ACIT 3(2)(2), MUMBAI V. NATIONAL BANK FOR AGRICULATURE AND RURAL DEVELOPEMENT, MUMBAI

ITA 4278/MUM/2016

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3543 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 21-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CONTEST SEPARA; ASSESSMENT YEAR S AY
• Assessee Lawyers: RURAL AGRICULTURE
• Keywords: Reopening of assessment; Tangible material; Reassessment proceedings; Set aside
• Section: 143(3); 119; 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUM AR AGGARWAL, AM ( HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO . 4278 / MUM/ 2016 ( / ASSESSMENT YEAR: 20 08 - 09 ) & ./ I.T.A. NO . 4279 / MUM/ 2016 ( / ASSESSMENT YEAR: 2009 - 10 ) ACIT - CENTRAL CIRCLE 3(2)(2) MUM BAI / VS. NATIONAL BANK FOR RURAL AGRICULTURE AND RURAL DEVELOPMENT C - 24, G BLOCK, BANDRA - KURLA COMPLEX BANDRA, MUMBAI 400 051 ./ ./ PAN/GIR NO. AA ACT - 4020 - G ( / APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI J EHANGIR D. MISTRY LD. SR. COUNSEL REVENUE BY : SHRI NARENDRA JANGPANGI LD. CIT DR / DATE OF HEARING : 14 /01/2021 / DATE OF PRONOUNCEMENT : 19/02/2021 / O R D E R PER MA HAVIR SINGH, VP: 1. AFORESAID APPEAL S BY REVENUE FOR ASSESSMENT YEAR S (AY) 20 08 - 09 & 2009 - 10 CONTEST SEPARATE ORDERS OF LEARNED FIRST APPELLATE AUTHORITY ON CERTAIN COMMON GROUNDS. H OWEVER, IT IS ADMITTED POSITION THAT ISSUES ARE IDENTICAL IN BOTH THE YEARS AND ADJUDICATION IN ANY ONE YEAR SHALL EQUALLY A PPLY TO OTHER YEAR ALSO. 2. THE APPEAL FOR AY 2008 - 09 ARISES OUT OF ORDER DATED 2 30/03/2016 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 8, MUMBAI, [IN SHORT CIT(A)], APPEAL NO.CIT(A) - 8/IT - 197/14 - 15 WHICH HAS QUASHED REASSESSMENT PROCEEDINGS ON L EGAL GROUNDS. AGGRIEVED THE REVENUE IS IN FURTHER APPEAL BEFORE US WITH FOLLOWING GROUNDS: - 1. WHETHER ON THE FACTS AND CIRCUMSTANCES AND IN LAW THE LD. CIT(A) WAS RIGHT IN HOLDING THAT THE REOPENING OF ASSESSMENT U/S. 147 WAS INVALID AND BAD IN LAW AND Q UASHING THE SAME? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES AND IN LAW THE LD. CIT(A) IS RIGHT IN HOLDING THE REOPENING OF ASSESSMENT U/S 147 AS INVALID AND BAD IN LAW WITHOUT APPRECIATING THE FACT THAT THE REOPENING OF ASSESSMENT WAS NOT ON THE BASIS OF C HANGE OF OPINION SINCE THE ISSUES ON WHICH REOPENING WAS MADE WERE NOT VERIFIED IN THE ORIGINAL ASSESSMENT? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES AND IN LAW THE LD. CIT(A) IS RIGHT HOLDING THE REOPENING OF ASSESSMENT U/S 147 AS INVALID AND BAD IN LAW W ITHOUT FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KALYANJI MAVJI & CO. V. CIT (1976) 102 ITR (SC), WHICH WAS SUBSEQUENTLY CONFIRMED IN INDIAN & EASTERN NEWSPAPER SOCIETY V. CIT (1979) 119 ITR 996 (SC) AND A.L.A. FIRM V. CIT (1991) 189 I TR 285 (SC)? 4. ON THE FACTS AND CIRCUMSTANCES AND IN LAW THE LD. CIT(A) ERRED IN NOT ADJUDICATING THE ISSUES RAISED BY THE ASSESSEE IN GROUND NO. 2 TO 3 OF THEIR APPEAL ON MERIT AND THEREFORE IT IS HUMBLY PRAYED THAT THE LD. CIT(A) MAY BE DIRECTED TO DECI DED THE ISSUES CONTAINED IN GROUND NO. 2 TO 3 ON MERIT? 5. THE APPEAL PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE LEARNED SR. COUNSEL FOR ASSESSEE, AT THE OUTSET, SUBMITTED THAT LD. CIT(A) HAS QUASHED THE REASSESSMENT PROCEEDINGS BY FOLLOWING APPELLATE ORDER FOR AY 2006 - 07. THE REVENUE ASSAILED THE ORDER FOR AY 2006 - 07 BEFORE THIS TRIBUNAL VIDE ITA NO.3649/MUM/2016 ORDER DATED 12/09/2018 WHEREIN THE COORDINATE BENCH DISMISSED REVENUE S APPEAL. IT HAS BEEN SUBMITTED THAT THE FACTS ARE QUITE SIMILAR IN THIS YEAR AND REASSESSMENT PROCEEDINGS HAVE BEEN TRIGGERED ON IDENTICAL REASONING. THE LD. CIT - DR SUPPORTED THE ASSESSMENT FRAMED BY LD.AO . 3 4. WE HAVE CAREFUL LY HEARD THE RIVAL SUBMISSIONS AND PERUSED RELEVANT MATERIAL ON R ECORD INCLUDING THE CITED ORDER O F TRIBUNAL IN ASSESSEE S OWN CASE FOR AY 2006 - 07. OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 5. THE MATERIAL FACTS ARE THAT A N ASSESSMENT WAS FRAMED AGAINST THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION U/S 143(3) R.W.S. 147 ON 24/02/2014 SO AS TO MAKE ADDITIONS OF INTEREST PAID BY THE ASSESSEE ON DEPOSITS UNDER R URAL INFRASTRUCTURE DEVELOPMENT FUND (RIDF). THE ORIGINAL ASSESSMENT W AS ALREAD Y COMPLETED U/S 143(3) ON 23/03/2010. THE CASE W A S REOPEN E D VIDE NOTICE U / S 148 DATED 26/03/2013 WHEREIN IT WAS ALLEGED THAT ASSESSEE CLAIMED INTEREST EXPENDITURE ON DEPOSITS UNDER RIDF AT FLAT RATE OF 6% IRRESPECTIVE OF ACTUAL RATES PAYABLE TO COMMERCIAL BANKS ON RIDF DEPOSIT PLACED BY BANKS WHICH WERE IN THE RANGE OF 3% - 6%. THUS , THE DIFFERENTIAL INTEREST ON RIDF DEPOSIT WAS NEITHER PAID NOR PAYABLE AND ACCORDINGLY, THERE WAS AN UNDER - ASSESSMENT OF INCOME. THOUG H THE ASSESSEE DEFENDED ITS STAND, HOWEVER, THE SAME COULD NOT FIND FAVOR WITH LD. AO WHO CHOSE TO INCREASE ASSESSEES INCOME TO THE EXTENT OF ALLEGED UNDER ASSESSMENT. 6. UPON FURTHER APPEAL, LD. CIT(A) QUASHED REASSESSMENT PROCEEDINGS BY RELYING UPON APPELLATE ORDER FOR AY 2006 - 07 WHEREIN IT WAS O BSERV ED THAT THERE WAS NO FRESH / NEW MATERIAL BEFORE LD. AO TO INITIATE REASS ESSMENT PROCEEDINGS. THE OPINION WAS FORMED ON THE BASIS OF SAME MATERIAL WHICH WAS AVAILABLE DURING SEC. 143(3) ASSESSMENT PROCEEDINGS. T HE REOPENING WOULD NOT BE PERMISSIBLE M ERELY ON THE BASIS OF NEW OPINION FORMED ON 4 SAME MATERIAL . FOLLOWING THE SAME, THE REASSESSMENT PROCEEDINGS WERE HELD TO BE AGAINST THE LAW IN THIS YEAR ALSO AND ACCORDINGLY, THE ISSUE ON MERITS WAS HELD TO BE MERELY ACADEMIC IN NATURE. AGGRIEVED, THE R EVE NUE IS IN FURTHER APPEAL BEFORE US. 7. WE FIND THAT THE REVENUE CHALLENGED THE FINDINGS GIVEN IN APPELLATE ORDER FOR AY 2006 - 07 BEFORE THIS TRIBUNAL VIDE ITA NO. 3649/MUM/2016 ORDER DATED 12/09/2018 WHEREIN COORDINATE BENCH DISMISSED THE REVENUES APPEAL B Y CONFIRMING THE APPELLATE ORDER. WE FIND THAT SIMILAR FACTS EXIST DURING THIS YEAR EXCEPT FOR THE FACT THAT REOPENING HAS BEEN DONE WITHIN 4 YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR. HOWEVER, THE SAME WOULD NOT MATERIALLY ALTER THE POSITION SINCE T H E ORIGINAL ASSESSMENT WAS FRAMED U/S 143(3). T HERE WAS NO FRESH / NEW TANGIBLE MATERIAL BEFORE LD. AO WHICH WOULD LEAD TO FORMATION OF BELIEF THAT CERTAIN INCOME ESCAPED ASSESSMENT. THE BELIEF WAS FORMED ON THE SAME MATERIAL WHICH WAS AVAILABLE DURING SEC. 143(3) ASSESSMENT PROCEEDINGS. IT IS SETTLED LAW THAT LD.AO HAS POWER TO R EASSESS BUT NO POWER TO REVIEW ITS OWN ORDER. THEREFORE, GOING BY THE RATIO OF CITED DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2006 - 07, WE DISMISS THE GROUNDS RAISED BY THE REVENUE AND CONFIRM THE STAND OF LEARNED FIRST APPELLATE AUTHORITY. 8. SIMILAR FACTS EXIST IN AY 2009 - 10 WHEREIN AN ASSESSMENT HAS BEEN FRAMED U/S 143(3) R.W.S. 147 ON 24/02/2014 TO DISALLOW INTEREST EXPENDITURE AND CERTAIN OTHER EXPENDITURE. THE ORIGINAL ASSESSMENT WAS FRAMED U/S 143(3) ON 13/12/2011. UPON FURTHER APPEAL, LD. CIT(A), FOLLOWING APPELLATE ORDER FOR AY 2006 - 0 7 IN SIMILAR MANNER , 5 QUASHED REASSESSMENT PROCEEDINGS. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 9. WE FIND THAT SIMILAR F ACTS AS IN AY 2008 - 09 EXISTS DURING THIS YEAR ALSO AND THEREFORE, OUR ADJUDICATION AS FOR AY 2008 - 09 SHALL MUTATIS - MUTANDIS APPLY TO THIS YEAR ALSO. RESULTANTLY, THE REVENUES APPEAL STAND DISMISSED. 10. BOTH THE APPEAL STANDS DISMISSED. O RDER PR ONOUNCED ON 19/2/21 SD/ - SD/ - (MANOJ KUMAR AGGARWAL) (MAHAVIR SINGH) / ACCOUNTANT MEMBER / VICE PRESIDENT MUMBAI; DATED : 19/2/21 SR.PS, SUDIP SARKAR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORD ER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI .