The ACIT, Central Circle-2, Baroda V. M/s. R.B. Construction, Nadiad

ITA 1537/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89261 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-04-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 01-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Tangible material; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD 00 , ! ' #$, % & BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER !./ ITA NO.1537/AHD/2011 % ) *)/ ASSESSMENT YEAR: 2002-03 ACIT, CENTRAL CIRCLE-2, BARODA. VS M/S. R.B. CONSTRUCTION, NAVKAR FLAT, BEHIND KIDNEY HOSPITAL, NADIAD. PAN : AACFR 3677 A +, / (APPELLANT) -. +, / (RESPONDENT) REVENUE BY : SHRI NIMESH YADAV, SR. DR. ASSESSEE(S) BY: SHRI S.N. SOPARKAR, AR / DATE OF HEARING : 06/04/2015 / DATE OF PRONOUNCEMENT: 10/04/2015 // O R D E R PER SHRI N.S. SAINI, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-IV, AHMEDABAD DATED 08.03.2011. 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEA L:- 1. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS.27,39,485/-, WHICH WAS MADE AS UNEXP LAINED CASH. 2. THE LEARNED CIT(A) FURTHER ERRED IN LAW AND ON FACT S IN DELETING THE ADDITION OF RS.34,77,952/-, WHICH WAS MADE OUT OF UNEXPLAINED CASH RECEIPTS. ITA NO.1537/AHD/2011 RB CONSTRUCTION FOR AY 2002-2003 2 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE REST ORED TO THE ABOVE EXTENT. 3. AT THE OUTSET, THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT HE IS SUPPORTING THE ORDER OF CIT(A) UNDER RULE 27 OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963 WHICH PRO VIDES THAT THE RESPONDENT, THOUGH HE MAY HAVE NOT APPEALED, MAY SU PPORT THE ORDER APPEALED AGAINST ON ANY OF THE GROUND DECIDED AGAIN ST HIM. HE POINTED OUT FROM FORM NO.35, BEING THE APPEAL MEMO, FILED B EFORE THE CIT(A) THAT HE HAD CHALLENGED INITIATION OF THE REASSESSME NT PROCEEDINGS BEFORE THE CIT(A) BY RAISING THE FOLLOWING GROUNDS :- 1. (A) ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED ASSESSING OFFICER HAD NO JURISDICTION T O INITIATE REASSESSMENT PROCEEDINGS AND TO FRAME REASSESSMENT ORDER UNDER SECTION 147 OF THE I.T. ACT. (B) THE REASSESSMENT PROCEEDINGS INITIATED U/S. 147 OF THE I.T. ACT ARE ALSO ILLEGAL BEING TIME BARRED ON ACCO UNT OF THE FACT THAT SUCH PROCEEDINGS ARE BAD IN LAW IN TERMS OF TH E PROVISIONS OF SECTION 149(1)(B). 4. HE POINTED OUT FROM THE ORDER OF CIT(A) DATED 08 .03.2011 THAT THIS GROUND WAS DECIDED BY THE CIT(A) AGAINST THE A SSESSEE BY OBSERVING AS UNDER:- 2.12 CONSIDERING THE FACTS OF THE CASE AND FOLLOW ING THE AFORESAID DECISIONS OF THE HONBLE SUPREME COURT AN D DIFFERENT HONBLE HIGH COURTS INCLUDING THAT OF THE HONBLE G UJRAT HIGH COURT AS REFERRED TO ABOVE, I AM OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER WAS HAVING DEFINITE INFORMATI ON OF ESCAPEMENT OF INCOME. W HETHER FINALLY IT WAS DETERMINED AS ESCAPED INCOME OR NOT WAS NOT TO BE CONSIDERED WHIL E ITA NO.1537/AHD/2011 RB CONSTRUCTION FOR AY 2002-2003 3 REOPENING THE ASSESSMENT. THE ASSESSING OFFICER WA S THEREFORE, JUSTIFIED IN REOPENING THE ASSESSMENT AN D SUCH OF HIS ACTION IS SUSTAINABLE IN THE EYES OF LAW. THE REOP ENING OF THE ASSESSMENT IN CASE OF THE ASSESSEE IS HEREBY SUSTAI NED AND HELD TO BE IN ORDER. THE FIRST GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 5. THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE FU RTHER SUBMITTED THAT THE ASSESSEE HAS RAISED OBJECTIONS TO THE ISSU ANCE OF NOTICE U/S 148 OF THE ACT VIDE LETTER DATED 11.11.2009 WHICH W AS RECEIVED IN THE OFFICE OF THE ASSESSING OFFICER ON 16.11.2009. HE HAS PLACED A COPY OF THE SAID LETTER ON RECORD. HE FURTHER SUBMITTED TH AT THE IMPUGNED ORDER WAS PASSED WITHOUT DISPOSING OFF THE OBJECTIONS OF THE ASSESSEE SEPARATELY AND WITHOUT WAITING FOR REASONABLE TIME BEFORE PASSING THE IMPUGNED RE-ASSESSMENT ORDER AND THEREFORE, THE RE- ASSESSMENT ORDER IS LIABLE TO BE QUASHED. THE AR OF THE ASSESSEE RE LIED UPON THE ORDER OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GENER AL MOTORS INDIA P. LTD. V. DCIT, [2013] 354 ITR 0244 (GUJ.). HE FURT HER SUBMITTED THAT THIS BENCH OF THE TRIBUNAL IN THE CASE OF SHRI RAME SHBHAI BABULAL SHAH VS. ACIT VIDE ORDER DATED 28.11.2014 IN ITA NO.1406 /AHD/2011 IN A.Y. 2002-03, FOLLOWING THE ORDER OF HONBLE GUJARAT HIG H COURT IN THE CASE OF GENERAL MOTORS INDIA P. LTD. (SUPRA), QUASHED TH E RE-ASSESSMENT ORDER ON THE GROUND THAT THE ASSESSEES OBJECTIONS TO THE RE-ASSESSMENT PROCEEDINGS WERE NOT DISPOSED OFF BY THE ASSESSING OFFICER BY PASSING A SEPARATE ORDER, BUT WAS DISPOSED OFF IN THE ASSESSM ENT ORDER DATED 20.11.2009 ITSELF, PASSED U/S 143(3) R.W.S. 147 OF THE ACT. 6. ON THE OTHER HAND, THE DEPARTMENTAL REPRESENTATI VE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON REC ORD. IN THE INSTANT ITA NO.1537/AHD/2011 RB CONSTRUCTION FOR AY 2002-2003 4 CASE, THE RESPONDENT ASSESSEE IN TERMS OF RULE 27 O F THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963 SUPPORTED THE ORDER OF CIT(A) ON THE GROUND THAT THE IMPUGNED ASSESSMENT ORDER WAS BAD I N LAW AS THE REASSESSMENT WAS MADE WITHOUT DISPOSING OFF THE OBJ ECTIONS RAISED BY THE ASSESSEE AGAINST THE INITIATION OF REASSESSMENT PROCEEDINGS BY A SEPARATE ORDER. WE FIND THAT, IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE FILED HIS OBJECTIONS AGAINST THE ISSUANCE OF NOTICE U/S 148 OF THE ACT VIDE HIS LETTER DATED 11.11.2009 WHI CH WAS RECEIVED BY THE OFFICE OF THE ASSESSING OFFICER ON 16.11.2009. THEREAFTER, THE ASSESSING OFFICER PASSED THE IMPUGNED RE-ASSESSMENT ORDER ON 20.11.2009, DISPOSING OFF THE OBJECTIONS TO RE-ASSE SSMENT PROCEEDINGS OF THE ASSESSEE IN THE ORDER ITSELF. THUS, THESE F ACTS SHOW THAT THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE ISSUA NCE OF NOTICE U/S 148 OF THE ACT WERE NOT DISPOSED OFF BY THE ASSESSING O FFICER BY PASSING A SPEAKING ORDER THEREON AND ALLOWING REASONABLE TIME TO THE ASSESSEE AFTER COMMUNICATING THE FATE OF THE OBJECTIONS BEFO RE PROCEEDING WITH THE RE-ASSESSMENT. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA P. LTD V. DCIT (SUPRA) HAS HEL D AS UNDER:- FROM THE AFORESAID DISCUSSION, WE ARE OF THE CONSI DERED OPINION THAT THE WRIT PETITION UNDER ARTICLE 226 OF THE CON STITUTION OF INDIA IS MAINTAINABLE WHERE NO ORDER HAS BEEN PASSED BY T HE ASSESSING OFFICER DECIDING THE OBJECTION FILED BY THE ASSESSE E UNDER SECTION 148 OF THE ACT AND ASSESSMENT ORDER HAS BEEN PASSED OR THE ORDER DECIDING AN OBJECTION UNDER SECTION 148 OF TH E ACT HAS NOT BEEN COMMUNICATED TO THE ASSESSEE AND ASSESSMENT OR DER HAS BEEN PASSED OR THE OBJECTION FILED UNDER SECTION 14 8 HAS BEEN DECIDED ALONG WITH THE ASSESSMENT ORDER. IF THE OBJ ECTION UNDER SECTION 148 HAS BEEN REJECTED WITHOUT THERE BEING A NY TANGIBLE MATERIAL AVAILABLE WITH THE ASSESSING OFFICER TO FO RM AN OPINION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT AND IN THE ABSENCE OF REASONS HAVING DIRECT LINK WITH THE FORM ATION OF THE BELIEF, THE WRIT COURT UNDER ARTICLE 226 CAN QUASH THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT. THE WRIT PETITION FI LED BY THE PETITIONER IS MAINTAINABLE. THE ASSESSING OFFICER I S MANDATED TO DECIDE THE OBJECTION TO THE NOTICE UNDER SECTION 14 8 AND SUPPLY OR ITA NO.1537/AHD/2011 RB CONSTRUCTION FOR AY 2002-2003 5 COMMUNICATE IT TO THE ASSESSEE. THE ASSESSEE GETS A N OPPORTUNITY TO CHALLENGE THE ORDER IN A WRIT PETITION. THEREAFT ER, THE ASSESSING OFFICER MAY PASS THE REASSESSMENT ORDER. WE HOLD TH AT IT WAS NOT OPEN TO THE ASSESSING OFFICER TO DECIDE THE OBJECTI ON TO NOTICE UNDER SECTION 148 BY A COMPOSITE ASSESSMENT ORDER. THE ASSESSING OFFICER WAS REQUIRED TO, FIRST DECIDE THE OBJECTION OF THE ASSESSEE FILED UNDER SECTION 148 AND SERVE A COPY O F THE ORDER ON THE ASSESSEE. AND AFTER GIVING SOME REASONABLE TIME TO THE ASSESSEE FOR CHALLENGING HIS ORDER, IT WAS OPEN TO HIM TO PASS AN ASSESSMENT ORDER. THIS WAS NOT DONE BY THE ASSESSI NG OFFICER, THEREFORE, THE ORDER ON THE OBJECTION TO THE NOTICE UNDER SECTION 148 AND THE ASSESSMENT ORDER PASSED UNDER THE ACT D ESERVES TO BE QUASHED. 8. THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECI SION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED ORDER OF RE-ASSESSMENT PASSED BY THE ASSES SING OFFICER WITHOUT DISPOSING OFF THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE ISSUANCE OF NOTICE U/S 148 BY A SEPARATE ORDER IS L IABLE TO BE QUASHED. WE ORDER ACCORDINGLY. THUS, THIS GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 9. AS WE HAVE QUASHED THE RE-ASSESSMENT ORDER DATED 20.11.2009, THE GROUNDS OF APPEAL RAISED BY THE REVENUE ON THE MERITS OF THE ADDITION IN THIS APPEAL HAVE BECOME INFRUCTUOUS AND HENCE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 10 TH OF APRIL, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 10/04/2015 PBN/* ITA NO.1537/AHD/2011 RB CONSTRUCTION FOR AY 2002-2003 6 / 0 -%$12 32*$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! () / THE CIT(A)-IV, AHMEDABAD 5. $%& '', , )*++ / DR, ITAT, AHMEDABAD 6. &,- . / GUARD FILE. / ' / BY ORDER, TRUE COPY 4/ !5 ( DY./ASSTT. REGISTRAR) , / ITAT, AHMEDABAD