Janak Shantilal Mehta, CHENNAI V. ACIT, CHENNAI

ITA 1372/CHNY/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5052 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 29-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN ACIT
• Assessee Lawyers: T BANUSEKAR
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI . , ! , $ % BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NO.1372/MDS/2017 $! ! /ASSESSMENT YEAR: 2006-07 SHRI JANAK SHANTILAL MEHTA, NO.3, RAJAMANNAR STREET, T.NAGAR, CHENNAI-600 017. VS. THE ASST. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-1, CHENNAI-600 034. [PAN: AACPM 7952 R ] ( ' /APPELLANT) ( ()' /RESPONDENT) ' * / APPELLANT BY : MR.T.BANUSEKAR, CA ()' * /RESPONDENT BY : MR.N.MADHAVAN, ACIT * /DATE OF HEARING : 10.01.2018 * /DATE OF PRONOUNCEMENT : 10.01.2018 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.1372/MDS/2017 IS AN APPEAL FILED BY THE ASS ESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S)-2, CHENNAI, IN ITA NO.12/CIT(A)-2/2014-15 DATED 31.03.2017 FOR THE AY 2006-07. 2. SHRI N.MADHAVAN, ACIT REPRESENTED ON BEHALF OF T HE REVENUE AND SHRI T.BANUSEKAR, CA, REPRESENTED ON BEHALF OF THE ASSESSEE. ITA NO.1372/MDS/2017 :- 2 -: 3. IT WAS SUBMITTED BY THE LD.AR THAT THE ASSESSEE HAD FILED RETURN OF INCOME FOR THE RELEVANT AY 2006-07 ON 28.08.2006 AD MITTING A LOSS. IT WAS A SUBMISSION THAT THE ASSESSMENT CAME TO BE COM PLETED U/S.143(3) ON 24.11.2008 ACCEPTING THE RETURNED INCOME. IT WA S A SUBMISSION THAT THE ASSESSMENT CAME TO BE RE-OPENED BY ISSUANCE OF NOTICE U/S.148 ON 28.03.2013. THE ASSESSEE HAD REQUESTED FOR THE COP Y OF THE REASONS RECORDED. IT WAS A SUBMISSION THAT THE REASONS REC ORDED HAVE NOT BEEN GIVEN TO THE ASSESSEE BEFORE THE ASSESSMENT WAS COM PLETED. THE LD.AR FILED AN AFFIDAVIT TO THE SAID EFFECT THAT THE REAS ONS RECORDED FOR RE- OPENING OF THE ASSESSMENT HAD NOT BEEN GIVEN UNTIL THE COMPLETION OF THE ASSESSMENT. IN THE AFFIDAVIT, ASSESSEE HAS MENTIONE D THE REASONS RECORDED FOR THE RE-OPENING WAS GIVEN ONLY IN SEPTE MBER, 2016 MUCH AFTER COMPLETION OF THE ASSESSMENT. THE LD.AR DREW OUR ATTENTION TO THE ORDER OF THE LD.CIT(A) AT PAGE NO.6 & 7 WHEREIN THE LD.CIT(A) HAS MENTIONED THAT THE INSTRUCTIONS OF THE ERSTWHILE AO INSTRUCTING THE ITI TO CONVEY THE REASONS FOR RE-OPENING TO THE ASSESSEE H AS BEEN PRODUCED. THIS SCANNED COPY OF THE LETTER WAS SHOWN AT PAGE N O.6 OF THE ORDER OF THE LD.CIT(A). IT WAS A SUBMISSION THAT AS THE IT INSP ECTOR DIRECTED TO GRANT THE COPIES OF THE REASONS RECORDED AND THE ASSESSEE HAS CO-OPERATED IN THE PROCEEDINGS PERTAINING TO THE RE-OPENING ASSESS MENT AND AS THE ASSESSEE HAS NOT RAISED ANY OBJECTION EITHER STATIN G THAT THE REASONS HAVE NOT BEEN COMMUNICATED OR COMING OUT WITH ANY OBJECT IONS WHATSOEVER TO THE RE-OPENING ITSELF IN VIEW OF THE PROVISIONS OF SEC.292BB, THE RE- ASSESSMENT WAS HELD TO BE VALID. THE LD.AR SUBMITT ED THAT NO EVIDENCE ITA NO.1372/MDS/2017 :- 3 -: WHATSOEVER HAVING BEEN PRODUCED TO PROVE SERVICE OF THE REASONS BY THE REVENUE OTHER THAN A NOTING ON THE LETTER OF THE AS SESSEE ASKING THE IT INSPECTOR TO PUT UP THE REASONS AND CONVEY THE REAS ONS, IT WAS A SUBMISSION THAT THE REASONS HAVING NOT BEEN GIVEN T O THE ASSESSEE BEFORE THE COMPLETION OF THE ASSESSMENT. IN VIEW OF THE D ECISION OF THE BOMBAY HIGH COURT IN THE CASE OF VIDESH SANCHAR NIGAM LTD. REPORTED IN 340 ITR 66 (BOM) WHEREIN IT HAS BEEN HELD REASONS NOT FURNISHED TO THE ASSESSEE TILL COMPLETION OF THE ASSESSMENT SINCE THE REASO NS RECORDED FOR THE RE- OPENING OF THE ASSESSMENT WERE NOT FURNISHED TO THE ASSESSEE TILL THE COMPLETION OF THE ASSESSMENT, THE RE-ASSESSMENT ORD ER CANNOT BE UPHELD CIT V. FOMENTO RESORTS & HOTELS LTD. . THE RE-OPENING WAS LIABLE TO BE ANNULLED. HE ALSO RELIED UPON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF IDBI LTD., REPORTED IN (2016) 97 CCH 0021 MUMHC. HE ALSO RELIED UPON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL, HYDERABAD BENCH, IN THE CASE OF S.PRASAD RAJU REPOR TED IN 96 TTJ 0832 AND THE MUMBAI BENCH IN THE CASE OF TATA INTERNATIO NAL LTD. REPORTED IN 52 SOT 0465. THE LD.AR FURTHER SUBMITTED THAT THE DECISION OF THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF M/S.JAY ANTHI NATARAJAN IN WP NO.1905/2017 DATED 14.09.2017 HAS HELD IN PARA NO.1 4 AS FOLLOWS: 14. ADMITTEDLY, IN THE INSTANT CASE, THIS HAS NOT B EEN DONE BY THE RESPONDENT, BUT THE RESPONDENT SEEKS TO SUSTAIN THE IMPUGNED ASSESSMENT ORDER STATING THAT IN THE FIRST FEW PARAGRAPHS OF THE ORDER, HE HAS DEALT WITH OBJECTIO NS AND DISPOSED OF ACCORDINGLY. UNFORTUNATELY, THE MANNER IN WHICH THE RESPONDENT H AS DECIDED THE ISSUE IS WHOLLY UNSUSTAINABLE IN LAW. THE PURPOSE FOR PASSING A SEP ARATE SPEAKING ORDER ON THE OBJECTIONS IS WITH A VIEW TO AFFORD AN OPPORTUNITY TO THE ASSE SSEE TO QUESTION SUCH AN ORDER, IF HE IS AGGRIEVED. THE RESPONDENT BY PASSING THE IMPUGNED O RDER HAS TAKEN AWAY SUCH VALUABLE RIGHT FROM THE PETITIONER INASMUCH AS THE IMPUGNED PROCEEDINGS IS AN ORDER OF ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THEREFORE, IF AN O RDER OF ASSESSMENT HAS TO BE CHALLENGED, NECESSARILY AN APPEAL HAS TO BE PREFERRED AND ONLY IN RAREST OF RARE CASE, COURTS WOULD ENTERTAIN CHALLENGE TO ASSESSMENT ORDERS IN WRIT PR OCEEDINGS. THUS, THE PROCEDURE ADOPTED ITA NO.1372/MDS/2017 :- 4 -: BY THE RESPONDENT IS COMPLETELY FLAWED, WHICH GOES TO THE ROOT OF THE MATTER, THEREBY, VITIATES THE ENTIRE PROCEEDINGS. 4. IT WAS A SUBMISSION THAT THE REASONS RECORDED HA VE NOT BEEN GIVEN TO THE ASSESSEE, THE VALUABLE RIGHT OF THE ASSESSEE TO OBJECT TO THE SAME ITSELF HAS BEEN VIOLATED. IT WAS A SUBMISSION THAT RE-ASSESSMENT WAS LIABLE TO BE QUASHED. 5. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ER OF THE AO AND THE LD.CIT(A). IT WAS A SUBMISSION THAT THE IT INS PECTOR HAD BEEN DIRECTED TO PROVIDE THE REASONS RECORDED AND CONSEQ UENTLY, THE SAME SHOULD HAVE BEEN PROVIDED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ORDER OF THE LD.CIT(A) CLEARLY SHOWS THAT THE LD.CIT(A) HAS ATTACHED THE SCANNED COPY OF THE LETTER OF THE ASSESSEE REQUESTING FOR T HE REASONS RECORDED FOR THE PURPOSE OF RE-OPENING ON WHICH IT WAS MENTIONED THAT ITI PLEASE PUT UP AND CONVEY THE REASONS AND SIGNED ON 22/10. AD MITTEDLY, THE NOTICE U/S.148 DATED 28.03.2013, THE ASSESSMENT ORDER IS D ATED 26.03.2014, ONE OF THE DATES OF HEARING RECORDED IN THE ASSESSM ENT ORDER IS 22/10/2013. HOWEVER, AFTER 22/10/2013, THE NEXT DA TE OF HEARING IS 28.02.2014, AFTER A GAP OF NEARLY FOUR MONTHS. THE REVENUE HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE TO SHOW THAT THE REASO NS RECORDED HAD BEEN PROVIDED TO THE ASSESSEE AS PRAYED FOR IN ITS LETTE R. THIS BEING SO, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE ITA NO.1372/MDS/2017 :- 5 -: CASE OF VIDESH SANCHAR NIGAM LTD. AS ALSO THE PRINC IPLES LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/ S.JAYANTHI NATARAJAN, WE ARE OF THE VIEW THAT THE REASONS RECORDED HAVING NO T BEEN GIVEN TO THE ASSESSEE BEFORE THE COMPLETION OF THE ASSESSMENT, T HE RE-ASSESSMENT IS INVALID AND LIABLE TO BE ANNULLED AND WE DO SO. AS WE HAVE DECIDED THE ISSUE ON TECHNICALITY OF RE-OPENING, WE ARE NOT GOI NG INTO THE MERITS CHALLENGED IN THE APPEAL. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 10, 2018, AT CHENNAI. SD/- SD/- ( . ) ( ABRAHAM P.GEORGE ) /ACCOUNTANT MEMBER ( ! ) (GEORGE MATHAN) $ /JUDICIAL MEMBER /CHENNAI, 1 /DATED: JANUARY 10, 2018. TLN * ($23 43 /COPY TO: 1. ' /APPELLANT 4. 5 /CIT 2. ()' /RESPONDENT 5. 3 ($$ /DR 3. 5 ( ) /CIT(A) 6. ! /GF