Income Tax Appellate Tribunal - Hyderabad
Margadarsi Chit Fund Private Limited, ... vs Acit,Circle-16(2) Hyd, Hyderabad on 19 April, 2017
1
ITA.No.1396/Hyd/2016 Margadarsi
Chit Fund P. Ltd., Hyderabad.
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES "B" : HYDERABAD
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT
AND
SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER
ITA.No.1396/Hyd/2016
Assessment Year 2010-2011
Margadarsi Chit Fund P. vs. ACIT, Circle-16(2)
Ltd., Hyderabad - 500 004. Hyderabad.
PAN AABCM4751G
(Appellant) (Respondent)
For Assessee : Shri V. Sivakumar
For Revenue : Shri K.J. Rao
Date of Hearing : 19.04.2017
Date of Pronouncement : 19.04.2017
ORDER
PER D. MANMOHAN, V.P. This appeal by the assessee is directed against the order passed by CIT(A)-4, Hyderabad wherein the CIT(A), in a cryptic order dismissed the appeal filed by assessee by observing as under :
3. With regard to the above, the Hon'ble ITAT in its order in ITA.No.1602/Hyd/2014 dated 05.07.2016 in the case of M/s.
Maheshwari Mega Ventures Ltd., held that, "we are of the opinion that CIT(A) should not have exercised his appellate powers on an issue which was subject matter of consideration by the CIT u/s.263. Since no discretion was allowed to A.O, we are of the opinion that CIT(A) should not have interfered with the order of the A.O." Therefore respectfully following the Hon'ble ITAT decision, the appeal is dismissed."
2ITA.No.1396/Hyd/2016 Margadarsi Chit Fund P. Ltd., Hyderabad.
2. It deserves to be noticed that assessee-company declared 'NIL' income for the A.Y. 2010-2011 but the assessment was completed on a total income of Rs.1.89 crores. On perusal of assessment order, the Pr. CIT, in exercise of the revisionary powers vested in him under section 263 of the Act, set aside the assessment with a direction to make certain disallowance while making an assessment denovo. This order was passed on 24.03.2015.
2.1. Assessee preferred an appeal before the Appellate Tribunal challenging the direction of the Revisional authority. Meanwhile A.O followed the direction of the Revisional authority and passed an order dated 31.07.2015 by determining the total income at Rs.102.37 crores.
2.2. Aggrieved by the order of the A.O. an appeal was preferred before the CIT(A)-4, Hyderabad. As the matter stood thus, the appeal before the ITAT, against the order passed by the Revisional authority, was disposed of by the Tribunal on 09.09.2015 (ITA.No.732/Hyd/2015) wherein the Tribunal set aside the order of the Revisional authority and in this regard observed as under :
"7. This year also assessee had submitted full details to the AO who had applied his mind and had come to a conclusion that the bad debts debited by the assessee was an allowable expenditure. In spite of noticing the same, how Ld. Pr. CIT could invoke the jurisdiction U/s. 263 in this year is not explained by him. Assessee did in fact submit all the information to AO in course of assessment proceedings and therefore, any opinion by the CIT can only be considered as change of mind. Further, assessee had relied on various case law including the orders of the ITAT and Hon'ble High Court in assessee's own case in earlier years. This sort of deliberate and misleading order by Pr. CIT is not expected from a senior officer like him. We only wish that the authorities of Revenue follow the orders of ITAT in letter and spirit. In case they want 3 ITA.No.1396/Hyd/2016 Margadarsi Chit Fund P. Ltd., Hyderabad.
to differ they can differ only on the reason that the order is either appealed against in the High Court (which, however, does not empower them to ignore the orders) and the order was stayed by jurisdictional High Court. In those circumstances only the authorities can differ from the ITAT's order. This deliberate disobedience to the orders of higher judicial forums calls for contempt proceedings, but we are not considering the same. However we wish to state that any further notice of such disobedience will certainly invite serious action including levy of cost. For the time being we leave the matter there, with a direction that the authorities should follow the orders of ITAT/ High Court, when they were brought to the notice in the respective proceedings. As already stated order of the CIT u/s 263 to that extent is set aside."
3. As could be noticed from the para extracted above, the Tribunal, with reference to disallowance of claim of bad debts, made stern observations against the deliberate disobedience to the orders of the Higher Judicial Forums. In short, the issue on which the Revisional proceedings were taken-up no longer subsists in the light of decision of the ITAT.
4. Since this issue was already decided in favour of assessee, order passed by the A.O to the extent of disallowance of bad debts can be said to be not in accordance with law and it is the duty of the CIT(A) to correct the said error in the peculiar facts of the case. However, Ld. CIT(A), as usual, chose to pass a cryptic order without even referring to the order passed by the ITAT. The chronology of the events only highlight the scant respect the departmental authorities have for the quasi-judicial Forum being constituted to oversee the mistakes committed by the A.O./ Administrative Commissioner as well as the Ld. CIT(A). Suffice to say that the order passed by the Revisional authority to the extent of disallowance of bad debts having been set aside by the 4 ITA.No.1396/Hyd/2016 Margadarsi Chit Fund P. Ltd., Hyderabad.
Tribunal the A.O. ought not to have made any disallowance on that aspect and atleast Ld. CIT(A) should have corrected the error. We hereby set aside the order of CIT(A) and direct the A.O. to pass an appropriate order in line with the direction given by the Tribunal in the order dated 09.09.2015.
5. In the result, appeal filed by the assessee is allowed.
Order pronounced in the open Court on 19.04.2017.
Sd/- Sd/- (S. RIFAUR RAHMAN) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 19th April, 2017 VBP/- Copy to
1. Margadarsi Chit Fund P. Ltd., 5-10-195, Fateh Maidan Road, Hyderabad - 500 004.
2. The Income Tax Officer, Ward-16(2), Hyderabad.
3. CIT(A)-4, 2nd Floor, 'A' Block, I.T. Towers, A.C. Guards, Masab Tank, Hyderabad - 500 004.
4. Pr. CIT-4, Hyderabad.
5. D.R. ITAT "B" Bench, Hyderabad.
6. Guard File.