Shangkalpam Industries Pvt. Ltd., CHENNAI V. ITO, CHENNAI

MA 5/CHNY/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4738 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 04-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N DEVANATHAN
• Keywords: Rectification of order
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , C B ENCH, CHENNAI . , ! ' . # , % & BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICI AL MEMBER MISCELLANEOUS PETITION NO.5/MDS/2016 ( ./ IN I.T.A.NO.1613/MDS/2013 ( / ASSESSMENT YEAR : 2009-10 ) M/S. SHANGKALPAM INDUSTRIES PVT.LTD. 4 TH FLOOR, EAST COAST CHAMBERS, 92, G.N.CHETTY ROAD, T.NAGAR, CHENNAI-600 017. VS THE INCOME TAX OFFICER, COMPANY WARD-VI(1), CHENNAI. PAN: AAGCS0650R (PETITIONER) ( /RESPONDENT) APPLICANT BY : MR. N.DEVANATHAN, ADVOCATE /RESPONDENT BY : MR. SHAJI P.JACOB, ADDL. CIT /DATE OF HEARING : 5 TH AUGUST, 2016 /DATE OF PRONOUNCEMENT : 7 TH SEPTEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS MISCELLANEOUS PETITION IS FILED BY THE ASSESS EE PRAYING FOR RECTIFICATION OF MISTAKE COMMITTED IN T HE ORDER OF THE TRIBUNAL IN PARA 13.7 IN ITA NO.1613/MDS/2013 D ATED 15.04.2015. THE LD.A.R SUBMITTED BEFORE US THAT THE BENCH HAD MADE A REMARK IN ITS ORDER THAT ON THIS WE CAN ONLY SAY THAT SINCE ADDITION UNDER SECTION 68 OF THE ACT STA ND DELETED BY THIS ORDER, THE DEMAND RAISED BY THE REVENUE CEA SED TO EXIST, THEREFORE, THE ATTACHMENT MADE BY THE REVENU E IS NOT WARRANTED WITH RESPECT TO THE PRAYER OF THE ASSESSEE VIZ. , IF THE MATTER IS DECIDED IN FAVOUR OF THE ASSESSEE , THE 2 MP NO.5/MDS/2016 REVENUE MAY BE DIRECTED TO LIFT THE ATTACHMENT IMPO SED ON THE ASSETS OF THE ASSESSEE . THE LD.A.R SUBMITTED THAT THE TRIBUNAL OUGHT TO HAVE DIRECTED THE REVENUE TO LIFT THE ATTACHMENT AS THE DEMAND WAS ERASED BECAUSE THE ORD ER OF THE TRIBUNAL BEING IN FAVOUR OF THE ASSESSEE. IT WA S FURTHER SUBMITTED THAT THE REVENUE IS WITHHOLDING THE LIFTI NG OF THE ATTACHMENT OF THE IMMOVABLE PROPERTIES OF THE ASSES SEE FOR THE REASON THAT THE TRIBUNAL HAD NOT DIRECTED THE R EVENUE TO LIFT THE ATTACHMENT AND HAD KEPT THE ISSUE OPEN. 2. AT THE OUTSET, WE MUST SAY ON THIS ISSUE THAT, T HERE IS NO MISTAKE IN THE ORDER OF THE TRIBUNAL BECAUSE THE TR IBUNAL HAS CONSCIOUSLY AND CAREFULLY WORDED ITS ORDER KEEPING IN VIEW OF ANY OTHER PROBABLE EXISTING DEMAND PERTAINING TO TH E ASSESSEE FOR OTHER ASSESSMENT YEARS, WHICH THE BEN CH IS NOT AWARE. 3. THE LEARNED AUTHORIZED REPRESENTATIVE FURTHER AR GUED BEFORE US STATING THAT PURSUANT TO THE ORDER OF THE TRIBUNAL, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR THE SUBSEQUENT ASSESSMENT YEAR AND TH E ORDER OF THE LD.A.O GIVING EFFECT TO THE ORDER OF THE TRI BUNAL FOR 3 MP NO.5/MDS/2016 RELEVANT ASSESSMENT YEAR, THE DEMAND HAS SUBSTANTIA LLY REDUCED BELOW RS.15 LAKHS, BUT INSPITE OF THE SAME, THE REVENUE HAS DELIBERATELY AND VINDICTIVELY FAILED TO LIFT THE ATTACHMENT WITHHOLDING THE ASSETS OF THE ASSESSEE W ORTH SEVERAL CRORES WHICH NOT ONLY DISRUPTED THE BUSINES S OF THE ASSESSEE BUT ALSO OPPORTUNITIES WERE LOST FOR REALI ZING LUCRATIVE SALE PROPOSITIONS OF THE IMMOVABLE PROPER TIES OF THE ASSESSEE. 4. WHEN THE BENCH QUERIED, THE LEARNED DEPARTMENTAL REPRESENTATIVE MADE ELABORATE SUBMISSIONS STATING T HAT, THE ATTACHMENT OF THE IMMOVABLE PROPERTY OF THE ASSESSE E CAN BE LIFTED ONLY AS PER THE PROVISIONS OF THE ACT I.E ., AFTER THE FINAL DISPOSAL OF THE CASE BY THE HONBLE APEX COUR T IN FAVOUR OF THE ASSESSEE REDUCING THE DEMAND TO NIL. THE LEA RNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE PROVISION S OF SECTION 225(3) OF THE ACT FOR ARRIVING AT SUCH CONC LUSION. THE LEARNED DEPARTMENTAL REPRESENTATIVE ALSO RELIED IN THE DECISION OF THE HONBLE HIGH COURT OF CALCUTTA IN T HE CASE OF ITO VS. GHANSHYAMDAS JATIA REPORTED IN 105 ITR 693 (CAL) WHILE AS THE LEARNED AUTHORIZED REPRESENTATIVE RELI ED IN THE DECISION OF THE HONBLE JURISDICTIONAL MADRAS HIGH COURT IN 4 MP NO.5/MDS/2016 THE CASE OF SRI LAKSHMI BRICK INDUSTRIES VS. TRO R EPORTED IN 351 ITR 345,WHEREIN THE HONBLE HIGH COURT OBSERVED AS UNDER:- WHERE ORDER OF THE TRIBUNAL WAS IN FAVOUR OF THE ASSESSEE AND HAD BEEN GIVEN EFFECT, THE TAX RECOVERY OFFICER WAS BOUND TO GIVE EFFECT TO THE ORDER OF THE ASSISTANT COMMISSIONER WHO ACCEPTED THE ORDER OF THE TRIBUNAL. THE LEARNED DEPARTMENTAL REPRESENTATIVE COUNTERED T HE ARGUMENT OF THE LD.A.R BY STATING THAT THE REVENUE HAS NOT ACCEPTED THE DECISION OF THE TRIBUNAL AND HAD APPEA LED AGAINST THE SAME, THEREFORE THE DECISION OF THE HON BLE MADRAS HIGH COURT IS NOT BINDING IN THE CASE OF THE ASSESSEE. 5. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE ALSO CONCEDED THAT THE AGGREGATE DEMAND AGAINST THE ASSESSEE FOR ALL THE ASSESSMENT YEARS IS BELOW 15 L AKHS BY VIRTUE OF THE ORDER OF THE TRIBUNAL, THE ORDER OF T HE LD.A.O GIVING EFFECT TO THE ORDER OF THE TRIBUNAL AND THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR TH E SUBSEQUENT ASSESSMENT YEAR. THE D.R FURTHER SUBMITT ED THAT THERE IS NO MISTAKE IN THE ORDER OF THE TRIBUNAL AN D THEREFORE 5 MP NO.5/MDS/2016 THE MISCELLANEOUS PETITION OF THE ASSESSEE MAY BE DISMISSED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREF ULLY PERUSED THE MATERIALS ON RECORD. SECTION 222(1) OF THE ACT MANDATES THE TAX RECOVERY OFFICER TO DRAW A STATEME NT IN THE PRESCRIBED FORM SPECIFYING THE AMOUNT OF ARREAR S DUE FROM THE ASSESSEE TERMED AS CERTIFICATE. PURSUANT TO WHICH HE SHALL PROCEED TO RECOVER THE DEMAND IN ACCORDANC E WITH THE RULES LAID DOWN IN THE 2 ND SCHEDULE WHICH INCLUDES ATTACHMENT AND SALE OF IMMOVABLE PROPERTY. SECTION 225 (2) & (3) OF THE ACT ALSO MANDATES THE TAX RECOVERY OFF ICER TO AMEND THE CERTIFICATE, IF THE OUTSTANDING DEMAND IS REDUCED IN THE APPEAL PROCEEDINGS OR CANCEL THE SAME IF THE DE MAND IS REDUCED TO NIL AND THE CASE REACHING FINALITY. FROM THE ABOVE IT IS CLEAR THAT THE ATTACHMENT OF IMMOVABLE PROPER TY IS A SUBSEQUENT AND DISTINCT ACTION OF THE REVENUE PURSU ANT TO DRAWING OF THE CERTIFICATE. THEREFORE, THE REVENU E IS VESTED WITH A DISCRETIONARY POWER TO ATTACH THE IMMOVABLE PROPERTY/PROPERTIES FOR RECOVERY OF THE DEMAND. NOW THE QUESTION ARISES WHETHER THE REVENUE CAN ENFORCE ITS DISCRETIONARY POWER FOR ATTACHING THE IMMOVABLE PRO PERTY OF 6 MP NO.5/MDS/2016 THE ASSESSEE WHEN THERE IS NO DEMAND AS THE RESULT OF ANY APPELLATE PROCEEDINGS. ATTACHMENT OF AN IMMOVABLE P ROPERTY BRINGS IMMENSE HARDSHIP TO THE ASSESSEE AND RESTRAI NS THE ASSESSEE FROM ENJOYING THE PROPERTY WHOLLY. IN THI S SITUATION, WE ARE OF THE CONSIDERED VIEW THAT THE REVENUE CANN OT EXERCISE ITS DISCRETIONARY POWER TO ATTACH THE PROP ERTY WHEN THERE IS NO DEMAND AGAINST THE ASSESSEE OR THE DEMA ND IS MEAGER COMPARED TO THE VALUE OF THE IMMOVABLE PROPE RTIES OF THE ASSESSEE BY VIRTUE OF ANY APPELLATE ORDER AND W HEN OTHER MEANS OF RECOVERY IS AVAILABLE TO THE REVENUE. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF SRI LAKSHM I BRICK INDUSTRIES V/S TAX RECOVERY OFFICER REPORTED IN 351 ITR 345 (MAD) CITED BY THE LEARNED AUTHORIZED REPRESENTATIV E HAS ALSO MADE THE RATIO OF THIS ISSUE VERY CLEAR WHEREI N IT WAS HELD AS FOLLOWS:- IN THE PRESENT CASE, THE ORDER OF THE ITAT, HELD I N FAVOUR OF THE ASSESSEE AND THAT ORDER HAD BEEN GIVE N EFFECT TO. AS A CONSEQUENCE, IT WAS HELD THAT, THE TAX RECOVERY OFFICER WAS BOUND TO GIVE EFFECT OF THE ORDER OF THE CIT (A) WHO ACCEPTED THE ORDER OF THE TRIBUNAL. IT WAS ANOTHER MATTER FOR THE DEPARTMENT TO PROCEED IN APPEAL AND THE DEPARTMENT WAS ALWAYS AT LIBERTY TO PROCEED FOR RECOVERY IF THEY SUCCEED IN THE APPEAL BEFORE THE COURT. IT WAS HELD THAT THE PROVISIONS OF SECTION 225(2) GIVES A MANDATE TO TAX RECOVERY OFFICER TO PASS APPROPRIATE ORDERS BASED ON THE ORDERS PASSED IN APPEAL OR OTHER PROCEEDINGS . IN SUCH VIEW OF THE MATTER, THE TAX RECOVERY OFFICE R WAS DIRECTED TO PASS NECESSARY ORDERS, CONSEQUENT TO THE PROCEEDINGS OF THE CIT (A), ACCEPTING THE OR DER OF THE TRIBUNAL. IT WAS HELD THAT TAKING NOTE OF THE NIL 7 MP NO.5/MDS/2016 PAYMENT INSOFAR BY THE ASSESSEE FOR ALL THE ASSESSMENT YEAR, THE TAX RECOVERY OFFICER HAS TO RELEASE THE PROPERTY FROM ATTACHMENT IN TERMS OF THE ORDER OF THE TRIBUNAL AND CONSEQUENT ORDER OF THE CIT(A). THE PROVISIONS OF SECTION 225(2) GIVES A MANDATE TO TAX RECOVERY OFFICER TO PASS APPROPRIATE ORDERS BASED ON THE ORDERS PASSED IN APPEAL OR OTHER PROCEEDINGS. WHERE ORDER OF THE TRIBUNAL WAS IN FAVOUR OF THE ASSESSEE AND HAD BEEN GIVEN EFFECT, THE TAX RECOVERY OFFICER WAS BOUND TO GIVE EFFECT TO THE ORDER OF THE ASSISTANT COMMISSIONER WHO ACCEPTED THE ORDER OF THE TRIBUNAL. 7. KEEPING IN VIEW OF THE ABOVE MENTIONED DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT AND THE PROVISION S OF SECTION 222(1) AND 225 (2) & (3) OF THE ACT, IT IS APPARENT THAT THE TAX RECOVERY OFFICER IS BOUND TO AMEND THE CERTIFICATE / OR CANCEL THE SAME WHEN THE DEMAND IS REDUCED TO NIL B Y VIRTUE OF ANY APPELLATE ORDERS INCLUDING THE ORDER OF THE LD.CIT(A) LEAVE APART THE ORDER OF THE TRIBUNAL. IN THIS CAS E, THE LEARNED TRO HAS FAILED TO DO SO BY CITING FLIMSY RE ASONS THAT THE DEMAND SUBSIST FOR ABOUT 15 LACKS AND THEREBY WITHHOLDING THE IMMOVABLE PROPERTIES OF THE ASSESSE E WORTH SEVERAL CRORES. AS ON DATE WHEN THERE IS NO DEMAND OR THE DEMAND IS CONSIDERABLY REDUCED BY VIRTUE OF THE ORD ER OF THE TRIBUNAL, AND THE ORDER OF THE LD.CIT(A) CONSEQUENT LY THE REVENUE IS BOUND TO AMEND THE CERTIFICATE AND ORD ERS WITH 8 MP NO.5/MDS/2016 RESPECT TO ATTACHMENT OF IMMOVABLE PROPERTIES ACCOR DINGLY. IF THE ORDER OF THE TRIBUNAL IS NOT GIVEN EFFECT IN LE TTER AND SPIRIT, THERE IS NO PURPOSE FOR SUCH AN ORDER AND IT WILL M ERELY AMOUNT TO WASTE PAPER. 8. IN THIS PARTICULAR CASE OF THE ASSESSEE, IT APPE ARS THAT THE REVENUE IS IN THE COURSE OF INTRIGUING VINDICTI VE ACTION BY DENYING THE RIGHT OF THE ASSESSEE TO HOLD CLEAR TIT LE OF HIS IMMOVABLE PROPERTY. BEFORE US, THE CONCERNED LEARNE D ASSESSING OFFICER, THE LEARNED COMMISSIONER OF INCO ME TAX AND THE LEARNED TRO APPEARED AND EXPRESSED THEIR VI EW THAT THE ATTACHMENT CANNOT BE LIFTED UNTIL THE CASE HAS REACHED FINALITY BEFORE THE HONBLE APEX COURT IN FAVOUR OF THE ASSESSEE. THEY ALSO SUBMITTED THAT ATTACHMENT WAS LIFTED WITH RESPECT TO ONE IMMOVABLE PROPERTY AND BANK ACC OUNT OF THE ASSESSEE. WE FAIL TO UNDERSTAND WHETHER ATTACHM ENT OF THE IMMOVABLE PROPERTY AND LIFTING OF THE SAME CAN BE DONE AT THE WHIMS AND FANCIES OF THE REVENUE. IF THE AT TACHMENT CANNOT BE LIFTED UNTIL THE FINAL DISPOSAL OF THE CA SE BY THE HONBLE APEX COURT IN FAVOUR OF THE ASSESSEE, THEN THE QUESTION ARISES WHY THE ATTACHMENT WAS LIFTED IN A PARTICULAR PROPERTY. THE LEARNED AUTHORIZED REPRESENTATIVE SUB MITTED 9 MP NO.5/MDS/2016 BEFORE US THAT THOUGH THE LD.TRO HAS LIFTED THE ATT ACHMENT OF THE PROPERTY HE HAS NOT DELIBERATELY COMMUNICATED T HE SAME TO THE CONCERNED SUB-REGISTRAR IN ORDER TO GIVE COM PLETE EFFECT FOR THE LIFTING OF THE ATTACHMENT. WE ARE OF THE VIEW THAT THIS KIND OF HIDE AND SEEK ATTITUDE OF THE REVENUE IS NOT APPRECIABLE WHICH INFLICTS IRREPARABLE LOSS AND HAR M TO THE ASSESSEE APART FROM BRINING DISREPUTE TO THE REVENU E. IT IS PERTINENT TO MENTION AT THIS JUNCTURE THAT NEITHER THE ORDER OF THE TRIBUNAL IS STAYED BY THE HONBLE JURISDICTIONA L HIGH COURT NOR AN APPEAL BEFORE THE HONBLE HIGH COURT IS FILE D BY THE REVENUE FOR STAYING OF THE ORDER OF THE TRIBUNAL. M OREOVER, IT WAS POINTED OUT BY THE LEARNED AUTHORIZED REPRESENT ATIVE THAT SUCH COERCIVE ACTION IS NOT PURSUED BY THE REV ENUE IN OTHER SIMILAR CASES, BUT IT HAS BEEN PARTICULARLY T AKEN AGAINST THE ASSESSEE VINDICTIVELY. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD ALSO NOT SUCCESSFULLY CONTROVE RT TO THESE SUBMISSIONS OF THE LEARNED AUTHORIZED REPRESE NTATIVE. CONSIDERING THESE FACTS AND CIRCUMSTANCES OF THE CA SE, IN THE INTEREST OF JUSTICE, WE HEREBY DIRECT ALL TH E APPROPRIATE REVENUE AUTHORITIES TO PASS ALL THE CONSEQUENTIAL ORDERS RELEVANT TO THE ORDER PASSED B Y THE TRIBUNAL AND THE LD.CIT(A) FOR THE SUBSEQUENT 10 MP NO.5/MDS/2016 ASSESSMENT YEAR WHICH INCLUDES LIFTING OF THE ATTAC HMENT OF THE IMMOVABLE PROPERTY AS WELL, WHEN THERE IS NO EXISTING DEMAND OR THE ASSESSEE HAS FURNISHED SUFFI CIENT SECURITY TO COVER THE EXISTING DEMAND BY WAY OF BAN K GUARANTEE PURSUANT TO THE APPELLATE ORDERS. IT IS HEREBY ORDERED ACCORDINGLY. 8.1 WE ALSO REMIND THE REVENUE THAT NOT FOLLOWING THE ORDERS OF THE TRIBUNAL WILL AMOUNT TO CONTEMPT AND THE ASSESSEE SHALL BE AT LIBERTY TO PURSUE CONTEMPT P ROCEEDINGS BEFORE THE HONBLE JURISDICTIONAL HIGH COURT. THE LD.A.R HAS ALLEGED BEFORE US THAT THE REVENUE IS HARASSING THE ASSESSEE AGAINST THE PROVISIONS OF LAW AND BEING SI NGLED OUT WHILE APPLYING CERTAIN PROVISIONS OF THE ACT. ON TH IS WE ARE LEFT WITH NO OTHER OPTION BUT TO ADVISE THE ASSESSE E TO BRING HIS GRIEVANCES TO THE NOTICE OF THE CONCERNED PRINC IPAL CHIEF COMMISSIONER OF INCOME TAX, GRIEVANCE CELL OF THE R EVENUE AND THE LEARNED MEMBERS OF THE CENTRAL BOARD OF DIR ECT TAXES FOR REMEDIAL ACTIONS AND FOR EXPEDITING THE S AME WE ALSO DIRECT THE REGISTRY TO FORWARD A COPY OF THIS ORDER TO ALL THE REVENUE AUTHORITIES MENTIONED HEREINABOVE. 11 MP NO.5/MDS/2016 9. IN THE RESULT, THE MISCELLANEOUS PETITION OF THE ASSESSEE IS ALLOWED AS INDICATED HEREIN ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 7 TH SEPTEMBER, 2016 SD/- SD/- ( ! ' . # ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED THE 7 TH SEPTEMBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF .