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

ITA 9190/MUM/2010

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9778 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 13-07-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 30-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIDHYADHAR
• Keywords: Reopening of assessment; Unexplained cash credit; Reasonable cause
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G , MUMBAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI C.N. PRASAD, JUDICIAL MEMBER ITA NO . 9190 TO 9192 /MUM/2010 (A.Y: 2003 - 04, 2004 - 05, 2005 - 06 ) MRS T.Z. MATHEW A/126 ANSA INDUSTRIAL ESTATE SAKIVIHAR ROAD SAKINAKA MUMBAI 400 072 PAN : AAJPM 7903 K V . ITO, WARD - 21(3 )(2) AAYAKAR BHAVWAN, M.K.ROAD MUMBAI 400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NISHANT THAKKAR DEPARTMENT BY : SHRI VIDHYADHAR DATE OF HEARING : 13 .07 .2017 DATE OF PRONOUNCEMENT : 23. 08.2017 O R D E R PER C. N. PRASAD (JM) 1. THESE THREE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) - 32 DATED 11.12.2009 FOR THE ASSESSMENT YEARS 2003 - 04 TO 2005 - 06 RESPECTIVELY. 2. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT THERE WAS A DELAY OF 288 DAYS IN FILING THESE APPEALS . LEARNED COUNSEL SUBMITS THAT ON THE SAME FACTS AND CIRCUMSTANCES IN THE ASSESSEES HUSBANDS CASE THE DELAY OF 288 DAYS IN FILING THE APPEAL S FOR THE VERY 2 ITA NO.9190 TO 9192 /MUM/2010 (A.Y: 2003 - 04, 2004 - 05, 2005 - 06) MRS. T.Z. MATHEW SAME ASSES SMENT YEARS 2003 - 04 TO 2005 - 06 WAS CONDONED B Y THE TRIBUNAL IN ITA.NO.9187 TO 9189/MUM/2010 DATED 30.09.2015. COPY OF THE ORDER IS PLACED ON RECORD. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT APPEALS WERE FILED BY BOTH HUSBAND AND WIFE WITH A DELAY OF 288 DAYS AND THE REASON FOR DELAY WAS EXPLAINED IN THE AFFIDAVIT. CONSID ERING THE REASONS, THE TRIBUNAL CONDONED THE DELAY IN THE CASE OF ZA KARIA MATHEWS HUSBAND OF THE ASSESSEE. THEREFORE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT SINCE THE FACTS AND CIRCUMSTANCES BEING IDENTICAL , REASON FOR DELAY BEING IDENTICAL AND SINCE THE TRIBUNAL HAD ALREADY CONSIDERED THE REASON AND CONDONED THE DELAY IN ASSESSEES HUSBAND CASE FOLLOWING THE SAME THE DELAY OF 288 DAYS MAY BE CONDONED IN FILING THE APPEALS BY THE ASSESSEE. 3. COMING TO THE MERI TS OF THE CASE THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSEE IS CHALLENGING THE VALIDITY OF NOTICE ISSUED U/S 148 AND THE PROCEEDINGS PURSUANT THERETO, APART FROM AGITATING ON THE MERITS I.E. ADDITION MADE TOWARDS UNEXPLAINED CASH CREDITS AND INTEREST RECEIVED , NOT OFFERED TO TAX. 4. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT REASONS FOR REOPENING OF THE ASSESSMENT HAVE NOT BEEN PROVIDED IN SPITE OF REQUESTS MADE BY THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT RE - ASSESSMENT MADE U/S 148 OF THE ACT IS BAD IN LAW , IF REASONS ARE 3 ITA NO.9190 TO 9192 /MUM/2010 (A.Y: 2003 - 04, 2004 - 05, 2005 - 06) MRS. T.Z. MATHEW NOT SUPPLIED TO THE ASSESSEE. FOR THIS PROPOSITION HE PLACED RELIANCE ON THE DECISION OF THE COORDINATE BENCH IN THE CASE OF VINODA B. JAIN V. JCIT DATED 24.09.2014, DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. VIDESH SANCHAR NIGAM LTD. [340 ITR 66]. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT IF REASONS FOR REASSESSMENT N OT FURNISHED TO THE ASSESSEE RE A SSESSMENT HELD TO BE NOT VALID. 5. LEARNED COUNSEL FOR TH E ASSESSEE FURTHER SUBMITS THAT THERE IS NO SERVICE OF NOTICE U/S 143(2) OF THE ACT BEFORE COMPLETION OF ASSESSMENT IN THESE CASES. PLACING RELIANCE ON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA S E OF CIT V. M/S MALVIKA ARUN SOMAIYA [2 TAXMAN.COM 144], LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT IT HAS BEEN HELD BY THE HONBLE BOMBAY HIGH COURT THAT NO NEED TO CALL FOR ANY INTERFERENCE IN THE TRIBUNALS ORDER IN HOLDING THAT NOTICE U/S 143(2) OUGHT TO HAVE BEEN SERVED TO THE ASSESSEE B EFORE TAKING ANY FURTHER PROCEEDINGS. THEREFORE, ORDER OF ASSESSMENT WAS IN VIO LATION OF STATUTORY PROVISIONS. 6. LEARNED COUNSEL FOR THE ASSESSEE FURTHER REFERRING TO THE ORDER PASSED U/S 7(1) OF THE RIGHT TO INFORMATION ACT, 2005 BY CENTRAL PUBLIC INFORMA TION OFFICER AND ITO - 26(3)(5) MUMBAI DATED 05.05.2017 SUBMITS THAT WHEN THE ASSESSEE APPLIED FOR INFORMATION ON THE SERVICE OF NOTICE U/S 143(2) AND THE REASONS RECORDED FOR REOPENING , IT HAS BEEN INTIMATED THROUGH THIS ORDER THAT REASONS FOR REOPENING AND RECEIPT OF NOTICE U/S 4 ITA NO.9190 TO 9192 /MUM/2010 (A.Y: 2003 - 04, 2004 - 05, 2005 - 06) MRS. T.Z. MATHEW 143(2) WERE NOT FOUND ON RECORD FOR THE ASSESSMENT YEAR 2003 - 04. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT IT IS INTIMATED IN THIS ORDER THAT THE CASE RECORDS WERE NOT TRAC ED OUT FOR THE ASSESSMENT YEAR 2004 - 05 AND 2005 - 06. A COPY OF THE ORDER IS PLACED BEFORE US. THEREFORE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT IN THE ABSENCE OF FURNISHING OF REASONS FOR REOPENING THE ASSESSMENT AND IN THE ABSENCE OF SERVICE OF NOTICE U/S 143(2) THE RE ASSESSMENT S MADE FOR T HE ASSESSMENT YEAR 200 3 - 04 TO 2005 - 06 ARE BAD IN LAW. 7. LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. THE LD. DR FURTHER SUBMITS THAT IN SO FAR AS ASSESSMENT YEAR 2004 - 05 AND 2005 - 06 AR E CONCERNED POSITION IS NOT CLEAR SINCE FILES ARE NOT TRACEABLE AS INFORMED BY THE CPIO IN HIS ORDER. THEREFORE, THE LD. DR SUBMITS THAT SINCE FILES ARE NOT TRACEABLE, IT CANNOT BE SAID THAT REASONS FOR REOPENING OF ASSESSMENT AND SERVICE OF NOTICE U/S 143(2) ARE NOT EFFECTED IN THESE CASES. COMING TO THE CONDONATION OF DELAY, LD. DR HAS NO SERIOUS OBJECTION IN CONDONING THE DELAY AS THE TRIBUNAL HAD ALREADY CONDONED THE DELAY FOR THE SIMILAR REASONS IN ASSESSEES HUSBAND CASE WHERE THE APPEA LS WERE FILED FOR THE VERY SIMILAR ASS ESSMENT YEARS 2003 - 04 TO 2 005 - 06 WITH DELAY OF 288 DAYS. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE CASE LAWS RELIED UPON. THE APPEALS WERE FILED 5 ITA NO.9190 TO 9192 /MUM/2010 (A.Y: 2003 - 04, 2004 - 05, 2005 - 06) MRS. T.Z. MATHEW WITH A DELAY OF 288 DAYS BY THE ASSESSEE WE FIND FROM THE COOR DINATE BENCH DECISION THAT IN ASSESSEES HUSBAND CASE ON SIMILAR CIRCUMSTANCES WHERE THE APPEALS WERE FILED WITH DELAY OF 288 DAYS , THE TRIBUNAL CONDONED THE DELAY AFTER CONSIDERING THE REASONS FOR DELAY IN FILING THE APPEALS AND CONCLUDED THAT THERE IS A SUFFICIENT AND REASONABLE CAUSE IN NOT FILING THE APPEALS IN TIME FOR THE REASONS EXPLAINED THEREIN AND FOLLOWING THE ORDER OF THE COORDINATE BENCH IN THE CASE OF Z AKARIA MATHEWS HUSBAND OF THE ASSESSEE WE CONDONE THE DELAY IN FILING THESE APPEALS AND T AKE ON RECORD FOR DISPOSAL ON MERITS. 9. COMING TO THE MERITS OF THE CASE THE ASSESSEE IS CHALLENGING THE REOPENING OF THE ASSESSMENT AS WELL AS THE PROCEEDINGS PURSUANT TO ISSUE OF NOTICE U/S 148 OF THE ACT. IN THIS CASE THE REVENUE COULD NOT PROVE THAT TH E NOTICE U/S 143(2) WAS SERVED ON T HE ASSESSEE, IT IS ALSO NOT PROVED THAT THE REASONS FOR REOPENING ARE FURNISHED TO THE ASSESSEE. THIS IS VERY MUCH CLEAR FRO M THE ORDER PASSED U/S 7(1) OF THE RIGHT TO INFORMATION ACT , 2005 BY THE CPIO AND ITO ON 05.05.2 017 WHICH IS CLEARLY STATED THAT RELEVANT INFORMATION SOUGHT BY THE ASSESSEE WAS NOT PROVIDED AS THE CA SE RECORDS WERE NOT TRACEABLE. THE C ASE RECORD FOR ASSESSMENT YEAR 2003 - 04 WAS TRACED OUT AND A COPY OF NOTICE U/S 148 WHICH WAS ACKNOWLEDGED WAS PROVID ED TO THE ASSESSEE. IT WAS STATED THAT OTHER INFORMATION REGARDING THE REASONS F OR REOPENING AND SERVICE OF NOTICE U/S 143(2) OF THE ACT WERE NOT ON RECORD AND THEREFORE NOT PROVIDED TO THE ASSESSEE. IT 6 ITA NO.9190 TO 9192 /MUM/2010 (A.Y: 2003 - 04, 2004 - 05, 2005 - 06) MRS. T.Z. MATHEW WAS ALSO CLEARLY MENTIONED THAT T HE CASE RECORDS FOR THE ASSESSMENT YEAR S 2004 - 05 AND 2005 - 06 ARE NOT TRACED OUT TILL DATE. IN VIEW OF THIS ORDER IT IS APPARENTLY CLEAR THAT THE REASONS FOR REOPENING OF ASSESSMENT FOR THESE ASSESSMENT YEARS AND THE SERVICE OF NOTI CE U/S 143(2) ON ASSESSEE ARE NOT AVAILA BLE OR THEY ARE NOT TRACEABLE. IN THE ABSENCE OF SERVICE OF NOTICE U/S 143(2) OF THE AC T AND IN THE ABSENCE OF PROOF OF FURNISHING OF REASONS FOR REOPENING , THE REASSESSMENT MADE U/S 143(2 ) R.W. 147 OF THE ACT BECOMES BAD IN LAW. IT HAS BEEN HELD BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. VIDESH SANCHAR NIGAM LTD. (SUPRA) THAT REASSESSMENT IS BAD IN LAW IF REASONS FOR REOPENING SUCH ASSESSMENT ARE NOT FURNISHED TO THE ASSESSEE. IN THE CASE OF CIT V. M/S MALVIKA ARUN SOMAIYA (SUPRA) THAT THE J URISDICTIONAL HIGH COURT AFFIRMED THE ORDER OF THE TRIBUNAL WHEREIN IT WAS HELD THAT NOTICE U/S 143(2) OUGHT TO HAVE BEEN SERVED UPON ASSESSEE BEFORE TAKING ANY FURTHER PROCEEDINGS THEREFORE ORDER OF ASSESSMENT WAS IN VIOLATION OF STATUTORY PROVISIONS. IN THIS CASE THE REVENUE COULD NOT PROVE THAT THE REASONS FOR REOPENING OF ASSESSMENT WERE FURNISHED TO THE A SSESSEE AND THE NOTICE U/S 143(2 ) WAS SERVED ON THE ASSESSEE B EFORE COMPLETION OF ASSESSMENT. 10. THEREFORE, RESPECTFULLY FOLLOWING THE SAID DECISION OF THE JURISDICTIONAL HIGH COURT WE QUASH THE RE ASSESSMENT ORDERS PASSED U/S 143(3) R.W. S 147 OF THE ACT FOR THE ASSESSMENT YEAR 2003 - 04 TO 2005 - 06. HOWEVER, THE REVENUE IS AT LIBERTY TO FILE MISCELLANEOUS APPLIC ATIONS FOR 7 ITA NO.9190 TO 9192 /MUM/2010 (A.Y: 2003 - 04, 2004 - 05, 2005 - 06) MRS. T.Z. MATHEW RECALL OF THIS ORDER IN CASE THE CASE RECORDS ARE LOCATED AND THERE IS PROOF OF SERVICE OF NOTICE U/S 143(2) AS WELL AS PROOF OF FURNISHING OF REASONS FOR REOPENING OF ASSESSMENT S . 11. SINCE WE HAVE DISMISS ED ALL THESE APPEALS ON PRELIMINARY GROUND WE ARE NOT ADJUDICATING THE GROUNDS RAISED ON MERITS I.E. , DISALLOWANCE /ADDITION MADE IN THE ASSESSMENTS AS IT WILL BE ONLY AN AC ADEMIC EXERCISE AT THIS STAGE. 12. IN THE RESULT APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 23 RD AUGUST , 2017. SD/ - SD/ - ( RAJENDRA ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 23/ 0 8 / 2017 VSSGB , SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUM 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//