COMMISSIONER OF INCOME TAX V. M/s. Jolly Steelite Engg. Pvt. Ltd.

ITTA/559/2012

AI Insights

The case revolves around an appeal by the Commissioner of Income Tax-II, Hyderabad, against the order of the Income Tax Appellate Tribunal, Hyderabad, which had rejected the Revenue's application for recall of a previous order. The original dispute concerned the assessment of a 7000 sq. yards plot under the Wealth Tax Act, 1957. The assessee, M/s Jolly Steelite Engg. Pvt. Ltd., contested the assessment, leading to a series of appeals. The Tribunal had earlier ruled the assessment invalid due to procedural lapses in serving the notice within the required timeframe. The Revenue's attempt to recall this decision was based on claims that the Tribunal had considered an order not included in the Commissioner's original appeal, which the Tribunal found to be without merit.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 719137 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 19-12-2012
• Assessment Year: misc
• Laws Referred To: Wealth Tax Act, 1957
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: S R ASHOK
• Keywords: Appellate Tribunal; Assessment Order; Void ab initio; Wealth Tax; Notice Requirement
• Section: 16(2); 2(ca)(v)

Judgement Text

"THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO ITTA No. 559 of 2012 Dated: 19-12-2012 Between: Commissioner of Income Tax-II, Hyderabad. …Appellant And M/s Jolly Steelite Engg. Pvt. Ltd., Hydeerabad. …Respondent. THE HONOURABLE SRI JUSTICE GODA RAGHURAM AND THE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO ITTA No. 559 of 2012 Judgment: (Per Hon’ble Sri Justice Goda Raghuram) Heard Sri S.R.Ashok, learned Senior counsel for the Revenue in this appeal preferred against the order dated 5-12-2007 of the Income Tax Appellate Tribunal, Hyderabad Bench rejecting MA No. 96/Hyd/2007 in ITA No. 36/Hyd/2002. By an order of Assessment dated 21-3-2001 under the Wealth Tax Act, 1957 the value of the 7000 Sq. yards plot was assessed to tax. Aggrieved, the assessee preferred an appeal to the CIT (Appeals), Hyderabad. The appellate authority by the order dated 10-5-2002 deleted this asset from computation to Wealth Tax on the ground that the assessee could not construct the building on the land in question despite several efforts, commencing from 1975. This conclusion of the appellate authority was despite the finding that unless the construction of the building is completed on the land, the asset cannot be exempted under Section 2(ca)(v) of the Act. However as appears from the record, the appellate authority failed to consider one of the grounds urged by the assessee, namely that the order of Assessment itself was void as notice under Section 16(2) of the Act was not served on the assessee before the expiry of 12 months from the date of filing of the return of Wealth, as mandated by the proviso to the provision. Aggrieved by the appellate order, Revenue preferred appeals to the Tribunal vide WTA Nos. 34 to 38/Hyd/2002. The assessee preferred cross-appeals substantively contending that the Commissioner (Appeals) ought to have held that the order of Assessment is void ab initio on the ground that statutory notice under Section 16 (2) of the Act was not served on the assessee- company before the expiry of 12 months from the date of filing of the returns. By the order dated 18-5-2004 the Tribunal rejected Revenue’s appeal and allowed the assessee’s cross-appeal on the singular ground that the order of Assessment itself was invalid for transgression of the provisions of Section 16 (2) of the Act. Revenue filed application for recall of the order dated 18- 5-2004 on the ground that the Tribunal had undertaken scrutiny of an order which was not considered by the Commissioner and did not form part of the order. This application was rejected by the order impugned. It is not in dispute and the material on record substantiates this fact, as held by the Tribunal in the order dated 18-5-2004 that Revenue failed to serve on the assessee a notice within 12 months from the date the return of Wealth was filed. Therefore the order of Assessment was invalid. This aspect of the matter was specifically raised by the assessee in the appeal before the Commissioner, who however appears to have proceeded to allow the appeal on a sympathetic ground. Aggrieved thereby, the Revenue preferred the appeal and assessee a cross- appeal. In the facts and circumstances we are satisfied that the issue whether the order of Assessment itself is void ab initio for violation of provisions of Section 16 (2) of the Act squarely falls within the contours of appellate scrutiny before the Tribunal. The Final order dated 18-5-2004 of the Tribunal concluding on the invalid nature of the initial assessment order being therefore impeccable, no recall of such an order was warranted, as rightly held by the Tribunal in the impugned order rejecting Revenue’s application for recall. No question of law let alone a substantial question of law arises for consideration in this appeal and it is accordingly dismissed at the stage of admission. _________________________ GODA RAGHURAM, J 19th December, 2012 _______________________________ M.S.RAMACHANDRA RAO, J GRR "