M/s.Rao Computers Consultants Pvt. Ltd., Bangalore V. Deputy Commissioner of Income-Tax, Bangalore

ITA 301/BANG/2017

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8470 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 10-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SWAPNA DAS; C.R NULVI
• Keywords: Reassessment proceedings
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 143(1); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH, A, BANGALORE BEFORE SHRI A.K GARODIA, ACCOUNTANT MEMBER SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NOS.301 & 302//BANG/2017 (ASST. YEAR 2009-10 & 2010-11) RAO COMPUTERS CONSULTANTS PVT. LTD., NEIL RAO TOWERS, PLOT NO.118, ROAD NO.3, EPIP 1 ST PHASE, WHITEFIELD, BANGALORE. . APPELLANT VS. THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-5(1)(1), BENGALURU. . RESPONDENT APPELLANT BY : SHRI C.R NULVI, C.A ASSESSEE BY : MS. SWAPNA DAS, JCIT DATE OF HEARING : 22-03-2017 DATE OF PRONOUNCEMENT : 24-03-2017 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER THIS APPEAL IS BY THE ASSESSEE WHICH IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) V DATED 29/12/2016 FOR THE ASSESSMENT YEARS 2009-10 AND 201 0-11. ITA NOS.301 & 302/B/17 2 2. THE FOLLOWING COMMON GROUNDS WERE RAISED BY THE ASSESSEE IN APPEAL NO.301 AND 302,: ITA NOS.301 & 302/B/17 3 3. FIRST OF ALL, WE WILL TAKE UP THE ISSUE OF GROU ND NO.5 RAISED BY THE ASSESSEE IN APPEAL NO. 301/BANG/2017 AND ALSO IN GR OUND NO. OF ITA NO.302/BANG/2017. THE BRIEF FACTS OF THE CASE ARE AS UNDER: ITA NOS.301 & 302/B/17 4 4. THE ASSESSEE COMPANY IS CLAIMED TO HAVE BEEN EN GAGED IN THE BUSINESS OF COMPUTER CONSULTANCY. THE ASSESSEE COM PANY HAS FILED RETURN OF INCOME FOR THE ASST. YEAR 2009-10 ON 16.9.2009 D ECLARING A LOSS OF RS.50,25,735/- AND CLAIMING A REFUND OF RS.71,73,65 0/-. SIMILARLY THE ASSESSEE COMPANY FILED RETURN OF INCOME FOR THE ASS T. YEAR 2010-11 ON 27.9.2010 DECLARING A LOSS OF RS.28,44,164/- AND CL AIMED REFUND OF RS.26,54,310/-. THE CASE WAS PROCESSED U/S 143(1) ON 7/2/2011 AND REFUND OF RS.78,20,930/- ALONG WITH THE INTEREST WAS CHAR GED IN FAVOUR OF THE ASSESSEE FOR ASST. YEAR 2009-10 . IN RESPECT TO AS ST. YEAR 2010-11 THE ASSESSMENT U/S 143(3) WAS COMPLETED ON 10/5/2012. BOTH THE CASES WERE SELECTED FOR REOPENING U/S 14 7 OF THE INCOME- TAX ACT AND NOTICE U/S 148 OF THE ACT DATED 30/3/20 14 WAS ISSUED BY THE AO. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED ORIGINAL RETURN U/S 148 OF THE ACT ON 29/5/2014 AND REQUESTED THE AO TO FOR RE ASONS RECORDED FOR REOPENING THE ASSESSMENT U/S 147. IN RESPONSE TO L ETTER OF THE ASSESSEE, THE AO PROVIDED THE REASONS FOR REOPENING THE ASSESSMEN T FOR THE ASSESSMENT YEAR 2009-10 AND 2010-11 ON 9/6/2014. THE REASONS RECORDED WERE AS UNDER:- ITA NOS.301 & 302/B/17 5 ITA NOS.301 & 302/B/17 6 5. THE ASSESSEE FILED OBJECTIONS FOR THE REASONS R ECORDED FOR REOPENING OF THE ASSESSMENT U/S 147 VIDE LETTER DAT ED 16/6/2014 IN RESPECT OF BOTH THE ASSESSMENT YEARS. THE AO WITHOUT DISPO SING THE OBJECTIONS OF THE ASSESSEE HAD COMPLETED THE ASSESSMENT PROCEEDIN GS AND PASSED THE ASSESSMENT ORDER ON 4.2.2015 6. FEELING AGGRIEVED BY THE ORDER PASSED BY THE AO , THE ASSESSEE FILED THE APPEAL BEFORE THE CIT(A) AND RAISED SPECI FIC GROUND NO 2 BEFORE THE CIT(A) IN FORM NO.35 AS UNDER:- GROUND 2: ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND UNDER THE PROVISIONS OF THE LAW, THE AO ERRED IN PASSING THE ORDER U/S 1 43(3) R.W.S 148 WITHOUT PASSING THE SPEAKING ORDER ON THE OBJECTION S RAISED BY THE APPELLANT BEFORE FRAMING ASSESSMENT. 7. THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT T HE LEARNED CIT(A) HAS NOT DECIDED THIS ISSUE WHILE PASSING THE ORDER UNDER APPEAL. FEELING AGGRIEVED BY THE ORDER PASSED BY THE COMMISSIONER T HE PRESENT APPEAL WAS FILED BY THE ASSESSEE ON VARIOUS GROUNDS AS MENTION ED HEREIN ABOVE, HOWEVER AT PRESENT WE ARE ONLY DECIDING THE GROUND NUMBER 5 RAISED IN THE PRESENT APPEAL. ITA NOS.301 & 302/B/17 7 8. BEFORE US, THE LEARNED AR HAS SUBMITTED THAT TH E AO WAS REQUIRED TO DECIDE THE OBJECTIONS RAISED BY THE ASSESSEE CHA LLENGING THE REOPENING OF THE ASSESSMENT PROCEEDINGS AND SHOULD NOT HAVE PASS ED THE ASSESSMENT ORDER. THE LEARNED AR RELIED UPON THE JUDGMENT OF HONBLE SUPREME COURT AND HIGH COURT IN THE CASE OF GKN DRIVE SOFT (SUPRA) AND GENERAL MOTORS INDIA PVT. LTD. VS. DCIT (SUPRA) TO SAY THAT THE PROCEEDINGS INITIATED BY THE AO AND THE LEARNED CIT(A) WERE WIT HOUT JURISDICTION AS SPEAKING ORDER CONTEMPLATED IN GKN DRIVE SOFT (SUP RA) WAS NOT PASSED BY THE LEARNED AO AND CIT(A). 9. ON THE OTHER HAND, THE LEARNED DR HAS SUBMITTED THAT THE OBJECTIONS RAISED BY THE LEARNED ASSESSEE WAS DULY CONSIDERED BY THE AO IN THE ORDER PASSED BY THE AO. 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE PART IES AND PERUSED THE MATERIAL ON RECORD. IN OUR VIEW, THE MANDATE IS CL EAR TO THE AO FROM THE HONBLE SUPREME COURT IN THE MATTER OF GKN DRIVE SO FT (SUPRA), WHERE THE HONBLE SUPREME COURT HAS HELD THAT THE PASSING OF THE SPEAKING ORDER WHILE DISPOSING OF THE OBJECTIONS OF THE ASSESSEE A RE NECESSARY BEFORE FRAMING THE REASSESSMENT PROCEEDINGS. HONBLE COURT HELD AS UNDER : ITA NOS.301 & 302/B/17 8 WE SEE NO JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER UNDER CHALLENGE. HOWEVER, WE CLARIFY THAT WHEN A NOTICE U NDER SECTION 148 OF THE INCOME TAX ACT IS ISSUED, THE PR OPER COURSE OF ACTION FOR THE NOTICE IS TO FILE RETURN A ND IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING NOTICES. THE A SSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASON ABLE TIME. ON RECEIPT OF REASONS, THE NOTICEE IS ENTITLED TO F ILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKI NG ORDER . IN THE INSTANT CASE, AS THE REASONS HAVE BEEN DISCLOSED IN THESE PROCEEDINGS, THE ASSESSING OFFIC ER HAS TO DISPOSE OF THE OBJECTIONS, IF FILED, BY PASSING A S PEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESSMENT IN RES PECT OF THE ABOVE SAID FIVE ASSESSMENT YEARS. IN THE PRESENT CASE, THE OBJECTIONS WERE FILED BY THE ASSESSEE ON 16/2/2014 AND THE ASSESSMENT ORDER PASSED WAS ON 4/2/2015. T HE BENCH IS NOT IN A POSITION TO FIND OUT FROM THE AVAILABLE RECORD WHET HER THE OBJECTION OF THE ASSESSEE RAISED VIDE LETTER DATED 6/6/2014 WERE DIS POSED OF BY SPEAKING ORDER BY THE AO OR NOT THEREFORE, WE DEEM IT APPROP RIATE TO REMAND THE MATTER TO THE FILE OF THE AO WITH A DIRECTIONS TO F IND OUT FROM THE ITA NOS.301 & 302/B/17 9 ASSESSMENT FOLDER AS TO WHETHER THE SPEAKING ORDER DEALING WITH THE OBJECTIONS DATED 16/6/2014 WAS PASSED BY THE AO OR NOT. IN CASE NO SUCH ORDER IS PASSED, THE NECESSARY ACTION FOR DISPOSING OF THE OBJECTIONS BE INITIATED BY THE AO. 11. AS THE ENTIRE REOPENING PROCEEDINGS IS SUBJECT TO PASSING OF THE SPEAKING ORDER ON THE OBJECTIONS, THEREFORE, WE ARE NOT ADJUDICATING ANY OTHER GROUND PRESSED BEFORE US AND, AS A RESULT, WE RESTORE BACK BOTH THE APPEALS TO THE FILE OF THE AO IN THE LIGHT OF THE A BOVE SAID DIRECTIONS. 12. HENCE, BOTH THE APPEALS ARE ALLOWED FOR STATIST ICAL PURPOSES. 13. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24TH MARCH, 2017 . SD/- SD/- (A.K GARODIA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEM BER BANGALORE DATED : 24/03/2017 VMS COPY TO :1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. ITA NOS.301 & 302/B/17 10 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTR AR, ITAT, BANGALORE.