I.T.O., Mandya V. Smt. K.R. Prabhavathi, Mandya

MA 5/BANG/2014

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 2940 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 03-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHANKAR PRASAD JT
• Keywords: Question of law; Reassessment proceedings
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER M.P. NO.5/BANG/2014 [IN ITA NO.234/BANGA/2011] ASSESSMENT YEAR : 2005-06 SMT. K.R. PRABHAVATHI, W/O. LATE SRI S.D. JAYARAM, 3814, 100 FT ROAD, ASHOKNAGAR, MANDYA. PAN: AAOPP 5744J VS. THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 2, MYSORE. APPLICANT RESPONDENT APPLICANT BY : DR. SHANKAR PRASAD, JT. CIT(DR) RESPONDENT BY : SHRI NARENDRA SHARMA, ADVOCATE DATE OF HEARING : 27.03.2015 DATE OF PRONOUNCEMENT : 10.04.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS A MISCELLANEOUS PETITION FILED BY THE REV ENUE PRAYING FOR RECTIFICATION OF CERTAIN ALLEGED ERRORS IN THE ORDE R OF THE TRIBUNAL DATED 23.8.2013 PASSED IN THE AFORESAID APPEAL. 2. IN THE AFORESAID APPEAL FILED BY THE ASSESSEE, T HE ASSESSEE HAD RAISED A GROUND VIZ., CONCISE GROUND OF APPEAL NO.2 , WHEREIN THE ASSUMPTION OF JURISDICTION BY THE AO U/S. 148 OF TH E ACT WAS CHALLENGED AS M.P. NO.5/BANG/2014 PAGE 2 OF 6 NOT FULFILLING THE MANDATORY REQUIREMENTS OF THE PR OVISIONS OF THE ACT. ON THE ABOVE ISSUE, THE TRIBUNAL NOTICED THAT BEFORE T HE CIT(APPEALS), THE ASSESSEE HAD CHALLENGED ONLY THE ACTION OF THE ASSE SSING OFFICER IN NOT FURNISHING THE REASONS RECORDED BEFORE ISSUE OF NOT ICE U/S. 148 OF THE ACT. THE CIT(A) WAS OF THE VIEW THAT SINCE THE ASSESSEE DID NOT ASK FOR THE REASONS RECORDED IN THE COURSE OF ASSESSMENT PROCEE DINGS BEFORE THE AO, NON-FURNISHING OF REASONS RECORDED CANNOT BE SAID T O BE ILLEGAL. THE CIT(A), THUS, UPHELD THE VALIDITY OF REOPENING OF A SSESSMENT PROCEEDINGS. 3. BEFORE THE TRIBUNAL, THE ASSESSEE CHALLENGED THE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS U/S. 148 OF THE ACT. T HE CHALLENGE TO VALIDITY OF ASSUMPTION OF JURISDICTION U/S. 148 WAS MADE BY THE ASSESSEE BEFORE THE TRIBUNAL WAS ON THE BASIS THAT REASSESSMENT PROCEED INGS WERE INITIATED ON THE GROUND THAT PARTICULAR ITEM OF INCOME HAS ESCAP ED ASSESSMENT, BUT NO ADDITION WAS MADE ON ACCOUNT OF THAT ITEM OF INCOME REFERRED TO IN THE REASONS RECORDED. IT WAS ARGUED THAT IN SUCH CIRC UMSTANCES, THE AO HAS TO DROP THE REASSESSMENT PROCEEDINGS AND CANNOT MAK E ADDITION IN RESPECT OF ANY OTHER INCOME, WHICH HAS ESCAPED ASSESSMENT. THE TRIBUNAL DEALT WITH THIS ARGUMENT IN PARAGRAPHS 6 TO 10 OF ITS ORD ER AND HELD THAT REASSESSMENT PROCEEDINGS WERE NOT VALIDLY INITIATED . 4. IN THIS MISCELLANEOUS PETITION, THE REVENUE HAS RAISED A POINT THAT THE ASSESSEE DID NOT CHALLENGE THE VALIDITY OF INIT IATION OF REASSESSMENT PROCEEDINGS U/S. 148 OF THE ACT ON THE GROUND ON WH ICH THE TRIBUNAL M.P. NO.5/BANG/2014 PAGE 3 OF 6 ALLOWED RELIEF TO THE ASSESSEE. ACCORDING TO THE R EVENUE, IN SUCH CIRCUMSTANCES, THE TRIBUNAL OUGHT TO HAVE REMANDED THE ISSUE TO THE CIT(APPEALS) FOR A DECISION AFRESH AND OUGHT NOT TO HAVE DECIDED THE APPEAL IN THE MANNER IN WHICH THE TRIBUNAL HAD DONE IN ITS ORDER DATED 23.8.2013. IN SUPPORT OF THE AFORESAID CONTENTION, THE REVENUE HAS SOUGHT TO PLACE RELIANCE ON THE DECISION OF THE HONBLE MA DHYA PRADESH HIGH COURT JUDGMENT IN CIT V. TOLLARAM HASSOMAL, 298 ITR 22 (MP) . IN THE AFORESAID DECISION, THE HONBLE M.P. HIGH COURT EXP RESSED THE VIEW THAT THE ADDITIONAL GROUNDS WERE RAISED BEFORE THE TRIBU NAL FOR THE FIRST TIME AND THE TRIBUNAL OUGHT TO HAVE SET ASIDE THE ORDER OF T HE CIT(APPEALS) AND REMANDED THE CASE TO CIT(APPEALS) FOR DECIDING THE APPEAL AFRESH ON THE ADDITIONAL GROUND, RATHER THAN TO DECIDE THE SAME O N MERITS FOR THE FIRST TIME BY THEMSELVES. 5. THE LD. DR REITERATED THE STAND OF THE REVENUE A S CONTAINED IN THE PETITION AND SUBMITTED THAT THE ORDER OF TRIBUNAL S HOULD BE RECTIFIED. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFOR E US THAT THE VALIDITY OF ASSUMPTION OF JURISDICTION U/S. 148 OF THE ACT W AS CHALLENGED BY THE ASSESSEE BEFORE THE CIT(A) AND IT CANNOT BE SAID TH AT THE GROUND RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL WAS AN ADDITIONAL GROUND. ACCORDING TO HIM, IT WAS A DIFFERENT FACET OF CHALLENGE TO THE V ALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS U/S. 148 OF THE ACT. ACCO RDING TO HIM, THEREFORE, M.P. NO.5/BANG/2014 PAGE 4 OF 6 THE PRINCIPLE LAID DOWN BY THE HONBLE M.P. HIGH CO URT IN THE CASE REFERRED TO BY THE REVENUE IS NOT APPLICABLE TO THE PRESENT CASE. 7. HE ALSO BROUGHT TO OUR NOTICE THE JUDGMENT OF TH E HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF SANKESHWAR PRINTERS PVT. LTD. V. CIT, (2013) 218 TAXMANN 360 (KAR) , WHEREIN THE HONBLE HIGH COURT HELD THAT LEGAL QUESTION CAN BE RAISED AT THE STAGE OF APPEAL AND S UCH A QUESTION NEED NOT BE RAISED AS A GROUND. THE HONBLE HIGH COURT FURT HER HELD THAT WHEN LEGAL QUESTION IS RAISED, THE TRIBUNAL HAS TO CONSIDER TH E SAME IN ACCORDANCE WITH LAW AND CANNOT REFUSE TO ENTERTAIN THE SAME. RELIANCE WAS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F NTPC LTD., 229 ITR 383 (SC) , WHEREIN THE HONBLE APEX COURT TOOK A VIEW THAT A NY QUESTION OF LAW ARISING FROM THE FACTS WHICH ARE ON RECORD IN T HE ASSESSMENT PROCEEDINGS SHOULD BE ALLOWED TO BE RAISED WHEN IT WAS NECESSARY TO CONSIDER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF THE ASSESSEE. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS. AT THE OUT SET, WE OBSERVE THAT THE ARGUMENT WHICH IS SOUGHT TO BE RAISED BY THE RE VENUE IN THIS MISCELLANEOUS PETITION WAS NEVER RAISED BY THE REVE NUE WHEN THE APPEAL WAS HEARD. IT IS NOT OPEN TO THE REVENUE TO FILE A MISCELLANEOUS PETITION AND URGE A POINT WHICH WAS NOT ARGUED WHEN THE APPE AL WAS HEARD BY THE TRIBUNAL. ON THIS SHORT GROUND ITSELF, THIS PETITI ON IS LIABLE TO BE DISMISSED AS DEVOID OF ANY MERIT. M.P. NO.5/BANG/2014 PAGE 5 OF 6 9. APART FROM THE ABOVE, IT IS SEEN THAT VALIDITY O F INITIATION OF REASSESSMENT PROCEEDINGS IS A JURISDICTIONAL ISSUE AND CAN BE RAISED AT ANY STAGE OF PROCEEDINGS. IN THE PRESENT CASE, VALIDIT Y OF INITIATION OF REASSESSMENT PROCEEDINGS U/S. 148 HAD BEEN RAISED B Y THE ASSESSEE BEFORE THE CIT(APPEALS) AND ALSO RAISED BEFORE THE TRIBUNAL. IT IS OPEN TO THE ASSESSEE TO URGE THE DIFFERENT FACETS OF VALIDI TY OF INITIATION OF REASSESSMENT PROCEEDINGS AND IT CANNOT BE CONFINED ONLY TO THAT FACET WHICH WAS RAISED BY THE ASSESSEE BEFORE THE CIT(APP EALS). THE DECISION CITED BY THE LD. COUNSEL FOR THE ASSESSEE CLEARLY L AY DOWN THE PROPOSITION THAT LEGAL QUESTION CAN BE RAISED AT THE STAGE OF A PPEAL, EVEN WITHOUT A GROUND BEING URGED IN THE GROUNDS OF APPEAL. THE D ECISION IN THE CASE OF SANKESHWAR PRINTER PVT. LTD. (SUPRA) OF THE HONBLE JURISDICTIONAL HIGH COURT BINDING ON THIS TRIBUNAL IS THEREFORE DIRECTL Y APPLICABLE TO THE PRESENT CASE. 10. AS FAR AS THE DECISION OF THE HONBLE MADHYA PR ADESH HIGH COURT IN TOLLARAM HASSOMAL (SUPRA) IS CONCERNED, IT IS NOT THE DECISION OF JURISDICTIONAL HIGH COURT AND IS CONTRARY TO THE LA W LAID DOWN BY THE JURISDICTIONAL HIGH COURT VIZ., HONBLE HIGH COURT OF KARNATAKA AND ALSO CONTRARY TO THE DECISION OF THE LAW LAID DOWN BY TH E HONBLE SUPREME COURT IN THE CASE OF NTPC LTD. (SUPRA) . WE ARE THEREFORE OF THE VIEW THAT THERE IS NO MERIT IN THIS MISCELLANEOUS PETITION FILED BY THE REVENUE AND ACCORDINGLY THE SAME IS DISMISSED. M.P. NO.5/BANG/2014 PAGE 6 OF 6 11. IN THE RESULT, THE MISCELLANEOUS PETITION IS DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DAY OF APRIL , 2015 . SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE, DATED, THE 10 TH APRIL , 2015 . /D S/ COPY TO: BY ORDER ASSISTANT REGISTRAR/ SENIOR PRIVATE SECRETARY ITAT, BANGALORE. 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE