Southern Academy of Maritime Studies Pvt. Ltd., CHENNAI V. DCIT, CHENNAI

ITA 1087/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8908 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 14-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 22-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M MURUGABOOPATHY
• Assessee Lawyers: G NARAYANASWAMY
• Section: 143(3); 147; 148

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL B / SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER !./ ITA NO.1087/MDS/2016 # $%# / ASSESSMENT YEAR : 2006-07 M/S SOUTHERN ACADEMY OF MARITIME STUDIES PVT. LTD., C/O S. VENKATRAM & CO., CHARTERED ACCOUNTANTS, 218, TTK ROAD, ALWARPET, CHENNAI - 600 018. PAN : AAGCS 1094 R V. THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE VI(3), CHENNAI - 600 034. ('(/ APPELLANT) ()*'(/ RESPONDENT) '( + , / APPELLANT BY : SHRI G. NARAYANASWAMY, FCA )*'( + , / RESPONDENT BY : SHRI M. MURUGABOOPATHY, ADDL. CI T - $ + ./ / DATE OF HEARING : 14.06.2016 01% + ./ / DATE OF PRONOUNCEMENT : 01.07.2016 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 15, CHENNAI, DATED 17.03.2016 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2 I.T.A.NO.1087/MDS/16 2. SHRI G. NARAYANASWAMY, THE LD. REPRESENTATIVE FO R THE ASSESSEE, SUBMITTED THAT THE ORIGINAL ASSESSMENT WA S COMPLETED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (I N SHORT 'THE ACT') ON 12.12.2008. THE ASSESSING OFFICER WITHOUT ANY R EASON REOPENED THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT ON 31.03.2013, WHICH IS BEYOND THE PERIOD OF FOUR YEAR S FROM THE END OF THE RELEVANT ASSESSMENT YEAR. ACCORDING TO THE LD. REPRESENTATIVE, THERE WAS NO NEW MATERIAL AVAILABLE ON RECORD NOR T HERE WAS ANY ALLEGATION OF THE ASSESSING OFFICER THAT THE ASSESS EE HAD NOT DISCLOSED PARTICULARS WHICH WERE REQUIRED FOR COMPLETING THE ASSESSMENT. THE ASSESSING OFFICER, AFTER RECONSIDERING THE PROFIT & LOSS ACCOUNT, WHICH IS VERY MUCH AVAILABLE ON RECORD DURING THE COURSE OF ASSESSMENT PROCEEDING, AT THE INITIAL STAGE, FOUND THAT THE AD MINISTRATIVE EXPENSES DEBITED TO PROFIT & LOSS ACCOUNT WAS NOT ADDED BACK TO THE TOTAL INCOME. ACCORDING TO THE LD. REPRESENTATIVE, IN TH E ABSENCE OF ANY NEW MATERIAL, THE ASSESSING OFFICER CANNOT REOPEN T HE ASSESSMENT BEYOND THE PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. 3. ON THE CONTRARY, SHRI M. MURUGABOOPATHY, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASS ESSING OFFICER 3 I.T.A.NO.1087/MDS/16 AFTER EXAMINING THE PROFIT & LOSS ACCOUNT, FOUND TH AT A SUM OF ` 55,552/- TOWARDS BENEFIT TAX STANDS, INCLUDED IN TH E ADMINISTRATIVE EXPENSES. THEREFORE, THE SAME WAS ADDED BACK TO TH E TOTAL INCOME AFTER REOPENING THE ASSESSMENT. SINCE THE INCOME C HARGEABLE TO TAX ESCAPED ASSESSMENT, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER HAS RIGHTLY REOPENED THE ASSESSMENT EVEN THOUGH THE PERIOD OF FOUR YEARS EXPIRED FROM THE END OF THE RELEVANT ASSESSME NT YEAR. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, INITIALLY THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) O F THE ACT ON 12.12.2008. SUBSEQUENTLY, THE ASSESSING OFFICER R EOPENED THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 OF T HE ACT ON 31.03.2013. AS RIGHTLY SUBMITTED BY THE LD. REPRES ENTATIVE FOR THE ASSESSEE, THERE IS NOT EVEN A WHISPER IN THE ASSESS MENT ORDER THAT THERE WAS NEGLIGIBLE ON THE PART OF THE ASSESSEE IN DISCLOSING THE MATERIAL FACTS WHICH ARE RELEVANT FOR COMPLETING TH E ASSESSMENT. 5. I HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 147 OF THE ACT. PROVISO TO SECTION 147 OF THE ACT CLEARLY SAYS THAT WHEN THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT, THE 4 I.T.A.NO.1087/MDS/16 ASSESSMENT CANNOT BE REOPENED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR PROVIDED THERE WAS NEGLIGIBLE ON THE PART OF THE ASSESSEE IN FURNISHING THE MATERIAL FACTS THAT ARE REQUIRED FOR COMPLETING THE ASSESSMENT. IN THE CAS E BEFORE US, NO SUCH ALLEGATION WAS MADE. THE ASSESSING OFFICER HA S REAPPRECIATED THE PROFIT & LOSS ACCOUNT AVAILABLE ON RECORD, WHIC H WAS FILED BY THE ASSESSEE IN THE COURSE OF REGULAR ASSESSMENT, AND F OUND THAT A SUM OF ` 55,552/- ESCAPED ASSESSMENT. THIS TRIBUNAL IS OF T HE CONSIDERED OPINION THAT WHEN THE ASSESSEE HAS FURNISHED ALL TH E MATERIAL BEFORE THE ASSESSING OFFICER, IT IS FOR HIM TO EXAMINE THE SAME IN THE REGULAR ASSESSMENT. THE PROFIT & LOSS ACCOUNT, WHICH WAS S AID TO BE THE BASE FOR MAKING ADDITION IN THE REASSESSMENT PROCEE DING, WAS VERY MUCH AVAILABLE BEFORE THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT ITSELF. THEREFORE, AS RIGHTLY SUBMITTED BY THE LD. REPRESENTATIVE FOR THE ASSESSEE, IN THE ABSENCE OF ANY NEW MATERIAL, THE A SSESSING OFFICER IS NOT JUSTIFIED IN REOPENING THE ASSESSMENT, MORE PAR TICULARLY, AFTER EXPIRY OF FOUR YEARS PERIOD FROM THE END OF THE REL EVANT ASSESSMENT YEAR. IN THOSE CIRCUMSTANCES, THE REOPENING OF ASS ESSMENT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEAR, IS NOT JUSTIFIED IN THE EYE OF LAW. ACCORDINGLY, THE ORDERS OF THE AUTHORITIES 5 I.T.A.NO.1087/MDS/16 BELOW ARE SET ASIDE AND THE ADDITION MADE BY THE AS SESSING OFFICER IS DELETED. 6. SINCE THE REOPENING IS HELD TO BE BAD, IT MAY NO T BE NECESSARY FOR THE TRIBUNAL TO GO INTO THE MERIT OF THE CASE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 1 ST JULY, 2016 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 3! /DATED, THE 1 ST JULY, 2016. KRI. + ).45 65%. /COPY TO: 1. '( /APPELLANT 2. )*'( /RESPONDENT 3. - 7. () /CIT(A)-15, CHENNAI-34 4. - 7. /CIT-6, CHENNAI-34 5. 5$8 ). /DR 6. 9# : /GF.