Narendrakumar Sohanraj Choudhary, Ahmedabad V. The ITO, Ward-3(1)(3), Ahmedabad

ITA 2192/AHD/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 0764 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Assessee Lawyers: P D SHAH
• Section: 143(3)

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 2192/AHD/2017 ( ASSESSMENT YEAR : 2009-10) NARENDRAKUMAR SOHANRAJ CHOUDHARY MEHTA LODHA & CO. CHARTERED ACCOUNTANTS 105, SAKAR-I, ASHRAM ROAD, AHMEDABAD-380009 / VS. INCOME TAX OFFICER WARD-3(1)(3), AHMEDABAD ./ ./ PAN/GIR NO. : ACLPC3302F ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI P. D. SHAH, A.R. / RESPONDENT BY : SHRI ALBINUS TIRKEY, SR. D.R. DATE OF HEARING 26/09/2018 !'# / DATE OF PRONOUNCEMENT 08/10/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-10, AHMEDA BAD (CIT(A) IN SHORT), DATED 17.01.2017 ARISING IN THE ASSESSMENT ORDER DATED 27.02.2015 PASSED BY THE ASSESSING OFFICER (AO) U/S . 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; (THE ACT) CONCERNI NG ASSESSMENT YEAR 2009-10. ITA NO. 2192/AHD/17 [NARENDRAKUMAR S. CHOUDHARY VS. ITO] A.Y. 2009-10 - 2 - 2. BEFORE WE PROCEED TO ADJUDICATE THE APPEAL FILE D BY THE ASSESSEE, WE NOTICE THAT THE APPEAL HAS BEEN REPORTEDLY FILED BELATEDLY BY 170 DAYS. THE ASSESSEE HAS FILED PETITION SEEKING COND ONATION OF DELAY. ON GOING THROUGH THE PETITION, WE FIND THAT IT DOES NOT APPEAR TO BE ANY WILLFUL NEGLECT OR CARELESSNESS IN FILING THE A PPEAL IN TIME. WE DO NOT SEE ANY TRACES OF MALAFIDE IN THE DELAY. IN TH E TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE OBSERVE THAT ASSE SSEE HAS SHOWN SUFFICIENT CAUSE FOR DELAY WITH WHICH WE AGREE. T HEREFORE, WE ARE INCLINED TO EXERCISE THE JUDICIAL DISCRETION FOR CO NDONATION OF DELAY IN FAVOUR OF ASSESSEE. HENCE, THE DELAY FOR FILING TH E APPEAL STANDS CONDONED. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LE ARNED AR FOR THE ASSESSEE SUBMITTED AT THE OUTSET THAT ACTION UNDER S.147 OF THE ACT HAS BEEN WRONGFULLY TAKEN WITHOUT AUTHORITY OF LAW. TH IS BEING JURISDICTIONAL DEFECT WHICH GOES TO THE ROOT OF THE MATTER REQUIRED TO BE GIVEN PRIMACY IN THE MATTER OF ADJUDICATION. TH E LEARNED AR INTER ALIA ALSO POINTED OUT WITH REFERENCE TO THE OBJECTIONS R AISED AGAINST THE REASONS OF THE RE-OPENING (PAGE NOS. 2-4 OF THE PAPER BOOK) AND SUBMITTED THAT THE AO HAS MECHANICALLY COMPLETED TH E ASSESSMENT WITHOUT DISPOSING OF THE OBJECTIONS RAISED BY THE A SSESSEE. THE LEARNED AR SUBMITTED THAT THE RE-ASSESSMENT COMPLET ED UNDER S.147 OF THE ACT IS CLEARLY BAD IN LAW IN VIEW OF THE NON-DI SPOSAL OF OBJECTIONS. THE LEARNED AR ACCORDINGLY INSISTED THAT NEITHER TH E REASONS RECORDED MEETS THE REQUIREMENTS OF LAW AS ENJOINED BY SECTIO N 147 OF THE ACT NOR DOES THE ACTION OF THE AO IS IN CONFORMITY WITH THE STANDARD OPERATING PROCEDURE FOR DISPOSAL OF OBJECTION RAISE D AS MANDATED BY THE SEVERAL JUDICIAL PRECEDENTS. THE LEARNED AR AC CORDINGLY SUBMITTED THAT THE AFORESAID JURISDICTIONAL DEFECTS ARE NOT C URABLE AND THEREFORE, THE RE-ASSESSMENT ORDER REQUIRES TO BE CANCELLED AN D SET ASIDE. ITA NO. 2192/AHD/17 [NARENDRAKUMAR S. CHOUDHARY VS. ITO] A.Y. 2009-10 - 3 - 4. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDERS OF THE AO AND CIT(A) IN THIS REGARD. 5. SINCE, THE ISSUE RAISED ON BEHALF OF THE ASSESSE E TOWARDS JURISDICTIONAL DEFECT IS FUNDAMENTAL AND CARDINAL I N NATURE WHICH GOES TO THE VERY ROOT OF THE CONTROVERSY, WE CONSIDER IT EXPEDIENT TO DEAL WITH THE SAME IN THE FIRST INSTANCE. WE NOTICE FROM THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFT S (INDIA) LTD. VS. ITO 259 ITR 19 (SC) THAT ON RECEIPT OF REASONS FROM THE AO, THE ASSESSEE IS ENTITLED TO FILE OBJECTIONS TO THE ISSU ANCE OF THE NOTICE AND THE AO IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. THE AO HAS ADMITTEDLY FAILED TO DISPOSE OF THE OBJE CTIONS RAISED BY THE ASSESSEE. IN VIEW OF THE DECISION OF THE HONB LE SUPREME COURT, THE AO WAS UNDER A SACROSANCT OBLIGATION TO DISPOSE OF THE PRELIMINARY OBJECTION RAISED BY THE ASSESSEE AND COULD NOT HAVE FRAMED THE RE- ASSESSMENT ORDER WITHOUT DOING SO. SIMILAR ISSUE W AS CROPPED UP AGAIN BEFORE THE HONBLE GUJARAT HIGH COURT FOR ITS CONSIDERATION IN THE CASE OF ARVIND MILLS LTD. VS. ACWT 270 ITR 467 & ORS. (GUJ.) AND RECENTLY IN MGM EXPORTS VS. DCIT 323 ITR 331 (G UJ). APPLYING THE LEGAL POSITION AS LAID DOWN IN GKN DRIVESHAFTS (SUPRA), THE HONBLE JURISDICTIONAL HIGH COURT HELD THE ACTION O F THE AO IN FRAMING THE RE-ASSESSMENT ORDER WITHOUT FIRST DISPO SING OF THE PRELIMINARY OBJECTIONS RAISED BY THE ASSESSEE TO BE UNSUSTAINABLE IN LAW. ACCORDINGLY, THE HONBLE HIGH COURT QUASHED A ND SET ASIDE THE RE-ASSESSMENT ORDER. IT HOWEVER DIRECTED THE AO TO DISPOSE OF THE PRELIMINARY OBJECTIONS BY PASSING A SPEAKING ORDER AND ONLY THEREAFTER PROCEED WITH THE RE-ASSESSMENT PROCEEDINGS IN ACCOR DANCE WITH LAW. IN THE LIGHT OF THE DECISION OF THE HONBLE HIGH CO URT, THE MATTER REQUIRES TO BE REMITTED BACK TO THE FILE OF THE AO FOR PASSING A FRESH ORDER AFTER DISPOSING OF THE OBJECTIONS WITH REGARD TO ALLEGED JURISDICTIONAL DEFECT. ITA NO. 2192/AHD/17 [NARENDRAKUMAR S. CHOUDHARY VS. ITO] A.Y. 2009-10 - 4 - 6. ACCORDINGLY, RE-ASSESSMENT ORDER PASSED UNDER S. 147 OF THE ACT IS SET ASIDE AND ALL THE ISSUES RAISED IN THE APPEA L ARE RESTORED TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH LAW AFTER GIVING PROPER OPPORTUNITY TO THE ASSESSEE IN THIS R EGARD. THE AO IS DIRECTED TO DEAL WITH THE OBJECTIONS AGAINST THE AC TION INITIATED UNDER S.147 OF THE ACT IN AN OBJECTIVE MANNER AND PASS SP EAKING ORDER THEREON BEFORE PROCEEDING FURTHER. THUS, ALL THE I SSUES ARE KEPT OPEN FOR FRESH ADJUDICATION WITH REGARD TO THE ALLEGED I LLEGALITY IN ASSUMPTION OF JURISDICTION. THE RE-ASSESSMENT ORDE R PASSED UNDER S.147 OF THE ACT APPEALED AGAINST IS THUS SET ASIDE IN TERMS OF DIRECTIONS NOTED ABOVE AND THE MATTER IS REMANDED B ACK TO THE FILE OF THE AO FOR NECESSARY ACTION AS SPELT OUT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. SD/- SD/- (MADHUMITA ROY) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 08/10/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 08/ 10 / 2018