ACIT 1(1), MUMBAI V. BLUE STAR LTD, MUMBAI

ITA 6213/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88643 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-02-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 08-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA YADAV
• Assessee Lawyers: FIROZ ANDHIYARJINA
• Keywords: Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUM BAI , , BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM ./ I.T.A. NO. 6213/MUM/2011 ( / ASSESSMENT YEAR: 2005-06) ASST. CIT-1(1) ROOM NO. 579, AAYAKAR BHAVAN, MUMBAI-400 020 / VS. BLUE STAR LTD. KASTURI BUILDING, MOHAN T. ADVANI CHOWK, J. TATA ROAD, MUMBAI 400 020 # ./$ ./PAN/GIR NO. AAACB 4487 D ( #% /APPELLANT ) : ( &'#% / RESPONDENT ) #% ( ) / APPELLANT BY : SHRI AKHILENDRA YADAV &'#% ( ) / RESPONDENT BY : SHRI FIROZ ANDHIYARJINA & SHRI LAXMIKANT KOTHARI *+ , ( - / DATE OF HEARING : 19.02.2015 . /0 ( - / DATE OF PRONOUNCEMENT : 18 .03.2015 / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE REVENUE DIRECTED AGAINST T HE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-I, MUMBAI (CIT(A) FOR SHO RT) DATED 20.06.2011, ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S.143 (3)/147 OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A. Y.) 2005-06 VIDE ORDER DATED 29.12.2010. 2. THE PRINCIPAL ISSUE ARISING IN THE INSTANT CASE IS THE MAINTAINABILITY OR OTHERWISE IN LAW OF THE ASSESSMENT PROCEEDINGS INITIATED VIDE NO TICE U/S.148 DATED 30.03.2010; THE LD. 2 ITA NO. 6213/MUM/2011 (A.Y. 2005-06) ASST. CIT VS. BLUE STAR LTD. CIT(A) HAVING QUASHED THE SAID PROCEEDINGS ON THE B ASIS THAT THE SAID NOTICE IS BAD IN LAW. CASES OF THE RESPECTIVE PARTIES 3. THE ASSESSEES CASE, WHICH FOUND ACCEPTANCE BY T HE LD. CIT(A), IS THAT HE IMPUGNED NOTICE U/S.148 CANNOT BE CONSIDERED AS VAL ID FOR WANT OF SATISFACTION OF THE CONDITION OF SECTION 148(2) IN-AS-MUCH AS THE REASO N/S FOR ITS ISSUE WERE RECORDED ON 31.03.2010 (COPY ON RECORD). CLEARLY, THEREFORE, T HE SAME CANNOT FORM THE BASIS FOR THE ISSUE OF NOTICE ON 30.03.2010. THE REVENUE, ON THE OTHER HAND, CONTENDS THAT THE SAID REASON/S, WHICH IS PER A TYPED WRITTEN DOCUMENT, WE RE IN FACT DICTATED BY THE ASSESSING OFFICER (A.O.) TO HIS STENOGRAPHER ON 30.03.2010, T HOUGH ACTUALLY TYPED AND SIGNED ON 31.03.2010. FURTHER, EVEN CONSIDERING THE NOTICE TO BE DATED 31.03.2010, THE SAME WOULD BE IN TIME, I.E., WITHIN FOUR YEARS OF THE END OF T HE RELEVANT ASSESSMENT YEAR AND, BESIDES, NOT VITIATED FOR HAVING BEEN PURPORTEDLY ISSUED WIT HOUT RECORDING THE REASONS FOR THE SAME. 4. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE ASSESSMENT PROCEEDINGS IN THE INSTANT CASE WERE INITIATED VIDE NOTICE U/S.148 DATED 30.03.2010. THIS IS BORNE OUT OF THE FACT OF NOT ONLY THE NOTICE (COPY ON RECORD) BEING DATED 30.03.2010, BUT ALSO THE SAID DATE SUBS CRIBED THERETO BY THE A.O. IN HIS HAND BELOW HIS SIGNATURE THEREON, SIGNIFYING THAT THE SA ID NOTICE WAS NOT ONLY PROCESSED, BUT ALSO SIGNED ON THAT DATED (I.E., 30.03.2010). THE S AID NOTICE, THUS, IRRESPECTIVE OF THE DATE WHEN THE STEPS FOR ITS ISSUE MAY HAVE BEEN INITIATE D, HAS BEEN ISSUED ONLY ON 30.03.2010. LIKEWISE, IRRESPECTIVE OF THE DATE WHEN THE REASON /S INFORMING THE A.O.S BELIEF FOR THE ISSUE OF THE SAID NOTICE MAY HAVE COME TO HIS NOTIC E OR BELIEF AS TO ESCAPEMENT OF INCOME IN ITS RESPECT FORMED BY HIM, WHICH MAY WELL BE PRI OR TO 31.03.2010, THEIR RECORDING IS COMPLETE ON BEING SIGNED BY HIM ON 31.03.2010, I.E. , THE DATE SUBSCRIBED TO THE SHEET RECORDING THE SAME. THIS IS WHY AN AFFIDAVIT BY THE A.O. TO THE EFFECT THAT THE REASON/S WERE IN FACT DICTATED ON 30.03.2010, SOUGHT TO BE P LACED ON RECORD BY THE LD. DEPARTMENTAL REPRESENTATIVE (DR), WAS CONSIDERED IR RELEVANT AND, ACCORDINGLY, DENIED 3 ITA NO. 6213/MUM/2011 (A.Y. 2005-06) ASST. CIT VS. BLUE STAR LTD. PERMISSION BY THE BENCH DURING HEARING. THE SAME RATHER PROVES THE ASSESSEES CASE AGAINST THE REVENUES ACTION . IT IS ONLY UPON AFFIXING HIS SIGNATURE ON THE SAI D SHEET OF TYPED PAPER THAT RENDERS IT AS A VALID DOCUMENT IN LAW. FOR ALL WE KNOW, THE A.O. MAY HAVE BEEN IN POSSESSION OF THE RELEVANT INFORMATION OR THE MATERIAL, AND MAY THUS HAVE HAD VALID GROUNDS TO INFER ESCAPEMENT OF INCOME, FO RMING HIS REASON/S TO BELIEVE, I.E., IN HIS MIND, FOR LONG, BUT IT IS ONLY UPON AFFIXING HI S SIGNATURE THERETO, RECORDED IN WRITING, THAT THE PROCESS OF RECORDING OF REASONS BECOMES CO MPLETE, AND COULD BE RECOGNIZED AS SUCH IN LAW, IN SATISFACTION OF THE MANDATE OF SECT ION 148(2). THE LAW, PER SECTION 148(2), DOES NOT STIPULATE A PROCEDURAL REQUIREMENT OF SATI SFACTION BY THE A.O. (AS TO ESCAPEMENT OF INCOME), BUT THAT OF RECORDING OF THE REASON/S T O BELIEVE, AND BEFORE THE ISSUE OF NOTICE U/S. 148(1). AGAIN, THE ASSUMPTION OF JURISDICTION FOR ASSESSMENT U/S.147 IS BY ISSUE OF NOTICE U/S.148, AND NOT ITS SERVICE ( R. K. UPADHYAYA VS. SHANABHAI P. PATEL [1987] 166 ITR 163 (SC)) WHICH IN THE PRESENT CASE IS ON 31.03 .2010. THE ASSUMPTION OF JURISDICTION IS THUS ALSO NOT DEPENDENT ON ITS SUBSEQUENT SERVIC E. A VALID SERVICE, THOUGH MANDATORY FOR A VALID ASSESSMENT, IS YET PROCEDURAL, NOT DIST URBING THE INITIATION OF OTHERWISE LEGALLY VALID PROCEEDINGS IN LAW, I.E., WHERE THE JURISDICT ION FOR ASSESSMENT STANDS VALIDLY ASSUMED, WITH THE LAW BEING AMENDED SINCE, SO THAT W.E.F. 01/4/2010 SERVICE COULD ONLY BE AGITATED WHERE CHALLENGED IN THE ASSESSMENT PROC EEDINGS. WHAT HAS BEEN SERVED ON 31.03.2010, A MATTER SUBSEQUENT, IS NOT A LEGALLY V ALID NOTICE, SO THAT ITS SERVICE IS OF NO CONSEQUENCE IN LAW. THE SAME, I.E., A VALID ASSUMPT ION OF JURISDICTION U/S. 147, IS, ACCORDINGLY, MISSING IN THE PRESENT CASE. TRUE, THE NOTICE U/S. 148, IF SIGNED BY THE A.O. ON 31.03.2010 INSTEAD OF 30.03.2010, I.E., A DAY LATER, WOULD HAVE CONFERRED VALIDITY TO ITS ISSUE AND, RESULTANTLY, TO THE REASSESSMENT PROCEEDINGS. THE SAME MAY THOUGH A PPEAR ODD IN-AS-MUCH AS A LATER ACTION, I.E., IN TIME, WOULD BE VALID, AS AGAINST T HE EARLIER ONE, WHICH IS NOT, YET WOULD NOT IN ANY MANNER, TO OUR MIND, BESTOW VALIDITY IN LAW TO THE NOTICE ISSUED WITHOUT ADHERING STRICTLY TO THE PROCEDURAL REQUIREMENTS OF THE PROV ISION. THAT IS, THE SAME CANNOT BE REGARDED AS AN IRREGULARITY, CONCERN AS TO IT DOES WITH THE DEFICIENCY IN THE VERY PROCESS OF ASSUMPTION OF JURISDICTION TO ASSESS (OR REASSESS). IT WAS OPEN FOR THE A.O. TO ISSUE A FRESH 4 ITA NO. 6213/MUM/2011 (A.Y. 2005-06) ASST. CIT VS. BLUE STAR LTD. NOTICE U/S. 148(1) ON 31.03.2010, THAT DATED 30.03. 2010 BEING BAD IN LAW AND, THUS, NOT VALID. THE REQUIREMENT, THOUGH PROCEDURAL, WHICH GE NERALLY RENDERS THE PROCEEDINGS AS IRREGULAR, SO THAT THEY WOULD NEED TO BE RESTORED T O THE STAGE AT WHICH THE SAME, I.E., THE SAID IRREGULARITY, OCCURRED ( GUDUTHUR BROS. VS. ITO [1960] 40 ITR 298 (SC)), IS STRICT IN- AS-MUCH AS IT CONCERNS A JURISDICTIONAL NOTICE. A C OMPARISON COULD BE MADE WITH THE TIME LIMITATION FOR THE ISSUE OF SUCH NOTICE OR FOR THE COMPLETION OF (SAY) ASSESSMENT PROCEEDINGS. THE REQUIREMENT, THOUGH PROCEDURAL, DI RECTLY IMPACTS THE VERY FOUNDATION OR EDIFICE ON WHICH THE LEGAL VALIDITY OF THE ENSUING PROCEEDINGS OR DOCUMENT RESTS. WE ARE CONSCIOUS THAT THE APEX COURT IN POORAN MAL VS. DIT [1974] 93 ITR 505 (SC) CLARIFIED THAT THE TEST OF ADMISSIBILITY O F EVIDENCE UNDER THE INDIAN JURISPRUDENCE LIES IN ITS RELEVANCE, SO THAT EVEN MATERIALS OR IN FORMATION FOUND DURING OR AS A RESULT OF AN ILLEGAL SEARCH COULD ALSO BE PUT TO USE OR RELIED O N IN FRAMING AN ASSESSMENT. WHY, EVEN INDEPENDENT OF THE SAID DECISION, AN ASSESSMENT COU LD ONLY BE ON THE STRENGTH OF THE MATERIALS AND, FURTHER, UPON DULY CONFRONTING THE S AME TO THE ASSESSEE, AND THE VALIDITY OF THE RELIANCE WOULD NOT BE IMPACTED ON THE PROCESS O R THE MANNER IN WHICH THE INFORMATION/MATERIAL HAS CAME IN THE POSSESSION OF THE REVENUE. SO, HOWEVER, IT IS THE VALIDITY OF THE ASSESSMENT PROCEEDINGS ITSELF THAT IS AT STAKE IN THE PRESENT CASE. THE PROCEEDINGS INITIATED WITHOUT A VALID NOTICE U/S. 1 48(1) CANNOT BE RECOGNIZED IN THE EYES OF THE LAW. 5. IN VIEW OF THE FOREGOING, WE DECLARE THE IMPUGNE D NOTICE U/S.148 AND, CONSEQUENTLY, THE ASSESSMENT PROCEEDINGS INITIATED THEREBY, AS BAD IN LAW. THE QUASHING OF THE ASSESSMENT IS CONSEQUENTLY UPHELD. WE DECIDE ACCORDINGLY. 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . 10 2 + ( 1 ( 34 ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 18 , 20 15 SD/- SD/- (AMIT SHUKLA) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER 5 ITA NO. 6213/MUM/2011 (A.Y. 2005-06) ASST. CIT VS. BLUE STAR LTD. , MUMBAI; 5* DATED :18 .03.2015 +.*../ ROSHANI , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. #% / THE APPELLANT 2. &'#% / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. 8+9 : &*;< , - ;<0 , , / DR, ITAT, MUMBAI 6. : => ? , / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , , / ITAT, MUMBAI