MULLER & PHILPPS (INDIA) LTD, MUMBAI V. ITO 2(2)(2), MUMBAI

ITA 5926/MUM/2009

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2811 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 21-05-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 06-11-2009
• Court: TRIBUNAL
• Assessee Lawyers: DR K SHIVARAM; NILAM JADHAV
• Keywords: Reopening of assessment; Difference of opinion; Assessment record; Change of opinion; Reassessment proceedings
• Section: 143(3); 148

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.5926/MUM/2009 ASSESSMENT YEAR: 2001-02 MUL LER & PHILPPS (INDIA) LTD. 221, UNIQUE INDL. ESTATE OFF VEER SAVARKAR MARG PRABHADEVI MUMBAI-400025. / VS. ITO 2 ( 2 ) (2) 5 TH FLOOR, AAYAKAR BHAVAN, MUMBAI- ( ASSESSEE ) ( REVENUE ) P.A. NO. AAACM324N / ASSESSEE BY DR. K. SHIVAR AM & MISS NILAM JADHAV (AR) / REVENUE BY SHRI VA CHASPATI TRIPATHI (DR) / DATE OF HEARING : 13/10/2015 / DATE OF ORDER: 28/10/2015 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-I I, MUMBAI {(IN SHORT LD. CIT(A)} DATED 24.08.2009 FOR THE ASS ESSMENT YEAR 2001-02, DECIDED AGAINST THE ASSESSMENT ORDER PASSE D BY THE ASSESSING OFFICER (IN SHORT AO) U/S 143(3) R.W.S. 147 OF THE MULLER & PHILPPS LTD. 2 ACT. THE ASSESSEE HAS FILED REVISED GROUNDS OF APPE AL WHICH ARE REPRODUCED HEREUNDER: I. RE-OPENING IS BAD IN LAW: 1. THE NOTICE U/S.148 DATED 17.02.2006 IS ISSUED MEREL Y ON CHANGE OF OPINION. 2. THE COPY OF REASONS RECORDED FOR REOPENING OF ASSESSMENT WAS NOT PROVIDED DURING THE COURSE OF AS ST. PROCEEDING IN SPITE OF SPECIFIC REQUEST MADE BY THE ASSESSEE, THEREFORE, THE OPPORTUNITY TO RAISE OBJEC TION AGAINST THE REOPENING NOT PROVIDED. THE DATE OF RECORDING THE REASON IS ALSO NOT KNOWN. THE RECORDI NG OF REASON SHOULD BE PRIOR TO THE DATE ISSUE OF NOTICE U/S.148. II. ON MERITS: 3. THE LD. CIT(A) ERRED IN UPHOLDING THE ORDER OF ASSE SSING OFFICER TREATING THE RECEIPT OF RS.6 CRORES ON ACCO UNT OF TRANSFER OF TRADE MARK UTICORA AS SALE OF BUSINE SS AND TAXING THE SAME AS CAPITAL GAIN. 4. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE TR ANSFER OF TRADE MARK WAS BEFORE 31.03.2001 I.E. PRIOR TO T HE AMENDMENT IN SEC. 55(2) OF THE ACT AND THAT THE SAI D RECEIPT IS EXEMPT FROM TAX. 2 . THE ARGUMENTS HAVE BEEN MADE BY DR. K. SHIVARAM & MISS NEELAM JADHAV, AUTHORIZED REPRESENTATIVE (IN S HORT AR), ON BEHALF OF THE ASSESSEE AND SHRI VACHASPAT I TRIPATHI DEPARTMENTAL REPRESENTATIVE (IN SHORT DR), ON BEH ALF OF THE REVENUE. MULLER & PHILPPS LTD. 3 3. GROUND NO. I (2): IN THIS GROUND, LD. COUNSEL HAS CHALLENGED THE REOPENING OF THE ASSESSMENT AND FRAM ING OF THE IMPUGNED REASSESSMENT ORDER, FIRSTLY ON THE GROUND THAT REASONS HAVE NOT BEEN RECORDED, MUCH LESS IN ACCORD ANCE WITH LAW AND CERTIFIED COPY OF THE SAME HAS NOT BEEN PRO VIDED TO THE ASSESSEE, DURING THE COURSE OF REASSESSMENT PRO CEEDINGS, DESPITE THE SPECIFIC AND REPEATED REQUESTS MADE BY THE ASSESSEE TO THE AO, DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 3.1. DURING THE COURSE OF HEARING BEFORE US, A COPY OF SYNOPSIS HAS BEEN FILED BY THE LD. COUNSEL, WHEREIN, VARIOUS PAGES OF THE PAPER BOOK FILED BY THE ASSESSEE AND PAPER BOOK FILED BY THE DEPARTMENT HAVE BEEN REFERRED TO. WITH THE HELP OF THESE PAPER BOOKS, IT HAS BEEN ARGUED BY LD. COUNSEL THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE H AS BEEN MAKING REQUEST TO THE AO, TO PROVIDE THE COPY OF RE ASONS, BUT SAME WAS NOT PROVIDED TO THE ASSESSEE. IT WAS FURTH ER SUBMITTED THAT ON THE EARLIER OCCASIONS, HONBLE BE NCH DIRECTED THE LD. DR TO PRODUCE THE ASSESSMENT RECOR DS, SAME WAS PRODUCED, AND ON THE BASIS OF PERUSAL OF ASSESS MENT RECORDS, IT WAS FOUND BY THE HONBLE BENCH THAT THE RE WAS NO COPY OF REASONS, IN THE ASSESSMENT RECORDS. ACCO RDINGLY, AN INTERIM ORDER WAS PASSED BY THE HONBLE BENCH, DIRE CTING THE REVENUE TO FILE A SUITABLE AFFIDAVIT IN SUPPORT OF ITS CLAIM, IF SO DESIRED. THEREAFTER, IN PURSUANCE TO THE DIRECTIONS OF THE HONBLE BENCH, AN AFFIDAVIT WAS FILED BY THE AO ON BEHALF OF THE REVENUE, ALONG WITH FEW OTHER DOCUMENTS, AS PAR T OF MULLER & PHILPPS LTD. 4 DEPARTMENTAL PAPER BOOK, WHEREIN CERTAIN FACTS WERE DEPOSED ON OATH. IN RESPONSE TO THE SAME, SUBSEQUENTLY, A C OUNTER AFFIDAVIT WAS FILED BY THE ASSESSEE, POINTING OUT V ARIOUS CONTRADICTIONS, FALLACIES AND INCONSISTENCIES IN TH E AFFIDAVIT OF THE AO AS WELL AS OTHER RECORDS PLACED ON RECORD BY THE DEPARTMENT, BEFORE THE HONBLE BENCH. IT WAS ARGUED BY THE LD. COUNSEL THAT AFTER LONG DRAWN EXERCISE AND EXCH ANGE OF AFFIDAVIT, COUNTER AFFIDAVIT AND OTHER DOCUMENTS, N OW THE FINAL FACTS HAVE EMERGED ON THE SURFACE. NOW, THE ADMITTE D CASE OF THE DEPARTMENT IS THAT REASONS ARE NOT AVAILABLE IN THE ASSESSMENT RECORDS AND THAT NO COPY OF REASONS WAS FURNISHED TO THE ASSESSEE DURING THE COURSE OF IMPU GNED REASSESSMENT PROCEEDINGS. IT WAS ARGUED BY THE LD. COUNSEL THAT IN VIEW OF THESE FACTS AND CIRCUMSTANCES, POSI TION OF LAW IS NOW WELL SETTLED ON THE BASIS OF VARIOUS JUDGMEN TS WHEREIN IT HAS BEEN HELD THAT WITHOUT RECORDING THE REASONS PRIOR TO THE ISSUANCE OF NOTICE U/S 148 AND WITHOUT PROVIDIN G A COPY OF THE SAME TO THE ASSESSEE, THE AO CANNOT MAKE VALID REOPENING OF THE ASSESSMENT AND CANNOT FRAME REASSESSMENT ORD ER. RELIANCE HAS BEEN PLACED IN THIS REGARD ON THE JUDG MENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. VIDESH SANCHAR NIGAM LTD. (2012) 340 ITR 66 (BOM.), TATA INTERNATIONAL LTD . VS . DCIT [2012] 52 SOT 465 (MUM)., SYNOPSYS INTERNATIONAL VS. DDIT ITA NO.549/BANG/201 1 DT. 10.12.2012 (BANG.)(TRIB.), CIT VS. RAJINDRA ROSHIN & TURPENTINE INDUSTRIES (2008) 305 ITR 161 (P&H) (162 ) AND RAJOO ENGG. VS DY. CIT (2008) 218 CTR 53(GUJ). IT W AS THUS ARGUED THAT THE REOPENING IS WITHOUT MANDATE OF LAW AND MULLER & PHILPPS LTD. 5 RESULTANT REASSESSMENT ORDER IS NULL AND VOID AND S HOULD BE HELD AS SUCH. 3.2 ON THE OTHER HAND, LD. DR HAS PLACED RELIANCE ON T HE AFFIDAVIT FILED BY THE DEPARTMENT. IT HAS BEEN SUBM ITTED BY THE LD. DR THAT ADMITTEDLY NO REASONS ARE AVAILABLE I N THE ASSESSMENT RECORD, BUT COPY OF SAME IS AVAILABLE IN THE COMPUTER. IT HAS BEEN FURTHER SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE RELEVANT ISSU E WAS DISCUSSED WITH THE COUNSEL BY THE AO, WHICH WOULD B E EVIDENT FROM THIS FACT THAT THE ASSESSEE HAS SUBMITTED REPL Y ON THE MERITS OF THE ISSUE INVOLVED, AND THEREFORE, IT CAN BE PRESUMED THAT ASSESSEE WAS COMMUNICATED THE GIST OF THE ISSU ES INVOLVED IN THE REASONS, ON THE BASIS OF WHICH REOP ENING WAS DONE BY THE AO. IT WAS FURTHER SUBMITTED THAT THE REASONS MIGHT HAVE BEEN MISPLACED AND THEREFORE, BENEFIT OF DOUBT SHOULD BE GIVEN TO THE REVENUE AND REOPENING SHOULD BE UPHELD EVEN IF COPY OF REASONS IS NOT AVAILABLE IN THE FILE AND CERTIFIED COPY OF THE SAME WAS NOT PROVIDED TO THE ASSESSEE BY THE AO. 3.3 IN REPLY, LD. COUNSEL HAS VEHEMENTLY OPPOSED ARGUM ENTS OF THE LD. DR ON VARIOUS GROUNDS. IT HAS BEEN STATE D BY HIM THAT IN THE AFFIDAVIT FILED BY THE REVENUE, IT HAS BEEN NO WHERE STATED THAT REASONS WERE MISPLACED. OUR ATTENTION WAS DRAWN ON PAGE 29 OF THE PAPER BOOK FILED BY THE DEP ARTMENT WHICH CONTAINS ORDER SHEET ENTRIES RECORDED BY THE AO. ON THE BASIS OF THESE ENTRIES, IT WAS ARGUED BY THE LD. CO UNSEL THAT THERE IS NO MENTION OF EITHER RECORDING OF REASONS OR PROVIDING MULLER & PHILPPS LTD. 6 COPY OF THE SAME TO THE ASSESSEE, OR EVEN COMMUNICA TING THE SAME TO THE ASSESSEE, IN ANY MANNER. IT HAS BEEN SU BMITTED THAT NOTICE WAS ISSUED TO THE ASSESSEE U/S 143(2). IN RESPONSE TO WHICH, THE THEN COUNSEL OF THE ASSESSEE ATTENDED BEFORE THE AO AND AT THAT TIME THE THEN LD. COUNSEL OF THE ASS ESSEE WAS INFORMED BY THE AO TO FILE SUBMISSIONS ON SOME OF T HE ISSUES AS WERE RAISED BY THE AO, BY WAY OF ORDER SHEET ENT RIES, FOR THE FIRST TIME. IT WAS FINALLY ARGUED THAT THE ASSESSEE HAS REPEATEDLY REQUESTED FOR THE COPY OF THE REASONS DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND IF THESE WOULD HAVE BEEN RECORDED BY THE LD. AO, THEN, THESE WOULD HAVE DEFINITELY BEEN PROVIDED TO THE ASSESSEE, AND THEREFORE, IT IS NOW WELL ESTABLISHED THAT NEITHER ANY REASONS WERE RECORDE D NOR THE SAME WERE RECORDED TO THE ASSESSEE, AT ANY TIME. TH EREFORE, REOPENING BEING CONTRARY TO LAW, THE SAME SHOULD BE HELD AS INVALID AND IMPUGNED REASSESSMENT ORDER SHOULD BE Q UASHED. 3.4. WE HAVE GONE THROUGH THE SUBMISSIONS MADE AND ALSO THE MATERIAL PLACED BEFORE US BY BOTH THE SIDES IN THE FORM OF PAPER BOOKS. WE FIND THAT IN THIS CASE, ON EARLIER OCCASIONS, LONG DRAWN EXERCISE HAS BEEN DONE TO THRASH OUT THE FACTS PROPERLY. THE SUITABLE DIRECTIONS HAVE BEEN GIVEN B Y THE BENCH TO PRODUCE THE RECORDS, AND THEN TO FILE THE AFFIDA VITS IN SUPPORT OF THE RESPECTIVE CLAIMS OF THE PARTIES. TH E RECORDS WERE PRODUCED, AND WERE EXAMINED BY THE BENCH, AND THEN DETAILED NOTING WAS MADE BY THE HONBLE BENCH VIDE ORDER SHEET DATED 21.09.2011, AND THE SAME IS REPRODUCED FOR THE SAKE OF READY REFERENCE: MULLER & PHILPPS LTD. 7 ITA NO.5926/M/09 A.Y.2002-02 ITAT, G BENCH MUMBAI 21.09.2011 SHRI. PAVAN VED. LEARNED CIT DR IS PRESENT FOR REVENUE. SHRI. K. SHIVRAM. LEARNED COUNSEL IS PRESENT FO R THE ASSESSEE. IN THIS CASE, LEARNED CIT. DR WAS DIRECTED BY THE BENCH AT THE TIME OF HEARING FIXED ON 4.1.2011 TO PRODUCE THE REASONS RECORDED BY THE A.O. FOR REOPENING THE ASSESSMENT BY THE NEXT DATE OF HEARIN G FIXED ON 10.1.2011. ALTHOUGH, THE LEARNED CIT DR PRODUCED THE ASSESSMENT RECORD ON 10.1.2011, HE COULD NOT PRODUCE ANY DOCUMENT EVIDENCING THE RECORDING OF REASONS BY THE A.O. HE, HOWEVER, SOUGHT SOMETIME TO COMPLY WITH THE DIRECTION GIVEN BY THE BENCH ON 4.1.2011. THE LEARNED CIT, DR NOW SUBMITS THAT EVEN THOUGH THERE ARE NO REASONS RECODED BY THE A.O. IN WRITING AVAILABLE ON RECORDS , THE SAME ARE AVAILABLE ON COMPUTER AS INFORMED BY THE A.O. HE SUBMITS THAT THE DEPARTMENT IS IN A POSITION TO FILE A PRINT OUT OF THE SAME TAKEN FROM COMPUTER IN COMPLIANCE WITH THE DIRECTION OF THE TRIBUNAL. KEEPING IN VIEW THIS NEW STAND TAKEN BY T HE LEARNED CIT DR WHICH WAS NOT TAKEN EARLIER AND HAVING REGARD TO THE FACT THAT REASONS RECORDED BY THE A.O. ARE NOT AVAILABLE IN THE ASSESSMENT RECORD, WE DIRECT THE LEARNED CIT DR TO FILE AN AFFIDAVIT OF THE CONCERNED A.O. STATING ALL THE RELEVANT FACTS LIKE WHEN REASONS WERE RECORDED, WHY COPY THEREOF IS NOT PLACED, WHETHER THERE WAS AUDIT OF THIS CASE AND QUERY RAISED BY AUDIT PARTY, ETC. HE IS ALSO DIRECTED TO GIVE A COPY OF THE SAID AFFIDAVIT TO THE OTHER SIDE WELL IN ADVANCE BEFORE THE NEXT DATE OF HEARING. ACCORDINGLY, CASE IS ADJOURNED TO 5.12.2011. SD/- SD/- (R.S. PADVEKAR) (P.M. JAGTAP) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) MULLER & PHILPPS LTD. 8 3.5. IN RESPONSE TO THE ABOVE SAID DIRECTIONS, AN AFFID AVIT WAS FILED BY THE AO (I.E. LD. DCIT), DATED 12.02.2014 A ND CONTENTS OF THE SAME ARE REPRODUCED HEREIN FOR THE SAKE OF R EADY REFERENCE: I, MUDIT SRIVASTAVA, DCIT-2(2), MUMBAI, DO HEREBY SOLEMNLY AFFIRM AS UNDER: 1. THAT I TOOK OVER THE CHARGE OF DCIT-2(2), MUMBAI , ON 08.06.2012. 2. IN THE CHARGE HANDING OVER NOTE, MY PREDECESSOR HAD MENTIONED THE FOLLOWING 'A CASE FILE OF MULLER & PH IPS INDIA LTD A Y 2001-02 IS HANDED OVER TO YOU WHICH SHOULD BE KEPT IN PERSONAL CUSTODY. FURTHER A COMPUTER FILE CONTAINING REASONS FOR REOPENING IS SAVED IN THE CO MPUTER OF ROOM NO. 545 OF ACIT 2(2). FOR PROTECTING THE SAME, THE COMPUTER SHOULD BE SECURED WITH A PASSWORD.' 3. THAT THE REASONS RECORDED BY THE A.O. FOR REOPEN ING THE ASSESSMENT ARE NOT AVAILABLE IN PHYSICAL FORM ON RE CORD. 4. THAT A SOFT COPY OF THE REASONS RECORDED FOR REO PENING THE ASSESSMENT IN THE CASE OF M/S. MULLER & PHIPPS (INDIA) LTD. FOR A.Y. 2001-02 EXISTS IN THE COMPUTE R KEPT IN THE OFFICE OF THE DC1T-2(2), MUMBAI, AT R.N O. 545 OF AAYAKAR BHAVAN, BEARING FILE NAME 'MULLER & PHIPPS (I) LTD-2001-02.DOC'. A PRINTOUT OF THE FILE CONTAINING REASONS RECORDED FOR REOPENING THE ASSESSMENT IN THIS CASE DATED 17.02.2006 IS ANNEXED TO THIS AFFIDAVIT AS EXHIBIT-A. MULLER & PHILPPS LTD. 9 5. THAT THE PROPERTIES OF THE SAID COMPUTER FILE BE ARING FILENAME 'MULLER & PHIPPS (I) LTD-2001-02.DOC' INDI CATE THAT IT WAS LAST MODIFIED ON 17.02.2036 I.E. THE DA TE OF RECORDING THE REASONS FOR REOPENING AS PER THE PRIN TOUT ANNEXED AS EXHIBIT-A. A PRINTOUT OF THE SCREEN SHOW ING THE PROPERTIES OF THE COMPUTER FILE NAMED 'MULLER & PHIPPS (I) LTD-2001-2.DOC' IS ANNEXED TO THIS AFFID AVIT AS EXHIBIT-B. WHATEVER STATED ABOVE IS TRUE AND CORRECT TO THE BE ST OF MY KNOWLEDGE AND BELIEF. (MUDIT SRIVASTAVA) DEPUTY COMMISSIONER OF INCOME TAX-22 3.6. IN RESPONSE TO THE AFFIDAVIT FILED BY THE AO, A CO UNTER AFFIDAVIT HAS BEEN FILED BY THE ASSESSEE AND THE CO NTENTS OF THE SAME ARE ALSO REPRODUCED FOR THE SAKE OF READY REFE RENCE: AFFIDAVIT IN REPLY I MR. UTSAV DHUPELIA AGED ABOUT 67 YEARS, DIRECTOR OF THE M/S MULLER AND PHIPPS INDIA LTD HAVING OFFICE AT GR OUND FLOOR, UNIQUE INDUSTRIAL ESTATE, OFF VEER SAVARKAR MARG, PRABHADEVI, MUMBAI-400025 DO HEREBY STATE AS SOLEMN LY AFFIRMATION AS UNDER: 1. I HAVE PERUSED THE AFFIDAVIT OF SHRI MUDIT SRIVASTA VA DCIT-2(2) MUMBAI DATED 12-2-2014. 2. AT THE OUTSET I STATE THAT THE AFFIDAVIT FILED BY T HE LD. DCIT IS A SELF SERVING DOCUMENT AND HENCE CANNOT BE TAKEN ON RECORD IN ORDER TO PROVE RECORDING OF REAS ONS AT THE TIME OF REOPENING OF ASSESSMENT. THE SECTION 148 OF THE ACT DOES NOT RECOGNIZE SUCH RECORDING OF REA SONS MULLER & PHILPPS LTD. 10 ON COMPUTER WITHOUT THERE BEING A COPY AVAILABLE ON ASSESSMENT RECORD. 3. AS REGARD PARA1, NO COMMENTS IS REQUIRED. 4. AS REGARD 'PARA 2', I SAY THAT THE HANDING OVER NOTE TO BE PRODUCED IN THE ORIGINAL FOR THE CONSIDERATION OF THE HON'BLE BENCH. 5. I FURTHER SAY THAT WHETHER THE CONCERNED OFFICER HAS GIVEN SUCH OFFICE NOTE IN ALL MATTERS OR ONLY I N THE MATTER OF THE MULLAR AND PHIPPS INDIA LTD, SHOULD BE EXAMINED. 6. I SAY THAT PARA 3 RECORDS THE CORRECT FACT AND FOR THE PRESENT MATTER NOTHING FURTHER SHOULD BE LOOKED INTO. ONCE THE ASSESSMENT RECORDS DO NOT CONTAIN THE REASONS RECORDED IT CANNOT BE SUPPLIED FROM THIRD SOURCES AS THIS WILL LEAD TO READING DOWN THE SECTION 148 OF THE ACT. FURTHER THIS WILL FURTHER LEAD TO MALL PRACTICE OF SUPPLYIN G REASONS BACK DOOR. 7. I SAY THAT PARA 4 RECORDS A NEW FACT FOR THE FIRST TIME AND SHOULD NOT BE ADMITTED IN EVIDENCE UNLESS THE SAME IS PROVED BEYOND REASONABLE DOUBT. I WILL LIKE TO GET THE COMPUTER DATA VERIFIE D FROM COMPUTER EXPERT TO REVEAL THE CORRECT FACTS. I WILL ALSO LIKE TO CROSS EXAMINE THE OFFICER IN REGARDS TO THE CONTENT OF HIS AFFIDAVIT. 8. I FURTHER DENY THE CONTENT OF PARA 5 AND PUT THE OFFICER TO STRICT PROOF THEREOF. 9. I FURTHER SAY THAT THE ABOVE MENTIONED ATTACHMENT OF THE COMPUTER SCREEN SHOT OF THE ITO'S COMPUTER SCREEN. IT SHOWS THE FOLLOWING FILE PROPER TIES. FILE CREATED 30.09.2011 FILE MODIFIED 17.02.2006 MULLER & PHILPPS LTD. 11 FILE ACCESSED 28.6.2013 10. AS PER THE AFFIDAVIT SUBMITTED BY OFFICER IT ST ATES THAT THE FILE WAS LAST MODIFIED ON 17.02.2006 WHEREAS FROM THE ABOVE INFORMATION WHICH SHOWS THAT THE ORIGINAL FILE AS CREATED ON 30.09.2011 HOW CAN THE FILE WHICH IS CREATED ON 30.09.2011 BE MODIFIED ON 17.02.2006 ? IN ANY OF THE FILE GENERATION METHODS, THE DATE OF FILE CREATION WILL ALWAYS COME FIRST FOLLOWED BY THE LAS T UPDATED OR THE MODIFIED DATE. THUS, THERE SEEMS TO BE APPARENT DISCREPANCY SHOWIN G THE FILE CREATION DATE AS 30.09.2011 WHILE MODIFICA TION OF THE FILE IS MADE ON 17.2.2006. THUS IT IS POSSIBLE THAT THE FILE IS CREATED IN 2011. I.E. MUCH LATER THAN THE D ATE OF RECORDING THE REASONS OF REOPENING I.E. 17.2.2006. AT THIS JUNCTURE IT MAY BE BROUGHT TO YOUR HONOURS NOTICE THAT THE FIRST ORDER PASSED BY THE HONBLE TRIBUNAL IN THE ABOVE MATTER WAS ON 10.01.2011 WHEREIN THE TRIBUNAL RECORDED THE FINDING OF FACTS THAT THE ASST. RECORD PRODUCED BY LD DR DID NOT CONTAIN THE COPY OF REASO NS RECORDED. 11. I FURTHER SAY THAT THE DATE OF THE COMPUTER CAN BE EASILY MANIPULATED IN ORDER TO CHANGE OR SET ANY DE SIRED DATE ANY FILE CAN BE CREATED, ACCESSED AND MODIFIED ON ANY DATE PROVIDED THAT THE SAME ACTIONS HAVE BEEN CARRIED BY CHANGING THE COMPUTER SYSTEM DATE. 12. I FURTHER SAY THAT THE CREATION OF SUCH FILE HA VING ABOVE MENTIONED DATE ATTRIBUTES IS POSSIBLE BY CHAN GING THE COMPUTED DATE SETTINGS. 13. I STATE THAT THE ALLEGED COPY OF REASONS RECORD ED DATED 17.2.2006 ENCLOSED IN THEIR AFFIDAVIT, IS NOT SIGNE D BY MR. S.C. SARANGI THE THEN ASST. COMM. OF INCOME TAX CIR . 