M/s Alborz Industries, Baddi V. ITO, Parwanoo

CO 5/CHANDI/2008

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7341 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 year(s) 4 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-07-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 26-02-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Reopening of assessment; Capital asset; Depreciation; Principle of natural justice; Competent authority; Assessment record; Reason to believe
• Section: 143(3); 234B; 147; 68; 148; 263; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO.1080/CHD/2007 (ASSESSMENT YEAR : 1999-2000) THE INCOME TAX OFFICER, VS. M/S ALBORZ INDUSTRIE S, PARWANOO. VILL. KARWANA, SAI ROAD, BADDI. PAN: AAFFA5215N AND C.O.NO.3/CHD/2008 ARISING OUT OF ITA NO.1080/CHD/2007 (ASSESSMENT YEAR : 1999-2000) M/S ALBORZ INDUSTRIES, VS. THE INCOME TAX OFFIC ER, VILL. KARWANA, SAI ROAD, PARWANOO. BADDI. PAN: AAFFA5215N ITA NO.1081/CHD/2007 (ASSESSMENT YEAR : 2000-01) THE INCOME TAX OFFICER, VS. M/S ALBORZ INDUSTRIE S, PARWANOO. VILL. KARWANA, SAI ROAD, BADDI. PAN: AAFFA5215N AND C.O.NO.4/CHD/2008 ARISING OUT OF ITA NO.1081/CHD/2007 (ASSESSMENT YEAR : 2000-01) M/S ALBORZ INDUSTRIES, VS. THE INCOME TAX OFFIC ER, VILL. KARWANA, SAI ROAD, PARWANOO. BADDI. PAN: AAFFA5215N 2 ITA NO.1082/CHD/2007 (ASSESSMENT YEAR : 2002-03) THE INCOME TAX OFFICER, VS. M/S ALBORZ INDUSTRIE S, PARWANOO. VILL. KARWANA, SAI ROAD, BADDI. PAN: AAFFA5215N AND C.O.NO.5/CHD/2008 ARISING OUT OF ITA NO.1082/CHD/2007 (ASSESSMENT YEAR : 2002-03) M/S ALBORZ INDUSTRIES, VS. THE INCOME TAX OFFIC ER, VILL. KARWANA, SAI ROAD, PARWANOO. BADDI. PAN: AAFFA5215N (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 10.7.2012 DATE OF PRONOUNCEMENT : 13.07.2012 O R D E R PER SUSHMA CHOWLA, J.M, : THE APPEALS FILED BY THE REVENUE ARE AGAINST THE S EPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEALS), SHIMLA ALL DATED 29.10.2007 RELATING TO ASSESSMENT YEARS 1999-2000, 2000-2001 AND 2002- 03 AGAINST THE ORDER PASSED U/S 144/147 OF THE INCO ME TAX ACT, 1961 (IN SHORT THE ACT). THE ASSESSEE HAS FILED CROSS OBJ ECTIONS AGAINST THE APPEALS FILED BY THE REVENUE. 2. BOTH THE APPEALS FILED BY THE REVENUE AND THE CR OSS OBJECTIONS FILED BY THE ASSESSEE WERE HEARD TOGETHER AND ARE B EING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE . 3 3. COMMON GROUNDS OF APPEAL HAVE BEEN RAISED BY THE REVENUE IN ALL THE APPEALS WHICH READ AS UNDER: '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN QUASHING THE ASSESSMENT MADE U/S 14 7 OF THE INCOME TAX ACT ON THE GROUND THAT THE NOTICE U/S 148 HAD BEEN ISSUED ON THE BASIS OF THE ORDER U/S 263 PASSED BY THE CJT FOR ANOTHER YEA R, AND SUCH ORDER U/S 263 HAD BEEN CANCELLED BY THE HON'BLE ITAT, IGNORIN G THE FACT THAT ON THE DATE OF ISSUE OF NOTICE U/S 148 THERE WAS SUFFICIENT MATERIAL ON RECORD, INCLUDING THE SAID ORDER U/S 263, FOR THE A.O. TO F ORM A REASONABLE BELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT BY VIRTUE OF EXCESS DEDUCTION ALLOWED U/S 80FA.' '2. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT (A) ERRED IN QUASHING THE ASSESSMENT FOR THE REASONS STATED IN H ER ORDER, IGNORING THE FACT THAT THE ORDER PASSED BY THE CIT U/S 263 RELAT ED TO A DIFFERENT ASSESSMENT YEAR.' 4. SIMILAR GROUNDS OF APPEAL HAVE BEEN RAISED BY TH E ASSESSEE IN THEIR CROSS OBJECTIONS AND THE GROUNDS RAISED IN ASSESSME NT YEAR 1999-2000 READS AS UNDER: 1. PRELIMINARY OBJECTIONS (A) THE RESPONDENT HAS BEEN STATED INCORRECTLY AS THERE IS NO FIRM WITH THE NAME MENTIONED IN THE FORM OF APPEAL, FILED BY THE ID. INCOME TAX OFFICER, PARWANOO, HP (HEREAFTER THE ITO) AND T HEREFORE, THE APPEAL FILED BY THE ID. ITO IS NOT MAINTAINABLE. (B) THE MAIN GROUND OF APPEAL IS BASED 'ON THE FACTS AN D CIRCUMSTANCES OF THE CASE' WHICH MEANS THE FACTS FOUND BY THE ID. COMMISSIONER OF INCOME TAX (APPEALS) [HEREAFTER THE CIT (A)] ARE AD MITTED AND UNDISPUTED AND THEREFORE IN VIEW OF INSTRUCTION NO. 1493 DATED 18- 11-1982 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES AND REITERATED VIDE INSTRUCTION NO. 1894 DATED 16-06-1992, THE APP EAL FILED BY THE ITO IS NOT MAINTAINABLE. 2. ACTION U/S 147 AND 148 IS BAD (A) THE ID. ITO ERRED IN INITIATING THE ASSESSMENT PROC EEDINGS UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (HEREAFTER THE ACT) ON THE 4 DICTATES, DIRECTIONS, AND INSTRUCTIONS OF HIGHER AU THORITIES, (B) THAT THE SATISFACTION OF THE COMPETENT AUTHORITY AS REQUIRED BY SECTION 151 OF THE ACT WAS NOT OBTAINED, (C) THE ID. ITO DID NOT RECORD THE 'REASON TO BELIEVE' TO INITIATE THE ASSESSMENT PROCEEDINGS, AS REQUIRED BY SECTION 148( 2) OF THE ACT, (D) THE ID. ITO HAD NO 'REASON TO BELIEVE' TO INITIATE THE ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT, THE PROCE EDINGS WERE INITIATED ON HIGHLY MISCONCEIVED GROUNDS, IN THE NA TURE OF PRETENCE AND WITHOUT ANY JUSTIFICATION, WHICH IS SI NE D QUA NON FOR ASSUMPTION OF VALID JURISDICTION UNDER THAT SEC TION. THEREFORE THE ASSESSMENT, HAVING BEEN COMPLETED WIT HOUT ASSUMING PROPER JURISDICTION UNDER SECTION 147 OF THE ACT, IS BAD I N LAW, NULL AND VOID AB- INTIO AND DESERVES TO BE ANNULLED. 3. NOTICE U/S 143(2) NOT ISSUED THAT THE ASSESSMENT HAS BEEN FRAMED WITHOUT ISSUE M UCH-LESS SERVICE OF NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 (HEREAFTER THE ACT) AND THEREFORE THE ASSESSMENT MADE IS BAD IN LA W, NULL AND VOID AB- INTIO AND DESERVES TO BE ANNULLED. 4. JURISDICTION OF THE ITO (A) THE ID. ITO, WHO INITIATED THE PROCEEDINGS UNDER SE CTION 147 OF THE ACT AS WELL AS COMPLETED THE ASSESSMENT, HAD NO JUR ISDICTION OVER THE CASE OF THE ASSESSEE, (B) THAT THE ID. ITO FAILED TO REFER, THE ISSUE PERTAIN ING TO HIS (THE ITO) JURISDICTION OVER THE CASE OF THE ASSESSE E, TO THE HON'BLE COMMISSIONER OF INCOME TAX, AS PROVIDED / REQUIRED BY SECTION 124 OF THE ACT, AND THEREFORE, THE IMPUGNED ASSESSMENT ORDER DATED 31-07-2006 PASSED BY THE ID. ITO IS WITHOUT JURISDICTION, BAD IN LAW, NULL A ND VOID AB-INTIO AND DESERVES TO BE ANNULLED. 5. NOTICE UNDER SECTION 148 (A) THAT THE LD. ITO ERRED ON FACTS AND IN LAW IN C OMPLETING THE ASSESSMENT WITHOUT ISSUE OF PROPER AND VALID NOTICE UNDER 5 SECTION 148 OF THE ACT, WHICH IS SINE QUA NON FOR A SSUMPTION OF VALID JURISDICTION UNDER SECTION 147 OF THE ACT. (B) THAT THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT (1) WAS NOT ISSUED IN ACCORDANCE WITH LAW, AND (2) WAS NOT ADDRESSED TO ' THE MEMBER OF THE FIRM', AS REQUIRED BY SECTION 282(2)(A) OF THE ACT, AND THEREFORE THE ASSESSMENT MADE IS BAD IN LAW, NU LL AND VOID AB-INTIO AND DESERVES TO BE ANNULLED. 6. THAT THE ID. ITO ERRED IN FRAMING THE ASSESSMEN T UNDER SECTION 144 OF THE ACT, PARTICULARLY WITHOUT PROPER SERVICE OF THE NOT ICE. 7. THAT THE IMPUGNED ASSESSMENT, HAVING BEEN COMPLE TED ON THE DICTATES, DIRECTIONS, AND INSTRUCTIONS OF HIGHER AUTHORITIES, RELYING UPON THE FINDINGS OF THE HON'BLE CIT FOR THE ASSESSMENT YEAR 2001-02 IN PROCEEDINGS U/S 263 OF THE ACT, WITHOUT INDEPENDENT APPLICATION OF MIND , IS BAD IN LAW, NULL AND VOID AB-INTIO AND DESERVES TO BE ANNULLED. 8. DEDUCTION U/S 80IA (A) THAT THE ID ITO ERRED IN HOLDING THAT THE DEDUCTION , UNDER SECTION 80IA OF THE ACT, IS NOT ADMISSIBLE TO THE ASSESSEE, (B) THAT THE ID ITO ERRED IN DISALLOWING DEDUCTION CLAI MED AT RS. 32,43,963 UNDER SECTION 801A OF THE ACT AND THEREBY ERRED IN MAKING ADDITION OF RS. 32,43,963, (C) THAT THE ID ITO ERRED IN HOLDING THAT THE ASSESSEE FAILED TO FURNISH THE EVIDENCE OF EMPLOYING TEN OR MORE WORKERS IN THE MA NUFACTURING PROCESS, (D) THAT THE ID ITO ERRED IN HOLDING THAT NO MANUFACTUR ING ACTIVITY WAS CARRIED ON BY THE ASSESSEE, WITHOUT APPRECIATING TH E MANUFACTURING ACTIVITIES, OF THE ASSESSEE, IN TRUE PROSPECT, (E) THAT THE ID ITO ERRED IN HOLDING THAT PROFIT FROM S ALE OF SCRAP IS NOT INCOME DERIVED FROM MANUFACTURING AND THE SAME IS N OT ELIGIBLE FOR DEDUCTION AND FURTHER ERRED IN ESTIMATING SUCH PROF IT AT RS. 1,73,700 PARTICULARLY WITHOUT ANY BASIS, EVIDENCE OR MATERIA L ON RECORD, (F) THAT THE ID ITO ERRED IN HOLDING (I) THAT EXPENSES ON ELECTRICITY ARE 6 HIGHLY INSUFFICIENT, (II) THAT SALES AND PRODUCTION HAS BEEN INFLATED, AND (III) THE ASSESSEE IS ENGAGED IN TRADING BUSINE SS; ALL THIS IS BASED ON PURE SURMISES AND CONJECTURES IS WITHOUT ANY EVI DENCE OR MATERIAL ON RECORD, IT IS, THEREFORE, MOST HUMBLY PRAYED THAT YOUR HONO UR MAY KINDLY BE PLEASED TO ALLOW THE DEDUCTION UNDER SECTION 80IA OF THE AC T AND DELETE THE ADDITION OF RS. 32,43,963. 9. SECTION 80IA(10) - HIGH PROFITS / INCOME FROM OTHER SOURCES (A) THAT THE ID ITO ERRED IN (I) HOLDING THAT THE PROFI TS DECLARED ARE EXCESSIVE AND (II) ESTIMATING THE NET PROFIT AT RS. 81,860, BEING 2% OF SALES; (B) THAT THE ID ITO ERRED IN RELYING UPON THE EVIDENCE COLLECTED EX-PARTE, WITHOUT CONFRONTING THE SAME TO THE ASSESSEE AND WI THOUT PROVIDING ANY OPPORTUNITY TO THE ASSESSEE TO REBUT THE SAME A ND SUCH EVIDENCE MUST THEREFORE BE EXCLUDED FROM CONSIDERATION, (C) THAT THE ID ITO ERRED IN HOLDING THAT THE ASSESSEE HAS MANIPULATEDTHE PROFITS BY SUPPRESSING THE EXPENSES (INCLUDING THE PURCHASES) ANDALSO BY INFLATING THE SALES, AND PART ICULARLY WITHOUT SPECIFYING ANY SUCH ITEM AND QUANTIFYING THE SAME, AND WITHOUT ANY MATERIAL OR EVIDENCE ON RECORD IN SUPPORT THEREOF, IT IS, THEREFORE, MOST HUMBLY PRAYED THAT YOUR HONO UR MAY KINDLY BE PLEASED TO HOLD: (A) THAT THE ID ITO ERRED IN ESTIMATING THE NET PROFIT AT RS. 81,860 BEING 2% OF SALES, AND (B) THAT RS. 32,43,963 ARE PROFITS FROM BUSINESS OF MAN UFACTURING AT BADDI, HP. 10. INCOME FROM OTHER SOURCES THAT THE ID ITO ERRED IN ASSESSING RS. 31,62,103 AS INCOME FROM OTHER SOURCES MERELY ON THE GROUND THAT THE PROFITS OF THE BUSINE SS CANNOT BE MORE THAN 2%. 7 11. DEPRECIATION THAT THE ID. ITO ERRED IN HOLDING THAT DEPRECIATION IS MANDATORY AND HAS TO BE ALLOWED IRRESPECTIVE OF WHETHER THE ASSESSEE CLAIMS IT OR NOT. 12. SHORT TERM CAPITAL GAINS (A) THAT THE ID ITO ERRED IN ASSESSING RS. 20,27,735 AS SHORT TERM CAPITAL GAINS ARISING ON ALLEGED TRANSFER OF LAND A ND BUILDING, (B) THAT THE ID ITO ERRED IN COMPUTING THE CAPITAL GAIN S ON THE BASIS OF REVALUED VALUE OF THE ASSETS WITHOUT APPRECIATING T HAT BY MERE REVALUATION AND BOOK ENTRY NO INCOME / CAPITAL GAIN S ARISES, (C) THAT THE ID ITO ERRED IN APPLYING THE PROVISIONS OF SECTION 45 OF THE ACT, IT IS, THEREFORE, MOST HUMBLY PRAYED THAT YOUR HONO UR MAY KINDLY BE PLEASED TO DELETE THE ADDITION OF RS. 20,27,735 BEI NG SHORT TERM CAPITAL GAINS. UNSECURED LOANS (A) THAT THE ID ITO ERRED IN ADDING RS. 5,00,000 BEING UNEXPLAINED UNSECURED LOANS, UNDER SECTION 68 OF THE ACT, (B) THAT THE ID ITO FAILED TO APPRECIATE THE SCOPE OF S ECTION 147 OF THE ACT AND ERRED IN MAKING ADDITION ON THE ISSUE OTHER THAN THE ISSUES FOR WHICH PROCEEDINGS WERE INITIATED U/S 147 OF THE ACT, AND IT IS, THEREFORE, HUMBLY PRAYED THAT YOUR HONOU R MAY KINDLY BE PLEASED TO DELETE THE ADDITION OF RS. 5,00,000. 14. INTEREST U/S 234 A AND 234B THAT THE ID ITO ERRED IN LEVYING INTEREST UNDER SEC TION 234A AND 234B OF THE ACT AND FAILED TO CONSIDER SECTION 234B(3) OF THE ACT, AND WITHOUT PREJUDICE THE INTEREST CHARGED IS EXCESSIVE AND IT IS, THEREFORE, HUMBLY PRAYED THAT YOUR HONOUR MAY KINDLY BE PLEASED TO DELETE THE INTEREST CHARGED. 15. THAT THE ASSESSMENT IS MALA FIDE, AGAINST THE FACTS OF THE CASE AS WELL AS LAW. 8 16. THAT THE ID ITO FAILED TO PROVIDE PROPER OPPORT UNITY OF HEARING TO THE ASSESSEE AND HAD MADE OBSERVATIONS WHICH ARE AGAINS T THE FACTS AND DO NOT PERTAIN TO THE ASSESSMENT YEAR UNDER CONSIDERATION. 17. THAT THE ID ITO FAILED TO PROVIDE COPY OF DOCUMENTS - REQUESTED FOR BY THE ASSESSEE, WHICH ARE AVAILABLE ON ASSESSMENT RECORD. 18. THAT THE ID ITO ERRED IN PROCEEDING WITH THE AS SESSMENT WITHOUT DECIDING THE PRELIMINARY OBJECTIONS PERTAINING TO J URISDICTION, AS RAISED BY THE ASSESSEE. 19. THAT THE ID ITO FAILED TO PROVIDE PROPER OPPORT UNITY TO FILE PRELIMINARY OBJECTIONS PERTAINING TO INITIATION OF PROCEEDINGS U/S 147 OF THE ACT. 20. THAT THE ASSESSEE CRAVES LEAVE TO ADD TO, AMEND , ALTER OR VARY FROM THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HE ARING. 5. THE APPEALS WERE FIXED FOR HEARING ON 3.4.2008 A ND THE SAME WERE ADJOURNED TO 9.4.2008 AND THEREAFTER TO VARIOUS DAT ES IN THE YEARS 2008, 2009 AND 2010 AT THE REQUESTS OF THE LEARNED A.R. F OR THE ASSESSEE OR AT THE REQUESTS OF THE LEARNED D.R. FOR THE REVENUE. THE APPEALS WERE THEREAFTER FIXED FOR HEARING ON 9.5.2012 BY ISSUE O F NOTICE WHICH WAS SENT BY REGISTERED AD TO THE ASSESSEE. ON THE APPO INTED DATE OF HEARING I.E. 9.5.2012 THE LEARNED D.R. FOR THE REVENUE MOVE D AN APPLICATION FOR ADJOURNMENT AND THE APPEALS WERE ADJOURNED TO 10.7. 2011. ON 10.7.2012, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION WAS MOVED FOR ADJOURNMENT. WE PROCEED TO DISPOSE O F THE PRESENT APPEALS AND THE CROSS OBJECTIONS AFTER HEARING THE LEARNED D.R. FOR THE REVENUE. 6. IT WAS POINTED OUT BY THE LEARNED D.R. FOR THE R EVENUE THAT THE ORDER UNDER SECTION 263 OF THE ACT WAS PASSED BY TH E COMMISSIONER OF INCOME TAX IN THE CASE OF THE ASSESSEE RELATING TO ASSESSMENT YEAR 2001- 02. THE SAID ORDER WAS HELD TO BE INVALID BY THE T RIBUNAL VIDE ITS ORDER DATED 13.8.2007. THE ASSESSING OFFICER ALSO INITIA TED PROCEEDINGS FOR 9 RE-ASSESSMENT UNDER SECTION 147/148 OF THE ACT IN T HE CASE OF THE ASSESSEE RELATING TO ASSESSMENT YEARS 1998-99 TO 20 00-01 AND 2002-03. THE LEARNED D.R. FOR THE REVENUE FURTHER BROUGHT TO OUR NOTICE THAT THE APPEAL OF THE ASSESSEE AGAINST THE INITIATION OF RE -ASSESSMENT PROCEEDINGS UNDER SECTION 147/148 OF THE ACT AND SERVICE OF NOT ICE UNDER SECTION 143(2) OF THE ACT RELATING TO ASSESSMENT YEAR 1998- 99 HAS BEEN DECIDED BY THE CHANDIGARH BENCH OF THE TRIBUNAL VIDE ORDER DATED 24.5.2012 AND THE APPEALS INVOLVING SIMILAR ISSUES AS RAISED IN T HE CROSS OBJECTIONS FILED BY THE ASSESSEE, HAVE BEEN REMITTED BACK TO T HE FILE OF THE CIT (APPEALS). 7. IN RESPECT OF THE GROUNDS OF APPEAL RAISED BY TH E REVENUE IN ITS APPEALS THE LEARNED D.R. FOR THE REVENUE FURTHER PO INTED OUT THAT NO ASSESSMENT WAS MADE IN THE PRESENT CASE AND ONLY TH ERE WAS PROCESSING OF RETURNS, CONSEQUENT THERETO REASONS WERE RECORDE D FOR REOPENING OF ASSESSMENT AND NOTICE WAS ISSUED UNDER SECTION 148 OF THE ACT. HOWEVER, IN RESPECT OF THE PROCEEDINGS RELATING TO ASSESSMENT YEAR 2001- 02, THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SEC TION 143(3) OF THE ACT AND THE ORDER PASSED UNDER SECTION 263 OF THE A CT WAS QUASHED BY THE TRIBUNAL AS ADEQUATE ENQUIRIES WERE MADE BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE L EARNED D.R. FOR THE REVENUE DREW OUR ATTENTION TO THE REASONS RECORDED FOR RE-OPENING OF ASSESSMENT AND POINTED OUT THAT THERE WAS NO MERIT IN THE OBSERVATIONS OF THE CIT (APPEALS) THAT THE SAID REOPENING OF ASSESS MENT UNDER SECTION 148 OF THE ACT WAS ON THE BASIS OF THE ORDER PASSED UNDER SECTION 263 OF THE ACT, WHICH HAS BEEN CANCELLED BY THE TRIBUNAL A ND CONSEQUENTLY THE PRESENT ASSESSMENTS WERE CANCELLED BY THE CIT (APPE ALS). 8. ON THE PERUSAL OF THE RECORD AND THE VARIOUS PAP ER BOOKS FILED BY BOTH THE LEARNED A.R. FOR THE ASSESSEE AND LEARNED D.R. FOR THE REVENUE, 10 WE FIND THAT THE ASSESSEE HAD FILED ITS RETURN OF I NCOME FOR ASSESSMENT YEAR 1999-2000 ON 29.12.1999, RELATING TO ASSESSMEN T YEAR 2000-01 ON 31.10.2000 AND RELATING TO ASSESSMENT YEAR 2002-03 ON 31.10.2003, WHICH WERE PROCESSED UNDER SECTION 143(1) OF THE AC T. THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IA OF THE ACT WHI CH WAS OBSERVED TO BE NON-GENUINE AND NON-ADMISSIBLE BY THE ASSESSING OFFICER. CONSEQUENTLY REASONS WERE RECORDED FOR REOPENING OF THE ASSESSMENT AND NOTICE/S UNDER SECTION 148 OF THE ACT WERE ISSUED O N 7.7.2005 FOR ASSESSMENT YEARS 1999-2000 AND 2000-01 AND ON 7.2.2 005 FOR ASSESSMENT YEAR 2002-03. ADMITTEDLY THE SAID NOTICES UNDER SE CTION 148 OF THE ACT WERE ISSUED WITHIN SIX YEARS I.E. WITHIN STIPULATED PERIOD PRESCRIBED UNDER THE ACT. 9. THE ASSESSEE IN ITS CROSS OBJECTIONS HAS RAISED VARIOUS GROUNDS AGAINST THE ACTION TAKEN UNDER SECTION 147/148 OF T HE ACT BEING BAD IN LAW. FURTHER GRIEVANCE OF THE ASSESSEE IS THAT THE ASSESSMENTS HAVE BEEN FRAMED WITHOUT ISSUE OF NOTICE UNDER SECTION 143(2) OF THE ACT AND THEREFORE, ASSESSMENT WAS BAD IN LAW. THE JURISDIC TION OF THE ASSESSING OFFICER INITIATING PROCEEDINGS UNDER SECTION 147 OF THE ACT HAVE ALSO BEEN CHALLENGED. THE ASSESSEE IS ALSO AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER IN FRAMING THE ASSESSMENT UNDER S ECTION 144 OF THE ACT WITHOUT PROPER SERVICE OF THE NOTICE. THE ASSESSEE HAS RAISED VARIOUS GROUNDS OF APPEAL AGAINST THE NON-ALLOWANCE OF THE DEDUCTION UNDER SECTION 80IA OF THE ACT AND OTHER GROUNDS OF ASSESS ABILITY OF INCOME FROM OTHER SOURCES, ALLOWANCE OF DEPRECIATION AND A SSESSABILITY OF SHORT TERM CAPITAL GAINS. 10. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF C IT (APPEALS) UNDER WHICH THE NOTICE ISSUED UNDER SECTION 148 OF THE AC T WAS HELD TO BE NON- JUSTIFIED AS THE VERY BASIS FOR ISSUING THE NOTICE UNDER SECTION 148 OF THE 11 ACT I.E. THE ORDER PASSED UNDER SECTION 263 OF THE ACT RELATING TO ASSESSMENT YEAR 2001-02 HAS BEEN CANCELLED BY THE T RIBUNAL. 11. THE FACTS RELATING TO THE ISSUE ARE THAT THE AS SESSMENT RELATING TO ASSESSMENT YEAR 2001-02 WAS COMPLETED UNDER SECTION 143(3) OF THE ACT. THEREAFTER THE COMMISSIONER OF INCOME TAX PASSED TH E ORDER OF REVISION UNDER SECTION 263 OF THE ACT DATED 18.1.2005. THE SAID ORDER PASSED UNDER SECTION 263 OF THE ACT WAS CHALLENGED BY THE ASSESSEE BEFORE THE TRIBUNAL AND IN ITA NO.433/CHD/2005 RELATING TO ASS ESSMENT YEAR 2001- 02, VIDE ORDER DATED 13.8.2007, THE TRIBUNAL HELD T HAT IN VIEW OF THE ENQUIRIES MADE BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS, THE INITIATION OF PROCEEDINGS UNDER SE CTION 263 OF THE ACT WAS WITHOUT FULFILLMENT OF PREREQUISITES OF SECTION 263 OF THE ACT AND THE SAME WERE HELD TO BE INVALID. 12. THE ASSESSING OFFICER HAD RECORDED REASONS FOR REOPENING THE ASSESSMENT RELATING TO ASSESSMENT YEARS 1998-99 TO 2000-01 AND 2002- 03. THE SAID REASONS RELATING TO ASSESSMENT YEAR 2 000-01 ARE ANNEXED AT PAGES 5 TO 7 OF THE PAPER BOOK FILED BY THE REVENUE AND RELATING TO ASSESSMENT YEAR 1999-2000 AT PAGES 9 TO 11 OF THE P APER BOOK. THE PERUSAL OF THE SAID REASONS RECORDED FOR REOPENING OF ASSESSMENT REFLECT THE ISSUE OF EXEMPTION CLAIMED BY THE ASSESSEE UNDE R SECTION 80IA OF THE ACT. THE PERUSAL OF THE SAID REASONS DOES NOT REFL ECT THE BASIS OF THE INITIATION OF RE-ASSESSMENT PROCEEDINGS BEING THE O RDER PASSED UNDER SECTION 263 OF THE ACT. IN ANY CASE, UNDER THE INC OME TAX ACT THE PRINCIPLES OF RESJUDICATA ARE NOT APPLICABLE AND EA CH ASSESSMENT YEAR IS SEPARATE AND DISTINCT. THE PROCEEDINGS UNDER SECTI ON 263 OF THE ACT RELATING TO ASSESSMENT YEAR 2001-02 WERE PURSUANT T O AN ORDER PASSED UNDER SECTION 143(3) OF THE ACT I.E. THE ORDER IN W HICH ENQUIRIES WERE MADE BY THE ASSESSING OFFICER AND WERE HELD TO BE E RRONEOUS AND 12 PREJUDICIAL TO THE INTEREST OF REVENUE BY THE COMMI SSIONER OF INCOME TAX WHILE EXERCISING HIS POWERS UNDER SECTION 263 O F THE ACT. THE SAID EXERCISE OF POWERS BY COMMISSIONER OF INCOME TAX WA S HELD TO BE INVALID BY THE TRIBUNAL (SUPRA). HOWEVER, IN THE P RESENT APPEALS BEFORE US AND AS ALSO IN THE APPEAL FILED BY THE ASSESSEE RELATING TO ASSESSMENT YEAR 1998-99 THE RE-ASSESSMENT PROCEEDINGS WERE INI TIATED BY RECORDING OF REASONS UNDER SECTION 147 OF THE ACT AND ISSUE O F NOTICE UNDER SECTION 148 OF THE ACT. WE ARE NOT ADDRESSING THE ISSUE OF JURISDICTION OF ASSESSING OFFICER IN RECORDING THE REASONS FOR REOP ENING UNDER SECTION 147 OF THE ACT NOR THE ISSUE OF NOTICE UNDER SECTIO N 148 OF THE ACT. 13. WE FIND THAT THE ASSESSEE HAD FILED AN APPEAL A GAINST THE ORDER OF CIT (APPEALS) DATED 22.2.2006 RELATING TO ASSESSMEN T YEAR 1998-99 WHEREIN IT HAD CHALLENGED FIRST NON-GRANT OF OPPORT UNITY BY THE CIT (APPEALS) AND ALSO JURISDICTION OF ITO IN FRAMING T HE ASSESSMENT. FURTHER ISSUE RAISED BY THE ASSESSEE WAS WITH REGAR D TO THE SERVICE OF NOTICE UNDER SECTIONS 148 AND 143(2) OF THE ACT. T HEREAFTER THE ASSESSEE HAS RAISED THE GROUNDS OF APPEALS AGAINST NON-ALLOW ANCE OF DEDUCTION UNDER SECTION 80IA OF THE ACT ON VARIOUS ACCOUNTS. THE TRIBUNAL IN ITA NO.306/CHD/2006 RELATING TO ASSESSMENT YEAR 1998-99 VIDE ORDER DATED 24.5.2012 HAS REMITTED THE ISSUE BACK TO THE FILE O F THE CIT (APPEALS) WITH THE DIRECTION TO DECIDE THE APPEAL AFRESH ON M ERITS IN ACCORDANCE WITH LAW AFTER AFFORDING DUE AND REASONABLE OPPORTU NITY OF BEING HEARD TO THE ASSESSEE. THE ISSUE RAISED IN THE PRESENT A PPEALS FILED BY THE REVENUE AND THE CROSS OBJECTIONS RAISED BY THE ASSE SSEE ARE IDENTICAL TO THE ISSUES RAISED IN ASSESSMENT YEAR 1998-99, WHICH IS FIRST YEAR OF CHALLENGING THE CLAIM OF DEDUCTION UNDER SECTION 80 IA OF THE ACT. THE ASSESSEE IN THE SAID APPEAL HAS RAISED OBJECTION AG AINST BOTH THE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT AND NON ISSUE O F NOTICE UNDER SECTION 13 143(2) OF THE ACT. SIMILAR ISSUES HAVE BEEN RAISED BY THE ASSESSEE IN THE CAPTIONED APPEALS SLATED BEFORE US. IN VIEW OF THE SIMILAR ISSUES BEING RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 1998-99 A ND ALSO IN THE APPEALS RELATING TO ASSESSMENT YEARS 1999-2000, 2000-01 AND 2002-03 AND FOLLOWING THE PRINCIPLES OF NATURAL JUSTICE WE DEEM IT FIT TO RESTORE THE PRESENT ISSUES BACK TO THE FILE OF THE CIT (APPEALS ) TO DECIDE THE SAME DE-NOVO IN ACCORDANCE WITH LAW AFTER AFFORDING REAS ONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO APPEAR BEFORE THE CIT (APPEALS) FOR SPEEDY DISPOSAL OF THE APPEALS. THE APPEALS FILED BY THE REVENUE RELATING TO ASSESSMENT YEARS 1999-2000, 2000-01 AND 2002- 03 AND CROSS OBJECTIONS FILED BY THE ASSESSEE AGAIN ST THE SAID APPEALS FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PU RPOSES. 14. IN THE RESULT, ALL THE THREE APPEALS OF THE REV ENUE AND THE CROSS OBJECTIONS FILED BY ASSESSEE ARE ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DAY OF JULY, 2012. SD/- SD/- (MEHAR SINGH) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13 TH JULY, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH