Wonderla Holidays Limited, Cochin V. The DCIT, Ernakulam

ITA 22/COCH/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7700 (ITAT-COCHIN)
• Duration Of Justice: 2 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-08-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 23-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHANTOM BOSE
• Assessee Lawyers: SATYANARAYAN
• Keywords: Opportunity of being heard; Question of law; Procedural lapse
• Section: 143(3); 14A; 148

Judgement Text

ITA NO . 22/C/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH KOCHI BEFORE S/ SHRI B P JAIN , AM & GEORGE GEORGE K, JM ITA NO 22/COCH/2014 (A SST YEAR 2006 - 07 ) WONDERLA HOLIDAYS LTD (VEEGA HOLIDAYS AND PARKS P LTD. SINCE MERGED WITH) PALLIKKARA KUMARAPURAM PO KOCH I 683 565 VS THE DY COMMR OF INCOME TAX CIRCLE 4(2), KOCHI ( APPELLANT) (RESPONDENT) PAN NO. AAACW4514C ASSESSEE BY SH SATYANARAYAN REVENUE BY SRI SHANTOM BOSE, CIT - DR DATE OF HEARING 30 TH AUG 2016 DATE OF PRONOUNCEMENT 1 ST SEPT 2016 ORDE R PER GEORGE GEORGE K,JM: THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DIRECTED AGAINST THE CIT(A)S ORDER DATED 3.10.2013. THE RELEVANT ASSESSMENT YEAR IS 2006 - 07. 2 THE BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE (VEEGA HOL IDAYS & PARKS P LTD), IS A PRIVATE LIMITED COMPANY, ENGAGED IN THE BUSINESS OF RUNNING AN AMUSEMENT PARK. THE ASSESSEE GOT AMALGAMATED WITH WONDERLA HOLIDAYS PVT LTD ., WITH EFFECT FROM 1 ST APRIL 2008 VIDE HONBLE KERALA HIGH COURT JUDGMENT DATED 25 TH SEPT 2009. ITA NO . 22/C/2014 2 THIS APPEAL, RELATING TO VEEGA HOLIDAYS PVT LTD ., HAS FILED BY WONDERALA HOLIDAYS P LTD, AS A SUCCESSOR AND AMALGAMATED COMPANY. 3 FOR THE ASSESSMENT 2006 - 07, THE RETURN OF INCOME WAS FILED ON 29.11.2006 DECLARING A TOTAL INCOME OF RS. 5,15,57,440 / - . SUBSEQUENTLY, THE RETURN WAS REVISED ON 27.3.2008 DECLARING A TOTAL INCOME OF RS. 4,93,15,000/ - . NOTICE U/S 148 WAS ISSUED ON 11.3.2010 AND THE ASSESSMENT U/S 143(3) R.W.S 147 OF THE I T ACT WAS COMPLETED VIDE ORDER DA T ED 23.10.2010 FIXING THE TOTAL INCOME AT RS. 5, 26,85,679/ - . THE AO HAD MADE DISALLOWANCE BY INVOKING THE PROVISIONS OF SECTION 14A AMOUNTING TO RS. 33,57,039/ - . 4 AGGRIEVED BY THE ASSESSMENT, THE ASSESSEE PREFERRED APPEAL TO THE FIRST APPELLATE AUTHORITY. THE C IT(A) CONFIRMED THE ASSESSMENT ORDER AND SUSTAINED THE DISALLOWANCE MADE BY INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT. 5 AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. THE ASSESSEE HAD FILED VARIOUS GROUNDS CHALLENGING THE DISALLOWANCE OF EXPE NDITURE BY INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT. THE ASSESSEE HAS ALSO FILED A PETITION FOR FILING ADDITIONAL GROUND AS PER RULE 11 OF THE ITAT RULES. THE ADDITIONAL GROUND RAISED READS AS FOLLOWS : THE LD AO HAS ERRED I COMPLETING THE ASSESSM ENT IN THE NAME OF THE ERSTWHILE VEEGA HOLIDAYS & PARKS P LTD ON 2312.2010M, WHEN THE COMPANY WAS NOT IN EXISTENCE. VEEGA HOLIDAYS & PARKS PVT LTD GOT AMALGAMATED WITH WONDERLA HOLIDAYS PVT LTD W.E.F 1.4.2008 VIDE KERALA HIGH COURTS ORDER DATED 25.9.2009. SECTION 170(2) OF THE INCOME TAX ACT MAKES IT CLEAR THAT THE ASSESSMENT MUST BE MADE ON THE SUCCESSOR AMALGAMATED COMPANY. ITA NO . 22/C/2014 3 6 WITH REGARD TO THE ADDITIONAL GROUND, THE ASSESSEE RAISED THE FOLLOWING SUBMISSIONS: THE ERSTWHILE VEEGA HOLIDAYS & PARKS PVT L TD GOT AMALGAMATED WITH WONDERLA HOLIDAYS PVT LTD WITH EFFECT FROM 1.4.2008 VIDE KERALA HIGH COURTS ORDER DATED 25.9.2009. IT IS SUBMITTED THAT THE NOTICE UNDER SECTION 148 WAS ISSUED ON 11.3.2010, THE NOTICE U/S 143(3) WAS ISSUED ON 10.8.2010 AND THE ASS ESSMENT ORDER U/S 143(3) R.W.S 147 WAS DATED 23.12.2010. IT IS SUBMITTED THAT THE NOTICE WAS ISSUED AFTER THE DATE OF AMALGAMATION AND THEREFORE, THE ASSESSMENT IN THE NAME OF A COMPANY WHICH HAS BEEN AMALGAMATED WITH ANOTHER COMPANY AND STANDS DISSOLVED IS NULL AND VOID. IT IS ALSO SUBMITTED THAT WHEN THE ASSESSMENT IS FRAMED IN THE NAME OF A NON EXISTING ENTITY, IT DOES NOT REMAIN A PROCEDURAL IRREGULARITY OF THE NATURE WHICH COULD BE CURED BY INVOKING THE PROVISIONS OF SECTION 292B OF THE ACT. PROVISION S OF SECTION 292B ARE NOT APPLICABLE TO AY 06 - 07. 6 .1 IN SUPPORT OF THE ADDITIONAL GROUND, THE ASSESSEE HAD RELIED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: I) SPICE INFOTAINMENT LTD VS CIT - 247 CTR 500 (DEL) II) CIT VS DIMENSION APPARELS P LTD 370 ITR 288 III) CIT VS M/S MICRON STEELS P LTD - 372 ITR 386 IV) EICHER INTERNATIONAL LTD VS DCIT - ITA NO.1824/DEL/2011 6.2 THE LD DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE INCOME TAX AUTHORITIES AND SUBMITTED THAT THE ADDITIONAL GROUND WAS NEVER SU BJECT MATTER OF ADJUDICATION BEFORE THE AO NOR BEFORE THE CIT(A). THEREFORE, IT WAS STATED THAT, IF AT ALL THE ADDITIONAL GROUND IS ADMITTED, THE SAME MAY BE RESTORED TO CIT(A) . 7 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD . RULE 11 OF THE ITAT RULES PERMITS THE ASSESSEE TO RAISE ADDITIONAL GROUND BEFORE THE TRIBUNAL. IN THE INSTANT CASE, T HE ADDITIONAL GROUND RAISED BY THE ITA NO . 22/C/2014 4 ASSESSEE INVOLVES PURELY A QUESTION OF LAW, WHICH GOES TO THE ROOT OF THE MATTER AND DOES NOT INVOLVE ANY VERIFICATION OF NEW FACTS. IT IS WELL SETTLED POSITION OF LAW THAT A PURE QUESTION OF LAW CAN BE RAISED AT ALL STAGES OF APPEAL, IF THE SAME DOES NOT REQUIRE EXAMINATION OF THE FRESH FACTS . SINCE THE LEGAL ISSUE RAISED IN THE ADDITIONAL GROUND WAS N EVER SUBJECT MATTER OF EXAMINATION BEFORE THE CIT(A), IN THE INTEREST OF JUSTICE AND EQUITY, WE ARE OF THE VIEW THAT THE MATTER NEEDS CONSIDERATION BY THE CIT(A). ACCORDINGLY, THE ADDITIONAL GROUND RAISED IS ADMITTED AND THE SAME IS RESTORED TO THE FILE OF THE CIT(A). THE CIT(A) SHALL TAKE AN APPROPRIATE DECISION IN ACCORDANCE WITH LAW AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. IT IS ORDERED ACCORDINGLY. 8 IN THE RESULT, THE APPEAL FILED BY THE ASSESSED IS ALLOWED FOR STATISTIC AL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 1 ST DAY OF SEPT 2016 . SD/ - SD/ - ( B P JAIN ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COC HIN: DATED 1 ST S EPT 2016 RAJ* ITA NO . 22/C/2014 5 COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) , TRIVANDRUM 4 . CIT, 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN