Pioneer Distrilleries Limited, Nanded V. Deputy Commissioner of Income-tax, Nanded Circle , Nanded

ITA 1533/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1655 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 16-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148; 263; 143(3); 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , ! ' ,$ % BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURV EDI, AM . / ITA NO.1533/PUN/2017 ' ' / ASSESSMENT YEAR : 2010-11 PIONEER DISTILLERIES LIMITED, BALAPUR, TQ. DHARMABAD, DIST. NANDED 431809 . / APPELLANT PAN: AABCP9376J VS. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE NANDED, NANDED. . RESPONDENT / APPELLANT BY : SHRI KETAN VED / RESPONDENT BY : SHRI PANKAJ GARG DATE OF HEARING : 25.07.2019 / DATE OF PRONOUNCEMENT: 06.09.2019 / ORDER PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CI T(A)-1, AURANGABAD, DATED 10.03.2017 RELATING TO ASSESSMENT YEAR 2010-1 1 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME-TAX A CT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1.0 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE ORDER DATED MARCH 10, 2017 PASSED UNDER SECTION 250 OF THE INCOME- TAX ACT, 1961 ('THE ACT') BY THE LD. COMMISSIONER O F INCOME-TAX (APPEALS) - 1, AURANGABAD, (HEREINAFTER REFERRED TO AS 'LD. CIT(A)') IS BAD IN LAW AND IS LIABLE TO BE QUASHED, ITA NO.1533/PUN/2017 M/S. PIONEER DISTILLERIES LTD. 2 2.0 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DISMISSING THE ASSESSEE'S APPEA L ONLY ON THE FACT THAT THE UNDERLYING REASSESSMENT ORDER HAS BEEN ANN ULLED BY THE LD. PRINCIPAL COMMISSIONER OF INCOME-TAX - 1, AURANGABA D VIDE ORDER DATED DECEMBER 22, 2016. 3.0 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD. CIT(A) ERRED IN NOT DECIDING THE APPEAL ON MERI TS. 4.0 THAT THE LD. CIT(A) OUGHT TO HAVE ANNULLED THE ORDER AS DONE BY THE LD. PRINCIPAL COMMISSIONER OF INCOME-TAX. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINS T THE RE-ASSESSMENT PROCEEDINGS INITIATED AND THE ORDER PASSED U/S 143 (3) R.W.S. 147 OF THE ACT. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FILED THE RETURN OF INCOME DECLARING INCOME OF RS.1.99 CRORE. THE CASE WAS SELECTED FOR SCRUTINY. NOTICE U/S 143(2) OF THE ACT WAS ISSUED TO THE ASSE SSEE AND ASSESSMENT PROCEEDINGS WERE CONDUCTED. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT VIDE ORDER DT.26.0 3.2013 ON A TOTAL INCOME OF RS.7.02 CRORE (APPROXIMATELY). THEREAFTER, THE ASS ESSING OFFICER RECORDED THE REASONS FOR RE-OPENING THE ASSESSMENT. NOTICE U/S 148 OF THE ACT WAS ISSUED ON 07.03.2014. THE ASSESSEE FURNISHED RETURN OF IN COME DECLARING INCOME OF RS.4.25 CRORE (APPROXIMATELY) ON 19.03.2015. THERE AFTER, THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 OF THE ACT VIDE ORD ER DATED 21.03.2015. CONSEQUENT THERETO, THE COMMISSIONER PASSED AN ORDE R U/S 263 OF THE ACT DATED 22.12.2016. 5. THE ASSESSEE IS AGGRIEVED THAT WHERE THE ORDER HAS BEEN ANNULLED BY THE COMMISSIONER OF INCOME TAX, THEN PROCEEDINGS INITIATED U/S 147 OF THE ACT ARE VOID. ITA NO.1533/PUN/2017 M/S. PIONEER DISTILLERIES LTD. 3 6. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE POINTED THAT ADMITTEDLY NO REASONS FOR RE-OPENING THE ASSESSMENT WERE GIVEN TO THE ASSESSEE AND CONSEQUENTLY THE ASSESSMENT WAS BAD-IN -LAW. IN THIS CONNECTION, HE PLACED RELIANCE ON THE RATIO LAID DO WN IN KAVYASHEETHAL INFRASTRUCTURE PVT. LTD., VS. ITO IN ITA NO.1858/PU N/2017 RELATING TO A.Y. 2009-10 VIDE ORDER DATED 06.02.2019. IT WAS FURTHE R POINTED OUT THAT EVEN THE COMMISSIONER IN HIS ORDER PASSED U/S 263 OF THE ACT ACKNOWLEDGED THAT REASONS FOR RE-OPENING THE ASSESSMENT WERE NOT FU RNISHED TO THE ASSESSEE AND HELD THE ORIGINAL ASSESSMENT ORDER TO BE VOID. ONCE THE ASSESSMENT ORDER IS VOID, HOW CAN THE SAID ORDER PASSED AFTER RE-OPE NING THE ASSESSMENT AGAINST THE ASSESSEE, BE UPHELD. HE ALSO POINTED O UT THAT THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.479/PUN/2017 RELATING TO A.Y. 2010-11 VIDE ORDER DT.10.06.2019 HAS HELD THE ORDER PASSED BY TH E COMMISSIONER TO BE BOTH NOT JUSTIFIED AND BAD-IN-LAW ON THE GROUND, THAT, W HEN THE ASSESSMENT ORDER WAS VOID THEN THE SAME DO NOT STAND IN LAW. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND STRONGLY OPPOSED THE SAID ARGUMENTS OF THE LEA RNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE PRESENT CASE, ORIGINALLY ASSESSMENT WA S COMPLETED U/S 143(3) OF THE ACT VIDE ORDER DATED 26.03.2013. THEREAFTER, R EASONS WERE RECORDED FOR RE- OPENING THE ASSESSMENT AND NOTICE U/S 148 OF THE AC T WAS ISSUED. THE ASSESSEE DID FURNISH THE RETURN OF INCOME ON 19.03 .2015 IN RESPONSE TO NOTICE ISSUED U/S 148 OF THE ACT. VIDE LETTER DATED 07.04 .2015 THE ASSESSEE ASKED FOR SUPPLY OF THE REASONS RECORDED FOR RE-OPENING THE A SSESSMENT WHICH WERE NOT ITA NO.1533/PUN/2017 M/S. PIONEER DISTILLERIES LTD. 4 SUPPLIED TO THE ASSESSEE. IN SUCH CIRCUMSTANCES, W HERE THE REASONS HAVE NOT BEEN SUPPLIED TO THE ASSESSEE, THE RE-ASSESSMENT OR DER CANNOT STANDS IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH C OURT IN THE CASE OF CIT VS. IDBI LTD., REPORTED IN (2016) 76 TAXMANN.COM 227 (B OM) AND ALSO IN THE CASE OF CIT VS. VIDESH SANCHAR NIGAM LIMITED REPORTED I N 21 TAXAMAN.COM 53 (BOM). IN THE ABSENCE OF SUPPLY OF REASONS RECORDE D FOR ISSUE OF RE-OPENING THE ASSESSMENT, THE RE-ASSESSMENT WOULD BE WITHOUT JURISDICTION. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VSNL (SUPR A) HAD FURTHER HELD THAT WHERE THE REASONS ARE FURNISHED ONLY AFTER COMPLETI ON OF ASSESSMENT, RE- ASSESSMENT ORDER COULD NOT BE UPHELD. IN VIEW THER EOF, THE RE-ASSESSMENT PROCEEDINGS INITIATED IN THE PRESENT CASE ON SIMIL AR FACTS NEEDS TO BE QUASHED. 9. ANOTHER ASPECT WHICH NEEDS TO BE TAKEN NOTE OF I S THAT FOR THE YEAR UNDER CONSIDERATION THE COMMISSIONER EXERCISED JURISDICTI ON U/S 263 OF THE ACT AND HAS HELD AS UNDER : ...... AND SINCE, THE COPY OF REASONS RECORDED FOR RE-OPENING OF THE ASSESSMENT WERE NOT FURNISHED TO ASSESSEE TILL DATE OF COMPLETION OF ASSESSMENT, THE ORDER OF THE AO IS VOID, AS ALSO TH E FACT THAT THE OBJECTIONS OF THE ASSESSEE WERE NOT DEALT WITH BY T HE AO BEFORE PASSING THE ASSESSMENT ORDER WHICH MAKES IT PREJUDICIAL TO THE INTEREST OF REVENUE AS FAILURE TO FOLLOW THE ABOVE MANDATORY PR OCEDURE MAKES THE ASSESSMENT ORDER VOID AB INITIO AS HELD BY HONBL E BOMBAY HIGH COURT IN THE ABOVE MENTIONED TWO DECISIONS. (1) CIT VS. VSNL (2012) 340 ITR 66 (BOM). (2) CIT VS. FOMENTO RESORTS AND HOTELS LTD. ITA NO. 71 OF 2006. 10. IN SUCH SITUATION, WHEN THE COMMISSIONER ITSEL F HAD HELD THE RE-ASSESSMENT PROCEEDINGS TO BE INVALID IN THIS CAS E AND HAD ALSO HELD THE ORDER OF THE ASSESSING OFFICER TO BE VOID, THEN TH E ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S 147 OF THE ACT CANNOT STAND IN LAW. HENCE, WE HOLD SO. ITA NO.1533/PUN/2017 M/S. PIONEER DISTILLERIES LTD. 5 11. THE GROUNDS OF APPEAL NO.4 RAISED BY THE ASSESS EE IS THUS ALLOWED AND OTHER GROUNDS OF THE ASSESSEE WOULD BECOME ACADEMIC . 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON THIS 6 TH DAY OF SEPTEMBER, 2019. SD/- SD/- (ANIL CHATURVEDI) (SUSHMA CHOWLA) $ / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 6 TH SEPTEMBER, 2019 . YAMINI ()*!+,-,! / COPY OF THE ORDER IS FORWARDED TO : THE APPELLANT; THE RESPONDENT; & & ' () THE CIT(A)-1, AURANGABAD; THE PR.CIT-1, AURANGABAD *+, --./, & ./ , / DR B, ITAT, PUNE; ,23 4 / GUARD FILE. ( / BY ORDER // TRUE COPY // 567 -8 .9 / SR. PRIVATE SECRETARY & ./ , ITAT, PUNE