ITO WD 17(2)(1), MUMBAI v. SILKASIA, MUMBAI

ITA 4297/MUM/2010 | 2001-2002
Pronouncement Date: 25-11-2011 | Result: Dismissed

Appeal Details

RSA Number 429719914 RSA 2010
Assessee PAN AAAFS3741E
Bench Mumbai
Appeal Number ITA 4297/MUM/2010
Duration Of Justice 1 year(s) 5 month(s) 30 day(s)
Appellant ITO WD 17(2)(1), MUMBAI
Respondent SILKASIA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 25-11-2011
Date Of Final Hearing 02-11-2011
Next Hearing Date 02-11-2011
Assessment Year 2001-2002
Appeal Filed On 26-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI J. SUDHAKAR REDDY A.M. AND SHRI V. DU RGA RAO J.M. ITA NO. 4297/MUM/2010 ASSESSMENT YEAR: 2001-02 INCOME TAX OFFICER-17(2)(1) APPELLANT R.NO. 216 PIRAMAL CHAMBER LALBAUG MUMBAI 400 012 VS. M/S SILKASIA RESPONDENT 326 WADALA UDYOG BHAVAN NAIGAON CROSS ROAD WADALA MUMBAI 400 031 (PAN AAAFS 3741E) C.O. NO. 48/MUM/10 (IN ITA NO. 4297/MUM/2010 ASSESSMENT YEAR: 2001-02 M/S SILKASIA CROSS OBJECTOR 326 WADALA UDYOG BHAVAN NAIGAON CROSS ROAD WADALA MUMBAI 400 031. (PAN AAAFS 3741E) VS. INCOME TAX OFFICER-17(2)(1) APPELLANT R.NO. 216 PIRAMAL CHAMBER LALBAUG MUMBAI 400 012 REVENUE BY : MR. A.K. NAIK ASSESSEE BY : MR. I.P. RATHI ORDER PER V. DURGA RAO J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF CIT(A)- 29 MUMBAI PASSED ON 24/03/2010 F OR THE ASSESSMENT YEAR 2001-02. THE ASSESSEE ALSO FILED C. O. AGAINST THE SAID ORDER OF THE CIT(A). ITA NO. 4297/M/10 & CO NO. 48/M/11 M/S SILKASIA 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING CROSS OBJE CTIONS IN HIS C.O:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE REOP ENING OF ASSESSMENT U/S 147 OF THE ACT. 2. WITHOUT PREJUDICE TO THE AFORESAID GROUND OF CRO SS OBJECTION THE LEARNED AO HAS ERRED IN CHARGING TAX ON PROFIT ON TRANSFER OF DEPB AS DEFINED U/S 28(IIID) AS BUSI NESS INCOME AND THEREBY INCLUDED IN TOTAL INCOME WHEREA S THE SAME IS NOT COVERED AS INCOME U/S 2(24) OF THE ACT. 3. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE FILE D HIS RETURN OF INCOME ON 31/10/2001DECLARING TOTAL INCOM E OF RS. 6 84 490/-. SCRUTINY ASSESSMENT WAS COMPLETED U/S 1 43(3) OF THE ACT 2003 ON A TOTAL INCOME OF RS. 12 08 740/- AND REVISED TO RS. 8 80 584/- U/S 250 WHILE GIVING EFFECT TO TH E CIT(A)'S ORDER DATED 31/10/03. THE CASE OF THE ASSESSEE WAS REOPENED U/S 148 OF THE ACT ON THE GROUND THAT IN VIEW OF THE AMENDMENTS MADE TO SECTION 80 HHC(3) AND FURTHER AMENDMENTS MADE TO EXPLANATION (BA) AND (BAA) AND A LSO WITH REFERENCE TO ADDITION OF SECTIONS 28(IIIA) AND (III ) AND REVISED THE DEDUCTION U/S 80 HHC OF THE ACT. AGAINST THE SAID R EOPENING THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE TH E CIT(A) AND THE CIT(A) CONFIRMED THE ACTION OF THE AO. 4. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE REOPENING OF ASSESSMENT WAS MADE AFTER FOUR YEA RS. IT IS CONTENDED THAT THE ASSESSEE HAS DISCLOSED ALL THE F ACTS FULLY AND TRULY THEREFORE REOPENING OF ASSESSMENT MADE ON T HE BASIS OF AMENDMENT MADE TO SECTION 80 HHC(C) WAS BAD IN LAW. FOR THIS CONTENTION THE LEARNED COUNSEL FOR THE ASSESSEE RE LIED UPON THE DECISION OF THE CO-ORDINATE BENCH OF ITAT MUMBAI B ENCH A IN THE CASE OF DCIT VS. M/S ALOKA EXPORTS IN ITA NOS. 404 & ITA NO. 4297/M/10 & CO NO. 48/M/11 M/S SILKASIA 3 405/M/10 AND CO. NOS. 185 & 186/M/10 FOR AY 2000-01 & 2001-02 VIDE ORDER DATED 9 TH FEBRUARLY 2011. A COPY OF THE SAID ORDER IS AVAILABLE ON RECORD. 5. ON THE OTHER HAND THE LEARNED DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE RECORD AS WELL AS GONE THROUGH THE ORDERS OF THE AU THORITIES BELOW. IT IS THE FACT THAT THE ASSESSMENT WAS COMPL ETED U/S 143(3) OF THE ACT AND THE REOPENING OF THE ASSESSM ENT WAS MADE U/S 148 AFTER 4 YEARS. THE AO REOPENED THE AS SESSMENT IN VIEW OF THE AMENDMENT TO SECTION 80HHC(3) OF THE AC T AND IT IS NOT THE CASE OF THE AO THAT THE ASSESSEE WAS NOT DI SCLOSED ALL THE RELEVANT FACTS TO COMPLETE THE ASSESSMENT FULLY AND TRULY. IN THE ABOVE FACTUAL MATRIX OF THE CASE THE TRIBUNAL IN THE CASE OF ALOKA EXPORTS (SUPRA) HELD AS UNDER:- 17. IN THIS CASE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) ON 27/02/04 AND THE REASSESSMENT WAS DONE B Y WAY OF NOTICE U/S 148 DATED 05/09/06. ACCORDING TO FIRST PROVISO TO SECTION 147 WHEREIN AN ASSESSMENT HAS B EEN DONE U/S 143(3) NO ACTION SHALL BE TAKEN UNDER THI S SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS ANY INCOME CHARGEABLE TO T AX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE I NTER ALIA TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NEC ESSARY FOR HIS ASSESSMENT FOR THAT YEAR. COMING BACK TO T HE FACTS OF THE INSTANT CASE IT IS SEEN FROM THE REASONS RE PRODUCED ABOVE THAT THE INITIATION OF REASSESSMENT HAS BEEN DONE ON THE STRENGTH OF AMENDMENT TO SECTION 80 HHC. IT IS CLEAR THAT THE REOPENING WAS DONE ONLY FOR GIVING EFFECT TO THE RETROSPECTIVE AMENDMENT WITHOUT ALLEGING THAT THER E WAS ANY FAILURE ON THE PART OF THE ASSESSEE TO DIS CLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FO R ASSESSEE'S ASSESSMENT. AS THE NOTICE U/S 148 WAS I SSUED BEYOND THE PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND THE ORIGINAL ASSESSMENT IN THI S CASE WAS COMPLETED U/S 143(3) IN OUR CONSIDERED OP INION SUCH INITIATION OF REASSESSMENT CANNOT BE ALLOWED. OUR VIEW IS FORTIFIED BY THE AFORE-NOTED ORDER PASSED BY THE MUMBAI BENCH OF THE TRIBUNAL WHICH IS AUTHORED BY T HE ITA NO. 4297/M/10 & CO NO. 48/M/11 M/S SILKASIA 4 LEARNED JUDICIAL MEMBER IN THE PRESENT COMBINATION. WE THEREFORE SET ASIDE THE THE INITIATION OF REASSESS MENT AND THE CONSEQUENTIAL PASSING OF ORDER U/S 143(3) R.W. S. 147. THIS GROUND IS ALLOWED. 7. SUBSEQUENTLY THE REVENUE CARRIED THE MATTER IN APP EAL BEFORE THE HON'BLE JURISIDCTIONAL HIGH COURT AND T HE HON'BLE HIGH COURT VIDE INCOME TAX APPEAL (L) NO. 919 OF 20 01 JUDGEMENT DATED 6 TH SEPTEMBER 2011 HELD AS UNDER:- 3. IT IS RELEVANT TO NOTE THAT ASSESSMENTS BEYOND F OUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR CAN BE REOPENED ONLY IF THERE IS FAILURE ON THE PART O F THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERI AL FACTS NECESSARY FOR THE ASSESSMENT. 4. WHERE THE ASSESSMENT IS SOUGHT TO BE REOPENED ON THE BASIS OF AMENDMENT TO SECTION 80 HHC IT CANNOT BE SAID THAT THERE WAS FAILURE ON THE PART OF THE ASSESEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NE CESSARY FOR THE ASSESSMENT. 5. IN THIS VIEW OF THE MATTER THE DECISION OF THE ITAT HOLDING THAT THE REOPENING OF THE ASSESSMENT IN TH E PRESENT CASE BEYOND FOUR YEARS FROM THE END OF THE RELEVANT AY IS INVALID CANNOT BE FAULTED. 8. IN THE CASE OF HINDUSTAN LEVER LTD VS. ACIT 268 ITR 339 THE HON'BLE BOMBAY HIGH COURT HAS HELD THAT IT WAS CLEAR THAT THE REVENUE COULD NOT ESTABLISH ANY LAPSE OR FAILUR E ON THE PART OF THE ASSESSEE-PETITIONER TO DISCLOSE FULLY AND TR ULY ALL THE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT-PETITIO NER FOR THE ASSESSMENT YEAR IN QUESTION. THEREFORE NOTICE ISSU ED U/S 148 WAS NOT VALID AND THE SAME WAS LIABLE TO BE QUASHED . 9. IN VIEW OF THE ABOVE DISCUSSION WE HOLD THAT TH E NOTICE ISSUED U/S 148 IS NOT VALID AND THEREFORE THE SAME IS LIABLE TO BE QUASHED. ACCORDINGLY THE ORDER OF THE CIT(A) IS SE T ASIDE AND THE CO FILED BY THE ASSESSEE IS ALLOWED. 10. IN THE RESULT C.O. FILED BY THE ASSESSEE IS AL LOWED. ITA NO. 4297/M/10 & CO NO. 48/M/11 M/S SILKASIA 5 11. AS REGARDS THE APPEAL OF THE REVENUE IS CONCERN ED SINCE WE HAVE SET ASIDE THE ORDER OF THE CIT(A) BY HOLDIN G THAT THE ISSUANCE OF NOTICE U/S 148 IS NOT VALID & THE SAME IS QUASHED WHILE DECIDING THE C.O. FILED BY THE ASSESSEE (SUPR A) IT BECOMES ACADEMIC TO GO INTO THE MERITS OF THE CASE OF THE A PPEAL FILED BY THE REVENUE. THEREFORE THE APPEAL OF THE REVENUE B ECOMES INFRUCTUOUS AND THE SAME IS DISMISSED AS INFRUCTUOU S. 12. TO SUM UP THE CO FILED BY THE ASSESSEE IS ALLO WED AND THE APPEAL FILED BY THE REVENUE IS DISMISSED AS INDICA TED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF NOVEMBER 2011. SD/- SD/- (J. SUDHAKAR REDDY) (V. DURGA R AO) ACCOUNTANT MEMBER JUDICIAL M EMBER MUMBAI DATED: 25 TH NOVEMBER 2011. KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE G BENCH I.T .A.T. MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR I.T.A.T. MUMBAI.