The ACIT, Circle-6, Surat V. M/s. Satya International, Surat

ITA 2622/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6044 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-07-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 22-09-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMIR TEKRIWAL SRDR
• Assessee Lawyers: KETANA H SHAH
• Keywords: Reopening of assessment; Difference of opinion; Change of opinion
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD B BENCH BEFORE SHRI G.D. AGARWAL, HONBLE VICE-PRESIDENT (AZ) AND SHRI D.K. TYAGI, HONBLE JUDICIAL MEMBER ITA NO.2622/AHD/2009 & C.O.NO.248/AHD/2009 (ARISING OUT ITA NO.2622/AHD/2009) ASSESSMENT YEAR:2004-05 DATE OF HEARING:21.7.11 DRAFTED:25.7.11 ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE-6, ROOM NO.623, AAYAKAR BHAVAN, MAJUA GATE, SURAT SATYA INTERNATIONAL C/O KETAN H. SHAH, ADVOCATE, 903, SAPPHIRE COMPLEX, NR. CARGO MOTORS, C.G. ROAD, AHMEDABAD PAN NO.AAOFS0992H V/S . V/S . M/S. SATYA INTERNATIONAL C/O KETAN H SHAH, ADVOCATE, 903, SAPPHIRE COMPLEX, NR. CARGO MOTORS, C.G. ROAD, AHMEDABAD ASSTT. COMMISSIONER OF INCOME-TAX, CIRCLE-6, ROOM NO.623, AAYAKAR BHAVAN, MAJUA GATE, SURAT (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI KETANA H SHAH, AR REVENUE BY:- SHRI SAMIR TEKRIWAL, SR-DR O R D E R PER D.K. TYAGI, JUDICIAL MEMBER:- THIS APPEAL BY REVENUE AND CROSS OBJECTION (CO) BY ASSESSEE ARE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (AP PEALS)-IV, SURAT DATED 16-06-2009 FOR THE ASSESSMENT ORDER 2004-05. ITA NO.2622/AHD/2009 & CO 248/AHD/09 A.Y. 2004-05 ACIT CIR-6 SRT V. M/S. SATYA INTERNATIONAL PAGE 2 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING, MANUFACTURING AND EXPORT OF FABRICS. TH E RETURN OF INCOME FOR ASSESSMENT ORDER 2004-05 WAS FILED DECLARING TOTAL INCOME OF RS.61,22,168/-. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT U /S.143(3) OF THE INCOME- TAX ACT, 1961 WAS COMPLETED DETERMINING TOTAL LOSS AT RS.59,89,170/-. SUBSEQUENTLY THE CASE WAS REOPENED BY THE ASSESSING OFFICER U/S.148 OF THE ACT. THE REASON FOR REOPENING THE ASSESSMENT U/S.14 8 WAS THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF FOL LOWING THREE ASSESSEES. IT WAS NOTICED BY THE RESPECTIVE ASSESSING OFFICERS TH AT THESE PERSONS HAD ISSUED ACCOMMODATION BILLS TO THE ASSESSEE. IN FACT , THESE PARTIES HAD NOT DONE ANY JOB WORK FOR THE ASSESSEE:- I) SHRI DHANARAM HIRGAARBHI, ROP OF M/S. VIKRAM JOB WORK RS. 91,79,759 II) SHRI HETRAM JAKAR PROP OF SHALINI SCREEN PRINTI NG WORK RS.1,30,23,039 III) SHRI ARJUNRAM TARURAM JAT PROP OF PRITIKA HAND PRINT WORK RS.1,21,87,544 RS.3,43,90,342 THE ASSESSING OFFICER FINALIZED THE ASSESSMENT U/S. 143(3) R.W.S 147 OF THE ACT BY MAKING ADDITION OF RS.3,43,90,342/- TREATING IT AS BOGUS EXPENDITURE AND DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.2,82,68,174/-. IN APPEAL BEFORE LD. CIT(APPEALS) ASSESSEE CHALLENGED THE REOPENING OF THE ASSESSMENT BY ASSESSING OFFICER ON THE GROUND THAT RE-ASSESSMENT PROCEEDINGS WAS MERELY A CHANGE OF OPINION SINCE EA RLIER ASSESSMENT HAS BEEN FRAMED U/S.143(3) BY RAISING A SPECIFIC QUERY IN REFERENCE TO THE ADDITION SOUGHT TO BE MADE IN THE RE-ASSESSMENT PROCEEDINGS. THE ASSESSEE ALSO CHALLENGED THE ADDITION MADE ON MERITS. LD. CIT(APP EALS) HOWEVER CONFIRMED THE ACTION OF THE AO AS FAR AS REOPENING OF ASSESSM ENT U/S 147 R.W.S 148 OF THE ACT WAS CONCERNED. HE HOWEVER GAVE SOME RELIEF TO THE ASSESSEE IN RESPECT OF ADDITION MADE BY ASSESSING OFFICER. 3. AGGRIEVED BY THIS ORDER OF LD. CIT(APPEALS), REV ENUE HAS FILED AN APPEAL AGAINST THE RELIEF GIVEN BY LD. CIT(APPEALS) TO ASSESSING WHILE ITA NO.2622/AHD/2009 & CO 248/AHD/09 A.Y. 2004-05 ACIT CIR-6 SRT V. M/S. SATYA INTERNATIONAL PAGE 3 ASSESSEE HAS FILED THIS CO CHALLENGING THE REOPENIN G OF ASSESSMENT U/S.147 R.W.S 148 OF THE ACT. SINCE QUESTION OF JURISDICTIO N IS INVOLVED IN THE CO WE DECIDE TO HEAR THE ASSESSEES CO FIRST. 4. AFTER HEARING BOTH THE PARTIES WE FIND THAT HON BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. V ITO AND OTHERS (2003) 259 ITR 19 (SC), HAS LAID DOWN A PROCEDURE TO BE ADOPTED BY AS SESSEE AND DUTY OF ASSESSING OFFICER WHERE A NOTICE U/S.148 OF THE INC OME-TAX ACT, 1961 HAS BEEN ISSUED BY HIM BY OBSERVING AS UNDER:- WHEN A NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961, IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTICE IS TO FILE THE RETURN AND, IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING THE N OTICES. THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASON ABLE TIME. ON RECEIPT OF REASONS, THE NOTICE IS ENTITLED TO FILE OBJECTIO NS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF TH E SAME BY PASSING A SPEAKING ORDER. ON RECEIVING NOTICES UNDER SECTION 148 THE APPELLAN T FILED THE RETURNS. THE APPELLANT ALSO RECEIVED NOTICES UNDER SECTION 1 43(2) CALLING FOR FURTHER INFORMATION ON CERTAIN POINTS IN CONNECTION WITH THE RETURNS. THEREUPON THE APPELLANT FILED WRIT PETITIONS CHALLE NGING THE NOTICES. THE HIGH COURT DISMISSED THE WRIT PETITIONS HOLDING THA T THE PETITIONS WERE PREMATURE AND THE APPELLANT COULD RAISE ITS OBJECTI ONS TO THE NOTICES BY FILING REPLY TO THE NOTICES BEFORE THE ASSESSING OF FICER (SEE. E.G. [2002] 257 ITR 702). THE APPELLANT PREFERRED APPEALS AND T HE SUPREME COURT DISMISSED THE APPEALS, OBSERVING THAT SINCE THE REA SONS FOR REOPENING OF ASSESSMENTS UNDER SECTION 148 HAD BEEN DISCLOSED IN RESPECT OF FIVE ASSESSMENT ORDERS, THE ASSESSING OFFICER HAD TO DIS POSE OF THE OBJECTIONS, IF FILED, BY PASSING A SPEAKING ORDER B EFORE PROCEEDING WITH THE ASSESSMENTS FOR THOSE YEARS. RESPECTFULLY FOLLOWING THIS DECISION OF HONBLE SUP REME COURT THE MATTER IS RESTORED BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICATION IN THE LIGHT OF ABOVE OBSERVATION OF HONBLE APEX COURT. 5. IN THE RESULT CO OF ASSESSEE IS ALLOWED FOR STAT ISTICAL PURPOSES. ITA NO.2622/AHD/2009 & CO 248/AHD/09 A.Y. 2004-05 ACIT CIR-6 SRT V. M/S. SATYA INTERNATIONAL PAGE 4 6. IN VIEW OF OUR DECISION IN THE CO THE APPEAL FIL ED BY REVENUE DOES NOT REQUIRE ANY ADJUDICATION AS THE ASSESSING OFFICER W ILL FIRST DISPOSE OFF THE OBJECTIONS RAISED BY ASSESSEE IN RESPECT OF REOPENI NG OF THE ASSESSMENT BY PASSING A SPEAKING ORDER AFTER THAT HE WILL PROCEED TO MAKE THE REASSESSMENT IF REQUIRED. 7. IN THE RESULT, APPEAL OF REVENUE AND THAT OF ASSESS EES CO ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS DAY OF 28 TH JULY, 2011 SD/- SD/- ( G.D.AGARWAL ) ( D.K. TYAGI ) (VICE PRESIDENT) (JUDICIAL MEMBER) AHMEDABAD, DATED : 28/07/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-IV, SURAT 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD