U.P Samaj Kalyan Nirman Nigam Limited, Lucknow V. Dy. Commissioner of Income Tax, Lucknow

ITA 614/LKW/2014

• Counselvise Citation: 61423714 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-09-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 22-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Difference of opinion; Change of opinion
• Section: 143(3); 147; 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 614/LKW/2014 ASSESSMENT YEAR 2005-06 DY.COMMISSIONER OF INCOME-TAX RANGE-VI, LUCKNOW VS U.P. SAMAJ KALYAN NIRMAN NIGAM LTD. LUCKNOW PAN AAACU 1932 C (RESPONDENT) (APPELLANT) SHRI S.C. AGARWAL , ADVOCATE APPELLANT BY SHRI RANJAN SRIVASTAVA, DR RESPONDENT BY 16/09/2015 DATE OF HEARING 07 / 10 /2015 DATE OF PRONOUNCEMENT O R D E R PER SUNIL KUMAR YADAV, JM. THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER OF THE CIT(APPEAL)- II, INTERALIA ON THE FOLLOWING GROUNDS: 1. THAT THE LD. CIT (APPEALS) ERRED IN LAW AND FAC TS IN UPHOLDING THE ORDER OF LD. A.O. PASSED U/S 147 OF THE INCOME TAX ACT. 2. THAT THE NOTICE U/S 148 WAS INVALID AS NO SATIS FACTION WAS RECORDED BY THE LD. A.O. THAT INCOME HAS ESCAPED AS SESSMENT BY REASON OF FAILURE ON THE PART OF THE ASSESSEE TO DE CLARE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. 3. THAT THE LD. A.O. DID NOT HAVE 'REASON TO BELIE VE' AND HAD ERRED IN LAW AND IN FACTS TO CONCLUDE THAT INCOME HAD ESC APED ASSESSMENT. 4. THAT THE LD. CIT (APPEALS) ERRED IN UPHOLDING T HE WRONG FINDING OF FACTS TO THE EFFECT THAT THE ASSESSEE HAD NOT FU RNISHED ANY DOCUMENT REGARDING TOOLS ETC. IS NOT PART OF FIXED ASSETS. 2 5. THAT THE LD. CIT (APPEALS) ERRED IN LAW AND FAC TS IN UPHOLDING THE ACTION OF THE LD. A.O. TO APPLY THE RATIO OF CA SE LAW : 229 ITR 776 WHICH IS NOT APPLICABLE TO THE PRESENT CASE. 6. THAT THE ADDITION IN AN AMOUNT OF RS.25,52,716/ - IS AGAINST FACTS AND LAW AND DESERVES TO BE DELETED. 7. THAT THE ASSESSMENT ORDER IS AGAINST FACTS AN D LAW. 8. THAT THE APPELLANT CRAVES LEAVE TO TAKE ADDITIO NAL GROUNDS OF APPEAL AT THE TIME OF APPELLATE PROCEEDINGS. 2. DURING THE COURSE OF HEARING, THE LD. COUNSEL F OR THE ASSESSEE HAS INVITED OUR ATTENTION THAT THE REOPENING OF THE ASS ESSMENT IS BAD IN LAW AS THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT A FTER FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR WITHOUT RECORDI NG A SATISFACTION THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSE E. LD. COUNSEL FOR THE ASSESSEE FURTHER INVITED OUR ATTENTION THAT THE IMP UGNED ASSESSMENT YEAR INVOLVED IS 2005-06 AND THE REASONS FOR REOPENING W AS RECORDED ON 12.10.2012. THEREFORE, REOPENING WAS DONE AFTER FOU R YEARS. HE HAS ALSO INVITED OUR ATTENTION THAT IN THE ASSESSMENT ORDER THE ISSUE ON WHICH AO REOPENED THE ASSESSMENT WAS ALSO EXAMINED BY THE AS SESSING OFFICER WHILE ALLOWING THE SAME THEREFORE, THE REOPENING IS ON AC COUNT OF CHANGE OF OPINION. IN SUPPORT OF HIS CONTENTION, HE PLACED RE LIANCE UPON THE JUDGMENTS IN THE CASES OF ARUN GUPTA VS. UNION OF INDIA REPOR TED IN 371 ITR 394 (ALLD.), TAO PUBLISHING (P.) LTD. VS. DCIT REPORTED IN 53 TA XMANN.COM 146 (BOMBAY) AND IN THE CASE OF ACI OILS (P.) LTD. VS. DCIT REPO RTED IN 57 TAXMANN.COM 260 (ALLD.). 3. LD. DR ON THE OTHER HAND, HAS PLACED A RELIANCE UPON THE ORDER OF THE CIT(A). 4. HAVING CAREFULLY EXAMINED THE ORDER OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD IN THE LIGHT OF RIVAL SUBMISSION, WE FIND THAT UNDISPUTEDLY, THE ASSESSMENT ORDER INVOLVED IS 2005 -06 AND THE REOPENING 3 WAS DONE VIDE NOTICE DATED 12.10.2012. THE REASONS RECORDED WERE PROVIDED TO THE ASSESSEE VIDE LETTER DATED 12.10.2012 AND FR OM ITS CAREFUL PERUSAL, WE FIND THAT THE ASSESSING OFFICER HAS NOT MADE OUT A CASE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE. MOREOVER, THE REASONS FOR REOPENIN G THE ASSESSMENT RELATE TO THE EXCESS CLAIM OF DEPRECATION AND EXCESS DEDUC TION AND BOTH THE ISSUES WERE EXAMINED BY THE AO WHILE FRAMING THE ASSESSMEN T U/S 143(3) OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT ASSESSMENT WAS REOPENED AFTER FOUR YEARS FROM THE RELEVANT ASSESSMENT YEARS. 5. WE HAVE ALSO CAREFULLY PERUSED THE JUDGMENTS REF ERRED TO BY THE ASSESSEE IN THE CASE OF ARUN GUPTA VS. UNION OF IND IA (SUPRA) APPEARING AT PAGE 2 TO 16 OF THE COMPILATION IN WHICH IT HAS BEE N CATEGORICALLY HELD THAT PROVISION OF SECTION 147 & 148 OF THE ACT INDICATE THAT THE ASSESSING OFFICER HAS WIDE POWERS TO REOPEN THE ASSESSMENT, IF HE HAS REASONED TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. TH EIR LORDSHIP FURTHER HELD THAT WIDE POWER IS CIRCUMSCRIBED AND DOES NOT GIVE JURISDICTION TO THE ASSESSING OFFICER TO REOPEN A COMPLETED ASSESSMENT ON A MERE CHANGE OF OPINION. THE REASONS TO BELIEVE CANNOT BE BASED OR BE AN OUTCOME OF THE CHANGE OF OPINION. IT WAS ALSO FURTHER HELD THAT TH E PROVISO TO SECTION 147 INDICATES THAT IF MORE THAN FOUR YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, IN ADDITION TO THE SATISF ACTION OF THE ASSESSING OFFICER THAT HE HAS REASONS TO BELIEVE, HE MUST ALS O INDICATE THAT THE ASSESSEE HAD FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. IF A NOTICE U/ S 148 HAS BEEN ISSUED WITHOUT THE JURISDICTIONAL FOUNDATION U/S 147 BEING AVAILABLE TO THE ASSESSING OFFICER, THE NOTICE AND THE SUBSEQUENT PROCEEDINGS WOULD BE WITHOUT JURISDICTION AND WOULD BE LIABLE TO BE QUASHED IN A WRIT JURISDICTION. SIMILAR VIEWS WERE EXPRESSED IN THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF TAO PUBLISHING (P.) LTD. VS. DCIT (SUPR A) AND THE JUDGMENT OF THE 4 HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF AC I OILS (P.) LTD. VS. DCIT (SUPRA). 6. UNDISPUTEDLY IN THE INSTANT CASE, NOTHING HAS BE EN BROUGHT OUT BY THE ASSESSING OFFICER THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE. MOR EOVER, THE ISSUE ON WHICH ASSESSMENT WAS REOPENED WAS ALREADY DISCUSSED BY TH E AO IN THE ORIGINAL ASSESSMENT. IN THE LIGHT OF THESE FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSMENT WAS REOPENED WITHOUT THE JURISDICTIONAL FOUNDATION U/S 147 OF THE ACT. THEREFORE, THE NOTICE U/S 148 AND SUBSEQUENT P ROCEEDINGS ARE WITHOUT JURISDICTION AND LIABLE TO BE QUASHED, WE ACCORDING LY FOLLOWING THE AFORESAID JUDGMENT OF THE JURISDICTIONAL HIGH COURT QUASH THE ASSESSMENT AND DELETE ALL THE ADDITION MADE UNDER THIS ASSESSMENT. SINCE, THE ASSESSMENT IS QUASHED WE FIND NO JUSTIFICATION TO ADJUDICATE THE ISSUE ON MERIT. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS STAND A LLOWED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (A.K. GARODIA ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 07/10/2015 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. R EGISTRAR