ASST CIT LTU, MUMBAI V. S I GROUP INDIA LTD, MUMBAI

ITA 7360/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92529 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2002-2003
• Appeal Filed On: 13-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: DIVYESH I SHAH
• Keywords: Depreciation; Tangible material; Difference of opinion; Reason to believe; Change of opinion
• Section: 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE S/SHRI VIJAY PAL RAO ( JM ) AND D. KARUNAKAR A RAO, (AM) , . , ./ I.T.A. NO . 7360 / MUM/20 1 3 ( / ASSESSMENT YE A R : 20 0 2 - 03 ) ASSTT. COMMISSIONER OF INCOME TAX LARGE TAX PAYER UNIT, CENTRE - 1, 29 TH FLOOR, WORLD TRADE CENTRE, CUFFE PARRA DE , MUMBAI - 400005 / VS. M/S S I GROUP LTD, THANE BELA PUR ROAD, OPP JUINAGAR RAILWAY STATION, NAVI MUMBAI - 400705 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : AAACH7323L / ASSESSEES BY SHRI NEIL PHILIP / ASSESSE E BY SHRI DIVYESH I SHAH / DATE OF HEARING : 1 4 .5.2015 / DATE OF PRONOUNCEMENT : 22. .5. 2015 / O R D E R PER VIJAY PAL RAO ( JM ) THIS APPEAL BY THE ASSESSEE IS DI RECT ED AGAINST THE ORDER DATED 18.9.2013 OF LD. CIT(A) ON DELETION OF PENALTY LEVIED SECTION 271(1)(C) OF THE INCOME TAX A T, 1961 (THE ACT) FOR THE ASSESSMENT YEAR 200 7 - 08 . 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE , THE LD. CIT(A) ERRED IN DELETING THE PENALTY OF RS.6 , 25 , 305/ - LEVIED U /S 271(1)(C) OF THE I T. ACT ON ACCOUNT OF EXCESS CLAIM OF DEPRECIATION, WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD . CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE AO R E STOR ED 7360 /MUM/201 3 2 3. WE HAVE HEARD THE LD.DR AS WELL AS THE LD. AR AND CONSIDERED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AT THE OUTSET, WE NOTE THAT THE LD.CIT(A) HAS DELETED THE PENALTY BY CONSID ERING THE FACT THAT IN THE QUANTUM APPEAL, THIS TRIBUNAL HAS QUASHED THE REOPENING AND CONSEQUENTLY THE ASSESSMENT, THEREFORE, THE MATER WAS DECIDED IN FAVOUR OF THE ASSESSEE. THE LD. AR HAS FILED A COPY OF THE TRIBUNAL ORDER DATED 27.2.2013 IN THE QUA NTUM APPEAL IN ITA NO.4382 AND 4383/MUM/2010 (AY - 2002 - 03 AND 2003 - 04). WE FIND THAT THE TRIBUNAL IN THE QUANTUM APPEAL QUASHED THE REASSESSMENT CONSEQUENT UPON THE FINDINGS OF THE T RIBUNAL IN PARA 9 AS UNDER : 9. IT IS ALSO AN UNDISPUTED FACT THAT TH E ASSESSEE HAS FILED A DETAILED REPLY ON THIS POINT. AS NO NEW FACTS/TANGIBLE MATERIAL EVIDENCE HAVE BEEN BROUGHT ON RECORD TO JUSTIFY THE REOPENING, IN OUR HUMBLE OPINION, THE CASE IS MERELY BASED UPON THE CHANGE OF OPINION WHICH IS AGAINST THE RATIO LAI D DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA LTD. 320 ITR 561 (SC) WHEREIN THEIR LORDSHIPS HAVE THUS HELD: THE CONCEPT OF CHANGE OF OPINION ON THE PART OF THE ASSESSING OFFICER TO REOPEN AN ASSESSMENT DOES NOT STAND OBLITERA TED AFTER THE SUBSTITUTION OF SECTION 147 OF THE INCOME - TAX ACT, 1961, BY THE DIRECT TAX LAWS (AMENDMENT) ACTS, 1987 AND 1989. AFTER THE AMENDMENT, THE ASSESSING OFFICER HAS TO HAVE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, BUT THIS DOES NOT IM PLY THAT THE ASSESSING OFFICER CAN REOPEN AN ASSESSMENT ON MERE CHANGE OF OPINION. THE CONCEPT OF CHANGE OF OPINION MUST BE TREATED AS AN IN - BUILT TEST TO CHECK THE ABUSE OF POWER. HENCE AFTER APRIL 1, 1989, THE ASSESSING OFFICER HAS POWER TO REOPEN AN A SSESSMENT, PROVIDED THERE IS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASON MUST HAVE A LINK WITH THE FORMATION OF THE BELIEF SINCE REASSESSMENT ORDER IS NO MORE IN EXISTENCE AS HAS BEEN QUASHED B Y THE TRIBUNAL IN THE QUANTUM APPEAL, THEREFORE, THE PENALTY LEVIED UNDER SECTION 271(1)(C ) IS NOT SUSTAINABLE. ACCORDINGLY , WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF LD. CIT(A) IN DELETING THE PENALTY . 7360 /MUM/201 3 3 4 . IN THE RESULT, THE APPEAL OF TH E REVE NUE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22ND MAY , 201 5 . 22ND MAY , 2015 SD SD ( . / D. KARUNAKAR A RAO) ( / VIJAY PAL RAO ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI: 22ND MAY , 2015 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI