Tamilnadu Urban Finance & Infrastructure Development Corporation, CHENNAI V. ACIT, CHENNAI

ITA 1315/CHNY/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3956 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-07-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 29-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN C BHARAT
• Assessee Lawyers: G BASKAR
• Keywords: Reopening of assessment
• Section: 143(3); 147

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NOS.1315 & 1316/MDS/2015 & '& / ASSESSMENT YEARS : 2006-07 & 2007-08 M/S TAMILNADU URBAN FINANCE & INFRASTRUCTURE DEVELOPMENT CORPORATION LTD., 490/1-2, ANNA SALAI, NANDANAM, CHENNAI - 600 035. PAN : AAACT 1259 R V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 3, CHENNAI. ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SHRI G. BASKAR, ADVOCATE +,)* - . / RESPONDENT BY : SHRI ARUN C. BHARAT, CIT / - 0' / DATE OF HEARING : 12.07.2017 12' - 0' / DATE OF PRONOUNCEMENT : 27.07.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AGA INST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-11, CHENNAI, DATED 26.02.2015 AND PERTAIN TO ASSESSMENT YEARS 2006- 07 AND 2007-08. WE HEARD BOTH THE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2 I.T.A. NOS.1315 & 1316/MDS/15 2. LETS FIRST TAKE THE ASSESSEES APPEAL FOR ASSES SMENT YEAR 2006-07 IN I.T.A. NO.1315/MDS/2015. 3. SHRI G. BASKAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSING OFFICER REOPENED THE ASSESSMENT FOR MAKING DISALLOWANCE UNDER SECTION 36(1)(VII) OF THE INCOME -TAX ACT, 1961 (IN SHORT 'THE ACT') ON THE BASIS OF MATERIAL ALREA DY AVAILABLE ON RECORD, AFTER EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR. REFERRING TO THE ORIGINAL ASSESSM ENT ORDER, THE LD.COUNSEL SUBMITTED THAT THE ASSESSEE HAS FURNISHE D ALL THE INFORMATION RELATING TO RESERVE MADE UNDER SECTION 36(1)(VIII) OF THE ACT AND THE CLAIM WAS MADE BY THE ASSESSEE UNDER SE CTION 36(1)(VIII) OF THE ACT. ACCORDING TO THE LD. COUNS EL, THE ASSESSING OFFICER AFTER CONSIDERING THE ENTIRE CLAIM, ALLOWED THE DEDUCTION UNDER SECTION 36(1)(VIII) OF THE ACT. THE LD.COUNS EL FURTHER SUBMITTED THAT THE ASSESSING OFFICER CANNOT REOPEN THE ASSESSMENT UNLESS THERE WAS NEGLIGENCE ON THE PART OF THE ASSE SSEE IN FURNISHING THE MATERIAL REQUIRED FOR COMPUTING THE ASSESSMENT. IN THIS CASE, ACCORDING TO THE LD. COUNSEL, THERE IS N OT EVEN WHISPER THAT THE ASSESSEE FAILED TO FURNISH ANY INFORMATION . MOREOVER, ON THE BASIS OF THE MATERIAL FILED BY THE ASSESSEE AT THE TIME OF ORIGINAL 3 I.T.A. NOS.1315 & 1316/MDS/15 ASSESSMENT, THE ASSESSING OFFICER REOPENED THE ASSE SSMENT. AT THE BEST, ACCORDING TO THE LD. COUNSEL, IT MAY BE N EGLIGENCE ON THE PART OF THE ASSESSING OFFICER FOR NOT CONSIDERING T HE MATERIAL FILED BY THE ASSESSEE, THEREFORE, REOPENING OF ASSESSMENT, A FTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, IS NOT JUSTIFIED. 4. ON THE CONTRARY, SHRI ARUN C. BHARAT, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSING OFFICE R FOUND THAT THE ASSESSEE CLAIMED DEDUCTION OF ` 16,75,72,169/- UNDER SECTION 36(1)(VIII) OF THE ACT. THE ASSESSING OFFICER REST RICTED THE CLAIM TO ` 5,05,10,900/- WHILE PASSING ORDER UNDER SECTION 143 (3) OF THE ACT. ON VERIFICATION OF RECORD, ACCORDING TO THE LD. D.R ., THE ASSESSING OFFICER FOUND THAT THE TOTAL RECEIPT WAS ` 1,22,22,83,052/- OUT OF WHICH ` 82,13,45,772/- WAS ASSESSEES OWN RECEIPT. AFTER R EDUCING THE EXPENDITURE OF ` 68,93,45,901/-, THE ASSESSEE EARNED PROFIT OF ` 13,19,99,871/-. ACCORDING TO THE LD. D.R., THE BAL ANCE SHEET AS ON 31.03.2006 SHOWS THAT THE ASSESSEE HAS TRANSFERRED A SUM OF ` 16,75,72,169/- OUT OF ITS OWN FUND AND CREATED A SP ECIAL RESERVE TO THE EXTENT OF ` 4,43,21,439/-. THEREFORE, ACCORDING TO THE LD. D.R ., THE ASSESSING OFFICER FOUND THAT THE INCOME OTHERWI SE CHARGEABLE 4 I.T.A. NOS.1315 & 1316/MDS/15 TO TAX HAS ESCAPED ASSESSMENT AND THE ASSESSEE IS E LIGIBLE ONLY FOR ALLOWANCE OF ` 4,43,21,439/- AS AGAINST THE ALLOWANCE OF ` 5,05,10,900/-. HENCE, ACCORDING TO THE LD. D.R., T HE ASSESSING OFFICER RIGHTLY LEVIED TAX ON THE EXCESS ALLOWANCE OF ` 61,89,461/-. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AT THE TIME OF ORIGINAL ASSESSMENT, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE IS ELIGIBLE FOR ALLOWANCE OF ` 4,43,21,439/- AS AGAINST ALLOWANCE OF ` 5,05,10,900/-. NO FRESH MATERIAL WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER. WE HAVE CAREFULLY GONE THROUGH THE PROVISO TO SECTION 147 OF THE ACT. THIS PROVIS O CLEARLY SAYS THAT UNLESS THERE IS NEGLIGENCE ON THE PART OF THE ASSES SEE IN FURNISHING MATERIAL REQUIRED FOR COMPLETING THE ASSESSMENT, TH E ASSESSING OFFICER CANNOT REOPEN THE ASSESSMENT AFTER EXPIRY O F FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR. IN THIS CASE, THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT IN THE ABSENCE OF ANY MATERIAL TO INDICATE THAT THERE WAS NEGLIGENCE ON THE PART OF THE ASSESSEE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN 5 I.T.A. NOS.1315 & 1316/MDS/15 REOPENING THE ASSESSMENT. AS RIGHTLY SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSEE, THERE IS NOT EVEN A WHISPER THAT THE ASSESSEE HAS FAILED TO FURNISH ANY OF THE REQUIRED PARTICULARS F OR COMPLETING THE ASSESSMENT. IN THOSE MATERIAL FACTS, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT REOPENING OF ASSESSMENT UND ER SECTION 147 OF THE ACT IS NOT JUSTIFIED AND THE ORDER PASSED BY THE ASSESSING OFFICER CANNOT STAND IN THE EYE OF LAW. ACCORDINGL Y, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE ASSESSM ENT REOPENED UNDER SECTION 147 OF THE ACT IS QUASHED. 6. COMING TO THE ASSESSEES APPEAL FOR ASSESSMENT Y EAR 2007- 08 IN I.T.A. NO.1316/MDS/2015, THE ASSESSEE CLAIMED THAT FOR THIS ASSESSMENT YEAR ALSO, THE ASSESSMENT WAS REOPENED A FTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. HOWEVER, THE ASSESSEE HAD NOT RAISED THIS ISSUE BEFORE THE C IT(APPEALS). IN FACT, IT WAS RAISED FIRST TIME BEFORE THIS TRIBUNAL . THEREFORE, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT AN OPPOR TUNITY MAY BE GIVEN TO THE CIT(APPEALS). THE LD.COUNSEL FOR THE ASSESSEE ALSO FAIRLY SUBMITTED THAT THE MATTER MAY BE REMITTED BA CK TO THE FILE OF THE CIT(APPEALS) TO CONSIDER THE ISSUE OF REOPENING , SINCE THE ISSUE 6 I.T.A. NOS.1315 & 1316/MDS/15 OF REOPENING OF ASSESSMENT HAS NOT BEEN RAISED BEFO RE THE CIT(APPEALS). 7. THE ISSUE OF REOPENING OF ASSESSMENT UNDER SECTI ON 147 OF THE ACT GOES TO THE ROOT OF THE MATTER. IN FACT, T HIS GOES TO THE JURISDICTION OF ASSESSING OFFICER FOR MAKING REASSE SSMENT. THEREFORE, THE SAME HAS TO BE DISPOSED OF AT THE FI RST INSTANCE. AS RIGHTLY SUBMITTED BY THE LD.COUNSEL FOR THE ASSESSE E AND THE LD. DEPARTMENTAL REPRESENTATIVE, THIS ISSUE WAS NOT CON SIDERED BY THIS CIT(APPEALS) AND IT WAS RAISED FIRST TIME BEFORE TH IS TRIBUNAL. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE MATTER NEEDS TO BE CONSIDERED BY THE CIT(APPEALS) AT THE F IRST INSTANCE. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BEL OW FOR ASSESSMENT YEAR 2007-08 ARE SET ASIDE AND THE ISSUE OF REOPENI NG OF ASSESSMENT IS REMITTED BACK TO THE FILE OF THE ASSE SSING OFFICER. THE CIT(APPEALS) SHALL CONSIDER THE ISSUE OF REOPEN ING AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. THE CIT( APPEALS) SHALL RECONSIDER THE ISSUES ON MERIT ONCE AGAIN. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR AS SESSMENT YEAR 2006-07 IN I.T.A. NO.1315/MDS/2015 IS ALLOWED. HOW EVER, FOR THE 7 I.T.A. NOS.1315 & 1316/MDS/15 ASSESSMENT YEAR 2007-08 IN I.T.A. NO.1316/MDS/2015 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 27 TH JULY, 2017 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 27 TH JULY, 2017. KRI. - +056 76'0 /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. / 80 () /CIT(A)-11, CHENNAI-34 4. / 80 / CIT, CHENNAI-3, CHENNAI 5. 69 +0 /DR 6. :& ; /GF.