Appeal details
Counselvise Citation
[2017] 128 COUNSELVISE.COM (IT) 3471 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 8 month(s) 29 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-04-2017
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
B
Next Hearing Date
30-03-2017
Assessment Year
2002-2003
Appeal Filed On
21-07-2014
Judgement Text
I.T.A .NO.-4090/DEL/2014 DCIT VS ERSTWHILE GLOBAL TRUST BANK LTD. IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SH. SUDHANSHU SRIVASTAVA, JUDIC IAL MEMBER AND SH.ANADEE NATH MISSHRA, ACCOUNTA NT MEMBER ITA NO.-4090/DEL/2014 (ASSESSMENT YEAR-2002-03) DCIT, CIRCLE-13(1), NEW DELHI. (APPELLANT) VS ERSTWHILE GLOBAL TRUST BANK LTD., (AMALGAMATED WITH ORIENTAL BANK OF COMMERCE), F-14, IVTH FLOOR, COMPETENT HOUSE, CONNAUGHT PLACE, NEW DELHI-110001. PAN-AAACG7477L (RESPONDENT) ASSESSEE BY SH.ANIL KUMAR SHARMA, SR. DR REVENUE BY SH. K.V.S.R.KRISHNA, CA & SH. AMAN GOEL, CA ORDER PER ANADEE NATH MISSHRA, ACCOUNTANT MEMBER (A). THE PRESENT APPEAL HAS BEEN FILED BY THE REVEN UE AGAINST THE ORDER DATED 24.04.2014 OF CIT(A)-XVI, DELHI PERTAINING T O A.Y. 2002-03. GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD.CIT(A) HAS ERRED IN QUASHING THE ORDER PASSED U/S 147/143( 3) HOLDING THAT IT WAS WITHOUT JURISDICTION, THOUGH THE CASE WAS PURELY AS PER THE PROVISIONS OF SECTION 147 OF THE I T ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN QUASHING THE ORDER PASSED U/S 147/143( 3) HOLDING THAT IT WAS OUT OF JURISDICTION, WITHOUT APPRECIATING THE FACTS THAT THE ISSUES WERE NEVER DISCUSSED DURING THE FIRST ASSESSMENT PROCEEDINGS. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT (A) HAS ERRED IN NOT CONSIDERING THE FACT THAT THE ASSE SSEE'S CASE IS CLEARLY COVERED IN CLAUSE (C) OF EXPLANATION 2 BELOW FIRST PROVISO APPENDED TO SECTION 147 OF THE I T ACT, 1961, WHEREIN NO NEW MA TERIAL IS REQUIRED FOR REOPENING OF THE CASE. 4. THE APPELLANT CRAVES TO BE ALLOWED TO ADD ANY FRESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL . PAGE 2 OF 8 I.T.A .NO.-4090/DEL/2014 DCIT VS ERSTWHILE GLOBAL TRUST BANK LTD. (B). FOR THE SAKE OF CONVENIENCE, ALL THE GROUNDS O F APPEAL ARE TAKEN UP TOGETHER. THE ORIGINAL RETURN WAS FILED ON 25.10.20 02 SHOWING A LOSS OF RS.1,53,01,94,382/-. THE ASSESSMENT U/S 143(3) OF THE I.T.ACT, 1961 (IN SHORT ACT) WAS MADE ON 30.03.2005 AT INCOME OF RS .1,47,84,09,712/-. AFTER GIVING EFFECT TO ORDER DATED 14.06.2006 OF LD .CIT(A), THE ASSESSEES LOSS WAS DETERMINED AT RS.1,33,67,78,397/-. RE-ASS ESSMENT PROCEEDINGS U/S 147 OF THE ACT WERE INITIATED BY THE AO BY NOTI CE U/S 148 OF THE I.T.ACT ISSUED ON 30.03.2009. THE FOLLOWING REASON S WERE RECORDED BY THE ASSESSING OFFICER (IN SHORT AO) ON 25.03.2009 FOR ISSUE OF NOTICE U/S 148 OF THE ACT:- 'IN THIS CASE, RETURN DECLARING LOSS OF RS. 153,01, 94,382/- WAS FILED ON 25-10-2002 AND ASSESSMENT ORDER U/S 143(3) OF THE I T ACT WAS MADE ON 30- 03-2005 ASSESSING THE TOTAL INCOME AT RS.147,84,09, 712/-. HOWEVER, AFTER GIVING EFFECT TO THE ORDER OF LD. CIT(A) VIDE ORDER PASSED U/S 250 DATED 14- 06-2006, THE LOSS WAS REVISED AT RS.1,33,67,78,397/ -. FURTHER, ON VERIFICATION OF THE ASSESSMENT RECORDS FOR THE AY 2002-03, FOLLOWING MISTAKES WERE POINTED OUT- (1) THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT HAD C REDITED AN AMOUNT OF RS.724,22,09,000/- UNDER THE HEAD INTEREST EARN ED' INSTEAD OF THE CORRECT AMOUNT OF RS.727,91,12,000/- AS APPEARING I N SCHEDULE XIII. HENCE, THE INTEREST INCOME WAS SHOWN LESS BY RS.3,6 9,03,000/-. (2) ASSESSES HAS CLAIMED AND ALLOWED DEPRECIATION @ 60% ON LAN AND WAN EQUIPMENTS UNDER THE HEAD COMPUTE/ HARDWARE WHE REAS LAN/WAN IS TO BE TREATED AS PLANT AND MACHINERY AND DEPRECIATION @ 25% SHOULD HAVE BEEN ALLOWED. (3) AS PER RBI CIRCULAR DATED 10-01-2002 UNREALIZED GAINS ON VALUATIONS HAD NOT BEEN TAKEN TO THE INCOME ACCOUNT RESULTING INTO LOWERING OF PROFIT BY RS 1,00,19,000/- WHEREAS AS P ER MERCANTILE SYSTEM OF ACCOUNTING UNREALIZED GAIN SHOULD HAVE BE EN TREATED AS INCOME OF THE ASSESSEE AND ADDED BACK TO THE TAXABL E INCOME. (4) THE ASSESSEE IN THE PROFIT & LOSS ACCOUNT HAD D EBITED AN AMOUNT OF RS.635,84,93,000/- UNDER THE HEAD 'INTEREST EXPE NDED' INSTEAD OF THE FIGURE OF RS.635,30,13,000/- AS APPEARING IN SC HEDULE XV. THEREFORE, THE EXPENDITURE WERE CLAIMED EXCESS BY R S.54,80,000/-. PAGE 3 OF 8 I.T.A .NO.-4090/DEL/2014 DCIT VS ERSTWHILE GLOBAL TRUST BANK LTD. IN VIEW OF THE FACTS NARRATED ABOVE, THERE IS FAILU RE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR HIS ASSESSMENT AND I HAVE REASON TO BELIEVE THAT THE IN COME OF THE ASSESSEE TO THE EXTENT OF RS.5,24,02,000/- APPROX. HAS ESCAPED ASSESSMENT FOR WHICH ACTION U/S 147 OF THE IT ACT I S TO BE INITIATED IN THE YEAR UNDER CONSIDERATION I.E. AY. 2002-03. SINCE THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) OF IT ACT, AND FOUR YEARS HAVE ALSO BEEN ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, THEREFORE, KINDLY APPROVAL OF THE COMMISSIONER, DELHI-V. NEW DELHI IS SOLICITED AS PER PROVISIONS O F SECTION 151(2) OF THE IT ACT. (B.1). VIDE LETTER DATED 21.04.2009, THE ASSESSEE S TATED THAT THE ORIGINAL RETURN FILED ON 25.10.2002 MAY BE CONSIDER ED AS THE RETURN FILED PURSUANT TO NOTICE U/S 148 OF THE ACT. THE ASSESSE E ALSO SOUGHT COPY OF REASONS RECORDED FOR ISSUE OF NOTICE U/S 148 OF THE ACT WHICH WERE PROVIDED TO THE ASSESSEE BY THE AO. THE ASSESSEE R AISED OBJECTIONS VIDE LETTER DATED 27.05.2009 WHICH WERE DISPOSED OF BY T HE AO BY AN ORDER IN WRITING, DATED 30.10.2009, AND THE OBJECTIONS AGAIN ST ISSUE OF NOTICE U/S 148 OF THE ACT, WERE REJECTED BY THE AO. A FRESH A SSESSMENT ORDER DATED 17.12.2009 U/S 143(3)/147 OF THE ACT WAS PASSED BY THE ASSESSING OFFICER IN WHICH THE FOLLOWING ADDITIONS WERE MADE:- 1. SHORT DECLARED INTEREST INCOME RS.3,69,03,000/- 2. DISALLOWANCE OF EXCESS INTEREST EXPENSE RS.54,80,0 00/- 3. DISALLOWANCE OF EXCESS DEPRECIATION RS.3,05,87,016 /- 4. ADDITION OF UNREALIZED INCOME RS.1,00,19,000/- (B.2). THE ASSESSEE FILED APPEAL AGAINST ORDER DATE D 17.12.2009 BEFORE LD.CIT(A). IN THE APPEAL FILED BY THE ASSESSEE BEF ORE LD.CIT(A), 11 GROUNDS WERE TAKEN BY THE ASSESSEE OUT OF WHICH GROUND NOS. 1 TO 4 RELATED TO PAGE 4 OF 8 I.T.A .NO.-4090/DEL/2014 DCIT VS ERSTWHILE GLOBAL TRUST BANK LTD. ASSUMPTION OF JURISDICTION U/S 147 OF THE ACT BY TH E AO; GROUND NOS.5 TO 8 RELATED TO MERITS OF VARIOUS DISALLOWANCES/ADDITI ONS MADE BY THE AO AND THE REMAINING GROUNDS WERE EITHER GENERAL OR CONSEQ UENTIAL IN NATURE. WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE, LD. CIT(A) ALLOWED GROUND NOS. 1 TO 4 OF THE APPEAL FILED BEFORE LD.CIT(A) HO LDING THAT THE RE- ASSESSMENT PROCEEDINGS INITIATED BY THE AO U/S 147 OF THE ACT WERE BASED ON A MERE CHANGE OF OPINION. HE ALSO HELD THAT THE RE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL THE MATERIAL F ACTS NECESSARY FOR ITS ASSESSMENT FULLY AND TRULY. HE HELD THAT THE NOTIC E ISSUED BY THE AO U/S 148 IN THE PROCEEDINGS INITIATED U/S 147 OF THE ACT WERE WITHOUT THE JURISDICTIONAL FOUNDATION AVAILABLE U/S 147. HE Q UASHED THE ASSESSMENT ORDER PASSED U/S 147/143(3) HOLDING IT TO BE WITHOU T JURISDICTION. SINCE HE ALLOWED ASSESSEES APPEAL ON GROUNDS 1 TO 4 OF T HE APPEAL, HE DID NOT ADJUDICATE ON THE REMAINING GROUNDS OF APPEAL FILED BY THE ASSESSEE. THE REVENUE HAS FILED THIS APPEAL AGAINST THE AFORESAID ORDER DATED 24.04.2014 OF LD.CIT(A). (C). AT THE TIME OF HEARING BEFORE US, THE LD. DR SUPPORTED THE ORDER PASSED BY THE AO AND CONTENDED THAT THE ASSESSMENT ORDER DATED 17.12.2009 U/S 143(3)/147 OF THE ACT AND THE ADDITI ONS MADE THEREIN DID NOT AMOUNT TO CHANGE OF OPINION BECAUSE NO OPINION WAS FORMED OR EXPRESSED BY THE AO IN THE ORIGINAL ASSESSMENT ORDE R DATED 30.03.2005 IN RESPECT OF THE POINTS ON WHICH ADDITIONS HAVE BEEN MADE IN SUBSEQUENT PAGE 5 OF 8 I.T.A .NO.-4090/DEL/2014 DCIT VS ERSTWHILE GLOBAL TRUST BANK LTD. ORDER DATED 17.12.2009 U/143(3)/147 OF THE ACT. HE RELIED ON ORDER IN THE CASE OF UCAL MACHINES TOOLS P.LTD. VS ITO, COMPANY WARD-III (1), CHENNAI [2016] 71 TAXMANN.COM 230 (CHENNAI-TRIB.). THE LD. DR SUPPORTED THE ORDER OF THE AO. THE LD. AUTHORIZED REPRESENTATIVE (IN SHORT AR) APPEARING FOR THE ASSESSEE STRONGLY SUPPORTED THE O RDER OF THE LD.CIT(A) BASED ON TWO CONTENTIONS FIRSTLY, THAT THE INITIA TION OF PROCEEDINGS U/S 147 OF THE ACT AND THE ADDITIONS MADE IN ORDER DATE D 17.12.2009 U/S 143(3)/147 OF THE ACT AMOUNTED TO CHANGE OF OPINIO N; AND SECONDLY, THAT THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. LD.AR RELIED ON THE FOLLOWING C ASE LAWS IN SUPPORT OF HIS CONTENTIONS:- 1. COMMISSIONER OF INCOME-TAX VS. KELVINATOR OF I NDIA LTD. [2010] 320 ITR 561 (SC). 2. ASSISTANT COMMISSIONER OF INCOME-TAX V. ICICI SE CURITIES PRIMARY DEALERSHIP LTD. [2012] 348 ITR 299 (SC). 3. COMMISSIONER OF INCOME-TAX V. USHA INTERNATIONA L LTD. [2012] 348 ITR 485 (DEL)(HC)(FB) 4. COMMISSIONER OF INCOME-TAX V. GOETZE (INDIA) LTD. [2010] 321 ITR 431 (DEL)(HC) 5. D. T. &T. D. C. LTD. V. ACIT [2010] 324 ITR 23 4 (DEL)(HC) 6. COMMISSIONER OF INCOME-TAX V. EICHER LIMITED [2 012] 344 ITR 37 (DEL)(HC) 7. RABO INDIA FINANCE LIMITED V. DEPUTY COMMISSION ER OF INCOME-TAX [2012] 346 ITR 528 (BOM)(HC) 8. ALLIED STRIPS LIMITED VS. ASSISTANT COMMISSIONER OF INCOME TAX (2016) 384 ITR 0424 (DELHI) 9. PRIYA DESH GUPTA & ANR. VS. DEPUTY COMMISSIONER OF INCOME TAX & ANR. 2016) 385 ITR 0452 (DELHI) 10. ARYAN ARCADE LTD. V. DEPUTY COMMISSIONER OF INC OME-TAX [2017] 390 ITR 67 (GUJ). (D). WE HAVE HEARD BOTH SIDES ATTENTIVELY. WE HAVE ALSO PERUSED ALL THE MATERIALS ON OUR RECORD CAREFULLY. UNDER PROVISO TO SECTION 147 OF THE PAGE 6 OF 8 I.T.A .NO.-4090/DEL/2014 DCIT VS ERSTWHILE GLOBAL TRUST BANK LTD. ACT, IT IS CLEARLY PRESCRIBED THAT NO ACTION SHALL BE TAKEN U/S 147 OF THE ACT AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE T O MAKE A RETURN U/S 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATE RIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR. IN THE C ASE BEFORE US, THE UNDISPUTED FACTS ARE, THAT THE ASSESSEE DID FILE RE TURN U/S 139 OF THE ACT; THE AO DID PASS ASSESSMENT ORDER U/S 143(3) OF THE ACT ON 30.03,2005; AND RE-ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT HA VE BEEN INITIATED AFTER THE EXPIRY OF MORE THAN FOUR YEARS FROM THE E ND OF THE RELEVANT ASSESSMENT YEAR (AY 2002-03). UNDER THESE FACTS, N O ACTION U/S 147 OF THE ACT CAN BE TAKEN UNLESS INCOME HAS ESCAPED ASSE SSMENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULLY AND TRULY. IN THE INSTANT CASE, THE REVENUE HAS FAILED TO SHOW WHICH MATERIAL FACTS WERE NOT DISCLOSED BY THE ASSESSEE. WE HAVE PERUSED THE ASSESSMENT ORDER DATED 17.12.2009 U/S 143(3)/147 OF THE ACT AND HAVE ALSO PERUSED THE AFORESAID WRITTEN ORDER DATED 13.1 1.2009 OF THE AO REJECTING THE OBJECTIONS RAISED BY THE ASSESSEE. W E HAVE FURTHER PERUSED THE REASONS RECORDED BY THE AO FOR INITIATION OF PR OCEEDINGS U/S 147 OF THE ACT AND FOR ISSUE OF NOTICE U/S 148 OF THE ACT. MO REOVER, WE HAVE PERUSED OUR RECORDS CAREFULLY. THERE IS NOTHING ON THE BAS IS OF WHICH CAN BE SAID PAGE 7 OF 8 I.T.A .NO.-4090/DEL/2014 DCIT VS ERSTWHILE GLOBAL TRUST BANK LTD. THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULLY AND TRULY. INFACT WE ARE UNABLE TO EVE N FIND ANY ALLEGATION BY THE AO TO THE EFFECT THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULLY AND TRULY. IN TH ESE FACTS AND CIRCUMSTANCES, WE HOLD THAT REVENUE HAS FAILED TO S HOW THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULLY AND TRULY. WHEN THE ASSESSEE HAS FILED A RETURN U/S 13 9 OF THE ACT OR IN RESPONSE TO SECTIONS 142(1) OR 148 OF THE I.T.ACT A ND WHEN AN ASSESSMENT ORDER U/S 143(3) OR U/S 147 OF THE ACT HAS ALREADY BEEN PASSED THEN THE ASSESSEE ENJOYS STATUTORY PROTECTION UNDER PROVISO TO SECTION 147 OF THE ACT FROM ANY ACTION U/S 147 OF THE ACT AFTER THE E XPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS; UNLESS IN COME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECE SSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. ONUS IS ON REVENUE TO SH OW THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TR ULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSM ENT YEAR AND IN THE INSTANT CASE, REVENUE HAS FAILED TO DISCHARGE THIS ONUS. WHEN IT IS NOT THE CASE OF THE REVENUE THAT THERE WAS FAILURE ON T HE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULLY AND TRULY, REV ENUE CANNOT VIOLATE THE STATUTORY PROTECTION ENJOYED BY THE ASSESSEE UNDER PROVISO TO SECTION 147 OF THE ACT. IN THE FACTS AND CIRCUMSTANCES OF THIS CASE, THEREFORE, WE HOLD PAGE 8 OF 8 I.T.A .NO.-4090/DEL/2014 DCIT VS ERSTWHILE GLOBAL TRUST BANK LTD. THAT THE STATUTORY PROTECTION ENJOYED BY THE ASSESS EE UNDER PROVISO TO SECTION 147 OF THE ACT WAS WRONGLY VIOLATED BY REVE NUE. THEREFORE, WE DISMISS ALL THE GROUNDS OF APPEAL IN THIS APPEAL FI LED BY THE REVENUE, AND HOLD THAT THE ASSUMPTION OF JURISDICTION U/S 147 OF THE ACT AND INITIATION OF PROCEEDINGS U/S 147 R.W.S. 148 OF THE ACT WAS ER RONEOUS IN LAW IN THE FACTS AND CIRCUMSTANCES OF THIS CASE. IN VIEW OF T HIS CONCLUSION, THERE IS NO NEED FOR US TO ADJUDICATE WHETHER THE INITIATION OF PROCEEDINGS U/S 147 OF THE ACT AND THE ADDITIONS MADE IN ORDER DATED 17 .12.2009 U/S 143(3)/147 OF THE ACT AMOUNTED TO CHANGE OF OPINIO N AS THIS ISSUE BECOMES PURELY ACADEMIC. ACCORDINGLY, WE DECLINE T O INTERFERE WITH THE ORDER OF LD.CIT(A) WHEREBY HE QUASHED THE ASSESSMEN T ORDER U/S 143(3)/147 OF THE ACT DATED 17.12.2009. (E). IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 19 TH OF APRIL 2017. SD/- SD/- (SUDHANSHU SRIVASTAVA) (ANAD EE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE:- 19 TH APRIL, 2017 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSIST ANT REGISTRAR ITAT NEW DELHI
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