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TMI Blog2015 (10) TMI 2297X X X X Extracts X X X X X X X X Extracts X X X X ..... der rule 27 of the ITAT Rules. In other words, if the respondent succeeds on the plea raised under rule 27, then the impugned order of the CIT(A) would stand and will have full effect insofar as it is against the revenue. Thus if the plea raised by the assessee is accepted as regards the validity of the assessment order then the effect of the same would be only to the extent that the appeal filed by the revenue will be defeated. - Decided against assessee and revenue both. - ITA No.7679/Mum/2010, Cross Objn.No.166/Bang/2014 - - - Dated:- 16-9-2015 - SHRI VIJAY PAL RAO, JUDICIAL MEMBER and SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER For The Revenue : Shri Harshad Vengarlekar (DR) For The Assessee : Shri M.M.Golvala ORDER Per VIJAY PAL RAO, JM: The appeal by the revenue and the cross objection by the assessee are directed against the order dated 4/8/2010 of the CIT(A)-6, Mumbai, for the assessment year 2003-04. 2. Since the assessee has challenged the validity of the reopening of the assessment in the cross-objection which goes to the root of the matter, therefore, we propose to first take up the cross-objection filed by the assessee. 3. There is a delay of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and accordingly the hearing of the appeal by the revenue was adjourned to 26/2/2013. The hearing has been adjourned on subsequent occasions as per the request of the assessee and finally the hearing was adjourned to 13/8/2015. In the mean time, the assessee has filed the CO on 13/8/2014. Thus, there was a delay of 803 days in filing the CO by the assessee after receiving the notice of the revenue s appeal on 2/5/2012. The reason for delay has been explained and stated by the assessee in the affidavit that since the appeal of the assessee was decided on merits by the CIT(A) in favour of the assessee therefore, the assessee was under the bonafide impression that nothing further remains to be done on the part of the assessee. The assessee has stated that only on the change of the authorized representative, assessee was advised to file the CO by challenging the validity of reopening of the assessment. It is pertinent to note that the assessee is not an ordinary or an individual who is not conversant with the provisions of law, as the assessee has been advised by best of the professional in the matter of taxation and litigation. The delay of 803 days is inordinate delay and the onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o book profit under section 115JB considering both the provisions are not ascertainable liabilities. The learned authorised representative of the assessee has pointed out that the CIT(A) has deleted the addition made by the AO regarding site restoration cost and the revenue has not challenged the order of the CIT(A) on this issue as the present appeal has been filed by the revenue only on the ground of deletion of addition made by the AO on account of provision for doubtful advances. Thus in the absence of any new material or information, the reopening is based on change of opinion. The learned authorised representative of the assessee has submitted that even on the issue of adjustment in the book profit on account of provision for doubtful advances was decided in favour of the assessee by the Hon'ble Supreme Court in the case of CIT vs. HCL Comnet Systems Services (305 ITR 409) as well as by the decision of the Hon'ble jurisdictional High Court in the case of Rallies India vs. ACIT (323 ITR 54). Thus, at the time of framing original assessment as well as at the time of reopening of the assessment, the issue was settled in favour of the assessee and the reopening is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al which hears that appeal would have no power to disturb or to set aside the order in favour of the appellant against which the appeal has been filed. The ground would serve only as a weapon of defence against the appeal. If the respondent has not himself taken any proceedings to challenge the order in appeal, the Tribunal cannot set aside the order appealed against. That order would stand and would have full effect in so far as it is against the respondent. The Tribunal refused to allow the assessee to take up this ground under an incorrect impression of law that if the point was allowed to be urged and succeeded, the Tribunal would have not only to dismiss the appeal, but also to set aside the entire assessment. The point would have served as a weapon of defence against the appeal, but it could not be made into a weapon of attack against the order in so far as it was against the assessee. 8. We find that the assessee has raised the issue of validity of reopening before the CIT(A). However, the CIT(A) did not go into the question of reopening of the assessment and therefore, the issue remains un-adjudicated as per para.7 of the CIT(A) s order as under: 7. The first add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount to the site restoration fund in each year. Therefore, the CIT(A) has given the finding that the provision is made for an ascertained liability and it was not unascertained liability. The revenue has accepted the finding of the CIT(A) even for the assessment year 2004-05 which has been followed by the CIT(A) for the year under consideration arising from the reopening of the assessment. Thus it is clear that this issue was settled in favour of the assessee by the CIT(A) for the assessment year 2004-05 and subsequently the reopening on the said issue is nothing but based on change of opinion which is not permissible under the provisions of the Act. 10. The second ground for reopening is regarding provisions for doubtful advances. It is pertinent to note that as per the Explanation to sec.115JB existed at relevant point of time, adjustment can be made while computing the book profit if there is a provision on account of unascertained liability. The provision for doubtful debts is not in the nature of provision for unascertained liability but it is the asset of the assessee on which the provision is made on account of doubtfulness of the recovery. Therefore, at that point of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been urged was that the retrospective amendment to the statutory provision in question would not have a bearing on the correctness of the recourse to Section 263 since on the date on which the power was exercised by the Commissioner, the legislative amendment had not been brought into force. The judgment of the Supreme Court notes firstly that on the date on which the Commissioner passed his order, two views on the word profit under Section 80HHC were possible and the provision itself had been amended on several occasions. The second ground which weighed with the Supreme Court was that the subsequent amendment in 2005 of the provisions of Section 80HHC, even though retrospective, would not attract the provisions of Section 263, particularly when the Court would have to take into account the position of law as it stood on the date when the Commissioner passed his order in purported exercise of his powers under Section 263. 19. In the present case, the principle of law which has been laid down by the Supreme Court in Max India (supra) would be attracted. On the date on which the Assessing Officer purported to exercise his power to reopen the assessment under Section 147, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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