M/s. Tube Investments of India Limited, CHENNAI v. ACIT, CHENNAI

CO 117/CHNY/2009 | 1999-2000
Pronouncement Date: 23-09-2011 | Result: Dismissed

Appeal Details

RSA Number 11721723 RSA 2009
Assessee PAN AAACT1249H
Bench Chennai
Appeal Number CO 117/CHNY/2009
Duration Of Justice 2 year(s) 1 month(s) 19 day(s)
Appellant M/s. Tube Investments of India Limited, CHENNAI
Respondent ACIT, CHENNAI
Appeal Type Cross Objection
Pronouncement Date 23-09-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 23-09-2011
Date Of Final Hearing 16-09-2011
Next Hearing Date 16-09-2011
Assessment Year 1999-2000
Appeal Filed On 03-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CHENNAI B E F O R E DR. O.K.NARAYANAN VICE PRESIDENT THIRD MEMBER .. ITA NO.986(MDS)/2009 & C.O.NO.117(MDS)/2009 (ASSESSMENT YEAR: 1999-2000) THE ASSISTANT COMMISSIONER OF INCOME-TAX LARGE TAXPAYER UNIT CHENNAI. VS. M/S.TUBE INVESTMENTS OF INDIA LTD. DARE HOUSE 234-NSC BOSE ROAD CHENNAI-600 001. PAN AAACT1249H. (APPELLANT) ( RESPONDENT/CROSS OBJECTOR) APPELLANT BY : SHRI SHAJI PJACOB SR.DR RESPONDENT BY: SHRI AJAY VOHRA ADVOC ATE. DATE OF HEARING: 3 RD AUGUST 2011 DATE OF ORDER : 10 TH AUGUST 2011 O R D E R PER DR.O.K.NARAYANAN VICE-PRESIDENT: THE FOLLOWING TWO QUESTIONS ARE REFERRED FOR TH E CONSIDERATION OF THE THIRD MEMBER:- 1. WHETHER IN VIEW OF THE FACTS AND CIRCUMSTANCES ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS) IN UPHOLDING THE INITIATION OF REASSESSMENT PROCEEDING S COULD BE UPHELD OR IT CAN BE REVERSED? 2. WHETHER IN VIEW OF THE FACTS AND CIRCUMSTANCES THE ORDER OF LEARNED COMMISSIONER OF INCOME-TAX(APPEALS ) WITH REGARD TO DISALLOWANCE OF EXPENDITURE UNDER SE CTION 14A COULD BE UPHELD OR IT COULD BE SET ASIDE AND TH AT OF THE ASSESSING OFFICER BE RESTORED WITH FURTHER DIRE CTION TO THE ASSESSING OFFICER TO WORK OUT THE QUANTUM AFRES H? 2. REGARDING THE FIRST QUESTION THE LEARNED ACCOU NTANT MEMBER WHO AUTHORED THE ORDER CONSIDERED THE ISSU E IN DETAIL AND HELD THAT THE REASON RECORDED BY THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 148 WAS NOT SUSTAINABLE ON THE FACTS OF THE CASE. 3. THE REASON RECORDED BY THE ASSESSING OFFICER IS REPRODUCED BELOW:- THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 35D OF ` `` ` 36 96 791/-. FOR THE ASSESSMENT YEAR 1998- 99 IN THE ORDER UNDER SECTION 143(3) THE CLAIM UNDE R SECTION 35D WAS RESTRICTED TO ` `` ` 3 43 138/- DUE TO REASSESSMENT OF THE INCOME FOR THE ASSESSMENT YEAR 1995-96 AND THE EXCESS CLAIM OVER THE ABOVE. THIS AMOUNT WAS DISALLOWED ON THE GROUND THAT THE CLAIM UNDER SECTION 35D ON THE BASIS OF NEW PROJECTS COMPLETED IN EACH YEAR WAS NOT ACCEPTABLE. 4. THE LEARNED ACCOUNTANT MEMBER HELD THAT THE ABOVE REASON IS NOT SUSTAINABLE ON THE GROUND THAT THE DISALLOWANCE MADE BY THE ASSESSING AUTHORITY FOR TH E EARLIER ASSESSMENT YEAR WAS DELETED BY THE COMMISSIONER OF INCOME- TAX(APPEALS) ON ACCEPTING THE COMPUTATION OF DEDUCT ION WORKED OUT BY THE ASSESSEE UNDER SECTION 35D. 5. THE ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTION 143(1). THEREFORE RELYING ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. RAJES H JHAVERI STOCK BROKERS P. LTD. 291 ITR 500 THE LEARNED ACC OUNTANT MEMBER HELD THAT THE ONLY CONDITION THAT IS TO BE S ATISFIED TO REOPEN THE ASSESSMENT IS THAT THERE SHOULD BE A REA SON FOR THE ASSESSING OFFICER TO BELIEVE THAT INCOME HAS ESCAPE D ASSESSMENT. THE LEARNED ACCOUNTANT MEMBER HELD THA T THE JUDGMENT OF THE HONBLE SUPREME COURT CITED SUPRA I S APPLICABLE AGAINST THE ASSESSEE. THE LEARNED ACCOUNTANT MEMBER ALSO REFERRED TO THE JUDGMENT OF THE HONBLE SUPREME COU RT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. 320 ITR 5 61 WHEREIN THE SUPREME COURT HAS HELD THAT SO AS TO REOPEN AN ASSE SSMENT THERE MUST EXIST A REASON TO BELIEVE AND THAT REASO N MUST BE RECORDED AND MUST BE COMMUNICATED TO THE ASSESSEE. 6. IN THE PRESENT CASE THE ASSESSING OFFICER HAS RECORDED THE REASON AS ALREADY EXTRACTED ABOVE IN THIS ORDER AND THE REASON HAS BEEN COMMUNICATED TO THE ASSESSE E. TECHNICALLY SPEAKING THE REQUIREMENTS OF LAW PRONO UNCED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. KELVIN ATOR OF INDIA LTD. 320 ITR 561 HAVE BEEN COMPLIED WITH IN THE PR ESENT CASE. 7. BUT THE LEARNED ACCOUNTANT MEMBER WENT ONE STEP AHEAD AND HELD THAT THE VIEW OF THE HONBLE SUPREME COURT EXPRESSED IN THE CASE OF KELVINATOR OF INDIA LTD. R EQUIRES A THEMATIC INTERPRETATION IN RESPECT OF THE WORDS RE ASON TO BELIEVE. PLACING RELIANCE ON THE ABOVE PREMISE THE LEARNED ACCOUNTANT MEMBER HELD THAT THE APPELLATE AUTHORITI ES HAVE ALREADY HELD IN FAVOUR OF THE ASSESSEE ON THE SAME ISSUE AND THOSE APPELLATE DECISIONS WERE AVAILABLE BEFORE THE ASSESSING AUTHORITY AND IN SUCH CIRCUMSTANCES NO REASONABLE M AN COULD FORM AN OPINION THAT INCOME HAS ESCAPED ASSESSMENT BY GIVING AN EXCESSIVE RELIEF UNDER SECTION 35D. THUS BY IMP UTING A THEMATIC INTERPRETATION TO THE WORDS REASON TO BEL IEVE THE LEARNED ACCOUNTANT MEMBER HELD THAT THE REASON POIN TED OUT BY THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT WAS ALREADY CONSIDERED BY THE APPELLATE AUTHORITIES AND HELD IN FAVOUR OF THE ASSESSEE AND THEREFORE THE VERY SAME REASON COULD N OT BE A GROUND TO ASSERT THAT THERE IS A REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. THE VIEW OF THE LEARNED ACCOUN TANT MEMBER IS THAT AS THE VIEW OF THE ASSESSEE HAS BEEN UPHELD BY THE APPELLATE AUTHORITIES THE VIEW OF THE ASSESSIN G OFFICER CANNOT BE DOMINATED AS REASON TO BELIEVE AGAINST THE VIEW OF THE APPELLATE AUTHORITIES. 8. THE LEARNED JUDICIAL MEMBER ON THE OTHER HAND HELD THAT THE ASSESSMENT IN THE PRESENT CASE WAS IN ITIALLY COMPLETED UNDER SECTION 143(1) AND THEREFORE IN VIE W OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F ACIT VS. RAJESH JHAVERI STOCK BROKERS P. LTD. 291 ITR 500 THE ASSESSING OFFICER IS HAVING JURISDICTION TO REOPEN THE ASSESSMENT PROVIDED HE HAS REASON TO BELIEVE THAT INCOME OF TH E ASSESSEE HAS ESCAPED ASSESSMENT. IN THE PRESENT CASE HE HEL D THAT THE REQUIREMENTS OF LAW ARE SATISFIED AND THE REOPENING OF THE ASSESSMENT WAS MADE LAWFULLY AND THE COMMISSIONER O F INCOME-TAX(APPEALS) IS JUSTIFIED IN CONFIRMING THE JURISDICTION OF THE ASSESSING AUTHORITY TO REOPEN THE ASSESSMENT. 9. I HEARD SHRI SHAJI P JACOB THE LEARNED COMMISSIONER OF INCOME-TAX APPEARING FOR THE REVEN UE AND SHRI AJAY VOHRA THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE. I HAVE PERUSED THE FACTS OF THE CASE SUM MARIZED BEFORE ME AND ALSO CONSIDERED THE VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY BOTH THE SIDES. THE LEARNE D COUNSEL APPEARING FOR THE ASSESSEE HAS PLACED BEFORE ME A P APER-BOOK CONTAINING COPIES OF AS MUCH AS 39 DECISIONS RIGHT FROM THE INCOME-TAX APPELLATE TRIBUNAL TO THE HONBLE SUPREM E COURT OF INDIA. ALMOST ALL THESE DECISIONS HAVE BEEN CONSID ERED AND DISCUSSED BY THE HONBLE MEMBERS IN THEIR RESPECTIV E ORDERS. I HAVE CONSIDERED ALL THE RELEVANT JUDGMENTS CITED BY BOTH SIDES BUT NOT QUOTED THEM EXTENSIVELY AS THE DECISIONS HA VE ALREADY BEEN CONSIDERED AND DISCUSSED IN THE ORDERS OF THE HONBLE MEMBERS. 10. NOW COMING TO THE POINT A READING OF THE JUDGMENTS OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. 320 ITR 561 AND IN THE CA SE OF ACIT VS. RAJESH JHAVERI STOCK BROKERS P. LTD. 291 ITR 500 BRINGS HOME THAT THE NECESSARY CONDITIONS TO BE SATISFIED TO RE OPEN AN ASSESSMENT UNDER SECTION 147 AS THE LAW STANDS TOD AY ARE AS FOLLOWS:- 1. IN A CASE WHERE THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(1) THERE CANNOT BE A CA SE OF CHANGE OF OPINION FOR THE REASON THAT THE PROCEEDINGS UNDER SECTION 143(1) IS CONTEMPLATED FO R RAISING A DEMAND OR FOR MAKING A REFUND AND THEREFO RE THE ASSESSING AUTHORITY COULD NOT HAVE FORMED AN OPINION ON ANY OF THE SUBJECT MATTER RELATING TO TH E ASSESSMENT. 2. WHETHER THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(1) OR UNDER SECTION 143(3) THERE SHOULD EXIST A REASON FOR THE ASSESSING OFFICER TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE. 3. THE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IN THE HANDS OF THE ASSESSEE MUST BE RECORDED BY THE ASSESSING AUTHORITY IN WRITING. 4. THE REASON SO RECORDED BY THE ASSESSING AUTHORIT Y SHOULD BE COMMUNICATED TO THE ASSESSEE. 5. IF THE ASSESSEE ON COMMUNICATION OF THE RECORDED REASON OBJECTS TO THE POINTS RAISED BY THE ASSESSI NG AUTHORITY THOSE OBJECTIONS SHOULD BE ATTENDED TO B Y THE ASSESSING AUTHORITY. 6. THE REASON RECORDED BY THE ASSESSING AUTHORITY SHOULD NOT BE A SUBJECTIVE REASON; IT MUST ANSWER T HE TEST OF PRIMA FACIE REASONING. 11. WHEN THE PRESENT CASE IS EXAMINED IN THE LIGHT OF THE ABOVE PROPOSITIONS IT IS TO BE SEEN THAT THE A SSESSMENT WAS INITIALLY COMPLETED UNDER SECTION 143(1) AND THE AS SESSING OFFICER HAS RECORDED THE REASON FOR REOPENING THE A SSESSMENT AND THE SAID REASON WAS COMMUNICATED TO THE ASSESSE E. 12. THE REASON RECORDED BY THE ASSESSING AUTHORITY IS REPRODUCED ELSEWHERE IN THIS ORDER. THE REASON HAS BEEN CLEARLY STATED BY THE ASSESSING AUTHORITY THAT THE QUANTUM OF RELIEF CLAIMED BY THE ASSESSEE UNDER SECTION 35D WA S NOT CORRECT AS CLAIMED AS THE CLAIM OF THE ASSESSEE RE GARDING NEW PROJECTS COMPLETED IN EACH YEAR WAS NOT ACCEPTABLE. ON THE BASIS OF THE ABOVE FACTS THE ASSESSING OFFICER HEL D THAT THE ASSESSEE HAD MADE AN EXCESS CLAIM UNDER SECTION 35D WHICH HAS TO BE REGULARIZED. EVEN IF THE EXPRESSION REA SON TO BELIEVE REQUIRES A THEMATIC INTERPRETATION AS HELD BY THE HONBLE ACCOUNTANT MEMBER THE REASON RECORDED BY THE ASSES SING AUTHORITY FITS INTO THAT VIEW. THE REASON THAT IN APPEAL THE COMMISSIONER OF INCOME-TAX(APPEALS) HAS REVERSED TH E FINDING OF THE ASSESSING OFFICER IN THE MATTER OF COMPUTATI ON OF SECTION 35D CLAIM CANNOT BE A REASON TO TAKE AWAY THE JURI SDICTION OF THE ASSESSING OFFICER. THE DECISION OF THE COMMISS IONER OF INCOME-TAX(APPEALS) ON AN ISSUE NEED NOT BE FINAL. IF THE REVENUE HAS CONSISTENTLY ACCEPTED THE VIEW OF THE COMMISSIONER OF INCOME-TAX(APPEALS) ON A PARTICULAR POINT IT IS POSSIBLE TO HOLD A VIEW RELYING ON THE RULE OF CON SISTENCY THAT THE SAID ISSUE HAS REACHED FINALITY BY THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS). IN THE PRESENT CASE THE OR DER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) ON THE ISSUE WA S CHALLENGED BY THE REVENUE BEFORE THE INCOME-TAX APP ELLATE TRIBUNAL. SOME OF THE ORDERS OF THE TRIBUNAL WERE DELIVERED ONLY AFTER THE REOPENING OF THE IMPUGNED ASSESSMENT EVE N THOUGH DELIVERED IN FAVOUR OF THE ASSESSEE. BUT THIS FUTU RE DEVELOPMENT COULD NOT HAVE BEEN VISUALIZED BY THE ASSESSING AUT HORITY WHILE RECORDING THE REASON FOR REOPENING THE ASSESSMENT. IF THE REASON RECORDED BY THE ASSESSING AUTHORITY IS HELD TO BE NOT SUSTAINABLE FOR THE REASON THAT THE ISSUE WAS DECID ED BY THE COMMISSIONER OF INCOME-TAX(APPEALS) IN FAVOUR OF TH E ASSESSEE IT WOULD PRE-EMPT THE REVENUE FROM FIGHTING THE CAS E BEFORE HIGHER AUTHORITIES INCLUDING COURTS OF LAW. 13. THE THEMATIC INTERPRETATION OF THE WORDS REAS ON TO BELIEVE SHOULD NOT BE UNREASONABLE. JUDICIAL PRON OUNCEMENTS HAVE ALMOST UNANIMITY IN THEIR VIEW THAT THE REASON NEEDS TO BE A PRIMA FACIE REASON TO BELIEVE THAT INCOME HAS ESC APED ASSESSMENT. THE ASSESSING AUTHORITY NEED NOT HAVE A CONCLUSIVE VIEW THAT INCOME HAS ESCAPED ASSESSMENT SO AS TO INITIATE THE REASSESSMENT PROCEEDINGS. THE FINAL V IEW WILL EMERGE ONLY ON CONCLUSION OF THE REASSESSMENT OR A FTER CONSIDERING THE OBJECTIONS RAISED BY THE ASSESSEE. WHAT IS NECESSARY TO REOPEN AN ASSESSMENT IS NOT THE FINAL VERDICT BUT A PRIMA FACIE REASON. IN THE PRESENT CASE THE ASSESS ING AUTHORITY HAS RECORDED A PROPER REASON PRIMA FACIE HOLDING G OOD. ONCE SUCH A REASON IS RECORDED BY THE ASSESSING AUTHORIT Y AND SUBJECT TO OTHER CONDITIONS LAID DOWN IN THE ENABLING PROVI SION THE ASSESSING AUTHORITY ASSUMES JURISDICTION TO ISSUE NOTICE UNDER SECTION 148. THE FACT THAT FOR CERTAIN ASSESSMENT Y EARS THE ISSUE HAS BEEN DECIDED BY THE COMMISSIONER OF INCOME-TAX( APPEALS) IN ASSESSEES FAVOUR CANNOT BE A FETTER TO THE ASSE SSING OFFICER IN EXERCISING HIS JURISDICTION UNDER SECTION 147. 14. THEREFORE IN THE FACTS AND CIRCUMSTANCES OF T HE CASE I HOLD THAT THE ASSESSING AUTHORITY HAS RIGHT LY INVOKED HIS JURISDICTION UNDER SECTION 148 BY ISSUING NOTICE TH EREUNDER AND COMPLETING THE ASSESSMENT UNDER SECTION 147 THEREAF TER. 15. ACCORDINGLY AS FAR AS THE FIRST QUESTION IS CONCERNED I AGREE WITH THE VIEW OF THE LEARNED JUD ICIAL MEMBER. 16. REGARDING THE SECOND QUESTION THE LEARNED ACCOUNTANT MEMBER HELD THAT DISALLOWANCE UNDER SECT ION 14A CANNOT BE MADE AS THE PROVISO GIVEN UNDER SECTION 1 4A PROVIDES THAT AN ASSESSEE CANNOT BE VISITED WITH A LIABILITY UNDER SECTION 14A FOR ANY ASSESSMENT YEAR PRIOR TO THE ASSESSMENT YEAR 2002- 03. IN THE PRESENT CASE THE RELEVANT ASSESSMENT YE AR IS 1999- 2000. THE LEARNED ACCOUNTANT MEMBER HELD THAT THE BAR REFLECTED IN THE PROVISO GIVEN UNDER SECTION 14A CO VERS PASSING OF ANY ORDER ENHANCING THE ASSESSMENT OR REDUCING A REFUND ALREADY MADE. THE LEARNED ACCOUNTANT MEMBER FURTHE R HELD THAT WHETHER THE PROCEEDING UNDER SECTION 147 WAS ONLY F OR FIRST ASSESSMENT OR A REASSESSMENT IS IRRELEVANT. 17. THE LEARNED JUDICIAL MEMBER ON THE OTHER HAND HELD THAT THE ASSESSMENT WAS REOPENED NOT FOR DEALI NG WITH THE QUESTION OF SECTION 14A. THE NOTICE FOR REOPENING WAS ISSUED FOR THE PURPOSE OF DISALLOWING THE EXCESSIVE RELIEF GRA NTED UNDER SECTION 35D. ONCE AN ASSESSMENT IS REOPENED FOR A VALID REASON IT IS OPEN FOR THE ASSESSING AUTHORITY TO D EAL WITH ANY OTHER ISSUE THAT WOULD SURFACE BEFORE HIM IN THE CO URSE OF REASSESSMENT PROCEEDINGS. ACCORDING TO THE LEARNED JUDICIAL MEMBER THE PROVISO GIVEN UNDER SECTION 14A PREVENTS THE ASSESSING OFFICER TO REOPEN AN ASSESSMENT FOR THE P URPOSE OF SECTION 14A ALONE. IF AN ASSESSMENT IS REOPENED JU ST TO MAKE A DISALLOWANCE WITH REFERENCE TO SECTION 14A THEN SU CH REOPENING WILL NOT BE VALID. BUT IF THE ASSESSMENT IS ALREAD Y REOPENED FOR ANOTHER REASON THEN ANY ISSUE COMING TO THE NOTICE OF THE ASSESSING OFFICER IN THE COURSE OF REASSESSMENT PRO CEEDINGS CAN BE CONSIDERED IN ACCORDANCE WITH LAW. IN VIEW OF ABOVE HE HELD THAT THE ASSESSING OFFICER IS JUSTIFIED IN DEA LING WITH THE ISSUE ARISING OUT OF SECTION 14A AS WELL. 18. THE HONBLE DELHI HIGH COURT IN THE CASE OF HO NDA SIEL POWER PRODUCTS LTD. VS. DCIT IN WRIT PETITION (CIVIL) NO.9036 OF 2007 DATED 14 TH FEBRUARY 2011 HAS HELD THAT THE PROVISO TO SECTION 14A ONLY BARS REASSESSMENT/RECTIFICATION AN D NOT ORIGINAL ASSESSMENT ON THE BASIS OF THE RETROSPECTIVE AMENDM ENT. THE COURT HELD THAT THE PROVISO DOES NOT STIPULATE AND STATE THAT SECTION 14A OF THE ACT CANNOT BE RELIED UPON DURING THE COURSE OF THE ORIGINAL ASSESSMENT PROCEEDINGS. THE COURT FUR THER MADE IT CLEAR THAT THE OBJECT AND PURPOSE OF THE PROVISO IS TO ENSURE THAT THE RETROSPECTIVE AMENDMENT IS NOT MADE AS A TOOL T O REOPEN PAST CASES WHICH HAVE ATTAINED FINALITY. THIS ORDE R OF THE HONBLE DELHI HIGH COURT HAS BEEN CONFIRMED BY THE HONBLE SUPREME COURT BY DISMISSING THE SPECIAL LEAVE PETITION FILE D BY THE ASSESSEE THROUGH THE ORDER OF THEIR LORDSHIPS DATED 29-7-2011 IN SLP(CIVIL) NO.19085/2011. 19. IN VIEW OF THE ABOVE LAW I AM NOT IN A POSITI ON TO ACCEPT THE VIEW OF THE LEARNED ACCOUNTANT MEMBER TH AT FOR THE PURPOSE OF THE PROVISO TO SECTION 14A WHETHER THE P ROCEEDING UNDER SECTION 147 WAS ONLY FOR THE FIRST ASSESSMENT OR FOR A REASSESSMENT BECOMES IRRELEVANT. IN OTHER WORDS T HE LEARNED ACCOUNTANT MEMBER HAS ACCEPTED THE CONTENTION OF TH E ASSESSEE THAT THE BAR STATED IN THE PROVISO TO SECT ION 14A IS INFLEXIBLE TO ANY CIRCUMSTANCE AND IS A TOTAL BAN O N THE ASSESSING OFFICER TO CONSIDER SECTION 14A ISSUE FOR ANY ASSESSMENT YEAR PRIOR TO 2002-03. AS STATED ABOVE THE HONBLE SUPREME COURT HAS UPHELD THE VIEW OF THE HONBLE DE LHI HIGH COURT THAT THE BAR STATED IN THE PROVISO TO SECTION 14A DOES NOT OPERATE IN A CASE OF FIRST ASSESSMENT. 20. IN THE PRESENT CASE THE INITIAL PROCEEDING WAS COMPLETED UNDER SECTION 143(1). AN ORDER UNDER SEC TION 143(1) IS PASSED ONLY FOR THE PURPOSE OF RAISING A DEMAND OR FOR MAKING A REFUND. THEREFORE IT IS TO BE SEEN THAT IN THE PRESENT CASE NOTICE UNDER SECTION 148 WAS ISSUED TO MAKE AN ASSE SSMENT AT THE FIRST INSTANCE. ACCORDINGLY THE ASSESSING OFFI CER IS JUSTIFIED IN DEALING WITH THE ISSUE ARISING UNDER SECTION 14A AS WELL. THEREFORE AS FAR AS THE SECOND QUESTION IS CONCERN ED I AGREE WITH THE LEARNED JUDICIAL MEMBER TO HOLD THAT THE O RDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) ON THIS POINT I S TO BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED WITH FURTHER DIRECTION TO THE ASSESSING OFFICER TO WORK OUT THE QUANTUM AFRESH. 21. IN SHORT I HAVE TO STATE THAT ON BOTH QUESTIO NS REFERRED TO ME I AGREE WITH THE VIEWS EXPRESSED BY THE LEARNED JUDICIAL MEMBER. 22. NOW THESE FILES WILL BE PLACED BEFORE THE REG ULAR BENCH FOR PASSING ORDERS TO FINALLY DISPOSE OF THE CASE ON A MAJORITY VIEW. CHENNAI DATED THE 10 TH AUGUST 2011. SD/- V.A.P. (DR. O.K.NARAYANAN) VICE-PRESID ENT THIRD MEMBER IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CHENNAI BEFORE SHRI HARI OM MARATHA JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER I.T.A. NO. 986/MDS/2009 C.O. NO. 117/MDS/2009 (ASSESSMENT YEAR : 1999-2000) THE ASSISTANT COMMISSIONER OF INCOME TAX LARGE TAXPAYER UNIT CHENNAI 600 101. (APPELLANT) V. M/S TUBE INVESTMENTS OF INDIA LTD. DARE HOUSE 234 NSC BOSE ROAD CHENNAI 600 001. PAN : AAACT1249H (RESPONDENT / CROSS OBJECTOR) APPELLANT BY : SHRI SHAJI P. JACOB SR. DR RESPONDENT BY : SHRI . S UPRATA GM-TAXATION OF ASSESSEE-COMPANY DATE OF HEARING : 16.09.2011 DATE OF PRONOUNCEMENT : 23.09.2011 ORDER GIVING EFFECT PER ABRAHAM P. GEORGE ACCOUNTANT MEMBER : ON A DIFFERENCE OF OPINION BETWEEN MEMBERS CONSTI TUTING THE REGULAR BENCH FOLLOWING TWO QUESTIONS WERE REFERRE D FOR CONSIDERATION OF THIRD MEMBER :- 1. WHETHER IN VIEW OF THE FACTS AND CIRCUMSTANCES ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN UPHOLDING THE INITIATION OF REASSESSME NT PROCEEDINGS COULD BE UPHELD OR IT CAN BE REVERSED? 2. WHETHER IN VIEW OF THE FACTS AND CIRCUMSTANCES THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WITH REGARD TO DISALLOWANCE OF EXPENDITUR E UNDER SECTION 14A COULD BE UPHELD OR IT COULD BE SE T ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED WITH FURTHER DIRECTION TO THE ASSESSING OFFICER TO WORK OUT THE QUANTUM AFRESH? 2. HON'BLE VICE PRESIDENT SITTING AS THIRD MEMBER HAS AGREED WITH THE VIEW OF THE HON'BLE JUDICIAL MEMBER ON BOT H THE ISSUES. 3. IN THE RESULT APPEAL OF THE REVENUE AND C.O. OF THE ASSESSEE ARE DISPOSED OF AS UNDER :- (A) GROUND NOS.1 AND 6 RAISED IN THE APPEAL OF THE REVENUE BEING GENERAL IN NATURE NEEDING NO ADJUDIC ATION ARE DISMISSED. (B) GROUND NO.2 RAISED BY THE REVENUE STANDS DISM ISSED. (C) ON GROUND NO.3 ORDER OF THE LD. CIT(APPEALS) I S SET ASIDE AND REMITTED TO THE ASSESSING OFFICER WITH D IRECTION TO WORK OUT THE QUANTUM OF DISALLOWANCE UNDER SECTI ON 14A OF INCOME-TAX ACT 1961 (IN SHORT THE ACT) AFTER OBTAINING NECESSARY DETAILS FROM THE ASSESSEE CONSIDERING TH E MATERIAL ON RECORD AND IN THE LIGHT OF LATEST DECIS ION ON THIS POINT INCLUDING THAT OF GODREJ & BOYCE MFG. CO. LTD . V. DCIT (2010) 234 CTR (BOM) 1. (D) GROUND NO.4 RAISED BY THE REVENUE STANDS DISMISSED. (E) GROUND NO.5 ALSO STANDS DISMISSED. (F) IN VIEW OF THE MAJORITY OPINION THE CROSS-OBJE CTIONS FILED BY THE ASSESSEE STANDS DISMISSED. 4. TO SUMMARISE THE RESULT THE APPEAL OF THE REVEN UE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES WHEREAS THE CROS S-OBJECTIONS OF THE ASSESSEE IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 23 RD SEPTEMBER 2011. SD/- SD/- (HARI OM MARATHA) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 23 RD SEPTEMBER 2011. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A) LTU CHENNAI/ CIT-LTU CHENNAI/D.R./GUARD FILE