Shri Kantilal Ranchhodji Patel, Bilimora V. The Income tax Officer,Ward-2, Navsari

ITA 3116/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5885 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-05-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 17-07-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H P MEENA; SIDDHARTHA MUKHERJEE CIT D
• Assessee Lawyers: MITESH M MOD I
• Keywords: Reopening of assessment; Principle of natural justice; Reassessment proceedings
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : D BENCH : A HMEDABAD CAMP AT SURAT (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HON'BLE SH RI D.C. AGRAWAL , A.M.) I.T.A. NOS. 3115 & 3116/AHD./2007 ASSESSMENT YEARS : 2000-2001 TO 2001-2002 SHRI KANTILAL RANCHHODJI PATEL, BILLIMORE -VS.- INCOME TAX OFFICER, WARD-2, VAPI (PAN : ABJPP 2729 F) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MITESH M. MODI RESPONDENT BY : S/ SHRI H.P. MEENA, SR. D .R. & SIDDHARTHA MUKHERJEE, CIT, D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THESE TWO APPEALS FILED BY THE ASSESSEE ARE AGAINS T TWO SEPARATE ORDERS BOTH DATED 06.03.2007 OF LEARNED COMMISSIONER OF INCOME TAX(AP PEALS), VALSAD FOR THE ASSESSMENT YEARS 2000-01 AND 2001-02. BOTH THESE APPEALS WERE HEARD ON THE SAME DATE, ARGUED BY COMMON LD. REPRESENTATIVE, INVOLVED COMMON ISSUES, THEREFORE, THESE ARE DECIDED BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. GROUND NO. 2, COMMON TO BOTH THE APPEALS, READS AS UNDER :- THE L. CIT(APPEALS), VALSAD OUGHT TO HAVE FOUND TH AT THE ITO, WARD-2, NAVSARI HAS FAILED TO OBSERVE THE PRINCIPLES OF NAT URAL JUSTICE IN AS MUCH AS HE DID NOT SUPPLY THE REASONS FOR REOPENING THE CAS E U/S. 147 OF THE ACT AND HENCE, THE WHOLE ASSESSMENT IS ARBITRARY, BAD IN LA W AND LIABLE TO BE QUASHED. 3. IN RESPECT OF THE AFORESAID GROUND OF APPEALS, S HRI MITESH M. MODI, LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT WHILE ISSU ING NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT DATED 17.03.2006, THE ASSESSING OFFICER HAS NOT SERVED THE REASONS IF ANY RECORDED FOR ASSUMING JURISDICTION TO REOPEN THE CASE OF BOTH TH E ASSESSMENT YEARS UNDER APPEAL. THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT DESP ITE REQUESTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO PROVIDE REASONS FOR REOPENING OF CAS E, IF ANY, RECORDED BY HIM, THESE WERE NOT 2 ITA NOS .3115-3116/AHD/2007 PROVIDED AND THUS, THE WHOLE ASSESSMENT ORDER IS IN CONTRAVENTION OF THE PROVISIONS OF LAW AND IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE, THE REFORE, LIABLE TO BE QUASHED. IN SUPPORT OF THIS, RELIANCE IS PLACED ON THE FOLLOWING DECISIONS :- (I) GKN DRIVESHAFTS (INDIA) LTD. VS.- ITO & OTHE RS (2003) 259 ITR 19 (SC); (II) MITHLESH KUMAR TRIPATHI VS.- CIT (2005) 149 TAXMAN 692 (ALL.) 4. ON THE OTHER HAND, SHRI H.P. MEENA, SR. D.R. APP EARING ON BEFORE THE REVENUE CONTENDED THAT FROM THE IMPUGNED ORDERS OF LEARNED COMMISSION ER OF INCOME TAX(APPEALS), IT IS CLEAR THAT REOPENING WAS NOT CHALLENGED BEFORE THE LEARNED COM MISSIONER OF INCOME TAX(APPEALS). THEREFORE, GROUND CHALLENGING THE REOPENING OF ASSE SSMENT IS NOT ARISING FROM THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS). AS AGA INST THIS, THE LD. COUNSEL OF THE ASSESSEE CONTENDED THAT THIS BEING A LEGAL GROUND, THE ASSES SEE CAN TAKE THE SAME FOR THE FIRST TIME BEFORE THE TRIBUNAL. 5. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS.- ITO & OTHERS (2003) 259 ITR 19 (SC) HELD THAT WHEN A NOTICE UNDER SECTION 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 ASSESSING OFF ICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF REASONS, THE NOTICEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOS E OF THE SAME BY PASSING A SPEAKING ORDER. IN THE INSTANT CASE, AS THE REASONS HAVE BEEN DISCLOSE D IN THESE PROCEEDINGS, THE ASSESSING OFFICER HAS TO DISPOSE OF THE OBJECTIONS, IF FILED, BY PASS ING A SPEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESSMENT IN RESPECT OF THE ABOVESAID FIVE ASSESSM ENT YEARS. THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF RAMILABEN RATILAL SHAH VS.- CIT [20 06] 282 ITR 176 (GUJ.) HELD THAT SINCE THE CHALLENGE TO REASSESSMENT PROCEEDINGS BEFORE THE TR IBUNAL WAS ON ENTIRELY DIFFERENT GROUNDS AND HAD NOTHING TO DO WITH PENDENCY OF THE ORIGINAL RET URN, THE ASSESSEE COULD AGITATE THE POINT REGARDING REOPENING OF THE ASSESSMENT UNDER SECTION 147(A) OF THE ACT AS THERE COULD BE NO WAIVER OF MANDATORY CONDITION RELATING TO JURISDICT ION. THEREFORE, THE MERE FACT THAT BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THE ASS ESSEE HAS NOT RAISED/ AGITATED THE ISSUE REGARDING REOPENING OF ASSESSMENT, THE ASSESSEE IS NOT PREVENTED TO RAISE THE SAID ISSUE FOR THE 3 ITA NOS .3115-3116/AHD/2007 FIRST TIME BEFORE THE TRIBUNAL. THEREFORE, KEEPING IN VIEW THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. ( SUPRA), WE SET ASIDE THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AND RESTORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION THAT ASSESSING OFFICER S HOULD FURNISH TO THE ASSESSEE THE REASONS RECORDED BEFORE ISSUING NOTICE UNDER SECTION 148 FO R BOTH THE ASSESSMENT YEARS, THEREAFTER THE ASSESSEE SHALL FURNISH THE OBJECTIONS. THE ASSESSIN G OFFICER WILL DISPOSE OF THE OBJECTIONS AND THEREAFTER IF REQUIRED WILL FRAME THE ASSESSMENT FO R BOTH THE ASSESSMENT YEARS IN ACCORDANCE WITH LAW AS LAID DOWN BY THE HON'BLE SUPREME COURT IN TH E CASE OF GKN DRIVESHAFTS (INDIA) LTD. (SUPRA). 6. IN THE RESULT, FOR STATISTICAL PURPOSES, BOTH TH E APPEALS FILED BY THE ASSESSEE ARE TREATED AS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 18.06.201 0 SD/- SD/- (D.C. AGRAWAL) (T.K. SHARMA ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18 / 06 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.