Loading judgment…
Facts
The case involves four appeals filed by SS 74 Salem Steel Plant Employee Cooperative Stores Limited for AYs 2012-13 and 2017-18, challenging reassessment orders, penalty orders, and an ex-parte assessment order with an addition under Section 44AD due to non-compliance. A minor delay in filing two appeals was condoned by the Tribunal.
Held
The Tribunal remitted the reassessment order (ITA No. 1290) for de novo adjudication as it was passed beyond the statutory time limit. Consequently, the related penalty orders (ITA Nos. 1291 & 1292) were set aside as redundant. The ex-parte assessment order (ITA No. 1293) was also remitted for fresh adjudication, giving the assessee a final opportunity to present its case, subject to a cost of Rs. 5,000.
Key Issues
Whether reassessment orders passed beyond the statutory time limit are valid; the consequential validity of penalty orders when the underlying assessment is remitted; and the process for readjudication of ex-parte assessment orders due to assessee's non-compliance.
Sections Cited
147, 144, 271(1)(c), 271B, 153(2), 148, 143(3), 68, 44AD
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI AMITABH SHUKLA
SS 74 Salem Steel Plant Employee Income Tax Officer, Cooperative Stores Limited, Ward-1(6), Mohan Nagar, Salem, Salem. Mohan Nagar S.O(Salem), Tamil Nadu-636 030. [PAN: AADAS2954F] (प्रत्यर्थी/Respondent) (अपीलार्थी/Appellant) अपीलार्थी की ओर से/ Assessee by : S/Shri Senthil Kumar & S.Bhupendran, Advocates(Erode). प्रत्यर्थी की ओर से /Revenue by : Ms.V.Supraja, Addl.CIT सुनवाई की तारीख/Date of Hearing : 15.07.2025 घोषणा की तारीख /Date of Pronouncement : 18.07.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M :
The below mentioned four appeals have been filed by the appellant assessee for AYs-2012-13, and 2017-18 contesting the order of Ld. Assessing Officer indicated Column-G, herein below:-
S. Appeal U/s AYs Appellant CIT(A) Order Details Respondent No. Nos. A B C D E F G & Order No.ITBA / U/s 147 NFAC / S / 250 / 2024-25 1290 / r.w.s. 144 / 1073809764(1) dated Chny / 1 2012-13 dated 28.02.2025 2025 19.09.2021 SS 74 Salem Steel Plant Employee 271(1) DIN & Order No.ITBA / Cooperative Stores ( c ) dated NFAC / S / 250 / 2024-25 1291 / Limited, Income Tax 2 2012-13 14.01.2022 / 1074523977(1) dated Mohan Nagar, Salem, Chny / Officer, 15.03.2025 2025 Mohan Nagar Ward-1(6), S.O(Salem), ITA No. U/s 271B DIN & Order No.ITBA / Salem. Tamil Nadu-636 030. dated NFAC / S / 250 / 2024-25 1292 / [PAN: AADAS2954F] 3 2012-13 14.01.2022 / 1074520512(1) dated Chny / 15.03.2025 2025 ITA No. U/s 144 DIN & Order No.ITBA / dated APL / S / 250 / 2024-25 / 1293 / 4 2017-18 22.11.2019 1073722384(1) dated Chny / 25.02.2025 2025 All the above four appeals are of the same assessee centering around common issue and hence were heard together and adjudicated by this common order. Thus, the appeal vide is w.r.t order u/s 147 r.w.s 144 passed for AY-2012-13. The twin appeals vide & 1292 are w.r.t. orders u/s 271(1)(c ) and 271B for AY-2012-13. The is contesting order u/s 144 for AY-2016-17 2.0 The registry informed that there is a delay 5 days in appeals filed and 1293. The assesse has pleaded that there was some misunderstanding qua limitation timelines contributing to the impugned delay. It was stated that the same was neither willful nor wanton. The assesse submitted that there will not be case of any non- compliance now. We have considered the justification put forth by the assesse and we are satisfied with their adequacy. We are also Page - 2 - of 9 conscious of the fact that no litigant gains by intentionally delaying its own matters. The Ld. DR did not pose any serious objections to the delay. Accordingly, we hereby condone the delay and proceed to adjudicate this appeal. Appeal vide ITA No.1290 3.0 At the outset for the Ld.Counsel for the assessee requested to file an additional ground of appeal challenging the order of the Ld.AO on legal grounds. It was contended that the same could not be taken up before the lower authorities. It was argued that on the impugned matter the assessee’s case is covered by decision of Hon’ble Apex Court in the case of NTPC 229 ITR 383 postulating that a fresh claim not made before lower authorities can be admitted and adjudicated by the tribunal. The Ld. Counsel argued that in its case order u/s 144 dated 19.09.2021 was passed in response to notice u/s 148 which was issued on 26.03.2019. Within the meanings of section 153(2) order u/s 147 r.w.s. 143(3) / 144 was to be passed within a period of nine months from the end of the financial year in which notice u/s 148 was issued. Accordingly, the reassessment order under section 153(2) ought to have been passed on or before 31.12.2019 whereas the same was passed on 19.09.2021. The Ld.AR submitted that through the order u/s. 147 dated 19.09.2021 the Ld.AO has made addition u/s 68 of Rs.29,77,850/- to the Page - 3 - of 9 returned income on account of unexplained cash deposits of even amount. The Ld.CIT(A) has also reportedly not passed a speaking order. It was therefore pleaded that the reassessment order be set aside. 4.0 Per contra, the Ld. DR relied upon the order of lower authorities. The Ld. DR argued that Revenue’s case is covered by the TOLA guidelines. 5.0 We have heard rival submissions in the light of material available on records. We have noted that the Hon’ble Apex Court in the case of NTPC 229 ITR 383 ruled that a fresh claim not made before lower authorities can be admitted and adjudicated by the tribunal. Accordingly, the addition ground raised by the appellant assessee is admitted for adjudication. We have noted provision of section 153(2) of the Act stipulating that for the present assessment year i.e AY-2012-13 reassessment order was required to be passed within a period of nine months from the end of the financial year in which notice u/s 148 was issued. The Revenue however has argued that its case is covered by the TOLA guidelines. Be that as it may be we of the view that in the interest of justice it would be appropriate to remit this case to Ld.AO for readjudication on merits after ascertaining the correct date of issue / service of notice u/s 148 and in line with prescription of section 153(2) of the Act. The order of lower authorities is therefore set aside. The Ld.AO is directed to examine the matter afresh and make a de novo Page - 4 - of 9 assessment, in accordance with law particularly the conditions prescribed in section 153(2) of the Act. The Ld. AO shall give due opportunity of being heard to the assessee. The assessee shall comply with all the statutory notices issued by the Ld.AO. Accordingly, all the grounds of appeal raised by the including the additional ground are allowed for statistical purposes. 6.0 In the result, the appeal of assessee vide is allowed for statistical purposes. ITA No.1291 and ITA No. 1292 7.0 We have noted that assessee’s appeal vide ITA No.1291 and ITA No. 1292 is w.r.t imposition of penalty u/s 271(1)(c ) and 271 B qua the assessment order u/s 147 r.w.s. 143(3) dated 19.09.2021(supra). As we have allowed assessee’s appeal vide ITA No.1290 for statistical purposes by remitting the matter back to the Ld.AO, the penalty order u/s 271(1)(c ) and 271 B has become redundant and infructuous. The same is therefore set aside. The Revenue would however be at liberty to reconsider imposition of any penalty order u/s 271(1)(c ) & 271 B, in accordance with law, if situation so warrants upon readjudication of assessment order de novo as above. Accordingly, assessee’s appeal vide ITA No.1291 & 1292 are also allowed for statistical purposes.
Page - 5 - of 9 8.0 At the outset, the Ld.Counsel for the assessee submitted that it is contesting the ex-parte orders passed by the Ld.AO and the Ld.CIT(A). The Ld. Counsel argued that the impugned assessment order in the case of the assessee trust an addition of Rs.8,82,490/- has been made by treating a portion of cash deposits as its business income by applying provisions of 44AD of the Act. It was accordingly requested that the matter may be considered for remission back to the Ld.AO for assessment de novo. The Ld.Counsel submitted that full compliance would now be made. The assessee has also filed in this case an affidavit from the secretary being the authorized signatory of the appellant society, that full cooperation would now be made to the assessing officer in the statutory proceedings. 9.0 Per contra, the Ld.DR relied upon the order of lower authorities. It was submitted that the assessee is a habitual defaulter and no sympathy deserves to be given. The Ld. DR also requested for levy of cost upon the assessee. 10.0 We have heard rival submissions in the light of material available on records. It is an undisputed fact on record that the appellant society could not make due compliances before the lower authorities. The Ld. Counsel for the assessee has not been able to convince us totally on the reasons for non-compliance, inter-alia, including shortage of manpower Page - 6 - of 9 and engagement in other activities. We are however also conscious of the fact that no litigant gains by not prosecuting its case. Be that as it may be, we are of the view that the issues seminal to the assessee have not been objectively and comprehensively analyzed by the lower authorities. We are of the view that ends of justice would be met if the assessee is given one last opportunity to present its case and filed supporting evidences before the Ld.AO. The decision to remit it back to the Ld. AO is taken in view of the fact that an Assessing Officer is the fulcrum of assessment proceedings. He possess the first right and responsibilities to examine facts of a case before arriving at his decision qua determination of taxable income in a particular case. Without prejudice it has also been noted that in this case the Ld. AO did not have adequate opportunities to examine the varied facts seminal therein. We have noted with respectful deference the decision of Hon’ble Apex Court in the case of TIN box 249 ITR 216 on the subject matter. Accordingly, the matter stands remitted back to the Ld. AO for fresh adjudication de novo by passing a speaking order. To the extent the order of lower authorities on this issue stands set aside. The Ld. AO shall give opportunities of being heard to the assesse and it shall be bounden upon the assesse to comply with the notices issued by the Ld. AO. Any non- compliance on the part of the assesse can be adversely viewed. The assessee is at liberty to produce all the evidences deemed relevant in Page - 7 - of 9 support of its claims before the Ld. AO during the readjudication proceedings. Accordingly, all the grounds of appeal in raised by the assessee are therefore allowed for statistical purposes. This order is however subject to payment of cost of Rs.5,000/-(Rupees five thousand only) by the assessee to the Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within 30 days of the receipt of this order. 11.0 In the result, the appeals of the assessee are decided as under:-
Allowed for Statistical Purposes 2012-13 / Chny / 2025 Allowed for Statistical Purposes 2012-13 / Chny / 2025 Allowed for Statistical Purposes 2012-13 ITA No. 1293 / Chny / 2025 Allowed for Statistical Purposes 2017-18
Order pronounced on 18th , July-2025 at Chennai.
Sd/- Sd/- (यस यस धवश्वनेत्र रधव) (अधमताभ शुक्ला) (SS VISWANETHRA RAVI) (AMITABH SHUKLA) न्याधयक सदस्य / Judicial Member लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 18th , July-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to:
Page - 8 - of 9
अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai/Coimbatore/Madurai/Salem. 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF
Page - 9 - of 9