DDIT (E) 1(1), MUMBAI V. MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY (MMRDA), MUMBAI

ITA 6261/MUM/2011

• Counselvise Citation: 626119914 RSA 2011
• Duration Of Justice: 3 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-06-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 09-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY PUNGLIADR
• Keywords: Reopening of assessment; Revision of order; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.6261/MUM/2011 ASSESSMENT YEAR: 2003-04 ADIT(E)I,(1), R. NO.504, PIRAMAL CHAMBERS, 5 TH FLOOR, PAREL, MUMBAI-400012 / VS. M/S MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY (MMRDA), PLOT NO.C-14 & C-15, BANDRA KURLA COMPLEX, BANDRA(EAST), MUMBAI-400051 ( / REVENUE) ( !' # /ASSESSEE) P.A. NO. AAATM7106R / REVENUE BY SHRI SANJAY PUNGLIA-DR !' # / ASSESSEE BY SHRI RONAK DOSHI $ % & # ' / DATE OF HEARING : 29/06/2015 & # ' / DATE OF ORDER: 24/07/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 20/06/2011 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, M/S MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY (MMRDA), ITA NO.6261/MUM/2011 2 ON THE GROUND WHETHER THE LD. FIRST APPELLATE AUTHO RITY WAS RIGHT IN ANNULLING THE ASSESSMENT WHEN THE REAS ON FOR REOPENING HAS BEEN PROPERLY RECORDED BEFORE ISSUANC E OF NOTICE U/S 148 OF THE INCOME TAX ACT, 1961. 2. DURING HEARING OF THIS APPEAL, THE LD. DR, SHRI SANJAY PUNGALIA, DEFENDED THE CONCLUSION ARRIVED AT IN THE ASSESSMENT ORDER BY ADVANCING HIS ARGUMENTS WHICH A RE IDENTICAL TO THE GROUND RAISED. ON THE OTHER HAND, SHRI RONAK DOSHI, LD. COUNSEL FOR THE ASSESSEE, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BY PLAC ING RELIANCE UPON THE DECISIONS WHICH HAVE BEEN MENTION ED IN THE ORDER OF THE FIRST APPELLATE AUTHORITY. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE AUTHORITY WAS ESTABLIS HED UNDER THE STATUTE ENACTED BY THE GOVERNMENT OF MAHARASHTRA. THE ASSESSEE DECLARED NIL INCOME. THE ASSESSEE DECLARED ITS INCOME WITH THE HELP OF DOCUM ENTARY EVIDENCES. THE LD. ASSESSING OFFICER COMPLETED ASSE SSMENT ON 28/03/2006 UNDER SECTION 143(3) OF THE INCOME TA X ACT, 1961 (HEREINAFTER THE ACT) DETERMINING TOTAL INCOME AT RS.5,21,05,79,475/-. THE LD. ASSESSING OFFICER REO PENED THE ASSESSMENT U/S 147/148 OF THE ACT. THE TOTAL IN COME WAS DETERMINED AT RS.5,26,33,79,475/- WHICH INCLUDE S INTEREST RECEIVABLE ON ST DEPOSIT WITH PSU & GOM M/S MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY (MMRDA), ITA NO.6261/MUM/2011 3 AMOUNTING TO RS.4,46,00,000/- AND RS.2,82,00,000/- AS LEASE PREMIUM RECEIVABLE. 2.2. ON APPEAL, BEFORE THE LD. COMMISSIONER OF INC OME TAX (APPEALS), THE ASSESSEE CHALLENGED THE REOPENIN G OF ASSESSMENT ON THE GROUND THAT NOTICE U/S 148 WAS IS SUED BEYOND A PERIOD OF FOUR YEARS, THEREFORE, IT IS VOI D AB-INITIO . THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONSID ERED THE FACTS AND AFTER HAVING AN ELABORATE DISCUSSION WITH THE HELP OF JUDICIAL PRONOUNCEMENT CONCLUDED THAT REOPE NING OF ASSESSMENT, AFTER EXPIRY OF FOUR YEARS, WITHOUT POINTING OUT ANY DEFAULT ON THE PART OF THE ASSESSEE ANNULLE D THE ASSESSMENT. THE REVENUE IS AGGRIEVED AND IS IN APPE AL BEFORE THIS TRIBUNAL. 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORD ER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, REASO NS ASSIGNED FOR REOPENING THE ASSESSMENT U/S 147/148 O F THE ACT, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERI AL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RES PECTIVE COUNSEL, IF KEPT IN JUXTAPOSITION AND ANALYZED, WE FIND THAT THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 28/10/2004 AND THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 28/03/2006. THE LD. ASSESSING OFFICER REC ORDED THE REASONS. WE HAVE NOTED THE REASONS AND FOUND T HAT THE LD. ASSESSING OFFICER ON PERUSAL OF CASE RECORD AND BOOKS OF ACCOUNTS, FILED BY THE ASSESSEE, FOUND THA T THE AMOUNT OF RS.2.46 CRORES, RECEIVABLE AS PENAL INTER EST ON M/S MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY (MMRDA), ITA NO.6261/MUM/2011 4 SHORT TERM DEPOSITS KEPT WITH PSUS AND GOVT. OF MAHARASHTRA, WHICH IS NOT RECEIVED EVEN AFTER THE D UE DATE AND FURTHER THE ASSESSEE HAS NOT ACCOUNTED FOR LEAS E PREMIUM OF RS.2.8 CRORES RECEIVABLE FROM BSES CO. T HUS, THE AMOUNT OF RS.5.28 CRORES HAS ESCAPED FROM TAXAT ION. ACCORDINGLY, THE ASSESSMENT WAS REOPENED. HOWEVER, FACTS REMAINS THAT NOTICE U/S 148 OF THE ACT DATED 19/03/ 2010 WAS SERVED UPON THE ASSESSEE ON 23/03/2010. THE ASSESSEE OBJECTED TO THE NOTICE CLAIMING THAT THE S AME IS BARRED BY LIMITATION. WE NOTE THAT THE ASSESSEE MAD E THE TRUE DISCLOSURE OF MATERIAL FACTS AND EVEN THE REAS ONS RECORDED BY THE ASSESSING OFFICER ALSO SAYS THAT ON PERUSAL OF RECORD FILED BY THE ASSESSEE. THUS, ONE FACT IS CLEARLY OOZING OUT THAT NO NEW FACT CAME TO THE NOTICE OF T HE ASSESSING OFFICER AT LATER STAGE RATHER THE SAME AR E BORNE OUT OF THE FACTS ALREADY DISCLOSED BY THE ASSESSEE. THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN BHAVESH DEVELOPERS AND ORS. (229 CTR 160) SUPPORTS THE CASE OF THE ASSESSEE. REOPENING OF ASSESSMENT AFTER THE PRE SCRIBED PERIOD OF FOUR YEARS ITSELF RESTRAIN THE ASSESSING OFFICER TO REOPEN THE ORIGINAL ASSESSMENT MADE U/S 143(3) OF T HE ACT, MORE SPECIFICALLY, WHEN THE MATERIAL FACTS/DETAILS WERE ALREADY DISCLOSED/FILED BY THE ASSESSEE. THUS, THE DECISION FROM HONBLE MADRAS HIGH COURT IN CIT VS TNTD FINAN CE CORPORATION (212 CTR 53) COMES TO THE RESCUE OF THE ASSESSEE. IDENTICAL IS THE RATIO LAID DOWN BY HON BLE GUJARAT HIGH COURT IN NIKHIL K. KOTAK VS MAHES KUMA R (319 ITR 445)(GUJ.) AND FURTHER BY HONBLE JURISDIC TIONAL M/S MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY (MMRDA), ITA NO.6261/MUM/2011 5 HIGH COURT IN SUPREME TREVES P. LTD. VS DCIT (313 I TR 323) AND BY HONBLE DELHI HIGH COURT IN JAL HOTELS COMPANY LTD. VS ADIT (184 TAXMAN 1) AND LEGATO SYST EMS (I) PVT. LTD. VS DCIT (WP)(C) NO. 8922 & 8979/2007. THE HONBLE DELHI HIGH COURT IN CIT VS KELVINATOR OF IN DIA LTD. 256 ITR 1 (FB)(DEL.) WHICH WAS AFFIRMED BY HONBLE APEX COURT IN 320 ITR 561 (SC) HELD THAT SECTION 147 OF THE ACT DOES NOT POSTULATE CONFERMENT OF POWER UPON THE ASS ESSING OFFICER TO INITIATE REASSESSMENT PROCEEDINGS UPON M ERE CHANGE OF OPINION. THE HONBLE APEX COURT IN CIT V S FORAMER FRANCE (264 ITR 566) HELD THAT THE NOTICE O F REASSESSMENT WOULD BE ILLEGAL IF ISSUED AFTER THE P RESCRIBED LIMIT OF FOUR YEAR AFTER THE END OF THE ASSESSMENT YEAR, IF THE ORIGINAL ASSESSMENT WERE MADE U/S 143(3) OF THE ACT AND FURTHER ASSESSMENT CANNOT BE REOPENED MERE ON CHANGE OF OPINION. THE RATIO LAID DOWN IN ASIAN PAI NTS VS DCIT 308 ITR 195 AND ASTEROIDS TRADING & INVESTMENT PVT. LTD. VS DCIT 308 ITR 190, THE HONBLE BOMBAY HIGH C OURT, IDENTICALLY, DECIDED IN FAVOUR OF THE ASSESSEE. TH E HONBLE APEX COURT IN CIT VS KELVINATOR OF INDIA (SUPRA), DELIBERATED UPON THE ISSUE AND HELD THAT REOPENING OF ASSESSMENT ON SAME SET OF FACTS WILL AMOUNT OF CHAN GE OF OPINION WHICH IS NOT PERMISSIBLE, AND FURTHER IT AM OUNTS REVISION OF ORDER BY THE ASSESSING OFFICER WHICH IS NOT PERMISSIBLE UNDER THE ACT. TOTALITY OF FACTS, CLEAR LY INDICATES, THAT THE MATERIAL FACTS/DETAILS WERE DIS CLOSED BY THE ASSESSEE, THUS, THERE WAS NO REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT, THEREF ORE, M/S MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY (MMRDA), ITA NO.6261/MUM/2011 6 AFTER THE LAPS OF FOUR YEARS, WITHOUT POINTING OUT ANY DEFAULT, ON THE PART OF THE ASSESSEE, SUCH REOPENIN G IS NOT PERMISSIBLE UNDER THE ACT. WE ARE AWARE THAT EVEN AFTER INSERTION OF EXPLANATION 3 TO SECTION 147 BY THE FI NANCE NO.(2) ACT, 2009 WITH EFFECT FROM 01/04/1989, THE ASSESSING OFFICER HAVING WIDE POWERS BUT THE SAME A RE NOT UNBRIDLED ONE. BECAUSE, EVEN AFTER 01/04/1989, THE CONCEPT OF CHANGE OF OPINION HAS NOT BEEN REMOVED FROM THE STATUTE. WHEN THE PRIMARY FACTS, NECESSARY FOR ASSESSMENT, ARE FULLY AND TRULY DISCLOSED, ASSESSME NT CAN BE REOPENED MERELY ON THE BASIS OF CHANGE OF OPINION . ADMITTEDLY, THE PROCEEDINGS U/S 147 OF THE ACT ARE FOR THE BENEFIT OF THE REVENUE, STILL THE AIM OF THE SAME I S TO GATHER ESCAPE INCOME BUT THE FACT REMAINS SINCE THE ASSESS EE HAS DISCLOSED MATERIAL FACTS, THE POWERS OF THE ASSESSI NG OFFICER ARE NOT UNBRIDLED ONE, AS WAS HELD BY THE HONBLE A PEX COURT IN LAKHMANI MEWAL DAS 103 ITR 437 (SC) AND SH RI KRISHNA PVT. LTD. VS ITO 221 ITR 538 (SC). THE HON BLE PUNJAB & HARYANA IN ORIENTAL CARPET MANUFACTURING ( I) LTD. VS ITO 168 ITR 296 HELD THAT MATERIAL FACTS ME ANS PRIMARY FACTS ONLY. THUS, IN VIEW OF PROVISO TO SEC TION 147, NO ACTION CAN BE TAKEN U/S 147 BEYOND THE PERIOD OF FOUR YEARS IF THE CASE DOES NOT FALL WITHIN THE EXCEPTIO N OF THE PROVISO MENTIONED IN THE PROVISO ITSELF, NAMELY, IF THERE IS NO CASE OF FAILURE ON THE PART OF THE ASSESSEE TO D ISCLOSE FULLY AND TRULY ALL MATERIAL FACTS, WHICH ARE NECES SARY FOR ASSESSMENT FOR THE YEAR OF ASSESSMENT. THUS, WE FI ND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. FIRST APPELLATE M/S MUMBAI METROPOLITAN REGION DEVELOPMENT AUTHORITY (MMRDA), ITA NO.6261/MUM/2011 7 AUTHORITY, CONSEQUENTLY, WE DISMISS THE APPEAL OF T HE REVENUE. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 29/06/2015. SD/ - (RAJENDRA) S D/ - (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER $ % MUMBAI; ( DATED : 24/07/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. 0 0 $ 1# ( *+ ) / THE CIT, MUMBAI. 4. 0 0 $ 1# / CIT(A)- , MUMBAI 5. 34 .# , 0 *+' * 5 , $ % / DR, ITAT, MUMBAI 6. 6! 7 % / GUARD FILE. / BY ORDER, /3+# .# //TRUE COPY// / (DY./ASSTT. REGISTRAR) , $ % / ITAT, MUMBAI