Smt. Zamirun Bibi, North 24 Parganas v. CIT- XVII, Kolkata, Kolkata

ITA 661/KOL/2011 | 2006-2007
Pronouncement Date: 01-09-2011 | Result: Allowed

Appeal Details

RSA Number 66123514 RSA 2011
Assessee PAN AIYPB3922C
Bench Kolkata
Appeal Number ITA 661/KOL/2011
Duration Of Justice 4 month(s) 2 day(s)
Appellant Smt. Zamirun Bibi, North 24 Parganas
Respondent CIT- XVII, Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 01-09-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 01-09-2011
Assessment Year 2006-2007
Appeal Filed On 29-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE /AND ! . '# . ) [BEFORE HONBLE SRI MAHAVIR SINGH JM & HONBLE SHR I C. D. RAO AM] $ $ $ $ / I.T.A NO. 661/KOL/2011 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR : 2006-07 SMT. ZAMIRUN BIBI VS. COMMISSIONER OF INCOME-T AX-XVII KOL (PAN-AIYPB 3922 C) (*+ /APPELLANT ) ( -*+/ RESPONDENT ) FOR THE APPELLANT: SHRI K. M. ROY FOR THE RESPONDENT: SHRI A. K. SINGH . / ORDER PER MAHAVIR SINGH JM ( ) THIS APPEAL BY ASSESSEE IS ARISING OUT OF REVISION ORDER OF CIT-XVII KOLKATA PASSED U/S. 263 OF THE INCOME TAX ACT 1961 IN APPEAL NO. CIT-XVII/U/S.263/2010-11/1086-1088 DATED 29.03.2011. ORIGINAL ASSESSMENT WAS FRAMED BY ITO WARD-50(1) KOLKATA U/S. 143(3) OF THE INCOME TAX ACT 1961 (HEREINAFTER REFERRED T O AS THE ACT) FOR ASSESSMENT YEAR 2006- 07 VIDE HIS ORDER DATED 24.10.2008. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE REVISION ORDER OF CIT-XVII KOLKATA. FOR THIS ASSESSEE HAS RAISED FOLLOWING S IX GROUNDS: 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE THE LD. CIT HAS MISCONSTRUED THE PROVISIONS OF SECTION 263 OF THE ACT IN HOLDING THE ORDER TO BE ERRONEOUS WHEN THERE WAS NEITHER MISAPPLICATION OF LAW OR FACT IN THE AS SESSMENT ORDER PASSED BY A.O. 2. THAT THE LD. CIT HAD MECHANICALLY APPLIED THE PR OVISIONS OF SECTION 263 WITHOUT REFERRING TO THE ASSESSMENT ORDER WHEN A.O HAD METI CULOUSLY REFERRED TO THE VARIOUS DOCUMENTS EVIDENCES AND WRITTEN SUBMISSIONS RELIED UPON BY HIM AND HAD PASSED THE ORDER AFTER DUE APPLICATION OF MIND. 3. THAT THE LD. CIT HAD FAILED TO CATEGORICALLY CON SIDER THE OBJECTIONS RAISED DURING THE PROCEEDINGS BEFORE HIM AND HAD FAILED TO NOTE THAT EVEN IN SCRUTINY OF SUBSEQUENT YEAR THE A.O. SPECIFICALLY NOTED THAT NO CONTRACTORS WER E ENGAGED. 4. THAT THE LD. CIT HAD FAILED TO APPLY HIS MIND WH ILE PASSING THE ORDER SINCE THE ORDER SUFFERS FROM MANIFEST ERROR AS REGARDS DESIGNATION INCOME DATE OF ORDER ETC. WHICH PROVES THAT ORDER WAS PASSED IN A CASUAL MANNER BRU SHING ASIDE THE OBJECTIONS RAISED IN A PER FUNCTIONARY MANNER. 2 ITA 661/K/2011 SMT. ZAMIRUN BIBI. A.Y.06-07 5. THAT THE ORDER PASSED U/S. 263 IS CLEARLY TIME B ARRED SINCE THE ORDER SENT TO SPEED POST CENTRE ON 7.4.2011 WAS BEYOND PERIOD OF LIMITA TION AS LAID DOWN IN KANUBHAI M. PATEL (HUF) V HIREN BHATT 237 CTR 544 (GUJ.). 6. THAT THE LD. CIT HAD PASSED THE ORDER ONLY TO CA RRY OUT A FRESH ROUND OF INVESTIGATION WHICH IS BEYOND THE PURVIEW OF THE PR OVISION OF SECTION 263. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEF FACTS ARE THAT ASSESSEE IS ENGAGED IN T HE BUSINESS OF STITCHING JOB MAINLY HAND- MADE EMBROIDERY. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS ASSESSEE FILED DETAILS OF PURCHASES SALES SUNDRY DEBTORS MAJOR EXPENSES A SSET PURCHASED WRITTEN SUBMISSIONS. THE ASSESSING OFFICER ALSO VERIFIED MAJOR PURCHASES BY ISSUING NOTICE U/S. 133(6) OF THE ACT. ASSESSEE ALSO PRODUCED BOOKS OF ACCOUNT BANK STATE MENT BILLS AND VOUCHERS INCLUDING WEEKLY LABOUR CHARGE PAYMENT MADE AND THE SAME WERE TEST CHECKED. ASSESSING OFFICER RECORDED THIS FACT IN HIS ASSESSMENT ORDER PASSED U /S. 143(3) OF THE ACT DATED 24.10.2008 (WHICH IS SUBJECT MATTER OF REVISION U/S. 263 OF TH E ACT) FOR ASSESSMENT YEAR 2006-07. WE FIND THAT THE CIT-XVII KOLKATA ISSUED SHOW CAUSE N OTICE REQUIRING THE ASSESSEE TO FURNISH EXPLANATION ON FOLLOWING POINTS: (A) THE REASONS FOR FALL IN NET PROFIT RATE TO 3.7 7%. (B) THE ASSESSEE HAS PAID LABOUR CHARGES OF RS.66 42 355/- TO A SUB-CONTRACTOR WITHOUT MAKING TDS U/S.194C. THE PAYMENTS SHOULD HAVE BEEN DISALLOWED PER PROVISION U/S.40(A)(IA) OF THE I.T. ACT 1961 AS T AX HAD NOT BEEN DEDUCTED AT SOURCE. (C) LETTERS U/S. 133(6) WERE ISSUE FOR VERIFICATIO N OF PURCHASE RELATED TO FINANCIAL YEAR 2005-06. ON PERUSAL OF THE REPLY IT WAS SEEN THAT SOME OF THE PARTIES PROCURED THEIR TRADE LICENCES DURING FINANCIAL YEAR 2007-08. (D) NO ENQUIRY WAS MADE ABOUT THE GENUINENESS OF T DS CERTIFICATE BEFORE PASSING THE ORDER U/S.143(3). (E) THE BANK ACCOUNT STATEMENTS OF THE ASSESSEE W ERE NOT OBTAINED AND EXAMINED. (F) THE AO ALLOWED THE DEPRECIATION CLAIM WITHOUT V ERIFYING THE BILLS/VOUCHERS IN RESPECT OF NEW ASSETS PURCHASED. (G) THE AO SHOULD HAVE OBTAINED CONFIRMATIONS/EVID ENCES OF UNSECURED LOAN AND VERIFIED THE GENUINENESS OF THE SAME. (H) NO DETAILS OF SUNDRY CREDITOR & SUNDRY DEBTORS WERE OBTAINED AND EXAMINED. 4. ON THIS CIT PASSED REVISION ORDER DIRECTING ASS ESSING OFFICER TO CARRY OUT NECESSARY VERIFICATION AS UNDER: I HAVE CONSIDERED THE MATTER AND I HAVE ALSO GONE THROUGH THE ASSESSMENT RECORDS. THE A.O. HAS NOT CARRIED OUT ANY VERIFICATION REGAR DING THE CLAIM THAT PAYMENTS WERE MADE DIRECTLY TO THE LABOURERS/KARIGARS. CONFIRMAT IONS IN AT LEAST IN FEW CASES SHOULD HAVE BEEN OBTAINED AND VERIFICATION DONE ON A TEST CHECK BASIS. FURTHER IT IS SEEN THAT THE BANK STATEMENT HAS NOT BEEN OBTAINED AND LIST O F SUNDRY CREDITORS HAS ALSO NOT BEEN OBTAINED. IN VIEW OF THESE FACTS I AM OF THE OPIN ION THAT THE ASSESSMENT IS ERRONEOUS AND PREJUDICIAL TO REVENUE. I THEREFORE SET ASID E THE SAME AND DIRECT THE A.O. TO DO ASSESSMENT AFRESH AFTER CARRYING OUT NECESSARY VERI FICATION IN RESPECT OF THE ISSUES MENTIONED IN CLAUSES (A) TO (H) OF PARAGRAPH 1 OF T HIS ORDER. 3 ITA 661/K/2011 SMT. ZAMIRUN BIBI. A.Y.06-07 AGGRIEVED ASSESSEE CAME IN APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. IN GOING THROUGH THE FACTS OF THIS CASE AS NARRATE D ABOVE WE FIND THAT THE CIT FOR REVISING THE ASSESSMENT FRAMED BY AO HAS NOT RECORDED ANYWHERE THAT THE ORDER OF AO IS ERRONEOUS SO AS TO PREJUDICIAL TO THE INTEREST OF REVENUE. KEEPING IN MIND THIS FACT AND CIRCUMSTANCES WE ARE OF THE VIEW THAT SECTION 263 OF THE ACT POSTULATES THAT THE COMMISSIONER CAN REVISE AN ORDER PASSED BY THE ASSESSING OFFICER ONLY IF (I) IT IS E RRONEOUS AND (II) IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IF THE ORDER SOUGHT TO B E REVISED IS NOT PREJUDICIAL TO THE INTERESTS OF THE REVENUE THE COMMISSIONER HAS NO JURISDICTION TO REVISE IT. FOR INSTANCE AN ORDER OF ASSESSMENT PASSED BY AN ASSESSING OFFICER WITHOUT C OMPLYING WITH THE PROCEDURE LAID DOWN IN THE PRE 1989 SECTION 144B IS ERRONEOUS BUT CANN OT BE SAID TO BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. SIMILARLY AN ASSESSMENT ORDER PASS ED WITHOUT OBTAINING APPROVAL OF THE INSPECTING ASSISTANT COMMISSIONER AS REQUIRED BY TH E PRE-1989 SECTION 52(2) CANNOT BE SAID TO BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE FAILURE OF THE ASSESSING OFFICER TO DEAL WITH THE CLAIM OF THE ASSESSEE IN THE ASSESSMENT OR DER MAY BE AN ERROR BUT AN ERRONEOUS ORDER BY ITSELF IS NOT ENOUGH TO GIVE JURISDICTION TO THE COMMISSIONER TO REVISE IT UNDER SECTION 263 OF THE ACT. IT MUST FURTHER BE SHOWN THAT THE ORDER WAS PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IT IS NOT EACH AND EVERY ORDER PASSED BY T HE ASSESSING OFFICER WHICH CAN BE REVISED UNDER SECTION 263 OF THE ACT. A BARE READING OF SEC TION 263(1) OF THE ACT MAKES IT CLEAR THAT THE PRE-REQUISITE TO EXERCISE OF JURISDICTION BY TH E COMMISSIONER SUO MOTU UNDER IT IS THAT THE ORDER OF THE AO IS ERRONEOUS IN SO FAR AS IT IS PRE JUDICIAL TO THE INTERESTS OF THE REVENUE. THE COMMISSIONER HAS TO BE SATISFIED WITH TWIN CONDITIO NS NAMELY (I) THE ORDER OF THE AO SOUGHT TO BE REVISED IS ERRONEOUS; AND (II) IT IS PREJUDIC IAL TO THE INTERESTS OF THE REVENUE. IF ONE OF THEM IS ABSENTIF THE ORDER OF THE AO IS ERRONEOUS BUT IS NOT PREJUDICIAL TO THE REVENUE OR IF IT IS NOT ERRONEOUS BUT IS PREJUDICIAL TO THE REVEN UERECOURSE CANNOT BE HAD TO SECTION 263(1) OF THE ACT. THIS VIEW OF OURS IS SUPPORTED BY THE D ECISION OF HONBLE APEX COURT IN THE CASE OF MALABAR INDUSTRIAL CO. LTD. VS. CIT (2000) 243 I TR 83 (SC). THE ORDERS OF THE ASSESSING OFFICER MAY BE BRIEF AND CRYPTIC BUT THAT BY ITSEL F IS NOT SUFFICIENT REASON TO BRAND THE ASSESSMENT ORDERS AS ERRONEOUS AND PREJUDICIAL TO T HE INTERESTS OF THE REVENUE. WRITING AN ORDER IN DETAIL MAY BE A LEGAL REQUIREMENT BUT THE ORDER NOT FULFILLING THIS REQUIREMENT CANNOT BE SAID TO BE ERRONEOUS AND PREJUDICIAL TO THE INTE RESTS OF THE REVENUE. IT IS FOR THE COMMISSIONER TO POINT OUT AS TO WHAT ERROR WAS COMM ITTED BY THE ASSESSING OFFICER IN HAVING REACHED THE CONCLUSION THAT THE INCOME HAS ESCAPED ASSESSMENT. THE COMMISSIONER HAVING FAILED TO POINT OUT ANY ERROR NO ERROR CAN BE INFE RRED FROM THE ORDERS OF THE ASSESSING OFFICER 4 ITA 661/K/2011 SMT. ZAMIRUN BIBI. A.Y.06-07 FOR THE SIMPLE REASON THAT THEY ARE BEREFT OF DETAI LS. IF THE ORDER IS NOT ERRONEOUS THEN IT CANNOT BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. TH E APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . 7. ORDER PRONOUNCED IN OPEN COURT. SD/- SD/- . '# '#'# '# . ! (C. D. RAO) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( #! #! #! #!) )) ) DATED 1 ST DAY OF SEPTEMBER 2011 /0 %12 3 JD.(SR.P.S.) . 4 5 6 5'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT SMT. ZAMIRUN BIBI CHHOTO JAGULIA BARA SAT 24 PGS. (N) KOLKATA. 2 -*+ / RESPONDENT CIT-XVII KOLKATA 3 . .% ( )/ THE CIT(A) KOLKATA 4. .% / CIT KOLKATA 5 . >? % / DR KOLKATA BENCHES KOLKATA -5 / TRUE COPY .%@/ BY ORDER 2 /ASSTT. REGISTRAR .