DCIT CIR - 7(1), MUMBAI V. M/s. NORMANDY DEVELOPMENTS P. LTD., MUMBAI

ITA 848/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7670 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2000-2001
• Appeal Filed On: 09-02-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRA BHAT JHA; PEEYUSH JAIN S S RANA
• Assessee Lawyers: M D INAMDAR
• Keywords: Reassessment proceedings; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI R.S.PADVEKAR, JM ITA NO.838/MUM/2009 : ASST.YEAR 2000-2001 M/S.NORMANDY DEVELOPMENTS PVT.LTD. C/O.RAFFLES SOLUTIONS PRIVATE LIMITED 8 TH FLOOR, THE ESTATE 121, DICKENSON ROAD, BANGALORE-560 042 PA NO.AAACN5541N. VS. THE DY.COMMISSIONER OF INCOME-TAX CIRCLE 7(1) MUMBAI. (APPELLANT) (RESPONDENT) ITA NO.848/MUM/2009 : ASST.YEAR 2000-2001 THE DY.COMMISSIONER OF INCOME-TAX CIRCLE 7(1) MUMBAI. VS. M/S.NORMANDY DEVELOPMENTS PVT.LTD. C/O.RAFFLES SOLUTIONS PRIVATE LIMITED 8 TH FLOOR, THE ESTATE 121, DICKENSON ROAD, BANGALORE-560 042 (APPELLANT) (RESPONDENT) REVENUE BY : S/SHRI PEEYUSH JAIN, S.S.RANA & PRABHA T JHA ASSESSEE BY : SHRI M.D.INAMDAR O R D E R PER R.S.SYAL, AM : THESE TWO CROSS APPEALS ONE BY THE ASSESSEE AND O THER BY THE REVENUE ARISE OUT OF THE ORDER PASSED BY THE COMMISSIONER O F INCOME-TAX (APPEALS) ON 14.11.2008 IN RELATION TO THE ASSESSMENT YEAR 2000- 2001. 2. THE FIRST GRIEVANCE OF THE ASSESSEE IS AGAINST T HE INITIATION OF REASSESSMENT PROCEEDINGS. GROUND NO.2(III) RAISED BY THE ASSESSE E READS AS UNDER:- REASSESSMENT MADE PURSUANCE TO NOTICE U/S.148 WITH OUT FURNISHING THE REASONS FOR REOPENING TO THE APPELLANT IS INVAL ID. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE FURNISHED RETURN OF INCOME DECLARING LOSS OF RS.51,100. IN THE INSTANT PROCEEDINGS, THE ASSESSING OFFICER ISSUED NOTICE U/S.148 AND COMPLETED THE ASS ESSMENT AT A TOTAL INCOME OF RS.1,83,57,453. IN THE FIRST APPEAL THE LEARNED CIT (A) ALLOWED SOME RELIEF, WHILE ITA NOS.838 & 848/MUM/2009 M/S.NORMANDY DEVELOPMENTS PVT. LTD. 2 SUSTAINING OTHER ADDITIONS. THAT IS HOW BOTH THE SI DES ARE IN APPEAL BEFORE US FOR THEIR RESPECTIVE STANDS. 4. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED T HAT THE ASSESSEE VIDE ITS LETTER DATED 31.5.2007 REQUESTED THE ASSESSING OFFI CER TO FURNISH COPY OF REASONS RECORDED BY HIM FOR COMING TO THE CONCLUSION THAT T HE INCOME HAD ESCAPED ASSESSMENT. COPY OF THE SAID LETTER WAS ALSO PLACED ON RECORD. IT WAS STATED THAT DESPITE SUCH LETTER AND OTHER ORAL REQUESTS MADE BY THE ASSESSEE, THE A.O. DID NOT FURNISH THE REASONS WHICH LED TO THE REOPENING OF T HE ASSESSMENT. THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT RAISE ANY OBJEC TION TO THIS ARGUMENT PUT FORTH ON BEHALF OF THE ASSESSEE. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS NOTED THAT THE HONBLE SUPREME COURT I N THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. ITO AND ORS. [(2003) 259 ITR 19 (SC)] HAS HELD THAT THE REASONS FOR REOPENING MUST BE DISCLOSED TO THE ASSESSEE. ON SUCH REASONS THE ASSESSEE HAS RIGHT TO RAISE OBJECTIONS AND THE A.O. IS DUTY BOUN D TO DISPOSE OFF SUCH OBJECTIONS BY A SPEAKING ORDER BEFORE PROCEEDING WITH THE ASSE SSMENT. IN THAT VIEW OF THE MATTER IT BECOMES APPARENT THAT UNLESS THE REASONS ARE FURNISHED TO THE ASSESSEE DESPITE REQUEST, THE COMPLIANCE TO THE DIRECTIONS O F THE HONBLE SUPREME COURT FOR FIRSTLY DEALING WITH SUCH OBJECTIONS BEFORE PROCEED INGS WITH THE ASSESSMENT, CANNOT BE COMPLIED WITH. AS SUCH, THE ASSESSING OFFICER IS OBLIGED TO FURNISH SUCH REASONS AND DISPOSE OFF SUCH OBJECTIONS BY PASSING A SEPARATE ORDER BEFORE VENTURING TO PASS ASSESSMENT ORDER ON MERITS. SINCE THE ASSESSEE WAS NOT SUPPLIED THE REASONS FOR REASSESSMENT AGAINST THE SPECIFIC R EQUEST, IN OUR CONSIDERED OPINION, THERE IS A VIOLATION OF THE JUDGEMENT RENDERED BY T HE HONBLE APEX COURT IN THE AFORE-NOTED CASE OF GKN DRIVESHAFTS (INDIA) LTD. (SUPRA) . WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER AND RESTORE THE MATTER TO THE FI LE OF A.O. FOR FURNISHING COPY OF REASONS TO THE ASSESSEE FOR THE REOPENING OF THE AS SESSMENT AND THEREAFTER DISPOSE OFF THE OBJECTIONS TO SUCH REASONS, IF ANY, BEFORE PROCEEDING TO MAKE ASSESSMENT. ITA NOS.838 & 848/MUM/2009 M/S.NORMANDY DEVELOPMENTS PVT. LTD. 3 SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE JURISDIC TIONAL HIGH COURT IN THE CASE OF ALLANA COLD STORAGE LTD VS. ITO & ORS. [(2006) 287 ITR 1 (BOM.)] . 6. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 12 TH DAY OF FEBRUARY, 2010. SD/- SD/- ( R.S.PADVEKAR ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI : 12 TH FEBRUARY, 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) VII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI. ITA NOS.838 & 848/MUM/2009 M/S.NORMANDY DEVELOPMENTS PVT. LTD. 4 DATE INITIAL 1. DRAFT DICTATED ON 11.02.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 12.02.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER. *