Prima Paper Engineer P.Ltd., V. ACIT, Cir-10, Pune,

ITA 519/PUN/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3356 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 16-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S SINGH
• Keywords: Depreciation; Opportunity of being heard
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER I.T.A. NO. 519/PN/2008 ( ASSTT.YEAR. 2000-01 ) PRIMA PAPER ENGINEERING PRIVATE LIMITED, APP ELLANT T-73 MIDC, PUNE 411 026 PAN : NOT AVAILABLE VS. ACIT, CIRCLE 10 RESPON DENT PUNE APPELLANT BY: SHRI M.R. BHAGWAT RESPONDENT BY: SHRI A.S. SINGH ORDER PER D. KARUNAKARA RAO, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE IMPUGNED ORDER OF THE CIT(A)-III, PUN DT. 10.1.2008 FOR THE A.Y. 2000-01. PASSED U/S. 271(1)(C ) LEVYING PENALTY OF RS. 68,19 5/-. THE GROUNDS RAISED READ AS UNDER : 1. THE HONABLE COMMISSIONER (APPEALS) HAS ERRED IN NOT DECIDING THE MATTER UNDER THE PRETEXT THAT IT CANNO T BE ADJUDICATED BY AN OFFICER OF AN EQUAL RANK WITHOUT INVESTIGATING WHETHER THE RESPECTED AUTHORITY IS JU STIFIED IN REOPENING THE CASE. 2. WITHOUT PREJUDICE TO THE ABOVE THE NOTICE U/S 14 8 IS TIME BARRED AND THEREFORE THE REASSESSMENT IS BAD I N LAW AND OUGHT TO BE CONSIDERED AS VOID. 3. WITHOUT PREJUDICE TO THE ABOVE THE HONABLE AO ER RED IN NOT ALLOWING THE DEPRECIATION OF RS. 104,05,000/- O N WINDMILL INSTALLED AND USED BEFORE 31/03/2000. 2. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSE SSEE BROUGHT TO OUR ATTENTION THE MODIFIED LEGAL GROUND AND READ OUT THE SAME STATING THAT THE RE-ASSESSMENT IS BAD IN LAW AND OU GHT TO BE PAGE 2 OF 4 ITA NO.519/PN/2008 PRIMA PAPER ENGINEERING PRIVATE LTD., A.Y. 2000-01 CONSIDERED AS VOID. IN THIS REGARD, LD. COUNSEL ST ATED THAT THE ASSESSEE FILED THE RETURN OF INCOME ORIGINALLY ON 3 1.11.2000 AND SCRUTINY ASSESSMENT U/S. 143(1) WAS COMPLETED ON 31 ST MARCH 2003. NOTICE U/S. 148 WAS ISSUED ON 31.3.2006. THUS, AS P ER THE LD COUNSEL, THE IMPUGNED NOTICE U/S. 148 WAS ISSUED AFTER LAPSE OF FOUR YEARS AND THE SAME IS INVALID AS THERE IS NO FAILURE ON THE PART OF ASSESSEE AS PER THE CONTENTS OF PROVISO TO SECTION 147 OF THE ACT. IN THIS REGARD, COUNSEL ALSO MENTIONED THAT T HE ISSUE IN QUESTION FOR VERIFICATION IN THE RE-ASSESSMENT CLAI MED RELATE TO WINDMILLS AND THE SAME WERE DULY EXAMINED IN DEPTH BY THE ASSESSMENT OFFICER DURING THE REGULAR ASSESSMENT PR OCEEDINGS. REFERRING TO THE CONTENTS OF THE PAPER BOOK FILED B Y HIM, LD COUNSEL BROUGHT TO OUR NOTICE THE ASSESSEES LETTER DT. 24. 3.2003. FURTHER, REFERRING TO THE IMPUGNED ORDER OF THE CIT(A), LD C OUNSEL STATED THAT THE COMMISSIONER ERRONEOUSLY HELD THAT HE HAS NO POWER TO ADJUDICATE THE SAID ISSUE. FURTHER, LDCOUNSEL RELIE D ON THE FOLLOWING JUDGMENTS TO SUPPORT HIS ARGUMENT THAT THE REOPENIN G IS BAD IN LAW: I) ARTHER ANDERSON,324 ITR 240 (MUM) II) KELVINATOR INDIA LTD., 320 ITR 561 (S.C) 3. ON THE OTHER HAND, THE LD. D.R. OF THE REVENUE R ELIED ON THE ORDER OF THE A.O AND THE CIT(A). 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE REVENUE AND THE PAPER BOOK FILED BEFORE US. THE R EASONS FROM THE SAID RECORDS SHOW THAT THE ISSUE IN QUESTION WAS BR OADLY EXAMINED BY THE A.O DURING THE REGULAR ASSESSMENT PROCEEDING S. REGARDING THE ISSUE OF NOTICE, THE A.O OR LD DR HAS NOT BROUG HT OUT ANYTHING TO DEMONSTRATE THAT THERE IS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR MAKING THE ASSESSMENT. THE PERUSAL OF THE PARA 5 OF THE IMPUG NED ORDER, WHICH IS RELEVANT, MENTIONED THAT THE CIT(A) DOES N OT HAVE JURISDICTION OVER THE ISSUE WHEN THE REOPENING IS D ONE WITH THE ADMINISTRATIVE APPROVAL OF THE CONCERNED ADMINISTRA TIVE COMMISSIONER. FOR THE SAKE OF READY REFERENCE, PAR A 5 OF THE IMPUGNED ORDER IS REPRODUCED AS UNDER: PAGE 3 OF 4 ITA NO.519/PN/2008 PRIMA PAPER ENGINEERING PRIVATE LTD., A.Y. 2000-01 5. THE SUBMISSION HAS BEEN CONSIDERED. IN THE APPE LLANTS CASE, ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T. ACT. THE CASE WAS REOPENED U/S 147 OF THE I.T . ACT AFTER OBTAINING APPROVAL FROM CIT-V, PUNE. OBVIOUSLY, TH E CIT-V, PUNE HAS APPROVED THE REOPENING OF THE CASE U/S 147 AFTER DUE CONSIDERATION OF THE FACTS OF THE CASE IN THE L IGHT OF THE PROVISIONS OF LAW. THEREFORE, THE DECISION OF REOP ENING THE CASE IS THE DECISION OF THE COMMISSIONER OF INCOME- TAX, THE JUSTIFICATION OF WHICH CANNOT BE ADJUDICATED UPON B Y AN AUTHORITY OF EQUIVALENT RANK. IN THIS VIEW OF THE MATTER, I DO NOT MYSELF COMPETENT ENOUGH TO HAVE JURISDICTION OV ER THE ISSUE OF THE VALIDITY OF THE REOPENING OF THE CASE U/S 147 OF THE I.T. ACT. AS SUCH, SINCE I DO NOT HAVE JURISDICTION OVER THE BASIC ISSUE OF VALIDITY OF THE PROCEEDINGS U/S 147 OF THE I.T. ACT, I DECLINE TO ENTERTAIN THE APPEAL. 5. FROM THE ABOVE, IT IS EVIDENT THAT THE CIT(A) NO T ONLY FAILED TO ADJUDICATE THE ISSUE ON MERITS, BUT ALSO FAILED TO REALIZE HIS OWN POWERS CONFERRED ON HIM BY THE STATUTE. HE FAILED T O REALIZE THAT EVERY GROUND IN CONNECTION WITH THE ORDERS PASSED U /S 147 ARE COVERED BY CLAUSE (B) OF SECTION 246A OF THE ACT. I N OUR OPINION, THE CIT(A) IS GROSSLY ERRED IN DECLINING TO ENTERTAIN T HE APPEAL AND PASS A WELL REASONED ORDER AS PER THE PROVISION OF SECTI ON 250(6) OF THE ACT. THEREFORE, WE ARE OF THE CONSIDERED OPINION T HAT THE CIT(A) HAS POWER TO DEAL WITH THE IMPUGNED GROUND IN APPEA L RELATING TO THE ISSUE OF VALIDITY OF RE-OPENING OF THE CASE U/S . 147 OF THE ACT. HE IS ALSO DIRECTED TO PASS THE SPEAKING ORDER ON E VERY GROUNDS RAISED BY THE ASSESSEE IN FORM NO. 35 FILED BEFORE HIM. IT GOES WITHOUT MENTIONING IN DETAIL, THAT THE CIT(A) SHALL GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDI NGLY, THE GROUNDS IS SET ASIDE TO THE FILE OF CIT(A). 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 27TH AUGUST 2010. SD/- SD/- ( I.C. SUDHIR) JUDICIAL MEMBER (D. KARUNAKARA RAO ) ACCOUNTANT MEMBER PUNE DATED THE 27TH AUGUST 2010 PAGE 4 OF 4 ITA NO.519/PN/2008 PRIMA PAPER ENGINEERING PRIVATE LTD., A.Y. 2000-01 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)- III, PUNE 4. THE CIT- V, PUNE 5. THE D.R, B BENCH, PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE