M/s Sreenilayam transports, Trivandrum V. ACIT, Trivandrum

ITA 252/COCH/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0791 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 03-08-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 06-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V CHELLAN PILLAI
• Assessee Lawyers: VIJAYAPRABHA
• Keywords: Set aside
• Section: 143(3); 80HHC; 80HH; 147; 148; 154; 139

Judgement Text

1 ITA NO.151 & 152/COCH/2009 ITA NO.230/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI SANJAY ARO RA (AM) I.T.A. NO. 251/COCH/2009 - ASSESSMENT YEAR 2001-02 I.T.A. NO. 252/COCH/2009 - ASSESSMENT YEAR 2002-03 I.T.A. NO. 230/COCH/2010 - ASSESSMENT YEAR 2004-05 SHRI B MOHANACHANDRAN NAIR VS THE A.C.I.T., CIR.1 PRASANTHI CASHEW CO KOLLAM MANGAD, KOLLAM PAN : ACIPP4093N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V. CHELLAN PILLAI ASSESSEE BY : MS. VIJAYAPRABHA DATE OF HEARING : 20-12-2011 DATE OF PRONOUNCEMENT : 25-01-2012 O R D E R PER N.R.S. GANESAN (JM) ALL THE THREE APPEALS OF THE ASSESSEE ARE DIRECTED AGAINST THE INDEPENDENT ORDERS OF COMMISSIONER OF INCOME-TAX(A) FOR THE ASSESSMENT YEARS, 2001-02, 2002-03 AND 2004-05. SINCE COMMON ISSUE ARISES FOR CONSIDERATI ON IN ALL THE APPEALS, WE HEARD THESE APPEALS TOGETHER AND DISPOSING OF THESE APPEALS BY THIS COMMON ORDER. 2. FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03 THE ASSESSEE HAS RAISED A GROUND REGARDING LIMITATION FOR REOPENING ASSESSMENTS U/S 147 OF THE ACT. THEREFORE, LET US TAKE APPEALS FOR ASSESSMENT YEARS 2001-02 AND 2002- 03 FIRST. 3. SHRI V CHELLAN PILLAI, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT FOR THE ASSESSMENT YEARS 2001-02 THE ASSESSEE FILED THE RET URN OF INCOME ON 28-12-2001. THE 2 ITA NO.151 & 152/COCH/2009 ITA NO.230/COCH/2010 ASSESSMENT WAS COMPLETED U/S 143(3) BY ORDER DATED 22-01-2004. LIKEWISE, FOR THE ASSESSMENT YEAR 2002-03 THE RETURN WAS FILED ON 29- 01-2003 AND THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 20-08-2004. ACCORDING TO T HE LD.REPRESENTATIVE, THE FOUR YEARS PERIOD AS PROVIDED IN PROVISO TO SECTION 147 HAS EX PIRED ON 31-03-2006 FOR THE ASSESSMENT YEAR 2001-02 AND ON 31-03-2007 FOR THE A SSESSMENT YEAR 2002-03. THEREFORE, ACCORDING TO THE LD.REPRESENTATIVE AFTER 31-03-2006, FOR THE ASSESSMENT YEAR 2001-02 THE ASSESSMENT CANNOT BE REOPENED UNLESS TH ERE WAS NEGLIGENCE ON THE PART OF THE ASSESSEE IN DISCLOSING ALL THE MATERIAL FACTS N ECESSARY FOR COMPLETING THE ASSESSMENT. LIKEWISE, FOR THE ASSESSMENT YEAR 2002-03, ASSESSME NT PROCEEDINGS CANNOT BE REOPENED AFTER 31-03-2007. ACCORDING TO THE LD.REPRESENTATI VE, THE ASSESSING OFFICER, HOWEVER, REOPENED THE ASSESSMENT ON THE GROUND THAT THE RE-A SSESSMENT PROCEEDINGS WERE PROPOSED TO BE MADE ON THE BASIS OF THE RETROSPECTI VE AMENDMENT OF LAW AND SUBSEQUENT INTERPRETATION OF PROVISIONS OF SECTION 80HHC BY THE SUPREME COURT. THE QUESTION ARISES FOR CONSIDERATION IS WHETHER THE RE TROSPECTIVE AMENDMENT OF LAW AFTER FILING THE RETURN OF INCOME AND SUBSEQUENT JUDGMENT OF THE APEX COURT AFTER EXPIRY OF FOUR YEARS PERIOD CAN BE A BASIS FOR REOPENING THE ASSESSMENT U/S 147 OF THE ACT? 4. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 147 OF THE ACT. PROVISO TO SECTION 147 CLEARLY SAYS THAT WHEN AN ASSESSMENT WAS COMPLETED U/S 143(3) OR U/S 147, NO ACTION SHALL BE TAKEN AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN U/S 139 OR IN RESPONSE TO NOTICE U/S 148 OR DISCLOSE FU LLY OR TRULY ALL THE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. IN THIS CASE, IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME U/S 139 (1) OR U/S 148 OF THE ACT. THE ONLY CASE OF THE ASSESSING OFFICER IS THAT DUE TO RETROS PECTIVE AMENDMENT TO SECTION 80HHC AND THE JUDGMENT OF SUPREME COURT SUBSEQUENTLY, THE INCOME HAS TO BE REASSESSED. THE COMMISSIONER OF INCOME-TAX(A) FOUND THAT THE RE ASSESSMENT PROCEEDINGS CANNOT BE HELD AS INVALID IF THE MATERIAL FACTS PERTAINING TO ASSESSMENT OF INCOME RETURNED OR 3 ITA NO.151 & 152/COCH/2009 ITA NO.230/COCH/2010 ASSESSED ARE NOT IN ACCORDANCE WITH PROVISIONS OF A MENDMENT RETROSPECTIVELY. THE ASSESSEE IS EXPECTED TO FILE THE RETURN OF INCOME A ND THE MATERIAL NECESSARY FOR COMPLETING THE ASSESSMENT AS PER LAW IN EXISTENCE A S ON THE 01 ST DAY OF APRIL OF THE RESPECTIVE ASSESSMENT YEAR. ONCE THE ASSESSEE FILE S THE RETURNS OF INCOME AS PER LAW IN EXISTENCE AS ON 01 ST DAY OF APRIL OF THE RESPECTIVE ASSESSMENT YEAR, WE MAY NOT BE ABLE TO SAY THAT THE ASSESSEE WAS NEGLIGENT IN FILING TH E MATERIAL FACT AS REQUIRED BY THE SUBSEQUENT AMENDMENT RETROSPECTIVELY. IN OTHER WOR DS, NO ONE CAN EXPECT THE ASSESSEE TO ANTICIPATE AN AMENDMENT IN LAW IN FUTUR E AND FILE THE REQUIRED MATERIAL IN ADVANCE. SUCH AN EXPECTATION, IN OUR OPINION, IS C ONTRARY TO THE NORMAL HUMAN BEHAVIOR. WE CANNOT BLAME THE ASSESSEE FOR NOT ANT ICIPATING THE AMENDMENT BROUGHT IN THE STATUTE RETROSPECTIVELY IN SECTION 80HHC WHI LE FILING THE RETURNS OF INCOME. THEREFORE, IN OUR OPINION, THERE WAS NO NEGLIGENCE ON THE PART OF THE ASSESSEE IN FURNISHING THE RETURN OF INCOME. THE SUBSEQUENT AM ENDMENT OF LAW IN SECTION 80HHC AND THE INTERPRETATION MADE BY THE APEX COURT CANNO T BE A REASON FOR THE ASSESSING OFFICER TO REOPEN THE COMPLETED ASSESSMENT U/S 143( 3) AFTER EXPIRY OF FOUR YEARS. THEREFORE, IN OUR OPINION, IN SUCH AN OCCASION THE PROVISO TO SECTION 147 WOULD COME INTO OPERATION. THEREFORE, THE ASSESSING OFFICER C ANNOT TAKE ANY ACTION AFTER EXPIRY OF FOUR YEARS ON THE BASIS OF THE AMENDED PROVISIONS O F SECTION 80HHC OF THE ACT. IN VIEW OF THE ABOVE DISCUSSION WE ARE UNABLE TO UPHOLD THE ORDERS OF LOWER AUTHORITY. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BEL OW ARE SET ASIDE. 5. NOW COMING TO THE APPEAL FOR ASSESSMENT YEAR 200 4-05, ADMITTEDLY, THE CASE WAS REOPENED U/S 147 OF THE ACT. THE ASSESSING OFF ICER WITHDRAWN THE DEDUCTION U/S 80HH ON DEPB INCENTIVE AFTER REOPENING THE ASSESSME NT. THE JURISDICTIONAL HIGH COURT WHILE CONSIDERING AN IDENTICAL SITUATION FOUND THAT THE ASSESSING OFFICER CAN RECTIFY THE ASSESSMENT ORDER U/S 154 BY WITHDRAWING THE DEPB IN CENTIVE AFTER THE AMENDMENT OF SECTION 80HHC. THEREFORE, THE HIGH COURT HELD THAT THE ORDER CAN BE AMENDED / RECTIFIED IN EXERCISE OF JURISDICTION U/S 154 OF TH E ACT. IN THIS CASE, THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT U/S 147 OF THE ACT WITH IN THE PERIOD OF FOUR YEARS. 4 ITA NO.151 & 152/COCH/2009 ITA NO.230/COCH/2010 THEREFORE, EVEN THOUGH THERE WAS NO NEGLIGENCE ON T HE PART OF THE ASSESSEE, THE INCOME DEFINITELY HAS ESCAPED ASSESSMENT IN VIEW OF THE AM ENDED PROVISIONS OF SECTION 80HHC OF THE ACT. THEREFORE, THE ASSESSING OFFICER HAS R IGHTLY REOPENED THE ASSESSMENT AND WITHDRAWN THE DEDUCTION U/S 80HHC IN RESPECT OF DEP B INCENTIVE. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LO WER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 6. IN THE RESULT, ITAS NO.151 & 152/COCH/2009 ARE A LLOWED AND ITA NO.230/COCH/2010 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF JANUARY, 2012. SD/- SD/- (SANJAY ARORA) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 25 TH JANUARY, 2012 PK/- COPY TO: 1. SHRI MOHANACHANDRAN NAIR, PRASANTHI CASHEW CO, MANG AD, KOLLAM 2. A.C.I.T., CIR.1, KOLLAM 3. THE COMMISSIONER OF INCOME-TAX(A)-IV, KOCHI 4. THE COMMISSIONER OF INCOME-TAX, TRIVANDRUM 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH