Gujarat State Warehousing Corporation, Ahmedabad V. The Income tax Officer,Ward-4(1), Ahmedabad

ITA 2278/AHD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0820 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-08-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 09-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Difference of opinion; Reason to believe; Change of opinion
• Section: 43B; 143(3); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 2278AHD/2011 (ASSESSMENT YEAR: 2003-04) GUJARAT STATE WAREHOUSING CORPORATION LTD. SHANTISADAN ESTATE, OPP. DINBAI TOWER, MIRZAPUR, AHMEDABAD- 380001 V/S INCOME TAX OFFICER, WARD- 4 (1), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AABCG 6778P APPELLANT BY : SHRI TUSHAR P. HEMANI, AR RESPONDENT BY : SHRI K. MADHUSUDAN, SR. D.R. ( )/ ORDER DATE OF HEARING : 04 -08-201 6 DATE OF PRONOUNCEMENT : 08 -08-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)- VIII, AHMEDABAD DATED 08.07.2011 PERTAINING TO A.Y. 2003-04. ITA NO2278/A HD/2011 . A.Y. 2003-04 2 2. THE GRIEVANCE OF THE ASSESSEE IS TWOFOLD. BY GROUND NO. 1, THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE ASSESSM ENT ORDER MADE U/S. 147 OF THE ACT R.W.S. 143(3) AND BY SECOND GRO UND, THE ASSESSEE HAS CHALLENGED THE ADDITION OF RS. 20,58,050/- MADE BY THE A.O. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AT LENGTH AND H AVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 4. ASSESSEE IS IN THE BUSINESS OF WAREHOUSING AND INCI DENTAL ACTIVITIES. THE ORIGINAL ASSESSMENT WAS MADE U/S. 143(3) OF THE ACT VIDE ORDER DATED 26.09.2005, THE ASSESSMENT YEAR UNDER CONSIDE RATION IS 2003- 04. THE RETURNED LOSS OF RS. 37,09,340/- WAS ASSESS ED AT A TOTAL INCOME OF RS. 61,01,111/-. 5. THE COMPLETED ASSESSMENT WAS REOPENED BY NOTICE U/S . 148 ISSUED ON 02.09.2008. THE REASONS FOR REOPENING OF THE ASSESS MENT U/S. 147 OF THE ACT READ AS UNDER:- 1. THE ASSESSEE COMPANY HAS FILED RETURN OF INCOME 21. 11.2003 DECLARING THE TOTAL INCOME AT RS. (-) 37,09,340/-. THE ASSESSMENT WAS C OMPLETED U/S. 143(3) ON 26.09.2005 AS ASSESSED INCOME AT RS. 61,01,111/-. 2. ON VERIFICATION OF THE RECORD, IT IS SEEN THAT, AS PER 3CD REPORT, COL 21B, THE EMPLOYERS CONTRIBUTION OF PF OF RS. 1745486/- REMA INS UNPAID. AS PER THE COLUMN 16 B OF 3CD REPORT, RS. 20,58,050/- WAS DECL ARED THAT THE AMOUNT WAS NOT PAID WITHIN PRESCRIBED DATE. THE SAME IS NO ALLOWAB LE U/S. 43B OF THE INCOME TAX ACT 1961. 3. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT INCOME TO THE EXTENT OF RS. 20,58,050/- HAS ESCAPED ASSESSMENT BY WAY OF UNDER ASSESSMENT TO THAT EXTENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME-TAX ACT, 1961. ITA NO2278/A HD/2011 . A.Y. 2003-04 3 6. A PERUSAL OF THE ORIGINAL ASSESSMENT ORDER SHOWS TH AT THE A.O. HAD MADE DISALLOWANCES, INTERALIA, ON ACCOUNT OF UNPAID EMPLOYEES PF CONTRIBUTION RS. 17,45,186/- AND UNPAID LEAVE SALAR Y RS. 7,24,642/-. 7. A PERUSAL OF THE AFOREMENTIONED REASONS FOR REOPENI NG OF THE ASSESSMENT SHOWS THAT THE A.O. HAS USED THE DETAILS FROM THE VERY SAME AUDIT REPORT AND WANT TO DISALLOW RS. 20,58,05 0/- U/S. 43B OF THE ACT. 8. CONSIDERING THE DATE OF THE ORIGINAL ASSESSMENT ORD ER QUA THE ASSESSMENT YEAR UNDER CONSIDERATION QUA THE NOTICE FOR REOPENING THE ASSESSMENT CLEARLY SHOWS THAT THE REOPENING IS DONE AFTER 4 YEARS. FIRST PROVISO TO SECTION 147 SAYS THAT NO ACTION U/ S. 147 SHALL BE TAKEN AFTER THE EXPIRY OF 4 YEARS FROM THE END OF THE ASS ESSMENT YEAR WHERE AN ASSESSMENT OF THE RELEVANT ASSESSMENT YEAR HAS B EEN MADE U/S. 143(3) OF THE ACT, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF TH E FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN U/S. 139 OR I N RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR. 9. AS MENTIONED ELSEWHERE, IN THE REASONS FOR REOPENIN G OF THE ASSESSMENT A.O. HAS TAKEN THE DETAILS FROM THE VERY SAME AUDIT REPORT ON THE BASIS OF WHICH ADDITIONS WERE MADE IN THE ORIGINAL ASSESSMENT. THEREFORE, IT CAN BE SAFELY CONCLUDED T HAT THERE IS NO OMISSION/SUPPRESSION ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSME NT. ITA NO2278/A HD/2011 . A.Y. 2003-04 4 10. CONSIDERING THE FACTS IN TOTALITY, IN OUR CONSIDERE D OPINION, THE REOPENING OF THE ASSESSMENT AFTER 4 YEARS FOR THE I MPUGNED REASONS HAS TO BE TREATED AS BAD IN LAW AND ACCORDINGLY WE QUASH THE ASSESSMENT ORDER MADE U/S. 143(3) R.W.S. 147 OF THE ACT DATED 15.10.2009. 11. THE LD. D.R. HAS PLACED STRONG RELIANCE ON THE DECI SION OF THE HONBLE SUPREME COURT IN THE CASE OF MAHARAJ KUMAR KAMAL SINGH 35 ITR 1. THIS DECISION WOULD DO NO GOOD TO THE REVENU E BECAUSE IN THIS DECISION THE HONBLE SUPREME COURT HAS HELD THAT DE CISIONS OF THE COURTS WOULD AMOUNT TO INFORMATION FOR REOPENING TH E ASSESSMENT. IN THE CASE IN HAND, THERE IS NO SUCH MENTION IN THE R EASONS RECORDED BY THE A.O. THAT ANY FAVORABLE DECISION WAS AVAILABLE IN FAVOUR OF THE REVENUE. 12. THE LD .D.R. FURTHER RELIED UPON THE DECISION OF TH E HONBLE HIGH COURT OF DELHI IN THE CASE OF DALMIA PVT. LTD. 14 T AXMANN.COM 106. THIS DECISION WILL ALSO BE OF NO AVAIL TO THE REVEN UE BECAUSE IN THIS DECISION, THE HONBLE HIGH COURT HAS HELD THAT WHEN THERE IS NO DISCUSSION, GROUND OR REASON GIVEN IN THE ASSESSMEN T ORDER AS TO WHY THE IMPUGNED ADDITIONS WAS NOT MADE IN SPITE OF FAI LURE OF ASSESSEE TO FURNISH CONFIRMATION AND DETAILS. IT WAS NOT A CASE OF CHANGE OF OPINION. AS MENTIONED ELSEWHERE, IN THE CASE IN H AND, THE A.O. WANT TO MAKE THE ADDITIONS FROM THE DETAILS OF THE VERY SAME AUDIT REPORT ON THE BASIS OF WHICH THE ADDITIONS WERE MADE IN TH E ORIGINAL ASSESSMENT. ANOTHER DECISION RELIED UPON BY THE LD. D.R. IS OF THE HONBLE HIGH COURT OF ANDHRA PRADESH NOVAPON INDIA LTD. 236 ITR 746. AGAIN, THE FACTS ARE CLEARLY DISTINGUISHABLE A S IN THIS CASE, THE HONBLE HIGH COURT HAS HELD THAT JUDGMENTS THAT ARE RELEVANT BUT NOT ITA NO2278/A HD/2011 . A.Y. 2003-04 5 CONSIDERED AT THE TIME OF ORIGINAL ASSESSMENT WOULD CONSTITUTE INFORMATION. THIS DECISION IS IN THE LINE OF THE DE CISION OF THE HONBLE SUPREME COURT GIVEN IN THE CASE OF MAHARAJ KUMAR KA MAL SINGH (SUPRA). AS MENTIONED ELSEWHERE, NEITHER THE A.O. HAS GIVEN ANY DECISION IN FAVOUR OF THE REVENUE IN THE REASONS RE CORDED NOR ANY DECISION WAS AVAILABLE AT THAT POINT OF TIME. 13. CONSIDERING THE FACTS IN TOTALITY AND DISTINGUISH ING THE JUDICIAL DECISIONS RELIED UPON BY THE LD. D.R. IN OUR CONSID ERED OPINION, THE REASSESSMENT ORDER DESERVES TO BE QUASHED AND WE AC CORDINGLY QUASH THE SAME. 14. BEFORE PARTING, IT WOULD BE PERTINENT TO MENTION HE RE THAT THE DISALLOWANCES MADE IN THE ORIGINAL ASSESSMENT YEAR WHICH ALSO INCLUDED THE DISALLOWANCES ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND TRAVELLED UP TO THE TRIBUNAL. THERE FORE, THE ORIGINAL ASSESSMENT ORDER MERGED WITH THE ORDER OF THE TRIBU NAL. HENCE, NOW, IT IS NOT OPEN FOR THE A.O. TO REOPEN THE CASE FOR DISALLOWING OUTSTANDING AMOUNT TO EMPLOYEES CONTRIBUTION TO PR OVIDENT FUND. 15. SINCE, WE HAVE QUASHED THE REASSESSMENT ORDER ITSEL F; WE DO NOT FIND IT NECESSARY TO DWELL INTO THE MERITS OF THE C ASE. 16. APPEAL FILED BY THE ASSESSEE IS ACCORDINGLY ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON 08 - 08- 201 6. SD/- SD/- (R.P. TOLANI) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY