The Dy.Commissioner of Income Tax Circle-1(2), Surat V. Laxminarayan Chunnilal Mundra HUF, Surat

ITA 1203/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 1980 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 09-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RASESH SHAH
• Keywords: Reopening of assessment; Reassessment proceedings
• Section: 147; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.1203/AHD/2016/SRT / ASSESSMENT YEAR: 2007-08 DY. COMMISSIONER OF INCOME-TAX, CIRCLE-1(2), SURAT. VS. M/S. LAXMINARAYAN CHUNNILAL MUNDRA (HUF), 51-52, RADHEY MARKET, RING ROAD, SURAT 395002. [PAN: AAAHL 4069G] ( ' / APPELLANT) ( #$' /RESPONDENT) / APPELLANT BY : SHRI RASESH SHAH, C.A /RESPONDENT BY : SHRI VINOD KUMAR, SR. D.R /DATE OF HEARING : 22-10-2018 / DATE OF PRONOUNCEMENT : 26-10-2018 / ORDER PER C.M. GARG, JUDICIAL MEMBER: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-II, SURAT (CI T(A) FOR SHORT) DATED 18.02.2016 FOR THE ASSESSMENT YEAR (A.Y) 2007-08. 2. THE GROUNDS RAISED BY THE REVENUE READ AS FOLLOW S: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN QUASHING THE ORDER OF RE-ASSESS MENT ON THE FACT OF THE CASE. 2 ITA NO.1203/AHD/2016/SRT (A.Y: 2007-08) M/S. LAXMINARAYAN CHUNNILAL MUNDRA 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE T RIBUNAL. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN QUASHING THE ORDER OF RE-ASSESSMENT ON THE FACT OF THE CASE AND THE LD. FIRST APPELLATE AUTHORITY OUGHT TO HAVE UPHELD CONC LUSION OF THE ASSESSING OFFICER (AO) AND LEGAL GROUND OF THE ASSESSEE BEING NOT SUSTAINABLE OUGHT TO HAVE DISMISSED. THE LD. DR SUBMITTED THAT THE CONCLUSION DRAWN BY THE LD. CIT(A) IN ALLOWING APPEAL OF THE A SSESSEE ON LEGAL GROUND SHOULD BE SET ASIDE AND APPEAL BE SENT TO TH E FILE OF THE LD. CIT(A) FOR ADJUDICATION ON MERITS. 4. THE LD. ASSESSEES REPRESENTATIVE (AR) DREW OUR ATTENTION TOWARDS RELEVANT PARA 6.1.6 & 6.1.7 AND SUBMITTED THAT THE LD. CIT(A) WAS RIGHT IN ALLOWING LEGAL GROUND OF THE ASSESSEE BY FOLLOWING DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHATS (INDIA) LTD. REPORTED IN 259 ITR 19 (SC) AS THE AO DID NOT DISPOSE OBJECTION OF THE ASSESSE E TO THE REOPENING OF ASSESSMENT AND EVEN DESPITE DIRECTIONS OF THE LD. CIT(A) US/. 250(4) OF THE ACT DID NOT DISPOSE THE OBJECTIO N OF THE ASSESSEE. THE LD. AR ALSO SUBMITTED THAT AS PER DECISION OF HON BLE JURISDICTIONAL HIGH COURT GUJARAT IN THE CASE OF GUJARAT ECO TEXTILE PA RK LTD. VS. ACIT ORDER DATED 21.01.2015 IN SPECIAL CIVIL APPLICATION NO.18 622 OF 2014, WHEREIN 3 ITA NO.1203/AHD/2016/SRT (A.Y: 2007-08) M/S. LAXMINARAYAN CHUNNILAL MUNDRA IT WAS HELD THAT IT IS A MANDATORY PROCEDURE TO DIS POSE OBJECTION OF THE ASSESSEE BEFORE PROCEEDINGS WITH THE ASSESSMENT AND IN ABSENCE THEREOF INITIATION OF REOPENING AND SUBSEQUENT REAS SESSMENT ORDER WOULD BE REQUIRED TO BE QUASHED. 5. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS, FIRST OF ALL, WE OBSERVE THAT UNDISPUTEDLY NEITHER DURING ASSESSMENT PROCEEDINGS NOR DURING REMAND PROCEEDINGS DESPITE THE DIRECTIONS OF THE LD. CIT(A) U/S. 250(4) OF THE ACT, THE AO DID NOT DISPOSE OBJECTION S OF THE ASSESSEE RAISED AGAINST THE REOPENING OF ASSESSMENT AS THE A O DID NOT FOLLOW MANDATORY PROCEDURE AS LAID DOWN BY HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (SUPRA) AND BY HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF GUJARAT ECO TEXTILE PARK LTD. (SUPRA) A ND THE AO PROCEEDED WITH REASSESSMENT PROCEEDINGS AND TO FRAME REASSESS MENT ORDER THEN, THE ACTION OF THE AO IN INITIATION OF REASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT AND ISSUANCE OF NOTICE U/S. 148 OF THE ACT AND ALL CONSEQUENT ORDERS WOULD REQUIRE TO BE QUASHED. THEREFORE, IN THE GLARING FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS RIGHT IN ALLOWING LEGAL GROUND OF THE ASSESSEE AND QUASHING THE REASSESSMEN T PROCEEDINGS AND ORDERS. WE ARE UNABLE TO SEE ANY VALID REASON TO I NTERFERE WITH THE SAME AND THUS, WE UPHOLD THE SAME. CONSEQUENTLY, GROUND S OF REVENUE BEING DEVOID OF MERITS ARE DISMISSED. 4 ITA NO.1203/AHD/2016/SRT (A.Y: 2007-08) M/S. LAXMINARAYAN CHUNNILAL MUNDRA 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 6 TH OCTOBER, 2018. / SURAT ; DATED : 26 TH OCTOBER, 2018 EDN # & / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT ; 3. $ ( ) / THE CONCERNED CIT(A); 4. THE CONCERNED PRL. CIT; 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // * / ASSISTANT REGISTRAR , / ITAT, SURAT SD/- SD/- ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) /JUDICIAL MEMBER