The Haryana State Co-operative Supply & Marketing Federation Ltd., Panchkula V. ACIT, Circle, Panchkula

ITA 766/CHANDI/2019

AI Insights

The case involves the Haryana State Co-operative Supply & Marketing Federation Ltd. (HAFED) appealing against the order of the Commissioner of Income Tax (Appeals) which upheld the reassessment order passed by the Assessing Officer under sections 143(3)/147 of the Income Tax Act, 1961. The primary contention was that the objections filed by the assessee against the reopening of the assessment were not disposed of before proceeding with the reassessment. The Tribunal examined the procedural adherence in handling the objections and found discrepancies in the timeline and handling of notices under sections 143(2) and 142(1) of the Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127807 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-01-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 15-05-2019
• Other Referred Cases: G K N Driveshafts (India) Ltd. vs. ITO and Others, Motilal R. Todi vs. ACIT 7(3), Asian Paints Ltd vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 148; 11; 15; 201; 43; 48; 13

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ I N T H E I N C O M E T A X A P P E L L A T E T R I B U N A L D I V I S I O N B E N C H , ‘ A ’ , C H A N D I G A R H B E F O R E SH R I A . D . J A I N , V I C E P R E S I D E N T & SH R I V I K R A M S I N G H Y A D A V , A C C O U N T A N T M E M B E R आयकर अपील सं./ ITA No. 7 6 6 / C H D / 2 0 1 9 नधा रण वष / Assessment Year : 2 0 1 2 - 1 3 Haryana State Co-operative Supply & Marketing Federation Ltd. (HAFED), Corporate Office, Sector 5, Panchkula Vs. बनाम The ACIT, Panchkula Circle, Chandigarh थायी लेखा सं./PAN NO: AAAJH0022R अपीलाथ /Appellant यथ /Respondent नधा रती क ओर से/Assessee by : Sh. Aman Parti, Advocate राज व क ओर से/ Revenue by : Smt. Amanpreet Kaur, Sr.DR स ु नवाई क तार$ख/Date of Hearing : 19.01.2023 उदघोषणा क तार$ख/Date of Pronouncement : 17.02.2023 आदेश/Order Per A.D. Jain, Vice President: Th i s i s a ss es se e ’ s ap p e a l f or a s se s s m e nt y e a r 20 12 -1 3 a g a i n s t t h e CI T( A )’ s or d e r da t ed 05. 0 3. 20 19. 2. Th e f ol lo w i ng G r o u n d s ha v e be e n ra i s e d : - 1. T ha t th e C IT ( A) er r ed o n f a c t s & i n l a w i n up h o ld i n g t he o r de r pa ss e d b y t h e A O u / s 1 4 3( 3 ) / 1 4 7 o f t h e In c om e T a x A c t , 1 96 1. 2. T ha t t h e o rd e r of CI T ( A ) i s b e i n g ch al l en ge d o n f a c t s an d l a w si n c e n o f i nd i n g r e t ur ne d w i t h r e s p ec t t o th e ap pe l la nt ’s a dd i t i o na l g ro un d of a p p e al . 3. T ha t t he CIT ( A) e r re d on f ac t s a n d i n l aw i n up hol di ng t he o rd er o f A O f ra m i n g a s se s sm e n t u/ s 14 8 on t h e ba si s o f t he d o c u m e n t s / i n f o rm a t i o n w hi c h w as a lr ea dy 2 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula av a i l ab le o n re c o rd a t t he t i m e of f ram i n g o f t h e ori g i n a l as se ssm e nt u/ s 14 3( 3 ). 3. A t th e o ut s e t , t he l d. C o un se l fo r t he a ss e s se e h a s c o nt e nd e d t ha t he do es n ot w i s h t o pr es s G r ou n d N o. 1 . R e je c t e d , as no t p re ss e d. 4. A p ro po s G ro u nd N o . 2, i t ha s be e n sub m i t te d t ha t a ga i ns t t h e re a so n s re c o r d e d b y t he A O for r e o p e ni n g t h e c o m pl et e d a s se ss m e n t o f t he a s se s se e , t h e a sse ss e e fi l e d o b j ec t io n s d a te d 01. 0 3. 2 0 1 7 [a sse ss ee ’ s P a pe r Bo o k ( A P B) 77 - 80 ]. It h as b e e n su b m it t e d t h at n ot i c e s, u / ss, 14 3( 2 ) a nd 14 2 ( 1 ) o f t h e In co me T a x A ct , 196 1 ( he re i n a ft e r c a l l ed ' th e A c t' ) w e re i s su e d o n 2 3. 0 5 . 20 1 7 (A P B 81- 82 ) . It h a s b e e n s ub m i tt e d t ha t t he or d e r d i s po si n g o f t h e ob je c t i o n s w a s p a ss ed o n 11 . 0 7. 2 01 7 ( A P B 83 - 8 7) . I t ha s b ee n su b m i tt e d t ha t t hu s , th e o bj e ct io n s w e r e di sp o s ed o f af t e r i ss u a n c e o f no t i c e u / s 1 43 ( 2 ) o f t h e A c t, i . e . , a fte r i ni t i at i n g a ss e s s me n t p r o c e e di n g s. T h i s, a c c o r di n g t o t he ld . C ou n se l fo r th e a ss e s se e , is a ga i n st t h e l aw . Re fe re nc e , i n t h i s rega rd , ha s be e n ma d e t o t he “ G K N D r iv e s h a ft s (I nd i a ) L t d . V s. IT O a n d O t h e rs ” , 259 IT R 19 (S C ) [A C LP B 1 - 3 ] a n d “ M o t i la l R. T o di V s. A C IT 7( 3 )” , ord e r da t e d 22 / 09 / 2 0 1 5 pa ss e d b y t h e M u m b a i Be nc h o f t he T r i bu na l , i n IT A N o. 2 91 0 /M u m/ 20 13 , for a sse ss m e n t y e a r 20 0 6 -0 7 (A P B 125 - 33 ). 5. O n t he ot he r h a n d, th e ld . D R h as p l ac e d st ro ng r e l ia n c e o n t h e i mp u gn e d or d e r . I t h as b e e n c o n t e nd e d t h a t a s c o rr ec t l y o bse rv ed b y t h e l d. CI T (A ) , a l l t he o bj e c t i on s r a i s e d b y t h e a ss e s se e w e re d ul y d i s po s e d o f b y t he A O v i d e ord er da te d 1 1. 7. 2 0 17 a n d t h a t t hu s, t h e p r oc e d ur e f or 3 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula di s po sa l o f pr e l i m i n a r y o b j e c t i o ns as l ai d d ow n by t he H o n ' b l e S u p r e me Co u rt i n “G K N D ri ve s ha ft s (I n d i a ) L t d. ” (s u p r a) , w as d u l y f ol l ow e d b y th e A O . It h a s b e e n c on t e nd e d t h a t t h e no ti c e u / s 14 3 ( 2 ) w a s r ig ht l y is s ue d, c on si de r in g t he ti m e l i n e o f t h e c a s e . 6. W e h a v e he a rd t h e p a r t i e s a nd h a v e pur su e d t he ma te r i a l o n re c or d . T he sc a n n e d c op i e s o f t he re a s on s re c o r de d b y t he A O ( A P B 75 - 76) , t h e O b j e c t i on s fi le d b y t he A ss e s se e b e f or e t he A O ( A PB 7 7 - 80 ), th e N o t i c es, is su e d u / ss, 1 4 3( 2) a nd 14 2( 1 ) o n 2 3.0 5 . 20 1 7 (A P B 8 1 - 82 ) an d t he O r de r da t e d 1 1. 07 . 2 01 7 (A P B 8 3 -8 7) a r e pl ace d be l ow for re ad y re fe r e nc e . R ea s on s r e c o rd e d b y t he A O (A BP 75 -7 6 ) : - 4 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula 5 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula Ob j ec t i o n s fi l ed b y t h e a sse s se e b e fo r e th e A O ( A BP 77 - 80 ) : - 6 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula 7 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula 8 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula 9 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula N oti c e s is su e d u / ss, 143 (2 ) an d 14 2( 1) o n 2 3. 05 . 201 7 ( A B P 8 1 -8 2) : - 10 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula 11 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula [Order dated 11.07.2017 (ABP 83-87)] :- 12 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula 13 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula 14 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula 15 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula 16 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula 7. In “G K N D r iv e s ha f t s (I nd ia ) Lt d. (s up ra ) ” , t he H o n ' b l e S u pr e m e Co ur t h as i nt e r a l ia he l d a s fo ll ow s: - “. ... H ow e ve r, w e cl a ri fy t ha t w h e n a no t i c e u/ s 14 8 o f t h e Inc o m e - t a x A ct i s i ssu e d, t h e pr op e r c ou r se o f ac t io n f or t h e not i c e e i s t o f il e a re t u r n a nd i f he so d e s i r e s, to se e k re a so ns f o r i ss ui n g n o t i c e s . T h e A O i s bo un d t o f u rn i sh re a so ns w i th i n a re a so n a b l e t i m e . O n r ec e i p t o f r e aso n s, t h e not i c e e is e nt i t l e d t o f il e ob j e c t i on s t o i ss u a n ce o f n ot i ce an d t he A O i s b ou n d t o d i s p o se o f t he sa me b y pa ss in g a spe ak i n g or d e r, b e f o r e pr o ce e d i n g wi t h t h e a ss es s m e n t i n re s pe c t o f t he a b o v e sa i d fi ve a ss e s s me nt ye a r s... . . ” 8. In “M o ti l a l R. T od i V s. A CI T ” (s up ra ), th e M u m b ai Be n c h o f t he T ri bu na l, ha s h el d th a t i n pu rs u a n ce o f “G K N D r i ve sh a ft s ( In di a ) L t d. ” (s u pr a) , t h e A O i s ob l ig ed to di sp o s e o f t h e s e o bj ec t i o n s a nd i n t i ma t e t he s a me t o t he a ss e s se e, b e f o re p roc e e d i n g f u rt he r w i t h t h e r e - ass es sm e n t pr o ce e di n g s ; t ha t t h e re af t e r, t he A O is o b l i g e d un d e r t he l a w t o i ss u e a nd s er v e n ot i c e u /s 1 4 3 (2 ) o f t h e A c t t o e na b l e h i m t o m a k e a s se ss m e n t t o t he re t u r n fi l e d by t h e a sse ss e e i n re s po n s e to t h e no t ic e i s s ue d u/ s 1 48 o f t he A c t ; t ha t t he re - a s se ss me n t o rd e r is t o b e fr a me d b y t h e A O u/ s 1 4 7/ 14 3( 3) a f t e r p r o v i d i n g ad eq ua t e o pp o r t u n it y o f he a r i n g t o t h e a sse ss e e a nd c o n si d e ri ng r e p l i e s a nd e v i d e n c e s o f t he a ss e s se e , a nd a l l o th e r a p p l i c a b l e p ro vi si on s o f t he A c t ; t h a t t h e a fo re sa i d c o m pl i a n ce s ha ve t o be ma d e by t he A O u/ s 1 4 7 t o 1 51 o f t h e I. T . A ct , re a d w i t h o t he r r e l e v a n t pr o vi si on s o f the A c t , i n a s t e p -w i se a nd c h ro no l o g i ca l m a n ne r; a n d t ha t t he r e fo r e , t he va l i di ty o f r eo pe ni ng 17 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula pr o c e ed in gs i ni t i a t e d b y t he A O , ca n b e ex a m i ne d i n t h i s st o p -w i s e or c hr on o l o g i c al ma n n e r on ly . 9. In t h e c a se o f “ A s i a n P ai n t s Lt d V s . D CIT ” , 29 6 I TR 9 0 (B o m. ) , t he po si ti o n h a s b e e n ma d e f urt h e r c l e a r, w h e n i t ha s be e n h el d t h at i f t he A O d oe s n ot a c c e p t t h e o b j e c t io ns fi l ed , h e sh al l no t p r oc ee d fu rt he r i n t h e ma t t e r w i t h i n a pe r i o d o f f ou r w e ek s f ro m t he d a t e o f r e c e ip t o f se r v i c e o f t h e o r de r o n ob j e c t i o n s, of t h e a s se ss e e. 10 . Ev i d e n t l y , th er e f o r e, u n de r t h e l a w , as l a i d d ow n i n “ G K N D ri v e sh a f t s ( I n d i a ) Lt d. ” (s u p ra ) , t h e A O is o b l i g ed t o di s po se o f th e ob j ec t i o n s ra i se d b y th e a s se s s ee c h al l e n g i n g t he re o pe n i n g o f t he a ss e s s me n t , p ri o r t o i s su in g t h e n o t i c e u / s 1 4 3 (2 ) o f t h e A ct f o r pr o c e ed in gs t o ma ke re -a ss e s s me n t. T hi s i s i n a c c ord a nc e w i t h th e na t ur al j u st i ce p r i n ci p l e o f a ud i a lt e ram pa rt e m, a ffo rd i n g d u e a n d a de qu at e o pp o r t u n i t y t o t h e a ss e s se e t o c h al l e ng e th e or d e r d i s po si n g o f t he o bj e c t i o n s. T h i s, h o w ev e r, i s u n de s i r a b l y n o t be e n d o ne i n t he pr e se n t c a se . T he o bj e c t i o n s ( A P B 7 7- 80) w e r e f i le d by t he a s se sse e on 01 . 03. 2 01 7 . T he o bj e ct i o n s w e r e di s po s ed o f v i d e o rde r (A P B 8 3- 8 7 ) da t e d 11 . 0 7. 2 0 1 7 , w h er e a s, t h e n ot i c e u /s 1 43 ( 2 ) o f t he A c t (A P B 8 1- 8 2 ) w e re i ss u e d o n 2 3. 0 5. 20 17, i . e . , pr i or t o t h e p a s sin g o f t he o r d e r di s p o si ng o f t h e ob j e c ti o n s. 11 . In vi e w o f t h e ab o v e, fi n d i n g t h e g r ie va n ce r a ise d by t he a sse ss e e by w a y o f G ro un d N o . 2, th e s a m e i s a c c e p t ed a n d it h a s he l d th at t h e ld . 18 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula CI T( A ) ha s er re d i n u p h o l di ng t he a c t i on o f t h e A O i n pr oc e ed in gs w it h t he r e - a ss e s s m e n t w it h o ut f ir st di sp o si n g o f t h e o bj e ct i on s fi l ed by t he a ss e s se e c h a l le ng i ng t he r e o p e ni ng. I n vi e w o f t h e d is c u s si o n m a d e he r ei na bo ve , w e fi nd t h at t h e l d. CI T( A ) ha s go n e wro n g i n ho l d i n g t ha t t he A O h ad dul y f ol l ow e d th e p r oc e d u re f or d i s p osa l as l a i d dow n i n “ G K N D ri ve s ha f a t s ( I nd i a ) P vt . L t d . ”, ( s up ra ), o f the o bj ec t i o ns ra is ed by th e a ss e s se e ( A P B 8 1 - 82 ). A c co rd i n g l y, no t i c e, u/ s 1 4 3 ( 2 ) o f t he I. T . A c t a n d a l l pr o c e e d i n g s p u rs u a n t t he r e t o, c u l m in at in g i n t he l d . CI T( A )’ s o rde r d a t e d 29. 0 3. 20 19, i . e. , t he O r de r und e r a p pe al , ar e c an c e l l e d . 12 . In v i e w o f t he a b o ve , n ot h i n g fu rt h e r su rv i v e s fo r a d j udi c a t i on , no r w a s a n y t h i n g el se a r gu ed . 13 . In t h e re s u l t , t he ap pe a l i s a l l o w e d . O r de r p ro n o u n c e d on 1 7. 02 . 2 02 3. Sd/- Sd/- (VIKRAM SINGH YADAV) ( A.D. JAIN ) Accountant Member Vice President Dated : 17.02.2023 “आर.के.” आदेश क त+ल,प अ-े,षत / Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकर आय ु 1त/ CIT 4. आयकर आय ु 1त (अपील)/ The CIT(A) 5. ,वभागीय त न6ध, आयकर अपील$य आ6धकरण, च8डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायक पंजीकार/ Assistant Registrar 19 ITA No. 766/Chd/2019 –The Haryana State Cooperative Supply & Marketing Federationltd, Panchkula