IDEA CELLULAR LTD, MUMBAI V. DCIT 3(2), MUMBAI

ITA 1028/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4070 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 17-03-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 06-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C S NAIK
• Assessee Lawyers: RONAK G DOSHI
• Keywords: Reason to believe
• Section: 143(3); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.1028/M/2013 ASSESSMENT YEAR: 2003-04 M/S. IDEA CELLULAR LTD., 5 TH FLOOR, WINDSOR, OFF. CST ROAD, NEAR VIDYANAGARI, KALINA, CANTACRUZ (E), MUMBAI- 400 098 PAN: AAACB2100P VS. DY. COMMISSIONER OF INCOME TAX - 3(2), MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI RONAK G. DOSHI, A.R. REVENUE BY : SHRI B.C.S. NAIK, D.R. DATE OF HEARING : 29.10.2015 DATE OF PRONOUNCEMENT : 03.02.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 26.11.2012 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2003-04. 2. THE ASSESSEE HAS AGITATED THE IMPUGNED ADDITIONS WHICH HAVE BEEN MADE PURSUANT TO REOPENING OF THE ASSESSMENT UNDER SECTI ON 147 OF THE ACT. AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE HAS STRESSED T HAT THE REOPENING IN THIS CASE IS BAD IN LAW. HE HAS INVITED OUR ATTENTION TO THE OPENING LINES OF THE ASSESSMENT ORDER WHEREIN IT HAS BEEN SPECIFICALLY M ENTIONED THAT THE ORIGINAL ASSESSMENT PROCEEDINGS IN THIS CASE WERE CONDUCTED UNDER SECTION 143(3) OF THE ACT AND THE ORIGINAL ASSESSMENT ORDER WAS PASSE D ON 31.01.06 DETERMINING THE TOTAL LOSS OF RS.1,74,69,87,876/-. SUBSEQUENTL Y, PROCEEDINGS UNDER SECTION ITA NO.1028/M/2013 M/S. IDEA CELLULAR LTD. 2 147 OF THE ACT WERE INITIATED AND NOTICE UNDER SECT ION 148 WAS SENT ON 30.03.10 AND SERVED ON THE ASSESSEE ON 31.03.10. T HE LD. A.R. OF THE ASSESSEE HAS STRESSED THAT THE REOPENING IN THIS CASE WAS DO NE AFTER FOUR YEARS FROM THE RELEVANT ASSESSMENT YEAR 2003-04. HE, IN THIS RESP ECT, HAS SUBMITTED THAT THE THAT THE NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE BEYOND THE PERIOD OF FOUR YEARS FROM THE RELEVANT ASSESSMENT YEAR, WH EREAS, THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND T RULY ALL MATERIAL FACTS DURING THE ORIGINAL ASSESSMENT PROCEEDINGS. HENCE THE REOP ENING OF ASSESSMENT WAS BAD IN LAW IN VIEW OF THE FIRST PROVISO TO SECTION 147 OF THE ACT. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HA VE ALSO GONE THROUGH THE RECORDS. AS PER THE PROVISIONS OF SECTION 147 OF THE ACT, THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) IS AUTH ORIZED TO REOPEN THE ASSESSMENT PROCEEDINGS, IF HE HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE COURTS OF LAW HA VE TIME AND AGAIN HELD THAT SUCH A REASON TO BELIEVE THAT THE INCOME OF THE ASS ESSEE HAS ESCAPED ASSESSMENT SHOULD BE BASED ON SOME MATERIAL WHICH COMES TO THE KNOWLEDGE OF THE AO. AS PER THE 1 ST PROVISO TO SECTION 147 OF THE ACT, THE ASSESSMENT ONCE COMPLETED UNDER SECTION 143(3) CANNOT BE REOPENED UNDER SECTI ON 147 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH A SSESSMENT YEAR BECAUSE OF ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR THE COMPLETION OF ASSESSMENT. T HE SAID 1 ST PROVISO TO SECTION 147 FOR THE SAKE OF CONVENIENCE IS REPRODUC ED AS UNDER: PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTIO N (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT Y EAR, NO ACTION SHALL HE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS F ROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON TH E PART OF THE ASSESSEE TO MAKE SUCH RETURN UNDER SECTION 139 OR IN RESPONSE TO A N OTICE ISSUED UNDER SUB-SECTION (1)OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT Y EAR. ITA NO.1028/M/2013 M/S. IDEA CELLULAR LTD. 3 4. FROM THE REASONS RECORDED BY THE AO, COPY OF WHI CH IS AVAILABLE AT PAGE 58 OF THE PAPER BOOK, IT REVEALS THAT THERE IS NO W HISPER ABOUT WHAT MATERIAL FACTS THE ASSESSEE HAD FAILED TO DISCLOSE FULLY AND TRULY. THE REOPENING HAS BEEN DONE ON THE BASIS OF FACTS AND MATERIAL WHICH WERE ALREADY ON RECORD. THERE IS NO ALLEGATION THAT THERE WAS ANY FAILURE O N THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ANY MATERIAL FACT, NECESSA RY FOR THE COMPLETION OF ASSESSMENT. EVEN, THERE IS NO SUCH MENTION OF ANY FAILURE ON THE PART OF ASSESSEE TO DISCLOSE ANY MATERIAL FACT IN THE NOTIC E DATED 30.03.10 SERVED ON THE ASSESSEE UNDER SECTION 148 OF THE ACT. THE AO IN T HE REASONS RECORDED HAS MENTIONED ABOUT THE FACT AND CIRCUMSTANCES ALREADY AVAILABLE ON THE RECORD. THE REOPENING IN THIS CASE, THUS, IS HIT BY THE 1 ST PROVISO TO SECTION 147 OF THE ACT AS DISCUSSED ABOVE. 5. IN VIEW OF THE ABOVE, THE VERY REOPENING IN THIS CASE IS BAD IN LAW AND THE SAME IS SET ASIDE. IN VIEW OF THE SETTING ASID E OF THE REOPENING, THE CONSEQUENTIAL ADDITIONS ARE NOT SUSTAINABLE IN THE EYES OF LAW AND THE SAME ARE ACCORDINGLY ORDERED TO BE DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03.02.2016. SD/- SD/- (B.R. BASKARAN) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 03.02.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.