Dr. Raviraj Ajit Shinde, Sangli V. Income-tax Officer, Ward - 1 (3), Sangli

ITA 864/PUN/2019

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9517 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-11-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 04-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Section: 142(1); 143(2); 148

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NOS.864 & 865/PUN/2019 / ASSESSMENT YEARS : 2006-07 & 2007-08 DR. RAVIRAJ AJIT SHINDE, MHASHALKAR SHINDE DE ORTHOPEDIC CENTRE, CIVIL HOSPITAL ROAD, SANGLI-416416. PAN : CYZPS4090K . /APPELLANT VS. ITO, WARD-1(3), SANGLI. . / RESPONDENT / APPELLANT BY : SHRI AJAY AGARWAL / RESPONDENT BY : SHRI S. P. WALIMBE / DATE OF HEARING : 19.12.2019 / DATE OF PRONOUNCEMENT: 31.12.2019 / ORDER PER D. KARUNAKARA RAO, AM : THERE ARE TWO APPEALS UNDER CONSIDERATION. BOTH THE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE COMMON ORDERS OF CIT(A)-1, KOLHAPUR DATED 04.04.2019 FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08 RESPECTIVELY. 2. BEFORE ME, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS IS A CASE WHERE THE ASSESSMENTS WERE REOPENED U/S 148 OF THE ACT FOR SCRUTINIZING THE CONCEALED INCOME BY WAY OF CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE. NARRATING THE FACTS OF THE CASE, LD. COUNSEL ITA NOS.864 & 865/PUN/2019 - 2 - SUBMITTED THAT THE NOTICE U/S 148 OF THE ACT WAS ISSUED ON 16.01.2013, THE NOTICES U/S 142(1) OF THE ACT WAS ISSUED ON 16.05.2013 AND AGAIN ON 17.06.2013. IN REPLY TO THE NOTICE, THE ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.25,11,230/-. THE ASSESSMENTS WERE COMPLETED ON 04.02.2014 FOR THE ASSESSMENT YEAR 2006-07 AND 03.02.2014 FOR THE ASSESSMENT YEAR 2007-08 WITHOUT ISSUING NOTICES U/S 143(2) OF THE ACT , WHICH IS STATUTORY REQUIREMENT OF THE LAW. 3. ON THESE FACTS, WITHOUT GOING TO THE MERITS OF THE ADDITION, LD. COUNSEL SUBMITTED THAT THE RE-ASSESSMENTS ARE BAD IN LAW. FOR THIS PROPOSITION, LD. COUNSEL RELIED ON THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ELECTROCOAT SURFACE COATING SYSTEMS PVT. LTD. VS. DCIT VIDE ITA NO.1355/PUN/2016 ORDER DATED 01.01.2019 WHERE THE UNDERSIGNED IS ALSO THE PARTY OF THE ORDER. 4. ON HEARING BOTH THE SIDES, I FIND RELEVANT TO EXTRACT PARA 3 TO 7 OF THE ORDER OF THE TRIBUNAL (SUPRA) AND THE SAME ARE EXTRACTED HEREUNDER :- 3. BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF CUSTOM MADE MACHINERY. IT FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 ON 22.09.2009 DECLARING TOTAL INCOME OF RS.3,19,44,930/-. THE RETURN WAS ASSESSED U/S.143(1) OF THE ACT. THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE MAHARASHTRA SALES TAX DEPARTMENT THAT THE ASSESSEE WAS BENEFICIARY OF HAWALA TRANSACTIONS. ACCORDINGLY, NOTICE U/S.148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 22.03.2013 AND WAS SERVED ON IT. THE ASSESSING OFFICER HAS RECORDED REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT BEFORE ISSUE OF NOTICE U/S.148 OF THE ACT. THEREAFTER, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ON14.03.2014 U/S.143 (3) R.W.S. 147 OF THE ACT. 4. IT IS TO THIS FACTUAL SITUATION, THE LD. AR FOR THE ASSESSEE VEHEMENTLY ARGUED AT THE TIME OF HEARING THAT BEFORE ASSESSMENT ORDER WAS PASSED, NO NOTICE U/S.143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE . ITA NOS.864 & 865/PUN/2019 - 3 - 5. ON THE OTHER HAND, LD. DR FOR THE REVENUE PRODUCED CASE RECORDS AND SUBMITTED THAT NO NOTICE U/S.143(2) OF THE ACT WAS SERVED ON THE ASSESSEE. HOWEVER, LD. DR CONTENDED THAT THERE WAS NO RETURN FILED BY THE ASSESSEE IN PURSUANCE TO NOTICE U/S.148 OF THE ACT AND THEREFORE, THERE WAS NO NEED FOR ISSUANCE OF NOTICE U/S.143(2) OF THE ACT. 6. THE LD. AR PER CONTRA VEHEMENTLY SUBMITTED THAT THE ORIGINAL RETURN OF INCOME U/S.139(1) OF THE ACT WAS FILED. HOWEVER, THERE WAS NO RETURN FILED IN PURSUANCE TO THE NOTICE U/S.148 OF THE ACT. THE LD. AR PLACED RELIANCE ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT-10, MUMBAI VS. MS.MALVIKA ARUN SOMAIYA [2010] 2 TAXMANN.COM 144 ( BOMBAY) WHERE THE FACTS ARE SIMILAR TO THE PRESENT CASE OF THE ASSESSEE, WHEREIN THE ASSESSEE HAS NOT FILED ANY FRESH RETURN IN RESPONSE TO THE NOTICE U/S.148 OF THE ACT. THE ASSESSING OFFICER HAD PASSED ORDER OF ASSESSMENT. THE TRIBUNAL HELD THAT NOTICE U/S.143(3)(2) OUGHT TO HAVE BEEN SERVED UPON ASSESSEE BEFORE TAKING ANY FURTHER PROCEEDINGS AND THEREFORE, ORDER OF ASSESSMENT WAS IN VIOLATION OF STATUTORY PROVISIONS. THE FINDINGS OF THE TRIBUNAL WERE UPHELD BY THE HON'BLE BOMBAY HIGH COURT IN FAVOUR OF THE ASSESSEE. 7. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIVAL CONTENTIONS ON THE LEGAL GROUNDS. WE FIND THAT THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DECISION OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT-10, MUMBAI VS. MS.MALVIKA ARUN SOMAIYA (SUPRA.) WHERE ALSO, THE ORIGINAL RETURN WAS FILED BY ASSESSEE. HOWEVER, IN RESPONSE TO THE NOTICE U/S.148 OF THE ACT, NO RETURN WAS FILED. THE ASSESSING OFFICER DID NOT ISSUE NOTICE U/S.143(2) OF THE ACT BEFORE TAKING ANY FURTHER PROCEEDINGS U/S.148 OF THE ACT. IT WAS HELD BY THE TRIBUNAL THAT SUCH NOTICE U/S.143(2) OF THE ACT OUGHT TO HAVE BEEN SERVED UPON THE ASSESSEE BEFORE TAKING ANY FURTHER PROCEEDINGS AND THEREFORE, ORDER OF ASSESSMENT WAS IN VIOLATION OF STATUTORY PROVISIONS. THIS FINDING OF THE TRIBUNAL WAS UPHELD BY THE HON'BLE BOMBAY HIGH COURT. WE, THEREFORE, RESPECTFULLY FOLLOWING THE AFORESAID JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT, ANSWER THE LEGAL GROUNDS RAISED BY THE ASSESSEE IN FAVOUR OF THE ASSESSEE AND THEREBY SETTING-ASIDE THE ORDER OF LD. CIT(APPEALS). 5. IN THIS CASE, THE STATUTORY NOTICE U/S 143(2) OF THE ACT WAS NOT ISSUED. THE JURISDICTIONAL HIGH COURT OF BOMBAY ALREADY QUASHED SUCH REASSESSMENTS MADE WITHOUT ISSUE OF THE SAID NOTICE. IT IS BINDING ON US. CONSIDERING THE ABOVE FINDINGS OF THE TRIBUNAL (SUPRA) AS UPHELD BY THE HONBLE BOMBAY HIGH COURT, ON THIS LEGAL ISSUE, I AM OF THE OPINION THAT THE ORDER OF THE CIT(A) IS SET-ASIDE AND THE LEGAL ISSUES RAISED COMMONLY BY THE ASSESSEE IN THESE TWO APPEALS ARE ALLOWED. ITA NOS.864 & 865/PUN/2019 - 4 - 6. CONSIDERING THE RELIEF GRANTED TO THE ASSESSEE ON THE LEGAL ISSUES, THE ADJUDICATION OF MERIT RELATED ISSUES BECOMES AN ACADEMIC EXERCISE ONLY. THEREFORE, THE OTHER GROUNDS RAISED BY THE ASSESSEE IN THE APPEALS ARE DISMISSED AS ACADEMIC. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 31 ST DAY OF DECEMBER, 2019. SD/- (D. KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 31 ST DECEMBER, 2019. SUJEET / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-1, KOLHAPUR; 4. THE CCIT, PUNE; 5. , , - / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE