9911796707
TMI Blog2014 (9) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... ice u/s 143(2) of the I.T. Act was not served in this case on the assessee. 3. The CIT(A) has erred in law and facts in not following the ratio of decision of Madras High Court in the case of V. Raju vs. CIT 147 ITR 212 (Mad.) 4. That is doing so Ld. CIT(A)-I Kanpur has ignored the provisions of section 124(3) (a) of the I.T, Act, 1961 which debars the assesses from calling in question the jurisdiction of the A.O. after the expiry of time allowed by the notice u/s 142(1) of the I.T. Act. 5. That the order of Ld. Commissioner of Income Tax (A) - 1, Kanpur being erroneous in law and on the facts deserves to be vacated and that the order of Assessing Officer is restored." 3. Learned D.R. of the Revenue supported the assessment order whereas Learned A.R. of the assessee supported the order of CIT(A). He also submitted that the written submissions available in the paper book on page 1 to 14 should also be considered. 4. We have considered the rival submissions and we find that this issue has been decided by CIT(A) as per Para 5 of his order, which is reproduced below for the sake of ready reference: "5. On perusal of the case records, it is seen that there is a notice u/s 143(2) d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary to the facts, law and principles of natural justice." 7. It is submitted by Learned A.R. of the assessee that written submissions are available on page Nos. 1 to 6 of the paper book, which should be considered to decide the appeal of the assessee. 8. As against this, Learned D.R. of the Revenue supported the order of learned CIT(A). 9. We have considered the rival submissions. Written submissions of Learned A.R. of the assessee on page Nos. 1 to 6 are reproduced herein below: "In filing the aforesaid appeal (by the assessee/appellant), there is a delay of nearly 60 days. Petition for condonation of delay has been filed along with memo of appeal itself. In Para 7 of the said petition there is a typographical error in as much as the date has been mentioned inadvertently as 20.11.2011 which should be 20.10.2011. With the permission of your honours the assessee/appellant begs to make necessary correction and submits that the date of 20.11.2011 may kindly be read as 20.10.2011. 2. In the aforesaid petition for condonation of delay, it has been submitted that the assessee being not well versed with the complete tax laws, was solely dependent upon his lawyer who had conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case may be) before issuing such notice. This is direction u/s 150 of the I.T. Act". 7. At the very outset it is submitted that section 150 of the Act, under which directions have been given which reads as under:- "150. (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law. 2) The provisions of sub- section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub- section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject- matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken." does not give any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As the arrangements had duly fructified, the same is reflected also in the Balance Sheet of M/s. Prachi Leathers (P) Ltd. as on 31.03.2004. In other words, the sums received by the appellant were not in the nature of loans and advances simplicitor as envisaged in section 2(22) (e) of the Act but the same were in the nature of consideration (for purchase of shares under 'by back arrangements') paid in advance by M/s Prachi Leathers (P) Ltd. This is evident from this fact alone that after necessary formalities had been complied with, the consideration received from M/s Prachi Leathers (P) Ltd., from time to time got adjusted. Such advances do not fall within the purview of section 2(22)(e) of the Act. In support of this contention, the appellant begs to refer to the decision of a Hon'ble Lucknow Bench of ITAT, in ITA No.76/LUC/2002 in the case of Vikram Kothari vs. DCIT, (relevant observations in paras 32 & 33 thereof) which are reproduced here under:- "32. Further we have noted that the learned Counsel has vehemently argued that the Id. CIT(A) went wholly wrong in holding that the debits (aggregating Rs. 10,50,040/-) were in nature of "loans and advances". In support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c credit of the same figure on 7.4.1988. As stated earlier, the credit was allowed in the account of the assessee for the FDR (belonging to the assessee) as got encashed from the Bank on 7.4.1988. Subsequently, the said credit was squared up by issuing a cheque for the corresponding figure on 17.4.1988, to enable the assessee to take a renewed FOR, in lieu of earlier FDR. The said debit is not refundable/repayable to the KPL. Rather KPL itself owed a "debt" to the assessee to this extent (by virtue of collection of FDR belonging to the assessee) and by making payment to the assessee on 17.4.1988. KPL had simply discharged its "debts" due to the assessee. Similarly, there are debits against remuneration and dividend as also against various other credits. None of the said sums can be said to be the sums in relation to which the KPL had become the creditor of the assessee. KPL had maintained a current account of the assessee in its books of account to keep a record of various sums falling due to the assessee. Payments against the same sums, even if the credit entries were passed at a later date would not be in the nature of "Loans and Advances". In any case, in keeping with the legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any direction. In our considered opinion, there is no force in this contention of the assessee because the directions are given by CIT(A) and thereafter, it is stated by him that this direction is u/s 150 of the Act. Section 150 of the Act is regarding the lifting the scope of limitation and the same was referred to by CIT(A) to make it clear that the Assessing Officer is getting extended time for reopening and merely reference to section 150 in the order of CIT(A) does not affect the validity of the direction of CIT(A) in his order. 10. In addition to above contention regarding reference to section 150 by CIT(A) in his order, Learned A.R. of the assessee has placed reliance on four judicial pronouncements as can be seen in his written submissions, reproduced above. 10.1 The first judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Apex Court rendered in the case of Rajinder Nath (supra). This judgment is not applicable in the present case because the facts are different. In this case, it was held by Hon'ble Apex Court that reassessment of individual partners cannot be said to be in consequence of or to give effect to the finding of AAC in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is an escaped income. In this regard, we are of the considered opinion that for invoking the provisions of section 147, it is sufficient that the Assessing Officer has reason to believe that the income chargeable to tax has escaped assessment and at this stage, no conclusive finding is required. Since the Assessing Officer has made addition in the assessment completed by him u/s 143(3) of the Act, this is an admitted position that the Assessing Officer is of the view that this income is taxable in the hands of the assessee in the present year and therefore, it cannot be said that the Assessing Officer has no reason to believe that the income chargeable to tax has escaped assessment once it is held that the assessment u/s 143(3) is not valid because notice u/s 143(2) of the Act was not issued and served in time. No further finding was required to be given by CIT(A) and whether this income is actually taxable or not will be determined in the assessment to be completed by the Assessing Officer u/s 147 and this question is premature at this stage. 12. As per the above discussion, we find that none of the arguments of Learned A.R. of the assessee in the written submissions is renderin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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