ITO 12(2)(4), MUMBAI V. SHYAMSUNDER G. GOENKA, MUMBAI

ITA 7658/MUM/2013

• Counselvise Citation: 765819914 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 30-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Difference of opinion; Reason to believe; Change of opinion
• Section: 148; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI R. C. SHARMA, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 7658/MUM/2013 ASSESSMENT YEAR: 2003-04 ITO 12(2)(4) R. NO. 123-B, AAYAKAR BHAVAN MUMBAI .(APPELLANT) VS. SHRI SHYAMSUNDER G. GOENKA SHEHADEEP, JOLLY MARKER APARTMENTS, CUFFE PARADE, COLABA, MUMBAI 400 005 PAN:ACUPG 2314 E (RESPONDENT) APPELLANT BY : SHRI NEIL PHILIP RESPONDENT BY : NONE DATE OF HEARING : 02.06.2015 DATE OF PRONOUNCEMENT : 05.06.2015 O R D E R PER SUSHMA CHOWLA, JM: THE APPEAL FILED BY THE REVENUE IS AGAINST THE ORDE R OF THE CIT(A)-10, MUMBAI DATED 26.08.2013 RELATING TO ASSESSMENT YEAR 2003-04 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE I.T. ACT. 2. THE APPEAL OF THE REVENUE WAS FIXED FOR HEARING BUT NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY APPLICATION WAS MOVE D FOR ADJOURNMENT. WE PROCEED TO DECIDE THE PRESENT APPEAL AFTER HEARING THE LD. DR FOR THE REVENUE. ITA NO. 7658/MUM/2013 ASSESSMENT YEAR: 2003-04 2 3. THE REVENUE HAS RAISED SEVERAL GROUNDS OF APPEAL BUT THE JURISDICTIONAL ISSUE RAISED IS VIDE GROUND OF APPEAL NO. 1, WHICH READ AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN GIVING RELIEF TO THE ASSES SEE BY ANNULLING THE ASSESSMENT ORDER, WITHOUT APPRECIATION THE FACT THAT ORIGINALLY IN THE EARLIER ORDER OF THE LD. CIT(A) DATED 16.12. 2011, THE ASSESSMENT ORDER WAS UPHELD. 4. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF TH E CIT(A) IN ANNULLING THE REASSESSMENT ORDER PASSED UNDER SECTION 143(3) R.W. S. 147 OF THE ACT. 5. BRIEFLY IN THE FACTS OF THE CASE THE ASSESSEE HA D FURNISHED RETURN OF INCOME ON 27.11.2003 DECLARING TOTAL INCOME OF RS.2 ,75,216/-. THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED BY TH E AO VIDE ORDER DATED 14.03.2006 ON TOTAL INCOME OF RS.2,75,216/-. THEREA FTER THE AO NOTED THAT THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 27.11.20 03 AS AGAINST THE DUE DATE OF FILING THE RETURN OF INCOME OF 31.07.2003, WHICH WA S EXTENDED TO 03.10.2002. THE AO WAS OF THE VIEW THAT SINCE THE RETURN OF INC OME WAS NOT FILED IN TIME, THE LOSS ALLOWED TO BE CARRIED WAS NOT IN ORDER. TH E AO REOPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT AND NOTICE UNDER SECTI ON 148 OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE IN REPLY SUBMITTED TH AT THE RETURN OF INCOME ORIGINALLY FILED SHOULD BE TREATED AS FILED UNDER S ECTION 148 OF THE ACT. THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS AND AS SESSMENT WAS COMPLETED BY THE AO VIDE ORDER PASSED UNDER SECTION 143(3) R.W.S . 147 OF THE ACT BY HOLDING THAT THE CARRY FORWARD OF LONG TERM CAPITAL LOSS AN D SHORT TERM CAPITAL LOSS IS NOT TO BE ALLOWED TO BE CARRIED FORWARD. 6. THE CIT(A) IN THE FIRST ROUND VIDE ORDER DATED 1 6.12.2011 UPHELD THE ORDER OF THE AO IN DISALLOWING THE CARRY FORWARD OF THE LOSSES. THE TRIBUNAL VIDE ORDER IN ITA NO. 1377 TO 1381/MUM/2012 FOR A.Y . 2003-04, WHEREIN THE ASSESSEES APPEAL NUMBER WAS ITA NO. 1378/MUM/2012 RESTORED THE MATTER BACK TO THE CIT(A) TO ADJUDICATE THE ISSUE OF REASS ESSMENT INITIATED BY THE AO ITA NO. 7658/MUM/2013 ASSESSMENT YEAR: 2003-04 3 UNDER SECTION 148 R.W.S. 147 OF THE ACT. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THAT IT HAD FILED COMPL ETE DETAILS IN THE COMPUTATION OF INCOME ITSELF AND WHERE TRUE AND FULL DISCLOSURE OF ALL MATERIAL FACTS WAS MADE DURING THE COURSE OF ORIGINAL ASSESSMENT PROCE EDING AND IN THE ABSENCE OF ANY NEW EVIDENCE OR FACT, HELD THAT THE REOPENING O F THE CASE AFTER FOUR YEARS IS NOT WARRANTED. THE CIT(A) ACCORDINGLY CANCELED THE REASSEMENT ORDER PASSED BY THE AO. 7. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF TH E CIT(A). 8. ON THE PERUSAL OF THE RECORD, WE FIND THAT THE ORIGINAL ASSESSMENT IN THE CASE WAS MADE UNDER SECTION 143(3) OF THE ACT WHERE IN THE AO NOTED THAT THE ASSESSEE HAD FILED RETURN OF INCOME ON 27.11.2003. THE AO ALSO COMPUTED THE LONG TERM AND SHORT TERM CAPITAL LOSS IN THE HANDS OF THE ASSESSEE AND ALSO COMPUTED THE LOSS TO BE CARRIED FORWARD TO THE SUCC EEDING YEAR. THE ASSESSMENT WAS COMPLETED ON 14.03.2006 FOR ASSESSMENT YEAR 200 3-04. THEREAFTER ON 26.03.2009 NOTICE UNDER SECTION 148 WAS ISSUED TO T HE ASSESSEE AFTER REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT. THE SA ID NOTICE DATED 26.03.2009 WAS ISSUED BEYOND FOUR YEARS FROM THE END OF THE AS SESSMENT YEAR RELATING TO ASSESSMENT YEAR 2003-04. UNDER SUCH CIRCUMSTANCES THE FIRST PROVISO UNDER SECTION 147 OF THE ACT IS ATTRACTED. IT IS PROVIDED THEREIN THAT WHERE THE ASSESSMENT OR THE RELEVANT ASSESSMENT YEAR HAD BEEN COMPLETED UNDER SECTION 143(3) OF THE ACT, NO ACTION SHALL BE TAKEN UNDER T HE SECTION, AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERI AL FACTS. 9. HONBLE SUPREME COURT IN CIT VS. KELVINATOR OF I NDIA LTD. 320 ITR 561 (SC) HELD AS UNDER:- THE CONCEPT OF CHANGE OF OPINION ON THE PART OF T HE ASSESSING OFFICER TO REOPEN AN ASSESSMENT DOES NOT STAND OBLI TERATED AFTER THE SUBSTITUTION OF SECTION 147 OF THE INCOME-TAX ACT, 1961, BY THE DIRECT TAX ITA NO. 7658/MUM/2013 ASSESSMENT YEAR: 2003-04 4 LAWS (AMENDMENT) ACTS, 1987 AND 1989. AFTER THE AME NDMENT, THE ASSESSING OFFICER HAS TO HAVE REASON TO BELIEVE THA T INCOME HAS ESCAPED ASSESSMENT, BUT THIS DOES NOT IMPLY THAT THE ASSESS ING OFFICER CAN REOPEN AN ASSESSMENT ON MERE CHANGE OF OPINION. THE CONCEP T OF CHANGE OF OPINION MUST BE TREATED AS AN IN-BUILT TEST TO CHE CK THE ABUSE OF POWER. H ENCE AFTER APRIL 1, 1989, THE ASSESSING OFFICER H AS POWER TO REOPEN AND ASSESSMENT, PROVIDED THERE IS TANGIBLE MATERIA L TO COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT . REASON MUST HAVE A LINK WITH THE FORMATION OF THE B ELIEF. 10. IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN CIT VS. KELVINATOR OF INDIA LTD. (SUPRA) AND IN VIEW OF THE FINDING OF THE CIT(A) THAT THE ASSESSEE HAD DISCLOSED THE NECESSARY PARTICULAR S IN THE ORIGINAL RETURN OF INCOME ITSELF, WHICH FINDING OF THE CIT(A) HAS NOT BEEN CONTROVERTED BY THE LD. DR FOR THE REVENUE, WE HOLD THAT THE REOPENING OF T HE ASSESSMENT BEYOND FOUR YEARS, IN THE ABSENCE OF ANY FINDING THAT THE ASSES SEE HAD FAILED TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS, SUCH REOPENING OF ASSE SSMENT CANNOT BE SUSTAINED IN THE EYES OF LAW. ACCORDINGLY WE UPHOLD THE ORDER OF THE CIT(A) IN THIS REGARD AND DISMISS THE GROUND OF APPEAL NO. 1 RAISED BY TH E REVENUE. 11. IN VIEW OF OUR DISMISSING THE APPEAL ON JURISDI CTIONAL ISSUE WE ARE NOT ADJUDICATING THE OTHER GROUNDS OF APPEAL RAISED BY THE REVENUE AGAINST THE MERITS OF THE ADDITION. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF JUNE, 2015. SD/- SD/- (R. C. SHARMA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATED: 05.06.2015 *SRIVASTAVA ITA NO. 7658/MUM/2013 ASSESSMENT YEAR: 2003-04 5 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR E BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.