DCIT, Circle-11(3),, v. Johra Emporium,,

ITA 2451/DEL/2000 | 1994-1995
Pronouncement Date: 30-11-2011 | Result: Dismissed

Appeal Details

RSA Number 245120114 RSA 2000
Bench Delhi
Appeal Number ITA 2451/DEL/2000
Duration Of Justice 11 year(s) 10 month(s) 17 day(s)
Appellant DCIT, Circle-11(3),,
Respondent Johra Emporium,,
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 30-11-2011
Date Of Final Hearing 16-11-2011
Next Hearing Date 16-11-2011
Assessment Year 1994-1995
Appeal Filed On 13-01-2000
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I DELHI BEFORE SHRI RAJPAL YADAV AND SHRI K.G. BANSAL ITA NO. 2469(DEL)/2000 ASSESSMENT YEAR: 1994-95 M/S ZOHRA EMPORIUM ASSIS TANT COMMISSIONER OF INCOME 1 ARYA SAMAJ ROAD VS. TAX CIRCLE 11(3) NEW DELHI. KAROL BAGH. ITA NO. 2451(DEL)/2000 ASSESSMENT YEAR: 1994-95 ASSISTANT COMMISSIONER OF M/S ZOH RA EMPORIUM INCOME-TAX CIRCLE 11(3) VS. 1 ARYA SAMAJ ROAD NEW DELHI. NEW DELHI. C.O. NO. 7(DEL)/2004 (ARISING OUT OF ITA NO. 2451(DEL)/2000) ASSESSMENT YEAR: 1994-95 M/S ZOHRA EMPORIUM ASSIS TANT COMMISSIONER OF INCOME 1 ARYA SAMAJ ROAD VS. TAX CIRCLE 11(3) NEW DELHI. KAROL BAGH. (APPELLANT) (RESPON DENT) ASSESSEE BY : SHRI RAJ KUMAR C.A. RESPONDENT BY: SH RI A.K. MONGA SR. DR CONTD. PAGE 2 ITA NOS. 2469 &2451(DEL)/2000& C.O. NO. 7(DEL)/2004 2 DATE OF HEARING : 21.11.2011 DATE OF PRONOUNCEMENT: 30 .11.2011. ORDER PER K.G. BANSAL : AM THESE CROSS APPEALS AND CROSS OBJECTION WERE ARGUED IN A CONSOLIDATED MANNER BY THE LD. COUNSEL FOR THE ASS ESSEE AND THE LD. DR. THEREFORE WE THINK IT FIT TO PASS A CONSOLIDATED ORDER. 1.1 AT THE TIME OF FILING THE APPEAL THE ASSESSEE HAD TAKEN UP SIX GROUNDS. THESE GROUNDS RELATE TO-(I) REJECTIO N OF BOOKS OF ACCOUNT BY INVOKING THE PROVISION CONTAINED IN SECTION 145 (2) OF THE INCOME-TAX ACT 1961; (II) ESTIMATION OF THE TURNOVER FOR THE W HOLE OF THE YEAR ENDED ON 31.03.1994 AT RS. 2.50 CRORE AGAINST DECLARED TUR NOVER OF RS. 2 12 35 270/-; (III) ADDITION OF RS. 9 45 324/- FOR THE WHOLE OF THE YEAR ENDED ON 31.03.1994 BY APPLYING GROSS PROFIT RATE AT 2 5.11% ON THE ENHANCED SALES OF RS. 37 64 730/-; (IV) ENHANCEMENT AS AT (III) WITHOUT ISSUING ANY NOTICE OF ENHANCEMENT U/S 251(2) OF THE ACT; AN D (V) CHARGING OF INTEREST U/S 234B OF THE ACT. GROUND NO. 6 IS GENERAL IN NATURE. ITA NOS. 2469 &2451(DEL)/2000& C.O. NO. 7(DEL)/2004 3 1.2 THE ASSESSEE MOVED TWO NEW GROUNDS GROUN D NOS. 7 AND 8 BY MOVING AN APPLICATION DATED 13.03.2004. IN GROUN D NO. 7 REFERENCE TO AUDIT OF THE CASE U/S 142(2A) HAS BEEN CHALLENGE D. IN GROUND NO. 8 THE ACCEPTANCE OF REPORT UNDER THE AFORESAID PROVIS ION HAS BEEN CHALLENGED ON THE GROUND THAT IT IS NON-SPECIFIC NON-PRECISE UNCLEAR GROSSLY CONFUSING AND CONTAINS DISCLAIMERS. THESE GROUNDS WERE AD MITTED ON 01.09.2004 AS PER ORDER MADE ON THE APPLICATION ITSELF. 1.3 THE ASSESSEE MOVED THREE MORE ADDITIONAL GR OUNDS BY WAY OF AN APPLICATION ON 16.02.2009. THESE ARE SERIAL NUM BERED BY US AS GROUND NOS. 9 10 AND 11. GROUND NO. 9 IS THAT THE REF ERENCE U/S 142(2A) IS ILLEGAL AND BAD IN LAW. GROUND NO. 10 IS THAT TH E REFERENCE IS ILLEGAL BAD IN LAW AND WITHOUT JURISDICTION AS IT HAS BEEN M ADE FOR THE WHOLE OF THE PERIOD FROM 01.04.1993 TO 31.03.1994. GROUND NO . 11 IS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ASSESSM ENT ORDER FRAMED ON 07.11.1997 IS ILLEGAL AND BAD IN LAW AND WITHOUT JURISDICTION BEING BARRED BY LIMITATION. IT IS SEEN THAT ON 01.07.2010 AN ORDER-SHEET ENTRY IS MADE TO THE EFFECT THAT THE CASE WAS HEARD ON THE LEGAL GROUND REGARDING LIMITATION PERIOD FOR OBTAINING SPECIAL AUDIT REPORT U/S 1 42(2A). ANOTHER ORDER- SHEET ENTRY IS MADE ON 14.02.2011 THAT THE LD. DR HAS FILED AN APPLICATION ITA NOS. 2469 &2451(DEL)/2000& C.O. NO. 7(DEL)/2004 4 DATED 04.02.2011 FOR HEARING THE CASE DE-NOVO AS THE CONCERNED DR SMT. PRATIMA KAUSHIK WHO ARGUED THIS CASE ON L EGAL POINT HAS PROCEEDED ON LEAVE FOR SIX MONTHS AND THE PRESENT SENIOR DR MRS. ANUSHA KHURANA IS NO LONGER ATTACHED TO THIS BENCH. IN VIEW THEREOF THE APPEALS WERE DE-HEARD. THE CASE HAS FINALLY COME UP FOR HEARING ON 21.11.2011. 1.4 THE CASE OF THE LD. COUNSEL IS THAT THE GROU ND REGARDING LIMITATION IS PURELY A LEGAL GROUND AS NO NEW FACT IS REQUI RED TO BE BROUGHT ON RECORD FOR DECIDING THIS GROUND. THEREFORE IN THE LIGH T OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF NATIONAL THER MAL POWER COMPANY LTD. 229 ITR 383 THE SAME MAY BE ADMITTED. TH E LD. SENIOR DR RAISED NO ARGUMENT REGARDING ADMISSION OF THE GROUND. AS THE GROUND IS PURELY LEGAL IN NATURE THE SAME IS ADMITTED FOR ADJUDI CATION. FURTHER AS IT GOES TO THE ROOT OF THE MATTER IT IS TAKEN UP AT THE OUTSET FOR DECISION. 2. THE LD. COUNSEL SUBMITTED SYNOPSIS ON 01.07.201 0. THIS WRITE UP WAS READ OUT AS ARGUMENTS OF THE ASSESSEE ON T HE ISSUE THAT THE ORDER OF ASSESSMENT IS BARRED BY LIMITATION. IT IS SUBMITT ED THAT THE PERIOD OF LIMITATION FOR ASSESSMENT YEAR 1994-95 EXPIRES O N 31.3.1997. THE COMMISSIONER OF INCOME-TAX APPROVED THE PROPOSAL OF THE ASSESSING ITA NOS. 2469 &2451(DEL)/2000& C.O. NO. 7(DEL)/2004 5 OFFICER FOR GETTING THE CASE AUDITED U/S 142(2A) I N HIS LETTER DATED 18.03.1997. THIS IS EVIDENCED BY THE FINDING OF TH E LD. CIT(APPEALS) IN PARAGRAPH NO. 5.2 AT PAGE NO. 13 OF THE IMPUGN ED ORDER THAT THE PROPOSAL WAS ACCEPTED BY THE COMMISSIONER OF INCOME-TAX UND ER HIS LETTER DATED 18.03.1997 WHEREBY M/S GARG BROTHERS & ASSOCIATES WERE APPOINTED SPECIAL AUDITORS. THE TERMS OF REFERENCE HAVE ALSO BEEN REPRODUCED IN THIS PARAGRAPH. THE ORIGINAL TIME LIMIT FIXED BY THE ASSESSING OFFICER IS NOT ASCERTAINABLE. THE DATE OF COMPLETION OF AU DIT WAS EXTENDED BY AN ORDER DATED 14.04.1997 ON ACCOUNT OF INVOLVEMENT OF THE AUDITOR IN AN ACCIDENT. THE EXTENSION WAS GRANTED UP TO 31.0 7.1997. THIS IS EVIDENCED BY THE FINDING OF THE LD. CIT(APPEALS) ON PAGE NO. 15 TO THE EFFECT THAT SHRI K.P. GARG THE AUDITOR HAD MET WITH AN ACCIDENT O N 14.04.1997 THEREFORE THE PERIOD FOR CONDUCTING THE AUDIT WAS EXTENDED TILL 31.07.1997. THIS DATE MAY BE TAKEN AS THE DATE FIXED BY THE ASSESSING OFFICER FOR THE COMPLETION OF THE AUDIT. THE PERIOD WAS AGAIN EXTENDED UP T O 12.09.1997 AS EVIDENCED BY THE FINDING IN THE IMPUGNED ORDER ON PAGE 16 THAT BECAUSE OF ONE REASON OR THE OTHER THE TIME FOR COMPLETION OF AUDIT WAS EXTENDED TILL 12.09.1997. THE AUDIT REPORT WAS FINALIZED ON 11.09.1997 WHICH WAS FURNISHED TO THE AO ON 12.09.1997. HOWEVER IT IS SEEN FROM THE APPLICATION ON PAGE 16 OF THE IMPUGNED ORDER THAT THE AUDIT REPORT WAS ITA NOS. 2469 &2451(DEL)/2000& C.O. NO. 7(DEL)/2004 6 SUBMITTED UNDER LETTER DATED 09.09.1997. THIS GETS CONFIRMED FROM THE ASSESSMENT ORDER IN WHICH ON PAGE NO. 4 IT IS ME NTIONED THAT THE AUDIT REPORT DATED 09.09.1997 PREPARED BY M/S GARG BRO THERS & ASSOCIATES WAS SUBMITTED TO HIM BY THE ASSESSEE ON 12.09.1997 . THE ORDER OF ASSESSMENT WAS PASSED ON 07.11.1997. 2.1 THE ARGUMENTS OF THE LD. COUNSEL ARE THAT UND ER THE THEN EXISTING PROVISIONS OF SECTION 142(2C) THE EXTENSION OF T IME FOR AUDIT COULD BE GRANTED ONLY ON AN APPLICATION MADE BY THE ASSESS EE IN THIS BEHALF SHOWING GOOD AND SUFFICIENT REASONS. IN SUCH A SITUATION THE ASSESSING OFFICER COULD EXTENT THE TIME FOR AUDIT SO HOWEVER THAT THE AGGREGATE OF THE PERIOD ORIGINALLY FIXED AND THE PERIOD OR PERIODS SO EXT ENDED SHALL NOT EXCEED 180 DAYS. IN THIS CASE THE ASSESSEE HAD NEVER MADE ANY REQUEST FOR EXTENSION OF TIME. THE EXTENSION WAS GRANTED ON THE REQUEST OF THE AUDITOR. THEREFORE THE EXTENSION COULD NOT HAVE BEEN GRANTED BY THE ASSESSING OFFICER BEYOND 31.07.1997. THIS IS D ATE FOR FURNISHING THE AUDIT REPORT. HOWEVER THE REPORTED DATED 09.09.1 997 WAS ACTUALLY SUBMITTED ON 12.09.1997 WHICH IS BEYOND THE PRE SCRIBED TIME. ITA NOS. 2469 &2451(DEL)/2000& C.O. NO. 7(DEL)/2004 7 2.2 IN ORDER TO SUPPORT THE AFORESAID CONTENTION RELIANCE HAS BEEN PLACED ON THE DECISION OF HONBLE DELHI HIGH COU RT IN THE CASE OF CIT VS. BISHAN SAROOP RAM KISHAN AGRO PVT. LTD. DATE D 27.05.2011 2011 VI AD (DELHI) 582. IT HAS BEEN HELD THAT UNDER TH E PROVISO AS IT EXISTED BEFORE THE AMENDMENT THE EXTENSION COULD BE GRA NTED ONLY ON AN APPLICATION MADE IN THIS BEHALF BY THE ASSESSEE F URNISHING ANY GOOD AND SUFFICIENT REASON. FOR THE SAKE OF READY REFERENCE PARAGRAPH NOS. 20 21 AND 22 OF THE DECISION ARE REPRODUCED BELOW:- 20. IN THE LIGHT OF INTERPRETATION OF THE PROVISO AS IS EXISTED BEFORE OR AFTER THE AMENDMENT AND THE LEGISLATIVE I NTENT BEHIND THE AMENDMENT AS GATHERED FROM THE MEMORANDUM AND T HE CIRCULAR NOTED ABOVE WE ARE NOT PERSUADED TO AGREE WITH THE INTERPRETATION AS GIVEN BY THE PUNJAB AND HARYANA H IGH COURT IN THE CASE OF JAGJIT SUGAR MILLS COMPANY LIMITED (SUPRA). FURTHER IN VIEW OF OUR ABOVE DISCUSSION IT COMES T O BE CONCLUDED THAT THE TRIBUNAL WAS CORRECT IN HOLDING THAT THE ASSESSMENT ORDER WAS BARRED BY LIMITATION. THAT BEI NG SO WE ANSWER QUESTION NO.1 IN AFFIRMATIVE IN FAVOUR OF TH E ASSESSEE AND AGAINST THE REVENUE. 21. IN VIEW OF FOREGOING DISCUSSION THAT THE AMENDM ENT WHEREBY THE WORD SUO MOTU WERE INSERTED IN SUB SE CTION (2C) OF SECTION 142 OF THE ACT WAS TO BE APPLICABLE WITH EFFECT FROM 1ST APRIL 2008 ONLY THE AMENDMENT CANNOT BE SAID TO BE CLARIFICATORY OR RETROSPECTIVE IN NATURE. THE AMEND MENT WAS PROSPECTIVE AND WAS TO BE APPLICABLE WITH EFFECT FR OM 1ST APRIL 2008 ONLY. ACCORDINGLY WE ANSWER QUESTION NO.2 AGA INST THE REVENUE. 22 IN VIEW OF FOREGOING REASONS ALL THE ABOVE APPE ALS MERIT DISMISSAL AND ARE HEREBY DISMISSED. ITA NOS. 2469 &2451(DEL)/2000& C.O. NO. 7(DEL)/2004 8 2.3 THE LD. SENIOR DR HAD NOTHING TO SAY IN THE M ATTER. 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. IT TRANSPIRES THAT THE APPROVAL TO TH E PROPOSAL OF THE ASSESSING OFFICER WAS GRANTED BY THE COMMISSIONER OF INCOME -TAX ON 18.03.1997. THIS IS THE DATE ON WHICH ORDER FOR AUDIT IS TA KEN TO HAVE BEEN PASSED. IN THIS ORDER THE ASSESSEE WAS REQUIRED TO GET THE BOOKS OF ACCOUNT AUDITED ON OR BEFORE 31.07.1997. THEREAFTER THE PERIOD WA S EXTENDED UP TO 12.09.1997. THIS EXTENSION WAS NOT ON ACCOUNT O F ANY REQUEST FROM THE ASSESSEE. THEREFORE IN TERMS OF DECISION IN THE CASE OF BISHAN SAROOP RAM KISHAN AGRO PVT. LTD. (SUPRA) THERE IS NO VALIDITY OF THE ORDER GRANTING EXTENSION BETWEEN 01.08.1997 TO 12.09.1 997. IN OTHER WORDS THE BOOKS OF ACCOUNT HAD TO BE AUDITED ON OR BE FORE 31.07.1997. FURTHER UNDER CLAUSE (III) OF EXPLANATION 1 OF SECTION 153 THE PERIOD COMMENCING FROM THE DATE ON WHICH THE ASSESSING OFFICER DIRECTS THE ASSESSEE TO GET HIS ACCOUNTS AUDITED UNDER THE A FORESAID PROVISION AND ENDING WITH THE LAST DATE ON WHICH THE ASSESSEE I S REQUIRED TO FURNISH A REPORT OF SUCH AUDIT SHALL BE EXCLUDED IN COMPU TING THE LIMITATION PERIOD FOR MAKING THE ASSESSMENT. THUS ACCORDING TO THIS PROVISION PERIOD OF FOUR MONTHS AND 13 DAYS STARTING FROM 18.03.199 7 TO 31.7.1997 HAS TO BE ITA NOS. 2469 &2451(DEL)/2000& C.O. NO. 7(DEL)/2004 9 EXCLUDED IN RECKONING THE LIMITATION PERIOD FOR MA KING THE ASSESSMENT. IF THE EXTENDED TIME OF FOUR MONTHS AND 13 DAYS I S TAKEN INTO ACCOUNT THE LAST DATE FOR MAKING THE ASSESSMENT WAS 13.07.1 997. AS AGAINST THE AFORESAID THE ASSESSMENT HAS BEEN COMPLETED ON 07.11.2011. THUS THE ASSESSMENT IS CLEARLY BARRED BY LIMITATION U/S 15 3 OF THE ACT. IN VIEW THEREOF IT IS HELD THAT THE ORDER OF ASSESSMENT IS BAD IN LAW. 4. IN VIEW OF THE AFORESAID FINDING THERE IS NO NE ED FOR US TO DECIDE VARIOUS GROUNDS TAKEN IN THIS APPEAL THE CROS S APPEAL AND THE CROSS OBJECTION ON MERITS. 5. THE RESULT OF AFORESAID DISCUSSION IS -(I) TH E APPEAL OF THE ASSESSEE IS ALLOWED AS AFORESAID; (II) THE APPEAL OF THE REVE NUE IS DISMISSED AS INFRUCTUOUS; AND (III) THE CROSS OBJECTION OF THE ASSESSEE IS ALSO DISMISSED AS INFRUCTUOUS. SD/- SD/- (RAJPAL YADAV) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA COPY OF THE ORDER FORWARDED TO:- (I) M/S ZOHRA EMPORIUM NEW DELHI. (II) ACIT CIRCLE 11(3) NEW DELHI. (III) CIT (IV) CIT(A) (V) THE DR ITAT NEW DELHI. ASSISTANT REGISTRAR.