SHREE SATYANARAYAN INVESTMENTS CO,. LTD, MUMBAI V. DCIT 1(3), MUMBAI

ITA 7884/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3390 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 15-05-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 22-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P R KOTHARI
• Keywords: Reopening of assessment; Rectification of order; Reassessment proceedings
• Section: 143(3); 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, M UMBAI BEFORE S/SHRI B.R.MITTAL,(JM) AND D.KARUNAKAR RAO ( AM) . . , . ! , '# '# '# '# ' '' ' $ $ $ $ ./I.T.A. NO.7884/M/2011 ( & ' / ASSESSMENT YEAR:2003-04) SHREE SATYANARAYAN INVESTMENTS CO. LTD., 3 RD FLOOR, SHREE NIWAS HOUSE, HAZARIMA SOMANI MARG, FORT, MUMBAI. & & & & / VS. DCIT 1(3), 541, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI ( '# ./ )* ./PAN/GIR NO. : AABCS 4626 H ( (+ / APPELLANT) .. ( ,-(+ / RESPONDENT) (+ . ' / APPELLANT BY : SHRI P.R. KOTHARI ,-(+ / . ' /RESPONDENT BY: SHRI MANOJ KUMAR & / 0# / DATE OF HEARING : 15.5.2013 12' / 0# /DATE OF PRONOUNCEMENT : 17. 5..2013 '3 / O R D E R PER B.R.MITTAL, JM: THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2003-04 AGAINST ORDER DATED 9.8.2011 OF LD CIT(A). 2. IN GROUND NO.1 OF APPEAL, ASSESSEE HAS DISPUTED THE VALIDITY OF REOPENING OF ASSESSMENT U/S.147 OF THE ACT. 3. WE HAVE CONSIDERED SUBMISSIONS OF LD REPRESENTAT IVES OF PARTIES AND HAVE PERUSED ORDERS OF AUTHORITIES BELOW. WE OBSERVE T HAT ASSESSEE ORIGINALLY FILED RETURN OF INCOME ON 17.11.2003 DECLARING TOTAL INCOME OF RS.2 ,13,790/- UNDER THE GENERAL PROVISIONS OF THE ACT AND TOTAL INCOME OF RS.15,34, 417/- U/S.115JB OF THE ACT. THE ASSESSMENT WAS COMPLETED U/S.143(3) ON 28.2.2006 AT A TOTAL INCOME OF RS.8,15,250/- I.T.A. NO.7884/M/2011 ASSESSMENT YEAR:2003-04 2 AS PER GENERAL PROVISIONS OF THE ACT. THEREAFTER, RECTIFICATION ORDER U/S.154 OF THE ACT WAS PASSED WHEREIN, TDS CREDIT ON DIVIDEND INCOME W AS ALLOWED. WE ALSO OBSERVE THAT ASSESSEE FILED APPEAL BEFORE LD CIT(A) AND LD CIT(A ) DISPOSED OF THE APPEAL VIDE ORDER DATED 16.2.2009, COPY PLACED AT PAGES 17 TO 21 OF P B. ON PERUSAL OF ORDER OF LD CIT(A), IT IS OBSERVED THAT ONE OF THE GROUND TAKEN BY ASSE SSEE WAS TO OBJECT THE RESTRICTION OF DEDUCTION U/S.80M TO A SUM OF RS.95,15,057 AS AGAIN ST ASSESSEES CLAIM OF RS.1,02,16,513/-. LD CIT(A) REJECTED SAID GROUND O F APPEAL TAKEN BY THE ASSESSEE BY CONFIRMING THE ACTION OF AO. WE ALSO OBSERVE THAT ASSESSEE FILED FURTHER APPEAL BEFORE THE TRIBUNAL BEING I.T.A. NO.3457/M/2009 ON THE SAM E VERY ISSUE. HENCE, IT CAN BE SAID THAT ORDER OF AO IN RELATION TO DEDUCTION CLAIMED U /S.80M HAD ALREADY BEEN MERGED WITH THE ORDER OF LD CIT(A). WE ALSO OBSERVE THAT AO IN ITIATED REASSESSMENT PROCEEDINGS BY ISSUING NOTICE U/S.148 OF THE ACT ON 26.3.2010 ON T HE GROUND THAT ASSESSEE WAS NOT ELIGIBLE FOR ANY DEDUCTION U/S.80M OF THE ACT DURIN G THE YEAR I.E. ASSESSMENT YEAR UNDER CONSIDERATION AND, ACCORDINGLY, IT HAS RESULTED IN UNDER ASSESSMENT OF INCOME TO THE EXTENT OF RS.95,15,057/- WITHIN THE MEANING OF SECT ION 147 OF THE ACT . WE OBSERVE THAT AO HAS INITIATED REASSESSMENT PROCEEDINGS ON THE IS SUE SUBSEQUENT TO THE DATE WHEN ORDER OF AO ON THE SAME VERY ISSUE HAD ALREADY BEEN MERGED WITH THE ORDER OF LD CIT(A). NOT ONLY THIS, IT IS OBSERVED THAT REASSES SMENT PROCEEDINGS IS INITIATED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF ASSESSMENT YEA R AND THERE IS NO ALLEGATION THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT ON ACCOUNT OF FAILURE OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS NECE SSARY FOR ASSESSMENT FOR THAT ASSESSMENT YEAR. THEIR LORDSHIPS OF HONBLE BOMBAY HIGH COU RT IN THE CASE OF SOUND CASTING PVT. LTD. VS. DCIT AND OTHERS, 250 CTR 119 AND ALSO IN THE CASE OF TITANOR COMPONENTS LTD. VS. ASSTT. CIT AND OTHERS, 343 ITR 183 (BOM) ) HAVE HELD THAT IF THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISC LOSE ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT FOR THAT ASSESSMENT YEAR AND THE ASSESSM ENT IS MADE U/S 143(3) OF THE ACT, INITIATION OF REASSESSMENT PROCEEDINGS BEYOND 4 YEA RS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IS NOT JUSTIFIED IF THERE IS NO ALL EGATION IN THE REASONS RECORDED FOR REOPENING THE ASSESSMENT THAT THERE WAS ANY FAILURE ON HIS PART TO FULLY AND TRULY DISCLOSE MATERIAL FACTS NECESSARY FOR ASSESSMENT. CONSIDERING ABOVE DECISIONS OF THEIR LORDSHIPS OF HONBLE JURISDICTIONAL HIGH COURT AND THE FACTS OF THE CASE AS WELL AS REASONS RECORDED BY THE AO, WHICH ARE STATED BY THE AO IN PARA 3 OF THE ASSESSMENT I.T.A. NO.7884/M/2011 ASSESSMENT YEAR:2003-04 3 ORDER ITSELF, WE HOLD THAT INITIATION OF REASSESSME NT PROCEEDINGS IS NOT ONLY INVALID BUT IS ALSO BARRED BY LIMITATION AS PER PROVISO TO SECTION 147 OF THE ACT. HENCE, THE ASSESSMENT ORDER PASSED U/S.143(3) R.W.S 147 OF THE ACT IS NOT VALID IN LAW. ACCORDINGLY, GROUND NO.1 OF APPEAL TAKEN BY ASSESSE E THAT REOPENING OF ASSESSMENT IS NOT VALID IS ALLOWED BY QUASHING THE ASSESSMENT ORD ER. 4. IN GROUND NO.2 OF APPEAL, ASSESSEE HAS DISPUTED THE DISALLOWANCE OF DEDUCTION U/S.80M OF THE ACT. SINCE WE HAVE HELD THAT INITIA TION OF REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT IS NOT VALID, WE DO NOT CONSIDER IT NECESSARY TO ADJUDICATE GROUND NO.2 OF APPEAL. 5. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 17TH MAY , 2 013 '3 / 12' #' 4 5&6 17 TH MAY , 2013 2 / 7 SD/- SD/- ( . ! /D.KARUNAKAR RAO ) ( . . /B.R.MITTAL) '# / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 5& DATED 17 / 05/2012 . & . ./ PARIDA , SR. PS '3 '3 '3 '3 / // / ,0A ,0A ,0A ,0A B'A'0 B'A'0 B'A'0 B'A'0 / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. C ( ) / THE CIT(A)- 4. C / CIT 5. AD7 ,0& , , / DR, ITAT, MUMBAI 6. 7 E / GUARD FILE. '3& / BY ORDER, -A0 -A0 -A0 -A0 ,0 ,0,0 ,0 //TRUE COPY// F ) (ASSTT. REGISTRAR) , / ITAT, MUMBAI