M/S NOBLE DRUGS LTD, Nashik V. ASST. COMMISSIONER OF INCOME TAX ,CIRCLE -2 , NASHIK

ITA 214/PUN/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2120 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 06-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 148; 143(3)

Judgement Text

आयकर अपीऱीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S.GODARA, JM AND SHRI DR. DIPAK P. RIPOTE, AM आयकर अपीऱ सं. / ITA No.214/PUN/2020 ननधधारण वषा / Assessment Year : 2008-09 M/s. Noble Drugs Ltd., Plot No. B-22, MIDC Ambad, Nashik - 422 010 PAN : AAACN6198H .......अपऩलधथी / Appellant बनधम / V/s. ACIT, Circle -1, Pune ......प्रत्यथी / Respondent Assessee by : None Revenue by : Shri Arvind Desai सपनवधई की तधरऩख / Date of Hearing : 15.06.2022 घोषणध की तधरऩख / Date of Pronouncement : 28.07.2022 आदेश / ORDER PER S. S. GODARA, JM : 1. This assessee’s appeal for A.Y. 2008-09 is directed against the CIT(A)-2, Nashik’s order dated 14/11/2019 passed in case No. Nsk/CIT(A)-2/295/ 2015-16 involving proceeding u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961; in short "the Act”. Case called twice. None appears at assessee’s behest. It is accordingly proceeded ex-parte. 2 ITA No.214/PUN/2020 A.Y. : 2008-09 M/s. Noble Drugs Ltd., 2. The assessee pleads the following substantive grounds in instant appeal. 1. On the basis of the facts, in the circumstances of the case and as per law, the Commissioner of Income Tax, (Appeals)- 2, Nashik, is not justified in upholding the issue of notice u/s. 148 after 4 years from the end of the assessment year when there was no failure on the part of appellant to disclose fully & truly all material facts necessary for assessment allowing the issue of notice U/s. 148 of the Act as the proceeding U/s. 148 were initiated merely due to change in opinion of the AO. 2. On the basis of the facts, in the circumstances of the case and as per law, the Commissioner of Income Tax, (Appeals)- 2, Nashik, is not justified in holding that there is no any change in opinion, particularly when the A.O. has allowed the carry forward of the loss pertaining to A.Y. 2000-01 in the assessment proceedings for the year under appeal. 3. On the basis of facts and in the circumstances of the case and as per law, the Commissioner of Income Tax, (Appeals)- 2, Nashik, is not justified in upholding the reassessment proceedings when the same were initiated on the basis of Audit Objection. 4. On the basis of the facts and in the circumstances of the case and as per law, the Commissioner of Income Tax, (Appeals) - 2, Nashik, is not justified in disallowing carry forward of the unabsorbed depreciation pertaining to A.Y. 2000-01 beyond 8 years. The CIT(A) is further not justified in ignoring the decision of Gujrat High Court in the case of General Motors India Pvt. Ltd. vs Dy. CIT (Spl Civil Application No. 1773 of 2012 as well as Supreme Court in the case of Seshsayee Paper & Boards Ltd. Vs Dy. CIT (ITA No.1812-13 of 2005 as well as ITAT, Mumbai Bench in the case of Confidence Petroleum India Ltd. (ITA No.1937/Mum/2012, A.Y. 2007-08) 3 ITA No.214/PUN/2020 A.Y. : 2008-09 M/s. Noble Drugs Ltd., 5. The appellant craves for the addition to, deletion, alteration, modification of the above grounds of appeal.” 3. We next note that the Assessing Officer had recorded the following reasons of re-opening in instant case:- “The assessee has filed the return of income for the A.Y. 2008-09 on 30.09.2008 showing total income of Rs.63,47,009/-. Assessment proceedings was completed on 10.12.2010. The assessee company is engaged in the business of manufacturing of and job work of pharmaceutical products. Scrutiny records revealed that the assessee had carried forward loss / unabsorbed depreciation of Rs. 8,45,522/- of A. Y. 2000-01 beyond A. Y. 2008-09 which is not in order because any loss can be carried forward for 8 assessment years only from the assessment year in which it was first computed or determined. Further, as per ITAT Mumbai decision of 30.06.2010 in case of M/s Times Guarantee, unabsorbed depreciation can be set off/carried forward for A.Y. 2000-01 up to A. Y. 2008-09 and not beyond that. Hence, carry forward of loss / unabsorbed depreciation of A. Y. 2000-01 beyond A. Y. 2008-09 is not in order and resulted into irregular carry forward of loss / unabsorbed depreciation beyond A.Y. 2008-09. This led to short levy of tax of Rs. 2,61,267/- (Notional/ potential). The assessing officer has not disallowed specifically this carry forward in assessment order in absence of which it is assumed that assessing officer has allowed this carry forward. Therefore, I have reason to believe that income to the extent of Rs.8,45,522/- has been escaped from assessment in the A. Y. 2008-09. Therefore, the assessment for A. Y. 2008-09 is required to be reopened u/s 147 of the I.T. Act." 4. Mr. Desai could hardly rebut the clinching fact that we are in assessment year 2008-09 wherein the Assessing Officer had initiated the impugned reopening on 05.01.2015 i.e. beyond a period of 4 years from the 4 ITA No.214/PUN/2020 A.Y. : 2008-09 M/s. Noble Drugs Ltd., end of relevant assessment year. And also that the Assessing officer had earlier completed section 143(3) regular assessment on 10.12.2010. It is thus an instance wherein the Assessing Officer has nowhere attributed the assessee’s failure in disclosing “ fully” and “truly” all material facts necessary for his assessment as per section 147 1 st proviso. We therefore adopt stricter approach in light of Commission of Customs V/s Dilipkumar and co. 2018 (9) SCC 1 (SC) (FB) and Hindustan Lever LTd. Vs. R.B. Wadkar (2004) 268 ITR 332 to quash the impugned reopening for this precise reason alone. 5. That apart, the factual position would hardly any different on merits as well since this tribunal’s Special Bench decision in Times Guarantee case(supra) has already been reversed in General Motors India Pvt. Ltd. V/s DCIT (2012) 25 taxmann.com 364(Guj.) We according quash the impugned re-opening qua the instant latter aspect as well. All other pleadings on merits stand rendered academic. 6. Delay of six days in filing the instant appeal is condoned since falling in Covid-19 pandemic outbreak period. 7. This assessee’s appeal is allowed in above terms. Order pronounced in the Open Court on this 28 th day of July, 2022. Sd/- Sd/- (DR.DIPAK P.RIPOTE) (S.S. GODARA) लेखध सदस्य/ ACCOUNTANT MEMBER न्यधनयक सदस्य/JUDICIAL MEMBER पपणे / Pune; ददनधांक / Dated : 28 th July, 2022. Ashwini 5 ITA No.214/PUN/2020 A.Y. : 2008-09 M/s. Noble Drugs Ltd., आदेश की प्रनतनलनप अग्रेनषत / Copy of the Order forwarded to : 1. अपऩलधथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT-Exemption, Pune. 4. The ACIT- Exemption Range, Pune. 5. नवभधगऩय प्रनतनननध, आयकर अपऩलऩय अनधकरण, “ए” बेंच, पपणे / DR, ITAT, “A” Bench, Pune. 6. गधर्ा फ़धइल / Guard File. आदेशधनपसधर / BY ORDER, // True Copy // Senior Private Secretary आयकर अपऩलऩय अनधकरण, पपणे / ITAT, Pune. 6 ITA No.214/PUN/2020 A.Y. : 2008-09 M/s. Noble Drugs Ltd., S.No. Details Date Initials 1 Draft dictated on 15.06.2022 2 Draft placed before author 28.07.2022 3 Draft proposed & placed before the Second Member 4 Draft discussed/approved by Second Member 5 Approved Draft comes to the Sr. PS/PS 6 Kept for pronouncement on 7 Date of uploading of Order 8 File sent to Bench Clerk 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order