M/s.Gangabisan Murlidhar Maniyar, Ahmednagar V. Income-tax Officer, Ward - 2, Ahmednagar

ITA 2340/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1709 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 05-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Keywords: Reopening of assessment; Accommodation entries; Set aside
• Section: 148; 143(3); 234B

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. . / ITA NO.2340/PUN/2017 / ASSESSMENT YEAR : 2007-08 M/S. GANGABISAN MURALIDHAR MANIYAR, 68, MARKET YARD, AHMEDNAGAR. PAN : AADFG0536A. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD-2, AHMEDNAGAR. . . / RESPONDENT ASSESSEE BY : SHRI S.N. PURANIK. REVENUE BY : SHRI M.K. VERMA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) 2, PUNE DATED 10.08.2 017 FOR THE ASSESSMENT YEAR 2007-08. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF WHOLESALE BUSINESS AND COMMISSION AGENT OF CHILLI, CORIANDER ETC. THE AO ON THE BASIS OF FINDINGS IN THE CASE OF SHRI ASHOK PHULCHAND KOTHARI FOUND SEVERAL DISCREPANCIES IN TH E CASE OF THE ASSESSEE AND ACCORDINGLY, THE CASE OF THE ASSESSE E WAS REOPENED / DATE OF HEARING : 19.12.2018 / DATE OF PRONOUNCEMENT: 18.03.2019 2 ITA NO.2340/PUN/2017 BY ISSUING NOTICE U/S 148 TO THE ACT. IN RESPONSE TO T HE NOTICE U/S 148 OF THE ACT, ASSESSEE VIDE LETTER DATED 01.01.2010 SU BMITTED THAT THE RETURN OF INCOME FILED BY THE ASSESSEE ON 31.10.2017 B E TREATED AS RETURN IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. TH EREAFTER, THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AND ASS ESSMENT WAS FRAMED U/S 143(3) R.W.S 147 OF THE ACT VIDE ORDER DATED 21 .12.2010 AND THE TOTAL INCOME WAS DETERMINED AT RS.19,70,819/-. AGG RIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD .CIT(A) WHO VIDE ORDER DATED 10.8.2017 (IN APPEAL NO.PN/CIT(A)-2/DCIT CIR/AN/259/2016-17) GRANTED PARTIAL RELIEF TO THE ASSESSE E. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW BEFORE US AN D HAS RAISED THE FOLLOWING GROUNDS : 1. COMMISSIONER (APPEAL) HAS ERRED IN REJECTING APPELLANTS CONTENTION THAT ASSESSMENT ORDER PASSED BY ASSESSING OFFICER U/S 143(3) R.W.S 147/148 IS BAD IN LAW . APPELLANT PRAYS TO HELD THAT ASSESSMENT ORDER IS BAD IN LAW. 2. COMMISSIONER (APPEALS) HAS ERRED BOTH ON FACTS AS WE LL AS IN LAW IN CONFIRMING ADDITION OF RS.10,23,422/ - TO TH E RETURNED INCOME MADE BY ASSESSING OFFICER UNDER THE CAPTION' ADDITION ON ACCOUNT OF BOGUS ACCOMMODATION ENTRIES' . SAME MAY PLEASE BE DELETED. 3. COMMISSIONER (APPEALS) HAS ERRED BOTH ON FACTS AS WE LL AS IN LAW IN CONFIRMING DISALLOWANCE OF RS.58000/- OUT OF SALARY PAID TO RAHUL MANIYAR AND MAYUR MANIYAR APPLYING THE PROVISIONS OF SEC. 40A(2)(B). SAME MAY PLEASE BE DELETE D. 4. APPELLANT PRAYS FOR JUST AND EQUITABLE RELIEF. 5. APPELLANT DENIED LIABILITY TO INTEREST U/S 234B & 234C. 6. APPELLANT PRAYS FOR JUST AND EQUITABLE RELIEF. 7. ASSESSEE PRAYS TO ADD, ALTER, AMEND, CLARIFY AND / OR WITHDRAW THE GROUNDS AS THE OCCASION MAY DEMAND. 3. 1 ST GROUND IS WITH RESPECT TO CHALLENGING THE ASSESSMENT FRA MED U/S 143(3) R.W.S 147 OF THE ACT. 3 ITA NO.2340/PUN/2017 BEFORE US, LD AR SUBMITTED THAT IN RESPONSE TO THE NOTIC E U/S 148, ASSESSEE VIDE LETTER DATED 01.01.2010 SUBMITTED TH AT THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE BE TREATED AS RET URN OF INCOME IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. HE SUBMITT ED THAT THEREAFTER, ASSESSEE VIDE LETTER DATED 14.01.2010 WHICH W AS SUBMITTED IN THE OFFICE OF DCIT ON 15.01.2010 HAD SOUGHT THE COPY OF THE REASONS THAT WERE RECORDED FOR REOPENING THE CASE BUT ASSESSEE DID NOT RECEIVE THE REASONS TILL THE COMPLETION OF ASSESSMENT ORDER. IN SUPPORT OF HIS CONTENTION THAT THE REASONS WERE SOUGHT , HE POINTED TO THE COPY OF THE ACKNOWLEDGED COPY OF THE LETTER DATED 14.01.2010 WHICH IS PLACED ON PAGE 92 OF THE PAPER BOOK. HE ALSO POIN TED TO THE COPY OF THE AFFIDAVIT OF SHRI HARIKISHAN GANGABISAN MANIYAR, T HE PARTNER OF THE ASSESSEE FIRM, WHICH IS PLACED AT PAGES 133 & 134 OF THE PAPER BOOK IN SUPPORT OF HIS CONTENTION THAT THE CO PY OF THE REASONS WERE NEVER SUPPLIED TO THE ASSESSEE. HE RELYING ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF GKN DRIVESHA FTS (INDIA) LTD. V. ITO [2003] 259 ITR 19 (SC) SUBMITTED THAT FURNISHING THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT IS MAN DATORY CONDITION AND IT IS NOT AN EMPTY FORMALITY. HE THEREAFTER RE LYING ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V S. VIDESH SANCHAR NIGAM LTD. [2012] 340 ITR 66 (BOM) SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT FAILURE TO FURNISH THE RE CORDED REASONS FOR ISSUE OF REOPENING NOTICES TO THE ASSESSEE B EFORE COMPLETION OF THE ASSESSMENT PROCEEDINGS WOULD MAKE THE REASSESSMENT ORDER PASSED IN PURSUANCE OF SUCH A NOTIC E BAD IN LAW. HE THEREFORE SUBMITTED THAT THE REASSESSMENT ORDER PA SSED BY THE AO 4 ITA NO.2340/PUN/2017 BE SET ASIDE. LD DR ON THE OTHER HAND SUBMITTED THAT SINCE THE ASSESSEE HAD PARTICIPATED IN THE PROCEEDINGS BEFORE THE ASSESSING OFFICER, IT MUST BE IMPLIED THAT REASONS WERE FURNISHED. HE T HUS SUPPORTED THE ORDER OF LOWER AUTHORITIES. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT GROUND THE ASSESSEE IS CHALLE NGING THE REASSESSMENT FRAMED U/S 143(3) R.W.S 148 OF THE ORDER. BE FORE US, IT IS ASSESSEES CONTENTION THAT THE REASONS FOR REOPENING THE ASSESSMENT WAS NEVER FURNISHED TO THE ASSESSEE DESPITE HAVING ASKE D FOR IT. IN SUPPORT OF HIS CONTENTION THAT ASSESSEE HAD SOUGHT TH E REASONS FROM THE AO AND WERE NEVER FURNISHED TO THE ASSESSEE, HE HA S POINTED TO THE LETTER WRITTEN TO THE AO AND THE SWORN AFFIDAVIT OF TH E PARTNER TO THAT EFFECT. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIA L ON RECORD TO DEMONSTRATE THAT THE REASONS RECORDED FOR REOPENIN G THE ASSESSMENT WAS FURNISHED TO THE ASSESSEE. IN THE PRESE NT CASE IT IS THUS CLEAR THAT DESPITE THE REQUEST BY THE ASSESSEE, T HE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT WITHOUT FURNISHING THE REASONS RECORDED FOR REOPENING OF ASSESSMENT. FURNISHING THE REAS ONS RECORDED FOR REOPENING OF THE ASSESSMENT IS MANDATORY C ONDITION AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF GKN DR IVESHAFTS (INDIA) LTD. VS. ITO [2003] 259 ITR 19 (SC) WHEREIN THE HON 'BLE SUPREME COURT HAS LAID DOWN THE PRINCIPLE THAT RECORDED REASONS MUST BE FURNISHED TO THE ASSESSEE WHEN THE ASSESSEE S OUGHT FOR THE REASONS. 5 ITA NO.2340/PUN/2017 5. WE FURTHER FIND THAT HONBLE BOMBAY HIGH COURT IN TH E CASE OF CIT VS. TREND ELECTRONICS (2015) 379 ITR 456 (BOM) AFTER CO NSIDERING THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF C IT VS. VIDESH SANCHAR NIGAM LTD (2012) 340 ITR 66 (BOM) HAS HELD THAT RECORDED REASONS AS LAID DOWN BY THE APEX COURT MUST BE FURNISHED TO THE ASSESSEE WHEN SOUGHT FOR SO AS TO ENABLE THE A SSESSEE TO OBJECT TO THE SAME BEFORE THE AO. IT HAS FURTHER HELD THAT THE RECORDING OF REASONS AND FURNISHING OF THE SAME HAS TO BE STRICTLY C OMPLIED WITH AS IT IS A JURISDICTIONAL ISSUE AND IN THE ABSENCE OF REASONS BEING FURNISHED WHEN SOUGHT FOR WOULD MAKE AN ORDER PASSED ON REASSESSMENT BAD IN LAW. 6. BEFORE US, REVENUE HAS NOT PLACED ANY CONTRARY BINDIN G DECISION IN ITS SUPPORT. CONSIDERING THE TOTALITY OF THE AFORE SAID FACTS AND RELYING ON THE DECISIONS CITED HEREIN ABOVE, WE HOLD T HE REASSESSMENT ORDER PASSED BY THE AO TO BE BAD IN LAW AND THUS SET IT ASIDE. SINCE WE HAVE SET ASIDE THE RE-ASSESSMENT ORDER , THE GROUNDS RAISED ON MERITS REQUIRES NO ADJUDICATION AS THEY HAVE B EEN RENDERED ACADEMIC. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 18 TH DAY OF MARCH, 2019. SD/- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 18 TH MARCH, 2019. YAMINI 6 ITA NO.2340/PUN/2017 #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-2, PUNE. PR. CIT-1, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.