M/s.SunTech Business solutions P Ltd, Trivandrum V. The JTCIT, Trivandrum

CO 25/COCH/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4893 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 2 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-10-2018
• Assessment Year: 2006-2007
• Appeal Filed On: 22-08-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUDANSHU SHEKHAR JHA
• Assessee Lawyers: SAMPATH RAGHUNATHAN
• Keywords: Depreciation; Reassessment proceedings
• Section: 143(3); 14A; 10B; 147; 148; 144; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJAR I, AM & SHRI GEORGE GEORGE K, JM ITA NO. 278 /COCH/201 6 : ASST.YEAR 2006 - 2007 THE JT.COMMISSIONER OF INCOME - TAX, SPECIAL RANGE TRIVANDRUM. VS. M/S.SUNTECH BUSINESS SOLUTIONS PVT. LTD. NILA, TECHNOPARK TRIVANDRUM 695 581. PAN : AAICS8020K. (APPELLANT) (RESPONDENT) CO NO. 25 /COCH/201 6 : ASST.YEAR 2006 - 2007 M/S.SUNTECH BUSINESS SOLUTIONS PVT. LTD. NILA, TECHNOPARK TRIVANDRUM 695 581. VS. THE JT.COMMISSIONER OF INCOME - TAX, SPECIAL RANGE TRIVANDRUM. ( CROSS OBJECTOR ) (RESPONDENT) REVENUE BY : SRI. SUDANSHU SHEKHAR JHA, CIT - DR ASSESSEE BY : SRI. SAMPATH RAGHUNATHAN DATE OF HEARING : 23 .10.2018 DATE OF PRONOUNCEMENT : 26 .10.2018 O R D E R PER GEORGE GEORGE K., JM THIS APPEAL AT THE INSTANCE OF THE REVENUE AND THE CROSS OBJECTION PREFERRED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMISSIONER OF INCOME - TAX (APPEALS)S ORDER DATED 15.04.2016 . THE RELEVANT ASSESSMENT YEAR IS 2006 - 2007 . 2. FIRST, WE SHALL TAKE UP FOR ADJUDICATION THE REVENUES APPEAL. ITA NO. 278 & CO 25 / COCH /201 6 . M/S.SUNTECH BUSINESS SOLUTIONS PVT.LTD . 2 ITA NO.278/COCH/2016 : REVENUES APPEAL : 3. IN THIS APPEAL, THE REVENUE HAS RAISED THE SOLITARY ISSUE WHETHER THE CIT(A) IS JUSTIFIED IN QUASHING THE REASSESSMENT ORDER DATED 01.0 3.2013 ? 4. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS: - THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF DEVELOPMENT AND SALE OF SOFTWARE. FOR THE ASSESSMENT YEAR CONCERNED, I.E. ASST.YEAR 2006 - 2007, THE RETURN OF INCOME WAS FILED ON 29.11.2006 DECL ARING INCOME OF RS.1,71,74,521 QUOTING PERMANENT ACCOUNT NUMBER (PAN) AAJFS9814M ALLOTTED BY THE DEPARTMENT. THE SAME PAN WAS QUOTED IN THE RETURNS FILED FOR THE EARLIER ASSESSMENT YEARS. SUBSEQUENTLY, THE DEPARTMENT VIDE LETTER DATED 03.04.2007 INTIMATED THE ASSESSEE THAT ITS PAN GOT CHANGED TO AAICS8020K . THEREAFTER ALL THE RETURNS INCLUDING THE RETURN FILED FOR ASSESSMENT YEAR 2007 - 2008 WERE FILED MENTIONING THE NEW PAN ALLOTTED. FOR THE CONCERNED ASSESSMENT YEAR 2006 - 2007, THE CASE WAS SELECTED FOR SCRU TINY BY ISSUANCE OF NOTICE U/S 143(2) OF THE I.T.ACT (NOTICE DATED 30.07.2007), WHEREIN THE OLD PAN WAS QUOTED. IN RESPONSE TO THE NOTICE ISSUED U/S 143(2) OF THE I.T.ACT, THE DETAILS / INFORMATION SOUGHT BY THE ASSESSING OFFICER WAS FURNISHED. HOWEVER, NO ORDER U/S 143(3) OF THE I.T.ACT WAS PASSED AND THE ASSESSMENT WAS TIME BARRED. 