Soundari Family Trust, CHENNAI V. ITO Non Corporate Ward 3(2), CHENNAI

ITA 2761/CHNY/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2528 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 16-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN
• Assessee Lawyers: M KAUSHIK
• Keywords: Reopening of assessment; Set aside
• Section: 147; 148

Judgement Text

, / , IN THE INCOME TAX APPELLATE TRIBUNAL A SMC BENCH, CHENNAI ... , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ./ ITA NOS.2760 & 2761/CHNY/2017 ' #$' / ASSESSMENT YEARS : 2010-11 & 2011-12 M/S SOUNDARI FAMILY TRUST, NO.31, KASTURI RANGA ROAD, ALWARPET, CHENNAI - 600 018. PAN : AAAAS 7287 K V. THE INCOME TAX OFFICER, NON CORPORATE WARD - 3(2), CHENNAI - 600 034. (&'/ APPELLANT) (()&'/ RESPONDENT) &' * + / APPELLANT BY : SHRI M. KAUSHIK, ADVOCATE ()&' * + / RESPONDENT BY : SHRI B. SAGADEVAN, JCIT , # * -. / DATE OF HEARING : 16.10.2018 /0$ * -. / DATE OF PRONOUNCEMENT : 12.11.2018 / O R D E R BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AG AINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-4, CHENNAI, DATED 29.09.2017 AND PERTAIN TO ASSESSMENT YEARS 2010- 11 AND 2011-12. SINCE COMMON ISSUE ARISES FOR CONS IDERATION IN THESE APPEALS, I HEARD BOTH THE APPEALS TOGETHER AN D DISPOSING OF THE SAME BY THIS COMMON ORDER. 2 I.T.A. NOS.2760 & 2761/CHNY/17 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS REOP ENING OF ASSESSMENT UNDER SECTION 147 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 3. SHRI M. KAUSHIK, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THIS IS THE SECOND ROUND OF LITIGATION. IN TH E FIRST ROUND OF LITIGATION, ACCORDING TO THE LD. COUNSEL, THE ASSES SING OFFICER REOPENED THE ASSESSMENT BY ISSUING NOTICE UNDER SEC TION 148 OF THE ACT ON 03.10.2013. THE FIRST REASSESSMENT, AFT ER REOPENING OF ASSESSMENT ON THE BASIS OF THE NOTICE ISSUED ON 03. 10.2013, WAS COMPLETED BY AN ORDER DATED 31.03.2015. ON THE VER Y SAME DAY, I.E. ON 31.03.2015, THE ASSESSING OFFICER REOPENED THE ASSESSMENT FOR THE SECOND TIME. ACCORDING TO THE LD. COUNSEL, WHEN THE ASSESSMENT WAS REOPENED BY ISSUING NOTICE UNDER SEC TION 148 OF THE ACT ON 03.10.2013 AND IT WAS PERTAINING TO THE INCOME WHICH ESCAPED ASSESSMENT, THE ASSESSING OFFICER CANNOT RE OPEN THE ASSESSMENT ONCE AGAIN. ACCORDING TO THE LD. COUNSE L, NO FRESH MATERIAL WAS AVAILABLE ON RECORD FOR THE PURPOSE OF REOPENING THE ASSESSMENT FOR SECOND TIME. ACCORDING TO THE LD. C OUNSEL, THE ASSESSING OFFICER CANNOT EXERCISE HIS AUTHORITY WIT HOUT ANY FRESH MATERIAL ON RECORD, THEREFORE, REOPENING OF ASSESSM ENT IS INVALID. 3 I.T.A. NOS.2760 & 2761/CHNY/17 4. ON THE CONTRARY, SHRI B. SAGADEVAN, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT NO DOUBT, THE ASSESS ING OFFICER REOPENED THE ASSESSMENT FOR THE SECOND TIME BY ISSU ING NOTICE ON 31.03.2015 ON THE SAME DAY THE FIRST REASSESSMENT W AS COMPLETED. ACCORDING TO THE LD. D.R., THERE WAS NO BAR UNDER T HE INCOME-TAX ACT TO REOPEN THE ASSESSMENT FOR SECOND TIME WHEN T HE ASSESSING OFFICER FOUND THAT THERE WAS INCOME OTHERWISE CHARG EABLE TO TAX ESCAPED ASSESSMENT. THE LD. D.R. POINTED OUT THAT ON 31.03.2015, THE FIRST REASSESSMENT WAS COMPLETED AND ON THE VER Y SAME DAY THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 O F THE ACT AND SERVED ON THE ASSESSEE. THE LD. D.R. FURTHER POINT ED OUT THAT FOR THE SECOND REASSESSMENT, NOTICE DATED 31.03.2015 WA S ISSUED AFTER GETTING APPROVAL OF THE JOINT COMMISSIONER OF INCOM E TAX. ON A QUERY FROM THE BENCH, WHEN THE PROPOSAL FOR REOPENI NG OF ASSESSMENT FOR SECOND TIME WAS SENT TO THE JCIT? T HE LD. D.R. AFTER VERIFYING THE FILE, SUBMITTED THAT SUCH A PRO POSAL IS NOT AVAILABLE ON RECORD. THE LD. D.R. AFTER VERIFYING THE RECORDS, SUBMITTED THAT NOTICE UNDER SECTION 148 OF THE ACT FOR THE SECOND TIME WAS ISSUED ON 31.03.2015 ON WHICH DATE THE REA SSESSMENT ORDER ON THE BASIS OF NOTICE ISSUED UNDER SECTION 1 48 OF THE ACT ON 03.10.2013 WAS COMPLETED. 4 I.T.A. NOS.2760 & 2761/CHNY/17 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHE R SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE QUESTION ARISES FOR CONSIDERATION IS WHEN THE FIRST REASSESS MENT PROCEEDING ON THE BASIS OF NOTICE ISSUED UNDER SECTION 148 OF THE ACT ON 03.10.2013 WAS PENDING, CAN THE ASSESSING OFFICER R EOPEN ASSESSMENT BY ISSUING ANOTHER NOTICE? ON THE BASIS OF NOTICE ISSUED ON 03.10.2013, THE ASSESSING OFFICER COMPLET ED THE REASSESSMENT ON 31.03.2015. ON THE VERY SAME DAY, I.E. ON 31.03.2015, THE ASSESSING OFFICER ISSUED ANOTHER NO TICE UNDER SECTION 148 OF THE ACT AND SERVED THE SAME ON THE S AME DAY. WHEN THE ASSESSING OFFICER REOPENED THE ASSESSMENT BY ISSUING NOTICE ON 03.10.2013 AND THE REASSESSMENT PROCEEDIN G WAS PENDING TILL 31.03.2015, IT IS NOT KNOWN WHAT PROMP TED THE ASSESSING OFFICER TO ISSUE ANOTHER NOTICE UNDER SEC TION 148 OF THE ACT ON 31.03.2015? THIS TRIBUNAL IS OF THE CONSIDE RED OPINION THAT WHEN THE ASSESSMENT WAS REOPENED BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT 03.10.2013, THE ASSESSING OF FICER COULD HAVE BROUGHT TO TAXATION ALL THE INCOME WHICH ESCAPED AS SESSMENT. THEREFORE, THERE IS NO JUSTIFICATION FOR THE ASSESS ING OFFICER TO ISSUE A NOTICE ONCE AGAIN WHEN THE FIRST REASSESSMENT PRO CEEDING WAS PENDING. 5 I.T.A. NOS.2760 & 2761/CHNY/17 6. IN THIS CASE, THE ASSESSING OFFICER PASSED REASS ESSMENT ORDER ON 31.03.2013 AND AGAIN ISSUED NOTICE ON THE VERY SAME DAY. NO FRESH MATERIAL CAME TO THE POSSESSION OF THE ASS ESSING OFFICER ON THE DAY ON WHICH THE FIRST REASSESSMENT ORDER WA S PASSED. MOREOVER, AS HELD BY THE MADRAS HIGH COURT IN TANMA C INDIA V. DCIT (2016) 97 CCH 189, SECTION 147 OF THE ACT IS N OT FOR EXTENDING TIME LIMIT FOR COMPLETING ASSESSMENT. TH IS TRIBUNAL IS OF THE CONSIDERED OPINION THAT REOPENING OF ASSESSMENT FOR SECOND TIME ON THE DAY ON WHICH THE FIRST REASSESSMENT WAS COMPLETED ON 31.03.2015 IS BAD IN LAW. EVEN IF THERE WAS ESCAPE MENT OF INCOME, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER OUGHT TO HAVE BROUGHT TO TAXATION ON THE BASIS OF N OTICE ISSUED ON 03.10.2013 UNDER SECTION 148 OF THE ACT. THEREFORE , REOPENING OF ASSESSMENT BY ISSUING ANOTHER NOTICE ON 31.03.2015 IS NOT JUSTIFIED. HENCE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE CONSEQUENTIAL ORDER PASSED BY THE ASS ESSING OFFICER IS QUASHED. 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. 6 I.T.A. NOS.2760 & 2761/CHNY/17 ORDER PRONOUNCED IN THE COURT ON 12 TH NOVEMBER, 2018 AT CHENNAI. SD/- ( ... ) (N.R.S. GANESAN) /JUDICIAL MEMBER /CHENNAI, 2 /DATED, THE 12 TH NOVEMBER, 2018 KRI. * (-34 54$- /COPY TO: 1. &' /APPELLANT 2. ()&' /RESPONDENT 3. , 6- () /CIT(A)-4, CHENNAI-34 4. PRINCIPAL CIT, CHENNAI-5, CHENNAI 5. 4#7 (- /DR 6. 8' 9 /GF.