Case Law Details
ITO Vs Emerlad Mining Private Limited (ITAT Cuttack)
In ITO vs. Emerald Mining Private Limited, the ITAT Cuttack reviewed an appeal against a CIT(A) decision dated March 26, 2024, which had quashed an assessment due to an alleged delay in issuing a notice under Section 143(2) of the Income Tax Act. The CIT(A) had incorrectly determined that the notice was time-barred based on a misreported filing date of November 25, 2015, while the actual filing date was November 27, 2016. This error led to the appeal being allowed on the grounds of limitation, without addressing the merits of the case. The ITAT found that the CIT(A) had overlooked the correct filing date and had not addressed other merits of the case. Consequently, the ITAT restored the matter to the CIT(A) for a proper adjudication on the substantive issues of the assessment, while partially allowing the revenue’s appeal for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT CUTTACK
This is an appeal filed by the revenue against the order dated 26.03.2024, passed by the CIT(A), National Faceless Centre (NFAC), Delhi, passed in I.T. Appeal No. ITBA/NFAC/S/250/2023-24/1063370884(1), for the assessment year 2015-2016.
2. Shri Sanjay Kumar, CIT-DR appeared on behalf of the revenue and Shri K.K. Bal, Advocate appeared on behalf of the assessee.
3. In this case, the ld. CIT(A) has allowed the appeal of the assessee by observing in para 5 as under :-
5. Observation and Decision:
In ground Nos. 1 and 2, the Appellant has contested the Older u/s 144 of the IT Act, 1961 dated 30.12.2017 for the AY. 2015-16 of the AO by holding that the notice u/s 143(2) is barred by limitation. Both these grounds are taken up together for the sake of convenience.
I have carefully considered the submissions made by the Appellant. It is observed that the Appellant had filed its ROI for A.Y, 2015-16 on 25.11.2015 disclosing. Total Income of Rs. 10,99,580/-. The AO issued notice u/s 143(2) of the Act on 04.07.2017 in response to which the Appellant appeared during the initial stage of assessment proceedings. Subsequently, there was no compliance’ and the AO proceeded to complete the assessment ex-parte u/s 144 by making an addition of Rs.52,00,83,778/- on account of Sundry creditors and disallowance of operating expenses. It ‘is observed that the ROI was filed on 25.1,1.2015. The notice u/s 143(2) was issued on 04.07.2017. As per first proviso to section 143(2), no notice under this sub-section shall be served on the assessee after the” expiry of six months from the end of the financial year in which the return is furnished, As the return was furnished on 25.11.2015, notice u/s 143(2) should have been served on the Appellant before 30.08.2016. In view of the’ above, the notice issued on 04.07.2017 is barred by limitation and bad in law and the subsequent proceedings as a consequence of the impugned notice are hereby quashed. These grounds are allowed.
Since the appeal has been adjudicated on the legal issue and allowed, all other issues on the merits of the additions, in the impugned proceedings, are rendered academic and infructuous.
4. During the course of arguments, ld. CIT-DR submitted that in the assessment order, inadvertently the AO in para 1 of the assessment order dated 30.12.2017 has wrongly observed the date of filing of return by the assessee as 25.11.2015, whereas the correct date of filing of return was 27.11.2016. It is submitted by the ld. CIT-DR that the ld. CIT(A) without appreciating the correct date of filing of return has allowed the appeal. Copy of acknowledgement of return filed by the assessee is placed in the paper book. He, therefore, submitted that the ld. CIT(A) has wrongly allowed the appeal of the assessee by holding that the notice u/s.143(2) of the Act was not issued within the stipulated time period. He, thus, requested for cancellation of the order of the ld. CIT(A) and for the restoration of the assessment order passed by the AO.
5. On the other hand, ld. AR of the assessee admitted that the ld. CIT(A) has not appreciated the correct facts while dismissing the appeal, ITA No.251/CTK/2024 and requested that the appeal may please be restored to the file of ld. CIT(A) for disposal on merits as the ld. CIT(A) has not made any comments/adjudication on the issues raised by the assessee on the addition made on merits.
6. We have considered the rival submissions and perused the material available on record. It is seen that the assessee for the impugned year filed its return of income on 27.11.2016 whereas merely because the date of filing of the return was stated wrong in the assessment order i.e. on 25.11.2015, the ld. CIT(A) without going further into the merits of the case and without even verifying the correct date of filing of the return, had allowed the appeal of the assessee on limitation issue. While holding so, ld. CIT(A) has failed to appreciate the statement of facts filed by the assessee, wherein in para 8 & 9, it is clearly stated by the assessee that the return was filed on 27.11.2016 and not on 25.11.2015. Under these circumstances, we are of the considered view that the action taken by the ld. CIT(A) in treating the notice issued u/s.143(2) of the Act as barred by limitation, is not correct and accordingly, the appeal of the department on this issue is allowed, however, since the ld. CIT(A) has not decided the appeal filed by the assessee on merits, therefore, the issues raised in this appeal are required to be restored to the file of ld. CIT(A) for decision on merits of the case and accordingly we do so.
7. In the result, appeal of the revenue is partly allowed for statistical purposes.
Order dictated and pronounced in the open court on 01/08/2024.
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