The ITO, Ward-3(1), Visakhapatnam v. M/s Rajeev Builders, Visakhapatnam

ITA 425/VIZ/2009 | 2004-2005
Pronouncement Date: 05-01-2011 | Result: Allowed

Appeal Details

RSA Number 42525314 RSA 2009
Bench Visakhapatnam
Appeal Number ITA 425/VIZ/2009
Duration Of Justice 1 year(s) 4 month(s) 4 day(s)
Appellant The ITO, Ward-3(1), Visakhapatnam
Respondent M/s Rajeev Builders, Visakhapatnam
Appeal Type Income Tax Appeal
Pronouncement Date 05-01-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 05-01-2011
Date Of Final Hearing 03-11-2010
Next Hearing Date 03-11-2010
Assessment Year 2004-2005
Appeal Filed On 31-08-2009
Judgment Text
ITA NO.425/VIZ/2009 RAJEEV BUILDERS VSKP IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV JUDICIAL MEMBER AND SHRI BR BASKARAN ACCOUNTANT MEMBER ITA NO. 425 /VIZAG/ 20 09 ASSESSMENT YEAR : 2004 - 05 ITO WARD - 3(1) VISA KHAPATNAM M/S. RAJEEV BUILDERS VISAKHAPATNAM (APPELLANT) VS. (RESPONDENT) PAN NO.AAHFR 6659K APPELLANT BY: SHRI D.S. SUNDER SINGH DR RESPONDENT BY: SHRI I. KAMA SASTRY CA ORDER PER SHRI S.K. YADAV JUDICIAL MEMBER : - THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) ON VARIOUS GROUNDS BUT THEY ALL RELATE TO THE VALIDITY OF THE RE - OPENING OF THE ASSESSMENTS. 2. THE BRIEF FACTS BORNE OUT FROM THE RECORD O N THE IMPUGNED ISSUE ARE THAT THE ASSESSEE HAS FILED A RETURN OF IN COME FOR THE IMPUGNED ASSESSMENT YEAR I.E. 2004 - 05 ON 1.11.2004 DISCLOSING THE LONG TERM CAPITAL GAINS OF RS.2 51 640/ - . THE RETURN WAS PROCESSED U/S 143(1) VIDE INTIMATION DATED 12.3.2005 . SUBSEQUENTLY THE A.O. NOTICED THAT WHILE COMPUTING THE CAPITAL GAIN THE ASSESSEE IN ADDITION TO THE COST OF LAND OF RS.3 11 586/ - CLAIMED ADDITIONAL EXPENSES TOWARDS COST OF COMPOUND WALL OF RS.6 29 582/ - COST OF DEVELOPMENT CHARGES OF RS.9 96 000/ - AND COST OF LEGAL CHARGES OF RS.9 58 800/ - . ALL THESE EXPENSES WER E ADDED TO THE COST OF THE PURCHASE IN ORDER TO ARRIVE AT COST OF ACQUISITION AT RS.25 84 382/ - . ON THE SAME INDEXATION BENEFIT WAS CLAIMED AND THE INFLATED COST OF ACQUISITION WAS SHOWN AT RS.69 84 752/ - . HOWEVER NO CORROBORATIVE EVIDENCE TOWARDS THE C OST OF SUCH EXPENSES WERE FURNISHED ALONG WITH THE RETURN OF INCOME. THEREFORE THE ASSESSING OFFICER HAD REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ITA NO.425/VIZ/2009 RAJEEV BUILDERS VSKP 2 ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR 2004 - 05 FOR NON - FURNISHING OF EVIDENCE IN SUPPORT OF E XPENSES CLAIMED TOWARDS THE COST OF ACQUISITION OF THE ASSETS. 3 . A N OTICE U/S 148 WAS ISSUED ON 26. 5.2005. IN RESPONSE TO THAT NOTICE ASSESSEE SUBMITTED A LETTER STATING THEREIN THAT THE RETURN FILED ON 1.4.2004 MAY BE TREATED AS HAVING FILED AGAINST NOTICE U/S 148. ACCORDINGLY THE RE - ASSESSMENT WAS FRAMED AND A.O. RE - COMPUTED THE CAPITAL GAINS AT RS.51 95 050/ - . THIS ORDER OF THE A.O. WAS CHALLENGED BEFORE THE CIT(A) MAINLY ON THE GROUND THAT WHEN THERE WAS A TIME TO ISSUE A NOTICE U/S 143(2) THE QUESTION OF INVOKING THE PROVISIONS OF SECTION 147 WAS NOT CORRECT AND ALSO THE REASONS RECORDED BY THE A.O. WERE NOT SUPPLIED TO THE ASSESSEE DESPITE A REPEATED REQUEST OF THE ASSESSEE. THE CIT(A) ON THESE TWO GROUNDS KNOCKED DOWN THE RE - ASSESSMENT AFTER HOLDING THE RE - OPENING TO BE INVALID AND DECLARED THE NOTICE ISSUED U/S 148 AS ILLEGAL AND INVALID AND THE ASSESSMENT FRAMED IN CONSEQUENCE TO SUCH NOTICE AS VOID - AB - INITIO. THIS ORDER OF THE CIT(A) WAS NOT CHALLENGED BEFORE THE TRIBUNAL. 4 . THE ASSESSI NG OFFICER AGAIN ISSUED A NOTICE U/S 148 ON 11.4.200 7 FOR THE SAME ASSESSMENT YEAR AND WITH THE SAID NOTICE THE REASONS FOR RE - OPENING THE ASSESSMENT WERE COMMUNICATED TO THE ASSESSEE. THE REASONS COMMUNICATED TO THE ASSESSEE ARE EXTRACTED HEREUNDER: AS THE ORDER OF ASSESSMENT U/S 144 OF THE ACT PASSED ON 21.11.2006 FOR THE ASSESSMENT YEAR 2004 - 05 WAS ANNULLED BY THE CIT(A) (VIDE APPELLATE ORDER DATED 23.2.2007 IN ITA NO.103/ITO/W - 3(1)/VSP/06 - 07 ONLY ON TECHNICAL GROUND WITH REGARD TO ISSUE OF NOTICE U/S 148 OF THE ACT ON 6.5.2005 AND THUS AS THERE IS NO ASSESSMENT IN EXISTENCE AND AS THE VARIOUS CLAIMS MADE BY YOU IN DECLARING THE INCOME UNDER THE HEAD LONG TERM CAPITAL GAINS IN THE RETURN OF INCOME FILED BY YOU ON 1.11.2004 WERE NOT SUPPORTED BY DOC UMENTARY EVIDENCES AND ALSO AS SOME OF THE CLAIMS WERE NOT ALLOWABLE CLAIMS UNDER THE PROVISIONS OF THE I.T. ACT. I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT ON ACCOUNT OF YOUR ABOVE CLAIMS. ITA NO.425/VIZ/2009 RAJEEV BUILDERS VSKP 3 5 . THE ASSESSEE CHALLENGED T HE RE - OPENING OF THE ASSESSMENT ON THE GROUND THAT SECOND REOPENING FOR SAME REASONS ARE NOT POSSIBLE AND PLACED RELIANCE ON SOME OF THE CASE LAWS WHICH WERE DISTINGUISHED BY THE A.O. AND HE COMPLETED THE ASSESSMENT DETERMINING THE LONG TERM CAPITAL GAIN A T RS.32 80 401/ - . THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND CHALLENGED THE RE - OPENING OF THE ASSESSMENT ON THE GROUND THAT FOR THE SAME REASONS THE ASSESSMENT CANNOT BE RE - OPENED. THE CIT(A) BEING CONVINCED WITH THE EXPLANATIONS OF THE ASSES SE E HELD THE RE - OPENING TO BE INVALID AND ANNULLED THE ASSESSMENT FRAMED CONSEQUENT THERETO. NOW THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL. 6 . THE LD. D.R. HAS CONTENDED THAT IN THE FIRST ROUND OF APPEAL THE RE - OPENING OF THE ASSESSMENT WA S HELD TO BE INVALID ONLY FOR THE REASONS THAT IT WAS RE - OPENED WITHIN THE PERIOD OF ONE YEAR WHEN THERE WAS TIME LIMIT FOR ISSUING A NOTICE U/S 143(2) OF THE ACT. NOWHERE THE REASONS RECORDED FOR RE - OPENING THE ASSESSMENT WAS HELD TO BE INSUFFICIENT TO F ORM A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. NOW THE RE - OPENING WAS DONE AFTER RECORDING THE REASONS AND FORMATION OF BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THEREFORE THE FINDING OF THE CIT(A) WHICH ATTAINED F INALITY WOULD NOT COME IN THE WAY FOR RE - OPENING OF THE ASSESSMENT. THERE IS NO LAW WHICH DEBAR THE REVENUE FROM RE - OPENING THE ASSESSMENT SECOND TIME IF FIRST TIME RE - OPENING WAS QUASHED ON LEGAL ISSUES. WHATEVER JUDGEMENTS ARE RELIED ON BY THE ASSESSEE ALL ARE DISTINGUISHABLE ON FACTS. AT THE MOST THE FIRST RE - OPENING CAN BE CALLED TO BE AN IRREGULAR ON ACCOUNT OF CERTAIN DEFECTS BUT IT DOES NOT DEBAR THE REVENUE FROM RE - OPENING THE ASSESSMENT AFTER HAVING FORMED A BELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT AND ALSO ON FULFILLING THE LEGAL REQUIREMENTS. 7 . THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND HAS SUBMITTED THAT IN FIRST ROUND OF APPEAL THE REOPENING WAS ANNULLED. THEREFORE THE REVENUE ITA NO.425/VIZ/2009 RAJEEV BUILDERS VSKP 4 CANNOT REOPEN THE ASSESSMENT ON TH E SAME GROUNDS. IN SUPPORT OF HIS CONTENTIONS HE HAS PLACED A RELIANCE UPON THE FOLLOWING JUDGEMENTS: 1. R.K. NAGPAL VS. ACIT 103 TTJ (NAG) 554 2. ANAND SAMRAT & CO. VS. ITO 240 ITR 852 (AP) 3. PARASHURAM POTTERY WORKS CO. LTD. VS. ITO 106 ITR 1 (SC) 4. CIT VS. RA O THAKUR NARAYAN SINGH 56 ITR 234 (SC) 5. CIT VS. SUN ENGINEERING WORKS (P) LTD. 198 ITR 297 (SC) 6. EAST INDIA HOTELS LTD. VS. DCIT & ORS. 204 ITR 435 (CAL) 8 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE ORDERS OF AUTHORITIES BELOW AND DOCUME NTS PLACED ON RECORD AND THE JUDGEMENTS REFERRED TO BY THE PARTIES. THE RETURN OF INCOME WAS INITIALLY PROCESSED U/S 143(1) . T HEREAFTER THOUGH THE TIME LIMIT WAS AVAILABLE WITH THE REVENUE TO ISSUE NOTICE U/S 143(2) BUT INSTEAD OF FRAMING A REGULAR ASSES SMENT IT OPTED TO REOPEN THE ASSESSMENT U/S 147 BY ISSUING A NOTICE U/S 148 OF THE ACT. THE ISSUANCE OF NOTICE WAS CHALLENGED BEFORE THE CIT(A) ONLY ON TWO GROUNDS I.E. THE A.O. HAS NO JURISDICTION TO REOPEN THE ASSESSMENT WHEREAS THE TIME LIMIT IS AVAI LABLE TO ISSUE A NOTICE U/S 143(2) FOR FRAMING A REGULAR ASSESSMENT. THE SECOND G ROUND FOR CHALLENGING THE ASSESSMENT WAS THAT THE A.O. HAS NOT SUPPLIED THE COPIES OF REASONS RECORDED TO THE ASSESSEE DESPITE ITS REQUEST. THE CIT(A) HAVING ACCEPTED THE CO NTENTION OF THE ASSESSEES HAD KNOCKED DOWN THE REOPENING OF THE ASSESSMENT HAVING HELD THAT NOTICE ISSUED U/S 148 WAS BAD IN LAW FOR THE REASONS THAT REASONS FOR REOPENING OF THE ASSESSMENT WERE NOT COMMUNICATED TO THE ASSESSEES AND WHEN THERE WAS TIME TO ISSUE NOTICE U/S 143(2) THE QUESTION OF INVOKING THE PROVISIONS OF SECTION 147 WAS NOT CORRECT AND ACCORDINGLY ANNULLED THE ASSESSMENT FRAMED CONSEQUENT THERETO. THE A.O. FURTHER REOPENED THE ASSESSMENT AFTER FORMING A BELIEF THAT INCOME CHARGEABLE TO TA X HAD ESCAPED ASSESSMENT ON ACCOUNT OF INCORRECT CLAIM OF CAPITAL GAINS. REASONS FOR REOPENING OF THE ASSESSMENT WAS ALSO COMMUNICATED TO THE ASSESSEE ALONG WITH THE NOTICE ISSUED U/S 148 OF THE ACT. THE ASSESSEE OBJECTED THE REOPENING OF THE ASSESSMENT AT SECOND TIME ON THE GROUND THAT ONCE FIRST REOPENING WAS ANNULLED BY THE CIT(A) THE A.O. HAS NO JURISDICTION TO REOPEN THE ASSESSMENT AGAIN. ITA NO.425/VIZ/2009 RAJEEV BUILDERS VSKP 5 9 . NOW THE SOLE CONTROVERSY RAISED BEFORE US IS WHETHER IN SUCH CIRCUMSTANCES THE REVENUE HAS JURISDICTION TO REOPEN THE ASSESSMENT SECOND TIME WHEN THE FIRST REOPENING WAS QUASHED ON LEGAL ISSUES WITHOUT GIVING ANY FINDING REGARDING SUFFICIENCY OF THE REASONS RECORDED TO FORM A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. BEFORE DWELLING UPON THE ISSUE WE WOULD LIKE TO EXTRACT THE RELEVANT PROVISIONS OF SECTION 147 & 148 WHICH GOVERNS THE PROCESS OF REOPENING OF THE ASSESSMENT AS UNDER: SECTION 147. IF THE [ASSESSING] OFFICER [HAS REASON TO BELIEVE] THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR HE MAY SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153 ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION OR RECOMPUTED THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE AS THE CASE MAY BE FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSE SSMENT YEAR): PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB - SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEAR UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSAR Y FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. [ PROVIDED FURTHER THAT THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOME OTHER THAN THE INCOME INVOLVING MATTERS WHICH ARE THE SUBJECT MATTERS OF ANY APPEAL REFERENCE OR REVISION WHICH IS CHARGEABL E TO TAX AND HAS ESCAPED ASSESSMENT.] EXPLANATION1. PRODUCTION BEFORE THE ASSESSING OFFICER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED BY THE ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2 FOR THE PURPOSES OF THIS SECTION THE FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT NAMELY (A) WHERE NO RETURN OF INCOME HAS BEEN FU RNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE ITA NO.425/VIZ/2009 RAJEEV BUILDERS VSKP 6 PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME - TAX; (B) WHERE A RETURN OF INCO ME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOSS DEDUCTION ALLOWANCE OR RELIEF IN THE RETURN; (C) WHERE AN ASSESSMENT H AS BEEN MADE BUT (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDERASSESSED; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RATE; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF UNDER THIS ACT; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR ANY OTHER A LLOWANCE UNDER THIS ACT HAS BEEN COMPUTED.] EXPLANATION 3 FOR THE PURPOSE OF ASSESSMENT OR REASSESSMENT UNDER THIS SECTION THE ASSESSING OFFICER MAY ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE WHICH HAS ESCAPED ASSESSMENT AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION NOTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SUB - SECTION (2) OF SECTION 148.] [ ISSUE OF NOTICE WHERE INCOME HAS ESCA PED ASSESSMENT. SECTION 148 [(1)] BEFORE MAKING THE ASSESSMENT REASSESSMENT OR RECOMPUTATION NOTICE REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD AS MAY BE SPECIFIED IN THE NOTICE A RETURN OF HIS INCOME OR THE INCOME OF ANY OTHER PERSON IN RESPECT OF WH ICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR CORRESPONDING TO THE RELEVANT ASSESSMENT YEAR IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED; AND THE PROVISIONS OF TH IS ACT SHALL SO FAR AS MAY BE APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139. PROVIDED THAT IN A CASE (A) WHERE A RETURN HAS BEEN FURNISHED DURING THE PERIOD COMMENCING ON THE 1 ST DAY OF OCTOBER 1991 AND ENDING ON THE 30 TH DAY OF SEPTEMBER 2005 IN RESPONSE TO A NOTICE SERVED UNDER THIS SECTION AND (B) SUBSEQUENTLY A NOTICE HAS BEEN SERVED UNDER SUB - SECTION (2) OF SECTION 143 AFTER THE EXPIRY OF TWELVE MONTHS SPECIFIED IN THE PROVISO TO SUB - SECTION (2) OF SECTION 143 AS IT STOOD IMMEDIATELY BEFORE THE AMENDMENT OF SAID SUB - SECTION BY THE FINANCE ACT 2002 (20 OF 2002) BUT BEFORE THE EXPIRY OF THE TIME LIMIT FOR MAKING THE ASSESSMENT RE - ASSESSMENT OR RECOMPUTATION AS SPECIFIED IN SUB - SECTION (2) OF SECTIO N 153 EVERY SUCH NOTICE REFERRED TO IN THIS CLAUSE SHALL BE DEEMED TO BE A VALID NOTICE. ITA NO.425/VIZ/2009 RAJEEV BUILDERS VSKP 7 PROVIDED FURTHER THAT IN A CASE (A) WHERE A RETURN HAS BEEN FURNISHED DURING THE PERIOD COMMENCING ON THE 1 ST DAY OF OCTOBER 1991 AND ENDING ON THE 30 TH DAY OF SEPTEMB ER 2005 IN RESPONSE TO A NOTICE SERVED UNDER THIS SECTION AND (B) SUBSEQUENTLY A NOTICE HAS BEEN SERVED UNDER CLAUSE (II) OF SUB - SECTION (2) OF SECTION 143 AFTER THE EXPIRY OF TWELVE MONTHS SPECIFIED IN THE PROVISO TO CLAUSE (II) OF SUB - SECTION (2) OF SECT ION 143 BUT BEFORE THE EXPIRY OF THE TIME LIMIT FOR MAKING THE ASSESSMENT REASSESSMENT OR RECOMPUTATION AS SPECIFIED IN SUB - SECTION (2) OF SECTION 153 EVERY SUCH NOTICE REFERRED TO IN THIS CLAUSE SHALL BE DEEMED TO BE A VALID NOTICE. EXPLANATION FOR TH E REMOVAL OF DOUBTS IT IS HEREBY DECLARED THAT NOTHING CONTAINED IN THE FIRST PROVISO OR THE SECOND PROVISO SHALL APPLY TO ANY RETURN WHICH HAS BEEN FURNISHED ON OR AFTER THE 1 ST DAY OF OCTOBER 2005 IN RESPONSE TO A NOTICE SERVED UNDER THIS SECTION. [( 2) THE ASSESSING OFFICER SHALL BEFORE ISSUING ANY NOTICE UNDER THIS SECTION RECORD HIS REASONS FOR DOING SO.] 10 . ON A CAREFUL PERUSAL OF BOTH THE PROVISIONS WE DO NOT FIND ANY CONDITIONS OR BARRIER WHICH DEBARS THE REVENUE TO REOPEN THE ASSESSMENT SECOND TIME AFTER FORMING A REASONABLE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. WE HAVE ALSO CAREFULLY EXAMINED THE JUDGEMENTS REFERRED TO BY THE ASSESSEES IN SUPPORT OF HIS CONTENTIONS BUT NOWHERE IT HAD BEEN CATEGORICALLY LAID DOWN E ITHER BY THE HIGH COURTS OR THE APEX COURT THAT ONCE THE FIRST REOPENING IS QUASHED/ANNULLED ON A LEGAL ISSUE WITHOUT GIVING ANY FINDING WITH REGARD TO THE SUFFICIENCY OF REASONS RECORDED FOR REOPENING THE ASSESSMENT THE REVENUE IS DEBAR RED FOREVER TO REO PEN THE ASSESSMENT FOR THAT PARTICULAR ASSESSMENT YEAR. THIS VIEW WAS EXPRESSED ONLY BY THE SINGLE BENCH OF THE TRIBUNAL IN THE CASE OF R.K. NAGPAL VS. ACIT 103 TTJ 554. SINCE THE SINGLE BENCH JUDGEMENT IS NOT BINDING UPON THE DIVISIONAL BENCH OF THE TRI BUNAL WE ARE NOT STRICTLY REQUIRED TO FOLLOW THE SAME. IT MAY HOWEVER CAN BE USED TO SUPPORT OUR VIEWS BUT IF THE DIVISIONAL BENCH WISH TO TAKE A CONTRARY VIEW SINGLE MEMBER JUDGEMENTS WOULD NOT COME IN THEIR WAY. ITA NO.425/VIZ/2009 RAJEEV BUILDERS VSKP 8 1 1 . IN THE CASE OF ANAND SAMRAT & COMP ANY VS. ITO (SUPRA) THE ISSUE WAS ENTIRELY DIFFERENT . I N THAT CASE THE FIRST REASSESSMENT WAS COMPLETED FOLLOWING A SEARCH NOTICE ON MERIT. THE MATTER WENT UP TO THE TRIBUNAL AND TRIBUNAL ALLOWED THE APPEAL ON MERIT. IN THAT CASE THE FIRST REASSESSMENT PROCEEDINGS WERE NOT KNOCKED DOWN BY THE APPELLATE AUTHORITIES ON A LEGAL ISSUE . I T WAS RATHER DECIDED ON MERIT. THEREFORE THE HONBLE HIGH COURT OF ANDHRA PRADESH HAVE HELD THAT ONCE THE ASSESSMENT WAS REOPENED AND MATTER WAS ADJUDICATED ON MERIT THE REVENUE CANNOT REOPEN THE ASSESSMENT ON SECOND TIME ON SIMILAR GROUNDS. BUT IN THE INSTANT CASE THE FACTS ARE ENTIRELY DIFFERENT. IN THE CASE OF PARASHURAM POTTERY WORKS COMPANY LIMITED VS. ITO (SUPRA) CIT VS. RAO THAKUR NARAYAN SINGH (SUPRA) AND CIT VS . SUN ENGINEERING WORKS LIMITED THE FACTS ARE ENTIRELY DIFFERENT. THERE WAS NO FINDING IN THIS JUDGEMENT WITH REGARD TO THE ISSUE IN DISPUTE. 1 2 . IN THE INSTANT CASE THE FIRST REOPENING OF THE ASSESSMENT WAS KNOCKED DOWN BY THE CIT(A) ONLY ON TWO GROUND S I.E. (1) THE REASONS FOR REOPENING OF THE ASSESSMENT WERE NOT COMMUNICATED TO THE ASSESSEES (2) WHEN THERE WAS TIME TO ISSUE A NOTICE U/S 143(2) THE QUESTION OF INVOKING THE PROVISIONS OF SECTION 147 WAS NOT CORRECT. T HE CIT(A) HAS NOT GIVEN ANY FINDING WITH REGARD TO THE SUFFICIENCY OF REASONS RECORDED FOR REOPENING THE ASSESSMENT. MEANING THEREBY THE REOPENING OF THE ASSESSMENT WAS NOT HELD TO BE INVALID ON MERIT. AFTER FULFILLING THE REQUISITE CONDITIONS PRESCRIBED UNDER THE ACT THE A.O. HAS REOPEN ED THE ASSESSMENT AFTER FORMING A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE REASONS RECORDED FOR REOPENING THE ASSESSMENT WERE ALSO COMMUNICATED TO THE ASSESSEE ALONG WITH THE NOTICE U/S 148 OF THE ACT. THEREFORE THE DEFECT POINT ED OUT BY THE CIT(A) IN REOPENING WHILE ANNULLING THE ASSESSMENT HAS BEEN REMOVED BY THE A.O. AND FRESH NOTICE FOR REOPENING OF ASSESSMENT WAS ISSUED. SINCE WE ARE NOT HEARING ANY APPEAL AGAINST THE FIRST ORDER OF THE CIT(A) THROUGH WHICH THE REOPENING OF THE ASSESSMENT WAS ANNULLED IN FIRST ROUND WE DO NOT WISH TO MAKE ANY COMMENTS WITH REGARD TO THE VERAC ITY OF THE ORDERS. WE HOWEVER OF THE VIEW THAT THE DEFECTS POINTED OUT IN THE FIRST RE - OPENING ITA NO.425/VIZ/2009 RAJEEV BUILDERS VSKP 9 MAKES THE RE - OPENING TO BE IRREGULAR AND NOT TO IL LEGA L. SINCE THERE IS NO PROVISION UNDER THE ACT WHICH DEBARS THE REVENUE FROM REOPENING THE ASSESSMENT ON SECOND TIME FOR THE REASONS WHICH WERE NEVER ADJUDICATED UPON TO BE INSUFFICIENT OR INVALID THE REVENUE IS WITHIN ITS RIGHTS TO REOPEN THE ASSESSMENT S ECOND TIME IF IT FULFILS THE OTHER REQUISITE CONDITIONS. 1 3 . TURNING TO THE FACTS OF THE CASE IN LIGHT OF ABOVE LEGAL PROPOSITIONS WE ARE OF THE VIEW THAT IN THE FIRST ROUND THE REOPENING OF THE ASSESSMENT WAS KNOCKED DOWN ONLY FOR THE REASONS THAT THE R EASONS RECORDED WERE NOT COMMUNICATED TO THE ASSESSEE AND THE REOPENING WAS DONE WHEN THERE WAS A TIME TO ISSUE A NOTICE U/S 143(2) OF THE ACT. THERE WAS NO SPECIFIC FINDING OF THE CIT(A) WITH REGARD TO THE SUFFICIENCY OF REASONS TO FORM A BELIEF THAT INC OME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. AT THE TIME OF SECOND REOPENING THE DEFECTS WHICH WERE POINTED OUT BY THE CIT (A) IN FIRST ROUND HAS BEEN REMOVED AND THE A.O. HAS REOPENED THE ASSESSMENT AFTER FORMING A BELIEF THAT INCOME CHARGEABLE TO TAX HA S ESCAPED ASSESSMENT. NO ARGUMENT WAS RAISED WITH REGARD TO THE SUFFICIENCY OF REASONS HENCE IT WAS NOT ADJUDICATED UPON BY THE CIT(A). THEREFORE WE ARE OF THE VIEW THAT REOPENING OF THE ASSESSMENT IS VALID AND WE RESTORE THE MATTER TO THE FILE OF THE C IT(A) AFTER SETTING ASIDE HIS ORDER TO ADJUDICATE THE APPEAL ON MERIT AS HE HAS NOT GIVEN ANY FINDING ON MERIT AND KNOCKED DOWN THE ASSESSMENT ON A LEGAL ISSUE. 1 4 . IN THE RESULT THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED I N THE OPEN COURT ON 5.1 .20 1 1 SD/ - SD/ - (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM DATED 5 TH JANUARY 2011 ITA NO.425/VIZ/2009 RAJEEV BUILDERS VSKP 10 COPY TO 1 ITO WARD - 3(1) RANGE - 3 VISAKHAPATNAM 2 M/S. RAJEEV BUILDERS D.NO.6 - 22 - 6 EAST POINT COLONY VISAKHAPATNAM 3 THE CI T VISAKHAPATNAM 4 THE CIT (A) VISAKHAPATNAM 5 THE DR ITAT VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SEC RETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM