Smt. Damini A. Shah, Surat V. The Income Tax Officer, Ward-3(3), Surat

ITA 2705/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0459 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 12-08-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 20-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHAH
• Section: 143(3); 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.2705/AHD/2013 / ASSTT. YEAR: 2005-2006 SMT.DAMINI A. SHAH C-GROUND FLOOR, V/S. RAVI JYOTI APARTMENT GHOD DOD ROAD, SURAT. PAN : APXPS 3633 K VS ITO, WARD - 3(3) SURAT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI M.R.SHAH, AR REVENUE BY : SHRI SATISH SOLANKI, SR.DR / DATE OF HEARING : 12/08/2016 / DATE OF PRONOUNCEMENT: 29/09/2016 $%/ O R D E R ASSESSEE IS IN APPEAL AGAINST ORDER OF THE LD.CIT(A )-IV, SURAT DATED 13.09.2013 PASSED FOR THE ASTT.YEAR 2005-06. 2. IN THE FIRST GROUND OF APPEAL, THE ASSESSEE HAS CHALLENGED REOPENING OF THE ASSESSMENT. 3. THE LD.COUNSEL FOR THE ASSESSEE, AT THE VERY OUT SET, POINTED OUT THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 31.10.2005 D ECLARING A LOSS OF RS.1,21,730/-. AN ASSESSMENT ORDER WAS PASSED UNDE R SECTION 143(3) OF THE INCOME TAX ACT ON 28.12.2007. THE LD.AO HAS DETERM INED THE TAXABLE INCOME OF THE ASSESSEE AT NIL. HE MADE VARIOUS DIS ALLOWANCES AND SET OFF OF ITA NO.2705/AHD/2013 2 LOSS. HE PLACED ON RECORD COPY OF THE ASSESSMENT O RDER DATED 28.12.2007. HE TOOK US THE REASONS FOR REOPENING OF THE ASSESSMENT ORDER, WHICH ARE AVAILABLE AT PAGE NO.1 OF THE PAPER BOOK. HE CONTENDED THAT IN THE REASONS NOWHERE, THE AO HAS POINTED OUT THAT INCOME CHARGEABLE TO TAX HA S ESCAPED ON ACCOUNT OF FAILURE OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FA CTS FULLY AND TRULY BY THE ASSESSEE. THEREFORE, NOTICE ISSUED UNDER SECTION 1 48 OF THE ACT AFTER EXPIRY OF FOUR YEARS IS NOT SUSTAINABLE IN THE EYES OF LAW. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORDERS OF THE REVENUE AUTHORITIES B ELOW. 4. I HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GON E THROUGH THE RECORD CAREFULLY. THE REASONS RECORDED BY THE AO FOR REO PENING OF THE ASSESSMENT READ AS UNDER: REASONS FOR ISSUE OF NOTICE U/S.148 OF THE INCOME- TAX ACT, 1961. NAME & ADDRESS OF THE ASSESSEE: . SMT. DAMINI AM IT SHAH C-GROUND FLOOR. RAVI JYOT APARTMENT, OPP LOURDES CONVENT SCHOOL. GHOD DOD ROAD, SURAT PA NO. : APXPS3633K A. Y. : 2005-06 IN THIS CASE, RETURN OF INCOME FOR THE A.Y.2005-06 WAS FILED ON 3.1.10.2005 WITH RETURNED TOTAL INCOME AT RS.(-) 1, 21,730/-. THEREAFTER, VIDE ORDER U/S. 143(3) OF THE ACT DATED 28.12.2007, THE ASSESSMENT WAS FINALIZED AT RS.NIL. THE INTERNAL AUDIT PARTY HAS R AISED OBJECTION THAT ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE FROM LATE P AYMENT INTEREST CHARGES AMOUNTING TO RS. 17,47,800/- RESULTED IN SH ORT LEVY OF LAX AMOUNTING TO RS.7,95,350/-. 2. ON VERIFICATION OF INCOME & EXPENDITURE ACCOUNT, IT WAS NOTICED THAT THE ASSESSEE HAS CLAIMED LATE PAYMENT INTEREST CHAR GES AMOUNTING TO RS.17,47,800/-. ON VERIFICATION OF RECORD, IT IS NO TICED THAT THE ASSESSOR HAS PAID RS.17,36,227/- TO KOTAK SECURITY & RS.11,5 73/- TO OTHER ITA NO.2705/AHD/2013 3 BROKER ON ACCOUNT OF LATE PAYMENT INTEREST. FURTHER , THE ASSESSEE HAS FAILED TO DEDUCT TAX AT SOURCE ON THE SAID LATE PAY MENT INTEREST. ACCORDINGLY, THE SAID CLAIM OF LATE PAYMENT INTERES T IS NOT ALLOWABLE U/S.40(A)(IA) IN THE ACT. THUS, THERE IS AN UNDER A SSESSMENT OF INCOME BY RS. 17,47,800/- RESULTED IN SHORT LEVY OF TAX BY RS.7,95,350/- (APPROX) INCLUDING INTEREST LEVIABLE AS PER THE ACT . 3. IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE THAT THE INCOME OF RS.17,47,800/- CHARGEABLE TO TAX HAS ESCAPED ASSESS MENT FOR A.Y. 2005-06 WITHIN THE MEANING OF SECTION 147 OF THE I. T. ACT, 1961. THEREFORE, THE CASE OF THE ASSESSEE REQUIRES TO BE REOPENED FOR THE A.Y. 2005-06. HENCE, THE NOTICE U/S. 148 R.W.S. 147 OF T HE ACT IS ISSUED FOR THE A.Y. 2005-06. 5. ADMITTEDLY, THE ASSESSMENT ORDER UNDER SECTION 1 43(3) WAS PASSED ON 28.12.2007. NOTICE UNDER SECTION 148 OF THE ACT HA S BEEN ISSUED UPON THE ASSESSEE ON 14.3.2012 I.E. AFTER THE END OF THE FOU R YEARS OF THE RELEVANT ASSESSMENT YEAR. THE NOTICE WITHIN FOUR YEARS COUL D BE SERVED UPON THE ASSESSEE ON OR BEFORE 31.3.2010. INTERDICTION AVAI LABLE IN THE PROVISO APPENDED TO SECTION 147 PUTS EMBARGO UPON POWERS OF THE AO TO ISSUE NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT IN THE CASE S WHERE SCRUTINY ASSESSMENT WAS MADE UNDER SECTION 143(3) AND FOUR Y EARS HAVE EXPIRED FROM THE END OF THE RELEVANT ASSESSMENT YEARS. IN THESE CASES, NOTICE UNDER SECTION 148 CANNOT BE ISSUED UNLESS IT IS ESTABLISHED THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ON ACCOUNT OF FAILURE OF THE ASSESSEE TO DI SCLOSE ALL MATERIAL FACTS FULLY AND TRULY. A PERUSAL OF REASONS WOULD INDIC ATE THAT THE AO HAS NOWHERE LEVELED THIS ALLEGATION. THE AO HAS NOWHERE MADE R EFERENCE TO ANY MATERIAL WHICH HAS AUTHORIZED HIM TO HARBOR A BELIEF THAT IN COME HAS ESCAPED ASSESSMENT ON ACCOUNT NON-DISCLOSURE OF RELEVANT FA CTS FULLY AND TRULY AT THE END OF THE ASSESSEE. HE SIMPLY RE-APPRECIATED THE INCOME AND EXPENDITURE ACCOUNT WHICH MUST HAVE BEEN SUBMITTED AT THE TIME OF ORIGINAL ASSESSMENT. ITA NO.2705/AHD/2013 4 THEREFORE, REOPENING OF THE ASSESSMENT IS NOT JUSTI FIABLE. I ALLOW FIRST GROUND OF APPEAL AND QUASH THE ASSESSMENT ORDER. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 29 TH SEPTEMBER, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 29/09/2016