SHRI. ASHWIN MANUEL FERNANDES, KALYAN V. I.T.O.WD.3(2),KALYAN, KALYAN

ITA 5732/MUM/2010

• Counselvise Citation: 573219914 RSA 2010
• Duration Of Justice: 1 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2000-2001
• Appeal Filed On: 14-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K B MENON
• Assessee Lawyers: DR K SHIVRAM
• Keywords: Reopening of assessment; Reassessment proceedings
• Section: 69C; 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER & SHRI R.S.PADVEKAR, JUDICIAL MEMBER. I.T.A. NO. 573 2/MUM/2010. ASSES SMENT YEAR : 2000-01. SHRI ASHWIN MANUEL FERNANDES, THE INCOME-TAX OFFICER, VIOLET HOUSE, SYNDICATE, VS. WARD-3(2), KALYAN. MURBAD ROAD, KALYAN (W)-421 301. PAN AAEPE 2610H. APPELLANT. RESPONDENT. APPELLANT BY : DR. K. SHIVRAM. RESPONDENT BY : SHRI P.K.B. MENON. DATE OF HEARING : 20-12-2011. DATE OF PRONOUNCEMENT :13-1-2012 O R D E R. PER P.M. JAGTAP, A.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LEARNED CIT(APPEALS)-1, THANE DATED 30-04-2010. 2. THE RELEVANT FACTS OF THE CASE GIVING RISE TO TH IS APPEAL ARE AS FOLLOWS: THE ASSESSEE IS AN INDIVIDUAL WHO FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 13-07-2000 DECLARING TOTAL I NCOME OF RS.10,967/-. A NOTICE U/S 148 IN THIS CASE WAS ISSUED BY THE AO ON 29-03- 2007 WHICH WAS SERVED ON THE ASSESSEE ON 30-03-2007. IN REPLY TO THE SAID NOTICE , A LETTER DATED 11-07-2007 WAS FILED BY THE ASSESSEE STATING THEREIN THAT THE RETU RN FILED ORIGINALLY ON 13-07-2000 2 ITA NO.5732/MUM/2010 ASSESSMENT YEAR:2000-01. MAY KINDLY BE TREATED AS RETURN FILED IN RESPONSE T O NOTICE U/S 148. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSEE AS KED FOR THE COPY OF REASONS RECORDED BY THE AO FOR ISSUING NOTICE U/S 148. AS M ENTIONED BY THE AO IN THE ASSESSMENT ORDER, THE REASONS RECORDED BY HIM ON TH E ORDER-SHEET WERE SHOWN TO THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE. HE, THEREFORE, HELD THAT THERE WAS NO NEED TO COMMUNICATE THE SAID REASONS AGAIN SEPARATE LY TO THE ASSESSEE IN WRITING AND PROCEEDED TO COMPLETE THE ASSESSMENT U/S 143(3) READ WITH SECTION 147 MAKING AN ADDITION ON ACCOUNT OF PAYMENT OF RS.14 LAKHS AL LEGEDLY MAKE BY THE ASSESSEE FOR SECURING ADMISSION FOR HIS SON TO BDS COURSE IN RAMRAO ADIK EDUCATION SOCIETY TREATING THE SAME AS UNEXPLAINED EXPENDITUR E OF THE ASSESSEE U/S 69C. 3. AGAINST THE ORDER PASSED BY THE AO U/S 143(3) RE AD WITH SECTION 147, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LEA RNED CIT(APPEALS). IN THE SAID APPEAL, BESIDES DISPUTING THE ADDITION OF RS.14 LAK HS MADE BY THE AO U/S 69C, THE ASSESSEE ALSO CHALLENGED THE VALIDITY OF REASSESSME NT MADE BY THE AO ON THE GROUND THAT REASONS RECORDED FOR REOPENING OF THE A SSESSMENT WERE NOT SUPPLIED TO HIM. ACCORDING TO THE LEARNED CIT(APPEALS), THE ORD ER-SHEET ENTRY RECORDING THE REASONS HAVING BEEN SHOWN BY THE AO TO THE AUTHORI ZED REPRESENTATIVE OF THE ASSESSEE, THE REASONS FOR REOPENING STOOD DULY COMM UNICATED TO THE ASSESSEE. HE, THEREFORE, DID NOT FIND MERIT IN THE CONTENTION RA ISED BY THE ASSESSEE ON THIS ISSUE AND REJECTED THE SAME. HE ALSO CONFIRMED THE ADDITI ON OF RS.14 LAKHS MADE BY THE AO U/S 69C ON THE GROUND THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO EXPLAIN SATISFACTORILY THE SOURCE OF RS.14 LAKHS PA ID TO RAMRAO ADIK EDUCATION SOCIETY FOR ADMISSION OF HIS SON TO BDS COURSE. AGG RIEVED BY THE ORDER OF THE LEARNED CIT(APPEALS), THE ASSESSEE HAS PREFERRED TH IS APPEAL BEFORE THE TRIBUNAL. 3 ITA NO.5732/MUM/2010 ASSESSMENT YEAR:2000-01. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IN GROUND NO.1 OF THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE VALIDITY OF REOPENING OF ASSESSMENT BY THE AO ON TH E GROUND THAT THE REASONS RECORDED BY THE AO FOR REOPENING THE ASSESSMENT WER E NOT SUPPLIED TO HIM. ALTHOUGH THE SAID REASONS AS RECORDED ON THE ORDER- SHEET WERE STATED TO BE SHOWN BY THE AO TO THE AUTHORIZED REPRESENTATIVE OF THE A SSESSEE, THE FACT REMAINS THAT THE SAME WERE NOT SUPPLIED TO THE ASSESSEE INSPITE OF A SPECIFIC REQUEST MADE IN THIS REGARD. IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. ITO 259 ITR 19, HONBLE SUPREME COURT HAS HELD THAT THE AO IS BOUND TO FURN ISH REASONS RECORDED FOR REOPENING THE ASSESSMENT WITHIN A REASONABLE TIME WHEN THE SAME ARE SOUGHT BY THE ASSESSEE. IT WAS HELD THAT ON RECEIPT OF REASON S, THE ASSESSEE WOULD BE ENTITLED TO FILE OBJECTIONS TO THE ISSUANCE OF NOTICE AND TH E AO IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. THE AO ACCORDINGL Y WAS DIRECTED BY THE HONBLE SUPREME COURT TO SUPPLY THE REASONS TO THE ASSESSEE AND DISPOSE OF THE OBJECTIONS, IF ANY, FILED BY THE ASSESSEE BY PASSIN G A SPEAKING ORDER BEFORE PROCEEDING WITH THE ASSESSMENT. FOLLOWING THE SAID DECISION OF HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESNAFTS (INDIA) LTD. ( SUPRA), HONBLE CALCUTTA HIGH COURT IN THE CASE OF SAHARA INDIA COMMERCIAL CORPOR ATION LTD. VS. DCIT 284 ITR 295 SET ASIDE THE REASSESSMENT MADE BY THE AO AND D IRECTED THE AO TO PROCEED WITH THE MATTER ONLY AFTER PASSING A SPEAKING ORDER AFTER CONSIDERING THE OBJECTIONS OF THE ASSESSEE. KEEPING IN VIEW THE LEGAL POSITION EMANATING FROM THESE JUDICIAL PRONOUNCEMENTS AND TAKING INTO CONSIDERATION THE FA CTS OF THE CASE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND RESTORE THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO PROCEED FURTHER WITH THE MATTER ONLY AFTER SUPPLYING THE REASONS RECORDED FOR REOPENING THE ASSESSMENT TO THE ASSESS EE AND AFTER CONSIDERING THE OBJECTIONS, IF ANY, RAISED BY THE ASSESSEE CHALLENG ING THE VALIDITY OF REOPENING. 4 ITA NO.5732/MUM/2010 ASSESSMENT YEAR:2000-01. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 13 TH DAY OF JANUARY, 2012. SD/- SD/- (R.S.PADVEKAR) (P.M. JAGTAP) JUDICIAL MEMBER A CCOUNTANT MEMBER MUMBAI, DATED: 13 TH JANUARY, 2012. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, A-BENCH. (TRUE COPY ) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI BENCHES , MUMBAI. WAKODE