M/s. Premium Polyalloys Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-4(2), Baroda

ITA 420/AHD/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4827 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 27-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ILA M PARMAR
• Assessee Lawyers: ANIL R SHAH
• Keywords: Reopening of assessment; Difference of opinion; Change of opinion
• Section: 143(3); 80HHC; 145; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) ITA. NO: 420/AHD/2015 (ASSESSMENT YEAR: 2003-04) M/S. PREMIUM POLYALLOYS PVT. LTD. 417/418, GIDC ESTATE, WAGHODIA, VADODARA V/S INCOME TAX OFFICER, WARD- 4 (2),VADODARA (APPELLANT) (RESPONDENT) PAN: AABCP2640P APPELLANT BY : SHRI ANIL R. SHAH & KINJAL SHAH, AR RESPONDENT BY: SMT. ILA M. PARMAR, SR. D.R. ( )/ ORDER DATE OF HEARING : 17 -10-201 8 DATE OF PRONOUNCEMENT : 24 -10-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-2, VADODARA DATED 10.12.2014 PERTAINING TO A.Y. 2003-0 4 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 420/ AHD/2015 . A.Y. 2003-04 2 ON REOPENING: 1.THE CIT(A) HAS ERRED BOTH IN LAW AND IN FACT NOT FOLLOWING CLEAR CUT DIRECTION OF HON. INCOME-TAX APPELLATE TRIBUNAL IN THEIR ORDER O F 4-10-2013 ON ISSUE U/S.148 PROCEEDINGS. 2. WITHOUT PREJUDICE, CIT(A) HAS ERRED BOTH IN LA W AND IN FACT IN CONFIRMING THE REOPENING OF ASSESSMENT U/S.148 OF THE ACT SINCE RE ASON RECORDED BY THE ASSESSING OFFICER BEING VAGUE, UNCERTAIN, CASE OF C HANGE OF OPINION AND DOES NOT HAVE NEXUS WITH FACTS OF THE CASE. ON MERITS: 1. YOUR APPELLANT FURTHER SUBMITS THAT THE CIT(A) HAS ERRED IN NOT GRANTING RELIEF/DEDUCTION U/S.80HHC WHICH WAS RIGHTLY ALLOWE D IN ORDER U/S.143(3) ON FACTS OF THE CASE AND AS PER PROVISIO NS OF LAW AND THE CIT(A) HAS MERELY FOLLOWED EARLIER ORDER OF HIS PRE DECESSOR WHILE REJECTING THE CLAIM. 2. THE CIT(A) HAS ERRED IN CONFIRMING THE LEVY O F INTEREST U/S.234B AND 234C WHICH IS NOT APPLICABLE ON THE FACTS OF THE CA SE AND NOT PROPERLY WORKED OUT. THE OPERATING PART OF ASSESSMENT ORDER 'CHARGE INTEREST ACCORDINGLY' IS VAGUE UNCERTAIN AND NOT CLEAR AND AS HELD IN THE CASE OF ACIT VS. S.K. PATEL FAMILY, 251 CTR PAGE 427 (GU J.) INTEREST IS NOT CHARGEABLE . 2. BRIEF FACTS OF THE CASE THAT THE ORIGINAL ORDER U/S . 143(3) WAS PASSED ON 28/03/2006. SUBSEQUENTLY, THE CASE WAS REOPENED BY ISSUING NOTICE U/S. 148 ON 18/03/2008 ORDER U/S. 143(3) R.W.S 147 WAS PASSED 2 8/11/2008 IN WHICH THE RELIEF U/S. 80IA WAS DEDUCTED FROM THE PROFIT AND G AINS OF THE BUSINESS BEFORE COMPUTING RELIEF U/S. 80HHC OF THE ACT AND ACCORDIN GLY RELIEF U/S. 80HHC WAS RECOMPUTED. THE APPELLANT FILED AN APPEAL BEFOR E CIT(A) WHO DISMISSED THE APPEAL. IN FURTHER APPEAL TO ITAT, THE APPELLAN T TOOK A PLEA THAT REOPENING ITA NO. 420/ AHD/2015 . A.Y. 2003-04 3 OF THE ASSESSMENT U/S. 148 WAS NOT VALID. THE ITAT VIDE ITS ORDER DATED 04/10/2013 IN ITA NO. 1472/AHD/2010 SET ASIDE THE O RDER OF THE CIT(A) AND HE RESTORED THIS TO HIS FILE WITH DIRECTION TO EXAMINE THE LEGALITY OF ISSUE OF NOTICE U/S. 148 OF THE ACT. THE ISSUE FOR THE CLAIM OF DEDUCTION U/S. 80 HHC WAS ALSO RESTORED TO THE FILE OF THE CIT(A). 3. IN PURSUANCE OF THE ITAT ORDER FOR RE-ADJUDICATION , LD. CIT(A) DECIDED THE MATTER AGAINST THE APPELLANT. SO FAR GROUND NOS. 1 & 2 ARE CONCERNED, SAME ARE INTERCONNECTED. TODAY, WE HAVE SEEN ORIGINAL ASSESS MENT RECORD PRODUCED BY THE LD. D.R. AND FOR ASSESSMENT ORDER, WE COULD SEE THAT REASONS WERE RECORDED PRIOR TO ISSUANCE OF NOTICE TO THE APPELLANT. THUS, WE DO NOT FIND ANY AMBIGUITY IN THE NOTICE FOR RE-OPENING OF THE CASE. 4. NOW WE COME TO THE MERIT OF THE CASE. THE APPELLANT CONTENTION IS THAT EARLIER RELIEF/DEDUCTION U/S. 80HHD WAS RIGHTLY ALLOWED IN ORDER U/S. 143(3) OF THE ACT. AS WE COULD SEE THE ASSESSMENT AS WELL AS ASSE SSMENT RECORD, LD. A.O. MADE DETAILED ENQUIRY WITH REGARD TO DEDUCTION U/S 80HHC AND AFTER DUE DELIBERATIONS ORDER WAS PASSED U/S. 143(3A) OF INCO ME TAX ACT. IN OUR CONSIDERED OPINION, WE HOLD THAT ORDER U/S 143(3) W AS PASSED AFTER DETAILED ENQUIRY AND NOTICE U/S. 148 IS UNDER THE LAW IS AMO UNT TO CHANGE OF OPINION AND DOES NOT HAVE ANY NEXUS WITH THE FACTS OF THE C ASE. 5. IN SUPPORT OF ITS CONTENTION, LD. A.R. CITED AN ORD ER OF GUJARAT HIGH COURT IN THE MATTER OF HEAVY METAL & TUBES LTD. VS. DCIT [20 13] 35 TAXMANN.COM 288 (GUJ.), IT IS HELD: SECTION 147 READ WITH SECTION 145 OF THE INCOME-TA X ACT, 1961 - INCOME ESCAPING ASSESSMENT - NON-DISCLOSURE OF PRIM ARY FACTS ITA NO. 420/ AHD/2015 . A.Y. 2003-04 4 [TO VALUE CLOSING STOCK] - ASSESSMENT YEAR 2008-09 - WHETHER, WHERE ISSUE OF ACCOUNTING TREATMENT IN RESPECT OF U NUTILIZED CENVAT CREDIT FOR PURPOSE OF VALUING CLOSING STOCK WAS ALREADY EXAMINED BY ASSESSING OFFICER DURING SCRUTINY ASSES SMENT, REOPENING OF ASSESSMENT ON SAME ISSUE WITHOUT ANY T ANGIBLE MATERIAL WAS MERE CHANGE OF OPINION AND HENCE NOT S USTAINABLE - HELD, YES [PARA 11] [IN FAVOUR OF ASSESSEE] 6. IN FACTS AND CIRCUMSTANCES OF THE CASE IN HAND AND REVENUE DOES NOT HAVE ANY FRESH MATERIAL IN ITS HAND TO REOPEN THE CASE OF TH E ASSESSEE AS WELL AS RESPECTFULLY FOLLOWING THE JURISDICTIONAL HIGH COUR T, WE ALLOW THIS APPEAL OF THE APPELLANT. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN OPEN COURT ON 24- 10- 2018 SD/- SD/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 24/10/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD