Trimplex Investments Ltd., Kolkata V. D.C.I.T CC - XVI,Kol., Kolkata

CO 149/KOL/2012

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9272 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 12-12-2012
• Court: TRIBUNAL
• Department Lawyers: KALYAN NATH
• Assessee Lawyers: D S DAMLE
• Keywords: Reopening of assessment; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 1620/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2004-05 DEPUTY COMMISSIONER OF INCOME-TAX, VS. M/S. TRIMP LEX INVESTMENTS LTD. CENTRAL CIRCLE-XVI, KOLKATA. (PAN: AABCT1470B) (,- /APPELLANT ) (./,-/ RESPONDENT ) & CO NO.149/KOL/2012 IN & & & & / I.T.A NO. 1620/KOL/2012 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2004-05 M/S. TRIMPLEX INVESTMENTS LTD. VS. DEPUTY COMMISS IONER OF INCOME-TAX, CENTRAL CIRCLE-XVI, KOLKATA. (CROSS OBJECTOR) (RESPONDENT) DATE OF HEARING: 29.01.2014 DATE OF PRONOUNCEMENT: 31.01.2014 FOR THE REVENUE: SHRI KALYAN NATH, JCIT, SR. DR FOR THE ASSESSEE : SHRI D. S. DAMLE, FCA $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE AND CROSS OBJECTION BY ASSES SEE ARE ARISING OUT OF ORDER OF CIT(A), CENTRAL-II, KOLKATA IN APPEAL NO.152/CC-XVI /CIT(A)C-II/11-12 DATED 27.08.2012. ASSESSMENT WAS FRAMED BY DCIT, CENTRAL CIRCLE-XVI, KOLKATA U/S. 148 R.W.S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) FOR ASSESSMENT YEAR 2004-05 VIDE HIS ORDER DATED 04.11.2011. 2. THE ONLY ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A IN QUASHING THE REASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT AS BAD IN LAW. FOR THIS, REVENUE HAS RAISED FOLLOWING THREE GROUNDS: 1.THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) WAS NOT JUSTIFIED IN DECIDING THE INITIATION OF REASSESSMEN T PROCEEDINGS U/S. 147 AS BAD IN LAW. 2 ITA NO.1620/K/2012 M/S. TRIMPLEX INVESTMENTS LTD. AY:2004-05 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) AS NOT JUSTIFIED IN HOLDING THAT CONDITIONS LAID DOWN IN T HE 1 ST PROVISO OF SECTION 147 WAS NOT FULFILLED, DESPITE THE ASSESSEE NOT DISCLOSING TRUE AND FULL MATERIAL FACTS AS TO THE NATURE OF INCOME DERIVED FROM ITS PROPERTY. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THE REOPENING OF ASSESSMENT U/ S. 147 AS BAD IN LAW, WHEN BOTH THE CONDITIONS PRECEDENT TO FORM THE REASON TO BELIEVE VIZ. (A) THAT INCOME HAD BEEN UNDER ASSESSED AND (B) THAT SUCH UNDERASSESSMENT WAS DUE TO NON DISCLOSURE OF MATERIAL FACT BY THE ASSESSEE, WERE FULFILLED. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE COMPA NY FILED ITS RETURN OF INCOME ON 15.10.2004 FOR AY 2005-05. ASSESSMENT WAS COMPLETE D U/S. 143(3) OF THE ACT ON 17.11.2006. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNING AND MANAGING A BUSINESS CENTRE AND THE RECEIPTS THEREFROM WERE DISCLOSED AS INCOME FROM BU SINESS AND PROFESSION. THE AO ISSUED NOTICE U/S. 148 OF THE ACT DATED 24.03.2011 TO FRAM E REASSESSMENT FOR THE REASON THAT RECEIPT IN ASSESSEES INCOME WAS TAXABLE UNDER THE HEAD INCOM E FROM HOUSE PROPERTY AND THE SAME WAS WRONGLY ASSESSED AS INCOME FROM BUSINESS OR PRO FESSION. THE ASSESSEE BEFORE CIT(A) SUBMITTED THAT ASSESSMENT WAS REOPENED BEYOND FOUR YEARS AND THERE IS NO FAILURE ON THE PART OF THE ASSESSEE, TO DISCLOSE TRULY AND FULLY ALL MATE RIAL FACTS, WHICH ARE ATTRIBUTABLE TO THE ASSESSEE BY AO EITHER IN THE RECORDED REASONS OR IN THE ORDE R FRAMED U/S. 147 R.W.S. 148 OF THE ACT REOPENING THE ASSESSMENT. SECONDLY, THE REASSESSME NT PROCEEDINGS INITIATED U/S. 147 OF THE ACT IS BASED ON CHANGE OF OPINION FOR THE REASON THAT R EASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT WAS BASED ON REAPPRAISAL OF THE FACTS AL READY ON RECORD. LD. COUNSEL FOR THE ASSESSEE BEFORE US STATED THAT THE ASSESSEE FURNISH ED FULL PARTICULARS OF SERVICE CHARGES RECEIVED FOR FACILITIES AT THE TIME OF FILING OF RETURN AND COMPLETE EXAMINATION WAS CARRIED OUT BY THE AO WHILE FRAMING ASSESSMENT U/S. 143(3) OF THE ACT ORI GINALLY VIDE HIS ORDER DATED 17.11.2006. ADMITTEDLY, THE ASSESSMENT IS BEYOND FOUR YEARS AND THERE IS NO WHISPER IN THE REASONS RECORDED FOR ISSUING NOTICE U/S. 148 OF THE ACT OR IN THE RE ASSESSMENT ORDER FRAMED U/S. 147/148/143(3) OF THE ACT DATED 04.11.2011 THAT THERE IS FAILURE ON T HE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. ONCE THIS IS THE FACTUAL POSITION, WE ARE OF THE VIEW THAT THE CONDITIONS OF FIRST PROVISO TO SECTIO N 147 OF THE ACT ARE NOT FULFILLED AND CIT(A) HAS BROUGHT OUT THIS FACT IN PARA 9 AND 10 OF HIS O RDER AS UNDER: 9. ON PERUSAL OF THE ASSESSMENT RECORDS, IT FURTHE R TRANSPIRED THAT IN THE QUESTIONNAIRE ISSUED U/S. 142(1) THE AO HAD REQUIRED THE APPELLAN T COMPANY TO FURNISH INFORMATION WITH REGARD TO NATURE OF BUSINESS, DETAILS OF PROPERTIES OWNED, DETAILS OF RENTAL INCOME, ETC. IN RESPONSE THE APPELLANT HAD FURNISHED ITS REPLY EXPL AINING THAT RUNNING AND MAINTAINING BUSINESS CENTRE WAS ITS BUSINESS. BESIDES DETAILS O F PROPERTIES OWNED BY THE ASSESSEE; PARTY-WISE PARTICULARS OF SERVICE CHARGES RECEIVED FROM VARIOUS PARTIES WERE ALSO 3 ITA NO.1620/K/2012 M/S. TRIMPLEX INVESTMENTS LTD. AY:2004-05 FURNISHED. THE APPELLANT ALSO CLARIFIED THAT IT HAD NOT LET OUT THE PREMISE TO TENANTS AND THE INCOME WAS DERIVED FROM RUNNING AND OPERATING A BUSINESS CENTRE. AFTER EXAMINING ASSESSEES REPLY TO THE SPECIFIC QUERIES; THE AO IN THE REGULAR ASSESSMENT RECORDED HIS SPECIFIC FINDING THAT DURING THE RELEVANT YEAR THE APPELLANT CARRIED ON BUSINESS OF OPERATING A BUSINESS CENTRE AND THE INCOME BY WAY O F SERVICE CHARGES WAS ASSESSED UNDER THE HEAD PROFITS & GAINS OF BUSINESS. 10. IN THE COURSE OF APPELLATE PROCEEDINGS, THE APP ELLANTS A/R ALSO FILED COPIES OF THE ASSESSMENT ORDERS FOR THE EARLIER YEARS AS ALSO FOR THE SUBSEQUENT TWO YEARS TO SHOW THAT APPELLANTS INCOME BY WAY OF SERVICE CHARGES WAS AL L ALONG ASSESSED BY THE REVENUE UNDER THE HEAD PROFITS & GAINS OF BUSINESS AND NOT HOUSE PROPERTY AS ALLEGED BY THE AO IN THE IMPUGNED ORDER. ASSESSMENT OF SERVICE CHARGE S UNDER THE HEAD PROFITS & GAINS OF BUSINESS IN THE REGULAR ASSESSMENT THEREFORE APPEAR ED TO BE IN CONFORMITY WITH THE STAND REGULARLY FOLLOWED BY THE REVENUE IN THE EARLIER AN D SUCCEEDING ASSESSMENTS. ON THESE FACTS THEREFORE, I FIND THAT AFTER CONDUCTING ENQUI RIES IN THE ORIGINAL ASSESSMENT WITH REGARD TO NATURE OF BUSINESS CARRIED ON; THE AO HAD CONSCIOUSLY ASSESSED SERVICE CHARGES DERIVED BY THE APPELLANT FROM OPERATING AND MAINTAI NING A BUSINESS CENTRE, UNDER THE HEAD PROFITS & GAINS OF BUSINESS AS OPPOSED TO INCO ME FROM HOUSE PROPERTY. AT THE TIME WHEN THE REGULAR ASSESSMENT WAS COMPLETED; DECISION OF THE SUPREME COURT IN THE CASE OF SAMBHU INVESTMENT (P) LTD HAD ALREADY BEEN RENDERED AND THEREFORE THE AO HAD BENEFIT OF THE SAID DECISION. FROM THE FACTS ON ASSESSMENT RECORDS THEREFORE I FIND THAT SUBSEQUENT TO PASSING OF THE REGULAR ASSESSMENT IN NOVEMBER 2006 NO NEW MATERIAL OR INFORMATION CAME IN AOS POSSESSON CONSEQUENT TO W HICH HE COULD FORM HIS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX ESCAPED ASSES SMENT. MOREOVER, NEITHER IN THE RECORDED REASONS NOR EVEN IN THE ASSESSMENT ORDER, THE AO HAS EVEN ALLEGED THAT ESCAPEMENT OF INCOME WAS CONSEQUENT UPON APPELLANT S FAILURE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. IN VIE W OF ABOVE FACTS, THEREFORE, IT IS TO BE HELD THAT CONDITIONS OF THE FIRST PROVISO TO SEC. 1 47 WERE NOT FULFILLED IN THE PRESENT CASE. AS THE FACTS ARE CLEAR, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AS DISCUSSED ABOVE. WE CONFIRM THE ORDER OF CIT(A) QUASHING THE REASSESSME NT FRAMED BY AO U/S. 147 R.W.S. 148/143(3) OF THE ACT. THIS APPEAL OF REVENUE IS D ISMISSED. 4. AS WE HAVE ALREADY ADJUDICATED REVENUES APPEAL AND DISMISSED THE REVENUES APPEAL ON THE ISSUE OF JURISDICTION, WE NEED NOT TO GO INTO M ERITS OF THE CASE. AS THE ASSESSEE HAS ALSO NOT ARGUED ON THE CROSS OBJECTION, THEREFORE, THE SAME IS BEING DISMISSED AS INFRUCTUOUS. 5. IN THE RESULT, BOTH THE APPEAL OF REVENUE AND CR OSS OBJECTION OF ASSESSEE ARE DISMISSED. 6. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31.01.2 014 SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31ST JANUARY, 2014 4 ITA NO.1620/K/2012 M/S. TRIMPLEX INVESTMENTS LTD. AY:2004-05 12 '3' 4 JD.(SR.P.S.) $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT DCIT, CENTRAL CIRCLE-XVI, KOLKATA. 2 ./,- / RESPONDENT M/S. TRIMPLEX INVESTMENTS LTD., DHUN SERI HOUSE, 4A, WOODBURN PARK, KOLKATA-700 020 . 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .