The Income tax Officer,Ward-25(3)(2), MUMBAI V. PALLAVI VIJEN JHAVERI, Mumbai

ITA 5998/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0281 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 25-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT MITTAL
• Keywords: Bogus purchase; Validity of assessment; Procedural lapse; Condonation of delay; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI A.D. JAIN, VICE PRESIDENT AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.5998/M/2017 ASSESSMENT YEAR: 2007-08 INCOME TAX OFFICER, WARD 25(3)(2), ROOM NO.604, C-10, 6 TH FLOOR, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI - 400051 PAN: ACAPJ3212B VS. M/S. PALLAVI VIJEN JHAVERI, FLAT NO.12, 6 TH FLOOR, RAJHEM, 27, NAVYU SOCIETY, V.M. ROAD, JUHU SCHEME PARLE (WEST) MUMBAI 400056 (APPELLANT) (RE SPONDENT) CO NO.225/M/2018 (ARISING OUT OF ITA NO.5998/M/2017) ASSESSMENT YEAR: 2007-08 M/S. PALLAVI VIJEN JHAVERI, FLAT NO.12, 6 TH FLOOR, RAJHEM, 27, NAVYU SOCIETY, V.M. ROAD, JUHU SCHEME PARLE (WEST) MUMBAI 400056 VS. INCOME TAX OFFICER, WARD 25(3)(2), ROOM NO.604, C-10, 6 TH FLOOR, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI - 400051 PAN: ACAPJ3212B (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI DHARMESH SHAH, A.R. REVENUE BY : SHRI AMIT MITTAL, D.R. DATE OF HEARING : 26.09.2019 DATE OF PRONOUNCEMENT : 17.12.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED APPEAL HAS BEEN FILED BY THE REVE NUE AND THE CROSS OBJECTION HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 04.07.2017 OF THE COMMISSIONER OF I NCOME TAX ITA NO.5998/M/2017 CO NO.225/M/2018 M/S. PALLAVI VIJEN JHAVERI 2 (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO ASSESSMENT YEAR 2007-08. 2. THE REVENUE HAS CHALLENGED THE ORDER OF LD. CIT( A) DELETING THE ADDITION OF RS.2,14,31,226/- ON ACCOUNT OF BOGU S PURCHASES AND DIRECTING THE AO TO ESTIMATE THE ADDITION AT 3% OF THE TOTAL BOGUS PURCHASES WHEREAS THE ASSESSEE BY WAY OF CROS S EXAMINATION HAS CHALLENGED JURISDICTION OF THE AO T O FRAME THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 1 47 OF THE ACT. THEREFORE, WE WOULD LIKE TO ADJUDICATE FIRST THE LEGAL ISSUE RAISED BY THE ASSESSEE IN THE CROSS OBJECTION. 3. WE OBSERVE THAT THE CROSS OBJECTION FILED BY THE ASSESSEE IS DELAYED BY 19 DAYS AND THE ASSESSEE HAS FILED PETIT ION FOR CONDONATION OF DELAY ALONG WITH AFFIDAVIT OF THE PA RTY EXPLAINING THE REASON FOR THE DELAY. 4. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE DELAY IN FILING THE CRO SS OBJECTION WAS ON ACCOUNT OF ASSESSEE BEING OUT OF STATION FRO M 30.06.2018 TO 13.07.2018 AND THEREFORE CROSS OBJECTION COULD N OT BE SIGNED. THESE DOCUMENTS WERE ONLY SINGED WHEN ASSESSEE RETU RNED BACK TO INDIA ON 21.07.2018 AND FILED ON 23.07.2018. IN OUR OPINION, THE ASSESSEE HAS FULLY EXPLAINED THE DELAY IN FILIN G THE CROSS OBJECTION AND WE ARE, THEREFORE, OF THE VIEW THAT D ELAY IN FILING THE CROSS OBJECTION DESERVED TO BE CONDONED. ACCOR DINGLY, DELAY IN FILING CROSS OBJECTION IS CONDONED. 5. THE ASSESSEE HAS RAISED THE ISSUE OF VALIDITY OF ASSESSMENT FRAMED BY THE AO UNDER SECTION 143(3) READ WITH SEC TION 147 OF THE ACT DATED 28.03.2015. ITA NO.5998/M/2017 CO NO.225/M/2018 M/S. PALLAVI VIJEN JHAVERI 3 6. THE LD A.R. REQUESTED BEFORE THE BENCH THAT DESP ITE WRITTEN REQUESTS TO THE AO, THE REASONS RECORDED UN DER SECTION 148(2) OF THE ACT WERE NOT SUPPLIED TO THE ASSESSEE EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A). FINALLY, THE REASONS WERE S UPPLIED DURING THE APPELLATE PROCEEDINGS BEFORE THIS HONBLE TRIBU NAL. THE LD. A.R. DREW OUR ATTENTION TO THE LETTER DATED 21.04.2 014 REQUESTING THE AO TO PROVIDE THE REASONS RECORDED F OR REOPENING THE ASSESSMENT. SIMILARLY, THE AO WAS ALSO REQUEST ED ON 24.12.2016 VIDE PARA 6 TO SUPPLY THE REASONS RECORD ED FOR ISSUING NOTICE UNDER SECTION 148 OF THE ACT. THE L D. A.R. ALSO DREW OUR ATTENTION TO PAGE NO.8 AND 8A OF THE PAPER BOOK WHEREIN THE LETTER DATED 24.01.2019 AND 14.02.2019 WERE FILED WHEREIN THE SPECIFIC REQUESTS FOR SUPPLYING THE REA SONS HAVE BEEN MADE TO THE AO. THE LD A.R. FINALLY DREW OUR ATTENTION TO PAGE NO.10 OF THE PAPER BOOK DATED 15.02.2019 AD DRESSED BY THE AO TO THE ASSESSEE WHEREIN THE REASONS WERE SUP PLIED AS RECORDED UNDER SECTION 148(2) OF THE ACT. THE LD. A.R. VEHEMENTLY SUBMITTED BEFORE THE BENCH THAT SINCE TH E AO HAS FAILED TO SUPPLY REASONS TO THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS OR DURING THE PROCEEDINGS BEFORE THE LD . CIT(A), THEREFORE ASSESSMENT AS FRAMED BY THE AO UNDER SE CTION 143(3) READ WITH SECTION 147 OF THE ACT IS INVALID AND VOI D AB INITIO. IN DEFENCE OF HIS ARGUMENTS, THE LD. A.R. RELIED ON A SERIES OF DECISIONS NAMELY; (1) CIT VS. VIDESH SANCHAR LTD. (2012) 340 ITR 66 ( BOM.) (2) PR. CIT VS. V. RAMAIAH (2019) 103 TAXMANN.COM 2 02 (SC) (3) ITO VS. RISHI GODANI (2018) 97 TAXMANN.COM 135 (AGRA-TRIB.) (4) RINA S. MEHTA VS. DCIT IN ITA NO.3120/M/2015 ITA NO.5998/M/2017 CO NO.225/M/2018 M/S. PALLAVI VIJEN JHAVERI 4 7. THE LD. A.R. PRAYED BEFORE THE BENCH THAT EVEN H ONBLE SUPREME COURT IN THE CASE OF PR. CIT VS. V. RAMAIAH HAS DISMISSED THE SLP FILED BY THE REVENUE AGAINST THE DECISION OF THE HONBLE HIGH COURT WHEREIN THE HIGH COURT HAS U PHELD THE ORDER OF TRIBUNAL UPHOLDING THAT NON COMMUNICATION OF REASONS RECORDED FOR RE-OPENING THE ASSESSMENT DID NOT AMOU NT TO A MERE PROCEDURAL LAPSE AND THUS UPHELD THE QUASHING THE REASSESSMENT ORDER BY THE TRIBUNAL. THE LD. A.R., THEREFORE, PRAYED BEFORE THE BENCH THAT THE ORDER PASSED BY TH E AO UNDER SECTION 143(3) READ WITH SECTION 147 MAY KINDLY BE QUASHED AS INVALID AND NULLITY IN THE EYES OF LAW. THE DR ON THE OTHER HAND RELIED SUBMITTED THAT ASSESSMENT WAS RIGHTLY RE-OPE NED BY THE AO AFTER RECORDING THE REASONS TO BELIEVE AND RELIE D HEAVILY RELIED ON THE ORDERS OF AUTHORITIES BELOW. 8. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE REASONS RECORDED BY THE AO FOR INITIATING REASSESSMENT PROCEEDINGS UNDER SECTION 1 47 OF THE ACT THOUGH BUT THE SAME WERE NOT SUPPLIED TO THE ASSE SSEE DESPITE REPEATED WRITTEN REQUESTS/COMMUNICATIONS WHICH HAVE BEEN REFERRED TO ABOVE. WE NOTE FROM THE RECORDS THAT A SSESSEE HAS REQUESTED ON 21.04.2014, 24.01.2019 AND 14.02.2019 TO THE AO TO SUPPLY THE REASONS RECORDED WHICH WERE SUPPLIED BY THE AO ONLY DURING THE PENDENCY OF APPEAL PROCEEDINGS BEFO RE THE TRIBUNAL ON 15.02.2019. THUS THE ASSESSEE IS DEPRI VED OF FILING THE OBJECTIONS TO THE REASSESSMENT PROCEEDINGS DURI NG THE ASSESSMENT PROCEEDINGS. UNDER THESE CIRCUMSTANCES, WE ARE NOT IN A POSITION TO UPHOLD THE ASSESSMENT ORDER ON THE GROUND OF NON FURNISHING OF REASONS TO THE ASSESSEE TILL THE COMPLETION OF ASSESSMENT. IN THE CASE OF CIT VS. VIDESH SANCHA R LTD. (SUPRA) THE HONBLE BOMBAY HIGH COURT HAS HELD THAT ITA NO.5998/M/2017 CO NO.225/M/2018 M/S. PALLAVI VIJEN JHAVERI 5 REASSESSMENT IS NOT VALID WHERE THE REASONS RECORD ED UNDER SECTION 148(2) OF THE ACT FOR REOPENING THE REASSES SMENT WAS NOT FURNISHED TO THE ASSESSEE BEFORE THE COMPLETION OF ASSESSMENT. SIMILARLY, THE HON'BLE APEX COURT IN THE CASE OF PR . CIT VS. V. RAMAIAH (SUPRA) HAS DISMISSED THE SLP FILED BY THE REVENUE AGAINST THE DECISION OF HIGH COURT WHEREIN THE HON BLE BOMBAY HIGH COURT HAS UPHELD THE ORDER OF THE TRIBUNAL WHE REIN THE TRIBUNAL HAS QUASHED THE REASSESSMENT ORDER ON THE GROUND OF NON SUPPLYING THE REASONS FOR REOPENING TO THE ASSE SSEE. UNDER THESE CIRCUMSTANCES, WE ARE INCLINED TO QUASH THE R EASSESSMENT ORDER FRAMED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT AND CONSEQUENTLY THE CROSS OBJECTION FILED BY T HE ASSESSEE IS ALLOWED. 9. SINCE WE HAVE ALLOWED THE CROSS OBJECTION OF THE ASSESSEE, THE APPEAL OF THE REVENUE BECOMES INFRUCTUOUS AND A CCORDINGLY IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.12.2019. SD/- SD/- (VICE PRESIDENT) (RAJESH KUMAR) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 17.12.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.