DCIT, CHENNAI V. M/s. Tube Investments of India Ltd., CHENNAI

ITA 559/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61021 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 07-03-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 29-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RANGARAJAN JR STANDING C; A RAI
• Keywords: Reopening of assessment; Retrospective amendment; Assessment record
• Section: 143(3); 80HHC; 234B; 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.663 /MDS/2011 (ASSESSMENT YEAR : 2000-01) M/S.TUBE INVESTMENTS OF INDIA LTD., (FORMERLY KNOWN AS TI DIAMOND CHAIN LTD ) DARE HOUSE NO.234, NSC BOSE ROAD, CHENNAI-600 001. PAN:AAACT1249H VS. THE DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAX PAYER UNIT, 1775, JAWAHARLAL NEHRU INNER RING ROAD, ANNA NAGAR WEST EXTENSION CHENNAI-600 101. (APPELLANT) (RESPONDENT) ITA NO.559 /MDS/2011 (ASSESSMENT YEAR : 2000-01) THE DEPUTY COMMISSIONER OF INCOME TAX, LARGE TAX PAYER UNIT, 1775, JAWAHARLAL NEHRU INNER RING ROAD, ANNA NAGAR WEST EXTENSION CHENNAI-600 101. VS. M/S.TUBE INVESTMENTS OF INDIA LTD., (FORMERLY KNOWN AS TI DIAMOND CHAIN LTD ) DARE HOUSE NO.234, NSC BOSE ROAD, CHENNAI-600 001. PAN:AAACT1249H (APPELLANT) (RESPONDENT) ASSESSEE BY : MR. SRIRAM SESHADRI, C.A., REVENUE BY : MR. A. RAI, CIT DR & MR. K.E.B.RANGARAJAN, JR. STANDING C OUNSEL DATE OF HEARING : 7 TH MARCH, 2012 DATE OF PRONOUNCEMENT : 17 TH APRIL, 2012 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THESE TWO CROSS APPEALS FILED BY THE ASSESSEE AN D THE REVENUE ARE DIRECTED AGAINST THE ORDER OF CIT(A), CHENNAI DATED 14.01.2011 RELATING TO THE ASSESSMENT YEAR 20 00-01. SINCE BOTH THE APPEALS ARE ARISING OUT OF THE COMMO N ORDER, ITA NOS.663& 559/MDS/2011 2 AND ISSUES INVOLVED ARE THE SAME, THEY ARE TAKEN UP TOGETHER FOR ADJUDICATION AND DISPOSED OF BY THIS COMMON ORDER. . 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE COM PANY IS ENGAGED IN THE MANUFACTURE OF AUTOMATIVE INDUSTRIAL CHAINS. THE ASSESSEE FILED RETURN OF INCOME FOR THE ASSESSM ENT YEAR 2000-01 ON 27.11.2000 ADMITTING TOTAL INCOME OF ` 4,66,18,700/- AND CLAIMED REFUND OF ` 19,95,515/-. THE RETURNS OF THE ASSESSEE WAS ACCEPTED AND INTIMATION UNDER SECTION 143(1) DATED 31.03.2001 WAS GIVEN TO THE AS SESSEE THAT REFUND HAS BEEN ADJUSTED AGAINST THE DEMAND FO R THE ASSESSMENT YEAR 1998-99. SUBSEQUENTLY, THE ASSESSIN G OFFICER FOUND THAT INCOME HAD ESCAPED ASSESSMENT DU E TO NON-DEDUCTION OF 90% OF THE SERVICE CHARGE FROM THE PROFITS OF BUSINESS FOR THE PURPOSE OF COMPUTATION OF DEDUCTIO N UNDER SECTION 80HHC. ACCORDINGLY, NOTICE WAS ISSUED TO TH E ASSESSEE UNDER SECTION 148 ON 6.6.2006. THE ASSESS EE GAVE REPLY TO THE NOTICE VIDE LETTER DATED 10.07.20 06 STATING THAT ORIGINAL RETURN FILED BE TREATED AS RETURN FIL ED IN PURSUANCE OF NOTICE ISSUED UNDER SECTION 148 AND ALSO SOUGHT REASONS ITA NOS.663& 559/MDS/2011 3 FOR REOPENING OF ASSESSMENT. THE ASSESSING OFFICER STATED THE REASON FOR REOPENING OF ASSESSMENT AS UNDER:- WHILE CLAIMING THE DEDUCTION U/S.80HHC, THE ASSESSEE HAS NOT DEDUCTED 90% OF THE SERVICE CHARGES OF ` .25 LAKHS FROM THE PROFITS OF BUSINESS. THUS THERE IS AN EXCESS ALLOWANCE OF DEDUCTION U/S.80HHC OF ` 53.29 LAKHS, WHICH NEEDS TO BE WITHDRAWN. NOTICE UNDER SECTION 143(2) DATED 14.06.2007 WAS IS SUED TO THE ASSESSEE AND THE CASE WAS TAKEN UP FOR SCRUTINY . ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 1 47 WAS COMPLETED ON 26.12.2007 DETERMINING THE TOTAL INCOM E OF THE ASSESSEE AT ` 5,37,08,625/- BY RECOMPUTING DEDUCTION CLAIMED UNDER SECTION 80HHC ADDING 5% OF DIVIDEND I NCOME UNDER SECTION 14A, IGNORING CREDIT TO TDS CERTIFICA TES OF ` 18,714/- AND LEVYING INTEREST UNDER SECTION 234B & 234D. THUS THE ASSESSING OFFICER RAISED DEMAND OF ` 61,51,826/-. 3. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE CIT(A). DURING THE PENDENCY OF THE APPEAL BEFORE THE CIT(A), THE ASSESSEE FILE D AN APPLICATION UNDER SECTION 154 FOR RECTIFICATION BEF ORE THE ASSESSING OFFICER. THE ASSESSING OFFICER VIDE ORDER DATED ITA NOS.663& 559/MDS/2011 4 28.01.2009 RECTIFIED THE MISTAKE VIZ. DELETED THE D ISALLOWANCE UNDER SECTION 14A, RECTIFYING ARITHMETICAL CALCULAT ION IN COMPUTATION OF BENEFITS UNDER SECTION 80HHC AND DEL ETED THE LEVY OF INTEREST UNDER SECTION 234B. 4. LEARNED CIT(A) WHILE DECIDING THE APPEAL OF THE ASSESSEE VIDE ORDER DATED 14.01.2011 HELD THAT NOT ICE CANNOT BE TREATED AS INVALID SINCE THE NOTICE WAS I N SUBSTANCE AND EFFECT ACCORDING TO THE INTENT AND PURPOSE OF THE ACT AND WAS FOR THE APPELLANT ONLY AND DISMISSED THE GROUND OF THE DEFECTIVE NOTICE OF THE ASSESSEE. THE NEXT ISSUE WI TH REGARD TO NOT PASSING A SEPARATE ORDER DISPOSING OF OBJECT ION OF THE ASSESSEE BY THE ASSESSING OFFICER, THE CIT(A) RELYI NG UPON THE JUDGEMENT OF HONBLE SUPREME COURT IN THE CAS E OF ACIT VS. RAJESH JHAVERI STOCK BROKERS P.LTD., REPOR TED AS 291 ITR 500(SC) DISMISSED THE GROUND OF THE ASSESSE E. THE LEARNED CIT(A) ALSO DISMISSED THE CONTENTION OF THE ASSESSEE THAT IF THE ASSESSING OFFICER DOES NOT ASSESS THE I NCOME FOR WHICH NOTICE UNDER SECTION 148 WAS ISSUED, HE CANN OT ASSESS OTHER INCOME UNDER SECTION 147. SIMILARLY, THE ITA NOS.663& 559/MDS/2011 5 LEARNED CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND OF EXCLUSION OF 90% OF TOTAL EXPENSES UNDER SECTION 80HHC. HOWEVER, THE LEARNED CIT(A) ALLOWED THE ISSU E PERTAINING TO OMISSION TO GIVE CREDIT FOR TDS CERTI FICATES SUBMITTED ALONG WITH THE RETURN OF INCOME AS WELL A S LEVY OF INTEREST UNDER SECTION 234D AND THE APPEAL FILED B Y THE ASSESSEE WAS PARTLY ALLOWED BY THE CIT(A) IN THE AB OVE TERMS. 5. NOW BOTH THE REVENUE AND ASSESSEE HAVE COME IN APPEAL AGAINST THE IMPUGNED ORDER OF THE CIT(A). T HE REVENUE HAS IMPUGNING THE ORDER OF THE CIT(A) IN IT A NO.559/MDS/2011 ON THE GROUND THAT THE LEARNED CIT (A) HAS ERRED IN DELETING THE INTEREST UNDER SECTION 234D. ON THE OTHER HAND, THE ASSESSEE HAS PREFERRED APPEAL IN ITA NO.663/MDS/2011 ON THE FOLLOWING GROUNDS:- 1. THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE REOPENING OF THE ASSESSMENT WHEN THE ASSESSING OFFICER HAD ISSUED A NOTICE OF REOPENING UNDER SECTION 148 OF THE ACT ON THE COMPANY WHICH CEASED TO EXIST, ON THE DATE OF ISSUE OF THE NOTICE. CONSEQUENTLY THE CIT(A) HAS ERRED IN UPHOLDING THE ASSESSMENT OF THE INCOME OF THE AMALGAMATING COMPANY IN THE HANDS OF THE AMALGAMATED COMPANY IN A MANNER NOT PROVIDED UNDER LAW. ITA NOS.663& 559/MDS/2011 6 2. THE CIT(A) HAS ERRED IN UPHOLDING THE REOPENING OF THE ASSESSMENT, WHEN THERE IS NO FRESH MATERIAL TO PROVE THAT THE INCOME HAS ESCAPED ASSESSMENT AND THE REASONS STATED BY THE ASSESSING OFFICER WERE BASED ON MATERIAL WHICH ARE ALREADY AVAILABLE AND PART OF THE ASSESSMENT RECORDS OF THE APPELLANT. 3. THE CIT(A) HAS ERRED IN UPHOLDING THE REOPENING OF THE ASSESSMENT WHEN THE ASSESSING OFFICER HAS ERRED IN NOT STATING WHETHER A VALID SANCTION FOR I SSUE OF NOTICE UNDER SECTION 148 OF THE ACT HAS BEEN OBTAINED OR NOT. THE APPELLANT ALSO CHALLENGES THAT VALID APPROVALS HAVE NOT BEEN OBTAINED BEFORE REOPENING THE ASSESSMENT. 4. THE CIT(A) HAS ERRED IN HOLDING THE ORDER OF ASSESSMENT, WHEN THE REASON STATED FOR REOPENING OF THE ASSESSMENT HAS BEEN ALREADY SETTLED IN FAVOUR O F THE APPELLANT IN ITS OWN CASE IN ITA NOS. 332, 2084 & 2021/MDS/97 DATED 14.09.2004 FOR THE EARLIER ASSESSMENT YEARS 1993-94 & 1994-95. 5. THE CIT(A) HAS ERRED IN UPHOLDING THE ORDER OF T HE ASSESSMENT WHEN NO ADJUSTMENT HAS BEEN MADE ON ACCOUNT OF THE REASON STATED FOR REOPENING THE ASSESSMENT BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER. 6. THE CIT(A) HAS ERRED IN UPHOLDING THE VALIDITY O F THE PROCEEDINGS AND THE ORDER OF THE ASSESSING OFFICER WITHOUT CONSIDERING THAT THE ASSESSING OFFICER HAD TRAVELLED BEYOND THE SCOPE OF SECTION 147 BY MAKING ROVING ENQUIRIES AND DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 7. THE CIT(A) HAS ERRED IN UPHOLDING THE ORDER OF T HE ASSESSING OFFICER EXCLUDING 90% OF EXPORT BENEFITS COMPRISING OF ` 32.73 LAKHS BEING ADVANCE LICENSE BY INVOKING THE NEW PROVISIONS TO SECTION 80HHC(3)(1) OF THE ACT, WHICH WAS INTRODUCED BY TAXATION LAW (2 ND AMENDMENT BILL) 2005, WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 1998 WHICH WAS NOT A SUBJECT MATTER OF REOPENING THE ASSESSMENT. ITA NOS.663& 559/MDS/2011 7 8. THE CIT(A) HAD FAILED TO APPRECIATE WHILE UPHOLD ING THE ORDER OF THE ASSESSING OFFICER EXCLUDING 90% O F TOTAL EXPORT BENEFITS BY INVOKING THE AMENDED PROVI SO TO SECTION 80HHC(3)(1) OF THE ACT WHICH WAS INTRODUCED BY TAXATION LAW (2 ND AMENDMENT BILL) 2005 WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 1998 WHEN SUCH PROVISIONS DO NOT EXIST AT THE TIME OF FI LING THE ORIGINAL RETURN FOR THE SUBJECT ASSESSMENT YEAR 2000-01. 9. THE CIT(A) HAS FAILED TO APPRECIATE THAT ADVANCE LICENSE WOULD NOT BE COVERED UNDER THE NEW PROVISO TO SECTION 80HHC(3)(1) OF THE ACT, WHICH WAS INTRODUCED BY TAXATION LAW (2 ND AMENDMENT BILL) 2005, WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 1998. 10. THE CIT(A) HAS ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER EXCLUDING 90% OF EXPORT BENEFITS COMPRISING OF ` 66.55 LAKHS BEING PROFITS ON CAPTIVE CONSUMPTION OF DEPB LICENCE BY INVOKING THE NEW PROVISO TO SECTION 80HHC(3)(1) OF THE ACT, WHICH WA S INTRODUCED BY TAXATION LAW (2 ND AMENDMENT BILL) 2005, WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 1998 WHICH WAS NOT A SUBJECT MATTER OF REOPENING THE ASSESSMENT. 11. THE CIT(A) HAS FAILED TO APPRECIATE THAT CAPTIV E CONSUMPTION OF DEPB LICENCE DOES NOT RESULT IN ANY PROFIT ON SALE OR TRANSFER OF DEPB LICENCES AND THU S WOULD NOT BE COVERED UNDER THE NEW PROVISO TO SECTION 80HHC(3)(1) OF THE ACT WHICH WAS INTRODUCED BY TAXATION LAW (2 ND AMENDMENT BILL) 2005, WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 1998 WHICH WAS NOT A SUBJECT MATTER OF REOPENING THE ASSESSMENT. 12. THE CIT(A) HAS FAILED TO APPRECIATE THAT VALUE OF DEPB LICENCE ACCRUED ARE NOT PROFIT ON SALE OR TRANSFER OF DEPB LICENCES AND THUS WOULD NOT COVERED UNDER THE NEW PROVISO TO SECTION 80HHC(3)(1) OF THE ACT WHICH WAS INTRODUCED BY TAXATION LAW (2 ND AMENDMENT BILL) 2005, WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 1998. ITA NOS.663& 559/MDS/2011 8 13. THE CIT(A) HAS ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER EXCLUDING 90% OF ENTIRE SALE VALU E OF DEPB LICENCE SOLD DURING THE YEAR AS PROFIT ON S ALE OR TRANSFER OF DEPB LICENCES UNDER THE NEW PROVISO TO SECTION 80HHC(3)(1) OF THE ACT WHICH WAS INTRODUCED BY TAXATION LAW (2 ND AMENDMENT BILL) 2005, WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 1998. 6. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT NOTICE ISSUED UNDER SECTION 148 TO THE ASSESSEE IS NOT VALID. NOTICE BEING DEFECTIVE H AS VITIATED THE ENTIRE REOPENING PROCEEDINGS. HE SUBMITTED THAT NOTICE WAS ISSUED IN THE NAME OF AMALGAMATING COMPANY I.E. M/S.TI DIAMOND CHAIN LTD. SINCE THE SAID COMPANY HAS MERGE D WITH M/S.TUBE INVESTMENTS OF INDIA LTD. ON 1.4.2004, THE AMALGAMATING COMPANY CEASED TO EXIST FROM THE DATE OF THE EXIST. THE LEARNED A.R. FOR THE ASSESSE POINTED THA T THE DEPARTMENT HAD KNOWLEDGE OF AMALGAMATION OF THE COM PANY. IN SUPPORT OF HIS CONTENTION HE RELIED ON THE JUDGE MENTS OF THE HONBLE SUPREME COURT IN THE CASE OF MARSHALS & CO ., VS. ITO., REPORTED AS 223 ITR 809(SC) AND IN THE CASE O F SARASWATHY INDUSTRIAL SYNDICATE VS. CIT., REPORTED AS 186 ITR 278(SC). SINCE THE NOTICE ITSELF IS DEFECTIVE , THE ASSESSING OFFICER HAS NO JURISDICTION TO REOPEN THE ITA NOS.663& 559/MDS/2011 9 ASSESSMENT. IN SUPPORT OF THIS SUBMISSION, HE RELI ED UPON THE JUDGEMENT OF THE HONBLE KERALA HIGH COURT IN THE C ASE OF P.N.SASIKUMAR & ORS. VS. CIT REPORTED AS 170 ITR 80 , WHEREIN IT HAS BEEN HELD THAT ISSUE AND SERVICE OF NOTICE UNDER SECTION 148 IS A CONDITION PRECEDENT OR MATT ER OF JURISDICTION. NOTICE IS NOT ADDRESSED TO THE COMPET ENT PERSON, IT MEANS THERE WAS NO NOTICE TO THE PERSON WHO IS A SSESSED TO TAX. THE ENTIRE PROCEEDINGS ARE IN SUCH SITUATIO N VOID, ILLEGAL AND TOTALLY WITHOUT ANY JURISDICTION. THE LEARNED A.R. ALSO RELIED ON THE JUDGEMENT OF HONBLE ALLAHABAD H IGH COURT IN THE CASE OF NATH SURESH CHAND RAM NARESH VS. CI T., REPORTED AS 280 ITR 396 (ALL) TO SHOW THAT NOTICE S ERVED TO THE WRONG PERSON AND THE PROCEEDINGS ARISING OUT OF THE SENT NOTICE ARE NULL AND VOID. SIMILAR VIEW WAS TAKEN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. VIV ED MARKETING IN ITA NO.273 OF 2009 DECIDED ON 17.9.200 9, WHEREIN IT HAS BEEN HELD THAT IN CASE OF COMPANY WH ICH HAS BEEN DISSOLVED AND STRUCK OFF THE REGISTER OF THE R EGISTRAR OF COMPANIES UNDER THE PROVISIONS OF THE COMPANIES ACT , THERE COULD NOT HAVE BEEN ANY ASSESSMENT ORDER PASSED AGA INST ITA NOS.663& 559/MDS/2011 10 THE COMPANY WHICH WAS NOT IN EXISTENCE AS ON THAT D ATE IN THE EYES OF LAW IT HAD ALREADY BEEN DISSOLVED. 7. THE SECOND CONTENTION OF THE LEARNED AR IS THAT THE REASONS MENTIONED IN THE NOTICE UNDER SECTION 148 F OR REOPENING OF ASSESSMENT WERE LATER DROPPED. ONCE TH E GROUND ON WHICH THE ASSESSMENT WAS REOPENED HAS BEE N DROPPED, THE OTHER INCOMES CANNOT BE ASSESSED IN TH E REOPENING PROCEEDINGS. THE LEARNED A.R. FOR THE ASS ESSEE STATED THAT THE ISSUE ON WHICH THE ASSESSMENT HAS B EEN REOPENED HAS ALREADY BEEN SETTLED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN ITA NOS.332, 2084 & 2021/MDS/199 7 FOR THE ASSESSMENT YEARS 1993-94 AND 1994-95 VIDE ORDER DATED 14.09.2004. THE ASSESSE, AMALGAMATING COMPANY M/S. TI DIAMOND CHAIN LTD. HAD CHALLENGED THE ISSUE WITH RESPECT TO INCLUSION OF SERVICE CHARGES AND INSURANCE CLAIM AS PROFITS OF INCOME UNDER SECTION 80HHC OF THE ACT. THE APPEAL O F THE ASSESSEE ON THE ISSUE WAS ALLOWED BY THE TRIBUNAL V IDE ORDER DATED 14.9.2004. HE SUBMITTED THAT EXPLANATION 3 T O SECTION 147 CLEARLY POSTULATES THAT ONCE THE ISSUE IN NOTIC E HAS BEEN ITA NOS.663& 559/MDS/2011 11 DROPPED ANY OTHER INCOME CANNOT BE ASSESSED UNDER T HE REOPENED ASSESSMENT. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. JET AIRWAYS (I) LTD. REPORTED AS 331 ITR 23 6(BOM). THE LEARNED A.R. SUBMITTED THAT SINCE THE MAIN REAS ON STATED FOR REOPENING OF ASSESSMENT HAS BEEN SETTLED IN FA VOUR OF THE ASSESSEE BY THE TRIBUNAL VIDE ITS ORDER DATED 14.9. 2004, WHICH IS BINDING ON THE DEPARTMENT, THERE WAS NO R EASON FOR THE ASSESSING OFFICER TO RAISE THE SAME ISSUE AGAIN . IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE JUDGEM ENT OF THE LARGER BENCH OF THE APEX COURT (5 JUDGES) IN THE CA SE OF BHOPAL SUGAR INDUSTRIES LTD. VS. ITO REPORTED AS 40 ITR 618 (SC). THE LEARNED A.R. FOR THE ASSESSEE ALSO RELIE D ON THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN SUPPORT OF HIS CONTENTION THAT THE ISSUE RAISED BY THE ASSESSI NG AUTHORITY AS A GROUND FOR REOPENING THE ASSESSMENT HAS BECOME UNACCEPTABLE, THE OTHER ISSUES NOT MENTIONED IN THE NOTICE CANNOT BE LOOKED INTO. 8. ON THE OTHER HAND, THE LEARNED D.R. SUBMITTED TH AT THE ASSESSEE ACCEPTED THE NOTICE AND FILED THE RETURN I N RESPONSE ITA NOS.663& 559/MDS/2011 12 TO THE SAME. THE ASSESSEE PARTICIPATED IN THE ENTIR E PROCEEDINGS AND HAD NOT RAISED ANY OBJECTION ABOUT THE DEFECTIVE NOTICE BEFORE THE ASSESSING OFFICER AND C OOPERATED ALL ALONG TILL THE FINALIZATION OF THE ORDER. THE A SSESSEE HAD NOT TAKEN ANY OBJECTION ON THE VALIDITY OF THE NOTICE B EFORE THE ASSESSING OFFICER. IF THE ASSESSEE HAD TAKEN OBJECT ION OF THE VALIDITY OF THE NOTICE, THE ASSESSING OFFICER COULD HAVE ISSUED FRESH NOTICE UNDER SECTION 148 AS TIME LIMIT OF SIX YEARS WAS STILL AVAILABLE TO THE ASSESSING OFFICER UPTO 31.3. 2007. THEREFORE, THE ASSESSEE IS ESTOPPED BY HIS OWN ACT AND CONDUCT BY RAISING THE OBJECTION OF THE VALIDITY OF THE NOTICE ON THE GROUND THAT NOTICE WAS DEFECTIVE ON ACCOUNT OF MERGER OF M/S. T.I. DIAMONDS CHAIN LTD. WITH M/S. TUBE INVEST MENTS INDIA LTD.. HE SUBMITTED THAT IN VIEW OF THE PROVIS IONS OF SECTION 292B NOTICE CANNOT BE TREATED AS INVALID SI NCE THE NOTICE WAS IN SUBSTANCE AND EFFECT ACCORDING TO THE INTENT AND PURPOSE OF THE ACT AND WAS MEANT FOR THE ASSESSEE O NLY. HE STRONGLY SUPPORTED THE ORDER PASSED BY THE CIT(A) O N THIS ISSUE. ITA NOS.663& 559/MDS/2011 13 9. WE HAVE GONE THROUGH THE SUBMISSIONS MADE BY BO TH THE PARTIES. FIRST WE TAKE UP THE APPEAL OF THE ASS ESSE. THE FIRST GROUND RAISED BY THE ASSESSE IS REGARDING V ALIDITY OF REOPENING OF ASSESSMENT AND NOTICE ISSUED TO THE AS SESSEE. NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE IN THE NAME OF T.I. DIAMOND CHAIN LTD. ON 6.6.2006. AFTER MERGER OF TI DIAMOND CHAIN LTD. WITH M/S. TUBE INVESTMENTS OF INDIA LTD. WITH EFFECT FROM 1.4.2004, M/S. TI DIAMOND CHA IN LTD. LOST ITS IDENTITY AND CEASED TO BE JURISTIC PERSON. SINC E THE NOTICE WAS ISSUED IN THE WRONG NAME IT CANNOT BE SAID THAT NOTICE WAS VALID. THUS, SUBSEQUENT PROCEEDINGS ARISING THE REFROM ARE NULL AND VOID. ONCE IT HAS BEEN HELD THAT NOT ICE ITSELF IS BAD IN LAW, THE PROCEEDINGS ARISING THEREFROM ARE V ITIATED. LEARNED A.R. HAS RIGHTLY SOUGHT SUPPORT FROM THE JU DGEMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF P.N.SASIKUMAR & ORS.(SUPRA), WHERE IT HAS BEEN HELD THAT NOTICE SERVED IN THE NAME OF A WRONG PERSON IS NO N OTICE IN THE EYE OF LAW AND SUBSEQUENT PROCEEDINGS ARISING O UT OF THE SAID NOTICE ARE VOID, ILLEGAL AND TOTALLY WITHOUT J URISDICTION AND IT IS A CASE OF NO NOTICE TO THE ASSESSEE. THE CASE OF THE ITA NOS.663& 559/MDS/2011 14 ASSESSEE IS ALSO SQUARELY COVERED BY THE ORDER DAT ED 23 RD JULY, 2008 PASSED BY THE CO-ORDINATE BENCH OF THE T RIBUNAL IN THE CASE OF M/S. BENGAL TIGER LINE (INDIA) PVT. LTD ., IN ITA NO.2517/MDS/2006. WE THEREFORE ALLOW THIS GROUND OF THE ASSESSEE. 10. THE NEXT GROUND RAISED BY THE ASSESSEE IS WITH REGARD TO DROPPING OF THE GROUND MENTIONED IN THE NOTICE IN THE REOPENING PROCEEDINGS. AS PER THE CONTENTION OF T HE ASSESSEE THE ASSESSING OFFICER HAS FAILED TO GIVE VALID REASON FOR REOPENING OF THE ASSESSMENT AS THE SAME HAS BEEN SETTLED IN FAVOUR OF THE ASSESSEE IN ITS OWN C ASE BY THE TRIBUNAL IN ITA NOS. 332 & 2084/MDS/1997 RELEVANT TO THE ASSESSMENT YEARS 1993-94 AND 1994-95 (BY REVENUE) AND IN ITA NO.2021/MDS/1997 FOR THE ASSESSMENT YEAR 1994-9 5 (BY THE ASSESSE) VIDE ORDER DATED 14.09.2004. ADMITTE DLY, THE REVENUE HAS NOT FILED ANY APPEAL AGAINST THE SAID O RDER OF THE TRIBUNAL DATED 14.9.2004. THUS THE ABOVE ORDER OF THE TRIBUNAL HAS ATTAINED FINALITY. IN THE INSTANT CAS E, THE ISSUE OF NOTICE ISSUED UNDER SECTION 148 IS IDENTICAL TO THE ISSUE ALREADY SETTLED/ADJUDICATED BY THE TRIBUNAL IN THE EARLIER ITA NOS.663& 559/MDS/2011 15 ASSESSMENT YEARS MENTIONED IN THE ABOVE APPEALS. TH E CIT(A) HAS LOST SIGHT OF THE FACT THAT THE MATTER H AS ALREADY BEEN DECIDED BY THE TRIBUNAL AND OUGHT TO HAVE FOLL OWED THE DECISION OF THE TRIBUNAL. THEREFORE, THIS GROUND RA ISED BY THE ASSESSEE IS ALSO ALLOWED. 11. NOW WE TAKE UP THE APPEAL OF THE REVENUE. THE O NLY GROUND RAISED BY THE REVENUE IS DELETION OF INTERE ST UNDER SECTION 234D LEVIED BY THE ASSESSING OFFICER. THE LEARNED D.R. CONTENDED THAT THE CIT(A) HAS ERRED IN HOLDIN G THAT INTEREST UNDER SECTION 234D CAN BE LEVIED ONLY PROS PECTIVELY FROM THE ASSESSMENT YEAR 2004-05. HE ALSO CONTENDED THAT THE CIT(A) HAS FAILED TO NOTE THAT THE ASSESSMENT W AS COMPLETED BY THE ASSESSING OFFICER ON 24.12.2007 UN DER SECTION 147 READ WITH SECTION 143(3) AS REGULAR ASS ESSMENT AND HENCE LEVY OF INTEREST U/S.234D WAS ABSOLUTELY IN ACCORDANCE WITH LAW. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE JUDGEMENT OF HONBLE MADRAS HIGH COURT IN TH E CASE OF CIT VS. INFRASTRUCTURE DEVELOPMENT FINANCE CO.LTD., REPORTED AS 340 ITR 580(MAD). ITA NOS.663& 559/MDS/2011 16 12. THE LEARNED A.R., ON THE OTHER HAND, SUBMITTED THAT THE CIT(A) HAS RIGHTLY DELETED THE INTEREST LEVIED BY T HE ASSESSING OFFICER UNDER SECTION 234D AS IT CAME INTO OPERATI ON PROSPECTIVELY WITH EFFECT FROM 1.6.2003. 13. WE FIND THAT SECTION 234D WAS INSERTED BY THE F INANCE ACT, 2003 WITH EFFECT FROM 1.6.2003. THUS THE SAME WOULD BE APPLICABLE WITH EFFECT FROM THE ASSESSMENT YEAR 200 4-05. THEREFORE, THE LEARNED CIT(A) HAS RIGHTLY DELETED T HE INTEREST UNDER SECTION 234D IMPOSED BY THE ASSESSING OFFICER . NO INTERFERENCE IS CALLED FOR WITH THE ORDER OF THE CI T(A) ON THIS ISSUE. THEREFORE THE GROUND RAISED BY THE REVENUE I S DISMISSED. 14. TO SUM UP, THE APPEAL OF THE ASSESSEE IS ALLOWE D FOR THE REASONS MENTIONED EARLIER WHEREAS THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH APRIL, 2012. SD/- S D/- (DR. O.K. NARAYANAN) (VIKAS AWASTHY) VICE PRESIDENT JUDI CIAL MEMBER CHENNAI, DATED THE 17 TH APRIL, 2012. SOMU COPY TO: (1) APPELLANT (2) RESPONDENT ( 3) CIT (4) CIT(A) (5) D.R. (6) G.F .