2(2), WHICH IS MANDATORY REQUIREMENT OF THE LAW. FU RTHER, THE ASSESSMENT ORDER IS PASSED BY MR. UDAY HARDIKAR , ITO 2(2)(2), MUMBAI. MULLER & PHILPPS LTD. 12 14. I AM MAKING THIS AFFIDAVIT TO PUT THE TRUE FACT S ON RECORDS AND WHATEVER IS STATED IN PARAS 1 TO 13 ARE TRUE AND CORRECT TO BEST OF MY KNOWLEDGE AND BELIEF. -SD- SOLEMNLY AFFIRMED AT MUMBAI (DEPONENT) THIS 17 TH DAY OF MAY 2014 3.7. FURTHER, IN RESPONSE TO THE COUNTER AFFIDAVIT, THE AO HAS GIVEN ITS COMMENTS BY WAY OF ORDER DATED 30 TH JULY 2014 AND WE FIND IT APPROPRIATE TO REPRODUCE THE SAME ALSO, HEREUNDER: TO, THE CIT(DR) ITAT-XII, G BENCH MUMBAI RESPECTED MADAM, SUB: COMMENTS ON THE AFFIDAVIT IN REPLY FILED BY TH E ASSESSEE IN THE CASE OF M/S MULLER & PHIPPS (1) LTD. FOR AY 2001-02 - REG. KINDLY REFER TO THE ABOVE MATTER. 2. COMMENTS ON THE AFFIDAVIT IN REPLY FILED BY THE ASSESSEE DATED 17.05.2014 DURING THE PROCEEDINGS BEFORE THE HON'BLE ITAT IN THE ABOVE MENTIONED CASE ARE SUBMITTED AS BELOW: PARA 1: NO COMMENTS ARE REQUIRED. PARA 2: THE AFFIDAVIT SUBMITTED BY THE ID. DCIT IS A STATEMENT OF FACTS OF THE CASE. THE AFFIDAVIT SUBMI TS THAT A SOFT COPY OF REASONS RECORDED FOR REOPENING THE ASSESSMENT EXISTS IN THE COMPUTER. IT IS MULLER & PHILPPS LTD. 13 SUBMITTED THAT AS PER THE INFORMATION TECHNOLOGY AC T 2000, ELECTRONIC RECORDS ARE LEGALLY RECOGNISED. PARA 3: NO COMMENTS ARE REQUIRED. PARA 4: HANDING OVER NOTE IS BEING PRODUCED IN ORIGINAL. PARA 5: IT IS A USUAL PRACTICE TO GIVE A NOTE ON THE IMPORTANT ONGOING MATTERS PERTAINING TO A CHARGE IN THE HANDING OVER NOTE, WHEN THE CHARGE IS HANDED OVER TO THE SUCCEEDING OFFICER. ACCORDINGLY, THE SA ID CASE WAS MENTIONED IN THE HANDING OVER NOTE. REMARKS HAVE BEEN GIVEN FOR SEVERAL OTHER ONGOING MATTERS, AS CAN BE SEEN FROM THE HANDING OVER NOTE. PARA 6: THE REASONS FOR REOPENING ARE NOT AVAILABLE IN PHYSICAL FORM NOW DOES NOT MEAN THAT THEY WERE N OT PLACED IN THE FILE AT ANY POINT OF TIME. PARA7 : THE COMPUTER FILE MAY BE VERIFIED BY A COMPUTER EXPERT. THE ASSESSEE MAY CROSS EXAMINE. PARA 8: THE SAME MAY BE VERIFIED FROM A COMPUTER EXPERT, IF THE HON'BLE BENCH SO DESIRES. PARA 9: NO COMMENTS ARE REQUIRED. PARA 10: THERE IS NO DISCREPANCY. AN ELEMENTARY KNOWLEDGE OF COMPUTERS IS REQUIRED TO UNDERSTAND THIS POINT. THE DATE OF FILE CREATION REFERS TO THE DATE IT IS CREATED IN THAT PARTICULAR MEMORY LOCATION. THIS CREATION MAY BE BY MEANS OF COPY-PASTE FROM ANOTHER LOCATION. THE DATE OF LAST MODIFICATION REFERS TO T HE LAST MODIFICATION DONE IN ANY OF THE CONTENTS OF THE FILE. THUS, IN A CASE WHERE A FILE IS CREATED ON A PARTICULAR MEMORY LOCATION AT A CERTAIN TIME AND DATE, AND SUBSEQUENTLY IT IS COPIED IN ANOTHER LOCATION, THE TIME AND DATE OF CREATION IN THE CASE OF MULLER & PHILPPS LTD. 14 THE COPIED FILE WILL BE SEEN AS SUBSEQUENT TO THE T IME AND DATE OF LAST MODIFICATION. THIS IS A COMMON FEATURE OF THE WINDOWS OPERATING SYSTEM AND CAN BE CHECKED BY ANYONE. A PRINTOUT OF THE OFFICIAL HELP COMMUNITY OF MICROSOFT WINDOWS ON THIS ISSUE IS ATTACHED HEREWITH, WHEREIN THE SAME IS EXPLAINED BY PROFESSIONALS. IN CASE OF ANY FURTHER DOUBT ON THIS ELEMENTARY FEATURE OF WINDOWS SYSTEM, THE SAME MAY ALSO BE CONFIRMED FROM A COMPUTER EXPERT. PARA 11: THE SAME MAY BE VERIFIED BY A COMPUTER EXPERT. PARA 12: THE SAME MAY BE VERIFIED BY A COMPUTER EXPERT. PARA 13: THE SAID COPY IS ONLY A PRINTOUT OF THE COMPUTER FILE. THIS FACT IS CLEARLY STATED IN THE A FFIDAVIT ITSELF. THEREFORE, IT IS NOT A SIGNED COPY. PARA 14: NO COMMENTS ARE REQUIRED . 3. SUBMITTED FOR YOUR KIND CONSIDERATION . 3 . SUBMITTED FOR YOUR KIND CONSIDERATION . YOURS FAITHFULLY, SD/- (SAURABH SHARMA) ACI T CIRCLE 2(2), MUMBAI 3.8. DETAILED ARGUMENTS HAVE BEEN MADE BY BOTH THE SIDE S ON THE ABOVE SAID DOCUMENTS AND ALSO ON VARIOUS OTHER DOCUMENTS PLACED IN THE PAPER BOOKS FILED BY BOTH T HE SIDES. AFTER ANALYSING THE WHOLE FACTUAL SITUATION, WE FIN D THAT AT THIS STAGE, WE NEED NOT GO TOO MUCH DEEPER INTO THE ALLE GATIONS AND COUNTER ALLEGATIONS MADE BY BOTH THE SIDES. WE CAN DECIDE THIS ISSUE ON THE BASIS OF THOSE FACTS ONLY ON WHICH THE RE IS MULLER & PHILPPS LTD. 15 CONSENSUS OF BOTH THE PARTIES. THE UNDISPUTED FACTS , WHICH EMERGE NOW AFTER AFORESAID EXHAUSTIVE EXERCISE, ON WHICH THERE IS UNANIMITY ON THE PART OF BOTH THE SIDES, ARE THA T, ONE- NO REASONS ARE AVAILABLE IN THE ASSESSMENT RECORD, A ND TWO- THERE IS NOTHING ON RECORD TO SHOW THAT CERTIFIED C OPY OF VERBATIM REASONS WAS EVER PROVIDED TO THE ASSESSE E, DESPITE THE REQUEST MADE BY THE ASSESSEE BEFORE AO, MORE TH AN ONCE. IN VIEW OF THESE FACTS, LD. COUNSEL HAS VEHEMENTLY ARGUED THAT IT CLEARLY INDICATES THAT NO REASONS WERE RECORDE D INFACT AND THEREFORE, THESE COULD NOT HAVE BEEN PROVIDED TO TH E ASSESSEE. IT HAS BEEN SUBMITTED FURTHER THAT HAD THE REASONS BEEN RECORDED BY AO, THESE WOULD HAVE DEFINITELY BEEN PR OVIDED TO THE ASSESSEE. THIS VITAL ARGUMENT OF THE LD. COUNSE L COULD NOT BE DISPLACED BY THE LD. DR. 3.9 IN THE AFORESAID GIVEN FACTS OF THE CASE, AS HAVE BEEN BROUGHT OUT ON THE RECORDS, WE ARE ALSO NOT IN POSI TION TO REJECT AFORESAID ARGUMENT OF THE LD. COUNSEL. WE FI ND THAT UNDER THESE FACTS, THE POSITION OF LAW IS CLEAR. IT HAS BEEN HELD BY HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFT 259 ITR 19, THAT IT IS MANDATORY ON THE PART OF THE AO TO PROVIDE THE COPY OF THE REASONS TO THE ASSESSEE AND TO MEET THE OBJECTIONS FILED BY THE ASSESSEE THERETO, IF ANY, B EFORE THE AO CAN FRAME THE REASSESSMENT ORDER. IT IS FURTHER NOT ED THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. VIDESH SANCHAR NIGAM LTD. (SUPRA) HAS HELD THAT IN CASE REASONS ARE NOT FURNISHED BY THE AO TO THE ASSESSEE, BEFORE COM PLETION OF REASSESSMENT PROCEEDINGS, REASSESSMENT ORDER CANNOT BE MULLER & PHILPPS LTD. 16 UPHELD. IT IS FURTHER NOTED THAT SLP FILED BY THE R EVENUE AGAINST THE ORDER OF HONBLE BOMBAY HIGH COURT, HAS BEEN REJECTED BY HONBLE SUPREME COURT. SIMILAR VIEW HAS BEEN TAKEN BY HONLE MUMBAI BENCH OF ITAT IN THE CASE OF TATA INTERNATIONAL LTD . VS DCIT, SUPRA AND ALSO IN FEW OTHER JUDGMENTS AS HAVE BEEN RELIED UPON BY LD. COUNSEL B EFORE US. WE FURTHER DERIVE SUPPORT OF OUR VIEW FROM A LATEST JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. TREND ELECTRONIC IN ITA NO.1867/2013 ORDER DATED 16 TH SEPTEMBER 2015. IN THIS CASE, HONBLE JURISDICTIONAL HIGH COU RT, FOLLOWING ITS EARLIER DECISION IN THE CASE OF VIDESH SANCHAR NIGAM LTD. (SUPRA), HELD THAT LAW LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF G.K.N. DRIVESHAFTS (INDIA) LTD, IS CLEA R AND MANDATORY FOR IMPLEMENTATION AND IT IS TO BE STRICT LY FOLLOWED BY THE AO BEFORE FARMING THE REASSESSMENT ORDER. IT WAS FURTHER HELD THAT RULE WITH REGARD TO FURNISHING OF REASONS BY THE AO IS TO BE FOLLOWED STRICTLY, AS THE POWER GIV EN TO THE AO FOR REOPENING OF A COMPLETED ASSESSMENT UNDER THE I NCOME TAX ACT, IS AN EXCEPTIONAL POWER AND WHENEVER REVEN UE SEEKS TO EXERCISE SUCH POWER, IT MUST STRICTLY COMPLY WIT H THE PRE- REQUISITE CONDITIONS I.E. REASONS MUST BE RECORDE D AND THESE RECORDED REASONS MUST BE FURNISHED TO THE ASSESSE E, WHEN SOUGHT FOR, SO AS TO ENABLE THE ASSESSEE TO OBJECT TO THE SAME, DURING THE COURSE OF ASSESSMENT PROCEEDING. THUS, I N ABSENCE OF REASONS PROVIDED BY THE AO TO THE ASSESSEE, TH E REASSESSMENT ORDER SHALL BE BAD IN LAW. THE RECORDI NG OF REASONS AND FURNISHING OF THE SAME HAS TO BE STRI CTLY COMPLIED WITH, AS IT IS A JURISDICTIONAL ISSUE. THI S REQUIREMENT MULLER & PHILPPS LTD. 17 IS VERY SALUTARY AS IT ENSURES THAT REOPENING IS NO T DONE IN A CASUAL MANNER. IN ADDITION TO THAT, IN CASE REOPENI NG HAS BEEN DONE ON SOME MISUNDERSTANDING/MISCONCEPTIONS, THEN, THE ASSESSEE IS GIVEN OPPORTUNITY TO POINT OUT THAT REA SONS TO BELIEVE, AS RECORDED IN THE REASONS, DO NOT WARRA NT REOPENING, BEFORE THE ASSESSMENT PROCEEDINGS ARE CO MMENCED. THE AO CAN DISPOSE ALL THESE OBJECTIONS, AND IF SAT ISFIED WITH THE OBJECTIONS, THE IMPUGNED REOPENING NOTICE ISSUE D U/S 148 OF THE ACT CAN BE WITHDRAWN; OTHERWISE IT CAN BE PR OCEEDED WITH FURTHER. IN ISSUES, SUCH AS THIS, WHERE JURISD ICTIONAL ISSUE IS INVOLVED, THE SAME MUST BE STRICTLY COMPLIED WIT H BY THE AUTHORITY CONCERNED. 3.10. SIMILAR VIEW HAS BEEN REITERATED BY HONBLE KARNATA KA HIGH COURT IN THE CASE OF KOTHARI METALS (WRIT APPEAL NO.218/2015, ORDER DATED 14 TH AUGUST 2015 , WHEREIN IT HAS BEEN HELD THAT THE QUESTION OF NON-FURNISHING THE REASONS FOR REOPENING AN ALREADY CONCLUDED ASSESSMENT GOES TO V ERY ROOT OF THE MATTER, AND THAT THE ASSESSEE IS ENTITLED TO BE FURNISHED THE REASONS FOR SUCH REOPENING AND THAT IF REASO NS ARE NOT FURNISHED TO THE ASSESSEE, THEN THE PROCEEDINGS FOR THE REASSESSMENT CAN NOT BE TAKEN ANY FURTHER, AND REO PENING OF THE ASSESSMENT WOULD BE BAD IN LAW. 3.11. NO CONTRARY JUDGMENT HAS BEEN BROUGHT TO OUR NOTIC E BY LD. DR. THUS, RESPECTFULLY FOLLOWING THE MANDATE OF HONBLE SUPREME COURT AND HONBLE JURISDICTIONAL HIGH COURT IN THE AFORESAID CASES, WE HOLD THAT REOPENING OF THIS CAS E, IN THE MULLER & PHILPPS LTD. 18 GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, IS INVAL ID AND THEREFORE, CONSEQUENT REASSESSMENT ORDER AS FRAMED BY THE AO IS ALSO ILLEGAL AND THE SAME IS HEREBY QUASHED. THU S, GROUND NO. I(2) IS ALLOWED. 4. SINCE, WE HAVE DECIDED THIS APPEAL ON THE LEGAL GR OUND ITSELF, HOLDING THE IMPUGNED REASSESSMENT ORDER AS INVALID, WE ARE NOT GOING INTO MERITS OF THE CASE AND OTHER GRO UNDS, AND ACCORDINGLY GROUNDS NO. I (1) AND II (3) AND II(4), ARE NOT BEING ADJUDICATED. 5 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER 2015. SD/- (SAKTIJIT DEY ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER MUMBAI; DATED : 28/10/2015 CTX? P.S/. .. # $%&'&($ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !'# / THE RESPONDENT. 3. $# $# % ( ) / THE CIT, MUMBAI. 4. $# $# % / CIT(A)- , MUMBAI 5. ()*# ! + , $# # + - , / DR, ITAT, MUMBAI 6. *. / / GUARD FILE. / BY ORDER, '#( ! //TRUE COPY// / (DY./ASSTT. REGISTRAR) MULLER & PHILPPS LTD. 19 , / ITAT, MUMBAI