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TMI Blog2015 (5) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (Appeals) in the order dated 25.6.2013 in the case of M/s Devrekha Engineers considering section 150 of the Act, assessment/reassessment might be permissible. However, when the direction of which the effect was to be given while initiating assessment/ reassessment proceedings for AY 2005-06 itself has been set aside, there was no question of giving any effect to the said direction which has been set aside by the learned Tribunal. Under the circumstances, on the aforesaid ground alone, the impugned reassessment proceedings/notice under section 148 to reopen the assessment proceedings for AY 2005-06 deserves to be quashed and set aside. - Decided in favour of assessee. - Special Civil Application No. 1620 of 2015 - - - Dated:- 22-4-2015 - M. R. Shah And S. H. Vora,JJ . For the Appellant : Mr B S Soparkar, Adv. For the Respondent : Mr Sudhir M Mehta, Adv. ORDER (Per : Honourable Mr. Justice M. R. Shah) 1. Rule. Learned advocate Shri Sudhir Mehta waives service of notice of rule on behalf of the respondent. 2. With the consent of learned advocates appearing for the respective parties, the matter is taken up for final hearing today. 3. By way of presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22.8.2013. That thereafter, the petitioner raised objections against reopening and by order dated 15.9.2014, the Assessing Officer has disposed of the said objections and overruled the said objections raised by the petitioner - assessee raised against reopening of the assessment for AY 2005-06. Hence, the petitioner has preferred the present petition under Article 226 of the Constitution of India challenging the impugned reassessment proceedings. 6. At this stage, it is required to be noted that in the meantime, an order was passed by the learned CIT (Appeals) dated 25.6.2013 in which the learned CIT (Appeals) issued direction to reopen the assessment for AY 2005-06 in the case of the present assessee and even on merit also, the said assessee M/s Devrekha Engineers carried the matter before the learned Income Tax Appellate Tribunal (for short learned Tribunal ) and the learned Tribunal by order dated 27.3.2014 allowed the said appeal by observing that reassessment proceedings in the case of said assessee M/s Devrekha Engineers was beyond the period of limitation as prescribed under section 147 of the Act and therefore, deleted the disallowance. Simultaneously, learned Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is submitted that in the present case, the direction/order of which the effect is given in exercise of powers under section 150 of the Act by reopening the assessment for AY 2005-06 itself has been set aside by the learned Tribunal and confirmed by this Court, in that case, the basis for invoking the powers under section 150 of the Act would not be existed and/or survive and therefore, the impugned reopening proceedings deserves to be quashed and set aside. Making above submissions, it is requested to allow the present petition. 9. Shri Sudhir Mehta, learned advocate appearing on behalf of the respondent revenue has tried to oppose the present petition and justify the reopening proceedings. He has relied upon the Affidavit-in-reply filed by the Assessing Officer. He has tried to submit on merits, however, as this Court is required to consider whether the reopening proceedings, which are admittedly beyond the period of six years issued by invoking section 150 of the Act, are justified or not. Unless and until it is found that assumption of jurisdiction for reopening is justified and/or permissible, this Court is not required to go into the merit of the claim/case at all. He h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I,Surat vide his order No.CAS-l/ 282/ 11-12 dt.25.06.2013 enhanced the addition made by the AO and partly allowed the appeal of the assessee. ii. The assessee M/ s. Devrekha Engineers Pvt. Ltd failed to submit any proof of payment to GIDC or any document copy in support of its claim regarding cost of purchase of land and thus the indexed cost of acquisition of ₹ 59,20,188/- cannot be permissible. The property rights in question were vested in the sister concern and therefore, LTCG/STCG is to be taxable only in the hands of sister concern. The Ld.CIT(A) has given directions u/s.150(1) to issue notice. u/s.148 of the I.T.Act in the case of Shri Devendra S. Naik for A.Y.2005-06 . iii. M/s. D.S. Synthetics was technically only a licensee in the books of accounts of GIDC. The erstwhile M/s. D.S. Synthetics was converted into proprietorship concern of Shri Devendra S. Naik during A.Y.2005-06 as application was filed vide letter dt.16.10.2004 requesting for change of in Constitution of M/s. D.S. Synthetics from partnership to proprietorship concern. Eventhough the change in the constitution of the firm M/s. D.S. Synthetics had taken place in F.Y.1991- 92, the transfer had take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ship concerned. Even earlier the change in the constitution of the firm M/s D S Synthetics had taken place in FY 1991-92. However, the transfer has taken place in A.Y. 2005-06 after its conversion into Proprietor ship concern. Therefore, notice u/s 148 for Asstt Year 2005-06 has to be issued in the case of Devendra S Naik. The issue of cost of acquisition shall be examined by the A0 on the basis of evidence that may be furnished by Shri Devendra S Naik in his re - assessment proceedings. The issue of deemed dividend may also be examined as some payments have been made to Shri Devendra S Naik by appellant Co in Asstt Year 2005-06. It needs to mentioned that as per GlDC records total payment is of ₹ 39,02,001/- only (para 7.8 supra): 14. Further, it is required to be noted and it is not in dispute that the aforesaid order passed by the learned CIT (Appeals) in the case of M/s Devrekha Engineers came to be challenged by the said assessee before the learned Tribunal by way of ITA No.2090/Ahd/2013 and not only the reassessment in the case of the aforesaid assessee came to be held to be beyond the scope of section 147 of the Act and consequently, held to be invalid, even, the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or revision in any proceedings under any other law. Therefore, at the time when the reassessment proceedings for AY 2005-06 by impugned notice dated 30.7.2013 was initiated, it can be said that it can be argued that to give effect to direction issued by the learned CIT (Appeals) in the order dated 25.6.2013 in the case of M/s Devrekha Engineers considering section 150 of the Act, assessment/reassessment might be permissible. However, when the direction of which the effect was to be given while initiating assessment/ reassessment proceedings for AY 2005-06 itself has been set aside, there was no question of giving any effect to the said direction which has been set aside by the learned Tribunal. Under the circumstances, on the aforesaid ground alone, the impugned reassessment proceedings/notice under section 148 of the Act (Annexure A to the petition) to reopen the assessment proceedings for AY 2005-06 deserves to be quashed and set aside. 16. For the reasons stated above, the petition succeeds. The impugned notice dated 30.7.2013 issued under section 148 of the Act at Annexure A to the petition and the reopening of the assessment for AY 2005-06 is hereby quashed and set aside. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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