DCIT, New Delhi v. M/s Digital Radio (Kol) Broadcasting Ltd.,, New Delhi

ITA 5362/DEL/2013 | 2005-2006
Pronouncement Date: 04-04-2014 | Result: Dismissed

Appeal Details

RSA Number 536220114 RSA 2013
Assessee PAN AABCR7863G
Bench Delhi
Appeal Number ITA 5362/DEL/2013
Duration Of Justice 6 month(s) 3 day(s)
Appellant DCIT, New Delhi
Respondent M/s Digital Radio (Kol) Broadcasting Ltd.,, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 04-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 04-04-2014
Assessment Year 2005-2006
Appeal Filed On 01-10-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : B : NEW DELHI BEFORE SHRI G.D. AGRAWAL VICE PRESIDENT AND SHRI A.D. JAIN JUDICIAL MEMBER ITA NO.5362/DEL/2013 ASSESSMENT YEAR : 2005-06 DCIT CIRCLE 10 (1) NEW DELHI. VS. DIGITAL RADIO (KOL) BROADCASTING LTD. 401 DAKHA HOUSE 18/17 WEA KAROL BAGH NEW DELHI. PAN : AABCR7863G ITA NO. 5363 /DEL/201 3 ASSESSMENT YEAR : 2005-06 DCIT CIRCLE 10 (1) NEW DELHI. VS. DIGITAL RADIO (DEL) BROADCASTING LTD. 401 DAKHA HOUSE 18/17 WEA KAROL BAGH NEW DELHI. PAN : AABCR7864B ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI O.P. SAPRA ADVOCATE DEPARTMENT BY : S MT. NIDHI SRIVASTAVA SR. DR ORDER PER A.D. JAIN JUDICIAL MEMBER: THESE ARE DEPARTMENTS APPEALS FOR ASSESSMENT YEAR 2005-06 IN THE CASE OF TWO INDEPENDENT ASSESSES AGAINST THE ORDERS DATED 30.07.2013 PASSED BY THE CIT (A)-V NEW DELHI. THE FACTS IN BOTH THESE CASES BEING ITA NOS.5362 & 5363/DEL/2013 2 MUTATIS MUTANDIS EXACTLY SIMILAR BOTH THESE APPEALS ARE BEING DISPOSED OF BY THIS COMPOSITE ORDER. THE FACTS FOR FACILITY ARE BEING TAKEN FROM ITA NO.5362/DEL/2013. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS:- I) WHETHER THE CIT(A) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW WAS JUSTIFIED IN CANCELLING THE ASSESSMEN T FRAMED U/ S 147/148 OF THE INCOME TAX ACT 1961? II) WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CAS E THE CIT(A) WAS CORRECT IN LAW IN HOLDING THAT VERY BASIS OF ISSUA NCE OF NOTICE U/ S 148 WAS ABSENT AND THERE WAS NO ESCAPEMENT OF INCOME PROVISION OF SECTION 147 WAS NOT APPLICABLE WITHOUT CONSIDERING THA T THE ASSESSEE HAD ITSELF ADMITTED WRONG CLAIM IN THE RETURN ON ACCOUN T OF LICENSE FEE AND HAD FILED APPLICATION U/ S 154 OF THE ACT TO WITHDRA W THE CLAIM? III) WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW THE CIT(A) WAS CORRECT IN HOLDING THAT FILING OF RECTIFI CATION APPLICATION U/ S 154 OF THE I.T.ACT 1961 MAKES THE VERY BASIS OF ISSUANCE OF NOTICE U/ S 148 NON-EXISTENT EVEN THOUGH THE MISTAKE DOES NOT COME IN THE AMBIT OF SECTION 154 OF THE I.T.ACT 1961? IV) WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW THE CIT(A) WAS CORRECT IN EQUATING THE FACTS OF THE PRES ENT CASE WHERE THE ASSESSEE HAD ONLY FILED APPLICATION U/ S 154 OF TH E ACT WITH THE FACTS OF DIGITAL RADIO(MUMBAI) BROADCASTING LTD WHETH ER ORDER U/ S 143(3) WAS PASSED WHILE DECIDING THE VALIDITY OF PRO CEEDINGS U/ S 147 OF THE ACT INITIATED IN THIS CASE? 3. THE RETURN OF THE ASSESSEE FOR THE YEAR UNDER CONSIDE RATION WAS PROCESSED U/S 143 (1) OF THE ACT. SUBSEQUENTLY IT WAS NOTICED THAT THE ASSESSEE HAD CLAIMED DEDUCTION AS REVENUE EXPENDITURE BY MAKING A DEBIT ENTRY IN THE PROFIT & LOSS ACCOUNT UNDER THE HEAD LI CENCE FEE. THE ASSESSING OFFICER OBSERVED THAT THE LICENCE FEE WAS REQUI RED TO BE PROPORTIONATELY ALLOWED OVER THE PERIOD OF THE LICE NCE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 35ABB OF THE IT ACT AND THIS HAD NOT BEEN DONE AND THEREBY EXCESS ALLOWANCE OF EXPENDITURE TOWARDS LICENC E FEE HAD RESULTED IN OVER-ASSESSMENT OF LOSS. IT WAS IN ACCORDANCE WITH THESE OB SERVATIONS THAT THE ASSESSMENT OF THE ASSESSEE FOR BOTH THE YEARS WAS SOUGHT T O BE REOPENED BY ISSUING NOTICES U/S 148 OF THE ACT. THE ASSESSE E RESPONDED BY SUBMITTING THAT IT HAD VOLUNTARILY FILED RECTIFICATI ON APPLICATION U/S 154 ITA NOS.5362 & 5363/DEL/2013 3 WHEREBY THE LICENCE FEE AS ORIGINALLY CLAIMED AS DED UCTION WAS OFFERED TO BE REDUCED RESULTING IN REDUCTION OF LOSSES AS ASSESSED; THAT THE APPLICATION HAD NOT BEEN REJECTED; AND THAT THE ASSESSEE HAD THUS VOLUNTARILY GOT REDUCED THE LOSS PROPOSED TO BE REDUCED VIDE THE SAID R ECTIFICATION APPLICATION. 4. THE ASSESSING OFFICER HOWEVER DID NOT FIND THE REP LY OF THE ASSESSEE TO BE ACCEPTABLE. IT WAS HELD THAT AS PER GKN DRIVE SHAFTS INDIA VS. ITO 259 ITR 19 (SC) THE ASSESSEE CAN ONLY FILE OBJECTION AFTE R FILING THE RETURN AND AFTER OBTAINING THE REASONS RECORDED WHEREAS IN THE P RESENT CASE THE ASSESSEE HAD FILED THE OBJECTIONS WITHOUT FILING THE RET URN RENDERING THE OBJECTION RAISED BY THE ASSESSEE UNTENABLE IN LAW. IT WA S OBSERVED THAT THE PROVISIONS OF SECTION 154 OF THE ACT COME INTO PLAY O NLY WHEN THERE IS A MISTAKE APPARENT FROM RECORD WHICH WAS NOT SO IN THE PRESENT CASES. 5. BY VIRTUE OF THE IMPUGNED ORDERS THE LD. CIT (A) CANCELLED THE ASSESSMENT ORDERS MADE IN CONSEQUENCE OF THE REOPENING NO TICES HOLDING SUCH REOPENING TO BE INVALID IN BOTH THE CASES. 6. THE LD. DR HAS CONTENDED THAT THE LD. CIT (A) HAS ERRED IN CANCELLING THE ASSESSMENT CORRECTLY FRAMED U/S 147/148 OF THE ACT; THAT THE LD. CIT (A) HAS ERRED IN HOLDING THAT THE VERY BASIS OF ISSUANCE OF NOTICE U/S 148 WAS ABSENT AND THERE WAS NO ESCAPEMENT OF INCOME AND THAT SO THE PROVISIONS OF SECTION 147 OF THE ACT WERE NOT APPLICABLE THAT WHILE DOING SO THE LD. CIT (A) HAS FAILED TO CONSIDER THE PATENT FACT THAT THE A SSESSE HAD ITSELF ADMITTED THAT THE WRONG CLAIMS HAVING BEEN MADE IN THE RETURN ON ACCOUNT OF LICENCE FEE AND THAT APPLICATION U/S 154 OF THE ACT HAD BEEN FILED TO WITHDRAW THE CLAIMS; THAT THE LD. CIT (A) WENT WRONG IN HOLDING T HAT THE FACTUM OF THE FILING OF THE RECTIFICATION APPLICATION MADE THE VERY BASIS OF ISSUANCE OF NOTICES U/S 148 OF THE ACT NON-EXISTENT; THAT WHILE DOING SO THE LD. CIT (A) FAILED TO CONSIDER THAT SUCH MISTAKE DOES NOT FALL UNDER THE PR OVISIONS OF SECTION 154 OF THE ACT; THAT THE LD. CIT (A) ERRED IN DRAWING P ARITY OF THE PRESENT CASES ITA NOS.5362 & 5363/DEL/2013 4 WITH THE FACTS OF DIGITAL RADIO (MUMBAI) BROADCASTI NG LTD.; AND THAT THEREFORE THE ORDERS PASSED BY THE LD. CIT (A) IN BOT H THE CASES BE SET ASIDE/QUASHED BY ALLOWING THE APPEALS FILED BY THE DE PARTMENT. 7. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND HAS PLACED STRONG RELIANCE ON THE IMPUGNED ORDERS CONTENDING THAT THE VERY FACT THAT THE ASSESSES HAD FILED THE RECTIFICATION APPLICATIONS BEFORE THE FILING OF THE RETURNS OF INCOME SHOWED THE BONA FIDES OF THE ASSESSEES ; THAT BY VIRTUE OF THESE APPLICATIONS THE ASSESSEE HAD THEMSELVES VOLUNTARILY REDUCED THE LOSS SOUGHT TO BE REDUCED BY REOPENING THE ASSESSMENTS; THAT T HE RECTIFICATION APPLICATIONS HAVE NOT HITHERTO BEEN REJECTED TILL DA TE; THAT THE LD. CIT (A) HAS DULY TAKEN INTO CONSIDERATION ALL THESE FACTS WHILE R IGHTLY DECIDING THIS MATTER IN FAVOUR OF THE ASSESSEE HOLDING THE REOPENING IN BO TH THE CASES AS INVALID AND CANCELLING THE ASSESSMENT ORDERS PASSED IN CONSEQUENCE THEREOF. 8. IT REMAINS UNDISPUTED EVEN AS PER THE ASSESSMENT ORDER THAT THE LOSS SOUGHT TO BE REDUCED BY REOPENING THE ASSESSMENTS OF BOTH THE ASSESSES WAS VOLUNTARILY REDUCED BY THEM BY FILING THE RECTIF ICATION APPLICATION. NOW AS PER THE PROVISIONS OF SECTION 155 (8) OF THE ACT A N INCOME-TAX AUTHORITY MUST PASS AN ORDER ON A RECTIFICATION APPLICATION WITH IN A PERIOD OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH SUCH APPLIC ATION IS RECEIVED BY IT. IN CASE IT IS NOT SO DONE THE AMENDMENT SOUGHT THROUG H THE RECTIFICATION APPLICATION SHALL BE DEEMED TO HAVE BEEN MADE. 9. THEN THE ASSESSING OFFICER WENT ENTIRELY WRONG IN O BSERVING IN THE ASSESSMENT ORDERS THAT THE ASSESSES COULD NOT HAVE FILED THE RECTIFICATION APPLICATIONS BEFORE FILING THE RETURNS OF INCOME. GK N DRIVE SHAFTS (SUPRA) WHICH THE ASSESSING OFFICER SOUGHT TO RELY ON NOWHERE L AYS DOWN ANY SUCH PROPOSITION. AS RIGHTLY NOTED BY THE LD. CIT (A) U/S 154 (7) OF THE ACT THE ASSESSEES WERE ENTITLED TO MOVE SUCH RECTIFICATION APPLIC ATIONS WHICH WERE FILED WELL WITHIN THE LIMITATION PRESCRIBED. IN FACT THE ASSESSES BY FILING THE RECTIFICATION APPLICATIONS THEMSELVES VOLUNTARILY RED UCED THE LOSS PROPOSED ITA NOS.5362 & 5363/DEL/2013 5 TO BE REDUCED BY REOPENING THE ASSESSMENTS AND THIS BEIN G THE ONLY REASON RECORDED FOR REOPENING THE COMPLETED ASSESSMENTS AFTER SUCH REDUCTION OF LOSS THERE REMAINED NOTHING TO VALIDATE THE REOPENIN G. THE APPLICATIONS IT IS PERTINENT WERE FILED PRIOR TO THE ISSUANCE OF NOTICES U/S 148 OF THE ACT. IN THE ASSESSMENT ORDERS THE ASSESSING OFFICER HIMSELF ACKNOWLEDGED THE FACTUM OF SUCH APPLICATIONS HAVING BEEN FILED. 10. THE LD. CIT (A) HAS DULY TAKEN INTO CONSIDERATION ALL THE ABOVE FACTS AND WE DO NOT FIND ANY ERROR IN HIS ACTION OF HOLDIN G THE REOPENING IN BOTH THE CASES TO BE INVALID AND CANCELLING THE ASSESSMENTS MAD E IN CONSEQUENCE THEREOF. WHILE DOING SO THE LD. CIT (A) HAS CORRECTL Y APPRECIATED THAT IN THE CASE OF DIGITAL RADIO (MUMBAI) BROADCASTING LTD. T HE ABOVE POSITION HAD BEEN TAKEN INTO CONSIDERATION BY THE ASSESSING OFFICER. 11. IN VIEW OF THE ABOVE THE GRIEVANCE SOUGHT TO BE RAISED BY THE DEPARTMENT IN BOTH THESE CASES IS REJECTED BEING SHORN O F MERITS UPHOLDING THE WELL REASONED ORDER PASSED BY THE LD. CIT (A). 12. IN THE RESULT BOTH THE APPEALS FILED BY THE DEPA RTMENT ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 04.04.201 4. SD/- SD/- [ G.D. AGRAWAL ] [A.D. JAIN] VICE PRESIDENT JUDICIAL MEMBER DATED 4 TH APRIL 2014. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR ITAT AR ITAT NEW DELHI.