Sushil Kumar Jain, New Delhi V. ACIT, New Delhi

ITA 181/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7376 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 23-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 13-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Reassessment proceedings
• Section: 143(3); 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.181/DEL/2016 ASSESSMENT YEAR : 2006-07 SUSHIL KUMAR JAIN, C-67, NEETI BAGH, AUGUST KRANTI MARG, NEW DELHI. PAN: AAIPJ6676M VS. ACIT, CIRCLE-37(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GAUTAM JAIN, ADVOCATE DEPARTMENT BY : SHRI DEEPAK GARG, SR. DR DATE OF HEARING : 23.06.2016 DATE OF PRONOUNCEMENT : 24.06.2016 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) ON 27.10.2015 IN RELATION TO THE ASSESSM ENT YEAR 2006-07. 2. THE FIRST ISSUE ARGUED BY THE LD. AR IS AGAINST UPHOLDING THE VALIDITY OF INITIATION OF RE-ASSESSMENT PROCEEDING S. 3. SUCCINCTLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SENIOR ADVOCATE BY PROFESSION, DERIVING INCOME FROM PROFES SION AND CAPITAL ITA NO.181/DEL/2016 2 GAINS. RETURN DECLARING TOTAL INCOME OF RS.8,39,25 3/- WAS FILED ON 31.10.2006, WHICH WAS PROCESSED U/S 143(1) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT). ASSESSME NT ORDER U/S 143(3) OF THE ACT WAS PASSED ON 26.3.2008 DETERMINING TOTAL I NCOME AT RS.8,56,753/-. THE AO REOPENED THE ASSESSMENT BY NO TICING THAT THE ASSESSEE CLAIMED CREDIT FOR TDS AGAINST THE CURRENT YEARS INCOME ON RECEIPTS OF RS.4,47,600/-, WHICH WERE NOT OFFERED F OR TAXATION. ASSESSMENT WAS COMPLETED U/S 147/143(3), MAKING TOT AL ADDITION OF RS.2,37,500/-. THE ASSESSEE, INTER ALIA , ARGUED BEFORE THE LD. CIT(A) THAT THE AO HAD ISSUED NOTICE U/S 154 AND HENCE TH E INITIATION OF RE- ASSESSMENT PROCEEDINGS BY MEANS OF NOTICE U/S 148 W AS NOT VALID. THE LD. CIT(A) REMAINED UNCONVINCED WITH THE ASSESSEES SUBMISSION AND UPHELD THE INITIATION OF RE-ASSESSMENT PROCEEDINGS AND THE ADDITIONS MADE. THE ASSESSEE, THROUGH THIS GROUND/ISSUE, IS A GGRIEVED AGAINST THE INITIATION OF REASSESSMENT PROCEEDINGS. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL AVAILABLE ON RECORD. PAGE 30 OF THE PAPER BOOK IS A COPY OF ITA NO.181/DEL/2016 3 LETTER DATED 29.10.2013 ISSUED BY THE AO TO THE ASS ESSEE INTIMATING THE REASONS FOR REOPENING OF ASSESSMENT, WHICH ARE AS U NDER:- THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 1 961 WAS COMPLETED ON 26.03.2008 AT AN INCOME OF RS.8,65,753/-. ON FURTH ER EXAMINATION OF RECORDS REVEALS THAT THE ASSESSEE HAD RECEIVED PROF ESSIONAL/TECHNICAL CHARGES AMOUNTING TO RS.4,47,600/- FROM VARIOUS PAR TIES WHICH HAVE NOT BEEN CREDITED TO PROFIT & LOSS ACCOUNT BY THE ASSES SEE FOR THE FINANCIAL YEAR 2005-06 RELEVANT TO ASSESSMENT YEAR 2006-07. THE D ETAILS OF THE RECEIPTS ARE GIVEN AS UNDER: S.NO. NAME OF THE PARTY TOTAL PROFESSIONAL/ TECHNICAL FEES RECEIVED AS PER TDS CERTIFICATES. 1. BHILWARA CHITTORGARH DUSS LTD. 45,100/- 2. MURGAN SECURITIES CREDITS 95,000/- 3. GOYAL M.G. GASES (P) LTD. 2,49,000/- 4. KHAITAN CHEMICALS & FERTILIZER 40,000/- 5. BHARAT HYDROPOWER CORPORATION 18500/- TOTAL 4,47,600/- THE ASSESSEE NEITHER AT THE TIME OF FILING RETURN O F INCOME NOR AT ANY TIME OF ASSESSMENT PROCEEDING HAVE FURNISHED THE ABOVE I NFORMATION AND THUS FAILED TO DISCLOSE FULLY & TRULY ALL MATERIAL FACTS . 5. IT IS NOTICED THAT THE AO EARLIER ISSUED NOTICE U/S 154 DATED 23.2.2011, A COPY OF WHICH IS AVAILABLE AT PAGE 25 OF THE PAPER BOOK, INDICATING THE MISTAKE IN THE ASSESSMENT ORDER, WH ICH READS AS UNDER:- THE CAG AUDIT NOTICED THAT AS PER TDS CERTIFICATES AND BIFURCATION OF THE TOTAL PROFESSIONAL RECEIPTS FILED DURING THE COURSE OF ASSESSMENT ITA NO.181/DEL/2016 4 PROCEEDINGS THE FOLLOWING RECEIPTS RECEIVED FROM TH E FOLLOWING PARTIES WERE NOT FOUND TO HAVE BEEN INCLUDED IN THE TOTAL RECEIP TS WHICH HAVE CREDITED TO THE P&L ACCOUNT. S.NO. NAME OF THE PARTY TOTAL PROFESSIONAL RECEIPTS RECEIVED AS PER TDS CERTIFICATE (IN RS.). 1. BHILWARA CHITTORGARH DUSS LTD. 45,100/- 2. MURGAN SECURITIES CREDITS 95,000/- 3. GOYAL M.G. GASES (P) LTD. 2,49,000/- 4. KHAITAN CHEMICALS & FERTILIZER 40,000/- 5. BHARAT HYDROPOWER CORPORATION 18,500/- TOTAL 4,47,600/- 6. WHEN I PERUSE THE COPY OF NOTICE U/S 154 ALONG W ITH THE REASONS FOR REOPENING OF ASSESSMENT, IT TURNS OUT THAT THE SUBJECT MATTER OF BOTH THE NOTICES IS SIMILAR, NAMELY, RECEIPTS OF RS.4,47 ,600/-, WHICH IN THE OPINION OF THE AO ESCAPED TAXATION. PROCEEDINGS U/S 154 WERE INITIATED BY MEANS OF NOTICE DATED 23.2.2011. THE ASSESSEE F URNISHED REPLY TO THIS NOTICE, A COPY OF WHICH HAS BEEN PLACED ON PAGE 27 OF THE PAPER BOOK. AS AGAINST THESE PROCEEDINGS U/S 154, TAKING PLACE IN THE YEAR 2011, THE AO INITIATED THE INSTANT RE-ASSESSMENT PROCEEDINGS IN THE YEAR 2013. THE LD. DR WAS REQUIRED TO INTIMATE THE STATUS OF S ECTION 154 PROCEEDINGS ON THE EARLIER DATE OF HEARING AND THE CASE WAS ACCORDINGLY ADJOURNED. TODAY, THE LD. DR SUBMITTED IN THE OPEN COURT THAT HE ITA NO.181/DEL/2016 5 ENQUIRED FROM THE CONCERNED AO ABOUT THE STATUS OF SECTION 154 PROCEEDINGS INITIATED IN THE YEAR 2011, WHO, IN TUR N, STATED THAT NEITHER ANY ORDER HAS BEEN PASSED U/S 154 NOR SUCH PROCEEDI NGS HAVE BEEN DROPPED. THIS SHOWS THAT THE AO INITIALLY INITIATE D RECTIFICATION PROCEEDINGS IN THE YEAR 2011 AND WITHOUT COMPLETING THE SAME, STARTED RE-ASSESSMENT PROCEEDINGS IN 2013 AND, THEREAFTER, COMPLETED THE ASSESSMENT BY MEANS OF ORDER U/S 143(3) READ WITH S ECTION 147. THIS MANIFESTS THAT DURING THE CONTINUATION OF THE PROCE EDINGS U/S 154, THE AO EMBARKED UPON THE SAME ISSUE BY MEANS OF A SEPAR ATE RE-ASSESSMENT PROCEEDINGS WITHOUT CONCLUDING THE EARLIER PROCEEDI NGS INITIATED U/S 154. IT GOES WITHOUT SAYING THAT INITIATION OF TWO PARAL LEL PROCEEDINGS ON A SIMILAR SUBJECT MATTER, CANNOT SUSTAIN. IF FIRST PR OCEEDINGS HAVE BEEN VALIDLY INITIATED, THEN SUCH PROCEEDINGS MUST COME TO AN END FOR MAKING A WAY FOR THE INITIATION OF ANOTHER PROCEEDINGS ON THE SAME SUBJECT MATTER. UNLESS THE EARLIER PROCEEDINGS ARE BURIED, EITHER BY WAY OF AN ORDER ON MERITS OR BY DROPPING THE SAME, NO FRESH S UBSEQUENT PROCEEDINGS ON THE SAME SUBJECT MATTER CAN BE INITI ATED. ITA NO.181/DEL/2016 6 7. ADVERTING TO THE FACTS OF THE INSTSANT CASE, I T IS NOTICED THAT THE RECTIFICATION PROCEEDINGS U/S 154 WERE INITIATED IN THE YEAR 2011 AND THESE WERE STILL ON IN THE YEAR 2013, WHEN THE PROC EEDINGS U/S 147 WERE INITIATED ON THE SAME SUBJECT MATTER. THIS MANIFEST S THAT THE PROCEEDINGS U/S 147 CANNOT STAND DURING THE CONTINUATION OF PRO CEEDINGS U/S 154. EX CONSEQUENTI, THE INITIATION OF RE-ASSESSMENT BY MEANS OF NOTICE U/S 148 AND THE PROCEEDINGS FLOWING THEREFROM ARE HEREBY SE T ASIDE. THE AO IS FULLY EMPOWERED TO GIVE A LOGICAL CONCLUSION TO THE PROCEEDINGS U/S 154 AS PER LAW. 8. IN VIEW OF MY DECISION ON THE INITIATION OF RE-A SSESSMENT PROCEEDINGS, THERE IS NO NEED TO DISPOSE OF THE GRO UNDS TAKEN ON MERITS. 9. IN THE RESULT, THE APPEAL IS ALLOWED IN THE ABOV E TERMS. THE ORDER PRONOUNCED IN THE OPEN COURT ON 24.06.201 6. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED, 24 TH JUNE, 2016. DK ITA NO.181/DEL/2016 7 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.