M/s. Milano International (India) Private Limited, New Delhi V. DCIT, New Delhi

ITA 3182/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3118 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 12-04-2017
• Assessment Year: 1999-2000
• Appeal Filed On: 23-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Validity of assessment; Reason to believe
• Section: 147; 148; 2

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: E , NEW DELHI BEFORE SHRI R .K.PANDA , ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 3182/DEL/2014 A.Y. 1999 - 2000 MI L ANO INTERNATIONAL (INDIA)P.LTD. C 4, COMMUNITY CENTRE NARAINA VIHAR NEW DELHI 110 028 PAN: AAACM4920C VS . DCIT CIRCLE 6(1) NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SHRI AMITOSH MOITRA, FCA RESPONDENT BY SH. ATI Q AHMAD, SR.D.R DATE OF HEARING 26.02.2018 DATE OF PRONOUNCEMENT 28.02.2018 ORDER PER BEENA PILLAI, JUDICIAL MEMBER T HE PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER DATED 20/03/14 PASSED BY LD. CIT (A) - 9, NEW DELHI FOR ASSESSMENT YEAR 1999 - 2000 ON THE FOLLOWING GROUNDS OF APPEAL: 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSMENT ORDER PASSED ON 21.0 8 .2006 BY THE ASSESSING OFFICER FOR THE ASST. YEAR 1999 - 2000 IS ILLEGAL AND BAD IN LAW BECAUSE NO 2 NOTICE U/S 143(2) OF THE I. T. ACT, 1961 WAS EVER ISSUED AND SERVED UPON THE APPELLANT AFTER FILING THE RETURN ON 19.04.2006 UNDER PROTEST IN RESPONSE TO THE N OTICE U/S 14B DATED 31.03.2006. 2. THE ACTION OF THE LEARNED CIT(A)IX, VIDE ITS ORDER DATED 20.03.2014 UPHOLDING THE ASSESSMENT U/S 29288 OF THE INCOME TAX ACT WHICH WAS INTRODUCED W.E.F. 01.04.200B AND CONCLUDING THAT THE AMENDMENT IS A RETROSPECTIVE AND APPLICABLE FOR THE ASST. YEAR 1999 - 2000 IS FACTUALLY INCORRECT, ILLEGAL, UNWARRANTED AND BAD IN LAW. 3. THE INITIATION OF THE PROCEEDING U/S 147 OF THE I.T. ACT, 1961 AND COMPLETION THEREOF, BY AN ORDER U/S 143(3)/147 OF THE I.T. ACT, 1961 DATED 21.0 8 .20 06 IS WITHOUT SATISFYING THE MANDATORY REQUIREMENT OF CHAPTER - XIV OF THE I.T. ACT, 1961 AND AS SUCH WITHOUT LEGAL JURISDICTION AND THE ASSESSMENT MADE ON A TOTAL INCOME OF RS. 3034193/ - IS BAD IN LAW. 4. THAT THE TURNOVER OF THE APPELLANT FOR THE YEAR END ING 31.03.1999 WAS LESS THAN RS. 10,00,00,000 / - (RUPEES TEN CRORES), AS SUCH SECOND PROVISO OF SECTION 8 OHHC OF THE TAXATION LAW (AMENDMENT) ACT, 2005 W.E.F. 01.04.199B WAS APPLICABLE AND SAVED THE MANNER OF CALCULATION FOR THE DEDUCTION U/S 8 OHHC OF THE I NCOME TAX ACT, 1961. 5. THAT THE REASON TO BELIEVE ARE MISCONCEIVED, MECHANICALLY RECORDED, EXTRANEOUS TO THE STATUTORY LAW, ARE FACTUALLY INCORRECT AND MISGUIDING, THUS THE REASSESSMENT MADE IS INVALID. 6. THAT THE SOLE REASON FOR ASSUMING JURISDICTION, IS THAT, TO VERIFY THE CLAIM OF DEDUCTION U/S 8 OHHC AS PROVISION OF SECTION BOHHC HAVE BEEN AMENDED WITH RETROSPECTIVE EFFECT WILL NOT PROVIDE THE JURISDICTION U/S 147 OF THE INCOME TAX ACT, 1961 AS THE 3 TAXATION LAW (AMENDMENT) ACT, 2005 WAS NOT APPLICABLE TO THE APPELLANT. 7. THAT THE ACIT OBTAINED THE SANCTION ON WRONG INFORMATION SUPPLIED TO THE SR.AUTHORITIES AND THIS HAS VITIATED THE ASSESSMENT. 8 . THAT THE SPECIFIC AUTHORITY U/S 151 WHILE GRANTING THE PREVIOUS SANCTION FOR ISSUE OF NOTICE, IN THE FACT OF THE CASE HAS ALSO ACTED MECHANICALLY, WITHOUT PROPER APPLICATION OF MIND WHICH HAS RENDERED REASSESSMENT ORDER INVALID AND ILLEGAL. 9. THAT THE LEARNED CIT(A) HAS FURTHER ERRED BOTH IN LAW AND ON FACTS IN DIRECTING FOR THE LEVY OF INTEREST U/S 234 B OF THE INCOME TAX ACT AT RS. 1165509/ - WHICH WAS NOT LEVIABLE AT ALL IN THE FACT OF THE CASE AND THUS DESERVES TO BE DELETED AS ASSESSEE FILED THE RETURNED INCOME AT NIL AFTER THE LEGAL AND DUE CLAIM FOR DEDUCTION U/S 8 OHHC OF THE I.T. ACT, 1961 FOR WHICH HE WAS LEGALLY ENTITLED. 10. THAT THE ACTION OF THE AUTHORITY BELOW IN DENYING THE FULL CLAIM FOR DEDUCTION U/S 8 OHHC WHICH WAS BASED ON THE TAX AUDIT REPORT U/S 8 OHHC(4) OF THE INCOME TAX ACT, 1961 DA TED 02.09.1999 ACCOMPANIED WITH THE ORIGINAL RETURN. ALSO AVAILABLE IN THE RECORDS IN THE REASSESSMENT PROCEEDING. SUCH DENIAL IS ILLEGAL, UNJUST, ARBITRARY, ILLUSORY AND AGAINST THE FACT AND CIRCUMSTANCES OF THE CASE. 11. THAT THE ACTION OF THE REVENUE I N ADOPTING A TAXABLE INCOME OF RS. 3034193/ - AGAINST THE RETURNED NIL INCOME AND ACCEPTING THE ASSESSMENT U/S 143(1) OF THE INCOME TAX ACT, AND HOLDING THE REFUNDABLE AMOUNT OF RS.7S,290 / - AND DENYING THE INTEREST LEGALLY DUE AND PAYABLE ON SUCH AMOUNT I S UNJUST, ILLEGAL AND ARBITRARY. 12. THAT THE ABOVE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 4 13. APPELLANT CRAVES LEAVE TO ADD, TO MODIFY OR ALTER ANY OF THE GROUND(S) OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE CASE. 2. BRIEF FACT S OF THE CASE ARE AS UNDER . A SSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF EXPORT OF MANUFACTURED GARMENTS. ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 14 8 OF THE INCOME TAX ACT, 1961 (THE ACT) TO VERIFY THE AMENDED PROVISIONS OF SECTION 80 HHC. IN R ESPONSE TO THE NOTICE, ASSESSEE FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 19/04/06 DECLARING NIL INCOME. IT WAS OBSERVED BY LD. AO THAT ASSESSEE HAD A GROSS TOTAL INCOME OF RS.1,39,49, 1 73/ - AGAINST WHICH THE DEDUCTION OF 80 HHC WAS CLAIMED. THE ASSESSMENT WAS COMPLETED ON 21/08/06 UNDER SECTIO N 143 (3) READ WITH 147 OF THE A CT AT AN INCOME OF RS. 30, 34,193/ - WHICH INCLUDED DEDUCTION UNDER SECTION80HHC TO THE TUNE OF RS.1,08,93,330/ - AS AGAINST 100% DEDUCTION CLAIMED BY ASSESSEE AGAINST THE GRO SS TOTAL INCOME. 3. AGGRIEVED BY THE ORDER OF LD. AO ASSESSEE PREFERRED APPEAL BEFORE LD. CIT (A) WHERE IN ASSESSEE HAD CHALLENGED THE VALIDITY OF ASSESSMENT UNDER SECTION 148 OF THE A CT. IN THE MEANTIME ASSESSEE PREFERRED A W RIT P ETITION BEFORE HON BLE HIGH COURT IN WP NO. 9435/2007 WHEREIN ASSESSEE HAD CHALLENGED NON - ISSUANCE OF NOTICE UNDER SECTION 143 (2) AND SERVICE THEREUPON AFTER FILING THE RETURN ON 19/04/06 UNDER PROTEST. HON BLE HIGH COURT VIDE ITS ORDER DATED 03/12/09 G RANTED ASSESSEE THE LIBERTY TO RAISE THESE ISSUES BEFORE LD. CIT (A) AS THE ASSESSMENT BY THEN 5 HAD ALREADY BEEN COMPLETED AND APPEAL WAS PENDING BEFORE LD. CIT (A). 3.1. GROUND NO. 1, 2, 3, 4 AND 5 RAISED BY ASSESSEE BEFORE THE LD. CIT (A) WAS REGARDING VALIDITY OF ASSESSMENT UNDER SECTION 148 OF THE A CT WHICH LD. CIT (A) DEALT AS UNDER: T HUS, THE TIME LIMIT PRESCRIBED IS APPLICABLE FOR THE ISSUE OF NOTICE AND NOT SERVICE OF NOTICE AS CLAIMED BY THE APPELLANT. THE APPELLANT HAS NOT GIVEN ANY SUBMISSION O N THESE ISSUE S BEFORE ME. HENCE RESPECTFULLY FOLLOWING THE DECISION OF HON BLE ITAT THE NOTICE ISSUED UNDER SECTION 148 IS FOUND TO BE VALID AND THE GROUNDS OF APPEAL ARE ACCORDINGLY DISMISSED. 4. BEFORE US LD.AR SUBMITTED THAT ASSESSEE THEREAFTER MADE A PPLICATION UNDER RTI DATED 09/02/18 ASKING FOR VARIOUS DETAILS AS MENTIONED THEREIN. THE J OINT COMMISSIONER OF I NCOME T AX VIDE ORDER DATED 16/02/18 HAS PASSED ORDER WHEREIN IT IS MENTIONED THAT THE NOTICE UNDER SECTION 143 (2) AS PER THE RTI APPLICATION IS NOT AVAILABLE ON FILE AS ON DATE. 4.1. IT IS OBSERVED THAT LD. CIT (A) DISMISSED THE GROUNDS REGARDING VALID ITY OF ASSESSMENT ONLY ON THE BASIS THAT THERE WAS NO MATERIAL THAT WAS SUBMITTED BY ASSESSEE AT THE TIME OF HEARING. 4.2. NOW THAT ASSESSEE HAS ALREADY OBTAINED A REPLY FROM RTI APPLICATION REGARDING THE NON - AVAILABILITY OF NOTICE UNDER SECTION 143 (2) ON THE FILE, WE FIND IT NECESSARY TO SET ASIDE THE MATTER BACK TO THE FILE OF LD. CIT (A) FOR DUE VERIFICATION, WITH A DIRECTION TO LD. CIT (A) TO DECIDE THE ISSUE PER LAW ON THE BASIS OF THESE DOCUMENTS. 6 4.3. LD. DR DO NOT HAVE ANY OBJECTION IN SENDING THE ISSUE BACK TO LD.CIT (A) FOR VERIFICATION OF THE SAME. 4.4. ACCORDINGLY ASSESSEE SUCCEEDS ON THE PRELIMINARY ISSUE RAISED IN GROUND NO. 1 FOR STATISTICAL PURPOSES. AS THE ISSUE HAS BEEN SET ASIDE ON THE PRELIMINARY ISSUE RAISED TO THE FILE OF LD. CIT (A) WE DO NOT WISH TO COMMENT UPON THE MERITS OF THE ADDITION AT THIS JUNCTURE. 5. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOWED FOR STATIS TICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28.02.2018. SD/ - SD/ - (R. K.PANDA ) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28.02. 201 8 . MV COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT, DELHI BENCHES, NEW DELHI 7