VIACOM 18 MEDIA P.LTD, MUMBAI V. ACIT 11(1), MUMBAI

CO 160/MUM/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7684 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 20-09-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 07-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A P SINGH
• Keywords: Reopening of assessment; Opportunity of being heard; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

ITA NO.6153 OF 2010 & CO 160 OF 2011 VIACOM, MUMBAI PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 6153/MUM/2010 (ASSESSMENT YEAR: 2000-01) ACIT 11(1), ROOM NO. 439, AAYAKAR BHAVAN, MK MARG, MUMBAI 400020 VS. VIACOM 18 MEDIA PVT. LTD., 36B, DR. R.K. SHORODKAR MARG, PAREL (E), MUMBAI 400012 PAN: AAACM 9164 E (APPELLANT) (RESPONDENT) C.O. NO.160/MUM/2011 (ARISING OUT ITA NO. 6153/MUM/2010) (ASSESSMENT YEAR: 2000-01) VIACOM 18 MEDIA PVT. LTD., 36B, DR. R.K. SHORODKAR MARG, PAREL (E), MUMBAI 400012 PAN: AAACM 9164 E VS. ACIT 11(1), ROOM NO. 439, AAYAKAR BHAVAN, MK MARG, MUMBAI 400020 (CROSS OBJECTOR) (RESPONDENT) ASSESSEE BY: SHRI FARROKH V. IRANI DEPARTMENT BY: SHRI A.P. SINGH, CIT DR DATE OF HEARING: 22/08/2012 DATE OF PRONOUNCEMENT: 26/09/2012 O R D E R PER B. RAMAKOTAIAH, A.M. THE APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDERS OF THE CIT (A)-3 MUMBAI, DATED 31/05/2010. THE ISSUE I N THE PRESENT APPEAL IS WITH REFERENCE TO THE JURISDICTION UNDER SECTION 147 TO REOPEN THE ASSESSMENT ORIGINALLY PASSED UNDER SECTI ON 143(3). THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES IN THE CASE AND IN LAW, THE LEARNED CIT (A) FAILED TO APPRECIATE THE F ACT THAT ASSESSEE HAD BEEN GIVEN ADEQUATE OPPORTUNITIES TO PRESENT ITS CASE BY AO BEFORE COMPLETION OF THE ITA NO.6153 OF 2010 & CO 160 OF 2011 VIACOM, MUMBAI PAGE 2 OF 5 ASSESSMENT AND THUS THE GRIEVANCE OF DENIAL OF NATU RAL JUSTICE DOES NOT ARISE. 2. ON THE FACTS AND CIRCUMSTANCES IN THE CASE AND IN LAW, THE LEARNED CIT (A) ERRED IN QUASHING THE ASSESSMENT ORDER PASSED BY AO UNDER SECTION 143(3) R.W.S. 147 OF THE I.T. ACT WITHOUT CONSIDERING THE MERITS OF THE CASE THAT ASSESSEE HAS NOT DISCLOSED THE MET HOD OF ACTUAL ALLOCATION OF INDIRECT EXPENSES LIKE ADVERTISEMENT, PROFESSIONAL, MISCELLANOUES, TRAVEL ETC. 3. ON THE FACTS AND CIRCUMSTANCES IN THE CASE AND I N LAW, WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CI T (A) FAILED TO RESTORE THE MATTER TO THE FILE OF AO FOR CONSIDERATION OF ASSESSEES OBJECTION. 2. ASSESSEE RAISED CROSS OBJECTION ON THE REASON THAT THE CIT (A) SHOULD HAVE DECIDED THE ISSUE ON MERITS IN ITS GROU NDS FROM 1 TO 6. SUBSEQUENTLY, VIDE LETTER DATED 8.12.2011, ASSESSEE RAISED ADDITIONAL GROUND ON THE ISSUE OF JURISDICTION, AS UNDER: 7. ON THE FACTS AND CIRCUMSTANCES IN THE CASE AND IN LAW, THE LEARNED CIT (A) OUGHT TO HAVE HELD THAT RE AST PROCEEDINGS ARE BAD IN LAW AND THE ORDER PASSED BY THE LEARNED AO UNDER SECTION 143(3) R.W.S. 147 OF THE A CT IS UNWARRANTED, WITHOUT JURISDICTION, BAD IN LAW, ABRR ED BY LIMITATION, VOID AB-INITIO AND HENCE OUGHT TO BE QU ASHED IN LIGHT OF THE PROVISIONS OF THE INCOME-TAX ACT, 1 961. 3. BRIEFLY STATED, ASSESSEE FILED RETURN OF INCOME ON 29.11.2000 IN THE NAME OF MTV INDIA PVT. LTD (ITS FORMER NAME) DECLARING LOSS OF ` .24,97,450/-. IT WAS PROCESSED UNDER SECTION 143(1) ON 28.03.2002. ASSESSMENT UNDER SECTION 143(3) WAS COM PLETED ON 19.3.2003. THEREAFTER FOR THE REASONS RECORDED AND EXTRACTED IN THE ASSESSMENT ORDER VIDE PARA-2, A NOTICE UNDER SECTIO N 148 WAS ISSUED ON THE REASON THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. AFTER PROVIDING COPIES OF THE REASON TO ASSESSEE, AO COMPLETED THE ASSESSMENT VIDE ORDER DATED 29.11.200 7. ASSESSEE AGGRIEVED BY THE SAID ORDER CHALLENGED THE JURISDIC TION OF AO TO REOPEN THE ASSESSMENT AFTER THE END OF FOUR YEARS C OMPLETED UNDER SECTION 143(3), APART FROM MERITS. THE LEARNED CIT (A) CONSIDERING ITA NO.6153 OF 2010 & CO 160 OF 2011 VIACOM, MUMBAI PAGE 3 OF 5 THE GROUND NO.1 ON THE JURISDICTION NOTICED THAT AO DID NOT CONSIDER THE OBJECTIONS RAISED BY ASSESSEE SEPARATELY AND AS THERE IS NO SPEAKING ORDER DEALING WITH THE OBJECTIONS RAISED B Y ASSESSEE AGAINST THE REASONS FOR REOPENING, SHE CONSIDERED T HAT THE ASSESSMENT ORDER PASSED HAS INHERENT DEFECT AND IS IN VIOLATION OF THE PRINCIPLES LAID DOWN BY HON'BLE SUPREME COURT I N THE CASE IN GKN DRIVESHAFT (INDIA) LTD VS. INCOME TAX OFFICER & OTHERS, 259 ITR 19 (SC). THEREFORE, SHE QUASHED THE ORDER UNDER SEC TION 143(3) R.W.S. 147. 4. THE LEARNED CIT (DR) REFERRING TO THE GROUND NO.1 R AISED BEFORE THE CIT (A) SUBMITTED THAT THE CIT (A) DID N OT CONSIDER THE ISSUE IN PROPER PERSPECTIVE AND IN CASE AO DID NOT DEAL WITH THE OBJECTIONS RAISED WITH REFERENCE TO THE REOPENING O F THE ASSESSMENT, SHE SHOULD HAVE GIVEN OPPORTUNITY TO AO TO PASS THE ORDER IN THE REMAND PROCEEDINGS AND SHE COULD NOT HAVE QUASHED T HE ASSESSMENT ORDER AS SUCH, WITHOUT DEALING IT ON MER ITS. HE RELIED ON THE DECISION OF THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE OF IOT INFRASTRUCTURE & ENERGY SERVICES LTD VS. ACIT, 233 CTR 175 (BOM.) DATED 2.3.2010 TO SUBMIT THAT THE MATTER COULD HAVE BEEN REMITTED TO AO TO PASS FRESH ORDER ON THE OBJECTIONS RAISED BY ASSESSEE. 5. THE LEARNED COUNSEL HOWEVER, SUBMITTED THAT ASSESSE E HAS STRONG CASE ON THE REASON THAT THE ASSESSMENT WAS R EOPENED AFTER THE END OF FOUR YEARS AND THE PROVISO TO SECTION 14 7 WOULD APPLY. HE SUBMITTED THAT THE ISSUE CAN BE DECIDED BY THE ITAT ON ITS MERITS. 6. WE HAVE CONSIDERED THE ISSUE AND PERUSED THE ARGUME NTS OF THE RIVAL PARTIES. THE LEARNED CIT (A) HAS QUASHED THE ORDER ON THE REASON THAT AO DID NOT DEAL WITH THE OBJECTIONS FIL ED BY ASSESSEE FOR REOPENING OF THE ASSESSMENT IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE GKN DRIVESHAFT (INDIA) LT D VS. INCOME TAX OFFICER & OTHERS, 259 ITR 19 (SC). HOWEVER, ON SIMILAR FACTS THE HON'BLE BOMBAY HIGH COURT IN WRIT PETITION NO.60 OF 2010 IN THE ITA NO.6153 OF 2010 & CO 160 OF 2011 VIACOM, MUMBAI PAGE 4 OF 5 CASE OF IOT INFRASTRUCTURE & ENERGY SERVICES LTD VS . ACIT, 233 CTR 175 (BOM.) DATED 2.3.2010 HELD AS UNDER: WHERE AO DID NOT DEAL WITH THE OBJECTIONS FILED BY ASSESSEE TO REOPENING OF ASSESSMENT, IN VIEW OF THE DECISION OF SUPREME COURT IN GKN DRIVESHAFTS (INDIA ) LTD V. ITO (2003), 179 CTR (SC)11/2003/259 ITR 19, MATT ER WAS TO BE REMITTED TO AO TO PASS FRESH ORDER ON OBJ ECTIONS RAISED BY ASSESSEE TO THE PROPOSED REASSESSMENT A FTER FURNISHING AN OPPORTUNITY OF BEING HEARD TO ASSESSE E AND TO SERVE A COPY OF THE SAID ORDER UPON ASSESSEE . RESPECTFULLY FOLLOWING THE ABOVE, WE ARE OF THE OPI NION THAT IN THE CIRCUMSTANCES THE ORDER OF THE CIT(A) HAS TO BE SET ASIDE ALONG WITH THE ORDER OF AO PASSED UNDER SECTION 143(3) R.W.S. 147 AND RESTORE THE ISSUE OF ASSESSMENT TO THE FILE OF AO WITH A SP ECIFIC DIRECTION FOR DISPOSING OF THE OBJECTIONS BY PASSING A FRESH ORDE R BEFORE PROCEEDING WITH THE RE-ASSESSMENT OF TOTAL INCOME. ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY OF BEING HEARD. ASSESSEE IS FREE TO RAISE FRESH OBJECTIONS BOTH ON FACTS AS WELL AS ON PRINCI PLES OF LAW BEFORE AO IN ADDITION TO THE OBJECTIONS ALREADY RAISED BEF ORE HIM. AFTER DEALING WITH THE SAID OBJECTIONS BY WAY OF A SPEAKI NG ORDER AND SERVING THE COPY OF THE ORDER TO ASSESSEE, AO CAN P ROCEED WITH THE REASSESSMENT PROCEEDINGS, IF REQUIRED. WITH THESE D IRECTIONS, THE APPEAL OF THE REVENUE IS CONSIDERED ALLOWED FOR STA TISTICAL PURPOSES. 7. WITH REFERENCE TO THE CROSS OBJECTION RAISED BY ASS ESSEE SINCE THE CIT (A) HAS NOT DEALT WITH MERITS OF THE ADDITI ONS MADE BY AO IN THE ORDER, THERE IS NO NEED TO CONSIDER THE SAME AS IT DOES NOT ARISE OUT OF THE ORDER OF THE CIT (A). HOWEVER, THE ADDIT IONAL GROUND RAISED IN THE CROSS OBJECTION WITH REFERENCE TO THE JURISDICTION CAN BE ADMITTED, BEING A LEGAL ISSUE. SINCE THE ISSUE O N JURISDICTION OF SECTION 147 ITSELF WAS RESTORED TO THE FILE OF AO I N THE REVENUE APPEAL, THIS ADDITIONAL GROUND IS ALSO TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ITA NO.6153 OF 2010 & CO 160 OF 2011 VIACOM, MUMBAI PAGE 5 OF 5 8. IN THE RESULT, REVENUE APPEAL IS CONSIDERED ALLOWE D AND ASSESSEES CROSS OBJECTION IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH SEPTEMBER, 2012. SD/- SD/- (I.P. BANSAL) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 26 TH SEPTEMBER, 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI