Income Tax Appellate Tribunal - Ahmedabad
Gujarat State Co.Op. Marketing ... vs The Pr. Cit-1,, Ahmedabad on 1 August, 2018
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ ',' अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
" A " BENCH, AHMEDABAD
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BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER
And SMT MADHUMITA ROY, JUDICIAL MEMBER
आयकर अपील सं./I.T.A.No. 1176/Ahd/2017
( नधा रण वष / Assessment Year : 2008-09)
Gujarat State Co-Op बनाम/ Pr.CIT-1,
Marketing Federation Ltd., Vs. 304, C Wing, 3 r d
SahkarBhavan, Relief Road, Floor, PratyakshKar
Ahmedabad. Bhavan, Ambawadi,
Ahmedabad.
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AECPP 2247 L
(अपीलाथ /Appellant) .. ( यथ / Respondent)
अपीलाथ ओर से / Appellant by : Shri S. N. Divatia, A.R.
यथ क ओर से/Respondent by : Smt. Aparna M. Agrawal, CIT-D.R.
ु वाई क तार ख /
सन Date of Hearing 21/06/2018
घोषणा क तार ख /Date of Pronounce ment 01/08/2018
आदे श / O R D E R
PER WASEEM AHMED, ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Commissioner of Income Tax - I, Ahmedabad [CIT in short] dated 27.03.2017 arising in the matter of assessment order passed under s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") dated 24/12/2010 relevant to Assessment Year (AY) 2008-09.
ITA No.1176/Ahd/2017Gujarat State Co-Op Marketing Federation vs. PCIT Asst.Year -2008-09 -2-
2. The grounds of appeal raised by the assessee are as under:-
"1.1 The order passed u/s.263 on 27.03.2017 for A.Y.2008-09 by Pr.CIT-1, Abad setting aside the order passed by AO u/s.143(3) on 24.12.2010 with a direction to frame a fresh order after inquiry is wholly illegal, unlawful and against the principles of natural justice.
1.1 The Ld. Pr.CIT has failed to appreciate that the exercise of powers u/s.263 of revising the original assessment u/s.143(3) on 24.12.2010 for A.Y.2008-09 was barred by limitation of time, apart from being illegal and in excess of jurisdiction.
2.1 The Ld. Pr.CIT has grievously erred in law and on facts in holding that the assessment order passed u/s.143(3) for A.Y.2008-09 on 24.12.2010 by AO was erroneous and prejudicial to the interest of the revenue in as much as the AO had failed to carry out adequate inquiries or verification before allowing deduction u/s.80P(2)(e) and set off of C/F business losses.
2.2 The Ld. Pr.CIT has grievously erred in law and on facts in invoking the powers u/s.263 when both the aforesaid matters were examined by AO during the asst. proceeding and he had formed one of the possible views. Therefore, there was a change of opinion on part of CIT which was not permissible or valid.
2.3 That in the facts and circumstances of the case as well as in law, the Ld. CIT(A) ought not to have invoked the provisions of section 263 of the Act and set aside the asst. order passed u/s.143(3) for A.Y.2008- 09 on 24.12.2010 by AO on the ground that the same was erroneous and prejudicial to the interest of revenue.
3.1 Without prejudice to above and in alternative, the Ld. Pr. CIT has grievously erred in law and on facts in holding that the deduction u/s.80P(2)(e) was not admissible.
4.1 Without prejudice to above and in alternative, the Ld. Pr. CIT has grievously erred in law and on facts in holding that the claim o C/F business loss of Rs.75,91,978/- for A.Y.2001-02 could be set off only before the deduction under Chapter-VIA.
ITA No.1176/Ahd/2017Gujarat State Co-Op Marketing Federation vs. PCIT Asst.Year -2008-09 -3- It is, therefore, prayed that the order passed u/s.263 by the Pr. CIT may kindly be quashed."
3. The solitary issue raised by the assessee in all the grounds of appeal is that ld. CIT erred in holding the order of AO as erroneous in so far prejudicial to the interest of revenue u/s 263 of the Act.
4. At the outset, ld. Counsel for the assessee before us submitted that the order passed by the ld. CIT u/s 263 of the Act revising the assessment order framed u/s 143(3) of the Act dated 24.12.2010 is barred by limitation as provided under subsection (2) of 263 of the Act.
