ASSISSTANT COMMISSIONER OF INCOME-TAX, GUWAHATI V. SANWARMAL KHETAWAT, NAGAON

ITA 95/GTY/2023

AI Insights

The case involves an appeal by the Assistant Commissioner of Income Tax (ACIT), Circle-2, Guwahati against Sanwarmal Khetawat concerning the assessment year 2013-14. The revenue challenged the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi, which had quashed the reopening of the assessment. The primary legal issue was the validity of the notice issued under Section 148 of the Income Tax Act, 1961, after a period exceeding four years from the end of the relevant assessment year. The CIT(A) found that the reopening did not satisfy the conditions of the first proviso to Section 147, as there was no failure on the part of the assessee to disclose material facts.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 25656 (ITAT-GUWAHATI)
• Duration Of Justice: 1 year(s) 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-10-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 07-09-2023
• Other Referred Cases: CIT vs. Mirza International Ltd., ACIT vs. CEAT Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: TDS; Competent authority
• Section: 147; 148; 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “GAUHATI” BENCH: GUWAHATI (THROUGH HYBRID HEARING) Įी राजेश क ुमार, लेखा सटèय एवं Įी मनोमोहन दास, ÛयाǓयक सदèय क े सम¢ [Before Shri Rajesh Kumar, Accountant Member & Shri Manomohan Das, Judicial Member] I.T.A. No. 95/Gau/2023 Assessment Year: 2013-14 ACIT, Circle-2, Guwahati Vs. Sanwarmal Khetawat (PAN: AAGFS 0274 C) Appellant / ) अपीलाथȸ ( Respondent /(Ĥ×यथȸ) Date of Hearing / सुनवाई कȧ Ǔतͬथ 24.10.2024 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 25.11.2024 For the Appellant/ Ǔनधा[ǐरती कȧ ओर से Shri Rahul Jain For the Respondent/ राजèव कȧ ओर से Shri Kausik Ray JCIT ORDER / आदेश Per Rajesh Kumar, AM: This is the appeal preferred by the revenue against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)”] dated 01.03.2023 for the AY 2013-14. 2 I.T.A. No.95/Gau/2023 Assessment Year: 2013-14 Sanwarmal Khetawat 2. By virtue of this appeal, revenue has challenged the order passed by the Ld. CIT(A) on various grounds. Issue raised in first ground of appeal is against the deletion of addition by Ld. CIT(A) without appreciating the fact that the assessee has fully and truly disclosed the receipts of contractual amounts though the assessee claimed credit of all TDS made on entire contract receipts. 3. Facts in brief are that the assessee filed return of income on 29.09.2013 declaring total income of Rs. 3,27,66,120/-. The case of the assessee was selected for scrutiny u/s 143(3) of the Act and the assessment was framed at Rs. 3,29,66,120/- vide order dated 23.02.2016. Thereafter the case of the assessee was reopened u/s 147 read with Section 148 of the Act by issuing notice u/s 148 of the Act dated 30.03.2021 calling upon the assessee to file return within 30 days which was complied with by filing return of income on 27.04.2021 declaring the same income as was declared by the assessee in the original return of income. Apparently the case of the assessee was reopened after period of four years from the end of relevant assessment year. Finally the assessment was framed vide order dated 30.03.2021 assessing the total income of the assessee at Rs. 10,13,19,996/-. 4. The assessee challenged the said order before the Ld. CIT(A) and the ld CIT(A) allowed the appeal of the assessee on legal issue by quashing the reopening of assessment by observing and holding as under: “3. The basis of reopening of the assessment is case records of the assessee. The observation of the AO at para 4 of the order is reproduced below: “The assessee is a firm involved in execution of contract work filed its return of income for AY 2013-14 on 29.09.2013 declaring total income of Rs. 3,27,66,120/-. The case was selected for scrutiny u/s 143(3) of the Act and assessed at Rs. 3,29,66,120/- vide order dated 23.02.2016 (actually 12.02.2016) On perusal of the case records it was seen that the assessee had executed contract works for various authorities and declared a turnover of Rs. 45,44,28,543/-. It was found that assessee has not disclosed contractual receipts fully and truly the details of which are given below (details of contract receipts, not reproduced here). The assessee despite not declaring complete income as above claimed entire TDS on such receipts. Hence, the reasons were recorded u/s 147 of the Act were initiated after approval from Competent Authority on 27.03.2021. 3 I.T.A. No.95/Gau/2023 Assessment Year: 2013-14 Sanwarmal Khetawat This shows that no fresh information was received by the Assessing Officer leading to reopening of the assessment. Notice u/s 148 was issued on 30.03.2021 i..e. after more than six years from the end of assessment year. In this case first assessment was made u/s 143(3). So, reopening has to be done under the first proviso of section 147 of the Act. The primary condition for reopening after four years in a case where assessment was completed under section 143(3) is, failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. No such failure on the part of the assessee has been indicated or discussed by the Assessing Officer in his assessment order. The information which has been used by the Assessing Officer is not new (fresh). It was already there in the case records. Therefore, notice for reopening was not valid. This finding has been supported by many judicial pronouncements. One such case is CIT vs. Mirza International Ltd. [2015] 54 taxman.com 217/229 Taxman 443 (All). Conclusion Since, issue of notice u/s 148 is not valid, the reassessment based on this notice is cancelled and the additions made are hereby deleted . Appeal is allowed.” 5. After hearing rival contentions and perusing the material on record, we find that in this case, the assessment has been reopened after expiry of four years for the relevant assessment year while assessment was framed u/s 143(3) of the Act vide order dated 23.02.2016. Therefore the reopening can only be made subject to satisfaction of conditions as enumerated in first proviso to Section 147 of the Act that the escapement of income has to be attributed to the failure of the assessee to disclose material fact fully and truly which was necessary for the purpose of assessment of correct income which are led to escapement of income. We note that the Ld. CIT(A) has given finding on this issue that there is no failure on the part of the assessee to disclose any material fact truly and fully. Besides the Ld. CIT(A) has also noted that though the fresh information was received by the AO but the re-opening could only be made pursuant to the conditions of 1st proviso to section 147 of the Act. Under the circumstances we do not find any infirmity in the order of Ld. CIT(A). The case of the assessee find support from the decision of Hon’ble Apex Court in the case of ACIT vs. CEAT Ltd. [2023] 146 taxmann.com 108 (SC). Since we have dismissed the appeal of the revenue on legal issue by upholding the order of Ld. CIT(A) therefore we are not adjudicating the issue raised on merit at this stage and are being left open to be decided at later stage if the need arises for the same. 4 I.T.A. No.95/Gau/2023 Assessment Year: 2013-14 Sanwarmal Khetawat 6. In the result, the appeal of the revenue is dismissed. Order is pronounced in the open court on 25th November, 2024 Sd/- Sd/- (Manomohan Das /मनोमोहन दास) (Rajesh Kumar/राजेश क ुमार) Judicial Member/ÛयाǓयक सदèय Accountant Member/लेखा सदèय Dated: 25th November, 2024 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- ACIT, Circle-2, Guwahati 2. Respondent- Sanwarmal Khetawat, T. P. Road, Haibargaon, Nagaon, Assam- 782002 3. Ld. CIT(A)-NFAC, Delhi 4. Pr. CIT- , Guwahati 5. DR, Gauhati Bench, Guwahati True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "