M/s Aman Gold Plaza, Puttur V. ITO, Puttur

ITA 4/BANG/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0189 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 05-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENUKA DEVI JT
• Assessee Lawyers: VANAJA
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC A BENCH : BANGALORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NOS.4, 5, 6 & 8/BANG/2015 ASSESSMENT YEARS : 2006-07 & 2008-09 M/S. AMAN GOLD PLAZA, J.M. BUILDING, MAIN ROAD, PUTTUR 574 201. PAN: AAKFA 8963C VS. THE INCOME TAX OFFICER, WARD 1, PUTTUR. APPELLANT RESPONDENT APPELLANT BY : MS. VANAJA, ADVOCATE & SHRI SRINIVAS KAMATH, CA RESPONDENT BY : MS. RENUKA DEVI, JT. CIT(DR) DATE OF HEARING : 18.07.2016 DATE OF PRONOUNCEMENT : 27.07.2016 O R D E R THESE FOUR APPEALS BY THE ASSESSEE ARE DIRECTED A GAINST THE RESPECTIVE ORDERS OF THE CIT(APPEALS) ARISING FROM THE REASSESSMENT ORDER FOR THE AYS 2006-07 AND 2008-09 AND CONSEQUENTIAL P ENALTY U/S. 271A & 271B B FOR THE AY 2006-07. 2. FIRST THE APPEALS IN ITA NOS. 4 & 8/BANG/2015 A RISING AGAINST THE REASSESSMENT ORDER ARE TAKEN UP. THE ASSESSEE HAS RAISED VARIOUS GROUNDS IN THESE APPEALS, HOWEVER, AT THE TIME OF H EARING, THE ASSESSEE HAS ALSO FILED AN ADDITIONAL GROUND, WHICH READS AS UNDER:- ITA NOS.4 TO 6 & 8/BANG/2015 PAGE 2 OF 6 ON THE FACTS AND CIRCUMSTANCES OF CASE, REASONS R ECORDED U/S. 148 OF THE ACT IS NOT FURNISHED AND IS NOT ACCORDIN G TO THE PROVISIONS OF THE ACT AND THEREFORE ASSESSMENT ORDE R IS INVALID AND IS LIABLE TO BE QUASHED. 3. I HAVE HEARD THE LD. AR AS WELL AS THE LD. DR AN D CONSIDERED THE RELEVANT MATERIAL ON RECORD ON THE ISSUE OF ADMISSI ON OF ADDITIONAL GROUND. AS IT IS CLEAR FROM THE ISSUE RAISED IN THE ADDITIO NAL GROUND THAT THE ASSESSEE HAS CHALLENGED THE VALIDITY OF SECTION 148 NOTICE ISSUED BY THE AO AND NON-FURNISHING OF THE REASONS RECORDED BY TH E AO, DESPITE A SPECIFIC REQUEST MADE BY THE ASSESSEE. 4. SINCE THE ISSUE IN THE ADDITIONAL GROUND IS PURE LY LEGAL IN NATURE AND GOES TO THE ROOT OF THE MATTER, THEREFORE I FIND TH AT THIS ISSUE DOES NOT REQUIRE ANY INVESTIGATION OF NEW FACTS OR THE EXIST ING FACTS ON RECORD. ACCORDINGLY, IN VIEW OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. V. CIT, 229 ITR 383 (SC) , THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ADMITTE D FOR ADJUDICATION. 5. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT DU RING THE PENDENCY OF THE APPEALS BEFORE THE CIT(APPEALS), THE ASSESSE E VIDE ITS LETTER DATED 9.12.2013 HAS REQUESTED THE AO TO FURNISH THE REASO NS RECORDED FOR INITIATING PROCEEDINGS U/S. 148 OF THE ACT. THE LD . AR OF THE ASSESSEE HAS SUBMITTED THAT TILL DATE THE AO HAS NOT FURNISHED T HE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT AND THEREFORE, THE ASSE SSEE HAS NOT BEEN GIVEN AN OPPORTUNITY TO RAISE ITS OBJECTION AGAINST THE NOTICE ISSUED U/S. ITA NOS.4 TO 6 & 8/BANG/2015 PAGE 3 OF 6 148. THUS, THE LD. AR OF THE ASSESSEE HAS CONTENDE D THAT THE REASSESSMENT FOR THESE TWO ASSESSMENT YEARS IS NOT SUSTAINABLE IN LAW, AS THE AO HAS NOT FURNISHED THE REASONS RECORDED FOR R EOPENING OF THE ASSESSMENT OF THE ASSESSEE. 6. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE ASSESSEE NEVER RAISED ANY ISSUE OF VALIDITY OF REOPENING EIT HER BEFORE THE AO OR BEFORE THE CIT(APPEALS). THE ASSESSEE HAS FOR THE FIRST TIME RAISED THIS ISSUE BEFORE THIS TRIBUNAL AND THAT TOO BY WAY OF T HIS ADDITIONAL GROUND, THEREFORE, WHEN THE ASSESSEE HAS NOT RAISED ANY OBJ ECTION AGAINST THE VALIDITY OF THE SECTION 148 NOTICE AS WELL AS REASS ESSMENT, IT CANNOT BE PERMITTED TO RAISE SUCH AN ISSUE AT THIS STAGE. FU RTHER, AS THIS ISSUE IS NOT EMANATING FROM THE ORDERS OF THE AUTHORITIES BELOW, THEREFORE IT CANNOT BE ADJUDICATED AT THIS STAGE. 7. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD, I FIND THAT THE ASSESSEE REQUES TED FOR SUPPLY OF REASONS RECORDED VIDE LETTER DATED 9.12.2013, HOWEVER, IT H AS BEEN STATED AT BAR BY THE LD. AR FOR THE ASSESSEE THAT TILL DATE, THE AO HAS NOT SUPPLIED THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT. THEREFORE, THE ASSESSEE WAS NOT GIVEN AN OPPORTUNITY TO RAISE OBJE CTION AGAINST THE NOTICE ISSUED U/S. 148 AS WELL AS CONSEQUENTIAL VALIDITY O F THE REASSESSMENT. THOUGH THE ASSESSEE DID NOT RAISE THE VALIDITY OF N OTICE U/S. 148, HOWEVER, I FIND THAT PRIOR TO 9.12.2013 THE ASSESSEE DID NOT EVEN REQUEST THE AO FOR ITA NOS.4 TO 6 & 8/BANG/2015 PAGE 4 OF 6 FURNISHING OF THE REASONS RECORDED FOR REOPENING, T HEREFORE, THE AUTHORITIES BELOW HAD NO OCCASION TO CONSIDER THE ISSUE OF VALI DITY OF NOTICE ISSUED U/S. 148 AND CONSEQUENTIAL VALIDITY OF THE REASSESSMENT. SINCE THIS ISSUE IS PURELY LEGAL IN NATURE AND GOES TO THE ROOT OF THE MATTER, THEREFORE, ONCE THE ASSESSEE REQUESTED FOR SUPPLY OF REASONS, THE AO IS DUTY BOUND TO FURNISH THE SAME. AS THE REASONS HAVE NOT BEEN FURNISHED T O THE ASSESSEE, THEREFORE THE ASSESSEE WAS DEPRIVED FROM RAISING TH E ISSUE OF VALIDITY OF NOTICE U/S. 148. IT IS SETTLED PROPOSITION OF LAW AS LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF G.K.N. DRIVESHAFTS (INDIA) LTD. V. ITO, 259 ITR 19 (SC) , THAT THE AO IS DUTY BOUND TO SUPPLY THE REASONS R ECORDED FOR REOPENING OF THE ASSESSMENT BY ISSUING A NOTICE U/S . 148 OF THE ACT WHICH WAS SOUGHT FOR BY THE ASSESSEE. IT IS ALSO SETTLED PROPOSITION OF LAW THAT AFTER THE REASONS SUPPLIED BY THE AO, THE ASSESSEE HAS RAISED OBJECTIONS AGAINST THE NOTICE U/S. 148, AND THE AO IS REQUIRE D TO FIRST DECIDE THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE NOTIC E ISSUED U/S. 148 AND ONLY AFTER DISPOSING OF THE OBJECTIONS RAISED BY TH E ASSESSEE AGAINST THE NOTICE U/S. 148, THE AO CAN PROCEED TO COMPLETE THE REASSESSMENT U/S. 147 OF THE ACT. THEREFORE, IT IS A MANDATORY REQUIREME NT THAT THE OBJECTIONS RAISED BY THE ASSESSEE ARE TO BE DISPOSED OF FIRST AND THEREAFTER THE ASSESSMENT/REASSESSMENT HAS TO BE COMPLETED BY THE AO. 8. IN THE CASE IN HAND, SINCE THE REASONS HAVE NOT BEEN SUPPLIED TO THE ASSESSEE TILL DATE, THEREFORE THE ASSESSING OFFICER IS DIRECTED TO SUPPLY THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT FO R THE AYS 2006-07 ITA NOS.4 TO 6 & 8/BANG/2015 PAGE 5 OF 6 AND 2008-09 AND AFTER RECEIVING THE REASONS SUPPLIE D BY THE AO, THE ASSESSEE IS REQUIRED TO FILE ITS OBJECTIONS AGAINST THE NOTICE U/S. 148 WITHIN A PERIOD OF ONE MONTH. THE AO IS THEREFORE REQUIRE D TO FIRST DISPOSE OF THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE NOTIC E U/S. 148 AND ONLY AFTER DISPOSING OF THE OBJECTIONS OF THE ASSESSEE ON THE REASONS RECORDED BY A SPEAKING ORDER, THE AO CAN PROCEED TO COMPLETE THE ASSESSMENT/ REASSESSMENT. ACCORDINGLY, IN THE FACTS AND CIRCUM STANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW FOR THESE TWO ASSESSMENT YEARS ARE SET ASIDE TO THE REC ORD OF THE ASSESSING OFFICER FOR FIRST DISPOSING OF THE OBJECTIONS TO BE RAISED BY THE ASSESSEE ON RECEIPT OF THE REASONS RECORDED BY THE AO FOR REOPE NING OF THE ASSESSMENTS AND THEN COMPLETE THE ASSESSMENT/REASSE SSMENT. 9. ITA NOS.6 & 7/BANG/2015 ARE APPEALS ARISING FROM THE LEVY OF INTEREST U/S. 271B AND 271A RESPECTIVELY FOR THE AY 2006-07. I HAVE HEARD THE LD. AR AS WELL AS THE LD. DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. SINCE THE PENALTY U/S. 271A/271B ARE CONSE QUENTIAL TO THE REASSESSMENT FRAMED BY THE AO AND IN VIEW OF THE AS SESSMENTS FOR THESE TWO ASSESSMENT YEARS SET ASIDE TO THE RECORD OF THE AO, THE MATTER OF LEVY OF PENALTY BEING CONSEQUENTIAL IN NATURE, THESE APP EALS ARE ALSO SET ASIDE TO THE RECORD OF THE AO FOR TAKING PROPER STEPS AS PER THE OUTCOME OF THE SET ASIDE PROCEEDINGS. ITA NOS.4 TO 6 & 8/BANG/2015 PAGE 6 OF 6 10. IN THE RESULT, ALL THE FOUR APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF JULY, 2016. SD/- (VIJYA PAL RAO ) JUDICIAL MEMBER BANGALORE, DATED, THE 27 TH JULY, 2016. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.