Asstt.commissioner of Income -tax Wardha Cir, Nagpur V. M/s Anant trading Co., Wardha

MA 1/NAG/2011

• Counselvise Citation: [2013] 124 COUNSELVISE.COM (IT) 0035 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-02-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 11-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M A GOHEL
• Keywords: Rectification of order; Reassessment proceedings
• Section: 143(3); 14A; 147; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR E-BENCH, NAGPUR (THROUGH VIDEO CONFERENCE AT MUMBAI) . . , . / , . . BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER /AND SHRI RAJENDRA, ACCOUNTANT MEMBER M.A. NO. 01/NAG/2011 (ARISING OUT OF ITA NO. 267/NAG/2008) ASSESSMENT YEAR 2004-05 ASST. COMMISSIONER OF INCOME TAX, , WARDHA CIRCLE, WARDHA. VS. M/S. ANANT TRA DING COMPANY, BACHHRAJ BHAVAN, GANDHI CHOWK, WARDHA-442 001. PAN: AACFA 3659 D (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI PRAKASH MANE RESPONDENT BY : SHRI M.A. GOHEL / DATE OF HEARING : 01-02-2013 !' / DATE OF PRONOUNCEMENT : 08-02-2013 #$ / O R D E R PER RAJENDRA, AM VIDE HIS MISCELLANEOUS APPLICATION FILED ON 11 -01-2010 ASSESSING OFFICER (AO) HAS REQUESTED FOR RECTIFYING MISTAKES APPARENT FROM RECORD IN THE CASE OF M/S. ANANT TRADING COMPANY, WARDHA (ITA NO. 267/NAG/2008 AY. 2 004-05 ORDER DT. 02-06-2009). FROM THE AVAILABLE RECORDS, FOLLO WING FACTS EMERGE: 2. THE CASE OF ASSESSEE-COMPANY, FOR THE AY 2004-05,WA S REOPENED BY THE AO U/S 147 OF THE INCOME-TAX ACT,1961(ACT)IN ORDER TO MAKE PROPORTIONATE DISALLOWANCE U/S 14A OF THE ACT WITH REFERENCE TO EXEMPT DIVIDEND IN COME EARNED BY THE COMPANY. SIMULTANEOUSLY, IN THIS MATTER, PROCEEDINGS U/S 263 WERE ALSO TAKEN UP BY THE THEN CIT-IL, NAGPUR. IN PURSUANCE OF PROCEEDINGS U/S 147, ON THE SAME ISSUE, A PROTECTIVE ASSESSMENT ORDER FOR CASE UNDER CONSIDERATION WAS F INALISED, WHEREAS IN PURSUANCE TO PROCEEDINGS U/S 263, A SUBSTANTIVE ASSESSMENT IN TH IS CASE WAS FRAMED MAKING THE AFORESAID DISALLOWANCE. 2.1. ASSESSEE PREFERRED AN BEFORE THE ITAT, NAGPUR BENCH , MAINLY ON ACCOUNT OF M.A. NO. 01/NAG/2011 M/S. ANANT TRADING COMPANY 2 MULTIPLICITY OF PROCEEDINGS IN THESE CASES. THE ITA T, NAGPUR BENCH, VIDE ITS ORDER DATED 02-06-2009, ALLOWED ASSESSEES APPEAL IN AS M UCH AS PROCEEDINGS U/S 147 WERE MADE SUBSTANTIVE AND SUBSTANTIVE ASSESSMENTS MADE I N PURSUANCE TO ORDER U/S 263 WERE QUASHED. 2.2. THE ASSESSEE CHALLENGED THE ORDERS OF THE AO PASSED U/S 143(3) R.W.S 147 OF THE ACT, BEFORE THE FIRST APPELLATE AUTHORITY (FAA). APPELLANT-COMPANY CHALLENGED THE DISALLOWANCE U/S 14A AS WELL AS THE VALIDITY OF PRO CEEDINGS INITIATED U/S 147 OF THE ACT. FAA ACCEPTED OBJECTIONS FILED BY THE ASSESSEE WITH REGARD TO VALIDITY OF PROCEEDINGS U/S 147 AND QUASHED THE ASSESSMENT WITH OUT GOING INTO THE MERIT OF DISALLOWANCE U/S 14A OF THE ACT. ON 24-02-2010, TH E FAA DECIDED THE ISSUE-IN-AS QUESTION UNDER: .THE EXERCISE OF JURISDICTION U/S 147 OF THE IT ACT BY THE AO IS NOT LEGALLY TENABLE. SINCE THE AO HAS INITIATED THE REASSESSMEN T PROCEEDINGS WITHOUT VALID JURISDICTION FOR THE ASSESSMENT YEAR 2004-05, THE PROCEEDINGS CO NCLUDED IN PURSUANCE OF SUCH REOPENING U/S 147 OF THE IT ACT ARE HEREBY TREATED AS VOID AB INITIO. CONSEQUENTLY, THE REASSESSMENT PROCEEDINGS ARE HEREBY ANNULLED AND NO DECISION IS CONSIDERED NECESSARY ON THE MERITS OF THE CASE. 2.3. MEANWHILE, DEPARTMENT FILED APPEAL BEFORE THE HO NBLE HC OF BOMBAY NAGPUR BENCH, AGAINST THE ORDER OF THE ITAT DT. 02-06-2009 . APPEAL FILED BY THE DEPARTMENT WAS DISMISSED BY THE HONBLE HIGH COURT VIDE ITS OR DER DATED 21-10-2010. 3. BEFORE US, DR SUBMITTED THAT BECAUSE OF THE ORDERS OF THE TRIBUNAL AND THE FAA ISSUE OF MAKING DISALLOWANCE U/S.14A HAS NOT BEEN A DJUDICATED UPON, THAT ORDER OF THE TRIBUNAL DTD.02.06.2009 SHOULD BE RECTIFIED AS MIST AKE WAS APPARENT FROM THE RECORD. 3.1 WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE FACTS NARRATED AT PARAGRAPHS 2-2.3 IT IS CLEAR THAT DEPARTMENTAL AUTH ORITIES HAD INITIATED TWO SEPARATE PROCEEDINGS I.E. U/S.147 AND 263 SIMULTANEOUSLY FOR MAKING ADJUSTMENTS AS PER THE PROVISIONS OF THE SECTION 14A OF THE ACT. WITHOUT COMMENTING UPON THE JUSTIFICATION OF SUCH ACTION WE WOULD LIKE TO CONFINE OURSELVES T O THE ORDER PASSED BY THE TRIBUNAL ON 02.06.2009.IN ITS ORDER OF 02.06.2009 TRIBUNAL H AS HELD AS UNDER : HOWEVER, AT THIS STAGE, IT CAME TO THE NOTICE THAT THE DEPARTMENT HAD ALSO INITIATED PROCEEDINGS U/S 147 IN RESPECT OF SAME ASSESSEES FO R THE SAME ASSESSMENT YEARS ON THE SAME ISSUE WHEREIN THE SAME AMOUNT HAD BEEN DISALLO WED ON PROTECTIVE BASIS. HENCE, IN THE FITNESS OF THINGS, IT WAS SUGGESTED THAT THESE PROCEEDINGS COULD BE QUASHED SUBJECT TO THE CONDITION THAT THE ASSESSMENT MADE U/S.147 SHOU LD BE TREATED AS SUBSTANTIVE AND THE ASSESSEE COULD TAKE LEGAL RECOURSE IN ITS INTEREST IN THOSE APPEALS. THE LEARNED DR ALSO AGREED. .. FROM THE ABOVE, IT IS CLEAR THAT TRIBUNAL HAD TAKEN A DECISION AFTER CONSIDERING ALL THE FACTS, THAT REVENUE HAD ALSO CONSENTED TO THE PROPO SAL OF QUASHING THE 263 PROCEEDINGS. TRIBUNAL HAD HELD THAT ASSESSMENTS MA DE U/S. 147 TO BE TREATED AS SUBSTANTIVE. 4. IN OUR OPINION, THERE IS NO MISTAKE IN THE ORDER O F THE SAID ORDER OF THE TRIBUNAL WHICH CAN BE RECTIFIED U/S. 254 OF THE ACT. CONCEP T OF RECTIFICATION OF MISTAKES HAS TO BE UNDERSTOOD IN PROPER PROSPECTIVE. WHAT REVENUE IS URGING IS TO HEAR THE MATTER M.A. NO. 01/NAG/2011 M/S. ANANT TRADING COMPANY 3 AFRESH AND ACCORDINGLY PASS ORDERS. WE ARE OF THE OPINION THAT PROVISIONS OF SEC. 254 OF THE ACT DO NOT ALLOW RE-APPRAISAL/REVIEW OF A CO MPLETED MATTER. REMEDY FOR SUCH EXERCISE LIES SOMEWHERE ELSE. AS THERE IS NO MISTA KE APPARENT FROM THE RECORD IN THE ORDER PASSED BY THE TRIBUNAL ON 02-06-2009, SO, M. A. FILED BY THE AO IS REJECTED. M.A. FILED BY THE AO STANDS DISMISSED. ORDER PRONOUNCED BY E-BENCH AT MUMBAI ON THIS 8 TH DAY OF FEBRUARY, 2013 %& '() - &*+ , 8 TH FEBRUARY, 2013 ! #$ !-' . . SD/- SD/- ( . . / R.K. GUPTA ) ( / RAJENDRA ) #( / JUDICIAL MEMBER #( / ACCOUNTANT MEMBER %& MUMBAI, .# DATE: 8 TH FEBRUARY, 2013 TNMM COPY TO: 1. APPLICANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR, ITAT, NAGPUR 6. GUARD FILE /- 0 //TRUE COPY// BY ORDER, ASST. REGISTRAR, ITAT