Sh. Shyamal Mukherjee, New Delhi V. ITO, New Delhi

ITA 4141/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3235 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-05-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 27-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR RAKESH GUPTA; SOMIL AGGARWAL DEPARTM
• Keywords: Reassessment proceedings
• Section: 147; 148

Judgement Text

PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH - SMC NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NOS.4140, 4141/ DEL/2016 ASSESSMENT YEARS : 2003-04, 2004-0 5 SHRI SHYAMAL MUKHERJEE C/O RRA TAXINDIA, D-28, SOUTH EXTENSION, PARK-1 NEW DELHI 110 049 PAN AALPM8269N VS. ITO WARD-30(2) NEW DELHI. (APPELLANT) (RESPONDENT) PER BHAVNESH SAINI, JUDICIAL MEMBER ORDER BOTH THE APPEALS BY THE SAME ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(A) 13, NEW DELHI DATE D 15 TH JUNE, 2016 FOR ASSESSMENT. YEAR 2003-04 AND 2004-05. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL ON RECORD. 3. IN BOTH THE APPEALS THE ISSUES ARE COMMON. IN BO TH THE APPEALS, ASSESSEE CHALLENGED THE ORDERS OF AUTHORITIES BELOW IN FRAMING REASSESSMENT ORDERS WITHOUT COMPLYING WITH THE MAND ATORY CONDITIONS OF SECTION 147 TO 151 AND MORE SO DIRECTIONS OF THE TRIBUNAL HAVE NOT BEEN COMPLIED WITH. THE ASSESSEE ALSO CHALLENGED TH E ADDITIONS OF RS. ASSESSEE BY : DR. RAKESH GUPTA & SHRI SOMIL AGGARWAL, ADVOCATE DEPARTMENT BY: MS.BEDOBANI, SR. DR DATE OF HEARING 02/05/2017 DATE OF PRONOUNCEMENT 08 /05/2017 ITA NOS. 4140,4141/DEL/2016 SHRI SHYAMAL MUKHERJEE VS. ITO 2 12,50,000/- AND RS. 6 LACS ON ACCOUNT OF PAYMENT MA DE TOWARDS PURCHASE OF PROPERTY. 3.1 LD. COUNSEL FOR ASSESSEE SUBMITTED EARLIER ASSE SSMENT ORDER WAS SET ASIDE AND MATTER IS RESTORED TO ASSESSING OFFIC ER BY ITAT, IN DEPTT. APPEALS NO. 1838/10 FOR ASSESSMENT. YEAR 2003-04, I TA NO. 1839/10 FOR ASSESSMENT. YEAR 2004-05 WITH CO OF ASSESSEE IN CO/ 169/10 AND CO/170/10 VIDE ORDER DATED 30.1.2012. ASSESSING OFF ICER WAS DIRECTED TO DECIDE OBJECTIONS OF ASSESSEE U/S 147 / 148 OF I.T. ACT AND DECIDE THE ADDITION ON MERITS AFRESH. THE ASSESSEE FILED OBJEC TIONS U/S 147/148 BEFORE ASSESSING OFFICER IN SET ASIDE PROCEEDINGS ( PB71), WHICH HAS NOT BEEN ADJUDICATED BY ASSESSING OFFICER. ORDER OF ITA T IS DISOBEYED. COPY OF REASON IS FILED AT PAPER BOOK 11. HE HAS SUBMI TTED THAT ISSUE IS COVERED IN FAVOUR OF ASSESSEE BY ORDER OF ITAT DELH I BENCH IN CASE OF M/S. SHIVA RUBBER INDUSTRIES VS. ITO IN ITA 2212/D EL/2015 DATED 25/4/2017 IN WHICH PARA 7 TO 9 IT WAS HELD AS UNDER :- 7. SECONDLY, THE PRESENT MATTER WAS RESTORED BACK TO THE FILE OF THE AO BY THE IT A T IN ITA NO. 165/DE1J2009 VI DE ORDER DATED 10' SEPTEMBER, 2009 AND THE ORDER IS ON RECOR D. THE RELEVANT PARAGRAPH IS REPRODUCED HEREINBELOW: 'FIRSTLY, WE SHALL PROCEED TO SEE AS TO WHETHER THE ASSESSING OFFICER HAS COMPLIED THE PROVISIONS OF SE CTION 147 TO 151 OF THE ACT, AS PER LAW OR NOT. IN THIS C ASE, THE NOTICE U/S. 148 WAS ISSUED ON 28.93.2007, AFTER REC ORDING THE REASONS, WHICH ARE MENTIONED IN THE ASSESSMENT ORDER ITSELF. THE AO THEREAFTER ISSUED NOTICED U/S. 142(1 ) TO THE ASSESSEE ON 01. 11.2007, IN REPLY-THERETO, THE ASSE SSEE REQUESTED THE AO TO FURNISH THE COPY OF REASONS REC ORDED. THEREAFTER, THE COPIES OF REASONS WERE FURNISHED TO THE ASSESSEE ON 07.12.2007. THE FILED ITS REPLY ON 27.1 2.2007. THE CASE WAS FIXED FOR HEARING ON 31.12.2007, AND THEREAFTER, THE AO COMPLETED THE ASSESSMENT ON THE VERY SAME DAY I.E. 31.12.2007. FROM THE PERUSAL OF THE ITA NOS. 4140,4141/DEL/2016 SHRI SHYAMAL MUKHERJEE VS. ITO 3 ASSESSMENT ORDER, ITS IS, THUS CLEAR THAT THE ASSES SMENT HAS BEEN COMPLETED WITHIN THREE DAYS AFTER THE RECEIVIN G THE ASSESSEE'S REPLY ON 27.12.2007. THE ASSESSEE'S OBJE CTIONS TO THE REASONS RECORDED HAS NOT BEEN CONSIDERED AND DECIDED BY THE AO BEFORE HE MAKES THE .ASSESSMENT U 1S. 147 OF THE ACT. WE, THEREFORE. FIND THAT THE SPIRIT OF THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF GK W DRIVESHAFT LIMITED REPORTED IN 2511TR, 19 (SC) HAS NOT BEEN COMPILED WITH. AT THIS STAGE, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THIS IRREGULARITY CAN B E CURED IF THE MATTER IS RESTORE BACK TO THE FILE OF THE AD, D IRECTING HIM TO DEAL WITH THE OBJECTIONS. RAISED BY THE ASSE SSEE BEFORE PASSING THE ASSESSMENT ORDER ON MERIT. IN TH IS CONNECTION, LD. COUNSEL. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE AS WELL AS BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSE. 7.1 FROM THE SAID ORDER OF THE ITAT, IT IS EVIDE NT THAT OBJECTIONS OF THE REASONS RECORDED WAS NOT CONSIDERED AND DECI DED BY THE AO. THE AO MAKES THE ASSESSMENT U/S.147 OF THE ACT. LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION I N THE CASE OF M/S. S. POWER PVT. LTD. VS. ITO IN ITA NO.6544/DE1/ 2014 DATED 29.04.2016 AT PAGES 288 TO 300 AND THE RELEVANT DEC ISION IN PARAGRAPH 16 IS REPRODUCED HEREINBELOW: 'IN THE PRESENT CASE ALSO THERE WAS A FAILURE ON TH E PART OF THE AO TO COMPLY WITH THE MANDATORY REQUIREMENT OF DISPOSING OFF THE OBJECTIONS OF THE ASSESSEE, THERE FORE, THE REOPENING WAS NOT VALID.' ACCORDINGLY, IT CAN SAFEL Y BE HELD THAT THE REOPENING DONE BY THE AO 147 R.W.S. 148 OF THE ACT ON THE BASIS OF INCORRECT REASONS AND WITHOUT D ISPOSING OFF THE OBJECTIONS RAISED BY THE ASSESSEE WAS INVAL ID. IN THAT VIEW OF THE MATTER THE IMPUGNED ORDER PASSED B Y THE ID. CIT(A) IS SET ASIDE AND THE REASSESSMENT FRAMED BY THE AO U/S.I47 R.W.S. /43(3) OF THE ACT IS QUASHED.' 7.2 THE RELIANCE IN THE SAID DECISION WAS PLACED IN THE CASE OF PCIT VS. TUPPER WARE INDIA PVT. LTD. REPORTED IN (2 016) 284 CTR 68 (DEL) AVAILABLE AT PAGES 251 TO 255 AND THE RELE VANT PARAGRAPH AT PAGE 253. THE RELEVANT PARAGRAPH OF THE DECISION IS REPRODUCED HEREINBELOW. '6. THE COURT IS OF THE CONSIDERED VIEW THAT AFTER HAVING CORRECTLY UNDERSTOOD THE DECISION OF THE SUPREME CO URT IN G.K.N. RIVESHAFTS (INDIA) LTD. (SUPRA) AS MANDATORI LY REQUIRING THE AD TO COMPLY WITH THE PROCEDURE LAID DOWN THEREIN AND TO DISPOSE OF THE OBJECTIONS TO THE REO PENING ITA NOS. 4140,4141/DEL/2016 SHRI SHYAMAL MUKHERJEE VS. ITO 4 ORDER WITH A SPEAKING ORDER, THE CIT(A) COMMITTED A N ERROR IN NOT QUASHING THE REOPENING ORDER AND THE CONSEQUENT ASSESSMENT. ' 8. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, THE IDENTICAL FACTS ARE THERE IN THE PRESENT CASE AND THE AO HAS NOT DISPOSED OF THE OBJECTIONS OF THE REASONS RAISED BY THE ASSE SSEE AS MENTIONED BY THE ITA T IN THE FIRST ROUND, AND THER EFORE, NECESSARILY THE ASSESSMENT IS LIABLE TO BE QUASHED. ACCORDINGLY, WE ORDER TO QUASH THE SAID ASSESSMENT/RE-ASSESSMENT . THUS ON BOTH THE COUNTS LEGALLY THE ASSESSEE SUCCEEDS ON LE GAL GROUNDS AND GROUNDS NO. 1 , 2 AND 3 ARE ALLOWED. SINCE, THE ASSESSEE SUCCEEDS ON LEGAL GROUNDS. THE GROUNDS ON MERIT BEC OME ACADEMIC IN NATURE, THEREFORE, DO NOT REQUIRE ANY A DJUDICATION. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA IS ALLOWED. 3.2 HE HAS THEREFORE SUBMITTED REASSESSMENT ORDER M AY BE QUASHED. 4. ON THE OTHER HAND LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE EARLIER FIRST ROUND PROCEEDINGS B EFORE ITAT, THE TRIBUNAL WHILE DECIDING THE DEPARTMENTAL APPEAL AND CROSS OBJECTIONS OF ASSESSEE VIDE ORDER DATED 30 TH JANUARY, 2012 RESTORED THE MATTER BACK TO THE FILE OF ASSESSING OFFICER TO REDECIDING OBJE CTIONS OF THE ASSESSEE U/S 147 OF THE I.T. ACT AND ADDITION ON MERIT. THE ASSESSEE FILED OBJECTIONS TO THE REOPENING OF THE ASSESSMENT BEFOR E ASSESSING OFFICER. HOWEVER ASSESSING OFFICER DID NOT DECIDE THE OBJECT IONS OF THE ASSESSEE IN THE SET ASIDE PROCEEDINGS. THEREFORE THE REASSES SMENT ORDERS ARE LIABLE TO BE QUASHED. THE ISSUE IS COVERED IN FAVOU R OF THE ASSESSEE BY ORDER IN THE CASE OF M/S. SHIVA RUBBER INDUSTRIES V S. ITO (WARD-2) (SUPRA) I ACCORDINGLY, FOLLOWING THE SAME ORDER AND CONSIDERING THE FACTS QUASH THE REASSESSMENT PROCEEDINGS AND THE ADDITION MADE THEREIN ITA NOS. 4140,4141/DEL/2016 SHRI SHYAMAL MUKHERJEE VS. ITO 5 STANDS DELETED. SINCE THE REASSESSMENT PROCEEDINGS HAVE BEEN QUASHED THEREFORE THERE IS NO NEED TO DECIDE THE ADDITION O N MERIT BECAUSE IT IS LEFT WITH ACADEMIC DISCUSSION ONLY. IN THE RESULT A PPEAL OF THE ASSESSEE FOR ASSESSMENT. YEAR 2003-04 IS ALLOWED. 6. THE SAME ISSUE IS INVOLVED IN ASSESSMENT. Y EAR 2004-05 FOLLOWING THE ORDER FOR ASSESSMENT. YEAR 2003-04, I SET ASIDE AND QUASH THE REASSESSMENT PROCEEDINGS AND DELETE THE ADDITION. T HE APPEAL OF THE ASSESSEE FOR THIS YEAR IS ALSO ALLOWED. 7. IN THE RESULT BOTH THE APPEALS OF THE ASSES SEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT. SD/- ( BHAVNESH SAINI ) JUDICIAL MEMBER DATED: 8 TH MAY, 2017 *VEENA* COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. PRINCIPAL CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR