ACIT CIR 6(3)(2), MUMBAI V. KRISHIRAJ TRADING LTD, MUMBAI

ITA 452/MUM/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4536 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2012-2013
• Appeal Filed On: 20-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH JAN GP ANGI
• Assessee Lawyers: AJAY NAGPAL
• Keywords: Double taxation relief; Competent authority; Set aside
• Section: 143(3); 153; 90; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.452/MUM/2017(A.Y.2012-13) DY.COMMISSIONER OF INCOME TAX,CC.3(3), CENTRAL RANGE -3, ROOM NO.1923, 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI 400 021 ...... APPELLANT VS. M/S. MGN AGRO PROPERTIES PVT. LTD., (PRIOR TO AMALGAMATION KNOWN AS KRISHIRAJ TRADING LTD.) B-9,TRADE PREMISES,KAMALA MILLS COMPOUND, SENAPATHI BAPAT MARG, LOWER PAREL,MUMBAI 400013 PAN : AAACK2257N ..... RESPONDENT APPELLANT BY : SHRI NARENDRA SINGH JANGPA NGI, RESPONDENT BY : SHRI AJAY NAGPAL DATE OF HEARING : 03/02/2020 DATE OF PRONOUNCEMENT : 07/02/2020 ORDER PER VIKAS AWASTHY, JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-12, MUMBAI [IN SHORT THE CIT(A) ] DATED 25/11/2016 FOR ASSESSMENT YEAR 2012-13. 2. SHRI NARENDRA SINGH JANGAPANGI, REPRESENTING THE DE PARTMENT SUBMITTED THAT THE CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE M ERELY ON THE GROUND THAT THE ASSESSMENT ORDER DATED 17/03/2016 PASSED UNDER SECT ION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) IS BEYOND TIME LIM IT PRESCRIBED UNDER SECTION 153 2 ITA NO.452/MUM/2017(A.Y.2012-13) OF THE ACT. THE LD.DEPARTMENTAL REPRESENTATIVE SU BMITTED THAT THE CIT(A) HAS FAILED TO TAKE INTO CONSIDERATION THE FACT THAT THE CASE OF ASSESSEE WAS REFERRED BY THE COMPETENT AUTHORITY, I.E. JOINT SE CRETARY, FOREIGN TAX AND TAX RESEARCH DIVISION, MINISTRY OF FINANCE, GOVERNMENT OF INDIA FOR SEEKING INFORMATION FROM COMMISSIONER OF TAXATION, MINISTRY OF FINANCE, TAX DEPARTMENT, REPUBLIC OF CYPRUS UNDER THE EXCHANGE OF INFORMATION ARTICLE OF INDO-CYPRUS DTAA. TO SUPPORT HIS CONTENT THE LD. DEPARTMENTAL REPRESENTATIVE REFERRED TO COMMUNICATIONS DATED 25 /03/2015 AND 26/03/2016. THE LD.DEPARTMENTAL REPRESENTATIVE FU RTHER POINTED THAT WHENEVER SUCH INFORMATION IS SOUGHT, THE PROVISIONS OF EXPLANATION-1 TO CLAUSE(VIII) TO SECTION 153(3) OF THE ACT ARE ATTRA CTED AND THE TIME PERIOD FOR COMPLETING THE ASSESSMENT IS ENLARGED. THE LD.DEPA RTMENTAL REPRESENTATIVE SUBMITTED THAT IN THE PRESENT CASE, THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED WITHIN THE EXTENDED TIME PERIOD A S PROVIDED IN EXPLANATION -1, CLAUSE(VIII). THE LD.DEPARTMENTAL REPRESENTATI VE PRAYED THAT THE IMPUGNED ORDER MAY BE SET ASIDE AND THE APPEAL MAY BE RESTOR ED TO THE FILE OF CIT(A) FOR ADJUDICATION ON MERITS. 3. SHRI AJAY NAGPAL, APPEARING ON BEHALF OF THE AS SESSEE STATED THAT, REFERENCE WAS MADE FOR SEEKING INFORMATION UNDE R EXCHANGE OF INFORMATION ARTICLE OF INDO-CYPRUS DTAA WAS NEITH ER IN THE KNOWLEDGE OF ASSESSEE NOR THE CIT(A). THE LD. AUTHORIZED REPR ESENTATIVE OF THE ASSESSEE FAIRLY SUBMITTED THAT THE CIT(A) HAS ALLOWED THE AP PEAL OF ASSESSEE ON THE LEGAL GROUND ALONE WITHOUT VISITING MERITS OF THE ADDITION. 4. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTA TIVES OF BOTH SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE ASSESSING OFFICER 3 ITA NO.452/MUM/2017(A.Y.2012-13) PASSED ASSESSMENT ORDER UNDER SECTION 143(3) OF T HE ACT FOR ASSESSMENT YEAR 2012-13 ON 17/03/2016. AS PER THE PROVISIONS OF SE CTION 153(1) OF THE ACT, THE TIME LIMIT FOR PASSING SCRUTINY ASSESSMENT ORDER IN THE NORMAL COURSE WOULD HAVE EXPIRED ON 31/03/2015. HOWEVER, IN THE PRESEN T CASE THE TIME LIMIT FOR PASSING ASSESSMENT ORDER GOT EXTENDED BY VIRTUE OF OPERATION OF EXPLANATION-I CLAUSE (VIII) TO SECTION 153 OF THE ACT. AS PER S ECTION 153 EXPLANATION-1, CLAUSE(VIII), IF REFERENCE IS MADE BY A COMPETENT A UTHORITY UNDER DTAA, THE TIME LIMIT FOR PASSING ASSESSMENT ORDER GETS EXTEND ED BY A PERIOD OF ONE YEAR OR TILL THE DATE ON WHICH THE INFORMATION REQUESTED IS LAST RECEIVED BY PCIT OR CIT, WHICHEVER IS LESS. FOR THE READY REFERENCE TH E RELEVANT PROVISIONS I.E. CLAUSE (VIII) AS IT WAS APPLICABLE DURING THE IMP UGNED ASSESSMENT YEAR IS REPRODUCED HEREIN BELOW:- EXPLANATION 1.- IN COMPUTING THE PERIOD OF LIMITAT ION FOR THE PURPOSE OF THIS SECTION (I) XXXXXXXXXXXXXX (II)XXXXXXXXXXXXXXX (VIII) THE PERIOD COMMENCING FROM THE DATE ON WHICH A REFERENCE OR FIRST OF THE REFERENCES FOR EXCHANGE OF INFORMATION IS MADE BY AN AUTHORITY COMPETENT UNDER AN AGREEMENT REFERRED TO IN SECTION 90 OR SECTION 90A AND ENDING WITH THE DATE ON WHICH INFORMATION REQUESTED IS LAST RECEIVED BY THE PRINC IPLE COMMISSIONER OR COMMISSIONER OR A PERIOD OF ONE YEAR, WHICHEVER IS LESS, IN THE INSTANT CASE, AS PER THE DOCUMENTS AVAILABL E ON RECORD, THE COMPETENT AUTHORITY I.E. JOINT SECRETARY (FT&TR-1), MINISTRY OF FINANCE, FOREIGN TAX & TAX RESEARCH DIVISION VIDE LETTER DATED 25/03/2015, SO UGHT INFORMATION IN RESPECT OF ASSESSEE FROM COMMISSIONER OF TAXATION, MINISTRY OF FINANCE, TAX DEPARTMENT, REPUBLIC OF CYPRUS. THE INFORMATION WAS RECEIVED FROM THE COMPETENT AUTHORITY OF CYPRUS ON 21/07/2016. THUS, IN THE INSTANT CASE TIME LIMIT FOR PASSING THE ASSESSMENT ORDER GOT EXTENDED BY VIRTUE OF PROVISIONS 4 ITA NO.452/MUM/2017(A.Y.2012-13) CONTAINED IN EXPLANATION-I CLAUSE(VIII) TO SECTION 153 OF THE ACT BY ONE I.E. UPTO 31/03/2016. UNDISPUTEDLY, THE ASSESSING OFFICER PAS SED THE ASSESSMENT ORDER WITHIN THE EXTENDED TIME. 4.1 WE FIND MERIT IN THE CONTENTIONS OF THE LD.DE PARTMENTAL REPRESENTATIVE. OSTENSIBLY, THE CIT(A) WAS OBLIVIO N OF THE FACT THAT INFORMATION WAS SOUGHT BY THE COMPETENT AUTHORITY U NDER DTAA IN RESPECT OF ASSESSEE. THE IMPUGNED ORDER IS SET-ASIDE. THE AP PEAL IS RESTORED BACK TO THE FILE OF CIT(A) FOR ADJUDICATION ON MERITS. CONSEQU ENTLY, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY , THE 07 TH DAY OF JANUARY, 2020. SD/- SD/- (RIFAUR RAHMAN) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 07/02/2020 VM , SR. PS(O/S) COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI