ACIT, CHENNAI v. M/s Apex Agencies, CHENNAI

MA 159/CHNY/2010 | 2001-2002
Pronouncement Date: 24-09-2010 | Result: Dismissed

Appeal Details

RSA Number 15921724 RSA 2010
Assessee PAN AAIFA0542M
Bench Chennai
Appeal Number MA 159/CHNY/2010
Duration Of Justice 11 day(s)
Appellant ACIT, CHENNAI
Respondent M/s Apex Agencies, CHENNAI
Appeal Type Miscellaneous Application
Pronouncement Date 24-09-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 24-09-2010
Assessment Year 2001-2002
Appeal Filed On 13-09-2010
Judgment Text
IN THE INCOMETAX APPELLATE TRIBUNAL: A- BENCH:CHENN AI (BEFORE SHRI ABRAHAM P. GEORGE. ACCOUNTA NT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER) MISC. APPLICATION NOS.89 159 & 160/MDS/2010 (IN ITA NOS.1522 TO 1524/ MDS/07) ASST. YEARS 2000-01 TO 20033-04 THE ACIT CIR.XV CHENNAI VS M/S APEX AGENCIES POTTIPATTI PLAZA 77 NUNGAMBAKKAM HIGH RD CHENNAI-600034 PAN AAIFA0542M) (APPLICANT) (RESPONDENT) APPLICANT BY: RESPONDENT BY: SRI P.B.SEKARAN CIT-DR SRI S.SRIDHAR MP NOS.89 159 160/MDS/10 2 ORDER PER ABRAHAM P.GEORGE ACCOUNTANT MEMBER: THESE ARE MISC. APPLICATIONS FILED BY THE REVENUE. GRIEVANCE OF THE REVENUE IS THAT THE TRIBUNAL DECIDED THE ASS ESSMENT TO BE BARRED BY LIMITATION WHEN THERE WAS A COORDINATE B ENCH DECISION IN T. SAROJKUMAR VS. ACIT ( ITA NO.2323/MDS/03 DATED 28-12-2006) WHEREIN IT WAS HELD THAT COMMUNICATION OF THE ORDER WITHIN LIMITATION PERIOD WAS NOT NECESSARY AND WHAT WAS RELEVANT WAS COMPLETION OF ASSESSMENT BEFORE TIME BARRING DATE. 2. ONE OF THE ISSUES DEALT WITH IN THESE APPEALS WA S WHETHER THE REASSESSMENT WAS TIME BARRED SINCE THE ORDER PURPO RTED TO BE COMPLETED ON 31-3-2006 WAS SERVED ON THE ASSESSEE O NLY ON 21-4- 2006. IT WAS HELD BY THE TRIBUNAL AT PARAS 4.5 TO 4 .9 OF THE SAID ORDER AS UNDER: MP NOS.89 159 160/MDS/10 3 4.5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AN D PERUSED THE RELEVANT RECORDS. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED AN D RELIED UPON BY BOTH THE PARTIES. IT IS AN UNDISPUTED FACT THAT THE RE-ASSESSMENT ORDER WAS DISPATCHED IN THE MONTH OF APRIL 2006 AND THE ASSESSEE RECEIVED THE SAME BEARS THE D ATE AS 31..3.2006. SECTION 153 PROVIDES THE TIME LIMIT FOR COMPLETION OF ASSESSMEN T AND RE -ASSESSMENT. THE RELEVANT PROVISIONS U/S.153 OF THE INCOME TAX ACT ARE REPROD UCED AS UNDER: - 1) NO ORDER OF ASSESSMENT SHALL BE MADE UNDER SECTION 143 OR SECTION 144 AT ANY TIME AFTER THE EXPIRY OF ( A ) TWO YEARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INCOME WAS FIRST ASSESSABLE ; OR ( B ) ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WH ICH A RETURN OR A REVISED RETURN RELATING TO THE ASSESSMENT YEAR COMMENCING O N THE 1ST DAY OF APRIL 1988 OR ANY EARLIER ASSESSMENT YEAR IS FILED UNDER SUB-SEC TION (4) OR SUB-SECTION (5) OF SECTION 139 WHICHEVER IS LATER. THE FOLLOWING SUB-SECTIONS (1A) AND (1B) SHALL BE I NSERTED AFTER SUB-SECTION (1) OF SECTION 153 BY THE FINANCE ACT 2005 W.E.F. 1 - 4 - 2006 : MP NOS.89 159 160/MDS/10 4 THE FOLLOWING SUB-SECTIONS (1A) AND (1B) SHALL BE INSERTED AFTER SUB-SEC.(1) OF SEC. 153 BY THE FINANCE ACT 2005 W. E.F. 1-4-2006: (1A) NO ORDER OF ASSESSMENT SHALL BE MADE UNDER SEC.115WE OR SECTION 115WF AT ANY TIME AFTER THE EX PIRY OF TWO YEARS FROM THE END OF THE ASSESSMENT YEAR IN WH ICH THE FRINGE BENEFITS WERE FIRST ASSESSABLE. (1B) NO ORDER OF ASSESSMENT OR REASSESSMENT SHALL B E MADE UNDER SEC. 115WG AFTER THE EXPIRY OF ONE YEAR FROM T HE END OF THE FINANCIAL YEAR IN WHICH THE NOTICED UNDER SEC . 115WH WAS SERVED. 1 [(2) NO ORDER OF ASSESSMENT REASSESSMENT OR RECOMP UTATION SHALL BE MADE UNDER SECTION 147 AFTER THE EXPIRY OF 2 [ONE YEAR] FROM THE END OF THE FINANCIAL YEAR IN WHICH THE NOT ICE UNDER SECTION 148 WAS SERVED : PROVIDED THAT WHERE THE NOTICE UNDER SECTION 148 WAS SERVED ON OR AFTER THE 1ST DAY OF APRIL 19 99 BUT BEFORE THE 1ST DAY OF APRIL 2000 SUCH ASSESSMENT REASSESSMENT OR RECOMPUTATION MAY BE MADE AT ANY TIM E UP TO THE 31ST DAY OF MARCH 2002.] MP NOS.89 159 160/MDS/10 5 (2A) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTI ONS (1) (1A) (1B) ] AND (2) IN RELATION TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL 1971 AND ANY S UBSEQUENT ASSESSMENT YEAR AN ORDER OF FRESH ASSESSMENT IN PUR SUANCE OF AN ORDER UNDER SECTION 250 OR SECTION 254 OR SECTIO N 263 OR SECTION 264 SETTING ASIDE OR CANCELLING AN ASSESSM ENT MAY BE MADE AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER UNDER SECTI ON 250 OR SECTION 254 IS RECEIVED BY THE CHIEF COMMISSIONER O R COMMISSIONER OR AS THE CASE MAY BE THE ORDER UNDER SECTION 263 OR SECTION 264 IS PASSED BY THE CHIEF COMMISSIO NER OR COMMISSIONER: PROVIDED THAT WHERE THE ORDER UNDER SECTION 250 OR SECTION 254 IS RECEIVED BY THE CHIEF COMMISSIONER OR COMMIS SIONER OR AS THE CASE MAY BE THE ORDER UNDER SECTION 263 OR SECTION 264 IS PASSED BY THE CHIEF COMMISSIONER OR COMMISSI ONER ON OR AFTER THE 1ST DAY OF APRIL 1999 BUT BEFORE THE 1 ST DAY OF APRIL 2000 SUCH AN ORDER OF FRESH ASSESSMENT MAY B E MADE AT ANY TIME UP TO THE 31ST DAY OF MARCH 2002.] 4.6 SUB-SECTION (2) OF SECTION 153 MANDATES THAT NO ORDER OF ASSESSMENT OR RE-ASSESSMENT SHALL BE MADE U/S.147 AF TER THE EXPIRY OF ONE YEAR FROFM THE END OF THE FINANCIAL YEAR IN WHICH THE NOTICE U/S.148 OF THE INCOME TAX ACT WAS ISSUED IN THE MONTH OF APRIL 2004 AND MAY 2004. THEREFORE THE RE-ASSESSMENT U/ S.147 WAS MP NOS.89 159 160/MDS/10 6 REQUIRED TO BE COMPLETED UP TO 31.3.2006. THE ASSES SMENT IS MADE BY THE ASSESSING OFFICER HAVING JURISDICTION AND POW ERS UNDER THE STATUTORY PROVISIONS OF THE INCOME TAX ACT AND THER EFORE THE ASSESSMENT PROCEEDINGS IS A QUASI JUDICIAL PROCEEDING . IT ACQUIRES FINALITY ON THE ASSESSMENT ORDER BEING MADE. THE A SSESSMENT OR RE-ASSESSMENT MADE BEYOND THE PERIOD OF LIMITATION PRESCRIBED UNDER THE PROVISIONS OF INCOME TAX ACT SUFFERS FROM ILLEGALITY AND THE SAME CAN NOT BE CONSIDERED TO BE A MERE TECHNIC AL DEFECT WHICH CAN BE RECTIFIED. ONCE THE CONDITION OF TIME LIMIT IS VIOLATED THE SAME CAN NOT BE RECTIFIED AND A TIME BARRED ASSESSMENT OR REASSESSMENT RENDERS THE ENTIRE ASSES SMENT/RE- ASSESSMENT AS NULLITY. THEREFORE THE DECISIONS RELI ED UPON BY THE LD. DEPARTMENTAL REPRESENTATIVE ARE NOT APPLICABLE IN CASE OF TIME BARRED ASSESSMENT/RE-ASSESSMENT. THE TIME LIMITATI ON IS AN ESSENTIAL CONDITION AND IS NOT A RECTIFIABLE DEFECT . SINCE THE ASSESSMENT/RE-ASSESSMENT ORDER IS PASSED UNDER THE P ROVISIONS OF INCOME TAX ACT BY THE ASSESSING OFFICER HAVE QUASI JUDICIAL AUTHORITY THE SAME WOULD BE CONSIDERED AS MADE AND C OMPLETED ONLY WHEN IT IS ISSUED OR NOTIFIED SO AS TO BE BEYON D THE CONTROL OF THE AUTHORITY FOR ANY CHANGE OR MODIFICATION. SO LO NG AS THE ORDER IS IN THE POSSESSION AND CONTROL OF THE AUTHORITY TH AT HAS PASSED IT IT CAN NOT BE SAID THAT THE ORDER IS COMPLETE AND E FFECTIVE. FOR A QUASI JUDICIAL AUTHORITY ANY ORDER PASSED UNDER THE PR OVISIONS OF THE ACT ATTAINS FINALITY ONLY WHEN IT IS ISSUED/NOTI FIED SO AS TO MAKE IT PUBLIC OR AT LEAST KNOWN TO THE PARTIES CONC ERNED OR AT LEAST IT SHOULD BE HANDED OVER TO ANOTHER AUTHORITY F OR FURTHER MP NOS.89 159 160/MDS/10 7 STEPS/ACTION AND THE AUTHORITY WHO PASSED THE SAME L OSES ITS CONTROL OVER THE IMPUGNED ORDER. 4.7 IN THE CASE IN HAND THE ORDER IS PURPORTED TO HAVE BEEN MADE ON 31.03.2006 BUT THERE IS NOTHING ON RECORD TO SHOW THAT THE SAME WAS ISSUED OR NOTIFIED OR AT LEAST SENT TO THE DISPATCH SECTION FOR SERVING TO THE ASSESSEE BEFORE THE PERIOD OF LI MITATION EXPIRED ON 31.3.06. THIS IS NOT A CASE WHERE THE ORDER IS SENT TO THE DISPATCH SECTION BEFORE THE EXPIRY OF LIMITATION PE RIOD AND THE DELAY IN SERVING THE ORDER TO THE ASSESSEE IS ON T HE PART OF DISPATCH SECTION OR POSTAL AUTHORITIES. WHEN THE AS SESSMENT ORDER WAS SENT TO THE DISPATCH SECTION FOR SERVICE TO TH E ASSESSEE AFTER THE EXPIRY OF THE LIMITATION PERIOD THEN IN THE AB SENCE OF ANY RECORD TO SHOW THAT THE ORDER WAS MADE AVAILABLE TO THE OTHER AUTHORITIES AND WAS OUT OF CONTROL OF THE ASSESSING O FFICER IT IS CLEAR THAT THE ORDER WAS WITHIN THE CONTROL AND POS SESSION OF THE ASSESSING OFFICER AND THEREFORE WAS NOT COMPLETE AND EFFECTIVE. 4.8 IN THE CASE OF SHANTI LAL GODAWAT & ORS. VS . ACIT (JODH) THE JODHPUR BENCH OF THIS TRIBUNAL HAS HELD IN PARA NO.6 AS UNDER:- ON COMPARISON OF THE ABOVE REFERRED TWO PROV ISIONS IT IS FOUND THAT IN BOTH THE PROVISIONS THE ASSESSMENT ORDERS SHALL MAKE UNDER SECTION 153B IT ACT SHALL BE MAD E IN S.35(2) OF THE AGRL. IT ACT. THEREFORE BOTH THESE PROVISIONS ARE AKIN TO EACH OTHR. THE HONBLE KERALA HIGH COU RT HAS MP NOS.89 159 160/MDS/10 8 CONSIDERED THE PROVISIONS CONTAINED IN S.35(2) OF T HE AGRL. IT ACT AND CAME TO THE CONCLUSION THAT TO MAKE THE ORDE R COMPLETE AND EFFECTIVE IT SHOULD BE ISSUED SO AS TO BE BEYOND THE CONTROL OF THE AUTHORITIES CONCERNED FOR ANY CHANGE OR MODIFICATION. THE ASSESSMENT ORDER IS NO T ONLY TO BE PASSED BUT IT IS TO BE SERVED TO THE ASSESSEE WI THIN THE PERIOD OF LIMITATION PROVIDED THEREUNDER. THE HONB LE KERALA HIGH COURT RENDERED IN THE CASE OF CIT VS.KA PPUMALAI ESTATE (1998) 148 CTR (KER) 565; (1998) 234 ITR 187 (KER) AND THE JULDGMENT OF THE SAME HIGH COURT IN THE CASE OF K.JOSEPH JACOB VS. AGRL. ITO & ANR. (1991) 190 ITR 464(KER) WHEREIN PROVISIONS CONTAINED IN S.35(2) OF AGRL. IT ACT WERE CONSIDERED WHEREIN SAME LANGUAGE WAS USED BY THE LEGISLATURE. THE HONBLE KERALA HIGH COURT HAS FOUND THAT THE ORDER PASSED BY THE CONCERNED OFFICER IS BEYOND THE PERIOD OF LIMITATION AND ACCORDINGLY SUCH AN ORDER I S INEFFECTIVE AS IT IS BARRED BY LIMITATION. THE FA CTS ARE THAT THE ASSESSMENT ORDER IS PASSED ON 13 TH MARCH 1985 AND IT WAS DISPATCHED ON22ND APRIL 1985 AND RECEIVED BY T HE ASSESSEE ON 26 TH APRIL 1985 FOR THE ASSESSMENT YEAR 1979-80 AND ORDERS WERE PASSED ON 24 TH MARCH 1986 AND DISPATCHED ON 2 ND DECEMBER 1986 AND RECEIVED BY THE ASSESSEE ON 5 TH DECEMBER 1986 FOR THE ASSESSMENT YEAR 1980-81. BY APPLYING THE PRINCIPLES LAID DOWN BY THE HIGH COURT IN THE CASE OF GOVERNMENT WOOD WORKS VS. STATE OF KERALA 6 9 STC 62 AND IN AN EARLIER DECISION OF THE BENCH OF THE S AME COURT MP NOS.89 159 160/MDS/10 9 IF THE CASE OF MALAYIL MILLS VS. STATE OF KERALA IN TRC NOS. 15 AND 16 OF 1991 IT WAS HELD THAT THE ORDERS FOR BOTH THE YEARS WERE NOT MADE WITHIN THE PERIOD PRESCRIBED U/S.35(2) . IT WAS FURTHER OBSERVED BY THE HONBLE HIGH COURT THAT TO MAKE THE ORDER COMPLETE AND EFFECTIVE IT SHOULD BE ISSUED SO AS TO BE BEYOND THE CONTROL OF THE AUTHORITIES CO NCERNED FOR ANY POSSIBLE CHANGE OR MODIFICATION. HENCE RES PECTFULLY FOLLOWING THE JUDICIAL INTERPRETATION MADE BY THE HO NBLE KERALA HIGH COURT OF SIMILAR PROVISIONS AS WAS FOUN D IN THE PROVISIONS CONTAINED IN S.153B STATED SUPRA WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSMENT ORDERS PASSE D IN THE CASE OF THE ASSESSEE ON 28 TH DECEMBER 2007 BUT DISPATCHED ON2ND JANUARY 2008 ARE BEYOND THE PERIOD OF LIMITAT ION PROVIDED UNDER THE CONCERNED PROVISIONS OF LAW MORE SO WHEN SUCH ORDERS CAN NOT BE TAKEN AS ORDERS MADE IN THE MANNER AS HAS BEEN UNDERSTOOD BY A HIGHER FORUM. 4.9. IN THE ABOVE SAID DECISION THE JODHPUR BENC H OF THIS TRIBUNAL HAS CONSIDERED AND FOLLOWED THE DECISION OF HONBLE KERALA HIGH COURT WHICH IS ALSO RELIED UPON BY THE LD. AR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE ABOVE SAID DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL WE HOLD THA T THE RE- ASSESSMENT U.S 147 IN ALL THESE THREE YEARS IS BARRE D BY LIMITATION. THEREFORE THE IMPUGNED ASSESSMENT ORD ERS ARE NULL AND NON EST AND NOT SUSTAINABLE UNDER LAW. ACCOR DINGLY WE QUASH THE RE-ASSESSMENT ORDERS. MP NOS.89 159 160/MDS/10 10 A READING OF THE ABOVE WOULD SHOW THAT THIS IS NOT A CASE WHERE THE TRIBUNAL ACCEPTED THE ARGUMENT OF THE REVENUE THAT ASSESSMENTS WERE COMPLETED BEFORE 31-3-2006 BUT THE COMMUNICAT ION ALONE WAS DELAYED. THE TRIBUNAL HAS GIVEN A CLEAR FINDING AT PARA 4.7 THAT THOUGH THE ASSESSMENTS WERE PURPORTED TO HAVE BEEN MADE ON 31- 3-2006 THERE WAS NOTHING ON RECORD TO SHOW THAT IT WAS ISSUED OR NOTIFIED OR ATLEAST SENT TO THE DISPATCH SECTION FO R SERVING TO THE ASSESSEE BEFORE THE PERIOD OF LIMITATION EXPIRING O N 31-3-2006. THUS THE FACTS HERE ARE AT VARIANCE FROM THE FACTS IN DECISION OF THE COORDINATE BENCH IN THE CASE OF T.SAROJKUMAR VS . ACIT IN ITA NO.2323/MDS/03 DATED 28-12-2006 NOW RELIED ON BY T HE REVENUE. FURTHER THE SAID DECISION OF T.SAROJKUMAR WAS NOT BROUGHT TO THE ATTENTION OF THE BENCH AT THE TIME OF HEARING OF TH E APPEAL. 3. THUS IN THE GUISE OF A RECTIFICATION APPLICATIO N THE REVENUE IS SEEKING A REVIEW OF THE ORDER OF THIS TRIBUNAL WHIC H IT IS NOT EMPOWERED TO TAKE UP. NO DOUBT IN THE CASE OF HOND A SIEL POWER PRODUCTS LTD. V. CIT (295 ITR 466) IT WAS HELD THAT NON CONSIDERATION MP NOS.89 159 160/MDS/10 11 OF A COORDINATE BENCH DECISION WAS AN ERROR APPAREN T FROM RECORD. NEVERTHELESS AS POINTED OUT BY US THE FACTS ARE A T VARIANCE TO THE CASE OF T.SAROJKUMAR (SUPRA) RELIED ON BY THE REVEN UE AND HENCE THE DECISION OF HONBLE APEX COURT WOULD MAKE NO DI FFERENCE WHATSOEVER. . THUS WE FIND NO MERIT IN THE MISC. AP PLICATIONS FILED BY THE REVENUE WHICH STAND DISMISSED. 4. ORDER PRONOUNCED IN THE OPEN COURT ON 24 -09-2 010. SD/- ( GEORGE MATHAN) SD/- (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI: 24TH SEPTEMBER 2010 COPY TO: ASSESSEE/ ASSESSING OFFICER/ CIT(A)/ CIT/ D.R/ GUARD FILE. NBR