ADINATH METALS, MUMBAI V. INCOME TAX OFFICER-31(1)(1), MUMBAI

ITA 6008/MUM/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0330 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 25-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N HEMALATHA
• Keywords: Reopening of assessment; Tangible material; Competent authority
• Section: 69C; 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 6008 / MUM/20 17 ( ASSESSMENT YEAR : 2007 - 08 ) M/S. ADINATH METALS OPP. CHOUDHARY HARDWARE NEAR POOJA BAR & RESTAURANT I.B.PATEL ROAD, GOREGAON (E) MUMBAI - 400063 VS. THE INCOME TAX OFFICER 31(1)(1), MUMBAI PAN/GIR NO. AAFFA8271N APPELLANT ) .. RESPONDENT ) ASSESSEE BY SHRI PIYUSH CHHAJED REVENUE BY MS. N. HEMALATHA DATE OF HEARING 10 / 01 /201 8 DATE OF PRONOUNCEME NT 12 / 02 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 42, MUMBAI DATED 14/06/2017 FOR A.Y.2007 - 08 IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S.147 OF THE IT ACT. 2. THE FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE: - 1) THE LEARNED ASSESSING OFFICER ERRED IN ISSUING NOTICE U/S. 148 WITHOUT OBTAINING APPROPRIATE SANCTION/APPROVAL AS REQUIRED BY PROVISIONS OF SECTION 151 OF THE INCOME TAX ACT AND THEREFORE THE NOTICE IS BAD IN LAW AND VOID AB INITIO. CONSEQUENTLY, THE ASSESSMENT ORDER PASSED U/S. 143(3) R.W.S. 141 DESERVES TO BE ANNULLED. 2) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE REOPENING OF ASSESSMENT U/S.143(3) R.W.S. 147 WITHOUT APPRECIATING THAT THE LEARNED ASSES SING OFFICER HAD NOT BROUGHT ANY FRESH TANGIBLE MATERIAL ON RECORD MOREOVER, WHEN THE ORIGINAL ASSESSMENT WAS ALREADY COMPLETED U/S. 143(3). ITA NO. 6008/MUM/2017 M/S. ADINATH METALS 2 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE REOPENING OF ASSESSMENT U/ S.147 ON T HE BASIS OF REASONS RECORDED IN RESPECT OF INFORMATION RECEIVED FROM DIT - (INVESTIGATIONS) AND WITHOUT INDEPENDENT APPLICATION OF MIND. 4) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMIN G THE ADDITION OF RS.49J4,022/ - U/S.690 WITHOUT APPRECIATING THAT THE PURCHASES WERE ALREADY RECORDED IN THE BOOKS OF ACCOUNTS AND THEREFORE SECTION 69C ITSELF IS NOT APPLICABLE AND THEREFORE THE ADDITION IS BAD IN LAW. 5) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS. 32,91,824/ - BEING 100% OF THE PURCHASES MADE FROM TWO PARTIES WITHOUT ANY BASIS AND EVEN NOT PROVIDING THE COPY OF THE STATEMENT RECORDED BEFORE THE SALES TAX DEPARTMENT OR CROSS - EXAMINE THE APPELLANT AND THEREFORE THE SAME IS BAD IN LAW. 6) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FURTHER ERRED IN CONFIRMING THE ADDIT ION OF RS.16,22,198/ - BEING 12.5% OF RS ..1, 29,77,583/ - IN RESPECT OF CERTAIN PARTIES PURPORTED TO BE BOGUS. THE APPELLANT CRAVES THE LEAVE TO ADD, AMEND, ALTER AND/OR DELETE' ANY OF THE ABOVE GROUNDS OF APPEAL AT/OR BEFORE THE TIME OF HEARING. 3. IT WAS ARGUED BY LEARNED AR THAT THE LEARNED ASSESSING OFFICER ERRED IN ISSUING NOTICE U/S.148 WITHOUT OBTAINING APPROPRIATE SANCTION/APPROVAL AS REQUIRED BY PROVISIONS OF SECTION 151 OF THE INCOME TAX ACT AND THEREFORE THE NOTICE IS BAD IN LAW AND VOID AB INITIO. C ONSEQUENTLY, THE ASSESSMENT ORDER PASSED U/S.143 (3) R.W . S 147 DESERVES TO BE ANNULLED. 4. HE FURTHER CONTENDED THAT SINCE THE ORIGINAL ASSESSMENT WAS PASSED U/S.143(3), THE PROVISIONS OF SECTION 151 ARE APPLICABLE WHICH READS AS UNDER : - ( 1 ) IN A CASE WHERE AN ASSESSMENT UNDER SUB - SECTION (3) OF SECTION 143 OR SECTION 147 HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO NO TICE SHALL BE ISSUED UNDER SECTI ON 1 48 BY AN ASSESSING OF FICER, W HO IS BELOW THE RANK OF ASSISTANT COMMISSIONER OR DEPUTY COMMISSIONER ITA NO. 6008/MUM/2017 M/S. ADINATH METALS 3 UNLESS THE JOINT COMMISSIONER IS SATISFIED ON THE REASONS RECORDED BY SUCH ASSESSING OFFICER THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE: PROVIDED THAT, AFTER T HE EXOIRV OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, NO SUCH NOTICE SHALL BE ISSUED UNLESS THE CHIEF COMMISSIONER OR COMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BV THE ASSESSING OFFICER AFORESAID, THAT IT IS A FIT CASE FO R THE ISSUE OF SUCH NOTICE 5. AS PER LEARNED AR, SANCTION OBTAINED BY THE AO FROM JOINT COMMISSIONER OF INCOME TAX ONLY. THEREFORE, THERE IS NO SANCTION OBTAINED OF COMMISSIONER OF INCOME TAX AS REQUIRED BY PROVISO TO SECTION 151(1). ACCORDINGLY REOPENING WAS NOT VALID. IN THIS REGARD RELIANCE WAS PLACED ON THE FOLLOWING JUDGEMENTS. - SPL'S SIDDHARTHA LTD, [2012] 345 ITR 223, HONORABLE HIGH COURT OF DELHI . - DSJ COMMUNICATION LTD, 41 TAXMANN.COM 151, HONORABLE HIGH COURT OF BOMBAY - VINAY ENTERPRISES, IT A NO. 6441/MUM/2011, HONORABLE ITAT MUMBAI 6. 1 HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. PRINCIPALLY, I AGREE WITH THE CONTENTION OF LEARNED AR THAT IN CASE, ASSESSMENT IS FRAMED U/S.143(3) AND REOPENING WAS SOUGHT AFTER EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR, THE ONLY COMPETENT AUTHORITY TO GIVE APPROVAL FOR ISSUE OF NOTICE U/S.148 IS THE CHIEF COMMISSIONER OR COMMISSIONER OF INCOME TAX. HOWEVER, IN THE INSTANT CASE, NOWHERE IN THE ORDER PASSED U/S.143(3) R.W.S. 147 IT WAS OBSERVED BY AO THAT ASSESSMENT WAS ORIGINALLY FRAMED ITA NO. 6008/MUM/2017 M/S. ADINATH METALS 4 U/S. 143(3), NOR CIT(A) HAS MENTIONED IN HIS APPELLATE ORDE R THAT THE ORIGINAL ASSESSMENT ORDER WAS PASSED U/S.143(3). ON THE CONTRARY BOTH AO AND CIT(A) HAD IN THEIR RESPECTIVE ORDERS MENTIONED THAT RETURN WAS PROCESSED U/S. 143(1) I HAVE ALSO VERIFIED THE STATEMENT OF FACTS FILED BY THE ASSESSEE HIMSELF BEFORE T HE CIT(A) WHEREIN NOWHERE ASSESSEE HAS ALLEGED THAT ORIGINAL ASSESSMENT ORDER WAS PASSED U/S.143(3) SO AS TO ALLEGE THAT PROPER APPROVAL WAS NOT TAKEN FROM CIT(A) OR CHIEF CIT(A). EVEN IN THE GROUND OF APPEAL FILED BEFORE THE CIT(A) NOWHERE ASSESSEE HAS TA KEN THIS GROUND. 7. HOWEVER, IT IS A LEGAL GROUND, THEREFORE, THERE IS NO HESITATION IN ACCEPTING THE SAME. SINCE FACTS ARE NOT CLEAR FROM THE RECORD AND THERE IS CONTRADICTORY FINDING BOTH BY AO AND CIT(A) AS AGAINST WHAT IS STATED BY THE AR BEFORE ME, TH EREFORE IN THE FITNESS OF THINGS, I RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR VERIFYING THE FACTS AND FOR DECIDING THE ISSUE IN TERMS OF MY ABOVE OBSERVATION. I DIRECT ACCORDINGLY. 8. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PUR POSE. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 12 / 02 /201 8 SD/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 12 / 02 /201 8 KARUNA SR. PS ITA NO. 6008/MUM/2017 M/S. ADINATH METALS 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//