YOU TELeCOM INDIA P.LTD, MUMBAI V. DCIT 9(3), MUMBAI

ITA 7310/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0798 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 02-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 12-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BEER LA
• Keywords: Opportunity of being heard; Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . . , , , BEFORE SHRI A.D. JAIN , JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 7310/MUM/2013 ( / ASSESSMENT YEAR : 2007 - 08 M/S.YOU TELECOM INDIA PVT. LTD., PLOT NO. 54, MAROL CO - OPERATIVE INDUSTRIAL AREA, MAKWANA, OFF ANDHERI KURLA ROAD, ANDHERI (E), MUMBAI - 400 063 / VS. THE DCIT 9(3), AAYAKAR BHAVAN, MUMBAI ./ ./ PAN/GIR NO. : AABCB 6062F ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI NITESH JOSHI / RESPONDENT BY : SHRI PAVAN KUMAR BEERLA / DATE OF HEARING : 06 . 0 7 .2015 / DATE OF PRONOUNCEMENT : 06 .0 7 .2015 / O R D E R PER N.K. BILLAIYA, AM: T HIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 20 , MUMBAI DT. 23.3.2013 PERTAINING TO ASSESSMENT YEAR 2007 - 08. ITA. NO. 7310/M/2013 2 2. THE GRIEVANCE OF THE ASSESSEE IS TWO FOLD. BY FIRST GROUND, THE ASSESSEE HAS CHALLENGED THE JURISDICTION OF THE AO FOR ISSUING N OTICE U/S. 148 OF THE ACT. IT IS THE CLAIM OF THE ASSESSEE THAT THE REASSESSMENT MADE SHOULD BE TREATED AS NULL AND VOID. 3. THE SECOND GRIEVANCE RELATES TO THE MERITS OF THE CASE. IT IS THE CLAIM OF THE ASSESSEE THAT THE LD. CIT(A) HAS ERRED IN CONFIR MING DISALLOWANCE OF CARRY FORWARD LOSS OF RS. 1,21,12,620/ - FOR SET OFF AGAINST INCOME FOR FUTURE ASSESSMENT YEAR. 4. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE REASONS FOR REOPENING OF THE COMPLETED ASSESSMENT WHICH R EAD AS UNDER: IT IS NOTICED FROM PARA NOS. 18.14 AND 18.15 TO NOTES TO ACCOUNTS THAT DURING THE PREVIOUS YEAR RELEVANT TO A. Y.2007 - 0B, THE MANAGEMENT CONTROL OF THE COMPANY HAS CHANGED FROM BRITISH GAS (B. G.) GROUP TO CITI GROUP VENTURE CAPITAL INTER NATIONAL GROWTH PARTNERSHIP MAURITIUS LTD. (I.E., THE HOLDING COMPANY OF YOU TELECOM (MAURITIUS LTD.). ACCORDINGLY, THE BUSINESS LOSS OF RS. 52,68,85,987 PERTAINING TO EARLIER YEARS, AS CLAIMED IN THE RETURN, IS NOT ELIGIBLE TO CARRY FORWARD TO SUBSEQUENT YEARS. WITHOUT PREJUDICE TO THE ABOVE, IT IS ALSO STATED THAT EVEN IF THERE IS ANY CHANGE IN THE SHARE HOLDING PATTERN OF THE HOLDING COMPANY OR THE ORIGINAL HOLDING COMPANY HAS TAKEN OVER OR BROUGHT OUT BY ANOTHER COMPANY LEAD TO TRANSFER OF SHARES O F THE INDIAN ENTITIES IN THE NAME OF THE NEW COMPANY AND ACCORDINGLY THE PROVISIONS OF SECTION 79 IS APPLICABLE. I, THEREFORE, HAVE REASON TO BELIEVE THAT B/F OF BUSINESS LOSS OF RS. 52,68,85,987/ - PERTAINING TO EARLIER YEARS & CLAIMED IN THE RETURN TO B E C/ F TO SUBSEQUENT YEARS HAS RESULTED IN UNDER ASSESSMENT OF INCOME I ESCAPEMENT OF INCOME WITHIN MEANING OF SECTION 147 OF THE ACT. ACCORDINGLY, REASSESSMENT PROCEEDINGS U/ S 147 OF THE I.T. ACT ARE HEREBY INITIATED FOR ASSESSMENT YEAR 2007 - 08. NOTICE U/S 148 OF THE ACT IS ACCORDINGLY ISSUED.' 4.1. THE LD. COUNSEL FURTHER STATED THAT VIDE LETTER DT. 5.8.2011, THE ASSESSEE HAD REPLIED TO THE NOTICE RECEIVED U/S. 148 OF THE ACT. IT IS THE SAY OF THE LD. COUNSEL THAT THE DETAILED OBJECTION FOR R EOPENING THE ITA. NO. 7310/M/2013 3 ASSESSMENT WAS FILED BEFORE THE AO. THE LD. COUNSEL CONTINUED BY STATING THAT BEFORE THE LD. CIT(A) ALSO THIS ISSUE WAS TAKEN UP BUT WITHOUT ANY SUCCESS. IT IS THE SAY OF THE LD. COUNSEL THAT IF THE OBJECTIONS WERE CONSIDERED BY THE AO ON THE FACTS OF THE CASE, THERE WOULD NOT HAVE BEEN ANY OCCASION FOR MAKING A REASS ESSMENT ORDER U/S. 143(3) R.W. SEC. 147 OF THE ACT. 5. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BRING ANY DISTINGUISHING FACT ON THIS ISSUE. 6. THE FACTS NARRATED BY THE LD. COUNSEL HAVE BROUGHT TO OUR NOTICE THE DECISION OF THE HONBLE SUPREME CO URT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD VS ITO 259 ITR 19 WHEREIN THEIR LORDSHIPS HAS HELD AS UNDER: WE SEE NO JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER UNDER CHALLENGE. HOWEVER, WE CLARIFY THAT WHEN A NOTICE UNDER SECTION 148 OF THE INCOME - TAX ACT IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTICE IS TO FILE A RETURN AND IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING NOTICES. THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF REASONS, THE NOTICE IS ENTIT LED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. IN THE INSTANT CASE, AS THE REASONS HAVE BEEN DISCLOSED IN THESE PROCEEDINGS, THE ASSESSING OFFICER HAS TO DISPOSE OF THE OB JECTIONS, IF FILED, BY PASSING A SPEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESSMENT IN RESPECT OF THE ABOVESAID FIVE ASSESSMENT YEARS. 7. IN THE CASE IN HAND, WE FIND THAT IN REPLY TO THE NOTICE, THE ASSESSEE HAS FILED DETAILED OBJECTIONS AS EXHIBITED ON PAGES 50 TO 52 OF THE PAPER BOOK. WE FIND THAT THE REVENUE AUTHORITIES HAVE NOT DECIDED ON THE OBJECTIONS RAISED BY THE ASSESSEE. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS ITA. NO. 7310/M/2013 4 (SUPRA), WE RESTOR E THIS ISSUE TO THE FILE OF THE AO. THE AO IS DIRECTED TO FIRST DECIDE ON THE OBJECTIONS RAISED BY THE ASSESSEE AFTER GIVING A REASONABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD AND THEN DECIDE THE ISSUE AFRESH AS PER PROVISIONS OF THE LAW. 8. IN THE R ESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED F O R STATISTICAL PURPOSE. OR DER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 6 TH JU LY , 2015 . SD/ - SD/ - ( A.D. JAIN ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 6 TH JU LY , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI