ACIT, Faridabad V. M/s. Gemi Motors India (P) Ltd., Faridabad

ITA 3871/DEL/2010

• Counselvise Citation: 387120114 RSA 2010
• Duration Of Justice: 1 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 29-02-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 16-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIS GILL
• Assessee Lawyers: MANEESH UPNEJA CAS
• Keywords: Reopening of assessment; Retrospective amendment; Question of law; Difference of opinion; Change of opinion
• Section: 143(3); 80HHC; 147; 148; 28; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH C BENCH C BENCH C BENCH C : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO. ITA NO. ITA NO. ITA NO.3871/DEL/2010 3871/DEL/2010 3871/DEL/2010 3871/DEL/2010 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2002 2002 2002 2002- -- -03 0303 03 ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -1, 1,1, 1, FARIDABAD FARIDABAD FARIDABAD FARIDABAD. .. . VS. VS. VS. VS. M/S GEMI MOTORS INDIA (P) LTD., M/S GEMI MOTORS INDIA (P) LTD., M/S GEMI MOTORS INDIA (P) LTD., M/S GEMI MOTORS INDIA (P) LTD., (FORMERLY KNOWN AS GE MOTORS (FORMERLY KNOWN AS GE MOTORS (FORMERLY KNOWN AS GE MOTORS (FORMERLY KNOWN AS GE MOTORS INDIA PVT.LTD.), INDIA PVT.LTD.), INDIA PVT.LTD.), INDIA PVT.LTD.), NOW KNOWN AS : NOW KNOWN AS : NOW KNOWN AS : NOW KNOWN AS : MARATHON ELECTRIC INDIA PVT.LTD., MARATHON ELECTRIC INDIA PVT.LTD., MARATHON ELECTRIC INDIA PVT.LTD., MARATHON ELECTRIC INDIA PVT.LTD., SECTOR SECTOR SECTOR SECTOR- -- -11, MODEL TOWN, 11, MODEL TOWN, 11, MODEL TOWN, 11, MODEL TOWN, FARIDABAD. FARIDABAD. FARIDABAD. FARIDABAD. PAN : AAACG5525H. PAN : AAACG5525H. PAN : AAACG5525H. PAN : AAACG5525H. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.I.S.GILL, CIT-DR. RESPONDENT BY : SHRI TARANDEEP SINGH & SHRI MANEESH UPNEJA, CAS. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 15 TH JUNE, 2010 FOR THE ASSESSMENT YEAR 2002-03. 2. THE FIRST GROUND RAISED BY THE REVENUE READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN QUASHING TH E ASSESSMENT BY HOLDING THAT THE PROCEEDINGS U/S 148 WERE INITIATED ON THE BASIS OF CHANGE OF OPINION BY THE ASSESSING OFFICER ON THE SAME SET OF FACTS AS PER THE LAW BY RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN T HE CASE OF CIT VS. BHANJI LAVJI 79 ITR 582 DISREGARDIN G THE FACT THAT THIS IS NOT A CASE OF CHANGE OF OPINION BUT TO GIVE EFFECT OF THE RETROSPECTIVE AMENDMENTS INTRODUCED B Y THE ITA-3871/DEL/2010 2 TAXATION LAWS (AMENDMENT) ACT, 2005 VIZ, INTRODUCTI ON OF SECOND, THIRD AND FOURTH PROVISOS TO SECTION 80HHC( 3) AND CLAUSES (IIID) AND (IIIE) TO SECTION 28 OF THE INCO ME TAX ACT, 1961, THE DEDUCTION U/S 80HHC ON DEPB RECEIPTS WAS NOT ALLOWABLE AND THE RATIO OF QUOTED CASE RELIED UPON BY THE LD.CIT(A) IS ENTIRELY DIFFERENT ON FACTS AS IN THE INSTANT CASE, THE PROCEEDINGS U/S 148 WERE INITIATED FOR GIVING E FFECT TO THE AMENDMENT BY THE TAXATION LAW (AMENDMENT) ACT, 2005 W.E.F. 1-4-1998 TO THE SECTION 80HHC OF THE IN COME TAX ACT, 1961. 3. THE LEARNED DR RELIED UPON THE RETROSPECTIVE AME NDMENT IN SECTION 80HHC(3) BY TAXATION LAWS (AMENDMENT) ACT, 2005 AND STATED THAT WHEN AS PER THE RETROSPECTIVE AMENDMENT , THE DEPB RECEIPT HAS BECOME TAXABLE, THERE WAS CERTAINLY ESC APEMENT OF TAXABLE INCOME BY WAY OF EXCESS ALLOWANCE OF DEDUCT ION UNDER SECTION 80HHC. HE, THEREFORE, SUBMITTED THAT THE ASSESSMEN T WAS RIGHTLY REOPENED BY THE ASSESSING OFFICER AND THE LEARNED C IT(A) WAS NOT JUSTIFIED IN QUASHING THE REOPENING OF ASSESSMENT. HE, THEREFORE, SUBMITTED THAT THE ORDER OF THE LEARNED CIT(A) SHOU LD BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTH ER HAND, STATED THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SIL INVESTMENTS LTD. 2010-TIOL-327-HC-DEL-IT. HE POINTED OUT THAT AS PE R THE GROUNDS OF APPEAL ITSELF, THE ASSESSMENT WAS REOPENED UNDER SE CTION 148 ON THE BASIS OF RETROSPECTIVE AMENDMENT IN SECTION 80HHC(3 ) BY TAXATION LAWS (AMENDMENT) ACT, 2005. HOWEVER, IN THIS CASE, ASSESSMENT WAS REOPENED AFTER MORE THAN FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND ON THESE FACTS, THE HONBLE JUR ISDICTIONAL HIGH COURT IN THE ABOVE MENTIONED CASE OF CIT VS. SIL INVESTMENTS LTD. HELD ITA-3871/DEL/2010 3 THAT EVEN AFTER THE RETROSPECTIVE AMENDMENT, THE CO MPLETED ASSESSMENT CANNOT BE REOPENED AFTER MORE THAN FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IF THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERI AL FACTS. IN THE CASE OF THE ASSESSEE, ADMITTEDLY, THE ASSESSMENT WAS REOPEN ED AFTER MORE THAN FOUR YEARS FROM THE END OF THE RELEVANT ASSESS MENT YEAR AND THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ANY MATERIAL FACT. HE, THEREFORE, SUBMITTED THAT THE O RDER OF THE LEARNED CIT(A) SHOULD BE SUSTAINED AND THE REVENUES APPEAL BE DISMISSED. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND ALSO PERUSED THE MATERIAL PLACED BEFORE US. THE ASSESSM ENT YEAR UNDER CONSIDERATION IS 2002-03. THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) VIDE ORDER DATED 30 TH MARCH, 2005. THE CASE WAS REOPENED VIDE NOTICE DATED 26.03.2009. THUS, ADMIT TEDLY, THE REOPENING WAS AFTER MORE THAN FOUR YEARS FROM THE E ND OF THE RELEVANT ASSESSMENT YEAR AND ORIGINAL ASSESSMENT WAS COMPLET ED UNDER SECTION 143(3). ON THESE FACTS, PROVISO TO SECTION 147 WOULD BE SQUARELY APPLICABLE. HONBLE JURISDICTIONAL HIGH C OURT IN THE CASE OF SIL INVESTMENTS LTD. (SUPRA) CONSIDERED THE IDENTICAL S ITUATION AND HELD AS UNDER:- 4. WE HAVE HEARD THE COUNSEL FOR THE REVENUE AND HAVE ALSO EXAMINED THE ORDERS PASSED BY THE AUTHORI TIES BELOW. IT IS CLEAR THAT FOR INVOKING THE PROVISO T O SECTION 147 BEYOND THE PERIOD OF FOUR YEARS, THERE MUST BE FAILURE ON THE PART OF THE ASSESSEE TO EITHER MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE UNDER SECTIO N 147/148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT FOR THAT ASSESSMENT YE AR. INSOFAR AS THE FILING OF THE RETURN IS CONCERNED, T HAT IS NOT IN DISPUTE AND, THEREFORE, THE FOCUS IS ENTIRELY ON WH ETHER THE ITA-3871/DEL/2010 4 ASSESSEE HAD FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. THE TRIBUNAL, ON AN EXAMINATION OF THE MATERIAL ON RECORD, CONCLUDED TH AT ALL THE RELEVANT FACTS WERE AVAILABLE ON RECORD AND THA T IT COULD NOT BE SAID THAT AT THE TIME WHEN THE ASSESSE E FILED THE RETURN, HE HAD FAILED TO DISCLOSE FULLY AND TRU LY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT BECAUSE THE AMENDMENT WHICH WAS INTRODUCED RETROSPECTIVELY WAS NOT THERE AT ALL. THE TRIBUNAL ALSO OBSERVED, AND IN O UR VIEW RIGHTLY SO, THAT THE LAW CANNOT CONTEMPLATE THE PERFORMANCE OF AN IMPOSSIBLE ACT. IT WAS NOT EXPEC TED OF THE ASSESSEE TO FORESEE OR FORECAST A FUTURE AMENDM ENT WHICH WAS TO BE BROUGHT INTO EFFECT RETROSPECTIVELY . THEREFORE, THE TRIBUNAL HAS RIGHTLY CONCLUDED THAT THE PROVISO TO SECTION 147 COULD NOT BE INVOKED MERELY BECAUSE THERE WAS AN AMENDMENT IN THE FUTURE WHICH WAS INTRODUCED RETROSPECTIVELY AND COVERED THE PERIOD I N QUESTION. THE TRIBUNAL HAS CORRECTLY APPRECIATED T HE LAW AND APPLIED THE SAME TO THE UNDISPUTED FACTS. WE S EE NO REASON TO INTERFERE WITH THE IMPUGNED ORDER AS NO SUBSTANTIAL QUESTION OF LAW ARISES FOR OUR CONSIDER ATION. HOWEVER, WE MAKE IT CLEAR THAT WE HAVE ONLY EXAMINE D THE JURISDICTIONAL ISSUE QUA VALIDITY OF THE SECTION 14 7 PROCEEDINGS AND HAVE NOT EXAMINED THE MERITS OF THE MATTER. 6. APPLYING THE RATIO OF THE ABOVE DECISION, WE FIN D THAT IN THE CASE IN APPEAL BEFORE US ALSO, THE ASSESSMENT WAS REOPEN ED ONLY ON THE BASIS OF RETROSPECTIVE AMENDMENT IN SECTION 80HHC. IN THE REASONS RECORDED, THERE IS NO FINDING THAT THERE WAS ANY FA ILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERI AL FACTS BY THE ASSESSEE. THEREFORE, ON THESE FACTS, THE DECISION OF HONBLE ITA-3871/DEL/2010 5 JURISDICTIONAL HIGH COURT WOULD BE SQUARELY APPLICA BLE. NO CONTRARY DECISION HAS BEEN BROUGHT TO OUR KNOWLEDGE. THEREF ORE, RESPECTFULLY FOLLOWING THE ABOVE DECISION OF HONBLE JURISDICTIO NAL HIGH COURT, WE UPHOLD THE ORDER OF THE LEARNED CIT(A) AND REJECT G ROUND NO.1 OF THE REVENUES APPEAL. 7. SINCE WE HAVE UPHELD THE ORDER OF THE LEARNED CI T(A) QUASHING THE REOPENING OF ASSESSMENT, THE OTHER GROUNDS OF R EVENUES APPEAL WHEREIN THE REVENUE HAS DISPUTED THE RELIEF ALLOWED BY THE CIT(A), WOULD NOT SURVIVE. ONCE THE REOPENING IS HELD TO B E INVALID, THE CONSEQUENTIAL ASSESSMENT ORDER PASSED IN PURSUANCE TO SUCH NOTICE IS QUASHED AND THE ORIGINAL ASSESSMENT ORDER IS RESTOR ED. THEREFORE, ANY ADDITION MADE IN THE ORDER OF ASSESSMENT PASSED IN CONSEQUENCE TO REOPENING OF ASSESSMENT DOES NOT SURVIVE. ACCORDIN GLY, THE OTHER GROUNDS IN THE REVENUES APPEAL DO NOT SURVIVE FOR ADJUDICATION DUE TO QUASHING OF THE IMPUGNED ASSESSMENT ORDER DATED 17 TH NOVEMBER, 2009 PASSED UNDER SECTION 143(3)/147 OF THE INCOME- TAX ACT, 1961. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 16 TH MARCH, 2012. SD/- SD/- ( (( (RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV RAJPAL YADAV) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 16.03.2012 VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR