M/s. Shree Labdhi Prints, Surat V. The ACIT., Circle-9, Surat

ITA 1553/AHD/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2136 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 21-01-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 11-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANURAG SHARMADR
• Assessee Lawyers: M K PATEL
• Keywords: Reopening of assessment; Depreciation; Audit objection; Period of limitation; Right to appeal
• Section: 143(3); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI BHAVNESH SAINI,JM & SHRI A N PAHUJA,AM ITA NO.1553/AHD/2010 (ASSESSMENT YEAR:-2004-05) M/S SHREE LABDHI PRINTS, 1,2,3, PAIKI, OPP. VISAMA, A K ROAD, SURAT V/S ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-9, SURAT PAN: AABFV 9626 Q [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI M K PATEL, AR REVENUE BY:- SHRI ANURAG SHARMA,DR O R D E R A N PAHUJA: THIS APPEAL BY THE ASSESSEE AGAINST AN ORDER DATED 19- 03-2010 OF THE LD. CIT(APPEALS)-V, SURAT FOR THE ASSESSMENT YEAR (AY) 2004-05, RAISES THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS LAW ON THE SUBJECT, THE LEARNED CIT(A) HAS ERRED IN CONFIR MING THE ACTION OF THE AO IN ALLOWING OF DEPRECIATION ON DELIVERY VAN AT R EDUCED RATE OF 25% THUS MAKING ALLOWANCE OF RS.1,02,739/-. 2. IT IS THEREFORE PRAYED THAT THE ABOVE ADDITION M AY PLEASE BE DELETED AS LEARNED MEMBERS OF THE TRIBUNAL MAY DEEM IT PROPER. 3. APPELLANT CRAVES LEAVE TO ADD, ALTER OR DELETE A NY GROUND(S) EITHER BEFORE OR IN THE COURSE OF THE HEARING OF THE APPEA L. 2 AT THE OUTSET, THE LEARNED AR ON BEHALF OF THE AS SESSEE SOUGHT TO RAISE THE FOLLOWING ADDITIONAL GROUND DURING T HE HEARING OF APPEAL:- THAT THE REOPENING OF ASSESSMENT U/S 147 IS BAD IN LAW AS IT IS BASED ON AUDIT OBJECTION AND HENCE THE ASSESSMENT O RDER BE QUASHED AS INVALID AND VOID AB-INITIO. 2.1 THE LEARNED AR ON BEHALF OF THE ASSESSEE WHILE INVITING OUR ATTENTION TO RULE 16 OF THE ITAT RULES, 1962 AND RE LYING UPON THE DECISIONS IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT (1998) 229 ITR 383 (SC), ADANI EXPORTS VS. DCIT (19 99) 240 ITR224 ITA NO.1553/AHD/2010 2 (GUJ) AND SARTHAK SECURITIES CO. P. LTD. VS. ITO ( 2010) 329 ITR 110 (DELHI) CONTENDED THAT THE FACTS BEING AVAILABLE ON RECORD, THE PURELY LEGAL ADDITIONAL GROUND SHOULD BE ADMITTED AND ADJ UDICATED UPON. TO A QUERY BY THE BENCH, THE LD. AR ON BEHALF OF TH E ASSESSEE DID NOT PLACE BEFORE US THE RELEVANT REASONS RECORDED B Y THE AO BEFORE ISSUE OF NOTICE U/S148 OF THE ACT NOR STATED AS TO WHY THIS GROUND WAS NOT RAISED BEFORE THE LD. CIT(A) OR AT THE TIM E OF FILING OF THE APPEAL. HE MERELY SUBMITTED THAT ASSESSMENT WAS RE OPENED IN CONSEQUENCE OF AN AUDIT OBJECTION. 2.2 ON THE OTHER HAND, THE LEARNED DR WHILE INVITIN G OUR ATTENTION TO THE FINDINGS OF THE AO AND THE LEARNED CIT(A) IN THE IMPUGNED ORDERS, CONTENDED THAT IN THIS CASE THE ASSESSMENT WAS REOPENED U/S 147 OF THE ACT WITH THE ISSUE OF A NOTICE U/S 1 48 OF THE ACT ON 13- 03-2008. THE ASSESSEE DID NOT FILE ANY RETURN OF IN COME IN PURSUANCE TO THE SAID NOTICE, NOR EVEN RESPONDED TO SUBSEQUENT LETTER DATED 04-06-2008 AND A NUMBER OF OPPORTUNITI ES GIVEN RIGHT SINCE THE ISSUE OF NOTICE. CONSEQUENTLY ASSESSMENT WAS COMPLETED U/S 144 OF THE ACT. EVEN BEFORE THE LEARNED CIT(A) THE ASSESSEE DID NOT APPEAR AND APPEAL WAS DISPOSED OF EXPARTE. SIN CE THE RELEVANT FACTS INCORPORATED IN THE REASONS RECORDED BY THE A O FOR REOPENING THE ASSESSMENT ARE NOT AVAILABLE ON RECORD NOR THE ASSESSEE DISPUTED THE FINDINGS OF THE AO REGARDING REOPENING OF THE ASSESSMENT OR ITS COMPLETION U/S 144 READ WITH SEC. 147 OF THE ACT BEFORE THE LEARNED CIT(A), THE ADDITIONAL GROUND SO UGHT TO BE RAISED NOW BEFORE THE TRIBUNAL SHOULD NOT BE ADMITTED. 2.3 IN HIS REJOINDER, THE LEARNED AR ARGUED THAT SI NCE THE ASSESSMENT COMPLETED ON 27-12-2006 U/S 143(3) WAS R EOPENED ON THE BASIS OF AN AUDIT OBJECTION, REOPENING IN ITSEL F WAS BAD IN LAW. TO A QUERY BY THE BENCH, THE LEARNED AR SUBMITTED T HAT THE ADDITIONAL GROUND CAN BE RAISED AT ANY POINT OF TI ME BEFORE THE TRIBUNAL .TO A FURTHER QUERY, THE LEARNED AR ADMITT ED HE DID NOT ITA NO.1553/AHD/2010 3 HAVE COPY OF REASONS RECORDED BY THE AO NOR EVEN AP PROACHED THE AO OR THE LEARNED CIT(A) FOR OBTAINING THE REASONS. 3. WE HAVE HEARD BOTH THE PARTIES ON ADMISSION O F THE AFORESAID ADDITIONAL GROUND AND GONE THROUGH THE FACTS OF THE CASE. WE FIND THAT THE REQUEST FOR ADMISSION OF ADDITIONAL GROU ND IS SIGNED BY THE LD. AR AND NOT BY THE ASSESSEE. THE ISSUE BEFOR E US IS AS TO WHETHER THE TRIBUNAL IS DUTY BOUND TO ADMIT THE ADDITIONAL GROUND OF APPEAL EVEN WHEN THE ASSESSEE DOES NOT EXPLAIN THE CIRCUMSTANCES AS TO WHY SUCH GROUND COULD NOT BE RAISED EARLIER. SECTION 253 OF THE INCOME-TA X ACT, 1961, PROVIDES FOR AN APPEAL TO THE TRIBUNAL AGAINST VARIOUS DECISIONS OF THE INCOME-TAX AUTHORITIES REFERRED TO THEREIN. SUB-SECTION (3) OF SECTION 253 PROVIDES THE LIMITATION OF 60 DAYS FROM THE COMMUNICATION OF THE ORDER SOUGHT TO BE APPEALED. THOUGH THERE IS LIMITATION OF 60 DAYS UNDER SUB-SECTION (3), SUB-SE CTION (5) OF SECTION 253 EMPOWERS THE TRIBUNAL TO PERMIT THE FILING OF THE A PPEAL OR MEMORANDUM OF CROSS- OBJECTION AFTER THE SPECIFIED PERIOD IF IT IS SATIS FIED THAT THERE WAS SUFFICIENT CAUSE FOR NOT PRESENTING IT WITHIN THAT PERIOD. IN THE C ASE WHERE THE APPELLANT FILES AN APPEAL WITHIN THE PERIOD OF LIMITATION, IT IS WELL SETTLED LAW THAT THE APPELLATE AUTHORITIES IF SATISFIED THAT THE ADDITIONAL GROUND RAISED WAS BONA FIDE AND THE SAME COULD NOT HAVE BEEN RAISED EARLIER FOR GOOD RE ASONS, MAY IN ITS DISCRETION, PERMIT THE ASSESSEE TO RAISE AN ADDITIONAL GROUND E VEN AFTER THE EXPIRY OF THE LIMITATION PROVIDED FOR FILING AN APPEAL. THE TRIBU NAL HAS GOT THE DISCRETION TO EITHER ADMIT THE ADDITIONAL GROUND OF APPEAL OR NOT TO ADMIT THE SAME. WHEN WE SAY THAT THE TRIBUNAL HAS THE DISCRETION IT DOES NO T MEAN THAT THE TRIBUNAL DOES NOT HAVE THE DUTY TO EXERCISE THE DISCRETION JUDICI OUSLY. IT IS THE DUTY OF A JUDICIAL AUTHORITY TO EXERCISE ITS DISCRETION MOST JUDICIOUS LY. THEREFORE, WHEN A DISCRETION IS VESTED IN THE JUDICIAL AUTHORITIES, IT IS DUTY B OUND TO SATISFY ITSELF ABOUT THE EXISTENCE OF THE GOOD REASONS BEFORE EXERCISING THE DISCRETION IN FAVOUR OF THE ASSESSEE. IN THIS CONNECTION, WE MAY REFER TO THE FOLLOWING OBSERVATION OF THEIR LORDSHIPS OF THE HONBLE SUPREME COURT IN THE CASE OF JUTE CORPN. OF INDIA LTD. VS. CIT,187 ITR 688, : ' THE OBSERVATIONS IN THE CASE OF GURJARGRAVURES (P.) LTD. [1978] 111 ITR 1 (SC) DO NOT RULE OUT A CASE FOR RAISING AN ADDITIONAL GR OUND BEFORE THE APPELLATE ITA NO.1553/AHD/2010 4 ASSISTANT COMMISSIONER IF THE GROUND SO RAISED COUL D NOT HAVE BEEN RAISED AT THE STAGE WHEN THE RETURN WAS FILED OR WHEN THE ASSESSM ENT ORDER WAS MADE OR IF THE GROUND BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIR CUMSTANCES OR LAW. THERE MAY BE SEVERAL FACTORS JUSTIFYING THE RAISING OF SU CH A NEW PLEA IN AN APPEAL, AND EACH CASE HAS TO BE CONSIDERED ON ITS OWN FACTS. IF THE APPELLATE ASSISTANT COMMISSIONER IS SATISFIED, HE WOULD BE ACTING WITHI N HIS JURISDICTION IN CONSIDERING THE QUESTION SO RAISED IN ALL ITS ASPECTS. HE MUST BE SATISFIED THAT THE GROUND RAISED WAS BONA FIDE AND THAT THE SAME COULD NOT HA VE BEEN RAISED EARLIER FOR GOOD REASONS. WHILE PERMITTING THE ASSESSEE TO RAIS E AN ADDITIONAL GROUND, THE APPELLATE ASSISTANT COMMISSIONER SHOULD EXERCISE HI S DISCRETION IN ACCORDANCE WITH LAW AND REASON.' 3.1. IT IS EVIDENT FROM THE AFORESAID OBSERVATIO NS OF THE HONBLE SUPREME COURT THAT IT IS THE DUTY OF THE APPELLANT TO SATISFY THE APPELLATE AUTHORITY THAT THE ADDITIONAL GROUND RAISED WAS BONA FIDE AND THE SAM E COULD NOT HAVE BEEN RAISED EARLIER FOR GOOD REASONS. IT MAY BE PERTINENT TO ME NTION THAT THEIR LORDSHIPS OF THE SUPREME COURT IN THE CASE OF JUTE CORPN. OF INDIA L TD. DID NOT OVERRULE THE DECISION IN THE CASE OF ADDL. CIT V. GURJARGRAVURES (P.) LTD. [1978] 111 ITR 1 (SC) BUT CLARIFIED THE LAW ON THE ISSUE. THE SAID J UDGMENT OF THE SUPREME COURT, HOWEVER, DOES NOT LAY DOWN THE LAW THAT THE APPELLA TE ASSISTANT COMMISSIONER OR THE TRIBUNAL IS BOUND TO ADMIT EVERY ADDITIONAL GRO UND OF APPEAL RAISED BY THE ASSESSEE IF IT ARISES OUT OF THE IMPUGNED ORDER. IF THAT VIEW IS TAKEN, IT WILL DEFEAT THE PROVISIONS OF THE ACT, WHICH PROVIDE FOR LIMITA TION FOR FILING OF THE APPEALS. 3.2 UNDOUBTEDLY THERE IS NOTHING IN SECTION 2 54(1) OF THE INCOME-TAX ACT WHICH LIMITS THE JURISDICTION OF THE APPELLATE TRIB UNAL IN ANY MANNER. THE PHRASE 'PASS SUCH ORDER THEREON' THEREIN DOES NOT IN ANY WAY RESTRICT THE JURISDICTION OF THE TRIBUNAL BUT, ON THE CONTRARY, CONFERS THE WIDE ST POSSIBLE JURISDICTION ON THE APPELLATE TRIBUNAL INCLUDING JURISDICTION TO PERMIT ANY ADDITIONAL GROUND OF APPEAL IF, IN ITS DISCRETION, AND FOR GOOD REASONS, IT THI NKS IT NECESSARY OR PERMISSIBLE TO DO SO. THE TRIBUNAL HAS THE DISCRETION TO ALLOW RAI SING OF ADDITIONAL GROUND OF APPEAL AND IT HAS TO BE SATISFIED ABOUT THE EXISTE NCE OF GOOD REASONS FOR THE OMISSION OF THE GROUND AT THE ORIGINAL STAGE. 3.3. IN THE INSTANT CASE BEFORE US , THE ASSESSEE DID NOT FILE ANY RETURN IN RESPONSE TO A NOTICE U/S 148 OF THE ACT SERVED UPON THE ASSESSEE ON 13.3.2008. DESPITE SUFFICIENT OPPORTUNITY PROVIDED BY THE AO, THE ASSESSEE DID NOT APPEAR ITA NO.1553/AHD/2010 5 BEFORE THE AO NOR APPEAR TO HAVE SOUGHT OR EVEN DI SPUTED THE REASONS RECORDED BY THE AO FOR ISSUING NOTICE U/S 148 OF THE ACT. CO NSEQUENTLY, ASSESSMENT HAS BEEN COMPLETED U/S 144 READ WITH SEC. 147 OF THE A CT. EVEN AFTER FILING THE APPEAL BEFORE THE LD. CIT(A) THE ASSESSEE DID NOT A PPEAR NOR RAISED ANY GROUND RELATING TO VALIDITY OF REOPENING OF THE ASSESSMENT OR EVEN ITS COMPLETION U/S 144 READ WITH SEC. 147 OF THE ACT. APPARENTLY, THE ASSE SSEE ACCEPTED THE REASONS FOR REOPENING THE ASSESSMENT. NOT ONLY THAT EVEN WHEN A PPEAL IS FILED BEFORE THE ITAT, NO SUCH GROUND RELATING TO THE VALIDITY OF RE OPENING OF THE ASSESSMENT HAS BEEN RAISED. THE APPEAL WAS FIXED FOR HEARING ON 20 .8.2010 & AGAIN ON 15.10.2010. NO SUCH GROUND WAS RAISED. EVEN WHEN N OTICE FOR HEARING ON 21.1.2011 WAS SERVED ON THE ASSESSEE, NO ATTEMPT WAS MADE TO RAISE ANY ADDITIONAL GROUND. NOW , THE LD. AR APPEARING BEFO RE US HAS SOUGHT TO RAISE THE ADDITIONAL GROUND , WHICH IS NOT EVEN SIGNED BY THE ASSESSEE. EVEN THEN NO REASONS HAVE BEEN ADDUCED AT ALL AS TO WHY SUCH A G ROUND COULD NOT BE RAISED EARLIER. THOUGH THE LD. AR SUBMITTED THAT ALL THE F ACTS ARE ON RECORD, WHEN A QUERY WAS RAISED AS TO THE REASONS FOR REOPENING THE ASSE SSMENT, THE LD. AR COULD NOT PLACE BEFORE US A COPY OF REASONS RECORDED BY THE AO BEFORE ISSUE OF NOTICE U/S 148 OF THE ACT. APPARENTLY, THE ASSESSEE IS NOT EV EN AWARE OF THE REASONS, HAVING CHOSEN NOT TO APPEAR BEFORE ANY OF THE LOWER AUTHORITIES. IN THESE CIRCUMSTANCES, ESPECIALLY WHEN IN THIS CASE THE LEA RNED COUNSEL FOR THE ASSESSEE DID NOT ADDUCE ANY REASON AT ALL FOR OMISSION OF TH E ADDITIONAL GROUND IN THE MEMO OF APPEAL FILED BEFORE THE TRIBUNAL, WE HAVE N O OPTION BUT TO DECLINE TO EXERCISE THE DISCRETION IN FAVOUR OF THE ASSESSEE. AS ALREADY POINTED OUT, THE DISCRETION VESTED IN THE JUDICIAL AUTHORITY CANNOT BE EXERCISED ARBITRARILY. THERE IS A DUTY UPON THE TRIBUNAL TO EXERCISE THE DISCRETION IN A MOST JUDICIAL MANNER. WHEN THE REQUIREMENT OF LAW IS TO SATISFY THE TRIBU NAL ABOUT THE EXISTENCE OF GOOD REASONS FOR THE OMISSION OF THE GROUND IN THE ORIGI NAL APPEAL THEN ON THE FAILURE OF THE ASSESSEE OR HIS REPRESENTATIVE TO GIVE ANY REAS ON MUCH LESS A GOOD REASON FOR THE OMISSION, THE CONSEQUENCES ARE OBVIOUS. IN THE GIVEN CIRCUMSTANCES, WE CANNOT ENTERTAIN THE ADDITIONAL GROUND OF APPEAL RA ISED BY THE ASSESSEE. 3.4 EVEN OTHERWISE ,IF THERE IS NO DECISION O F THE FIRST APPELLATE AUTHORITY AND NO GROUND IS TAKEN IN THE APPEAL FILED BEFORE HIM ON A PARTICULAR PORTION OF THE ITA NO.1553/AHD/2010 6 ASSESSMENT, IT CAN NOT BE SAID THAT THE ASSESSEE IS STILL AGGRIEVED BY THE DECISION OF THE FIRST APPELLATE AUTHORITY IN NOT GRANTING SU CH RELIEF TO HIM. HONBLE JURISDICTIONAL HIGH COURT IN THEIR DECISION IN CIT VS. KARAMCHAND PREMCHAND PRIVATE LTD.,74 ITR 254(GUJ) HELD THAT THE TRIBUNA L IS NOT ENTITLED TO ALLOW THE ASSESSEE TO AGITATE AN ISSUE WHICH WAS NOT RAISED B EFORE THE FIRST APPELLATE AUTHORITY AND THERE IS NO DECISION OF SUCH AUTHO RITY ON THE ISSUE, EVEN IF THE ASSESSEE HAS RAISED THE ISSUE IN THE MEMORANDUM OF APPEAL AND SEEKS TO AGITATE IT. .SIMILARLY IN SMT. ARUDHANTI BALKRISHNA VS. ITO,103 ITR 763(GUJ), THE HONBLE JURISDICTIONAL HIGH COURT HELD THAT THE ASS ESSEE IS NOT ENTITLED TO QUESTION THE DECISION OF THE OFFICER ON A POINT IN AN APPEAL TO THE TRIBUNAL, WHICH WAS NOT RAISED OR DECIDED BY THE APPELLATE ASSISTANT COMMIS SIONER. SIMILAR VIEW WAS TAKEN IN HUKAMCHAND & MANNALAL & CO.,126 ITR 251(MP ) AND UGAR SUGAR WORKS LTD. VS. CIT,141 ITR 326(BOM.). IN CIT V. BEGUM NO OR BANU ALLADIN [1993] 204 ITR 166 (AP- FULL BENCH), THEIR LORDSHIPS OF ANDHRA PRADESH HIGH COURT HAVE HELD THAT THE JURISDICTION OF THE TRIBUNAL IS RESTRICTED TO SUBJECT-MATTER OF DISPUTE BEFORE THE FIRST APPELLATE AUTHORITY. THEIR LORDSHIPS AFTE R ANALYZING VARIOUS DECISIONS HAVE OBSERVED THAT THE SUBJECT-MATTER OF APPEAL BEFORE THE TRIBUNAL CANNOT BE ANYTHING DIFFERENT FROM THE SUBJECT-MATTER OF APPEA L BEFORE THE APPELLATE ASSISTANT COMMISSIONER AND NECESSARILY IT SHOULD BE SOMETHING WHICH ARISES OUT OF THE DETERMINATION MADE BY THE APPELLATE ASSISTAN T COMMISSIONER. HOWEVER, THERE IS NO TABOO AGAINST RAISING A NEW GROUND OR A NEW PLEA TOUCHING THE SAME SUBJECT-MATTER. IF THE ASSESSEE IS PRECLUDED FROM T AKING A NEW GROUND UNRELATED TO THE SUBJECT-MATTER BEFORE THE APPELLATE ASSISTAN T COMMISSIONER, HE CANNOT AVAIL OF RULE 11 AND OBTAIN LEAVE OF THE TRIBUNAL T O RAISE SUCH GROUND FOR THE FIRST TIME. THIS RULE MUST BE READ SUBSERVIENT TO THE PRO VISION IN THE ACT PROVIDING FOR THE RIGHT OF APPEAL. SO READ, IT IS CLEAR THAT THE ADDITIONAL GROUND THAT COULD BE PERMITTED TO BE RAISED UNDER RULE 11 IS THE ONE THA T SHOULD RELATE TO THE SUBJECT- MATTER OF THE APPEAL WHICH, IN TURN, IS LINKED TO T HE SUBJECT-MATTER OF THE ORDER PASSED BY THE FIRST APPELLATE AUTHORITY. EVEN FROM THE STAND POINT OF GENERAL PRINCIPLES THERE IS A SALUTARY PRINCIPLE UNDERLYING A TAXING STATUTE THAT THERE SHOULD BE A FINALITY TO THE PROCEEDINGS SO THAT AN ELEMENT OF CERTAINTY COULD BE USHERED IN AS EARLY AS POSSIBLE IN THE INTERESTS OF BOTH SI DES. THE ASSESSMENTS NEED NOT BE THROWN TO CONTEST THROUGHOUT THE STAGES OF APPEA L, REVISION AND REFERENCE. ITA NO.1553/AHD/2010 7 THERE IS A FALLACY IN THINKING THAT, IN REALITY THE RE IS NO LIS BETWEEN THE PARTIES BEFORE THE TRIBUNAL AND THAT THE TRIBUNAL SHOULD SE T UPON ITSELF THE TASK OF RECOMPUTING THE TAX LIABILITY IRRESPECTIVE OF WHETH ER THE GROUND WAS RAISED BEFORE THE APPELLATE ASSISTANT COMMISSIONER OR EVEN BEFORE IT. HONBLE FULL BENCH ALSO OBSERVED THAT A DECISION OF THE SUPREME COURT TAKES ITS COLOUR FROM THE QUESTION INVOLVED IN THE CASE AND WHILE APPLYING THE DECISIO N TO A LATER CASE, THE COURTS MUST CAREFULLY TRY TO ASCERTAIN THE TRUE PRINCIPLE LAID DOWN BY THE DECISION OF THE SUPREME COURT. IT IS NOT PROPER TO PICK OUT WORDS O R SENTENCES FROM THE JUDGMENT DIVORCED FROM THE CONTEXT. IN CIT V. KANPUR COAL SY NDICATE LTD. [1964] 53 ITR 225 (SC), THE SUPREME COURT WAS ONLY HIGHLIGHTING THE PLENARY POWERS OF THE APPELLATE ASSISTANT COMMISSIONER BUT NOT THE TRIBUN AL. IN CIT V. MAHALAKSHMI TEXTILE MILLS LTD. [1967] 66 ITR 710 (SC), THE SUPREME COURT CANNOT BE SAID TO HAVE LAID DOWN A PROPOSITION THAT ANY QUESTION, WHE THER IT RELATES TO THE SAME SUBJECT-MATTER OR NOT, CAN BE RAISED AT ANY TIME BE FORE THE TRIBUNAL AND THE TRIBUNAL CAN GRANT RELIEF ON AN ITEM OF INCOME WHIC H WAS NEVER DISPUTED EARLIER, HONBLE HIGH COURT CONCLUDED. 3.5 AS REGARDS RELIANCE ON THE DECISION OF THE HONBLE APEX COURT IN NATIONAL THERMAL POWER CO. LTD.(SUPRA), IT WAS HELD IN THE S AID DECISION THAT THE POWER OF THE TRIBUNAL UNDER SECTION 254 OF THE INCOME-TAX ACT, 1961, IS TO ENTERTAIN FOR THE FIRST TIME A POINT OF LAW PROVIDE D THE FACTS ON THE BASIS OF WHICH THE ISSUE OF LAW CAN BE RAISED ARE ON RECORDS BEF ORE THE TRIBUNAL. HOWEVER, IN THE INSTANT CASE, AS STATED ABOVE THE ASSESSEE DI D NOT APPEAR BEFORE THE AO OR THE LD. CIT(A) NOR SEEMS TO BE AWARE OF THE EXACT REASONS FOR REOPENING OF THE ASSESSMENT. APPARENTLY, WHEN THE LD. AR IS NOT AWAR E OF COMPLETE FACTS, THESE COULD NOT BE PLACED BEFORE US. THUS, IN THE ABSENCE OF COMPLETE FACTS BEING AVAILABLE BEFORE US IN THE INSTANT CASE AND THE ASS ESSEE BEING NOT DILIGENT, THE RELIANCE BY THE LD. AR ON THE SAID DECISION IS TOTA LLY MISPLACED. THE OTHER TWO DECISIONS RELIED UPON BY THE LD. AR IN THE CASE OF ADANI EXPORTS(SUPRA) & SARTHAK SECURITIES CO. P. LTD.(SUPRA) RELATE TO REO PENING OF THE ASSESSMENT AND THUS, ARE NOT RELEVANT TO THE ISSUE OF LEAVE FOR ADMISSION OF ADDITIONAL GROUND OF APPEAL. IN THE AB SENCE OF REASONS RECORDED BY THE AO FOR REOPENING THE ASSESSMENT, IT CAN NOT BE SAID ITA NO.1553/AHD/2010 8 THAT ASSESSMENT WAS REOPENED ONLY ON THE BASIS OF AN AUDIT OBJECTION. NO MATERIAL HAS BEEN PLACED BEFORE US T HAT THE AUDIT OBJECTION ALONE FORMED THE BASIS FOR THE REASONS R ECORDED BY THE AO BEFORE REOPENING THE ASSESSMENT. 3.6 IN VIEW OF THE FOREGOING, ON A CONSIDER ATION OF THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE BEFORE US, WE HOLD T HAT NO REASONS AT ALL HAVE BEEN SHOWN BY THE ASSESSEE AS TO WHY THE AFORESAID ADDITIONAL GROUND RELATING TO VALIDITY OF REOPENING OF THE ASSESSMENT WAS NOT RAISED BEFORE THE CIT (APPEALS). NO REASONS AT ALL HAVE BEEN SHOWN AS TO WHY THE GROUND WAS NOT RAISED AT THE TIME OF FILING THE APPEAL BEFORE THE TRIBUNAL. THERE IS NOTHING ON RECORD TO ENABLE US TO HOLD THAT THERE WAS BONA FID E OMISSION ON THE PART OF THE ASSESSEE IN RAISING THE IMPUGNED ADDITIONAL GROUND, ESPECIALLY WHEN THE ASSESSEE NEITHER FILED ANY RETURN IN RESPONSE TO NO TICE U/S 148 OF THE ACT NOR CARED TO APPEAR BEFORE THE AO OR THE LD. CIT(A) AND NOR EVEN SEEMS TO BE AWARE OF THE EXACT REASONS FOR REOPENING OF THE ASSESSME NT. IN ANY CASE NO SUCH REASONS HAVE BEEN PLACED BEFORE US NOR THE ASSESSEE DISPUTED THE REASONS RECORDED, BEFORE THE AO OR THE LD. CIT(A) OR COMPLE TION OF ASSESSMENT U/S 144 READ WITH SEC. 147 OF THE ACT. WE, THEREFORE, DECLI NE TO ADMIT THE ADDITIONAL GROUND SOUGHT TO BE TAKEN BEFORE US. 4. COMING NOW TO THE MAIN ISSUE IN GROUND NO.1 REGARDING THE CLAIM OF DEPRECIATION AT THE HIGHER RATE 40%, WE FI ND THAT THE AO RESTRICTED THE CLAIM OF DEPRECIATION ON DELIVERY VA N @ 25%, THERE BEING NO EVIDENCE THAT THE ASSESSEE WAS IN THE BUSI NESS OF HIRING OF VEHICLES. DESPITE NUMBER OF OPPORTUNITIES GIVEN BY THE AO, THE ASSESSEE CHOSE NOT TO APPEAR BEFORE THE AO AND EVEN WHEN THE APPEAL WAS FILED BEFORE THE LEARNED CIT(A), NONE AP PEARED NOR ANY WRITTEN SUBMISSIONS WERE FILED. ON ACCOUNT OF REPEA TED FAILURE ON THE PART OF THE ASSESSEE, THE LEARNED CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE IN THE FOLLOWING TERMS:- 3. DURING