M/s. Bharuch Enviro Infrastructure Ltd., Ankleshwar V. The Dy.CIT., Bharuch

ITA 732/AHD/2007

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80230 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-07-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 15-02-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Reopening of assessment; Difference of opinion; Revised return; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, A HMEDABAD (BEFORE SHRI ANIL CHATURVEDI, A.M. & SHRI KUL BHARA T, J.M) I.T. A. NO. 731 & 732 /AHD/2007 (ASSESSMENT YEA R: 2000-01 & 2001-02) M/S. BHARUCH ENVIRO INFRASTRUCTURE LTD. 117/118, GIDC, ANKLESHWAR-393002 V/S THE DY. COMM. OF INCOME TAX, BHARUCH (APPELLANT) (RESPONDENT) PAN: AAACB8075F APPELLANT BY : SMT. URVASHI SHODHAN, A.R. RESPONDENT BY : SHRI V.K. SINGH, SR. D.R. ( )/ ORDER DATE OF HEARING : 18-07-2014 DATE OF PRONOUNCEMENT : 05-08-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THESE 2 APPEALS ARE FILED BY THE ASSESSEE AGAINST T HE ORDER OF CIT(A)-VI, BARODA DATED 30.11.2006 FOR A.Y. 2000-01 & 2001-02 RESPECTIVELY. 2. BEFORE US, AT THE OUTSET BOTH THE PARTIES SUBMITTED THAT THOUGH THE APPEALS OF THE ASSESSEE ARE FOR 2 DIFFERENT YEARS BUT THE F ACTS AND CIRCUMSTANCES OF BOTH THE YEARS ARE SIMILAR AND THEREFORE THE ARG UMENTS MADE BY THEM IN CASE OF ONE YEAR WOULD BE APPLICABLE TO THE OTHE R YEAR ALSO. WE THEREFORE PROCEED TO DISPOSE OF BOTH THE APPEALS BY A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. WE THUS PROCEED WITH T HE FACTS FOR A.Y. 2000-2001. ITA NO 731 & 732/AHD/2007 . A.YS. 2000 -01 & 2001- 02 2 3. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 4. ASSESSEE IS A COMPANY WHICH OPERATES CENTRALIZED SE CURED LAND FILL FACILITY FOR DISPOSAL OF SOLID WASTE GENERATED BY T HE INDUSTRIES OF BHARUCH. 5. IN THIS CASE NOTICE U/S. 148 WAS ISSUED AND SERVED ON ASSESSEE ON 31.03.2005. IN RESPONSE TO THE NOTICE, ASSESSEE VID E LETTER DATED 25.04.2005 STATED THAT THE REVISED RETURN FILED ON 06.11.2001, WHERE IT HAD SHOWN TOTAL INCOME OF RS. 47,56,368/-, BE TREAT ED AS RETURN FILED IN RESPONSE TO NOTICE U/S. 148. THEREAFTER THE ASSESSM ENT WAS FRAMED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT VID E ORDER DATED 22.03.2006 AND THE TOTAL INCOME WAS DETERMINED AT R S. 71,92,770/-. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A). BEFORE LD. CIT(A) ASSESSEE APART FROM CHALL ENGING THE ADDITIONS ALSO CHALLENGED THE VALIDITY OF RE-ASSESSMENT PROCE EDNGS. CIT(A) VIDE ORDER DATED 30.11.2006 UPHELD THE RE-ASSESSMENT PRO CEEDINGS AND ALSO UPHELD THE ADDITIONS MADE BY THE A.O AND THUS DISMI SSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A), ASS ESSEE IS NOW IN APPEAL BEFORE AND HAS RAISED THE FOLLOWING GROUNDS: - 1. VALIDITY OF REOPENING OF ASSESSMENT UNDER SECTIO N 147 OF THE ACT. : 1.1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN CONFIRMING THE VALIDITY OF REOPEN ING OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT. 1.2 IN DOING SO, THE COMMISSIONER OF INCOME TAX (AP PEAL) ERRED IN FOLLOWING RESPECTS: 1.2.1 IN NOT APPRECIATING THE FACT THAT THE ASSES SING OFFICER OUGHT TO PASS THE SPEAKING ORDER IN RESPECT OF THE OBJECTION RAISED BY THE APPELLANT AG AINST THE REASONS RECORDED FOR AND THE INITIATION O F REASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT; 1.2.2 IN NOT APPRECIATING THE FACT THAT THE AFORE SAID DISALLOWANCES BASED ON THE ORDER PASSED U/S 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2002-03 I S MERELY A CHANGE OF OPINION WITHOUT ANY ADDITIONAL INFORMATION OTHER THAN MATERIAL AVAILABLE ON RECORD ; 2 DISALLOWANCES OF EXPENSES INCURRED ON THE CONSU MPTION OF PIT CONSTRUCTION AND LAND EXPENSES AMOUNTING TO RS. 24,28,831/- AND RS. 7,571/- RESPEC TIVELY BY TREATING THE SAME AS EXCESSIVELY CLAIMED; ITA NO 731 & 732/AHD/2007 . A.YS. 2000 -01 & 2001- 02 3 2.2 WITHOUT PREJUDICE TO ABOVE, THE COMMISSIONE R OF INCOME TAX (APPEAL) HAS ALSO ERRED IN CONFIRMING THE DISALLOWANCE OF THE CONSUMPTION OF P IT AND LAND EXPENSES BY TREATING THEM AS EXCESSIVELY CLAIMED FOR THE FOLLOWING REASON; 2.2.1 IN NOT APPRECIATING THE FACT THAT, FOLLOWIN G THE MERCANTILE SYSTEM OF ACCOUNTING, THE AMOUNT O F CONSUMPTION OF LAND AND PIT CONSTRUCTION HAS BEEN A CCOUNTED AND CLAIMED IN THE RETURN OF INCOME; 2.2.2 IN NOT APPRECIATING THE FACT THAT THE EACH YEAR IS INDEPENDENT AND ISOLATED AND ACCORDINGLY IGNORING THE SAID FACT, ASSESSING OFFICER HAS WRONG LY APPLIED IN ADVANCE THE REVISED RATE PER M.T. OF SOLID WASTE WITH RESPECT TO THE CONSUMPTION OF LAND AND PIT IN THE RELEVANT ASSESSMENT YEAR WHEREAS TH E SAID REVISED RATE WAS ARRIVED AT IN THE LATER YEAR I.E. A.Y.2002-03 ON THE REVISION OF CAPACITY OF THE PITS TO HOLD THE SOLID WASTE; 6. ON THE VALIDITY OF REASSESSMENT PROCEEDINGS BEFORE US, THE LD. A.R. SUBMITTED THAT ON RECEIVING THE REASONS FOR RE-OPEN ING OF ASSESSMENT, ASSESSEE VIDE ITS LETTER DATED 11.01.2006 TO THE A. O OBJECTED TO THE RE- OPENING OF ASSESSMENT U/S. 147 AND INTERALIA SUBMIT TED THAT SINCE THE RE- OPENING WAS BASED ON CHANGE OF OPINION, THE RE-ASSE SSMENT PROCEEDINGS U/S. 147 OF THE ACT WAS NOT VALID IN THE EYES OF LA W. THE A.O WAS THUS REQUESTED TO DROP THE RE-ASSESSMENT PROCEEDINGS INI TIATED U/S. 147 OF THE ACT. HE POINTED TO THE COPY OF THE AFORESAID LETTER PLACED AT PAGE 34 ONWARDS IN THE PAPER BOOK. THE LD. A.R. FURTHER SUB MITTED THAT THE A.O DID NOT PASS ANY SEPARATE ORDER DISPOSING OF THE OB JECTIONS FILED BY THE ASSESSEE BUT IN THE ASSESSMENT ORDER PASSED ON 23.0 2.2006 U/S. 143(3) READ WITH SECTION 147 OF THE ACT, REJECTED THE OBJE CTIONS RAISED BY THE ASSESSEE. THE LD. A.R. THEREFORE NOW SUBMITTED THAT THE A.O WAS FIRST REQUIRED TO DISPOSE OF THE OBJECTION OF THE ASSESSE E BY REASONED AND SPEAKING ORDER AND THEREAFTER THE A.O SHOULD HAVE P ROCEEDED TO PASS THE ASSESSMENT ORDER U/S. 143 (3) READ WITH SECTION 14 7 OF THE ACT AND IT WAS NOT OPEN TO THE A.O TO REJECT THE OBJECTIONS TO REA SSESSMENT IN THE ASSESSMENT ORDER ITSELF. FOR THE AFORESAID PROPOSIT ION, HE RELIED ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF GENERAL MOTORS INDIA PVT. LTD. VS. DCIT. REPORTED IN (2012) 354 IT R 244. HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION. HE TH EREFORE SUBMITTED THAT ITA NO 731 & 732/AHD/2007 . A.YS. 2000 -01 & 2001- 02 4 SINCE THE A.O HAS NOT DISPOSED OF THE OBJECTION TO THE NOTICE U/S. 148 BY A SEPARATE ORDER, THE ASSESSMENT ORDER PASSED UNDER T HE ACT NEEDS TO BE QUASHED. 7. THE LD. D.R. ON THE HAND SUPPORTED THE ORDER OF A.O AND CIT(A). HE FURTHER SUBMITTED THAT SINCE THE A.O HAS REJECTED T HE OBJECTIONS OF THE ASSESSEE IN THE ASSESSMENT ORDER ITSELF, THE REJECT ION IN THE ASSESSMENT ORDER SHOULD BE CONSIDERED AS COMPLIANCE OF THE REQ UIREMENTS OF THE ACT. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE REASONS FOR RE-OP ENING OF ASSESSMENT U/S. 147 OF THE ACT WAS RECORDED ON 31.03.2005 AND THE S AME WERE COMMUNICATED TO THE ASSESSEE BY ACIT VIDE LETTER DA TED 09.01.2006. IN RESPONSE TO THE NOTICE FOR REOPENING, ASSESSEE VIDE ITS LETTER DATED 11.01.2006 HAD OBJECTED TO INITIATION OF RE-ASSESSM ENT. BEFORE US, LD. A.R. SUBMITTED THAT THAT THE ASSESSEES OBJECTION T O REASSESSMENT PROCEEDINGS WERE NOT PASSED BY A SEPARATE ORDER BUT WERE DISPOSED BY THE A.O IN THE ASSESSMENT ORDER DATED 22.03.2006 PASSED U/S. 143(3) R.W.S. 147 OF THE ACT AND THIS FACT HAS NOT BEEN CONTROVER TED BY REVENUE. WE FIND THAT THE HONBLE GUJARAT HIGH COURT IN THE CAS E OF GENERAL MOTORS INDIA PVT. LTD. (SUPRA) HAS HELD AS UNDER:- 23 . A.O IS MANDATED TO DECIDE THE OBJECTION TO T HE NOTICE U/S. 148 AND SUPPLY OR COMMUNICATE IT TO THE ASSESSEE. THE ASSESSEE GETS AN OPPORTUNITY TO C HALLENGE THE ORDER IN A WRIT PETITION. THEREAFTER T HE A.O MAY PASS THE RE-ASSESSMENT ORDER. WE HOLD THAT IT WAS NOT OPEN TO THE A.O TO DECIDE THE OBJECTION TO NOTICE U/S/ 148 BY A COMPOSITE ASSESSMENT ORDER. ASSESSING OFFICER WAS REQUIRED TO FIRST DECIDE THE OBJECTION OF THE ASSESSEE FILED U/S. 148 AND SERVE A COPY OF THE ORDER OF THE ASSESSEE AND AFTER GIVIN G REASONABLE TIME TO THE ASSESSEE FOR CHALLENGING HIS ORDER IT WAS OPEN TO HIM TO PASS AN ASSESSMENT ORDER. THIS WAS NOT DONE BY THE A.O THEREFORE THE O RDER ON THE OBJECTION TO THE NOTICE U/S. 148 OF THE ASSESSMENT ORDER PASSED UNDER THE ACT DESERVED TO B E QUASHED. 9. BEFORE US, REVENUE HAS NOT BROUGHT ANY CONTRARY BIN DING DECISION OF HONBLE APEX COURT OR HONBLE JURISDICTIONAL HIGH C OURT IN SUPPORT OF ITA NO 731 & 732/AHD/2007 . A.YS. 2000 -01 & 2001- 02 5 ITS CONTENTION THAT THE ORDER DISPOSING OF THE OBJE CTIONS OF THE ASSESSEE TO REASSESSMENT PROCEEDINGS ALONG WITH THE ASSESSMENT ORDER IS IN ORDER AND THEREFORE VALID AS PER LAW. WE THEREFORE, RESPECTFU LLY FOLLOWING THE AFORESAID DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF GENERAL MOTOR INDIA PVT. LTD. (SUPRA) QUASH THE ASSESSMENT ORDER DATED 22.03.2006. SINCE THE RE-ASSESSMENT ITSELF HAS BEEN QUASHED, THE GROUNDS RAISED ON MERITS ARE NOT DECIDED. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. 10. SINCE THE FACTS OF THE CASE IN A.Y. 01-02 ARE IDENT ICAL TO THAT OF A.Y. 2000-01 WE FOR THE SIMILAR REASONS AS STATED HEREIN ABOVE WHILE DECIDING THE APPEAL FOR A.Y. 2000-01 ALSO ALLOW THE PRESENT APPEAL OF THE ASSESSEE. 11. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 05- 08 - 2014. SD/- SD/- (KUL BHARAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD