Winston Fernandes v. Office of the Commissioner of Income-tax 21 C-11,Mumbai
[Citation -2016-LL-1005-125]

Citation 2016-LL-1005-125
Appellant Name Winston Fernandes
Respondent Name Office of the Commissioner of Income-tax 21 C-11,Mumbai
Court ITAT-Mumbai
Relevant Act Income-tax
Date of Order 05/10/2016
Assessment Year 2009-10
Judgment View Judgment
Keyword Tags condonation of delay • interest of revenue • change of opinion • business purpose • natural justice
Bot Summary: The brief facts of the case are that in the case assessee the assessment order was passed by the Joint Commissioner of Income Tax, Range 21(2), Mumbai u/s.143(3) of the Income Tax Act, 1961( in short the Act ) on 28.11.2011 for the A.Y.2009-10. A proposal u/s.263 of the Act dated 20.03.2014 was received from Office of the Commissioner of Income Tax 21 through Joint Commissioner of Income Tax, Range 21(2) pointing out some 2 ITA No.5507/Mum/2014 Assessment Year: 2009-10 shortcoming and discrepancies in the assessment order. Thereafter, the notice was given to the assessee and after considering the reply of the assessee, the CIT held the order u/s.143(3) of the Act dated 28.12.2011 to be erroneous and prejudicial to the interest of revenue and directed the Assessing Officer to decide the issue afresh after due verification. The learned representative of the assessee has argued that the CIT concerned did not apply his mind before invoking jurisdiction u/s.263 of the Act in the said circumstances the order dated 20.03.2013 is wrong against law and facts and is liable to be set aside. While going through the order dated 20.03.2014 passed u/s.263 of the Act it came to the notice that the CIT invoked the provision u/s.263 of the Act in view of the following grounds:- On verification of the records, it has been observed that you have acquired ten trucks and their mixers from different parties in the month of March between 12.03.2009 and 31.03.2009 and these mixers were required to be mounted on the trucks before utilizing it as transit mixers. Order dated 28.12.2011 perused, the said order nowhere speaks about these facts that the five mixers purchased on 30th and 31st March 2009 were put to use on or before 31st March, 2009 for the purpose of business to avail the depreciation on the same. In the instant case Joint Commissioner of Income Tax Range 21(2) , Mumbai, put the short comings / discrepancies before the Commissioner and the Commissioner after receipt of the proposal issued the notice to the concerned parties and thereafter, after due application of his mind, passed the order u/s.263 of the Act, also relying upon certain law mentioned therein.


IN INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE S/SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER I.T.A. No.5507/Mum/2014 ( Assessment Year: 2009-10) Winston Fernandes Office of Commissioner A-1, Fair Ville Estate, 66A, Vs. of Income Tax 21 th 12 Road, JVPD Scheme, C-11, Pratyakshkar Bhavan, Juhu, Mumbai - 400049 B.K.C., Bandra (E), Mumbai - 400051 PAN/GIR No. : AADPF2541A (Appellant) ( Respondent) Assessee by: S.C.Agrawal Department by: Mrs. Vidisha Kalra Date of Hearing: 23.06.2016 Date of Pronouncement: 05.10.2016 O R D E R PER AMARJIT SINGH, JM: assessee has filed present appeal against order dated 20.03.2014 passed by Commissioner of Income Tax - 21, Mumbai [hereinafter referred to as CIT ] relevant to A.Y.2009-10. 2. assessee has raised following grounds:- 1. That original assessment was completed u/s.143(3) of Income Tax Act and in course of assessment proceedings issue of depreciation on asset purchase in month of March 2009 was considered. ITA No.5507/Mum/2014 Assessment Year: 2009-10 2. That assessment can not be reopened on basis of change of opinion or on basis of opinion of Audit Party. 3. That assessment can not be reopened on basis of mere suspicion. 4. That order passed by learned commissioner of Income Tax is bad in law and therefore appellate prayed that order may be quashed. 3. departmental representative has argued that present appeal has been filed by assessee, is barred by time of 89 days therefore same is liable to be dismissed. On other hand Learned representative of assessee has refuted said contention. File perused. assessee filed application for condonation of delay along with affidavit stating that he was out of country from 24.05.2014 to 13.06.2014 for 81 days. So he did not filed appeal well in time. In view of reason recorded in affidavit we are of view that there are sufficient and reasonable ground on record to condone delay in filing appeal hence application for condonation of delay is hereby allowed. 4. brief facts of case are that in case assessee assessment order was passed by Joint Commissioner of Income Tax, Range 21(2), Mumbai u/s.143(3) of Income Tax Act, 1961( in short Act ) on 28.11.2011 for A.Y.2009-10. proposal u/s.263 of Act dated 20.03.2014 was received from Office of Commissioner of Income Tax 21 through Joint Commissioner of Income Tax, Range 21(2) pointing out some 2 ITA No.5507/Mum/2014 Assessment Year: 2009-10 shortcoming and discrepancies in assessment order. shortcomings noticed were as under:- On verification of records, it has been observed that you have acquired ten trucks and their mixers from different parties in month of March between 12.03.2009 and 31.03.2009 and these mixers were required to be mounted on trucks before utilizing it as transit mixers. As per details of assets, you had purchased five mixers on 30th and 31st March, 2009 and they were not put to use before 31st March, 2009 for purpose of business. Therefore, depreciation claimed on these five transit mixers should have been disallowed. 5. Thereafter, notice was given to assessee and after considering reply of assessee, CIT held order u/s.143(3) of Act dated 28.12.2011 to be erroneous and prejudicial to interest of revenue and directed Assessing Officer to decide issue afresh after due verification. Feeling aggrieved, assessee has filed present appeal before us. 6. We have heard arguments advanced by learned representative of parties and perused record. learned representative of assessee has argued that CIT concerned did not apply his mind before invoking jurisdiction u/s.263 of Act, therefore, in said circumstances order dated 20.03.2013 is wrong against law and facts and is liable to be set aside. It is also argued that assessee purchased mixer in month of 3 ITA No.5507/Mum/2014 Assessment Year: 2009-10 March between 12.03.2009 and 31.03.2009 and used same for business purpose, therefore, Assessing Officer has rightly allowed depreciation in accordance with law. It is argued that in said specific circumstances CIT was wrong in invoking provision u/s.263 of Act. In support of these contention Ld representative of assessee has place reliance upon law settled in M/S AV industries ITA N.3469/M/2010.dated 6.11.2015 and Span overseas Ltd ITA N. 1223/PN/2013.dated 21.12. 2015. However, on other hand learned representative of department has strongly placed reliance upon order passed by CIT in question. While going through order dated 20.03.2014 passed u/s.263 of Act it came to notice that CIT invoked provision u/s.263 of Act in view of following grounds:- On verification of records, it has been observed that you have acquired ten trucks and their mixers from different parties in month of March between 12.03.2009 and 31.03.2009 and these mixers were required to be mounted on trucks before utilizing it as transit mixers. As per details of assets, you had purchased five mixers on 30th and 31st March, 2009 and they were not put to use before 31st March, 2009 for purpose of business. Therefore, depreciation claimed on these five transit mixers should have been disallowed. 4 ITA No.5507/Mum/2014 Assessment Year: 2009-10 7. Order dated 28.12.2011 perused, said order nowhere speaks about these facts that five mixers purchased on 30th and 31st March 2009 were put to use on or before 31st March, 2009 for purpose of business to avail depreciation on same. 8. law relied by learned representative of assessee speaks about fact where CIT took cognizance of matter without application of mind merely upon matter forward by other Officers for invoking provision u/s.263 of Act. But in instant case Joint Commissioner of Income Tax Range 21(2) , Mumbai, put short comings / discrepancies before Commissioner and Commissioner after receipt of proposal issued notice to concerned parties and thereafter, after due application of his mind, passed order u/s.263 of Act, also relying upon certain law mentioned therein. Therefore, in said circumstances, law i.e. Span overseas Ltd ITA N. 1223/PN/2013.dated 21.12.2015 relied by learned representative of assessee is not applicable to facts of present case. So far as other law relied by learned representative of assessee is concerned i.e. M/S AV industries ITA N.3469/M/2010.dated 6.11.2015, it speaks about possible view which has already been taken by Assessing Officer whereas in instant case no view of any kind was taken by Assessing Officer. Whereas this is question of due application of mind by him? As discussed above, Assessing Officer did not take up issue of purchase of five mixers on 30th and 31st 5 ITA No.5507/Mum/2014 Assessment Year: 2009-10 March 2009 and to put to use on or before 31.03.2009 for purpose of business to avail depreciation on same therefore in said circumstances we are of view that CIT has rightly invoked provision u/s.263 of Act. In this regard we also find support of law settled by Full Bench of Gauhati High Court in case of CIT Vs. Jawahar Bhattacharjee (ITA No.2008) vide its order dated 07.02.2012 wherein it is specifically held that: Jurisdiction under section 263 can be exercised whenever it is found that order of assessment was erroneous and prejudicial to interest of Revenue. Not holding such inquiry as is normal and not applying mind to relevant material would make assessment erroneous warranting exercise of revisional jurisdiction. incorrect assumption of facts or incorrect application of law will satisfy requirement of order being erroneous. Non application of mind and omission to follow natural justice is in same category. 9. forgoing infact represents trite law, as explained by Hon ble Apex Court in case of Malabar Industries Co. Ltd., reported at 243 ITR 83 (SC). In view of above said circumstances we are of view that CIT has passed order judiciously and correctly and invoked provision u/s.263 of Act in right manner and in right sense which does not require to be interfere with at this appellate stage. With regard to claim of 6 ITA No.5507/Mum/2014 Assessment Year: 2009-10 depreciation, we may advert to decision by Hon ble Jurisdictional High Court in case of Dinesh Kumar reported at 267 ITR 768 (Bombay) 10. In result, appeal of assessee is hereby Dismissed. Order pronounced in open court 5th October, 2016 Sd/- Sd/- (SANJAY ARORA) (AMARJIT SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated : 5 October, 2016 th MP Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai 7 Winston Fernandes v. Office of Commissioner of Income-tax 21 C-11,Mumbai
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