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Income Tax Appellate Tribunal, “SMC-C” BENCH : BANGALORE
Before: SHRI ARUN KUMAR GARODIA
O R D E R
Per Shri A.K. Garodia, Accountant Member
This appeal is filed by the assessee which is directed against the order of ld. CIT(A) – 6,Bangalore dated 31.07.2017 for Assessment Year 2001-02.
The grounds raised
by the assessee are as under. “1. The appellate order of the Hon'ble Commissioner of Income Tax (Appeals) 6, Bangalore dt. 31.07.2017 insofar as it is against the appellant, is opposed to law, weight of evidence, and principles of natural justice under the facts and circumstances of the case.
2. The Commissioner of Income Tax (Appeals) - 6 has grossly erred in modifying the original appellate order passed by Commissioner of Income Tax (Appeals) - III vide his order dt. 24.11.2004 under the facts and circumstances of the case.
3. The Commissioner of Income Tax (Appeals) - 6 has grossly erred in modifying the original appellate order purely relying on the Miscellaneous Petition filed by the assessing officer as mentioned in the appellate order dt. 31.07.2017 under the facts and circumstances of the case.
4. The Commissioner of Income Tax (Appeals) - 6 has grossly erred in modifying the original appellate order without appreciating the fact that the Miscellaneous Petition filed by the assessing officer (as mentioned in the appellate order dt. 31.07.2017) is not at all communicated to the appellant under the facts and circumstances of the case.
5. The Commissioner of Income Tax (Appeals) - 6 has grossly erred in modifying the original appellate order without appreciating the fact that the appellant is not at all aware of the fact that any Miscellaneous Petition was filed by the assessing officer and further erred in not bringing to the notice of the appellant regarding the Miscellaneous Petition filed by the assessing officer either by the Commissioner of Income Tax (Appeals) - 6 or by the assessing officer under the facts and circumstances of the case.
The order of the Commissioner of Income Tax (Appeals) - 6 is void- ab-initio inasmuch as the limitation period for passing such modified order was already lapsed under the facts and circumstances of the case.
The order of the Commissioner of Income Tax (Appeals) - 6 is unwarranted and unjustified since after a lapse of 13 years from the date of original , appellate order passed in the year 2004, the Commissioner of Income Tax (Appeals) - 6 has modified the said original appellate order which has caused undue hardship and costs to the appellant and further that the Commissioner of Income Tax (Appeals) - 6 as well as the assessing officer has deprived the appellantof basic principles of natural justice under the facts and circumstances of the case.
Without prejudice to the above the Commissioner of Income Tax (Appeals)-6 has grossly erred in upholding the original order of the assessing officer without giving any opportunity to the appellant and has thereby deprived the appellant of principles of natural justice under the facts and circumstances of the case.
Without prejudice to the above the appellant denies itself liable to be assessed at a total income of Rs.5,73,396/- as against declared income of Rs.2,58,629/- under the facts and circumstances of the case.
The order of the Commissioner of Income Tax (Appeals) - 6 is modifying the original appellate order merely relying upon the Miscellaneous Petition (as stated in the modified appellate order dt. 31.07.2017) is invalid since the as per Pg. 2 of Commissioner of Income Tax (Appeals) - 6 order dt. 31.07.2017, the Commissioner has relied upon the words of the assessing officer in his Miscellaneous Petition referred to by the Commissioner "The Sales Tax Tribunal has only set aside the assessment and referred the case to the Sales Tax Assessing Authority for re-doing the assessment which is yet to become final and the same is pending before the said Sales Tax Assessing Authorities" under the facts and circumstances of the case.
Without prejudice to the above but not conceding to the fact that the Miscellaneous Petition is true, the Commissioner of Income Tax (Appeals) - 6 has grossly erred in interpreting the aforementioned statement of assessing officer referred to in the appellate order dt. 31.07.2017 since the words "Set Aside" used by the Sales Tax Appellate Tribunal indicates that the appeal of the appellant is allowed under the facts and circumstances of the case.
Without prejudice to the above but not conceding to the fact that the Miscellaneous Petition is true, the Commissioner of Income Tax (Appeals) - 6 and also the assessing officer have grossly erred in not appreciating the fact that there are no sales tax assessments pending in the case of the appellant for the assessment year under consideration under the facts and circumstances of the case.
The Commissioner of Income Tax (Appeals) - 6 has grossly erred in modifying the original appellate order since there was no opportunity provided to the appellant and further the onus was on the assessing officer to prove that the appellant's case was pending for assessment before the sales tax authorities (before filing the Miscellaneous Petition which the Commissioner of Income Tax (Appeals)-6 has blindly accepted) without application of mind under the facts and circumstances of the case.
For these and such other grounds as may be raised during the course of appellate proceedings, the appellant humbly prays before the Hon'ble Tribunal to allow the appeal of the appellant and reinstate the original appellate order passed by the Commissioner of Income Tax (Appeals) - III dt. 24.11.2004.
At the very outset, it was submitted by ld. AR of assessee that the impugned order of CIT(A) is dated 31.07.2017 whereas the AO, Ward-6(4), Bangalore had filed the M.P. before the CIT(A) on 03.10.2005 and therefore, this order of CIT(A) is time barred. He further pointed out that earlier, the AO passed the order u/s. 154 on 25.03.2004 and against that order of AO, appeal was filed by assessee before CIT(A). The only issue involved was regarding the addition made u/s. 69 of IT Act on account on account of unaccounted income on suppression of sales to the extent of Rs. 3,14,768/- based on the unaccounted stock and sales as pointed out by the Sales Tax Authorities in their order in the case of the assessee. He submitted that the addition was made on the basis of the assessment made by the Sales Tax Authorities which was disputed by the assessee in a separate appeal filed before the Sales Tax Tribunal and the Sales Tax Tribunal has set aside the assessment and referred the case to the Sales Tax Assessing Authority for re-doing the assessment. He submitted that the issue has not become final and the same is pending before the Sales Tax Authorities. As per the order passed by the CIT(A) in the appeal, in the original order passed by the CIT(A), the appeal of the assessee was allowed but in the order in respect of M.P. filed by the AO before CIT(A), the CIT(A) has modified the original order of CIT(A) and confirmed the AO’s order by holding that since the addition made by the Sales Tax Authorities has not been deleted by the Sales Tax Tribunal but was remitted back, the assessment order u/s. 143(3) dated 02.08.2004 has to be confirmed. He submitted that till date, no order has been passed by Sales Tax Authorities after restoring back of the matter by the Sales Tax Tribunal and therefore, the addition made by the AO has no legs to stand and hence, it has to be deleted as was done by CIT(A) in the original order. The ld. DR of revenue supported the impugned order of CIT(A).
I have considered the rival submissions. I find that as per the impugned order of CIT(A), the addition was made by the AO only on the basis of addition made on account of unaccounted income on suppression of sales, as per the sales tax assessment order and as per the Sales Tax Tribunal, the sale tax order has been set aside and the matter was restored back to the file of sales tax officer. Hence in my considered opinion and in the facts of the present case, the addition made by the AO has no legs to stand till the sales tax officer makes the addition again or there is any other material for making the addition. Hence I reverse the impugned order of CIT(A) and restore the original order of CIT(A) as per which the addition made by the AO was deleted by him. However, if the Sales tax Authorities makes the addition again, the AO may pass order u/s 154 to make similar addition within the time permitted u/s 154 from the said assessment order of sales tax authority.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on the date mentioned on the caption page.