4.1 THEREAFTER THE ASSESSING OFFICER ISSUED NOTICE U/S 148 OF THE I.T.ACT DATED 26.03.2012. IN RESPONSE TO THE NOTICE ISSUED U/S 148, THE ASSESSEE FILED A LETTER STATING THAT ITS RETURN OF ITA NO. 278 & CO 25 / COCH /201 6 . M/S.SUNTECH BUSINESS SOLUTIONS PVT.LTD . 3 INCOME FILED ON 29.11.2006 MAY BE TAKEN AS A RETURN FILED PURSUANT TO NOTICE ISSUED U/S 148 OF THE I.T.ACT. THE ASSESSEE HAD ALSO SOUGHT FOR THE REASONS FOR REOPENING THE ASSESSMENT. IN RESPONSE TO THE ASSESSEES LETTER, THE A.O. FURNISHED THE REASONS FOR REASSESSMENT VIDE LETTER DATED 01.05.2012. THE REASONS STATED FOR REOPENING THE ASSESSMENT WAS THAT NO RETURN WAS FURNISHED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2006 - 2007. THE ASSESSEE - COMPANY FILED OBJECTIONS TO THE PROPOSED REASSESSMENT, VIDE ITS LETTER DATED 29.05.2012. IN T HE SAID LETTER, IT WAS STATED THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2006 - 2007 ON 29.11.2000 QUOTING THE PAN AAJFS9814M. IT WAS STATED THAT PAN AAJFS9814M WAS THE PAN ALLOTTED BY THE DEPARTMENT AND THE DEPARTMENT CHANGED THE P AN OF THE ASSESSEE SUBSEQUENT TO THE FILING OF THE RETURN OF INCOME FOR ASSESSMENT YEAR 2006 - 2007. A COPY OF THE RETURN OF INCOME FILED AND ACKNOWLEDGEMENT OF THE SAME WAS ALSO ANNEXED TO THE ASSESSEES LETTER DATED 29.01.2012. THEREFORE, IT WAS REQUESTED THAT THE REASSESSMENT PROCEEDINGS, WHICH WAS INITIATED FOR THE REASON THAT NO RETURN OF INCOME WAS FILED, BE DROPPED AS THE ASSESSEE - COMPANY HAD DULY FILED ITS RETURN OF INCOME. THE ASSESSING OFFICER, HOWEVER PASSED AN EX PARTE ORDER U/S 144 R.W.S. 147 OF THE I.T.ACT. THE ASSESSING OFFICER IN THE SAID ASSESSMENT ORDER HAD MADE VARIOUS ADDITIONS / DISALLOWANCES, WHICH ARE DETAILED BELOW: - ITA NO. 278 & CO 25 / COCH /201 6 . M/S.SUNTECH BUSINESS SOLUTIONS PVT.LTD . 4 DISALLOWANCE OF DEDUCTION CLAIMED U/S 10B OF THE ACT. RS.19,30,42,111 DISALLOWANCE OF DEPRECIATION ON ACCOUNT OF STATE INVESTMENT SUBSIDY RS. 2,00,550 WRONGFUL INCLUSION OF MISCELLANEOUS INCOME UNDER INCOME FROM OTHER SOURCES RS. 2,69,745 DISALLOWANCE UNDER SECTION 14A OF THE ACT. RS. 49,381 5. AGGRIEVED BY THE ASSESSMENT COMPLETED U/S 144 R.W.S. 147 OF THE I.T.ACT, THE ASSESSEE PREFERRED AN APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) VIDE HIS ORDER DATED 15.04.2016 QUASHED THE REASSESSMENT ORDER. THE CIT(A) OBSERVED THAT NOTICE ISSUED BY THE A.O. U/S 143(2) OF THE I.T.ACT ON 30.07.2007 HAD QUOTED THE OLD PAN AAJFS9814M. THE CIT(A) FURTHER OBSERVED THAT THE RETURNS FILED FOR THE PREVIOUS YEARS QUOTING OLD PAN WAS DULY ACCEPTED BY THE DEPARTMENT. THE CIT(A) NOTED THAT T HE NEW PAN ALLOTTED TO THE ASSESSEE BY THE DEPARTMENT VIDE ITS LETTER DATED 03.04.2007 WAS ONLY SUBSEQUENT TO THE FILING OF THE ORIGINAL RETURN U/S 139(1) OF THE I.T.ACT . THEREFORE , IT WAS CONCLUDED BY THE CIT(A) THAT THE REASONS STATED FOR REOPENING THE A SSESSMENT THAT NO RETURN OF INCOME WAS FILED FOR THE ASSESSMENT YEAR 2006 - 2007 CANNOT BE CONSIDERED AS A REASON BASED ON WHICH THE ASSESSMENT COULD BE REOPENED. HENCE , THE ENTIRE REASSESSMENT PROCEEDING WAS QUASHED AND THE CONSEQUENT ADDITIONS WERE DEL ETED. 6. THE REVENUE BEING AGGRIEVED HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ASSESSMENT ORDER. ITA NO. 278 & CO 25 / COCH /201 6 . M/S.SUNTECH BUSINESS SOLUTIONS PVT.LTD . 5 6.1 THE LEARNED AR HAS FILED A PAPER BOOK COMPRISING OF 141 PAGES, INTER ALIA, ENCLOS ING COPY OF THE ACKNOWLEDGEMENT OF THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2006 - 2007, COPY OF AUDITED FINANCIAL STATEMENT FOR THE FINANCIAL YEAR 2005 - 2006, COPY OF THE NOTICE ISSUED U/S 143(2) DATED 30.07.2007, ETC. THE LEARNED AR HAS ALSO FIL ED A BRIEF WRITTEN SUBMISSION FILED BEFORE THE CIT(A) AND THE CONTEND OF THE SAME WAS ALSO ELABORATED BEFORE US. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN RESPONSE TO NOTICE U/S 148, THE ASSESSEE HAD FILED A LETTER DATED 25.04.2012 STATING THE RETURN FILED ORIGINALLY ON 29.11.2006 MAY BE TREATED AS A RETURN FOR THE PURPOSE OF THE SAID NOTICE. IN THE SAME LETTER, THE ASSESSEE HAD SOUGHT FOR THE REASONS STATED FOR REOPENING THE ASSESSMENT. THE ASSESSING OFFICER VIDE HIS LETTER DATED 01.05.2012 HAD FURNISHED THE REASONS RECORDED. THE SOLE REASON FOR REOPENING THE ASSESSMENT WA S THAT THE AS SESSEE HAD VIOLATED THE PROVISIONS OF SECTION 139 OF THE I.T.ACT , SINCE NO RETURN OF INCOME WAS FILED, AND THEREFORE, INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T.ACT. T HE ASSESSEE VIDE ITS LETTER DATED 29.05.2012 FILED OBJECTIONS TO THE REASSESSMENT. IT WAS SUBMITTED THE REASONS RECORDED WAS FACTUALLY INCORRECT AS THE ASSESSEE HAD FILED THE RETURN OF INCOME U/S 139(1) OF THE ACT FOR THE ASSESSMENT YEAR 2006 - 2007 ON 29.11.2006. A COP Y OF THE SAID RETURN OF INCOME FILED QUOTING PAN AAJFS9814M ALONG WITH ACKNOWLEDGEMENT, WERE DULY FURNISHED AS AN ITA NO. 278 & CO 25 / COCH /201 6 . M/S.SUNTECH BUSINESS SOLUTIONS PVT.LTD . 6 ANNEXURE TO THE LETTER. IT IS AN ADMITTED FACT THAT THE ASSESSEE HAD FILED THE RETURN OF INCOME QUOTING THE PAN DULY ALLOTTED BY THE DEPARTMEN T. IT IS ONLY SUBSEQUENT TO THE FILING OF THE RETURN OF INCOME, THE NEW PAN WAS ALLOTTED. PURSUANT TO THE NOTICE ISSUED U/S 148, ASSESSEE MADE ATTEMPTS TO E - FILE ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006 - 2007 , WHICH WAS UNSUCCESSFUL . THE RELEVANT S CREEN - SHOT IS ATTACHED AS ANNEXURE A1 TO THE PAPER BOOK. THE ASSESSEE CANNOT BE FAULTED THAT IT HAD QUOTED THE PAN AAJFS9814M, WHICH WAS DULY ALLOTTED BY THE DEPARTMENT AND VALID AS ON THE DATE OF FILING OF RETURN OF INCOME (I.E. 29.11.2006). THE RETURNS O F INCOME WERE FILED FOR ASSESSMENT YEAR 2006 - 2007 AND EARLIER ASSESSMENT YEARS QUOTING THE PAN AAJFS9814M. FOR THE EARLIER ASSESSMENT YEARS , RETURNS OF INCOME WERE DULY ACCEPTED AND THE ASSESSMENTS WERE COMPLETED. IT IS NOT THE CASE OF THE ASSESSING OFFICE R THAT THE RETURN FOR THE ASSESSMENT YEAR 2006 - 2007 WAS NOT FILED AT ALL. THE ASSESSEE HAS DULY PAID THE ADVANCE TAX AND ALSO CLAIMED TDS AND SELF - ASSESSMENT TAX. THE S CRUTINY NOTICE U/S 143(2) OF THE I.T.ACT WAS DULY ISSUED TO THE ASSESSEE QUOTING THE OLD PAN . HOWEVER, THE SCRUTINY ASSESSMENT GOT TIME BARRED AND NOTICE U/S 148 WAS ISSUED FOR THE SOLE REASON THAT NO RETURN OF INCOME WAS FILED FOR THE ASSESSMENT YEAR 2006 - 2007. THIS REASON STATED FOR REOPENING THE ASSESSMENT IS ON WRONG ASSUMPTION OF JURISDI CTION AND NOT BASED ON RELEVANT MATERIAL. THEREFORE, THE CIT(A) WAS JUSTIFIED IN CANCELLING THE REASSESSMENT ORDER PASSED U/S 144 R.W.S. 147 OF THE I.T.ACT. CONSEQUENTLY, THE ADDITIONS MADE IN THE REASSESSMENT DOES ITA NO. 278 & CO 25 / COCH /201 6 . M/S.SUNTECH BUSINESS SOLUTIONS PVT.LTD . 7 NOT SURVIVE AND HAS BEEN RIGHTLY DELETED BY THE CIT(A) . IT IS ORDERED ACCORDINGLY. CO NO.25/COCH/2016 : BY THE ASSESSEE : 8. IN THE ASSESSEES CROSS OBJECTION, GROUNDS ARE RAISED WITH REGARD TO THE MERITS OF THE ADDITION. SINCE THE REASSESSMENT PASSED U/S 144 R.W.S. 147 OF THE I.T.ACT IS QUASHED , THE ADDITION ON MERITS DOES NOT SURVIVE . THEREFORE, THE C.O. HAS BECOME INFRUCTUOUS AND IS NOT ADJUDICATED. IT IS ORDERED ACCORDINGLY. 9 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE AND CO PREFERRED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED O N THIS 26 TH DAY OF OCTOBER, 2018 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIA L MEMBER COCHIN ; DATED : 26 TH OCTOBER, 2018 . DEVDAS* COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A) TRIVANDRUM. 4. THE CIT TRIVANDRUM. 5. DR, ITAT, COCHIN 6 . GUARD FILE.