VIKAS GANPAT MANE, KALYAN v. ITO WARD (3)(2), KALYAN

ITA 7492/MUM/2018 | 2008-2009
Pronouncement Date: 25-03-2021 | Result: Allowed

Appeal Details

RSA Number 749219914 RSA 2018
Assessee PAN AKKPM4583C
Bench Mumbai
Appeal Number ITA 7492/MUM/2018
Duration Of Justice 2 year(s) 2 month(s) 27 day(s)
Appellant VIKAS GANPAT MANE, KALYAN
Respondent ITO WARD (3)(2), KALYAN
Appeal Type Income Tax Appeal
Pronouncement Date 25-03-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 25-03-2021
Assessment Year 2008-2009
Appeal Filed On 28-12-2018
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC MUMBAI BEFORE VIKAS AWASTHY JUDICIAL MEMBER . 749 1 / / 20 1 8 ( . . 20 07 - 08 ) ITA NO. 749 1 /MUM/ 20 1 8 (A.Y. 20 07 - 08 ) . 7492 / / 20 1 8 ( . . 200 8 - 09 ) ITA NO. 7492 /MUM/20 1 8 (A.Y. 200 8 - 09 ) . 7493 / / 20 18 ( . . 2009 - 10 ) ITA NO. 7493 /MUM/20 18 (A.Y. 2009 - 10 ) VIKAS GANPAT MANE D - 6 303 GAONDEVI NAGAR SHANKAR PAWSE ROAD KALYAN (EAST) 421 306 PAN: AKKPM4583C ...... / APPELLANT VS. ITO WARD (3)(2) IT OFFICE RANI MANSION 2 ND FLOOR KALYAN 421 301 ..... / RESPONDENT A SSESSEE BY : SHRI SUBRAMANIA N ADVOCATE REVENUE BY : SHRI SUSHIL MISHRA / DATE OF HEARING : 29 /12/2020 / DATE OF PRONOUNCEMENT : 25 /03/2021 / O RDER PER VIKAS AWASTHY J.M: THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 THANE ( IN SHORT THE CIT(A)) DATED 2 ITA NO.749 1 /MUM/2018(A.Y.2007 - 08) ITA NO.7492/MUM/2018(A.Y.2008 - 09) ITA NO.7493/MUM/2018(A.Y.2009 - 10) 21/09/2018 COMMON FOR THE ASSESSMENT YEARS 2007 - 08 2008 - 09 AND 2009 - 10. SINCE COMMON ISSUES ARE INVOLVED IN ALL THE THREE APPEALS THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THIS COMPOSITE ORDER. 2. FOR THE SAKE OF CONVENIE NCE THE RELEVANT FACTS ARE EXTRACTED FROM APPEAL IN ITA NO.7491/MUM/2018 FOR ASSESSMENT YEAR 2007 - 08. DURING THE SEARCH PROCEEDINGS IN THE CASE OF M/S. MAHASAGAR SECURITIES PVT. LTD. BELONGING TO MUKESH CHOKSHI GROUP THE NAME OF ASSESSEE WAS FOUND IN TH E ENTRIES OF BOGUS SHARE TRANSACTIONS . THE ASSESSEE WAS IDENTIFIED AS ONE OF THE BENEFICIAR Y FROM BOGUS SHARE TRANSACTIONS. CONSEQUENTLY ASSESSMENT IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2007 - 08 WAS REOPENED . 3. SHRI SUBRAMANIA N APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT 1961 ( IN SHORT THE ACT) FOR ASSESSMENT YEAR 2007 - 08 WAS ISSUED TO THE ASSESSEE ON 28/03/2013. THE ASSESSEE VIDE LETTER DATED 16/04/2013 REQUESTED THE AS SESSING OFFICER TO TREAT THE RETURN FILED ON 07/11/2007 AS RETURN FILED IN PURSUANCE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT. THERE AFTER THE ASSESSEE VIDE LETTER DATED 19/04/2013 FILED IN THE OFFICE OF INCOME TAX OFFICER ON 30/04/2013 REQUES TED FOR SUPPLYING COPY OF REASONS RECORDED FOR REOPENING. THE ASSESSING OFFICER WITHOUT PROVIDING COPY OF REASONS FOR REOPENING ISSUED NOTICE UNDER SECTION 143(2) TO THE ASSESSEE ON 09/07/2013. THEREAFTER THE ASSESSING OFFICER IN VIOLATION OF THE LAW LAI D DOWN BY HON'BLE SUPREME COURT OF INDIA IN THE CASE OF GKN DRIVE SHAFT (INDIA) LTD. VS. ITO 259 ITR 19 (SC) PROCEEDED TO COMPLETE THE ASSESSMENT AND PASSED THE ASSESSMENT ORDER DATED 25/03/2014 UNDER SECTION 143(3) R.W.S. 147 OF THE ACT MAKING ADDITION O F RS.61 479/ - ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARES. 3 ITA NO.749 1 /MUM/2018(A.Y.2007 - 08) ITA NO.7492/MUM/2018(A.Y.2008 - 09) ITA NO.7493/MUM/2018(A.Y.2009 - 10) AGGRIEVED BY THE ASSESSMENT ORDER THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) CHALLENGING THE VALIDITY OF REASSESSMENT PROCEEDINGS AS WELL AS ADDITION ON MERITS. THE ASSESSEE FILED WRITTE N SUBMISSIONS BEFORE THE CIT(A) ON 20/03/2018 CATEGORICALLY STATING THAT THE REASSESSMENT PROCEEDINGS HAVE BEEN COMPLETED WITHOUT FURNISHING COPY OF REASONS FOR REOPENING. T HE CIT(A) WHILE DISMISSING ASSESSEES GROUND CHALLENGING REOPENING OF ASSESSMENT FAILED TO TAKE NOTE OF THE SPECIFIC OBJECTION RAISED BY THE ASSESSEE AGAINST NON - FURNISHING OF REASONS FOR REOPENING. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NON - FURNISHING OF REASONS FOR REOPENING HAS JEOPARDISED ASSESSEES RIGHT TO FILE OBJECTIO NS AGAINST REOPENING OF ASSESSMENT. THE ASSESSING OFFICER COMPLETED REASSESSMENT IN TOTAL VIOLATION OF LAW LAID DOWN BY THE HONBLE APEX COURT. THE LD. COUNSEL FOR THE ASSESSEE IN SUPPORT OF HIS SUBMISSIONS PLACED RELIANCE ON THE FOLLOWING DECISIONS: (I) CI T VS. VIDESH SANCHAR NIGAM LTD. 340 ITR 66 (BOM) (II) NEW ERA SHIPPING LTD. VS. CIT 430 ITR 431(BOM) (III) CIT VS. FOMENTO RESORTS & HOTELS LTD. INCOME TAX APPEAL NO.71 OF 2006 DECIDED ON 27/11/2006(BOM - GOA BENCH) 4. PER CONTRA SHRI SUSHIL MISHRA REPRESENTING T HE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND PRAYED FOR DISMISSING THE APPEAL OF ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT CIT(A) HAS DISMISSED THE GROUNDS RAISED BY THE ASSESSEE CHALLENGING REOPENING OF ASSESSMENT AFTER CON SIDERING ALL THE SUBMISSIONS OF ASSESSEE INCLUDING ALLEGED NON - FURNISHING OF REASONS FOR REOPENING. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSMENT FOR ASSESSMENT YEAR 2007 - 08 WAS REOPENED AFTER RECORDING REASONS AND SEEKING APPROVAL OF THE RANGE HEAD. THE ASSESSEE NEVER OBJECTED TO REOPENING OF ASSESSMENT AND HAS PARTICIPATED IN THE ASSESSMENT PROCEEDINGS. 4 ITA NO.749 1 /MUM/2018(A.Y.2007 - 08) ITA NO.7492/MUM/2018(A.Y.2008 - 09) ITA NO.7493/MUM/2018(A.Y.2009 - 10) 5. BOTH SIDES HEARD. O RDERS OF AUTHORITIES BELOW EXAMINED AND THE DECISIONS ON WHICH LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE CONSIDERED. THE ASSESSEE IN APPEAL HAS RAISED EIGHT GROUNDS. IN GROUND NO.1 TO 6 OF THE APPEAL THE ASSESSEE HAS ASSAILED REOPENING OF ASSESSMENT. THE ASSESSEE IS CHALLENGING REOPENING PRIMARILY ON THE GROUND THAT REASON S RECORDED FOR REOPENING WERE NEVER FURNISHED TO THE ASSESSEE INSPITE OF SPECIFIC REQUEST MADE TO THE ASSESSING OFFICER AFTER RECEIVING NOTICE UNDER SECTION 148 OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS DRAWN ATTENTION OF THE BENCH TO THE REQUEST FOR PROVIDING COPY OF REASONS RECORDED FOR REOPENING DATED 19/04/2013 AT PAGE - 6 OF THE PAPER BOOK. A PERUSAL OF THE SAME SHOW THAT THE SAID LETTER BEARS THE ACKNOWLEDGEMENT STAMP FROM THE OFFICE OF ITO - WARD 3(2) KALYAN DATED 30/04/2013. OSTENSIBLY THE REASONS FOR REOPENING WERE NEVER FURNISHED TO THE ASSESSEE AND THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE ACT WAS COMPLETED. DURING FIRST APPELLATE PROCEEDINGS THE ASSESSEE RAISED OBJECTION AND FILED WRITTEN SUBMISSIONS BEFORE THE CIT(A) RAISIN G SPECIFIC PLEA THAT THE REASONS RECORDED FOR REOPENING WERE NOT FURNISHED TO THE ASSESSEE. NO MATERIAL HAS BEEN PLACED ON RECORD BY THE REVENUE TO REBUT THE CONTENTIONS OF THE ASSESSEE. A PERUSAL OF THE IMPUGNED ORDER SHOWS THAT THE CIT(A) HAS MADE A RE MARK IN PARA - 6 OF HIS ORDER THAT NECESSARY REASONS WERE RECORDED HOWEVER THE ASSESSEE HAS NOT OBJECTED. IT IS NOT EMANATING FROM THE IMPUGNED ORDER THAT THE REASONS RECORDED FOR REOPENING WERE FURNISHED TO THE ASSESSEE AT ANY STAGE . THE CIT(A) HAS SC UTTLED FROM COMMENTING ON THE SPECIFIC OBJECTION RAISED BY THE ASSESSEE AGAINST NON - FURNISHING OF REASONS RECORDED FOR REOPENING. NO EVIDENCE HAS BEEN FURNISHED BY THE REVENUE BEFORE THE TRIBUNAL EITHER TO SUBSTANTIATE THAT REASONS FOR REOPENING WERE EV ER PROVIDED TO THE ASSESSEE BEFORE PASSING ASSESSMENT ORDER. 6. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF GKN DRIVE SHAFT INDIA LTD VS. ITO (SUPRA) IN AN UNAMBIGUOUS MANNER LAID DOWN THE PROCEDURE WITH REGARD TO 5 ITA NO.749 1 /MUM/2018(A.Y.2007 - 08) ITA NO.7492/MUM/2018(A.Y.2008 - 09) ITA NO.7493/MUM/2018(A.Y.2009 - 10) FURNISHING REASONS RECORDED FOR REO PENING TO THE ASSESSEE AND THE RIGHT OF THE ASSESSEE TO RAISE OBJECTIONS ON SUCH REASONS. THE HON'BLE SUPREME COURT HAS FURTHER DIRECTED THAT THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE OBJECTIONS RAISED BY THE ASSESSEE BY PASSING A SPEAKING ORDER . B Y NOT FURNISHING REASONS FOR REOPENING TO THE ASSESSEE THE ASSESSING OFFICER HAS USURPED ASSESSEES VALUABLE RIGHT TO RAISE OBJECTIONS AGAINST REOPENING OF ASSESSMENT. THE HONBLE HIGH COURTS HAVE TIME AND AGAIN HELD THAT NON - FURNISHING OF REASONS REC ORDED FOR REOPENING TO THE ASSESSEE BY THE ASSESSING OFFICER VITIATES REOPENING PROCEEDING HENCE ARE LIABLE TO BE QUASHED. 7. IN THE CASE OF CIT VS. VIDESH SANCHAR NIGAM LTD. (SUPRA) THE HON'BLE JURISDICTIONAL HIGH COURT HELD THAT WHERE REASONS RECORDED FOR REOPENING OF ASSESSMENT WERE REPEATEDLY ASKED BY THE ASSESSEE AND WERE FURNISHED ONLY AFTER COMPLETION OF ASSESSMENT THE REASSESSMENT PROCEEDING ARE LI ABLE TO BE QUASHED. IN THE CASE OF FOMENTO RESORTS AND HOTELS LTD. (SUPRA) THE HON'BLE HIGH COURT HELD THAT IT IS MANDATORY FOR THE ASSESSING OFFICER TO FOLLOW THE PROCEDURE LAID IN GKN DRIVE SHAFT (INDIA) LTD. (SUPRA). F AILURE TO FOLLOW PROCEDURE REND ERS THE ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER ULTRA VIRES . SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF BAYER MATERIAL SCIEN C E PVT. LTD. VS DCIT REPORTED AS 382 ITR 333 (BOM.) AND IN THE CASE OF KSS PETRON PVT. LTD. VS. ASST. CIT IN INCOME TAX APPEAL NO. 224 OF 2014 DECIDED ON 03/10/2016. 8. IN THE PRESENT CASE I FIND THAT THE ASSESSEE AFTER RECEIPT OF NOTICE UNDER SECTION 148 HAS DULY COMPLIED WITH THE DIRECTIONS AND FURNISH ED RETURN OF INCOME IN RESPONSE T O THE SAID NOTICE. T HEREAFTER THE ASSESSEE ASKED THE ASSESSING OFFICER FOR FURNISHING REASONS RECORDED FOR REOPENING. THIS FACT HAS NOT BEEN REBUTTED BY THE DEPARTMENT EITHER BEFORE THE CIT(A) OR BEFORE THE TRIBUNAL. SINCE THE ASSESSING OFFI CER FAILED TO FURNISH REASONS RECORDED FOR REOPENING AND COMPLETE D THE 6 ITA NO.749 1 /MUM/2018(A.Y.2007 - 08) ITA NO.7492/MUM/2018(A.Y.2008 - 09) ITA NO.7493/MUM/2018(A.Y.2009 - 10) ASSESSMENT IN VIOLATION OF THE PROCEDURE LAID DOWN BY THE HONBLE APEX COURT THE ASSESSMENT ORDER IS WITHOUT JURISDICTION AND HENCE IS LIABLE TO BE QUASHED. SUBSEQUENT PROCEEDINGS ARISING FROM THE ASSESSMENT ORDER ARE VITIATED. CONSEQUENTLY THE IMPUGNED ORDER IS SET - ASIDE AND GROUND NO. 1 TO 6 OF APPEAL ARE ALLOWED. 9. SINCE ASSESSMENT ORDER HAS BEEN SET ASIDE GROUND NO.7 RAISED IN APPEAL ON MER ITS OF THE ADDITION HAS BECOME ACADEMIC THEREFORE IS NOT DELIBERATED UPON. 10. IN GROUND NO.8 OF APPEAL THE ASSESSEE HAS ASSAILED CHARGING OF INTEREST UNDER SECTION 234A 234B AND 234C OF THE ACT. AS ASSESSMENT ORDER HAS BEEN QUASHED THE ASSESSEE SU CCEEDS ON GROUND NO.8 AS WELL. 11. IN THE RESULT APPEAL FOR ASSESSMENT YEAR 2007 - 08 IS ALLOWED. ITA NO.7492 & 7493/MUM/ 2018: AYS.2008 - 09 AND 2009 - 10 : 12. BOTH SIDES ARE UNANIMOUS IN STATING THAT THE FACTS IN ASSESSMENT YEAR 2008 - 09 AND 2009 - 10 ARE P ARI - MATERIA TO FACTS IN ASSESSMENT YEAR 2007 - 08. THE ASSESSEE IN BOTH THESE APPEALS HAS ASSAILED REOPENING OF ASSESSMENT ON IDENTICAL SET OF GROUNDS. IN BOTH THE IMPUGNED ASSESSMENT YEAR S THE ASSESSEE HAS REQUESTED FOR PROVIDING COPY OF REASONS RECORDED FOR REOPENING AND THE ASSESSING OFFICER HAS FAILED TO PROVIDE THE SAME TO THE ASSESSEE. THE CIT(A) VIDE COMMON ORDER FOR ALL THE THREE ASSESSMENT YEARS HAS REJECTED THE SPECIFIC GROUND RAISED BY THE ASSESSEE CHALLENGING REOPENING OF ASSESSMENT IN SIMILAR MANNER . THE FINDINGS GIVEN WHILE ADJUDICATING ITA NO.7491/MUM/ 2018 WOULD MUTATIS MUTANDIS APPLY TO THE LEGAL ISSUE RAISED IN 7 ITA NO.749 1 /MUM/2018(A.Y.2007 - 08) ITA NO.7492/MUM/2018(A.Y.2008 - 09) ITA NO.7493/MUM/2018(A.Y.2009 - 10) ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. CONSEQUENTLY BOTH THESE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. 13. TO SUM UP THE APPEALS OF ASSESSEE FOR ASSESSMENT YEARS 2007 - 08 2008 - 09 AND 2009 - 10 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON T HURSDAY THE 2 5 TH DAY OF MARCH 2021. SD/ - ( VIKAS AWASTHY ) / JUDICIAL MEMBER / MUMBAI / DATED 2 5 /0 3 /2021 VM SR. PS (O/S) CO PY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. CIT 5. . . . / DR ITAT MUMB AI 6. / GUARD FILE . BY ORDER //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT MUMBAI