MANMOHAN EXIM P.LTD, MUMBAI V. ITO WD 6(3)(3), MUMBAI

ITA 6381/MUM/2013

• Counselvise Citation: 638119914 RSA 2013
• Duration Of Justice: 1 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 30-10-2013
• Court: TRIBUNAL
• Department Lawyers: M RAJAN
• Assessee Lawyers: VIMAL PUNMIYA
• Keywords: Opportunity of being heard; Difference of opinion; Change of opinion
• Section: 147; 148; 143(3); 80HHC

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI RAJENDRA , ACCOUNTATN MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER . / ITA NO .6381 / MUM./ 2013 ( / ASSESSMENT YEAR : 2004 05 ) M/S. MANMOHAN EXIM PVT. LTD. 8, CAMA INDUSTRIAL ESTATE SUN MILL COMPOUND LOWER PAREL, MUMBAI 400 013 PAN AAACM7272R .. / APPELLANT V/S INCOME TAX OFFICER WARD 6(3)(3), MUMBAI .... / RESPONDENT / ASSESSEE BY : SHRI VIMAL PUNMIYA / REVENUE BY : SHRI M. RAJAN / DATE OF HEARING 2 8 .09.2015 / DATE OF ORDER 09. 10. 2015 / ORDER , / PER SAKTIJIT DEY, J.M. THE INSTANT APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 1 ST AUGUST 2013, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 8, MUMB AI, FOR THE ASSESSMENT YEAR 2004 05. THE ASSESSEE, IN TOTAL, HAS RAISED TEN GROUNDS OF APPEAL. M/S. MANMOHAN EXIM PVT. LTD. 2 2. GROUNDS NO.1 TO 5, ARE QUESTIONING THE VALIDITY OF RE OPENING OF ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). AT THE OUTSET, WE PROPOSE TO DEAL WITH THE LEGAL AND JURISDICTIONAL ISSUE S RAISED IN THESE GROUNDS. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE , A PRIVATE LIMITED COMPANY FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON 21 ST OCTOBER 2004, DECLARING TOTAL INCOME OF ` 3,04,488. THE ASSESSMENT IN ASSESSEES CASE WAS COMPLETED ORIGINALLY UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 28 TH DECEMBER 2005, DETERMINING THE INCOME AT ` 3,14,864. SUBSEQUENTLY, ON THE BASIS OF OBJECTION RAISED BY THE INTERNAL AUDIT PARTY TH AT DEDUCTION UNDER SECTION 80HHC OF THE ACT HAS BEEN ALLOWED IN EXCESS TO THE ASSESSEE WHICH HAS RESULTED IN ESCAPEMENT OF ASSESSMENT, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT BY ISSUING NOTICES UNDER SECTION 148 OF THE A CT TO THE ASSESSEE ON 25 TH MARCH 2009. THE ASSESSEE, AFTER CALLING FOR THE REASONS OF RE OPENING THE ASSESSMENT THOUGH OBJECTED TO THE INITIATION OF PROCEEDINGS UNDER SECTION 147 BY ALLEGING CHANGE OF OPINION BUT THE ASSESSING OFFICER REJECTING THE OBJECTI ONS OF THE ASSESSEE, PROCEEDED TO COMPLETE THE ASSESSMENT UNDER SECTION 143(3) R/W 147 OF THE ACT VIDE ORDER DATED 7 TH DECEMBER 2009, BY RESTRICTING THE DEDUCTION CLAIMED UNDER SECTION 80HHC TO ` 3,29,480, AS WELL AS MAKING A FURTHER ADDITION OF ` 5,30,060 , ON M/S. MANMOHAN EXIM PVT. LTD. 3 ACCOUNT OF ADVANCE WRITTEN OF WHICH RESULTED IN DETERMINATION OF TOTAL INCOME AT ` 11,19,290. BEING AGGRIEVED OF THE ASSESSMENT ORDER SO PASSED BY THE ASSESSING OFFICER, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY CHALLENGING TH E ASSESSMENT ORDER ON THE VALIDITY OF RE OPENING AS WELL AS ON THE MERITS OF ADDITIONS MADE. 4. AS FAR AS THE VALIDITY OF PROCEEDINGS INITIATED UNDER SECTION 147 OF THE ACT IS CONCERNED, THE LEARNED COMMISSIONER (APPEALS) DISMISSED THE GROUND RAISED BY OBSER VING THAT THE REASONS RECORDED BY THE ASSESSING OFFICER FOR RE OPENING THE ASSESSMENT ARE VALID. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, CHALLENGING THE AFORESAID FINDINGS OF THE FIRST APPELLATE AUTHORITY, SUBMITTED BEFORE US THAT ASSESSEE HAS CLAIMED DEDUC TION UNDER SECTION 80HHC, IN TERMS WITH THE STATUTORY PROVISIONS AND THE ASSESSING OFFICER WHILE COMP LE TING THE ASSESSMENT ORIGINALLY UNDER SECTION 143(3) OF THE ACT, HAS ALLOWED THE SAME AFTER PROPER VERIFICATION . T HE REFORE, RE OPENING OF ASSESSMENT ON SO ME SET OF FACTS AND MATERIAL ON RECORD WITHOUT ANY FURTHER NEW MATERIAL COMING INTO THE POSSESSION OF THE ASSESSING OFFICER AND MERELY RELYING UPON THE OBJECTION RAISED BY THE INTERNAL AUDIT PARTY IS NOTHING BUT RE OPENING OF ASSESSMENT ON A MERE CHANGE OF OPINION. IN THIS CONTEXT, THE LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO THE OBJECTIONS OF THE AUDIT PAR TY AT PAGE 75 OF THE PAPER BOOK AND REASONS FOR RE OPENING OF ASSESSMENT COMMUNICATED TO THE ASSESSEE M/S. MANMOHAN EXIM PVT. LTD. 4 AT PAGE 91 OF THE PAPER BOOK TO DRIVE HOME THE FACT THAT THE ASSESSING OFFICER HAS NOT INDEPENDENTLY APPLIED HIS MIND WHILE FORMING HIS BELIEF FOR RE OPENING OF ASSESSMENT. HE SUBMITTED , THOUGH, ALL THESE FACTS AND MATERIALS WERE BROUGHT ON RECORD BEFORE THE FIRST APPELLATE AUTHORITY BUT WITHOUT PROPER LY CONSIDERING THEM OR EVEN ALLOWING THE ASSESSEE A REASONABLE OPPORTUNITY TO EXPLAIN HIS CASE ON THIS ISSUE HAS REJECTED THE GROUND RAISED BY THE ASSESSEE IN A RATHER MECHANICAL AND PERFUNCTORY MANNER. HE, THEREFORE, SUBMITTED THAT THE ISSUE REQUIR ES RE C ONSIDERATION BY THE FIRST APPELLATE AUTHORITY. LEARNED DEPARTMENTAL REPRESENTATIVE, HOWEVER, RELIED UPON THE REASONING OF THE LEARNED COMMISSIONER (APPEALS). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. ON GO ING THROUGH THE OBJECTIONS RAISED BY THE INTERNAL AUDIT PARTY, REASONS FOR THE RE OPENING COMMUNICATED TO THE ASSESSEE, PRIMA FACIE IT APPEARS THAT THE ASSESSING OFFICER HAS RE OPENED THE ASSESSMENT MERELY ON THE BASIS OF OBJECTIONS RAISED BY THE AUDIT PAR TY. AS IT APPEARS, THE ASSESSING OFFICER HAS INITIATED ACTION UNDER SECTION 147 OF THE ACT BY RELYING UPON THE SAME SET OF FACTS AND MATERIAL WHICH ARE ALREADY AVAILABLE ON RECORD AND WERE CONSIDERED BY THE ASSESSING OFFICER WHILE COMP LETING ASSESSMENT UND ER SECTION 143(3) OF THE ACT ORIGINALLY. IT IS THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE BEFORE US THAT THOUGH ALL THESE FACTS WERE BROUGHT ON M/S. MANMOHAN EXIM PVT. LTD. 5 RECORD BEFORE THE LEARNED COMMISSIONER (APPEALS), WITHOUT CONSIDERING TH E SE MATERIALS OR EVEN AFFORD ING ADEQUATE OPPORTUNITY TO THE ASSESSEE TO ADVANCE HIS CASE ON THE ISSUE, THE LEARNED COMMISSIONER (APPEALS) HAS DISMISSED THE GROUND RAISED ON THE ISSUE. ON A PERUSAL OF THE ORDER PASSED BY THE FIRST APPELLATE AUTHORITY, WE FIND MERIT IN THE AFORESAID CO NTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. AS IT APPEARS, THE LEARNED COMMISSIONER (APPEALS) HAS NOT CONSIDERED THE ISSUE RELATING TO VALIDITY OF RE OPENING OBJECTIVELY AND WITH THE MERIT IT DESERVES. THE LEARNED COMMISSIONER (APPEALS) SHOULD HAVE D EALT WITH ASSESSEES ALLEGATION THAT THERE ARE NO FRESH MATERIAL BEFORE THE ASSESSING OFFICER FOR RE OPENING THE ASSESSMENT AND THE RE OPENING ON THE BASIS OF S A ME SET OF FACTS AND MATERIAL AVAILABLE ON RECORD AT THE TIME OF COMPLETION OF ORIGINAL ASSESSME NT AND MERELY AT THE INSTANCE OF AUDIT PARTY AMOUNTS TO CHANGE OF OPINION. AS THE LEARNED COMMISSIONER (APPEALS) HAS NOT DECIDED THE ISSUE ON PROPER APP RECIATION OF FACTS AND MATERIALS ON RECORD AND WITHOUT ADEQUATE OPPORTUNITY TO THE ASSESSEE TO REPRESENT HIS CASE ON THE ISSUE, WE ARE INCLINED TO RESTORE THIS ISSUE TO THE FILE OF THE LEARNED COMMISSIONER (APPEALS) FOR DECIDING AFRESH AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE ON THE ISSUE. ONLY IN THE EVENT, THE LEARNED COMMISSIONER (APPEALS) UPH OLDS THE VALIDITY OF RE OPENING OF ASSESSMENT AFTER MEETING THE OBJECTIONS OF THE ASSESSEE WITH PROPER M/S. MANMOHAN EXIM PVT. LTD. 6 REASONING, HE WILL DECIDE THE REMAINING ISSUES ON MERIT , IF WARRANTED . THUS, GROUNDS NO.1 TO 5, ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN VIEW OF OUR AFO RESAID DECISION, THE OTHER GROUNDS RAISED BY THE ASSESSEE ON MERITS OF THE ADDITION MADE ARE ALSO RESTORED TO THE FILE OF THE LEARNED COMMISSIONER (APPEALS) FOR ADJUDICATION ON MERIT IN CASE IT IS NECESSARY TO DO SO. 8. IN THE RESULT, ASSESSEES APPEAL STAND S PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT O N 09.10.2015 SD/ - RAJENDRA ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED : 09.10.2015 / COPY OF THE ORDER FORWARDED TO : (1) / THE ASSESSEE; (2) / THE REVENUE; (3) ( ) / THE CIT(A); (4) / THE CIT, MUMBAI CITY CONCERNED; (5) , , / THE DR, ITAT, MUMBAI; (6) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI