M/s. Savi Vision (p) Ltd., New Delhi V. ITO, New Delhi

ITA 6152/DEL/2012

• Counselvise Citation: 615220114 RSA 2012
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 16-10-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 11-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: SSH ASHWANI TANEJA; ROHAN KHARE S
• Keywords: Validity of assessment; Accommodation entries
• Section: 143(3); 142(1); 147; 68; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G : NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO. 6152 /DEL /201 2 ASSESSMENT YEAR: 2001 - 02 M/S SAVI VISION (P) LTD. VS. INCOME TAX OFFICER, B - 56, FLATED FACTORY COMPLEX, WARD - 7(4), NEW DELHI OKHLA, PHASE - III, NEW DELHI (PAN AAECS5163M ) (APPELLANT) (RESPONDENT) APPELLANT BY : S/SH. ASHWANI TANEJA & ROHAN KHARE, ADVOCATES . RESPONDENT BY: SH . B.R.R. KUMAR, SR. DR . ORDER PER S HRI I.C. SUDHIR , JM : 1. THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER ON SEVERAL GROUNDS. IN GROUND NO. 1, THE ASSESSEE HAS QUESTIONED VALIDITY OF THE ASSUMPTION OF JURISDICTION BY THE ASSESSING O FFICER WITHOUT SERVICE OF NOTICES UNDER S ECTION S 148 AND 143(2) OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ). IN GROUND NO. 2, THE ASSESSEE HAS QUESTIONED THE VALIDITY OF ASSESSMENT ORDER WITHOUT COMPLYING WITH THE MANDATORY CONDITIONS OF SECTIONS 147 TO 153 OF THE ACT AS THE REOPENING OF TH E CASE IS BARRED BY LIMITATION AND BEYOND THE JURISDICTION OF THE ASSESSING OFFICER. IN GROUND NO. 3, THE ASSESSEE HAS QUESTIONED THE VALIDITY OF ADDITION OF RS. 2 ITA NO. 6152 /DEL /201 2 ASSESSMENT YEAR: 2001 - 02 5,00,500/ - AS INCOME FROM UNEXPLAINED SOURCES UNDER SECTION 68 OF THE ACT. 2. THE GROUND NO. 4 IS GENERAL IN NATURE. 3. SINCE THE ISSUE RAISED IN GROUND NO. 2 IS REGARDING THE VALIDITY OF ASSESSMENT AS BARRED BY LIMITATION IN VIEW OF PROVISO TO SECTION 14 7 OF THE ACT, WE ADJUDICATE UPON IT FIRST. 4. IN SUPPORT OF GROUND NO. 2, THE LEARNED AR SUBMITTED THAT THE ORIGINAL ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS FAMED ON 17.02.2003. THEREAFTER, AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, THE ASSESSING OFFICER HAS I NITIATED REOPENING PROCEEDINGS UNDER SECTION 147 OF THE ACT WITHOUT MENTIONING IN THE REASONS RECORDED THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT OF THE ASSESSEE FOR TH E YEAR UNDER CONSIDERATION. IN THIS REGARD , HE REFERRED PAGE NO. 3 OF THE PAPER BOOK I.E REASONS RECORDED BY THE I.T.O. FOR INITIATION OF REOPENING PROCEEDINGS. HE SUBMITTED THAT REOPENING HAS BEEN INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM D.I.T. (INVESTIGATION) THAT THE ASSESSEE HAS INTRODUCED ITS OWN MONEY BY WAY OF TAKING BOGUS ACCOMMODATION ENTRIES FROM DIFFERENT PARTIES. THE LEARNED AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. HARYANA ACRYLIC MANUFACTURING COMPANY LTD. VS. CIT , 308 ITR 3 8 (DEL) (SLP DISMISSED ) 3 ITA NO. 6152 /DEL /201 2 ASSESSMENT YEAR: 2001 - 02 II. WEL INTER T RADE P. LTD. A ND AN OTHER VS. INCOME TAX OFFICER , 308 ITR 22(DEL) (SLP DISMISSED) 5. THE LEARNED AR SUBMITTED FURTHER THAT THE REASONS RECORDED ARE VAGUE THAT AS DETAILS OF INFORMATION ON THE BASIS OF WHICH REOPENING HAS BEEN INITIATED, HAS NOT BE EN GIVEN. IN SUPPORT, HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: I. CIT VS. KAMDHENU STEEL & ALLOYS LTD. AND OTHERS, (2012) 248 CTR 33 (DEL) II. SIGNATURE HOTELS P. LTD. VS. ITO, 338 ITR 51(DEL.) 6. THE LEARNED AR ALSO REFERRED PA GE NO. 4 AND 5 OF THE PAPER BOOK TO SUPPORT HIS ARGUMENT THAT WHILE GIVING APPROVAL FOR INITIATION OF PROCEEDIN GS UNDER SECTION 147 OF THE ACT, THE L EARNED COMMISSIONER HAS RECORDED HIS SATISFACTION MECHANICALLY AND WITHOUT APPLICATION OF HIS MIND. IN THIS REGARD, HE REFERRED DECISION S OF HON BLE DELHI HIGH COURT IN THE CASE S OF UNITED ELECTRICAL COMPANY P. LTD. VS . CIT , 258 ITR 317 (DEL.); AND CENTRAL INDIA ELECTRIC SUPPLY COMPANY LTD. VS. ITO, (2011) 333 ITR 237 (DEL) AND THE DECISION OF MUMBAI BENCHES O F ITAT IN THE CASE OF SH. AMARL AL BAJAJ VS. ACIT AND OTHERS, ITA NO. 611(MUM)/2004, FOR A.Y. 1995 - 96, ORDER DATED 24.07.2013. 7. THE LEARNED SR. DR, ON THE OTHER HAND, TRIES TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE REOPENING PROCE EDINGS HAVE BEEN INITIATED AFTER RECORDING THE REASONS , APPLYING THE MIND BY THE ASSESSING OFFICER AND AFTER HAVING DUE APPROVAL FROM THE LEARNED COMMISSIONER. 4 ITA NO. 6152 /DEL /201 2 ASSESSMENT YEAR: 2001 - 02 HE SUBMITTED THAT THE LEARNED CIT(A) HAS DEALT WITH THE ISSUE IN DETAIL ON WHICH HE RELIED UPON. 8. CONSIDERING THE ABOVE SUBMISSIONS THERE IS NO DISPUTE THAT AS PER THE PROVISO TO SECTION 147 OF THE ACT, NO ACTION CAN BE TAKEN UNDER SECTION 147 OF THE ACT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGE ABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUC H ASSESSMENT YEAR BY THE REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OF THE ACT OR IN RESPONSE TO NOTICE ISSUE D UNDER SECTION S 142(1) OR 148 OR TO DISCLOSE FULLY AND TRULY A LL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR. ON PERUSAL OF THE REASONS RECORDED, A COPY WHEREOF HAS BEEN MADE AVAILABLE AT PAGE NO. 3 OF THE PAPER BOOK, WE FIND THAT NOTHING HAS BEEN MENTIONED THEREIN BY THE ASSESSING OFFICER A BOUT THE COMPLETION OF ASSESSMENT UNDER SECTION 143(3) OF THE ACT AND AS TO IN WHAT MANNER INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR H IS ASSESSMENT. FOR A READY REFERENCE, THE REASONS RECORDED ARE BEING REPRODUCED HEREUNDER: REASONS FOR THE BELIEF THAT THE INCOME HAS ESCAPED IN THE CASE OF M/S SAVI VISION PVT. LTD. ASSTT. YEAR 2001 - 2002 . IN THIS CASE INFORMATION HAS BEEN RECEIVED FROM DIT(INVESTIGATION), NEW DELHI THAT DURING THE FINANCIAL YEAR 2000 - 2001 THE AFOREMENTIONED ASSESSEE HAS INTRODUCED ITS OWN MONEY BY WAY OF TAKING BOGUS 5 ITA NO. 6152 /DEL /201 2 ASSESSMENT YEAR: 2001 - 02 ACCOMMODATION ENTRIES FROM DIFFERENT PARTIES, THE DETAILS OF WHICH ARE AS UNDER: SAVI VISION PVT. LTD. N. DELHI 500500 900124 27 TH APR - 00 TEAM METALS VIJAYA RAMNAGAR PVT. LTD. IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE THAT THE INCOME PERTAINING TO THE ASSTT. YEAR 2001 - 2002 HAS ESCAPED ASSESSMENT AT LEAST TO THE EXTENT OF RS. 5,00,500/ - IN THE HANDS OF THE ASSESSEE COMPANY WITHIN THE MEANING OF SECTION 147 OF THE I. TAX ACT , 1961. IN ORDER TO BRING THE ESCAPED INCOME TO THE TAX, KIND APPROVAL IS SOLICITED U/S 151(1) TO ISSUE THE NOTICE U/S 148. 9. AS PER THE PROVISO TO SECTION 147 OF THE ACT, 31.03.2006 WAS THE LAST LIMIT AS FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND IN CASE OF INITIATION OF REOPENING OF PROCEEDINGS AFTER THE EXPIRY OF FOUR YEARS, IT WAS MANDATORY ON THE PART OF THE ASSESSING OFFICER TO RECORD IN THE REASON S BESIDES OTHER THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. AS DISCUSSED ABOVE, NOTHING TO THAT EXTENT HAS BEEN ALLEGED IN THE REASONS RECORDED. IN THE CASE OF HARYANA ACRYLIC MANUFACTURING COMPANY VS. CIT (SUPRA), THE HON BLE JURISDICTION DELHI HIGH COURT HAS BEEN PLEASED TO HOLD THAT IN THE ABSENCE OF ANY ALLEGATION THAT THE PETITIONER HAD FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT, THE ASSESSING OFFICER HAD NO JURISDICTION TO ISSUE THE NOTICE UNDER SECTION 148 AND INITIATE THE ACTION UNDER SECTION 147 OF THE ACT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. SIMILAR VIEW HAS BEEN EXPRESSED BY THE HON BLE DELHI HIGH COURT IN THE CASE OF WEL INTER 6 ITA NO. 6152 /DEL /201 2 ASSESSMENT YEAR: 2001 - 02 T RADE P. LTD. VS. ITO (SUPRA). IN THE ORIGINAL ASSESS MENT FRAMED UNDER SECTION 143(3) OF THE ACT ON 17.02.2003, THE ASSESSING OFFICER HAS NOTED THAT BOOKS OF ACCOUNT WERE FURNISHED WITH THE NECESSARY DETAILS. THE STATUTORY NOTICES ISSUED UNDER SECTION 143(2) WERE DULY COMPLIED WITH BY THE ASSESSEE. THE HON BLE BOMBAY HIGH COURT IN THE CASE OF GERMAN REMEDIES LTD. VS. DCIT, 287 ITR 494 (BOM.) , HAS ALSO EXPRESSED SIMILAR VIEW THAT NOTICE HAVING BEEN ISSUED BEYOND THE PERIOD OF FOUR YEARS FROM THE LAST DATE OF THE RELEVANT ASSESSMENT YEAR WITHOUT ALLEGING ANY FAILURE ON THE PART OF THE ISSUE TO DISCLOSE FULL AND TRUE MATERIAL FACTS, IS LIABLE TO BE SET ASIDE. THE HON BLE HIGH COURT HAS BEEN FURTHER PLEASED TO HOLD THAT WHILE GRANTING APPROVAL, LEARNED CIT WAS REQUIRED TO VERIFY WHETHER THERE WAS ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULL AND TRUE RELEVANT FACTS IN THE RETURN AND TO CONSIDER WHETHER OR NOT THE POWER TO REOPEN IS BEING INVOKED WITHIN A PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. IN VIEW OF THE ABOVE RATIO L AID DOWN IN THE AFORESAID DECISIONS, WE FIND THAT IN THE PRESENT CASE, THE ASSESSING OFFICER WHILE RECORDING THE REASONS TO INITIATE REOPENING OF THE PROCEEDINGS HAS NOWHERE ALLEGED THAT THE ASSESSEE HAD FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACT S NECESSARY FOR ASSESSMENT. HENCE, IN OUR VIEW, THE ASSESSING OFFICER WAS HAVING NO JURISDICTION TO ISSUE NOTICE UNDER SECTION 148 OF THE ACT AND INITIATE ACTION UNDER SECTION 147 OF THE ACT 7 ITA NO. 6152 /DEL /201 2 ASSESSMENT YEAR: 2001 - 02 AFTER FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. WE ORDER ACCORDINGLY. THE ISSUE RAISED IN GROUND NO. 2 IS DECIDED IN FAVOUR OF THE ASSESSEE AND CONSEQUENTLY THE ASSESSMENT IN QUESTION IS HELD NULL AND VOID AS IT WAS WITHOUT JURISDICTION TO FRAME THE SAME IN THE ABSENCE OF RECORDING OF THE ABOVE ALLEGATION . 10. GROUND NO. 2 IS ACCORDINGLY ALLOWED. 11. IN VIEW OF THE ABOVE FINDING, THE ISSUES RAISED IN THE OTHER GROUNDS DO NOT NEED ADJUDICATION. THE SAME ARE DISPOSED OF ACCORDINGLY. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE DECISION IS PRONOUNCE D IN THE OPEN COURT ON 8 T H JANUARY , 201 5 . S D / - S D / - ( B.C. MEENA ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8 T H JANUARY , 201 5 . RK / - COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST . REGISTRAR, ITAT, NEW DELHI