Deputy Commissioner of Income Tax Circle 1(1), Jabalpur V. Shri Sunil Kumar Jain, Jabalpur

MA 18/JAB/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4973 (ITAT-JABALPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-03-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 26-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection
• Section: 154; 143(3)

Judgement Text

MA No. 18/Jab/2019 (AY 2014-15) Dy. CIT v. Sunil Kumar Jain 1 IN THE INCOME TAX APPELLATE TRIBUNAL, JABALPUR BENCH, JABALPUR (through Virtual Hearing) BEFORE SH. SANJAY ARORA, HON'BLE ACCOUNTANT MEMBER & SH. MANOMOHAN DAS, HON’BLE JUDICIAL MEMBER MA No.18/JAB/2019 A/o ITA No. 54/JAB/2019 Assessment Year: 2014-15 Deputy Commissioner of Income Tax Circle-1(1), Jabalpur vs. Sh. Sunil Kumar Jain, Jabalpur [PAN: ACMPJ 0613L] (Applicant) (Respondent) Appellant by Sh. S.K. Halder, Sr. DR Respondent by Sh. Manoj Jain, FCA Date of hearing 18/02/2022 Date of pronouncement 16/03/2022 ORDER Per Bench This is a Miscellaneous Application (MA) by the Revenue directed against the Order under section 254(1) of the Income Tax Act, 1961 (‘the Act’ hereinafter) dated 23/8/2019 in the captioned appeal, whereby it contests the allowance of the Assessee’s appeal agitating his assessment u/s. 143(3) dated 21/12/2016 for assessment year (AY) 2014-15 by the first appellate authority vide order dated 08/3/2019. 2. Per the instant MA, the Revenue raises the issue of maintainability of its’ captioned appeal, dismissed in limini per the impugned order for being covered u/s. 268A(1) of the Act. The reason stated by it is of its’ appeal having been filed on the acceptance of a revenue audit objection and, accordingly, excepted under para 10(c) of the Board Instruction 03/2018, dated 11/7/2018. Copy of the MA No. 18/Jab/2019 (AY 2014-15) Dy. CIT v. Sunil Kumar Jain 2 Revenue Audit Objection (RAO) dated 17/5/2017 is placed on record to exhibit the same. The assessee, though admits of the audit objection, yet contends that the Revenue’s appeal under reference is not covered by the exception aforesaid. 3. We have heard the parties, and perused the material on record. Inasmuch as liberty was provided to the parties by the Tribunal per the impugned order itself to move it in case it is claimed that an appeal/cross objection dismissed summarily thereby, i.e., without affording any opportunity of being heard, as required u/s. 254(1), is not covered u/s. 268A(1), the instant MA, as well as the RAO furnished in support, was admitted. The assessee, in contesting the Revenue’s petition u/s. 254(2), does not dispute the factum of a revenue audit objection having been raised in his case and accepted by the Revenue, but of the same being not the reason for, or the issue raised and disputed per, the instant appeal, so as to be excepted by the Board Instruction supra, as the RAO under reference had since attained finality. As explained, as well as borne out by the record, the assessment in the first instance was framed u/s. 143(3) on 21/12/2016 by estimating the profit of the assessee’s business at 1.5% of the disclosed turnover, at rs. 98,50,263, as against the returned loss of rs. 20,25,628. In doing so, the Assessing Officer (AO) allowed set-off of the returned loss, and assessed the income at rs. 78,24,635. This was clearly a mistake inasmuch as, once the income stands estimated by rejecting the assessee’s accounts, the same would substitute the returned income (loss), whatever it may be. This mistake, brought forth by the revenue audit party, was given effect to by the AO vide order u/s. 154 dated 22/01/2018 (copy on record) after hearing the assessee. The assessee, who accepted the said rectification, had in the mean while appealed against the rejection of his declared income and, consequently, estimation of income u/s. 145(3), before the first appellate authority, who decided in his favour vide order dated 08/03/2019. It is this decision that was appealed against by the Revenue before the Tribunal. Clearly, therefore, the issue raised in audit objection, i.e., the set off of the returned loss of rs. 20.26 lacs, was not before MA No. 18/Jab/2019 (AY 2014-15) Dy. CIT v. Sunil Kumar Jain 3 the Tribunal; in fact, survived no longer. Para 10(c) of the Board Instruction 03/2018 only saves the a Revenues’ appeal from being ousted on account of low tax-effect u/s. 268A(1), where it contests the income assessed pursuant to the revenue audit objection on merits. This is clearly not the case in the instant case. In fact, an eligible RAO (u/p 10(c) of BI # 03/2018) would be prior to the date of the assessment (or order) under appeal. The order u/s. 154 dated 22/01/2018 giving effect to the RAO was not under challenge before the Tribunal per the captioned appeal, which is thus not, as contended, excepted by para 10(c) of the Board Instruction 03/2018 (supra). The Revenue’s MA, filed mechanically, deserves to be dismissed. We, accordingly, decline interference. 4. In the result, the Revenues’ MA is dismissed. Order pronounced in the Open Court on March 16, 2022 Sd/- sd/- (Manomohan Das) (Sanjay Arora) Judicial Member Accountant Member Dated: 16/03/2022 Copy of the Order forwarded to: 1. The Appellant: Deputy Commissioner of Income Tax, Circle 1(1) Jabalpur (M.P.) 2. The Respondent: Shri Sunil Kumar Jain, Prop. M/s. Danpati Capital Market & Danpati Anaj Bhandar, 630, Gole Bazar, Jabalpur (M.P.) 3. CIT(Appeals)-1, Jabalpur (M.P.) 4. Pr. Commissioner of Income Tax -1, Jabalpur 5. The Senior DR, ITAT, Jabalpur (M.P.) 6. Guard File