DCIT, Mehsana Circle, Mehsana V. The Mehsana Dist. Central Co.op. Bank Ltd., Mehsana

ITA 2272/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6781 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 16-10-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 11-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Keywords: Reopening of assessment; TDS; Set aside
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE DCIT, MEHSANA CIRCLE, MEHSANA (APPELLANT) VS THE MEHSANA DIST. CENTRAL CO - OP. BANK LTD. RAJMAHAL ROAD, MEHSANA - 384001 PAN: AAAAT1109N (RESPONDENT) REVENUE BY : S H RI L.P. JAIN , SR. D . R. ASSESSEE BY: SMT. ARTI SHAH , A.R. DATE OF HEARING : 11 - 07 - 2 019 DATE OF PRONOUNCEMENT : 12 - 07 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S AP PEAL FOR A.Y. 2007 - 08 , ARI SES FROM ORDER OF THE CIT(A) - 7, AHMEDABAD DATED 26 - 07 - 2 017 , IN PROCEEDINGS UNDER SECTION 2 4 6A OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2 . THE SOLITARY GROUND OF APPEAL OF THE REVENUE IS FILED AGAINST THE DECISION OF LD. CIT(A) IN SET ASIDE THE NOTICE FOR REOPENING THE ASSESSMENT U/S. 147 OF THE ACT. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS BROUGHT TO OUR NOTICE THAT THIS ISSUE HAS BEEN ADJUDICATED BY I T A NO . 2272 / A HD/20 17 A SS ESSMENT YEAR 2007 - 08 I.T.A NO. 2272 /AHD/20 17 A.Y. 2007 - 08 PAGE NO DCIT VS. THE MEHSANA DIST. CENTRAL CO - OP. BANK LTD. 2 THE HON BLE HIGH COURT OF GUJARAT VIDE SPECIAL CIVIL APPLICATION NO. 8343 OF 2013 IN FAVOUR OF THE ASSESSEE. WITH THE ASSISTANCE OF LD. REPRESE NTATIVES, WE HAVE GONE THROUGH THE DECISION OF HON BLE GUJARAT HIGH COURT ON THE INSTANT ISSUE WHICH IS IN THE APPEAL FILED BY THE REVENUE. RELEV ANT PART OF THE DECISION OF THE HON BLE GUJARAT HIGH COURT IS REPRODUCED AS UNDER: - 11. IN OUR OPINION, T HE VERY ACTION OF THE ASSESSING OFFICER TO DEAL WITH THE OBJECTIONS OF THE PETITI ONER IN THE FINAL ORDER OF REASSESSMENT, RUNS CONTRARY TO THE JUDGMEN T OF THE SUPREME COURT IN CASE OF GKN DRIVESHAFTS (INDIA) LTD. V. ITO AND ORS. REPORTED IN [2003] 259 ITR 90 (SC). HOWEVER, THERE IS YET ANOTHER WEIGHTY REASON WHY WE CANNOT PERMIT THE PROCESS OF REOPENING OF ASSESSMENT TO STAND. SUCH REASON IS THAT APPARENTLY, THE ASSESSING OFF ICER WAS ACTING UNDER THE COMPULSION OF THE AUDIT PARTY. AS NOTED, THE AUDIT PARTY RAISED ITS OBJECTIONS ON 16.01.2012. WHILE ISSUING NOT ICE FOR REOPENING ON 26.03.2012, THE ASSESSING OFFICER HAD CITED TH ESE THREE VERY REASONS. SUBSEQUENTLY ON 24.05.2012, HE SENT A DETAILED NOTE TO THE AUDIT PARTY, JUSTIFYING WHY THE AUDIT OBJECTIO NS SHOULD BE DROPPED. ITIS TRUE THAT IN THE PRESEN T CASE SUCH RESISTANCE FROM THE ASSESSING OFFICER CAME AFTER THE NOTICE FOR REOP ENING. NEVERTHELESS, IF WE SEE ENTIRE SEQUENCE, IT BECOMES CLEAR THAT THE ASSESSING OFFICER WAS CLEARLY ACTING UNDER THE D ICTATES OF THE AUDIT PARTY. EVEN AFTER ISSUING THE NOTICE, HE STILL MAINTAINED AN OPINION THAT NO INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. IF THAT BE SO, HE OUGHT TO HAVE DROPPED THE ASSESSMENT PROCEEDINGS , AT LEAST AT THAT STAGE WHEN THE PETITIONER RAISED THE OBJECTIONS WHICH EVEN WITHOUT SUCH OBJECTIONS, THE ASSESSING OFFICER WAS CONVINCED, WERE VALID. 12. IN CASE OF JAGAT JAYANTILAL PARIKH V. DEPUTY COMMISSIONER O F INCOME - TAX REPORTED IN [2013] 355 ITR 400 (GUJ), DIVISION B ENCH OF THIS COURT HAD OBSERVED AS UNDER: UNDER THE CIRCUMSTANCES, IT CLEARLY EMERGES FROM THE RECORD THAT THE ASSESSING OFFICER WAS OF THE OPINION THAT NO PART OF THE INCOME OF TH E ASSESSEE HAS ESCAPED ASSESSMENT. IN FACT, AFTER THE AUDIT PARTY BROUGHT THE RELEVANT ASPECTS TO THE NOTICE OF THE AO, SHE HELD CORRESPONDENCE WITH THE ASSESSEE. TAKING INTO ACCOUNT THE ASSESSEE'S EXPLANATION REGARDING NON RE QUIREMENT OF TDS COLLECTION AND ULTIMATELY ACCEPTED THE EXPLANATION CONCLUDING THAT IN VIEW OF THE BOARD'S CIRCULAR, TAX WAS NOT REQUIRED TO BE DEDUCTED AT SOURCE. NO INCOME HAD THEREFORE ESCAPED ASSESSMENT. DESPITE SUCH OPINION OF THE ASSESSING OFFICER, WHEN ULTIMATELY THE IMPUGNED NOTICE CAME TO BE ISSUED THE ONLY CONCLUSION WE CAN REACH IS THAT THE ASSESSING OFFICER HAD AC TED AT THE BEHEST OF AND ON THE INSISTENCE OF THE AUDIT P ARTY. IT IS WELL SETTLED THAT IT IS ONLY THE ASSESSING OFFICER WHO SE OPINION WITH RESPECT TO THE INCOME ESCAPING ASSES SMENT WOULD BE RELEVANT FOR THE PURPOSE OF REOPENING OF CLOSED ASSESSMENT. IT IS, OF COURSE TRUE, AS HELD BY THE DECISIONS OF THE APEX COURT IN THE CASE OF P.V.S.BEEDIES PVT. LTD. (SUPRA) AND INDIAN & EASTERN NEWSPAPER SOCIETY (SUPRA), IF THE AUDIT PARTY BRINGS CERTAIN ASPECTS TO THE NOTICE OF THE ASSESSING OFFICER AND THEREUPON, THE ASSESSING OFFICER FORMS HIS OWN BELIEF, IT MAY STILL BE A VALID BASIS FOR REOPENING ASSESSMENT. HOWEVER, IN THE OTHER LINE OF JUDGMENT NOTED BY US, IT HAS CLEARLY BEEN HELD THAT MERE OPINION OF THE AUDIT PARTY CANNOT F OR M THE BASIS FOR THE ASSESSING OFFICER TO REOPEN THE CLOSED ASSESSMENT THAT TOO BEYOND FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR. 13. IN THE RESULT, PETITION IS ALLOWED. IMPUGNED NOTICE FOR REOPENING DATED 26.03.2012 IS SET ASID E. PETITION IS DISPOSED OF. I.T.A NO. 2272 /AHD/20 17 A.Y. 2007 - 08 PAGE NO DCIT VS. THE MEHSANA DIST. CENTRAL CO - OP. BANK LTD. 3 RESPECTFULLY FOLLOWING THE DECISION OF HON BLE GUJARAT HIGH COURT ON THE ISSUE WHICH IS RAISED IN THE APPEAL OF THE REVENUE, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE. AC CORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 1 2 - 07 - 201 9 SD/ - SD/ - ( MAHAVIR PRASAD ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 12 /07 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,