Consumer Marketing (India) Private Ltd., Ahmedabad v. The DCIT, Circle-1(1)(2),, Ahmedabad

ITA 99/AHD/2018 | 2011-2012
Pronouncement Date: 18-11-2019 | Result: Allowed

Appeal Details

RSA Number 9920514 RSA 2018
Assessee PAN AABCC7453K
Bench Ahmedabad
Appeal Number ITA 99/AHD/2018
Duration Of Justice 1 year(s) 10 month(s) 10 day(s)
Appellant Consumer Marketing (India) Private Ltd., Ahmedabad
Respondent The DCIT, Circle-1(1)(2),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 18-11-2019
Last Hearing Date 13-11-2019
First Hearing Date 13-11-2019
Assessment Year 2011-2012
Appeal Filed On 08-01-2018
Judgment Text
A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD BEFORE SHRI RAJPAL YADAV JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA ACCOUNTANT MEMBER ./ I.T.A. NOS. 99 & 100/AHD/2018 ( ASSESSMENT YEARS : 2011-12 & 2012-13) CONSUMER MARKETING (INDIA) PRIVATE LIMITED MEHTA LODHA & CO. CHARTERED ACCOUNTANTS 105 SAKAR-1 NEAR GANDHIGRAM RAILWAY STATION OFF. ASHRAM ROAD AHMEDABAD - 380009 / VS. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1(1)(2) PRATYAKSH KAR BHAVAN AHMEDABAD - 380015 ./ ./ PAN/GIR NO. : AABCC7453K ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI PRAKASH D. SHAH A.R. / RESPONDENT BY : SHRI RAJDEEP SINGH SR. D.R. DATE OF HEARING 10/10/2019 & 13/11/2019 !'# / DATE OF PRONOUNCEMENT 18/11/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER O F INCOME TAX (APPEALS)-1 AHMEDABAD (CIT(A) IN SHORT) BOTH DA TED 22.11.2017 ARISING IN THE ASSESSMENT ORDERS BOTH DATED 30.03.2016 PASS ED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) R.W.S. 147 OF THE INCO ME TAX ACT 1961 (THE ACT) CONCERNING AYS. 2011-12 & 2012-13. ITA NOS. 99 & 100/AHD/18 [CONSUMER MARKETING (INDIA) PVT. LTD.] A.YS. 2011-12 & 2012-13 - 2 - 2. THE GRIEVANCES RAISED BEING COMMON BOTH THE CAS ES WERE HEARD TOGETHER AND DISPOSED OF BY THE COMMON ORDER. 3. WE SHALL FIRST TAKE UP ASSESSEES APPEAL IN ITA NO. 100/AHD/2018 CONCERNING AY 2012-13. ITA NO. 100/AHD/2018-AY-2012-13 4. AS PER ITS GROUNDS OF APPEAL THE ASSESSEE HAS C HALLENGED THE ASSUMPTION OF JURISDICTION UNDER S.147 R.W.S. 148 O F THE ACT AS WELL AS DISALLOWANCE OF DONATION EXPENSES OF RS.25 LAKHS ON MERITS. 5. WHEN THE MATTER WAS CALLED FOR HEARING THE LEAR NED AR FOR THE ASSESSEE FIRST ADVERTED TO THE ASSUMPTION OF JURISD ICTION UNDER S.147 OF THE ACT AND SUBMITTED THAT THE ACTION OF THE LOWER AUTH ORITIES IN ISSUANCE OF NOTICE UNDER S.148(2) OF THE ACT FOR ASSUMPTION OF JURISDICTION UNDER S.147 OF THE ACT IS WITHOUT AUTHORITY OF LAW AND SUBSEQUE NT ORDER PASSED UNDER S.143(3) OF THE ACT IS ACCORDINGLY BAD IN LAW. TO PROPAGATE FURTHER THE LEARNED AR POINTED OUT THAT DESPITE FILING RETURN O F INCOME IN PURSUANCE OF NOTICE ISSUED UNDER S.148(2) OF THE ACT THE REVENU E AUTHORITIES HAVE FAILED TO PROVIDED COPY OF REASONS RECORDED UNDER S.148(2) OF THE ACT AS MANDATED BY THE HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. V. ITO (2003) 259 ITR 19(SC). THE LEARNED AR THUS SUBMITTED THAT IT IS NOT KNOWN AS TO WHETHER THE ACTION OF THE AO UNDER S.14 7 OF THE ACT IS WITHIN FOUR CORNERS OF LAW OR NOT. ADDRESSING THE ISSUE O N MERITS THE LEARNED AR SUBMITTED THAT THE DONATION EXPENSES OF RS.25 LAKHS INCURRED BY THE ASSESSEE WAS CORROBORATED BY RECEIPTS ISSUED BY THE DONEE AS WELL AS BANK PAYMENTS ETC. THE DONEE WAS APPROVED BY THE COMPET ENT AUTHORITY UNDER INCOME TAX LAWS FOR AVAILING DEDUCTION. THE LEARNE D AR HOWEVER SUBMITTED THAT A REFERENCE HAS BEEN MADE TO SOME AD VERSE STATEMENT OBTAINED FROM THE DONEE A COPY OF WHICH WAS NEVER PROVIDED TO THE ASSESSEE. THE ASSESSEE THEREFORE COULD NOT AVAIL I TS RIGHT OF CROSS EXAMINATION TO THE DONOR. IT WAS THUS POINTED OUT THAT ACTION OF THE REVENUE FOR DISALLOWANCE OF DONATION EXPENSES IS CL EARLY IN VIOLATION OF ITA NOS. 99 & 100/AHD/18 [CONSUMER MARKETING (INDIA) PVT. LTD.] A.YS. 2011-12 & 2012-13 - 3 - PRINCIPLE OF NATURAL JUSTICE. ON INQUIRY FROM THE BENCH THE LEARNED AR HOWEVER FAIRLY SUBMITTED THAT THE ISSUE MAY BE REMI TTED BACK TO THE FILE OF THE AO WITH SUITABLE DIRECTIONS TO REDO THE ASSESSM ENT BY OBSERVING PRINCIPLES OF NATURAL JUSTICE. 6. THE LEARNED DR RELIED UPON THE ORDERS OF THE LOW ER AUTHORITIES BUT HOWEVER ALSO VOICED HIS CONCURRENCE WITH THE PROPOS AL ON BEHALF OF THE ASSESSEE FOR SETTING ASIDE THE PRESENT ACTION TO EN ABLE THE AO TO REFRAME THE ASSESSMENT IN ACCORDANCE WITH LAW. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS CONTENDED O N BEHALF OF THE ASSESSEE THAT COMPLETED/TIME BARED ASSESSMENT HAS BEEN REOPE NED BY INVOKING POWERS OF DRASTIC NATURE EMBODIED IN SECTION 147 OF THE ACT WITHOUT PROVIDING THE REASONS RECORDED UNDER S.147 OF THE A CT. SECTION 148(2) OF THE ACT REQUIRES THE AO TO RECORD HIS REASONS FOR I SSUE OF NOTICE. THE COURTS HAVE HELD THAT RECORDING OF SUCH REASONS IS MANDATORY AND THE ISSUE OF NOTICE WITHOUT SUCH REASONS IS INVALID. THE HON BLE SUPREME COURT IN GKN DRIVESHAFTS (INDIA) LTD. V. ITO (2003) 259 ITR 19(SC) ALSO HELD THAT THE AO IS BOUND TO FURNISH REASONS WITHIN A REASONA BLE TIME TO THE ASSESSEE AND THE ASSESSEE IS ENTITLED TO FILE HIS OBJECTION TO THE MAINTAINABILITY OF NOTICE. THE AO IN TURN IS BOUND TO DISPOSE OF TH E OBJECTION SO FILED BY PASSING A SPEAKING ORDER. FOLLOWING THIS DECISION OF HONBLE SUPREME COURT VARIOUS CASES HAVE COME UP BEFORE DIFFERENT HIGH COURTS TO CONSIDER THE CONSEQUENCES WHERE THE AO PASSED THE RE-ASSESSM ENT ORDER WITHOUT FOLLOWING THE JUDICIAL FIAT LAID DOWN BY THE HONBL E SUPREME COURT. HOWEVER WHEN INQUIRED ON FACTS THE ASSESSEE HOWEV ER COULD NOT SUBMIT ANY PROOF DEMANDING THE COPY OF REASONS AT THE THRE SHOLD BEFORE THE AO. THE COPY OF RECORDED REASONS ARE ALSO NOT EXTRACTED BY ANY OF THE LOWER AUTHORITIES. WE THUS NOT IN A POSITION TO ADJUDICA TE THE LEGAL ISSUE RAISED ON VALIDITY OF ASSUMPTION OF JURISDICTION UNDER S.1 47 OF THE ACT ONE WAY OR THE OTHER. AT THIS STAGE HAVING REGARD TO THE BEL ATED OBJECTION OF THE ASSESSEE OF NON-AVAILABILITY OF REASONS RECORDED I T WILL BE ONLY FAIR AND BEFITTING THAT A FRESH OPPORTUNITY IS GIVEN TO THE ASSESSEE BY THE AO TO ITA NOS. 99 & 100/AHD/18 [CONSUMER MARKETING (INDIA) PVT. LTD.] A.YS. 2011-12 & 2012-13 - 4 - PROVIDE THE COPY OF REASONS AND DISPOSE OF OBJECTIO N OF THE ASSESSEE IN THIS REGARD IF ANY AS PER PROCEDURE LAID DOWN BY THE H ONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (INDIA) LTD. V. ITO (2003) 259 ITR 19(SC). 7.1 WE ALSO SIMULTANEOUSLY TAKE NOTE OF FIRM OBJECT ION OF THE ASSESSEE ON MERITS THAT ADVERSE STATEMENT MADE ON BEHALF OF THE DONEE AGAINST THE ASSESSEE OUGHT TO HAVE BEEN PROVIDED TO THE ASSESSE E BEFORE PLACING RELIANCE THERE UPON. JUDICIAL PROPRIETY DEMANDS TH AT EVIDENCE COLLECTED AND SOUGHT TO BE USED AGAINST THE ASSESSEE IS CONFR ONTED TO THE ASSESSEE TO UPHOLD THE PRINCIPLES OF NATURAL JUSTICE. NEEDLESS TO SAY THE STATEMENT OF A THIRD PARTY WHICH HAS BEEN MADE THE BASIS FOR ADDIT ION IS REQUIRED TO BE PROVIDED TO THE ASSESSEE TO ENABLE HIM TO APPRECIAT E THE CONTENTS THEREOF AND TO DEFEND ITS POSITION. THE HONBLE SUPREME CO URT IN CASE OF ANDAMAN TIMBER INDUSTRIES VS. CIT (2015) 62 TAXMANN.COM 3 ( SC) HAS ASSAILED THE ACTION OF THE REVENUE AND OBSERVED THAT NOT ALLOWIN G THE ASSESSEE TO CROSS EXAMINE A WITNESS WHOSE STATEMENT IS SOUGHT TO BE R ELIED UPON IS A SERIOUS FLAW AND OFFENDS THE PRINCIPLES OF NATURAL JUSTICE. IT IS THE CONTENTION OF THE ASSESSEE THAT SUCH OPPORTUNITY TO CROSS EXAMINE THE WITNESS IS A MUST TO ENABLE IT TO DISCREDIT THE ADVERSE TESTIMONY OF THE WITNESS. THE BREACH OF SACROSANCT PRINCIPLES OF NATURAL JUSTICE IS FUNDAME NTAL AND GOES TO THE ROOT OF THE ISSUE. HENCE THE APPEAL OF THE ASSESSEE ME RITS ACCEPTANCE. 7.2 WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A ) AND RESTORE THE ISSUE INVOLVING LACK OF JURISDICTION AND CONSEQUENT ADJUDICATION ON MERITS BACK TO THE FILE OF THE AO FOR DE NOVO ASSESSMENT IN ACCORDANCE WITH LAW AFTER FOLLOWING PRINCIPLES OF NATURAL JUSTICE AND A FTER FOLLOWING DUE PROCEDURE FOR RE-ASSESSMENT AS LAID DOWN BY THE HON BLE SUPREME COURT IN GKN DRIVESHAFTS (INDIA) LTD. (SUPRA). IT SHALL BE OPEN TO THE ASSESSEE TO PLACE ALL THE EVIDENCES AND CONTENTIONS AS IT MAY C ONSIDER EXPEDIENT BEFORE THE AO WITH REGARD TO USURPATION OF JURISDICTION UN DER S.147 OF THE ACT AS WELL AS TO ENABLE THE AO TO FRAME RE-ASSESSMENT ON MERITS IN ACCORDANCE WITH LAW. ITA NOS. 99 & 100/AHD/18 [CONSUMER MARKETING (INDIA) PVT. LTD.] A.YS. 2011-12 & 2012-13 - 5 - 8. IN THE RESULT APPEAL OF THE ASSESSEE FOR AY 201 2-13 IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 99/AHD/2018-AY-2011-12 9. IN PARITY WITH THE OBSERVATIONS MADE IN AY 2012- 13 WE ALSO CONSIDER IT EXPEDIENT TO SET ASIDE THE ORDER OF THE CIT(A) IN AY 2012-13 APPEALED AGAINST IN ITA NO. 99/AHD/2018 WHERE THE A SSESSEE IS STATED TO BE PLACED IN SIMILAR SITUATION. THUS IN CONSONANCE W ITH THE DIRECTIONS MADE IN ITA NO. 100/AHD/2018 CONCERNING AY 2012-13 ALL ISSUES RAISED IN ITA NO.99/AHD/2018 CONCERNING AY 2011-12 ARE ALSO SET A SIDE AND RESTORED TO THE FILE OF THE AO FOR DE NOVO ADJUDICATION IN ACCORDANCE WITH LAW. 10. IN THE RESULT APPEAL OF THE ASSESSEE IN ITA NO .99/AHD/2018 FOR AY 2011-12 IS ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE COMBINED RESULT BOTH APPEALS FILED BY T HE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (RAJPAL YADAV) (PRADIP KU MAR KEDIA) JUDICIAL MEMBER ACCOUNTANT M EMBER AHMEDABAD: DATED 18/11/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ / CONCERNED CIT 4. - / CIT (A) /. 012 33*+4 *+#4 56) / DR ITAT AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 18/11/201 9