Sh. Kultaj Kataria, New Delhi V. ITO, Gurgaon

ITA 2079/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3469 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 15-03-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 18-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Assessee Lawyers: DR RAKESH GUPTA
• Keywords: Question of law; Difference of opinion; Competent authority; Change of opinion
• Section: 143(3); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-2079/DEL/2016 ( ASSESSMENT YEAR: 2007-08) KULTAJ KATARIA C/O M/S RRA TAX INDIA, D-28, SOUTH EXTENSION, PART-1, NEW DELHI. ALYPK7512J VS ITO WARD 1(3) GURGAON. ASSESSEE BY DR. RAKESH GUPTA, ADV. REVENUE BY SH. AMRIT LAL, SR. DR ORDER PER K. NARSIMHA CHARY, J.M. THIS IS AN APPEAL CHALLENGING THE ORDER DATED 01.02 .2016 IN APPEAL NO. 159/14-15, A.Y. 2007-08 PASSED BY THE CO MMISSIONER OF INCOME TAX (APPEALS)-1, GURGAON. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM HIRING OF CABS UNDER THE NAME OF M/S GENESIS WHEELS ON RENT, GURGAON. THE RETURN OF INC OME FOR THE AY 2007-08 WAS FILED ON 31.10.2007 DECLARING A TOTAL I NCOME OF RS. DATE OF HEARING 15.03.2017 DATE OF PRONOUNCEMENT 19.04.2017 2 ITA NO.2079/DEL/2016 409530/-AND THE ASSESSMENT U/S 143(3) WAS COMPLETED BY WAY OF AN ORDER DATED 23.12.2009 ASSESSING THE SAME AT RS. 629578/-. HOWEVER, LATER ON AO RECORDED THAT THE ASSESSEE HAD FILED TO DEDUCT THE TAX AT SOURCE ON PAYMENTS MADE TO M/S GO RANG TRAVELS, M/S BEDI TOUR AND TRAVELS AND TO SANDEEP K ATARIA TO A TUNE OF RS. 54,84,000/-, RS.12,54,219/- AND RS.2,75 ,768/- RESPECTIVELY AND FURTHER DIFFERENCE TO A TUNE OF RS . 7,50,989/- BETWEEN THE GROSS RECEIPTS SHOWN IN PROFIT AND LOSS ACCOUNT AND GROSS RECEIPTS REFLECTED IN SCHEDULE TDS2 OF THE IT R AS SUCH HE INITIATED PROCEEDINGS U/S 147 BY ISSUANCE OF NOTICE AND CONCLUDED THEM BY ADDING ALL THESE AMOUNTS TO THE INCOME OF T HE ASSESSEE. 3. APPEAL PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT (A) ENDED UP IN DISMISSAL BY WAY OF THE IMPUGNED ORDER AS SUC H THE ASSESSEE IS BEFORE US IN THIS APPEAL CHALLENGING TH E PROCEEDINGS U/S 147 STATING THAT THE AUTHORITIES BELOW ERRED IN SUSTAINING THE ADDITIONS U/S 147 OF THE ACT. 4. IT IS THE ARGUMENT OF THE LD. AR THAT THIS IS A MATTER OF REOPENING OF THE ASSESSMENT AFTER FOUR YEARS, WITHO UT COMING INTO POSITION OF ANY NEW MATERIAL AND IT CANNOT BE DONE UNDER PROVISO 3 ITA NO.2079/DEL/2016 TO SECTION 147 OF THE ACT. HE SUBMITTED THAT NEW P LEA OF QUESTION OF LAW WITHOUT REQUIRING ANY FURTHER EVIDENCE CAN B E TAKEN AT APPELLATE STAGE ALSO. LD. DR VEHEMENTLY RELIED UPO N THE ORDERS OF THE AUTHORITIES BELOW. 5. IN SO FAR AS THE SUBMISSION OF THE LD. AR THAT T HE POWERS OF THE TRIBUNAL IN DEALING WITH THE APPEALS THAT THE P OWERS OF THE TRIBUNAL IN DEALING WITH THE APPEALS ARE EXPRESSED IN THE WIDEST POSSIBLE TERMS AND IT HAS JURISDICTION TO EXAMINE T HE QUESTION OF LAW WHICH ARISES FROM THE FACTS AVAILABLE BEFORE LO WER AUTHORITIES AND WHICH HAS A BEARING ON THE LIABILITY OF THE ASS ESSEE, EVEN IF SUCH QUESTION HAS NOT BEEN RAISED BEFORE THE LOWER AUTHORITIES, IS CONCERNED, HE IS FORTIFIED IN HIS SUBMISSION BY TH E JUDGEMENTS OF THE HONBLE APEX COURT IN JUTE CORPORATION OF INDIA LIMITED VS. CIT 187 ITR 688 NATIONAL THERMAL POWER CORPORATION LTD. VS. CIT (1998) 229 ITR 383 (SC). 6. NOW TURNING TO THE MERITS OF THE CONTENTION, FIR ST PROVISO TO SECTION 147 READS AS FOLLOWS: PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR TH E RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER 4 ITA NO.2079/DEL/2016 THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM TH E END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PAR T OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) O F SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY A LL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESS MENT YEAR. 7. THEREFORE, IT IS CLEAR THAT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR NO ACTION U/S 1 47 COULD BE TAKEN UNLESS THE ESCAPEMENT OF INCOME WAS DUE TO TH E FAILURE ON THE PART OF THE ASSESSEE TO I. MAKE A RETURN U/S 139 OR IN RESPONSE TO THE NOTICE ISSUED U/S 147/148; OR II. DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT. 8. FACTS ON THIS ASPECT IN THIS CASE ARE WELL BORNE OUT OF RECORD. ASSESSMENT YEAR IS 2007-08, IT ENDED BY 31.03.2008 AND FOUR YEARS THEREAFTER ELAPSED BY 31.03.2012. ORIGINAL A SSESSMENT IN THIS MATTER WAS COMPLETED ON 23.12.2009, REASONS FO R REOPENING WERE RECORDED ON 07.11.2012 AND WERE APPROVED BY TH E COMPETENT AUTHORITY ON 12.03.2013. NOTICE U/S 148 WAS ISSUED ON 18.03.2013 AND ORDER U/S 147 WAS PASSED ON 28.03.20 14. THESE FACTS CLEARLY ESTABLISH THAT THE ACTION WAS PROPOSE D TO BE TAKEN U/S 147 OF THE ACT CLEARLY BEYOND FOUR YEARS. FURT HER THE 5 ITA NO.2079/DEL/2016 CONDITIONS REQUIRED FOR INVOKING THE SAME, AS STATE D ABOVE IS CONSPICUOUSLY ABSENT. REVENUE DOES NOT CLAIM TO HAV E COME IN POSSESSION OF NEW MATERIAL TO FORM THE BASIS FOR TH E BELIEF THAT INCOME ESCAPED ASSESSMENT. 9. RELIANCE IS PLACED ON THE DECISIONS REPORTED IN WEL INTERTRADE P. LTD VS ITO (2009) 308 ITR 22 (DELHI) AND DULI CH AND SINGHANIA VS. ACIT (2004) 269 ITR 192 (P&H) FOR THE PRINCIPLE THAT IN THE ABSENCE OF AN ALLEGATIONS THAT ESCAPEMENT OF INCOME HAD OCCURRED BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR HIS ASSE SSMENT, WHICH IS A SINE QUA NON FOR ASSUMING JURISDICTION UNDER SECT ION 147 OF THE ACT IN A CASE FALLING UNDER THE PROVISO THERETO, AN Y ACTION TAKEN BY THE ASSESSING OFFICER IS WHOLLY WITHOUT JURISDICTIO N. 10. IN THESE CIRCUMSTANCES, THIS CASE SEEMS TO INVO LVE A MATTER OF CHANGE OF OPINION WHICH IS NOT PERMISSIBLE UNDER LA W. WE, THEREFORE, HOLD THAT THE INVOKING OF JURISDICTION U /S 147 OF THE ACT BY THE AO IS IMPERMISSIBLE AND CANNOT BE SUSTAINED. WE, THEREFORE, QUASH THE ORDER DATED 28.03.2014 PASSED BY THE AO AS BAD IN LAW. 6 ITA NO.2079/DEL/2016 11. SINCE WE QUASH THE ORDER U/S 147 OF THE ACT, WE DO NOT PROPOSE TO ADJUDICATE THE OTHER GROUNDS ARGUED BEFO RE US. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.04.2017 SD/- SD/- (P.K. BANSAL) (K. NARSIMHA CH ARRY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 .04.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DRAFT DICTATED ON 19.04.2017 DRAFT PLACED BEFORE AUTHOR 19.04.2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON 19.04.2017 FILE SENT TO THE BENCH CLERK 20.04.2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.