Income Tax Officer Ward -2(2), RAIPUR (CG) V. Shri. Gurnam Singh Chawala, MAHASAMUND

ITA 194/BIL/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1386 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 27-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Assessee Lawyers: AMIT MALOO
• Keywords: Reason to believe; Reassessment proceedings
• Section: 148; 144

Judgement Text

ITA NO . 194 / BLPR /201 1 ASSESSMEN T Y EAR: 20 06 - 07 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, SMC , RAIPUR [CORAM : PRAMOD KUMAR AM ] ITA NO . 194 / BLPR /201 1 AS SESSMENT Y EAR : 20 06 - 07 INCOME TAX OFFICER - 2(2) , RAIPUR (C.G.) .APPELLANT VS. GURNAM SINGH CHAWLA ... . RESPONDENT STATION PARA, WARD NO.9, MAHASAMUND (C.G.). [P AN: A GDPC 1100 C ] APPEARANCES BY: D.K, JAIN , FOR THE APPELLANT AMIT MALOO , F OR THE RESPONDENT DATE OF CONCLUDING THE HEARING : JUNE 2 0 TH , 201 6 DATE OF PRONOUNCING THE ORDER : JUNE 22 ND , 201 6 O R D E R 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CALLED INTO QUESTION CORRECTNESS OF THE ORDER DATED 04.07.2011 PASSED BY THE LEARNED CIT(A), IN THE MATTER OF ASSESSMENT UNDER SECTION 144 R.W.S. 147 OF THE IN COME TAX ACT, 1961 ( THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR 20 06 - 07 2. GRIEVANCES RAISED BY THE ASSESSING OFFICER ARE AS FOLLOWS : - 1. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS RIGHT IN HOLDING THE INITIATION OF ACTION U/S 147 OF THE ACT BY THE ASSESSING OFFICER WAS BAD IN LAW. ITA NO . 194 / BLPR /201 1 ASSESSMEN T Y EAR: 20 06 - 07 PAGE 2 OF 4 2. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS.35,04,805/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF INCOME SUPPRES SED BY THE ASSESSEE FROM CONTRACT BUSINESS. 3. THE ORDER OF THE LD. CIT(A) IS ERRONEOUS BOTH IN LAW AND ON FACTS. 3. SO FAR AS THE GRIEVANCE AGAINST THE LD. CIT(A) S QUASHING THE REASSESSMENT PROCEEDINGS ARE CONCERNED, THE RELEVANT M ATERIAL FACTS ARE LI KE THIS. I N THE PRESENT CASE, THE ASSESSMENT WAS REOPENED BY THE ASSESSING OFFICER ON THE BASIS O F REASONS RECORDED AS FOLLOWS : - THE ASSESSEE IS SHOWING INCOME OF RS.1,08,211/ - INCOME FROM TRANSPORT COMMISSION OF RS.2,40,320/ - . IT IS SEEN FROM THE FOR M NO.16A ATTACHED TO THE RETURN OF INCOME THAT ASSESSEE HAD RECEIVED PAYMENT OF RS.37,45,125 ON ACCOUNT OF TRANSPORTATION. THUS THE ASSESSEE HAS NOT FULLY DISCLOSED THE TRANSPORT RECEIPTS IN THE RETURN OF INCOME. IN VIEW OF THE FACTS AS DISCUSSED ABOVE, I HAVE REASON TO BELIEVE THAT AN AMOUNT OF RS.35,04,805/ - I.E. THE DIFFERENCE BETWEEN THE RECEIPTS SHOWN IN THE R ETURN OF INC O ME BY THE ASSESSEE AND ACTUAL RECEIPTS RECEIVED BY THE ASSESSEE, WHICH IS CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT. 4. THE ASSES SEE, AGGRIEVED INTER ALIA BY THE REOPENING OF ASSESSME NT , CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(A). THE GRIEVANCE OF THE ASSESSEE, AGAINST REOPENING , WAS UPHELD BY THE L EARNED CIT(A). WHILE DOING SO, THE L EARNED CIT(A) HAS OBSERVED AS FOLLO WS : - 6. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AND SUBMISSIONS OF THE APPELLANT WITH RESPECT TO THE ALL THE GROUNDS OF APPEAL. I FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE THAT THE ASSESSEE HAS PRIMA FACIE DISCLOSED THE FACT STATING THAT HE IS ONLY COMMISSION AGENT AND TRANSPORTATION RECEIPTS COLLECTED HAS BEEN PAID BACK TO TRUCK OWNERS AFTER RETAINING COMMISSION. I AM OF FIRM OPINION THAT THE AO HAS INITIATED THE PROCEEDINGS U/S 147 WITH HAVING A REASON TO SUSPECT AND NOT ON THE BASIS OF REASON TO BELIEVE. THE AO SHOULD HAVE FULFILLED THE REQUIREMENTS OF LAW BEFORE TAKING ACTION U/S 147. IN THIS CASE NO LIVE LINK BETWEEN INFORMATION/MATERIAL POSSESSED BY AO AND THE REASONABLE BELIEVE FORMED THAT INCOME HAS ESCAPED IS ESTABLISHED. THE AO H AS FURTHER NOT COMMUNICATED THE REASON BEFORE COMPLETION OF ASSESSMENT AND SEND ITA NO . 194 / BLPR /201 1 ASSESSMEN T Y EAR: 20 06 - 07 PAGE 3 OF 4 NOTICE U/S 148 WHICH IS BAD IN LAW. IN THE CASE OF ACTION U/S 147, THE AO IS BOUND TO FURNISH THE REASONS WITHIN A REASONABLE PERIOD OF TIME AS HELD IN GKN DRIVESHAFTS 259 ITR1 9(SC). DESPITE SERVICE OF S 148 IN TIME, NON SUPPLY OF REASONS FOR REOPENING WITHIN TIME RENDERS THE REOPENING VOID. THE AO ALSO MENTIONED IN THE ASSESSMENT ORDER THAT THE APPELLANT HAD NON CO - OPERATION ATTITUDE WHICH ON THE FACTS AND CIRCUMSTANCES OF TH E CASE AND CONSIDERING THE ARGUMENTS OF THE APPELLANT IS NOT FOUND TO BE CORRECT AND ADDITION MADE UNDER THIS CONTENTION BY THE AO IS UNCALLED FOR. THE AO HAS ERRED IN CONSIDERING THE ENTIRE RECEIPT AS INCOME WHILE ONLY THE COMMISSION RECEIVED AS TRANSPORT AGENT IS TAXABLE AS INCOME. HENCE, IN THIS CASE THE INITIATION OF ACTION U/S 147 IS BAD IN LAW AS WELL AS NON COMMUNICATION OF REASON BEFORE COMPLETION OF ASSESSMENT RENDERS THE NOTICE BAD IN LAW AND FURTHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE ADDI TION OF RS 35,04,805/ - ON ACCOUNT OF SUPPRESSED INCOME FROM CONTRACT BUSINESS IS UNJUSTIFIED, UNWARRANTED AND UNCALLED FOR. HENCE, THE SAME IS DELETED. 5. THE ASSESSING OFFICER IS AGGRIEVED OF THE RELIEF SO GIVEN BY THE LEARNED CIT(A) AND IS IN APPEAL B EFORE ME . 6. I HAVE HEARD THE RIVAL CONTENTIONS , PERUSED THE MA T ERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CA S E IN THE LI GHT OF APPLICABLE LEGAL POSITION . ON A PERUSAL OF THE REASONS RECORDED FOR THE REOPENING OF THE ASSESSMENT , I FIND THAT THE ASS ESSING OFFICER HAS PROCEEDED ON THE BASIS THAT ENTIRE RECEIPTS ON ACCOUNT OF TRANSPORTATION CONSTITUTES TRANSPORT COMMISSION AND IT IS THIS TREATMENT WHICH APPARENTLY JUSTIFIED ASSESSING OFFICER S BELIEF FOR INCOME OF RS.35 ,04,805/ - , I.E. DIFFERENCE BETWEE N TRANSPORTATION RECEIPTS OF RS.37,45,125 / - AND TRANSPORT COMMISSION DISCLOSED IN THE RETURN AT RS.2,40,320/ - , HAS ESCAPED THE ASSESSMENT. HOWEVER, AS A CAREFUL LOOK ON THE MATERIAL ON RECORD WOULD SHOW WHAT IS DISCLOSED AS TRANSPORT COMMISSION IN THE INC OME TAX RETURN AT RS.2,40,320/ - IS NOT RECEIPT FROM TRANSP ORTATION BUSINESS BUT THE DIFFERENCE BETWEEN AMOUNT RECEIVED ON ACCOUNT OF TRANSPORTATION AND THE AMOUNT ACTUALLY PAID TO THE TRUCK OWNERS. CLEARLY, THEREFORE, THE ASSESSING OFFICER S INFERENCE THA T AMOUNT OF RS.35 ,04,805/ - HAS ESCAPED ASSESSMENT IS DEVOID OF ANY LOGIC O R LEGAL LY SUSTAINABLE REASON. A COPY OF THE COMPUTATION OF INCOME ATTACHED TO ITA NO . 194 / BLPR /201 1 ASSESSMEN T Y EAR: 20 06 - 07 PAGE 4 OF 4 THE RETURN, WHICH WAS ALSO FILED BEFORE ME, SHOWS THAT ONLY THE TRANSPORT COMMISSION HAS BEEN TAKEN INT O ACCOUNT IN THE COMPUTATION OF BUSINESS WHICH ESSENTIALLY IS DIFFERENT FROM RECEIPTS ON ACCOUNT OF TRANSP ORTATION . IN THIS VIEW OF THE MATTER, THE REASONS FOR REOPENING THE ASSESSMENT CANNOT BE SUSTAINED IN LAW. I, THEREFORE, APPROVE THE CONCLUSIONS ARR IVED AT BY THE LEARNED CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 7. IN THE RESULT, APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JUNE , 2016. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: THE 22 ND DAY OF JUNE, 2016 . PBN/* COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR