Classic Rubber, Howrah V. ITO, Ward - 46(1), Kolkata, Kolkata

ITA 105/KOL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2453 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 15-01-2010
• Court: TRIBUNAL
• Department Lawyers: SRI P K MISHRA
• Assessee Lawyers: SANJAY BHATTACHARJEE
• Keywords: Unexplained cash credit; Reason to believe; Reassessment proceedings
• Section: 143(3); 142(1); 133A; 143(2); 147; 148

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA ( (( ( ) )) ) . .. . . . . . , ,, , ! ! ! ! '#$ '#$ '#$ '#$ . .. .% %% % . . . . &' &' &' &', , , , () () () () [BEFORE HONBLE SHRI G. D. AGRAWAL, VP & HONBLE SR I D. K. TYAGI, JM] $* $* $* $* / ITA NO. 105 /KOL/2010 +, #-. +, #-. +, #-. +, #-./ // / ASSESSMENT YEAR : 2006-07 M/S. CLASSIC RUBBER, HOWRAH -VS- INCOME-TAX OFFIC ER, WD-46(1), KOLKATA. (PA NO. AADFC 8529 M) (01 / APPELLANT ) (2&01/ RESPONDENT ) FOR THE APPELLANT: / SHRI SANJAY BHATTACHARJEE FOR THE RESPONDENT: / SHRI SRI P. K. MISHRA (%3 / ORDER PER D. K. TYAGI, JM ( . . . . % %% % . . . . &' &' &' &', () ) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), KOLKATA DATED 19.10.2009 FOR THE ASSESSMEN T YEAR 2006-07 ON THE FOLLOWING GROUNDS OF APPEAL : 1) THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) W AS WRONG IN NOT HOLDING THAT THE ASSESSING OFFICERS INITIATION OF PROCEEDING UNDER SECTION 147 HAD BEEN BAD IN LAW AND THUS HE ERRED IN CONFIRMING THE ASSESSING OFFICERS ACTION IN MAKING THE ASSESSMENT UNDER SECTION 143(3)/147. 2) THAT WITHOUT PREJUDICE TO THE CONTENTION RAISED IN GROUND NO.1 ABOVE, THE COMMISSIONER OF INCOME-TAX (APPEALS) SHOULD HAVE AP PRECIATED THAT THE ASSESSING OFFICER HAD BEEN REQUIRED TO TAKE ACTION AS REGARDS THE RETURN OF INCOME FILED BY THE APPELLANT, BEFORE INITIATING ANY PROCEEDING UNDER S ECTION 147. 3) THAT THE COMMISSIONER OF INCOME-TAX(APPEALS) WAS WRONG IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING AN ADDITION OF R S.6,56,554 AS ALLEGED UNEXPLAINED CASH CREDIT U/S 68. 4) THAT WITHOUT PREJUDICE TO THE CONTENTION RAISED IN GROUND NO.3 ABOVE, THE COMMISSIONER OF INCOME-TAX(APPEALS) WAS WRONG IN HO LDING THAT THE APPELLANT HAD ALLEGEDLY FAILED TO EXPLAIN THE SOURCE FOR THE CASH CREDITED IN THE BOOKS AND THUS HE ERRED IN CONFIRMING THE ADDITION OF RS.6,56,554. 5) THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL AT OR BEFORE THE HEARING OF THE APPEAL. 2 2. GROUND NOS. 1 AND 2 ARE AGAINST THE ACTION OF TH E LD. CIT(A) IN CONFIRMING THE AOS ACTION IN MAKING THE ASSESSMENT U/S. 143(3)/14 7 OF THE I. T. ACT. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETUR N OF INCOME DISCLOSING INCOME OF RS.46,398/-. A SURVEY U/S. 133A WAS CONDUCTED IN T HE CASE OF THE ASSESSEE. IN VIEW OF THE FINDINGS DURING THE SURVEY THE AO HELD THAT THE RE IS A REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT WITHIN THE ME ANING OF SEC. 147. THE AO ISSUED NOTICE U/S. 148 ON 28.6.2007. SUBSEQUENTLY, NOTICE S U/S. 143(2) AND 142(1) WERE ISSUED TO THE ASSESSEE AND COMPLETED THE ASSESSMENT U/S. 1 43(3) ON 5.12.2008. IN APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO. AGGRIEV ED BY THE SAID ORDER, NOW THE ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT UNLESS THE RETURN FILED BY THE ASSESEE IS SCRUTINIZ ED BY THE AO, HE CANNOT COME TO THE CONCLUSION OF ANY ESCAPEMENT. HE WILL HAVE TO LOOK INTO THE RETURN TO SEE WHETHER THERE IS ESCAPEMENT OR NOT. INCOME CAN BE SAID TO HAVE E SCAPED ASSESSMENT ONLY IF IT IS NOTICED AFTER THE PROCEEDINGS HAVE BEEN TERMINATED EITHER BY WAY OF ASSESSMENT UNDER SECTION 143(3) OR WHEN THE TIME LIMIT FOR ISSUE OF NOTICE U/S. 143(2) HAS EXPIRED. IF SUCH TIME HAS NOT EXPIRED, IT CANNOT BE TERMED AS ESCAPE MENT AND THE AO CANNOT RESORT TO PROCEEDINGS U/S. 147. IN SUPPORT OF HIS CONTENTION , HE RELIED ON THE DECISION IN THE CASE OF SUPER SPINNING MILLS LTD. VS. ADDL. CIT REPORTED IN (2010) 129 TTJ (CHENNAI 305. 4. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF THE LD. CIT(A) AND PRAYED BEFORE THE BENCH TO CONFIRM THE SAME. 5 WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOT H THE SIDES, PERUSED THE MATERIAL PLACED BEFORE US AND THE CASE LAW CITED BY THE LD. COUNSEL FOR THE ASSESSEE. WE FIND THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 31.10.2006. THUS, THE AO HAD TIME TO ISSUE NOTICE U/S. 143(2) OF THE ACT UP TO 31.10 .2007. INSTEAD HE INITIATED REASSESSMENT PROCEEDINGS U/S. 147 BY ISSUING NOTICE U/S. 148 PRIOR TO THIS DATE I.E. ON 28.6.2007. IN THE LIGHT OF THESE UNDISPUTED FACTS, WE FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL THAT UNLESS THE RETURN FILED BY THE ASS ESEE IS SCRUTINIZED BY THE AO, HE CANNOT COME TO THE CONCLUSION OF ANY ESCAPEMENT. H E WILL HAVE TO LOOK INTO THE RETURN TO SEE WHETHER THERE IS ESCAPEMENT OR NOT. INCOME CAN BE SAID TO HAVE ESCAPED 3 ASSESSMENT ONLY IF IT IS NOTICED AFTER THE PROCEEDI NGS HAVE BEEN TERMINATED EITHER BY WAY OF ASSESSMENT UNDER SECTION 143(3) OR WHEN THE TIME LIMIT FOR ISSUE OF NOTICE U/S. 143(2) HAS EXPIRED. IF SUCH TIME HAS NOT EXPIRED, IT CANNO T BE TERMED AS ESCAPEMENT AND THE AO CANNOT RESORT TO PROCEEDINGS U/S. 147. WE ALSO FIN D THAT THE ITAT, CHENNAI A THIRD MEMBER BENCH IN THE CASE OF SUPER SPINNING MILLS LT D. VS. ADDL. CIT REPORTED IN (2010) 129 TTJ (CHENNAI 305 HAS CONCLUDED THAT UNLESS THE RETURN FILED BY THE ASSESEE IS SCRUTINI ZED BY THE AO, HE CANNOT COME TO THE CONCLUSION OF ANY ESCAPEMENT. AO CANNOT INITIATE PROCEEDINGS U/S. 147 WHEN THE TIME FOR ISSUANCE OF NOTICE U/S. 143(2) HAS NOT EXPIRED. IN THIS VIEW OF THE MATTER AND FOLLOWING THE RATIOS LAID DOWN IN THE CASE CITED SUPRA, WE QUASH THE ORDERS OF THE LOWER AUTHORITIES AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE. 6. SINCE WE HAVE QUASHED THE REASSESSMENT PROCEEDIN GS THERE IS NO NEED TO ADJUDICATE THE OTHER GROUNDS ON MERIT. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 16.7.10 SD/- SD/- . .. . . . . . , , , , ! ! ! ! . . . . % %% % . . . . &' &' &' &', , , , () (G. D. AGRAWAL) (D. K. TYAGI) VICE PRESIDENT JUDICIAL MEMBER ( (( (4 4 4 4) )) ) DATED :16 TH JULY, 2010 #56 +7 +8# JD.(SR.P.S.) (%3 9 2++: %:-;- COPY OF THE ORDER FORWARDED TO: 1. 01 /APPELLANT M/S. CLASSIC RUBBER, VILL. SUREKHALI, PO PANCHALA, DIST. HOWRAH, PIN-711322. 2 2&01 / ITO, WARD-46(1), KOLKATA.. .. . 3. +3/ THE CIT, KOLKATA 4. +3 ()/ THE CIT(A), KOLKATA 5. #B+' 2+ / DR, KOLKATA BENCHES, KOLKATA &: 2+/ TRUE COPY, (%3C/ BY ORDER, $ /DEPUTY REGISTRAR .