Rajesh Pradhan, Jalpaiguri V. ITO, Ward - 1(3), Jalpaiguri , Jalpaiguri

ITA 1587/KOL/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6758 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 24-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VENKATRAMANE CITSRDR
• Keywords: Reassessment proceedings
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.1587/KOL/2018 ASSESSMENT YEAR:2008-09 RAJESH PRADHAN C/O SUBASH AGARWAL & ASSOCAITES, SIDDHA GIBSON, 1, GIBSON LANE, SSUITE-213, 2 ND FLOOR, KOLKATA-700069 [ PAN NO.AKJPP 6193 N ] / V/S . INCOME TAX OFFICER, WARD-1(3), CENTRAL REVENUE BUILDING, NAYABASTI, P.O. & DIST. JALPAIGURI, PIN- 735101 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI SUBASH AGARWAL, ADVOCATE /BY RESPONDENT SHRI S. VENKATRAMANE, ADDL. CIT-SR-DR /DATE OF HEARING 22-01-2019 /DATE OF PRONOUNCEMENT 28-02-2019 /O R D E R THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09 , ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-JALPAIGURIS O RDER DATED 06.06.2018 PASSED IN CASE NO.02/CITAS/JAL/2016-17 INVOLVING PROCEEDINGS U/S. 147 R.W.S. 144 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. IT TRANSPIRES AT THE OUTSET THAT THE ASSESSING O FFICER HAD INITIATED SEC. 147 R.W.S 148 PROCEEDINGS AGAINST THE ASSESSEE ALLEGING CAPIT AL INTRODUCTION IN THE FARM M/S R.R. ENTERPRISE TO THE TUNE OF 4.50 LAC STAYING DIFFERENT FIGURES IN HIS TWO TAX A UDIT REPORTS FOR THE VERY FINANCIAL YEAR. THE ASSESSING OFFICER THEREAFTER FINALIZED RE- ASSESSMENT IN ISSUE DATED 22.03.2013 ADDING SUNDRY CREDITS AMOUNTING TO 4,37,491/- AS BOGUS U/S 68 OF THE ACT AS UPHELD IN LOWER APPEL LATE PROCEEDINGS. 3. THE ASSESSEES FIRST AND FOREMOST ARGUMENT RAISE D DURING THE COURSE OF HEARING IS THAT THE ASSESSING OFFICER HAD NOT MADE ANY ADDI TION FOR THE ABOVE STATED SOLE ITA NO.1587/KOL/2018 A.Y. 2008-09 RAJESH PRADHAN VS. ITO WD-1(3), JAL PAGE 2 REASON OF RE-OPENING AND THEREFORE, THE IMPUGNED SU NDRY CREDITS (SUPRA) AS WELL AS RE- ASSESSMENT ITSELF ARE NOT LIABLE TO BE SUSTAINED. T HE REVENUE STRONGLY SUPPORTS BOTH THE LOWER AUTHORITIES ACTION TO THIS EFFECT. I FIN D IN THIS BACKDROPS OF FACTS THAT THIS TRIBUNALS CO-ORDINATE BENCHS DECISION IN ITA NO.634/KOL/2017 SANJU JALAN VS. ITO DECIDED ON 10.01.2018 HOLDS THAT SUCH RE-ASSESSMENT IN CASE OF NO ADDITION MADE REGARDING REASON RECORDED OF RE-OPENING BUT ON SOME DIFFERENT ISSUES IS NOT LIABLE TO BE UPHELD AS UNDER:- 18. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THA T ON THE OTHER GROUNDS OF APPEAL VI., GR.NO.6 TO 8, IT IS THE PLEA OF THE ASSESSEE B EFORE US THAT WHEN AN ASSESSMENT IS REOPENED FOR ONE REASON BUT NO ADDITION IS MADE IN THE REASSESSMENT PROCEEDINGS IN RESPECT OF THAT REASON OR WHEN THE SAID ADDITION IS DELETED, THEN, NO FURTHER ADDITION CAN BE MADE IN THE REASSESSMENT PROCEEDINGS. IN THI S REGARD LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. JET AIRWAYS INDIA LTD., 331 ITR 326 (BOM), WHEREIN THE HONBLE BOMBAY HIGH COURT HELD THAT IF AO DOES NOT ASSESS I NCOME FOR WHICH REASONS WERE RECORDED U/S 147 OF THE ACT, HE CANNOT ASSESS OTHER INCOME U/S 147 OF THE ACT. THE HONBLE COURT OBSERVED THAT (I) S. 147 PROVIDES THA T THE AO MAY ASSESS THE INCOME WHICH HAS ESCAPED ASSESSMENT AND ALSO ANY OTHER IN COME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTIC E SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION. EXPLANATION 3 TO S. 147 INSERTED BY F (NO. 2) ACT, 2009 W.R.E.F 1.4.1989 PROVIDES THAT THE AO MAY ASS ESS OR REASSESS THE INCOME IN RESPECT OF ANY ISSUE NOTWITHSTANDING THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASONS RECORDED ITA NO.634/KOL/2017 SANJU JALAN A.YR.2012-13 (II) THE WORDS AND ALSO INDICATE THAT REASSESSMENT MUST BE WITH RESPECT T O THE INCOME FOR WHICH THE AO HAS FORMED AN OPINION A ND ALSO IN RESPECT OF ANY OTHER INCOME WHICH COMES TO HIS NOTICE SUBSEQUENTLY . HOWEVER, IF THE AO ACCEPTS THE OBJECTION OF THE ASSESSEE AND DOES NOT ASSESS THE INCOME WHICH WAS THE BASIS OF THE NOTICE, IT IS NOT OPEN TO HIM TO ASSESSEE INCOME UNDER SOME OTHER ISSUE INDEPENDENTLY; (III) EXPLANATION 3 TO S. 147 WAS INSERTED TO SUPER SEDE THE JUDGMENTS IN VIPIN KHANNA 255 ITR 220 (P&H) & TRAVANCORE CEMENTS 305 I TR 170 (KER) WHERE IT WAS HELD THAT THE AO COULD NOT ASSESS INCOME IN RESPECT OF ISSUES UNCONNECTED WITH THE ISSUE FOR WHICH THE NOTICE WAS ISSUED. HOWEVER, EXPLANATION 3 DOES NOT AFFECT THE JUDGMENTS IN SHRI . RAM SINGH 306 ITR 343 (RAJ) & ATLAS CYCLE INDUSTRIES 180 ITR 319 (P&H) WH ERE IT WAS HELD THAT IF THE AO ACCEPTED THAT THE REASONS FOR WHICH THE NOTI CE WAS ISSUED WERE NOT CORRECT, HE WOULD CEASE TO HAVE JURISDICTION TO PRO CEED WITH THE REASSESSMENT; (IV) EXPLANATION 3 LIFTS THE EMBARGO INSERTED BY JU DICIAL INTERPRETATION ON THE MAKING OF A S. 147 ASSESSMENT IN RESPECT OF ITEMS N OT REFERRED TO IN THE RECORDED REASONS. HOWEVER, IT DOES NOT AND CANNOT O VERRIDE THE SUBSTANTIVE ITA NO.1587/KOL/2018 A.Y. 2008-09 RAJESH PRADHAN VS. ITO WD-1(3), JAL PAGE 3 PART OF S. 147 THAT THE INCOME FOR WHICH THE NOTICE WAS ISSUED MUST BE ASSESSABLE. THE LEARNED DR RELIED ON THE ORDER OF T HE CIT(A). 19. WE HAVE CONSIDERED THE SUBMISSION OF THE LEARNE D COUNSEL FOR THE ASSESSEE IN THE LIGHT OF THE JUDGMENT OF THE HONBLE BOMBAY IN THE CASE OF JET AIRWAYS (I) LTD. (SUPRA). WE ARE OF THE VIEW THAT ON THE FACTS AND I N THE CIRCUMSTANCES OF THE PRESENT CASE THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF JET AIRWAYS INDIA LTD. (SUPRA)IS SQUARELY APPLICABLE. A S WE HAVE ALREADY SEEN THAT THE ASSESSMENT WAS REOPENED FOR THE REASON THAT THE JEW ELLERY PURCHASED BY THE ASSESSEE WAS FROM UNDISCLOSED SOURCES AND THE PURCHASES WERE BOGUS. THAT ADDITION HAS NOT BEEN SUSTAINED NOW. THE ASSESSING OFFICER HOWEVER, PROCEEDED TO MAKE AN ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN (LTCG) ON SALE OF SHARES. THIS WAS CLEARLY BEYOND 10 ITA NO.634/KOL/2017 SANJU JALAN A.YR.2012 -13 10 THE SCOPE OF THE PROCEEDINGS UNDER SECTION 148 OF THE ACT. THE ASSES SING OFFICER, THEREFORE, COULD NOT HAVE PROCEEDED TO MAKE THE IMPUGNED ADDITION OF BOG US LTCG. SIMILAR VIEW HAS BEEN EXPRESSED BY THE HONBLE DELHI HIGH COURT IN T HE CASE OF RANBAXY LABORATORIES VS. CIT, ITA 148 OF 2008 DATED 3/6/2011. THE HONBL E DELHI HIGH COURT FOLLOWED THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF JET AIRWAYS (SUPRA). IN THAT VIEW OF THE MATTER WE HOLD THAT THE ADDITION BY TRE ATING THE LTCG AS BOGUS CANNOT BE SUSTAINED AS IT WAS BEYOND THE SCOPE OF THE PROCEED INGS UNDER SECTION 147 OF THE ACT. WE THEREFORE DELETE THE SAID ADDITION ALSO AND ALLO W GROUND NO..6 TO 8. . 20. IN VIEW OF THE ABOVE CONCLUSIONS WE ARE OF THE VIEW THAT THE ISSUE WITH REGARD TO THE VALIDITY OF INITIATION OF RE-ASSESSMENT PROCEED INGS U/S 147 OF THE ACT DOES NOT REQUIRE ANY CONSIDERATION. 21. IN THE RESULT, THE A PPEAL IS ALLOWED. I ADOPT THE DETAILED DISCUSSION MUTATIS MUTANDIS QU ASH THE IMPUGNED ASSESSMENT FOR THE SAID PRECISE REASON. ORDERED ACCORDINGLY. 4. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 28/02/2019 SD/- (S.S. GODARA) J UDICIAL MEMBER KOLKATA, *DKP/SR.PS - /02/2019 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-RAJESH PRADHAN, C/O SUBASH AGARWAL & ASSO CIATES, SIDDHA GIBSON, 1, GIBSONO LANE, SUITE-213, 2 ND FLOOR, KOLKATA-69 2. /RESPONDENT-ITO WARD-1(3), CENTRAL REVENUE BUILDING, NA YABASTI, P.O. & DIST. JALPAIGURI, PIN-735101 3. ' % / CONCERNED CIT 4. % - / CIT (A) 5. & ))' , ' / DR, ITAT, KOLKATA 6. + / GUARD FILE. BY ORDER/ , / ',