INCOME-TAX OFFICER vs. M/S. SHRIRAM PETROLEUM INDUSTRIES,, NANDURBAR

आयकर अपीलीय अिधकरण “ए” �यायपीठ पुणे म� । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE �ी डी. क�णाकरा राव, लेखा सद�य एवं �ी िवकास अव�थी, �याियक सद�य के सम� BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM आयकर अपील सं. / ITA Nos.2489 & 2490/PUN/2016 िनधा�रण वष� / Assessment Years : 2003-04 & 2004-05 ITO, Ward-4, .......अपीलाथ� / Appellant Dhule. बनाम / V/s. M/s Shriram Petroleum Industries, C/o. Amit R. Raghuwanshi, Pardeshi Pura, Radha Sadan, Nandurbar-425412 ……��यथ� / Respondent PAN : AAOFS1009H C.O. Nos.05 & 06/PUN/2019 (Arising out of ITA Nos.2489 & 2490/PUN/2016) िनधा�रण वष� / Assessment Years : 2003-04 & 2004-05 M/s Shriram Petroleum Industries, C/o. Amit R. Raghuwanshi, Pardeshi Pura, Radha Sadan, Nandurbar-425412 .......अपीलाथ� / Appellant PAN : AAOFS1009H बनाम / V/s. ITO, Ward-4, ……��यथ� / Respondent Dhule. Revenue by : Shri N. Ashok Babu Assessee by : Shri Sanket Joshi सुनवाई क� तारीख / Date of Hearing : 21.08.2019 घोषणा क� तारीख / Date of Pronouncement : 05.09.2019 आदेश / ORDER PER D. KARUNAKARA RAO, AM: There are four appeals under consideration involving the assessment years 2003-04 and 2004-05. The appeals (2 appeals) in ITA Nos.2489 & 2490/PUN/2016 are filed by the Revenue against the two

2 ITA Nos.2489 & 2490/PUN/2016 C.O. Nos.05 & 06/PUN/2019 separate orders of CIT(A)-1, Nashik commonly dated 23.08.2016 for the Assessment Years 2003-04 and 2004-05 respectively. The Cross Objections (2 cross objections) in C.O. Nos.05 & 06/PUN/2019 filed by the assessee. Preliminary Issue - Condonation of Delay 2. Before us, at the outset, ld. Counsel for the assessee submitted that the cross objections could not be filed in time and the said cross objections are now filed with the delay of 40 days. In this regard, ld. Counsel for the assessee filed an affidavit stating the reasons for non- filing the cross objections of the assessee in time. For the sake of completeness, the relevant paras of the said affidavit are extracted hereunder :- “………… I wish to state that I am a practicing Chartered Accountant based in Nashik and I am looking after the income tax appellate matters of the partnership firm, M/s. Shriram Petroleum Industries, the partners of which are based in Nandurbar. I hereby state that the Appeal Memo filed by the Income Tax Department in Form No.36 before Hon’ble ITAT Pune bearing ITA Nos.2489 & 2490/PN/2016 was received at the address of M/s. Shriram Petroleum Industries at Nandurbar on 29.11.2008. I wish to state that the appeal memo was sent by the partner of the above firm, Mr. Amit Raghuvanshi to my office at Nashik around the third week of December 2018. I further state that I was scheduled to get married on 28th December 2018 and hence, I was on leave from Office during the relevant period when Mr. Raghuvanshi sent the appeal memo to my office for filing cross objections. I wish to state that after my marriage, I travelled out of India and returned back to India only on 15.01.2019. I hereby state that immediately on returned to India, I travelled to Pune for attending hearings before Hon’ble ITAT Pune from 16.01.2019 to 29.01.2019. I further wish to state that on returning back to Nashik Office on 30.01.2019,1 noticed that the cross objections against the Form No.36 filed by the Dept. in the case of M/s. Shriram Petroleum Industries had

3 ITA Nos.2489 & 2490/PUN/2016 C.O. Nos.05 & 06/PUN/2019 remained to be filed before Hon’ble ITAT Pune. I hereby state that thereafter, the Cross Objections in Form No.36A were drafted by me on a priority basis and the same were sent to the partner of M/s. Shriram Petroleum Industries at Nandurbar for obtaining signatures. I wish to state that after obtaining the relevant signatures, the Memorandum of Cross Objections in Form No.36A was manually filed by myself at Pune on 07/02/2019. I hereby state that in view of the above facts, there was a delay of 40 days in filing the Memo of Cross Objections before Hon’ble ITAT Pune. I hereby state that the fact that the Income Tax Department had preferred an appeal before Hon’ble ITAT came to my notice on 28.11.2018 after finding out that the matter was listed in the Cause List before Tribunal. I wish to state that at that time itself, I had advised the partner of the above firm that we should file cross objections in Form No.36A before Hon’ble Tribunal against the appeals filed by the Income Tax Dept. I further state that in the first hearing on 29.11,2018, I had filed an adjournment application before Hon’ble ITAT wherein it was expressly mentioned that the assessee firm wishes to file cross objections against the Departmental Appeals and since the Form No.36 filed by the Dept. was not received by the assessee till that date, the assessee firm had requested for an adjournment.” 3. From the above narration of facts by the Chartered Accountant, we find there is no mala-fide in the conduct of assessee in filing the Cross Objections late. Considering the above reasons given by the assessee in the affidavit, we find it is a fit case for condoning the delay of 40 days. After condoning the delay, we proceed to adjudicate the cross objections of the assessee first, in the following paragraphs.

C.O. Nos.05 & 06/PUN/2019 – By Assessee 4. In the cross objections, the assessee raised a legal objection/ground relating to the un-sustainability of the additions when the Assessing Officer failed to make any addition on account of reasons recorded by the Assessing Officer while reopening the completed

4 ITA Nos.2489 & 2490/PUN/2016 C.O. Nos.05 & 06/PUN/2019 assessment and while assuming the jurisdiction u/s 147/148 of the Act. In this regard, ld. Counsel brought our attention to the reasons and mentioned that the issue for which the assessments reopened relates to the suppression of the sales of Rs.2,01,39,410/-. 5. We proceed to extracted the relevant reasons mentioned by the Assessing Officer in the assessment order and the same are hereunder :- “1. The finding of the sale tax department revealed that the differential amount of sales-tax @ 16% has been evaded by the assessee. 2. The assessee has suppressed the sales in the return of income by Rs.2,01,39,410/-.” 6. Further, bringing our attention to the details of addition made by the Assessing Officer vide the contents of para 6 of assessment order, ld. Counsel for the assessee submitted that the addition made by the Assessing Officer relates to the GP percentage based addition. There is no reference to such addition in the reasons recorded by the Assessing Officer. 7. Before us, ld. Counsel for the assessee submitted that such reassessment is void ab-initio considering the facts and the ratio laid down by the Hon’ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd., 331 ITR 236 (Bom), copy of the which is placed on record. 8. On the other hand, ld. DR for the Revenue relied heavily on the orders of the revenue authorities.

5 ITA Nos.2489 & 2490/PUN/2016 C.O. Nos.05 & 06/PUN/2019 9. We heard both the sides on this legal issue and perused the orders of the revenue authorities and also the judgement of the Hon’ble Bombay High Court in the case of Jet Airways (I) Ltd. (supra). We proceed to extract the ratio of the judgement of the Hon’ble Bombay High Court (supra) as follows :- “Reassessment – Scope – Income in respect of which notice issued not found to be escaped income – Once the AO accepts that the income in respect of which he entertained reason to believe to have escaped assessment, was not in fact escaped income; he has no jurisdiction to reassess other items of income – In such a situation, Expln. 3 to s. 147 does not come to the reserve of AO.” 10. Considering the above settled nature of the issue and undisputed fact that the Assessing Officer did not make any addition on account of reasons recorded by him while reopening the assessment, we are of the opinion that the reassessments made by the Assessing Officer are to be quashed as null and void. 11. In the result, both the Cross Objections of the assessee for both the assessment years are allowed on technical grounds. ITA Nos.2489 & 2490/PUN/2016 – By Revenue 12. Considering the relief granted to the assessee in cross objections and the reassessments made by the Assessing Officer are quashed, we are of the opinion that, the adjudication of the appeals of the Revenue becomes an academic exercise only. Therefore, both the appeals of the Revenue are dismissed as academic.

6 ITA Nos.2489 & 2490/PUN/2016 C.O. Nos.05 & 06/PUN/2019 13. In the result, both the appeals of the Revenue are dismissed. 14. Resultantly, both the Cross Objections of the assessee are allowed and both the appeals of the Revenue are dismissed.

Order pronounced on 05th day of September, 2019. Sd/- Sd/- (िवकास अव�थी /VIKAS AWASTHY) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �याियक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 05th September, 2019. Sujeet आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A)-I, Nashik. 4. The CCIT, Nashik. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.