A.Ravindran, Villupuram V. ACIT, Villupuram

ITA 1150/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96409 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-10-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 15-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: R VENKATRAMAN ITP
• Section: 143(3); 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1150/MDS/2015 ' (' / ASSESSMENT YEAR : 2006-07 SHRI A. RAVINDRAN, NO.45, BAZAAR STREET, CHINNASALEM 606 201. PAN : AAFPR 2006 L V. THE ASSISTANT COMMISSIONER OF INCOME TAX, VILLUPURAM RANGE, VILLUPURAM. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI R. VENKATRAMAN, ITP ,-*+ . / / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT 0 . 1$ / DATE OF HEARING : 29.10.2015 2!( . 1$ / DATE OF PRONOUNCEMENT : 27.11.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERR Y, DATED 12.03.2015 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. SHRI R. VENKATRAMAN, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSING OFFICER REOP ENED THE 2 I.T.A. NO.1150/MDS/15 ASSESSMENT BEYOND THE PERIOD OF FOUR YEARS EVEN THO UGH THERE WAS NO NEGLIGENCE ON THE PART OF THE ASSESSEE IN FURNIS HING THE PARTICULARS FOR COMPLETING THE ASSESSMENT. ACCORDI NG TO THE LD. REPRESENTATIVE, THE ASSESSEE FILED THE RETURN OF IN COME FOR THE ASSESSMENT YEAR 2006-07 ON 31.03.2006 ADMITTING A T OTAL INCOME OF ` 3,94,460/- AND AGRICULTURAL INCOME OF ` 75,000/-. THE ASSESSMENT ORDER WAS PASSED UNDER SECTION 143(3) OF THE INCOME -TAX ACT, 1961 (IN SHORT 'THE ACT') ON 23.10.2009 DETERMINING THE TOTAL INCOME AT ` 4,52,236/- AND AGRICULTURAL INCOME AT ` 75,000/-. SUBSEQUENTLY, THE ASSESSING OFFICER BY A NOTICE UNDER SECTION 148 OF THE ACT DATED 28.03.2013 REOPENED THE ASSESSMENT ON THE GROUND TH AT THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE TO THE EXTEN T OF ` 96,75,000/- AND THE CASH CREDIT OF ` 6,50,000/- WERE NOT OFFERED TO TAXATION. ACCORDING TO THE LD. REPRESENTATIVE, A C OPY OF THE NOTICE ISSUED BY THE ASSESSING OFFICER IS AVAILABLE AT PAG E 7 OF THE PAPER- BOOK. THE ASSESSING OFFICER CALLED FOR DETAILS DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS BY WAY OF A QUESTIONNAIRE, A COPY OF WHICH IS AVAILABLE AT PAGE 8 OF THE PAPER-BOOK. VIDE QUE STION NO.11, THE ASSESSING OFFICER CALLED FOR THE DETAILS WITH REGAR D TO ` 6,50,000/-, WHICH WAS INTRODUCED AS CAPITAL AND THE SOURCE THER EIN AND VIDE QUESTION NO.14, THE ASSESSING OFFICER CALLED FOR DE TAILS WITH REGARD 3 I.T.A. NO.1150/MDS/15 TO ` 96,75,000/-, WHICH WAS RECEIVED AS ADVANCE FOR SALE OF LAND AT CHINNASALEM. 3. REFERRING TO PAPER-BOOK, MORE PARTICULARLY PAGE 14, THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THIS IS A COPY OF REPLY GIVEN BY THE ASSESSEE ON 21.10.2009 IN RESPONSE TO THE QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER. A C OPY OF THE AGREEMENT FOR SALE OF PROPERTY IS AVAILABLE AT PAGE 15 OF THE PAPER- BOOK. WITH REGARD TO ` 6,50,000/-, THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT IT IS NOT A FRESH CAPITA L INTRODUCED. IT IS ONLY A CONTRA OF BUSINESS ACCOUNTS IN THE PREVIOUS BOOKS OF ACCOUNT. WITH REGARD TO ADVANCE OF ` 96,75,000/-, THE LD. REPRESENTATIVE SUBMITTED THAT THE ASSESSEE EXPLAINE D IN A LETTER DATED 21.10.2009 THAT IT IS AN ADVANCE RECEIVED FOR SALE OF LAND AT CHINNASALEM, WHICH WAS SHOWN IN THE BALANCE SHEET A S LAND ACCOUNT 4.64 ACRES, FOR WHICH A COPY OF THE ADVANCE RECEIPT WAS ALSO FILED BEFORE THE ASSESSING OFFICER. HENCE THE CREDIT OF ` 6,50,000/- AND THE ADVANCE RECEIPT OF ` 96,75,000/- WERE EXPLAINED BEFORE THE ASSESSING OFFICER IN THE COURSE OF ASSES SMENT PROCEEDINGS BY WAY OF LETTER DATED 21.10.2009. THE REFORE, ACCORDING TO THE LD. REPRESENTATIVE, THERE WAS NO N EGLIGENCE ON THE 4 I.T.A. NO.1150/MDS/15 PART OF THE ASSESSEE IN FURNISHING THE DETAILS BEFO RE THE ASSESSING OFFICER. SINCE THERE WAS NO NEGLIGENCE, ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSMENT CANNOT BE REOPENED A FTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. 4. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT ADMITTEDLY THE ASSES SMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 23.10. 2009. SUBSEQUENTLY, IT HAD COME TO THE NOTICE OF THE ASSE SSING OFFICER THAT THE ASSESSEE RECEIVED A SUM OF ` 96,75,000/- ON SALE OF THE LAND AND THERE WAS ALSO CASH CREDIT TO THE EXTENT O F ` 6,50,000/- IN THE CAPITAL ACCOUNT. THEREFORE, THE ASSESSING OFFI CER REOPENED THE ASSESSMENT BY ISSUING A NOTICE UNDER SECTION 148 OF THE ACT ON 28.03.2013. ACCORDING TO THE LD. D.R., THE REPLY G IVEN BY THE ASSESSEE IS VERY VAGUE. REFERRING TO THE ORDER OF THE CIT(APPEALS), THE LD. D.R. POINTED OUT THAT THE ASSESSEE HAS ALSO GIVEN A REPLY ON 15.10.2009 IN WHICH THE ASSESSEE HAD NOT PROPERLY E XPLAINED THE DETAILS CALLED FOR. THE BALANCE SHEET AS ON 31.03. 2006 OF PROPRIETARY CONCERN OF M/S PASUMARK TOBACCO COMPANY DID NOT CONTAIN ANY ADDITION OF ` 96,75,000/- AS AN ADVANCE FROM SALE OF LAND. THE CIT(APPEALS) HAS ALSO CALLED FOR BOOKS O F ACCOUNT. THE 5 I.T.A. NO.1150/MDS/15 BALANCE SHEET AND THE PERSONAL CAPITAL ACCOUNT AS O N 31.03.2006 SUBMITTED BY THE ASSESSEE BEFORE THE DEPARTMENT WAS A QUESTIONABLE ONE. THEREFORE, THE CIT(APPEALS) HAS COME TO A CONCLUSION THAT THERE WAS NEGLIGENCE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS FOR COMPLETING THE ASSESSMENT. THEREFORE, THE CIT(APPEALS) HAS RIGHTL Y CONFIRMED THE REOPENING OF THE ASSESSMENT. ON A QUERY FROM THE B ENCH WHETHER A COPY OF THE LETTER WRITTEN BY THE ASSESSEE ON 21. 10.2009, WHICH IS AVAILABLE AT PAGE 14 OF THE PAPER-BOOK, WAS FILED B Y THE ASSESSEE, THE LD. D.R. AFTER VERIFYING THE RECORDS OF THE DEP ARTMENT, CLARIFIED THAT THE COPY OF THE LETTER DATED 21.10.2009 IS VER Y MUCH AVAILABLE ON THE RECORD OF THE DEPARTMENT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ORIGINAL ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMP LETED BY AN ORDER UNDER SECTION 143(3) OF THE ACT ON 23.10.2009 . THE ASSESSMENT YEAR UNDER CONSIDERATION IS 2006-07. TH E FOUR YEARS PERIOD EXPIRED ON 31.03.2010. ADMITTEDLY, THE NOTI CE FOR REOPENING THE ASSESSMENT UNDER SECTION 148 WAS ISSUED ON 28.0 3.2013 WHICH IS BEYOND THE PERIOD OF FOUR YEARS. 6 I.T.A. NO.1150/MDS/15 6. WE HAVE CAREFULLY GONE THROUGH THE PROVISIONS OF SECTION 147 OF THE ACT. THE PROVISO TO SECTION 147 CLEARLY SAYS THAT THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE AC T CAN BE REOPENED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR PROVIDED THERE WAS NEGLIGENCE ON TH E PART OF THE ASSESSEE IN FURNISHING NECESSARY PARTICULARS FOR CO MPLETING THE ASSESSMENT. IN THIS CASE, ADMITTEDLY, THE ASSESSME NT WAS REOPENED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE, TH E ASSESSMENT CAN BE REOPENED ONLY WHEN THERE WAS NEGLIGENCE ON T HE PART OF THE ASSESSEE IN FURNISHING NECESSARY DETAILS FOR COMPLE TING THE ASSESSMENT. NOW LETS EXAMINE WHETHER THERE WAS AN Y NEGLIGENCE ON THE PART OF THE ASSESSEE IN FURNISHING PARTICULA RS FOR COMPLETING THE ASSESSMENT. THE DETAILED QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER TO THE ASSESSEE, A COPY OF WHICH IS AVAILABLE AT PAGE 8 OF THE PAPER-BOOK, SHOWS THAT THE ASSESSING OFFICER CALLED FOR DETAILS WITH REGARD TO CAPITAL INTRODUCED TO TH E EXTENT OF ` 6,50,000/- AND THE ADVANCE RECEIPT TO THE EXTENT OF ` 96,75,000/- FOR SALE OF THE LAND. THE ASSESSEE FILED REPLY ON 15.1 0.2009 AS WELL AS ON 21.10.2009. THE CIT(APPEALS), BY REFERRING TO TH E LETTER OF THE 7 I.T.A. NO.1150/MDS/15 ASSESSEE DATED 15.10.2009, OBSERVED THAT THE REPLY GIVEN BY THE ASSESSEE IS VERY VAGUE, THEREFORE, THERE WAS NEGLIG ENCE ON THE PART OF THE ASSESSEE IN FURNISHING THE REQUIRED PARTICUL ARS. THE CIT(APPEALS) HAS NOT COMMENTED ON THE REPLY GIVEN B Y THE ASSESSEE ON 21.10.12009. THE LD. D.R. CLARIFIED TH AT THE ASSESSEE HAS ALSO FILED LETTER DATED 21.10.2009 AND A COPY O F THE LETTER IS AVAILABLE ON THE FILES OF THE DEPARTMENT. THE ASSE SSMENT PROCEEDING WAS COMPLETED ORIGINALLY ON 23.10.2009. THE ASSESSEE FILED THE LETTER ON 21.10.2009. THEREFORE, IT IS O BVIOUS THAT THE DETAILS WITH REGARD TO ADVANCE RECEIPT OF ` 96,75,000/- AND THE CAPITAL TO THE EXTENT OF ` 6,50,000/- WERE VERY MUCH AVAILABLE ON THE FILE OF THE ASSESSING OFFICER. IN OTHER WORDS, THE ASSESSEE HAS FURNISHED THE DETAILS WITH REGARD TO THE CAPITAL SA ID TO BE INTRODUCED BY THE ASSESSEE TO THE EXTENT OF ` 6,50,000/- AND THE RECEIPT OF ` 96,75,000/- AS ADVANCE FOR SALE OF LAND AT CHINNASA LEM. THE ASSESSEE HAS ALSO FILED A COPY OF THE AGREEMENT DAT ED 01.03.2006 BEFORE THE ASSESSING OFFICER. IN THOSE FACTUAL SIT UATION, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS FILED ALL THE DETAILS BEFORE THE ASSESSING OFFICER BEFORE COMPLET ING THE ASSESSMENT. IT IS UNFORTUNATE THAT THE CIT(APPEALS ) HAS NOT CONSIDERED THE LETTER OF THE ASSESSEE DATED 21.10.2 009, WHICH WAS 8 I.T.A. NO.1150/MDS/15 FILED BEFORE THE ASSESSING OFFICER. THE LETTER DAT ED 21.10.2009 IS VERY CLEAR AND THE ASSESSEE HAS EXPLAINED BEFORE TH E ASSESSING OFFICER WITH REGARD TO SO-CALLED CAPITAL OF ` 6,50,000/- AND RECEIPT OF ` 96,75,000/-. IN THOSE FACTUAL SITUATION, THIS TRIB UNAL IS OF THE CONSIDERED OPINION THAT THERE WAS NO NEGLIGENCE ON THE PART OF THE ASSESSEE IN FURNISHING THE REQUIRED DETAILS FOR COM PLETING THE ASSESSMENT. SINCE THERE WAS NO NEGLIGENCE ON THE P ART OF THE ASSESSEE, THIS TRIBUNAL IS OF THE CONSIDERED OPINIO N THAT REOPENING OF THE ASSESSMENT BEYOND FOUR YEARS PERIOD FROM THE END OF THE RELEVANT ASSESSMENT YEAR IS NOT JUSTIFIED. ACCORDI NGLY, WE ARE UNABLE TO UPHOLD THE ORDERS OF THE LOWER AUTHORITIE S. THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE REASSES SMENT IS QUASHED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 27 TH NOVEMBER, 2015 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 27 TH NOVEMBER, 2015. 9 I.T.A. NO.1150/MDS/15 KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A), PUDUCHERRY 4. 0 81 /CIT, PUDUCHERRY 5. 69 ,1 /DR 6. :' ; /GF.