THE ACIT 6(2), MUMBAI V. M/S. YOGESH R MEHTA, MUMBAI

ITA 5751/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7699 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 27-01-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 05-09-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M K MODI
• Keywords: Opportunity of being heard; Question of law; Tax effect; Reassessment proceedings
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI R.K. PAND A ,(AM) ITA NO.5751/MUM/2007 ASSESSMENT YEAR : 2001-02 ASSTT. COMMISSIONER OF INCOME TAX 6(2) AAYAKAR BHAVAN ROOM NO.563, 5 TH FLOOR M.K. ROAD MUMBAI-400 020. ..( APPELLANT ) VS. YOGESH R. MEHTA 11, NARENDRA ESTATE OPP. KAMGAR STADIUM SENAPATI BAPAT MARG, DADAR MUMBAI-400 028. ..( RESPONDENT ) P.A. NO. (AAGPM 6712 M) APPELLANT BY : SHRI MOHD. USMAN RESPONDENT BY : SHR I M.K. MODI O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER DATED 20.06.07 PASSED BY THE LD. CIT(A) FOR TH E ASSESSMENT YEAR 2001-02 TAKING FOLLOWING GROUND OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) ERRED IN HOLDING THAT INITIATION OF PROCEEDINGS U/S.147 IS BAD IN LAW ON THE GROUND THA T NO ASSESSMENT U/S.143(1) OR 143(3) WAS MADE BEFORE INITIATION OF PROCEEDINGS U/S.147 EVEN THOUGH CLAUS E(B) OF ITA NO.5751/M/07 A.Y: 01-02 2 EXPLANATION 2 BELOW SECTION 147 PROVIDES THAT PROCEEDINGS U/S.147 CAN BE TAKEN EVEN IF RETURN WAS FILED BUT NO ASSESSMENT WAS MADE BEFORE INITIATING PROCEEDINGS U/S.147. 2. THE REVENUE HAS ALSO TAKEN FOLLOWING REVISED GROUN DS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN HOLDING THAT INITIATION OF PROCEEDINGS U/S.147 IS BAD IN LAW ON THE GROUND THA T NO ASSESSMENT U/S.143(1) OR 143(3) WAS MADE BEFORE INITIATION OF PROCEEDINGS U/S.147 EVEN THOUGH CLAUS E(B) OF EXPLANATION 2 BELOW SECTION 147 PROVIDES THAT PROCEEDINGS U/S.147 CAN BE TAKEN EVEN IF RETURN WAS FILED BUT NO ASSESSMENT WAS MADE BEFORE INITIATING PROCEEDINGS U/S.147. 2. THE APPELLANT PRAYS THAT SINCE A SUBSTANTIAL QUESTION OF LAW IS INVOLVED, THE APPEAL MAY BE ENTERTAINED EVEN THOUGH THE TAX EFFECT INVOLVED IS LESS THAT 2 LAKHS, AS PROVIDED IN PARA-3 OF INSTRUCTION NO.5 OF 2007 DATED 16.07.2007. 3. . . 4. . . 3. AT THE TIME OF HEARING IT HAS BEEN AGREED BY BOTH THE PARTIES THAT THE GROUND NO.1 RAISED BY THE REVENUE IS COVERED IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE BY THE ORDER OF THE TRI BUNAL IN ASSESSEES BROTHERS CASE IN ACIT VS. MR. RAJESH R. MEHTA IN ITA NO.5752/M/07 FOR THE ASSESSMENT YEAR 2001-02 DATED 17. 6.2009. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO PLACED ON RECORD THE COPY OF THE SAID ORDER OF THE TRIBUNAL . ITA NO.5751/M/07 A.Y: 01-02 3 4. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THERE IS NO DISPUTE THAT THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THE CASE IN MR. RAJESH R. MEHTA DECIDED BY THE TRIBUNAL SUPRA, WHEREIN THE TRIBUNAL ON THE ISSUE THAT THE CIT(A) WA S NOT JUSTIFIED IN HOLDING THAT INITIATION OF RE-ASSESSMENT PROCEEDINGS U/S .147 OF THE INCOME TAX ACT, 1961(THE ACT) WAS BAD IN LAW, HELD THAT IN VIEW OF THE RATIO OF DECISION OF HONBLE SUPREME COURT IN THE CASE OF RAJESH JHAVERI STOCK BROKERS PVT. LTD. (291 ITR 500), THE OR DER OF THE LD. CIT(A) QUASHING THE ASSESSMENT MADE U/S.147/143(3) CANNOT BE UPHELD AND, HENCE, THE TRIBUNAL WHILE SETTING ASIDE T HE ORDER OF THE LD. CIT(A) ALLOWED THE REVENUES APPEAL. IN THE ABSENCE O F ANY DISTINGUISHING FEATURE BROUGHT ON RECORD BY THE PARTIE S WE RESPECTFULLY FOLLOWING THE ABOVE DECISION SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) ON THIS ACCOUNT AND ALLOW THE GROUNDS RAISED BY T HE REVENUE. 5. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE ASSE SSEE SUBMITS THAT THE ASSESSEE IN HIS WRITTEN SUBMISSION DATED 17.3.200 7 FILED BEFORE THE LD. CIT(A) HAS ALSO TAKEN ALTERNATIVE GROU ND CHALLENGING THE VALIDITY OF THE REASSESSMENT PROCEEDINGS WHICH READS AS UN DER :- THE REASSESSMENT PROCEEDINGS ARE ALSO BAD IN LAW FOR YET ANOTHER REASON. THE ASSESSING OFFICER HAVI NG STATED IN HIS LETTER DTD.22/2/06 THAT THE PROVISION OF SECTION 2(22)(E) IS APPLICABLE IN ASSESSEES CASE A ND ITA NO.5751/M/07 A.Y: 01-02 4 THEREFORE THE ASSESSMENT IS REOPENED, COULD NOT HAV E TAKEN UP TWO OTHER ITEMS NAMELY DISALLOWANCE OF INT EREST AND ADDITION FOR LOW WITHDRAWALS, FOR CONSIDERING I N REASSESSMENT. THUS ON THIS GROUND ALSO THE REASSESS MENT IS NOT VALID. HE FURTHER SUBMITS THAT THE LD. CIT(A) HAS NOT ADJUDICA TED ON THIS GROUND. HE FURTHER SUBMITS THAT BEFORE THE LD. CIT( A) THE ASSESSEE HAS ALSO TAKEN GROUND NO.2, 3 AND 4 WHICH HAVE ALSO BEE N REPRODUCED BY THE LD. CIT(A) IN PARA-2 APPEARING AT PAGE-2 OF HIS IMPUGNED ORDER. HOWEVER, THE LD. CIT(A) VIDE PARA-7 OF HIS ORDER HAS HELD THAT SINCE THE ASSESSMENT IS BEING CANCELLED NO COMMENTS ARE NECESSARY IN RESPECT OF GROUND NO.2, 3 AND 4. SINCE THE LD. CIT(A ) HAS NOT DECIDED THE ABOVE GROUNDS, THEREFORE, THE MATTER MAY BE SENT BACK TO THE FILE OF THE LD. CIT(A) TO DECIDE THE SAME AFR ESH. 6. ON THE OTHER HAND THE LD. DR SUBMITS THAT SINCE THE ASSESSEE HAS NOT FILED ANY CROSS OBJECTION AS PROVIDED UNDER THE INCOME TAX RULES THE ASSESSEE IS NOT ENTITLED TO RAISE SUCH PLEA AND HE NCE THE SAME IS LIABLE TO BE REJECTED. 7. AFTER HEARING THE RIVAL SUBMISSIONS OF BOTH THE PAR TIES AND PERUSING THE MATERIAL AVAILABLE ON RECORD WE FIND MER IT IN THE PLEA OF THE LD. D.R. THAT IN THE ABSENCE OF ANY CROSS OBJECTIONS O R CROSS APPEAL, THE ASSESSEE, AT THIS STAGE, CANNOT CHALLENGE TH E VALIDITY OF REOPENING OF THE ASSESSMENT ON THE AFORESAID ALTERNATIVE GROUND. ITA NO.5751/M/07 A.Y: 01-02 5 FURTHER, IN VIEW OF OUR FINDING RECORDED IN PARA-4 O F THIS ORDER, THE PLEA TAKEN BY THE ASSESSEE IS DEVOID OF ANY MERITS, HENCE , THE SAME IS, THEREFORE, REJECTED. 8. AS REGARDS THE OTHER PLEA TAKEN BY THE ASSESSEE THAT T HE ASSESSEES GROUND NO.2, 3 AND 4 HAVE NOT BEEN DECIDED BY THE LD. CIT(A) WE FIND THAT THERE IS NO DISPUTE THAT THE ASSESSEE HAS RAISED THE ABOVE GROUND NO.2,3, AND 4 WHICH HAVE NOT BEEN D ECIDED BY THE LD. CIT(A) ON THE GROUND THAT SINCE THE ASSESSMENT IS BEIN G CANCELLED, NO COMMENTS ARE NECESSARY IN RESPECT OF GROUND NO.2, 3 AND 4 . UNDER THE PROVISIONS OF SECTION 250(6) THE ORDER OF TH E LD. CIT(A) DISPOSING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POINTS FOR DETERMINATION, THE DECISION THEREON AND THE REASON FOR THE DECISION. IN THE CASE BEFORE US, ADMITTEDLY, THE LD. CIT(A) HAS NOT DECIDED GROUND NO.2, 3 AND 4, THEREFORE, THE ORDER PASSED BY THE LD. CIT(A) IS NOT IN ACCORDANCE WITH THE AFORESAID PROVISION OF THE ACT. THIS BEING SO, AND IN THE INTEREST OF JUSTICE WE CONSIDER IT FAIR AN D REASONABLE THAT THE MATTER SHOULD GO BACK TO THE FILE OF THE LD. CIT( A) AND ACCORDINGLY WE RESTORE THE MATTER RELATING TO GROUND NO.2,3, AND 4 TAKEN BY THE ASSESSEE BEFORE THE LD. CIT(A) TO THE FILE OF THE LD. C IT(A) WHO SHALL DECIDE THE SAME AFRESH AND ACCORDING TO LAW AFTER PROVID ING ITA NO.5751/M/07 A.Y: 01-02 6 REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE PLEA TAKEN BY THE ASSESSEE IS, THEREFORE, PARTLY ALLOWED. 9. IN THE RESULT REVENUES APPEAL STANDS PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 12.2.2010. SD/- SD/- ( R.K. PANDA ) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 12.2.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 27.1.10 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 28.1.10 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 12.2.10 SR.PS/PS 7. FILE SENT TO THE BENCH CLERK 15.2.10 SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER