ACIT, Circle, Panchkula V. Haryana Tourism Corporation Ltd., Chandigarh

ITA 334/CHANDI/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1274 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 14-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDER KANTA
• Assessee Lawyers: HARISH NAYYAR
• Keywords: Depreciation; Tangible material; Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 334/CHD/2018 ASSESSMENT YEAR : 2010-11 THE ACIT, VS. HARYANA TOURISM CORPORATION LTD., PANCHKULA CIRCLE, SCO 17-19,SECTOR 17 B, PANCHKULA PANCHKULA PAN NO. AAACH4108B (APPELLANT) (RESPONDENT) APPELLANT BY : SMT.CHANDERKANTA, SR.DR RESPONDENT BY : SH.HARISH NAYYAR, ADVOCATE DATE OF HEARING : 09.08.2018 DATE OF PRONOUNCEMENT : 07.09.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER DATED 15.01.2018 OF THE COMMISSIONER OF I NCOME TAX(A)- PANCHKULA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE REVENUE IN THIS APPEAL HAS TAKEN THE FOLLOWI NG GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CJT(A) HAS ERRED TO ALLOW THE APPEAL OF THE ASSESSEE AND QUASHED THE ASSESSMENT U/S 147 BY HOLDING THAT THE PROCEEDINGS INITIATED FOR REOPENIN G IS FOUND TO BE INVALID WHICH IS NOT CORRECT BECAUSE TH E AO HAS OPENED THE CASE U/S 147 WITHIN THE TIME PERI OD AND AO HAVE REASONS TO BELIEVE THAT THE ASSESSEE HA S NOT DISCLOSED THE FACTS FULLY AND TRULY AS PER THE RETURN OF INCOME. ITA NO. 334-CHD.-2018 HARYANA TOURISM CORPORATION LTD, CHANDIGARH 2 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED TO ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE ADDITION OF RS. 85.00,000/- MADE U/S 36(L)(V) OF THE ACT BY HOLDING THAT REOPEN ING HAS BEEN HELD TO HE NOT VALID WHICH IS NOT CORRECT BECAUSE REOPENING THE EASE IS CORRECT AND WITHIN TI ME PERIOD AND ALSO AO HAVE REASONS TO BELIEVE THAT THE ASSESSEE HAS NOT DISCLOSED THE FACTS FULLY AND TRUL Y AS PER THE RETURN OF INCOME. 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE SET- ASIDE AND THAT OF THE A.O. BE RESTORED. 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE IMPUGNED ADDITIONS WERE MADE BY THE ASSESSING O FFICER IN THE REOPENED ASSESSMENT PROCEEDINGS U/S 147 OF THE INCO ME-TAX ACT, 1961 (IN SHORT 'THE ACT'). HE HAS FURTHER SUBMITTE D THAT THE ASSESSEE HAS AGITATED THE VALIDITY OF THE REOPENING OF THE A SSESSMENT U/S 147 OF THE ACT BEFORE THE LD. CIT(A) AND THAT THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAS QUA SHED THE RE- ASSESSMENT PROCEEDINGS AND THEREBY DELETING THE IM PUGNED ADDITIONS MADE BY THE ASSESSING OFFICER. THE LD. COUNSEL HAS FURTHER SUBMITTED THAT EVEN THE FACTS IN THIS CASE ARE IDEN TICAL TO THE CASE FOR THE EARLIER ASSESSMENT YEAR I.E. FOR ASSESSMENT YEA R 2009-10 IN ITA NO. 830/CHD/2015. THAT THIS TRIBUNAL IN THAT CASE VIDE ITS COMMON ORDER DATED 5.7.2017 HAD QUASHED THE RE-OPENING OF THE ASSESSMENT, OBSERVING AS UNDER:- 2. SO FAR AS THE REOPENING OF THE ASSESSMENT FOR ASSESSMENT YEAR 2009-10 IS CONCERNED, THE SAME HAS BEEN DONE ON TWO ISSUES, FIRSTLY THE EXCESS CLA IM OF ALLOWANCE OF LEAVE ENCASHMENT AND SECONDLY EXCES S CLAIM OF DEPRECIATION ON PLANT AND MACHINERY. THOUG H ITA NO. 334-CHD.-2018 HARYANA TOURISM CORPORATION LTD, CHANDIGARH 3 ASSESSMENT HAS BEEN REOPENED WITHIN 4 YEARS FROM TH E END OF THE RELEVANT ASSESSMENT YEAR, BUT THE SAME, IN OUR VIEW, IS NOT VALID BECAUSE OF THE REASONS THAT NO FRESH TANGIBLE MATERIAL HAS COME TO THE POSSESSION OR KNOWLEDGE OF THE ASSESSING OFFICER FOR TRIGGERING T HE REOPENING OF THE ASSESSMENT. THE RE-OPENING IN THIS CASE HAS BEEN DONE BY THE ASSESSING OFFICER ON THE BASIS OF RE-APPRECIATION OF THE RECORD. ADMITTEDLY, NO FRESH TANGIBLE MATERIAL CAME INTO THE POSSESSION OF THE ASSESSING OFFICER TO FORM A BELIEF THAT THE IN COME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. THE COURT S OF LAW, TIME AND AGAIN, HAVE HELD THAT A REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT SHOULD BE BASED ON SOME TANGIBLE MATERIA L WHICH COMES TO THE KNOWLEDGE OF THE ASSESSING OFFICER. AN ASSESSMENT CANNOT BE REOPENED UNDER SECTION 147 OF THE ACT ON THE BASIS OF MERE SUSPICI ON OR CHANGE OF OPINION. IN THIS CASE, THE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT HAD ALREADY BECOME FINAL. THE HON'BLE DELHI HIGH COURT IN A VERY RECENT CASE INDU LATA RANGWALA VS. DCIT (2017) 80 TAXMAN.COM 102 (DELHI) AFTER DELIBERATING ON VARIOUS AUTHORIT IES INCLUDING THAT OF THE HON'BLE SUPREME COURT AND OTHER HIGH COURTS HAS CONCLUDED THAT IN A CASE WHER E INITIALLY ASSESSMENT ORDER IS PASSED U/S 143(3) AND THE ASSESSMENT IS SOUGHT TO BE REOPENED WITHIN FOUR YEARS FROM THE EXPIRY OF THE RELEVANT ASSESSMENT YEAR, THE ASSESSING OFFICER HAS TO BASE HIS REA SONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT ON SOME FRESH TANGIBLE MATERIAL THAT PROVIDES THE NEXU S OR LINK TO THE FORMATION OF SUCH A BELIEF. IDENTIC AL VIEW HAS BEEN TAKEN BY THE DELHI HIGH COURT IN THE CASE OF AGYA RAM VS. CIT (2016) 72 TAXMAN.COM 287 (DELHI). 3. THE FACTS OF THE CASE IN HAND WHEN SEEN IN THE LIGHT OF THE LEGAL PROPOSITION AS LAID DOWN BY THE HON'BLE DELHI HIGH COURT AS DISCUSSED ABOVE, THE REOPENING IN THIS CASE CANNOT BE HELD TO BE VALID A ND THE SAME IS ACCORDINGLY QUASHED. SINCE WE HAVE QUASHED THE VERY REOPENING OF THE ASSESSMENT IN RELATION TO THE APPEALS FOR ALL THE THREE ASSESSMEN T YEARS UNDER CONSIDERATION, THE CONSEQUENTIAL ADDITIONS MADE BY THE ASSESSING OFFICER HAVE NO LEG S TO STAND. HENCE, WITHOUT GOING INTO THE MERITS OF THE ADDITIONS MADE BY THE ASSESSING OFFICER MADE ITA NO. 334-CHD.-2018 HARYANA TOURISM CORPORATION LTD, CHANDIGARH 4 CONSEQUENT TO THE REOPENING OF THE ASSESSMENT IN RELATION TO THE ABOVE STATED THREE ASSESSMENT YEARS UNDER CONSIDERATION, ALL THE APPEALS OF THE ASSESSE E ARE ALLOWED ON THE GROUND OF INVALIDITY OF THE REOPENING OF THE ASSESSMENT. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER SUBMIT TED THAT EVEN THE CIT(A) HAS FOLLOWED THE SAME PROPOSITION WHILE REL YING UPON THE DECISION IN THE CASE OF CIT VS KELVINATOR OF INDIA LTD. [2010] 320 ITR 561 (SC). 4. THE LD. DR HAS NOT POINTED OUT ANY DISTINGUISHIN G FACTS JUSTIFYING OUR DEPARTURE FROM THE VIEW TAKEN IN RELATION TO THE VALIDITY OF THE REOPENING OF THE ASSESSMENT BY THE TRIBUNAL IN THE CASE OF THE ASSESSEE IN EARLIER ASSESSMENT YEAR AS REPRODUCED ABOVE. 5. IN VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) WHILE QUASHING THE REOPENING OF THE ASSESSME NT IN THIS CASE AND THEREBY DELETING THE IMPUGNED ADDITIONS. THE APPEAL OF THE REVENUE IS THEREFORE, DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.09.2018 SD/- SD/- (B.R.R KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 07.09.2018 RKK COPY TO: THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) THE DR ITA NO. 334-CHD.-2018 HARYANA TOURISM CORPORATION LTD, CHANDIGARH 5