JCIT, New Delhi V. M/s. Delhi Metro Rail Corporation Ltd., New Delhi

ITA 3680/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8611 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 07-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Depreciation; Difference of opinion; Change of opinion
• Section: 143(3); 143(2); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B: NEW DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER I.T.A. NO. 3680/DEL/2017 ASSESSMENT YEAR: 2005-06 JCIT, SPECIAL RANGE-3, VS. DELHI METRO RAIL CORPORA TION LTD., NEW DELHI. 3 RD FLOOR, METRO BHAWAN, FIRE BRIGADE LANE, BARAKHAMBA ROAD, NEW DELHI. PAN: AAACD 3454A C.O. NO. 173/DEL/2017 (IN I.T.A. NO. 3680/DEL/2017) ASSESSMENT YEAR: 2005-06 DELHI METRO RAIL CORPORATION LTD., VS. JCIT, SPECIA L RANGE-3, 3 RD FLOOR, METRO BHAWAN, FIRE BRIGADE NEW DELHI. LANE, BARAKHAMBA ROAD, NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY: MS. NIDHI SRIVASTAVA, CIT/DR ASSESSEE BY: MS. INDRA BANSAL, FCA DATE OF HEARING: 15/01/2020 DATE OF PRONOUNCEMENT: 20/01/2020 ORDER PER K. NARASIMHA CHARY, JM CHALLENGING THE ORDER DATED 17/03/2017 IN APPEAL NO . 513/14-15 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-14, NEW DELHI (LD. CIT(A)), FOR ASSESSMENT YEAR 2005-06, IN THE CASE OF DELHI METRO RAIL CORPORATION LTD.(THE ASSESSEE), REVENU E PREFERRED THIS 2 APPEAL. THE ASSESSEE HAS ALSO FILED CROSS-OBJECTIO N CHALLENGING THE VALIDITY OF RE-ASSESSMENT PROCEEDINGS. 2. BRIEF FACTS OF THE CASE ARE THAT IN RESPECT OF T HE ASSESSMENT YEAR 2005-06, THE ASSESSEE FILED THE RETURN OF INCOME ON 30/10/2005 DECLARING A TOTAL LOSS OF RS.373,65,94,910/-AND BY ORDER DATE D 24/12/2007 PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (F OR SHORT THE ACT), LEARNED ASSESSING OFFICER ASSESSED THE TOTAL LOSS O F THE ASSESSEE AT RS.372,62,77,617/-AFTER ADDING BACK RS.1,03,17,293/ -ON ACCOUNT OF DEPRECIATION ON THE ASSETS NOT OWNED BY THE DELHI M ETRO RAIL CORPORATION LIMITED (DMRC). SUBSEQUENTLY NOTICE UND ER SECTION 148 OF THE ACT WAS ISSUED AND 20/3/2012 BUT THE SAME WAS N OT SERVED ON THE ASSESSEE. THE ASSESSEE SUBMITTED BEFORE THE ASSESSI NG OFFICER THAT THE RETURN FILED BY THEM FOR THE ASSESSMENT YEAR 2005-0 6 MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 14 8 OF THE ACT. BY ORDER DATED 8/3/2012, INCOME OF THE ASSESSEE WAS ASSESSED AT A LOSS OF RS.355,00,43,720/-UNDER SECTION 143(3) OF THE ACT R EAD WITH SECTION 147 OF THE ACT BY MAKING CERTAIN ADDITIONS. 3. ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A) ON SEVERAL GROUNDS CHALLENGING THE ADDITIONS. ASSESSEE ALSO PR EFERRED AN ADDITIONAL GROUND TO THE EFFECT THAT SINCE THE ASSESSEE HAS NO T BEEN SERVED BY A NOTICE UNDER SECTION 143(2) OF THE ACT, AN INCURABL E DEFECT, AND VITIATES THE ASSESSMENT PROCEEDINGS AND THE ASSESSEE PLACED RELIANCE ON THE DECISION REPORTED IN ACIT VS. HOTEL BLUE MOON (2010 ) 321 ITR 362 (SC) . 4. A REMAND REPORT WAS CALLED FOR AND THE LEARNED A SSESSING OFFICER SUBMITTED THAT THE ASSESSEE HAD NOT RAISED ANY OBJE CTION OF NON-SERVICE 3 OF NOTICE UNDER SECTION 143(2) OF THE ACT ANY TIME BEFORE THE ASSESSING OFFICER PRIOR TO OR DURING THE REASSESSMENT PROCEED INGS AND THEREFORE, THE ASSESSEE IS PRECLUDED FROM RAISING SUCH AN OBJE CTION. LEARNED ASSESSING OFFICER, HOWEVER, FURTHER STATED THAT THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME IN RESPONSE TO THE NOTICE UNDE R SECTION 148 OF THE ACT, BUT MERELY STATED THAT THE RETURN FILED FOR TH E ASSESSMENT YEAR 2005- 06 MAY BE TREATED AS A RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT AND THEREFORE, THERE WAS NO OCCASION FOR THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT. 5. HAVING CONSIDERED THE ADDITION MADE BY THE ASSES SING OFFICER TO THE EFFECT THAT NO NOTICE UNDER SECTION 143(2) OF T HE ACT WAS ISSUED PURSUANT TO THE LETTER FILED BY THE ASSESSEE STATIN G THAT THE RETURN FILED FOR ASSESSMENT YEAR 2005-06 MAY BE TREATED AS A RET URN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, BY PLACING RELIANCE ON THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF RAJ KUMAR CHAWLA & ORS. VS. ITO (2005) 94 ITD 1 (DEL)(SB), WHICH IS AL SO CONSIDERED BY DIVISION BENCH OF DELHI TRIBUNAL IN THE CASE OF ITO VS. TILA K RAJ SATIJA (ITA NO. 391/DEL/2010 ORDER DATED 14.08.2013, LD. CIT(A) R EACHED A CONCLUSION THAT FOR WANT OF NOTICE UNDER SECTION 143(2) OF THE ACT THE ASSESSMENT IS RENDERED NULL AND VOID. 6. AGGRIEVED BY SUCH FINDINGS RETURNED BY THE LD. C IT(A), REVENUE PREFERRED THIS APPEAL. ASSESSEE PREFERRED THE CROSS OBJECTIONS CHALLENGING THE REASSESSMENT UNDER SECTION 147 OF THE ACT AND S TATED THAT IT IS ONLY A CHANGE OF OPINION. 7. LD. DR PLACED RELIANCE ON THE ASSESSMENT ORDER. LD. AR PLACED RELIANCE ON THE DECISIONS OF THE HONBLE DELHI HIGH COURT IN THE CASES OF 4 PCIT VS. SH. JAI SHIV SHANKAR TRADERS PRIVATE LIMIT ED (2016) 383 ITR 448 (DELHI) AND PCIT VS. SILVER LINE (2016) 383 ITR 455 (DELHI) FOR THE PRINCIPLE THAT SUBSEQUENT TO THE STATEMENT OF THE ASSESSEE IN RESPONSE TO NOTICE U/S. 148 TO TREAT THE ORIGINAL RETURN FILED AS A RE TURN FILED PURSUANT TO A NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSING OFFICERS FAILURE TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT INVALI DATES THE ORDER OF REASSESSMENT. 8. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. THOUGH THE ASSESSEE CLAIMS TO HAVE NOT RECEIVED THE NOTICE UNDER SECTION 148 OF THE ACT, THEY HAVE FILE D A LETTER DATED 4/12/2012 STATING THAT THE RETURN FILED FOR THE ASS ESSMENT YEAR 2005-06 MAY BE TREATED AS RETURN FILED IN RESPONSE TO NOTIC E UNDER SECTION 148 OF THE ACT. WHILE ADMITTING THIS FACT, IN THE REMAND R EPORT, LEARNED ASSESSING OFFICER STATED THAT SINCE NO FRESH RETURN OF INCOME WAS FILED IN RESPONSE TO THE NOTICE UNDER SECTION 148 OF THE ACT , THERE WAS NO OCCASION FOR THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT. IT, THEREFORE, GOES THAT SUBSEQUENT TO THE STATEMENT OF THE ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION 14 8 OF THE ACT THAT THE ORIGINAL RETURN MAY BE TREATED AS A RETURN IN RESPO NSE TO NOTICE UNDER SECTION 148 OF THE ACT, THERE WAS NO NOTICE UNDER S ECTION 143(2) OF THE ACT. 9. THIS FACT SITUATION IS SQUARELY COVERED BY THE A DDITION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF JA I SHIV SHANKAR TRADERS PRIVATE LIMITED (SUPRA). FURTHER THE LD. CIT(A) PLA CED RELIANCE ON THE DECISION OF THE IN THE CASE OF TILAK RAJ SATIJA (S UPRA) WHICH, WHILE PLACING RELIANCE ON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF ALPINE 5 ELECTRONICS ASIA PRIVATE LIMITED VS. DCIT 341 ITR 2 47, LAID DOWN THAT IN VIEW OF THE LEGAL FICTION CREATED BY SECTION 148 OF THE ACT THAT A RETURN FILED UNDER THAT SECTION IS TO BE TREATED AS ONE UN DER SECTION 139, PROVISO TO SECTION 143(2) OF THE ACT ALSO APPLIES TO A RETU RN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT AND NO ASSESSME NT CAN BE MADE, IF THE NOTICE UNDER SECTION 143(2) OF THE ACT IS NOT S ERVED WITHIN THE TIME AS PRESCRIBED BY THE PROVISO TO SECTION 143(2) OF THE ACT. 10. IN VIEW OF THIS SETTLED POSITION OF LAW, WE DO NOT FIND ANYTHING ILLEGAL OR IRREGULAR IN THE FINDINGS RETURNED BY TH E LD. CIT(A) IN THE IMPUGNED ORDER. WE THEREFORE, WHILE UPHOLDING THE I MPUGNED ORDER, FIND THE GROUNDS OF APPEAL OF THE REVENUE AS DEVOID OF M ERITS AND ARE LIABLE TO BE DISMISSED. IN VIEW OF OUR FINDING IN THE REVE NUES APPEAL, THE CROSS- OBJECTION PREFERRED BY THE ASSESSEE BECOMES INFRUCT UOUS AND IS ALSO LIABLE TO BE DISMISSED. 11. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE A ND THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2020. SD/- SD/- (PRASHANT MAHARISHI) (K.NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20/01/2020 . AKS