Principal Commissioner Of Incometax, Kol-1, Kolkata v. Cheviot Company Limited

OD-7 ITAT/420/2016IA No.GA/1/2016 (Old No.GA/3451/2016)IA No.GA/2/2016 (Old No.GA/3452/2016)IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction (Income Tax)ORIGINAL SIDE PRINCIPAL COMMISSIONER OF INCOMETAX, KOL-1, KOLKATA -Versus- CHEVIOT COMPANY LIMITED Appearance:Mr. Prithu Dudheria, Adv....for the appellant.Mr. Avra Manumdar, Adv.Mr. Binay Gupta, Adv....for the respondent. BEFORE: The Hon’ble JUSTICE T.S. SIVAGNANAM -And- The Hon’ble JUSTICE BIVAS PATTANAYAK Date : 11[th] July, 2022. IA No.GA/1/2016 : The Court : We have heard Mr. Prithu Dudheria, learnedstanding counsel for the appellant/revenue and Mr. Avra Majumdar,learned Advocate for the respondent. There is a delay of 68 days in filing the appeal. We are satisfied with the reasons given in the affidavitfiled in support of the application for condonation of delay infiling the appeal. Therefore, we exercise discretion and allow the application and condone the delay of 68 days in filing theappeal. Accordingly, IA No.GA/1/2016 (Old No.GA/3451/2016) isallowed. ITAT/420/2016: This appeal filed by the revenue under Section 260A ofthe Income Tax Act, 1961 (the ‘Act’ for brevity) is directedagainst the order dated 20[th] January, 2016 passed by the Income TaxAppellate Tribunal, Kolkata, “A” Bench, Kolkata in ITANo.530/Kol/2012 for the assessment years 2003-04, ITA No./531/Kol/2012 for the assessment year 2004-05. The revenue has raised the following substantiali)Whether on the facts and in the circumstances ofthe case the learned Tribunal was justified in lawto quash the reassessment proceeding withoutconsidering the Explanation 2(c) to Section 147 ofthe said Act ?ii)Whether on the facts and in the circumstances ofthe case the learned Tribunal was justified in lawin not considering the fact that the assesseecompany was not an eligible unit for availingexemption under Section 10B of the said Actespecially when it had no valid certificate ascontemplated in the Explanation 2(iv) to Section10B of the said Act ? questions of law for consideration: iii)Whether on the facts and in the circumstances ofthe case the learned Tribunal was justified in lawin not considering the fact that the assesseecompany had neither included the EMA or ForeignExchange Gain due to fluctuation in its totalincome in order to claim an exemption thereof ? We have heard Mr. Prithu Dudheria, learned standingcounsel for the appellant/revenue and Mr. Avra Majumdar, learnedAdvocate for the respondent/assessee.On perusal of the order passed by the tribunal we findthat the tribunal rightly held that the reopening proceedings arewholly illegal and without jurisdiction. The tribunal noted thefacts of the case and recorded the following finding: “The AO while giving appeal effect to the orderof the Tribunal accepted the assessee’s contention andallowed the exemption under Section 10B of the Actincluding incentive i.e., receipts of EMA in suchsituation, whether the revenue on same set of facts canreopen the assessment by resorting to the provisions ofSection 148 r.w.S. 147 of the Act ? Admittedly, in thepresent case the relevant A.Y. involved is 2003-04 and2004-05 and in both the years’ assessment were completedu/s.143(3) of the Act and matter travelled upto theTribunal as noted in the reasons recorded by the A.O. inboth the years. We find from assessment order framed u/s.143(3) r.w.S.147 of the Act and consequent to that theorder of CIT(A), there is no finding as such that there isany failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessmentfor the relevant assessment year. * * * * * * * * * and truly all material facts necessary for its assessmentfor the relevant assessment year. * * * * * * * * * We find that the entire issue has beendeliberated upon in first round by the AO, by CIT(A) andeven by Tribunal on both the issues and exemption u/S. 10Bof the Act and also exemption on receipts relating to EMA.Accordingly, we find that this issue is squarely coveredin favour of the assessee and against revenue by thejudgment of Hon’ble Supreme Court in the case of CIT vs.Kelvinator India Ltd. (2010) 310 ITR 561 (SC), whereinnewly substituted provision of Section 147 of the Actw.e.f. 1.4.1989 is interpreted by observing that Section147 of the Act, as substituted w.e.f. 1.4.1989 does notpostulates conferment of power upon the AO to initiatereassessment proceeding upon his mere change of opinion.” Thus, the Tribunal after elaborately considering thefactual position found that the identical issue was adjudicatedand decided in the assessment proceedings under Section 143(3) ofthe Act and the reopening was wholly without jurisdiction. Thereis no perversity in the order passed by the tribunal for us tointerfere. In the result, the appeal filed by the revenue(ITAT/420/2016) stands dismissed on the ground that no substantialquestion of law arises for consideration. Consequently, the connected application for stay IANo.GA/2/2016 (Old No.GA/3452/2016) also stands closed. (T.S. SIVAGNANAM, J.) (BIVAS PATTANAYAK, J.) As/S.DasAR(CR)