ITO, Roorkee V. Naveen Chauhan, Roorkee

ITA 1454/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58568 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 27-01-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 23-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Keywords: Question of law; Validity of assessment
• Section: 143(3); 147; 148; 144; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.D. RANJAN, ACCOUNTANT MEMBER ITA NO.1454/DEL/2011 ASSESSMENT YEAR : 2004-05 ITO, WARD-2, INCOME TAX OFFICE, 16, CIVIL LINES, ROORKEE. VS. NAVEEN CHAUHAN, PROP. M/S VICKY COMMUNICATIONS, 16, CIVIL LINES, ROORKEE. PAN : AGFPC4049N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANKUR GOYAL, ADVOCATE REVENUE BY : SHRI R.S. NEGI, SR.DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIRECT ED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 22 ND DECEMBER, 2006 FOR ASSESSMENT YEAR 2004-05. THE GROUNDS OF APPEAL READ AS UNDER:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE LD . CIT (A) IS JUSTIFIED IN LAW IN NOT CONSIDERING EXPLANATION 2 TO SECTION 147 OF IT ACT, 1961 WHICH PROVIDES THAT THE ASSESSING O FFICER MAKE THE ASSESSMENT U/S 147/148 OF THE IT ACT, 1961 EVE N IF THE ASSESSMENT HAS NOT BEEN COMPLETED U/S 143(3), IF THE CO NDITIONS LAID DOWN U/S 147 OF IT ACT, 1961 ARE FULFILLED. 2. WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT (A) IS RIGHT IN NOT CONSIDERING THAT THE ACTION INITIATED U /S 147/148 DURING THE AVAILABILITY OF TIME OF ISSUING NOTI CE U/S 143(2) WAS LEGALLY VALID IN VIEW OF THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT REPORTED IN PUNJAB TRACTOR S LTD. VS. DCIT (P&H) 254 ITR 242 AND ANOTHER DECISION OF THE HO NBLE MADRAS HIGH COURT REPORTED IN SRI KRISHNA MAHAL VS. A CIT (MAD) 250 ITR 333. ITA NO.1454/DEL/2011 2 2. THE ORIGINAL RETURN OF INCOME WAS FILED BY THE ASSE SSEE ON 25 TH MARCH, 2005 DECLARING TOTAL INCOME OF ` 1,75,040/-. THE RETURN WAS PROCESSED U/S 143(1) ON 14 TH JUNE, 2005. NOTICE U/S 148 WAS ISSUED ON 8 TH AUGUST, 2005. THE REPRESENTATIVE OF THE ASSESSEE APPEAR ED ON 11 TH AUGUST, 2005 IN RESPONSE TO SUCH NOTICE AND ASSESSMENT HAS G OT COMPLETED VIDE ORDER DATED 22 ND DECEMBER, 2006 AT AN INCOME OF ` 15,24,875/-. BEFORE THE CIT (A) THE VALIDITY OF RE -ASSESSMENT WAS CHALLENGED ON THE GROUND THAT NOTICE ISSUED U/S 148 IS BAD AS THE PERIOD FOR COMPLETING THE ASSESSMENT U/S 143(3) HAD NOT EXPIRED. IT WAS SUBMITTED THAT REGULAR ASSESSMENT COULD HAVE BEEN COM PLETED UPTO 31 ST JANUARY, 2006 BEFORE WHICH DATE THE NOTICE U/S 148 WAS ISSUED. HENCE, THE ASSESSMENT IS BAD IN LAW. REFERENCE W AS MADE TO THE FOLLOWING DECISIONS FOR RAISING SUCH CONTENTION:- I) DCIT VS. KRISHAN LEELA 34 TAX WORLD 40 (JP) II) R.B. SECURITIES LTD. VS. JCIT (2004) 141 TAXMAN 4 9 (DEL) (MAG). III) BAPA LAL AND CO. EXPORTS VS. JCIT (2007) CTR (MA D) 330; (2007) 289 ITR 37 (MAD). IV) KLM ROYAL DUTCH AIR LINES VS. ADIT (2007) (DEL) 3 3, (2007) 159 TAXMAN 191 (DEL). 3. LEARNED CIT (A) HAS ACCEPTED SUCH PLEA OF THE ASSESSEE AND HAS ANNULLED THE ASSESSMENT ON THE GROUND THAT RE-ASSESSMENT BE ING BASED ON NOTICE ISSUED U/S 148 BEFORE THE EXPIRY OF THE DATE OF ISSUE OF NOTICE OF REGULAR ASSESSMENT. 4. THE REVENUE IS AGGRIEVED BY AFOREMENTIONED FINDIN GS OF CIT (A) AND HAS RAISED THE AFOREMENTIONED GROUNDS OF APPEAL. ITA NO.1454/DEL/2011 3 5. THE LEARNED DR, AFTER NARRATING THE FACTS AND REL YING UPON THE DECISIONS REFERRED TO IN THE GROUNDS OF APPEAL, PLEADE D THAT LEARNED CIT (A) HAS WRONGLY HELD THAT RE-ASSESSMENT IS INVALID. HE SU BMITTED THAT IN ACCORDANCE WITH THE AFOREMENTIONED DECISIONS THE A SSESSMENT FRAMED BY THE ASSESSING OFFICER IS VALID, THEREFORE, THE ORDER PASSED BY THE LEARNED CIT (A) SHOULD BE SET ASIDE AND THAT OF ASSE SSING OFFICER BE RESTORED. 6. ON THE OTHER HAND, RELYING UPON THE ORDER OF THE CIT (A), IT IS THE CASE OF THE LEARNED AR THAT HE HAS RIGHTLY HELD THAT RE-ASSESSMENT IN THE PRESENT CASE IS INVALID. APART FROM RELYING UPON THE DECISIONS REFERRED TO BEFORE LEARNED CIT (A), THE LEARNED AR ALSO RELIED UPON THE DECISION OF LUCKNOW BENCH IN THE CASE OF JORA SINGH V S INCOME TAX OFFICER REPORTED AS 139 TTJ (LKN) 380 IN WHICH ON SIM ILAR GROUNDS IT HAS BEEN HELD BY THE CO-ORDINATE BENCH OF THE TRIBUNAL THAT THE PROCEEDINGS U/S 148 CANNOT BE INITIATED WHEN TIME AVA ILABLE FOR ISSUE OF NOTICE U/S 143(2) HAS NOT EXPIRED. THEREFORE, THE LEARNED AR PLEADED THAT LEARNED CIT (A) HAS RIGHTLY HELD THAT R E-ASSESSMENT PROCEEDINGS IN THE PRESENT CASE WERE INVALID. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. LEARNED DR COULD NOT CONTROVERT THE FACT THAT NOTICE U/S 148 IN THE PRESENT CASE WAS ISSUED B EFORE THE EXPIRY OF THE TIME AVAILABLE TO THE DEPARTMENT FOR ISSUE OF NOTICE U/S 143(2). IF IT IS SO, WE FIND THAT THE SAID DECISION OF LEARNED CIT (A) IS IN ACCORDANCE WITH THE AFOREMENTIONED DECISION OF CO-OR DINATE BENCH IN THE CASE OF JORA SINGH VS. ITO (SUPRA) WHEREIN ON SIMIL AR PROPOSITION THE STAND TAKEN BY THE ASSESSEE WAS ACCEPTED. IT WILL BE RELEVANT TO REPRODUCE THE FOLLOWING OBSERVATIONS OF THE TRIBUNAL FROM THAT DECISION:- ITA NO.1454/DEL/2011 4 WE HAVE ALSO GONE THROUGH THE DECISIONS RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. 5.1 IT IS SEEN THAT THE ASSESSEE FILED THE RETURN ON 31ST OCT., 2005. THE AO COULD HAVE ISSUED THE NOTICE UNDER S. 14 3(2) OF THE IT ACT UPTO 31ST OCT., 2006 AND THE TIME-LIMIT FOR ISSU ING NOTICE UNDER S. 143(2) OF THE ACT WAS AVAILABLE ON 4TH JULY, 2006 I.E. ON THE DATE WHEN HE HAS' ISSUED NOTICE UNDER S. 148 O F THE ACT. THE ASSESSEE HAS TAKEN OBJECTION TO THE VALIDITY OF THE ASSESSMENT INSOFAR AS HE HAS TAKEN A GROUND BEFORE THE LEARNED CIT(A) THAT THE AO WAS NOT JUSTIFIED IN TAKING ACTION UNDE R S. 148 OF THE ACT. THE SUBMISSION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE IS ALSO CORRECT THAT THE LEARNED CIT(A) HA S GIVEN A CLEAR FINDING THAT THE ASSESSEE HAD NOT TAKEN ANY SPEC IFIC OBJECTION AGAINST ACTION UNDER S. 147 OF THE ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. WE ARE HOWEVER OF THE CONSIDERED OPINION THAT THE ISSUE REGARDING VALIDITY OF ASSESSMENT FOR THE REASON OF ISSUING OF NOTICE UNDER S . 148 OF THE ACT WHEN THE TIME-LIMIT FOR ISSUING NOTICE UNDER S. 1 43(2) OF THE ACT WAS AVAILABLE TO THE AO, IS A PURE QUESTION OF L AW AND NO INVESTIGATION OF FACTS IS REQUIRED FOR DECIDING THIS IS SUE. THE DECISION OF THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF TOLLARAM HASSOMAL ( SUPRA ) AS ALSO OTHER DECISIONS RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE ARE OF NO HEL P TO THE REVENUE BECAUSE THERE THE ISSUE WAS REQUIRED TO BE EXAMINED BY THE LEARNED CIT(A) IN THE LIGHT OF THE ADDI TIONAL GROUND TAKEN BY THE ASSESSEE AND HE WAS REQUIRED TO RE CORD A FINDING OF FACT. IN THIS CASE NO EXAMINATION OF FACTS I S REQUIRED AND THE GROUNDS RAISED ARE PURELY QUESTION OF LAW. TH E ADDITIONAL GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE , ADMITTED IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. ( SUPRA ) AND THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF MOHD. AYYUB & SONS AGENCY ( SUPRA ). IT IS ALSO VERY CLEAR FROM THE FACTS OF THE CASE OF THE ASSESSEE DISCUSSED ABOVE THAT THE NOTI CE UNDER S. 148 OF THE ACT WAS ISSUED ON 4TH JULY, 2006. SINCE THE ASSESSEE HAD FILED RETURN ON 31ST OCT., 2005, THE AO CO ULD HAVE ISSUED NOTICE UNDER S. 143(2) ON OR BEFORE 31ST OCT., 2006, THUS ON THE DATE THE NOTICE UNDER S. 148 OF THE ACT WAS ISSUED , THE TIME-LIMIT FOR ISSUING NOTICE UNDER S. 143(2) WAS AVAI LABLE. IT HAS BEEN HELD IN THE CASE OF SUPER SPG. MILLS LTD. V. ASSTT. CIT [2010] 38 SOT 14 (CHENNAI) (TM) THAT THE PROCEEDINGS UNDER S. 147 CANNOT BE INITIATED WHEN TIME AVAILABLE FOR ISSUING NOTI CE UNDER S. 143(2) HAS NOT EXPIRED. THE SUBMISSION OF THE LEAR NED DEPARTMENTAL REPRESENTATIVE THAT THIS BENCH HAS HELD THAT THE PROCEEDINGS UNDER S. 147 CAN BE INITIATED EVEN WHEN TH E TIME WAS AVAILABLE FOR ISSUING NOTICE UNDER S. 143(2) OF THE ACT, CANNOT BE CONSIDERED TENABLE IN VIEW OF THE THIRD MEMB ER DECISION IN THE CASE OF SUPER SPG. MILLS LTD. ( SUPRA ). THE DECISIONS CITED BY THE LEARNED DEPARTMENTAL REPRESENTATIV E ARE, ITA NO.1454/DEL/2011 5 THEREFORE, OF NO HELP TO THE REVENUE IN VIEW OF THE FAC T THAT THE THIRD MEMBER DECISION TAKES PRECEDENCE OVER THE DECIS ION OF THE DIVISION BENCH. SINCE THE THIRD MEMBER DECISION I N THE CASE OF SUPER SPG. MILLS LTD. ( SUPRA ) SQUARELY SUPPORTS THE CASE OF THE ASSESSEE, THE SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE ARE REJECTED AND THE ADDITIONAL GROUNDS O F APPEAL RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF ASSESSMENT BY ISSUING NOTICE UNDER S. 147 OF THE ACT ON 4TH JULY, 2006 DURING THE AVAILABILITY OF TIME-LIMIT FOR ISSUING NOTICE UNDER S. 143(2) OF THE ACT, IS ALLOWED. 6. SINCE THE NOTICE UNDER S. 147 OF THE ACT DT. 4TH JULY, 2006 IS HELD TO BE NOT VALID, CONSEQUENT ASSESSMENT PROCEEDINGS DT. 27TH DEC. 2007 UNDER S. 144 R/W S. 147 OF THE ACT ARE ALSO CONSIDERED INVALID. THE DECISION OF THE LEARNED CIT( A) ON THE INVALID DECISION IS ALSO LIABLE TO BE QUASHED. THUS, THE ORDERS OF BOTH THE LOWER AUTHORITIES ARE QUASHED. SINCE THE ORDERS OF THE LOWER AUTHORITIES HAVE BEEN QUASHED FOR THE REASON OF INVALIDITY OF PROCEEDINGS UNDER S. 147 INITIATED AS PER NOTICE UN DER S. 148 DT. 4TH JULY, 2006 AND THE CONSEQUENT ASSESSMENT ORDER A ND THE ORDER OF THE LEARNED CIT(A) HAVE BEEN QUASHED, WE NE ED NOT DECIDE OTHER GROUNDS OF APPEAL OF THE ASSESSEE AS ALS O THE APPEAL OF THE REVENUE. 7. .. . THE APPEAL OF THE ASSESSEE IS, THEREFORE, TREATED AS ALLOWED. 8. WE ARE AWARE THAT THE AFOREMENTIONED DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF PUNJAB TR ACTORS (SUPRA) HAS SET OUT DIFFERENT LEGAL PROPOSITION FROM THE AFOREMEN TIONED DECISION OF THE TRIBUNAL, BUT, AT THE SAME TIME, HONBLE MADRAS H IGH COURT IN THE CASE OF CIT VS. TCP LTD. (2010) 323 ITR 346 (MAD) HAS LAID DOWN THE PROPOSITION WHICH HAS BEEN TAKEN IN THE AFOREMENTIONE D DECISION OF THE TRIBUNAL, AND, SIMILAR IS THE POSITION WITH THE DE CISION OF HONBLE DELHI HIGH COURT IN THE CASE OF KLM ROYAL DUTCH AIRL INES VS. ASSTT. DIRECTOR OF INCOME-TAX. ACCORDING TO RULE OF PRECE DENT, WHENEVER THERE ARE DIFFERENT VIEWS EXPRESSED BY DIFFERENT HIGH COURTS AND DECISION OF JURISDICTIONAL HIGH COURT IS NOT AVAILABLE , THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO BE TAKEN. ITA NO.1454/DEL/2011 6 9. FOR THE REASONS AFORESAID, WE DECLINE TO INTERFERE IN THE ORDER PASSED BY THE LEARNED CIT (A). 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 03.02.20 12. SD/- SD/- [K.D. RANJAN] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 03.02.2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES