M/S. VIPUL BHAWARLAL JAIN, MUMBAI V. THE ACIT 14(1), MUMBAI

ITA 2672/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1709 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 07-06-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 16-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A P SINGH
• Keywords: Reopening of assessment; Opportunity of being heard; Set aside
• Section: 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SMT.ASHA VIJAYARAGHAVAN , JM ITA NO.2672/MUM/2008 : ASST.YEAR 2004-2005 SHRI VIPUL BHAWARLAL JAIN SHOP NO.7, DAGINA BAZAR 122 MUMBADEVI ROAD, MUMBAI-400 002. PA NO.ADCPJ7823K. VS. THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 14(1) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIPUL JOSHI RESPONDENT BY : SHRI A.P.SINGH O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDE R PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 29.02.2008 IN RELATION TO THE ASSESSMENT YEAR 2004-2005. 2. CONCISE GROUNDS HAVE BEEN FILED IN THIS CASE. AS PER GROUND NO.1(III) THE ASSESSEE HAS CHALLENGED THE FRAMING OF REASSESSMENT WITHOUT DISPOSING OFF THE OBJECTIONS RAISED BY THE ASSESSEE ON THE REASONS SU PPLIED FOR REASSESSMENT. 3. THE FACTS MATERIAL FOR DISPOSAL OF THIS GR OUND ARE THAT A SEARCH ACTION WAS TAKEN ON ASSESSEE U/S.132 ON 9.10.2003. THE ASSESS EE FILED RETURN FOR THIS YEAR ON 15.6.2004. NOTICE U/S.158BD WAS ISSUED FOR FURNISH ING OF BLOCK RETURN ON 14.11.2005. ON 16.01.2006 THE A.O. ISSUED NOTICE U/ S.148. THE ASSESSEE OBJECTED TO THE SAME VIDE ITS LETTER DATED 19.01.2006 ASKING FOR THE REASONS FOR THE REASSESSMENT. THEREAFTER ON THE NEXT DAY, THE A.O. WROTE A LETTER TO THE ASSESSEE REQUIRING THE FILING OF RETURN OF INCOME IN RESPON SE TO NOTICE U/S.148 WHICH WAS ITA NO.2672/MUM/2008 M/S.VIPUL BHAWARLAL JAIN. 2 COMPLIED WITH AND RETURN WAS FILED ON 2.2.2006. COP Y OF REASONS RECORDED WERE ISSUED ON 24.3.2006 AND ON THE VERY SAME DAY NOTICE U/S.142(1) R.W.S. 143(2) WAS ISSUED FIXING THE CASE FOR HEARING ON 27.3.2006. TH E ASSESSEE VIDE ITS LETTER DATED 25.3.2006 FILED IN THE OFFICE OF ASSESSING OFFICER ON 27.3.2006 OBJECTED TO THE NOTICE ISSUED U/S.148. COPY OF SUCH LETTER IS AVAIL ABLE AT PAGES 27 AND 28 OF THE PAPER BOOK. WITHOUT DISPOSING OFF THE ASSESSEES OB JECTION, THE ASSESSING OFFICER PASSED ASSESSMENT ORDER U/S.143(3) R.W.S. 147 ON 29 .03.2006 MAKING CERTAIN ADDITIONS. THIS CHRONOLOGY OF EVENTS IS AVAILABLE ON PAGE 3 OF THE IMPUGNED ORDER. THE APPEAL FILED BEFORE THE LEARNED CIT(A) WAS PART LY ALLOWED. THE ASSESSEE IS AGGRIEVED AGAINST THE REOPENING OF ASSESSMENT WITHO UT FIRST DISPOSING OFF HIS OBJECTIONS TO SUCH REOPENING. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS NOTICED THAT DESPITE ASSESSEES RAISIN G SPECIFIC OBJECTIONS AGAINST THE REASONS RECORDED BY THE A.O. FOR REOPENING OF ASSES SMENT, WHICH WERE SUPPLIED TO THE ASSESSEE AT THE FAG END OF THE LIMITATION PERIO D, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT WITHOUT DEALING WITH SUCH OBJECTIONS . THIS IS IN CONTRAVENTION OF THE LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE C ASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. ITO & ORS. [(2003) 259 ITR 19 (SC) ]. IN THIS CASE IT HAS BEEN HELD THAT THE ASSESSING OFFICER IS DUTY BOUND TO DISPOSE OFF THE ASSESSEES OBJECTION TO THE REASONS FOR REOPENING BY WAY OF SPEAKING ORDER BEFORE PROCEEDING WITH THE ASSESSMENT. SIMILAR VIEW HAS BEEN TAKEN BY THE HON BLE JURISDICTIONAL HIGH COURT IN ALLANA COLD STORAGE LTD. VS. ITO & ORS. [(2006) 287 ITR 1 (BOM.)] . SINCE THE ASSESSING OFFICER HAS NOT FOLLOWED THE MANDATE OF T HE JUDGEMENT OF THE HONBLE SUPREME COURT, WE SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FILE OF A.O. FOR DISPOSING OFF THE ASSESSEES OBJECTIONS TO THE REOPENING OF THE ASSESSMENT FIRSTLY BY WAY OF SPEAKING ORDER. ONLY T HEN HE CAN PROCEED WITH THE ITA NO.2672/MUM/2008 M/S.VIPUL BHAWARLAL JAIN. 3 ASSESSMENT ON MERITS. NEEDLESS TO SAY THE ASSESSEE WILL BE ALLOWED A REASONABLE OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED ON THIS 11 TH DAY OF JUNE, 2010 . SD/- SD/- (ASHA VIJAYARAGHAVAN) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 11 TH JUNE, 2010 . DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENTS. 3. THE CIT CONCERNED 4. THE CIT(A)-XIV, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.