New Gujarat Tin Circle Depot Pvt.Ltd., Baroda V. The ACIT.,Circle-4, Baroda

ITA 2311/AHD/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 9585 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-10-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 09-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K DHANESTA
• Assessee Lawyers: S N DIVATIA
• Keywords: Reopening of assessment; Principle of natural justice; Set aside
• Section: 143(3); 250; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH A AA A BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI BHAVNESH BHAVNESH BHAVNESH BHAVNESH SAINI SAINI SAINI SAINI, , , , JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER AND AND AND AND SHRI SHRI SHRI SHRI N.S.SAINI N.S.SAINI N.S.SAINI N.S.SAINI, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER DATE OF HEARING : 1-10-10 DRAFTED ON: 1 -10-10 ITA NO. 2311 /AHD/ 2010 ASSESSMENT YEAR : 2004-05 NE W GUJARAT TIN CIRCLE DEPOT PVT. LTD., A-25, ROAD NO.25, SARDAR ESTATE, AJWA ROAD, BARODA. VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-4, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA. PAN/GIR NO. : AABCN 5933F (A PPELLANT ) .. ( RESPONDENT ) APPELL ANT BY : SHRI S. N.DIVATIA. RESPONDENT BY: SHRI R.K. DHANESTA, D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-II I, BARODA, DATED 10-3-2010. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS:- 1.1. THE ORDER PASSED UNDER SECTION 250 OF THE A CT ON 10 3-2010 FOR ASSESSMENT YEAR 2004-05 BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-III, BARODA UPHOLDING THE DISALLOWANCE OF `.1,05,575/-UNDER SECTION 35D(2) OF THE ACT, IS WHOLLY ILLEGAL, UNLAW FUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 2.1. THE NOTICE ISSUED UNDER SECTION 148 ON 13-3-2 009 AND THE RE-ASSESSMENT PROCEEDINGS INITIATED BY LEARNED ASSESSING OFFICER WERE IN ITSELF BAD IN LAW , ILLEGAL AND WITHOUT JURISDICTION. 2.2 THE LEARNED ASSESSING OFFICER OUGHT TO HAVE FURNISHED THE REASONS RECORDED FOR REOPENING THE ASSESSMENT UNDER SECTION 147 AND ALLOWED THE APPELLANT TO FILE OBJECTIONS AGAINST IT IN VIEW OF THE - 2 - DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GK N DRIVESHAFT LTD., (259 ITR-19). 3.1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS GRIEVOUSLY ERRED IN UPHOLDING THE DISALLOWANCE OF EXPENSES OF `.1,05,575/- CLAIMED UNDER SECTION 35D(2). 3.2. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CA SE AS WELL AS IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) OUGHT NOT TO HAVE UPHELD THE AFORESAI D DISALLOWANCE. 3. AT THE OUTSET THE LEARNED AUTHORISED REPRESENTAT IVE OF THE ASSESSEE ARGUING GROUND NO.2.2 OF THE APPEAL SUBMIT TED THAT THE ASSESSEE VIDE ITS LETTER DATED 4 TH APRIL, 2009 COPY OF WHICH IS PLACED AT PAGE NO.1 OF THE PAPER BOOK, REQUESTED THE LEARN ED ASSESSING OFFICER TO SUPPLY COPY OF THE REASONS RECORDED BEFO RE ISSUING NOTICE UNDER SECTION148 OF THE ACT FOR REOPENING OF THE AS SESSMENT FOR THE YEAR UNDER CONSIDERATION. THE LEARNED ASSESSING OFFICER HAS NOT SUPPLIED THE COPY OF REASONS RECORDED TO THE AS SESSEE. RELYING ON THE DECISION OF HON'BLE SUPREME COURT IN THE CAS E OF GKN DRIVESHAFT LTD., 259 ITR 19 HE SUBMITTED THAT THE H ON'BLE SUPREME COURT HAS HELD THAT WHERE AN ASSESSEE ASKS FOR REAS ONS RECORDED BEFORE REOPENING OF ASSESSMENT THEN THE LEARNED ASS ESSING OFFICER IS BOUND TO SUPPLY THE SAME TO THE ASSESSEE AND IF THE ASSESSEE RAISES ANY OBJECTIONS THERETO THEN TO DECIDE THOSE OBJECTIONS BEFORE MAKING THE REASSESSMENT. AS THE LEARNED ASS ESSING OFFICER DID NOT COMPLY WITH THE ABOVE DIRECTION OF THE SUPR EME COURT THEREFORE, THE MATTER SHOULD BE RESTORED BACK TO TH E FILE OF THE LEARNED ASSESSING OFFICER FOR FRESH ADJUDICATION AS PER THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRI VESHAFT LTD. (SUPRA). 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. - 3 - 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ORIGINAL ASSESSMENT UNDER SECTION 143(3) WAS MADE BY THE LEA RNED ASSESSING OFFICER ON 28-11-2006. THEREAFTER, THE LE ARNED ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 ON 13-3-200 9 FOR REOPENING OF THE ASSESSMENT. THE CONTENTION OF THE ASSESSEE I S THAT IT ASKED FOR REASONS FOR REOPENING OF THE ASSESSEE VIDE LETT ER DATED 4 TH APRIL, 2009 WRITTEN TO THE LEARNED ASSESSING OFFICER BUT T HE REASONS FOR REOPENING OF ASSESSMENT WERE NOT SUPPLIED TO IT. T HEREFORE, THE REASSESSMENT FRAMED WAS NOT IN ACCORDANCE WITH THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVES HAFT LTD., (SUPRA) AND THEREFORE, THE ORDERS OF THE LOWER AUTH ORITIES BE SET ASIDE AND THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER FOR SUPPLYING REASONS FOR REOPENING OF THE ASSESSMENT AND TO READJUDICATE THE MATTER AFTER MEETING WITH THE OBJECTIONS OF THE ASSESSEE TO THE REOPENING OF THE ASSESSMENT. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT C ONTROVERT THE ABOVE SUBMISSIONS MADE BY THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE THAT REASONS FOR REO PENING OF THE ASSESSMENT WERE NOT SUPPLIED TO THE ASSESSEE. WE F IND THAT THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFT LTD.(SUPRA) HAS HELD AS UNDER :- 5. WE SEE NO JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER UNDER CHALLENGE. HOWEVER, WE CLARIFY THAT WHEN A NOTICE U NDER S. 148 OF THE IT ACT IS ISSUED, THE PROPER COURSE OF ACTION F OR THE NOTICEE IS TO FILE RETURN AND IF HE SO DESIRES, TO SEEK REASONS F OR ISSUING NOTICES. THE AO IS BOUND TO FURNISH REASONS WITHIN A REASONA BLE TIME. ON RECEIPT OF REASONS, THE NOTICEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE AO IS BOUND TO DISPOSE O F THE SAME BY PASSING A SPEAKING ORDER. IN THE INSTANT CASE, AS T HE REASONS HAVE BEEN DISCLOSED IN THESE PROCEEDINGS, THE AO HAS TO DISPOSE OF THE OBJECTIONS, IF FILED, BY PASSING A SPEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESSMENT IN RESPECT OF THE ABOVE SAID FI VE ASSESSMENT YEARS. IN THE INSTANT CASE, IT IS THE UNDISPUTED FACT THAT NO REASONS FOR REOPENING OF THE ASSESSMENT BEFORE ISSUANCE OF NOTI CE UNDER SECTION 148 OF THE ACT ON 13-3-2009 WERE SUPPLIED T O THE ASSESSEE - 4 - EVEN AFTER REQUEST FOR THE SAME WAS MADE TO THE LEA RNED ASSESSING OFFICER VIDE LETTER DATED 4-4-2009 PLACED AT PAGE-1 OF THE PAPER BOOK. THUS, THE LEARNED ASSESSING OFFICE R VIOLATED THE DECISION OF THE HON'BLE SUPREME COURT. WE THEREFORE , SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMAND THE MATT ER BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER TO REFRAME TH E REASSESSMENT AFTER SUPPLYING COPY OF REASONS RECORDED BEFORE ISS UANCE OF NOTICE UNDER SECTION 148 OF THE ACT ON 13-3-2009 AND PASSI NG A SPEAKING ORDER ON THE OBJECTIONS RAISED BY THE ASSESSEE ON T HE REASONS FOR REOPENING OF THE ASSESSMENT. THUS, THIS GROUND OF APPEAL, OF THE ASSESSEE IS ALLOWED. 6. IN VIEW OF OUR DECISION ON GROUND NO.2.2 OF THE APPEAL OF THE ASSESSEE THE OTHER GROUNDS OF APPEAL RAISED IN THIS APPEAL HAVE BECOME INFRUCTUOUS AND ARE NOT BEING ADJUDICATED UP ON BY US. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON THIS 7 TH DAY OF OCTOBER, 2010. SD/- SD/- (BHAVNESH SAINI) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNT ANT MEMBER AHMEDABAD: ON THIS 7 TH DAY OF OCTOBER, 2010 COMPILED AND COMPARED BY: PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD - 5 - DATE INITIALS 1. DRAFT DICTATED ON 1-10-2010 --------- ------ 2. DRAFT PLACED BEFORE AUTHORITY 5-10-2010 --------------- 3. DRAFT PROPOSED & PLACED 5-10-2010 ---- ----------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 5-10-2010 ---- ---------- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 7-10-2010 -------------- 6. KEPT FOR PRONOUNCEMENT ON 7-10-2010 -------------- 7. FILE SENT TO THE BENCH CLERK 7-10-2010 -------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------- 9. DATE OF DISPATCH OF ORDER ---------------- --------------