DY.C.I.T. 1, BHILAI(CG) V. M/S RAVI SHREE NARAYAN TRANSPORT, BHILAI(CG)

ITA 200/BIL/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8979 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 22-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S S RAO
• Keywords: Unexplained cash credit; Principle of natural justice; Additional evidence; Reasonable cause; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.116/RPR/2014: ASSESSMENT YEAR : 2010-2011 ITA NO.199/RPR/2014: ASSESSMENT YEAR : 2008-2009 ITA NO.200/RPR/2014: ASSESSMENT YEAR : 2019-2010 DCIT -1, 32/32, BUNGLOWS, BHILAI VS. M/S. RAVI SHREE NARAYAN TRANSPORT, ACC MAIN GATE, JAMUL SQUARE, BHILAI PAN/GIR NO.AAHFR 7461 F (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.S.RAO, AR REVENUE BY : SHRI SANJAY KUMAR, DR DATE OF HEARING : 12/01/ 2018 DATE OF PRONOUNCEMENT : 15/01/ 2018 O R D E R PER PAVAN KUMAR GADALE, JM ITA NO.116/RPR/2014 IS DIRECTED AGAINST THE ORDER OF THE CIT(A), RAIPUR FOR THE ASSESSMENT YEAR 2010-2011. 2. ITA NO.199/RPR/2014 AND ITA NO.200/RPR/2014 ARE DIRECTED AGAINST THE SEPARATE ORDERS BOTH DATED 19.6.2014 FOR THE ASSESS MENT YEAR 2008-08 AND 2009-2010. 3. IN ITA NO.116/RPR/2014 FOR THE ASSESSMENT YEAR 2010- 2011, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 2 ITA NO.116/RPR/2014: ASSESSMENT YEAR : 2010-2011 ITA NO.199/RPR/2014: ASSESSMENT YEAR : 2008-2009 ITA NO.1200/RPR/2014: ASSESSMENT YEAR : 2019-2010 1. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN ADMITTING ADDITIONAL EVIDENCE UND ER RULE 46A AS THERE WAS NO REASONABLE CAUSE FOR THE ASSESSEE NOT TO HAVE PRODUCED THE EVIDENCE BEFORE THE AO. 2. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE I.T.ACT OF RS.61,25,026/- OUT OF INTEREST AND FINA NCE CHARGES AS PER PROVISIONS OF 3. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.32,00 ,000/- MADE BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDIT IN PARTNER S CAPITAL ACCOUNT U/S.68 OF THE I.T ACT AS THE ASSESSEE FAILED TO EX PLAIN THE SOURCE THEREOF. 4. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN CONSIDERING THE SUBMISSION OF THE ASSESSEE THAT THE ASSESSEE PAID AGGREGATE AMOUNT OF RS.12,01,719/- AGA INST TDS DEDUCED FROM PAYMENT MADE ON ACCOUNT OF INTEREST AND FI NANCE CHARGES WITHOUT VERIFYING THE FACTS AVAILABLE ON RECORD. 5. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN RESTRICTING THE DISALLOWANCE OF RS.5,00,000/- TO RS.2,50,000/- OUT OF TRANSPORTATION EXPENSES CONSIDERING THE ADDITIONS MADE IN THE CASE OF THE ASSESSEE IN PREVIOUS YEARS. 4. AT THE TIME OF HEARING, LD D.R. OF THE ASSESSEE CONTE NDED THAT THE CIT(A) HAS ADMITTED ADDITIONAL EVIDENCE IN THE FORM O F COPIES OF FORM NO.27A, COPIES OF CHALLANS AND EXTRACT OF TDS RETURN IN VIOLATION OF RULE 46A. LD D.R. SUBMITTED THAT THESE DOCUMENTS WERE NOT FILED B EFORE THE ASSESSING OFFICER AND, THEREFORE, THE ASSESSING OFFICER WAS NOT AFF ORDED AN OPPORTUNITY TO EXAMINE THE DETAILS FILED BY THE ASSESSEE. THEREFOR E, HE PRAYED FOR REVERSING THE ORDER OF THE CIT(A). 3 ITA NO.116/RPR/2014: ASSESSMENT YEAR : 2010-2011 ITA NO.199/RPR/2014: ASSESSMENT YEAR : 2008-2009 ITA NO.1200/RPR/2014: ASSESSMENT YEAR : 2019-2010 5. LD A.R. OF THE ASSESSEE SUBMITTED THAT ALL THE DETAIL S FILED BEFORE THE CIT(A) WERE AVAILABLE AND VERIFIABLE FROM THE DEPAR TMENTS WEB SITE. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS FILED T HE DOCUMENTS FOR THE FIRST TIME BEFORE THE CIT(A). 6. AFTER HEARING THE RIVAL SUBMISSIONS AND PERUSING THE ORDERS OF LOWER AUTHORITIES, WE FIND THAT THE CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCES WITHOUT AFFORDING AN OPPORTUNITY TO THE ASSESSING OFFICE R. THE SAME SHOULD HAVE EITHER BEEN ADMITTED UNDER RUE 46A OF THE I.T. RULES, 1962 AND BY HAVING A REMAND REPORT FROM THE ASSESSING OFFICER. THE SAME HAS NOT BEEN DONE BY THE LD. CIT(A). THEREFORE, THE ORDER OF THE LD. CIT(A), AT THE OUTSET, IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND DESERVE S TO BE REVERSED. BUT IN THE INTEREST OF JUSTICE, THE MATTER IS SET ASIDE TO T HE FILE OF THE ASSESSING OFFICER WHO WILL EXAMINE THE CLAIM OF THE ASSESSEE AND RE DO THE ASSESSMENT AFTER HEARING THE ASSESSEE. THE ASSESSEE IS DIRECTED TO PRO DUCE ALL THE RELEVANT DOCUMENTS, WHICH WERE FILED BEFORE THE CIT( A) BEFORE THE ASSESSING OFFICER. IF AFTER EXAMINATION OF THE DOCUMENTS, THE A SSESSING OFFICER IS CONVINCED ABOUT THE GENUINENESS OF THE DOCUMENTS, THEN HE IS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE. HENCE, APPEAL OF THE REVENUE ALLOWED FOR STATISTICAL PURPOSES. 4 ITA NO.116/RPR/2014: ASSESSMENT YEAR : 2010-2011 ITA NO.199/RPR/2014: ASSESSMENT YEAR : 2008-2009 ITA NO.1200/RPR/2014: ASSESSMENT YEAR : 2019-2010 ITA NO.199 & 200/RPR/2014: A.Y. 2008-09 & 2009-2010 7. IN BOTH THE APPEALS, THE REVENUE IS AGGRIEVED BY THE CANCELLATION OF REASSESSMENT ORDER WHEN THE AO HAS RECEIVED INFORMATION A ND THUS FORMED VALID REASON TO BELIEF FOR REOPENING THE ASSESSMENT. 8. THE RELEVANT FACTS ARE THAT IN THIS CASE ORIGINAL ASSE SSMENTS WERE COMPLETED U/S.143(3) OF THE ACT. SUBSEQUENTLY, THE ASSE SSING OFFICER HAS INITIATED REASSESSMENT PROCEEDINGS U/S.147 OF THE ACT AFTER RECEIPT OF VERIFICATION REPORT FROM ACIT (TDS), RAIPUR STATING T HAT THE ASSESSEE HAS MADE CERTAIN PAYMENTS WITHOUT DEDUCTION OF TAX, THERE FORE, CORRESPONDING EXPENSES WERE NOT ALLOWABLE U/S.40(A)(IA) OF THE ACT. T HE ASSESSEE OBJECTED AND THE OBJECTIONS WERE REJECTED BY THE ASSESSING OFFICER . THE ASSESSEE FILED WRIT PETITION BEFORE THE HONBLE HIGH COURT A ND DURING PENDENCY OF THE WRIT PETITION, THE REASSESSMENT PROCEEDINGS WERE COMPLETE D U/S.147 OF THE ACT. 9. AGAINST THE PROCEEDING U/S.147 OF THE ACT INITIATED BY THE AO, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) STATING TH AT THE REASSESSMENT PROCEEDINGS INITIATED BY THE AO SOLELY AFTER CHANGE OF OPINION AND MERELY BECAUSE THE AO DID NOT EXPRESS HIS MIND THE MATERIAL PL ACED BY THE ASSESSEE AT THE TIME OF ORIGINAL ASSESSMENT, BY ITSELF, WOU LD NOT GIVE A GROUND TO REOPEN THE ASSESSMENT ON THE BELIEF THAT INCOM E HAS ESCAPED 5 ITA NO.116/RPR/2014: ASSESSMENT YEAR : 2010-2011 ITA NO.199/RPR/2014: ASSESSMENT YEAR : 2008-2009 ITA NO.1200/RPR/2014: ASSESSMENT YEAR : 2019-2010 ASSESSMENT. THE CIT(A) CONSIDERING THE SUBMISSIONS OF ASSESSEE , HAS QUASHED THE REASSESSMENT PROCEEDINGS OBSERVING THAT THE ASSE SSEE HAS FILED ALL THE MATERIALS BEFORE THE AO AND THE SAME HAS BEEN CONSIDERED BY THE AO DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, THERE IS NO FI NDING BY THE AO EITHER IN THE ORIGINAL ASSESSMENT PROCEEDINGS OR IN THE R E-ASSESSMENT PROCEEDINGS, THAT THE ASSESSEE HAS NOT FURNISHED THE DETAI LS FOR CONSIDERATION, RATHER THE AO IN REASSESSMENT PROCEEDINGS HAS ENDORSED THE FACT THAT THE ASSESSEE HAS FURNISHED THE DETAILS AND CONSID ERED THE SAME. THE CIT(A) FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CIT VS. KELVINATOR (INDIA), 228 CTR 488 AND CIT VS. USHA INTE RNATIONAL LTD., 253 CTR (DEL) 113 QUASHED THE REASSESSMENT ORDER WERE INITI ATED ON THE BASIS OF CHANGE OF OPINION. 10. HENCE, THE DEPARTMENT IS IN APPEAL BEFORE US. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE O RDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE UN DISPUTED FACTS OF THE CASE ARE THAT THE ORIGINAL ASSESSMENTS IN THE CASE OF THE ASSE SSEE WERE COMPLETED, DETERMINING THE ASSESSED INCOME AT RS.25,65,16 0/-. LATER ON, THE ASSESSING OFFICER ISSUED NOTICE U/S.148 OF THE ACT 28.1. 2013 TO MAKE REASSESSMENT PROCEEDINGS. REASONS WERE ALSO RECORDED AND FU RNISHED TO THE ASSESSEE. THE REASSESSMENT PROCEEDINGS WERE INITIATED O N THE GROUND 6 ITA NO.116/RPR/2014: ASSESSMENT YEAR : 2010-2011 ITA NO.199/RPR/2014: ASSESSMENT YEAR : 2008-2009 ITA NO.1200/RPR/2014: ASSESSMENT YEAR : 2019-2010 THAT DURING THE ORIGINAL ASSESSMENT PROCEEDINGS, THE EXPE NSES CLAIMED UNDER THE HEAD LABOUR CHARGES, TRANSPORTATION CHARGES A ND INTEREST U/S.201 AND 201(1A) WERE NOT CONSIDERED. THE ASSESSEE SUBMITTED T HAT DURING ORIGINAL ASSESSMENT PROCEEDINGS THE ASSESSEE HAS FURNISHED FUL L AND TRUE PARTICULARS OF ITS INCOME AND THE REASSESSMENT PROCEEDINGS WE RE INITIATED POSSIBLY FOR CORRECTING THE MISTAKES OF THE ASSESSING OFFICER . IN RESPONSE TO OBJECTION TO REASSESSMENT ORDER BY THE ASSESSEE, THE ASSESSING O FFICER HAS OBSERVED ALTHOUGH YOU HAVE FURNISHED THE DETAILS, TH E ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER FOUND TO HAVE MISSED TO CONSIDER THE MATTER BECAUSE THERE IS NOTHING MENTIONED IN THE ASSESSMEN T ORDER. AS REGARDS TO TDS, IT IS OBSERVED THAT TDS VERIFICATION WA S MADE ON 23.12.2009 I.E. MUCH BEFORE THE COMPLETION OF REGULAR ASSESSMENT AND THE ASSESSING OFFICER IN ORIGINAL ASSESSMENT EXAMINED AS IS EVIDENT FROM PARA 3 OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2008-09 THAT SOME OF T HE EXPENSES WERE COVERED WITH TDS AND REMAINING PAYMENTS WERE MAD E TO INDIVIDUAL TRANSPORTERS. THE AUDIT REPORT WHICH WAS RELIED BY THE ASSESSING OFFICER DURING THE REASSESSMENT PROCEEDINGS WAS ALSO AVAILABLE BE FORE HIM. HENCE, IT CANNOT BE SAID THAT THE ASSESSING OFFICER HAS NOT CONSIDER ED THE ISSUE. ONCE THE ASSESSING OFFICER HAS MADE LUMP SUM DISALLOWANCE, IT CAN SAFELY 7 ITA NO.116/RPR/2014: ASSESSMENT YEAR : 2010-2011 ITA NO.199/RPR/2014: ASSESSMENT YEAR : 2008-2009 ITA NO.1200/RPR/2014: ASSESSMENT YEAR : 2019-2010 CONCLUDED THAT ALL THE MATERIAL FACTS WERE BEFORE THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS. 12. THUS, IF IN THE COURSE OF ORIGINAL ASSESSMENT PROCEED INGS, THE ASSESSING OFFICER HAS CONSIDERED AND EXAMINED A PARTICULAR A SPECT, THE SAID ASPECT CANNOT BE MADE A GROUND TO REOPEN AND INITIATE REASSESSMENT PROCEEDINGS. THE ASSESSING AUTHORITY CANNOT HAVE A FRESH LO OK AND REOPEN AN ASSESSMENT ON THE GROUND OF CHANGE OF OPINION. THE F ACTS NOTED ABOVE, CLEARLY SHOW THAT IN THE ORIGINAL ASSESSMENT PROCEEDINGS, T HE ASSESSING OFFICER HAD CONSIDERED AND EXAMINED REGARDING DISALLOWA NCE U/S.40(A)(IA) AND TDS ON FINANCIAL CHARGES. THE ASSESSING OFFICER MADE SOME LUMPSUM DISALLOWANCE UNDER THE ABOVE HEADS. 13. ON THE QUESTION OF CHANGE OF OPINION, THE LAW IS W ELL SETTLED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD, 256 ITR 1(DEL) , WHEREIN, IT HAS BEEN HELD THA T HELD THAT AN ORDER WHICH HAS BEEN PASSED PURPORTEDLY WITHOUT APPLICATION OF MIND WOULD ITSELF CONFER JURISDICTION UPON THE ASSESSING OFFICER TO REOPEN THE PRO CEEDING WITHOUT ANYTHING FURTHER, THE SAME WOULD AMOUNT TO GIVING A PREMIUM TO AN AUTHORITY EXERCISING QUASI-JUDICIAL FUNCTION TO TAKE B ENEFIT OF ITS OWN WRONG. THE DECISION IS APPROVED BY HONBLE SUPREME COURT IN THE CASE REPORTED AS 8 ITA NO.116/RPR/2014: ASSESSMENT YEAR : 2010-2011 ITA NO.199/RPR/2014: ASSESSMENT YEAR : 2008-2009 ITA NO.1200/RPR/2014: ASSESSMENT YEAR : 2019-2010 CIT VS. KELVINATOR OF INDIA LTD (320 ITR 561). IN T HE CASE BEFORE US, THE ASSESSING OFFICER HAS INITIATED REASSESSMENT PROCEEDINGS ON THE SAME FACTS WHICH WERE AVAILABLE BEFORE HIM AT THE TIME OF MAKIN G ASSESSMENT U/S.143(3) OF THE ACT AND NO NEW TANGIBLE MATERIAL H AS COME ON THE BASIS OF WHICH IT COULD BE SAID THAT HE HAS REASON TO BELIEVE T HAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT ON ACCOUNT OF FAILURE ON THE P ART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY MATERIAL OF FACTS FO R THE ASSESSMENT. IN VIEW OF ABOVE, WE ARE OF THE OPINION THAT THE RE ASSESSMENT PROCEEDINGS ARE INITIATED DUE TO CHANGE OF OPINION AND, THEREFOR E, WE CONCUR WITH THE FINDINGS OF THE CIT(A) QUASHING THE REASSESSMENT PROCEEDI NGS. ACCORDINGLY, WE DISMISS THE GROUND OF APPEAL OF THE REVENUE FOR BO TH THE ASSESSMENT YEARS UNDER CONSIDERATION. 12. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AR E DISMISSED. ORDER PRONOUNCED ON 15 /01/2018. SD/- SD/- (N.S SAINI) ( PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIALMEMBER RAIPUR; DATED 15 /01/2018 B.K.PARIDA, SPS 9 ITA NO.116/RPR/2014: ASSESSMENT YEAR : 2010-2011 ITA NO.199/RPR/2014: ASSESSMENT YEAR : 2008-2009 ITA NO.1200/RPR/2014: ASSESSMENT YEAR : 2019-2010 COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, RAIPUR 1. THE APPELLANT : DCIT -1, 32/32, BUNGLOWS, BHILAI 2. THE RESPONDENT. M/S. RAVI SHREE NARAYAN TRANSPORT, ACC MAIN GATE, JAMUL SQUARE, BHILAI 3. THE CIT(A)- BHILAI 4. PR.CIT- BHILAI 5. DR, ITAT, RAIPUR 6. GUARD FILE. //TRUE COPY//