The ld. AR for the assessee submitted that the assessment order was passed u/s 143(3) of the Act dated 24.12.2010 by accepting the income declared in the return of income. Subsequently, the case was reopened u/s 148 of the Act to verify the TDS claim made by the assessee in the return of income. However, the income declared in the return of income was once again accepted under the re-assessment order framed u/s 147 of the Act vide order dated 01.12.2015.
The ld. AR further submitted that subsequently the ld. CIT u/s 263 of the Act issued notice dated 01.02.2017 for the verification of certain issues as detailed under:
ITA No.1176/Ahd/2017Gujarat State Co-Op Marketing Federation vs. PCIT Asst.Year -2008-09 -4- i. Deduction claimed u/s 80P(2)(e) of the Act on account of rent received for Rs.1,32,04,802/- from godown and office premises.
ii. The deduction claimed by the assessee under Chapter VI-A before setting of off carried forward business loss of Rs.75,91,978/- for the Assessment Year 2001-02.
The ld. AR before us submitted that the order sought to be revised by the AO was passed u/s 143(3) of the Act vide order dated 24.12.2010. However, the same can be revised within the two years from the end of the financial year, in which the order sought to be revised was passed. Thus, the cut of date to revise the order passed by the AO u/s 143(3) of the Act was 31.03.2013, whereas the ld. CIT has passed the order dated 29.12.2017 which is not invalid in the eyes of the law. The ld. Counsel by the assessee in support of his claim relied on the judgment of Hon'ble Supreme Court in the case of CIT vs. Alagendran Finance Ltd. reported in 162 taxmann.com 465.
On the other hand, ld. DR for the Revenue submitted that the order passed u/s 143(3) of the Act was merged in the order passed u/s 147 of the Act vide order dated 01.12.2015. Thus, the order of the AO can be revised within two years from the end of the financial year in which orders sought to be revised, passed i.e. 31.03.2018. Thus, the order passed by the ld. CIT u/s 263 is valid and within the provision of law.
ITA No.1176/Ahd/2017Gujarat State Co-Op Marketing Federation vs. PCIT Asst.Year -2008-09 -5- The ld. DR for the Revenue also submitted that the order of the AO was proposed to be held erroneous in so far as prejudicial to the interest of the revenue on account of the setting off carried forward business loss which got merged with the order passed u/s 147 of the Act. Therefore, the order passed by the ld. CIT was within the time specified u/s 263(2) of the Act. The ld DR for the Revenue relied on the judgment of Hon'ble Gujarat High Court in the case of New Jagat Textile Mills Pvt. Ltd. vs. CIT reported in 282 ITR 399. The ld. DR vehemently supported the order of ld. CIT.
5. We have heard the rival contentions and perused the materials available on record. In the instant case, the order passed by the AO u/s 143(3) of the Act dated 24.12.2010 was revised by the Ld. CIT u/s. 263 of the Act vide order dated 27.03.2017. At this juncture, we find relevant to produce the Section 263(2) of the act, which reads as under:
"Revision of orders prejudicial to revenue.
263. (1) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 11 [(2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed.]"
The plain reading of the above provision reveals that the order sought to be revised can be passed within the two years from the end of the financial year, in which such order was passed. There is no ambiguity that the orders sought to be revised was passed on 24.12.2010 and ITA No.1176/Ahd/2017 Gujarat State Co-Op Marketing Federation vs. PCIT Asst.Year -2008-09 -6- therefore the time limit to revise the same u/s 263 of the Act expires on 31.03.2013.
Indeed for the same A.Y. i.e., 2008-09 a reassessment order was passed u/s 147 of the Act on the issue of TDS claimed by the assessee. The relevant facts of the order passed u/s 147 of the Act are extracted below:
"The case was reopened on the basis of information generated from 26AS in PAN No. AAACG7895E in which the TDS was deducted on rent amount of Rs. 26,96,964/- and the assessee has not filed Return of Income, However, the assessee has filed return of income and also order u/s.143(3) of the I.T. Act was passed on 24/12/2010. The notice u/s 148 was issued on 31/03/2015, in response to which vide letter dated 21/04/2015 is submitted that original return was filed on 26/09/2008 vide acknowledgement 40121940260908 declaring total income was Nil may be treated as return filed against the notice u/s. 148. Notice u/s. 143(2) and 142(1) was issued on 06/11/2015.
In response to the above notice Shri Anuj Shah, C.A, attended and furnish the required details and submission, It is submitted that the assessee has issued two PAN Nos., however the assessee is using Pan No. AAAAG2927K and never use PAN No. AAACG7958E. It is further submitted that the entries of rent mentioned in 26AS have been dually accounted for in godown rent account. The copies of the same have been furnished. The same is verified and found to be correct."
From the above order, we note that there was no issue with regard to the deduction claimed by the assessee u/s 80P(2)(e) of the Act as well as the for the amount of brought forward loss set off against the income. Therefore, there is no question of revising the order passed u/s 147 of the Act. It is because there was no error observed by the ld.CIT u/s 263 of the Act in the assessment order framed under section 143(3) of the Act.
ITA No.1176/Ahd/2017Gujarat State Co-Op Marketing Federation vs. PCIT Asst.Year -2008-09 -7- Therefore, we are of the view that the order sought to be revised was passed by the AO vide order dated 24.12.2010. Accordingly, the time limit to revise the order u/s 143(3) of the Act passed on 24.12.2010 was up to 31.03.2013, which has already been expired. Therefore, the order passed by the ld. CIT u/s 263 of the Act revising the assessment framed u/s 143(3) of the Act dated 24.12.2010 was not sustainable. In this regard, we find support and guidance from the judgment of this Hon'ble Madras High Court in the case of M/s. Indira Industries vs. PCIT in W.A. No.1092 of 2017 & C.M.P. No.15224 of 2017. The relevant extract of the order is reproduced below:
"3(xv) We are unable to agree. We are unable to agree as Paragraph 15 of the Alagendran Finance case makes it clear that when a notice under Section 263 raises new issues, which are not subject matter of the re-assessment proceedings, then the two year period contemplated under Sub-section (2) of Section 263 would begin to run from the date of assessment and not from the date of re-assessment. In other words, the ratio laid down in Alagendran Finance case, particularly as elucidated in Paragraph 15 of the Alagendran Finance case, is to the effect that the two year limitation period stipulated under Section 263(2) will run from the date of assessment only and not from the date of reassessment when the Section 263 notice does not deal with the same subject as in assessment and when it deals with other issues which are not subject matter of reassessment proceedings."
The case law relied by the ld. DR i.e., New Jagat Textile Mills Pvt. Ltd.(supra) does not support the Revenue because it was on different reasoning. Relevant extract of the order of the Hon'ble Gujarat High Court in the case of New Jagat Textile Mills Pvt. Ltd (supra) is reproduced below:
ITA No.1176/Ahd/2017Gujarat State Co-Op Marketing Federation vs. PCIT Asst.Year -2008-09 -8- "Section 263 empowers the Commissioner to take up for consideration "any order passed" in any proceeding under the Act. It is not possible to read the provision as being limited to exercising revisional powers qua order of assessment only. It would take within its sweep even the orders wherein either proceedings are dropped or proceedings are filed."
Thus, it is clear that the case on hand relied by the ld. DR does not support in the case of the revenue. In view of the above, we hold that the order passed by the ld. CIT u/s 263 of the act is unsustainable thus the ground of appeal of the assessee is allowed.
In view of above, we hold that the order passed by the ld.CIT u/s 263 is barred by limitation. Accordingly, the same is not sustainable. Therefore, we are not inclined to adjudicate the issue raised by the assessee on merit. Hence the ground of appeal filed by the assessee is allowed.
6. In the result, the appeal filed by the assessee is allowed.
This Order pronounced in Open Court on 01/08/2018 Sd/- Sd/-
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(MADHUMITA ROY) (WASEEM AHMED)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad; Dated 01/08/2018
Priti Yadav, Sr.PS
ITA No.1176/Ahd/2017
Gujarat State Co-Op Marketing Federation vs. PCIT Asst.Year -2008-09 -9- आदे श क त"ल#प अ$े#षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. संबं'धत आयकर आयु)त / Concerned CIT
4. आयकर आय) ु त(अपील) / The CIT(A) - I, Ahmedabad.
5. ,वभागीय /त/न'ध, आयकर अपील य अ'धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड4 फाईल / Guard file.
आदे शानुसार/ BY ORDER, स या,पत /त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad