Amolakshaya Trade and Credit Private Limited, Guwahati V. Income Tax Officer, Ward-4(1), Guwahati

ITA 05/GTY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0754 (ITAT-GUWAHATI)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 04-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K DAS
• Keywords: Period of limitation; Time period of passing order; Reason to believe
• Section: 143(3); 143(1); 143(2); 147; 148

Judgement Text

1 ITA NOS.4 & 5/GAU/2019 AMOLAKSHAYA TRADE & CREDIT PVT . LTD., AYS- 2009-10 & 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL GUWAH ATI BENCH, E COURT AT KOLKATA ( ) . . , . , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NOS. 4 & 5/GAU/2019 ASSESSMENT YEARS: 2009-10 & 2010-11 M/S. AMOLAKSHAYA TRADE & CREDIT PVT. LTD. (AAECA2485J) VS. INCOME-TAX OFFICER, WARD-4(1), GUWAHATI APPELLANT RESPONDENT DATE OF HEARING 08.06.2020 DATE OF PRONOUNCEMENT 12.06.2020 FOR THE APPELLANT SHRI SANJAY MODI, FCA FOR THE RESPONDENT SHRI M. K. DAS, ADDL. CIT, SR. D R ORDER PER SHRI A.T.VARKEY, JM BOTH THESE APPEALS PREFERRED BY THE ASSESSEE ARE AG AINST THE SEPARATE ORDERS OF THE LD. CIT(A), GUWAHATI-2, GUWAHATI DATED 29.10.2018 FOR A YS 2009-10 AND 2010-11. 2. THOUGH THE ASSESSEE HAS RAISED TEN GROUNDS OF A PPEAL, AT THE OUTSET THE ASSESSEES LD. AR BROUGHT TO OUR NOTICE THAT IT HAS CHALLENGED T HE LEGAL VALIDITY/JURISDICTION OF THE AO [ITO, WARD-4 (1)] TO PASS THE IMPUGNED ASSESSMENT O RDER U/S. 147 READ WITH SEC. 143(3)(A) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT) WITHOUT ISSUING NOTICE U/S. 148 OF THE ACT AND ALSO WITHOUT RECORDING THE REASO NS FOR RE-OPENING THE ASSESSMENT FOR BOTH ASSESSMENT YEARS. ACCORDING TO HIM, ANOTHER AO I.E. [ITO, WARD-1(1)] HAD ISSUED SECTION 148 NOTICE AND HAD RECORDED REASONS FOR RE-OPENING AND THEREAFTER ONLY TRANSFERRED THE CASE TO ITO, WARD-4(1) WHO NEITHER ISSUED THE NOTICE U/S . 148 OF THE ACT NOR HAD RECORDED REASONS FOR RE-OPENING HAS PASSED THE IMPUGNED REAS SESSMENT ORDER, WHICH ACTION IS WITHOUT JURISDICTION. IT WAS ALSO BROUGHT TO OUR NOTICE THA T SIMILAR ACTION HAS BEEN TAKEN BY THE AO FOR AY 2010-11. SO, ACCORDING TO HIM THAT RE-ASSESS MENT ORDER FOR AY 2010-11 WAS ALSO WITHOUT JURISDICTION THEREFORE, BOTH THE LEGAL ISSU ES RAISED FOR AYS 2010-11 AND 2011-12 2 ITA NOS.4 & 5/GAU/2019 AMOLAKSHAYA TRADE & CREDIT PVT . LTD., AYS- 2009-10 & 2010-11 ARE TAKEN TOGETHER FOR ADJUDICATION AND WE WILL ADJ UDICATE THE LEGAL ISSUE FOR AY 2009-10, THE RESULT OF WHICH WILL BE FOLLOWED IN THE AY 2010 -11. 3. AFTER HAVING HEARD BOTH THE PARTIES THE UNDISPUT ED FACTS RELATING TO THE LEGAL ISSUE RAISED BY THE ASSESSEE IS AS FOLLOWS: FOR AY 2009-10, THE ITO, WARD-1(1), GUWAHATI HAS RE CORDED REASONS FOR RE- OPENING U/S. 147 OF THE ACT ON 24.03.2016 (PAPER BO OK PAGE1) AND THEREAFTER ISSUED NOTICE U/S. 148 OF THE ACT ON 29.03.2016 (PA PER BOOK PAGE 2). THEREAFTER, ON 01.06.2016 HE TRANSFERRED THE REASSE SSMENT OF THE ASSESSEE TO THE ITO, WARD-4(1), GUWAHATI AND BY STATING AS UNDER: SUB: TRANSFER OF REASSESSMENT U/S 147 CASES ASSE SSMENT RECORDS REGARDING SIR, KINDLY FIND ENCLOSED HEREWITH ASSESSMENT FOLDERS O F THE FOLLOWING CASES, BEING SENT AS THE TERRITORIAL JURISDICTION OVER THE CASES ARE LYING WITH YOU . THE CASES HAVE BEEN REOPENED FOR ASSESSMENT U/S. 147 OF INCOME TAX ACT, 1961 AND A NOTICE U/S. 148 IN THESE CASES HAVE ALREADY BEEN ISSUED AND SERVED ON THE ASSESSEE.(EMPHASIS GIVEN BY) 4. FROM A PERUSAL OF THE AFORESAID LETTER DATED 01. 06.2016 TRANSFERRING THE REASSESSMENT OF THE ASSESSEE TO ITO, WARD-4(1), THE ITO, WARD-1( 1), GUWAHATI HAS CLEARLY ADMITTED THAT HE DOES NOT HAVE TERRITORIAL JURISDICTION OVER THE CASE AND HAS TRANSFERRED IT TO THE ITO, WARD-4(1) (PAGE L3 OF PAPER BOOK). A PERUSAL OF TH E ORDER SHEET (COPY ANNEXED AT PAGES 4 TO 6 OF THE PAPER BOOK) IN THE CASE OF ASSESSEE REVEAL S THAT ON 24.03.2016 THE ITO, WARD-1(1), GUWAHATI HAD RECORDED THE REASONS FOR REOPENING ASS ESSEES CASE FOR AY 2009-10 AND THEREAFTER HAD TRANSFERRED THE RE-ASSESSMENT TO TH E ITO, WARD-4(1), GUWAHATI ON 20.06.2016. THEREAFTER, WE NOTE THAT ON 21.09.2016 , ITO, WARD-4(1) ISSUED NOTICE U/S. 143(2) OF THE ACT AND HAS LATER PASSED THE IMPUGNED ORDER ON 27.12.2016 I.E BY [ITO, WARD- 4(1)]. ACCORDING TO THE LD. COUNSEL, THE AO GETS V ESTED WITH THE JURISDICTION TO REOPEN AN ASSESSMENT ONLY IF HE SATISFIES THE CONDITION PRECE DENT AS STIPULATED IN SECTION 147 OF THE ACT AND AFTER ISSUING NOTICE U/S. 148 OF THE ACT HE CAN ASSUME JURISDICTION TO REASSESS THE ASSESSEE. ACCORDING TO HIM, THE REASONS WERE RECOR DED FOR REOPENING AS WELL AS NOTICE U/S. 148 OF THE ACT WAS ISSUED BY ITO, WARD-1(1) AND ONC E HE REALIZED THE MISTAKE THAT HE DID NOT HAD TERRITORIAL JURISDICTION OF THE ASSESSEE HA S TRANSFERRED THE MATTER TO THE ITO, WARD- 3 ITA NOS.4 & 5/GAU/2019 AMOLAKSHAYA TRADE & CREDIT PVT . LTD., AYS- 2009-10 & 2010-11 4(1) WHO DID NOT NEITHER CARE TO ISSUE NOTICE U/S. 148 OF THE ACT NOR RECORDED THE REASONS FOR REOPENING, HAS PASSED THE IMPUGNED ORDER WHICH ACT ION / OMISSION IS WITHOUT JURISDICTION AND HAS TO BE QUASHED AND HE CITED THE FOLLOWING CA SE LAWS IN SUPPORT OF HIS LEGAL CHALLENGE DISCUSSED SUPRA. I) ACIT VS. RESHAM PETROTECH LTD. (2012 21 TAXMANN. COM 161 (AHD) II) CORONATION AGRO INDUSTRIES LTD. VS. DCIT (2017) 82 TAXMANN.COM 75 (BOM.) III) DR. MRS. K. B. KUMAR VS. ITO (2011) 12 TAXMANN .COM 318 (DEL.) 5. THE LD. ADDL. CIT APPEARING FOR THE REVENUE VEHE MENTLY OPPOSED THE CONTENTION OF THE ASSESSEE AND CONTENDED THAT AS PER SECTION 124( 2) OF THE ACT, WHEN A QUESTION ARISES IN RESPECT OF JURISDICTION AS TO WHETHER THE AO HAS JU RISDICTION TO ASSESS ANY PERSON, THEN THE QUESTION SHALL BE DETERMINED BY THE JURISDICTIONAL COMMISSIONER; AND, SINCE IN THIS CASE BOTH THE ITOS WERE UNDER THE SAME COMMISSIONER, QUESTION OF DISPUTE IN RESPECT OF JURISDICTION DOES NOT ARISE; AND HE ALSO DREW OUR ATTENTION TO S EC. 127(4) OF THE ACT AND CONTENDED THAT THE AO TO WHOM THE ASSESSMENT HAS BEEN TRANSFERRED NEED NOT REISSUE ANY NOTICE ALREADY ISSUED BY THE EARLIER AO AND, THEREFORE, HE DOES NO T WANT US TO INTERFERE WITH THE RE- ASSESSMENT ORDER PASSED BY THE AO. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE GONE T HROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT IT IS AN EX PARTE ORDER PASSED BY THE LD. CIT(A) WITHOUT ADJUDICATING THE LEGAL ISSUE AS WELL AS MERITS OF T HE CASE. HOWEVER, WE NOTE THAT THE LEGAL ISSUE WHICH HAS BEEN RAISED BEFORE US IS WHETHER TH E AO IE ITO WARD (4) (1) HAD JURISDICTION TO FRAME THE RE-ASSESSMENT ORDER WITHO UT SATISFYING THE CONDITION PRECEDENT AS STIPULATED IN SECTION 147 OF THE ACT [I.E, WITHOUT RECORDING REASON FOR RE-OPENING THE ASSESSMENT AND NOT ISSUING NOTICE U/S. 148 OF THE A CT] . FOR ADJUDICATING THIS LEGAL CHALLENGE WE NOTE THAT RELEVANT MATERIAL/DOCUMENTS ARE FILE D BEFORE US, THEREFORE, WE ARE INCLINED TO ADJUDICATE THIS ISSUE. WE NOTE THAT THE IMPUGNED O RDER OF THE AO IS A REASSESSMENT ORDER PASSED U/S. 147 READ WITH SECTION 143(3) OF THE ACT . QUIETESS TO ASSESSMENT PROCEEDINGS SUBJECT TO LIMITATION IS THE RULE. EXCEPTION TO TH IS RULE IS ONLY IF THE LAW PERMITS AO TO DO SO. ONCE AN ASSESSMENT ORDER U/S. 143(3) OF THE AC T OR EVEN AN INTIMATION U/S. 143(1) HAS BEEN PASSED, THEN ALSO AFTER THE LIMITATION PERIOD IS OVER, THE SAME CANNOT BE DISTURBED OR 4 ITA NOS.4 & 5/GAU/2019 AMOLAKSHAYA TRADE & CREDIT PVT . LTD., AYS- 2009-10 & 2010-11 REOPENED WITHOUT SATISFYING THE CONDITION PRECEDENT AS LAID IN THE STATUTE. FOR REOPENING AN ASSESSMENT OF AN ASSESSEE, THE CONDITION PRECEDENT PRESCRIBED U/S. 147 OF THE ACT IS THAT THE AO SHOULD HAVE REASON TO BELIEVE ESCAPEMENT OF INCOME WHICH MEANS THERE SHOULD BE FOUNDATION BASED ON INFORMATION AND BELIEF BASED ON REASON. THEREFORE, THE JURISDICTIONAL AO OF THE ASSESSEE HAS TO RECORD REASONS AS TO HOW HE FORMS THE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THIS IS THE CONDITION PRECEDENT WHICH HE SHOULD SATISFY BEFORE HE VENTURES TO REOPEN THE ASSESSMEN T WITHIN FOUR YEARS. HERE IN THIS CASE OF THE ASSESSEE, ITO, WARD-1(1), GUWAHATI ON 24.03.201 6 HAS RECORDED THE REASONS FOR REOPENING AND THEREAFTER HAS ISSUED SECTION 148 NOT ICE ON 29.03.2016. THEREAFTER HE TRANSFERRED THE CASE TO THE ITO, WARD-4(1) BY LETTE R DATED 01.06.2016. AND THE ITO, WARD- 4(1) NEITHER ISSUED ANY NOTICE U/S. 148 OF THE ACT NOR RECORDED THE REASONS FOR REOPENING THE ASSESSMENT HAS STRAIGHT AWAY ISSUED NOTICE UNDER S ECTION 143(2) OF THE ACT AND HAS FRAMED THE RE-ASSESSMENT ON 27.12.2016, WHICH ACTION ACCOR DING TO US, IS WITHOUT JURISDICTION. FOR COMING TO SUCH A CONCLUSION, WE RELY ON THE ORDER O F THE ITAT D BENCH IN DR. MRS. K. V. KUMAR VS. ITO (2011) 12 TAXMANN.COM 318 (DEL.), ACIT VS. RESHAM PETROTECH LTD. (2012 21 TAXMANN.COM 161 (AHD) AND CORONATION AGRO INDUSTRIES LTD. VS. DCIT (2017) 82 TAXMANN.COM 75 (BOM.). WE ALSO NOTE THAT HONBLE C ALCUTTA HIGH COURT IN THE CASE OF KUSUM GOEL VS. ITO 319 ITR 283 HAS HELD THAT- ONE AO CANNOT TRANSFER THE CASE TO ANOTHER AO WIT HOUT ORDER U/S. 127 OF THE ACT. 7. COMING TO THE CONTENTION OF LD. DR, WE NOTE THAT SECTION 124(2) OR SECTION 127(4) OF THE ACT DOES NOT COME TO THE RESCUE OF THE DEPARTME NT. COMING TO SECTION 124(2) OF THE ACT, WE NOTE IS IN RESPECT OF TRANSFER OF CASES WITHIN T HE JURISDICTIONAL CIT AS WELL AS IF THERE IS A DISPUTE BETWEEN TWO AOS FALLING UNDER THE JURISDICT ION OF DIFFERENT COMMISSIONER, THE PROCEDURE THAT HAS TO BE FOLLOWED IS SPELT OUT. IN THE PRESENT CASE ADMITTEDLY THERE IS NO ORDER PASSED BY THE JURISDICTIONAL COMMISSIONER TRA NSFERRING THIS CASE FROM ITO, WARD-1(1) TO THE ITO, WARD-4(1); AND MOREOVER THE ITO, WARD- 1 WHILE TRANSFERRING THE RE-ASSESSMENT TO ITO, WARD-4(1) ADMITS THAT HE DOES NOT HAVE TER RITORIAL JURISDICTION OVER THE ASSESSEE. AND THE LD. DRS CONTENTION JUSTIFYING THE ACTION OF ITO-4(1) IN NOT AGAIN ISSUING NOTICE U/S. 148 NOR RECORDING REASONS BY POINTING OUT SEC TION 127(4) OF THE ACT, WE CLARIFY THAT SEC. 127(4) OF THE ACT COMES INTO OPERATION ONLY WH EN THE TRANSFER OF ASSESSMENT IS ORDERED 5 ITA NOS.4 & 5/GAU/2019 AMOLAKSHAYA TRADE & CREDIT PVT . LTD., AYS- 2009-10 & 2010-11 BY THE COMMISSIONER U/S. (1) AND (2) OF THE SECTION 127 OF THE ACT AND NOT OTHERWISE. IT IS NOT THE CASE OF THE REVENUE THAT THERE HAS BEEN AN ORDER PASSED BY THE COMMISSIONER U/S. 127 OF THE ACT TRANSFERRING THE ASSESSMENT OF ASSE SSEE FROM ITO WARD (1) (1) TO ITO-WARD 4(1); AND IT IS NOT THE CASE OF THE REVENUE THAT IT O, WARD-4(1) WHO PASSED THE IMPUGNED REASSESSMENT ORDER HAD ISSUED NOTICE U/S. 148 AND H AS RECORDED THE REASONS FOR REOPENING AS REQUIRED UNDER SECTION 147 OF THE ACT. IN THE LIGH T OF THE UNDISPUTED FACTS STATED ABOVE, WE HOLD THAT ITO, WARD 4(1) HAS USURPED THE JURISDICTI ON WITHOUT SATISFYING THE CONDITION PRECEDENT AS PRESCRIBED U/S. 147 OF THE ACT RESULTI NG IN THE IMPUGNED ORDER BEING NULL IN THE EYES OF LAW AND, THEREFORE, WE QUASH THE IMPUGNED REASSESSMENT ORDER PASSED BY THE ITO, WARD-4(1) IN THIS CASE. SINCE BOTH THE APPEALS ARE ON THE SAME FACTS AND THE LD.DR WAS NOT ABLE TO POINT OUT ANY CHANGE IN FACTS OR LAW, THE A SSESSEE SUCCEEDS ON THE LEGAL ISSUE IN BOTH THE APPEALS. 8. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 12TH JUNE, 2020. SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :12TH JUNE, 2020 JD.(SR.P.S.) 6 ITA NOS.4 & 5/GAU/2019 AMOLAKSHAYA TRADE & CREDIT PVT . LTD., AYS- 2009-10 & 2010-11 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. AMOLAKSHAYA TRADE & CREDIT PVT. LTD., ROOM NO. 2006, RAMKUMAR ACRADE, CHATRIBARI ROAD, GUWAHATI-78 1 001. 2 RESPONDENT ITO, WARD-4(1), GUWAHATI 3. 4. CIT(A), GUWAHATI-2, GUWAHATI CIT-, GUWAHATI 5. DR, ITAT, GUWAHATI. / TRUE COPY, BY ORDER, SENIOR PVT. SECY.