Income Tax Appellate Tribunal - Chennai
Opti Products Pvt. Ltd., Chennai vs Ito, Chennai on 2 February, 2017
आयकर अपीलीय अिधकरण, 'सी' यायपीठ, चे ई
IN THE INCOME TAX APPELLATE TRIBUNAL
'C' BENCH, CHENNAI
ी एन.आर.एस. गणेशन, याियक सद य एवं
ी िड.एस. सु दर सह, लेखा सद य के सम
BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND
SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER
M.A. No. 229/Mds/2016
[ in I.T.A. No. 1320/Mds/2016]
Assessment Year: 2008-09
M/s. Opti Products Pvt. Ltd., The Income Tax Officer,
No.81B, II Main Road, v. Company Ward - 5(1),
Ambattur Industrial Estate, Chennai-34.
Chennai - 600 028.
PAN: AAACO1099E
(Applicant) ( यथ /Respondent)
Applicant by : Shri D. Anand, Advocate
Respondent by : Shri K. Ravi, JCIT
सन
ु वाई क तार ख/Date of Hearing : 20.01.2017
घोषणा क तार ख/Date of Pronouncement : 02.02.2017
आदे श /O R D E R
PER D.S.SUNDER SINGH, ACCOUNTANT MEMBER:
The assessee filed the present miscellaneous petition against the order passed by this Tribunal in ITA No.1320/Mds/2016 for the assessment year 2008-09.
2. In the petition filed by the assessee, the assessee raised the following objections:
2 M.A. No. 229/Mds/20167. The appeal of the revenue came up for hearing before the "C" Bench of the Hon'ble Income Tax Appellate Tribunal, Chennai on 25.07.2016.
The issue raised by the revenue in the above appeal is only pertaining to re-opening of assessment. To the surprise of the petitioner, the Hon'ble Income Tax Appellate Tribunal has passed a order dated 29.07.2016 allowing the revenue appeal not only on the issue of re- opening but also on merits. Neither the CIT(A) adjudicated the petitioners appeal on merit nor the revenue has preferred an appeal on merit or raised any ground/argued the case on merits.
8. Further it is humbly submitted that the following mistakes are apparent from the order of the Tribunal
a) It was under scrutiny proceedings that the petitioner company was allowed relief under Section 80IB(4)(iii). A specific question with regard to the petitioners claim and details with regard to claim of deduction under Section 80IB(4)(iii) was asked. The petitioner company vide its letter dated 25.11.2009 had specifically brought to the notice of the Assessing Officer that it had only applied for approval with DIPP under Ministry of Commerce and that the said application is under process.
b) The petitioner company had never made a claim under 80 IB(4)(iii) by stating that the petitioner company was granted notification by Ministry of Commerce.
c) In fact the petitioner company was honest enough to disclose that it had not have approval from Ministry of Commerce but its application was only under process. (vide letter dated 25.11.2009)
d) Non-receipt of Notification (petitioners application was in process) was brought to the notice of the Assessing Officer as early as 25.11.2009 during the regular scrutiny proceedings and therefore the 3 M.A. No. 229/Mds/2016 same would not constitute tangible material for the purpose of re- opening.
e) Non-consideration of letter dated 25.11.2009 before arriving a finding that Non-receipt of notification would constitute tangible material is a mistake of fact.
f) Thus it would be a mistake of fact to state that the petitioner company has made a wrong claim under Section 80 IB(4)(iii) without obtaining due notification from the Central Government as required under Section 80IA(4) which is a precondition for deduction that it has come to the notice of the AO only subsequently and that too only during the scrutiny proceedings for the A.Y. 2009-10 when the petitioner had un ambiguously stated vide his letter dated 25.11.2009 that it had only applied for the notification to the Ministry and it is only under progress.
g) The Hon'ble Tribunal ought to have seen that the AO has taken a view only after the petitioner's letter dated 25.11.2009 and it was open to the department to seek relief under Section 263 if the order was erroneous or prejudicial to the interest of the revenue.
h) Further the Hon'ble Tribunal ought not to have decided the issue on merits when the same has not arisen out of the CIT (A) order and when the department has not agitated the issue before the Hon'ble ITAT on merits. The Hon'ble ITAT ought to have remanded the case to the file of the CIT(A) for adjudicating the case on merit after giving a finding on the legal issue.
i) The Hon'ble Tribunal ought to have seen that re-opening of assessment of same set of facts which was originally available at the time of scrutiny assessment would constitute a change of opinion and that is a settled law that re-opening of assessment based on change of opinion is not valid in law.
4 M.A. No. 229/Mds/20163. During hearing the Ld. AR referred para 6 of the Tribunal order and stated that Hon'ble Income Tax Appellate Tribunal extracted the reasons for reopening the assessment from the CIT (Appeals) order which was related to the assessment year 2007-08 but not the assessment year 2008-09 which is under appeal. However, to the query raised by the bench, the Ld. AR fairly conceded that the reasons for reopening of the assessment for 2008-09 also were the same and there was no change in the reasons. In the ld.CIT(Appeals) order in page No.15, 2nd paragraph , it was stated as flows:
"In this regard AO has supplied reasons for reopening in the applicants case for A.Y.2008-09 which is reproduced as under:
"With reference to your request to furnish the reason for reopening the assessment in your case for the assessment year 2007-08, the said reason is furnished below:
"the assessee filed its return of income for the A.Y. under consideration on 19.10.2007 declaring total income of NIL under normal computation method and total income of Rs.3,53,44,300 under Book Profits Method. It was seen from the return of income that the assessee had claimed deduction u/s.80IA(4)(iii) of Rs.3,89,01,728. This deduction was claimed by the assessee on "Prince Tatia Info Park", purportedly developed and operated by the assessee company. To claim the said deduction in respect of the Info Park, the assessee ought to have satisfied the following conditions:5 M.A. No. 229/Mds/2016
(ii) It should develop, develop and operate or maintain and operate an industrial park notified by the Central Government in accordance with the scheme framed notified by the Central Government for such purpose.
(ii) the industrial park should begin to operate, develop, etc, at any after 1.4.1997 but before 31.3.2007 [in accordance with industrial park scheme, 2002-the scheme under which the assessee had claimed deduction u/s 80IA(4)(iii).
During the course of scrutiny proceedings for the assessment year 2009-10, it was learnt that the assessee's undertaking has not been notified by Central Government in accordance with Industrial Park Scheme, 2002. Thus, not having satisfied the basic condition of being notified by the Central Government to develop and operate the "Prince Tatia Info Park". The assessee is not eligible for the relief envisaged by sec.80IA(4)(iii) is not in order and requires to be disallowed. However, in the scrutiny proceedings u/s. 143(3), the assessee had been allowed this deduction of Rs.3,89,01,728. This has resulted in escarpment of income to the tune of Rs.3,89,01,728".
4. The Tribunal has extracted the above paragraph from the order of CIT(Appeals) from page No.6 para No.6 for the sake of convenience and clarity and discussed the issue in detail in subsequent paragraphs and held that the notice issued u/s 148 is valid.. There was no change in the facts and the reasons recorded for reopening the assessment for the assessment year 2008-09. This 6 M.A. No. 229/Mds/2016 fact has been accepted by the AR during the appeal. Therefore, this argument of the assessee is not tenable and rejected.
5. No argument was advanced by the assessee for point No.8, though, the assessee has raised various objections from point No. 8(a) to( i) during the hearing of M.A. All the issues were addressed in the order of the ITAT. The core issue in this case is validity of notice issued under Section 148 of the Act which was annulled by the Ld. CIT (Appeals). This Tribunal has relied on the decision of the Hon'ble Jurisdictional High Court in the case of M/s A.L.A firms vs CIT 102 ITR 622 and held that the notice issued under Section 148 is valid and accordingly set aside the order of the Ld. CIT (Appeals) annulling the assessment. Therefore we hold that there is no mistake in the order passed by this Tribunal in upholding the notice u/s148 of the I.T.Act which needs modification.
6. The next issue raised by the assessee was that the Hon'ble ITAT has passed the order dated 29.07.2016 allowing the Revenue appeal not only on the issue of reopening but also on merits. Neither the CIT (Appeals) adjudicated the appeal on merits nor the Revenue had preferred the appeal on merit. According to the Ld. AR the case should be remitted back to the file of CIT(Appeals) to decide on merits.
7 M.A. No. 229/Mds/20167. This issue has been considered by us and heard the arguments of both the parties. As per the order of the ITAT, the issue decided by this tribunal was only in relation to the issue of notice 148 of the Act but not on merits. The assessee has filed the appeal before the CIT(A) both on merits and on technical reasons. The Ld.CIT(A) decided the technical issue but not decided the issue on merit.
Therefore we modify the order of this Tribunal in ITA No.1320/Mds/2016 restoring the matter back to the CIT (Appeals) with direction to decide the case on merits.
8. In the result, the miscellaneous petition of the assessee is partly allowed.
Order pronounced on 2nd February, 2017 at Chennai.
Sd/- Sd/-
(एन.आर.एस. गणेशन) (िड.एस. सु दर सह)
(N.R.S. Ganesan) (D.S. Sunder Singh)
याियक सद य/Judicial Member लेखा सद य/Accountant Member
चे ई/Chennai,
दनांक/Dated, the 2 February, 2017.
nd
JR.
आदेश क ितिलिप अ ेिषत/Copy to:
1. Applicant 2. यथ /Respondent 3. आयकर आयु" (अपील)/CIT(A)
4. आयकर आयु"/CIT 5. िवभागीय ितिनिध/DR 6. गाड' फाईल/GF.