DDIT, CHENNAI V. M/s. Merit International Education Foundation, CHENNAI

ITA 2120/CHNY/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6506 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 13-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: S SATHIYANAR AYANAN
• Keywords: Reopening of assessment; Recovery proceedings; Principle of natural justice; Maximum Marginal Rate; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148; 11

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI D BENCH, CHENNAI. BEFORE SHRI.U.B.S. BEDI, J.M. & SHRI. N.S. SAINI, A .M. I.T.A. NOS.2120/MDS/2010 & 75/MDS/2011 ASSESSMENT YEARS: 2004-05 & 2002-03 THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTION) I, CHENNAI. VS. M/S. MERIT INTERNATIONAL EDUCATION FOUNDATION, PREETHI TOWERS, 2 ND FLOOR, ROYPETTAH HIGH ROAD, MYLAPORE, CHENNAI 600 004. [PAN:AAATM1512D] C.O.NOS. 18 AND 28/MDS/2011 [IN I.T.A. NO.2120/MDS/2010 & 75/MDS/2011 ASSESSMENT YEARS: 2004-05 & 2002-03 M/S. MERIT INTERNATIONAL EDUCATION FOUNDATION, PREETHI TOWERS, 2 ND FLOOR, ROYPETTAH HIGH ROAD, MYLAPORE, CHENNAI 600 004. VS. THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTION) I, CHENNAI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ANIRUDH RAI ASSESSEE BY : SHRI S. SATHIYANARAYANAN ORDER PER U.B.S. BEDI, J.M. THESE TWO APPEALS OF THE DEPARTMENT AND THE C.O.S OF THE ASSESSEE ARE DIRECTED AGAINST SEPARATE ORDERS PASSED BY THE LD. CIT(A) XII, CHENNAI DATED 16.09.2010 AND 26.10.2010 FOR THE ASSESSMENT YEARS 2004-05 AND 2002-03 RESPECTIVELY. 2. THESE APPEALS WERE HEARD TOGETHER, THEREFORE BE ING DISPOSED OF BY THIS SINGLE ORDER FOR THE SAKE OF CONVENIENCE. I.T.A. NO.2120/MDS/2010 AND C.O.NOS. 18/ MDS/2011 3. AS REGARDS APPEAL OF THE DEPTT. FOR THE ASSESSM ENT YEAR 2004-05 IS CONCERNED, AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE APPEAL IN THIS CASE WAS FILED BEFORE THE FIRST APPE LLATE AUTHORITY AGAINST ORDER OF I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 2 ASSESSMENT PASSED UNDER SECTION 143(3) R.W.S. 263 O F THE INCOME TAX ACT DATED 09.12.2009 PASSED BY THE DEPUTY DIRECTOR OF INCOME TAX (EXEMPTION), CHENNAI, WHEREAS, THE ORDER UNDER SECTION 263, ON THE BASIS OF WHICH ASSESSMENT ORDER UNDER SECTION 143(3) HAS BEEN PASSED, HAS ALREADY BEEN SE T ASIDE BY THE TRIBUNAL, AS SUCH, THE VERY FOUNDATION OF THE ASSESSING OFFICER S ORDER HAS VANISHED. THEREFORE, THE LD. CIT(A) IS JUSTIFIED IN SETTING ASIDE THE OR DER OF THE ASSESSING OFFICER UNDER SECTION 143(3) R.W.S. 263 DATED 09.12.2009 AND REST ORING THE ORIGINAL ORDER PASSED UNDER SECTION 143(3) DATED 28.12.2008 FOR THE ASSES SMENT YEAR UNDER CONSIDERATION. AS SUCH, THE APPEAL OF THE DEPARTMENT IS NOT MAINTA INABLE AS NOTHING HAS BEEN BROUGHT ON RECORD TO SHOW THAT SUCH ORDER OF THE TR IBUNAL HAS BEEN REVERSED OR MODIFIED BY ANY HIGHER FORUM AND TO THIS PLEA OF TH E LD. COUNSEL FOR THE ASSESSEE, THE LD. DR SUBMITTED THAT NO DOUBT, THE ORDER PASSED UN DER SECTION 263 HAS BECOME INVALID AND CONSEQUENTLY, THE ORDER UNDER SECTION14 3(3) R.W.S. 263 DATED 09.12.2009 IS NOT LIABLE TO BE SUSTAINED, BUT THE DEPARTMENT H AS FILED THE APPEAL IN ORDER TO KEEP THE PROCEEDINGS ALIVE TILL FINAL DECISION AGAINST E ARLIER ORDERS OF THE TRIBUNAL, WHICH IS BEING CONTESTED IN HIGHER FORUM, IS TAKEN AND THE L D. DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER DATED 09.12.2009 PASSED IN THIS C ASE. 4. WE, AFTER HAVING HEARD BOTH THE SIDES, CONSIDER ING THE MATERIAL ON RECORD, FIND THAT IN THE APPEAL OF THE ASSESSEE, THE FACTS AS RE CORDED BY THE LD. CIT(A) FROM 2 ND PARA AT PAGE 1 TO LAST BUT ONE PARA OF PAGE 3 WITH THE CONCLUSION AS DRAWN TO ALLOW THE APPEAL OF THE ASSESSEE ARE REPRODUCED AS UNDER : THE FACTS OF THE CASE ARE THAT FOR THE ASSESSMENT YEAR 2004-05, ASSESSMENT U/S 143(3) OF THE INCOME-TAX ACT, 1961 W AS VIDE ORDER DATED 28.12.06 ALLOWING EXEMPTION U/S 11 OF THE ACT TO THE APPELLANT TRUST AND THE ASSESSMENT WAS CLOSED AS 'ND'. SUBSEQUENTLY, THE DI T(E), CHENNAI VIDE HIS ORDER DT. 27.3.09 SET-ASIDE THE ABOVE ORDER WITH A DIRECTION TO MAKE A FRESH ASSESSMENT IN VIEW OF THE FINDINGS OF THE ASSESSING OFFICER FOR THE ORDER PASSED IN THE APPELLANT'S OWN CASE FOR THE ASST. YE AR 2005-06. I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 3 LATER, THE ASSESSING 0FFICER HAD FINALISED THE SET- ASIDE ASSESSMENT BY PASSING AN ORDER U/S 143(3) READ WITH SEC. 263 ON 9.12.09 DETERMINING TH E TAXABLE INCOME OF THE APPELLANT-TRUST AT RS.2,18.23 ,730/-. IN THE SAID ORDER, THE ASSESSING OFFICER HAD SUBJECTED TO TAX, AT MAXI MUM MARGINAL RATE, THE ABOVE SAID AMOUNT AFTER ALLOWING A SUM OF RS.4,19,3 7,618/- ON ACCOUNT OF ADMINISTRATIVE EXPENSES FROM A GROSS RECEIPT OF RS. 6,37,61,343/- DURING THE YEAR ENDED 31.03.2004. FURTHER, FOR THE ASST. YEAR 2005-06, THE ASSESSING OFFICER HAD NOT ALLOWED THE CLAIM OF EXEMPTION U/S 11 OF THE ACT TO THE APPELLANT DUE TO THE FACT THAT THE RENTAL ADVANCES PAID BY THE APPELLANT FOR THE LEASED PREMISES OBTAINED FROM M/S . MERITS RESORTS PVT. LTD., CHENNAI, M/S. NILGIRI ENTERPRISES, BANGALORE AND M/S . PRINCE PALACE, OOTY AND THAT THE APPELLANT COMPANY HAD MORTGAGED THE PROPERTIES TAKE N ON LEASE WITH CANARA BANK AND THAT THE SAID BANK HAD AUCTION SOLD THE PR OPERTIES MORTGAGED BY THE APPELLANT FOR THE DEFAULT OF THE LOAN. THUS, FOR TH E ASST. YEAR 2005-06 SEC. 11(5) OF THE ACT WAS BROUGHT INTO OPERATION BY THE ASSESSING OFFICER TREATING THE LEASE-RENTALS PAID AS INVESTMENT OF THE TRUST F UNDS. FOLLOWING THIS ANALOGY, THE DIT(E), CHENNAI HAD SET-ASIDE THE ORIGINAL ORDE R U/S 143(3) DT. 28.12.06 U/S 263 OF THE ACT GIVING RISE TO THE PASSING OF OR DER U/S 143(3) READ WITH SEC. 263 DT. 9.12.09, RESULTING IN THE CURRENT APPEAL. IN RESPONSE TO NOTICES OF HEARING, SHRI S. SATHYANA RAYANAN, ADVOCATE APPEARED ON BEHALF OF THE APPELLANT, FILED CERTAIN DETAILS AND HE WAS HEARD WITH REGARD TO THE DETAILS FILED. DECISION :- DURING THE COURSE OF APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT INTIMATED THAT THE APPELLANT HAD GONE ON APPEAL BEFORE THE HON'BLE ITAT, CHENNAI AGAINST THE ORDER OF THE DIRECTOR OF INCOME-TAX (EXEMPTIONS), CHENNAI DT. 27.3.09. THE HON'BLE ITAT, BENCH 'D', C HENNAI IN ITA NO.335/MDS/2010 DT. 04.06.10 ALLOWED THE APPEAL OF THE APPELLANT STATING THE FOLLOWING :- THE CASE OF THE REVENUE IS THAT LEASE RENTALS WERE PAID FOR ANY OTHER REASON THAN FOR GETTING THE PREMISES FOR PROCESSING ITS OB JECTS. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ASSESSMENT ORDER EVEN IF THE DIT(E ) HAS TAKEN A DIFFERENT VIEW. THE DDIT(E) HAD TAKEN ONE OF THE POSSIBLE VIEWS AFTER CONSIDERING THE ENTIRE FAC TS OF THE CASE AND HENCE, NO CASE OF REVISION U/S 263 IS MADE OUT. THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS. MAX INDIA LTD. (2007) 295 ITR 282, IS RELEVANT PARTICULARLY IN THIS CONTEXT. IT HAS BEEN HELD THEREIN THAT IF THE ASSESSING OFFICER HAS ADOPTED ONE OF THE TWO POSSIBLE VIEWS, NO ACTION CAN BE TAKEN U/S 263 OF THE ACT. THE ORDER IN QUESTION IS NOT AT ALL ERRONEOUS IN VIEW OF THE LEGAL POSITION AS ABOVE. CONSEQUENTLY, WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE ASSESSMENT ORDER'. THUS, IT IS CLEAR THAT THE ORDER OF THE DIT(E), CHE NNAI DT. 27.3.09 PASSED U/S 263 OF THE ACT HAD BEEN SET ASIDE BY THE HON'BLE IT AT. HENCE, THE ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) READ WITH SEC. 263 OF THE ACT DT. 9.12.09 FOR THE ASST. YEAR 2004-05, BASED ON THE FOUNDATION OF THE DIT(E)'S ORDER, HAS BECOME INVALID AND THE ORDER PASSED U/S 143(3) DT. 28.12.2006 FOR THE ASST. YEAR 2004-05 IN THE APPELLANT'S CASE IS RESTORED. I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 4 5. IN VIEW OF THE FACTS , CIRCUMSTANCES AND ABOVE D ETAILED DISCUSSION AS HELD BY LD.CIT(A), WE DO NOT FIND ANY INFIRMITY OR FLAW IN THE ORDER PASSED BY THE LD. CIT(A) BECAUSE THE VERY BASIS, ON WHICH ORDER UNDER SECTIO N 143(3) HAS BEEN PASSED R.W.S. 263, HAS SINCE BEEN SET ASIDE BY THE TRIBUNAL IN TH E CASE OF THE ASSESSEE, SO THE VERY FOUNDATION FOR PASSING ORDER UNDER SECTION 143 (3) R.W.S. 263 HAS SINCE VANISHED, AS SUCH, SAME CANNOT BE SUSTAINED AND THA T IS WHAT THE LD. CIT(A) HAS DONE AND MOREOVER, THE DEPARTMENT HAS NOT BEEN ABLE TO PLACE ANY CONTRARY MATERIAL OR PRODUCE COPY OF THE ORDER OF ANY HIGHER FORUM PASSED IN THIS REGARD WHICH HAS FURTHER MODIFIED THE ORDER OF THE TRIBUNA L. THEREFORE, WHILE ACCEPTING THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE, WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 6. THE CO OF THE ASSESSEE FOR THIS YEAR IS IN SUPP ORT OF THE ORDER OF THE LD. CIT(A),AS CONTENDED BY BOTH THE SIDES, WHICH HAS BE EN UPHELD BY US IN EARLIER PART OF THE ORDER, THEREFORE, THE CO OF THE ASSESSEE HAS BECOME INFRUCTUOUS AND AS SUCH IS DISMISSED. ITA NO. 75/MDS/2011 & CO NO. 28/MDS/2011: 7. THE DEPARTMENT IN THIS CASE HAS CHALLENGED THE ORDER OF THE LD. CIT(A) DATED 27.10.2010 RELEVANT TO THE ASSESSMENT YEAR 2002-03 RAISING FOLLOWING EFFECTIVE GROUNDS: 2. THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT AS SESSING OFFICER HAD NOT BROUGHT ANY NEW MATERIAL EVIDENCE ON RECORD FOR RE-OPENING THE ASSESSMENT AND THAT THE ASSESSING OFFICER HAD NOT III OWED THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF G.K.N.DRIVESH AFTS (259 ITR 19 (SC)). 2.1 IT IS SUBMITTED THAT THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT ON THE BASIS OF A FRESH EVIDENCE GATHERE D DURING THE SCRUTINY I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 5 ASSESSMENT FOR THE A.Y 2005-06. 2.2 IT IS FURTHER SUBMITTED THAT IN RESPONSE TO NOT ICE U/S. 148 THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME. WHEREA S ON SERVICE OF NOTICE U/S.142(1) OF THE ACT AND A PRE-ASSESSMENT NOTICE, THE ASSESSEE STATED THAT THE ORIGINAL RETURN FILED FOR THE A.Y 2002-03 BE TREATED AS RESPONSE TO THE NOTICE ISSUED. THE ASSESSEE DID NOT SEEK REASON S FOR ISSUE OF NOTICE U/S.148 DURING THE COURSE OF ASSESSMENT PROCEEDINGS , WHEREAS THE ISSUE OF FURNISHING REASONS RECORDED IS RAISED FOR THE FI RST TIME AT THE APPELLATE STAGE. HENCE IT IS SUBMITTED THAT THE DECISION OF T HE LEARNED CIT(A) IS NOT ACCEPTABLE. 3. THE LEARNED CIT(A) HAS ERRED IN ALLOWING EXEMPT ION U/S.11 OF THE IT ACT. 3.1 THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE TRUSTEES OF THE ASSESSEE TRUST ARE THE DIRECTORS OF THE COMPANY (M/S.MERIT RESORTS PVT. LTD.) IN WHICH THE ASSESSEE HAD PAID LEASE RENTAL A DVANCES OVER A PERIOD OF TIME, OUT OF THE INCOME RECEIVED BY WAY OF FEES RECEIVED FROM THE STUDENTS AND IT WAS SEEN THAT THE COMPANY HAD NOT F IXED ANY REASONABLE RENT, AS PER AGREEMENT. 3.2 THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE COMPANY WHICH HAS CONSTRUCTED SUPER-STRUCTURE USING THE FUN DS GIVEN BY THE TRUST AS LEASE ADVANCES HAS MORTGAGED THIS PROPERTY TO CA NARA BANK FOR AVAILING CREDIT FACILITIES AND CANARA BANK HAS AUCT IONED THIS PROPERTY AND APPROPRIATED THE SALE PROCEEDS FOR THE LOAN. 3.3 IT IS SUBMITTED THAT THE PROHIBITED PROXIMITY B ETWEEN THE TRUST AND RECEIVING COMPANY AND THE ACT OF ENROOTING THE FUND LED TO THE BREACH OF TRUST AND LOSS OF LEASE HOLD PROPERTY. AS PER THE L EASE AGREEMENT THE ASSESSEE TRUST WILL TAKE POSSESSION OF THE PREMISES LEASED OUT TO THE TRUST, IF THE COMPANY DOES NOT REPAY LEASE RENTAL ADVANCE AFTER 12 YEARS. WHEREAS, ON SALE OF THE SAID PROPERTY BY THE CANARA BANK, THE RIGHTS OF I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 6 THE TRUST GOT EXTINGUISHED AND THE FUNDS LYING WITH THE COMPANY STANDS IDLE. THUS THE FUNDS OF THE TRUST WAS/HAS BEEN ENJO YED BY THE TRUSTEES THROUGH THE COMPANY WITHOUT PAYING INTEREST OR FURN ISHING SECURITY. 3.4. IT IS SUBMITTED THAT THE INVESTMENT IN THE FO RM OF LEASE RENTAL ADVANCES MADE BY THE ASSESSEE WITH COMPANY WAS ALSO NOT IN ACCORDANCE WITH SEC 11(5) OF THE IT ACT. 3.5 IT IS SUBMITTED THAT AS PER SECTION 13 OF INDIA N TRUST ACT, THE TRUSTEES ARE BOUND TO MAINTAIN AND TO TAKE OTHER STEPS AS, REGARD BEING HAD TO THE NATURE AND AMOUNT OR VALUE OF THE TRUST-PROPERTY, MAY BE REASONABLY REQUISITE FOR THE PRESERVATION OF THE TR UST PROPERTY AND THE ASSERTION OR PROTECTION OF THE TITLE THERETO. HAVIN G FOUND THAT THERE WAS A VIOLATION WITH REGARD TO SUCH STATUTORY DUTIES, THE EXEMPTION WAS WITHDRAWN BY THE ASSESSING OFFICER. 3.6 THE LEARNED CIT(A) OUGHT TO HAVE FOLLOWED THE D ECISION OF THE CIT(A) FOR THE A.Y 2005-06 THAT THE LEASE RENTAL AD VANCES WERE NOT INVESTMENTS COVERED U/S.11(5) OF THE ACT AND THAT THE TRUSTEES WERE BENEFITED BY THIS ACT. 8. THE FACTS OF THE CASE ARE THAT FOR THE ASSESSMENT YEAR 2002-03, THE ASSESSEE FILED RETURN ADMITTING 'NIL' INCOME AND HA D SHOWN GROSS RECEIPTS AT RS.8,91,44,553/-. IN THIS CASE ASSESSMENT WAS REOPE NED FOR THE IMPUGNED YEAR AND ORDER U/S 143(3) READ WITH SEC. 148 WAS PASSED BY THE ASSESSING OFFICER DETERMINING THE TAXABLE INCOME OF THE ASSESSEE AT R S.3,41,01,290/- AND SUBJECTING THE SAME TO TAX AT MAXIMUM MARGINAL RATE IN THE STATUS OF 'AOP. I N THE SAID ORDER THE ASSESSING OFFICER HAD NOT ALLOWE D THE CLAIM OF EXEMPTION U/S 11 OF THE INCOME-TAX ACT, 1961 ON THE BASIS OF ASSESSMENT MADE U/S 143(3) IN THE ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2005-06 , WHEREIN THE ASSESSING OFFICER HAD DENIED THE CLAIM OF EXEMPTION U/S 11 OF THE ACT. THE REASON ADDUCED IN I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 7 THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2005-0 6 WAS THAT THE ASSESSEE WAS RUNNING A HOTEL MANAGEMENT ACADEMY (MERIT INTERNATI ONAL INSTITUTE OF TECHNOLOGY, MERITS SWISS ASIAN SCHOOL OF HOTEL MANAGEMENT AND H OSTEL) IN THE LEASED PREMISES OBTAINED FROM M/S . MERIT RESORTS PVT. LTD., CHENNAI, M/S. NILGIRI ENTERPRISES, BANGALORE AND M/S . PRINCE PALACE, OOTY. FURTHER THAT THE RENTAL ADVANC ES ARE PAID YEAR AFTER YEAR AND FOR THE YEAR ENDING 31.03.05, RENTAL ADVAN CES OUTSTANDING WERE RS.9.68 CRORES. IT WAS NOTICED BY THE ASSESSING OFFICER DUR ING THE COURSE OF SCRUTINY PROCEEDINGS FOR THE ASSESSMENT YEAR 2005-06 THAT TH E COMPANY HAD OBTAINED LOAN FROM CANARA BANK, TEYNAMPET BRANCH, CHENNAI BY MORT GAGING THE PROPERTY, WHICH WAS SUBSEQUENTLY SOLD BY THE BANK FOR DEFAULT IN TH E PAYMENT OF LOAN. BASED ON THE ABOVE, THE ASSESSING OFFICER HAD COMPLETED THE ASSE SSMENT FOR THE ASSESSMENT YEAR 2005-06 DENYING THE CLAIM OF EXEMPTION OF THE APPELLANT U/S 11 OF THE ACT TREATING THE RENTAL ADVANCES PAID AS INVESTMENT MAD E BY THE TRUST OUT OF ITS SURPLUS FUNDS, BY INVOKING THE PROVISIONS OF SEC. 11(5) OF THE INCOME-TAX ACT, 1961. BY TAKING CLUE FROM THE ASSESSMENT FOR THE ASSESSMENT YEAR 2005-06, ASSESSMENT FOR THE IMPUGNED YEAR WAS REOPENED AND COMPLETED ON 9.1 2.09 DENYING THE CLAIM OF EXEMPTION OF THE APPELLANT U/S 11 OF THE ACT THE EXCESS INCOME OVER EXPENDITURE OU T OF THE GROSS RECEIPTS. 9. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER , THE ASSESSEE FILED APPEAL AND IT WAS CONTENDED BEFORE THE FIRST APPELLATE AUT HORITY THAT THE ASSESSING OFFICER HAS ERRED IN REOPENING THE ASSESSMENT BY ISSUE OF N OTICE UNDER SECTION 148 DATED 12.02.2009 FOR THE ASSESSMENT YEAR 2002-03, SINCE T HE INTIMATION WAS DATED 13.06.2003 AND FURTHER TO THAT THE ASSESSING OFFICE R ERRED IN COMPLETING THE RE- ASSESSMENT PROCEEDINGS WITHOUT COMPLYING WITH THE D IRECTION OF THE HONBLE SUPREME COURT IN THE CASE OF G.K.N. DRIVESHAFTS (IN DIA) LTD.(SUPRA) BY NOT FURNISHING I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 8 THE REASONS FOR REOPENING OF ASSESSMENT, THUS VITIA TED THE ASSESSMENT AND SECONDLY, THE IMPUGNED ASSESSMENT SUFFERS FROM LACK OF OPPORTUNITY AND GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE, SINCE T HE ASSESSMENT HAS BEEN COMPLETED ON THE BASIS OF ASSUMPTION AND PRESUMPTION AND ON T HE BASIS OF ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2005-06. THE LD. AR OF THE ASSESSEE FURTHER CONTENDED BEFORE THE LD. CIT(A) THAT THE MERITS OF THE CASE D OES NOT REQUIRE ANY REOPENING OF THE ASSESSMENT RESULTING IN REASSESSMENT PROCEEDING S SINCE THE LEASE RENTAL ADVANCES PAID ARE APPLICATION OF INCOME OF THE ASSE SSEE TRUST. 10. THE LD. CIT(A), WHILE CONSIDERING AND ACCEPTING THE CONTENTION OF THE ASSESSEE HAS GIVEN ITS DECISION FROM PARA 2 OF PAGE 3 UPTO THE END OF FIRST PARA OF PAGE 4 OF HIS ORDER, WHICH READS AS UNDER: DECISION:- DURING THE COURSE OF APPELLATE PROCEED INGS, THE AR OF THE APPELLANT INTIMATED THAT THE APPELLANT HAD GONE ON APPEAL BEF ORE THE HON'BLE ITAT, CHENNAI AGAINST THE ORDER OF THE DIRECTOR OF INCOME-TAX (EX EMPTIONS), CHENNAI DT. 27.3.09, FOR THE ASST. YEAR 2004-05. THE HON'BLE ITAT, BENCH 'D' , CHENNAI IN ITA NO.335/MDS/2010 DT. 04.06.10 ALLOWED THE APPEAL OF THE APPELLANT STATING THE FOLLOWING :- 'UNDISPUTEDLY, THE ASSESSEE-TRUST HAS SHOWN THE LEA SE RENTAL ADVANCES AS APPLICATION OF INCOME OF THE TRUST' AS THE LEASE R EPRESENTS THE RIGHT TO USE THE PROPERTY. UNDER THESE CIRCUMSTANCES, IT CAN NOT BE SAID THAT THE TRUSTEES WERE EITHER CONCERNED OR INTERESTED IN THE SAID FIRM. EVEN IF THE TRUSTEES OF THE TRUST AND THE DIRECTORS OF THE COMP ANY ARE SAME PERSONS OR BELONG TO SAME FAMILY, BUT THE RENTAL ADVANCES W ERE DEFINITELY GIVEN TO CARRY OUT THE OBJECTS OF THE TRUST WHICH IS MAIN LY PROVIDING EDUCATION AND DIPLOMA COURSES, AS DISCUSSED ABOVE. IT WAS STA TED WITH PROOF ON RECORD THAT THE ENTIRE AMOUNT SO PAID HAS BEEN RETU RNED BACK TO THE ASSESSEE'. THE HON'BLE ITAT, 'D ' BENCH, CHENNAI WHILE DECIDING THE APPEAL IN THE APPELLANT'S CASE FOR THE ASST. YEAR 2004-05, FURTHE R HELD, AS UNDER: 'BUT ON RECORD, THERE IS NOTHING FROM WHICH IT CAN BE INFERRED THAT THE APPLICATION OF INCOME OF THE TRUST WAS FOR ANY EXTR ANEOUS REASON OTHER THAN THAT OF PURSUING THE OBJECT OF PROVIDING EDUCA TION AND DIPLOMA COURSE.' THUS, IT IS CLEAR FROM THE ABOVE, THAT THE LEASE RE NTAL ADVANCES PAID BY THE APPELLANT- TRUST TO THE COMPANY ARE APPLICATION OF INCOME AND IN CONSONANCE WITH THE ORDER OF I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 9 THE HON'BLE ITAT, 'D' BENCH, CHENNAI, CITED SUPRA, IT IS HELD THAT THE LEASE RENTAL ADVANCES PAID BY THE APPELLANT-TRUST ARE APPLICATIO N OF INCOME OF THE TRUST. FURTHER, THE ASSESSING OFFICER HAD NOT BROUGHT ANY NEW MATER IAL EVIDENCE ON RECORD FOR REOPENING THE ASSESSMENT AND THE ASSESSING OFFICER HAD NOT FOLLOWED THE DECISION OF THE COUNTRYS APEX COURT IN THE CASE OF G.K.N. DRIV ESHAFTS (INDIA) LTD. VS. ITO AND OTHERS REPORTED IN 179 CTR 11/259 ITR 19(SC). 11. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE DEPARTMENT HAS COME UP IN APPEAL AND WHILE REITERATING THE GROUNDS AS RAISED IN THE MEMORANDUM OF APPEAL, IT WAS PLEADED THAT IN THIS CASE, THE RETURN WAS FILED ON 31.03.2003, WHICH WAS PROCESSED UNDER SECTION 143(1) ON 13.06.2003 AND NO TICE HAS BEEN ISSUED UNDER SECTION 148 ON 12.02.2009 AFTER RECORDING REASONS. MOREOVER, HUGE LEASE RENTAL ADVANCE WAS GIVEN TO THE ASSESSEE WITHOUT SECURITY AND NO INTEREST WAS CHARGED FROM THE ASSESSEE AND CONSTRUCTION WAS DONE ON HUGE BUILDING, CANARA BANK GAVE THE LOAN AND FOR NON-PAYMENT, AUCTIONED THE PROPERT Y AND THERE WAS VIOLATION OF PROVISIONS AS CONTAINED IN SECTION 13 (2)(A), (G), (H) R.W. SS. (3) AND THE ASSESSING OFFICER WITHDREW THE EXEMPTION, WHICH WAS NOT APPRO VED BY THE INCOME TAX ACT AND THE LD. CIT(A) HAS JUST QUASHED THE REOPENING OF AS SESSMENT BY HOLDING THAT THERE IS VIOLATION OF THE RATIO OF THE DECISION IN THE CASE OF G.K.N. DRIVESHAFTS (INDIA) LTD. 259 ITR 19 (SC) WITHOUT CONSIDERING THAT THE ASSESSEE H AS NEVER ASKED FOR THE REASONS FROM THE ASSESSING OFFICER AND MOREOVER, 143(1) INT IMATION IS NOT ASSESSMENT AND SUBJECTIVE SATISFACTION OF THE ASSESSING OFFICER IS THERE, AND THE LD. CIT(A) JUST BY GIVING REFERENCE TO TRIBUNALS DECISION FOR 2004-05 HAS HELD THE ISSUE ON MERITS, IN FAVOUR OF THE ASSESSEE WITHOUT SPECIFYING OR STIPUL ATING AS TO HOW THE FACTS IN THAT WAS SIMILAR TO THE FACTS OF THE PRESENT CASE, THER EFORE, THE ORDER OF THE LD. CIT(A) IS NOT VALID, WHICH IS LIABLE TO BE REVERSED. IT WAS P RAYED FOR REVERSAL OF THE ORDER OF THE LD. CIT(A) ON INITIATION OF REASSESSMENT PROCEEDING S AS WELL AS ON MERITS. . 12. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE ASSESSEE DID APPLY FOR SUPPLY OF REASONS FOR REOPENING OF THE ASSESSMENT, WHICH WAS NOT GIVEN TO IT AND I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 10 WHEN HE WAS ASKED TO FURNISH EVIDENCE IN THIS REGAR D, HE COULD NOT DO SO, AND THE LD. COUNSEL MAINLY LAID STRESS ON THE POINT THAT WHEN A LL THE MATERIAL WAS THERE BEFORE THE ASSESSING OFFICER AT THE TIME OF PROCESSING THE RETURN AND HAD THERE BEEN ANY DOUBT, HE WOULD HAVE PROCEEDED TO CALL FOR RELEVANT PAPERS, WHICH HE DID NOT, SO REOPENING ON THE BASIS OF ALREADY PLACED MATERIAL O N RECORD IS JUST A CHANGE OF OPINION, WHICH DID NOT GIVE ANY AUTHORITY TO THE AS SESSING OFFICER TO INITIATE REASSESSMENT PROCEEDINGS. SINCE RATIO OF THE DECISI ON OF G.K.N. DRIVESHAFTS (INDIA) LTD. HAS BEEN FOLLOWED, THEREFORE, THE LD. CIT(A) I S FULLY JUSTIFIED IN QUASHING THE REASSESSMENT PROCEEDING, WHOSE ORDER IS BEING PROPE R AND VALID, MAY BE UPHELD BY DISMISSING THE APPEAL OF THE REVENUE. 13. WE HAVE HEARD BOTH THE SIDES, CONSIDERED THE M ATERIAL ON RECORD AND FIND THAT IT IS A CASE WHERE RETURN OF INCOME WAS FILED ON 31 .03.2003, WHICH WAS PROCESSED UNDER SECTION 143(1) ON 13.06.2003 AND REASSESSMENT PROCEEDINGS WERE INITIATED BY ISSUING NOTICE UNDER SECTION 148 ON 12.02.2009 BY R ECORDING REASONS. NOTHING IS PLACED ON RECORD TO SHOW THAT THE ASSESSEE HAS EVER ASKED FOR SUPPLYING OF REASONS RECORDED, SO THE QUESTION OF SUPPLYING THE REASON D OES NOT ARISE AND SINCE INTIMATION U/S 143(1) CANNOT BE EQUATED WITH THE ORDER OF THE ASSESSMENT PASSED UNDER SECTION 143(3), SO IT CANNOT BE SAID THAT ANY OPINION HAS B EEN FORMED BY THE ASSESSING OFFICER AND THE HONBLE SUPREME COURT IN THE CASE O F ACIT V. RAJESH JHAVERI STOCK BROKERS P. LTD. 291 ITR 500, WHILE DEALING WITH SIM ILAR TYPE OF SITUATION, HAS INTERPRETED THE PROVISIONS OF SECTION 147 AS APPLIC ABLE AFTER 01.04.1989 IN THE FOLLOWING TERMS: THE SCOPE AND EFFECT OF SECTION 147 AS SUBSTITUTED WITH EFFECT FROM APRIL1, 1989 AS ALSO SECTIONS 148 AND 152 ARE SUBST ANTIALLY DIFFERENT FROM THE PROVISIONS AS THEY STOOD PRIOR TO SUCH SUBSTITUTION . UNDER THE OLD PROVISIONS OF SECTION 147, SEPARATE CLAUSE (A) AND (B) LAID DOWN THE CIRCUMSTANCES UNDER WHICH INCOME ESCAPING ASSESSMENT FOR THE PAST ASSES SMENT YEARS COULD BE ASSESSED OR REASSESSED. TO CONFER JURISDICTION UNDE R SECTION 147(A) TWO I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 11 CONDITIONS WERE REQUIRED TO BE SATISFIED: FIRSTLY T HE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT INCOME, PROFITS OR GAIN S CHARGEABLE TO INCOME TAX HAVE ESCAPED ASSESSMENT, AND SECONDLY HE MUST ALSO HAVE REASON TO BELIEVE THAT SUCH ESCAPEMENT HAS OCCURRED BY REASON OF EITH ER OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY OR TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT OF THAT YEAR. BOTH THESE CONDITI ONS WERE CONDITIONS PRECEDENT TO BE SATISFIED BEFORE THE ASSESSING OFFI CER COULD HAVE JURISDICTION TO ISSUE NOTICE UNDER SECTION 148 READ WITH SECTION 147(A). BUT UNDER THE SUBSTITUTED SECTION 147 EXISTENCE OF ONLY THE FIRST CONDITION SUFFICES. IN OTHER WORDS IF THE ASSESSING OFFICER FOR WHATEVER REASON HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IT CONFERS JURISDICTI ON TO REOPEN THE ASSESSMENT. IT IS, HOWEVER, TO BE NOTED THAT BOTH THE CONDITIO NS MUST BE FULFILLED IF THE CASE FAILS WITHIN THE AMBIT OF THE PROVISO TO SECTION 147. THE CASE AT HAND IS COVERED BY THE MAIN PROVISION AND N OT THE PROVISO. SO LONG AS THE INGREDIENTS OF SECTION 147 ARE FULFI LLED, THE ASSESSING OFFICER IS FREE TO INITIATE PROCEEDING UNDER SECTIO N 147 .. 13.1 FURTHER, THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. RAVINDRAN PRABHAKAR REPORTED IN (2010) 326 ITR 363(MAD), WHIL E FOLLOWING HONBLE SUPREME COURT DECISION IN THE CASE OF ACIT V. RAJESH JHAVER I STOCK BROKERS P. LTD. (SUPRA), HAS TAKEN SIMILAR VIEW AND HEAD NOTES ARE AS UNDER: REASSESSMENT ORIGINAL RETURN ACCEPTED UNDER SECT ION 143(1) CONSIDERATION OF MATERIAL FILED IN RESPONSE TO NOTI CES UNDER SECTIONS 143(2) AND 142(1) IN REASSESSMENT PROCEEDINGS NOT A CASE OF CHANGE OF OPINION REASSESSMENT PROCEEDINGS CANNOT BE SET ASIDE INCO ME-TAX ACT, 1961, SS. 142, 143, 147, 148. . IN THE ABSENCE OF ANY ENTITLEMENT FOR THE ASSE SSING OFFICER TO FORM ANY OPINION AT THE STAGE WHEN THE PROCEEDINGS WERE PENDING UNDE R SECTION 143(1), THE TRIBUNAL IS NOT RIGHT IN HOLDING THAT THERE WAS A CHANGE OF OPI NION. TO SUPPORT THE ABOVE, WE MAY REFER TO THE FOLLOWING FINDING OF THE APEX COURT IN ASST. CIT V. RAJESH JHAVERI STOCK BROKERS P. LTD. REPORTED IN [2007] 291 ITR 500 (SC) (PAGE 509): IN THE SCHEME OF THINGS, AS NOTED ABOVE, THE INTI MATION UNDER SECTION 143(1)(A) CANNOT BE TREATED TO BE AN ORDER OF ASSES SMENT. THE DISTINCTION IS ALSO WELL BROUGHT OUT BY THE STATUTORY PROVISIONS AS THEY STO OD AT DIFFERENT POINTS OF TIME. UNDER SECTION 143(1)(A), AS IT STOOD PRIOR TO APRIL 1, 19 89, THE ASSESSING OFFICER HAD TO PASS AN ASSESSMENT ORDER IF HE DECIDED TO ACCEPT THE RET URN, BUT UNDER THE AMENDED PROVISION, THE REQUIREMENT OF PASSING OF AN ASSESSM ENT ORDER HAS BEEN DISPENSED WITH AND INSTEAD AN INTIMATION IS REQUIRED TO BE SENT. V ARIOUS CIRCULARS SENT BY THE CENTRAL BOARD OF DIRECT TAXES SPELL OUT THE INTENT OF THE L EGISLATURE, I.E., TO MINIMIZE THE DEPARTMENTAL WORK TO SCRUTINIZE EACH AND EVERY RETU RN AND TO CONCENTRATE ON SELECTIVE SCRUTINY OF RETURNS, THESE ASPECTS WERE H IGHLIGHTED BY ONE OF US (D.K. JAIN J.) IN APOGEE INTERNATIONAL LTD. UNION OF INDIA [19 96] 220 ITR 248 (DELHI)). IT MAY BE NOTED ABOVE THAT UNDER THE FIRST PROVISO TO THE NEWLY SUBSTITUTED SECTION 143(1), I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 12 WITH EFFECT FROM JUNE 1, 1999, EXCEPT AS PROVIDED I N THE PROVISION ITSELF, THE ACKNOWLEDGEMENT OF THE RETURN SHALL BE DEEMED TO BE AN INTIMATION UNDER SECTION 143(1) WHERE (A) EITHER NO SUM IS PAYABLE BY THE AS SESSEE, OR (B) NO REFUND IS DUE TO HIM. IT IS SIGNIFICANT THAT THE ACKNOWLEDGEMENT IS NOT DONE BY ANY ASSESSING OFFICER, BUT MOSTLY BY MINISTERIAL STAFF. CAN IT BE SAID THA T ANY ASSESSMENT IS DONE BY THEM? THE REPLY IS AN EMPHATIC NO. THE INTIMATION UNDER SECTION 143(1)(A) WAS DEEMED TO BE A NOTICE OF DEMAND UNDER SECTION 156, FOR THE AP PARENT PURPOSE OF MAKING MACHINERY PROVISIONS RELATING TO RECOVERY OF TAX AP PLICABLE. BY SUCH APPLICATION ONLY RECOVERY INDICATED TO BE PAYABLE IN THE INTIMATION BECAME PERMISSIBLE. AND NOTHING MORE CAN BE INFERRED FROM THE DEEMING PROVISION. TH EREFORE, THERE BEING NO ASSESSMENT UNDER SECTION 143(1)(A), THE QUESTION OF CHANGE OF OPINION, AS CONTENDED, DOES NOT ARISE. IN VIEW OF THE ABOVE, THE ORDERS OF THE TRIBUNAL SE TTING ASIDE THE ORDERS OF REASSESSMENT PASSED BY THE ASSESSING OFFICER ONLY O N THE GROUND THAT THERE WAS A CHANGE OF OPINION CANNOT BE SUSTAINED. ACCORDINGLY, THE ORDERS QUESTIONED IN ALL THESE APPEALS ARE SET ASIDE. AS THERE WAS NO CONSIDERATIO N ON THE MERITS AND AS ALREADY POINTED OUT, ALL THE APPEALS ARE DISPOSED OF ONLY O N THE GROUND OF CHANGE OF OPINION, WE WILL HAVE TO NECESSARILY REMIT THE MATTER TO THE TRIBUNAL FOR FRESH CONSIDERATION ON THE MERITS OF THE CASE AND WITHOUT REFERENCE TO THE ISSUE OF CHANGE OF OPINION. ACCORDINGLY, ALL THE APPEALS ARE ALLOWED, THE SUBST ANTIAL QUESTIONS OF LAW ARE ANSWERED IN FAVOUR OF THE REVENUE AND AGAINST THE A SSESSEE. NO COSTS. 13.2 FURTHER, THE ITAT CHENNAI B BENCH SPECIAL BENCH IN THE CASE OF ACIT/DCIT V. MAHINDRA HOLIDAYS AND RESORTS (INDIA) LTD. & OTHERS [2010] 3 ITR (TRIB) 600 (CHENNAI)[SB] HAS HELD AS UNDER: HELD, (I) THAT SINCE ADMITTEDLY THE ASSESSMENTS FO R THE ASSESSMENT YEARS 1999-2000 TO 2001-02 WERE COMPLETED UNDER SECTION 1 43(1) IT COULD NOT BE SAID THAT A DEFINITE OPINION HAD BEEN EXPRESSED BY THE ASSESSIN G OFFICER. AS A MATTER OF FACT, CONSIDERING THE WIDE SCOPE GIVEN IN EXPLANATION 2 T O SECTION 147, THE ASSESSING OFFICER COULD BE SAID TO BE OF THE VIEW THAT INCOME CHARGEABLE TO TAX HAD BEEN UNDER- ASSESSED. THE TANGIBLE MATERIAL AVAILABLE WITH THE ASSESSING OFFICER WAS THAT THE ASSESSEE HAD RECEIVED CERTAIN SUBSCRIPTION FROM CUS TOMERS ONLY A PORTION OF WHICH HAD BEEN DECLARED AS INCOME. THEREFORE, IT COULD BE SAID THAT THE ASSESSING OFFICER HAD REASON TO BELIEVE ABOUT THE ESCAPEMENT OF INCOM E. THE FACT THAT THE MATERIAL WAS AVAILABLE IN AN EARLIER ASSESSMENT YEAR 1997-98, ON THE BASIS OF WHICH A VIEW HAD BEEN TAKEN, WAS NOT RELEVANT FOR THE YEARS IN QUEST ION. THEREFORE, THE REOPENING OF THE ASSESSMENTS FOR THE ASSESSMENT YEARS 1999-2000 TO 2 001-02 WAS VALID. 13.3 SIMILARLY IN THE CASE OF WCI (MADRAS) (P) LTD. V. ACIT (2010) 324 ITR181 (MAD) IT IS HELD AS UNDER ASSESSMENT INTIMATION UNDER SECTION 143(1) CA NNOT BE TREATED AS ASSESSMENT ORDER INCOME-TAX ACT, 1961, S. 143(1). I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 13 REASSESSMENT NON-DISCLOSURE OF MATERIAL FACTS FINDING THAT INCOME ESCAPED ASSESSMENT PLEA OF LIMITATION OF FOUR YEA RS TO BE REJECTED INCOME-TAX ACT, 1961. 14. SINCE THE CASE OF THE ASSESSEE DOES NOT FALL W ITHIN THE PROVISO TO SECTION 147, THEREFORE, QUASHMENT OF INITIATION OF REASSESSMENT CANNOT BE UPHELD BECAUSE AO COULD VALIDLY INITIATE REASSESSMENT. THE VIEW TAKEN HEREIN IS ALSO FORTIFIED BY THE LATEST JURISDICTIONAL HIGH COURT DECISION IN THE CA SE OF M/S. KONE ELEVATOR INDIA PVT. LTD. V. ITO IN TC(A) NO. 41 OF 2008 DATED 08.03.201 1, IN WHICH, WHILE FOLLOWING THE HONBLE SUPREME COURTS DECISION IN THE CASE OF RAJ ESH JHAVERI STOCK BROKERS P. LTD. (SUPRA), IT HAS BEEN CLEARLY HELD THAT REASSES SMENT COULD BE INITIATED, WHERE RETURN HAS BEEN PROCESSED UNDER SECTION 143(1) AND THE ASSESSING OFFICER HAS REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSME NT. AS SUCH, WHILE ACCEPTING THE APPEAL OF THE REVENUE IN THIS REGARD, WE SET AS IDE THE ORDER OF THE LD. CIT(A) AND RESTORE THAT OF THE ASSESSING OFFICER AS REGARDS IN ITIATION OF PROCEEDINGS AND REASSESSMENT IS CONCERNED. SO FAR AS THE RATIO OF T HE DECISION IN THE CASE OF G.K.N. DRIVESHAFTS (INDIA) LTD. (SUPRA) IS CONCERNED, IN V IEW OF THE FACTS AND CIRCUMSTANCES, THE SAME APPEARS TO BE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. AS SUCH, THE APPEAL OF THE REVENUE IS ACCEPTED AND THE ORDER OF LD. CIT(A) TO THIS EXTENT IS REVERSED AND THAT OF THE AO IS RESTORED. AS REGARDS ISSUE ON MERITS WITH REGARD TO LEASE RENTAL ADVANCES PAID BY THE ASSESSEE-TRUST TO THE COMPANY ARE APPLICATION OF INCOME OR NOT, IT IS SEEN THAT THE FACTUAL ASPECT A ND OTHER RELEVANT MATERIAL OR DETAILS ARE NEITHER PLACED ON RECORD NOR THE SAME HAVE BEEN CONSIDERED OR APPROPRIATELY DEALT WITH BY THE LD. CIT(A). THEREFORE, IN THE INT EREST OF JUSTICE AND TO HAVE A FAIR PLAY IN THE MATTER, IT WOULD BE JUST AND PROPER TO SET A SIDE THE ORDER OF THE LD. CIT(A) IN THIS REGARD AND RESTORE THE MATTER TO THE FILE OF L D. CIT(A) FOR RECONSIDERATION AFTER GIVING DUE OPPORTUNITY TO BOTH THE PARTIES. WE HOLD AND DIRECT ACCORDINGLY. I.T.A. NO. 2120/MDS/10, ITA NO. 75/MDS/11 & C.O. NOS. 18 & 28/MDS/11 14 15. SINCE WE ARE REVERSING THE ORDER OF THE LD. CI T(A) AND RESTORING THAT OF THE ASSESSING OFFICER IN RESPECT OF INITIATION OF REASS ESSMENT PROCEEDINGS, THEREFORE, WE DISMISS THE RELEVANT GROUND IN THE CO OF THE ASSESS EE, WHICH IS STATED BY BOTH THE PARTIES TO BE IN SUPPORT OF THE ORDER OF THE LD. CIT(A), ON THIS POINT AND ON MERITS ISSUE IS BEING RESTORED TO THE CIT(A).SO ON THAT CO UNT IT IS DEEMED TO BE PARTLY ALLOWED. 16. AS RESULT, THE APPEAL OF THE REVENUE IN ITA NO . 2120/MDS/2010 AND CO NO 18/MDS/2011 ARE DISMISSED AND APPEAL OF THE REVENUE IN ITA NO. 75/MDS/2011 AND CO NO. 28/MDS/2011 ARE ACCEPTED/PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 30.06.2011. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI, DATED, THE 30.06.2011 VM/- TO:THE ASSESSEE//A.O./CIT(A)/CIT/D.R.