Itta/559/2012 Of Commissioner Of Income Tax v. M/S. Jolly Steelite Engg. Pvt. Ltd

THE HONOURABLE SRI JUSTICE GODA RAGHURAMANDTHE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO ITTA No. 559 of 2012 Dated: 19-12-2012 Between: Commissioner of Income Tax-II,Hyderabad. And M/s Jolly Steelite Engg. Pvt. Ltd.,Hydeerabad. …Appellant …Respondent. THE HONOURABLE SRI JUSTICE GODA RAGHURAMANDTHE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO ITTA No. 559 of 2012 Judgment:(Per Hon’ble Sri Justice Goda Raghuram) Heard Sri S.R.Ashok, learned Senior counsel for theRevenue in this appeal preferred against the order dated 5-12-2007 of the Income Tax Appellate Tribunal, HyderabadBench rejecting MA No. 96/Hyd/2007 in ITA No. 36/Hyd/2002. By an order of Assessment dated 21-3-2001 under theWealth Tax Act, 1957 the value of the 7000 Sq. yards plot wasassessed to tax. Aggrieved, the assessee preferred an appealto the CIT (Appeals), Hyderabad. The appellate authority by theorder dated 10-5-2002 deleted this asset from computation toWealth Tax on the ground that the assessee could not constructthe building on the land in question despite several efforts,commencing from 1975. This conclusion of the appellateauthority was despite the finding that unless the construction ofthe building is completed on the land, the asset cannot beexempted under Section 2(ca)(v) of the Act. However asappears from the record, the appellate authority failed toconsider one of the grounds urged by the assessee, namely thatthe order of Assessment itself was void as notice under Section16(2) of the Act was not served on the assessee before theexpiry of 12 months from the date of filing of the return ofWealth, as mandated by the proviso to the provision. Aggrieved by the appellate order, Revenue preferredappeals to the Tribunal vide WTA Nos. 34 to 38/Hyd/2002. Theassessee preferred cross-appeals substantively contending thatthe Commissioner (Appeals) ought to have held that the order ofAssessment is void ab initio on the ground that statutory noticeunder Section 16 (2) of the Act was not served on the assessee-company before the expiry of 12 months from the date of filing ofthe returns. By the order dated 18-5-2004 the Tribunal rejectedRevenue’s appeal and allowed the assessee’s cross-appeal onthe singular ground that the order of Assessment itself wasinvalid for transgression of the provisions of Section 16 (2) ofthe Act. Revenue filed application for recall of the order dated 18-5-2004 on the ground that the Tribunal had undertaken scrutinyof an order which was not considered by the Commissioner anddid not form part of the order. This application was rejected bythe order impugned. It is not in dispute and the material on record substantiatesthis fact, as held by the Tribunal in the order dated 18-5-2004that Revenue failed to serve on the assessee a notice within 12months from the date the return of Wealth was filed. Thereforethe order of Assessment was invalid. This aspect of the matterwas specifically raised by the assessee in the appeal before theCommissioner, who however appears to have proceeded toallow the appeal on a sympathetic ground. Aggrieved thereby,the Revenue preferred the appeal and assessee a cross-appeal. In the facts and circumstances we are satisfied that theissue whether the order of Assessment itself is void ab initiofor violation of provisions of Section 16 (2) of the Actsquarely falls within the contours of appellate scrutiny beforethe Tribunal. The Final order dated 18-5-2004 of the Tribunal concluding on the invalid nature of the initial assessment orderbeing therefore impeccable, no recall of such an order waswarranted, as rightly held by the Tribunal in the impugned orderrejecting Revenue’s application for recall. No question of law let alone a substantial question of lawarises for consideration in this appeal and it is accordinglydismissed at the stage of admission. _________________________ GODA RAGHURAM, J 19[th] December, 2012 GRR _______________________________ M.S.RAMACHANDRA RAO, J