ACIT, Circle Circle-2(10), Kolkata, Kolkata V. M/s Deccon India Pvt.Ltd, Kolkata

ITA 2243/KOL/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8899 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 28-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHURY CITSRDR
• Assessee Lawyers: ASHOK KUMAR TULSYAN
• Keywords: Tangible material; Reason to believe
• Section: 147; 148

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 2243 / KOL / 20 16 ASSESSMENT YEAR :2011-12 ACIT, CIRCLE-10(2), P-7, CHOWRINGHEE SQUARE, 3 RD FLOOR, KOLKAT-69 V/S . M/S DECCON INDIA PVT. LTD. BA-46, SUKHSAGAR VILLA, SALT LAKE CITY, KOLKAKTA-64 [ PAN NO.AABCD 0140 N ] /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI ROBIN CHOUDHURY, ADDL. CIT-SR-DR /BY RESPONDENT SHRI ASHOK KUMAR TULSYAN, FCA /DATE OF HEARING 26-11-2018 /DATE OF PRONOUNCEMENT 26-12-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2011-12 A RISES FROM THE COMMISSIONER OF INCOME TAX (APPEALS)-4, KOLKATAS O RDER DATED 07.10.2016, PASSED IN CASE NO.1134/CIT(A)-4/CIRCLE-12/KOL/14-15 , IN PROCEEDINGS U/S. 147/143(3) OF THE INCOME TAX ACT, 1961; IN SHORT T HE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE REVENUES SOLE SUBSTANTIVE GRIEVANCE CHALLEN GES THE CIT(A)S FINDINGS QUASHING THE RE-OPENING / RE-ASSESSMENT TO BE NOT SUSTAINABLE IN THE EYES OF LAW AS UNDER:- 4.2 I HAVE CONSIDERED THE SUBMISSION OF THE AR OF THE APPELLANT AGAINST THE ACTION OF THE AO. I FIND THAT IN THE INSTANT CA SE I FIND THAT INDEED THE ASSESSMENT HAS BEEN REOPENED BY THE AO ON THE GROUN D THAT THERE IS A MISMATCH OF INCOME AS REFLECTED IN THE APPELLANTS P ROFIT & LOSS ACCOUNT VIS--VIS INCOME REFLECTED IN THE 26AS FORM. THE AO OBSERVED THAT THE APE HAS CLAIMED TDS CREDIT OF 22,30,677/- ONLY. HOWEVER AS PER 26AS THE TDS CREDIT WAS 24,24,945/- WHICH IS MORE COMPARED TO THE CLAIM ITA NO.2243/KOL/2016 A.Y.2011- 12 ACIT, CIR-10(2), KOL. VS. M/S DECC ON INDIA PVT. LTD. PAGE 2 OF THE APPELLANT. THUS THE APPELLANT HAD OFFERED IN COME FOR TAXATION IN RESPECT OF INCOME ON WHICH TDS OF 24,24,495/- WAS D EDUCTED. THEREFORE THE AO HAD REASON TO BELIEVE THAT THE INC OME OF THE APPELLANT ESCAPED AS. I FIND THAT THE AO HAS REOPENED THE ASS ESSMENT TO VERIFY THE TDS CLAIM OF THE APPELLANT. THE AO AFTER RECORD ING REASONS HAS NOT ESTABLISHED THE NEXUS WITH THE ESCAPED INCOME AND M ATERIAL AVAILABLE WITH HIM TO ARRIVE AT A SUBJECTIVE SATISFACTION THA T THE INCOME OF THE APPELLANT HAS ACTUALLY ESCAPED ASSESSMENT. THE DECI SION RELATED UPON BY THE AR OF THE APPELLANT IS SQUARELY APPLICABLE T O THE FACTS OF THE INSTANT CASE. THE DECISION OF KOLKATA ITDAT AS RELI ED UPON BY THE AR (SUPRA) HAS DEALT WITH EXACTLY SIMILAR ISSUE AND TH EN AFTER CONSIDERING THE ARGUMENTS AND COUNTER ARGUMENTS HELD THAT PROCE EDINGS U/S 147 CANNOT SURVIVE. THUS RESPECTFULLY FOLLOWING THE DEC ISION OF THE JURISDICTIONAL ITAT, I HAVE NO HESITATION IN HOLDIN G THAT THE PROCEEDING INITIATED U/S. 147 IS BAD IN LAW. THIS GROUND IS AL LOWED. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS. THERE IS NO DISPUTE THAT THE ASSESSING OFFICER HAD ISSUED SEC. 148 NOTICE ALLEGING DISCREPANCIES IN ASSESSEES FORM 26AS INDICATING TD S CREDIT OF 24,24,945/- AS AGAINST THAT CLAIMED OF 22,30,677/-. HE THUS FORMED REASONS TO BELIEVE THAT ASSESSEES TAXABLE INCOME LIABLE TO BE ASSESSE D HAD ESCAPED ASSESSMENT. ALL THIS CULMINATED IN THE IMPUGNED RE- ASSESSMENT FRAMED ON 28.03.2014 MAKING VARIOUS DISALLOWANCES / ADDITIONS . 4. THE ASSESSEE PREFERRED APPEAL. THE CIT(A) HAS Q UASHED THE RE- ASSESSMENT IN ISSUE WITHOUT ADJUDICATING ASSESSEES OTHER GRIEVANCE(ES) ON MERITS. 5. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY C ONTENDS DURING THE COURSE OF HEARING THAT THE ASSESSEES FORM 26A STAT EMENT INDICATING DIFFERENCE IN TDS CLAIM (SUPRA) FORMED SUFFICIENT T ANGIBLE MATERIAL FOR THE ASSESSING OFFICER TO INVOKE SEC. 147 R.W.S. 148 OF THE ACT. LEARNED AUTHORIZED REPRESENTATIVE ON THE OTHER HAND QUOTES THIS TRIBUN ALS DECISION IN ITA NO.345/KOL/2017 B.S. CONSULTANCY SERVICES VS. ITO DECIDED ON 06.09 .2017 THAT SUCH A DIFFERENCE IN TDS FIGURES DOES NOT AMOU NT TO ESCAPEMENT OF TAXABLE INCOME FROM BEING ASSESSED. WE FIND MERIT I N REVENUES ARGUMENTS. SUFFICE TO SAY, LEARNED CO-ORDINATE BENCH HAS ADJUD ICATED UPON MERITS OF THE ISSUE WHEREAS WE ARE CONCERNED WITH LEGALITY OF THE IMPUGNED RE-OPENING. IT ITA NO.2243/KOL/2016 A.Y.2011- 12 ACIT, CIR-10(2), KOL. VS. M/S DECC ON INDIA PVT. LTD. PAGE 3 HAS ALREADY COME ON RECORD THAT THE ASSESSING OFFIC ER SET INTO MOTION THAN RE- OPENING MECHANISM ON ACCOUNT OF DIFFERENCE IN TDS C LAIMED DEDUCTED. WE QUOTE APEX COURTS LANDMARK DECISION IN ITO VS. LAKHMANI MEWAL DAS (1976) ITR 103 437 (SC) TO CONCLUDE THE SAME FORMED SUFFIC IENT TANGIBLE MATERIAL HAVING LIVE NEXUS WITH THE ADDITION IN ISSUE TO INV OKE SEC. 147 R.W.S 148 PROCEEDINGS. WE THUS REVERSE CIT(A)S FINDINGS ON T HIS LEGAL ISSUE. 6. BOTH THE PARTIES URGE AT THIS STAGE THAT CIT(A) HAS ADMITTEDLY NOT ADJUDICATED UPON MERITS OF THE VARIOUS ISSUES RAISE D IN THE COURSE OF LOWER APPELLATE PROCEEDINGS. WE THEREFORE RESTORE THE INS TANT LIS BACK TO THE CIT(A) FOR ADJUDICATING UPON ASSESSEES OTHER SUBSTANTIVE GROUNDS ON MERITS. 7. THIS REVENUES APPEAL IS ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT 26/12/2018 SD/- SD/- ( %) (' %) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 26 / 12 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT- ACIT, CIRCLE-10(2), P-7, CHOWRINGHEE SQ . 3 RD FL, KOLKATA-69 2. /RESPONDENT-M/S DECCON INDIA PVT. LTD. BA-46, SUKHS AGAR VILLA, SALT LAKE CITY, KOLKATA- 64 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ / 3,