Asst. Commissioner of Income Tax, Circle-1, Kadapa V. P.Maheswara Reddy , Kadapa

ITA 1944/Hyd/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7074 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 22-07-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 24-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S RAMA RAO
• Keywords: Difference of opinion; Assessment record; Revenue expenditure
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD. BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L . P . SAHU, ACCOUNTANT MEMBER (THROUGH VIRTUAL HEARING) ITA NO. 1944 /HYD/20 18 0 (ASSESSMENT YEAR : 20 09 - 10 ) ASST. COMMISSIONER OF INCOME TAX, HYDERABAD. ..APPELLANT. VS. SHRI P. M A HESWARA REDDY, KADAPA . ..RESPONDENT. APPELLANT BY : SHRI ANIL SANT (D.R.) RESPONDENT BY : SHRI S. RAMA RAO (A .R.) DATE OF HEARING : 2 2 .07. 2021. DATE OF PRONOUNCEMENT : 24 .0 8 .2021. O R D E R PER SHRI S.S. GODARA, J.M. : THIS ASSESSEES APPEAL FOR ASST. YEAR 20 09 - 10 ARISES FROM THE COMMISSIONER OF INCOME TAX (APPEALS) , KURNOOL S ORDER DT. 3.7 .20 18 PASSED IN CASE NO. 053/CIT(A)/KNL/2016 - 17 IN PROCEEDINGS UNDER SECTION 143(3) OF INCOME TAX ACT, 1961 (THE ACT). 2 ITA NO. 1944 /HYD/20 18 HEARD BOTH THE PARTIES . C ASE FILE PERUSED. 2. WE NOTICE AT THE OUTSET WITH THE ABLE ASSISTANCE OF BOTH THE PARTIES THAT REVENUES SOLE SUBSTANTIVE GRIEVANCE PLEADED IN THE INSTANT APPEAL SEEKS TO REVERSE THE CIT(A)S ACTION QUASHING THE IMPUGNED REOPENING VIDE FOLLOWING DETAILED DISCUSSION : AO FOR INITIATION OF PROCEEDINGS U/ 147. THE CONTENTION OF THE LEARNED AR IS THAT THE AO ENTERTAINED A DIFFERENCE OF OPINION WITHOUT ANY 3 ITA NO. 1944 /HYD/20 18 MATERIAL ON RECORD AND INITIATED PROCEEDINGS U/S 147 OF THE I.T.ACT. THEREFORE, THE APPELLANT REQUESTED THAT THE INITI ATION OF PROCEEDINGS U/S 147 BE HELD AS INVALID. 6. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND THE CASE LAW RELIED UPON BY THE LEARNED AR. I FIND THAT THE ORIGINAL ASSESSMENT WAS MADE U/S 143(3). NOTICE U/S 148 WAS ISSUED AFTER A PERIOD OF FOUR YEAR S. NO INFORMATION CAME TO THE KNOWLEDGE OF THE AO AFTER COMPLETION OF THE REGULAR ASSESSMENT. KEEPING IN VIEW, THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF GIRILAL & CO. VS. ITO & OTHERS (387 ITR 122). IN THIS CASE THE HON'BLE SUPREME COURT HELD TH AT THERE IS NO FINDING OF THE A O THAT THE INFORMATION WAS NOT AVAILABLE IN THE ASSESSMENT RECORDS OR THAT THERE WAS A FAILURE OF THE ASSESSEE TO DISCLOSE F U LLY AND TRULY ALL MATERIAL FACTS BEFORE HIM. FURTHER, THE DECISION OF H O N'BLE ANDHRA PRADESH HIGH CO URT IN THE CASE OF MAHALAXMI MOTORS LTD VS, DY.CIT REPORTED IN (2004) (265 ITR 53) HAS HELD THAT WHERE ALL THE FACTS WERE AVAILABLE BEFORE THE ASSESSING AUTHORITY WHILE MAKING TE ORIGINAL ASSESSMENT AND THE ASSESSING AUTHORITY ALLOWED THE CLAIM, THE DEPART MENT CANNOT REOPEN THE ASSESSMENT EVEN IF THERE IS LOSS OF REVENUE OR EVEN IF LEGAL INFERENCES DRAWN BY THE ASSESSEE IS ERRONEOUS IN THE FIRST PLACE WHEN FULL AND TRUE DISCLOSURE OF THE FACTS WAS MADE BY THE ASSESSEE. I ALSO FIND THAT THE SEIGNIORAGE CHARG ES IS A REVENUE EXPENDITURE INCURRED BY A CONTRACTOR. I REPRESENTS THE AMOUNT PAID TO THE GOVERNMENT FOR OBTAINING PERMISSIONS TO MINE GRANITE STONE FOR THE PURPOSE OF CONSTRUCTION. THIS AMOUNT IS A REVENUE ITEM OF EXPENDITURE AND WAS CORRECTLY ALLOWED BY 4 ITA NO. 1944 /HYD/20 18 THE AO AT THE TIME OF COMPLETION OF THE ASSESSMENT U/S 143(3) OF THE I.T. ACT ON 22.03.2011. 7. IN VIEW OF THE ABOVE AND IN VIEW OF THE SUBMISSIONS MADE BY THE LEARNED AR, I HOLD THAT THE INITIATION OF PROCEEDINGS U/S.147 AS INVALID. THE ASSESSMENT IS ACCORDINGLY ANNULLED. 3. IT EMERGES FROM A PERUSAL OF THE CASE RECORDS THAT WE ARE IN ASSESSMENT YEAR 2009 - 10 INVOLVING SECTION 143(3) ASSESSMENT FRAMED ON 23.2.2011 FOLLOWED BY ASSESSING OFFICERS INITIATION OF 148/147 PROCEEDINGS VIDE NOTICE DT.24. 4.2014. THIS IS THUS A CASE OF THE IMPUGNED PROCEEDINGS HAVING BEEN INITIATED BEYOND THE PRESCRIBED PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR COVERED UNDER SECTION 147 1 ST PROVISO . THE REVENUE HAS NOT FILED TO PLACE ON RECORD ANY MATERIAL THAT THE ASSESSING OFFICER H AD ATTRIBUTED THE REASON OF ASSESSEE'S INCOME HAVING ESCAPED ASSESSMENT DUE TO FAILURE ON HIS PART TO FULLY AND TRULY DISCLOSE THE RELEVANT PARTICULARS IN THE FIRST HALF. THE CIT(A) HAS ALREADY TAKEN NOTE OF V ARIOUS JUDICIAL PRECEDENT S (SUPRA) WHIL ST ANNULLING THE 5 ITA NO. 1944 /HYD/20 18 ASSESSING OFFICERS ACTION TO THIS EFFECT. WE THEREFORE FIND NO REASON TO EXPRESS OUR DISAGREEMENT THERETO. THE REVENUES SOLE SUBSTANTIVE GRIEVANCE IS REJECTED ACCORDINGLY. 4. THIS REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24TH AUG. , 2021. SD/ - SD/ - (L .P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT. 24 .0 8 .2021. * REDDY GP COPY TO : 1. SHRI P. MAHESWARA REDDY, PAPIREDDIGARIPALLE VILLAGE, RAMAPURAM MANDAL, KADAPA DISTRICT. 2. ACIT, CIRCLE 1 , KADAPA . 3. PR. C I T , KURNOOL. 4. CIT(APPEALS) , KURNOOL. 5. DR, ITAT, HYDERABAD. 6. GUARD FILE. BY ORDER SR. PVT. SECRETARY, ITAT, HYDERABAD.