The ACIT, Indore v. Smt. Geeta Sanghi, Indore

ITA 416/IND/2009 | 2000-2001
Pronouncement Date: 25-05-2010 | Result: Dismissed

Appeal Details

RSA Number 41622714 RSA 2009
Bench Indore
Appeal Number ITA 416/IND/2009
Duration Of Justice 9 month(s) 17 day(s)
Appellant The ACIT, Indore
Respondent Smt. Geeta Sanghi, Indore
Appeal Type Income Tax Appeal
Pronouncement Date 25-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 25-05-2010
Assessment Year 2000-2001
Appeal Filed On 07-08-2009
Judgment Text
PAGE 1 OF 4 -. I.T.A.NO. 416/IND/2009 SMT. GEETA SANGHI INDORE. IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : AMJPS-9008D I.T.A.NO. 416/IND/2009 A.Y. : 2000-01 ACIT SMT.GEETA SANGHI 3(1) VS 25 PALASIA MAIN ROAD INDORE. INDORE. APPELLANT RESPONDENT APPELLANT BY : SMT.APARNA KARAN SR. DR RESPONDENT BY : S/SHRI M. C. MEHTA AND SHRI HITESH CHIMNANI CAS DATE OF HEARING : 17/05/2010 O R D E R PER V.K. GUPTA A.M. THIS APPEAL FILED BY THE REVENUE ARISES OUT OF ORDE R OF THE LD. CIT(A)-I INDORE DATED 14.05.2009 FOR THE ASSESSM ENT YEAR 2000 01. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. THE GROUND RAISED BY THE REVENUE READS AS UNDER :- THE LD. CIT(A) ERRED ON THE FACTS AND IN LAW IN QU ASHING THE ASSESSMENT U/S 147 MERELY ON THE GROUND THAT THESE PAGE 2 OF 4 -. I.T.A.NO. 416/IND/2009 SMT. GEETA SANGHI INDORE. PROCEEDING CANNOT BE INITIATED PRIOR TO ASSESSMENT YEAR 2001-02 IN VIEW OF THE PROVISO TO SECTION 14A FOR THE PURPOSE OF DISALLOWING EXPENDITURE INCURRED FOR EAR NING EXEMPTED INCOME WITHOUT APPRECIATING THAT THE PROC EEDINGS U/S 147 HAD BEEN ALSO INITIATED ON THE ISSUE OF PAY MENT OF INTEREST BY THE ASSESSEE AND THE INTEREST CHARGED B Y HER. 4. THE FACTS IN BRIEF ARE THAT THE AO ON THE BASIS O F ASSESSMENT PROCEEDINGS IN ASSESSMENT YEAR 2004-05 REOPENED THE ASSESSMENT OF THE IMPUGNED ASSESSMENT YEAR FOR THE REASON THAT INSPIT E OF DIVERSION OF INTEREST BEARING FUNDS FOR NON-BUSINESS PURPOSES T HE ASSESSEE HAD BEEN ALLOWED INTEREST EXPENDITURE WHICH WAS NOT ALLOWAB LE HENCE THE CASE OF ESCAPEMENT OF INCOME. HOWEVER IN THE COURSE OF RE- ASSESSMENT PROCEEDINGS THE AO INVOKED THE PROVISIONS OF SECTI ON 14A AS THE SAID FUNDS HAD BEEN INVESTED IN QUOTED/UNQUOTED SHARES MUTUAL FUND AND PARTNERSHIP FIRM AND NO INTEREST HAD BEEN ALLOCATED TO SUCH ACTIVITY. THE ASSESSEE CHALLENGED THIS ACTION OF THE AO BEFORE TH E LD. CIT(A) WHEREIN THE ASSESSEE REFERRED TO THE PROVISO TO SECTION 14A AND CONTENDED THAT THOUGH THE PROVISIONS OF SECTION 14A HAD BEEN MADE EFFECTIVE RETROSPECTIVELY FROM 1.4.1962. HOWEVER ANY ASSESSM ENT FOR ASSESSMENT YEAR BEGINNING ON OR BEFORE FROM THE FIRST DAY OF A PRIL AS IT COULD NOT BE REOPENED U/S 147 OR U/S 154 AS PER THIS PROVISO T HE LD. CIT(A) TOOK IN PAGE 3 OF 4 -. I.T.A.NO. 416/IND/2009 SMT. GEETA SANGHI INDORE. NOTE OF THIS PROVISION AND THE CIRCULAR NO.11/2001 DATED 23.7.2001 QUASHED THE REASSESSMENT PROCEEDINGS AS THE YEAR UN DER CONSIDERATION WAS 2000-01. THE REVENUE BEING AGGRIEVED IS IN AP PEAL BEFORE US. 5. THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE SUPP ORTED THE ORDER OF THE AO BY STATING THAT THE REOPENING HAD B EEN DONE ON VARIOUS ISSUES. HENCE THE DECISION OF THE LD. CIT(A) IN QU ASHING THE PROCEEDINGS ON THE BASIS OF SUCH PROVISO WAS NOT CORRECT. 6. THE LEARNED COUNSEL ON THE OTHER HAND CONTENDED T HAT IT WAS A CASE OF REOPENING OF AN ASSESSMENT BEYOND FOUR YEAR S OF AN ASSESSMENT ORIGINALLY MADE U/S 143(3) AND THERE BEING NO DEFAU LT ON THE PART OF THE ASSESSEE HENCE SUCH REOPENING WAS INVALID ON THIS PRELIMINARY GROUND ONLY. THE LEARNED COUNSEL FURTHER SUBMITTED THAT T HOUGH REOPENING WAS DONE ON MORE THAN ONE ISSUE BUT NO ADDITION WAS MA DE ON THIS ASPECTS AND THE ONLY ADDITION MADE BY THE ASSESSING OFFICER WAS ON ACCOUNT OF INVOCATION OF PROVISIONS OF SECTION 14A. HENCE THE LD. CIT(A) RIGHTLY QUASHED THE ORDER PASSED BY THE ASSESSING OFFICER. 7. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 8. IT IS NOTED THAT THE IMPUGNED ASSESSMENT YEAR IS 20 00-01. HENCE THE PROVISO TO SEC14A IS SQUARELY APPLICABLE WHICH PROHIBITS THE REOPENING OF ASSESSMENT IN RESPECT OF ASSESSMENT YE ARS PRIOR TO PAGE 4 OF 4 -. I.T.A.NO. 416/IND/2009 SMT. GEETA SANGHI INDORE. ASSESSMENT YEAR 2001-02. WE ARE FURTHER OF THE VIEW THAT WHAT CANNOT BE DONE DIRECTLY CANNOT BE DONE INDIRECTLY AND THE AO S ACTION IS OF THE SAME CATEGORY. HENCE SUCH ACTION OF THE AO IS CLEA RLY BARRED BY SUCH PROVISO. ACCORDINGLY WE CONFIRM THE FINDINGS OF TH E LD. CIT(A). 9. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS D ISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 25 TH MAY 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 25 TH MAY 2010. CPU* 17245