ITO, Tirunelveli V. Shri P.Madhan Mohan, Tirunelveli

ITA 1666/CHNY/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58047 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 14-03-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 07-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NO. 1666/(MDS)/2010 ASSESSMENT YEAR : 2005-06 THE INCOME-TAX OFFICER, WARD-I(2), TIRUNELVELI. VS. SHRI P. MADHAN MOHAN, PARTNER, M/S. ARAP VISWANATHA NADAR & CO., PIRANOOR BORDER, SHENCOTTAH, TIRUNELVELI - DIST. PAN ADZPM 1915 C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANI RUDH RAI, IRS COMMISSIONER OF INCOME-TAX RESPONDENT BY : SHRI B. RAMA KRISHNAN, CA DATE OF HEARING : 14 TH MARCH, 2012 DATE OF PRONOUNCEMENT : 14 TH MARCH, 2012 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT: THIS APPEAL IS FILED BY THE REVENUE. THE RELEVA NT ASSESSMENT YEAR IS 2005-06. THE APPEAL IS DIRECTED AGAINST THE ITA 1666/10 :- 2 -: ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-II AT MADURAI DATED 07.07.2010 AND ARISES OUT OF THE ASSESSMENT C OMPLETED UNDER SEC.143(3) READ WITH SEC.147 OF THE INCOME-TA X ACT, 1961. 2. THE GROUND RAISED BY THE REVENUE IS THAT THE C OMMISSIONER OF INCOME-TAX(APPEALS) HAS ERRED IN HOLDING THAT TH E ASSESSING OFFICER WAS BARRED FROM INITIATING REASSESSMENT PRO CEEDINGS UNDER SEC.147 OF THE ACT, AS THE TIME FOR ISSUANCE OF NOT ICE UNDER SEC.143(2) HAD NOT BEEN EXPIRED. THE REVENUE HAS A LSO RELIED ON THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT RENDE RED IN THE CASE OF ITO V. K.M.PACHIAPPAN (311 ITR 31). 3. IN FIRST APPEAL, THE COMMISSIONER OF INCOME-TAX( APPEALS) HAS HELD THAT THE REASSESSMENT PROCEEDINGS BY THE ASSES SING OFFICER UNDER SEC.147 WAS VOID AB INITIO, SINCE HE HAD TIME FOR ISSUING NOTICE UNDER SEC.143(2) OF THE ACT. THE TIME FOR SELECTIN G THE CASE FOR SCRUTINY WAS TO EXPIRE ONLY AFTER 12 MONTHS FROM TH E END OF THE MONTH IN WHICH THE RETURN WAS FILED AND, AS NO NOTI CE WAS ISSUED UNDER SEC.143(2), THE ISSUE OF NOTICE UNDER SEC.148 WAS VOID. WHILE COMING TO THE ABOVE CONCLUSION, THE COMMISSIONER OF INCOME- ITA 1666/10 :- 3 -: TAX(APPEALS) RELIED ON THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. K.M.PACHAYAPPAN (304 IT R 264). 4. WE CONSIDERED THE MATTER. THE HONBLE MADRAS HI GH COURT IN THE CASE OF CIT V. K.M.PACHAYAPPAN (304 ITR 264) HAS HELD THAT THE ASSESSING OFFICER CANNOT ISSUE A NOTICE UNDER S EC.148 FOR THE PURPOSE OF REOPENING THE ASSESSMENT UNDER SEC.147, WHEN THE RETURN FILED BY THE ASSESSEE WAS PENDING FOR ASSESS MENT. THE SAID DECISION OF THE MADRAS HIGH COURT IS NOT REFERRED I N THE SUBSEQUENT JUDGMENT RENDERED BY THE HONBLE MADRAS HIGH COURT IN THE CASE OF ITO V. K.M.PACHIAPPAN (311 ITR 31). MOREOVER, THE DICTUM LAID DOWN BY THE HONBLE HIGH COURT IN THAT CASE IS THAT AN ASSESSMENT ORDER UNDER SEC.143(3) IS NOT A PRE-CONDITION TO IS SUE A NOTICE UNDER SEC.148. IT IS NOT CLEAR IN THE SAID JUDGMENT THAT WHETHER THE HONBLE HIGH COURT HAS SPECIFICALLY EXAMINED THE QUESTION, THAT WHEN TIME FOR ISSUING NOTICE UNDER SEC.143(2) IS AVAILABLE, W HETHER THE ASSESSING OFFICER CAN ISSUE NOTICE UNDER SEC.148. BUT IN THE EARLIER DECISION IN THE CASE OF CIT V. K.M.PACHAYAPPAN (304 ITR 264), THIS SPECIFIC QUESTION WAS CONSIDERED BY THE HONBLE HIG H COURT AND HELD THAT IT WAS NOT POSSIBLE TO ISSUE NOTICE UNDER SEC.148 WHERE THE ASSESSING AUTHORITY IS HAVING TIME TO ISSUE NOTICE UNDER SEC.143(2). ITA 1666/10 :- 4 -: AS THE EARLIER JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. K.M.PACHAYAPPAN (304 ITR 264) IS STI LL VALID, AS IT IS NOT DISSENTED OR DISTINGUISHED OR OVERRULED BY ANY HIGHER FORUM, THE COMMISSIONER OF INCOME-TAX(APPEALS) IS JUSTIFIED IN FOLLOWING THE SAID DECISION OF THE JURISDICTIONAL HIGH COURT. TH EREFORE, WE FIND THAT THE ORDER PASSED BY THE COMMISSIONER OF INCOME -TAX(APPEALS) IN THE PRESENT CASE IS IN ACCORDANCE WITH LAW. 6. IN RESULT, THIS APPEAL FILED BY THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON WEDNESDAY, THE 14 TH OF MARCH, 2012 AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (DR. O.K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 14 TH MARCH, 2012. MPO* COPY TO: (1) PETITIONE R (2) RESPONDENT (3) CIT (4) CIT(A) (5) D.R. (6) G.F.