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TMI Blog2019 (9) TMI 1284X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly, have to be answered in favour of the Appellant and against the Respondent-Revenue. - Tax Appeal No.63 Of 2007 - - - Dated:- 30-8-2019 - M.S. Sonak And Nutan D. Sardessai, JJ. Mr. Rafiq Dada, Senior Advocate with Mr. Nishant Thakkar, Ms. Jasmin Amalsadvala and Ms. Vinita Palyekar, Advocates for the Appellant. Ms. Susan Linhares, Standing Counsel for the Respondent. JUDGMENT M.S. Sonak, Heard Mr. Rafiq Dada, learned Senior Advocate with Mr. N. Thakkar and Ms. V. Palyekar for Appellant and Ms. Susan Linhares, Standing Counsel for the Respondent. 2. This Appeal was admitted on 20th November, 2007 on the following substantial questions of law : (a) Whether on the facts and in the circumstances of thecase, the Income-Tax Appellate Tribunal ought to have held that since the respondent did not furnish to the appellant the reasons recorded for reopening of the assessment for the assessment year 1997-98 and did not comply with the mandatory preconditions laid down by the Hon'ble Supreme Court in GKN Driveshaft vs. ITO 259 ITR page 19, the reassessment order was bad in law as being opposed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income-tax (Appeals) VI. In the Appeal, the Appellants specifically urged that the Assessing Officer had breached the mandatory conditions laid down by the Hon ble Supreme Court in the cases of GKN Driveshafts (India) Ltd. vs. Income Tax Officer ors. (259 ITR 19(SC) on the issue of reopening of assessment. (H) The Commissioner (Appeals), vide order dated 30th November, 2004, dismissed the Appeal, holding that the assumption of the jurisdiction by the Assessing Officer under Section 11 of the said Act, was valid. (I)The Appellants, aggrieved by the Judgment and Order dated 30th November, 2004, preferred an appeal to the Income Tax Appellate Tribunal (ITAT). However, by Judgment and Order dated 4th April, 2005, the ITAT was pleased to dismiss the Appellant s Appeal. (J) Hence the present Appeal, which came to be admitted on 20th November, 2007 on the aforesaid substantial questions of law. 4. Mr. Rafiq Dada, learned Senior Advocate for the Appellants, submitted that in case the first substantial question of law is answered in favour of the Appellant and against the Respondent Revenue, then, there will be no necessity to advert to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant, then, at least. in this appeal, there is no necessity of adverting to the second substantial question of law. 7. Ms. Linhares, learned Standing Counsel for the Respondent submitted that the decision of the Hon ble Supreme Court in the case of GKN Driveshafts (India) Ltd. (supra), as well as the said two decisions relied upon by Mr. Dada relate to the provisions of the Income Tax Act. She submits that in the present case, we are concerned with the provisions of the Expenditure Act. She submits that the rulings cited, therefore, are not applicable or, in any case, are inapplicable with all their vigour. She submits that along with the notice dated 13th March, 2003, the Assessing Officer had furnished reasons to the Assessee and, therefore, there was no question of furnishing any further reasons to the Assessee. She submits that in the assessment order dated 26th March, 2004, the Assessing Officer has dealt with and disposed of the objections raised by the Appellant to the reopening of the assessment. She, therefore, submits that without prejudice to the applicability of the decisions cited by Mr. Dada, there is substantial compliance. 8. Ms. Linhare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 26th March, 2004, no doubt, deals with the objections raised by the Appellant and purports to dispose of the same. Ms. Linhares contends that this is a sufficient compliance with the procedure set out in GKN Driveshafts (India) Ltd. (supra), assuming that the same is at all applicable to the proceedings under the said Act. Mr. Dada, however, submits that such disposal in the assessment order itself does not constitute the compliance with the mandatory conditions prescribed by the Hon ble Supreme Court in GKN Driveshafts (India) Ltd. (supra). In support, as noted earlier, Mr. Dada relies upon Bayer Material Science (P) Ltd. (supra) and KSS Petron Private Ltd. (supra) . 14. The contention of Ms. Linhares that the decisions relied upon by Mr. Dada relate to the provisions of the Income Tax Act and, therefore, are not applicable to the proceedings under the Expenditure Tax Act, cannot be accepted. In the first place, the provisions relating to reopening of assessment are almost pari materia. Secondly, in so far as Assessment Year 1995-96 is concerned, the Respondent applied the very same ruling in GKN Driveshafts (India) Ltd. (supra) to hold that the notice of reopen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cience (P) Ltd. (supra) and KSS Petron Private Ltd. (supra) before the Division Benches of our High Court at Bombay. 20 . In Bayer Material Science (P) Ltd. (supra), by a notice dated 6/2/2013, the Revenue sought to reopen the assessment in the year 2007-08. The Assessee filed a revised return of income and sought for reasons recorded in support of the notice dated 6.2.2013. The reasons were furnished only on 19.3.2015. The Assessee lodged objections to the reasons on 25th March, 2015. The Assessing Officer, without disposing of the Petitioner s objections, made a draft assessment order dated 30th March, 2015, since this was a matter involving transfer pricing. In such circumstances, the Division Bench of this Court, set aside the assessment order by observing that the Court was unable to understand how the Assessing Officer could, at all, exercise the jurisdiction and enter upon an inquiry on the reopening notice before disposing of the objections on the reasons furnished to the Assessee. This Court held that the proceedings initiated by the Transfer Pricing Officer (TPO), on the basis of such a draft assessment order, were without jurisdiction and quashed the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing the due procedure. This would lead to unnecessary harassment of the Assessee by reviving stale/ old matters. 24. According to us, the rulings in Bayer Material Science (P) Ltd. (supra) and KSS Petron Private Ltd. (supra) afford a complete answer to the contentions raised by Ms. Linhares in defence of the impugned order. 25. Since, in the present case, the Assessing Officer has purported to assume the jurisdiction for reopening of the assessment, without having first disposed of the Assessee s objections to the reasons by passing a speaking order, following the law laid down in GKN Driveshafts (India) Ltd. (supra), Bayer Material Science (P) Ltd. (supra) and KSS Petron Private Ltd. (supra), we are constrained to hold that such assumption of jurisdiction by the Assessing Officer was ultra vires Section 11 of the said Act. The first substantial question of law will, accordingly, have to be answered in favour of the Appellant and against the Respondent-Revenue. 26. As noted earlier, in view of the aforesaid, there is no necessity to advert to the second substantial question of law, at least, in so far as this Appeal is concerned. The Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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