The DCITBharuch Circle, Bharuch V. Bharuch Enviro Infrastructure Ltd., Bharuch

ITA 2080/AHD/2009

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80469 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-09-2014
• Assessment Year: 2000-2001
• Appeal Filed On: 30-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI , ACCOUNTANT MEMBER ITA NO . 3836/AHD / 2008 & 2080/ AHD/20 09 A. Y S . 200 0 - 0 1 & 2001 - 02 DEPUTY COMMISSIONER OF INCOME TAX, BHARUC H CIRCLE, BHARUCH. VS BHARUCH ENVIRO INFRASTRUCTURE LTD., ANKLESHWAR, DISTRICT - BHARUCH. PAN: AERPP 1459P (APPELLANT) (RESPONDENT) REVENUE BY : SHRI V .K. SINGH , SR. D.R. , ASSESSEE(S) BY : MS. URVASHI SODHAN , A.R. / DATE OF HEARING : 29 / 09 /201 4 / DATE OF PRONOUNCEMENT: 31 / 10 /201 4 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER BOTH THESE APPEALS HAVE BEEN FILED BY THE REVENUE DEPARTMENT, RESPE CTIVELY, EMANATING FROM THE ORDER OF LEARNED CIT(A) - VI, BARODA, DATED 02.04.2009. FOR A.Y.2000 - 01, REVENUE HAS RAISED FOLLOWING GROUNDS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) HAS ERRED IN CANCELLING THE ORDER LEVYING PENA LTY OF RS.9,38,010/ - U/S. 271(1)(C) OF THE IT ACT ON THE GROUND THAT THERE WAS NO FALSITY IN THE PARTICULARS FURNISHED BY THE ASSESSEE THOUGH THE ASSESSING OFFICER WAS JUSTIFIED IN REOPENING THE ASSESSMENT AND ADDING THE EXPENSES. 1.1 FOR A.Y. 2001 - 02, R EVENUE HAS RAISED THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) HAS ERRED IN CANCELLING THE ORDER LEVYING PENALTY OF RS.39,79,340/ - U/S. 271(1)(C) OF THE IT ACT DESPITE THE FACT THAT THE ITA NO S . 3836 /AHD/20 08 & 2080/AHD/2009 DYCIT, BHARUCH CIRCLE, BHARUCH VS. BHARUCH ENVIRO INFRASTRUCTURE LTD. FOR A.Y S . 200 0 - 0 1 & 2001 - 02 - 2 ASSESSEE TREATED AN EXPENDITURE CLEARLY NOT ALLOWABLE AS SUCH U/S.37 OF THE ACT AND WAS FOUND DISALLOWABLE BY THE CIT(A). 2. AT THE OUTSET, WE HAVE BEEN INFORMED THAT HON BLE ITAT B BENCH AHMEDABAD IN ITA NO.731 AND 732/AHD/2007 (A.Y. 2000 - 01 AND 2001 - 02) VIDE AN ORDER DA TED 5 TH AUGUST, 2014 TITLED AS M/S. BHARUCH ENVIRO INFRASTRUCTURE LTD. VS. DY.CIT, BHARUCH HAS HELD AS UNDER: 6. ON THE VALIDITY OF REASSESSMENT PROCEEDINGS BEFORE US, THE ID. A.R. SUBMITTED THAT ON RECEIVING THE REASONS FOR RE - OPENING OF ASSESSM ENT, ASSESSEE VIDE ITS LETTER DATED 11.01.2006 TO THE A.O OBJECTED TO THE RE OPENING OF ASSESSMENT U/S. 147 AND INTERALIA SUBMITTED THAT SINCE THE RE OPENING WAS BASED ON CHANGE OF OPINION, THE RE - ASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT WAS NOT VALID IN THE EYES OF LAW. THE A.O WAS THUS REQUESTED TO DROP THE RE - ASSESSMENT PROCEEDINGS INITIATED U/S. 147 OF THE ACT. HE POINTED TO THE COPY OF THE AFORESAID LETTER PLACED AT PAGE 34 ONWARDS IN THE PAPER BOOK. THE ID. A.R. FURTHER SUBMITTED THAT THE A.O DID NO T PASS ANY SEPARATE ORDER DISPOSING OF THE OBJECTIONS FILED BY THE ASSESSEE BUT IN THE ASSESSMENT ORDER PASSED ON 23.02.2006 U/S. 143(3) READ WITH SECTION 147 OF THE ACT, REJECTED THE OBJECTIONS RAISED BY THE ASSESSEE. THE ID. A.R. THEREFORE NOW SUBMITTED THAT THE A.O WAS FIRST REQUIRED TO DISPOSE OF THE OBJECTION OF THE ASSESSEE BY REASONED AND SPEAKING ORDER AND THEREAFTER THE A.O SHOULD HAVE PROCEEDED TO PASS THE ASSESSMENT ORDER U/S. 143 (3) READ WITH SECTION 147 OF THE ACT AND IT WAS NOT OPEN TO THE A. O TO REJECT THE OBJECTIONS TO REASSESSMENT IN THE ASSESSMENT ORDER ITSELF. FOR THE AFORESAID PROPOSITION, HE RELIED ON THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA PVT. LTD. VS. DCIT. REPORTED IN (2012) 354 ITR 244. HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION. HE THEREFORE SUBMITTED THAT SINCE THE A.O HAS NOT DISPOSED OF THE OBJECTION TO THE NOTICE U/S. 148 BY A SEPARATE ORDER, THE ASSESSMENT ORDER PASSED UNDER THE ACT NEEDS TO BE QUASHED. 7. THE ID . D.R. ON THE HAND SUPPORTED THE ORDER OF A.O AND CIT(A). HE FURTHER SUBMITTED THAT SINCE THE A.O HAS REJECTED THE OBJECTIONS OF THE ASSESSEE IN THE ASSESSMENT ORDER ITSELF, THE REJECTION IN THE ASSESSMENT ORDER SHOULD BE CONSIDERED AS COMPLIANCE OF THE RE QUIREMENTS OF THE ACT. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE REASONS FOR RE - OPENING OF ASSESSMENT U/S. 147 OF THE ACT WAS RECORDED ON 31.03.2005 AND THE SAME WERE COMMUNICATED TO THE ASSESSEE BY ACIT VIDE LETTER DATED 09.01.2006. IN RESPONSE TO THE NOTICE FOR REOPENING, ASSESSEE VIDE ITS LETTER DATED 11.01.2006 HAD OBJECTED TO INITIATION OF RE - ASSESSMENT. ITA NO S . 3836 /AHD/20 08 & 2080/AHD/2009 DYCIT, BHARUCH CIRCLE, BHARUCH VS. BHARUCH ENVIRO INFRASTRUCTURE LTD. FOR A.Y S . 200 0 - 0 1 & 2001 - 02 - 3 BEFORE US, ID. A.R. SUBMITTED THAT THAT THE ASSESSEE'S OBJECTION TO REASSESSM ENT PROCEEDINGS WERE NOT PASSED BY A SEPARATE ORDER BUT WERE DISPOSED BY THE A.O IN THE ASSESSMENT ORDER DATED 22.03.2006 PASSED U/S. 143(3) R.W.S. 147 OF THE ACT A N D THIS FACT HAS NOT BEEN CONTROVERTED BY REVENUE. WE FIND THAT THE HON'BLE GUJARAT HIGH COU RT IN THE CASE OF GENERAL MOTORS INDIA PVT. LTD. (SUPRA) HAS HELD AS UNDER: - 23 ....... A.O IS MANDATED TO DECIDE THE OBJECTION TO THE NOTICE U/S. 148 AND SUPPLY OR COMMUNICATE IT TO THE ASSESSEE. THE ASSESSEE GETS AN OPPORTUNITY TO CHALLENGE THE ORDER IN A WRIT PETITION. THEREAFTER THE A.O MAY PASS THE RE - ASSESSMENT ORDER. WE HOLD THAT IT WAS NOT OPEN TO THE A.O TO DECIDE THE OBJECTION TO NOTICE U/S/148 BY A COMPOSITE ASSESSMENT ORDER. ASSESSING OFFICER WAS REQUIRED TO FIRST DECIDE THE OBJECTION OF THE ASS ESSEE FILED U/S. 148 AND SERVE A COPY OF THE ORDER OF THE ASSESSEE AND AFTER GIVING REASONABLE TIME TO THE ASSESSEE FOR CHALLENGING HIS ORDER IT WAS OPEN TO HIM TO PASS AN ASSESSMENT ORDER. THIS WAS NOT DONE BY THE A.O THEREFORE THE ORDER ON THE OBJECTION TO THE NOTICE U/S. 148 OF THE ASSESSMENT ORDER PASSED UNDER THE ACT DESERVED TO BE QUASHED'. 9. BEFORE US, REVENUE HAS NOT BROUGHT ANY CONTRARY BINDING DECISION OF HON'BLE APEX COURT OR HON'BLE JURISDICTIONAL HIGH COURT IN SUPPORT OF ITS CONTENTION T HAT THE ORDER DISPOSING OF THE OBJECTIONS OF THE ASSESSEE TO REASSESSMENT PROCEEDINGS ALONG WITH THE ASSESSMENT ORDER IS IN ORDER AND THEREFORE VALID AS PER LAW. WE THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID DECISION OF HON'BLE GUJARAT HIGH COURT IN T HE CASE OF GENERAL MOTOR INDIA PVT. LTD. (SUPRA) QUASH THE ASSESSMENT ORDER DATED 22.03.2006. SINCE THE RE - ASSESSMENT ITSELF HAS BEEN QUASHED, THE GROUNDS RAISED ON MERITS ARE NOT DECIDED. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. 2.1 SINCE ON AC COUNT OF TECHNICAL REASONS , THE IMPUGNED ORDERS HAVE ALREADY BEEN QUASHED BY THE RESPECTED CO - ORDINATE BENCH ; THEREFORE, IN A SITUATION WHEN THE ASSESSMENT ORDERS DO NOT SURVIVE ANYMORE; HENCE, IN CONSEQUENCE THEREUPON THE PENALTY IN QUESTION FOR BOTH THE YEARS ALSO DO NOT SURVIVE. BUT BEFORE WE CONCLUDE , IT IS ALSO LEGALLY JUSTIFIABLE TO MAKE THIS OBSERVATION THAT IN CASE THE QUANTUM APPEALS SURVIVE IN FUTURE BY AN ORDER OF THE SUPERIOR COURT AND TO BE DECIDED ON MERITS ; TH E N AS A NATURAL CONSEQUENCE THESE TWO APPEALS PERTAINING TO PENALTY LEVIED U/S.271(1)(C) ITA NO S . 3836 /AHD/20 08 & 2080/AHD/2009 DYCIT, BHARUCH CIRCLE, BHARUCH VS. BHARUCH ENVIRO INFRASTRUCTURE LTD. FOR A.Y S . 200 0 - 0 1 & 2001 - 02 - 4 SHALL ALSO BE DECIDED ON MERITS. WE MADE THIS OBSERVATION BECAUSE OF THE REASON THAT NO VERDICT HAS BEEN PRONOUNCED BY US ON THE MERITS OF THE CASE BUT DISMISSED MERELY DUE TO THE SAID TECHNICAL REASO N . WITH THESE OBSERVATIONS, WE HEREBY DISMISS TH E GROUND S OF THE REVENUE FOR BOTH THE YEARS . 3. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. SD/ - SD/ - ( ANIL CHATURVEDI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31 / 10 / 20 1 4 PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD