ACIT, Virudhunagar V. M/s. S.P.G.Ramasamy Nadar & Sons, Virudhunagar

ITA 1658/CHNY/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51906 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-10-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 06-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR I V IJAYAKUMAR IRS
• Assessee Lawyers: G BASKAR
• Keywords: Retrospective amendment
• Section: 143(3); 80HHC; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER ITA NO.1658(MDS)/2010 & CO NO.131(MDS)/2010 ASSESSMENT YEAR: 2002-03 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE I, VIRUDHUNAGAR. VS. M/S. SPG RAMASAMY NADAR & SONS, 77/1-SOUTH CAR ST., VIRUDHUNAGAR. PAN AAFFS3162E. (APPELLANT) ( RESPONDENT/CROSS OBJECTOR) APPELLANT BY : DR. I. VIJAYAKUMAR, IRS, CIT-DR. RESPONDENT BY : SHRI G.BAS KAR, ADVOCATE. DATE OF HEARING : 4 TH OCTOBER, 2011 DATE OF PRONOUNCEMENT : 5 TH OCTOBER, 2011 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS APPEAL IS FILED BY THE REVENUE. THE CROSS O BJECTION IS FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2002-03. THE APPEAL AND THE CROSS OBJECTION ARE DI RECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II AT MADURAI DATED 28-6-2010. THE APPEAL AND THE CRO SS OBJECTION - - ITA 1658 & CO 131 OF 2010 2 ARISE OUT OF THE ORDER OF THE ASSESSING AUTHORITY P ASSED UNDER SECTION 143(3) READ WITH SECTION 254/147 OF THE INC OME-TAX ACT, 1961. 2. THE GROUNDS RAISED BY THE REVENUE IN THE PRESEN T APPEAL READ AS UNDER:- 1. THE COMMISSIONER OF INCOME-TAX(APPEALS) ERRED I N HOLDING THAT THE ORDER PASSED BY THE ASSESSING OFFI CER WAS BARRED BY LIMITATION, I.E. AFTER 9 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER OF THE ITAT IN ITA NO.2379/MDS/2005 DATED 13-10-2006. THE CIT(A) OUGHT TO HAVE SEEN THAT THE ITAT HAS SET ASI DE ONLY ISSUE TO THE FILE OF ASSESSING OFFICER WITH TH E DIRECTION TO RE-COMPUTE THE DEDUCTION U/S 80HHC AS PER AMENDED PROVISION AND FOR WHICH NO PERIOD OF LIMITA TION IS PRESCRIBED AS PER THE PROVISIONS OF SECTION 153( 3)(II). THE CIT(A) OUGHT TO HAVE FOLLOWED THE DECISION OF D ELHI HIGH COURT IN THE CASE OF BASU DISTRIBUTORS(P) LTD. VS. ITO WHEREIN IT HELD THAT ON THE RESTRICTED ASPECT O F THE ASST. THAT THE ITAT HAD REMANDED THE CASE TO THE - - ITA 1658 & CO 131 OF 2010 3 ASSESSING OFFICER. THE ENTIRE ASSESSMENT EXERCISE HAD NOT BEEN UNDERTAKEN DE NOVO AND HENCE SECTION 153(2A) WAS NOT ATTRACTED. 2. THE CIT(A) OUGHT TO HAVE SEEN THAT THE ASSESSING OFFICER HAS ISSUED NOTICE U/S 148 AND HAS CONSIDERE D THE RETROSPECTIVE AMENDMENT MADE IN SECTION 80HHC(3) SINCE THE EXPORT TURNOVER OF THE ASSESSEE EXCEEDS ` 10 CRORES AND THE ASSESSEE DID NOT FULFILL THE CONDITIONS STIPULATED IN THE THIRD PROVISO. 3. WE HEARD DR. I.VIJAYAKUMAR, THE LEARNED COMMISSIONER OF INCOME-TAX APPEARING FOR THE REVENU E AT LENGTH. WE ALSO HEARD SHRI G.BASKAR, THE LEARNED C OUNSEL APPEARING FOR THE RESPONDENT-ASSESSEE. 4. AS ARGUED BY THE LEARNED COMMISSIONER OF INCOME - TAX, THE CASE OF THE REVENUE CANNOT BE EXCLUDED FRO M THE AMBIT OF THE PROVISIONS OF LAW STATED IN SECTION 153(3)(I I) OF THE INCOME- TAX ACT, 1961 FOR THE SPECIFIC REASON THAT AN ORDER OF THE TRIBUNAL IS ALSO COVERED BY THAT PROVISION WHERE A DIRECTION OR FINDING HAS BEEN MADE BY THE TRIBUNAL. - - ITA 1658 & CO 131 OF 2010 4 5. IN THE PRESENT CASE, THE ASSESSMENT WAS REINITI ATED IN CONSEQUENCE OF THE EARLIER ORDER PASSED BY THE T RIBUNAL. THE ASSESSING OFFICER ALSO ISSUED NOTICE UNDER SECTION 148. THE COMMISSIONER OF INCOME-TAX(APPEALS) HELD THAT THE A SSESSMENT WAS BARRED BY LIMITATION SOLELY ON THE GROUND OF VA LIDITY OF THE NOTICE ISSUED UNDER SECTION 148. AT THE MAXIMUM, T HE ISSUE OF NOTICE UNDER SECTION 148 WOULD NOT HAVE BEEN WARRAN TED. WHEN SUCH NOTICE WAS NOT WARRANTED, THE NOTICE ISSUED UN DER SECTION 148 BY THE ASSESSING AUTHORITY COULD BE IGNORED. T HE ENTIRE PROCEEDINGS CANNOT BE HELD TO BE INVALID ONLY ON TH AT GROUND. THIS IS BECAUSE DE HORS THE ISSUE OF NOTICE UNDER S ECTION 148, THE ORDER OF THE TRIBUNAL SUBSISTS AND IT HAS TO BE LAWFULLY EXECUTED. THE COMMISSIONER OF INCOME-TAX(APPEALS) CANNOT INTERFERE IN THE EXECUTION OF THE ORDER PASSED BY T HE TRIBUNAL UNLESS THE EXECUTION OF THE ORDER IS IMPAIRED BY OP ERATION OF LAW. IN THE PRESENT CASE, THE ORDER CONSEQUENT TO THE DI RECTION OF THE TRIBUNAL, HAS BEEN PASSED WITHIN THE TIME LIMIT AVA ILABLE UNDER SECTION 153(3)(II). THEREFORE, THE ORDER OF THE AS SESSING AUTHORITY DOES NOT GET VITIATED BY OPERATION OF LAW. - - ITA 1658 & CO 131 OF 2010 5 6. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF TH E CASE WE HOLD THAT THE COMMISSIONER OF INCOME-TAX(AP PEALS) HAS ERRED IN HOLDING THAT THE ASSESSMENT IS BARRED BY L IMITATION. WE SET ASIDE HIS ORDER ON THIS POINT AND RESTORE THE A SSESSMENT ORDER INTO OPERATION. 7. NOW, COMING TO THE MERITS OF THE CASE, WE ARE SENDING BACK THE ISSUE TO THE ASSESSING AUTHORITY T O CONSIDER THE MATTER IN THE LIGHT OF THE RELEVANT AMENDMENT, AS D ONE BY THE TRIBUNAL FOR THE EARLIER ASSESSMENT YEARS. 8. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS ALLOWED. THE CROSS OBJECTION IS DISMISSED AS INFRU CTUOUS. ORDER PRONOUNCED ON WEDNESDAY, THE 5 TH OF OCTOBER, 2011 AT CHENNAI. SD/- SD/- (HARI OM MARATHA) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 5 TH OCTOBER, 2011. V.A.P. COPY TO: (1) APPELLA NT (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.