Appeal details
Counselvise Citation
[2023] 101 COUNSELVISE.COM (IT) 4575 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 11 month(s) 29 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
16-04-2023
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
C
Next Hearing Date
05-04-2023
Assessment Year
2008-2009
Appeal Filed On
18-04-2018
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “C” DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER & SHRI ANUBHAV SHARMA, JUDICIAL MEMBER I.T.A. No.2752/DEL/2018 Assessment Year 2008-09 M/s. Glen Propbuild Private Limited, 306-308, Square One, C-2, District Centre, Saket, New Delhi. Vs. Deputy Commissioner of Income Tax, Circle-10(1), New Delhi. TAN/PAN: AACCG7652H (Appellant) (Respondent) Appellant by: Shri Salil Kapoor, Adv. Shri Sumit Lalchandani, Adv. Ms. Ananya Kapoor, Adv. Respondent by: Shri Anuj Garg, Sr.D.R Date of hearing: 06 04 2023 Date of pronouncement: 17 04 2023 O R D E R PER SHAMIM YAHYA, A.M. T his appeal b y the Assessee i s dir ec ted aga ins t the order of the C ommiss ioner of I nc ome T ax ( A ppeals )-XX X V, New D elhi (‘C IT (A )’ in s hort) da te d 29. 01. 2018 pe rt aining to t he A ssess ment Y ear 200 8-09. 2. T he grou nds of appea l ra ised b y the assesse e reads as unde r: “ G r o u n d N o . 1: T he L e ar n e d C o m m i s s i on e r o f I nc o m e T ax , A p p e a l - 35 , N e w D e l hi ( h e r e in a f te r r e f e r r e d t o a s " C I T ( A ) h a s e r r e d i n l aw a nd i n t h e f ac t i n pa s s i n g t h e or d e r d at e d 29 t h J a nu ar y 2 0 18 un d e r s e c t i o n 2 5 0 ( 6 ) o f t he I n c o m e T ax A c t , 1 9 6 1 ( h e r e i na f t e r r e f e r r e d to a s ' Th e A c t ' ) . I.T.A. No.2752/Del/2018 2 G r ou n d N o . 2 : T he L d. C I T ( A ) h a s f a i l e d t o a pp r e c i a te th a t t he r eas on r e c o r d e d f o r r e op e n i n g t h e c a s e u / s 14 7 / 1 4 8 of t h e A c t w as ju s t o n a c c o u nt o f m e r e c h an g e of o pi n i o n . Th e r e w as n o om i s s i o n o r f ai l u r e on p a r t of t he A p pe l l a nt i n di s c l o s u r e of m a t e r i al f a ct s . Th e r e f o r e , r e - a s s e s s m e n t d e s e r v e s t o b e q u as h e d an d a n nu l l e d a s the s a m e i s b a d i n l aw . G r ou n d N o . 3 : T he Ld . C I T ( A ) h as e r r e d o n f a c t s & c i r c um s t a n c e s of t h e c a s e a n d i n l a w b y u ph o l di n g th e d i s a l lo w an c e m a de by t h e Ld. A O on a c c ou n t of t o t al e x p e nd i t u r e am ou n ti n g t o R s . 3 1 , 9 1,6 57 o n t he c o nt e n t i on th a t a pp e l l an t h a s n o t c a r r i e d ou t a n y bu s in e s s a c t iv i t y d u r i n g t he y e a r u nd e r c o ns i d e r a t i o n . G r ou n d N o . 4 : T he L d. C I T (A ) h a s e r r e d i n f ac t s & la w i n no t al l ow i n g t he a p pe l l at e t o c ap i t al i z e t h e l e g al e x p e ns e s in c u r r e d du r i n g t h e y e a r . T he s a i d gr o u n d i s w it h o ut p r e j u d i c e t o a b ov e s t a t ed g r o un ds . ” 3. I n t hi s case, t he assessee was ear li er assessed under Secti on 143( 3) o n 26. 09. 2008 at a l oss of Rs. 31, 91,657/ -. The reaft er , the pr esent pr oceedi ngs under Secti on 147 wer e init iated. The reasons rec or ded rea d as unde r: “ " F r o m t he p e r u s al o f t he c a s e r e c o r d s i t is no t i c ed t h at d ur i n g t he f i n an c i a l y e a r , as s e s s e e h ad n o t c ar r i e d ou t a ny b us i ne s s a c t iv i t y a n d n o r e c e i pt h a d b e e n s ho w n d u r i n g t h e y e ar . Th e as s e s s e e c o m p a n y ne i t h e r s h ow n i n t he b al a n c e s he e t an y f i nis h e d g o od s , c a pi t a l w o r k i n p r og r e s s , e x pe n di t u r e o n c o ns t r u c t io n n o r a ny a d di t i on i n s t o c k i n tr ad e . E v e n no bu s i n e s s a c t i v it y w a s t he r e , y e t t h e a s s e s s e e c o m pa n y h ad c l a im e d e x pe n s e s of a m o u nti n g to R s . 3 1 , 9 1 , 6 57 4 . Th e as s e s s m e nt r e c o r d w as e x am i n e d an d f ou n d t h at t h e as s e s s e e i s no t d oi n g a ny b u s i n e s s a c t i v i ty a nd c l ai m e d e x p e ns e s o f R s . 3 1. 9 1 . 65 7 1 - u n d e r t h e h e a d -p e r s o n al e x p e ns e s (o p e r at i n g a nd o t he r e x p e ns e s . A s p e r pr ov is i o ns of l a w , i f t h e as s e s s e e h as n o t c a r r ie d o ut a ny b us i n e s s a c t i vi ty , t h e e x pe n s e s c a nn o t b e al l o w e d a s d e du c t i o n . I n t h i s c as e t h e a ss e s s e e c o m p a ny d i d n o t f u r n i s h a n y d e t a il s of e x pe n s e s . T he r e f o r e t h e r e w a s f a il u r e o f t h e p ar t of a s s e s s e e t o d i s c l o s e f u l l y an d t r u l y a l l t he m a t e r i al f a c t s ne c e s s ar y f o r r e l e v an t a s s e s s m e nt y e a r by c l aim i n g pr e - c o m m e n c e o f b u s i ne s s e x pe n s e s . ” 4. The assessee has chall enged t he val i dit y of reopeni ng I.T.A. No.2752/Del/2018 3 bef ore t he l d. CI T (A) b y gi vi ng plet hor a of case laws. However, ld. CIT( A) br ushed aside al l the sub missi ons and hel d t hat Assessi ng Of fi cer has reopene d ass ess ment af ter recor di ng t he reason as per t he pr ovi sio ns of the Act. Agai nst t his or der, assessee is i n appeal before us. 5. We have hear d bot h the par ti es and peruse d the recor ds. 6. Ld. counsel has r ef err ed t o t he r easons f or re opening and stated thi s i s a case of reopeni ng under Sect ion 147. Or i gi nal or der was passed under Sect i on 143( 3) on 26.09. 2008. Ld. cou nsel howe ver sub mi t ted t hat on the basi s of a bove reas ons recor ded noti ce under Se ct ion 148 was i ssue d on 31.03. 2015. Ref err ing t o t he said f acts, the l d. counsel sub mi tt ed t hat reopeni ng has been c onducted aft er four ye ars of t he or igi nal assess ment order . Hence pr ovi sion t o S ecti on 1 47 clearl y bec o mes appli cable. He sub mit t ed t hat as evide nt fro m t he reasons r ecor de d, t her e is no i nf or mat i on w hi ch has co me to t he knowledge of t he Assessi ng Of fi cer w hi ch has l ead to t he reopeni ng. How ever, he pleaded tha t i t appear s fr o m t he per usal of the sa me case r ecor d, t he Assessi ng Offi ce r has c ome t o t his opi nion t hat case needs t o be re opened. Ld. counsel sub mit ted that this i s a cl ea r case of c hange of opi nion not sus tainabl e i n law. He sub mit ted t hat Assessi ng O ff icer has not come int o an y possessi on of an y f resh mat erial wa rranti ng reopening. In these ci rcu mstances, l d. counsel pl eaded that re ope ning has t o be quashed. Hence, i t i s a change of opi ni on wi thout an y fr es h ma teri al c o mi ng t o t he possessi on of Assessi ng Office r. That the reopeni ng i s bad in law a nd deserves to be quas hed. I n t his I.T.A. No.2752/Del/2018 4 regar d, he place d rel i ance upon t he f oll owing deci si ons: 1 . C I T V s . K e l v i n at o r o f In di a L t d , 32 0 I TR 5 6 1 2 . C I T V s . K e l v i n a t o r o f In d i a Lt d . , 25 6 I T R 1 ( D e l ) [ F B I 3 . C I T V s . U s h a I n t e r na t i o n a l Lt d. : 3 48 I T R 48 5 ( D e l) [ F B] 4 . C I T V s . P r i m a p a p e r a n d E n gi n e e r i ng In d u s t r y , 3 64 I T R 2 2 2 ( B o m ) 5 . P a r i x i t I n du s t r i e s P . L t d. V s . A C I T , 3 52 I T R 34 9 (G u j . ) 6 . A C I T V s . P ar i x i t I nd u s t r i e s P . Lt d . : 2 5 T a x m a nn .c o m 30 1 7 . A C I T V s . IC IC I S e c u r i t ie s P r i m a r y D e a le r s h ip Lt d. , 34 8 I TR 2 9 9 ( S C ) 8 . J i n d a l P ho t o F i l m s Lt d. Vs . D C I T , [ 1 9 9 8] 23 4 I T R 1 70 ( D e l . ) 9 . R o s e S e r v i c e d A p ar tm e nt s (P . ) Lt d . V s . D C I T , [ 2 012] 3 48 I T R 4 5 2 ( D e l . ) 1 0 . A s i a n P a in t s Lt d . V s . D C I T : [ 2 00 9 1 3 08 I T R 19 5 (B o m ) 1 1 . In du L a t a R a n gw al a V s . D C I T, [ 2 0 16 1 3 8 4 I TR 3 37 ( D e l . ) 1 2 . C I T V s . C I T V s . C e nt r a l Wa r e h o u s i n g C or p o r a t i o n, [ 20 1 5] 3 71 I T 8 1 ( D e l . ) 1 3 . C I T V s . C I T V s . R u b ix Tr a d i n g ( P ) L td . , [ 2 01 9 ] 1 08 t a x m a n n . c o m 1 7 7 (S C ) 1 4 . N e w D e l h i T e l e v i s io n Lt d . V s . D e p ut y C om m i s s i o ne r of I n c o m e T ax , [ 2 0 20 ] 4 24 I TR 60 7 (S C ) 1 5 . M / s . A na nd D e v e lo p e r s V s . AC I T & A n r . , Wr it P e ti ti o n N o. 1 7 o f 20 2 0 d a te d 1 8 . 0 2 . 2 0 20 . 1 6 . S. S . La nd m a r k s V s . I T O [ 2 02 0 ] 11 7 t ax m a n n. c o m 825 ( B o m ) 1 7 . H i nd us t a n Le v e r Lt d. V s . R . B . W a d k a r : [ 20 0 4] 2 68 I T R 3 3 2 ( B o m ) 1 8 . C o m m i s s i on e r o f In c o m e Ta x V s . H u gh e s E s c o r t s C o m m u ni c a t i on s , [ 2 00 9] 3 11 I T R 25 3 ( D e l h i ) 1 9 . C o m m i s s i o ne r o f I nc o m e Ta x - I V V s . D h o o m k e t u B uil d e r s & D e v e l o pm e nt ( P . ) L t d. , [ 20 14] 3 68 I T R 6 80 (D e l h i ) 2 0 . C o m m i s s i o ne r o f I n c o m e T ax V s . Wh i r l p oo l o f I n di a L t d . , I.T.A. No.2752/Del/2018 5 ( 2 0 0 9] 31 8 I TR 3 47 ( D e l hi ) . 7. Per cont r a, l d. DR reli ed upon the C IT( A) ’s or der . 8. We have car ef ul l y consi dered the sub mi ssions. We not e that reopeni ng not i ce in thi s case has been i ssued aft er f our yea rs of the ori gi nal assessment unde r Secti on 14 3(3) of the Act . He nce, pr ovi so to Secti on 147 i s clear l y appl icable. The sai d provi so provi des as under: “ P r ov i d e d t h at w h e r e an a s s e s s m e n t u n de r s u b - s e c t i on ( 3 ) of S e c t i on 1 4 3 o r th i s s e c t io n h a s b e e n m ad e f o r t h e re l e v a nt a s s e s s m e n t y e a r , n o n a c t i o n s ha l l be t a k e n u nd e r thi s s e c t io n af t e r t h e e x pi r y o f f ou r y e a r s f r o m t h e e nd o f t h e r e l e v an t as s e s s m e nt y e a r , un l e s s an y i nc o m e c h a r g e a b l e t o t a x h a s e s c a pe d a s s e s s m e nt f o r s uc h a s s e s s m e nt y e ar by r e as on o f t he f a i l ur e on t h e p ar t of t h e as s e s s e e t o m ak e a r e t u r n u n de r s e c t i o n 1 3 9 o r i n r e s p o n s e t o a n o ti c e i s s u e d u n de r s u b -s e c t i o n (1 ) o s e c t i o n 1 42 or s e c t i on 1 4 8 o r t o d i s c l os e f ul l y a n d t r ul y a l l m a t e r i al fa c t s n e c es s a r y f o r h i s a s s e s s m e n t , f or t h a t a s s e s s m e n t y e a r . ” 9. Fro m t he above, i t i s clear t hat no noti ce unde r t hese secti ons can be i s sued unless an y i nco me chargeabl e t o t ax has escape d assess ment i n thi s case. For t his pur pose, the C our ts hav e hel d t hat the mat erial shoul d have a l i ve l ink and the cha nge of opi ni on i s not sustai nabl e. Si nce Assessing Offi cer has doubt ed upon t he assess ment onl y on t he basis of obser vat i on t hat f r o m t he per usal o f case recor ds itself he has obser ved cert ai n a spects w hi ch lead to t he r eope ni ng. Hence, i n our consi dered opi ni on, t hi s i s a clear case of change of opini on and t he r e- assessmen t i s l iabl e t o be quas hed. The case l aws refer red a bove dul y s upport t he case of t he assessee. Accordi ngl y, we h old t hat t he re-assess ment is not val i d and t he same deserves t o be quashe d. The case l aws ref err ed abo ve cl earl y s uppor t t he pr oposi ti on. Si nce, we ha ve quas hed t he re- I.T.A. No.2752/Del/2018 6 assess ment ; t he meri t of i ssue i s not di scussed. 9. I n t he res ul t, thi s appeal fi led by t he assessee st ands al lowe d. Order pronounced in the open Court on 17/04/2023. Sd/- Sd/- [ANUBHAV SHARMA] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17/04/2023 prabhat
