THE ACIT-1(1), Bhopal V. SHRI MANAS BISWAS, Bhopal

ITA 613/IND/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6038 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 09-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V J BORICHA
• Keywords: Invalid notice; Depreciation; Audit objection; Difference of opinion; Non compliance; Assessment record; Tax effect; Revised return; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 32; 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE , , BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER . . /. I.T.A. NO.613/IND/2016 [[ / ASSESSMENT YEAR: 2006 - 07 ASSISTANT COMMISSIONER OF INCOME - TAX, 1(1), BHOPAL VS. SHRI MANAS BISWAS, PROP. TIMES CREDIT FINANCIAL SERVICES AND TIMES CREDIT SERVICES, 12A, DAYAL COMPLEX, ZONE - II, M.P.NAGAR, BHOPAL / APPELLANT / RESPONDENT . . ./ PAN: ABAPB4347E / APPELLANT BY : SHRI V.J.BORICHA SR. DR / RESPONDENT BY : NONE. / DATE OF HEARING : 01.05.2018. / DATE OF PRONOUNCEMENT : 03 .05.2018 MANAS BISWAS, BHOPAL - : 2 : - / O R D E R PER KUL BHARAT, J.M. : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) - II, BHOPAL, DATED 8 TH MARCH, 2016, PERTAINING TO ASSESSMENT YEAR 2006 - 07. 2 . THE REVENUE HAS FOLLOWING GROUND OF APPEAL : - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 14,00,574/ - MADE BY THE AO U/S 40(A)(IA) OF THE INCOME - TAX ACT, 1961. 3 . THE ONLY EFFECTIVE GROUND IS AGAINST DELETI ON OF RS. 14,00,574/ - MADE BY THE AO FOR NON - DEDUCTION OF TAX AT SOURCE. 4 . BRIEFLY STATED, FACTS ARE THAT THE CASE OF THE ASSESSEE WAS REOPENED FOR ASSESSMENT AND ASSESSMENT U/S 143(3) READ WITH SECTION 147 OF THE INCOME - TAX ACT, 1961, WAS FRAMED VIDE ORDER D ATED 28 TH MARCH, 2013. WHILE FRAMING THE ASSESSMENT, THE AO MADE ADDITION OF RS. 14,00,574/ - ON ACCOUNT OF NON - DEDUCTION OF TAX AT SOURCE AND EXCESS CLAIM OF DEPRECIATION OF RS. 18,132/ - WAS DISALLOWED AND ADDED TO THE INCOME OF THE ASSESSEE. THUS, THE AO COMPUTED TOTAL INCOME AT RS. 26,17,570/ - AGAINST THE DECLARED INCOME OF RS. 11,98,860/ - . MANAS BISWAS, BHOPAL - : 3 : - 5 . AGAINST THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS DELETED THE ADDITION. 6 . NOW, THE REVENUE IS IN APPEAL. 7 . THE LD . DR SUPPORTED THE ORDER OF THE AO AND SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. 8 . NO ONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER, THE WRITTEN SUBMISSION IS ON RECORD. THE WRITTEN SUBMISSIONS OF THE ASSESSEE ARE AS UNDE R : - 3 . RESPONDENT ASSESSEE HEREBY REQUESTS TO KINDLY ACCEPT HIS WRITTEN SUBMISSION AND ALLOW HIS REQUEST FOR NON APPEARANCE IN PERSON DURING THE COURSE OF HEARING IN HIS MATTER. RESPONDENT IN THIS MATTER HEREBY SUBMITS AS FOLLOWS : - 1 . APPEAL FILED BY THE DEPARTMENT MAY NOT BE ALLOWED IN TERMS OF CIRCULAR NO. 21 /2015 DATED DECEMBER 10 TH , 2015 [F NO.279/MISC. 142/2007 - ITJ(PT.)],AS THE TAX EFFECT DOES NOT EXCEEDS RS. 10,00,000/ - WHILE FILING APPEAL BEFORE HON'BLE ITAT. TAX EFFECT IN THE P RESENT CASE IS RS.4,71,434 [RS. FOUR LAKH SEVENTY ONE THOUSAND F OUR HUNDRED THIRTY FOUR] ONLY. TAX EFFECT IN TERMS OF CIRCULAR IS COMPUTED AND ATTACHED WITH SUBMISSION IN ANNEXURE - O 1. 2 . APPEAL FILED BY THE DEPARTMENT MAY NOT BE ALLOWED AS MANAS BISWAS, BHOPAL - : 4 : - HON'BLE CIT[A] - II, BHOPAL RIGHTLY DECIDED IN HER SPEAKING ORDER THAT ' AS PER CHALLAN, IT IS SEEN THAT THE TDS WAS DEPOSITED ON 26.9.2006 BEFORE THE DUE DATE OF FILING THE RETURN. THERE IS MERIT IN THE SUBMISSION OF THE APPELLANT THE DISALLOWANCE COULD NOT BE MADE IN ITS CASE AS RENT WAS ADDED TO THE EXPENSES COVERED U/ S 40 (A)(IA) BY THE TAXATION LAWS (AMENDMENT) ACT, 2006, W.R.E.F. 01.04.2006. FURTHER, AS THE ASSESSEE'S ACCOUNTS BECAME AUDITABLE FOR THE FIRST TIME IN A.Y. 2006 - 07 IT WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE IN F. Y. 2005 - 06 AS PER THE 2ND PROVISO TO SECTION 1941. IN VIEW OF THE FOREGOING FACTS, IT IS HELD THAT THE A.O. WAS NOT JUSTIFIED TO MAKE THE DISALLOWANCE OF RS. 14,00,574/ - U/S 40(A)(IA) OF THE ACT. AS THE ADDITION HAS BEEN DELETED ON MERITS, THE GROUNDS CHALLENGING INITIATION OF PROCEEDING U/S 147/148 REMAIN OF ACADEMIC INTEREST ONLY AND ARE NOT ADJUDICATED SEPARATELY. THE ADDITION IS ACCORDINGLY, DELETED. THE GROUND OF APPEAL IS ALLOWED.' COPY OF THE SAID ORDER ATTACHED WITH THIS SUBMISSION. 4 . APPEAL FILED BY THE DEPARTMENT MAY NOT BE ALLOWED BASED ON GROUN DS OF APPEALS RAISED BEFORE HON'BLE CIT[A) - II, BHOPAL AND FORMING PART OF THIS SUBMISSION ALSO. IT IS PLEADED THAT THESE GROUNDS ALSO BE CONSIDERED BEFORE DECIDING THE APPEAL. GROUNDS BY THE RESPONDENT ASSESSEE ARE AS UNDER : - MANAS BISWAS, BHOPAL - : 5 : - A] DEMAND UNDER SECTION 156 IS COMPUTED ON 19.3.2013 (AS PER THE DEMAND NOTICE NO. 313/79), BEFORE COMPLETION OF ASSESSMENT, DATE OF ORDER IS 28.03.2013. ASSESSMENT FRAMED BY THE LD. AO IS WITHOUT COMPLYING WITH THE LEGAL, FORMALITIES UNDER ACT. SUCH ASSESSM ENT CANNOT BE SAID TO BE WITHOUT PREJUDICE AND THEREFORE ILLEGAL AND BAD IN EYES OF LAW. THE ORDER MADE BY THE LD. DCIT, 1(1) SUFFERS WITH SERIOUS IRREGULARITIES AND NON COMPLIANCE OF LEGAL FORMALITIES. LD. AO MENTIONED IN HER ORDER THAT THE RETURN OF INCOME WAS PROCESSED U/S 143(1) ON 10.06.2007 AT TOTAL INCOME OF 11,98,860/ - , SUBSEQUENTLY, ON PERUSAL OF ASSESSMENT RECORDS, IT WAS NOTICED THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT ON ACCOUNT OF THE FOLLOWING REASON:.. ' , THE CASE WAS NEVER SELECTED FOR SCRUTINY AND ONLY INTIMATION WAS ISSUED U/S 143(1) ON 10.06.2007,WHICH ASS ESSMENT RECODES IS PERUSED BY THE AO WHICH COMPELLED HER TO ISSUE NOTICE U/S 143(2) AFTER A PERIOD OF 6 YEAR AND 1 MONTH, REMAINED UNEXPLAINED. IT IS REQUESTED TO THE LORDSHIP TO KINDLY QUASH THE ASSESSMENT FRAMED BY THE AO. B ) THE ORDER WAS PASSED WITHOUT S ERVICE OF NOTICE U/S 148. LD AO ISSUED TIME BARRED NOTICE U/S 143(2) ON 17.12.2012 ,IT WAS THE FIRST NOTICE ISSUED TO THE ASSESSEE FOR THE AY MANAS BISWAS, BHOPAL - : 6 : - 2006 - 07 AND SUBSEQUENTLY ON 7.02.2013 SECOND NOTICE U/S 143(2) (COPY ATTACHED - O1) WAS ISSUED. SERVICE OF NOTICE IS PRE CONDITION FOR ASSESSMENT AS HELD BY VARIOUS COURTS. IN CIT VS. AVTAR SINGH (2008) 304 ITR (P&H) HELD THAT 'NO EVIDENCE OF SERVICE OF NOTICE - REASSESSMENT PROCEEDINGS ARE NOT VALID. THE REQUIREMENT OF ' SERVICE OF NOTICE CANNOT BE TREATED AS A MERE PR OCEDURAL REQUIREMENT AS WAS FOUND IN CIT V. MINTU KALITA [2002] ITR 334 (GUHATI) RELIED U PON THE DECISION IN R.K.UPADHAYA V. SHANABHAI PATEL [1987] 166 ITR 163 (S.C.). ASSESSEE FILED HIS RETURN OF INCOME RELEVANT TO AY 2006 - 07 ON 16.11.2006. ASSESSEE'S RETURN WAS PROCESSED AND INTIMATION U/S 143(1) WAS ISSUED ON 11.06.2007. NO NOTICE FOR SCRUTINY WAS ISSUED TO THE ASSESSEE FOR THE RELEVANT YEAR. ALL OF A SUDDEN AFTER 6 Y EARS AND 1 MONTH, LD. AO ISSUED NOTICE U/S 143(2) ON 17.12.2012. ORDER PASSED BY THE LD.AO WITHOUT SERVING PROPER NOTICE IS NOT LEGAL AND MAY BE SET ASIDE. C ) THE ONLY REASON FOR ADDITION MADE BY THE LD.AO AS PER ORDER IS 'TAX AUDITOR HAS STATED ABOUT N ON DEDUCTION OF TAX IN FORM 3CD. FURTHER, THE ASSESSEE HAS NOT FURNISHED ANY TDS MANAS BISWAS, BHOPAL - : 7 : - RETURN DURING THE COURSE OF REASSESSMENT PROCEEDINGS'. ASSESSEE FILED HIS RETURN OF INCOME RELEVANT TO AY 2006 - 07 ON 16.11.2006 (COPY ATTACHED - 02).TAX AUDITED REPORT WAS OBTAI NED BY THE ASSESSEE ON 30.06.2006 AND TDS WAS DEPOSITED ON 27.09.2006 (COPY ATTACHED - 03).ON 30.06.2006 AS TDS WAS NOT DEPOSITED BY THE ASSESSEE .TAX AUDITOR MENTIONED THE SAME IN HIS AUDIT REPORT, THE ASSESSEE DEPOSITED THE TDS WELL BEFORE DUE DATE WHICH 3 0.10.2006 FOR AY 2006 - 07.THESE INFORMATION'S WERE THERE WITH AO SINCE FILING OF ITR FOR AY 2006 - 07 I.E. SINCE 16.11.2006,ALONG WITH WHICH TAX AUDIT REPORT. IT WAS NOT NEW INFORMATION GATHERED BY THE LD AO FROM ANY SOURCE. THERE ARE MANY JUDICIAL PRONOU NCEMENTS OF VARIOUS HON'BLE COURTS ON THE SAME ISSUE.: IN GANGA SARAN & SONS (P) LTD. V. ITO , (1981) 130 ITR 1/6 TAXMAN 14, THE SUPREME COURT HELD : 5 . IT IS WELL SETTLED AS A RESULT OF SEVERAL DECISIONS OF DECISIONS OF THIS COURT THAT TWO DISTINCT CONDITIONS MUST BE SATISFIED BEFORE THE INCOME TAX OFFICER CAN ASSUME JURISDICTION TO ISSUE NOTICE UNDER SECTION 147 (A), FIRST, HE MUST HAVE REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT AND SECONDLY, HE MUST HAVE REASON TO BELIEVE THAT SUCH ESCAPEMENT IS BY REASON OF THE OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO MANAS BISWAS, BHOPAL - : 8 : - DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. IF EITHER OF THESE CONDITIONS IS NOT FULFILLE D, THE NOTICE ISSUED BY THE INCOME TAX OFFICER WOULD BE WITHOUT JURISDICTION, THE IMPORTANT WORDS UNDER SECTION 147 (A) ARE 'HAS REASON TO BELIEVE' AND THESE WORDS ARE STRONGER THAN THE WORDS 'IS SATISFIED'. THE BELIEF ENTERTAINED BY THE INCOME TAX OFFICER MUST NOT BE ARBITRARY OR IRRATIONAL. IT MUST BE REASONABLE OR IN OTHER WORDS IT MUST BE BASED ON REASONS WHICH ARE RELEVANT AND MATERIAL. THE COURT, OF COURSE, CANNOT INVESTIGATE INTO THE ADEQUACY OR SUFFICIENCY OF THE REASONS WHICH HAVE WEIGHED WITH THE I NCOME TAX OFFICER IN COMING TO THE BELIEF, BUT THE COURT CAN CERTAINLY EXAMINE WHETHER THE REASONS ARE RELEVANT AND HAVE A BEARING ON THE MATTERS IN REGARD TO WHICH HE IS REQUIRED TO ENTERTAIN THE BELIEF BEFORE HE CAN ISSUE NOTICE UNDER SECTION 147 (A). IF THERE IS NO RATIONAL AND INTELLIGIBLE NEXUS BETWEEN THE REASONS AND THE BELIEF, SO THAT, ON SUCH REASONS, NO ONE PROPERLY INSTRUCTED ON FACTS AND LAW COULD REASONABLY ENTERTAIN THE BELIEF, THE CONCLUSION WOULD BE INESCAPABLE THAT THE INCOME TAX OFFICER COU LD NOT HAVE REASON TO BELIEVE THAT ANY PART OF THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT AND SUCH ESCAPEMENT WAS BY REASON OF THE OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS AND THE NOTICE ISSUED B Y HIM WOULD BE LIABLE TO BE STRUCK DOWN AS INVALID.' MANAS BISWAS, BHOPAL - : 9 : - IN CIT V . KELVINATOR OF INDIA LTD., (2012) 256 ITR 1/123 TAXMAN 433 , THE FULL BENCH OF THE DELHI HIGH COURT HELD THAT SECTION 147 OF THE ACT DID NOT CONFER ANY POWER UPON THE ASSESSING OFFICER TO INITIATE REASSESSMENT PROCEEDINGS ON A MERE CHANGE OF OPINION. IN THE SAID CASE, THE ASSESSEE IN HIS REVISED RETURN OF INCOME HAD WITHDRAWN THE DISALLOWANCE IN RESPECT OF EXPENSES ON REN T AND DEPRECIATION OF THE GUEST HOUSE ON THE GROUND THAT SINCE RENT AN D DEPRECIATION WERE ALLOWABLE U/S 30 AND 32 OF THE ACT, THE SAME CANNOT BE DISALLOWED U/S 37(4) OF THE ACT. THE ASSESSING OFFICER ACCEPTED THE CONTENTION OF THE ASSESSEE IN THE ORIGINAL ASSESSMENT ORDER AND ACCEPTED THE WITHDRAWAL OF THE DISALLOWANCE OF GU EST HOUSE EXPENDITURE AS SUBMITTED BY THE ASSESSEE IN HIS REVISED RETURN OF INCOME. SUBSEQUENTLY, A NOTICE U/S 148 OF THE ACT WAS ISSUED ON THE GROUND THAT THE TAX AUDIT REPORT WAS NOT NOTICED BY THE AO WHILE PASSING THE ORIGINAL ASSESSMENT ORDER. THE FULL BENCH OF THE DELHI HIGH COURT HELD : - 'WE ARE UNABLE TO AGREE WITH THE SUBMISSION OF MR. JOLLY TO THE EFFECT THAT THE IMPUGNED ORDER OF REASSESSMENT CANNOT BE FAULTED AS THE SAME WAS BASED ON INFORMATION DERIVED FROM THE TAX AUDIT REPORT. THE TAX AUDIT REPORT HAD ALREADY BEEN SUBMITTED BY THE ASSESSEE. IT IS ONE THING TO SAY THAT THE ASSESSING OFFIC ER HAD RECEIVED INFORMATION MANAS BISWAS, BHOPAL - : 10 : - FROM AN AUDIT REPORT WHICH WAS NOT BEFORE THE INCOME TAX OFFICER, BUT IT IS ANOTHER THING TO SAY THAT SUCH INFORMATION CAN BE DERIVED BY THE MATERIAL WHICH HAD BEEN SUPPLIED BY THE ASSESSEE HIMSELF. WE ALSO CANNOT ACCEPT SUBMI SSION OF MR. JOLLY TO THE EFFECT THAT ONLY BECAUSE IN THE ASSESSMENT ORDER, DETAILED REASONS HAVE NOT BEEN RECORDED ON ANALYSIS OF THE MATERIALS ON THE RECORD BY ITSELF MAY JUSTIFY THE ASSESSING OFFICER TO INITIATE A PROCEEDING UNDER SECTION 147 OF THE ACT . THE SAID SUBMISSION IS FALLACIOUS. AN ORDER OF ASSESSMENT CAN BE PASSED EITHER IN TERMS OF SUB - SEC (1) OF SECTION 143 OR SUB - SECTION (3) OF SECTION 143. WHEN A REGULAR ORDER OF ASSESSMENT IS PASSED IN TERMS OF THE SAID SUB - SECTION (3) OF SECTION 143 A PR ESUMPTION CAN BE RAISED THAT SUCH AN ORDER HAS BEEN PASSED ON APPLICATION OF MIND. IT IS WELL KNOWN THAT A PRESUMPTION CAN ALSO BE RAISED TO THE EFFECT THAT IN TERMS OF CLAUSE (E) OF SECTION 114 OF THE INDIAN EVIDENCE ACT THE JUDICIAL AND OFFICIAL ACTS HAV E BEEN REGULARLY PERFORMED. IF IT BE HELD THAT AN ORDER WHICH HAS BEEN PASSED PURPORTEDLY WITHOUT APPLICATION OF MIND WOULD ITSELF CONFER JURISDICTION UPON THE ASSESSING OFFICER TO REOPEN THE PROCEEDING WITHOUT ANYTHING FURTHER, THE SAME WOULD AMOUNT MANAS BISWAS, BHOPAL - : 11 : - TO GI VING PREMIUM TO AN AUTHORITY EXERCISING QUASI JUDICIAL FUNCTION TO TAKE BENEFIT OF ITS OWN WRONG. IN CIT VS. LUCAS T.V.S. LTD., (1998) 234 ITR 296, (MAD) HELD THAT REASSESSMENT PROCEEDINGS CANNOT BE REOPENED ON THE BASIS OF AN OPINION FORMED ON THE BAS IS OF AN AUDIT REPORT AND THE SAME IS NOT VALID. THE SAID DECISION WAS AFFIRMED BY THE SUPREME COURT IN CIT VS. LUCAS T.V.S. LTD., (2001) 249 ITR 306/117 TAXMAN 366. IN INDIAN & EASTERN NEWSPAPER SOCIETY V. CIT, (1979) 119 ITR 996/2 TAXMAN 197, THE SUPR EME COURT HELD THAT THE OPINION OF THE INTERNAL AUDIT PARTY AT A POINT OF LAW CANNOT BE REGARDED AS INFORMATION WITHIN THE MEANING OF SECTION 147(B) OF THE ACT FOR THE PURPOSE OF REOPENING AN ASSESSMENT. ALSO AN IMPORTANT LAW WAS EXPLAINED IN VIPAN KHANNA V. CIT [2002] 255 ITR 220 (P&H) ON THE POWERS AVAILABLE TO THE AO UNDER SECTION 147 OF THE INCOME TAX ACT. TIME LIMITS ARE SET OUT IN LAW FOR STRICT OBSERVATION BOTH BY THE ASSESSEE AND OR THE REVENUE. A NOTICE FOR SCRUTINY HAS TO BE ISSUED WITHIN 12 MONT HS FROM THE END OF THE MONTH IN WHICH RETURN IS FILED. WHERE THE AO HAS ISSUED NOTICE UNDER SECTION 147 ACCOMPANIED BY A LETTER MANAS BISWAS, BHOPAL - : 12 : - INDICATING THAT HE WANTED TO VERIFY THE CLAIM OF CARRIAGE EXPENSES AND THE INCOME IN RESPECT OF EACH TRUCK, BESIDES CHECK THE OV ERDRAFT ACCOUNT APART FROM OTHER DETAILS, THERE WAS ABSOLUTELY NO INFERENCE OF ANY ESCAPEMENT OF INCOME, SO AS TO JUSTIFY NOTICE UNDER SECTION 147. THE NOTICE HAS TO BE ISSUED ONLY UNDER SECTION 142(2) IN SUCH CASE. SECTION 147 IS NOT AN EXTENSION OF THE RIGHT UNDER SECTION 143(2), AS OTHERWISE THERE WOULD HAVE BEEN NO PURPOSE IN LAYING DOWN THE TIME LIMIT OF ONE YEAR. OTHER IMPORTANT JUDICIAL PRONOUNCEMENT IN SUPPORT OF CLAIM OF THE ASSESSEE : - HON'BLE HIGH COURT OF ALLAHABAD IN JAGRAN PRAKASHAN LIMITED, VS. CIT, KANPUR NAGAR, (2014) 48 TAXMANN.COM 335 (ALLAHABAD). SUN ENGG. WORKS P.LTD., (1992) 198 ITR 297 (S.C.) SHEO NATH SINGH V. AAC, (1971) 82 ITR 147 ( S. C.) IT IS REQUESTED TO THE LORDSHIP TO KINDLY SET AS IDE THE ASSESSMENT FRAMED BY THE AO AND INSTRUCT TO DELETE THE ADDITIONS MADE BY DISALLOWING EXPENDITURE ON RENT OF RS. 14,00,574/ - AND DEPRECIATION OF RS. 18,132/ - . MANAS BISWAS, BHOPAL - : 13 : - D ) AS PER SECTION 147 IF THE [ASSESSING] OFFICER [HAS REASON TO BELIEVE] THAT ANY INCO ME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153 ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOT ICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE AS THE CASE MAY BE, FOR THE ASSESSMENT YEAR CONCERNED (HEREINAFTER IN THIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR ), FURTHER - EXPLANATION 2. FOR THE PURPOSE OF THIS SECTION, THE FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, NAMELY : - ( A ) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME - TAX; - --- NOT APPLICABLE IN THE PRESENT CASE ------- . ( B ) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS MANAS BISWAS, BHOPAL - : 14 : - NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED E XCESS IVE LOSS , DEDUCTION, ALLO WANCE OR RELIEF IN THE RETURN. IN THE PRESENT CASE ASSESSEE HAS NEITHER UNDERSTATED THE INCOME NOR HAS CLAIMED EXCESSIVE LOSS, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN, (THROUGH TDS WAS DEDUCTED AND DEPOSITED BEFORE DUE DATE BY THE ASSESSEE ) , STILL, IN WILDEST OF IMAGINATION, NON DEDUCTION OF TDS CANNOT SAID TO BE UNDERSTATEMENT OF INCOME OR EXCESSIVE CLAIM FOR LOSS, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN. THE CASE IS NOT FIT FOR ASSESSMENT U/S 147 AT ALL. DECISIONS SIMILAR TO THE PRESENT CASE SUPPORTING ASSESSEES CLAIM ARE : - ITO VS NAWAB MIR BARKAT ALI KHAN BAHADUR, (1974)97 ITR 239 (SC) ITO VS ESSENTIAL MOTTO (2009) 183 TAXMANN 148 (CHD.) DY.CIT VS.SMITHKLINE BEECHAM CONSUMER BRANDS LTD. (2003) 126 TAXMAN 104 (CHD) (MAG.) IN VIEW OF THE ABOVE IT IS REQUESTED TO KINDLY SET ASIDE THE ASSESSMENT MADE U/S 143(3) RWS 147 , AND INSTRUCT TO REMOVE THE ADDITIONS OF RS.14,OO,574/ - BY THE LD.AO. E ) DURING THE COURSE OF HEARING (IN COMPLI ANCE TO TIME BARRED NOTICE U/S 143(2) IT WAS INQUIRED BY THE LEI.AO THAT WHETHER MANAS BISWAS, BHOPAL - : 15 : - ASSESSEE DEDUCTED AND DEPOSITED TAX AT SOURCE FROM THE HEAD 'REN T', AR INFORMED TO THE AO THAT THE TAX WAS DEDUCTED AND DEPOSITED WELL BEFORE THE DUE DATE AND COPY OF CHALLAN FOR THE SAME WAS ALSO PRODUCED FOR VERIFICATION. LD.AO WHILE FRAMING THE ASSESSMENT NOT CONSIDERED THE CHALLAN AND INFORMATION AND MADE THE ADDITION SAYING THAT : THE ASSESSEE HAS NOT FURNISHED ANY TDS RETURNS DURING THE COURSE OF REASSESSMENT PROCEEDING'. POINT NO.5 OF THE ORDER, WHICH IS THE BASE FOR M AKING ADD ITIONS ,INCLUDES TWO SENTENCES : - 1. THE TAX AUDITOR HAS STATED ABOUT THE NON DEDUCTION OF TAX IN FORM 3CD. 2. THE ASSESSEE HAS NOT FURNISHED ANY TDS RETURNS DURING THE COURSE OF REASSESSMENT PROCEEDING. LD.AO FORGET TO MENTION THE STATUS OF ' DEPOSITION OF TDS' ,ASSESSEE PROVIDED THE COPY OF THE CHALLAN, BUT THE SAME WAS NOT MENTIONED AT ALL AND CONSIDERED BEFORE MAKING THE ADDITION. ALSO THE SUBMISSION MADE BY THE ASSESSEE ON 18.03.2013 (COPY ATTACHED - 04) WAS NOT REFERR ED AT ALL, IT WAS MENTIONED IN THE SUBMISSION THAT TDS WAS APPLICABLE ON RENT PAID TO THE EXTENT OF RS.8,38,000/ - ONLY. AND ON REMAINING AMOUNT OF RENT AMOUNTING TO RS.4,66,574/ - .ON WHICH TDS IS NOT AT ALL APPLICABLE AS THE SAME WAS PAID TO 6 DIFFERENT LA NDLORDS AND WERE WELL WITH IN LIMIT OF RS.1.20 LAKHS ON WHICH TDS IS NOT REQUIRED TO BE DEDUCTED. MANAS BISWAS, BHOPAL - : 16 : - IT IS PLEADED BEFORE THE LORDSHIPS TO KINDLY DELETE THE ADDITION OF RS.14,00,574/ - ERRONEOUSLY MADE BY THE AO. E ) LD. AO PASSED THE ORDER WITHOUT REFERRING THE MATERIAL SUBMITTED BY THE ASSESSEE AND FACTS OF THE CASE. ASSESSMENT IS MADE IN HURRY AND WITHOUT CONSIDERING ACTUAL FACTS OF THE CASE. IT IS REQUESTED TO KINDLY SET ASIDE THE ASSESSMENT MADE WITHOUT REFERRING FACTS AND MATERIAL BY THE AO. 9 . WE HAVE CON SIDERED THE FACTS, WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE CONTENTION OF THE ASSESSEE THAT THE PRESENT APPEAL IS NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT, IT IS DEMONSTRATED BY THE REVENUE THAT THE CIRCULAR NO. 21/2015 DATED 10 TH DECEMBER, 2015, IS NOT APPLICABLE AS THE REOPENING WAS DUE TO AUDIT OBJECTION FALLS IN EXPLANATION CLAUSE OF THE SAID CIRCULAR. IN VIEW OF THIS, THE APPEAL IS ADMITTED AND IS BEING DECIDED ON MERIT. THE ASS ESSING OFFICER MADE ADDITIONS SOLELY ON THE BASIS THAT THE TAX WAS NOT DEDUCTED . IT IS STATED BY THE ASSESSEE THAT THE TAX WAS DEDUCTED AND DEPOSITED BEFORE THE DUE DATE OF FILING OF RETURN. IN THE WRITTEN SUBMISSION, IT MANAS BISWAS, BHOPAL - : 17 : - IS STATED THAT THE COPY OF CHALLAN IS ATTACHED. HOWEVER, WE FIND THAT THERE WAS NO SUCH CHALLAN ATTACHED WITH THE WRITTEN SUBMISSION. WE, THEREFORE, DEEM IT APPROPRIATE TO SET - ASIDE THIS ISSUE TO THE FILE OF THE AO TO DECIDE IT AFRESH AFTER VERIFYING WHETHER THE ASSESSEE HAS DEPOSITED THE T AX BEFORE THE DUE DATE OF FILING OF RETURN. IF HE FINDS SO, THEN THE ADDITION SO MADE MAY BE DELETED. 10 . IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 0 3 .0 5 .2017. S D / - ( ) (MANISH BORAD) ACCOUNTANT MEMBER S D / - ( ) (KUL BHARAT) JUDICIAL MEMBER INDORE; DATED : 0 3 /0 5 /2018 CPU/SPS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUARD FILE. BY ORDER PRIVATE SECRETARY/DDO, INDORE