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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL
आयकरअपीलीयअिधकरण,‘डी’�यायपीठ,चे�ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI �ीमहावीर �संह, उपा�य�एवं�ी मनोज कुमार अ�वाल, लेखा सद�यके सम� BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER
आयकरअपीलसं./ ITA No. 2215/Chny/2016 (िनधा�रणवष� / Assessment Year: 2003-04) DCIT M/s. Rieter – LMW Corporate Circle -1, Machinery Limited, बनाम/ 63-A, Race Course Road, Sulur Railway Feeder Road, Vs. Coimbatore. Muthugoundenpudur, Coimbatore – 641 406. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AABCR-0309-M (अपीलाथ�/Appellant) (��थ� / Respondent) : & CO No: 125/Chny/2016 (in ITA No. 2215/Chny/2016) (िनधा�रणवष� / Assessment Year: 2003-04) M/s. Rieter – LMW Machinery DCIT Limited, Corporate Circle -1, बनाम/ Sulur Railway Feeder Road, 63-A, Race Course Road, Vs. Muthugoundenpudur, Coimbatore. Coimbatore – 641 406. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AABCR-0309-M (अपीलाथ�/Appellant) (��थ� / Respondent) :
अपीलाथ�कीओरसे/ Appellant by : Shri R. Vijayaraghavan, Advocate ��थ�कीओरसे/Respondent by : Shri D. Hema Bhupal, JCIT
सुनवाईकीतारीख/ : 22.06.2022 Date of Hearing घोषणाकीतारीख / : 29.06.2022 Date of Pronouncement
ITA No: 2215/Chny/2016 - 2 - & CO No. 125/Chny/2016 आदेश / O R D E R PER MAHAVIR SINGH, VICE PRESIDENT:
This appeal of Revenue and cross objection by assessee, both are arising out of the order of the Commissioner of Income Tax (Appeals)-1, Coimbatore in appeal no. 97-A/06-07 order dated 23.03.2016. Assessment was framed by ACIT, Company Circle IV(2), Coimbatore for the AY 2003-04 u/s. 143(3) r.w.s. 147 of the Income-tax Act, 1961 (herein after referred to as ‘the Act’) vide order dated 29.03.2006.
At the outset, it is noticed that the appeal filed by Revenue in ITA No. 2215/Chny/2016 is barred by limitation by 13 days. The revenue has filed condonation petition along with affidavit stating that it is seen from this office records that the last date for filing the appeal was on 12.07.2016 but the appeal papers were filed on 26.07.2016 with a delay of 13 days. The delay in filing the appeal occurred since the records could not be traced in time and prayed that the delay was unintentional. The ld. Counsel for the assessee did not object for condonation of delay. As the delay is very small of 13 days and the cause seems reasonable, we condone the delay and admit the appeal.
ITA No: 2215/Chny/2016 - 3 - & CO No. 125/Chny/2016 3. At the outset ld. Counsel for the assessee stated that the first cross objection filed by the assessee should be taken up for the reason that the jurisdiction issue raised by assessee before CIT(A) was decided against assessee and this jurisdiction issue is as regards to reassessment proceeding u/s. 147 r.w.s. 148 of the Act as ab initio void and unsustainable in law. Ld Sr. DR agreed that jurisdiction issue is raised in CO by the assessee. The grounds raised in CO and issue is as regards to the reassessment proceedings initiated u/s. 147 r.w.s. 148 of the Act as an initio void and unsustainable in law. For this, assessee has raised following two grounds read as under: “1. The learned CIT(A) ought to have quashed the assessment proceedings r.w. section 147 as ab initio void and unsustainable, in the facts and the circumstances of the case, and in law. 2. For these and other grounds of cross objections that may be raised at the time of the hearing of the appeal, the order of the learned CIT(A) is opposed to the facts, in the circumstances of the case and in law.”
Brief facts are that the assessee preferred CIT(A) and raised the issue of jurisdiction and CIT(A) simpliciter dismissed the issue without deliberating the issue as under: “The law, as laid down above, is squarely applicable to the facts of the case of the appellant. Therefore, the impugned proceedings are not sustainable in law.”
Aggrieved, assessee is in cross objection before us.
ITA No: 2215/Chny/2016 - 4 - & CO No. 125/Chny/2016 5. We have heard the rival contentions and gone through the facts and circumstances of the case. The facts are that for AY 2003-04, the assessee filed its return of income on 22.10.2003 declaring total income as nil under normal computation and book loss u/s. 115JB of the Act amounting to Rs. 3,25,26,498/-. Its return was processed and intimation issued u/s. 143(1) of the Act vide order dated 05.03.2004 determining the refund due at Rs. 10,44,782/-. Subsequently, the AO noticed that income chargeable to tax has escaped assessment within the meaning of section 148 r.w.s. 147 of the Act and accordingly notice u/s. 148 dated 03.06.2004 was issued. In the above facts, Ld. Counsel stated that the assessment order passed u/s. 143(3) r.w.s. 147 of the Act dated 29.03.2006 is not a valid order as the AO has issued notice for re-opening u/s. 148 of the Act dated 03.06.20014, when the time limit for making assessment on the basis of original return of income filed by the assessee was available as on 22.10.2003 and the assessment proceedings for issuance of notice u/s. 143(2) of the Act was pending in terms of section 143(2)(ii) of the Act, the AO would have issued notice before the expiry of 12 months from the end of the month in which assessee filed its return u/s. 139(1) of the Act. Ld. Counsel for the assessee stated that this issue is clearly covered by two decisions of Hon’ble Madras High Court in the case of CIT vs Qatalys Software
ITA No: 2215/Chny/2016 - 5 - & CO No. 125/Chny/2016 Technology (2009) 308 ITR 249 and CIT vs TCP Limited (2010) 323 ITR 346. Ld Counsel for the assessee rests his arguments.
On the other hand, Ld. Sr. DR could not controvert the facts situation that the notice u/s. 147 r.w.s. 148 of the Act dated 03.06.2004 was issued before the expiry of time limit available with the AO for issuance of notice u/s. 143(2) of the Act and he only relied on the order of the CIT(A).
After hearing rival contentions and going through the facts of the case, we noted that the assessee filed its return of income on 22.10.2003 u/s. 139(1) of the Act. This return was processed and intimation u/s. 143(1) of the Act was issued vide dated 05.03.2004. However, the AO did not serve notice u/s. 143(2) of the Act on the assessee before 31.10.2004, despite the fact that the time limit was available for sending notice u/s. 143(2)(ii) of the Act. But before that, the notice u/s. 148 of the Act was issued on 03.06.2004 before the expiry of time limit for completion of assessment. This issue has been dealt with by the Hon’ble Madras High Court in the following case, where it is held as under: “ The decision of the Jurisdictional High Court in the case of The Madras High Court in CIT vs Qatalys Software Technology (2009) 308 ITR 249 has held that ‘when time limit for issue of notice u/s. 143(2)(ii) has not expired, AO cannot initiate proceedings u/s. 147’ and the Hon’ble High Court has also held similarly
ITA No: 2215/Chny/2016 - 6 - & CO No. 125/Chny/2016 in its decision in CIT vs TCP Limited (2010) 323 ITR 346, is to the effect, the assessment or re-assessment shall become invalid u/s. 147, if, the notice had been issued before the expiry of time limit for completion of the assessment on the basis of return filed by the assessee.”
As the issue is covered and the facts are very clear that once the time limit for issuance of notice u/s. 143(2) of the Act was available with the Assessing Officer up to 31.10.2004, the AO can resort to the notice u/s. 143(2)(ii) of the Act and no need for issuing of the notice u/s. 148 of the Act as held by Hon’ble Madras High Court as held above and we quash the assessment proceedings and allow this CO of the assessee.
It is noted that since we have adjudicated the issue of assessee’s CO, quashing reassessment proceedings, we do not go into the appeal of the Revenue which has become infructuous and dismissed.
In the result, the appeal filed by the Revenue is dismissed as infructuous and the CO filed by the assessee is allowed.
Order pronounced on 29th June, 2022. Sd/- Sd/- (महावीर �सह ) (मनोज कुमार अ�वाल) (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) उपा�य� /VICE PRESIDENT लेखा सद�य/ACCOUNTANT MEMBER चे�ई / Chennai; िदनांक / Dated : 29-06-2022 JPV आदेशकी�ितिलिपअ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकरआयु�त (अपील)/CIT(A) 4. आयकरआयु�त/CIT 5. �वभागीय��त�न�ध/DR 6. गाड�फाईल/GF