J.R.K. SEA FOODS PVT. LTD., MUMBAI V. ITO-4(2)(3), MUMBAI

ITA 3284/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3723 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 02-05-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 26-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N M PORWAL
• Keywords: Reopening of assessment; Depreciation; Opportunity of being heard; Reassessment proceedings
• Section: 143(3); 142(1); 148

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI .. , ! ' ##, $ ' , % BEFORE SHRI R.S.SYAL, AM AND SHRI SANJAY GARG, JM ITA NO.3284/MUM/2011 : ASST.YEAR 2004-2005 M/S.J.R.K.SEA FOODS PRIVATE LIMITED 140-K, VACELL CROSS LANE NO.7 GAIWADI, KALBADEVI ROAD MUMBAI 400 002. PAN : AAACJ1970D. THE INCOME TAX OFFICER WARD 4(2)(3) MUMBAI. ( &' / // / APPELLANT) ) ) ) ) / VS. ( *+&'/ RESPONDENT) &' , ,, , - - - - / APPELLANT BY : SHRI N.M.PORWAL *+&' , - , - , - , - / RESPONDENT BY : SHRI MOHIT JAIN ) , .! / / / / DATE OF HEARING : 02.05.2013 /01 , .! / DATE OF PRONOUNCEMENT : 08.05.2013 '2 '2 '2 '2 / / / / O R D E R PER R.S.SYAL ( AM) : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 31.0 3.2011 IN RELATION TO THE ASSESSMENT YEAR 2004-2005. 2. THE ASSESSEE HAS RAISED THE FOLLOWING AS AN ADDI TIONAL GROUND:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN NOT APPRECIATING THAT THE REASON S RECORDED AFTER THE ISSUANCE OF NOTICE U/S 148 IS BO TH UNSIGNED AND UNDATED. 3. APART FROM THIS, ALL OTHER GROUNDS EXCEPT GROUND NO. 1 ALSO DEAL WITH THE QUESTION OF INITIATION OF REASSESSMENT PRO CEEDINGS. ITA NO.3284/MUM/2011. M.S.J.R.K.SEA FOODS PVT.LTD. 2 4. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE FILED ITS RETURN DECLARING TOTAL INCOME OF ` 11,31,250. ASSESSMENT U/S 143(3) WAS DONE ON 29.09.2006. THEREAFTER, A NOTICE U/S 14 8 WAS ISSUED ON 31.03.2009 FOR BRINGING TO CHARGE THE EXCESS CLAIM OF DEPRECIATION MADE BY THE ASSESSEE. VIDE ORDER DATED 26.10.2009, THE ASSESSING OFFICER MADE DISALLOWANCE OF DEPRECIATION OF ELECTR IC INSTALLATIONS AMOUNTING TO ` 2,79,987. THE LEARNED CIT(A) WAS NOT CONVINCED WITH THE ASSESSEES SUBMISSIONS EITHER ON REOPENING OF T HE ASSESSMENT OR ON THE QUESTION OF DISALLOWANCE OF DEPRECIATION ON MERITS. 5. WE TAKE UP THE ASSESSEES OBJECTIONS RAISED THROU GH ADDITIONAL GROUND AND OTHER GROUNDS TAKEN IN THE MEMORANDUM OF APPEAL CONCERNING THE REOPENING OF ASSESSMENT. THE MAIN GR IEVANCE IS THAT THE REASONS WERE RECORDED AFTER THE ISSUANCE OF NOT ICE U/S 148 AND THAT SUCH REASONS WERE NOT ONLY UNSIGNED BUT ALSO UNDATE D. THIS APPEAL CAME UP FOR HEARING ON AN EARLIER OCCASION ALSO, WH EN THE BENCH DIRECTED THE LEARNED DEPARTMENTAL REPRESENTATIVE TO PRODUCE RELEVANT CASE RECORDS CONCERNING THE ISSUANCE OF NOTICE AND RECORDING OF REASONS. SUCH DETAILS HAVE BEEN FILED BY THE DEPART MENT VIDE ITS PAPER BOOK DATED 22.01.2013. IT CAN BE SEEN FROM SU CH PAPER BOOK THAT THERE IS A LETTER DATED 30 TH MARCH, 2009 WRITTEN BY THE ASSESSING OFFICERS TO THE ADDL. COMMISSIONER OF INCOME-TAX, RANG 4(2), MUMBAI SENDING PROPOSAL TO REOPEN THE ASSESSMENT OF THE ASSESSEE. THIS PROPOSAL IS ACCOMPANIED BY TWO DOCUMENTS. FIRS T IS THE FORM FOR RECORDING THE REASONS FOR INITIATING PROCEEDING S U/S 148 AND FOR OBTAINING THE APPROVAL OF THE ADDL.CIT, RANGE 4(2) , DULY SIGNED BY ITA NO.3284/MUM/2011. M.S.J.R.K.SEA FOODS PVT.LTD. 3 SHRI VIVEK VERMA, THE DY. COMMISSIONER OF INCOME-TA X, CIRCLE 4(2), MUMBAI, WHOSE COLUMN NO. 10 NAMED AS - REASONS FO R THE BELIEF THAT INCOME HAS ESCAPED HAS BEEN ANSWERED AS AS PER ANNEXURE- A. SECOND DOCUMENT IS ANNEXURE-A, BEING A COPY OF THE REASONS ABOUT THE EXCESS CLAIM OF DEPRECIATION RESULTING IN TO ESCAPEMENT OF INCOME, WHICH HAS ALSO BEEN SIGNED BY SHRI VIVEK VE RMA, DCIT, CIRCLE 4(2), MUMBAI. EVEN THOUGH THERE IS NO SEPAR ATE DATE ON THESE TWO DOCUMENTS, BUT THE FACT OF THE MATTER IS THAT B OTH THESE DOCUMENTS ARE ANNEXURES TO THE AOS LETTER ADDRESSED TO THE A DDTL. CIT SEEKING PERMISSION FOR REOPENING, WHICH IS DULY SIGNED BY T HE SAME AO AND IS ALSO DATED AS 30 TH MARCH, 2009. IT IS IMPERMISSIBLE TO LOOK INTO SUCH REASONS, WHICH ARE CONTAINED IN ANNEXURE A, IN ISOLATION TO AND DE HORS THE MAIN LETTER WHICH IS DULY SIGNED AND DATED. WHE N WE READ THESE TWO DOCUMENTS IN JUXTAPOSITION TO THE MAIN LE TTER, THERE REMAINS NO DOUBT IN DRAWING A CONCLUSION THAT THE ASSESSING OFFICER RECORDED REASONS ON 30 TH MARCH, 2009. IT IS FURTHER BORNE OUT FROM RECORD T HAT THE ADDL.CIT GRANTED APPROVAL ON 31 ST MARCH, 2009 TO INITIATE THE REASSESSMENT PROCEEDINGS. IT IS ON THE RECEIPT OF A PPROVAL FROM THE ADDTL. CIT THAT THE AO ISSUED NOTICE U/S 148 ON THE SAME DATE, THAT IS, 31.03.2009. 6. THE OBJECTION OF THE LEARNED AR THAT NO S ANCTION WAS REQUIRED TO BE OBTAINED FROM THE ADDL.CIT IN THE FACTS AND C IRCUMSTANCES OF THE PRESENT CASE WHICH LED TO THE INFERENCE THAT TH E REASONS WERE PRE- DATED BY THE AO, IS IN THE REALM OF DOUBT AND SUSPI CION ENTERTAINED BY THE ASSESSEE. EXCEPT FOR A BALD ALLEGATION, THE RE IS NO MATERIAL ON ITA NO.3284/MUM/2011. M.S.J.R.K.SEA FOODS PVT.LTD. 4 RECORD TO DEMONSTRATE THAT THE TWO RESPONSIBLE AUTH ORITIES CONNIVED TO PRE-DATE THE REASONS FOR REOPENING. THE FURTHER AR GUMENT THAT THE OBTAINING OF SANCTION FROM THE ADDTL. CIT, WHICH WA S NOT REQUIRED TO BE OBTAINED CASTED DOUBT AS TO THE GENUINE OF THE R ECORDING THE REASONS BY THE AO IN TIME, IS AGAIN SANS MERITS. TH E POSITION WOULD HAVE BEEN DIFFERENT IF THE SANCTION, REQUIRED TO BE OBTAINED FROM ADDTL. CIT AS PER LAW, WOULD NOT HAVE BEEN OBTAINED BY THE AO BEFORE EMBARKING UPON REASSESSMENT. HERE IS A CONVE RSE CASE IN WHICH THE ASSESSING OFFICER, THOUGH NOT STATUTORILY REQUIRED TO OBTAIN SANCTION, STILL PROCEEDED TO OBTAIN THE SAME BEFORE INITIATING THE REASSESSMENT PROCEEDINGS. AT THE MOST, THE ACTION O F THE AO IN TAKING SUCH PERMISSION CAN BE TERMED AS SUPERFLUOUS BUT NO T TAKING AWAY THE JURISDICTION OF THE AO TO REASSESS. IN VIEW OF THE FOREGOING DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT T HERE IS NO MERIT IN THE ADDITIONAL GROUND AND SOME OTHER GROUNDS ALLEGI NG THAT THE REASONS WERE RECORDED AFTER THE ISSUANCE OF NOTICE OR WERE UNSIGNED OR UNDATED. 7. THE NEXT CONTENTION RAISED BY THE LEARNED AR ON THE QUESTION OF REOPENING IS THAT THE ASSESSING OFFICER DID NOT GIV E ADEQUATE OPPORTUNITY TO THE ASSESSEE FOR FURNISHING OBJECTIO NS TO THE REASONS RECORDED FOR ISSUANCE OF NOTICE. WE WERE SHOWN NOTIC E U/S 142(1) DATED 16.10.2001 ISSUED BY THE ACIT ALSO ENCLOSING THEREWITH THE REASONS FOR ISSUANCE OF NOTICE U/S 148 REQUIRING TH E ASSESSEE TO FURNISH NECESSARY EVIDENCE IN SUPPORT OF ITS CLAIM FOR DEDUCTION ON OR BEFORE 23.10.2009. THE LD. AR SUBMITTED THAT THIS LETTER OF THE AO ITA NO.3284/MUM/2011. M.S.J.R.K.SEA FOODS PVT.LTD. 5 ACCOMPANIED BY THE REASONS FOR REASSESSMENT WAS ACT UALLY RECEIVED BY THE ASSESSEE ON 23.10.2009, BEING THE SAME DATE BY WHICH THE ASSESSEE WAS REQUIRED TO RAISE OBJECTIONS AND FURNI SH THE ARGUMENTS ON THE MERITS OF THE CASE. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON A PERTINENT QUERY, COULD NOT INDICATE AS TO WHET HER THIS LETTER OF THE A.O. DATED 16.10.2009 WAS SERVED ON THE ASSESSEE ON ANY DATE EARLIER THAN 23.10.2009 AS CONTENDED ON BEHALF OF THE ASSES SEE. NO EVIDENCE OF SERVICE OF THIS LETTER WAS AVAILABLE IN THE FILE OF THE DEPARTMENT. IN THE BACKDROP OF SUCH FACTS, WE CAN SAFELY INFER THA T THE NOTICE DATED 16.10.2009 ALONG WITH THE REASONS RECORDED U/S 148 WAS SERVED ON THE ASSESSEE WITHIN A WEEKS TIME ON 23.10.2009. AS THE ASSESSMENT ORDER IS DATED 26.10.2009, THE ASSESSEES CONTENTIO N OF NOT GRANTING ANY EFFECTIVE OPPORTUNITY BY THE ASSESSING OFFICER TO RAISE OBJECTION AGAINST THE ISSUANCE OF NOTICE U/S 148, MERITS ACCE PTANCE. IN THE LIGHT OF JUDGMENT OF THE HONBLE SUPREME COURT IN THE CAS E OF GKN DRIVESHAFTS (INDIA) LTD. V. ITO [(2003) 259 ITR 19 (SC)] , WE SET ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO TH E FILE OF A.O. FOR GRANTING AN ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE FOR RAISING OBJECTIONS AGAINST THE REASONS FOR REOPENIN G OF THE ASSESSMENT. THEREAFTER, THE A.O. WILL DISPOSE OF TH E OBJECTIONS AND THEN IF NEED ARISES, PASS ORDER U/S 143(3) AS PER L AW. 8. IN VIEW OF OUR ABOVE FINDING, THERE IS NO NEED TO DECIDE THE GROUND TAKEN BY THE ASSESSEE ON MERITS, WHICH WILL BE CONSIDERED BY THE AO ONLY, IF NEED ARISES, AFTER ADJUDICATING ON THE OBJECTIONS OF THE ASSESSEE QUA THE INITIATION OF REASSESSMENT. ITA NO.3284/MUM/2011. M.S.J.R.K.SEA FOODS PVT.LTD. 6 9. 3 .4 5 6, 789 : . ; , . <= IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 08 TH DAY OF MAY, 2013. '2 , /01 >')4 0 , # SD/- SD/- (SANJAY GARG) (R.S.SYAL) $ ' $ ' $ ' $ ' / JUDICIAL MEMBER ! ' ! ' ! ' ! ' / ACCOUNTANT MEMBER MUMBAI ; >') DATED : 08 TH MAY, 2013. DEVDAS* '2 , *$.:? @?1. '2 , *$.:? @?1. '2 , *$.:? @?1. '2 , *$.:? @?1./ COPY OF THE ORDER FORWARDED TO : 1. &' / THE APPELLANT 2. *+&' / THE RESPONDENT. 3. A () / THE CIT, MUMBAI. 4. A / CIT(A)-10 , MUMBAI 5. ?D# *$.$) , , / DR, ITAT, MUMBAI 6. #E F / GUARD FILE. '2) '2) '2) '2) / BY ORDER, +?. *$. //TRUE COPY// 7 7 7 7/ // /< < < < ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI