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Income Tax Appellate Tribunal, ‘C’ BENCH : CHENNAI
Before: SHRI GEORGE MATHAN & SHRI INTURI RAMA RAO
आदेश / O R D E R
PER INTURI RAMA RAO, ACCOUNTANT MEMBER:
This is an appeal filed by the Revenue and the Cross Objection (CO) filed by the assessee-company directed against the ITA No.1211/19 & CO 71/19 :- 2 -: order of the learned Commissioner of Income Tax (Appeals)-15, Chennai (hereinafter called as ‘CIT(A)’) dated 29.01.2019 for the assessment year (AY) 2010-2011.
The brief facts of the case are as under: 2.
The appellant namely M/s. Savorit Limited is a company incorporated under the provisions of the Companies Act, 1956. It is engaged in the business of manufacturing Maida, Suji, Atta, Bran, Vermicelli, Macaroni, Spagatti, Noodles etc., The return of income for the AY 2010-11 was filed on 26.09.2010 disclosing total income of Rs. 81,26,374/-. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 31.01.2013 passed u/s. 143(3) of the Income Tax Act, 1961 (in short ‘the Act’) at total income of Rs.1,05,30,743/-. Subsequently, the Assessing Officer noted that assessee made investment in shares and therefore provisions of Section 14A of the Act are applicable and accordingly assessee was issued notice u/s.148 of the Act on 29.03.2017. In response to notice, assessee vide letter dated 17.04.2017 requested that the original return of income filed be treated as return in response to notice issued u/s.148 of the Act. Against the said return of income, the assessment was completed by the Deputy Commissioner of Income Tax, Corporate Circle 6(1), Chennai vide
ITA No.1211/19 & CO 71/19 :- 3 -: order dated 07.07.2017 by making addition of �1,27,02,727/- u/s.14A of the Act.
Being aggrieved, an appeal was preferred before the 3.
Ld.CIT(A) and contended that i.e. assessment proceedings are not valid in law in the absence of any reasons to disbelieve that income had escaped assessment. It is further contended that no expenditure was incurred to earn dividend income and therefore provisions of Section 14A of the Act have no application. The ld. CIT(A) while upholding the validity of reassessment proceedings, held that provisions of Section 14A of the Act cannot be applied to the facts of the present case in the absence of any exempt income, placing reliance on the decisions of Hon’ble Jurisdictional High Court in the cases of Redington India Ltd vs. Addl. CIT, 392 ITR 633 and CIT vs. Chettinad Logistics P. Ltd, 248 Taxman 55.
Being aggrieved by the order of the Commissioner of Income Tax (Appeals), Revenue is in appeal before us in and assessee company had filed cross objection challenging the correctness of the findings of the ld. CIT(A) on the validity of the reopening.
We heard the rival submissions and perused the material on record. Now the law is settled to the extent that in the absence of ITA No.1211/19 & CO 71/19 :- 4 -:
any exempt income resort to provisions of Section 14A of the Act cannot be made, reliance in this regard can be placed on the judgment of Hon’ble Jurisdictional High Court in the cases of Redington India Ltd (supra) and Chettinad Logistics P. Ltd (supra) and Hon'ble Supreme Court had also dismissed the SLPs filed against these two decisions. The decision of the ld. CIT(A) is in consonance with the ratio of the decisions laid down by Hon’ble Jurisdictional High Court in the cases of Redington India Ltd (supra) and Chettinad Logistics P. Ltd (supra). Therefore we do not find any reason to interfere with the order of the ld. CIT(A). Hence, the appeal filed by the Revenue is dismissed.
Now, we take up C.O.No.71/CHNY/2019 filed by the 6. assessee.
The assessee had challenged the findings of the ld. CIT(A) 7. on the validity of the reopening of the appeal. Admittedly, the Assessing Officer had not examined the applicability of provisions of Section 14A of the Act in respect of investment made by it in the original assessment proceedings and therefore it cannot be said that Assessing Officer had formed an opinion in the original assessment proceedings and therefore it cannot be said be that reassessment proceedings are promoted by change of opinion. Therefore, we uphold
ITA No.1211/19 & CO 71/19 :- 5 -: the findings of the ld. CIT(A). Accordingly, the Cross Objection filed by the assessee is dismissed.
In the result, the appeal and cross objection filed by the Revenue and assessee are dismissed.
Order pronounced on 23rd day of September, 2019, at Chennai.