Deputy Commissioner of Income-tax, V. Demag Cranes & Components (I) Pvt. Ltd., Pune

ITA 1644/PUN/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9281 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-03-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 11-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1644/PUN/2015 / ASSESSMENT YEAR : 2009-10 DCIT, CIRCLE-1(2), PUNE . /APPELLANT VS. TEREX INDIA PVT. LTD., (FORMERLY KNOWN DEMAG CRANES & COMPONENTS (I) PVT. LTD.,) GAT NO.33, 332, 333, 334, NANEKARWADI CHAKAN, TALUKA KHED, PUNE 411 501 PAN : AABCM9351Q . / RESPONDENT C.O.NO.42/PUN/2017 (ARISING OUT OF ITA NO.1644/PUN/2015) A.Y. 2009-10 TEREX INDIA PVT. LTD., (FORMERLY KNOWN DEMAG CRANES & COMPONENTS (I) PVT. LTD.,) GAT NO.33, 332, 333, 334, NANEKARWADI CHAKAN, TALUKA KHED, PUNE 411 501 PAN : AABCM9351Q . CROSS OBJECTOR VS. DCIT, CIRCLE-1(2), PUNE . APPELLANT IN THE APPEAL ASSESSEE BY : SHRI RAJENDRA AGIWAL REVENUE BY : SHRI MUKESH JHA, JCIT / DATE OF HEARING : 07.03.2018 / DATE OF PRONOUNCEMENT: 09.03.2018 / ORDER PER D. KARUNAKARA RAO, AM : THE APPEAL ITA NO.1644/PUN/2015 IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-1, PUNE, DATED 07-09-2015 FOR THE ASSESSMENT YEAR 2009-10. 2 2. ASSESSEE FILED THE CROSS OBJECTION NO.42/PUN/2017 RAISIN G A LEGAL ISSUE RELATING TO THE FAILURE TO ISSUE STATUTORY NOTICE U/S.143(2) OF THE INCOME TAX ACT, 1961. IN PREFERENCE TO THE OTHER CROSS OBJECTIONS, LD. AR FOR THE ASSESSEE BROUGHT OUR ATTENTION TO CROSS OBJECTION NO.4 AND SUBMITTED THAT THE SAID GROUND IS LEGAL IN NATURE AND THE CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT THE DEFECT IS INC URABLE. LD. AR FURTHER SUBMITTED THAT IF THE SAID CROSS OBJECTION NO.4 IS ADJUDICATED IN FAVOUR OF THE ASSESSEE, ADJUDICATION OF OTHER CROSS OBJEC TIONS AND THE GROUNDS RAISED BY THE REVENUE BECOME INFRUCTUOUS. 3. ON HEARING THIS PRELIMINARY ISSUE, WE FIND IT RELEVANT TO ACCEPT LD. ARS CONTENTION AND PROCEED TO ADJUDICATE THE CROS S OBJECTION NO.4 RAISED BY THE ASSESSEE IN THE FOLLOWING PARAGRAPHS. FOR T HE SAKE OF REFERENCE, THE SAID CROSS OBJECTION NO.4 IS EXTRACTED AS FOLLOWS : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. AO : 4. ERRED IN UPHOLDING THE VALIDITY OF THE REASSESS MENT PROCEEDINGS U/S.147 OF THE ACT, EVEN THOUGH NO NOTICE U/S.143(2 ) OF THE ACT HAVE BEEN ISSUED BY THE AO. 4. BRIEFLY STATED RELEVANT FACTS ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN PROVIDING STATE OF ART MATERIAL HANDLING SOLUTIONS , PARTICULARLY IN THE CRANE MANUFACTURING INDUSTRY. ASSESSE E FILED THE RETURN OF INCOME ON 30-10-2009. SUBSEQUENTLY, IT WAS RE VISED ON 26-05-2010 DECLARING TOTAL INCOME OF RS.2,21,69,251/-. AO IS SUED NOTICE U/S.143(2) OF THE ACT ON 29-08-2011. MEANWHILE THE DRAFT ASSESSMENT ORDER WAS PASSED BY THE AO ON 13-03-2013 . APPELLANT FILED ITS OBJECTIONS ON 02-05-2013. IN THE MEANTIME, THE AO ISSUED NOTICE U/S.148 OF THE ACT ON 31-03-2013. FURTHER, THE AO PASS ED AN ORDER U/S.143(3) R.W.S.147 OF THE ACT WHICH IS THE SUBJECT MATTER OF THE LITIGATION BEFORE US. 3 5. BEFORE US, AT THE OUTSET, LD. AR FOR THE ASSESSEE BRO UGHT OUR ATTENTION TO THE ORDER OF THE AO AND SUBMITTED THAT TH E SAID ORDER IS DEFICIENT ON THE INFORMATION RELATING TO ISSUANCE OF THE STA TUTORY NOTICE U/S.143(2) OF THE ACT. FURTHER, HE SUBMITTED THAT THE RE ASSESSMENT WAS COMPLETED ON 10-03-2014 U/S.143(3) R.W.S.147 OF THE ACT WIT HOUT ISSUANCE OF NOTICE U/S.143(2) OF THE ACT. FURTHER, BRINGING OUR ATTENTIO N TO THE GROUNDS/ADDITIONAL GROUNDS RAISED BEFORE THE CIT(A ), LD. AR BROUGHT OUR ATTENTION TO PARA NO.3 OF THE ORDER OF CIT (A) AND SUBMITTED THAT SIMILAR LEGAL GROUND WAS RAISED VIDE ADDITIONAL GROUND N O.14 AND THE SAME READS AS UNDER : 14. CHALLENGING THE VALIDITY OF INITIATING THE REA SSESSMENT PROCEEDING U/S.147 OF THE ACT WITHOUT COMPLETING THE REGULAR A SSESSMENT PROCEEDINGS U/S.143(2) OF THE ACT. 6. REFERRING TO THE WAY THE SAID ADDITIONAL GROUND WAS A DJUDICATED BY THE CIT(A), LD. AR FOR THE ASSESSEE BROUGHT OUR ATTE NTION TO THE CONTENTS OF PARA NO.24 AND 25 OF ORDER OF THE CIT(A). LD . AR SUBMITTED THAT DESPITE THE CHRONOLOGY OF EVENTS PROVIDED IN PARA N O.25, THE CONSPICUOUS ABSENCE OF THE DATE RELATING TO THE ISSUANCE OF STATUTORY NOTICE U/S.143(2) OF THE ACT INDICATES THE MAKING OF REASSE SSMENT WITHOUT ISSUING SAID NOTICE. REFERRING TO CONTENTS OF PARA NO.22 WHICH CONTAINS RELEVANT ADJUDICATION ON THE ISSUE RELATING TO TH E ISSUE OF NOTICE U/S.143(2) OF THE ACT, LD. AR FOR THE ASSESSEE SUBMIT TED THAT CIT(A) ACKNOWLEDGED THE FACT THAT THE NOTICE WAS NEVER IS SUED AND ACCORDINGLY PROCEEDED TO ADJUDICATE THE ISSUE STATING T HAT THE SAID DEFICIENCY IS CURABLE UNDER THE PROVISIONS OF SECTION 292BB OF THE I.T. ACT, 1961. 7. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED HEAV ILY ON THE ORDERS OF THE AO AND THE CIT(A) AND SUBMITTED THAT THE RELEVANT RECORDS 4 WERE DIRECTED TO BE PRODUCED BEFORE THE COURT IN THE P AST BUT DUE TO SOME REASONS THE CASE WAS ADJOURNED FROM TIME TO TIME. 8. WE HEARD BOTH THE PARTIES ON THE LIMITED FACTUAL ISSUE OF ISSUANCE OF NOTICE U/S.143(2) OF THE ACT BEFORE REASSESSMENT IS MADE U/S.147 R.W.S.143(3) OF THE ACT. ON PERUSAL OF THE ORDER OF THE AO , IT IS EVIDENT THAT THERE IS NO REFERENCE TO THE FACT OF ISSUE OF NOTICE U/S.143(2) OF THE ACT, WHICH IS MANDATORY BEFORE MAKING THE IMPUGNED RE-ASS ESSMENT. FURTHER, ON PERUSAL OF THE ORDER OF CIT(A) IN GENERAL AND T HE CONTENTS OF PARA NOS. 22, 24 AND 25 IN PARTICULAR, THE FAILURE TO ISSUE T HE SAID NOTICE IS AN OBVIOUS INFERENCE. IT IS ALSO A FACT THAT THE CIT(A) IN PARA NO.22 HAS ONLY ATTEMPTED TO JUSTIFY THE SAID FAILURE ON T HE GROUND OF CURABILITY U/S.292BB OF THE ACT WHICH IS AGAIN A PROPOSAL WH ICH IS UNSUSTAINABLE IN LAW. FOR THE SAKE OF COMPLETENESS, WE PRO CEED TO EXTRACT THE CONTENTS OF PARA NO.22 OF THE ORDER OF CIT(A ) AND THE SAME READS AS UNDER : 22. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AS WELL AS REPLY OF THE APPELLANT. IN THIS CASE THE ORDER PASSED BY TH E ASSESSING OFFICER IS COVERED BY THE PROVISIONS OF SEC.292BB OF THE I.T. ACT, 1961. FOR THE SAKE OF CLARITY PROVISIONS OF SEC.292BB ARE REPRODUCED A S UNDER : . . . . . . . . . . SINCE THE APPELLANT HAS NOT RAISED THIS ISSUE BEFOR E AO, THE SAME IS BARRED TO BE TAKEN UP IN FURTHER PROCEEDINGS AS PER THE ABOVE SECTION. ACCORDINGLY, GROUND NO.12 IS DISMISSED. 9. THE ABOVE PARA IS SELF-EXPLANATORY SO FAR AS THE FACT RELATING TO THE ISSUANCE OF NOTICE U/S.143(2) OF THE ACT. WE HAVE ALSO PERU SED THE CITED SUPREME COURT JUDGMENT IN THE CASE OF ACIT AND ANOTHE R VS. HOTEL BLUE MOON 321 ITR 362 WHEREIN IT IS HELD THAT THE STATU TORY REQUIREMENT OF ISSUING THE NOTICE U/S.143(2) OF THE ACT CONS TITUTES AN INCURABLE DEFECT. SIMILAR VIEWS ARE UPHELD BY THE NUMBER O F JUDGMENTS VIZ., (1) CWT VS. HUF OF H.H. LATE SHRI J.M. SCINDIA 300 ITR 193 5 (BOMBAY HIGH COURT), ALPINE ELECTRONICS ASIA PTE LTD. VS. DIR ECTOR GENERAL OF INCOME TAX AND OTHERS 341 ITR 247 (DELHI HIGH COURT), VIRENDRA DEV DIXIT VS. ACIT 331 ITR 483 (ALLAHABAD HIGH CO URT), PAI VINOD VS. DCIT 353 ITR 622 (KARNATAKA HIGH COURT) ETC. CONSIDERING THE SAME, WE ARE OF THE VIEW THAT THE CROSS OBJECTION NO.4 RAISED BY THE ASSESSEE IS REQUIRED TO BE ALLOWED IN FA VOUR OF THE ASSESSEE. CONSEQUENTLY, ADJUDICATION OF OTHER CROSS OBJ ECTIONS RAISED BY THE ASSESSEE AS WELL AS THE GROUNDS RAISED BY THE R EVENUE, IN OUR VIEW, BECOMES AN ACADEMIC EXERCISE. ACCORDINGLY, ALL OF TH EM ARE DISMISSED AS ACADEMIC. THUS, THE GROUNDS RAISED BY THE R EVENUE ARE DISMISSED AND THE CROSS OBJECTION RAISED BY THE ASSESSE E IS PARTLY ALLOWED. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED AND T HE CROSS OBJECTION OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09 TH DAY OF MARCH, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 09 TH MARCH, 2018 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// //TRUE COPY// SENIOR PRI VATE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A)-1, PUNE 4. CIT-1, PUNE 5. , , B BENCH PUNE; 6. / GUARD FILE.