Income Tax Appellate Tribunal - Chennai
Tarachanthini Services Pvt. Ltd., ... vs Department Of Income Tax on 9 December, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
'C' BENCH, CHENNAI
[BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND
SHRI HARI OM MARATHA, JUDICIAL MEMBER]
M.P.No.228 & 229/Mds/2011
[In I.T.A Nos. 473/Mds/2010 & 549/Mds/2010]
Assessment year : 2000-01
The Asst. Commissioner of vs M/s Tarachanthini Services
Income-tax Pvt. Ltd
Company Circle III(I) No.25, Taurus No.1,
Chennai First Main Road
United India Colony,
Kodambakkam
Chennai 600 024
[PAN - AAACP9272H]
(Petitioner) (Respondent)
Petitioner by : Shri Shaji P. Jacob, IRS,CIT
Respondent by : None
Date of Hearing : 9-12-2011
Date of Pronouncement : 9-12-2011
ORDER
PER HARI OM MARATHA, JUDICIAL MEMBER:
These miscellaneous petitions have been filed by the Revenue in relation to common order of the Tribunal dated 18.4.2011 passed in cross appeals in I.T.A.Nos. 473/Mds/2010 and 549/Mds/2010, in above assessee's case, pertaining to assessment year 2000-01. :- 2 -: MP 228 & 229/11
2. In M.P.No.228/Mds/2011, the Revenue has raised following grounds to get the above Tribunal's order rectified u/s 254(2) of the Act:
"(1) The Hon'ble ITAT vide its order dated 18.04.2011 in ITA No.473/Mds/2010 & ITA No.549/Mds/2010 has decided the appeal in favour of the assessee company viz., M/s. Tarachanthini Services Pvt Ltd., for A.Y. 2000-01.
(2) It is submitted that, while deciding the appeal in favour of the above assessee company, the Hon'ble ITAT has not considered the facts correctly. The Hon'ble ITAT has failed to appreciate that the facts existing in the case of M/s. Impsat Ltd VS. ITO are different from those existing in the case of M/s.Tarachantini Services Pvt.Ltd.
(3) In the case relied upon by the ITAT viz. M/s.Impsat Ltd. Vs. lTG, income arose in the year relevant to the assessment year-2001-02 and the company-M/s.Impsat Ltd. was dissolved in Sept,2001.
Subsequently, the assessment was completed assessing the income accrued in the financial year 2000-01. However, the facts are distinguishable from the cited case as existing in the case of Mis. Tarachantini Services Pvt Ltd. Here, the assesseecompany was dissolved with effect from 10.05.2007. The assessment u/s 143(3) rws 147 in this case was completed on 31.12.2007 making an assessment of the income which arisen in the F.Y.1999-2000. It is pertinent to note that the company was very much in existence in the financial year 1999-2000 and had filed a return of income on 27.11.2000 declaring a loss of Rs.78,42,605/-. This Return of Income was also processed u/s.143(1) on 15.01.2002. It is only to re-assess the income relating to the F.Y. 1999-2000, the assessment was re-opened and the reassessment completed on 31.12.2007. It is pertinent to note that the assessment was reopened to consider the income which the assessee company had failed to disclose in its return of income filed for the assessment year 2000-01. Since, the facts are clearly distinguishable from the facts existing in the case relied upon by the Hon'ble ITAT, the decision of the ITAT to hold that the assessment made after dissolution is nullity is not acceptable. (4) The Hon'ble ITAT has dutifully followed the decision of the ITAT, Delhi Bench in the case of M/s. Impsat Ltd vs. ITO to arrive at the decision in the instant case, that the assessment passed after the dissolution of the entity is a nullity. The Hon'ble ITAT has not gone into the merits of the case and has upheld the appeal of the assessee :- 3 -: MP 228 & 229/11 company after considering only the additional ground of the assessee company that assessment passed after dissolution is a nullity. The Hon'ble ITAT has erred in holding that any assessment completed after dissolution is a nullity for the reasons mentioned below. (5) Chapter XV (Sub-divisions A to N) of the Income Tax Act containing sections 159 to 180A deals with the provisions with regard to assessment in special situations like assessment in the case of legal representatives, representative assessee and so forth. In sub division 'L' the nomenclature given in the Act is "Discontinuance of business or dissolution" wherein the provisions regarding discontinuance of business is given. These provisions are clearly applicable for dissolution of businesses also as is evident from the description given to Sub Division L of Chapter XV which is "Discontinuance of business or dissolution"
The Hon'ble ITAT has erred in holding that there is a distinction in the Income Tax Act with regard to discontinuance and dissolution of a business. However, as mentioned in the earlier para, the Income Tax Act makes no distinction from the discontinuance or dissolution of a business which is evident from the fact that provisions given in Sec.176(1) to 176(7) have been grouped under the nomenclature 'Discontinuance of business or dissolution' as indicated above. Therefore, the provisions which are applicable for discontinuance of a business squarely apply for the dissolution of a business. Since the provisions of Sec.176(1) to (7) provide for assessment of income arising in the year of discontinuance or even after discontinuance, the income arising in the year of dissolution or after dissolution are also assessable to tax and therefore the action of the Assessing Officer finalising the asessment after dissolution of the business in the instant case is legally valid and not a nullity.
(6) In view of the above, it is prayed that the Hon'ble ITAT may modify its earlier order and pass a suitable order in the instant case for the A.Y. 2000-01 based on the merits of the case. "
3. The above grounds are exactly similar and verbatim in M.P.No.229/Mds/2011. At the time of hearing, no one was present from the side of the assessee.
:- 4 -: MP 228 & 229/11
4. The ld.DR was heard on these petitions. The very perusal of the miscellaneous petitions give a feeling to any person of ordinary prudence that the petitioner wants to find fault with the finding given by the Bench. It appears that the Revenue is trying to distinguish the application of the Delhi Bench decision in the case of M/sImpsat Ltd vs ITO, on which reliance was placed to come to a conclusion. With reference to the provisions contained in section 159 to 180A, which was never a case before the Bench, the petitioner has tried to improve its case by way of these miscellaneous petitions. In fact, the Revenue wants the Tribunal to review its order. The wordings used in the miscellaneous petition, like in para 4, where it has been mentioned that the "Hon'ble ITAT has dutifully followed the decision of the ITAT, Delhi Bench in the case of M/s Impsat Ltd vs ITO to arrive at the decision in the instant case, that the assessment passed after the dissolution of the entity is a nullity" insinuate aspersions. The petition further reads that the Hon'ble Tribunal has committed error in holding that any assessment completed after dissolution is a nullity, as contrary to which the Delhi Bench of the Tribunal in M/s Impsat Ltd.'s case has decided the same issue in the existence of the same provisions which have been referred to in this petition and has come to a definite conclusion. This Bench by following the principle of stare decisis has taken a view in consonance therewith and has arrived at its :- 5 -: MP 228 & 229/11 conclusion. Under the provisions of section 254(2), only obvious, patent and apparent mistakes can be rectified and no party has a right to fight with the Bench by clamouring that look ! your order is not correct. The petition speaks through para 2 that the Bench has incorrectly appreciated the facts of the given case and has also failed to appreciate the facts existing in the case of M/s Impsat Ltd. vs ITO. We are afraid of this attitude of the authority filing this petition which seems to be despicable and seems to be aimed at showing that the Bench is ning-nong and does not understand both facts, precedents and law. The petition, in fact, tantamounts to an appeal. We have got no power to hear appeal against our own order. Therefore, we express our displeasure on the way in which the petitions have been drafted.
5. The Bench has followed the ratio decidendi laid down in the Delhi Bench decision (supra). The Delhi Bench was also aware of the fact as to what the term 'Discontinuance' or 'Dissolution' of business does mean. It is only after considering the correct contemplation of these terms, the Delhi Bench has taken a view. We had adopted and applied the ratio of that decision. The very reading of the petition shows that it is not a petition which can be entertained under the provisions of section 254(2) of the Act. No mistake apparent from :- 6 -: MP 228 & 229/11 record, which can be rectified u/s 254(2), has been made out. Accordingly, we dismiss these miscellaneous petitions. We refrain from imposing cost on the petitioner keeping in view the entirety of facts and circumstances of this case.
6. In the result, both the miscellaneous petitions stand dismissed.
Order pronounced in the open court on 9-12-2011.
Sd/- Sd/-
(DR. O.K. NARAYANAN) (HARI OM MARATHA)
VICE-PRESIDENT JUDICIAL MEMBER
Dated: 09th December, 2011
RD :
Copy to:
1. Petitioner
2. Respondent
3. CIT(A)
4. CIT
5. DR