Vishvaraj Agencies Private Limited, Pune V. Assistant Commissioner of Income-tax, Circle - 7, Pune

ITA 1142/PUN/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6855 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 26-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Assessee Lawyers: K SRINIVASAN
• Keywords: Reopening of assessment; Reassessment proceedings; Set aside
• Section: 143(3); 139(1); 148; 139

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE , BEFORE SHRI VIKAS AWASTHY, JM . / ITA NO . 114 2 /P U N/201 8 / ASSESSMENT YEAR : 20 0 5 - 06 VISHVARAJ AGENCIES PVT. LTD., 1318, J.M. ROAD, SHIVAJINAGAR, PUNE 411005 PAN : AAACV5537C ....... / APPELLANT / V/S. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 7, PUNE / RESPONDENT ASSESSEE BY : SHRI K. SRINIVASAN REVENUE BY : SHRI M.K. VERMA / DATE OF HEARING : 1 0 - 01 - 2019 / DATE OF PRONOUNCEMENT : 28 - 0 2 - 2019 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 5, PUNE DATED 23 - 04 - 2018 FOR THE ASSESSMENT YEAR 20 0 5 - 06. THE ASSESSEE IN APPEAL HAS ASSAILED THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN UPHOLDING THE VALIDITY OF REASSESSMENT PROCEEDINGS U/S. 148 OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT) AND ALSO THE ADDITION ON ACCOUNT OF DISALLOWANCE OF WEIGHTED 2 ITA NO . 1142/PUN/2018, A.Y. 2005 - 06 DEDUCTION U/S. 35(1)(II) OF THE ACT CLAIMED BY THE ASSESSEE IN RESPECT OF DONATIONS MADE TO SCIENTIFIC RESEARCH INSTITUTE. 2. SHRI K. SRINIVASAN APPEA RING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSMENT WAS REOPENED IN THE CASE OF ASSESSEE FOR ASSESSMENT YEAR 2005 - 06. THE ASSESSEE FILED OBJECTIONS AGAINST REOPENING OF ASSESSMENT, WITHOUT DECIDING THE OBJECTIONS. THE ASSESSING OFFICER PASSED AS SESSMENT ORDER IN VIOLATION OF LAW LAID DOWN BY THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. DCIT REPORTED AS 259 ITR 19. NARRATING THE SEQUENCE OF EVENTS, THE LD. AR FURNISHED THE FOLLOWING CHART : EVENTS DATES ORIGINAL RETURN OF INCOME FILED ON 30/10/2005 REGULAR ASSESSMENT ORDER U/S. 143(3) PASSED ON 27/11/2007 NOTICE U/S. 148 ISSUED DATED 28/03/2012 RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 148 FILED ON 01/05/2012 REQUEST FOR COPY OF REASONS RECORDED MADE BY APPELLANT 01/05/2012 COPY OF REASONS RECORDED FURNISHED BY AO 02/01/2013 LETTER TO AO REGARDING ORDER ON OBJECTIONS 03/01/2013 OBJECTIONS ON PROCEEDINGS U/S. 148 14/01/2013 FINAL ASSESSMENT ORDER U/S. 143(3) R.W.S. 147 PASSED ON 11/03/2013 2.1 THE LD. AR SUBMITTED THAT THE NOTICE U/S. 148 DATED 28 - 03 - 2012 WAS SERVED ON ASSESSEE ON 03 - 04 - 2012 AS IS EVIDENT FROM POSTAL SEAL ON THE ENVELOPE AT PAGE 4 OF THE PAPER BOOK. THE ASSESSEE WITHIN A PERIOD OF 30 DAYS FROM THE DATE OF RECEIPT OF NOTICE VIDE LETTER DATED 30 - 04 - 2012 CONVEYED THAT THE RETURN FILED U/S. 139(1) FOR THE IMPUGNED ASSESSMENT YEAR MAY BE CONSIDERED AS RETURN IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. THE ASSE SSEE VIDE SAME LETTER HAD REQUESTED THE ASSESSING OFFICER TO FURNISH REASONS FOR ISSUANCE OF NOTICE U/S. 148 OF THE ACT. THE SAID LETTER OF THE ASSESSEE IS AT PAGE 5 OF THE PAPER BOOK. THE ASSESSING OFFICER AFTER 3 ITA NO . 1142/PUN/2018, A.Y. 2005 - 06 MORE THAN A PERIOD OF 8 MONTHS ON 01 - 01 - 2013 PROVIDE D COPY OF REASONS RECORDED FOR REOPENING THE ASSESSMENT TO ASSESSEE. THE ASSESSEE THEREAFTER ON 14 - 01 - 2013 FILED OBJECTIONS AGAINST THE REOPENING. THE ASSESSEE ALSO MADE A WRITTEN REQUEST TO ASSESSING OFFICER FOR INSPECTION OF CASE FILE S. THE ASSESSING OFFICER WITHOUT DISPOSING OF OBJECTIONS RAISED BY ASSESSEE AND WITHOUT PROVIDING ANY OPPORTUNITY TO ASSESSEE TO INSPECT THE CASE FILE , PASSED ASSESSMENT ORDER U/S. 143(3) R.W.S.147 OF THE ACT ON 11 - 03 - 2013. THE ACTION OF ASSESSING OFFICE R IN PASSING THE ASSESSMENT ORDER WITHOUT FIRST DISPOSING OF OBJECTIONS AGAINST REOPENING BY SEPARATE ORDER IS AGAINST THE LAW LAID DOWN BY HONBLE SUPREME COURT OF INDIA IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. DCIT (SUPRA). THE LD. AR FURTHER SUB MITTED THAT THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BAYER MATERIAL SCIENCE PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX REPORTED AS 382 ITR 333 HAS HELD THAT ASSESSMENT ORDER PASSED WITHOUT DISPOSING OF OBJECTIONS FILED BY ASSESSEE AGAINST REASONS FOR REOPENING , IS UNSUSTAINABLE. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KSS PETRON PRIVATE LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX IN INCOME TAX APPEAL NO. 224 OF 2014 DECIDED ON 03 - 10 - 2016 . 2.2 THE LD . AR SUBMITTED THAT EVEN ON MERITS THE ASSESSEE HAS STRONG CASE. THE ASSESSEE HAD MADE DONATION OF RS.10,00,000/ - TO SHRI AUROBINDO INSTITUTE OF SCIENTIFIC RESEARCH INSTITUTE AND HAD CLAIMED WEIGHTED DEDUCTION U/S. 35(1)(II) OF THE ACT. THE ASSESSING OFF ICER DENIED BENEFIT OF DEDUCTION ONLY ON THE GROUND THAT THE DONATIONS MADE BY ASSESSEE ARE NOT TO THE INSTITUTE APPROVED IN THE CENTRAL GOVERNMENT NOTIFICATION. THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE FINDINGS OF ASSESSING OFFICER AND DENIED THE BENEFIT OF DEDUCTION TO THE ASSESSEE. THE LD. AR POINTED THAT THE ASSESSEE HAD MADE DONATION OF RS.10,00,000/ - TO SHRI AUROBINDO INSTITUTE OF SCIENTIFIC RESEARCH INSTITUTE 4 ITA NO . 1142/PUN/2018, A.Y. 2005 - 06 VIDE RECEIPT NOS. 125 AND 126 AT PAGES 37 AND 38 OF THE PAPER BOOK. THE GAZETT E NOTIFICATION OF REVENUE DEPARTMENT IS AT PAGE 39 OF THE PAPER BOOK . THE NAME OF AFORESAID RESEARCH INSTITUTE IS MENTIONED IN THE NOTIFICATION. THE DISPUTE AROSE AS IN THE RECEIPTS, OFFICE ADDRESS OF RESEARCH INSTITUTE WAS MENTIONED AS MUMBAI AND GUJARAT AND IN THE GAZETTE NOTIFICATION ADDRESS OF RESEARCH INSTITUTE IS OF PONDICHERY . THE ASSESSEE FILED CONFIRMATION LETTER FROM SHRI AUROBINDO INSTITUTE OF APPLIED SCIENTIFIC RESEARCH TRUST CLARIFYING THAT SHRI A UROBINDO INSTITUTE OF APPLIED SCIENTIFI C RESEARCH TRUST, MUMBAI AND GUJARAT ARE THE OFFICES OF SAME TRUST AND ARE NOT SEPARATE TRUST/INSTITUTES. THE CONFIRMATION IS AT PAGE 40 OF THE PAPER BOOK. 3. ON THE OTHER HAND SHRI M.K. VERMA REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE VALID ITY OF REASSESSMENT PROCEEDINGS , AS WELL AS THE ADDITION ON MERITS. THE LD. DR SUBMITTED THAT AS PER NOTICE U/S. 148 , THE ASSESSEE WAS REQUIRED TO FILE RETURN OF INCOME WITHIN A PERIOD OF ONE MONTH. THE ASSESSEE HAS FILED LETTER BEFORE THE ASSESSING OFFI CER ON 01 - 05 - 2012 TO TREAT THE RETURN FILED U/S. 139 AS RETURN IN RESPONSE TO NOTICE U/S. 148 I.E. AFTER THE PERIOD OF ONE MONTH. HENCE, THE ASSESSEE CANNOT SAY THAT THE CONDITIONS LAID DOWN IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. DCIT (SUPRA) W ER E NOT FOLLOWED BY THE ASSESSING OFFICER . THE ASSESSEE WAS ALSO UNDER OBLIGATION TO FILE RETURN OF INCOME WITHIN THE TIME MENTIONED IN NOTICE U/S. 148 OF THE ACT. TO SUPPORT HIS CONTENTIONS , THE LD. DR PLACED RELIANCE ON THE FOLLOWING DECISIONS : I . ABHISHEK JAIN VS. INCOME TAX OFFICER, 405 ITR 1 (DELHI); II . VENKATESAN RAGHURAM PRASAD VS. INCOME TAX OFFICER, 94 TAXMANN.COM 249 (MADRAS); III . HOME FINDERS HOUSING LTD. VS. INCOME TAX OFFICER, 256 TAXMAN 59 (SC). 5 ITA NO . 1142/PUN/2018, A.Y. 2005 - 06 3.1 AS REGARDS THE MERITS OF ADDITION THE LD. DR SUBMITTED THAT AS PER NOTIFICATION OF REVENUE DEPARTMENT , THE APPROVED INSTITUTE IS SHRI AUROBINDO INSTITUTE OF APPLIED SCIENTIFIC RESEARCH TRUST, PONDICHERY , WHEREAS , THE ASSESSEE HAS GIVEN DONATION TO SHRI ARVINDO INSTITUTE OF APPLIED SCIENTIFIC RESEARCH TRUST, GUJARAT. THESE ARE TWO SEPARATE TRUSTS . A PERUSAL OF RECEIPT AT PAGES 37 AND 38 OF THE PAPER BOOK SHOWS THAT THERE IS NO MENTION OF PONDICHERY. ON RECEIPTS THERE IS NO MENTION EITHER THAT THE INSTITUTE/TRUST IS THE BRANCH OF SHRI AUROBINDO INS TITUTE OF APPLIED SCIENTIFIC RESEARCH TRUST, PONDICHERY. 4. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . THE FIRST GROUND OF APPEAL BY THE ASSESSEE IS AGAINST VALIDITY OF REASSESSMENT PROCEEDINGS. A PERUSAL OF SEQUENCE OF EVENTS NARRATED IN PARA 2 ABOVE WOULD SHOWS THAT THE NOTICE U/S. 148 WAS ISSUED TO THE ASSESSEE ON 28 - 03 - 2012. A PERUSAL OF ENVELOP AT PA GES 3 AND 4 OF THE PAPER BOOK REVEAL THAT THE NOTICE WAS DISPATCHED ON 30 - 03 - 2012 AND WAS DELIVERED TO ASSESSEE ON OR AFTER 03 - 04 - 2012. THE ASSESSEE VIDE COMMUNICATION DATED 30 - 04 - 2012 (DELIVERED IN THE OFFICE OF ASSESSING OFFICER ON 01 - 05 - 2012) CONVEYED TO ASSESSING OFFICER THAT RETURN OF INCOME FILED U/S. 139(1) BE TREATED AS RETURN IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. THUS, THERE WAS NO DELAY ON THE PART OF ASSESSEE IN RESPOND ING TO NOTICE U/S. 148 OF THE ACT. A FURTHER PERUSAL OF COMMUNICATION OF ASSESSEE DATED 30 - 04 - 2012 REVEAL THAT THE ASSESSEE HA D REQUESTED TO ASSESSING OFFICER TO PROVIDE REASONS FOR ISSUE OF NOTICE U/S. 148 OF THE ACT. THE ASSESSING OFFICER FURNISHED THE REASONS FOR REOPENING TO THE ASSESSEE ON 02 - 01 - 2013. TH US, THE REASO NS FOR REOPENING WERE PROVIDED TO THE ASSESSEE ALMOST AFTER THE LAPSE OF MORE THAN 8 MONTHS. THEREAFTER, THE ASSESSEE FILED OBJECTIONS AGAINST REOPENING ON 14 - 01 - 2013. THE ASSESSING OFFICER WITHOUT DECIDING THE OBJECTIONS OF 6 ITA NO . 1142/PUN/2018, A.Y. 2005 - 06 ASSESSEE PROCEEDED ON TO PASS THE ASSESSMENT ORDER U/S. 143(3) R.W.S. 147 ON 11 - 03 - 2013. IN SO FAR AS SEQUENCE OF EVENTS FURNISHED BY ASSESSEE ARE CONCERN ED, THE REVENUE HAS NOT DISPUTED THE SAME. IT IS CLEARLY EVIDENT FROM RECORDS THAT THE ASSESSING OFFICER HAS PASSED THE ASSESSM ENT ORDER IN REASSESSMENT PROCEEDINGS IN UTTER VIOLATION OF LAW EXPOUNDED BY THE HONBLE APEX COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. DCIT (SUPRA). 5. THE HONBLE SUPREME COURT OF INDIA IN AN UNAMBIGUOUS MANNER HAS LAID DOWN THE ACTIONS TO B E TAKEN BY THE ASSESSING OFFICER AND THE ASSESSEE AFTER NOTICE U/S. 148 OF THE ACT IS ISSUED . THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE OBJECTIONS MADE BY THE ASSESSEE AGAINST REOPENING OF ASSESSMENT BY PASSING A SPEAKING ORDER. UNDISPUTEDLY, IN TH E PRESENT CASE, THE ASSESSING OFFICER HAS NOT PASSED ANY ORDER ON THE OBJECTIONS FILED BY ASSESSEE AGAINST REOPENING OF ASSESSMENT. 6. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF BAYER MATERIAL SCIENCE PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX (S UPRA) HAS HELD THAT WHERE THE ASSESSMENT ORDER HAS BEEN PASSED WITHOUT DISPOSING OF OBJECTIONS FILED BY ASSESSEE TO THE REASONS RECORDED FOR REOPENING SUCH ASSESSMENT ORDER IS NOT SUSTAINABLE. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KSS PETRO N PRIVATE LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX (SUPRA) REITERATING ITS EARLIER VIEW HELD , THAT ONCE LAW LAID DOWN BY THE HONBLE APEX COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. DCIT (SUPRA) IS NOT FOLLOWED BY THE ASSESSING OFFICER IN PASSING THE ASSESSMENT ORDER , THE SAME IS WITHOUT JURISDICTION AND THERE IS NO REASON TO RESTORE THE ISSUE TO ASSESSING OFFICER TO PASS FURTHER/FRESH ORDER. THUS, IN VIEW OF UNDISPUTED FACTS AND THE LAW LAID DOWN BY THE HONBL E APEX 7 ITA NO . 1142/PUN/2018, A.Y. 2005 - 06 COURT AND HONBLE JURISDICTIONAL HIGH COURT , WE FIND MERIT IN GROUND NO. 1 OF APPEAL BY THE ASSESSEE. CONSEQUENTLY, THE IMPUGNED ORDER IS SET ASIDE BEING WITHOUT JURISDICTION AND THE APPEAL OF ASSESSEE IS ALLOWED. 7. IN GROUND NO. 2 OF APPEAL TH E ASSESSEE HAS ASSAILED ADDITION ON MERITS. ONCE THE ASSESSMENT ORDER IS HELD TO BE WITHOUT JURISDICTION, THERE IS NO NEED TO TRAVEL TO MERITS OF THE ADDITION. HENCE, GROUND NO. 2 OF THE APPEAL IS NOT DELIBERATED UPON BEING ACADEMIC. 8. IN THE RESULT, THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THURSDAY, THE 28 TH DAY OF FEBRUARY, 2019 . SD/ - ( / VIKAS AWASTHY) / JUDICIAL MEMBER / PUNE; / DATED : 28 TH FEBRUARY, 2019 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 5, PUNE 4. THE PR. COMMISSIONER OF INCOME TAX - 4, PUNE 5. , , - , / DR, ITAT, SMC BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE