ITO, WD-6(1), KOLKATA, KOLKATA vs. M/S CALCUTTA RESOURCES PVT. LTD., KOLKATA

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ITA 662/KOL/2016Status: DisposedITAT Kolkata28 March 2018AY 2005-20062 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the CIT(A) annulled the reassessment proceedings, and the Revenue did not challenge this annulment but only appealed on merits, the appeals were not maintainable. The reassessment was considered void as the reopening was held to be bad in law.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting additions made under Section 68. The CIT(A) had annulled the reassessment proceedings initiated by the AO, holding the reopening itself to be bad in law.

What were the issues?

Whether the Revenue's appeals are maintainable when the core reassessment proceedings have been annulled by the lower appellate authority, and the Revenue has not challenged the annulment itself.

Which sections of the Income-tax Act were involved?

Section 68,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH: KOLKATA

Before: Shri A. T. Varkey, JM & Dr. A. L. Saini, AM]

Hearing: 08.03.2018Pronounced: 28.03.2018

Per Shri A.T.Varkey, JM Both these appeals filed by the revenue are against the order of Ld. CIT(A)-8, Kolkata dated 29.01.2016 for AYs 2003-04 and 2005-06.

2.

The following sole common ground of appeal is raised by the Revenue:

1.

1. On the facts and circumstances of the case, whether CIT(A) was right in deleting the addition made u/s. 68 though, the creditworthiness of the shareholders and genuineness of the transaction could not be explained.

3. At the outset itself, the Ld. Counsel for the assessee drew our attention to the fact that the Ld. CIT(A) has “Anulled” the assessments framed by the AO for both years by allowing the legal issue raised by the assessee against the reopening of assessment itself. According to the Ld. AR, since the Revenue has not challenged this decision of the Ld. CIT(A), the adjudication of this appeal by this Tribunal will be mere academic in nature, when the reassessment in question has been already annulled by the Ld. CIT(A). On the other hand, Ld. DR relied on the decision of AO.

4.

We have heard rival submissions and gone through the facts and circumstances of the case. We note that the Ld. CIT(A) has annulled the reassessment framed by the AO after

2 Calcutta Resources Pvt. Ltd., AYs- 2003-04 & 2005-06 reopening the assessments in question. However, the Ld. CIT(A) has upheld the ground raised by the assessee against the very action of AO to reopen and has annulled the reassessment framed by the AO. We note that Revenue though has preferred an appeal against the order of Ld. CIT(A) has not preferred to question the action of ld. CIT(A) in ‘anulling’ the reassessment itself. The revenue has preferred these appeals only on merits. In such a scenario, we note that revenue appeals are not maintainable for the simple reason that reassessment framed by the AO for both years is on the foundation built on the reopening u/s. 147 of the Act, which itself has been annulled. So the legal effect of such an action of ld. CIT(A) is that when the reopening is held to be null or annulled, the jurisdiction of AO to reopen itself has been held to be bad in law, so the reassessment is ‘void’ in the eyes of law and so there is no reassessment existing in the eyes of law. So, we cannot adjudicate on an assessment/(reassessment) which is not existing in the eyes of law and so the appeals preferred by the revenue, without challenging the impugned action of the Ld. CIT(A) in annulling the reassessment framed for both years is not maintainable and, therefore, dismissed.

5.

In the result, both appeals of revenue are dismissed.

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