ZAKHARIA MATHEW, MUMBAI V. ITO WD 21(3)(2), MUMBAI

ITA 9187/MUM/2010

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3093 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 03-06-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 30-12-2010
• Court: TRIBUNAL
• Department Lawyers: S S KUMARAN
• Assessee Lawyers: NISHAN THAKKAR
• Keywords: Unexplained cash credit; Additional evidence; Reasonable cause; Condonation of delay; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI , , , BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.9187/MUM/2010 ASSESSMENT YEAR: 2003-04 & ITA NO.9188/MUM/2010 ASSESSMENT YEAR: 2004-05 & ITA NO.9189/MUM/2010 ASSESSMENT YEAR: 2005-06 ZAKHARIA MATHEW, A/126 ANSA INDL. ESTATE, SAKIVIHAR RD. SAKINAKA MUMBAI -400072 / VS. I.T.O. WARD 2 1 ( 3 )( 2 ), AAYAKAR BHAVAN, M.K. ROAD. MUMBAI- 400020 ( ASSESSEE ) ( REVENUE ) P.A. NO. AAJPM7903K / ASSESSEE BY SHRI NISHAN THAKKAR (AR) / REVENUE BY SHRI S. S. KUMARAN ( D R) ! ' # / DATE OF HEARING : 7/09/2015 ' # / DATE OF ORDER: 30/09/2015 ZAKHARIA MATHEW 2 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAI NST THE COMMON ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-32, MUMBAI ( IN SHORT CIT(A)) DATED 11. 12.2009 FOR THE ASSESSMENT YEARS 2003-04, 2004-05 & 2005-06 DEC IDED AGAINST THE ASSESSMENT ORDER PASSED BY THE ASSESSIN G OFFICER (IN SHORT AO) U/S 143(3) OF THE ACT. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE ALONG WITH APPEAL MEMO: (I) IN ITA NO.9187/MUM/2010 FOR A.Y. 2003-04: I. THE CIT(A) ERRED IN UPHOLDING THE VALIDITY OF TH E NOTICE UNDER SECTION 148 OF THE ACT AND THE PROCEEDINGS PURSUANT THERETO. II THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.10,96,600/- ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDIT. III. THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.10,000/- ON ACCOUNT OF ALLEGED INTEREST RECEIVED BUT NOT OFFERED TO TAX. (II) IN ITA NO.9188/MUM/2010 FOR A.Y. 2004-05: I. THE CIT(A) ERRED IN UPHOLDING THE VALIDITY OF TH E NOTICE UNDER SECTION 148 OF THE ACT AND THE PROCEEDINGS PURSUANT THERETO. II THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.3,73,000/- ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDIT. ZAKHARIA MATHEW 3 III. THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.10,000/- ON ACCOUNT OF ALLEGED INTEREST RECEIVED BUT NOT OFFERED TO TAX. (III) IN ITA NO.9189/MUM/2010 FOR A.Y. 2005-06: I. THE CIT(A) ERRED IN UPHOLDING THE VALIDITY OF TH E NOTICE UNDER SECTION 148 OF THE ACT AND THE PROCEEDINGS PURSUANT THERETO. II THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.5,41,500/- ON ACCOUNT OF ALLEGED UNEXPLAINED CASH CREDIT. III. THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.10,000/- ON ACCOUNT OF ALLEGED INTEREST RECEIVED BUT NOT OFFERED TO TAX. 3 . BEFORE WE PROCEED TO DISPOSE THIS APPEAL ON MERIT S, IT HAS BEEN NOTED BY US, THAT THERE IS A DELAY OF 288 DAYS IN FILING OF THESE APPEALS THE ASSESSEE BEFORE THE TRIBUNAL BY. THE ASSESSEE HAS ALSO FILED A PETITION FOR CONDONING TH E DELAY, DULY SUPPORTED WITH A DULY SWORN AFFIDAVIT FROM THE ASSE SSEE, DEPOSING DETAILED FACTS ON OATH. DURING THE COURSE OF HEARING, LD COUNSEL HAD MADE A REQUEST FOR CONDONING THE DEL AY AND HAS MADE SUBMISSIONS IN THIS REGARD. ON THE OTHER H AND, LD. DR OPPOSED THE REQUEST FOR CONDONING THE DELAY. 3.1 . WE HAVE HEARD BOTH SIDES ON THIS ISSUE OF DELAY I N FILING THESE APPEALS. BEFORE DECIDING APPEAL ON MERITS, W E FIND IT NECESSARY TO FIRST DECIDE THIS ISSUE. BRIEF FACTS I N THIS CASE ARE THAT THE AO HAD REOPENED THE CASE OF THE ASSESSEE U /S 147 AND PASSED REASSESSMENT ORDER U/S 143(3) R.W. SECTI ON 147 OF THE ACT. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND CONTESTED THE APPEAL AND MADE DETAILED SUBMISSI ONS ZAKHARIA MATHEW 4 THERE. THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOWE D BY THE LD. CIT(A), BY ORDER DATED 11.12.2009. IT IS CLAIME D BY THE ASSESSEE IN THE AFFIDAVIT FILED BEFORE US THAT THE ORDER OF CIT(A) WAS RECEIVED BY THE ASSESSEE ON 16.01.2010. ACCORDI NGLY, THE APPEAL BEFORE THE TRIBUNAL OUGHT TO HAVE BEEN FILED AS PER LAW ON OR BEFORE 17 TH MARCH 2010. WHEREAS, THESE APPEALS HAVE BEEN FILED BEFORE THE TRIBUNAL ON 30.12.2010, THUS ADMITTEDLY THERE IS A DELAY OF 288 DAYS IN FILING THESE APPEAL S. 3.2. IT IS WELL SETTLED THAT TRIBUNAL HAS INHERENT POWE RS TO CONDONE THE DELAY IN FILING OF APPEAL, IF THE APPEL LANT IS ABLE TO SHOW SUFFICIENT OR REASONABLE CAUSE FOR DELAY I N FILING OF THE APPEAL. THUS, WE HAVE TO FIRST EXAMINE, WHETHER THE RE WAS SUFFICIENT OR REASONABLE CAUSE WITH THE ASSESSEE FO R DELAY IN FILING THESE APPEALS BEFORE THE TRIBUNAL. 3.3 . WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. IT IS SEEN BY US THAT IN THE AFFIDAVIT FILED BEFORE US, COPY W HICH WAS AVAILABLE WITH LD. DR SINCE EARLIER DATES, IT HAS B EEN STATED BY THE ASSESSEE, ON OATH, THAT THE DELAY IS INADVERTEN T AND OCCURRED AS A RESULT OF COMPELLING CIRCUMSTANCES, A S HAVE BEEN NARRATED IN DETAIL IN THE PETITION FOR CONDONA TION OF DELAY FILED BY THE ASSESSEE. FURTHER, THESE FACTS AND CIR CUMSTANCES HAVE BEEN NARRATED IN THE AFORESAID AFFIDAVIT FILED BY THE ASSESSEE. RELEVANT EXTRACTS FROM THIS AFFIDAVIT, A RE REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: 4. I AFFIRM THAT I, ALONG WITH MY WIFE, AM IN MANAGEMENT AND CONTROL OF 2 COMPANIES, VIZ., SENZO ENGINEERING PVT. LTD. AND SAINO ENGINEERING PT. LTD . ZAKHARIA MATHEW 5 BOTH THESE COMPANIES HAVE, IN THE FINANCIAL YEAR ENDING 31 ST MARCH 2010 (I.E.FINANCIAL YEAR 2009- 2010), SUFFERED SEVERE FINANCIAL CRISIS AND THEIR OPERATIONS HAVE HAD TO BE CLOSED DOWN. HERETO ANNEXED AND MARKED EXHIBIT - 'A' IS A COPY OF THE PROFIT AND LOSS ACCOUNT OF THE COMPANY FOR THE YEAR ENDED 31 ST MARCH 2010. HERETO ANNEXED AND MARKED EXHIBIT - 'B' IS A COPY OF THE BOARD RESOLUTION OF THE COMPANY PASSED ON 15 TH MARCH 2010 CLOSING DOWN THE MANUFACTURING ACTIVITIES OF THE COMPANY WITH EFFECT FROM 31ST MARCH, 2010. THE APPLICATION TO TH E LABOUR COMMISSIONER DATED 25TH NOVEMBER 2010 INTIMATING FOR THE CLOSURE OF THE MANUFACTURING UNI T AND SEEKING ISSUANCE OF LABOUR NOC, IS HERETO ANNEXED AND MARKED EXHIBIT 'C'. THE NOTICE OF THE CLOSURE OF THE SAID UNIT WAS ALSO GIVEN IN THE LOKM AT AND PUDHARI NEWSPAPER AT THANE ISSUE DATED 14 TH OCTOBER, 2010, A COPY OF WHICH IS HERETO ANNEXED AND MARKED EXHIBIT 'D' COLLY. HERETO ANNEXED AND MARKED EXHIBIT - 'E' IS A COPY OF THE PROFIT AND LO SS ACCOUNT OF SAINO ENGINEERING PVT. LTD. FOR THE YEAR ENDED 31 ST MARCH 2010. HERETO ANNEXED AND MARKED EXHIBIT F IS A COPY OF THE BOARD RESOLUTION OF SAINO ENGINEERING PVT. LTD. PASSED ON 15TH MARCH 2010 CLOSING DOWN THE MANUFACTURING ACTIVITIES OF T HE SAID COMPANY WITH EFFECT FROM 25 TH NOVEMBER, 2010 INTIMATING FOR THE CLOSURE OF MANUFACTURING UNIT AN D SEEKING ISSUANCE OF LABOUR NOC, IS HERETO ANNEXED AND MARKED EXHIBIT 'G' THE NOTICE OF THE CLOSURE OF SAINO ENGINEERING PVT. LTD. WAS ALSO GIVEN IN THE LOKMAT AND PUDHARI NEWSPAPER AT THANE ISSUE DATED 14TH OCTOBER 2010, A COPY OF WHICH IS HERETO ANNEXED AND MARKED EXHIBIT 'H' COLLY. 5. I SAY THAT SINCE ABOUT OCTOBER 2009, I HAVE BEEN COMPLETELY INVOLVED IN THE CLOSING UP OF THE AFFAIR S OF THE ABOVE TWO COMPANIES AND HAVE NOT BEEN IN A POSITION TO ATTEND TO MY OWN AFFAIRS. I SAY THAT AM NOT EDUCATED AND HAVE STUDIED ONLY UPTO STANDARD SIX. ALTHOUGH I SIGN IN ENGLISH I AM UNABLE TO READ AND WRITE ENGLISH AND THEREFORE 1 AM DEPENDANT ON THE ADVICE GIVEN TO ME BY MY EMPLOYEES WHOSE STRENGTH HAVE BEEN SIGNIFICANTLY REDUCED ON ACCOUNT ZAKHARIA MATHEW 6 OF THE AFOREMENTIONED CLOSURE OF BUSINESS. IT WAS ONLY WHEN THINGS WITH RESPECT TO THE AFORESAID TWO COMPANIES CAME SOMEWHAT UNDER CONTROL IN ABOUT JUNE 2010 THAT I WAS INFORMED, BY MY EMPLOYEES THAT THE FILING OF APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) IN MY OWN CASE WAS STILL PENDING. I SAY THAT, I IMMEDIATELY RUSHED TO MY SOLICITORS WHO HAVE THEN TAKEN THE NECESSARY STEPS IN FILING THE APPEAL. 6. I SAY THAT AS A RESULT OF THE CLOSURE O F THE UNITS AND THE REDUCTION OF THE STAFF, THE TIME FOR FILING OF THE APPEAL WAS INADVERTENTLY MISSED AND THE FILLING OF THE APPEAL COULD NOT BE DONE IN TIME. 3.4. AFTER HEARING BOTH THE SIDES AND HAVING GONE THROU GH THE MATERIAL PLACED BEFORE US FOR THE PURPOSE OF ASCERT AINING THE FACTS PROPERLY, WE ASKED LD. DR SPECIFICALLY, IF TH ERE WAS ANYTHING WRONG IN THE FACTS NARRATED BY THE ASSESSE E IN ITS PETITION OR AFFIDAVIT, WHEREIN CERTAIN AVERMENTS HAVE BEEN MADE AND FACTS HAVE BEEN DEPOSED ON OATH. IN RESPON SE TO OUR QUERY, LD. DR STATED, FAIRLY, THAT HE WAS NOT ABLE TO POINT OUT ANY SPECIFIC MISTAKE OR ERROR IN THE FACTUAL SUBMIS SIONS MADE BY THE ASSESSEE IN THESE TWO DOCUMENTS. HOWEVER HE OPPOSED CONDONATION ON THE GROUND THAT ASSESSEE TOOK THIS M ATTER CASUALLY, AND DELAY IN FILING THESE APPEALS WAS AS A RESULT OF NEGLIGENCE ON THE PART OF THE ASSESSEE, THEREFORE, UNDER THESE CIRCUMSTANCES, THE ASSESSEE SHOULD NOT BE GIVEN ANY SPECIAL PRIVILEGE, AND THERE SHOULD NOT ANY LIBERAL APPROAC H IN GRANTING CONDONATION TO THE ASSESSEE. 3.5. ON THE OTHER HAND, THE LD COUNSEL PLEADED ON BEHAL F OF THE ASSESSEE THAT THE ASSESSEE WAS HEAVILY ENGROSSE D IN CERTAIN MATTERS, OF SERIOUS NATURE, PERTAINING TO C LOSURE OF ZAKHARIA MATHEW 7 BUSINESS OF TWO COMPANIES, WHOSE MANAGEMENT AND CON TROL WAS IN THE HANDS OF THE ASSESSEE. THESE COMPANIES S UFFERED SEVERE FINANCIAL CRISES AND FINALLY, THEIR BUSINESS HAD TO BE CLOSED DOWN. THE ASSESSEE WAS ENTANGLED WITH THE LA BOUR COMMISSIONER AND WAS ENGAGED IN OTHER ACTIVITIES PE RTAINING TO CLOSURE OF THE AFORESAID TWO COMPANIES. IT HAS B EEN FURTHER STATED THAT THE ASSESSEE WAS NOT WELL EDUCATED AND HAD STUDIED ONLY UP TO SIXTH STANDARD. ALTHOUGH, HE COU LD SIGN IN ENGLISH ALSO BUT HE WAS NOT AWARE OF THE COMPLEXITI ES AND NITTY-GRITTYS OF INCOME TAX PROCEEDINGS. IN THESE CIRCUMSTANCES, THE ASSESSEE WAS DEPENDENT ON THE AD VICE GIVEN TO HIM BY HIS EMPLOYEES. MOST OF THE SENIOR A ND EXPERIENCED EMPLOYEES/STAFF MEMBERS HAD HIM LEFT DU E TO CLOSURE OF THESE TWO COMPANIES. WHEN SITUATION CAME SOMEWHAT IN CONTROL, IN JUNE 2010, THEN ONE OF THE EMPLOYEES OF THE ASSESSEE INFORMED HIM ABOUT DELAY OCCURRED I N FILING OF THESE APPEALS BEFORE THE TRIBUNAL. ON GETTING THIS INFORMATION, THE ASSESSEE CAME INTO ACTION AND MADE REQUISITE ARRANGEMENTS FOR FILING OF THESE APPEALS, ON URGENT BASIS. THE ASSESSEE HAS, IN NUTSHELL, SUBMITTED THAT TIME LIMI T FOR FILING OF THESE APPEALS WAS MISSED, INADVERTENTLY, AND AS A R ESULT OF CLOSURE OF TWO UNITS OF THE ASSESSEE, AND DUE TO OT HER CONSEQUENCES FACED BY THE ASSESSEE BECAUSE OF CLOSU RE OF ITS TWO UNITS, SUCH AS, DRASTIC REDUCTION OF THE STAFF STRENGTH. THE ASSESSEE HAS FILED VARIOUS SUPPORTING DOCUMENTS EVI DENCING FACTUM OF CLOSURE OF ITS TWO COMPANIES. ZAKHARIA MATHEW 8 3.6 . IN THE AFORESAID FACTS AND CIRCUMSTANCES, WE HAVE TO EXAMINE THE BONAFIDE OF CLAIM AND THE AVERMENTS MAD E BEFORE US BY THE ASSESSEE, AND WE HAVE TO ALSO DECIDE WHET HER THESE FACTS CONSTITUTE SUFFICIENT OR REASONABLE CAUSE IN THE EYES OF LAW AND DESERVE CONDONATION OF DELAY IN FILING OF T HE PRESENT APPEALS. FIRST OF ALL, IT IS NOTED BY US THAT THE L D DR HAS NOT BEEN ABLE TO CONTROVERT OR DOUBT, ABOUT THE CORRECT NESS OF CERTAIN FACTS OR AVERMENTS MADE BY THE ASSESSEE IN HIS PETITION AND AFFIDAVIT. THE ASSESSEE IS NOT WELL EDUCATED, T HEREFORE, IT CAN BE ACCEPTED THAT ASSESSEE WOULD BE DEPENDENT UP ON ADVICE OF ITS EMPLOYEES OR OTHER PERSONS. TWO UNITS OF THE ASSESSEE GOT CLOSED, SIMULTANEOUSLY. THEREFORE, IT IS QUITE POSSIBLE THAT THERE WOULD HAVE BEEN REDUCTION IN TH E STAFF/EMPLOYEES OF THE ASSESSEE AND IT CAN ALSO BE ACCEPTED THAT THE ASSESSEE MAY HAVE BEEN INVOLVED IN MANY LE GAL FORMALITIES AND PRACTICAL DIFFICULTIES ARISING AS A RESULT OF THE CLOSURE OF THESE UNITS. THUS, UNDER THESE CIRCUMSTA NCES, DELAY IN FILING OF APPEAL BY THE ASSESSEE CANNOT BE PRESU MED TO BE SOLELY ON ACCOUNT OF HIS NEGLIGENCE OR CASUAL APPRO ACH, AS SUGGESTED BY THE LD DR. THUS, CONTENTION OF THE ASS ESSEE THAT, APPARENTLY, THERE WERE COMPELLING CIRCUMSTANC ES, DUE TO WHICH, DELAY OCCURRED IN FILING OF THESE APPEALS, C AN BE ACCEPTED. THUS, THE NEXT ISSUE TO BE DECIDED NOW WO ULD BE WHETHER THE AFORESAID REASONS, CONSTRAINTS AND COMP ELLING CIRCUMSTANCES ETC. WOULD FORM SUFFICIENT OR REAS ONABLE CAUSE, SO AS TO ENABLE THE ASSESSEE TO GET CONDONAT ION OF DELAY IN FLING OF THESE APPEALS. IN THIS REGARD WE DEEM I T APPROPRIATE TO GET GUIDANCE FROM LANDMARK JUDGMENT OF HONBLE S UPREME ZAKHARIA MATHEW 9 COURT IN THE CASE OF MST KATIJI [1987] 167 ITR 471. IT HAS BEEN HELD BY HONBLE SUPREME COURT IN THIS CASE THA T SUFFICIENT CAUSE FOR THE PURPOSE OF CONDONATION OF DELAY SHOULD BE INTERPRETED WITH A VIEW TO DO, EVEN HANDE D JUSTICE ON MERITS IN PREFERENCE TO APPROACH WHICH SCUTTLES THE DECISION ON MERITS AND IT WAS FURTHER HELD THAT POW ERS OF CONDONATION OF DELAY IS CONFERRED WITH A VIEW TO EN ABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO LITIGANTS BY DI SPOSING OF THE CASES ON MERITS. IT WAS HELD BY THE HONBLE SUPREME COURT THAT LIBERAL APPROACH SHOULD BE ADOPTED, ON PRINCIP LE, IN THESE MATTERS BECAUSE: 1.ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFIT BY LODGING AN APPEAL LATE. 2 REFUSING TO CONDONE DELAY CAN RESULT IN A MERITORIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN DELAY IS CONDONED, THE HIGHEST THAT CAN HAPPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES 3. 'EVERY DAY'S DELAY MUST BE EXPLAINED'- DOES NOT MEAN THAT PEDANTIC APPROACH SHOULD BE MADE. WHY NOT EVERY HOUR'S DELAY, EVERY SECOND'S DELAY? THE DOCTRINE MUST BE APPLIED IN A RATIONAL, COMMON SENSE AND PRAGMATIC MANNER. 4. WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATIONS ATE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESERVE TO BE PREFERRE D, FOR THE OTHER SIDE CANNOT CLAIM TO HAVE VESTED RIGH T IN INJUSTICE BEING DONE BECAUSE OF NON-DELIBERATE DELAY. 5. THERE IS NO PRESUMPTION THAT DELAY IS OCCASIONED DELIBERATELY, OR ON ACCOUNT OF CULPABLE NEGLIGENCE, OR ON ACCOUNT OF MALA FIDES. A LITIGANT DOE NOT STAND TO ZAKHARIA MATHEW 10 BENEFIT BY RESORTING TO DELAY. IN FACT, HE RUNS A SERIOUS RISK. 6. IT MUST BE GRASPED THAT THE JUDICIARY IS RESPECT ED NOT ON ACCOUNT OF ITS POWER TO LEGALISE INJUSTICE O N TECHNICAL GROUNDS BUT BECAUSE IT IS CAPABLE OF REMOVING INJUSTICE AND IS EXPECTED TO DO SO. 3.7. NOW, IN VIEW OF THE AFORESAID DISCUSSION AND POSIT ION OF LAW, IF WE EXAMINE THE FACTS OF THIS CASE AND FOLLO W A JUSTICE ORIENTED APPROACH AS SUGGESTED BY HONBLE SUPREME C OURT, WE FIND THAT THE FACTS NARRATED BY THE ASSESSEE, DULY SWORN ON OATH IN AFFIDAVIT, REMAINING UNDISPUTED AND CONTROV ERTED BY THE OPPOSITE PARTY, CONSTITUTE SUFFICIENT CAUSE A ND DESERVES GRANTING OF CONDONATION OF DELAY IN FILING OF THESE APPEALS BEFORE THE TRIBUNAL. WE ARE CONSCIOUS OF THE FACT T HAT CONSTITUTION OF OUR COUNTRY HAS ATTACHED GREAT SANC TITY TO THE CONCEPT OF FINALITY OF LITIGATION. BUT IN THIS CASE , WE FEEL THAT REFUSING TO DENY DELAY MAY RESULT IN A MERITORIOUS MATTER BEING THROWN OUT AT THE VERY THRESHOLD, AND THEREBY CAUSING INJUSTICE AND IRREPARABLE DAMAGE TO THE TAXPAYERS. THEREFORE, KEEPING IN VIEW ALL THESE FACTS AND CIRCUMSTANCES, WE CONDONE THE DELAY IN FILING OF THESE APPEALS BY THE ASSESSE E BEFORE THE TRIBUNAL. THE APPEALS ARE NOW TAKEN UP FOR DISPOSAL ON MERITS. 4 . IT IS SEEN BY US, THAT GROUND NO.1 IS COMMON IN ALL THE THREE APPEALS, WHEREIN THE ASSESSEE HAS CHALLENGED THE VALIDITY OF NOTICE U/S 148 AND PROCEEDINGS OF REOPE NING U/S 147 OF THE ACT. IN THIS REGARD, IT IS SEEN BY US TH AT PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT ASSESSEE HAS NOT TA KEN UP ANY OBJECTION OR CHALLENGE, WITH RESPECT TO NOTICE U/S 148 OR ZAKHARIA MATHEW 11 WITH RESPECT TO VALIDITY OF REOPENING OF THE CASE U /S 147, BEFORE THE AO, DURING THE COURSE OF ASSESSMENT PROCEEDINGS . HOWEVER, IN THESE APPEALS BEFORE THE LD. CIT(A), TH E ASSESSEE HAD TAKEN SPECIFIC GROUND IN THIS REGARD AS GROUNDS NO.1 & 2 ALONG WITH APPEAL MEMO FILED IN FORM NO.35 BEFORE T HE LD. CIT(A). THESE GROUNDS ARE REPRODUCED HEREIN: 1.THE ASSESSING OFFICER ERRED IN ASSUMING JURISDICT ION UNDER SECTION 148 READ WITH SECTION 147 OF THE ACT. 2. THE REASSESSMENT IS UNLAWFUL, INVALID AND THE OR DER PASSED PURSUANT TO THE NOTICE UNDER SECTION 148 IS ILLEGAL AND DESERVES TO BE QUASHED. 4.1. IN ADDITION TO THE ABOVE IN THE WRITTEN SUBMISSION S FILED BEFORE THE LD. CIT(A), THE ASSESSEE MADE FOLLOWING SUBMISSIONS BEFORE THE LD. CIT(A) WITH RESPECT TO GROUND NO.1 A ND 2 OF THE APPEAL MEMO: GROUND 1&2: IT IS NOW SETTLED LAW THAT FOR ASSUMING JURISDICTIO N UNDER SECTION 148 OF THE INCOME TAX ACT (HEREINAFTER REFE RRED TO AS THE ACT) THE ASSESSING OFFICER MUST RECORD REA SONS BEFORE THE ISSUE OF NOTICE TO DEMONSTRATE HIS BELIE F THAT INCOME HAS ESCAPED ASSESSMENT. THE APPELLANTS SAYS THAT THE NOTICE UNDER SECTION 1 48 OF THE ACT HAS BEEN ISSUED WITHOUT RECORDING OF REASON S. THE APPELLANT PRAYS THAT THE ASSESSING OFFICER BE CALLE D UPON TO SHOW THAT REASONS HAVE BEEN RECORDED BY HIM BEFO RE THE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. IF INDEED SUCH REASONS ARE RECORDED, THE APPELLANT PRAYS THAT AN OPPORTUNITY BE AFFORDED TO HIM TO CHALLENGE THE LEGALITY OF ASSUMING JURISDICTION UNDER SECTION 148 OF THE ACT BASED ON THE REASONS RECORDED, IT ANY . 4.2. HOWEVER, WHILE DECIDING THE APPEALS OF THE ASSESSE E, LD. CIT(A) DID NOT ADJUDICATE THESE GROUNDS UNDER SOME WRONG AND ERRONEOUS ASSUMPTION OF FACTS AND HELD VIDE PAR A 17 OF HIS APPELLATE ORDER AS UNDER: ZAKHARIA MATHEW 12 GROUNDS NO.1&2 OF APPEAL WHICH ARE REGARDING OBJEC TION OF THE APPELLANT AGAINST ISSUE OF NOTICE U/S.148 AN D CONSEQUENT REOPENING OF THE ASSESSMENT. IT IS APPAR ENT FROM THE WRITTEN SUBMISSION FILED BY THE LD. COUNSE L OF THE APPELLANT THAT GROUNDS RELATING TO REOPENING ARE NO T PURSUED BY THEM. IT IS MORE APPARENT FROM THE APPEL LANTS LETTER DATED 9-12-2009 REFERRED TO AT PARA 3 OF THI S ORDER. THE REOPENING DOES NOT SUFFER FROM ANY TECHNICAL DE FECT SUCH AS BEING BEYOND TIME OR THE REASONS NOT BEING RECORDED. THEREFORE, THE ACTION OF THE AO IN REOPEN ING OF THE ASSESSMENT IS UPHELD AND GROUND NO.1&2 ARE DISMISSED. THUS, LD CIT(A) HAS NOT DECIDED THESE GROUNDS PROPE RLY FOR THE REASON THAT ASSESSEE HAS NOT PURSUED THESE JURISDIC TIONAL GROUNDS BEFORE THE LD. CIT(A). 4.3. IN THE HEARING BEFORE US, LD. COUNSEL HAS SUBMITTED THAT ADMITTEDLY NO OBJECTION WAS RAISED BEFORE THE AO TO CHALLENGE THE VALIDITY OF THE REOPENING. BUT THE ASSESSEE HAS VERY WELL CONTESTED REOPENING ON JURISDICTIONAL ISSUES BEFORE THE LD. CIT(A) AND LD. CIT(A) HAS WRONGLY DISMISSED THESE G ROUNDS AS NOT PRESSED. IT WAS FURTHER SUBMITTED BY THE LD. CO UNSEL THAT IN ANY CASE, THE ASSESSEE IS NOW SERIOUSLY PRESSING THESE GROUNDS AND GRAVE INJUSTICE WOULD BE DONE IF THESE JURISDICTIONAL ISSUES ARE NOT PROPERLY EXAMINED BEF ORE DECIDING THESE APPEALS OF THE ASSESSEE ON MERITS. IN ADDITIO N TO THAT, LD COUNSEL HAS DRAWN OUR ATTENTION UPON THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE AND REQUESTED THAT THESE EVIDENCES SHOULD BE ADMITTED IN THE INTEREST OF JUS TICE, AS THESE ARE VERY CRUCIAL FOR ADJUDICATION OF THESE AP PEALS. THE APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCES W AS READ ZAKHARIA MATHEW 13 BEFORE US. ON THE OTHER HAND, LD DR HAS ARGUED THAT SINCE ASSESSEE HAS NOT PROPERLY TAKEN UP GROUNDS WITH RES PECT TO REOPENING, THESE GROUNDS CANNOT BE DECIDED HERE NOW . HOWEVER, LD. DR WAS FAIR ENOUGH TO STATE THAT HE WO ULD HAVE NO OBJECTION AND THESE MATTERS ARE SENT BACK TO THE FILE OF AO FOR RE-ADJUDICATION. 4.4. WE HAVE GONE THROUGH THE SUBMISSIONS MADE BY BOTH THE SIDES AND LEGAL POSITION IN THIS REGARD. IT IS SEEN BY US THAT GROUNDS WITH REGARD TO VALIDITY OF REOPENING GO TO THE ROOT OF THE MATTER. THESE ARE JURISDICTIONAL GROUNDS. THE A O CAN ASSUME JURISDICTION TO FRAME REASSESSMENT ORDERS ON LY AFTER REOPENING OF THE CASE STRICTLY WITHIN THE FRAME WOR K OF THE PROVISIONS OF REOPENING, AS CONTAINED IN SECTIONS 1 47 TO 151 OF THE INCOME TAX ACT R.W.S.143(2) AND 143(3) OF THE I NCOME TAX ACT 1961. THESE GROUNDS ARE PURELY LEGAL GROUNDS, A ND CAN BE RAISED AT ANY STAGE. THESE CAN BE RAISED EVEN FOR T HE FIRST TIME BEFORE THE TRIBUNAL AS HAS BEEN HELD BY THE BOMBAY HIGH COURT IN THE CASE OF INVENTORS INDUSTRIAL CORPORATION LTD. VS. C I T, (1992) 194 ITR 548 (BOM ) , HOLDING THAT THE ASSESSEE WAS ENTITLED TO CHALLENGE THE JURISDICTION OF THE AO TO INITIATE THE REASSESSMENT PROCEEDINGS BEFORE THE LD CIT(A) IN THE SECOND ROUND OF PROCEEDINGS EVEN THOUGH HE HAD NOT RAISED IT EARLIER BEFORE THE AO OR IN THE EARLIER A PPEAL IN THE FIRST ROUND. WE FURTHER DERIVE SUPPORT FROM THE JUD GMENT OF HONBLE SUPREME COURT IN THE CASE OF NTPC 229 ITR 383, HOLDING THAT LEGAL GROUND CAN BE RAISED AT ANY STAG E. IT IS NOTED THAT FACTS OF CASE BEFORE US ARE EVEN STRONGE R. ALTHOUGH, ZAKHARIA MATHEW 14 THE ASSESSEE HAD NOT TAKEN THESE GROUNDS BEFORE THE AO, BUT THESE GROUNDS, WITH REGARD TO REOPENING, WERE TAKEN BEFORE THE LD CIT(A). JUSTICE HAS NOT BEEN DONE WITH THIS CASE , BY NOT DECIDING JURISDICTIONAL GROUNDS BY THE LD. CIT(A), IN A PROPER MANNER. 4.5. THUS, TAKING INTO CONSIDERATION, ALL THE AFORESAID FACTS AND CIRCUMSTANCES OF THESE APPEALS, AND SETTLED LEG AL POSITION, WE DEEM IT FIT TO SEND ALL THE GROUNDS BACK TO THE FILE OF THE AO. THE AO SHALL PROVIDE COPY OF REASONS RECORDED B Y HIM, IF ANY, TO THE ASSESSEE. THE ASSESSEE SHALL FILE OBJEC TIONS TO THE AO WITH REGARD TO REOPENING OF THE CASE, IF SO DESI RED BY HIM. THE AO SHALL FOLLOW THE PROCEDURE, AS LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. ITO. 159 ITR 19 (SC). THE AO SHALL DISPOSE OF THE OBJECTIONS OF THE ASSESSEE BEFORE FRAMING THE RE-AS SESSMENT ORDER. THE ASSESSEE SHALL BE AT HIS LIBERTY TO FILE ALL THE DETAILS AND EVIDENCES, AS MAY BE REQUIRED BY THE AO OR AS M AY BE CONSIDERED APPROPRIATE BY HIM, AS PER LAW. THE AO S HALL GIVE FULL OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE THE FRAMING REASSESSMENT ORDERS. THE ASSESSEE SHALL EXTEND ALL REQUISITE COOPERATION TO THE AO IN THIS REGARD. THUS, ALL THR EE GROUNDS I.E. GROUNDS NO (I), (II) AND (III), OF ALL OF THES E THREE APPEALS, ARE SENT BACK TO THE FILE OF AO. ZAKHARIA MATHEW 15 5 . IN THE RESULT, ALL THE THREE APPEALS OF THE ASSESS EE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER 2015. SD/- (AMIT SHUKLA ) SD/- (ASHWANI TANEJA) '# / JUDICIAL MEMBER $# / ACCOUNTANT MEMBER ! MUMBAI; & DATED : 30/09/2015 CTX? P.S/. .. %'&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ( )* / THE APPELLANT 2. +,)* / THE RESPONDENT. 3. - - ( ( ) / THE CIT, MUMBAI. 4. - - / CIT(A)- , MUMBAI 5. 01 2 +3 , - ( # 3 4 , ! / DR, ITAT, MUMBAI 6. 2 5 6 ! / GUARD FILE. / BY ORDER, , 0( + //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI