ACIT, CHENNAI V. M/s. Tarachanthini Services Pvt. Ltd., CHENNAI

MA 229/CHNY/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 7367 (ITAT-CHENNAI)
• Duration Of Justice: 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2000-2001
• Appeal Filed On: 21-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAJI P JACOB IRSCIT
• Keywords: Search and seizure
• Section: 143(3); 147; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI [BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI HARI OM MARATHA, JUDICIAL MEMBER] M.P.NO.228 & 229/MDS/2011 [IN I.T.A NOS. 473/MDS/2010 & 549/MDS/2010] ASSESSMENT YEAR : 2000-01 THE ASST. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE III(I) CHENNAI VS M/S TARACHANTHINI SERVICES PVT. LTD NO.25, TAURUS NO.1, FIRST MAIN ROAD UNITED INDIA COLONY, KODAMBAKKAM CHENNAI 600 024 [PAN AAACP9272H] (PETITIONER) (RESPONDENT) PETITIONER BY : SHRI SHAJI P. JACOB, IRS,CIT RESPONDENT BY : NONE DATE OF HEARING : 9-12-2011 DATE OF PRONOUNCEMENT : 9-12-2011 O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THESE MISCELLANEOUS PETITIONS HAVE BEEN FILED B Y THE REVENUE IN RELATION TO COMMON ORDER OF THE TRIBUNAL DATED 18.4.2011 PASSED IN CROSS APPEALS IN I.T.A.NOS. 473/MDS/2010 AND 549/MD S/2010, IN ABOVE ASSESSEES CASE, PERTAINING TO ASSESSMENT YEAR 20 00-01. MP 228 & 229/11 :- 2 -: 2. IN M.P.NO.228/MDS/2011, THE REVENUE HAS RAISED F OLLOWING GROUNDS TO GET THE ABOVE TRIBUNALS ORDER RECTIFIED U/S 254(2) OF THE ACT: (1) THE HON'BLE ITAT VIDE ITS ORDER DATED 18.04.20 11 IN ITA NO.473/MDS/2010 & ITA NO.549/MDS/2010 HAS DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE COMPANY VIZ., M/S. TARACHANTHINI SERVICES PVT LTD., FOR A.Y. 2000-01. (2) IT IS SUBMITTED THAT, WHILE DECIDING THE APPEAL IN FAVOUR OF THE ABOVE ASSESSEE COMPANY, THE HON'BLE ITAT HAS NOT CO NSIDERED THE FACTS CORRECTLY. THE HON'BLE ITAT HAS FAILED TO APP RECIATE THAT THE FACTS EXISTING IN THE CASE OF M/S. IMPSAT LTD VS. I TO ARE DIFFERENT FROM THOSE EXISTING IN THE CASE OF M/S.TARACHANTINI SERV ICES PVT.LTD. (3) IN THE CASE RELIED UPON BY THE ITAT VIZ. M/S.IM PSAT LTD. VS. LTG, INCOME AROSE IN THE YEAR RELEVANT TO THE ASSESSMENT YEAR-2001-02 AND THE COMPANY-M/S.IMPSAT LTD. WAS DISSOLVED IN SE PT,2001. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED ASSESSIN G THE INCOME ACCRUED IN THE FINANCIAL YEAR 2000-01. HOWEVER, THE FACTS ARE DISTINGUISHABLE FROM THE CITED CASE AS EXISTING IN THE CASE OF MIS. TARACHANTINI SERVICES PVT LTD. HERE, THE ASSESSEECO MPANY WAS DISSOLVED WITH EFFECT FROM 10.05.2007. THE ASSESSME NT U/S 143(3) RWS 147 IN THIS CASE WAS COMPLETED ON 31.12.2007 MAKING AN ASSESSMENT OF THE INCOME WHICH ARISEN IN THE F.Y.1999-2000. IT IS PERTINENT TO NOTE THAT THE COMPANY WAS VERY MUCH IN EXISTENCE IN THE FINANCIAL YEAR 1999-2000 AND HAD FILED A RETURN OF INCOME ON 27.11 .2000 DECLARING A LOSS OF RS.78,42,605/-. THIS RETURN OF INCOME WAS ALSO PROCESSED U/S.143(1) ON 15.01.2002. IT IS ONLY TO RE-ASSESS THE INCOME R ELATING TO THE F.Y. 1999-2000, THE ASSESSMENT WAS RE-OPENED A ND THE REASSESSMENT COMPLETED ON 31.12.2007. IT IS PERTINE NT TO NOTE THAT THE ASSESSMENT WAS REOPENED TO CONSIDER THE INCOME WHIC H THE ASSESSEE COMPANY HAD FAILED TO DISCLOSE IN ITS RETU RN OF INCOME FILED FOR THE ASSESSMENT YEAR 2000-01. SINCE, THE FACTS A RE CLEARLY DISTINGUISHABLE FROM THE FACTS EXISTING IN THE CASE RELIED UPON BY THE HON'BLE ITAT, THE DECISION OF THE ITAT TO HOLD THAT THE ASSESSMENT MADE AFTER DISSOLUTION IS NULLITY IS NOT ACCEPTABLE . (4) THE HON'BLE ITAT HAS DUTIFULLY FOLLOWED THE DEC ISION OF THE ITAT, DELHI BENCH IN THE CASE OF M/S. IMPSAT LTD VS. ITO TO ARRIVE AT THE DECISION IN THE INSTANT CASE, THAT THE ASSESSMENT P ASSED AFTER THE DISSOLUTION OF THE ENTITY IS A NULLITY. THE HON'BLE ITAT HAS NOT GONE INTO THE MERITS OF THE CASE AND HAS UPHELD THE APPE AL OF THE ASSESSEE MP 228 & 229/11 :- 3 -: COMPANY AFTER CONSIDERING ONLY THE ADDITIONAL GROUN D OF THE ASSESSEE COMPANY THAT ASSESSMENT PASSED AFTER DISSOLUTION IS A NULLITY. THE HON'BLE ITAT HAS ERRED IN HOLDING THAT ANY ASSESSME NT COMPLETED AFTER DISSOLUTION IS A NULLITY FOR THE REASONS MENT IONED BELOW. (5) CHAPTER XV (SUB-DIVISIONS A TO N) OF THE INCOME TAX ACT CONTAINING SECTIONS 159 TO 180A DEALS WITH THE PROV ISIONS WITH REGARD TO ASSESSMENT IN SPECIAL SITUATIONS LIKE ASSESSMENT IN THE CASE OF LEGAL REPRESENTATIVES, REPRESENTATIVE ASSESSEE AND SO FORTH. IN SUB DIVISION 'L' THE NOMENCLATURE GIVEN IN THE ACT IS DISCONTINUANCE OF BUSINESS OR DISSOLUTION' WHEREIN THE PROVISIONS REG ARDING DISCONTINUANCE OF BUSINESS IS GIVEN. THESE PROVISIO NS ARE CLEARLY APPLICABLE FOR DISSOLUTION OF BUSINESSES ALSO AS IS EVIDENT FROM THE DESCRIPTION GIVEN TO SUB DIVISION L OF CHAPTER XV W HICH IS DISCONTINUANCE OF BUSINESS OR DISSOLUTION' THE HON'BLE ITAT HAS ERRED IN HOLDING THAT THERE IS A DISTINCTION IN THE INCOME TAX ACT WITH REGARD TO DISCONTINUANCE AND DI SSOLUTION OF A BUSINESS. HOWEVER, AS MENTIONED IN THE EARLIER PARA , THE INCOME TAX ACT MAKES NO DISTINCTION FROM THE DISCONTINUANCE OR DISSOLUTION OF A BUSINESS WHICH IS EVIDENT FROM THE FACT THAT PROVIS IONS GIVEN IN SEC.176(1) TO 176(7) HAVE BEEN GROUPED UNDER THE NOMENCLATURE 'DISCONTINUANCE OF BUSINESS OR DISSOLUTION' AS INDI CATED ABOVE. THEREFORE, THE PROVISIONS WHICH ARE APPLICABLE FOR DISCONTINUANCE OF A BUSINESS SQUARELY APPLY FOR THE DISSOLUTION OF A BU SINESS. SINCE THE PROVISIONS OF SEC.176(1) TO (7) PROVIDE FOR ASSESSM ENT OF INCOME ARISING IN THE YEAR OF DISCONTINUANCE OR EVEN AFTER DISCONTINUANCE, THE INCOME ARISING IN THE YEAR OF DISSOLUTION OR AFTER DISSOLUTION ARE ALSO ASSESSABLE TO TAX AND THEREFORE THE ACTION OF THE A SSESSING OFFICER FINALISING THE ASESSMENT AFTER DISSOLUTION OF THE B USINESS IN THE INSTANT CASE IS LEGALLY VALID AND NOT A NULLITY. (6) IN VIEW OF THE ABOVE, IT IS PRAYED THAT THE HON 'BLE ITAT MAY MODIFY ITS EARLIER ORDER AND PASS A SUITABLE ORDER IN THE INSTANT CASE FOR THE A.Y. 2000-01 BASED ON THE MERITS OF THE CASE. 3. THE ABOVE GROUNDS ARE EXACTLY SIMILAR AND VERBATIM IN M.P.NO.229/MDS/2011. AT THE TIME OF HEARING, NO ON E WAS PRESENT FROM THE SIDE OF THE ASSESSEE. MP 228 & 229/11 :- 4 -: 4. THE LD.DR WAS HEARD ON THESE PETITIONS. THE VERY PERUSAL OF THE MISCELLANEOUS PETITIONS GIVE A FEELING TO ANY P ERSON OF ORDINARY PRUDENCE THAT THE PETITIONER WANTS TO FIND FAULT WI TH THE FINDING GIVEN BY THE BENCH. IT APPEARS THAT THE REVENUE IS TRYIN G TO DISTINGUISH THE APPLICATION OF THE DELHI BENCH DECISION IN THE CASE OF M/SIMPSAT LTD VS ITO, ON WHICH RELIANCE WAS PLACED TO COME TO A CONC LUSION. WITH REFERENCE TO THE PROVISIONS CONTAINED IN SECTION 15 9 TO 180A, WHICH WAS NEVER A CASE BEFORE THE BENCH, THE PETITIONER H AS TRIED TO IMPROVE ITS CASE BY WAY OF THESE MISCELLANEOUS PETITIONS. IN FACT, THE REVENUE WANTS THE TRIBUNAL TO REVIEW ITS ORDER. THE WORDIN GS USED IN THE MISCELLANEOUS PETITION, LIKE IN PARA 4, WHERE IT HA S BEEN MENTIONED THAT THE HON'BLE ITAT HAS DUTIFULLY FOLLOWED THE D ECISION OF THE ITAT, DELHI BENCH IN THE CASE OF M/S IMPSAT LTD VS ITO TO ARRIVE AT THE DECISION IN THE INSTANT CASE, THAT THE ASSESSMENT PASSED AFTER THE DISSOLUTION OF THE ENTITY IS A NULLITY INSINUATE A SPERSIONS. THE PETITION FURTHER READS THAT THE HON'BLE TRIBUNAL HAS COMMIT TED ERROR IN HOLDING THAT ANY ASSESSMENT COMPLETED AFTER DISSOLUTION IS A NULLITY, AS CONTRARY TO WHICH THE DELHI BENCH OF THE TRIBUNAL I N M/S IMPSAT LTD.S CASE HAS DECIDED THE SAME ISSUE IN THE EXISTENCE OF THE SAME PROVISIONS WHICH HAVE BEEN REFERRED TO IN THIS PETI TION AND HAS COME TO A DEFINITE CONCLUSION. THIS BENCH BY FOLLOWING THE PRINCIPLE OF STARE DECISIS HAS TAKEN A VIEW IN CONSONANCE THEREWITH AND HAS A RRIVED AT ITS MP 228 & 229/11 :- 5 -: CONCLUSION. UNDER THE PROVISIONS OF SECTION 254(2), ONLY OBVIOUS, PATENT AND APPARENT MISTAKES CAN BE RECTIFIED AND N O PARTY HAS A RIGHT TO FIGHT WITH THE BENCH BY CLAMOURING THAT LOOK ! YOUR ORDER IS NOT CORRECT. THE PETITION SPEAKS THROUGH PARA 2 THAT T HE BENCH HAS INCORRECTLY APPRECIATED THE FACTS OF THE GIVEN CASE AND HAS ALSO FAILED TO APPRECIATE THE FACTS EXISTING IN THE CASE OF M/S IMPSAT LTD. VS ITO. WE ARE AFRAID OF THIS ATTITUDE OF THE AUTHORITY FIL ING THIS PETITION WHICH SEEMS TO BE DESPICABLE AND SEEMS TO BE AIMED AT SHO WING THAT THE BENCH IS NING-NONG AND DOES NOT UNDERSTAND BOTH FA CTS, PRECEDENTS AND LAW. THE PETITION, IN FACT, TANTAMOUNTS TO AN APPEAL. WE HAVE GOT NO POWER TO HEAR APPEAL AGAINST OUR OWN OR DER. THEREFORE, WE EXPRESS OUR DISPLEASURE ON THE WAY IN WHICH THE PETITIONS HAVE BEEN DRAFTED. 5. THE BENCH HAS FOLLOWED THE RATIO DECIDENDI LAID DO WN IN THE DELHI BENCH DECISION (SUPRA). THE DELHI BENCH WAS ALSO AWARE OF THE FACT AS TO WHAT THE TERM DISCONTINUANCE OR DIS SOLUTION OF BUSINESS DOES MEAN. IT IS ONLY AFTER CONSIDERING THE CORREC T CONTEMPLATION OF THESE TERMS, THE DELHI BENCH HAS TAKEN A VIEW. WE HAD ADOPTED AND APPLIED THE RATIO OF THAT DECISION. THE VERY READI NG OF THE PETITION SHOWS THAT IT IS NOT A PETITION WHICH CAN BE ENTERT AINED UNDER THE PROVISIONS OF SECTION 254(2) OF THE ACT. NO MISTAK E APPARENT FROM MP 228 & 229/11 :- 6 -: RECORD, WHICH CAN BE RECTIFIED U/S 254(2), HAS BEEN MADE OUT. ACCORDINGLY, WE DISMISS THESE MISCELLANEOUS PETITIO NS. WE REFRAIN FROM IMPOSING COST ON THE PETITIONER KEEPING IN VI EW THE ENTIRETY OF FACTS AND CIRCUMSTANCES OF THIS CASE. 6. IN THE RESULT, BOTH THE MISCELLANEOUS PETITIONS ST AND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9-1 2-2011. SD/- SD/- (DR. O.K. NARAYANAN) VICE-PRESIDENT (HARI OM MARATHA) JUDICIAL MEMBER DATED: 09 TH DECEMBER, 2011 RD : COPY TO: 1. PETITIONER 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR