PRARAMBH CAPITAL & HOLDING P. LD, MUMBAI v. ACIT CIR 2(3), MUMBAI

ITA 5842/MUM/2010 | 1993-1994
Pronouncement Date: 27-01-2011 | Result: Allowed

Appeal Details

RSA Number 584219914 RSA 2010
Bench Mumbai
Appeal Number ITA 5842/MUM/2010
Duration Of Justice 6 month(s) 7 day(s)
Appellant PRARAMBH CAPITAL & HOLDING P. LD, MUMBAI
Respondent ACIT CIR 2(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 27-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 27-01-2011
Date Of Final Hearing 19-01-2011
Next Hearing Date 19-01-2011
Assessment Year 1993-1994
Appeal Filed On 20-07-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH MUMBAI. [ BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER ] I.T.A NO.5842/ MUM/2010 ASSESSMENT YEAR: 1993-94 PRARAMBH CAPITAL & HOLDING P. LTD. .. APPELLANT 366 SVP ROAD PRATHANA SAMAJ MUMBAI-400 004 PA NO.AAACP 2341 F VS ACIT CIRCLE 2(3) . RESPONDEN T MUMBAI. APPEARANCES: SATISH R. MODY FOR THE APPELLANT SATBIR SINGH FOR THE RESPONDENT O R D E R 1. BY WAY OF THIS APPEAL THE ASSESSEE HAS CALLED INTO QUESTION CORRECTNESS OF CIT(A)S ORDER DATED 24 TH MAY 2010 IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 FOR THE ASSESSMENT Y EAR 1993-94. 2. ONE OF THE GRIEVANCES RAISED BY THE ASSESSEE WHICH GO ES TO THE ROOT OF THE MATTER IS THAT THE VERY INITIATION OF REASSESSMENT PROC EEDINGS WAS BAD IN LAW. I TAKE UP THIS GRIEVANCE FIRST. 3. SHRI SATISH MODY LEARNED COUNSEL FOR THE ASSESSEE SUBM ITS THAT IN THE PRESENT CASE THE ASSESSING OFFICER HAS NOT RECORDED ANY REASONS FOR REOPENING THE ASSESSMENT PROCEEDINGS AND THAT IN THE ABSENCE OF SUCH RE ASONS BEING SPECIFICALLY RECORDED THE ASSESSING OFFICER IS DENUDE OF THE POWERS T O INITIATE REASSESSMENT 2 PROCEEDINGS. IT IS ALSO SUBMITTED THAT ON THE LAST OCCA SION OF HEARING LEARNED DEPARTMENTAL REPRESENTATIVE WAS SPECIFICALLY REQUESTED TO PRODUCE THE REASONS OF REOPENING THE ASSESSMENT IF ANY RECORDED BY THE ASSESSING OFFICER BUT NO SUCH REASONS HAVE BEEN PRODUCED BY THE LEARNED D.R. IN RE SPONSE TO THE SUBMISSIONS SO MADE BY THE LEARNED COUNSEL SHRI SATBIR SINGH LD D .R. SUBMITS THAT THE REASONS FOR REOPENING THE ASSESSMENT HAVE BEEN DULY RECORDED IN THE COURSE OF ASSESSMENT PROCEEDINGS IN THE ASSESSMENT YEAR 1994-95. A COPY OF O FFICE NOTE APPENDED TO THE ASSESSMENT ORDER FOR THE A.Y. 1993-94 HAS BEEN PLACED ON RECORD. IT IS SUBMITTED THAT THE REASONS SO RECORDED ARE SUFFICIENT TO INITIATE REASSESSMENT PROCEEDINGS. HE HOWEVER FAIRLY ACCEPTS THAT NO OTHER REASONS OTHER TH AN THE REASONS SO NOTED DURING THE COURSE OF ASSESSMENT FOR A.Y. 1994-95 HAVE BEEN RECO RDED. 4. I HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE M ATERIAL ON RECORD AND DULY CONSIDERED THE FACTUAL MATRIX OF THE CASE AS ALSO THE A PPLICABLE LEGAL POSITION. 5. I FIND THAT THE OFFICE NOTE APPENDED TO THE ASSESSME NT ORDER FOR THE ASSESSMENT YEAR 1994-95 ON WHICH RELIANCE HAS BEEN PLACE D BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS AS FOLLOWS:- THE DEVELOPMENT CO.OP. BANK LTD NOW DEVELOPMENT CRE DIT BANK LTD. NESBIT ROAD BR VIDE THEIR LETTER DT.3.1.97 HAS STA TED THAT THERE ARE NO PERSONS VIZ. EVELIYAR CODIN OPERATING THE ACCOUNT W ITH THEM HAVING ISSUED CHEQUE BEARING NO.304657 DT.20.8.1992 FROM W HOM THE ASSESSEE COMPANY HAS STATED TO HAVE RECEIVED APPLICATION FOR 2% NON-CUMULATIVE REDEEMABLE PREFERENCE SHARES OF 100 EACH FOR 21600 SHARES WORTH ` . 21 60 000. THEREFORE THERE IS REASON TO BELIEVE THA T THE INVESTMENT IN THE CAPITAL ACCOUNT DO NOT BELONG TO THE PERSONS FRO M WHOM THE APPLICATION IS ALLEGED TO HAVE BEEN RECEIVED. HENCE THE CREDIT IN THE FORM OF INVESTMENT IN SHARE REQUIRES VERIFICATION. 6. IN MY CONSIDERED VIEW THIS OFFICE NOTE CANNOT BE C ONSTRUED AS REASONS RECORDED FOR REOPENING THE ASSESSMENT PROCEEDINGS FOR T HE ASSESSMENT YEAR 1993- 94 WHICH IS IN APPEAL BEFORE THE TRIBUNAL. THIS OFFI CE NOTE CAN AT BEST BE CONSIDERED AS OBSERVATION MADE BY THE AO MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 1994-95 BUT IT CANNOT BE TREAT ED AS RECORDING OF REASONS BY THE AO FOR REOPENING THE ASSESSMENT FOR THE ASSESSMENT YEA R 1993-94. IT ONLY REFERS THE NEED OF FURTHER VERIFICATION BUT IT DOES NOT NOW HERE INDICATE THAT INCOME HAS 3 ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR 1993-94 . IN MY HUMBLE UNDERTAKING AS LEARNED COUNSEL FOR THE ASSESSEE RIGHTLY CONTENDS THE VERY INITIATION OF REASSESSMENT PROCEEDINGS IS UNSUSTAINABLE IN LAW FOR THE REASON THAT NO REASONS FOR REOPENING THE ASSESSMENT AS IS THE PRECONDITION U/S.148(2) FOR ISSUANCE OF NOTICE U/S.148 HAVE BEEN RECORDED BY THE AO. THE VERY ISSUAN CE OF NOTICE U/S.148 IS THUS BAD IN LAW. I THEREFORE QUASH THE IMPUGNED REASSESSME NT PROCEEDINGS. 7. AS THE REASSESSMENT PROCEEDINGS ITSELF HAVE BEEN QUASHED I DO NOT SEE THE NEED TO ADDRESS THE ISSUES RAISED BY THE ASSESSEE O N MERITS OF THE ADDITION AS THE SAME DO NOT SURVIVE. 8. IN THE RESULT THE APPEAL STANDS ALLOWED. PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARI NG I.E. ON 27 TH JANUARY 2011 SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI DATED 27 TH JANUARY 2011 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS) 9 MUMBAI 4. COMMISSIONER OF INCOME TAX MC-5 MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH SMC MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI 4 5