I.T.O.,Ward-48(1) , Kolkata V. M/s Mondal Metal Works, Howrah

ITA 175/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6169 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 18-07-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 01-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NICHOLUS MURMU CITSRDR
• Assessee Lawyers: SUBAL SAHA
• Keywords: Reopening of assessment; Audit objection; Difference of opinion; Assessment record; Reason to believe; Change of opinion
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH SMC KOLKATA BEFORE SHRI S.S, GODARA, JUDICIAL MEMBER ITA NO.175/KOL/2019 ASSESSMENT YEAR:2010-11 INCOME TAX OFFICER WARD-48(1), 1 ST FLOOR, 3, GOVT. PLACE WEST, KOLKATA-700001 / V/S . M/S MONDAL METAL WORKS 1 DEBIPARA, CHAMRAIL, HOWRAH-711114 [ PAN NO.AAKFM 5634 Q ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI NICHOLUS MURMU, ADDL. CIT-SR-DR /BY RESPONDENT SHRI SUBAL SAHA, AR, /DATE OF HEARING 18-07-2019 /DATE OF PRONOUNCEMENT 07-08-2019 /O R D E R THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2010-11, ARISES AGAINST THE COMMISSIONER OF INCOME-TAX (APPEALS)-14, KOLKATAS ORDER DATED 01.11.2018 PASSED IN CASE NO.10133/CIT(A)-14/WD-48(1)/2017-18, INVOL VING PROCEEDINGS U/S. 147, R.W.S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE REVENUES SOLE SUBSTANTIVE GRIEVANCE SEEKS T O REVERSE THE CIT(A)S FINDINGS QUASHING THE IMPUGNED RE-OPENING / RE-ASSE SSMENT VIDE ITS FOLLOWING DETAILED DISCUSSION AS UNDER:- / DECISION: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT A ND PERUSED RELEVANT ASSESSMENT RECORD AND ' GROUNDS OF APPEAL '. FROM THE RECORD IT IS FOUND THAT THE CASE WAS RE OPENED MAINLY ON THE GROUND THAT THE APPELLANT FOUNDRY HAS DISCLOSED RAT IO OF CONVERSION @ 78.53% AS AGAINST ALLEGED RATIO DISCLOSED @ 88% BY SIMILAR ASSESSEE C ARRYING SIMILAR BUSINESS. THE REOPENING AS PER RECORDS ARE ON THE BASIS OF AUDIT OBJECTION DAT ED 20.01.2015 BASED ON COMPARATIVE STUDY OF CONVERSION RATE OF ANOTHER ASSESSEE NAMELY M/ S INDUSTRIAL CASTING CORPORATION. ON THE BASIS OF AUDIT OBJECTION WHICH RELIES SOLELY ON COM PARISON WITH CONVERSION RATE OF ANOTHER APPELLANT, THE A.O. CANNOT FORM REASON TO BELIEVE F OR REOPENING STATEMENT U/S 147 OF THE I T ACT, 1961. THE ORIGINAL ASSESSMENT WHICH WAS PASSED U/S. 143(3) AFTER CONSIDERING THE TAX ITA NO.175/KOL/2019 A.Y. 2010-11 ITO WD-48(1), KOL. VS. M/S MODNAL METAL WORKS PA GE 2 AUDIT REPORT AND CENTRAL EXCISE RETURN AND BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE THEN ASSESSING OFFICER FOR VERIFICATION. THE CENTRA L EXCISE AUTHORITIES HAS PASSED NO ADVERSE COMMENTS ON THE CONVERSION RATE. THE A.O. HAS ALSO NOT REJECTED THE BOOKS OF ACCOUNT OF THE APPELLANT. FURTHERMORE, IN THE RECORDED REASON, THE RE HAS BEEN NO ALLEGATION BY THE ASSESSING OFFICER THAT THE ASSESSEE FIRM HAS NOT MADE TRUE AN D FULL DISCLOSURES OF THE FACTS WHICH IS SINE QUO NON FOR .REOPENING OF ASSESSMENT WHICH HAS BEEN PASSED U/S 143(3) AFTER THE EXPIRY OF FOUR YEARS. THE A.O. HAS NOT FORMED ANY REASON TO B ELIEVE ON THE BASIS OF FINDINGS OF AUDIT BUT HAS MERELY REPLICATED THE AUDIT OBJECTION AS THE MA IN REASON FOR REOPENING THE CASE U/S148 OF THE ACT. THE CHARGE THAT THE APPELLANT HAS SHOWN EX CESS WASTAGE AMOUNTS TO CHANGE IN OPINION WHICH CANNOT BE THE GROUNDS FOR REOPENING O F ASSESSMENT U/S 147/148 OF THE ACT AS HELD IN PLETHORA OF CASE LAWS INCLUDING THE LAND MA RK JUDGEMENT OF THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOM E TAX, DELHI VS. KELVINTOR OF INDIA LIMITED [2010] 187 TAXMAN 312 (SC) 1 WHICH HAS HELD THAT REOPENING FOR ' CHANGE OF OPINION ' IS NOT PERMITTED UNDER THE LAW ON THE A/R OF THE APPELLANT HAS ALSO DRAWN ATTENTION TO THE DECISION OF THE MADRAS HIGH COURT IN THE CAS E OF KARTI P. CHIDAMBARAM VS ASSISTANT COMMISSIONER OF INCOME TAX, CHENNAI [2017] 88' TAX MANN.COM 27 (MADRAS) WHERE IT WAS OBSERVED THAT 'THUS, ON A MERE READING ON THE REASO NS FOR REOPENING CLEARLY SHOW THAT THERE WAS NO ALLEGATION AGAINST THE APPELLANT THAT THERE HAD BEEN OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERI AL FACTS NECESSARY FOR ASSESSMENT FOR THAT YEAR. THE SO CALLED REASON TO BELIEVE THAT INCOME C HARGEABLE TO TAX HAS ESCAPED ASSESSMENT IS ON THE GROUND THAT THE ASSESSING OFFICER AT THE TIM E OF SCRUTINY ASSESSMENT DID NOT EXAMINE AS TO WHETHER THE CONVERSION RATIO WAS TOO MUCH EXCESS IVE OR NOT. THIS CAN HARDLY BE A REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED A SSESSMENT AS IT IS A CLEAR CASE OF CHANGE OF OPINION BY THE ASSESSING OFFICER. THE OBLIGATION ON THE PART OF THE APPELLANT DOES NOT EXTEND BEYOND FULLY AND TRULY DISCLOSING ALL PRIMARY FACTS . ALL THE FACTS WERE REMAIN OPEN TO THE SING OFFICER WHO PREVIOUSLY ASSESSED. IT IS FOR THE ASSE SSING OFFICER TO TAKE AN INFERENCE ON FACTS AND LAW BASED ON SUCH DISCLOSURE. IF ACCORDING TO T HE RESPONDENT, HIS PREDECESSOR DID NOT COME TO A PROPER INFERENCE ON THE FACTS DISCLOSED, IT IS NO GROUND TO REOPEN THE ASSESSMENT, AS IF-PERMITTED AND IT WOULD AMOUNT TO A CLEAR CASE OF CHANGE OF OPINION'. SIMILARLY, THE JURISDICTION HIGH COURT IN THE CASE OF ASIATIC OXYGEN LTD. VS DEPUTY COMMISSIONER OF INCOME-TAX [2015] 60 TAXMANN.COM 26 5 (CALCUTTA) ALSO ECHOED THE SAME OPINION THAT' WHERE ASSESSMENT WAS REOPENED IN ABSE NCE OF COGENT REASONS AND MERELY ON BASIS OF CHANGE OF OPINION, SAME WAS NOT JUSTIFIED. AFTER CAREFUL CONSIDERATION OF THE SUBMISSION OF TH E APPELLANT, PERUSAL OF RELEVANT ASSESSMENT RECORDS AND THE VARIOUS JUDICIAL DECISIONS INCLUDIN G THAT OF THE JURISDICTIONAL HIGH COURT, IT HAS TO BE HELD THAT THE REOPENING OF ASSESSMENT ORD ER PASSED U/S 143(3) OF THE I T ACT, 1961 U/S 147 WAS BAD IN LAW. THE ADDITION OF RS.12,70,15 5/- IS DELETED. THIS GROUND OF APPEAL SUCCEEDS AND IS THEREFORE ALLOWED. 3. MR. M VEHEMENTLY CONTENDS DURING THE COURSE OF H EARING THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN QUASHING THE RE-OPENIN G ISSUE TAKEN RECOURSE TO BY THE ASSESSING OFFICER. HIS CASE IS THAT THE ASSESSING A UTHORITY HAD RIGHTLY SET INTO MOTION THE IMPUGNED REOPENING KEEPING IN MIND SIMILAR COMP ARABLE INSTANCES INDICATING CONVERGENT RATE IN THE FOUNDER 88% THAN THAT DECLAR ED @ 78.52%. THERE IS HARDLY ANY DISPUTE THAT THE ASSESSING OFFICER HAS GONE BY THE AUDIT OBJECTION DATED 20.01.2015 PIN-POINTING THE SAID DIFFERENCE RATHER THAN FORMIN G HIS OWN OPINION OF THE ASSESSEES CORRESPONDING TAXABLE INCOME TO HAVE ESCAPED ASSESS MENT. THIS CLINCHING ASPECT HAS ITA NO.175/KOL/2019 A.Y. 2010-11 ITO WD-48(1), KOL. VS. M/S MODNAL METAL WORKS PA GE 3 GONE UNREBUTTED FROM THE REVENUE SIDE AND ALSO THAT THE ASSESSING OFFICER HAD EXAMINED THE CORRESPONDING DETAILS IN HIS REGULAR A SSESSMENT FRAMED U/S. 143(3) OF THE ACT ON 15.03.2013. I THEREFORE AFFIRM THE CIT(A)S FINDINGS UNDER CHALLENGE QUASHING THE IMPUGNED RE-OPENING ON ACCOUNT OF CHANGE OF OPI NION AT THE ASSESSING OFFICERS BEHEST. 4. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 07/08/2019 SD/- (S.S. GODARA) JUDICIAL MEMBE R KOLKATA, *DKP/SR.PS - 07/08/2019 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ITOWARD-48(1), 1 ST FL. 3, GOVT. PLACE WEST, KOLKATA-001 2. /RESPONDENT-M/S MONDAL METAL WORKS, 1,DEBIPARA, CHA MRAIL, HOWRAH-711114 3. $ ' / CONCERNED CIT 4. ' - / CIT (A) 5. ( $ , $ / DR, ITAT, KOLKATA 6. , / GUARD FILE. BY ORDER/ , /TRUE COPY/ $,