Chandrasinh Ramsinh Parmar, Dadra & Nagar Haveli v. The Income tax Officer,Ward-1,, Valsad

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'B' [BEFORE SHRI T K SHARMA JM & SHRI A N PAHUJA AM] ITA NO.526/AHD/2008 (ASSESSMENT YEAR:-2004-05) SHRI CHANDRASINH RAMSINH PARMAR PARMAR WADI SAYLI ROAD SILVASSA DADRA & NAGAR HAVELI. [PAN:ADWPP1776D] V/S THE INCOME-TAX OFFICER WARD-1 VAPI. [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI R N VEPARI AR REVENUE BY:- SMT. NEETA SHAH DR O R D E R A N PAHUJA: THIS APPEAL FILED BY THE ASSESSEE AGAINST AN ORDE R DATED 16-10-2007 OF THE LD. CIT(APPEALS) VALSAD R AISES THE FOLLOWING GROUNDS :- [I] REOPENING OF ASSESSMENT: (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) OUGHT TO HAVE HELD THAT THE REOPENING OF THE ASSESSMENT WAS NOT I N ACCORDANCE WITH LAW AND THE ORDER PASSED U/S 147 MAY BE QUASHE D. [II] CAPITAL GAINS: (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) ERRED IN CONFIRMING THAT SURPLUS ON TRANSFER OF LAND WAS LIA BLE TO TAX WHEN THE LAND HAD NO COST AND IT WAS NOT CAPABLE OF DETERMIN ING COST. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITION IS REQUIRED TO BE DELETED. (3) WITHOUT PREJUDICE TO THE ABOVE THE LEARNED COM MISSIONER OF INCOME-TAX (APPEALS) ERRED IN NOT DEALING WITH GROU ND NO.II(3) AS UNDER:- WITHOUT PREJUDICE TO THE ABOVE DEDUCTION OF INDEX ED VALUE OF FAIR MARKET VALUE AS ON 1-04-81 HAS BEEN DETERMI NED AT LOW FIGURE. [III] MISCELLANEOUS: (1) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS ) OUGHT TO HAVE DELETED INTEREST U/S 234A. (2) THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OU GHT TO HAVE DELETED INTEREST U/S 234B . ITA NO.526/AHD/2008 2 2 ADVERTING FIRST TO GROUND NO.I IN THE APPEAL FAC TS IN BRIEF AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOM E OF RS.41 101/- AND LOSS OF RS.1 97 220/- DUE TO AGRICULTURE FILED ON 31.8.2005 BY THE ASSESSEE WAS PROCESSED ON 19.12.2005 U/S 143(1 ) OF THE INCOME-TAX ACT 1961[HEREINAFTER REFERRED TO AS THE ACT].ON VERIFICATION OF THE RETURN THE ASSESSING OFFICER[A O IN SHORT] FOUND THAT THE ASSESSEE HAD SOLD 1276 SQ. MTRS. OF LAND F OR RS.26 89 782/- AND DID NOT OFFER ANY LONG TERM CAPITAL GAIN[LTCG] FOR TAXATION. ON THE SAME ISSUE IN A.Y.2003-04 CAPITAL GAIN TAX-WAS LEVIED ON THE ASSESSEE ON SALE OF SOME OTHER PLOTS IN THE SAME AR EA. THE AO ALSO OBSERVED THAT THE LAND IN QUESTION FOR THIS YEAR B ECAME THE PROPERTY OF THE ASSESSEE BEFORE 1981 AND THEREFORE PROVISIO NS OF SECTION 55(2)(B)(I) OF THE ACT WERE APPLICABLE. THE AO FURT HER NOTICED THAT IN A.Y.2003-04 THE FAIR MARKET VALUE OF THE LAND PER SQ. METER WAS TAKEN AS RS.72/- AND THE LAND UNDER QUESTION WAS IN THE VICINITY OF THE LAND SOLD IN A.Y.2002-03 AND ACCORDINGLY THE M ARKET VALUE OF RS.1276 SQ. MTR. OF LAND WHICH WAS SOLD BY THE ASSE SSEE AS ON 1/4/1981 WAS RS.91872/- AND THAT IS THE COST OF ACQ UISITION OF THE LAND AND THEREFORE THE INDEXED COST OF ACQUISITION AS ON DATE OF SALE IS RS.91872/- X 4.63 I.E. RS.4 25 367/- ONLY. ACCOR DINGLY THE AO OBSERVED THAT INCOME TO THE EXTENT OF RS.22 64 415/ - (RS.26 89 782/- MINUS RS.4 25 367/-) ESCAPED ASSESSMENT AND ISSUED A NOTICE U/S.148 OF THE ACT ON 2/11/2006 AFTER RECORDING TH E REASONS. A COPY OF THESE REASONS WAS ALSO SERVED UPON THE ASSESSEE. IN RESPONSE THE ASSESSEE SUBMITTED WRITTEN SUBMISSION VIDE LET TER DATED 9/12/2006 ON 19/12/2006 AND REQUESTED TO TREAT THE RETURN ALREADY FILED ON 31/8/2005 AS RETURN IN RESPONSE TO NOTICE U/S 148 OF THE ACT. HOWEVER THE ASSESSEE ALSO OBJECTED TO THE REOPENIN G PROCEEDINGS IN THE FOLLOWING TERMS:- ITA NO.526/AHD/2008 3 ALONG WITH THE RETURN OF INCOME FILED ON 31-8-2005 NOTE WAS ATTACHED AND MENTIONED AS NOTE FORMING PART OF RETURN OF INCOME . COPY OF THAT NOTE IS ENCLOSED FOR YOUR READY REFERENCE. IN THIS NOTE ARE GIVEN THE DETAILS OF SALES REALIZATION FROM VARIOUS PLOTS. IT ALSO GAVE DETAILS OF THE LAND WHICH WERE OCCUPANCY RIGHTS AND CAME TO THE ASSESSEE WITH OUT ANY COST AS HE WAS EARLIER ALWARA HOLDER. BASED ON THE ABOVE I HA D SHOWN THE RECEIPTS FROM SALE OF PLOTS AND GIVEN REASON WHY THEY WERE N OT TAXABLE. THIS WAS ALREADY ON RECORD WITH THE DEPARTMENT AND THE DEPAR TMENT CONSCIOUSLY TOOK A DECISION NOT TO PROCEED WITH ASSESSMENT U/S 143(3) OTHERWISE NOTICE U/S L43 (2) WOULD HAVE BEEN ISSUED BEFORE 3 18/2006. AS MENTIONED EARLIER THE DECISION CONSCIOUSLY TAKEN AFTER APPAR ENTLY CONCURRING WITH THE VIEW THAT THE SALE CONSIDERATION DID NOT ATTRACT AN Y TAX LIABILITY. THE REASONS FOR REOPENING OF THE ASSESSMENT SHOW THAT T HE DEPARTMENT HAS CHANGED THE OPINION ON THE BASIS OF FACTS WHICH ARE ALREADY ON RECORD AND THEREFORE THE REOPENING CAN NOT BE CONSIDERED TO B E VALID. 3 THE AO DID NOT PASS ANY SEPARATE ORDER ON THE AFO RESAID OBJECTIONS AND PROCEEDED WITH THE REASSESSMENT. IN HIS REASSESSMENT ORDER THE AO REJECTED THE ABOVE OBJEC TIOS WITH THE FOLLOWING OBSERVATIONS:- 4. I HAVE CAREFULLY GONE THROUGH THE ARGUMENTS MAD E BY THE ASSESSEE REGARDING RE-OPENING THE ASSESSMENT WHICH ARE NOT A CCEPTABLE AS PER THE FACTS OF THE CASE AS WELL AS ON MERITS. IT IS TO BE STATED THE COMPLETED ASSESSMENT CAN BE OPENED EITHER WHEN THERE IS OMISS ION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY AL L MATERIAL AND RELEVANT FACT OR EVEN IF THERE IS NO OMISSION OR FAILURE ON THE P ART OF THE ASSESSEE BUT THE INCOME IS DEEMED TO HAVE BEEN ESCAPED AS PER THE PR OVISIONS OF SECTION 147 OF THE ACT RELIANCE IS PLACED ON THE DECISION O F PHOOLCHAND BAJRANG LAL VS. ITO 2O3 ITR 456 WHEREIN THE HON'BLE SUPREME COURT HAS HELD THAT SINCE1 FOR THE PURPOSE OF REOPENING THE BELIEF IS THAT OF THE FTO THE SUFFICIENCY OF REASONS FOR FORMING THE BELIEF IS NO T FOR THE COURT TO JUDGE BUT IT IS OPEN TO AN ASSESSEE TO ESTABLISH THAT THERE I N FACT EXISTED NO BELIEF OR THAT BELIEF WAS NOT BONAFIDE. THE COURT CAN ONLY LO OK INTO THE REASONS TO THAT LIMITED EXTENT. 5. WITH RESPECT TO THE ARGUMENT THAT SINCE ALL THE INFORMATION WAS GIVEN IN THE RETURN IT IS TO BE STATED THAT AS DEL IVERED IN THE JUDGEMENT IN THE CASE OF RAKESH AGRAWAL VS. AC1T BY THE HON'BLE DELHI HIGH COURT THAT SECTION 147 OF THE ACT AS AMENDED WITH EFFECT FROM 0L.04 89 PROVIDES THAT IF THE AO HAS REASON TO BELIEVE THAT ANY INCOM E CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR HE MAY SUBJECT TO THE PROVISIONS OF SECTION 148 TO 153 ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPE D ASSESSMENT. THE COURT OBSERVED THAT THE SECTION NOT ONLY MERGES CLA USE (A) AND (B) OF THE PRE-AMENDED SECTION 147 OF THE ACT BUT ALSO BRINGS ABOUT A SIGNIFICANT ITA NO.526/AHD/2008 4 CHANGE IN THE PRELIMINARY REQUIREMENT OF CERTAIN MA NDATORY CONDITIONS BEFORE ASSESSMENT PROCEEDINGS COULD BE INITIATED UN DER THE OLD SECTION. THE HON'BLE COURT OBSERVED THAT IN THE AMENDED SECT ION THE ONLY CONDITION FOR ACTION NOW IS THAT THE AO SHOULD HAVE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT WHICH BELIEF CAN BE R EACHED IN ANY MANNER AND IS NOT QUALIFIED BY THE PROCEEDINGS OF F AILURE BY THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF MATERIAL FACTS AS CONTEMPLATED UNDER THE UN-AMENDED SECTION 147(A). THE HONBLE COURT ST ATED THE AO CAN NOW LEGITIMATELY REOPEN THE ASSESSMENT IN RESPECT OF AN INCOME WHICH HAS ESCAPED ASSESSMENT. IT WAS OBSERVED BY THE HONBLE COURT THAT UNDOUBTEDLY UNDER THE AMENDED SECTION POWER TO REO PEN ASSESSMENT IS MUCH WIDER AND CAN BE EXERCISED EVEN IF AN ASSESSEE HAD DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS. IN THE CASE OF CIT VS . ABAD FISHERIES 258 ITR 641 THE HONBLE KERALA HIGH COURT STATED THAT SO L ONG AS THE INGREDIENTS OF SECTION 147 ARE FULFILLED THE AO IS FREE TO INI TIATE PROCEEDINGS U/S 147 AND FAILURE TO TAKE STEPS U/S. 143(3) WILL NOT REND ER THE AO POWERLESS TO INITIATE ASSESSMENT PROCEEDINGS. 6. IN VIEW OF THE ABOVE TWO DECISIONS ALL THE ARGU MENTS OF THE ASSESSEE HAVE BECOME INVALID AND THERE IS NO CHANGE OF OPINION AND RESPECTFULLY FOLLOWING THE DIRECTIONS GIVEN IN THE CASE OF GKN DRIVESHAFT LTD. (2003) 259 ITR 19 THE OBJECTIONS RAISED BY TH E ASSESSEE FOR REOPENING OF THE ASSESSMENT HAS BEEN REJECTED. 4. ON APPEAL THE LD. CIT(A) REJECTED THE FIRST GR OUND RELATING TO REOPENING OF THE ASSESSMENT AND SUBMISSIONS OF THE ASSESSEE IN HIS LETTER DATED 10.10.2007 SEEKING A SPEAKING ORDER ON THE OBJECTIONS FILED IN LETTER DATED 9.12.2006 IN VIEW PROCEDURE L AID DOWN IN THE DECISIONS IN THE CASE OF GKN DRIVE SHAFTS[INDIA] LT D. 259 ITR 19(SC) AND GRDEN FINANCE LTD. 268 ITR 48(GUJ) WITH THE FOLLOWING OBSERVATIONS: 5.2 THE AO HAS OBSERVED IN PARA-3 OF THE ORDER THA T INCOME TO THE EXTENT OF RS.22 64 415/- HAS ESCAPED ASSESSMENT. TH E AO ISSUED NOTICE AFTER RECORDING REASONS WHICH WERE PROVIDED TO THE APPELLANT. IN RESPONSE TO THE AFORESAID NOTICE THE APPELLANT HAS FILED RE TURN OF INCOME. ACCORDING TO THE AO THE VALID CONDITIONS FOR VALID RE-OPENIN G HAV E BEEN SATISFIED AS THE APPELLANT WAS PROVIDED WITH COPY OF THE REASONS RECORDED FOR RE- OPENING AND THEREFORE THERE WAS NO CASE FOR ANY OB JECTION AGAINST THE VALID RE-OPENING. 5.3 I HAVE CONSIDERED THE FACTS OF THE CASE AS WELL AS THE RIVAL CONTENTIONS. I FIND THAT THE AO HAS RE-OPENED THE A SSESSMENT AFTER RECORDING REASONS WHICH WERE PROVIDED TO THE APPELL ANT. EVEN OTHERWISE ITA NO.526/AHD/2008 5 THE POWERS OF THE AO ARE AMPLITUDE. IT HAS BEEN HEL D IN CASE OF RAYMOND WOOLEN MILLS LTD. VS. ITO REPORTED IN 236 ITR 34 (S C) THAT IN DETERMINING AS TO WHETHER COMMENCEMENT OF RE-OPENING ASSESSMENT ARE VALID IT HAS ONLY TO BE SEEN WHETHER THERE WAS PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH DEPARTMENT COULD RE-OPEN THE CASE. IN VIEW OF THE AFORESAID FACTUAL AND LEGAL POSITION THE APPELLANT'S CONTENT ION THAT AO HAS ERRED IN RE-OPENING THE ASSESSMENT HAS NO MERIT IN IT. THE A PPELLANT'S GROUND NO.1 IS DISMISSED. 5. THE ASSESSEE IN HIS FIRST GROUND OF APPEAL BEFO RE US HAS DISPUTED THE AFORESAID FINDINGS OF THE LD. CIT(A). THEE LEARNED AR ON BEHALF OF THE ASSESSEE REITERATED THEIR SUBMISSI ONS BEFORE THE LD. CIT(A) AND CONTENDED THAT THE ASSESSEE HAD RAISED P RELIMINARY OBJECTIONS AGAINST REOPENING OF THE ASSESSMENT BEF ORE THE AO. THE AO WAS UNDER AN OBLIGATION TO FIRST DISPOSE OF THE PRELIMINARY OBJECTIONS RAISED BY THE ASSESSEE AND COULD NOT HAV E FRAMED THE RE- ASSESSMENT ORDER. IN SUPPORT THE LEARNED AR RELIED ON THE DECISIONS IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. VS. ITO [2003] 259 ITR 19 (SC) MGM EXPORTS VS. DCIT [2010] 23 DTR 356 (GUJ ) GARDEN FINANCE LTD. VS. CIT [2004] 268 ITR 48 (GUJ) ARVIND MILLS LTD. VS. ACWT [2004] 270 ITR 469 (GUJ) DELHI TOURISM & TRANS PORT DEVELOPMENT CORPORATION LTD. VS. ACIT [2004] 141 TA XMAN 361 (DELHI) KESHAV SHARES & STOCKS LTD. VS. ITO [2008] 11 DTR (DEL) 49 AND RAMILABEN RATILAL SHAH VS. CIT [2006] 282 ITR 1 76 (GUJ).THE LEARNED DR ON THE OTHER HAND SUPPORTED THE ORDER OF THE AO AND THE LD. CIT(A). 6 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH T HE FACTS OF THE CASE. THE ISSUE BEFORE US IS AS TO WHETHER THE AO COULD HAVE PROCEEDED WITH THE REASSESSMENT WITHOUT DISPOSING O F THE PRELIMINARY OBJECTIONS RAISED BY THE ASSESSEE IN HI S LETTER DATED 9.12.2006. IN THIS CONNECTION IN THE CASE OF GKN D RIVESHAFTS [2003] 259 ITR 19 THE HON'BLE APEX HAVE LAID DOWN AN ELABORATE PROC EDURE AS TO THE MANNER OF DEALING WITH OBJECTIONS RAISED AGAINST A NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT 1961 IN THE FOLLOWING WORDS: ITA NO.526/AHD/2008 6 'HOWEVER WE CLARIFY THAT WHEN A NOTICE UNDER SECTI ON 148 OF THE INCOME-TAX ACT IS ISSUED THE PROPER COURSE OF ACTION FOR THE NOTI CEE IS TO FILE A RETURN AND IF HE SO DESIRES TO SEEK REASONS FOR ISSUING NOTICES. THE A SSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIP T OF REASONS THE NOTICEE IS ENTITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE A ND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. IN THE INSTANT CASE AS THE REASONS HAVE BEEN DISCLOSED IN THESE PROCEEDINGS T HE ASSESSING OFFICER HAS TO DISPOSE OF THE OBJECTIONS IF FILED BY PASSING A S PEAKING ORDER BEFORE PROCEEDING WITH THE ASSESSMENT IN RESPECT OF THE ABOVESAID FIV E ASSESSMENT YEARS.' 6.1 IN A SUBSEQUENT DECISION IN THE CASE OF GARDEN FINANCE LTD. V. CIT (ASST.) [2004] 268 ITR 48 (GUJ) THE EFFECT OF THE SUPREME COURT DECISION IN THE CASE OF GKN DRIVESHAFTS [2003] 259 ITR 19 CAME UP FOR CONSIDERATION AND BY A MAJORITY OPINION IT WAS LAID DOWN BY THE HONBLE C OURT : 'WHAT THE SUPREME COURT HAS NOW DONE IN THE GKN DRI VESHAFTS (INDIA) LTD.'S CASE [2003] 259 ITR 19 IS NOT TO WHITTLE DOWN THE PRINCIPLE LAID DOWN BY THE CONSTITUTION BENCH OF THE APEX COURT IN CALCUTTA DI SCOUNT CO. LTD. CASE [1961] 41 ITR 191 BUT TO REQUIRE THE ASSESSEE FIRST TO LODGE PRELIMI NARY OBJECTION BEFORE THE ASSESSING OFFICER WHO IS BOUND TO DECIDE THE PRELIM INARY OBJECTIONS TO ISSUANCE OF THE REASSESSMENT NOTICE BY PASSING A SPEAKING OR DER AND THEREFORE IF SUCH ORDER ON THE PRELIMINARY OBJECTIONS IS STILL AGAINS T THE ASSESSEE THE ASSESSEE WILL GET AN OPPORTUNITY TO CHALLENGE THE SAME BY FILING A WRIT PETITION SO THAT HE DOES NOT HAVE TO WAIT TILL COMPLETION OF THE REASSESSMEN T PROCEEDINGS WHICH WOULD HAVE ENTAILED THE LIABILITY TO PAY TAX AND INTEREST ON REASSESSMENT AND ALSO TO GO THROUGH THE GAMUT OF APPEAL THE SECOND APPEAL BEFO RE INCOME-TAX APPELLATE TRIBUNAL AND THEN REFERENCE/TAX APPEAL TO THE HIGH COURT. VIEWED IN THIS LIGHT IT APPEARS TO ME THAT THE RIG OUR OF AVAILING OF THE ALTERNATIVE REMEDY BEFORE THE ASSESSING OFFICER FOR OBJECTING T O THE REASSESSMENT NOTICE UNDER SECTION 148 HAS BEEN CONSIDERABLY SOFTENED BY THE APEX COURT IN GKN DRIVESHAFTS (INDIA) LTD.'S CASE [2003] 259 ITR 19 IN THE YEAR 2003. IN MY VIEW THEREFORE THE GKN DRIVESHAFTS (INDIA) LTD. 'S CASE [2003] 259 ITR 19 DOES NOT RUN COUNTER TO THE CALCUTTA DISCOUNT CO. LTD. CASE [1961] 41 ITR 191 (SC) BUT IT MERELY PROVIDES FOR CHALLENGE TO THE REASSESSMENT N OTICE IN TWO STAGES THAT IS (I) RAISING PRELIMINARY OBJECTIONS BEFORE THE ASSES SING OFFICER AND IN CASE OF FAILURE BEFORE THE ASSESSING OFFICER; (II) CHALLENGING THE SPEAKING ORDER OF THE ASSESSIN G OFFICER UNDER SECTION 148 OF THE ACT.' 6.2 HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF ARVIND MILLS LTD. (SUPRA) WHILE FOLLOWING THE AFORESAID DECISION S CONCLUDED THAT ONCE THE SUPREME COURT HAD STATED THAT THE AO WAS B OUND TO DISPOSE OF THE ITA NO.526/AHD/2008 7 OBJECTIONS BY PASSING A SPEAKING ORDER IT WAS NOT OPEN TO THE AUTHORITIES TO CONTEND THAT IN THE ABSENCE OF ANY PROVISION IN THE ACT THE AUTHORITIES COULD NOT HAVE PASSED A SPEAKING ORDER. HONBLE DELHI HIGH CO URT IN THE CASE OF DELHI TOURISM & TRANSPORT DEVELOPMENT CORPORATION LTD.(SU PRA) WHILE RELYING UPON THE AFORESAID DECISION OF THE HONBLE APEX COURT IN GKN DRIVESHARFTS (INDIA) LTD.(SUPRA) DIRECTED TO FOLLOW THE PROCEDURE LAID DOWN BY THE HONBLE APEX COURT AND PASS A SPEAKING ORDER BEFORE PASSING THE ASSESS MENT ORDER. 6.3 WHILE ADJUDICATING A SIMILAR ISSUE HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE OF MGM EXPORTS VS. DCIT [2010] 23 DTR 356 (GUJ) OBSERVED AS UNDER:- APPLYING THE AFORESAID SETTLED LEGAL POSITION TO T HE FACTS OF THE CASE IT IS APPARENT THAT THE ACTION OF THE RESPONDENT AUTHORIT Y IN FRAMING THE REASSESSMENT ORDER WITHOUT FIRST DISPOSING OF THE PRELIMINARY OBJECTIONS RAISED BY THE PETITIONER CANNOT BE SUSTAINED. ACCO RDINGLY THE REASSESS- MENT ORDER DATED DECEMBER 16 2008 IS HEREBY QUASHE D AND SET ASIDE AND THE RESPONDENT AUTHORITY SHALL DISPOSE OF THE P RELIMINARY OBJECTIONS BY PASSING A SPEAKING ORDER AND ONLY THEREAFTER PROCEE D WITH THE REASSESS- MENT PROCEEDINGS IN ACCORDANCE WITH LAW. CONSIDERIN G THE FACT THAT THE NORMAL PERIOD OF LIMITATION FOR FRAMING REASSESSME NT PURSUANT TO NOTICE DATED MARCH 3 2008 ISSUED UNDER SECTION 148 OF TH E ACT HAS ALREADY EXPIRED ON DECEMBER 31 2008 IN THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE IT WOULD SERVE THE ENDS OF JUSTICE IF THE RESPONDENT AUTHORITY IS DIRECTED TO ABIDE BY THE FOLLOWING SCHEDULE : (I) THE RESPONDENT AUTHORITY SHALL DISPOSE OF THE P RELIMINARY OBJECTIONS RAISED BY THE PETITIONER WITHIN A PERIOD OF 4 (FOUR ) WEEKS FROM BY PASSING A SPEAKING ORDER IN ACCORDANCE WITH LAW; (II) THEREAFTER THE RESPONDENT AUTHORITY SHALL UND ERTAKE REASSESSMENT PROCEEDINGS IF NECESSARY AND SHALL COMPLETE THE S AME WITHIN A PERIOD OF 4 (FOUR) WEEKS THEREAFTER I.E. THE DATE OF DISPOS AL OF THE PRELIMINARY OBJEC- TIONS; (III) NO EXTENSION OF TIME SHALL BE SOUGHT FOR BY E ITHER SIDE IN THE FACT SITUATION OF THE PRESENT CASE; (IV) THE AFORESAID SCHEDULE SHALL NOT PRECLUDE THE RIGHTS OF THE PETITIONER TO CHALLENGE THE ORDER DISPOSING OF THE PRELIMINARY OBJECTIONS IF LIE SAID ORDER IS REQUIRED TO BE SO CHALLENGED. ITA NO.526/AHD/2008 8 6.4 THE POSITION IN LAW IS THUS WELL SETTLED. AFTER A NOTICE FOR REASSESSMENT HAS BEEN ISSUED AN ASSESSEE IS REQUIRED TO FILE TH E RETURN AND SEEK REASONS FOR ISSUANCE OF SUCH NOTICE. THE ASSESSING OFFICER IS T HEN BOUND TO SUPPLY THE REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF REA SONS THE ASSESSEE IS ENTITLED TO FILE PRELIMINARY OBJECTIONS TO ISSUANCE OF NOTIC E AND THE ASSESSING OFFICER IS UNDER A MANDATE TO DISPOSE OF SUCH PRELIMINARY OBJE CTIONS BY PASSING A SPEAKING ORDER BEFORE PROCEEDING WITH THE ASSESSME NT IN RESPECT OF THE ASSESSMENT YEAR FOR WHICH SUCH NOTICE HAS BEEN ISSU ED. 7. IN VIEW OF ABOVE SETTLED LEGAL POSITION WE C ONSIDER IT FAIR AND APPROPRIATE TO VACATE THE FINDINGS OF THE LD. CIT(A ) AS ALSO SET ASIDE THE REASSESSMENT ORDER AND REMIT THE MATTER TO TH E FILE OF THE AO WITH THE DIRECTIONS TO FOLLOW THE PROCEDURE LAID DOWN BY TH E HONBLE APEX COURT REITERATED BY THE HONBLE JURISDICTIONAL HIGH COURT . THE AO SHALL DISPOSE OF THE PRELIMINARY OBJECTIONS BY PASSING A SPEAKING ORDER AND ONLY THEREAFTER PROCEED WITH THE REASSESSMENT IN ACCORDANCE WITH LAW. WI TH THESE OBSERVATIONS GROUND NO.1 IS DISPOSED OF. AS A COROLLARY THE OTHER GROU NDS RAISED IN THE APPEAL DO NOT SURVIVE FOR ADJUDICATION AT THIS STAGE AND ARE TH EREFORE TREATED AS INFRUCTUOUS. 10 IN THE RESULT APPEAL IS ALLOWED BUT FOR STATI STICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT TODAY ON 14-05- 2010 SD/- SD/- (T K SHARMA) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 14 -05-2010 COPY OF THE ORDER FORWARDED TO : 1. SHRI CHANDRASINH RAMSINH PARMAR PARMAR WADI SA YLI ROAD SILVASSA DADRA & NAGAR HAVELI. 2. THE ITO WARD-1 VAPI 3. CIT CONCERNED ITA NO.526/AHD/2008 9 4. CIT(A)-VALSAD 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD ITA NO.526/AHD/2008 10