Biseswar Pandey, Hooghly V. ITO, Wd-2(2), Hooghly, Hooghly

ITA 246/KOL/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4561 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 04-07-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 11-02-2014
• Court: TRIBUNAL
• Department Lawyers: RAJAT KUMAR KUREEL
• Keywords: Presumptive income; Depreciation; Tangible material; Difference of opinion; Assessment record; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

ITA NO.246/KOL/2014-BISESWAR PANDEY-A.Y.2007-08 1 IN THE INCOME TAX APPELLATE TRIBUNAL SMC BE NCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM ] I.T.A NO.246/KOL/2014 ASSESSMENT YEAR : 2007-0 8 BISESWAR PANDEY -VS.- I.T.O., WARD-2(2) HOOGHLY HOOGHLY (PAN:AFKPP 8794 D) (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SOMNATH GHO SH, ADVOCATE FOR THE RESPONDENT : SHRI RAJAT KUMAR KU REEL, JCIT DATE OF HEARING : 04.07.2016. DATE OF PRONOUNCEMENT : 08.07.2016. ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 30.12.2013 OF CIT(A)-XXXVI, KOLKATA, RELATING TO AY 2007-08. 2. THE ASSESSEE IS AN INDIVIDUAL. HE IS ENGAGED IN THE BUSINESS OF WHOLESALE TRADING IN POTATO SEEDS AND ALSO EARNED INCOME FROM PLYING HIS TRUCK ON HIRE. FOR AY 2007- 08, THE ASSESSEE FILED RETURN OF INCOME U/S. 139(1) OF THE INCOME TAX ACT. 1961 (ACT) ON 31-10-2007, DISCLOSING TOTAL INCOME OF RS.4.00,5 70/-. THE ASSESSEE HAD INCURRED EXPENSE IN THE AMOUNT OF RS. 18,45,600/- ON ACCOUNT OF TRANSPORTATION OF POTATO SEEDS FROM PUNJAB. THIS WAS SHOWN AS PART OF THE PURCHAS E COST AND INCORPORATED IN THE PURCHASE ACCOUNT AND THE PURCHASES SHOWN IN THE BOO KS OF ACCOUNTS BY THE ASSESSEE AT RS.1,70,73.975/- WAS INCLUSIVE OF THE TRANSPORTATIO N EXPENSES. IN THE COURSE OF THE ORIGINAL ASSESSMENT PROCEEDINGS U/S.143(3) OF THE A CT, THE AO, MADE ENQUIRIES IN RESPECT OF THE TRANSPORTATION COST INCURRED BY THE ASSESSEE. IN REPLY TO THE QUERY OF THE AO, THE ASSESSEE GAVE DETAILS OF EXPENSES INCURRED ON THIS ACCOUNT AND PRODUCED BILLS AND VOUCHERS IN SUPPORT OF THE AFORESAID EXPENSES. IN THE ORDER OF ASSESSMENT FRAMED U/S.143(3) OF THE ACT DATED 31.12.2009, THE ASSESSI NG OFFICER HAD VERIFIED SUCH TRANSACTIONS AND RECORDED HIS SATISFACTION AS FOLLO WS: IN REGARD OF THE TRANSPORT CHARGES FOR POTATO SE EDS PURCHASED FROM PUNJAB FOR WHICH CONSIDERABLE AMOUNT OF CARRYING CHARGES FOR L ONG DISTANCE (PUNJAB TO ITA NO.246/KOL/2014-BISESWAR PANDEY-A.Y.2007-08 2 HOOGHLY), THE ASSESSEE HAVE INCURRED WHICH HAS BEEN EXPLAINED BY THE A/R. DISCUSSED AND HEARD.... THE LD. ASSESSING OFFICER THEREAFTER FRAMED THE ASS ESSMENT ORDER U/S. 143(3) OF THE ACT DETERMINING THE TOTAL INCOME AT RS.4,08.470/- B Y RESORTING TO A DISALLOWANCE IN THE AMOUNT OF RS. 8,100/- OUT OF 'CAR RUNNING EXPENSE' TO THE INCOME RETURNED BY THE ASSESSEE. THE ORDER OF ASSESSMENT WAS PASSED ON 31 .12.2009. 3. THE AO ADDRESSED A LETTER DATED 22.6.2011 TO TH E ASSESSEE IN WHICH, THE AO RAISED TWO OBJECTIONS TO THE ORDER OF ASSESSMENT DATED 31. 12.2009 FRAMED BY HIM U/S.143(3) OF THE ACT VIZ., 1. ACCORDING TO THE AO, O N SCRUTINY OF THE ASSESSMENT RECORDS, IT WAS NOTICE D BY HIM THAT THE ASSESSEE HAD DECLARED INCOME FROM THE BUSI NESS OF PLYING, HIRING GOODS CARRIAGE AT RS.50,000/- U/S.44AE OF THE ACT. THE A O NOTICED FROM THE BALANCE SHEET OF THE ASSESSEE THAT THE ASSESSEE OWNED 3(THREE) VEHIC LES I.E 1.'I'RUCK 2.MARUTI 3.IN NOVA. ACCORDING TO THE AO U/S..44AE OF THE ACT, PROFITS A ND GAINS HAVE TO BE COMPUTED BY APPLYING PRESUMPTIVE INCOME FOR HEAVY GOODS VEHICLE AT RS.3500/- PER MONTH AND OTHER VEHICLES AT RS.3150/- P.M. SINCE THE ASSESSEE OWNE D ONE TRUCK AND TWO OTHER VEHICLES, ACCORDING TO THE AO INCOME OF RS.1,17,600/- OUGHT T O HAVE BEEN DECLARED FROM THE SAID BUSINESS BY THE ASSESSEE , WHEREAS ONLY RS.50,000/- HAD BEEN DECLARED BY THE ASSESSEE. HENCE, ACCORDING TO THE AO THERE WAS ESCAPEMENT OF INCOME OF RS.67,600/ (RS.117600- RS.50000 ). 2. THE ASSESSEE HAD INCURRED TRANSPORT /CARRIAGE I NWARD CHARGES OF RS.18,45,600/-. A SUM OF RS.16,43,100/- OUT OF THE TRANSPORTATION CHA RGES WAS PAYMENT TO TRANSPORTER IN EXCESS OF RS.20,000/-IN EACH TRANSACTION OR AGGREGA TE OF PAYMENTS MADE DURING THE PREVIOUS YEAR WAS MORE THAN RS.50,000/- AND THEREFO RE THE ASSESSEE OUGHT TO HAVE DEDUCTED TAX AT SOURCE ON THE PAYMENTS MADE TO TRAN SPORTERS U/S.194-C OF THE ACT. EVEN THE TAX AUDIT REPORT COL.NO.27(A) & (B) HAD REFERRE D TO THE FACT THAT PROVISIONS OF SEC.40 (A) (IA) OF THE ACT ON EXPENDITURE OF RS. 16,43,100 /- ON ACCOUNT OF CARRIAGE INWARD WERE ATTRACTED AND HENCE WOULD HAVE TO BE ADDED BACK TO TOTAL INCOME OF THE ASSESSEE. THIS WAS NOT LOOKED INTO WHILE COMPLETING THE ORIGINAL A SSESSMENT. THE AO AFTER POINTING OUT TO THE ABOVE FACTS CALLED UPON THE ASSESSEE TO EXPLAIN WITHIN 7(SEVEN) DAYS FROM RECEIPTS OF THE SAID LETT ER WHY THE ABOVE RS.17,10,700/- (RS.16,43,100 + RS.67,600) SHOULD NOT BE TREATED AS INCOME CONCEALED FOR WHICH REMEDIAL MEASURE U/S.147 SHOULD NOT BE INITIATED AS PER ACT. 4. THE ASSESSEE DID NOT SEND ANY REPLY TO THE AFOR ESAID LETTER OF THE AO. ON 7.7.2011, THE AO ISSUED A NOTICE U/S. 148 OF THE AC T. THE ASSESSEE FILED RETURN OF INCOME IN RESPONSE TO THE SAID NOTICE ON 30.8.2011. THE ASSESSEE OBJECTED TO INITIATION OF PROCEEDINGS U/S.147 OF THE ACT VIDE HIS LETTER D ATED NIL FILED BEFORE THE AO ON ITA NO.246/KOL/2014-BISESWAR PANDEY-A.Y.2007-08 3 28.3.2012, ON THE GROUND THAT THE FIRST JUSTIFICATI ON REGARDING NON DECLARATION OF INCOME OF PLYING OF TRUCKS WAS NOT CORRECT AND THAT THE ASSESSEE HAD DISCLOSED INCOME FROM PLYING OF HIS ONE LORRY U/S. 44AE OF THE ACT A ND THAT HE HAD NOT USED THE MARUTI CAR AND TOYOTA INNOVA ON HIRE AND THEREFORE APPLYIN G THE PROVISIONS OF S. 44AE OF THE ACT IN RESPECT OF THE OTHER TWO VEHICLES WAS ERRONE OUS. AS FAR AS DISALLOWANCE OF TRANSPORTATION CHARGES U/S.40(A)(IA) OF THE ACT IS CONCERNED, THE ASSESSEE SUBMITTED THAT THE ADMISSIBILITY OF THE TRANSPORTATION CHARGE S WERE ENQUIRED INTO BY THE LD. ASSESSING OFFICER BY CALLING FOR DETAILS AND EVIDEN CE WHICH WAS DULY COMPLIED WITH AND AFTER DUE DELIBERATION HE WAS FULLY SATISFIED W ITH THE PROPRIETY OF THE EXPENSE. THE ASSESSEE ARGUED THAT IT WAS NOT PROPER TO REOPEN CO MPLETED ASSESSMENT ON THIS GROUND BECAUSE NO TANGIBLE MATERIAL CAME TO THE POSSESSION OF THE AO BASED ON WHICH THE AO ENTERTAINED BELIEF THAT INCOME OF ASSESSEE CHARGEAB LE TO TAX HAS ESCAPED ASSESSMENT. IN SUCH CIRCUMSTANCES, THE ASSESSEE PLEADED THAT IN ITIATION OF REASSESSMENT PROCEEDINGS WOULD BE MERELY ON CHANGE OF OPINION WH ICH WAS NOT PERMISSIBLE IN LAW. THE ASSESSEE ALSO REQUESTED THE AO TO FURNISH A COP Y OF THE REASONS RECORDED FOR INITIATING PROCEEDINGS U/S.147 OF THE ACT. 5. HOWEVER. THE LD. ASSESSING OFFICER WAS NOT IMPR ESSED BY SUCH SUBMISSIONS OF THE ASSESSEE AND HE HELD THAT INITIATION OF REASSESSME NT PROCEEDINGS WAS VALID. THE AO FURTHER ADDED A SUM OF RS. 50,000/- AS INCOME FROM BUSINESS OF PLYING TRUCKS ON HIRE AS THE ASSESSEE HAD GIVEN ON HIRE ONLY ONE TRUCK DU RING THE PREVIOUS YEAR. ACCORDING TO THE AO, THE SUM OF RS.50,000 WAS DISCLOSED ONLY IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.148 OF THE ACT AND NOT IN THE ORIGINAL R ETURN OF INCOME. THE PLEA OF THE ASSESSEE WAS THAT THE SUM OF RS.50,000 HAD BEEN DEC LARED AS INCOME FROM PLYING TRUCKS IN THE ORIGINAL RETURN OF INCOME ITSELF. IG NORING SUCH SUBMISSION A SUM OF RS.50,000/- WAS ADDED TO THE TOTAL INCOME OF THE AS SESSEE BY THE AO. THE AO FURTHER HELD THAT A SUM OF RS.18,45,600/- WHICH WAS EXPENSES INCURRED ON TRANSPORTATION CHARGES HAD TO BE DISALLOWED U/S.40( A)(IA) OF THE ACT BECAUSE OF NON DEDUCTION OF TAX AT SOURCE ON SUCH PAYMENTS BY THE ASSESSEE AS REQUIRED BY SEC.194-C OF THE ACT. THE AO FURTHER DISALLOWED EXPENSE TO T HE TUNE OF RS.50.122/- OUT OF DEPRECIATION ON CAR, INTEREST ON CAR LOAN AND CAR EXPENSES. THE AO THUS COMPLETED THE ITA NO.246/KOL/2014-BISESWAR PANDEY-A.Y.2007-08 4 ASSESSMENT U/S.147 OF THE ACT BY ORDER DATED 08-08- 2012 COMPUTING THE TOTAL INCOME AT RS. 23.46,290/- FOR THE ASSESSMENT YEAR UNDER DI SPUTE. 6. ON APPEAL BY THE ASSESSEE THE CIT(A) DELETED THE ADDITION ON ACCOUNT OF INCOME FROM TRANSPORT BUSINESS AND ALSO THE DISALLOWANCE O F TRANSPORT CHARGES ON THE GROUND OF CONTRAVENTION TO THE PROVISION OF SECTION 40(A)( IA) OF THE ACT. WITH REGARD TO THE DISALLOWANCE OF EXPENSES IN THE FORM OF DEPRECIATIO N ON CAR, INTEREST ON CAR LOAN AND CAR EXPENSES CIT(A) SUSTAINED THE DISALLOWANCE OF 20% OF EXPENSES ON ACCOUNT OF DEPRECIATION AND INTEREST ON CAR LOAN. THE REVENUE HAS NOT PREFERRED ANY APPEAL AGAINST THE ORDER OF CIT(A) ON WHICH THE RELIEF WAS GIVEN T O THE ASSESSEE BY CIT(A). THE ASSESSEE IS AGGRIEVED BY THE ORDER OF CIT(A) FOR UP HOLDING THE VALIDITY OF INITIATION OF PROCEEDINGS U/S 147 OF THE ACT AND HAS PREFERRED TH E PRESENT APPEAL BEFORE THE TRIBUNAL. 7. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THIS REGARD ARE PROJECTED IN GROUND NOS. 1 TO 3 OF THE GROUNDS OF APPEAL WHICH READ AS UNDER :- 1. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (AP PEALS) XXXVI, KOLKATA WAS LEGALLY REMISS IN FAILING TO APPRECIATE THAT NONE O F THE CONDITIONS PRECEDENT EXISTED AND/OR HAVE BEEN COMPLIED WITH AND/OR FULFILLED BY THE LD. INCOME TAX OFFICER, WARD 2(2), HOOGHLY FOR HIS ALLEGED ASSUMPTION OF JURISDI CTION U/S. 147 OF THE INCOME TAX ACT, 1961 AND THE SPECIOUS ORDER PASSED U/S. 147/143(3) OF ACT IN PURSUANCE TO THE IMPUGNED NOTICE DATED 07-07-2011 ISSUED U/S. 148 OF THE ACT IS THEREFORE AB INITIO VOID, ULTRA VIRES AND EX-FACIE NULL IN LAW. 2. FOR THAT ON A TRUE AND PROPER INTERPRETATION OF THE SCOPE AND AMBIT OF THE PROVISIONS OF S. 147 OF THE INCOME TAX ACT, 1961, T HE LD. COMMISSIONER OF INCOME TAX (APPEALS) XXXVI, KOLKATA WAS ABSOLUTELY IN ERROR IN UPHOLDING THE ACTION OF THE LD. INCOME TAX OFFICER, WARD 2(2), HOOGHLY OF ISSUING N OTICE U/ S. 148 OF THE INCOME TAX ACT, 1961 MISCONSTRUING THE CRUCIAL EXPRESSION TA NGIBLE MATERIAL' IN SUPPORT OF SUCH FUTILE EXERCISE AND THE PURPORTED CONCLUSION REACHE D ON THAT BEHALF IS WHOLLY ERRONEOUS, FLAWED AND CONTRARY TO THE SETTLED POSITION IN LAW. 3. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APP EALS) XXXVI, KOLKATA ACTED UNLAWFULLY IN UPHOLDING THE ACTION OF THE LD. INCOM E TAX OFFICER, WARD 2(2), HOOGHLY OF ISSUING NOTICE U/S. 148 OF THE INCOME TAX ACT, 1961 MERELY ON CHANGE OF OPINION BASING ONLY ON THE EVIDENCE ALREADY ADDUCED ON RECORD IN C OURSE OF THE ORIGINAL ASSESSMENT PROCEEDINGS AND THE SPECIOUS ACTION ON THAT BEHALF IS THOROUGHLY ARBITRARY, UNWARRANTED AND PERVERSE. 8. I HAVE HEARD THE SUBMISSIONS OF THE LD. COU NSEL FOR THE ASSESSEE AND THE LD. DR ON THE AFORESAID GROUNDS OF APPEAL. I DEEM IT CONVE NIENT TO DEAL WITH THE ARGUMENTS RAISED BEFORE ME THAT THE PROCEEDINGS U/S 148 OF TH E ACT HAVE NOT BEEN VALIDLY ITA NO.246/KOL/2014-BISESWAR PANDEY-A.Y.2007-08 5 INITIATED BECAUSE THE PROCEEDINGS U/S 148 OF THE AC T WERE INITIATED PURELY BASED ON CHANGE OF OPINION WITHOUT ANY FRESH MATERIAL COMING TO THE KNOWLEDGE OF THE AO. THE UNDISPUTED FACTS IN SO FAR AS THE AFORESAID ISSUE A RE THAT THE ASSESSEE IS AN INDIVIDUAL. HE IS ENGAGED IN THE BUSINESS OF POTATO SEEDS. THE ASSESSEE WAS ALSO ENGAGED IN THE BUSINESS OF TRANSPORTATION. FOR A.Y.2007-08 THE AS SESSEE FILED RETURN OF INCOME ON 31.10.2007 DECLARING TOTAL INCOME OF RS.4,00,570/-. THE AO ISSUED NOTICE U/A 143(2) AND SECTION 143(1) OF THE ACT FOR COMPLETING THE AS SESSMENT U/S 143(3) OF THE ACT. THE AO IN ONE OF THE NOTICES HAD SPECIFICALLY CALLED FO R THE DETAILS OF PARTY-WISE TRANSPORT/CARRIAGE INWARD CHARGES. THE ASSESSEE GAV E THE DETAILS OF TRANSPORT/CARRIAGE INWARD FOR THE YEAR ENDED 31.03.2007 TOTALLING A SU M OF RS.18,45,600/-. COPY OF THE DETAILS SO FURNISHED IS AT PAGE 43 OF THE ASSESSEE S PAPER BOOK. THE DETAILS OF THE PURCHASE AND THE PARTIES FROM WHOM THE PURCHASE WAS MADE ARE ALSO GIVEN AT PAGE 42 OF THE ASSESSEES PAPER BOOK. THE AO PASSED AN ORDE R OF ASSESSMENT U/S 143(3) OF THE ACT DATED 31.12.2009. IN THE SAID ORDER THE AO HAS SPECIFICALLY RECORDED THE FACT THAT SINCE THE POTATO SEEDS WERE PURCHASED BY THE ASSESS EE FROM PUNJAB CARRIAGE INWARD CHARGES WERE CONSIDERABLE BECAUSE OF THE LONG DISTA NCE FROM PUNJAB TO HOOGHLY. ULTIMATELY THE AO DID NOT MAKE ANY ADDITION TO THE TOTAL INCOME EXCEPT DISALLOWANCE OF CAR RUNNING EXPENSES OF RS.8,100/-. 9. THE AO ISSUED A LETTER DATED 22.6.2011 THE C ONTENTS OF WHICH, I HAVE EXTRACTED IN THE EARLIER PART OF THIS ORDER. THE ASSESSEE HAD N OT SENT ANY REPLY TO THE AFORESAID LETTER TO THE AO. THE AO THEREAFTER ISSUED A NOTICE U/S 14 8 OF THE ACT DATED 07.07.2011 CALLING UPON THE ASSESSEE TO FILE THE RETURN OF INC OME IN RESPONSE TO THE SAID NOTICE. THE ASSESSEE FILED THE RETURN OF INCOME ON 30.08.20 11. IN RESPONSE TO THE AFORESAID NOTICE HE DEMANDED A COPY OF THE REASONS RECORDED F OR INITIATING THE PROCEEDINGS U/S 148 OF THE ACT. IT APPEARS THAT THE ASSESSEE WAS NO T FURNISHED THE REASONS RECORDED BY THE AO BUT ON THE OTHER HAND, THE AO HAD RELIED UPO N THE LETTER DATED 22.06.2011 WHICH WAS ISSUED TO THE ASSESSEE PRIOR TO THE ISSUE OF NOTICE U/S 148 OF THE ACT. FROM A PERUSAL OF THE LETTER DATED 22.06.2011 OF THE AO, I T IS CLEAR THAT WITH REGARD TO THE FIRST REASON RECORDED BY THE AO NAMELY NOT OFFERING TRUCK INCOME TO THE EXTENT OF RS.67,600/-, THE ASSESSEE HAD DECLARED INCOME FROM LORRY PLYING OF RS.50,000/- UNDER ITA NO.246/KOL/2014-BISESWAR PANDEY-A.Y.2007-08 6 THE HEAD INCOME FROM BASANTI AUTOMOBILES. INCOME U/S 44AE OF THE ACT HAS BEEN TAKEN IN THE CAPITAL ACCOUNT. THEREFORE THE ASSESSE E HAD DECLARED INCOME FROM TRUCK PLYING IN THE ORIGINAL RETURN OF INCOME. THIS FACTU AL POSITION IS NOT BEING DISPUTED BY THE AO. BESIDES THE ABOVE, THERE WAS NO TANGIBLE M ATERIAL BASED ON WHICH THE AO CAME TO A CONCLUSION THAT INCOME FROM TRUCK PLYING WAS NOT OFFERED TO TAX BY THE ASSESSEE IN THE ORIGINAL RETURN OF INCOME. IN FACT THE FACTUAL ASSERTION IN THE LETTER DATED 22.6.2011 THAT THE ASSESSEE OWNED THREE VEHIC LES AND THAT THESE WERE USED IN THE BUSINESS OF PLYING TRUCKS ON HIRE IS WITHOUT ANY BA SIS AND IS PURELY A SURMISE OF THE AO. 10. AS FAR AS THE SECOND REASON RECORDED BY THE AO IS CONCERNED IT RELATES TO THE CARRIAGE INWARD CHARGES IN THE BUSINESS OF WHOLESAL E DEALING IN POTATO SEEDS. I HAVE ALREADY OBSERVED THAT THE AO EXAMINED THE CARRIAGE INWARD ACCOUNT IN THE ORIGINAL ASSESSMENT PROCEEDINGS AND DID NOT THINK IT FIT THA T THERE WAS ANY VIOLATION OF SECTION 40(A)(IA) OF THE ACT. IT CAN THUS BE SEEN THAT TH IS ISSUE ON WHICH THE AO INITIATED REASSESSMENT PROCEEDINGS HAD BEEN DULY CONSIDERED B Y THE AO WHILE CONCLUDING THE PROCEEDINGS U/S 143(3) OF THE ACT. IN THE PAPER BOO K BEFORE US THE ASSESSEE FILED THE ORDER SHEET ENTRY OF THE PROCEEDINGS BEFORE THE AO AND THESE ARE AVAILABLE IN PAGES 96 TO 102 OF THE ASSESSEES PAPER BOOK. AS FAR AS THE REASSESSMENT PROCEEDINGS ARE CONCERNED THE FIRST ORDER SHEET ENTRY IS DATED 21.0 6.2011 AND IT REFERS TO THE AUDIT QUERY DATED 10.02.2011. THEREAFTER THERE IS A DISCU SSION WITH REGARD TO SEEKING OF AN APPROVAL U/S 147 OF THE ACT FROM CIT(A). 11. THUS IT IS CLEAR THAT THE REASSESSMENT PROCEED INGS HAVE BEEN INITIATED WITHOUT ANY TANGIBLE MATERIAL COMING TO THE POSSESSION OF THE A O. IN OTHER WORDS. THE ASSESSING OFFICER HAD FORMED HIS BELIEF REGARDING ESCAPEMENT OF INCOME BASED ON THE EXISTING MATERIALS WHICH WERE PROVIDED BY THE ASSESSEE IN CO URSE OF THE ORIGINAL ASSESSMENT PROCEEDINGS. DOING SO WOULD AMOUNT TO ASSUMING JURI SDICTION MERELY ON A CHANGE OF OPINION, WHICH IS IMPERMISSIBLE IN LAW. THE STATUTO RY REQUIREMENT FOR ISSUING NOTICE U/S. 148 OF THE ACT IS THAT THERE MUST BE TANGIBLE MATERIAL WHICH IN THE OPINION OF THE ASSESSING AUTHORITY LEADS TO THE CONCLUSION OF ESCA PEMENT OF INCOME. ASSESSING OFFICER DOES NOT HAVE POWER TO REVIEW HIS OWN ORDER S. HE CANNOT UNDER THE GUISE OF ITA NO.246/KOL/2014-BISESWAR PANDEY-A.Y.2007-08 7 REASSESSMENT PROCEEDINGS SEEK TO REVIEW HIS OWN ORD ER. THE HONBLE SUPREME COURT IN THE CASE OF CIT. - VS-KELVINATOR OF INDIA LTD (2 010) 320 ITR 561 (SC) HAS HELD THAT THE AO HAS NO POWER TO REOPEN ASSESSM ENT PROCEEDINGS MERELY ON 'CHANGE OF OPINION' AND THAT EVEN AFTER THE SUBSTI TUTION OF S. 147 OF THE INCOME TAX ACT. 1961 BY THE DIRECT TAX LAWS (AMENDMENT) ACTS. 1987 AND 1989, THE AO HAS TO HAVE REASONS TO BELIEVE THAT INCOME ESCAPED ASSESSM ENT AND THAT IT DOES NOT IMPLY THAT THE ASSESSING OFFICER CAN REOPEN AN ASSESSMENT ON A MERE CHANGE OF OPINION. THE CONCEPT OF 'CHANGE OF OPINION' MUST BE TREATED AS A N IN-BUILT TEST TO CHECK ABUSE OF POWER. HENCE AFTER APRIL 1, 1989. THE ASSESSING OFF ICER HAS POWER TO REOPEN AN ASSESSMENT. PROVIDED THERE IS 'TANGIBLE MATERIAL' T O COME TO THE CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. 12. THE LD. DR HAS HOWEVER ARGUED BEFORE ME THA T THOUGH THE TRANSPORT INWARD CHARGES WERE NOT INQUIRED INTO BY THE AO HE DID NOT APPLY HIS MIND ON THE APPLICABILITY OF THE PROVISION OF SECTION 40(A)(IA) OF THE ACT. ACCORDING TO HIM THE INITIATION OF RE-ASSESSMENT PROCEEDINGS WERE VALID. IN THIS REGARD, IT IS WORTHWHILE TO REFER TO THE DECISION OF THE HONBLE DELHI HIGH COU RT IN THE CASE OF CIT VS USHA INTERNATIONAL LTD. (2012) 348 ITR 485 (DEL) WHEREIN IT WAS HELD THAT REASSESSMENT PROCEEDINGS WILL BE INVALID IN CASE AN ISSUE OR QUE RY IS RAISED AND ANSWERED BY ASSESSEE IN ORIGINAL ASSESSMENT PROCEEDINGS AND ASS ESSING OFFICER DOES NOT MAKE ANY ADDITION IN ASSESSMENT ORDER. 13. IT IS CLEAR FROM THE FACTS AVAILABLE ON REC ORD THAT REASSESSMENT PROCEEDINGS IN THE PRESENT CASE WERE INITIATED PURELY ON THE CHANG E OF OPINION. ON THIS ISSUE THE CIT(A) HAS TAKEN THE FOLLOWING VIEW :- ON PERUSAL OF THE ASSESSMENT RECORD IT IS SEEN TH AT DURING THE COURSE OF ORIGINAL ASSESSMENT, IT IS SEEN THAT NO QUERY REGARDING TAX DEDUCTION AT SOURCE FROM TRANSPORT PAYMENT HAS BEEN MADE. CONSEQUENTLY NO EXAMINATION REGARDING DISALLOWANCE U/S 40(A)(IA) HAS BEEN MADE. SIMILARLY OTHER HEADS UNDE R FOR WHICH ASSESSMENTS WERE REOPENED WERE NOT TOUCHED UPON BY THE ASSESSING OFF ICER DURING THE ORIGINAL ASSESSMENT. WHEN IN THE ORIGINAL ASSESSMENT PROCEEDING THE ASSE SSING OFFICER HAS NOT EXAMINED THE ISSUE AT ALL, NO OPINION WAS FORMED, THE PRINCIPLE OF CHANGE OF OPINION CANNOT APPLY. FURTHER THIS IS A CASE WHERE THE ASSESSMENT HAS BEE N REOPENED WITHIN 4 YEARS OF THE END OF THE ASSESSMENT YEAR. THEREFORE THE RE-ASSESSMENT PROCEEDING CANNOT BE TREATED AS INVALID ON THE GROUND THAT FULL AND TRUE DISCLOSURE OF MATERIAL FACT WAS MADE IN THE ORIGINAL PROCEEDING. ITA NO.246/KOL/2014-BISESWAR PANDEY-A.Y.2007-08 8 14. I AM OF THE VIEW THAT THE AFORESAID REASON S ASSIGNED BY THE CIT(A) CANNOT BE SUSTAINED IN THE LIGHT OF THE PROPOSITION LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS KELVINATOR INDIA LTD. (SUPRA). I N THE GIVEN FACTS AND CIRCUMSTANCES I AM OF THE VIEW THAT THE INITIATION OF RE-ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT IS NOT VALID AS IT WAS BASED ON THE CHANGE OF OPINION AND NO TANGIBLE MATERIAL COMING TO THE POSSESSION OF THE AO AFTER CONCLUSION OF THE OR IGINAL ASSESSMENT PROCEEDINGS. THE RE-ASSESSMENT PROCEEDINGS IS LIABLE TO BE ANNULLED. SINCE THE RE-ASSESSMENT PROCEEDINGS ARE ANNULLED THE ISSUE WITH REGARD TO T HE DISALLOWANCE OF CAR RUNNING EXPENSES, DEPRECIATION ON CAR AND INTEREST ON CAR L OAN DO NOT REQUIRE ANY CONSIDERATION. 15. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 08.07.2016. SD/- [ N.V.VASUDEVAN ] JUDICIAL MEMBER DATED : 08.07.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.BISWESWAR PANDEY, C/O SHRI SOMNATH GHOSH, ADVOCAT E, SEVEN BROHTERS LODGE, P.O.BUROSHIBTALA, P.S.CHINSURAH, DIST. HOOGHLY, PIN -712 105. 2. I.T.O., WARD-2(2), HOOGHLY. 3. CIT(A)-XXXVI, KOLKATA 4. CIT-XX, KOLKATA . 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER A SSTT.REGISTRAR, ITAT, KOLKATA BENCHES ITA NO.246/KOL/2014-BISESWAR PANDEY-A.Y.2007-08 9