M/s. Victorious Christ Ministries Trust, CHENNAI V. ACIT, Erode

ITA 1153/CHNY/2012

• Counselvise Citation: 115321714 RSA 2012
• Duration Of Justice: 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 24-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANUPAMA SHUKLA
• Keywords: Difference of opinion; Reason to believe; Change of opinion
• Section: 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AN D SHRI S.S. GODARA, JUDICIAL MEMBER I.T.A. NO. 1051/MDS/2012 ASST. YEAR : 2006-07 THE DY. COMMISSIONER OF INCOME TAX, CIRCLE I, VIRUDHUNAGAR (APPELLANT) V. PANDYAN GRAMA BANK 2-70-1, COLLECTORATE COMPLEX VIRUDHUNAGAR PAN : AAAP0895P (RESPONDENT) APPELLANT BY : MS. ANUPAMA SHUKLA, CIT(D.R) RESPONDENT BY : SHRI SAROJ KUMAR PARIDA DATE OF HEARING : 26 JULY 2012 DATE OF PRONOUNCEMENT : 9 TH AUGUST 2012 O R D E R PER S.S. GODARA, JUDICIAL MEMBER : THIS REVENUES APPEAL ARISES FROM THE ORDER OF TH E CIT(APPEALS)-II DATED 29.2.2012 IN ITA NO.11/10-11 FOR ASST. YEAR 2 006-07 IN PROCEEDINGS UNDER SEC.143(3) READ WITH SEC.147 OF THE INCOME TAX ACT, IN SHORT 'THE ACT'. 2. IN SUPPORT OF THE GROUNDS RAISED, THE DEPARTMEN TAL REPRESENTATIVE HAS CONTENDED THAT CIT(APPEALS) HAS ERRED IN REVERS ING THE ASSESSING OFFICERS I.T.A. NO. 1051/MDS/12 2 FINDINGS QUA LEGALITY OF RE-OPENING AS WELL AS ON M ERITS. THE AUTHORISED REPRESENTATIVE ON THE OTHER HAND HAS STRONGLY SUPPO RTED THE CIT(APPEALS)S FINDINGS. SINCE BOTH PARTIES ARE AT VARIANCE IN TH EIR RESPECTIVE STANDS, WE FRAME THE FOLLOWING ISSUES FOR OUR ADJUDICATION :- I) WHETHER THE ORDER OF CIT(APPEALS) IN HOLDING THA T RE-OPENING AT THE HANDS OF ASSESSING OFFICER IS MERE CHANGE OF OP INION IS LIABLE TO BE UPHELD? II) WHETHER THE CIT(APPEALS) HAS RIGHTLY OVER-RULE D THE ASSESSING OFFICERS FINDINGS QUA MERITS IE. DEDUCTION UNDER SECTION 80P(2)(A)(I) IN RESPECT OF COMMISSION RECEIPTS FROM LIC? 3. BRIEF FACTS QUA BOTH ISSUES ARE THAT THE ASSESS EE (IN BANKING BUSINESS) HAD FILED ITS RETURN ADMITTING NIL I NCOME. CLAIMING ITSELF A CO- OPERATIVE SOCIETY, IT OPTED FOR DEDUCTIONS UNDER SE C.80P(2)(A)(I) AND TREATED THE ENTIRE INCOME AS DEDUCTION BY PLACING RELIANCE ON S EC.22 OF RRB ACT, 1976 R.W.S CBDT CIRCULAR NO.319 DATED 11.1.1982. THE ASSESSIN G OFFICER PASSED ASSESSMENT ORDER UNDER SEC.143(3) R.W.S. 147 ON 25.7.2008. 4. THEREAFTER, THE ASSESSING OFFICER CAME TO AN EX FACIE CONCLUSION THAT THE ASSESSEE HAD TREATED AN AMOUNT OF J37.35 LAKHS RECEIVED FROM LIC AS COMMISSION AND HAD RAISED CLAIM OF DEDUCTION UNDER SEC.80P(2)(A)(I) OF THE ACT WHICH WAS NOT ELIGIBLE FOR DEDUCTION NOT BEING A BU SINESS INCOME. THEREFORE, NOTICE UNDER SEC.148 WAS ISSUED ON 17.3.2010 TO THE ASSESSEE WHO CONTESTED THE GROUND OF RE-OPENING BY JUSTIFYING ITS CLAIM. THE ASSESSING OFFICER NEGATED THE I.T.A. NO. 1051/MDS/12 3 ASSESSEES EXPLANATION AND INCLUDED THE ABOVE AMOUN T IN ASSESSEES INCOME FROM OTHER SOURCES. 5. IN ASSESSEES APPEAL, THE CIT(APPEALS) HAS HELD THAT REOPENING IS MERE CHANGE OF OPINION WHICH IS NOT PERMISSIBLE EVE N WITHIN FOUR YEARS FROM THE END OF ASST. YEAR. 6. THE CIT(APPEALS) HAS FURTHER OBSERVED THAT WITH EFFECT FROM 01.4.2007, IN VIEW OF CBDT CIRCULAR NO.6/10 DATED 2 0.9.2010, THOUGH REGIONAL RURAL BANKS HAVE BEEN HELD AS CORPORATE BANKS, BUT IN VIEW OF THE FACT THE ASST. YEAR IN HAND IS 2006-07 (FROM 1.4.06 TO 31.3.07), A SSESSEES STATUS HAD TO BE TREATED AS TO BE THAT OF A CO-OPERATIVE SOCIETY AND NOT AS AOP ADOPTED BY ASSESSING OFFICER. 7. THEREFORE, THE REVENUE IS AGGRIEVED. 8. ON BEHALF OF REVENUE, THE DEPARTMENTAL REPRESEN TATIVE HAS VEHEMENTLY REITERATED THE VARIOUS SUBMISSIONS RAISE D IN GROUNDS AND PRAYED FOR RESTORING ASSESSING OFFICERS FINDINGS. 9. ON THE OTHER HAND, ASSESSEES REPRESENTATIVE ST RONGLY RELIED UPON THE ORDER OF CIT(APPEALS). 10. WE HAVE HEAD BOTH SIDES AT CONSIDERABLE LENGTH AND ALSO GONE THROUGH THE RELEVANT FINDINGS OF ASSESSING OFFICER AND CIT(APPEALS). IT SEEMS THAT THE RETURN FILED BY THE ASSESSEE WAS EARLIER PROC ESSED UNDER SEC.143(1) OF THE ACT. THEREAFTER, RE-OPENING WAS DONE ON AN ASSESSM ENT UNDER SEC.143(3) READ WITH SEC.147 OF THE ACT ON 25.7.2008. ONCE AGAIN, THE ASSESSING OFFICER ISSUED I.T.A. NO. 1051/MDS/12 4 ANOTHER NOTICE ON 17.3.2010 UNDER SEC.148 FOR RE-AS SESSMENT UNDER SEC.147. AS SUCH, THE SECOND RE-ASSESSMENT WAS COMPLETED ON 20. 4.2010. IT IS ALSO CLEAR FROM THE PAPER BOOK THAT RE-OPENING HAS BEEN TAKEN RECOURSE TO BY ASSESSING OFFICER FOR THE REASON THAT THE ASSESSEE HAD CLAIME D DEDUCTION UNDER SEC.80P(A)(I) OF THE ACT ON LIC COMMISSION RECEIVED FOR WHICH IN THE OPINION OF ASSESSING OFFICER, THE ASSESSEE WAS NOT ENTITLED FO R DEDUCTION. 11. BEFORE PROCEEDING FURTHER, WE DEEM IT APPROPRI ATE TO REPRODUCE RELEVANT STATUTORY PROVISION IE. SEC.147 OF THE INC OME TAX ACT, WHICH IS AS FOLLOWS: 147. IF THE [ASSESSING] OFFICER [HAS REASON TO BELIEVE] THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT 15 FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, A SSESS OR REASSESS 15 SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENT LY IN THE COURSE OF THE PROCEEDINGS 15 UNDER THIS SECTION, OR RECOMPUTE THE LOSS OR THE D EPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY B E, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SE CTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR) : PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSM ENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOU R YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEA BLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF TH E FAILURE 16 ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECT ION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS 16 NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR: I.T.A. NO. 1051/MDS/12 5 A PERUSAL OF THE RELEVANT STATUTORY PROVISION MAKES IT CLEAR THAT WHERE THE ASSESSING OFFICER HAS REASONS TO BELIEVE, HE IS SPE CIFICALLY EMPOWERED TO ISSUE NOTICE OF RE-OPENING UNDER SEC.148 OF THE ACT AND C ONSIDER THE CASE AGAIN BY OPTING FOR RE-ASSESSMENT. BUT AT THE SAME TIME, TH E PROVISION DOES NOT APPLY UNFETTERED. THE ASSESSING OFFICER, IN THIS REGARD MUST HAVE REASON TO BELIEVE . THE SAID REASONS HAVE TO BE IN THE LIGHT OF SOME MA TERIAL AVAILABLE ON RECORD LEADING TO ESCAPEMENT OF ASSESSEES INCOME FROM ASS ESSMENT. AFTER APPLYING THE BASIC FUNDAMENTALS OF THE RE-ASSESSMENT PROVISION V IS--VIS FACTS OF THE PRESENT CASES, WE NOTICE FROM CIT(APPEALS)S ORDER THAT IN ASSESSMENT DATED 25.7.2008, THE ASSESSING OFFICER HAD DULY CONSIDERED THE ISSUE OF DEDUCTION UNDER SEC.80P(2)(A)(I) AND ACCEPTED ASSESSEES CLAIM RAIS ED. THE REVENUE HAS NOT BEEN ABLE TO SUPPORT ASSESSING OFFICERS GROUND THAT THE ASSESSEES INCOME HAD ESCAPED ASSESSMENT. THEREFORE, IN THE LIGHT OF THIS BACK D ROP OF FACTS, WE ARE CONSTRAINED TO OBSERVE THAT REOPENING IN HAND IS MERE CHANGE OF OPINION WHICH IS NOT PERMISSIBLE IN THE EYES OF LAW AS HELD IN THE CASE OF CIT V. KELVINATOR INDIA LTD. (320 ITR 561). HENCE, THE ISSUE IS DECIDED IN ASSE SSEES FAVOUR. 12. SINCE ON LEGALITY OF RE-OPENING WE HAVE ALREA DY UPHELD CIT(APPEALS)S ORDER, IN OUR OPINION, THE MERITS OF THE CASE ARE ONLY OF ACADEMIC SIGNIFICANCE, AS SUCH, ARE NOT BEING ADJUDICATED UP ON AS HAVING BECOME INFRUCTUOUS. CONSEQUENTLY, WE UPHOLD CIT(APPEALS) S ORDER. I.T.A. NO. 1051/MDS/12 6 13. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. 14. THE ORDER IS PRONOUNCED ON THURSDAY, THE 9TH DAY OF AUGUST 2012 AT CHENNAI. SD/- SD/- (ABRAHAM P. GEORGE) (S.S. GODARA ) ACCOUNTAT MEMBER JUDICIAL MEMBER CHENNAI, DATED : 9 TH AUGUST 2012 JLS. COPY TO:- (1) APPELLANT (2) RESPONDENT (3) CIT(A)-II, COIMBATORE (4) CIT-III, COIMBATORE (5) D.R. (6) GUARD FILE