DCIT, CHENNAI V. Merit Technology India Ltd., CHENNAI

ITA 2001/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8022 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 01-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Keywords: Reopening of assessment; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 147; 148; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.2001/MDS/2016 ' (' / ASSESSMENT YEAR : 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 4(1), CHENNAI. V. M/S MERIT TECHNOLOGY INDIA LTD., NO.14, NAVARATHNA GARDEN ROAD, EKKATTUTHANGAL, CHENNAI - 600 034. PAN : AABCM 9806 E (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT ,-*+ . / / RESPONDENT BY : NONE 0 . 1$ / DATE OF HEARING : 06.10.2016 2!( . 1$ / DATE OF PRONOUNCEMENT : 25.11.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -8, CHENNA I, DATED 31.03.2016 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. THE NOTICE OF HEARING WAS SERVED ON THE ASSESSEE BY RPAD. THE REGISTRY HAS PLACED ON RECORD THE POSTAL ACKNOW LEDGEMENT AS 2 I.T.A. NO.2001/MDS/16 PROOF OF SERVICE OF NOTICE ON THE ASSESSEE. INSPI TE OF RECEIPT OF NOTICE, THE ASSESSEE CHOSE TO REMAIN ABSENT. THERE FORE, WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND PROCEED TO DISPOSE OF THE APPEAL ON MERIT. 3. SHRI A.V. SREEKANTH, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY AN ORDER DATED 30.11.2010. SUBSEQUENTLY, THE ASSES SING OFFICER FOUND THAT THE ASSESSEE HAS MADE BELATED REMITTANCE OF TAX DEDUCTED AT SOURCE ON SUB-CONTRACT PAYMENT AFTER 31 .03.2007 AND ALSO THERE ARE CERTAIN UNEXPLAINED EXPENSES. ACCOR DINGLY, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 154 O F THE INCOME- TAX ACT, 1961 (IN SHORT 'THE ACT') FOR RECTIFICATIO N. SUBSEQUENTLY, THE ASSESSING OFFICER DROPPED THE PROCEEDINGS INITIATED UNDER SECTION 154 OF THE ACT AND ISSUED NOTICE UNDER SECTION 148 OF THE ACT ON 26.03.2014. ACCORDING TO THE LD. D.R., THE CIT(APP EALS) FOUND THAT THE ASSESSING OFFICER HAVING DROPPED THE PROCEEDING S INITIATED UNDER SECTION 154 OF THE ACT, OUGHT NOT TO HAVE INI TIATED THE PROCEEDINGS FOR REOPENING OF ASSESSMENT UNDER SECTI ON 147 OF THE ACT. ACCORDINGLY, THE CIT(APPEALS) DELETED THE DIS ALLOWANCE MADE BY THE ASSESSING OFFICER IN REASSESSMENT PROCEEDING S. PLACING 3 I.T.A. NO.2001/MDS/16 RELIANCE ON THE JUDGMENT OF KERALA HIGH COURT IN CI T V. INDIA SEA FOODS (2011) 332 ITR 424, THE LD. D.R. SUBMITTED TH AT WHERE RECTIFICATION PROCEEDINGS WERE INITIATED BY THE ASS ESSING OFFICER UNDER SECTION 154 OF THE ACT ARE DROPPED AS RECTIFI CATION WAS NOT PERMISSIBLE, THE ASSESSING OFFICER CAN VERY WELL IN ITIATE PROCEEDINGS UNDER SECTION 147 OF THE ACT TO BRING TO TAX THE IN COME ESCAPED ASSESSMENT. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) IS NOT JUSTIFIED IN DELETING THE ADDIT ION MADE BY THE ASSESSING OFFICER. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RELEVAN T MATERIAL AVAILABLE ON RECORD. FROM THE MATERIAL AVAILABLE O N RECORD IT APPEARS THAT THE ASSESSEE FILED RETURN OF INCOME ON 31.10.2007 ADMITTING A TOTAL INCOME OF ` 57,02,237/-. FINALLY, THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AND INTIM ATION WAS ISSUED ON 26.09.2008. SUBSEQUENTLY, THE ASSESSING OFFICER FOUND THAT THE INCOME ESCAPED ASSESSMENT UNDER SECTION 14 7 OF THE ACT. ACCORDINGLY, HE REOPENED THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT ON 16.07.2009. THE ASSESSIN G OFFICER HAS ALSO COMPLETED THE ASSESSMENT AFTER ISSUING NOTICE UNDER SECTION 4 I.T.A. NO.2001/MDS/16 148 OF THE ACT ON 30.11.2010. THEREAFTER, THE ASSE SSING OFFICER FOUND THAT THE ASSESSEE HAS PAID THE TAX DEDUCTED A T SOURCE BELATEDLY AFTER 31 ST MARCH, 2007 AND ALSO THERE WERE UNEXPLAINED EXPENSES. ACCORDINGLY, HE ISSUED NOTICE FOR INITIA TING PROCEEDINGS UNDER SECTION 154 OF THE ACT. DURING THE PENDENCY OF PROCEEDINGS INITIATED UNDER SECTION 154 OF THE ACT, THE ASSESSI NG OFFICER HAS ALSO ISSUED NOTICE ONCE AGAIN UNDER SECTION 148 OF THE ACT ON 26.03.2014 FOR REOPENING OF ASSESSMENT FOR SECOND T IME. THE CIT(APPEALS) FOUND THAT THE REOPENING OF ASSESSMENT FOR SECOND TIME IS NOTHING BUT ON CHANGE OF OPINION. HE ALSO PLACED HIS RELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN CI T V. E.I.D PARRY LTD. (1995) 216 ITR 489 AND FOUND THAT THE ASSESSIN G OFFICER CHOSE TO INITIATE PROCEEDINGS FOR RECTIFICATION INITIALLY . HOWEVER, HE ALSO INITIATED PROCEEDINGS UNDER SECTION 148 OF THE ACT. TWO PROCEEDINGS INITIATED BY THE ASSESSING OFFICER ON E UNDER SECTION 154 OF THE ACT AND ANOTHER UNDER SECTION 147 OF THE ACT, ARE OVERLAPPING EACH OTHER. THEREFORE, THE PROCEEDINGS INITIATED BY THE ASSESSING OFFICER FOR REOPENING OF ASSESSMENT CANNO T STAND IN THE EYE OF LAW. THE CIT(APPEALS) HAS ALSO REFERRED TO THE JUDGMENT OF GUJARAT HIGH COURT IN DAMODAR H. SHAH V. ACIT (2000 ) 245 ITR 774. ACCORDINGLY, THE CIT(APPEALS) FOUND THAT INIT IATION OF 5 I.T.A. NO.2001/MDS/16 REASSESSMENT PROCEEDINGS CONSEQUENT TO INITIATION O F RECTIFICATION PROCEEDINGS ARE NOT IN ACCORDANCE WITH LAW. ACCORD INGLY, HE DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFI CER. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT( APPEALS) HAS RIGHTLY PLACED HIS RELIANCE ON THE JUDGMENT OF JURI SDICTIONAL HIGH COURT IN E.I.D PARRY LTD. (SUPRA), THEREFORE, THERE IS NO REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY, THE SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON 25 TH NOVEMBER, 2016 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 25 TH NOVEMBER, 2016. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-8, CHENNAI 4. PRINCIPAL CIT, CHENNAI-4, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.