Preetha S Nair, Kollam V. ACIT, Circle-1, Kollam

ITA 287/COCH/2021

AI Insights

The case involves Preetha S. Nair, the proprietor of Nut Products Company, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The original assessment for the year 2001-02 was reopened by the Assessing Officer under section 143(3) read with section 147 of the Income Tax Act, 1961, to disallow 90% of processing charges while computing deduction under section 80HHC. This reopening was contested by the assessee on both legal and merit grounds during the appellate proceedings. The Tribunal found that the reopening was based on a subsequent Supreme Court decision, which did not meet the legal requirements for reassessment as stipulated under the proviso to section 147 of the Income Tax Act, leading to the quashing of the reassessment proceedings.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 134592 (ITAT-COCHIN)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 31-12-0000
• Assessment Year: misc
• Appeal Filed On: 30-12-2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Assessment record
• Section: 148; 143(3); 80HHC

Judgement Text

आयकर अपीलीय अिधकरण, कोचीन पीठ, कोचीन म । IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN माननीय %ी सतबीर िसंह गोदारा, -ाियक सद. एवं माननीय %ी मनोज कु मार अ3वाल ,लेखा सद. के सम6। BEFORE HON’BLE SHRI SATBEER SINGH GODARA, J.M AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, A.M आयकर अपील सं./ ITA No.287/Coch/2021 (िनधा@रण वष@ / Assessment Year: 2001-02) Preetha S. Nair Prop: Nut Products Company, Kochupilammoodu, Kollam-691 001. बनाम / V s. ACIT Circle-1, Kollam. थायी लेखा सं./जीआइ आर सं./P AN /GI R No . AB DP N-1 3 7 9 -H (अपीलाथ /Appellant) : ( थ / Respondent) अपीलाथ की ओरसे/ Appellant by : Shri T.V. Hariharan (CA) – Ld. A.R थ की ओरसे/Respondent by : Smt.J.M. Jamuna Devi (Addl.CIT) – Ld. DR सुनवाई की तारीख/Date of Hearing : 10-11-2022 घोषणा की तारीख /Date of Pronouncement : 30-11-2022 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2001-02 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 10-11-2021 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s.143(3) r.w.s. 147 of the Act on 02-09-2008. The assessee assails the addition on legal grounds as well as on merits. ITA No.287/Coch/2021 - 2 - 2. From the assessment records, it emerges that the assessee was assessed u/s 143(3) on 01.03.2004. However, the case was reopened and notice u/s 148 was issued on 17.03.2008 which is beyond 4 years from end of relevant assessment year. The case was reopened to disallow 90% of processing charges while computing deduction u/s 80HHC. Upon computation, the eligible profits were found to be loss and accordingly, deduction u/s 80HHC was denied to the assessee. 3. During appellate proceedings, the assessee assailed reopening on the ground that the reopening was on the basis of subsequent decision of Hon’ble Supreme Court which is impermissible. The assessee also assailed the assessment on merits. However, rejecting all the pleas of the assessee, Ld. CIT(A) confirmed the action of Ld. AO against which the assessee is in further appeal before us. 4. The undisputed position that could be culled out is that the assessee was subjected to regular scrutiny assessment proceedings u/s 143(3). However, the case was reopened beyond 4 years based on subsequent decision by Hon’ble Supreme Court. However, in terms of requirements of proviso to Sec.147, there is no allegation of failure on the part of the assessee to make true and full disclosure of all material facts which were necessary for framing the assessment. The review of order based on subsequent decision is not permissible. Therefore, we quash the reassessment proceedings. The assessee succeeds on legal ground which renders ground on merits as infructuous. ITA No.287/Coch/2021 - 3 - 5. The appeal stand allowed in terms of our above order. Order pronounced on 30 th November, 2022. Sd/- (SATBEER SINGH GODARA) -ाियक सद. /JUDICIAL MEMBER Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद. / ACCOUNTANT MEMBER िदनांक / Dated : 30-11-2022 EDN/- Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) -NFAC, Delhi 4. The CIT - 5. The DR, ITAT, Cochin 6. Guard File