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Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI
Before: Shri N.K.Billaiya, AM & Shri Amarjit Singh, JM
आदेश / O R D E R
Per N.K.Billaiya (AM) : These are cross appeals by the assessee and the Revenue against the very same order of the Commissioner of Income-tax (Appeals) – 10, Mumbai, dated 30.03.2012 pertaining the assessment year 2003-2004. Since both these appeals were heard together and are disposed off by this consolidated order for the sake of convenience.
2 & 3935/Mum/2012 M/s.DBS Bank Limited. 2. We are taking assessee’s appeal in ITA No.3819/Mum/2012 first as the assessee has challenged the very jurisdiction of the Assessing Officer for reopening a completed assessment by issue of notice u/s 148 of the Act. Since this issue goes to the root of the matter, we have heard the rival contentions at length and have carefully perused the orders of the authorities below.
The facts emerging out of assessment order show that the notice u/s 148 was issued by the AO is dated 30.03.2010 and since the assessment year is 2003-2004, undisputedly the notice is issued after four years from the end of the relevant assessment year. The reasons recorded for the reopening of the assessment are exhibited at page 27 of the paper book. The relevant portion of the said notice is as under:-
“On perusal of the records, it is noticed that the claim allowed is not in order as M/s.PSA Sical Terminals Limited was approved by the Government as infrastructure enterprise vide notification No.143/2004 dated 28.04.04. Therefore, exemption provided u/s 10(23G) is applicable to M/s.PSA Sical Terminal Ltd. w.e.f. 28.04.04 and not applicable to earlier period. Thus, the deduction claimed and allowed in A.Y. 2003-04 is not in order. Therefore, the income to the extent of Rs.118,12,977 has escaped the assessment.”
3.1 With these observations, the completed assessment was reopened by issue of notice u/s 148 of the Act, which has been challenged by the assessee stating that there was no tangible material available with the AO for the issue of the notice, and hence, the reassessment proceedings are bad in law.
3 & 3935/Mum/2012 M/s.DBS Bank Limited. 3.2 This claim of the assessee did not find any favour with the CIT(A), who was of the opinion that since the assessee has not given complete details in the assessment proceedings, the reassessment proceedings is valid and as per the provisions of the law.
3.3 The original return was revised by the assessee by filing a revised return of income and in the computation of income the assessee has deducted Rs.1,18,12,997 as income exempt u/s 10(23G) by referring to Note 5. This computation of income is exhibited at page 25P of the paper book and the Note 5 can be found at exhibit 25R, which reads as under:-
“The Bank has claimed an amount of Rs.1,18,12,977 as exempt under section 10(23G) for the net income earned on Long term facility given to M/s.PSA Sical Terminals Limited, which has been approved vide notification no.143/2004 dated 28th April, 2004 under section 10(23G) of the Act. The working of the said amount and the copy of the exemption certificate is provided in Annexure I.”
3.4 If this Note appended to the computation of income is read with the reasons for reopening, we find that the reasons given by the AO are verbatim to this Note 5 to the computation of income, which clearly shows that there was no new tangible material available with the AO. The AO has simply adopted the observations given in the computation of income. Further we find that in its reply dated 11.08.2005, which is placed at page 29 of the paper book, the assessee has explained that the loan given to M/s.PSA Sical Terminals Limited has been granted exemption u/s.10(23G) vide Notification No.143/2004, dated 28th April, 2004. It is also clearly mentioned that in the return of income for assessment year 2002-2003, the same was 4 & 3935/Mum/2012 M/s.DBS Bank Limited. communicated to the AO and he has allowed the net amount as exempt in the assessment made u/s 143(3) of the Act. A perusal of the Notification of the CBDT, which is at page 25U of the paper book show that the exemption is given with effect from assessment year 2000-2001 up to assessment year 2029-2030. This shows that while allowing exemption in assessment year 2002-2003, the AO was well aware that the CBDT has allowed exemption for a period of 30 years. Therefore, the view taken by the CIT(A) that necessary details were not made available, is ill founded.
3.5 Considering the aforementioned facts in totality in the light of the ratio laid down by the Hon’ble Supreme Court in the case of CIT v. Kelvinator of India Ltd. [(2010) 187 Taxman 312 (SC)], we have no hesitation to hold that the notice issued u/s 148 is bad in law. We accordingly set aside the same and decide this issue in favour of the assessee and against the Revenue.
Before parting the learned DR in his written statement has relied upon certain judicial decisions to substantiate his claim that this is not a case of change of opinion. We have elaborately discussed the facts of the case in hand as well. The facts are clearly distinguishable, therefore, the reliance placed on the judicial decisions by the DR is misplaced.
In the result, the appeal filed by the assessee is allowed.
Revenue’s appeal : 6. Sub letto fundamento credit opus, meaning thereby if the foundation is removed, the superstructure will fall. Since in we have quashed the reassessment proceedings (the foundation), the
In the result, the appeal filed by Revenue is dismissed. Order pronounced on this 28th day of October, 2015. आदेश क� घोषणा �दनांकः को क� गई ।