Shri Manibhai Ranchhodbhai Patel, Anand V. The Income Tax Officer, Ward-3(3), Anand

ITA 232/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9330 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-02-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 28-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N C AMIN
• Keywords: Audit objection; Tax effect
• Section: 27; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ./ ITA.NO.2474/AHD/2014 / ASSTT. YEAR: 2005-2006 AND ./ ITA.NO.232 AND 233/AHD/2015 / ASSTT. YEAR: 2005-2006 MANIBHAI RANCHHODBHAI PATEL PROP: PATEL TOBACCO COLLEGE ROAD PETLAD DIST: ANAND 388 450 PAN : ACZPP 4552 D VS ITO, WARD-3(3) ANAND. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI N.C. AMIN, AR REVENUE BY : SHRI PRAJNA PARAMITA, SR.DR / DATE OF HEARING : 15/02/2016 / DATE OF PRONOUNCEMENT: 16/02/2016 $%/ O R D E R THESE APPEALS OF THE ASSESSEE AROSE FROM DIFFERENT ORDERS OF THE LD.CIT(A)-I, BARODA PASSED FOR THE ASSTT.YEARS 2005 -2006 DATED 3.7.2014, 14.11.2014 AND 14.11.2014 RESPECTIVELY. 2. I FIRST TAKE UP THE APPEAL OF THE ASSESSEE IN IT A NO.2474/AHD/2014 WHICH IS A QUANTUM APPEAL, AND THE LD.COUNSEL FOR T HE ASSESSEE HAD RAISED A LEGAL ISSUE CHALLENGING REOPENING OF THE ASSESSMENT UNDER SECTION 147/148 OF THE INCOME TAX ACT. HE INVITED MY ATTENTION TO THE ORDER OF THE AO THAT THE ITA NO.2474/AHD/2014 AND ITA NO.232, 233/AHD/2015 2 TOTAL ADDITIONS MADE ARE RS.84,635/- AND ALSO TO TH E REASONS RECORDED IN THE PAPER BOOK. THE LD.COUNSEL FOR THE ASSESSEE ARGUED THAT UNDER SECTION 149(1)(A) OF THE ACT, NO NOTICE UNDER SECTION 148 C AN BE ISSUED IF FOUR YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMEN T YEAR, UNLESS INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOU NTS TO OR IS LIKELY TO AMOUNT TO ONE LAKH RUPEES OR MORE FOR THAT YEAR. I N THE PRESENT CASE, THE TAX EFFECT IS LESS THAN RS.1 LAKHS, AS IS EVIDENT FROM THE REASONS RECORDED AS WELL AS ADDITIONS MADE. AT PAGE NO.111 OF PAPER BOOK, HE INVITED OUR ATTENTION THAT THE CASE WAS REOPENED ONLY ON THE BASIS OF THE AUDIT OBJECTION WHICH IN FACT CANNOT BE REOPENED AND AS SUCH, THE ASSESSMENT /REASSESSMENT MADE IS LIABLE TO BE QUASHED IN VIEW OF THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF P.C. PATEL & CO. VS. DCIT, (20 16) 67 (I) ITCL 256 (GUJ). 3. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF THE LD.CIT(A). 4. I HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE F ACTS OF THE CASE. THE UNDISPUTED FACT OF THE PRESENT CASE IS THAT THE TAX EFFECT IS LESS THAN RS.1 LAKH, AS EVIDENT FROM THE REASONS RECORDED AND ADDITIONS MADE. AS PER SECTION 149(1)(1) OF THE ACT, NO NOTICE UNDER SECTION 148 C AN BE ISSUED IF THE INCOME CHARGEABLE TO TAX HAS ESCAPED THE ASSESSMENT AMOUNT S TO OR IS LIKELY TO AMOUNT TO ONE LAKH RUPEES OR MORE, WHICH IN THE PRE SENT CASE IS ONLY RS.84,635/-. MOREOVER, THE REOPENING HAS BEEN DONE ON THE BASIS OF THE AUDIT OBJECTION BY THE AUDIT PARTY AND THE AO HAS NOT MAD E ANY INDEPENDENT APPLICATION OF MIND, AND IN VIEW OF THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF P.C.PATEL & CO. (SUPRA) IT HAS BEEN HELD THAT WHERE THE ASSESSMENT WAS REOPENED ONLY AT THE INSTANCE OF THE AUDIT PARTY AND/OR ON THE AUDIT OBJECTION, THEN NOTICE UNDER SECTION 148 WAS NOT VALID, AND THE SAME IS LIABLE TO BE QUASHED. ACCORDINGLY, IN THE PRESENT CIRCUMSTANCES, AND MY ITA NO.2474/AHD/2014 AND ITA NO.232, 233/AHD/2015 3 FINDING HEREINABOVE, THE AO IS NOT JUSTIFIED IN REO PENING OF THE ASSESSMENT, AND THE ASSESSMENT/REASSESSMENT SO MADE IS DIRECTED TO BE QUASHED. THIS GROUND OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, THE APPEAL BEING ITA NO.2474/AHD/ 2014 IS ALLOWED. 6. NOW WE TAKE UP THE APPEALS OF THE ASSESSEE IN IT A NO.232/AHD/2015 AND 233/AHD/2015, WHEREBY PENALTY UNDER SECTION 27 1D AND 271E OF THE ACT FOR THE ASSTT.YEAR 2005-06 HAS BEEN IMPOSED WHICH H AS BEEN CONFIRMED BY THE LD.CIT(A). 7. THE LD.COUNSEL FOR THE ASSESSEE INVITED OUR ATTE NTION TO THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. JA I LAXMI RICE MILLS, 379 ITR 521 (SC) WHERE IT HAS BEEN HELD THAT ORIGINAL A SSESSMENT ORDER CONTAINING SATISFACTION SET ASIDE IN APPEAL, THEN PENALTY PROC EEDINGS DO NOT SURVIVE. ACCORDINGLY, BOTH THE APPEALS BEING ITA NOS.232 AND 233/AHD/2015 CANNOT SURVIVE, AND THEREFORE, SET ASIDE, SINCE ORIGINAL A SSESSMENT PROCEEDINGS HAVE BEEN QUASHED HEREINABOVE. ACCORDINGLY, ITA NO.232 AND 233/AHD/2015 OF THE ASSESSEE ARE ALLOWED. 8. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 16 TH FEBRUARY, 2016 AT AHMEDABAD. SD/- ( B.P. JAIN ) ACCOUNTANT MEMBER AHMEDABAD; DATED 16/02/2016