ITO, Virudhunagar V. M/s. Vayanaperumal Nadar Oil Mills, Virudhunagar

ITA 2422/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8058 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 22-08-2016
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHIJCIT
• Keywords: Reopening of assessment; Depreciation; Reassessment proceedings
• Section: 147; 148

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ I.T.A.NO.2422 /MDS./2016 ( / ASSESSMENT YEAR :2011-12) ITO, WARD-2, VIRUDHUNAGAR. VS. M/S.VAYANAPERUMAL NADAR OIL MILLS , 4431,K KS S N NAGAR, KUMARAPURAM ROAD, VIRDHUNAGAR.626 001 PAN AAAAK 0847 J ( / APPELLANT ) ( / RESPONDENT ) ! ' # / APPELLANT BY : MR. ASHISH TRIPATHI,JCIT, D.R $% ! ' # / RESPONDENT BY : NONE & ' ' ( ) / DATE OF HEARING : 21.11.2016 *+ ' ( ) /DATE OF PRONOUNCEMENT : 21.11.2016 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE, AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-3, MADURAI D ATED 30.05.2016 IN ITA NO.0041/2015-16 PASSED UNDER SEC.144 & SEC. 147 OF THE ACT. ITA NO.2422 /MDS/2016 2 2. THE MAIN GRIEVANCE OF REVENUE IN ITS APPEAL IS THAT LD.CIT(A) ERRED IN HOLDING THAT THE AO IS BARRED FROM INITIATING RE ASSESSMENT PROCEEDING U/S.147 OF THE ACT WHEN THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S.143(2) OF THE ACT HAD NOT EXPIRED. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A TRADER IN COTTON SEED AND OIL AND FILED RETURN OF INCOME ON 12.10.20 12 ADMITTING NIL INCOME. THE AO ISSUED NOTICE U/S.148 OF THE ACT ON 20.09.2013 AFTER RECORDING REASONS THEREIN. ACCORDING TO THE AO FIN DINGS IN ISSUANCE OF NOTICE U/S.148, THERE IS HUGE DEPOSITS OF MORE THAN RS.70 LAKHS IN SB ACCOUNT OF TAMILNADU MERCANTILE BANK, VIRUDHUNAGAR. FOR VERIFYING THE CORRECTNESS OF DEPRECIATION CLAIMED IN CURRENT YEAR AND CARRIED FORWARD IN EARLIER YEARS, THE AO REOPENED THE ASSESSMENT U/S. 148 OF THE ACT. IN RESPONSE TO NOTICE, THE ASSESSEE FILED ITS RETURN O F INCOME ON 14.11.2013 ADMITTING NIL INCOME AS IN THE ORIGINAL RETURN. THE REFORE, AO COMPLETED THE ASSESSMENT U/S.144 R.W.S.147 BY ADDING THE PEAK CR EDIT IN THE BANK ACCOUNT. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BE FORE THE LD.CIT(A). ON APPEAL, THE LD.CIT(A) OBSERVED THAT THE REASONS RECORDED BY THE AO CANNOT FORM THE BASIS FOR REOPENING OF ASSESSMENT. FURTHER, CIT(A) OBSERVED THAT THE ASSESSEE MAINTAINED REGULAR BOOKS OF ACCOUNTS WHICH WERE AUDITED U/S.44AB AND TAX AUDIT REPORT WAS FILE D ALONG WITH THE RETURN ITA NO.2422 /MDS/2016 3 OF INCOME. ACCORDING TO LD.CIT(A), THE BANK BALANC E WITH THE BANK IS TALLYING WITH THE BALANCE SHEET FIGURE. FURTHER, CI T(A) OBSERVED THAT THE AO COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT BY ISSUING NOTICE U/S.143(2) AND THERE WAS NO NECESSITY FOR ISSUING N OTICE U/S.147 OF THE ACT. BY FOLLOWING THE JUDGEMENT OF JURISDICTIONAL HIGH C OURT IN THE CASE OF CIT VS. QUTTALYS SOFTWARE TECHNOLOGIES LTD (308 ITR 249 ), CIT(A) HELD THAT REASSESSMENT PROCEEDINGS WAS NOT VALID ONE. AGGRIE VED, THE REVENUE IS IN APPEAL BEFORE US. 4. NONE APPEARED ON BEHALF OF THE ASSESSEE. WE HAV E HEARD THE LD.D.R AND PERUSED THE MATERIAL ON RECORD. IN OUR OPINION, THERE IS A VALID RETURN PENDING BEFORE THE AO FOR THE ASSESSMENT YEA R UNDER CONSIDERATION. THE AO NOT ISSUED A NOTICE FOR COMP LETING THE ASSESSMENT UNDER REGULAR COURSE U/S.143(3) OF THE ACT. IN OTHE R WORDS, THE REGULAR ASSESSMENT WAS NOT OVER AND THERE IS A TIME LIMIT TO ISSUE NOTICE U/S.143(2) OF THE ACT TO COMPLETE THE ASSESSMENT U /S.143(3) OF THE ACT. ON THE OTHER HAND, THE AO ISUSED NOTICE U/S.148 OF THE ACT SO AS TO REOPEN THE ASSESSMENT U/S.147 OF THE ACT ON THE REASON TH AT THERE IS ESCAPEMENT OF INCOME. AS HELD BY THE JURISDICTIONAL HIGH COUR T IN THE CASES OF CIT VS. QUTTALYS SOFTWARE TECHNOLOGIES LTD (308 ITR 249) AN D MR.K.M.PACHAYAPPAN(304 ITR 264), THE AO COULD NOT R EOPEN THEAST ITA NO.2422 /MDS/2016 4 U/S.148 OF THE ACT, WHEN THERE IS A TIME LIMIT AVAI LABLE TO THE AO TO ISSUE NOTICE U/S.143(2) OF THE ACT SO ASSESSMENT ORDER C OMPLETE THE REGULAR ASSESSMENT U/S.143(3) OF THE ACT. BEING SO, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A), THE SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON 21 ST NOVEMBER, 2016 AT CHENNAI. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 21 ST NOVEMBER, 2016 . K S SUNDARAM. , ' $(-. /.( /COPY TO: 1. ! /APPELLANT 2. $% ! /RESPONDENT 3. & 0( () /CIT(A) 4. & 0( /CIT 5. .3 4 $(5 /DR 6. 4 6 7 ' /GF