IN THE ITAT KOLKATA BENCH ‘C’
United Traders Co.
Tax Recovery Officer, Kolkata-36
IT APPEAL NO. 1233 (KOL.) OF 2010
[ASSESSMENT YEAR 2006-07]
OCTOBER 12, 2012
Pramod Kumar, Accountant Member
By way of this appeal, the assessee-appellant has called into question correctness of Commissioner of Income Tax (Appeals)’s order dated 24th March, 2010, in the matter of assessment u/s. 143(3) of the Income Tax Act, 1961, for the assessment year 2006-07.
2. In the first ground of appeal, as set out in the concise grounds of appeal, the assessee has raised the following grievance:-
“That the assessment order, having been passed by Tax Recovery Officer, who is not an Assessing Officer, is bad in laws and merits annulment”.
3. The plea raised in this ground of appeal is purely a legal plea set out in a narrow compass of material facts. The assessee’s income tax return, filed on 29.09.2007 disclosing a taxable income of Rs. 2,91,043/- was selected for scrutiny assessment under CASS and, accordingly, notices were issued u/s. 143(2) and 142(1) of the Act. It was in the exercise of powers under section 127(2) of the Act, that the CIT, Kolkata-XII had transferred this case to the Tax Recovery Officer-36, Kolkata, for disposal of time barring scrutiny assessment, and this transfer of case remained in force till 31st December, 2008. It was in this backdrop that the Tax Recovery Officer-36, Kolkata framed the impugned assessment order.
4. The plea is now raised to the effect that the Tax Recovery Officer did not have powers to frame any assessment, and, for this short reason alone, impugned assessment order is non est.
5. Our attention is invited to the definition of expression “Assessing Officer” u/s. 2(7A) of the Act and it is submitted that this definition does not specifically cover a Tax Recovery Officer, though it specifically covers an Income Tax Officer, an Assistant, Deputy, Joint and Additional Commissioner of Income Tax as also an Assistant, Deputy, Joint or Additional Director of Income Tax. Our attention is then invited to the definition of a Tax Recovery Officer u/s. 2(44) which, inter alia, shows that it was only with effect from 13th July, 2006 that the Tax Recovery Officer could “exercise or perform such powers and functions which are conferred on, or assigned to, an Assessing Officer under this Act and which may be prescribed”. Our attention is then invite4d to the provisions of Rule 117C, which is brought in force w.e.f. 16th October, 2007, which specifically provides that the Tax Recovery Officer shall concurrently have powers to rectify mistakes u/s. 154 in an order passed by the Assessing Officer, in respect of which Tax Recovery Officer has drawn a certificate u/s. 222 to initiate attachment and sale of moveable and unmoveable property, arrest and detention of defaulter or appointment of receiver to manage moveable and unmoveable property of the defaulter. It is then pointed out that since the assessment year involved is 2006-07, the above provisions of law were not in force, and, therefore, very assumption of jurisdiction by the Assessing Officer.
6. Learned Departmental Representative, on the other hand, relied upon the stand of the authorities below.
7. We are unable to see any merits in assessee’s plea. Section 2(7A) specifically covers an Income Tax Officer, and a Tax Recovery Officer, u/s. 2(44) has to be essentially an “Income Tax Officer” specifically authorised by a Commissioner of Income Tax or a Chief Commissioner of Income Tax, to exercise the powers of a Tax Recovery Officer. When an Income Tax Officer is authorised to exercise the powers of a Tax Recovery Officer, he does not cease to be an Income Tax Officer. It cannot, therefore, be said that a Tax Recovery Officer inherently lacks the status of an Income Tax Officer. That apart, the assessment is framed on 29.12.2008, and, even going by the submissions of the assessee, the provisions of section 2(44) permitting Tax Recovery Officers to do assessment work was amended well before this date. It is wholly immaterial whether or not this provision was in force in the beginning of the relevant assessment year, because it is a procedural provision and all that matters is that the procedure should be carried out in accordance when such procedure is adopted. In any event, power to transfer cases u/s. 127(2) cannot be challenged before this forum. In view of these discussions, as also bearing in mind entirety of the case, we reject the plea of the assessee.
8. Ground No. 1 is dismissed.
9. In Ground No. 2, the assessee has raised the following grievance:
“That the disallowance of commission is illegal, unjust and arbitrary since these have allowed under similar terms and conditions subsequently, and in same case, opportunity for cross examination of witnesses was not allowed to appellant”.
10. Learned counsel was specifically asked whether he is in a position to produce, or has produced at any stage, evidences for services having been rendered by the persons, who have been paid the commission. While learned Counsel referred to the fact that these incomes are duly disclosed in the hands of the recipient that the same commission was allowed deduction in the other years, he was not in a position to produce any evidence for services rendered, nor such evidence was produced before the authorities below. In our considered view, one of the fundamental requirements for allowing deduction in respect of commission payment is that there should be evidence for some services having been rendered. The services having been rendered cannot be simply assumed or inferred. In the absence of such evidence, no interference is called for in this disallowance. We, therefore, confirm the same.
11. Ground No. 2 is also dismissed.
12. In the result, the appeal filed by the assessee is dismissed.