S.Ratna, CHENNAI v. ITO, Kumbakonam

ITA 2073/CHNY/2014 | 2005-2006
Pronouncement Date: 05-10-2016

Appeal Details

RSA Number 207321714 RSA 2014
Assessee PAN AGGPR6018R
Bench Chennai
Appeal Number ITA 2073/CHNY/2014
Duration Of Justice 2 year(s) 2 month(s)
Appellant S.Ratna, CHENNAI
Respondent ITO, Kumbakonam
Appeal Type Income Tax Appeal
Pronouncement Date 05-10-2016
Appeal Filed By Assessee
Bench Allotted D
Date Of Final Hearing 22-09-2016
Next Hearing Date 22-09-2016
Assessment Year 2005-2006
Appeal Filed On 05-08-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . ! '# BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SHRI G.PAVAN KUMAR JUDICIAL MEMBER ./ I.T.A.NOS.2073 & 2074/MDS./2014 / ASSESSMENT YEARS : 2005-06 & 2006-07 SMT.S.RATNA NO.66 UPUUKARA STREET KUMBAKONAM VS. THE INCOME TAX OFFICER WARD-I(3) KUMBAKONAM. [PAN AGGPR 6018 R ] ( $% / APPELLANT) ( &'$% /RESPONDENT) / APPELLANT BY : MR.S.SRIDHAR ADVOCATE /RESPONDENT BY : MRS.R.ILAVARASI JCIT D.R / DATE OF HEARING : 22 - 0 9 - 201 6 !' / DATE OF PRONOUNCEMENT : 05 - 10 - 2016 ( / O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER THESE TWO APPEALS OF THE ASSESSEE ARE DIRECTED A GAINST THE DIFFERENT ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) TIRUCHIRAPALLI DATED 05.06.2014 PERTAINING TO AS SESSMENT YEARS 2005- 06 & 2006-07 PASSED U/S.271(1)(C) OF THE ACT. SINCE ISSUES INVOLVED IN ALL THESE ASSESSEES APPEALS ARE COMMON IN NATURE THESE APPEALS ARE ITA NO. 1211/MDS./2016 :- 2 -: CLUBBED TOGETHER HEARD TOGETHER DISPOSED OFF BY T HIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. WE CONSIDER THE FACTS NARRATED IN A.Y 2005-06. 2. THE FACTS OF THE CASE ARE THAT THE ASESSEE IS I N THE BUSINESS OF PLYING OF BUSES FILED A RETURN OF INCOME FOR THE A .Y 2005-06 AT ` 2 60 380/- ON 03.02.2006 & A.Y 2006-07 AT ` 11 00 560/- ON 01.02.2007. A SURVEY U/S 133A WAS CONDUCTED ON 24.0 9.2005 AT THE BUSINESS PREMISES OF THE ASSESSEE. DURING THE COURS E OF SURVEY IT WAS FOUND THAT THE ASSESSEE HAD ADVANCED SUBSTANTIAL AM OUNTS ON VARIOUS DATES TO P.S.SEKAR FOR INVESTMENT IN FIXED DEPOSITS UNDER ELDS WITH KMBF LTD. KUMBAKONAM. THE ASSESSING OFFICER APART FROM MAKING AN ADDITION OF ` 1 41 150/- ON ACCOUNT OF DISALLOWANCE OF 5% OF BATT A EXPENSES TREATED CASH CREDITS OFFERED AT ` 13 LAKHS U/S 133A AS CONCEALED INCOME FOR THE PURPOSE OF PENALTY U/S 271 (1)(C) OF THE I.T. ACT. THUS THE ASSESSING OFFICER HAS TREATED AN AMOU NT OF ` 14 41 150/- AS CONCEALED INCOME AND PENALTY PROCEED INGS WERE INITIATED. IN HER REPLY THE ASSESSEE HAS STATED THA T THE ADDITION OF ` 1 41 150/- WAS ACCEPTED BY HER IN ORDER TO PURCHASE PEACE WITH THE DEPARTMENT AND THE CASH CREDIT OF ` 13 LATHS OFFERED DURING THE COURSE OF SURVEY SHOULD NOT BE TREATED AS CONCEALED INCOME . HOWEVER THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION FILED BY THE ASSESSEE AND PLACED HIS RELIANCE IN THE CASE OF CIT VS VIDHYAGAURI ITA NO. 1211/MDS./2016 :- 3 -: NATWARLAL (1993) 238 ITR 1991 (GUJ) WHEREIN THE HON BLE GUJARAT HC HAS HELD THAT THE MERE DISCLOSURE OF UNDISCLOSED IN COME AS CASH CREDIT WOULD NOT TANTAMOUNT TO A DISCLOSURE SO AS TO SAVE THE ASSESSEE FROM THE CONSEQUENCES OF CONCEALED INCOME. THE ASSESSING OFFICER TREATED THE INCOME DISCLOSED DURING THE COURSE OF SURVEY ON ACCOUNT OF CASH CREDIT AS WELL AS BATTA EXPENSES AS CONCEALED INCOM E AND ACCORDINGLY LEVIED THE MINIMUM PENALTY AT ` 4 55 918/- (A.Y.2005-06) AND ` 5 45 853/- (A.Y.2006-07). AGGRIEVED WITH THE ORDER OF LD. ASSESSING OFFICER THE ASSESSEE CARRIED THE APPEAL BEFORE LD. CIT(A). ON APPEAL LD.CIT(A) CONFIRMED THE LEVY OF PENALTY. AGGRIEVED NOW THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY ASSESSEE IN THESE CASES CAME IN APPEAL BEFORE THIS TRIBUNAL CHALLENGING THE QUANTUM ADDITION IN 447 & 448/MDS./2009 FOR ASSESSMENT YEARS 2005-06 2006-07 RESPECTIVELY VIDE ORDER DATED 28.05.2010 THE TRIBUNAL OBSERVED THAT IN THESE CAS ES ASSESSMENT ORDERS WERE PASSED ON 31.12.2007 FOR BOTH THE ASSES SMENT YEARS 2005-06 & 2006-07. ACCORDINGLY IT WAS OBSERVED TH AT INCOME TAX OFFICER WARD-I(3) KUMBAKONAM DID NOT HAVE JURISDICT ION OVER THE ASSESSEE WHETHER THE RETURNED OR ASSESSED INCOME AS ON FIRST APRIL OF THE RELEVANT FINANCIAL YEAR WAS MORE THAN 5 LAKHS A ND IN THESE CASES ITA NO. 1211/MDS./2016 :- 4 -: ASSESSMENT ORDERS WERE PASSED ADDITIONAL CIT KUMBA KONAM WHO HAS NO JURISDICTION AND IT WAS OBSERVED AS FOLLOWS:- 6. ALL THE ABOVE ASSESSMENT ORDERS WRE PASSED ON 31.12.2007 BY THE ADDITIONAL CIT KUMBAKONAM RANGE KUMBAKONAM. ON THE OTHER HAND THE LD.D.R DEFENDED THE ACTION OF THE A O. 7. AFTER EXAMINING THE ENTIRE RECORDS IT WAS SEEN THAT THE ASSESSMENT ORDERS WERE PSSED ON 31.12.2007 AND AS P E THE RECORDS AS ON 1.4.2008 THE TOTAL INCOMES COMPUTED IN THESE CASES WAS INDIVIDUALLY MORE THAN RS.5 LAKHS. IN VIEW OF T HE ABOVE NOTIFICATION (AS EXTRACTED ABOVE) WHERE THE ITO WA RD I(3) KUMBAKONAM TO WHOM THE ABOVE FILES WERE TRANSFERRED ON 17.1.2008 BY THE KUBAKONAM RANGE KUMBAKONAM BY PRO CEEDINGS DATED 17.1.2008 UNDR C.R NO.S/JCT/KUM/07-08 ARE CON TRARY TO NOTIFICATION NO.1/2006-07 DT.2.6.05 ISSUED BY THE CCIT TIRUCHIRAPALLI. IT IS TRUE THAT SEC.120 CONFE RS THE PRIMARY JURISDICTION ONVARIOUS A.OS AND SUB SECTION (3) OF SEC.120 PRESCRIBES THE CRITERIA TO BE TAKEN INTO ACCOUNT FOR SUCH ASSU MPTION OF JURISDICTION. THE CCIT HAS ISSUED NOTIFICATION IN P URSUANCE OF THE POWERS CONTAINED IN SEC.120(2) AND HAS CHOSEN THE I NCOME CRITERIA TO CONFER JURISDICTION ONVARIOUS A.OS INCLUDING THE PRESENT ITO. SEC.124 DEALS WITH THE JURISDICTION OF THE AO. THE SORUCE OF POWER U/S.124 IS THE DIRECTIONS OR ORDERS ISUSED U/S.120 SUB SECTIONS (1) OR (2). THUS THE PRIMARY JURISDICTION IS DETERMINED B Y ORDERS PASSED U/S.120. SEC.120 DEALS WITH THE CONFERRING OF THE J URISDICTION WHILE SEC.124 & 127 DEAL WITH THE SOURCE OF JURISDICTION. A EFFECT IN JURISDICTION WHETHER IT IS PECUNIARY OR TERRITORIAL OR IN RESPECT OF THE ITA NO. 1211/MDS./2016 :- 5 -: SUBJECT MATTER OF THE CASE OR STRIKES AT THE VERY A UTHORITY OF THE COURT TO PASS ANY DECREE AND SUCH A DEFECT CANNOT B E CURED EVEN BY CONSENT OF THE PARTIES. THIS PRINCIPLE WAS REITE RATED IN SUNDER DASS V. RAM PRAKASH RIR 1977 SC 1201 AND CHIRANFILA L SHRILAL GONENKA VS. JASJIT SINGH (1993) 2 SWCC 507. IN RAJA JAGADAMBIKA PRATAP NARAIN SINGH VS. CBDT (1975) 100 ITR 698 TH E HONBLE SUPREME COURT HELD THAT MERELY BECAUSE AN ORDER HA S BEEN CEASED BY THE OFFICER AND HAS NOT BEEN APPEALED AGA INST IT DOES NOT BECOME ----- THE TRANSFER OF THE FILES BY THE JCIT TO THEITO WARD I(3) KUMBAKONAM IS PATENTLY ILLEGAL AND AB INITIO VOID AND SUCH A VOID TRANSFER CANNOT CONFER JURISDICTION ON AN ITO WHO IS NOT COMPETENT TO PASS ORDERS WHEREIN THE TOTAL INCOME C OMPUTED BY THE ADDITIONAL CIT WAS ADMITTEDLY MORE THAN RS.5 LA KHS. 8. IN VIEW OF THE MATTER WE HOLD THAT ALL THE ASSE SSMENT ORDERS WHICH ARE SUBJECT MATTER OF APPEALS BEFORE US LACKE D VALID JURISDICTION. ACCORDINGLY ALL THE ORDERS ARE QUASH ED BEING WITHOUT JURISDICTION. THE CONCERNED AO HAVING A VALID JURIS DICTIONS AT LIBERTY TO TAKE FURTHER NECESSARY ACTION IN THESE CASES IF THE LAW SO PERMITS SPECIFICALLY WITH REFERENCE TO LIMITATION ETC. 3.1 IN VIEW OF THE ABOVE WHEN THE ASSESSMENT ORDE R ITSELF IS BAD IN LAW WHICH PASSED WITHOUT JURISDICTION THE CONSEQU ENT PENALTY ORDER ON THE BASIS OF WHICH IT WAS PASSED CANNOT STAND ON ITS OWN LEG WHICH HAS TO BE QUASHED ADMITTEDLY. ACCORDINGLY WE HAVE NO HESITATION IN ANNULLING THE PENALTY ORDER WHICH IS PASSED BY THE AO HAVING NO ITA NO. 1211/MDS./2016 :- 6 -: JURISDICTION I.E. ADDITIONAL COMMISSIONER OF INCOM E TAX. ACCORDINGLY BOTH THE PENALTY ORDERS ARE QUASHED. 4. HOWEVER THE CONCERNED AO HAVING A VALID JURISD ICTION HAS AT LIBERTY TO TAKE FURTHER NECESSARY ACTION IN THESE T WO CASES IF THE LAW SO PERMITS SPECIFICALLY WITH REFERENCE TO LIMITATIO N ETC. 5. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON 05 TH OCTOBER 2016 AT CHENNAI SD/ - SD/ - ( . ) ( G.PAVAN KUMAR ) ! / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 05 TH OCTOBER 2016 K S SUNDARAM &'(()*( +* / COPY TO: ( 1 . / APPELLANT 3. ( (- . / CIT(A) 5. */0 (1 / DR 2. / RESPONDENT 4. ( / CIT 6. 02(3 / GF