Srenik Singhvi, Kolkata V. ACIT, Circle - 54, Kolkata, Kolkata

ITA 1203/KOL/2011

• Counselvise Citation: 120323514 RSA 2011
• Duration Of Justice: 4 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 1998-1999
• Appeal Filed On: 19-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDIPTA GUHA
• Assessee Lawyers: J P KHAITAN
• Keywords: Reopening of assessment; Difference of opinion; Validity of assessment; Change of opinion
• Section: 143(3); 147

Judgement Text

I.T.A. NOS. 1203, 1204, 1205 & 1206/KOL./2011 ASSESSMENT YEARS: 1998-99, 2000-01 TO 2002-2003 PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NOS. 1203, 1204, 1205 & 1206/KOL/ 2011 ASSESSMENT YEARS : 1998-1999, 2000-2001, 2001-2002, 2002-2003 SRENIK SINGHVI,.................................... ...................................,....APPELLANT 7C, KIRAN SHANKAR RAY ROAD, KOLKATA-700 001 [PAN : AHBPS 0517 N] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,.............. .....................RESPONDENT CIRCLE-54, KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA-700 001 APPEARANCES BY: SHRI J.P. KHAITAN, SR. ADVOCATE , FOR THE ASSESSEE SHRI SUDIPTA GUHA, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : NOVEMBER 03, 2015 DATE OF PRONOUNCING THE ORDER : NOVEMBER 06, 2015 O R D E R PER SHRI P.M. JAGTAP :- THESE FOUR APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST A COMMON ORDER OF LD. COMMISSIONER OF INCOME TAX (APP EALS)-XXXVI, KOLKATA DATED 01.06.2011 PASSED FOR THE ASSESSMENT YEARS 1998-99, 2000-01, 2001-02 & 2002-03. 2. AT THE OUTSET, IT IS NOTED THAT THERE IS A DELAY OF 34 DAYS ON THE PART OF THE ASSESSEE IN FILING THESE APPEALS BEFORE THE TRIBUNAL. IN THIS REGARD, AN APPLICATION IS FILED BY THE ASSESSEE SEEKING CON DONATION OF THE DELAY I.T.A. NOS. 1203, 1204, 1205 & 1206/KOL./2011 ASSESSMENT YEARS: 1998-99, 2000-01 TO 2002-2003 PAGE 2 OF 7 AND KEEPING IN VIEW THE REASONS GIVEN THEREIN, WHIC H ARE DULY SUPPORTED BY AN AFFIDAVIT FILED BY THE ASSESSEE, WE ARE SATIS FIED THAT THERE IS A SUFFICIENT CAUSE FOR THE DELAY IN FILING THESE APPE ALS BEFORE THE TRIBUNAL BY THE ASSESSEE. WE, THEREFORE, CONDONE THE SAID DE LAY AND PROCEED TO DISPOSE OF THESE APPEALS OF THE ASSESSEE ON MERIT. 3. FIRST WE TAKE UP THE APPEAL OF THE ASSESSEE FOR A.Y. 1998-99 BEING ITA NO. 1203/KOL/2011 . 4. GROUNDS NO. 1 & 2 OF THIS APPEAL INVOLVE A PRELI MINARY ISSUE RELATING TO THE VALIDITY OF ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT. 5. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE LEGAL PROFESSION. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, I.E. A.Y. 1998-99 WAS FILED BY HIM O N 16.10.1998 DECLARING TOTAL INCOME OF RS.6,80,660/-. IN THE ASSESSMENT OR IGINALLY COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 26.03.2001 , THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICE R AT RS.7,12,400/-. THE SAID ASSESSMENT WAS SUBSEQUENTLY REOPENED BY TH E ASSESSING OFFICER AFTER RECORDING THE REASONS AND IN THE ASSESSMENT C OMPLETED UNDER SECTION 143(3) READ WITH SECTION 147, ADDITION OF R S.5,52,954/- WAS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF PROFESSIONAL RECEIPTS ALLEGEDLY SUPPRESSED BY THE A SSESSEE. 6. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3) READ WITH SECTION 147, AN APPEAL WAS PREFERR ED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) CHALLENGING THE VALIDIT Y OF THE SAID ASSESSMENT AS WELL AS DISPUTING THE ADDITION MADE B Y THE ASSESSING OFFICER THEREIN ON ACCOUNT OF PROFESSIONAL RECEIPTS ALLEGEDLY SUPPRESSED. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSES SEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEALS) DID NOT FIND MERIT IN THE PRELIMINARY ISSUE RAISED BY THE ASSESSEE CHALLE NGING THE VALIDITY OF I.T.A. NOS. 1203, 1204, 1205 & 1206/KOL./2011 ASSESSMENT YEARS: 1998-99, 2000-01 TO 2002-2003 PAGE 3 OF 7 THE ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 143(3) READ WITH SECTION 147 AND REJECTING THE SAME, HE UPHELD THE VALIDITY OF THE SAID ASSESSMENT. HE, HOWEVER, FOUND MERIT IN THE STAND O F THE ASSESSEE THAT THE ALLEGED SUPPRESSED PROFESSIONAL RECEIPTS HAVING BEEN DECLARED AS INCOME IN THE RELEVANT SUBSEQUENT YEARS WHEN THE CO RRESPONDING SERVICES WERE RENDERED, THE ADDITION MADE BY THE ASSESSING O FFICER OF THE SAME RECEIPTS IN THE YEAR UNDER CONSIDERATION, I.E. A.Y. 1998-99 WAS NOT SUSTAINABLE. ACCORDINGLY, HE DELETED THE SAID ADDIT ION MADE BY THE ASSESSING OFFICER. STILL AGGRIEVED BY THE ORDER OF LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBU NAL. 7. AS REGARDS THE PRELIMINARY ISSUE RAISED IN GROUN DS NO. 1 & 2 RELATING TO THE VALIDITY OF THE ASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 143(3) READ WITH SECTION 147, LD. COU NSEL FOR THE ASSESSEE RAISED TWO-FOLD CONTENTIONS. FIRSTLY, HE CONTENDED THAT THE REASONS GIVEN BY THE ASSESSING OFFICER FOR REOPENING OF THE ASSES SMENT BEING THE EXCESS CREDIT OF TAX GIVEN TO THE ASSESSEE CANNOT BE REGAR DED AS THE CASE OF ESCAPEMENT OF INCOME AND, THEREFORE, THE REOPENING ITSELF WAS BAD IN LAW. SECONDLY, HE CONTENDED THAT THE ORIGINAL ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WAS COMPLETED BY THE ASSESSING OFFICE R UNDER SECTION 143(3) AFTER VERIFYING ALL THE RELEVANT RECORDS INC LUDING THE BOOKS OF ACCOUNT OF THE ASSESSEE AS WELL THE TDS CERTIFICATE S FILED ALONG WITH THE RETURN AND IN THE ABSENCE OF ANY NEW INFORMATION OR MATERIAL COMING TO THE POSSESSION OF THE ASSESSING OFFICER, THE REOPEN ING OF ASSESSMENT ON THE BASIS OF THE SAME RECORD WAS BASED ON A MERE CH ANGE OF OPINION, WHICH IS NOT PERMISSIBLE IN LAW. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF KELVINATOR INDIA LIMITED REPORTED IN 320 ITR 561 AS WELL AS TH E DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF MAN MOHA N KEDIA VS.- ITO REPORTED IN 344 ITR 187 (CAL.). 8. LD. D.R., ON THE OTHER HAND, STRONGLY RELIED ON THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) IN SUPPORT OF THE REVENUES CASE ON THIS ISSUE AND I.T.A. NOS. 1203, 1204, 1205 & 1206/KOL./2011 ASSESSMENT YEARS: 1998-99, 2000-01 TO 2002-2003 PAGE 4 OF 7 CONTENDED THAT THE ASSESSMENT HAVING BEEN REOPENED BY THE ASSESSING OFFICER FOR THE REASON OF ASSESSEES FAILURE TO DIS CLOSE TRULY AND FULLY HIS PROFESSIONAL RECEIPTS, THE REOPENING WAS IN ACCORDA NCE WITH LAW. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN ORDER TO APPRECIATE THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE ON T HE PRELIMINARY ISSUE RAISED IN THIS APPEAL CHALLENGING THE VALIDITY OF R EOPENING OF ASSESSMENT, IT IS RELEVANT TO REFER TO THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING, WHICH ARE EXTRACTED BELOW:- NOW, ON VERIFICATION OF RECORD AND THE TDS CERTIFICATES FILED WITH THE RETURN, IT IS SEEN THAT THE TOTAL AMOUNT OF ASSESSEES PROFESSIONAL RECEIPTS AMOUNTS TO RS.21,29,396.00 (GROSS) INSTEAD OF RS.17,13,602.06 (GROSS) SHOWN BY THE ASSESSEE. THEREFORE, THERE IS A DIFFER ENCE OF RS.4,15,794.06 BETWEEN THE ACTUAL AMOUNT OF RECEIPT S AND THE AMOUNT OF RECEIPTS SHOWN BY THE ASSESSEE. THE A SSESSEE HAS NOT SHOWN ANY PROFIT OUT OF THIS AMOUNT OF RS.4,15,794.06 AND SINCE THE ASSESSEE HAS ALREADY C LAIMED ALL HIS EXPENSES TOWARDS HIS PROFESSION THE ENTIRE AMOUNT OF RS.4,15,794.00 REPRESENTS INCOME FOR THE RELEVAN T ASSESSMENT YEAR. THE ASSESSEE HAS, THEREFORE, UNDER STATED HIS INCOME FROM PROFESSION TO THE TUNE OF RS.4,15,7 94.00 BY WAY OF SUPPRESSION OF HIS RECEIPTS. I, HAVE, THEREFORE, REASON TO BELIEF THAT AN AMOUN T OF RS.4,15,794.00 ESCAPED ASSESSMENT WITHIN THE MEANIN G OF SECTION 147 OF THE INCOME TAX ACT, 1961. A PERUSAL OF THE AFORESAID REASONS RECORDED BY THE ASSESSING OFFICER MAKES IT ABUNDANTLY CLEAR THAT THE REASON FOR REOPE NING THE ASSESSMENT AS GIVEN BY THE ASSESSING OFFICER WAS THAT THE PROF ESSIONAL RECEIPTS WERE UNDERSTATED BY THE ASSESSING OFFICER AND NOT THAT A NY EXTRA CREDIT FOR TAX WAS ALLOWED TO THE ASSESSEE AS SOUGHT TO BE CONTEND ED BY THE LD. COUNSEL FOR THE ASSESSEE. WE, THEREFORE, FIND NO MERIT IN T HE FIRST CONTENTION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE ON THIS ISSUE. 10. AS REGARDS THE OTHER CONTENTION RAISED BY THE L D. COUNSEL FOR THE ASSEESSEE THAT THE REOPENING IS BASED ON A MERE CHA NGE OF OPINION, IT IS I.T.A. NOS. 1203, 1204, 1205 & 1206/KOL./2011 ASSESSMENT YEARS: 1998-99, 2000-01 TO 2002-2003 PAGE 5 OF 7 MANIFEST FROM THE REASONS RECORDED BY THE ASSESSING OFFICER THAT THERE WAS NO NEW MATERIAL OR INFORMATION THAT HAD COME TO THE ASSESSING OFFICER AFTER COMPLETING THE ASSESSMENT ORIGINALLY UNDER SECTION 143(3), ON THE BASIS OF WHICH THE ASSESSMENT WAS REOPENED. AS DEMONSTRATED BY THE LD. COUNSEL FOR THE ASSESSEE, THE RELEVANT DETA ILS AND DOCUMENTS WERE VERIFIED BY THE ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) INCLUDING THE RELE VANT TDS CERTIFICATES, BALANCE-SHEETS SHOWING THE RECEIPT OF ADVANCES, ETC . AND IN THE ABSENCE OF ANY NEW INFORMATION OR MATERIAL COMING TO THE POSSE SSION OF THE ASSESSING OFFICER, THE REOPENING BY HIM OF THE ASSE SSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3) ON THE BASIS OF THE SAME SET OF FACTS AND THE SAME RECORDS WAS PURELY BASED ON MERE CHANGE OF OPINION, WHICH IS NOT PERMISSIBLE IN LAW AS HELD, INTER ALIA , BY THE HONBLE SUPREME COURT IN THE CASE OF KELVINATOR INDIA LIMITED (SUPRA). WE, T HEREFORE, FIND MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE AND HOLD THAT THE REOPENING BASED MERELY ON A CHANGE OF OPINION ITSEL F BEING BAD IN LAW, THE ASSESSMENT MADE BY THE ASSESSING OFFICER IN PUR SUANCE THEREOF UNDER SECTION 143(3) READ WITH SECTION 147 FOR THE YEAR U NDER CONSIDERATION, I.E. A.Y. 1998-99 IS INVALID. THE SAME, THEREFORE, IS CANCELLED AND THIS APPEAL OF THE ASSESSEE IS ALLOWED. 11. AS REGARDS THE REMAINING THREE APPEALS OF THE A SSESSEE FOR A.YS. 2000-01, 2001-02 AND 2002-03, IT IS OBSERVED THAT T HE COMMON ISSUE INVOLVED IN GROUNDS NO. 1 & 2 THEREOF CHALLENGING T HE VALIDITY OF THE REOPENING OF ASSESSMENT IS SIMILAR TO THE ONE RAISE D BY THE ASSESSEE IN A.Y. 1998-99 EXCEPT THAT THERE WAS NO ASSESSMENT UN DER SECTION 143(3) FOR ANY OF THESE THREE YEARS AND THE RETURNS FILED BY THE ASSESSEE WERE PROCESSED UNDER SECTION 143(1). THE CONTENTION RAIS ED BY THE LD. COUNSEL FOR THE ASSESSEE IN A.Y. 1998-99 AND ACCEPTED BY US THAT THE REOPENING WAS BASED ON A MERE CHANGE OF OPINION, THUS IS NOT APPLICABLE IN ALL THESE THREE YEARS. I.T.A. NOS. 1203, 1204, 1205 & 1206/KOL./2011 ASSESSMENT YEARS: 1998-99, 2000-01 TO 2002-2003 PAGE 6 OF 7 12. AS REGARDS THE OTHER CONTENTION RAISED BY THE L D. COUNSEL FOR THE ASSESSEE THAT THE EXCESS CREDIT FOR TAX ALLOWED TO THE ASSESSEE CANNOT BE REGARDED AS ESCAPEMENT OF INCOME FOR VALIDLY REOPEN ING ASSESSMENT, WE HAVE ALREADY HELD, WHILE DISPOSING OF THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 1998-99, ON PERUSAL OF THE REASONS RECORDED BY THE ASSESSING OFFICER, WHICH ARE IDENTICAL FOR ALL THE FOUR YEARS UNDER CONSIDERATION, THAT THE ASSESSMENTS WERE NOT REOPEN ED BY THE ASSESSING OFFICER FOR EXCESS CREDIT OF TAX ALLOWED TO THE ASS ESSEE, BUT THE SAME HAVING BEEN REOPENED FOR THE REASON THAT THE PROFES SIONAL RECEIPTS WERE NOT FULLY DISCLOSED BY THE ASSESSEE, THERE WAS A CA SE OF ESCAPEMENT OF INCOME WHICH JUSTIFIED THE REOPENING OF ASSESSMENT BY THE ASSESSING OFFICER. WE, THEREFORE, FIND NO MERIT IN THE PRELIM INARY ISSUE RAISED BY THE ASSESSEE IN HIS APPEALS FOR A.YS. 2000-01, 2001-02 & 2002-03 AND DISMISS THE RELEVANT GROUNDS NO. 1 & 2 OF THE APPEALS OF TH E ASSESSEE FOR THE SAID YEARS. 13. AS REGARDS THE COMMON ISSUE INVOLVED IN GROUND NO. 3 OF THE APPEALS OF THE ASSESSEE FOR A.YS. 2000-01, 2001-02 & 2002-03 RELATING TO THE ASSESSEES CLAIM FOR CREDIT ON ACCOUNT OF TAX D EDUCTED AT SOURCE, LD. COUNSEL FOR THE ASSESSEE HAS SOUGHT A LIMITED RELIE F BY CONTENDING THAT THE CORRESPONDING PROFESSIONAL INCOME HAVING BEEN O FFERED BY THE ASSESSEE IN THE RELEVANT YEARS, WHEN THE SERVICES W ERE ACTUALLY RENDERED AND THE SAME HAVING REACHED ITS FINALITY AS A RESUL T OF THE DECISION RENDERED BY THE LD. CIT(APPEALS) VIDE HIS IMPUGNED ORDER, THE CREDIT FOR TAX DEDUCTED AT SOURCE FROM THE SAID INCOME SHOULD BE GRANTED IN THE SAID YEARS. AFTER HAVING CONSIDERED THE SUBMISSIONS OF B OTH THE SIDES, WE ARE OF THE VIEW THAT THIS LIMITED RELIEF SOUGHT BY THE LD. COUNSEL FOR THE ASSESSEE IS IN ACCORDANCE WITH THE RELEVANT PROVISI ONS OF THE LAW AND THE SAME, THEREFORE, HAS TO BE ALLOWED. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO VERIFY THE AMOUNT OF TDS RELATING TO THE INCOME FROM LEGAL PROFESSION FINALLY ASSESSED IN THE HANDS OF THE ASS ESSEE FOR THE YEARS UNDER CONSIDERATION, I.E. A.YS. 2000-01, 2001-02 & 2002-03 AND GRANT CREDIT TO THE ASSESSEE FOR THE SAID YEARS AFTER DUE VERIFICATION. GROUND NO. I.T.A. NOS. 1203, 1204, 1205 & 1206/KOL./2011 ASSESSMENT YEARS: 1998-99, 2000-01 TO 2002-2003 PAGE 7 OF 7 3 OF THE ASSESSEES APPEALS FOR A.YS. 2000-01, 2001 -02 & 2002-03 IS ACCORDINGLY ALLOWED. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR A SSESSMENT YEAR 1998-99 IS ALLOWED, WHILE THE APPEALS OF THE ASSESS EE FOR A.YS. 2000- 01, 2001-02 & 2002-03 ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 6 TH , 2015. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 6 TH DAY OF NOVEMBER, 2015 COPIES TO : (1) SRENIK SINGHVI, 7C, KIRAN SHANKAR RAY ROAD, KOLKATA-700 001 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-54, KOLKATA, 3, GOVERNMENT PLACE (WEST), KOLKATA-700 001 (3) COMMISSIONER OF INCOME-TAX (APPEALS)- XXXVI, KOLKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.