ACIT, Madurai V. M/s. The MU 54 Usilampatti Primary Agricultural Co-operative Rural Development Bank Limited, Udamalpet

ITA 1816/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61012 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 10-04-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 11-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: V SUBBARAYAN DCIT RETD
• Keywords: Reopening of assessment; Audit objection; Difference of opinion; Assessment record; Change of opinion
• Section: 43B; 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI [BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER] I.T.A.NO. 1816/MDS/2011 ASSESSMENT YEAR : 2004-05 THE ACIT CIRCLE II MADURAI VS M/S THE MU 54 USILAMPATTI PRIMARY AGRICULTURAL CO-OPERATIVE RURAL DEVELOPMENT BANK LTD NO.52/67 OLD POST OFFICE STREET USILAMPATTI 625532 [PAN AAAAT7756P] (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIRUDH RAI, CIT RESPONDENT BY : SHRI V.SUBBARAYAN, DCIT(RETD.) DATE OF HEARING : 10-04-2012 DATE OF PRONOUNCEMENT : 20-04-2012 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVEN UE AGAINST THE ORDER OF THE LD.CIT(A)-I, MADURAI, DATED 12.08.2011. 2. GROUND NOS. 1 & 6 OF THE APPEAL ARE GENERAL IN NATU RE AND HENCE, REQUIRES NO ADJUDICATION BY US. 3. GROUND NOS.2 TO 4 OF THE APPEAL ARE DIRECTED AGAIN ST THE ORDER OF THE LD.CIT(A) HOLDING THAT THE REOPENING OF THE ASSESSMENT IS BAD IN LAW. I.T.A.NO.1816/11 :- 2 -: 4. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A P RIMARY AGRICULTURAL CO-OPERATIVE RURAL DEVELOPMENT BANK IN USILAMPATTI. THE ASSESSEE FILED RETURN OF INCOME FOR ASSESSMENT YEAR 2004-05 ON 1.11.2004 SHOWING LOSS OF ` 12,14,680/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 21.11.2006 SHOW ING THE LOSS AT ` 1,06,78,161/- CLAIMED BY THE ASSESSEE IN ITS LETTE R DATED 10.11.2006. THEREAFTER THE ASSESSMENT WAS REOPENED BY ISSUE OF NOTICE U/S 148 OF THE ACT ON 18.6.2008. IN THE RE-ASSESSMENT FRAMED, ONLY AMENDMENT IN THE ORIGINAL ORDER WAS BY WAY OF DISALLOWING ` 1,04,85,088/- U/S 43B OF THE ACT FOR THE REASON THAT THE INTEREST WAS NOT PAID BEFORE THE DUE DATE FOR FILING OF RETURN OF INCOME AND DETERM INED THE LOSS AT ` 1,93,073/- VIDE ORDER DATED 29.12.2009. 5. THE ASSESSEE FILED APPEAL BEFORE THE LD.CIT(A) OB JECTING TO THE REOPENING OF ASSESSMENT AFTER SCRUTINY ASSESSME NT WAS COMPLETED. THE LD.CIT(A) CALLED FOR THE ASSESSMENT RECORDS AN D FOUND THEREFROM THAT THE REOPENING OF ASSESSMENT WAS SUBSEQUENTLY D ONE AT THE BEHEST OF OBJECTION RAISED BY AUDIT AUTHORITIES AND THAT THE RELEVANT IT RECORDS INDICATED THAT AUDIT OBJECTION FORMED THE B ASIS FOR REOPENING OF ASSESSMENT. THE LD.CIT(A), THEREFORE, HELD THAT THE ORIGINAL SCRUTINY ASSESSMENT WAS COMPLETED ON THE SAME SET OF FACTS A ND THAT NO NEW INFORMATION WAS AVAILABLE WITH THE ASSESSING OFFICE R THAT LED TO FORMING OF OPINION FOR ESCAPEMENT OF INCOME FOR RE-ASSESSME NT PURPOSES AND I.T.A.NO.1816/11 :- 3 -: THEREFORE, THE REOPENING OF THE ASSESSMENT WAS NO T PROPER. THE LD.CIT(A) RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS BHANJI LAVJI [1971] 79 ITR 582(SC) WHERE IT WAS HELD THAT WHEN THE PRIMARY FACTS NECESSARY FOR ASSESSMENT ARE FULLY AND TRULY DISCLOSED, THE INCOME TAX OFFICER WILL NOT BE ENTIT LED ON CHANGE OF OPINION TO COMMENCE PROCEEDINGS FOR RE-ASSESSMENT. SIMILARLY, IF THE INCOME TAX OFFICER HAS FORMED A WRONG LEGAL INFEREN CE FROM THE FACTS DISCLOSED THEN ALSO HE WILL NOT ON THAT ACCOUNT BE COMPETENT TO COMMENCE RE-ASSESSMENT PROCEEDINGS. THE LD.CIT(A) FURTHER RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CAS E OF INDIAN AND EASTERN NEWSPAPER SOCIETY VS CIT [1979] 119 ITR 996 (SC) WHERE IT HAS BEEN HELD THAT AUDIT OPINION WAS STILL AN OPINI ON AND NOT INFORMATION GOOD ENOUGH TO JUSTIFY REOPENING OF ASS ESSMENT WITHIN THE TIME LIMIT PRESCRIBED UNDER THE ACT. 6. THE LD.CIT/DR RELIED ON THE GROUNDS OF APPEAL TAKEN BY THE REVENUE. NO SPECIFIC ERROR IN THE ABOVE FINDING OF THE LD.CIT(A) WAS POINTED OUT BY THE LD.CIT/DR. THE LD.CIT/DR COULD NOT POINT OUT ANY NEW INFORMATION OR MATERIAL WHICH CAME TO THE KNOWL EDGE OF THE ASSESSING OFFICER AND WHICH WAS NOT AVAILABLE ON RE CORD AT THE TIME OF COMPLETION OF ORIGINAL ASSESSMENT U/S 143(3) OF TH E ACT. WE, THEREFORE, DO NOT FIND ANY GOOD AND JUSTIFIABLE REA SON TO INTERFERE WITH I.T.A.NO.1816/11 :- 4 -: THE FINDING OF THE LD.CIT(A). IT IS CONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 7. THE ONLY OTHER GROUND TAKEN BY THE REVENUE IN THIS APPEAL IS DIRECTED AGAINST THE DELETION OF ` 1,04,85,088/- WHICH WAS DISALLOWED BY INVOKING THE PROVISIONS OF SECTION 43 B OF THE ACT BY THE ASSESSING OFFICER. THE LD.CIT(A) DELETED THIS DIS ALLOWANCE BY OBSERVING THAT INTEREST IN QUESTION WAS PAYABLE TO AN INSTITUTION WHICH IS NOT COVERED BY THE PROVISIONS OF SECTION 43B OF THE ACT. THE LD.CIT/DR COULD NOT BRING ANY MATERIAL BEFORE US TO SHOW THAT INTEREST IN QUESTION WAS PAYABLE TO AN INSTITUTION WHICH WAS COVERED BY THE PROVISIONS OF SECTION 43B OF THE ACT. MOREOVER, AS WE HAVE ALREADY FOUND THAT REOPENING OF ASSESSMENT IN THE INSTANT C ASE WAS BAD IN LAW, WE DO NOT FIND ANY FORCE IN THIS GROUND OF APPEAL O F THE REVENUE. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 20-04-2012. SD/- SD/- (CHALLA NAGENDRA PRASAD) JUDICIAL MEMBER (N.S.SAINI) ACCOUNTANT MEMBER DATED: 20 TH APRIL, 2012 RD COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR