The DCIT, Circle-4, Baroda V. Synbiotics Limited, Baroda

ITA 1772/AHD/2009

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9191 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 1996-1997
• Appeal Filed On: 28-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA
• Assessee Lawyers: M K PATEL
• Keywords: TDS; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI D.C.AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 27/08/09 DRAFTED ON: 02/ 09/09 ITA NO.1772/AHD/2009 ASSESSMENT YEAR : 1996-97 THE DY.CIT CIRCLE-4 BARODA VS. M/S.SYNBIOTICS LIMITED WADI WADI BARODA 390 023 PAN/GIR NO. : AACCS 9831 Q (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI C.K. MISHRA, DR RESPONDENT BY: SHRI M.K.PATEL, AR O R D E R PER D.C.AGRAWAL , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-III, BARODA DATED 02/03/2009 PASSED FOR ASSESSMENT YEAR 1996-97, BY RAISING FOLLOWING GROU ND(S): 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN QUASHING THE REOPENED ASSES SMENT U/S.147 OF THE I.T. ACT, 1961, OVERLOOKING THE FACT THAT THE CASE WAS REOPENED WITH THE APPROVAL OF CIT-II, BARO DA. MOREOVER, THE CIT(A) HAS ALSO OVERLOOKED THE RATIO LAID DOWN BY THE APEX COURT IN THE CASE OF SUN ENGINEERI NG WORKS (P) LTD (148 ITR 297) THAT THE PROCEEDINGS U/ S.147 ARE NOT FOR THE BENEFIT OF THE ASSESSEE. 2. THE APPELLANT CRAVES LEAVE TO ADD, TO AMEND OR ALTE R THE ABOVE GROUNDS AS MAY BE DEEMED NECESSARY. ITA NO.1772/AHD/2009 DCIT VS. M/S.SYNBIOTICS LTD. ASST.YEAR 1996-97 - 2 - RELIEF CLAIMED IN APPEAL THE ORDER OF THE CIT(A) ON THE ISSUES RAISED IN THE AFORESAID GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFI CER BE RESTORED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E-COMPANY HAD FILED ITS RETURN OF INCOME ON 29/11/1996 DECLARING A LOSS OF RS.4,00,71,173/-/. ASSESSING OFFICER RE-OPENED THE ASSESSMENT COMPLETED U/S.143(3) ON 10/03/1999 ON A LOSS OF RS. 4,00,71,173/- BY ISSUING NOTICE U/S.148(1) OF THE I.T. ACT, 1961 ON 26/03/2002, WHEREIN LOSS WAS DETERMINED AT RS.3,50,73,710/-. T HEREAFTER, ANOTHER NOTICE U/S.148 OF THE I.T. ACT, 1961 WAS ISSUED ON 24/03/2003 ON THE BASIS OF AUDIT REPORT, WHEREIN IT WAS POINTED OUT THAT THERE WAS EXCESS PROVISION OF RS.1,40,621/- AND SHORT PROVISI ON OF RS.3,79,707/- PERTAINED TO EARLIER YEAR. THE ASSE SSEE DEBITED NET AMOUNT AT RS.2,39,086/- (3,79,707 1,40,621) TO TH E P&L ACCOUNT. THUS, THE ASSESSEE HAD APPARENTLY CLAIMED FULL AMOU NT OF RS.3,79,707/-. ACCORDING TO THE ASSESSING OFFICER , A SHORT PROVISION OF RS.3,79,707/- PERTAINING TO EARLIER YEARS, COULD NOT BE ALLOWED. ON LEGALITY OF THE ISSUE, IT WAS EXPLAINED TO THE A SSESSING OFFICER THAT ALL THE MATERIALS WERE AVAILABLE ON RECORD, THEREFO RE, ASSESSMENT COULD ITA NO.1772/AHD/2009 DCIT VS. M/S.SYNBIOTICS LTD. ASST.YEAR 1996-97 - 3 - NOT BE RE-OPENED AFTER EXPIRY OF FOUR YEARS FROM TH E END OF THE ASSESSMENT YEAR UNLESS THERE IS AN OMISSION OR FAIL URE ON THE PART OF THE ASSESSEE. ON MERIT, IT WAS EXPLAINED THAT LIAB ILITY WAS CRYSTALLIZED DURING THIS YEAR AND, THEREFORE, AFTER SETTLING DOW N THE LIABILITY WHATEVER DIFFERENCE SURVIVED HAS BEEN DEBITED IN THIS YEAR. THE LEARNED ASSESSING OFFICER AGREED WITH HIM AND DID NOT MAKE ANY ADDITION ON THIS ACCOUNT. IT WAS ALSO POINTED OUT BY THE ASSESSEE THAT A SUM OF RS.1,82,028/- IS ON ACCOUNT OF ESI DAMAGES . THERE WAS A DELAY IN DEPOSIT OF ESI CONTRIBUTION AND ON ACCOUNT OF THIS DEFAULT, THE ESI AUTHORITIES DIRECTED TO PAY DAMAGES AND THE DEMAND WAS RAISED IN THIS YEAR. THE ASSESSING OFFICER TREATE D THIS AMOUNT AS PENALTY AND DISALLOWED. FURTHER, THE ASSESSEE CLAI MED AN AMOUNT OF RS.5,67,664/- ON ACCOUNT OF INTEREST PAID ON DELAY IN DEPOSIT OF TDS. THE LD.AO DISALLOWED THE CLAIM ON THE GROUND THAT T DS IS ASSESSEES OWN LIABILITY AND CANNOT BE ALLOWED AS DEDUCTION. 3. IN APPEAL, THE LEARNED CIT(APPEALS) QUASHED THE ASSESSMENT ON THE GROUND THAT THE ASSESSING OFFICER HAS USED THE SAME INFORMATION ALREADY AVAILABLE ON RECORD TO RE-OPEN THE ASSESSMENT. ITA NO.1772/AHD/2009 DCIT VS. M/S.SYNBIOTICS LTD. ASST.YEAR 1996-97 - 4 - THE ASSESSEE HAS RELIED ON THE FOLLOWING JUDGEMENTS BEFORE HE LEARNED CIT(APPEALS). SL.NO(S) DECISION IN THE CASE OF.. REPORTED IN .. (1) GARDEN FINANCE LTD VS. ACIT 188 CTR 316 (GUJ.) (2) ARVIND MILLS LTD. VS. ACWT 270 ITR 469 (GUJ) (3) BHOVWATI SAHAKARI SAKAR KARKANA LTD. VS. DCIT 269 ITR 186 (BOM.) 4. BEFORE US, THE LD.DR HAS RELIED ON THE ORDER O F THE ASSESSING OFFICER, WHEREAS THE LEARNED AUTHORISED REPRESENTAT IVE OF THE ASSESSEE HAS SUPPORTED THE ORDER OF THE LEARNED CIT (APPEALS). 5. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE OP INION THAT THE LEARNED CIT(APPEALS) WAS JUSTIFIED IN QUASHING THIS RE-OPENING OF THE RE-ASSESSMENT BEYOND FOUR YEARS. THE ASSESSIN G OFFICER WAS REQUIRED TO SHOW IF THERE WAS ANY OMISSION OR FAILU RE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MA TERIALS NECESSARY FOR ASSESSMENT. FOR RE-OPENING THE ASSESSMENT, THE AS SESSING OFFICER HAS NOT USED ANY NEW INFORMATION WHICH IS ALREAD Y AVAILABLE ON THE RECORD. THE REASONS RECORDED BY THE ASSESSING OFFICER DO NOT ITA NO.1772/AHD/2009 DCIT VS. M/S.SYNBIOTICS LTD. ASST.YEAR 1996-97 - 5 - REFLECT THAT THERE WAS ANY OMISSION OR FAILURE ON T HE PART OF THE ASSESSEE. THE ASSESSING OFFICER HAS SIMPLY RELIED ON THE SAME MATERIAL ALREADY AVAILABLE ON RECORD, SUCH AS, AUD IT REPORT, THEREFORE, RE-OPENING OF THE ASSESSMENT IS BAD IN LAW AND THE LEARNED CIT(APPEALS) WAS QUITE JUSTIFIED IN QUASHING THE AS SESSMENT. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 04/09/2009. SD/- SD/- ( MAHAVIR SINGH ) ( D.C.AGRAWAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 04/09/2009 T.C. NAIR COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-III, BARODA 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD