Motif India Infotech Pvt.Ltd., Ahmedabad V. The Income tax Officer,Ward-4(4), Ahmedabad

ITA 669/AHD/2009

• Counselvise Citation: 66920514 RSA 2009
• Duration Of Justice: 2 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 02-03-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANIL R SHAH
• Keywords: Opportunity of being heard; Deemed export; Revised return; Reassessment proceedings
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, C BENCH, AHMEDABAD BEFORE SHRI D.K.TYAGI, JUDICIAL MEMBER AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO.669 / AHD/2009 (ASSESSMENT YEAR 2004-05) MOTIF INDIA INFOTECH PVT. LTD., 502, WALL STREET 7, NEAR GUJARAT COLLEGE, AHMEDABAD VS. ITO, WARD 4(4), AHMEDABAD PAN/GIR NO. : AACCM1005A (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI ANIL R. SHAH, AR RESPONDENT BY: SHRI VINOD TANWANI, SR. DR DATE OF HEARING: 12.12.2011 DATE OF PRONOUNCEMENT: 19.01.2012 O R D E R PER SHRI A. K. GARODIA, AM:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT (A) VIII, AHMEDABAD DATED 15.10.2008 FOR THE ASSESS MENT YEAR 2004-05. THE GROUNDS NO. 1, 2 & 3 ARE REGARDING OBJECTION AG AINST VALIDITY OF REASSESSMENT PROCEEDINGS AND HENCE, THESE GROUNDS A RE DECIDED TOGETHER. THESE GROUNDS NO. 1, 2 & 3 ARE AS UNDER: THE COMMISSIONER OF INCOME TAX (APPEALS)-VIII, AHM EDABAD (HEREINAFTER REFERRED TO AS THE CIT (A) HAS ERRED B OTH ON FACTS AND IN LAW IN PASSING ORDER ON THE FOLLOWING AMONGST TH E OTHER GROUNDS. 1. THE CIT (A) HAS ERRED IN CONFIRMING THE REOPENIN G OF THE ASSESSMENT PROCEEDINGS U/S.147. IT IS SUBMITTED THA T SINCE THE REOPENING PROCEEDINGS ARE BEYOND THE LIMITATION OF TIME, SINCE THE I.T.A.NO.669 /AHD/2009 2 NOTICE AS WELL AS THE PROCEEDINGS SUFFER FROM INHER ENT TECHNICAL DEFECTS WHICH GO TO THE ROOT OF THE PROCEEDINGS MAK ING THEM VOID. 2. THE ASSESSING OFFICER HAS NOT RECORDED SATISFACT ION ABOUT THE INCOME ESCAPING ASSESSMENT BASED UPON/CORRELATE D TO THE ADDITIONAL INFORMATION WHICH WAS NOT THERE ON THE R ECORDS AT THE TIME OF PASSING ORIGINAL ASSESSMENT ORDER. 3. IT IS FURTHER SUBMITTED THAT SINCE ALL FACTS WER E ON RECORD AND THE FILE OF ASSESSING OFFICER THERE IS ONLY A CHANG E OF OPINION ON THE PART OF THE ASSESSING OFFICER AND THEREFORE, TH E ASSESSMENT PROCEEDINGS U/S.147 BE CANCELLED. 2. THE FACTS REGARDING REOPENING ARE THAT THE ASSES SEE HAS FILED RETURN OF INCOME FOR THIS YEAR ON 19.08.2004 DECLARING TOT AL INCOME OF RS.17,01,512/-. THEREAFTER, THE ASSESSEE HAS FILED A REVISED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. NIL ON 18.03 .2005. THEREAFTER, THE A.O. ISSUED NOTICE U/S 148 ON 02.08.2006 WHICH WAS DULY SERVED ON THE ASSESSEE ON 03.08.2006 AFTER RECORDING THE REASONS FOR REOPENING OF THE ASSESSMENT. IT IS ALSO NOTED BY THE A.O. IN THE AS SESSMENT ORDER THAT THE COPY OF REASONS WAS ALSO GIVEN TO THE ASSESSEE ON 2 1.08.2006. HE FURTHER NOTED THAT HE ASSESSEE HAS CLAIMED 100% DEDUCTION U /S 10A OF THE INCOME TAX ACT, 1961 ON EXPORT INCOME OF RS.1,70,15 ,124/- BUT ON VERIFICATION OF THE P & L ACCOUNT, IT WAS FOUND THA T FOLLOWING ITEMS HAD ALSO BEEN INCLUDED FOR RECKONING THE AMOUNT OF INCO ME EXEMPT FROM TAX U/S 10A:- (A) INTEREST - RS.2,44,780/-, (B) EXPORT REVENUE FUND OF GOVT. OF GUJARAT - RS.17,60,881/- AND (C) INTERNET CONNECTIV ITY FUND OF GOVT. OF GUJARAT RS.1,82,200/-. THE A.O. COMPLETED THE RE ASSESSMENT ON 07.12.2007 AND ASSESSED THE INCOME AT RS.21,87,861/ - AS AGAINST THE NIL INCOME AS PER THE REVISED RETURN OF INCOME FILED BY THE ASSESSEE. THEREAFTER, BEFORE LD. CIT(A), THE ASSESSEE RAISED OBJECTION REGARDING VALIDITY OF REASSESSMENT PROCEEDINGS BUT THIS OBJEC TION WAS REJECTED BY I.T.A.NO.669 /AHD/2009 3 THE LD. CIT(A) AND NOW, THE ASSESSEE HAS RAISED THI S OBJECTION AGAIN BEFORE US IN THIS APPEAL. 3. IT WAS SUBMITTED BY THE LD. A.R. THAT OBJECTION AGAINST VALIDITY OF REASSESSMENT PROCEEDINGS WERE RAISED BY THE ASSESSE E BEFORE THE A.O. ALSO AS PER LETTER DATED 20.07.2007, COPY OF WHICH IS AVAILABLE ON PAGES 8- 13 OF THE PAPER BOOK BUT THE A.O. HAS REJECTED THES E ARGUMENTS ON THIS BASIS THAT SINCE THE REOPENING IS WITHIN THE TIME P RESCRIBED UNDER THE ACT, THE SAME IS VALID. IT IS SUBMITTED THAT THERE IS N O DECISION OF THE A.O. ON SPECIFIC OBJECTIONS RAISED BY THE ASSESSEE IN THE L ETTER DATED 20.07.2007. IT IS ALSO SUBMITTED THAT IN THE REASONS RECORDED B Y THE A.O., ALLEGATION IS THAT EXPORT PROCEEDS WERE NOT RECEIVED IN FOREIGN C URRENCY BUT ADDITION IS MADE ON THIS BASIS THAT IT IS NOT DEEMED EXPORT AND HENCE, FOR THIS REASON ALSO, THE REOPENING IS NOT VALID AND IN SUPPORT OF THIS CONTENTION, RELIANCE WAS PLACED ON THE JUDGEMENT OF HONBLE APEX COURT R ENDERED IN THE CASE OF CIT VS SUN ENGINEERING WORKS P. LTD. AS REPORTED IN 198 ITR 297 (S.C.). 4. AS AGAINST THIS, THE LD. D.R. SUPPORTED THE ORDE RS OF AUTHORITIES BELOW AND RELIANCE WAS PLACED BY HIM ON ANOTHER JUD GMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF RAJESH JHAVERI A S REPORTED IN 291 ITR 500 (S.C.). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE JUDGEMENTS CITED BY BOTH THE SIDES. WE ALSO FIND T HAT IN CONNECTION WITH THE OBJECTION OF THE ASSESSEE REGARDING VALIDITY OF REASSESSMENT PROCEEDINGS, THE JUDGMENT OF HONBLE APEX COURT REN DERED IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD., VS ITO & OTHERS AS RE PORTED IN 259 ITR 19 (S.C.). IS ALSO VERY MUCH RELEVANT. FIRST, WE CONSIDER THE APPLICABILITY OF THIS JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF GKN I.T.A.NO.669 /AHD/2009 4 DRIVESHAFTS (INDIA) P. LTD. (SUPRA). IN THAT CASE, IT WAS HELD BY THE HONBLE APEX COURT THAT WHEN NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 IS ISSUED, THE PROPER COURSE OF ACTION OF THE NOTICEE IS TO FILE THE RETURN AND, IF HE SO DESIRES, TO SEEK REASONS FOR I SSUING THE NOTICES. THE A.O. IS BOUND TO FURNISH REASON WITHIN A REASONABLE TIME. ON RECEIPT OF REASONS, THE NOTICEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE A.O. IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. IN THE PRESENT CASE, REASON WERE FURNISHED BY THE A.O. TO THE ASSESSEE AND THE OBJECTION WAS ALSO RAISED BY THE ASSESSEE BEFOR E THE A.O. BUT THESE OBJECTIONS WERE NOT PROPERLY DISPOSED OFF BY THE A. O. BY PASSING A SPEAKING ORDER AND HE HAS SIMPLY REJECTED THE OBJEC TIONS ON THIS BASIS THAT AMENDED PROVISIONS OF SECTION 147/148 PROVIDES AMPL E POWERS TO THE A.O. TO INITIATE ASSESSMENT PROCEEDINGS WHEN THE A. O. IS KNOWING THAT THE INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT . AS PER LETTER DATED 20.07.2007, SUBMITTED BY THE ASSESSEE BEFORE THE A. O. REGARDING OBJECTIONS AGAINST REOPENING, VARIOUS SPECIFIC OBJE CTIONS WERE RAISED BY THE ASSESSEE BUT NO SPEAKING ORDER HAD BEEN PASSED BY THE A.O. REGARDING THESE SPECIFIC OBJECTIONS OF THE ASSESSEE AND HENCE , WE FEEL THAT THE ORDER PASSED BY THE A.O. BY DISPOSING OF THE OBJECTION OF THE ASSESSEE IS NOT A SPEAKING ORDER AS PER THIS JUDGMENT OF HONBLE APEX COURT AND HENCE, THE ISSUE SHOULD GO BACK TO THE FILE OF THE A.O. FO R A FRESH DECISION AND HE SHOULD PASS SPEAKING ORDER REGARDING VARIOUS OBJECT IONS RAISED BY THE ASSESSEE IN CONNECTION WITH VALIDITY OF REASSESSMEN T PROCEEDINGS AND IF IT IS FOUND THAT THOSE OBJECTIONS ARE NOT VALID THEN, HE SHOULD PROCEED TO FRAME THE REASSESSMENT ORDER AFRESH AFTER PROVIDIN G ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. HENCE, WE SET ASID E THE ORDER OF LD. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE FILE OF THE A.O. FOR I.T.A.NO.669 /AHD/2009 5 A FRESH DECISION AS PER ABOVE DISCUSSION, AFTER PRO VIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN VIEW OF OUR ABOVE DECISION IN THE ABOVE PARA, OTHER GROUNDS RAISED BY THE ASSESSEE DO NOT CALL FOR ANY ADJUDICA TION AT THIS STAGE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. 8. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (D.K.TYAGI) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 06.01.2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06.01.2012.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 19/01 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S. 23/01 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 23/01/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..