M/s. Aavishkar Industries, Daman V. The ACIT.,Vapi Circle, Vapi

ITA 1114/AHD/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1648 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-04-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 22-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: D J SHUKLA
• Keywords: Reopening of assessment; Audit objection; Tangible material; Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, A HMEDABAD , (BEFORE SHRI RAJPAL YADAV, J.M. & SHRI ANIL CHATURV EDI, A.M.) ITA NO. 1114/AHD/2012 (ASSESSM ENT YEAR: 2005-06) M/S. AAVISHKAR INDUSTRIES 1, LALJI ESTATE NO.2, PLOT NO.220/22, NEW OIDC, DABHEL, DAMAN 396210 VS. ASST. COMMISSIONER OF INCOME TAX VAPI CIRCLE, VAPI PAN NO. AAGFA4489H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D. J. SHUKLA, A.R. RESPONDENT BY : SHRI DINESH SINGH, SR. D.R. DATE OF HEARING : 11 -04-2 016 DATE OF PRONOUNCEMENT : 11-05-2016 ( )/ ORDER PER ANIL CHATURVEDI, ACCOUNTANT MEMBER THIS APPEAL FILED BY ASSESSEE IS AGAINST THE ORDER OF CIT(A), VALSAD, DATED 29.01.2012 FOR THE ASSESSMENT YEAR 2005-06 . 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER: 3. THE ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING OF AEROSOL COMPONENTS. ASSESSEE FILE D ITS RETURN OF INCOME FOR A.Y. 2005-06 ON 08.08.2005 DECLARING TOTAL INCOME OF RS. 6,76,290/-. INITIALLY THE ASSESSMENT WAS FRAMED U/S.143(3) VIDE ORDER DATED 2 3.03.2007 AND THE TOTAL INCOME WAS DETERMINED AT RS.6,76,290/-. THEREAFTER , NOTICE U/S.148 OF THE ACT WAS ISSUED AND SERVED ON THE ASSESSEE. IN RESPONSE TO THE PROCEEDINGS U/S.148 OF THE ITA NO.1114/AHD/12 A.Y. 2005-06 (M/S. AAVI SHKAR INDUSTRIES VS. ACIT) 2 ACT, IT WAS SUBMITTED THAT THE RETURN FILED ON 08.0 8.2005 DECLARING TOTAL INCOME AT RS.6,76,290/- BE CONSIDERED AS RETURN FILED IN COMP LIANCE OF THE NOTICE U/S.148 OF THE ACT. THEREAFTER, ASSESSMENT WAS FRAMED U/S.143 (3) R.W.S. 147 OF THE ACT VIDE ORDER DATED 13.12.2010 AND THE TOTAL INCOME WAS DET ERMINED AT RS.12,78,829/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED TH E MATTER BEFORE THE LD. CIT(A) WHO VIDE ORDER DATED 29.01.2012 (IN APPEAL NO. CIT( A) / VLS/257/10-11) DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD. CIT(A) , ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE LEARNED C.I.T. (A) ERRED IN ACCEPTING THE REOPENING OF ASSESSMENT U/S.147 OF TH E IT ACT 1961. 2. THE LEARNED C.I.T. (APPEALS) OUGHT TO HAVE DE CLARED REOPENING OF THE ASSESSMENT U/S.147 BAD IN LAW AND NULL AND VOID. 4. BEFORE US, LD. A.R. REITERATED THE SUBMISSIONS MADE BEFORE THE A.O. AND LD. CIT(A) AND FURTHER SUBMITTED THAT THE ASSESSMENT HA S BEEN REOPENED ONLY ON THE BASIS OF NO OPINION OF AUDIT PARTIES AND THAT THE REOPENING ON THE BASIS OF AUDIT PARTIES OPINION IS NOT VALID IN LAW FOR WHICH HE P LACED RELIANCE ON THE DECISION IN THE CASE OF INDIAN AND EASTERN NEWSPAPER SOCIETY VS . CIT (1979) 119 ITR 996 (SC), ADANI EXPORTS VS. DCIT (ASSESSMENTS) (1999) 2 40 ITR 224 AND AIR INDIA VS. V. K. SRIVASTAVA CIT, (1995) 213 ITR 739. HE FURTH ER SUBMITTED THAT THERE WAS NO FRESH MATERIAL DISCOVERED AFTER THE COMPLETION OF O RIGINAL ASSESSMENT U/S.143(3) OF THE ACT AND THE REOPENING OF THE ASSESSMENT WAS MER ELY ON ACCOUNT OF CHANGE OF OPINION AND THE CHANGE OF OPINION DOES NOT CONFER A NY JURISDICTION FOR REOPENING OF COMPLETED ASSESSMENT EVEN WITHIN THE PERIOD OF FOUR YEARS. HE ALSO PLACED RELIANCE ON THE DECISION OF HONBLE APEX COURT IN T HE CASE OF CIT VS. KELIVNATOR OF INDIA LTD. (2010) 320 ITR 561 (SC). HE POINTED TO THE REASONS FOR REOPENING WHICH WAS INDICATED TO THE ASSESSEE VIDE LETTER DAT ED 08.12.2009 AND WHICH IS PLACED AT PAGE NO.6 OF THE PAPER BOOK. HE THEREFOR E SUBMITTED THAT REOPENING IN ITA NO.1114/AHD/12 A.Y. 2005-06 (M/S. AAVI SHKAR INDUSTRIES VS. ACIT) 3 THE PRESENT CASE IS BAD AND THEREFORE THE ORDER OF A.O. NEEDS TO BE QUASHED. LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDERS OF A.O. AND LD. CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT IN RESPONSE TO THE ORIGINAL RETURN OF INCOME FOR A.Y. 05-06 THAT WAS FILED BY ASSESSEE, ASSESSMENT WAS FRAMED U/S. 143(3) OF THE ACT AND THE NOTICE FOR RE-OPENING U/S. 148 HAS BEEN ISSUED ON 05.10.2010, I.E. WITHIN A PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE JURISDICTION TO REASSESS THE ASSESSEE UNDER THE ACT CAN ONLY ARISE IF THE CONDITIONS SPECIFIED IN SECTION 147 OF THE ACT IS SATISFIED. THE CONDITIONS THAT ARE TO BE FULFILLED ARE THAT THE A.O MUST HAVE REASON TO BELIEVE THAT INCOME CHA RGEABLE TO TAX FOR THE ASSESSMENT YEAR CONCERNED HAS ESCAPED ASSESSMENT AN D SUCH REASON TO BELIEVE MUST BE BASED UPON SOME TANGIBLE MATERIAL LEADING T O THE BELIEF. THUS IN THE ABSENCE OF CUMULATIVE SATISFACTION OF REASON TO BEL IEVE AND IN THE ABSENCE OF ANY INCOME CHARGEABLE TO TAX ESCAPING ASSESSMENTS OF TH E A.O IS NOT EMPOWERED WITH JURISDICTION TO REOPEN THE ASSESSMENT. THE PROVIS ION FOR REOPENING OF ASSESSMENT U/S.147 OF THE ACT SPECIFICALLY REQUIRES THAT IT IS THE AO WHO MUST HAVE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT. THE BELIEF MUST BE OF THE AO HIMSELF AND NOT OF ANYBODY ELSE. IN T HE PRESENT CASE, THE REASONS DISCLOSED BY THE A.O VIDE INTIMATION DATED 08/12/20 09 (WHICH IS PLACED AT PAGE NO.6 OF PAPER-BOOK), WHICH HAS ENABLED HIM TO REACH THE BELIEF THAT THERE WAS ESCAPEMENT OF INCOME WAS ON THE BASIS OF OBJECTION RAISED BY AUDIT PARTY. THUS, IT CAN BE SEEN THAT THERE WAS NO NEW MATERIAL BEFORE AO WHICH PROMPTED HIM TO ISSUE NOTICE U/S.148 OF THE ACT BUT, ON THE CONTRAR Y, THE REASONS WAS ON THE BASIS OF AUDIT OBJECTIONS. ITA NO.1114/AHD/12 A.Y. 2005-06 (M/S. AAVI SHKAR INDUSTRIES VS. ACIT) 4 6. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL O N RECORD TO CONTROVERT THE SUBMISSIONS OF LD.AR. IN SUCH A SITUATION AND AFTE R CONSIDERING THE TOTALITY OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT THE IMPUGN ED REASSESSMENT ORDER PASSED BY THE A.O CANNOT BE UPHELD. WE THEREFORE QUASH THE R E-ASSESSMENT ORDER OF THE AO THAT IS PASSED ON 13/12/2010 U/S.143(3) R.W.S. 147 OF THE IT ACT, 1961, AND THUS THE GROUNDS OF ASSESSEE ARE ALLOWED. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON 11- 05 2016 SD/- SD/ - ( RAJPAL YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT M EMBER AHMEDABAD; DATED 11/05/2016 S K SINHA/TC NAIR COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) VALSAD 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER //TRUE COPY// DEPUTY/ASSTT.REGISTRAR ITAT, AHMEDABAD 1.DATE OF DICTATION 11.04.2016 & AS PER FORMAT 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E OTHER MEMBER 12 -04-2016/11.5.16 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 11.5.16 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 11.5.16 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER