THE PANCHARATNA CO OP HSG SOC. LTD, MUMBAI V. ITO 16(3)(1), MUMBAI

ITA 1613/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2836 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 30-12-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 07-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL,MUMBAI BENCH C, MUMBAI BEFORE SH RAJENDRA, ACCOUNTANT MEMBER AND SH PAWAN SINGH, JUDICIAL MEMBER ITA NO.1613/MUM/2012 FOR ASSESSMENT YEAR: 2001-02 THE PANCHRATNA CO-OP. HSG. SOC. LTD., OFFICE NO. 21, PANCHRATNA MAMA PARMANAND MARG, MUMBAI-400004. PAN: AAAAT3507C VS. ITO 16(3)(1), 2 ND FLOOR, MATRU MANDIR, TARDEO, MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MEHULLE V. CHOKSI& MS. ROHINI WAGH (AR) REVENUE BY : SHRI NAVEEN GUPTA (DR) DATE OF HEARING : 20.06.2016 DATE OF ORDER : 22.06.2016 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF CIT(A)-28, MUMBAI DATED 30.12.2011 FOR ASSESSMENT YEAR (AY) 20 01-02. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL: I-01 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE RE- ASSESSMENT UNDER SECTION 147 OF THE ACT IS INVALID, ILLEGAL AND BAD IN LAW. I-02 THE APPELLANT SUBMITS THAT THE LEARNED AO HAS ERRED IN ISSUING NOTICE U/S 148 OF THE ACT FOR REOPENING THE CASE. I-03 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LEARNED AO HAS COMPLETED THE REASSESSMENT IN AN IMP ROPER, ARBITRARY AND UNREASONABLE MANNER WITHOUT APPRECIATION OF FACTS; THE APPELLANT SUBMITS THAT THE REASSESSMENT ORDER IS WITHOUT LAWFUL JURIS DICTION AND HENCE IS LIABLE TO BE ANNULLED AND QUASHED. II-01 ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT ALLOWING EXEMPTION IN RESPE CT OF TRANSFER FEES ACCOUNTED AS CONTRIBUTION TO REPAIRS & RENOVATION F UND IN ENTIRETY AS ALLOWED BY HON'BLE ITAT IN THE APPELLANT'S OWN CASE FOR ASST. YEARS 2002- 2 ITA NO. 1613/MUM/2012- THE PANCHRATNA CO-OP. HSG. S OC. LTD. 03, 2004-05 AND 2006-07 VIDE ORDER DATED AUGUST 26, 2011 IN ITA NOS. 2858 TO 2860/MUM/2010. II-02 THE LEARNED CIT(A) HAS ERRED IN NOT GRANTING FULL RELIEF IN RESPECT OF CONTRIBUTION TO REPAIRS & RENOVATION FUND (TRANSFER FEES) AND DIRECTING THE AO TO MAKE MISCELLANEOUS PETITION BEFORE ITAT D ISREGARDING THE JURISDICTION DISCIPLINE AND PRINCIPLES OF JURISPRUD ENCE. II-03 THE APPELLANT PRAYS THAT THE INCOME FROM CONT RIBUTION TO REPAIRS & RENOVATION FUND (TRANSFER FEES) MAY BE TREATED AS E XEMPT ON THE BASIS OF WELL ESTABLISHED PRINCIPLES OF JURISDICTIONAL HIGH COURT AND ITAT. II-04 WITHOUT PREJUDICE, IF THE CONTRIBUTION TO REP AIRS & RENOVATION FUND (TRANSFER FEES) ARE HELD TAXABLE, THE APPELLANT'S C LAIM FOR REASONABLE EXPENDITURE TO THE EXTENT OF 10% OF TRANSFER FEES M AY BE ALLOWED. III ALL THE GROUNDS OF APPEAL ARE MUTUALLY EXCLUSIV E AND WITHOUT PREJUDICE TO ONE ANOTHER. IV THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR MODIFY ANY OR ALL GROUNDS TILL THE APPEAL IS HEARD. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 31.10.2001 DECLARING TOTAL INCOME AT RS. NIL. THE NOTICE OF SC RUTINY ASSESSMENT UNDER SECTION 142 (1) OF THE ACT WAS ISSUED ON 27 AUGUST 2002. THE ASSESSEE SUBMITTED REPLY OF THE SAID NOTICE ON 29 OCTOBER 20 02. THEREAFTER, NO FURTHER ACTION PURSUANT TO THE NOTICE WAS TAKEN BY THE AO. THEREAFTER, THE ASSESSMENT WAS RE-OPENED U/S 147 AND NOTICE U/S 148 DATED 15.0 3.2007 WAS ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE SUBMITTED TH AT THE RETURN OF INCOME ALREADY FILED ON 31.10.2001 MAY BE TREATED AS RETUR N OF INCOME IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. THE ASSESSEE ALSO DE MANDED THE REASONS FOR RE- OPENING. THE REASONS FOR RE-OPENING WAS FORWARDED A LONG WITH LETTER DATED 03.05.2007. THE ASSESSEE OBJECTED THE REASSESSMENT PROCEEDING VIDE OBJECTIONS/LETTER DATED 31 ST MAY 2007. THE OBJECTION OF THE ASSESSEE WAS REJECTED, AND AO PROCEEDED TO REASSESSMENT OF THE I NCOME OF THE ASSESSEE. WHILE FRAMING RE-ASSESSMENT ORDER AO AND BESIDES MA KING ADDITIONS OF TRANSFER FEES, CONTRIBUTION TO REPAIRS AND RENOVATI ON FUND, CAR PARKING, NON- OCCUPANCY CHARGES, ADVERTISEMENT CHARGES, LIFTS , M ISCELLANEOUS INCOME AND FURTHER DISALLOWED THE DEDUCTION UNDER SECTION 80P( 2)(D). THE ASSESSEE CHALLENGED THE NOTICE OF REOPENING BEFORE HONBLE H IGH COURT BY WAY OF WRIT PETITION. THE WRIT PETITION WAS ADMITTED BEFORE HON OURABLE HIGH COURT OF BOMBAY ON 17 TH MARCH 2008, WHEREIN INTERIM RELIEF WAS GRANTED TO THE ASSESSEE. IN THE WRIT PETITION HONBLE HIGH COURT V IDE ORDER DATED 12 MARCH 3 ITA NO. 1613/MUM/2012- THE PANCHRATNA CO-OP. HSG. S OC. LTD. 2008, DIRECTED THE REVENUE TO CONSIDER THE ASSESSEE AS A CO-OPERATIVE SOCIETY. PURSUANT TO THE DIRECTION OF HONBLE HIGH COURT, TH E AO PASSED ORDER UNDER SECTION 143 (3) RWS 260 OF THE IT ACT, VIDE ORDER D ATED 29 DECEMBER 2009. AGGRIEVED BY THE ORDER OF AO THE ASSESSEE FILED APP EAL BEFORE THE COMMISSIONER OF INCOME TAX APPEALS. BEFORE COMMISSI ONER OF APPEAL ASSESSEE CHALLENGED THE VALIDITY OF REOPENING AND V ARIOUS ADDITIONS. THE LEARNED CIT(A) UPHELD THE REOPENING AND FOR OTHER A DDITION PARTIAL RELIEF WAS GRANTED TO ASSESSEE BY FOLLOWING THE DECISION OF HO NOURABLE MUMBAI HIGH COURT IN THE CASE OF MITTAL COURT CO-OPERATIVE SOCI ETY. AGGRIEVED BY THE ORDER OF COMMISSIONER OF APPEALS. THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD LD AR OF THE ASSESSEE AND DR FOR REVE NUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AR OF ASSESSEE ARGUED THAT NOTICE OF REOPENING UNDER SECTION 147 OF THE ACT WAS ISSUED AFTER THE E XPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR. IN THE REASON OF R EOPENING THE AO HAS NOT MADE A WHISPER THAT THE ASSESSEE FAILED TO MAKE FUL L AND TRUE DISCLOSURE OR INCOME CHARGEABLE TO TAX ESCAPE ASSESSMENT FOR SUCH ASSESSMENT YEAR BY THE REASONS ON THE FAILURE ON THE PART OF ASSESSEE AS P ER THE PROVISO ATTACH WITH SECTION 147OF THE ACT. AR FOR ASSESSEE FURTHER ARGU ED THAT ASSESSEE CHALLENGED THE NOTICE DATED 15 MACH 2007 BEFORE BOMBAY HIGH CO URT BY FILING WRIT PETITION. THE WRIT PETITION OF THE ASSESSEE WAS REG ISTERED AS WRIT PETITION NO 2216 OF 2007. THE HONBLE HIGH COURT ALLOWED THE WR IT PETITION OF THE ASSESSEE VIDE ORDER DATED 16 JULY 2015,WHEREIN TH E NOTICE OF REOPENING UNDER SECTION 147 OF THE ACT, DATED 15 MACH, 2007 IS QUA SHED, COPY OF WHICH IS PLACED ON RECORD. LD AR OF THE ASSESSEE FURTHER ARG UED THAT ONCE THE NOTICE UNDER SECTION 147 IS QUASHED, ALL CONSEQUENTIAL PRO CEEDINGS UNDERTAKEN BY THE REVENUE HAS BECOME INVALID, ILLEGAL AND IMPROPER. D R FOR REVENUE FAIRLY ACCEPTED THAT NOTICE UNDER SECTION 147, DATED 15 MA RCH 2007 HAS BEEN QUASHED BY HONBLE BOMBAY HIGH COURT. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE PART IES AND GONE THROUGH THE ORDER PASSED BY REVENUE AUTHORITY AND THE ORDER OF HONBLE BOMBAY HIGH 4 ITA NO. 1613/MUM/2012- THE PANCHRATNA CO-OP. HSG. S OC. LTD. COURT IN THE WRIT PETITION OF THE ASSESSEE, CHALLE NGING THE VALIDITY OF NOTICE U/S 147 DATED 15 MACH 2007. THE HONBLE HIGH COURT IN T HE SAID WRIT PETITION HELD AS UNDER: 6.NOT ONLY IT IS NOT MENTIONED IN THE REASONS THAT THE PETITIONER FAILED TO DISCLOSE ALL THE NECESSARY FACTS AS REQUIRED, BUT THE PATTER NS OF THE REASONS WOULD SHOW THAT ALL NECESSARY AND RELEVANT FACTS WERE IN FACT FURNISHED BY THE PETITIONER. 7. THUS, FIRSTLY, THERE IS NO FAILURE TO MAKE FULL AND TRUE DISCLOSURE FOR NECESSARY FACTS WHICH IS THE JURISDICTIONAL REQUIREMENT FOR I NITIATING REOPENING PROCEEDING AFTER PERIOD OF 4 YEARS AS PER THE PROVISION OF SEC TION147. SECONDLY, THE REASONS DO NOT SHOW THAT THERE WAS ANY FAILURE TO DISCLOSE. MR MALHOTRA, ON BEHALF OF RESPONDENT REVENUE CONTENDED THAT PETITIONER FILED RETURN BEFORE A WRONG AUTHORITY AND, THEREFORE, THAT EARLIER RETURN WAS N OT RETURN IN THE EYES OF LAW. THIS IS NOT THE REASON STATED BY THE ASSESSING OFFI CER AND, THEREFORE, IT CANNOT BE PERMITTED TO BE TAKEN AT THIS STAGE. IT IS SETTLED QUESTION AS HELD BY THIS COURT IN HINDUSTAN LEVER LTD VERSUS RB WADKAR (268 ITR 322), THAT THE REOPENING NOTICE STANDS OR FALLS BY THE REASONS RECORDED AT THE TIME OF REOPENING NOTICE IS ISSUED. IT IS NOT PERMISSIBLE TO EDIT FURTHER REASONS TO TH OSE RECORDED WHILE ISSUING OF THE REOPENING NOTICE. IN VIEW OF THIS POSITION, THE PETITION REQUIRES TO BE ALLOWED. 5. CONSIDERING THE ORDER OF HONBLE HIGH COURT OF BOM BAY(SUPRA) HOLDING THAT THE REOPENING OF THE ASSESSMENT IS ILLEGAL AND INVALID, THE REASSESSMENT ORDER PASSED BY AO UNDER SECTION 143 (3) RWS147, DA TED 31 DECEMBER 2007 AND ORDER UNDER SECTION 143(3) RWS 260 DATED 29 DEC EMBER 2009 HAS BECOME VOID. AS THE REOPENING HAS BEEN DECLARED INV ALID AND THE NOTICE UNDER SECTION147 HAS BEEN QUASHED, THUS THE GROUND NO. I, RAISED IN THE PRESENT APPEAL IS ALLOWED. AS GROUND NO. I IS ALLO WED IN FAVOUR OF ASSESSEE THUS THE DISCUSSION ON OTHER GROUNDS RAISED IN THE PRESENT APPEAL BECOME ACADEMIC. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON TH IS 22 ND JUNE, 2016. SD/- SD/- (RAJENDRA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 22/06/2016 S.K.PS / COPY OF THE ORDER FORWARDED TO : 5 ITA NO. 1613/MUM/2012- THE PANCHRATNA CO-OP. HSG. S OC. LTD. / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. $ //TRUE COPY/