INCOME TAX OFFICER, Jaipur V. SHRI RAJESH BHATIA, Jaipur

ITA 98/JPR/2018

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1978 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 29-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA
• Assessee Lawyers: S L PODDAR
• Keywords: Revised return
• Section: 143(3); 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 98/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2010-11 THE ITO, WARD- 2(3), JAIPUR. CUKE VS. SH. RAJESH BHATIA, A-84, ATRE PATH, SHYAM NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACQPB8389K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S.L. PODDAR (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. SEEMA MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 27/03/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 28/03/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 20.11.2017 OF CIT(A), JAIPUR ARISING FROM PENALTY O RDER PASSED U/S 271 (1)(C) OF THE ACT FOR A.Y. 2010-11. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CONCEALING T HE PENALTY U/S 271(1)(C) ON THE BASIS OF THE ITAT ORDER WHEREBY IT AT HAS QUASHED THE REOPENING U/S 148 RELYING ON DECISION O F SH. LOKU ITA NO. 98/JP/2018 ITO VS. SH. RAJESH BHATIA 2 RAM MALIK V/S CIT IGNORING THE HONBLE HIGH COURTS ORDER IN ACORUS UNITECH WIRELESS (P) LTD., V/S DCIT 345 ITR 228, MTNA V/S CBDT 246 ITR 172 AND HONBLE ALLAHABAND HIGH CO URTS ORDER IN THE CASE OF CIT V/S JORA SINGH 262 215 TAXMAN 4 24 WHEREIN IT WAS HELD THAT AO CAN INITIATE REASSESSMENT ACTION E VEN WHEN HE HAS NOT EXERCISED THE OPTION TO SCRUTINY NOTICE U/S 143(2)? 2. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT THE ASSESSMENT ORDER WAS QUASHED BY THIS TRIBUNAL IN THE QUANTUM A PPEAL VIDE ORDER DATED 08.11.2017 IN ITA NO. 551/JP/2014 AS HELD IN PARAS 8 AND 9 AS UNDER:- 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE UNDISPUTED FACTS RELEVANT T O ISSUE RAISED IN THE ADDITIONAL GROUND ARE THAT THE ASSESSEE FILE D RETURN OF INCOME ON 27.09.2010 WHICH WAS PROCESSED U/S 143(1) ON 07.12.2010. THEREAFTER, THE ASSESSEE FILED REVISED RETURN OF INCOME ON 10.09.2011 WHICH WAS ALSO PROCESSED U/S 143(1) ON 30.11.2011. THE TIME AVAILABLE FOR ISSUING NOTICE U /S 143(2) ON THE REVISED RETURN FILED BY THE ASSESSEE IS UPTO 30 .09.2012 HOWEVER, AO ISSUED NOTICE U/S 148 ON 17.08.2012. TH US, IT IS CLEAR THAT THE NOTICE ISSUE U/S 148 ON 17.08.2012 W AS PRIOR TO THE EXPIRY OF THE TIME PERIOD AVAILABLE TO THE AO FOR I SSUING NOTICE U/S 143(2) ON 30.09.2012. 9. THERE IS NO QUARREL ON THE POINT THAT THE JURISD ICTION OF THE AO TO ASSESS THE INCOME U/S 147 IS LIMITED AND CIRCUMS TANTIAL IN COMPARISON TO THE JURISDICTION UNDER SCRUTINY ASSES SMENT U/S 143(3). THEREFORE, PREFERRING THE PROCEEDING FOR AS SESSMENT OR REASSESSMENT U/S 147 BY THE AO INSTEAD OF THE SCRUT INY ASSESSMENT U/S 143(3) WOULD NOT BE PREJUDICIAL TO T HE INTEREST OF ITA NO. 98/JP/2018 ITO VS. SH. RAJESH BHATIA 3 THE ASSESSEE. THE ASSESSING OFFICER HAS ISSUED NOTI CE U/S 148 INSTEAD OF ISSUING NOTICE U/S 143(2) WHEN THE TIME WAS TILL AVAILABLE FOR ISSUING NOTICE U/S 143(2). BUT THIS H AS NOT CAUSED ANY PREJUDICE TO THE INTEREST OF THE ASSESSEE HOWEV ER, AS PER VIEW TAKEN BY SOME OF THE HIGH COURTS THE PROCEEDIN GS U/S 147 CANNOT BE INITIATED PRIOR TO THE TERMINATION OF ASS ESSMENT PENDING BEFORE THE AO. WE FIND THAT THERE ARE DIVER GENT VIEWS OF DIFFERENT HIGH COURTS ON THIS ISSUE. THE HONBLE DE LHI HIGH COURT IN CASE OF ACORUS UNITECH WIRELESS (P.) LTD. VS. DC IT (SUPRA) AS WELL AS IN CASE OF MTNA VS. CBDT 246 ITR 172 HAS TA KEN A VIEW THAT THE AO CAN INITIATE REASSESSMENT ACTION EVEN WHEN HE HAS NOT EXERCISED THE OPTION TO THE SCRUTINY NOTICE U/S 143(2). A SIMILAR VIEW TAKEN BY THE HONBLE ALLAHABAD HIGH CO URT IN CASE OF CIT VS. JORA SINGH (SUPRA). HOWEVER, THE HONBLE MA DRAS HIGH COURT IN CASE OF CIT VS. TCP LTD. (SUPRA) HAS TAKEN A DIFFERENT VIEW AND HELD THAT WHILE ASSESSMENT PROCEEDINGS RE MAIN IN INCHOATE ARE MAIN IN NO FRESH EVIDENCE OR MATERIAL COULD POSSIBLY UNEARTH. IF ANY SUCH MATERIAL OR EVIDENCE AVAILABL E THERE IS NO RESTRICTION OR RESTRAIN ON ITS BEING TAKEN INTO CON SIDERATION BY THE AO FOR FRAMING THE REGULAR ASSESSMENT. IT IS NOT PE RMISSIBLE UNDER THE LAW THAT THE AO CAN ALSO TRAVEL THE PATH OF SECTION 147 TO ENLARGE THE TIME AVAILABLE FOR FRAMING ASSESSMEN T. THE HONBLE JURISDICTIONAL HIGH COURT HAS ALSO TAKEN A VIEW THA T IF THE TIME IS AVAILABLE FOR ISSUING THE NOTICE U/S 143(2) THEN TH E INGREDIENT FOR ISSUING NOTICE U/S 148 ARE NOT FULFILL. THUS WHER E THERE ARE DIVERGENT VIEWS OF DIFFERENT HIGH COURTS ON THE SAM E ISSUE THE DECISION OF THE JURISDICTIONAL HIGH COURT IS BINDIN G ON THIS TRIBUNAL. ACCORDINGLY, WE ARE BOUND BY THE PRECEDENT OF THE JURISDICTIONAL HIGH IN CASE OF SHRI LOKU RAM MALIK VS. CIT (SUPRA ), WHEREIN THE HONBLE HIGH COURT AFTER CONSIDERING THE VARIOUS D ECISIONS ON THIS POINT HAS HELD IN PARAS 10, 10.1 TO 10.4 AS UNDER: - 10 WE HAVE HEARD COUNSEL FOR THE PARTIES. 10.1 BEFORE PROCEEDING WITH THE MATTER, IT WILL NOT BE OUT OF PLACE TO MENTION THAT ORDER U/S 143 WAS CONFIRMED ON 11.0 8.2000 WHEN THE RETURN WAS FILED AND THE NOTICE WHICH IS I MPUGNED U/S ITA NO. 98/JP/2018 ITO VS. SH. RAJESH BHATIA 4 148 CAME TO BE ISSUED BEFORE THE ASSESSMENT COULD H AVE BEEN DONE. 10.2 THE CONTENTION OF THE ASSESSEE THAT IN THE NOT ICE WHICH HAS BEEN ISSUED U/S 148, INGREDIENTS U/S 148 ARE NOT FU LFILLED, IN OUR CONSIDERED OPINION, WHEN ORDER U/S 143 IS PASSED, T HE OBSERVATIONS WHICH ARE MADE IN THE CASE OF RAJESH J HAVERI (SUPRA) IN PARAS NO. 11,12 &13 AS REPRODUCED HEREIN ABOVE WOULD APPLY. 10.3 THE CONTENTION RAISED BY THE COUNSEL FOR THE A PPELLANT IS REQUIRED TO BE ACCEPTED IN VIEW OF THE OBSERVATIONS MADE BY THE DELHI HIGH COURT IN KLM ROYAL DUTCH AIRLINES (SUPRA ). 10.4 IN THAT VIEW OF THE MATTER, WE ARE OF THE OPI NION THAT THE TRIBUNAL HAS SERIOUSLY COMMITTED AN ERROR IN UPHOLD ING THE NOTICE U/S 148 WHEN THE OFFICER HAS REGULARLY FRAMED ASSES SMENT. THE VIEW TAKEN BY THE CIT(A) IS REQUIRED TO BE ACCEPTED . THEREFORE, THE ISSUE IS ANSWERED IN FAVOUR OF THE A SSESSEE AND AGAINST THE DEPARTMENT. FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT WE HOLD THAT THE NOTICE ISSUED U/S 148 ON 17.08.2012 WHEN T HE TIME WAS AVAILABLE TO THE AO FOR ISSUING NOTICE U/S 143(2) T HEN THE INITIATION OF REOPENING U/S 148 IS NOT VALID AND TH E SAME IS LIABLE TO BE QUASHED. HENCE, REOPENING U/S 148 IS QUASHED BEING NOT VALID. SINCE THE NOTICE ISSUED U/S 148 IS QUASHED A S INVALID, THEREFORE, THE OTHER GROUND RAISED BY THE ASSESSEE BECOME IN- FRUCTUOUS. THUS, WHEN THE ASSESSMENT ORDER ITSELF HAS BEEN QUA SHED AND THEREFORE, THE ADDITION MADE BY THE AO ARE NO MORE EXISTED. HENCE, THE PENALTY U/S 271(1)(C) OF THE ACT HAS NO LEGS TO STA ND AND ACCORDINGLY, THE LD. CIT(A) HAS RIGHTLY DELETED THE PENALTY BY C ONSIDERING THE FACT OF ITA NO. 98/JP/2018 ITO VS. SH. RAJESH BHATIA 5 QUASHING OF THE ASSESSMENT ORDER BY THIS TRIBUNAL. IN VIEW OF THE FACT AND CIRCUMSTANCES OF THE CASE WHEN THE ASSESSMENT O RDER ITSELF IS QUASHED BY TRIBUNAL BEING INVALID THEN, THE CONSEQU ENTIAL PENALTY WILL NOT SURVIVE. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/03/2018 SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28/03/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- ITO, WARD- 2(3), JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- SH. RAJESH BHATIA, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 98/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR