Case Law Details

Case Name : Shri Subbaraya Annamalai Siva Kumar Vs ITO (ITAT Hyderbad)
Appeal Number : ITA Nos. 439 & 440/Hyd./2019
Date of Judgement/Order : 09/04/2021
Related Assessment Year : 2009-10

Shri Subbaraya Annamalai Siva Kumar Vs ITO (ITAT Hyderbad)

Ld.DR fails to dispute the clinching fact that the Pr. CIT’s impugned order has nowhere held the assessment in question dated 06.01.2015 as an erroneous one so far as it causes prejudice to the interest of Revenue as per Sec.263 of the Act. Ld.Pr.CIT has rather directed the Assessing Officer to cancel his corresponding assessment in issue in other words. We find no reason to sustain either of the two courses adopted by the learned Pr.CIT herein.

Hon’ble apex court’s land mark decision Malabar Industrial Co. vs. CIT 243 ITR 83 (SC), CIT vs. Max India Ltd. (2007) 295 ITR 282 (SC) ad CIT vs. Kwality Steel Suppliers Complex (2017) 395 ITR 1 (SC) held that an assessment or re-assessment, as the case may be, could only be revised in case it satisfies the twin conditions of erroneous as well as causing prejudice to the interest of revenue; simultaneously. There is no such indication in the Pr. CIT’s above extracted directions. Coupled with this, he has also directed the Assessing officer to cancel the assessment himself which the latter has no jurisdiction to do so as per Sec. 263 of the Act. We thus annul the impugned revision order itself for the precise twin aforementioned reasons.

FULL TEXT OF THE ITAT JUDGEMENT

These two assessee’s appeals for AY 2009-10 arise against the CIT(A), Tirupathi’s order dated 26.02.2019 and Pr.CIT, Tirupathi’s order dated 26.02.2017 passed in case nos.10221/2017-18 and case no.263/Pr. CIT/TPT/2016-17 involving proceedings u/s 143(3) r.w.s. 263 of the Income Tax Act, 1961 (in short ‘the Act’); respectively.

Heard both parties. Case files perused.

2. It transpires at the outset that the assessee’s appeal ITA 440/Hyd/2019 suffers from 678 days delay stated to be attributable to wrong legal advise coming from the auditors’ side as per the affidavit dated 28.07.2019 followed by the necessary communication gap. All these solemn averments have gone unrebutted from the department’s side. We thus quote hon’ble apex court’s decision in Collector Land Acquisition vs. Mst Katiji reported in 167 ITR 471 (SC) that ordinarily a litigant does not gain anything by causing delay in litigation and all technical aspects must make way for the cause of substantial justice in case an assessee explains the delay by cogent reasons. We follow the very reasoning and condone the impugned delay of 678 days in filing of ITA 440/Hyd/2019.

3. Coming to assessee’s appeal ITA 440/Hyd/19, we advert to Pr.CIT’s revision directions contained in his order reading as under:

“2. Later, it was found that the assessee paid cash aggregate of/which is exceeding Rs.20,000/- in a single day for the purchases made from M/s. Pearl Beverages Limited during the year under consideration and the total of such cash payments works out to Rs. 76,76,197/- during the financial year 2008-09 relevant to the assessment year 2009-10.

3. Therefore, a show cause notice u/s 263 of the Income Tax Act, 1961 dated 28-03-2016 was issued to the assessee calling for assessee’s objections as to why the assessment order u/s 143(3) rws 147 dated 06-01-2015 should not be revised u/s 263 of the Income Tax Act, 1961. For this purpose, the case was posted for hearing on 19-04-2016. The said notice was duly served on the assessee on 31-03-2016. The assessee has not complied to the said show cause notice. Again an opportunity through letter dated 03-012017 was afforded to the assessee requesting to appear before the Commissioner of Income Tax, Tirupati on 16-01-2017. For this also, there is no compliance from the assessee. As there was no compliance from the assessee, a final opportunity was afforded to the assessee vide letter dated 23-01-2017 posting the case for hearing on 06-02-2017 to file his objections, if any, for revision of his assessment. For this also, the assessee has not chosen to either appear in person or through his authorized representative to submit his explanation.

4. In the above circumstances, it is concluded that the assessee has no explanation to offer for the above discrepancy. The Assessing Officer is directed to cancel the order u/s 143(3) rws 147 dated 06-01-2015 and make a fresh assessment keeping in view the discrepancy as discussed above. The AO shall calculate the tax and issue notice u/s 156 accordingly.”

3.1. Ld.DR fails to dispute the clinching fact that the Pr.CIT’s impugned order has nowhere held the assessment in question dated 06.01.2015 as an erroneous one so far as it causes prejudice to the interest of Revenue as per Sec.263 of the Act. Ld.Pr.CIT has rather directed the Assessing Officer to cancel his corresponding assessment in issue in other words. We find no reason to sustain either of the two courses adopted by the learned Pr.CIT herein.

3.2. Hon’ble apex court’s land mark decision Malabar Industrial Co. vs. CIT 243 ITR 83 (SC), CIT vs. Max India Ltd. (2007) 295 ITR 282 (SC) ad CIT vs. Kwality Steel Suppliers Complex (2017) 395 ITR 1 (SC) held that an assessment or re-assessment, as the case may be, could only be revised in case it satisfies the twin conditions of erroneous as well as causing prejudice to the interest of revenue; simultaneously. There is no such indication in the Pr.CIT’s above extracted directions. Coupled with this, he has also directed the Assessing officer to cancel the assessment himself which the latter has no jurisdiction to do so as per Sec. 263 of the Act. We thus annul the impugned revision order itself for the precise twin aforementioned reasons.

Assessee’s former appeal ITA 440/Hyd/2019 succeeds therefore.

Same order follows in ITA 439/Hyd/19 as the consequential assessment framed herein in furtherance to Pr.CIT’s revision directions has no legs to stand.

These two assessee’s appeals are allowed.

Order pronounced in Open Court on 09/04/2021

Download Judgment/Order

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