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Income Tax Appellate Tribunal, BANGALORE BENCHES “ C ” BENCH: BANGALORE
Before: SHRI JASON P BOAZ & SHRI PAVAN KUMAR GADALE
O R D E R
PER SHRI PAVAN KUMAR GADALE, JM :
The assessee has filed an appeal against the order of Commissioner of Income Tax (Appeals), Davangere passed u/s. 143(3) and u/s 250 of the Income Tax Act, 1961.
The assessee has raised the following grounds of appeal :
3. The Brief facts of the case are that the assessee was a Commission Agent and filed the Return of Income on 30.03.2010 with total income of Rs.29,704 and the Return of Income was processed under Section 143(1) of the Act. Subsequently, the case was selected for scrutiny under CASS and Notices under Section 143(2) and 142(1) of the Act were issued. In compliance, the learned Authorised Representative of the assessee appeared and produced the Books of Accounts and vouchers whereas the Assessing Officer on perusal of the financial statement found that there is a discrepancy in the balances of sundry creditors as per the Balance Sheet and therefore called for confirmation of letters and has granted credit to the extent of confirmation letters received from the creditors and the balance was treated as not proved and made addition of Rs.1,33,25,588 and passed under Section 143(3) of the Act dt.27.12.2011. Aggrieved by the order, the assessee has filed an appeal with the learned CIT (Appeals) whereas the CIT (Appeals) granted partly allowed the appeal. Aggrieved by the order of learned CIT (Appeals), the assessee has filed an appeal before the Tribunal.
At the time of hearing, the learned Authorised Representative has argued only on Ground Nos.1 & 2 on the limitation of passing of order under Section 143(3) of the Act. The learned Authorised Representative filed Paper Book to substantiate that the learned CIT (Appeals) has erred in upholding the assessment order passed is not barred by limitation the Authorised Representative substantiated with evidences to support the dispatch of the assessment order and has restricted his arguments only to the above ground of appeal
. Contra, the ld. DR supported the orders of learned CIT (Appeals) and submitted that the assessment order was passed within the time allowed under the provisions of I.T. Act.
4. We heard the rival submissions and perused the material on record. The sole matrix of the disputed issue is in respect of assessment order passed by the Assessing Officer under Section 143(3) of the Act Dt.27.12.2011 is barred by limitation as per Explanation under Section 153(1) of the Act and the order was received on 12.01.2012 by the assessee. The learned Authorised Representative submitted that the learned CIT (Appeals) erred in observing that the assessment order was passed well within time. The learned Authorised Representative referred to the written submissions filed before CIT (Appeals) at pages 1 to 4 of the Paper Book on passing of the order by the Assessing Officer with delay supported with judicial decision and also further demonstrated with the confirmation of the Post Office at page 6 of Paper Book which is as under :
The learned Authorised Representative submitted that the learned CIT (Appeals) has erred in not considering the submissions and emphasized on the postal department evidence filed to prove that the Revenue has booked the Speed Post on 10.01.2012 and was dispatched to the destination on 10.01.2012 as referred above. The learned Authorised Representative relied on the decision of jurisdictional High Court in the case of CIT Vs. BJN Hotels Limited 382 ITR 110 (Kar) and the co- Bench decision in the case of Globe Transport Corporation Vs. ACIT in to 631/Bang/2014 Dt.04.01.2019. Considering the submissions of the assessee and information on record and the judicial decisions we found disputed issue was dealt by the co- ordinate Bench of the Tribunal in the case of Globe Transport Corporation Vs. ACIT (supra) at page 7 paras 10 to 14 as under : “10. We have heard the rival submissions. As we have already observed, it is undisputed that the order of assessment was despatched by the AO only on 09.01.2012 and that the last date of limitation for passing the order of assessment, pursuant to the directions of the Tribunal in all the three assessment years was 31.12.2011. The question which arises for consideration is, whether the date of despatch has to be construed as the date of order of assessment and consequentially the orders of assessment have to be held as bad in law.
On the above question, the ld. counsel for the assessee has drawn our attention to the decision of the Hon’ble High Court of Karnataka in the case of Maharaja Shopping Complex v. DCIT, ITA No.832/2008, judgment dated 14.10.2014. In the aforesaid case, the facts were identical as the facts in the present case.
In the aforesaid case, the time limit for passing the order of assessment was 31.03.2006, the order of assessment was dated 28.02.2006. The order of assessment was, however, served on the assessee only on 18.04.2006. The question before the Court was, whether the order of assessment was barred by limitation and the date mentioned in the order of assessment should be ignored and only the date on which it was despatched to the assessee should be taken as the date of the order. The Hon’ble High Court placed reliance on the decision of the Hon’ble Kerala High Court in the case of Govt. Warehouse v. State of Kerala, [1988] STC Vol. 69 Pg. 62, wherein the Hon’ble Kerala High Court in para 14 observed as follows:- “14. The order of any authority cannot be said to be passed unless it is in some way pronounced or published or the party affected has the means of knowing it. It is not enough if the order is made, signed, and kept in the file, because such order may be liable to change at the hands of the authority who may modify it or even destroy it, before it is made known, based on subsequent information, thinking or change of opinion. To make the order complete and effective, it should be issued, so as to be beyond the control of the authority concerned, for any possible change or modification therein. This should be done within the prescribed period, though the actual service of the order may be beyond that period. This aspect of the matter had not come up for consideration in the cases of Viswanaihan Chettiar [1954] 25 ITR 79 (Mad.) and Laxmidas & Co. [1969] 72 ITR 88 (Bom) where the only question dealt with was whether service of the order after the prescribed period rendered it invalid. Unless, therefore, the order of the Deputy Commissioner in this case had been so issued from his office within the period prescribed, it has to be held that the proceedings are barred by limitation. This question has not been considered by the Tribunal. The Tribunal, which passed the order, apparently did not have the benefit of the decision in Malayil Mills case (T. R. C. Nos. 15 and 16 of 1981 decided on 7th June, 1982- Kerala High Court) which, so far as we could see, remains, unreported. The matter has therefore to go back to the Tribunal for an examination of the records to ascertain whether the order of the Deputy Commissioner had been issued from his office within the period of four years prescribed in Section 35(2) of the Act. The Tribunal will adjudicate the matter in the light of the observations contained herein and in the judgment in the case of Malayil Mills (T.R.C. Nos.15 and 16 of 1981 decided on 7th June, 1982 – Kerala High Court) extracted earlier.”
The Hon’ble Kerala High Court thereafter held that the date of despatch of the order of assessment should be construed as the date of order of assessment and consequently quashed the orders of assessment as barred by limitation with the following observations:- “5. Learned counsel for the revenue is unable to point out from the records whether the assessment order was dispatched from the office before 31 03.2006. Therefore, it is clear when the same was received by the assessee on 18.04.2006, it might have been dispatched few days prior to that and subsequent to 31.03.2006. In that view of the matter, the law laid down as aforesaid squarely applies to the facts of this case and therefore, any just conclusion that could be reached is that the order passed is barred by law of limitation. In that view of the matter, the additional substantial question of law framed today is answered in favour of the assessee and against the revenue. Accordingly, the appeal is allowed. The impugned orders are set-aside.”
In our view, the facts of the aforesaid case are squarely applicable to the facts of the present case. Following the aforesaid judgment of Hon’ble High Court of Karnataka, the orders of assessment have to be held as barred by time and all the orders of assessment are therefore liable to be annulled and are hereby annulled.” We found that the ratio of decision of the co-ordinate Bench is applicable to the present case and we find the order passed by the Assessing Officer under Section 143(3) dt.27.12.2011 was dispatched on 10.01.2012 as evident from the record / confirmation of the postal department. We support our view relying on the co-ordinate Bench decision of Tribunal and quashed the order of assessment order under Section 143(3) of the Act passed by the Assessing Officer and allow the grounds of appeal of the assessee. Since we have dealt on the primary point of legal issue, the other issues raised in the grounds of appeal become academic as the assessment order has been quashed and therefore other grounds require no adjudication.
In the result, the appeal of the assessee is allowed.