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B.P.MUNDRA

Mundra House, 822-A, Shivaju Nagar, Civil Lines, jaipur-302006 9314501680, 9314501791


If a decision is challenged before the first appellate authority both on the issue of ‎validity of jurisdiction as well as merits of the case, the adjudication on validity of ‎reopening can by no stretch of imagination be liable for rejection on the ground that ‎the assessment has been decided in favour of the assessee on merits. If the order is ‎not so kindly take the ground in the appeal / cross objection to higher authority so ‎that the higher authorities will have the benefit of the decision on other points also, ‎if the necessity arises as otherwise

B.P.Mundra > Income Tax > Cases Income tax > 1963 > If a decision is challenged before the first appellate authority both on the issue of ‎validity of jurisdiction as well as merits of the case, the adjudication on validity of ‎reopening can by no stretch of imagination be liable for rejection on the ground that ‎the assessment has been decided in favour of the assessee on merits. If the order is ‎not so kindly take the ground in the appeal / cross objection to higher authority so ‎that the higher authorities will have the benefit of the decision on other points also, ‎if the necessity arises as otherwise

admin November 16, 2019

1963, ITAT, ITAT Mumbai, rule 27 of the Income Tax Appellate ‎Tribunal Rules

appellate authority declines to ‎consider and decide the other issues

 48 total views

If a decision is challenged before the first appellate authority both on the issue of ‎validity of jurisdiction as well as merits of the case, the adjudication on validity of ‎reopening can by no stretch of imagination be liable for rejection on the ground that ‎the assessment has been decided in favour of the assessee on merits. If the order is ‎not so kindly take the ground in the appeal / cross objection to higher authority so ‎that the higher authorities will have the benefit of the decision on other points also, ‎if the necessity arises as otherwise ‎

Income Tax Appellate Tribunal – Mumbai
Ito 12(3)(4), Mumbai vs Mohanraj Trading & Exchange Pvt. … on 2 July, 2018‎
‎ IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI

‎ BEFORE SHRI SHAMIM YAHYA, AM AND SHRI SANDEEP GOSAIN, ‎JM
‎ I.T.A. No.6098/Mum/2016‎
‎ (Assessment Year: 2007-08)‎
Income Tax Officer-12(3)(4), Vs. M/s. Mohanraj Pvt. Ltd.‎
Trading & Exchange ‎120, Bazar Road, ‎
Room No. 147A, 1st Floor,‎ Mumbai-400 050‎
Aayakar Bhavan, M. K. Road,‎ PAN/GIR No. AABCM 4628 C
Bandra (West),Mumbai-400 020‎
Revenue) ‎ ‎(Assessee)‎

C.O. No.63/Mum/2018‎ ‎ ‎
‎(Arising out of ITA No. 6098/Mum/2016)‎
‎(Assessment Year: 2007-08)‎
M/s. Mohanraj Trading & ‎ Vs.‎ Income Tax Officer- Pvt. Ltd.‎ ‎12(3)(4),‎
Exchange Pvt. Ltd,‎ Room No. 147A, 1st Floor,‎
‎120, Bazar Road, Bandra(West),‎ Aayakar Bhavan, M. K. Road,‎
Mumbai-400 050 ‎ Mumbai-400 020‎
PAN/GIR No. AABCM 4628 C
‎(Assessee) ‎ ‎(Revenue)‎
Revenue by : Dr. K. Shivaram & Ms. Neelam C. Jadhav
Assessee by : Shri V. Vidhyadhar

‎ Date of Hearing : 07.06.2018‎
‎ ‎ Date of Pronouncement : 02.07.2018‎

ORDER
Per Shamim Yahya, A. M.:‎
This appeal by the Revenue and cross objection by the assessee arise out of the order ‎of the ld. Commissioner of Income Tax (Appeals) dated 16.02.2016 and pertains to ‎assessment year 2006 -07.‎
‎2. The grounds of appeal raised in Revenue’s appeal read as under:‎
M/s. Mohanraj Trading & Exchange Pvt. Ltd.‎
‎1. On the facts and circumstances of the case and in law, Ld.CIT(A) has erred in ‎deleting addition of Rs.1,20,00,000/- made by Assessing Officer u/s.68 of I.T. Act in ‎respect of the bogus share capital received from companies controlled and managed ‎by Praveen Kumar Jain.‎
‎2. On the facts and circumstances of the case and in law, Ld.CIT(A) has erred by not ‎appreciating peculiar facts of the case that (I) There was a specific information from ‎Investigation Wing that the investor companies belonged to Praveen Kumar Jain, ‎who had admitted in a statement on oath that he was involved in providing ‎accommodation entries and therefore, this aspect constituted a relevant material. (II) ‎The assesse failed to produce bank statements of investors, copy of ROI of investors ‎and also failed to produce the investors before the Assessing Officer for cross ‎examination when specifically ask to do, and thus failed to prove genuineness of the ‎transactions. (III) During the remand proceedings, request made by the assessing ‎officer to Ld.CIT(A) to direct the assessee to produce the investor parties for cross ‎examination before him was not acted upon. At the same time the assessee neither ‎expressed inability to produce the parties / investors nor requested the Assessing ‎Officer to summon them directly.‎
‎3. On the facts and circumstances of the case and in law, Ld.CIT(A) failed to ‎appreciate that the ratio of decisions relied upon by him were not applicable to the ‎case of assessee company due to distinguishable fact and instead the ratio of ‎decision of Hon’ble Delhi High Court in the case of Nova Promoters and Finlease (P) ‎Ltd. will be applicable to the case of assessee.‎
‎4. The appellant prays that the order of the CIT(A) on the above ground be set aside ‎and that of the A.O. be restored.‎
‎3. The grounds raised by the assessee in cross objection read as under:‎
‎1. The learned CIT(A) erred in not adjudicating the Additional Ground raised by the ‎assesses during the appellate proceeding vide letter dt. 31/12/2015 for reopening of ‎assessment as the same was without jurisdiction. Hence, the order passed by the ‎CIT(A) is not as per the law.‎
‎2. The learned CIT(A) erred in confirming the reopening of assessment u/s.147 ‎without appreciating that the notice issued u/s.148 dt.25/03/2014 which is beyond ‎the period of four years from the end of relevant assessment year in which the ‎assessment u/s.l43(3) was passed dtd.23/10/2009. Thus, Reopening is bad in law.‎
‎3. The Learned CIT(A) failed to appreciate that reopening is bad in law as the notice ‎u/s.148 dt.25/03/2014 has been issued without obtaining prior approval / sanction / ‎satisfaction as required u/s. 151 of the Income tax Act. Hence, the reopening is bad ‎in law.‎
‎4. The Learned CIT(A) failed to appreciate that the notice u/s.148 dtd.25/03/2014 ‎was issued on the basis of Information received from DGIT(Invt), thus there was no ‎independent application of mind by the A.O. It is simply based on borrowed ‎satisfaction of some other authority; hence the reopening is bad in law and is liable ‎to be quashed.‎
‎4. The assessee has also filed grounds under rule 27 of the Income Tax Appellate ‎Tribunal Rules, 1963 submitting that the ld. Commissioner of Income Tax (Appeals) ‎has erred in not adjudicating the issue raised in the additional ground regarding the ‎validity of reopening.‎
‎5. At the outset, it is noted that there is a delay of 22 days in filing the cross ‎objection. It has been pleaded that delay is attributed due to the mistake on the part ‎of assessee’s Chartered Accountant. Similar grounds as here have also been raised by ‎the assessee under rule 27 of the ITAT Rules. Upon careful considering of the ‎reasonable cause for the delay we condone the same.‎
‎6. We first take up on assessee’s grounds raised in cross objection and under rule 27 ‎of ITAT:‎
Here the assessee’s plea is that in this case the ld. Commissioner of Income Tax ‎‎(Appeals) has erred in not dealing the issue pertaining to validity of reopening, ‎however, he decided the issue upon merits in favour of the assessee. We note that the ‎ld. Commissioner of Income Tax (Appeals) has not observed anything about the ‎validity of reopening. In this regard, the ld. Counsel of the assessee has referred to ‎paper book page no. 122 where the assessee has raised ground relating to validity of ‎reopening by way of additional ground. Now by way of this application under rule ‎‎27 of the ITAT Rules and M/s. Mohanraj Trading & Exchange Pvt. Ltd. cross ‎objection, the assessee is aggrieved that the ld. Commissioner of Income Tax ‎‎(Appeals) has not adjudicated the other limbs of its challenge before the ld. ‎Commissioner of Income Tax (Appeals) regarding the validity of reopening. The ‎assessee has duly raised the ground before the ld. Commissioner of Income Tax ‎‎(Appeals) regarding the validity of reopening by way of additional ground. However, ‎the ld. Commissioner of Income Tax (Appeals) did not adjudicate those issues.‎
‎7. Upon hearing both the counsel and perusing the records, we are of the opinion that ‎if a decision is challenged before the first appellate authority both on the issue of ‎validity of jurisdiction as well as merits of the case, the adjudication on validity of ‎reopening can by no stretch of imagination be liable for rejection on the ground that ‎the assessment has been decided in favour of the assessee on merits. We also note ‎that adjudication of issue raised on validity of reopening need reference to factual ‎records which are not available before us.‎
‎8. Now the assessee is aggrieved by such an action of the ld. Commissioner of ‎Income Tax (Appeals) and has raised the cross objection as well as the objection ‎under rule 27 before the ITAT.‎
‎9. We find that the Hon’ble Madras High Court in the case of CIT vs Ramdas ‎Pharmacy [1970] 77 ITR 276 (Mad) had expounded that an appellate authority ‎cannot decide only one issue arising out of many issues and decline to go into the ‎other issues raised before it on the ground that further issues will not arise in view of ‎the finding on M/s. Mohanraj Trading & Exchange Pvt. Ltd.‎
the issue decided by it. It was expounded that if the appellate authority declines to ‎consider and decide the other issues, it could only protract and delay the ‎proceedings for the assessee has to get the decision of the appellate authority on the ‎initial point set aside by approaching a higher appellate authority and thereafter ‎again go before the appellate authority for the decision on the other issues left ‎undecided by it earlier. It was held that this will amount to multiplication of ‎proceedings under the Act. It was further expounded that the subordinate courts and ‎tribunal’s should as far as possible give their views on all the points raised before ‎them so that the higher courts will have the benefit of the decision on other points ‎also, if the necessity arises.‎
‎10. Examining the present case on the touchstone of above said case law, we find ‎that the order of the ld. CIT(A) here directly falls under the ambit of Hon’ble High ‎Court’s order as above. The ld. CIT(A) has decided one issue and has left undecided ‎another issues duly raised before him. Hence, we are of the considered opinion that ‎these issues relating to validity of reopening were duly raised, which have been left ‎undecided by the ld. CIT(A) and need to be remitted to the file of the ld. CIT(A). The ‎ld. CIT(A) is directed to complete his appellate order by deciding on these issues ‎regarding the validity of reopening which were duly raised before him by the ‎assessee. Needless to add the ld. CIT(A) in his order shall also refer to the earlier ‎adjudication by the ld. CIT(A), which we have not adjudicated in view of our remand ‎here. After the order of the ld. CIT(A) is complete, upon adjudication of these issues, ‎both the parties will be at liberty to file necessary appeals as and if necessary.‎
M/s. Mohanraj Trading & Exchange Pvt. Ltd.‎
‎11. Accordingly, the issues not adjudicated by the ld. Commissioner of Income Tax ‎‎(Appeals) as raised in the cross objection hereinabove are remitted to the file of the ‎ld. Commissioner of Income Tax (Appeals). The ld. Commissioner of Income Tax ‎‎(Appeals) shall decide the same afresh after giving the assessee proper opportunity ‎of being heard. In view of our order remitting the aforesaid issues to the file of the ld. ‎Commissioner of Income Tax (Appeals) so as to complete his order, the other issues ‎raised in these appeals are not being adjudicated.‎
‎12. Both the counsel fairly agreed to the above proposition.‎
‎13. In the result, the Revenue’s appeal and the assessee’s cross objection are allowed ‎for statistical purposes.‎

‎ Order pronounced in the open court on ‎‎02.07.2018‎

‎ Sd/- ‎Sd/-‎

‎ (Sandeep Gosain) ‎‎(Shamim Yahya)‎
‎ Judicial Member ‎Accountant Member
Mumbai; Dated : 02.07.2018‎
Roshani, Sr. PS
Copy of the Order forwarded to :‎
‎1. The Appellant‎
‎2. The Respondent‎
‎3. The CIT(A)‎
‎4. CIT – concerned
‎5. DR, ITAT, Mumbai‎
‎6. Guard File‎
‎ ‎BY ORDER,‎

‎ ‎‎(Dy./Asstt. Registrar)‎
‎ ‎ITAT, Mumbai
‎ ‎

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