Assistant Commissioner of Income Tax, Circle-1, Kakinada V. Sri Sarvaraya Sugars Limited, Chelluru

MA 30/VIZ/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9806 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 25-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: A ARUNA
• Keywords: Validity of assessment
• Section: 143(3); 148; 6; 28; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , ACCOUNTANT MEMBER M .A.NO S . 28 - 30 /VIZ/ 201 8 (ARISING OUT OF I.T.A.NO S 2 94 /VIZ/201 4, 576/VIZ/2014 AND 295/VIZ/2014 RESPECTIVELY ) ( / ASSESSMENT YEAR S : 20 0 6 - 20 0 7 TO 2008 - 09 RESPECTIVELY ) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1, KAKINADA VS. SARVARAYA SUGARS LIMITED CHELLURU RAYAVARAM MANDALAM EAST GODAVARI DIST. [PAN : A AECS6554N ] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SMT. SUMAN MALIK, DR / RESPONDENT BY : SMT. A.ARUNA, AR / DATE OF HEARING : 07 . 12. 2018 / DATE OF PRONOUNCEMENT : 07 . 12 .2018 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: TH E S E MISCELLANEOUS APPLICATIONS ARE FILED BY THE REVENUE AGAINST THE ORDER OF THE ITAT VIDE I.T.A. NO S .2 94,295 & 576 /VIZ/201 4 D ATED 2 0 . 12 .201 7 FOR THE ASSESSMENT YEAR (A.Y S .) 20 0 6 - 0 7, 2007 - 08 AND 2008 - 09. 2 M .A. NO S . 28 - 30 /VIZ/201 8 M/S SARVARAYA SUGARS LTD., CHELLURU 2. IN THIS CASE, AGAINST THE ORDER S OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)], THE ASSESSEE FILED APPEAL CHALLENGING THE VALIDITY OF ASSESSMENT MADE U/S 143(3) R.W.S. 147 FOR NON - COMMUNICATION OF REASONS FOR REOPENING THE ASSESSMENT. THE ASSESSEE RESPONDED TO THE NOTICE U/S 148 AND REQUESTED THE REASONS FOR REOPENING OF THE ASSESSMENT AND THE ASSESSING OFFICER (AO) FAILED TO COMMUNICATE THE REASONS FOR ISSUE OF NOTICE U/S 148 . AFTER HEARING BOTH THE PARTIES, THE ITAT QUASHED THE ASSESSMENT ORDERS FRAMED U/S 1 47 R.W.S. 143(3) OF THE ACT. WHILE CANCELLING THE ASSESSMENT S MADE U/S 147 R.W.S. 143(3), THE ITAT HAS CONSIDERED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GKN DRIVE SHAFTS (INDIA) LTD. VS. ITO [259 ITR 19], THE DECISION OF HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. TREND ELECTRONICS [379 ITR 0456] AND THE DECISION OF HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF BERGER PAINS (INDIA) LTD. DURING THE APPEAL HEARING THE LD.DR DID NOT BRING ANY OTHER CASE LAW TO CONTROVERT THE DECISIONS RE LIED UP ON BY THE ASSESSEE. ACCORDINGLY, THE ITAT HELD THAT THE AO IS DUTY BOUND TO COMMUNICATE THE REASONS ON THE REQUEST MADE BY THE ASSESSEE AS HELD BY THE HONBLE APEX COURT IN M/S GKN DRIVE SHAFTS (INDIA) LTD. VS. ITO [259 ITR 19] AND NON - COMMUNICATI ON OF REASONS RENDERS THE ASSESSMENT INVALID AND ACCORDINGLY QUASHED THE ASSESSMENTS 3 M .A. NO S . 28 - 30 /VIZ/201 8 M/S SARVARAYA SUGARS LTD., CHELLURU FRAMED U/S 143(3) R.W.S 147 VIDE ORDERS I.T.A NOS.294, 295 AND 576/VIZ/2014 DATED 20.12.2017. 3. AGAINST THE ORDER OF THE ITAT, THE REVENUE FILED MISCELLANEOUS APPLICATI ON STATING THAT NON COMMUNICATION OF REASONS MAY NOT BE CONSIDERED TO BE FATAL TO THE VALIDITY OF ASSESSMENT PROCEEDINGS INITIATED BY THE AO U/S 147 OF THE ACT AND RELIE D ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF S.NARAYANAPPA VS. CIT (1967)[63 ITR 219] . THE REVENUE ALSO PLACED RELIANCE ON THE DECISION OF COORDINATE BENCH OF ITAT DELHI IN THE CASE OF ITO, WARD - 11(6), NEW DELHI VS. SMT.GURINDER KAUR (2006)[102 ITD 189] (DELHI) ON IDENTICAL ISSUE AND REQUESTED TO RECALL THE ORDER TO RE - ADJUDICATE THE ISSUE U/S 254 OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS ACT). 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THIS CASE, THE ITAT HAS CONSIDERED VARIOUS JUDICIAL PRECEDENTS AND TAKEN A VIEW THAT NON COMMUNICATION OF REASONS ARE FATAL TO THE VALIDITY OF ASSESSMENT MADE U/S 147 R.W.S. 143(3) OF THE ACT. NON CONSIDERATION OF O THE R DECISIONS RELIED UPON BY THE AO WOULD AMOUNT T O REVIEW OF THE ORDER OF THE ITAT WHICH IS NOT PERMISSIBLE WITHIN THE SCOPE OF SECTION 254(2) OF THE ACT . IN THIS CONNECTION, IT IS ALSO OBSERVED THAT THE 4 M .A. NO S . 28 - 30 /VIZ/201 8 M/S SARVARAYA SUGARS LTD., CHELLURU REVENUE HAS N OT ARGUED BEFORE THIS TRIBUNAL OR BROUGHT THE DECISION OF S.NARAYANAPPA VS. CIT (SUPRA) DURING THE APPEAL HEARING. SIMILARLY, THE DECISION OF HONBLE COORDINATE BENCH OF ITAT DELHI IN THE CASE OF SMT.GURINDER KAUR (SUPRA) WAS ALSO NOT BROUGHT TO THE NOTICE OF THE BENCH DURING THE APPEAL HEARING. THEREF ORE, THERE IS NO OCCASION TO CONSIDER THE DECISION S OF HONBLE SUPREME COURT IN THE CASE OF S.NARAYANAPPA AND THE DECISION OF COORDINATE BENCH OF DELHI IN THE CASE OF SMT.GURINDER KAUR. IT IS SETTLED ISSUE THAT ONCE, THE TRIBUNAL HAS CONSIDERED THE DECISI ONS OF THE HONBLE HIGH COURTS OR SUPREME COURT AND TAKEN A CONSCIOUS DECISION, REVIEW OF THE SAME IS NOT PERMISSIBLE . THIS VIEW IS SUPPORTED BY THE DECISION OF HONBLE HIGH COURT O F JAMMU A ND KASHMIR IN AJAY KAPOOR. V. COMMISSIONER OF INCOME - TAX , 93 TAXMAN.COM 433 . SIMILARLY THE COORDINATE BENCH OF ITAT, BANGALORE IN GOWTHAMI ASSOCIATES. V. INCOME TAX OFFICER, WARD 2 (2) (2), BANGALORE, [2018] 89 TAXMANN.COM 192 (BANGALORE - TRIB.) HELD AS UNDER: 7 . SECTION 254 OF THE ACT READS AS FOLLOWS : ' (2) THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHIN [SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER WAS PASSED], WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB - SECTION (1), AND SHALL MAKE SUCH AMEND MENT IF THE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESSING OFFICER.' THE HON'BLE KARNATAKA HIGH COURT IN CIT V. MC. DOWELL & CO. LTD. [2009] 310 ITR 215/177 TAXMAN 317 AFTER CONSIDERING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. V. CIT [2007] 295 5 M .A. NO S . 28 - 30 /VIZ/201 8 M/S SARVARAYA SUGARS LTD., CHELLURU ITR 466/165 TAXMAN 307 (SC) HAS HELD THAT THE POWER UNDER SECTION 254(2) OF THE ACT CANNOT BE EXERCISED SO AS TO REVIEW ORDER PASSED BY THE TRIBUNAL. THE HON'BLE COURT HELD THAT APPLICATION OF PRINCIPLES LAID DOWN BY THE SUPERIOR COURTS TO THE FACTS OF THE CASE ON ERRONEOUS UNDERSTA NDING OF SUCH PRINCIPLES, RECORDING OF AN ERRONEOUS FINDING BY THE TRIBUNAL BASED ON FACTS ON RECORD, FORMATION OF A CONCLUSION ON ERRONEOUS APPLICATION OF PROVISIONS OF LAW TO THE FACTS OF THE CASE, ETC CANNOT BE HELD TO BE A 'MISTAKE APPARENT FROM THE RE CORD' WARRANTING RECTIFICATION BY THE TRIBUNAL IN EXERCISE OF ITS POWER UNDER SECTION 254(2). BY RECONSIDERING THE APPLICATION OF PRINCIPLES LAID DOWN BY SUPERIOR COURTS TO THE FACTS OF THE CASE OR BY RECONSIDERING ITS FINDINGS RECORDED, OR BY RECONSIDERIN G THE APPLICATION OF THE RELEVANT PROVISIONS OF LAW TO THE FACTS OF THE CASE, IN A MISCELLANEOUS PETITION UNDER SECTION 254(2), THE TRIBUNAL WOULD BE EXERCISING POWER OF REVIEW OF ITS EARLIER ORDER ON MERITS BUT NOT 'RECTIFICATION OF MISTAKE APPARENT FROM THE RECORD' AND SUCH REVIEW WOULD CERTAINLY BE BEYOND THE SCOPE OF SECTION 254(2). 8. IN VIEW OF THE AFORESAID DECISION OF THE HON'BLE KARNATAKA HIGH COURT WHICH IS THE JURISDICTIONAL HIGH COURT AND WHICH IS BINDING ON US, WE ARE OF THE VIEW THAT THROUGH THIS MISCELLANEOUS PETITION THE ASSESSEE IS SEEKING A REVIEW OF THE EARLIER ORDER OF THE TRIBUNAL BY RECONSIDERING THE APPLICATION OF PRINCIPLES LAID DOWN BY SUPERIOR COURTS TO THE FACTS OF THE CASE OR BY RECONSIDERING ITS FINDINGS RECORDED, OR BY RECONSID ERING THE APPLICATION OF THE RELEVANT PROVISIONS OF LAW TO THE FACTS OF THE CASE. SUCH A COURSE IS NOT PERMISSIBLE UNDER SECTION 254(2) OF THE ACT, AS HELD BY THE HON'BLE KARNATAKA HIGH COURT. IN THIS FACTUAL AND LEGAL MATRIX OF THE CASE, WE DISMISS THIS M P FILED BY THE ASSESSEE IN THE CASE ON HAND. WE CAREFULLY CONSIDERED THE MISCELLANEOUS APPLICATION S , THE ARGUMENTS OF THE LD.DR AND THE ORDER PASSED BY THIS TRIBUNAL AND FOUND NO MISTAKE IN THE ORDER WHICH REQUIRE MODIFICATION U/S 254(2) OF THE ACT. AC CORDINGLY, THE MISCELLANEOUS APPLICATIONS FILED BY THE REVENUE ARE DISMISSED. 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION S OF THE REVENUE ARE DISMISSED . 6 M .A. NO S . 28 - 30 /VIZ/201 8 M/S SARVARAYA SUGARS LTD., CHELLURU O RDER PRONOUNCED IN THE OPEN COURT ON 7 TH DECEMBER , 2018. SD/ - SD/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 07 . 1 2 .2018 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE APPELLANT ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 1, KAKINADA 2 . / THE RESPONDENT SARVARAYA SUGARS LIMITED, CHELLURU, RAYAVARAM MANDALAM , EAST GODAVARI DIST. 3. THE PR. COMMISSIONER OF INCOME TAX, VIJAYAWADA 4 . THE COMMISSIONER OF INCOME TAX (APPEALS) , VIJAYAWADA 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM