M/s. Spectris Technologies (P) Ltd., New Delhi v. ACIT, New Delhi

ITA 3399/DEL/2010 | 2004-2005
Pronouncement Date: 22-07-2011 | Result: Allowed

Appeal Details

RSA Number 339920114 RSA 2010
Assessee PAN AAGCS6654R
Bench Delhi
Appeal Number ITA 3399/DEL/2010
Duration Of Justice 1 year(s) 10 day(s)
Appellant M/s. Spectris Technologies (P) Ltd., New Delhi
Respondent ACIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 22-07-2011
Date Of Final Hearing 12-07-2011
Next Hearing Date 12-07-2011
Assessment Year 2004-2005
Appeal Filed On 12-07-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA VICE PRESIDENT & SHRI I.P. BANSAL JUDICIAL MEMBER ITA NO. 3399/DEL/2010 ASSESSMENT YEARS: 2004-05 SPECTRIS TECHNOLOGIES (P) LTD. VS. ACIT 202 ANARKALI BAZAR CIRCLE 9(1) JHANDEWALAN EXTN. NEW DELHI. NEW DELHI. AAGCS6654R (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ASHWANI TANEJA & SH. TARUN KR. ADV. RESPONDENT BY : SH. GAJANAND MEENA CI T(DR) ORDER PER I.P. BANSAL J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST THE ORDER PASSED BY LD. CIT(A) DATED 23.03.2010 FOR A.Y . 2004-05. GROUNDS OF APPEAL READ AS UNDER: - 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN FRAMING THE IMPUGNED ASSESSMENT ORDER THAT TOO WITHOUT COMPLYING WITH THE MANDATORY CONDITIONS U/S 147 TO 151 OF THE INCOME TAX ACT 1961 AND IN ANY CASE AND IN ANY VIEW OF THE MATTER REOPENING OF THE ASSESSMENT OF THE ASSESSEE COMPANY AND THE IMPUGNED ASSESSMENT ORDER FRAMED IS CONTRARY TO LAW AND FACTS. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN DISALLOWING THE ITA NO. 3399/D/2010 2 DEPRECIATION OF RS. 2 77 36 266/- ON INTANGIBLE ASSETS. 3. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER A CTION OF LD. CIT(A) IN NOT REVERSING THE ACTION OF LD. AO IN MAKING DISALLOWANCE OF RS. 2 77 36 266/- AND IN FRAMING THE IMPUGNED ASSESSMENT ORDER IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE VOID AB INITIO BEYOND JURISDICTION AND THE SAME IS NOT SUSTAINABLE ON VARIOUS LEGAL AND FACTUAL GROUNDS. 4. THAT THE APPELLANT CRAVES THE LEAVE TO ADD MODI FY AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHO UT PREJUDICE TO EACH OTHER. 2. THE RETURN OF INCOME ORIGINALLY WAS FILED ON 31. 10.2004 DECLARING LOSS OF RS. 2 14 74 490/- AND THE SAID LOSS WAS ACC EPTED BY WAY OF ORDER DATED 10.11.2006 PASSED U/S 143(3) OF THE ACT. 3. SUBSEQUENTLY NOTICE U/S 148 WAS ISSUED ON 11.06. 2008 AFTER RECORDING THE FOLLOWING REASONS: - ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) ON 10/11/2006 AT A LOSS OF RS. 2 14 74 490/- . IT HAS NOW BEEN NOTICED THAT THE ASSESSEE HAD CLAIMED DEPRECIATION OF RS. 2 77 36 266/- ON GOODWI LL TREATING IT AS AN INTANGIBLE ASSETS. SINCE GOODWI LL IS NOT COVERED UNDER INTANGIBLE ASSETS MENTIONED IN SE C. 32 OF THE ACT FOR THE PURPOSE OF DEPRECIATION THE S AME IS NOT ALLOWABLE AS A DEDUCTION AND REQUIRED TO BE ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. IN VIEW OF THE ABOVE I HAVE REASON TO BELIEVE THAT AN AMOUNT OF RS. 2 77 36 266/- HAS ESCAPED ITA NO. 3399/D/2010 3 ASSESSMENT WITHIN THE MANNING OF SEC. 147 OF THE I. T. ACT 1961. SINCE THE ASSESSMENT HAS BEEN COMPLETED U/S 143(3) AND 4 YEARS HAVE NOT ELAPSED THE ASSESSMENT RECORD IS BEING SUBMITTED FOR KIND PERUSAL AND APPROVAL OF THE ADDL. COMMISSIONER OF INCOME-TAX RANGE-9 NEW DELHI ACCORDING TO SEC. 151(2) OF THE I.T. ACT 1961 FOR ISSUANCE OF NOTICE U/S 148 OF TH E I.T. ACT. (R.K. MEHTA) DY. COMMISSIONER OF INCOME TAX CIRCLE 9(1) NEW DELHI. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS SUBMITTED THAT THE AMOUNT OF GOODWILL ON WHICH THE DEPRECIATI ON WAS CLAIMED WAS PAID TO PHILIPS INDIA LTD. ON ACCOUNT OF PURCHASE O F RUNNING BUSINESS OF X-RAY ANALYTICAL INSTRUMENTATION AND SOFTWARE FOR X -RAY DIFFRACTION (XRD) AND X-RAY FLUORESCENCE SPECTROMETRY (XFS) WHI CH WAS DIVESTED BY THEN IN M/S SPECTRIS TECHNOLOGIES PVT. LTD. ALON G WITH ALL DATA CONTRACTS STAFF AND NON-COMPETITIVE AGREEMENT. TH E DATA BASE GIVEN THE ASSESSEE A LIST OF LARGE NUMBER OF CLIENTS WHO WERE HAVING AMC REPAIR & MAINTENANCE AND SERVICES FROM COMPANY THRO UGH EXPERTISE STAFF WHO WERE ALSO PART OF DISINVESTMENT AND THEY WERE H AVING EXPERIENCE OF SUCH BUSINESS SINCE LAST 20 YEARS AND MARKET CONTAC TS. SUCH INVESTMENT BY THE ASSESSEE HAS GIVEN INCOME GENERAT ION IN THE COMPANY AT LEAST FOR 10 YEARS SO THE AMOUNT PAID FO R WHICH NOMENCLATURE IT IS KIND OF ASSETS WHICH GIVES THE A SSESSEE AN ENDURING BENEFIT IN FUTURE AND HENCE COME UNDER THE DEFINITI ON OF ASSETS AND THUS ENTITLED FOR DEPRECIATION. HOWEVER AO DID NOT ACC EPT SUCH CONTENTION OF ITA NO. 3399/D/2010 4 THE ASSESSEE AND BY APPLYING THE DECISION IN THE CA SE OF B. SRINIVASA SHETTY VS. CIT 128 ITR 294 (SC) HAS HELD THAT GOODW ILL IS NOT A CAPITAL ASSET. HENCE ASSESSEE WAS NOT ENTITLED TO CLAIM D EPRECIATION ON PURCHASE OF GOODWILL AND IN THIS MANNER DEPRECIATIO N CLAIMED ON GOODWILL AMOUNTING TO RS. 2 77 36 26/- HAS BEEN DIS ALLOWED AND IN THIS MANNER IN THE IMPUGNED ORDER THE INCOME OF THE ASSE SSEE HAS BEEN ASSESSED AT RS. 62 61 780/- IN PLACE OF EARLIER ASS ESSED LOSS OF RS. 2 14 74 490/-. THE VIEW TAKEN BY THE AO HAS BEEN U PHELD BY LD. CIT(A) THE ASSESSEE IS AGGRIEVED HENCE IN APPEAL. 5. AFTER NARRATION OF THE FACTS IT IS THE MAIN CAS E OF LD. AR THAT THE DEPARTMENT HAS NOT FOLLOWED THE PRINCIPLES OF CONSI STENCY AS THE AO HIMSELF HAS DROPPED THE INITIATION OF REASSESSMENT PROCEEDINGS IN THE IMMEDIATE PRECEDING AND IMMEDIATE PROCEEDING ASSESS MENT YEARS. HE IN THIS REGARD REFER TO THE ORDER PASSED BY AO U/S 152(2) OF THE I.T. ACT 1961 DATED 30.12.2008 IN RESPECT OF A.Y. 2003-04 CO PY OF WHICH IS PLACED AT PAGE 403 OF THE PAPER BOOK WHEREIN THE A O HAS DROPPED THE PROCEEDINGS U/S 148 FOR A.Y. 2003-04 WITH THE OBSER VATIONS THE PROCEEDINGS U/S 148 OF THE INCOME TAX ACT 1961 ARE DROPPED HEREWITH. 6. HE SUBMITTED THAT COPY OF THE REASONS FOR REOPEN ING OF ASSESSMENT FOR A.Y. 2003-04 AS RECORDED ON 11.01.20 08 ARE PLACED AT PAGE 412 OF THE PAPER BOOK WHICH READS AS UNDER: - 11/01/2008 REASONS FOR ISSUE OF NOTICE U/S 148 IN T HE CASE OF M/S SPECTRIS TECHNOLOGIES (P) LTD. ASSTT. YEAR 2003-04 ITA NO. 3399/D/2010 5 ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3)AT A LOSS OF RS. 1 31 06 138/- ON 31/01/2006. IT HAS NOW BEEN NOTICED THAT THE ASSESSEE HAD CLAIMED DEPRECIATION @ 25% ON GOODWILL AND NON- COMPETE FEE AMOUNTING TO RS. 1 67 54 295/-. SINCE GOOD WILL AND NON COMPETE FEE ARE NOT INCLUDED IN THE LIST OF INTANGIBLE ASSETS ON WHICH DEPRECIATION IS ALLOWABLE THE CLAIM OF THE ASSESSEE CANNOT BE CONSIDERED AS A DEDUCTION IN VIEW OF THE JUDICIAL PRONOUNCEMENT IN THE CASE OF SH. B. SRINIVASA SHETTY VS. CIT (128 ITR 294 SC). IN VIEW OF THE ABOVE I HAVE REASON TO BELIEVE THAT AN AMOUNT OF RS. 1 67 54 295/- HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SEC. 147 OF THE I.T. ACT 1961. SINCE THE ASSESSMENT HAS BEEN COMPLETED U/S 143(3) AND 4 YEARS HAVE NOT ELAPSED THE ASSESSMENT RECORD IS BEING SUBMITTED FOR KIND PERUSAL AND APPROVAL OF THE ADDL. COMMISSIONER OF INCOME-TAX RANGE-9 NEW DELHI ACCORDING TO SEC. 151(2) OF THE I.T. ACT 1961 FOR ISSUANCE OF NOTICE U/S 148 OF THE I.T. ACT. SD/- (R.K. MEHTA) DY. COMMISSIONER OF INCOME TAX CIRCLE 9(1) NEW DELHI. 7. HE SUBMITTED THAT IN RESPONSE TO SUCH PROCEEDING S INITIATED BY AO THE ASSESSEE HAD SUBMITTED A DETAILED REPLY THE COP Y OF WHICH IS PLACED AT PAGES 404 TO 410 OF THE PAPER BOOK AND AFTER CON SIDERING THE SAID REPLY THE PROCEEDINGS WERE DROPPED. 8. SIMILARLY FOR A.Y. 2005-06 FOLLOWING REASONS WER E RECORDED ON 11.1.2008 THE COPY OF WHICH IS PLACED AT PAGE 399 O F THE PAPER BOOK: - 11/01/2008 REASONS FOR ISSUE OF NOTICE U/S 148 IN THE CASE OF M/S SPECTRIS TECHNOLOGIES (P) LTD. A.Y. 2005-06 ITA NO. 3399/D/2010 6 RETURN DECLARING A LOSS OF RS. 38 68 904/- WAS FILED ON 31/10/2005 AND THE SAME WAS PROCESSED U/S 143(1) AT RETURNED INCOME. IT HAS NOW BEEN NOTICED THAT THE ASSESSEE HAD CLAIMED DEPRECIATION @ 25% ON GOODWILL AND NON-COMPETE FEE AMOUNTING TO RS. 2 19 90 012/-. SINCE GOODWILL AND NON-COMPETE FEE ARE NOT INCLUDED IN THE LIST OF INTANGIBLE ASSETS ON WHICH DEPRECIATION IS ALLOWABLE THE CLAIM OF THE ASSESSEE CANNOT BE CONSIDERED AS A DEDUCTION IN VIEW OF THE JUDICIAL PRONOUNCEMENT IN THE CASE OF SH. B. SRINIVASA SHETTY VS. CIT(128 ITR 294 SC). IN VIEW OF THE ABOVE I HAVE REASON TO BELIEVE THAT AN AMOUNT OF RS. 2 19 90 012/- HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SEC. 147 OF THE I.T. ACT 1961. ISSUE NOTICE U/S 148 OF THE I.T. ACT. (R.K. MEHTA) DY. COMMISSIONER OF INCOME TAX CIRCLE 9(1) NEW DELHI. 9. COPY OF REPLY OF THE ASSESSEE FILED IN RESPONSE TO SUCH PROCEEDINGS IS PLACED AT PAGES 390 TO 396 OF THE PA PER BOOK AND ON 30.12.2008 LD. AO HAS DROPPED THE PROCEEDINGS BY PA SSING ORDER U/S 152(2) OF THE INCOME TAX ACT 1961 WITH THE SIMILAR OBSERVATIONS AS WERE MADE FOR A.Y. 2003-04 AND COPY OF SUCH ORDER IS PLA CED AT PAGE 389 OF THE PAPER BOOK. 10. THUS IT IS THE CASE OF LD. AR THAT WITHOUT ANY DIFFERENCE IN FACTS AND CIRCUMSTANCES OF THE CASE DEPARTMENT HAS DEVIAT ED FROM THE STAND ITA NO. 3399/D/2010 7 TAKEN BY IT IN THE IMMEDIATE PRECEDING YEAR AND IN THE IMMEDIATE PROCEEDING YEAR WHICH IS NOT PERMISSIBLE IN LAW AS PRINCIPLE OF CONSISTENCY HAS TO BE MAINTAINED AS PER DECISION OF HONBLE SUPREME COURT IN THE CASE OF RADHASOAMI SATSANG VS. CIT 193 ITR 321 (SC). 11. ON MERITS ALSO IT IS THE CASE OF LD. AR THAT G OODWILL IS AN ASSET HENCE ELIGIBLE FOR DEPRECIATION AND ACCORDING TO H IM THIS POSITION OF LAW HAS BEEN ACCEPTED RECENTLY BY THE DELHI HIGH COURT IN THE CASE OF CIT VS. HINDUSTAN COCA-COLA BEVERAGES PVT. LTD. 238 CTR 1 AND HE HAS PLACED RELIANCE UPON PARA 23 & 24 OF THE SAID DECIS ION. 12. IT IS ALSO THE CASE OF LD. AR THAT IN ANY CASE THESE ARE THE REASSESSMENT PROCEEDINGS BASED ON CHANGE OF OPINION WHICH ACCORDING TO DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA 320 ITR 561 (SC) IS NOT PERMISSIBLE. 13. THUS IT WAS THE SUBMISSION OF LD. AR THAT LD. CIT(A) HAS WRONGLY UPHELD THE REASSESSMENT PROCEEDINGS AND IT IS THE M AIN GRIEVANCE OF THE ASSESSEE THAT REASSESSMENT PROCEEDINGS HAVE WRONGLY BEEN INITIATED THEREFORE RESULTANT ASSESSMENT IS BAD IN LAW. ON MERIT ALSO THE CASE OF THE ASSESSEE SHOULD BE DECIDED IN FAVOUR OF ASSESSE E. 14. ON THE OTHER HAND RELYING UPON THE ASSESSMENT ORDER AND THE ORDER OF CIT(A) IT IS THE CASE OF LD. DR THAT REASS ESSMENT PROCEEDINGS ITA NO. 3399/D/2010 8 HAVE RIGHTLY BEEN INITIATED HENCE ASSESSMENT IS V ALID. ON MERITS IT IS THE CASE OF THE REVENUE THAT DEPRECIATION CANNOT BE GRANTED ON GOODWILL. 15. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. REASSESSMENT PROCEEDING FOR THE IMPUGNED ASSESSMENT YEARS HAVE BEEN INITIATED VIDE NOTICE IS SUED U/S 148 DATED 11.6.2008 COPY OF SUCH NOTICE PLACED AT PAGE 75 OF THE PAPER BOOK. FOR A.Y. 2003-04 NOTICE U/S 148 WAS ISSUED ON 24.1.2008 AGAINST THE REASONS RECORDED ON 11.1.2008 AND THE PROCEEDINGS U /S 148 WERE DROPPED VIDE ORDER DATED 30.12.2008 BY WAY OF AN OR DER U/S 152(2) OF INCOME TAX ACT 1961 (ACT). SIMILAR ORDER U/S 152( 2) HAS BEEN PASSED IN RESPECT OF A.Y. 2005-06 FOR WHICH YEAR REASSESSM ENT PROCEEDINGS WERE INITIATED VIDE NOTICE DATED 16.1.2008 ON THE R EASONS RECORDED ON 11.1.2008. THUS ON THE DATE WHEN NOTICE U/S 148 WAS ISSUED FOR THE IMPUGNED ASSESSMENT YEAR PROCEEDINGS U/S 148 WERE PENDING IN RESPECT OF ASSESSMENT YEARS 2003-04 & 2005-06 AND T HEY WERE ALSO DROPPED AFTER CONSIDERING THE SUBMISSIONS FILED BY THE ASSESSEE IN DETAIL. THUS THE PROCEEDINGS WHICH WERE INITIATED FOR IMMEDIATE PRECEDING YEAR AND IMMEDIATE PROCEEDING YEAR WERE D ROPPED BY THE REVENUE BEFORE THE CONCLUSION OF PROCEEDINGS FOR IM PUGNED ASSESSMENT YEAR WHICH IS AN INTERMEDIATE YEAR. IN VIEW OF THE SE FACTS WE HAVE TO EXAMINE THE CONTENTION OF LD. AR THAT WHETHER IT IS PERMISSIBLE FOR THE REVENUE TO ADOPT A DIFFERENT APPROACH FOR AN INTERM EDIATE YEAR WHEN THE CASE OF THE ASSESSEE HAS BEEN ACCEPTED FOR EARLIER YEAR AND SUBSEQUENT YEAR. IN OUR OPINION THE LAW ON THIS ISSUE IS WEL L SETTLED AND PRINCIPLE OF ITA NO. 3399/D/2010 9 CONSISTENCY HAS TO BE MAINTAINED BY THE REVENUE AND THIS IS CLEAR FROM THE FOLLOWING OBSERVATIONS OF THEIR LORDSHIPS IN TH E DECISION IN THE CASE OF RADHASOAMI SATSANG VS. CIT (SUPRA): - ONE THE CONTENTIONS WHICH LD. SENIOR COUNSEL FOR THE ASSESSEE APPELLANT RAISED AT THE HEARING WAS THAT IN THE ABSENCE OF ANY CHANGE IN THE CIRCUMSTANCES THE REVENUE SHOULD HAVE FELT BOUND BY THE PREVIOUS DECISIONS AND NO ATTEMPT SHOULD HAVE BEEN MADE TO REOPEN THE QUESTION. HE RELIED UPON SOME AUTHORITIES IN SUPPORT OF HIS STAND. A FULL BENCH OF THE MADRAS HIGH COURT CONSIDERED THIS QUESTION IN T.M.M. SANKARALINGA NADAR AND BROS. VS. CIT [1929] 4 ITC 226. AFTER DEALING WITH THE CONTENTION THE FULL BENCH EXPRESSED THE FOLLOWING OPINION (P. 242): THE PRINCIPLE TO BE DEDUCED FROM THESE TWO CASE IS THAT WHERE THE QUESTION RELATING TO ASSESSMENT DOES NOT VARY WITH THE INCOME EVERY YEAR BUT DEPENDS ON THE NATURE OF THE PROPERTY OR ANY OTHER QUESTION ON WHICH THE RIGHTS OF THE PARTIES TO BE TAXED ARE BASED E.G. WHETHER A CERTAIN PROPERTY IS TRUST PROPERTY OR NOT IT HAS NOTHING TO DO WITH THE FLUCTUATIONS IN THE INCOME; SUCH QUESTIONS IF DECIDED BY A COURT ON A REFERENCE MADE TO IT WOULD BE RES JUDICATA IN THAT THE SAME QUESTION CANNOT BE SUBSEQUENTLY AGITATED. ONE OF THE DECISIONS REFERRED TO BY THE FULL BENCH WAS THE CASE OF HOYSTEAD VS. COMMISSIONER OF TAXATION [1926] AC 155 (PC). SPEAKING FOR THE JUDICIAL COMMITTEE LORD SHAW STATED (P. 165): ITA NO. 3399/D/2010 10 PARTIES ARE NOT PERMITTED TO BEGIN FRESH LITIGATIONS BECAUSE OF NEW VIEWS THEY MAY ENTERTAIN OF THE LAW OF THE CASE OR NEW VERSIONS WHICH THEY PRESENT AS TO WHAT SHOULD BE A PROPER APPREHENSION BY THE COURT OF THE LEGAL RESULT EITHE R OF THE CONSTRUCTION OF THE DOCUMENTS OR THE WEIGHT OF CERTAIN CIRCUMSTANCES. IF THIS WERE PERMITTED LITIGATION WOULD HAVE NO END EXCEPT WHEN LEGAL INGENUITY IS EXHAUSTED. IT IS A PRINCIPLE OF LAW T HAT THIS CANNOT BE PERMITTED AND THERE IS ABUNDANT AUTHORITY REITERATING THAT PRINCIPLE. THIRDLY THE SAME PRINCIPLE NAMELY THAT OF A SETTING TO REST RIGHTS OF LITIGANTS APPLIES TO THE CASE WHERE A POINT FUNDAMENTAL TO THE DECISION TAKEN OR ASSUMED BY THE PLAINTIFF AND TRAVERSABLE BY THE DEFENDANT HAS NOT BEEN TRAVERSED. IN THAT CASE ALSO A DEFENDANT IS BOUND BY THE JUDGMENT ALTHOUGH IT MAY BE TRUE ENOUGH THAT SUBSEQUENT LIGHT OR INGENUITY MIGHT SUGGEST SOME TRAVERSE WHICH HAD NOT BEEN TAKEN. THESE OBSERVATIONS WERE MADE IN A CASE WHERE TAXATION WAS IN ISSUE. THIS COURT IN PARASHURAM POTTERY WORKS CO. LTD. VS. ITO [1977] 106 ITR 1 AT P. 10 STATED : AT THE SAME TIME WE HAVE TO BEAR IN MIND THAT THE POLICY OF LAW IS THAT THERE MUST BE A POIN T OF FINALITY IN ALL LEGAL PROCEEDINGS THAT STALE IS SUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPSE OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI-JUDICIAL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY. ASSESSMENTS ARE CERTAINLY QUASI-JUDICIAL AND THESE OBSERVATIONS EQUALLY APPLY. ITA NO. 3399/D/2010 11 WE ARE AWARE OF THE FACT THAT STRICTLY SPEAKING RES JUDICATA DOES NOT APPLY TO INCOME- TAX PROCEEDINGS. AGAIN EACH ASSESSMENT YEAR BEING A UNIT WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WHERE A FUNDAMENTAL ASPECT PERMEATING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HAVE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING TH E ORDER IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE POSITION TO BE CHANGED IN A SUBSEQUENT YEAR. ON THESE REASONINGS IN THE ABSENCE OF ANY MATERIAL CHANGE JUSTIFYING THE REVENUE TO TAKE A DIFFERENT VIEW OF THE MATTER AND IF THERE WAS NO CHANGE IT WAS IN SUPPORT OF THE ASSESSEE WE DO NOT THINK THE QUESTION SHOULD HAVE BEEN REOPENED AND CONTRARY TO WHAT HAD BEEN DECIDED BY THE COMMISSIONER OF INCOME-TAX IN THE EARLIER PROCEEDINGS A DIFFERENT AND CONTRADICTORY STAND SHOULD HAVE BEEN TAKEN. WE ARE THEREFORE OF THE VIEW THAT THESE APPEALS SHOULD BE ALLOWED AND THE QUESTION SHOULD BE ANSWERED IN THE AFFIRMATIVE NAMELY THAT THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE INCOME DERIVED BY THE RADHASOAMI SATSANG WAS ENTITLED TO EXEMPTION UNDER SECTIONS 11 & 12 OF THE INCOME-TAX ACT OF 1961. 16. FROM THE ABOVE OBSERVATIONS OF HONBLE SUPREME COURT IT IS CLEAR THAT THOUGH PRINCIPLE OF RES JUDICATA ARE NOT APPLI CABLE TO INCOME TAX PROCEEDINGS AND EACH ASSESSMENT YEAR IS A UNIT AND WHAT IS DECIDED IN ONE YEAR MAY NOT APPLY IN THE FOLLOWING YEAR BUT WH ERE A FUNDAMENTAL ASPECT PRE-MEETING THROUGH THE DIFFERENT ASSESSMENT YEARS HAS BEEN ITA NO. 3399/D/2010 12 FOUND AS A FACT ONE WAY OR THE OTHER AND PARTIES HA VE ALLOWED THAT POSITION TO BE SUSTAINED BY NOT CHALLENGING THE ORD ER IT WOULD NOT BE AT ALL APPROPRIATE TO ALLOW THE DECISION TO BE CHANGED IN A SUBSEQUENT YEAR PARTICULARLY IN ABSENCE OF ANY MATERIAL CHANGE JUST IFYING THE REVENUE TO TAKE A DIFFERENT VIEW OF THE MATTER AND IF THERE IS NO CHANGE AND IT WAS IN SUPPORT OF THE ASSESSEE IT WILL NOT BE APPROPRIATE TO RE-OPEN THE ISSUE AND TO DECIDE IT CONTRARY. THEREFORE FINDINGS SUB STANCE IN THE ARGUMENT OF LD. AR THAT IN VIEW OF PRINCIPLE OF CONSISTENCY THE REASSESSMENT PROCEEDINGS FOR THE YEAR UNDER CONSIDERATION SHOULD HAVE ALSO BEEN DROPPED. THEREFORE ON THE SHORT GROUND WE SEE NO JUSTIFICATION IN UPHOLDING THE VALIDITY OF REASSESSMENT PROCEEDINGS. THEREFORE NOT GOING INTO THE OTHER ASPECTS OF THE MATTER WHICH W ILL BE OF ACADEMIC IN NATURE WE DECIDE THE APPEAL FILED BY THE ASSESSEE IN FAVOUR OF ASSESSEE. 17. IN VIEW OF ABOVE DISCUSSION THE APPEAL FILED B Y THE ASSESSEE IS ALLOWED IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JULY 2011. SD/- SD/- (G.E. VEERABHADRAPPA) (I.P. BANSAL ) VICE PRESIDENT JUDICIAL MEMBER DATED: 22.7.11 *KAVITA ITA NO. 3399/D/2010 13 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT TRUE COPY BY ORDER DEPUTY REGISTRAR