Appeal Details
Counselvise Citation
[2017] 128 COUNSELVISE.COM (IT) 5929 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 4 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-05-2017
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
13-04-2017
Assessment Year
2004-2005
Appeal Filed On
17-12-2013
Judgement Text
, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.3013 AND 3014/AHD/2013 / ASSTT. YEAR: 2004-2005 AND 2005-2006 ITO, WARD-3(1) SURAT. VS. M/S.PAULOMI ROAD BUILDERS U-1, AMARKRUTI APARTMENT NR. SARGAM COMPLEX ATHWALINES, SURAT PA : AADFP 1030 G / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI K. MADHUSUDHAN, SR.DR ASSESSEE BY : NONE ! / DATE OF HEARING : 13/04/2017 '#$ ! / DATE OF PRONOUNCEMENT: 01/05/2017 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANCE OF REVENUE AGAINST SEPARATE ORDERS OF LD.CIT(A)-IV, SURAT DATE D 18.9.2010 PASSED FOR THE ASSTT.YEARS 2004-05 AND 2005-06. 2. SOLITARY GRIEVANCE OF THE REVENUE IN BOTH THE YE ARS IS THAT THE LD.CIT(A) HAS ERRED IN QUASHING RE-ASSESSMENT ORDER S PASSED BY THE LD.AO IN BOTH THE YEARS. IN RESPONSE TO NOTICE OF HEARING, NO ONE HAS COME PRESENT ON BEHALF OF THE ASSESSEE. WITH THE A SSISTANCE OF THE ITA NO.3013/AHD/2013 & OTHERS 2 LD.DR, WE HAVE GONE THROUGH THE RECORD AND PROCEED TO DECIDE THESE APPEALS EX PARTE QUA THE ASSESSEE. IT EMERGES OUT FROM RECORD THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME 1.11.2004 A ND 28.10.2005 DECLARING TOTAL INCOME AT RS.NIL IN THE ASSTT.YEAR 2004-05 AND 2005- 06. THE LD.AO HAS PASSED ORIGINAL ASSESSMENT ORDERS UNDER SECTION 143(3) ON 22.12.2006 AND 31.12.2007. IT APPEARS TH AT AUDIT TEAM HAS RAISED OBJECTION, AND THEREFORE, THE LD.AO HAS RECO RDED REASONS FOR REOPENING OF THE ASSESSMENT. HE ISSUED NOTICE UNDE R SECTION 148 OF THE INCOME TAX ACT, 1961 ON 10.3.2011 IN BOTH THE YEARS . ACCORDING TO THE AO, THE ASSESSEE HAS TREATED UNABSORBED DEPRECIATIO N AT PAR WITH THE CURRENT YEAR DEPRECIATION AND IT SHOULD HAVE CLAIME D REMUNERATION PAYABLE TO THE PARTNERS UNDER SECTION 40(B) AFTER S ETTING OFF OF UNABSORBED DEPRECIATION OF THE PAST. THUS, IN THE OPINION OF THE AO, THE ASSESSEE CLAIMED EXCESS PARTNERS REMUNERATION AT RS.4,50,000/- AND RS.4,30,000/- IN THE ASSTT.YEAR 2005-06. 3. DISSATISFIED WITH THE ACTION OF THE AO, THE ASSE SSEE CARRIED THE MATTER BEFORE THE LD.CIT(A). IT CONTENDED THAT TH E COMPUTATION WITH REGARD TO ADMISSIBILITY OF REMUNERATION TO THE PART NERS UNDER SECTION 40(A) OF THE ACT WAS DULY CERTIFIED BY THE CHARTERE D ACCOUNTANT IN THE TAX AUDIT REPORT. IT WAS PART OF THE RETURN. IT W AS DULY DISCLOSED. THE AO FAILED TO POINT OUT ANY MATERIAL WHICH CAN SUGGE ST THAT THE ASSESSEE HAS DISCLOSED INACCURATE FACTS WHICH HAS RESULTED E SCAPEMENT OF INCOME. THE LD.CIT(A) WAS SATISFIED WITH THE CONTE NTION OF THE ASSESSEE AND HELD THAT THE REOPENING OF THE ASSESSMENT IS NO T SUSTAINABLE. 4. ON DUE CONSIDERATION OF THE RECORD, WE FIND THAT ORIGINAL ASSESSMENT ORDER WAS PASSED UNDER SECTION 143(3) AN D NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED AFTER EXPIRY OF F OUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. PROVISIO APPE NDED TO SECTION 147 OF THE ACT PUTS AN EMBARGO UPON THE POWERS OF THE A O FOR REOPENING OF THE ASSESSMENT ORDER. IT CONTEMPLATES THAT WHERE T HE ASSESSMENT ITA NO.3013/AHD/2013 & OTHERS 3 UNDER SECTION 143(3) OR UNDER SECTION 147 OF THE AC T WAS MADE THEN NO ACTION SHALL BE TAKEN UNDER SECTION 147 OF THE INCO ME TAX AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSME NT YEARS UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED THE ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO MAKE RETURN UNDER SECTION 139 OR IN RESPONSE TO THE NOTICE UNDER SECTION 142 OR UNDER SECTION 148 OR TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THA T ASSESSMENT YEAR. IN OTHER WORDS, IF AN ASSESSEE FAILS TO SUBMIT RETU RN UNDER SECTION 139 OR ON THE DIRECTION OF THE AO UNDER SECTION 142 OR 148 FAILS TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS WHICH HAS RESUL TED IN ESCAPEMENT OF INCOME FROM TAXABILITY, THE AO CAN REOPEN THE ASSES SMENT. IN THE PRESENT APPEALS, THE LD.AO WAS FAILED TO DEMONSTRAT E ANY FAILURE ON THE PART OF THE ASSESSEE AS PROVIDED IN THE PROVISIONS OF SECTION 147 OF THE ACT. THE LD.CIT(A) HAS RIGHTLY QUASHED THE RE-ASSE SSMENT ORDER AND WE DO NOT FIND ANY ERROR IN THE IMPUGNED ORDER OF THE LD.CIT(A). THEY ARE CONFIRMED. 5. IN THE RESULT, THE APPEALS OF THE REVENUE ARE DI SMISSED. ORDER PRONOUNCED IN THE COURT ON 1 ST MAY, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/05/2017
