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ITA 862/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6261 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 07-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R V SREENIVASAN IRS
• Assessee Lawyers: G BASKAR
• Keywords: Reopening of assessment; Depreciation; Assessment record; Reason to believe
• Section: 147; 131; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, A BENCH : CHENNAI . . . , ! . '#'$ , % !& ' [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./I.T.A. NO.862/MDS/2017 / ASSESSMENT YEAR : 2007-2008 M/S. KALAIVANI PRESS PVT. LTD, C/O. SHRI. PARAMESHWARAN, MANAGING DIRECTOR, 2/674-G, VIVEKANANDA 4 TH STREET, S.R.NAGAR, TIRUPUR 641 687. [PAN AAACK 8970E] VS. THE INCOME TAX OFFICER, CORPORATE WARD -2, COIMBATORE. ( () / APPELLANT) ( *+() /RESPONDENT) / APPELLANT BY : SHRI. G. BASKAR, ADV /RESPONDENT BY : SHRI. A. R. V.SREENIVASAN, IRS, JCIT. /DATE OF HEARING : 30-08-2017 !' /DATE OF PRONOUNCEMENT : 06-09-2017 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ASSESSEE IN THIS APPEAL ASSAILS REOPENING DONE FO R THE IMPUGNED ASSESSMENT YEAR. 2. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT AGAINST THE ASSESSMENT DONE ON 11.03.2015 U/S. 147 OF THE INCOM E TAX ACT, 1961 (IN SHORT THE ACT), ASSESSEE HAD MOVED IN APPEA L BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS), TAKING A GROU ND THAT NOTICE ITA NO. 862/MDS/2017. :- 2 -: FOR REOPENING WAS NOT SERVED TO THE ASSESSEE ON OR BEFORE 31.03.2014. AS PER LD. AUTHORISED REPRESENTATIVE SINCE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DID NOT DISPOSE OF THIS GROUND , FURTHER APPEAL WAS MOVED BEFORE THE TRIBUNAL AND THIS TRIBUNAL IN ITA NO.2307/MDS/2016 HAD HELD AS UNDER:- 'THOUGH THE ASSESSING OFFICER HAS MENTIONED THAT NO TICE UNDER SECTION '148 OF THE ACT WAS ISSUED, IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT MENTIONED THE DATE OF NOTICE OR DAT E OF SERVICE. BEFORE THE ID. CIT(A), THE ASSESSEE HAS MENTIONED THAT THE REOPENI NG OF ASSESSMENT RELATING TO THE ASSESSMENT YEAR 2007-08 SHOULD HAVE BEEN DONE ON OR BEFORE 31.03.2014. BUT, THE ASSESSING OF FICER HAS OBTAINED APPROVAL FOR REOPENING OF ASSESSMENT FROM THE JCIT ONLY ON 28.03.2014 I.E. FRIDAY. IN THE ASSESSMENT ORDER; THE ASSESSING OFFICER HAS STATED THAT 'NOTICE UNDER SECTION 148 WAS ISSUED' SAFELY WITHOUT MENTIONING THE DATE. WHEN THE REOPENING OF ASSESSMENT IS LIKELY GE TTING BARRED BY 31.03.2014, WHEN THE ASSESSING OFFICER HAS ISSUED T HE 148 NOTICE TO THE ASSESSEE IS A MILLION DOLLAR QUESTION BECAUSE 2 9 TH & 30TH MARCH 2014 ARE BEING CLOSED HOLIDAYS. IN THE FIRST APPELL ATE ORDER, THE ID. CIT(A) HAS NOT ADJUDICATED THE SPECIFIC GROUND RAIS ED BY THE ASSESSEE WITH REGARD TO SERVICE OF NOTICE UNDER SECTION 148 OF THE ACT. UNDER THESE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORD ER OF THE ID. CIT(A) AND DIRECT HIM TO EXAMINE THE ISSUE AS TO WHETHER T HE ASSESSEE WAS ACTUALLY ISSUED/SERVED NOTICE UNDER SECTION 148 OF THE ACT SINCE THE APPROVAL FOR REOPENING OF ASSESSMENT WAS OBTAINED O N 28.03.2014 BEING FRIDAY. HE IS FURTHER DIRECTED TO CALL FOR TH E DETAILS/EXPLANATION AS TO WHETHER 148 NOTICE AND 143(2)/142(1) NOTICES HAVE BEEN ISSUED PRIOR TO SERVICE OF SUMMON UNDER SECTION 131 OF THE ACT ON 19.12.2014 SINCE THERE WAS NO MENTION IN THE ASSESSMENT ORDER HAVING ISSUED/SERVED ALL THE ABOVE NOTICES TO THE ASSESSEE BEFORE CONCLUDING THE REASSESSMENT UNDER SECTION 147 OF THE ACT IF THE ASSESSING OFFICER HAS FAILED TO ISSUE/SERVE THE ABOVE NOTICE(S) TO TH E ASSESSEE, THEN THE ASSESSMENT ORDER PASSED UNDER SECTION 147 OF THE ACT SHOULD BE HELD AS INVALID AND QUASHED, ACCORDINGLY. 3. CONTINUING HIS SUBMISSIONS, LD. COUNSEL, POINTE D OUT THAT THE MATTER WAS ONCE AGAIN CONSIDERED BY THE LD. COMMISS IONER OF INCOME TAX (APPEALS). AS PER THE LD. AUTHORISED REPRESENT ATIVE, LD. CIT(A) CALLED FOR THE REMAND REPORT FROM THE LD. ASSESSING OFFICER WITH REGARD TO THE CONTENTION OF THE ASSESSEE THAT NOTICE U/S. 148 OF THE ACT WAS ITA NO. 862/MDS/2017. :- 3 -: NOT SERVED. ACCORDING TO THE LD. AUTHORISED REPRES ENTATIVE, REPLY OF THE LD. ASSESSING OFFICER WAS AS UNDER:- IT IS VERIFIED FROM THE ASSESSMENT RECORDS THAT T HE NOTICE U/S 148 WAS SERVED BY 'AFFIXTURE' BY THE INSPECTOR OF INCOME TAX ATTACHED TO WARD-III(1) COIMBATORE, ON 28.03.2014 AT DOOR NO.244, METTUPALAYAM ROAD, COIMBATORE-641 043. A PHOTOCOPY OF THE PANCHNAMA FOR AFFIXTURE OF THE NOT ICE THAT WAS SUBMITTED BY THE INSPECTOR IS ENCLOSED HEREWITH FOR REFERENCE' . AS PER LD. AUTHORISED REPRESENTATIVE, LD. COMMISSIO NER OF INCOME TAX (APPEALS) HAD HELD THAT ASSESSEE HAVING CO-OPERATED WITH THE LD. ASSESSING OFFICER AND ASSESSEE HAVING NOT CHALLENGE D SERVICE OF NOTICE DURING THE COURSE OF ASSESSMENT PROCEEDINGS ANY LA CUNA STOOD CURED BY THE SEC. 292BB OF THE ACT. ACCORDING TO THE L D. AUTHORISED REPRESENTATIVE, LD. COMMISSIONER OF INCOME TAX (APP EALS) ERRONEOUSLY HELD THAT RE-ASSESSMENT WAS VALIDLY INITIATED. ARG UMENT OF THE LD. AUTHORISED REPRESENTATIVE WAS THAT NOTICE U/S. 148 OF THE ACT WAS NEVER ISSUED ON THE ASSESSEE. FURTHER, ACCORDING T O HIM, IT HAD NOW COME TO HIS KNOWLEDGE THAT A NOTICE WAS ISSUED AND SERVED ON SHRI. N. PARAMESHWARAN IN HIS RESIDENTIAL ADDRESS AND THIS, AS PER THE LD. AUTHORISED REPRESENTATIVE, COULD NOT BE DEEMED AS A VALID NOTICE ON THE ASSESSEE COMPANY. ACCORDING TO LD. AUTHORISED REPRESENTATIVE, THIS WAS A SERIOUS JURISDICTIONAL ERROR AND COULD NOT BE CURED U/S. 292BB OF THE ACT. 3. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE SUPPOR TING THE ORDERS OF THE AUTHORITIES BELOW SUBMITTED THAT ASSE SSEE HAVING CO- ITA NO. 862/MDS/2017. :- 4 -: OPERATED BEFORE THE LD. ASSESSING OFFICER IN THE RE ASSESSMENT PROCEEDINGS, NOW COULD NOT TURN BACK AND SAY THAT NOTICE U/S. 148 OF THE ACT WAS NOT SERVED ON IT. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. NOTICE DATED 28.0 3.2014 ISSUED U/S.148 OF THE ACT HAS BEEN PLACED BEFORE US BY TH E REVENUE. THE SAID NOTICE IS REPRODUCED HEREUNDER:- NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT, 196 1 P.A. NO NIL OFFICE OF THE ITO WARD III(1) DATED 28.03.2014 TO SHRI. N. PARAMESHWARAN, N. NO.244, METTUPALAYAM ROAD, COIMBATORE. WHEREAS I HAVE REASON TO BELIEVE THAT YOUR INCOME CHARGEABLE TO TAX FOR THE ASSESSMENT YEAR 2007-08 HAS ESCAPED ASSESSMENT WITHIN THE4 MEANING OF SECTION 147 OF TH E INCOME TAX ACT, 1961. I THEREFORE, PROPOSE TO ASSESS/RE-ASSESS THE INCOME FOR THE SAID ASSESSMENT RECOMPUTED/LOSS/ DEPRECIATION ALLOWANCE YOU TO DELIVER TO ME WITHIN 30 DAYS FROM THE DATE O F SERVICE OF THIS NOTICE, A RETURN IN THE PRESCRIBED FORM OF YOUR INCOME FOR THE SAID ASSESSMENT YEAR. THIS NOTICE IS BEING ISSUED AFTER OBTAINING THE NEC ESSARY SATISFACTION OF THE COMMISSIONER OF INCOME TAX. NAME: R. VIDYABHARAT ITO WARD III(1) COIMBATORE. ITA NO. 862/MDS/2017. :- 5 -: IT MAY BE TRUE THAT SHRI. N. PARAMESHWARAN WAS THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY. ADDRESS OF THE A SSESSEE COMPANY AS IT APPEARS IN THE ASSESSMENT ORDER READS AS UND ER:- M/S. KALAIVANI PRESS PRIVATE LIMITED, C/O. SHRI. N. PARAMESHWARAN, MANAGING DIRECTOR, 2/674 G, VIVEKANDA 4 TH STREET, S.R. NAGAR, TIRUPUR . THUS NEITHER A NOTICE HAS BEEN ISSUED TO THE ASSESS EE NOR THE NOTICE HAS BEEN SERVED IN THE ADDRESS OF THE ASSESSEE COM PANY. EVEN PAN OF THE ASSESSEE COMPANY IS NOT MENTIONED. SEC. 292 BB OF THE ACT RELIED ON BY THE LD. DEPARTMENTAL REPRESENTATIVE IS REPRODUCED HEREUNDER:- WHERE AN ASSESSEE HAS APPEARED IN ANY PROCEEDING OR COOPERATED IN ANY INQUIRY RELATING TO AN ASSESSMENT OR REASSESSMENT, IT SHALL BE DEEMED THAT ANY NOTICE UN DER ANY PROVISION OF THIS ACT, WHICH IS REQUIRED TO BE SERV ED UPON HIM, HAS BEEN DULY SERVED UPON HIM IN TIME IN ACCOR DANCE WITH THE PROVISIONS OF THIS ACT AND SUCH ASSESSEE S HALL BE PRECLUDED FROM TAKING ANY OBJECTION IN ANY PROCEEDI NG OR INQUIRY UNDER THIS ACT THAT THE NOTICE WAS (A) NOT SERVED UPON HIM ; OR (B) NOT SERVED UPON HIM IN TIME ; OR (C) SERVED UPON HIM IN AN IMPROPER MANNER : PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY WHETHER THE ASSESSEE HAS RAISED SUCH OBJECTION BEF ORE THE COMPLETION OF SUCH ASSESSMENT OR REASSESSMENT. THE SAID SECTION DEALS WITH A CONTINGENCY WHERE SE RVICE OF NOTICE IS DISPUTED. HOWEVER, IN OUR OPINION, WHERE A NOTICE IS NOT ISSUED AT ALL, ITA NO. 862/MDS/2017. :- 6 -: THE QUESTION OF SERVICE BECOMES IRRELEVANT. NOTICE THAT HAS BEEN PRODUCED BEFORE US BY THE REVENUE CLEARLY SHOW THA T IT WAS NOT IN THE NAME OF THE ASSESSEE COMPANY OR ITS ADDRESS. THERE BEING NO NOTICE ISSUED IN THE NAME OF THE ASSESSEE COMPANY, IT HARDLY MATTERS WHETHER AN IRRELEVANT NOTICE WAS SERVED IN TIME OR SERVED BY AFFIXTURE. THERE BEING NO VALID ISSUE OF NOTICE U/S.148 OF THE ACT ON THE ASSESSEE COMPANY, THE RE-ASSESSMENT PROCEEDINGS ARE INVALID . EX-CONSEQUENTI THE REASSESSMENT ORDER IS SET ASIDE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON WEDNESDAY, THE 6TH DAY OF SEP TEMBER, 2017, AT CHENNAI. SD/- SD/- ( . . . # ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ! . '#'$ ) (ABRAHAM P. GEORGE) % / ACCOUNTANT MEMBER $% / CHENNAI &' / DATED: 6TH SEPTEMBER, 2017. KV '( )*+* / COPY TO: 1 . / APPELLANT 3. ,-# / CIT(A) 5. *./ 0 / DR 2. / RESPONDENT 4. , / CIT 6. /12 / GF