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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI N.S.SAINI, AM & SHRI PAVAN KUMAR GADALE, JM
आयकर अपील�य अ�धकरण, कटक �यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI N.S.SAINI, AM & SHRI PAVAN KUMAR GADALE, JM आयकर अपील सं./ITA No.266, 162&217/CTK/2014 (�नधा�रण वष� / Assessment Year :2006-07&2005-06) Kalinga Institute of Industrial Vs. ACIT, Circle-2(2), Technology (KIIT), Plot No.383, Bhubaneswar, Odisha 384, KIIT Campus-1, Patia, Bhubaneswar-751024, Odisha �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAATK 3103 C (अपीलाथ� /Appellant) (��यथ� / Respondent) .. AND आयकर अपील सं./ITA No.108&294/CTK/2014 (�नधा�रण वष� / Assessment Year : 2004-05&2006-07) ACIT, Circle-2(2), Vs. Kalinga Institute of Industrial Bhubaneswar, Odisha Technology (KIIT), Plot No.383, 384, KIIT Campus-1, Patia, Bhubaneswar-751024, Odisha �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAATK 3103 C (अपीलाथ� /Appellant) (��यथ� / Respondent) .. AND Cross Objection No.27&42/CTK/2014 (�नधा�रण वष� / Assessment Year :2004-05 & 2006-07) Kalinga Institute of Industrial Vs. ACIT, Circle-2(2), Technology (KIIT), Plot No.383, Bhubaneswar, Odisha 384, KIIT Campus-1, Patia, Bhubaneswar-751024, Odisha �थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AAATK 3103 C (अपीलाथ� /Appellant) (��यथ� / Respondent) .. �नधा�रती क� ओर से /Assessee by : Shri S.K.Agrawalla, AR राज�व क� ओर से /Revenue by : Shri Kunal Singh,CITDR सुनवाई क� तार�ख / Date of Hearing : 29/08/2017 घोषणा क� तार�ख/Date of Pronouncement 31/08/2017 आदेश / O R D E R Per Shri Pavan Kumar Gadale, JM:
2 ITA No.266,294,108,162&217/CTK/2014 & CO No.42&27/CTK/2014 These are the cross appeals filed by the assessee and the revenue
and assessee has filed two cross objections against the order of CIT(A)-II,
Bhubaneswar, dated 25.04.2014, passed in I.T.Appeal No.0313/2011-12,
passed u/s.147 of the Income Tax Act, 1961.
Since the issue involved in all the appeals are connected and
common, hence, all the appeals are heard together and disposed off by
this consolidated order. We shall take up appeal i.e. ITA
No.266/CTK/2014 (A : 2006-07) and the facts narrated therein. The
assessee has raised the following grounds :-
Without prejudice to the right of submission of additional ground of cross objections at the time of hearing the respondent submits submitted as under:- 1. That the Ld. Assessing Officer is not correct in reopening of the assessment proceedings u/s 147 of the Act and the Ld. Commissioner of Income Tax (Appeals) is not correct in endorsing the action of the Ld. Assessing Officer on the following grounds; That, the provisions u/s 153A of the Act has the overriding a. effect on the provisions of section 147 of the Act and therefore the Ld. Assessing Officer has no jurisdiction to reassess the same income which was completed u/s 153A of the Act for the self same period.
b. That, the reopening of the assessment proceedings without having fresh materials on record is nothing but change of opinion and therefore the reopening of the assessment proceedings basing on the seized materials are illegal and liable to be quashed. That, the Ld. Assessing officer supplied the reason for c. reopening of the case on 14th November 2011 (i.e. after the 31st March 2011) which is not in accordance with the provisions of the Act and therefore the entire proceedings are illegal and liable to be quashed. d. That, the issuance of notice u/s 143(2) immediately on the very same day after filing of return of income is illegal and therefore the entire proceedings are liable to be quashed. That, without disposing off the objections raised to the e.
3 ITA No.266,294,108,162&217/CTK/2014 & CO No.42&27/CTK/2014 reopening of the case, the Ld. Assessing officer passed the assessment order u/s 147 which is illegal and liable to be quashed.
That, the Ld. Assessing Officer is not permitted to reopen the f. concluded proceedings u/s 254/251/153A(b) and therefore the entire reassessment proceedings are void ab-initio.
g. That, the reassessment proceedings are not sustainable in view of the fact that, the reason for reopening of the assessment does not survive after deletion of the addition for which the reopening was made and therefore no other additions can be made in view of the explanation 3 of the section 147 of the Act.
h. That, during the pendency of assessment proceedings the Ld. Assessing Officer is not permitted to reopen the case u/s 147 and issue notice u/s 148, therefore the reassessment proceedings are illegal and void ab-initio. 2. That, the Commissioner of Income Tax (Appeals) has committed an error law in endorsing the action of the Ld. Assessing Officer that, the issuance the notice u/s 142(1) on 13th December 2011 requisitioning certain documents, clarifications etc. before issuing of notice u/s 143(2) of the Act (i.e. notice u/s 143(2) was issued on 15th December 2011) and even before the expiry of the period of filing of return of income u/s 148. Thus the action of the Ld. Authorities below are not in accordance with the provisions of the law and the entire reassessment proceedings are void ab-initio and liable to be quashed. 3. That, the Ld. Commissioner of Income Tax (Appeals) has erred in law in dismissing the ground no.7 of the appellant, i.e. while passing the reassessment order u/s 147 the Ld. Assessing Officer reproduced the assessment order passed u/s 153B(b)/143(3) of the Act even without issuing of show cause in any of the points of addition, therefore the said action of the Ld. Assessing Officer is illegal and liable to be quashed.
That, the Ld. Commissioner of Income Tax (Appeals) has committed an error of law in confirming the additions of ? 15,00,000 as unexplained cash merely basing on the finding of her predecessor (i.e. previous CIT (A)) in view of the fact that, the same was explained during the course of assessment/ reassessment proceeding and also appellate proceedings, therefore the additions of ? 15,00,000 is liable to be deleted.
That the Ld. Authorities below failed to appreciate the basic principle of accounting and made additions of ? 6,53,640 as unexplained cash credit which is highly arbitrary, contrary to the evidence on record, bad in law and liable to be deleted.
4 ITA No.266,294,108,162&217/CTK/2014 & CO No.42&27/CTK/2014 6. That, forums bellow had committed an error of law in disallowing the expenditure of ? 24,15,644 & ? 73,21,600 incurred under the head D. Khatei (Const.) in view of the fact that, Sri Harekrushna Panigrahi had clearly admitted that, the transaction in question D. Khatei (Const.) had been duly accounted for in the books of accounts of the appellant in the statement recorded on 20.12.2010, therefore the additions of? 24,15,644 & ? 73,21,600 are liable to be deleted.
That, the appellant craves to alter, amend or add any other ground that may be considered necessary in the course of appeal proceeding.
Brief facts of the case are that the assessee is a charitable trust
registered vide certificate No.4268-191 dated 30.06.1992 under the
Society Registration Act, 1860 and carrying on educational activities and
professional studies. There was a search and seizure operation on the
assessee’s premises on 9.8.2005 and the assessment order was passed
u/s.153B(b)/143(3) of the Act on 31.12.2007 with total income of
Rs.17,76,69,520/- where the exemption u/s.11 was denied and the
assessment was annulled by the ITAT in IT(SS)A No.85/CTK/2009, dated
4.12.2009. Aggrieved by the order of ITAT, the revenue has preferred
appeal to the Hon’ble High Court and the assessment was reopened by
the AO by issuing notice u/s.148 of the Act dated 22.12.2010.
Before going into the merits of the case, ld. AR submitted that the
objection on the reasons for reopening of the case was not disposed off
by the Assessing Officer and hence the order of the AO is bad in law.
Accordingly, we consider it appropriate to deal legal ground of validity of
reassessment proceedings.
5 ITA No.266,294,108,162&217/CTK/2014 & CO No.42&27/CTK/2014 5. Ld. AR submitted that the reasons were provided by the AO to the
assessee vide letter dated 14.11.2011 on the representation of the
assessee dated 20.1.2011, and the assessee has filed objections on
21.11.2011 and explained in his submissions at para 8 of the letter
referred at page 117 of the paper book which reads as under :-
“8. That, without prejudice to the submission made herein above regarding the jurisdiction issue, the assessee further submits that the notice issued u/s.148 of the Act is contract to the provisions of section 147 of the Act as there was no fresh materials available on record and all the seized materials have been considered in the assessment proceedings u/s.153A. Therefore, your honour had not applied your judicious mind before recording of the reasons for reopening of the case for reassessment. Hence, the issuance of notice is not sustainable in law.”
Ld.DR of the revenue has opposed that the order dated 30.11.2011
was passed considering the objections of the assessee to the reasons for
reopening of the assessment for the assessment year 2006-07 referred at
page 112 of the paper book, where the revenue has treated the notice
u/s.148 of the Act is valid and requested the assessee to comply the
conditions. Further, the assessee filed submissions on 7.12.2011 referred
to the order passed by ACIT, Cirlce-2(1) BBSR/11-12, dtd,30.11.2011 in
the A.Y.2006-07, wherein it was emphasised at para 8 which is as under
:-
That, in your letter your honour had not considered the submission made by the assessee in para no.8 of it’s objection dated 21st November 2011 which is also a vital issue in deciding the jurisdiction on you.
Ld. AR filed letter dated 20.1.2011 in compliance to notice u/s.148
of the Act dated 22.12.2010 to treat the revised return filed on 5.3.2007 as
a due compliance of return filed in response to notice u/s.148 of the Act
6 ITA No.266,294,108,162&217/CTK/2014 & CO No.42&27/CTK/2014 and placed a copy of letter endorsed by the department. Further, ld.AR’s
contention that though reasons were provided to the assessee and objections were filed but the objections of the assessee in respect of para
8 in the objections on the same set of facts was not considered and there is no finding or judicial applicability as no fresh material were available on
record and the seized material were already considered in the assessment proceedings u/s.153A whereas ld. DR has vehemently
objected to the submissions.
We are of the considered view that there is strength in the
arguments of ld. AR and duly supported with evidence and submissions
and relying on the provisions of law. Prima facie the objections raised by
the assessee as referred above at para 8 in letter dtd.21.11.2011 was not
disposed off by the AO though the revenue has passed an order on the validity of reassessment proceedings u/s.148 of the Act in letter
dtd.30.11.2011. Accordingly, we are of the view that reassessment
proceedings has to be complied in full and the objections of the assessee
on same set of facts and the material was already available has to
dispose off with findings and speaking order. Accordingly, without going
into merits of the case, we remit the disputed issue to the file of AO to
consider the submissions on reassessment and pass the order
accordingly and also shall provide adequate opportunity of hearing to the
assessee and the assessee shall also cooperate in submitting the
information at the earliest. Accordingly, the assessee’s appeal is restored to the file of AO.
7 ITA No.266,294,108,162&217/CTK/2014 & CO No.42&27/CTK/2014 9. Similar issue has been raised in assessee’s appeal i.e. ITA No.162&2017/CTK/2014 and the appeals filed by the revenue in ITA Nos.217, 108 & 294/CTK/2014 (AY:2005-06, 2004-05 & 2006-07). Since, we have restored the disputed issue to the file of AO for considering the objection not disposed off in reassessment proceedings after providing adequate opportunity of hearing to the assessee while considering the appeal of the assessee in ITA No.266/CTK/2014 (AY 2006-07), therefore, the issue raised in the above appeals are restored to the file of AO as per our earlier observations. 10. The assessee has filed cross objections in CO No.42&27/CTK/2014 for the assessment year 2006-07 & 2004-05. Since we have remitted the appeals filed by the assessee as well as appeal of the revenue on the disputed issue, therefore, the cross objection filed by the assessee have become infructuous and they are dismissed. 11. In the result, appeals of the assessee i.e. ITA No.162&217/CTK/2014 and the appeals filed by the revenue in ITA Nos. 108 & 294/CTK/2014 ( 2004-05 & 2006-07) are allowed for statistical purposes, whereas the cross objection of the assessee i.e. CO No.27&42/CTK/2014 are dismissed. Order pronounced in the open court on this 31/08/2017. Sd/- Sd/- (N. S. SAINI) (PAVAN KUMAR GADALE) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य / JUDICIAL MEMBER कटक Cuttack; �दनांक Dated 31/08/2017 �.कु.�म/PKM, Senior Private Secretary आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant- 1. ��यथ� / The Respondent- 2.
8 ITA No.266,294,108,162&217/CTK/2014 & CO No.42&27/CTK/2014 आयकर आयु�त(अपील) / The CIT(A), 3. आयकर आयु�त / CIT 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, कटक / DR, ITAT, Cuttack 5. गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy//
(Senior Private Secretary) आयकर अपील�य अ�धकरण, कटक / ITAT, Cuttack