M/s. Embrocia Hatcheries, Distt. Pathankot V. The Asstt. Commissioner of Income-tax, Pathankot

ITA 337/ASR/2012

• Counselvise Citation: 33720914 RSA 2012
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-07-2013
• Assessment Year: 1992-1993
• Appeal Filed On: 14-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: J S BHASIN
• Keywords: Period of limitation; Difference of opinion; Time period of passing order; Change of opinion; Reassessment proceedings
• Section: 143(3); 234B; 147; 148; 154; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO337(ASR)/2012 ASSESSMENT YEAR:1992-93 PAN :AAACE3518N M/S. EMBROCIA HATCHERIES, VS. ASSTT. COMMR. OF INCO ME TAX, V&PO KOTLI, PO JAKHOLARI, PATHANKOT. DISTT. PATHANKOT. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.J.S.BHASIN, ADVOCATE RESPONDENT BY:SH.MAHAVIR SINGH, DR DATE OF HEARING: 29/07/2013 DATE OF PRONOUNCEMENT:12/08/2013 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A), JALANDHAR, DATED 01.06.2012 FOR THE ASSESSMENT YEA R 1992-93. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN LAW A ND ON FACTS IN UPHOLDING THE VALIDITY OF PROCEEDINGS INITIATED U /S 148, CONTRARY TO THE MANDATE OF PROVISO OF SECTION 147. ITA NO.337(ASR)/2012 2 2. THAT THE LD. CIT(A), UNMINDFUL OF THE ASSESSEES PE RSPECTIVE AND SUBMISSIONS, WAS WHOLLY UNJUSTIFIED TO UPHOLD T HE VALIDITY OF THE REASSESSMENT PROCEEDINGS BY REFERRING TO SEC TION 149(1), EVEN WHEN THERE WAS NO CHALLENGE ON THAT ACCOUNT. 3. THAT DESPITE THE FACTS OF THE CASE BEING CRYSTAL QU A THE APPLICATION OF PROVISO TO SECTION 147, IMMENSELY SUPPORTED BY BINDING DECISIONS OF HONBLE JURISDICTIONAL HIGH CO URT AS ALSO THE HONBLE ITAT, AMRITSAR, THE CONTRARY VIEW TAKEN BY CIT(A) IS PATENTLY CONTEMPTUOUS AND UNMAINTAINABLE. 4. THAT CHARGING OF INTEREST U/S 234B IN THE GIVEN FAC TS OF THE CASE, HAS BEEN WRONGLY UPHELD. 5. THAT SANS ANY DIRECTION IN ASSESSMENT ORDER, ISSUE OF DEMAND NOTICE U/S 156 OUGHT TO HAVE BEEN HELD AS INVALID. 6. THAT THE ASSESSEE PRAYS TO BE ALLOWED APPROPRIATE C OST FOR HAVING BEEN PUT INTO UNDUE LITIGATION IN A PRETTY O LD MATTER. 7. THAT THE ORDER IMPUGNED IS WHOLLY AGAINST LAW AND F ACTS OF THE CASE. 2. THE BRIEF FACTS IN THE PRESENT CASE ARE THAT TH E ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 10.02. 1995 AND FURTHER RECTIFICATION WAS MADE UNDER SECTION 154 VIDE ORDER DATED 18.07.1996 AT AN INCOME OF RS.5,97,354/-. THE AO RECORDED THE REASON S ON 15.02.2000 AND ISSUED NOTICE U/S 148 DATED 08.03.2000. THE CASE WA S ATTENDED BY THE ASSESSEE AND THE ASSESSMENT WAS COMPLETED VIDE ORDE R U/S 143(3)/147 OF THE ACT ON 08.02.2002. 3. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED TH AT THE PERIOD OF FOUR YEARS HAS ELAPSED FROM THE END OF THE ASSESSMENT YE AR AND THEREFORE, EVEN IF THE LEGAL POSITION HAS BEEN REVERSED BY THE HONBLE SUPREME COURT, THE CASE CANNOT BE REOPENED AND ACCORDINGLY NOTICE ISSUED BY THE AO. IS BAD IN LAW ITA NO.337(ASR)/2012 3 AND THE ASSESSMENT IS LIABLE TO BE QUASHED. THE LD. CIT(A) REJECTED THE PLEADINGS OF THE ASSESSEE AND CONFIRMED THE ACTION OF THE A.O. 4. THE LD. COUNSEL FOR THE ASSESSEE, SH. J.S. BHASI N, ADVOCATE, INVITED OUR ATTENTION TO PROVISO OF SECTION 147 OF THE ACT THAT NO ACTION FOR MAKING ANY REASSESSMENT CAN BE TAKEN AFTER THE EXPIRY OF F OUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR , UNLESS ANY INCOME CH ARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REAS ON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB SECTION (1) OF SECTION 14 2 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR. ACCORDINGLY, HE ARGUED THAT THE ASSESSEE HAS FILED RETURN U/S 139 OF THE ACT AND HAS BEEN ASSESSED U/S 143(3) AND THE ORIGINAL ASSESSMENT IS DATED 10.02.1995 AND RESPONDED TO SEC TION 148 AS WELL. AS REGARDS THE DISCLOSURE OF MATERIAL FACTS, THERE IS NO DISPUTE THAT THE ASSESSEE HAS NOT DISCLOSED THE MATERIAL FACTS. IT WAS A CASE THAT ON THE DISCLOSED FACTS, LEGAL POSITION HAS BEEN REVERSED IN THE CASE OF CIT VS VENKATESWARA HATCHERIES (P.) LTD. REPORTED IN 237 ITR 174. ON TH AT BASIS, THE A.O. WHILE RECORDING THE REASONS WHICH IS PART OF THE ASSESSME NT ORDER HAS REOPENED THE ASSESSMENT. ALSO, THE ASSESSMENT YEAR IN THE PRESEN T CASE IS 1992-93 AND AT THE MOST, CASE COULD HAVE BEEN REOPENED UPTO THE YE AR ENDING 31 ST MARCH, ITA NO.337(ASR)/2012 4 1997 WHEREAS NOTICE U/S 148 IS DATED 08.02.2000 WH ICH IS BEYOND THE PERIOD OF LIMITATION AS PROVIDED IN PROVISO TO SECTION 14 7 OF THE ACT. THEREFORE, THE LD. COUNSEL FOR THE ASSESSEE, MR. J.S.BHASIN ARGUED THAT NO NOTICE CAN BE ISSUED ON THE CHANGE OF OPINION AND RELIED UPON THE DECISIONS OF VARIOUS COURTS OF LAW AS UNDER: I) DULI CHAND SINGHANIA VS. ACIT (2004) 269 ITR 19 2 (P&H) II) CIT VS. VEEROVERSEAS (2010) 38 DTR (P&H) 246 III) CIT VS. UPKAR INTERNATIONAL (2012) 80 CCH 107 DHHC IV) ACIT VS. BALJIT KAUR SINGHANIA, ITA NO.423(ASR)/201 0 (ITAT ASR)) 4.1. HE ALSO ARGUED THAT THE PRESENT CASE IS IDENTI CAL TO THE CASE IN THE CASE OF DCIT VS. SIMPLEX CONCRETE PILES (INDIA) LTD. REP ORTED IN (2012) 254 CTR (SC) 221, WHEREIN IT HAS BEEN HELD AS UNDER: W E SEE NO ERROR IN THE OBSERVATION MADE BY THE DIVIS ION BENCH OF THE HIGH COURT IN THE IMPUGNED JUDGMENT THAT ONCE LIMITATION PERIOD OF FOUR YEARS PROVIDED U/S 147/149(IA) OF THE INCO ME TAX ACT, 1961, ( FOR SHORT, THE ACT) EXPIRES THEN THE QUESTION OF REOPENING BY THE DEPARTMENT DOES NOT ARISE. IN ANY EVENT, AT THE R ELEVANT TIME, WHEN THE RE-OPENING BY THE DEPARTMENT DOES NOT ARISE. I N ANY EVENT, AT THE RELEVANT TIME, WHEN THE ASSESSMENT ORDER GOT COM PLETED, THE LAW AS DECLARED BY THE JURISDICTIONAL HIGH COURT, WAS TH AT THE CIVIL CONSTRUCTION WORK CARRIED OUT BY THE ASSESSEE WOUL D BE ENTITLED TO THE BENEFIT OF INCOME TAX VS. N.C. BUDHIRAJA AND CO. A ND ANOTHER REPORTED IN (1993) 204 ITR 412. THE SUBSEQUENT REV ERSAL OF THE LEGAL POSITION BY THE JUDGMENT OF THE SUPREME COURT DOES NOT AUTHORIZE THE DEPARTMENT TO REOPEN THE ASSESSMENT, WHICH STOOD C LOSED ON THE BASIS ITA NO.337(ASR)/2012 5 OF THE LAW, AS IT STOOD AT THE RELEVANT TIME. THE CIVIL APPEALS ARE, ACCORDINGLY DISMISSED. 4.2. ACCORDINGLY, HE PRAYED TO QUASH THE REASSESSMENT MA DE. 5. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF BOTH THE AUTHORITIES BELOW AND ARGUED THAT THE HONBLE SUPRE ME COURT DOES NOT MAKE LAW BUT EXPLAINS THE LAW WHICH ALREADY EXISTED. THE REFORE, THE CASE OF THE ASSESSEE, FALLS WITHIN PROVISO TO SECTION 147 OF TH E ACT AND ACCORDINGLY, HE PRAYED TO CONFIRM THE ORDER OF THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THERE IS NO DISPUTE TO THE FACT THAT THE MATTER HAS BEEN REOPENED AS PER REASONS RECORDED AVAILABLE IN THE ORDER OF THE A.O. AND THE LD. CIT(A) THAT THE POSITION OF LAW HAS BEEN REVERSED BY THE HONBL E SUPREME COURT IN THE CASE OF CIT VS VENKATESWARA HATCHERIES (P.) LTD.(SU PRA). ONLY ON THIS BASIS, THE AO HAS REOPENED THE ASSESSMENT. THE ASSESSEE HA S DECLARED ALL THE MATERIAL FACTS IN THE ORIGINAL RETURN OF INCOME. NO W THE QUESTION ARISES WHETHER ON THE BASIS OF SUBSEQUENT DECISION BY THE HONBLE SUPREME COURT, WHETHER THE DEPARTMENT CAN REOPEN THE ASSESSMENT OR NOT. ON THE IDENTICAL ISSUE, THE MATTER HAS BEEN SETTLED BY THE HONBLE S UPREME COURT IN THE CASE OF DCIT VS. SIMPLEX CONCRETE PILES (INDIA) LTD. (SU PRA), WHERE IT HAS BEEN HELD BY THE HONBLE SUPREME COURT THAT SUBSEQUENT R EVERSAL OF THE LEGAL POSITION BY THE JUDGMENT OF HONBLE SUPREME COURT D OES NOT AUTHORIZE THE ITA NO.337(ASR)/2012 6 DEPARTMENT TO REOPEN THE ASSESSMENT WHICH STOOD CLO SED ON THE BASIS OF LAW AS IT STOOD AT THE RELEVANT TIME. THEREFORE, THE AO IS NOT JUSTIFIED IN REOPENING THE ASSESSMENT. IN SUCH FACTS AND CIRCUMS TANCES, THE REASSESSMENT MADE IS BAD IN LAW AND IS DIRECTED TO BE QUASHED. T HUS, ALL THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE I N ITA NO.337(ASR)/2012 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12TH AUGUST, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 12TH AUGUST, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. EMBROCIA HATCHERIES, VPO KOTLI, P ATHANKOT. 2. THE ACIT, PATHANKOT. 3. THE CIT(A), ASR. 4. THE CIT, ASR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY