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आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण,"जी अिधकरण जी जी” खंडपीठ जी खंडपीठ खंडपीठ मुंबई खंडपीठ मुंबई मुंबई मुंबई INCOME TAX APPELLATE TRIBUNAL,MUMBAI-“G”,BENCH सव"ी जोिग"दर "सह, "याियक सद"य एवं राजे"", लेखा सद"य Before S/ShJoginder Singh,Judicial Member & Rajendra,Accountant Member आयकर अपील सं /ITA Nos./420/Mum/2014 & 3369/Mum/2015,िनधा"रण िनधा"रण िनधा"रण वष" िनधा"रण वष" वष" /AY.2005-06 वष" ACIT-6(3), 522, 5th Floor Glaxo Smithkline Pharmaceuticals Limited GSK House, Dr. Annie Besant Road Aayakar Bhavan, MK Road Vs. Worli,Mumbai--400 030. Mumbai-400 020. PAN:AAACG 4414 B (अपीलाथ" /Appellant) (""यथ" / Respondent) Revenue by: Ms. Amrita Misra (DR) Assessee by: S/Shri Niraj Sheth & Vallabh Gokhale(AR) सुनवाई क" तारीख / Date of Hearing: 07.04.2016 घोषणा क" तारीख / Date of Pronouncement: 07.04.2016 आयकर आयकर अिधिनयम अिधिनयम,1961 क" क" धारा धारा 254(1)केकेकेके अ"तग"त अ"तग"त आदेश आदेश आयकर आयकर अिधिनयम अिधिनयम क" क" धारा धारा अ"तग"त अ"तग"त आदेश आदेश Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद"य सद"य राजे"" राजे"" केकेकेके अनुसार अनुसार PER Rajendra A.M.- लेखा लेखा लेखा सद"य सद"य राजे"" राजे"" अनुसार अनुसार Challenging the orders dt.18.3.2015 & 11.11.13 of CIT(A)-13 and CIT(A)-12 respectively, Mumbai,the assessee has filed the above mentioned appeals raising various grounds.As both the appeals are for the same AY.s,so we are adjudicating them by passing a single order. ITA No.3369/Mum/2015: 2.Assessee-company,engaged in the business of manufacturing, trading and distribution of pharmaceuticals, drugs and chemicals filed its return of income on 31.10.2005,declaring total income of Rs.323.80 crores.The Assessing Officer(AO) completed the assessment u/s. 143(3) of the Act,on 29.12.2008,determining the income of the assessee at Rs.359.62 crores.Later on ,the case was reopened by way of issue of notice u/s. 148 of the Act on 27.3.2012 after recording the reasons for re-opening.The AO completed the assessment u/s. 143(3) r.w.s. 147 of the Act on 7.2.2013 computing the income at Rs.371.08 crores. 3.Aggrieved by the order of the AO, assessee preferred an appeal before the First Appellate Authority(FAA)and challenged the reopening. It was stated that reopening was made after four years,that there was no failure on part of the assessee to disclose fully and truly all material facts necessary for assessment.However,the FAA referred to the cases of Phool Chand Bajrang Lal(69 Taxman 627); Rosy Blue(India) Ltd.(227 Taxman 89); Indian Hume Pipe Co. Ltd. (204 taxman 347) and upheld the reopening. 4.Before us, the Authorised Representative (AR) stated that there was no failure on part of the assessee to disclose material facts, that reopening beyond four years was bad in law.He referred to the cases of Hindustan Lever Ltd. (268 ITR339) and Bhor Industries Ltd.(267 ITR161).The Departmental Representative (DR) left the issue to the discretion of the Bench. 5.We have heard the rival submissions and perused the material before us.The undisputed facts of the case are that the case was re-opened beyond a period of four years, that the AO while recording the reasons had not mentioned that the failure of the assessee to disclose fully and truly the material facts has led to escapement of income.As per the established law this 420/14 &3369/15-glaxo smithkline
basic fact has to be mentioned by the AO whenever an assessment is reopened after a period of four years. We would like to reproduce the relevant portion of the judgmnt of case of Titanor Components Ltd. (343ITR183) of the Hon'ble Bombay High Court and same reads as under : “Having regard to the purpose of s. 147, the power conferred by s. 147 does not provide a fresh opportunity to the AO to correct an incorrect assessment made earlier unless the mistake in the assessment so made is the result of a failure of the assessee to fully and truly disclose all material facts necessary for assessment. Indeed, where the assessee has fully disclosed all the material facts, it is not open for the AO to reopen the assessment on the ground that there is a mistake in assessment. Moreover, it is necessary for the AO to first observe whether there is a failure to disclose fully and truly all material facts necessary for assessment and having observed that there is such a failure to proceed under s. 147. It must follow that where the AO does not record such a failure he would not be entitled to proceed under s. 147. The AO has not recorded the failure on the part of the petitioner to fully and truly disclose all material facts necessary for the asst. yr. 1997-98. What is recorded is that the petitioner has wrongly claimed certain deductions which he was not entitled to. There is a well known difference between a wrong claim made by an assessee after disclosing all the true and material facts and a wrong claim made by the assessee by withholding the material facts fully and truly. It is only in the latter case that the AO would be entitled to proceed under s. 147.”
Respectfully following the above judgment,we hold that the reopening was not valid.Ground no.1 is decided in favour of the assessee.As we have held that re-opening was invalid so we are not adjudicating the other grounds of appeal.
ITA No.420/Mum/2014: 6.The appeal in this matter is arising out of the order passed u/s. 154 on 11.3.2003.The assessee had filed a letter on 6.3.2013 and has requested the AO to rectify certain mistakes appearing in the order passed u/s.143(3) r.w.s. 147 on 7.2.2013. Against the rectification order, the assessee preferred an appeal before the FAA,who dismissed the appeal.
During the course of hearing before us,the AR stated that reopening was not valid so the order passed by the AO in pursuance of the original order would not survive.
While deciding the earlier appeal,we have held that the reassessment proceedings were not valid.Therefore the subsequent order passed by the AO would also become invalid. The appeal filed by the assessee is not being adjudicated,treating it infructuous.
As a result,appeal filed by the assessee in ITA No.3369/M/2015 stands allowed and the appeal in ITA No.420/Mum/2014 is treated as infructuous.. फलतः िनधा"रती "ारा दािखल क" गई आयकर अपील सं 3369/M/2015 मंजूर क" जाती है और अपील सं 420/Mum/2014 िन""भावी करार क" जाती है. Order pronounced in the open court on 7th,April, 2016. आदेश क" घोषणा खुले "यायालय म" "दनांक 07 अ ैल, 2016 को क" गई । जोिग"दर जोिग"दर "सह "सह /Joginder Singh) (राजे"" / RAJENDRA) जोिग"दर जोिग"दर "सह "सह "याियक सद"य / JUDICIAL MEMBER लेखा लेखा सद"य सद"य / ACCOUNTANT MEMBER लेखा लेखा सद"य सद"य मुंबई Mumbai; "दनांकDated : 07.04.2016. Jv.Sr.PS.
420/14 &3369/15-glaxo smithkline
आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत/Copy of the Order forwarded to : आदेश आदेश आदेश क" क" "ितिलिप "ितिलिप अ"ेिषत अ"ेिषत 1.Appellant /अपीलाथ"
Respondent / "यथ" 3.The concerned CIT(A)/संब$ अपीलीय आयकर आयु', 4.The concerned CIT /संब$ आयकर आयु' 5.DR “A ” Bench, ITAT, Mumbai /िवभागीय ितिनिध, A खंडपीठ,आ.अ."याया.मुंबई 6.Guard File/गाड" फाईल स"यािपत ित //// आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार Dy./Asst.