Mansi Finance (Chennai) Ltd., CHENNAI V. DCIT Corporate Circle 4(1), CHENNAI

ITA 2651/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5062 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 03-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: S SRINIRANJANI
• Keywords: Difference of opinion; Change of opinion
• Section: 143(3); 14A; 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , !' .$%$&, ( ') BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ./ ITA NO.2651/CHNY/2017 & +& / ASSESSMENT YEAR : 2008-09 M/S MANSI FINANCE (CHENNAI) LTD., NO.22, MULLA SAHIB STREET, SOWCARPET, CHENNAI - 600 079. PAN : AAACM 5326 N V. THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 4(1), CHENNAI - 600 034. (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : MS. S. SRINIRANJANI, ADVOCATE /0-. 1 2 / RESPONDENT BY : SHRI B. SAGADEVAN, JCIT 3 1 4( / DATE OF HEARING : 19.06.2018 56+ 1 4( / DATE OF PRONOUNCEMENT : 19.06.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -8, CHENNA I, DATED 23.08.2017 AND PERTAINS TO ASSESSMENT YEAR 2008-09. 2 I.T.A. NO.2651/CHNY/17 2. MS. S. SRINIRANJANI, THE LD.COUNSEL FOR THE ASSE SSEE, SUBMITTED THAT THE ORIGINAL ASSESSMENT WAS COMPLETE D BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOM E-TAX ACT, 1961 (IN SHORT 'THE ACT') ON 31.12.2010 AT A TOTAL INCOM E OF 40,72,180/-. ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER REOPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT AFTER EXPIR Y OF FOUR YEARS BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT ON 3 1.03.2015. 3. REFERRING TO PROVISO TO SECTION 147 OF THE ACT, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFIC ER CANNOT REOPEN THE ASSESSMENT AFTER EXPIRY OF FOUR YEARS FR OM THE END OF THE RELEVANT ASSESSMENT YEAR WHEN THE ORIGINAL ASSESSME NT WAS PASSED UNDER SECTION 143(3) OF THE ACT, UNLESS THE INCOME ESCAPED FROM ASSESSMENT DUE TO NEGLIGENCE OF THE ASSESSEE I N FURNISHING FULL MATERIAL FACTS BEFORE THE ASSESSING OFFICER. IN THIS CASE, ACCORDING TO THE LD. COUNSEL, THE DISPUTE IS WITH R EGARD TO COMPUTATION OF EXPENDITURE FOR EARNING THE EXEMPTED INCOME. THE ASSESSING OFFICER FOUND THAT THE DISALLOWANCE UNDER SECTION 14A OF THE ACT WAS COMPUTED UNDER CLAUSE (III) OF RULE 8D( 2) OF THE INCOME-TAX RULES, 1962 INSTEAD OF CLAUSE (II). ACC ORDING TO THE LD. COUNSEL, THE ASSESSEE HAS FURNISHED ALL THE EXEMPTE D INCOME AND 3 I.T.A. NO.2651/CHNY/17 ALSO THE DETAILS OF EXPENDITURE. IT IS FOR THE ASS ESSING OFFICER TO APPLY EITHER CLAUSE (II) OR CLAUSE (III) OF RULE 8D (2) OR BOTH. THEREFORE, ACCORDING TO THE LD. COUNSEL, THERE WAS NO NEGLIGENCE ON THE PART OF THE ASSESSEE IN FURNISHING FULL DETAILS , HENCE, THE REOPENING OF THE ASSESSMENT IS NOT JUSTIFIED. 4. ON THE CONTRARY, SHRI B. SAGADEVAN, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE WHILE F ILING THE RETURN, COMPUTED THE DISALLOWANCE UNDER CLAUSE (III) OF RUL E 8D(2) OF INCOME-TAX RULES, 1962 AND CLAUSE (II) WAS NOT TAKE N INTO CONSIDERATION. THEREFORE, ACCORDING TO THE LD. D.R ., THERE WAS NEGLIGENCE ON THE PART OF THE ASSESSEE, HENCE, THE ASSESSING OFFICER HAS RIGHTLY REOPENED THE ASSESSMENT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ISSUE AROSE BEFORE THE ASSESSING OFFICER WAS DISALLOWANCE UNDER 14A OF THE ACT IN RESPECT OF EXEMPTED INCOME EARNED BY THE ASSESSE E. THE ASSESSING OFFICER ADMITTEDLY COMPUTED THE DISALLOWA NCE UNDER CLAUSE (III) OF RULE 8D(2) OF INCOME-TAX RULES, 196 2. NOW THE ASSESSING OFFICER CLAIMS THAT THE DISALLOWANCE OUGH T TO HAVE BEEN MADE UNDER CLAUSE (II) OF RULE 8D(2). THE FACT REM AINS THAT THE 4 I.T.A. NO.2651/CHNY/17 ASSESSEE HAS FILED DETAILS OF INVESTMENT AND EARNIN G OF EXEMPTED INCOME. THEREFORE, IT IS FOR THE ASSESSING OFFICER TO APPLY THE PROVISIONS OF LAW AND COMPUTE THE DISALLOWANCE UNDE R SECTION 14A OF THE ACT AS PER THE PROCEDURE PRESCRIBED UNDER RU LE 8D(2) OF INCOME-TAX RULES, 1962. THE VERY FACT THAT THE ASS ESSING OFFICER MADE DISALLOWANCE ONLY UNDER CLAUSE (III) OF RULE 8 D(2) AND NOW INTENDS TO MAKE DISALLOWANCE UNDER CLAUSE (II) OF R ULE 8D(2), SHOWS THAT THERE IS A CHANGE OF OPINION. MOREOVER, THERE WAS NO NEGLIGENCE ON THE PART OF THE ASSESSEE IN FURNISHIN G NECESSARY MATERIAL IN COMPLETING THE ASSESSMENT. HENCE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN REOPENING THE ASSESSMEN T. THEREFORE, WE ARE UNABLE TO UPHOLD THE ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY, THE ORDERS OF BOTH THE AUTHORITIES BEL OW ARE SET ASIDE AND THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS DELETED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 19 TH JUNE, 2018 AT CHENNAI. SD/- SD/- ( !' .$%$& ) ( . . . ) (ABRAHAM P. GEORGE) (N.R.S. GANESAN) ( / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 8 /DATED, THE 19 TH JUNE, 2018. 5 I.T.A. NO.2651/CHNY/17 KRI. 1 /49: ;:+4 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. 3 <4 () /CIT(A)-8, CHENNAI 4. PRINCIPAL CIT, CHENNAI-4, CHENNAI 5. := /4 /DR 6. & > /GF.