TMI Blog2020 (2) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. CIT(A)-18, New Delhi relating to Assessment Year 2011-12 on the following grounds:- 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned reassessment order passed by Ld. AO u/s 143(3)/147 and that too without assuming jurisdiction as per law and without complying the mandatory conditions of section 147 to 151 of the Income Tax Act, 1961. 2. That in any case and in any view of the matter, Ld. CIT(A) has erred in law and on facts in not quashing the impugned reassessment order passed by Ld. AO u/s 147/143(3) and that too without assuming jurisdiction as per law and without serving the mandatory notice u/s 148, 143(2) and 142( 1) of the Income Tax Act, 1961. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in not allowing the deduction of interest paid on Housing Loan amounting to ₹ 8,01,501/- while calculating Income under the head House property and that too by recording incorrect facts and findings and without observing the principles of natural justice. 4. That in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. At the time of hearing, learned counsel for the assessee stated that the issue in dispute has already been adjudicated and decided in favour of the assessee by various Benches of the ITAT and requested that respectfully following the orders passed by the ITAT, the addition in dispute may be deleted and appeal filed by the assessee may be allowed. In support of his contention he filed a copy of common dated 20.02.2018 order passed by the ITAT Jaipur Benches, Jaipur in ITA No. 92/JP/2015 for Assessment Year 2008-09 in the case of M/s Rajasthan State Industrial Development Investment Corp. Ltd., Udyog Bhawan, Tilk Marge, C-Scheme, Jaipur vs. The ACIT, Circle-6, Jaipur and ITA No. 206/JP/2015 for Assessment Year 2008-09, in the case of The DCIT Circle-6, Jaipur vs. M/s Rajasthan State Industrial Development Investment Corp. Ltd., Udyog Bhawan, Tilak Marge, C-Scheme, Jaipur and Indira Exports Private Limited vs. ACIT in ITA Nos. 391/2007, 338/2007 and 294/2006 dated 31.10.2011 (Indore) which the assessee has attached in the paper book at pages 11 to 16 and also the decision of Delhi Bench in the case of Anil Gupta vs. AO, (2005) 96 TTJ 0798 (Delhi) which the assessee has atta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er provisions of Sec. 80IA CS before the profit of the subsequent year as under:- S. No. Unit Initial Year Profit of the year 08-09 Loss of the A.Y. 07-08 1. EPIP Sitapura-1st A.Y. 2005-06 ₹ 16770973 ₹ 5020008 2. Borhada A.Y. 2005-06 ₹ 38561187 ₹ 8614556 Total 1,36,34,564 It is apparent from the notice u/s 154 of the Act that the AO proposed to rectify the mistake in respect of the loss of Rs. ₹ 1,36,34,564/- to be adjusted against the profits of the eligible undertaking for deduction u/s 80IA of the Act. In response to the said notice issued u/s 154 the assessee filed its reply dated 15.06.2012 as under:- We are in receipt of your aforesaid notice in which you have propose to reduce deduction u/s 80IA by ₹ 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above facts and circumstances I have sufficient reasons to believe that an amount of ₹ 1,36,34,565/- has escaped assessment within the meaning of sec. 147 of the I.T. Act, 1961. 3. Issue notice u/s 148 for the A.Y. 2008-09 in which the sand transaction falls. It is apparent that the reasons for issuing the notice u/s 154 as well as the reasons recorded for reopening of the assessment u/s 147/148 of the Act are same to re-compute the deduction u/s 80IA after adjustment of loss of ₹ 1,36,34,564/-. The assessee has raised a legal objection against the initiation of proceeding u/s 147/148 while the proceeding u/s 154 of the Act were pending and not reached to the finality either by dropping the same or passing any order u/s 154 of the Act, the initiation of proceeding u/s 147/148 is not permissible. The Bench asked the ld. CIT DR to produce the assessment record to show that the status of the proceeding u/s 154 on the date of initiating of proceedings u/s 147/148 of the Act. It was found that the AO has not passed any order either for dropping the proceeding or concluding the proceeding u/s 154 prior to issuing notice u/s 148 of the Act. Thus, it is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upra), when once the assessment order has been the subject matter of rectification under Section 154, the self same issue cannot be the subject matter of reassessment by taking recourse to Section 147 of the Act. Thus, on the facts that are available today, as far as the assessment year 2003-2004 is concerned, there are two proceedings, one under Section 154 and another under Section 147 of the Act. The jurisdiction given under both the Sections thus operating on different fields, (as far as this assessment year is concerned), and with the doubt in the mind of the Officer as to which direction he has to go, I have no hesitation in holding that the notice lacks the very basis for assumption of jurisdiction under Section 147 of the Act. For the reasons that there cannot be two parallel proceedings on the self same issue as one based on the view that there were materials available on record which warranted exercise of jurisdiction under Section 154 and the other initiated under Section 147 that there was escapement of income from tax on account of the failure of the assessee from disclosing the full and correct particulars, I have no hesitation in quashing the notice on reassessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, hold the same as void ab initio and quash the proceedings initiated by the Assessing Officer under section 147. Accordingly, this issue is decided in favour of the assessee and Ground Nos. 1 to 3 are allowed. As the assessee succeeds on the issue of the validity of the notice under section 148, we do not consider it necessary to go into the merits of the case. It is manifest from the record that all relevant materials and facts necessary for assessments were available with the Assessing officer at the time of original assessee passed u/s 143(3) of the Act and further the claim of deduction allowed while passing the order u/s 143(3) would not be excessive even if proposed adjustment of loss of previous year is made against the profit of the current year. The assessee reminded the AO in its reply to the notice u/s 154 that even after the adjustment of loss of ₹ 1.36 Crores allowable deduction would be more than ₹ 95.11 Crores allowed in the original assessment. Thereafter, the AO without bringing the proceedings u/s 154 of the IT Act to a logical conclusion had initiated the proceedings u/s 147 of the Act on the basis of the same fact and material available on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of opinion. 46. In normal circumstances, on receipt of a notice of reassessment under section 148 of the Income-tax Act, the assessee should file a return, ask for the reasons and then file its objection. However, where the condition precedent for issuance of a notice are absent, the notice might be challenged by filing a writ petition under article 226 of the Constitution of India. 47. In Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 201, the Supreme Court held that in exercise of power under article 226, the court might examine whether the conditions precedent for exercise of jurisdiction to reassess existed. The Supreme Court, inter alia, held as follows (page 207 and 208) The existence of such alternative remedy is not however always a sufficient reason for refusing a party quick relief by a writ or order prohibiting an authority acting without jurisdiction from continuing such action. In the present case, the company contends that the conditions precedent for the assumption of jurisdiction under section 34 were not satisfied and came to the court at the earliest opportunity. There is nothing in its conduct which would justify the refusal or proper rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53. For the reasons discussed above, the impugned notice under section 148 of the Income-tax Act is set aside. The writ petition is disposed of accordingly. In view of the above discussion as well as the decisions cited (supra) we are of the considered opinion that the reopening is not sustainable when the proceedings u/s 154 of the Act were pending on the same issue. Accordingly, we set aside the initiation of proceeding u/s 147/148 of the Act and consequential reassessment order. As we have set aside the initiation of proceeding u/s 147/148 and consequential reassessment order, therefore, the other grounds raised on the merits becomes infructuous. In the result, the appeal of the assessee is allowed and Revenue appeal is dismissed. Order pronounced in the open court on 20/02/2018. 6. Keeping in view the facts of the present case and the order dated 20.02.2018 by the ITAT Jaipur Benches as reproduced above, I am of the view that the Assessing Officer has reopened the case of the assessee when the proceedings under section 154 of the I.T. Act, 1961 were pending on the same issue. The ITAT Jaipur Benches has decided this issue in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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