT DATE WAS ASSESSMENT ORDER FOR A SSESSMENT YEAR 2007-2008 WHEREAS THE IMPUGNED ASSESSMENT YEARS WER E 2000-2001 TO 2005-2006. FURTHER, A COPY OF THE DISPATCH REGI STER FOR 12.04.2011 CLEARLY SHOW THAT THE DISPATCH OF THE ORDERS FOR TH E IMPUGNED ASSESSMENT YEARS ALONGWITH CHALLAN WERE EFFECTED ON 12.04.2011. JUST BECAUSE VALUE OF THE STAMPS WERE NOT MENTIONE D WOULD NOT SUFFICIENT TO COME TO A CONCLUSION THAT WHAT WERE D ISPATCHED WERE ONLY COPIES OF THE ASSESSMENT ORDERS AND NOT THE ORIGINA L ASSESSMENT ORDERS. THUS, IN OUR VIEW THERE WAS NO MISTAKE IN THE ORDER OF THE TRIBUNAL WHEN IT HELD THAT THE DISPATCH OF THE IMP UGNED ASSESSMENT ORDERS WERE AFTER 31.12.2010. WE DO NOT FIND ANY M ISTAKE IN THE ORDER OF THE TRIBUNAL MUCH LESS ANY MISTAKE APPARENT ON T HE RECORD. IN OUR M.P. NOS. 11 TO 16/COCH/2017 ( IN ITA NOS. 409 TO 414/COCH/2015) :- 8 -: OPINION THE MISCELLANEOUS PETITIONS FILED BY THE DE PARTMENT CARRY NO MERITS. 5. IN THE RESULT, THE MISCELLANEOUS PETITIONS FILED B Y THE DEPARTMENT ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24-03-2017. SD/ - ( GEORGE GEORGE. K) ' ' ' ' # # # # / JUDICIAL MEMBER SD/ - (ABRAHAM P. GEORGE) # # # # / ACCOUNTANT MEMBER COCHIN % / DATED: 24TH MARCH, 2017 KV ! & ' & / COPY TO: ! & ' & / COPY TO: 1 . APPELLANT 3. ( () / CIT(A) 5. &+, / DR 2. / RESPONDENT 4. ( / CIT 6. ,- . / GF BY ORDER . (ASSISTANT REGISTRAR I.T.A.T., COCHIN.