M/s Bhatnagar Opticals, Gwalior V. I.T.O., Ward-2(1), Gwalior

ITA 431/AGR/2012

• Counselvise Citation: 43120314 RSA 2012
• Duration Of Justice: 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 23-10-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 10-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MAHESH AGARWAL
• Keywords: Reopening of assessment; Reassessment proceedings
• Section: 142(1); 133A; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 428 TO 431/AGRA/2012 ASSTT. YEAR : 2002-03 TO 2005-06 M/S. BHATNAGAR OPTICALS, VS. INCOME-TAX OFFICE R, SANJAY COMPLEX, WARD 2(1), GWALIOR. JAYENDRAGANJ, GWALIOR. (PAN : AAGFB 0508 C) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MAHESH AGARWAL, C.A. RESPONDENT BY : SHRI WASEEM ARSHAD, SR. D.R. DATE OF HEARING : 23.10.2012 DATE OF PRONOUNCEMENT OF ORDER : 23.10.2012 ORDER PER BENCH: ALL THE APPEALS BY THE ASSESSEE ARE DIRECTED AGAIN ST THE COMMON ORDER OF LD. CIT(A), GWALIOR DATED 28.06.2012 FOR THE ASSESS MENT YEARS 2002-03 TO 2005- 06, CHALLENGING THE CONFIRMATION OF LEVY OF PENALTY U/S. 271(1)(B) OF THE IT ACT. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT IN ALL T HE ABOVE ASSESSMENT YEARS, THE AO INITIATED THE REASSESSMENT PROCEEDINGS U/S. 148 OF THE IT ACT ON THE BASIS OF SOME MATERIAL FOUND DURING THE COURSE OF SURVEY PRO CEEDINGS CONDUCTED U/S. 133A OF THE IT ACT IN THE PREMISES OF THE ASSESSEE. THE AO NOTED THAT THE ITA NO. 428 TO 431/AGRA/2012 2 ASSESSEE FAILED TO COMPLY WITH THE STATUTORY NOTICE S AND ACCORDINGLY, SIMULTANEOUSLY, ALL THE ASSESSMENT PROCEEDINGS WERE CONDUCTED FOR ALL THE ASSESSMENT YEARS AND THE AO FRAMED RE-ASSESSMENT OR DERS U/S. 144/148 OF THE IT ACT VIDE ORDERS DATED 16.12.2009. THE AO IN VIEW OF THE NON-COMPLIANCE OF THE NOTICES ALSO INITIATED PROCEEDINGS U/S. 271(1)(B) O F THE IT ACT. VIDE SEPARATE PENALTY ORDERS, THE AO OBSERVED THAT THE ASSESSEE F AILED TO COMPLY WITH THE NOTICE ISSUED ON 16.09.2009 AND 27.11.2009 FOR COMPLIANCE ON 07.10.2009 AND 07.12.2009. THE AO, ACCORDINGLY, IMPOSED PENALTY OF RS.10,000/- EACH FOR BOTH THE DEFAULTS. THE PENALTY WERE CHALLENGED BEFORE TH E LD. CIT(A) AND THE LD. CIT(A) ALLOWED THE APPEALS OF THE ASSESSEE PARTLY A ND REDUCED THE PENALTY OF RS.40,000/- AS AGAINST THE PENALTY IMPOSED OF RS.80 ,000/- IN ALL THE ASSESSMENT YEARS. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PENALTY NOW LEFT FOR CONSIDERATION IS FOR THE NOTICE ISSUED ON 27.11.200 9 FOR COMPLIANCE ON 07.12.2009 BECAUSE THE LD. CIT(A) FOR ONE DEFAULT C ANCELLED THE PENALTY. APART FROM OTHER SUBMISSIONS ON MERITS, THE LD. COUNSEL F OR THE ASSESSEE SUBMITTED THAT IN ALL THE ASSESSMENT YEARS UNDER APPEALS, THE LD. CIT(A) CANCELLED THE RE- ASSESSMENT ORDERS ON MERITS AND HELD THEM INVALID U NDER LAW. THE REVENUE PREFERRED APPEALS BEFORE THE TRIBUNAL IN ITA NO. 16 9 TO 172/AGRA/2011 FOR ALL THE ITA NO. 428 TO 431/AGRA/2012 3 ASSESSMENT YEARS UNDER APPEAL AND ALL THE DEPARTMEN TAL APPEALS HAVE BEEN DISMISSED BY THE TRIBUNAL VIDE ORDER DATED 23.03.20 12. COPY OF THE ORDER OF THE TRIBUNAL IS FILED IN THE PAPER BOOK. HE HAS, THEREF ORE, SUBMITTED THAT NO PENALTY CAN BE LEVIED AGAINST THE ASSESSEE IN SUCH CIRCUMST ANCES. ON THE OTHER HAND, THE LD. DR RELIED UPON THE ORDER OF THE LD. CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. SECTION 271(1)(B) PROVIDES THAT IF THE AO OR THE CO MMISSIONER (APPEALS) OR THE COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT IS SATISFIED THAT ANY PERSON HAS FAILED TO COMPLY WITH A NOTICE UNDER SECTION 115(2)WD OR U/S. 115(2)WE OR UNDER SECTION 142(1) OR 143(2) OR FAILE D TO COMPLY WITH THE DIRECTIONS ISSUED UNDER SECTION 142(2A), HE MAY DIR ECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY A SUM OF RS.10,000/- FOR EACH SUC H FAILURE IN ADDITION TO TAX, IF ANY, PAYABLE. IT IS, THEREFORE, NECESSARY THAT THER E SHOULD BE SATISFACTION OF THE INCOME-TAX AUTHORITIES REFERRED TO ABOVE IN THE COU RSE OF ANY PROCEEDINGS UNDER THIS ACT. THE AO LEVIED THE PENALTY FOR NON-COMPLIA NCE OF THE TERMS OF THE NOTICES ISSUED IN THE RE-ASSESSMENT PROCEEDINGS U/S . 148 OF THE ACT. HOWEVER, THE LD. CIT(A) QUASHED THE RE-ASSESSMENT PROCEEDINGS U/ S. 147/148 OF THE IT ACT, HOLDING THEM TO BE INVALID. THE REVENUE DEPARTMENT PREFERRED APPEALS BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 23.03.20 12 (SUPRA) DISMISSED THE ITA NO. 428 TO 431/AGRA/2012 4 DEPARTMENTAL APPEALS. THE FINDINGS OF THE TRIBUNAL IN PARA 4 TO 6 ARE REPRODUCED AS UNDER : 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE S UBMITTED BEFORE THE AO THAT THE RETURN ALREADY FILED U/S. 139 FOR RELEV ANT ASSESSMENT YEARS, MAY BE TREATED AS THE RETURNS FILED IN RESPO NSE TO THE NOTICES U/S. 148 OF THE IT ACT. IT IS ALSO NOT IN DISPUTE T HAT THE ASSESSEE REQUESTED THE AO TO SUPPLY THE COPY OF THE REASONS FOR REOPENING OF ASSESSMENTS AND THAT THE AO DID NOT SUPPLY THE REAS ONS TO THE ASSESSEE FOR REOPENING OF THE ASSESSMENT. DURING TH E COURSE OF ARGUMENTS ALSO, THE SUBMISSIONS OF THE LD. DR CLEAR LY SUPPORT THE FINDING OF THE LD. CIT(A) THAT THERE IS NO REASONS FOR REOPENING OF ASSESSMENT, HAVING BEEN SUPPLIED TO THE ASSESSEE. H ONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VIDESH SANCHAR NI GAM LTD., 340 ITR 66 (BOM.) HELD THAT REASONS FOR RE-ASSESSMENT N OT FURNISHED TO THE ASSESSEE BEFORE COMPLETION OF ASSESSMENT, REASS ESSMENT NOT VALID. THE JUDGMENT OF THE BOMBAY HIGH COURT IS REP RODUCED AS UNDER : 1. WHETHER THE TRIBUNAL WAS JUSTIFIED IN CANCELING THE REOPENING OF THE ASSESSMENT IS THE QUESTION RAISED IN THIS APPEAL. 2. THE FINDING OF FACT RECORDED BY THE INCOME-TAX APPELLATE TRIBUNAL IS THAT IN THE PRESENT CASE, THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT THOUGH REPEATEDLY ASKED BY THE ASSESSEE WERE FURNIS HED ONLY AFTER COMPLETION OF THE ASSESSMENT. THE TRIBUN AL FOLLOWING THE JUDGMENT OF THIS COURT IN THE CASE OF CIT VS. FOMENTO RESORTS AND HOTELS LTD., INCOME-TAX APPEAL NO. 71 OF 2006 DECIDED ON NOVEMBER 27, 2006, HAS HELD THAT THOUGH THE REOPENING OF THE ASSESSMEN T IS WITHIN THREE YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, SINCE THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT WERE NOT FURNISHED TO T HE ASSESSEE TILL THE COMPLETION OF ASSESSMENT, THE REASSESSMENT ORDER CANNOT BE UPHELD. MOREOVER, SPECIAL LEAVE PETITION FILED BY THE REVENUE AGAINST THE ITA NO. 428 TO 431/AGRA/2012 5 DECISION OF THIS COURT IN THE CASE OF CIT VS. FOMEN TO RESORTS AND HOTELS LTD., HAS BEEN DISMISSED BY THE APEX COURT, VIDE ORDER DATED JULY 16, 2007. IN THIS VIEW OF THE MATTER, THE PRESENT APPEAL IS ALSO DISMISSED WITH NO ORDER AS TO COSTS. 5. THE ABOVE JUDGMENT CLEARLY MENTIONS THAT HONBLE HIGH COURT FOLLOWED THEIR EARLIER DECISION TO ARRIVE AT THE DECISION IN THE MATTER, WHICH HAS ALSO BEEN CONFIRMED BY THE HONBL E SUPREME COURT BY DISMISSING THE SPECIAL LEAVE PETITION FILE D BY THE REVENUE. THE ISSUE IS, THEREFORE, SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VIDESH SANCHAR NIGAM L TD. (SUPRA). NO CONTRARY DECISION IS BROUGHT TO OUR NOTICE. THE DEC ISION OF MADRAS HIGH COURT RELIED UPON BY THE LD. DR IS CLEARLY DIS TINGUISHABLE, IN WHICH THE REASONS FOR REOPENING OF ASSESSMENT HAVE BEEN SUPPLIED BY THE AO TO THE ASSESSEE. IN VIEW OF THIS MATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN DECIDIN G THE ISSUE IN FAVOUR OF THE ASSESSEE. 6. IN THE RESULT, ALL THE DEPARTMENTAL APPEALS ARE DISMISSED. 5. CONSIDERING THE ABOVE FACT THAT RE-ASSESSMENT PR OCEEDINGS, IN WHICH STATUTORY NOTICES WERE NOT COMPLIED WITH, HAVE ALRE ADY BEEN DECLARED NULL AND VOID BY THE LD. CIT(A) BY QUASHING THE SAME, THEREF ORE, NOTHING SURVIVES IN FAVOUR OF THE REVENUE. ORDER OF THE LD. CIT(A) HAS BEEN CONFIRMED BY THE TRIBUNAL. CONSIDERING THE ABOVE FACTS, WE ARE OF TH E VIEW THAT THE PENALTY IS NOT LEVIABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE . WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENA LTY LEVIED AND CONFIRMED U/S. ITA NO. 428 TO 431/AGRA/2012 6 271(1)(B) OF THE IT ACT. IN VIEW OF THE ABOVE FINDI NGS, THERE IS NO NEED TO DECIDE THE APPEALS ON MERITS. 6. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.10.2012. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY