Appeal details
Counselvise Citation
[2010] 136 COUNSELVISE.COM (IT) 2754 (ITAT-INDORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 1 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
14-07-2010
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
10-05-2010
Assessment Year
1998-1999
Appeal Filed On
28-05-2009
Judgement Text
PAGE 1 OF 6 - I.T.A.NO. 289/IND/2009 SMT. NAMRITA CHOUDHARY, BHOPAL. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI V.K. GUPTA, ACCOUNTANT MEMBER PAN NO. : AAACE7063J I.T.A.NO. 289/IND/2009 A.Y. : 1998-99 MRS.NAMRITA CHOUDHARY, ACIT, THE LIQUIDATOR, VS 1(2), EASTERN AIR PRODUCTS PVT.LTD., 14,NADIR COLONY, SHAMLA HILLS, BHOPAL. BHOPAL. APPELLANT RESPONDENT APPELLANT BY : SHRI AJAY K. CHHAJED, ADV. RESPONDENT BY : SMT. APARNA KARAN, SR. DR DATE OF HEARING : 13.07.2010 O R D E R PER BENCH THIS APPEAL FILED BY THE ASSESSEE ARISES OUT OF ORD ER OF THE LD. CIT(A)-I, BHOPAL , DATED 19.03.2009, FOR THE ASSESS MENT YEAR 1998-99. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE VAL IDITY OF REOPENING AS WELL AS THE ADDITION SUSTAINED BY THE REVENUE AUTHORITIES ON MERITS. IT IS A CASE OF REOPENING BEYOND FOUR YE ARS, OF THE ORIGINAL PAGE 2 OF 6 - I.T.A.NO. 289/IND/2009 SMT. NAMRITA CHOUDHARY, BHOPAL. ASSESSMENT MADE U/S 143(3). HENCE, THE REVENUES AT TENTION WAS DRAWN TO THE REASONS RECORDED BY THE ASSESSING OFFICER TO SHOW THAT WHETHER THERE WAS ANY SPECIFIC FINDING BY THE ASSESSING OFF ICER AS REGARD TO THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS TRULY AND FULLY IN THE COURSE OF ORIGINAL ASSESSMENT PROCEEDI NGS. THE LD. SR. DR DREW OUR ATTENTION TO THE OBSERVATION OF THE AO IN THE REASONS RECORDED BY HIM AT PAGE 76 OF THE PAPER BOOK AND SUBMITTED T HAT THIS WAS NOT OBSERVED SO IN SPECIFIC TERMS, HOWEVER, AN INFERENC E TO THIS EFFECT COULD BE DRAWN THEREFROM. SHE ALSO PLACED STRONG RELIANCE ON THE OBSERVATIONS OF THE LD. CIT(A) IN PARA 4 OF THE APPELLATE ORDER, WHEREIN THE LD.CIT(A) HAD MENTIONED THAT THE ASSESSEE HAD NOT DISCLOSED T RUE AND ALL MATERIAL FACTS. ON THE CONTRARY, THE LD.COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THIS ISSUE HAD BEEN EXAMINED THREADBARE AT THE TIME OF A SSESSMENT PROCEEDINGS AND THE ASSESSEE HAD ALSO DISCLOSED ALL FACTS, HENCE, THIS WAS A CASE OF CHANGE OF OPINION AND THAT TOO WITHOUT CO MPLYING WITH THE REQUIREMENTS OF SECTION 147 & 148. THE LD. COUNSEL ALSO SUBMITTED THAT IT WAS THE CASE OF REOPENING AT THE DIRECTION OF HIGHE R AUTHORITIES AND NOT ON APPLICATION OF MIND BY THE AO, HENCE, FOR THIS REA SON ALSO, THE REOPENING WAS BAD AND CONSEQUENTLY LIABLE TO BE QUASHED. FOR THIS PROPOSITION, THE LD.COUNSEL FOR THE ASSESSEE RELIED ON THE RECENT DE CISION OF THE HON'BLE PAGE 3 OF 6 - I.T.A.NO. 289/IND/2009 SMT. NAMRITA CHOUDHARY, BHOPAL. KARNATAKA HIGH COURT IN THE CASE OF CIT & ANOTHER V S. ASLAM-ULLAH KHAN AS REPORTED IN 34 DTR 58. 4. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES, MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 5. IT IS NOTED THAT SINCE THE ASSESSEES CLAIM HAS TO BE EXAMINED ON LEGAL ASPECTS, HENCE, MERITS OF THE CASE AND THE FA CTS RELATED THERETO ARE NOT STATED FOR THE SAKE OF BREVITY. IN THE PRESENT CASE, IT IS AN ADMITTED POSITION THAT IT IS A CASE OF REOPENING OF A CASE B EYOND FOUR YEARS OF AN ASSESSMENT MADE ORIGINALLY U/S 143(3). HENCE, PROVI SO TO SECTION 147 COMES INTO PLAY. IT HAS NOW BECOME A SETTLED JUDICI AL POSITION THAT IN THE REASONS RECORDED BY THE ASSESSING OFFICER, IN SUCH CASES, IT SHOULD BE SPECIFICALLY MENTIONED BY THE ASSESSING OFFICER THA T THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRUE AND MA TERIAL FACTS IN THE COURSE OF ORIGINAL PROCEEDINGS, RESULTING INTO ESCAPEMENT OF INCOME, WHICH, IN OUR OPINION, HAS NOT BEEN DONE BY THE ASSESSING OFF ICER. FOR THIS PURPOSE, WE REPRODUCE THE REASONS RECORDED BY THE A SSESSING OFFICER AS UNDER :- IN THIS CASE RETURN SHOWING TOTAL LOSS OF RS. 95,2 76/- HAD BEEN FILED ON 30.11.98. ASSESSMENT WAS COMPLETED U/ S 143(3) ON 27.2.01 ON A TOTAL INCOME OF RS. 11,12,860/-. AS PER RECORDS DEFERRED SALE TAX TO THE EXTENT OF RS. 4,56 ,470/- WAS ALLOWED THOUGH SUCH DEFERRED SALES TAX WAS NOT CONV ERTED PAGE 4 OF 6 - I.T.A.NO. 289/IND/2009 SMT. NAMRITA CHOUDHARY, BHOPAL. INTO FINAL LOAN LIABILITY BY SPECIFIED AGENCY. THIS BEING MISTAKE A SHOW CAUSE NOTICE U/S 154 DATED 25.2.2002 HAD BEEN ISSUED TO THE ASSESSEE. ASSESSEE FILED THE WRI TTEN SUBMISSION ON 11.4.2002 STATED THAT MISTAKE WAS NOT APPARENT FROM RECORDS AND HENCE CANNOT BE RECTIFIED U/S 154. HOWEVER, REJECTING THE CONTENTION OF THE ASSESSEE, DEFERRED SALE TAX LIABILITY TO THE TUNE OF RS. 4,56 ,470/- HAD BEEN DISALLOWED AND ADDED U/S 43B TO THE TOTAL INCO ME OF THE ASSESSEE AS PER ORDER U/S 154 DATED 17.6.2002 AGGRIEVED WITH THE SAID ORDER OF THE AO THE CIT(A) VIDE APPEAL NO. CIT(A)-1/BPL/IT-136/02-3 DATED. 15. 9.2003 HAS CANCELLED THE ORDER PASSED BY THE AO U/S 154 GI VING HIS FINDING THAT THE ACTION TAKEN BY THE ASSESSING OFFI CER U/S 154 WAS UNWARRANTED AND IN ANY BEYOND THE SCOPE OF SECT ION 154 AND ALLOWED THE APPEAL FILED BY THE ASSESSEE. SECOND APPEAL AGAINST THE ORDER OF THE CIT(A) SUPR A HAS BEEN FILED BY THE DEPARTMENT WHICH WAS DISMISS ED BY THE LD. I.T.A.T. VIDE ORDER IN I.T.A.NO. 990/IND/2 003 DATED 6.9.2004 RELYING ON THE C.B.D.T. CIRCULAR NOS. 496 DATED 25.9.87 AND 674 DATED. 29.12.93 IN VIEW OF WHICH DE FERRED SALES TAX WILL NOT BE DISALLOWED U/S 43B OF THE INC OME-TAX ACT,1961. WHILE CONSIDERING THE I.T.A.T.S ORDER (SUPRA) CIT , BHOPAL VIDE THEIR LETTER NO. CIT/BPL/TECH/AT-D/63/2 004-05 DATED. 30.12.2004 HAS OBSERVED AS UNDER :- PAGE 5 OF 6 - I.T.A.NO. 289/IND/2009 SMT. NAMRITA CHOUDHARY, BHOPAL. AO BE DIRECTED TO OBTAIN FORM D FROM SALES TAX DEPARTMENT/ FROM ASSESSEE IF THE COLLECTION IS IN ASSESSMENT YEAR 1998-99, NO ACTION, IF NOT, HE MAY BE DIRECTED TO TAKE ACTION U/S 148. THE ASSESSEE INSPITE OF REPEATED REMINDERS HAS NOT FILED/SUBMITTED THE REQUISITE FORM D OBTAINED FOR M THE SPECIFIED AGENCY. IN THE CIRCUMSTANCES, THE AO HAS NO ANY ALTERNATIVE LEFT EXCEPT TO START PROCEEDINGS U/S 14 8 TO SETTLE DOWN THE ISSUE. AS SUCH, I HAVE REASON TO BELIEVED THAT INCOME HAS ESCAPED ASSESSMENT TO THE TUNE OF RS. 4, 56,470/- FOR THE ASSESSMENT YEAR 1998-99 6. FROM THE PERUSAL OF THE ABOVE, THE VIEW EXPRESSED B Y US HEREIN BEFORE BECOME APPARENT WHICH IS DULY SUPPORTED BY T HE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN LEVER LIMITED AS REPORTED IN 268 ITR 332, WHICH HAS BEEN REFERRED TO CONSISTENTLY BY VARIOUS HON'BLE HIGH COURTS. THUS, ON THIS PRELIMIN ARY GROUND ALONE, THE APPEAL OF THE ASSESSEE IS LIABLE TO BE ALLOWED. 7. APART FROM THIS, THE AO HAS NOT EVEN COMPLIED WITH THE DIRECTION OF THE LD. CIT BY OBTAINING REQUIRED INFO RMATION FROM THE SALES TAX DEPARTMENT AND HAS INITIATED PROCEEDINGS MERELY FOR THE REASON THAT THE ASSESSEE FAILED TO SUBMIT THE NECESSARY DETAILS . IN THIS REGARD, IT IS FURTHER NOTED THAT NO INDEPENDENT EXERCISE HAS BEEN DONE BY THE ASSESSING OFFICER ON THE DIRECTION OF THE LD. CIT T O MAKE OUT A CASE OF PAGE 6 OF 6 - I.T.A.NO. 289/IND/2009 SMT. NAMRITA CHOUDHARY, BHOPAL. ESCAPEMENT OF INCOME. THUS, FOR THESE TWO ABOVE REA SONS ALSO, THE REOPENING IS NOT VALID IN LAW. 8. CONSEQUENTLY, WE ACCEPT THIS CLAIM OF THE ASSESSEE AND QUASH THE REASSESSMENT PROCEEDINGS. IN VIEW OF THIS, WE D O NOT EXPRESS ANY OPINION ON THE MERITS OF THE APPEAL. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED IN TERMS INDICATED ABOVE. 10. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 14 TH JULY, 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14 TH JULY, 2010. CPU* 13147
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