Namita Malla Sarkar, Agartala V. Income Tax Officer, Ward-Udaipur, Agartala

ITA 426/GTY/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4265 (ITAT-GUWAHATI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 04-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANTA MRIDHA
• Keywords: Question of law; Reason to believe; Reassessment proceedings
• Section: 147; 148; 139; 143(3); 143(1); 143(2); 139(1); 139(4); 72

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL GAUHATI VIRTUALCOURT, ATKOLKATA BEFORE SHRI A. T. VARKEY, JM &DR. A.L.SAINI, AM ./ITA NO.426/GAU/2019 ( / ASSESSMENT YEAR:2016-17) NAMITA MALLA SARKAR C/O, RAHUL RAJ JAIN & CO. H. NO. 15, 1 ST FLOOR, BYE LANE-2, SHAKTIGARH PATH, BHANGAGARH, G. S. ROAD,TRIPURA VS. ITO, WARD-UDAIPUR, TRIPURA ./ ./PAN/GIR NO.: JMYPS 2941 K (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI RAHUL JAIN, A.R. RESPONDENT BY : SHRI JAYANTA MRIDHA, JCIT, SR. D.R. / DATE OF HEARING : 10/09/2020 /DATE OF PRONOUNCEMENT : 09 /10/2020 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PER TAINING TO ASSESSMENT YEAR 2016-17, IS DIRECTED AGAINST THE ORDER PASSED BY T HE COMMISSIONER OF INCOME TAX (APPEAL) SHILLONG, IN APPEAL NO. CIT(A)/SHG/10 189/2018-19, DATED 07.08.2019, WHICH IN TURN ARISES OUT OF AN ASSESSME NT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) /147 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 26.02.2019. NAMITA MALLA SARKAR ITA NO.426/GAU/2019 ASSESSMENT YEAR:2016-17 2 2. ALTHOUGH, IN THIS APPEAL, THE ASSESSEE HAS RAISE D MULTIPLE GROUNDS OF APPEAL ON MERITS BUT AT THE TIME OF HEARING, THE SOLITARY GRI EVANCE OF THE ASSESSEE HAS BEEN CONFINED TO THE ISSUE THAT REASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER U/S 147/ 148 WAS BAD IN LAW.AT THE OUTSET T HE LD. COUNSEL FOR THE ASSESSEE, SHRI RAHUL JAIN, DREW OUR ATTENTION TO THE LEGAL IS SUE RAISED BY THE ASSESSEE WHEREIN THE ASSESSEE HAS CHALLENGED THE VALIDITY OF REASSESSMENT PROCEEDINGS UNDER SECTION 147/148 OF THE ACT. THE LD COUNSEL PR AYS THE BENCH TO ADJUDICATE THE SAID LEGAL ISSUE SINCE IT GOES TO THE ROOT OF T HE MATTER. THE LEGAL ISSUE RAISED BEFORE US IS THAT THE ASSESSING OFFICER ERRED IN IS SUING NOTICE UNDER SECTION 148 OF THE ACT, BEFORE THE EXPIRY OF THE TIME LIMIT PRESCR IBED U/S 143(2) OF THE ACT. SINCE THE FACTS NECESSARY TO ADJUDICATE THIS LEGAL ISSUE IS AVAILABLE FROM THE ORDERS OF THE AUTHORITIES BELOW AND SINCE THE ISSUE IS PURELY LEG AL THEREFORE WE RELY ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F NATIONAL THERMAL POWER CO. LTD. VS COMMISSIONER OF INCOME TAX ON, 4 TH DECEMBER, 1996 REPORTED IN (1998) 229 ITR 383 (SC) WHEREIN IT WAS HELD THAT LE GAL ISSUE CAN BE RAISED AT ANY STAGE OF THE APPEAL. WE ARE INCLINED TO ADMIT THE L EGAL ISSUE AND PROCEED TO DECIDE THE SAID LEGAL ISSUE. 3.WE HEARD BOTH THE PARTIES AND CAREFULLY GONE THRO UGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLU DING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIALS BROUGHT ON RECORD.BRIEF FACTS PERTAINING TO LEGAL ISSUE ARE THAT THE ASSESSMENT ORDER UNDER CONSIDERATION I S RELATING TO ASSESSMENT YEAR 2016-17. THE DUE DATE OF FILING THE RETURN OF INCOM EUNDER SECTION 139(1) WAS 30.09.2016. THE LAST DATE OF FILING OF RETURN OF I NCOME U/S 139(4) (BELATED RETURN OF INCOME) OF THE ACT WAS 31.03.2018.THE ASSESSEE U NDER CONSIDERATION HAD FILED THE RETURN OF INCOME ON 27.02.2018 (WITHIN THE TIME LIMIT PRESCRIBED UNDER SECTION 139 (4) OF THE ACT- BELATED RETURN). THE TI ME LIMIT FOR THE ASSESSING NAMITA MALLA SARKAR ITA NO.426/GAU/2019 ASSESSMENT YEAR:2016-17 3 OFFICER TO ISSUE NOTICE U/S 143(2) OF THE ACT WAS O N OR BEFORE 30.09.2018. HOWEVER, IN THE ASSESSEE`S CASE, THE ASSESSING OFFI CER ISSUED NOTICE UNDER SECTION 148 OF THE ACT ON 10.05.2018, BEFORE THE EX PIRY OF TIME LIMIT U/S 143(2) OF THE ACT. THIS ACTION OF THE ASSESSING OFFICER, ACCO RDING TO THE ASSESSEE, IS ILLEGAL AND THEREFORE THE REASSESSMENT FRAMED BY THE ASSES SING OFFICER UNDER SECTION 147/148 OF THE ACT IS BAD IN LAW.FOR THIS PROPOSIT ION OF LAW, LD COUNSEL RELIED ON THE JUDGMENT OF HONBLE BOMBAY HIGH COURT, AT NA GPUR BENCH, DATED 12.07.2017 IN THE CASE OF SMT. SUMANVS.ITO, INCOME TAX APPEAL NO. 72 OF 2003, ORDER DATED 12.07.2017 WHEREIN THE FACTS OF T HE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME ON 14.12.1999, WHICH WAS PROCESSED BY THE DEPARTMENT UNDER SECTION 143(1) OF THE ACT ON 07.01.2000. HOWEVER, N OTICE U/S 148 OF THE ACT FOR REOPENING WAS ISSUED ON 25.01.2000 (BEFORE THE EXPI RY OF TIME TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT). THE HONBLE HIGH COURT FRAMED THE QUESTION OF LAW AS UNDER: WHETHER ASSESSING OFFICER CAN PROCEEDS WITH EXTRAO RDINARY POWER U/S 147, PARTICULARLY WHEN NORMAL PROCEDURE OF ASSESSME NT OF INCOME U/S 143(3) ARE AVAILABLE WHICH ARE OTHERWISE WITHIN TIM E? THE HONBLE BOMBAY HIGH COURT OF NAGPUR BENCH IN TH E CASE OF SMT. SUMAN VS. ITO(SUPRA) ANSWERED THE QUESTION OF LAW IN FAVOUR O F ASSESSEE AS FOLLOWS: '12. RELIANCE IS PLACED UPON THE DECISION OF THE AP EX COURT IN RAJESH JHAVERI (SUPRA) BY THE REVENUE AND IN PARTICULAR UPON PARAG RAPH 18 THEREOF WHICH READS AS UNDER:- '18. SO LONG AS THE INGREDIENTS OF SECTION 147 ARE FULFILLED, THE ASSESSING OFFICER IS FREE TO INITIATE PROCEEDING UNDER SECTION 147 AN D FAILURE TO TAKE STEPS UNDER SECTION 143(3) WILL NOT RENDER THE ASSESSING OFFICE R POWERLESS TO INITIATE REASSESSMENT PROCEEDINGS EVEN WHEN INTIMATION UNDER SECTION 143(1) HAD BEEN ISSUED.' THE AFORESAID OBSERVATION BY THE APEX COURT IS MADE IN THE CONTEXT OF THE CONTENTION OF THE ASSESSEE THAT AN ASSESSING OFFICE R CANNOT INITIATE REASSESSMENT PROCEEDINGS, WHERE INTIMATION UNDER SECTION 143(1) HAS BEEN ISSUED AND THE NAMITA MALLA SARKAR ITA NO.426/GAU/2019 ASSESSMENT YEAR:2016-17 4 REVENUE FAILED TO TAKE STEPS TO ISSUE NOTICE UNDER SECTION 143(2) AND COMPLETE ASSESSMENT UNDER SECTION 143(3) OF THE ACT. THE AFO RESAID CONTENTION WAS NEGATIVED IN THE ABOVE REFERRED PARA ON THE GROUND THAT IN THE CONTEXT OF THE FACTS BEFORE IT, THE TIME TO ISSUE NOTICE UNDER SEC TION 143(3) OF THE ACT HAD EXPIRED. IT IS ONLY THEREAFTER THAT THE ASSESSING O FFICER COULD HAVE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT. IT IS IN SUCH CASES THAT THE ASSESSING OFFICER WOULD NOT BE PROHI BITED UNDER SECTION 147/148 OF THE ACT FROM SEEKING TO RECOVER TAX ON INCOME WH ICH HAS ESCAPED ASSESSMENT. IT IS CLEAR THAT NO REASSESSMENT PROCEEDINGS CAN BE INITIATED SO LONG ASSESSMENT PROCEEDINGS ON THE BASIS OF RETURN OF INCOME FILED BY THE ASSESSEE IS PENDING. THE ASSESSMENT PROCEEDINGS WOULD CEASE TO BE PENDING EI THER BY PASSING OF AN ORDER UNDER SECTION 143(3) OF THE ACT OR BY EXPIRY OF TIM E TO ISSUE A NOTICE UNDER SECTION 143(2) OF THE ACT, TO COMPLETE AN ASSESSMEN T UNDER SECTION 143(3) OF THE ACT. SO LONG AS THE ABOVE EVENT HAS NOT PASSED, THE ASSESSING OFFICER CANNOT RENDER THE PROVISION OF SECTION 143(2) OF THE ACT R EDUNDANT/OTIOSE BY ISSUING A NOTICE FOR REOPENING AN ASSESSMENT UNDER SECTION 14 7/148 OF THE ACT. THUS, IN THE LIGHT OF THE ABOVE JUDGMENT OF THE HON BLE BOMBAY HIGH COURT OF NAGPUR BENCH IN THE CASE OF SMT. SUMAN VS. ITO(SUPR A), IT IS ABUNDANTLY CLEAR THAT NO REASSESSMENT PROCEEDINGS CAN BE INITIATED S O LONG ASSESSMENT PROCEEDINGS ON THE BASIS OF RETURN OF INCOME FILED BY THE ASSES SEE IS PENDING. THE ASSESSMENT PROCEEDINGS WOULD SEIZE TO BE PENDING EITHER BY PAS SING AN ORDER U/S 143(3) OF THE ACT OR BY EXPIRY OF TIME TO ISSUE A NOTICE U/S 143(2) TO COMPLETE THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT. SO LO NG AS THE ABOVE EVENT, HAS NOT PASSED, THE ASSESSING OFFICER CANNOT RENDER THE PR OVISION OF SECTION 143(2) OF THE ACT REDUNDANT / OTIOSE BY ISSUING A NOTICE FOR REOPENING U/S 147 / 148 OF THE ACT. THEREFORE, IN OUR VIEW, THE REASSESSMENT PROCE EDINGS INITIATED IN THE CASE OF ASSESSEE UNDER CONSIDERATION IS BAD IN LAW. 4. NOW, WE DEAL WITH MAIN GRIEVANCE OF THE LD DR FO R THE REVENUE. THE LEARNED DR ARGUED BEFORE US THAT SO LONG AS THE INGREDIENTS OF SECTION 147 ARE FULFILLED, THE ASSESSING OFFICER IS FREE TO INITIATE PROCEEDIN G UNDER SECTION 147 AND FAILURE TO TAKE STEPS UNDER SECTION 143(3) WILL NOT RENDER THE ASSESSING OFFICER POWERLESS TO INITIATE REASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT. THEREFORE, NAMITA MALLA SARKAR ITA NO.426/GAU/2019 ASSESSMENT YEAR:2016-17 5 LDDR RELIED ON THE JUDGMENT OF THE HON`BLE SUPREME COURT IN THE CASE OF RAJESH JHAVERI STOCK BROKERS (P) LTD 291 ITR 500 (SC), TO SUPPORT THE ACTION OF THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 148 OF THE ACT BEFORE EXPIRY OF TIME LIMIT TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT. THE ABOVE CITED JUDGMENT BY LD DR IN THE CASE OF RAJESH JHAVERI IN (2007) 291 ITR 500 (SC) IS REPRODUCED BELOW FOR READY REFERENCE : 17. THE SCOPE AND EFFECT OF SECTION 147 AS SUBSTIT UTED WITH EFFECT FROM APRIL 1, 1989, AS ALSO SECTIONS 148 TO 152 ARE SUBS TANTIALLY DIFFERENT FROM THE PROVISIONS AS THEY STOOD PRIOR TO SUCH SUBSTITU TION. UNDER THE OLD PROVISIONS OF SECTION 147, SEPARATE CLAUSES (A) AND (B) LAID DOWN THE CIRCUMSTANCES UNDER WHICH INCOME ESCAPING ASSESSMEN T FOR THE PAST ASSESSMENT YEARS COULD BE ASSESSED OR REASSESSED. T O CONFER JURISDICTION UNDER SECTION 147(A) TWO CONDITIONS WERE REQUIRED T O BE SATISFIED FIRSTLY THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE T HAT INCOME PROFITS OR GAINS CHARGEABLE TO INCOME TAX HAVE ESCAPED ASSESSM ENT, AND SECONDLY HE MUST ALSO HAVE REASON TO BELIEVE THAT SUCH ESCAP EMENT HAS OCCURRED BY REASON OF EITHER (I) OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY OR TRULY ALL MATERIAL FACTS NECESSAR Y FOR HIS ASSESSMENT OF THAT YEAR. BOTH THESE CONDITIONS WERE CONDITIONS PR ECEDENT TO BE SATISFIED BEFORE THE ASSESSING OFFICER COULD HAVE JURISDICTIO N TO ISSUE NOTICE UNDER SECTION 148 READ WITH SECTION 147(A). BUT UNDER THE SUBSTITUTED SECTION 147 EXISTENCE OF ONLY THE FIRST CONDITION SUFFICES. IN OTHER WORDS IF THE ASSESSING OFFICER FOR WHATEVER REASON HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IT CONFERS JURISDICTION TO R EOPEN THE ASSESSMENT. IT IS HOWEVER TO BE NOTED THAT BOTH THE CONDITIONS MUST BE FULFILLED IF THE CASE FALLS WITHIN THE AMBIT OF THE PROVISO TO SECTI ON 147. THE CASE AT HAND IS COVERED BY THE MAIN PROVISION AND NOT THE PROVIS O. 18. SO LONG AS THE INGREDIENTS OF SECTION 147 ARE F ULFILLED, THE ASSESSING OFFICER IS FREE TO INITIATE PROCEEDING UNDER SECTIO N 147 AND FAILURE TO TAKE STEPS UNDER SECTION 143(3) WILL NOT RENDER THE ASSE SSING OFFICER POWERLESS TO INITIATE REASSESSMENT PROCEEDINGS EVEN WHEN INTIMATION UNDER SECTION 143(1) HAD BEEN ISSUED. THUS, WITH HELP OF THE ABOVE CITED JUDGMENT IN THE CASE OF RAJESH JHAVERI (SUPRA), THE LD DR CONTENDED THAT ASSESSING OFFICER CAN ISSU E NOTICE UNDER SECTION 148 OF THE ACT BEFORE EXPIRY OF TIME LIMIT TO ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT. NAMITA MALLA SARKAR ITA NO.426/GAU/2019 ASSESSMENT YEAR:2016-17 6 5. HOWEVER, WE DO NOT AGREE WITH THE ABOVE ARGUMENT S AND CONTENTION OF THE LD DR FOR THE REVENUE.WE NOTE THAT HON`BLE SUPREME COU RT IN THE CASE OF RAJESH JHAVERI STOCK BROKERS (P) LTD (SUPRA) HAS DEALT WIT H THE CONTENTION OF THE ASSESSEE THAT AN ASSESSING OFFICER CANNOT INITIATE REASSESSMENT PROCEEDINGS, WHERE INTIMATION UNDER SECTION 143(1) HAS BEEN ISSU ED AND THE REVENUE FAILED TO TAKE STEPS TO ISSUE NOTICE UNDER SECTION 143(2) AND COMPLETE ASSESSMENT UNDER SECTION 143(3) OF THE ACT. IN THE CASE OF RAJESH JHAVERISTOCK BROKERS (P) LTD (SUPRA) THE TIME LIMIT TO ISSUE NOTICE UNDER SECTIO N 143(2) WAS EXPIRED THEREFORE, THE ASSESSING OFFICER COULD ISSUE NOTICE UNDER SECTION 148 OF THE ACT. WHEREAS, IN ASSESSEE`S CASE UNDER CONSIDERATIO N THE TIME LIMIT TO ISSUE NOTICE UNDER SECTION 143(2) WAS NOT EXPIRED THEREFO RE ASSESSING OFFICER CANNOT ISSUE THE NOTICE UNDER SECTION 148 TO MAKE T HE REASSESSMENT UNDER SECTION 147 OF THE ACT. THEREFORE, WE DO NOT AGREE WITH THE ARGUMENT OF LD DR TO THE EFFECT THAT THE ASSESSING OFFICER IS FREE TO IN ITIATE PROCEEDING UNDER SECTION 147 AND FAILURE TO TAKE STEPS UNDER SECTION 143(3) WILL NOT RENDER THE ASSESSING OFFICER POWERLESS TO INITIATE REASSESSMENT PROCEEDI NGS UNDER SECTION 147 OF THE ACT. 6.HAVING HEARD BOTH THE PARTIES, WE NOTE THAT THIS LEGAL ISSUE RAISED BY THE ASSESSEE, BEFORE US, IS NO LONGER RES INTEGRA. WE NOTE SIMILAR ISSUE CROPPED UP BEFORE THE HONBLE BOMBAY HIGH COURT AT NAGPUR BENC H DATED 12.07.2017 IN THE CASE OF SMT. SUMAN (SUPRA).RESPECTFULLY FOLLOWING T HE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT AT NAGPUR BENCH DATED 12.07.2017 IN THE CASE OF SMT. SUMAN (SUPRA), WE QUASH THE REASSESSMENT PROCEEDING S INITIATED BY THE ASSESSING OFFICER UNDER SECTION 147/148 OF THE ACT. THUS, WE ALLOW THE LEGAL ISSUE RAISED BY THE ASSESSEE. NAMITA MALLA SARKAR ITA NO.426/GAU/2019 ASSESSMENT YEAR:2016-17 7 7. SINCE WE HAVE ALLOWED THE APPEAL OF THE ASSESSEE ON LEGAL ISSUE THEREFORE THE OTHER GROUNDS RAISED BY THE ASSESSEE ON MERITS BECO ME ACADEMIC AND DO NOT REQUIRE ADJUDICATION. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON 09.10.2020 SD/- ( A.T. VARKEY ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 09/10/2020 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. NAMITA MALLA SARKAR 2. ITO, WARD-UDAIPUR, TRIPURA 3. C.I.T(A)- 4. C.I.T.- GUWAHATI. 5. CIT(DR), GAUHATIBENCH, GUWAHATI. 6. GUARD FILE. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY / DDO / H.O.O ITAT, GAUHA TI BENCH