Habeeb Tanning Company, Gudiyatham V. DCIT, Vellore

ITA 1028/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68860 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-11-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 16-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI IRS
• Assessee Lawyers: V CHANDRAS HEKARAN
• Keywords: Retrospective amendment; Difference of opinion; Change of opinion
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI V.DURGA RAO, JUDICIAL MEMBER ITA NO. 1028/MDS/2013 ASSESSMENT YEAR : 2004-05 HABEEB TANNING COMPANY, RAILWAY STATION ROAD, AMMANANKUPPAM VILLAGE, GUDIYATHAM, R S POST, GUDIYATHAM. PAN AAAFH0373B. VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-I, VELLORE. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.CHANDRAS HEKARAN, CA RESPONDENT BY : SHRI T.N.BETGERI, I RS, CIT DATE OF HEARING : 18 TH NOVEMBER, 2013 DATE OF PRONOUNCEMENT : 18 TH NOVEMBER, 2013 O R D E R PER DR.O.K.NARAYANAN, VICE PRESIDENT THIS APPEAL FILED BY THE ASSESSEE RELATES TO THE ASSESSMENT YEAR 2004-05. THE APPEAL IS DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-IX AT CHENNAI ITA 1028/13 :- 2 -: DATED 28.3.2013. THE APPEAL ARISES OUT OF THE ASSE SSMENT COMPLETED UNDER SEC.143(3), READ WITH SEC.147 OF TH E INCOME-TAX ACT, 1961. 2. THE GROUNDS RAISED BY THE ASSESSEE IN THE PRESEN T APPEAL READ AS BELOW : 1. ON FACTS AND CIRCUMSTANCES OF THE CASE, THE COMMISSIONER (APPEALS) ERRED IN HOLDING THAT THE ORDER U/S 147 RWS 143(3) DT 19/12/2010 OF THE ASSESSING OFFICER WAS RIGHTLY MADE. RE ASSESSMENT I S BAD IN LAW BOTH ON JURISDICTION AS WELL AS ON MERIT S. 2. THE ORDER OF THE LEARNED COMMISSIONER (APPEALS ) IS CONTRARY TO LAW AND FACTS OF THE CASE. 3. THE LEARNED COMMISSIONER (APPEALS) FAILED TO UNDERSTAND THAT THE ACTION OF THE LEARNED ASSESSING OFFICER IN RE OPENING THE ASSESSMENT ALREADY MADE, ON GROUNDS OF ESCAPEMENT OF INCOME IS WITHOUT JURISDICTION. NOTICE U/S 148 WAS ISSUED ON 29/03/2 010 WHICH WAS BEYOND THE FOUR YEAR TIME LIMIT, SINCE TH E TIME LIMIT IS OVER BY 31/03/2009. 4. THE LEARNED COMMISSIONER (APPEALS) CONFIRMATIO N OF ASSESSING OFFICERS ORDER THAT THESE ISSUES CAME TO LIGHT ON SUBSEQUENT VERIFICATION IS INCORRECT. IT IS PURE CHANGE OF OPINION AMOUNTING TO REVIEW OF HIS EARLIE R CONCLUSIONS. RE OPENING PROVISIONS INITIATED IS BA D IN LAW, AS DETAILS ABOUT DEPB/DFRC SALES WERE PART OF ORIGINAL ASST RECORDS. THE ASSESSING OFFICER SCRUT INY ASST U/S 143 DT 18/12/2006, HAS MADE THE ORDER IN T HE LIGHT OF LAW PREVAILING THAT YEAR-NOTWITHSTANDING T HE FACT THAT IT WAS MADE AFTER RETROSPECTIVE AMENDMENT BY TAXATION LAWS. ITA 1028/13 :- 3 -: 5. THE LEARNED COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT THERE IS NO RECORD OF ANY OMISSION NOR THERE IS ANY OMISSION TO DISCLOSE MATERIAL FACTS. RETROSPECTIVE AMENDMENTS CANNOT BE APPLIED U/S 147 AS NO ASSESSMENTS WERE PENDING. 6. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COMMISSIONER (APPEALS) FAILED TO TAKE COGNIZANCE OF THE SUPREME COURT IN TOPMAN EXPORTS V CIT (2012) 342 ITR 49 (SC) AND THE GUJARAT HIGH COURT IN AVANI EXPORTS V CIT (2012) 348 ITR 391 (GUJ) AND THE BOMBAY HIGH COURT IN VIJAYA SILK HOUSE V UNION OF INDIA (2012) 349 ITR 566 (BOMBAY) DECISIONS THAT RETROSPECTIVE AMENDMENTS IN NOT VALID IN LAW. 3. AS SEEN FROM THE GROUNDS RAISED BY THE ASSESSEE, THE ISSUE IS REGARDING TAXABILITY OF PROCEEDS GENERATED IN TH E HANDS OF THE ASSESSEE ON SALE OF DEPB/DFRC, ENTITLED TO IT AS AN EXPORTER. 4. HERE, THE IMPUGNED ASSESSMENT YEAR IS 2004-05. THE LAW RELATING TO TAXABILITY OF THE ABOVE STATED PROCEEDS HAS BEEN BROUGHT INTO STATUTE BOOK THROUGH THE TAXATION LAWS (AMENDMENT) ACT, 2005. IT IS IN THE LIGHT OF THIS AMENDED LAW THAT THE ASSESSING AUTHORITY HAS REOPENED THE IMPUGNED A SSESSMENT. OTHERWISE, THE ASSESSMENT HAS ORIGINALLY BEEN COMPL ETED UNDER SEC.143(3). AS RIGHTLY ARGUED BY THE ASSESSEE, ALL THE DETAILS HAVE BEEN FURNISHED BY THE ASSESSEE AT THE FIRST IN STANCE ITSELF IN THE COURSE OF ASSESSMENT PROCEEDINGS UNDER SEC.143( 3). THE ITA 1028/13 :- 4 -: REOPENING WAS RESORTED TO ONLY FOR THE REASON OF AM ENDMENT BROUGHT IN BY THE AMENDMENT ACT. IN THIS RESPECT, THE HONBLE BOMBAY HIGH COURT THROUGH THEIR ORDER DATED 1 ST JULY, 2011, HAS HELD IN THE CASE OF CIT VS. M/S. K. MOHAN & CO. (EX PORTS) (REGD.), (INCOME-TAX APPEAL (L) NO.2347 OF 2010 AN D INCOME-TAX APPEAL NO.1263 OF 2011) THAT IF THE LEGISLATURE AME NDS THE PROVISIONS OF THE ACT WITH RETROSPECTIVE EFFECT, IT CANNOT BE SAID THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS RELEVANT FOR THE PURPO SE OF ASSESSMENT. IN THE PRESENT CASE, THE REOPENING HAS BEEN MADE AF TER EXPIRY OF 4 YEARS FROM THE END OF THE RELEVANT PREVIOUS YEAR. THEREFORE, ON THIS GROUND ITSELF, THE IMPUGNED ASSESSMENT IS NOT SUSTAINABLE IN LAW. 5. SECONDLY, THE HONBLE GUJARAT HIGH COURT IN THE CASE OF AVANI EXPORTS & OTHERS VS. CIT (348 ITR 391) HAS HE LD THAT RETROSPECTIVE AMENDMENT IS NOT VALID IN LAW. 6. THEREFORE, THERE IS NO JUSTIFICATION FOR THE ASS ESSING OFFICER TO REOPEN THE ASSESSMENT FOR THE PURPOSE OF BRINGIN G THE DEPB/DFRC SALE PROCEEDS TO TAXATION. THE ORDERS OF THE LOWER AUTHORITIES IN THIS REGARD ARE SET ASIDE. ITA 1028/13 :- 5 -: 7. IN RESULT, THE APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 18 TH OF NOVEMBER, 2013 AT CHENNAI. SD/- SD/- (V.DURGA RAO) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 18 TH NOVEMBER, 2013. MPO* COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GF.