Income Tax Officer, Tiptur V. Mr. S.Kumar, Tiptur

MA 44/BANG/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5447 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 14-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Audit objection; Tax effect; TDS
• Section: 143(3); 40(a)(ia); 37(1); 254(2); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER M.P. NO. 44/BANG/2019 (IN ITA NO. 2211 /BANG/201 6 ) ASSESSMENT YEAR : 20 08 - 09 THE INCOME TAX OFFICER, WARD 1, TIPTUR. VS. SHRI S. KUMAR, CHIKKA RANGAPURA, RANGAPURA POST, TIPTUR TALUK 572 201. PAN: AQIPK0572D APPELLANT RESPONDENT & C.O. NO. 58/BANG/2017 (IN ITA NO. 2211/BANG/2016) SHRI S. KUMAR, CHIKKA RANGAPURA, RANGAPURA POST, TIPTUR TALUK 572 201. PAN: AQIPK0572D VS. THE INCOME TAX OFFICER, WARD 1, TIPTUR. APPELLANT RESPONDENT ASSESSEE BY : SHRI NARENDRA SHARMA, ADVOCATE REVENUE BY : SHRI SUNIL KUMAR AGARWAL, ADDL. CIT (DR) DATE OF HEARING : 20 .0 9 .2019 DATE OF PRONOUNCEMENT : 27. 0 9 .2019 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS M.P. IS FILED BY THE REVENUE IN WHICH IT IS STATED THAT THE APPEAL OF THE REVENUE WAS DISMISSED BY THE TRIBUNAL BECAUSE OF LOW TAX EFFECT IN VIEW OF CBDT INSTRUCTIONS AS PER CIRCULAR NO. 3/2018 DATED 11.07.2018. BUT AS PER PARA 10(C) OF THIS CIRCULAR, THERE IS EXCEPTION AS PER WHICH THIS CIRCULAR IS NOT APPLICABLE WHERE THE DEPARTMENT HAS ACCEPTED THE REVENUE AUDIT OBJECTION. 2. IN COURSE OF HEARING BEFORE US, IT WAS SUBMITTED BY LD. DR OF REVENUE THAT THE RETURN OF INCOME WAS FILED BY THE ASSESSEE BY DECLARING AN INCOME OF RS. 3,16,780/- AND THE ASSESSMENT U/S. 143(3) WAS COMPLETED ON 22.12.2009 BY M.P. NO. 44/BANG/2019 & C.O. NO. 58/BANG/2017 PAGE 2 OF 4 MAKING AN ADDITION OF RS. 13,048/- BUT SUBSEQUENTLY, OBJECTION WAS RAISED BY REVENUE AUDIT PARTY TO THE EFFECT THAT NO TDS WAS DEDUCTED BY THE ASSESSEE ON SUB CONTACT PAYMENTS AND THE OBJECTION WAS ACCEPTED BY THE DEPARTMENT AND RE-OPENING THE CASE WAS MADE U/S. 147 AND FRESH ASSESSMENT ORDER U/S. 143(3)/147 WAS PASSED ON 18.02.2015 AND IN THAT ORDER, DISALLOWANCE WAS MADE OF RS. 25,44,728/- U/S. 40(A)(IA) AND PURCHASES OF RS. 38,17,079/- U/S. 37(1) RESPECTIVELY. IT WAS SUBMITTED BEFORE US THAT THIS IS CLEAR FROM THE ORDER OF AUTHORITIES BELOW I.E. THE ASSESSMENT ORDER AND THE ORDER OF LD. CIT(A) THAT THERE WAS AUDIT OBJECTION IN THE PRESENT CASE AND REOPENING WAS MADE BECAUSE OF AUDIT OBJECTION AND THEREFORE, THIS CLAUSE 10(C) OF THE BOARD CIRCULAR NO. 3/2018 DATED 11.07.2018 IS APPLICABLE AND HENCE, THE PRESENT APPEAL IS MAINTAINABLE IN SPITE OF LOW TAX EFFECT. 3. AS AGAINST THIS, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THERE WAS NO DOCUMENT ON RECORD ABOUT THE REVENUE AUDIT OBJECTION CLAIM AND THERE WAS NO CLAIM OR SUBMISSION MADE IN THIS REGARD AT THE TIME OF HEARING OF THE APPEAL AND THEREFORE, THERE IS NO APPARENT MISTAKE IN THE TRIBUNAL ORDER WHICH CAN BE RECTIFIED U/S. 254(2) OF THE IT ACT. IN SUPPORT OF THIS CONTENTION, RELIANCE WAS PLACED ON THE TRIBUNAL ORDER RENDERED IN THE CASE OF ACIT VS. SHRI HAKIM MANDAL IN M.A. NOS. 02 & 03/LKW/2019 DATED 06.09.2019, COPY OF WHICH IS AVAILABLE ON PAGES 7 AND 8 OF THE PAPER BOOK FILED BY HIM ALONG WITH THE SUBMISSIONS DATED 20.09.2019. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HONBLE MADRAS HIGH COURT RENDERED IN THE CASE OF CIT VS. SHRI SHANTHINATH BENEFIT FUND LTD. AS REPORTED IN [2015] 371 ITR 271 (MADRAS) (MAG.), COPY AVAILABLE ON PAGES 9 TO 11 OF THE PAPER BOOK. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF PR.CIT VS. NAWANY CONSTRUCTION CO. (P.) LTD. AS REPORTED IN [2018] 258 TAXMAN 365 (BOMBAY), COPY AVAILABLE ON PAGES 12 AND 13 OF THE PAPER BOOK. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AS PER THE ASSESSMENT ORDER, THIS FACT IS NOT COMING OUT THAT THERE WAS ANY REVENUE AUDIT OBJECTION. IN PARA 2 OF THE ASSESSMENT ORDER, THE AO SAYS THAT SUBSEQUENTLY, IT WAS NOTICED THAT NO TDS HAS BEEN MADE ON THE EXPENDITURE / PAYMENT MADE BY THE ASSESSEE ON SUB-CONTRACT PAYMENTS, WHICH HAD TO BE DISALLOWED IN TERMS OF M.P. NO. 44/BANG/2019 & C.O. NO. 58/BANG/2017 PAGE 3 OF 4 PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND BROUGHT TO TAX AND THEREFORE, NOTICE U/S. 148 WAS ISSUED ON 12.03.2014 REQUIRING THE ASSESSEE TO FURNISH THE RETURN OF INCOME WITHIN 30 DAYS FROM THE RECEIPT OF THE NOTICE AND THERE IS NO SUCH WHISPER ABOUT THE REVENUE AUDIT OBJECTION. IN THE ORDER OF LD. CIT(A) ALSO, THERE IS NO WHISPER ABOUT REVENUE AUDIT OBJECTION. ALONG WITH THE M.P., THE REVENUE HAS ALSO FILED APPROVAL OF PR.CIT ALSO AND IN THE SAME ALSO, THERE IS NO MENTION ABOUT REVENUE AUDIT OBJECTION. THE CBDT CIRCULAR NO. 03/2018 DATED 11.07.2018 AND THE IMPUGNED TRIBUNAL ORDER IS DATED 05.11.2018 I.E. AFTER ALMOST 4 MONTHS AND HENCE, SUFFICIENT TIME WAS AVAILABLE WITH THE DEPARTMENT TO BRING THIS ON RECORD BEFORE THE TRIBUNAL THAT IN THE PRESENT CASE, THERE IS REVENUE AUDIT OBJECTION AND THEREFORE, THE PRESENT APPEAL OF THE REVENUE IS NOT HIT BY CBDT CIRCULAR NO. 3/2018 DATED 11.07.2018. UNDER THESE FACTS, NOW WE EXAMINE THE APPLICABILITY OF VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY LD. AR OF ASSESSEE. 5. IN THE CASE OF ACIT VS. SHRI HAKIM MANDAL (SUPRA), PARA NO. 4 OF THIS TRIBUNAL ORDER IS RELEVANT WHICH IS REPRODUCED HEREINBELOW FOR READY REFERENCE. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE APPEALS OF THE REVENUE IN A BUNCH OF APPEALS WERE DISMISSED FOR LOW TAX EFFECT VIDE ORDER OF THE TRIBUNAL DATED 10/08/2018. THE DEPARTMENT HAS FILED THE MISC. APPLICATIONS FOR RECALLING OF THE ORDER BY RELYING ON PARA 10(C) OF BOARD'S CIRCULAR NO. 3 OF 2018. HOWEVER, WE FIND THAT DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE REVENUE HAS NOT ARGUED AGAINST THE DISMISSAL OF THESE APPEALS BY STATING THAT REVENUE AUDIT OBJECTION IN THESE CASES HAS BEEN ACCEPTED BY THE DEPARTMENT. NOW ACCEPTING THIS ARGUMENT AND RECALLING THE ORDERS WILL AMOUNT TO REVIEW OF THE ORDER WHICH IS NOT PERMISSIBLE IN LAW THEREFORE, THERE IS NO MISTAKE APPARENT FROM RECORD. IN VIEW OF THE ABOVE, THESE MISC. APPLICATIONS OF THE REVENUE ARE DISMISSED. 6. FROM THE ABOVE PARA REPRODUCED FROM THE TRIBUNAL ORDER, IT IS SEEN THAT THIS IS THE BASIS OF THIS TRIBUNAL ORDER THAT DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE TRIBUNAL, THE REVENUE HAS NOT ARGUED AGAINST THE DISMISSAL OF THE APPEAL BY STATING THAT THERE IS REVENUE AUDIT OBJECTION AND IT HAS BEEN ACCEPTED BY THE DEPARTMENT. THE TRIBUNAL ALSO HELD THAT NOW ACCEPTING THIS ARGUMENT AND RECALLING THE ORDERS WILL AMOUNT TO REVIEW OF THE ORDER WHICH IS NOT PERMISSIBLE IN LAW. IN THE PRESENT CASE ALSO, NO SUCH ARGUMENT WAS MADE BY M.P. NO. 44/BANG/2019 & C.O. NO. 58/BANG/2017 PAGE 4 OF 4 LD. DR OF REVENUE IN COURSE OF HEARING AND THERE IS NO MATERIAL AVAILABLE ON RECORD FROM WHICH THE TRIBUNAL COULD KNOW THIS FACT THAT THERE IS REVENUE AUDIT OBJECTION. RESPECTFULLY FOLLOWING THIS TRIBUNAL ORDER, WE HOLD THAT THERE IS NO APPARENT MISTAKE IN THE TRIBUNAL ORDER. 7. IN THE RESULT, THE M. P. FILED BY THE REVENUE IS DISMISSED. 8. REGARDING THE C. O. OF THE ASSESSEE, WE FIND THAT AS PER THE TRIBUNAL ORDER DATED 05.11.2018, THE TRIBUNAL HAS DISMISSED THE APPEAL OF THE REVENUE AS NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT BUT THE C. O. OF THE ASSESSEE WAS NOT DECIDED AND HENCE, WE DECIDE THE C. O. NOW. THIS TRIBUNAL IS TAKING THIS VIEW CONSISTENTLY THAT WHEN THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT, THE C. O. ALSO DOES NOT SURVIVE BECAUSE C. O. CAN BE FILED BY THE ASSESSEE ONLY WHEN A VALID AND MAINTAINABLE APPEAL IS FILED BY THE REVENUE. IN THE PRESENT CASE, IT IS HELD BY THE TRIBUNAL THAT THE APPEAL OF THE REVENUE IS NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT AND AS A CONSEQUENCE, THE C.O. FILED BY THE ASSESSEE IS ALSO NOT MAINTAINABLE AND DISMISSED ACCORDINGLY. 9. IN THE COMBINED RESULT, THE M. P. FILED BY THE REVENUE AND THE C. O. FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 27 TH SEPTEMBER, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.