Assitant Commissioner of Income-tax, V. M/s. H.A. Developers, Pune

ITA 478/PUN/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9201 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-12-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 16-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Difference of opinion; Change of opinion
• Section: 143(3); 80IB; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , ! , ' # BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO. 478/PUN/2015 '% & '& / ASSESSMENT YEAR : 2004-05 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-9, PUNE. .... / APPELLANT (% / V/S. M/S. H. A. DEVELOPERS, PLOT NO.02, LALIT RAJ PARK, TANAJI NAGAR, CHINCHWAD, PUNE-33. PAN : AACFH5498M / RESPONDENT REVENUE BY : SHRI AJAY MODI, JCIT ASSESSEE BY : NONE / DATE OF HEARING : 12.12.2017 / DATE OF PRONOUNCEMENT : 28.02.2018 ) / ORDER PER VIKAS AWASTHY, JM THIS APPEAL BY THE DEPARTMENT IS DIRECTED AGAINST THE O RDER OF COMMISSIONER OF INCOME TAX (APPEALS), PUNE-6 DATED 28.01.20 15 FOR THE ASSESSMENT YEAR 2004-05. 2 ITA NO.478/PUN/2015 A.Y.2004-05 2. THE FACTS OF THE CASE AS EMANATING FROM THE RECORDS ARE: THE ASSESSEE- FIRM IS A PROMOTER AND DEVELOPER OF LAND. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL ON 25.02.200 5 DECLARING INCOME OF RS.9,98,000/-. THE ASSESSEE IN ITS RETURN OF INCOM E CLAIMED DEDUCTION OF RS.1,79,57,010/- U/S.80IB (10) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). IN SCRUTINY ASSESS MENT PROCEEDINGS, ASSESSEES CLAIM OF DEDUCTION U/S.80IB(10) WAS ACCEPTED VIDE ORDER DATED 19.10.2006. SUBSEQUENTLY, THE ASSESSMENT IN THE CASE OF A SSESSEE WAS REOPENED AND NOTICE U/S. 148 WAS ISSUED TO THE ASSESSE E ON 18.01.2007. IN RE-ASSESSMENT PROCEEDINGS, ASSESSEES CLAIM OF DEDUCTION U/S.80IB(10) WAS DISALLOWED. AGGRIEVED BY THE ASSESSMENT ORDER DATED 28.12 .2007 PASSED U/S. 143(3) R.W.S. 147 OF THE ACT, THE ASSESSEE FILED APPEAL BEFOR E THE COMMISSIONER OF INCOME TAX (APPEALS). THE FIRST APPELLATE AUT HORITY UPHELD THE FINDINGS OF ASSESSING OFFICER. THE ASSESSEE CARRIED THE M ATTER IN SECOND APPEAL BEFORE THE TRIBUNAL. THE TRIBUNAL VIDE ORDER DATED 2 8.02.2011 REMITTED THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER WITH A DIRECTION TO FOLLOW THE DECISION OF SPECIAL BENCH OF TRIBUNAL IN THE CASE OF BRAHMA ASSOCIATES VS. JCIT IN ITA NO. 1417/PN/2006 FOR THE ASSE SSMENT YEAR 2003- 04. IN ASSESSMENT PROCEEDINGS, GIVING EFFECT TO THE ORDER OF TRIBUNAL, THE ASSESSING OFFICER ALLOWED THE CLAIM OF DEDUCTION U/S. 80IB(10) OF THE ACT TO THE ASSESSEE. HOWEVER, IN THE SAME PROCEEDINGS, THE ASSE SSING OFFICER ISSUED FRESH NOTICE U/S. 148 OF THE ACT ON 30.03.2011 AND ONCE AGAIN REOPENED THE ASSESSMENT TO DISALLOW LABOUR CHARGES AMOUNTING TO RS.70,07,097/-. A GAINST THE ADDITION ON ACCOUNT OF LABOUR CHARGES MADE BY THE A SSESSING OFFICER VIDE ORDER DATED 27.12.2011 PASSED U/S. 143(3) R.W.S 147 AND 2 54 OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE CLAIM OF ASSESSEE AND 3 ITA NO.478/PUN/2015 A.Y.2004-05 DELETED THE ADDITION HOLDING THAT THE ADDITION HAS BEEN MA DE BY ASSESSING OFFICER ON THE BASIS OF CHANGE OF OPINION. NOW, THE DEPARTMENT IS IN SECOND APPEAL BEFORE THE TRIBU NAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE. 3. SHRI AJAY MODI REPRESENTING THE DEPARTMENT SUBMITTED THAT NOTICE U/S. 148 WAS ISSUED TO THE ASSESSEE BY THE ASSESSING O FFICER AS THE ASSESSEE HAD NEVER FURNISHED INFORMATION WITH RESPECT TO LABOUR CHA RGES AMOUNTING TO RS.70,07,097/-. THE ASSESSEE HAS DEBITED RS.7,64,13,469/ - UNDER THE HEAD LABOUR CHARGES BUT AT THE TIME OF ASSESSMENT PR OCEEDINGS, THE ASSESSEE FURNISHED INFORMATION WITH RESPECT TO LABOUR CHAR GES ONLY TO THE TUNE OF RS.6,94,06,372/-. THE LD. DR VEHEMENTLY SUPPORTING T HE ASSESSMENT ORDER PRAYED FOR REVERSING THE FINDINGS OF COMMISSIONER OF I NCOME TAX (APPEALS). FURTHER, TO BUTTRESS HIS SUBMISSIONS, THE LD. DR PLACED RELIAN CE ON THE FOLLOWING DECISIONS: I) DALMIA (P) LTD. VS. COMMISSIONER OF INCOME TAX 3 48 ITR 469 (DELHI) II) CONSOLIDATED PHOTO & FINVEST LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX 281 ITR 394 ( DELHI) III) DR.AMINS PATHOLOGY LABORATORY VS. P.N. PRASAD , JOINT COMMISSIONER OF INCOME TAX (NO.1) 252 ITR 673 (BOMBAY) 4. THE NOTICE OF APPEAL WAS SENT TO THE ASSESSEE THROU GH RPAD ON 05.02.2017 FOR 18.04.2017. THE NOTICE WAS DULY SERVED AS IS EVIDENT FROM ACKNOWLEDGEMENT AVAILABLE ON THE FILE. ON 18.04.2017, THE CAS E WAS ADJOURNED TO 27.07.2017, AS THE BENCH DID NOT FUNCTION O N THE SAID DATE. ON 27.07.2017, THE APPEAL WAS ADJOURNED TO 09.10.2017 FOR IDE NTICAL REASONS. ON 09.10.2017, A FRESH NOTICE OF HEARING WAS ISSUED TO THE ASSESSEE FOR 4 ITA NO.478/PUN/2015 A.Y.2004-05 12.12.2017. ON 12.12.2017, NONE APPEARED ON BEHALF OF ASSESS EE DESPITE SERVICE OF NOTICE. THE ACKNOWLEDGMENT INDICATING SERVICE OF NOTICE IS AVAILABLE ON FILE. IT APPEARS THAT THE ASSESSEE IS NOT SERIOUS IN P URSUING ITS APPEAL. THUS, WE ARE DECIDING THIS APPEAL ON THE BASIS OF SUBMISS IONS MADE BY THE LD. DR AND MATERIAL AVAILABLE ON RECORD. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE LD. DR AN D HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. WE HAVE ALSO CONSIDERED T HE DECISIONS ON WHICH THE LD. DR HAS PLACED RELIANCE. WE OBSERVE THAT IN SE COND ROUND OF PROCEEDINGS BEFORE THE ASSESSING OFFICER, THE ASSESSING OFFIC ER HAS ISSUED NOTICE U/S.148 TO THE ASSESSEE QUESTIONING ALLOWABILITY OF LA BOUR CHARGES. THE NOTICE U/S.148 OF THE ACT WAS ISSUED BY THE ASSESS ING OFFICER ON 30.03.2011 I.E. AFTER THE PERIOD OF FOUR YEARS FROM END OF RELE VANT ASSESSMENT YEAR. UNDER SUCH CIRCUMSTANCES, THE PROVISO TO SECTION 147 GETS ATTRACTED. AS PER PROVISION OF SECTION 147, RE-OPENING OF ASSESSMENT AFTER EXPIRY OF FOUR YEARS FROM END OF THE RELEVANT ASSESSMENT YEAR C AN ONLY BE INITIATED IF INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY RE ASON OF FAILURE ON THE PART OF ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. 6. IN THE PRESENT CASE, INITIAL ASSESSMENT ORDER DATED 1 9.10.2006 WAS PASSED U/S. 143(3) OF THE ACT. THEREAFTER, REASSESSMENT PR OCEEDINGS U/S. 147 R.W.S 148 WERE INITIATED QUA ASSESSEES CLAIM OF DEDU CTION U/S. 80IB(10) OF THE ACT. THE MATTER TRAVELLED UP TO TRIBUNAL. THE CLAIM O F ASSESSEE U/S. 80IB(10) WAS ALLOWED IN PRINCIPLE BY THE TRIBUNAL. THE MATTE R WAS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER TO FOLLOW THE DECISIO N OF SPECIAL BENCH IN THE CASE OF BRAHMA ASSOCIATES VS. JCIT (SUPRA.). IN THE PROCEEDING 5 ITA NO.478/PUN/2015 A.Y.2004-05 ARISING FROM GIVING EFFECT TO THE ORDER OF TRIBUNAL, THE ASSE SSING OFFICER AGAIN INVOKED THE PROVISION OF SECTION 148 OF THE ACT QUESTING P AYMENT OF LABOUR CHARGES. AS HAS BEEN POINTED EARLIER, SECOND RE-OPENING HAS BEEN DONE AFTER THE ELAPSE OF FOUR YEARS FROM END OF RELEVANT ASSESSMENT YEAR. A PERUSAL OF THE ASSESSMENT ORDER DATED 19.10.2006 PASSED U/S.143(3 ) OF THE ACT REVEAL THAT THE ASSESSING OFFICER HAS DEALT WITH THE ISSUE OF LABOU R CHARGES AND HAS APPLIED HIS MIND DURING ASSESSMENT PROCEEDINGS. THE RELEVAN T EXTRACT OF THE FINDINGS OF ASSESSING OFFICER ON THIS ISSUE ARE AS UNDER: WAGES & LABOUR CHARGES : ON VERIFICATION OF TRADING ACCOUNT IT IS SEEN THAT THE ASSESSEE HAS DEBITED RS.7,64,13,469/- TOWARDS WAGES & LABOUR CHA RGES. AFTER CALCULATING PROPORTIONATELY I.E. THE WORK DONE & CL AIMED U/S. 80IB AND OTHER THAN THIS FOR WHICH IT WORKS OUT TO RS.40,23, 245/-. OUT OF THAT IT IS VERIFIED FROM THE VOUCHERS PRODUCED THAT SOME OF TH E VOUCHERS WERE SELF MADE AND SOME OF THE VOUCHERS BELOW RS. 500/- WERE NOT AVAILABLE. THEREFORE, GENUINENESS OF THE PAYMENT DOUBTFUL. T HEREFORE ON ESTIMATE RS.1,00,000/- IS DISALLOWED & ADDED TO THE RETURN O F INCOME OUT OF RS. 40,23,245/-. THUS, IT IS NOT A CASE WHERE THE ASSESSEE HAS FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMEN T. THE ASSESSING OFFICER HAS APPLIED HIS MIND AND HAS TAKEN A CONSCIOUS DECIS ION TO DISALLOW RS.1,00,000/- FROM TOTAL LABOUR CHARGES CLAIMED BY THE ASSE SSEE. THE SECOND RE-OPENING OF ASSESSMENT IS IN CLEAR VIOLATION OF PROVISION TO SECTION 147 AND THE LAW LAID DOWN BY HON'BLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. KELVINATOR OF INDIA 320 ITR 561. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN HOLDING THAT IT IS A CASE OF CHANGE OF OPINION. ACCORDINGLY, THE IMPUGNED ORDER IS UPHELD AND A PPEAL OF THE REVENUE IS DISMISSED. 7. THE CASE LAWS ON WHICH THE LD. DR HAS PLACED RELIANCE A RE DISTINGUISHABLE ON FACTS. HENCE, THEY DO NOT SUPPORT THE CASE OF REVEN UE. 6 ITA NO.478/PUN/2015 A.Y.2004-05 8. BEFORE PERTAINING WITH THE ORDER, WE WOULD LIKE TO OBSER VE THAT THE ASSESSING OFFICER DOES NOT HAVE UNFETTERED POWERS UNDER THE PROVISIONS OF THE ACT TO INVOKE PROVISION TO SECTION 147 AT HIS OWN WH IMS AND FANCIES. THE ASSESSING OFFICER IS A QUASI- JUDICIAL AUTHORITY AND THUS, IS E XPECTED TO FOLLOW WELL SETTLED LAW AND MAINTAIN JUDICIAL DISCIPLINE. THE CANONS PR OVIDED TO THE DEPARTMENT FOR RE-OPENING /REVISIONS ARE TO BE USED JU DICIOUSLY. ON MERE CHANGE OF OPINION THE ASSESSING OFFICER CANNOT REOPEN AS SESSMENT. WHERE THE PROVISIONS OF SECTION 147 R.W.S 148 HAVE BEEN INVOKED AFTER FOUR YEARS, THE ASSESSING OFFICER HAS TO SHOW THAT THE ASSESSEE HAS FAILED TO DISCLOSE FULL AND TRUE MATERIAL NECESSARY FOR ASSESSMENT. THE ABSENCE OF SUCH FINDING BY ASSESSING OFFICER IS FATAL FOR REOPENING OF PROCEEDINGS. IN THE PRESENT CASE, WE OBSERVE THAT THE ASSESSING O FFICER HAS EXCEEDED HIS JURISDICTION IN INVOKING THE PROVISION OF SECTION 1 48 R.W.S 147 OF THE ACT BEYOND THE FOUR YEARS. 9. IN THE RESULT, THE IMPUGNED ORDER IS UPHELD AND APPEA L OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 28 TH DAY OF FEBRUARY, 2018. SD/- SD/- ( . / D. KARUNAKARA RAO ) ( ! /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 28 TH FEBRUARY, 2018. SB 7 ITA NO.478/PUN/2015 A.Y.2004-05 ) * +',- . ', / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS), PUNE-6. 4. THE CIT-5, PUNE. 5. %&' () , * () , +,- , / DR, ITAT, A BENCH, PUNE. 6. './ 01 / GUARD FILE. // % // TRUE COPY // *2 / BY ORDER, 3 (- / PRIVATE SECRETARY * () , / ITAT, PUNE.