SHRI PARESH KUMAR JAIN, JAIPUR V. INCOME TAX OFFICER, WARD-6-3, JAIPUR

ITA 477/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2190 (ITAT-JAIPUR)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Principle of natural justice; Transactions in derivatives; Period of limitation; Question of law; Reassessment proceedings; Borrowed satisfaction; Set aside
• Section: 143(3); 133A; 143(2); 153; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 477/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2009-10 SHRI PARESH KUMAR JAIN, A-21, BAJAJ NAGAR, JAIPUR CUKE VS. ITO, WARD 6(3), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AFDPJ6938C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. VIKASH JAIN (CA) JKTLO DH VKSJ LS @ REVENUE BY : MS. CHANCHAL MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 17/03/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 20/03/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A), AJMER DATED 07.01.2019 WHEREIN THE ASSESSEE HAS TAK EN THE FOLLOWING GROUNDS OF APPEAL:- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT APPEALS ERRED IN CONFIRMING THE ACTION OF A DDITION OF RS. 1,68,310/- IN GROSS VIOLATION OF SUPREME COURTS DIRECTIONS AS CONTAINED IN THE DECISION IN GKN DRIVESHAFT FOR DIS POSAL OF OBJECTION RAISED FOR REOPENING OF THE ASSESSMENT PROCEEDINGS U/S 148 OF THE INCOME TAX ACT, 1961. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE LD. BELOW AUTHORITIES HAS ERRED IN COMPLETING THE ASSESSMENT PROCEEDINGS IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. ITA NO. 477/JP/2019 SH. PARESH KUMAR JAIN, JAIPUR VS. ITO, J AIPUR 2 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE REASSESSMENT PROCEEDINGS U/S 148 ARE BAD IN LAW AS IT WAS BASED ON BORROWED SATISFACTION OF THE LD. AO. 4. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LD. CIT APPEALS HAS ERRED IN THE CONFIRMING THE ACTION OF A DDITION OF RS. 1,68,310/- MADE BY THE LD. AO. 2. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE ASSESSEE IS ENGAGED IN TRADING OF SHARES & FUTURE AND HAS FILED HIS RETURN OF INCOME DECLARING LOSS OF RS. 1,98,551/- ON 30.09.2009. THE REAFTER, THE CASE OF THE ASSESSEE WAS REOPENED BY ISSUANCE OF NOTICE U/S 148 DATED 29.03.2016. IN RESPONSE TO THE NOTICE U/S 148, THE ASSESSEE FILED HIS RETURN OF INCOME ON 12.05.2016 AND REQUESTED FOR A COPY OF THE REASONS FOR REOPENING THE CASE U/S 148 VIDE LETTER DATED 09.06.2016. THE COPY OF T HE REASONS WAS DULY SUPPLIED BY THE ASSESSING OFFICER TO THE ASSESSEE. THEREAFTER, THE ASSESSEE FILED HIS SUBMISSION VIDE LETTER DATED 09.08.2016 R AISING OBJECTIONS AGAINST THE REOPENING THE CASE AND OUR REFERENCE WAS DRAWN TO THE SAID LETTER AND THE RELEVANT CONTENT READS AS UNDER:- (A) KINDLY ARRANGE TO PROVIDE IN WRITING THE BASIS OF HOW IT HAS BEEN GATHERED THAT SOME BROKERS HAVE MISUSED THE CL IENT CODE MODIFICATION FACILITY IN DERIVATIVES TRANSACTIONS I N NSE DURING MARCH 2010 HERE IT IS PERTINENT TO NOTE THAT OUR CASE PER TAINS TO F.Y 2008- 09 AND NOT F.Y 2009-10, HENCE YOUR OWN BASIS IS CON TRADICTING HERE THAT THE FACILITY WAS MISUSED IN MARCH 2010 AND NOT IN F.Y 2008-09. KINDLY ARRANGE TO PROVIDE THE SAME IN WRITING ONLY. FURTHER, THE ASSESSEE IS NOT THE BROKER HIMSELF AND WAS A CLIENT OF A BROKER. THE FACILITY OF CLIENT CODE MODIFICATION WAS GIVEN BY S EBI TO BROKER ONLY AND IS NOT AVAILABLE WITH THE CLIENT. FURTHER, THE CLIENT, AS USUALLY ITA NO. 477/JP/2019 SH. PARESH KUMAR JAIN, JAIPUR VS. ITO, J AIPUR 3 TAKES PLACE, USED TO PLACE ORDER ON PHONE FROM HIS HOME/OFFICE PLACE. AND WHITE PLACING ORDERS HE DID NOT KNOW WHA T THE CODE BROKER DEALER WAS FEEDING, AND HOW MANY CLIENTS HE WAS HANDLING OVER PHONE AND IN HIS OFFICE. IT IS MOST LIKELY THA T WHILE DEALING WITH MANY CLIENTS AT A TIME, IT POSSIBLE TO PUNCH A WRON G CODE AND IN SUCH CASES OF GENUINE MISTAKES, HE HAD TO BE CHANGE TO C ODE AS HE HAD NO CHOICE. BUT FOR ALL THESE CHANGES, CLIENT WOULD NEVER KNOW WHAT HAS TAKEN PLACE INSIDE BROKER ROOM, AND IN THE PRES SURE OF INFORMING CORRECT POSITION TO THE CLIENT CONCERNED, BROKER AN D HIS PERSON HAS NOT OPTION BUT TO CORRECT THE CODE WRONGLY PUNCHED, AS IF CODE IS NOT CHANGED IN THE EVENING IN THE SPECIFIED TIME GIVEN BY THE EXCHANGES, NO CLIENT WOULD TAKE ANY RESPONSIBILITY OF FINANCIA L LOSSES SUFFERED IN THE NEXT MORNING DUE TO GLOBAL FINANCIAL CONDITIONS IN OTHER STOCK MARKETS. HENCE, BROKER HAS NO CHOICE BUT TO CORRECT THE WRONG CODE PUNCHED BY HIS STAFF AND FOR THIS WE CANNOT BE PENA LIZED BY MAKING ADDITION TO OUR RETURNED INCOME FROM DEEDS WHICH AR E BEYOND OUR KNOWLEDGE. (B) KINDLY ARRANGE TO PROVIDE THE DETAILS OF SURVEY S CARRIED OUT U/S 133A ON SUCH BROKERS AND OF THE COPY OF THEIR AFFID AVIT/OATH SHOWING THE PROOF THAT THEY HAVE CONFIRMED OF HAVING MISUSE D THE FACILITY OF CLIENT CODE MODIFICATION TO CREATE FICTITIOUS LOSSE S. (C) FROM THE ABOVE REASONS OF OPENING THE CASE U/S 148 OF THE INCOME TAX ACT, 1961, IN THE CASE OF THE ASSESSEE. IT IS GATHERED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HA S TAKEN ENTRIES OF FICTITIOUS PROFIT/LOSS BY MISUSING OF FACILITY OF C LIENT CODE MODIFICATION. IN THIS REGARD, KINDLY ARRANGE TO PROVIDE THE BASIS OF SUCH IT IS GATHERED, SO THAT WE CAN ALSO ANALYZE AND REPLY AC CORDINGLY. WITHOUT PREJUDICE TO ABOVE, ITA NO. 477/JP/2019 SH. PARESH KUMAR JAIN, JAIPUR VS. ITO, J AIPUR 4 (1) THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FIL ED ORIGINAL RETURN OF INCOME AT A LOSS OF RS. 1,98,924/- AND AL SO FILED RETURN OF INCOME IN RESPONSE TO NOTICE U/S 148 AT A LOSS OF R S. 1,98,924/- THERE IS NO CHANGE IN THE RETURN OF INCOME FILED. THE ASS ESSEE HAS DONE TOTAL 8 FUTURE AND OPTIONS TRANSACTIONS WITH THE BROKER M AVERICK SHARE BROKERS PVT. LTD., DURING THE PERIOD UNDER REVIEW. THE TRANSACTIONS IN QUESTION WERE DONE BY THE ASSESSEE ONLY AND ASSESSE E HAD NO CONTROL, AS DISCUSSED ABOVE, IF THE ORDER PLACED BY HIM WAS PUNCHED IN WRONG CODE AND LATER ON RECTIFIED BY THE BROKER CONCERNED AND THUS FALLING IN THE NET OF WHAT IS MENTIONED IN YOUR REASONS FOR OP ENING THE CASE U/S 148 OF THE INCOME TAX ACT, 1961. (2) FURTHER, AS THE ASSESSEE HAD FILED THE RETURN AT A LOSS OF RS. 1,98,924/- EVEN IF THE AMOUNT IMPUGNED IN ABOVE OF RS. 1,65,010/- IS ADDED BACK TO THE INCOME OF THE ASSESSEE, EVEN THEN THERE WILL BE NO LIABILITY OF INCOME TAX AS THE AMOUNT WILL STILL BE BELOW THE AMOUNT NOT CHARGEABLE TO TAX, BUT HOWEVER, THAT IS NOT IN QUES TION. QUESTION IS OF GENUINENESS OF TRANSACTION AND INTENTION TO DO SUCH KIND OF TRANSACTION ON THE PART OF THE ASSESSEE. NORMALLY, AS EVERYBODY KNOWS, SUCH TYPE OF TRANSACTIONS ARE DONE WITH THE INTENT TO HIDE TH E PROFIT WHILE TAKING LOSSES FROM SUCH TRANSACTIONS AND TO AVOID PAYMENT OF ACTUAL TAXES TO THE GOVERNMENT. BUT IN OUR CASE. FROM THE TRANSACTI ONS DONE AND THE KIND OF PROFIT SHOWN FROM THE BUSINESS INCOME, NO B ODY EVEN IN DREAMS WILL TAKE SUCH DECISION/INTENT TO BUY SO CAL LED LOSSES FROM THE BROKER, AS WHEN ALREADY THERE WAS NO INCOME IN THE HANDS OF THE ASSESSEE TO OFFER FOR TAX AND WHAT IS OFFERED IS MU CH BELOW TAXABLE INCOME. (3) HENCE FROM THE FACTS OF THE ABOVE CASE, IT IS CLEAR THAT THERE WAS NEITHER INTENT NOR SUCH CIRCUMSTANCES WERE THEIR IN WHICH ASSESSEE WOULD HAVE THOUGHT OF TAKING LOSSES IN HIS NAME WHE N HE WAS NOT ITA NO. 477/JP/2019 SH. PARESH KUMAR JAIN, JAIPUR VS. ITO, J AIPUR 5 HAVING ANY INCOME EVEN TO AN AMOUNT WHICH IS NOT CH ARGEABLE TO TAX. SUCH MISTAKES DONE ON THE PART OF BROKER, MUST HAVE BEEN GENUINE ONLY AND MUST HAVE BEEN DONE DURING THE NORMAL COUR SE OF BUSINESS. (4) HENCE, IN VIEW OF ABOVE, IT IS REQUESTED YOUR KIND HONOUR TO KINDLY DROP THE PROCEEDINGS INITIATED U/S 148 OF TH E INCOME TAX WHICH HAVE BEEN DONE ONLY ON GUESS WORK AND PURE IMAGINAT ION. HENCE, IT IS REQUESTED THAT ADVERSE INFERENCE SHOULD BE TAKEN FR OM WHAT IS STATED ABOVE AND ASSESSMENT SHOULD BE MADE AT THE RETURN I NCOME ONLY, WE SHOULD NOT BE PENALIZED FOR MISTAKE OF OTHER PERSON S, WHICH WAS NOT IN OUR KNOWLEDGE. 3. IT WAS FURTHER SUBMITTED THAT AFTER RECEIPT OF T HE OBJECTIONS SO FILED BY THE ASSESSEE, THE AO DID NOT DISPOSE OFF THE OBJECT IONS SO RAISED BY THE ASSESSEE BY ANY SPEAKING ORDER AND WENT ON TO COMPL ETE THE ASSESSMENT WHICH IS IN CLEAR VIOLATION OF THE DECISION OF HON BLE SUPREME COURT IN CASE OF GKN DRIVESHAFT & OTHERS (2003) 259 ITR 19 (SC). IT WAS ACCORDINGLY SUBMITTED THAT THE ORDER PASSED BY THE AO IS BAD IN LAW AS VERY BASIC OBJECTIONS RAISED BY THE ASSESSEE HAVE NOT BEEN DEA LT WITH BY THE AO BEFORE THE PASSING THE ASSESSMENT ORDER. IT WAS ACCORDINGL Y SUBMITTED THAT THE ORDER PASSED BY THE AO DOES NOT SATISFY THE LEGAL R EQUIREMENTS AND SHOULD BE QUASHED. 4. PER CONTRA, THE LD. DR SUBMITTED THAT THE NON D ISPOSAL OF OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE REASONS RECORDED BY THE AO BEFORE ISSUANCE OF NOTICE U/S 148 IS A MERE TECHNICALITY W HICH CANNOT BE FATAL IN TERMS OF MAKING THE WHOLE REASSESSMENT PROCEEDINGS AS BAD IN LAW. IN SUPPORT, SHE RELIED ON THE DECISION OF HONBLE MADR AS HIGH COURT IN CASE OF HOME FINDERS HOUSING LTD. VS. ITO AND IT WAS SUBMIT TED THAT THE SLP AGAINST THE SAID DECISION HAS SINCE BEEN DISMISSED BY THE H ONBLE SUPREME COURT AS REPORTED IN 94 TAXAMANN.COM 84. ITA NO. 477/JP/2019 SH. PARESH KUMAR JAIN, JAIPUR VS. ITO, J AIPUR 6 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE, THE UNDISPUTED FACTS WHICH ARE EMERGING FROM THE RECORDS ARE THAT THE ASSESSEE HAS ORIGINALLY FILED HIS RETURN OF INCOME ON 30.09.2009 AND THEREAFTER, IN RESPONSE TO NOTICE U/ S 148 DATED 29.03.2016, THE ASSESSEE FILED HIS RETURN OF INCOME DISCLOSING THE INCOME AS ORIGINALLY FILED, THE ASSESSEE REQUESTED FOR THE COPY OF THE R EASONS TO BE SUPPLIED TO HIM WHICH WERE DULY SUPPLIED BY THE ASSESSING OFFIC ER ON 9.06.2016 AND THEREAFTER, THE ASSESSEE FILED HIS OBJECTIONS ON 09 .08.2016 AGAINST THE REOPENING OF THE ASSESSMENT AND REQUESTING FOR DROP PING THE PROCEEDINGS INITIATED BY ISSUANCE OF NOTICE U/S 148 OF THE ACT. THEREAFTER, THE NOTICE U/S 143(2) WAS ISSUED AND THE REASSESSMENT WAS COMPLETE D U/S 143(3) R.W.S. 147 OF THE ACT VIDE ORDER DATED 14.12.2016. THERE IS NO MENTION IN THE ASSESSMENT ORDER THAT BEFORE COMPLETING THE ASSESSM ENT PROCEEDINGS, THE OBJECTIONS WERE DISPOSED OFF BY THE ASSESSING OFFIC ER. FURTHER, THERE IS NOTHING ON RECORD OR BROUGHT TO OUR NOTICE DURING T HE COURSE OF HEARING THAT THE ASSESSING OFFICER HAS DISPOSING OFF THE OBJECTI ONS SO RAISED BY THE ASSESSEE THROUGH A SEPARATE ORDER. WE THEREFORE FIN D THAT IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS RAISED OBJECTIONS AGAINS T INITIATING OF REASSESSMENT PROCEEDINGS BY ISSUE OF NOTICE U/S 148 OF THE ACT AND THE ASSESSING OFFICER HAS PROCEEDED WITH THE REASSESSME NT PROCEEDINGS AND PASSED THE ORDER U/S 143(3) R.W.S. 147. DISPOSING OFF THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE REASONS RECORDED BEFORE ISSUANCE OF NOTICE U/S 148 THOUGH NOT PART OF STATUTORY REQUIREMENT AS PRE SCRIBED UNDER THE INCOME TAX ACT, HOWEVER, THE SAME IS GUIDED BY THE DIRECTIONS ISSUED BY THE HONBLE SUPREME COURT IN CASE OF GKN DRIVESHAFTS (I NDIA) LTD (SUPRA). THERE IS THUS A CLEAR VIOLATION OF THE DIRECTIONS ISSUED BY THE HONBLE SUPREME COURT. THE QUESTION THAT ARISES FOR CONSIDERATION I S WHETHER SUCH VIOLATION OF THE DIRECTIONS ISSUED BY THE HONBLE SUPREME COURT IS A MERE TECHNICALITY AND BREACH OF SUCH TECHNICALITY CAN BE MADE GOOD BY REMANDING THE MATTER ITA NO. 477/JP/2019 SH. PARESH KUMAR JAIN, JAIPUR VS. ITO, J AIPUR 7 BACK TO THE FILE OF THE ASSESSING OFFICER. ALTERNAT IVELY, WHETHER THE SAME IS IN NATURE OF AN ILLEGALITY WHICH HAS PREJUDICED THE IN TEREST OF THE ASSESSEE TO CHALLENGE THE SAME BEFORE THE COURTS AS THE ASSESSI NG OFFICER HAS ALREADY PASSED THE REASSESSMENT ORDER AND THUS CANNOT BE CU RED AND WILL RESULT IN QUASHING OF THE REASSESSMENT ORDER. 6. IN THIS REGARD, WE FIND THAT SIMILAR ISSUE HAS C OME UP FOR CONSIDERATION BEFORE THE HONBLE RAJASTHAN HIGH COURT IN CASE OF M/S K.C. MERCANTILE VS. CIT (IN D. B. APPEAL NO. 292/2016) WHEREIN THE TRIBUNAL HAS REMANDED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FO R DISPOSING OFF THE OBJECTIONS AND IN THAT CONTEXT, THE FOLLOWING SUBST ANTIAL QUESTION OF LAW WAS FRAMED BY THE HONBLE HIGH COURT WHICH READS AS UND ER: WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD TRIBUNAL WAS JUSTIFIED IN NOT DECLARING THE REASSES SMENT PROCEEDINGS AND CONSEQUENTIAL ASSESSMENT ORDER PASSED THERETO A S NULLITY? AND THE RELEVANT FACTS AND FINDINGS ARE CONTAINED I N PARA 4, 4.1 AND 8 WHICH READS AS UNDER:- 4. COUNSEL FOR THE APPELLANT HAS CONTENDED THAT TH E PRESENT APPEAL IS ARISING OUT OF THE JUDGMENT AND ORDER OF THE TRIBUN AL WHEREBY TRIBUNAL HAS UPHELD THE CONTENTION OF THE APPELLANT AND REMI TTED BACK THE MATTER FOR REASSESSMENT WHICH WILL GIVE A SECOND IN NING TO THE ASSESSING OFFICER WHO HAS TO DO REASSESSMENT WITHIN A PERIOD OF 9 MONTHS AND HE WILL GET EXTENDED TIME OF LIMITATION WHICH IS NOT THE OBJECT OF THE INCOME TAX ACT. WHEN THE COURT HAS AL READY FIXED THE PERIOD, IT IS TO BE CONSTRUED IN A VERY STRICT SENS E AND HAS TO BE APPLIED. 4.1 IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPO N THE FOLLOWING DECISIONS: ITA NO. 477/JP/2019 SH. PARESH KUMAR JAIN, JAIPUR VS. ITO, J AIPUR 8 1. KSS PETRON PRIVATE LTD. VS. ACIT, ITA NO. 227/20 14, 03.10.2016 HOLDING AS UNDER:- 7. ON FURTHER APPEAL, THE TRIBUNAL PASSED THE IMPU GNED ORDER. BY THE IMPUGNED ORDER IT HELD THAT THE ASSESSING OFFICER W AS NOT JUSTIFIED IN FINALIZING THE ASSESSMENT, WITHOUT HAVING FIRST DIS POSED OF THE OBJECTIONS OF THE APPELLANT. THIS IMPUGNED ORDER HO LDS THE ASSESSING OFFICER IS OBLIGED TO DO IN TERMS OF THE APEX COURT 'S DECISION IN GKN DRIVESHAFTS (INDIA) LTD., V/S ITO 259 ITR 19. IN TH E AFORESAID CIRCUMSTANCES, THE ORDER OF THE CIT(A) AND THE ASSE SSING OFFICER WERE QUASHED AND SET ASIDE. HOWEVER, AFTER HAVING SET AS IDE THE ORDERS, IT RESTORED THE ASSESSMENT TO THE ASSESSING OFFICER TO PASS FRESH ORDER AFTER DISPOSING OF THE OBJECTIONS TO REOPENING NOTI CE DATED 28 TH MARCH, 2008, IN ACCORDANCE WITH LAW. 8. WE NOTE THAT ONCE THE IMPUGNED ORDER FINDS THE ASSESSMENT ORDER IS WITHOUT JURISDICTION AS THE LAW LAID DOWN BY THE APEX COURT IN GKN DRIVESHAFTS (SUPRA) HAS NOT BEEN FOLLOWED, THEN THE RE IS NO REASON TO RESTORE THE ISSUE TO THE ASSESSING OFFICER TO PASS A FURTHER/FRESH ORDER. IF THIS IS PERMITTED, IT WOULD GIVE A LICENCE TO TH E ASSESSING OFFICER TO PASS ORDERS ON REOPENING NOTICE, WITHOUT JURISDICTI ON (WITHOUT COMPLIANCE OF THE LAW IN ACCORDANCE WITH THE PROCED URE), YET THE ONLY CONSEQUENCE, WOULD BE THAT IN APPEAL, IT WOULD BE R ESTORED TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER FOLL OWING THE DUE PROCEDURE. THIS WOULD LEAD TO UNNECESSARY HARASSMEN T OF THE ASSESSEE BY REVIVING STALE/ OLD MATTERS. 9 IN FACT, TO ENSURE THAT REOPENING NOTICES ARE DISPOSED OF, EXPEDITIOUSLY TH E PARLIAMENT ITSELF HAS PROVIDED IN SECTION 153(2) OF THE ACT A PERIOD OF LIMITATION WITHIN WHICH THE ASSESSING OFFICER MUST PASS AN ORDER ON T HE NOTICE OF REOPENING I.E. WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN ITA NO. 477/JP/2019 SH. PARESH KUMAR JAIN, JAIPUR VS. ITO, J AIPUR 9 WHICH THE NOTICE WAS ISSUED. IN FACT, SECTION 153 ( 2A) OF THE ACT AS IN FORCE AT THE RELEVANT TIME ITSELF PROVIDES THAT AN ORDER OF FRESH ASSESSMENT, CONSEQUENT TO THE ORDER OF TRIBUNAL UND ER SECTION 254 OF THE ACT, WOULD HAVE TO BE PASSED WITHIN ONE YEAR FR OM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER UNDER SECTION 254 OF THE ACT, WAS PASSED BY THE TRIBUNAL AND RECEIVED BY THE COMMISSI ONER OF INCOME TAX. THE HONBLE RAJASTHAN HIGH COURT, THEREAFTER, HAS G IVEN ITS FINDINGS AS UNDER: 8. BEFORE PROCEEDING WITH THE MATTER, IT IS NOT OU T OF PLACE TO MENTION THAT THE LAW DECLARED BY THE SUPREME COURT IN GKM D RIVESHAFTS (SUPRA) CLEARLY HELD THAT THE PRELIMINARY OBJECTION IS TO BE DECIDED AS THE FIRST, IT CANNOT BE DECIDED SUBSEQUENTLY. THE A RGUMENT WHICH HAS BEEN CANVASSED BY THE ASSESSEE IS REQUIRED TO BE CO NSIDERED VERY SERIOUSLY MORE PARTICULARLY IN VIEW OF THE OBSERVAT IONS MADE BY THE SUPREME COURT IN THE CASE OF KS PETRON PRIVATE LTD. (SUPRA) WHICH IS FOLLOWED IN HOTEL BLUE MOON (SUPRA), THE LAW DECLAR ED BY THE SUPREME COURT IS TAKEN IN TRUE SPIRIT WHETHER IT WILL OPEN A SECOND INNING IN HOW OWN. SECTION 153(3) IS TO BE READ VERY CAUTIOUSLY A S 153 POWERS ARE GIVEN TO THE DEPARTMENT, THE COURT HAS TO LOOK INTO WHETHER THE LAW DECLARED BY THE SUPREME COURT IS GIVEN AWAY OR PROT ECTED. IN THE PRESENT CASE, AS THE ASSESSING OFFICER HAS CLEARLY IGNORED THE LAW DECLARED BY THE SUPREME COURT, IN THAT VIEW OF THE MATTER, THE ISSUES WHICH ARE RAISED IN THE MATTER, THE TRIBUNAL OUGHT NOT TO HAVE REMITTED BACK FOR REASSESSMENT SINCE PERIOD OF LIMITATION HA S ALREADY EXPIRED AS THE AUTHORITY WILL GET EXTENDED TIME OF LIMITATION BEYOND 9 MONTHS WHICH IS NOT THE OBJECT OF INCOME TAX ACT. ITA NO. 477/JP/2019 SH. PARESH KUMAR JAIN, JAIPUR VS. ITO, J AIPUR 10 9. IN THAT VIEW OF THE MATTER, ON ISSUE NO. 1 AND 2, THE ORDER OF REASSESSMENT PASSED BY THE TRIBUNAL IS DECLARED NUL L AND VOID. THE QUESTIONS ARE ANSWERED IN FAVOUR OF ASSESSEE AND AG AINST THE DEPARTMENT. 10. THE APPEAL OF THE ASSESSEE IS ALLOWED. 7. WE FIND THAT IN THE AFORESAID DECISION, THE HONBLE RAJASTHAN HIGH COURT HAS HELD THAT THE LAW DECLARED BY THE SUPREME COURT IN GKN DRIVESHAFTS CLEARLY REQUIRE THAT THE PRELIMINARY OB JECTION IS TO BE DECIDED FIRST AND CANNOT BE DECIDED SUBSEQUENTLY AND THE TRIBUNAL OUGHT NOT TO HAVE REMITTED BACK FOR REASSESSMENT SINCE PERIOD OF LIMI TATION HAS ALREADY EXPIRED AS THE AUTHORITY WILL GET EXTENDED TIME OF LIMITATI ON BEYOND 9 MONTHS WHICH IS NOT THE OBJECT OF INCOME TAX ACT. IT IS FURTHER NOTED THAT IN THE SAID DECISION, THE HONBLE HIGH COURT HAS CONSIDERED THE DECISION OF HONBLE MADRAS HIGH COURT IN CASE OF HOME FINDERS HOUSING L IMITED VS ITO (SUPRA) AND HAS FOLLOWED THE DECISION OF THE HONBLE SUPREM E COURT IN CASE OF KSS PETRON PRIVATE LTD. VS. ACIT (SUPRA). IN LIGHT OF A BOVE AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONA L HIGH COURT WHICH IS BINDING ON THIS TRIBUNAL, THE REASSESSMENT PROCEEDI NGS COMPLETED WITHOUT FIRSTLY DISPOSING OFF THE OBJECTION RAISED BY THE A SSESSEE CANNOT BE SUSTAINED AND CONSEQUENT REASSESSMENT ORDER U/S 147 R/W 143(3 ) IS HEREBY QUASHED AND SET ASIDE. 8. IN LIGHT OF ABOVE, THE OTHER CONTENTIONS ADVAN CED BY BOTH PARTIES ARE NOT ADJUDICATED UPON. THE GROUNDS ON MERIT HAVE BECOME ACADEMIC AND THE SAME ARE DISMISSED AS INFRUCTIOUS. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ITA NO. 477/JP/2019 SH. PARESH KUMAR JAIN, JAIPUR VS. ITO, J AIPUR 11 ORDER PRONOUNCED IN THE OPEN COURT ON 20/03/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20/03/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SH. PARESH KUMAR JAIN, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD 6(3), JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 477/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR