M/s. Polaris Financial Technology Limited, CHENNAI V. ACIT, CHENNAI

ITA 1908/CHNY/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7695 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2003-2004
• Appeal Filed On: 26-10-2012
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA
• Assessee Lawyers: R VIJAYARAGHAVAN
• Keywords: Reopening of assessment; Assessment record; Revised return
• Section: 143(3); 147; 148; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NOS.1908 & 1909/MDS/2012 / ASSESSMENT YEARS : 2003-04 AND 2004-05 M/S POLARIS FINANCIAL TECHNOLOGY LTD [FORMERLY KNOWN AS POLARIS SOFTWARE LAB LTD.) 244, CAREX CENTER, ANNA SALAI CHENNAI 600 006 VS. THE ASSTT. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE V CHENNAI [PAN AAACP 4341 EXPENDITURE] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI R.VIJAYARAGHAV AN, ADVOCATE /RESPONDENT BY : SHRI PATHLAVATH PEERYA, CIT / DATE OF HEARING : 07 - 01 - 2016 ! / DATE OF PRONOUNCEMENT : 18 - 0 3 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THESE APPEALS OF THE ASSESSEE ARE DIRECTED AGAINS T SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) -V, CHENNAI, DATED 31.7.2012, FOR ASSESSMENT YEARS 2003-04 AND 2004-05. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN BOTH THE A PPEALS, WE HEARD THEM TOGETHER AND DISPOSING OF THE SAME BY THIS CO MMON ORDER. ITA NO.1908 & 1909/12 :- 2 -: 2. SHRI R.VIJAYARAGHAVAN, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE FIRST ISSUE ARISES FOR CONSIDERA TION IN BOTH THE APPEALS IS REOPENING OF ASSESSMENT U/S 147 OF THE ACT. 3. ACCORDING TO THE LD. COUNSEL, FOR THE ASSESSMENT YE AR 2003- 04, THE ASSESSEE FILED THE RETURN OF INCOME ON 28. 11.2003. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT AND INTIMATION WAS ISSUED ON 12.3.2004. THE ASSESSEE FILED A REVISED RETURN ON 5.1.2005. SUBSEQUENTLY, THE ASSESSING OFFICER COMPLETED THE A SSESSMENT U/S 143(3) R.W.S 92CA OF THE ACT ON 29.3.2006. THEREAF TER, THE ASSESSING OFFICER FOUND THAT THE INCOME OTHERWISE CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT ON VERIFICATION OF THE MATERIAL AVAILABL E ON RECORD, THEREFORE, HE ISSUED NOTICE U/S 148 OF THE ACT ON 26.3.2010. 4. SIMILARLY, FOR ASSESSMENT YEAR 2004-05, THE ASSESS EE FILED THE RETURN OF INCOME ON 29.10.2004. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT AND INTIMATION WAS ISSUED ON 30.3 .2005. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED U/S 143 (3) R.W.S 92CA OF THE ACT BY AN ORDER DATED 29.12.2006. THEREAFTE R, THE ASSESSING OFFICER ISSUED NOTICE U/S 148 OF THE ACT ON 29.3.2 010 FOR REOPENING OF THE ASSESSMENT. ACCORDING TO THE LD. COUNSEL, IN B OTH THE YEARS, THE ASSESSMENT WAS COMPLETED U/S 143(3) AND FOUR YEARS PERIOD EXPIRED FROM THE END OF THE RELEVANT ASSESSMENT YEARS. FOR THE ASSESSMENT ITA NO.1908 & 1909/12 :- 3 -: YEAR 2003-04, THE NOTICE U/S 148 WAS ISSUED ON 26. 3.2010 AND FOR ASSESSMENT YEAR 2004-05, NOTICE WAS ISSUED ON 29.3. 2010. FOR BOTH THE ASSESSMENT YEARS THE NOTICE U/S 148 FOR REOPEN ING OF THE ASSESSMENT WAS ISSUED BEYOND FOUR YEARS FROM THE EN D OF THE RELEVANT ASSESSMENT YEAR. ACCORDING TO THE LD. COUNSEL, THE RE WAS NO NEGLIGENCE ON THE PART OF THE ASSESSEE IN FURNISHI NG ALL THE REQUIRED PARTICULARS FOR COMPLETING THE ASSESSMENT. IN FACT , THE ASSESSING OFFICER, AFTER VERIFYING THE DOCUMENTS FILED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS, FOUND THAT THE IN COME ESCAPED ASSESSMENT. THEREFORE, THE REOPENING OF ASSESSMENT AFTER FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IS BAR RED BY LIMITATION. HENCE, THE ASSESSMENTS CANNOT STAND IN THE EYE OF L AW. 5. ON THE CONTRARY, SHRI PATHLAVATH PEERYA, LD. DEPART MENTAL REPRESENTATIVE SUBMITTED THAT MERE PRODUCTION OF BO OKS OF ACCOUNT AND OTHER DOCUMENTS BEFORE THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PROCEEDINGS DOES NOT IMPLY THAT THE ASS ESSEE HAS FULLY AND TRULY DISCLOSED ALL THE MATERIAL FACTS BEFORE T HE ASSESSING OFFICER. REFERRING TO EXPLANATION 1 TO SEC. 147, THE LD. DR SUBMITTED THAT MERE PRODUCTION OF BOOKS OF ACCOUNT OR OTHER EVIDENCE WO ULD NOT BE CONSIDERED AS PRODUCING ALL THE MATERIAL FACTS RELE VANT FOR COMPLETING THE ASSESSMENT. IN VIEW OF EXPLANATION 1 TO SEC. 1 47, ACCORDING TO THE LD. DR, THE ASSESSING OFFICER HAS RIGHTLY REOPENED THE ASSESSMENT. ITA NO.1908 & 1909/12 :- 4 -: 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FI RST PROVISO TO SEC. 147 OF THE ACT CLEARLY SAYS THAT WHEN THE ASSESSMEN T WAS COMPLETED U/S 143(3), NO ACTION SHALL BE TAKEN AFTER EXPIRY O F FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS ANY INCO ME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN U/S 139 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR COMPLETING THE ASSESSMENT. IN THE CASE BEFORE US, FOR BOTH THE AS SESSMENT YEARS, THE ASSESSING OFFICER CLEARLY SAYS THAT SUBSEQUENT TO C OMPLETION OF ASSESSMENT U/S 143(3) OF THE ACT, ON VERIFICATION OF THE AVAILABLE DOCUMENTS SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, FOUND THAT THE INCOME OTHERWISE CHARGEABLE TO TAX H AS ESCAPED ASSESSMENT. THE ASSESSING OFFICER HAS NOT RECEIVED ANY NEW MATERIAL SUBSEQUENT TO THE COMPLETION OF THE ASSESSMENT. TH E MATERIAL ALREADY FILED BY THE ASSESSEE WAS VERIFIED BY THE ASSESSIN G OFFICER SUBSEQUENT TO COMPLETION OF ASSESSMENT U/S 143(3) AND CAME TO THE CONCLUSION THAT INCOME OTHERWISE CHARGEABLE TO TAX ESCAPED ASS ESSMENT. THEREFORE, IT IS OBVIOUS THAT THERE WAS NO NEGLIGEN CE ON THE PART OF THE ASSESSEE. IF AT ALL THERE WAS ANY NEGLIGENCE, IT I S ON THE PART OF THE ASSESSING OFFICER IN NOT VERIFYING THE MATERIAL FIL ED BY THE ASSESSEE. IN VIEW OF FIRST PROVISO TO SEC. 147 OF THE ACT, THIS TRIBUNAL IS OF THE ITA NO.1908 & 1909/12 :- 5 -: CONSIDERED OPINION THAT UNLESS THERE IS ANY NEGLIGE NCE ON THE PART OF THE ASSESSEE IN PRODUCING THE RELEVANT MATERIAL, THE ASSESSMENT CANNOT BE REOPENED AFTER EXPIRY OF FOURS FROM THE E ND OF THE RELEVANT ASSESSMENT YEAR. IN THE CASE BEFORE US, FOR BOTH T HE ASSESSMENT YEARS, THE FOUR YEARS PERIOD HAS EXPIRED AND THERE WAS NO NEGLIGENCE ON THE PART OF THE ASSESSEE IN PRODUCING THE MATE RIAL BEFORE THE ASSESSING OFFICER. THIS TRIBUNAL IS OF THE CONSID ERED OPINION THAT WHEN THE ASSESSEE HAS PRODUCED ALL THE RELEVANT MA TERIAL AND THE ASSESSING OFFICER, ON THE BASIS OF THE MATERIAL FIL ED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, CAME T O THE CONCLUSION THAT THE INCOME OTHERWISE CHARGEABLE HAS ESCAPED AS SESSMENT, THERE IS JUSTIFICATION FOR REOPENING THE ASSESSMENT AFTE R EXPIRY OF FOUR YEARS. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT REOPENING OF ASSESSMENT FOR BOTH THE ASSESSMENT YEA RS IS BARRED BY LIMITATION. ACCORDINGLY, THE CONSEQUENTIAL ORDERS PASSED BY THE ASSESSING OFFICER CANNOT STAND IN THE EYE OF LAW. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND T HE APPEALS OF THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE ALLOWED. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ST AND ALLOWED. ITA NO.1908 & 1909/12 :- 6 -: ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH MARCH, 2016, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 18 TH MARCH, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF