AMARAVATI AGRO LTD.,PONDICHERRY V. .ACIT, CIRCLE-1, , PONDICHERRY

ITA 2275/CHNY/2024

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The case involves Amaravati Agro Limited, which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, concerning the assessment year 2013-14. The primary legal issue was the reopening of the assessment under section 147 of the Income Tax Act, 1961, after four years from the conclusion of the original assessment under section 143(3). The appellant argued that there was no failure to disclose material facts and that the reopening was based on the same grounds as a previous rectification under section 154, which was still pending. The Tribunal examined the legality of the reassessment in light of precedents that restrict the issuance of notice under section 148 when rectification proceedings under section 154 are ongoing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107350 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Other Referred Cases: CIT v. E.I.D. Parry Ltd., Sterilite Industries (India) Ltd. v. ACIT, S.M. Overseas Private Limited v. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K. ROHAN RAJ
• Assessee Lawyers: K. BALASUBRAMANIAN
• Keywords: Set aside; Reopening of assessment; Capital Gains; Assessment record
• Section: 147; 148; 143(3); 154; 54EC

Judgement Text

"आयकर अपीलीय अिधकरण, ’ए’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी जगदीश, लेखा सद˟ क े समƗ । Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri Jagadish, Accountant Member आयकर अपील सं./I.T.A. No.2275/Chny/2024 िनधाŊरण वषŊ/Assessment Year: 2013-14 Amaravati Agro Limited, 2 LE Bois, Abhishekapakkam, Pondicherry 605 007. [PAN:AAACA4655Q] Vs. The Assistant Commissioner of Income Tax, Circle 1, Pondicherry. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri K. Balasubramanian, Advocate ŮȑथŎ की ओर से/Respondent by : Shri K. Rohan Raj, Addl. CIT सुनवाई की तारीख/ Date of hearing : 03.12.2024 घोषणा की तारीख /Date of Pronouncement : 19.12.2024 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 09.07.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2013-14. 2. At the outset, the ld. AR Shri K. Balasubramanian, Advocate submits that the assessee raised a legal issue of reopening of assessment under section 147 of the Income Tax Act, 1961 [“Act” in I.T.A. No.2275/Chny/24 2 short] after 4 years of conclusion of original assessment under section 143(3) of the Act dated 26.02.2016 when there was no failure on the part of the assessee to disclose fully and truly all facts for investment in capital gains bonds as no new material has come into the possession of the Assessing Officer. He further submits that a notice under section 154/155 of the Act dated 17.10.2017 proposing to rectify the assessment order for AY 2013-14 on the very same claim under section 54EC of the Act has been issued on the assessee and the same having not been dropped, issue of notice under section 148 of the Act dated 24.01.2020 on the very same issue for the same AY is not proper in view of the decision of the Hon’ble High Court of Madras in the case of CIT v. E.I.D. Parry Ltd. [1995] 216 ITR 489]. Further, by referring to the decision of Hon’ble High Court of Madras in the case of Sterilite Industries (India) Ltd. [2012] 18 taxmann.com 351(Mad), the ld. AR vehemently argued that once notice under section 154 of the Act has been issued to rectify the error in the assessment order, for the very same reason, the Assessing Officer has no jurisdiction to issue notice under section 148 of the Act and prayed to quash the assessment order passed under section 147 r.w.s. 144 of the Act dated 20.09.2021. I.T.A. No.2275/Chny/24 3 3. The ld. DR Shri K. Rohan Raj, Addl. CIT submits that the assessee has not challenged the reopening of assessment either before the Assessing Officer or before the ld. CIT(A) and the assessee raised this legal issue of reopening of assessment for the first time before the Tribunal. He submits that no material was placed before the ld. CIT(A) that notice under section 154 of the Act has been issued for the same reasons. 4. After hearing both the parties, we note that the assessee filed its return of income for AY 2013-14 on 26.09.2013 declaring total income at ₹.1,85,69,740/- and the original assessment was completed on 26.02.2016 under section 143(3) of the Act determining total income at ₹.2,17,81,919/-. We note that on verification of assessment records, the Assessing Officer noted that the assessee claimed exemption of ₹.1,00,00,000/- under section 54EC of the Act in the return of income and the same was allowed in the assessment order. It is clear from para 1 of the assessment order that the Assessing Officer issued notice under section 148 of the Act dated 24.01.2020 to disallow the excess deduction of ₹.50,00,000/- allowed to the assessee under section 54EC of the Act. Thus, it is clear from the assessment order that the Assessing Officer reopened the assessment for AY 2013-14 I.T.A. No.2275/Chny/24 4 after lapse of 4 years from relevant assessment year without any new material in his possession to do so in terms of 1st proviso to section 147 of the Act. Thus, the proceedings initiated under section 147 of the Act are liable to be quashed. 5. Further, we note that the Assessing Officer issued notice under section 154/155 of the Act dated 17.10.2017 placed at page 4 of the paper book, wherein, the said notice was issued to disallow the excess deduction of ₹.50,00,000/- allowed to the assessee. We are of the opinion that pending conclusion of rectification proceedings under section 154 of the Act, the Assessing Officer has no jurisdiction to issue notice under section 148 of the Act in view of the decision of the Hon’ble High Court of Madras in the case of CIT v. E.I.D. Parry Ltd. (supra). Moreover, in the case of S.M. Overseas Private Limited v. CIT in Civil Appeal Nos. 3612-3613 of 2012 vide order dated 07.12.2022, the Hon’ble Supreme Court held that during the pendency of the proceedings under Section 154 of the Act, it is not permissible on the part of the Revenue to initiate the proceedings under Section 147/148 of the Act pending the proceedings under Section 154 of the Act. Further, the Hon’ble High Court of Madras, in the case of Sterilite Industries (India) Ltd. v. ACIT [2012] 18 taxmann.com 351 (Mad), held that when there is I.T.A. No.2275/Chny/24 5 absolutely no material difference on issues sought to be considered under section 154 proceedings and under section 148 of the Act, the notice issued under section 148 of the Act lacked the very basis for assumption of jurisdiction under section 147 of the Act. Under the above facts and circumstances of the case, we set aside the order of the ld. CIT(A) by holding the reassessment order dated 20.09.2021 is bad under law and allow the grounds raised by the assessee. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced on 19th December, 2024 at Chennai. Sd/- Sd/- (JAGADISH) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 19.12.2024 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. "