B.Malathi, CHENNAI v. ITO Non Corporate Ward 9(2), CHENNAI

ITA 2097/CHNY/2017 | 2007-2008
Pronouncement Date: 13-11-2017 | Result: Allowed

Appeal Details

RSA Number 209721714 RSA 2017
Assessee PAN AAJPM4778Q
Bench Chennai
Appeal Number ITA 2097/CHNY/2017
Duration Of Justice 2 month(s) 15 day(s)
Appellant B.Malathi, CHENNAI
Respondent ITO Non Corporate Ward 9(2), CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 13-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted A
Tribunal Order Date 13-11-2017
Last Hearing Date 13-11-2017
First Hearing Date 13-11-2017
Assessment Year 2007-2008
Appeal Filed On 29-08-2017
Judgment Text
A/ SMC IN THE INCOME TAX APPELLATE TRIBUNAL A/SMC BENCH CHENNAI . BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER I.T.A.NO.2097 /MDS./2017 ( ASSESSMENT YEAR : 2007-08 ) MS.B.MALATHI NO.1/11 GOVINDAM STREET GANESH APARTMENTS II FLOOR CHOOLAI CHENNAI 600 112. VS. THE INCOME TAX OFFICER NON CORPORATE WARD 9(2) CHENNAI. PAN AAJPM 4778 Q ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MR.S.SRIDHAR ADVOCATE / RESPONDENT BY : MR.N.MADHAVAN ACIT D.R ! ' / DATE OF HEARING : 13.11.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 13.11.2017 / O R D E R PER CHANDRA POOJARI ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-10 CHENN AI DATED 19.05.2017 PERTAINING TO ASSESSMENT YEAR 2007-08. ITA NO. 2097/MDS/2017 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS F OR CONSIDERATION. 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS) 10 CHENNAI DATED 19.05.2017 IN I.T.A.NO.17/2015-16/CIT(A)-10 F OR THE ABOVE MENTIONED ASSESSMENT YEAR IS CONTRARY TO LAW FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE CIT (APPEALS) ERRED IN CONFIRMING THE ORDER OF RE-ASSESSMENT FOR THE REASONS GIVEN FROM PARA 4.3 TO PARA 4.3.3 OF THE IM PUGNED ORDER WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 3. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE ORDER OF RE-ASSESSMENT UNDER CONSIDERATION WAS PASSED OUT OF TIME INVALID PASSED WITHOUT JURISDICTION AND NOT SUSTAINABLE BOTH ON FACTS AND IN LAW. 4. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE LACK OF PROPER SERVICE OF THE REOPENING NOTICE WOULD VITIATE THE CONSEQUENTIA L RE-ASSESSMENT UNDER CONSIDERATION AND FURTHER OUGHT TO HAVE APPRE CIATED THAT THE CONDITIONS PRESCRIBED FOR THE VALID ASSUMPTION OF J URISDICTION U/S 147 OF THE ACT WERE NOT COMPLIED WITH ON THE FACTUAL MATRI X OF THE CASE. 5. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 292BB OF THE ACT HAD NO APPLICATION TO THE FACTS OF THE CASE AND OUGHT TO HAVE APPRECIATED THAT THE IMPROPER SERVICE OF NOTIC E WHICH WAS VEHEMENTLY OBJECTED AT EVERY STAGE WOULD BE FATAL T O THE CONSEQUENTIAL RE-ASSESSMENT THEREBY VITIATING THE PRESUMPTION OF APPLICABILITY OF SECTION 292BB OF THE ACT. 6. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THE REOPENING OF THE ASSESSMENT PROCEEDINGS IN ANY EVENT WAS BAD IN LAW IN VIEW OF LACK OF TANGIBLE MATERIALS CHANGE OF OPINION AND FURTHER O UGHT TO HAVE APPRECIATED THAT THE PRINCIPLES LAID DOWN BY THE AP EX COURT IN THE CASE ITA NO. 2097/MDS/2017 3 REPORTED IN 259 ITR 19 WERE NOT FOLLOWED THEREBY V ITIATING THE CONSEQUENTIAL REASSESSMENT. 7. THE CIT (APPEALS) ERRED IN SUSTAINING THE DISALL OWANCE OF CLAIM OF TAX EXEMPTION U/S 10(38) OF THE ACT WITHOUT ASSIGNING P ROPER REASONS AND JUSTIFICATION AND WENT WRONG IN RECORDING THE FINDI NGS IN THIS REGARD IN PARA 5.3.1 OF THE IMPUGNED ORDER WITHOUT ASSIGNING PROPE R REASONS AND JUSTIFICATION. 8. THE CIT (APPEALS) FAILED TO APPRECIATE THAT THER E WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING OF THE IMPUGNED OR DER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES NATURAL JUSTI CE WOULD BE NULLITY IN LAW. 2.1 THERE WAS A DELAY OF 03 DAYS IN FILING THIS APP EAL BY THE ASSESSEE. THE ASSESSEE HAS FILED A PETITION FOR CO NDONATION OF DELAY. THE LD.A.R SUBMITTED THAT THE ASSESSEE SIGNED THE A PPEAL PAPERS ON 23.08.2017 WHICH WAS FORWARDED TO OFFICE OF AUTHOR ISED REPRESENTATIVE OF ASSESSEE. FURTHER THE LD.A.R SUB MITTED BEFORE US THAT THE FILING OF APPEAL BELATEDLY BY 3 DAYS BEFOR E THE TRIBUNAL WAS THE MISTAKE COMMITTED BY HIS OFFICE AND PRAYED TO C ONDONE THE DELAY IN FILING THE APPEAL. I HAVE HEARD THE LD. REPRESE NTATIVE AND THE LD. DR. I FIND THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL WITHIN THE STIPULATED TIME. THEREFORE I CONDONE T HE DELAY AND ADMIT THE APPEAL. ITA NO. 2097/MDS/2017 4 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE FILED HER RETURN OF INCOME FOR ASSESSMENT YEAR 2007-08 ON 20.03.2009 ADMITTING A TOTAL INCOME OF ` 1 07 705/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT 1961. SUBSEQUENTLY THE ASSESSME NT WAS REOPENED U/S 147 OF THE INCOME TAX ACT 1961 FOR TH E AY 2007-08 BY ISSUE OF NOTICE U/S 148 DATED 31-01-2014 AND SERVE D ON THE ASSESSEE ON 05-02-2014. 3.1 THE ISSUE IN DISPUTE IS WITH REGARD TO THE ASS ESSEE DURING THE YEAR ENDED 31-03-2007 RELEVANT TO ASST.YEAR 2007-0 8 SOLD SHARES OF ZEN SHAVING LIMITED AND DERIVED LONG-TERM CAPITAL G AIN. SHE ADMITTED IN HER RETURN THIS INCOME AND CLAIMED EXEM PTION U/S 10(38) OF THE ACT. THE RETURN WAS PROCESSED AND ACCEPTED B Y THE OFFICER. THE SAME WAS REOPENED U/S 147 OF THE ACT FOR TREATI NG THIS LONG-TERM CAPITAL GAIN AS TAXABLE INCOME AS IN THE OPINION O F THE OFFICER THE SHARES SOLD WERE NOT LISTED AS ON THE DATE OF SALE. FOR THE PURPOSE OF REOPENING THE OFFICER ISSUED NOTICE U/S 148 OF THE ACT ON 05-02-2014 BUT THE YEAR MENTIONED IN THE NOTICE WAS 2006-07 IN STEAD OF 2007-08. ITA NO. 2097/MDS/2017 5 THE MAIN OBJECTION IS THAT THERE WAS NO NOTICE ISSU ED U/S 148 FOR THE RELEVANT AY 2007-08. FOR THIS OBJECTION THE AO HAS CLARIFIED THAT THERE WAS A SEPARATE NOTICE U/S 148 FOR AY 2006-07 ISSUED ON 20- 03-2013. THERE WAS ONE MORE NOTICE U/S 148 DATED 20 -03-2013 ISSUED FOR THE RELEVANT AY 2007-08 BUT IT WAS INADV ERTENTLY MENTIONED AS AY 2006-07. IN VIEW OF THIS CLARIFICATION THE A RS OBJECTION ON THIS POINT IS REJECTED BY LD. ASSESSING OFFICER. 3.2 IN RESPONSE TO ISSUANCE OF NOTICE U/S.148 OF T HE ACT DATED 31.01.2014 WHICH WAS SERVED ON ASSESSEE 05.02.2014 REQUIRING THE ASSESSEE TO PRODUCE INTER ALIA DETAILS OF BANK AC COUNTS P&L A/C BALANCE SHEET DEMAT ACCOUNT COPY DETAILS OF INVES TMENTS MADE DURING THE YEAR THE ASSESSEE FILED A LETTER ON 16. 10.2014 STATING THAT THE ASSESSEE WAS NOT SERVED WITH A NOTICE U/S.148 D T.31.01.2014 FOR ASSESSMENT YEAR 2006-07 AND SHE WAS NOT FILING THE DETAILS CALLED FOR. FURTHER THE ASSESSEE SUBMITTED THAT THE ISSUANCE O F NOTICE U/S.148 WAS NOT SERVED BEFORE THE PRESCRIBED DATE OF RE-OPE NING OF ASSESSMENT AND THE SAME WAS BARRED WITH LIMITATION . ITA NO. 2097/MDS/2017 6 3.3 THE LD. ASSESSING OFFICER OBSERVED THAT THE AS SESSMENT FOR ASSESSMENT YEAR 2006-07 WAS ALREADY REOPENED BY ISS UING OF NOTICE U/S.148 OF THE ACT ON 20.03.2013 AND THE NOTICE ISS UED U/S.148 ON 31.01.2014 WAS RELATED TO ASSESSMENT YEAR 2007-08 A ND IT WAS AN INADVERTENT ERROR MENTIONING THE ASSESSMENT YEAR 20 06-07 INSTEAD OF 2007-08. FURTHER IT WAS OBSERVED THAT THE ASSESSE ES HUSBAND SHRI BIPIN L. DHAMECHA HAD RECEIVED THE NOTICE ON 05.02. 2014 ACROSS THE TABLE OF THE AO ON 05.02.2014 AND HE HAD NOT PUT AN Y OBJECTION FOR THE NOTICE HENCE IT HAS TO BE CONSIDERED AS IT WAS ACCEPTED BY THE ASSESSEE AND THEREFORE LD. ASSESSING OFFICER REJE CTED THE OBJECTION OF THE ASSESSEE AND ALSO HAD TAKEN SHELTER AT SEC. 292BB OF THE ACT AND COMPLETED RE-ASSESSMENT . THE ASSESSEE INTER A LIA CHALLENGED THE RE-OPENING OF ASSESSMENT. 3.4 THE AO WHILE FRAMING THE ASSESSMENT CONSIDE RED THE LONG TERM CAPITAL GAINS ON SALE OF SHARES TO THE TUNE OF ` 3 70 229/- IS TAXABLE AS THE SHARES SOLD WERE NOT LISTED AS ON TH E DATE OF SALE. ACCORDING TO HIM THESE SHARES ARE NOT ELIGIBLE FOR EXEMPTION ITA NO. 2097/MDS/2017 7 U/S.10(38) OF THE ACT. AGGRIEVED BY THE ORDER OF L D. ASSESSING OFFICER THE ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A ). 4. BEFORE LD.CIT(A) LD.A.R TOOK A PLEA THAT IMPUG NED NOTICE ISSUED U/S.148 OF THE ACT IS BAD IN LAW AS IT DOES NOT CONTAIN CORRECT ASSESSMENT YEAR. ACCORDING TO HIM THE ASSESSMENT YEAR MENTIONED THEREIN AS 2006-07 INSTEAD OF 2007-08. ACCORDING T O HIM PROVISIONS OF THE SECTION 292BB OF THE ACT CANNOT GIVE ANY AS SISTANCE TO THE LD. ASSESSING OFFICER AND THAT WAS COME TO STATUTE ONLY WITH EFFECT FROM 01.04.2008 AND NOT APPLICABLE TO THE PROCEEDINGS FO R ASSESSMENT YEAR 2007-08. FOR THIS PURPOSE HE RELIED ON THE JU DGEMENT OF ALLAHABAD HIGH COURT IN THE CASE OF ACIT VS. GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY IN [2015] 379 ITR 14 (ALL) AN D ALSO THE JUDGEMENT OF BOMBAY HIGH COURT IN THE CASE OF CIT V S. ABACUS DISTRIBUTION SYSTEMS (INDIA) PVT. LTD. IN ITA NO.1 382 OF 2014 DATED 07.02.2017. 5. ON THE OTHER HAND LD.D.R RELIED ON THE ORDER O F LD.CIT(A). ITA NO. 2097/MDS/2017 8 6. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIAL ON RECORD. THE ISSUANCE NOTICE U/S.148 OF THE ACT REF ERS TO A PARTICULAR ASSESSMENT YEAR WHICH IS NOT RELATED TO ASSESSMENT YEAR IN WHICH THE ASSESSEE FILED HER RETURN SO THE AO HAVE NO JU RISDICTION TO COMPLETE THE ASSESSMENT OTHER THAN THE SAID ASSESSM ENT YEAR MENTIONED IN THE NOTICE U/S.148 OF THE ACT. IN THE PRESENT CASE ADMITTEDLY THE NOTICE ISSUED BY THE AO WAS FOR THE ASSESSMENT YEAR 2006-07 INSTEAD OF 2007-08. THIS WAS DULY BROUGHT T O THE NOTICE OF THE AO. THE AO WAS OF THE OPINION THAT SINCE ASSESS EES HUSBAND RECEIVED THE NOTICE AND HE HAS NOT PUT ANY OBJECTIO N IT DEEMED AS A VALID NOTICE. IN MY OPINION THIS VIEW OF THE AO IS HAVING NO MERITS AS HELD BY THE SUPREME COURT IN THE CASE OF KURBAN HUS SAIN IBRAHIMJI MITHIBORWALA IN [1971] 82 ITR 821 (SC) THAT NOTICE U/S.148 SHOULD MENTION THE CORRECT ASSESSMENT YEAR. A NOTICE ISSUE D FOR ONE ASSESSMENT YEAR CANNOT BE CONSIDERED AS A NOTICE FO R OTHER ASSESSMENT YEARS. IN SUCH CIRCUMSTANCES THE AO HAS NO JURISDICTION TO RE-OPEN THE ASSESSMENT FOR ASSESSMENT YEAR 2007 -08. BEING SO I DO NOT FIND ANY MERIT IN THE ARGUMENT OF THE LD.D .R. FURTHER I MAKE IT CLEAR THAT PROVISIONS OF THE SECTION 292BB CAME INTO EFFECT ITA NO. 2097/MDS/2017 9 FROM 01.04.2008 AND IT WAS NOT APPLICABLE TO THE AS SESSMENT YEAR 2007-08 AS HELD BY THE ALLAHABAD HIGH COURT IN THE CASE OF ACIT VS. GREATER NOIDA IND. DEVELOPMENT AUTHORITY (SUPRA). A CCORDINGLY I QUASH THE ASSESSMENT FOR ASSESSMENT YEAR 2007-08 AN D ALLOW THE APPEAL OF ASSESSEE. 7. SINCE I HAVE QUASHED THE ASSESSMENT FOR ASSES SMENT YEAR 2007-08 I REFRAIN FROM GOING INTO OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 8. IN THE RESULT THE APPEAL OF ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 13 TH NOVEMBER 2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI DATED THE 13 TH NOVEMBER 2017 . K S SUNDARAM. ' ( )!*+ +%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF