Deputy Commissioner of Income Tax- 1, Kanpur V. M/s. Unique International, Kanpur

MA 25/LKW/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6720 (ITAT-LUCKNOW)
• Duration Of Justice: 1 month(s) 20 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-01-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-01-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 02-12-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Competent authority
• Section: 40A(3); 143(3); 22; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER M.A. NO. 25/LKW/2020 [IN ITA NO.625/LKW/2018 AND C.O. NO.19LKW/2019] ASSESSMENT YEAR: 2010 - 11 ACIT-1(1) KANPUR V. M/S UNIQUE INTERNATIONAL 980-D, WAJIDPUR, JAJMAU KANPUR TAN/PAN: AAAFU3756D (APP LIC ANT) (RESPONDENT) APP LIC ANT BY: SHRI AJAY KUMAR, D.R. RESPONDENT BY: SHRI ABHINAV MEHROTRA, ADVOCATE DATE OF HEARING: 21 0 1 20 2 1 DATE OF PRONOUNCEMENT : 22 0 1 20 2 1 O R D E R PER A.D. JAIN, V.P.: THE REVENUE HAS FILED THIS MISCELLANEOUS APPLICATION AGAINST THE ORDER DATED 20.3.2020 PASSED BY THIS BENCH OF THE TRIBUNAL, ALLOWING THE CROSS OBJECTION NO.2 FILED BY THE ASSESSEE IN C.O. NO.19/LKW/2019 AND DISMISSING THE APPEAL OF THE REVENUE IN I.T.A. NO.625/LKW/2018. 2. THE ASSESSEE HAD, IN ITS CROSS OBJECTIONS, INTER ALIA, RAISED THE FOLLOWING: 2. BECAUSE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AUTHORITIES BELOW HAVE MANIFESTLY ERRED IN LAW IN APPROVING AN ILLEGAL AND A NON-CAT ASSESSMENT ORDER SINCE THE ASSESSING OFFICER DID NOT ACQUIRE ANY VALID JURISDICTION WHILE REOPENING THE ASSESSMENT AS THE SANCTION OBTAINED FOR REOPENING OF ASSESSMENT IS BASED ON WRONG AND PAGE 2 OF 10 INCORRECT FACTS. IT IS AVERTED IN THE PRO-FORMA SEEKING SANCTION OF THE APPROPRIATE AUTHORITY THAT IT IS FIRST TIME FOR WHICH ASSESSMENT IS PROPOSED, WHICH TACT IS CONTRARY TO RECORD. FURTHER THE AVERMENT THAT NO ASSESSMENT HAS BEEN MADE IS CONTRARY TO RECORD. REGULAR ASSESSMENT WAS MADE VIDE ORDER DT. 19.02.2013. HENCE THE ORDERS BELOW DESERVE TO BE SET-ASIDE AND QUASHED. 3. WE HAD, IN OUR AFORESAID ORDER DATED 20.3.2020, ACCEPTED THE ABOVE CROSS OBJECTION NO.2 RAISED BY THE ASSESSEE, HOLDING, INTER ALIA, AS FOLLOWS: 7. HEARD. THE ISSUE UP FOR CONSIDERATION IS THAT WHEN A SCRUTINY ASSESSMENT ORDER (APB:5-10) UNDER SECTION 143(3) OF THE ACT STOOD ALREADY PASSED ON 19/2/2013, WHETHER THE ASSESSMENT ORDER DATED 28/12/2017, PASSED UNDER SECTION 147 OF THE ACT, CONSEQUENT UPON THE PROCEEDINGS INITIATED UNDER SECTION 147/148 OF THE ACT TO OBTAIN APPROVAL BY THE APPROPRIATE AUTHORITY ON WRONG ASSERTION OF A NON-EXISTENT FACT THAT THE ASSESSMENT ORDER WAS PROPOSED TO BE MADE FOR THE FIRST TIME, IS NOT AN INVALID ORDER. 8. FOR READY REFERENCE, THE FIRST AND LAST PAGES OF THE ASSESSMENT ORDER DATED 19/2/2013, PASSED UNDER SECTION 143(3) OF THE ACT, ARE BEING SCANNED AND REPRODUCED HEREUNDER. THESE ARE AT PAGES 5 AND 10, RESPECTIVELY, OF THE ASSESSEES PAPER BOOK: PAGE 5: PAGE 3 OF 10 PAGE 10: PAGE 4 OF 10 10. THE FORM FOR RECORDING REASONS FOR INITIATING PROCEEDINGS UNDER SECTION 147 OF THE ACT FOR TAKING APPROVAL OF THE COMPETENT AUTHORITY (APB:4) IS SCANNED AND REPRODUCED AS UNDER: PAGE 5 OF 10 10. IT WAS IN PURSUANCE OF THE ABOVE APPROVAL THAT THE PROCEEDINGS UNDER SECTION 147 OF THE ACT WERE INITIATED AGAINST THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, BY ISSUANCE OF NOTICE (APB:1) DATED 31/3/2017 UNDER SECTION 148 OF THE ACT. 11. THE ORIGINAL ASSESSMENT ORDER DATED 19/2/2013, PASSED UNDER SECTION 143(3) OF THE ACT, IS PATENT ON RECORD. THIS HAS NOT BEEN DISPUTED. REMARKABLY, EVEN IN THE LETTER DATED 18/10/2019, ADDRESSED BY THE ASSESSING OFFICER TO THE LD. D.R., THE ASSESSING OFFICER DOES NOT REFUTE THE FACTUM OF THE SAID ORDER HAVING BEEN PASSED. THIS, DESPITE THE FACT THAT, IN PARA 1, THE ASSESSING OFFICER HIMSELF STATES THAT ..THE ASSESSMENT WAS REOPENED WITHIN STATUTORY PERIOD PROVIDED IN PROVISION OF SECTION 147/148 OF I.T. ACT. AND THAT.. FURTHER THE ASSESSMENT WAS REOPENED ... 12. THE ASSESSING OFFICER HAS GONE ON A TANGENT RATHER THAN ADDRESSING THE ISSUE. HE STATES THAT THE ASSESSMENT WAS REOPENED IN VIEW OF THE FACT THAT THE FACTUM OF THE ASSESSEE HAVING MADE PAYMENTS EXCEEDING RS.20,000/- THROUGH BEARER CHEQUES IN VIOLATION OF THE PROVISIONS OF SECTION 40A(3) OF THE ACT, HAD BEEN CONCEALED BY THE ASSESSEE WHILE FILING THE RETURN OF INCOME. 13. THE ASSESSING OFFICER HAS FURTHER STATED THAT THE RETURN FILED BY THE ASSESSEE WAS ACCOMPANIED BY THE AUDIT REPORT IN FORM 3CD; THAT IN THIS AUDIT REPORT, THE AUDITOR HAD WRONGLY CERTIFIED THAT NO PAYMENT IN EXCESS OF RS.20,000/- HAD BEEN MADE BY THE ASSESSEE OTHERWISE THAN THROUGH CROSSED CHEQUE/DRAFT. 14. THE ASSESSING OFFICER HAS ALSO STATED THAT PERHAPS THE RECITAL YES IN ITEM NO.8 OF THE FORM FOR OBTAINING APPROVAL OF THE COMPETENT AUTHORITY, WAS A FACTUAL MISTAKE WHILE FILLING THE FORM, AND YES WAS ERRONEOUSLY TYPED IN PLACE OF NO, AND THAT THIS WAS A TYPOGRAPHICAL AND CLERICAL MISTAKE, WHICH DOES NOT AFFECT THE LEGALITY OF THE ACTION UNDER SECTION 147 OF THE ACT. 15. THE ASSESSING OFFICER HAS THEN STATED THAT THE CONCERNED ASSESSING OFFICER HAD GIVEN DETAILED REASONS IN HIS PROPOSAL FOR THE REOPENING OF THE CASE UNDER SECTION 147 PAGE 6 OF 10 OF THE ACT AND THE COMPETENT AUTHORITY HAD GIVEN THEIR APPROVAL FOR SUCH REOPENING ONLY AFTER EXAMINING THE FACTS BROUGHT BEFORE HIM BY THE ASSESSING OFFICER AND ALSO AFTER EXAMINING THE CASE RECORDS. 16. THE QUESTION IS AS TO WHETHER INDEED THERE WAS A MISTAKE IN FILLING OUT THE ANSWER TO ITEM NO.8 IN THE FORM FOR OBTAINING THE APPROVAL. THIS ARGUMENT, AT THE VERY THRESHOLD, IS UNPALATABLE, TO SAY THE LAST. IT GOES WITHOUT SAYING THAT OBTAINING OF APPROVAL FOR REOPENING OF A COMPLETED ASSESSMENT IS A VERY SERIOUS MATTER. THE ASSESSING OFFICER, IN HIS CAPACITY AS SUCH, IS EXPECTED TO GIVE SUCH DETAILS ONLY AFTER CONSULTING THE RECORD. IF HE DOES NOT DO SO, THE RECITAL CANNOT BE GIVEN THE GO-BY UNDER THE PRETEXT OF IT BEING A MERE TYPOGRAPHICAL ERROR. THIS, MOREOVER, ALSO STANDS CONFIRMED FROM THE FACT THAT ITEM NO.8 REQUIRES THE ASSESSING OFFICER TO STATE WHETHER THE ASSESSMENT IS PROPOSED TO BE MADE FOR THE FIRST TIME. THE ANSWER THERETO, I.E., YES, HAS BEEN STATED TO BE A TYPOGRAPHICAL ERROR. MEANING THEREBY, THAT IT WAS AN UNCONSCIOUS ENTRY. HOWEVER, THIS GETS BELIED FROM THE RESPONSE TO ITEM NO.9. ITEM NO.9 STATES IF THE ANSWER TO ITEM NO.8 IS IN THE NEGATIVE, PLEASE STATE. THE ANSWER TO THIS ITEM NO.9 IS N.A. THIS ITSELF EVINCES THAT THE ASSESSING OFFICER, WHILE REPLYING TO ITEM NO.9, WAS FULLY CONSCIOUS OF THE ANSWER GIVEN BY HIM TO ITEM NO.8, I.E., YES. 17. IT REQUIRES TO BE MENTIONED HERE THAT THE ACT OF GRANT OF APPROVAL PER SE IS NOT IN QUESTION BEFORE US AND, THEREFORE, WE WOULD NOT LIKE TO ENTER ANY COMMENT THEREON. 18. IN VIEW OF THE ABOVE, FINDING MERIT IN GROUND NO.2 OF THE CROSS OBJECTIONS RAISED BY THE ASSESSEE, THE SAME IS ACCEPTED. FOR THE PRECEDING DETAILED DISCUSSION, THE ASSESSMENT ORDER DATED 28/12/2017, PASSED UNDER SECTION 147 OF THE ACT, IS CANCELLED AS INVALID. CONSEQUENTLY, NOTHING FURTHER SURVIVES FOR ADJUDICATION, NOR WAS ANYTHING ELSE ARGUED. THEREFORE, THE CROSS OBJECTION IS ALLOWED AND THE APPEAL OF THE DEPARTMENT IS DISMISSED. PAGE 7 OF 10 4. THE DEPARTMENT, IN THE APPLICATION UNDER CONSIDERATION, HAS CONTENDED THAT DURING THE ARGUMENTS AT THE STAGE OF HEARING OF THE APPEAL BEFORE THE TRIBUNAL, THE LD. D.R. HAD PLACED STRONG RELIANCE ON THE APPROVAL OBTAINED; THAT HE HAD SUBMITTED THAT THE ASSESSMENT ORDER DATED 28.12.2017 PASSED U/S 147 OF THE ACT DOES NOT SUFFER FROM ANY INFIRMITY WHATSOEVER AND THAT THE CROSS OBJECTION RAISED BY THE ASSESSEE, REQUIRES TO BE REJECTED OUTRIGHT, BEING SHORN OF MERIT; THAT THE LD. D.R. HAD ALSO PLACED A LETTER DATED 18.10.2019 SUBMITTED BY THE ASSESSING OFFICER WHEREIN IT IS STATED THAT THE OBJECTION RAISED BY THE ASSESSEE REGARDING LEGALITY OF ACTION TAKEN U/S 147 IS NOT ACCEPTABLE; THAT THERE WAS A FACTUAL MISTAKE WHILE FILLING THE FORMAT, AS IN COLUMN 8 'YES' IN PLACE OF `NO' WAS TYPED; THAT THIS WAS A TYPOGRAPHICAL & CLERICAL MISTAKE AND THIS TYPOGRAPHICAL MISTAKE DOES NOT AFFECT THE LEGALITY OF THE ACTION. 5. IT HAS BEEN FURTHER CONTENDED IN THE APPLICATION THAT THE ASSESSING OFFICER HAD ALSO SUBMITTED THAT THE CONTENTION OF THE ASSESSEE THAT IT HAS MECHANICAL APPROVAL GIVEN BY THE HIGHER AUTHORITIES TO THE AO FOR REOPENING OF THE CASE U/S 147, IS WRONG AND MISLEADING; THAT THE AO HAD GIVEN DETAILED REASON IN HIS PROPOSAL FOR REOPENING OF THE CASE U/S 147 AND THE HIGHER AUTHORITIES GAVE THEIR APPROVAL ONLY AFTER EXAMINING THESE FACTS BROUGHT BEFORE THEM BY THE AO AND ALSO AFTER EXAMINING THE CASE RECORDS; THAT HENCE, THE CROSS OBJECTION RAISED BY THE ASSESSEE SHOULD BE REJECTED. 6. IT HAS BEEN ALSO SUBMITTED IN THE APPLICATION THAT SINCE THE HON'BLE ITAT HAS DECIDED AND DISMISSED THE APPEAL OF THE I. T. DEPARTMENT AND ALLOWED THE CROSS OBJECTION RAISED BY THE ASSESSEE WITHOUT ADJUDICATING ON THE GROUNDS OF APPEAL FILED BY PAGE 8 OF 10 THE I.T. DEPARTMENT AND WITHOUT LOOKING INTO THE MERITS OF THE CASE, THE ITAT IS REQUESTED TO RECALL ITS ORDER UNDER QUESTION IN ITA NO.625/LKW/2018 & C.O. NO. 19/LKW/2019 DATED 20.03.2020 AND DECIDE THE CASE ON MERITS, CONSIDERING THE VARIOUS FACTS AND CIRCUMSTANCES. 7. BEFORE US, THE LD. D.R. HAS REITERATED THE AFORESAID CONTENTS OF THE APPLICATION. 8. ON THE BASIS OF THE ABOVE, THE LD. D.R. HAS CONTENDED THAT SINCE THE TRIBUNAL HAS DISMISSED THE APPEAL OF THE DEPARTMENT AND ALLOWED THE CROSS OBJECTIONS RAISED BY THE ASSESSEE WITHOUT ADJUDICATING ON THE GROUNDS OF APPEAL FILED BY THE DEPARTMENT AND WITHOUT LOOKING INTO THE MERITS OF THE CASE, THE ORDER DATED 20.3.2020 BE RECALLED AND THE CASE BE DECIDED ON MERITS, CONSIDERING THE FACTS AND CIRCUMSTANCES THEREOF. 9. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS STRONGLY OPPOSED THE REQUEST MADE BY THE DEPARTMENT. IT HAS BEEN STATED THAT A PERUSAL OF THE ORDER DATED 20.3.2020 PASSED BY THE TRIBUNAL MAKES IT EVIDENT THAT THE SAID ORDER WAS PASSED AFTER DUE APPLICATION OF MIND; THAT THE LD. D.R. HAS NOT POINTED OUT ANY MISTAKE WHATSOEVER IN THE SAID ORDER; THAT AS SUCH, THE APPLICATION UNDER CONSIDERATION REQUIRES BEING DISMISSED AS BEING AN APPLICATION FOR REVIEW, WHICH IS IMPERMISSIBLE UNDER THE LAW. 10. HEARD. THE GRIEVANCE OF THE DEPARTMENT EFFECTIVELY IS THAT THE APPEAL OF THE DEPARTMENT HAS BEEN DISMISSED BY US WITHOUT ADJUDICATING THE GROUNDS OF APPEAL RAISED BY THE DEPARTMENT AND WITHOUT LOOKING INTO THE MERITS OF THE CASE. THIS IS WHAT HASS PROMPTED THE DEPARTMENT TO FILE THE PRESENT APPLICATION. HOWEVER, WE FIND THAT THE DISMISSAL OF THE PAGE 9 OF 10 DEPARTMENTS APPEAL, IN LIMINE, IS FOR THE REASON THAT THE CROSS OBJECTION NO.2, AS RAISED BY THE ASSESSEE, WAS FOUND TO BE WITH MERIT AND IT WAS, THEREFORE, THAT THE SAID CROSS OBJECTION WAS ALLOWED. IT WAS FOUND THAT ON ALLOWING THE SAID CROSS OBJECTION, NOTHING ELSE SURVIVED FOR ADJUDICATION. IT WAS, AS SUCH, FOUND THAT CONSEQUENT TO THE ALLOWING OF CROSS OBJECTION NO.2 RAISED BY THE ASSESSEE, THE APPEAL OF THE DEPARTMENT DID NOT SURVIVE. IN PARA 18 OF OUR ORDER DATED 20.3.2020 ALSO, WE HAVE NOTED THAT .CONSEQUENTLY, NOTHING FURTHER SURVIVES FOR ADJUDICATION, NOR WAS ANYTHING ELSE ARGUED. THEREFORE, THE CROSS OBJECTION IS ALLOWED AND THE APPEAL OF THE DEPARTMENT IS DISMISSED. THIS DOES NOT STAND DISPUTED. 11. THEREFORE, EVIDENTLY, OUR ORDER DATED 20.3.2020, DISMISSING THE DEPARTMENTS APPEAL, IN LIMINE, WHILE ALLOWING THE CROSS OBJECTION RAISED BY THE ASSESSEE, IS A REASONED ORDER. WHAT THE DEPARTMENT NOW SEEKS, IS A REVIEW OF OUR ORDER, WHICH IS NOT PERMISSIBLE UNDER THE LAW, IN OUR CONSIDERED VIEW. SECTION 254 ENVISAGES A RECALL OF ORDERS, AND NOT A REVIEW THEREOF. SUB- SECTION (2) OF SECTION 254 OF THE ACT IS CATEGORICAL IN THIS REGARD, WHERE IT STATES THAT THE APPELLATE TRIBUNAL MAY, AT ANY TIME, WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD , AMEND ANY ORDER PASSED BY IT, SHALL MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESSING OFFICER. 12. IN THE PRESENT CASE, AS DISCUSSED HEREINABOVE, NO MISTAKE, MUCH LESS ANY RECTIFIABLE MISTAKE APPARENT FROM RECORD, HAS BEEN POINTED OUT BY THE DEPARTMENT IN OUR ORDER DATED 20.3.2020. AS SUCH, THE APPLICATION UNDER CONSIDERATION IS FOUND TO BE SHORN OF MERIT AND IT IS REQUIRED TO BE DISMISSED. 13. ORDERED ACCORDINGLY. PAGE 10 OF 10 14. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILED BY THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/01/2021. SD/ - SD/ - [T. S. KAPOOR] [A. D. JAIN] ACCOUNTANT MEMBER VICE PRESIDENT DATED:22/01/2021 JJ:2201 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER