Bodal Chemicals Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-1(2), Ahmedabad

ITA 1425/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6487 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-06-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 05-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HONBLE SHRI G.D.AGRAWAL, V.P. & HONBLE SHRI T.K. SHARMA, J.M.) I.T.A. NO. 1425/AHD./2009 ASSESSMENT YEAR : 2003-2004 BADAL CHEMICALS PVT. LTD., AHMEDABAD V S- I.T.O., WARD-1(2), AHMEDABAD (PAN : AAACD 5351M) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.N.DIVATIA, A.R. RESPONDENT BY : SHRI SAMIR TEKRIWAL, SR.D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 21-01-2009 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-VI, AHM EDABAD IN APPEAL NO. CIT(A)-VI/WD.1(2)/178/07-08 FOR THE ASSESSMENT YEAR 2003-04. 2. VARIOUS GROUNDS RAISED IN THIS APPEAL BY THE ASS ESSEE ARE AS UNDER: 1.1 THE ORDER PASSED U/S.250 DT. 21.01.2009 BY T HE CIT(A)-VI, AHMEDABAD, CONFIRMING THE ORDER PASSED U/S.147 R.W.S. 143(3) B Y ITO., WD.L(2), A'BAD, IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE EXPLANATIONS FUR NISHED AND THE EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGN ED ADDITIONS. 1.3 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN PASSING THE NON-SPEAKING IMPUGNED ORDER MECHANICALLY AND WITHOUT PROPER APPL ICATION OF MIND AND JUST BY REPRODUCING PROVISIONS OF LAW AS WELL AS VARIOUS PORTIONS OF THE ASSTT. ORDER AND WRITTEN SUBMISSIONS. 2.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW/AND OR ON FACTS IN UPHOLDING THE PROCEEDINGS U/S.147 OF THE ACT. THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE NOTICE ISSUED U/S.148 OF THE ACT WAS BAD IN LAW , ILLEGAL AND WITHOUT JURISDICTION. ITA NO.1425/AHD/2009 2 2.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN FAILIN G TO DIRECT AO TO FURNISH THE COPY OF REASONS RECORDED FOR REOPENING ASSTT.. THE IT IS MANDATORY IN VIEW OF THE DECISION OF THE HON'BLE APEX COURT. THEREFORE, THE APPROACH OF THE LD. CIT(A) SHOULD BE CONDEMNED 3.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW/AND OR ON FACTS IN HOLDING THAT THE PROVISION OF GRATUITY OF RS.9,87,791 /- HAS TO BE ADDED TO THE BOOK PROFIT. 3.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THAT THE AMOUNT OF RS.9,87,791 /- HAS T O BE ADDED BACK TO THE BOOK PROFIT. 4.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND/O R ON FACTS IN UPHOLDING THE WITHDRAWAL OF DEDUCTION U/S.80HHC OF RS.3,34,857/-. 4.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE COMPUTATION OF DEDUCTION U/S.80HHC MADE BY AO AND THEREBY WITHDRAWING THE SAME BY RS.3,34,857. 5.1 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE APPELLANT SHOULD BE AWARDED COST. 3 AT THE TIME OF HEARING BEFORE US, ON BEHALF OF TH E ASSESSEE, SHRI S.N.DIVATIA APPEARED AND IN RESPECT OF GROUND NOS. 1 AND 2, REL YING ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVE SHAFTS (INDI A) LTD. VS- ITO REPORTED IN 259 ITR 19, CONTENDED THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND THE AO BE DIRECTED TO SUPPLY COPY OF THE REASONS RECORDED BEFORE ISSUI NG NOTICE UNDER SECTION 147. THEREAFTER, THE ASSESSEE BE DIRECTED TO FILE THE OB JECTION AGAINST REOPENING. THEREAFTER, THE AO MAY DISPOSE OFF THE OBJECTION OF THE ASSESSE E BY PASSING A SPEAKING ORDER AND IF THE OBJECTIONS ARE REJECTED, IT GIVES A CAUSE TO THE ASSESSEE TO CHALLENGE THE SAID ORDER OF THE AO BY AN APPROPRIATE LEGAL REMEDY. 4. ON THE OTHER HAND, SHRI SAMIR TEKRIWALA, SR.D.R. , APPEARING ON BEHALF OF THE REVENUE, OBJECTED TO THE AFORESAID PLEA OF THE ASSE SSEE, RELYING ON THE LATEST DECISION OF HONBLE DELHI HIGH COURT IN ITA NOS.355 & 412 OF 2010 IN THE CASE OF CIT-VS- SAFETAG INTERNATIONAL INDIA PVT. LTD. THE LD. D.R. POINTED OUT THAT IN THIS CASE, THE ASSESSEE DID NOT ASK THE REASONS RECORDED NOR THE A SSESSEE PARTICIPATED IN THE RE- ITA NO.1425/AHD/2009 3 ASSESSMENT PROCEEDINGS. THEREFORE, THE MATTER CANNO T BE REMANDED TO THE FILE OF AO AS PRAYED BY THE ASSESSEE. AS AGAINST THIS, THE LD. COUNSEL OF THE ASSESSEE POINTED OUT THAT EVEN, AS PER THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SAFETAG INTERNATIONAL INDIA PVT. LTD. ( SUPRA ), RELIED ON BY THE LD. D.R., THE MATTER BE REMITTE D BACK TO THE LD. CIT(A) WITH THE DIRECTION THAT THE REVENUE SHALL SUPPLY THE REASONS RECORDED BEFORE ISSUING NOTICE UNDER SECTION 147 RE AD WITH SECTION 148 OF THE I.T. ACT, 1961. 5. RIVAL SUBMISSIONS WERE CONSIDERED. IT IS PERTINE NT TO NOTE THAT IN THIS CASE, ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143 (3) ON 27.02.2006. SUBSEQUENTLY, NOTICE UNDER SECTION 148 WAS ISSUED ON 28.03.2007. IN RESPONSE TO THIS NOTICE, THE ASSESSEE, VIDE LETTER DATED 27.04.2007, FILED ON 21 .05.2007, REQUESTED THE AO TO TREAT THE RETURN FILED ON 27.11.2003 AS THE RETURN FILED IN PURSUANCE TO THE NOTICE UNDER SECTION 147 OF THE I.T. ACT, 1961. THE ASSESSEE NEV ER ASKED THE AO TO SUPPLY REASONS RECORDED BY THE AO BEFORE ISSUING NOTICE UNDER SECT ION 148 OF THE I.T. ACT, 1961. IN THESE CIRCUMSTANCES, WE, FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SAFETAG INTERNATIONAL INDIA PVT. LTD. ( SUPRA ), SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT HIM TO RE-DECIDE THE APPEAL OF TH E ASSESSEE AFRESH. THE AO IS ALSO DIRECTED TO SUPPLY THE REASONS RECORDED BEFORE ISSU ING NOTICE ISSUED UNDER SECTION 147 READ WITH SECTION 148 TO THE ASSESSEE. NEEDLESS TO ADD, BEFORE PASSING A FRESH ORDER, THE LD. CIT(A) WILL GIVE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 6. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED. THE ORDER PRONOUNCED IN THE OP EN COURT ON 15.06.2011 SD/- SD/- (G.D.AGRAWAL) (T.K. SHARMA) VICE-PRESIDENT JUDICIAL MEMBER DATED : 15/06/2011 ITA NO.1425/AHD/2009 4 COPY OF THE ORDER IS FORWARDED TO:- (1) THE ASSESSEE (2) THE DEPARTMENT. (3) CIT (A.) CONCERNED. (4) CIT CONCERNED. (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AH MEDABAD. TALUKDAR/ SR. P.S.