ACIT, Ludhiana V. M/s Ramesh Steels, Ludhiana

ITA 770/CHANDI/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73458 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-01-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 28-07-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Assessment record
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.770/CHD/2011 ASSESSMENT YEAR : 2004-05 THE A.C.I.T., VS M/S RAMESH STEELS, CIRCLE I, B-XX-2185, LUDHIANA. C-203/1, PHASE-VII, FOCAL POINT, LUDHIANA. PAN : AADFR-6048Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AKHILESH GUPTA RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 23.01.2014 DATE OF PRONOUNCEMENT : 28.01.2014 O R D E R PER SUSHMA CHOWLA, JM THE APPEAL BY THE REVENUE IS DIRECTED AGAINST THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), LUDHIANA DATE D 27.05.2011 RELATING TO ASSESSMENT YEAR 2004-05 AGAINST THE ORD ER PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 ( 'THE A CT' FOR SHORT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N HOLDING THAT THE ASSESSING OFFICER RECORDING THE REASONS U/S 148 AND THE ONE ISSUING THE NOTICE U/S 148 OF I.T. ACT, 1961 ARE ENTIRELY D IFFERENT PERSONS, WHEREAS THE TRUTH IS THAT AS PER RECORDS REASONS HA VE BEEN RECORDED BY THE SAME PERSON WHO HAS ISSUED NOTICE U/S 148 AF TER OBTAINING APPROVAL FROM RANGE HEAD. 2. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N NOT FINDING THE ACTUAL FACTS THAT THE ASSESSING OFFICER RECORDING T HE REASONS U/S 148 AND THE ONE ISSUING THE NOTICE U/S 148 OF I.T. ACT, 1961 IS THE SAME PERSON WHEREAS THE SUCCESSOR ASSESSING OFFICER MERE LY SUPPLIED THE REASONS BY MERELY RE-ITERATING WHAT HIS PREDECCESSO R HAD RECORDED 2 AND SERVED. 3. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N TREATING THE ASSESSMENT AS INVALID FRAMED BY ASSESSING OFFICER U/S 143(3) WITHOUT GOING INTO THE MERITS OF THE CASE. 4. THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AND T HAT OF THE A.O. BE RESTORED. 3. THE REVENUE IS AGGRIEVED BY THE ORDER OF COMMISS IONER OF INCOME TAX (APPEALS) IN HOLDING THAT THE PROCEEDING S INITIATED UNDER SECTION 147/148 OF THE ACT SUFFER FROM GROSS LEGAL INFIRMITY AND THEREAFTER HOLDING THE ASSESSMENT TO BE BAD IN LAW. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ORIGINA L ASSESSMENT IN THE CASE WAS COMPLETED UNDER SECTION 143(1) OF THE ACT AND THEREAFTER THE ASSESSING OFFICER RECORDED REASONS FOR RE-OPENI NG THE ASSESSMENT UNDER SECTION 147 OF THE ACT AND NOTICE UNDER SECTI ON 148 OF THE ACT WAS ISSUED ON 06.03.2008. THE ASSESSEE, PURSUANT T O THE SAID NOTICE FILED THE RETURN OF INCOME AND APPEARED BEFORE THE ASSESSING OFFICER. COPY OF THE REASONS RECORDED FOR RE-OPENING OF ASSE SSMENT UNDER SECTION 147 OF THE ACT WERE GIVEN TO THE ASSESSEE A ND THE ASSESSEE IN- TURN FILED OBJECTIONS TO THE SAID RE-OPENING OF ASS ESSMENT WHICH IN- TURN WERE REPLIED TO BY THE ASSESSING OFFICER. THE ASSESSING OFFICER THEREAFTER DISALLOWED THE DEDUCTION ON ACCOUNT OF K EYMAN INSURANCE CLAIMED AT RS. 90,00,000/-. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) ON THE PERUSAL OF THE RECORD CAME TO A FINDING THAT IN THE CASE UNDER CONSIDERATION, IT HAS BEEN POINT ED OUT THAT THE NOTICE U/S 148 (FORMING PART OF THIS O RDER AS ANNEXURE 'A) DATED 6.3.2009 HAS BEEN ISSUED BY THE THEN ASSESSING OFFICER THE DCIT, CIRCLE I, .LUDHIANA SHRI RATTAN CHAND. ON THE OTHER HAND THE REASONS TO BELIEVE THAT THE I NCOME HAS ESCAPED ASSESSMENT HAVE BEEN RECORDED AND SIGNED VIDE UNDATED ANNEXURE BY THE SU BSEQUENT ASSESSING OFFICER THE ACIT, CIRCLE I, LUDHIANA SHRI ADITYA SHUKLA (THE SAID ANN EXURE FORMING PART OF THIS ORDER AS ANNEXURE 'B'). THE ABOVE FACTUAL POSITION INDICATES THAT AT THE TI ME OF ISSUING THE NOTICE U/S 3 148, THERE WERE NO REASONS FOR ESCAPEMENT OF INCOME RECORDED BY THE THEN ASSESSING OFFICER AND WHICH MAKES THE COMPLETE PROCEEDINGS VOID AND B AD IN LAW. IN VIEW OF THE ABOVESAID FINDING, THE ASSESSMENT WAS HELD TO BE BA D IN LAW AND WAS QUASHED BY THE COMMISSIONER OF INCOME TAX (APPEALS) . THE REVENUE IS IN APPEAL AGAINST THE SAID FINDING OF THE COMMIS SIONER OF INCOME TAX (APPEALS). 6. THE LD. DR FOR THE REVENUE PRODUCED ASSESSMENT R ECORDS AND POINTED OUT THAT THE REASONS FOR RE-OPENING UNDER S ECTION 147 OF THE ACT WERE RECORDED BY THE DY. COMMISSIONER OF INCOME TAX SHRI RATTAN CHAND ON 18.02.2009. THEREAFTER THE ADDL. C OMMISSIONER OF INCOME TAX GAVE PERMISSION FOR ISSUE OF NOTICE UND ER SECTION 148 OF THE ACT VIDE LETTER DATED 26.02.2009. IT WAS FURTHE R POINTED OUT BY THE LD. DR FOR THE REVENUE THAT THE SAME DY. COMMISSION ER OF INCOME TAX I.E. SHRI RATTAN CHAND SERVED A NOTICE FOR RE-ASSES SMENT UNDER SECTION 148 OF THE ACT DATED 06.03.2009 AND ANOTHER NOTICE DATED 31.3.2009 UPON THE ASSESSEE WHICH HAS NOT BEEN DISPUTED BY TH E ASSESSEE. IT WAS FURTHER POINTED OUT BY THE LD. DR FOR THE REVENUE T HAT ON 29.05.2009 THE SUCCESSOR ASSESSING OFFICER SHRI ADITYA SHUKLA GAVE A COPY OF THE REASONS RECORDED FOR RE-OPENING THE ASSESSMENT TO T HE ASSESSEE BUT THAT WOULD NOT LEAD TO THE CONCLUSION THAT THE REASONS W ERE RECORDED AFTER THE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. IT WAS FURTHER POINTED OUT BY THE LD. DR FOR THE REVENUE THAT THE SAID PLEA IN ANY CASE COULD NOT BE RAISED BY THE ASSESSEE IN VIEW OF THE PROVISIONS OF SECTION 292BB OF THE ACT. IT WAS FURTHER BROUGHT TO OUR NOTICE THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAD FAILED TO DECIDE THE ISSUE ON MERITS AS THE ASSESSMENT FRAMED IN THE CASE WAS QUASHED BY THE COMMISSIONER OF INCOME TAX (APPEALS). 4 7. THE LD. AR FOR THE ASSESSEE PLACED RELIANCE ON T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND POINTED OU T THAT THE REASONS FOR RE-OPENING THE ASSESSMENT WHICH WERE HA NDED OVER TO THE ASSESSEE WERE SIGNED BY THE SUCCESSOR ASSESSING OFF ICER SHRI ADITYA SHUKLA, COPY OF WHICH HAS BEEN ENCLOSED IN THE PAPE R BOOK AT PAGES 12 & 13 OF THE PAPER BOOK. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE RE-OPENING OF ASSESSMENT UNDER SECTION 147/148 OF THE INCOME TAX ACT. THE ORIGINAL ASSESSMENT IN THE CASE WAS COMPLETED UNDER SECTION 143(1) OF THE ACT. THEREAFTER, THE ASSESSING OFFICER RECORDED REASONS FOR RE-OPENING ON 18.02.2009 AND THE COPY OF THE FORM FOR RECORDING T HE REASONS FOR INITIATING PROCEEDINGS UNDER SECTION 147 AND FOR OB TAINING APPROVAL OF THE ADDL. COMMISSIONER OF INCOME TAX, RANGE-1, LUDH IANA UNDER SECTION 151(2) OF THE ACT IS DATED 18.02.2008 AND I S PLACED ON RECORD. THE REASONS FOR RE-OPENING ARE ENCLOSED AS ANNEXURE TO THE SAID FORM AND SIGNED BY SHRI RATTAN CHAND, DY. COMMISSIONER O F INCOME TAX, CIRCLE I, LUDHIANA. THEREAFTER, THE ADDL. COMMISSIO NER OF INCOME TAX RANGE-I LUDHIANA VIDE LETTER DATED 26.02.2009 HAD G RANTED THE APPROVAL FOR ISSUE OF NOTICE UNDER SECTION 148 OF T HE ACT IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-05. THE C OPY OF THE SAID LETTER IS ALSO PLACED ON RECORD BY THE LD. DR FOR T HE REVENUE. THEREAFTER, NOTICE UNDER SECTION 148 OF THE ACT DAT ED 06.03.2009 HAD BEEN ISSUED TO THE ASSESSEE WHICH HAS BEEN ADMITTED LY RECEIVED BY THE ASSESSEE ON 14.03.2009. PURSUANT TO THAT, ANOTHER NOTICE DATED 31.3.2009 WAS ISSUED TO THE ASSESSEE. THE ASSESSEE IN HIS PAPER BOOK HAS ANNEXED THE COPY OF THE NOTICE DATED 06.03.2009 ISSUED UNDER SECTION 148 OF THE ACT AT PAGE 10 OF THE PAPER BOOK , PURSUANT TO WHICH THE RETURN OF INCOME WAS FILED ON 29.07.2004. THE COPY OF THE 5 ACKNOWLEDGEMENT OF FILING THE SAID RETURN OF INCOME IS ENCLOSED AT PAGE 11 OF THE PAPER BOOK. THE ASSESSEE CLAIMS THA T IT HAD RECEIVED THE REASONS FOR RE-OPENING ASSESSMENT UNDER SECTION 147 OF THE ACT SIGNED BY THE SUCCESSOR I.E. SHRI ADITYA SHUKLA, AC IT, CIRCLE-I LUDHIANA WHICH ARE ENCLOSED AT PAGES 12 & 13 OF THE PAPER BOOK. AFTER VERIFYING THE ASSESSMENT RECORD AND PERUSING THE VARIOUS DOCUMENTS FILED BY BOTH THE AUTHORIZED REPRESENTATI VES, WE COME TO A FINDING THAT THE REASONS FOR RE-OPENING THE ASSESSM ENT UNDER SECTION 147 OF THE ACT WERE RECORDED BY SHRI RATTAN CHAND, DCIT, CIRCLE-I, LUDHIANA ON 18.02.2009. THEREAFTER, THE ADDL. CIT HAD GIVEN A PERMISSION/SANCTION FOR ISSUE OF NOTICE UNDER SECTI ON 148 OF THE ACT VIDE LETTER DATED 26.02.2009 PURSUANT TO WHICH THE SAME DCIT I.E. SHRI RATTAN CHAND HAD ISSUED THE NOTICE UNDER SECTION 14 8 OF THE ACT DATED 06.03.2009 WHICH HAS BEEN SERVED UPON THE ASSESSEE ON 14.03.2009. THE SERVICE OF THE SAID NOTICE IS NOT DISPUTED BY T HE ASSESSEE. THE COPY OF THE REASONS GIVEN TO THE ASSESSEE ON 29.05. 2009 ARE ADMITTEDLY SIGNED BY SHRI ADITYA SHUKLA, ACIT BUT THE SAID ANN EXURE CANNOT BE HELD TO BE THE REASONS RECORDED FOR RE-OPENING. IN THE INSTANT CASE, SINCE THE ASSESSMENT WAS BEING RE-OPENED AFTER THE EXPIRY OF PERIOD OF FOUR YEARS FROM THE DATE OF FILING RETURN OF INCOME , SANCTION FOR ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT WAS REQUIRED UNDER SECTION 151(2) OF THE ACT AND WITHOUT THE SAID SANCTION, TH E ASSESSING OFFICER WAS NOT AUTHORIZED TO EVEN ISSUE THE NOTICE FOR RE- OPENING UNDER SECTION 148 OF THE ACT. THE SAID SANCTION HAS BEEN ACCORDED TO THE ASSESSING OFFICER BY THE ADDL. CIT, LUDHIANA ON 26. 02.2009 AND NECESSARY EVIDENCE IN THIS REGARD HAS BEEN FILED ON RECORD. 9. IN THE TOTALITY OF THE ABOVESAID FACTS AND CIRCU MSTANCES, WE HOLD THAT THE REASONS FOR RE-OPENING THE ASSESSMENT WERE RECORDED BY SHRI RATTAN CHAND, DCIT, LUDHIANA ON 18.02.2009 PURSUANT TO WHICH THE 6 ADDL. CIT GAVE THE SANCTION ON 26.02.2009 AND THERE AFTER NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 06.03.2009. I N THE ABOVESAID CIRCUMSTANCES, WE FIND NO MERIT IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND WE REVERSE THE FINDING OF COMMISSIONER OF INCOME TAX (APPEALS) IN RELATION TO THE RE-ASSESSME NT PROCEEDINGS INITIATED AGAINST THE ASSESSEE BY WAY OF RECORDING OF REASONS UNDER SECTION 147 OF THE ACT AND ISSUE OF NOTICE UNDER SE CTION 148 OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE REVENUE A RE THUS, ALLOWED IN THIS REGARD. HOWEVER, AS THE COMMISSIONER OF INCOM E TAX (APPEALS) HAD FAILED TO ADDRESS THE ISSUE RAISED ON MERITS OF THE ADDITION, WE REMIT THE SAME BACK TO THE FILE OF COMMISSIONER OF INCOME TAX (APPEALS) TO ADJUDICATE THE ISSUE ON MERITS. 10. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY,2014. SD/- SD/- ( T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED: 28 TH JANUARY,2014 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR. ASSISTANT REGISTRAR ITAT,CHD.