M/s Parmar Construction, Indore V. The Income Tax Officer Wd. 1(2), Indore

ITA 425/IND/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53982 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2000-2001
• Appeal Filed On: 21-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN DEWAN
• Assessee Lawyers: H P VERMA; ASHISH GOYAL S
• Keywords: Reopening of assessment
• Section: 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AABPP4467H I.T.A.NOS.425 & 426/IND/2010 A.YS. : 2000-01 M/S. PARMAR CONSTRUCTION, ITO INDORE. VS WARD 1(2), INDORE. APPELLANT RESPONDENT APPELLANT BY : S/SHRI H.P.VERMA AND SHRI ASHISH GOYAL, ADVOCATES RESPONDENT BY : SHRI ARUN DEWAN, SR. DR DATE OF HEARING : 17.10.2011 DATE OF PRONOUNCEMENT : 20.10.2011 O R D E R PER R. C. SHARMA, A.M. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) FOR THE ASSESSMENT YEARS 2000-01 AN D 2001- 02. -: 2: - 2 2. AS THE COMMON GROUNDS HAVE BEEN TAKEN IN BOTH THE YEARS, BOTH THE APPEALS WERE HEARD TOGETHER AND NOW DECIDED BY THIS CONSOLIDATED ORDER. 3. FIRST COMMON GROUND TAKEN IN BOTH THE YEARS RELATE S TO VALIDITY OF REOPENING U/S 147 OF THE ACT, ON TH E PLEA THAT NO APPROVAL WAS TAKEN AS REQUIRED U/S 151 OF THE INCOM E-TAX ACT, 1961. IT WAS CONTENDED BY THE LD. AUTHORIZED REPRES ENTATIVE THAT NOTICE U/S 148 WAS ISSUED ON 14.2.2007 I.E. AF TER FOUR YEARS FROM THE END OF ASSESSMENT YEAR 2000-01 AND 2 001-02 AND THAT ASSESSMENT ORDER DOES NOT MENTION THAT APP ROVAL OF JCIT HAS BEEN OBTAINED AS REQUIRED U/S 151(2). THUS , REASSESSMENT WAS WITHOUT JURISDICTION AND FOR THIS PURPOSE RELIANCE WAS PLACED ON THE DECISION OF DR. SHASHIKA NT GARG, 152 TAXMAN 308. 4. THE LD. SENIOR D.R. WAS ASKED TO PRODUCE THE NECESSARY APPROVAL. THE LD. SENIOR D.R. PLACED ON R ECORD LETTER DATED 12.9.2011 SENT BY THE CONCERNED AO, WHEREIN A PPROVAL FOR ASSESSMENT YEAR 2000-01 WAS SOUGHT FROM DY. CIT . AS PER LETTER DATED 14.2.2007, NECESSARY APPROVAL WAS GRAN TED FOR THE ASSESSMENT YEAR 2000-01 FOR THE PROPOSAL U/S 147(A) . -: 3: - 3 HOWEVER, THE LD. SENIOR D.R. COULD NOT SHOW ANY APP ROVAL U/S 151(2) WITH RESPECT TO ASSESSMENT YEAR 2001-02. WIT HOUT SUCH APPROVAL, REOPENING OF ASSESSMENT AFTER FOUR YEARS WAS NOT VALID. ACCORDINGLY, THE APPEAL FOR THE ASSESSMENT Y EAR 2001-02 IS ALLOWED ON THE PLEA OF INVALIDITY OF REOPENING O F ASSESSMENT WITHOUT OBTAINING REQUIRED SANCTION U/S 151(2). 5. IN THE RESULT, THE APPEAL FOR THE ASSESSMENT YEAR 2 001- 02 IS ALLOWED. 6. IN THE ASSESSMENT YEAR 2000-01, THE ASSESSMENT WAS REOPENED ON THE PLEA THAT ALONGWITH THE RETURN OF I NCOME ASSESSEE HAS NOT SUBMITTED SUPPLEMENTARY PARTNERSHI P DEED FOR PAYMENT OF REMUNERATION TO THE PARTNERS. AFTER REOPENING, ASSESSMENT WAS FRAMED U/S 144 IN THE CAPACITY OF A. O.P. AND THE PAYMENT OF PARTNERS REMUNERATION WAS DECLINED. THE LD. AUTHORIZED REPRESENTATIVE DREW OUR ATTENTION TO THE ACKNOWLEDGEMENT FOR FILING OF RETURN FOR THE ASSESS MENT YEAR 2000-01 WHEREIN FACT OF PARTNERSHIP DEED HAVING BEE N ENCLOSED WITH THE RETURN WAS DULY MENTIONED, ACCORD INGLY, IT WAS PLEADED THAT DECLINE OF CLAIM OF REMUNERATION O F RS. 3 -: 4: - 4 LAKHS WHICH WAS DULY AUTHORIZED BY SUPPLEMENTARY PARTNERSHIP DEED WAS NOT JUSTIFIED. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. F ROM THE RECORD, WE FIND THAT THE ASSESSEE HAS EXECUTED PART NERSHIP DEED ON 1.10.1996, WHEREIN ALL THE PARTNERS WERE AU THORIZED TO HAVE REMUNERATION. A SUPPLEMENTARY DEED WAS EXEC UTED ON 1.4.1999, WHEREIN THREE PARTNERS WERE AUTHORIZED TO HAVE REMUNERATION. TOTAL REMUNERATION PAYABLE TO THESE T HREE PARTNERS WAS RS. 3 LAKHS. HOWEVER, THE AO DECLINED THE SAME ON THE PLEA THAT ASSESSMENT WAS FRAMED U/S 144 FOR NON- APPEARANCE OF THE ASSESSEE. WE FOUND THAT THE ASSES SEE FIRM WAS EARLIER DOING BUSINESS FROM ADDRESS 1008, SUDAM A NAGAR, INDORE. IT SHIFTED ITS ADDRESS TO VILLAGE BIQUISGAN J, DISTRICT SEHORE, AND IT WAS DULY INTIMATED TO THE AO WHILE R ETURN U/S 148 WAS FILED. SINCE THE NEW ADDRESS WAS WELL KNOWN TO THE AO, HE SHOULD HAVE SERVED THE NOTICE ON THE ASSESSE E AT CHANGED ADDRESS. HOWEVER, NOTICE WAS NOT SERVED ON THE ASSESSEE, BUT IT WAS SERVED ON M/S. M. MUNSHI & CO. , C. A., INDORE. ORDER PASSED BY THE ASSESSING OFFICER U/S 1 44 DATED -: 5: - 5 5.12.2007, DISALLOWING CLAIM OF REMUNERATION U/S 40 (B) WAS NOT PROPER, SINCE NO NOTICE WAS SERVED ON THE ASSES SEE AND, THEREFORE, ASSESSEE COULD NOT RESPOND. IN THE INTER EST OF JUSTICE, WE RESTORE THIS GROUND TO THE FILE OF AO T O VERIFY THE ORIGINAL SUPPLEMENTARY DEED AUTHORIZING PAYMENT OF REMUNERATION TO THE PARTNERS AND TO ALLOW THE SAME. 8. IN VIEW OF THE ASSESSMENT HAVING FRAMED U/S 144, TH E GROUND RAISED WITH REGARD TO AD HOC ADDITION OF RS. 1 LAKH IS ALSO RESTORED BACK TO THE FILE OF THE AO FOR DECIDI NG AFRESH AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. 9. IN THE RESULT, THE APPEAL FOR THE ASSESSMENT YEAR 2 000- 01 IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 20 TH OCTOBER, 2011. SD/- SD/- (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED 20 TH OCTOBER, 2011. CPU* 1720