M/s. Krutika Developers Pvt. Ltd., Ahmedabad V. The Income Tax Officer, Ward-2(1)(2), Ahmedabad

ITA 3460/AHD/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2348 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 21-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Reason to believe
• Section: 271(1)(c); 143(3); 148; 144

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD - BENCH B BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO.3459 AND 3460/AHD/2016 / ASSTT. YEAR: 2009-2010 M/S.KRUTIKA DEVELOPERS P. LTD. KAYCREST, SECOND FLOOR PARIMAL GARDEN OPP: GUJARAT GAS CO LTD. AHMEDABAD. PA|N : AAACK 8849 C VS. ITO, WARD-2(1)(2) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI TUSHAR HEMANI, AR REVENUE BY : SHRI VIRENDRA SINGH, SR.DR ! / DATE OF HEARING : 13/06/2019 '#$ ! / DATE OF PRONOUNCEMENT: 25/06/2019 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST SEPARATE ORDERS OF THE LD.CIT(A)-2, AHMEDAB AD OF EVEN DATED I.E. 7.11.2016 PASSED ON THE RESPECTIVE APPEALS OF THE ASSESSEE. ITA NO.3460/AHD/2016 AROSE FROM THE ASSESSMENT PROCEEDI NGS UNDERTAKEN UNDER SECTION 144 R.W.S 147 IN THE ASSTT.YEAR 2009- 10; WHEREAS ITA NO.3459/AHD/2016 HAS ARISEN FROM PENALTY PROCEEDING S INITIATED BY THE AO UNDER SECTION 271(1)(C) OF THE ACT IN THE ASSTT. YEAR 2009-10. ITA NO.3459 AND 3460/AHD/2016 2 2. FIRST WE TAKE QUANTUM APPEAL. IN GROUND NO.1, T HE ASSESSEE HAS CHALLENGED REOPENING OF THE ASSESSMENT BY ISSUANCE OF NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT. 3. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES WE HAVE GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECORD THAT THE ASSESSMENT ORDER WAS PASSED UNDER SECTION 143(3) ON 20.9.2011 ASSESSING TOTAL INCOME AT RS.NIL. THE AO THEREAFT ER REOPENED THE ASSESSMENT BY RECORDING FOLLOWING REASONS: REASONS FOR REOPENING OF ASSESSMENT THE ASSESSEE COMPANY HAS FILED RETURN OF INCOME ON 30.09.2009 DECLARING TOTAL INCOME 'NIL'. THE ASSESSEE COMPANY HAVE MENTIONED RECEIPTS ON ACCOUNT OF 'MONTHLY MAINTENAN CE INCOME OF RS. 1,62,720/- IN THE TRIAL BALANCE FOR THE PERIOD 01.04.2008 TO 31.03.2009', BUT THE SAME WAS NOT SHOWN IN THE P&L ACCOUNT AND THE STATEMENT OF TOTAL INCOME AND THIS HAS RESULTED IN UNDERASSESSMENT OF RS.1,62,720/-. I THEREFORE, REASON TO BELIEVE THAT, BY OMISSION ON PART OF ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR THE ASSESSMENT. THE INCOME OF ASSESSEE COMPANY HAS ESCAPE THE ASSESSMENT WITHIN THE MEANING OF SEC. 147 OF THE AC T. ISSUED NOTICE U/S. 148 OF THE ACT FOR A.Y. 2009-10. SD/- DATE: 21.11.2014 (DEEPAK PAREEK) PLACE: AHMEDABAD INCOME TAX OFFICER, WARD - 2(1)(2), AHMEDABAD. 4. NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED O N 21.11.2014. THE AO THEREAFTER PASSED ASSESSMENT ORDER EX PARTE ON 31.7.2015 UNDER SECTION 144 R.W.S. 147. HE MADE ADDITION OF RS.1,62,720/-. ON PERUSAL OF THE ABOVE REASONS, WE FIND THAT THE LD.A O HAS RE-APPRECIATED THE TRIAL BALANCE WHICH WAS ALREADY AVAILABLE TO HI M WHEN HE PASSED ORIGINAL ASSESSMENT ORDER UNDER SECTION 143(3) OF T HE ACT. HE HAS NOT TAKEN COGNIZANCE OF ANY FRESH INFORMATION. IT IS A LSO PERTINENT TO ITA NO.3459 AND 3460/AHD/2016 3 OBSERVE THAT NOTICE UNDER SECTION 148 OF THE ACT WA S ISSUED AFTER EXPIRY OF FOUR YEARS FROM END OF THE RELEVANT ASSESSMENT Y EAR. NOTICE WAS ISSUED ON 21.11.2014 WHEREAS FOUR YEARS FOR THE ASS TT.YEAR 2009-10 WILL EXPIRE ON 31.3.2014. SINCE SCRUTINY ASSESSMEN T WAS ALSO THERE IN THIS CASE, AND IN THAT SITUATION, PROVISO APPENDED TO SECTION 147 WOULD COME TO THE RESCUE OF THE ASSESSEE. THE INTERDICTI ON IN THE PROVISO APPENDED TO SECTION 147 PUTS AN EMBARGO IN THE EXER CISE OF POWER AT THE END OF THE AO IN CASES WHERE SCRUTINY ASSESSMEN T HAS TAKEN PLACE AND FOUR YEARS HAVE EXPIRED FROM THE END OF RELEVAN T ASSESSMENT YEAR. IN SUCH CASES, THE ASSESSMENT CANNOT BE REOPENED UN LESS IT ITS DEMONSTRATED THAT INCOME HAS ESCAPED ASSESSMENT ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULLY AND TRULY IN RESPECT OF HIS ASSESSABLE INCOME. A PERUS AL OF THE REASONS WOULD INDICATE THAT NO SUCH CIRCUMSTANCES HAVE BEEN PRESSED BY THE AO. HE HAS RE-APPRECIATED TRIAL BALANCE-SHEET WHIC H IS ALSO AVAILABLE TO HIM WHEN ORIGINAL ASSESSMENT ORDER WAS PASSED. THE REFORE, RE- ASSESSMENT IS NOT SUSTAINABLE. IT DESERVES TO BE Q UASHED. ACCORDINGLY, WE QUASH THE RE-ASSESSMENT ORDER. 5. AS FAR AS LEVY OF PENALTY UNDER SECTION 271(1)(C ) OF THE ACT IS CONCERNED, WE FIND THAT SUB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES MECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEM PLATES THAT THE ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE BY HIM, WHICH SHALL NOT BE LESS THAN , BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE E VADED BY REASON OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY I S DEPENDED UPON THE ADDITION MADE TO THE INCOME OF THE ASSESSEE. IN TH E PRESENT CASE, SINCE WE HAVE ALREADY QUASHED RE-ASSESSMENT ORDER, THE VERY BASIS FOR COMPUTATION OF SUCH PENALTY HAS BEEN EXTINGUISHED. THEREFORE, NO PENALTY IS IMPOSABLE ON THE ASSESSEE. IT IS CANCEL LED AND GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO.3459 AND 3460/AHD/2016 4 6. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 25 TH JUNE, 2019 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER