Shri Divyesh R. Majithiya, RAJKOT-GUJARAT V. The Assistant Commissioner of Income Tax, Circle-4, RAJKOT-GUJARAT

ITA 400/RJT/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3013 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-12-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 06-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C RANPURA
• Assessee Lawyers: AVINASH KUMAR
• Keywords: Difference of opinion; Change of opinion
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI D.T. GARASIA (JM) I.T.A. NO. 400/RJT/2009 (ASSESSMENT YEAR 2006-07) SHRI DIVYESH R MAJETHIYA VS ACIT, CIR.4 DO, LIC OF INDIA, CBO 1 RAJKOT CA BUCH MARG, RAJKOT PAN : ACJPM6831A (APPELLANT) (RESPONDENT) REVENUE BY : SHRI JC RANPURA ASSESSEE BY : SHRI AVINASH KUMAR O R D E R A.L. GEHLOT : THIS IS AN APPEAL FILED BY THE ASSESS EE AND IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-III, RAJKOT DATED 16-02-2009 FO R THE ASSESSMENT YEAR 2006- 07. THE FOLLOWING ARE THE EFFECTIVE GROUNDS OF APP EAL TAKEN BY THE REVENUE: 2.1 IT MAY KINDLY BE HELD THAT NOTICE U/S 148 ISSU ED BY THE AO WAS ILLEGAL AND INVALID AND THEREFORE, ASSESSMENT U /S 143(3) R.W.S. 147 BASED ON SUCH ILLEGAL AND INVALID, INITI ATION WAS VOID-AB-INITIO. THE ASSESSMENT ORDER U/S 143(3) R. W.S. 147 MAY, THEREFORE, KINDLY BE QUASHED / CANCELLED. 3. THE LEARNED CIT(A) ERRED IN FACTS AS ALSO IN LAW IN CONFIRMING DISALLOWANCE OF DEDUCTION OF RS.4,80,733/- MADE BY THE AO AND DISMISSING APPELLANTS GROUNDS OF APPEAL ON THI S POINT. THE AO MAY KINDLY BE DIRECTED TO ALLOW DEDUCTION OF RS.4,80,733/- OUT OF INCENTIVE BONUS OF RS.16,02,44 5/- EXPENSES. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL AND IS DEVELOPMENT OFFICER IN LIC OF INDIA, RAJKOT. IN TH E RETURN OF INCOME FILED BY THE ASSESSEE, HE HAD CLAIMED 30% OF THE INCENTIVE BONUS RECEIVED FROM LIC OF INDIA AS DEDUCTION. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT ON 30-10-2007 WITHOUT MAKING ANY PRIMA FACIE ADJUSTMENT. THE CAS E WAS REOPENED U/S 147 OF THE ACT AND NOTICE U/S 148 WA ISSUED ON 18-01-2008. THE ASSESSING OFFICE MADE ITA NO.400/RJT/2009 2 ADDITION OF RS.4,80,733 BEING 30% OF THE DEDUCTION CLAIMED FROM THE INCENTIVE BONUS RECEIVED ON THE GROUND THAT THE HONBLE SUPRE ME COURT HAS DISMISSED THE SLP FILED BY THE ASSESSEE, IN THE CASE OF GURDEV SI NGH JAGGI 266 ITR 104 (ST)(SC) AGAINST THE JUDGMENT OF THE HONBLE MADHYA PRADESH HIGH COURT REPORTED IN 267 ITR 763 (MP). 3. THE CIT(A) REJECTED THE ASSESSEES LEGAL GROUND CHALLENGING THE ISSUE OF NOTICE U/S 148 BY OBSERVING THAT THE ASSESSEES RET URN WAS PROCESSED U/S 143(1) OF THE ACT AND ACCORDING TO THE JUDGMENT OF APEX CO URT IN THE CASE OF ACIT VS RAJESH JHAVERI STOCK BROKERS PVT LTD 292 ITR 500 (S C) INTIMATION U/S 143(1)(A) CANNOT BE TREATED AS AN ORDER OF ASSESSMENT ORDER A ND THEREFORE THERE BEING NO ASSESSMENT ORDER, THE QUESTION OF CHANGE OF OPINION DOES NOT ARISE. ON MERIT, THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFF ICER. 4. THE LD.AR WHILE ARGUING THE LEGAL GROUND REGARDI NG VALIDITY OF NOTICE U/S 148 SUBMITTED THAT THE ASSESSEE FILED RETURN OF INC OME ON 29-03-2007 AND ACCORDING TO SECTION 143(2), THE NOTICE U/S 143(2) IS REQUIRED TO BE ISSUED ON OR BEFORE 28-03-2008. HE FURTHER SUBMITTED THAT THE A SSESSING OFFICER DID NOT ISSUE ANY SUCH NOTICE U/S 143(2). THE ASSESSING OFFICER ISSUED NOTICE U/S 148 ON 18- 01-2008 I.E. WITHIN THE PERIOD WITHIN WHICH A NOTIC E U/S 143(2) CAN BE ISSUED BY THE ASSESSING OFFICER. THE LD AR SUBMITTED THAT WH EN TIME LIMIT FOR ISSUING NOTICE U/S 143(2) IS AVAILABLE WITH THE ASSESSING OFFICER, A NOTICE U/S 148 CANNOT BE ISSUED. THE LD.AR IN SUPPORT OF HIS CONTENTION REL IED UPON THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS TCP LTD 323 ITR 346 (MAD). 5. THE LD.DR ON THE OTHER HAND, RELIED UPON THE ORD ER OF THE CIT(A). 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES, RECORD PERUSED. WE FIND THAT THE LEGAL ISSUE IS SQUARELY COVERED BY THE JUDGMENT FO THE MADRAS HIGH COURT IN THE CASE OF CIT VS TCP LTD CITED SUPR A WHEREIN IT HAS BEEN HELD THAT THE TRIBUNAL WAS RIGHT IN HOLDING THAT THE NOT ICE U/S 148 OF THE ACT COULD NOT ITA NO.400/RJT/2009 3 BE ISSUED FOR MAKING AN ASSESSMENT U/S 147 OF THE A CT WHEN TIME LIMIT WAS AVAILABLE FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT FOR MAKING ASSESSMENT U/S 143(3) OF THE ACT. SINCE ISSUE IS COVERED BY THE J UDGMENT OF HONBLE MADRAS HIGH COURT WE RESPECTFULLY FOLLOW THE ABOVE JUDGMEN T OF THE MADRAS HIGH COURT AND IN THE LIGHT OF THAT THE LEGAL GROUND OF THE AS SESSEE IS ALLOWED. 7. SINCE WE HAVE DECIDED THE APPEAL ON THE LEGAL GR OUND ITSELF, WE DO NOT THINK NECESSARY TO GO INTO THE GROUND RELATING TO T HE MERIT OF THE CASE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED, FOR STATISTICAL PURPOSE, IN THE TERMS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 03-12-2010 SD/- SD/- (D.T. GARASIA) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT, DT : 03 RD DECEMBER, 2010 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-III, RAJKOT 4. THE CIT-II, RAJKOT 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT