ACIT, CHENNAI V. M/s Sundaram Finance Ltd, CHENNAI

ITA 983/CHNY/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 8234 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2010
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 11-08-2010
• Assessment Year: 1998-1999
• Appeal Filed On: 18-06-2009
• Court: TRIBUNAL
• Department Lawyers: K R MEENA
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Principle of natural justice; Set aside
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 983 & 984/MDS/2009 ASSESSMENT YEARS : 1998-99 & 2000-01 THE ASSISTANT COMMISSIONER OF INCOME-TAX, LARGE TAXPAYER UNIT, CHENNAI. V. M/S. SUNDARAM FINANCE LTD., 21, PATULLOS ROAD, CHENNAI-600 002. PAN : AAACS4944A (APPELLANT) (RESPONDENT) A N D C.O. NOS. 149 & 150/MDS/2009 (IN ITA NOS. 983 & 984/MDS/2009) ASSESSMENT YEARS : 1998-99 & 2000-01 M/S. SUNDARAM FINANCE LTD., V. THE ASST. CO MMISSIONER OF CHENNAI-600 002. INCOME-TAX, LARGE TAXPAY ER UNIT, CHENNAI. (CROSS OBJECTOR) (RESPONDEN T) DEPARTMENT BY : SHRI K.R. MEENA, ASSESSEE BY : SHRI R. VIJAYARAGHAVAN O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : I.T.A. NO. 983/MDS/2009 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS), LARGE TAXPAYER U NIT, CHENNAI IN ITA NO.5/07- 08/LTU(A), DATED 31-03-2009 FOR THE ASSESSMENT YEAR 1998-99. C.O. NO. I.T.A. NOS.983 & 984/MDS/09 AND C.O. NOS. 149 & 150/MDS/09 2 149/MDS/2009 IS THE CROSS OBJECTION FILED BY THE AS SESSEE IN THE REVENUES APPEAL IN ITA NO. 983/MDS/2009. I.T.A. NO. 984/MDS /2009 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A) , LTU, CHENNAI IN APPEAL NO.6/07-08/LTU(A) DATED 31-03-2009 FOR THE ASSESSME NT YEAR 2000-01. C.O. NO. 150/MDS/2009 IS THE CROSS OBJECTION FILED BY TH E ASSESSEE IN THE REVENUES APPEAL IN ITA NO. 984/MDS/2009. 2. SHRI K.R. MEENA, CIT-DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI R. VIJAYARAGHAVAN, ADVOCATE REPRESENTED ON BEHALF O F THE ASSESSEE. 3. AT THE TIME OF HEARING IT WAS SUBMITTED BY THE L EARNED AUTHORISED REPRESENTATIVE THAT IN THE CROSS OBJECTION THE ASSE SSEE HAS CHALLENGED THE ACTION OF THE ASSESSING OFFICER IN COMPLETING THE ASSESSME NT U/S. 147 OF THE INCOME-TAX ACT, 1961 WITHOUT GRANTING THE ASSESSEE THE COPY OF THE REASONS RECORDED. IN REPLY THE LEARNED DR FILED PAPER BOOK WHEREIN HE HA S PROVIDED THE COPY OF THE REASONS RECORDED FOR THE PURPOSE OF REOPENING FOR B OTH THE ASSESSMENT YEARS. IT WAS THE SUBMISSION THAT THE REASONS WERE BASED ON A REPORT RECEIVED FROM THE ADDL. DIT(INV.), UNIT-III, CHENNAI. THE LEARNED DR ALSO FILED BEFORE US THE COPY OF THE LETTER DATED 21-3-2005 FROM THE DY. DIRECTOR OF INCOME-TAX (INV.), UNIT- III, CHENNAI ADDRESSED TO THE ADDL. DIRECTOR OF INC OME-TAX (INV.), UNIT-III, CHENNAI. 4. ON A SPECIFIC QUERY FROM THE BENCH AS TO WHETHE R THE REASONS HAD BEEN GIVEN TO THE ASSESSEE BEFORE COMPLETING THE ASSESSM ENT AND AS TO WHETHER THE I.T.A. NOS.983 & 984/MDS/09 AND C.O. NOS. 149 & 150/MDS/09 3 SAID LETTER DATED 21-03-2005 HAD BEEN GIVEN TO THE ASSESSEE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE LEARNED DR SUBMITTED TH AT THE ASSESSEE HAD NOT ASKED FOR THE REASONS RECORDED OR THE SAID LETTER A ND CONSEQUENTLY THE SAME HAD NOT BEEN GIVEN. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESS EE AS ALSO THE OF THE LEARNED DR. A PERUSAL OF THE DECISION OF THE HON'B LE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. V. ITO REPORTED IN 259 ITR 19 CLEARLY SHOWS THAT THE PROPER PROCEDURE TO BE ADOPTED BY THE ASSESSEE AND THE DUTY OF THE ASSESSING OFFICER IN RESPECT OF THE CASES WHERE RE- OPENING OF THE ASSESSMENT IS DONE IS LAID DOWN IN THE SAID DECISION. AS PER THE SAID DECISION WHEN A NOTICE U/S. 148 OF THE ACT IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTICEE IS TO FILE THE RETURN AND IF HE SO DESIRES TO SEEK REASONS FOR ISSUING THE NOTICE. THE ASSESSING OFFICER IS BOUND TO FURNISH THE REASONS W ITHIN A REASONABLE TIME. ON RECEIPT OF THE REASONS, THE NOTICEE IS ENTITLED TO FILE OBJECTIONS TO THE ISSUANCE OF THE NOTICE AND THE OFFICER IS BOUND TO DISPOSE THE SAME BY PASSING A SPEAKING ORDER. IN THE PRESENT CASE IT IS NOTICED THAT FOR THE ASSESSMENT YEAR 1998-99 THE NOTICE U/S. 148 WAS ISSUED ON 30.3.205 AND THE ASSE SSEE HAS SUBMITTED LETTER DATED 19-04-2005 WHEREIN IT HAS BEEN SPECIFICALLY S UBMITTED THAT THE RETURN ORIGINALLY FILED MAY BE TREATED AS A RETURN IN RESP ONSE TO SEC.148 NOTICE. FOR THE ASSESSMENT YEAR 2000-01 THE NOTICE U/S. 148 HAD BEE N ISSUED ON 27.03.2006. IN THE APPEAL FILED BEFORE THE LEARNED CIT(A) THE ASSE SSEE HAS RAISED THE GROUND I.T.A. NOS.983 & 984/MDS/09 AND C.O. NOS. 149 & 150/MDS/09 4 THAT THE ASSESSMENT HAD BEEN COMPLETED U/S. 147 WIT HOUT FURNISHING THE ASSESSEE THE REASONS FOR REOPENING THE ASSESSMENT. THE LEARNED CIT(A) HAS NOT ADJUDICATED THIS GROUND OF THE ASSESSEE IN RESPECT OF THE NON-GRANTING OF THE REASONS FOR REOPENING OF THE ASSESSMENT. A PERUSAL OF THE ASSESSMENT ORDER ALSO DOES NOT SHOW THAT THE ASSESSEE HAS ASKED FOR THE COPY OF THE REASONS RECORDED. HOWEVER, THE FACT THAT THE ASSESSEE HAS RAISED A SPECIFIC GROUND BEFORE THE LEARNED CIT(A) WHICH HAS NOT BEEN DISPOS ED OF COMES IN FAVOUR OF THE ASSESSEE. FURTHER THE FACT THAT THE ASSESSING OFFI CER HAS NOT GIVEN THE COPY OF THE LETTER DATED 21-03-2005 WHICH IS SAID TO BE THE FOUNDATION FOR THE REOPENING OF THE ASSESSMENT ALSO SHOWS VIOLATION OF THE PRINC IPLES OF NATURAL JUSTICE. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT ON THIS ISSU E ITSELF THE ASSESSMENT ORDERS PASSED ARE LIABLE TO BE SET ASIDE AND THE ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION AFTER GRANTIN G THE ASSESSEE COPY OF THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT AN D WE DO SO. IN THE CIRCUMSTANCES, THE ISSUES IN THESE APPEALS ARE REST ORED TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION AFTER GRANTIN G THE ASSESSEE THE COPY OF THE REASONS RECORDED FOR THE PURPOSE OF REOPENING. THE ASSESSEE SHALL FILE ITS OBJECTIONS IF ANY TO THE ISSUANCE OF THE NOTICE OF REOPENING BEFORE THE ASSESSING OFFICER WITHIN REASONABLE TIME AFTER WHICH THE ASSE SSING OFFICER SHALL PASS A SPEAKING ORDER IN RESPECT OF THE REOPENING OF THE A SSESSMENT AND THEN COMPLETE THE ASSESSMENT DE NOVO IN LINE WITH THE DECISION OF THE HON'BLE SUPREME C OURT IN I.T.A. NOS.983 & 984/MDS/09 AND C.O. NOS. 149 & 150/MDS/09 5 THE CASE OF GKN DRIVESHAFTS (INDIA) LTD., REFERRED TO SUPRA. IN THE DE NOVO ASSESSMENT THE ASSESSING OFFICER SHALL GIVE THE ASS ESSEE COPIES OF ANY AND EVERY EVIDENCE/DOCUMENT WHICH HAS BEEN COLLECTED OR OBTAI NED BEHIND THE BACK OF THE ASSESSEE AND WHICH HE PROPOSES TO USE AGAINST THE A SSESSEE. IN THE CIRCUMSTANCES, THE APPEALS OF THE REVENUE AND THE C ROSS OBJECTIONS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE S. 6. THE ORDER WAS PRONOUNCED IN THE COURT ON 18-08-2 010. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 18 TH AUGUST, 2010. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE