Atul Ltd., Ahmedabad V. The I.T.O. WARD-1(3), Ahmedabad

ITA 3837/AHD/2002

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5836 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 05-05-2010
• Assessment Year: 1995-1996
• Appeal Filed On: 13-12-2002
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Assessee Lawyers: J P SHAH
• Keywords: Depreciation; Opportunity of being heard; Question of law; Difference of opinion; Assessment record; Change of opinion; Set aside
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : C BENCH : A HMEDABAD (BEFORE HON'BLE SHRI G.D. AGRAWAL, V.P. (AZ) & HON BLE SHRI T.K. SHARMA, J.M.) I.T.A. NO. 3837/AHD./2002 ASSESSMENT YEAR : 1995-1996 ATUL LIMITED -VS.- INCOME TAX OFFICER, WAR D-1(3), (IN THE MATTER OF ERSTWHILE CIBATUL LIMITED), AH MEDABAD AHMEDABAD (PAN : AAACC 6116 E) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI J.P. SHAH RESPONDENT BY : SHRI SHELLEY JINDAL, C IT, D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 14.11.2002 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-V, AHMEDABAD FO R THE ASSESSMENT YEAR 1995-96. 2. VARIOUS GROUNDS RAISED IN THIS APPEAL ARE AS UND ER :- (1) THE LD. COMMISSIONER OF INCOME TAX(APPEALS)-V, AHMEDABAD ERRED IN CONFIRMING THAT THE ASSESSING OFFICER HAD JURISD ICTION TO PASS THE ORDER. (2) THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) -V, AHMEDABAD ERRED IN CONFIRMING THE DISALLOWANCE OF DEPRECIATIO N IN SPITE OF THE FACT THAT THE PERSON ON WHOSE STATEMENT THE DEPRECIATION WAS WITHDRAWN WAS NOT OFFERED FOR CROSS EXAMINATION THOUGH SPECIFIC R EQUEST FOR THE SAME WAS MADE. (3) THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) -V, AHMEDABAD FURTHER ERRED IN HOLDING THAT NECESSARY PROOF WAS N OT FURNISHED SPECIALLY WHEN PURCHASE INVOICES, DELIVERY PROOFS AND LEASE R ENT RECEIVED IN RESPECT OF SAME PLANT AND MACHINERY WERE ON RECORD. (4) THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) -V, AHMEDABAD ERRED IN NOT HOLDING THAT CHANGE OF OPINION WAS THE REASON FOR REOPENING A COMPLETED ASSESSMENT. 2 ITA NO. 3837/AHD/2002 (5) ON MERITS ALSO, THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS)- V, AHMEDABAD ERRED IN NOT SETTING ASIDE ASSESSING O FFICERS ORDER WITHDRAWING THE DEPRECIATION ALREADY GRANTED, IN OR IGINAL ASSESSMENT. VIDE LETTER DATED 17.03.2009, THE ASSESSEE FILED AD DITIONAL GROUNDS OF APPEAL, WHICH ARE AS UNDER :- REASSESSMENT ORDER IS BAD BECAUSE : (1) S. 148 NOTICE WAS NOT SERVED ON THE ASSESSEE BUT WA S SERVED ON A DIFFERENT COMPANY CIBATUL LTD. (2) EVEN REASSESSMENT ORDER IS PASSED ON A DIFFERENT COMPANY AND NOT ON THE ASSESSEE AND, (3) S. 143(2) NOTICE WAS ADDRESSED TO CIBATUL LTD. AND WAS NOT SIGNED BY ASSESSING OFFICER AND, THEREFORE, IT IS A CASE OF NO NOTICE AT ALL. 3. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF A SSESSEE SHRI J.P. SHAH APPEARED AND CONTENDED THAT ALL THE AFORESAID ADDITIONAL GROUNDS RAISED INVOLVED PURE QUESTION OF LAW, THEREFORE, THESE BE ADMITTED. HE FURTHER SUBMITTED THAT IT IS WELL SETTLED LAW THAT QUESTION OF JURISDICTION CAN BE RAISED AT ANY TIME. 4. ON THE OTHER HAND, SHRI SHELLEY JINDAL, CIT, D.R . APPEARING ON BEHALF OF REVENUE VEHEMENTLY OBJECTED TO THE PLEA OF LD. COUNSEL OF T HE ASSESSEE TO ADMIT THE ADDITIONAL GROUNDS. THE LD. D.R. SUBMITTED THAT IN THE ORIGINAL MEMO OF APPEAL, THESE GROUNDS WERE NOT RAISED BEFORE THE TRIBUNAL. THIS INDICATES THAT THE ASSESSEE WAS SATISFIED BY THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ON THE ISSUE OF JURISDICTION OF ISSUANCE OF NOTICE UNDER SECTION 143(2), ETC. THEREFORE, ADDITIONAL GROUNDS NOW RAISED AFTER A LAPSE OF MORE THAN SIX YEARS MAY NOT BE ADMITTED. THE LD. D.R. ALSO RELIED ON THE PROVISION S CONTAINED IN SECTION 292B, WHICH PROVIDES THAT NO RETURN OF INCOME, ASSESSMENT, NOTICE.SHALL BE INVALID OR SHALL BE DEEMED TO BE INVALID MERELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSION IN SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDINGS IF SUCH RETURN OF INCOME, ASSESSMENT, NOTICEIS IN SUBSTANCE AND HAS EFFECT IN CONFORMITY WITH OR ACCO RDING TO THE INTENT AND PURPOSE OF THIS ACT. HE ACCORDINGLY SUBMITTED THAT THE ADDITIONAL GROUND NOW RAISED BEFORE THE TRIBUNAL FOR THE FIRST TIME BE NOT ADMITTED. 3 ITA NO. 3837/AHD/2002 5. IN THE REJOINDER, IT WAS STATED BY THE LD. COUNS EL OF THE ASSESSEE THAT THESE GROUNDS WERE ALREADY RAISED BEFORE THE LEARNED COMMISSIONER OF I NCOME TAX(APPEALS) VIDE GROUND NO. 2 OF THE ASSESSEES APPEAL. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ADJUDICATED THE SAME VIDE PARA 3.2 OF HIS ORDER. HOWEVER, FROM THE PERUSAL OF PARA 3.2 OF HIS ORDER, IT IS EVIDENT THAT HE HAS NOT PROPERLY DEALT WITH THE ISSUE OF SE RVICE OF THE NOTICE UNDER SECTION 148, WHICH WAS NOT SERVED UPON THE ASSESSEE. HE ALSO SUBMITTED THA T BEFORE THE ITAT ALSO, THE ASSESSEE HAS RAISED THE GROUND AGAINST THE RE-OPENING OF ASSESSM ENT VIDE GROUND NO. 4 OF THE ASSESSEES APPEAL. HE, THEREFORE, SUBMITTED THAT THESE GROUNDS ARE NOT, IN FACT, THE NEW GROUNDS AND SHOULD BE ADMITTED IN THE INTEREST OF JUSTICE. 6. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE HON'BLE SUPREME COURT IN THE CASE OF NAT IONAL THERMAL POWER CO. LIMITED VS.- CIT (1998) 229 ITR 383 HELD THAT TRIBUNAL IS NOT PR EVENTED FROM RAISING QUESTION OF LAW ARISING IN THE ASSESSMENT PROCEEDINGS ALTHOUGH NOT RAISED E ARLIER. ADMITTEDLY, ADDITIONAL GROUND NOW RAISED IS AN IMPORTANT QUESTION OF LAW I.E. JURISDI CTION OF ASSESSING OFFICER TO MAKE RE- ASSESSMENT AS WELL AS VALIDITY OF NOTICE ISSUED UND ER SECTION 148/ ASSESSMENT FRAMED. WE, THEREFORE, FOLLOWING THE JUDGMENT OF THE HON'BLE SU PEME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. (SUPRA), ADMIT THE ADDITIONAL GROUND RAISED BEFORE US. 7. COMING TO THE MERIT OF THE ADDITIONAL GROUND RAI SED BEFORE US, WE FIND THAT BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THE ASS ESSEE HAD RAISED THE GROUND AGAINST THE VALIDITY OF NOTICE UNDER SECTION 148, VIDE GROUND N O. 2 OF THE ASSESSEES APPEAL. THE SAME IS RE- PRODUCED BELOW :- 2. ON FACTS AND CIRCUMSTANCES OF THE CASE, THE ASS ESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS WITHOUT JURISDIC TION ON MORE THAN ONE GROUNDS AS ENUMERATED HEREIN BELOW :- (A) NOTICE ISSUED U/S. 148 DATED JULY 12, 1999 IS IN TH E NAME OF NON-EXISTENT COMPANY. (B) THE NOTICE ISSUED U/S. 148 DATED JULY 12, 1999 IS W RONGLY ADDRESSED AS C/O ARVIND MILLS LIMITED, AHMEDABAD WHEREAS THE CORRECT ADDRESS OF ERSTWHILE CIBATUL LI MITED IS POST ATUL-396 020, DIST. VALSAD. 4 ITA NO. 3837/AHD/2002 (C) RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 1 48 IS BY ATUL LIMITED WHEREAS THE ASSESSMENT ORDER IS IN THE NAME OF CIBATUL LIMITED. (D) THE ASSESSING OFFICER HAS REOPENED THE COMPLETED ASSESSMENT ON THE BASIS OF CHANGE OF OPINION ON SAM E SET OF FACTS, WHICH IS ALREADY ON RECORD. (E) THE ASSESSING OFFICER ASSUMED JURISDICTION OVER CIB ATUL LIMITED SITUATED AT POST ATUL-396 020, DIST. VALSAD WAS QUESTIONED BY THE APPELLANT COMPANY ON TERRITORIAL BASIS. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS ADJUDICATED THE ABOVE GROUND VIDE PARA 3.2 OF HIS ORDER, WHICH READS AS UNDER :- 3.2. THE FIRST AND SECOND GROUND OF APPEAL AS STAT ED ABOVE ARE INTER- LINKED AND INTER CONNECTED AND HENCE THE SAME ARE D ECIDED ON A COMBINED FINDING. I HAVE VERY CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS MADE BY THE APPELLANT AS ABOVE. IN THIS CONNECTION, ON VERIFICATION OF THE ASSESSMENT RECORDS OF THE AP PELLANT, IT IS FOUND THAT THE INFORMATION WAS SENT FROM LUDHIANA TO JCIT, RAN GE-1, AHMEDABAD VIDE LETTER NO. 13 DATED 5.4.1999 AND SECOND LETTER NO. 519 DATED 18.08.1999. AGAIN ON 4.3.2002, THE DDIT(INV.)(HQ), LUDHIANA HAD SENT THE PHOTOCOPIES OF THE INFORMATION IN THE CASE OF T HE APPELLANT. IT IS NOTICED IN THIS CASE THAT THE NOTICE UNDER SECTION 148 WAS ISSUED ON 12.7.1999, I.E. AFTER RECEIPT OF THE INFORMATION FR OM LUDHIANA. IT IS ALSO SEEN THAT REASONS ARE PROPERLY RECORDED BY THE ASSE SSING OFFICER FOR THE REOPENING OF THE ASSESSMENT ORIGINALLY PASSED UNDER SECTION 143(3) OF THE ACT ON 26.3.1998, AS THE INFORMATION WAS RECEIVED B Y THE DEPARTMENT AFTER THE COMPLETION OF THE ORIGINAL ASSESSMENT. IT IS ALSO SEEN THAT THE ASSESSING OFFICER HAS RECORDED THE REASONS FOR REOP ENING THE ASSESSMENT PROPERLY. MOREOVER, THE CASE LAWS CITED BY THE APPE LLANT ARE VERY MUCH DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN VIEW OF THESE FACTS, THE OBJECTION RAISED BY THE AP PELLANT AGAINST ERRONEOUS RECORDING OF REASONS IS REJECTED. 8. FROM THE PERUSAL OF THE ABOVE ORDER OF LEARNED C OMMISSIONER OF INCOME TAX(APPEALS), IT IS EVIDENT THAT HE HAD NOT ADJUDICATED UPON THE ASSESSEES OBJECTION THAT THE NOTICE UNDER SECTION 148 WAS NEITHER ISSUED IN THE NAME OF THE A SSESSEE NOR IT WAS SERVED UPON THE ASSESSEE. THE RETURN IN RESPONSE TO NOTICE UNDER SECTION 148 WAS ALSO FURNISHED BY SOME OTHER ASSESSEE, THEN THE ASSESSEE UNDER APPEAL. THE LEARNED COMMISS IONER OF INCOME TAX(APPEALS) HAS DEALT WITH ONLY THE VALIDITY OF THE RECORDING OF REASONS FOR RE-OPENING BY THE ASSESSING OFFICER. IN VIEW OF THE ABOVE, WE DEEM IT PROPER TO SET ASIDE T HE ORDER OF THE LEARNED COMMISSIONER OF 5 ITA NO. 3837/AHD/2002 INCOME TAX(APPEALS) AND RESTORE THE MATTER BACK TO HIS FILE WITH THE DIRECTION THAT HE WILL ADJUDICATE THE GROUND NO. 2 OF THE ASSESSEES APPEA L RAISED BEFORE HIM IN TOTALITY. THEREAFTER IF NECESSARY, HE WILL DECIDE THE REMAINING GROUNDS OF APPEAL RAISED BEFORE HIM AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH THE PAR TIES. 9. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 30.06.201 0 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 30 / 06 / 2010 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGIS TRAR, ITAT, AHMEDABAD LAHA/SR.P.S.