PETRON CIVIL ENGINEERING P. LTD, MUMBAI V. ACIT 10(2), MUMBAI

ITA 6510/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70809 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 07-08-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 26-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARESH JOHRI
• Assessee Lawyers: VIJAY MEHTA
• Keywords: Reassessment proceedings
• Section: 147; 148; 143(3)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - C BENCH. . . , , BEFORE S/SH. B.R. MITTAL, JUDICIAL MEMBER & RA JENDRA, ACCOUNTANT MEMBER ./ ITA NO.6510/MUM/2011, ! ! ! ! ' ' ' ' / ASSESSMENT YEAR-2003-04 PETRON CIVIL ENGINEERING PVT. LTD. 6 TH FLOOR, SWASTIK CHAMBER, SION TROMBAY ROAD, CHEMBUR, MUMBAI- 400071 VS. ACIT 10(2) MUMBAI. PAN: AACP4775E ( #$ / APPELLANT ) ( %&#$ / RESPONDENT ) #$ #$ #$ #$ ' ' ' ' / APPELLANT BY : SHRI VIJAY MEHTA %&#$ ( ' / RESPONDENT BY : SHRI PARESH JOHRI, DR ! ! ! ! ( (( ( )* )* )* )* / DATE OF HEARING : 07-08-2013 +,' ( )* / DATE OF PRONOUNCEMENT : 14-08-2013 ! ! ! ! , 1961 ( (( ( 254(1) )-) )-) )-) )-) . . . . ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M. FOLLOWING GROUNDS OF APPEAL HAVE BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 06.07.2011 OF THE CIT(A)-22, MUMBAI: 1. THE LEARNED CIT (APPEALS) HAS ERRED IN NEITHER C ONSIDERING NOR DECIDING GROUND NO. 2 RAISED BEFORE HIM. HE SHOULD HAVE HELD THAT THE REASSESSMENT U/S1 47 R.W.S. 143(3) WAS ILLEGAL AND INVALID SINCE THE LEARNED AO HAD PASSED THERE ASSESSMENT ORDER WITHOU T FIRST PASSING A SPEAKING ORDER ON THE OBJECTIONS RAISED BEFORE HIM OBJECTING TO THE REASSESSMENT PRO CEEDINGS. 2. THE LEARNED CIT(APPEALS) WAS NOT JUSTIFIED IN UP HOLDING THE VALIDITY OF THE REASSESSMENT PROCEEDING S AS ALSO THE REASSESSMENT ORDER PASSED THEREIN. THE REASONS GIVEN BY HIM IN THIS REGARD ARE INCORRECT A ND UNWARRANTED. HE SHOULD HAVE HELD THAT THE INITIATIO N OF THE REASSESSMENT PROCEEDINGS AS ALSO THE REASSESSMENT ORDER PASSED THEREIN WERE ILLEGAL AND INVALID. 3. THE LEARNED CIT(APPEALS) WAS NOT JUSTIFIED IN ST ATING THAT GROUND NOS. 3 AND 4 RAISED BEFORE HIM ON THE MERITS OF THE DISALLOWANCE OF THE DEDUCTION U/S 801A WERE NOT PRESSED. IT HAD BEEN CLEARLY UNDERSTOOD AND AGREED BETWEEN THE LEARNED CIT(APPEA LS) AND THE AUTHORISED REPRESENTATIVE OF THE APPELLANT THAT THE MERITS WERE TO BE GONE INTO ONLY IF THE GROUNDS REGARDING THE VALIDITY OF THE REASSESSMENT PROCEEDINGS WERE TO BE DECIDED AGAINST THE APPELLANT. 4. THE LEARNED CIT(APPEALS) SHOULD HAVE HELD THAT T HE DEDUCTION U/S 801A OF RS. 4,45,36,843/- WAS ALLOWABLE TO THE APPELLANT.. 5. THE LEARNED CIT(APPEALS) SHOULD HAVE HELD THAT W HILE COMPUTING THE DEDUCTION U/S 801A ALLOWABLE FOR THIS YEAR, THE LOSS OF RS. 1,42,25,191/- FOR TH E AY 2002-03 WAS NOT TO BE REDUCED. THE APPELLANT CRAVES LEAVE TO ADD TO, TO ALTER OR TO AMEND THE ABOVE GROUNDS OF APPEAL. 2. IN THIS CASE, ORIGINAL ASSESSMENT WAS COMPLETED ON 10.01.2006 U/S 143(3) OF THE ACT DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS. 2.28 CRORES. ASSESSMENT WAS FINALISED ON 10.01.2006. ON VERIFICATION OF THE RECORDS,ASSESSIN G OFFICER (AO) FOUND THAT ASSESSEE WAS ENGAGED IN THE BUSINESS OF CARRYING OUT CONTRACT BA SIS AND NOT ON BOT/BOOT/BOLT BASIS AND 2 ITA NO.6510/MUM/2011,(AY-2003-04) PETRON CIVIL ENGI NEERING PVT. LTD. THAT IT WAS NOT ELIGIBLE FOR CLAIMING DEDUCTION U/S 80IA OF THE ACT.HE WAS OF THE OPINION THAT ASSESSEES INCOME HAS ESCAPED ASSESSMENT. THEREFORE , HE ISSUED A NOTICE U/S.148 OF THE ACT ON 28.03.2008 WHICH WAS SERVED ON THE ASSESSEE ON 31.0 3.2008. ASSESSMENT WAS FINALISED BY THE AO ON 14.12.2009 U/S 143(3) R.W. SECTION 147 OF THE AC T AT RS. 6.74 CRORES. 2.1. ASSESEE PREFERRED AN APPEAL BEFORE THE FIRST APPELL ATE AUTHORITY(FAA).THE FIRST GROUND OF APPEAL FILED BEFORE THE FAA WAS ABOUT JUSTIFICATION OF REOPENING OF THE ASSESSMENT. ASSESSEE SUBMITTED THAT ORDER WAS PASSED WITHOUT COMPLYING W ITH THE PROVISIONS OF THE ACT AND WAS NOT IN ACCORDANCE WITH THE DECISIONS OF THE HONBLE SUPREM E COURT AND THE JURISDICTIONAL HIGH COURT. WHILE PASSING THE ORDER, FAA DEALT WITH THE SUBMISS IONS MADE BY THE ASSESSEE AND HE HELD THAT AO WAS JUSTIFIED IN REOPENING THE ASSESSMENT U/S 14 7 OF THE ACT. 2.2 . BEFORE US, AUTHORISED REPRESENTATIVE(AR) OF THE A SSESSEE SUBMITTED THAT VIDE ITS LETTER DATED 27.10.2008 ASSESSEE HAD OBJECTED TO REOPENING OF AS SESSMENT, THAT AO HAD NOT DEALT WITH THE OBJECTIONS RAISED BY THE ASSESSEE COMPANY, THAT HON BLE SUPREME COURT HAD IN THE CASE OF GKN DRIVE SHAFTS[INDIA] LTD.(259 ITR 19 ) HAD LAID DOWN PROCEDURE WITH REGARD TO THE REOPENIN G OF THE ASSESSMENTS, THAT THE AO HAD NOT FOLLOWED THE SAID PROCEDURE, THAT REASSESSMENT WAS IMPROPER AND BAD IN LAW, THAT FAA HAD NOT DEALT WITH THE JUR ISDICTIONAL ISSUE. HE RELIED UPON THE CASES OF GENERAL MOTORS INDIA PVT. LTD. (344 ITR 244) DELIVE RED BY THE HONBLE HIGH COURT OF GUJARAT. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDE R OF THE AUTHORIZED REPRESENTATIVE(AR) AND FAA 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT ASSESSEE HAS RAISED OBJECTION BEFORE THE AO, AFTER RECEIVING THE NOTICE ISSUED U/S 148 OF THE ACT. IT WAS THE DUTY OF THE AO, AS DIRECTED BY THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVE SHAFTS[INDIA] LTD.(SUPRA) TO DISPOSE OFF THE OBJECTIONS RAISED BY THE ASSESSEE BEFORE FINALISING THE ASSESSMENT. WE FIND THAT ASSESSMENT ORDER IS TOTALLY SILENT ABO UT THE OBJECTIONS RAISED BY THE ASSESSEE. IN THE GKN DRIVE SHAFTS[INDIA] LTD. HONBLE APEX COURT HAS HELD AS UNDER: WHEN A NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961, IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTICEE IS TO FILE THE RET URN AND, IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING THE NOTICES. THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF REASONS, THE NOTICEE IS ENTITLE D TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF TH E SAME BY PASSING A SPEAKING ORDER. WE FIND THAT IN THE CASE UNDER CONSIDERATION AO HAS FOLLOWED THE PROPER PROCEDURE.BY NOT FOLLOWING THE PROCEDURE LAID DOWN BY THE HONBLE SU PREME COURT, AO HAS VIOLATED THE INSTRUCTIONS OF THE HONBLE APEX COURT. AOS ARE SUP POSED TO KNOW THE LAW LAID DOWN/EXPLAINED BY THE HONBLE SUPREME COURT AND TO FOLLOW IT IN LA W AND SPIRIT. 2.4. IN OUR OPINION, THEREFORE, IN THE INTEREST OF JUST ICE MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE AO TO DEAL WITH THE OBJECTIONS RAISED BY THE AS SESSEE VIDE ITS LETTER DATED 27.10.2008 (PAGES 36 AND 37 OF THE PAPER BOOK). HE SHOULD AFFORD A REASO NABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND DECIDE THAT THE ISSUE AS PER LAW. AS A RESULT,APPEAL FILED BY THE ASSE SSEE IS ALLOWED FOR STATISTICAL PURPOSES. / )0 / )0 / )0 / )0 !/) !/) !/) !/) 1 1 1 1 2 2 2 2 ( (( ( - -- - 3( 567 8) 3( 567 8) 3( 567 8) 3( 567 8) ( (( ( ) ) ) ) 9: 9:9: 9: . ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUGUST,2013 . . ( +,' ; > > > . . B.R.MITTAL ) ( / RAJENDRA ) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI,