ACIT, Meerut V. M/s. Mukut Mahal Banquet (P) Ltd., Meerut

ITA 226/DEL/2012

• Counselvise Citation: 22620114 RSA 2012
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 29-10-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 13-01-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AROOP KUMAR SINGHDR
• Keywords: Principle of natural justice; Period of limitation; Accommodation entries; Reassessment proceedings
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI E BENC H BEFORE SHRI RAJPAL YADAV , JM & SHRI A.N. PAHUJA, AM ITA NO.226/DEL/2012 ASSESSMENT YEAR: 2002-03 A.C.I.T.,CIRCLE-1,AAYAKAR BHAWAN, BHANSALI GROUND, DELHI ROAD,MEERUT V/S . MUKUT MAHAL BANQUET (P) LTD., DELHI ROAD, NEAR HAPUR RAILWAY CROSSING, MEERUT [PAN : AAECM 0776 A] (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI SANDEEP SAPRA, AR REVENUE BY SHRI AROOP KUMAR SINGH,DR DATE OF HEARING 29-10-2012 DATE OF PRONOUNCEMENT 23-11-2012 O R D E R A.N.PAHUJA:- THIS APPEAL FILED ON 13.01.2012 BY THE REVENUE AGA INST AN ORDER DATED 19.10.2011 OF THE LEARNED CIT(A)- MEERUT, RAI SES THE FOLLOWING GROUNDS:- 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN L AW AND FACTS IN ANNULLING THE ORDER PASSED BY THE A.O. U/S 147/143(3) OF THE IT ACT 1961 IN SPITE OF THE FACT THAT OBJECTIONS WERE RAISED BY THE ASSESSEE ONLY AT LATE R STAGE THROUGH ITS COUNSEL WERE DISPOSED OF THROUGH SPEAKI NG ASSESSMENT ORDER. THEREFORE, CASE LAW OF GKN DRIVE SHAFT (INDIA) LTD. VS ITO AND OTHERS (2003) 259 ITR 19 (S C) DOES NOT APPLY IN THIS CASE . MOREOVER, NON-REMOVAL OF O BJECTION WAS A MERE IRREGULARITY WHICH CAN NOT TANTAMOUNT TO NULLITY. 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN L AW AND FACTS IN APPRECIATING ASSESSEE'S PLEA THAT ORDER DE SERVES TO BE CANCELLED AS REASONS WERE SERVED AFTER SIX YEARS WHEREAS LAW REQUIRES ISSUE OF NOTICE U/S 148 WITHIN SIX YEARS AND NOT THE SERVICE OF REASONS WHICH IS A DIFFERENT MATTER ITA NO.226/DEL./2012 2 ALTOGETHER NOT INVOLVING ANY STATUTORY LIMITATION L INE WHATSOEVER. 3. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN L AW AND FACTS IN DELETING THE ADDITION OF ` .6,00,000/- MADE BY THE AO ON ACCOUNT OF NON CONFIRMATION OF CREDIT ENTRY DESP ITE THE FACT THAT THE ASSESSEE HAS FAILED TO PROVE THAT THE ACCOMMODATION ENTRIES IN RESPECT OF ADVANCE RECEIVA BLE FROM ALL THE ANGLES AND EVEN THE IDENTITY OF THE EN TRY PROVIDER REMAINED UNPROVED AND UNEXPLAINED. 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIFIED IN FACT AND CIRCUMSTANCES OF THE CASE IN DELETING THE BALAN CE CREDIT ENTRY OF ` .4,00,650/- IN SPITE OF THE FACT THAT ASSESSEE FAIL ED TO REBUT THE REVENUE'S CLAIM OF HAVING RECEIVED THE SAME AMOUNT. EVEN THE BANK STATEMENT AS ASKED BY THE A.O WAS NOT FURNISHED BY THE ASSESSEE AND THUS, THE BURDEN OF PROVING THE CREDIT LYING UPON THE ASSESSEE REMAINED TOTALLY UN-DISCHARGED AND UNPROVED. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING O FFICER RESTORED. 2. FACTS IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING LOSS OF ` 6,52,160/- FILED ON 31 ST OCTOBER, 2002 BY THE ASSESSEE, WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT). SUBSEQUENTLY, ON AN INFORMATION RECEIVED FROM DIT( INV.),NEW DELHI & DIT(INV.),KANPUR THAT THE ASSESSEE OBTAINED ACCOMMO DATION ENTRIES, THE ASSESSING OFFICER[AO IN SHORT] RECORDED THE FOLLOWI NG REASONS IN WRITING IN TERMS OF PROVISIONS OF SECTION 148(2) OF THE ACT :- INFORMATION HAS BEEN RECEIVED FROM ITO WARD-5(4),N EW DELHI, VIDE HIS LETTER F.NO.ITO/WARD-5(4)/2008-09/ENTRY OPERATORS CASE/DAT ED 27.3.2009 THAT M/S MUKUT MAHAL BANQUET (P) LTD., DELHI ROAD, MEERUT, IS ONE OF THE BENEFICIARY OF ACCOMMODATION ENTRIES AFTER PAYING C ASH TO M/S KULDEEP TEXTILES P LTD. AND HAD TAKEN ACCOMMODATION ENTRY ON 22/03/02 AMOUNTING TO ` 4,00,650/- DURING FY 2001-02 PERTAINING TO AY 02-03.SIMILARLY FROM THE LIST OF BENEFICIARIES O F ACCOMMODATION ENTRIES AS RECEIVED FROM OFFICE OF DIRECTOR OF INCO ME-TAX(INV.)-1,NEW ITA NO.226/DEL./2012 3 DELHI, VIDE HIS OFFICE LETTER DO NO. DIT(INV.)-1/DE LHI/E/2007-08/1137 DATED 3/5-09-2007 ENDORSED BY THE DIRECTOR OF INCOM E- TAX(INV.)KANPUR VIDE HIS OFFICE LETTER F.NO. DIT(IN V.) KNP/ ACCOMMODATION ENTRIES/2007-08/DATED 17/9/2007,IT WA S NOTICED THAT M/S MUKUT MAHAL BANQUET (P) LTD. HAD ALSO TAKEN ACC OMMODATION ENTRIES AMOUNTING TO ` 3 LACS EACH ON 19/11/01 & 7/11/01 RESPECTIVELY. THUS,TOTAL OF ACCOMMODATION ENTRIES A S DETAILED ABOVE WORKS OUT AT ` 10,00,650/-.THEREFORE, I HAVE REASONS TO BELIEVE TH AT INCOME OF ` 10,00,650/- CHARGEABLE TO TAX HAS ESCAPED ASSESSMEN T IN THE CASE OF THE ASSESSEE FOR THE AY 02-03. 2.1 ACCORDINGLY, THE AO ISSUED A NOTICE U/S 148 OF THE ACT ON 27.3.2009 AND THEREAFTER, SUPPLIED A COPY OF REASONS TO THE ASSES SEE. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE AO CONFRONTED THE ASS ESSEE WITH THE FOLLOWING ACCOMMODATION ENTRIES: DATE AMOUNT[IN ` ] NAME OF ENTRY PROVIDER. 07.11.2001 - `3,00,000/- SHIV SHANKAR SHEH 19.11.2001 - `3,00,000/- PYARE LAL 22.03.2002 - `4,00,650/- KULDEEP TEXTILES (P) LTD . 2.2 IN REPLY, THE ASSESSEE SUBMITTED THAT THE CHEQ UES OF ` `3 LACS EACH ON 07.11.2001 AND 19 TH NOVEMBER, 2001, WERE RECEIVED FROM M/S YADAV AND COMPANY, A SHARE BROKER FROM WHOM SUM OF ` ` 10,16,490/- WAS RECEIVABLE ON 31.03.2001. THE ASSESSEE ALSO FURNISHED A COPY OF BANK STATEMENT IN SUPPORT OF ITS CONTENTION IN RESPECT OF AMOUNT RECEIVED ON 07. 11.2001 AND 19.11.2001. WITH REGARD TO ENTRY FROM KULDEEP TEXTILE (P) LTD., IT W AS SUBMITTED THAT NO SUCH AMOUNT OF ` `4,00,650/- WAS RECEIVED. HOWEVER, THE ASSESSEE DI D NOT SUBMIT BANK STATEMENT FOR THE MONTH OF MARCH, 2002. SINCE THE ASSESSEE FAILED TO SUBMIT CONFIRMATION FROM YADAV & COMPANY THAT THE E NTRIES RECEIVED FROM HIM WERE ON ACCOUNT OF AMOUNT DUE TO THE ASSESSEE, THE AO ADDED THE AMOUNT OF ` ` 6 LACS BESIDES AN AMOUNT OF ` ` 4,00,650/- ON ACCOUNT OF ENTRIES FROM KULDEEP TEXTILES (P) LTD. FOR WANT OF ANY EVIDENCE. 3. ON APPEAL, THE ASSESSEE QUESTIONED THE VALIDITY OF REOPENING OF THE ASSESSMENT . THE LD. CIT(A) AFTER CONSIDERING THE S UBMISSIONS OF THE ASSESSEE QUASHED THE REASSESSMENT IN THE FOLLOWING TERMS:- ITA NO.226/DEL./2012 4 6(IB). THE APPELLANT VIDE SUBMISSIONS DATED 5.11 .2009 FILED OBJECTIONS AGAINST INITIATION OF REASSESSMENT PROCE EDINGS INCLUDING THAT THE INFORMATION RECEIVED BY THE APPELLANT WAS INCORRECT TO THE EXTENT OF `4,00,650/- AND THE AMOUNT RECEIVED THROU GH ALLEGED BANK TRANSACTIONS HAD ALREADY BEEN OFFERED BY THE APPELL ANT AS IT INCOME FOR EARLIER ASSESSMENT YEAR DECLARING THE SAME AS I NCOME FROM SALE OF SHARES. THE SUBMISSION IS THAT THE AO DID NOT APPLY INDEPENDENT MIND BEFORE ENTERTAINING BELIEF REGARDI NG ESCAPEMENT OF INCOME IN THE HANDS OF THE APPELLANT AND SIMPLY ON THE BASIS OF INFORMATION FROM OTHER DEPARTMENTS ISSUED NOTICE U/ S 148 AND, THEREFORE, THE IMPUGNED PROCEEDINGS WERE WRONGLY IN ITIATED. IT IS ALSO SUBMITTED BY THE APPELLANT THAT THE REASONS RE CORDED U/S 148 WERE SUPPLIED TO THE APPELLANT ON 09.09.2009, WHICH TIME FALLS BEYOND THE PERIOD OF SIX YEARS FROM THE END OF THE ASSESSMENT YEAR UNDER REFERENCE AND IN VIEW OF THE, JUDICIAL PRONOU NCEMENTS OF HON'BLE DELHI HIGH COURT IN THE CASE OF HARYANA ACR YLIC MFG. CO. VS. CIT REPORTED AS 308 ITR 38, THE ASSESSMENT ORDER UN DER APPEAL DESERVES TO BE CANCELLED. AS PER THE APPELLANT REAS ONS HAVING BEEN SERVED ON 09.09.2009 WERE NOT SUPPLIED OR SERV ED WITHIN SIX - YEARS, AND THEREFORE IT HAS TO BE CONSTRUED THAT NO VALID NOTICE HAS BEEN SERVED WITHIN SIX YEARS. AS PER THE APPELLANT, THE OBJECTIONS HAVE NOT BEEN DISPOSED OF BEFORE COMPLETION OF THE ASSESSMENT U/S 147/143(3) AND THEREFORE THE ASSESSMENT HAS BEEN FR AMED IN CONTRAVENTION OF THE JUDGMENT OF THE HON'BLE S.C IN THE CASE OF GKN DRIVESHAFT (INDIA) LTD. VS. CIT REPORTED AS 259 ITR 19. THE APPELLANT HAS SUBMITTED THAT ONLY FOR THIS REASON T HE ASSESSMENT ORDER UNDER APPEAL DESERVES TO BE CANCELLED BEING U NLAWFUL AND AGAINST THE PROCEDURE OF NATURAL JUSTICE. IC. I HAVE CONSIDERED THE FINDINGS OF THE A.O. AND THE SUBMISSIONS OF THE A.R. AND AM OF THE CONSIDERED OP INION THAT THE AO. HAVING FAILED TO DISPOSE OF THE OBJECTIONS RAIS ED BY THE APPELLANT HAS COMMITTED A FATAL ERROR IN TERMS OF J UDICIAL PRONOUNCEMENT OF HON'BLE SUPREME COURT IN THE CASE OF GKN SHAFT (INDIA) LTD. (SUPRA) AND, THEREFORE, THE ORDER UNDE R APPEAL IS ANNULLED ON THIS GROUND ALONE. 3.1 AS REGARDS MERIT OF THE ADDITION, THE LD. CIT( A) CONCLUDED AS UNDER:- IIC. I HAVE CONSIDERED THE FINDINGS OF THE AO AS WELL AS THE SUBMISSIONS OF THE AR. I HAVE ALSO GONE THROUG H THE BALANCE SHEET AND THE DETAILS OF ALLOTMENT OF SHARES DURING THE YEAR. I DID NOT FIND ANY ENTRY OF THAT AMOUNT IN THE DETAILS OF CREDITORS, ITA NO.226/DEL./2012 5 UNSECURED DEPOSITORS AND/OR FORM NO.2 FOR ALLOTMENT OF SHARES IN THE NAME OF M/S KULDEEP TEXTILES (P) LTD. I HAVE A LSO CONSIDERED THE SUBMISSIONS OF THE APPELLANT THAT IN CASE IT WA S DOUBTED THAT THE APPELLANT INTENTIONALLY WAS NOT PROVIDING BANK STATEMENT, THE AO COULD HAVE OBTAINED THE BANK STATEMENT OF THE AP PELLANT FOR THE MONTH OF MARCH, 2002 DIRECTLY FROM THE BANK OF THE APPELLANT. I HAVE ALSO CONSIDERED THAT THERE IS NOTHING ON RECOR D IN THE FORM OF INSTRUMENT NOS. AND OTHER DETAILS IN SUPPORT OF REC EIPT OF ENTRIES/PAYMENTS FROM THE NAMED PERSONS IN ORDER TO SUPPORT THE RECEIPTS BY THE APPELLANT. THE SUBMISSIONS OF THE APPELLANT REGARDING RECEIPT OF TWO DIFFERENT DRAFTS OF `2,99 ,250/- (NET) (GROSS AMOUNT BEING `3,00,000/- EACH) AGAINST AMOUNT RECEI VABLE FROM SHARE BROKER M/S YADAV & CO., SEEM TO BE ACCEPTABLE . IN VIEW OF FACTS ON RECORDS, I DO NOT FIND ANY MERIT IN THE AD DITION OF `10,00,650/- AND, THEREFORE, THE SAME IS HEREBY DEL ETED. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. DR POINTED OUT THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN QUASHING THE REASSESSMENT PROCEEDINGS MERELY BECAUSE THE AO FAILED TO DISPOSE OF THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST INITIATION OF ACTION U/S 148 OF THE ACT. ON MERITS, THE LD. DR SU PPORTED THE FINDINGS OF THE AO. 5. ON THE OTHER HAND, THE LD. AR ON BEHALF OF THE ASSESSEE WHILE REFERRING TO PAGES 60 TO 76 OF THE PAPER BOOK CONTE NDED THAT THE AMOUNT RECEIVABLE FROM YADAV & COMPANY AS ON 31 ST MARCH, 2001 ALONE WAS RECEIVED ON 9 TH NOVEMBER, 2001 THROUGH DD NO.526850 AND ON 21 ST NOVEMBER,2001 THROUGH DD NO.555991 FOR AN AMOUNT IN ` ` 3 LACS EACH. SINCE THE TRANSACTIONS IN THE PRECEDING ASSESSMENT YEAR HAVE BEEN ACCEPTED, T HE AMOUNT COULD NOT BE ADDED IN REASSESSMENT U/S 147 OF THE ACT IN THE YEA R UNDER CONSIDERATION. 6. WE HAVE HEARD BOTH THE PARTIES AND HAVE GONE T HROUGH THE FACTS OF THE CASE. AS IS APPARENT FROM THE FACTS OF THE CASE , THE LD. CIT(A) QUASHED THE REASSESSMENT PROCEEDINGS MERELY BECAUSE THE AO FAIL ED TO DISPOSE OF THE OBJECTIONS RAISED BY THE ASSESSEE IN THEIR LETTER DATED 5.11.2009 .THERE IS NO MATERIAL BEFORE US, SUGGESTING THAT THE ASSESSEE RA ISED ANY OBJECTIONS AGAINST ISSUANCE OF NOTICE U/S 148 OF THE ACT IMMEDIATELY O N RECEIPT OF NOTICE DATED ITA NO.226/DEL./2012 6 27.3.2009 ISSUED BY THE AO OR ON RECEIPT OF A COPY OF THE REASONS ON 9.9.2009.IN TERMS OF DECISION OF HONBLE SUPREME COURT IN THE C ASE OF GKN SHAFT (INDIA) LTD. VS. CIT,259 ITR 19(SC), IF THE AO DID NOT DISPOSE O F THE OBJECTIONS RAISED BY THE ASSESSEE IN HIS LETTER DATED 5.11.2009, THE MATTER AT BEST COULD BE RESTORED TO THE FILE OF THE AO FOR DOING THE NEEDFUL. THE APPR OACH OF THE LD. CIT(A) IN QUASHING THE ASSESSMENT IS NOT IN ACCORDANCE WITH LAW. IN GKN DRIVESHAFTS(SUPRA), THE HON'BLE APEX LAID DOWN AN ELABORATE PROCEDURE AS TO THE MANNER OF DEALING WITH OBJECTIONS RAISED AGAINST A NOTICE U/S 148 OF THE ACT, IN THE FOLLOWING WORDS: 'HOWEVER, WE CLARIFY THAT WHEN A NOTICE UNDER SECTI ON 148 OF THE INCOME-TAX ACT IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTI CEE IS TO FILE A RETURN AND IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING NOTICES. THE A SSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIP T OF REASONS, THE NOTICEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE A ND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. IN THE INSTANT CASE, AS THE REASONS HAVE BEEN DISCLOSED IN THESE PROCEEDINGS, T HE ASSESSING OFFICER HAS TO DISPOSE OF THE OBJECTIONS, IF FILED, BY PASSING A S PEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESSMENT IN RESPECT OF THE ABOVESAID FIV E ASSESSMENT YEARS.' 6.1 IN A SUBSEQUENT DECISION IN THE CASE OF GARDEN FINANCE LTD. V. CIT (ASST.) [2004] 268 ITR 48 (GUJ), THE EFFECT OF THE SUPREME COURT DECISION IN THE CASE OF GKN DRIVESHAFTS [2003] 259 ITR 19 CAME UP FOR CONSIDERATION AND BY A MAJORITY OPINION IT WAS LAID DOWN BY THE HONBLE C OURT : 'WHAT THE SUPREME COURT HAS NOW DONE IN THE GKN DRI VESHAFTS (INDIA) LTD.'S CASE [2003] 259 ITR 19 IS NOT TO WHITTLE DOWN THE PRINCIPLE LAID DOWN BY THE CONSTITUTION BENCH OF THE APEX COURT IN CALCUTTA DI SCOUNT CO. LTD. CASE [1961] 41 ITR 191 BUT TO REQUIRE THE ASSESSEE FIRST TO LODGE PRELIMI NARY OBJECTION BEFORE THE ASSESSING OFFICER WHO IS BOUND TO DECIDE THE PRELIM INARY OBJECTIONS TO ISSUANCE OF THE REASSESSMENT NOTICE BY PASSING A SPEAKING OR DER AND, THEREFORE, IF SUCH ORDER ON THE PRELIMINARY OBJECTIONS IS STILL AGAINS T THE ASSESSEE, THE ASSESSEE WILL GET AN OPPORTUNITY TO CHALLENGE THE SAME BY FILING A WRIT PETITION SO THAT HE DOES NOT HAVE TO WAIT TILL COMPLETION OF THE REASSESSMEN T PROCEEDINGS WHICH WOULD HAVE ENTAILED THE LIABILITY TO PAY TAX AND INTEREST ON REASSESSMENT AND ALSO TO GO THROUGH THE GAMUT OF APPEAL, THE SECOND APPEAL BEFO RE INCOME-TAX APPELLATE TRIBUNAL AND THEN REFERENCE/TAX APPEAL TO THE HIGH COURT. VIEWED IN THIS LIGHT, IT APPEARS TO ME THAT THE RIG OUR OF AVAILING OF THE ALTERNATIVE REMEDY BEFORE THE ASSESSING OFFICER FOR OBJECTING T O THE REASSESSMENT NOTICE ITA NO.226/DEL./2012 7 UNDER SECTION 148 HAS BEEN CONSIDERABLY SOFTENED BY THE APEX COURT IN GKN DRIVESHAFTS (INDIA) LTD.'S CASE [2003] 259 ITR 19 IN THE YEAR 2003. IN MY VIEW, THEREFORE, THE GKN DRIVESHAFTS (INDIA) LTD. 'S CASE [2003] 259 ITR 19 DOES NOT RUN COUNTER TO THE CALCUTTA DISCOUNT CO. LTD. CASE [1961] 41 ITR 191 (SC) BUT IT MERELY PROVIDES FOR CHALLENGE TO THE REASSESSMENT N OTICE IN TWO STAGES, THAT IS, (I) RAISING PRELIMINARY OBJECTIONS BEFORE THE ASSES SING OFFICER AND IN CASE OF FAILURE BEFORE THE ASSESSING OFFICER; (II) CHALLENGING THE SPEAKING ORDER OF THE ASSESSIN G OFFICER UNDER SECTION 148 OF THE ACT.' 6.2 HONBLE GUJRAT HIGH COURT IN THE CASE OF ARV IND MILLS LTD. VS. ACWT [2004] 270 ITR 469 (GUJ) WHILE FOLLOWING THE A FORESAID DECISION CONCLUDED THAT ONCE THE SUPREME COURT STATED THAT THE AO WAS BOUND TO DISPOSE OF THE OBJECTIONS BY PASSING A SPE AKING ORDER, IT WAS NOT OPEN TO THE AUTHORITIES TO CONTEND THAT IN THE ABSENCE O F ANY PROVISION IN THE ACT, THE AUTHORITIES COULD NOT HAVE PASSED A SPEAKING ORDER. HONBLE DELHI HIGH COURT IN THE CASE OF DELHI TOURISM & TRANSPORT DEVELOPMENT C ORPORATION LTD. VS. ACIT [2004] 141 TAXMAN 361 (DELHI), WHILE RELYI NG UPON THE AFORESAID DECISION OF THE HONBLE APEX COURT IN GKN DRIVESHAR FTS (INDIA) LTD.(SUPRA) DIRECTED TO FOLLOW THE PROCEDURE LAID DOWN BY THE HONBLE APEX COURT AND PASS A SPEAKING ORDER BEFORE PASSING THE ASSESSMENT ORDER. 6.3 WHILE ADJUDICATING A SIMILAR ISSUE, HONBLE GU JRAT HIGH COURT IN THE CASE OF MGM EXPORTS VS. DCIT [2010] 23 DTR 356 (GUJ) OBSERVED AS UNDER:- APPLYING THE AFORESAID SETTLED LEGAL POSITION TO T HE FACTS OF THE CASE IT IS APPARENT THAT THE ACTION OF THE RESPONDENT AUTHORIT Y IN FRAMING THE REASSESSMENT ORDER, WITHOUT FIRST DISPOSING OF THE PRELIMINARY OBJECTIONS RAISED BY THE PETITIONER, CANNOT BE SUSTAINED. ACCO RDINGLY, THE REASSESS- MENT ORDER DATED DECEMBER 16, 2008 IS HEREBY QUASHE D AND SET ASIDE AND THE RESPONDENT AUTHORITY SHALL DISPOSE OF THE P RELIMINARY OBJECTIONS BY PASSING A SPEAKING ORDER AND ONLY THEREAFTER PROCEE D WITH THE REASSESS- MENT PROCEEDINGS IN ACCORDANCE WITH LAW. CONSIDERIN G THE FACT THAT THE NORMAL PERIOD OF LIMITATION, FOR FRAMING REASSESSME NT PURSUANT TO NOTICE DATED MARCH 3, 2008, ISSUED UNDER SECTION 148 OF TH E ACT, HAS ALREADY EXPIRED ON DECEMBER 31, 2008, IN THE PECULIAR FACTS AND CIRCUMSTANCES OF ITA NO.226/DEL./2012 8 THE CASE IT WOULD SERVE THE ENDS OF JUSTICE IF THE RESPONDENT AUTHORITY IS DIRECTED TO ABIDE BY THE FOLLOWING SCHEDULE : (I) THE RESPONDENT AUTHORITY SHALL DISPOSE OF THE P RELIMINARY OBJECTIONS RAISED BY THE PETITIONER WITHIN A PERIOD OF 4 (FOUR ) WEEKS FROM BY PASSING A SPEAKING ORDER IN ACCORDANCE WITH LAW; (II) THEREAFTER, THE RESPONDENT AUTHORITY SHALL UND ERTAKE REASSESSMENT PROCEEDINGS, IF NECESSARY, AND SHALL COMPLETE THE S AME WITHIN A PERIOD OF 4 (FOUR) WEEKS THEREAFTER, I.E., THE DATE OF DISPOS AL OF THE PRELIMINARY OBJEC- TIONS; (III) NO EXTENSION OF TIME SHALL BE SOUGHT FOR BY E ITHER SIDE IN THE FACT SITUATION OF THE PRESENT CASE; (IV) THE AFORESAID SCHEDULE SHALL NOT PRECLUDE THE RIGHTS OF THE PETITIONER TO CHALLENGE THE ORDER DISPOSING OF THE PRELIMINARY OBJECTIONS, IF LIE SAID ORDER IS REQUIRED TO BE SO CHALLENGED. 6.4 RECENTLY, HONBLE JURISDICTIONAL HIGH COUR T IN THEIR DECISION DATED 16.2.2012 IN SAK INDUSTRIES PVT. LTD. IN W.P.(C) 79 33/2010 RESTORED THE MATTER TO THE FILE OF THE AO, THE REASSESSMENT PROCEEDING S HAVING BEEN COMPLETED WITH UNDESIRABLE HASTE AND HURRY, IN VIOLATION OF PRINCI PLES OF NATURAL JUSTICE AND CONTRARY TO THE PROCEDURE MANDATED . 6.5 THE POSITION IN LAW IS THUS WELL SETTLED. IN THE INSTANT CASE, T HE REASONS WERE RECORDED BEFORE ISSUANCE OF NOTICE U/S 148 OF THE ACT ON 27.3.2009. THERE IS NO DISPUTE THAT THE NOTICE WAS SERVED ON THE ASS ESSEE. THERE IS ALSO NO DISPUTE THAT THE REASONS RECORDED BY THE AO WERE SU PPLIED TO THE ASSESSEE ON 9.9.2009. THESE REASONS, INDISPUTABLY, WERE THE SAM E AS WERE RECORDED BY THE AO. AFTER A NOTICE FOR REASSESSMENT HAS BEEN ISSUED , AN ASSESSEE IS REQUIRED TO FILE THE RETURN AND SEEK REASONS FOR ISSUANCE OF SU CH NOTICE. THE AO IS THEN BOUND TO SUPPLY THE REASONS WITHIN A REASONABLE TIM E. ON RECEIPT OF REASONS, THE ASSESSEE IS ENTITLED TO FILE PRELIMINARY OBJECTIONS TO ISSUANCE OF NOTICE AND THE AO IS UNDER A MANDATE TO DISPOSE OF SUCH PRELIMINAR Y OBJECTIONS BY PASSING A SPEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESSME NT IN RESPECT OF THE ASSESSMENT YEAR FOR WHICH SUCH NOTICE HAS BEEN ISSU ED. ITA NO.226/DEL./2012 9 7. IN VIEW OF ABOVE SETTLED LEGAL POSITION, WE C ONSIDER IT FAIR AND APPROPRIATE TO VACATE THE FINDINGS OF THE LD. CIT(A ) AS ALSO SET ASIDE THE REASSESSMENT ORDER AND REMIT THE MATTER TO TH E FILE OF THE AO WITH THE DIRECTIONS TO FOLLOW THE PROCEDURE LAID DOWN BY TH E HONBLE APEX COURT REITERATED BY THE HONBLE JURISDICTIONAL HIGH COURT . THE AO SHALL DISPOSE OF THE PRELIMINARY OBJECTIONS BY PASSING A SPEAKING ORDER AND ONLY THEREAFTER PROCEED WITH THE REASSESSMENT IN ACCORDANCE WITH LAW. WI TH THESE OBSERVATIONS, GROUND NOS.1& 2 IN THE APPEAL ARE DISPOSED OF. AS A COROLLARY, THE OTHER GROUND NOS. 3 & 4 RAISED IN THE APPEAL DO NOT SURVIVE FOR ADJUDICATION AT THIS STAGE AND ARE , THEREFORE, TREATED AS INFRUCTUOUS. 8. GROUND NO.5 IN THE APPEAL BEING GENERAL IN NATU RE, DOES NOT REQUIRE ANY SEPARATE ADJUDICATION AND IS , THEREFORE, DISMI SSED. 9. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE U S. 10. IN THE RESULT, APPEAL IS ALLOWED BUT FOR STATIS TICAL PURPOSES. SD/- SD/- (RAJPAL YADAV) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) COPY OF THE ORDER FORWARDED TO :- 1. ASSESSEE 2. A.C.I.T.,CIRCLE-1,AAYAKAR BHAWAN, BHANSALI GROUN D, DELHI ROAD,MEERUT 3. CIT CONCERNED. 4. CIT(A), MEERUT 5. DR, ITAT, E BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT