M/s. PROGRESSIVE STEEL PROCESSORS P. LTD., MUMBAI v. ITO - 10(3)-2, MUMBAI

ITA 1289/MUM/2008 | 2005-2006
Pronouncement Date: 13-04-2010 | Result: Allowed

Appeal Details

RSA Number 128919914 RSA 2008
Assessee PAN AABCP6626M
Bench Mumbai
Appeal Number ITA 1289/MUM/2008
Duration Of Justice 2 year(s) 1 month(s) 22 day(s)
Appellant M/s. PROGRESSIVE STEEL PROCESSORS P. LTD., MUMBAI
Respondent ITO - 10(3)-2, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 13-04-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted K
Tribunal Order Date 13-04-2010
Date Of Final Hearing 07-04-2010
Next Hearing Date 07-04-2010
Assessment Year 2005-2006
Appeal Filed On 21-02-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH K MUMBAI BEFORE SHRI SHRI A.L. GEHLOT A.M. & SMT. ASHA VIJ AYRAGHAVAN J.M. ITA NO. 1289/M/2008 ASSESSMENT YEAR: 2005-06 M/S PROGRESSIVE STEEL PROCESSORS PVT. LTD. APPE LLANT 234/235 2 ND FLOOR HINDUSTAN KOHINOOR COMPLEX LBS MARG VIKHROLI (WEST) MUMBAI 400 083 (PAN AABCP6626M) VS. INCOME TAX OFFICER RESPONDENT 10(3)(2) 4 TH FLOOR ICAR BHAVAN MUMBAI. APPELLANT BY : MR. M. SUBRAMANIAN RESPONDENT BY : M/MR. T.T. JACOB/AMOL KAMAT/ S.S. RANA ORDER PER A.L. GEHLOT A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-X MUMBAI PASSED ON 12.12.2007 FOR THE ASSE SSMENT YEAR 2005- 06 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GR OUND OF APPEAL:- THE LEARNED CIT(A) HAS GROSSLY ERRED IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE IN CONFIRMING THE DISALLO WANCE MADE U/S 40A(3) OF THE INCOME TAX ACT 1961 OF RS. 6 59 672/ -. 2. THE ASSESSEE HAS ALSO RAISED THE FOLLOWING ADDIT IONAL GROUNDS WHICH READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E & IN LAW THE PROCEEDINGS INITIATED BY ISSUANCE OF NOTICE U/S 148 OF THE IT ACT IS INVALID AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E & IN LAW THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S 147 OF THE ACT IS INVALID AND BAD IN LAW. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE REFERENCE MADE TO THE VALUATION OFFICER U/S 55A OF THE ACT IS INVALID AND BAD IN LAW. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE AO ERRED IN ADOPTING THE VALUE OF SALE CONSIDERATIO N AS ON THE DATE OF SALE AT RS. 4 58 23 900/- AS AGAINST THE ACTUAL SALE CONSIDERATION OF RS. 4 50 00 000/-. ITA NO. 1289/M/08 M/S PROGRESSIVE STEEL PROCESSORS PVT. LTD. 2 5. WITHOUT PREJUDICE TO THE GROUND NO. 3 ABOVE AND ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE AO ERRED IN ADOPTING THE INDEXED COST OF ACQUISITION AS ON 01.0 4.1981 AT RS. 2 91 88 320/- AS AGAINST THE RETURNED INDEXED COST OF ACQUISITION AS ON 01.04.1981 OF RS. 7 64 68 800/- AND THE LEARNED CIT ERRED IN CONFIRMING THE SAME. 6. WITHOUT PREJUDICE TO THE GROUND NO. 3 ABOVE AND ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW TH E AO ERRED IN COMPUTING THE CAPITAL GAINS INCOME AT RS. 1 25 17 5 80/- AS AGAINST THE RETURNED CAPITAL GAINS INCOME OF (-) RS. 3 55 8 6 800/- AND THE LEARNED CIT ERRED CONFIRMING THE SAME. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E & IN LAW THE INTEREST CHARGED U/S 234A & 234B OF THE IT ACT ARE INVALID AND BAD IN LAW. 3. AFTER HEARING THE LEARNED REPRESENTATIVES OF THE PARTIES THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE ARE ADMIT TED IN THE INTEREST OF JUSTICE. 4. AT THE OUTSET WHILE ARGUING THE LEGAL ISSUE OF REOPENING OF ASSESSMENT THE LEARNED AR SUBMITTED THAT REOPENING IS NOT IN ACCORDANCE WITH LAW. THE LEARNED AR SUBMITTED THAT NOTICE U/S 148 WAS ISSUED ON 19 TH JANUARY 2006 WHERE AS THE REQUIREMENT OF LAW IN ACCORDANCE WITH SECTION 149 IS THAT NO NOTICE U/S 1 48 SHALL BE ISSUED FOR THE RELEVANT ASSESSMENT YEAR A) IF 4 YEARS HAVE EL APSED FROM THE END OF THE RELEVANT AY AND B) IF 4 YEARS BUT NOT MORE THA T 6 YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT AY. THE LEARNED AR SUB MITTED THAT THE ISSUE IS DIRECTLY COVERED BY THE DECISION OF ITAT SPECIAL BENCH IN THE CASE OF MOTOROLA INC. V. DCIT [2005] 95 ITD 269 (DELHI)(SB ). 5. THE LEARNED DR ON THE OTHER HAND RELIED UPON T HE ORDERS OF REVENUE AUTHORITIES AND SUBMITTED THAT THE ASSESSEE RAISED LEGAL ISSUE FOR THE FIRST TIME AND THE SAME HAS NOT BEEN RAISED BEFORE THE REVENUE AUTHORITIES AND THEREFORE THE MATTER MAY BE SENT BACK TO THE FILE OF CIT(A). 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD. THE ADMITTED FACTS OF THE CASE ARE THAT NOTICE U/S 148 HAS BEEN ISSUED ON 19TH JANUARY 2006 AND THE R ELEVANT ASSESSMENT YEAR IS ENDED ON 31ST MARCH 2006. IN OTHER WORDS THE NOTICE U/S 148 ITA NO. 1289/M/08 M/S PROGRESSIVE STEEL PROCESSORS PVT. LTD. 3 HAS BEEN ISSUED BEFORE THE END OF RELEVANT ASSESSME NT YEAR. THE CASE OF THE ASSESSEE IS THAT IN ANY EVENT THE NOTICE DATED 19TH JANUARY 2006 ISSUED UNDER SECTION 148 OF THE ACT WAS NOT IN ACCO RDANCE WITH LAW. THE QUESTION TO BE EXAMINED IN THIS CASE IS WHAT SHOULD BE THE STARTING POINT OF TIME OF ISSUE OF NOTICE UNDER SECTION 148. TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 148 HAS BEEN PRESCRIBED IN SEC TION 149. SECTION 149 READS UNDER:- 149. [(1) NO NOTICE UNDER SECTION 148 SHALL BE ISSU ED FOR THE RELEVANT ASSESSMENT YEAR [(A) IF FOUR YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE CASE FALLS UNDER CLAUSE (B); (B) IF FOUR YEARS BUT NOT MORE THAN SIX YEARS HAV E ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOU NTS TO OR IS LIKELY TO AMOUNT TO ONE LAKH RUPEES OR MORE72 FOR T HAT YEAR.] 6.1 THE PERIOD OF FOUR YEARS OR SIX YEARS FOR WHICH SECTION 149(1) PROVIDED WAS COMPUTED FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR FROM THE END OF ACCOUNTING YEAR. THE PERIOD OF LIMI TATION WHETHER IT IS FOUR YEARS FOR CASES FALLING UNDER SECTION 149(1)(A ) OR SIX YEARS FALLING UNDER SECTION 149(1)(A) HAS TO BE COMPUTED FROM TH E END OF THAT RELEVANT ASSESSMENT YEAR. IT IS CLEAR FROM THE CONTEXT TO TH E SECTION ITSELF THAT THE YEAR REFERRED TO IS THE ASSESSMENT YEAR AND HAS NO REFERENCE TO THE ACCOUNTING YEAR WHICH IS ELSEWHERE SPECIFIED BY TH E ACT ITSELF AS THE PREVIOUS YEAR. THERE CAN BE AN ESCAPE FROM ASSESSME NT ONLY WHEN THERE IS AN ASSESSMENT. WHATEVER BE THE YEAR OF ACCOUNT WHICH IS THE PREVIOUS YEAR AS SPECIFIED BY THE ACT THE ASSESSMENT CAN ON LY BE IN WHAT IS NORMALLY REFERRED TO AS THE ASSESSMENT YEAR AND WH ICH HAS BEEN DESIGNATED YEAR IN THE INCOME-TAX ACT. IN THE CASE UNDER CONSIDERATION THE ASSESSMENT YEAR ENDED ON 31ST MARCH 2006 IN O UR OPINION IT SHOULD BE THE ACTION TAKEN AFTER 31ST MARCH 2006 TO ISSU E NOTICE UNDER SECTION 148 WHERE AS THE AO ISSUED NOTICE UNDER SECTION 148 ON 19THE JANUARY 2006 BEFORE THE END OF RELEVANT ASSESSMENT YEAR. IT SHOULD BE SUFFICIENT TO SAY THAT WE ARE UNABLE TO FIND ANY BASIS IN THE LANGUAGE OF SECTION 149 TAKING THE SCHEME OF ASSESSMENT IN THE INCOME-TAX A CT AS A WHOLE ALSO INTO ACCOUNT TO SUSTAIN A PLEA THAT THE PERIOD OF LIMITATION SHOULD BE COMPUTED FROM THE END OF THE ACCOUNTING YEAR OF THE ASSESSEE. THE ITAT DELHI SPECIAL BENCH IN THE CASE OF MOTOROLA INC. V. DCIT [2005] 95 ITD 269 (DELHI)(SB) HELD THAT THE SECTION 149 IS CLEARL Y PROVIDED THAT THE ITA NO. 1289/M/08 M/S PROGRESSIVE STEEL PROCESSORS PVT. LTD. 4 STARTING POINT FOR ISSUE OF NOTICE UNDER SECTION 14 8 RELATING TO ESCAPEMENT OF INCOME IS TO BE COUNTED FROM THE END OF THE RELEVANT ASSESSMENT YEAR. IT WOULD ONLY BE LOGICAL TO INFER THAT INCOME ESCAPES ASSESSMENT AT THE END OF THE ASSESSMENT YEAR AND TH EREFORE THE PERIOD OF LIMITATION TO ISSUE NOTICE UNDER SECTION 148 IS TO BE TAKEN FROM THE POINT OF TIME. 6.2 IN THE LIGHT OF ABOVE DECISION WE ARE OF T HE VIEW THAT NOTICE ISSUED BY THE AO U/S 148 ON 19.1.2006 FOR AY 2005- 06 BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR WHICH IS ENDING ON 3 1.3.2006 IS NOT IN ACCORDANCE WITH LAW. THE SECTION 149 CLEARLY PROVID ED THAT NO NOTICE UNDER SECTION 148 SHALL BE ISSUED FOR THE RELEVANT ASSESSMENT YEAR IF FOUR YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASS ESSMENT YEAR UNLESS THE CASE FALLS UNDER CLAUSE (B); THE CLAUSE (B) PRO VIDES THAT IF FOUR YEARS BUT NOT MORE THAN SIX YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR. AS IN THE INSTANT CASE THE NOTICE ISSUED UNDER SECTION148 IS NOT IN ACCORDANCE WITH LAW SECTION 1 49 THEREFORE THE ASSESSMENT ORDER ITSELF IS LIABLE TO BE QUASHED. T HE FACTS OF THE CASE ARE VERY CLEAR AND ARE ON RECORD; THEREFORE WE DO NOT F IND ANY SUBSTANCE IN THE SUBMISSION OF THE LEARNED DR FOR SENDING THE MA TTER BACK TO THE FILE OF CIT (A). SINCE WE QUASH THE ORDER OF AO ON THE LEGAL ISSUE WE DO NOT FIND NECESSARY TO DECIDE THE GROUNDS RAISED BY THE ASSESSEE ON MERIT. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED AS INDICATED ABOVE. PRONOUNCED ON THIS 13 TH DAY OF APRIL 2010. SD/- SD/- (ASHA VIJAYRAGHAVAN) (A.L. GEHL OT) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: 13 TH APRIL 2010. ITA NO. 1289/M/08 M/S PROGRESSIVE STEEL PROCESSORS PVT. LTD. 5 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE K BENCH I.T .A.T. MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR I.T.A.T. MUMBAI. KV S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON 7.4.10 SR.P.S./P. S 2. DRAFT PLACED BEFORE AUTHOR 8`.4.10 SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P. S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P. S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER