Mohd. Fazil Ur Rahman Khan, Bareily V. Income Tax Officer-1(3), Bareily

ITA 554/LKW/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0177 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 27-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 31-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K SINGH
• Keywords: Valuation report; Reassessment proceedings
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC , LUCKNOW BEFORE SHRI. A. D. JAIN, VICE PRESIDENT ITA NO. 554/LKW/2017 ASSESSMENT YEAR: 2007 - 08 MR. MOHD. FAZIL UR RAHMAN KHAN M. F. REHMAN BUILDING 105 - E, CIVIL LINES BAREILLY V. THE INCOME TAX OFFICER 1(3) BAREILLY T AN /PAN : AIVVPK3131A (APP ELL ANT) (RESPONDENT) APPELLANT BY: SHRI RAKESH GARG, ADVOCATE RESPONDENT BY: SHRI C. K. SINGH, D.R. DATE OF HEARING: 25 0 2 201 9 DATE OF PRONOUNCEMENT: 28 0 2 201 9 O R D E R THIS IS ASSESSEES A PPEAL AGAINST THE ORDER OF THE LD. CIT(A), BAREILLY DATED 21/7/2017 FOR ASSESSMENT YEAR 2007 - 08, TAKING THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HAS GROSSLY ERRED IN UPHOLDING THE VALIDITY OF REASSESSMENT PROCEED INGS INITIAT ED BY THE ASSESSING OFFICER INSPITE OF THERE BEING NO SERVICE OF NOTICE, A FACT WHICH WAS REPEATEDLY BROUGHT TO THE KNOWLEDGE OF THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN U PHOLDING THE INITIATION OF REASSESSMENT PROCEEDINGS EVEN WHEN THE ASSESSING OFFICER FAILED TO DISPOSE THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST REASSESSMENT PROCEEDINGS BY A SEPARATE SPEAKING ORDER IN CONTRAVENTION OF THE LAW LAID DOWN BY THE COURT IN GKN DRIVESHAFTS. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN UPHOLDING THE INITIATIO N OF REASSESSMENT PROCEEDINGS IN SPITE OF THE FACT THAT NEITHER THE ASSESSING OFFICER ITA NO.554/LKW/2017 PAGE 2 OF 6 NOR THE COMMISSIONER OF INCOME TAX ( APPEALS) COULD CONTROV ERT THE CONTENTS OF THE AFFIDAVIT FURNISHED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS, REGARDING NON SERVICE OF NOTICE. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER ERRED IN IGNORING THE VALUATION REPORT OF THE GOVERNMENT APPROV ED REGISTERED VALUER FURNISHED BY THE ASSESSEE WITHOUT BRINGING ANY DEFECT ON RECORD IN THE SAID VALUATION REPORT . 5. THE ASSESSEE RESERVES ITS RIGHT TO ADD,, AMEND, ALTER OR DELETE ANY GROUND OF APPEAL AT THE TIME OF HEARING OF APPEAL. 2 . APROPOS GROUND NO .2, THE LD. A.R. OF THE ASSESSEE HAS CONTENDED THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE INITIATION OF REASSESSMENT PROCEEDINGS EVEN WHEN THE ASSESSING OFFICER FAILED TO DISPOSE OF THE OBJECTIONS RAISED BY THE ASSESSEE AGAINST THE REASSESSMENT PROCEED INGS BY A SEPARATE SPEAKING ORDER IN CONTRAVENTION OF THE LAW LAID DOWN BY THE HON'BLE COURT IN GKN DRIVESHAFTS . 3 . THE LD. D.R., ON THE OTHER HAND, HAS PLACED STRONG RELIANCE ON THE ASSESSMENT ORDER. 4 . THE ASSESSEE RAISED THE FOLLOWING OBJECTIONS BEFORE THE ASSESSING OFFICER AGAINST THE REASONS RECORDED FOR BELIEF OF ESCAPEMENT OF INCOME: - ITA NO.554/LKW/2017 PAGE 3 OF 6 ITA NO.554/LKW/2017 PAGE 4 OF 6 5 . THE ASSESSING OFFICER DISPOSED OF THE ASSESSEES OBJECTION BY OBSERVING AS FOLLOWS: - 6 . THUS, THE OBJECTION S RAISED BY THE ASSESSEE AGAINST THE REASONS RECORDED FOR BE LIEF OF ESCAPEMENT OF INCOME HAVE BEEN DISPOSED OF BY WAY OF A COMPOSITE ORDER, THEREIN ALSO COMPLETING THE ASSESSMENT. 7 . IN GKN DRIVESHAFTS PVT. LTD. VS. ITO AND OTHERS, 259 ITR 19 (SC) (RELIED ON BY THE LD. A.R. OF THE ASSESSEE), ON RECEIPT OF THE REAS ONS RECORDED BY THE ASSESSING OFFICER FOR FORMING A BELIEF OF ESCAPEMENT OF INCOME, THE NOTICEE IS ENTITLED TO FILE OBJECTIONS TO THE ISSUANCE OF THE NOTICE FOR REASSESSMENT, WHICH OBJECTIONS THE ASSESSING OFFICER IS BOUND TO DEPOSE OF B Y PASSING A SPEAKIN G ORDER BEFORE PROCEEDING WITH THE ASSESSMENT. 8 . IN GENERAL MOTORS INDIA (P) LTD. VS. DCIT, 354 ITR 244 (GUJ.), IT HAS BEEN HELD THAT WHERE NO ORDER HAS BEEN PASSED BY THE ASSESSING OFFICER DECIDING THE OBJECTIONS FILED BY THE ASSESSEE AGAINST NOTICE ISSUE D UNDER SECTION 148 OF THE ACT, OR WHERE SUCH OBJECTIONS HAVE BEEN DECIDED ALONG WITH THE ASSESSMENT ORDER, THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT DESERVES TO BE QUASHED. THEIR LORDSHIPS FURTHER OBSERVED AS FOLLOWS: - THE ASSESSING OFFICER IS MAND ATED TO DECIDE THE OBJECTION TO THE NOTICE UNDER SECTION 148 AND SUPPLY OR COMMUNICATE IT TO THE ASSESSEE. THE ASSESSEE GETS AN OPPORTUNITY TO CHALLENGE THE ORDER IN A WRIT PETITION. THEREAFTER, THE ASSESSING OFFICER MAY PASS THE REASSES S MEN T ORDER. WE HOLD THAT IT WAS NOT OPEN TO THE ITA NO.554/LKW/2017 PAGE 5 OF 6 ASSESSING OFFICER TO DECIDE THE OBJECTION TO NOTICE UNDER SECTION 148 BY A COMPOSITE ASSESSMENT ORDER. THE ASSESSING OFFICER WAS REQUIRED TO FIRST DECIDE THE OBJECTION OF THE ASSESSEE FILED UNDER SECTION 148 AND SERVE A CO PY OF THE ORDER ON ASSESSEE. AND AFTER GIVING SOME REASONABLE TIME TO THE ASSESSEE FOR CHALLENGING HIS ORDER, IT WAS OPEN TO HIM TO PASS AN ASSESSMENT ORDER. THIS WAS NOT DONE BY THE ASSESSING OFFICER, THEREFORE, THE ORDER ON THE OBJECTION TO THE NOTICE UNDER SECTION 148 AND THE ASSESSMENT ORDER PASSED UNDER THE ACT DESERVES TO BE QUASHED.: ( STRESS SUPPLIED). 9 . NO DECISION CONTRARY TO EITHER GKN DRIVESHAFTS (SUPRA), OR GENERAL MOTORS (SUPRA) HAS BEEN CITED BEFORE THIS BENCH. 10 . THEREFORE, THE GRIEVANCE OF THE ASSESSEE BY WAY OF GROUND NO.2 RAISED BEFORE THIS BENCH IS JUSTIFIED. IT IS ACCEPTED. RESPECTFULLY FOLLOWING GKN DRIVESHAFTS (SUPRA) AND GENERAL MOTORS (SUPRA), THE REASONS RECORDED AND THE REASSESSMENT NOTICE DATED 26/3/2014 IS QUASHED. ALL PR OCEEDINGS PURSUANT TO THE SAID NOTICE, CULMINATING IN THE REASSESSMENT ORDER DATED 27/3/2015, AND THE IMPUGNED ORDER DATED 21/7/2017 ARE QUASHED. 11 . NOTHING FURTHER HENCE SURVIVES FOR ADJUDICATION AND AS SUCH, THE OTHER GROUNDS RAISED BY THE ASSESSEE ARE NOT REQU IRED TO BE GONE INTO, NOR WAS ANYTHING ELSE ARGUED. 12 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 / 02 /201 9 . SD/ - [ A. D. JAIN ] VICE PRESIDENT DATED: 28 TH FEBRUARY , 201 9 JJ: 2502 ITA NO.554/LKW/2017 PAGE 6 OF 6 COPY FORWARDE D TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR BY ORDER ASSISTANT REGISTRAR