ITO 25(2)(3), MUMBAI V. SHAILESH S. SHAH, MUMBAI

ITA 3660/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1881 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 23-01-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 06-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S D SRIVASTAVA
• Assessee Lawyers: JIGNESH P SHAH
• Keywords: Reopening of assessment; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 80IB; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 3660/MUM/2011 (ASSESSMENT YEAR: 2003-04) INCOME-TAX OFFICER 25(2)(3), ROOM NO. 105, 1 ST FLOOR, C-11, PRATYAKSHKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI 400 020 VS SHRI SHAILESH S. SHAH, B-61 & 63, SHANTIVAN, NEAR CLUB AQUIRA, DEVIDAS LANE, BORIVALI (W), MUMBAI -400 092 PAN AMKPS 8718 F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.D. SRIVASTAVA RESPONDENT BY : SHRI JIGNESH P. SHAH DATE OF HEARING: 23.01.2013 DATE OF PRONOUNCEMENT: 30.01.2013 O R D E R PER VIVEK VARMA, JM: THE INSTANT APPEAL IS FILED BY THE DEPARTMENT AGAINST THE ORDER OF CIT(A)-35, MUMBAI, DATED 28.02.2011, WHEREIN, THE FOLLOWING GRO UNDS HAVE BEEN TAKEN : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE LD. CIT(A) ERRED IN CANCELING THE REOPENED ASSESSMENT P ROCEEDINGS AND HOLDING THAT THERE WAS NO VALID GROUND FOR REOPENIN G OF ASSESSMENT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, AND IN THE LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 2, 12,18,869/- MADE BY THE AO ON ACCOUNT OF DISALLOWANCE U/S 80IB OF THE I NCOME-TAX ACT INSPITE OF THE FACT THAT THE ASSESSEE FAILED TO FUL FILL THE CONDITIONS LAID DOWN THEREIN. 2. GROUNDS NO. I & II ARE INTERLINKED, I.E. ASSESSMENT REOPENE D ON THE FACTS TAKEN INTO CONSIDERATION. SHRI SHAILESH S. SHAH ITA NO. 3660/MUM/2011 2 3. THE FACTS ARE THAT THE REGULAR ASSESSMENT WAS FR AMED U/S 143(3) ON 31.05.2005. THE AO FOUND THAT ASSESSMENT FOR ASSESS MENT YEAR 2004-05 WAS COMPLETED U/S. 147 READ WITH 143(3) ON 31.12.2009. PICKING UP THE FACTS WITH REGARD TO THE CLAIM OF DEDUCTION U/S 80IB(10), ON WHICH THE SUBSEQUENT YEARS PROCEEDINGS WERE REOPENED, AO, ISSUED NOTICE U/S 148 ON 30.03.2010 AND REOPENED THE PROCEEDINGS FOR THE INSTANT YEAR, AFTER SEEKING APPROVAL FROM THE CIT. 4. IN THE REASSESSMENT PROCEEDINGS, THE ASSESSEE CH ALLENGED THE VALIDITY OF REOPENING OF THE ASSESSMENT, AS WELL AS THE PROP OSED DENIAL OF DEDUCTION U/S 80IB(10), WHICH WAS ULTIMATELY DENIED IN THE RE ASSESSMENT PROCEEDINGS. 5. THE ASSESSEE APPROACHED THE CIT(A) ON BOTH THE I SSUES, I.E. LEGAL AS WELL AS ON MERITS. 6. THE CIT(A), FIRST HELD THAT THE REOPENING WAS BA D AND THEN ON MERITS ALSO, REVERSED THE FINDINGS OF THE AO. 7. AGAINST THIS ORDER, THE DEPARTMENT IS IN APPEAL. 8. BEFORE US, THE DR RELIED ON THE ORDER OF THE AO AND PLEADED THAT THE ORDER OF THE AO SHOULD BE RESTORED. 9. THE AR, ON THE OTHER HAND, SUBMITTED THAT NOT ON LY THE CIT(A) GAVE CLEAR FINDINGS ON BOTH THE ASPECTS OF APPEAL, BUT I N SUBSEQUENT YEAR, THE COORDINATE BENCH AT MUMBAI IN ITA NO. 3629/MUM/2011 SEIZED WITH ASSESSMENT YEAR 2004-05 ON THE IDENTICAL ISSUE AND HAVE HELD THAT THE REOPENING WAS BAD, WHEREIN IT WAS HELD, THE CONDITION FOR COMPLETING SUCH CONSTRUCTION ON OR BEFORE 31.3.2008 WAS NOT THERE WHICH MEANS THAT THE CONDITIONS HAVE BEEN BROUGHT ON STATUTE W.E.F. 1.4.2005 PERTAINING TO A.Y. 2005-06. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF BRAHMA ASS OCIATES [SUPRA] HAS HELD THAT THE AMENDMENT TO SEC. 80IB(10) IS PROSPEC TIVE AND NOT RETROSPECTIVE. WE ALSO FIND THAT THE ORIGINAL ASSE SSMENT WAS COMPLETED ON 10.2.2006 WHICH MEANS THAT ALL THESE AMENDMENTS WERE BEFORE THE AO WHEN HE WAS FINALIZING THE ASSESSMENT FOR THE YE AR UNDER CONSIDERATION WHICH ALSO MEANS THAT THE AO MUST HAV E DULY CONSIDERED THE AMENDMENTS BROUGHT IN THE PROVISIONS OF SEC. 80 IB(10). WE AGREE WITH THE LD. CIT(A) THAT NO NEW MATERIAL HAS BEEN B ROUGHT ON RECORD BY THE AO WHICH WOULD JUSTIFY THE REOPENING U/S. 147 OF THE ACT. THIS IS A SHRI SHAILESH S. SHAH ITA NO. 3660/MUM/2011 3 CLEAR CASE OF CHANGE OF OPINION WHICH CANNOT BE MAD E A BASIS FOR REOPENING OF THE ASSESSMENT IN THE ABSENCE OF ANY T ANGIBLE MATERIAL BROUGHT ON RECORD. FOR THIS PROPOSITION, WE DRAW SU PPORT FROM THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F CIT VS KELVINATOR OF INDIA LTD. 320 ITR 561. CONSIDERING ALL THE FACT S AND CIRCUMSTANCES AND THE LEGAL POSITION, WE DO NOT FIND ANY REASON T O TINKER WITH THE FINDINGS OF LD. CIT(A). WE ACCORDINGLY CONFIRM THAT REOPENING OF THE ASSESSMENT IS BAD IN LAW. 10. THE AR FURTHER POINTED OUT THAT IN THE PRE AMENDMEN T PERIOD, CERTIFICATE OF COMPLETION WAS NOT REQUIRED, WHICH HAS BEEN R ELIED UPON BY THE AO SO HEAVILY FOR REOPENING THE ASSESSMENT. HE A LSO POINTED OUT THAT THE REOPENING WAS INITIATED MUCH AFTER COMPLETION OF 4 YEARS. 11. ON GOING THROUGH THE ENTIRE SEQUENCE OF EVENTS WIT H REGARD TO LEGALITY OF REOPENING OF ASSESSMENT FRAMED UNDER SECTION 14 3(3) ON THE FACTS THAT HAVE ALREADY BEEN EXAMINED BY THE AO IN R EGULAR ASSESSMENT AND THEN RESORTING TO REASSESSMENT, WITHOUT ANY COGENT MATERIAL HAVING BROUGHT ON RECORD, WE CONCUR WITH THE FIND INGS OF THE CIT(A). OUR DECISION TO SUSTAIN THE ORDER OF CIT(A) ALSO GET STRENGTH FROM THE FACT THAT THE ISSUE IS COVERED IN THE ASSESSEES OWN CASE IN THE SUBSEQUENT YEAR ON IDENTICAL LEGAL POSITION, FACTS AND CIRCU MSTANCES BY THE COORDINATE BENCH OF THE ITAT, MUMBAI. 12. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENC H IN THE ASSESSEES OWN CASE, WE DISMISS THE APPEAL FILED BY TH E DEPARTMENT. 13. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 30 TH JANUARY, 2013. SD/- (D. KARUNAKARA RAO) ACCOUTANT MEMBER SD/- (VIVEK VARMA) JUDICIAL MEMBER MUMBAI, DATE: 30 TH JANUARY, 2013 SHRI SHAILESH S. SHAH ITA NO. 3660/MUM/2011 4 COPY TO : 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)- 35 , MUMBAI. 4) THE CIT 25, MUMBAI, 5) THE D.R. J BENCH, MUMBAI. 6) COPY TO GUARD FILE. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN