Ram Kishore Rathore, New Delhi V. ACIT, Circle- 53(1), New Delhi

ITA 308/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7312 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 17-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Bad and doubtful debts; Difference of opinion; Assessment record; Change of opinion; Reassessment proceedings; Set aside
• Section: 143(3); 80IA; 207; 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 308/DEL/2019 ASSESSMENT YEAR: 2011-12 SH. RAM KISHORE RATHORE, VS. ACIT, CIRCL E-53(1), C/O M/S RRA TAXINDIA NEW DELHI D-28, SOUTH EXTENSION, PART-I, NEW DELHI (PAN:AAAPR4260P) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. SOMIL AGGARWAL, ADVOCATE REVENUE BY : SH. PRADEEP SINGH GAUTAM, SR. DR. ORDER THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 22.11.2018 PASSED BY THE LD. CIT(A)-18, NEW DELHI R ELATING TO ASSESSMENT YEAR 2011-12 ON THE FOLLOWING GROUNDS:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT QUASHING THE I MPUGNED REASSESSMENT ORDER PASSED BY LD. AO U/S 143(3)/147 AND THAT TOO WITHOUT ASSUMING JURISDICTION AS PER LAW AND WITHOUT COMPLYING THE M ANDATORY CONDITIONS OF SECTION 147 TO 151 OF THE INCOME TAX ACT, 1961. 2. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT QUASHING THE IMPUGNED REASSESSM ENT ORDER PASSED BY LD. AO U/S 147/143(3) AND THAT TOO WITHOUT ASSUMING JURISDICTION AS PER LAW AND WITHOUT SERVING THE MANDATORY NOTICE U/S 148, 1 43(2) AND 142( 1) OF THE INCOME TAX ACT, 1961. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACT ION OF LD. AO IN NOT ALLOWING THE DEDUCTION OF INTEREST PAID ON HOUSING LOAN AMOUNTING TO RS. 8,01,501/- WHILE CALCULATING INCOME UNDER THE HEAD HOUSE PROPERTY AND THAT TOO BY RECORDING INCORRECT FACTS AND FINDINGS AND WITHOUT OBSERVING THE PRINCIPLES OF NATURAL JUSTICE. 4. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER , ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN NOT ALLOWING THE DEDUCTION OF A SUM OF RS. 8,01,501/- PAID AS INTEREST ON HOUSING LOAN WHILE C ALCULATING INCOME UNDER 2 THE HEAD HOUSE PROPERTY, IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACT ION OF LD. AO IN CALCULATING THE LOSS FROM HOUSE PROPERTY AT RS. 4,9 5,742/- INSTEAD OF RS. 13,41,638/-, AS CLAIMED BY THE ASSESSEE IN THE RETU RN OF INCOME AND THAT TOO BY RECORDING INCORRECT FACTS AND FINDINGS AND W ITHOUT OBSERVING THE PRINCIPLES OF NATURAL JUSTICE. 6. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN CALCULATING THE LOSS FROM HOUSE PROPERTY AT RS. 4,95,742/- INSTEAD OF RS. 13,41,638/- AS CLA IMED BY THE ASSESSEE IN THE RETURN OF INCOME, IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACT ION OF LD. AO IN REJECTING THE CLAIM OF ASSESSEE THAT APPELLANT WAS USING FIRS T FLOOR FOR THE BUSINESS PURPOSE AND HAS ERRED ACCORDINGLY IN COMPUTING THE INCOME FROM HOUSE PROPERTY CORRECTLY IN ACCORDANCE WITH LAW AND FACTS 8. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACT ION OF LD. AO IN COMPUTING THE RENTAL INCOME OF THE SECOND FLOOR FOR THE COMPL ETE PERIOD OF OCCUPATION. 9. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD.CIT(A) IN CONFIRMING THE ACTION OF LD. AO IN NOT ALLOWING THE DEDUCTION AND IN CALCULATING THE FIGURE OF LOSS FROM HOUSE PROPERTY AND FRAMING THE IMPUGNED REASSESSMENT ORDER ARE BAD IN LAW, ILLEGAL, UNJUSTI FIED, BARRED BY LIMITATION, CONTRARY TO FACTS & LAW AND BASED UPON RECORDING OF INCORRECT FACTS AND FINDING, WITHOUT GIVING ADEQUATE OPPORTUNITY OF HEA RING, IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND THE SAME DESERVES TO BE QUASHED. 10. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACT ION OF LD. AO IN CHARGING INTEREST U/S 234A, 234B, 234C AND 234D OF THE INCOM E TAX ACT, 1961. 2. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THE ISSUE IN DISPUTE HAS ALREADY BEEN ADJUDICATED A ND DECIDED IN FAVOUR OF THE ASSESSEE BY VARIOUS BENCHES OF THE ITAT AND REQ UESTED THAT RESPECTFULLY FOLLOWING THE ORDERS PASSED BY THE ITAT, THE ADDITI ON IN DISPUTE MAY BE DELETED AND APPEAL FILED BY THE ASSESSEE MAY BE ALL OWED. IN SUPPORT OF HIS CONTENTION HE FILED A COPY OF COMMON DATED 20.02.20 18 ORDER PASSED BY 3 THE ITAT JAIPUR BENCHES, JAIPUR IN ITA NO. 92/JP/20 15 FOR ASSESSMENT YEAR 2008-09 IN THE CASE OF M/S RAJASTHAN STATE INDUSTRI AL DEVELOPMENT & INVESTMENT CORP. LTD., UDYOG BHAWAN, TILK MARGE, C- SCHEME, JAIPUR VS. THE ACIT, CIRCLE-6, JAIPUR AND ITA NO. 206/JP/2015 FOR ASSESSMENT YEAR 2008-09, IN THE CASE OF THE DCIT CIRCLE-6, JAIPUR V S. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORP. LTD., UDY OG BHAWAN, TILAK MARGE, C-SCHEME, JAIPUR AND INDIRA EXPORTS PRIVATE LIMITED VS. ACIT IN ITA NOS. 391/2007, 338/2007 AND 294/2006 DATED 31.10.20 11 (INDORE) WHICH THE ASSESSEE HAS ATTACHED IN THE PAPER BOOK AT PAGE S 11 TO 16 AND ALSO THE DECISION OF DELHI BENCH IN THE CASE OF ANIL GUPTA V S. AO, (2005) 96 TTJ 0798 (DELHI) WHICH THE ASSESSEE HAS ATTACHED AT PAG ES 17 TO 25 OF THE PAPER BOOK. 3. LEARNED DR RELIED UPON THE ORDERS PASSED BY THE REVENUE AUTHORITIES. 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE OR DERS PASSED BY THE REVENUE AUTHORITIES ALONGWITH THE CASE LAWS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE ON THE ISSUE IN DISPUTE AN D I AM OF THE CONSIDERED VIEW THAT THERE ARE MANY ORDERS HAVE BEEN FILED BY THE LEARNED COUNSEL FOR THE ASSESSEE TO SUPPORT HIS CONTENTION. BUT HE ESPE CIALLY DRAW MY ATTENTION TOWARDS THE ORDER DATED 20.02.2018 OF ITAT JAIPUR B ENCHES, JAIPUR PASSED IN ITA NO. 92/JP/2015 ASSESSMENT YEAR 2008-09 IN TH E CASE OF M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORP. LTD., UDYOG BHAWAN, TILAK MARGE, C-SCHEME, JAIPUR VS. THE ACIT, CIRCLE-6, JAIPUR. 5. I HAVE GONE THROUGH THE ORDERS PASSED BY THE ITA T ON THE ISSUE IN DISPUTE AND I AM OF THE VIEW THAT THE ITAT JAIPUR B ENCHES, JAIPUR, ORDER 4 DATED 20.02.2018 IS VERY MUCH RELEVANT ON THE ISSUE IN DISPUTE IN WHICH THE JAIPUR BENCH HAS DISCUSSED THE VARIOUS CASE LAWS AN D MANY DECISIONS PASSED BY THE HONBLE HIGH COURTS AND DECIDED THE I SSUE IN FAVOUR OF THE ASSESSEE. FOR THE SAKE OF CONVENIENCE, THE FINDINGS GIVEN BY THE ITAT JAIPUR BENCHES IN PARA NO. 5 AT PAGES 7 TO 18 IS REPRODUCE D AS UNDER:- 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE SCRUTINY ASSESSMENT U/S 143(3) WAS COMP LETED ON 22.12.2010 WHEREBY THE AO ACCEPTED THE CLAIM OF DEDUCTION U/S 80IA OF RS. 95,11,66,038/-. THEREAFTER, THE AO ISSUED A NOTICE U/S 154/155 OF THE ACT DATED 8.06.2012 TO RECTIFY THE MISTAKE OF NOT ADJUS TING THE LOSS OF THE PREVIOUS YEAR OF RS. RS. 1,36,34,565/- IN RESPECT O F TWO UNITS WHILE ALLOWING THE DEDUCTION U/S 80IA OF THE ACT. FOR READY REFERE NCE WE REPRODUCE THE GIST OF THE NOTICE ISSUE U/S 154 DATED 08.06.2012 AS UND ER:- NOTICE UNDER SECTION 154 OF THE INCOME TAX ACT, 19 61 THE ASSESSMENT/REFUND ORDER U/S 143(3) FOR THE ASSE SSMENT YEAR 2008-09 MADE ON 22.12.2010 REQUIRES TO BE AMENDED AS THERE IS A MISTAKE APPARENT FROM THE RECORD WITHIN THE MEANING OF SECTION 154 / 155 OF THE INCOME TAX ACT, 1961. THE RECTIFICATION OF THE MISTAKE, AS PER PARTICULARS GIVEN BELOW, WILL HAVE THE EFFECT OF ENHANCING THE ASSESSMENT / REDUCING THE REFUND/INCREASING YOUR LIABILITY. IN RESPECT OF ALLOWING UNITS LOSS OF A.Y. 2007-08 H AS BEEN NOT SET OFF AS PER PROVISIONS OF SEC. 80IA CS BEFORE THE PROFIT OF THE SUBSEQUENT YEAR AS UNDER:- S. NO. UNIT INITIAL YEAR PROFIT OF THE YEAR 08-09 LOSS OF THE A.Y. 07-08 1. EPIP SITAPURA-1ST A.Y. 2005- 06 RS. 16770973 RS. 5020008 2. BORHADA A.Y. 2005- 06 RS.38561187 RS. 8614556 TOTAL 1,36,34,564 IT IS APPARENT FROM THE NOTICE U/S 154 OF THE ACT T HAT THE AO PROPOSED TO RECTIFY THE MISTAKE IN RESPECT OF THE LOSS OF RS. RS. 1,36, 34,564/- TO BE ADJUSTED AGAINST THE PROFITS OF THE ELIGIBLE UNDERTAKING FOR DEDUCTI ON U/S 80IA OF THE ACT. IN RESPONSE TO THE SAID NOTICE ISSUED U/S 154 THE ASSE SSEE FILED ITS REPLY DATED 15.06.2012 AS UNDER:- 5 WE ARE IN RECEIPT OF YOUR AFORESAID NOTICE IN WHIC H YOU HAVE PROPOSE TO REDUCE DEDUCTION U/S 80IA BY RS. 1,36,34,564/-, IN THIS CONNECTION WE ARE TO SUBMIT THAT DURING THE YEAR ASSESSEE HAS CLAIMED DEDUCTION U/S 80IA IN RESPECT OF VARIOUS INDUSTRIAL AREA AND FOR WHICH AUDIT CERTIFICATE U/S 80IA HAS ALSO BEEN SUBMITTED DURING THE COURSE OF AS ASSESSMENT PROCEEDINGS COMPLETED U/S 143(3). TOTAL ELIGIBLE PROFIT U/S 80I A OF ALL THESE INDUSTRIAL AREA WORKS OUT TO RS.98,13,07,585/- AGAINST WHICH ASSESSEE HAS CLAIMED DEDUCTION U/S 80 IA AT RS. 95,1 1,66,037/-. IF THE LOSS OF TWO UNIT I.E. EPIP, SITAP URA & BORANADA OF RS. 1,36,34,564/- IS CONSIDERED WHILE WORKING OUT E LIGIBLE AMOUNT OF DEDUCTION U/S 80IA THEN ELIGIBLE DEDUCTION WORKS OU T TO RS.96,76,73, 021/- (98,13,07,585- 1,36,34,564) AGAINST WHICH ASS ESSEE HAS CLAIMED DEDUCTION U/S 80IA AT RS. 95,11,66,037/- ON LY. SINCE ASSESSEE HAS ALREADY CLAIMED DEDUCTION U/S 80IA AT LESSER AMOUNT AS COMPARED TO COMPUTED BY YOUR GOOD SELF, THUS THERE IS NO NEED TO MAKE ANY ADJUSTMENT U/S 154/155. THUS, THE ASSESSEE CLEARLY EXPLAINED THAT THE PROFI T OF THE ASSESSEE ELIGIBLE DEDUCTION U/S 80IA IS RS. 96,76,73,021/- EVEN AFTER THE ADJUSTMENT OF THE SAID LOSS OF RS. 1,36,34,564/-. HENCE, THE DEDUCTION ALL OWED IN THE ASSESSMENT ORDER OF RS. 95,11,66,037/- IS NOT A MISTAKE AS STATED IN THE NOTICE U/S 154 OF THE ACT. THE AO THEN ISSUED NOTICE U/S 148 OF THE ACT ON 21. 11.2012 BY RECORDING THE REASONS AS UNDER:- REASONS FOR INITIATING PROCEEDINGS U/S147 AND ISS UE OF NOTICE U/S 148 OF THE I.T. ACT, 1961 IN THE CASE OF M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR (PAN NO. AABCR4695 A.Y. 2008-09. THE ASSESSMENT IN CASE WAS COMPLETED U/S 143(3) ON 22.12.2010. LATER IT HAS BEEN NOTICED THAT THE ASSESSEE HAS WORKED OU T DEDUCTION U/S 80IA IN RESPECT OF VARIOUS ELIGIBLE PROJECTS AT RS. 98,1 3,07,575/-. HOWEVER, IT HAS CLAIMED THE DEDUCTION AT RS. 95,11,66,028/- ANT ICIPATING THAT DEDUCTION ALLOWED IN EARLIER YEARS TO CERTAIN UNITS MAY BE WITHDRAWN (THOUGH NOT WITHDRAWN TILL DATE). WHILE CALCULATING THE DEDUCTION U/S 80IA THE ASSESSEE HAS NOT CONSIDERED THE LOSS IN RESPECT OF TWO UNITS VIZ. SITAPURA EPIP-I AT SEZ BORANADA AMOUNTING TO RS. 50,20,009/- AND RS. 86,14,565/- RESPECTIVELY TOTALING TO RS. 1,36,34,565/- WHICH WOULD HAVE FURTHER REDUCED FROM RS. 95,11,66,028/- WHILE WORKING OUT THE DEDUC TION U/S 80IA. 2. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES I HAVE SUF FICIENT REASONS TO BELIEVE THAT AN AMOUNT OF RS. 1,36,34,565/- HAS ESCAPED ASS ESSMENT WITHIN THE MEANING OF SEC. 147 OF THE I.T. ACT, 1961. 3. ISSUE NOTICE U/S 148 FOR THE A.Y. 2008-09 IN WHICH THE SAND TRANSACTION FALLS. IT IS APPARENT THAT THE REASONS FOR ISSUING THE NOT ICE U/S 154 AS WELL AS THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT U/ S 147/148 OF THE ACT ARE SAME TO RE-COMPUTE THE DEDUCTION U/S 80IA AFTE R ADJUSTMENT OF LOSS OF 6 RS. 1,36,34,564/-. THE ASSESSEE HAS RAISED A LEGAL OBJECTION AGAINST THE INITIATION OF PROCEEDING U/S 147/148 WHILE THE PROC EEDING U/S 154 OF THE ACT WERE PENDING AND NOT REACHED TO THE FINALITY EITHER BY DROPPING THE SAME OR PASSING ANY ORDER U/S 154 OF THE ACT, THE INITIATIO N OF PROCEEDING U/S 147/148 IS NOT PERMISSIBLE. THE BENCH ASKED THE LD. CIT DR TO PRODUCE THE ASSESSMENT RECORD TO SHOW THAT THE STATUS OF THE PR OCEEDING U/S 154 ON THE DATE OF INITIATING OF PROCEEDINGS U/S 147/148 OF TH E ACT. IT WAS FOUND THAT THE AO HAS NOT PASSED ANY ORDER EITHER FOR DROPPING THE PROCEEDING OR CONCLUDING THE PROCEEDING U/S 154 PRIOR TO ISSUING NOTICE U/S 148 OF THE ACT. THUS, IT IS NOT DISPUTED THAT THERE IS NO RECORD OF CLOSING THE PROCEEDING U/S 154 OF THE ACT. THERE IS NO QUARREL THAT THE DOCTRI NE OF ESTOPPEL IS NOT APPLICABLE AGAINST THE INITIATION OF PROCEEDINGS U/ S 147/148 EVEN WHEN THE AO INITIATED THE PROCEEDINGS U/S 154 OF THE ACT. HO WEVER, WHEN THE ISSUE IN THE TWO PROCEEDINGS INITIATED U/S 154 AS WELL AS U/ S 147OF THE ACT IS THE SAME THAN WITHOUT CONSIDERING THE PROCEEDING U/S 15 4 OF THE ACT THE AO CANNOT INITIATE PARALLEL PROCEEDING U/S 147/148 OF THE ACT ON THE SAME ISSUE. THE HONBLE MADRAS HIGH COURT IN CASE OF STER ILITE INDUSTRIES INDIA LTD. VS. ACIT(SUPRA) WHILE DEALING WITH AN IDENTICA L ISSUE OF JURISDICTION OF THE AO HAS HELD IN PARAS 28 O 30 AS UNDER:- 28. AS ALREADY POINTED OUT, IN RESPECT OF THE ASSES SMENT YEAR 2003-04, THE FIRST RESPONDENT HEREIN ISSUED NOTICE UNDER SECTION 154 ON 20.7.2006, WHEREIN, THE OFFICER PROPOSED TO DISALLOW THE CLAIM UNDER SECTION 80 HHC, PROVISION FOR BAD DEBTS AND DIMINUTION OF VALUE OF CURRENT INVESTMENT AND INCOM E TAX DEBITED IN RESPECT OF SECTION 115 JB ASSESSMENT AND ON THE REGULAR ASSESSMENT UNDER SECTION 143(3) IN RESPECT OF THE ALLEGED MISTAKE IN GRANTING DEDUCTION UNDER SECTION 80 IB, FOR INCOME TAX AND WEALTH TAX DEBITED IN THE PROFIT AND LOSS ACCOUNT AND THE SHARE ISSUE EXPENSES AND FRN ISSUE EXPENSES WRITTEN OFF TO BE DISALLOWED, BEING CAPITAL IN NATURE. 29. A READING OF THE NOTICE UNDER SECTION 154 OF THE AC T AND THE REASSESSMENT NOTICE DATED 11TH MAY 2009 SHOWS THAT THERE IS ABSOLUTELY NO MATERIAL DIFFERENCE ON THE ISSUES SOUGHT TO BE CONSIDERED UNDER THESE NOTICES, EXCEPT THE FACT THAT WHILE IN THE PROCEEDIN GS UNDER SECTION 154, THE NOTICE IS BASED ON THE VIEW THAT THERE WAS A MISTAKE APPARENT ON THE FACE OF THE RECORD WARRANTING A RECTIFICATION, THE PROCEEDINGS UNDER S ECTION 147 ALLEGED THAT BY REASON OF THE UNTRUE AND INCORRECT PARTICULARS GIVEN BY THE ASSESSEE, THERE HAD BEEN AN ESCAPEMENT OF TAX. GIVEN THE FACT THAT THE AREA OF OPERATION OF BOTH THESE PROVISIONS ARE ON TOTALLY DIFFERENT FIELDS, THE SIMULTANEOUS ASSUMPTION OF JURISDICTION UNDER SECTI ONS 154 AND 147 ON THE SELF SAME ISSUE, PLAINLY SHOWS THE CONTRADICTIO N IN THE REASONING OF THE SECOND RESPONDENT AND AS WITHOUT LOGIC OR REASO N. 7 30. AS RIGHTLY POINTED OUT BY THE LEARNED SENIOR COUNSE L APPEARING FOR THE PETITIONER PLACING RELIANCE ON THE DECISION REP ORTED IN PREMIER AUTOMOBILES LTD. (SUPRA), WHEN ONCE THE ASSESSMENT ORDER HAS BEEN THE SUBJECT MATTER OF RECTIFICATION UNDER SECTION 154, THE SELF SAME ISSUE CANNOT BE THE SUBJECT MATTER OF REASSESSMENT BY TAK ING RECOURSE TO SECTION 147 OF THE ACT. THUS, ON THE FACTS THAT ARE AVAILABLE TODAY, AS FAR AS THE ASSESSMENT YEAR 2003-2004 IS CONCERNED, THER E ARE TWO PROCEEDINGS, ONE UNDER SECTION 154 AND ANOTHER UNDE R SECTION 147 OF THE ACT. THE JURISDICTION GIVEN UNDER BOTH THE SECT IONS THUS OPERATING ON DIFFERENT FIELDS, (AS FAR AS THIS ASSESSMENT YEAR I S CONCERNED), AND WITH THE DOUBT IN THE MIND OF THE OFFICER AS TO WHICH DI RECTION HE HAS TO GO, I HAVE NO HESITATION IN HOLDING THAT THE NOTICE LACKS THE VERY BASIS FOR ASSUMPTION OF JURISDICTION UNDER SECTION 147 OF THE ACT. FOR THE REASONS THAT THERE CANNOT BE TWO PARALLEL PROCEEDINGS ON TH E SELF SAME ISSUE AS ONE BASED ON THE VIEW THAT THERE WERE MATERIALS AVA ILABLE ON RECORD WHICH WARRANTED EXERCISE OF JURISDICTION UNDER SECT ION 154 AND THE OTHER INITIATED UNDER SECTION 147 THAT THERE WAS ESCAPEME NT OF INCOME FROM TAX ON ACCOUNT OF THE FAILURE OF THE ASSESSEE FROM DISCLOSING THE FULL AND CORRECT PARTICULARS, I HAVE NO HESITATION IN QUASHI NG THE NOTICE ON REASSESSMENT. THE HONBLE HIGH COURT AS HELD THAT THEN CANNOT BE TWO PARALLEL PROCEEDINGS ON THE SELF SAME ISSUE AS ARE BASED ON THE VIEW THA T THERE WERE MATERIALS AVAILABLE ON RECORD WHICH WARRANTED EXERCISE OF JUR ISDICTION U/S 154 AND THE OTHER INITIATED U/S 147 THAT THERE WAS ESCAPEMENT O F INCOME FROM TAX. THE MUMBAI BENCH OF THE TRIBUNAL IN CASE OF MAHINDER FR EIGHT CARRIER VS. DCIT 129 ITD 278 HAS HELD IN PARA 10 AS UNDER:- 10. IN THIS CASE, THE ASSESSING OFFICER INITIATED T HE PROCEEDING UNDER SECTION 154 OF THE ACT AND SAID PROCEEDING, AS PER RECORD, HAS NOT REACHED THE FINALITY, EITHER BY DROPPING THE SAME OR PASSING AN Y ORDER IN THE SAID PROCEEDING. AS PER THE REASONS RECORDED BY THE ASSE SSING OFFICER AS THE ASSESSEE DID NOT RESPOND TO THE NOTICE ISSUED UNDER SECTION 154, THE ASSESSING OFFICER INITIATED THE PROCEEDINGS UNDER S ECTION 147 AND IN CONSEQUENCE ISSUED THE NOTICE UNDER SECTION 148. IT IS ALSO ADMITTED FACT THAT EXCEPT THE RETURN OF INCOME OF THE ASSESSEE AND ITS ENCLOSURES, NO OTHER EXTRA MATERIAL OR INFORMATION WAS IN POSSESSION OF THE ASSESSING OFFICER. IT IS TRUE THAT THE ASSESSEE FILED THE RETURN OF INCOME IN RESPONSE TO THE NOTIC E ISSUED BY THE ASSESSING OFFICER UNDER SECTION 148 O F THE ACT SHOWING THE RENTAL INCOME AS AN INCOME FROM HOUSE PROPERTY, BUT THE AS SESSEE HAS EVERY RIGHT TO CHALLENGE PROCEEDING INITIATED BY THE ASSESSING OFF ICER UNDER SECTION 147 OF THE ACT. NOW IT IS WELL-SETTLED PRINCIPLE BY DIFFERENT JUDICIAL PRONOUNCEMENTS THAT THERE CANNOT BE ANY 'ESTOPPEL' AGAINST THE STATUTORY PROVISIONS. ADMITTEDLY, IN THIS CASE, THE MANDATE OF SECTION 147 IS NOT FULFILLED FOR THE REASONS THAT THE ASSESSING OFFICER HIMSELF WAS NOT SURE WHETHER THE ISSUE IN CONTROVERSY COULD BE THE SUBJE CT-MATTER OF SECTION 154 OR THE SAME CAN BE THE SUBJECT-MATTER OF PROCEEDING S UNDER SECTION 147. LD. 8 D.R. PLACED HIS HEAVY RELIANCE IN THE CASE OF DAMOD AR H. SHAH(SUPRA). IN THE SAID CASE THE HON'BLE HIGH COURT HAS EXPLAINED IN DETAILS THE DIFFERENCE BETWEEN SECTION 154 VIZ-A-VIZ SECTION 147. AS PER S AID DECISION THERE IS NO BAR TO EVOKE SECTION 147 BUT ASSESSING OFFICER HAS TO DEMO NSTRATE WHY HE WAS REQUIRED TO DO SO. NOTHING HAS BEEN DEMONSTRATED BY ASSESSING OFFICER IN THIS CASE. IN OUR OPINION, FOR THE REASONS GIVEN ABOVE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ISSUING THE NOTICE TO THE ASSESSEE UNDER SECTION 148 AND WE, ACCORDINGLY, HOLD THE SAME AS VOID AB INITIO AN D QUASH THE PROCEEDINGS INITIATED BY THE ASSESSING OFFICER UNDER SECTION 14 7. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND GROUND NOS. 1 TO 3 ARE ALLOWED. AS THE ASSESSEE SUCCEEDS ON THE ISSUE OF T HE VALIDITY OF THE NOTICE UNDER SECTION 148, WE DO NOT CONSIDER IT NECESSARY TO GO INTO THE MERITS OF THE CASE. IT IS MANIFEST FROM THE RECORD THAT ALL RELEVANT MA TERIALS AND FACTS NECESSARY FOR ASSESSMENTS WERE AVAILABLE WITH THE A SSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSEE PASSED U/S 143(3) OF THE ACT AND FURTHER THE CLAIM OF DEDUCTION ALLOWED WHILE PASSING THE ORDER U/S 14 3(3) WOULD NOT BE EXCESSIVE EVEN IF PROPOSED ADJUSTMENT OF LOSS OF PR EVIOUS YEAR IS MADE AGAINST THE PROFIT OF THE CURRENT YEAR. THE ASSESSE E REMINDED THE AO IN ITS REPLY TO THE NOTICE U/S 154 THAT EVEN AFTER THE ADJ USTMENT OF LOSS OF RS. 1.36 CRORES ALLOWABLE DEDUCTION WOULD BE MORE THAN RS. 95.11 CRORES ALLOWED IN THE ORIGINAL ASSESSMENT. THEREAFTER, THE AO WITHOUT BRINGING THE PROCEEDINGS U/S 154 OF THE IT ACT TO A LOGICAL CONC LUSION HAD INITIATED THE PROCEEDINGS U/S 147 OF THE ACT ON THE BASIS OF THE SAME FACT AND MATERIAL AVAILABLE ON THE ASSESSMENT RECORD. THUS, REOPENING ON THE BASIS OF THE MATERIAL AVAILABLE ON ASSESSMENT RECORD IS NOTHING BUT BASED ON CHANGE OF OPINION. THE HONBLE CALCULTA HIGH COURT IN CASE O F BERGER PAINTS INDIA LTD. VS. DCIT (SUPRA) HAS HELD IN PARAS 42 TO 53 ARE AS UNDER:- 42. HOWEVER, IF THE ASSESSING OFFICER IS OF THE VIE W THAT INCOME HAS ESCAPED ASSESSMENT BY REASON OF A MISTAKE APPARENT FROM REC ORDS, AND TAKES RECOURSE TO SECTION 154, BUT FINDS LATER, THAT THERE IS NO APPARENT MISTAKE, THEN HE CANNOT, IN THE ABSENCE OF ANY OTHER GROUND ON THE BASIS OF WHICH HE STILL HAS REA SON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT, STA RT REASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT. IN OTHER WORDS, THE ASSESSING OFFICER CANNOT AGAIN START REASSESSMENT PROCEEDINGS ON THE BASIS OF THE SAME REASONS. 43. THE ASSESSING OFFICER HAS NOT DISCLOSED THE REASONS FOR THE ASSESSING OFFICER TO STILL BELIEVE THAT INCOME THAT WAS THE S UBJECT- MATTER OF RECTIFICATION HAD STILL ESCAPED ASSESSMENT THOUGH THAT WAS NOT DUE TO ANY OBVIOUS MISTAKE, BORNE OUT FROM EXISTING RECORDS. 9 44. THE JUDGMENT IN GKN DRIVESHAFTS (INDIA) LTD. V. ITO REPORTED IN [2003] 259 ITR 19, CITED BY MR. BHOWMIK WAS RENDERED BY THE SU PREME COURT IN THE PARTICULAR FACTS OF THAT CASE. THE SUPREME COURT HE LD (PAGE 20) : 'WE SEE NO JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER UNDER CHALLENGE . HOWEVER, WE CLARIFY THAT WHEN A NOTICE UNDER SECTIO N 148 OF THE INCOME-TAX ACT IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTICEE IS TO FILE A RETURN AND IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING NOTICES. THE A SSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF REA SONS) THE NOTICEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE A ND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. IN THE INSTANT CASE, AS THE REASONS HAVE BEEN DISCLOSED IN THESE PROCEEDINGS, T HE ASSESSING OFFICER HAS TO DISPOSE OF THE OBJECTIONS, IF FILED, BY PASSING A SPEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESSMENT IN RESPECT OF THE AB OVESAID FIVE ASSESSMENT YEARS.' 45. THE CONDITION PRECEDENT FOR INITIATION OF REASSESSM ENT PROCEEDINGS IS, IN ANY CASE, THE FORMATION OF THE BELIEF, BASED ON NEW MATERIALS THAT ANY INCOME HAD ESCAPED ASSESSMENT. A NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT MAY NOT BE ISSUED MERELY ON CHANGE OF OPINION. 46. IN NORMAL CIRCUMSTANCES, ON RECEIPT OF A NOTICE OF REASSESSMENT UNDER SECTION 148 OF THE INCOME-TAX ACT, THE ASSESSEE SHOULD FILE A RETURN, ASK FOR THE REASONS AND THEN FILE ITS OBJECTION. HOWEVER, WHERE THE CONDITION PRECEDENT FOR ISSUANCE OF A NOTICE ARE ABSENT, THE NOTICE MIGHT BE CHALLEN GED BY FILING A WRIT PETITION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA. 47. IN CALCUTTA DISCOUNT CO. LTD. V. ITO [1961] 41 ITR 201, THE SUPREME COURT HELD THAT IN EXERCISE OF POWER UNDER ARTICLE 226, TH E COURT MIGHT EXAMINE WHETHER THE CONDITIONS PRECEDENT FOR EXERCISE OF JURISDICTIO N TO REASSESS EXISTED. THE SUPREME COURT, INTER ALIA, HELD AS FOLLOWS (PAGE 207 AND 208) 'THE EXISTENCE OF SUCH ALTERNATIVE REMEDY IS NOT HOWEVER ALWAYS A SUFFICIENT REASON FOR REFUSING A PARTY QUICK RELIEF BY A WRIT OR ORDER PROHIBITING AN AUTHORITY ACTING WITHOUT JURISDICTION FROM CONTINUING SUCH ACTION. IN THE PRESENT CASE, THE COMPANY CONTENDS THAT THE CONDITIONS PRECEDENT FOR THE ASSUMPTION OF JURISDICTION UNDER SECTION 34 WER E NOT SATISFIED AND CAME TO THE COURT AT THE EARLIEST OPPORTUNITY. THERE IS NOT HING IN ITS CONDUCT WHICH WOULD JUSTIFY THE REFUSAL OR PROPER RELIEF UNDER ARTICLE 226. WHEN THE CONSTITUTION CONFERS ON THE HIGH COURTS THE POWER TO GIVE RELIEF IT BECOMES THE DUTY OF THE COURTS TO GIVE SUCH RELIEF IN FIT CASES AND THE COU RTS WOULD BE FAILING TO PERFORM THEIR DUTY IF RELIEF IS REFUSED WITHOUT ADE QUATE REASONS.' 48. MOREOVER, IN THIS CASE, WHERE THE WRIT PETITION HAD BEEN ENTERTAINED AND KEPT PENDING FOR ABOUT SIX YEARS AND DIRECTIONS ISSUED FOR FILING OF AFFIDAVITS, THIS COURT IS NOT INCLINED TO DECLINE R ELIEF ONLY ON THE GROUND OF EXISTENCE OF AN ALTERNATIVE REMEDY OF FILING AN OBJ ECTION BEFORE THE ASSESSING OFFICER AND THEN TAKING RECOURSE TO AN APPEAL UPON REASSESSMENT. 49. IN RAYMOND WOOLLEN MILLS LTD. V. ITO REPORTED IN [1 999] 236 ITR 34 (SC) CITED BY MR. BHOWMICK, THE SUPREME COURT WAS S ATISFIED ON FACTS THAT 10 JURISDICTION TO REASSESS HAD VALIDLY BEEN ASSUMED. 50. IF THERE ARE REASONS TO BELIEVE THAT INCOME HAS ESC APED ASSESSMENT, AND JURISDICTION TO ISSUE NOTICE OF REASSESSMENT UNDER SECTION 148 OF THE INCOME-TAX ACT HAS BEEN EXERCISED, THE COURT OUGHT NOT TO WEIGH THE SUFFICIENCY OF THE REASONS IN EXERCISE OF ITS EXTRAORDINARY WRIT JURISDICTION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA. 51. THE COURT MAY, HOWEVER, IN EXERCISE OF ITS POWER OF JUDICIAL REVIEW EXAMINE WHETHER THE CONDITIONS PRECEDENT FOR EXERCISE OF JURISDICTION TO REOPEN ASSESSMENT AT ALL EXIST. IN THE ABSENCE OF ANY NEW AND/OR FRESH MATERIALS, ON THE BASIS OF WHICH THE ASSESSING OFFICER COULD HAVE FORMED THE OPINION THA T INCOME HAS ESCAPED ASSESSMENT, THE ASSESSING OFFICE R LACKED JURISDICTION TO REOPEN ASSESSMENT. 52. THE REASSESSMENT NOTICE HAS BEEN ISSUED FOR VIRTUAL LY THE SAME REASONS FOR WHICH RECTIFICATION PROCEEDINGS HAD EARLIER BEE N INITIATED BUT DROPPED. THE ASSESSING OFFICER HAS NOT DISCLOSED ANY NEW MATERIA LS FOR REOPENING ASSESSMENT. ASSESSMENT CANNOT BE REOPENED MERELY ON CHANGE OF O PINION, AS HAS APPARENTLY BEEN DONE IN THIS CASE. THE ASSESSING OFFICER ON BEING S ATISFIED THAT THERE WAS NO APPARENT ERROR IN COMPUTATION OF INCOME, ON THE BASIS OF EXISTING RECORDS, DROPPED THE RECTIFICATION PROCEEDINGS. IN THE ABSENCE OF ANY NEW AND/OR FRESH MATERIALS AND IN THE ABSENCE OF ANY REASON FOR FORM ATION OF BELIEF THAT EVEN OTHERWISE, INCOME HAD ESCAPED ASSESSMENT EVEN THOUG H THERE WAS NO APPARENT MISTAKE OR ERROR, THE ASSESSING OFFICER LA CKED JURISDICTION TO ISSUE THE IMPUGNED NOTICE. 53. FOR THE REASONS DISCUSSED ABOVE, THE IMPUGNED NOTIC E UNDER SECTION 148 OF THE INCOME-TAX ACT IS SET ASIDE. THE WRIT PETITION IS DISPOSED OF ACCORDINGLY. IN VIEW OF THE ABOVE DISCUSSION AS WELL AS THE DECI SIONS CITED (SUPRA) WE ARE OF THE CONSIDERED OPINION THAT THE REOPENING IS NOT SUSTAINABLE WHEN THE PROCEEDINGS U/S 154 OF THE ACT WERE PENDING ON THE SAME ISSUE. ACCORDINGLY, WE SET ASIDE THE INITIATION OF PROCEED ING U/S 147/148 OF THE ACT AND CONSEQUENTIAL REASSESSMENT ORDER. AS WE HAVE SE T ASIDE THE INITIATION OF PROCEEDING U/S 147/148 AND CONSEQUENTIAL REASSE SSMENT ORDER, THEREFORE, THE OTHER GROUNDS RAISED ON THE MERITS B ECOMES INFRUCTUOUS. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D AND REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20/02/2018. 6. KEEPING IN VIEW THE FACTS OF THE PRESENT CASE AN D THE ORDER DATED 20.02.2018 BY THE ITAT JAIPUR BENCHES AS REPRODUCED ABOVE, I AM OF THE 11 VIEW THAT THE ASSESSING OFFICER HAS REOPENED THE CA SE OF THE ASSESSEE WHEN THE PROCEEDINGS UNDER SECTION 154 OF THE I.T. ACT, 1961 WERE PENDING ON THE SAME ISSUE. THE ITAT JAIPUR BENCHES HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND SET ASIDE INITIATION OF PROCEEDING U/S 147/148 OF THE ACT AND CONSEQUENTIAL REASSESSMENT ORDER, AS A RESULT T HEREOF THE GROUNDS ON MERITS HAVE BECOME INFRUCTUOUS. 7. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF T HE PRESENT CASE, I AM OF THE VIEW THAT THE ISSUE IN DISPUTE HAS ALREADY B EEN ADJUDICATED AND DECIDED IN FAVOUR OF THE ASSESSEE BY THE ITAT JAIPU R BENCHES (SUPRA). THEREFORE, I HAVE NO OTHER ALTERNATIVE EXCEPT TO RE SPECTFULLY FOLLOWING THE ABOVE SAID ORDER AND CANCEL THE PROCEEDINGS INITIAT ED U/S 147/148 AND CONSEQUENTIAL REASSESSMENT ORDER. SINCE I HAVE CANC ELLED THE PROCEEDING INITIATED U/S 147/148 AND CONSEQUENTIAL REASSESSMEN T ORDER, THE GROUNDS RAISED ON MERIT BECOMES INFRUCTUOUS. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 03/02/2020. SD/- [H.S. S IDHU] JUDICIAL MEMBER DATE: 03/02/2020 SH COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES