M/s. Kumbhat Exports, JODHPUR V. DCIT, JODHPUR

ITA 425/JODH/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3090 (ITAT-JODHPUR)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-07-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 14-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N A JOSHI
• Assessee Lawyers: R R SI NGHVI
• Keywords: Reassessment proceedings
• Section: 143(3); 80HHC; 147; 148

Judgement Text

[1] IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N. K. SAINI, ACCOUNTANT MEMBER I.T.A. NO.425/JODH/2012 ASSESSMENT YEAR:2003-04 M/S KUMBHAT EXPORTS, VS. DY. C.I.T.-1, JODHPUR. JODHPUR. PAN:AAEFK1440N (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R. R. SINGHVI, ADVOCATE RESPONDENT BY : SHRI N. A. JOSHI, D.R. DATE OF HEARING : 09/07/2013 DATE OF PRONOUNCEMENT : 10/07/2013 ORDER PER N. K., SAINI: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER DATED 01/10/2012 OF CIT(A), JODHPUR. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1. THAT THE LEARNED A.O. (DCIT CIRCLE 1, JODHPUR) HAS GROSSLY ERRED IN LAW AS WELL AS ON FACTS IN PASSING THE IMPUGNED ORDER OF REASSESSMENT DATED 16/12/2010 U/S 143(3)/147 OF THE I.T. ACT, 1961 WHICH IS ILLEGAL A ND BAD IN LAW. 2. THAT THE ACTION U/S 147/148 HAS WRONGLY BEEN INI TIATED AFTER THE EXPIRY OF PRESCRIBED TIME LIMIT OF 4 YEAR S AND HENCE THE PASSING OF CONSEQUENTIAL IMPUGNED ORDERS ARE ILLEGAL AND BAD IN LAW. [2] 3. THAT THE NOTICE U/S 148 ISSUED AND SERVED IN THI S CASE IS ALSO ILLEGAL AND BAD IN LAW. 4. THAT THE LEARNED AUTHORITIES BELOW HAVE EARED IN LAW AS WELL AS ON FACTS IN NOT CONSIDERING THE AMOUNT OF D DB OF RS.1,91,797/- FOR COMPUTING THE GROSS TOTAL INCOME ELIGIBLE FOR THE DEDUCTION/EXEMPTION U/S 80HHC AND 80IB. 5. THAT THE LEARNED CIT(APPEAL) HAS ALSO ERRED IN N OT ALLOWING THE GROUND OF APPEAL IN RESPECT OF DEDUCTI ON U/S 80HHC IN FULL. THOUGH THE GROUND IS PARTLY ALLOWED BUT NO FINDING HAS BEEN GIVEN IN RESPECT OF THE COMPUTA TION OF GROSS TOTAL INCOME AS COMPUTED IN THE PRESENT IMPUGNED ASSESSMENT ORDER AT RS.56,42,863/- IN PLAC E OF THE GROSS TOTAL INCOME ORIGINALLY COMPUTED AT RS.58,06,214/-. 6. THAT THE APPELLANT CRAVES LEAVE TO AMEND ALTER O R TO ADD ANY OF GROUNDS OF APPEAL HEREIN ABOVE, AT THE TIME OF HEARING OF THIS APPEAL OR BEFORE SUCH HEARING AS TH E CIRCUMSTANCES MAY REQUIRE TO DO SO. 2. GROUND NO. 1 TO 3 RELATE TO THE LEGAL ISSUE CONC ERNING REOPENING U/S 147 OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) AFTER THE EXPIRY OF PRESCRIBED TIME LIMIT OF FOUR YEARS. THI S ISSUE WAS ARGUED AT THE FIRST INSTANCE. 3. THE FACTS RELATED TO THIS ISSUE, IN BRIEF, ARE T HAT THE ASSESSEE FILED THE RETURN OF INCOME ON 27/11/2003 DECLARING TOTAL INCO ME OF RS.14,03,513/-. THE ASSESSMENT HOWEVER WAS FRAMED AT AN INCOME OF R S.14,72,890/- ON 30/01/2006 U/S 143(3) OF THE ACT. THEREAFTER, A NO TICE U/S 148 OF THE ACT WAS ISSUED ON 29/03/2010. THE ASSESSEE CHALLENGED THE REOPENING VIDE LETTER DATED 26/10/2010. THE ASSESSING OFFICER COM PLETED THE ASSESSMENT AT AN INCOME OF RS.22,22,760/- BUT DID NOT COMMENT ON THE SUBMISSIONS OF [3] THE ASSESSEE RELATING TO REOPENING OF THE ASSESSMEN T. THE ASSESSEE ALSO CHALLENGED THE ISSUANCE OF NOTICE U/S 148 OF THE AC T BEFORE THE LEARNED CIT(A) AND STATED THAT THE TIME LIMIT FOR TAKING AN ACTION U/S 147 AND ISSUANCE OF NOTICE U/S 148 GOT EXPIRED ON 31/03/200 8. THE LEARNED CIT(A) JUSTIFIED THE ACTION OF THE ASSESSING OFFICER FOR R EOPENING THE ASSESSMENT U/S 147 OF THE ACT BUT DID NOT COMMENT UPON THE SUB MISSIONS OF THE ASSESSEE THAT IT WAS BARRED BY LIMITATION. 4. NOW THE ASSESSEE IS IN APPEAL. DURING THE COURS E OF HEARING LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THIS I SSUE IS COVERED BY THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF AZTEC SHIVA HANDICRAFTS & ARTS (P) LTD. VS. ACIT, I.T.A. NO.66/JU/2012, ORD ER DATED 12/10/2012. 5. IN HIS RIVAL SUBMISSIONS THE LEARNED D.R. ALTHOU GH SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW BUT COULD NOT CONTR OVERT THE AFORESAID CONTENTION OF LEARNED COUNSEL FOR THE ASSESSEE. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IT IS NOTICED THAT THE PRESENT ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 12/10/2012 IN THE CASE OF AZTEC SHIVA HANDICRAFTS & ARTS (P) LTD. (SUPRA) WHEREIN THE RELEVANT FINDING HAS BEEN GIVEN IN PARA 5, WHICH READS AS UNDER: 5. NOW COMING TO THE LEGAL OBJECTION OF THE ASSESS EE REGARDING INITIATION OF REASSESSMENT PROCEEDINGS AF TER LAPSE OF FOUR YEARS, WHEN ORIGINAL ASSESSMENT WAS COMPLETED U/S 143 (3) OF THE ACT AND THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSING ALL FACTS TRULY AND FULLY NE CESSARY FOR [4] ASSESSMENT, FIRST PROVISO APPENDED TO SECTION 147 C OMES TO THE RESCUE OF THE ASSESSEE. THE ASSESSMENT UNDER CONSIDERATION 2003-04 WHICH ENDED ON 31.3.2004, THI S PERIOD PERMITTED UNDER THE ABOVE PROVISO EXPIRES ON 31.3.2 008. NOTICE U/S 148 WAS ISSUED ON 17.3.2010 WHICH IS CLE ARLY AFTER A LAPSE OF FOUR YEARS. THE SOLE REASON FOR ISSUANCE OF NOTICE AS RECORDED BY THE A.O. IS THAT THE ASSESSEE DID NOT S UBMIT REPORT IN FORM NO. 10CCB. THERE IS NO ALLEGATION TH AT THE ASSESSEE DID NOT DISCLOSE FULLY AND TRULY ANY MATER IAL FACT NECESSARY FOR MAKING ASSESSMENT. SO, THIS PROVISO I S DIRECTLY APPLICABLE. THUS, THE ACTION TAKEN BY THE A.O. AFTE R PERMITTED TIME IS BARRED BY LIMITATION AND VOID AB INITIO. RE ASSESSMENT PROCEEDINGS AND NOTICE ISSUED U/S 148 BEING TIME BA RRED, IS LIABLE TO BE QUASHED. IN ANY CASE, EVEN IF IT IS PR ESUMED THAT THE AUDIT REPORT IN FORM NO. 10CCB WAS NOT PRODUCED ALONG WITH RETURN, IT IS, AT BEST, A TECHNICAL BREACH OF PROCEDURAL LAW ONLY AND IN VIEW OF THE HON'BLE GUJARAT HIGH COURT DECISION IN THE CASE OF EAGLE FASHION [P] LTD. VS. DCIT REPORTE D IN 40 DTR 1 [GUJ] WHEREIN IT HAS BEEN HELD THAT IF THE AU DIT REPORT WAS FILED DURING ASSESSMENT PROCEEDINGS, EVEN THEN THE DEDUCTION SHOULD HAVE BEEN ALLOWED. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. A. R. ENTERPRISES P. LTD REPORTED IN 255 ITR 121 [RAJ] AL SO COMES TO THE RESCUE OF THE ASSESSEE. ACCORDINGLY, THE NOTICE ISSUED U/S 148 IS CLEARLY TIME BARRED AND, THEREFORE, IT IS QU ASHED AND CONSEQUENT REASSESSMENT ORDER IS ALSO QUASHED. 6.1 IN THE PRESENT CASE ALSO THE ASSESSMENT YEAR UN DER CONSIDERATION IS ASSESSMENT YEAR 2003-2004 WHICH ENDED ON 31/03/2004 AND THE REOPENING, AS PER THE PROVISIONS CONTAINED IN FIRS T PROVISO APPENDED TO SECTION 147 OF THE ACT, COULD HAVE BEEN DONE UPTO 3 1/02/2008. HOWEVER, THE NOTICE U/S 148 WAS ISSUED TO THE ASSESSEE ON 29 /03/2010 BY THE THEN ASSESSING OFFICER, THEREFORE, IT WAS BARRED BY LIMI TATION. SO RESPECTFULLY FOLLOWING THE AFORESAID REFERRED TO ORDER IN THE CA SE OF AZTEC SHIVA HANDICRAFTS & ARTS (P) LTD. (SUPRA), THE REASSESSME NT FRAMED BY THE ASSESSING OFFICER IS QUASHED SINCE IT WAS BARRED BY LIMITATION. SINCE WE [5] HAVE DECIDED THE LEGAL ISSUE IN FAVOUR OF THE ASSES SEE AND THE REASSESSMENT ORDER IS QUASHED, THEREFORE, NO FINDIN GS HAVE BEEN GIVEN ON MERIT ON OTHER ISSUES RAISED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 10/07/2013) SD/. SD/. ( HARI OM MARATHA ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:10/07/2013 *CL SINGH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. D.R. ASSISTANT REGISTRAR