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Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA
Before: Shri P.M. Jagtap, Vice- & Shri Partha Sarathi Chaudhury
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA (Virtual Court) (Before Shri P.M. Jagtap, Vice-President & Shri Partha Sarathi Chaudhury, Judicial Member) Assessment Year: 2011-12 M/s. Seven Hills Constructions…….................................................................................Appellant [PAN: ABOFS 8390 J] Vs. ACIT, Circle-38, Kolkata.....………………..…………………..….........................................Respondent Appearances by: Sh. Arvind Agarwal, Adv., appeared on behalf of the Assessee. Sh. Sudipta Guha, CIT, appeared on behalf of the Revenue. Date of concluding the hearing : November 16th, 2021 Date of pronouncing the order : November 17th, 2021 ORDER Per Partha Sarathi Chaudhury, JM:
This appeal preferred by the assessee emanates from the order of the Learned Pr. Commissioner of Income Tax-13, Kolkata [hereinafter the “Pr. CIT”], dated 27.11.2019 u/s 154(8) of the Income Tax Act, 1961 (hereinafter the ‘Act’) for the Assessment Year (hereinafter ‘AY’) 2011-12 as per the following grounds of appeal:
“1. Because, the Id. Pr.C.I.T.-13/Kol. erred in law as well as in facts in passing of the impugned order u/s 154(8), rejecting the rectification application of the appellant, on the alleged ground, that the same was not maintainable in law as well as in facts, and his such conclusions are based on his surmises and conjunctures and are grossly unjustified, erroneous and unsustainable, and are contrary to the facts and material on record and provisions of law.
Because, the reliance placed by the Id. Pr.C.I.T.-13/Kol. on the ratio of the judgements relied upon by him in his impugned order, are contrary to the facts of the case and are distinguishable and are not applicable.
3. Because, in the given facts and circumstances of the case and the explanations and evidences on record filed before the Id. Pr.C.I.T.-13/Kol., he ought to have exercised his powers under the provision of the I.T. Act 1961, in considering the merits of the issues, and should have passed necessary orders instead of rejecting the appellants petition.
4. Because, the Id. Pr.C.I.T.-13/Kol. ought to have considered the evidences and documents on record filed before him and should have passed necessary orders following the principle of natural justice, which otherwise, has deprived the assessee of its rights.
The appellant craves leave to add further grounds of appeal or alter the grounds at the time of hearing.”
Assessment Year: 2011-12 M/s. Seven Hills Constructions.
2. The facts in brief are that an assessment u/s 143(3) of the Act was completed on the assessee vide order dated 17.02.2014. That after such assessment, the ld. CIT verified the case records of the assessment and held that the assessment framed by the Assessing Officer (hereinafter the ‘AO’) dated 17.02.2014 was a case of omission of conducting relevant enquiries by the AO which needed to be proved and enquired into. Thus, invoking his revisionary powers u/s 263 of the Act, the ld. CIT set aside the assessment order to the file of the AO for the purpose of framing an assessment afresh. Thereafter the AO, as per the directions of the ld CIT, initiated proceedings providing opportunity of hearing to the assessee. That during such proceeding before the AO, it was noticed that a reconciliation of accounts has to be verified as regards the creditor M/s. Sadbhav Engineering Ltd., however, it was stated by the assessee that they do not have the reconciliation details as regards the said concern. That with relevant enquiries conducted, the AO passed an order dated 29.09.2016 u/s 143(3)/263 of the Act which is the consequential order passed by the AO. The assessee aggrieved with the said order by the AO dated 29.09.2016 filed a rectification application u/s 154 of the Act before the AO on 21.05.2019. The AO thereafter passed order dated 27.05.2019 rejecting the assessee’s rectification application by making various observations/findings which are on record. Being further aggrieved, the assessee filed yet another rectification application u/s 154 of the Act before the Pr. CIT, for the purpose of rectification of the order dated 29.09.2016 passed by the AO u/s 143(3)/263 of the Act giving reference of AO’s order dated 27.05.2019 vide which the AO had rejected assessee’s rectification application. The Pr. CIT went on to examine in his order whether the rectification application u/s 154 of the Act filed before him by the assessee was maintainable as per law or not. The Pr. CIT arrived at the finding that on analysis of Section 154 of the Act, an Income-tax authority can amend or rectify any order which has been passed by such authority. Therefore, the AO being an Income-tax authority can amend any order passed by him and the Pr. CIT being another Income-tax authority can also amend or rectify any order passed by him but the law does not permit that the order passed by one Income- tax authority can be rectified by another Income-tax authority. In this case when the assessee was aggrieved by the rejection of its rectification application filed u/s 154 of the Act by the AO, then the proper recourse for them would have been to file an appeal before the ld. CIT(A) against such rejection of application order u/s 154 of the Act. However, what the assessee has done is being aggrieved with the rejection of Assessment Year: 2011-12 M/s. Seven Hills Constructions. rectification petition by the AO he has filed another rectification petition before the Pr. CIT which is not permitted within the framework of the Income-tax Act. This view was vehemently supported by the ld. D/R at the time of hearing.
Per contra, the ld. Counsel for the assessee submitted that his only prayer is that at the time of proceedings before the AO while he was passing the consequential order u/s 263/143(3) of the Act, the AO had asked for reconciliation statement in respect of M/s. Sadbhav Engineering Ltd. At that point of time the assessee was unable to furnish the details however before us, the ld. Counsel for the assessee submitted that they have acquired certified copy of reconciliation statement of the said M/s. Sadbhav Engineering Ltd. from the Department and that the matter may be restored to the file of the AO so that he may verify and readjudicate the matter as per law.
We are of the considered view after considering the totality of the facts and circumstances that against the rejection of the rectification application of the assessee by the AO, as correctly pointed out by the ld. D/R, the proper recourse available to the assessee is to file an appeal before the ld. CIT(A). That filing another rectification application before the Pr. CIT against the rejection of rectification application u/s 154 of the Act by the AO is not the proper procedure within the framework of the Act. This appeal preferred by the assessee before us is directed against the order passed by the Pr. CIT wherein the assessee has filed a rectification application before him against the order of the rectification passed by the AO. This action of the assessee is legally not maintainable within the purview of the Act and only remedy available to them is to file an appeal before the first appellate authority. In view thereof we do not find any infirmity with the findings of the Pr. CIT which is upheld.