Astt. Commissioner of Income Tax, Lucknow V. M/s Jai Prakash Associates Ltd., Lucknow

ITA 504/LKW/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4440 (ITAT-LUCKNOW)
• Duration Of Justice: 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-04-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 16-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR A K SINGH
• Assessee Lawyers: B P YADAV COST ACCOUNTANT
• Keywords: Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ITA NO.504 & 505/LKW/2015 ASSESSMENT YEAR:2007-08 & 2008-09 A.C.I.T., CENTRAL CIRCLE-II, LUCKNOW. VS. M/S JAI PRAKASH ASSOCIATES LTD., 5, PARK ROAD, HAZARATGANJ, LUCKNOW. (APPELLANT) (RESPONDENT) APPELLANT BY DR. A. K. SINGH, CIT, D.R. RESPONDENT BY SHRI B. P. YADAV, COST ACCOUNTANT DATE OF HEARING 08/04/2016 DATE OF PRONOUNCEMENT 22/04/2016 O R D E R PER A. K. GARODIA, A.M. BOTH THESE APPEALS ARE FILED BY THE REVENUE WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF CIT(A)-III, LUCKNOW BOTH DATED 30.04.2015 FOR THE ASSESSMENT YEARS 2007-08 & 2008-09. BOTH T HESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CO MMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE REVENUE IN I.T.A. NO.5 04/LKW/2015 FOR ASSESSMENT YEAR 2007-08 ARE AS UNDER: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, LD. CIT(A) HAS ERRED IN QUASHING THE PROCEEDINGS U/ S 147 OF THE INCOME TAX ACT 1961 WITHOUT APPRECIATING THE FACT THAT AS PER SECTION 147 OF THE I. T. ACT 1961, IT I S NOT NECESSARY TO HAVE ANY' FRESH MATERIAL FOR INITIATIN G REASSESSMENT PROCEEDINGS. IN THIS CASE, ALL THE BAS IC CONDITIONS REQUIRED FOR REOPENING OF THE CASE AS PRESCRIBED UNDER SECTION 147 OF THE ACT HAVE BEEN D ULY FULFILLED. 2 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT(A) HAS ERRED IN OBSERVING THAT THE REASONS RECORDED BY THE A.O. WERE REAPPRAISAL OF THE SAME F ACTS AND A MERE CHANGE OF OPINION, WITHOUT TAKING INTO CONSIDERATION THE FACT THAT THE REASON FOR REOPENIN G OF THE CASE WAS, DETECTION OF UNDUE CLAIM OF DEDUCTION U/S 80IA BY THE ASSESSEE. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW IN PLACING RELIANCE UPON HE R OWN JUDGMENT IN THE CASE OF SAME ASSESSEE FOR A.Y. 2009 -10, WHEN SUCH APPEAL ORDER IS ITSELF A SUBJECT MATTER O F FURTHER APPEAL BEFORE HON'BLE ITAT, LUCKNOW. 4. THAT LD. CIT(A) HAS GROSSLY ERRED IN NOT ADJUDIC ATING UPON THE VARIOUS ADDITIONS MADE BY THE ASSESSING OF FICER IN THE ASSESSMENT ORDER ON MERIT. 5. THAT THE ORDER OF THE LD. CIT(A) DES ERVES TO BE VACATED AND THE ASSESSMENT ORDER PASSED BY THE A.O. BE RESTORED. 3. SIMILARLY, THE GROUNDS RAISED BY THE REVENUE IN I.T.A. NO.505/LKW/2015 FOR ASSESSMENT YEAR 2008-09 ARE AS UNDER: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, LD. CIT(A) HAS ERRED IN QUASHING THE PROCEEDINGS U/ S 147 OF THE INCOME TAX ACT 1961 WITHOUT APPRECIATING THE FACT THAT AS PER SECTION 147 OF THE I.T. ACT 19 61, IT IS NOT NECESSARY TO HAVE ANY FRESH MATERIAL FOR INITIA TING REASSESSMENT PROCEEDINGS. IN THIS CASE, ALL THE BAS IC CONDITIONS REQUIRED FOR REOPENING OF THE CASE AS PRESCRIBED UNDER SECTION 147 OF THE ACT HAVE BEEN D ULY FULFILLED. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, LD. CIT(A) HAS ERRED IN OBSERVING THAT THE REASONS RECORDED BY THE A.O. WERE REAPPRAISAL OF THE SAME F ACTS AND A MERE CHANGE OF OPINION, WITHOUT TAKING INTO CONSIDERATION THE FACT THAT THE REASON FOR REOPENIN G OF THE CASE WAS, DETECTION OF UNDUE CLAIM OF DEDUCTION U/S 80IA BY THE ASSESSEE. 3 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN LAW IN PLACING RELIANCE UPON HE R OWN JUDGMENT IN THE CASE OF SAME ASSESSEE FOR A.Y. 2009 -10, WHEN SUCH APPEAL ORDER IS ITSELF A SUBJECT MATTER O F FURTHER APPEAL BEFORE HON'BLE ITAT, LUCKNOW. 4. THAT LD. CIT(A) HAS GROSSLY ERRED IN NOT ADJUDIC ATING UPON THE VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER ON MERIT. 5. THAT THE ORDER OF THE LD. CIT(A) DE SERVES TO BE VACATED AND THE ASSESSMENT ORDER PASSED BY THE A.O. BE RESTORED. 4. LEARNED D. R. OF THE REVENUE SUPPORTED THE ORDE RS OF ASSESSING OFFICER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPO RTED THE ORDERS OF LEARNED CIT(A). HE ALSO PLACED RELIANCE ON THE FOLL OWING JUDICIAL PRONOUNCEMENTS IN ADDITION TO VARIOUS JUDGMENTS RE LIED UPON BY LEARNED CIT(A) IN HIS ORDER: (I) CIT VS. PRADESHIYA INDUSTRIAL & INVESTMENT CORPN. O F U.P. LTD. [2011] 332 ITR 324 (ALL) (II) AMRIT CORPN. LTD. VS. ADDL. C.I.T. [2015] 275 CTR 1 74 (ALL) 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST WE TAKE UP THE A.Y. 2008 09. WE FIND THAT ON PAGE NO. 20 OF HIS ORDER FOR ASSESSMENT YEAR 2008-09, IT IS NOTED BY CIT(A) THAT THE CASE OF THE ASSESSEE WAS TAKEN UP FOR COMPULSORY SCRUTINY AND DURING THE COURSE OF AS SESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE ASSESSING OFFICER VIDE H IS LETTER DATED 07/10/2010 HAD RAISED SPECIFIC QUERIES REGARDING TH E DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IA OF THE ACT. THE CIT(A) HAS R EPRODUCED THE QUERY LETTER DATED 07/10/2010 ISSUED BY THE ASSESSING OFF ICER. FROM THE SAME, WE FIND THAT IN PARA NO. 10 OF THIS QUERY LETTER, T HE ASSESSING OFFICER HAS RAISED SPECIFIC QUERY REGARDING THE CLAIM OF THE AS SESSEE REGARDING DEDUCTION U/S 80IA OF THE ACT. THEREAFTER, THE CIT (A) HAS REPRODUCED THE REPLY SUBMITTED BY THE ASSESSEE BEFORE THE ASSESSIN G OFFICER IN THIS REGARD 4 AND IN THE REPLY, THE ASSESSEE HAS MADE VARIOUS SUB MISSIONS ON THIS ISSUE REGARDING THE CLAIM OF THE ASSESSEE FOR DEDUCTION U /S 80IA IN RESPECT OF CAPTIVE POWER PLANTS. THEREAFTER THE ASSESSING OFF ICER HAS ACCEPTED THE CLAIM OF THE ASSESSEE IN THE ASSESSMENT ORDER PASSE D BY HIM U/S 143(3) OF THE ACT. HENCE, IT IS APPARENT THAT OPINION WAS FO RMED BY THE ASSESSING OFFICER IN COURSE OF ORIGINAL ASSESSMENT PROCEEDING S. THEREAFTER ON PAGES 23 TO 26 OF HIS ORDER, THE CIT(A) HAS REPRODUCED TH E REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING U/S 148 OF THE ACT. THEREAFTER ON PAGE NO. 26 OF HIS ORDER, IT IS NOTED BY CIT(A) THAT AS PER THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING THE ASSESSME NT, THE BASIS AND REASON GIVEN BY THE ASSESSING OFFICER IS THAT THERE WAS DISALLOWANCE OF DEDUCTION U/S 80IA FOR ASSESSMENT YEAR 2009-10 BY T HE ASSESSING OFFICER IN THAT YEAR AND THERE IS NO MENTION IN THE REASONS RE CORDED BY THE ASSESSING OFFICER THAT INCOME HAS ESCAPED THE ASSESSMENT. UN DER THESE FACTS, A CATEGORICAL FINDING HAS BEEN GIVEN BY CIT(A) THAT T HE CLAIM OF THE ASSESSEE U/S 80IA WAS EXAMINED IN DETAIL IN SCRUTINY ASSESSM ENT AND ALSO A SPECIFIC QUERY WAS SENT TO THE ASSESSEE AND BASED ON THE REP LY OF THE ASSESSEE, THE ASSESSING OFFICER HAS FORMED AN OPINION DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. NOW IN THE LIGHT OF THESE FACTS, WE EXAMINE THE APPLICABILITY OF THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. [2010] 320 ITR 561 (SC). IN THIS CASE, IT WAS HELD THAT AFTER 01/04/89, POWER TO REOPEN IS MUCH WIDER BUT STILL, IF THE ASSESSING OFFICER IS PERMITTED TO DO REOPENING ON M ERE CHANGE OF OPINION THEN IT WOULD GIVE ARBITRARY POWER TO ASSESSING OFF ICER TO REOPEN THE ASSESSMENT. FROM THE FACTS OF THE PRESENT CASE, AS DISCUSSED ABOVE, IT IS SEEN THAT THE OPINION WAS FORMED BY THE ASSESSING O FFICER IN THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS COMPLETED U/S 143(3 ) OF THE ACT AND NOW, THE REOPENING IS ON MERE CHANGE OF OPINION BECAUSE THERE IS NO REFERENCE TO ANY NEW MATERIAL AND DISALLOWANCE BY THE A.O. IN A SUBSEQUENT YEAR IS NOT A FRESH MATERIAL IN ITSELF UNLESS SUCH DISALLOW ANCE IN A SUBSEQUENT YEAR 5 IS ON THE BASIS OF A FRESH MATERIAL HAVING RELEVANC E IN THE PRESENT YEAR ALSO. THERE IS NO SUCH MENTION IN THE REASONS RECORDED BY THE A.O. THAT THE DISALLOWANCE OF THE CLAIM IN A.Y. 2009 10 IS ON T HE BASIS OF A FRESH MATERIAL HAVING RELEVANCE IN THESE TWO YEARS ALSO. HENCE, THE REOPENING IS ON MERE CHANGE OF OPINION ON SAME MATERIALS, WHICH CANNOT BE PERMITTED AS PER THIS JUDGMENT. THEREFORE, RESPECTFULLY FOL LOWING THIS JUDGMENT OF HON'BLE SUPREME COURT, WE DECLINE TO INTERFERE IN T HE ORDER OF LEARNED CIT(A). 6. IT WAS AGREED BY BOTH THE SIDES THAT THE FACTS I N ASSESSMENT YEAR 2007-08 ARE IDENTICAL TO THE FACTS IN ASSESSMENT YE AR 2008-09 BECAUSE IN THAT YEAR ALSO, THE REOPENING IS ON MERE CHANGE OF OPINION. HENCE, IN ASSESSMENT YEAR 2007-08 ALSO, WE DECLINE TO INTERFE RE IN THE ORDER OF CIT(A) ON THE SAME BASIS. 7. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. ( MAHAVIR PRASAD) ( A. K. GA RODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:22/04/2016 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. R EGISTRAR