Jatrik Unemployed Engineers Cooperative Society Ltd., Burdwan V. ACIT, Circle - 1, Burdwan, Burdwan

CO 9/KOL/2011

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7217 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 27-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K SAHA
• Keywords: Assessment record; Reason to believe; Reassessment proceedings
• Section: 143(3); 133(6); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE SRI PRAMOD KUMAR, A.M. & SRI MAHAVIR SINGH , J.M.] I.T.A NO. 2215/KOL/2010 ASSESSMENT YEAR : 2006-200 7 ASSISTANT COMMISSIONER OF INCOME TAX, -VS.- JATRI K UNEMPLOYED ENGINEERS CO-OPT. SOCIETY LTD., CIRCLE-1, BURDWAN 9A, DVC COLONY, KANAINATSH AL, BURDWAN [PAN : AAAJJ 0293 N] (APPELLANT ) ( RESPONDENT ) & C.O. NO. 09/KOL./2011 (ARISING OUT OF I.T.A. NO. 2215/KOL./2 010) ASSESSMENT YEAR : 2006-2007 JATRIK UNEMPLOYED ENGINEERS CO-OPT. SOCIETY LTD., -VS.-ASSISTANT COMMISSIONER OF INCOME BURDWAN TAX, CIRCLE-1, BURDWAN (CROSS OBJECTOR) (RESPONDENT) FOR THE DEPARTMENT : SHRI R.K. SAHA, D.R. FOR THE ASSESSEE : SHRI SOMNATH GHOSH, A.R. DATE OF HEARING : 20.03.2012 DATE OF PRONOUNCEMENT : 30.04.2012 ORDER PER PRAMOD KUMAR : - THIS APPEAL, FILED BY THE ASSESSING OFFICER, AND T HE CROSS OBJECTION, FILED BY THE ASSESSEE, CALL INTO QUESTION CORRECTNESS OF LD. COM MISSIONER OF INCOME TAX (APPEALS)S ORDER DATED 26 TH OCTOBER, 2010, IN THE MATTER OF ASSESSMENT UNDER S ECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 2006- 07. GRIEVANCES RAISED BY THE PARTIES ARE AS FOLLOWS :- ITA NO. 2215-KOL.-2010 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A.) HAS ERRED IN DELETING THE ADDITION OF RS.29,39,168/- BE ING THE DIFFERENCE BETWEEN THE GROSS RECEIPT AS PER TDS CERTIFICATES A ND THE AMOUNT CREDITED IN THE PROFIT & LOSS ACCOUNT OF THE ASSESS EE. THAT LD. CIT(A.) IS NOT JUSTIFIED TO DELETE THE ADD ITION SINCE HIS ORDER DOES NOT MENTION HOW THE DISCREPANCY OF RS.29,39,16 8/- HAS BEEN EXCLUSIVELY AND EXACTLY CLARIFIED SO THAT NO ADDITI ON CAN BE MADE ITA NO. 2215/KOL./2010 & CO-09-KOL-2011 2 C.O. NO. 09/KOL./2011 (1) FOR THAT THE LD. COMMISSIONER OF INCOME TAX (AP PEALS), ASANSOL FAILED TO APPRECIATE THAT NONE OF THE CONDITIONS PR ECEDENT EXISTED NOR WERE SATISFIED FOR THE LD. ASSISTANT COMMISSIONER O F INCOME TAX, CIRCLE-1, BURDWAN FOR HIS ALLEGED ASSUMPTION OF JUR ISDICTION U/S. 147 OF THE INCOME TAX ACT, 1961 AND THE PURPORTED FINDI NGS ON THAT BEHALF ARE ALTOGETHER ARBITRARY, UNREASONABLE AND PERVERSE . (2) FOR THAT THE LD. COMMISSIONER OF INCOME TAX (AP PEALS), ASANSOL ACTED UNLAWFULLY IN UPHOLDING THE VALIDITY OF THE N OTICE U/S. 148 OF THE INCOME TAX ACT, 1961 ISSUED BY THE LD. ASSISTANT CO MMISSIONER OF INCOME TAX, CIRCLE 1, BURDWAN WITHOUT CONSIDERING T HE NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 DATED 04.02.2009 WAS BARRED BY LIMITATION AND THE ALLEGED FINDING ON THAT BEHALF I S AB INITIO VOID, ULTRA VIRES AND NULL IN LAW. 2. THE RELEVANT MATERIAL FACTS ARE LIKE THIS. THE A SSESSEE IS ENGAGED IN THE BUSINESS OF LABOUR CONTRACTS AND CONSTRUCTION. ON 6 TH NOVEMBER, 2008, THE ASSESSING OFFICER REOPENED THE ASSESSMENT BY RECORDING THE FOLLOWING REASONS :- 06.11.2008 : SCRUTINY OF ASSESSMENT RECORDS REVEAL S THAT THE GROSS RECEIPTS OF THE ASSESSEE FROM CONTRACT RECEIPTS DUR ING THE YEAR WAS RS.99,34,707/- AS PER THE TDS CERTIFICATES ENCLOSED WITH THE RETURN OF INCOME WHEREAS THE ASSESSEE HAS SHOWN HIS GROSS BIL LS RECEIVED AT RS.76,95,539/- IN HIS PROFIT & LOSS ACCOUNT. I, THE REFORE, HAVE REASON TO BELIEVE THAT THE DIFFERENCE OF INCOME RS.22,39,1 68/- HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF THE PROVISIONS OF SECTION 147. ISSUE NOTICE U/S. 148 TO THE ASSESSEE. 3. IN THE COURSE OF REASSESSMENT PROCEEDINGS, THE A SSESSING OFFICER, MADE THE ADDITION OF RS.22,39,168/- ON THE GROUND THAT NO DOCUMENTARY EVIDENCE TO JUSTIFY THE RECONCILIATION IS PRODUCED AND THAT NOTICE U/S. 133(6) SENT TO THE RELATED PARTY FOR V ERIFICATION OF ASSESSEES CLAIM BUT NO REPLY TILL DATE IS RECEIVED . AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A.) AND THE CIT(A.) DELETED THE IMPUGNED AD DITION BY OBSERVING THAT AT THE APPELLATE STAGE, THE ISSUE WAS REMANDED TO AO AND IN HIS REPO RT DATED 06.09.2010, THE AO HAS ACCEPTED THE FACTS AS STATED BY THE APPELLANT AND THAT THERE BEING NO CONTROVERSY ON THE FACTS, THE ADDITION IS DIRECTED TO BE DELETED. YET, THE ASSESSING OFFICER IS AGGRIEVED AND IN APP EAL BEFORE US. THE ASSESSEE IS ALSO AGGRIEVED THAT THE REASSES SMENT ITSELF SHOULD HAVE BEEN HELD TO BE UNSUSTAINABLE IN LAW. ITA NO. 2215/KOL./2010 & CO-09-KOL-2011 3 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE L EGAL POSITION. 5. WE FIND IT DIFFICULT TO SEE ANY RATIONALE IN THI S APPEAL BEING FILED BY THE ASSESSING OFFICER WHEN ASSESESES EXPLANATION FOR DIFFERENCE IN THE FIGURES DISCLOSED VIDE THE PROFIT AND LOSS ACCOUNT VIS--VIS TDS CERTIFICATES HAS ALREADY BEEN ACCEPTED IN THE REMAND REPORT. ONCE THIS EXPLANATION, WHATEVER ITS WORTH, IS ACCEPTED, THE ASSESSING OFFICER CANNOT BE AGGRIEVED OF RELATED ADDITION, WHICH WAS MADE ONLY FOR THE WANT OF EXPLANATION, HAVING BEEN DELETED. WE HAVE ALSO NOTED THAT THE PRECISE REASONS FOR REOPEN ING THE ASSESSMENT WERE NEVER FURNISHED TO THE ASSESSEE. AS A MATTER OF FACT, THESE REASONS WE RE FURNISHED DURING THE COURSE OF PROCEEDINGS BEFORE US. THE CORRECT LEGAL PROCEDURE, AS HELD BY HONBLE SUPREME COURT IN THE CASE OF GKN DRIVESHAFTS (259 ITR 19), IS THAT, UPON DEMAND, THE ASSESSING OFFICER HAS TO FURNISH THE REASONS OF REOPENING TO THE ASSESSEE, AND THEN DEAL WITH THE ASSESSEES OBJECTIONS, IF ANY, TO SUCH REOPENING BEFORE PROCEEDING TO FRAME THE FRE SH ASSESSMENT. NOW THAT IT IS ON RECORD THAT THE ASSESSING OFFICER WAS SATISFIED WITH THE ASSESS EES EXPLANATION, EVEN THOUGH AT APPELLATE STAGE, THE VERY FOUNDATION OF REASSESSMENT PROCEEDI NGS CEASES TO HOLD LEGALLY SUSTAINABLE. NORMALLY, WE WOULD HAVE REFERRED THE MATTER BACK TO THE A.O. TO CONDUCT THE EXERCISE OF DEALING WITH ASSESSEES OBJECTIONS, HAVING NOTED TH AT ASSESSEES OBJECTION TO THE REOPENING HAS BEEN ACCEPTED IN THE REMAND PROCEEDINGS, WE SEE NO POINT IN THIS EMPTY FORMALITY. WE, THEREFORE, UPHOLD THE ORDER OF THE CIT(A.) AND WE A LSO HOLD THAT THE REASSESSMENT ITSELF WAS INDEED UNSUSTAINABLE IN LAW. 6. FOR THE REASONS SET OUT ABOVE, THE CONCLUSIONS A RRIVED AT BY THE CIT(A.) ARE UPHELD AND THE ASSESSEES CROSS OBJECTION IS ALSO UPHELD ON TH E ISSUE OF HIS GRIEVANCE AGAINST VALIDITY OF REASSESSMENT PROCEEDINGS. 7. IN THE RESULT, THE APPEAL IS DISMISSED AND THE C ROSS OBJECTION IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/04/ 2012. SD/- SD/- [ MAHAVIR SINGH] [PRAMOD KUMAR] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30/ 04/ 2012 ITA NO. 2215/KOL./2010 & CO-09-KOL-2011 4 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2 THE RESPONDENT 3. COMMISSIONER OF INCOME-TAX (APPEALS)- ,KOLKATA 4. CIT- , KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR, I.T.A.T., KOLKATA LAHA, SR. P.S.