POOJA DEVELOPERS, MUMBAI V. ITO WD 12(1)(2), MUMBAI

ITA 7751/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3203 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 10-02-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 30-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Competent authority
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J , MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER IT A NO. 7751 /MUM/201 4 : (A.Y : 20 06 - 07 ) M/S. POOJA DEVELOPERS 513, SAMARTHA PLAZA, RRT ROAD, MULUND, MUMBAI 400 081. PAN : AA IFP5595M ( APPELLANT ) VS. ITO, WARD - 12(1)(2), MUMBAI (RESPONDENT) ASSESSEE BY : SHRI M. SUBRAMANIAN REVENUE BY : SHRI ASGHAR ZAIN DATE OF HEARING : 0 8 /0 6 /2016 DATE OF PRONOUNCEMENT : 15 /0 6 /2016 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 23 , MUMBAI DATED 30 . 10 .201 4 , PERTAINING TO THE ASSESSMENT YEAR 200 6 - 07 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 31 . 12 .201 3 UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN THIS APPEAL, THE FIRST AND THE FOREMOST ISSUE RAISED BY THE ASSESSEE IS BY WAY OF ADDITIONAL GROUNDS OF APPEAL , WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRC UMSTANCES OF THE CASE & IN LAW, THE PROCEEDINGS INITIATED BY ISSUANCE OF NOTICE U/S 148 OF THE I.T. ACT, IS INVALID AND BAD IN LAW. 2 M/S. POOJA DEVELOPERS ITA NO. 7751/MUM/2014 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147 OF THE I.T. ACT, IS INVALID AND BAD IN LAW. 3. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE AFORESAID GROUNDS WERE INADVERTENTLY NOT RAISED ORIGINALLY BUT THE SAME INVOLVED A PURE POINT OF LAW AND GOES TO THE ROOT OF THE MATTER AND, THEREFORE, THEY MAY BE ADMITTED FOR ADJUDICATION AS ADDITIONAL GROUNDS OF APPEAL. THE LD. DR APPEARING FOR THE REVENUE HAS NOT CONTROVERTED THE FACTUAL MATRIX BROUGHT OUT BY THE LEARNED REPRESENTATIVE. 4. OSTENSIBLY, IN THE PRESENT CASE, THE ASSESSMENT ORDER IN DISPUTE HAS BEEN PASSED BY THE ASSESSING OFFICER BY ISSUANCE OF NOTICE U/S 147/148 OF THE ACT AND THE CHALLENGE BEFORE US , BY WAY OF ADDITIONAL GROUNDS , IS TO THE VALIDITY OF SUCH INITIATION OF THE ASSESSMENT PROCEEDINGS. SINCE THE ADDITIONAL GROUNDS OF APPEAL RELATE TO AN ISSUE WHICH INVOLVES A POINT OF LAW AND THE RELEVANT FACTS ARE ALREADY ON RECORD, THE SAME IS ADMITTED FOR ADJUDICATION FOLLOWING THE PARITY OF REASONING LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF N ATIO NAL T HERMAL P OWER C O. LTD. , 229 ITR 383 (SC) . 5. BRIEFLY PUT, THE RELEVANT FACTS ARE THAT THE APPELLANT IS A PARTNERSHIP FIRM WHICH IS ENGAGED IN THE BUSINESS OF DEVELOPERS & BUILDERS. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, IT FILED A RETURN OF INC OME ON 30.10.2006 DECLARING TOTAL INCOME AT NIL WHICH, INTER - ALIA , INCLUDED A CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT AMOUNTING TO RS.7,74,122/ - . THE RETURN OF INCOME WAS DULY PROCESSED U/S 143(1) OF 3 M/S. POOJA DEVELOPERS ITA NO. 7751/MUM/2014 THE ACT AND SUBSEQUENTLY IT WAS TAKEN UP FOR SCR UTINY ASSESSMENT U/S 143(3) OF THE ACT DATED 31.12.2008 WHEREIN THE RETURNED INCOME WAS ACCEPTED. ACCORDINGLY, THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 80IB(10) OF THE ACT WAS ACCEPTED AS SUCH. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICE U/S 148 O F THE ACT ON 17.9.2012 , AFTER RECORDING REASONS , AND REOPENED THE ASSESSMENT ON THE GROUND THAT THE DEDUCTION U/S 80IB(10) OF THE ACT WAS WRONGLY ALLOWED. IN THE ENSUING ASSESSMENT FINALIZED U/S 143(3) R.W.S. 147 OF THE ACT DATED 31.12.2013 THE ASSESSING OFFICER DENIED THE DEDUCTION CLAIMED U/S 80IB(10) OF THE ACT AND ASSESSED THE TOTAL INCOME AT RS.7,74,122/ - . THE ASSESSEE - FIRM CARRIED OUT THE MATTER IN APPEAL BEFORE THE CIT(A) , WHO AFFIRMED THE STAND OF ASSESSING OFFICER THAT THE ASSESSEE WAS NOT ELIGI BLE FOR CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. 6. BEFORE US, THE ASSESSEE - FIRM HAD ASSAILED THE ORDER OF CIT(A) ON THE MERITS OF THE CLAIM AS WELL AS ON A POINT OF LAW CONTENDING THAT THE PROCEEDING INITIATED BY ISSUANCE OF NOTICE U/S 148 OF THE ACT WAS INVALID AND CONSEQUENTLY THE IMPUGNED ASSESSMENT IS BAD IN LAW. SINCE THE LATTER ISSUE GOES TO THE ROOT OF THE MATTER, SAME IS BEING TAKEN UP AT THE THRESHOLD. 7. ON THIS ASPECT, THE CASE SET - UP BY THE ASSESSEE IS THAT THE NOTICE U/S 148 OF THE ACT D ATED 17.9.2012 HAS BEEN ISSUED BY THE ASSESSING OFFICER AFTER OBTAINING APPROVAL OF ADDL. COMMISSIONER OF INCOME - TAX, RANGE - 12(1) WHEREAS THE PRESCRIBED AUTHORITY IS THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR 4 M/S. POOJA DEVELOPERS ITA NO. 7751/MUM/2014 COMMISSIONER , AS PER THE REQUIREMENT OF PROVISO BELOW SUB - SECTION (1) OF SECTION 151 OF THE ACT. 8. IN THIS CONTEXT, IT WOULD BE RELEVANT TO REPRODUCE SEC. 151(1) OF THE ACT WHICH READ AS UNDER : - IN A CASE WHERE AN ASSESSMENT UNDER SUB - SECTION (3) OF SECTION 143 OR SECTION 147 HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO NOTICE SHALL BE ISSUED UNDER SECTION 148 BY AN ASSESSING OFFICER, WHO IS BELOW THE RANK OF ASSISTANT COMMISSIONER OR DEPUTY COMMISSIONER, UNLESS THE JOINT COMMISSIONER IS SATISFIED ON THE REASONS RECORDED BY SUCH ASSESSING OFFICER THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTICE : PROVIDED THAT, AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, NO SUCH NOTICE SHALL BE ISSUED UNLESS THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY THE ASSESSING OFFICER AFORESAID, THAT IT IS A FIT CASE FOR THE ISSUE OF SUCH NOTIC E 9. FACTUALLY SPEAKING, IN THE PRESENT CASE THE ASSESSMENT YEAR INVOLVED IS 2006 - 07 AND THE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 31.12.2008. THE NOTICE U/S 148 IS DATED 17.9.2012 WHICH IS BEYOND THE PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THEREFORE, THE INSTANT FACT - SITUATION IS COVERED BY SUB - SECTION (1) OF SECTION 151 OF THE ACT READ WITH THE PROVISO , WHICH PRESCRIBES THAT WHERE ASSESSMENT HAS BEEN MADE U/S 143( 3 ) OF THE ACT AND THE NOTICE U/S 148 IS TO BE ISSUED AFTER THE EXPIRY OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, NO SUCH NOTICE SHALL BE ISSUED UNLESS THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR C OMMISSIONER IS SATISFIED, ON THE REASONS RECORDED BY THE ASSESSING OFFICER , THAT IT IS A FIT CASE FOR ISSUE OF SUCH 5 M/S. POOJA DEVELOPERS ITA NO. 7751/MUM/2014 NOTICE. OSTENSIBLY, IN THE PRESENT CASE THE NOTICE ISSUED U/S 148 OF THE ACT, A COPY OF WHICH HAS BEEN PLACED AT PAGE 25 OF THE PAPER BOOK , REVEAL S THAT THE APPROVAL HAS BEEN ACCORDED BY THE ADDITIONAL COMMISSIONER OF INCOME - TAX , WHO IS NOT COMPETENT AUTHORITY REFERRED TO IN THE FIRST PROVISO TO SEC. 151(1) OF THE ACT. AT THE TIME OF HEARING, EVEN THE RECORDS PRODUCED BY THE DEPARTMENT REVE AL THAT THE F ORM FOR RECORDING THE REASONS FOR INITIATING PROCEEDING U/S 148 OF THE ACT DEPICTS THE SATISFACTION OF THE ADDITIONAL COMMISSIONER OF INCOME - TAX AND NOT BY ANY OF THE AUTHORITIES SPECIFIED IN THE PROVISO TO SEC. 151(1) OF THE ACT WHICH IS SQ UARELY ATTRACTED IN THE PRESENT CASE. THEREFORE, THE INITIATION OF PROCEEDING BY ISSUANCE OF SUCH NOTICE U/S 148 OF THE ACT SUFFERS FROM AN ILLEGAL INFIRMITY , AND IS LIABLE TO BE SET - ASIDE, AND WE DO SO. AS A CONSEQUENCE, THE SUBSEQUENT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER DATED 31.12.2013 IS BAD IN THE EYES OF LAW AND IS HEREBY QUASHED. 10. IN VIEW OF THE AFORESAID DECISION, THE GROUNDS RAISED BY THE ASSESSEE WITH RESPECT TO THE MERITS OF THE ADDITION ARE RENDERED ACADEMIC AND ARE NOT REQUIR E D TO BE ADJUDICATED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 1 5 T H JUNE, 2016. SD/ - SD/ - ( SANJAY GARG ) JUDICIAL MEMBER ( G.S. PANNU ) ACCOUNTANT MEMBER MUMBAI, DATE : 1 5 T H JUNE , 2016 *SSL* 6 M/S. POOJA DEVELOPERS ITA NO. 7751/MUM/2014 COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, J BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI