Panchanan Pradhan, Khurda V. ITO, Khurda Ward, Khurda

ITA 10/CTK/2017

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 7968 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 11 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P C SETHI
• Keywords: Principle of natural justice; Tangible material; Assessment record; Reason to believe; Reassessment proceedings; TDS
• Section: 143(3); 201; 147; 148

Judgement Text

, . . , , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH , CUTTACK , BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ./ ITA NO. 10 / CTK /20 1 7 ( / ASS ESSMENT YEAR :20 09 - 20 10 ) PANCHANAN PRADHAN, ASHOK NAGAR, 2 ND LANE, BALUGAON, KHURDA VS. ITO, KHURDA WARD, KHURDA ./ ./ PAN/GIR NO. : A JHPP 4713 D ( / APPELLANT ) .. ( / RESPONDENT ) /AS SESSEE BY : SHRI P.C.SETHI , ADVOCATE /REVENUE BY : SHRI SUBHENDU DUTTA, DR / DATE OF HEARING : 11 / 12 /201 9 / DATE OF PRONOUNCEMENT 17 / 12 /201 9 / O R D E R THE ASSESSEE HAS FILED THIS APPEAL AGA INST THE ORDER OF CIT(A) - 1 , BHUBANESWAR, DATED 06.09.2016 , FOR THE ASSESSMENT YEAR 2009 - 2010 , ON THE FOLLOWING GROUNDS : - 1. THAT, THE LEARNED CIT (A) HAS COMMITTED SERIOUS ERROR IN NOT QUASHING THE ORDER PASSED BY THE LEARNED ASSESSING OFFICER WHICH IS UNJUST, ILLEGAL, ARBITRARY, WITHOUT JURISDICTION, CONTRARY TO THE PROVISIONS OF THE INCOME - TAX ACT, 1961 (HEREIN AFTER REFERRED AS 'THE ACT') AND HAS BEEN PASSED IN GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. 2. THAT, THE LEARNED CIT (A) HAS COMMITTED SERIOUS ERROR IN NOT QUASHING THE ASSESSMENT ORDER INITIATED U/S 147 OF THE ACT WITHOUT HAVING ANY REASONS ON THE SELF SAME FACTS, WHICH HAS BEEN CONSIDERED BY THE LEARNED ASSESSING OFFICER IN THE ASSESSMENT ORDER U/S 143(3) OF THE ACT. 3. THA T, THE LEARNED CIT (A) HAS COMMITTED SERIOUS ERROR IN NOT QUASHING THE ASSESSMENT ORDER WHEREIN THE LEARNED ASSESSING OFFICER HAS FAILED TO PROVE THAT THE ALLEGED INCOME ESCAPED OWING TO FAILURE ON THE PART OF THE APPELLANT. ITA NO. 10 /CTK/201 7 2 4. THAT, THE LEARNED CIT (A) HAS COMMITTED SERIOUS ERROR IN NOT DELETING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER OF RS.1,60,295/ - WHICH IS CONTRARY TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THAT, THE APPELLANT MAY ADD, ALTER, DELETE OR AMEND ANY OF THE GROUNDS AT TH E TIME OF HEARING OF THE MATTER WITH THE LEAVE OF THE HON'BLE ITAT. 2. BRIEF FACTS OF THE CASE THE ASSESSEE DERIVES INCOME FROM SUPPLY OF LABOUR AND OTHER SOURCES AND FILED HIS RETURN OF INCOME ELECTRONICALLY ON 30.09.2009 DECLARING TOTAL INCOME OF RS.10, 90,630/ - . THERE AFTER , THE ASSESSMENT WAS COMPLETED BY THE AO U/S.143(3) OF THE ACT ASSESSING TOTAL INCOME OF RS.11, 45,260/ - . SUBSEQUENTLY, THE AO REASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS.13,05,560/ - AND MADE ADDITION OF RS.1 ,60,295/ - BEING EXC ESS OF ASSETS OVER LIABILITIES. AGAINST WHICH THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) AND THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. NOW, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL AGAINST THE IMPUGNED ORDER PASSED BY THE CIT(A). 3. L D. COUNSEL FOR THE ASSESSEE SUBMITTED THAT FROM THE REASONS RECORDED BY THE AO ON 19.02.2014, IT IS CLEARLY DISCERNIBLE THAT WHILE INITIATING REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AND ISSUING NOTICE U/S.148 OF THE ACT, THERE WAS NO NEW TANGIBLE MATER IAL IN THE HANDS OF THE AO AS HE ONLY PERUSED THE RELEVANT ASSESSMENT ORDER AND INITIATED THE REASSESSMENT PROCEEDINGS. LD. COUNSEL VEHEMENTLY POINTED OUT THAT AS PER THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA, [2010] 320 ITR 561, IF THERE IS NO NEW MATERIAL IN THE HANDS OF THE AO, INITIATION OF REASSESSMENT PROCEEDINGS ISSUING NOTICE U/S.148 OF THE ACT IS NOT VALID. LD. COUNSEL FURTHER SUBMITTED THAT THE ITA NO. 10 /CTK/201 7 3 ASSESSEE HAS SUBMITTED ALL RELEVANT FACTS AND CIRCUMSTANCES BEFOR E THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHICH ARE RELEVANT FOR THE PURPOSE OF FRAMING ASSESSMENT IN THE HANDS OF THE ASSESSEE. THEREFORE, ON THE SAME ASSESSMENT RECORD WITHOUT ANY NEW TANGIBLE MATERIAL, REASSESSMENT PROCEEDINGS CANNOT BE INITI ATED. 4. REPLYING TO THE ABOVE, LD. DEPARTMENTAL REPRESENTATIVE(DR) SUBMITTED THAT THIS GROUND HAS NOT BEEN RAISED BY THE ASSESSEE BEFORE THE AO AND THE LD. CIT(A) HAS DISMISSED THE SAME GROUND IN PARA 3 OF THE FIRST APPELLATE ORDER BY HOLDING THAT ALL THE CONDITIONS AS LAID DOWN IN LAW FOR INITIATION OF PROCEEDINGS U/S.147 OF THE ACT WERE SATISFIED IN THE CASE OF THE ASSESSEE. 5. ON CAREFUL CONSIDERATION OF RIVAL SUBMISSIONS OF BOTH THE PARTIES, FIRST OF I FIND IT APPROPRIATE AND NECESSARY TO REPRODUCE TH E REASONS RECORDED BY THE AO ON 19.02.2014 WHILE INITIATING THE REASSESSMENT PROCEED INGS, WHICH READS AS FOLLOWS : - 19/02/14 THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S.143(3) OF THE I.T.ACT ON 30.11.2011 DETERMINING A TOTAL INCOME OF RS.11,45,255/ - . LA TER ON PERUSAL OF RECORD AND 26AS DATA FOR THE F/Y 2008 - 09 , IT IS FOUND THAT THE A HAD CONTRACTUAL RECEIPT OF RS.5,50,000/ - FROM ET ENVIROTECH OVERSEAS (P) LTD. BUT THE A HAS NOT DISCLOSED SUCH RECEIPT IN THE P&L A/C FOR THE YEAR ENDED 31.03.2009. IT IS ALSO FOUND THAT THOUGH IT HAS CLAIMED TDS OF RS.3,58,457/ - IN HIS RETURN OF INCOME TDS OF RS.1,98,162/ - HAS BEEN SHOWN AS CURRENT ASSET IN THE BALANCE SHEET WHICH LED TO SUPPRESSION OF ASSET. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT INCOME CHAR GEABLE TO TAX HAS ESCAPED ASSESSMENT TO THE EXTENT OF RS.7,10,295/ - (RS.5,50,000/ - + RS.1,60,295/ - ) WITHIN THE MEANING OF SEC.147 OF THE I T ACT. ISSUE NOTICE U/S.148. ITA NO. 10 /CTK/201 7 4 FROM THE ABOVE, I AM UNABLE TO SEE ANY IOTA OF FACT THAT THERE WAS ANY NEW TANGIBLE MAT ERIAL IN THE HANDS OF THE AO WHILE INITIATING REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AND ISSUING NOTICE U/S.148 OF THE ACT. AS PER THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA(SUPRA) , IT IS A MANDATE AND REQUIREMENT OF PROVISION OF SECTION 147 & 148 OF THE ACT THAT WHILE INITIATING REASSESSMENT PROCEEDINGS AND ISSUING NOTICE U/S.148 OF THE ACT, THE AO IS REQUIRED TO ASSUME VALID JURISDICTION. FOR THE PURPOSE OF ISSUING VALID JURISDICTION IT IS ALSO REQUIRED THAT THERE SH OULD BE NEW TANGIBLE MATERIAL IN THE HANDS OF THE AO, WHICH WAS NOT BEFORE THE AO DURING ORIGINAL ASSESSMENT PROCEEDINGS AND THE AO IS ALSO REQUIRED TO RECORD A SATISFACTION THAT THE INCOME HAS ESCAPED ASSESSMENT FOR A PARTICULAR ASSESSMENT YEAR. IN THE PR ESENT CASE FROM THE REASONS RECORDED BY THE AO, AS REPRODUCED ABOVE, I AM UNABLE TO SEE ANY NEW TANGIBLE MATERIAL IN THE HANDS OF THE AO WHILE INITIATING REASSESSMENT PROCEEDINGS AND ISSUING NOTICE U/S.148 OF THE ACT. THEREFORE, THE GRIEVANCE OF THE ASSESS EE IS ALLOWED AND RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA (SUPRA) , THE LEGAL GROUND RAISED BY THE ASSESSEE IS ALLOWED AND INITIATION OF REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT, NOTICE U /S.148 OF THE ACT AND ALL CONSEQUENT PROCEEDINGS AND ORDERS INCLUDING REASSESSMENT ORDER AND IMPUGNED FIRST APPELLATE ORDER ARE HEREBY QUASHED. ACCORDINGLY, LEGAL GROUND NOS. 2 & 3 ARE ALLOWED. 6. SINCE I HAVE QUASHED THE REASSESSMENT ORDER PASSED BY THE AO ALONG WITH THE ALL THE CONSEQUENT PROCEEDINGS BY ALLOWING THE LEGAL ITA NO. 10 /CTK/201 7 5 GROUNDS OF THE ASSESSEE, THEREFORE, OTHER GROUNDS RAISED BY THE ASSESSEE ARE NOT ADJUDICATED UPON. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED ON LEGAL GROUND . O RDER PRONOUNCE D IN THE OPEN COURT ON 17 / 12 / 201 9 . S D/ - ( CHANDRA MOHAN GARG ) / JUDICIAL MEMBER CUTTACK ; DATED 17 / 12 /201 9 . . / PKM , S R.P.S. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) , / ITAT, CUTTACK 1. / THE APPELLANT - . PANCHANAN PRADHAN, ASHOK NAGAR, 2 ND LANE, BALUGAON, KHURDA 2. / THE RESPONDENT - ITO, KHURDA WARD,KHURDA 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//