IN INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI R.C. SHARMA, AM AND SHRI SANDEEP GOSAIN, JM I.T.A. No. 6066/Mum/2011 ( Assessment Year: 2000-01) Homeland Networks (India) P. Ltd. Income Tax Officer 318, Vaishali Apartments, Ward 8(2)(4), rd 3 Floor, 12/14 Parekh Street Aayakar Bhawan. Prarthana Samaj Vs. Mumbai PAN/GIR No. AAACH 7363N ( Appellant) : (Respondent) Appellant by : Ms. Aasifa Khan Respondent by : Shri Abhishek Sharma : 26/07/2016 Date of Hearing : 21/09/2016 Date of Pronouncement O R D E R Per Sandeep Gosain, J. M.: Present Appeal has been filed by Assessee against order of Commissioner of Income Tax (Appeals)-17, Mumbai dated 30.05.2010 for A.Y. 2000-01 on grounds of appeal mentioned hereinbelow. 1. Learned Commissioner of Income tax (Appeals) 17 erred in 2 ITA No. 6066/Mum/2011 (A.Y. 2000-01) Homeland Networks (India) Pvt. Ltd. Vs. ITO 8(2)4 law and on f acts of case in conf irming action of assessing off icer in invoking provisions of section 148 of Act and issuing notice under said section and completing assessment u/s. 144 r.w.s. 147 of Act assessing total income at Rs. 28,20,350/- 2. Learned Commissioner of Income tax (Appeals) 17 erred in law and on f acts of case in conf irming action of assessing off icer in treating remittances of Rs. 28,20,350/- received on 27/3/2000 f rom Homeland Networks USA being share application money as income of appellant. 2. brief facts of case are that in course of proceedings u/s.143(3) for A.Y. 2001-02, Assessing Officer had made addition of Rs.28,20,350/- on account of unexplained foreign remittance. Assessing Officer had rejected assessee s contentions that impugned amount was share application money received from M/s. Home Land Networks, U.S.A. on grounds that certificate issued by bank, where remittance were deposited, had mentioned that amount was received as Operation Expenses . Subsequently, asesssee filed appeal against order of CIT(A) for A.Y.2001-02 and CIT(A) vide his order dated 13.12.2004 had given relief to assessee. Since foreign remittance has been received on 27.03.2000, therefore, same cannot be subject matter for A.Y.2001-02. CIT(A) also passing 3 ITA No. 6066/Mum/2011 (A.Y. 2000-01) Homeland Networks (India) Pvt. Ltd. Vs. ITO 8(2)4 order by observing that AO is liberty to examine its genuineness in A.Y.2000-01, for which he still has time to take necessary remedial measures. 2.1 After decision by CIT(A), Assessing Officer reopened assessment u/s.147 of Income Tax, 1961 as he found that there was reasons to believe that sum of Rs.28,20,350/- chargeable to tax for assessment year 2000-01 has escaped assessment within meaning of Section 147 of IT Act, 1961. Subsequently, Assessing Officer passed order after serving notice, thereby making additions of Rs.28,20,350/-. 3. Aggrieved by order of AO, assessee preferred appeal before CIT(A) and CIT(A) after considering both parties partly allowed appeal of Assessee. 4. Aggrieved by order of CIT(A), assessee filed present appeal before us on grounds mentioned herein above. 4 ITA No. 6066/Mum/2011 (A.Y. 2000-01) Homeland Networks (India) Pvt. Ltd. Vs. ITO 8(2)4 5. During pendency of present appeal, assessee moved application for additional ground of appeal on ground that assessment order passed u/s.144 r.w.s. 147 of Income Tax Act dated 27.02.2005 is bad in law as before any hearing could take place, Assessing Officer passed assessment order on 27.09.2005 whereas date fixed for hearing of matter was after date of passing assessment order. 6. learned AR submitted that no opportunity at all was given to assessee before passing order of re-assessment u/s.144 r.w.s. 147 of Income Tax Act and no reasons were recorded before issuing notice u/s.148. Learned AR further submitted that inadvertently those legal grounds could not be taken in memo of appeal because of over sighted next. Learned AR next submitted that additional ground raised by assessee is purely legal in nature and facts relevant for arguing additional ground, are on record. 5 ITA No. 6066/Mum/2011 (A.Y. 2000-01) Homeland Networks (India) Pvt. Ltd. Vs. ITO 8(2)4 7. On other hand, learned DR contested application moved by assessee for admission of additional grounds. 8. We heard counsel for parties and perused material on record. We observed that additional grounds of appeal now raised by assessee are legal in nature and goes to roots of case and in case assessee is not permitted to raise additional ground then inadvertently rights of assessee would be prejudice. We derive our strength from judgment of Hon ble Supreme Court in case of NTPC Vs/ CIT, 229 ITR 383 (SC), wherein Hon ble Supreme Court has categorically held that legal points can always be taken on any stage and since grounds now raised by assessee by way of additional grounds of appeal are purely legal in nature, therefore, we allow application of assessee for raising additional ground of appeal. 8.1 Since, additional ground now raised before us are purely legal in nature, therefore, we think it fit to decide these grounds first. additional grounds are reproduced below: 6 ITA No. 6066/Mum/2011 (A.Y. 2000-01) Homeland Networks (India) Pvt. Ltd. Vs. ITO 8(2)4 ADDITIONAL GROUNDS OF APPEAL 1. BEST JUDGMENT ASSESSMENT U/S. 144 r.w.s. 147 OF ACT: 1.1 Id. CIT (A) erred in confirming action of Assessing Officer in framing best judgment assessment by invoking provisions of section 144 r.w.s. 147 of Act [the Act"]. 1.2 While doing so, Id. CIT (A) failed to appreciate that: (i) necessary conditions for invoking provisions of section 144 of Act were not fulfilled; (ii) No opportunity at all was provided to Appellant at reassessment stage as assessment order was passed much prior to th e dat e when h earing was fixed by th e Assessing Officer. (iii) in any case, that Appellant was prevented by reasons beyond its control to represent its case properly and fully before Assessing Officer. 2. RE-OPENING INVALID: 1.1 Assessing Officer erred in framing assessment under section 144 read with section 147 of Act only on basis of observation made by CIT(A) while passing order for A.Y.2001-02. 1.2 Assessing Officer failed to appreciate that ( i ) necessary pre-conditions were not fulfilled before initiating as well as before framing reassessment. (ii) reasons for re-opening has not been recorded before issuing notice under section 148 of Act. 1.3 It is submitted that in facts and circumstances of case, and in law, reassessment be held is bad, illegal and void. 9. Additional Ground No.1 Learned AR appearing on behalf of assessee drawn our attention to order passed by AO u/s.144 r.w.s. 147 of Income 7 ITA No. 6066/Mum/2011 (A.Y. 2000-01) Homeland Networks (India) Pvt. Ltd. Vs. ITO 8(2)4 Tax Act, 1961. operative portion of order is reproduced below: During scrutiny proceedings, notice u/s.143(2) of IT Act was issued to assessee on 1.9.2005. Another notices u/s.143(2)/142(1) dtd. 12.09.2005 fixing hearing on 20.10.2005 were served on 29.09.2005. In response to this nobody attended nor they filed any reply or letter of adjournment. Another notice u/s.142(1) dtd. 13.12.2005 calling upon assessee to show cause on 19.12.2005. Another notices u/s.143(2)/142(1) dtd. 12.09.2005 were served on 29.09.2005. IN response to this nobody attended nor they filed any reply or letter of adjournment. Another notice u/s.142(1) dtd. 13.12.2005 calling upon assessee to show cause on 19.12.2005 at 12.00 noon, why assessment should not be completed to best of my judgment. In response to this neither anybody attended nor they filed any reply in writing. Under such circumstances, I am compelled to complete assessment to best of my judgment. 10. From bare perusal of assessment order in Column No.12 in date of order is mentioned as 27.09.2005 whereas in body of assessment order, date fixed for hearing in notice issued u/s.143(2)/143(1) is mentioned as 20.10.2005 which goes to show that assessment order was already passed on 27.09.2005 u/s. 144 r.w.s. 147 of Income Tax Act, 1961 whereas hearing to assessee was fixed on 20.10.2005 which on face of it, is illegal and bad in law. Moreover, it has also been mentioned in assessment order that another u/s. 142(1) dated 13.12.2005 calling 8 ITA No. 6066/Mum/2011 (A.Y. 2000-01) Homeland Networks (India) Pvt. Ltd. Vs. ITO 8(2)4 upon assessee to show cause on 19.12.2005 at 12.00 noon has also been issued which also goes to show that all those notices were issued after passing of assessment order, therefore, in these circumstances in our considered view assessment order passed by AO u/s.143(3) r.w.s. 147 has been passed without providing proper/sufficient opportunity of hearing to assessee, therefore, same is bad in law and not maintainable. Considering facts of present case as well as taking into account principles of natural justice, equity and fair play, we set aside order of CIT(A) and assessment order passed u/s.143(3) r.w.s. 147 of Income Tax Act and also order of CIT(A) upholding said order of assessment and remit matter back to file of AO with direction to pass afresh order of assessment after giving proper and sufficient opportunity of hearing to assessee. assessee would be at liberty to take all its contentions before AO. 11. Since, we have already decided preliminary issue therefore we set aside order of CIT(A) and remit matter back to file 9 ITA No. 6066/Mum/2011 (A.Y. 2000-01) Homeland Networks (India) Pvt. Ltd. Vs. ITO 8(2)4 of Assessing Officer, therefore, in these facts and circumstances of case, there does not require any adjudication for other grounds raised by assessee. 12. In result, appeal filed by assessee is partly allowed for statistical purposes. Order pronounced in open court on 21st September, 2016 Sd/- Sd/- (R.C. Sharma) (Sandeep Gosain) Accountant Member Judicial Member Mumbai; Dated :21.09.2016 P.K.K., Sr.P.S. Copy of Order forwarded to : 1. Appellant 2. Respondent 3. CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai Homeland Networks (India) P. Ltd. v. Income Tax Officer Ward 8(2)(4)