NRU Spinning Mills Ltd., Salem V. DCIT, Salem

ITA 1384/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7636 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 23-03-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 04-06-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTHJCIT
• Assessee Lawyers: G BASKAR
• Keywords: Reopening of assessment; Difference of opinion; Change of opinion

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! ' #! ' $ . %& ' () BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.1384 /MDS./2015 ( / ASSESSMENT YEAR :2006-07) M/S.NRU SPINNING MILLS LTD ., GANESAPURAM, THUMBAL MAIN ROAD, VELLALAPATTY,ATTUR TK., SALEM 636 114. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1,SALEM. PAN AAACN 7248 Q ( *+ / APPELLANT ) ( ,-*+ / RESPONDENT ) / APPELLANT BY : MR.G.BASKAR,ADVOCATE / RESPONDENT BY : MR.A.V.SREEKANTH,JCIT, D.R / DATE OF HEARING : 23.03.2016 /DATE OF PRONOUNCEMENT : 30.03.2016 . / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A), SALEM DATED 24.03.2015 PERTAINING TO THE ASSESSMENT YEAR 2006- 07. ITA NO.1384/MDS/2015 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1.1. THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE CANCELLED THE REASSESSMENT AS IT IS AB-INITIO VOID. 1.2. THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE FURTHER SEEN THAT THERE BEING NO NON-DISCLOSURE OF ANY FACT OR MATERIAL, THE RE- OPENING OF A SCRUTINY ASSESSMENT AFTER 4 YEARS FROM THE END OF THE ASSESSMENT YEAR IS ILLEGAL. 1.3. THE COMMISSIONER OF INCOME-TAX (APPEALS) WENT WRONG IN FAILING TO NOTICE THAT THE ASSESSMENT HAS BEEN RE-OPENED ME RELY ON A CHANGE OF OPINION AND HENCE THE INITIATION OF RE-ASSESSMEN T ITSELF BEING INVALID, THE RE-ASSESSMENT DESERVES TO BE QUASHED. 2.1 THE COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN ENHANCING THE BO OK PROFIT WITH THE SUM OF RS.1,15,95,260/- BEING THE REVERSAL OF INTER EST DEBITED IN THE EARLIER YEAR. 2.2 THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE SEEN THAT THE ENHANCEMENT OF BOOK PROFIT IS NEITHER WARR ANTED NOR JUSTIFIED IN THE FACTS OF THE CASE. 2.3 THE COMMISSIONER OF INCOME-TAX (APPEALS) WENT W RONG IN NOT FOLLOWING THE PRECEDENTS CITED BEFORE HIM AND ERRED IN FOLLOWING DECISIONS WHICH ARE NOT APPLICABLE TO THE FACTS OF THE CASE. 3.1. THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO LEVY INTEREST U/S.234B(3) OF THE ACT INSTEAD OF SEC.234B(1) OF THE ACT. 3.2. THE COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE SEEN THAT THE PRESENT ASSESSMENT BEING NOT A REGULAR ASS ESSMENT LEVY OF INTEREST U/S.234D IS NEITHER WARRANTED NOR LEGAL, A ND OUGHT TO HAVE BEEN CANCELLED BY HIM. ITA NO.1384/MDS/2015 3 3. AT THE TIME OF HEARING, LD.A.R SUBMITTED THAT T HE GROUND RELATING TO THE REOPENING OF ASSESSMENT HAS BEEN RAISED BY T HE ASSESSEE FIRST TIME BEFORE THE TRIBUNAL AND THE LD.CIT(A) HAD NO O CCASION TO EXAMINE THE ISSUE OF REOPENING, AS SUCH IT MAY BE ADJUDICATED BY THE TRIBUNAL. 4. ON THE OTHER HAND, LD.D.R SUBMITTED THAT SINCE THE ISSUE OF REOPENING OF ASSESSMENT HAS BEEN RAISED BY THE ASSE SSEE FIRST TIME, IT NEEDS TO BE EXAMINED BY THE LD.CIT(A) AND THE IS SUE MAY BE REMITTED BACK TO THE FILE OF CIT(A) FOR HIS CONSIDE RATION. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY THE ISSUE RELATING TO REOPENING OF ASSESSMENT WAS NOT RAISED BEFORE THE LD.CIT(A) AND HE HAS NO OCCAS ION TO GIVE HIS FINDINGS. HENCE, WE ARE OF THE OPINION THAT THE IS SUE RELATING TO REOPENING OF ASSESSMENT RAISED BEFORE US FIRST TIME , IT S TO BE CONSIDERED BY THE CIT(A) AND HE HAS TO GIVE HIS FI NDINGS ON IT. ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE REMIT T HE ISSUE RELATING TO REOPENING OF ASSESSMENT TO THE FILE OF LD.CIT(A) FO R HIS CONSIDERATION. THEN, IF REQUIRED, HE HAS TO ADJUDICATE THE OTHER G ROUNDS ON MERITS ON ITA NO.1384/MDS/2015 4 THE OUTCOME OF HIS DECISION ON REOPENING OF ASSESSM ENT. IT NEEDLESS TO SAY THAT THE CIT(A) HAS TO GIVE ADEQUATE OPPORTU NITY OF HEARING TO THE ASSESSEE BEFORE PASSING THE ORDER. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 30 TH OF MARCH, 2016 AT CHENNAI. SD/- SD/- ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) ( ( () * + ) ) ! CHANDRA POOJARI ', JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 30 TH MARCH,2016 . K S SUNDARAM. -.,, /0,10 /COPY TO: , 1. /APPELLANT 2. /RESPONDENT 3. , 2,!' /CIT(A) 4. , 2 /CIT 5. 034, 5 /DR 6. 4&,6 /GF