M/s. LUPIN LTD. (LUPIN LABORATORIES LTD.), MUMBAI V. JT. CIT SPL. RG. 6, MUMBAI

ITA 5089/MUM/2005

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8349 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 17-09-2012
• Assessment Year: 1996-1997
• Appeal Filed On: 21-07-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K SHUKLA
• Assessee Lawyers: VASANTI B PATEL
• Keywords: Procedural lapse
• Section: 143(3); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I , MUMBAI BEFORE SHRI P. M. JAGTAP, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. : 5089/MUM/2005 ASSESSMENT YEAR : 1996-97 M/S. LUPIN LIMITED (FORMERLY KNOWN AS LUPIN LABORATORIES LIMITED) 159, CST ROAD, SANTACRUZ (E), KALINA, MUMBAI-400 098. PAN NO: AAACL 1121 E VS. JCIT, SPECIAL RANGE 6, MUMBAI (APPELLANT) (RESPONDENT) & ITA NO. : 4908/MUM/2005 ASSESSMENT YEAR : 1996-97 JCIT, SPECIAL RANGE 6, MUMBAI VS. M/S. LUPIN L ABORA TORIES LTD. (SINCE MERGED WITH LUPIN CHEMICALS LTD, NOW KNOWN AS LUPIN LTD) 159, CST ROAD, SANTACRUZ (E), KALINA, MUMBAI-400 098. PAN NO: AAACL 1121 E (APPELLANT) (RESPONDENT) APPELLANT BY : MS. VASANTI B. PATEL RESPONDENT BY : SHRI P. K. SHUKLA D ATE OF HEARING : 11.10 .2012 DATE OF PRONOUNCEMENT : 31.10.2012 ORDER PER AMIT SHUKLA, J.M. : THESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND THE DEPARTMENT AGAINST ORDER DATED 09.05.2005 PASSED BY THE LD. CIT-X, MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED U/S.143 (3) R.W.S 147. IN ITA NOS : 5089 & 4908/MUM/2005 2 THE GROUNDS, THE ASSESSEE HAS TAKEN VARIOUS GROUNDS OF APPEAL ON VALIDITY OF THE REOPENING OF THE ASSESSMENT U/S.147 AND ALSO ON MERITS. BESIDES THIS THE ASSESSEE HAS TAKEN THE REVISED GROUND BY R EVISING GROUND NO. 3 ORIGINALLY TAKEN IN THE MEMO OF THE APPEAL. SINCE THE REVISED GROUND NO. 3 GOES TO THE VERY ROOT OF THE ISSUE, THEREFORE, SAME IS ADJUDICATED AS PRELIMINARY ISSUE. THE SAID GROUND READS AS UNDER :- 3. WITHOUT PREJUDICE, THE LEARNED COMMISSIONER (AP PEALS) OUGHT TO HAVE APPRECIATED THAT SINCE NOTICE UNDER 1 43(2) IN RESPECT OF RETURN FILED PURSUANT TO NOTICE UNDER SE CTION 148 WAS NOT ISSUED, THE ASSESSMENT MADE UNDER SECTION 147 R .W.S. 143(3) WAS BAD IN LAW AND, THEREFORE, OUGHT TO BE Q UASHED. 2. THE LEARNED COUNSEL APPEARING ON BEHALF OF THE A SSESSEE, SUBMITTED THAT THE ASSESSEE HAS DULY FILED THE RETURN OF INCO ME IN RESPONSE TO THE NOTICE U/S.148, WHICH IS EVIDENT FROM THE NARRATION GIVEN IN PARA 1.1 OF THE ASSESSMENT ORDER. SHE SUBMITTED THAT AFTER FIL ING OF THE RETURN IN RESPONSE TO THE NOTICE U/S.148, NO NOTICE U/S.143(2 ) HAS BEEN ISSUED OR SERVED UPON THE ASSESSEE. TO VERIFY THE CORRECTNES S OF THIS FACT HE DREW OUR ATTENTION TO PAGE 15 OF THE LD. CIT(A)S ORDER, WHEREIN THIS ISSUE WAS CHALLENGED FOR THE APPEAL RELATING TO THE ASSESSMEN T YEARS 1993-94, 1994- 95 AND 1996-97. HOWEVER, IN RESPECT OF THE APPEAL RELATING TO THE ASSESSMENT YEAR 1996-97 THERE IS A CATEGORICAL FIND ING ON PERUSAL OF RECORDS THAT NO NOTICE U/S.143(2) HAD BEEN ISSUED. SHE SUBMITTED THAT IN VIEW OF THIS FACT, THE ENTIRE ASSESSMENT ORDER PASS ED U/S.143(2)/147 IS LIABLE TO BE QUASHED. IN SUPPORT OF HER CONTENTION SHE RELIED UPON VARIOUS ITA NOS : 5089 & 4908/MUM/2005 3 JUDGMENTS, THE COPIES OF WHICH HAVE BEEN PRODUCED B EFORE US. THE LIST OF SUCH CASE LAWS ARE AS UNDER : SR. NO. CASE LAWS 1 THE CIT V MR. SALMAN KHAN [ITA NO.508 OF 2010 DAT ED 06/06/2011-BOM HC] 2 ITO V. THE SHIRT COMPANY [ITA NO.3450/MUM/2009 DA TED 30/06/2010] 3 THE CIT V MR. SALMAN KHAN [ITA NO.2362 OF 2009 DA TED 01/12/2009-BOM HC] 4 CWT V. HUF OF H.H. LATE J.M. SCINDIA 300 ITR 193 (BOM) 5 ITO V. R.K. GUPTA 308 ITR (AT) 49 (DEL) 6 CIT V. RAJEEV SHARMA 336 ITR 678 (ALL) 7 KUBER TABOCCO PRODUCTS PVT. LTD. V DY. CIT 310 IT R 300 (AT) (SB) (DEL) 8 ITO V. SMT. KULDIP KAUR (2011) 136 TTJ (CHD) (UO) 53 9 H. GOUTHAMCHAND V. ADDL. CIT (2010) 131 TTJ (BANG ) 204 10 CHANDRA R. GANDHI V. ITO 120 TTJ 786 (MUM) 3. ON THE OTHER HAND, THE LEARNED DR THOUGH ADMITTE D THIS FACT THAT NO NOTICE U/S.143(2) HAS BEEN ISSUED IN THIS CASE, HOW EVER, HE STRONGLY OBJECTED THAT ONCE THE ASSESSEE HAS PARTICIPATED IN THE PROCEEDINGS BEFORE THE ASSESSING OFFICER AND HAS DULY FILED ITS REPLIE S, NON ISSUANCE OF NOTICE U/S.143(2) WILL NOT INVALIDATE THE ENTIRE ASSESSMEN T ORDER AS IT IS MERE PROCEDURAL FORMALITY. AT BEST THE ENTIRE ORDER CAN BE SET ASIDE AND RESTORE BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE AFRESH. HE STRONGLY RELIED UPON THE REASONINGS GIVEN BY THE LD. CIT(A). 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND ALSO PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT T HAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S. 148, INTERALIA BY STATING ITA NOS : 5089 & 4908/MUM/2005 4 THAT THE RETURN OF INCOME FILED U/S.139 ORIGINALLY SHOULD BE TREATED AS RETURN FILED IN COMPLIANCE TO THE NOTICE U/S.148. HERE IN THIS CASE, THE ORIGINAL RETURN WAS FILED ON 31.03.1998 AND IN PURS UANCE TO WHICH ASSESSMENT WAS COMPLETED U/S.143(3), VIDE ORDER DAT ED 16.03.1999. THEREAFTER A NOTICE U/S.148 WAS ISSUED ON 21.03.200 0 AND IN RESPONSE TO WHICH THE ASSESSEE HAS FILED ITS RETURN OF INCOME I N THE MANNER STATED ABOVE. IT IS ALSO AN ADMITTED FACT THAT AFTER THE FILING OF THE RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S.148, NO NOTICE U/S.143(2) HAS BEEN ISSUED WHICH IS ALSO EVIDENT FROM THE FACT THAT ON PAGE 5 OF THE LD. CIT(A)S ORDER WHEREIN THIS ISSUE WAS CHALLENGED BEFORE HIM HAS BEEN CATEGORICALLY STATED THAT NO NOTICE U/S.143(7) WAS ISSUED. THE R ELEVANT FINDING AND OBSERVATION OF THE LD. CIT(A) FOR THE SAKE OF RECOR D ON THIS SCOPE IS REPRODUCED HEREIN BELOW :- NOW, I DEAL WITH THE A/RS CONTENTIONS THAT REASSE SSMENT PROCEEDINGS FOR THE ASSESSMENT YEARS 1993-94 AND 19 94-95 WERE BEYOND JURISDICTION AND BAD IN LAW AB INITIO A S THE NOTICE UNDER SEC.143(2) WAS ISSUED BEYOND STIPUTLATED PERI OD OF 12 MONTHS. IT IS ADMITTED FACT THAT RETURNS OF INCOME IN PURSUANT TO NOTICES UNDER SEC.148 WERE FILED ON 24/10/1997 AND 13/10/1997 RESPECTIVELY FOR ASSESSMENT YEARS 1993-9 4 AND 1994-95. NOTICES DATED 23/4/1999 BOTH FOR ASSESSME NT YEARS 1993-94 AND 1994-95 WERE SERVED UPON THE APPELLANT UNDER SEC. 143(2) ON 4/5/1999. COPIES OF THE NOTICES ISS UED UNDER SEC. 148 AND 143(2) ARE PLACED ON RECORD AT PGS 97 AND 105 OF THE PAPER BOOK FOR THE ASSESSMENT YEAR 1993-94 AND AT PGS. 130 AND 124 OF THE PAPER BOOK FOR THE ASSESSMENT Y EAR 1994- 95. THUS THE NOTICES UNDER SEC 143(2) WERE ISSUED BEYOND THE STIPULATED TIME BOTH FOR ASSESSMENT YEARS 1993-94 A ND 1994- 95. HOWEVER, IN RESPECT OF ASSESSMENT YEAR 1996-97 NO NOTICE UNDER SEC 143(2) WAS ISSUED. BUT IN THE CASE OF VIJAY KAPOOR V. DCIT, CIR.1(5), PUNE [ITA NO.840/PN/2002 : DATE OF ORDER 13/3/2003, PUNE ITAT] IT WAS HELD THAT PROVI SIONS OF SEC ITA NOS : 5089 & 4908/MUM/2005 5 143(2) ARE APPLICABLE IN THE CASE WHERE RETURN OF I NCOME IS FILED UNDER SEC 139(1) OR IN RESPONSE TO NOTICE UNDER SEC . 142(1). TIME LIMIT GIVEN IN PROVISO TO SEC 143(2) CANNOT BE MADE APPLICABLE IN REFERENCE TO THE RETURN FILED UNDER S EC 158 BC AND ON SIMILAR REASONING RETURN FILED IN RESPONSE TO NO TICE UNDER SEC. 148 IS NOT FOUND TO BE MENTIONED IN SEC. 143(2). T IME LIMIT MENTIONED IN PROVISO TO SEC 143(2) IS NOT APPLICABL E IN THE CASE OF ASSESSMENT/RE-ASSESSMENT UNDER SEC. 148 AS WAS H ELD IN ITO, KOLHAPUR V. MASTER VISHAL D. LADGE IN ITA NO.683/PN/2002: A.Y. 1992-93, DATED 24/7/2002. SI MILARLY, IN THE CASE OF CHANDRA BHAN BANSAL V. DCIT 79 ITD 6 39 (AGRA), SUMERPUR TRUCK OPERATORS UNION VS. ITO 89 ITD 89 (J ODH) AND MITTAL COURT PREMISES CO-OP. SOCIETY LTD. VS. ITO 1 40 TAXMAN 145 (MUM)(MAG) IT WAS HELD THAT PROVISONS OF SEC 1 43(2) HAS NO APPLICATION TO PROCEEDINGS INITIATED UNDER SEC 1 47 / 148. MERE AVAILABILITY OF TIME LIMIT UNDER SEC 143(2) CA NNOT OPERATE AS A BAR AGAINST ISSUE OF NOTICE UNDER SEC 147 / 14 8. THE RESTRICTION OF TIME AS CONTAINED IN SEC 143(2) MAY HAVE RELEVANCE WHERE THE AO HAS TO ELECT WHETHER HE SHO ULD ACCEPT THE RETURN OF INCOME OR VERIFY THE RETURN OF INCOME OR NOT. TO THAT EXTENT, IT ALSO REMOVES THE UNCERTAINTY FROM T HE MIND OF THE TAX PAYERS WHO HAVE FILED THEIR RETURNS UNDER SEC 1 39 / 142 THAT THEIR RETURNS WOULD NOT BE TAKEN UP FOR SCRUTI NY ONCE THE TIME LIMIT ENVISAGED BY SEC. 143(2) EXPIRES, BUT TH ERE IS NO SUCH UNCERTAINTY IN THE MINDS OF THE ASSESSEE CHARGED WI TH THE ESCAPEMENT OF INCOME AS THEY KNOW IT FAIRLY WELL TH AT THEIR RETURNS WILL NECESSARILY BE EXAMINED AND VERIFIED A ND THAT THEIR ASSESSMENTS WOULD BE MADE UNDER SEC.143(3) AND NOT UNDER SEC 143(1). IF IT IS VIEWED THAT THE A.O. CANNOT I SSUE NOTICE AFTER THE EXPIRY OF TIME LIMIT UNDER SEC.143(2) SO AS TO BRING THE ESCAPED INCOME TO TAX, IT WOULD BE INDIRECTLY HOLDI NG THAT THE A.O. SHALL NECESSARILY ACCEPT THE RETURN FILED UNDE R SEC. 147/148 WITHOUT MAKING ENQUIRIES TO VERIFY THE CORR ECTNESS OF THE CLAIM MADE IN THE RETURN AND, THUS, DEFEAT THE VERY SCHEME OF TAXATION OF ESCAPED INCOME. THUS, THE APPELLANT FAILS ON THESE GROUNDS OF APPEA L AND THE ACTION OF THE ASSESSING OFFICER IN REOPENING THE AS SESSMENTS FOR THE ASSESSMENT YEARS 1993-94,1994-95 AND 1996-97 IS UPHELD. 5. THE IMPLICATION OF NON ISSUANCE OF NOTICE U/S.14 3(2) AFTER THE ASSESSEE HAS FILED HIS RETURN OF INCOME IS NO MORE RES-INTEGRA AS THIS HAS ITA NOS : 5089 & 4908/MUM/2005 6 NOW BEEN SETTLED BY THE HON'BLE SUPREME COURT IN TH E CASE OF ACIT VS. HOTEL BLUE MOON REPORTED IN 321 ITR 362 . EVEN PRIOR TO THAT THE JURISDICTIONAL HIGH COURT AND VARIOUS OTHER HIGH CO URTS IN SERIES OF JUDGMENT HAVE CATEGORICALLY LAID DOWN THE PROPOSITI ON THAT ONCE THE ASSESSEE HAS FILED HIS RETURN OF INCOME, THE NOTICE U/S.143(2) HAVE TO BE SERVED UPON THE ASSESSEE WITHIN THE TIME PERIOD PRE SCRIBED IN PROVISO TO SECTION 143(2). IF SUCH A NOTICE IS NOT SERVED WIT HIN THE STATUTORY TIME PRESCRIBED IN THE PROVISO TO SECTION 143(2), THE EN TIRE ASSESSMENT ORDER BECOMES NULL AND VOID. SUCH AN ISSUANCE AND SERVI CE OF NOTICE IS NOT A MERE PROCEDURAL IRREGULARITY BUT IT IS A MANDATORY REQUIREMENT WHICH HAS TO BE COMPLIED WITH. THE HON'BLE ALLAHABAD HIGH CO URT IN THE CASE OF CIT VS. RAJEEV SHARMA REPORTED IN 336 ITR 678 AFTER CONSIDERING THE SERIES OF JUDGMENT ON THIS ISSUE INCLUDING THAT OF THE HON 'BLE SUPREME COURT IN THE CASE OF HOTEL BLUE MOON (SUPRA) HAS HELD THAT WHEN STATUTORY PROVIDES FOR A PARTICULAR PROCEDURE, THE AUTHORITY HAS TO FOLLOW THE SAME AND THEY CANNOT BE PERMITTED TO ACT IN CONTRAVENTIO N OF THE SAID PROCEDURE. IF THE STATUTORY TIME LIMIT HAS BEEN PR OVIDED FOR ISSUING AND SERVICE OF NOTICE U/S.143(2) AFTER FILING OF RETURN , THE SAME IS TO BE ADHERED TO AND IT IS INCUMBENT UPON THE ASSESSING OFFICER T O DO SO. IN THIS CASE, THE HON'BLE HIGH COURT WAS DEALING WITH THE NON ISS UANCE OF NOTICE U/S.143(2) IN CASE OF RETURN FILED IN RESPONSE TO T HE NOTICE U/S.148. THUS IN VIEW OF VARIOUS DECISION OF THE HON'BLE COURTS A S REFERRED AND RELIED UPON THE LEARNED COUNSEL AND THE DECISION OF HON'BL E SUPREME COURT IN ITA NOS : 5089 & 4908/MUM/2005 7 THE CASE OF HOTEL BLUE MOON (SUPRA), WE HOLD THAT THE ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S. 148, DATED 28.07.2000 IS INVALID FOR THE REASON THAT NO NOTICE U/S.143(2) WAS ISSUED AFTER FILING O F RETURN IN RESPONSE TO NOTICE U/S.148 AND IS, THEREFORE, QUASHED. 6. EVEN THE PROVISIONS OF SECTION 292BB BROUGHT IN THE STATUTE W.E.F 01.04.2008 WILL ALSO NOT FAVOUR THE CASE OF THE DEP ARTMENT AS IT HAS BEEN HELD BY THE SPECIAL BENCH IN THE CASE OF KUBER TABOCCO PRODUCTS PVT. LTD. V DY. CIT REPORTED IN 310 ITR 300 (AT) (SB) (DEL) AND ALSO BY THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. SALMAN KHAN IN ITA NO.2623/M/2009 , THAT THE PROVISIONS OF SECTION 292 BB WILL NOT BE APPLICABLE PRIOR TO THE ASSESSMENT YEAR 2008 -09 IN THE CASES OF NON ISSUANCE AND IMPROPER SERVICE OF NOTICE U/S.143(2). THUS THE CONDITIONS LAID IN SECTION 292 BB WILL ALSO NOT APPLY IN THIS CASE. 7. IN THE RESULT, THE ASSESSMENT ORDER PASSED U/S.1 43(2)/147 DATED 28.07.20000 IS QUASHED AND ACCORDINGLY THE APPEAL O F THE ASSESSEE STANDS ALLOWED. SINCE WE HAVE QUASHED THE ASSESSMENT ORDE R, THE GROUND OF APPEAL DEALING ON MERITS AND OTHER LEGAL ISSUES HAV E BECOME PURELY ACADEMIC AND, THEREFORE, THE SAME ARE NOT ADJUDICAT ED UPON AND ARE TREATED AS INFRUCTUOUS. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. ITA NOS : 5089 & 4908/MUM/2005 8 ITA NO. : 4908/MUM/2005 (ASSESSMENT YEAR : 1996-97) 8. IN VIEW OF THE ABOVE FINDING GIVEN IN THE ASSESS EES APPEAL WHEREBY WE HAVE QUASHED THE ASSESSMENT ORDER ON LEGAL GROUN D, THEREFORE, THE GROUNDS RAISED BY THE DEPARTMENT IN THE AFORESAID A PPEAL HAVE BECOME PURELY ACADEMIC AND, THEREFORE, THE SAME IS BEING D ISMISSED AS INFRUCTUOUS. 9. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE I S ALLOWED AND THE APPEAL OF THE DEPARTMENT STANDS DISMISSED. ORDER PRONOUNCED ON THIS 31 ST DAY OF OCTOBER, 2012. SD/- SD/- ( P. M. JAGTAP ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT: 31.10.2012 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI