INCOME TAX OFFICER-17(1)(4), MUMBAI v. M/S. ELECTRIC CORPORATION OF INDIA, MUMBAI

ITA 5093/MUM/2019 | 2009-2010
Pronouncement Date: 18-03-2021 | Result: Dismissed

Appeal Details

RSA Number 509319914 RSA 2019
Assessee PAN AAAFE0529L
Bench Mumbai
Appeal Number ITA 5093/MUM/2019
Duration Of Justice 1 year(s) 7 month(s) 12 day(s)
Appellant INCOME TAX OFFICER-17(1)(4), MUMBAI
Respondent M/S. ELECTRIC CORPORATION OF INDIA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2021
Appeal Filed By Department
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 18-03-2021
Last Hearing Date 24-02-2021
First Hearing Date 24-02-2021
Assessment Year 2009-2010
Appeal Filed On 05-08-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 5093/MUM/2019 ASSESSMENT YEAR: 2009-10 ITO-17(1)(4) ROOM NO. 115 1 ST FLOOR AAYAKAR BHAVAN MUMBAI-400020. VS. M/S ELECTRIC CORPORATION OF INDIA SHALIMAR INDUSTRIAL ESTATE G-9 MATUNGA LABOUR COMP MATUNGA MUMBAI-400019. PAN NO. AAAFE 0529 L APPELLANT RESPONDENT REVENUE BY : MR. SANJAY J. SETHI DR ASSESSEE BY : NONE DATE OF HEARING : 24/02/2021 DATE OF PRONOUNCEMENT : 18/03/2021 ORDER PER N.K. PRADHAN A.M. THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2009-10. THE APPEAL IS DIRECTED AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS)-56 MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 147 OF THE I NCOME TAX ACT 1961 (THE ACT). THOUGH THE CASE WAS FIXED FOR HEARING ON24.02.2021 NEITHER THE ASSESSEE NOR ITS AUTHORIZED REPRESENTATIVE APPEARED BEFORE THE BENCH ON THE ABOVE DATES. AS THERE IS NON-COMPLIANCE BY THE ASSE SSEE WE ARE PROCEEDING TO M/S ELECTRIC CORPORATION ITA NO. 5093/M/2019 2 DISPOSE OFF THIS APPEAL AFTER EXAMINING THE MATERIA LS AVAILABLE ON RECORD AND AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE ( DR). 2. THE GROUNDS OF APPEAL FILED BY THE REVENUE READ AS UNDER : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN TREATING THE NOTICE UNDER SECTION 148 OF THE ACT TO BE DEFECTIVE ENTIRELY ON TECHNICAL GROUNDS NOTWITHSTANDING THAT THE NOTICE UNDER SECTION 148 WAS SERVED IN PERSON AND THE SIGNATURE OF THE R ECIPIENT OF THE NOTICE IS AVAILABLE ON RECORDS. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN NOT CONSIDERING THAT SECTION 148 OF THE IN COME-TAX ACT REQUIRES THE NOTICE TO BE ISSUED WITHIN THE LIMITATION PERIOD A ND THERE IS NO STIPULATION THAT SERVICE OF THE SAME SHOULD BE MADE WITHIN THE AFORE SAID PERIOD. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN NOT CONSIDERING THAT BY ALLOWING THE ASSES SEE'S APPEAL ON PURELY TECHNICAL GROUNDS HE HAD INDIRECTLY ALLOWED ASSESS EE'S CLAIM OF BOGUS PURCHASE NOTWITHSTANDING THAT THE SAME WAS MADE ON THE BASIS OF CREDIBLE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT SUPPORTED B Y INDEPENDENT ENQUIRIES CONDUCTED BY THE ASSESSING OFFICER? 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2009-10 ON 24.0 9.2009 DECLARING TOTAL INCOME AT RS.1 44 280/-. THE ASSESSEE DEALS IN ELEC TRICAL APPLIANCES. ON RECEIPT OF INFORMATION FROM THE DIRECTOR GENERAL OF INCOME TAX (INV) MUMBAI THAT THE ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS OF RS.9 23 867/- (RS.4 04 749/- FROM SHRUTI SALES CORPORATION AND RS.5 19 118/- FRO M KARAN ENTERPRISES) THE ASSESSING OFFICER (AO) ISSUED NOTICE U/S 148 FOR RE OPENING THE ASSESSMENT. IN RESPONSE TO IT AS RECORDED BY THE AO THE ASSESSEE STATED THAT THE RETURN OF INCOME FILED ON 24.09.2009 MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE M/S ELECTRIC CORPORATION ITA NO. 5093/M/2019 3 U/S 148 OF THE ACT. DURING THE COURSE OF RE-ASSESSM ENT PROCEEDINGS AS RECORDED BY THE AO THE ASSESSEE FILED (I) COPIES O F LEDGER ACCOUNTS OF THE SUSPICIOUS PARTIES (II) COPIES OF PURCHASE BILLS (III) BANK STATEMENTS AND (IV) COPY OF PURCHASE REGISTER FOR THE FY 2008-09. HOWEVER THE AO OBSERVED THAT THE ASSESSEE FAILED TO FILE DIRECT EVIDENCE SUCH AS STOCK REGISTER JOURNAL AND INDIRECT EVIDEN CE SUCH AS DELIVERY CHALLANS LORRY RECEIPTS OCTROI PAYMENT ETC. CONSIDERING THE FACTS OF THE CASE THE AO ESTIMATE D THE PROFIT @ 12.5% OF THE DISPUTED PURCHASES OF RS.9 23 867/- AND ACCORDI NGLY BROUGHT TO TAX RS.1 15 483/-. 4. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE F ILED AN APPEAL BEFORE THE LD. CIT(A). IT WAS STATED BEFORE HIM THAT NOTICE U/ S 148 WAS NOT SERVED TO THE ASSESSEE AND NO LETTER WAS FILED TREATING THE RETUR N ALREADY FILED PURSUANT TO NOTICE U/S 148 OF THE ACT. THE GROUNDS OF APPEAL FI LED BY THE ASSESSEE BEFORE THE LD. CIT(A) PERTAIN TO THE ABOVE CONTENTIONS. IN ORDER TO VERIFY THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL THE LD . CIT(A) ISSUED A LETTER DATED 03.12.2018 TO THE AO TO VERIFY AND REPLY (I) WHETHE R NOTICE U/S 148 WAS SERVED AND (II) WHETHER THE ASSESSEE HAD REQUESTED TO TREA T THE ORIGINAL RETURN AS ONE FILED IN RESPONSE TO NOTICE U/S 148. THE LD. CIT(A) MENTIONED THAT IF THE ANSWER TO THE ABOVE TWO QUERIES IS IN AFFIRMATIVE COPY OF PROOF OF SAME BE FORWARDED BY 15.12.2018. AS THERE WAS NO REPLY HE DIRECTED THE AO TO FORWARD A REPORT BY 23.04.2019 AND IN ALTERNATE FORWARD ASSESSMENT RECORD TO HIS OFFICE. THERE WAS NO RESPONSE FROM THE AO. M/S ELECTRIC CORPORATION ITA NO. 5093/M/2019 4 THEREAFTER THE LD. CIT(A) SENT A REMINDER TO THE A O FOR COMPLIANCE BY 15.05.2019. AGAIN THERE WAS NO RESPONSE FROM THE AO . THEREFORE THE LD. CIT(A) PROCEEDED TO DECIDE THE APPEAL ON THE BASIS OF FORM 35 AND ENCLOSURES BEFORE HIM. HE ALLOWED THE APPEAL FILED BY THE ASSESSEE BY OBSERVING THAT : 7. WHEN A PERSON MAKES A CLAIM HE IS RESPONSIBLE FOR SAME AS A FALSE STATEMENT BEFORE AN INCOME TAX AUTHORITY CAN ATTRACT PROSECUT ION. IN GROUND THE CLAIM IS THAT A PARTICULAR NOTICE IS NOT SERVED AND A PARTICULAR LE TTER WAS NOT FILED. THE ONLY PERSON TO DISPROVE THE CLAIM IS ASSESSING OFFICER HERE AS (A) AS ISSUING AUTHORITY OF NOTICE U/S 148 HE IS BOUND TO KEEP ACKNOWLEDGMENT AND (B) IF A LETTER IS RECEIVED HE IS DULY BOUND PRODUCE THE LETTER OR FURTHER DULY AUTHENTICA TED COPY OF ORDER SHEET SIGNED BY COMPETENT PERSON. 8. ONCE A CLAIM IS MADE AND NOT DISPROVED DESPITE R EASONABLE OPPORTUNITY PROVIDED TO ASSESSING OFFICER BEING ELEMENTARY PART ICULARS THE MATTER GOES IN FAVOUR OF THE CLAIMANT I.E. THE APPELLANT. THE REASSESSME NT HAS AT INITIATION STAGE TWO PARTS SERVICE OF NOTICE U/S 148 AND COMPLIANCE TO SAME. B OTH THESE ARE NOT ESTABLISHED DESPITE MAKING A RECORDING IN ASSESSMENT ORDER. THU S THE CLAIM OF APPELLANT RAISED IN THE GROUND IS FOUND TO BE VALID. 9. IN VIEW OF THE ABOVE I CANCEL THE REASSESSMENT M ADE BY THE ASSESSING OFFICER. THE 5 GROUNDS AGAINST DEFECTIVE NOTICE U/S 148ARE ALLOWED. 10. OTHER GROUNDS OF APPEAL NEEDS NO ADJUDICATION I N VIEW OF DECISION ABOVE. 11. THE APPEAL IS ALLOWED. 5. BEFORE US THE LD. DR RELIES ON THE ORDER OF THE AO. M/S ELECTRIC CORPORATION ITA NO. 5093/M/2019 5 WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE INSTANT CASE THE GROUNDS OF APPEAL FILED BE FORE THE LD. CIT(A) ARE AS UNDER : 1. THE INCOME TAX OFFICER WHILE PASSING THE ORDER U/S 143(3) R.W.S 147 OF THE INCOME TAX ACT HAS MERELY STATED IN HIS OPENING PA RA OF THE ASSESSMENT ORDER THAT THE ASSESSEES CASE WAS REOPENED FOR THE YEAR 2009- 10 BY ISSUING NOTICE U/S 148 OF THE ACT ON 20.03.2014. HE HAS NOWHERE STATED WHEN T HE SAID NOTICE WAS SERVED ON THE APPELLANT. 2. THE AUTHORIZED REPRESENTATIVE/PARTNER OF THE FIR M HAD OBJECTED TO THE ISSUE OF THE NOTICE U/S 142(1) ON LETTER DATED 03 FEBRUARY 2 015 ON THE GROUND THAT NO NOTICE U/S 148 WAS ISSUED AND THAT THE NOTICE U/S 142(1) I SSUED IS BAD IN LAW. 3. THE APPELLANT DID NOT AT ANY TIME REQUESTED THE INCOME TAX OFFICER TO TREAT THE RETURN FILED ORIGINALLY IN RESPONSE TO NOTICE U/S 1 48 AS IS STATED BY THE INCOME TAX OFFICER IN HIS ORDER. IN FACT WHEN NO PROPER NOTICE IS SERVED WITHIN THE PRESCRIBED TIME HOW CAN THE APPELLANT ASK THE OFFICER TO TREA T THE ORIGINALLY RETURN AS FILED IN RESPONSE TO THE SAID IMPUGNED NOTICE? 4. THE APPELLANT STATED THAT THE ORDER PASSED BY TH E INCOME TAX OFFICER ON 27TH FEBRUARY 2015 FOR THE YEAR 2009-10 U/S 143(3) R.W.S . 147 IS BAND IN LAW AND NEEDS TO BE QUASHED. 5. WITHOUT PREJUDICE TO THE ABOVE THE APPELLANT SU BMIT THE FOLLOWING GROUNDS OBJECTING TO THE ADDITION MADE TO THE RETURNED INCO ME. 5.1 CONSIDERING THE ABOVE GROUNDS OF APPEAL THE LD . CIT(A) HAS RIGHTLY CALLED FOR A REPORT FROM THE AO. SECTION 250(4) OF THE ACT STATES THAT THE COMMISSIONER (APPEALS) MAY BEFORE DISPOSING OF ANY APPEAL MAKE SUCH FURTHER INQUIRY AS HE THINKS FIT OR MAY DIRECT THE ASSESSING OFFICER TO MAKE M/S ELECTRIC CORPORATION ITA NO. 5093/M/2019 6 FURTHER INQUIRY AND REPORT THE RESULT OF THE SAME T O THE COMMISSIONER (APPEALS). AS MENTIONED EARLIER THERE WAS REPEATED NON-COMPLI ANCE BY THE AO TO THE LETTERS ISSUED BY THE LD. CIT(A). IN SUCH A SIT UATION LIKE THE PRESENT ONE THE LD. CIT(A) HAS RIGHTLY DECIDED THE APPEAL ON THE BA SIS OF MATERIALS AVAILABLE ON RECORD BEFORE HIM. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE NARRATED ABOVE WE AFFIRM THE ORDER OF THE LD. CIT(A). 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/03/2021. SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHA N) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 18/03/2021 RAHUL SHARMA SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSISTANT REGISTRAR) ITAT MUMBAI