THE APPELLATE PROCEEDINGS, NOBODY APPEARE D NOR ANY WRITTEN SUBMISSION WAS FILED. THE REPEATED FAILURE ON THE P ART OF THE APPELLANT ONLY ITA NO.1553/AHD/2010 9 SHOWS THAT THE ASSESSEE HAS NOTHING TO REPLY. IT IS ALSO PERTINENT TO MENTION THAT THE DEPRECIATION @ 40% IS ALLOWABLE WH EN THE ASSESSEE IS ENGAGED IN THE BUSINESS OF HIRING THE VEHICLE. IN T HE INSTANT CASE, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROCESSING O F ART SILK CLOTH. IT IS NOT IN THE BUSINESS OF HIRING VEHICLE. THEREFORE, THE A SSESSEE IS ELIGIBLE TO THE DEPRECIATION @ 25% ON VEHICLE. THE DISALLOWANCE MAD E BY THE ASSESSING OFFICER IS IN ORDER AND THE SAME IS CONFIRMED. 6 THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED AR ON B EHALF OF THE ASSESSEE DID NOT DISPUTE THE FINDINGS OF THE LEARNE D CIT(A) ON MERITS OF THE CLAIM WHILE THE LEARNED DR, ON THE OT HER HAND, SUPPORTED THE FINDINGS OF THE LEARNED CIT(A). 7 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH T HE FACTS OF THE CASE. WE FIND THAT THE LEARNED CIT(A) UPHELD TH E COMPLETION OF ASSESSMENT U/S 144 OF THE ACT SINCE DESPITE REPEATE D OPPORTUNITIES, THE ASSESSEE DID NOT EITHER FILE RETURN OF INCOME I N RESPONSE TO NOTICE U/S 148 OF THE ACT NOR RESPONDED TO OTHER ST ATUTORY NOTICES. THE ASSESSEE HAS NOT DISPUTED THE COMPLETION OF ASS ESSMENT U/S 144 READ WITH SECTION 147 OF THE ACT EITHER BEFORE THE LD. CIT(A) OR EVEN BEFORE US. THE ONLY DISPUTE IS REGARDING THE C LAIM OF DEPRECIATION AT THE RATE OF 40% INSTEAD OF 25% ALLO WED BY THE AO. INDISPUTABLY, THE ASSESSEE IS ENGAGED IN THE BUSINE SS OF PROCESSING OF ART SILK CLOTH AND THERE IS NOTHING TO SUGGEST T HAT THE ASSESSEE IS ALSO IN THE BUSINESS OF HIRING OF VEHICLES. SINCE D EPRECIATION @ 40% IS AVAILABLE ONLY IN TERMS OF ENTRY (3)(II)&(III) I N OLD APPENDIX-I PART-A (III) OF INCOME-TAX RULES, 1962, AND THE ASSESSEE B EING NOT IN THE BUSINESS OF HIRING OF VEHICLES AND ITS CASE NOT FAL LING WITHIN THE AMBIT OF THESE ENTRIES , IS, THUS, NOT ENTITLED TO THE DEPRECIATION @ 40%. IN THE ABSENCE OF ANY BASIS FOR TAKING A DIFFERENT VIE W IN THE MATTER, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). THEREFORE, GROUND NO.1 IN THE APPEAL IS DISMISSED. 8 GROUND NO.2 BEING MERELY PRAYER DOES NOT REQUIRE ANY SEPARATE ADJUDICATION AND IS, THEREFORE, DISMISSED. ITA NO.1553/AHD/2010 10 9 IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 28 -01-2011 SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 28 -01-2011 COPY OF THE ORDER FORWARDED TO: 1. M/S SHREE LABDHI PRINTS, 1,2,3, PAIKI, OPP. VISA MA, A K ROAD, SURAT 2. THE ACIT, CIRCLE-9, SURAT 3. CIT CONCERNED 4. CIT(A)-V, SURAT 5. DR, ITAT, AHMEDABAD BENCH-C, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD