Steel Authority Of India Ltd., New Delhi V. DCIT, New Delhi

ITA 2154/DEL/2011

• Counselvise Citation: 215420114 RSA 2011
• Duration Of Justice: 4 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 18-08-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 02-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PN SHASTRI
• Keywords: Reopening of assessment; Depreciation; Audit objection; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148

Judgement Text

ITA NO. 2154 /DEL/201 1 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER I.T.A. NO. 2154/ D EL/2011 A.Y. : 200 3 - 0 4 STEEL AUTHORITY OF INDIA LTD., GM (TAXATION) 4 TH FLOOR, ISPAT BHAVAN, LODI ROAD, NEW DELHI (PAN: AAACS70622F) VS. DCIT, CIRCLE 9(1), NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : S HRI MP RASTOGI, ADV. & SHRI P.N. SHASTRI, ADV. DEPARTMENT BY : SH. SUJIT KUMAR, SR. DR DATE OF HEARING : 1 8 - 0 8 - 201 5 DATE OF ORDER : 1 0 - 0 9 - 201 5 ORDER PER H.S. SIDHU : J M THE APPEAL FILED BY THE ASSESSEE EMANATE OUT OF THE ORD ER DATED 23 . 2 .201 1 PASSED BY THE LD. CIT(A) - XI I , NEW DELHI RELEVANT TO ASSESSMENT YEAR 200 3 - 0 4 . 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN THE ASSESSEE S APPEAL: - 1. THE CIT(A) HAS ERRED IN CONFIRMING THE REOPENING OF ASSESSMENT U/S. 147 / 148 OF THE I.T. ACT ON THE BASIS OF A CHANGE OF OPINION PROMPTED ON THE BASIS OF AUDIT OBJECTIONS. ITA NO. 2154 /DEL/201 1 2 2. THE CIT (A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE AO BY TREATING THE FIBER OPTIC COMPUTER NETWORKING AS AN ORDINARY ASSET INSTEAD OF BEING A PART OF THE COMPUTER SYSTEMS AND CONSEQUENTLY DISALLOWING RS. 75.05 LACS OF DEPRECIATION. 3. THAT THE ABOVE GR OUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO EACH OTHER. 4. THAT THE APPELLANT SEEKS LEAVE TO ADD, AMEND, ALTER, ABANDON OR SUBSTITUTE ANY OF THE ABOVE GROUNDS AT THE TIME OF HEARING OF APPEAL. 3 . THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED R ETURN OF INCOME ON 13.11.2003 DECLARING TOTAL INCOME AT RS. 6032 LAKHS. THE ASSESSMENT ORDER U/S. 143(3) OF THE INCOME TAX ACT, 1961 WAS PASSED ON 30.3.2006. THEREAFTER THE CASE WAS REOPENED U/S. 148 ON 6.7.2007 AND IN RESPONSE TO THIS NOTICE ASSESSE E FILED RETURN OF INCOME ON 7.9.2007. THE ASSESSEE ALSO SOUGHT REASON FOR REOPENING ON THE SAME DAY. THE REASONS WERE SUPPLIED TO THE A.R. OF THE ASSESSEE AND ALSO THE OBJECTIONS FILED BY THE ASSESSEE AGAINST THE REOPENING WERE DISPOSED OFF ON 22.10.2 008. NOTICES U/S. 143(2) & 142(1) WERE ISSUED AND SERVED UPON THE ASSESSEE AND IN RESPONSE THEREOF A.R. OF THE ASSESSEE COMPANY ATTENDED THE PROCEEDINGS FROM TIME TO TIME AND FILED THE DETAILS, AS SOUGHT BY THE AO. THEREAFTER, THE AO ASSESSED THE INCOM E U/S 143(3) OF THE I.T. ACT. 4. IN THIS APPEAL, THE ASSESSEE HAS MAINLY CHALLENGED THE REOPENING ASSESSMENT U/S. 147/148 OF THE I.T. ACT ON THE BASIS OF A CHANGE OF OPINION PROMPTED ON THE BASIS OF AUDIT OBJECTIONS. LD. COUNSEL OF THE ASSESSEE AT THE THRESHOLD STATED THAT THE SIMILAR A ND ITA NO. 2154 /DEL/201 1 3 IDENTICAL ISSUE HAS BEEN DECIDED BY THE ITAT IN ASSESSEE OWN CASE IN THE YEAR 1981 - 82, 1987 - 88, 1988 - 89 & 1989 - 90 AND REQUESTED THAT THE SAME MAY BE FOLLOWED IN THE PRESENT CASE AND DECIDE THE ISSUE IN DISPUTE ACCORDINGLY. LD. COUNSEL FOR THE ASSESS EE FURTHER STATED THAT NOTWITHSTANDING THE FACT THAT THE REASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS INITIATED WITHIN 4 YEARS FROM THE END OF THE RELEVANT ASSTT. YEAR, THERE IS NO CHANGE OF OPINION NEVERTHELESS. 5. ON THE OTHER HAND, LD. DR CONT ENDED THAT THE REOPENING IN QUESTION IS VALID, SINCE IT WAS DONE ON THE BASIS OF AN AUDIT OBJECTION. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. AFTER CONSIDERING THE POSITION WITH REGARD TO THE ISSUE OF REOPENING, WE FIND THAT ALL THE QU ESTIONS / REASONS RECORDED BY THE AO ARE COVERED BY THE ITAT EARLIER ORDER DATED 25.8.2003, IN ASSESSEE S OWN CASE FOR ASSESSMENT YEAR 1981 - 82. LIKE IN THAT CASE, THE ASSESSEE HAD MADE FULL AND TRUE DISCLOSURE DURING THE ORIGINAL ASSESSMENT PROCEEDINGS WI TH REGARD TO THESE ISSUES. WE ARE OF THE VIEW THAT REOPENING HAD BEEN DONE MERELY ON CHANGE OF OPINION IN AS MUCH AS THAT IN THE ORIGINAL ASSESSMENT MADE U/S. 143(3) OF THE I.T. ACT, THE AO HAD APPARENTLY APPLIED HIS MIND AND HAD RAISED QUERIES WITH RE GARD TO THE ITEMS WHICH HAVE BEEN IDENTIFIED BY THE AO IN THIS NOTICE U/S. 147/148 OF THE INCOME TAX ACT. WE ALSO FIND THAT AO HAS NO FRESH MATERIAL TO FORM HIS OPINION REGARDING ESCAPEMENT OF ASSESSMENT AND HE HAS ALSO NOT FOUND ANY TANGIBLE ITA NO. 2154 /DEL/201 1 4 MATERIAL TO RECORD THE REASONS FOR REOPENING OF THE ASSESSMENT OF THE ASSESSEE. IT IS MERELY A CHANGE OF OPINION WHICH IS NOT PERMISSIBLE UNDER THE LAW AS WELL AS ACCORDING TO THE VARIOUS DECISIONS RENDERED BY THE HON BLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. KELVINATOR OF INDIA LIMITED IN APPEAL NOS. 2009 - 2011 OF 2003 REPORTED IN 320 ITR 561 AND COMMISSIONER OF INCOME TAX VS. USHA INTERNATIONAL LTD. [2012] 348 ITR 485 (DELHI) [ FULL BENCH ] THE REASSESSMENT IS INVALID ON THE PART OF THE AO AND ALSO ON CONFIRMING THE SAME ON THE PART OF THE LD. CIT(A). 6.1 IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES, AS EXPLAINED ABOVE AND RESPECTFULLY FOLLOWING THE PRECEDENT IN THE ASSESSEE S OWN CASE IN THE ASSTT. YEARS 1981 - 82, 1987 - 88, 1988 - 89 & 1989 - 90 AND ALSO RESPECTFULLY FOLLOWING THE LAW LAID DOWN BY THE HON BLE SUPREME COURT OF INDIA AND FULL B ENCH OF THE HON BLE HIGH COURT OF DELHI, WE ARE OF THE VIEW THAT BOTH THE AUTHORITIES BELOW HAVE GONE WRONG IN DECIDING THE REOPENING AS VALID. HOWE VER, IN VIEW OF THE AFORESAID DISCUSSIONS AND THE PRECEDENTS RELIED UPON , AS AFORESAID IT IS ESTABLISHED THAT THAT IN THE PRESENT CASE THE ISSUE REOPENING OF ASSESSMENT IS INCORRECT AND INVALID. THEREFORE, WE QUASH THE ORDERS OF THE AUTHORITIES BELOW ON THIS LEGAL ISSUE AND DECIDE THE SAME IN FAVOR OF THE ASSESSEE . 6 . 2 SINCE WE HAVE ALREADY QUASHED THE REASSESSMENT PROCEEDINGS AS AFORESAID, RAISED IN THE ASSESSEE S APPEAL, IN OUR CONSIDERED OPIN I ON, THERE IS NO NEED TO ADJUDICATE THE ISSUES ON MERITS . ITA NO. 2154 /DEL/201 1 5 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE O PEN C OURT ON 1 0 / 9 /20 1 5 . S D / - S D / - [ O.P. KANT ] [ H.S. SIDHU ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 1 0 / 9 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES