M/S. PLASTOGRAPH INDIA PVT. LTD.,NEW DELHI vs. DCIT, NEW DELHI

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ITA 3052/DEL/2012Status: DisposedITAT Delhi09 February 2016AY 2003-047 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessment for the assessment year 2003-04 was invalid as it fell outside the six assessment years preceding the search, as stipulated by Section 153A(1)(b). Consequently, the assessee's appeal was allowed on this legal ground.

What were the facts?

The assessee's appeal pertains to disallowance of donation and bonus, while the revenue's appeal challenges the assessment order. The core issue revolves around the validity of assessment proceedings initiated under Section 153A for the assessment year 2003-04, following a search conducted on July 31, 2008.

What were the issues?

The primary legal issue was whether an assessment order passed under Section 153A for an assessment year preceding the six-year period prior to a search is valid.

Which sections of the Income-tax Act were involved?

Section 153A,Section 132

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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI

Hearing: 02.02.2016Pronounced: 09.02.2016

Heard together (2 matters)

ITA No. 3052/Del/2012
ITA No. 3557/Del/2012

Read from the judgment's own cause title. This page is filed under one of them.

ORDER Per N. K. Saini, AM: These cross appeals are directed against the order dated 30.04.2012 of ld. CIT(A)-XXXI, New Delhi.

2.

First we will deal with the assessee’s appeal in . Following grounds have been raised in this appeal:

1.

1. The learned CIT(A) erred in law and on facts in confirming the disallowance of donation of Rs. 53,000/- without considering the documentary evidences placed on record. Thus the addition must be deleted.

2 & 3052/Del/2012 Plastograph India Pvt. Ltd.

2. The learned CIT(A) erred in law and on facts in confirming the disallowance of bonus of Rs. 69,745/- paid after filing the return but before the due date of return of income for the relevant period. Thus the addition must be deleted.

3.

Thus, without prejudice to the ground taken above, if the bonus paid Rs. 69,745/- is not allowed during the relevant year then must be allowed in the next assessment year.

4.

The appellant craves the leave to add, substitute, modify, delete or amend all or any ground of appeal

either before or at the time of hearing.”

3. The assessee has also raised the additional grounds which read as under:

“The additions in the impugned assessment order passed u/s 153A are bad in law and on facts because a) The additions were not based on any books of account or other material not produced in the course of original assessment but which could alleged to have been found in the course of search or an undisclosed income or property discovered therein. b) As the assessment proceedings were not abated but were already completed. Thus all the additions so made in the assessment order should be deleted following the Special Bench decision dated 6/7/12 in the case of All cargo

3 & 3052/Del/2012 Plastograph India Pvt. Ltd. Global Logistics Ltd. in appeals no. ITA/5018- 5022/M/10. The enclosed ground of appeal may be admitted as second additional ground in the above said appeal as it is purely a legal ground arising out of the core issue as per the assessment order. Such grounds are admitted as additional grounds as has been held in the case of Asstt. Commissioner of Income-tax Vs Bhagwati Printers (P) Ltd. (2006) 102 TTJ (Del) 480 by holding that this is a legal issue not involving any fresh investigation into facts except those already on record. In this case, all such facts are undisputed and on record and the assessee has raised a legal ground before CIT(A).”

4. The ld. Counsel for the assessee requested for admission of the additional ground by stating that these grounds are purely legal ground and does not require any verification, since the facts are already available on record. The reliance was placed on the following case laws:

� National Thermal Power Co. Ltd. Vs CIT (1998) 229 ITR 383 (SC) � DCIT Vs Turquoise Investment & Finance Ltd. (2006) 154 Taxman 80 (MP) � Kanoi Industries (P.) Ltd. Vs DCIT (2006) 100 ITD 462 (Kol.) � West Bengal State Electricity Board Vs Dy. CIT (2005) 278 ITR 218 (Cal) � Uma Polymers (P) Ltd. Vs DCIT (2006) 101 TTJ (JD) TM 124

4 & 3052/Del/2012 Plastograph India Pvt. Ltd. � Datamatics Ltd.Vs Asstt. CIT (2007) 111 TTJ (Mum-Trib.) 55 � Abhishek Industries Ltd. Vs CIT (2007) 290 ITR 655 (P&H) � Gedore Tools Pvt. Ltd. Vs CIT (1999) 238 ITR 268 (Del) � Director of Income-tax (Exemption) Vs Arunodya (2006) 286 ITR 383 (Del) � Satish Kumar Keshari Vs ITO (2007) 106 TTJ 980 (ITAT-Pat.) � ITO Vs Gurinder Kaur (2006) 102 ITD 189 (ITAT- Del) � CIT Vs J.K. Cotton Spinning & Weaving Mills Co. Ltd. (2005) 197 CTR 73 (All.) � Dy. CIT Vs Maruti Udyog Ltd. (2006) 99 ITD 666 (Del-Trib) � CIT Vs Ashok Leyland Ltd. (2001) 250 ITR 452 (Mad.) � Orissa Cement Ltd. Vs CIT (2001) 117 Taxman 625/250 ITR 856 (Del) � Eicher Motors Ltd. Vs Dy. CIT (2004) 82 TTJ (Ind.) 61 5. The ld. DR objected for admission of the additional grounds.

6.

After considering the submissions of both the parties and the material on record, we are of the view that the assessee has raised purely legal grounds, which do not require any fresh investigation, so these are admitted by keeping in view the ratio laid down by the Hon’ble Supreme

Under section 254 of the Income-tax Act, 1961 the Appellate Tribunal may, after giving both the parties to the appeal and opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non- taxable item is taxed or permissible deduction is denied, there is no reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of the item. Undoubtedly, the Tribunal has the discretion to allow or not to allow a new ground to be raised. But where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee.

7.

At the first instant, the ld. Counsel for the assessee argued the additional grounds and submitted that as per the provisions contained u/s 153A(1)(b) of the Income Tax Act,

6 & 3052/Del/2012 Plastograph India Pvt. Ltd. 1961 (hereinafter referred to as the Act), the assessment is required to be framed for the six assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted or requisition was made. It was further submitted that the search in this case took place on 31.07.2008, therefore, the assessments were required to be framed for the six assessment years starting with assessment year 2004-05. However, the present assessment year is 2003-04 which is outside the purview of the provisions contained in the aforesaid referred to section.

8.

In his rival submissions the ld. DR although supported the order of the AO but could not controvert the aforesaid contention of the ld. Counsel for the assessee.

9.

We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the search u/s 132 of the Act took place on 31.07.2008 and as per provisions contained in Section 153A(1)(b) of the Act, the assessment was to be framed for the six assessment years i.e. the assessment year 2004-05 to assessment year 2009-10. However, the AO framed the assessment for the 7 & 3052/Del/2012 Plastograph India Pvt. Ltd. assessment year 2003-04 also which was outside, the purview of the provisions contained in the aforesaid referred to Section 153A(1)(b) of the Act. Therefore, the assessment order passed for the assessment year 2003-04 is held invalid.

10.

Since we have held the assessment itself as invalid, therefore, we do not see any merit in the appeal of the department. Moreover, the tax effect involved in the departmental appeal is less than Rs.10,00,000/-, therefore, the department ought not to have filed the appeal as per the Circular No. 21 of 2015 dated 10.12.2015 issued by the CBDT. Accordingly, the appeal of the department is dismissed.

11.

In the result, the appeal of the assessee is allowed on the legal issue and the appeal of the department is dismissed. (Order Pronounced in the Court on 09/02/2016)

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