ECEJY INTERNATIONAL P. LTD, V. ACIT CIR 6(2),

MA 519/MUM/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 3850 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 1995-1996
• Appeal Filed On: 27-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Keywords: Reopening of assessment; Retrospective amendment

Judgement Text

MA NO.519/MUM/2009 ASSESSMENT YEAR : 1995-96 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI I BENCH, MUMBAI BEFORE SHRI N.V. VASUDEVAN, (JUDICIAL MEMBER) AND SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) M.A NO. 519/MUM/2009 [ARISING OUT OF ITA NO. 4835/MUM./2001] ASSESSMENT YEAR : 1995-96 DATE OF HEARING : 16.7.2010 ESJAY INTERNATIONAL PVT. LTD. ...... APPELLA NT 48, LUXMI INDUSTRIAL ESTATE HANUMAN GALI OFF FERGUSON ROAD, LOWER PAREL MUMBAI 400 013 AAACE1066B VS. ASSISTANT COMMISSIONER OF INCOME TAX .. RESPON DENT CIRCLE 6(2), MUMBAI APPELLANT BY : SHRI NITESH JOSHI RESPONDENT BY : SHRI HARI GOVIND SINGH O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS MISCELLANEOUS APPLICATION, THE ASSES SEE APPLICANT SEEKS RECALL OF TRIBUNALS ORDER DATED 27 TH JULY 2005. 2. IT IS NECESSARY TO SET OUT PECULIAR FACTS IN THE BA CKDROP OF WHICH THE RECALL OF TRIBUNALS ORDER IS SOUGHT. IT WAS A CASE OF REOPENED ASSESSMENT. MA NO.519/MUM/2009 ASSESSMENT YEAR : 1995-96 PAGE 2 OF 5 THE ASSESSING OFFICER HAD RESORTED TO RE-ASSESSMENT PROCEEDINGS UNDER SECTION 147, AND, IN THE COURSE OF PROCEEDINGS SO R EOPENED, MADE CERTAIN ADDITIONS TO INCOME. AGGRIEVED, THE ASSESSEE CARRIE D THE MATTER IN APPEAL BEFORE THE CIT(A). WHILE CIT(A) REJECTED ASSESSEES GRIEVANCE AGAINST REOPENING OF ASSESSMENT, HE GAVE PARTIAL RELIEF ON MERITS. AGGRIEVED BY THE ORDER SO PASSED BY THE CIT(A), BOTH THE PARTIES I.E ., THE ASSESSEE AS ALSO THE ASSESSING OFFICER, CAME UP IN APPEAL BEFORE THE TRI BUNAL. 3. WHEN THE APPEAL CAME UP FOR HEARING BEFORE THE TRIB UNAL, THE ASSESSEE RAISED A LEGAL PLEA TO THE EFFECT THAT SIN CE NO NOTICE U/S 143(2) WAS SERVED ON THE ASSESSEE WITHIN ONE YEAR OF FILING OF INCOME TAX RETURN U/S 147, THE VERY ORDER PASSED BY THE ASSESSING OFFICER WAS VOID AB INITIO. THE TRIBUNAL, VIDE IMPUGNED ORDER, UPHELD THIS PLEA IN PRINCIPLE BUT REFERRED THE MATTER BACK TO THE CIT(A) FOR ADJUDICATION AFTE R ASCERTAINING CORRECT FACTS. 4. THAT IS HOW MERITS OF THE CASE WERE NOT ADJUDICATED BY THE TRIBUNAL IN THE IMPUGNED ORDER. 5. WHEN THE MATTER TRAVELLED BACK TO THE CIT(A), FOR A DJUDICATION ON THE QUESTION OF VALIDITY OF RE-ASSESSMENT PROCEEDINGS, THE CIT(A) DID UPHOLD THE PLEA OF THE ASSESSEE AND QUASHED THE RE-ASSESSM ENT PROCEEDINGS. THE ASSESSEES HAPPINESS WAS, HOWEVER, SHORT LIVED. THE RE WAS A RETROSPECTIVE AMENDMENT IN LAW, AND, IN VIEW OF THE SAME, TRIBUNA L REVERSED THE RELIEF GRANTED BY THE CIT(A) AND REINSTATED THE ASSESSMENT ORDER. 6. AS THE THINGS STAND NOW, WHEREAS VALIDITY OF RE-ASS ESSMENT PROCEEDINGS HAVE BEEN UPHELD, THE ADDITIONS MADE IN THE IMPUGNED RE- ASSESSMENT PROCEEDINGS ARE YET TO BE ADJUDICATED, A ND CROSS APPEALS, ON MERITS, HAVE BEEN DISMISSED AS INFRUCTUOUS. MA NO.519/MUM/2009 ASSESSMENT YEAR : 1995-96 PAGE 3 OF 5 7. IT IS IN THIS BACKDROP THAT THE ASSESSEE IS BEFORE US SEEKING RECALL OF TRIBUNALS ORDER DATED 27 TH JULY 2005, SO THAT THE MATTER CAN BE DECIDED ON MERIT. 8. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MA TERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. 9. WE SEE SUBSTANCE IN THE PETITION. A PLAIN LOOK AT THE FACTS SET OUT ABOVE DOES SHOW THAT THE EXAMINATION OF ADDITIONS M ADE IN RE-ASSESSMENT PROCEEDINGS IS NO LONGER AN ACADEMIC ISSUE, AND THE GROUNDS OF APPEAL ON MERITS CANNOT, THEREFORE, BE TREATED AS INFRUCTUOUS . THE DEVELOPMENTS, THOUGH POST THE IMPUGNED ORDER, HAVE MADE IT NECESS ARY THAT APPEAL BE DISPOSED OF ON MERITS. LEARNED DEPARTMENTAL REPRESE NTATIVES SUGGESTION THAT IT IS NOT A FIT CASE FOR EXERCISE OF POWERS U/ S 254(2) SINCE TRIBUNALS ORDER DOES NOT SUFFER FROM ANY MISTAKE, IS NOT ACCE PTABLE. THERE MAY NOT INDEED BY ANY MISTAKE VIS--VIS THE LEGAL POSITION PREVAILING AT THE TIME OF PASSING THE IMPUGNED ORDER, BUT GIVEN THE LEGAL POS ITION NOW AND THE FACTS BEFORE US, NOT DISPOSING OF THE GROUNDS OF APPEAL O N MERITS DOES CONSTITUTE A MISTAKE APPARENT IN RECORD, THOUGH MUCH MORE THAN THAT, A GROSS MISCARRIAGE OF JUSTICE. WE, THEREFORE, ACCEPT THE P LEA OF THE APPLICANT THOUGH, IN ALL FAIRNESS, WITH A RIDER THAT BOTH THE APPEALS I.E., ASSESSEES APPEAL, AS ALSO THE ASSESSING OFFICERS APPEAL, ARE TO BE RECALLED FOR ADJUDICATION ON MERITS. 10. FOR THE REASONS SET OUT ABOVE, WE RECALL THE TRIBUN ALS ORDER DATED 27 TH JULY 2005 FOR DEALING WITH GRIEVANCES ON MERITS AND DIRE CT THE REGISTRY TO FIX THE APPEAL FOR HEARING IN THE FIRST WEEK OF OCTOBER 2010. MA NO.519/MUM/2009 ASSESSMENT YEAR : 1995-96 PAGE 4 OF 5 11. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS ALL OWED. PRONOUNCED IN THE OPEN COURT TODAY ON 23 RD DAY OF JULY, 2010. SD/XX SD/XX (N.V. VASUDEVAN) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; 23 RD DAY OF JULY, 2010. COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX, MUMBAI 4. COMMISSIONER (APPEALS) , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, I BENCH, ITAT, MU MBAI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR PRADEEP J. CHWODHURY INCOME TAX APPELLATE TRIBUNAL SR. PRIVATE SECRETARY MUMBAI BENCHES, M UMBAI MA NO.519/MUM/2009 ASSESSMENT YEAR : 1995-96 PAGE 5 OF 5 DATE INITIAL 1. DRAFT DICTATED ON 19.7.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 19.7.201 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 19.7.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 19.7.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 19.7.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 23.7.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 23.7.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER