M/s Vaish Associates, New Delhi V. ACIT, New Delhi

ITA 1380/DEL/2013

• Counselvise Citation: 138020114 RSA 2013
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 08-09-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 08-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J P CHANDREKAR SENIOR
• Assessee Lawyers: ROHIT JAIN
• Keywords: Audit objection; Difference of opinion; Change of opinion
• Section: 147; 148; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH H HH H : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 1380/DEL/2013 1380/DEL/2013 1380/DEL/2013 1380/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2004 2004 2004 2004 - -- - 05 0505 05 M/S VAISH ASSOCIATES, M/S VAISH ASSOCIATES, M/S VAISH ASSOCIATES, M/S VAISH ASSOCIATES, FLAT NO.5 FLAT NO.5 FLAT NO.5 FLAT NO.5- -- -7, 7, 7, 7, 10, HAILEY ROAD 10, HAILEY ROAD 10, HAILEY ROAD 10, HAILEY ROAD, ,, , NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 001. 110 001. 110 001. 110 001. PAN : AAAFV2395K. PAN : AAAFV2395K. PAN : AAAFV2395K. PAN : AAAFV2395K. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -37(1), 37(1), 37(1), 37(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ROHIT JAIN, ADVOCATE. RESPONDENT BY : SHRI J.P. CHANDREKAR, SENIOR DR. DATE OF HEARING : 08.09.2015 08.09.2015 08.09.2015 08.09.2015 DATE OF PRONOUNCEMENT : 05.10.2015 05.10.2015 05.10.2015 05.10.2015 ORDER ORDER ORDER ORDER PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA PER G.C. GUPTA, VP , VP , VP , VP : :: : THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2004-0 5 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-XXVIII, NEW DELHI DATED 4 TH JANUARY, 2013. 2. THE GROUNDS OF APPEAL NO.1 TO 1.5 OF THE ASSESSEE ARE AS UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME-TAX (APPEALS)(THE CIT(A)) ERRED IN UPHOLDING THE JURISDICTION OF THE ASSESSING OFFICER TO REASSESS THE INCOME OF THE APPELLANT UNDER SECTION 147 OF THE INCOME-TAX ACT, 1961 (THE ACT). 1.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN NOT HOLDING THAT REASSESSME NT ORDER DATED 28.12.2011, PASSED BY THE ASSESSING OFFICER UNDER SECTION 147 OF THE ACT, WAS WITHOUT JURISDICTION , BAD IN LAW AND VOID AB INITIO. ITA-1380/DEL/2013 2 1.2 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN NOT HOLDING THAT THE REASSESSMENT WAS BARRED BY LIMITATION, IN VIEW OF THE FA CT THAT (I) THE ORIGINAL ASSESSMENT HAD BEEN FRAMED UNDER SECTION 143(3) OF THE ACT AND (II) THERE WAS NO FAILU RE ON THE PART OF THE APPELLANT TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS RELEVANT FOR THE ASSESSMENT OF THE APPELLANTS INCOME. 1.3 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN FAILING TO APPRECIATE T HAT THE REASSESSMENT, BEING BASED ON MERE CHANGE OF OPINION, WAS BAD IN LAW. 1.4 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN NOT QUASHING THE REASSESSMEN T ON THE GROUND THAT THE SAME HAD BEEN INITIATED AT TH E DICTATES OF THE AUDIT PARTY AND THAT THE ASSESSING OFFIC ER HAD, IN WRITING, DISPUTED THE AUDIT OBJECTION RAISED BY THE AUDIT PARTY. 1.5 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN NOT HOLDING THAT REASSESSME NT ORDER PASSED BY THE ASSESSING OFFICER WAS BEYOND JURISDICTION SINCE THE REASONS RECORDED FOR REOPENING W ERE COMMUNICATED TO THE APPELLANT AFTER THE STATUTORY PE RIOD OF SIX YEARS. 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE OR IGINAL ASSESSMENT IN THIS CASE WAS FRAMED U/S 143(3) OF THE INCOME -TAX ACT, 1961 AND, AFTER THE PERIOD OF FOUR YEARS, THE ASSESSMEN T WAS REOPENED U/S 147 OF THE ACT BY ISSUE OF NOTICE U/S 148 ON MERE C HANGE OF OPINION. HE REFERRED TO THE COPY OF THE REASONS RECO RDED FOR REOPENING THE ASSESSMENT AS RECORDED BY THE ASSESSING OFFICER WHICH H AVE BEEN FILED IN THE COMPILATION AT PAGE 9 THEREOF WHICH SHO WS THAT THE ONLY REASON FOR REOPENING THE ASSESSMENT WAS THAT THE ASSESSEE HA S CLAIMED EXPENDITURE ON ACCOUNT OF RENOVATION AND RE PAIRS, OUT OF WHICH, `39.34 LAKHS WERE INCURRED ON RENOVATION AND SHOULD HAVE BEEN DISALLOWED AT THE TIME OF ASSESSMENT AND ADDED BACK TO T HE INCOME OF ITA-1380/DEL/2013 3 THE ASSESSEE. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T COMPLETE DETAILS OF THESE EXPENSES ON ACCOUNT OF RENOV ATION AND REPAIRS OF THE PREMISES HAVE BEEN FILED BEFORE THE ASSE SSING OFFICER AND THERE WAS NO FAILURE TO DISCLOSE THE MATERIAL FACT S BEFORE THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT. 4. LEARNED DR HAS OPPOSED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HE REFERRED TO PAGE 2 OF THE ASSESSMENT ORDER IN SUPPORT OF THE CASE OF THE REVENUE THAT NO BILLS FOR R ENOVATION EXPENSES WERE SUBMITTED BY THE ASSESSEE AND THAT THESE WERE CLEARLY CAPITAL IN NATURE AND SHOULD HAVE BEEN ADDED AS INCOM E IN THE HANDS OF THE ASSESSEE. HE RELIED ON THE ORDER OF THE ASSESSING O FFICER AND THE LEARNED CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSED THE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A) AND ALSO THE DETAILS OF THE EXPENDITURE INCURRED ON ACCOUNT OF RENOVATION A ND REPAIRS. WE FIND THAT ALL MATERIAL FACTS WERE DISCLOSED BY THE ASSESSE E AT THE TIME OF ORIGINAL ASSESSMENT AND THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NE CESSARY FOR ITS ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR. WE HAVE PERUSE D THE COPY OF THE REASONS RECORDED BY THE ASSESSING OFFICER W HILE REOPENING THE ASSESSMENT U/S 147 OF THE ACT AND WE FIND THAT THE R EASONS RECORDED CLEARLY SHOW THAT IT WAS MERELY BASED ON CHAN GE OF OPINION ONLY. WE FIND THAT IN THE REASONS RECORDED FOR REOPE NING OF ASSESSMENT, THERE IS NO ALLEGATION OF ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS N ECESSARY FOR ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR. WE FIND THAT THE ASSESSEE HAS FILED COPY OF THE RENOVATION LEDGER ACCOUNT IN THE BOOKS OF THE ASSESSEE ALONG WITH COPY OF INVOICES SUPPORTING R ENOVATION EXPENSES INCURRED DURING THE RELEVANT PERIOD. THE ASSE SSEE WAS ITA-1380/DEL/2013 4 RUNNING HIS PROFESSIONAL FIRM IN RENTED PREMISES. IN TH E FACTS OF THE CASE, WE ARE OF THE VIEW THAT THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS N ECESSARY FOR ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR AND, ACCORDINGL Y, WE HOLD THAT THE PROVISION OF SECTION 147 OF THE ACT WAS WRON GLY INVOKED IN THIS CASE. ACCORDINGLY, GROUND NOS.1 TO 1.5 OF THE ASSESSEES APPEAL ARE ALLOWED. 6. IN VIEW OF OUR HOLDING THAT REOPENING IN THIS CASE U/S 147 WAS BAD IN LAW, AND CONSEQUENTLY, CANCELLING THE REOPENI NG OF ASSESSMENT U/S 147OF THE ACT, THE OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE NOT ADJUDICATED UPON. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 5 TH OCTOBER, 2015. SD/- SD/- ( (( ( PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S VAISH ASSOCIATES, M/S VAISH ASSOCIATES, M/S VAISH ASSOCIATES, M/S VAISH ASSOCIATES, FLAT NO.5 FLAT NO.5 FLAT NO.5 FLAT NO.5- -- -7, 10, HAILEY ROAD, NEW DELHI 7, 10, HAILEY ROAD, NEW DELHI 7, 10, HAILEY ROAD, NEW DELHI 7, 10, HAILEY ROAD, NEW DELHI 110 001. 110 001. 110 001. 110 001. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -37(1), NEW DELHI. 37(1), NEW DELHI. 37(1), NEW DELHI. 37(1), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR