ACIT, CHENNAI V. M/s. Integrated Enterprises Ltd., CHENNAI

ITA 1836/CHNY/2011

• Counselvise Citation: 183621714 RSA 2011
• Duration Of Justice: 1 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-09-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 14-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAJI P JACOBADDL
• Assessee Lawyers: S SRIDHAR
• Keywords: Tangible material; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE , ACCOUNTANT MEMBER AND SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA NO. 1836/MDS/2011 (ASSESSMENT YEAR: 2001-02) THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-II(3), 121, M.G.ROAD, CHENNAI-600 034. VS. M/S. INTEGRATED ENTERPRISES LTD. 5-A, KENCES TOWERS, 1, RAMAKRISHNA STREET, T.NAGAR, CHENNAI-600 017. PAN: AAACI1509F (APPELLANT) (RESPONDENT) APPELLANT BY : MR. SHAJI P.JACOB, A DDL. CIT RESPONDENT BY : MR. S.SRIDHAR, ADVOCATE DATE OF HEARING : 12 TH SEPTEMBER, 2013 DATE OF PRONOUNCEMENT : 20 TH SEPTEMBER, 2013 O R D E R PER ABRAHAM P.GEORGE, AM : IN THIS APPEAL, FILED BY THE REVENUE, IT IS AGGRIE VED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THE REASSESSMENT PROCEEDINGS INITIATED FOR THE IMPUGNED ASSESSMENT YEAR TO BE INVALID. 2. FACTS APROPOS ARE THAT THE ASSESSEE, TRADING IN FINANCIAL INSTRUMENTS, HAD FILED RETURN OF INCOME FOR THE IMP UGNED ASSESSMENT YEAR ON 29.10.2001 DECLARING LOSS OF ` 37 , 94 , 024/-. AS PER THE TDS CERTIFICATES FILED BY THE ITA NO. 1836/MDS//2011 2 ASSESSEE , A SUM OF ` 1 , 37 , 47 , 3441- WAS RECEIVED FROM M/S . DEUTSCHE BANK . HOWEVER , THE ASSESSEE HAD SHOWN AN I NCOME OF ` 3 2 , 67 , 775/- ONLY . ASSESSMENT WAS COMPLETED ON 29 . 03.2004 AFTER SCRUTINY UNDE R SECTION 143(3) OF THE ACT . ASSESSEE PREFERRED APPEALS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND THEREAFTER BEFORE THE TR I BUNAL AND THE ASSESSING OFFICE R HAD PASSED ORDERS DATED 20 . 09 . 2005 AND 24 . 12 . 2007 RESPECTIVELY, GIVING EFFECT TO THE DIRECTIONS OF THESE AUTHORITIES. ON 31.3.200 8 , A NOTICE UNDER SECT I ON 148 OF THE ACT WAS I SSUED PROPOSING A R EOPEN I NG . R EASON FOR REOPEN I NG WAS SOUGHT BY THE ASSESSEE . SUCH REASON WAS THAT TDS CERTIFICATES ISSUED BY M/S. DEUTSCHE BANK SHOWED A FIGURE OF ` 1 , 37 , 47 , 344/- , AS THE CONTRACTUAL PAYMEN T S EFFECTED BY THEM TO THE ASSESSEE , WHEREAS ASSESSEE HAD SHOWN ONLY ` 32 , 67 , 755 /- AS INCOME FROM THE SAID BANK . THOUGH THE ASSESSEE OBJECTED T O THE REOPENING , THE ASSESSING OFFICER BRUSHED ASIDE SUCH OBJECTIONS AND PROCEEDED WITH THE REA SSESSMENT . THE REASSESSMENT WAS COMPLETED ON 26 . 12 . 2008 BY MAKING AN ADDIT I ON OF THE DIFFERENCE AMOUNT OF ` 1 , 04 , 79 , 580/- . ITA NO. 1836/MDS//2011 3 3. ASSESSEE MOVED IN APPEAL ASSAILING THE ORDER OF THE ASSESSING OFFICER. AS PER THE ASSESSEE, DURING THE COURSE OF ORIGINAL PROCEEDINGS BEFORE THE ASSESSING OFFICER, QUERIES WERE RAISED BY THE ASSESSING OFFICER REQUIRING THE ASSESSEE TO RECONCILE THE DIFFERENCE BETWEEN WHAT WAS SHOWN IN THE TDS CERTIFICATE AND WHAT WAS SHOWN AS INCOME BY IT. FURTHER, AS PER THE ASSESSEE, A REPLY GIVING RECONCILIATION WAS FURNISHED TO THE ASSESSING OFFICER. THE ASSESSING OFFICER HAD THEREAFTER COMPLETED THE ORIGINAL ASSESSMENT CONSID ERING SUCH REPLY. THEREFORE, AS PER THE ASSESSEE, REASSES SMENT PROCEEDINGS WERE INITIATED BASED ON A CHANGE OF OPI NION. ACCORDING TO THE ASSESSEE, REASSESSMENT WAS INITIAT ED AFTER THE END OF FOUR YEARS FROM THE IMPUGNED AY AND IT W AS NECESSARY THAT CONDITIONS MENTIONED IN PROVISO TO S ECTION 147 WAS SATISFIED. THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FACTS MATERIALS TO THE ASSESSM ENT AND TO FURNISH PARTICULARS IN A FULL AND RELEVANT MANNER. THEREFORE, ACCORDING TO THE ASSESSEE, THE REASSESSMENT PROCEED INGS WERE INVALID. ITA NO. 1836/MDS//2011 4 4. THE COMMISSIONER OF INCOME TAX (APPEALS) APPRECIATED THE ABOVE CONTENTIONS. ACCORDING TO HIM , NOTICE UNDER SECTION SECTION 148 HAVING BEEN ISSUED AFTER FOUR YEARS FROM THE END OF THE IMPUGNED ASSESSMENT YEAR, RATIO OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. CHOLAMANDALAM INVESTMENT & FINANCE COMPANY LTD. [30 9 ITR 110 (MAD)] CLEARLY APPLIED. HE HELD THAT SUCH REASSESSMENT PROCEEDINGS WERE INVALID . 5. NOW BEFORE US , THE LEARNED DEPARTMENTAL REPRESENTATIVE ASSAILING THE ORDER OF THE COMMISSIO NER OF INCOME TAX (APPEALS) SUBMITTED THAT MERE PRODUCTION OF DETAILS BEFORE THE ASSESSING OFFICER FROM WHICH MAT ERIAL FACTS C OULD HAVE BEEN DISCOVERED WITH DUE DILIGENCE WOULD NOT AMOUNT TO DISCLOSURE NECESSARY UNDER THE ACT . AS PER THE DEPARTMENTAL REPRESENTATIVE, ASSESSEE HAD FAILED TO GIVE DETAILS OF PAYMENTS IT RECEIVED FROM M/S. DEUTSCHE BANK. RELIANCE WAS ALSO PLACED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF M/S . DALMIA P.LTD. VS. CIT IN W.P . (CIVIL) NO.6205 OF 2010 DATED 26 . 9 . 2011. ITA NO. 1836/MDS//2011 5 6. PER CONTRA , THE COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 7. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. IT I S AN ADMITTED POSITION THAT REASSESSMENT WAS INITIATED ON ACCOUNT OF DIFFERENCE IN THE AMOUNTS M ENTIONED IN THE TDS CERTIFICATES SUBMITTED BY M/S . DEUTSCHE BANK AND WHAT WAS ACCOUNTED BY THE ASSESSEE AS INCOME RECEIV ED FROM M/S. DEUTSCHE BANK . IN THE ORIGINAL ASSESSMENT COMPLETED ON 29 . 03.2004 , WE FIND THAT THE ASSESSING OFFICER HAS DWELLED ON THIS ISSUE . RELE VANT PART OF OR I G I NAL ASSESSMENT ORDER EXTRACTED BY THE COMMISSIONER OF I NCOME TAX (APPEALS) AT PAGE 6 OF HIS ORDER AND THIS IS R EPRODUCED BELOW:- ' THE ASSESSEE CLAIMED CREDIT FOR TDS FOR AN AMOUNT OF ` 3 , 03 , 0621- FROM TDS CERTIFICATE ISSUED BY DEUTSCHE BANK IN RESPECT OF SERVICES RENDERED BY THE ASSESSEE. HOWEVER , I N THE COURSE OF HEARING , IT WAS STATED BY THE REPRESENTATIVE THAT DEUTSCHE BANK PAID AN AMOUNT OF ` 37 , 47 , 355/- AND THE SAME HAS BEEN MENTIONED IN THE TDS. WHEREAS , THE REPRESENTATIVE STATED THAT OUT OF THE ABOVE SUM , AN AMOUNT OF ` 67 , 43 , 754/- HAS BEEN PAID TO M/S. SUNDARAM FINANCE AND PRICE WATERHOUSE AS DIRECTED BY THE DEUTSCHE BANK . HOWEVER , I T WAS STATED T HAT DEUTSCHE BANK DEDUCTED TAX ON THE ENTIRE AMOUNT . THE REPRESENTATIVE FURTHER STATED ITA NO. 1836/MDS//2011 6 THAT THE I NCOME RECEIVED DUR I NG THE YEAR FROM THE DEUTSCHE BANK IS ` 32,67,775/- ONLY . ACCORDINGLY , FOR THE ASSESSMENT YEAR 2001-02 , CREDIT FOR TDS IS TO BE GIVEN FOR AN AMOUNT OF ` 72 , 038/- ONLY . 8. IT IS , THEREFORE, CLEAR THAT THE ASSESSING OFFICER HAD CONSIDERED THE ASPECT OF THE DIFFERENCE BETWEEN THE AMOUNTS SHOWN IN THE TDS CERTIFICATES ISSUED BY M/S . DEUTSCHE BANK AND WHAT WAS ACCOUNTED BY THE ASSESSE E . EXPLANATION IN THIS REGARD WAS FURNISHED BY THE ASS ESSEE. ONCE A QUERY WAS RAISED AND A REPLY WAS GIVEN AND T HE EXTRACT OF SUCH REPLY WAS STATED IN THE ASSESSMENT ORDER , WE CANNOT SAY THAT THE ASSESSING OFFICER HAD NOT APPLI ED HIS MIND . HE HAD INDEED APPLIED HIS MIND AND CAME TO A CONCLUSION THAT THE DIFFERENCE STOOD RECONCILED. TH ERE IS NO NEW TANGIBLE MATERIAL AVAILABLE WITH THE ASSESSING OFFICER FOR COMING TO A CONCLUSION THAT RECONCILIATION GIVEN BY THE ASSESSEE WAS WRONG OR INCORRECT . BASED ON THE VERY SAME SET OF . RECORDS , HE HAD FORMED A DIFFERENT OPINION FOR INITIATING A REASSESSMENT . CHANGE OF OPINION CANNOT BE A BASIS FOR REOPENING AS HELD BY THE HON'BLE FULL BENCH OF THE DELHI HIGH COURT IN THE CASE OF CIT VS . KELVINATOR OF INDIA LTD. ( 256 ITR ITA NO. 1836/MDS//2011 7 01) WHICH WAS AFFIRMED LATER BY THE HON'BLE SUPREME COURT IN CIT VS . KELVINATOR OF INDIA LTD . (320 ITR 561). ESPECIALLY SO, WHERE FOUR YEARS HAD ELAPSED FROM THE END OF THE ASSESSMENT YEAR. THERE IS NO CASE FOR THE REVENUE T HAT THE ASSESSEE HAD FAILED TO FURNISH FULL AND TRUE INFORM ATION AS REQUIRED UNDER THE ACT . THEREFORE, WE ARE OF THE OPINION THAT THE COMMISSIONER OF INCOME TAX (APPEALS) WAS JUSTIF IED IN QUASHING THE REOPENING. WE DO NOT FIND ANY INFIRMIT Y IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) A ND UPHOLD THE SAME. 9. THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, T HE 20 TH DAY OF SEPTEMBER, 2013 AT CHENNAI. SD/- SD/- (SATBEER SINGH GODARA ) (AB RAHAM P.GEORGE) JUDICIAL MEMBER ACCOU NTANT MEMBER CHENNAI, DATED THE 20 TH SEPTEMBER, 2013. SOMU COPY TO: (1) APPELLANT (4 ) CIT(A) (2) RESPONDENT (5 ) D.R. (3) CIT (6 ) G.F.