The Dy.Director of Income tax(Exemption), Ahmedabad V. Naroda Enviro Projects Ltd., Ahmedabad

ITA 931/AHD/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89630 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-06-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 30-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: SN SOPARKARAR
• Keywords: Reopening of assessment; Audit objection; Reassessment proceedings
• Section: 115JB; 147

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER ./ ././ ./ ITA NO. 931/AHD/2011 / ASSESSMENT YEAR: 2003-04 DEPUTY DIRECTOR OF INCOME-TAX (EXEMPTION), AHMEDABAD V/S. NARODA ENVIRO PROJECT LTD., PLOT NO.512-515, PHASE1, GIDC NARODA, AHMEDABAD PAN : AAFFN 9138 D / // / (APPELLANT) !' !' !' !' / // / (RESPONDENT) REVENUE BY : SHRI DINESH SINGH, SR. DR. ASSESSEE(S) BY : SHRI S.N. SOPARKAR, AR #$ % &'(/ // / DATE OF HEARING : 10/06/2015 )* % &'( / // / DATE OF PRONOUNCEMENT: 19/06/2015 +, +, +, +,/ // / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THIS IS AN APPEAL FILED BY THE REVENUE AND IS DIREC TED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX(APPEALS )-XXI, AHMEDABAD DATED 12.01.2011, PERTAINING TO ASSESSMENT YEAR 200 3-04. 2. IN THIS APPEAL BY THE REVENUE FOLLOWING GROUND I S RAISED:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIR ECTING TO DELETE THE ADDITION OF RS.1,13,13,831/- BEING PROVISION FOR BA D AND DOUBTFUL DEBT IN COMPUTATION OF BOOK PROFIT U/S 115JB OF THE I.T. AC T, 1961. 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTE D BY THE LD. COUNSEL FOR THE ASSESSEE THAT UNDER RULE 27 OF THE ITAT RULES, THE RESPONDENT IS PERMITTED TO SUPPORT THE ORDER OF THE CIT(A) ON ANY GROUND WHICH IS DECIDED AGAINST HIM. HE STATED THAT BEFORE THE CIT (A) THE ASSESSEE HAS ITA NO. 931/AHD/2011 DCIT V. NARODA ENVIRO PROJECT LTD FOR AY 2003-04 2 CHALLENGED THE VALIDITY OF REOPENING OF ASSESSMENT. THE CIT(A) DISCUSSED THE ASSESSEES CONTENTION; HOWEVER, ULTIMATELY DID NOT AGREE WITH ASSESSEES CONTENTION AND DECIDED THE APPEAL OF THE ASSESSEE O N MERIT, DELETING THE ADDITION MADE BY THE ASSESSING OFFICER. SINCE THE E NTIRE ADDITION MADE BY THE ASSESSING OFFICER WAS DELETED BY THE CIT(A), TH E ASSESSEE HAS NOT PREFERRED ANY APPEAL. HOWEVER, NOW THE ASSESSEE CH OOSES TO SUPPORT THE ORDER OF THE CIT(A), RELYING UPON RULE 27 OF THE IT AT RULES. HE SUBMITTED THAT IN THE STATEMENT OF FACTS FURNISHED BY THE ASS ESSING OFFICER ALONGWITH MEMO OF APPEAL HAS MENTIONED THAT THE CASE WAS REOP ENED U/S 147 ON THE BASIS OF AUDIT OBJECTION RAISED BY THE REVENUE AUDI T. HE STATED THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF RA AJRATNA METAL INDUSTRIES LTD. VS. ACIT, [2014] 49 TAXMANN.COM 15 (GUJARAT) H AS HELD THAT THE REOPENING OF ASSESSMENT SOLELY ON THE GROUND OF AUD IT OBJECTION IS NOT VALID. HE, THEREFORE, SUBMITTED THAT ONCE THE ASSESSMENT O RDER ITSELF IS NOT VALID, THE ADDITION MADE TO THE BOOK PROFIT CANNOT SURVIVE . HE, THEREFORE, SUBMITTED THAT SINCE THE ASSESSEE HAS NOT FILED THE APPEAL OR CROSS-OBJECTION AGAINST THE ORDER OF THE CIT(A), THE ASSESSEE CANNO T CLAIM THE QUASHING OF THE ASSESSMENT ORDER, BUT THE ONLY PRAYER OF THE AS SESSEE IS TO SUSTAIN THE ORDER OF THE CIT(A). 4. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND ALSO ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF NEW LIGHT TRADING CO. VS. CIT, 256 ITR 391, WHEREIN THE HONBLE DELHI HIGH COURT HAS HELD THAT AUDIT OBJECTION ON THE POINT OF FACT CAN BE A VALID GROUND FOR RE-OPENING OF ASSESSMENT. 5. WE HAVE CAREFULLY CONSIDERED THE ARGUMENT OF BOT H THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. IN THE STAT EMENT OF FACTS FURNISHED BY THE ASSESSING OFFICER, PARAGRAPH 1 READS AS UNDE R:- ITA NO. 931/AHD/2011 DCIT V. NARODA ENVIRO PROJECT LTD FOR AY 2003-04 3 THE RETURN OF INCOME FOR THE A.Y. 2003-04 FILED BY THE ASSESSEE WITH ITO, WARD-5(1) AHMEDABAD ON 25-11-2003 DECLARING NIL. T HE CASE WAS REOPENED U/S 147 OF THE I.T. ACT ON THE BASIS OF AU DIT OBJECTION RAISED BY THE REVENUE AUDIT AFTER OBTAINING THE APPROVAL OF THE C OMMISSIONER OF INCOME TAX. THERE AFTER THE CASE WAS TRANSFERRED TO THE DD IT(E) AHMEDABAD. THE ASSESSEE TRUST IS A LIMITED COMPANY INCORPORATED IN OCTOBER 1995 AND CONVERTED INTO A COMPANY UNDER SECTION 25 OF THE CO MPANIES ACT 1956 W.E.F. 25.12.2005. 6. THUS, THE ASSESSING OFFICER HAS CLEARLY MENTIONE D THAT THE CASE WAS REOPENED U/S 147 OF THE INCOME-TAX ACT ON THE BASIS OF AUDIT OBJECTION RAISED BY THE REVENUE AUDIT AFTER OBTAINING THE APP ROVAL OF THE COMMISSIONER OF INCOME-TAX. THE HONBLE JURISDICTI ONAL HIGH COURT CONSIDERED THE VALIDITY OF REOPENING OF ASSESSMENT U/S 147 IN THE CASE OF RAAJRATNA METAL INDUSTRIES LTD (SUPRA) AND HELD THA T THE REOPENING OF ASSESSMENT ON THE BASIS OF AUDIT OBJECTION IS NOT P ERMISSIBLE. THE RELEVANT OBSERVATION IN THIS REGARD IN PARAGRAPH 9 OF THE OR DER READS AS UNDER:- 9. IN VIEW OF THE ABOVE AND FOR THE REASONS STATED HEREIN ABOVE, PRESENT PETITION SUCCEEDS ON THE AFORESAID GROUND ALONE, I. E. THE ASSESSMENT WAS REOPENED SOLELY ON THE GROUND OF AUDIT OBJECTIONS R AISED BY THE AUDIT PARTY. CONSEQUENTLY, THE IMPUGNED REASSESSMENT PROCEEDINGS ARE HEREBY QUASHED AND SET ASIDE. FURTHER, IT IS MADE CLEAR THAT WE HA VE EXPRESSED NO OPINION WITH RESPECT TO THE GROUNDS OF OBJECTIONS RAISED AN D THE IMPUGNED REASSESSMENT PROCEEDINGS ARE QUASHED AND SET ASIDE SOLELY ON THE AFORESAID ONE GROUND ONLY. RULE IS MADE ABSOLUTE. IN THE FACT S AND CIRCUMSTANCES OF THE CASE, THERE SHALL BE NO ORDER AS TO COSTS. 7. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, HAS RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN TH E CASE OF NEW LIGHT TRADING CO. VS. CIT, 256 ITR 391. HOWEVER, THE ITA T, WORKING IN THE STATE OF GUJARAT, IS BOUND BY THE DECISION OF HONBLE GUJ ARAT HIGH COURT WHICH IS THE JURISDICTIONAL HIGH COURT. THE DECISION OF THE JURISDICTIONAL HIGH COURT IS BINDING UPON ALL THE AUTHORITIES WORKING WITHIN THE JURISDICTION OF THE ITA NO. 931/AHD/2011 DCIT V. NARODA ENVIRO PROJECT LTD FOR AY 2003-04 4 HONBLE GUJARAT HIGH COURT. THEREFORE, WE, RESPECT FULLY FOLLOWING THE ABOVE DECISION OF HONBLE JURISDICTIONAL HIGH COURT , HOLD THAT THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS NOT VALIDLY REOPENED U/S 147. BE THAT AS IT MAY BE, THE ASSESSEE HAS NOT FI LED ANY APPEAL OR CROSS- OBJECTION AGAINST THE ORDER OF THE CIT(A). UNDER R ULE 27, THE RESPONDENT MAY SUPPORT THE ORDER APPEALED AGAINST ON ANY OF TH E GROUNDS DECIDED AGAINST HIM. THEREFORE, UNDER RULE 27, THE MAXIMUM RELIEF ASSESSEE CAN GET IS THE SUSTENANCE OF THE ORDER OF THE CIT(A). IN V IEW OF ABOVE, WE, RELYING UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIG H COURT IN THE CASE OF RAAJRATNA METAL INDUSTRIES LTD (SUPRA) AND CONSIDER ING RULE 27 OF THE ITAT RULES, UPHOLD THE ORDER OF THE CIT(A) AND DISMISS T HE APPEAL FILED BY THE REVENUE. 8. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 19 TH JUNE, 2015 AT AHMEDABAD. SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 19/06/2015 BIJU T., PS +, % !&- .+-& +, % !&- .+-& +, % !&- .+-& +, % !&- .+-&/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. & #/ / CONCERNED CIT 4. #/ ( ) / THE CIT(A) 5. -23 !& , , / DR, ITAT, AHMEDABAD 6. 34 5$ / GUARD FILE . +,# +,# +,# +,# / BY ORDER, TRUE COPY 6 66 6/ // / 7 7 7 7 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD