Sun Pharmaceuticals Industries Ltd., Baroda V. The ACIT,Cent.Circle-1, Baroda

ITA 701/AHD/2016

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 9697 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 1999-2000
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Rectification of order; Commercial expediency; Reassessment proceedings
• Section: 143(3); 234B; 147; 148; 10; 154

Judgement Text

, CH CHCH CH IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD LOZJH LOZJH LOZJH LOZJH OLHE OLHE OLHE OLHE VGEN] YS[KK LNL; , VGEN] YS[KK LNL; , VGEN] YS[KK LNL; , VGEN] YS[KK LNL; ,OA OAOA OA EK/ EK/EK/ EK/KQFERK KQFERK KQFERK KQFERK JKW;] U; JKW;] U; JKW;] U; JKW;] U;KF KFKF KF;D LNL; ;D LNL; ;D LNL; ;D LNL; DS LE{KA DS LE{KA DS LE{KA DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SMT MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 701/AHD/2016 ( / ASSESSMENT YEAR : 1999-2000) SUN PHARMACEUTICAL INDUSTRIES LTD., SPARC, TANDALJA, BARODA 20. / VS. ACIT, CENTRAL CIRCLE 1, BARODA. ./ ./ PAN/GIR NO. : AADCS 3124 K ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S.N. SOPARKAR & PARIN SHAH, A.R. / RESPONDENT BY : SHRI MUDIT NAGPAL, SR. D.R. / DATE OF HEARING 10/07/2018 !'# / DATE OF PRONOUNCEMENT 18/09/2018 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 2, VADODARA [CIT(A) IN SHORT] VIDE APPEAL NO.CAB/(A)-2 /385/14-15 & CIT(A)-IV/149/BRD/CC-1/12-13 (OLD) DATED 01.12.2015 ARISING IN THE MATTER OF ASSESSMENT ORDER PASSED UNDER S.154 OF TH E INCOME TAX ACT, 1961 (HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATE D 28.03.2002 RELEVANT TO ASSESSMENT YEAR (AY) 1999-2000. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE A RE AS UNDER:- THE APPELLANT SUBMITS THE FOLLOWING GROUNDS, WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER. ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 2 - 1. THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS 'THE LEARNED CIT(A)'] IS BAD IN LAW AND ON FACTS. 2. RE: NON-ADJUDICATION OF GROUNDS RAISED IN APPEA L : 2.1 THE LEARNED CIT(A) GROSSLY ERRED IN NOT ADJUDI CATING ON THE GROUND RAISED BY APPELLANT IN APPEAL PERTAINING TO ADDITION U/S 80IA(10), ON THE GROUND THAT SAME COULD NOT BE ADJU DICATED IN AN APPEAL FILED AGAINST ORDER ISSUED U/S 154, WITHO UT APPRECIATING THAT ASSESSING OFFICER HAD ERRONEOUSLY PASSED THE ORDER UNDER S 154, AND THAT THE ORDER OUGHT TO HAVE BEEN PASSED U/S 153(3)(II) AS THE SAME WAS PASSED TO GIVE EFFEC T TO DIRECTIONS OF HONBLE HIGH COURT OF GUJARAT. 2.2 THE LEARNED CIT(A) GROSSLY ERRED IN NOT TREATIN G THE ORDER U/S 154 AS ORDER PASSED U/S 153(3)(II) AND THEREBY REFU SING TO ADJUDICATE ON THE ISSUES RAISED BY THE APPELLANT DU RING THE APPELLATE PROCEEDINGS. 3. RE: ADDITION U/S 80IA(10) ON ACCOUNT OF INTEREST RE CEIVED ON OVERDUE BILLS FROM ADITYA MEDISALES LIMITED: 3.1 THE LEARNED CIT(A) GROSSLY ERRED IN NOT ADJUDIC ATING THE GROUND ON ADDITION U/S 80-IA(10) ON ACCOUNT OF INTEREST RE CEIVED ON OVERDUE BILLS FROM ADITYA MEDISALES LIMITED AND THE REBY DELETING THE ADDITIONS MADE BY THE ASSESSING OFFIC ER WHILE COMPUTING THE DEDUCTION U/S 80IA(10) ON THE GROUND THAT THE SAID ISSUE IS TINT MISTAKE APPARENT FROM RECORD AND HENC E SAME CANNOT BE ADJUDICATED IN AN APPEAL AGAINST ORDER U/ S 154. 3.2 WITHOUT PREJUDICE TO THE ABOVE THE LEARNED CIT( A) OUGHT TO HAVE DELETED THE ADDITION MADE BY THE ASSESSING OFFICER TO RECALCULATE THE DEDUCTION U/S 80IA BY INVOKING PROVISION OF SUB SECTION 10 TO THE SAID SECTION, BY ALLEGING THAT THE APPELLANT HA D INFLATED PROFITS OF THE ELIGIBLE UNDERTAKING WITHOUT CONSIDE RING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE TRANSACTION AND THE COMMERCIAL EXPEDIENCY OF THE TRANSACTION. 3.3 WITHOUT PREJUDICE TO THE ABOVE, THE LD CIT(A) O UGHT TO HAVE DELETED THE ADDITION MADE BY ASSESSING OFFICER WITH OUT ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 3 - APPRECIATING THAT INTEREST CHARGED ON OVERDUE BILLS CANNOT BE LOOKED IN ISOLATION AND HAD TO BE CONSIDERED IN TOT ALITY WITH THE CONDITIONS PREVAILING AT THAT POINT OF TIME. 3.4 WITHOUT PREJUDICE TO THE ABOVE, THE LD CIT(A) O UGHT TO HAVE APPRECIATED THAT PAYMENT OF INTEREST ON OVERDUE BIL L WAS A PURE COMMERCIAL TRANSACTION AND THAT ADITYA MEDISALES LT D. WAS NOT A RELATED PARTY UNDER THE AMBIT OF SEC. 40A(2)(B). 4. RE: INTEREST WRONGLY CHARGED U/S 234D AND WITHDR AWALS OF INTEREST GRANTED U/S 244A: 4.1 THE LD CIT(A) GROSSLY ERRED IN NOT DELETING THE ACTION OF THE AO ON CHARGING INTEREST U/S 234D AND WITHDRAWAL OF INT EREST U/S 244A, WITHOUT APPRECIATING THAT SAME OUGHT TO HAVE BEEN COMPUTED AS PER PROVISIONS OF LAW. 5. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER AMEN D OR DELETE ANY GROUND OF APPEAL AT OR BEFORE THE HEARING OF THIS A PPEAL. 3. THE ISSUE RAISED BY THE ASSESSEE IN GROUND NUMBE R 3 IS THAT LEARNED CIT (A) ERRED IN NOT ADJUDICATING THE ISSUE OF INTE REST CHARGED FROM THE DEBTORS IN RELATION TO THE DEDUCTION CLAIMED U/S 80 IA (10) OF THE ACT. 4. BEFORE TAKING UP THE SPECIFIC ISSUE, WE FIND THA T IT IS IMPORTANT TO UNDERSTAND THE BRIEF HISTORY OF THE CASE WHICH GOES AS UNDER: 4.1 THE ASSESSEE FILED ITS RETURN OF INCOME ON 27 TH DECEMBER 1999. AFTER THAT, THE ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE ACT BY THE AO VIDE ORDER DATED 28 TH MARCH 2002. ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 4 - 4.2 AFTER THAT, THE CASE OF THE ASSESSEE WAS REOPEN ED UNDER SECTION 147 OF THE ACT. ACCORDINGLY, THE AO FRAMED THE ORDER UN DER SECTION 147 OF THE ACT DATED 2 ND SEPTEMBER 2003. 4.3 SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS AGAI N PICKED UP FOR THE REASSESSMENT UNDER SECTION 147 OF THE ACT. ACCORDIN GLY, THE NOTICE WAS ISSUED UNDER SECTION 148 OF THE ACT DATED 25 TH FEBRUARY 2004. THE ASSESSMENT PROCEEDINGS WERE INITIATED FOR THE ESCAP EMENT OF INCOME IN RESPECT OF THE FOLLOWING ITEMS: 1. MISMATCH OF R&D EXPENSES 2. INFLATING PROFITS OF SILVASSA UNIT U/S.80IA BY CHARGING INTEREST AT HIGHER RATE FROM AML. 3. DOUBLE DEDUCTION U/S 80IA AND 80HHA ON SILVASSA UNIT. 4. NETTING OFF OF INTEREST INCOME AGAINST INTEREST EXPENDITURE. 4.4 HOWEVER THE ASSESSEE FILED ITS OBJECTIONS AGAIN ST THE REASONS OF REOPENING TO AO. LATER THE AO PASSED A SPEAKING ORD ER DISPOSING THE OBJECTION RAISED BY THE ASSESSEE WHERE HE ACCEPTED THAT THE REOPENING WAS NOT VALID ON ALL THE GROUNDS EXCEPT INTEREST PA ID TO ADITYA MEDISALES LTD. (FOR SHORT AML.) 4.5 HOWEVER, THE ASSESSEE CHALLENGED THE VALIDITY O F THE NOTICE OF REOPENING OF THE REASSESSMENT UNDER SECTION 147 OF THE ACT BEFORE THE HONBLE GUJARAT HIGH COURT. ACCORDINGLY THE HONBLE GUJARAT HIGH COURT HELD THAT PROCEEDINGS INITIATED UNDER SECTION 147 OF THE ACT IN RESPECT OF THE 3 ITEMS ARE NOT VALID. HOWEVER, THE HONBLE COURT HELD THAT THE REASSESSMENT PROCEEDINGS ARE HELD VALID IN RESP ECT OF FOURTH ITEM THAT IS INTEREST CHARGED FROM THE DEBTORS AML. ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 5 - 4.6 HOWEVER THE HONBLE GUJARAT HIGH COURT ISSUED A DIRECTION THAT THE REASSESSMENT PROCEEDINGS CAN BE CARRIED OUT IN RESPECT OF THE ABOVE DIRECTION, BUT THE ORDER SHOULD NOT BE SERVED UPON THE ASSESSEE WITHOUT PERMISSION OF THE HONBLE COURT. HOWEVER, THE AO FRAMED THE ASSESSMENT UNDER SECTION 147 OF THE ACT DATED 31/03/2005 AFTER MAKING THE ADDITION OF THE F OLLOWING ITEMS: 1. MISMATCH OF R&D EXPENSES 2. INFLATING PROFITS OF SILVASSA UNIT U/S.80IA BY CHARGING INTEREST AT HIGHER RATE FROM AML. 3. DOUBLE DEDUCTION U/S 80IA AND 80HHA ON SILVASSA UNIT. 4. NETTING OFF OF INTEREST INCOME AGAINST INTEREST EXPENDITURE. 4.7 BUT THE ORDER OF THE AO WAS NOT SERVED UPON THE ASSESSEE IN TERMS OF THE DIRECTION OF THE HONBLE GUJARAT HIGH COURT. 4.8 SUBSEQUENTLY THE AO WAS KNOWN THE FACT THAT THE HONBLE GUJARAT HIGH COURT HAS HELD REOPENING VALID ONLY IN RESPECT OF INTEREST CHARGED ON OVERDUE AMOUNT FROM AML. THUS THE AO RECTIFIED H IS ORDER DATED 31/03/2005 UNDER SECTION 154 OF THE ACT BY DELETING THE ADDITION OF 3 ITEMS AS DISCUSSED ABOVE. HENCE THE ADDITION IN RES PECT OF ONE ITEM THAT IS INTEREST CHARGED FROM AML WAS SUSTAINED IN THE O RDER PASSED UNDER SECTION 154 OF THE ACT. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO LEARNE D CIT (A) AGAINST THE RECTIFICATION ORDER PASSED U/S 154 OF THE ACT. ASSESSEE BEFORE THE LEARNED CIT SUBMITTED AS UNDER: SUBMISSIONS: 1. THE DETAILED CHRONOLOGY OF EVENTS IS AS UNDER: ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 6 - DATE EVENT ORIGINAL ASSESSMENT: 27-12-1999 ORIGINAL RETURN OF INCOME WAS FILED BY T HE APPELLANT 28-03-2002 ASSESSING OFFICE PASSES THE ASSESSMENT O RDER U/S. 143(3). 12-06-2002 THE HONBLE CIT(A) PASSES THE APPELLATE ORDER U/S. 250 16-09-2002 THE ASSESSING OFFICER PASSES THE ORDER G IVING EFFECT TO HONBLE CIT(A)S ORDER. FIRST REASSESSMENT : 01-04-2003 THE ASSESSING OFFICER ISSUES THE REASSES SMENT NOTICE U/S. 148 ON THE ISSUE OF LEASE EQUALIZATION CHARGES TO BE ADDED BACK TO THE BOOK PROFITS. 02-09-2003 THE ASSESSING OFFICER PASSES THE REASSES SMENT ORDER U/S. 147 15-12-2004 THE HONBLE CIT(A) PASSES THE APPELLATE ORDER U/S 250 AGAISNT THE APPELLANT. 11-09-2008 THE HONBLE ITAT DECIDED THE ISSUE IN FA VOUR OF THE APPELLANT 14-02-2013 THE ASSESSING OFFICER PASSES ORDER GIVIN G EFFECT TO THE HONBLE ITAT ORDER. SECOND REASSESSMENT: 25-02-2004 THE ASSESSING OFFICER ISSUES A SECOND REASSESSMENT NOTICE U/S 148 26-02-2004 THE REASSESSMENT NOTICE WAS SERVED ON TH E APPELLANT. 06-04-2004 THE ASSESSING OFFICER FURNISHES THE REAS ONS FOR REOPENING THE ASSESSMENT. FOLLOWING ARE THE REASONS RECORDED: 1. MISMATCH OF R&D EXPENSES 2. INFLATING PROFITS OF SILVASSA UNIT U/S.80IA BY CHARGING INTEREST AT HIGHER RATE FROM AML. 3. DOUBLE DEDUCTION U/S 80IA AND 80HHA ON SILVASSA UNIT. 4. NETTING OFF OF INTEREST INCOME AGAINST INTEREST EXPENDITURE. 26-05-2004 THE APPELLANT FILES ITS OBJECTIONS AGAIN ST THE REASONS FURNISHED FOR REOPENING. ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 7 - 16-11-2004 THE ASSESSING OFFICER DISPOSES OFF THE OBJECTIONS OF THE APPELLANT BY PASSING A SPEAKING ORDER. THE ASSESSING OFFICER ACCEPTS THAT THE REASSESSMENT IS NOT VALID ON ALL THE GROUNDS, AND SUSTAINS THE REASSESSMENT ONLY ON THE ISSUE OF AML INTEREST . 18-01-2005 THE APPELLANT FILES A WRIT PETITION BEFORE THE GUJARAT HIGH COURT CHALLENGING THE VALIDITY OF THE REASSESSMENT NOTICE. 22-02-2005 THE HIGH COURT AT THE STAGE OF ADMISSION PASSED THE INTERIM RELIEF STATING THAT, 'IF WILL BE OPEN TO THE RESPONDENT AUTHORITY TO COMPLETE INVESTIGATION AND FRAME ASSESSMENT BUT THE SAMESHALL NOT BE SERVED ON THE PETITIONER, WITHOUT PRIOR PERMISSION OF THE HIGH CONN'. 31-03-2005 THE ASSESSING OFFICER HAD FRAMED TH E REASSESSMENT ORDER U/S. 143(3) R.W.S 147 DATED 31-03-2005. HOWEVER, AS PER THE DIRECTIONS OF THE HIGH COURT, THE ASSESSING OFFICER DID NOT SERVE THE REASSESSMENT ORDER ON THE APPELLANT. THE ASSESSING OFFICER MADE VARIOUS ADDITIONS AND DISALLOWANCES ON ISSUES WHICH WERE NOT SUBJECT MATTER OF THE REASSESSMENT NOTICE. THE FOLLOWING ADDITIONS / DISALLOWANCES WERE MADE IN THE REASSESSMENT ORDER: EXCLUSION OF PROCEEDS FROM SALE OF ADVANCE LICENSE BENEFIT FOR DEDUCTION U/S. 80FIHC NETTING OFF OF INTEREST EXPENDI TURE AND INTEREST INCOME FOR EXCLUSION AS PER EXPLANATION (BAA) TO S. 80HHO EXCLUSION OF AML INTEREST AND OTHER INCOME OF THE SILVASSA UNIT FOR DEDUCTION U/S. 80IA ALLOCATION OF RESEARCH & DEVELOPMENT EXPENSES TO 80LA UNIT ALLOCATION OF SELLING & DISTRIBUTION EXPENSES TO 80IA UNIT DISALLOWANCE OF PUBLIC ISSUE EXPENSES ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 8 - 06-08-2012 THE HIGH COURT PASSED ITS FINAL ORDER AND UPHELD THE INITIATION OF REASSESSMENT ONLY ON THE ISSUE OF EXCESSIVE INTEREST CHARGED ON OVERDUE PAYMENTS FROM AML 29-10-2012 AGGRIEVED BY THE HIGH COURT ORDER, THE APPELLANT FILES A SPECIAL LEAVE PETITION IN THE SUPREME COURT 25-10-12 ON RECEIPT OF THE HIGH COURT ORDER, THE ASSESSING OFFICER PASSED A RECTIFICATION ORDER U/S. 154 DATED 25-10-2012 SEEKING TO RECTIFY HIS EARLIER REASSESSMENT ORDER FRAMED U/S. 143(3) R. W. S. 147 DATED 31-03-2005. 21-11-12 THE APPELLANT FILES AN APPEAL TO YOUR HONOUR AGGRIEVED BY THE RECTIFICATION ORDER U/S. 154 17-11-13 THE APPELLANT ALSO FILES A LETTER TO THE ASSESSING OFFICER REQUESTING AN OFFICIAL SERVICE OF DIE EARLIER REASSESSMENT ORDER DATED 31-03-2005, AS THE SAME TILL DATE WAS NOT YET SERVED UPON THE APPELLANT. 26-11-2013 THE HON'BLE SUPREME COURT DISPOSES THE SPECIAL LEAVE PETITION IN FAVOUR OF THE APPELLANT. THE SUPREME COURT DIRECTED THE HON'BLE CIT(A) TO DECIDE UPON THE REOPENING OF ASSESSMENT WITHOUT BEING INFLUENCED BY THE OBSERVATIONS MADE IN THE GUJARAT HIGH COURT'S ORDER. 04-12-13 THE ASSESSING OFFICER FINALLY GIVES S PHOTO COPY OF THE REASSESSMENT ORDER DATED 31-03- 2005. HOWEVER, THE REASSESSMENT ORDER AND ORIGINAL NOTICE OF DEMAND HAS NOT YET BEEN SERVED UPON_THE_APPELLANT EVEN TILL THE PRESENT DATE . 2. THE TIME LIMIT FOR THE ASSESSING OFFICER TO PASS TH E REASSESSMENT ORDER U/S. 143(3) R. W. S. 147 IS 1 YEAR FROM END O F FINANCIAL YEAR IN WHICH NOTICE WAS SERVED [S. 153(2)]. THUS, THE ASSE SSING OFFICER HAD TO COMPLETE THE REASSESSMENT BY 31-03-2005. 3. IN VIEW OF THE INTERIM RELIEF GRANTED BY THE HIGH C OURT, THE PERIOD FROM THE DATE ON WHICH INTERIM RELIEF WAS GRANTED B Y THE HIGH COURT (22-02-2005) TILL THE DATE OF VACATION OF RELIEF BY DIE HIGH COURT (06-08-2012) NEEDS TO BE EXCLUDED [EXPLANATION I TO S. 153]. ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 9 - 4. AFTER EXCLUDING THE AFORESAID PERIOD FROM THE PERIO D OF LIMITATION, THE TIME LIMIT WITHIN WHICH THE ASSESSING OFFICER H AD TO COMPLETE THE REASSESSMENT IS 05-10-2012. ALTHOUGH THE ASSESS ING OFFICER HAD PASSED THE REASSESSMENT ORDER ON 31-03-2005. TH E SAME HAS NOT BEEN SERVED UPON THE APPELLANT EVEN TILL THE PR ESENT DATE. THERE IS AN INORDINATE DELAY OF MORE THAN 12 MONTHS ON PART OF THE ASSESSING OFFICER IN SERVING THE REASSESSMENT ORDER AND THE NOTICE OF DEMAND, EVEN AFTER THE INTERIM STAY GRANTED BY T HE HIGH COURT WAS VACATED. SINCE THE ORIGINAL REASSESSMENT ORDER HAS NOT BEEN SERVED WITHIN THE PERMISSIBLE DATE, IT BECOMES TIME BARRED AND INVALID UNDER LAW. 5. ON RECEIPT OF THE HIGH COURT ORDER, THE ASSESSING O FFICER PASSED A RECTIFICATION ORDER U/S. 154 DATED 25-10-2012 (THE ORDER UNDER THE PRESENT APPEAL) SEEKING TO RECTIFY THE ORIGINAL REA SSESSMENT ORDER PURSUANT TO THE ORDER OF THE HIGH COURT. 6. SINCE THE ORIGINAL ORDER ITSELF IS TIME BARRED UNDE R LAW AND VOID, A RECTIFICATION OF SUCH TIME BARRED ORDER WOULD AUTOM ATICALLY BECOME INVALID AND VOID-AB-INITIO. 7. DUE TO THE UNIQUE, PARTIALLY COMPLICATED AND SPECIF IC FACTS OF THE PRESENT CASE, THE APPELLANT WAS PREVENTED FROM SUFF ICIENT CAUSE TO TAKE UP THIS GROUND OF APPEAL. SINCE THIS ADDITIONA L GROUND OF APPEAL IS PURELY ON A LEGAL AND TECHNICAL GROUND, THE SAME MAY BE ADMITTED AND DECIDED. 8. HENCE, WE REQUEST YOUR HONOUR TO COMPLETELY QUASH T HE RECTIFICATION ORDER AND DECLARE THE ENTIRE RECTIFIC ATION PROCEEDINGS VOID UNDER LAW. 5.1 HOWEVER, THE LEARNED CIT (A) DISREGARDED THE CO NTENTIONS OF THE ASSESSEE AND CONFIRM THE ORDER OF AO BY OBSERVING A S UNDER: 4. I HAVE CAREFULLY CONSIDERED THE FACTS ON RECORD S AND SUBMISSION OF THE LD. AUTHORIZED REPRESENTATIVE. I FIND THAT T HE ASSESSING OFFICER PASSED AN ORDER U/S. 154 ON HIS OWN MOTION ALLOWING SUBSTANTIAL RELIEF TO THE APPELLANT, UNDISPUTEDLY, NO TAX LIABILITY WA S ENHANCED VIDE AN ORDER U/S. 154 AND HENCE THE APPELLANT CANNOT HAVE ANY GRIEVANCE AGAINST THIS ORDER. 4.1. ON PERUSAL OF THE GROUNDS OF APPEAL RAISED BY THE APPELLANT, I FIND THAT THE APPELLANT AS CHALLENGED VALIDITY OF N OTICE U/S. 148 R.W.S. ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 10 - 147 AND REQUESTED FOR ADDITIONAL DEDUCTION U/S. 80I A(10) OF THE ACT IN RESPECT OF INTEREST RECOVERED FROM ADITYA MEDISALES LTD. SINCE THESE GROUNDS REQUIRE A DETAILED ADJUDICATION ON THE BASI S OF LONG DRAWN PROCESS OF MARSHALING OF FACTS, INTERPRETATION OF L EGAL DECISION ETC, THE SAME CANNOT BE ADJUDICATED IN AN APPEAL FILED AGAIN ST AN ORDER PASSED U/S. 154. THEREFORE, THESE GROUNDS OF APPEAL BEING BEYOND JURISDICTION ARE DISMISSED. 4,2. OTHER GROUNDS ARE IN RESPECT OF CHARGING OF I NTEREST U/S. 234B AND 234D BESIDES WITHDRAWAL OF INTEREST GRANTED U/S . 244A. THE AUTHORIZED REPRESENTATIVES HAVE NOT POINTED OUT ANY SPECIFIC ERRORS IN THE ORDER U/S. 154 AND HENCE NO RELIEF CAN BE ALLOW ED. HENCE THIS GROUND IS DISMISSED. 4.3. OTHER GROUND HAS BEEN RAISED IN RESPECT OF INI TIATION OF PENALTY PROCEEDINGS U/S. 271(1)(C) WHICH IS NOT EMANATING F ROM THE ORDER U/S. 154 AND HENCE THE SAME IS DISMISSED. 4.4 VIDE ADDITIONAL GROUND RAISED DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT HAS CHALLENGED THE VALID ITY OF ORDER U/S. 154 ON THE GROUND THAT THE SAME WAS TIME BARRED. THIS G ROUND OF THE APPEAL IS ALSO BASELESS BECAUSE VIDE ORDER U/S. 154, THE A SSESSING OFFICER HAS ALLOWED RELIEF TO THE APPELLANT AND IF THE ORDER IS TREATED AS TIME BARRED, THEN THE RELIEF SO GRANTED WILL STAND WITHDRAWN. MO REOVER, I FIND THAT ORDER U/S. 154 HAS BEEN PASSED IN PURSUANCE OF AN O RDER OF HON'BLE HIGH COURT DATED 06.08.2012 AND HENCE THERE WAS NO INFIRMITY AS CLAIMED BY THE APPELLANT. THUS, THE ADDITIONAL GROU ND RAISED IS ALSO DISMISSED. 5.2 BEING AGGRIEVED BY THE ORDER OF LEARNED CIT (A) ASSESSEE IS IN 2 ND APPEAL BEFORE US. 6. THE LEARNED AR BEFORE US FILED A PAPER BOOK WHIC H IS RUNNING FROM PAGES 1 TO 59 AND DREW OUR ATTENTION THAT IN T HE IDENTICAL FACTS AND CIRCUMSTANCES IN THE OWN CASE OF THE ASSESSEE THE H ONBLE ITAT IN ITA NUMBER 2873, 2874, 2910 & 2911 PERTAINING TO THE AS SESSMENT YEAR ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 11 - 1997-98 AND 1998-99 HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. THE HONBLE ITAT HAS HELD AS UNDER: 15. FROM GOING THROUGH THE ABOVE JUDGMENT WE FIND THAT HON'BLE COURT HAS CONFIRMED THE VIEW OF TRIBUNAL AND HELD T HAT THE RATE OF INTEREST @ 24% PAID BY ADITYA MEDISALES LIMITED TO SUN PHARMACEUTICAL INDUSTRIES LIMITED IS REASONABLE AND IN CONSONANCE WITH THE PREVAILING MARKET RATES. WE ARE OF THE CONFIRMED VIEW THAT WHEN THE INTEREST PAID @ 24% HA S BEEN HELD TO BE REASONABLE IN THE HANDS OF PAYER THEN IT CAN BE INFERRED THAT THE INTEREST RECEIVED BY THE PAYEE IS ALSO REA SONABLE. REVENUE HAS BEEN UNABLE TO REBUT THIS FINDING AND N OT HAS BEEN ABLE TO BRING ANY DISTINGUISHING FACT OR ANY OTHER MATERIAL TO PROVE THE CONTRARY. 16. WE THEREFORE RESPECTFULLY FOLLOWING THE JUDGME NT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ADITYA MED ISALES LIMITED (SUPRA) FIND NO JUSTIFICATION THE DISALLOWANCE OF D EDUCTION MADE BY LD. AO U/S. 80IA(10) OF THE ACT ON ACCOUNT OF IN TEREST RECEIVED ON OVERDUE BILLS FROM ADITYA MEDISALES LIM ITED FOR BOTH THE YEARS AND FURTHER HOLD THAT RATE OF 24% CHARGED BY THE ASSESSEE IS REASONABLE. 6.1 THUS THE LEARNED AR BEFORE US PRAYED THAT THE A DDITION IN RESPECT OF THE INTEREST CHARGED FROM AML ON OVERDUE AMOUNT DESERVES TO BE DELETED. 7. ON THE OTHER HAND, THE LEARNED DR VEHEMENTLY SUP PORTED THE ORDER OF AUTHORITIES BELOW. 8. WE HEARD THE CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE INS TANT CASE IS THAT THE ASSESSEE HAS CHARGED INTEREST FROM AML ON ACCOUNT O F THE LATE REALIZATION OF PAYMENT OF SALES AT THE RATE OF 24% PER ANNUM. T HE ASSESSEE CLAIM ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 12 - DEDUCTION UNDER SECTION 80-IA(10) OF THE ACT IN RES PECT OF SUCH INTEREST INCOME. THE AO WAS OF THE VIEW THAT INTEREST CHARG ED FROM AML WAS HIGHER THAN THE MARKET RATE. ACCORDINGLY THE AO TRE ATED THE AMOUNT OF INTEREST INCOME OVER AND ABOVE OF 15% AS EXCESSIVE AND UNREASONABLE. ACCORDINGLY THE AO DISALLOWED THE DEDUCTION IN RESP ECT OF SUCH EXCESSIVE INTEREST INCOME SHOWN BY THE ASSESSEE. 8.1 AT THE OUTSET WE NOTE THAT THIS TRIBUNAL IN THE OWN CASE OF ASSESSEE AS DISCUSSED ABOVE HAS HELD THAT INTEREST CHARGED A T THE RATE OF 24% PER ANNUM IS REASONABLE AND JUST. ACCORDINGLY SUCH INTE REST WAS HELD TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA(10) OF T HE ACT. THUS WE DECIDE THE ISSUE ON MERIT IN FAVOUR OF THE ASSESSEE . 8.2 HOWEVER WE FURTHER NOTE THAT THE ISSUE OF CHARG ING OF EXCESSIVE INTEREST FROM THE AML WAS NOT ARISING FROM THE ORDE R OF AO PASSED UNDER SECTION 154 OF THE ACT. AS SUCH THE ISSUE OF INTEREST PERTAINS TO THE ASSESSMENT ORDER FRAMED UNDER SECTION 147 OF THE AC T. THE APPEAL BEFORE US WAS FILED AGAINST THE ORDER PASSED UNDER SECTION 154 OF THE ACT BY THE AO. 8.3 NOW THE ISSUE BEFORE US ARISES FOR OUR ADJUDICA TION WHETHER THE ISSUE ARISING FROM THE ASSESSMENT ORDER PASSED UNDE R SECTION 147 OF THE ACT CAN BE TAKEN/ CONSIDERED IN THE ORDER PASSED UN DER SECTION 154 OF THE ACT REVISING SUCH ORDER PASSED UNDER SECTION 147 OF THE ACT. ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 13 - 8.4 FROM THE PRECEDING DISCUSSION WE NOTE THAT THE ORDER PASSED UNDER SECTION 154 OF THE ACT IS AN EXTENSION OF THE ORDER PASSED UNDER SECTION 147 OF THE ACT. 8.5 IT IS ALSO UNDISPUTED FACT THAT THE PROVISIONS OF LAW REQUIRE THE ASSESSEE TO FILE THE APPEAL SEPARATELY FOR EACH ORD ER UNDER DIFFERENT SECTIONS. BUT CONSIDERING THE PECULIAR FACTS OF THE CASE ON HAND WE NOTE THAT THE ADDITION WHICH HAS BEEN MADE BY THE AO IN THE RE-ASSESSMENT PROCEEDINGS FRAMED UNDER SECTION 147 OF THE ACT HAS BEEN DELETED IN THE OWN CASE OF THE ASSESSEE BY THE HONBLE ITAT AS DIS CUSSED ABOVE. 8.6 IT IS ALSO A FACT ON RECORD THAT THE ASSESSEE H AS CHALLENGED THAT THE ORDER PASSED UNDER SECTION 147 OF THE ACT WAS NOT S ERVED UPON IT. THEREFORE THERE WAS NO OCCASION TO FILE THE APPEAL AGAINST THAT ORDER. 8.7 A SPECIFIC QUESTION WAS RAISED FROM THE BENCH T O DR ABOUT THE SERVICE OF THE ORDER FRAMED UNDER SECTION 147 OF TH E ACT, THE LEARNED DR FAILED TO MAKE ANY SATISFACTORY REPLY. 8.8 IN VIEW OF ABOVE AND AFTER CONSIDERING THE FACT S IN TOTALITY WE ARE OF THE VIEW THAT THE ASSESSEE IN THE CASE BEFORE US NEVER HAD THE CHANCE TO CHALLENGE THE ASSESSMENT ORDER FRAMED UNDER SECTION 147 OF THE ACT BECAUSE THE ORDER WAS NOT RECEIVED BY IT. THE ORDER WHICH WAS RECEIVED BY THE ASSESSEE WAS PASSED UNDER SECTION 154 OF THE ACT. THUS THE ASSESSEE HAD NO OTHER OPTION EXCEPT TO CHALLENGE TH E ORDER PASSED UNDER SECTION 154 OF THE ACT. THEREFORE IN THE INTEREST O F JUSTICE AND FAIR PLAY ITA NO.701/AHD/ 2016 M/S. SUN PHARMACEUTICAL INDUSTRIES LTD. VS. ACIT ASST.YEAR 1999-2000 - 14 - AND TO AVOID THE MULTIPLICITY OF THE LITIGATION WE RE INCLINED TO DELETE THE ADDITION MADE BY THE AO FOR THE INTEREST CHARGED FR OM AML, IN VIEW OF THE FACT THAT THIS ISSUE IS COVERED BY THE ORDER OF THIS TRIBUNAL AS DISCUSSED ABOVE, SO WE ARE INCLINED TO ALLOW THE GROUND OF AP PEAL RAISED BY THE ASSESSEE ON MERIT. 8.9 AS WE HAVE DECIDED THE ISSUE IN FAVOUR OF ASSES SEE ON MERIT, WE REFRAIN OURSELVES FROM ADJUDICATING THE TECHNICAL I SSUE RAISED BY ASSESSEE IN OTHER GROUNDS OF APPEAL. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. THIS ORDER PRONOUNCED IN OPEN COURT ON 18/09/2018 SD/- SD/- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; YK S[KK LNL; U;KF;D LNL; YK S[KK LNL; U;KF;D LNL; YK S[KK LNL; U;KF;D LNL; YK S[KK LNL; (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUN TANT MEMBER AHMEDABAD; DATED 18/09/2018 PRITI YADAV, SR.PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A) 2, VADODARA. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD. 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD