Mitesh Trading Co., Dahod V. The Income tax Officer, Ward-1, Dahod

ITA 928/AHD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0061 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-08-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 12-03-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K M MAHESH
• Keywords: Rule of consistency; Set aside
• Section: 143(3); 80IA; 208; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI G.D.AGRAWAL, VICE-PRESIDENT (AZ) AND SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER DATE OF HEARING : 12/08/2010 DRAFTED ON: 17 /08/2010 ITA NO.928/AHD/2008 ASSESSMENT YEAR : 2001-02 MITESH TRADING CO. GIDC DELSAR CHAKALIYA ROAD DAHOD VS. THE INCOME TAX OFFICER WARD-1, DAHOD PAN/GIR NO. : AACFM 3875 F (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI SAKAR SHARMA RESPONDENT BY: SHRI K.M. MAHESH SR. D.R. O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-VI, BARODA DATED 02/08/2007 PASSED FOR ASSESSMENT YEAR 2001-02. 2. THE SUBSTANTIVE AS ALSO THE LEGAL GROUND WHICH I S CONTESTED AT THE OUTSET IS GROUND NO.1 IN RESPECT OF THE INVOCATION OF THE RE-OPENING PROCEEDINGS U/S.147 OF THE I.T. ACT, 1961. IN THI S REGARD, THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SHRI SAKA R SHARMA HAS APPEARED AND CHALLENGED THE JURISDICTION OF RE-OPEN ING OF ASSESSMENT. HE HAS ARGUED THAT THE IMPUGNED ORDER PASSED U/S.143(3 ) R.W.S.147 OF THE I.T. ACT, 1961 DATED 25/09/2006 FOR ASSESSMENT YEAR 2001-02 WAS BAD ITA NO .928/AHD/2008 MITESH TRADING CO., VS. ITO ASST.YEAR - 2001-02 - 2 - IN LAW AS HELD BY THE RESPECTED ITAT AHMEDABAD BE NCH C IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2000-01 IN ITA NO.1299/AHD/2007 ORDER DATED 12/03/2010 AND THE RE LEVANT PORTIONS (PARAGRAPH NOS.2, 13, 14, 15, 16 & 18) ARE REPRODUC ED BELOW:- 2. THE FACTS OF THE CASE ARE THAT ASSESSEE, A PART NERSHIP FIRM, WAS ENGAGED IN THE BUSINESS OF PROCESSING OF UDAD I NTO UDAD DAL AND WAS ALLOWED DEDUCTION U/S. 80IA W.E.F. ASSESSME NT YEAR 1993- 94. SINCE THEN DEDUCTION U/S. 80IA IS BEING ALLOWE D TO THE ASSESSEE. THE CHARACTER OF PROCESSING AND MANUFACTU RING ACTIVITY OF THE ASSESSEE DID NOT UNDERGO ANY CHANGE. THE RET URN OF INCOME FOR A.Y. 2000-01 WAS FILED ON 20.10.2000 DECLARING TOTAL INCOME OF RS.4,21,030/-. THIS CASE WAS PROCESSED U/S.143 (1) OF THE ACT AND SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT U/S.143(3) WAS DONE ON 20.3.2003 AND INCOME WAS ASS ESSED AT RS.4,76,620/-. SUBSEQUENTLY, THE A.O. REOPENED THE ASSESSMENT BY ISSUE OF NOTICE U/S.148 (1) DATED 24.3.2005 FOR WIT HDRAWING DEDUCTION U/S.80IA. THE ASSESSEE FILED RETURN IN RE SPONSE TO THAT NOTICE ON 15.4.2005 DECLARING TOTAL INCOME OF RS.4, 21,030/- BEING THE INCOME DECLARED BY IT IN THE RETURN FILED ON 20 .10.2000. . 13. EVEN OTHERWISE, REOPENING OF THE ASSESSMENT IS BAD ON ANOTHER ACCOUNT ALSO. ONCE THE DEPARTMENT HAS ALLOW ED THE DEDUCTION U/S. 80IA IN THE EARLIER ASSESSMENT YEARS AND ALSO IN THE SUBSEQUENT ASSESSMENT YEARS AND NO ACTION HAS BEEN TAKEN TO REOPEN OR SET ASIDE OR REVISE THE ASSESSMENT FOR TH ESE YEARS, EVEN THOUGH ASSESSEE HAD POINTED OUT THIS FACT TO THE DE PARTMENT DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS, THEN FOLLO WING THE RULE OF CONSISTENCY THE DEPARTMENT SHOULD HAVE ALLOWED DEDU CTION U/S. 80- IA OR IN THE ALTERNATIVE THEY OUGHT TO HAVE TAKEN A CTION IN ALL THE YEARS, WHEREVER LAW PERMITTED, IF THEY THOUGHT THAT CONVERSION OF UDAD INTO UDAD DAL IS NOT A MANUFACTURING ACTIVITY WITHIN THE MEANING OF SECTION 80IA. HAVING NOT DONE SO THE A.O . OUGHT TO HAVE FOLLOWED THE RULE OF CONSISTENCY AND OUGHT NOT TO HAVE TAKEN ACTION THIS YEAR ALSO. THE PRINCIPLE OF CONSISTENC Y CANNOT PERMIT THE REVENUE TO TAKE A STAND CONTRARY TO THE ONE ACC EPTED BY IT. (CIT VS. H.P. COTTON TEXTILE MILLS LTD. (2009) 311 ITR 4 36 (P & H). THE ITA NO .928/AHD/2008 MITESH TRADING CO., VS. ITO ASST.YEAR - 2001-02 - 3 - PRINCIPLE OF CONSISTENCY REQUIRE THAT THE VIEW TAKE N BY THE DEPARTMENT IN THE PRECEDING YEARS SHOULD NOT BE DIS TURBED UNLESS THERE WAS A CHANGE IN THE FACTUAL AND LEGAL POSITIO N (CIT VS. MALBORO POLYCHEM PVT. LTD., (2009) 309 ITR -43) WHE REIN IT IS HELD AS UNDER:- WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH DIF FERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT, ONE WAY OR THE OTHER, AND THE PARTIES HAVE ALLOWED THAT POSITION TO BE SU STAINED BY NOT CHALLENGING THE ORDER, IT WOULD NOT BE AT ALL APPRO PRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. FO R THE SAKE OF CONSISTENCY AND FOR THE PURPOSE OF FINALITY IN ALL LITIGATIONS, INCLUDING THE LITIGATION ARISING OUT OF THE FISCAL STATUTES, EARLIER DECISIONS ON THE SAME QUESTION SHOULD NOT BE REOPEN ED UNLESS SOME FRESH FACTS ARE FOUND IN THE SUBSEQUENT YEAR. (CIT VS. MOONLIGHT BUILDERS & DEVELOPERS- 2008 307 ITR- 197 (DEL). 14. THE REVENUE HAD TO MAINTAIN THE CONSISTENCY FOR THE PURPOSE OF FINALITY IN ALL LITIGATION AND A DECISIO N ON THE SAME QUESTION WOULD NOT BE REOPENED UNLESS SOME NEW FACT S WERE FOUND WITH MATERIAL DIFFERENCE IN SUBSEQUENT YEARS. THIS WAS OBSERVED BY HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SOOD HARVESTOR (2008) 304 ITR 379 (P&H) AND FOLLOWING TH E DECISION OF HONBLE S.C. IN THE CASE OF RADHASWAMY SATSANG V S. CIT 193 ITR 321 (SC). 15. IN VIEW OF ABOVE REASONING AND FOLLOWING THE RU LE OF CONSISTENCY THE ASSESSMENT FOR THE A.Y. 2000-01 OUG HT NOT TO HAVE BEEN REOPENED AS THERE IS NO CHANGE IN FACTS AND LE GAL POSITION. 16. FURTHER, WE ARE OF THE VIEW THAT ONCE THE CONDI TIONS LAID DOWN FOR CLAIM OF DEDUCTION U/S. 80IA WERE HELD SAT ISFIED WHEN DEDUCTION WAS GRANTED IN THE FIRST ASSESSMENT YEAR I.E. A.Y. 1993- 94 THEN IT OUGHT TO HAVE BEEN ALLOWED IN SUBSEQUENT YEARS ALSO IF THERE IS NO CHANGE IN FACTUAL AND LEGAL POSITION. T HIS WAS SO OBSERVED BY THE TRIBUNAL IN M/S. PAREKH POWER CORPO RATION (SUPRA) OBSERVING ON PAGE 16 & 17 AS UNDER :- ITA NO .928/AHD/2008 MITESH TRADING CO., VS. ITO ASST.YEAR - 2001-02 - 4 - THE ASSESSEE WAS ALLOWED DEDUCTION IN A.YS.1998-99 TO 1999- 2000.THE CONDITIONS AS STIPULATED U/S.80IA HAVE TO BE COMPLIED WITH IN THE FIRST YEAR AND THE ASSESSEE HAS DULY CO MPLIED WITH THESE CONDITIONS. FOR THIS RELIANCE WAS PLACED ON T HE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V . TYRESOLES CONCESSIONARIES PVT. LTD., 213 ITR 660 (BOM.). THE ASSESSEE CLAIMED DEDUCTION U/S. 80IA (2)(IV)(B) OF THE ACT AS IT IS LOCATED IN INDUSTRIALLY BACKWARD STATE SPECIF IED IN EIGHTH SCHEDULE. SUBSEQUENT TO SPLIT OF ORIGINAL SECTION 8 0 IA, DEDUCTION IS NOW AVAILABLE U./S. 80IB(4) OF THE ACT. THE ASSE SSEE COMMENCED THE PRODUCTION WITH EFFECT FROM 08.08.199 7 AND, THEREFORE, THE FIRST ASSESSMENT YEAR WAS A.Y. 1998- 99. THERE HAD BEEN NO REOPENING OR ACTION U/S. 263 FOR WITHDRAWAL OF DEDUCTION EVEN AFTER MAKING THE ASSESSMENT U/S. 143(3) FOR A. Y. 2000-01 IN WHICH DEDUCTION SOUGHT WAS DENIED. IT IS A SETTLED PROPOSITION OF LAW THAT THE A.O. HAS NO POWER TO WITHDRAW RELIEF W ITHOUT DISTURBING THE RELIEF GRANTED IN THE EARLIER YEARS AS HELD IN SAURASHTRA CEMENT &CHEMICAL INDUSTRIES LTD., VS. CI T 123 ITR 669 (GUJ.), CIT VS. INDIA FORGE & DROP STAMPINGS LT D. 240 ITR- 208 (MAD) AND GLAXO SMITHKLIN CONSUMER HEALTHCARE L TD. V. ACIT 112 TTJ-94 (CHD.). 18. IN VIEW OF THE ABOVE WE HOLD THAT THE REOPENIN G OF THE ASSESSMENT U/S. 147/148 WAS BAD IN LAW. AS A RESULT ASSESSMENT ORDER FRAMED BY THE ASSESSING OFFICER ON 15.03.2006 WAS ILLEGAL AND IS CANCELLED. THE APPEAL OF THE ASSESSEE IS AC CORDINGLY ALLOWED. 3. ONCE ON IDENTICAL FACTS IN ASSESSEES OWN CASE T HE RESPECTED CO- ORDINATE BENCH HAS TAKEN A VIEW, THEREFORE, CONSIDE RING THE ENTIRETY OF THE CIRCUMSTANCES AND A VIEW ALREADY TAKEN, THE JUD ICIAL PROPRIETY REQUIRES ONE BENCH OF THE TRIBUNAL TO FOLLOW ANOTHE R BENCH WHERE FACTS ARE THE SAME. WE FIND NO REASON TO ADOPT ANY OTHER VIEW BECAUSE ON IDENTICAL FACTS AND CIRCUMSTANCES, THE AFORESAID R ESPECTED CO-ORDINATE BENCH HAS ALREADY TAKEN A DECISION WHICH OUGHT TO B E FOLLOWED IN THE ITA NO .928/AHD/2008 MITESH TRADING CO., VS. ITO ASST.YEAR - 2001-02 - 5 - PRESENT APPEAL. ACCORDINGLY, WE ALLOW THIS GROUND . SINCE THE PRELIMINARY ISSUE OF JURISDICTION GOES IN FAVOUR OF THE ASSESSEE, THEREFORE, REST OF THE GROUND NEED NOT TO BE ADJUDICATED UPON AS HELD IN THE CASE OF RAHUL KR.BAJAJ REPORTED AS 69 ITD 01 (S.B.). WE OR DER ACCORDINGLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 20/ 08 /2010. SD/- SD/- ( G.D.AGRAWAL ) ( MUKUL KR. SHRAWAT ) VICE PRESIDENT (AZ) JUDICIAL ME MBER AHMEDABAD; DATED 20/ 08 /2010 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEPARTMENT. 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-VI, BARODA 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD