THE DCIT RG 3(3), MUMBAI V. M/S. STANDARD INDUSTRIES LTD, MUMBAI

ITA 5736/MUM/2008

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 54850 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 03-08-2011
• Assessment Year: 1998-1999
• Appeal Filed On: 11-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G P TRIVEDI
• Assessee Lawyers: K K VED; H P SUTAR
• Keywords: Assessment record
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SMT.ASHA VIJAYARAGHAVAN, JM ITA NO.6026/MUM/2008 : ASST.YEAR 1998-99 M/S.STANDARD INDUSTRIES LIMITED VIJAYLAXMI MAFATLAL CENTRE, 2 ND FLOOR 57-A DR.G.DESHMUKH MARG MUMBAI 400 026. PAN : AABCS8888C VS. THE INCOME TAX OFFICER WARD 3(3)(3) MUMBAI. (APPELLANT) (RESPONDENT) ITA NO.5736/MUM/2008 : ASST.YEAR 1998-99 THE DY.COMMISSIONER OF INCOME-TAX CIRCLE 3(3) MUMBAI. VS. M/S.STANDARD INDUSTRIES LIMITED VIJAYLAXMI MAFATLAL CENTRE, 2 ND FLOOR 57-A DR.G.DESHMUKH MARG MUMBAI 400 026. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI G.P.TRIVEDI ASSESSEE BY : S/SHRI K.K.VED & H.P.SUTAR DATE OF HEARING : 03.08.2011 DATE OF PRONOUNCEMENT :10.08.2011 O R D E R PER R.S.SYAL, AM : THESE TWO CROSS APPEALS ONE BY THE A SSESSEE AND THE OTHER BY THE REVENUE ARISE OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 30.04.2008 IN RELATION TO TH E ASSESSMENT YEAR 1998-99. 2. FIRST GROUND OF THE ASSESSEES APPEAL IS AGAINST UPHOLDING OF REASSESSMENT. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S.143(3) ON 16.03.2001 BY DETERM INING INCOME U/S.115JA OF THE ACT AT RS.10,82,408. THEREAFTER THE ASSESSMEN T WAS REOPENED BY WAY OF NOTICE U/S.148. ITA NO.6026 & 5736/MUM/2008 M/S.STANDARD INDUSTRIES LIMITED. 2 EVENTUALLY THE REASSESSMENT WAS COMPLETE D BY DETERMINING TOTAL INCOME U/S.115JA AT RS.61,96,300. THE ASSESSEE ARGUED BE FORE THE LEARNED CI T(A) THROUGH GROUND NO.1 THAT REASONS FOR REOPENING WERE NOT FU RNISHED BY THE ASSESSING OFFICER DESPITE A SPECIFIC REQUEST MADE IN THIS REGARD. CERTAIN OTHER LEGAL OBJECTIONS WERE ALSO RAISED ON THE QUESTION OF MAKING REA SSESSMENT U/S.147. THE LEARNED CIT(A) REJECTED THE ASSESSEES CONTENTION ON RE ASSESSMENT HOWEVER WI THOUT DEALING WITH THE ISSUE OF NON-FURNISHING OF REASONS FOR REOPENING OF THE ASSESSMENT. THE ASSESSEE HAS NOW COME UP IN APPEAL BEFORE US ALLEGING THAT THE ASSESSING OFFICER FAILED TO SUPPLY THE COPY OF REASONS DESPITE MAKING SEVERA L REQUESTS IN THIS REGARD. THE CASE WAS TAKEN UP FOR HEARING BY THE TR IBUNAL ON SEVERAL OCCASIONS IN 2009. ORDER SHEET ENTRY DATED 26.07.2010 INDICATES THAT THE DEPARTMENT WAS DIRECTED TO PRODUCE THE ASSESSMENT RECORD S. THE CASE WAS FIXED FOR HEARING ON 13.10.2010. ON THAT DATE THE DEPARTMENT SOUGHT ADJOUR NMENT. AGAIN ON 24.03.2011 THE LEARNED DEPARTMENTAL REPRESENTATIVE MADE ORAL RE QUEST FOR ADJOURNMENT ON THE GROUND THAT HE WAS UNABLE TO GET THE RECO RDS. THE CASE WAS ADJOURNED TO 25.05.2011. ON THAT DATE THE BENCH RECORDED IN THE ORDER SHEE T THAT DESPITE SEVERA L DIRECTIONS GIVEN ON EARLIER OCCASIONS THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS FAILED TO PRODUCE THE COPY OF REASONS RECORDED BY THE A.O. ONE MORE OPPORTU NITY WAS GRANTED AT THE REQUEST OF THE LEARNED DEPARTMENTAL REPRESEN TATIVE AS THE LAST OPPORTUNITY. IT IS FURTHER BORNE OUT FROM THE ORDER SHEET ENTR Y WHICH SPECIFICALLY MENTIONS THAT IF THE DEPARTMENT FAILS TO PR ODUCE THE REASONS ON 18 TH JULY, 2011 THE BENCH WILL BE FREE TO TAKE AN ADVERSE VIEW IN THE MATTER. AGAIN ON 18 TH JULY, 2011 THE LEARNED DEPARTMENTAL REPRESENTATIVE S OUGHT ADJOURNMENT WITH A REQUE ST THAT ONE MORE LAST OPPORTUNITY BE GRANTED TO THE DEPARTMENT FOR PRODUCING COPY OF REASONS RECORDED. THE CASE WAS ADJOURNED TO 3 RD AUGUST, 2011. DURING THE COURSE OF HEARING THE LEARNED DEP ARTMENTAL REPRESENTATIVE STATED THAT HE HAS SUMMONED THE ASSESSM ENT RECORD FROM THE A SSESSING OFFICER BUT THE REASONS RECORDED FOR REASSESSMENT ARE NOT THERE. DESPITE THAT THE LEARNED ITA NO.6026 & 5736/MUM/2008 M/S.STANDARD INDUSTRIES LIMITED. 3 DEPARTMENTAL REPRESENTATIVE REQUESTED THAT THE CASE MAY BE TAKEN UP FOR HEARING ON MERITS AS THERE WERE VALID REASONS FO R MAKING THE REASSESSMENT WHICH CAME OUT FROM THE ASSESSMENT ORDER ITS ELF. HE INVITED OUR ATTENT ION TOWARDS ONE LETTER IN WHICH THERE IS REFERENCE TO TWO OTHER LE TTERS WRITTEN BY THE AS SESSEE TO THE A.O. ABOUT THE REASONS FOR REASSESSMENT. THE LE ARNED A.R. PLACED ON RECORD THE COPIES OF SUCH TWO LETTERS ADDRESS ED TO THE ASSESSING OFFICER, WHICH DEMONSTRATE THAT IN SUCH LETTERS ALSO THE ASSESSEE DEMAND ED THE REASONS FOR REASSESSMENT. THIS DISCUSSION SHOWS THAT THE REASSESSMENT WAS TAKEN UP BY THE AO WITHOUT RECORDING ANY REASONS FOR REASS ESSMENT. IT IS OBVIOUS BECAUSE NO REASONS ARE AVAILABLE IN THE FILE OF THE DEPARTMENT. IF THAT IS THE POSITION, THEN THE REASSESSMENT COULD NOT HAVE BEEN PROCEEDED WITH IN THE ABSENCE OF THE FOUNDATION, BEING THE ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER ON TH E QUESTION OF ESCAPEMENT OF INCOME DEPICTED FROM THE REASONS FOR REASSES SMENT. SUB-SECTION (2) OF SECTION 148 PROVIDES THAT THE ASSESSING OFFICER SHALL, BEFORE ISSUING ANY NOTICE UNDER THIS SECTION, RECORD HIS REASONS FOR DOING SO. IT IS ONLY THEREAFTER THAT THE PROVISIONS OF SUB-SECTION (1) OF SECTION 148 ISSUING NO TICE FOR REASSESSMENT GET ACTIVATED. THE NATURAL COROLLARY IS THAT IF THE ASSESSING OF FICER HAS NOT RECORDED HIS REASONS BEFORE ISSUING ANY NOTICE U/S.148, HE CANNOT ASSUME THE JURISD ICTION TO ISSUE NOTICE FOR TAXING THE ESCAPED INCOME. AS THE LEARNED DEPARTMENTA L REPRESENTATIVE IN THE INSTANT CASE HAS FAIRLY C ONCEDED, ON THE APPRECIATION OF THE ASSESSMENT RECORDS AVAILABLE WITH HIM, THAT SUCH REASONS AR E NOT AVAILABLE IN TH E FILE, OBVIOUSLY THE ASSESSMENT U/S.147 CANNOT BE ALLOWED TO STAND. WE, THEREFORE, QUASH THE PROCEEDINGS FLOWING OUT OF SUCH INVALI D JURISDICTION ASSUMED BY THE ASSESSING OFFICER. THE RESULTANT ASSESSM ENT ORDER IS SET ASIDE. 3. IN VIEW OF OUR DECISION ON THE FIRST GROUND OF THE ASSESSEES APPEAL, NOTHING SURVIVES FOR DECIDING TH E OTHER GROUNDS ON MERITS. ITA NO.6026 & 5736/MUM/2008 M/S.STANDARD INDUSTRIES LIMITED. 4 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED AND THAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN TH E OPEN COURT ON THIS 10 TH DAY OF AUGUST, 2011. SD/- SD/- (ASHA VIJAYARAGHAVAN) (R.S.SYAL) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI : 10 TH AUGUST, 2011. DEVDAS*` COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXXII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.