Income Tax Appellate Tribunal - Delhi
Vodafone Essar South Ltd.,, New Delhi vs Department Of Income Tax on 15 July, 2011
ITA No.4502/Del/2011
Asstt. Year: 2004-05
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'H' NEW DELHI
BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND
SHRI CHNADRAMOHAN GARG, JUDICIAL MEMBER
ITA NO. 4502/DEL/2011
ASSTT. YEAR: 2004-05
Jt. Commisisoner of Income Tax, vs M/s Vodafone Essar South Ltd.,
Circle 17(1), New Delhi. (Formerly Hutchison Essar South Ltd.),
C-48, Okhla Industrial Area, Phase-II,
New Delhi-110020
(Appellant) (Respondent)
Appellant by: Mrs. Shumana Sen, Sr.DR
Respondent by: Shri Sanat Kapoor
ORDER
PER CHANDRAMOHAN GARG, J.M.
This appeal has been preferred by the Revenue against the order of CIT(A)-XIX, New Delhi dated 15th July 2011 for AY 2004-05.
2. The grounds of appeal read as under:-
"1. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax(A) has erred in quashing the order u/s 263 for lack of jurisdiction by ignoring the Hon'ble Apex Corut decision in the case of M.s Gee Vee Enterprises vs Addl. Commissioner of Income Tax 99 ITR 375.
2. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax(A) has erred in relying on the order of the Hon'ble ITAT in ITA No. 2 ITA No.4502/Del/2011 Asstt. Year: 2004-05 3238/Del/2009 dated 24.06.2011 which has not been accepted by the Department."
3. Brief facts giving rise to this appeal are that the assessee's return was processed u/s 143(1) of the Act, 1961 (for short the Act) and his case was selected for scrutiny and notices u/s 143(2) and 143(3) were issued against the assessee. The AO made certain disallowances under the normal provisions of the Act resulting in reduction of losses to Rs.2,29,92,11,019 instead of returned loss of Rs.2,34,75,55,861.
4. Subsequently, the CIT(A)-IV, New Delhi vide order dated 30.03.2009 u/s 263 of the Act set aside the above assessment order dated 29.12.2006 passed u/s 143(3) of the Act with certain directions. Consequent to the order of CIT(A)-IV, New Delhi u/s 263 of the Act, the AO passed assessment order on 31.12.2009 by adding certain amounts. The aggrieved assessee filed an appeal before the CIT(A)-XIX, New Delhi dated 15.07.2011 allowing the appeal of the assessee. Now, the revenue is in appeal before this Tribunal.
5. We have heard rival arguments of both the parties and carefully perused the record. The DR submitted that the CIT(A) has erred in quashing the order u/s 263 for lack of jurisdiction by ignoring the judgement of Hon'ble Supreme Court in the case of Ms/ G.V. Enterprises vs ACIT 99 ITR 375(SC). The DR also submitted that the CIT(A) has also erred in 3 ITA No.4502/Del/2011 Asstt. Year: 2004-05 relying on the order of the ITAT Delhi 'H' Bench passed in ITA No.3238/Del/2009 dated 23.6.2011 as the same has not been accepted by the department.
6. Replying to the above contentions, the assessee's representative submitted a copy of the judgment of ITAT Delhi 'H' Bench in ITA no.3238/Del/2009 (supra). The AR submitted that when the order of Commissioner of Income Tax(A)-IV, New Delhi u/s 263 of the Act has been quashed by the ITAT for lack of jurisdiction, then in the absence of any other order, the Commissioner of Income Tax(A)-XIX, New Delhi had no option but to follow it verbatim. Therefore, the impugned order is not perverse or illegal and at the same time the appeal of the Revenue is devoid of any merit.
7. On careful consideration of the facts and circumstances of this case, we observe that on specific query from both the parties, we have been informed that there is no subsequent order to the order of ITAT 'H' Bench passed in ITA No. 3238/Del/2009 dated 24.06.2011 in assessee's own case for AY 2004-05. On bare reading of the impugned order, we observe that the Commissioner of Income Tax(A) held that since the order dated 30.02.2009 passed u/s 263 is vacated, which was the basis of subsequent assessment order dated 31.12.2009, then the order passed u/s 143(3)/263 of 4 ITA No.4502/Del/2011 Asstt. Year: 2004-05 the Act does not survive and he finally held that the impugned assessment order dated 31.12.2009 stood cancelled.
8. At this stage, it would be appropriate to reproduce the submissions of the AR vide letter dated 14.07.2011 before the Commissioner of Income Tax(A) which reads as under:-
"We refer to the captioned appeal and the hearing held today at your office with respect to aforesaid appeals.
In this connection, we wish to submit that the captioned appeal was filed by VESL against the order passed by the learned Deputy Commissioner of Income Tax, Circle 17(1) ['learned AO'] under section 143(3) read with section 236 of the Income Tax Act, 1961 ('Act') for the subject A Y. The aforesaid assessment order was passed pursuant to the revisionary order passed by the Commissioner of Income Tax -IV(CIT -IV), for the subject AY on March 30, 2009 (Copy of the order passed by Hon'ble CIT-IV under section 263 of the Act for the subject AY is annexed as Annexure 1).
-Pursuant to aforesaid revisionary order of the Hon'ble CIT -IV, VESL preferred an appeal before the Income Tax Appellate Tribunal ['Tribunal'], challenging the validity of initiation proceedings under section 263 of the Act, as well as the revisionary/remand order of the CIT- IV under section 263 of the Act. The Hon'ble Tribunal, vide order dated June 24,2011, quashed the order of Hon'ble CIT-IV on the ground of lack of jurisdiction (Copy of the order passed by Hon'ble Tribunal is annexed as Annexure 2).
Therefore, we wish to submit that the present appeal has become infructuous and have to be disposed off accordingly."5 ITA No.4502/Del/2011 Asstt. Year: 2004-05
9. The ITAT Delhi Bench 'H' in ITA No. 3238/Del/2009 dated 24.06.2011 observed as under:-
"6.1 Considering the present case on the anvil of the aforesaid case law, we find that Assessing Officer did enquire on all the three items and assessee responded by giving the breakup of expenditure. Though, assessment order does not give reason for allowing the expenditure and Assessing Officer did not make further enquiry, it cannot be said there was lack of enquiry in this case. In this view of the matter, the ratio from the Hon'ble Jurisdictional High Court drawn above is applicable fully. There is due enquiry by the Assessing officer, though it has been considered to be inadequate by the CIT, recourse u/s 263 cannot be made.
7. In the background of the aforesaid discussion and precedent, and in our considered opinion, the order u/s 236 of the IT Act passed by the Ld. Commissioner of lncome Tax is liable to be quashed and accordingly, the same is quashed for lack of jurisdiction."
10. As we have observed hereinabove that the DR expressed his inability to submit any order or jurisdiction against the above order of the ITAT 'H' Bench. In view of above, we have no reason to see any perversity or illegality in the impugned order as the Commissioner of Income Tax(A) is bound to follow the decision of the Tribunal. It is open to the revenue to avail the available course of remedy against the order of the ITAT 'H' Bench but the Commissioner of Income Tax(A) cannot ignore it as the same is binding on him against the order of the ITAT 'H' Bench (supra). 6 ITA No.4502/Del/2011 Asstt. Year: 2004-05
11. Accordingly, we have no reason to interfere with the impugned order and we are inclined to hold that this appeal is devoid of merit and deserves to be dismissed.
12. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 16.11.2012.
Sd/- Sd/-
(SHAMIM YAHYA ) (CHANDRAMOHAN GARG)
ACCOUNTANT MEMBER JUDICIAL MEMBER
DT. 16th November, 2012
'GS'
Copy forwarded to:-
1. Appellant
2. Respondent
3. Commissioner of Income Tax(A)
4. C.I.T. 5. DR
By Order
Asstt.Registrar