Calcutta High Court
Tax vs Cheviot Company Limited on 11 July, 2022
OD-7
ITAT/420/2016
IA No.GA/1/2016 (Old No.GA/3451/2016)
IA No.GA/2/2016 (Old No.GA/3452/2016)
IN THE HIGH COURT AT CALCUTTA
Special Jurisdiction (Income Tax)
ORIGINAL SIDE
PRINCIPAL COMMISSIONER OF INCOME
TAX, 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 : 11th July, 2022.
IA No.GA/1/2016 :
The Court : We have heard Mr. Prithu Dudheria, learned
standing 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 affidavit
filed in support of the application for condonation of delay in
filing the appeal. Therefore, we exercise discretion and allow
the application and condone the delay of 68 days in filing the
appeal.
Accordingly, IA No.GA/1/2016 (Old No.GA/3451/2016) is
allowed.
ITAT/420/2016:
This appeal filed by the revenue under Section 260A of
the Income Tax Act, 1961 (the 'Act' for brevity) is directed
against the order dated 20th January, 2016 passed by the Income Tax
Appellate Tribunal, Kolkata, "A" Bench, Kolkata in ITA
No.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 substantial
questions of law for consideration:
i) Whether on the facts and in the circumstances of
the case the learned Tribunal was justified in law
to quash the reassessment proceeding without
considering the Explanation 2(c) to Section 147 of
the said Act ?
ii) Whether on the facts and in the circumstances of
the case the learned Tribunal was justified in law
in not considering the fact that the assessee
company was not an eligible unit for availing
exemption under Section 10B of the said Act
especially when it had no valid certificate as
contemplated in the Explanation 2(iv) to Section
10B of the said Act ?
iii) Whether on the facts and in the circumstances of
the case the learned Tribunal was justified in law
in not considering the fact that the assessee
company had neither included the EMA or Foreign
Exchange Gain due to fluctuation in its total
income in order to claim an exemption thereof ?
We have heard Mr. Prithu Dudheria, learned standing
counsel for the appellant/revenue and Mr. Avra Majumdar, learned
Advocate for the respondent/assessee.
On perusal of the order passed by the tribunal we find
that the tribunal rightly held that the reopening proceedings are
wholly illegal and without jurisdiction. The tribunal noted the
facts of the case and recorded the following finding:
"The AO while giving appeal effect to the order
of the Tribunal accepted the assessee's contention and
allowed the exemption under Section 10B of the Act
including incentive i.e., receipts of EMA in such
situation, whether the revenue on same set of facts can
reopen the assessment by resorting to the provisions of
Section 148 r.w.S. 147 of the Act ? Admittedly, in the
present case the relevant A.Y. involved is 2003-04 and
2004-05 and in both the years' assessment were completed
u/s.143(3) of the Act and matter travelled upto the
Tribunal as noted in the reasons recorded by the A.O. in
both the years. We find from assessment order framed u/s.
143(3) r.w.S.147 of the Act and consequent to that the
order of CIT(A), there is no finding as such that there is
any failure on the part of the assessee to disclose fully
and truly all material facts necessary for its assessment
for the relevant assessment year.
* * * * * * * * *
We find that the entire issue has been
deliberated upon in first round by the AO, by CIT(A) and
even by Tribunal on both the issues and exemption u/S. 10B
of the Act and also exemption on receipts relating to EMA.
Accordingly, we find that this issue is squarely covered
in favour of the assessee and against revenue by the
judgment of Hon'ble Supreme Court in the case of CIT vs.
Kelvinator India Ltd. (2010) 310 ITR 561 (SC), wherein
newly substituted provision of Section 147 of the Act
w.e.f. 1.4.1989 is interpreted by observing that Section
147 of the Act, as substituted w.e.f. 1.4.1989 does not
postulates conferment of power upon the AO to initiate
reassessment proceeding upon his mere change of opinion."
Thus, the Tribunal after elaborately considering the
factual position found that the identical issue was adjudicated
and decided in the assessment proceedings under Section 143(3) of
the Act and the reopening was wholly without jurisdiction. There
is no perversity in the order passed by the tribunal for us to
interfere.
In the result, the appeal filed by the revenue
(ITAT/420/2016) stands dismissed on the ground that no substantial
question of law arises for consideration.
Consequently, the connected application for stay IA
No.GA/2/2016 (Old No.GA/3452/2016) also stands closed.
(T.S. SIVAGNANAM, J.)
(BIVAS PATTANAYAK, J.)
As/S.Das
AR(CR)
