Sanjukta Kumar Sahu, Berhampur V. ITO, Ward-3, Berhampur

ITA 219/CTK/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1696 (ITAT-CUTTACK)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-06-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 19-11-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Tangible material; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BEFORE SHRI SANJUKTA KUMAR M/S. PRATIMA FILLING STATION, NH 5, HALDIAPADAR, GOSANINUAGAM, BARHMAPUR, GANJAM. PAN/GIR NO. AVIPS 9744 G (APPELLANT REVENUE BY THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE OR CIT(A)- 1, BHUBANESWAR 2010.. 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ISSUE OF NOTICE U/S.148 OF THE FOR REOPENING OF ASSESSMENT U/S.147 OF THE ACT, THEREBY MAKING ADDITION OF RS.3,07,500/ 3. FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM SALE OF PETROL, DIESEL AND LUBRICANT. SHE FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK SMC BENCH, CUTTACK SHRI CHANDRA MOHAN GARG, JUDICIAL ITA NO. 219/CTK/2020 ASSESSMENT YEAR : 2009-2010 SANJUKTA KUMAR SAHU, PROP. M/S. PRATIMA FILLING STATION, NH - 5, HALDIAPADAR, GOSANINUAGAM, BARHMAPUR, GANJAM. VS. ITO, WARD- 3, BERHAMPUR AVIPS 9744 G (APPELLANT ) .. ( RESPONDENT ASSESSEE BY : SHRI MOHIT SHETH , AR REVENUE BY : SHRI SOVESH CHANDRA MOHANTY , ADDL. CIT ( DATE OF HEARING : 29/06/ 202 1 DATE OF PRONOUNCEMENT : 30/06 /20 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE OR 1, BHUBANESWAR DATED 31.8.2020 FOR THE ASSESSMENT YEAR GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ISSUE OF NOTICE U/S.148 OF THE FOR REOPENING OF ASSESSMENT U/S.147 OF THE ACT, THEREBY MAKING ADDITION OF RS.3,07,500/ FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM SALE OF PETROL, DIESEL AND LUBRICANT. SHE FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 2010 SHOWING TOTAL INCOME AT P A G E 1 | 6 IN THE INCOME TAX APPELLATE TRIBUNAL, JUDICIAL MEMBER 3, BERHAMPUR RESPONDENT ) , AR , ADDL. CIT ( DR) 1 /20 21 THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE OR DER OF THE FOR THE ASSESSMENT YEAR 2009- GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ISSUE OF NOTICE U/S.148 OF THE FOR REOPENING OF ASSESSMENT U/S.147 OF THE ACT, THEREBY MAKING ADDITION OF RS.3,07,500/ -. FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM SALE OF PETROL, DIESEL AND LUBRICANT. SHE FILED HER RETURN OF 2010 SHOWING TOTAL INCOME AT ITA NO. 25/CTK/2020 ASSESSMENT YEAR : 2009-10 P A G E 2 | 6 RS.2,84,100/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT ON 29.12.2011 DETERMINING THE TOTAL INCOME AT RS.6,96,160/-, INTER ALIA, MAKING ADDITION OF RS.1,02,000/- ON ACCOUNT OF SUPPRESSION OF RENTAL INCOME, RS.10,098/- ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE AND RS.2,99,961/- ON ACCOUNT OF UNDISCLOSED INCOME. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE U/S.148 OF THE ACT ON 27.8.2013 FOR REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT, INTER ALIA, RECORDING THE REASONS, WHICH READS AS UNDER: ON VERIFICATION OF ASSESSMENT RECORD, IT IS REVEALED THAT A TOTAL AMOUNT OF RS.3,49,375/- (SUPPRESSION OF SALES IN THE P&L ACCOUNT AMOUNTING TO RS.2,55,390/- ON ACCOUNT OF SUPPRESSION OF SALES IN P&L ACCOUNT, RS.18,525/- ON ACCOUNT OF NON-DISALLOWANCE OF COMPUTER MAINTENANCE EXPENSES, RS.40,000/- ON ACCOUNT OF UNDISCLOSED INCOME AND RS.35,460/- ON ACCOUNT OF NON-DISALLOWANCE OF PUJA & FUNCTION EXPENSES CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. 4. SINCE, IN RESPONSE TO VARIOUS NOTICES INCLUDING NOTICE U/S.148 OF THE ACT, THE ASSESSING OFFICER COMPLETED ASSESSMENT U/S.144/147 OF THE ACT ON 30.6.2014, INTER ALIA, MAKING VARIOUS DISALLOWANCES AS UNDER: 1. SUPPRESSION OF SALES IN P&L ACCOUNT: RS.2,55,390/- 2. NON-DISALLOWANCE OF COMPUTER MAINT. : RS. 18,525/- 3. UNDISCLOSED INCOME : RS. 40,000/- 4. NON-DISALLOWANCE OF PUJA & FUNCTION EXP. RS. 35,460/- ITA NO. 25/CTK/2020 ASSESSMENT YEAR : 2009-10 P A G E 3 | 6 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER U/S.144/147 OF THE ACT, THE ASSESSEE CARRIED THE MATTER IN APPEAL, WHO DECIDED THE APPEAL EXPARTE ON MERIT AND PARTLY CONFIRMED THE DISALLOWANCE. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD A.R. OF THE ASSESSEE DISPUTED THE ISSUANCE OF NOTICE U/S.148 OF THE ACT FOR REOPENING THE ASSESSMENT U/S.147 OF THE ACT. HE SUBMITTED THAT AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS U/S.143(3) OF THE ACT, THE ASSESSEE PRODUCED ALL THE BOOKS OF ACCOUNT, BANK ACCOUNT, SALES AND PURCHASE REGISTER, VAT RETURN COPIES, CASH BOOK, LEDGER AND VOUCHERS AND AFTER DULY VERIFICATION AND EXAMINATION OF THE SAME, THE AO COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT ON 29.12.2011 AND, THEREFORE, THERE WAS NECESSITY TO ISSUE NOTICE U/S.148 OF THE ACT FOR REOPENING THE COMPLETED ASSESSMENT. LD A.R. SUBMITTED THAT THE REOPENING OF THE ASSESSMENT IS MERE A CHANGE OF OPINION BY THE AO. THE REASSESSMENT WAS MADE ON THE BASIS SAME SET OF FACTS AND LAW. WHEN ALL THE RECORDS ALONGWITH BOOKS OF ACCOUNT AND OTHER SUBSIDIARY BOOKS WERE PRODUCED BEFORE THE AO DURING THE ORIGINAL ASSESSMENT PROCEEDINGS, THEN THE AO SHOULD NOT HAVE ANY REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT ON THE BASIS OF SAME MATERIALS AVAILABLE ON RECORD. LD A.R. OF THE ASSESSEE RELIED ON THE DECISION OF ITAT BANGALORE IN THE CASE OF M/S. AKSHAYA SOUDHARDA CREDIT CO- OPERATIVE LIMITED VS ITO IN ITA NO.2574/BANG/2019, WHEREIN, IT HAS BEEN HELD THAT EVEN IF THE REASSESSMENT IS IN ACCORDANCE WITH THE PROVISO TO ITA NO. 25/CTK/2020 ASSESSMENT YEAR : 2009-10 P A G E 4 | 6 SECTION 147 OF THE ACT, IT CANNOT BE MADE ON A MERE CHANGE OF OPINION. IT WAS ALSO HELD THAT EVEN IF AN ASSESSMENT IS POSSIBLY REOPENED WITHIN A PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS, THE REASSESSMENT WOULD BE BADE IN LAW IF IT IS ON A MERE CHANGE OF OPINION. HE ALSO RELIED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS ON THIS ISSUE: I) PARIXIT INDUSTRIES PVT LTD., VS ACIT, 352 ITR 349 (GUJ) II) LAHNEYER HOLDINGS GMBH VS DCIT, 375 ITR 60 (DEL) III) CIT VS. KELVINATOR INDIA LTD., 320 ITR 561 (SC) IV) GARDEN SILK MILLS PVT LTD.VS DCIT, 237 ITR 668 (GUJ) 7. REPLYING TO ABOVE, LD DR SUPPORTED THE ORDER OF THE LD CIT(A). LD D.R. RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS USHA INTERNATIONAL LTD., 348 ITR 485 (DEL). 8. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS, I PERUSED THE REASONS RECORDED BY ASSESSING OFFICER FOR INITIATING THE RE-ASSESSMENT PROCEEDINGS. ON PERUSAL OF THE SAME, IT IS CLEAR THAT THE SAID DETAILS WERE AVAILABLE WHILE COMPLETING THE ASSESSMENT U/S 143(3). IT IS IMPERATIVE ON THE PART OF THE ASSESSING OFFICER TO SHOW THAT THE CONDITIONS SPECIFIED IN THE FIRST PROVISO TO SEC. 147 ARE COMPLIED WITH BEFORE INITIATING THE REASSESSMENT PROCEEDINGS. HOWEVER, THE AO HAS FAILED TO SHOW THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. HENCE, THE REASSESSMENT PROCEEDING UNDER SECTION 147 HAS NOT BEEN VALIDLY ITA NO. 25/CTK/2020 ASSESSMENT YEAR : 2009-10 P A G E 5 | 6 INITIATED BECAUSE THE SAME HAS BEEN INITIATED MERELY ON A CHANGE OF OPINION WITHOUT ANY FRESH MATERIAL COMING INTO THE POSSESSION OF THE AO. I ALSO OBSERVED THAT WHILE COMPLETING THE ORIGINAL ASSESSMENT, THE AO HAS MADE ENQUIRIES AND IN RESPONSE TO HIS REQUIREMENT, THE ASSESSEE FURNISHED ALL DOCUMENTS AND EVIDENCE IN HER POSSESSION. THUS, I NOTICE THAT THE ASSESSING OFFICER HAS APPLIED HIS MIND ON THE IMPUGNED ISSUES AND HAS TAKEN A VIEW. BEFORE ISSUING NOTICE U/S.148 OF THE ACT FOR REOPENING THE ASSESSMENT, THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. SUCH REASON TO BELIEVE, AS HELD BY SUPREME COURT IN CASE OF COMMISSIONER OF INCOME TAX VS. KELVIN ATOR OF INDIA LTD . [2010] 320 ITR 561, WOULD MEAN A TANGIBLE MATERIAL TO ENABLE THE ASSESSING OFFICER TO COME TO A CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. THE REASON MUST HAVE LIVE LINK WITH THE FORMATION OF THE BELIEF. BUT IN THE PRESENT CASE, THE MATERIALS FACTS WHICH EMERGED FOR REOPENING THE ASSESSMENT U/S.147 OF THE ACT, THAT WERE AVAILABLE DURING THE ORIGINAL ASSESSMENT. THE VIEW OF THE VARIOUS COURTS IS THAT EVEN AFTER AMENDMENT OF SECTION 147, MERE CHANGE OF OPINION DOES NOT CONFER JURISDICTION ON THE ASSESSING OFFICER TO INITIATE PROCEEDINGS FOR REASSESSMENT MERELY BY RESORTING TO EXPLANATION 1 ON THE BASIS OF CHANGE OF OPINION. THEREFORE, I AM OF THE CONSIDERED VIEW THAT THE REOPENING OF THE ASSESSMENT IS BAD IN LAW AND HENCE, LIABLE TO BE QUASHED. ITA NO. 25/CTK/2020 ASSESSMENT YEAR : 2009-10 P A G E 6 | 6 ACCORDINGLY, I QUASHED THE ISSUE OF NOTICE U/S.148 OF THE ACT AND CONSEQUENTLY, THE REOPENING OF ASSESSMENT ORDER U/S.147 OF THE ACT. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 30 /06/2021. SD/- (CHANDRA MOHAN GARG) JUDICIAL MEMBER CUTTACK; DATED 30/06/2021 B.K.PARIDA, SPS (OS) COPY OF THE ORDER FORWARDED TO : BY ORDER SR.PVT.SECRETARY ITAT, CUTTACK 1. THE APPELLANT : MAHABIR AGRI PROCESSORS PVT LTD., NANPUR, BALICHANDRAPUR, JAJPUR 2. THE RESPONDENT. ITO, JAJPUR WARD, JAJPUR 3. THE CIT(A), CUTTACK 4. PR.CIT-, CUTTACK 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//