M/s. J.B. Trading Company, Ghaziabad V. ITO, New Delhi

ITA 2338/DEL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7210 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 3
• Next Hearing Date: 18-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 21-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ABHISHEK ANAND S; RUPESH GUPTA
• Keywords: Reason to believe
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-3 : NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO.2338/DEL/2015 ASSESSMENT YEAR : 2005-06 J.B. TRADING COMPANY, E-41, RADHA KUNJ, BRIJ VIHAR, GHAZIABAD. PAN: AAFFJ1891F VS. ITO, WARD -1(3), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RUPESH GUPTA, & SHRI ABHISHEK ANAND, ADVOCATES DEPARTMENT BY : SHRI RAJESH KUMAR, SR. DR DATE OF HEARING : 28.07.2016 DATE OF PRONOUNCEMENT : 30.08.2016 ORDER THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A) DATED 27.02.2015 FOR THE ASSESSMENT YEAR 2005-06. ITA NO.2338/DEL/2015 2 2. AFTER HEARING THE RIVAL CONTENTIONS, I FIND THAT THE ASSESSEE HAS ORIGINALLY FILED ITS RETURN OF INCOME ON 28.10.2005 . THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 4.10.2007. NOTICE FOR REOP ENING OF ASSESSMENT U/S 148, AFTER RECORDING REASONS FOR REOPENING WAS ISSUED ON 28.3.2012, WHICH IS ADMITTEDLY BEYOND A PERIOD OF FOUR YEARS F ROM THE END OF THE ASSESSMENT YEAR. THE REASONS RECORDED FOR REOPENIN G ARE AT PAGE 16 OF THE PAPER BOOK WHICH IS EXTRACTED BELOW:- REASONS FOR ISSUE OF NOTICE U/S 148 IN THE CASE OF M/S J.B. TRADING CO., A-72, CHANDER NAGAR, GHAZIABAD. A.Y. 2005-06 ( PAN AAFPG5955F) THE ASSESSEE ENJOYS INCOME FROM BUSINESS OF TRADING OF ZIPPERS. RETURN FOR THE AY 2005-06 DECLARING TOTAL INCOME OF RS.13,420/- WAS FILED ON 28.10.2005. ASSESSMENT IN THIS CASE WAS C OMPLETED U/S 143(3) ON RETURNED INCOME ON 04.10.2007. IT IS NOTICED THAT THE ASSESSEE HAS DECLARED COMMIS SION RECEIPT OF RS.1,18,427/- IN ITS PROFIT & LOSS ACCOUNT WHEREAS AS PER TDS CERTIFICATE ENCLOSED WITH THE RETURN, THE ASSESSEE IS IN RECEIPT OF COMMISSION OF RS.7,90,367/-. FURTHER, THE ASSESSEE HAS CLAIMED THE CREDIT OF TAX DEDUCTED ON THE SAID COMMISSION OF RS .7,90,367/-. ACCORDINGLY, COMMISSION OF RS.6,71,940/- (RS.7,90,6 37-1,18,427) WAS NOT SHOWN IN THE PROFIT & LOSS ACCOUNT WHICH WA S TO BE ADDED BACK TO THE INCOME OF THE ASSESSEE. I HAVE, THEREF ORE, REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE TO THE EXTENT OF RS .6,71,940/- HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF PROVISIONS TO SECTION 147 OF THE IT ACT, 1961. IN ORDER TO ASSESS THE ESCAPED I NCOME, PROCEEDING U/S 147 OF THE IT ACT, 1961 ARE BEING INITIATED. ITA NO.2338/DEL/2015 3 3. ONE MORE FACT THAT IS RECORDED BY THE LD.CIT(A) ON PAGE 3, PARA 2 IS AS FOLLOWS:- THIS NOTICE U/S 148 WAS RECEIVED UNSERVED WITH REM ARK OF THE POSTAL AUTHORITY LEFT RETURN. ENVELOPE CONTAINING NOTIC E RECEIVED UNSERVED ON 31.03.2012 IS AVAILABLE ON RECORD OF THE ASSESSI NG OFFICER. 4. ON THESE FACTS, WE HAVE NECESSARILY HOLD THAT TH E REOPENING IS BAD IN LAW FOR THE REASON THAT IN THE REASONS RECORDED THERE IS NO ALLEGATION THAT THE ASSESSEE HAS FAILED TO DISCLOSE FULLY AND TRULY FACTS REQUIRED FOR THE ASSESSMENT. HENCE, IN TERMS OF FIRST PROVISO T O SECTION 147, THE REOPENING IS BAD IN LAW IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF HARVANA ACRYLIC MANUFACTURING CO. VS. CIT & ANR. 308 ITR 38 (DEL). OTHER DECISIONS THAT SUPPORT THI S VIEW ARE WEL INTERTRADE PVT. LTD. VS. ITO 308 ITR 22 (DEL) AND J SRS UDYOG LIMITED AND ANOTHER VS. ITO, 313 ITR 321 (DEL). RESPECTFUL LY FOLLOWING THE DECISIONS OF THE JURISDICTIONAL HIGH COURT, WE HAVE TO HOLD THAT THE REOPENING IS BAD IN LAW AS THE AO HAS NOT ALLEGED T HAT THE ASSESSEE HAS FAILED TO DISCLOSE TRULY AND FULLY FACTS REQUIRED F OR THE ASSESSMENT AS PER THE FIRST PROVISO TO SECTION 147. EVEN OTHERWISE A LSO NOTICE U/S 148 FOR ITA NO.2338/DEL/2015 4 REOPENING HAS NOT BEEN SERVED ON THE ASSESSEE. ON THIS GROUND ALSO, THE ASSESSMENT HAS TO BE QUASHED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.08.20 16. SD/- [J. SUDHAKAR REDDY] ACCOUNTANT MEMBER DATED, 30 TH AUGUST, 2016. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.