M/s SVR Neuro & Traumo Super Speciality Hospitals Pvt., Ldt., Vijayawada V. THE DCIT, Vijayawada

ITA 249/VIZ/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6494 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 08-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: R PRASAD
• Keywords: Assessment record; Revised return
• Section: 143(3); 133A; 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER . / I . T .A.NO. 2 49 / VIZ / 201 5 ( / ASSESSMENT YEAR: 20 10 - 11 ) M/S SVR NEURO& TRAUMA SUPERSPECIALITY HOSPITALS PVT. LTD. D.NO.40 - 1/1 - 14ABC SIVANANDA STREET M.G.ROAD, LOBBIPET VIJAYAWADA 520 010 [ PAN : AAHCS6884N] VS. DY.COMMISSIONER OF INCOME TAX, CIRCLE - 2(1) VIJAYAWADA ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI M.S.R.PRASAD , A R / RESPONDENT BY : S HRI M.N.MURTHYNAIK, DR / DATE OF HEARING : 21 . 11 .2017 / DATE OF PRONOUNCEMENT : 29 . 11 .2017 / O R D E R PER D.S. SUNDER SINGH , ACCOUNTANT MEMBER : 1 . THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS), VI JAYAWADA VIDE ITA 2 ITA NO . 2 4 9/VIZ/2015 M/S S.V.R.NEURO & TRUAMA SUPER SPECIALITY HOSPITALS (P) LTD. NO. 2 06 / CIT(A) / V JA /201 3 - 1 4 DATED 30 . 0 3 .201 5 FOR THE ASSESSMENT YEAR 20 10 - 11 . 2 . THE ASSESSEE FILED TOTAL SIX GROUNDS OF APPEAL ALONG WITH THE APPEAL MEMO BUT THE GROUNDS OF APPEAL ARE ARGUMENTATIVE AND LENGTHY, HENCE THE ASSESSEE FILED REVISED AND CONCISE GROUNDS OF APPEAL COVERING ALL THE ISSUES DURING THE APPEAL HEARING ON 21.11.2017. HENCE ON THE REQUEST OF THE LD.AR REVISED GROUNDS OF APPEAL ARE TAKEN UP FOR ADJUDICATION. 3. G ROUND NO.1 AND 5 OF REVISED APPEAL ARE GENERAL IN NATURE WHICH DOES NOT REQUIRE SPECIFIC ADJUDICATION. 4 . GROUND NO. 2 IS RELATED TO THE VALIDITY OF REASSESSM ENT MADE U/S 14 7 R.W.S.143(3) OF I.T.ACT , WITHOUT COMMUNICATING THE REASONS RECORDED FOR REOPENING THE ASSESSMENT. IN THIS CASE, THE ASSESSEE FILED THE RETURN OF INCOME ON 29.09.2010 ADMITTING TOTAL INCOME OF RS.11,30,830/ - . A SURVEY U/S 133A OF THE ACT WAS CONDUCTED IN THIS CASE ON 27.01.2011 AND THE REASSESSMENT WAS COMPL E TED ON TOTAL INCOME OF RS. 71,71,762/ - . SUBSEQUENT TO THE SURVEY , THE ASSESSEE HAS FILED THE REVISED RETURN OF 3 ITA NO . 2 4 9/VIZ/2015 M/S S.V.R.NEURO & TRUAMA SUPER SPECIALITY HOSPITALS (P) LTD. INCOME AND THE ASSESSING OFFICER(AO) HAD ISSUED THE NOTICE U/S 148 ON 22.04.2013. THE ASSESSEE , IN RESPONSE TO THE NOTICE VIDE LETTER DATED 28.04.2013 REQUESTED THE AO TO TREAT THE RETURN FILED ON 29.01.2011 AS RETURN IN RESPONSE TO NOTICE U/S 148 OF THE I.T.AC T AND ALSO REQUESTED TO FURNISH THE REASONS RECORDED FOR ISSUE O F NOTICE U/S 14 8. THE AO COMPLETED THE ASSESSMENT WITHOUT COMMUNICATING THE REASONS RECORDED. ON APPEAL TH E LD.CIT(A) DISMISSED THE AS SESSEES APPEAL ON VALIDITY OF THE ASSESSMENT FOR NON COMMUNICATION OF THE REASONS STATING THAT THE ASSESSEE HAD RESPONDED TO THE NOTICE . 5. DURING THE APPEAL HEARING LD.AR SUBMITTED THAT THE AO HAS COMPLETED THE ASSESSMENT WITHOUT COMMUNICATING THE REASONS RECOR DED FOR ISSUE OF NOTICE U/S 148, IN SPITE OF THE SPECIFIC REQUEST MADE BY THE ASSESSE E FOR FURNISHING THE REASONS. THE LD.AR FURTHER SUBMITTED THAT AS PER THE JUDGEMENT OF HONBLE SUPREME COURT IN THE CASE OF M/S GKN DRIVE SHAFTS (INDIA) LTD. VS. ITO [259 ITR 19], IT IS OBLIGAT ORY ON THE PART OF AO TO COMMUNICATE THE REASONS ON FURNISHING TH E RETURN OF INCOME. THE ASSESSEE IN RESPONSE TO THE NOTICE ISSUED U/S 148 SUBMITTED A LETTER TO THE AO TO TREAT THE RETURN FILED ON 29.01.2011 AS RETURN IN RESPONSE TO THE NOTICE ISSUED U/S 148. THUS THE ASSESSEE HAS COMPLIED WITH THE MANDATE OF 4 ITA NO . 2 4 9/VIZ/2015 M/S S.V.R.NEURO & TRUAMA SUPER SPECIALITY HOSPITALS (P) LTD. HON BLE SUPREME COURT CITED SUPRA BUT THE AO FAILED TO FURNISH THE REASONS, HENCE THE ASSESSMENT MADE U/S 143 ( 3 ) R.W.S 147 IS INVALID AND REQUIRED TO BE QUASHED . THE ASSESSEE RELIED ON THE DECISION OF HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF BERGER PAINTS IND IA LTD. VS. ACIT [139 TAXMANN 200] (CAL), WHEREIN HONBLE HIGH COURT HELD THAT THE ASSUMPTION OF JURISDICTION OF ASSESSING OFFICER U/S 147 DEPENDS UPON EXISTENCE OF REASONS FOLLOWED BY COMMUNICATION THEREOF TO ASSESSEE AND IF NOTICE SERVED UNDER SECTION 148 IS CHALLENGED, AO CANNOT PROCEED WITH ASSESSMENT UNDER SECTION 147 UNLESS REASONS ARE COMMUNICATED. IN TH E INSTANT CASE, THE CONTENTION OF THE ASSESSEE IS THAT THE ASSESSEE HAS COMPLIED WITH THE NOTICE U/S 148 AND THE AO HAS NOT FURNISHE D THE REASONS R ECORDED FOR ISSUANCE OF NOTICE U/S 148 DESPITE THE REQUEST MADE BY THE ASSESSEE, HENCE, ARGUED THAT THE ASSESSMENT MADE U/S 148 IS INVALID AND REQUIRED TO BE QUASHED. 6 . ON THE OTHER HAND, THE LD.DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND ALSO SUBMITTED THAT THE LD.CIT(A) HAS CONSIDERED THE ISSUE AND UPHELD THE REASSESSMENT MADE U/S 148. THEREFORE, LD.DR SUBMITTED THAT THE ASSESSEE HAD RESPONDED TO THE NOTICE ISSUED U/S 148 AND PARTICIPATED IN THE ASSESSMENT PROCEEDINGS, H ENCE, NOTICE ISSUED U/ S 148 AND THE CONSEQUENT ASSESSMENT ORDER REQUIRED TO BE UPHELD. 5 ITA NO . 2 4 9/VIZ/2015 M/S S.V.R.NEURO & TRUAMA SUPER SPECIALITY HOSPITALS (P) LTD. 7 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THIS CASE, THE ASSESSMENT IS REOPENED U/S 148 BY ISSUE OF NOTICE TO THE ASSESSEE. IN RESPONSE TO THE NOTICE I SSUED U/S 148, THE ASSESSEE FILED THE REPLY AND REQUESTED FOR COMMUNICATION OF THE REASONS RECORDED FOR REOPENING THE ASSESSMENT. THE AO DID NOT COMMUNICATE THE REASONS AND COMPLETED THE ASSESSMENT . HONBLE SUPREME COURT IN THE CASE OF M/S GKN DRIVE SHAF TS(INDIA) LIMITED VS. ACIT FRAM ED THE GUI DELINES ON WHAT SHOULD BE DONE WHEN THE NOTICE IS ISSUED. AS PER THE GUIDELINES FRAM ED BY THE HONBLE SUPREME COURT, PROPER COURSE OF ACTION FOR THE NOTICE IS TO FILE RETURN OF INCOME AND SEEK REASONS FOR ISSUING THE NOTICES. THE AO IS BOUND TO FURNISH THE REASONS WITHIN THE REASONABLE TIME. ON RECEIPT OF REASONS, THE ASSESSEE IS ENTITLED TO FILE OBJECTIONS TO THE ISSUANCE OF NOTICE AN D THE AO IS BOUND TO DISPOSE OF THE OBJECT IONS BY PASSING SPEAKING ORDE R. HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF BERGER PAINTS INDIA LTD. VS. ACIT CITED SUPRA HELD THAT THE AO CANNOT PROCEED WITH THE ASSESSMENT U/S 147 UNLESS THE REASONS ARE COMMUNICATED. WE HAVE CALLED FOR THE RECORDS AND DIRECTED THE LD.DR TO CLARI FY WHETHER THE REASONS WERE COMMUNICATED TO THE ASSESSEE OR NOT AND THE LD.DR FAIRLY CON CEDED THAT THE REASONS WERE NOT COMMUNICATED. WE HAVE ALSO VERIFIED THE ASSESSMENT RECORDS AND NOTICE D THAT THE ORDER SHEET OF THE ASSESSMENT DO NOT INDICATE 6 ITA NO . 2 4 9/VIZ/2015 M/S S.V.R.NEURO & TRUAMA SUPER SPECIALITY HOSPITALS (P) LTD. COMMUNICATION OF REASON TO THE ASSESS E E. IN THE CASE OF CIT VS. VIDESH SANCHAR NIGAM LTD. [340 ITR66], HONBLE BOMBAY HIGH COURT IN 21 TAXMAN.COM 23 (BOM) HELD THAT NON FURNISHING OF THE REASONS WOULD MAKE THE ASSESSMENT INVALID. FOR READY REFERENCE WE EX TRACT THE RELEVANT PART OF THE ORDER OF THE HONBLE BOMBAY HIGH COURT SUPRA WHICH READS AS UNDER: 2. THE FINDING OF FACT RECORDED BY THE INCOME - TAX APPELLATE TRIBUNAL IS THAT IN THE PRESENT CASE THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT THOUGH REPEATEDLY ASKED BY THE ASSESSEE WERE FURNISHED ONLY AFTER COMPLETION OF THE ASSESSMENT. THE TRIBUNAL FOLLOWING THE JUDGMENT OF THIS COURT IN THE CASE OF CIT V. FOMENTO RESORTS & HOTELS LTD. , IT APPEAL NO. 71 OF 2006, DATED 27 - 11 - 2006, HAS HELD THAT THOUGH THE REOPENING OF THE ASSESSMENT IS WITHIN THREE YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, SINCE THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT WERE NOT FURNISHED TO THE ASSESSEE TILL THE COMPLETION OF ASSESSMENT, THE REASSESSMENT ORDER CAN NOT BE UPHELD. MOREOVER, SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THE DECISION OF THIS COURT IN THE CASE OF FOMENTO RESORTS & HOTELS LTD. ( SUPRA ) HAS BEEN DISMISSED BY THE APEX COURT, VIDE ORDER DATED JULY 16, 2007. FACTS OF THE INSTANT CASE ARE SIMILAR TO THAT OF M/S VIDESI SANCHAR NIGAM LTD. AND BERGER PAINTS LTD. CITED SUPRA. THEREFORE, R ESPECTFULLY FOLLOWING THE DECISIONS OF HONBLE BOMBAY HIGH COURT AND THE CALCUTTA HIGH COURT WE HOLD THAT THE AO CANNOT PROCEED TO MAKE THE REASSESSMENT W ITHOUT COMMUNICATING THE REASONS AND THE ASSESSMENT ORDER FRAMED U/S 147 WITHOUT COMMUNICATING THE REASONS REQUIRED TO BE QUASHED. ACCORDINGLY, THE ASSESSMENT ORDER MADE U/S 143(3) R.W.S. 147 IS HEREBY QUASHED. THE APPEAL OF THE ASSESSEE IS ALLOWED ON TH IS GROUND. 7 ITA NO . 2 4 9/VIZ/2015 M/S S.V.R.NEURO & TRUAMA SUPER SPECIALITY HOSPITALS (P) LTD. 8 . GROUND NO.3 AND 4 OF THE REVISED GROUNDS OF APPEAL ARE RELATED TO THE ADDITIONS MADE BY THE AO ON MERITS. SINCE WE HAVE QUASHED THE ASSESSMENT ORDER MADE U/S 147 R.W.S. 148, WE CONSIDER IT IS NOT NECESSARY TO ADJUDICATE THE GROUNDS ON MER ITS. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 9 . I N THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 29 TH NOV 2017 . SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 29 . 11 .2017 L. RAMA, SPS 8 ITA NO . 2 4 9/VIZ/2015 M/S S.V.R.NEURO & TRUAMA SUPER SPECIALITY HOSPITALS (P) LTD. / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT - M/S SVR NEURO& TRAUMA SUPERSPECIALITY HOSPITALS PVT. LTD., D.NO.40 - 1/1 - 14ABC, SIVANANDA STREET, M.G.ROAD, LOBBIPET, VIJAYAWADA 520 010 2 . / THE RESPONDENT DY.COMMISSIONER OF INCOME TAX, CIRCLE - 2(1) VIJAYAWADA 3. THE PR. COMMISSIONER OF INCOME TAX , VIJAYAWADA 4 . THE COMMISSIONER OF INCOME TAX (APPEALS) , VIJAYAWADA 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM