A.C.I.T Cir - 2,Midnapore., Midnapore V. M/s De Son Marketing Pvt Ltd, Paschim Medinipur

ITA 481/KOL/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3395 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 08-03-2013
• Court: TRIBUNAL
• Department Lawyers: ALOK NAG
• Assessee Lawyers: G BANERJEE
• Keywords: Reopening of assessment; Reassessment proceedings
• Section: 143(3); 194C; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KO LKATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI WASEEM AHMED , AM] I.T.A NO.481/KOL/2013 ASSESSMENT YEAR: 2006-07 ASSTT. COMMISSIONER OF INCOME-TAX, VS. M/S. DE SO N MARKETING PVT. LTD. CIRCLE-2, MIDNAPORE (PAN: AABCD9837E) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 09.12.2015 DATE OF PRONOUNCEMENT: 20.01.2016 FOR THE APPELLANT: SHRI ALOK NAG, JCIT, SR. DR FOR THE RESPONDENT: SHRI G. BANERJEE, FCA ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE IS ARISING OUT OF ORDER OF C IT(A)-XXXVI, KOLKATA VIDE APPEAL NO. 542/CIT(A)-XXXVI/KOL/CIR02,MID/1101 2/1960 DATED 04.01.2013. ASSESSMENT WAS FRAMED BY DCIT, CIRCLE- 2, MIDNAPORE U/S. 147/143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2006-07 VIDE HIS ORDER DATED 04.01. 2013. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) IN HOLDING THE REASSESSMENT U/S. 147 R.W.S. 143(3) OF THE ACT DATED 30.12.2011 AS INVALID AND THEREBY QUASHED THE SAME. FOR THIS, RE VENUE HAS RAISED FOLLOWING FOUR GROUNDS: I. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT{APPEALS}- XXXVI, KOLKATA WAS NOT JUSTIFIED IN QUASHING RE-ASS ESSMENT MADE U/S.143{3}/147 ON 30.12.2011, OVERLOOKING THE PROVISIONS OF SECTIO N 292BB. II. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT{APPEALS)-XXXVI, KOLKATA WAS NOT JUSTIFIED IN IG NORING THE FACT THAT REASON FOR RE-OPENING ASSESSMENT IN THIS CASE WAS DULY COM MUNICATED TO THE ASSESSEE VIDE THIS OFFICE LETTER DATED 07.07.2011. III. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT{APPEALS}- XXXVI, KOLKATA WAS NOT JUSTIFIED IN IGNORING THE FA CT THAT THE ASSESSEE HAD ALL ALONG PARTICIPATED IN RE-ASSESSMENT PROCEEDINGS WIT HOUT RAISING ANY OBJECTION TO RE-OPENING OF ASSESSMENT. IV. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT{APPEALS}- XXXVI, KOLKATA WAS NOT JUSTIFIED IN IGNORING THE FA CT THAT THE ASSESSEE FILED A WRITTEN SUBMISSION ON 13/12/2011 IN RESPONSE TO FIN AL SHOW-CAUSE LETTER AND DID NOT RAISE ANY OBJECTION TO RE-OPENING OF ASSESSMENT TILL THAT DATE {13-12- 2011}. 2 ITA NO.481/K/2013 DE SON MARKETING PVT. LTD. AY 2006-07 3. BRIEFLY STATED FACTS ARE THAT THE AO WHILE FRAMI NG REASSESSMENT U/S. 147 R.W.S. 143(3) OF THE ACT MADE ADDITION ON ACCOUNT O F UNDERSTATEMENT OF SALES TO THE TUNE OF RS.25,30,070/- AND ALSO DISALLOWANCE OF TRANSPORTATION CHARGES FOR NON-DEDUCTION OF TDS U/S. 194C OF THE ACT THEREBY I NVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AT RS.1,02,58,054/-. A GGRIEVED AGAINST THE ACTION OF AO, ASSESSEE CHALLENGED THE REASSESSMENT ORDER IN A PPEAL BEFORE CIT(A). BEFORE CIT(A), ASSESSEE CHALLENGED FIRST ON JURISDICTIONAL ISSUE THAT REASONS RECORDED WERE NOT SUPPLIED TO THE ASSESSEE FOR ISSUANCE OF N OTICE U/S. 148 OF THE ACT FOR INITIATING REASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT, WHICH IS MANDATORY IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN T HE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. ITO (2003) 259 ITR 19 (SC) WHEREIN HONBLE SUPREME COURT HAS LAID DOWN THE PRINCIPLE THAT WHEN A NOTICE UNDER SECTION 148 IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTICE IS TO FILE A RETURN AND IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING NOTICE. THE ASSESSING OFF ICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF RE ASONS, THE NOTICEE IS ENTITLED TO FILE OBJECTION TO ISSUANCE OF NOTICE AND THE ASS ESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. THE LD. CIT(A) FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GK N DRIVESHAFTS (INDIA) LTD., SUPRA AND HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VIDESH SANCHAR NIGAM LTD. 340 ITR 66 (BOM) HAS QUASHED THE REASSES SMENT. AGGRIEVED, NOW REVENUE IS IN SECOND APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ISSUE I S COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF VIDESH SAN CHAR NIGAM LTD., SUPRA WHEREIN IT IS HELD AS UNDER: THE FINDING OF FACT RECORDED BY THE INCOME TAX AP PELLATE TRIBUNAL IS THAT IN THE PRESENT CASE THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT THOUGH REPEATEDLY ASKED BY THE ASSESSEE WERE FURNISHED ONLY AFTER COM PLETITION OF THE ASSESSMENT. THE TRIBUNAL FOLLOWING THE JUDGMENT OF THIS COURT IN TH E CASE OF CIT VS. FOMENTO RESORTS & HOTELS LTD., INCOME TAX APPEAL NO. 71 OF 2006 DECID ED ON 27 TH NOVEMBER, 2006 HAS HELD THAT THOUGH THE REOPENING OF THE ASSESSMENT IS WITHIN 3 YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR, SINCE THE REASONS RECORDE D FOR REOPENING OF THE ASSESSMENT WERE NOT FURNISHED TO THE ASSESSEE TILL THE COMPLET ITION OF ASSESSMENT, THE REASSESSMENT ORDER CANNOT BE UPHELD. MOREOVER, SPECIAL LEAVE PE TITION FILED BY REVENUE AGAINST THE DECISION OF THIS COURT IN THE CASE OF FOMENTO RESO RTS & HOTELS LTD. HAS BEEN DISMISSED BY THE APEX COURT VIDE ORDER DATED 16 TH JULY, 2007. 3 ITA NO.481/K/2013 DE SON MARKETING PVT. LTD. AY 2006-07 IN VIEW OF THE ABOVE PRINCIPLE LAID DOWN BY HONBLE BOMBAY HIGH COURT IN THE CASE OF VIDESH SANCHAR NIGAM LTD.,(SUPRA), WE CONFI RM THE ORDER OF CIT(A) QUASHING THE REASSESSMENT FRAMED BY AO. THE APPEAL OF REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20.01.2 016 SD/- SD/- (WASEEM AHMED) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20TH JANUARY, 2016 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ACIT, CIRCLE-2, MIDNAPORE 2 RESPONDENT M/S. DE SON MARKETING PVT. LTD., RAGH UNATHPUR, JHARGRAM- 721507, DIST. PASCHIM MEDINIPUR, WB. 3. THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .