The ITO, Ward-9(4), Ahmedabad V. M/s. Ratilal Vadilal, Ahmedabad

ITA 286/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62904 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 16-07-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 29-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BATHEJA
• Section: 143(3); 147; 148

Judgement Text

, , , , C, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, C BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + )* + )* + )* + ) ' ) ' ) ' ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.286/AHD/2010 WITH CO NO.74/AHD/2010 [ASSTT.YEAR : 2001-2002] ITO, WARD-9(4) AHMEDABAD. /VS. M/S.RATILAL VADILAL C/O. ANIL R. SHAH 31, YOGESHWAR SOCIETY AMBAWADI, AHMEDABAD. ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 )/ REVENUE BY : SHRI O.P. BATHEJA 4& 1 2 )/ ASSESSEE BY : SHRI JIGNESH SHAH 5 1 &(*/ DATE OF HEARING : 16 TH JULY, 2012 678 1 &(*/ DATE OF PRONOUNCEMENT : 03-08-2012 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE AND CO BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT(A)-XVI DATED 20.11.2009 FOR A.Y.2001-2002. THE SE ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. ITA NO.286/AHD/2010 WITH CO NO.74/AHD/2010 -2- ITA NO.286/AHD/2010 (REVENUES APPEAL) 2. THE GROUNDS RAISED IN THIS APPEAL OF THE REVENUE ARE AS UNDER: 1. LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN ALLO WING THE ASSESSEES APPEAL AND HOLDING THAT ASSESSMENT PROCE EDINGS AS NULL AND VOID. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE, TH E D.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. 3. IT IS THEREFORE, PRAYED THAT THE ORDER OF THE LD . CIT(A) MAY BE SET ASIDE AND THAT OF THE AO BE RESTORED. 3. THE LEARNED DR SUBMITTED THAT EXPLANATION TO PROVISION OF SECTION 147 OF THE I.T.ACT, 1961 APPLIES TO THE FAC TS OF THE PRESENT CASE, AND THEREFORE THE REOPENING IN THIS CASE UNDE R SECTION 147 OF THE ACT WAS VALID. HE REFERRED TO THE RELEVANT PORTION S OF THE ASSESSMENT ORDER IN SUPPORT OF THE CASE OF THE REVENUE. HE SU BMITTED THAT MERELY BECAUSE REFUND COULD NOT BE ISSUED BY THE DEPARTMEN T IN TIME, THAT DOES NOT MEAN THAT THE DEPARTMENT IS DEBARRED FROM REOPENING OF THE ASSESSMENT UNDER SECTION 148 OF THE ACT. THE LEARN ED DR HAS FILED WRITTEN SUBMISSIONS BEFORE THE TRIBUNAL. IT IS SUB MITTED THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F TRUSTEES OF H.E.H., THE NIZAMS SUPPLEMENTAL FAMILY TRUST, 242 ITR 381 (SC) RELIED UPON BY THE ASSESSEE WAS DISTINGUISHABLE ON FACTS FOR THE REASONS THAT THE DECISION WAS RENDERED BEFORE THE I NSERTION OF EXPLANATION 2(B) TO SECTION 147 OF THE ACT. HE SUBMITTED THAT IN THE CASE OF SMT.SHAKUNTALA DEVI, 318 ITR 273, THE HONB LE PUNJAB & HARYANA HIGH COURT HAS CONSIDERED THE DECISION OF T HE HONBLE SUPREME COURT IN THE CASE OF TRUSTEES OF H.E.H., TH E NIZAMS SUPPLEMENTAL FAMILY TRUST (SUPRA) AND HAS DIFFEREN TIATED THIS ITA NO.286/AHD/2010 WITH CO NO.74/AHD/2010 -3- DECISION OF THE HONBLE SUPREME COURT. HE SUBMITTE D THAT RELIANCE WAS PLACED BY THE ASSESSEE ON THE DECISION OF THE H ONBLE SUPREME COURT WAS NOT CORRECT. HE SUBMITTED THAT THE ADDIT ION HAS BEEN MADE FOR WANT OF AUTHENTICITY AND GENUINENESS AND WITH R EGARD TO THE PAYMENT OF RS.37,42,669/-, AS THE ASSESSEE COULD NO T GIVE COMPLETE DETAILS THEREOF, AND HAS ALSO NOT DEDUCTED TDS. HE SUBMITTED THAT THE ARGUMENTS OF THE ASSESSEE THAT THE REOPENING WAS ME RELY AN EXCUSE FOR INQUIRY, WAS NOT CORRECT. HE SUBMITTED THAT AS PER THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SUN ENGINEERIN G, 198 ITR 297 ADDITION CAN BE MADE IN RESPECT OF POINT WHICH HAVE NOT BECOME FINAL IN THE EARLIER ASSESSMENT. HE RELIED ON THE ORDER O F THE AO. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS FILED RETURN OF INCOME AND THE DEPARTMENT DID N OT PROCESS THE SAME UNDER SECTION 143(1) OR ISSUED A NOTICE UNDER SECTION 143(2) AT ANY TIME, NOR A REFUND WAS ISSUED TO THE ASSESSEE. HE SUBMITTED THAT IN SUCH FACTS THE NOTICE U/S.148 IS BAD IN LAW AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF TRUSTEES OF H.E.H., TH E NIZAMS SUPPLEMENTAL FAMILY TRUST, 242 ITR 381. IT WAS ON T HE GRIEVANCE APPLICATION FOR ISSUE OF REFUND, FILED BY THE ASSES SEE ON 10-7-2007 TO THE CIT THAT INSTEAD OF ISSUING A REFUND, NOTICE UN DER SECTION 148 DATED 28.7.2006 WAS ISSUED TO THE ASSESSEE. HE SUB MITTED THAT THE NOTICE UNDER SECTION 148 WAS BAD IN LAW AND THE SAM E WAS ISSUED AFTER FIVE YEARS AND FOUR MONTHS WITHOUT ANY OMISSI ON OR FAILURE ON THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MA TERIAL FACTS NECESSARY FOR ITS ASSESSMENT. HE SUBMITTED THAT NO ADDITIONS ON MERIT WERE MADE BY THE AO IN THE ASSESSMENT ON THE REASONS REC ORDED BY THE AO. HE SUBMITTED THAT NOTICE UNDER SECTION 148 WAS ISSU ED ONLY AS AN ITA NO.286/AHD/2010 WITH CO NO.74/AHD/2010 -4- EXCUSE TO MAKE AN INQUIRY, WHICH IS NOT PERMISSIBLE IN LAW. HE HAS RELIED ON THE ORDER OF THE CIT(A). 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS CAREFULLY A ND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE NOTICE UNDER SECTION 148 WAS ISSUED IN THIS CASE WITHOUT ANY PRO CESSING OF RETURN UNDER SECTION 143(1) OR ISSUE OF NOTICE UNDER SECTI ON 143(2) OR FRAMING OF AN ASSESSMENT UNDER SECTION 143(3) AND T HE NOTICE UNDER SECTION 148 WAS ISSUED AFTER FIVE YEARS AND FOUR MO NTHS. WE FIND THAT THE THERE WAS NO OMISSION, CONCEALMENT OR FAILURE O N THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR ITS ASSESSMENT IN THE RETURN OF INCOME FILED. THE REVEN UE COULD NOT CONTROVERT TO THE SUBMISSIONS OF THE LEARNED COUNSE L FOR THE ASSESSEE THAT NO ADDITION WAS MADE IN RESPECT OF ITEMS FOR W HICH PROCEEDINGS UNDER SECTION 147 WERE INITIATED. WE FIND THAT THE REVENUE COULD NOT CONTROVERT THE SUBMISSIONS OF THE LEARNED COUNSEL O F THE ASSESSEE THAT TILL DATE THE DEPARTMENT HAS NOT ISSUED ANY REFUND TO THE ASSESSEE. THE CIT(A) IN PARA 5.1 OF THE ASSESSMENT HAS RECORDED T HAT THE AO HIMSELF HAS ADMITTED IN THE OFFICE NOTE THAT THE REASONS RE CORDED BY HIM WERE NOT CORRECT. THE CIT(A) HAS CONCLUDED THAT THERE W AS NO PROPER APPLICATION OF MIND BY THE AO. THE CIT(A) HAS RECO RDED THAT THE NOTICE UNDER SECTION 148 WAS ISSUED BY THE AO WITH THE INTENTION TO TEACH THE ASSESSEE A LESSON AS HE HAS FILED GRIEVAN CE APPLICATION BEFORE THE SUPERIOR OF THE AO, AND THAT THERE IS NO INTIMA TION UNDER SECTION 143(1) AVAILABLE IN THE CASE RECORDS OF THE ASSESSE E. WE FIND THAT IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE AN D IN VIEW OF THE FACT THAT THE REOPENING WAS DONE AFTER MORE THAN FIVE YE ARS AND FOUR MONTHS, AND EVEN ON MERIT, NO ADDITION WAS MADE ON THE ISSUES ON ITA NO.286/AHD/2010 WITH CO NO.74/AHD/2010 -5- WHICH THE REASONS WERE RECORDED BY THE AO FOR REOPE NING OF THE ASSESSMENT UNDER SECTION 148 OF THE ACT, THE RE-ASS ESSMENT UNDER SECTION 147 COULD NOT BE SUSTAINED IN LAW ON THIS G ROUND ALONE AND WAS RIGHTLY CANCELLED BY THE CIT(A). IN THESE FACTS AND CIRCUMSTANCES, WE HOLD THAT THERE IS NO MISTAKE IN THE ORDER OF TH E CIT(A) IN HOLDING THAT THE ISSUE OF NOTICE UNDER SECTION 148 WAS BAD IN LAW, AND THEREFORE WHOLE ASSESSMENT PROCEEDINGS ARE DECLARED AS NULL AND VOID, AND ACCORDINGLY, ORDER OF THE CIT(A) IS CONFIRMED A ND THE GROUNDS OF THE REVENUE ARE DISMISSED. WE MAKE IT CLEAR THAT W E ARE NOT ADJUDICATING OTHER ISSUES REGARDING LEGALITY OF THE NOTICE U/S.148 AS RAISED BY THE ASSESSEE. CO NO.74/AHD/2010 (ASSESSEES CO) 6. WE HAVE HEARD BOTH THE PARTIES. IN VIEW OF OUR FINDING IN THE AFORESAID PARAS OF OUR ORDER WHILE DISPOSING OF THE REVENUES APPEAL THAT THE NOTICE UNDER SECTION 148 OF THE ACT WAS BA D IN LAW AND THE ASSESSMENT FRAMED WAS NULL AND VOID, WE HOLD THAT T HE PRESENT CO OF THE ASSESSEE HAS BECOME INFRUCTOUS, WHICH IS ACCORD INGLY DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE AND CO OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT